Client stories

First MuniFin Green bond in 2022 receives strong reception

Building a better future for Finland

Municipality Finance is one of Finland’s largest credit institutions[1]. Established in 2001[2] for the purpose of developing the Finnish welfare state, MuniFin offers lending exclusively to Finnish municipalities, their majority-owned companies, municipal federations, and non-profit housing organisations.

The financial institution, which is owned by Finnish municipalities, the public sector pension fund Keva and the Republic of Finland, is also a pioneer in sustainable financing: it is the first credit institution in Finland to offer green finance for environmentally-friendly projects and was the first Finnish issuer of green bonds[3]. Equally, MuniFin is the first Nordic SSA public sector credit institution to offer social finance for domestic projects that promote equality, communality, safety, welfare or regional vitality[4].

MuniFin’s green and social bonds have their own frameworks and project portfolios. The Green Bonds Framework was originally published in 2016 and currently has seven project categories: sustainable buildings, sustainable public transportation, water and waste water management, renewable energy, energy efficiency, waste management, and environmental management. MuniFin’s Social Bond Framework followed in February 2020, dividing projects into three categories: social housing, welfare (healthcare, sports, and culture) and education.

ESG investors welcome MuniFin’s first 2022 issuance with high orders

Looking to launch its first Green Bond for 2022, MuniFin turned to NatWest to support in the role of Joint Lead Manager – after the team had also lead-managed the €500m tap of MuniFin’s Social Bond in October last year.

Identifying a suitable window amidst a volatile market environment, the deal team announced the new €500m green fixed-rate benchmark, due in 2029, to the market as a “no grow” transaction. This pre-defined size limit combined with strong demand for green assets and MuniFin’s excellent reputation with ESG investors, meant that momentum was strong from the outset. Two hours after order books opened, the volume reached over €1.4bn, allowing MuniFin to tighten the price, with the final spread set at MS-11bps for MuniFin’s 7th Green bond since their debut in 2016.

High-quality, dark-green ESG investors made-up almost a third of the book, with nearly 80% of the final transaction going to investors with some degree of ESG shading. European investors took the majority of the allocation: 25% went to investors in DACH countries, 23% to BeNeLux, 16% to UK investors, and 12% to French investors.

MuniFin plays crucial role in helping communities to become sustainable

Kerr Finlayson, Head of FBG Syndicate, NatWest, commented: “A fantastic return to the green bond market for MuniFin. The quality of the investor base came through from the outset. Against a more volatile backdrop, the extremely positive reception exemplifies the quality and demand for the MuniFin name and support for their Green Framework. We are very proud to have been involved, and this successful transaction also demonstrates NatWest’s commitment to support our customers on their sustainability journey by offering market insights, innovative sustainable finance solutions and access to a broad ESG investor base.”

Caroline Haas, Head of Climate and ESG Capital Markets, NatWest, said: “We’re delighted to have been able to support MuniFin again after working together on their Social bond tap last year, alongside their 10Y Green the year prior. Municipalities and credit institutions such as MuniFin play a crucial role in helping communities and society become more sustainable and fulfil the net zero agendas, and at NatWest we’re here to guide our customers through every step of their sustainability journey to create a greener and fairer economy.”

Lari Toppinen, Analyst, from MuniFin Funding team said: “The multiple times oversubscribed transaction shows us, once again, how solid our investor base truly is. Despite the volatile atmosphere in the market, our green bond also attracted brand-new investors. We are extremely pleased with the outcome and especially the great support from the ESG investor community.”


[1] Municipality Finance (MuniFin) is the third largest credit institution in Finland as measured by total assets (Source ADV Ratings Jun 2021).

[2] MuniFin was established in 2001 after the merger of the ‘old’ Municipality Finance (established in 1989) and Municipal Housing Finance (established in 1993).

[3] Reuters, Sept 2016

[4] European Association of Public Banks, Sept 2020


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