28 March 2018
With total issuance of about $627 million in 2017, public sector body MuniFin was the biggest issuer of local authority green bonds.
Issuer: Municipality Finance (MuniFin)
Size: €500 million ($588 million)
Maturity: 7 September 2027
Use of proceeds: Clean transportation, energy efficiency, renewable energy, sustainable water management
Credit rating: Moody's (Aa1)
Lead managers: BNP Paribas, Crédit Agricole CIB, DZ Bank, Nordea
External review: Cicero
Other highlights/notable features: The most oversubscribed benchmark bond in MuniFin's history
The Helsinki-based company, which provides financing for Finnish municipalities and government-subsidised housing, came to market with two issues.
In October, it completed an AUD50 million ($39 million), 10-year green private placement with Japanese mutual insurer, Fukoku Life.
In the same month, MuniFin issued a €500 million ($588 million) bond, which was the most oversubscribed SSA green deal in history, according to one of the bankers involved in the transaction – and which was voted SSA Green Bond of the Year.
100 investors participated in the transaction – the most ever for a MuniFin benchmark transaction – of which more than 30 were new investors. The company said this was "an outstanding result from a diversification point of view".
During bookbuilding, it was able to tighten pricing by three basis points, with the final spread set at seven basis points below mid-swaps.
In addition, the tight pricing affected MuniFin's whole euro curve, as well as the spread between its bonds and Finnish government paper. After issuance, the company's two other euro-denominated benchmark bonds tightened by between three and eight basis points, which "clearly shows that there is a pricing advantage for green bonds, which has also positively affected MuniFin's non-green issuance," it said.