Funding breakdown

The objective of KBN's funding operations is to meet growing borrowing requirements in the Norwegian local government sector. This is done through a diversified funding base, effectively achieved by regular issuance of USD and EUR benchmark transactions, a visible presence in other public markets and offering flexibility through private placements. In 2016, KBN issued a total of USD 10 billion via 303 individual transactions in 12 different currencies.

KBN is targeting an estimated total issuance of USD 11-12 billion equivalent in 2017.

Benchmark

KBN is committed to further developing its benchmark strategy by:

  • Strengthening our presence as a recurrent, high quality benchmark borrower.
  • Carefully considering timing period and demand to meet key investor appetite and increasingly widen distribution.
  • Securing performance through fairly-priced, fully book-built transactions and a well managed execution process.
  • Closely co-operating with lead managers to ensure continued secondary support and performance.
  • KBN's current funding requirement allows for 2-3 annual USD benchmark transactions.
  • As a natural continuation of KBN's diversified funding strategy and given the size of KBN's funding programme, in 2014 KBN issued its inaugural EUR denominated benchmark.  KBN plans to be a regular issuer of EUR benchmarks going forward, albeit on a less frequent basis than in USD.  KBN has issued 3 EUR denominated benchmarks.  

Benchmark issuance target: 30-40% of overall funding

 

Retail issuance

  • KBN welcomes new retail ideas and focuses on developing KBN as a household name among retail investors in Europe and Asia.
  • KBN continually monitors new local markets for opportunities to enrich its funding strategy.
  • A key factor in KBN's success is our flexibility to meet demand for various currencies and tenors and our short response time on new ideas.
  • Continue to focus on the Japanese retail, or Uridashi market as the major component of our retail activities.

Retail issuance target: 20-35% of overall funding

 

Private placements

  • KBN aims to maintain a high degree of flexibility to accommodate investor needs for tailor-made private placements.
  • KBN offers a variety of structured products.  KBN is open for maturities from 3 months to 30 years, in bullet and multi-callable structure varieties (max. 15 year maturity for bullets), with a minimum issuance size of USD1m or JPY100m.
  • KBN facilitates global funding enquiries through KBNet, its online funding interface for financial intermediaries.

PP issuance target: 5-15% of overall funding

 

Institutional niche markets

KBN focuses on strong investor diversification by continuing to nurture its presence in smaller public markets. Our key markets today include:

  • Switzerland
  • Australia
  • New Zealand
  • Canada
  • United Kingdom
  • Norway

Institutional public issuance target: 20-30% of overall funding