KBN factsKBN's mandate is to secure competition in the market for municipal loans enabling the local government sector to provide the most welfare to its inhabitants for each krone available.
A NORWEGIAN GOVERNMENT FUNDING AGENCY
- Established by a special Act of Parliament in 1926/1999
- 100 per cent central government owned
- KBN is classified as a state instrumentality serving a public policy function of providing low cost funding to the Norwegian local government sector
- KBN benefits from strong direct support through a maintenance statement from the central government.
- KBN is the largest lender to Norwegian municipalities providing close to 50 % total credit to the sector.
- Excellent asset quality, no loan losses in 90 years of operations
- All loans limited to Norwegian local government, primary welfare investments
- Conservative risk management, solid capital base
- KBN represents the closest proxy to Norwegian sovereign risk in international markets
- The objective of KBN's funding operations is to meet growing borrowing requirements through a well diversified funding base
- KBN is committed to preserving long-term investor relationships through:
- Regular issuance of strategic benchmark transactions in USD and EUR.
- A visible presence in other institutional public markets.
- A flexible issuer of private placements offering investors a variety of structures and maturities.
- Regular issuance in retail markets.
- 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 13-14 billion equivalent in 2017.
NORWEGIAN LOCAL GOVERNMENT
- A provider of vital services to the Norwegian public, in areas such as healthcare, education, transport and infrastructure
- «In essence, Norwegian local and regional governments act as delegated arms of the central government in the provision of public services. We view the Norwegian LRG sector’s overall creditworthiness as robust.» (Standard & Poors – July 2016).
- The close relationship between the central government and the municipal sector is characterised by strict central government control, regulation and oversight
- Norwegian local government are prohibited by law from filing for bankruptcy (Local Government Act §55).
THE NORWEGIAN ECONOMY
- The Kingdom of Norway (AAA/Aaa) is a strong, diversified economy with solid fundamentals and a highly developed industrial base.
- Norway has one of the world’s highest GDP per capita and tops the standard of living (UN Human Development Index).
- Capacity utilization in the economy has remained high, the current account surplus considerable (7% 2016) and government finances are solid.
- Currently, Norway’s SWF, the State Pension Fund - Global, stands at approximately USD 1 trillion (approximately 250 % of 2016 GDP and 600% of the national budget). For more information on the SWF, visit www.nbim.no
- KBN was one of the first European SSA issuers to launch a public green bond earmarked towards green projects.
- In 2013, with increasing global demand for sustainable and responsible investments and projects with a climate benefit, KBN completed its inaugural public US dollar green bond. Since then KBN has issued a further two public US dollar green bonds and has cemented itself as a regular issuer in this market.
- The local government sector is regarded as vital in securing Norway’s goals under the Paris Climate Agreement, a target greenhouse gas emission reduction of at least 40% by 2030, compared to 1990 levels.
- In June 2016, KBN updated its Green Bond programme and was rewarded a Dark Green shading by CICERO. In 2017, KBN has been elected executive committee member of Green Bond Principles (GBP), the leading international green bonds standard.
- As of August 2017, KBN’s Green Loans outstanding were USD 1.7 bn. For a complete list of projects funded by KBN Green Bonds, please see our Environmental Impact Report 2016