KBN VERY WELL POSITIONED HEADING INTO Q4

Nyhet

KBN VERY WELL POSITIONED HEADING INTO Q4

KBN reached the end of Q3 2017 with over 90 per cent of its annual total funding volume raised across a variety of markets.

Throughout the summer, due to conducive market conditions KBN continued to access the markets, with a focus on shorter maturities in the US dollar market.  Funding highlights included a successful new 2-year USD 1.0bn September 2019 Benchmark, a Tap of KBN’s September 2021 USD FRN and a USD 500m Fixed Rate November 2018 trade.  In addition, KBN maintained its institutional presence in the Australian dollar market, with three Taps on outstanding bonds.

As of 30 September, KBN has raised approximately USD 13 billion equivalent, via 235 individual trades across 13 different currencies.

 

Q2 RESULTS RELEASED - STRONG UNDERLYING OPERATIONS

“We once again achieved strong underlying operations and good margins for KBN’s core activities. KBN’s lending margins have been high so far in 2017. This has been necessary in order to ensure KBN will satisfy the new capital requirements that will enter into force on 31 December 2017, and that it now meets the requirement for it to have an unweighted core capital ratio of 3% with effect from 30 June 2017”, comments President & CEO Kristine Falkgård.

Click here to read the full press release

Click here for the Q2 report

 

USD BENCHMARK RETURN

On Wednesday 30th August 2017, Kommunalbanken Norway (“KBN”), rated Aaa/AAA (stable / stable), launched a new USD 1 billion 2-year RegS/144a benchmark at mid-swaps plus 4bps. This equated to a spread of 25.1bps over the benchmark UST 1.250% Aug 2019. The transaction carries a 1.500% semi-annual coupon with a re-offer yield of 1.588%.

This successful new issue represents KBN’s third US dollar benchmark this year. Despite increased headline risk at the time of launch, KBN demonstrated its safe haven status by attracting a strong flight-to-quality bid. 

The orderbook was high quality, with just under 50 accounts participating.  The transaction enjoyed KBN’s highest distribution into the Central Bank / Official Institutions account groups in recent years, demonstrating the ongoing and expanding focus from this core investor group.

Click here to read the full press release

 

BUILDING NORWEGIAN SOCIETY FOR 90 YEARS

On 1st September 2017, KBN celebrated having helped finance welfare service provision by the Norwegian local government sector for 90 years.

Initially KBN primarily provided loans to refinance local government sector debt. The 1920s were characterised by economic challenges with prices falling and investments plummeting, and many municipalities struggled to meet the instalments on the significant borrowings they had built up. As the debt crisis gradually subsided, KBN transitioned to providing municipalities with normal loans, and therefore came to play a key role in financing municipal Norway’s role in society and its construction of the welfare state following World War II.

Via municipalities and county authorities, KBN has helped finance the construction of power stations before and after World War II, the construction of schools in the 50s and 60s, and a range of reforms including the HVPU Reform [deinstitutionalisation of people with intellectual disabilities], the Nursery Reform and the Coordination Reform [coordination between primary and secondary healthcare]. In short, KBN has been an integral part of the creation of the modern welfare society in Norway. 

Today all municipalities and county authorities have loans from KBN.

Click here to read more about KBN’s history

 

FUNDING OUTLOOK

KBN’s funding programme has progressed well in 2017 and it is expected there will be limited funding requirements for Q4.  The remaining funding will likely be raised through a combination of institutional trades, private placements and issuance in retail markets.  Markets and needs permitting throughout the quarter, KBN may also look to issue again in the public Green Bond market.

For 2018 the KBN funding programme is expected to be in the USD 12bn to 14bn range.