Credit rating agency Standard & Poor’s has confirmed that the long-term credit rating of Municipality Finance will remain AAA (stable), at the best possible level. The short-term credit rating also remained at the best possible level, A-1+. Two weeks ago, Municipality Finance also received confirmation from Moody’s that its credit rating remains at the best possible level.
The main rationale behind the credit rating decision by S&P was the high-quality loan portfolio of Municipality Finance. The portfolio consists solely of municipal loans and loans related to state-subsidised housing production, both of which are zero-risk weighted in capital adequacy calculations of financial institutions. S&P also noted that Municipality Finance has very strong liquidity. The Finnish local government financing system, which is formed by Municipality Finance and the Municipal Guarantee Board that guarantees the funding operations of Municipality Finance, as well as the central bank limit were also seen as supporting factors for the credit rating.
S&P also considered it positive that Municipality Finance has systematically continued to strengthen its own funds to adapt to the increasing leverage ratio requirements that will be introduced by the stricter regulation of credit institutions. In addition, S&P gave Municipality Finance recognition for its conservative risk management and efficient monitoring tools.
“Municipality Finance remains the only Finnish financial institution that has the best possible credit rating from the two most significant credit rating agencies. This provides excellent support for our funding operations on the international financial markets and further strengthens our position as the most important provider of financing to the local government sector,” says Pekka Averio, President and CEO of Municipality Finance.
Aside from the Republic of Finland, Municipality Finance is the only institution in the Euro zone that has a AAA/Aaa credit rating with a stable outlook from two credit rating agencies.
Further information:
Pekka Averio, President and CEO, tel. +358 500 406 856
Esa Kallio, Executive Vice President, Deputy to CEO, tel. +358 50 337 7953
Marjo Tomminen, Senior Vice President, CFO, tel. +358 50 386 1764