Taking advantage of the supply void followed by the latest central banks meetings, MuniFin priced a GBP 250 million fixed-rate benchmark due 22 July 2027. The books were opened 10 am London time on Wednesday morning with initial guidance released at UKT+60bps area, equivalent to SONIA +19bps.
Investor demand was strong from the outset and the books closed in just couple of hours in excess of GBP 280 million. The transaction pays an annual coupon of 5.125% and a spread of +60bps over the 1.250% UKT due July 2027.
“The Sterling market is an important funding market for us, so it was great to return after a little break. We are grateful for the support from our investors”, says Karoliina Kajova, Senior Manager at MuniFin.
“Huge congratulations to the MuniFin team for a highly successful return to the GBP market. MuniFin was quick to capitalise on the constructive market backdrop, allowing them to extend their benchmark GBP curve at a competitive cost”, says Alex Paterson, Head of SSA DCM at Barclays.
Barclays acted as the bookrunner on the transaction, together with Citi and Bank of America.
The orderbook was of the highest quality as 50% was allocated to banks and 44% to central banks and other official institutions. Rest of the orderbook went to Fund Managers (4%) and insurance and pension funds (2%). Geographically, the bonds were distributed to investors from the UK (57%), followed by Asia and Middle East (42%) and France (4%).
“Achieving such a high-quality, oversubscribed orderbook whilst re-opening the GBP SSA market in the second week of August is testament to the depth of MuniFin’s following from its global investor base. Barclays is delighted to have been able to support this transaction”, Paterson continues.
With this transaction, MuniFin has completed over EUR 7.5 billion of its EUR 9-10 billion long-term funding target for the year.
Read the press release:
|Issuer:||Municipality Finance Plc (“MuniFin”)|
|Ratings:||Aa1 / AA+ (both Stable) by Moody’s / S&P|
|Format:||Senior, Unsecured, Reg S, Registered|
|Size:||GBP 250 million|
|Pricing Date:||9th August 2023|
|Settlement Date:||16th August 2023|
|Maturity Date:||22nd July 2027|
|Coupon:||5.125%, Fixed, Annual, ACT/ACT|
|Reoffer Spread:||UKT 1 ¼ 07/22/27 (Mid) + 60 bps|
|Joint Bookrunners:||Barclays / BofA / Citi|
Comments from the bookrunners
“Congratulations to the MuniFin team for a hugely successful return to the sterling market. This transaction strategically extends the MuniFin sterling curve and captured focus during a quieter period for the SSA sector. Investors also appreciated high quality issuance in an under-supplied tenor thus far in 2023.”
Robert Matthews, SSA DCM, Bank of America
“Congratulations to the MuniFin funding team for their first new Sterling benchmark since January 2022! Although August is typically a quieter month in primary markets, the MuniFin team took advantage of a stable and constructive market backdrop to price a successful £250 million transaction, which was well supported by high quality accounts. Citi is delighted to have worked with MuniFin on this deal which re-affirms their commitment to the Sterling SSA market.”
Ebba Wexler, Head of SSA DCM, Citi
Joakim Holmström – Executive Vice President, Capital Markets and Sustainability
+358 50 4443 638
Antti Kontio – Head of Funding and Sustainability
+358 50 3700 285
Karoliina Kajova – Senior Manager, Funding
+358 50 5767 707
Lari Toppinen – Senior Analyst, Funding
+358 50 4079 300
Aaro Koski – Analyst, Funding
+358 45 1387 465