Yesterday, MuniFin issued its first USD benchmark of the year. The USD 1 billion benchmark is due 15 December 2027 and pays a semi-annual coupon of 4.125%. In time of pricing, the spread was set at SOFR MS +45bps.
“We were anticipating a high USD SSA supply due to the central bank meetings next week, so we decided to announce the mandate early on Monday morning to secure a favourable issuance window. This paid off: the books opened on Tuesday morning with quality indications of interest already covering the whole trade”, says Analyst Lari Toppinen from MuniFin Funding team.
Later that afternoon, MuniFin was able to close the books in excess of USD 2.6 billion with a very high-quality orderbook. Central banks and other official institutions took 70.6% of the bonds, followed by banks at 25.6%. Asset Managers took 3.6% and the rest went to corporates.
“This is a stellar result and a demonstration of our solid investor engagement. We couldn’t be happier”, Toppinen continues.
Geographically, most of the investors came from Europe (excluding Nordics), followed by Americas at 27.6%, Asia Pacific at 19%, Africa and Middle East at 15% and Nordics at 7%.
With this transaction, MuniFin has completed over two thirds of its long-term funding target for 2023.
Transaction details
| Issuer: | Municipality Finance Plc (“MuniFin”) |
| Ratings: | Aa1 / AA+ (both Stable) by Moody’s / S&P |
| Format: | RegS/144A |
| Size: | USD 1 billion |
| Pricing Date: | 6th June 2023 |
| Payment Date: | 13th June 2023 |
| Maturity Date: | 15th December 2027 |
| Coupon: | 4.125%, Fixed, semi-annual, 30/360 |
| Reoffer Spread: | SOFR MS + 45 bps | CT5 + 28.3bps |
| Joint Bookrunners: | Barclays / BMO / Daiwa / Nomura |
Comments from the Bookrunners
“Congratulations to the MuniFin team for an outstanding outcome for its first USD benchmark transaction in 2023, a highly successful new short 5-year. Following the volatility connected to the US Debt Ceiling topic, MuniFin was quick to seize a stable execution window, and despite a wave of USD issuance from SSA peers, generated a well-diversified final orderbook that was more than 2.5x oversubscribed. Furthermore, MuniFin was able to achieve 2bps of tightening to price with minimal new issue concession, which acts as a testament to MuniFin’s strong following from its global investor base. Barclays is honoured to have supported this transaction.” Alex Paterson, Head of SSA DCM, Barclays
“Congratulations to the MuniFin team for a very successful USD outing in what has been a very busy primary market following the resolution of the US Debt Ceiling over the w-end. The transaction was largely oversubscribed and pricing was flat to fair value. Around 70 investors participated in the transaction which is testament to the strong sponsorship that MuniFin enjoys in the USD market.” Massimo Antonelli, Managing Director, BMO Capital Markets
“Congratulations to the MuniFin team on an outstanding result. The issuer successfully navigated a busy primary USD SSA market as well as an adverse movement in swap spreads, whilst extending their USD Benchmark curve to a new December 2027 maturity. The quality and level of demand fully warranted a 2bps price tightening and is further testament to the high regard in which MuniFin is held.” – Jez Walsh, Head of Syndicate, Daiwa Capital Markets Europe
“It has been almost a year since Municipality Finance last issued a USD benchmark outing and they did not disappoint! The new Dec-2027 at more than 2.5x over subscribed, is a testament to the credits recognition, global appeal and haven status. With a granular orderbook and diversification across both geography and investor type, it reiterates the persistent investor work undergone by the whole Funding Team, in positioning Municipality Finance as top tier name. Congratulations!” – Mark Yeomans, Managing Director, Public Sector DCM, Nomura.
Further information
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 – Analyst, Funding
+358 50 4079 300
Aaro Koski – Analyst, Funding
+358 45 138 7465