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MuniFin debuts with A$200 million deal |
Finland’s Municipality Finance (MuniFin) (AAA/Aaa) priced its first Kangaroo issue on April 11 with a A$200 million (US$166 million), four-year note, co-led by Westpac Institutional Bank (WIB) and Nomura.
The bond has a 6.5 per cent coupon and a spread of 43.5 basis points over the 5.75 per cent June 2011 Australian government bond, which equates to seven basis points below swap.
MuniFin has been waiting for some time to issue its first Kangaroo, having committed to fundraising in the market and roadshowing in 2006 and again in March this year, just before the inaugural deal. However, the agency encountered some teething pains on the way to its first issue.
“The feedback after our roadshow was very positive, but we made one mistake in that we started to prepare documentation after the roadshow rather than before, which meant that our trail was already a little cold,” says Timo Ruotsalainen, MuniFin’s head of international funding. He adds that the agency was also advised by its bankers to hold back on its first deal as “we got feedback that investors were exhausted of new names”.
Despite this, Esa Kallio, executive vice president of customer finance and funding at the agency, says MuniFin is “very pleased” with the deal and sees the Kangaroo market as one to which it will return.
MuniFin has compared Australia to Switzerland, where it has raised €500 million (US$677 million) in bond issuance, as a market for funding. The agency is relatively small in global terms, with an annual funding requirement of €1 billion – 1.3 billion. This year the funding requirement has increased to €1.8 billion.
According to WIB, 72 per cent of the A$200 million was acquired by Australian investors, with the balance going offshore. Kallio says this breakdown is “very much in line with our expectations prior to the issuance”.
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Last Updated ( Thursday, 19 April 2007 )
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