From left: Thomas Wrangdahl, Head of Lending at NIB; Henrik Normann, NIB President & CEO; and Heikki Niemeläinen, CEO at MBG

From left: Thomas Wrangdahl, Head of Lending at NIB; Henrik Normann, NIB President & CEO; and Heikki Niemeläinen, CEO at MBG

27 Jun 2019

NIB provides stand-by credit facility to Finnish Municipal Guarantee Board

NIB and the Finnish Municipal Guarantee Board (MGB) have agreed a stand-by revolving credit facility of EUR 200 million with a maturity of five years. The facility will support the municipal finance ecosystem in Finland, which provides funding for investments in social housing, education, healthcare and care for the elderly.

The MGB’s purpose is to safeguard and develop the joint funding of municipalities. To fulfil this purpose, the MGB guarantees the obligations of the senior debt programmes of Municipality Finance Plc, or MuniFin, a publicly owned credit institution that specialises in the financing and financial risk management of the local government sector in Finland.

Finnish municipalities use funding from MuniFin to finance various investments in social infrastructure, such as hospitals, schools and day care centres.

The MGB guarantee ensures that MuniFin meets its obligations and allows it to function as the debt management office of Finnish municipalities and municipally owned companies, as well as other entities in accordance with the MGB law.

The stand-by credit facility agreed with NIB will function as a temporary buffer for the MGB and allow it to provide a short-term capital injection to Munifin if needed.

The facility enables the finance mechanism of the Finnish local government sector to enjoy the benefits of NIB’s triple-A credit rating. This will indirectly support municipal investments in public services.

The Finnish Municipal Government Board is a government-related entity, established in 1996 by the Finnish Parliament. The MGB consists of 295 Finnish municipalities and has received an Aa1/AA+ rating from Moody’s and S&P.

NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.

For further information, please contact

Nordic Investment Bank:

Ms Marjo Harri, Senior Director, Head of FI & SME, at +358 10 618 0227, marjo.harri@nib.int

Ms Lisa-Maria Altenberger, Communications Officer, at +358 10 618 0234, lisa-maria.altenberger@nib.int

Municipal Guarantee Board:

Mr. Heikki Niemeläinen, CEO, at +358 40 589 8348, heikki.niemelainen@mgb.fi

Mr. Tuukka Salminen, Deputy CEO, at +358 40 705 4824, tuukka.salminen@mgb.fi