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2015-09-24

Kuntarahoitus Oyj: Municipality Finance strengthens its capital base by issuing a MEUR 350 capital loan - The company complies with bank regulatory requirement

Municipality Finance Plc

Stock Exchange Release
September 24, 2015 at 5:30 pm (CET +1)

Municipality Finance strengthens its capital base by issuing a MEUR 350
capital loan - The company complies with bank regulatory requirements well in
advance

Municipality Finance Plc has further strengthened its capital base by issuing
in the domestic and international markets a capital loan amounting to EUR 350
million. The instrument is an Additional Tier 1 capital loan, included in the
Additional Tier 1 capital.

The capital loan is perpetual, and Municipality Finance has the first option
to call the loan in 6.5 years after the issue date, in 2022. The coupon rate
is 4.5 per cent, which is the lowest interest rate to date in the marketplace
for a public AT1 capital loan.

Historical transaction

Municipality Finance is globally the first SSA issuer of a publicly listed AT1
capital loan. In Finland the AT1 transaction itself is first of its kind.

Standard&Poor's has given the instrument a BBB+ rating, which is the highest
rating ever for an AT1 instrument.

Municipality Finance's issuance received great interest both from Finnish and
international investors. The transaction was nearly three times
oversubscribed. Domestic and Nordic investors were especially active in the
transaction.

Customers benefit from the secured competitiveness

Municipality Finance has for years prepared itself for the capital demands
based on increasing banking regulation by improving its profitability. The
company intends to continue this strategy also in the future.

Municipality Finance's capital adequacy is already on an excellent level, but
its leverage ratio was 1.9 per cent at the end of June. The leverage ratio
requirements based on Basel III regulation will come into force in 2018, and
Municipality Finance is prepared for an expected 3 percent leverage ratio
requirement. With the issue of an AT1 capital loan, Municipality Finance's
leverage ratio now fulfils this requirement. Municipality Finance clearly
complies with all other capital adequacy requirements.

- With the help of this transaction Municipality Finance secures the
prerequisites of its operations, its competitiveness and efficient funding in
all conditions despite the tightening bank regulation. All this will serve to
benefit our customers, says the President and CEOPekka Averio
.

The AT1 capital loan was listed on the Irish Stock Exchange in Dublin.
Municipality Finance mandated Barclays, BNP Paribas, Goldman Sachs
International and Nordea Markets as joint lead managers of the transaction.

MUNICIPALITY FINANCE PLC

Further information:

Pekka Averio, President and CEO
Tel. +358 500 406 856
Esa Kallio, Executive Vice President, Deputy to the CEO, Capital Markets
Tel. +358 50 3377 953
Marjo Tomminen, CFO, Senior Vice President, Finance
Tel. +358 50 3861 764

Measured by the group's balance sheet, MuniFin
(Municipality Finance Plc) is Finland's third largest credit institution. The
company is owned by Finnish municipalities, the public sector pension fund
Keva and the Republic of Finland. MuniFin is an integral part of the Finnish
public economy.

MuniFin's balance sheet totals nearly EUR 34 billion. Funding for the company
is primarily obtained through the international capital markets. MuniFin's
funding is guaranteed by the Municipal Guarantee Board.

MuniFin's mission is to ensure competitive funding for its customers in all
market conditions. The company's customers are Finnish municipalities,
municipal federations, municipally controlled companies and non-profit
housing corporations.
A significant portion of lending is used for socially responsible projects
such as building hospitals, healthcare centers, schools, day care centers and
homes for the elderly.

The Municipality Finance Group also includes the subsidiary company, Financial
Advisory Services Inspira Ltd.

Read more:
www.munifin.fi

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Kuntarahoitus Oyj via Globenewswire

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