Funding and Green Projects Evaluation
MuniFin
Copyright MuniFin
49
Appendix 18
MuniFin Additional Tier 1 Capital
Transaction
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On 16th September 2015, Municipality Finance Plc ("MuniFin") announced a series
of investor meetings in connection with the launch of their inaugural Additional
Tier 1 Capital transaction.
This transaction is the first publicly distributed AT1 instrument from a public sector
entity in Europe, and achieved a new pricing milestone for this product in terms of
lowest offered coupon
The securities were issued to ensure that MuniFin complies with leverage ratio
requirements, well ahead of anticipated entry into force in 2018. MuniFin's
leverage ratio at 30 June 2015 stood at 1.9%
The securities are expected to be rated BBB+ by S&P which makes the securities
the highest rated AT1 in the market, due to the high quality nature of the credit
Goldman Sachs International acted as joint bookrunner on this transaction together
with Barclays, BNP Paribas and Nordea Markets
Structure
The securities are EUR denominated (RegS format) and feature a fixed coupon of
4.500% up to but excluding the First Call Date (1st April 2022). The coupon will
reset every 5 years thereafter (non-step up). They also feature a 5.125% CET1
trigger (Issuer and Group) with temporary write-down loss absorption
Execution
Following a three-day constructive roadshow in London, Amsterdam, Zurich, and
the Nordic region, MuniFin launched a € RegS PNC6.5 on Thursday 24th
September 2015
■Investor feedback throughout the roadshow was very supportive, leading
syndicates to enter the market with IPTS of high 4% for a no-grow €350mm trade
Following tightening guidance to 4.625% area, the Lead Managers finally printed a
€350m transaction at MS+396bps on the back of a substantially oversubscribed
orderbook
Distribution by Geography
■ Finland
5% 5%
19%
63%
Issuer:
Pricing Date:
Instrument:
Issuer Ratings:
Municipality Finance Plc (Kuntarahoitus Oyj)
24th September 2015
Perpetual Fixed Rate Resettable Additional Tier 1 Securities
AaaAA+ (Moody's / S&P)
Expected Issue Rating: BBB+ (S&P)
Issue Size:
€350m
Maturity & Non Call
Period:
Coupon
Interest Cancellation
Trigger Event
Write-Down and
reinstatement
Distribution by Type
4% 2%
43%
Optional Redemption.
■ Owners
15%
36%
■Fund Managers
■ Pension & Insurance Official Institutions
Nordics (ex Finland)
United Kingdom
■Rest of Europe
■Middle East & Other
■ Banks
Special Event
Redemption
ISIN:
Perpetual NC6.5
The coupon is fixed until the First Reset Date and then reset
every 5 years thereafter (non-step up)
First Reset Date: 1 April 2022 and will be fully discretionary non-
cumulative, payable annually in arrears, with a short first
coupon
Coupon payment is at the full discretion of the Issuer.
Mandatory cancellation upon insufficient Distributable Items,
Maximum Distributable Amount to be exceeded or otherwise so
required by the CRD IV, including the applicable criteria for
Additional Tier 1 Capital instruments. Non-cumulative
Common Equity Tier 1 Ratio of the Issuer on an unconsolidated
basis and/or the Group on a consolidated basis is less than
5.125%
Upon a Trigger Event, the Prevailing Outstanding Amount will
be written by the relevant Write-Down Amount.
Following a Write-Down the Issuer may, at its discretion,
reinstate some or all of the Original Principal Amount of the
Securities, subject to compliance with the Relevant Rules and
the Reinstatement Limit on a pro-rata basis with the
reinstatement of all other Equal Trigger Instruments (if any)
1st April 2022 ("First Call Date") and any Interest Payment Date
thereafter, at the Original Principal Amount, subject to the
Conditions to Redemption and Purchase
The issuer may redeem the Securities at the Prevailing
Outstanding Amount upon the occurrence of a Capital Event
(exclusion in whole or in part of Additional Tier 1 Capital) or a
Tax Event (future additional amounts or loss of interest
deductibility) (each a "Special Event"), subject to the Conditions
to Redemption and Purchase
XS1299724911
Source: Bloomberg, Company Press
Releases as of 24 September 2015View entire presentation