Download CREDIT RATING A NORWEGIAN GOVERNMENT FUNDING

FUNDING UPDATE
APRIL 2016
CREDIT RATING
FUNDING
NORWEGIAN LOCAL GOVERNMENT
Aaa (Moody’s) AAA (S&P) – stable
outlook.
The objective of KBN’s funding operations is to meet growing borrowing
requirements through a well diversified
funding base.
A provider of vital services to the Norwegian public, in areas such as healthcare,
education, transport and infrastructure
A NORWEGIAN GOVERNMENT
FUNDING AGENCY
KBN is committed to preserving longterm investor relationships through:
• Regular issuance of private placements
and strategic benchmark transactions
in USD. KBN also established a EUR
benchmark program in 2014 and completed its follow up trade in April 2016
• A visible presence in smaller public
markets with repeat issuance in local
currencies including GBP, CHF, AUD,
CAD and NZD
• A flexible attitude to structured private
placements, offering investors a wide
variety of structures including FX,
equity and commodity linked
• Continued development of KBN as a
household name in European and Asian
retail markets
Established by a special Act of Parliament 1926/1999.
100% central government owned
KBN is classified as a state instrumentality serving a public policy function
of providing low cost funding to the Norwegian local government sector.
KBN benefits from strong direct support
through a maintenance obligation from
the central government.
KBN is the largest lender to Norwegian
municipalities providing approximately
50% total credit to the sector.
Excellent asset quality, no loan losses
in 90 years of operations.
KBN facilitates global funding enquiries
through KBNet, an online interface for
funding across international time zones.
KBN is today the highest rated Norwegian agency.
In 2015, KBN issued a total of USD 8
billion via 303 individual transactions in
11 different currencies.
KBN represents the closest proxy to
Norwegian sovereign risk in international
markets.
KBN is targeting an estimated total issuance of USD 8-10 billion equivalent in
2016. KBN will actively look to raise its
funding across four key funding markets.
Benchmarks, both in USD and EUR, Institutional niche markets (such as AUD,
CHF, CAD, GBP and NZD), Private
Placements and the Japanese Uridashi
retail market.
OBJECTIVE
To provide loans on favourable terms to
the Norwegian local government sector.
KBN’s mandate also involves promoting
competition in the market for municipal
loans thereby facilitating the efficient
provision of public services in Norway.
FUNDING MARKETS 2015
TOTAL ASSETS (USD BN)
57
60
50
38
40
30
27
40
44
‘One of the strongest local government sectors in any country rated’
(Standard & Poors)
The close relationship between the central
government and the municipal sector is
characterised by strict central government control, regulation and oversight
Norwegian local government are prohibited by law from filing for bankruptcy.
THE NORWEGIAN ECONOMY
The Kingdom of Norway (AAA/Aaa) is
one of the strongest economies globally
with solid fundamentals and a highly
developed industrial base.
Norway has one of the world’s largest
GDP per capita and the highest standard
of living according to the UN Human
Development Index.
Capacity utilization in the economy
has remained high, the current surplus
considerable (9.0% in 2015) and government finances are solid. In the National
Budget presented in October 2015, the
2016 budget surplus was estimated at
5.6% of GDP. Currently, Norway’s
SWF, the Government Pension Fund –
Global, stands at approximately USD
850 billion (over 200% of 2015 GDP).
For more information on KBN’s operations,
visit www.kbn.org
DEBT PORTFOLIO APRIL 2016
56
46
29
20
Benchmark 26%
Private placement 5%
Retail 39%
0
2008
2009
2010
2011
2012
2013
2014
2015
Other institutional 24%
Green Bond 6%
USD 55%
BRL 6%
JPY 12%
NZD 3%
AUD 9%
EUR 3%
GBP 6%
Other 6%
10
USD bn (NOK/USD 8.00)
Tel: +47 21 50 20 00
Fax: +47 21 50 20 40
[email protected]
www.kbn.org
KBN KOMMUNALBANKEN
Haakon VIIs gt. 5b
P. O. Box 1210 Vika,
N-0110 Oslo, Norway