KBN has reached the end of a tumultuous and volatile quarter, raising approximately USD 3.0 billion equivalent via its diversified funding programme.
Despite the volatility and turmoil caused by COVID-19, KBN has managed to navigate difficult capital markets and at the end of the quarter, is poised to support Norwegian local governments through the challenges associated with the outbreak of the coronavirus.
KBN reached the end Q1, raising approximately 37% of its estimated borrowing programme of USD 8 billon equivalent for 2020. As the majority of KBN debt issuance is in foreign currencies, a depreciating Norwegian Krone (NOK), especially against USD and EUR, has had the effect of lowering KBN’s funding programme somewhat for 2020. It should be noted though, this total may be revised upward as lending growth is adjusted due to higher borrowing requirements from local governments related to the covid-19 outbreak.
Based on current exchange rates, KBN expects its 2020 Funding Programme to be approximately USD 8bn equivalent. As the coronavirus and its affects play out over the course of the year, this could be revised upwards as borrowing requirements of the local governments increase.
As of now, KBN foresees another 2 benchmark transactions during 2020 with a maturity focus of 3-10 years. These will be focused in either EUR or USD. KBN will continue its funding activity looking for opportunities in the public markets in general, while keeping focus on the private placement and retail markets.
KBN also plans to remain active in the public Green Bond market during the year looking at both Taps on existing Green bonds and new Green bond issuance.
The KBN Funding Team