KBN Funding Update – Summer Edition
KBN has reached the end of June 2022, raising approximately USD 5.2 billion equivalent ytd via its diversified funding programme. This equates to just under 60% of KBN’s estimated borrowing programme of USD 9 billion equivalent for 2022.
At the beginning of the year, KBN estimated a borrowing programme of approximately USD 10 billion for 2022. On the back of a strengthening USD throughout Q2, this has been revised lower to USD 9 billion equivalent for 2022.
The first half of the year has been engaging as market volatility resulting from rising inflation, Central Banks increasing interest rates, high energy prices and the War in Ukraine have affected markets. Despite this, KBN has had good access to funding markets throughout the first half of the year and maintained a robust liquidity position in the latter part of Q2, having very little requirement for additional financing in May and June.
Funding highlights for the first half of 2022 included two new USD Benchmarks, new 500 million 5-year benchmarks in the Kangaroo and Kauri markets, a new CHF 175 million 6-year benchmark and a SEK1.75bn 3-year Green Bond. KBN was also active in the USD FRN market, tapping its outstanding June 2026 SOFR FRN line by USD 800 million.
- In January, KBN successfully priced a new USD 1.25 billion 5-year benchmark. The transaction enjoyed a strong reception from the outset, with orderbooks ultimately closing in excess of USD1.75 billion. Banks were the largest investor component taking 54.7% of final allocations, supplemented by strong participation from Central Banks & Official Institutions (43.2%).
Read more about the benchmark (PDF) - In March, KBN successfully priced its second USD benchmark for 2022, a new USD 1.25 billion 2.5-year September 2024 Benchmark. The transaction experienced strong demand with books well diversified across 40 orders. Distribution was dominated by Central Banks and Official Institutions with 72.9% of the final allocation.
Read more about the benchmark (PDF)
Moody’s and Standard & Poor’s Ratings affirmed at Aaa/AAA (Stable/Stable)
Throughout May and June, both Moody’s and Standard & Poor’s affirmed KBN’s ratings at Aaa/AAA (Stable/Stable). Highlighted were KBN’s close link to the Central Government of Norway, the strong asset quality of the Norwegian Regional and Local Governments, KBN’s public policy mandate, strong and robust capital position and prudent risk management practices supporting strong liquidity buffers.