Kuntarahoitus Oyj - Company Announcement

Moody's downgrades Municipality Finance Plc's credit rating to Aa1; Outlook stable

Municipality Finance Plc
Stock Exchange Release
8 June 2016 at 13:30 (EET)

Moody's downgrades Municipality Finance Plc's credit rating to Aa1; Outlook
stable

Credit rating agency Moody's downgraded the long-term credit rating on
Municipality Finance from Aaa to Aa1 on June 8, 2016. The outlook on the rating
is stable.

Moody's rating for Municipality Finance's short-term credit rating remains
unchanged the best possible, Prime-1. Also the rating of Municipality Finance's
EUR 350,000,000 Perpetual Fixed Rate Resettable Additional Tier 1 (AT1)
Securities was affirmed unchanged at A3.

The change on Municipality Finance's long-term issuer rating is only a
consequence of the similar downgrade on the Republic of Finland.

On June 8, 2016 Moody's also lowered the credit rating of Municipal Guarantee
Board (MGB) to Aa1. As with Municipality Finance's rating, Moody's rating action
on Municipal Guarantee Board followed the changed rating on the sovereign of
Finland. MGB explicitly guarantees Municipality Finance's funding.

MUNICIPALITY FINANCE PLC

Esa Kallio
Executive VP, Deputy to the CEO, Head of Capital Markets
Tel. +358 50 3377 953

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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