Kuntarahoitus Oyj - Corporate Action

Municipality Finance's share issue succeeds beyond expectations

Press Release
For publication 2 July 2009


Municipality Finance's share issue succeeds beyond expectations 


Subscribing to Municipality Finance Plc's share issue was very active, and the
issue succeeded beyond expectations. The total amount of subscriptions came to
EUR 40.6 million, representing 12,698,002 shares. During the first subscription
period, which ended on 25 March 2009, subscriptions were made to the amount of
EUR 33.5 million, and during the second subscription period, which began right
after the first and ended on 30 June 2009, subscriptions were made to the
amount of EUR 7.1 million. 

Extensive participation - municipalities of all sizes take part
The municipality sector as a whole participated very extensively in the issue.
Most of the subscribers were municipalities, several limited liability
companies, fully-owned by municipalities, also partook in it. 

The total number of subscriptions was 191, of which 49 were made during the
first subscription period and 142 during the second. Municipality Finance got
37 new shareholders in the issue, increasing the number of Municipality
Finance's shareholders to 301. The population of the municipalities
participating in the issue represents 79.5% of the entire Finnish population,
and the average subscription amount relative to the municipalities' population
was EUR 3.8. 

Strong support for the funding system
“We are very positively surprised by the outcome of the issue and would like to
extend a big thank you to all those who participated in it. In our view, an
outcome as excellent as this represents a clear statement from the municipality
sector in favour of a joint municipality funding system and, what is most
exciting, shows strong commitment on the part of a very extensive group of
municipalities. We are pleased that municipalities of different sizes all over
Finland decided to take part in the share issue and, thus, strengthened
Municipality Finance's position in the funding markets”, states CEO Pekka
Averio. 

The excellent outcome of the issue strengthens Municipality Finance's capital
adequacy, which needed improving under the current economic circumstances due
to the sharply increased lending. “Our funding activities during the early part
of the year were successful, which is a sign of appreciation of the Finnish
system from international investors. Maintaining Municipality Finance's good
credit rating is nevertheless a vital pillar for us as we raise funding from
the international finance markets. This issue allows us to reinforce our
position on the market and has thus secured an important source of funding for
the Finnish municipalities for their activities under the challenging economic
conditions”, Averio estimates. 

Municipality Finance Plc 
Further information: 
Pekka Averio, CEO, +358 (0)500 406 856
Esa Kallio, Executive Vice President, Deputy to CEO, +358 (0)50 3377 953


Municipality Finance Plc is a local government credit institution owned by
Finnish municipalities, the Local Government Pensions Institution and the
Government and is the parent company of the Municipal Finance Group.
Municipality Finance Plc specialises in the funding of housing production. The
company's mission is to ensure top-value financial services for its clients, to
be efficient and to grow profitably. The Group's balance sheet totalled EUR
12,512 million on December 31, 2008. The company offers market-based funding to
municipalities and municipal federations, to municipality-controlled entities
and non-profit housing corporations. The company's funding, which is guaranteed
by the Municipal Guarantee Board, is obtained from international capital
markets and domestic investors. Funding provided by the company goes into
social and non-profit service projects, such as schools, housing and hospitals.
The Group includes Financial Advisory Services Inspira Ltd, which offers
financial advisory services for investments, financial and asset arrangements,
asset management and various analysis services.

Attachments:

osakeanti 02072009 engl.pdf