Kommuninvest
Encyclopedia
Kommuninvest is a Local Government Funding Agency
that was setup in 1986 by Lars Andersson, former finance officer of the municipality of Örebro
, Sweden
. The scheme aims to help municipal governments to raise capital through the issuance of bonds in Europe, Japan and other countries.
As a single municipality has little ability to raise capital alone, the Kommuninvest scheme allows many to issue a bond
together. As the local governments in Sweden are allowed to alter local taxes when needed, the ability to repay any outstanding debt is close to risk-free, as such the Kommuninvest scheme is rated AAA by both Standard & Poor's
and Moody's
. This high rating has allowed it to attract investors from around the globe, with roughly US$5billion having been issued in bonds so far.
Bonds are issued in Europe and in Japan under the form of Uridashi bonds (bonds issued by foreign entities in the Japanese market in non JPY currencies that can be sold to Japanese retail investors). Kommuninvest does not currently issue any bonds in the US due to tight regulatory guidelines.
Local Government Funding Agency
A Local Government Funding Agency is financial institution that serves as a vehicle for local and regional authorities such as municipalities, county councils and regions to access capital markets for the purpose of jointly procuring credit for public investment projects. The local and/or regional...
that was setup in 1986 by Lars Andersson, former finance officer of the municipality of Örebro
Örebro
-Sites of interest:Örebro's old town Wadköping is located on the banks of Svartån . It contains many 18th and 19th century wooden houses, along with museums and exhibitions....
, Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
. The scheme aims to help municipal governments to raise capital through the issuance of bonds in Europe, Japan and other countries.
As a single municipality has little ability to raise capital alone, the Kommuninvest scheme allows many to issue a bond
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
together. As the local governments in Sweden are allowed to alter local taxes when needed, the ability to repay any outstanding debt is close to risk-free, as such the Kommuninvest scheme is rated AAA by both Standard & Poor's
Standard & Poor's
Standard & Poor's is a United States-based financial services company. It is a division of The McGraw-Hill Companies that publishes financial research and analysis on stocks and bonds. It is well known for its stock-market indices, the US-based S&P 500, the Australian S&P/ASX 200, the Canadian...
and Moody's
Moody's
Moody's Corporation is the holding company for Moody's Analytics and Moody's Investors Service, a credit rating agency which performs international financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized...
. This high rating has allowed it to attract investors from around the globe, with roughly US$5billion having been issued in bonds so far.
Bonds are issued in Europe and in Japan under the form of Uridashi bonds (bonds issued by foreign entities in the Japanese market in non JPY currencies that can be sold to Japanese retail investors). Kommuninvest does not currently issue any bonds in the US due to tight regulatory guidelines.