KommuneKredit

KommuneKredit was established in 1899 to provide cheap financing to the Danish local government sector.

KommuneKredit is organised as an association, whose members have joint and several liability for all of its obligations. Members are not permitted to withdraw from the association while any loan made to or guaranteed by them remains outstanding. All municipalities and counties in Denmark are members of KommuneKredit.

 

KommuneKredit benefits from a very high asset quality. KommuneKredit can only lend to local governments in Denmark or entities guaranteed directly or indirectly by local governments in Denmark. The financing of local governments is restricted to financing capital expenditure, not current expenditure or commercial projects. Furthermore the local governments are subject to strict regulations, controls and supervision by the central government.

Danish local governments cannot go bankrupt and no financial institution has ever lost money from lending to local authorities.
 
Due to the joint and several liability, ample reserves and the high asset quality, KommuneKredit has been assigned AAA rating by Standard & Poor's and Aaa rating by Moody's Investor Service.

 

As KommuneKredit does not carry out business with the main aim of making a profit is does not charge a margin over its cost of funds, but instead obtains contributions from its borrowers to cover administrative expenses.

 

KommuneKredit's sources of funding consist of:

• Bonds issued on the Copenhagen Stock Exchange MTN-notes issued under KommuneKredits MTN-programme
• ECP-notes issued under KommuneKredits ECP-programme
• Private placements

 

KommuneKredit's 100% owned subsidiary Kommune Leasing A/S provides leasing to local government.

The assets of KommuneKredit amounted to EUR 17 Billion at the end of 2005
KommuneKredit and Kommune Leasing employ a staff of 49 persons.
 
KommuneKredit (www.kommunekredit.dk)

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