* Investors welcome new Finnish sub-sovereign issuer
* EUR3bn debt programme assigned Triple-A status
* Banks speculate on strategy of maiden offering
By John Geddie
LONDON, Oct 3 (IFR) - Finland's export credit agency Finnvera is set to become the country's latest sub-sovereign issuer when it executes its first transaction under a new euro medium-term note (EMTN) programme later this year.
Rating agencies Moody's and Standard and Poor's assigned Triple A ratings to debt issued under Finnvera's government-guaranteed EUR3bn EMTN programme on Monday.
This follows Finland's explicit guarantee of the EUR3bn programme, out of a statutory government guarantee on EUR5bn of all Finnvera's debt obligations, signed off last month and valid for the next five years.
Finnvera provides financial support to foreign buyers of Finnish goods and services through guarantees on export contracts and with direct funding via its subsidiary Finnish Export Credit (FEC).
From 2009, the direct funding was provided by the government as part of a temporary solution to liquidity issues faced by the banking sector. This funding will now be raised in the capital markets through the EMTN programme.
Fundraising will be scheduled to match payment deadlines for these so-called buyer credit facilities, which can range from EUR10m up to EUR500m, depending on the size of the export contract.
With a number of transactions already signed off, Finnvera's first outing under the new programme is expected in the next few months, said a spokesperson at the agency.
It will shortly announce its list of primary dealers for the EMTN programme, he added.
Finnvera also provides funding to small and medium-sized Finnish businesses, and since its inception in 1999 the agency has executed a number of small private placements in both euros and Norwegian kroner. According to the company's website, as of December 31 2011, it had EUR100m and NOK6.1bn of bonds in circulation.
At present, investors can only get exposure to Finnish risk via the sovereign or the local government financing agency, Municipality Finance, which is guaranteed by the Municipal Guarantee Board.
"There is a strong global demand for Nordic sub-sovereign paper. It is a premium product and in a flight-to-quality environment there is just not enough supply," said one syndicate official.
But while the bankers would like to see Finnvera announce its arrival to the market with a sizeable benchmark transaction, the first trade is likely to be a more discreet affair.
The Finnvera spokesperson said the entity will not want to take on the risk of managing too much liquidity and is likely to begin with some smaller private placement-type trades.
One of the options open to Finnvera is the floating-rate note market, which has proved popular with Nordic agencies over the last weeks.
Finland's Municipality Finance closed a USD500m October 2015 Reg S FRN on Tuesday priced at three-month Libor plus 7bp via Citigroup and Credit Suisse, following trades in the same currency and maturity from Denmark's KommuneKredit and Sweden's Kommuninvest the week previous.
"Given the small size of Finnvera's programme, this would be a good way to start the process," said one syndicate official.
"It is a very straightforward proposal, especially for central banks and bank treasuries, because it is easy to take on their books and they don't have to do any swaps," he added.
(Reporting By John Geddie; Editing by Helene Durand and Julian Baker)
Keywords: EXPORT AGENCY/DEBT