Municipality Finance's share issue off to a good start


PRESS RELEASE

For publication 26.3.2009

Municipality Finance's share issue off to a good start

The current Municipality Finance Plc's share issue is proceeding as expected,   
and new subscriptions have been made actively during the first subscription     
period. The first subscription period ended on 25 March 2009, and by then the   
subscriptions added up to EUR 33.5 million. Several municipalities will         
participate in the issue during the second subscription period, which started   
immediately after the first period. The second subscription period will end on  
30 June 2009.                                                                   

Green light from municipalities of all sizes                                    
Municipality Finance's Board of Directors has issued an investment              
recommendation regarding the share issue, amounting to at least EUR 3 per       
municipality resident. Several small and large municipalities have taken a      
positive approach to the recommendation and made their subscription in          
accordance with - or above - it. The City of Helsinki is participating in the   
issue by subscribing to 891,525 shares, which represents a contribution of      
approximately EUR 2.9 million or EUR 5 per resident. Finnish municipalities     
participating with a similar contribution per resident include, among others,   
Espoo (with a share of approximately EUR 1.2 million), Jyväskylä, Kauniainen,   
Kuopio, Lahti, Mikkeli, Oulu and Turku. Relatively speaking, the largest        
investment per resident has been made by the municipality of Kinnula, which has 
approximately 1,800 residents. Kinnula's contribution amounts to EUR 10,240 or  
almost EUR 5.50 per capita. In addition, several other large and small          
municipalities and cities made significant contributions. The largest single    
investment, in addition to the government's EUR 20 million, is the Local        
Government Pensions Institution's subscription of EUR 4 million. All in all,    
subscriptions made by the end of the first period were attributable to 49       
subscribers, most of them municipalities. The subscribers also included several 
limited liability companies fully owned by municipalities.                      

Safeguarding capital adequacy                                                   
“We're delighted to see that municipalities of all sizes and from all over      
Finland have joined this project so quickly. Each contribution matters to us.   
The municipal sector has now extensively understood the importance of           
strengthening Municipality Finance's capital structure, especially with         
municipalities' funding needs increasingly focusing on the company's lending    
resources”, states CEO Pekka Averio. The share issue will improve the company's 
capital adequacy, which has declined due to the rapidly increased demand for    
lending. “With the current financial crisis further reducing the number of      
financers for the municipal sector and impairing the availability of funding, it
is important to maintain the company's good credit rating and thereby influence 
the price level of funding acquired in the international financial markets",    
estimates Averio, hoping to inspire the municipalities that are still           
considering.                                                                    

Kuntarahoitus Oyj, PL 744, Antinkatu 3 C, 5. krs, 00101 HELSINKI
p. (09) 6803 5666, fax (09) 6803 5669 www.kuntarahoitus.fi      
Y-tunnus 1701683-4                                              

Further information:                                           
CEO Pekka Averio, tel. +358 (0)9 6803 6211, +358 (0)500 406 856

Municipality Finance Plc is a local government credit institution owned by      
Finnish municipalities and the Local Government Pensions Institution and is the 
parent company of the Municipal Finance Group. The company's mission is to      
ensure top-value financial services for the municipal sector, 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.                                       

Kuntarahoitus Oyj, PL 744, Antinkatu 3 C, 5. krs, 00101 HELSINKI
p. (09) 6803 5666, fax (09) 6803 5669 www.kuntarahoitus.fi      
Y-tunnus 1701683-4