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