#1MuniFin investor presentation April 2021 MuniFin#2MuniFin Copyright MuniFin Agenda 01 An overview of MuniFin 02 The Finnish economy 03 The Finnish municipal sector and the MGB guarantee 04 MuniFin's operations 05 Sustainable products offering - Green and social bonds 06 Appendices#3MuniFin Copyright MuniFin 3 An overview of MuniFin#4Copyright MuniFin MuniFin in brief The leading provider of financial services to Finland's local government and public housing sectors • • 100% Finnish public sector-owned credit institution Financing only to the Finnish public sector and public housing sector; main customers include municipalities, municipally-owned companies and public housing companies • Funding explicitly guaranteed by the Municipal Guarantee Board (MGB) (Aa1 (Stable) / AA+ (Stable)) 16% Ownership Structure 53% 31% Credit ratings MOODY'S Stable Aa1 S&P Global Ratings AA+ Stable MuniFin Marit C+ Prime ESG ratings ISS ESG‣ SUSTAINALYTICS Ranking Finance 11/117 ■Municipalities ■ Keva (a local gov. pension institution) ■Republic of Finland 13.1 Ranking Banks 28/947 AA MSCI Ranking n/a#5MuniFin Copyright MuniFin 5 The MuniFin model Borrowers Owners Membership MuniFin KUNTIEN TAKAUSKESKUS | MUNICIPAL GUARANTEE BOARD Explicit guarantee Funding#6MuniFin Copyright MuniFin 6 Financial performance - Consolidated figures 21,196 21,651 34,052 34,738 Long-term customer financing (Єm)* Total Assets (Em) 31st December 2016 31st December 2017 31st December 2018 31st December 2019 31st December 2020 22,968 24,798 28,022 35,677 38,934 44,042 Total Own Funds (€m) 1,1241 1,2931 1,4131 1,5101 1,6241 Net Operating Profit excl. unrealized changes in fair 172 187 190 186 197 value (€m)* Net Operating Profit (€m)* 174 198 190 131 194 Cost-to-Income Ratio* 0.2 0.2 0.2 0.3 0.2 Return on Equity* 12.5% 12.6% 10.8% 6.8% 9.4% CET1 Ratio 2 46.2%2 53.0%² 66.3%² 83.1%2 104.3%² Total Capital Ratio³ 66.9%³ 72.5%³ 88.0%³ 107.9%³ 132.7%³ Leverage Ratio 3.5% 3.8% 4.1% 4.0% 3.9% 1 Including AT1 capital loan. CET1 was 1,277 mEUR at the end of December 2020 and 1,162 mEUR at the end of December 2019. 2 The CET1 Ratio is a consolidated figure for Municipality Finance Group, not the parent company. The CET1 ratio of the parent company was 107.1% at the end of December 2020 and 85.0% at the end of December 2019. 3 The Total Capital Ratio is a consolidated figure for Municipality Finance Group, not the parent company. The Total Capital Ratio of the parent company was 136.5% at the end of December 2020 and 110.5% at the end of December 2019. * Alternative performance measure. For more information on alternative performance measures can be found in the Annual Report/Board of Directors Report.#7MuniFin Copyright MuniFin The Finnish economy#8MuniFin Copyright Muni Fin 8 Economic outlook of Finland • . • • Strong Nordic Sovereign - Rated Aa1/AA+/AA+ (Stable/Stable/Positive) Leading in R&D and top of the world in education, strong export sector. Happiest country in the world. Due to the Covid-19 outbreak, the Finnish GDP is projected to have declined by -3.3 % in 2020. Early containment measures and diversified industrial base mitigated the economic impact of the epidemic GDP growth will resume this year driven by private consumption and is projected to be 2.5 % Unemployment has risen relatively moderately as firms have benefitted from temporary lay-offs to protect their long-term productive capacity 1,5 1,1 • Comparably low debt/GDP - even after the unavoidable rise in debt due to the Covid-19 crisis Sources: Economic Survey, Winter 2020, Ministry of Finance, United Nations World Happiness Report (2018, 2019), Statistics Finland GDP Change (%) 2,5 2,0 1.4 (3,3) 2018 2019 2020F 2021F 2022F 2023F - Unemployment rate (%) Inflation (%) 7,4 6,7 40 7,8 8,0 7,6 7,2 1,1 1,0 1,0 1,4 1,6 0,3 2018 2019 2020F 2021F 2022F 2023F General Gov Debt / GDP (%) General Gov Deficit / GDP (%) 6,1 5,2 3,3 33 2,6 0,9 1 69 71,4 72,5 73,6 59,6 59,3 2018 2019 2020F 2021F 2022F 2023F#9MuniFin Copyright MuniFin 9 Resilient external sector Exports by region 2020 • Finland, as a small open economy, has a diversified export sector. Finnish Exports are largely made up of investment goods and intermediate products • • Bridge between the East and the West: Over 40 % of exports outside the EU, largest trade counterparties being Germany, Sweden, USA, Netherlands, Russia and China Foreign trade faced a sharp but temporary slump as a result of the Covid-19 pandemic. In 2020, Finnish exports and imports are forecast to have contracted by 10.4 % and 7.5 %, respectively North America 8% Asia 14% Rest of Europe 16% Other countries 6% Other EU countries 17% Euro zone countries 39% Exports by sector 2020 Other 13% Electric and electronics industry 12% Metals and machinery 38% • Finnish exports are expected to grow by 5.0 % this year in 2021, as world trade gradually recovers Sources: Economic Survey, Winter 2020, Ministry of Finance & Finnish Customs Preliminary Data for 2020, Statistics Finland Forest, pulp and paper 18% Chemicals and related 19%#10MuniFin Copyright MuniFin 10 The Finnish municipal sector and the MGB guarantee#11MuniFin Copyright MuniFin 11 Finnish municipalities: Strong revenue base and close link to Central Government Revenues (~EUR 47 billion) By law, a Finnish municipality cannot be declared bankrupt • Bankruptcy Act (120/2004) Close link to the Central Government . • All Finnish municipalities are highly independent and have a parallel status with the Central government confirmed in the constitution dating from 1917 • Large reform in the healthcare sector in process Borrowing 9% Central government transfers to local government 18% Other Other Taxes 5% 8% Sales of Services 20% Income Tax 40% Expenditure (~EUR 47 billion) Strong revenue base • • Municipalities have an unlimited right to levy taxes on their inhabitants (municipal tax rate) Other revenues taxation related charges from service production Budget control • Ministry of Finance is responsible for monitoring the municipal sector . By law municipalities have an obligation to balance their finances over a four-year time frame Other Duties 17% Education and Culture 31% Financing costs 5% Social and Healthcare 48% Source: Association of Finnish Local and Regional Authorities, figures for year 2019#12MuniFin Copyright MuniFin 12 Municipal Guarantee Board (MGB) provides the explicit guarantee for MuniFin senior debt Stable . Aa1 (Stable)/AA+(Stable) rated Aa1] AA+ • MGB was established by an act passed by Finland's parliament in 1996 for the purposes of safeguarding and developing the joint funding of municipalities Strong • All Finnish municipalities are members, representing 100% of the taxation power in Finland. Membership is permanent • Members of the MGB are jointly liable for the explicit guarantee provided by MGB for MuniFin's funding Immediately enforceable • MGB can collect from members without a court order . • All debt guaranteed by MGB is BIS 0% risk-weighted in the EU area Member Municipalities 100% of Finnish population MGB Guarantee MuniFin#1313 MuniFin Copyright MuniFin MuniFin's operations HOAS#14MuniFin Copyright MuniFin 14 Long-term customer finance MuniFin has a dominant role as a provider of finance and services for its customer sector Customers - Municipalities and joint municipal authorities - Municipally owned corporations - Municipally owned housing companies and non-profit housing companies Long-term customer financing EUR 28.0 billion* Products Long-term loans up to 41 years - Municipal sector Social housing sector Property leases Lending portfolio - - Social housing 47% - Municipalities 35% * - Municipally owned corporations 13% - Joint municipal authorities 6% Guarantee Housing Project loans are guaranteed by the Finnish Central Government or by municipalities All loans have a BIS 0% weighting * 31 December 2020#15MuniFin Copyright MuniFin 15 Funding strategy "Frequent presence in international capital markets to obtain the best conditions for borrowing over the long term." ECP Private placements Strategic benchmark markets Tactical funding markets Euro Commercial Paper program (short-term) EUR/USD Benchmark Retail (€m) Long-Term Funding program 12 000 10 000 Green and Social bonds 8 000 6.000 4 000 Other public 2 000 markets 0 2016 2017 2018 2019 2020 2021e* * Forecast as of April 2021#16MuniFin Copyright MuniFin 16 Successful public market strategy EUR FIXED BENCHMARK 12.1bn Green bond Social bond Oct 2021, Mar 2024, Nov 2024, April 2025, Nov 2026, Sep 20271, Sep 20291, Oct 20301, March 2031, Feb 2033, Sep 20352 USD FIXED BENCHMARKS 8.25bn Musin Green bond June 2021, Sep 20211, Mar 2022, Sept 2022, Mar 2023, Sep 2023, Nov 2023, Mar 2026 NOK 24.9bn Jan 2022, April 2022, Oct 2022, Feb 2023, July 2023, Sept 2023, Sept 2024, Jan 2025, Jan 2026 ■ Public ■ Private placement ■ Retail 13 % 20% 20203 67 % + CHF 1.3bn ■ Public ■ Retail ■ Private placement April 2021, April 2022, Feb 2023, Sept 2024, March 2026, June 2027, March 2030, Aug 2038 GBP 750m Dec 2022, Dec 2025 1 Green Bond Issuance 2 Social bond issuance 3 Excluding TLTRO III participation of EUR 1.25 billion 7% 17% 2019 76%#17MuniFin Copyright MuniFin 17 Sustainable bonds Five green bonds (four benchmark sized) (~2 billion € outstanding) One social bond and a tap of that line (600 million € outstanding) GREEN GREEN SOCIAL GREEN GREEN USD 500m 9/2021 EUR GREEN 500m AUD 50M 9/2027 10/2027 EUR 500m 9/2029 EUR 500m 9/2035 EUR 500m 10/2030 EUR 100M SOCIAL TAP 9/2035 2016 Issuance year 2017 2019 2020 ARRESTED DEVELOPMENT CitizeWatchUS MothersDay STARBUCKS COFFEE NASDAQ WELCOMES MUNIFIN FIRST GREEN BOND ISSUER HELSINKI SUSTAINABLE BOND MARKET busin cards starting at $99 Use promo code at vistaprint.com vistaprint GREEN BOND Nasdaq American Airl NASDAQ WELCOMES MUNIFIN'S SOCIAL BOND TO THE SUSTAINABLE DEBT MARKET MuniFin Nasdaq#18MuniFin Copyright MuniFin 18 Funding breakdown 2020 Funding by Investor Type 2020 Insurance and Corporations Pension funds 1 % 9% Retail 11 % Asset Managers 12% Banks 19% Funding by Region 2020 Africa and the Middle Americas East 7% Central Banks and Official institutions Asia Pacific 15% 48 % Nordics 23 % 4 % Funding by Currency 2020 NOK 4 % Other currencies 5% JPY 11 % Europe excl. Nordics EUR 51 % USD 64 % 16%#1919 MuniFin Copyright MuniFin Mid ASW spreads of selected MuniFin USD Benchmarks Secondary levels of MuniFin Benchmarks Mid ASW spreads of selected MuniFin EUR Benchmarks Source: Bloomberg 1 April 2021 15 10 25050 -5 -10 -15 -20 -25 Jan-18 35 30 25 20 15 -5 -10 10 5 0 SGO GONN Jan-18 Mar-18 May-18 KUNTA 09/21/2021 Jul-18 Sep-18 Nov-18 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 KUNTA 11/15/2023 KUNTA 03/20/2026 Mar-21 KUNTA 09/12/2022 Jan-19 Mar-19 May-19 Jul-19 -KUNTA 03/07/2023 Sep-19 Nov-19 61-^ON Oz-uer - 02- KUNTA 11/26/2026 ΟΖ-ΛΟΝ oz-des -KUNTA 09/07/2027 - MARIO MATTO SATO SOSTO MOTTO SITO WARTO ROMs Sara Sara Mayo Santa Maria Maria sto sama Mama saiz manzi Mar-18 - 61-10 61- KUNTA 11/15/2024 -KUNTA 03/07/2024 KUNTA 09/06/2029 KUNTA 10/14/2030 ―KUNTA 03/02/2031 KUNTA 02/23/2033 81-ΛΟΝ - 61-uer#20MuniFin 20 Copyright MuniFin Volume in respective bond's currency Millions Increasing secondary turnover 2 500 2 000 1 500 1 000 500 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 Aggregate secondary turnover in MuniFin's fixed rate public EUR, USD and GBP denominated bonds. Source: MuniFin 2020. This data is based on quarterly secondary turnover data received from dealer banks. USD EUR ■GBP#21MuniFin 21 Copyright MuniFin Strong liquidity position · • MuniFin has a healthy liquidity position with money market, fixed income securities and cash (€ 10.0 billion as of December 31, 2020) • Pre-funding portfolio target size: Provide liquidity for minimum 12 months of running operations • Conservative management of the liquidity portfolio •Monetary policy counterparty of the Bank of Finland (BoF) SSA 19% Allocation by asset class* Senior Financials 5% Cash 2% Covered Bonds 19% Central Bank Deposits 55% *As of 31 December 2020#22MuniFin Copyright MuniFin 22 22 Sustainable products offering Green and social bonds MuniFin Green Social bond bond MuniFin NEW#23MuniFin Copyright MuniFin 23 Responsibility at MuniFin We are committed to building a better and more sustainable future with our customers. Responsibility is a key part of our strategy and operations Our core values are customer focus, responsibility and transparency MuniFin is committed to understand, monitor and manage the social, environmental and economic impact of its own activities and finance offered in order to contribute to the Finnish society's wider goals of sustainable development This commitment is integrated in the core values and mission, and are demonstrated through all operations and policies. Tampere: Tram 72 Kalajoki: Fire station Turku: Hospital Kemi: Bioheating plant Oulu: Social housing Helsinki/Espoo: Metro Imatra: Mansikkala campus Sodankylä: Welfare centre Joensuu: Student housing Kotka: Streetlights Jyväskylä: Water purification plant#24MuniFin Copyright MuniFin 24 MuniFin's finance addresses SDG-related challenges in Finland "Inclusive and competent Finland - a socially, economically and ecologically sustainable society" 3 GOOD HEALTH AND WELL-BEING 4 QUALITY EDUCATION 6 CLEAN WATER Key challenges AND SANITATION • Per capita energy consumption • GHG emissions • Ageing water and sewage networks AFFORDABLE AND 9 INDUSTRY, INNOVATION AND INFRASTRUCTURE 10 INEQUALITIES REDUCED • 11 AND COMMUNITIES SUSTAINABLE CITIES 12 LIFE 14 BELOW WATER RESPONSIBLE CONSUMPTION AND PRODUCTION GO 15 LIFE ON LAND • 13 CLIMATE ACTION • . Eutrophication of bodies of water Biodiversity Recycling of waste Regional differences in access to services and transportation Finland's goal is to be carbon neutral by 2035 • • Increasing inequalities and social exclusion Outcomes between socio-economic groups https://julkaisut.valtioneuvosto.fi/bitstream/handle/10024/162268/VNK_2020_8_Voluntary_National_Review_Finland.pdf?sequence=4&isAllowed=y 1 Title of the Finnish Government programme: https://valtioneuvosto.fi/en/marin/government-programme#25MuniFin Copyright MuniFin 25 MuniFin's sustainable products Environmental Finance Green Bond Awards 2018 Winner Green bond of the year - supranational, sub-sovereign and agency (SSA) Green Bonds ✓5 Green Bonds issued since 2016, Outstanding ~2 billion € CO2 ✓ First pure Finnish Green Bond issuer MuniFin Green bond Social Bonds ✓ First to offer Social finance product in Finland ✓ First Nordic SSA Social Bond issued in 2020 ✓ Green Bonds Framework • Drafted in accordance with ICMA GBP • Green Evaluation Team • Customer margin discount ✓ Second opinion • Cicero and Stockholm Environment Institute: Medium Green ✓ Social Bonds Framework · Drafted in accordance with ICMA SBP Social Evaluation Team Customer margin discount for new finance ✓ Second opinion ISS ESG ✓ Annual allocation and impact reporting ✓ Annual allocation and impact reporting MuniFin MuniFin Social bond#26MuniFin 26 Copyright MuniFin Green bond eligible project categories Renewable energy wind, solar, small hydro, geothermal, bioenergy and biogas from waste Water and waste water management Sustainable buildings • • 1. Buildings: Finnish energy classification class A or best of B. For class B there is a requirement to include additional components e.g. use of renewable energy, life- cycle analysis or certifications (LEED, BREEAM) with high ratings 2. Major renovations leading to a reduction of energy use per m² in year of at least 30% Public transportation CO2 Waste management Recycling, re-use, incineration and rehabilitation of contaminated areas Energy efficiency District heating/cooling, recovered energy, smart grids Environmental management (max 20%) 72 The Green Evaluation Team analyses each project separately and approves projects only if the longer term net environmental impact is positive.#27MuniFin Copyright MuniFin management 8,7 % 27 Green finance portfolio Renewable Water and waster water energy 1,8% Energy efficiency 0,3 % € Total committed amount of green finance 2,206 million € Sustainable public transportation 41,4 % Sustainable buildings 47,8% As of 31 December 2020 Outstanding amount of green finance 1,786 million € As of 31 December 2020 based on outstanding amount of green finance 117 sustainable building assets 5 sustainable public transportation assets 10 water and wastewater management assets 5 renewable energy assets 10 energy efficiency assets#28MuniFin Copyright MuniFin 28 Green finance in figures Outstanding amount of green finance: 1,786 EUR million Number of green projects: 147 Annual energy savings (avoided/reduced): Annual production of renewable energy: 23,558 17,879 M Annual amount of treated wastewater in existing plants immediately after project completion: 19,499,714m Total committed green finance: € 2,206 EUR million Average remaining maturity of green projects: 24 years Annual CO2 emissions avoided/reduced: 50,260.co Renewable energy production capacity: 35 MW Annual amount of treated wastewater with increased capacity in the future: 17,746,667 m Figures based on the outstanding amount of green finance on 31 December 2020 Read more: MuniFin Sustainable Bonds Impact Report 2020 1) 23,558 MWh: Equals the annual consumption of about 1,170 electrically heated single-family houses (Source: Motiva) 2) 50,260 tCO2: Equals the average annual carbon footprint of about 4,800 Finns (Source: Sitra)#29MuniFin Copyright MuniFin 29 Executive summary of green finance Green finance in figures Green finance project breakdown Project category Sustainable buildings Sustainable public transportation Water and wastewater management Renewable energy Energy efficiency 10 10 5 number of projects 117 1.8% 8.7% mount 0.3% Total Other impact indicators Outstanding amount, EUR million Annual CO2 emissions avoided/reduced, tCO2 Impact, tCO2 per EUR million 853 4,706 6 740 6,865 9 156 n/a n/a 31 37,512 1,192 Number 6 of green 317 1,176 207 1786 50,260 n/a 47.8% %/eur Annual energy savings (avoided/reduced MWh) Annual production of renewable energy (MWh) Renewable energy production capacity (MW) 23,558 17,879 35 41.4% Annual amount of treated wastewater in existing plants immediately after project completion (m³) Annual amount of treated wastewater with increased capacity in the future (m³) 19,499,714 17,746,667 100% Sustainable public transportation Energy efficiency Sustainable buildings Renewable energy Total committed green finance: Development of green finance and green bonds 2500 2000 1500 1000 500 о EUR million Average remaining maturity of green projects: 24 years 2016 2017 2018 2019 2020 Water and wastewatengs managementduced); 23,558 Outstanding amount Annu of green financens avoid Unwithdrawn Impact attributable to green bond investors Outstanding amount of green bonds divided by outstanding amount of green finance (in EUR) as of 31 Dec 2020. Capped at 100% Amount 500m EUR 500m EUR MWR 500m EUR 500m USD 50m AUD renewable ISIN rgy: Issue date existir Maturity datem. XS2242924491 14 Oct 2020 after project completi 14 Oct 2030 25,3% XS2023679843 10 July 2019 6 Sept 2029 25,3% MWh XS1692485912 3 Oct 2017 7 Sept 2027 25,3% XS1498532271/US62630CAH43 4 Oct 2016 2 Sept 2021 22,5% XS1706174015 25 Oct 2017 able energy Zannual 25 Oct 2027 free 1,7% Basic information Green Bond Frameworks applied to the green finance portfolio credit commitments USD 500M (9/2021) AUD 50M (10/2027) tCO2 Reporting period EUR 500M (9/2027) Report publication date Frequency of reporting EUR 500M (9/2029) EUR 500M (10/2030) Next reporting planned for Reporting approach 1) 23,558 MWh: Equals the annual consump Reporting framework 2)50,260 tCO, Equals the average annuall Green bonds frameworks as of May 2019, November 2018, August 2017 and February 2016 The reporting is based on the green finance portfolio as at 31 Dec 2020 4 March 2021 Annual March/April 2022 Portfolio-based and project-by-project reporting Nordic Public Sector Issuers: Position Paper on Green Bonds Impact Reporting (February 2020)#30MuniFin Copyright MuniFin 30 Social bond eligible project categories Social Housing Welfare Education Sub-categories i. Social housing for most vulnerable population ii. Social housing that supports communal living Target populations İ. ii. Elderly, homeless, students, disabled people, people with mental health or substance abuse problems, people suffering from memory illness, youth, refugees, rehabilitees, severely marginalised people People with risk of being socially excluded Sub-categories İ. ii. Healthcare facilities (public hospitals, health centres/properties, clinics, care homes) and health service hardware Sport facilities and public open spaces (parks, fields, centres, swimming halls, ice rinks) iii. Culture facilities (libraries, culture centres, museums, theatres, multipurpose venues) Target populations İ. ii. General public (healthcare) Population living in areas where social investments are needed (sports and culture) Sub-categories Education facilities (daycare centres, pre-primary education, primary and secondary schools, upper secondary schools, higher education campuses and education centres) and education hardware Target populations i. Population living in areas where social investments are needed ii. General public (higher education campuses) 10 REDUCED INEQUALITIES SUSTAINABLE CITIES 11 AND COMMUNITIES 3 GOOD HEALTH AND WELL-BEING 10 REDUCED INEQUALITIES 11 SUSTAINABLE CITIES AND COMMUNITIES 4 QUALITY EDUCATION 10 REDUCED INEQUALITIES#3131 Social finance portfolio Social Housing 14 % Education 1 % € Total committed amount of social finance 768 million € MuniFin Copyright MuniFin Welfare 85 % Outstanding amount of social finance 589 million € As of 31 December 2020 6 welfare assets III 20 social housing assets As of 31 December 2020 based on outstanding amount of social finance B: 1 education asset#32MuniFin Copyright MuniFin 32 Social finance in figures Outstanding amount of social finance: 589 EUR million Number of social projects: 27 Total committed social finance: € 768 EUR million Average remaining maturity of social projects: 19 years Welfare: Number of patient visits: 665,966 Number of welfare service users reached: 1,641,290 Social housing: Number of apartments: 922 Of which housing for the most vulnerable population: 922 Number of residents: Read more: MuniFin Sustainable Bonds Impact Report 2020 1,079 Education: Number of students, pupils and children reached: 136 Average class size: 17 Figures based on the outstanding amount of social finance on 31 December 2020#3333 Copyright MuniFin MuniFin Why invest in MuniFin? Strong Nordic credit Strong credit ratings and explicit guarantee by the MGB Established borrower with proven track record - Stable annual funding requirements of around EUR 8-10 billion per year MuniFin is committed to continue and expand it's presence as a frequent issuer in the core currency Benchmark markets - Benchmarks in USD and EUR (RegS/144a) + possible further diversification to other public markets (Kangaroo, GBP, Green & Social bonds) - BIS 0% risk-weighted and LCR HQLA Level 1 asset in the EU area and Switzerland - Increase in secondary flows, ticker on Bloomberg: KUNTA Multi-currency program with investor driven focus and long history in MTNs MuniFin offers relative value against the Republic of Finland Benchmark notes Further details about our funding operations in the Appendices#34MuniFin Copyright MuniFin 34 Thank you NEW#35MuniFin Copyright MuniFin 35 Funding contact information Antti Kontio, CFA Head of Funding and Sustainability Tel +358 9 6803 5634 Martin Svedholm Manager, Funding Tel +358 9 6803 5685 Senior Management contact information 愛貝 Esa Kallio President and CEO Tel +358 9 6803 6231 Joakim Holmström Executive Vice President, Capital Markets & Sustainability Tel +358 9 6803 5674 Please visit www.munifin.fi Annual and Interim reports One Pager in various languages News Links Karoliina Kajova Manager, Funding Tel +358 9 6803 6215 Miia Palviainen Analyst, Funding Tel +358 9 6803 5694 Funding Contact information [email protected] Direct e-mail address format [email protected]#36MuniFin Copyright MuniFin 36 Appendices#37MuniFin 37 Copyright MuniFin Appendix 1 The Finnish healthcare, social services and regional government reform The former Finnish government proposed changes to legislation concerning Finnish social and healthcare services as well as regional governments. Although the preparations for the implementation of this reform were discontinued in 2019, the current government has continued the preparations. At this point in time MuniFin is not in a position to evaluate the reform's potential impact on its operations, as there is no finally approved legislation available and the plans related to the reform are under political discussion. While there is no telling how the reform will materialise and what effects it will have on MuniFin or its customers, it is not expected to have any significant effects on Muni Fin's operations in 2021. More information concerning the status of the reform, including the latest published draft proposals for legislation, can be found at: https://soteuudistus.fi/en/frontpage. More information: MuniFin MTN Programme Offering Circular: https://www.kuntarahoitus.fi/app/uploads/sites/2/2020/05/MTN-EUR-40bn-Programme-Offering-Circular-2020.pdf#38MuniFin Copyright MuniFin 38 Appendix 2 Municipality Finance - Legal structure Municipalities Keva (local government pensions institution) Republic of Finland 53% 31% 16% Municipality Finance plc (the "Issuer") 100% MGB is an institution under public law which was established under the MGB Act to safeguard and develop the joint funding of the Finnish municipal sector. Its members (100% of the municipalities) are jointly responsible for the obligations of MGB. Membership is permanent. Senior unsecured funding guarantee Municipal Guarantee Board (Aa1/AA+) ("MGB") Financial Advisory Services Inspira Ltd According to the Articles of Association, the Issuer's shares may not be assigned to anyone other than Keva (former name "the Local Government Pensions Institution"), municipalities, joint municipal authorities, central organizations of municipalities, entities wholly owned by or under the control of municipalities or joint municipal authorities or companies owned by such entities without the consent of the Issuer's Board of Directors. Inspira offers financial advisory services for the public sector.#39MuniFin Copyright MuniFin 39 Appendix 3 Finnish economy: Key forecast figures 2019 EUR billion 2019 change in volume (%) 2020* change in volume (%) 2021* change in volume 2022* change in volume (%) (%) GDP at market prices 241 1.1 -3.3 2.5 2.0 Imports 95 3.3 -7.5 4.5 3.8 Total supply 336 1.7 -4.5 3.0 2.4 Exports 97 7.7 -10.4 5.0 4.6 Consumption 181 0.9 -2.3 3.6 1.5 - private 126 0.8 -3.9 3.8 2.5 - public 55 1.1 1.4 3.1 -0.7 Investment 57 -1.0 -3.3 -1.6 2.4 - private 47 -1.6 -6.0 -2.0 3.8 - public 10 2.1 9.0 0.1 -2.7 Total demand 336 1.8 -4.3 3.2 2.6 Unemployment (%) 6.7 7.8 *forecast 8.0 7.6 Source: Ministry of Finance, Economic Survey, Winter 2020#40MuniFin 40 Copyright MuniFin Appendix 4 Project selection process MuniFin's Customer Finance department preliminarily identifies and assesses a potential project and prepares it for the Green Evaluation Team meeting • MuniFin's Green Evaluation Team evaluates long-term • impacts of the project and approves or declines it MuniFin offers a margin discount for green projects. The Green Evaluation Team assesses each project independently and gives them a green rating (light/medium/dark green). The margin discount amount is based on this rating Possible Green projects Initial screening of projects in accordance with the Munifin Green Bonds framework Green Evaluation Team Green Project Portfolio "Eligible projects"#41MuniFin Copyright MuniFin 41 Appendix 5 Green evaluation team • Independent committee consists of at least two members from the environmental functions of Municipality Finance's customers and/or other environmental experts from relevant public sector entities/organisations • Each loan and lease contract will be analysed • independently by the Green Loan Committee Quarterly meetings Current Green Evaluation Team members: • Päivi Sieppi, City of Lahti · Jyri Seppälä, Finnish Environment Institute • Vesa Peltola, Association of Finnish Local and Regional Authorities Expertise areas Energy efficiency, especially in buildings • PPP evaluation • Water and waste water management Public transportation#42MuniFin Copyright MuniFin 42 Appendix 6 Social Evaluation Team approves projects MuniFin's customer finance department screens projects, which it believes to be aligned with eligible project definitions in the Social Bonds Framework. For sports, culture and education projects internal evaluation model is applied for screening. The model analyses post code areas and municipalities across socioeconomic factors to identify areas where investments would have the greatest impact on the vitality of the area. After initial screening, an interview with a client is conducted in order to better understand the potential social impact of the project. Questions include: 1. rationale of the investment 2. project description 3. indetifying which problems are being solved 4. desired social impacts 5. definition of target population 6. SDG's addressed. Jouni Parkkonen, Päivi Petäjäniemi and Jenni Airaksinen Social Evaluation Team reviews the project reports and makes the final decision based on the overall impact. Projects need to promote some of the wider social goals such as equality, communality, safety, wellbeing and vitality of the area. Further, ability to narrow wellbeing gaps is also discussed. For loans/leases, which are up for pricing will receive margin discount. Social Evaluation Team consists of two outside experts and one MuniFin representative Jenni Airaksinen University of Tampere, Lecturer, Regional leadership and development Jouni Parkkonen Association for Advocating Affordable Rental Housing - KOVA, Executive Director Päivi Petäjäniemi MuniFin, Manager at customer finance with a focus on social housing companies#43MuniFin 43 Copyright MuniFin Appendix 7 ISS ESG Second Party Opinion SPO Part 1: Performance against SBP Part 2: Sustainability quality of the asset pool Part 3: Issuer sustainability performance Summary The issuer has defined a formal concept for its Social Bonds regarding use of proceeds, processes for project evaluation and selection, management of proceeds and reporting. This concept is in line with the ICMA SBPS. The overall sustainability quality of the asset pool in terms of sustainability benefits, risk avoidance and minimization is good based upon the ISS ESG Social Bond KPIs. The Social Bond KPIs contain a clear description of eligible asset categories which include social housing, welfare and education projects. All assets of the asset pool are located in Finland, a highly regulated and developed country. Legislative frameworks in this country sets minimum standards which reduce environmental and social risks. The issuer itself shows a medium sustainability performance and has been given a rating of C+, which classifies it as 'Prime' by the methodology of the ISS ESG Corporate Rating. It is rated 11th out of 117 companies within its sector as of 04.03.2020. This equates to a high relative performance, with a Decile Rank of 1. Evaluation Positive Positive Status: Prime Rating: C+ Decile Rank: 1 Contribution or obstruction SDG Goals Social Housing Welfare: Healthcare Welfare: Sports Welfare: Cultural Education Significant contribution Significant Limited contribution Limited contribution contribution Significant contribution 10 & 11 3 3 4 4 Source: ISS ESG, available: https://www.kuntarahoitus.fi/app/uploads/sites/2/2020/03/200304_Munifin-SPO-final-1.pdf#4444 MuniFin Copyright MuniFin Appendix 8 Social Housing Jousenpuistonkatu, Housing by Setlementtiasunnot Building containts 58 apartments of which 15 are for special groups. Standard ARA criteria applies to the standard apartments Finance: EUR 10,404,200 Target population: Disabled, people with mental health problems, immigrants and low income population Rationale for investment: Providing affordable housing close to public transportation (5 minutes to metrostation). Social Evaluation Team's rationale: Setlementtiasunnot is a producer of housing whose housing concept is truly praiseworthy, as it diversifies the concept of 'normal', integrates members of special groups into the rest of society and supports the strengthening of all the residents' sense of community. Communal housing solutions allow special groups to become involved with the wider community, which reduces loneliness, increases participation, prevents social exclusion and decreases the need for institutional housing and care. Some of the residents of these buildings are immigrants, and the project may profoundly promote their integration. The apartments have housing coordinators, who support the residents and utilize the common areas in their activities. Third sector organisations also organise activities in the common area. Setlementtiasunnot Housing location: City of Espoo Population: 289,731 (2019)#4545 Copyright MuniFin Appendix 9 Welfare Sopukka Wellbeing Centre Emergency department, patient clinic, laboratories, dental care, rehabilitation, occupational health, physiotherapy, family care, mental health services and social services Finance: EUR 22,000,000 Target population: Population of Sodankylä and wider Central Lapland Rationale for investment: Replaces old 1960 building and offers space for new services. Received special approval from the ministry of social affairs and health. Issues faced by the municipality: Declining and aging population Social Evaluation Team's rationale: The evaluation team found the justification for the project very well founded. The circumstances in Northern Finland are exceptional due to the long distances, and regional challenges are considerable. Special emphasis is placed on providing remote appointments. Sopukka's operating model will boost the use of expert resources, make the healthcare supply chain more effective, considerably improve the safety of the region's inhabitants and increase the region's attractiveness. MuniFin (+) Λ Municipality of Sodankylä Location: Lapland Population: 8303 (2019)#4646 MuniFin Copyright MuniFin Appendix 10 Welfare Tyks Majakkasairaala, Turku Paediatric ward, obstetrics and gynaecological clinic, otorhinolaryngology clinic, oral and maxillofacial diseases clinic Finance: EUR 200,000,000 Target population: Population of South-West Finland, Satakunta, area of Vaasa and Ostrobothnia using the services provided by Tyks Majakkasairaala Rationale for investment: Replaces an old and dated hospital building. The new building will allow more services to be provided closer to patients and special emphasis is placed on quality of care, patient experience and well-functioning spaces. Social Evaluation Team's rationale: The evaluation team particularly appreciated the investments in patient experience and the quality of encounters in stressful situations with vulnerable target groups. The project has a significant impact on improving the vitality and attractiveness of the area, and its role in strengthening Turku's position as an international center of expertise in health technology is seen as exceptionally significant. The team also praised the hospital's location near sustainable and accessible transport links. (+) Hospital District of South-West Finland Location: South-West Finland (Turku) Population: 479 341 (2020)#47MuniFin 47 Copyright MuniFin Appendix 11 Education Karstula comprehensive school School for 400-500 pupils (from preprimary to upper secondary) Finance: EUR 16,000,000 Target population: Children and wider population of Karstula Rationale for investment: Previous school buildings had indoor air problems and pupils have been relocated to temporary locations scattered across the municipality. Issues faced by the municipality: Declining and aging population, high unemployment Social Evaluation Team's rationale: Well-functioning, healthy and safe facilities for early childhood education and teaching are a foundation for the well-being of children, teenagers and teaching staff alike. Solutions that support safety and a sense of community can have a significant effect on children and teenagers' self-esteem and later life. Using the school as a venue for village events will bring vitality to the village and strengthen community spirit and add to the municipality's attractiveness. KOULU Municipality of Karstula Location: Central Finland Population: 3949 (2019)#48MuniFin Copyright MuniFin 48 Appendix 12 Annual impact report SBP Category SDG's addressed 10 REDUCED SUSTAINABLE CITIES INEQUALITIES AND COMMUNITIES Defined by ICMA/UN and assessed by MuniFin A Social benefit classification (equality, safety, weillbeing, vitality of region) Social finance category by MuniFin Target population Committed and allocated finance, share of total financing Number of people benefitting Defined and assessed by MuniFin Number of dwellings, establishments or square meters Defined and provided by customers MuniFin promotes the use of impact reporting to the largest extent possible. In addition to the elements above, MuniFin is committed to work together with clients to find additional relevant and informative impact metrics. As each project is unique, available impact data will likely be different. Data protection may also impact the data availability. MuniFin is committed to promote and develop its impact reporting and as a result, MuniFin is open to any proposals on how the report could be improved.#49MuniFin Copyright MuniFin 49 Appendix 13 Management of proceeds An amount equal to the net proceeds of the social bonds will be earmarked and used to finance new eligible projects and to refinance existing eligible projects in the social finance portfolio. Projects are classified as new eligible projects if they have been completed less than 12 months before the project's approval date in the Social Evaluation Team. The ambition is to use the majority of the social bond net proceeds to finance new eligible projects. The share of refinancing will be shared in the annual impact report. € Until disbursement to eligible projects, the earmarked proceeds will be placed in liquidity reserves and managed according to the responsibility policy of MuniFin.#5050 Copyright MuniFin MuniFin Appendix 14 Social Housing model in Finland FINNISH GOVERNMENT Sets policies and action plans on social housing Provides funding Defines tenant selection criteria, the "ARA criteria". • Tenants for social rental dwellings are selected on the basis of social appropriateness and financial need. More detailed criteria include the urgency of the applicant's housing need, level of income and property. Priority is given to homeless applicants and to applicants in urgent need of housing. Income and wealth of the applicants are also taken into consideration. ara The Housing Finance and Development Centre of Finland Governmental agency operating under the supervision of the Ministry of the Environment Implements social housing policy Grants subsidies, grants and guarantees for housing. Controls and supervises the use of housing stock Operating principle: Everyone is entitled to comfortable housing TO S heka Setlementti asunnot A-Kruunu Asokodit Social rental housing can be produced or acquired by: ASUNTOSÄÄTIÖ 1. local authorities or other public corporations 2. corporations that fulfill certain preconditions laid down in regulations. These include e.g. organisations for social housing, old age and student housing associations. 3. limited liability companies of various types in which one or more of the three organisations mentioned above have direct dominant authority.#51MuniFin 51 Copyright MuniFin • Appendix 15 ESG Score of MuniFin's liquidity portfolio MuniFin's liquidity portfolio is managed in accordance with the company's Responsibility Policy approved by the Board of Directors. • MuniFin monitors the environmental, social responsibility and governance practices of the issuers in the liquidity portfolio. This is done by monitoring the ESG scores of the issuers. • The average ESG score of all investments is compared with a benchmark index using an asset class breakdown corresponding to the company's liquidity portfolio. • At the end of 2020, MuniFin's liquidity portfolio had an ESG average of 55.7 on a scale of 1-100, which is above the benchmark index (53.3). Source: Union Investment 2020#52MuniFin Copyright MuniFin 52 • • • • . Appendix 16 MuniFin Euro-Commercial Paper (ECP) Program Investor by type 2020 Unknown 5 % The size of the program (under English law) has been increased to EUR 10 billion STEP-compliant since 2020 Outstandings have been during 2020 on average EUR 3.5 billion Main currencies: USD, EUR and GBP Dealers: Citibank, BAML, Barclays, BMO, Bred, UBS and Rabobank Central Bank 22 % Unknown 9% North America 14 % Aasia 15 % Investor by region 2020 South America Africa 1 % 1 % Asset Manager Europe 60% 73 %#53MuniFin Copyright MuniFin 53 Appendix 17 Keva - Local Government Pensions Institution • · Mandatory pension fund for people working in the local government sector. Responsible for funding the pensions of local government employees and for investing their pension funds (1.2 million insured persons and pension recipients). • Independent body governed by public law and operating. in accordance with the Public Sector Pensions Act and the Keva Act. • · • Supervised by the Ministry of Finance, the Financial Supervisory Authority and the National Audit Office of Finland. Assets of the fund totalling 56.2 billion € (12/2019). Keva is Finland's largest pension provider. Breakdown of Keva's investments* Hedge Funds 8% Private Equity 9% Real Estate 6 % Equities 35 % Fixed Income 42 % *As of December 31, 2019 Source: Keva 2020#54MuniFin Copyright MuniFin 54 Appendix 18 10y EUR 1 billion Benchmark • MuniFin priced its second benchmark transaction of 2021 on 23 February 2021. • . The bond is a 10-year EUR 1 bn note due 2 March 2031. • The joint lead managers were Barclays, Citi, HSBC and Swedbank. • The benchmark was priced at mid swaps -3 bps and pays an annual coupon of 0%. The spread over the DBR 0% due February 2031 was 28.7 bps. · The benchmark quickly gathered an orderbook above EUR 3.8 billion, which is one of the largest in MuniFin's history. • 106 investors participated in the transaction with 89% allocation to European investors and 52% allocation to bank treasuries, 24% to asset managers and 23% to central banks and other official institutions. 1% 23% 24% ■ Banks ■Asset managers 52% ■Central Banks / Official Institutions ■ Other 14% 25% 11% 50% ■Germany/Austria/Switzerland BeNeLux ■Rest ■Other Europe#55MuniFin Copyright MuniFin 55 Appendix 19 5y USD 1.5 billion Benchmark . • MuniFin kicked off 2021 with a USD denominated • benchmark transaction on 12 January 2021. ⚫ The bond is a long 5-year USD 1.5 bn note due 20 March 2026. • The joint lead managers were Bank of America, • • . Goldman Sachs, JP Morgan and TD. The final order book was over USD 3.1 billion and the benchmark was MuniFin's largest USD benchmark since 2013. The benchmark was priced at MS+8bps, with central banks and official institutions taking over 40% of the final allocations. Geographically, EMEA took the bulk with 79% of the allocations, supplemented by Americas (16%) and Asia (5%). • The benchmark pays an annual coupon of 0.625%. The spread over the CT5 was 17.78 bps. 41% ■ Banks 3% 8% ■Central Banks / Official Institutions 48% ■Asset managers/Insurance/Pension funds ■ Other 16% 5% 79% ■ EMEA ■ Americas ■ Asia Pacific#5656 Copyright MuniFin Appendix 20 EUR 500 million 10-year Green bond • • . MuniFin issued its third public Green bond on 6 October 2020. A record 55% allocation was sold to ESG focused investors, highest allocation in MuniFin's Green bonds. The 10-year EUR 500 million benchmark offers a 0% coupon and a spread of 30.7bps over the DBR 08/2030, equivalent to 2 bps over mid-swaps. The mandate of a new 10y 500m Green benchmark was announced at 11.00am London time on Monday 5th of October. • The following morning books were officially opened at 8.00am London time with spread guidance of mid-swaps +5bps which represented minimal new issue concession of 1bp. • • Momentum was strong from the outset and orders built rapidly. By 9.35am London time demand was in excess of EUR 2.7bn and spread was revised by 3bps to ms+2bps, representing a negative new issue concession of 2bps. Insurance/Pension funds 9% Central Banks / Official Institutions 33 % Banks 28 % Other 10 % Americas 8% Despite the negative new issue concession on offer, orders continued to build with final books at 3.35bn. France 9% Asset Managers 30% MuniFin Green bond Germany/Austria/ Switzerland 32 % MuniFin 62 • Green bond was jointly led by Danske Bank, NatWest Markets, Nomura and Nordea. • 106 investors participated in the transaction. Southern Europe 10 % Benelux 10% Nordics 21 %#57MuniFin Copyright MuniFin 57 Appendix 21 Inaugural EUR Social bond MuniFin issued its inaugural EUR 500 million 15-year Social bond on 3 September 2020. The bond is the first Nordic and Finnish Social bond issued in the SSA category. MuniFin will use the proceeds of the Social bond to finance social housing, welfare and education in accordance with its Social bonds framework. MuniFin aims to encourage investments that have a notably strong impact and bring about wide-ranging social benefits. • Ahead of the transaction MuniFin held a GIC as well as a series of one-on-one investor calls to update investors ahead of the inaugural transaction. • The benchmark was almost four times oversubscribed in just 2.5 hours, which is a testimony of increasing investor interest in sustainable products. Books were opened on 3 September with price guidance at MS+12bps area and as a result of strong investor demand spread was set at MS+9bps with final orders in excess of EUR 1.9 billion. • More than 91% of the bond was distributed to European investors. Almost one third of the bond was allocated to Germany, Austria and Switzerland and nearly one fifth to Nordic countries. Asset managers took the largest share by representing almost half of the investors, with significant demand from SRI investors. The note has a final maturity of 10 September 2035 and pays a fixed coupon of 0.05 % annually, which equates to 9 bps over the 15-year mid swap rate. This is equivalent to a 33.6 bps spread over the DBR 0% May 2035. The bond will be listed on the Sustainable Debt Market at Nasdaq Helsinki. The Joint Lead managers of the transaction were BNP Paribas, Credit Agricole CIB, DZ Bank and SEB. Insurance/Pension Others funds 8% Banks 15 % Central Banks / Official Institutions 25% Asia Pacific 9% France 15% Other Europe 9% 3% Asset Managers 49 % Germany/Austria/ Switzerland 30% Nordics 17 % Benelux 20 % MuniFin Social bond#58Copyright MuniFin MuniFin Mary 58 Appendix 22 3y USD 1 billion Benchmark, 0.375% • MuniFin priced its first USD denominated benchmark transaction of 2020 on 23rd June 2020. 7% • ⚫ The bond is a long 3-year USD 1 bn note due 1st September 2023 and is MuniFin's ninth benchmark line to date. 25% 68% • The joint lead managers were Deutsche Bank, JP Morgan, RBC and TD. • • • The benchmark was priced at mid swaps +16 and pays an annual coupon of 0.375%. The spread over the CT3 was 21.1 bps. The re-offer price was 99.855% and the re-offer yield was 0.421%. The final order book was over EUR 2.8 billion and more than 70 investors placed orders. ⚫ The orderbook was of very high quality. 68% of the allocations went to Central Banks & Official Institutions, 25% to Banks and 7% to Asset Managers. ■Central Banks / Official Institutions ■ Banks Asset managers 14% 10% 2% 46% 28% ■ Americas ■Middle East and Africa ■ Europe ■ Asia Pacific ■ Nordics#59MuniFin Copyright MuniFin 59 Appendix 23 5y EUR 1 billion Benchmark, 0.00% • • MuniFin priced its second EUR denominated benchmark transaction of 2020 on 15 April 2020. The bond is a 5-year EUR 1 bn note due 22 April 2025 and is MuniFin's eighth benchmark line to date. The joint lead managers were Barclays, Citi, Morgan Stanley and Nordea. • The benchmark was priced at mid swaps +16 and pays an annual coupon of 0%. The spread over the OBL 0% due April 2025 was 56.4 bps. The re-offer price was 100.476% and the re-offer yield was -0.095%. • The final order book was over EUR 3.6 billion and more than 90 investors placed orders. • The orderbook was of very high quality. 46% of the allocations went to Central Banks & Official Institutions, 45% to Banks, 7% to Asset Managers and 2% to Insurance/Pension Funds. 45% 2% 7% ■Central Banks / Official Institutions ■ Banks Asset managers ■ Pension/Insurance 19% 4% 1% 0 46% 76% ■Europe (excl. Nordics) Nordics Americas Asia Pacific#60MuniFin Copyright MuniFin 60 Appendix 24 MuniFin Additional Tier 1 Capital Transaction ◉ ☐ ■ On 16th September 2015, Municipality Finance Plc ("MuniFin") announced a series of investor meetings in connection with the launch of their inaugural Additional Tier 1 Capital transaction. This transaction is the first publicly distributed AT1 instrument from a public sector entity in Europe, and achieved a new pricing milestone for this product in terms of lowest offered coupon The securities were issued to ensure that MuniFin complies with leverage ratio requirements, well ahead of anticipated entry into force in 2018. MuniFin's leverage ratio at 30 June 2015 stood at 1.9% The securities are expected to be rated BBB+ by S&P which makes the securities the highest rated AT1 in the market, due to the high quality nature of the credit Goldman Sachs International acted as joint bookrunner on this transaction together with Barclays, BNP Paribas and Nordea Markets Structure The securities are EUR denominated (RegS format) and feature a fixed coupon of 4.500% up to but excluding the First Call Date (1st April 2022). The coupon will reset every 5 years thereafter (non-step up). They also feature a 5.125% CET1 trigger (Issuer and Group) with temporary write-down loss absorption Execution Following a three-day constructive roadshow in London, Amsterdam, Zurich, and the Nordic region, MuniFin launched a € RegS PNC6.5 on Thursday 24th September 2015 ■Investor feedback throughout the roadshow was very supportive, leading syndicates to enter the market with IPTS of high 4% for a no-grow €350mm trade Following tightening guidance to 4.625% area, the Lead Managers finally printed a €350m transaction at MS+396bps on the back of a substantially oversubscribed orderbook Distribution by Geography ■ Finland 5% 5% 19% 63% Issuer: Pricing Date: Instrument: Issuer Ratings: Municipality Finance Plc (Kuntarahoitus Oyj) 24th September 2015 Perpetual Fixed Rate Resettable Additional Tier 1 Securities AaaAA+ (Moody's / S&P) Expected Issue Rating: BBB+ (S&P) Issue Size: €350m Maturity & Non Call Period: Coupon Interest Cancellation Trigger Event Write-Down and reinstatement Distribution by Type 4% 2% 43% Optional Redemption ■ Owners 15% 36% ■Fund Managers ■ Pension & Insurance Official Institutions Nordics (ex Finland) United Kingdom ■Rest of Europe ■Middle East & Other ■ Banks Special Event Redemption ISIN: Perpetual NC6.5 The coupon is fixed until the First Reset Date and then reset every 5 years thereafter (non-step up) First Reset Date: 1 April 2022 and will be fully discretionary non- cumulative, payable annually in arrears, with a short first coupon Coupon payment is at the full discretion of the Issuer. Mandatory cancellation upon insufficient Distributable Items, Maximum Distributable Amount to be exceeded or otherwise so required by the CRD IV, including the applicable criteria for Additional Tier 1 Capital instruments. Non-cumulative Common Equity Tier 1 Ratio of the Issuer on an unconsolidated basis and/or the Group on a consolidated basis is less than 5.125% Upon a Trigger Event, the Prevailing Outstanding Amount will be written by the relevant Write-Down Amount. Following a Write-Down the Issuer may, at its discretion, reinstate some or all of the Original Principal Amount of the Securities, subject to compliance with the Relevant Rules and the Reinstatement Limit on a pro-rata basis with the reinstatement of all other Equal Trigger Instruments (if any) 1st April 2022 ("First Call Date") and any Interest Payment Date thereafter, at the Original Principal Amount, subject to the Conditions to Redemption and Purchase The issuer may redeem the Securities at the Prevailing Outstanding Amount upon the occurrence of a Capital Event (exclusion in whole or in part of Additional Tier 1 Capital) or a Tax Event (future additional amounts or loss of interest deductibility) (each a "Special Event"), subject to the Conditions to Redemption and Purchase XS1299724911 Source: Bloomberg, Company Press Releases as of 24 September 2015#6161 MuniFin Copyright MuniFin ac § Disclaimer This presentation has been made by Municipality Finance Plc ("MuniFin"). All information expressed herein are at the time of writing and may change without notice. MuniFin holds no obligation to update, modify or amend this publication. The material is informative in nature, and should not be interpreted as a recommendation to take, or not to take, any particular investment action. The information in this presentation is intended only for the named addressee. The material may not be copied, in part or in whole, without written permission from MuniFin. This presentation or copies of it must not be distributed in the United States or to recipients who are citizens of the United States against restrictions stated in the United States legislation. Laws and regulations of other countries may also restrict the distribution of this presentation. This presentation may contain forward-looking statements that reflect views with respect to certain future events. Although MuniFin believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. The past events discussed in this presentation may not be indicative of future results.