Munich votes in favour of a new city bond
The City Council of Munich approved the issuing of 120 million euros worth of bonds that will be managed by two partners
- March 21, 2020 20:00
Municipal authorities of Munich voted in favour of issuing a new city bond. The planned amount shall be between 100 and 120 million euros and will be traded on the stock exchange. The issue will be announced in the first quarter of 2020.
The main managers of the financial instrument will be two institutional players – BayernLB and UniCredit. However, the chain of HypoVereinsbank and Stadtsparkasse Munich will act as intermediaries. They will allow for different private investors and regular citizens to buy Munich city bonds. More information will be available when the bonds are issued.
Bonds with social orientation
The authorities say these are not simply bonds, they also have social features. They present an additional way of financing the city itself in a way that makes it sustainable and meets some of the circular economy requirements. It is also a very straightforward way for the citizens to take part in their own city`s financial transformation.
The issue of a city bond puts Munich at the forefront of social and sustainable financing. It will support the public authorities in financing more socially sustainable projects. The municipality will be able to invest some of the money in apartments. In the future, this will also guarantee the good living conditions for a certain stratum of local society.
In addition to all of these benefits, it also provides a clear message to investors. They are welcome to come to the capital of Bavaria and invest their money in businesses and projects. It is expected for them to generate a good return on these investments.
The municipality of Munich's idea for the issuing a city bond can be seen as a good example for other local authorities to follow suit. It is also a good way to ensure local financing, attract investors and show their constituents the benefits that will come from it.
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