VER’s investments in the commercial paper market

On 31 March 2020, VER had EUR 280 million invested in commercial papers and on 8 April 2020 EUR 311 million. Investments have been made in the commercial papers of 25 companies.

The State Pension Fund of Finland increased these investments in March as part of the Government measures to boost corporate financing. VER buys commercial papers as instructed by the Ministry of Finance within its limits and authorisations through intermediary banks with due regard to time diversification. The State Pension Fund may increase its investments in the commercial papers issued by Finnish companies to a maximum value of one billion euros. The investments are governed by the following conditions, among others:

• return on the commercial papers must accrue according to normal market practices,
• a maximum of EUR 50 million may be invested in any single company,
• the maximum maturity of the commercial papers is 12 months,
• the issuer of commercial papers must have a minimum credit rating of BBB- or an equivalent short-term rating or be deemed to present a low credit risk in VER’s assessment.

In the absence of an international credit rating, VER bases its own assessment of creditworthiness primarily on Bloomberg’s Default Risk classification, within which framework investments can be made in investment grade companies.

Additional information: CIO of Fixed Income, Mikko Räsänen, tel. +358 295 201 212 or firstname.lastname@ver.fi