Quarterly report on Local Government Debt Management: Capital maturities are declining – interest rate stabilization continues

The report is based on Kommuninvest’s lending and transactions registered by municipalities and regions, as well as their companies, in Kommuninvest’s debt management tool KI Finans. The data for the third quarter of 2025 includes 9,447 loans, certificates and bonds for a total amount of SEK 707 billion, and 1,666 financial derivatives corresponding to SEK 213 billion. 

The average interest rate in the sector was unchanged from the previous quarter at 2.42 percent. The average capital maturity decreased from 2.52 years to 2.44 years during the quarter, and 25 percent of the debt matures within 12 months, of which 20 percent consists of certificates and revolving loans that are extended several times per year. Only 8 percent of the debt has a remaining term longer than five years. The average interest rate maturity, including derivatives, was 2.67 years. 

A large share of borrowing is linked to floating interest rates. Through the use of derivatives, interest rate maturity is extended from approximately 1.6 years to 2.7 years, reducing interest rate risk in the sector. Capital maturities remain short, meaning that investments are often financed with borrowing that is renewed several times during its economic life. The share of derivatives in the loan volume has decreased from 40 to 30 percent over the past ten years, while new derivatives are increasingly signed with maturities between three and five years. 

– This quarter’s in-depth analysis examines the development of the local government sector’s use of interest rate derivatives. It shows a continued decline in derivative usage relative to loan volume and that a larger share of new derivatives are signed with shorter maturities than before, says Viktor Johansson, Analyst at Kommuninvest. 

New transactions during the quarter included SEK 43 billion in loans and securities and SEK 8 billion in derivatives. Capital maturity was 2.92 years, interest rate maturity including derivatives 2.72 years, and the average interest rate 2.52 percent, down from 2.69 percent in the previous quarter. 

Link to the report: Local Government Debt Management Q3 2025  

For further information: 

Viktor Johansson, Analyst
phone: +46 10 470 87 67 
e-mail: viktor.johansson@kommuninvest.se 

Victoria Preger, Chief Communication Officer
phone: +46 70 266 87 26 
e-mail: victoria.preger@kommuninvest.se