Quarterly report on Local Government Debt Management: Slightly higher interest rates and continued short capital maturity

The report is based on Kommuninvest’s lending and transactions registered by municipalities, regions and their companies in the debt management tool KI Finans. The data for the first quarter of 2026 include 9,825 loans, certificates and bonds, for a total amount of SEK 746 billion, and 1,700 financial derivatives corresponding to SEK 219 billion.

The average interest rate in the sector was 2.48 per cent including derivatives, compared with 2.4 per cent in the previous quarter. Of total borrowing, 42 per cent is linked to floating interest rates, primarily three‑month STIBOR. The average capital maturity was 2.64 years, while the average interest maturity, including derivatives, was 2.81 years.

Capital maturity in the local government sector remains short. One quarter of the debt matures within 12 months, of which 18 per cent consists of certificates and short‑term loans that are typically renewed several times per year. Only 9 per cent of the debt has a remaining maturity longer than five years. The short capital maturity means that investments are often financed with funding that is renewed several times during their economic lifetime.

The use of interest rate derivatives helps extend interest maturity. Excluding derivatives, the average interest maturity is 1.75 years, reflecting the high share of floating‑rate loans with short interest maturity. Overall, this means that the local government sector is sensitive to changes in the interest rate environment.

– Volatile financial markets have affected the sector’s interest rates during the quarter. Due to short average capital and interest maturity, changes in the interest rate environment are transmitted relatively quickly, says Viktor Johansson, Analyst at Kommuninvest.

New borrowing during the quarter amounted to SEK 72 billion in loans, bonds and certificates, and SEK 11 billion in derivatives. The average interest rate on new borrowing was 2.55 per cent. The average capital maturity on new borrowing was 3.19 years, while the interest maturity including derivatives was 2.75 years.

Link to the report: Local Government Debt Management – first quarter of 2026

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