Quarterly report on Local Government Debt Management: Stable interest rates but continued short capital maturity
21 January 2026The quarterly report "Local Government Debt Management", which provides an overview of the structure and terms of the Swedish local government sector’s total loan portfolio, has now been updated with new data for the fourth quarter of 2025. The report shows that interest rates remain stable, while both capital and interest maturity continue to stay at short levels.
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 fourth quarter includes 9,535 loans, certificates and bonds, for a total amount of SEK 725 billion, and 1,673 financial derivatives corresponding to SEK 215 billion.
The average interest rate in the sector was 2.4 per cent including derivatives, which is 2 basis points lower than in the previous quarter. The average capital maturity increased slightly to 2.47 years, and 27 per cent of the debt matures within 12 months. 18 per cent of the debt consists of certificates and short‑term loans. 7 per cent of the debt has a remaining maturity longer than five years. The average interest maturity, including derivatives, was unchanged at 2.67 years.
A large share of the sector’s funding is linked to floating interest rates. During the quarter, 43 per cent of the funding was tied to the three‑month Stibor. Through the use of interest rate derivatives, the interest maturity is extended from 1.59 years to 2.67 years. Capital maturity remains short, meaning that investments are often financed with funding that is renewed several times during their economic lifetime.
– The sector’s average interest rate has remained around 2.5 per cent over the past two years. This quarter’s in‑depth analysis, a projection of the sector’s average interest rate, indicates continued stability in the short term and a gradual increase over the longer term. At the same time, the local government sector is sensitive to changes in the interest rate environment, as a large share of the debt portfolio consists of floating‑rate loans or loans with short interest maturity, says Viktor Johansson, Analyst at Kommuninvest.
New borrowing during the quarter amounted to SEK 76 billion in loans, bonds and certificates, and SEK 13 billion in derivatives. The average capital maturity on new borrowing was 3.22 years, the interest maturity including derivatives was 2.74 years, and the average interest rate was 2.53 per cent, up from 2.52 per cent in the previous quarter.
Link to the report: Local Government Debt Management for the fourth quarter of 2025
For further information:
Viktor Johansson, Analyst, phone: +46 10 470 87 67
e-mail: viktor.johansson@kommuninvest.se