Investor PresentationQ2 2020

2

DISCLAIMER

This presentation, including the accompanying slides and subsequent discussion, containscertain forward-looking information, forecasts, projections, goals and strategies (the “forward-looking information”) with respect to revenues, funding, expenses, the financial condition, andresults of operations. This forward-looking information represents the Municipal FinanceAuthority of British Columbia’s expectations or beliefs concerning future events and involvesknown and unknown risks and uncertainty that could cause actual results, performance or eventsto differ materially from those expressed or implied in such statements. This material is forinformation purposes only.

3

INTRODUCTION

• Formed in 1970 under the Municipal Finance Authority of British Columbia Act

• Long term debt ratings of AAA/Aaa/AAA by S&P/Moody’s/Fitch

• Infrastructure financing to local government in the Province of British Columbia

- Access to stable and lowest cost funding for sewer, water, roads, public works, parks, etc.

• Provide competitive investment alternatives and quality financial education

• We have consistently been profitable from operations and benefit from direct taxation power and a stable and large capital base to support our lending.

• Our borrowing program emphasizes predictable and large public offerings: BCMFA is the benchmark municipal issuer in Canada - offering the highest credit quality and most liquid bonds in the sector

4

LINES OF BUSINESS

MFA Line of Business Strategic Fit Description Market Positioning

Long-Term Financing

Core Business MFA’s core business activity is providing long-term financing to local governments.

No competitors. By legislation, all long-term borrowing by municipalities and regional districts in British Columbia must be provided by MFA.

Short-Term Financing

Secondary revenue stream (non-core)

MFA provides optional short-term financing to local governments.

Low competition. MFA is able to offer highly competitive short-term lending rates to BC local governments.

Pooled Investment Products

Secondary revenue stream (non-core)

MFA provides optional investment products to local governments through its pooled fund offerings.

Highly competitive. However, MFA is able to provide local governments with broad exposure to different asset classes (vs. strict limitations set out in the Community Charter).

5

GOVERNANCE

British Columbia – Local Government

Board of Directors

10 Trustees

MFA Employees

• 28 Regional Governments made up of municipalities, cities, towns & villages

• 39 Members appointed by local government

• Responsible for reviewing loans, electing trustees

• Trustees responsible for overseeing operations and management

• Authorize debt issuance

• Manage loans, debt and investments

• Balance sheet of $9.4bn

• Complement of 15 professionals

6

LEGISLATIVE CREDIT STRENGTHS

Taxation AuthorityEqually applied to all taxable land and improvements in BC

• Annual operational tax levied every year• Unlimited taxation authority to replenish Debt Reserve Fund• BCMFA must increase taxes to replenish Debt Reserve Fund in certain circumstances• Senior-level government approval not required – Trustees of BCMFA approve• Property values assessed of approximately $1.7 trillion

Joint LiabilityBorrowers’ long-term debt with BCMFA is a Regional District liability

• Borrowers guarantee each other’s debt in event of default• Joint and several guarantees never been applied (zero losses)

InvestmentsSinking Fund Methodology

• Semi-annual billing of interest to match debenture coupons• Annual billing of principal for debt retirement• $3.9 billion in investments (48% of gross long-term debt)

• In 2019 BCMFA adopted a policy and framework outlining a target for on-balance sheet risk capital, the retention of operating surplus, and the ongoing management of capital The Strategic Retention Fund ($84 million) and Debt Reserve Fund ($111 million)

collectively comprise total capital ($195 million as at December 31, 2019). The MFA has self imposed the following requirements on itself. The Capital Adequacy

Model targets a capital level for the greater of a non-risk capital assessment ($187M) and a risk-based capital assessment ($171M):

2019 2018NON-RISK BASED CAPITAL ASSESSMENT Capital Leverage Ratio: Total Assets $9.4 billion $9.2 billion Target % 2.00% 2.00% Non-Risk Based Target Level $187 million $185 million Current % 2.08% 1.95%

RISK BASED CAPITAL ASSESSMENT Part A - Capital Adequacy Ratio: Total Risk Weighted Assets $1.7 billion $1.8 billion Target % 9.72% 9.60% Risk Based Target Level A (credit, operational & market risk) $165 million $170 million Current % 11.44% 10.25%

Part B - Key Internal Risks: Risk Based Target Level B (investment return & lt debt refi risk) $6 million $6 million

Combined Risk Based Target Level (Part A + Part B) $171 million $176 million

Total Capital (SRF & DRF) $195 million $181 million

7

RISK CAPITAL MANAGEMENT

8

BC LOCAL GOVERNMENT LEGISLATIVE COMPLIANCE

Balanced Budgets• Under provincial legislation, municipalities may not plan for a deficit

Transparency and Disclosure • Audited financial statements - PSAB, by May 15 • Annual Report - presented to residents, by June 30

Long-Term Capital and Financial Planning• Five year financial plans - public consultation, by May 15

9

BC LOCAL GOVERNMENT BORROWING FRAMEWORK

Debt Limits Only 25% of recurring revenues eligible to service debt costs

Taxpayer All long-term municipal debt in BC requires a public approval process

Province of BCLegislation requires the Provincial Inspector to verify:• Borrowings are legal and within debt limits• Municipalities have the financial ability to service debt

Regional District Long-term debt is approved by the Regional District

MFA

• Oversight and review• Due diligence and statutory reviews • Management credit review • Trustees and Members review loan requests • Members authorize the sale of securities

10Source: British Columbia Financial and Economic Review – 79th Ed. (July 2019)Note: 2018 figures shown

Real Estate, Rental & Leasing

17.4%

Other14.7%

Wholesale & Retail Trade10.0%

Construction8.6%

Health Care & Social Assistance

7.1%

Manufacturing7.1%

Transportation & Warehousing

6.6%

Professional, Scientific &

Technical Services6.3%

Finance & Insurance5.9%

Natural Resources5.7%

Public Administration

5.5%

Educational Services

5.2%

BRITISH COLUMBIA’S DIVERSE ECONOMY

11

RECENT LONG-TERM DEBT ISSUANCE

C$mm Date Term$615 May 20, 2020 5$280 March 26, 2020 5$235 Sep 25, 2019 10$800 May 21, 2019 5$170 April 1, 2019 10.5$605 Nov 16, 2018 5$555 Sep 12, 2018 10$410 April 10, 2018 5$170 April 10, 2018 10.5$500 Nov 21, 2017 5$35 Sep 27, 2017 7

$160 Sep 27, 2017 10$200 Mar 31, 2017 10$61 Jan 12, 2017 25$50 Nov 08, 2016 2

$130 Sep 28, 2016 10

• Typically issue new 10-year in spring (April) and fall (September)

- Will often issue a 10.5-year and re-open in 6 months.

• New 5-year issues are typically completed “off-cycle” and are aligned with existing debt maturities

• Focused on building benchmark issues over $500mm

- Currently 8 outstanding issues >$500mm

- Well defined curve out to 2029

Year 2022 2021 2020

5 Year ($mm) $650 $950 $895

10 Year ($mm)

$675to

$1,125

$800to

$1,200

$105To

$135

Total ($mm)

$1,325to

$1,775

$1,750 to

$2,150

$1,000to

$1,030

12

ANTICIPATED BORROWINGS

Completed in March and May 2020

MFA expects to resume its borrowing program in Fall 2020

$9.8

$7.9

$4.6

$1.8 $0.8 $0.6 $0.6 $0.3 $0.3 $0.3 $0.1 $0.1 $0.0 $0.0

BCMFA Muni A Muni B Muni C Muni D Muni I Muni F Muni H Muni G Muni J Muni K Muni L Muni E Muni M

13

2019 MUNICIPAL SECONDARY TRADING VOLUME ($ billions)

2018 MUNICIPAL SECONDARY TRADING VOLUME ($ billions)

Source: BMO Capital Markets, Scotia Capital, Casgrain Capital Markets, CIBC World Markets, Laurentian Bank Securities, National Bank Financial, RBC Capital Markets, TD Securities and IIROC MTRS 2.0 Reporting.

Note: The 12 unnamed municipalities shown above include: First Nations Finance Authority, Halton, Montreal, Ottawa, Peel, Quebec, TransLink, Toronto, Vancouver, Winnipeg, Waterloo and York, with combined trading volume of $27.3bn in 2018 and $31.1bn in 2019. Total Canadian municipal trading volume per IIROC in 2018 of $31.9bn and in 2019 of $36.0 includes primary issuance of unrated municipal debt.

$10.1 $9.4

$5.0

$2.6

$0.9 $0.5 $0.5 $0.5 $0.5 $0.5 $0.2 $0.2 $0.1

BCMFA Muni A Muni B Muni C Muni D Muni E Muni F Muni G Muni H Muni I Muni J Muni K Muni L

MUNICIPAL BOND SECONDARY TRADING VOLUME

$744.3

$255.8

$48.9 $30.7 $19.9 $10.7 $10.1 $9.9 $7.5 $7.4 $1.1

Ontario Quebec Alberta BC Manitoba Saskatchewan BCMFA NewBrunswick

NovaScotia

Newfoundland PEI

14

$701.4

$257.3

$47.7 $34.8 $24.2 $12.8 $12.7 $9.8 $9.3 $8.9 $1.4

Ontario Quebec Alberta BC Manitoba NewBrunswick

Saskatchewan BCMFA Newfoundland NovaScotia

PEI

2019 PROVINCIAL SECONDARY TRADING VOLUME ($ billions)

2018 PROVINCIAL SECONDARY TRADING VOLUME ($ billions)

Note: (1) IIROC provides specific secondary trading volume figures for Alberta, BC, Ontario, and Quebec and a consolidated figure for “Total Provinces”. Secondary trading volumes shown in the charts above for Manitoba, New Brunswick, Newfoundland, Nova Scotia, PEI and Saskatchewan are estimates based on their respective outstanding debt weighted pro-rata share of the “Total Provinces” category. (2) Ontario trading volume on chart is not shown to scale.Source: Bloomberg, BMO Capital Markets, Scotia Capital, Casgrain Capital Markets, CIBC World Markets, Laurentian Bank Securities, National Bank Financial, RBC Capital Markets, TD Securities and IIROC MTRS 2.0 Reporting.

(1)

(1)

(2)

(2)

IMPLIED PROVINCIAL BOND SECONDARY TRADING VOLUME

Throughout 2019, the outstanding stock of MFABC bonds turned over 1.3x, with large benchmark and on-the-run issues turning over up to 3.0x

15Source: BMO Capital Markets, Scotia Capital, Casgrain Capital Markets, CIBC World Markets, Laurentian Bank Securities, National Bank Financial, RBC Capital Markets, and TD Securities.

Notes: (1) Includes MFA bonds with a time-weighted average outstanding balance >$150mm for the calendar year 2019.(2) Indicates outstanding bond size was adjusted for maturity or new-issuance/re-opening part way through the calendar year 2019.

$221 $264

$435

$190

$515

$710

$290

$500

$410

$485

$605

$462

$335

$610

$670

$725

$177

$233

$504

$903

$535

$253

$1,077

$305

$864

$434

$664 $647

$1,382

$324

$406 $448

$472

$557

1.1x

1.9x

2.1x

2.8x

0.5x

1.5x

1.1x

1.7x

1.1x

1.4x 1.1x

3.0x

1.0x

0.7x0.7x

0.7x

3.1x

2.05%02-Jun-2019

4.875%03-Jun-2019

4.45%01-Jun-2020

1.75%15-Oct-2020

1.65%19-Apr-2021

4.15%01-Jun-2021

3.35%01-Jun-2022

2.15%01-Dec-2022

2.60%23-Apr-2023

3.75%26-Sep-2023

2.80%03-Dec-2023

2.15%03-Jun-2024

2.95%14-Oct-2024

2.50%19-Apr-2026

4.95%01-Dec-2027

3.05%23-Oct-2028

2.55%09-Oct-2029

Outstanding Bond Size ($ millions)

2019 Secondary Trading Volume ($ millions)

Secondary Trading Turnover (ratio)

(2) (2) (2) (2)

MFABC BOND LIQUIDITY: SECONDARY TRADING TURNOVER(1)

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2019

By Geography:

By Investor Type:

Canada 81%

United States 7%

England 5%Norw ay 4%Germany 2% Sw itzerland 1%

Canada 69%

United States 9%

Germany 6%

Norw ay 1%Estonia 1%Korea 1%Oman 1%Bermuda <1%Cayman Islands <1%

Singapore 2%Latvia 2%England 2%France 3%UAE 4%

Bank Treasury39%

Asset Manager28%

Pension Fund11%

Insurance 10%

Hedge Fund <1%Retail <1%

Government 3%Central Bank 3%Sovereign Wealth Fund 5%

Bank Treasury30%

Pension Fund28%

Asset Manager25%

Insurance 12%

Government 2%Sovereign Wealth Fund 4%

Retail <1%

Canada 81%

United States 7%

Germany 2%Norw ay 4%England 5%

Sw itzerland 1%

2018

MFABC LONG-TERM DEBT DISTRIBUTION

17

COMMERCIAL PAPER ACTIVITY

• $700 million approved program size with $610 million currently outstanding

• Rated A-1+ / P-1 by S&P/Moody’s

• Strong dealer network of 7 banks

• Typically priced around 4 to 6 basis points back of provincial issuance levels

• Issued every Wednesday in 1-month and 3-month terms

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Pension Asset

Managers59%

Investment Managers

31%

Corporates6%

Government4%

British Columbia

43%

Alberta21%

Ontario20%

Quebec12%

International3%

Atlantic Provinces

1%

Pension Asset

Managers65%

Investment Managers

26%

Government7%

Corporates1%

Alberta29%

British Columbia

27%

Ontario22%

Quebec10%

International8%

Manitoba4%

2018 2019

By Geography:

Note: All figures shown as at February 28

2020

By Investor Type: Investment Managers

58%

Pension Asset

Managers37%

Corporates3%

Government2%

Ontario31%

Alberta26%

British Columbia

19%

Quebec13%

International9%

Manitoba2%

COMMERCIAL PAPER DISTRIBUTION

19

Northeast

Interior

Central Interior

SoutheastMetro Vancouver

Vancouver Island

North CoastNet Loans: $67mm (1%)Property Value: $13bn (1%) Population: 0.10mmNet Loans Per Capita: $714

Net Loans: $907mm (19%)Property Value: $230bn (13%) Population: 0.86mmNet Loans Per Capita: $994

Net Loans: $2,569mm (55%)Property Value: $1,249bn (73%) Population: 3.05mmNet Loans Per Capita: $844

Net Loans: $158mm (3%)Property Value: $34bn (1%) Population: 0.16mmNet Loans Per Capita: $950

Net Loans: $713mm (15%)Property Value: $141bn (8%) Population: 0.58mmNet Loans Per Capita: $1,302

Net Loans: $104mm (2%)Property Value: $24bn (1%) Population: 0.17mmNet Loans Per Capita: $695

Net Loans: $174mm (4%)Property Value: $17bn (1%) Population: 0.07mmNet Loans Per Capita: $2,599

LONG-TERM LOAN PORTFOLIO DIVERSIFICATION

37% 37% 38%34% 35%

23% 24% 23%

20% 19%

8% 9% 11%18% 20%

19% 17% 15% 12% 11%

13% 12% 13% 16% 15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015A 2016A 2017A 2018A 2019A

Loan

Spl

it by

Typ

e (%

)

Property Tax Water Sewer Transit Hospital

20

LOAN SPLIT BY REGION LOAN SPLIT BY BORROWING TYPE

55% 55% 54% 55% 55%

17% 17% 18% 18% 19%

16% 16% 15% 16% 15%

5% 4% 4% 4% 4%3% 3% 3% 2% 2%3% 3% 3% 3% 3%1% 2% 2% 1% 1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015A 2016A 2017A 2018A 2019A

Loan

Spl

it by

Reg

ion

(%)

Metro Vancouver Island Central Interior

Northeast Interior Southeast

North Coast

LONG-TERM LOAN PORTFOLIO COMPOSITION

21

$12.1

$10.2

$7.2

$12.6

$10.4

$8.1

$13.7

$10.8 $9.7

$14.2

$11.3 $10.5

$15.5

$11.8 $12.4

2.2%

3.8%

2.1%

3.2%

1.9%

2.7%

1.8%

2.4%

1.6%

2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

--

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

$18.0

Percent (%)C

$ Bi

llions

2014A 2015A 2016A 2017A 2018A

Revenue (C$Bn) - LHS

Expenses (C$Bn) - LHS

Reserves (C$Bn) - LHS

Interest Expense as % of Reserves - RHS

Interest Expense as % of Revenue - RHS

BC LOCAL GOVERNMENT LOAN SERVICING ABILITY

22

CREDIT RATINGS

Long-Term Ratings

Agency Rating Outlook Date

S&P AAA Stable May 15, 2020

Moody’s Aaa Stable May 15, 2020

Fitch AAA Stable April 28, 2020

Short-Term Ratings

Agency Rating Outlook Date

S&P A-1+ Stable May 15, 2020

Moody’s P-1 Stable May 15, 2020

Peter UrbancChief Executive Officer peter@mfa.bc.ca (250) 419-4760

Matt O’RaeChef Financial Officer matt@mfa.bc.ca (250) 419-4761

Shelley HahnChief Services Officer shelley@mfa.bc.ca (250) 419-4763

Nikola GasicPortfolio Manager nikola@mfa.bc.ca (250) 419-4774

217 – 3680 Uptown BoulevardVictoria, British Columbia

Canada, V8Z 0B9www.mfa.bc.ca(250) 383-1181