May 24 2019
Fitch ratings upgrades Iceland´s ST ratings to F1+; affirms LT ratings at A stable

Today Fitch ratings has published a new report on Iceland´s sovereign ratings. Iceland´s Short-Term (ST) foreign- and local currency ratings are upgraded to F1+ from F1, in line with the agency´s publication from 3rd of May. Iceland´s Long-Term (LT) ratings are affirmed at A with stable outlooks. Iceland´s country ceiling was also raised from A to A+, due to the almost full lifting of capital controls.

As stated in Fitch´s press release, the collapse of Wow air as well as the current absence of fishable capelin stock in Icelandic waters, are among the factors that have led to a worsening economic outlook for 2019. However, the agency assumes that economic growth will return in 2020 and be positive by 2.5%. The announcement also points to the recent relative stability of the Icelandic krona despite the lifting of capital controls and Wow air´s collapse.  

The main factors that could lead to a positive rating action are a continued fall in the public debt ratio, supported by prudent fiscal policy, and a sustained improvement in the external balance sheet and increased resilience of the economy to external shocks.

The main factors that could lead to a negative rating action are a sustained and sharper than expected economic downturn, impacting on the banking sector and leading to excessive capital outflows, jeopardising financial stability and weakening external buffers.

Fitch´s update (pdf)

More news

Treasury Bill Auction Announcement RIKV 20 0205
Series RIKV 20 0205
ISIN IS0000031292
Maturity Date 05.02.2020
Auction Date 27.06.2019
Settlement Date 01.07.2019

On the Auction Date, between 10:30 am and 11:00 am, the Government Debt Management will auction Treasury bills in the Series, with the ISIN number and with the Maturity Date according to the table above. Payments for the Treasury Bills must be received by the Central Bank before 14:00 on the Settlement Date, and the Bills will be delivered in electronic form on the same day.

Further reference is made to the General Terms of Icelandic Treasury bills and General Terms of Auction for Treasury bills on the Government Debt Management website.

For further information please contact Oddgeir Gunnarsson, Government Debt Management, at +354 569 9635.

Jun 13 2019
Bond News
Republic of Iceland issues a new Eurobond at the lowest yields in the Republic´s history

The Republic of Iceland has today concluded agreements on issuance of bonds totalling EUR 500 million, or the equivalent of ISK 71 billion.  

The bonds bear fixed interest of 0.1% and have a 5-year maturity, with a yield of 0.122%. This is the lowest yield in the history of the Republic. Investors showed strong interest in the issue, with total subscriptions around EUR 2,5 billion or five times the size of the issue.  The broad-based investor group is comprised of central banks and other institutional investors, mainly from Europe. Barclays, JP Morgan, Morgan Stanley and Nomura were joint managers for the issue.

Yesterday an offer of buy back of existing bonds of 750 million euros issued in 2014 expired. Owners of 60.5 million euros accepted the offer, in addition to those 398 million already tendered in December 2017. Owners that wished for got a priority allocation in the new bond.

Results of additional issuance of Treasury bonds RIKB 28 1115

As stated in paragraph 5 of Terms of Invitation to Tender for Treasury bonds, the Government Debt Management offered the equivalent of 10% of the nominal value sold in the auction 7 June, at the price of accepted bids. This time Primary Dealers did not exercise their right to purchase in RIKB 28 1115. Total outstanding nominal value of RIKB 28 1115 is now 61,001,601,519 kr. Settlement date is 12 June 2019.