Dec 07 2018
S&P Global affirms Iceland at A/A1 with a stable outlook

Today S&P Global affirmed Iceland’s A/A-1 long- and short-term foreign and local currency sovereign credit ratings with a stable outlook. According to the rating agency, Iceland’s fiscal and external balance sheets have strengthened in recent years. However, the small, relatively concentrated economy remains vulnerable to external developments and the risk of reemergence of domestic overheating. S&P expects that growth rates will slow over the coming years as tourism inflows decelerate.

The stable outlook balances the potential for Iceland‘s stronger-than-anticipated fiscal and balance of payments performance against the risks posed by the economy‘s dependence on foreign trade developments and potential re-emergence of overheating stemming from the upcoming wage negotiations in 2019.

S&P could raise Iceland‘s ratings if fiscal and external balance sheets strengthen by more than presently anticipated over the next two years. Ratings could be lowered if financial stability risks or balance of payments pressures emerge over the next two years. For example if the domestic economy overheated, posing risks for Iceland‘s competitiveness and adversely affecting long-term growth prospects. This could also be the case if tourism flows slowed sharply, which could negatively affect the country‘s balance of payments performance and the banking system. According to S&P, the latter could manifest itself through an impact on the housing market, given the rapid pace of tourism-related construction projects in recent years.

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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.

Results of additional issuance of indexed Treasury bonds RIKS 26 0216

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 24 May, at the price of accepted bids. This time Primary Dealers did not exercise their right to purchase in RIKS 26 0216. Total outstanding nominal value of RIKS 26 0216 is now 17,532,700,000 kr. Settlement date is 29 May 2019.