Bonds - FAQ

FAQ

Where can I buy Icelandic Government securities and HFF bonds?

This website was created to provide information to parties interested in the Icelandic financial market, but not for the purpose of selling securities. We however provide a list of Dealers in Iceland that do offer securities to international investors. Investors have a choice of signing a custody agreement with any of our Primary Dealers, or of internetional settlement through agents like Clearstream or Euroclear.

Where are Icelandic bonds traded?

Icelandic bonds are traded on NASDAQ OMX Nordic Exchange Iceland. (Members of OMX submit their bid and ask offers on the Exchange between 09:30 and 15:30 GMT each business day. Yield and price information are shown on our Market Overview page (15 min. delay).

When is the currency market in Iceland open?

The currency market in Iceland is open from 9:15 to 16:00 GMT on business days.

Can I buy bonds myself at NASDAQ OMX Nordic Exchange Iceland?

No, you need to go through a member of NASDAQ OMX, preferably one of the Primary Dealers in Government Securities or HFF bonds

Do I need to pay withholding tax on capital income from Icelandic securities?

Interest paid to non-residents is subject to withholding tax. However, non-residents can apply to the local tax commissioner for tax exemption/reduction if covered by treaty. To apply for a withholding tax exemption/redustion is a simple process and can be done through an agent.

What is the ISIN# of a particular bond?

Left-Click once with the mouse on the name of the security you need more information about on the banner on the right. That action will call forth detailed information about that instrument. For details, select show Attributes in the Market overview page.

Is there a minimum amount, when I buy Icelandic bonds and open a custody account?

Each dealer sets his own rules for their service. Some have minimum amounts and others none. Fees for custody accounts are also different depending on deposit amount. For detailed information contact individual dealers

What is the settlement rule in NASDAQ OMX Nordic Exchange Iceland for bonds?

Settlement takes place the next business day after trading or T+1.

What is the settlement standard in the Icelandic currency market?

In Iceland the standard is two days, T+2, for currency transactions.

Should Iceland be viewed differently than other countries?

Yes, it is the smallest country in the world with its own currency and flexible exchange rate. It is a small flexible economy and in such countries there is a case to interpret the current account differently since it is more volatile. A current account deficit might be optimal since it has to absorb large, lumpy investments and due to consumption smoothing.

What is the maturity of bond X?

Final maturity, date of interest and principal payments etc. are called forth with a left-click of the mouse on the name of a security on the banner to the right.

Can I find information on Icelandic bonds on my Bloomberg terminal?

Yes, the Government Debt Management (GDM) and the Housing Financing Fund provide information on their Bloomberg pages ICDO and HFFI. Some Primary Dealers also have their own pages ISLA, KAUP, and LAIS. You can also find overview on the Icelandic TSY and Money Market on the page BTMM IC. For news type NI ICE GO.

What is the next step if I want to purchase Icelandic Government-backed securities?

Icelandic Government-backed securities can be purchase from Primary Dealers. You find a list with contact information here.

Can I find information from Islandsbanki on my Bloomberg terminal?

Yes, on page ISLA

Can I find information from Arion Bank on my Bloomberg terminal?

Yes, the page is KAUP

Can I find information from Landsbanki on my Bloomberg terminal?

Yes, the page is LAIS.

What is Financial Instablity?

Financial instability occurs when there is a disruption to financial markets in which asymmetric information and hence adverse selection and moral hazard problems become much worse, so that financial markets are unable to efficiently channel funds to those who have the most productive investment opportunities.

What causes Financial Instability to occur?

There are three major routes to this occuring: 1) Deterioration in bank balance sheets, 2) Deterioration in non-financial balance sheets and 3) Currency crises. A floating FX regime is less likely to lead to instability than a pegged regime (according to Stanley Fischer).

Is the large current account deficit a cause for concern?

The theory of financial crises does not give them prominent role as there are deeper fundamentals that drive financial instability. Curren account deficits and counterpart of large capital inflows can lead to lending boom that precipate financial instability, but this has not been a problem in Iceland where large current account deficits have been reversed with little stress on the financial system.

Non-Indexed	Price	Yield
RIKV 13 0618	99.58	5.91%
RIKV 13 0715	99.12	6.00%
RIKV 13 0815	98.62	6.02%
RIKV 13 0916	98.08	6.06%
RIKV 13 1015	97.60	6.10%
RIKV 13 1115	97.10	6.11%
RIKB 14 0314	100.60	3.96%
RIKB 15 0408	101.10	3.88%
RIKB 16 1013	105.55	4.20%
RIKB 19 0226	116.75	5.29%
RIKB 22 1026	107.00	6.24%
RIKB 25 0612	113.55	6.36%
RIKB 31 0124	98.80	6.61%

Indexed	Price	Yield
RIKS 21 0414	112.00	2.13%
HFF150224	107.45	2.37%
HFF150434	111.00	2.65%
HFF150644	114.12	2.75%

Current Value	410.70
12 Months Change*	3.95%
3 Months Change*	8.73%
Last Month Change	0.20%
Daily CPI	411.29

ISK	1000	1000
EUR	159.8	160.2
USD	123.5	123.81
GBP	186.73	187.2
JPY	1.21	1.22
NOK	21.17	21.22
SEK	18.59	18.64
DKK	21.44	21.49
CHF	127.6	127.92
TWI	216.79	216.92

FAQ

Yield Curve

CPI Change

Exchange rate