Republic of Iceland today completed repayment of bonds issued in 2011 maturing today. The outstanding balance on the bonds series totalled USD 503 million, or equivalent to around ISK 62 billion. Payment for the bonds came from the Treasury's foreign currency balance with the Central Bank of Iceland.
This bond issue in 2011 was the Treasury's first issuance on the international market following the financial collapse. At the time, the total nominal value of the issuance was USD 1,000 million, however, last year the Treasury bought back around half of the outstanding bonds as part of its liquidity and debt management programme. The bonds, originally with a five-year maturity, had a fixed interest of 4.875%, equivalent to premium of 3.2% over interbank rates.
Provision was made in the 2016 budget for refinancing this debt if market circumstances proved favourable. The Treasury may examine refinancing later this year if necessary to strengthen the Central Bank's foreign reserves, which are funded in part by the Treasury's foreign borrowing.
Following today's bonds repayment gross Treasury debt amounts to ISK 1,252 billion, of which ISK 230 million is foreign debt. Foreign debt is comprised of two issues of market bonds, one USD denominated from 2012, the outstanding balance of which is USD 1000 million, and another issue from 2014 totalling EUR 750 million.
For further information contact Esther Finnbogadóttir at the Ministry of Finance and Economic Affairs, tel. (+354) 545-9200.