This week the Treasury bought back its own bonds from the Central Bank of Iceland in the amount of ISK 24bn. The securities in question are nominal Treasury bonds in the RIKB 20, RIKB 22, RIKB 25, and RIKB 31 series (totalling ISK 22.5bn nominal value) and RIKS 21 (ISK 0.3bn nominal value). The trades are to be settled today.
The total purchase price of the bonds, with accrued interest, is about ISK 25bn. The purchases are funded in part with the proceeds from stability assets (ISK 17.5bn) and in part with a reduction in the Treasury’s cash balance (ISK 7.5bn). The Treasury will then redeem the bonds and lower outstanding debt by that amount.
Following these transactions, gross Treasury debt totals about ISK 843bn, or just over 30% of GDP, and net Treasury debt as calculated on the basis of the Act on Public Finances — i.e., gross debt net of cash and deposits — totals ISK 653bn, or 23% of GDP.