S&P Global Ratings Affirms Iceland‘s ratings at ‘A/A-1'; Outlook Remains Stable

13.05.22
S&P Global Ratings Affirms Iceland‘s ratings at ‘A/A-1'; Outlook Remains Stable

International rating agency S&P Global Ratings has affirmed Iceland‘s sovereign ratings at A/A-1 with a stable outlook.

Iceland's economy has continued to recover, growing by more than 4% in 2021 backed by strong domestic demand. S&P expects that the Russia-Ukraine conflict will have a limited impact on Iceland's economy given its minimal direct trade links with those countries and overall limited need for energy commodity imports. The agency also expects fiscal consolidation to accelerate this year, with government debt net of liquid assets settling at about 42% of GDP over the medium term.
The stable outlook indicates S&P‘s expectation that Iceland's economy will continue to recover and remain relatively unaffected by the war in Ukraine. The agency believes fiscal deficits will continue to decrease over the next few years, stabilizing the debt to GDP ratio net of liquid assets. At the same time, ample foreign reserves will enable the CBI to deal with external pressures or exchange-rate volatility, should they occur.

According to S&P, the agency could raise the ratings if economic growth exceeds expectations, which would likely coincide with stronger export growth and export categories becoming more diverse, reducing external debt or the volatility in Iceland's terms of trade. The agency could lower the ratings if the effects of the war in Ukraine became more pronounced, for example through second-round effects due to lower economic activity in Iceland's main trading partners in Europe or a shift in global travel preferences. The latter could also occur if the pandemic re-emerged, particularly in the form of new and more malignant variants.

S&P press release (pdf)

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Aðrar fréttir

May 20 2026
Treasury Bonds
Treasury Bond Auction Announcement - RIKB 29 0416 - RIKS 37 0115
Series RIKB 29 0416 RIKS 37 0115
ISIN IS0000039121 IS0000033793
Maturity Date 04/16/2029 01/15/2037
Auction Date 05/22/2026 05/22/2026
Settlement Date 05/27/2026 05/27/2026
10% addition 05/26/2026 05/26/2026

On the Auction Date, between 10:30 am and 11:00 am, the Government Debt Management will auction Treasury bonds in the Series, with the ISIN numbers and with the Maturity Dates according to the table above. Payments for the Treasury bonds must be received by the Central Bank before 14:00 on the Settlement Date, and the Bonds will be delivered in electronic form on the same day. Article 6 of the General Terms of Auction for Treasury bonds applies for the right to purchase an additional 10%.

Further reference is made to the description of the Treasury bond and the General Terms of Auction for Treasury bonds on the Government Debt Management website.

For additional information please contact Oddgeir Gunnarsson, Government Debt Management, at +354 569 9635.
May 19 2026
Foreign Borrowing
Successful Eurobond Issuance

Today the Republic of Iceland issued a new €500 million 5 year benchmark bond, equivalent to ISK 72bn. The transaction was issued at a spread of 34-basis points to the Euro 5-year mid-swap rate. The proceeds will be used to strengthen the Central Bank of Iceland’s international reserves and refinance the outstanding Eurobond maturing in June. The issue reflects the new strategy of the Government’s Medium-Term Debt Management Policy, which aims to issue annually in the international markets.

Investors showed strong interest, with demand exceeding EUR 6bn, more than twelve times the issue size. The granular investor participation comprised asset/fund managers, bank treasuries, central banks, official institutions, insurance companies, and other institutional investors, mainly from Europe. BNP Paribas, Deutsche Bank, JP Morgan and Nomura acted as joint lead managers.

“Investors’ keen interest in the bond indicates the Republic of Iceland’s ready access to the international capital markets and represents an acknowledgement and support for the new debt management strategy, that aims to enhance the predictability and regularity of issuance and, all else being equal, should lead to a positive impact on Iceland’s financing terms. It is also gratifying to see an even more diversified investor group,” says Minister of Finance and Economic Affairs Daði Már Kristófersson. 

Treasury issues are priced according to the mid-swap rate, and the terms in this syndication are considerably better than in previous ones. The premium to the mid-swap rate was 34 basis points, as compared with 42 bp in the May 2025 issue. The spread on Treasury issues has continued to tighten over recent issues, in spite of geopolitical challenges and macro uncertainty, but has held broadly steady year-to-date. The bond bears fixed coupon of 3.25% interest and is issued for five years at a yield of 3.352%.

“Despite turmoil and uncertainty in international markets, the spread on the Treasury has remained fairly stable. Iceland’s economy and public finances are sound in spite of challenges. The country is well positioned in comparison with the headwinds facing many other countries: the GDP growth outlook is favorable, the public debt ratio is declining, and the export sector has grown more diversified, which is reflected in a stronger credit rating,” says Daði Már Kristófersson.