Fitch affirms Iceland at A with a stable outlook

07.12.18
Fitch affirms Iceland at A with a stable outlook

Today, Fitch Ratings affirmed Iceland’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at A with a stable outlook. According to the rating agency, this rating balances the economy’s very high income per capita, strong governance, human development and doing business metrics against a high dependence on commodity exports, vulnerability to external shocks and experience of macroeconomic and financial volatility.

The stable outlook reflects balanced risks to the rating. Sustained improvement in the external balance sheet and resilience to external shocks might lead to a positive rating action. Conversely, evidence of overheating in the domestic economy, i.a. through wage-price spirals, inflation overshoots and adverse effects on fiscal, household and corporate balance sheets or excessive capital outflows leading to external imbalances and pressures on the exchange rate might lead to negative rating action.

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May 21 2025
Nominal Treasury Bonds
Treasury Bond Auction Announcement - RIKB 27 0415 - RIKB 42 0217
Series RIKB 27 0415 RIKB 42 0217
ISIN IS0000036291 IS0000033884
Maturity Date 04/15/2027 02/17/2042
Auction Date 05/23/2025 05/23/2025
Settlement Date 05/28/2025 05/28/2025
10% addition 05/27/2025 05/27/2025

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 20 2025
Foreign Borrowing
Treasury issues Eurobond

The Republic of Iceland has successfully issued a €750 million Eurobond (ISK 109 billion equivalent) with a fixed coupon of 2.625% and a five-year maturity, priced at a re-offer yield of 2.672%. The proceeds will be used to strengthen the foreign exchange reserves of the Central Bank of Iceland and to refinance existing Eurobonds.

Concurrently with the new issue, the Treasury launched a tender offer to repurchase its outstanding €500 million Eurobond maturing in 2026. The offer remains open until 17:00 BST on Friday, 23 May 2025.

The transaction attracted robust demand, with orders totalling €4.4 billion—nearly six times the issue size. The investor base comprised over 100 institutions, including asset managers, banks, central banks, pension funds, insurance companies, and other institutional investors, primarily from across Europe. Citibank, Barclays, J.P. Morgan, and BNP Paribas acted as joint lead managers for the transaction.

Daði Már Kristófersson, Minister of Finance and Economic Affairs, commented:
“It is highly gratifying to see such strong investor interest in this bond issue and the improved spreads compared to our previous offerings. The breadth and diversity of the investor base align with our goal of broadening access to Icelandic government bonds. This outcome reflects market confidence in the Icelandic economy, sound public finances, and the Government’s policy direction.”

This issuance forms part of the Government’s Medium-Term Debt Management Strategy, which aims to ensure that the Treasury is a regular and credible issuer in international capital markets.

The pricing of the bond, 42 bps over mid-swaps, represents a significant improvement over the Treasury’s 10-year green bond issued in 2024, which carried a mid-swap spread of 95 basis points. Despite ongoing global uncertainty, spreads on Icelandic sovereign debt have narrowed and outperformed those of many peers with comparable credit ratings.

“Our message is resonating well with investors,” said Minister Kristófersson. “Iceland stands out for its solid and growing economy with good prospects, declining inflation, diversified exports, improved sustainability, and stronger credit profile.”

May 15 2025
Treasury Bills
Treasury Bill Auction Announcement - RIKV 25 0820 - RIKV 25 1119
Series RIKV 25 0820 RIKV 25 1119
ISIN IS0000037216 IS0000037547
Maturity Date 08/20/2025 11/19/2025
Auction Date 05/19/2025 05/19/2025
Settlement Date 05/21/2025 05/21/2025

On the Auction Date, between 10:30 am and 11:00 am, the Government Debt Management will auction Treasury bills in the Series, with the ISIN numbers and with the Maturity Dates according to the table above. Payments for the Treasury bills must be received by the Central Bank before 14:00 on the Settlement Date and the Bills will be delivered in electronic form on the same day.

Further reference is made to the General Terms of Icelandic Treasury bills and General Terms of Auction for Treasury bills on the Government Debt Management website.

For additional information please contact Oddgeir Gunnarsson, Government Debt Management, at +354 569 9635.