Special press release concerning issuance of Government securities

17.03.20
Special press release concerning issuance of Government securities

In view of recent events relating to the COVID–19 pandemic, it is foreseeable that the Treasury’s financing need will increase markedly from previous forecasts. The economic outlook for coming months is highly uncertain, and it is therefore difficult to estimate the Treasury’s borrowing need for the current year. It is also uncertain how much of that need will be for short-term borrowing and how much for long-term borrowing.

In view of recent events relating to the COVID–19 pandemic, it is foreseeable that the Treasury’s financing need will increase markedly from previous forecasts. The economic outlook for coming months is highly uncertain, and it is therefore difficult to estimate the Treasury’s borrowing need for the current year. It is also uncertain how much of that need will be for short-term borrowing and how much for long-term borrowing.

It should be noted that Iceland’s Government debt level is low. Total debt amounts to about 854 b.kr., or roughly 27.5% of GDP. No domestic issues are scheduled to mature for the remainder of 2020, and foreign maturities total only 292 million euros (45 b.kr.), due in July.

The Treasury can obtain market financing in a number of ways. It can issue more bonds in the domestic market, as issuance according to the 2020 calendar is at a historical low of about 40 b.kr. It can also issue bonds abroad. Moreover, the Treasury can address a deteriorating cash position by issuing Treasury bills or taking short-term money market loans. The Treasury’s liquidity position in Icelandic krónur currently totals 44 b.kr. Finally, the Treasury holds the equivalent of 169 b.kr. in foreign currency deposits with the Central Bank. Its position is therefore sound, and there is no reason to fear that the Treasury will be unable to handle the expected fall in revenues and increased financing need in the weeks and months to come if such expectations should materialise.

Revision of Q2/2020 issuance

  • It has been decided to increase Treasury bond issuance in Q2/2020 to a maximum of 40 b.kr. Further details will be published in the Quarterly Government Debt Management Prospect at the end of this month. This means that issuance for the year will increase substantially relative to the previously published annual Prospect.

It is difficult at present to estimate the total need for Treasury issuance in 2020. Before decisions can be made, more detailed information on the Treasury’s borrowing need is needed. The situation will be clarified in the coming weeks and months.

Further information can be obtained from Esther Finnbogadóttir at the Ministry of Finance and Economic Affairs, at tel +354 545 9200, and from Björgvin Sighvatsson at Government Debt Management, at tel +354 569 9600.

Press release (pdf)

Til baka

Aðrar fréttir

Mar 31 2026
Annual prospects
Quarterly Government Debt Management Prospect

Q2/2026

  • In Q2, government bonds will be offered for sale in the amount of 40-60 b.kr. market value.
  • A new nominal government bond maturing in 2029 will be issued during the quarter, and market making is planned for the series.
  • The bonds that could conceivably be offered are all benchmark Government series, and issue size and market conditions will determine how much, if any, will be sold in each series.
  • It is possible that switch auctions of RIKB 26 1015 will be held during the quarter.

GDM Q2 Prospect 2026.pdf

Mar 20 2026
Primary Dealers for Government Securities
Signing of Primary Dealer Agreements

Today the Government Debt Management on behalf of the Treasury and primary dealers signed agreements regarding issuance and market making in Treasury securities. The objective of the agreements is to maintain the Treasury’s access to financing, to enhance price formation in the secondary market for Treasury securities and promote an active system of benchmark issues in Iceland.

As of 1 April 2026, five financial institutions have been appointed as “primary dealers in Treasury securities”. They are: Arion Banki hf., Fossar Investment Bank hf., Islandsbanki hf., Kvika banki hf. and Landsbankinn hf.

The following bullet points describe the main content of the primary dealer agreement:

  • Primary dealers have the exclusive right to submit bids at auctions where government securities are offered for purchase or sale.
  • Primary dealers have exclusive access to special facilities such as repurchase agreements offered by the Government Debt Management on behalf of the Treasury.
  • Primary dealers are obliged to submit bids at each auction for a minimum of 100 m.kr. nominal value.
  • Primary dealers are Market Makers in the secondary market for government bond benchmark series. They are obliged to submit bid and ask offers on the stock exchange for at least 50 to 100 m.kr. nominal value in each benchmark series (as laid out in the agreements).
  • Primary dealers are in their bid and ask quotes governed by maximum spreads as laid out in the agreements.
  • Primary dealers are obliged to renew their offers within ten minutes after execution of transaction. The primary dealer is entitled to depart from the maximum spread requirement if certain conditions are fulfilled.
  • The agreement is valid from 1 April 2026 to 31 March 2027.

Further information can be obtained from Government Debt Management at the following email address: [email protected].