Treasury issues Eurobond

20.05.25
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.”

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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].