Treasury Securities

• ISK 1200 billion problem solved; stability ensured
• Stability conditions and stability tax on failed banks’ estates
• Currency auction for holders of offshore ISK in the autumn

According to the Agreements concerning Secondary Market Issuance and Market making in Treasury Securities dated 15 March 2013, securities lending in RIKB 15 0408 to each primary dealer will be increased from 1 b.kr. nominal value up to 2 b.kr. nominal value.
These terms shall take effect after 11:00 am on Wednesday 10 July 2013.

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 loan financing and to enhance price formation in the secondary market for Government securities. 

As of 1 April 2013, five financial undertakings have been appointed as “Primary Dealers in Treasury securities”. They are: Arion Bank, Islandsbanki, Landsbankinn, MP Bank and Straumur Investment Bank.
Press release (pdf)
Sample of agreement (pdf)

The Minister of Finance has assigned the Government Debt Management within the Central Bank of Iceland the task of concluding agreements concerning issuance of Treasury securities and market making in the secondary market.
Press release (pdf)
Sample of Agreement (pdf) 

According to an announcement published by the Central Bank of Iceland on 10 October 2012 regarding the Central Bank of Iceland foreign currency auction to be held on 7 November 2012, the Terms of Auction stated that the swap rate for the Bank’s purchase of foreign currency in connection with the sale of Treasury bonds in the series RIKS 33 0321 would be published at the close of business on 5 November 2012.

It has been decided that the number of Treasury bond units per euro shall be based on the auction price and the fixed price of the Treasury bonds, which is 110.304069 kr. per Treasury bond unit with accrued interest and indexation (dirty price), assuming a settlement date of 12 November 2012 (yield 2.65%).¹

The formula is as follows: Swap rate = auction price/(bond price/100).