Iceland Treasury makes ISK 50 billion paydown on Central Bank bond

By Tanya Meyer

Chicago, Jan. 6 – The Icelandic Ministry of Finance announced that its Treasury made a year-end paydown of ISK 49.9 billion on a bond issued to the Central Bank of Iceland, in what it said was one of the largest single repayments of Treasury debt to date.

The bond, issued in January 2009, is to be repaid in annual installments of ISK 5 billion, according to a news release.

In 2015, the Treasury repaid ISK 47 billion on the bond, plus the annual installment, leaving an outstanding balance of ISK 88.5 billion at year-end. The Treasury plans to pay off the remaining debt in full in 2016.

The Treasury also repaid ISK 103 billion of its outstanding foreign loans during 2015.

In the first half of the year, the Treasury bought back almost half of its outstanding 2011 stock at approximately ISK 67 billion. In May, the Treasury repaid around ISK 7.5 billion on an economic recovery program loan from Poland. In July, the Treasury also made an ISK 28.3 billion payment on its Avens bond.

In total during 2015, the Treasury paid down ISK 150 billion in domestic and foreign debt, reducing its overall debt by 10% and interest expense by ISK 7 billion annually.

The Treasury anticipates further debt reduction to about ISK 1,171 billion by the end of 2016.

The Icelandic Ministry of Finance is based in Reykjavik.

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