Treasury issues Eurobond

Core Viewpoint - The Republic of Iceland successfully issued a €750 million Eurobond to strengthen foreign exchange reserves and refinance existing Eurobonds, reflecting strong investor confidence in the Icelandic economy [1][3][5] Group 1: Eurobond Issuance - The Eurobond has a fixed coupon of 2.625% and a five-year maturity, priced at a re-offer yield of 2.672% [1] - The proceeds from the bond will be used to enhance the Central Bank of Iceland's foreign exchange reserves and refinance existing Eurobonds [1] Group 2: Demand and Investor Base - The transaction saw robust demand with orders totaling €4.4 billion, nearly six times the issue size [3] - The investor base included over 100 institutions such as asset managers, banks, central banks, pension funds, and insurance companies, primarily from Europe [3] Group 3: Government's Strategy and Market Confidence - This issuance is part of the Government's Medium-Term Debt Management Strategy, aiming to establish the Treasury as a regular issuer in international capital markets [3] - Minister of Finance and Economic Affairs highlighted the strong investor interest and improved spreads compared to previous offerings, indicating market confidence in Iceland's economy and public finances [3][5] Group 4: Pricing and Comparative Performance - The bond pricing at 42 basis points over mid-swaps shows significant improvement over the Treasury's previous 10-year green bond issued in 2024, which had a mid-swap spread of 95 basis points [4] - Despite global uncertainties, spreads on Icelandic sovereign debt have narrowed and outperformed many peers with similar credit ratings [4]