Íslandsbanki: Two covered bond tap issuances on NASDAQ OMX Iceland
Íslandsbanki has tapped into two outstanding issuances of covered bonds that were listed on NASDAQ OMX Iceland in March 2012. The two tap issuances, which are both CPI-linked, are on the one hand a 7 year issuance, ISLA CBI 19, for an amount of ISK 635,000,000 at a real yield of 2.90%, and on the other hand a 12 year issuance, ISLA CBI 24, for an amount of ISK 850,000,000 at a real yield of 3.48%.
The total amount issued in ISLA CBI 19 and ISLA CBI 24 has now reached ISK 2,465,000,000 and ISK 2,350,000,000 respectively, following these latest issuances. In total, Íslandsbanki has now issued covered bonds amounting to ISK 8,815,000,000 since its inaugural issuance in December 2011.
Sold to a broad group of institutional investors, total appetite for the tap issuances amounted to ISK 2,185,000,000, but 68% of offers were accepted, or for the amount of ISK 1,485,000,000.
Trading is expected to commence on 10 May 2012 on the Nasdaq OMX Iceland. Market making for all of Íslandsbanki’s covered bond issues is in the hands of MP banki.
The bonds are issued under Act 11/ 2008 on Covered Bonds which obliges the issuer to fulfil strict requirements, whereby the underlying cover pool must withstand a weekly stress test with regards to interest rates and exchange rates. The issue is regulated by the Icelandic Financial Supervisory Authority which additionally appoints an independent inspector to monitor the issue. Special cover pool reports on the covered bond issuances are published quarterly and can be found on Íslandsbanki’s web.