Arion Bank hf sold bonds to offshore investors as the successor to failed Kaupthing Bank hf taps global markets more than four years after Iceland’s banking system collapsed under an $85 billion mountain of debt.
The lender raised 500 million Norwegian kroner ($88 million) in floating rate notes maturing in 2016, with a coupon that’s 5 percentage points more than the Norwegian interbank offered rate, Reykjavik-based Arion said in a statement today. The sale was managed by Pareto Oehman and sold to investors in Norway, Sweden, Finland, the U.K. and mainland Europe and Asia, according to the statement.
“It’s safe to say that it represents an important milestone in the regeneration of the Icelandic economy,” Hoskuldur H. Olafsson, chief executive officer at Arion, said in the statement. “But we must remember that it is only one of many stages in the process of making the international capital markets accessible for Icelandic companies.”
Iceland’s economy and financial system collapsed in 2008 after its banks were unable to roll over the debt they’d amassed. The country, which exited an International Monetary Fund program in August 2011, is now emerging from the meltdown and outgrowing much of Europe. Iceland earlier this month had the outlook on its Baa3 rating raised to stable from negative by Moody’s Investors Service.
The IMF has praised Iceland’s crisis management program, which included capital controls to stem a krona selloff. Iceland’s Treasury sold $1 billion of 10-year bonds in May, the government’s second international sale since the crisis.