Funds Asked to Take a Hit in Iceland $2.4 Billion Auction
- Euro discount may be as much as 50% to official rate
- Currency auction to pave way for dismantling capital controls
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Investors were asked to take a hit as Iceland embarks on the last crucial step in dismantling its more than seven-year-old capital control regime.
The central bank on Thursday offered part of its foreign currency reserves in an auction to exchange $2.4 billion of mostly kronur-denominated Glacier bonds held by Loomis Sayles, Eaton Vance Management and hedge funds including Autonomy Capital. They were asked accept euros at a rate of as much as 50 percent below the official rate. The auction ran from 10 a.m. to 2 p.m. local time.