ÍL Fund has concluded a switch auction in which owners of IBN 38 0101 were invited to exchange the bonds for inflation-linked RIKS 34 1016 government bonds. Bids in the nominal amount of 1,420,000,000 kr. were submitted for RIKS 34 1016, and bids in the nominal amount of 1,420,000,000 kr. were accepted at a predetermined clean price of 104.1411. In exchange, ÍL Fund will buy back IBN 38 0101 bonds in the nominal amount of 961,845,345 kr. at a predetermined clean price of 42.7676. The market value of the bon ...

Core Viewpoint - ÍL Fund is conducting a switch auction on September 30, 2025, offering to purchase IBN 38 0101 at a clean price of 42.7676, yielding 3.45%, in exchange for the inflation-linked government bond series RIKS 34 1016 at a clean price of 104.1411, yielding 2.97% [1]. Group 1 - The auction will take place between 10:30 and 11:00 hrs, with results announced at 12:00 on the same day [1]. - Bids for the inflation-linked bond series must be submitted as nominal amounts, with a settlement date set for October 7, 2025 [2]. - ÍL Fund reserves the right to accept bids partially or reject all bids [2]. Group 2 - The arranger for the switch auction is Government Debt Management, a department of the Central Bank of Iceland [3]. - Primary dealers in government securities, including Arion banki hf., Fossar Investment Bank hf., Íslandsbanki hf., Kvika banki hf., and Landsbankinn hf., are invited to act as intermediaries [3]. - The Bloomberg trading and auction system will be utilized for the auction [3]. Group 3 - Owners of IBN 38 0101 interested in participating in the switch auction are advised to contact primary dealers in Treasury securities [3]. - Further information regarding the auction terms can be obtained from Government Debt Management [4].

Group 1 - The government plans to issue a new inflation-indexed bond series maturing in 2050 instead of the previously planned bond maturing in 2044 [1] - The new bond issuance will include planned market making activities [1]

Core Viewpoint - The Icelandic Government is proposing a settlement plan for the Housing Financing Fund (HFF) bonds, which aims to facilitate the winding-up of the ÍL Fund and improve the Treasury's financial position [1][5]. Group 1: Settlement Proposals - The Icelandic Government plans to issue new Treasury bonds amounting to ISK 540 billion, which includes refinancing ISK 238 billion of the Treasury's debt to the ÍL Fund and settling the Treasury's guarantee of the ÍL Fund's obligations [2]. - The total value of the HFF bonds in the settlement is set at ISK 651 billion, with the Treasury receiving Treasury bonds valued at ISK 540 billion, other securities worth ISK 38 billion, and cash amounting to ISK 73 billion [3]. Group 2: Approval Process - The proposals will be presented at a creditors' meeting, requiring approval from creditors representing 75% of the total claims for the settlement to be binding [4]. Group 3: Financial Impact - The proposed actions are expected to generate positive cash flows to the Treasury in the coming years, with the Treasury Part A debt ratio projected to improve by at least 5% of GDP [5]. - The amount of debt backed by state guarantee will be reduced by 88% compared to year-end 2024 values, and the total stock of outstanding Treasury-guaranteed and issued securities in the market will decrease by approximately ISK 111 billion [5]. Group 4: Stakeholder Benefits - The settlement will fully resolve obligations to bondholders, primarily Icelandic pension funds, and eliminate uncertainties regarding the Government's guarantee of the ÍL Fund's obligations [6].