Housing Finance Fund Downgraded By Moody’s - The Reykjavik Grapevine

Housing Finance Fund Downgraded By Moody’s

Published February 21, 2013

Bond credit rating organisation Moody’s has downgraded Iceland’s largest mortgage provider to ‘junk’ status. The Housing Finance Fund (HFF), a government-owned lender, is seeking a bail out from the government to avoid defaulting on its debts, Bloomberg reports.
“There’s no risk of default. The Treasury, if it needed to, would bail out the fund,” said Sigurður Jón Björnsson, the chief financial officer of HFF. Still, the fund is currently severely lacking in capital, has been experiencing mounting loan losses, and is fully dependent on market funding, which was the basis for Moody’s downgrade.
The government had already injected 33 billion ISK into the struggling lender in late 2010 as part of a restructuring plan. In November 2012 the government said it would forward another 13 billion ISK to HFF to keep it afloat, however this amount would still leave HFF’s capital ratio at 3%, below the 5% regulatory minimum.

Next:
Previous:


Go travel with Grapevine tried and recommended tours by Grapevine. Fund Grapevine journalism by booking with us.


Show Me More!