The six-year euro-denominated bonds Iceland put up for sale in preparation to phase out capital controls have yielded 2.6% and mark a good return to the European market, reports Bloomberg.
“We are happy,” Finance Minister Bjarni Benediktsson said. “We are refinancing all of our old obligations and the terms that we’ve had so all in all it’s very good.”
As reported, this is the first time Iceland has entered the European market since 2006, though Iceland has sold two separate $1 billion U.S. dollar-denominated bonds since the crash in 2008. One in 2011 and another in 2012.
“I think it is important for Iceland, not only the state but also the private sector, to show access to and the ability to enter European markets,” Bjarni said. “And that’s what we were doing. We needed to and wanted to show the capability of refinancing some of our more recent debts and we will use some of these funds to repay what we took on in the immediate aftermath of the crisis.”
Since the 2008 economic crisis and the failure of its three largest banks; Kaupthing, Glitnir and Landsbanki, Iceland has relied on capital controls to keep the currency in check.
Iceland still owes $1.8 billion of the $4.6 billion it borrowed from the Washington-IMF, Nordic governments and Poland. The IMF loans are due in 2015 and 2016, while the Nordic loans mature from 2019 through 2021.
When asked whether Iceland should have bailed its banks out instead of letting them fail the finance minister said that the situation was handled exactly as it should have been and that bail outs had not been an option for Iceland.