Saga Capital Investment Bank Iceland

Saga Capital has completed the sale of indexed bonds for Kopavogur municipality in an offering to professional investors in the Icelandic securities market.

The sale amounted to ISK 2.8bn involving indexed bonds in a 10-year class with 5% nominal interest rates.

Through the bond issue, Kopavogur is reorganising its balance sheet and converting its short-term loans into long-term loans.

The issue is an enlargement of Kopavogur’s bond class, KOP 08 1, which Saga Capital’s Capital Markets issued in December 2008 and registered on the Nasdaq OMX in Iceland. They are indexed annuity bonds in a 10-year open class with two instalments per year.

Since the economic collapse, the Icelandic bond market has generally been characterised by the turnover of bonds with State guarantees. Saga Capital’s Capital Markets has in the recent past raised a total of approximately ISK 20bn for companies and municipalities through the issue of bonds, most recently with an ISK 5bn issue for Landsnet and an issue amounting to ISK 1bn for Mosfellsbaer municipality. This is evidence of the increased willingness and ability of Icelandic professional investors to participate in Iceland’s restoration by providing funding for infrastructure development and finance for Icelandic municipalities.

Ever since the collapse, Saga Capital Investment Bank has been a leader in the review of all terms and conditions relating to initial bond issues in the Icelandic market.New loan terms relate first and foremost to investor protection and transparency, and they will signpost the way to the recovery of Iceland’s economy as a result.