STOCKHOLM, Feb 22 (Reuters) - Iceland’s Arion Bank, formerly Kaupthing Bank, said on Friday it has issued its first international bond, the country’s first overseas issue by a financial group since 2007, the year before its financial system collapsed.
The bank said it had placed 500 million Norwegian crowns ($88.5 million) in bonds with 60 investors in Europe and Asia. The bonds, issued on a floating basis to the Norwegian Interbank Offered Rate (NIBOR) plus 5.00 percent interest, will be listed on the Norwegian stock exchange.
“I think it is safe to say that it represents an important milestone in the regeneration of the Icelandic economy,” Chief Executive Hoskuldur Olafsson said in a statement. “The success of the bond offering is a result of the concerted efforts in recent years to build and strengthen the Bank.”
The country’s biggest banks Glitnir, Kaupthing and Landsbanki all collapsed under massive amounts of debt in 2008, sending the island nation of 320,000 people into deep recession and forcing it to borrow around $10 billion from the International Monetary Fund and other lenders.
The economy is now expanding at a rate of 2 percent - faster than most of Europe, although inflation remains stubbornly high and the island still has capital controls in place, making financing a headache for its companies. ($1 = 5.6503 Norwegian krones) (Reporting by Mia Shanley; Editing by Hugh Lawson)