Significant Milestones in Local Loan Fund's Bond Issuance
Introduction to the Local Loan Fund's Bond Issuance
The Local Loan Fund has recently finalized key agreements with primary intermediaries to facilitate the issuance of bonds. This strategic move aims to improve access to financing and enhance market pricing for its bond categories, which include LSS150434, LSS151155, and LSS 39 0303.
Collaboration with Key Financial Institutions
From April 1, 2025, five financial institutions have been authorized to operate under the title of "Primary Intermediaries for the Local Loan Fund Bonds." The institutions include Arion Bank, Íslandsbanki, Landsbankinn, Kvika Bank, and Fossar Investment Bank, each playing a critical role in this initiative.
Key Components of the Intermediary Agreements
The agreements outline several important points that govern the responsibilities and duties of the intermediaries. Here are the highlights:
- The primary intermediaries will be the sole service providers for the Local Loan Fund's bond auctions.
- Intermediaries are committed to providing market-making offers in bond auctions with a minimum total nominal value of 100 million ISK for the available categories, capped at once per month.
- Intermediaries will have exclusive access to specific securities lending facilitated by the Local Loan Fund.
- Intermediaries will facilitate trading in the secondary market for three categories of bonds, listed as follows:
- LSS150434: 40 million ISK
- LSS151155: 20 million ISK
- LSS 39 0303: 40 million ISK
- Intermediaries must ensure that the spread between their buying and selling offers does not exceed 1% for LSS150434 and LSS 39 0303, and 1.25% for LSS151155.
- Intermediaries are required to renew their offers within 15 minutes of acceptance. If an intermediary conducts trades worth a total nominal value of 200 million ISK in a single trading day, they may deviate from the maximum spread requirement.
- The contracts are valid from April 1, 2025, to March 31, 2026.
Impact on Financial Landscape
These agreements mark a significant step forward for the Local Loan Fund as they bolster its financing capabilities and enhance pricing dynamics in the market. By securing the collaboration of major financial institutions, the Local Loan Fund is poised to create a more robust trading environment, ultimately benefiting all stakeholders involved.
Contact Information for More Details
For further inquiries, please reach out to Óttar Guðjónsson, the Chief Executive Officer, at ottar@lanasjodur.is or call +354 515 4949.
Frequently Asked Questions
What are the objectives of the Local Loan Fund's agreements with intermediaries?
The primary goals are to enhance liquidity in bond issuance and strengthen market-making capabilities in the secondary market.
Who are the authorized primary intermediaries?
The authorized intermediaries are Arion Bank, Íslandsbanki, Landsbankinn, Kvika Bank, and Fossar Investment Bank.
What is the duration of the agreements?
The agreements are effective from April 1, 2025, to March 31, 2026.
How will these agreements affect bond pricing?
They are designed to improve market pricing by ensuring competitive spreads and active market-making by the designated intermediaries.
Where can I find more information about bond categories?
For more details on each bond category, including LSS150434 and LSS151155, contact the Local Loan Fund directly.
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