Moody’s changes Iceland’s outlook to positive

Moody’s Investors Service ("Moody’s") has today changed the Government of Iceland's sovereign rating outlook to positive from stable and affirmed Iceland’s A3 long-term issuer rating. The government's long-term senior unsecured debt rating of A3 and the (P)A3 and (P)Prime-2 ratings assigned to its medium-term note (MTN) programme have also been affirmed.

The key drivers for the change in the rating outlook to positive from stable are:

1. Improving economic resilience afforeded by net external creditor position, more balanced growth and ongoing strengthening of the country‘s banking system.
2. Anticipated further improvement in the government‘s debt metrics beyond what was previously expected.

The positive outlook also reflects progress made in the past two years on the major preconditions we laid out at the time of the upgrade to A3 in September 2016, including the smooth removal of capital controls and the settlement of the offshore krónur situation.

Attachment

• Moody's Press Release - 20 July 2018