Central Bank purchase of offshore króna assets
On 12 March 2017, the Central Bank of Iceland announced the purchase of offshore króna assets as these are defined in the Act on the Treatment of Króna-Denominated Assets Subject to Special Restrictions, no. 37/2016, in the amount of 90 b.kr. at an exchange rate of 137.5 kr. per euro. Furthermore, it was announced that the Bank intended to offer the same terms to offshore króna holders that did not participate in the 12 March transactions. That invitation was reiterated on 4 April 2017 with a Central Bank press release outlining the structure and terms of the offer. The deadline for participation was on Friday 28 April, and responses to the offer are now being reviewed.
A number of interested parties were unable to finalise their trades within the timeframe specified by the Bank. As a result, the Bank has decided to extend the period during which intermediaries may submit offers until 15 June 2017.
The offer extends to foreign financial institutions and funds and recognised counterparties that satisfy the requirements concerning anti-money laundering measures and other due diligence analysis of customers vis-à-vis Clearstream Banking S.A. and Euroclear Bank S.A./N.V., the Central Bank’s intermediaries for the offer. Such parties may conduct transactions either on their own account or on behalf of their customers. Owners of offshore krónur shall contact the custodian of the assets in question as regards trades and settlement, as the deadline to submit bids and settlement date may differ from one custodian to another. Further information on the structure and terms of the offer will be published in coming days.
Further information can be obtained from Már Gudmundsson, Governor, and Sturla Pálsson, Director of Treasury and Market Operations, at tel +354 569-9600. Queries on execution of the transactions may be sent by e-mail to offshore@sedlabanki.is.
No. 13/2017
4 May 2017