Central Bank and credit institutions sign agreements on bridge loans
The Central Bank of Iceland has been entrusted with executing Treasury guarantees under a special agreement with the Ministry of Finance and Economic Affairs. To that end, the Bank has signed agreements with Íslandsbanki, Landsbankinn, Arion Bank, and Kvika on guarantees of supplemental bridge loans to businesses. The loans are intended for companies – primarily small and medium-sized enterprises – that are facing temporary operational difficulties as a result of the COVID-19 pandemic.
The Treasury will guarantee up to 70% of the loans, which companies can receive upon satisfying specified requirements, including refraining from paying dividends or buying their own shares during the term of the guarantee. The total amount of Treasury guarantees under this programme could range up to 50 b.kr.
Ásgeir Jónsson, Governor:
“Finalising these agreements on bridge loans is an important milestone. Distressed companies now have a way to access operating capital in the wake of the COVID-19 pandemic. The banks now have all they need to begin acting on the basis of the agreements, with the aim of supporting businesses through the most difficult period. This should put some wind in our sails in the coming term.”
12. May 2020