Lánamál ríkisins - Company Announcement

Signing of Agreements regarding Issuance of Treasury Securities and Market Making in the Secondary Market

Today the Government Debt Management on behalf of the Treasury and primary
dealers signed agreements regarding Issuance and Market Making in Treasury
securities. The objective of the agreements is to maintain the Treasury’s
access to financing and to enhance price formation in the secondary market for
Treasury securities. 

As of 1 April 2015, four financial undertakings have been appointed as “primary
dealers in Treasury securities”. They are: Arion Banki hf., Islandsbanki hf.,
Kvika banki hf. and Landsbankinn hf. 

The following bullet points describe the content of the Agreement:

  -- Primary dealers have exclusive access to auctions of marketable Treasury
     securities.
  -- Primary dealers have exclusive access to securities lending facility
     offered by the Government Debt Management on behalf of the Treasury.
  -- Primary dealers are obliged to submit bids at each auction for a minimum of
     100 m.kr. nominal value.
  -- Primary dealers are Market Makers in the secondary market for Treasury
     benchmark series. They are obliged to submit bid and ask offers on the
     stock exchange for at least 100 m.kr. nominal value in each benchmark
     series.
  -- Primary dealers are in their bid and ask quotes governed by maximum spreads
     as laid out in the agreements.
  -- Primary dealers are obliged to renew their offers within ten minutes after
     execution of transaction. The primary dealer is entitled to depart from the
     maximum spread requirement if certain conditions are fulfilled.
  -- The agreement is valid from 1 April 2016 to 31 March 2017.


A sample agreement is attached that provides comprehensive information on the
primary dealers´ rights and obligations. 

Further information can be obtained from Björgvin Sighvatsson, head of the
Government Debt Management at +354 569 9600.

Attachments:

Press release after signing.pdf

Agreement_sample.pdf