On Tuesday 19 April, Arion Bank issued new senior unsecured bonds for a total of €300 million. Orders totaling over €500 million from more than 70 investors were received. The 3-year bonds have a fixed coupon of 2.50% and were sold at rates corresponding to a 2.70% margin over interbank rates. This represents the second euro benchmark issue by Arion Bank.
Arion Bank mandated Barclays, J.P. Morgan and Nomura for the transaction, which followed a 3-day roadshow with European investors. Credit markets have been improving recently and following the Bank's strong annual financial results it was considered the right time for a bond issue of this size.
The aim is to use some of the proceeds to pay down other funding as well as supporting corporate clients of the Bank in need of international funding.
This bond issuance is the next step in a targeted effort to diversify funding in recent years. In March 2015 Arion Bank became the first Icelandic bank to issue bonds in the euro market in benchmark size. Arion Bank is rated BBB- with a positive outlook by Standard & Poor’s.
Höskuldur H. Ólafsson, CEO of Arion Bank:
“Over the past few years we have made a targeted effort to introduce Arion Bank and the Icelandic economy to international investors in order to gain better access to the international credit markets. We have made good progress as developments at the Bank and in the economy have generally been very positive. We are therefore delighted to issue our second euro benchmark. This will prove beneficial to those customers of ours who require international funding and important for the economy as a whole as it further confirms that Icelandic banks are able to access the international credit markets at a lower cost.”
For further information please contact Haraldur Gudni Eidsson of Arion Bank's Communications division at haraldur.eidsson@arionbanki.is, or tel. +354 444 7108.