Landsvirkjun has signed a USD 125 million revolving credit facility with a tenor of three years and two one-year extensions. The facility will be used as backup liquidity for general corporate purposes and refinances Landsvirkjun’s undrawn USD 150 million facility signed in 2019. The reduction in size of the facility reflects Landsvirkjun’s strong financial position and the reduced need for access to backup liquidity.
Margin incentive structure linked to sustainability targets
The terms of the facility are favourable, with an initial margin of 45 basis points over SOFR and with a sustainability pricing mechanism. The margin is linked to Landsvirkjun’s ambitious climate and environment targets; to become carbon neutral by the end of 2025 and to stop purchasing fossil fuels by the end of 2030. The facility’s interest margin will increase or decrease by 2.5 basis points based on Landsvirkjun´s success in reaching these targets.
The new facility is provided by Landsvirkjun’s core relationship banks
The new facility was signed by four banks which form the bank group of Landsvirkjun. The transaction was led by Barclays Bank Ireland PLC (“Barclays”) as financial advisor, bookrunners and mandated lead arrangers were Barclays, ING Belgium SA/NV, BNP Paribas S.A. and Cooperative Rabobank U.A.. Barclays acted as documentation agent and sustainability coordinator. ING Belgium SA/NV will act as agent.
Landsvirkjun
Landsvirkjun is owned by the Icelandic State. The company generates about 75% of all electricity used in Iceland from 100% renewable energy sources, hydro, geothermal and wind. The company operates eighteen power stations; fifteen hydropower stations and three geothermal power stations, as well as two wind turbines.
