Landsvirkjun has signed two agreements with the Nordic Investment Bank (NIB) regarding redenomination of two loans the Company has with the Bank. The loans were both in euros, floating rate, but were converted into US Dollar with fixed rate coupons. One of the loans was issued in 2004, with a maturity date in 2019, and the other was issued in 2006, with a maturity date in 2028.The two loans amounted to 70 million euros each, total 140 million euros. After the redomination they amounted to approx. 92 million US Dollars each or 184 million US Dollars.
Landsvirkjun´s benefit from the agreements is twofold. On one hand, the financial risk is reduced due to possible movements in the euro against the US Dollar, which is the functional currency of the Company. On the other hand, the ratio of floating rates in the loan portfolio is reduced and hence the interest rate risk is lower.
After the redenomination the ratio of euro loans in long term interest-bearing debt lowers from 38% to 31% but at the same time the ratio of the US Dollar increases from 42% to 49%. The ratio of fixed rates loans increases from 27% to 34%.
Pie charts as of 31.12.2011