Today saw Landsvirkjun sign for a syndicated loan in the international banking market. Amounting to USD 400 million, this loan is a revolving credit facility with a term of seven years, meaning that Landsvirkjun can both draw on the loan and repay it as required. By obtaining this loan, Landsvirkjun is refinancing a similar loan negotiated on less favourable terms in 2003.
The new loan was arranged by Barclays Capital, Citicorp, the Icelandic bank Landsbanki, SEB, Société Générale and Sumitomo. In addition, ten other banks participated in the loan, including the further Icelandic banks Glitnir and Kaupthing Bank. The terms were highly favourable, with Landsvirkjun paying a commitment charge of 0.0425% and an additional 0.045% in the event of drawing on the loan. These terms are only slightly higher than those extended to the State Treasury for comparable loans. In fact, Icelandic State Treasury loans provide at any given time the guidelines for terms on offer to other borrowers in Iceland.
The banks in this case presented offers for loans amounting to USD 570 million, which is an indication of the trust currently enjoyed by Landsvirkjun and the Icelandic Government in the international financial market. CEO Friðrik Sóphusson signed the loan contract on behalf of Landsvirkjun.