Treasury debt ratio declines by 5% upon settlement of HF-Fund

The proposal for the settlement of HF-Fund was presented at meetings held on 10 April 2025 with bondholders in series HFF34 and HFF44. It was approved by a majority of votes. The value of the HFF bonds in the settlement is estimated at ma.kr 651.

Thereafter, in a proposed fiscal budget supplement, authorisation for settlement was requested in accordance with the proposal. The proposed budget supplement was recently passed by Parliament.

The settlement of HF-Fund’s obligations will take place on 12 June 2025. In connection with the settlement, the Treasury will issue nine new Treasury bond series (see table) with a combined nominal value of ISK 487 bn.

With the delivery of the said bonds, the Treasury will pay in full the loans granted to it by HF-Fund in 2020 and 2021, in the combined amount of ISK 238 bn.

The Treasury will also deliver EUR 378 m (about ISK 55 bn) from foreign currency deposits financed with a recent Eurobond issue.

Upon settlement, the Treasury will receive HF-Fund´s assets other than those used for the settlement, including The New Housing Fund bonds, as well as a loan portfolio, and bonds issued by leasing company Bríet, in the total amount of ISK 222 bn.
The net effect on the Treasury Part A debt ratio (according to Maastricht criteria) is to lower the debt ratio by just over 5% of GDP.