Today, Landsbankinn hf. signed market-making agreements with Arion bank hf., Islandsbanki hf. and Kvika hf. regarding covered bonds issued by Landsbankinn. The covered bonds are listed on NASDAQ Iceland and the market makers' obligations in accordance with the agreement will become effective on 4 October 2016.
Prior to market opening each business day, the market makers will place bid and ask orders for covered bonds issued by Landsbankinn. The minimum nominal amount of orders in benchmark series shall be ISK 80m or ISK 60m if the size of the benchmark series is less than ISK 10bn. Benchmark series are LBANK CB 19 and LBANK CBI 22. The minimum nominal amount of orders in other series is ISK 20m.
Individual market makers are released of their obligations on a particular trading day once the trading volume (specified as "AUTO") of that market maker totals ISK 500m for all series of covered bonds issued by Landsbankinn.
The maximum spread between bid and ask orders is determined by time to maturity on a given day, in accordance with the following table:
|Time to maturity||Maximum spread|
|0 - 6 months||Unspecified|
|6 months - 2 years||0.20%|
|2 - 4 years||0.30%|
|4 - 6 years||0.35%|
|6 - 9 years||0.60%|
|9 - 12 years||0.70%|
|12 - 18 years||1.00%|
|18 years or longer||1.15%|
In conjunction with the market-making agreements Landsbankinn will provide the market makers with bond lending facilities under which each market maker can borrow up to 320m in each benchmark series and 80m in other series.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Landsbankinn hf. via Globenewswire