Failed Icelandic Bank Debt Said to Gain as Controls May Ease

Posted 30/05/2015 - 06:35 by anrigaut

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2015-05-28 23

Trading in debt issued by Iceland’s failed banks is picking up as hedge funds and other investors anticipate a removal of capital controls, according to two people familiar with the matter.

LBI hf and Glitnir hf’s defaulted debt rose about one cent to 11.75 cents and 34 cents on the euro respectively, about two cents higher than in January, said two people who asked not to be identified because trading is private. Kaupthing Bank hf’s claims gained half a point this week to 24 cents, they said.

Trading on debt claims denominated in euros increased this week as new buyers joined the market amid speculation foreign creditors may soon be able to repatriate some of the $6 billion that has been trapped behind capital controls.

Finance Minister Bjarni Benediktsson said on Wednesday the government will propose the law “in the next few days,” paving the way for the repayment of creditors to the nation’s major lenders, which went bust in 2008. The bills will likely be revealed next week, Sigurdur Mar Jonsson, a spokesman for the government, said by telephone on Friday. ...