Iceland Targets Creditor Writedowns as Accord Sought This Year

Posted 10/07/2014 - 08:11 by anrigaut

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2014-07-09 23

The creditors in Iceland’s failed banks will need to accept writedowns of their assets as the government will push for an accord this year to ensure economic stability, Finance Minister Bjarni Benediktsson said.

“We’re trying to maintain stability in Iceland,” he said today in an interview with Bloomberg Television. “Write-offs will need to take place and the market is also showing that this will need to happen if you just look at what’s available in terms of pricing of claims against the estates.”

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“We are concerned about the balance of payment going forward,” Benediktsson said. “A solution can be created, the incentives are all here, some people are waiting to gain access to their assets and we are concerned about having the controls for too long.”

Bonds issued by Glitnir last traded at about 29 cents on the dollar, while Kaupthing debt traded at 24 cents, according to website Keldan. Landsbanki bonds traded at just over 5 cents.

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