Old Landsbanki Allowed to Repay Billions Overseas Skip to content

Old Landsbanki Allowed to Repay Billions Overseas

LBI hf., the bankrupt estate company of the old Landsbanki, has received permission to pay ISK 400 billion in priority claims from the estate.

The Central Bank of Iceland has granted an exemption from the country’s currency exchange restrictions for the payment to go ahead, in co-operation with the finance and economy minister.

The Central Bank has also indicated it will probably be willing to make the same exemption for further payments to priority claimants in the estate of LBI hf.—subject to the condition that the exemptions do not cause instability in foreign exchange and financial markets.

In partial exchange for permission to pay ISK 400 billion (EUR 2.6 billion/USD 3.2 billion) overseas, the bond issued between LBI and New Landsbankinn at the time of the refinancing of the banking sector will be lengthened. In addition, LBI will also take on part of Landsbankinn’s refinancing risk after 2018.

The 400 billion amounts to about five percent of the original claims made on the estate of the former Landsbanki, RÚV reports.

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