Market maker agreement and additional Issuance of Bonds
28. jan 2020
Orkuveitan
On January 27th Orkuveita Reykjavíkur (OR; Reykjavik Energy) signed an agreement with Arion Banki hf., Íslandsbanki hf., Landsbankinn hf. and Kvika Banki hf. to be designated market makers of the index linked green bond series, OR180255 GB. The agreement is valid from January 28th 2020.
Market makers are obligated to enter buy and sell offers for the new series on the NASDAQ OMX Iceland exchange before the opening of the market. Offers should always be at a minimum of 20m ISK nominal amount and shall be renewed not later than 15 minutes after they have been accepted. The maximum spread between buy and sell offers can be 1.0% and is determined by the price of valid offers. Market markers are however allowed to deviate from the maximum buy-sell offer spread while the total series size remains below 2bn ISK. Should a single market maker, within a single trading day, have a turnover of more than 60m ISK of nominal amount in the new series in automatic trades, that market maker can deviate from the maximum buy-sell offer spread until the end of the trading day for the bond series.
Additional Issuance of bonds
According to the agreement, each market maker had the right to purchase a total nominal amount of ISK 100m in the series, at the agreed price in the bond auction that was held on January 23rd 2020.
The market makers exercised their right to purchase OR180255 GB for a total nominal amount of ISK 360m at a yield of 1.78%. The settlement date for the bonds is January 28th. The series will be listed on the NASDAQ Iceland Sustainable Bond market.
In addition, OR will issue new bonds in the OR180255 GB series for a total nominal amount of ISK 400m that will not be sold to investors. The additional issuance is done so OR can meet its bond lending obligations under the previously mentioned market making agreement.
Total outstanding nominal value of OR180255 GB after the additional issuance will be 12,371,000,000.
