Landsbankinn hf.: Landsbankinn concludes market-making agreements for covered bonds
Landsbankinn hf. has signed market-making agreements with Arion bank hf., Islandsbanki hf. and Kvika bank 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 5 October 2024.
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 shall be based on the size of each series in accordance with the following:
| Size of series (bn.ISK) | Order size (m.ISK) | |
| 0 – 5 | 20 | |
| 5 – 10 | 60 | |
| 10 + | 80 |
The minimum nominal amount of orders in the inflation-linked series LBANK CBI 26 and LBANK CBI 28 shall be ISK 40m.
Individual market makers are released from their obligations on a given trading day once the trading volume (specified as “AUTO”) of that particular 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% |
Inflation-linked series with less than two years to maturity are exempt from the forementioned obligations on maximum spread.
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 series previously defined as benchmark series.
