Central Bank of Iceland, on behalf of the Treasury, agrees to purchase foreign Treasury bonds for approx 346 million euro

In a tender among investors in Treasury bonds that closed yesterday, the Central Bank of Iceland, on behalf of the Treasury, agreed to purchase, at par value, foreign Treasury bonds maturing in 2011 and 2012 for just approximately 346 million euros (roughly 57 b.kr.). The two bonds in question were issued by the Treasury in euros, in the original nominal amounts of 1,000 million euros and 250 million euros (total 204 b.kr.).

The Central Bank had already purchased a portion of these bonds in the market. Prior to yesterday's purchase, approximately 800 million euros (130 b.kr.) were outstanding. Remaining after the auction is a total of 454 million euros of these bonds, maturing in 2011 and 2012. The purchase is an element in the Treasury's liquidity and debt management strategy and the Central Bank of Iceland's reserve management strategy.