Landsbankinn hf.: Landsbankinn concludes market making contracts for covered bonds – Bollyinside
Landsbankinn hf. has signed market making agreements with Arion bank hf., Islandsbanki hf. and Kvika bank hf. on covered bonds issued by Landsbankinn. The covered bonds are listed on Iceland’s NASDAQ and the market makers’ commitments under the agreement will take effect on October 5, 2022.
Before the market opens on each business day, market makers will place buy orders and inquiries for mortgage bonds issued by Landsbankinn. The minimum nominal order amount will depend on the size of each series as follows:
|Lot size (adj. ISK)||Quantity ordered (ISK)|
|0 – 5||twenty|
The minimum nominal amount of orders in the LBANK CBI 28 series is ISK 40 million.
Individual market makers are released from their obligations on a given trading day when the trading volume (referred to as “AUTO”) of a given market maker is 500 million ISK for all series of covered bonds issued by Landsbankinn.
The maximum spread between buy and sell orders is determined by the time to expiration on a given day, according to the table below:
|Maturity time||Maximum spread|
|0 – 6 months||Indefinite|
|6 months – 2 years||0.20%|
|6 – 9 years old||0.60%|
|9 – 12 years old||0.70%|
|12 – 18 years old||1.00%|
|18 or older||1.15%|
Inflation-linked series whose issuance is prohibited under Central Bank of Iceland Regulation 492/2001 on Indexation of Savings and Loans, as amended, are exempt from maximum margin requirements aforementioned.
Along with the market maker agreements, Landsbankinn will provide market makers with bond loans under which each market maker can borrow up to PLN 320 million in each reference series and series previously defined as reference series.