Sometimes an issuer comes to the international debt markets, not for the sake of its balance sheet, but just to show that it can. That was the position in which Iceland’s Landsbanki found itself this summer, when it raised $2.25bn by issuing two inaugural, and very successful, Yankee bonds.
Iceland has had a rough press since February, when rating agency Fitch revised its outlook on the country’s foreign and local currency ratings from stable to negative. The agency cited an “unsustainable” current account deficit and rising net external debt.