In 2006, Iceland tapped the Eurobond market with a €1bn, five-year deal, priced at one basis point below Euribor. At the time, the country had an AAA rating and was feted by bankers and investors worldwide.
Fast-forward to today and the situation is rather different. Iceland is rated BBB- and it is in the middle of a four-year support programme from the International Monetary Fund (IMF). The country’s fortunes nose-dived in 2008, when its three largest banks collapsed, its currency plummeted and the government was forced to seek help from the IMF and fellow Scandinavians.
