Orkuveita Reykjavikur Enters a Currency Swap Agreement
The Board of Directors of Orkuveita Reykjavikur (Reykjavik Energy – OR) has agreed to enter a currency swap agreement with Arion Bank in order to protect the Company against the volatility of the Icelandic currency. The agreement ensures OR access to foreign currency over the next six years and is valued at ISK 15 billion. It is the third contract in a few weeks the Company makes to solidify its financing. A month ago OR reported agreements with the European banks Dexia Crédit Local and DePfa on changes of amortizations.
Bjarni Bjarnason, CEO:
The reformation of OR‘s operations was completed in March this year. Those improvements have earned the Company increased credibility and have enabled us to strengthen its financial foundations. OR‘s foreign debt is still high and fluctuations in exchange rates are one of the major risks to the Company‘s financial stability. Therefore, it is reassuring to reach an agreement to mitigate them. In recent weeks, the Company has re-negotiated amortizations with foreign financial institutions and is pleased to enter this one with a solid Icelandic bank.