Refinancing of foreign loans
By the end of 2015, the City of Hafnarfjörður's foreign debt will have been largely repaid, partly through a new loan from the Municipal Loan Fund. The Loan Fund is likely to be involved in further refinancing in the coming months.
Optimisation amounts to tens of millions of kroner
The Municipal Finance Corporation has approved a loan to the municipality of up to six billion krónur for the refinancing of loans from the City of Hafnarfjörður to the foreign company FMS. Instead of fully drawing on an existing loan agreement with an Icelandic bank, it has been decided to enter into an agreement with the Loan Fund for a 3 billion króna loan on much more favourable terms than a new bank loan. The Loan Fund will then presumably be involved in further refinancing in the coming months. Hafnarfjörður is the third largest municipality in the country, with total expenditure of around 21.9 billion króna.
„The fact that the Municipal Finance Corporation is prepared to lend us up to 6 billion krónur is proof that an analysis of our operations, and the subsequent reforms and changes, are paying off. This is a great recognition of the work that has been carried out over the past year. The savings from borrowing from the Loan Fund amount to tens of millions of kroner on a full-year basis, compared to the financing that was previously budgeted for.“ says Haraldur L. Haraldsson, Mayor of Hafnarfjörður.