Terms defined in this notice shall be construed in accordance with the conditions set out in the Schedule 1 to the Trust Deed, dated 23 March 2016 and made between the Issuer, the Trustee and the U.S. Trustee (the “Conditions“) (as amended in a noteholder meeting on 28 November 2016).
Pursuant to 9.2(a)(ii) of the Conditions, and in furtherance of the Unscheduled Payment Notice issued on the 14 March 2016, the Issuer hereby notifies the Bondholders of payment which will be applied in partial redemption of the Bonds on the Payment Date of 5 April 2017. The estimated Euro Equivalent Available Cash for this payment is €301,992,221.
The Central Bank of Iceland has concluded an agreement with owners of offshore króna assets subject to special restrictions pursuant to Act no. 37/2016. Under the agreement, the Bank will purchase offshore króna assets from them in the amount of equivalent of close to 90 b.kr. at an exchange rate of 137.5
Offshore króna holders that have not made an agreement with the Bank will be invited to do so in the next few days. This would apply for legal entities that hold ISK that were paid into escrow accounts in relation to ISK allocation from LBI in December 2011 against Art. 112 priority claims.
The announcement from the Central Bank of Iceland can be found here
Ruling against LBI ehf. was passed down today in the UK Royal Courts of Justice in a case between LBI ehf as claimant and RZB (Raiffeisen Zentralbank Österreich AG and Raiffeisen Bank International AG) as the Defendants. The dispute concerned the closeout of GMSLA and GMRA contracts as to both whether default notices were adequately served and then subsequently the appropriate valuation of underlying securities. The conclusion of the ruling is that LBI ehf does not have a claim against RZB. RZB had previously irrevocably withdrawn its claim lodged against LBI in Iceland.
The judgement will reduce previously reported expected recoveries under other assets and will also result in expenses for LBI due to costs awarded to the defendants. LBI will review whether to appeal the judgement.
Pursuant to Condition 9.2(a) of the Convertible Notes due 2035, LBI ehf. hereby gives notice of its intention to make an unscheduled payment in respect of the Convertible Notes on 5 April 2017 in an amount currently estimated to be €297 million.
The principal source of cash for this payment is the partial prepayment of Landsbankinn Bonds, which was received by LBI on 14 March 2017.
In accordance with the terms and conditions of the Convertible Notes, further detail will be provided on 23 March 2017.
On 14 March 2017, Landsbankinn fully prepaid the outstanding balance under Bond Series 2020 in the amount of USD 170 million and partially prepaid Bond Series 2024 in the amount of USD 111 million. The prepayment totals USD 284.1 million, including accrued and unpaid interest (EUR 266.9 million at the exchange rate of 14 March 2017). LBI expects to announce an unscheduled payment in partial redemption of the Convertible Notes shortly.