By Marta Vilar – MADRID (Econostream) - Iceland is more likely to issue a conventional foreign currency bond than a green bond in 2027, as it continues to prioritize establishing a regular presence in international capital markets with benchmark issuance, according to Esther Finnbogadóttir, head of funding and debt management at the Icelandic Ministry of Finance.

In an interview with Econostream on 14 July 2026 (transcript here), Finnbogadóttir said that Iceland was still allocating the proceeds from the green bond in 2024, thus making a new green bond issuance next year unlikely.

"It is rather unlikely though that we will decide on a green bond next year; it is more likely we will focus on issuing a plain-vanilla bond in the international market,” she said.

The Treasury's medium-term debt management strategy, adopted last year, now envisaged annual benchmark issuance in international markets, subject to market conditions, replacing the previous approach of irregular foreign borrowing, she said.

Asked about the possibility of delivering multiple foreign currency transactions within a year, she indicated that investors should not expect this to become the norm.

"The aim is to be in the market every year with a benchmark bond," she said. "However, issuance is contingent on market conditions and timing is not specified, so technically it is possible that Iceland would issue more or less than once a year; however, it is rather unlikely."

For now, Finnbogadóttir said that Iceland intended to continue building its euro funding curve rather than diversify into other currencies.

Looking ahead to next year, she said the fiscal plan currently pointed to borrowing requirements broadly comparable to those of 2026.

"The fiscal plan for 2027-2031 gives an indication though of similar funding needs for 2027 as in 2026," she said. "The aim is to issue a benchmark bond in foreign currency in the international market, subject to market conditions."

Back to 2026, domestic issuance was expected to slow during the second half of the year following a frontloaded funding program, she said.

"Issuance has been going according to plan; it has been rather frontloaded and so far we have issued around ISK 127 billion out of ISK 200 billion that is targeted for the whole year," she said. "In the quarterly borrowing plan for the third quarter, we are aiming for ISK 30-50 billion compared to ISK 40-60 billion in the first and second quarters."

She added that investors should expect "slightly less supply than in the first half of the year but more or less similar strategy."

On the domestic market, she noted that the Treasury intended to continue introducing one or two new benchmark bond series annually while expanding existing lines through auctions.