Press coverage and claims to the effect that HFF is facing a default on its issued debt has no supporting substance in the balance sheet, liquidity position, or operations of the Fund. Due to press coverage on HFF on 17th October 2012 it is important to keep the following in mind:
HFF is not facing a failure to meet its issued debt obligations, and () thus, it is important not to draw conclusions on the liquidity position and debt serviceability based on the equity position of HFF.
Liquidity and debt serviceability
HFF is in a strong position to meet upcoming debt obligations (). The Fund has about ISK 54 billion in liquid assets and for that reason, it has not tapped the debt capital market since January 2012.
HFF’s equity position
- HFF needs about ISK 12-14 billion to get its equity ratio to the minimum required by legislation.
- HFF awaits a decision by Icelandic authorities to strengthen the Fund‘s equity position. The timing of such a decision has no direct impact on the Fund´s ability to meet its debt obligations.
- The decision by Icelandic authorities to strengthen the Fund´s equity is purely related to loan impairments, and has nothing to do with the liquidity position.
- The debt obligations of HFF have an implicit State guarantee.