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Development of the yield requirement of RVÍK and OR in autumn 2024

Below you can see how the indexed return on Reykjavík City and Orkuveituna has been moving this fall. The graph shows the demand in September (x) and November (etc) for individual bonds of RVÍK and OR. The blue and yellow lines are found using the Nelson–Siegel–Svenson method, which uses mathematical methods to draw a smooth line through the requirements for different bond durations.

Strictly speaking, it is reasonable to assume that RVÍK's and OR's bonds are subject to the same yield requirement, since the issuers of the bonds are in the same group. The blue line in September shows this well. In November, however, investors seem to have started making a lower demand for RVÍK's bonds and a higher one for OR. The green line that only covers RVÍK's bonds shows this well.

It seems that better interim results and changes in credit requirements have lowered investors' demands on the City of Reykjavík.

Orkuveitinn's high need for credit and the unclear position of subsidiaries in Orkuveitinn's financial forecast published at the end of October seem to be increasing investors' demands for the company's bonds.

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