Suited to larger companies with liquidity problems and interest-bearing debt exceeding ISK 750 million where it is clear that owners cannot provide new equity. Landsbankinn is willing to write down the debt of viable companies. Converting debt into share capital or subordinated debt will also be considered.

Landsbankinn is prepared to write down companies' debt against a new equity injection from owners. Converting debt into share capital or subordinated debt will also be considered.

In all debt restructuring, it shall be ensured that new equity from owners and outstanding debt is, in the bank’s estimation, at least 100% of revalued assets and guarantees held by the bank, or the company's total value based on estimated cash flow*, whichever is higher, plus the value of other guarantees. New equity goes toward companies' debt with Landsbankinn.

Debt after write-down and owners' equity injection should not exceed 90% of asset value or total value, whichever is higher, and shall be denominated in currencies that reflect companies' revenue.

For each króna (ISK 1) of new equity provided by owners in excess of 10% of total value or asset value, debt will be lowered by ISK 1.5 while debt exceeds 70% of total value or asset value. As a rule, write-downs should not exceed 60% of the loan principal.

Loan terms and maturity following restructuring shall be in accordance with the Landsbankinn's current tariff and be based on underlying guarantees. While the objective shall be for the greater share of companies’ loans to follow normal repayment cycles, it is clear that in some cases, a portion of credit must be in the form of bullet loans.