Settlement due for Icelandic creditors

London: Creditors of failed Icelandic lender Kaupthing Bank may get their claims settled in about a year as the bank’s winding-up committee looks into the option of swapping debt for equity.

“We could see issuing some kind of financial instruments to the creditors in a year’s time,” said Olafur Gardarsson, the head of Kaupthing’s winding-up committee, in an interview.

“Those who need the money can cash out and others that want to see a greater return on their investment can choose to sit back and wait.”

Kaupthing, which failed in October 2008 after it was unable to access wholesale markets, faces total claims of about $56 billion (€41bn), according to a creditors’ report published last month.

Investors who bought bonds in the bank can expect 26.25 cents back on the euro, data provided by brokerage HF Verdbref show.