Iceland's Kaupthing Bank defaults on 50 billion yen samurai bond

TOKYO, Oct. 27 Kyodo - Troubled Icelandic financial firm Kaupthing Bank hf had not made coupon
payments on a 50 billion yen samurai bond as of Monday, effectively defaulting
on its obligation.
Sumitomo Mitsui Banking Corp., which is responsible for payment paperwork,
confirmed the nonpayment.
Kaupthing, which has been seized by the Icelandic government, had a one week
grace period to make its interest payment on the yen-denominated bond issued in
October 2006. Payments on the bond, held mainly by Japanese institutional
investors, were initially due Oct. 20.
According to officials at Daiwa Securities SMBC Co., one of the underwriters
for the issue, the Reykjavik-based bank has also issued three other samurai
bonds in Japan. The combined amount raised via the three issues stands at about
28 billion yen.
''There is a great possibility that all (three) will be defaulted on,'' sources
familiar with the matter said.
Kaupthing was placed under state control on Oct. 9.
==Kyodo