Landsvirkjun - Company Announcement

Landsvirkjun restructures outstanding bonds

Landsvirkjun recently signed two agreements regarding restructuring of two
outstanding bonds. One of the bonds was converted from euros to US Dollars and
for the other bond a put option was removed and the final maturity date was
amended. 

An agreement was reached to convert a bond in euros to US Dollar. The bond was
issued in 2006, with a maturity date in 2016. The bond amounted to 50 million
euros but after the redenomination it amounted to approx. 68 million US
Dollars. 

In the other agreement a put option was removed. The bond amount is 50 million
euros with a yearly put option until 2023. The Noteholder accepted to remove
the put option and amend the final maturity date to March 2020. As a result of
the put option the Company defined the bond as a short term liability but after
the amendment it will be defined as a long term liability. 

Landsvirkjun´s benefit from these restructurings is twofold. On one hand,
financial risk of the Company is reduced due to possible movements in the euro
against the US Dollar, which is the functional currency of the Company. On the
other hand, refinancing risk is reduced by setting a definitive maturity date
in 2020. These amendments are an important factor in the Company's policy to
reduce risk related to the loan portfolio. 






More information:

Rafnar Larusson

CFO

rafnar@lv.is

+ 354 5159000