Íbúðalánasjóður - Company Announcement

Signing of Agreements Regarding Issuance and Market Making in HFF bonds

On June 18, the Housing Financing Fund signed agreements regarding Issuance and
Market Making in HFF Bonds. The objective of the agreements is to enhance the
HFF access to borrowed money and strengthen price formation in the secondary
market. 

As of July 1st, 2008, six financial institutions have been appointed as
“Primary Dealers in HFF bonds”. They are: Glitnir Bank, Kaupthing Bank,
Landsbanki, MP Investment Bank, Saga Capital Investment Bank and Straumur -
Burðarás Investment Bank. 

The following bullet points describe the main content of the Agreement:

• Primary Dealers have exclusive rights to submit bids at HFF auctions

• Primary Dealers have exclusive access to HFF Securities Lending Facility.

• Primary Dealers are obliged to submit bids in each auction for a minimum
amount of 2.000 m.kr. at nominal value. 

• Primary Dealers are obliged to quote on OMX Nordic Exchange in Iceland bid
and ask offers for at least 100 m.kr. nominal value in each HFF bond classes. 

• Primary Dealers are in their bid and ask quotes governed by maximum spreads
as laid out in the agreements. 

• Primary Dealers are obliged to renew their offers within ten minutes after
execution of transaction. If the Primary Dealer's total transaction in one
series during that day equals 1.000 m.kr. at nominal value, the Primary Dealer
is permitted to withdraw from the maximum spread requirement for that
particular series for the remainder of that day. 

• The agreement is valid from July 1st, 2008 to June 30, 2009

• Total remuneration paid to all Primary Dealers is 50 m.kr. for the duration
of the agreement for the market making part and 0,15% fee is determined from
the market share of accepted auction bids. 

A sample agreement is attached that provides comprehensive information on the
Primary dealer's rights and obligations 

Attachments:

primary dealership 2008-2009 enska.pdf