Íslandsbanki hf. - Company Announcement

Islandsbanki hf. : Covered bond tap issues

Íslandsbanki hf. has tapped into outstanding issues of non-indexed covered bonds
listed on NASDAQ OMX Iceland.  ISLA CB 15 was tapped for an amount of ISK
780,000,000 at a real yield of 6.40% and ISLA CB 16 was tapped for an amount of
ISK 120,000,000 at a real yield of 6.40%. A new five-year non-indexed issue,
ISLA CB 19, was sold today for an amount of ISK 540,000,000 at a real yield of
7.05%.

Following these latest issues, the total amount issued in ISLA CB 15 has reached
ISK 3.92bn and ISLA CB 16 has reached ISK 2.47bn. In total, Íslandsbanki has now
issued covered bonds amounting to ISK 27.37bn since its inaugural issue in
December 2011.

Sold to a broad group of investors, total appetite for the tap issue amounted to
ISK 1.98bn, of which 73% of the offers were accepted. Trading is expected to
commence on 11 April 2014 on the NASDAQ OMX Iceland. Market making for all of
Íslandsbanki's covered bond issues is in the hands of MP bank.

The bonds are issued under Act 11/2008 on Covered Bonds which obliges the issuer
to fulfil strict requirements, whereby the underlying cover pool must withstand
a weekly stress test with regards to interest rates and exchange rates. The
issuances are regulated by the Icelandic Financial Supervisory Authority which
additionally appoints an independent inspector to monitor the issuances. Special
cover pool reports on the covered bond issuances are published quarterly and can
be found on Íslandsbanki's web.

For further information:

  * Investor Relations - Tinna Molphy, tinna.molphy@islandsbanki.is and tel:
    +354 440 3187.
  * Media Relations - Dögg Hjaltalín, dogg.hjaltalin@islandsbanki.is and tel:
    +354 440 3925.


[HUG#1774341]