Íslandsbanki hf. - Company Announcement

Islandsbanki hf. : Covered bond tap issues

Íslandsbanki hf. has tapped into outstanding issues of covered bonds listed on
NASDAQ OMX Iceland.  The CPI-linked seven year issue, ISLA CBI 19, was tapped
for an amount of ISK 600,000,000 at a real yield of 2.82 % and the CPI-linked
twelve year issue, ISLA CBI 24, was tapped for an amount of ISK 380,000,000 at a
real yield of 2.89 %.

Following these latest issues, the total amount issued in ISLA CBI 19 has
reached ISK 6.63bn and ISLA CBI 24 has reached ISK 8.47bn. In total,
Íslandsbanki has now issued covered bonds amounting to ISK 23.32bn since its
inaugural issue in December 2011.

Sold to a broad group of investors, total appetite for the tap issue amounted to
ISK 1.52bn, of which 64% of the offers were accepted. Trading is expected to
commence on 18 December 2013 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.


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