Arion Bank hf. - Company Announcement

Arion Bank issues bonds in Norwegian kroner

Earlier today Arion Bank completed a bond issue in Norwegian kroner, issuing
NOK 500 million of 5-year instruments. The bonds bear floating NIBOR plus
2.95%. Arion Bank has simultaneously entered a swap agreement, whereby part of
the interest and principal are in euros. Interest in euros is floating EURIBOR
+ 2.74%.  The issue was oversubscribed. The bonds were sold to investors in
Norway, Sweden, Finland, Denmark and continental Europe. Pareto Securities
arranged the bond issue for Arion Bank. 

At the same time, Arion Bank has also bought back NOK 260 million of bonds from
a 2013 issue. The Bank had previously bought NOK 59 million and has now bought
back NOK 319 million of a NOK 500 million issue from 2013. 

Arion Bank has also paid ISK 10 billion of a subordinated loan from the
Icelandic treasury before the due date.  This is the second time this year that
Arion Bank has paid down a subordinated loan in advance, and the Bank has now
paid a total of ISK 20 billion of a subordinated loan of approximately ISK 30
billion. The loan was granted at the beginning of 2010 in connection with the
recapitalization of the Bank. 

For further information please contact Eiríkur Magnús Jensson, Head of Funding,
eirikur.jensson@arionbanki.is, Tel: +354 856 7468