Lánamál ríkisins - Company Announcement

Standard & Poor’s: Republic of Iceland. Outlook revised to stable from negative on receding fiscal risk

On January 24, 2014, Standard & Poor's Ratings Services revised the outlook on
the Republic of Iceland to stable from negative. At the same time, S&P affirmed
their 'BBB-/A-3' long- and short-term foreign and local currency sovereign
credit ratings on Iceland. 

S&P estimates that Iceland's proposed mortgage debt relief program will have a
cumulative fiscal cost of about 6% of GDP over the next four years. It is
expected that the government will finance the program through increased
taxation and not higher deficits. Therefore, the outlook on Iceland is being
revised to stable from negative. At the same time, S&P affirms its 'BBB/A-3'
ratings on Iceland. The stable outlook reflects a balanced risk from the
continued economic recovery and the uncertainties related to the lifting of
capital controls. 

See further information in the announcement from Standard &  Poor's.

Attachments:

SP_RatingsDirect_Research Update_1248240_Jan-24-2014_02_02.pdf