Íslandsbanki hf. - Company Announcement

Islandsbanki hf. : Upcoming covered bond auction

Íslandsbanki hf. is holding an auction on non-indexed and CPI-linked covered
bonds to investors on Friday 16(th) October 2015.  A new 8-year non-indexed
issue, ISLA CB 23, and a 7-year CPI linked issue, ISLA CBI 22, are being offered
to investors.  Alongside the auction Íslandsbanki is offering to buy back bonds
in the series ISLA CBI 19, ISLA CBI 20 and ISLA CBI 24 for up to ISK 240m in
each series. Holders of bonds in the aforementioned series can offer their
bonds, free of commission, either in exchange for ISLA CB 23 or ISLA CBI 22 or
by selling them directly to Íslandsbanki before 2:00 p.m. on Friday 16(th)
October. The buyback will be in the format of a Dutch auction, i.e. Íslandsbanki
will accept the highest yield offered for up to ISK 240m nominal value in each
series.



For further information:

  * Investor Relations - Guðbjörg Birna Björnsdóttir, ir@islandsbanki.is and
    tel: +354 440 4752.
  * Public Relations - Edda Hermannsdóttir, pr@islandsbanki.is and tel
    +354 440 4005.


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