Íbúðalánasjóður - Company Announcement

Announcement on issuance of a new HFF bond´s series

The Housing Financing Fund (HFF) has since the beginning of the year 2009,
being analysing an issuance of a new series of HFF bonds, according to previous
announcement published on the OMX Nasdaq Stock Exchange on 12 February 2009.
That announcement implied that an issuance of a longer maturity og HFF bonds
was being analysed. 

Since the beginning of the year 2009 the issue of HFF bonds has been surrounded
with substantial uncertainity in relation with a potential mortgage portfolio
acquisition from banks, according to law nr. 125/2008, regulation nr. 1081/2008
and the HFF board´s rules about the purchase. In the budget law of 2009 the HFF
was authorized a purchase of mortgage portfolios for up to ISK 100 billion, but
it was also stated that the amount could be higher or lower. The HFF´s 
purchase has, to this date, been much lower or about ISK 14 billion. However,
the HFF does not exclude that the amount could increase. 

The HFF has also experienced uncertainity in relation to the effectes from non
performing loans, peyment suspensions and other payment solutions, on the HFF´s
cash flow. The HFF does not consider the effects to be large so far. 

Therefore, the HFF has postponed plans of an issuance of a new HFF bond series,
in the year 2009 and the first half of 2010, but will review the plan in the
second half of 2010.