Íslandsbanki hf. - Other information disclosed according to the rules of the Exchange

Islandsbanki hf.: Íslandsbanki issues 10NC5 Tier 2 bond of SEK 750 million

Íslandsbanki has today issued a SEK 750m 10NC5 Tier 2 transaction. The bond pays
a quarterly coupon of 3 month STIBOR +200bps. The bond has an investment grade
rating of BBB- from S&P Global Ratings.

Demand was high for the issue which was sold to a broad spectrum of investors in
the Nordics and continental Europe. The bond is expected to be listed on the
Irish Stock Exchange on 23 November 2017.

This is the first subordinated issue from an Icelandic bank in the international
capital markets since 2008 and marks a significant step in normalising the
liability side of Íslandsbanki's balance sheet.

There have been favourable developments in the Bank's foreign currency secondary
spreads in recent months which marks investors' increasing confidence in the
Bank and in Iceland's economy. In late October, S&P upgraded Íslandsbanki's
rating to BBB+ on improving operating environment for the Icelandic banking
system following the liberalisation of capital controls and declining private
sector debt.  Íslandsbanki is the only bank in Iceland with a credit rating from
two international rating agencies.

The bonds will be issued under Íslandsbanki's EUR 2,000m Global Medium Term Note
(GMTN) Programme which enables Íslandsbanki to issue bonds in a broad range of
currencies at fixed or floating interest rates. The GMTN Base Prospectus and its
supplements are available at www.islandsbanki.is/ir.

Joint bookrunners on the transaction were Danske Bank, DNB Markets and Pareto
Securities.

Jon Gudni Omarsson, CFO of Íslandsbanki:

"We at Íslandsbanki are very pleased with the transaction and the great interest
we have felt from investors. Many of these investors have benefitted from
investments in Íslandsbanki's senior bonds in recent years and their
participation in this issuance show their continued confidence in the Bank and
the Icelandic economy."

For further information:
  * Investor Relations - Gunnar S. Magnusson, ir@islandsbanki.is and tel:
    +354 440 4665.


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