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

Islandsbanki hf.: Íslandsbanki concludes market making agreement for covered bonds

Íslandsbanki hf. has signed market-making agreements with Arion bank hf., Kvika hf., and Landsbankinn regarding covered bonds issued by Íslandsbanki on NASDAQ Iceland.

The purpose of the agreement is to promote trading with the bonds covered by the agreement in order to increase their liquidity and encourage transparent price formation.

The market makers will place bid and ask orders for the bonds every day. The minimum nominal amount of orders in series other than benchmark series is ISK 20 million. The minimum nominal amount for benchmark series shall be based on the size of each series in accordance with the following table:

Size of series (ISK bn)	Order size (ISK m)
0 – 3	0
3 – 5	20
5 – 10	60
10 +	80

Benchmark series are ISLA CB 21, ISLA CB 23, ISLA CBI 26, ISLA CBI 28 and ISLA CBI 30. 

Individual market makers are released from their obligations on a particular trading day once the trading volume (specified as "AUTO") of that particular market maker totals ISK 500m for all series of covered bonds issued by Íslandsbanki.

The maximum bid-ask spread depends on the number of years to maturity at any given time in accordance with the table below.

Years to maturity	Maximum spread
0 - 6 months	No maximum
6 months - 2 years	0.20%
2 - 4 years	0.30%
4 -6 years	0.35%
6 - 9 years	0.60%
9 -12 years	0.70%
12 - 18 years	1.00%
18 years or more	1.15%

Inflation-linked series that are prohibited from further issuance, according to the Central Bank of Iceland's rule no. 492/2001 on indexation of savings and loans, as subsequently amended, are exempt from the aforementioned obligations on maximum spread.

In conjunction with the market-making agreements, Íslandsbanki will provide the market makers with bond lending facilities under which each market maker can borrow up to 320m in each benchmark series and 80m in other series.

For further information:  Investor Relations - ir@islandsbanki.is.

Íslandsbanki press releases

^{If you wish to receive Íslandsbanki press releases by e-mail please register at: https://www.islandsbanki.is/english/investor-relations/ir-contacts/e-mail-subscription/}

^{About Íslandsbanki
A leader in financial services in Iceland, Íslandsbanki is a universal bank with total assets of ISK 1,230bn and a 25% - 50% market share across all domestic business segments. Building on over 140 years of servicing key industries, Íslandsbanki has developed specific expertise in tourism, seafood and energy related industries. Driven by the vision to be #1 for service, Íslandsbanki’s relationship banking business model is propelled by three business divisions that manage and build relationships with the Bank’ s customers. Íslandsbanki has developed a wide range of online services such as the Íslandsbanki and Kass apps, enabling customers to do their banking whenever and wherever. At the same time, the Bank continues to operate the most efficient branch network in Iceland through its strategically located 14 branches. For the sixth consecutive year, Íslandsbanki led the Icelandic Customer Satisfactory Index for banks in 2018. Íslandsbanki has a BBB+/A-2 rating from S&P Global Ratings. www.islandsbanki.is}

^{Disclaimer
This press release may contain “forward-looking statements,” involving uncertainty and risks that could cause actual results to differ materially from results expressed or implied by the statements. Íslandsbanki hf. undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. It is the investor's responsibility to not place undue reliance on these forward-looking statements which only reflect the date of this press release. Forward-looking statements should not be considered as guarantees or predictions of future events and all forward-looking statements are qualified in their entirety by this cautionary statement.}