Lánamál ríkisins - Company Announcement

Standard and Poor's upgrades Iceland's rating

Standard & Poor's Ratings Services has raised its long- and short-term foreign
and local currency sovereign credit ratings on the Republic of Iceland to
‘BBB/A-2' from 'BBB-/A-3'. The outlook is Stable. 

S&P states that the upgrade is based on credible government proposals towards
eventual lifting of capital controls. The proposals will address the country's
sizable balance-of-payments vulnerability by relieving the latent pressure on
the Icelandic krona (ISK) exchange rate. As a result, foreign investor
sentiment will strengthen and nonsovereign borrowers' access to international
capital markets will improve. The measures will lead to sizable one-off fiscal
revenues for the government. The upgrade is premised on the assumption that any
such proceeds will be used to pay down government debt and therefore not spent
in a way that could contribute to economic overheating.

Attachments:

SP Iceland press-release 17 July 2015.pdf