Íslandsbanki hf. - Company Announcement

Islandsbanki hf. :Two covered bond tap issuances on NASDAQ OMX Iceland

Íslandsbanki hf. has today concluded an offering of three outstanding issuances
of covered bonds; ISLA CBI 19, ISLA CBI 24 and ISLA CB 15 that are listed on
NASDAQ OMX Iceland.  The 7 year CPI-linked issuance, ISLA CBI 19, was tapped for
an amount of ISK 590,000,000 at a real yield of 2.72% and the 12 year CPI-linked
issuance, ISLA CBI 24, was tapped for an amount of ISK 1,410,000,000 at a real
yield of 3.13%.  The non-indexed three year issuance, ISLA CB 15, was not tapped
at this time.

Following these latest issuances the total amount issued in ISLA CBI 19 and ISLA
CBI 24 has now reached ISK 3,450,000,000 and ISK 4,710,000,000 respectively. In
total, Íslandsbanki has now issued covered bonds amounting to ISK
13,400,000,000 since its inaugural issuance in December 2011.

Sold to a broad group of institutional investors, total appetite for the tap
issuances amounted to ISK 3,240,000,000, of which 62% of offers were accepted,
or for the amount of ISK 2,000,000,000.

Trading is expected to commence on 20 December 2012 on the NASDAQ OMX Iceland.
Market making for all of Íslandsbanki's covered bond issues is in the hands of
MP banki.

The bonds are issued under Act 11/ 2008 on Covered Bonds which obliges the
issuer to fulfil strict requirements, whereby the underlying cover pool must
withstand a weekly stress test with regards to interest rates and exchange
rates. The issuances are regulated by the Icelandic Financial Supervisory
Authority which additionally appoints an independent inspector to monitor the
issuances. Special cover pool reports on the covered bond issuances are
published quarterly and can be found on Íslandsbanki's web.



For further information:

  * Investor Relations - Johann Wathne, johann.wathne@islandsbanki.is and tel:
    +354 440 4607.
  * Media Relations - Guðný Helga Herbertsdóttir,
    gudny.helga.herbertsdottir@islandsbanki.is and tel: +354 440 3678 / mob:
    +354 844 3678.


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