Íslandsbanki hf. - Company Announcement

Islandsbanki hf.: Íslandsbanki concludes covered bond offering

Íslandsbanki hf. has today concluded an offering of covered bonds.

The non-indexed issue ISLA CB 23 was sold for an amount of ISK 1,480m at a yield
of 5.72%.

The CPI-linked issue ISLA CBI 22 was sold for an amount of ISK 760m at a yield
of 3.34%.

The CPI-linked issue ISLA CBI 26 was sold for an amount of ISK 2,040m at a yield
of 3.22%.

Total demand amounted to ISK 4,580m.

Trading is expected to commence on 18 November 2016 on Nasdaq Iceland.

In connection with the auction, a bond exchange offering took place where
holders of the CPI-linked ISLA CBI 16 could sell the bonds in the series against
bonds bought in the above-mentioned auction. The nominal of the exchange was ISK
1,280m.

So far this year Íslandsbanki has issued covered bonds in the amount of ISK
18,000m. The total nominal amount of outstanding covered bonds issued by
Íslandsbanki will be to ISK 65,420m.

For further information:

  * Investor Relations - Tinna Molphy, ir@islandsbanki.is and tel:
    +354 440 3187.
  * Public Relations - Edda Hermannsdóttir, pr@islandsbanki.is and tel:
    +354 440 4005.


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