Arion Bank hf. - Company Announcement

Arion Bank completes its first international bond offering

Today Arion Bank completed a bond offering in Norwegian kroner in a deal
arranged by Pareto Öhman. The Bank sold bonds for NOK 500 million (ISK 11.2
billion) that were placed with around 60 investors in Norway, Sweden, Finland,
the United Kingdom, continental Europe and Asia. The bond offering was
oversubscribed. This is the first time the Bank has raised funding on the
international markets and it is also the first international bond offering by
an Icelandic financial company since 2007.  Prior to the offering the Bank
embarked on an extensive roadshow, meeting investors in Norway, Sweden, Finland
and in the UK. 

The aim is to list the bonds on the Norwegian stock exchange. The bonds are
floating rate notes with NIBOR plus 5.00% floating interest, maturing in 2016. 


Höskuldur H. Ólafsson, CEO of Arion Bank:

“This is an important moment for us and is the first step towards opening up
the international markets. I think it is safe to say that it represents an
important milestone in the regeneration of the Icelandic economy. But we must
remember that it is only one of many stages in the process of making the
international capital markets accessible for Icelandic companies. 

This bond issue is acknowledgement of the efforts made here in recent years
both inside and outside the Bank. While the recent upgrading of Iceland's
credit rating and the conclusion of the Icesave dispute have had a positive
impact, these investors would not have participated in the bond offering if
they did not have faith in Arion Bank and its future.   The success of the bond
offering is a result of the concerted efforts in recent years to build and
strengthen the Bank. 

Since it was established, Arion Bank has sought to keep international financial
institutions and investors informed of the Bank's progress. We intensified our
efforts with regard to funding in 2012 as our objective has been to diversify
the Bank's funding base. We have concentrated on building our reputation and
the fruits of our labour are beginning to show.” 



For further information please contact:
Haraldur Gudni Eidsson, Arion Bank's Corporate Communications,
haraldur.eidsson@arionbanki.is. Tel. +354 856 7108