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

Landsbankinn hf. : Landsbankinn pays outstanding amount on LBI ehf. bonds in full

Landsbankinn has today paid in full the outstanding amounts on bonds issued to
Old Landsbanki Íslands, now LBI ehf., as a consideration for the assets and
liabilities transferred from LBI to the Bank in October 2008. On the payback
date, the outstanding amount was ISK 16.2 bn; upon issuance to LBI, the total
amount of the bonds was ISK 350 bn, at the then current exchange rate.

Discharging the debt to LBI in full allows Landsbankinn to lower its financing
cost and lift the collateralisation of assets securing the bonds.

Lilja Björk Einarsdóttir, CEO of Landsbankinn:

"The successful operation and favourable financing of Landsbankinn, coinciding
with improving economic conditions, have allowed the Bank to discharge the debt
owed to LBI significantly faster than expected. While the outstanding amount on
the debt owed to LBI was not very high, full payment of it is quite a turning
point. The debt to LBI was originally quite considerable, all in foreign
currency and the repayment period short. Landsbankinn's terms on international
financing markets grow steadily more favourable and discharging the less
favourable bonds to LBI allows the Bank to save a significant amount on
financing cost."



Original maturity in 2018 extended to 2026 by agreement

The bond issuances between LBI and Landsbankinn were based on an agreement that
accorded with decisions of the Icelandic Financial Supervisory Authority (FME)
in October of 2008, on the transfer of assets and liabilities from Landsbanki
Íslands hf. to Landsbankinn. The bonds were in foreign currency and the original
maturity date was October 2018. The improving position of Landsbankinn and
recovery of the Icelandic economy quickly created room to make pre-payment on
the debt and the Bank made ISK 70 bn and ISK 50 bn pre-payments in 2012 and
2013, respectively. It was nevertheless considered necessary to amend the
repayment terms of the bonds. Extending the maturity profile supported the
easing of capital controls, reduced uncertainty about the Bank's foreign funding
and improved its capital structure for the future. In May 2014, Landsbankinn and
the Winding-up Board of LBI agreed on amendments to the bond terms. The maturity
date was pushed back to October 2026 and the Bank authorised to make pre-
payment, in part or in full, without incurring any additional cost, at any time
during the period.


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