Lánamál ríkisins - Company Announcement

Iceland Outlook Revised To Positive On Strong Growth And Improving Public Finances; 'BBB-/A-3' Ratings Affirmed

On July 18, 2014, Standard & Poor's Ratings Services revised its outlook on the
Republic of Iceland to positive from stable. At the same time, the rating
agency affirmed 'BBB-/A-3' long- and short-term foreign and local currency
sovereign credit ratings on Iceland. 

Overview:

·         Standard & Poor‘s expects growth in the Republic of Iceland to
average close to 3% during 2014-2017, supported by improving domestic demand. 

·         Net general government debt projected to decline to 61% of GDP in
2017from 71% in 2014. 

·         The outlook revision reflects the view that there is a more than
one-in-three likelihood that could raise the ratings within the next 24 months
if Iceland's growth performance remains strong and broad-based, while fiscal
improvements continue.

Attachments:

SP_Iceland Jul 2014.pdf