Íbúðalánasjóður - Company Announcement

Signing of Agreements Regarding Issuance and Market Making in HFF bonds

Yesterday June 25th, the Housing Financing Fund (HFF) signed agreements
regarding Issuance and Market Making in HFF Bonds. The objective of the
agreements is to enhance the HFF access to borrowed money and strengthen price
formation in the secondary market. 

As of July 1st, 2009, six financial institutions have been appointed as
“Primary Dealers in HFF bonds”. They are: Nýi Glitnir banki hf., Nýi Kaupþing
banki hf., MP banki hf. og NBI hf. The following bullet points describe the
main content of the Agreement: 
Primary Dealers have exclusive rights to submit bids at HFF auctions 

Primary Dealers have exclusive access to HFF Securities Lending Facility.

Primary Dealers are obliged to submit bids in each auction for a minimum amount
of ISK 600  million  at    nominal value. 

Primary Dealers are obliged to quote on OMX Nordic Exchange in Iceland bid and
ask offers for at least   ISK 100 million at nominal value in each HFF bond
classes. 

Primary Dealers are in their bid and ask quotes governed by maximum spreads as
laid out in the agreements. 

Primary Dealers are obliged to renew their offers within ten minutes after
execution of transaction. If the Primary Dealer's total transaction in one
series during that day equals ISK 500 million at nominal value, the Primary
Dealer is permitted to withdraw from the maximum spread requirement for that
particular series for the remainder of that day. 

The agreement is valid from July 1st 2009 to June 30th 2010.
Total remuneration paid to all Primary Dealers is ISK 16. 25 million for the
duration of the agreement for the market making part and 0,15% fee is
determined from the market share of accepted auction bids. 

A sample agreement is attached that provides comprehensive information on the
Primary dealer's rights and obligations

Attachments:

primary dealership_ 2009.pdf