Straumur-Burðarás Fjárfestingabanki hf. - Company Announcement

Straumur-Burdaras Investment bank hf ("Straumur") has entered into a market-making agreement with the Housing Financing Fund and the Central Bank of Iceland on behalf of the State Treasury

18 December 2008

The goal of the agreement with the Housing Financing Fund (HFF) is to
strengthen price formation of housing bonds and to facilitate
increased liquidity on the secondary market.

The agreement entails that Straumur is obligated to present an offer
at a minimum of ISK 300 million at nominal value for each auction of
the Housing Financing Fund. Straumur is obligated to present on the
secondary market (OMX Nordic Exchange Iceland) purchase and sales
offers at a minimum of ISK 50 million at nominal value and to renew
them within 10 minutes from such time they have been accepted. The
maximum spread between purchase and sales offers is as follows,
according to the housing-bond series:

HFF 14: 0.50%
HFF 24: 0.75%
HFF 34: 0.85%
HFF 44: 0.95%

If Straumur has engaged in trading in one day in the amount of ISK
300 million at nominal value, Straumur is authorized to deviate from
the maximum spread in the purchase and sales offers.

The goal of the agreement with the Central Bank of Iceland is to
maintain access by the National Treasury to loan capital and to
strengthen price formation of government bonds on the market.

The agreement entails Straumur being obligated to present an offer at
a minimum of ISK 100 million at nominal value in every auction of
government bonds. Straumur is obligated to present on the secondary
market (OMX Nordic Exchange Iceland) purchase and sales offers at a
minimum of ISK 50 million at nominal value and to renew them within
10 minutes from such time they have been accepted. The maximum spread
between purchase and sales offers is as follows, according to the
series of government bonds:

Maturation 3-6 months: 0.10%
Maturation 6-12 months: 0.15%
Maturation 1-2 years: 0.20%
Maturation 2-4 years: 0.30%
Maturation 4-6 years: 0.40%
Maturation 6-9 years: 0.70%
Maturation 9 years or more: 0.90%

In instances of the Maturation being three (3) months or less,
Straumur is only obligated to present purchase offers.

If Straumur has engaged in trading in one day in the amount of ISK
300 million at nominal value, Straumur is authorized to deviate from
the maximum difference in the purchase and sales offers.

For further information contact;
Georg Andersen
Head of Corporate Communications
Mobile: +354 858 6707
georg@straumur.com