Arion Bank hf. - Company Announcement

Arion Bank hf. covered bond tap issue

Yesterday Arion Bank hf. concluded the sale of two inflation-linked covered
bonds listed on Nasdaq OMX Iceland. 

The inflation-linked issue ARION CBI 21 was tapped for an amount of ISK
500,000,000 at a yield of 3.10% and the inflation-linked issue ARION CBI 29 was
tapped for an amount of ISK 1,200,000,000 at a yield of 3.08%. 
Total amount of orders for the tap issue amounted to ISK 3,260,000,000

The bond series are indexed to the CPI and have been admitted to trading on
Nasdaq OMX Iceland. 

Covered bonds are used to finance Arion Bank’s retail mortgage business. Arion
Bank currently offers inflation-linked retail mortgages at 3.80% fixed interest
rate for five years and 3.65% variable interest rate. 

For further information please contact Haraldur Gudni Eidsson of Arion Bank's
Communications division at haraldur.eidsson@arionbanki.is, or tel. +354 444
7108.