Lánamál ríkisins - Company Announcement

Auction of inflation-linked Treasury bonds. New series RIKS 21 0414

On Friday 9 April 2010, at 14:00, the Central Bank of Iceland will conduct an
auction of Inflation-linked Treasury Bonds. 

This is a new series of Treasury Bonds, RIKS 21 0414, which will pay interest
each year on 14 April. The maturity date of the Bonds is 14 April 2021. The
real coupon rate will be determined following the auction. 

Only primary dealers in Government securities are authorised to submit bids in
this auction. They also submit bids on behalf of investors. The minimum amount
of each bid is 1 m.kr. It is appropriate to emphasise that this is not a price
auction, as has been the case previously. Bids for this auction shall be
expressed as yields, with two decimal places. 

The auction will be structured as a single-price auction, which means that all
accepted bids will be offered to primary dealers at the same yield. The highest
accepted yield will determine the selling price. In other respects, reference
is made to the Terms of Invitation to Tender, which accompany this press
release. 

The payment and settlement date is Wednesday 14 April 2010.

After the results of the auction are available, the Central Bank will offer
primary dealers the equivalent of 10% of the nominal value sold in the auction,
at the price of accepted bids, until 14:00 on Tuesday 13 April. Each primary
dealer that has submitted an accepted bid in the auction has the right to
purchase an amount proportional to its total purchase. The payment and
settlement date for these transactions is 14 April 2010. 

The results of the auction will be published before opening of the next
business day. 

Further information can be obtained from Björgvin Sighvatsson, International
and Market Department, Central Bank of Iceland, at +354 569 9633. 

Attachments:

auction terms rikb210414 31march.pdf

description of riks 21 0414.pdf