Arion Bank hf. - Company Announcement

Arion Bank completes covered bond tap issue

Arion Bank completed an offering of non-indexed covered bonds, Arion CB 22,
yesterday. The series is listed on Nasdaq OMX Iceland. 

Offers for ARION CB 22 totalling ISK 3,500,000,000 were received and offers
worth ISK 3,340,000,000 million were accepted at a yield of 6.50%. In addition
bonds totalling ISK 960,000,000 were issued in respect of securities loans to
market makers. Following the offering the total size of the series is ISK
8,600,000,000. 

At the same time Arion Bank bought back bonds in the inflation-indexed series
ARION CBI 19 of ISK 120.000.000 and ARION CBI 34 of ISK 240.000.000 at nominal
value in each series. This was in fulfilment of the market making agreements
which were recently reached with Landsbankinn hf, MP Straumur and Íslandsbanki
hf. 

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