Landsbankinn hf. - Company Announcement

Landsbankinn issues bonds in euros

Landsbankinn hf. has today issued €300 million of senior unsecured bonds,
equivalent to around ISK 43 billion.  The bonds have a 3 year maturity with a
fixed 3.00% coupon and were priced at terms equivalent to 295 basis point
spread above mid-swaps in euros. 

In September 2015, Landsbankinn mandated Citi, Deutsche Bank and J.P. Morgan to
prepare such an issuance.  A series of fixed income investor meetings were held
from 21 to 25 September 2015 in Copenhagen, Oslo, Helsinki, Stockholm and
London.  The bonds were sold to institutional investors and the final order
book amounted to € 470 million from almost 60 investors.  The bonds are issued
under Landsbankinn's Euro 1 billion Medium Term Note (EMTN) Programme and will
be listed on the Irish Stock Exchange. 

Landsbankinn will use the proceeds to make early repayments on senior secured
bonds in foreign currencies that mature in October 2016 and partially on bonds
that mature in October 2018, as announced by the bank on 18 September 2015. 

Landsbankinn will continue to broaden and strengthen the bank's funding in
foreign currencies, inter alia with the purpose of refinancing the bank's
outstanding senior secured bonds at more favorable terms.  Following today's
issuance, but subject to the winding-up board of LBI hf. finalizing a winding
up through a composition agreement and payment of stability contribution,
Landsbankinn will also prepay the remaining outstanding amounts of the 2018
senior secured bonds in foreign currencies, in total equivalent to around ISK
22 billion.  From the time of prepayment, LBI hf. will invest the proceeds as
foreign currency term deposits at Landsbankinn, maturing in October 2018 and at
terms equal to 150 basis point above interbank rates. 

Steinþór Pálsson, CEO of Landsbankinn:

„Today's issuance is an enjoyable milestone and very important for Landsbankinn
in terms of broadening and strengthening the bank's funding in foreign
currencies.  Landsbankinn's access to foreign capital markets is, inter alia,
based on the bank's strong financial position that is reflected in that this
summer the credit rating agency Standard & Poor's upgraded Landsbankinn's
credit rating to BBB-, with a positive outlook.” 

Detailed information about Landsbankinn for investors and others stakeholders
are available at: http://corporate.landsbankinn.com/investor-relations/ 

Further information:

Investor relations:  Hanna K. Thoroddsen ; ir@landsbankinn.is ; Tel: +354 410
7100