Íbúðalánasjóður - Company Announcement

Announcement Regarding a Meeting with Market Makers for HFF Bonds

On May 21st, 2010,  employees of the Housing Financing Fund (HFF)  met with its
current market makers for HFF bonds in order to renew agreements on a primary
dealership system for HFF bond auction and market making of HFF bonds in the
secondary market. The new agreements are planned to take effect on July 1st,
2010.  Certain changes were discussed at the meeting and are as follows: 

Since it is impossible for HFF to increase issuance in bond series HFF150914
due to current regulations on loan indexation, market makers for that series
will only have to submit bids, starting on October 1st, 2010. 

In the event of a new HFF bond series to be issued during the term of the
agreement, market making of that series is anticipated.  Undecided features
regarding the expected bond series include; the term of the bond, whether or
not it should include a prepayment clause and whether or not it should be
indexed to the CPI (Consumer Price Index). 

The commission paid to market makers in HFF bond auctions is expected to
increase by 0.05%, or from 0.15% to 0.20%. 

Also, the spread between bid and sales quotes will probably be lowered by
0.05%, for each series. 
The agreements have not yet been signed, but the expected date for signing is
at beginning of June 2010. 
For further information, please contact Ívar Ragnarsson or Herdís Einarsdóttir
at 569-6993.