Arion Bank hf. - Company Announcement

Arion Bank issues bonds in euros

On Tuesday 19 April, Arion Bank issued new senior unsecured bonds for a total
of €300 million. Orders totaling over €500 million from more than 70 investors
were received. The 3-year bonds have a fixed coupon of 2.50% and were sold at
rates corresponding to a 2.70% margin over interbank rates. This represents the
second euro benchmark issue by Arion Bank. 

Arion Bank mandated Barclays, J.P. Morgan and Nomura for the transaction, which
followed a 3-day roadshow with European investors. Credit markets have been
improving recently and following the Bank's strong annual financial results it
was considered the right time for a bond issue of this size. 

The aim is to use some of the proceeds to pay down other funding as well as
supporting corporate clients of the Bank in need of international funding. 

This bond issuance is the next step in a targeted effort to diversify funding
in recent years. In March 2015 Arion Bank became the first Icelandic bank to
issue bonds in the euro market in benchmark size. Arion Bank is rated BBB- with
a positive outlook by Standard & Poor’s. 

Höskuldur H. Ólafsson, CEO of Arion Bank:

“Over the past few years we have made a targeted effort to introduce Arion Bank
and the Icelandic economy to international investors in order to gain better
access to the international credit markets. We have made good progress as
developments at the Bank and in the economy have generally been very positive.
We are therefore delighted to issue our second euro benchmark. This will prove
beneficial to those customers of ours who require international funding and
important for the economy as a whole as it further confirms that Icelandic
banks are able to access the international credit markets at a lower cost.” 

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