Lánamál ríkisins - Company Announcement

Auction of nominal bonds RIKB 14 0314

On Friday, 9 March at 11:00 am, Government Debt Management will conduct an
auction of Treasury bonds. 

A new two-year nominal bonds, RIKB 14 0314, will be offered. The bonds are
interest-bearing and pay 4.75% interest rate annually every 14 March. The
maturity date is 14 March 2014. Description of the bond is attached to this
press release and further information can be obtained from the website
www.ndma.is. The total amount of accepted bids will be announced after the
auction. 

The GDM reserves the right to accept all of the submitted bids, accept part of
them, or reject all of them. Only primary dealers in Treasury 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. nominal value. 

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

After the results of the auction are available, the GDM 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 March 2012. 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 is Wednesday, 14 March 2012.

Bonds sold in the auction on 9 March 2012 are expected to be admitted to
trading on NASDAQ OMX ICELAND on 15 March 2012.

Attachments:

Description of RIKB140314.pdf

Auctionterms _120306.pdf

News_120306.pdf