Lánamál ríkisins - Company Announcement

Auction of nominal bonds RIKB 17 0206

On Friday, 6 February at 11:00 am, Government Debt Management will conduct an
auction of Treasury bonds. 

A new two-year nominal bonds, RIKB 17 0206, will be offered. The bonds are
interest-bearing and pay 5.00% interest rate annually every 6 February. The
maturity date is 6 February 2017. Description of the bond is attached to this
press release and further information can be obtained from the website
www.gdm.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, 10 February 2015. 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, 11 February 2015.

Bonds sold in the auction on 6 February 2015 are expected to be admitted to
trading on NASDAQ ICELAND on 12 February 2015. 



                                EXCHANGE AUCTION

In this auction, the parties have the option of purchasing bonds in RIKB 17
0206 with the sale of RIKB 15 0408, which matures on 8 April 2015. Government
Debt Management will purchase RIKB 15 0408 at a pre-determined price - that is,
at a clean price of 99.941 (103.750589 with accrued interest per 100 nominal
value) - with settlement on 11 February 2015. To clarify, this price is
equivalent to 4.71% flat interest. The value of these securities, together with
accrued interest, will constitute payment for the new securities. Those who
want to use RIKB 15 0408 as a payment in the auction, must inform the GDM no
later than 14:00 on Tuesday, 10 February 2015. 

Investors that own RIKB 15 0408 and are interested in reinvesting in other
Treasury bonds are particularly encouraged to participate in this auction by
contacting their nearest bank. 

For further information please contact Oddgeir Gunnarsson, GDM, at +354 569
9635.

Attachments:

Auctionterms _6.Feb.15.pdf

Description of RIKB 17 0206.pdf

News_4.Feb.15.pdf