Lánamál ríkisins - Company Announcement

The Republic of Iceland announces an invitation for offers to prepay Securities

Iceland is offering to purchase at par any or all of the Securities maturing in
2011 and 2012. 

Purchasing these Securities is sound debt and liquidity management for Iceland.

A referendum on the act in relation to providing a State guarantee of the
so-called "Icesave agreement" (the "Act") was held in Iceland on Saturday 9
April 2011. The result of the referendum is now clear; the Act has been
rejected by the majority of the voters. The outcome of the referendum, or the
resolution of the disputed amount (ca. €3.98bn), will not affect the
commencement of payments by the estate of Landsbanki Íslands hf., to priority
claimants such as the British and Dutch deposit guarantee funds. Based on
figures from the estate of Landsbanki Íslands hf, it is expected that deposit
claim holders will receive €3.93bn in 2011 and 2012 and a total of €7.64bn as
the estate is liquidated. 

Given the current size of its foreign reserves, the Republic of Iceland is well
placed to covering its external maturities resulting from contractual
obligations in the coming years (including the approximately €800 million of
securities maturing in 2011 and 2012). The Invitation demonstrates the Republic
of Iceland's ability to cover the maturities of the Securities and provides
liquidity to participants in the Invitation. In addition, the Republic of
Iceland notes recent announcements by leading international rating agencies,
and the Invitation provides the means by which Holders can dispose of their
Securities at par in an orderly manner if they wish to do so, in light of such
recent announcements. 

Please find attached the Invitation Notice

Liitteet:

Iceland Invitation Notice.pdf