Íslandsbanki hf. - Company Announcement

Islandsbanki hf.: Sells covered bonds and commercial paper

Íslandsbanki hf. has today concluded an offering of covered bonds and commercial
paper.

The CPI-linked issue ISLA CBI 26 was sold for an amount of ISK 0.98bn at the
real yield of 3.31%.Total demand amounted to ISK 1.06bn.

Following the transaction the total size of ISLA CBI 26 will be ISK 12.88bn and
the total nominal amount of outstanding covered bonds issued by Íslandsbanki
will amount to ISK 65.21bn.

The  nominal amount sold in commercial paper series ISLA 16 0915 was ISK 1.46bn
at  the simple rate of 6.45% (price 98.3957) and sold in series ISLA 16 1215 was
ISK  0.4bn at  the  simple  rate  of  6.40% (price  96.8659). Total  demand  for
commercial paper amounted to ISK 4.08bn.

Following  this  transaction  the  total  outstanding commercial paper issued by
Íslandsbanki will amount to ISK 9.84bn.

Trading is expected to commence on 16 June 2016 on Nasdaq Iceland.

For further information:

  * Investor Relations - Tinna Molphy, ir@islandsbanki.is and tel:
    +354 440 3187.
  * Public Relations - Edda Hermannsdóttir, pr@islandsbanki.is and tel:
    +354 440 4005.


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