Lánamál ríkisins - Company Announcement

Auction of Treasury Notes

On Wednesday, 3 December at 14:00 the Central Bank of Iceland on behalf of the
Treasury will conduct an auction of non-indexed Treasury Notes. 

This is a series of Treasury Notes, RIKB 10 0317, with an annual coupon of
7,00% and a final maturity date on March 17, 2010. 

The Central Bank reserves the right to accept all of the submitted bids, 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 Dutch auction, which means that all
accepted bids will be offered to primary dealers at the same price. The lowest
accepted price will determine the selling price. In other respects, reference
is made to the Terms of Invitation to Tender, which accompany this press
release. 

The payment and settlement date is Friday, December 12, 2008, that is the same
date as the redemption date of RIKB 08 1212. 

For this auction, the Central Bank requests bids for the following series: 

Series	         		
RIKB 10 0317

Maturity date
Mar. 17, 2010

Outstanding amount			
36,349 m.kr.

Time to maturity
1,3 years

After the results of the auction are available, the Central Bank will offer
primary dealers the equivalent of 10% of the nominal value sold in the auction,
at the yield of accepted bids, until Friday, 5 December at 14:00. 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 for these transactions is December 12, 2008. 

On December 10, The Central Bank is expecting to hold another auction for a new
2 year series of Treasury Notes. 

Further information can be obtained from Bjorgvin Sighvatsson, International
and Market Department, Central Bank of Iceland, at +354 569 9633.

Attachments:

terms28nov.pdf

bloom28nov.pdf

frett28noven08.pdf