Lánamál ríkisins - Company Announcement

Auction of nominal and inflation linked bonds RIKB 16 1013 & RIKS 21 0414

On Friday, 22 October at 11:00 the Government Debt Management will conduct an
auction of two series of Treasury bonds. 

A new sex-year nominal bonds, RIKB 16 1013, will be offered. The bonds are
interest-bearing and pay 6.00% interest rate annually every 13 October. The
maturity date is 13 October 2016.  Description of the bond is attached to this
press release and further information can be obtained from the website
www.ndma.is. In this auction inflation linked bonds, RIKS 21 0414, will be
offered as well. 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. 

The payment and settlement date is Wednesday, October 27, 2010. 

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, October 26, 2010. 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 27 October 2010. 

Attachments:

news_rikb_riks_101019.pdf

description of rikb 16 1013.pdf

auction terms rikb _riks 101019.pdf