Moody's downgrades Kaupthing Bank's credit rating to Aa3


The international credit rating agency Moody's Investors Service has downgraded
Kaupthing Banks' credit rating. The Bank's long-term deposits and senior debt
ratings in local and foreign currencies have been downgraded from Aaa, the
highest possible rating assigned by Moody's, to Aa3. This change comes in the
wake of a review of Moody's "JDA" methodology. 

The Bank's ratings for short-term obligations in local and foreign currencies,
P-1, which is the highest rating given by Moody's, remains unchanged. The
Bank's rating for financial strength, C, also remains unchanged. 

The downgrade in credit rating comes in the wake of an upgrade of the credit
rating on 23 February of this year, which increased Moody's credit rating for
Kaupthing Bank by four credit rating categories. This was based on Moody's new
joint default analysis (JDA) methodology, which takes into account potential
sources of external support for banks. Following a criticism that was levelled
at Moody's JDA methodology, Moody's credit rating for Kaupthing, and many other
banks, has been revised with the aforementioned results. 

Further information:
Gudni Adalsteinsson - Chief Treasurer, + 354 444-6126
Jónas Sigurgeirsson - Chief Communications Officer, +354 444-6112