Islandsbanki hf. : Covered bond issues


Íslandsbanki hf. has concluded an auction of CPI-linked covered bonds listed on
NASDAQ OMX Iceland where ISLA CBI 20 was tapped for an amount of ISK
1,140,000,000 at a nominal yield of 3.50%.

Following this latest issue, the total amount issued in ISLA CBI 20 has reached
ISK 2.1bn. In total, Íslandsbanki has now issued covered bonds amounting to ISK
29.47bn since its inaugural issue in December 2011.

Sold to a broad group of investors, total appetite for the issue amounted to ISK
1.48bn, of which 77% of the offers were accepted. Trading is expected to
commence on 22 September 2014 on the NASDAQ OMX Iceland. Market making for all
of Íslandsbanki's covered bond issues is in the hands of MP bank.

The bonds are issued under Act 11/2008 on Covered Bonds which obliges the issuer
to fulfil strict requirements, whereby the underlying cover pool must withstand
a weekly stress test with regards to interest rates and exchange rates. The
issuances are regulated by the Icelandic Financial Supervisory Authority which
additionally appoints an independent inspector to monitor the issuances. Special
cover pool reports on the covered bond issuances are published quarterly and can
be found on Íslandsbanki's web.

For further information:

  * Investor Relations - Tinna Molphy, tinna.molphy@islandsbanki.is and tel:
    +354 440 3187.
  * Media Relations - Dögg Hjaltalín, dogg.hjaltalin@islandsbanki.is and tel:
    +354 440 3925.


[HUG#1856052]