Islandsbanki hf. : Covered bond tap issues


Íslandsbanki hf. has tapped into outstanding issues of covered bonds listed on
Nasdaq Iceland.  The non-indexed issue ISLA CB 15 was tapped for an amount of
ISK 750,000,000 at a nominal yield of 5.75% and the CPI-linked issue ISLA CBI
24 was tapped for an amount of ISK 660,000,000 at a real yield of 3.50%. No bids
were accepted for the CPI-linked issue ISLA CBI 20.

Following these latest issues, the total amount issued in ISLA CB 15 has reached
ISK 4.67 bn and ISLA CBI 24 has reached ISK 9.40bn. In total, Íslandsbanki has
now issued covered bonds amounting to ISK 32.09bn since its inaugural issue in
December 2011.

Sold to a broad group of investors, total appetite for the tap issue amounted to
ISK 2.69bn, of which 52% of the offers were accepted. Trading is expected to
commence on 4 December 2014 on Nasdaq 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 - Guðbjörg Birna Björnsdóttir, ir@islandsbanki.is and
    tel: +354 440 4752.
  * Media Relations - Guðný Helga Herbertsdóttir, pr@islandsbanki.is and tel:
    +354 844 3678.


[HUG#1874965]