Íslandsbanki has today issued a EUR 300m 1.125% fixed rate senior unsecured bond for 3 years, at a spread of 130 basis points over mid-swaps.

The transaction received substantial interest from investors across Europe and was roughly four times oversubscribed, reflecting investors’ strong confidence in the Bank and the Icelandic economy.

The bond is expected to be listed on the Irish Stock Exchange on 12 April 2019. The bond is issued under Íslandsbanki’s USD 2,500,000,000 GMTN Programme, available at: https://gamli.islandsbanki.is/english/investo...erm-notes/

The bookrunners for the transaction were: BofA Merrill Lynch, Citi, Deutsche Bank and Morgan Stanley.

Simultaneously, the Bank announced an invitation to holders of the Bank’s EUR 500m 1.750% notes which are due on 7 September 2020 (ISIN XS1484148157/148414815) to tender their notes for purchase by the Bank against a cash payment for up to EUR 300m.

The tender offer is subject to the terms and conditions outlined in the Tender Offer Memorandum dated 4 April 2019. The offer is part of Íslandsbanki's continuing efforts to maintain a strong balance sheet position.

The dealer managers for the tender are, again: BofA Merrill Lynch, Citi, Deutsche Bank and Morgan Stanley.

Further information on the tender offer is available in the announcement made public on the Irish Stock Exchange (www.ise.ie) where the bond is listed. Subject to certain selling restrictions, a Tender Offer Memorandum can be obtained from the tender agent: Lucid Issuer Services Limited (e-mail:   islandsbanki@lucid-is.com , tel: +44 20 7704 0880).

For further information:

Investor Relations – Gunnar Magnusson, ir@islandsbanki.is ,  tel +354 440 4665.

Íslandsbanki press releases If you wish to receive Íslandsbanki press releases by e-mail please register at: https://gamli.islandsbanki.is/english/investo...scription/

About Íslandsbanki A leader in financial services in Iceland, Íslandsbanki is a universal bank with total assets of ISK 1,130bn and a 25% - 50% market share across all domestic business segments. Building on over 140 years of servicing key industries, Íslandsbanki has developed specific expertise in tourism, seafood and energy related industries. Driven by the vision to be #1 for service, Íslandsbanki’s relationship banking business model is propelled by three business divisions that manage and build relationships with the Bank’ s customers. Íslandsbanki has developed a wide range of online services such as the Íslandsbanki and Kass apps, enabling customers to do their banking whenever and wherever. At the same time, the Bank continues to operate the most efficient branch network in Iceland through its strategically located 14 branches. For the sixth consecutive year, Íslandsbanki led the Icelandic Customer Satisfactory Index for banks in 2018 and was also named Best Bank of Iceland in 2018 by Euromoney. Íslandsbanki has a BBB+/A-2 rating from S&P Global Ratings.  www.islandsbanki.is

Disclaimer This press release may contain “forward-looking statements,” involving uncertainty and risks that could cause actual results to differ materially from results expressed or implied by the statements. Íslandsbanki hf. undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. It is the investor's responsibility to not place undue reliance on these forward-looking statements which only reflect the date of this press release. Forward-looking statements should not be considered as guarantees or predictions of future events and all forward-looking statements are qualified in their entirety by this cautionary statement.