Today, 4 December 2014, the agreement between LBI hf. and Landsbankinn hf. (“LB”) to extend and amend LB’s bond obligations to LBI took effect, whereby new bonds were issued to LBI by LB and a new pledge agreement covering the bonds was executed. Simultaneous to the bonds issuance, LB paid to LBI the equivalent of ISK 30bn in foreign currencies toward its debt to LBI.

According to the new terms, repayment of the remaining outstanding debt towards LBI, which is equivalent to ca. ISK 196bn, will be met by a series of ten bonds issued in euros, pounds sterling, and US dollars with maturities in 2016, 2018, 2020, 2022, 2024, and 2026. In 2018, under certain conditions, LB has an option to extend the maturities for certain amounts of bonds maturing in 2018 and 2020, although to no later than the longest maturity.

Completion under the aforementioned extension and amendment agreement was effected on the basis that LBI has been granted exemptions from the capital controls according to clause 13 and in line with clause 7 of Act No. 87/1992 on Foreign Exchange, to pay priority creditors according to authorisation from article 6, clause 102 from Act No. 161/2002 on Financial Undertakings, in addition to a commitment for further exemptions from the capital controls in the same order.