SOURCE: Glitnir

June 13, 2006 04:55 ET

Glitnir Bank issues US$ 500 million subordinated bonds

REYKJAVIK, ICELAND -- (MARKET WIRE) -- June 13, 2006 --



Reykjavík 13th of June 2006: Yesterday, Glitnir Bank issued US$ 500 million subordinated bonds, the equivalent of ISK 37 billion. The issue classifies as Tier 2 capital and is for a term of 10 years, and may be called by Glitnir after 5 years. The terms of the transaction are 175 basis points over 5 year US treasury bonds, or equivalent to 123 basis points over LIBOR.

The overwhelming majority of the bonds, which were issued in a 144A format, were sold to US institutional investors. Total demand amounted to US$ 1,400 million (equivalent to ISK 104 billion) which is substantial oversubscription. The transaction was arranged by UBS and Credit Suisse.

"This subordinated issue will further strengthen the Bank's capital base and liquidity position," says Bjarni Ármannsson, CEO of Glitnir Bank. "Increased financial strength gives the Bank further solidity during market fluctuations. We are pleased with the level and the strong investors' demand - which exceeded our expectations. The solid credit ratings that we have received from all the major credit rating agencies stand us in good stead. We highly appreciate the trust and commitment that investors have shown in our credit."


For further information: Tómas Kristjánsson, CFO, at +354 440 4656, or e-mail tomas.kristjansson@glitnir.is.





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