Landsvirkjun

Landsvirkjun issues USD and JPY bonds on favourable terms

8. February 2008

The loan term on the USD bond is 10 years, and the German bank Depfa is responsible for the supervision of the issue. The loan term of the JPY bond is three years, and the Japanese bank Mizuho International is responsible for the supervision of the issue. The terms of these issues correspond to USD LIBOR with the addition of a 15- to 20-point margin.

Conditions on the loan market have not, in general, been advantageous since August 2007 when the effects of the US housing loan crises began to be felt. Financial companies have had to write-off considerable amounts, and difficulties in the US economy have spilled over to other markets. As a result, there has been considerable risk aversion on the markets and investors have held back.

Despite these adverse external circumstances, Landsvirkjun issued bonds, as stated earlier, on extremely favourable terms which are far under the CDSs that Icelandic entities currently enjoy on overseas loan markets. Financing for 2008, therefore, is off to a good start.

The company’s total financing need for 2008 is approximately USD 600 million. Following these loans, Landsvirkjun has sufficient secure liquid funds to last throughout 2009, or for 24 months.

For further information, please contact Davíd Ólafur Ingimarsson, Head of Funding, in phone no. 515-9233, or e-mail: davidi@lv.is.

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