Announcement from LBI hf.

Last Monday LB issued bonds under its Euro Medium Term Note (EMTN) program of total EUR 300m.  In accordance with LBI‘s and LB‘s agreement from 18 September 2015 LB will use the proceeds from this Bond issuance to prepay (i) LB Bond tranches B1, B2 and B3 with maturity 9 October 2016 and (ii) 45% of LB Bond tranches C1, C2 and C3 with maturity 9 October 2018.   LB‘s prepayment is expected to happen within the next 3-4 days.     

Pursuant to the aforementioned agreement LB also intends to purchase the Landsvirkjun bond on market terms prior to 31 December 2015.  For practical reasons this intended transaction is in the form of a call option for LB until 2 November 2015 at the agreed price, but from that day LBI has a put option on LB at the same price.    

Based on these developments, and the fact that the Avens replacements Bonds were fully repaid in July, as previously reported, LBI‘s assumptions with respect to funding full payment of remaining Article 112 priority claims are on track. 

Discussions with CBI on LBI‘s Stability Contribution are well advanced and close to be finalised. 

Today LBI has launched the composition documents (which include an English translation of the Composition Proposal and the Information Memorandum along with its appendices).  Creditors can expect to receive the documents in the next few days in addition to login credentials to a secured website set up for the composition process. 

As is provided for by law LBI now awaits (i) CBI‘s assessment of the economic impact of the composition proposal and its effects on stability in exchange rate and monetary affairs and on financial stability and (ii) CBI‘s approval on LBI‘s exemption request on the composition proposal. 

As was announced 9 October 2015 LBI intends to hold a creditor meeting to vote on the intended composition proposal on 17 November 2015.  A formal publication will be issued no later than two weeks prior to the day of the meeting, as provided for in the Bankruptcy Act.

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