Pursuant to Condition 9.2(a) of the Convertible Notes due 2035, LBI ehf. hereby gives notice of its intention to make an unscheduled payment in respect of the Convertible Notes on 21 July 2017 in an amount currently estimated to be €147 million.

The principal source of cash for this payment is the partial prepayment of Landsbankinn Bonds, which was received by LBI on 22 June 2017.

In accordance with the terms and conditions of the Convertible Notes, further detail will be provided on 10 July 2017.

On 22 June 2017, Landsbankinn fully prepaid the outstanding balance under Bond Series 2024 of USD 160 million and has thereby fully repaid all outstanding Bonds owed to LBI. The prepayment totals USD 161.33 million, including accrued and unpaid interest (EUR 144.7 million at the exchange rate of 22 June 2017). LBI expects to announce an unscheduled payment in partial redemption of the Convertible Notes shortly.

Pursuant to 9.1(c) of the Conditions, and in furtherance of the Payment Notice issued on the 2 June 2017, the Issuer hereby notifies the Noteholders that the final amount of Euro Equivalent Available Cash paid on the 15 June 2017 will be €43,615,742.

Terms defined in this notice shall be constructed in accordance with the conditions set out in the Schedule 1 to the Trust Deed, dated March 23rd, 2016 and made between the Issuer, the Trustee and the U.S. Trustee (the “Conditions“) (as amended in a noteholder meeting on 28 November 2016).

Pursuant to the Condition 9.1(b) of the Conditions, the Issuer hereby notifies the Noteholders of a payment which will be applied in partial redemption of the Notes on the Payment Date of 15 June 2017. The estimated Euro Equivalent Available Cash for this payment is € 43,888,508.

Glitnir HoldCo ehf. („Glitnir“) and LBI ehf. („LBI“) have signed a settlement agreement concerning a disputed guarantee granted by Glitnir to LBI in relation to a loan which LBI made to a company called Stytta ehf. The dispute concerned a claim that LBI lodged in the winding-up proceedings of Glitnir and a claim that Glitnir lodged in the Winding-up proceedings of LBI.

Pursuant to the settlement, Glitnir will accept LBI’s claim, as an unsecured claim pursuant to Article 113 of the Bankruptcy Act No. 21/1991, for the total amount of 13.5 bn ISK.

Glitnir will also withdraw the claim lodged by Glitnir in the Winding-up procedure of LBI, which was lodged as a proprietary claim pursuant to Article 109 of the Bankruptcy Act No. 21/1991.

Further information concerning payment to noteholders due to this settlement will be provided by either party in due course.

On 11 May 2017, the Supreme Court of Iceland found against LBI in the rescission case against LGT Bank Ltd.

The Court affirmed the ruling of the District Court of Reykjavik and principally the same grounds.

The Court found that the payment appeared ordinary under the circumstances as the terms of the bonds stated that LBI could buy back securities without limitation, that LBI actually did so to a substantial degree between 2006 and 2008. The Court furthermore supports its decision on the basis that financial institutions routinely purchase their own bonds before maturity.

Cost is not awarded to either side.

LBI is currently reviewing the effects of Supreme‘ s Court ruling on remaining 18 voiding/bond buy-back cases.

LBI's Financial Statement for 2016 has now been released on LBI’s web under https://www.lbi.is/financial-info/.

LBI will host an investor call to present and discuss the results tomorrow Thursday 20 April at 12:00 Reykjavik (GMT), 13:00 London (BST) and 08:00 New York time (EDT). The presentation for tomorrow's call is also available on LBI's web under https://www.lbi.is/financial-info/. 

More information

Meeting invitation

The Annual General Meeting of LBI ehf., reg. no. 540291-2259, is hereby convened to be held at Hilton Reykjavik Nordica, Sudurlandsbraut 2 in Reykjavik on 27 April 2017. The meeting will start at 10.00 am.

With reference to press releases issued by the Central Bank on 12 and 23 March 2017, the Central Bank offers to purchase offshore króna assets as these are defined in the Act on the Treatment of Króna-Denominated Assets Subject to Special Restrictions, no. 37/2016, in cash and for euros, at an exchange rate of 137.5 krónur per euro.

Trade requests must be received by Morgan Stanley by the end of day on Friday 28 April 2017, with settlement occurring as soon as reasonably practicable.

The announcement from the Central Bank of Iceland can be found here.

Terms defined in this notice shall be construed in accordance with the conditions set out in the Schedule 1 to the Trust Deed, dated 23 March 2016 and made between the Issuer, the Trustee and the U.S. Trustee (the “Conditions“).

Pursuant to 9.1(c) of the Conditions, and in furtherance of the Unscheduled Payment Notice issued on the 23 March 2017, the Issuer hereby notifies the Bondholders that the final amount of Euro Equivalent Available Cash paid on the 5 April 2017 will be €299,167,036.