Icelandair Group — Capital/Financing Update 2016

Oct 18, 2016

Icelandair Group successfully completes USD 150 million bond issue

Icelandair Group successfully completes USD 150 million bond issue

Today, Icelandair Group hf. succesfully issued a five-year senior unsecured
bond in the amount of USD 150 million, marking the Group’s debut on
international capital markets. The bond was placed at a coupon of 3 month LIBOR
+ 3.50% with no LIBOR floor. The proceeds from the bond issue will be used to
finance pre-delivery payments for new aircraft, to strengthen the Group’s
liquidity and for general corporate purposes.

Bjorgolfur Johannsson, President and CEO of Icelandair Group:

“The placement is Icelandair Group’s first bond offering on international
capital markets. This is also one of the first Icelandic corporate non-bank
international bond issuance. We are pleased with the outcome of the placement.
The margin at which the bond was placed, positions the Group as the Nordic
airline with the lowest unsecured funding rate, and at the low end compared to
international airline peers.”

Pareto Securities AB acted as Sole Bookrunner on the bond issue.

Further information:

Bogi Nils Bogason
CFO, Icelandair Group
Email: bogi@icelandairgroup.is
Tel: + 354 665 88 01