Islandsbanki hf


As Agent Bank, please be advised of the following rate determined on: 29-May-2008

Issue               : Islandsbanki hf - Series 186
                      USD 75,000,000 Step UP Callable FRN due 02-Mar-2015
ISIN Number         : XS0213269094
Common Code/        : 21326909
144A ISIN
Issue Nomin     USD : 75,000,000.00
Period              : 02-Jun-2008 to 02-Sep-2008          Payment Date 02-Sep-2008
Number of Days      : 92
Rate                : 3.08188
Denomination USD    : 1,000.00                    75,000,000.0

Amount Payable
per Denomination    : 7.88                        590,693.67

Bank of New York
Rate Fix Desk                           Telephone 44 1202 689580
Institutional Trust Services  Facsimille          44 1202 689601



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