Islandsbanki hf



As Agent Bank, please be advised of the following rate determined on: 29-Aug-2008
Issue              � Islandsbanki Hf - Series 186
                     USD 75,000,000.00 Step UP Callable FRN Due 02-Mar-2015
ISIN Number        � XS0213269094
Common Code / 144A � 21326909
 ISIN
Issue Nomin USD    � 75,000,000.00
Period             � 02-Sep-2008 to 02-Dec-2008            Payment Date 02-Dec-2008
Number of Days     � 91
Rate               � 3.21063
Denomination USD   � 1,000.00              � 75,000,000.00        �

Amount Payable per � 8.12                  � 608,681.94           �
 Denomination

Bank of New York
Rate Fix Desk                              Telephone       � 44 1202 689580
Corporate Trust Services                   Facsimile       � 44 1202 689601



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