Kaupthing Bank issues Subordinated Bonds

Kaupthing Bank hf. has issued subordinated bonds for the amount of
USD 400 million classified as Tier 1 capital according to regulation
no. 156/2005 on additional own funds items for financial
undertakings. These are perpetual bonds carrying a fixed coupon of
9.00 per cent, which is equivalent to the financing cost of
three-month US dollar LIBOR +275 bps, and are callable by Kaupthing
Bank five years after the date of issue, provided that the conditions
of the above mentioned rules are met.

The bonds, which were targeted at retail investors, were sold to 97
investors from 14 countries. The bookrunners were Citigroup, Credit
Suisse, Deutsche Bank and Merrill Lynch.


Further information:
Gudni Adalsteinsson - Chief Treasurer, + 354 444-6126
Jónas Sigurgeirsson - Chief Communications Officer, +354 444-6112


About Kaupthing Bank
Kaupthing Bank is a Northern European bank offering integrated
financial services to companies, institutional investors and high net
worth individuals. These services include corporate banking,
investment banking, capital markets services, treasury services and
asset management and comprehensive wealth management for private
banking clients.

The Bank operates in twelve countries, including all the Nordic
countries (Denmark, Faroe Islands, Finland, Iceland, Norway and
Sweden), Luxembourg, Switzerland, the UK, the US, Dubai and Qatar.

Based on Kaupthing's market capitalisation of EUR 9.9 billion as of
31 August 2007, the bank is currently the seventh largest bank in the
Nordic region. Through strong organic growth and strategic
acquisitions, such as the acquisition in Denmark of FIH Erhvervsbank
in 2004 and the acquisition of the UK-based bank Singer & Friedlander
in 2005, Kaupthing has successfully increased both the product and
geographic diversification of its operations. As of 30 June 2007 the
bank has 2,970 employees and total assets of EUR 54.3 billion.
www.kaupthing.com