the icelandic corporate bond market 2007.pdf · credit research • october 2007 • page 2 of 29...

See important disclosures on page 3 of this report

Icelandic Corporate Bonds

Corporate bonds issuance has grown fast over the last few years and in the end of August 2007 it was already more than the issuance for the whole year 2006. The turnover has also increased substantially, or about 114% from the first nine months last year.

Kaupthing Research has issued a publication containing coverage of eleven companies

which have all issued corporate bonds. The companies are Exista, FL Group,

Landsvirkjun, Bakkavör Group, Atorka Group, Stoðir, Síminn (Iceland Telecom), Nýsir,

Icelandair Group, Eyrir Invest and Norvik Banka. The publication covers the credit

profile of the companies, such as the company's profile, its credit summary, debt

maturity as well as showing figures from the Income statement, the Balance sheet and

some financial ratios. Coverage for Icelandic companies which have issued bonds can

be expected periodically in the near future.

• Exista is a financial service company. It is the largest issuer of corporate

bonds on the Icelandic market, with an outstanding nominal value of ISK 70.4

billion.

• FL Group is an investment company and it has issued corporate bonds with an

outstanding nominal value of ISK 35 billion.

• Landsvirkjun produces, distributes and sells wholesale electricity. It has

issued corporate bonds with an outstanding nominal value of ISK 25.5 billion.

• Bakkavör Group is a food manufacturing company. It has issued corporate

bonds with an outstanding nominal value of ISK 20.7 billion.

• Atorka Group is an investment company and it has issued corporate bonds

with an outstanding nominal value of ISK 19 billion.

• Stoðir is a real-estate company which has grown rapidly through the years. It

has issued corporate bonds with an outstanding value of ISK 18.5 billion.

• Síminn is the largest telecommunications company in Iceland. It has issued

corporate bonds with an outstanding nominal value of ISK 14 billion.

• Nýsir is an international group engaged in property investments and

developments, PFI/PPP projects and related services. It has issued corporate

bonds with an outstanding nominal value of ISK 8 billion.

• Icelandair Group is a holding company focusing on airline and tourism

sectors. Its corporate bonds have an outstanding nominal value of ISK 6.2

billion.

• Eyrir Invest is an international investment company. It has issued corporate

bonds with an outstanding nominal value of ISK 6.1 billion.

• Norvik Banka is a Latvian bank. It has issued bills with an outstanding

nominal value of ISK 1.7 billion.

Research in Iceland:

Ásgeir Jónsson [email protected] Tel. +354 444 6957 Linda Garðarsdóttir [email protected] Tel. +354 444 6965

Fixed Income Sales:

Stefán Ákason [email protected] Tel. +354 444 7311

Gísli Hauksson [email protected] Tel. +354 444 7315

Agnar T. Möller [email protected] Tel. +354 444 7316

Bergthór Ólason [email protected] Tel. +354 444 7306

Hulda Pjetursdóttir [email protected] Tel. +354 444 7313

Stefnir Agnarsson [email protected] Tel. +354 444 7308

Editor:

Ásgeir Jónsson [email protected] Tel. +354 444 6957

The Icelandic Corporate Bond Market

12 October 2007

Credit Research • October 2007 • of 29

The Icelandic corporate bond market Corporate bond issuance has grown rapidly in the last few years. Bond issuance of both unlisted and listed on OMX Nordic Exchange Iceland amounted to at least ISK 168.5 billion from January to August 2007. That is a 15.6% increase from the whole year 2006 and a 67.2% increase from the whole year 2005. Corporate bonds' turnover has also increased during the first nine months in 2007 and the growth is 114% from the same time last year. The turnover is already the same as it was for the whole year 2006.

Bond issuance, unlisted and listed on OMX Nordic Exchange Iceland (ISKbn)

20

40

60

80

100

120

140

160

180

2000 2001 2002 2003 2004 2005 2006 2007*

MunicipalitiesBanks, savings banks and other loan institutionsHFF bonds, housing bonds and housing authority bondsCorporate issuersTreasury notesForeign issuers

Source: Central Bank of Iceland

HFF and Housing Authority bonds have the most market value on the Icelandic bond

market or 31.2% at the end of September 2007. However corporate bonds have been

gaining on HFF bonds for some time. Now corporate bonds represent 26.3% of the total

market value of the Icelandic bond market compared to 21.6% at the end of May 2007,

a number which we published in our last coverage of Icelandic corporate bonds.

If we only look at the corporate bond market, which includes bank/savings bank bonds,

leasing company bonds, corporate bonds, loan institution bonds, municipal bonds and

foreign bonds; corporate bonds have the most market value or 51%.

Icelandic bond market - % of total market value

Premium Bonds, 2.9%

HFF and Housing Authority Bonds,

31.2%

Treasury Bills, 0.9%

Leasing Company Bonds, 0.3%

Other Corporate Bonds, 26.3%

Loan Institution Bonds, 2.1%

Bank Bills, 6.2%

Treasury Bonds, 1.1%Foreign Bonds,

2.8%Municipal Bonds, 1.5%

Treasury Notes, 6.1%

Bank/Savings Bank bonds,

18.6%

Source: OMX Nordic Exchange Iceland

*January - August


Real yields have risen The credit spreads on unrated bonds of longer maturities (3 years or longer) are on

average slightly above 200 basis points, as compared to the yields on HFF bonds

(housing bonds and housing authority bonds). The interest rate on HFF bonds has

increased for the last few years as The Central Bank of Iceland has increased its interest

rate. In the picture below a substantial increase in yield on HFF bonds can been seen in

autumn 2005. The Central Bank of Iceland began to raise their interest rate in 2004 but

inflation expectations increased faster than the Central Bank's interest rate and

therefore rate hikes did not manage to raise real yields until late 2005. Another increase

in yield on HFF bonds occurred in October 2006 when the Icelandic government

announced its intention to decrease food taxes in March 2007, thus lowering short term

inflation expectations. Yields fell somewhat in August 2007 as the Icelandic Krona took

a tumble and inflation spiked in September. However, as the Krona has regained

strength and rates will probably not be reduced until Q2 2008, HFF yields have reached

new heights after a strong sell-off in the end of September and beginning of October.

Yields on HFF bonds

3

4

5

6

7

Feb.2005 Jun.2005 Oct.2005 Feb.2006 Jun.2006 Oct.2006 Feb.2007 Jun.2007 Oct.2007

%

HFF14

HFF24

HFF34

HFF44

Source: Mentis' Datastream

By international comparison, spreads on corporate bonds in Iceland may have been

considered to be relatively high for recent years, although current events in global

credit markets may be altering that view at the moment. One factor which explains this

is that Icelandic bonds cannot yet be cleared through an international clearing house,

such as Euroclear or Clearstream. That has inhibited foreign investors from trading with

corporate bonds. However this is expected to change in the near future, which will

encourage foreign investors to enter the Icelandic corporate bond market. That could

increase the demand and liquidity and possibly lower the spreads on Icelandic

corporate bonds.

The tables on the following page show ratings and spreads for US corporate bonds in

the financial and industry sectors. The US corporate bonds spreads are based on

underlying treasury issue. The third table shows approximation of what rating the

Icelandic corporate bonds, which we are looking into, could possibly have compared to

their spreads. It is based on recent trading and Kaupthing Research's estimates. The

Icelandic corporate bonds spreads are based on HFF which is comparable to spreads

over treasury bonds. For one year and less we use REIBOR for approximation for

treasury interest rates.


Reuters US corporate spreads for Financials (as of 8 October 2007)

Rating 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr

Aaa / AAA 35 38 46 63 86 104

Aa1 / AA+ 60 62 63 83 104 116

Aa2 / AA 62 64 66 90 107 120

Aa3 / AA- 64 70 72 101 113 123

A1 / A+ 72 100 103 114 123 143

A2 / A 87 104 106 121 125 145

A3 / A- 90 106 110 123 133 152

Baa1 / BBB+ 107 120 121 137 154 175

Baa2 / BBB 112 123 127 149 162 183

Baa3 / BBB- 117 125 131 158 176 200

Ba1 / BB+ 200 220 230 260 280 300

Ba2 / BB 210 230 240 270 290 310

Ba3 / BB- 220 240 250 280 300 320

B1 / B+ 315 335 345 370 405 430

B2 / B 325 345 355 380 415 440

B3 / B- 335 355 365 390 425 450

Caa / CCC+ 390 400 410 475 525 580 Source: Bondsonline

Reuters US corporate spreads for Industrials (as of 8 October 2007)

Rating 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr

Aaa / AAA 25 42 48 60 70 80

Aa1 / AA+ 31 48 53 67 75 95

Aa2 / AA 36 53 58 74 80 100

Aa3 / AA- 41 56 63 80 85 105

A1 / A+ 47 65 76 88 93 110

A2 / A 52 70 81 93 105 115

A3 / A- 57 76 86 103 115 120

Baa1 / BBB+ 65 85 96 118 125 140

Baa2 / BBB 70 91 106 128 155 165

Baa3 / BBB- 85 107 126 153 175 195

Ba1 / BB+ 125 155 205 230 265 285

Ba2 / BB 175 185 220 275 295 310

Ba3 / BB- 190 215 265 290 315 330

B1 / B+ 225 250 300 335 360 380

B2 / B 250 280 345 390 410 425

B3 / B- 295 315 405 430 470 495

Caa / CCC+ 435 490 525 550 565 615 Source: Bondsonline

Ratings on Icelandic corporate bonds compared to their spreads

based on recent trading and Kaupthing Research's estimates

1y spreads 5y spreads Rating Classification

Exista 1.40% 1.75% BBB-/BB+ Financial

Landsvirkjun 0.20% 0.40% AAA/AA+ Industrial

Bakkavör Group 1.50% 2.50% BB+/BB Industrial

FL Group 2.50% 3.50% B+/B Financial

Atorka Group 2.25% 3.50% BB-/B+ Financial

Stoðir 2.10% 3.00% BB/BB- Financial

Síminn 1.50% 2.50% BB+/BB Industrial

Icelandair Group 1.90% 2.80% BB- Industrial

Nýsir 2.25% 3.50% BB-/B+ Financial

Norvik Banka 1.20% N/A BBB+ Financial

Eyrir Invest 2.25% 3.50% BB-/B+ Financial Source: Kaupthing Research


Fluctuation on the CDS spreads

Markets have been fluctuating a lot since middle of July which results in fluctuation in

the credit default swaps (CDS spreads) of many companies. The reason for the

fluctuation is mainly because of sub-prime loans crisis in USA. Recently the CDS

spreads have been going down again as markets have been stabilising. Below we see

three pictures of the CDS spreads for several foreign banks, technical and food

companies. The largest fluctuation was in the banking sector but companies in other

industries experienced it as well.

Credit default swap (CDS) for several banks – 5 years

0

10

20

30

40

50

60

7001.0

6.0

7

08.0

6.0

7

15.0

6.0

7

22.0

6.0

7

29.0

6.0

7

06.0

7.0

7

13.0

7.0

7

20.0

7.0

7

27.0

7.0

7

03.0

8.0

7

10.0

8.0

7

17.0

8.0

7

24.0

8.0

7

31.0

8.0

7

07.0

9.0

7

14.0

9.0

7

21.0

9.0

7

28.0

9.0

7

05.1

0.0

7

Commerzbank

Barclays

ABN Amro

Credit Suisse

UBS

Source: Bloomberg

Credit default swap (CDS) for several technical companies – 5 years

0

5

10

15

20

25

30

35

40

45

01.0

6.0

7

08.0

6.0

7

15.0

6.0

7

22.0

6.0

7

29.0

6.0

7

06.0

7.0

7

13.0

7.0

7

20.0

7.0

7

27.0

7.0

7

03.0

8.0

7

10.0

8.0

7

17.0

8.0

7

24.0

8.0

7

31.0

8.0

7

07.0

9.0

7

14.0

9.0

7

21.0

9.0

7

28.0

9.0

7

05.1

0.0

7

STMICRO

PHILIPS ELEC

NOKIA

SIEMENS

Source: Bloomberg


Credit default swap (CDS) for several food companies – 5 years

0

10

20

30

40

50

60

70

80

90

01.0

6.0

7

08.0

6.0

7

15.0

6.0

7

22.0

6.0

7

29.0

6.0

7

06.0

7.0

7

13.0

7.0

7

20.0

7.0

7

27.0

7.0

7

03.0

8.0

7

10.0

8.0

7

17.0

8.0

7

24.0

8.0

7

31.0

8.0

7

07.0

9.0

7

14.0

9.0

7

21.0

9.0

7

28.0

9.0

7

05.1

0.0

7

NESTLE

CADBURRY SCHWEPPES

UNILEVER NV

TATE & LYLE

Source: Bloomberg


Issuers of Icelandic corporate bonds Companies from various industries have issued corporate bonds through the years. Prominent industries are e.g. the fishery and fish processing industry, real-estate industry, manufacturing and energy industry. Investment and/or holding companies as well as heating utilities have also been very active in issuing bonds. A large number of companies have listed their bonds on the OMX Nordic Exchange Iceland. The number of issues listed totalled 92 on 10 October 2007.

Issuers of corporate bonds (as of 10 October 2007) Outstanding nominal value (ISKm)

No. of issues Internet home page Industry

Exista hf. 70,380 8 http://www.exista.com Financial service company

FL GROUP hf. 35,000 4 http://www.flgroup.is Investment company

Landsvirkjun 25,500 3 http://www.landsvirkjun.com Electricity, gas and water supply

Bakkavör hf. 20,745 2 http://bakkavor.com Food manufacturer

Eimskipafélag Íslands ehf. 19,800 4 http://www.eimskip.com Transport and storage

Atorka Group hf. 19,042 6 http://www.atorka.is Investment company

Fasteignafélagið Stoðir hf. 18,490 4 http://www.stodir.is Real estate, renting and business activities

Síminn hf. 14,000 1 http://www.siminn.co.uk Communication

Samson eignarhaldsfélag ehf. 10,000 1 Holding company

Tryggingamiðstöðin hf. 8,500 1 http://www.tryggingamidstodin.isInsurance company

Nýsir hf. 8,000 4 http://www.nysir.is Real estate, renting and business activities

365 hf. 7,300 5 http://www.365.is Holding company

Hagar hf. 7,000 1 http://www.hagar.is Wholesale and retail trade

Icelandair Group hf. 6,240 1 http://www.icelandairgroup.comTransport and storage

Eyrir Invest ehf. 6,100 2 http://www.eyririnvest.com Financial intermediation

Marel hf. 6,000 1 http://www.marel.is Manufactoring company

Mosaic Fashions hf. 6,000 1 http://mosaic-fashions.is Wholesale and retail trade

Egla hf. 5,635 1 Holding company

Straumborg 5,250 2 Investment company

Olíufélagið ehf. 5,000 1 http://www.n1.is Oil service company

Jarðboranir hf. 3,500 3 http://www.jardboranir.is Drilling company

Hitaveita Suðurnesja hf. 3,000 1 Electricity, gas and water supply

Alfesca hf. 3,000 2 http://www.alfesca.is Food manufacturer

Spölur ehf. 3,000 1 http://www.spolur.is Construction

Avant hf. 2,760 2 http://www.avant.is Insurance company

Ríkisútvarpið 2,650 2 http://www.ruv.is The Icelandic National Broadcast Service

Milestone ehf. 2,635 1 Financial intermediation

Rafmagnsveitur ríkisins 2,310 2 http://www.rarik.is/english Electricity, gas and water supply

Félagsbústaðir 2,110 2 http://www.felagsbustadir.is Real estate, renting and business activities

Smáralind ehf. 2,100 1 http://www.smaralind.is Wholesale and retail trade

Orkuveita Reykjavíkur 2,000 1 http://www.or.is Electricity, gas and water supply

Norvik Banka 1,710 1 http://www.norvik.lv Financial intermediation

Others 14,078 25

Total: 348,835 97

Source: OMX Nordic Exchange Iceland

Provisional release:

The content of this release has been prepared by the Research Division of Kaupthing Bank hf. The Research Division bases its

information on data information services and news services, both foreign and domestic, which it considers reliable, along with

its own interpretations and evaluations of public information. Kaupthing Bank hf. accepts no responsibility for the accuracy of

this information nor any liability for transactions based on this information. In relation to this it should be noted that any of

the Research Division's discussion may be an abridged version of more extensive analysis and research and conditions of

financial markets change rapidly. For these reasons the recommendations and forecasts of the Research Division can change

without notice, but they do reflect the opinions of the Research Division's employees at the time that they are expressed.

Those parties who are interested in initiating transactions are advised to contact an expert at Kaupthing Bank hf. before any

decision is made. It should also be noted that Kaupthing Bank hf., its employees and other parties associated with the Bank

may have vested interests concerning particular organizations, which the Research Division's published material may pertain

to at any given time.


Outstanding bonds

Ticker Coupon Type Indexation Maturity Last tradedIndicative Yield

Indicative Spread Duration

Outstanding Nominal Value (ISKm)

EXIS 08 0408 0.0% Zero coupon bond Nominal 08/04/2008 N/A 15.79% 1.15% 0.49 5,000.00




EXISTA 07 2 3mR+1,5% Quarterly coupon Nominal 29/05/2009 N/A 15.94% 1.30% 0.25 10,000.00

EXISTA 04 1 5.9% Annual coupon Indexed 14/10/2011 06/03/2007 8.45% 1.60% 3.46 13,000.00

EXISTA 06 3 15.1% Annual coupon Nominal 21/11/2012 21/08/2007 8.44% 1.60% 3.50 4,690.00

EXISTA 07 1 7.0% Annual coupon Indexed 22/06/2014 23/08/2007 8.13% 1.80% 5.44 1,690.00

Company Profile

Exista is a financial services company with operations in the areas of insurance, asset financing and investment activities. The company is a leading insurance underwriter in Iceland, as well as the country's largest provider of asset finance products. Exista was listed on OMX Nordic Exchange Iceland (previously named The Iceland Stock Exchange) 15 September 2006.

As an international investor, Exista has strategic holdings in several companies, including Sampo Group, Kaupthing Bank, Bakkavör Group and Iceland Telecom.

Exista's goal is to use its financial strength for the further development of its business in Northern Europe.

Credit Summary

Exista has six listed outstanding bonds. Two of them are non-indexed zero coupon bonds with maturity in October 2007 (EXIS 07 1029) and March 2008 (EXIS 08 0317).

The bond EXISTA 07 2 bears a liquid interest rate of 3M REIBOR + 1.5%. It will mature 29 May 2009. The bond EXISTA 04 1 is linked to the Consumer Price Index and bears 5.9% interest rate. The bond EXISTA 06 3 bears 15.1% interest rate paid annually. The bond EXISTA 07 1 bears 7% interest rate and will mature 22 June 2014.

Two additional non-indexed zero coupon bonds will be listed at later stages with maturity in April 2008 (EXIS 08 0408) and October 2008 (EXIS 08 1008).

Further Information

§ Kaupthing Research

§ OMX Nordic Exchange Iceland (www.omxgroup.com)

- EXIS 07 1029

- EXIS 08 0317

- EXISTA 07 2

- EXISTA 04 1

- EXISTA 06 3

- EXISTA 07 1

Debt Maturity

0

15,000

30,000

45,000

60,000

75,000

90,000

105,000

120,000

135,000

150,000

165,000

2007 2008 2009 2010 2011 2012* 2013 2014

ISKm

EXISTA 07 1

EXISTA 06 3

EXISTA 07 2

EXIS 08 0317

EXIS 07 1029

EXIS 08 1008

EXIS 08 0408

EXISTA 04 1

Long-term debt

*Borrowings in 2012 will mature that year or later.

Recent News

On 31 August 2007, Exista signed a new EUR 500 million senior unsecured credit facility. The term loan has two tranches: a EUR 407.5m tranche for three years at 1.3% over EURIBOR and a EUR 92.5m tranche for one year at 0.625% over EURIBOR.

On 10 August 2007, Sampo announced to the Helsinki Stock Exchange that the total number of Sampo A-shares controlled by Exista has risen to 20% of Sampo's issued share capital.

Company Profile

Q3 interim statement – 25 October 2007

Q4 and annual results – 31 January 2008

Annual meeting – 14 March 2008

Exista – Financial Services Company www.exista.com

12 October 2007

http://www.omxgroup.com/nordicexchange/markadsupplysingar/microsite/Bonds/?InstrumentId=ICE41473






http://www.kaupthing.is/lisalib/getfile.aspx?itemid=11683


Share price

18

20

22

24

26

28

30

32

34

36

38

40

42

Sep-06 Oct-06 Dec-06 Jan-07 Mar-07 Apr-07 Jun-07 Jul-07 Sep-07

EXISTA

OMXI15

Key figures Date: 10.10.2007

Price (ISK): 35.85

Market cap (ISKm): 407,295.16

No. of shares (m): 11,361.09

Reuters: EXISTA.IC

Bloomberg: EXISTA IR Equity

INCOME STATEMENT EUR million H1 2007 H1 2006 2006 2005 2004

Investment income 958 75 700 650 227

Total expenses -136 -117 -259 -61 -18

Profit before taxes 822 -42 441 589 209Taxes 40 4 -10 56 -36

Minority interest 0 0 0 0 0Profit for the year (period) 862 -38 431 645 173

BALANCE SHEET EUR million H1 2007 H1 2006 2006 2005 2004

AssetsFinancial assests measured at fair value 991 - 2,273 1,906 705

Financial assets held for trading and sale 643 - 837 97 7Loans and accounts receivable 769 - 704 0 0

Goodwill 512 - 465 0 0Investments in associates 4,612 - 0 0 0

Property, plant and equipment 28 - 12 1 0

Reinsurance assets 14 - 16 0 0Cash and equivalents 110 - 76 64 14

Other assets 31 - 13 6 1Total assets 7,709 - 4,395 2,074 728

EquityShare capital 121 - 112 111 69

Statutory reserves 23 - 23 28 17Capital reserves 892 - 698 222 0

Other reserves -8 - 0 -2 -7Retained earnings 1,800 - 1,061 872 223

Minority interest 0 - 6 0 0Total equity 2,828 - 1,900 1,232 303

Liabilities

Borrowings 4,575 - 2,183 840 361Technical Provisions 255 - 224 0 0

Deferred tax liability 28 - 60 0 51Other liabilities 24 - 28 2 13

Total liabilities 4,882 - 2,495 842 425

Total equity and liabilities 7,709 - 4,395 2,074 728

FINANCIAL RATIOS

Return on equity (ROE) - - 27.6% 84.1% 79.0%Equity ratio 36.7% 46.1% 43.1% 59.4% 41.6%

Debt/Equity ratio 1.73 - 1.32 0.68 1.40Interest bearing debt/Total assets 59.3% - 49.7% 40.5% 49.6%

Earnings (loss) per share 7.65 -0.42 0.04 0.11 0.03

29.06.2007: EURISK 84.02


Outstanding bonds




FL 07 1112 0.0% Zero coupon bond Nominal 12/11/2007 N/A 16.96% 2.30% 0.09 5,000.00

FL 08 0516 0.0% Zero coupon bond Nominal 16/05/2008 N/A 16.89% 2.40% 0.60 5,000.00

FL 08 0320 3mR+1,95% Quarterly coupon Nominal 20/03/2008 N/A 16.94% 2.30% 0.25 15,000.00

FL 05 1 5.0% Annual coupon Indexed 01/03/2012 06/09/2007 9.94% 3.20% 3.89 10,000.00

Company Profile

FL Group is an international investment company and focuses its activities primarily on two functions, private equity and capital markets. The company's geographic focus lies within Northern Europe but special emphasis has been put on the Nordic countries and the UK.

FL Group has holdings in companies in various sectors in Iceland, the UK, the Netherlands and the Nordic countries. The majority of its investments are in listed companies in the banking and financial services. Other investments are in beverages, airlines and retail. Its main listed holdings are Glitnir, Commerzbank, AMR Corp., Finnair, Royal Unibrew, Aktiv Kapital and Tryggingamidstodin (TM). Its unlisted holdings are e.g. Refresco, Northern Travel Holding, Reykjavik Energy Invest among others.

FL Group has four main divisions, i.e. Private Equity, Capital Markets, Finance and Operation Management. The Private Equity team deals with the company's investments in its operating companies, transformation projects and investments where a significant or controlling share in a company is held. Capital Markets unit oversees the company's short term trading in listed securities and currencies as well as overseeing the company's derivative and security trading related to the company's asset portfolio. Finance & Administration is a support function for the company and the Operation Management team helps the company to participate actively in the operations of the companies invested in. FL Group has set up offices both in Denmark and the UK.

Credit Summary

FL Group has four listed outstanding bonds. The first two (FL 07 1112 and FL 08 0516) are non-indexed zero coupon bonds and will mature 12 November 2007 and 16 May 2008. The third one (FL 08 0320) bears a liquid interest rate of 3M REIBOR + 1.95%. The fourth one (FL 05 1) bears 5% interest rate, paid annually.

Further Information



- FL 07 1112

- FL 08 0516

- FL 08 0320

- FL 05 1

Debt Maturity

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2007 2008 2009 2010 2011 2012*

ISKm

FL 08 0320FL 08 0516FL 07 1112FL 05 1Long-term debt

*Borrowings in 2012 will mature that year and later.

Organisational Structure

Financial Calendar

Q3 interim account – 29 Oct. – 2 Nov. 2007

Q4 and annual results – 28 Jan. – 1 Feb. 2008

Annual meeting – 22 February 2008

Recent News

On 4 October 2007, Reykjavik Energy Invest and Geysir Green Energy announced their agreement to merge the two companies under the name Reykjavik Energy Invest. The merger will create a global leader in the field of geothermal energy. FL Group will be the second largest shareholder with an ownership of 27% of the company's shares.

On 17 September, FL Group signed an agreement to several companies to buy all their shares in Reykjavik based insurance company TM, all in all 46.2% of TM's shares. Prior to this transaction FL Group held 37.6% of the shares in TM so it now controls 83.7%.

FL Group

Private Equity

Operation Management Finance & Administration

Capital Markets

FL Group – Investment Company www.flgroup.is

12 October 2007







Share price

0

5

10

15

20

25

30

35

Oct-96 Jul-99 Apr-02 Jan-05 Oct-07

FL

OMXI15


Price (ISK): 26.95


No. of shares (m): 8,918.66

Reuters: FL.IC

Bloomberg: FL IR Equity

INCOME STATEMENT ISK million H1 2007 H1 2006 2006 2005

Investment income 24,655 9,112 17,491 20,349

Total operating expenses -1,905 -1,008 -2,771 -1,652

Profit before taxes 22,750 8,104 14,720 18,697Taxes 376 -1,150 2,631 -3,292

Profit from continuing operations 23,126 6,954 17,351 15,405Profit from discontinued operations 0 -1,233 27,208 1,846

Minority interest 0 2 1 -2Profit for the year (period) 23,126 5,723 44,560 17,249

BALANCE SHEET ISK million H1 2007 H1 2006 2006 2005

Assets

Cash, cash equivalents 31,273 20,945 47,022 10,350Securities 224,369 78,746 192,566 69,138

Derivatives 24,723 4,832 4,309 6,341Restricted cash 14,117 13,148 9,572 0

Assets classified as held for sale 0 0 904 0

Inventories 0 1,034 0 876Loans, trade and other receivables 24,600 13,839 19,478 7,222

Operating assets 515 41,154 425 35,221Intangible assets 0 28,853 0 3,470

Total assets 319,597 202,551 274,276 132,618Equity

Share capital 7,767 6,034 7,763 5,802Share premium 69,769 45,693 70,530 43,169

Reserves 348 7,041 948 434Retained earnings 71,568 24,588 63,425 25,027

Minority interest 0 9 10 11

Total equity 149,452 83,365 142,676 74,443Liabilities

Borrowings 151,903 66,331 104,955 39,668Derivatives 8,698 9,739 7,021 277

Deferred income tax liability 394 6,058 895 4,694Current tax liability 782 - 782 0

Trade and other payables 8,368 20,856 5,908 10,895Deferred income 0 16,202 0 2,641

Liabilities classified as held for sale 0 0 634 0Total liabilities 170,145 119,186 120,195 58,175

Total equity and liabilities 319,597 202,551 262,871 132,618

FINANCIAL RATIOS

Return on equity (ROE) - - 41.1% 55.2%Equity ratio 46.8% 41.2% 52.0% 56.1%

Debt/Equity ratio 1.14 1.43 0.84 0.78

Interest bearing debt/Total assets 47.5% 32.7% 38.3% 29.9%Earnings (loss) per share 3.03 0.95 6.65 5.90


Outstanding bonds




LAND 97 1 5.0% Coupon at maturity Indexed 19/09/2012 15/02/2006 6.87% 0.40% 4.94 1,000.00

LAND 98 1 4.0% Coupon at maturity Indexed 24/08/2013 N/A 6.62% 0.40% 5.87 2,500.00

LAND 05 1 3.5% Annual Coupon Indexed 21/03/2020 22/02/2007 5.77% 0.60% 9.90 22,000.00

Company Profile

Landsvirkjun (The National Power Company) was founded on 1 July 1965, on the basis of plans to step up harnessing of hydropower through development of power-intensive industries as well as meeting rapidly growing demand from the ordinary market. As of 1 January 2007, the Icelandic State became sole owner of Landsvirkjun. Landsvirkjun produces, distributes and sells wholesale electricity mainly to local public utilities. Landsvirkjun produces about 82% of Iceland's electricity.

Landsvirkjun may from time to time issue notes (EMTN) denominated in any currency agreed between the issuer and the relevant dealer. EMTN notes can be traded on the Luxembourg Stock Exchange's regulated market and can be listed on the Luxembourg Stock Exchange.

Credit Summary

Landsvirkjun has issued three bonds, all indexed through the Consumer Price Index (CPI). The first bond, LAND 97 1, was issued 19 September 1997 and will mature in 5 years from now or 19 September 2012. The bond bears 5% interest rate, paid at maturity. The second bond, LAND 98 1, was issued 24 August 1998 and matures 24 August 2013. The bond bears 4% interest rate, paid at maturity. The third bond, LAND 05 1, was issued 21 March 2005 and bears a fixed 3.5% annual interest rate, paid annually. The bond will mature 21 March 2020.

The Icelandic Electricity Market

With the Icelandic Electricity Act no. 65/2003, adopted on 15 March 2003, substantial changes were made on the organisation of the electricity market. The law is in conformity with the EU electricity directive from 1996. The purpose of the Act is to enable competition in the sales of power. It became effective in stages until 1 June 2006 when the full opening of the market took place. The Act stipulates that an independent TSO operates the grid and a separation between generation, transmission, distribution and supply of electricity takes place.

Further Information


- LAND 97 1

- LAND 98 1

- LAND 05 1

Debt Maturity

0

5

10

15

20

25

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026

ISKbn

EMTN

LAND 05 1

LAND 98 1

LAND 97 1

Company Structure

The company is divided into six divisions: Corporate Office, Finance, Energy, Engineering and Construction, Information System and Human Resources.

The role of the Finance Division is to manage the company's finances and provide its management with services which increase operational efficiency. The role of the Energy Division is to generate electricity at optimum efficiency and deliver it into the Landsnet transmission grid in line with customer orders at the time. The Engineering Division handles project management and consultancy.

Credit Rating

Landsvirkjun has a credit rating from Moody's and Standard & Poor's.

Moody's Standard&Poor's

Short-term P-1 A-1

Long-term Aaa/Stable A+/Stable

Recent News

On 27 August 2007, Landsvirkjun and Norðurál announced they have signed an agreement in which the energy provider will supply the Grundartangi aluminium smelter with electricity in the short-term, during 2007 and 2008.

Landsvirkjun – Electricity, Gas and Water Supply www.landsvirkjun.com

12 October 2007






Price (ISK): -

Market cap: -

No. of shares: -

Reuters: -

Bloomberg: -

INCOME STATEMENT ISK million H1 2007 H1 2006 2006 2005 2004 2003

Operating revenues 10,752 10,013 21,298 15,552 13,701 12,863

Operating expenses -2,982 -2,990 -6,377 -5,913 -4,691 -4,498

Operating profit (EBITDA) 7,771 7,024 14,920 9,639 9,010 8,366

Depreciation -2,302 -2,248 -5,131 -4,904 -5,347 -5,274

Profit before financial income (EBIT) 5,469 4,776 9,789 4,735 3,663 3,091

Net financial income (expenses) 20,547 -13,741 -26,201 1,596 3,532 -1,540

Minority interest 37 367 52 -37 0 0

Taxes* -6,884 11,534 19,863 0 0 0

Profit for the year (period) 19,169 2,936 3,503 6,294 7,195 1,551

BALANCE SHEET ISK million H1 2007 H1 2006 2006 2005 2004 2003

Non-current assets 277,220 205,744 264,332 174,832 147,797 129,245

Current assets 16,303 13,634 11,858 7,153 6,888 5,283

Total assets 293,523 219,378 276,191 181,985 154,685 134,528

Equity 101,239 52,480 82,649 59,723 51,377 41,180

Non-current liabilities 168,550 156,700 180,594 102,971 94,012 86,799

Current liabilities 23,734 10,198 12,948 19,291 9,296 6,549

Total equity and liabilities 293,523 219,378 276,191 181,985 154,685 134,528

CASH FLOW STATEMENT

Net cash from (used in) operating activities 4,026 5,588 9,643 5,927 4,622 5,601

Net cash from (used in) investing activities -11,845 -18,992 -45,382 -28,582 -20,897 -16,877

Net cash provided by financing activities 15,010 17,947 37,296 22,313 16,843 11,239

Change in cash flow 7,190 4,543 1,557 -342 568 -36

FINANCIAL RATIOS

Operating profit (EBITDA) 72.3% 70.1% 70.1% 62.0% 65.8% 65.0%

Profit before financial income (EBIT) 50.9% 47.7% 46.0% 30.4% 26.7% 24.0%

Return on equity (ROE) - - 5.0% 11.5% 15.5% 3.8%

Equity ratio 33.9% 23.3% 29.3% 32.8% 33.2% 30.6%

Current ratio 0.69 1.34 0.92 0.37 0.74 0.81

EBITDA interest coverage 1.85 1.63 2.42 2.73 2.43 2.92

Interest coverage ratio 1.30 1.11 1.59 1.34 0.99 1.08

Debt/Equity ratio 1.93 3.26 2.39 2.11 2.01 2.27

Long-term debt/EBITDA 21.7 22.3 12.1 10.7 10.4 10.4

Funds from Operation/Total Debt 4.4% 3.8% 7.2% 7.0% 9.1% 9.1%

Free Operating Cash Flow/Total Debt -6.6% -6.9% -16.4% -20.6% -15.3% -8.9%

*Landsvirkjun and Landsnet hf. have been tax-exempted but in accordance with law no. 50 from 2005 the two companies

became taxable from 1 January 2006.

Not listed


Outstanding bonds




BAKK 03 1 6.7% Coupon at maturity Indexed 15/05/2009 20/09/2007 9.04% 1.70% 1.60 11,500.00

BAKK 05 1 5.4% Coupon at maturity Indexed 01/12/2010 21/06/2007 8.94% 2.00% 3.14 9,245.00

Company Profile

Bakkavör Group is an international food manufacturing company specialising in fresh prepared foods and produce. The corporation operates around 50 factories and employs over 17,000 people in eight countries. Its pro forma turnover was £1.2 billion in 2006. The Group's Head Office is in Reykjavik, Iceland.

Bakkavör Group was founded in 1986. During this time, the business has grown significantly and today Bakkavör Group is the largest provider of fresh prepared foods and produce in the UK.

In addition to the UK and Iceland, the Group also has business operations in France, Belgium, Spain, South Africa and China and is well-positioned for further expansion.

In total, the Group makes over 4,700 products in 17 product categories, which are developed and sold predominantly under its customers' own brands. Bakkavör Group has attained leading market positions in its key market areas of ready meals, pizzas, convenience salads and leafy salads.

Credit Summary

Bakkavör Group has two outstanding bonds which both are linked to the Consumer Price Index (CPI). The former bond (BAKK 03 1) was issued 15 May 2003 and will mature 15 May 2009. The bond bears 6.7% annual interest rate, which will be paid on the maturity date.

The second bond (BAKK 05 1) was issued 1 June 2005 and will mature 1 December 2010. The bond bears 5.4% annual interest rate, which will be paid at maturity.

Further Information



- BAKK 03 1

- BAKK 05 1

Debt Maturity

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2007 2008 2009 2010 2011 2012

ISKm

BAKK 05 1

BAKK 03 1Borrowings

Sales by geographical market in H1 2007

United Kingdom92.1%

Asia0.1%

Continental Europe7.8%

Financial Calendar

Q3 interim account – 25 October 2007

Q4 and annual results – 31 January 2008


Recent News

On 5 October, Bakkavör announced its acquisition of Welcome Food Ingredients Ltd., a UK flavourings and sauce producer. The consideration price, which is confidential, was financed through and paid by the Group's own cash resources.

Bakkavör Group – Food Manufacturer www.bakkavor.com

12 October 2007





Share price

0

10

20

30

40

50

60

70

80

May-00 Apr-01 Mar-02 Feb-03 Jan-04 Dec-04 Nov-05 Oct-06 Sep-07

BAKK

OMXI15


Price (ISK): 67.70



Reuters: BAKK.IC

Bloomberg: BAKK IR Equity

INCOME STATEMENT GBP million 2008E 2007E H1 2007 2006 2005 2004 2003

Operating revenues 1,579 1,451 723 1,219 722 153 138

Operating expenses -1,391 -1,297 -647 -1,105 -656 -129 -120

Operating profit (EBITDA) 188 154 76 148 86 28 22Depreciation -43 -39 -19 -34 -19 -4 -4

Profit before financial income (EBIT) 145 115 57 114 67 24 18Net financial income (expenses) -40 -47 -23 -47 -28 -7 -4

Profit before taxes 105 68 34 67 38 17 14Taxes -28 -17 -8 -15 -6 -4 -4

Discont. operation, net of tax 0 0 0 17 0 0 3Minority interest 0 0 0 -1 0 0 0

Profit for the year (period) 77 51 25 68 32 13 14

BALANCE SHEET GBP million 2008E 2007E 1H 2007 2006 2005 2004 2003

Non-current assets 1,037 1,034 1,056 1,029 840 217 130Current assets 508 399 317 297 294 55 85

Total assets 1,545 1,433 1,372 1,326 1,135 272 215Equity 369 292 262 241 127 88 72

Non-current liabilities 716 716 773 716 704 165 112Current liabilities 460 425 337 369 303 19 31

Total equity and liabilities 1,545 1,433 1,372 1,326 1,135 272 215

CASH FLOW STATEMENT

Net cash from (used in) operating activities 126 88 61 132 82 16 20

Net cash from (used in) investing activities -46 -44 -50 -167 -446 -88 7Net cash provided by financing activities 0 0 -3 -6 422 38 30

Change in cash flow 80 45 8 -42 58 -33 57

FINANCIAL RATIOS

Operating profit (EBITDA) 11.9% 10.6% 10.5% 12.1% 11.9% 18.4% 16.3%Profit before financial income (EBIT) 9.2% 7.9% 7.9% 9.3% 9.2% 15.8% 13.3%

Return on equity (ROE) 23.2% 19.1% - 36.8% 29.7% 16.3% 20.6%Equity ratio 23.9% 20.4% 19.0% 18.1% 11.2% 32.4% 33.5%

Current ratio 1.10 0.94 0.94 0.81 0.97 2.84 2.77EBITDA interest coverage 4.23 3.13 3.15 2.97 2.76 3.03 3.52

Interest coverage ratio 3.27 2.34 2.36 2.29 2.15 2.60 2.88Debt/Equity ratio 3.19 3.91 4.27 4.52 7.92 2.09 1.98

Long-term debt /EBITDA 3.81 4.66 10.18 4.84 8.22 5.86 4.99

Earnings (loss) per share 0.02 0.04 1.20 3.40 2.00 0.81 0.89Funds from Operation/Total Debt - - 7.2% 15.2% 10.3% 12.3% 11.1%

Free Operating Cash Flow/Total Debt 7.0% 3.7% 3.4% 8.6% 6.5% 7.0% 19.5% 29.06.2007: GBPISK 124.78


Outstanding bonds




ATOR 07 1115 0.0% Zero coupon bond Nominal 15/11/2007 N/A 16.66% 2.00% 0.09 5,520.00

ATOR 07 1 3mR+2.9% Quarterly coupon Nominal 07/08/2008 N/A 16.64% 2.00% 0.25 22.00

ATOR 07 2 3mR+1.95% Quarterly coupon Nominal 16/01/2009 N/A 16.64% 2.00% 0.25 3,500.00

ATOR 06 1 3mR+1.8% Quarterly coupon Nominal 26/04/2009 N/A 16.64% 2.00% 0.25 2,000.00

ATOR 04 1 5.2% Annual coupon Indexed 15/10/2010 08/06/2007 9.85% 2.80% 2.70 5,000.00

ATOR 05 1 5.0% Annual coupon Indexed 15/03/2012 30/05/2007 9.93% 3.20% 3.93 3,000.00

Company Profile

Atorka Group is an international investment company. Atorka's main focus is to invest in progressive and well-managed companies that operate in growing markets. Atorka's aim is to take such companies to recognizable world leadership and support their growth. Atorka is listed on the OMX Nordic Exchange Iceland and is included in the OMXI15 index. Atorka's shareholders are around 5,000.

Credit Summary

Atorka has six outstanding bonds. The first bond ATOR 07 1115 is a zero coupon bond and will mature 15 November 2007. The second bond ATOR 07 1 bears a liquid interest rate of 3M REIBOR + 2.9% and will mature 7 August 2008. The bond ATOR 07 2 was issued 16 May 2007 and bears a liquid interest rate of 3M REIBOR + 1.95%.

The bond ATOR 06 1 bears a liquid interest rate of 3M REIBOR + 1.8%. It is a non-indexed bond and will mature 26 April 2009. The bond ATOR 04 1 bears 5.2% interest rate and will mature 15 October 2010. The last bond ATOR 05 1 was issued 15 March 2005 and bears 5.0% interest rate paid annually.

Recent News

On 4 October 2007, Reykjavik Energy Invest and Geysir Green Energy announced their agreement to merge the two companies under the name Reykjavik Energy Invest. The merger will create a global leader in the field of geothermal energy. Atorka will be the third largest shareholder with an ownership of 20% of the company's shares.

On 1 August 2007, Atorka announced it had concluded the sale of its entire holding in Iceland drilling, through its company Renewable Energy Resources, together with a 16% share in Enex, to Geysir Green Energy (GGE). Simultaneous with the sale, Atorka has purchased a 32% stake in GGE and will therefore be a primary investor in the company.

Financial Calendar

Q3 interim account – Week 47 2007

Q4 and annual results – Week 8 2008

Annual meeting - 6 March 2008

Debt Maturity

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2007 2008 2009 2010 2011 2012

ISKm ATOR 07 1

ATOR 07 2

ATOR 07 1115

ATOR 06 1

ATOR 05 1

ATOR 04 1

Borrowings

Group Structure

Further Information


- ATOR 07 1115

- ATOR 07 1

- ATOR 04 1

- ATOR 05 1

- ATOR 07 2

- ATOR 06 1 .

Atorka Group

Private Equity Strategic Investments

Reykjavik Energy Invest (20%)

Promens (63%)

Interbulk (40%)

Amiad Filtration (20%)

NWF Group PLC (21%)

(20%)

Pioneer (100%)

A. Karlsson (100%) Clyde Process Solutions (30%)

Romag (20%)

Atorka Group – Investment Company www.atorka.is/en

12 October 2007








Share price

0

2

4

6

8

10

12

14

16

18

20

Jan-01 Nov-01 Sep-02 Jul-03 May-04 Mar-05 Jan-06 Nov-06 Sep-07

ATOR

OMXI15


Price (ISK): 11.40



Reuters: ATOR.IC

Bloomberg: ATOR IR Equity

INCOME STATEMENT ISK million H1 2007 H1 2006 2006 2005 2004

Financial income 8,086 7,196 10,747 2,828 2,204

Financial expenses -1,695 -922 -1,919 -710 -236

Net financial income 6,391 6,275 8,829 2,118 1,968

Total operating expenses -477 -562 -857 -612 -197

Impairment of goodwill 0 0 0 -249 0

Profit before taxes 5,914 5,713 7,972 1,256 1,771

Taxes 122 -841 -1,233 235 -57

Minority interest 0 0 0 0 -219

Profit for the year (period) 6,036 4,872 6,739 1,491 1,496

BALANCE SHEET ISK million H1 2007 H1 2006 2006 2005 2004

Non-current assets 2,297 2,398 4,294 1,726 9,495

Current assets 52,487 30,243 38,734 18,274 6,706

Total assets 54,783 32,641 43,028 20,000 16,201

Equity 21,456 15,982 17,226 9,744 9,138

Non-current liabilities 26,721 15,387 20,779 9,610 554

Current liabilities 6,606 1,273 5,023 646 6,509

Total equity and liabilities 54,783 32,641 43,028 20,000 16,201

CASH FLOW STATEMENT

Net cash from (used in) operating activities -2,045 -223 -1,800 561 568

Net cash from (used in) investing activities -7,426 697 -4,981 -5,784 -1,339

Net cash provided by financing activities 5,779 1,735 6,635 2,654 3,908

Change in cash flow -3,692 2,209 -146 -2,570 3,136

FINANCIAL RATIOS

Return on equity (ROE) - - 50.0% 15.8% 22.6%

Equity ratio 39.2% 49.0% 40.0% 48.7% 56.4%

Current ratio 7.94 23.76 7.71 28.29 1.03

Debt/Equity ratio 1.55 1.04 1.50 1.05 0.77

Earnings (loss) per share -0.09 0.03 2.32 0.54 1.16


Outstanding bonds




STOD 08 0125 0.0% Zero coupon Nominal 25/01/2008 N/A 16.54% 1.90% 0.29 1,050.00

STOD 03 1 7.4% Annual coupon Indexed 05/02/2011 20/09/2007 9.50% 2.50% 2.91 10,000.00

STOD 06 2 3mR+1.9% Coupon at maturity Nominal 21/08/2011 N/A 9.57% 2.60% 3.00 2,500.00

STOD 06 1 6.0% Annual coupon Indexed 28/03/2013 08/06/2007 9.45% 2.90% 4.63 4,940.00

Company Profile

On 3 May 1999 Stoðir Real Estate Inc. was founded and in May 2002 it merged with Þyrping hf., a property company. Þyrping was the larger party in the merger and had been operating since 1991. The merger created the largest real-estate business in Iceland.

Stoðir has through the years focused on acquiring real estate which is leased to public authorities, as it views them as reliable tenants.

At the end of 2005, Stoðir Real Estate acquired the Danish real estate company Atlas Ejendomme A/S. This acquisition strengthened the company as Atlas Ejendomme owns more than 150 thousand square metres of property, mainly in the centre of Copenhagen, and as the Danish state is the largest tenant.

In September 2007, Stoðir announced it holds 96.72% of the issues shares and voting rights of Keops, Denmark's largest listed property group. Stoðir intends to initiate a compulsory acquisition procedure to acquire the remaining shares. The Supervisory Board of Keops has authorised to request for the company's shares to be delisted from OMX Nordic Exchange Copenhagen A/S.

Now Stoðir is among the largest real estate companies in Scandinavia with a substantial market share in Sweden and Denmark and market leader in Iceland. The company has 600 properties in Sweden, Denmark, Iceland and Finland with a 2.8 million square meters of rental space and more than 3,800 tenants.

Credit Summary

Stoðir has issued four bonds since its foundation. The first bond (STOD 08 0125) is a zero coupon bill and was issued 26 January 2007. The bond will mature 25 January 2008.

The second bond (STOD 03 1) is an index-linked interest-paying bond, issued 5 February 2003. The bond bears 7.4% annual interest payable on 5 February, for the first time in 2004 and finally in 2011.

The third bond (STOD 06 2) is a non-indexed bond. It was issued 21 August 2006 and will mature 21 August 2011. The bond bears liquid interest rate of 3M REIBOR+1.9%, which will be paid at maturity.

The fourth bond (STOD 06 1) was issued 28 March 2006 and is an index-linked bond. The bond bears 6% interest rate paid annually. The bond will mature 28 March 2013.

Debt Maturity

0

6,000

12,000

18,000

24,000

30,000

36,000

42,000

48,000

54,000

60,000

66,000

72,000

78,000

84,000

2007 2008 2009 2010 2011 2012 2013*

ISKm

STOD 06 2

STOD 08 0125

STOD 06 1

STOD 03 1

Long-term debt

*Borrowings in 2013 will mature that year and later

Further Information


- STOD 03 1

- STOD 06 2

- STOD 06 1

Breakdown of revenues by type of property in 2006

Offices 38%

Retail 43%

Hotels 8%

Residential 9%

Warehouse 2%

Stoðir – Real estate, renting and business activities www.stodir.is

12 October 2007






Price (ISK): -

Market cap: -

No. of shares: -

Reuters: -

Bloomberg: -



Operating expenses -1,237 -838 -1,864 -1,981 -2,838 -472

Operating profit (EBITDA) 2,925 1,940 4,345 2,167 2,190 1,833

Depreciation 0 0 -18 -8 0 0

Profit before financial income (EBIT) 2,925 1,940 4,327 2,159 2,190 1,833Net financial income (expenses) 1,029 -4,245 -7,155 -1,577 -1,485 -1,771

Value adjustment of investment properties 236 7,403 16,212 1,133 1,767 0

Gain on the sale of investment properties 0 0 488 213 398 12

Share of profit (loss) in associates 465 -45 -174 318 632 -7

Profit before taxes 4,655 5,053 13,698 2,246 3,502 67

Taxes -319 -867 -2,303 -161 -651 -12Minority interest 0 0 0 -220 -146 0

Profit for the year (period) 4,336 4,186 11,395 1,865 2,705 55



Current assets 7,328 4,960 4,834 13,617 5,468 682

Total assets 170,319 104,702 156,634 72,538 45,450 35,083

Equity 34,077 15,297 22,717 10,832 9,452 6,856

Non-current liabilities 101,022 75,244 108,682 45,828 30,166 24,015Current liabilities 35,220 14,161 25,235 15,878 5,832 4,212


CASH FLOW STATEMENT ISK million 2006 2005 2004 2003

Net cash from (used in) operating activities 870 156 2,144 1,513 33 802

Net cash from (used in) investing activities -6,960 5,800 -38,942 -11,508 -4,505 -4,668

Net cash provided by financing activities 9,618 -4,967 37,202 9,135 5,268 3,971

Change in cash flow 3,528 989 404 -860 796 105

FINANCIAL RATIOS



Return on equity (ROE) - - 67.9% 18.6% 33.9% 1.0%Equity ratio 20.0% 14.6% 14.5% 14.9% 20.8% 19.5%

Current ratio 0.21 0.35 0.19 0.86 0.94 0.16

EBITDA interest coverage 0.86 0.33 0.49 0.76 0.86 1.14

Interest coverage ratio 0.86 0.33 0.48 0.76 0.86 1.14

Debt/Equity ratio 4.00 5.84 5.90 5.70 3.81 4.12Long-term debt/EBITDA 34.54 38.79 25.01 21.15 13.77 13.10

Earnings (loss) per share 1.73 1.93 5.24 0.86 1.26 0.04

Funds from Operation/Total Debt 2.2% 2.2% 3.2% 3.5% 1.2% 2.2%

Free Operating Cash Flow/Total Debt 0.6% 0.2% -26.3% -5.2% -2.9% -10.3%

Not listed


Outstanding bonds




SIMI 06 1 6.0% Semiannual coupon Indexed 02/04/2014 25/09/2007 8.95% 2.60% 5.39 14,000.00

Company Profile

Siminn provides all telecommunication, mobile and Internet services to private and corporate clients in Iceland. Its range of services and solutions includes fixed and mobile subscriptions as well as Broadband/DSL solutions, Live TV and Centrex network solutions. In July 2005 the Icelandic government privatized Siminn and sold its 98.8% share to Skipti ehf. The price for Siminn was ISK 66.7 billion. In December 2005, three companies Siminn, Íslenska sjónvarpsfélagið (The Icelandic Television Company) and the parent company, Skipti, merged into one, under the name Siminn. In March 2007 the following propositions of Siminn's board were approved: A new parent company called Skipti hf. was introduced with an ownership of 95% of Siminn's shares and Siminn was split into three companies: Siminn hf the main operating company; Jörfi Real Estate, and Mila which owns and operates the national trunk and access networks in Iceland. The largest shareholders in Skipti are Exista B.V. 43.6% and Kaupthing Bank hf. 29.1%.

Credit Summary

Siminn issued a bond (SIMI 06 1) 2 January 2006. The bond is indexed to the Consumer Price Index and it bears 6% annual interest rate, paid semiannually. Its maturity date is 2 April 2014. The parent company Skipti has now taken over Siminn's bond.

The Icelandic Telecom Market

Before 1998, the Icelandic telecom market was very uncompetitive; in fact a monopoly cared for most of Iceland's telecommunications services named Landssíminn or Iceland Telecom Ltd.

In 1998, a new law was passed which opened the market for competition. The first competitor was TAL, which focused at first mainly on mobile services. Others followed, the biggest one being Íslandssími. In the internet (ISP) market the competition was a lot tougher, with companies like e.g. Íslandssími, Halló!, Margmiðlun, Skíma, Skrín and Snerpa competing.

In 2003 TAL, Íslandssími and Halló! merged under the name Og Vodafone, now called Vodafone Iceland since 6 October 2006. Today Vodafone is one of Siminn's main rival.

The Icelandic telecom market is very distinct and sharply separated from telecom markets of other countries. One of the main characters of the market is a high responsiveness towards innovation, but the Icelandic market has one of the highest penetration rates for both Internet and mobile phone.

Debt Maturity

0

4,000

8,000

12,000

16,000

20,000

24,000

28,000

32,000

2007 2008 2009 2010 2011 2012 2013 2014

ISKm

Long-term debt

SIMI 06 1

Further Information


- SIMI 06 1

Recent News

On 23 August, Siminn announced it has bought all shares in the Danish company BusinessPhone A/S. With this transaction Siminn is acting on its strategy to support current and future Icelandic corporate customers as their partner in telecommunication and ICT services both in Iceland and northern Europe. The transaction will take effect on 1 September 2007.

Siminn Management

Chairman of Board: Lýður Guðmundsson

President and CEO: Brynjólfur Bjarnason

Siminn – Communication www.siminn.co.uk

12 October 2007




Price (ISK): -

Market cap: -

No. of shares: -

Reuters: -

Bloomberg: -



Operating expenses -11,377 -7,929 -16,853 -14,502 -12,896 -11,381

Operating profit (EBITDA) 4,317 3,969 8,442 7,539 7,523 7,380Depreciation -2,001 -2,003 -3,837 -3,933 -4,084 -4,464

Profit before financial income (EBIT) 2,316 1,966 4,605 3,606 3,439 2,916Net financial income (expenses) 519 -9,772 -8,936 693 511 -214

Share of profit (loss) in associates -2 -11 -6 -31 -90 -25Profit before taxes 2,833 -7,816 -4,338 4,268 3,860 2,677

Taxes -388 1,409 777 -236 -769 -534Minority interest -4 -2 -21 -12 -12 2

Profit for the year (period) 2,441 -6,410 -3,582 4,020 3,079 2,145



Current assets 8,598 6,366 7,807 5,238 8,408 7,662Total assets 92,365 84,827 88,907 83,255 29,192 28,593

Equity 32,108 26,250 29,447 32,801 17,501 16,161Non-current liabilities 46,316 51,568 50,903 44,602 4,755 6,912

Current liabilities 13,941 7,010 8,557 5,852 6,936 5,520


CASH FLOW STATEMENT

Net cash from (used in) operating activities 2,992 2,738 6,706 6,190 6,520 7,214

Net cash from (used in) investing activities -3,413 -761 -5,183 -2,747 -2,672 -2,839Net cash provided by financing activities 824 -1,584 -1,092 -5,804 -3,305 -6,017

Change in cash flow 402 393 431 -2,361 542 -1,642

FINANCIAL RATIOS


Profit before financial income (EBIT) 14.8% 16.5% 18.2% 16.4% 16.8% 15.5%Return on equity (ROE) - - -11.8% 16.0% 18.4% 13.4%

Equity ratio 34.6% 30.9% 33.0% 39.0% 59.0% 56.0%Current ratio 0.62 0.91 0.91 0.90 1.21 1.39

EBITDA interest coverage 2.20 1.79 2.11 5.13 12.02 8.22Interest coverage ratio 1.18 0.89 1.15 2.45 5.49 3.25

Debt/Equity ratio 1.89 2.23 2.03 1.54 0.67 0.78

Long-term debt/EBITDA 10.73 12.99 6.03 5.92 0.63 0.95Earnings (loss) per share 0.35 -0.21 -0.12 0.21 0.44 0.30

Funds from Operation/Total Debt 7.2% 7.3% 14.6% 16.2% 59.2% 54.3%Free Operating Cash Flow/Total Debt 1.6% 3.2% 7.8% 5.1% 34.9% 37.8%

Not listed


Outstanding bonds




NYSI 08 0319 0.0% Zero Coupon Nominal 19/03/2008 N/A 16.74% 2.10% 0.44 3,000.00

NYSI 03 1 8.5% Annual coupon Indexed 17/07/2008 23/01/2007 16.46% 2.20% 0.77 2,000.00

NYSI 05 1 5.5% Annual coupon Indexed 01/09/2010 N/A 9.84% 2.80% 2.74 1,000.00

NYSI 06 1 6.5% Annual coupon Indexed 08/02/2011 22/01/2007 9.89% 2.90% 2.96 2,000.00

Company Profile

Nýsir was established in 1991. It is an international group engaged in property investments and developments, PFI/PPP projects and related services. The group holds PFI/PPP contracts for many schools, sports centres and public buildings in Iceland and the UK. In Denmark the group is a commercial property investor.

The group offers in-house specialist services such as facilities management, mechanical and electrical design services, environmental and energy management services and construction management. The Nýsir group has specialised in the private delivery of education, health care, sports, leisure and cultural programmes. It has also participated in expansion projects, both as a consultant and an investor.

Nýsir's core business operates from offices located in Iceland, the UK and Denmark. It recently also opened office in Malta. Business opportunities are currently being pursued in other European countries and the Middle East.

Credit Summary

Nýsir has issued three listed bonds which all are linked to the Consumer Price Index (CPI) and are annual coupon bonds. As well they have listed one corporate bill. The first bond (NYSI 03 1) was issued 17 July 2003. It bears 8.5% interest rate and will mature 17 July 2008.

The second bond (NYSI 05 1) was issued 1 September 2005 and will mature 1 September 2010. The bond bears 5.5% interest rate.

The third bond (NYSI 06 1) was issued 8 February 2006. It bears 6.5% interest rate and its maturity date is 8 February 2011.

The corporate bill (NYSI 08 0319) was issued on 19 March 2007 and will mature one year later.

Further Information


- NYSI 03 1

- NYSI 05 1

- NYSI 06 1

Debt Maturity

0

2,000

4,000

6,000

8,000

10,000

12,000

2007 2008 2009 2010 2011 2012

ISKm

NYSI 03 1 NYSI 05 1 NYSI 06 1

NYSI 08 0319 Long-term debt

Organisational Chart 2007

Recent News

On 13 September, there was a change in Nýsir's management. Höskuldur Ásgeirsson has been hired as a CEO and he will take over from Sigfús Jónsson who has been the CEO for the last 10 years. Sigfús will be in charge of Nýsir's expansion in the UK as well as be on the company's board.

On 2 August, Nýsir and Bifröst University signed an agreement on the refinancing of Bifröst University and on Nýsir's purchase of the university's housing. Nýsir will rent the housing to Bifröst University and the university has the right to buy it back every five years.

Nýsir

PFI & Property

Investments Investments Operations

Land and

Property

Developments

Nýsir – Real estate, renting and business activities www.nysir.is

12 October 2007






Price (ISK): -

Market cap: -

No. of shares: -

Reuters: -

Bloomberg: -


Operating revenues 4,797 1,196 3,947 1,358 678 354

Other revenues 117 -28 366 1,935 793 0

Operating expenses -4,109 -728 -2,888 -924 -366 -134

Operating profit (EBITDA) 805 440 1,425 2,369 1,106 221

Depreciation -87 -37 -99 -40 -8 -1Profit before financial income (EBIT) 718 403 1,326 2,330 1,098 219

Net financial income (expenses) -737 -1,539 -2,174 -344 -71 -101

Share of profit (loss) in associates -19 -7 323 -5 5 0

Profit before taxes -38 -1,144 -526 1,980 1,033 118

Taxes 106 200 75 -356 -189 -18Minority interest -39 190 135 -283 -103 -32

Profit for the year (period) 29 -754 -316 1,341 741 68



Current assets 4,679 4,177 3,750 1,064 285 155

Total assets 44,781 34,814 44,540 16,349 9,996 5,295

Equity 5,990 3,720 6,270 3,885 2,291 943

Non-current liabilities 29,687 24,147 21,998 10,729 6,982 3,172Current liabilities 9,104 6,947 16,271 1,735 722 1,180


CASH FLOW STATEMENT ISK million H1 2007 H1 2006 2006 2005 2004 2003

Net cash from (used in) operating activities -759 282 435 141 -183 52

Net cash from (used in) investing activities -1,801 -5,892 -12,571 -1,895 -471 -2,233

Net cash provided by financing activities 3,170 7,063 12,897 2,119 712 2,232

Change in cash flow 610 1,453 761 365 59 51

FINANCIAL RATIOS



Return on equity (ROE) - - -7.7% 58.4% 58.4% 10.9%Equity ratio 11.4% 8.6% 11.8% 18.1% 16.4% 17.1%

Current ratio 0.51 0.60 0.23 0.61 0.39 0.13

EBITDA interest coverage - - 0.70 3.68 3.97 1.58

Interest coverage ratio - - 0.65 3.62 3.94 1.57

Debt/Equity ratio 7.59 10.35 7.26 4.22 4.71 4.82Long-term debt/EBITDA 36.88 54.93 15.44 4.53 6.31 14.37

Earnings (loss) per share 0.33 -8.38 -3.51 14.97 8.23 0.75

Funds from Operation/Total Debt -1.2% 1.2% 0.3% 0.8% 4.1% 2.8%

Free Operating Cash Flow/Total Debt -4.6% -1.4% -10.8% -6.6% -5.8% -50.8%

Not listed


Outstanding bonds




IAIR 08 0131 0.0% Zero Coupon Bond Nominal 31/01/2008 N/A 16.34% 1.70% 0.31 6,240.00

Company Profile

Icelandair Group is a holding company with 10 independent subsidiaries, focused on the airline and tourism sectors. The companies comprising Icelandair Group are: Icelandair, Loftleidir Icelandic, Bluebird Cargo, Icelandair Cargo, Icelandair Shared Services, Icelandair Ground Services (IGS), IceLease, Icelandair Hotels, Air Iceland and Iceland Travel.

The largest subsidiary Icelandair, the international airline, is responsible for approximately 50% of the group's turnover.

In October 2005, fundamental changes took place in FL Group hf. (Icelandair's largest shareholder at the time) where investments became the main focus. In the process its acquisitions and corporations were divided into groups and Icelandair Group was one of them. Although Icelandair Group has a brief history, as it was only established at the end of 2005, the company has a background of 70 years through its predecessors, the airline companies Loftleidir, Flugfélag Íslands and Flugleiðir. Icelandair Group was listed on the OMX Nordic Exchange Iceland in December 2006 as ICEAIR.

Credit Summary

Icelandair Group has one outstanding bond which was issued 31 January 2007 (IAIR 08 0131). The bond is a non-indexed zero coupon bond. The bond will mature 31 January 2008.

Further Information


§ OMX Nordic Exchange Iceland(www.omxgroup.com)

- IAIR 08 0131

Recent News

On 18 September 2007, Icelandair Group signed an agreement with a group of Czech private investors to buy the Czech airline Travel Service, the largest private airline in the Czech Republic. It will purchase 50% of the shares now and will buy at least additional 30% of the shares within one year.

12 September 2007, the chairman of the Board of Directors, Finnur Ingólfsson, decided to step down from the board and Gunnlaugur M. Sigmundsson was elected as a new chairman.

Debt Maturity

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2007 2008 2009 2010 2011 2012 2013 2014

ISKm

IAIR 08 0131

Securities

Long-term debt

Group Structure

Financial Calendar

Q3 interim account – 13 November 2007

Q4 and annual results – 20 February 2008


Icelandair Group

Aircraft

Trading

Airline

Operations

Loftleidir

IceLease

Bluebird Cargo

Icelandair

IGS

Icelandair Cargo

Travel and Tourism

Air Iceland

Icelandair

Hotels

Iceland Travel

Shared service

Fjárvakur

Icelandair Group – Transport and Storage

www.icelandairgroup.com

12 October 2007




Share price

24

26

28

30

32

34

36

38

40

Dec-06 Mar-07 Jun-07 Sep-07

ICEAIR

OMXI1


Price (ISK): 26.80



Reuters: ICEAIR.IC

Bloomberg: ICEAIR IR Equity

pro forma pro forma

INCOME STATEMENT ISK million 2008E 2007E 1H 2007 1H 2006 2006

Operating revenues 69,461 63,422 28,096 24,076 56,143

Operating expenses -62,452 -57,043 -26,855 -22,777 -50,085

Operating profit (EBITDA) 7,009 6,379 1,241 1,299 6,058

Depreciation and amortisation -3,247 -2,864 -1,438 -1,316 -2,732

Profit before financial income (EBIT) 3,762 3,515 -197 -17 3,326

Net financial income (expenses) -1587 -2013 -1201 753 -426

Share of profit of associates 0 127 127 67 160

Profit before taxes 2,175 1,629 -1,271 803 3,060

Taxes -392 -293 247 -145 -445

Minority interest 0 0 -4 0 6

Profit for the year (period) 1,783 1,336 -1,028 658 2,621

BALANCE SHEET ISK million 2008E 2007E 1H 2007 1H 2006 2006

Non-current assets 56,856 56,630 53,896 - 65,196

Current assets 16,984 14,330 17,702 - 11,421

Total assets 73,840 70,960 71,598 - 76,617

Equity 28,553 27,339 23,865 - 26,004

Non-current liabilities 21,967 21,967 16,874 - 21,967

Current liabilities 23,320 21,654 30,859 - 28,646

Total equity and liabilities 73,840 70,960 71,598 - 76,617

CASH FLOW STATEMENT

Net cash from (used in) operating activities 6,171 5,470 3,585 3,857 6,368

Net cash from (used in) investing activities -3,512 -3,208 -1,270 4,655 -21,040

Net cash provided by financing activities 0 0 -801 -1,284 17,320

Change in cash flow 2,659 2,262 1,514 7,228 2,648

FINANCIAL RATIOS

Operating profit (EBITDA) 10.1% 10.1% 4.4% 5.4% 10.8%

Profit before financial income (EBIT) 5.4% 5.5% -0.7% -0.1% 5.9%

Return on equity (ROE) 7.3% 5.2% - - -

Equity ratio 39.0% 38.5% 33.3% - 33.9%Current ratio 0.73 0.66 0.57 - 0.40

EBITDA interest coverage 4.78 3.41 0.94 1.83 5.97

Interest coverage ratio 2.70 1.91 -0.15 -0.02 3.28

Debt/Equity ratio 1.59 1.60 2.00 - 1.95

Long-term debt/EBITDA 3.13 3.44 13.60 - 3.63

Earnings (loss) per share 2.2 1.5 -1.03 0.66 2.62

Funds from Operation/Total Debt - - -3.5% - 9.7%

Free Operating Cash Flow/Total Debt 5.9% 5.2% 6.2% - 4.3%

Icelandair Group was first established at the end of 2005.


Outstanding bonds




EYRI 07 2 3m R+220 bps Quarterly coupon Nominal 20/08/2009 N/A 16.84% 2.20% 0.25 3,500.00

EYRI 05 1 5.5% Annual coupon Indexed 02/05/2012 20/09/2007 9.90% 3.20% 4.03 2,600.00

Company Profile

Eyrir Invest is an international investment company and was founded in July 2000. Its main emphasis is on investments in listed companies in Europe, especially in Scandinavia and the Baltic countries.

Eyrir Invest's mission is to increase shareholders' value by active ownership and trading of equities and other securities. Eyrir Invest places great emphasis on participating in operations and strategic planning of the business it invests in. It invests mainly i n industrial companies, banks and financial institutions and tries to invest in few companies at any given time.

About 75% of Eyrir Invest's holdings are shares in three listed companies: Marel (developer of food-processing systems) and Össur (producer of prosthetics and orthotics) in Iceland and Stork N.V. (industrial company) in Netherland.

Credit Summary

Eyrir Invest has one listed bond, EYRI 05 1. The bond was issued 9 May 2005 and will mature 2 May 2012. The bond bears 5.5% annual interest rate, paid annually.

It also has one unlisted bond, EYRI 07 2. The bond bears a liquid interest rate of 3M REIBOR + 2.20% and will mature 20 August 2009.

Further Information

§ OMX Nordic Exchange Iceland(www.omxgroup.com)

- EYRI 05 1

Portfolio by market value and liquidity in 2006

Small Cap3%

Mid Cap54%

Large Cap43%

Debt Maturity

0

2,000

4,000

6,000

8,000

10,000

12,000

2007 2008 2009 2010 2011 2012*

ISKm

EYRI 07 2

EYRI 05 1

Borrowings

Group Structure

Breakdown of Investments by Stock Exchanges in 2006

Oslo3% Amsterdam

14%

OMX Helsinki4%

OMX Stockholm

21%

OMX Iceland58%

Eyrir Invest

Marel (32.8%) Össur (21.8%) LME (40%) Other companies (5.4%)

Eyrir Invest – Investment Company www.eyririnvest.com

12 October 2007




Price (ISK): -

Market cap: -

No. of shares: -

Reuters: -

Bloomberg: -

INCOME STATEMENT ISK million 1H 2007 1H 2006 2006 2005 2004

Investment income 2,824 -1,120 2,112 5,067 2,626

Total expenses -173 -103 -118 -72 -37

Profit before taxes 2,651 -1,223 1,994 4,995 2,589Taxes -432 245 -330 -888 -443

Minority interest 0 0 0 0 0Profit before taxes 2,219 -978 1,664 4,107 2,145

BALANCE SHEET ISK million 1H 2007 1H 2006 2006 2005 2004

Assets

Securities 31,280 - - - - Shares in other companies - 19,748 24,212 15,487 7,435

Derivatives 919 182 338 11 41 Mutual funds - 49 0 121 859

Bonds - 890 1,271 26 25

Share subscripton 690 0 0 0 0Receivables 463 101 31 86 69

Other assets 1,521 892 412 1,838 143Total assets 34,873 21,862 26,265 17,569 8,572

EquityCapital stock 586 482 530 482 9

Contributed capital in excess of par 5,192 2,812 3,892 2,812 304Retained earnings 9,534 5,179 7,559 6,322 2,430

Total equity 15,312 8,473 11,981 9,617 2,743Liabilities

Interest-bearing borrowings 16,276 12,232 12,426 6,527 5,307

Taxes for the year 0 0 0 7 33Deferred income tax liability 2,092 1,118 1,680 1,354 473

Other liabilities 1,192 39 178 64 15Total liabilities 19,561 13,389 14,284 7,953 5,829

Total equity and liabilities 34,873 21,862 26,265 17,569 8,572

FINANCIAL RATIOS

Return on equity (ROE) - - 15.4% 66.5% -Equity ratio 43.9% 38.8% 45.6% 54.7% 32.0%

Debt/Equity ratio 1.28 1.58 1.19 0.83 2.12Interest bearing debt/Total assets 46.7% 56.0% 47.3% 37.1% 61.9%

Earnings (loss) per share 3.94 -2.03 - - -

29.06.2007: EURISK 84.02

Not listed


Outstanding bonds




NORV 07 1219 0.0% Zero coupon bond Nominal 19/12/2007 N/A 15.86% 1.20% 0.19 1,710.00

Company Profile

Norvik Banka was established in 1992 and operates in the Latvian and international financial markets. In December 2006 the Bank obtained a new name, Norvik Banka (the previous name was Lateko Banka). It has approximately 90 offices around Latvia and its head office is in Riga. Norvik Banka also has Information Centres in Moscow and London and an office in Minsk in Belarus. At year-end 2006, the bank had around 635 employees and around 80,000 clients, mostly local private individuals.

Norvik Banka's target is to be among the first five major banks of Latvia, providing universal and qualitative banking services to individuals and corporate clients at affordable rates.

About 51% of the bank's equity is held by the Icelandic company Straumborg ehf. Norvik Banka has been in cooperation with Fitch Ratings since 2001 and started cooperation with Moody's Investor Service in February 2007.

Credit Summary

Norvik Banka has one outstanding discounted bill of exchange denominated in ISK (NORV 07 1219). It is non-indexed zero coupon bond and was issued 19.03.2007. It is with maturity of 9 months (19.12.2007).

Recent News

In June 2007, Norvik Banka increased its capital to LVL 30,499,928. Previously capital of the bank amounted to LVL 22,499,928.

On 6 June 2007, Norvik Banka signed a syndicated loan facility agreement for 28.5 million euros. The loan interest rate is EURIBOR +0.70%.

Credit Rating

Norvik Bank has a credit rating from Moody's and Fitch.

Moody's Fitch

Long-term Ba3/Stable B+/Positive

Liabilities and Capital Structure at 31 December 2006

Deposits 67%

Other Liabilities

2%

Total Capital 10%

Due to credit

institutions 21%

Shareholders' Structure

Further Information


- NORV 07 1219

Norvik Banka

Straumborg ehf. 51.06%

Ice-Balt Invest ehf. 9.00%

Other 0.44%

Jurijs Šapurovs 19.75%

Andrejs Svircenkovs 19.75%

Norvik Banka – Bank

www.norvik.lv

12 October 2007




Price (ISK): -

Market cap (ISKm): -

No. of shares (m): -

Reuters: -

Bloomberg: -

INCOME STATEMENT LVL'000 1H 2007 1H 2006 2006 2005 2004 2003

Operating income 12,563 7,617 17,562 17,976 16,090 10,994

Total expenses -7,628 -6,296 -13,570 -11,306 -10,254 -8,135

Profit before taxes 4,935 1,321 3,992 6,670 5,836 2,859

Taxes -550 -319 -584 -718 -793 -540

Profit for the year (period) 4,385 1,002 3,408 5,952 5,043 2,319

BALANCE SHEET LVL'000 1H 2007 1H 2006 2006 2005 2004 2003

Assets

Cash and balances with the central bank 36,256 - 28,094 20,380 15,053 7,556

Balances due from credit institutions 39,943 - 30,695 94,179 173,159 177,053

Financial assets at fair value through profit or loss 81,449 - 42,313 24,443 21,269 15,542

Loans to customers and receivables 272,331 - 189,087 110,725 75,268 40,948

Available-for-sale financial assets 9,850 - 5,681 7,783 19,715 18,418

Other assets 11,206 - 8,917 7,452 9,583 7,944

Total assets 451,035 - 304,787 264,962 314,047 267,461

Equity

Share capital 30,500 - 22,500 15,500 12,250 9,931

Capital reserve 7 - 7 7 7 7

Revaluation reserve of available-for-sale financial assets -64 - -48 -261 -27 -

Retained earnings 9,387 - 5,979 27 187 -

Profit for the year 4,385 - 3,408 5,952 5,043 2,319

Total equity 44,215 - 31,846 21,225 17,460 12,257

Liabilities

Balances due to credit institutions 142,814 - 65,465 59,514 64,915 26,649

Customer deposits 229,370 - 202,308 180,288 225,868 223,455

Financial liabilities at fair value through profit or loss 2,236 - 1,288 261 192 151

Subordinated debt 1,776 - 1,777 2,030 2,026 750

Other liabilities 30,624 - 2,103 1,644 3,586 4,199

Total liabilities 406,820 - 272,941 243,737 296,587 255,204

Total equity and liabilities 451,035 - 304,787 264,962 314,047 267,461

FINANCIAL RATIOS

Return on equity (ROE) - - 12.8% 30.8% 33.9% 20.9%

Equity ratio 9.8% - 10.4% 8.0% 5.6% 4.6%

Debt/equity ratio 9.2 - 8.6 11.5 17.0 20.8

NII/Total Assets 1.5% - 3.5% 3.4% 1.8% 1.1%

Cost income ratio 60.7% 82.7% 77.3% 62.9% 63.7% 74.0%

Deposits/Total Assets 50.9% - 66.4% 68.0% 71.9% 83.5%

CAD 10.2% - 13.2% 14.2% 13.5% 12.0%

Earnings (loss) per share 0.21 0.06 0.20 0.44 0.43 0.25

29.06.2007: EURLVL 0.696

Not listed

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