Reference is made to the press release of Icelandair Group (the “Company”) published on October 3rd 2018 regarding a potential non-compliance with the gross leverage covenants in clauses 12 (b) and 12 (c) (the “Covenants”) of the terms and conditions of the Company’s USD 190 million senior unsecured bonds carrying ISIN NO0010776982 (the “Bonds”).

In connection with the finalisation of the Q3 results as announced today, it was as previously communicated confirmed that the Company is in breach of the Covenants and the Company has on the date hereof given instructions to Nordic Trustee & Agency AB (publ), being the agent under the Bonds, to initiate a written procedure in order to request that the bondholders vote in favour of a temporary waiver of the breach of the Covenants throughout November 2018 to give more time for the discussions regarding a long-term solution. This procedure is in accordance with clause 18 of the Bonds. The temporary waiver has support from bondholders representing a majority of the Bonds.

DNB Markets is acting as the Company’s financial adviser.