New York, June 29, 2015 -- Moody's has today upgraded the government of Iceland's government debt ratings toBaa2 from Baa3. The rating outlook is stable.

The upgrade reflects the following key drivers:

1. The initiation of a careful process of capital account liberalization that is expected to reduce the country's   

   external vulnerabilities, while protecting economic and financial stability;

2. Expectation of further improvement in the government's gross and net debt position over the next three to four

   years, thanks to robust growth, further fiscal consolidation and debt pre-payments;

3. Improvements to macro-prudential and micro-prudential regulation designed to preserve the stability of Iceland's

   financial system in the future.

In a related decision, Moody's raised Iceland's country ceilings for long- and short-term foreign currency debt anddeposits to Baa2/P-2 from Baa3/P-3, and its country ceilings for local currency debt and deposits to Baa1 from

Baa2.

Please find the attached press release.