SpareBank 1 SMN (OSL:MING) Government Package Of Measures - Exchange Of Government Securities For Covered Bonds

SpareBank 1 SMN (OSL:MING) As part of a package of measures designed to reduce the negative effects of the financial crisis, the Government (i.e. the Ministry of Finance) has set up an arrangement enabling banks that are eligible to sign up for Norges Bank's fixed-rate lending facility (F-loans) to swap covered bonds with government securities.

Together with other banks in the SpareBank 1 alliance, SpareBank 1 SMN has established a specialised mortgage institution - SpareBank 1 Boligkreditt. Since 2007 SpareBank 1 Boligkreditt has issued covered bonds worth about NOK 35 billion.

As now configured, the package of measures is not a swap arrangement pure and simple, but an arrangement whereby banks provide covered bonds as collateral for the government securities taken over. Participation in the arrangement may conflict with some of the bank's funding agreements that contain a negative pledge.

Responding to a request from Norges Bank (Norway's central bank), the Ministry of Finance is revising the arrangement involving the exchange of covered bonds with government securities. Under the new rule banks will also be eligible to participate through their mortgage institutions, since bank-owned mortgage institutions authorised to issue covered bonds can participate in the arrangement. The change is dealt with in the Final Budget Bill for 2008 to be presented today.

In SpareBank 1 SMN's assessment, the rule change will enable the bank to avail itself of the arrangement involving the exchange of covered bonds with government securities through its mortgage institution SpareBank 1 Boligkreditt.

SpareBank 1 SMN is in a satisfactory liquidity position, but will keep any need to participate in the arrangement under continuous review.

Contact persons: CEO Finn Haugan on +47 900 41 002 Executive Director (Finance) Kjell Fordal on +47 905 41 672

This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.

SpareBank 1 SMN

www.smn.no

ISIN: NO0006390301

Stock Identifier: XOSL.MING

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