TIDM80VD
RNS Number : 8833A
Ringkjobing Landbobank A/S
29 March 2017
RINGKJØBING LANDBOBANK AKTIESELSKAB
(incorporated with limited liability in Denmark)
EUR2,000,000,000
Euro Medium Term Note Programme
Under this EUR2,000,000,000 Euro Medium Term Note Programme (the
"Programme"), Ringkjøbing Landbobank Aktieselskab (the "Issuer" or
the "Bank") may from time to time issue notes (the "Notes")
denominated in any currency agreed between the Issuer and the
relevant Dealer(s) (as defined below).
This Prospectus supersedes any previous prospectus, offering
memorandum, programme memorandum, information memorandum or any
amendments or supplements thereto.
The maximum aggregate nominal amount of all Notes from time to
time outstanding under the Programme will not exceed
EUR2,000,000,000 (or its equivalent in other currencies calculated
as described in the Programme Agreement described herein), subject
to increase as described herein.
The Notes may be issued on a continuing basis to one or more of
the Dealers specified under "Overview of the Programme" and any
additional Dealer appointed under the Programme from time to time
by the Issuer (each a "Dealer" and together the "Dealers"), which
appointment may be for a specific issue or on an ongoing basis.
References in this Prospectus to the "relevant Dealer" shall, in
the case of an issue of Notes being (or intended to be) subscribed
by more than one Dealer, be to all Dealers agreeing to subscribe
such Notes. Notes may be issued in (a) uncertificated and
dematerialised book entry form ("VP Systems Notes") cleared through
either (i) the Danish Securities Centre (Da. "VP Securities A/S")
("VP Notes" and the "VP", respectively) or (ii) VP Lux S.à r.l.
("VP Lux Notes" and the "VP Lux", respectively) or (b) bearer form
("Bearer Notes").
An investment in Notes issued under the Programme involves
certain risks. For a discussion of these risks see "Risk
Factors".
Application has been made to the Financial Conduct Authority in
its capacity as competent authority under the Financial Services
and Markets Act 2000 (the "UK Listing Authority") for Notes issued
under the Programme during the 12 month period from the date of
this Prospectus to be admitted to the official list of the UK
Listing Authority (the "Official List") and to the London Stock
Exchange plc (the "London Stock Exchange") for such Notes to be
admitted to trading on the London Stock Exchange's regulated
market.
References in this Prospectus to Notes being "listed" (and all
related references) shall mean that such Notes have been admitted
to trading on the London Stock Exchange's regulated market and have
been admitted to the Official List. The London Stock Exchange's
regulated market is a regulated market for the purposes of
Directive 2004/39/EC (the "Markets in Financial Instruments
Directive").
Details of the aggregate nominal amount of Notes, interest (if
any) payable in respect of Notes and the issue price of Notes for
each Tranche (as defined under "Terms and Conditions of the Notes")
of Notes will be set out in a final terms document (the "Final
Terms").
The Bearer Notes of each Tranche will initially be represented
by a temporary global note or a permanent global note which will be
deposited on the issue date thereof with the common depository or,
as the case may be, common safekeeper on behalf of Euroclear Bank
SA/NV ("Euroclear") and Clearstream Banking, société anonyme
("Clearstream, Luxembourg") and/or any other agreed clearing
system. The VP Systems Notes of each Tranche will be issued in
uncertificated and dematerialised book entry form as more fully
described in the "Form of the Notes" and "Terms and Conditions of
the Notes".
The Issuer may agree with any Dealer that Notes may be issued in
a form not contemplated by the Terms and Conditions of the Notes
herein, in which event a new Prospectus, if appropriate, will be
made available which will describe the effect of the agreement
reached in relation to such Notes.
The Issuer has been rated A1 by Moody's Investors Service Ltd.
Where a certain Series of Notes is rated, such rating will be
specified in the applicable Final Terms. Please also refer to
"Credit ratings may not reflect all risks" in the Risk Factors
section of this Prospectus. For the purposes of the credit ratings
included and referred to in this Prospectus, Moody's Investors
Service Ltd. is established in the European Union and is registered
under the CRA Regulation.
Arranger
Nordea
Dealers
Danske Bank Nordea
Landesbank Baden-Württemberg SEB
The date of this Prospectus is 28 March 2017.
This Prospectus comprises a base prospectus for the purposes of
Article 5.4 of the Prospectus Directive.
The Issuer (the "Responsible Person") accepts responsibility for
the information contained in this Prospectus and the Final Terms
for each Tranche of Notes issued under the Programme. To the best
of the knowledge of the Issuer (having taken all reasonable care to
ensure that such is the case) the information contained in this
Prospectus is in accordance with the facts and does not omit
anything likely to affect the import of such information.
Subject as provided in the applicable Final Terms, the only
persons authorised to use this Prospectus in connection with an
offer of Notes are the persons named in the applicable Final Terms
as the relevant Dealer or the Managers, as the case may be.
Copies of Final Terms will be available from the registered
office of the Issuer and (in the case of Bearer Notes) the
specified office set out below of each of the Paying Agents (as
defined below) or (in the case of VP Systems Notes) the specified
office of VP Issuing Agent (as defined below).
This Prospectus is to be read in conjunction with all documents
which are deemed to be incorporated herein by reference (see
"Documents Incorporated by Reference"). This Prospectus shall be
read and construed on the basis that such documents are
incorporated and form part of this Prospectus.
Save for the Issuer, no party has independently verified the
information contained herein. Accordingly, no representation,
warranty or undertaking, express or implied, is made and no
responsibility or liability is accepted by the Dealers as to the
accuracy or completeness of the information contained or
incorporated in this Prospectus or any other information provided
by the Issuer in connection with the Programme. No Dealer accepts
any liability in relation to the information contained or
incorporated by reference in this Prospectus or any other
information provided by the Issuer in connection with the
Programme.
No person is or has been authorised by the Issuer to give any
information or to make any representation not contained in or not
consistent with this Prospectus or any other information supplied
in connection with the Programme or the Notes and, if given or
made, such information or representation must not be relied upon as
having been authorised by the Issuer or any of the Dealers.
Neither this Prospectus nor any other information supplied in
connection with the Programme or any Notes (a) is intended to
provide the basis of any credit or other evaluation or (b) should
be considered as a recommendation by the Issuer or any of the
Dealers that any recipient of this Prospectus or any other
information supplied in connection with the Programme or any Notes
should purchase any Notes. Each investor contemplating purchasing
any Notes should make its own independent investigation of the
financial condition and affairs, and its own appraisal of the
creditworthiness, of the Issuer. Neither this Prospectus nor any
other information supplied in connection with the Programme or the
issue of any Notes constitutes an offer or invitation by or on
behalf of the Issuer or any of the Dealers to any person to
subscribe for or to purchase any Notes.
Neither the delivery of this Prospectus nor the offering, sale
or delivery of any Notes shall in any circumstances imply that the
information contained herein concerning the Issuer is correct at
any time subsequent to the date hereof or that any other
information supplied in connection with the Programme is correct as
of any time subsequent to the date indicated in the document
containing the same. The Dealers expressly do not undertake to
review the financial condition or affairs of the Issuer during the
life of the Programme or to advise any investor in the Notes of any
information coming to their attention.
The Notes have not been and will not be registered under the
United States Securities Act of 1933, as amended, (the "Securities
Act") and are subject to U.S. tax law requirements. Subject to
certain exceptions, Notes may not be offered, sold or delivered
within the United States or to, or for the account or benefit of,
U.S. persons (see "Subscription and Sale").
This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any Notes in any jurisdiction to
any person to whom it is unlawful to make the offer or solicitation
in such jurisdiction. The distribution of this Prospectus and the
offer or sale of Notes may be restricted by law in certain
jurisdictions. The Issuer and the Dealers do not represent that
this Prospectus may be lawfully distributed, or that any Notes may
be lawfully offered, in compliance with any applicable registration
or other requirements in any such jurisdiction, or pursuant to an
exemption available thereunder, or assume any responsibility for
facilitating any such distribution or offering. In particular, no
action has been taken by the Issuer or the Dealers which is
intended to permit a public offering of any Notes or distribution
of this Prospectus in any jurisdiction where action for that
purpose is required. Accordingly, no Notes may be offered or sold,
directly or indirectly, and neither this Prospectus nor any
advertisement or other offering material may be distributed or
published in any jurisdiction, except under
circumstances that will result in compliance with any applicable
laws and regulations. Persons into whose possession this Prospectus
or any Notes may come must inform themselves about, and observe,
any such restrictions on the distribution of this Prospectus and
the offering and sale of Notes. In particular, there are
restrictions on the distribution of this Prospectus and the offer
or sale of Notes in the United States, the European Economic Area
(including the United Kingdom and Denmark) and Japan, see
"Subscription and Sale".
The Notes may not be a suitable investment for all investors.
Each potential investor in the Notes must determine the suitability
of that investment in light of its own circumstances. In
particular, each potential investor should:
(i) have sufficient knowledge and experience to make a
meaningful evaluation of the Notes, the merits and risks of
investing in the Notes and the information contained or
incorporated by reference in this Prospectus or any applicable
supplement;
(ii) have access to, and knowledge of, appropriate analytical
tools to evaluate, in the context of its particular financial
situation, an investment in the Notes and the impact the Notes will
have on its overall investment portfolio;
(iii) have sufficient financial resources and liquidity to bear
all of the risks of an investment in the Notes, including where the
currency for principal or interest payments is different from the
potential investor's currency;
(iv) understand thoroughly the terms of the Notes and be
familiar with the behaviour of any financial markets; and
(v) be able to evaluate (either alone or with the help of a
financial adviser) possible scenarios for economic, interest rate
and other factors that may affect its investment and its ability to
bear the applicable risks.
If the Final Terms in respect of any Notes includes a legend
entitled "Prohibition of Sales to EEA Retail Investors", the Notes
are not intended, from 1 January 2018, to be offered, sold or
otherwise made available to and, with effect from such date, should
not be offered, sold or otherwise made available to any retail
investor in the European Economic Area ("EEA"). For these purposes,
a retail investor means a person who is one (or more) of: (i) a
retail client as defined in point (11) of Article 4(1) of Directive
2014/65/EU ("MiFID II"); (ii) a customer within the meaning of
Directive 2002/92/EC ("IMD"), where that customer would not qualify
as a professional client as defined in point (10) of Article 4(1)
of MiFID II; or (iii) not a qualified investor as defined in
Directive 2003/71/EC (as amended, the "Prospectus Directive").
Consequently no key information document required by Regulation
(EU) No 1286/2014 (the "PRIIPs Regulation") for offering or selling
the Notes or otherwise making them available to retail investors in
the EEA has been prepared and therefore offering or selling the
Notes or otherwise making them available to any retail investor in
the EEA may be unlawful under the PRIIPS Regulation.
Some Notes are complex financial instruments. Sophisticated
institutional investors generally do not purchase complex financial
instruments as stand--alone investments. They purchase complex
financial instruments as a way to reduce risk or enhance yield with
an understood, measured, appropriate addition of risk to their
overall portfolios. A potential investor should not invest in Notes
which are complex financial instruments unless it has the expertise
(either alone or with a financial adviser) to evaluate how the
Notes will perform under changing conditions, the resulting effects
on the value of the Notes and the impact this investment will have
on the potential investor's overall investment portfolio.
The investment activities of certain investors are subject to
legal investment laws and regulations, or review or regulation by
certain authorities. Each potential investor should consult its
legal advisers to determine whether and to what extent (1) Notes
are legal investments for it, (2) Notes can be used as collateral
for various types of borrowing and (3) other restrictions apply to
its purchase or pledge of any Notes. Financial institutions should
consult their legal advisors or the appropriate regulators to
determine the appropriate treatment of Notes under any applicable
risk--based capital or similar rules.
All references in this document to "U.S. dollars", "U.S.$" and
"$" refer to United States dollars and to "Danish Kroner" and "DKK"
as relevant refer to Danish Kroner. In addition, all references to
"Sterling" and "GBP" refer to pounds sterling and to "euro" and
"EUR" refer to the currency introduced at the start of the third
stage of European economic and monetary union pursuant to the
Treaty on the Functioning of the European Union, as amended.
Further, all references to "Norwegian Kroner" and "NOK" refer to
Norwegian Kroner and "Swedish Kroner" and "SEK" refer to Swedish
Kroner.
In connection with the issue of any Tranche of Notes, the Dealer
or Dealers (if any) acting named as the Stabilising Manager(s) (or
persons acting on behalf of any Stabilising Manager(s)) in the
applicable Final Terms may over--allot Notes or effect transactions
with a view to supporting the market price of the Notes at a level
higher than that which might otherwise prevail. However,
stabilisation may not necessarily occur. Any stabilisation action
may begin on or after the date on which adequate public disclosure
of the terms of the offer of the relevant Tranche of Notes is made
and, if begun, may cease at any time, but it must end no later than
the earlier of 30 days after the issue date of the relevant Tranche
of Notes and 60 days after the date of the allotment of the
relevant Tranche of Notes. Any stabilisation action or
over--allotment must be conducted by the relevant Stabilising
Manager(s) (or persons acting on behalf of any Stabilising
Manager(s)) in accordance with all applicable laws and rules.
CONTENTS
Page
Overview of the Programme
Risk Factors
Documents Incorporated by Reference
Form of the Notes
Form of Final Terms
Terms and Conditions of the Notes
Use of Proceeds
Description of the Issuer
Taxation
Subscription and Sale
General Information
Index of Defined Terms
Overview of the Programme
The following overview does not purport to be complete and is taken from, and is qualified
in its entirety by, the remainder of this Prospectus and, in relation to the terms and conditions
of any particular Tranche of Notes, the relevant Final Terms.
This Overview constitutes a general description of the Programme for the purposes of Article
22.5(3) of Commission Regulation (EC) No 809/2004 implementing the Prospectus Directive.
Words and expressions defined in "Form of the Notes" and "Terms and Conditions of the Notes"
shall have the same meanings in this Overview.
Issuer: Ringkjøbing Landbobank Aktieselskab
Risk Factors: There are certain factors that may affect the Issuer's
ability to fulfil its obligations under
Notes issued under the Programme. These are set out under
"Risk Factors" below and include
credit risk arising primarily from direct lending
activities, interest rate risk arising from
changes in interest rates, share risk arising from
investment of assets in shares, foreign--exchange
risk arising from changes in exchange rates, liquidity risk
arising from cash fund availability,
property risk arising from a decline in the value of the
Issuer's portfolio of domicile and
investment properties, operational risk such as inadequate
or failed internal processes and
other risks such as maintaining minimum capital
requirements. In addition, there are certain
factors which are material for the purpose of assessing the
market risks associated with Notes
issued under the Programme. These are set out under "Risk
Factors" and include certain risks
relating to the structure of particular Series of Notes and
certain market risks.
Description: Euro Medium Term Note Programme
Arranger: Nordea Bank AB (Publ)
Dealers: Danske Bank A/S
Nordea Bank AB (Publ)
Landesbank Baden-Württemberg
Skandinaviska Enskilda Banken AB (publ)
and any other Dealers appointed in accordance with the
Programme Agreement.
Certain Restrictions: Each issue of Notes denominated in a currency in respect of
which particular laws, guidelines,
regulations, restrictions or reporting requirements apply
will only be issued in circumstances
which comply with such laws, guidelines, regulations,
restrictions or reporting requirements
from time to time (see "Subscription and Sale") including
the following restrictions applicable
at the date of this Prospectus.
Notes having a maturity of less than one year
Notes having a maturity of less than one year will, if the
proceeds of the issue are accepted
in the United Kingdom, constitute deposits for the purposes
of the prohibition on accepting
deposits contained in section 19 of the Financial Services
and Markets Act 2000 unless they
are issued to a limited class of professional investors and
have a denomination of at least
GBP100,000 or its equivalent, see "Subscription and Sale".
Issuing and Principal Paying Agent (Bearer Notes): BNP Paribas Securities Services, Luxembourg Branch
Programme Size: Up to EUR2,000,000,000 (or its equivalent in other
currencies calculated as described in the
Programme Agreement) outstanding at any time. The Issuer may
increase the amount of the Programme
in accordance with the terms of the Programme Agreement.
Distribution: Notes may be distributed by way of private or public
placement and in each case on a syndicated
or non--syndicated basis.
Currencies: Notes (other than VP Lux Notes) may be denominated in euro,
Sterling, U.S. dollars, yen and
subject to any applicable legal or regulatory restrictions,
any other currency agreed between
the Issuer and the relevant Dealer. VP Lux Notes may only be
denominated in euro.
Redenomination: The applicable Final Terms may provide that certain Notes
may be redenominated in euro. The
relevant provisions applicable to any such redenomination
are contained in Condition 4.
Maturities: The Notes will have such maturities as may be agreed between
the Issuer and the relevant Dealer,
subject to such minimum or maximum maturities as may be
allowed or required from time to time
by the relevant central bank (or equivalent body) or any
laws or regulations applicable to
the Issuer or the relevant Specified Currency.
Issue Price: Notes may be issued on a fully--paid basis and at an issue
price which is at par or at a discount
to, or premium over, par.
Form of Notes: The Notes may be issued in bearer or, in the case of VP
Systems Notes, in uncertificated and
dematerialised book entry form, as more fully described in
"Form of the Notes".
Fixed Rate Notes: Fixed interest will be payable on such date or dates as may
be agreed between the Issuer and
the relevant Dealer and on redemption and will be calculated
on the basis of such Day Count
Fraction as may be agreed between the Issuer and the
relevant Dealer.
Floating Rate Notes: 1. Floating Rate Notes will bear interest at a rate
determined:
2. on the same basis as the floating rate under a notional
interest rate swap transaction
in the relevant Specified Currency governed by an agreement
incorporating the 2006 ISDA Definitions
(as published by the International Swaps and Derivatives
Association, Inc., and as amended
and updated as at the Issue Date of the first Tranche of the
Notes of the relevant Series);
or
3. by reference to LIBOR, CIBOR, EURIBOR, STIBOR or NIBOR as
adjusted for any applicable margin.
Interest periods will be specified in the relevant Final
Terms.
The margin (if any) relating to such floating rate will be
agreed between the Issuer and the
relevant Dealer for each Series of Floating Rate Notes.
Other provisions in relation to Floating Rate Notes: Floating Rate Notes may also have a maximum interest rate, a
minimum interest rate or both.
Interest on Floating Rate Notes in respect of each Interest
Period, will be payable on such
Interest Payment Dates, and will be calculated on the basis
of such Day Count Fraction, as
specified in the relevant Final Terms.
Reset Notes: The rate of interest in respect of Reset Notes will change
on the relevant Reset Dates. The
revised rate of interest may be either a Fixed Rate or a
Floating Rate for the relevant Reset
Period.
Zero Coupon Notes: Zero Coupon Notes will be offered and sold at a discount to
their nominal amount and will
not bear interest.
Redemption: The applicable Final Terms will indicate either that the
relevant Notes cannot be redeemed
prior to their stated maturity (other than in specified
instalments, if applicable, or for
taxation reasons or following an Event of Default) or that
such Notes will be redeemable at
the option of the Issuer and/or the Noteholders upon giving
notice to the Noteholders or the
Issuer, as the case may be, on a date or dates specified
prior to such stated maturity and
at a price or prices and on such other terms as may be
agreed between the Issuer and the relevant
Dealer.
The applicable Final Terms may provide that Notes may be
redeemable in two or more instalments
of such amounts and on such dates as are indicated in the
applicable Final Terms.
Notes having a maturity of less than one year may be subject
to restrictions on their denomination
and distribution, see "Certain Restrictions - Notes having a
maturity of less than one year"
above.
Denomination of Notes: The Notes will be issued in such denominations as may be
agreed between the Issuer and the
relevant Dealer, subject to a minimum denomination of
EUR100,000 (or its equivalent in other
currencies). Furthermore, the minimum denomination of each
Note will be such amount as may
be allowed or required from time to time by the relevant
central bank (or equivalent body)
or any laws or regulations applicable to the relevant
Specified Currency, see "Certain Restrictions
- Notes having a maturity of less than one year" above.
Taxation: All payments in respect of the Notes will be made without
deduction for or on account of withholding
taxes imposed by any Tax Jurisdiction as provided in
Condition 8. In the event that any such
deduction is made, the Issuer will, save in certain limited
circumstances provided in Condition
8, be required to pay additional amounts to cover the
amounts so deducted.
Negative Pledge: The terms of the Notes will contain a negative pledge
provision as further described in Condition
3.
Cross Default: The terms of the Notes will contain a cross default
provision as further described in Condition
10.
Status of the Senior Notes: The Senior Notes will constitute direct, unconditional,
unsubordinated and (subject to the
provisions of Condition 3) unsecured obligations of the
Issuer and will rank pari passu among
themselves and (save for certain obligations required to be
preferred by law) equally with
all other unsecured obligations (other than subordinated
obligations, if any) of the Issuer,
from time to time outstanding.
Status of Subordinated Notes: The Subordinated Notes will be subordinated as described in
Condition 2.
Clearing Systems: Euroclear and Clearstream, Luxembourg and/or VP and/or VP
Lux and/or such other clearing system(s)
as may be specified in the relevant Final Terms.
Rating: Where a certain Series of Notes is rated, such rating will
be specified in the applicable
Final Terms.
Listing, approval and admission to trading: Application has been made to the UK Listing Authority for
Notes issued under the Programme
to be admitted to the Official List and to the London Stock
Exchange for such Notes to be
admitted to trading on the London Stock Exchange's regulated
market.
Applications may be made to list VP Systems Notes on Nasdaq
Copenhagen. Any such applications
will be in accordance with applicable laws and regulations
governing the listing of VP Systems
Notes on Nasdaq Copenhagen from time to time.
Governing Law: The Notes and any non--contractual obligations arising out
of or in connection with them will
be governed by, and construed in accordance with, English
law, except (a) Conditions 1.2,
2.2 and 10.2, the registration and dematerialisation of VP
Notes in the VP and the dematerialisation
of VP Lux Notes which are governed by, and shall be
construed in accordance with, the laws
of the Kingdom of Denmark and (b) the registration of VP Lux
Notes in the VP Lux which is
governed by, and shall be construed in accordance with,
Luxembourg law.
VP Systems Notes must comply with the relevant regulations
of the VP or the VP Lux, as the
case may be, and the holders of VP Systems Notes will be
entitled to the rights and are subject
to the obligations and liabilities which arise under the
relevant Danish or Luxembourg regulations
and legislation.
Selling Restrictions: There are restrictions on the offer, sale and transfer of
the Notes in the United States,
the European Economic Area (including the United Kingdom and
Denmark) and Japan and such other
restrictions as may be required in connection with the
offering and sale of a particular Tranche
of Notes, see "Subscription and Sale".
United States Selling Restrictions: Regulation S, Category 2. TEFRA C or D/TEFRA not applicable,
as specified in the applicable
Final Terms.
Risk Factors
The Issuer believes that the following factors may affect its
ability to fulfil its obligations under Notes issued under the
Programme. All of these factors are contingencies which may or may
not occur and the Issuer is not in a position to express a view on
the likelihood of any such contingency occurring.
In addition, factors which are material for the purpose of
assessing the market risks associated with Notes issued under the
Programme are also described below.
The Issuer believes that the factors described below represent
the principal risks inherent in investing in Notes issued under the
Programme, but the inability of the Issuer to pay interest,
principal or other amounts on or in connection with any Notes may
occur for other reasons which may not be considered significant
risks by the Issuer based on information currently available to it
or which it may not currently be able to anticipate. Prospective
investors should also read the detailed information set out
elsewhere in this Prospectus and reach their own views prior to
making any investment decision.
Factors that may affect the Issuer's ability to fulfil its
obligations under Notes issued under the Programme
The Issuer is regulated by the Danish Financial Supervisory
Authority (the "DFSA") which ensures a regulatory environment
comparable to the regulatory environments of other Western European
banks.
In the course of its business activities the Issuer is exposed
to a variety of risks.
The Issuer's general policy with respect to assumption of risks
is that the Issuer only assumes the risks, which are in accordance
with the business principles under which the Issuer is operated,
and which the Issuer possesses the competencies to manage. For an
outline of how the Issuer manages risk please see "Description of
the Issuer - Risks and risk management" which also is referred to
in relation to the risk factors set out in this section.
Credit risk
Credit risk is defined as the risk that payments owed to the
Issuer are judged not to be collectable because of certain
customers' lack of ability or will to pay at the agreed time.
The Issuer generally assumes risks on the basis of a credit
policy, the specified aim of which is that there must be a
well-balanced relationship between risks assumed and the return
achieved by the Issuer, that the Issuer's losses must be at an
acceptable level relative to the Danish financial sector, and
finally that losses must be able to be accommodated within the
Issuer's results, even in extreme situations.
Compared to other Danish banks, the Issuer has a relatively
large exposure to wind turbine financing but considers this to be a
low risk exposure. The exposure can be characterised as first
priority financing of Danish and German wind turbines, whereas the
owners of Danish wind turbines receive a subsidy for a certain
electricity production and the owners of German wind turbines
receive the proceeds from a fixed price electricity payment
scheme.
The Issuer is exposed to the agricultural sector in Denmark and
may suffer losses that may be material in amount in relation to
this sector. During recent years, the agricultural sector has
experienced difficult conditions. The difficult conditions
continued in 2016, but at the end of the year the situation for the
livestock farmers improved due to an increase in the current prices
to the producers. Besides this, the sector is still characterised
by a high debt burden. The Issuer has built up loss reserves
relating to loans to the agricultural sector, which have been
calculated on the basis of conservative land valuations, but there
can be no assurance that the Issuer will not suffer more
losses.
The Issuer also has exposure to the real estate sector, which
generally falls within the following two categories:
(i) Loans with first mortgages on real property and construction
financing without prior creditors.). For the former loans, sizes
for such mortgage loans are calculated on the basis of actual cash
flow of the properties with allowances, inter alia, for
maintenance, vacancies and administration.
(ii) Other forms of real estate financing, including loans with
a second mortgage on real property and a strong lessee with an
irrevocable lease and with scheduled repayment within the expiry of
lease agreements. For the latter loans, sizes for such financing
are calculated in the basis of cash flow analysis of the properties
and a detailed examination of the financial status of the lessee
and the investors.
The Issuer considers the portfolio to be well positioned against
down turns in the real estate sector. However, an increased down
turn in the real estate sector or an increase of the interest rate
may affect the Issuer negatively.
The Issuer has set up a number of principles and procedures to
manage the external and internal risks, which it is exposed to.
However, notwithstanding the principles and procedures that the
Issuer has put in place, there can be no assurance that the Issuer
will not suffer losses from credit risk in the future that may be
material in amount.
Liquidity risk
Liquidity risk refers to the ability of the Issuer to ensure the
availability of appropriate cash funds to meet its payments
obligations, stemming from mismatches between the maturities of
assets and liabilities, and the liquidity risk arises in the
general funding of the Issuer's activities and in the management of
its operations.
It is the policy of the Issuer not to have uncovered net funding
requirements, and the total funding of the loans portfolio is also
reconciled with the underlying return flow on the portfolio. It is
also the Issuer's policy not to depend on the short-term money
market, and the Issuer's objective is also to be able to manage
liquidity for up to 12 months without access to the financial
markets.
However, there can be no assurance that the Issuer will not
suffer losses from liquidity risks in the future that may be
material in amount.
During recent years, the Issuer has reduced its market funding
and replaced this by deposits. As of 31 December 2016, deposits and
other debt exceeded loans and other receivables of the Issuer. This
makes the Issuer less dependent on market funding. However, because
the Issuer receives a significant portion of its funding from
deposits, the Issuer is subject to the risk that depositors could
withdraw their funds at a rate faster than the rate at which
borrowers repay their loans, thus causing a strain upon the
Issuer's liquidity.
A dislocated credit environment compounds the risk that the
Issuer, in such a situation, will not be able to access funds at
favourable rates. These and other factors could also lead creditors
to form a negative view of the Issuer's liquidity, which could
result in less favourable credit ratings, higher borrowing costs
and less accessible funds.
An inability on the Issuer's part to access funds, or to access
the markets from which it raises funds, may put the Issuer's
position in relation to its liquid assets at risk and lead it to
its inability to finance its operations adequately.
Operational risk
The operational risk is defined as the risk of direct or
indirect financial losses because of faults in internal processes
and systems, human errors or external events.
There can be no assurance that the Issuer will not suffer losses
from operational risks in the future that may be material in
amount.
Market risks
Market risk is defined as the risk that the market value of the
Issuer's assets and liabilities will change because of changes in
market conditions. The Issuer's basic policy with respect to market
risks is that the Issuer wishes to keep such risks at a moderate to
a relatively low level depending on the risk type which is
reflected in the risk management system as described in the
business description.
The Issuer's total market risk is comprised of interest rate
risk, foreign exchange risk, share risk and property risk.
Interest rate risk
Interest rate risk is defined as the risk of loss arising from
changes in interest rates. Interest rate risk arises both in
interest-bearing claims and liabilities as well as in
derivatives.
Despite systems in place there can be no assurance that the
Issuer will not suffer losses from interest rate risk in the future
that may be material in amount.
Share risk
The Issuer invests some of its assets in shares, which are
generally subject to greater risks and volatility than bonds. There
can be no assurance that the Issuer will not suffer losses from
share risks in the future that may be material in amount.
Foreign-exchange risk
Exchange rate changes could negatively impact the Issuer. There
can be no assurance that the Issuer will not suffer losses from
foreign-exchange risks in the future that may be material in
amount.
Property risk
A decline in the value of the Issuer's portfolio of domicile and
investment properties could negatively impact the Issuer. There can
be no assurance that the Issuer will not suffer losses from
property risks in the future that may be material in amount.
Regulatory capital risk
The Issuer is subject to supervision by the DFSA, which provides
for minimum levels of regulatory capital, which are comparable with
that of other banks in Western Europe. If the Issuer were to fail
to maintain its ratios, this may result in administrative actions
or sanctions against it which may impact the Issuer's ability to
fulfil its obligations under the Notes.
In December 2010, the Basel Committee on Banking Supervision
finalised its proposed new capital adequacy and liquidity
requirements ("Basel III"), including increases to the minimum
Common Equity Tier 1 capital requirement and the total Tier 1
capital requirement, the adoption of a capital conservation buffer
and a countercyclical buffer, and the adoption of ratios relating
to leverage, liquidity coverage and net stable funding.
The final versions of the Regulation of the European Parliament
and of the Council on prudential requirements for credit
institutions and investment firms (the "CRD IV Regulation") and the
Directive of the European Parliament and of the Council on
prudential requirements for credit institutions and investment
firms (the "CRD IV Directive") adopted in June 2013 entered into
force on 1 January 2014, with Danish implementation as of 31 March
2014. The framework implements among other things Basel III in the
EU. Each of the CRD IV Regulation and the CRD IV Directive covers a
wide range of prudent requirements for banks across EU member
states, including capital requirements, stricter and aligned
definitions of capital, risk exposure, leverage ratio, large
exposure framework and liquidity and funding requirements. The CRD
IV Directive covers the overall supervisory framework for banks
(including the individual risk assessment) and other measures such
as the combined capital buffer requirement, governance and
remuneration requirements.
The CRD IV Directive has been implemented in the Danish
Financial Business Act, Consolidated Act no. 174 of 31 January 2017
as amended from time to time (the "Danish Financial Business Act"),
whereas the CRD IV Regulation applies directly without
implementation in national law. The phase-in of the capital
requirements will follow the path set out in the CRD IV Regulation
and the CRD IV Directive, the latter by implementation through the
Danish Financial Business Act. The European Banking Authority will
continue to publish detailed rules through binding technical
standards for many areas including, inter alia, liquidity
requirements and certain aspects of capital requirements.
Under the CRD IV Directive, credit institutions are required to
hold a minimum amount of regulatory capital equal to 8 per cent. of
Risk Exposure Amounts (of which at least 4.5 per cent. must be
Common Equity Tier 1 capital, and at least 6 per cent. must be Tier
1 capital). In addition to these so-called minimum own funds Pillar
1 requirements (the "minimum own funds requirement"), the CRD IV
Directive (including, but not limited to, Article 128) also
introduces capital buffer requirements, which must be met with
Common Equity Tier 1 capital. For the Issuer, the capital buffer
requirement is comprised of two elements (referred to collectively
as the "combined buffer"): (i) the capital conservation buffer and
(ii) the institution-specific countercyclical buffer.
In addition to the minimum own funds requirements described
above, the CRD IV Directive (including, but not limited to, Article
104(1)(a)) contemplates that competent authorities may require
additional "Pillar 2" capital to be maintained by a credit
institution relating to elements of risks which are not fully
captured by the minimum own funds requirements (the "additional own
funds requirements") or to address macro-prudential
requirements.
The European Banking Authority published guidelines on 19
December 2014 addressed to national supervisors on common
procedures and methodologies for the supervisory review and
evaluation process ("SREP") which contained guidelines proposing a
common approach to determining the amount and composition of
additional own funds requirements and which became effective by 1
January 2016. Under these guidelines, national supervisors should
set a composition requirement for the additional own funds
requirements to cover certain risks, of at least 56 per cent.
Common Equity Tier 1 capital and at least 75 per cent. Tier 1
capital. The guidelines also contemplate that national supervisors
should not set additional own funds requirements in respect of
risks which are already covered by capital buffer requirements
and/or additional macro-prudential requirements. The SREP was
implemented in Denmark with effect as of 1 January 2016 by
Executive Order no. 1587 of 3 December 2015 on Capital to Fulfil
the Individual Solvency Requirement of Credit Institutions.
Therefore, Danish Institutions are required to meet their
additional own funds requirement with at least 56 per cent. Common
Equity Tier 1 capital and at least 75 per cent. Tier 1 capital. The
remaining 25 per cent. of the additional own funds requirement may
be fulfilled with Common Equity Tier 1 capital, Additional Tier 1
capital or Tier 2 capital. Additional Tier 1 capital instruments or
Tier 2 capital instruments issued prior to 31 December 2015 that
until 31 December 2015 were eligible to cover institutions'
additional own funds requirements will be grandfathered until 31
December 2021.
On 23 November 2016 the European Commission, among others,
proposed a reform of the CRD IV Regulation and the CRD IV Directive
(together the "CRD IV Amendment Proposal"). The CRD IV Amendment
Proposal introduces, among other things, a leverage ratio
requirement of 3 per cent. Common Equity Tier 1 capital, harmonised
binding requirement for stable funding (the Net Stable Funding
Ratio or NSFR), strengthening of the conditions for use of internal
models and changes to the relevant regulator's application of the
institution specific Pillar 2 capital addons (referred to above as
the additional own funds requirement). At the date of this
Prospectus, these proposals are in draft form and are still subject
to the EU legislative process and national implementation, as
applicable. Therefore, it is still uncertain whether and if so, to
what extent, the CRD IV Amendment Proposal will impose additional
capital and/or liquidity requirements on the Issuer, which in turn
may affect the Issuer's capacity to make payments on the Notes.
On 2 July 2014, Directive 2014/59/EU providing for the
establishment of an EU-wide framework for the recovery and
resolution of credit institutions and investment firms (the "BRRD")
entered into force. Among other powers, BRRD provides measures for
bail-in of debt, which may impose existing and future issues of
debt to a risk of conversion into equity and/or write down of
principal amount and interest (see "The Recovery and Resolution
Directive" below).
Any failure by the Issuer to satisfy the regulatory capital
requirements, liquidity requirements and other requirements applied
to the Issuer, and any further increases in such requirements,
could result in regulatory intervention or sanctions or significant
reputation harm, which may have material adverse effect on the
Issuer's financial condition, results of operation and
prospects.
Additional risk factors
The risk factors mentioned above are managed and controlled by
the Issuer's systems and procedures. In addition the Issuer is
directly or indirectly exposed to a number of other risks which
directly or indirectly may affect the ability of the Issuer to
fulfil its obligations. These risks include:
Downturn in economy
The Issuer's business activities are dependent on the level of
banking, finance and financial services required by its customers.
In particular, levels of borrowing are dependent on customer
confidence, employment trends, the state of the economy, the
housing market and market interest rates at the time. As the Issuer
currently conducts almost all of its business in Denmark, its
performance is influenced by the level and cyclical nature of
business activity in Denmark, which is in turn affected by both
domestic and international economic and political events.
Notwithstanding that the Issuer believes it is well positioned to
deal with a downturn in the economy, an increase in unemployment in
Denmark or a reduction in the value of housing and other collateral
provided to the Issuer would increase the losses to the Issuer and
may be in a material amount.
Exposure against the Eurozone
The Issuer's foreign-exchange exposure is, to a large extent,
hedged. However, an economic breakdown in the Eurozone is likely to
have a significant effect on the economic situation all over
Europe, and is likely to affect the Danish economy as well. The
Issuer may subsequently suffer losses in connection with such
events, which may be in a material amount.
Changed market conditions for niche products
A significant proportion of the Issuer's income is generated
from its niche areas (such as financing of renewable energy and
real estate, private banking and the financing of medical
practitioners' purchase of private practices) and a change or
downturn in market conditions might affect these niche areas and
accordingly may have a material effect on the financial condition
of the Issuer.
Impact of regulatory changes
The Issuer is subject to financial services laws, regulations,
administrative actions and policies in Denmark and (to the extent
applicable) the European Union. Changes in supervision and
regulation could materially affect the Issuer's business, the
products and services offered or the value of its assets. Although
the Issuer monitors the situation, future changes in regulation,
fiscal or other policies can be unpredictable and are beyond the
control of the Issuer.
Deposit guarantee schemes or resolution funds
In Denmark and other jurisdictions, deposit guarantee schemes
and similar funds ("Deposit Guarantee Schemes") have been
implemented from which compensation for deposits may become payable
to customers of financial services firms in the event a financial
services firm is unable to pay, or unlikely to pay, claims against
it. In many jurisdictions, these Deposit Guarantee Schemes are
funded, directly or indirectly, by financial services firms which
operate and/or are licensed in the relevant jurisdiction. ,""The
future target level of funds to be accumulated in Deposit Guarantee
Schemes and resolution funds across different EU countries may
exceed the minimum levels provided for in the BRRD in Directive
2014/49/EU ("Revised Deposit Guarantee Schemes Directive") and in
EU Regulation No 806/2014 and EU Regulation No 81/2015 of the
European Parliament and of the Council establishing uniform rules
and a uniform procedure for the resolution of credit institutions
and certain investment firms in the framework of a Single
Resolution Mechanism and a Single
Resolution Fund (the latter of which will be relevant should
Denmark choose to participate in the Single Resolution Mechanism).
Both the BRRD and the Revised Deposit Guarantee Schemes Directive
has been implemented into Danish legislation.
Through participation in the Deposit Guarantee Schemes, Danish
banks, such as the Issuer undertake to cover losses incurred on
covered deposits held with distressed banks. The funds accumulated
by the Danish Deposit Guarantee Scheme must amount to at least 0.8
per cent. of the covered deposits of Danish banks. In addition, the
Issuer contributes to the Danish resolution fund established as the
Danish resolution financing arrangement under the BRRD, which
fund's capital must amount to 1.0 per cent. of the covered deposits
of Danish banks by 31 December 2024.
It is still unclear whether Denmark, despite being outside the
Eurozone, will join the European Banking Union and therefore be
part of the Single Resolution Mechanism. It therefore remains
unclear which costs the Issuer will incur in the coming years in
relation to payments to Deposit Guarantee Schemes and/or resolution
funds on a national or European level.
Factors which are material for the purpose of assessing the
market risks associated with Notes issued under the Programme
Risks related to the structure of a particular issue of
Notes
A wide range of Notes may be issued under the Programme. A
number of these Notes may have features which contain particular
risks for potential investors. Set out below is a description of
the most common such features and the principal risks attached
thereto:
Notes subject to optional redemption by the Issuer
An optional redemption feature of Notes is likely to limit their
market value. During any period when the Issuer may elect to redeem
Notes, the market value of those Notes generally will not rise
substantially above the price at which they can be redeemed. This
also may be true prior to any redemption period.
The Issuer may be expected to redeem Notes when its cost of
borrowing is lower than the interest rate on the Notes. At those
times, an investor generally would not be able to reinvest the
redemption proceeds at an effective interest rate as high as the
interest rate on the Notes being redeemed and may only be able to
do so at a significantly lower rate. Potential investors should
consider reinvestment risk in light of other investments available
at that time.
Automatic amortisation of Subordinated Notes
Subject to the CRD IV Regulation, the nominal amount of the
Subordinated Notes which may qualify as Tier 2 capital (Da.
"supplerende kapital") within the meaning of the CRD IV regulation
(the "Tier 2 Capital") when determining the Issuer's total capital
will, during the final five years of maturity of the Subordinated
Notes, be decreased day by day until the nominal value reaches
zero.
Inverse Floating Rate Notes
Inverse Floating Rate Notes have an interest rate equal to a
fixed rate minus a rate based upon a reference rate such as LIBOR.
The market values of those Notes typically are more volatile than
market values of other conventional floating rate debt securities
based on the same reference rate (and with otherwise comparable
terms). Inverse Floating Rate Notes are more volatile because an
increase in the reference rate not only decreases the interest rate
of the Notes, but may also reflect an increase in prevailing
interest rates, which further adversely affects the market value of
these Notes.
Fixed/Floating Rate Notes
Fixed/Floating Rate Notes may bear interest at a rate that
converts from a fixed rate to a floating rate, or from a floating
rate to a fixed rate. Where the Issuer has the right to effect such
a conversion, this will affect the secondary market and the market
value of the Notes since the Issuer may be expected to convert the
rate when it is likely to produce a lower overall cost of
borrowing. If the Issuer converts from a fixed rate to a floating
rate in such circumstances, the spread on the Fixed/Floating Rate
Notes may be less favourable than then prevailing spreads on
comparable Floating Rate Notes tied to the same reference rate. In
addition, the new floating rate at any time may be lower than the
rates on other Notes. If the Issuer converts from a floating rate
to a fixed rate in such circumstances, the fixed rate may be lower
than then prevailing rates on its Notes.
In addition, a holder of securities with an interest rate that
will be periodically reset during the term of the relevant
securities, such as Notes to which the reset provisions apply, is
also exposed to the risk of fluctuating interest rate levels and
uncertain interest income.
Notes issued at a substantial discount or premium
The market values of securities issued at a substantial discount
or premium from their principal amount tend to fluctuate more in
relation to general changes in interest rates than do prices for
conventional interest-bearing securities. Generally, the longer the
remaining term of the securities, the greater the price volatility
as compared to conventional interest-bearing securities with
comparable maturities.
The Issuer's obligations under Subordinated Notes are
subordinated
The Issuer's obligations under Subordinated Notes constitute
direct, unconditional, unsecured and subordinated obligations
ranking pari passu, without any preference among themselves. The
Subordinated Notes rank junior to present or future claims of (a)
unsubordinated creditors of the Issuer and (b) subordinated
creditors of the Issuer other than the present or future claims of
creditors that rank or are expressed to rank pari passu with or
junior to the Subordinated Notes. The Subordinated Notes will rank
pari passu with all other present and future Tier 2 Capital and, in
the event of a distribution of assets in the liquidation or
bankruptcy of the Issuer, will rank senior to the share capital of
the Issuer and any debt instruments issued by the Issuer qualifying
for treatment as Additional Tier 1 capital (Da. "hybrid
kernekapital") within the meaning of the CRD IV Regulation
("Additional Tier 1 Capital"). If, in the event of a liquidation or
bankruptcy of the Issuer, the assets of the Issuer are insufficient
to enable the Issuer to repay the claims of more senior-ranking
creditors in full, the holders of Subordinated Notes will lose
their entire investment in the Subordinated Notes. If there are
sufficient assets to enable the Issuer to pay the claims of
senior-ranking creditors in full but insufficient assets to enable
the Issuer to pay claims arising under its obligations in respect
of the Subordinated Notes and all other claims that rank pari passu
with the Subordinated Notes, the holders of Subordinated Notes will
lose some (which may be substantially all) of their investment in
the Subordinated Notes. Although Subordinated Notes may pay a
higher rate of interest than Senior Notes, there is a real risk
that an investor in Subordinated Notes will lose all or some of its
investment should the Issuer become insolvent.
Set-Off
Subject as provided in the "Terms and Conditions of the Notes"
section below and as a general principle of Danish law, in respect
of Subordinated Notes, no Noteholder, who shall in the event of the
liquidation or bankruptcy of the Issuer be indebted to the Issuer,
shall be entitled to exercise any right of set-off or counterclaim
against moneys owed by the Issuer in respect of the Subordinated
Notes held by such Noteholder.
Redemption of the Subordinated Notes by the Issuer
Under the CRD IV Regulation the Subordinated Notes may generally
not be redeemed during the first five years after the Subordinated
Notes have been issued. The Issuer may, subject to a DFSA consent,
redeem the Subordinated Notes five years after issuance if the
option is so specified in the applicable Final Terms and the
requirements listed under Condition 7 in the Terms and Conditions
are complied with.
In addition, during the first five years after the Subordinated
Notes have been issued (and at any time thereafter), the Issuer may
at its option but subject to DFSA consent, at any time redeem all,
but not some, of the Subordinated Notes at their outstanding
principal amounts together with accrued interest for tax reasons as
described in Condition 7.2.1 of the Terms and Conditions or in case
of a regulatory reclassification as described in Condition 7.2.2 of
the Terms and Conditions. See "Notes subject to optional redemption
by the Issuer".
There are limited enforcement events in relation to Subordinated
Notes
Payment of principal and accrued interest on the Subordinated
Notes may only be accelerated in the event of a bankruptcy or
liquidation of the Issuer. There is no separate right of
acceleration in the case of non-payment of principal or interest on
the Subordinated Notes or of the Issuer's failure to perform any of
its obligations under or in respect of the Subordinated Notes.
The remedy against the Issuer available for the recovery of
amounts owing in respect of a failure to make payment of any
principal or any interest in respect of the Subordinated Notes
within three Banking Days of the relevant due date, is to institute
proceedings against the Issuer (other than filing a petition for
bankruptcy) provided that the Issuer shall not by virtue of the
institution of any such proceedings be obliged to pay any sum or
sums sooner than the same would otherwise have been payable, except
in the case of a bankruptcy or liquidation in the circumstances set
out in Condition 10.2.
In addition, if the Issuer cannot meet its obligations regarding
subordinated loan capital, such as the Subordinated Notes, the
Issuer will not be considered insolvent under Danish law.
Risks related to Notes generally
Set out below is a brief description of the principal risks
relating to the Notes generally:
Modification
The conditions of the Notes contain provisions for calling
meetings of Noteholders to consider matters affecting their
interests generally. These provisions permit defined majorities to
bind all Noteholders including Noteholders who did not attend and
vote at the relevant meeting and Noteholders who voted in a manner
contrary to the majority.
The Recovery and Resolution Directive
The BRRD is designed to provide authorities with a credible set
of tools to intervene sufficiently early and quickly in an unsound
or failing credit institutions or investment firms (each an
"institution") so as to ensure the continuity of the institution's
critical financial and economic functions, whilst minimising the
impact of an institution's failure on the economy and financial
system.
The BRRD was to be implemented by Member States by 1 January
2015, with the exception of the general bail-in tool (see below)
which was to apply from 1 January 2016. ""The BRRD, including the
general bail-in tool and MREL (as defined below) has been
implemented into Danish law with effect as of 1 June 2015 by the
Danish Recovery and Resolution Act, Consolidated Act no. 333 of 31
March 2015 (the "Danish Recovery and Resolution Act") and by
amendments to the Danish Financial Business Act. The general
bail-in tool also entered into force in Denmark on 1 June 2015.
The BRRD contains four resolution tools and powers, which may be
used alone or in combination, where the relevant resolution
authority considers that (a) an institution is failing or likely to
fail, (b) there is no reasonable prospect that any alternative
private sector measures would prevent the failure of such
institution within a reasonable timeframe, and (c) a resolution
action is in the public interest. The resolution tools and powers
are: (i) sale of business - which enables resolution authorities to
direct the sale of the institution or the whole or part of its
business on commercial terms; (ii) bridge institution - which
enables resolution authorities to transfer all or part of the
business of the institution to a "bridge institution" (an entity
created for this purpose that is wholly or partially in public
control); (iii) asset separation - which enables resolution
authorities to transfer impaired or problem assets to one or more
publicly owned asset management vehicles to allow them to be
managed with a view to maximising their value through eventual sale
or orderly wind-down (this can be used together with another
resolution tool only); and (iv) bail-in - which gives resolution
authorities the power to write down certain debt claims of
unsecured creditors of a failing institution (which may include
holders of Notes, whether unsubordinated or subordinated including,
the Power to cancel all or a portion of the principal amount of, or
interest on such unsecured debt claims) and/or to convert such
unsecured debt claims (including the Notes) to equity (the "general
bail-in tool"), which equity could also be subject to any future
application of the general bail-in tool. The BRRD also grants
powers to enable the relevant resolution authority to implement the
resolution tools, including the power to replace or substitute the
relevant financial institution as obligor in respect of debt
instruments, the power to modify the terms of debt instruments
(including altering the maturity and/or the amount of interest
payable and/or imposing a temporary suspension on payments), and/or
the power to discontinue the listing and admission to trading of
financial instruments, all of which could be applied in respect of
the Notes.
As a last resort, the BRRD also allows for a Member State, after
having assessed and utilised the above resolution tools to the
maximum extent possible whilst maintaining financial stability, to
be able to provide extraordinary public financial support through
additional financial stabilisation tools. These consist of the
public equity support and temporary public ownership tools. Any
such extraordinary financial support must be provided in accordance
with the EU state aid framework.
An institution will be considered as failing or likely to fail
when either: (i) it is, or is likely in the near future to be, in
breach of its requirements for continuing authorisation; its assets
are, or are likely in the near future to be, less than its
liabilities; (ii) it is, or is likely in the near future to be,
unable to pay its debts as they fall due; or (iii) it requires
extraordinary public financial support (except in limited
circumstances).
In addition to the general bail-in tool, the BRRD provides
resolution authorities with the further power to permanently
write-down or convert into equity capital instruments (such as the
Subordinated Notes) at the point of non-viability and before any
other resolution action is taken ("non-viability loss absorption").
Any shares issued to holders of the Subordinated Notes upon any
such conversion into equity may also be subject to any application
of the general bail-in tool.
For the purposes of the application of any non-viability loss
absorption measure, the point of non-viability under the BRRD is
the point at which the relevant authority determines that the
institution meets the conditions for resolution (but no resolution
action has yet been taken) or that the institution will no longer
be viable unless the relevant capital instruments (such as the
Subordinated Notes) are written-down or converted or extraordinary
public support is to be provided and without such support the
appropriate authority determines that the institution would no
longer be viable.
To the extent any resulting treatment of Noteholders pursuant to
the exercise of the general bail-in tool is less favourable than it
would have been the case under the hierarchy in normal insolvency
proceedings, such Noteholder has a right to compensation under the
BRRD based on an independent valuation of the institution (which is
referred to as the "no creditor worse off" principle under the
BRRD). Under the Danish implementation of the BRRD, the "no
creditor worse off" principle also applies to the exercise of the
non-viability loss absorption in respect of capital instruments
(such as the Subordinated Notes). However, any such compensation is
unlikely to compensate that holder for the losses it has actually
incurred and there is likely to be a considerable delay in the
recovery of such compensation. Compensation payments (if any) are
also likely to be made considerably later than when amounts may
otherwise have been due under any Notes that have been subject to
the application of the general bail-in tool or non-viability loss
absorption.
With the implementation in Denmark of the BRRD, Danish banks,
including the Issuer, are required to have bail in-able resources
in order to fulfil the Minimum Requirement for own funds and
Eligible Liabilities ("MREL"). There is no minimum European
Union-wide level of MREL, as each resolution authority is required
to make a separate determination of the appropriate MREL
requirement for each resolution group within its jurisdiction,
depending on the resolvability, risk profile, systemic importance
and other characteristics of each institution. On 19 January 2017,
the DFSA published a discussion paper regarding main principles for
the MREL requirement for small and medium-sized Danish banks, such
as the Issuer. According to the discussion paper, the MREL
requirement for such banks will consist of a so called "valuation-2
add-on" and a "recapitalisation add-on". The valuation-2 add-on is
intended to cover the part of the expected additional impairments
in a resolution that cannot be included in the minimum own-funds
requirement and/or the additional own-funds requirement. The
recapitalisation add-on is to be used to capitalise those of the
bank's activities which, according to the assessment of Finansiel
Stabilitet (the Danish resolution authority), cannot immediately be
sold off in connection with a resolution and which therefore have
to be operated temporarily by Finansiel Stabilitet. According to
the discussion paper, the valuation-2 add-on and the
recapitalisation add-on cannot be determined on the basis of one
set of factors for all banks and will therefore have to be
determined individually for each bank. The exact amounts of the
valuation-2 add-on and the recapitalisation add-on will depend on a
number of factors, including, but not limited to, the composition
of the bank's balance sheets, impairments, additional own funds
requirement and lending quality. In addition, it is expected that
the MREL requirement will need to be met with instruments including
contractual bail-in provisions.
It is the expectation that in the first of 2017 the DFSA will
discuss with the Danish banking industry the phase-in period of the
MREL requirement and the methods to determine the valuation-2
add-on and the recapitalisation add-on. This may require Danish
banks to issue debt that can be bailed in ub compliance with the
MREL eligibility requirement. If an institution does not fulfil the
MREL requirement, the relevant authority may withdraw its banking
licence. Also, a comparable concept for loss absorption, the
Financial Stability Board's Total Loss Absorbing Capacity ("TLAC")
for global systemically important banks, is under discussion
internationally, and these discussions and their outcome could
influence the implementation of MREL.
The powers set out in BRRD and the Danish Recovery and
Resolution Act will impact how credit institutions and investment
firms are managed, as well as, in certain circumstances, the rights
of creditors. The Noteholders may be subject to write-down or
conversion into equity on any application of the general bail-in
tool and/or non-viability loss absorption, which may result in such
holders losing some or all of their investment. The exercise of any
power under the Danish Recovery and Resolution Act or any
suggestion of such exercise could, therefore, materially adversely
affect the rights of Noteholders, the price or value of their
investment in the Notes and/or the ability of the Issuer to satisfy
its obligations under the Notes.]
On 23 November 2016, the European Commission, together with the
CRD IV Amendment Proposal, proposed a reform of the BRRD by way of
two proposals (together, the "BRRD Amendment Proposal"). The BRRD
Amendment Proposal includes, among other things, the introduction
of a higher MREL requirement to take the form of MREL guidance and
that any shortfall in complying with the MREL requirement will
automatically be filled up with Common Equity Tier 1 Capital. At
the date of this Prospectus, these proposals are in draft form and
are still subject to the EU legislative process and national
implementation, as applicable. Therefore, it is still uncertain
whether and if so, to what extent, the proposed amendments will
impose additional requirements on the Issuer, which in turn may
affect the Issuer's capacity to make payments of interest on the
Notes.
Depositor Preference
As part of the reforms required by the BRRD, amendments have
been made to relevant legislation in Denmark to establish a
preference in the insolvency hierarchy for certain deposits that
are eligible for protection by the Danish deposit guarantee scheme
and the uninsured element of such deposits and, in certain
circumstances, deposits made in non-EEA branches of EEA credit
institutions. In addition, the Danish implementation of the Revised
Deposit Guarantee Scheme increased the nature and quantum of
insured deposits to cover a wide range of deposits, including
corporate deposits (unless the depositor is a public sector body or
financial institution) and some temporary high value deposits. The
effect of these changes is to increase the size of the class of
preferred creditors. All such preferred deposits will rank in the
insolvency hierarchy ahead of all other unsecured senior creditors
of the Issuer, including the holders of the Notes. Furthermore,
insured deposits are excluded from the scope of the general bail-in
tool. As a result, if the general bail-in tool were exercised by
the relevant resolution authority, the Notes would be more likely
to be bailed-in than certain other unsubordinated liabilities of
the Issuer such as other preferred deposits.
FATCA
Whilst the Notes are in global form and held within Euroclear
Bank S.A./N.V. and Clearstream Banking, société anonyme (together,
the "ICSDs"), in all but the most remote circumstances, it is not
expected that FATCA will affect the amount of any payment received
by the ICSDs (see Taxation - FATCA). However, FATCA may affect
payments made to custodians or intermediaries in the subsequent
payment chain leading to the ultimate investor if any such
custodian or intermediary generally is unable to receive payments
free of FATCA withholding. It also may affect payment to any
ultimate investor that is a financial institution that is not
entitled to receive payments free of withholding under FATCA, or an
ultimate investor that fails to provide its broker (or other
custodian or intermediary from which it receives payment) with any
information, forms, other documentation or consents that may be
necessary for the payments to be made free of FATCA withholding.
Investors should choose the custodians or intermediaries with care
(to ensure each is compliant with FATCA or other laws or agreements
related to FATCA), provide each custodian or intermediary with any
information, forms, other documentation or consents that may be
necessary for such custodian or intermediary to make a payment free
of FATCA withholding. Investors should consult their own tax
adviser to obtain a more detailed explanation of FATCA and how
FATCA may affect them. The Issuer's obligations under the
securities are discharged once it has paid the common depositary or
common safekeeper for the ICSDs (as bearer holder of the
securities) and the Issuer has therefore no responsibility for any
amount thereafter transmitted through hands of the ICSDs and
custodians or intermediaries.
Change of law
The conditions of the Notes are based on English law, Danish law
or Luxembourg law (as described in Condition 18.1), in each case in
effect as at the date of this Prospectus. No assurance can be given
as to the impact of any possible judicial decision or change to
English law, Danish law or Luxembourg law or administrative
practice after the date of this Prospectus.
Bearer Notes where denominations involve integral multiples:
definitive Notes
In relation to any issue of Bearer Notes which have
denominations consisting of a minimum Specified Denomination plus
one or more higher integral multiples of another smaller amount, it
is possible that such Notes may be traded in amounts that are not
integral multiples of such minimum Specified Denomination. In such
a case a holder who, as a result of trading such amounts, holds an
amount which is less than the minimum Specified Denomination in his
account with the relevant clearing system at the relevant time may
not receive a definitive Bearer Note in respect of such holding
(should definitive Bearer Notes be printed) and would need to
purchase a principal amount of Bearer Notes such that its holding
amounts to a Specified Denomination.
If definitive Bearer Notes are issued, holders should be aware
that definitive Bearer Notes which have a denomination that is not
an integral multiple of the minimum Specified Denomination may be
illiquid and difficult to trade.
Form of VP Systems Notes
VP Systems Notes issued under the Programme will not be
evidenced by any physical note or document of title other than
statements of account made by the VP (in the case of VP Notes) or
the VP Lux (in the case of VP Lux Notes). Ownership of VP Systems
Notes will be recorded, and transfer effected, only through the
book entry system and register maintained by the VP (in the case of
VP Notes) or the VP Lux (in the case of VP Lux Notes).
Because the VP Systems Notes are dematerialised securities,
investors will have to rely on the relevant clearing systems'
procedures for transfer, payment and communication with the Issuer.
Any closure or operational difficulties in the VP (in the case of
VP Notes) or the VP Lux (in the case of VP Lux Notes) would
therefore impact on such transfer, payment or communication.
Risks related to the market generally
Set out below is a brief description of the principal market
risks, including liquidity risk, exchange rate risk, interest rate
risk and credit risk:
The secondary market generally
Notes may have no established trading market when issued, and
one may never develop. If a market does develop, it may not be very
liquid. Therefore, investors may not be able to sell their Notes
easily or at prices that will provide them with a yield comparable
to similar investments that have a developed secondary market. This
is particularly the case for Notes that are especially sensitive to
interest rate, currency or market risks, are designed for specific
investment objectives or strategies or have been structured to meet
the investment requirements of limited categories of investors.
These types of Notes generally would have a more limited secondary
market and more price volatility than conventional debt securities.
Illiquidity may have a severely adverse effect on the market value
of Notes.
Exchange rate risks and exchange controls
The Issuer will pay principal and interest on the Notes in the
Specified Currency. This presents certain risks relating to
currency conversions if an investor's financial activities are
denominated principally in a currency or currency unit (the
"Investor's Currency") other than the Specified Currency. These
include the risk that exchange rates may significantly change
(including changes due to devaluation of the Specified Currency or
revaluation of the Investor's Currency) and the risk that
authorities with jurisdiction over the Investor's Currency may
impose or modify exchange controls. An appreciation in the value of
the Investor's Currency relative to the Specified Currency would
decrease (1) the Investor's Currency-equivalent yield on the Notes,
(2) the Investor's Currency-equivalent value of the principal
payable on the Notes and (3) the Investor's Currency-equivalent
market value of the Notes.
Government and monetary authorities may impose (as some have
done in the past) exchange controls that could adversely affect an
applicable exchange rate. As a result, investors may receive less
interest or principal than expected, or no interest or
principal.
Interest rate risks
Investment in Fixed Rate Notes involves the risk that subsequent
changes in market interest rates may adversely affect the value of
the Fixed Rate Notes.
Credit ratings may not reflect all risks
One or more independent credit rating agencies may assign credit
ratings to the Notes. The ratings may not reflect the potential
impact of all risks related to structure, market, additional
factors discussed above, and other factors that may affect the
value of the Notes. A credit rating is not a recommendation to buy,
sell or hold securities and may be revised or withdrawn by the
rating agency at any time.
In general, European regulated investors are restricted under
Regulation (EC) No. 1060/2009 (the "CRA Regulation") from using
credit ratings for regulatory purposes, unless such ratings are
issued by a credit rating agency established in the EU and
registered under the CRA Regulation (and such registration has not
been withdrawn or suspended), subject to transitional provisions
that apply in certain circumstances whilst the registration
application is pending. Such general restriction will also apply in
the case of credit ratings issued by non-EU credit rating agencies,
unless the relevant credit ratings are endorsed by an EU-registered
credit rating agency or the relevant non-EU rating agency is
certified in accordance with the CRA Regulation (and such
endorsement action or certification, as the case may be, has not
been withdrawn or suspended). Certain information with respect to
the credit rating agencies and ratings will be disclosed in the
Final Terms.
Documents Incorporated by Reference
The following documents which have previously been published or
are published simultaneously with this Prospectus and have been
filed with the Financial Conduct Authority shall be incorporated
in, and form part of, this Prospectus:
(a) the auditor's report and audited annual financial statements
of the Issuer on pages 55 to 99 of the Annual Report for the
financial year ended 31 December 2015, and the auditor's report and
audited annual financial statements of the Issuer on pages 45 to 95
of the Annual Report for the financial year ended 31 December 2016,
respectively (the "2015 Accounts" and the "2016 Accounts"
respectively); and
(b) the Terms and Conditions of the Notes set out on pages 51 to
86 of the Prospectus dated 29 December 2009, pages 39 to 73 of the
Prospectus dated 13 April 2011, pages 40 to 74 of the Prospectus
dated 21 February 2012, pages 24 to 55 of the Prospectus dated 2
April 2013, pages 25 to 57 of the Prospectus dated 14 March 2014,
pages 27 to 63 of the Prospectus dated 27 March 2015 and pages 27
to 62 of the Prospectus dated 21 March 2016 prepared by the Issuer
in connection with the Programme.
The 2015 Accounts and the 2016 Accounts which are incorporated
by reference in this Prospectus are direct and accurate
translations of the original Danish text. To the extent that there
is any inconsistency between the English translations and the
original Danish text, the original Danish text will prevail.
If documents which are incorporated by reference into the
Prospectus themselves incorporate any information or other
documents therein, either expressly or implicitly, such information
or other documents shall not form part of this Prospectus for the
purpose of the Prospectus Directive, except where such information
or other documents are specifically incorporated by reference into
this Prospectus.
Following the publication of this Prospectus a supplement may be
prepared by the Issuer and approved by the UK Listing Authority in
accordance with Article 16 of the Prospectus Directive. Statements
contained in any such supplement (or contained in any document
incorporated by reference therein) shall, to the extent applicable
(whether expressly, by implication or otherwise), be deemed to
modify or supersede statements contained in this Prospectus or in a
document which is incorporated by reference in this Prospectus. Any
statement so modified or superseded shall not, except as so
modified or superseded, constitute a part of this Prospectus.
Copies of documents incorporated by reference in this Prospectus
can be obtained from the registered office of the Issuer and from
the specified office of the Paying Agent and
www.landbobanken.com.
Any non--incorporated parts of a document referred to herein are
either deemed not relevant for an investor or are otherwise covered
elsewhere in this Prospectus.
The Issuer will, in the event of any significant new factor,
material mistake or inaccuracy relating to information included in
this Prospectus which is capable of affecting the assessment of any
Notes, prepare a supplement to this Prospectus or publish a new
Prospectus for use in connection with any subsequent issue of
Notes.
Form of the Notes
The Notes of each Tranche will be either Bearer Notes, with or
without interest coupons attached, or VP Systems Notes, in each
case as specified in the relevant Final Terms.
Any reference in this section "Form of the Notes" to Euroclear,
Clearstream, Luxembourg and/or the VP and/or the VP Lux shall,
whenever the context so permits, be deemed to include a reference
to any additional or alternative clearing system approved by the
Issuer and the Agent and/or the VP Issuing Agent, as applicable and
specified in the applicable Final Terms.
Bearer Notes
Each Tranche of Bearer Notes will initially be issued in the
form of a temporary global note (a "Temporary Global Note") or, if
so specified in the applicable Final Terms, a permanent global note
(a "Permanent Global Note") which, in either case, will:
(i) if the Global Notes are intended to be issued in new global
note ("NGN") form, as stated in the applicable Final Terms, be
delivered on or prior to the original issue date of the Tranche to
a common safekeeper (the "Common Safekeeper") for Euroclear Bank
SA/NV ("Euroclear") and Clearstream Banking, société anonyme
("Clearstream, Luxembourg"); and
(ii) if the Global Notes are not intended to be issued in NGN
Form, be delivered on or prior to the original issue date of the
Tranche to a common depositary (the "Common Depositary") for,
Euroclear and Clearstream, Luxembourg.
Whilst any Note is represented by a Temporary Global Note,
payments of principal, interest (if any) and any other amount
payable in respect of the Notes due prior to the Exchange Date (as
defined below) will be made (against presentation of the Temporary
Global Note if the Temporary Global Note is not intended to be
issued in NGN form) only to the extent that certification (in a
form to be provided) to the effect that the beneficial owners of
interests in such Note are not U.S. persons or persons who have
purchased for resale to any U.S. person, as required by U.S.
Treasury regulations, has been received by Euroclear and/or
Clearstream, Luxembourg and Euroclear and/or Clearstream,
Luxembourg, as applicable, has given a like certification (based on
the certifications it has received) to the Agent.
On and after the date (the "Exchange Date") which is 40 days
after a Temporary Global Note is issued, interests in such
Temporary Global Note will be exchangeable (free of charge) upon a
request as described therein either for (a) interests in a
Permanent Global Note of the same Series or (b) definitive Notes of
the same Series with, where applicable, receipts, interest coupons
and talons attached (as indicated in the applicable Final Terms and
subject, in the case of definitive Notes, to such notice period as
is specified in the applicable Final Terms), in each case against
certification of beneficial ownership as described above unless
such certification has already been given. The holder of a
Temporary Global Note will not be entitled to collect any payment
of interest, principal or other amount due on or after the Exchange
Date unless, upon due certification, exchange of the Temporary
Global Note for an interest in a Permanent Global Note or for
definitive Notes is improperly withheld or refused. The exchange
upon expiry of a period of notice or at any time options referred
to below should not be expressed to be applicable if the Specified
Denomination of the relevant Notes includes language substantially
to the following effect: "EUR100,000 and integral multiples of
EUR1,000 in excess thereof up to and including EUR199,000".
Furthermore, such Specified Denomination construction is not
permitted in relation to any issuance of Notes which is to be
represented on issue by a Temporary Bearer Global Notes
exchangeable for Definitive Notes.
Payments of principal, interest (if any) or any other amounts on
a Permanent Global Note will be made through Euroclear and/or
Clearstream, Luxembourg (against presentation or surrender (as the
case may be) of the Permanent Global Note if the Permanent Global
Note is not intended to be issued in NGN form) without any
requirement for certification.
The applicable Final Terms will specify that a Permanent Global
Note will be exchangeable (free of charge), in whole but not in
part, for definitive Notes with, where applicable, receipts,
interest coupons and talons attached upon either (a) upon the
occurrence of an Exchange Event or (b) at any time at the request
of the Issuer. For these purposes, "Exchange Event" means that (i)
an Event of Default (as defined in Condition 10) has occurred and
is continuing, or (ii) the Issuer has been notified that both
Euroclear and Clearstream, Luxembourg have been closed for business
for a continuous period of 14 days (other than by reason of
holiday, statutory or otherwise) or have announced an intention
permanently to cease business or have in fact done so and no
successor clearing system is available or (iii) the Issuer has or
will become subject to adverse tax consequences which would not be
suffered were the Notes represented by the Permanent Global Note in
definitive form. The Issuer will promptly give notice to
Noteholders in accordance with Condition 14 if an Exchange Event
occurs. In the event of the occurrence of an Exchange Event,
Euroclear and/or Clearstream, Luxembourg (acting on the
instructions of any holder of an interest in such Permanent Global
Note) may give notice to the Agent requesting exchange. Any such
exchange shall occur not later than 45 days after the date of
receipt of the first relevant notice by the Agent.
The following legend will appear on all Bearer Notes which have
an original maturity of more than 365 days and on all receipts and
interest coupons relating to such Bearer Notes:
"ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,
INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a)
OF THE INTERNAL REVENUE CODE."
The sections referred to provide that United States holders,
with certain exceptions, will not be entitled to deduct any loss on
Notes, receipts or interest coupons and will not be entitled to
capital gains treatment of any gain on any sale, disposition,
redemption or payment of principal in respect of such Notes,
receipts or interest coupons.
Notes which are represented by a Global Note will only be
transferable in accordance with the rules or procedures for the
time being of Euroclear or Clearstream, Luxembourg, as the case may
be.
General
Pursuant to the Agency Agreement (as defined under "Terms and
Conditions of the Notes"), the Agent shall arrange that, where a
further Tranche of Bearer Notes is issued which is intended to form
a single Series with an existing Tranche of Bearer Notes, the
Bearer Notes of such further Tranche shall be assigned a common
code and ISIN which are different from the common code and ISIN
assigned to Bearer Notes of any other Tranche of the same Series
until at least the expiry of the distribution compliance period (as
defined in Regulation S under the Securities Act) applicable to the
Bearer Notes of such Tranche.
A Note may be accelerated by the holder thereof in certain
circumstances described in Condition 10. In such circumstances,
where any Bearer Note is still represented by a Global Note and the
Global Note (or any part thereof) has become due and repayable in
accordance with the Terms and Conditions of such Notes and payment
in full of the amount due has not been made in accordance with the
provisions of the Global Note then the Global Note will become void
at 8.00 p.m. (London time) on such day. At the same time, holders
of interests in such Global Note credited to their accounts with
Euroclear and/or Clearstream, Luxembourg, as the case may be, will
become entitled to proceed directly against the Issuer on the basis
of statements of account provided by Euroclear and/or Clearstream,
Luxembourg on and subject to the terms of a deed of covenant (the
"Deed of Covenant") dated 28 March 2017 and executed by the
Issuer.
VP Systems Notes
Each Tranche of VP Systems Notes will be issued in
uncertificated and dematerialised book entry form. No VP Systems
Note will be issued in global or definitive form. The holder of a
VP Systems Note will be the person evidenced as such by a book
entry in the VP system (in the case of VP Notes) or the VP Lux
system (in the case of VP Lux Notes). Where a nominee is so
evidenced, it shall be treated as the holder of the relevant VP
Systems Note.
Ownership of the VP Systems Notes will only be recorded and
transfers effected only through the book entry system and register
maintained by the VP (in the case of VP Notes) or the VP Lux (in
the case of VP Lux Notes).
On the issue of such VP Systems Notes, the Issuer will send a
copy of the relevant Final Terms to the Agent and the VP Issuing
Agent. On delivery of the relevant Final Terms by the VP Issuing
Agent (i) (in the case of VP Notes) to the VP and notification to
the VP of the subscribers and their VP account details by the
relevant Dealers or (ii) (in the case of VP Lux Notes) to the VP
Lux and notification to the VP Lux of the subscribers and their VP
Lux account details by the relevant Dealers, the VP Issuing Agent,
acting on behalf of the Issuer, will give instructions to the VP or
the VP Lux, as the case may be, to credit each subscribing account
holder's account with the VP or VP Lux, as applicable, with the
nominal amount of VP Systems Notes such subscriber has subscribed
and paid for.
Settlement of sale and purchase transactions in respect of VP
Systems Notes in the VP (in the case of VP Notes) and the VP Lux
(in the case of VP Lux Notes) will take place in accordance with
market practice at the time of the transaction. Transfers of
interests in the VP Systems Notes will take place in accordance
with the rules and procedures for the time being of the VP (in the
case of VP Notes) and the VP Lux (in the case of VP Lux Notes).
Eurosystem Eligibility
The Final Terms in respect of an issue of Notes will confirm (in
paragraph 6(vii) of Part B) whether or not such Notes are to be
intended to be held in a manner which would allow Eurosystem
eligibility.
The designation "yes" simply means that the Notes are intended
upon issue to be deposited with one of the ICSDs as common
safekeeper (and may be registered in the name of a nominee of one
of the ICSDs acting as common safekeeper, in the case of registered
notes) and does not necessarily mean that the Notes will be
recognized as eligible collateral for Eurosystem monetary policy
and intra-day credit operations by the Eurosystem either upon issue
or at any or all times during their life.
Where the designation is specified as "no" at the date of the
Final Terms, then (should the Eurosystem eligibility criteria be
amended in the future such that the Notes are capable of meeting
them) the Notes may then be deposited with one of the ICSDs as
common safekeeper (and may be registered in the name of a nominee
of one of the ICSDs acting as common safekeeper, in the case of
registered notes). Note that this does not necessarily mean that
the Notes will then be recognised as eligible collateral for
Eurosystem monetary policy and intra-day credit operations by the
Eurosystem at any time during their life.
In each case, such recognition will depend upon the ECB being
satisfied that Eurosystem eligibility criteria have been met.
Form of Final Terms
Set out below is the form of Final Terms which will be completed
for each Tranche of Notes issued under the Programme.
[PROHIBITION OF SALES TO EEA RETAIL INVESTORS - The Notes are
not intended, from 1 January 2018, to be offered, sold or otherwise
made available to and, with effect from such date, should not be
offered, sold or otherwise made available to any retail investor in
the European Economic Area ("EEA"). For these purposes, a retail
investor means a person who is one (or more) of: (i) a retail
client as defined in point (11) of Article 4(1) of Directive
2014/65/EU ("MiFID II"); (ii) a customer within the meaning of
Directive 2002/92/EC ("IMD"), where that customer would not qualify
as a professional client as defined in point (10) of Article 4(1)
of MiFID II; or (iii) not a qualified investor as defined in
Directive 2003/71/EC (as amended, the "Prospectus Directive").
Consequently no key information document required by Regulation
(EU) No 1286/2014 (the "PRIIPs Regulation") for offering or selling
the Notes or otherwise making them available to retail investors in
the EEA has been prepared and therefore offering or selling the
Notes or otherwise making them available to any retail investor in
the EEA may be unlawful under the PRIIPS Regulation.]
[Date]
RINGKJØBING LANDBOBANK AKTIESELSKAB
Issue of [Aggregate Nominal Amount of Tranche] [Title of
Notes]
under the EUR2,000,000,000
Euro Medium Term Note Programme
PART A - CONTRACTUAL TERMS
Terms used herein shall be deemed to be defined as such for the
purposes of the Conditions set forth in the Prospectus dated [--]
2017 [, as supplemented by [a] supplement[s] to the Prospectus
dated [--],] [which constitutes a base prospectus (the
"Prospectus") for the purposes of Directive 2003/71/EC (the
"Prospectus Directive")]. This document constitutes the Final Terms
of the Notes described herein [for the purposes of Article 5.4 of
the Prospectus Directive] and must be read in conjunction with such
Prospectus. Full information on the Issuer and the offer of the
Notes is only available on the basis of the combination of these
Final Terms and the Prospectus. The Prospectus is available for
viewing [on the website of the Regulatory News Service operated by
the London Stock Exchange, www.londonstockexchange.com] and at the
registered office of the Issuer and at the specified offices of the
[Agent/VP Issuing Agent] during normal business hours and copies
may be obtained from the registered office of the Issuer and the
specified offices of the [Agent/VP Issuing Agent].
[The following alternative language applies if the first tranche
of an issue which is being increased was issued under a Prospectus
with an earlier date.]
Terms used herein shall be deemed to be defined as such for the
purposes of the Conditions (the "Conditions") set forth in the
Prospectus dated [original date] which are incorporated by
reference in the Prospectus dated [current date] and are attached
hereto. This document constitutes the Final Terms of the Notes
described herein [for the purposes of Article 5.4 of Directive
2003/71/EC (the "Prospectus Directive")] and must be read in
conjunction with the Prospectus dated [--] [, as supplemented by
[a] supplement[s] to the Prospectus dated [--], ] [which
constitutes a base prospectus for the purposes of the Prospectus
Directive]. Full information on the Issuer and the offer of the
Notes is only available on the basis of the combination of these
Final Terms and the Prospectus dated [--] [, as supplemented by [a]
supplement[s] to the Prospectus dated [--],]. Copies of such
Prospectus are available for viewing [on the website of the
Regulatory News Service operated by the London Stock Exchange,
www.londonstockexchange.com/exchange/news/market-news/market-news-home.html,]
and at the registered office of the Issuer and at the specified
offices of the [Agent/VP Issuing Agent] during normal business
hours and copies may be obtained from the registered office of the
Issuer and the specified offices of the [Agent/VP Issuing
Agent].
1. a (a) Series Number: [ ]
(b) Tranche Number: [ ]
(c) Date on which the Notes become fungible: Not Applicable/The Notes shall be consolidated,
form a single series and be interchangeable
for trading purposes with the [ ] on [[ ]/the
Issue Date/exchange of the Temporary Global
Note for interests in the Permanent Global Note,
as referred to in paragraph [ ] below [which
is expected to occur on or about [ ]]
2. Specified Currency: [ ]
3. Aggregate Nominal Amount:
(a) Series: [ ]
(b) Tranche: [ ]
4. Issue Price: [ ] per cent. of the Aggregate Nominal Amount
[plus accrued interest from [ ]]
5. (a) Specified Denominations: [ ]
(b) Calculation Amount: [ ]
6. (a) Issue Date: [ ]
(b) Interest Commencement Date: [Issue Date/Not Applicable/other]
7. Maturity Date: [ ]
8. Interest Basis: [[ ] per cent. Fixed Rate]
[[LIBOR/CIBOR/EURIBOR/NIBOR/STIBOR] +/- [ ] per
cent. Floating Rate]
[Zero Coupon]
9. Redemption/Payment Basis: Subject to any purchase and cancellation or early
redemption, the Notes will be redeemed [on
the Maturity Date at par/ in instalments on each
Instalment Date (see further item 24 below)]
10. Change of Interest Basis or Redemption/Payment [Not Applicable/[ ]]
Basis:
11. Put/Call Options: [Not Applicable]
[Investor Put]
[Issuer Call]
12. (a) Status of the Notes: [Senior/Subordinated]
(b) [Date [Board] approval for issuance of Notes [ ] [and [ ], respectively]]
obtained:
PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE
13. Fixed Rate Note Provisions [Applicable/Not Applicable]
(a) Rate[(s)] of Interest: [ ] per cent. per annum [payable
[annually/semi--annually/ quarterly/other] in
arrear]
(b) Interest Payment Date(s): [ ] in each year [adjusted for payment purposes
only in accordance with the [Floating Rate
Convention/ Following Business Day Convention/
Modified Following Business Day Convention/
Preceding Business Day Convention]/, not
adjusted]
(c) Fixed Coupon Amount(s): [ ] per Calculation Amount
(Applicable to Notes in definitive form.)
(d) Broken Amount(s): Not Applicable/[ ] per Calculation Amount,
(Applicable to Notes in definitive form.) payable on the Interest Payment Date falling
[in/on]
[ ]
(e) Day Count Fraction: [ ]
(f) [Determination Date(s): Not Applicable/[ ] in each year
14. Floating Rate Note Provisions [Applicable/Not Applicable]
(a) Specified Period(s)/Specified Interest Payment [ ]
Dates: (N.B. In the case of Reset Notes with a Floating
Rate Note in a Reset Period, indicate the
Reset Period to which the Floating Rate will
apply. Thereafter in this paragraph indicate
the Floating Rate Note provisions that will apply
to each floating rate period)
(b) Business Day Convention: [Floating Rate Convention/Following Business Day
Convention/ Modified Following Business Day
Convention/Preceding Business Day Convention]
(c) Additional Business Centre(s): [ ]
(d) Manner in which the Rate of Interest and [Screen Rate Determination/ISDA Determination]
Interest Amount is to be determined:
(e) Party responsible for calculating the Rate of [Agent/other]
Interest and Interest Amount:
(f) Screen Rate Determination:
[LIBOR/CIBOR/EURIBOR/NIBOR/STIBOR]
* Reference Rate:
[ ]
* Interest Determination Date(s):
[ ]
* Relevant Screen Page:
[ ] in the Relevant Financial Centre
* Relevant Time:
(g) ISDA Determination:
[ ]
* Floating Rate Option:
[ ]
* Designated Maturity:
[ ]
* Reset Date:
(h) Linear Interpolation Not Applicable/Applicable - the Rate of Interest
for the [long/short] [first/last] Interest
Period shall be calculated using Linear
Interpolation (specify for each short or long
interest
period)
(i) Margin(s): [+/-] [ ] per cent. per annum
(j) Minimum Rate of Interest: Not Applicable/[ ] per cent. per annum
(k) Maximum Rate of Interest: Not Applicable/[ ] per cent. per annum
(l) Day Count Fraction: [Actual/Actual (ISDA)
Actual/365 (Fixed)
Actual/365 (Sterling)
Actual/360
30/360
30E/360
30E/360 (ISDA)]
15. Reset Note Provisions: [Applicable/Not Applicable]
(i) Initial Rate of Interest: See [Fixed/Floating] Rate Note provisions above
(ii) First Reset Margin: [Plus/Minus][--] per cent. per annum
(iii) Subsequent Reset Margins: [[Plus/Minus][--] per cent. per annum/Not
Applicable]
(iv) Interest Payment Date(s): [--] in each year
(v) Fixed Coupon Amount up to (but excluding) the [[--] per Calculation Amount/Not Applicable]
First Reset Date:
(N.B. The Fixed Coupon Amount for an issue of
Subordinated Notes will not apply if the
Calculation
Amount has been adjusted or if any accrued but
unpaid amount of interest has been reduced
and/or cancelled, as applicable, as described in
the Conditions)
(vi) Broken Amount(s) up to (but excluding) the [Not Applicable/[--] per Calculation Amount
First Reset Date: payable on [--]
(Insert particulars of any initial broken
interest amounts which do not correspond with the
Fixed Coupon Amount[(s)])
(N.B. The Broken Amount for an issue of
Subordinated Notes will not apply if the
Calculation
Amount has been adjusted or if any accrued but
unpaid amount of interest has been reduced
and/or cancelled, as applicable, as described in
the Conditions)
(vii) First Reset Date: [--]
(viii) Subsequent Reset Date(s): [[--] [and [--]]/Not Applicable]
(ix) Relevant Screen Page: [--]
(x) Mid-Swap Rate: [Single Mid-Swap Rate/Mean Mid-Swap Rate]
(xi) Mid-Swap Rate Conversion: [Applicable/Not Applicable]
(If not applicable, delete the remaining
sub-paragraph of this paragraph)
[Annual/Semi-annual/Quarterly/Monthly]
* Original Mid-Swap Rate Basis:
(xii) Mid-Swap Floating Leg Maturity: [--]
(xiii) Reset Determination Date(s): [--]
(specify in relation to each Reset Date)
(xiv) Relevant Time: [--]
(xv) Day Count Fraction: [30/360]/[Actual/Actual (ICMA)]/[Actual/365
(Fixed)]
(xvi) Calculation Agent: [--]
16. Zero Coupon Note Provisions [Applicable/Not Applicable]
(a) Accrual Yield: [ ] per cent. per annum
(b) Reference Price: [ ]
PROVISIONS RELATING TO REDEMPTION
17. Issuer Call: [Applicable/Not Applicable]
(a) Optional Redemption Date(s): [ ]
(b) Optional Redemption Amount: [[ ] per Calculation Amount]
(c) If redeemable in part:
(i) Minimum Redemption Amount: [ ]
(ii) Maximum Redemption Amount: [ ]
(d) Notice period: [ ]
18. Investor Put: [Applicable/Not Applicable]
(a) Optional Redemption Date(s): [ ]
(b) Optional Redemption Amount: [[ ] per Calculation Amount]
(c) Notice period: [ ]
19. Final Redemption Amount: [[ ] per Calculation Amount]
20. Early Redemption Amount payable on redemption for [[ ] per Calculation Amount]
taxation reasons or on event of default
if different from the principal amount of the
Notes:
GENERAL PROVISIONS APPLICABLE TO THE NOTES
21. Form of Notes:
(a) Form: [Temporary Global Note exchangeable for a Permanent
Global Note which is exchangeable for
Definitive Notes only upon an Exchange Event]
[Temporary Global Note exchangeable for Definitive Notes on and after the Exchange Date]
[Permanent Global Note exchangeable for Definitive Notes [only upon an Exchange Event/at any
time at the request of the Issuer]]
[VP Systems Notes issued in uncertificated and dematerialised book entry form. See further
item 8 of Part B below]
(b) New Global Note: [Yes/No]
22. Additional Financial Centre(s) or other special [Not Applicable/[ ]]
provisions relating to Payment Days:
23. Talons for future Coupons or Receipts to be [Yes/The Talons Mature on [ ]/No]
attached to Definitive Notes (and dates on which
such Talons mature):
24. Details relating to Instalment Notes:
(a) Instalment Amount(s): [Not Applicable/[ ]]
(b) Instalment Date(s): [Not Applicable/[ ]]
25. Redenomination applicable: Redenomination [not] applicable
26. VP Notes: [Not Applicable/[ ]]
[The Issuer shall be entitled to obtain information from the register maintained by the VP
[for the purpose of the meetings of Noteholders/for the purposes of performing its obligations
under the issue of VP Notes]]
[The Issuer shall be entitled to obtain information from the register maintained by the VP
Lux [for the purpose of the meetings of Noteholders/for the purposes of performing its obligations
under the issue of VP Notes]]
SIGNATURE
Signed on behalf of Ringkjøbing Landbobank Aktieselskab:
By:
Duly authorised
PART B - OTHER INFORMATION
1. LISTING and admission to trading
(i) Listing and Admission to trading Application is expected to be made by the Issuer (or
on its behalf) for the Notes to be admitted
to trading on the London Stock Exchange's regulated
market and to be listed on the Official
List of the UK Listing Authority with effect from [ ].
(ii) Estimate of total expenses related to admission [ ]
to trading:
2. RATINGS
Ratings: The Notes to be issued have not been rated/The Notes
to be issued have been rated:
Moody's Investors Service Ltd
3. INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE
[ ]
4. REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL EXPENSES
[(i) Reasons for the offer [ ]
[(ii)] Estimated net proceeds: [ ]
5. YIELD (Fixed Rate Notes only)
Indication of yield: [ ]
6. OPERATIONAL INFORMATION
(i) ISIN Code: [ ]
(ii) Common Code: [ ]
(iii) Any clearing system(s) other than Euroclear Bank [Not Applicable/[ ]/ VP Securities A/S Denmark, VP
S.A./N.V. and Clearstream Banking, identification number [ ]/VP Lux S.à
société anonyme and the relevant r.l., VP Lux identification number [ ]]
identification number(s):
(iv) Delivery: Delivery [against/free of] payment
(v) Names and addresses of additional Paying Agent(s) [ ]
(if any):
(vi) VP Issuing Agent: [[ ]/Not Applicable]
(vii) Intended to be held in a manner which would allow [Yes] [No]
Eurosystem eligibility:
7. DISTRIBUTION
(i) If syndicated, names of Managers: [Not Applicable/[ ]]
(ii) Date of [Subscription] Agreement: [ ]
(iii) Stabilising Manager(s): [Not Applicable/[ ]]
(iv) Delivery: Delivery [against/free of] payment
(v) If non syndicated, name of relevant Dealer: [Not Applicable/[ ]]
(vi) U.S. Selling Restrictions: [TEFRA D Rules/TEFRA C Rules/TEFRA not applicable]
(vii) Prohibition of Sales to EEA Retail Investors: [Applicable/Not Applicable]
(If the offer of the Notes is concluded prior to 1
January 2018, or on and after that date
the Notes clearly do not constitute "packaged"
products, "Not Applicable" should be specified.
If the offer of the Notes will be concluded on or
after 1 January 2018 and the Notes may constitute
"packaged" products and no KID will be prepared,
"Applicable" should be specified.)
[THIRD PARTY INFORMATION
[ ] has been extracted from [ ]. The Issuer confirms that such information has been accurately
reproduced and that, so far as it is aware and is able to ascertain from information published
by [ ], no facts have been omitted which would render the reproduced information inaccurate
or misleading.]
Terms and Conditions of the Notes
The following are the Terms and Conditions of the Notes which
will be incorporated by reference into each Global Note (as defined
below) and each definitive Note, in the latter case only if
permitted by the relevant stock exchange or other relevant
authority (if any) and agreed by the Issuer and the relevant Dealer
at the time of issue but, if not so permitted and agreed, such
definitive Note will have endorsed thereon or attached thereto such
Terms and Conditions. The following Terms and Conditions will,
whenever the context so permits, also apply to each VP Systems
Note. The applicable Final Terms (or the relevant provisions
thereof) will be endorsed upon, or attached to, each Global Note
and definitive Note and shall apply as aforesaid to VP Systems
Notes. Reference should be made to "Form of the Notes" for a
description of the content of Final Terms which will specify which
of such terms are to apply in relation to the relevant Notes.
This Note is one of a Series (as defined below) of Notes issued
by Ringkjøbing Landbobank Aktieselskab (the "Issuer") pursuant to
the Agency Agreement (as defined below) or the VP Issuing Agency
Agreement (as defined below), as applicable.
References herein to the "Notes" shall be references to the
Notes of this Series and shall mean:
(a) in relation to any Notes issued in bearer form ("Bearer
Notes") represented by a global Note (a "Global Note"), units of
each Specified Denomination in the Specified Currency;
(b) any Global Note;
(c) any definitive Bearer Notes issued in exchange for a Global Note;
(d) Notes cleared through the Danish Securities Centre (Da. "VP
Securities A/S") ("VP Notes" and the "VP" respectively) which are
in uncertificated book entry form in accordance with Consolidated
Act No. 1530 of 2 December 2015 on Trading in Securities of the
Kingdom of Denmark (the "Securities Trading Act"), as amended from
time to time, and Executive Orders issued thereunder and Executive
Order No. 819 of 26 June 2013 on, inter alia, the registration of
fund assets in a securities centre (Da. "Bekendtgørelse om
registrering m.v. af fondsaktiver i en værdipapircentral") ("Danish
VP Registration Order"); and
(e) Notes cleared through the VP Lux S.à r.l., a Luxembourg
Central Securities Depositary, (the "VP Lux") ("VP Lux Notes" and,
together with VP Notes, "VP Systems Notes") which are in
uncertificated book entry form in accordance with the relevant
regulations of the VP Lux and Luxembourg law.
The Bearer Notes, the Receipts (as defined below) and the
Coupons (as defined below) have the benefit of an Amended and
Restated Agency Agreement (such Agency Agreement as further amended
and/or supplemented and/or restated from time to time, the "Agency
Agreement") dated 28 March 2017 and made between the Issuer, BNP
Paribas Securities Services, Luxembourg Branch as issuing and
principal paying agent and agent bank (the "Agent", which
expression shall include any successor agent) and the other paying
agents named therein (together with the Agent, the "Paying Agents",
which expression shall include any additional or successor paying
agents).
The Issuer will from time to time, as indicated in the Final
Terms, appoint a VP Issuing Agent (the "VP Issuing Agent", which
expression shall include any successor VP Issuing Agent) to act as
the agent of the Issuer in respect of all dealings with the VP in
respect of each Series of VP Notes and/or the VP Lux in respect of
each Series of VP Lux Notes. The Issuer and the VP Issuing Agent
will, in respect of each Series of VP Systems Notes, enter into a
VP Issuing Agency Agreement (the "VP Issuing Agency Agreement").
The VP Systems Notes of the relevant Series will have the benefit
of such VP Issuing Agency Agreement and, to the extent specified
therein, the Agency Agreement.
Interest bearing definitive Bearer Notes have interest coupons
("Coupons") and, in the case of Notes which, where issued in
definitive form have more than 27 interest payment remaining,
talons for further Coupons ("Talons") attached on issue. Any
reference herein to Coupons or coupons shall, unless the context
otherwise requires, be deemed to include a reference to Talons or
talons. Definitive Notes repayable in instalments have receipts
("Receipts") for the payment of the instalments of principal (other
than the final instalment) attached on issue. Global Notes do not
have Receipts, Coupons or Talons attached on issue.
The final terms for this Note (or the relevant provisions
thereof) are set out in Part A of the Final Terms attached to or
endorsed on or, in the case of VP Systems Notes, incorporated into
this Note which complete these Terms and Conditions (the
"Conditions"). References to the "applicable Final Terms" are to
Part A of the Final Terms (or the relevant provisions thereof)
which is, in the case of Bearer Notes, attached to or endorsed on
or, in the case of VP Systems Notes, incorporated into this
Note.
Any reference to "Noteholders" or "holders" shall, in relation
to any Bearer Notes, mean the holders of the Bearer Notes and
shall, in relation to any Notes represented by a Global Note, be
construed as provided below. Any reference herein to Receiptholders
shall mean to the holders of the Receipts and any reference herein
to "Couponholders" shall mean the holders of the Coupons and shall,
unless the context otherwise requires, include the holders of the
Talons. VP Systems Notes are in uncertificated and dematerialised
book entry form and any reference in the Conditions to Receipts,
Coupons and Talons shall not apply to VP Systems Notes.
As used herein, "Tranche" means Notes which are identical in all
respects (including as to listing and admission to trading) and
"Series" means a Tranche of Notes together with any further Tranche
or Tranches of Notes which are (a) expressed to be consolidated and
form a single series and (b) identical in all respects (including
as to listing and admission to trading) except for their respective
Issue Dates, Interest Commencement Dates and/or Issue Prices.
In respect of any Bearer Notes, the Receiptholders, Noteholders
and the Couponholders are entitled to the benefit of the Deed of
Covenant (the "Deed of Covenant") dated 28 March 2017 and made by
the Issuer. The original of the Deed of Covenant is held by the
common depositary for Euroclear (as defined below) and Clearstream,
Luxembourg (as defined below).
Copies of the Agency Agreement and the Deed of Covenant are
available for inspection during normal business hours at the
specified office of each of the Paying Agents. Copies of the
applicable Final Terms (and, in the case of VP Systems Notes, the
applicable VP Issuing Agency Agreement) are available for viewing
at the registered office of the Issuer and of the Agent (in the
case of Bearer Notes) or the VP Issuing Agent (in the case of VP
Systems Notes) and copies may be obtained from those offices save
that, if this Note is neither admitted to trading on a regulated
market in the European Economic Area nor offered in the European
Economic Area in circumstances where a prospectus is required to be
published under the Prospectus Directive, the applicable Final
Terms (and, in the case of VP Systems Notes, the applicable VP
Issuing Agency Agreement) will only be obtainable by a Noteholder
holding one or more Notes and such Noteholder must produce evidence
satisfactory to the Issuer and the relevant Paying Agent (in the
case of Bearer Notes) or the VP Issuing Agent (in the case of VP
Systems Notes) as to its holding of such Notes and identity. The
Noteholders, the Receiptholders and the Couponholders are deemed to
have notice of, and are entitled to the benefit of, all the
provisions of the Agency Agreement (but, in the case of VP Systems
Notes, only to the extent specified in the VP Issuing Agency
Agreement), the Deed of Covenant (in the case of Bearer Notes), the
applicable VP Issuing Agency Agreement (in the case of VP Systems
Notes) and the applicable Final Terms which are applicable to them.
The statements in the Conditions include summaries of, and are
subject to, the detailed provisions of the Agency Agreement (and,
in the case of VP Systems Notes, the applicable VP Issuing Agency
Agreement).
Words and expressions defined in the Agency Agreement or used in
the relevant Final Terms shall have the same meanings where used in
the Conditions unless the context otherwise requires or unless
otherwise stated and provided that, in the event of inconsistency
between the Agency Agreement and the relevant Final Terms, the
relevant Final Terms will prevail.
1. FORM, DENOMINATION AND TITLE
1.1 The Notes are in bearer form or, in the case of VP Systems
Notes, in uncertificated and dematerialised book entry form, as
specified in the relevant Final Terms and, in the case of
definitive Notes, serially numbered, in the Specified Currency and
the Specified Denomination(s). Notes of one Specified Denomination
may not be exchanged for Notes of another Specified
Denomination.
Bearer Notes may not be exchanged for VP Systems Notes and vice
versa.
This Note may be a Fixed Rate Note, a Floating Rate Note, a Zero
Coupon Note or a combination of any of the foregoing, depending
upon the Interest Basis shown in the applicable Final Terms.
This Note may be an Instalment Note depending upon the
Redemption/Payment Basis shown in the applicable Final Terms.
This Note may also be a Senior Note or a Subordinated Note as
indicated in the applicable Final Terms.
Definitive Notes are issued with Coupons attached, unless they
are Zero Coupon Notes in which case references to Coupons and
Couponholders in the Conditions are not applicable.
Subject as set out below, title to the Bearer Notes, Receipts
and Coupons will pass by delivery. The Issuer and the Paying Agents
will (except as otherwise required by law) deem and treat the
bearer of any Bearer Note, Receipt or Coupon as the absolute owner
thereof (whether or not overdue and notwithstanding any notice of
ownership or writing thereon or notice of any previous loss or
theft thereof) for all purposes but, in the case of any Global
Note, without prejudice to the provisions set out in the next
succeeding paragraph.
For so long as any of the Notes is represented by a Global Note
held on behalf of Euroclear Bank S.A./N.V. ("Euroclear") and/or
Clearstream Banking, société anonyme ("Clearstream, Luxembourg"),
each person (other than Euroclear or Clearstream, Luxembourg) who
is for the time being shown in the records of Euroclear or of
Clearstream, Luxembourg as the holder of a particular nominal
amount of such Notes (in which regard any certificate or other
document issued by Euroclear or Clearstream, Luxembourg as to the
nominal amount of such Notes standing to the account of any person
shall be conclusive and binding for all purposes save in the case
of manifest error) shall be treated by the Issuer and the Paying
Agents as the holder of such nominal amount of such Notes for all
purposes other than with respect to the payment of principal or
interest on such nominal amount of such Notes, for which purpose
the bearer of the relevant Global Note shall be treated by the
Issuer and any Paying Agent as the holder of such nominal amount of
such Notes in accordance with and subject to the terms of the
relevant Global Note and the expressions "Noteholder" and "holder
of Notes" and related expressions shall be construed
accordingly.
Notes which are represented by a Global Note will be
transferable only in accordance with the rules and procedures for
the time being of Euroclear and Clearstream, Luxembourg, as the
case may be. References to Euroclear and/or Clearstream, Luxembourg
shall, whenever the context so permits, be deemed to include a
reference to any additional or alternative clearing system
specified in the applicable Final Terms.
1.2 In the case of a VP Systems Note, the person evidenced as
the holder of such VP Systems Note by a book entry in the book
entry system and register maintained by the VP (in the case of VP
Notes) or the VP Lux (in the case of VP Lux Notes) shall be treated
by the Issuer, the Agent, the VP Issuing Agent and any other Paying
Agent as the holder of such Notes for all purposes and expressions
"Noteholder" and "holder of Notes" and related expressions shall be
construed accordingly. Ownership of the VP Systems Notes will be
transferred by registration in the register between the direct or
nominee accountholders at the VP (in the case of VP Notes) or the
VP Lux (in the case of VP Lux Notes) in accordance with the rules
and procedures of the VP (in the case of VP Notes) or the VP Lux
(in the case of VP Lux Notes) from time to time. Where a nominee is
so evidenced, it shall be treated by the Issuer, the Agent, the VP
Issuing Agent and any other Paying Agent as the holder of the
relevant VP Systems Note.
VP is entitled to provide the Issuer or any person authorised by
the Issuer to receive such information on its behalf, including,
but not limited to, the VP Issuing Agent with information about the
identity of a Holder of VP Systems Notes at a specified time
following a request by the Issuer or such authorised person. Such
information may include the name, address and other contact details
of the Holder of the VP Systems Notes, the date of the registration
with VP, the amount of VP Systems Notes held by such holder and any
other relevant account information
VP Systems Notes will be issued in uncertificated and
dematerialised book entry form and no global or definitive Notes
will be issued in respect thereof and the Conditions shall be
construed accordingly.
2. STATUS OF THE SENIOR NOTES AND SUBORDINATION
2.1 Status of the Senior Notes
This Condition 2.1 only applies to Senior Notes.
The Senior Notes and any relative Receipts and Coupons are
direct, unconditional, unsubordinated and (subject to the
provisions of Condition 3) unsecured obligations of the Issuer and
rank pari passu among themselves and (save for certain obligations
required to be preferred by law) equally with all other unsecured
obligations (other than subordinated obligations, if any) of the
Issuer, from time to time outstanding.
2.2 Status of the Subordinated Notes
This Condition 2.2 only applies to Subordinated Notes
The Subordinated Notes (Da. "Supplerende
kapital/Kapitalbeviser") and any Receipts and/or Coupons relating
to them constitute direct, unconditional, unsecured and
subordinated obligations of the Issuer and rank and will rank pari
passu without any preference among themselves. The Subordinated
Notes and the Receipts and the Coupons relating to them constitute
Tier 2 capital (Da. "supplerende kapital") within the meaning of
the CRD IV regulation (the "Tier 2 Capital"). The Subordinated
Notes and the Receipts and the Coupons relating to them rank junior
to present or future claims of (a) unsubordinated creditors of the
Issuer and (b) subordinated creditors of the Issuer other than the
present or future claims of creditors that rank or are expressed to
rank pari passu with or junior to the Subordinated Notes. In
addition, the Subordinated Notes and the Receipts and Coupons
relating to them will rank pari passu with all other present and
future Tier 2 Capital of the Issuer and, in the event of a
distribution of assets in the liquidation or bankruptcy of the
Issuer, rank senior to the share capital of the Issuer and to any
debt instruments issued by the Issuer and qualifying for treatment
as Additional Tier 1 capital (Da. "hybrid kernekapital") within the
meaning of the CRD IV Regulation.
No Noteholder, who shall in the event of the liquidation or
bankruptcy of the Issuer be indebted to the Issuer, shall be
entitled to exercise any right of set-off or counterclaim against
moneys owed by the Issuer in respect of the Subordinated Notes held
by such Noteholder.
3. NEGATIVE PLEDGE
This Condition 3 only applies to Senior Notes.
3.1 Negative Pledge
So long as any of the Senior Notes and/or related Receipts or
Coupons remain outstanding (as defined in the Agency Agreement),
the Issuer will ensure that no Relevant Indebtedness of the Issuer
or any of its Subsidiaries (as defined in Condition 10.3) will be
secured by any mortgage, charge, lien, pledge or other security
interest (each a "Security Interest"), other than a Permitted
Security Interest, upon, or with respect to, any of the present or
future business, undertaking, assets or revenues (including any
uncalled capital) of the Issuer or any of its Subsidiaries unless
the Issuer shall, in the case of the creation of the Security
Interest, before or at the same time and, in any other case,
promptly, take any and all action necessary to ensure that:
(i) all amounts payable by it under the Senior Notes and the
Receipts and the Coupons are secured by the Security Interest
equally and rateably with the Relevant Indebtedness; or
(ii) such other Security Interest or other arrangement (whether
or not it includes the giving of a Security Interest) is provided
as is approved by an Extraordinary Resolution (as defined in the
Agency Agreement or the VP Issuing Agency Agreement, as applicable)
of the Noteholders.
3.2 Interpretation
For the purposes of these Conditions:
"Covered Bonds" means bonds, notes or other securities (however
defined) issued by the Issuer pursuant to and in accordance with
the Danish Financial Business Act and secured on a segregated pool
of assets pursuant to the Danish Financial Business Act;
"Permitted Security Interest" means (i) any Security Interest
which is created pursuant to any securitisation, asset--backed
financing or like arrangement in accordance with normal market
practice and whereby the amount of indebtedness secured by such
Security Interest or, in respect of which any guarantee or
indemnity is secured by such Security Interest, is limited to the
value of the assets secured and (ii) any Security Interest arising
by operation of law; and
"Relevant Indebtedness" means (a) any present or future
indebtedness (whether being principal, premium, interest or other
amounts) for or in respect of any notes, bonds, debentures,
debenture stock, loan stock or other securities (other than Covered
Bonds) which are for the time being quoted, listed or ordinarily
dealt in on any stock exchange, over--the--counter or other
securities market, and (b) any guarantee or indemnity in respect of
any such indebtedness.
4. REDENOMINATION
4.1 Redenomination
Where redenomination is specified in the applicable Final Terms
as being applicable, the Issuer may, without the consent of the
Noteholders, the Receiptholders and the Couponholders on giving
prior notice to the Agent, Euroclear and Clearstream, Luxembourg,
or the VP Issuing Agent, the VP and/or the VP Lux, as applicable,
and at least 30 days' prior notice to the Noteholders in accordance
with Condition 4 elect that, with effect from the Redenomination
Date specified in the notice, the Notes shall be redenominated in
euro.
The election will have effect as follows:
(a) the Notes and the Receipts shall be deemed to be
redenominated in euro in the denomination of euro 0.01 with a
nominal amount for each Note and Receipt equal to the nominal
amount of that Note or Receipt in the Specified Currency, converted
into euro at the Established Rate, provided that, if the Issuer
determines, with the agreement of the Agent or the VP Issuing
Agent, as applicable, that the then market practice in respect of
the redenomination in euro of internationally offered securities is
different from the provisions specified above, such provisions
shall be deemed to be amended so as to comply with such market
practice and the Issuer shall promptly notify the Noteholders, the
stock exchange (if any) on which the Notes may be listed and the
Paying Agents of such deemed amendments;
(b) save to the extent that an Exchange Notice has been given in
accordance with paragraph (d) under, the amount of interest due in
respect of the Notes will be calculated by reference to the
aggregate nominal amount of Notes held (or, as the case may be, in
respect of which Coupons are presented for payment) by the relevant
holder and the amount of such payment shall be rounded down to the
nearest euro 0.01;
(c) if definitive Notes are required to be issued after the
Redenomination Date, they shall be issued at the expense of the
Issuer (i) in the case of Relevant Notes in the denomination of
euro 100,000 and/or such higher amounts as the Agent or the VP
Issuing Agent, as applicable, may determine and notify to the
Noteholders and any remaining amounts less than euro 100,000 shall
be redeemed by the Issuer and paid to the Noteholders in euro in
accordance with Condition 6; and (ii) in the case of Notes which
are not Relevant Notes, in the denominations of euro 1,000, euro
10,000, euro 100,000 and (but only to the extent of any remaining
amounts less than euro 1,000 or such smaller denominations as the
Agent or the VP Issuing Agent, as applicable, may approve) euro
0.01 and such other denominations as the Agent or the VP Issuing
Agent, as applicable, shall determine and notify to the
Noteholders;
(d) if issued prior to the Redenomination Date, all unmatured
Coupons denominated in the Specified Currency (whether or not
attached to the Notes) will become void with effect from the date
on which the Issuer gives notice (the "Exchange Notice") that
replacement euro--denominated Notes, Receipts and Coupons are
available for exchange (provided that such securities are so
available) and no payments will be made in respect of them. The
payment obligations contained in any Notes and Receipts so issued
will also become void on that date although those Notes and
Receipts will continue to constitute valid exchange obligations of
the Issuer. New euro--denominated Notes, Receipts and Coupons will
be issued in exchange for Notes, Receipts and Coupons denominated
in the Specified Currency in such manner as the Agent or the VP
Issuing Agent, as applicable, may specify and as shall be notified
to the Noteholders in the Exchange Notice. No Exchange Notice may
be given less than 15 days prior to any date for payment of
principal or interest on the Notes;
(e) after the Redenomination Date, all payments in respect of
the Notes, the Receipts and the Coupons, other than payments of
interest in respect of periods commencing before the Redenomination
Date, will be made solely in euro as though references in the Notes
to the Specified Currency were to euro. Payments will be made in
euro by credit or transfer to a euro account (or any other account
to which euro may be credited or transferred) specified by the
payee or, at the option of the payee, by a euro cheque;
(f) if the Notes are Fixed Rate Notes and interest for any period ending on or after the Redenomination Date is required to be calculated for a period ending other than on an Interest Payment Date, it will be calculated:
(i) in the case of the Notes represented by a Global Note, by
applying the Rate of Interest to the aggregate outstanding nominal
amount of the Notes represented by such Global Note; and
(ii) in the case of definitive Notes or VP Systems Notes, by
applying the Rate of Interest to the Calculation Amount;
and, in each case, multiplying such sum by the applicable Day
Count Fraction, and rounding the resultant figure to the nearest
sub--unit of the relevant Specified Currency, half of any such
sub--unit being rounded upwards or otherwise in accordance with
applicable market convention. Where the Specified Denomination of a
Fixed Rate Note in definitive form is a multiple of the Calculation
Amount, the amount of interest payable in respect of such Fixed
Rate Note shall be the product of the amount (determined in the
manner provided above) for the Calculation Amount and the amount by
which the Calculation Amount is multiplied to reach the Specified
Denomination, without any further rounding;
(g) if the Notes are Floating Rate Notes, the applicable Final
Terms will specify any relevant changes to the provisions relating
to interest; and
(h) such other changes shall be made to this Condition as the
Issuer may decide, after consultation with the Agent or the VP
Issuing Agent, as applicable, and as may be specified in the
notice, to conform it to conventions then applicable to instruments
denominated in euro.
4.2 Definitions
In the Conditions, the following expressions have the following
meanings:
"Calculation Amount" is the amount to be determined by the
Issuer for the purpose of calculating the amount of interest
payable per Specified Denomination.
"Established Rate" means the rate for the conversion of the
Specified Currency (including compliance with rules relating to
roundings in accordance with applicable European Union regulations)
into euro established by the Council of the European Union pursuant
to Article 140 of the Treaty;
"euro" means the currency introduced at the start of the third
stage of European economic and monetary union pursuant to the
Treaty;
"Redenomination Date" means (in the case of interest bearing
Notes) any date for payment of interest under the Notes or (in the
case of Zero Coupon Notes) any date, in each case specified by the
Issuer in the notice given to the Noteholders pursuant to Condition
4.1 above and which falls on or after the date on which the country
of the Specified Currency first participates in the third stage of
European economic and monetary union;
"Relevant Notes" means all Notes where the applicable Final
Terms provide for a minimum Specified Denomination in the Specified
Currency which is equivalent to at least euro 100,000 and which are
admitted to trading on a regulated market in the European Economic
Area; and
"Treaty" means the Treaty on the Functioning of the European
Union, as amended.
5. INTEREST
5.1 Interest on Fixed Rate Notes
Each Fixed Rate Note bears interest from (and including or, in
the case of VP Systems Notes, but excluding) the Interest
Commencement Date at the rate(s) per annum equal to the Rate(s) of
Interest specified in the final terms. Interest will be payable in
arrear on the Interest Payment Date(s) in each year up to (and
including) the Maturity Date.
If the Notes are in definitive form, except as provided in the
applicable Final Terms, the amount of interest payable on each
Interest Payment Date in respect of the Fixed Interest Period
ending on (but excluding) such date will amount to the Fixed Coupon
Amount. Payments of interest on any Interest Payment Date will, if
so specified in the applicable Final Terms, amount to the Broken
Amount so specified.
As used in the Conditions, "Fixed Interest Period" means the
period from (and including or, in the case of VP Systems Notes, but
excluding) an Interest Payment Date (or the Interest Commencement
Date) to (but excluding or, in the case of VP Systems Notes, and
including) the next (or first) Interest Payment Date.
Except in the case of Notes in definitive form where an
applicable Fixed Coupon Amount or Broken Amount is specified in the
applicable Final Terms, interest shall be calculated in respect of
any period by applying the Rate of Interest to:
(A) in the case of Fixed Rate Notes which are represented by a
Global Note, the aggregate outstanding nominal amount of the Fixed
Rate Notes represented by such Global Note; or
(B) in the case of Fixed Rate Notes which are (I) in definitive
form or (II) VP Systems Notes, the Calculation Amount;
and, in each case, multiplying such sum by the applicable Day
Count Fraction, and rounding the resultant figure to the nearest
sub--unit of the relevant Specified Currency, half of any such
sub--unit being rounded upwards or otherwise in accordance with
applicable market convention. Where the Specified Denomination of a
Fixed Rate Note in definitive form or of a Fixed Rate Note which is
a VP Systems Note is a multiple of the Calculation Amount, the
amount of interest payable in respect of such Fixed Rate Note shall
be the product of the amount (determined in the manner provided
above) for the Calculation Amount and the amount by which the
Calculation Amount is multiplied to reach the Specified
Denomination, without any further rounding.
"Day Count Fraction" means, in respect of the calculation of an
amount of interest in accordance with this Condition 5.1:
(a) if "Actual/Actual (ICMA)" is specified in the applicable Final Terms:
(i) in the case of Notes where the number of days in the
relevant period from (and including or, in the case of VP Systems
Notes, but excluding) the most recent Interest Payment Date (or, if
none, the Interest Commencement Date) to (but excluding or, in the
case of VP Systems Notes, and including) the relevant payment date
(the "Accrual Period") is equal to or shorter than the
Determination Period during which the Accrual Period ends, the
number of days in such Accrual Period divided by the product of (I)
the number of days in such Determination Period and (II) the number
of Determination Dates (as specified in the applicable Final Terms)
that would occur in one calendar year; or
(ii) in the case of Notes where the Accrual Period is longer
than the Determination Period during which the Accrual Period ends,
the sum of:
(A) the number of days in such Accrual Period falling in the
Determination Period in which the Accrual Period begins divided by
the product of (x) the number of days in such Determination Period
and (y) the number of Determination Dates that would occur in one
calendar year; and
(B) the number of days in such Accrual Period falling in the
next Determination Period divided by the product of (x) the number
of days in such Determination Period and (y) the number of
Determination Dates that would occur in one calendar year; and
(b) if "30/360" is specified in the applicable Final Terms, the
number of days in the period from (and including or, in the case of
VP Systems Notes, but excluding) the most recent Interest Payment
Date (or, if none, the Interest Commencement Date) to (but
excluding or, in the case of VP Systems Notes, and including) the
relevant payment date (such number of days being calculated on the
basis of a year of 360 days with 12 30-day months) divided by
360.
In the Conditions:
"Determination Period" means each period from (and including or,
in the case of VP Systems Notes, but excluding) a Determination
Date to (but excluding or, in the case of VP Systems Notes, and
including) the next Determination Date (including, where either the
Interest Commencement Date or the final Interest Payment Date is
not a Determination Date, the period commencing on the first
Determination Date prior to, and ending on the first Determination
Date falling after, such date); and
"sub--unit" means, with respect to any currency other than euro,
the lowest amount of such currency that is available as legal
tender in the country of such currency and, with respect to euro,
one cent.
5.2 Interest on Floating Rate Notes
(a) Interest Payment Dates
Each Floating Rate Note bears interest from (and including or,
in the case of VP Systems Notes, but excluding) the Interest
Commencement Date and such interest will be payable in arrear on
either:
(i) the Specified Interest Payment Date(s) in each year
specified in the applicable Final Terms; or
(ii) if no Specified Interest Payment Date(s) is/are specified
in the applicable Final Terms, each date (each such date, together
with each Specified Interest Payment Date, an "Interest Payment
Date") which falls the number of months or other period specified
as the Specified Period in the applicable Final Terms after the
preceding Interest Payment Date or, in the case of the first
Interest Payment Date, after the Interest Commencement Date.
Such interest will be payable in respect of each Interest Period
(which expression shall, in the Conditions, mean the period from
(and including or, in the case of VP Systems Notes, but excluding)
an Interest Payment Date (or the Interest Commencement Date) to
(but excluding or, in the case of VP Systems Notes, and including)
the next (or first) Interest Payment Date).
If a Business Day Convention is specified in the applicable
Final Terms and (x) if there is no numerically corresponding day in
the calendar month in which an Interest Payment Date should occur
or (y) if any Interest Payment Date would otherwise fall on a day
which is not a Business Day, then, if the Business Day Convention
specified is:
(A) in any case where Specified Periods are specified in
accordance with Condition 5.2(a)(i) above, the Floating Rate
Convention, such Interest Payment Date (a) in the case of (x)
above, shall be the last day that is a Business Day in the relevant
month and the provisions of (ii) below shall apply mutatis mutandis
or (b) in the case of (y) above, shall be postponed to the next day
which is a Business Day unless it would thereby fall into the next
calendar month, in which event (i) such Interest Payment Date shall
be brought forward to the immediately preceding Business Day and
(ii) each subsequent Interest Payment Date shall be the last
Business Day in the month which falls the Specified Period after
the preceding applicable Interest Payment Date occurred; or
(B) the Following Business Day Convention, such Interest Payment
Date shall be postponed to the next day which is a Business Day;
or
(C) the Modified Following Business Day Convention, such
Interest Payment Date shall be postponed to the next day which is a
Business Day unless it would thereby fall into the next calendar
month, in which event such Interest Payment Date shall be brought
forward to the immediately preceding Business Day; or
(D) the Preceding Business Day Convention, such Interest Payment
Date shall be brought forward to the immediately preceding Business
Day.
In the Conditions, "Business Day" means a day which is both:
(a) a day on which commercial banks and foreign exchange markets
settle payments and are open for general business (including
dealing in foreign exchange and foreign currency deposits) in
London and each Additional Business Centre specified in the
applicable Final Terms; and
(b) either (i) in relation to any sum payable in a Specified
Currency other than euro, a day on which commercial banks and
foreign exchange markets settle payments and are open for general
business (including dealing in foreign exchange and foreign
currency deposits) in the principal financial centre of the country
of the relevant Specified Currency (which if the Specified Currency
is Australian dollars or New Zealand dollars shall be Sydney and
Auckland, respectively) or (ii) in relation to any sum payable in
euro, a day on which the Trans--European Automated Real--Time Gross
Settlement Express Transfer (TARGET2) System (the "TARGET2 System")
is open.
(b) Rate of Interest
The Rate of Interest payable from time to time in respect of
Floating Rate Notes will be determined in the manner specified in
the applicable Final Terms.
(i) ISDA Determination for Floating Rate Notes
Where ISDA Determination is specified in the applicable Final
Terms as the manner in which the Rate of Interest is to be
determined, the Rate of Interest for each Interest Period will be
the relevant ISDA Rate plus or minus (as indicated in the
applicable Final Terms) the Margin (if any). For the purposes of
this subparagraph (i), "ISDA Rate" for an Interest Period means a
rate equal to the Floating Rate that would be determined by the
Agent under an interest rate swap transaction if the Agent were
acting as Calculation Agent for that swap transaction under the
terms of an agreement incorporating the 2006 ISDA Definitions, as
published by the International Swaps and Derivatives Association,
Inc. and as amended and updated as at the Issue Date of the first
Tranche of the Notes (the "ISDA Definitions") and under which:
(A) the Floating Rate Option is as specified in the applicable Final Terms;
(B) the Designated Maturity is a period specified in the applicable Final Terms;
(C) the relevant Reset Date is the day specified in the applicable Final Terms; and
(D) if Linear Interpolation is specified as applicable in
respect of an Interest Period in the applicable Final Terms, the
Rate of Interest for such Interest Period shall be calculated by
the Calculation Agent by straight-line linear interpolation by
reference to two rates based on the relevant Floating Rate Option,
where:
(1) one rate shall be determined as if the Designated Maturity
were the period of time for which rates are available next shorter
than the length of the relevant Interest Period; and
(2) the other rate shall be determined as if the Designated
Maturity were the period of time for which rates are available next
longer than the length of the relevant Interest Period
provided, however, that if there is no rate available for a
period of time next shorter than the length of the relevant
Interest Period or, as the case may be, next longer than the length
of the relevant Interest Period, then the Calculation Agent shall
determine such rate at such time and by reference to such sources
as it determines appropriate.
For the purposes of this subparagraph (i), "Floating Rate",
"Calculation Agent", "Floating Rate Option", "Designated Maturity"
and "Reset Date" have the meanings given to those terms in the ISDA
Definitions.
Unless otherwise stated in the applicable Final Terms the
Minimum Rate of Interest shall be deemed to be zero.
(ii) Screen Rate Determination for Floating Rate Notes
Where Screen Rate Determination is specified in the applicable
Final Terms as the manner in which the Rate of Interest is to be
determined, the Rate of Interest for each Interest Period will,
subject as provided below, be either:
(A) if the Reference Rate is a composite quotation or
customarily supplied by one entity, the Calculation Agent will
determine the Reference Rate which appears on the Relevant Screen
Page as of the Relevant Time on the relevant Interest Determination
Date;
(B) if Linear Interpolation is specified as applicable in
respect of an Interest Period in the applicable Final Terms, the
Rate of Interest for such Interest Period shall be calculated by
the Calculation Agent by straight-line linear interpolation by
reference to two rates which appear on the Relevant Screen Page as
of the Relevant Time on the relevant Interest Determination Date,
where:
(1) one rate shall be determined as if the relevant Interest
Period were the period of time for which rates are available next
shorter than the length of the relevant Interest Period; and
(2) the other rate shall be determined as if the relevant
Interest Period were the period of time for which rates are
available next longer than the length of the relevant Interest
Period;
provided, however, that if no rate is available for a period of
time next shorter or, as the case may be, next longer than the
length of the relevant Interest Period, then the Calculation Agent
shall determine such rate at such time and by reference to such
sources as it determines appropriate.
(C) in any other case, the Calculation Agent will determine the
arithmetic mean (rounded if necessary to the fifth decimal place,
with 0.000005 being rounded upwards) of the Reference Rates which
appear on the Relevant Screen Page as of the Relevant Time on the
relevant Interest Determination Date;
(expressed as a percentage rate per annum) for the Reference
Rate which appears or appear, as the case may be, on the Relevant
Screen Page as at 11.00 a.m. (London time, in the case of LIBOR,
Copenhagen time, in the case of CIBOR, Brussels time, in the case
of EURIBOR, Stockholm time, in the case of STIBOR or Oslo time, in
the case of NIBOR) on the Interest Determination Date in question
plus or minus (as indicated in the applicable Final Terms) the
Margin (if any), all as determined by the Agent or, in the case of
VP Systems Notes, the Calculation Agent (pursuant to the terms of a
calculation agency agreement between the Issuer and the Calculation
Agent). If five or more of such offered quotations are available on
the Relevant Screen Page, the highest (or, if there is more than
one such highest quotation, one only of such quotations) and the
lowest (or, if there is more than one such lowest quotation, one
only of such quotations) shall be disregarded by the Agent or the
Calculation Agent, as the case may be, for the purpose of
determining the arithmetic mean (rounded as provided above) of such
offered quotations.
If the Relevant Screen Page is not available or if in the case
of Condition 5.2(a)(ii)(A) above, no such offered quotation appears
or, in the case of Condition 5.2(a)(ii)(B) above, fewer than three
such offered quotations appear, in each case as at the time
specified in the preceding paragraph, the Agent (in the case of
Bearer Notes, or the Calculation Agent (in the case of VP Systems
Notes) (the "Relevant Agent"), shall request each of the Reference
Banks (as defined below) to provide the Relevant Agent with its
offered quotation (expressed as a percentage rate per annum) for
the Reference Rate at approximately the Relevant Time on the
Interest Determination Date in question. If two or more of the
Reference Banks provide the Relevant Agent with such offered
quotations, the Rate of Interest for such Interest Period shall be
the arithmetic mean (rounded if necessary to the fifth decimal
place with 0.000005 being rounded upwards) of such offered
quotations plus or minus (as appropriate) the Margin (if any), all
as determined by the Relevant Agent.
If on any Interest Determination Date one only or none of the
Reference Banks provides the Relevant Agent with such offered
quotations as provided in the preceding paragraph, the Rate of
Interest for the relevant Interest Period shall be the rate per
annum which the Relevant Agent determines as being the arithmetic
mean (rounded if necessary to the fifth decimal place, with
0.000005 being rounded upwards) of the rates, as communication to
(and at the request of) the Relevant Agent by the Reference Banks
or any two or more of them, at which such banks were offered, at
approximately the Relevant Time on the relevant Interest
Determination Date, deposits in the Specified Currency for the
relevant Interest Period by leading banks in the London inter-bank
market (if the Reference Rate is LIBOR), the Copenhagen inter-bank
market (if the Reference Rate is CIBOR), the Euro-zone inter-bank
market (if the Reference Rate is EURIBOR), the Stockholm inter-bank
market (if the Reference Rate is STIBOR) or the Norwegian
inter-bank market (if the Reference Rate is NIBOR) plus or minus
(as appropriate) the Margin (if any) or, if fewer than two of the
Reference Banks provide the Relevant Agent with such offered rates,
the offered rate for deposits in the Specified Currency for the
relevant Interest Period, or the arithmetic mean (rounded as
provided above) of the offered rates for deposits in the Specified
Currency for the relevant Interest Period, at which, at
approximately the Relevant Time on the relevant Interest
Determination Date, any one or more banks (which bank or banks is
or are in the opinion of the Issuer suitable for such purpose)
informs the Relevant Agent it is quoting to leading banks in the
London inter-bank market (if the Reference Rate is LIBOR), the
Copenhagen inter-bank market (if the Reference Rate is CIBOR), the
Euro-zone inter-bank market (if the Reference Rate is EURIBOR), the
Stockholm interbank market (if the Reference Rate is STIBOR) or the
Norwegian interbank market (if the Reference Rate is NIBOR) plus or
minus (as appropriate) the Margin (if any), provided that, if the
Rate of Interest cannot be determined in accordance with the
foregoing provisions of this paragraph, the Rate of Interest shall
be determined as at the last preceding Interest Determination Date
(though substituting, where a different Margin is to be applied to
the relevant Interest Period from that which applied to the last
preceding Interest Period, the Margin relating to the relevant
Interest Period, in place of the Margin relating to that last
preceding Interest Period).
As used herein:
"CIBOR" means, in respect of any currency and any period
specified hereon, the interest rate benchmark known as the
Copenhagen interbank offered rate which is calculated and published
by a designated distributor (currently Nasdaq Copenhagen) in
accordance with the requirements from time to time of the Danish
Bankers Association based on estimated interbank borrowing rates
for Danish kroner for a number of designated maturities which are
provided by a panel of contributor banks.
"EURIBOR" means, in respect of any specified currency and any
specified period, the interest rate benchmark known as the Euro
zone interbank offered rate which is calculated and published by a
designated distributor (currently Thomson Reuters) in accordance
with the requirements from time to time of the European Money
Markets Institute (or any other person which takes over the
administration of that rate) based on estimated interbank borrowing
rates for a number of designated currencies and maturities which
are provided, in respect of each such currency, by a panel of
contributor banks (details of historic EURIBOR rates can be
obtained from the designated distributor).
"LIBOR" means, in respect of any currency and any period
specified hereon, the London interbank offered rate for that
currency and period displayed as quoted on the appropriate page
(being currently Reuters screen page LIBOR01 or LIBOR02) on the
information service which publishes that rate.
"NIBOR" means, in respect of Norwegian Kroner and for any
specified period, the interest rate benchmark known as the
Norwegian interbank offered rate which is calculated and published
by a designated distributor (currently Oslo Børs) in accordance
with the requirements from time to time of the Norwegian
association for banks, insurance companies and financial
institutions, Finance Norway - FNO based on estimated interbank
borrowing rates for Norwegian Kroner for a number of designated
maturities which are provided by a panel of contributor banks
(details of historic NIBOR rates can be obtained from the
designated distributor).
"Reference Banks" means (i) in the case of a determination of
LIBOR, the principal London office of four major banks in the
London inter-bank market, (ii) in the case of a determination of
CIBOR, the principal Copenhagen office of four major banks in the
Copenhagen inter-bank market and (iii) in the case of a
determination of EURIBOR, the principal Euro-zone office of four
major banks in the Euro-zone inter-bank market, (iv) in the case of
determination of STIBOR the principal Stockholm office of four
major banks in the Stockholm inter-bank market and (v) in the case
of determination of NIBOR, the principal Oslo office of four major
banks in the Norwegian inter-bank market in each case selected by
the Relevant Agent;
"Reference Rate" means EURIBOR, LIBOR, CIBOR, STIBOR or NIBOR as
specified in the relevant Final Terms in respect of the currency
and period specified in the relevant Final Terms;
"Relevant Screen Page" means the page, section or other part of
a particular information service (including, but not limited to,
Reuters and Bloomberg), as may be specified as the Relevant Screen
Page in the relevant Final Terms, or such other page, section or
other part as may replace it on that information service or such
other information service, in each case, as may be nominated by the
Person providing or sponsoring the information appearing there for
the purpose of displaying rates or prices comparable to the
Reference Rate; and
"Relevant Time" means, unless otherwise specified in the
relevant Final Terms, 11.00 a.m. (London time, in the case of a
determination of LIBOR, Copenhagen time, in the case of a
determination of CIBOR, Brussels time, in the case of a
determination of EURIBOR, Stockholm time in the case of
determination of STIBOR, or Oslo time, in the case of determination
of NIBOR).
"STIBOR" means, in respect of Swedish Kronor and for any
specified period, the interest rate benchmark known as the
Stockholm interbank offered rate which is calculated and published
by a designated distributor (currently Nasdaq Stockholm) based on
estimated interbank borrowing rates for Swedish Kronor for a number
of designated maturities which are provided by a panel of
contributor banks (details of historic STIBOR rates can be obtained
from the designated distributor).
(c) Minimum Rate of Interest and/or Maximum Rate of Interest
If the applicable Final Terms specifies a Minimum Rate of
Interest for any Interest Period, then, in the event that the Rate
of Interest in respect of such Interest Period determined in
accordance with the provisions of paragraph (b) above is less than
such Minimum Rate of Interest, the Rate of Interest for such
Interest Period shall be such Minimum Rate of Interest.
If the applicable Final Terms specifies a Maximum Rate of
Interest for any Interest Period, then, in the event that the Rate
of Interest in respect of such Interest Period determined in
accordance with the provisions of paragraph (b) above is greater
than such Maximum Rate of Interest, the Rate of Interest for such
Interest Period shall be such Maximum Rate of Interest.
(d) Determination of Rate of Interest and calculation of Interest Amounts
The Agent, in the case of Floating Rate Bearer Notes and the
Calculation Agent, in the case of Floating Rate VP Systems Notes,
will at or as soon as practicable after each time at which the Rate
of Interest is to be determined, determine the Rate of Interest for
the relevant Interest Period.
The Agent, in the case of Floating Rate Bearer Notes and the
Calculation Agent, in the case of Floating Rate VP Systems Notes,
will calculate the amount of interest (the "Interest Amount")
payable on the Floating Rate Notes for the relevant Interest Period
by applying the Rate of Interest to:
(A) in the case of Floating Rate Notes which are represented by
a Global Note, the aggregate outstanding nominal amount of the
Notes represented by such Global Note; or
(B) in the case of Floating Rate Notes which are (I) in
definitive form or (II) VP Systems Notes, the Calculation
Amount;
and, in each case, multiplying such sum by the applicable Day
Count Fraction, and rounding the resultant figure to the nearest
sub--unit of the relevant Specified Currency, half of any such
sub--unit being rounded upwards or otherwise in accordance with
applicable market convention. Where the Specified Denomination of a
Floating Rate Note which is (I) in definitive form or (II) a VP
Systems Note is a multiple of the Calculation Amount, the Interest
Amount payable in respect of such Note shall be the product of the
amount (determined in the manner provided above) for the
Calculation Amount and the amount by which the Calculation Amount
is multiplied to reach the Specified Denomination, without any
further rounding.
"Day Count Fraction" means, in respect of the calculation of an
amount of interest in accordance with this Condition 5.2:
(i) if "Actual/Actual (ISDA)" or "Actual/Actual" is specified in
the applicable Final Terms, the actual number of days in the
Interest Period divided by 365 (or, if any portion of that Interest
Period falls in a leap year, the sum of (I) the actual number of
days in that portion of the Interest Period falling in a leap year
divided by 366 and (II) the actual number of days in that portion
of the Interest Period falling in a non--leap year divided by
365);
(ii) if "Actual/365 (Fixed)" is specified in the applicable
Final Terms, the actual number of days in the Interest Period
divided by 365;
(iii) if "Actual/365 (Sterling)" is specified in the applicable
Final Terms, the actual number of days in the Interest Period
divided by 365 or, in the case of an Interest Payment Date falling
in a leap year, 366;
(iv) if "Actual/360" is specified in the applicable Final Terms,
the actual number of days in the Interest Period divided by
360;
(v) if "30/360", "360/360" or "Bond Basis" is specified in the
applicable Final Terms, the number of days in the Interest Period
divided by 360, calculated on a formula basis as follows:
Day Count Fraction =
where:
"Y(1) " is the year, expressed as a number, in which the first
day of the Interest Period falls;
"Y(2) " is the year, expressed as a number, in which the day
immediately following the last day of the Interest Period
falls;
"M(1) " is the calendar month, expressed as a number, in which
the first day of the Interest Period falls;
"M(2) " is the calendar month, expressed as a number, in which
the day immediately following the last day of the Interest Period
falls;
"D(1) " is the first calendar day, expressed as a number, of the
Interest Period, unless such number is 31, in which case D(1) will
be 30; and
"D(2) " is the calendar day, expressed as a number, immediately
following the last day included in the Interest Period, unless such
number would be 31 and D(1) is greater than 29, in which case D(2)
will be 30;
(vi) if "30E/360" or "Eurobond Basis" is specified in the
applicable Final Terms, the number of days in the Interest Period
divided by 360, calculated on a formula basis as follows:
Day Count Fraction =
where:
"Y(1) " is the year, expressed as a number, in which the first
day of the Interest Period falls;
"Y(2) " is the year, expressed as a number, in which the day
immediately following the last day of the Interest Period
falls;
"M(1) " is the calendar month, expressed as a number, in which
the first day of the Interest Period falls;
"M(2) " is the calendar month, expressed as a number, in which
the day immediately following the last day of the Interest Period
falls;
"D(1) " is the first calendar day, expressed as a number, of the
Interest Period, unless such number would be 31, in which case D(1)
will be 30; and
"D(2) " is the calendar day, expressed as a number, immediately
following the last day included in the Interest Period, unless such
number would be 31, in which case D(2) will be 30;
(vii) if "30E/360 (ISDA)" is specified in the applicable Final
Terms, the number of days in the Interest Period divided by 360,
calculated on a formula basis as follows:
Day Count Fraction =
where:
"Y(1) " is the year, expressed as a number, in which the first
day of the Interest Period falls;
"Y(2) " is the year, expressed as a number, in which the day
immediately following the last day of the Interest Period
falls;
"M(1) " is the calendar month, expressed as a number, in which
the first day of the Interest Period falls;
"M(2) " is the calendar month, expressed as a number, in which
the day immediately following the last day of the Interest Period
falls;
"D(1) " is the first calendar day, expressed as a number, of the
Interest Period, unless (i) that day is the last day of February or
(ii) such number would be 31, in which case D(1) will be 30;
and
"D(2) " is the calendar day, expressed as a number, immediately
following the last day included in the Interest Period, unless (i)
that day is the last day of February but not the Maturity Date or
(ii) such number would be 31, in which case D(2) will be 30.
(e) Notification of Rate of Interest and Interest Amounts
The Agent or, in the case of VP Systems Notes, the Calculation
Agent, will cause the Rate of Interest and each Interest Amount for
each Interest Period and the relevant Interest Payment Date to be
notified to the Issuer and any stock exchange on which the relevant
Floating Rate Notes are for the time being listed and, in the case
of the VP Systems Notes, the VP Issuing Agent, (by no later than
the first day of each Interest Period) and notice thereof to be
published in accordance with Condition 14 as soon as possible after
their determination but in no event later than the fourth London
Business Day thereafter. Each Interest Amount and Interest Payment
Date so notified may subsequently be amended (or appropriate
alternative arrangements made by way of adjustment) without prior
notice in the event of an extension or shortening of the Interest
Period. Any such amendment will be promptly notified to each stock
exchange on which the relevant Floating Rate Notes are for the time
being listed and to the Noteholders in accordance with Condition
14. For the purposes of this paragraph, the expression "London
Business Day" means a day (other than a Saturday or a Sunday) on
which banks and foreign exchange markets are open for general
business in London.
(f) Certificates to be final
All certificates, communications, opinions, determinations,
calculations, quotations and decisions given, expressed, made or
obtained for the purposes of the provisions of this Condition 5.2,
whether by the Agent or, if applicable, the Calculation Agent,
shall (in the absence of wilful default, bad faith and manifest
error) be binding on the Issuer, the Agent, the VP Issuing Agent
(if applicable), the Calculation Agent (if applicable), the other
Paying Agents and all Noteholders, Receiptholders and Couponholders
and (in the absence of wilful default and bad faith) no liability
to the Issuer, the Noteholders, Receiptholders or the Couponholders
shall attach to the Agent or, if applicable, the VP Issuing Agent
and/or the Calculation Agent in connection with the exercise or
non--exercise by it of its powers, duties and discretions pursuant
to such provisions.
5.3 Rate Reset Provisions
Application: Conditions 5.3-5.7 (inclusive) shall only apply if
the Reset Note Provisions are specified in the relevant Final Terms
as being applicable to one or more Interest Period(s).
Accrual of Interest: The Notes bear interest on their
outstanding principal amounts:
(a) from (and including) the Interest Commencement Date to (but
excluding) the First Reset Date at the Initial Rate of
Interest;
(b) for the First Reset Period at the First Reset Rate of Interest; and
(c) for each Subsequent Reset Period thereafter (if any) to (but
excluding) the Maturity Date at the relevant Subsequent Reset Rate
of Interest,
payable, in each case, in arrear on each relevant Interest
Payment Date (subject as provided in Condition 6 (Payments).
The Rate of Interest and the Interest Amount payable shall be
determined by the Calculation Agent, (A) in the case of the Rate of
Interest, at or as soon as practicable after each time at which the
Rate of Interest is to be determined, and (B) in the case of the
Interest Amount in accordance with the provisions for calculating
amounts of interest in Conditions 5.1.
5.4 Fallbacks
If on any Reset Determination Date, the Relevant Screen Page is
not available or the Mid-Swap Rate does not appear on the Relevant
Screen Page as of the Relevant Time on such Reset Determination
Date, the Rate of Interest applicable to the Notes in respect of
each Interest Period falling in the relevant Reset Period will be
determined by the Calculation Agent on the following basis:
(a) the Calculation Agent shall request each of the Reset
Reference Banks to provide the Calculation Agent with its
Mid-Market Swap Rate Quotation as at approximately the Relevant
Time on the Reset Determination Date in question;
(b) if at least three of the Reset Reference Banks provide the
Calculation Agent with Mid-Market Swap Rate Quotations, the First
Reset Rate of Interest or the Subsequent Reset Rate of Interest (as
applicable) for the relevant Reset Period will be equal to the sum
of (A) the arithmetic mean (rounded, if necessary, to the nearest
0.001 per cent. (0.0005 per cent. being rounded upwards)) of the
relevant quotations provided, eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest
(or, in the event of equality, one of the lowest) and (B) the
relevant Reset Margin, all as determined by the Calculation
Agent;
(c) if only two relevant quotations are provided, the First
Reset Rate of Interest or the Subsequent Reset Rate of Interest (as
applicable) for the relevant Reset Period will be equal to the sum
of (A) the arithmetic mean (rounded as aforesaid) of the relevant
quotations provided and (B) the relevant Reset Margin, all as
determined by the Calculation Agent;
(d) if only one relevant quotation is provided, the First Reset
Rate of Interest or the Subsequent Reset Rate of Interest (as
applicable) for the relevant Reset Period will be equal to the sum
of (A) the relevant quotation provided and (B) the relevant Reset
Margin, all as determined by the Calculation Agent; and
(e) if none of the Reset Reference Banks provides the
Calculation Agent with a Mid-Market Swap Rate Quotation as provided
in the foregoing provisions of this Condition 6.7, the First Reset
Rate of Interest or the Subsequent Reset Rate of Interest (as
applicable) will be equal to the sum of (A) the Mid-Swap Rate
determined on the last preceding Reset Determination Date and (B)
the relevant Reset Margin or, in the case of the first Reset
Determination Date, the First Reset Rate of Interest will be equal
to the sum of (A) the Initial Mid-Swap Rate and (B) the relevant
Reset Margin, all as determined by the Calculation Agent.
5.5 Mid-Swap Rate Conversion
This Condition 5.5 is only applicable if Mid-Swap Rate
Conversion is specified in the relevant Final Terms. If Mid-Swap
Rate Conversion is so specified as being applicable, the First
Reset Rate of Interest and, if applicable, each Subsequent Reset
Rate of Interest Issuing will be converted from the Original
Mid-Swap Rate Basis specified in the relevant Final Terms to a
basis which matches the per annum frequency of Interest Payment
Dates in respect of the relevant Notes (such calculation to be
determined by the Issuer in conjunction with a leading financial
institution selected by it).
5.6 Publication
The Calculation Agent will cause the First Reset Rate of
Interest, any Subsequent Reset Rate of Interest and, in respect of
a Reset Period, the Interest Amount payable on each Interest
Payment Date falling in such Reset Period to be notified to the
Agents, each listing authority, stock exchange and/or quotation
system (if any) on which the Notes have then been admitted to
listing, trading and/or quotation and, in the case of VP Systems
Notes, the VP, VP Lux, VPS or Euroclear Sweden, as the case may be,
and the VP Issuing Agent as soon as practicable after such
determination. Notice thereof shall also promptly be given to the
Noteholders.
5.7 Notification
All notifications, opinions, determinations, certificates,
calculations, quotations and decisions given, expressed, made or
obtained for the purposes of Conditions 5.3 - 5.7 (inclusive) by
the Calculation Agent will (in the absence of manifest error) be
binding on the Issuer, the Agent, the VP Issuing Agent (if
applicable), the Noteholders, the Receiptholders and the
Couponholders and (subject as aforesaid) no liability to any such
Person will attach to the Calculation Agent in connection with the
exercise or non-exercise by it of its powers, duties and
discretions for such purposes.
where:
"First Reset Date" means the date specified in the relevant
Final Terms;
"First Reset Margin" means the margin specified as such in the
relevant Final Terms;
"First Reset Period" means the period from (and including) the
First Reset Date to (but excluding) the Second Reset Date or, if no
such Second Reset Date is specified in the relevant Final Terms,
the Maturity Date;
"First Reset Rate of Interest" means, in respect of the First
Reset Period and subject to Condition 5.4 (Fallbacks) and Condition
5.5 (Mid-Swap Rate Conversion), the rate of interest determined by
the Calculation Agent on the relevant Reset Determination Date and
may be either a fixed rate or a floating rate. If a fixed rate it
shall be calculated as the sum of the relevant Mid-Swap Rate and
the First Reset Margin. If a floating rate it shall be calculated
as the sum of the floating rate specified in the Final Terms as
applicable to the First Reset Period and the First Reset
Margin;
"Initial Mid-Swap Rate" has the meaning specified in the
relevant Final Terms;
"Mid-Market Swap Rate" means for any Reset Period the mean of
the bid and offered rates for the fixed leg payable with a
frequency equivalent to the Original Mid-Swap Rate Basis
(calculated on the day count basis customary for fixed rate
payments in the Specified Currency as determined by the Calculation
Agent) of a fixed-for-floating interest rate swap transaction in
the Specified Currency which transaction (i) has a term equal to
the relevant Reset Period and commencing on the relevant Reset
Date, (ii) is in an amount that is representative for a single
transaction in the relevant market at the relevant time with an
acknowledged dealer of good credit in the swap market and (iii) has
a floating leg based on the Mid-Swap Floating Leg Benchmark Rate
for the Mid-Swap Floating Leg Maturity (calculated on the day count
basis customary for floating rate payments in the Specified
Currency as determined by the Calculation Agent);
"Mid-Market Swap Rate Quotation" means a quotation (expressed as
a percentage rate per annum) for the relevant Mid-Market Swap
Rate;
"Mid-Swap Rate" means, in relation to a Reset Determination Date
and subject to Condition 5.4 (Fallbacks), either:
(a) if Single Mid-Swap Rate is specified in the relevant Final
Terms, the rate for swaps in the Specified Currency:
(i) with a term equal to the relevant Reset Period; and
(ii) commencing on the relevant Reset Date, which appears on the Relevant Screen Page; or
(b) if Mean Mid-Swap Rate is specified in the relevant Final
Terms, the arithmetic mean (expressed as a percentage rate per
annum and rounded, if necessary, to the nearest 0.001 per cent.
(0.0005 per cent. being rounded upwards)) of the bid and offered
swap rate quotations for swaps in the Specified Currency:
(i) with a term equal to the relevant Reset Period; and
(ii) commencing on the relevant Reset Date, which appear on the
Relevant Screen Page, in either case, as at approximately the
Relevant Time on such Reset Determination Date, all as determined
by the Calculation Agent;
"Reset Date" means the First Reset Date, the Second Reset Date
and each Subsequent Reset Date (as applicable);
"Reset Determination Date" means, in respect of a Reset Period,
the date specified as such in the relevant Final Terms;
"Reset Margin" means the First Reset Margin and the Subsequent
Reset Margin (as applicable);
"Reset Period" means the First Reset Period or a Subsequent
Reset Period, as the case may be;
"Reset Reference Banks" means the principal office in the
principal financial centre of the Specified Currency of five major
banks in the swap, money, securities or other market most closely
connected with the relevant Mid-Swap Rate as selected by the
Calculation Agent in its discretion after consultation with the
Issuer;
"Subsequent Reset Date" means the date or dates specified in the
relevant Final Terms;
"Subsequent Reset Margin" means the margin specified as such in
the relevant Final Terms;
"Subsequent Reset Period" means the period from (and including)
the Second Reset Date to (but excluding) the next Subsequent Reset
Date, and each successive period from (and including) a Subsequent
Reset Date to (but excluding) the next succeeding Subsequent Reset
Date or the Maturity Date as the case may be; and
"Subsequent Reset Rate of Interest" means in respect of any
Subsequent Reset Period and subject to Condition 5.4 (Fallbacks)
and Condition 5.5(Mid-Swap Rate Conversion), the rate of interest
determined by the Calculation Agent on the relevant Reset
Determination Date and may be either a fixed rate or a floating
rate. If a fixed rate it shall be calculated as the sum of the
relevant Mid-Swap Rate and the relevant Subsequent Reset Margin. If
a floating rate it shall be calculated as the sum of the floating
rate specified in the Final Terms as applicable to the Subsequent
Reset Period and the Subsequent Reset Margin.
5.8 Accrual of interest
Each Note (or in the case of the redemption of part only of a
Note, that part only of such Note) will cease to bear interest (if
any) from the date for its redemption unless payment of principal
is improperly withheld or refused.
In such event:
(a) in the case of Bearer Notes, interest will continue to
accrue until whichever is the earlier of:
(i) the date on which all amounts due in respect of such Note have been paid; and
(ii) five days after the date on which the full amount of the
moneys payable in respect of such Note has been received by the
Agent and notice to that effect has been given to the Noteholders
in accordance with Condition 14; or
(b) in the case of VP Systems Notes, interest will continue to
accrue until the date the holders of the VP Systems Notes receive
the full amount of such payments.
6. PAYMENTS
6.1 Method of payment
Subject as provided below:
(a) payments in a Specified Currency other than euro will be
made by credit or transfer to an account in the relevant Specified
Currency maintained by the payee with, or, at the option of the
payee, by a cheque in such Specified Currency drawn on, a bank in
the principal financial centre of the country of such Specified
Currency (which, if the Specified Currency is Australian dollars or
New Zealand dollars, shall be Sydney and Auckland, respectively);
and
(b) payments in euro will be made by credit or transfer to a
euro account (or any other account to which euro may be credited or
transferred) specified by the payee or, at the option of the payee,
by a euro cheque.
Payments will be subject in all cases to any fiscal or other
laws and regulations applicable thereto in the place of payment,
but without prejudice to the provisions of Condition 8.
6.2 Presentation of definitive Notes, Receipts and Coupons
Payments of principal in respect of definitive Notes will be
made in the manner provided in Condition 6.1 above only against
presentation and surrender (or, in the case of part payment of any
sum due, endorsement) of definitive Notes, and payments of interest
in respect of definitive Notes will (subject as provided below) be
made as aforesaid only against presentation and surrender (or, in
the case of part payment of any sum due, endorsement) of Coupons,
in each case at the specified office of any Paying Agent outside
the United States (which expression, as used herein, means the
United States of America (including the States and the District of
Columbia and its possessions)).
Payments of instalments of principal (if any) in respect of
definitive Notes, other than the final instalment, will (subject as
provided below) be made in the manner provided in Condition 6.1
above only against presentation and surrender (or, in the case of
part payment of any sum due, endorsement) of the relevant Receipt
in accordance with the preceding paragraph. Payment of the final
instalment will be made in the manner provided in the Condition 6.1
above only against presentation and surrender (or, in the case of
part payment of any sum due, endorsement) of the relevant Note in
accordance with the preceding paragraph. Each Receipt must be
presented for payment of the relevant instalment together with the
definitive Note to which it appertains. Receipts presented without
the definitive Note to which they appertain do not constitute valid
obligations of the Issuer. Upon the date on which any definitive
Note becomes due and repayable ,unmatured Receipts (if any)
relating thereto (whether or not attached) shall become void and no
payment shall be made in respect thereof.
Fixed Rate Notes in definitive form should be presented for
payment together with all unmatured Coupons appertaining thereto
(which expression shall for this purpose include Coupons falling to
be issued on exchange of matured Talons), failing which the amount
of any missing unmatured Coupon (or, in the case of payment not
being made in full, the same proportion of the amount of such
missing unmatured Coupon as the sum so paid bears to the sum due)
will be deducted from the sum due for payment. Each amount of
principal so deducted will be paid in the manner mentioned above
against surrender of the relative missing Coupon at any time before
the expiry of 10 years after the Relevant Date (as defined in
Condition 8) in respect of such principal (whether or not such
Coupon would otherwise have become void under Condition 9) or, if
later, five years from the date on which such Coupon would
otherwise have become due, but in no event thereafter.
Upon any Fixed Rate Note in definitive form becoming due and
repayable prior to its Maturity Date, all unmatured Talons (if any)
appertaining thereto will become void and no further Coupons will
be issued in respect thereof.
Upon the date on which any Floating Rate Note, or Long Maturity
Note in definitive form becomes due and repayable, unmatured
Coupons and Talons (if any) relating thereto (whether or not
attached) shall become void and no payment or, as the case may be,
exchange for further Coupons shall be made in respect thereof. A
"Long Maturity Note" is a Fixed Rate Note (other than a Fixed Rate
Note which on issue had a Talon attached) whose nominal amount on
issue is less than the aggregate interest payable thereon provided
that such Note shall cease to be a Long Maturity Note on the
Interest Payment Date on which the aggregate amount of interest
remaining to be paid after that date is less than the nominal
amount of such Note.
If the due date for redemption of any definitive Note is not an
Interest Payment Date, interest (if any) accrued in respect of such
Note from (and including) the preceding Interest Payment Date or,
as the case may be, the Interest Commencement Date shall be payable
only against surrender of the relevant definitive Note.
6.3 Payments in respect of Global Notes
Payments of principal and interest (if any) in respect of Notes
represented by any Global Note will (subject as provided below) be
made in the manner specified above in relation to definitive Notes
or otherwise in the manner specified in the relevant Global Note,
where applicable against presentation or surrender, as the case may
be, of such Global Note at the specified office of any Paying Agent
outside the United States. A record of each payment made,
distinguishing between any payment of principal and any payment of
interest, will be made on such Global Note either by the Paying
Agent to which it was presented or in the records of Euroclear and
Clearstream, Luxembourg, as applicable.
6.4 Payments in respect of VP Systems Notes
Payments of principal and interest in respect of VP Notes will
be made to the persons registered as Noteholders on the fifth
Danish Business Day (or such other day which may become customary
on the Danish bond market in respect of VP Notes, which in respect
of VP Notes denominated in Danish kroner is expected to be the
third Danish Business Day) prior to the Interest Payment Date or
the Maturity Date, as the case may be, all in accordance with the
rules and procedures applied and/or issued by the VP from time to
time.
Payments of principal and interest in respect of VP Lux Notes
will be made to the persons registered as Noteholders at the
opening of business on the Luxembourg Business Day on which such
payments are to be made (or such other time and day which may
become customary on the Luxembourg bond market in respect of VP Lux
Notes), all in accordance with the rules and procedures applied
and/or issued by the VP Lux from time to time.
As used herein:
"Danish Business Day" means a day on which commercial banks and
foreign exchange markets are open for business in Denmark; and
"Luxembourg Business Day" means a day on which commercial banks
and foreign exchange markets are open for business in
Luxembourg.
6.5 General provisions applicable to payments
The holder of a Global Note shall be the only person entitled to
receive payments in respect of Notes represented by such Global
Note and the Issuer will be discharged by payment to, or to the
order of, the holder of such Global Note in respect of each amount
so paid. Each of the persons shown in the records of Euroclear or
Clearstream, Luxembourg as the beneficial holder of a particular
nominal amount of Notes represented by such Global Note must look
solely to Euroclear or Clearstream, Luxembourg, as the case may be,
for his share of each payment so made by the Issuer to, or to the
order of, the holder of such Global Note.
Notwithstanding the foregoing provisions of this Condition, if
any amount of principal and/or interest in respect of Notes is
payable in U.S. dollars, such U.S. dollar payments of principal
and/or interest in respect of such Notes will be made at the
specified office of a Paying Agent in the United States if:
(a) the Issuer has appointed Paying Agents with specified
offices outside the United States with the reasonable expectation
that such Paying Agents would be able to make payment in U.S.
dollars at such specified offices outside the United States of the
full amount of principal and interest on the Notes in the manner
provided above when due;
(b) payment of the full amount of such principal and interest at
all such specified offices outside the United States is illegal or
effectively precluded by exchange controls or other similar
restrictions on the full payment or receipt of principal and
interest in U.S. dollars; and
(c) such payment is then permitted under United States law
without involving, in the opinion of the Issuer adverse tax
consequences to the Issuer.
6.6 Payment Day
If the date for payment of any amount in respect of any Note,
Receipt or Coupon is not a Payment Day, the holder thereof shall
not be entitled to payment until the next following Payment Day and
shall not be entitled to further interest or other payment in
respect of such delay. For these purposes, "Payment Day" means any
day which (subject to Condition 9) is:
(a) a day on which commercial banks and foreign exchange markets
settle payments and are open for general business (including
dealing in foreign exchange and foreign currency deposits) in:
(i) in the case of Notes in definitive form only, the relevant place of presentation;
(ii) each Additional Financial Centre specified in the applicable Final Terms; and
(b) either (A) in relation to any sum payable in a Specified
Currency other than euro, a day on which commercial banks and
foreign exchange markets settle payments and are open for general
business (including dealing in foreign exchange and foreign
currency deposits) in the principal financial centre of the country
of the relevant Specified Currency (which if the Specified Currency
is Australian dollars or New Zealand dollars shall be Sydney and
Auckland, respectively) or (B) in relation to any sum payable in
euro, a day on which the TARGET2 System is open.
6.7 Interpretation of principal and interest
Any reference in the Conditions to principal in respect of the
Notes shall be deemed to include, as applicable:
(a) any additional amounts which may be payable with respect to
principal under Condition 8;
(b) the Final Redemption Amount of the Notes;
(c) the Early Redemption Amount of the Notes;
(d) the Optional Redemption Amount(s) (if any) of the Notes;
(e) in relation to Notes redeemable in instalments, the Instalment Amounts;
(f) in relation to Zero Coupon Notes, the Amortised Face Amount
(as defined in Condition 7.6); and
(g) any premium and any other amounts (other than interest)
which may be payable by the Issuer under or in respect of the
Notes.
Any reference in the Conditions to interest in respect of the
Notes shall be deemed to include, as applicable, any additional
amounts which may be payable with respect to interest under
Condition 8.
7. REDEMPTION AND PURCHASE
7.1 Redemption at maturity
Unless previously redeemed or purchased and cancelled as
specified below, each Note will be redeemed by the Issuer at its
Final Redemption Amount specified in, or determined in the manner
specified in, the applicable Final Terms in the relevant Specified
Currency on the Maturity Date.
7.2 Early redemption of the Subordinated Notes
This Condition 7.2 is only applicable to Subordinated Notes.
During the first five years after an issue of Subordinated
Notes, such Subordinated Notes may only be redeemed if the
situations described under Conditions 7.2.1 and 7.2.2 below
apply.
7.2.1 Early redemption for tax reasons
The Subordinated Notes may be redeemed at the option of the
Issuer in whole, but not in part, at any time (if this Subordinated
Note is not a Floating Rate Note,) or on any Interest Payment Date
(if this Subordinated Note is a Floating Rate Note), on giving not
less than 30 nor more than 60 days' notice to the Agent or, in the
case of VP Systems Notes, the VP Issuing Agent and, in accordance
with Condition 14, the Noteholders (which notice shall be
irrevocable), if:
(a) on the occasion of the next payment due under the
Subordinates Notes, the Issuer has or will become obliged to pay
additional amounts as provided or referred to in Condition 8 as a
result of any change in, or amendment to, the laws or regulations
of a Tax Jurisdiction (as defined in Condition 8), or any material
change in the application or official interpretation of such laws
or regulations, which change or amendment becomes effective on or
after the date on which agreement is reached to issue the first
Tranche of the Subordinates Notes; and
(b) the Issuer having demonstrated to the satisfaction of the
DFSA that such change in tax treatment of the relevant Subordinated
Notes is material and was not reasonably foreseeable at the time of
issuance of the first Tranche of the Subordinated Notes,
provided that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which the Issuer
would be obliged to pay such additional amounts were a payment in
respect of the Notes then due.
Prior to the publication of any notice of redemption pursuant to
this Condition, the Issuer shall deliver to the Agent or, in the
case of VP Systems Notes, the VP Issuing Agent a certificate signed
by two Directors of the Issuer stating that the Issuer is entitled
to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Issuer so
to redeem have occurred, and an opinion of independent legal
advisers of recognised standing to the effect that the Issuer has
or will become obliged to pay such additional amounts as a result
of such change or amendment.
Notes redeemed pursuant to this Condition 7.2.1 will be redeemed
at their Early Redemption Amount referred to in Condition 7.6 below
together (if appropriate) with interest accrued to (but excluding
or, in the case of VP Systems Notes, and including) the date of
redemption
7.2.2 Early redemption for regulatory reclassification reasons
The Subordinated Notes may be redeemed at the option of the
Issuer in whole, but not in part, at any time (if the Subordinated
Note is not a Floating Rate Note) or on any Interest Payment Date
(if this Subordinated Note is a Floating Rate Note) on giving not
less than 30 but no more than 60 days' notice to the Agent or, in
the case of VP Systems Notes, the VP Issuing Agent and, in
accordance with 14, the Noteholders (which notice shall be
irrevocable), if a change in the regulatory classification of the
Subordinated Notes results or will result in:
(a) their exclusion, in whole or in part from the regulatory
capital (in the meaning of the CRD IV Regulation) of the Issuer;
or
(b) reclassification, in whole or in part as a lower quality
form of regulatory capital of the Issuer,
and the DFSA considering such change sufficiently certain and
the Issuer having demonstrated to the satisfaction of the DFSA that
such exclusion or regulatory reclassification was not reasonably
foreseeable at the time of issuance of the first tranche of the
Subordinated Notes,
provided that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which such
change or reclassification, as applicable, becomes effective.
Prior to the publication of any notice of redemption pursuant to
this Condition, the Issuer shall deliver to the Agent or, in the
case of VP Systems Notes, the VP Issuing Agent a certificate signed
by two Directors of the Issuer stating that the Issuer is entitled
to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Issuer to
so redeem have occurred, and an opinion of independent legal
advisers of recognised standing to the effect that one of the
conditions set out above in paragraphs (a) and (b) have been
satisfied.
Notes redeemed pursuant to this Condition 7.2.2 will be redeemed
at their Early Redemption Amount referred to in Condition 7.6 below
together (if appropriate) with interest accrued to (but excluding
or, in the case of VP Systems Notes, and including) the date of
redemption.
7.3 Redemption for tax reasons
This Condition 7.3 is only applicable to Senior Notes.
The Senior Notes may be redeemed at the option of the Issuer in
whole, but not in part, at any time (if this Senior Note is not a
Floating Rate Note,) or on any Interest Payment Date (if this
Senior Note is a Floating Rate Note), on giving not less than 30
nor more than 60 days' notice to the Agent or, in the case of VP
Systems Notes, the VP Issuing Agent and, in accordance with
Condition 14, the Noteholders (which notice shall be irrevocable),
if:
(a) on the occasion of the next payment due under the Senior
Notes, the Issuer has or will become obliged to pay additional
amounts as provided or referred to in Condition 8 as a result of
any change in, or amendment to, the laws or regulations of a Tax
Jurisdiction (as defined in Condition 8) or any change in the
application or official interpretation of such laws or regulations,
which change or amendment becomes effective on or after the date on
which agreement is reached to issue the first Tranche of the Senior
Notes; and
(b) such obligation cannot be avoided by the Issuer taking
reasonable measures available to it,
provided that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which the Issuer
would be obliged to pay such additional amounts were a payment in
respect of the Senior Notes then due.
Prior to the publication of any notice of redemption pursuant to
this Condition, the Issuer shall deliver to the Agent or, in the
case of VP Systems Notes, the VP Issuing Agent a certificate signed
by two Directors of the Issuer stating that the Issuer is entitled
to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Issuer so
to redeem have occurred, and an opinion of independent legal
advisers of recognised standing to the effect that the Issuer has
or will become obliged to pay such additional amounts as a result
of such change or amendment.
Senior Notes redeemed pursuant to this Condition 7.3 will be
redeemed at their Early Redemption Amount referred to in Condition
7.6 below together (if appropriate) with interest accrued to (but
excluding or, in the case of VP Systems Notes, and including) the
date of redemption.
7.4 Redemption at the option of the Issuer (Issuer Call)
If Issuer Call is specified in the applicable Final Terms, the
Issuer may, having given:
(a) not less than 15 nor more than 30 days' notice to the
Noteholders in accordance with Condition 14; and
(b) not less than 15 days before the giving of the notice
referred to in (a) above, notice to the Agent or, in the case of VP
Systems Notes, the VP Issuing Agent;
(which notices shall be irrevocable and shall specify the date
fixed for redemption), redeem all or some only of the Notes then
outstanding on any Optional Redemption Date and at the Optional
Redemption Amount(s) specified in, or determined in the manner
specified in, the applicable Final Terms together, if appropriate,
with interest accrued to (but excluding or, in the case of VP
Systems Notes, and including) the relevant Optional Redemption
Date. Any such redemption must be of a nominal amount not less than
the Minimum Redemption Amount and not more than the Maximum
Redemption Amount, in each case as may be specified in the
applicable Final Terms. In the case of a partial redemption of
Notes, the Notes to be redeemed ("Redeemed Notes") will be selected
individually by lot, in the case of Redeemed Notes represented by
definitive Notes, and in accordance with the rules of Euroclear
and/or Clearstream, Luxembourg, (to be reflected in the records of
Euroclear and Clearstream, Luxembourg as either a pool factor or a
reduction in nominal amount, at their discretion) in the case of
Redeemed Notes represented by a Global Note, and in accordance with
the rules of the VP, in the case of VP Notes, and in accordance
with the rules of the VP Lux, in the case of VP Lux Notes, in each
case not more than 30 days prior to the date fixed for redemption
(such date of selection being hereinafter called the "Selection
Date"). In the case of Redeemed Notes represented by definitive
Notes, a list of the serial numbers of such Redeemed Notes will be
published in accordance with Condition 14 not less than 15 days
prior to the date fixed for redemption. No exchange of the relevant
Global Note will be permitted during the period from (and
including) the Selection Date to (and including) the date fixed for
redemption pursuant to this Condition 7 and notice to that effect
shall be given by the Issuer to the Noteholders in accordance with
Condition 14 at least five days prior to the Selection Date.
7.5 Redemption at the option of the Noteholders (Investor Put)
If Investor Put is specified in the applicable Final Terms, upon
the holder of any Note giving to the Issuer in accordance with
Condition 14 not less than 15 nor more than 30 days' notice the
Issuer will, upon the expiry of such notice, redeem, subject to,
and in accordance with, the terms specified in the applicable Final
Terms, such Note on the Optional Redemption Date and at the
Optional Redemption Amount together, if appropriate, with interest
accrued to (but excluding or, in the case of VP Systems Notes, and
including) the Optional Redemption Date. It may be that before an
Investor Put can be exercised, certain conditions and/or
circumstances will need to be satisfied. Where relevant, the
provisions will be set out in the applicable Final Terms.
To exercise the right to require redemption of this Note the
holder of this Note must, if this Note is in definitive form and
held outside Euroclear and Clearstream, Luxembourg, deliver, at the
specified office of any Paying Agent at any time during normal
business hours of such Paying Agent falling within the notice
period, a duly completed and signed notice of exercise in the form
(for the time being current) obtainable from any specified office
of any Paying Agent (a "Put Notice") and in which the holder must
specify a bank account (or, if payment is required to be made by
cheque, an address) to which payment is to be made under this
Condition accompanied by this Note or evidence satisfactory to the
Paying Agent concerned that this Note will, following delivery of
the Put Notice, be held to its order or under its control. If this
Note is represented by a Global Note or is in definitive form and
held through Euroclear or Clearstream, Luxembourg, to exercise the
right to require redemption of this Note the holder of this Note
must, within the notice period, give notice to the Agent of such
exercise in accordance with the standard procedures of Euroclear
and Clearstream, Luxembourg (which may include notice being given
on his instruction by Euroclear or Clearstream, Luxembourg or any
common depositary or common safekeeper, as the case may be, for
them to the Agent by electronic means) in a form acceptable to
Euroclear and Clearstream, Luxembourg from time to time and, if
this Note is represented by a Global Note, at the same time present
or procure the presentation of the relevant Global Note to the
Agent for notation accordingly.
In the case of VP Systems Notes, a Put Notice will not be
effective against the Issuer before the date on which the relevant
VP Systems Notes have been transferred to the account designated by
the relevant VP Issuing Agent and blocked for further transfer
until the Optional Redemption Date by the VP Issuing Agent. In the
case of VP Systems Notes, the right to require redemption of such
Notes in accordance with this Condition 7.5 must be exercised in
accordance with the rules and procedures of the VP (in the case of
VP Notes) or the VP Lux (in the case of VP Lux Notes) and if there
is any inconsistency between the forgoing and the rules and
procedures of the VP or VP Lux, as the case may be, the rules and
procedures of the VP (in the case of VP Notes) or the VP Lux (in
the case of VP Lux Notes) shall prevail.
Any Put Notice or other notice given in accordance with the
standard procedures of Euroclear and Clearstream, Luxembourg, the
VP or the VP Lux given by a holder of any Note pursuant to this
Condition 7.5 shall be irrevocable except where, prior to the due
date of redemption, an Event of Default has occurred and is
continuing, in which event such holder, at its option, may elect by
notice to the Issuer to withdraw the notice given pursuant to this
Condition 7.5 and instead to declare such Note forthwith due and
payable pursuant to Condition 10.
7.6 Early Redemption Amounts
For the purpose of Condition 7.3 above and Condition 10, each
Note will be redeemed at its Early Redemption Amount calculated as
follows:
(a) in the case of a Note with a Final Redemption Amount equal
to the Issue Price, at the Final Redemption Amount thereof;
(b) in the case of a Note (other than a Zero Coupon Note but
including an Instalment Note) with a Final Redemption Amount which
is or may be less or greater than the Issue Price or which is
payable in a Specified Currency other than that in which the Note
is denominated, at the amount specified in, or determined in the
manner specified in, the applicable Final Terms or, if no such
amount or manner is so specified in the applicable Final Terms, at
its nominal amount; or
(c) in the case of a Zero Coupon Note, at an amount (the
"Amortised Face Amount") calculated in accordance with the
following formula:
Early Redemption Amount =
where:
RP means the Reference Price;
AY means the Accrual Yield expressed as a decimal; and
(y) is a fraction the numerator of which is equal to the number
of days (calculated on the basis of a 360--day year consisting of
12 months of 30 days each) from (and including or, in the case of
VP Systems Notes, but excluding) the Issue Date of the first
Tranche of the Notes to (but excluding or, in the case of VP
Systems Notes, and including) the date fixed for redemption or (as
the case may be) the date upon which such Note becomes due and
repayable and the denominator of which is 360,
or on such other calculation basis as may be specified in the
applicable Final Terms.
7.7 Instalments
Instalment Notes will be redeemed in the Instalment Amounts and
on the Instalment Dates. In the case of early redemption, the Early
Redemption Amount will be determined pursuant to Condition 7.6.
7.8 Purchases
The Issuer or any subsidiary of the Issuer may at any time,
however, in the case of Subordinated Notes only after five years
from issuance and subject to the prior consent of the DFSA (if
required), purchase Notes (provided that, in the case of definitive
Notes, all unmatured Receipts, Coupons and Talons appertaining
thereto are purchased therewith) at any price in the open market or
otherwise. Such Notes may be held, reissued, resold or, at the
option of the Issuer, surrendered to any Paying Agent for
cancellation or, in the case of VP Systems Notes, cancelled by
causing such VP Systems Notes to be deleted from the records of the
VP (in the case of VP Notes) or the VP Lux (in the case of VP Lux
Notes).
7.9 Cancellation
All Notes which are redeemed will forthwith be cancelled
(together with all unmatured Receipts, Coupons and Talons attached
thereto or surrendered therewith at the time of redemption). All
Notes so cancelled and any Notes purchased and cancelled pursuant
to Condition 7.8 above (together with all unmatured Receipts,
Coupons and Talons cancelled therewith) shall (in the case of
Bearer Notes) be forwarded to the Agent and cannot (in any case) be
reissued or resold.
7.10 Late payment on Zero Coupon Notes
If the amount payable in respect of any Zero Coupon Note upon
redemption of such Zero Coupon Note pursuant to Condition 7.3, 7.4
or 7.5 above or upon its becoming due and repayable as provided in
Condition 10 is improperly withheld or refused, the amount due and
repayable in respect of such Zero Coupon Note shall be the amount
calculated as provided in Condition 7.6(c) above as though the
references therein to the date fixed for the redemption or the date
upon which such Zero Coupon Note becomes due and payable were
replaced by references to:
(a) in the case of Bearer Notes, the date which is the earlier of:
(i) the date on which all amounts due in respect of such Zero
Coupon Note have been paid; and
(ii) five days after the date on which the full amount of the
moneys payable in respect of such Zero Coupon Notes has been
received by the Agent and notice to that effect has been given to
the Noteholders in accordance with Condition 14; or
(b) in the case of VP Systems Notes, the date on which holders
of the VP Systems Notes received the full amount of such
payment.
7.11 Consent of the DFSA
The Issuer will not redeem any Subordinated Notes pursuant to
Condition 7.2 or Condition 7.4, nor agree to any modification of
these Conditions pursuant to Condition 15 in relation to any
Subordinated Notes, without first consulting with and obtaining the
prior consent of the DFSA.
As used in these Conditions:
"DFSA" means the Danish Financial Supervisory Authority or any
successor or replacement thereto or such other authority in Denmark
having primary responsibility for the prudential oversight and
supervision of the Issuer.
8. TAXATION
8.1 Taxation provisions applicable to Bearer Notes
All payments of principal and interest in respect of the Bearer
Notes, Receipts and Coupons by the Issuer will be made free and
clear of, and without withholding or deduction for or on account of
any present or future taxes or duties of whatever nature imposed or
levied by or on behalf of any Tax Jurisdiction unless such
withholding or deduction is required by law. In such event, the
Issuer will pay such additional amounts as shall be necessary in
order that the net amounts received by the holders of the Bearer
Notes, Receipts or Coupons after such withholding or deduction
shall equal the respective amounts of principal and interest which
would otherwise have been receivable in respect of the Bearer
Notes, Receipts or Coupons, as the case may be, in the absence of
such withholding or deduction; except that no such additional
amounts shall be payable with respect to any Bearer Note, Receipt
or Coupon:
(a) presented for payment in The Kingdom of Denmark; and/or
(b) presented for payment to, or to a third party on behalf of,
at holder of which is liable for such taxes, duties, assessments or
governmental charges in respect of such Note, Receipt or Coupon by
reason of his having some connection with a Tax Jurisdiction other
than the mere holding of such Note, Receipt or Coupon; or
(c) presented for payment more than thirty (30) days after the
Relevant Date (as defined below) except to the extent that the
holder thereof would have been entitled to an additional amount on
presenting the same for payment on such thirtieth day assuming that
day to have been a Payment Day (as defined in Condition 6.6);
and/or
(d) where such withholding or deduction is imposed on a payment
to an individual and is required to be made pursuant to European
Council Directive 2003/48/EC on the taxation of savings income or
any law implementing or complying with, or introduced in order to
conform to, such Directive; and/or
(e) presented for payment by or on behalf of a holder who would
have been able to avoid such withholding or deduction by presenting
the relevant Note, Receipt or Coupon to another Paying Agent in a
Member State of the European Union.
As used herein:
(i) "Tax Jurisdiction" means The Kingdom of Denmark or any
political subdivision or any authority thereof or therein having
power to tax; and
(ii) the "Relevant Date" means the date on which such payment
first becomes due, except that, if the full amount of the moneys
payable has not been duly received by the Agent or, in the case of
VP Systems Notes, the holders of the VP Systems Notes, as the case
may be, on or prior to such due date, it means the date on which,
the full amount of such moneys having been so received, notice to
that effect is duly given to the Noteholders in accordance with
Condition 14.
8.2 Taxation provisions applicable to VP Systems Notes
All payments of principal and interest in respect of the VP
Systems Notes by the Issuer will be made free and clear of, and
without withholding or deduction for or on account of any future or
present taxes, duties, assessments or governmental charges of
whatever nature imposed or levied by or on behalf of any Tax
Jurisdiction unless such withholding or deduction is required by
law. In such event the Issuer will pay such additional amounts as
shall be necessary in order that the net amounts received by the
holders of VP Systems Notes after such withholding or deduction
shall equal the respective amounts of principal and interest which
would otherwise have been receivable in respect of the VP Systems
Notes in the absence of such withholding or deduction, except that
no such additional amounts shall be payable with respect to any VP
Systems Note:
(a) presented for payment in The Kingdom of Denmark; and/or
(b) presented for payment to, or to a third party on behalf of,
a holder of which is liable for such taxes, or duties, assessments
or governmental charges in respect of such VP Systems Note by
reason of his having some connection with a Tax Jurisdiction other
than the mere holding of such VP Systems Note; and/or
(c) presented for payment more than thirty (30) days after the
Relevant Date (as defined below) except to the extent that the
holder thereof would have been entitled to an additional amount on
presenting the same for payment on such thirtieth day assuming that
day to have been a Payment Day (as defined in Condition 6.6);
and/or
(d) where such withholding or deduction is imposed on a payment
to an individual and is required to be made pursuant to European
Council Directive 2003/48/EC on the taxation of savings income in
the form of interest payments or any law implementing or complying
with, or introduced in order to conform to, such Directive;
and/or
(e) presented for payment by or on behalf of a holder who would
have been able to avoid such withholding or deduction by presenting
the relevant VP Systems Note to another Paying Agent in a Member
State of the European Union.
As used herein:
(i) "Tax Jurisdiction" means The Kingdom of Denmark or any
political subdivision or any authority thereof or therein having
power to tax; and
(ii) the "Relevant Date" means the date on which such payment
first becomes due, except that, if the full amount of the moneys
payable has not been duly received by the Agent or, in the case of
VP Systems Notes, the holders of the VP Systems Notes, as the case
may be, on or prior to such due date, it means the date on which,
the full amount of such moneys having been so received, notice to
that effect is duly given to the Noteholders in accordance with
Condition 14.
9. PRESCRIPTION
The Bearer Notes, Receipts and Coupons shall become void unless
claims in respect of principal and/or interest are made within a
period of 10 years (in the case of principal) and five years (in
the case of interest) after the Relevant Date (as defined in
Condition 8) therefor.
There shall not be included in any Coupon sheet issued on
exchange of a Talon any Coupon the claim for payment in respect of
which would be void pursuant to this Condition or Condition 6.2 or
any Talon which would be void pursuant to Condition 6.2.
In the case of VP Systems Notes, claims against the Issuer for
the payment of principal and/or interest payable in respect of the
VP Systems Notes shall become void unless made within a period of
10 years (in the case of principal) and three years (in the case of
interest) after the Relevant Date therefor and thereafter any
principal and/or interest in respect of such VP Systems Notes shall
be forfeited and revert to the Issuer.
10. EVENTS OF DEFAULT
10.1 Events of Default relating to Senior Notes
This Condition 10.1 only applies to Senior Notes. If any one or
more of the following events (each an "Event of Default") shall
occur and be continuing:
(a) if default is made in the payment of any principal or
interest due in respect of the Notes or any of them and the default
continues for a period of three Banking Days; or
(b) if the Issuer fails to perform or observe any of its other
obligations under the Conditions and (except in any case where the
failure is incapable of remedy when no such continuation or notice
as is hereinafter mentioned will be required) the failure continues
for the period of 14 days next following the service by a
Noteholder on the Issuer of a notice requiring the same to be
remedied; or
(c) if (i) any Indebtedness for Borrowed Money (as defined
below) of the Issuer or any of its Principal Subsidiaries becomes
due and repayable prematurely by reason of an event of default
(however described); (ii) the Issuer or any of its Principal
Subsidiaries fails to make any payment in respect of any
Indebtedness for Borrowed Money on the due date for payment; (iii)
any security given by the Issuer or any of its Principal
Subsidiaries for any Indebtedness for Borrowed Money becomes
enforceable; or (iv) default is made by the Issuer or any of its
Principal Subsidiaries in making any payment due under any
guarantee and/or indemnity given by it in relation to any
Indebtedness for Borrowed Money of any other person, provided that
no event described in this sub--paragraph 10.1.(c) shall constitute
an Event of Default unless the relevant amount of Indebtedness for
Borrowed Money or other relative liability due and unpaid, either
alone or when aggregated (without duplication) with other amounts
of Indebtedness for Borrowed Money and/or other liabilities due and
unpaid relative to all (if any) other events specified in (i) to
(iv) above which have occurred and are continuing, amounts to at
least EUR15,000,000 (or its equivalent in any other currency);
or
(d) if any order is made by any competent court or resolution
passed for the winding up or dissolution of the Issuer or any of
its Principal Subsidiaries, save for the purposes of reorganisation
on terms previously approved by an Extraordinary Resolution (as
defined in the Agency Agreement or the VP Issuing Agency Agreement,
as applicable); or
(e) if the Issuer or any of its Principal Subsidiaries ceases or
threatens to cease to carry on the whole or substantially all of
its business, save for the purposes of reorganisation on terms
previously approved by an Extraordinary Resolution (as defined in
the Agency Agreement or the VP Issuing Agency Agreement, as
applicable), or the Issuer or any of its Principal Subsidiaries
stops or threatens to stop payment of, or is unable to, or admits
inability to, pay, its debts (or any class of its debts) as they
fall due, or is deemed unable to pay its debts pursuant to or for
the purposes of any applicable law, or is adjudicated or found
bankrupt or insolvent; or
(f) if (A) proceedings are initiated against the Issuer or any
of its Principal Subsidiaries under any applicable liquidation,
insolvency, composition, reorganisation or other similar laws, or
an application is made (or documents filed with a court) for the
appointment of an administrative or other receiver, manager,
administrator or other similar official, or an administrative or
other receiver, manager, administrator or other similar official is
appointed, in relation to the Issuer or any of its Principal
Subsidiaries or, as the case may be, in relation to the whole or a
substantial part of the undertaking or assets of any of them, or an
encumbrancer takes possession of the whole or a substantial part of
the undertaking or assets of any of them, or a distress, execution,
attachment, sequestration or other process is levied, enforced
upon, sued out or put in force against the whole or a substantial
part of the undertaking or assets of any of them and (B) in any
case (other than the appointment of an administrator) is not
discharged within 14 days; or
(g) if the Issuer or any of its Principal Subsidiaries initiates
or consents to judicial proceedings relating to itself under any
applicable liquidation, insolvency, composition, reorganisation or
other similar laws (including the obtaining of a moratorium) or
makes a conveyance or assignment for the benefit of, or enters into
any composition or other arrangement with, its creditors generally
(or any class of its creditors) or any meeting is convened to
consider a proposal for an arrangement or composition with its
creditors generally (or any class of its creditors),
then any holder of a Note may, by written notice to the Issuer
at the specified office of the Agent (in the case of Bearer Notes)
or the VP Issuing Agent (in the case of VP Systems Notes),
effective upon the date of receipt thereof by the Agent (in the
case of Bearer Notes) or the VP Issuing Agent (in the case of VP
Systems Notes), declare any Note held by it to be forthwith due and
payable whereupon the same shall become forthwith due and payable
at its Early Redemption Amount, together with accrued interest (if
any) to the date of repayment, without presentment, demand, protest
or other notice of any kind.
10.2 Events of Default relating to Subordinated Notes
This Condition 10.2 only applies to Subordinated Notes:
(a) Any one or more of the following events shall constitute an "Event of Default":
(i) There is a failure to make payment of any principal or any
interest in respect of the Notes within three Banking Days of the
relevant due date; or
(ii) an order is made or an effective resolution is passed for
the bankruptcy or liquidation of the Issuer.
(b)
(i) If an Event of Default shall have occurred and be
continuing, any Noteholder may, at its discretion and without
further notice, institute such proceedings against the Issuer as it
may think fit (other than filing a petition for bankruptcy) to
enforce its rights provided that the Issuer shall not by virtue of
the institution of any such proceedings be obliged to pay any sum
or sums sooner than the same would otherwise have been payable,
except as set forth in (ii) below.
(ii) If an order is made or an effective resolution is passed
for the bankruptcy or liquidation of the Issuer, then all the
Subordinated Notes shall become immediately due and payable at the
request of any Noteholder at their then outstanding principal
amount together with interest accrued to such date.
10.3 Definitions
For the purposes of the Conditions:
"Principal Subsidiary" means at any time a Subsidiary of the
Issuer:
(a) whose gross revenues (consolidated in the case of a
Subsidiary which itself has Subsidiaries) or whose total assets
(consolidated in the case of a Subsidiary which itself has
Subsidiaries) represent in each case (or, in the case of a
Subsidiary acquired after the end of the financial period to which
the then latest audited consolidated accounts of the Issuer and its
Subsidiaries relate, are equal to) not less than five per cent. of
the consolidated gross revenues of the Issuer, or, as the case may
be, consolidated total assets, of the Issuer and its Subsidiaries
taken as a whole, all as calculated respectively by reference to
the then latest audited accounts (consolidated or, as the case may
be, unconsolidated) of such Subsidiary and the then latest audited
consolidated accounts of the Issuer and its Subsidiaries, provided
that in the case of a Subsidiary of the Issuer acquired after the
end of the financial period to which the then latest audited
consolidated accounts of the Issuer and its Subsidiaries relate,
the reference to the then latest audited consolidated accounts of
the Issuer and its Subsidiaries for the purposes of the calculation
above shall, until consolidated accounts for the financial period
in which the acquisition is made have been prepared and audited as
aforesaid, be deemed to be a reference to such first--mentioned
accounts as if such Subsidiary had been shown in such accounts by
reference to its then latest relevant audited accounts, adjusted as
deemed appropriate by the Issuer;
(b) to which is transferred the whole or substantially the whole
of the undertaking and assets of a Subsidiary of the Issuer which
immediately prior to such transfer is a Principal Subsidiary,
provided that the transferor Subsidiary shall upon such transfer
forthwith cease to be a Principal Subsidiary and the transferee
Subsidiary shall cease to be a Principal Subsidiary pursuant to
this subparagraph (b) on the date on which the consolidated
accounts of the Issuer and its Subsidiaries for the financial
period current at the date of such transfer have been prepared and
audited as aforesaid but so that such transferor Subsidiary or such
transferee Subsidiary may be a Principal Subsidiary on or
(c) at any time after the date on which such consolidated
accounts have been prepared and audited as aforesaid by virtue of
the provisions of subparagraph (a) above or, prior to or after such
date, by virtue of any other applicable provision of this
definition; or
(d) to which is transferred an undertaking or assets which,
taken together with the undertaking or assets of the transferee
Subsidiary, generated (or, in the case of the transferee Subsidiary
being acquired after the end of the financial period to which the
then latest audited consolidated accounts of the Issuer and its
Subsidiaries relate, generate gross revenues equal to) not less
than five per cent. of the consolidated gross revenues of the
Issuer, or represent (or, in the case aforesaid, are equal to) not
less than five per cent. of the consolidated total assets of the
Issuer and its Subsidiaries taken as a whole, all as calculated as
referred to in subparagraph (a) above, provided that the transferor
Subsidiary (if a Principal Subsidiary) shall upon such transfer
forthwith cease to be a Principal Subsidiary unless immediately
following such transfer its undertaking and assets generate (or, in
the case aforesaid, generate gross revenues equal to) not less than
five per cent. of the consolidated gross revenues of the Issuer, or
its assets represent (or, in the case aforesaid, are equal to) not
less than five per cent. of the consolidated total assets of the
Issuer and its Subsidiaries taken as a whole, all as calculated as
referred to in subparagraph (a) above, and the transferee
Subsidiary shall cease to be a Principal Subsidiary pursuant to
this subparagraph (c) on the date on which the consolidated
accounts of the Issuer and its Subsidiaries for the financial
period current at the date of such transfer have been prepared and
audited but so that
such transferor Subsidiary or such transferee Subsidiary may be
a Principal Subsidiary on or at any time after the date on which
such consolidated accounts have been prepared and audited as
aforesaid by virtue of the provisions of subparagraph (a) above or,
prior to or after such date, by virtue of any other applicable
provision of this definition,
(e) all as more particularly defined in the Agency Agreement.
A report by two Directors of the Issuer that in their opinion a
Subsidiary of the Issuer is or is not or was or was not at any
particular time or throughout any specified period a Principal
Subsidiary shall, in the absence of manifest error, be conclusive
and binding on all parties.
"Banking Day" means a day a day which is both:
(a) a day on which commercial banks and foreign exchange markets
settle payments and are open for general business (including
dealing in foreign exchange and foreign currency deposits) in
Copenhagen; and
(b) either (i) in relation to any sum payable in a Specified
Currency other than euro, a day on which commercial banks and
foreign exchange markets settle payments and are open for general
business (including dealing in foreign exchange and foreign
currency deposits) in the principal financial centre of the country
of the relevant Specified Currency (which if the Specified Currency
is Australian dollars or New Zealand dollars shall be Sydney or
Auckland, respectively) or (ii) in relation to any sum payable in
euro, a day on which the TARGET2 System is open.
"Indebtedness for Borrowed Money" means any indebtedness
(whether being principal, premium, interest or other amounts) for
or in respect of any notes, bonds, debentures, debenture stock,
loan stock or other securities or any borrowed money or any
liability under or in respect of any acceptance or acceptance
credit.
"Subsidiary" has the meaning given to that term in Section 5(3)
of Consolidated Act No. 1089 of 14 September 2015 on public and
private limited liability companies of the Kingdom of Denmark, as
amended from time to time.
11. REPLACEMENT OF NOTES, RECEIPTS, COUPONS AND TALONS
Should any Note, Receipt, Coupon or Talon be lost, stolen,
mutilated, defaced or destroyed, it may be replaced at the
specified office of the Agent upon payment by the claimant of such
costs and expenses as may be incurred in connection therewith and
on such terms as to evidence and indemnity as the Issuer may
reasonably require. Mutilated or defaced Notes, Receipts, Coupons
or Talons must be surrendered before replacements will be
issued.
12. PAYING AGENTS
12.1 Bearer Notes
The following shall only apply to Bearer Notes:
The names of the initial Paying Agents and their initial
specified offices are set out below.
The Issuer is entitled to vary or terminate the appointment of
any Paying Agent and/or appoint additional or other Paying Agents
and/or approve any change in the specified office through which any
Paying Agent acts, provided that:
(a) there will at all times be an Agent;
(b) so long as the Notes are listed on any stock exchange or
admitted to listing by any other relevant authority, there will at
all times be a Paying Agent with a specified office in such place
as may be required by the rules and regulations of the relevant
stock exchange or other relevant authority;
(c) there will at all times be a Paying Agent in a Member State
of the European Union that will not be obliged to withhold or
deduct tax pursuant to European Council Directive 2003/48/EC or any
law implementing or complying with, or introduced in order to
conform to, such Directive; and
(d) there will at all times be a Paying Agent in a jurisdiction
within continental Europe, other than the jurisdiction in which the
Issuer is incorporated.
In addition, the Issuer shall forthwith appoint a Paying Agent
having a specified office in New York City in the circumstances
described in Condition 6.5. Any variation, termination, appointment
or change shall only take effect (other than in the case of
insolvency, when it shall be of immediate effect) after not less
than 30 nor more than 45 days' prior notice thereof shall have been
given to the Noteholders in accordance with Condition 14.
In acting under the Agency Agreement, the Paying Agents act
solely as agents of the Issuer and do not assume any obligation to,
or relationship of agency or trust with, any Noteholders or
Couponholders. The Agency Agreement contains provisions permitting
any entity into which any Paying Agent is merged or converted or
with which it is consolidated or to which it transfers all or
substantially all of its assets to become the successor paying
agent.
12.2 VP Systems Notes
The following shall only apply to VP Systems Notes:
In relation to VP Systems Notes, the Issuer will, in accordance
with the rules and procedures applicable to and/or issued by VP (in
the case of VP Notes) or VP Lux (in the case of VP Lux Notes) from
time to time, appoint (i) VP as the central securities depositary
in the case of VP Notes, (ii) VP Lux as the central securities
depositary in the case of VP Lux Notes, and (ii) a VP Issuing
Agent. The VP Issuing Agent will be specified in the relevant Final
Terms.
The Issuer is entitled to vary or terminate the appointment of
VP, VP Lux or the VP Issuing Agent, as the case may be, provided
that the Issuer will appoint another central securities depositary
or issuing agent, and in respect of the appointment of another VP
Issuing Agent in accordance with the rules and procedures
applicable to and/or issued by the VP (in the case of VP Notes) or
the VP Lux (in the case of VP Lux Notes) from time to time. The
central securities depository and the VP Issuing Agent act solely
as agents of the Issuer and do not assume any obligation to, or
relationship of agency or trust with, any Noteholders. Any
variation, termination, appointment or change shall only take
effect (other than in the case of insolvency, when it shall be of
immediate effect) after not less than 30 nor more than 45 days'
prior notice thereof shall have been given to the Noteholders in
accordance with Condition 14.
13. EXCHANGE OF TALONS
On and after the Interest Payment Date on which the final Coupon
comprised in any Coupon sheet matures, the Talon (if any) forming
part of such Coupon sheet may be surrendered at the specified
office of the Agent or any other Paying Agent in exchange for a
further Coupon sheet including (if such further Coupon sheet does
not include Coupons to (and including) the final date for the
payment of interest due in respect of the Note to which it
appertains) a further Talon, subject to the provisions of Condition
9.
14. NOTICES
All notices regarding the Notes will be deemed to be validly
given if published in a leading English language daily newspaper of
general circulation in London. It is expected that any such
publication in a newspaper will be made in the Financial Times in
London. The Issuer shall also ensure that notices are duly
published in a manner which complies with the rules of any stock
exchange or other relevant authority on which the Notes are for the
time being listed or by which they have been admitted to trading.
Any such notice will be deemed to have been given on the date of
the first publication or, where required to be published in more
than one newspaper, on the date of the first publication in all
required newspapers.
Until such time as any definitive Notes are issued, there may,
so long as any Global Notes representing the Notes are held in
their entirety on behalf of Euroclear and/or Clearstream,
Luxembourg, be substituted for such publication in such
newspaper(s) the delivery of the relevant notice to Euroclear
and/or Clearstream, Luxembourg for communication by them to the
holders of the Notes and, in addition, for so long as any Notes are
listed on a stock exchange or are admitted to trading by another
relevant authority and the rules of that stock exchange or relevant
authority so require, such notice will be published in a daily
newspaper of general circulation in the place or places required by
those rules. Any such notice shall be deemed to have been given to
the holders of the Notes on the second day after the day on which
the said notice was given to Euroclear and/or Clearstream,
Luxembourg.
Notwithstanding the above, all notices to holders of VP Systems
Notes will be valid if given (i) in accordance with the procedures
of the VP (in the case of VP Notes) or VP Lux (in the case of VP
Lux Notes) and (ii) in a manner which complies with the rules of
any stock exchange or other relevant authority on which the
relevant VP Systems Notes are for the time being listed or by which
they have been admitted to trading (and will be deemed to have been
given to the holders of VP Systems Notes on the second day after
the day on which the said notice was given in such manner.
Notices to be given by any Noteholder in respect of Bearer Notes
shall be in writing and given by lodging the same, together (in the
case of any Note in definitive form) with the relative Note or
Notes, with the Agent. Whilst any of the Notes are represented by a
Global Note, such notice may be given by any holder of a Note to
the Agent through Euroclear and/or Clearstream, Luxembourg, as the
case may be, in such manner as the Agent and Euroclear and/or
Clearstream, Luxembourg, as the case may be, may approve for this
purpose.
Notices to be given by any holder of VP Systems Notes shall be
in writing and given by lodging the same with the VP Issuing
Agent.
15. MEETINGS OF NOTEHOLDERS AND MODIFICATION
15.1 Holders of Bearer Notes
The Agency Agreement contains provisions for convening meetings
of the Noteholders to consider any matter affecting their
interests, including the sanctioning by Extraordinary Resolution of
a modification of the Notes, the Receipts, the Coupons or any of
the provisions of the Agency Agreement. Such a meeting may be
convened by the Issuer and shall be convened by the Issuer if
required in writing by Noteholders holding not less than five per
cent. in nominal amount of the Notes for the time being remaining
outstanding. The quorum at any such meeting for passing an
Extraordinary Resolution is one or more persons holding or
representing not less than 50 per cent. in nominal amount of the
Notes for the time being outstanding, or at any adjourned meeting
one or more persons being or representing Noteholders whatever the
nominal amount of the Notes so held or represented, except that at
any meeting the business of which includes the modification of
certain provisions of the Notes, the Receipts or the Coupons
(including modifying the date of maturity of the Notes or any date
for payment of interest thereon, reducing or cancelling the amount
of principal or the rate of interest payable in respect of the
Notes or altering the currency of payment of the Notes, the
Receipts or the Coupons), the quorum shall be one or more persons
holding or representing not less than two--thirds in nominal amount
of the Notes for the time being outstanding, or at any adjourned
such meeting one or more persons holding or representing not less
than one--third in nominal amount of the Notes for the time being
outstanding. An Extraordinary Resolution passed at any meeting of
the Noteholders shall be binding on all the Noteholders, whether or
not they are present at the meeting, and on all Receiptholders and
Couponholders.
The Agent and the Issuer may agree, without the consent of the
Noteholders, Receiptholders or Couponholders, to:
(a) any modification (except such modification in respect of
which an increased quorum is required as mentioned above) of the
Notes, the Receipts, the Coupons or the Agency Agreement which is
not prejudicial to the interests of the Noteholders; or
(b) any modification of the Notes, the Receipts, the Coupons or
the Agency Agreement which is of a formal, minor or technical
nature or is made to correct a manifest error or to comply with
mandatory provisions of the law.
Any such modification shall be binding on the Noteholders, the
Receiptholders and the Couponholders and any such modification
shall be notified to the Noteholders in accordance with Condition
14 as soon as practicable thereafter.
15.2 Holders of VP Systems Notes
The VP Issuing Agency Agreement will contain provisions for
convening meetings of the holders of VP Systems Notes to consider
any matter affecting their interests, including sanctioning by a
majority of votes (as more fully set out in the VP Issuing Agency
Agreement) a modification of the VP Systems Notes or any of the
provisions of the VP Issuing Agency Agreement (or, in certain
cases, sanctioning by a majority of two thirds of votes). Such a
meeting may be convened by the Issuer, the VP Issuing Agent or the
holders of VP Systems Notes holding not less than 10 per cent. of
the Voting VP Systems Notes. For the purpose of this Condition,
"Voting VP Systems Notes" means the aggregate nominal amount of the
total number of VP Systems Notes not redeemed or otherwise
deregistered in the VP (in the case of VP Notes) or the VP Lux (in
the case of VP Lux Notes), less the VP Systems Notes owned by the
Issuer, any party who has decisive influence over the Issuer or any
party over whom the Issuer has decisive influence.
The quorum at a meeting for passing a resolution is one or more
persons holding at least one half of the Voting VP Systems Notes or
at any adjourned meeting one or more persons being or representing
holders of Voting VP Systems Notes whatever the nominal amount of
the VP Systems Notes so held or represented, except that at any
meeting the business of which includes the modification of certain
provisions of the VP Systems Notes, the VP Issuing Agency Agreement
(including modifying the date of maturity of the VP Systems Notes
or any date for payment of interest thereof, reducing or cancelling
the amount of principal or the rate of interest payable in respect
of the VP Systems Notes or altering the currency of payment of the
VP Systems Notes), the quorum shall be one or more persons holding
or representing not less than two--thirds in aggregate nominal
amount of the Voting VP Systems Notes for the time being
outstanding, or at any adjourned such meeting one or more persons
holding or representing not less than one--third in aggregate
nominal amount of the Voting VP Systems Notes. A resolution passed
at any meeting of the holders of VP Systems Notes shall be binding
on all the holders of VP Systems Notes, whether or not they are
present at such meeting.
16. FURTHER ISSUES
The Issuer shall be at liberty from time to time without the
consent of the Noteholders or the Couponholders to create and issue
further notes having terms and conditions the same as the Notes or
the same in all respects save for the amount and date of the first
payment of interest thereon and so that the same shall be
consolidated and form a single Series with the outstanding
Notes.
17. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No person shall have any right to enforce any term or condition
of this Note under the Contracts (Rights of Third Parties) Act
1999, but this does not affect any right or remedy of any person
which exists or is available apart from that Act.
18. GOVERNING LAW AND SUBMISSION TO JURISDICTION
18.1 Governing law
The Agency Agreement, the Deed of Covenant, the VP Issuing
Agency Agreement (if applicable), the Notes, the Receipts and the
Coupons and any non--contractual obligations arising out of or in
connection with the Agency Agreement, the Deed of Covenant, the VP
Issuing Agency Agreement (if applicable), the Notes, the Receipts
and the Coupons shall be governed by, and shall be construed in
accordance with, English law, save for (a) the provisions of
Conditions 1.2, 2.2 and 10.2 and, in the case of the registration
and dematerialisation of VP Notes in the VP and the
dematerialisation of VP Lux Notes which are governed by, and shall
be construed in accordance with, the laws of the Kingdom of
Denmark, and (b) the registration of VP Lux Notes in the VP Lux
which is governed by, and shall be construed in accordance with,
Luxembourg law.
Notwithstanding that, under the Securities Trading Act, the VP
Registration Order and the rules and procedures applicable to
and/or issued by the VP (together the "Danish Remedies"), and under
relevant Luxembourg law and the rules and procedures applicable to
and/or issued by the VP Lux (together the "Luxembourg Remedies"),
holders of VP Systems Notes may have remedies against the Issuer
for non--payment or non--performance under the Conditions
applicable to such VP Systems Notes, a holder of a VP Systems Note
must exhaust all available remedies under English law for
non--payment or non--performance before any proceedings may be
brought against the Issuer in Denmark in respect of the Danish
Remedies or in Luxembourg in respect of the Luxembourg Remedies.
Notwithstanding the above, and in this limited respect only, a
holder of a VP Systems Note may not therefore take concurrent
actions in England, Denmark or Luxembourg, as applicable.
18.2 Submission to jurisdiction
The Issuer irrevocably agrees, for the benefit of the
Noteholders, the Receiptholders and the Couponholders, that the
courts of England are to have exclusive jurisdiction to settle any
disputes which may arise out of or in connection with the Notes the
Receipts and/or the Coupons (including a dispute relating to any
non--contractual obligations arising out of or in connection with
the Notes, the Receipts and the Coupons) and accordingly submits to
the exclusive jurisdiction of the English courts.
The Issuer waives any objection to the courts of England on the
grounds that they are an inconvenient or inappropriate forum. The
Noteholders, the Receiptholders and the Couponholders may take any
suit, action or proceedings (together referred to as "Proceedings")
arising out of or in connection with the Notes, the Receipts and
the Coupons (including any Proceedings relating to any
non--contractual obligations arising out of or in connection with
the Notes, the Receipts and the Coupons) against the Issuer in any
other court of competent jurisdiction and concurrent Proceedings in
any number of jurisdictions.
18.3 Appointment of Process Agent
The Issuer appoints Law Debenture Corporate Services Limited at
its registered office at Fifth Floor, 100 Wood Street, London EC2V
7EC as its agent for service of process, and undertakes that, in
the event of Law Debenture Corporate Services Limited ceasing so to
act or ceasing to be registered in England, it will appoint another
person as its agent for service of process in England in respect of
any Proceedings. Nothing herein shall affect the right to serve
proceedings in any other manner permitted by law.
18.4 Other documents
The Issuer has in the Agency Agreement and the Deed of Covenant
submitted to, and will in the VP Issuing Agency Agreement submit
to, the jurisdiction of the English courts and appointed (or will
appoint, as applicable) an agent for service of process in terms
substantially similar to those set out above.
19. RECOGNITION OF THE DANISH BAIL-IN POWER
19.1 Agreement and Acknowledgement
Notwithstanding and to the exclusion of any other term of the
Notes or any other agreements, arrangements, or understandings
between the Issuer and any Noteholder, by its acquisition of the
Notes, each Noteholder (which, for the purposes of this Condition
[19], includes each holder of a beneficial interest in the Notes)
acknowledges and accepts that the Amounts Due arising under the
Notes may be subject to the exercise of the Danish Bail-in Power by
the Resolution Authority and acknowledges, accepts, consents to and
agrees to be bound by:
(a) the exercise and effect of the Danish Bail-in Power by the
Resolution Authority (which may be imposed without any prior notice
to the Noteholders), which, without limitation, may include and
result in any of the following, or some combination thereof:
(i) the reduction or cancellation of all, or a portion, of the Amounts Due;
(ii) the conversion of all, or a portion, of the Amounts Due
into shares, other securities or other obligations of the Issuer or
another person (and the issue to or conferral on the Noteholder of
such shares, securities or obligations), including by means of an
amendment, modification or variation of the terms of the Notes;
(iii) the cancellation of the Notes; and
(iv) the amendment or alteration of the maturity of the Notes or
amendment of the amount of interest payable on the Notes, or the
date on which the interest becomes payable, including by suspending
payment for a temporary period; and
(b) the variation of the terms of the Notes, as deemed necessary
by the Resolution Authority, to give effect to the exercise of the
Danish Bail-in Power by the Resolution Authority.
The exercise of the Danish Bail-Power by the Resolution
Authority pursuant to any relevant laws, regulations, rules or
requirements in effect in Denmark is not dependant on the
application of this Condition [19].
19.2 Payment of Interest and Other Outstanding Amounts Due
No repayment or payment of Amounts Due will become due and
payable or be paid after the exercise of any Danish Bail-in Power
by the Resolution Authority if and to the extent such amounts have
been reduced, converted, cancelled, amended or altered as a result
of such exercise.
19.3 No Event of Default
Neither a reduction or cancellation, in part or in full, of the
Amounts Due nor the conversion thereof into another security or
obligation of the Issuer or another person, as a result of the
exercise of the Danish Bail-in Power by the Resolution Authority
with respect to the Issuer and/or the Notes will be an Event of
Default.
19.4 Notice to Noteholders
Upon the exercise of the Danish Bail-in Power by the Resolution
Authority with respect to the Issuer and/or the Notes, the Issuer
will give notice to the Noteholders in accordance with Condition 14
as soon as practicable regarding such exercise of the Danish
Bail-in Power. The Issuer will also deliver a copy of such notice
to the Agent for information purposes.
19.5 Definitions
For the purposes of the Conditions:
"Amounts Due" means the principal amount of, or outstanding
amount due under, the Notes, together with any accrued but unpaid
interest due on the Notes. References to such amount will include
amounts that have become due and payable, but which have not been
paid, prior to the exercise of the Danish Bail-in Power by the
Resolution Authority.
"Bail-In Legislation" means the Danish Recovery and Resolution
Act, Consolidated Act no. 333 of 31 March 2015, as amended and the
Danish Financial Business Act, Consolidated Act no. 174 of 31
January 2017 and any executive order or guidance rules issued
pursuant thereto.]
"Danish Bail-in Power" means any write-down, conversion,
transfer, modification or suspension power existing from time to
time under, and exercised in compliance with, any law or regulation
in effect in Denmark, relating to the transposition of Directive
2014/59/EU establishing a framework for the recovery and resolution
of credit institutions and investment firms, as amended, including
but not limited to the Bail-In Legislation and the instruments,
rules and standards created thereunder, pursuant to which any
obligation of a bank or investment firm or affiliate of a bank or
investment firm can be reduced, cancelled, modified or converted
into shares, other securities or other obligations of such entity
or any other person (or suspended for a temporary period) by the
Resolution Authority.
"Resolution Authority" means the Finansiel Stabilitet or any
other authority with the ability to exercise the Danish Bail-in
Power.
Use of Proceeds
The net proceeds from each issue of Notes will be applied by the
Issuer for its general corporate purposes, which include making a
profit.
Description of the Issuer
Introduction
Ringkjøbing Landbobank Aktieselskab (the "Issuer") is a regional
full-service bank with approximately 67,300 customers and a total
balance sheet of DKK 24.3 billion as at 31 December 2016. In 2016
the Issuer the average number of full-time employees of the Issuer
was 271. The Issuer's head office is located in Ringkøbing and at
the end of 2015 the Issuer had 6 branches in Central and West
Jutland and five private banking branches with one at the head
office in Ringkøbing, one located in Herning in Central Jutland,
one located in Aarhus and one in Vejle - both in Eastern Jutland
and one located in Holte near Copenhagen. The Issuer enjoys a
strong position in Central and West Jutland and a very high degree
of customer loyalty. In addition to traditional banking, the Issuer
has developed a department for long distance customers (Da.
"Fjernkundeafdelingen") which, based on clear business concepts,
provides services to selected customer groups throughout Denmark
from the head office in Ringkøbing.
The area of approximately 30 kilometres around Ringkøbing
constitutes the old local market area of the Issuer. Within this
area the Issuer has a market share of approximately [50] per cent.
among private customers (market share for private customers
measured by customer addresses divided by total addresses in the
area allocated by zip codes. The area is defined as the zip codes
6880, 6940, 6950, 6960, 6971, 6973, 6980, 6990) where the oldest of
the branches are or were located, whilst the Issuer's market share
of bank loans is approximately 1 per cent. of the total bank loans
in Danish banks.
History
The Issuer was founded in 1886, and its hallmark has always been
stability and a sound footing in the culture of West Jutland.
Over the last few years, the Issuer's return on equity has been
among the best in Denmark and during both the Nordic bank crisis in
the late 1980s and early 1990s and the recent financial crisis the
Issuer has always achieved positive results.
In the period from the mid-1990s to 2006, the Issuer had a
growth-oriented strategy which resulted in several different
initiatives. In 1995, the Issuer established a department for long
distance customers, focusing on niche services such as wind turbine
financing, private banking and the financing of medical
practitioners' purchase of private practices.
In addition, the Issuer has opened branches in Central and West
Jutland over the years in Herning (in 1995), Holstebro (in 1997)
and Viborg (in 2001). In 2004 the Issuer introduced a private
banking concept, and a private banking department was established
in Ringkøbing and a private banking branch was established in
Herning in connection with the concept. The concept proved
successful and was further strengthened in 2010 with the opening of
a private banking branch in Holte close to the Danish capital,
Copenhagen and in 2014 with the opening of a private banking branch
in Aarhus in Eastern Jutland - the second biggest city in Denmark.
In January 2016 the Issuer opened a private banking branch in Vejle
in Eastern Jutland.
In 2002 the Issuer merged with Tarm Bank, in 2004 the Issuer
bought out the activities in the small cooperative bank Sdr. Lem
Andelskasse and in 2015 it bought out the activities in the small
savings bank Ulfborg Sparekasse.
The present strategy of the Issuer is to realise healthy,
organic growth which shall be created through increasing the market
share in the areas surrounding the existing branches, through the
niches in which the Issuer has specialised, such as the department
for long distance customers and the private banking branches of the
Issuer.
Ownership
The Issuer is listed on Nasdaq Copenhagen and had approximately
registered 17,200 shareholders at the end of 2016. Two shareholders
- Parvus Asset Management Europe Limited, London, United Kingdom
and ATP, Hillerød, Denmark - have informed the Issuer that they
individually own more than 5 per cent. of the share capital of the
Issuer. According to the Articles of Association a shareholder with
a nominal holding of up to and including DKK 500 can cast 1 vote
and a shareholder with a holding of more than nominal DKK 500 is
eligible to cast 2 votes.
Business areas
The range of products the Issuer offers to its customers
includes all traditional banking products including pension scheme
products and mortgage credit loans, which are offered through
cooperation with the mortgage companies Totalkredit, DLR Kredit and
BRFkredit.
Furthermore, the Issuer offers banking products to customers
within selected niche areas where the Issuer maintains specialist
knowledge and competencies. The selected niche areas include
private banking, the financing of medical practitioners' and
dentists' purchase of private practices, financing of renewable
energy, including wind turbines, and selected whole sale loans.
Geographical location
The map below sets out an overview of the Issuer's loans and
guarantee portfolio by customer location as a percentage of total
bank loans and guarantee portfolio (end December 2016).
As will be evident from the map above there is a geographic
diversification of the Issuer's loans and guarantee portfolio but
the Issuer still has a certain operational concentration in West
Jutland. Around 40 per cent. of the Issuer's total loans and
guarantees are placed in Central and West Jutland where the
physical branches are located.
Management
As of the end of 2016 the Issuer's Board of Directors consisted
of nine members and the shareholders of the Issuer had elected 265
representatives to a Shareholders' Committee. This Committee has
elected four members to the Board of Directors and staff in the
Issuer have elected three representatives. The Articles of
Association of the Issuer determines that the size of the
Shareholders' Committee shall be jointly determined by the
Shareholders' Committee and the Board of Directors and have a
minimum of 25 and a maximum of 30 members. Furthermore, the
Articles of Association determines that the Board of Directors
shall consist of at least four and at most six members who shall be
elected by the members of the Shareholders' Committee. The Board of
Directors shall also include the number of staff members as
prescribed by law.
There are no conflicts of interest between any duties of the
Issuer's Board of Directors or the Issuer's General Management and
their private interests or other duties.
The Board of Directors comprises of the following persons:
Elected by the Shareholders' Committee:
Jens Lykke Kjeldsen, Ringkøbing
Timber merchant
Chairman of the board of directors
Business address:
Enghavevej 17
DK-6950 Ringkøbing
Denmark
Other managerial activities - member of the management of:
A/S Henry Kjeldsen
A/S Miljøpark Vest
Aktieselskabet af 1 August 1989
Asta og Henry Kjeldesens Familiefond
Henry Kjeldsen, Ringkøbing Tømmerhandel A/S
Høgildgaard Plantage A/S
Pensionstilskudsfonden for medarbejdere i Ringkjøbing
Landbobank
VT Hallen A/S
Martin Krogh Pedersen, Ringkøbing
CEO
Deputy chairman of the board of directors
Business address:
Birkevej 2
DK-6971 Spjald
Denmark
Other managerial activities - member of the management of:
A/S Maskinfabrikken PCP
Ejendomsselskabet Ringkøbing ApS
KP Group ApS
KP Group Holding ApS
K. P. Components Inc.
K. P. Holding A/S
K. P. Komponenter A/S
MHKP Holding ApS
MHKPO ApS
MHKPS ApS
PF Group A/S
Jon Steingrim Johnsen, Humlebæk
COO
Business address:
Sundkrogsgade 4
DK-2100 København Ø
Denmark
Other managerial activities - member of the management of:
Letpension A/S
Mølholm Forsikring A/S
PFA Holding A/S
PFA Kapitalforening
PFA Pension, Forsikringsaktieselskab
PFA Soraarneq, Forsikringsaktieselskab
Jens Møller Nielsen, Ringkøbing
General manager
Business address:
Herningvej 3
DK-6950 Ringkøbing
Denmark
Other managerial activities - member of the management of:
Byggeri & Teknik I/S
SvineRådgivning I/S
Vestjysk Landboforening
VL Revision, registreret revisionsaktieselskab
Elected by the employees:
Bo Bennedsgaard, Holstebro
IT consultant
Business address:
Torvet 1
DK-6950 Ringkøbing
Denmark
Other managerial activities - member of the management of:
Pensionstilskudsfonden for medarbejdere i Ringkjøbing
Landbobank
Dan Astrup Sørensen, Videbæk
Business customer manager
Business address:
Torvet 1
DK-6950 Ringkøbing
Denmark
Gitte Elisa Sigersmunda Høgholm Vigsø, Holstebro
MA (Laws) / administrative employee
Business address:
Torvet 1
DK-6950 Ringkøbing
Denmark
Other managerial activities - member of the management of:
Finansforbundet
The Board of Directors appoints the General Management, which
comprises:
John Bull Fisker, Ringkøbing
CEO
Member of the board of directors of:
Letpension A/S, Copenhagen (chairman)
Bankdata, Fredericia (deputy chairman)
BI Holding A/S, Copenhagen (deputy chairman)
BI Asset Management Fondsmæglerselskab A/S, Copenhagen (deputy
chairman)
PRAS A/S, Copenhagen
AUHE Midtvest's Støttefond, Herning
Pensionstilskudsfonden for medarbejdere i Ringkjøbing
Landbobank, Ringkøbing
Member of the customer board of:
PFA Pension A/S, Copenhagen
Jørn Nielsen, Ringkøbing
General manager
Objective
The Issuer has defined a number of objectives which are:
Full-service bank with a high level of competence: The Issuer
wants to be known as a competent full-service bank and a strong
niche player within private banking, covering high net worth
private customers and financing of securities, financing of medical
practitioners' and dentists' purchase of private practices,
financing of renewable energy, including wind turbines, and
selected wholesale loans. This involves a constant focus on the
development of employee competencies.
Performance: The Issuer's objective is to achieve operating
results among the best third, within the Danish financial sector.
The Issuer's strategy for achieving this is through rational bank
operations and a sound credit policy. The Issuer will focus on: 1)
retention and development of the customer portfolio which is
situated in Central and Western Jutland; and 2) serving and
development of selected customer groups throughout Denmark via the
Issuer's department for long distance customers and niche concepts
and the Issuer's Private Banking branches through delivering a high
level of expertise and competitive products.
Capital Structure: The Issuer intends to continue to run its
business on a solid capital base. The Board of Directors decided in
January 2014 that a long-term capital target of approximately 15
per cent. for the Issuer's Common Equity Tier 1 capital ratio is
sufficient and adequate for the Issuer. As at 31 December 2016, the
Issuer had a Common Equity Tier 1 capital ratio of 16.9 per cent.,
a Tier 1 capital ratio of 16.9 per cent. and a total capital ratio
of 18.3 per cent. More information about the capital structure etc.
can be found in the Annual Report for 2016 pages 13-14, 17-20, page
57 and pages 94-95.
Overview of financial performance
The tables below set out an analysis of the Issuer's profit and
loss account and certain key figures and ratios derived from its
financial statements for the years set out below.
The financial statements have been prepared in accordance with
the provisions of the Danish Financial Business Act and other
Danish requirements regarding information in the annual financial
statements of listed financial companies.
The figures for the whole years 2012 to 2016 are audited.
Profit and loss account
Years ended 31 December
Main figures for the Issuer (million DKK)
--------------------------------------------------------------------------------- ---------------------------------
2016 2015 2014 2013 2012
----- ----- ----- ----- -----
Total core income excl. trading income............................ 942 906 871 817 799
Trading income................................................................. 41 48 36 27 24
Total core income............................................................ 983 954 907 844 823
Total expenses and depreciations etc................................ 318 306 298 273 265
Core earnings before impairments for loans........................ 665 648 609 571 558
Impairment charges for loans and other receivables etc..... -48 -60 -87 -120 -157
Core earnings................................................................ 617 588 522 451 401
Result for the portfolio................................................. 44 0 +65 +23 +49
Expenses for bank packages......................................... 0 0 0 -2 -2
Profit before tax............................................................. 661 588 587 472 448
Net profit for the year................................................... 539 459 446 358 328
Selected balance sheet figures
As at 31 December
Selected balance sheet figures (million DKK)
------------------------------------------------------------------------- -------------------------------------------
2016 2015 2014 2013 2012
------- ------- ------- ------- -------
Shareholders'
equity............................................................. 3,555 3,296 3,099 2,901 2,676
Capital base(*1)
....................................................................... 3,355 3,275 2,779 2,979 2,980
Deposits...............................................................
............... 18,314 16,987 15,450 14,114 12,867
Loans..................................................................
................ 17,482 17,300 15,507 13,849 12,424
Balance sheet
total.............................................................. 24,258 22,317 21,238 19,583 17,682
Guarantees.............................................................
.............. 2,460 2,234 2,218 1,902 1,667
_______________
(1) Capital base is computed as the Issuers own funds after deductions.
Key figures for the Issuer
As at 31 December
Key figures for the Issuer(*1) (per cent.)
----------------------------------------------------------------------------------- ---------------------------------
2016 2015 2014 2013 2012
----- ----- ----- ----- -----
Pre-tax return on equity (per cent.)..................................... 19.3 18.4 19.6 16.9 17.4
Return on equity after tax (per cent.).................................. 15.8 14.3 14.9 12.8 12.7
Income/cost ratio................................................................ 2.81 2.60 2.52 2.19 2.06
Rate of costs (per cent.)(*2) ................................................... 32.3 32.1 32.8 32.4 32.2
Tier 1 capital ratio (per cent.)............................................. 16.9 17.1 17.5 19.2 20.9
Total capital ratio (per cent.).............................................. 18.3 18.8 17.5 20.0 22.4
_______________
(1) Key figures as defined by the Danish Financial Supervisory
Authority (the key figure "Rate of Costs" is not defined by the
Danish Financial Supervisory Authority).
(2) Defined as: Total costs and depreciations / Total core income.
The Issuer reduced its share capital once in each of 2012, 2013,
2014, 2015 and 2016. A further share capital reduction of 100,000
shares and a new share buy-back programme of up to a value of up to
DKK 170 million and a maximum of 170,000 shares was approved by the
annual general meeting on 22 February 2017.
The Board of Directors can increase the share capital by DKK
14,210,980 to DKK 37,060,980 in one or more increases until the 21
February 2022 (figures before the share capital reduction approved
by the general meeting on 22 February 2017).
Loan and guarantee portfolio
The table below sets out the Issuer's loans and guarantees by
sector and industry, as a percentage of the Issuer's total loans
and guarantees.
As at 31
December
(per cent)
--------------
2016 2015
------ ------
Public
authorities.........................................................................................
................. 0.2 0.1
Business
Agriculture, hunting and forestry
Cattle farming
etc................................................................................................
........... 1.2 1.5
Pig farming
etc................................................................................................
............... 1.6 1.5
Other agriculture, hunting and
forestry........................................................................... 3.9 3.9
Fishing.............................................................................................
.................................. 2.5 2.2
Mink
production..........................................................................................
...................... 1.0 1.0
Industry and raw material
extraction.................................................................................. 2.5 2.6
Energy
....................................................................................................
................................. 2.1 3.5
Wind turbines -
Denmark.............................................................................................
..... 3.7 6.0
Wind turbines -
foreign.............................................................................................
........ 10.0 11.9
Building and
construction........................................................................................
........... 2.2 1.8
Trade...............................................................................................
.................................. 3.4 3.6
Transport, hotels and
restaurants....................................................................................... 1.5 1.8
Information and
communication....................................................................................... 0.3 0.2
Financing and
insurance...........................................................................................
.......... 14.3 15.0
Real
property.............................................................................................
........................
First-priority without prior
creditors****..................................................................................... 4.3 4.2
Other
business............................................................................................
........................ 6.7 6.1
------ ------
Total
business............................................................................................
..................... 71.9 76.3
Private.............................................................................................
................................. 27.9 23.6
------ ------
Total...............................................................................................
.................................. 100.0 100.0
====== ======
The distribution by sector and industry is based on the sector
codes of Statistics Denmark (Da. "Danmarks Statistik").
* The comparative figures for 2015 are partly calculated on the
basis of an approximate computation principle compared with
2016.
** Loans with first mortgages on real property and construction
financing without prior creditors.
*** Other forms of real estate financing, including loans with
second mortgage on real property and a strong lessee with an
irrevocable lease.
Funding structure
The Issuer's principal source of funding is customer deposits
which accounted for 76 per cent. of the total funds (Balance Sheet
total) at 31 December 2016 and 76 per cent. at 31 December 2015.
Other sources of funding include equity, subordinated debt and
market funding (from credit institutions and central banks).
As at 31 December
Funding sources (million DKK)
---------------------------------------------------------------- -------------------------------------------
2016 2015 2014 2013 2012
------- ------- ------- ------- -------
Equity........................................................ 3,555 3,296 3,099 2,901 2,676
Subordinated debt................................... 371 373 366 371 383
Other liabilities etc................................ 263 226 176 192 217
Deposits and other debt.......................... 18,314 16,987 15,450 14,114 12,867
* on
demand............................................. 11,952 11,183 9,209 8,325 7,537
* up to 1
year........................................... 3,502 2,560 2,826 2,631 2,396
* more than 1 year and up to 5 years........ 1,192 967 948 1,502 1,415
* more than 5 years.................................. 1,668 2,277 2,467 1,656 1,519
Core funding............................................ 22,503 20,882 19,091 17,578 16,143
Credit institutions and central banks.. 1,458 1,502 1,911 1,755 1,198
* on
demand............................................. 281 268 258 298 214
* up to 1
year........................................... 162 227 555 453 200
* more than 1 year and up to 5 years........ 660 594 611 560 517
* more than 5 years.................................. 355 413 487 444 267
Issued bonds............................................. 297 0 236 250 341
- - - -
* on
demand............................................. -
* up to 1
year........................................... - - 236 4 225
* more than 1 year and up to 5 years........ 297 - - 246 116
- - - -
* more than 5 years.................................. -
Market funding........................................ 1,755 1,502 2,147 2,005 1,539
------- ------- ------- ------- -------
Total Funds (Balance Sheet total)......... 24,258 22,384 21,238 19,583 17,682
======= ======= ======= ======= =======
The funding structure by the end of December 2016 is shown in
the table below.
As at
31 December
2016
(per
Distribution of funding cent.)
------------------------------------------------------------------------------------------------------- -------------
Capital base (equity and subordinated
debt)............................................................................................... 16
Other
liabilities..........................................................................................
.............................................. 1
Deposits and other
debt.................................................................................................
........................... 76
Debt to credit institutions - term to
maturity over 1 year........................................................................ 4
Debt to credit institutions - term to
maturity under 1 year...................................................................... 2
Issued bonds - term to maturity over
1 year............................................................................................. 1
Total................................................................................................
....................................................... 100
=============
As seen from the table above and the below table, the Issuer has
debt to credit institutions of DKK 443 million DKK which expire
within the next 12 months. This is more than covered by claims on
central banks, other credit institutions and listed securities (as
seen from the table below):
As at
31 December
2016
(million
DKK
)
-------------
Debt to credit institutions and central
banks - term to maturity under 1 year.......................................... 443
Total................................................................................................
....................................................... 443
Cash in hand and demand deposits with
the central bank of Denmark...................................................... 284
Receivables with notice from central
banks - certificate of deposits........................................................ 1,572
Receivables from credit institutions
- term to maturity under 1 year....................................................... 356
Listed bonds, shares and investment
funds certificates at fair value.......................................................... 3,612
Total................................................................................................
....................................................... 5,824
-------------
Excess
cover................................................................................................
........................................... 5,381
=============
As per the table above, the Issuer had excess coverage of
approximately DKK 5.4 billion at the end of December 2016.
Market Risk
The Issuer's total Value at Risk at 31 December 2016 was DKK
11.1 million. This sum relates to the maximum loss from a
statistical perspective which the Issuer could risk losing with 99
per cent. probability if all market positions were retained
unchanged for a period of 10 days.
VaR summary 2016 (million End
DKK) Average Minimum Maximum of year
--------------------------------------------------------------------------- -------- --------- --------- ---------
VaR VaR VaR VaR
Risk figure figure* figure* figure
--------------------------------------------------------------------------- -------- --------- --------- ---------
Interest.................................................................
................... 14.5 3.2 31.2 11.1
Foreign
exchange.................................................................
.... 1.0 2.1 2.7 0.1
Share
price....................................................................
........... 4.9 5.2 5.2 3.4
Diversification..........................................................
............... -4.7 -4.3 -7.3 -3.5
Total VaR
figure...................................................................
.... 15.7 6.2 31.8 11.1
-- *Determined by the total VaR figure.
-- As shown from the table, the Issuer's total VaR figure
throughout 2016 varied from DKK 6.2 million to DKK 31.8 million
with an average of DKK 15.7 million. The variation over time
reflects the fact that the Issuer regularly adjusts the size of its
market positions, and that the risk in the financial markets varies
over time.
Credit concentration
The Issuer is focused on its credit concentration. A measure of
the Issuer's credit concentration is given by the Total Large
Exposure, which is the Issuer's exposure to customers exceeding 10
per cent. of the Issuer's own funds.
2016 2015 2014 2013 2012
----- ----- ----- ----- -----
Total Large Exposures
(per cent.)............ 29.5 63.4 47.8 35.0 27.2
Total Large Exposures as at 31 December 2016 amounts to 29.5 per
cent. on four good quality exposures and fully hedged with adequate
security.
Risks and risk management
The Issuer is exposed to various types of risks in connection
with its operations: credit risk, market risk, liquidity risk and
operational risk. The Issuer's total market risk is comprised of
interest rate risk, foreign exchange risk, share risk and property
risk.
The Issuer's general policy with respect to assumption of risks
is that the Issuer only assumes risks which it considers to be
within a moderate risk profile and which are in accordance with the
business principles under which the Issuer is run, and which the
Issuer possesses the expertise to manage.
The general policy for management and monitoring of the various
risks is that there must be both central control and central
monitoring as well as reporting to the Issuer's General Management
and Board of Directors. The management function and the control and
reporting functions are separate, and the tasks in question are
performed by different departments in the Issuer's central staff
functions.
The section below contains a description of the various credit
and market risks which should be read in conjunction with the
Annual Report for 2016 which contains the specific numbers.
Credit risk
Credit risk is defined as the risk that payments owed to the
Issuer are judged not to be collectable because of certain
customers' lack of ability or willingness to pay at the agreed
time.
The Issuer assumes credit risks on the basis of a policy, the
objectives of which are to ensure a balance between risks assumed
and the return gained by the Issuer, the maintenance of losses at
an acceptable level relative to the Danish financial sector, and
the accommodation of actual losses within the Issuer's results even
in extreme situations.
Historically, the Issuer has always had a sound and conservative
credit policy, and the focus will remain on ensuring an efficient
management and monitoring of the Issuer's total portfolio of loans
and guarantees via its central credit department.
Actual net losses
The table below documents the performance of the Issuer's credit
policy. As will be evident, the Issuer's average percentage loss
after interest over the last 30 years (1987-2016) was -0.04 per
cent., with -0.77 per cent. (1992) as the highest percentage loss,
and +0.51 per cent. (2000) as the most positive figure. The average
percentage loss before interest over the last 30 years is -0.52 per
cent., with -1.70 per cent. (1992) as the highest percentage loss
and -0.01 per cent. (1999 and 2000) as the lowest percentage loss.
The average percentage loss after interest over the last 10 years
(2007-2016) is negative by 0.20 per cent., and the average
percentage loss before interest is -0.40 per cent. Over the years
the Issuer has accumulated a reserve for loan losses and provisions
for losses on guarantees which amounted to approximately DKK 937
million by the end of 2016. This has been established as the
impairment charges included in the statement of income have been
higher than the actual net losses shown in the table below. However
in 2016 actual losses were exceeded by the impairment charges
included in the statement of income. The table below focuses on the
actual losses of the Issuer providing a fair picture of the real
losses of the Issuer.
Actual net losses on loans and guarantees in DKK thousands
Loans
and Total
other Impairments loans,
debtors for guarantees,
Actual with loans impairments
net suspended and and Percentage Percentage
Actual losses calculation provisions provisions loss loss
net after of for for before after
Year losses interest interest guarantees guarantees interest(*) interest(*)
-------------------------------------------- -------- --------- ------------ ------------ ------------ ------------ ------------
1987...................................... -6,696 304 10,544 75,000 1,358,464 -0.49% 0.02%
1988...................................... -14,205 -5,205 4,522 93,900 1,408,830 -1.01% -0.37%
1989...................................... -18,302 -5,302 13,107 117,270 1,468,206 -1.25% -0.36%
1990...................................... -15,867 -1,867 47,182 147,800 1,555,647 -1.02% -0.12%
1991...................................... -11,429 3,571 47,626 170,000 1,805,506 -0.63% 0.20%
1992...................................... -32,928 -14,928 43,325 177,900 1,933,081 -1.70% -0.77%
1993...................................... -27,875 -6,875 30,964 208,700 1,893,098 -1.47% -0.36%
1994...................................... -14,554 4,446 33,889 223,500 1,938,572 -0.75% 0.23%
1995...................................... -10,806 10,194 27,292 238,800 2,058,561 -0.52% 0.50%
1996...................................... -19,802 -1,802 18,404 233,400 2,588,028 -0.77% -0.07%
1997...................................... -31,412 -12,412 39,846 236,600 3,261,429 -0.96% -0.38%
1998...................................... -2,914 18,086 4,905 263,600 3,752,602 -0.08% 0.48%
1999...................................... -442 21,558 18,595 290,450 5,148,190 -0.01% 0.42%
2000...................................... -405 27,595 12,843 316,750 5,377,749 -0.01% 0.51%
2001...................................... -8,038 20,962 14,222 331,950 6,113,523 -0.13% 0.34%
2002...................................... -8,470 20,530 26,290 382,850 7,655,112 -0.11% 0.27%
2003...................................... -22,741 2,259 23,412 394,850 8,497,124 -0.27% 0.03%
2004...................................... -14,554 9,446 18,875 404,855 11,523,143 -0.13% 0.08%
2005...................................... -22,908 192 35,796 357,000 15,522,264 -0.15% 0.00%
2006...................................... -13,531 7,028 20,578 295,000 17,858,787 -0.08% 0.04%
2007...................................... -15,264 4,888 13,190 289,097 19,227,572 -0.08% 0.03%
2008...................................... -34,789 -10,237 22,110 356,083 16,475,975 -0.21% -0.06%
2009...................................... -73,767 -47,658 62,649 467,025 14,890,027 -0.50% -0.32%
2010...................................... -69,428 -40,207 66,237 565,035 14,758,234 -0.47% -0.27%
2011...................................... -78,813 -43,073 61,419 649,856 14,448,638 -0.55% -0.30%
2012...................................... -90,022 -48,337 113,312 758,363 14,849,602 -0.61% -0.33%
2013...................................... -69,030 -25,117 85,258 853,421 16,604,640 -0.42% -0.15%
2014...................................... -53,427 -9,206 58,244 931,398 18,073,200 -0.30% -0.05%
2015...................................... -87,250 -48,815 74,220 942,950 20,194,063 -0.43% -0.24%
2016...................................... -86,666 -54,200 59,904 937,128 20,878,475 -0.42% -0.26%
30 year
average
(1987-2016)...............................
...... -0.52% -0.04%
10-year
average
(2007-2016)...............................
...... -0.40% -0.20%
_______________
(*) Actual net losses relative to total loans, guarantees,
impairments for loans and provisions for guarantees. Explanation:
The percentage losses are computed as the actual net losses for the
year before and after interest on the written-down part of loans as
percentage of total loans, guarantees and impairments for loans and
provisions for guarantees. A minus sign before a percentage loss
indicates a loss, while a positive percentage loss means that the
interest on the total account for write-downs was greater than the
actual net losses for the year. All the above figures are computed
excluding amounts concerning reverse transactions and the national
Bank Package I etc.
Credit approval process
The credit approval process is relatively centralised. There is
a specific limit for credit approval defined for each employee
which means that the employee in direct contact with the customer
is able to approve minor credits. Medium sized credits/exposures
can be approved by the branch manager whereas large
credits/exposures need approval by the credit department and/or the
General Management. Very large credits/exposures above a certain
limit need approval from the Board of Directors.
Samples of the credits approved are regularly taken by the
credit department to make sure the quality of the credit process is
satisfactory (i.e. that collateral has been sufficiently ensured,
the financial situation of the customer is well analysed and the
customer has a reasonable ability to service the loans).
Furthermore, credits are audited by both the internal auditor and
the external independent auditor of the Issuer on a regular test
basis, and the credit approval process is also audited by the
internal auditor of the Issuer.
Credit monitoring and management
All large credits are regularly reviewed. The Issuer collects
accounts from all customers organized as limited liability
companies as well accounts for a huge number of other customers.
These accounts are analysed by the credit department at least once
a year and more frequently for large customer and customers where
the potential risk of default is increased.
In addition, surveys are conducted of the rest of the customer
base. The samples of customers are selected randomly as well as by
specific criteria such as overdraft, large exposures and specific
types of credits which the Issuer expects to have an increased
probability of default. For every customer with an increased
probability of default a plan of action is defined by the customer
advisor. These plans are approved and monitored by the credit
department.
An independent credit risk officer reporting directly to the
Board of Directors is responsible for the quarterly reporting of
the credit risks directly to the Board of Directors.
Criteria for credit approval
In general the Issuer focuses on the following characteristics
in the credit approval process:
-- First priority security and/or other strong collateral;
-- Steady income/cash flow stream; and
-- Long-term relationship.
The criteria above are also important to the niche areas of the
Issuer. The niche areas have a clear preference for credits with
low margin and low risk in comparison to more risky credits with a
higher margin.
The niche areas include:
-- Loans to finance renewable energy (wind turbines and solar
plants): The Issuer is primarily focused on wind turbines erected
onshore and solar plants in Denmark and Germany, where the Issuer
has a first priority security. Wind turbines and solar plants
erected in Denmark and Germany are of particular interest to the
Issuer, as the governments in both countries have guaranteed a
subsidy.
-- Financing of medical and dental practitioners' purchase or
establishment of private practices and dentists' purchase or
establishment of private practices: The establishment of a private
medical practices is a highly regulated area in Denmark and the
income inflow of a medical or dental practitioner is relatively
stable compared to most other service trades.
-- Selected wholesale loans: Wholesale loans relate primarily to
real property loans comprising of loans secured by a first mortgage
on property and/or loans secured by a second mortgage on property
combined with a lessee that is considered by the Issuer to be
financially in good credit standing according to internal
evaluation criteria of the Issuer and with an irrevocable lease. In
the context of second mortgage financing, the Issuer places
importance on the project's ability to settle the debt prior to the
expiration of the lease.
-- Private Banking: Traditional private banking with a focus on
assets under management and other aspects of optimising the
customers' assets, including the financing of securities.
The valuation of security is highly dependent on the business
sector. In general the Issuer calculates a value which allows the
owner to earn a reasonable rate of return. The rate of return is
adjusted over time to reflect changed lending costs as well as
return on alternative investments. The valuations of private houses
are based on an assessor valuation as well as public property
valuations with a haircut.
Credit risk on financial counterparties
Exposures to financial counterparties, and therewith a credit
risk, (including settlement risk) arise in connection with the
Issuer's trading in securities, foreign currency and derivative
financial instruments, the Issuer's loans to other banks and the
Issuer's possession of bonds and payment handling. Settlement risk
is the risk that the Issuer will not receive payment or securities
corresponding to the securities and/or payments which the Issuer
had made and delivered in connection with the settlement of trades
in securities and/or currency.
The Issuer's Board of Directors grants lines for credit risks
and the settlement risks against financial counterparties. When
granting lines, account is taken of the individual counterparty's
risk profile, rating, size and financial circumstances, and there
is constant follow-up on the lines which are granted.
The Issuer's policy is to keep the credit risk exposure to
financial counterparties at a balanced level relative to the
Issuer's size, and to credit institutions with good credit
quality.
Claims on central banks and credit institutions
One of the two major items concerning the credit risk exposure
to financial counterparties is credit balances with central banks
and credit institutions. The Issuer has assumed only a moderate
risk on this item, and in the total credit balances with central
banks and credit institutions, 85 per cent. as of 31 December 2016
is thus due within three months.
The bond portfolio
The second of the two major items concerning the credit risk
with financial counterparties is the Issuer's bond portfolio.
As at
31 December
2016
(per
Bonds distributed by rating classes cent.)
------------------------------------------------------------------------------------------------------- -------------
Aaa/AAA..............................................................................................
.............................................. 82
Aa1/AA+...............................................................................................
.............................................. -
Aa2/AA................................................................................................
............................................... -
Aa3/AA-...............................................................................................
.............................................. -
A1/A+.................................................................................................
................................................ -
A2/A.................................................................................................
.................................................. 1
A3/A-................................................................................................
.................................................. 1
Baa1/BBB+.............................................................................................
............................................. -
Baa2/BBB.............................................................................................
............................................... 2
Baa3/BBB-............................................................................................
.............................................. 1
Ba1/BB+-.............................................................................................
............................................... 2
Ba2/BB...............................................................................................
................................................. 1
Ba3/BB--..............................................................................................
............................................... -
Not
rated................................................................................................
............................................. 10
-------------
Total................................................................................................
................................................... 100
=============
Explanation: The bond portfolio distributed by rating classes.
Ratings from the credit rating bureaus Moody's Investors Service,
Standard & Poors and Fitch were used in the specification.
The majority of the bond portfolio consists of AAA-rated Danish
government and mortgage credit bonds and bank bonds. There is also
a holding of corporate bonds. The credit quality of the bonds in
the corporate bonds portfolio is good, but their market value can
vary over time in connection with general changes in credit spreads
in the market, and company-specific circumstances can also affect
the value of these bonds.
Market risks
Market risk is defined as the risk that the market value of the
Issuer's assets and liabilities will change because of changes in
market conditions. The Issuer's basic policy with respect to market
risks is that the Issuer wishes to keep such risks at a moderate
level.
The Issuer has determined a concrete exposures limits for each
type of market risk, and the risk assessment includes the objective
that there must be a sensible and balanced relationship between
risk and return.
The Issuer uses derivatives to hedge and manage the various
market risk types to the extent to which the Issuer wishes to
reduce or eliminate, the market risks which the Issuer has
assumed.
To supplement the more traditional measures of market risk, the
Issuer has a mathematical/statistical model to compute market
risks. The model is used to compute Value at Risk ("VaR"), which is
regularly reported to the Issuer's management. VaR is a measure of
risk which describes the Issuer's risk under normal market
conditions.
An isolated VaR figure is calculated for interest rate
positions, foreign exchange positions and listed share positions
etc., and a total VaR figure is also calculated for all of the
Issuer's market risks consisting of interest rate positions,
foreign exchange positions and listed share positions etc. as the
effect of diversification. This possibility of calculating a total
VaR figure for the Issuer's market risks is one of the major
advantages of the VaR model compared with more traditional measures
of risk.
More information about the VaR model can be found in the Annual
Report for 2016 pages 10, 26-27, 29 and page 87.
Interest rate risk
The Issuer's loan and deposit business and accounts with credit
institutions are mostly entered into on a variable basis. The
Issuer also has certain fixed interest financial assets and
liabilities, and hedging transactions are entered into as needed
with a consequent reduction of the interest rate risk.
The Issuer's policy is to maintain a moderate interest rate
risk, and thus the Issuer does not assume high levels of exposure
to movements in the interest level.
The Issuer's interest rate risk is monitored and managed daily
by the Issuer's securities department and the Issuer's accounts
department controls maintenance of the limits for assumption of
interest rate risk, and reports to the Issuer's Board of Directors
and General Management.
As will be evident from the below table, the Issuer has had a
moderate interest rate risk over the last five years in accordance
with the Issuer's policy for this type of risk.
Interest
rate
risk
(per
Date cent.)
----------------------------------------------------------------------------------------------------------------------------------------------------- ---------
31 December
2011...................................................................................................................................... 0.7
30 June
2012............................................................................................................................................... 1.2
31 December
2012...................................................................................................................................... 0.6
30 June
2013............................................................................................................................................... 1.3
31 December
2013...................................................................................................................................... 0.6
30 June
2014............................................................................................................................................... 0.8
31 December
2014...................................................................................................................................... 1.2
30 June
2015............................................................................................................................................... 1.5
31 December
2015...................................................................................................................................... 2.2
30 June
2016............................................................................................................................................... 2.1
31 December
2016...................................................................................................................................... 1.8
Explanation: The interest rate risk shows the impact on profit
of a one percentage point change in interest rate level as a
percentage of the Tier 1 capital.
Foreign exchange risk
The Issuer's principal currency is Danish kroner, but the Issuer
has also entered into lending and deposit activities in other
currencies.
The Issuer's policy is to maintain a low foreign exchange risk,
so the Issuer reduces its exposures in foreign currencies via
hedging.
The Issuer's positions in foreign exchange are managed daily by
the foreign department, while the Issuer's accounts department
monitors maintenance of limits and reports to the Board of
Directors and General Management.
The Issuer's foreign exchange risk has in 2016 as in previous
years been at an insignificant level.
31 December
---------------------------------
2016 2015 2014 2013 2012
----- ----- ----- ----- -----
Foreign exchange
position(*1)
....... 0.6 0.8 0.4 1.6 0.6
Foreign exchange
risk(*2) .............. 0.0 0.0 0.0 0.0 0.0
_______________
(*1) Foreign exchange position is defined as foreign exchange
indicator 1 in per cent. of Tier 1 capital according to the
definitions of the official key figures from the Danish Financial
Supervisory Authority.
(*2) Foreign exchange risk is defined as foreign exchange
indicator 2 in per cent. of Tier 1 capital according to the
definitions of the official key figures from the Danish Financial
Supervisory Authority.
Share price risk
The share price risk is the risk of losing money as a result of
declining share prices of companies in which the Issuer owns
shares.
The Issuer co-owns various sector companies via equity interests
in BankInvest Holding A/S, Bokis A/S, DLR Kredit A/S, Letpension
Holding A/S, PRAS A/S, Sparinvest Holdings SE, Stonehenge
Fondsmæglerselskab A/S, Swift, VP Securities A/S and others.
The sector companies can be seen as a way of outsourcing a
number of services while the Issuer still keeps an interest through
its ownership stake in the companies. Larger banks typically
provide these services through wholly owned subsidiaries, and the
equity interests are thus not deemed to be a part of the Issuer's
share risk as the positions are primarily held as alternatives to
wholly owned subsidiaries. The Issuer also holds a small portfolio
of listed shares and a portfolio of investment fund
certificates.
The Issuer's policy is to maintain a moderate share price risk.
The daily management of the Issuer's share portfolio is undertaken
by the securities department, while monitoring of the lines and
reporting to the General Management and the Board of Directors are
performed by the accounts department.
The Issuer has maintained modest share exposure during recent
years.
Share
exposure
(per
Date cent.)
------------------------------------------------------------------------------------------------------------------------------------------ ---------
31 December
2011.................................................................................................................................... 0.7
31 December
2012.................................................................................................................................... 0.6
31 December
2013.................................................................................................................................... 0.6
31 December
2014.................................................................................................................................... 1.2
31 December
2015.................................................................................................................................... 2.2
31 December
2015.................................................................................................................................... 1.8
Explanation: The share exposure is computed as the Issuer's
portfolios of shares (excluding sector shares and bond-based
investment fund certificates) as a percentage of the Issuers'
equity.
Property risk
The Issuer primarily wishes to possess only properties for use
in banking operations, and also to maintain minimal property
risks.
The Issuer's portfolio of both domicile and investment
properties is thus quite modest relative to the Issuer's total
balance sheet (domicile and investment properties totalled 0.2 per
cent. of total assets and 1.6 per cent. of shareholders' equity at
31 December 2016).
Liquidity risk
Liquidity risk refers to the ability of the Issuer to ensure the
availability of appropriate cash funds to meet its payments
obligations, stemming from mismatches between the maturities of
assets and liabilities, and the liquidity risk arises in the
general funding of the Issuer's activities and in the management of
its operations.
In general with respect to the Issuer's liquidity management, it
is the Issuer's objective not to have uncovered net funding
requirements and not to be dependent on the short-term money
market. An objective is thus that the Issuer must be able to manage
for up to 12 months without access to the financial markets.
The daily liquidity is managed by the Issuer's accounts
department and regularly reported to the Board of Directors and the
General Management and the Issuer's service and support department
controls the reporting.
The Issuer's loan portfolio is funded from a range of sources,
primarily the Issuer's deposits, by joint funding (bond issue) of
the Issuer's home loans, by taking up longer-term loans with other
credit institutions, via the subordinated capital taken up by the
Issuer, and, finally, the Issuer's equity.
The Issuer's deposit base consists of core deposits and deposits
from customers with a long-term relationship with the Issuer. The
Issuer has also entered into longer-term bilateral loan agreements
with various European business partners.
It should be noted that the Issuer's funding situation is not
comprised such that the Issuer is dependent on the individual
business partners or other partners in a single country.
To ensure diversification in funding, the Issuer also has an
EMTN bond programme of EUR 2 billion. The programme helps to ensure
alternative funding sources for the bank. Funds were raised under
the programme in 2016.
During 2016, the Issuer entered into longer-term funding
agreements with its partners to the equivalent value of a total of
DKK 0.5 billion with an average term of approximately 3 years.
The Issuer has joint funding agreements with Totalkredit /
Nykredit and BRFkredit. The agreements mean that the Issuer can
procure liquidity by letting Totalkredit / Nykredit or BRFkredit
issue SDO bonds against security in the loans which the Issuer has
provided to customers with security in real property. In 2016, the
Issuer implemented the practical joint funding partnership with
Totalkredit / Nykredit, and in both the third and fourth quarters
of 2016, home loans were sold to Totalkredit / Nykredit for
funding.The Issuer has previously (in 2013 implemented the
practical joint funding partnership with BRFkredit.
As of 31 December 2016 the Issuer's deposits exceeded the
Issuer's loans In addition, part of the loan portfolio for wind
turbines erected in Germany was refinanced back-to-back with KfW
Bankengruppe, and DKK 1,010 million can be disregarded in terms of
liquidity.
The Issuer's short-term funding (debt to credit institutions and
centrals banks) with a time to maturity of less than 1 year is DKK
443 million, corresponding to DKK 5,824 million placed in the
central bank of Denmark, certificates of deposit, short-term
placings with other banks, and the Issuer's portfolio of liquid
securities, containing bonds, shares and investment fund
certificates (please refer to the section titled "Description of
the Issuer - Funding Structure").
The Issuer thus requires no financing for the coming year to
meet the minimum require-ment that it must always be able to manage
for up to 12 months without access to the financial markets.
In terms of liquidity, the Issuer must comply with the Liquidity
Coverage Requirement ratio ("LCR Ratio"). This key ratio expresses
the ability of banks to honor their payment obligations for a
30-day period without access to market funds. The LCR figure is
computed as the ratio of a bank's cash and cash equivalents /
liquid assets to its payment obligations for the next 30 days as
computed in accordance with specific rules.
The Issuer is not a systematically important financial
institution ("SIFI" On 1 January 2016, the requirement for non-SIFI
banks was cover of at least 70%. On 1 January 2017, the requirement
increased by 10 percentage points to 80%, and on 1 January 2018 it
will increase by an additional 20 percentage points, which means
that as of this date, the LCR must be at least 100%. The
requirement for SIFI banks has been cover of 100% since
implementation of the LCR requirement.
Since its introduction on 1 October 2015, the Issuer has sought
to follow the same rules that apply to SIFI banks, and the
Issuers's internal LCR target is thus 100%.
On 31 December 2016 the Issuer's LCR was 185% and the Issuer
thus met its target.
On 31 December 2016, the LCR requirement replaced the statutory
Section 152 requirement, which was phased out on the same date.
However, it must still be disclosed, and the figure at the end of
the year was 140%).
For data on the funding structure please see the financial
description as well as the Annual Report 2016 pages 10-11, 30-31
and the notes to the Annual Report 2015.
Operational risk
The operational risk is defined as the risk of direct or
indirect financial losses because of faults in internal processes
and systems, human errors or external events.
The current capital adequacy rules require among other things
banks to quantify and include an amount for operational risks when
computing their capital adequacy.
The Issuer uses the so-called basic indicator method, where, on
the basis of calculation of an average of the most recent three
financial years' net incomes, a sum is quantified and added to the
total risk exposure to cover the Issuer's operational risks.
The Issuer regularly produces reports on the losses and events
which are judged to be attributable to operational risks. From the
reports, an assessment is made whether procedures etc. can be
adjusted and improved in order to avoid or minimise any operational
risks. The Issuer's procedures are also regularly reviewed and
assessed by the Issuer's internal and external auditors. In
addition, the Issuer makes thematic reviews of selected business
areas, identifying and assessing the potential risk scenarios for
each area and subsequently adjusting the Issuer's procedures
accordingly.
An important area in assessment of the Issuer's operational
risks is IT.
The Issuer's IT organisation and the management regularly assess
IT security, including preparation of IT emergency plans, in
connection with which the Issuer specifies requirements and levels
for availability and stability of the IT systems and data used by
the Issuer. These requirements apply to both the Issuer's internal
IT organisation and its primary external IT supplier, Bankdata,
which the Issuer owns together with a number of other banks.
Taxation
Danish Taxation
The following is a summary description of the taxation in
Denmark of the Notes according to the Danish tax laws in force at
the date of this Prospectus and is subject to any changes in law
and the interpretation and application thereof, which changes could
be made with retroactive effect. The following summary does not
purport to be a comprehensive description of all the tax
considerations that may be relevant to a decision to acquire, hold
or dispose of the Notes, and does not purport to deal with the tax
consequences applicable to all categories of investors, some of
which (such as professional dealers in securities) may be subject
to special rules. Potential investors are under all circumstances
strongly recommended to contact their own tax advisor to clarify
the individual consequences of their investment, holding and
disposal of the Notes. The Issuer makes no representations
regarding the tax consequences of purchase, holding or disposal of
the Notes.
Taxation at source
Under existing Danish tax laws no general withholding tax or
coupon tax will apply to payments of interest or principal or other
amounts due on the Notes, other than in certain cases on payments
in respect of controlled debt in relation to the Issuer as referred
to in consolidated Act No. 1164 of 6 September 2016 on corporate
taxation as amended from time to time. This will not have any
impact on Noteholders who are not in a relationship whereby they
control, or are controlled by, the Issuer, or where the Noteholders
and the Issuer are not controlled by the same group of
shareholders.
Resident Noteholders
Private individuals, including persons who are engaged in
financial trade, companies and similar enterprises resident in
Denmark for tax purposes or receiving interest on the Notes through
their permanent establishment in Denmark are liable to pay tax on
such interest.
Capital gains are taxable to individuals and corporate entities
in accordance with Consolidated Act No. 1283 of 25 October 2016
capital and exchange gains (in Danish "Kursgevinstloven"). Gains
and losses on Notes held by corporate entities are generally taxed
in accordance with a mark--to--market principle (in Danish
"lagerprincippet"), i.e. on an unrealised basis.
Gains and losses on Notes issued to individuals are generally
taxed on a realised basis. The net gains are taxed as capital
income at a rate of up to 42 per cent. in 2016. However, this tax
rate does not apply if the individual is engaged in financial trade
and considered a professional trader. The gain or loss will only be
included in the taxable income when the net gain or loss for the
year on all debt claims, debt denominated in foreign currency and
investment certificates in bond-based investment funds subject to
the minimum taxation exceeds a total of DKK 2,000.
Pension funds and other entities governed by the Consolidated
Act No. 1126 of 10 October 2014 on Taxation of Pension Investments
Returns (in Danish "Pensionsafkastbeskatningsloven"), as amended
from time to time, would, irrespective of realisation, be taxed on
annual value increase or decrease in the fair market value of the
Notes according to a mark-to-market principle (in Danish
"lagerprincippet") as specifically laid down in the act. Such net
return is generally taxed at a flat rate of 15.3%.
Non--Resident Noteholders
Under existing Danish tax laws, payments of interest or
principal amounts to any non--resident Noteholders are not subject
to taxation in Denmark, other than in certain cases on payments in
respect of controlled debt in relation to the Issuer as referred to
under "Taxation at source" above. Thus no Danish withholding tax
will be payable with respect to such payments and any capital gain
realised upon the sale, exchange or retirement of a Note will not
be subject to taxation in Denmark, other than in certain cases on
payments in respect of controlled debt in relation to the Issuer as
referred to under "Taxation at source" above.
This tax treatment applies solely to Noteholders who are not
subject to full tax liability in Denmark or included in a Danish
joint taxation scheme and do not carry on business in Denmark
through a permanent establishment.
Financial Transactions Tax ("FTT")
On 14 February 2013, the European Commission published a
proposal (the "Commission's proposal") for a Directive for a common
FTT in Belgium, Germany, Estonia, Greece, Spain, France, Italy,
Austria, Portugal, Slovenia and Slovakia (the "participating Member
States"). However, Estonia has since stated that it will not
participate.
The Commission's proposal has very broad scope and could, if
introduced, apply to certain dealings in the Notes (including
secondary' market transactions) in certain circumstances.
Under the Commission's proposal, FTT could apply in certain
circumstances to persons both within and outside of the
participating Member States. Generally, it would apply to certain
dealings in the Notes where at least one party is a financial
institution, and at least one party is established in a
participating Member State. A financial institution may be, or be
deemed to be, "established" in a participating Member State in a
broad range of circumstances, including (a) by transacting with a
person established in a participating Member State or (b) where the
financial instrument which is subject to the dealings is issued in
a participating Member State.
However, the FTT proposal remains subject to negotiation between
the participating Member States. It may therefore be altered prior
to any implementation, the timing of which remains unclear.
Additional EU Member States may decide to participate.
Prospective holders of the Notes are advised to seek their own
professional advice in relation to the FTT.
FATCA
Whilst the Notes are in global form and held within Euroclear or
Clearstream, Luxembourg (together, the "ICSDs"), it is expected
that FATCA will not affect the amount of any payments made under,
or in respect of, the Notes by the Issuer, any paying agent and the
Common Depositary, given that each of the entities in the payment
chain beginning with the Issuer and ending with the ICSDs is a
major financial institution whose business is dependent on
compliance with FATCA and that any alternative approach introduced
under an intergovernmental agreement will be unlikely to affect the
securities. The documentation expressly contemplates the
possibility that the securities may go into definitive form and
therefore that they may be taken out of the ICSDs. If this were to
happen, then a non-FATCA compliant holder could be subject to
withholding. However, definitive notes will only be printed in
remote circumstances.
Subscription and Sale
The Dealers have, in a programme agreement (the "Programme
Agreement") dated 28 March 2017, agreed with the Issuer a basis
upon which they or any of them may from time to time agree to
purchase Notes. Any such agreement will extend to those matters
stated under "Form of the Notes" and "Terms and Conditions of the
Notes". In the Programme Agreement, the Issuer has agreed to
reimburse the Dealers for certain of their expenses in connection
with the establishment and any future update of the Programme and
the issue of Notes under the Programme and to indemnify the Dealers
against certain liabilities incurred by them in connection
therewith.
United States
The Notes have not been and will not be registered under the
Securities Act or with any securities regulatory authority of any
state or other jurisdiction of the United States, and may not be
offered or sold within the United States or to, or for the account
or benefit of, U.S. persons except in certain transactions exempt
from the registration requirements of the Securities Act. Terms
used in this paragraph have the meanings given to them by
Regulation S.
The Notes are subject to U.S. tax law requirements and may not
be offered, sold or delivered within the United States or its
possessions or to a United States person, except in certain
transactions permitted by U.S. Treasury regulations. Terms used in
this paragraph have the meanings given to them by the U.S. Internal
Revenue Code and regulations thereunder.
Each Dealer has agreed that, except as permitted by the Dealer
Agreement, it will not offer, sell or deliver Notes, (a) as part of
their distribution at any time or (b) otherwise until 40 days after
the completion of the distribution of the Notes comprising the
relevant Tranche, as certified to the Fiscal Agent or the Issuer by
such Dealer (or, in the case of a sale of a Tranche of Notes to or
through more than one Dealer, by each of such Dealers as to the
Notes of such Tranche purchased by or through it, in which case the
Fiscal Agent or the Issuer shall notify each such Dealer when all
such Dealers have so certified) within the United States or to, or
for the account or benefit of, U.S. persons, and such Dealer will
have sent to each dealer to which it sells Notes during the
distribution compliance period relating thereto a confirmation or
other notice setting forth the restrictions on offers and sales of
the Notes within the United States or to, or for the account or
benefit of, U.S. persons. Each Dealer has also represented and
agreed that neither it, its affiliates (as defined in Rule 405 of
the Securities Act) nor any person acting on its or their behalf
has engaged or will engage in any directed selling efforts with
respect to the Notes and it and they have complied and will comply
with the offering restrictions requirement of Regulation S. Terms
used in this paragraph have the meanings given to them by
Regulation S.
In addition, until 40 days after the commencement of the
offering of Notes comprising any Tranche, any offer or sale of
Notes within the United States by any dealer (whether or not
participating in the offering) may violate the registration
requirements of the Securities Act.
Prohibition of Sales to EEA Retail Investors
From 1 January 2018, unless the Final Terms in respect of any
Notes specifies the "Prohibition of Sales to EEA Retail Investors"
as "Not Applicable", each Dealer has represented and agreed, and
each further Dealer appointed under the Programme will be required
to represent and agree, that it has not offered, sold or otherwise
made available and will not offer, sell or otherwise make available
any Notes which are the subject of the offering contemplated by
this Prospectus as completed by the Final Terms in relation thereto
to any retail investor in the European Economic Area. For the
purposes of this provision:
(a) the expression "retail investor" means a person who is one
(or more) of the following:
(i) a retail client as defined in point (11) of Article 4(1) of
Directive 2014/65/EU (as amended, "MiFID II"); or
(ii) a customer within the meaning of Directive 2002/92/EC (as
amended, the "Insurance Mediation Directive"), where that customer
would not qualify as a professional client as defined in point (10)
of Article 4(1) of MiFID II; or
(iii) not a qualified investor as defined in Directive
2003/71/EC (as amended, the "Prospectus Directive"); and
(b) the expression an "offer" includes the communication in any
form and by any means of sufficient information on the terms of the
offer and the Notes to be offered so as to enable an investor to
decide to purchase or subscribe the Notes.
Public Offer Selling Restriction under the Prospectus
Directive
Prior to 1 January 2018, and from that date if the Final Terms
in respect of any Notes specifies "Prohibition of Sales to EEA
Retail Investors" as "Not Applicable", each Dealer has represented
and agreed and each further Dealer appointed under the Programme
will be required to represent and agree that in relation to each
Member State of the European Economic Area which has implemented
the Prospectus Directive (each, a "Relevant Member State"), with
effect from and including the date on which the Prospectus
Directive is implemented in that Relevant Member State (the
"Relevant Implementation Date") it has not made and will not make
an offer of Notes which are the subject of the offering
contemplated by this Prospectus as completed by the final terms in
relation thereto (or are the subject of the offering contemplated
by a Drawdown Prospectus, as the case may be) to the public in that
Relevant Member State except that it may, with effect from and
including the Relevant Implementation Date, make an offer of such
Notes to the public in that Relevant Member State:
(a) at any time to any legal entity which is a qualified
investor as defined in the Prospectus Directive;
(b) at any time to fewer than 100 or, if the Relevant Member
State has implemented the relevant provision of the 2010 PD
Amending Directive, 150, natural or legal persons (other than
qualified investors as defined in the Prospectus Directive) subject
to obtaining the prior consent of the relevant Dealer or Dealers
nominated by the Issuer for any such offer; or
(c) at any time in any other circumstances falling within
Article 3(2) of the Prospectus Directive,
provided that no such offer of Notes referred to in (a) to (c)
above shall require the Issuer or any Dealer to publish a
prospectus pursuant to Article 3 of the Prospectus Directive or
supplement a prospectus pursuant to Article 16 of the Prospectus
Directive.
For the purposes of this provision, the expression an "offer of
Notes to the public" in relation to any Notes in any Relevant
Member State means the communication in any form and by any means
of sufficient information on the terms of the offer and the Notes
to be offered so as to enable an investor to decide to purchase or
subscribe the Notes, as the same may be varied in that Member State
by any measure implementing the Prospectus Directive in that Member
State and the expression "Prospectus Directive" means Directive
2003/71/EC (and amendments thereto, including the 2010 PD Amending
Directive, to the extent implemented in the Relevant Member State),
and includes any relevant implementing measure in the Relevant
Member State and the expression "2010 PD Amending Directive" means
Directive 2010/73/EU.
United Kingdom
Each Dealer has represented and agreed, and each further Dealer
appointed under the Programme will be required to represent and
agree, that:
(a) in relation to any Notes which have a maturity of less than
one year, (i) it is a person whose ordinary activities involve it
in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of its business and (ii) it
has not offered or sold and will not offer or sell any Notes other
than to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as
principal or as agent) for the purposes of their businesses or who
it is reasonable to expect will acquire, hold, manage or dispose of
investments (as principal or agent) for the purposes of their
businesses where the issue of the Notes would otherwise constitute
a contravention of Section 19 of the FSMA by the Issuer;
(b) it has only communicated or caused to be communicated and
will only communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning of
Section 21 of the FSMA) received by it in connection with the issue
or sale of any Notes in circumstances in which Section 21(1) of the
FSMA does not apply to the Issuer; and
(c) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in
relation to any Notes in, from or otherwise involving the United
Kingdom.
Japan
The Notes have not been and will not be registered under the
Financial Instruments and Exchange Act of Japan (Act No.25 of
1948), as amended (the "FIEA"). Accordingly, each Dealer has
represented and agreed, and each further Dealer appointed under the
Programme will be required to represent and agree, that it has not,
directly or indirectly, offered or sold and will not, directly or
indirectly, offer to sell any Notes in Japan or to, or for the
benefit of, a resident of Japan (which term as used herein means
any person resident in Japan, including any corporation or other
entity organised under the laws of Japan), or to others for
re--offering or resale, directly or indirectly, in Japan or to, or
for the benefit of, any resident in Japan, except pursuant to an
exemption from the registration requirements of, and otherwise in
compliance with, FIEA and other relevant laws and regulations of
Japan.
Kingdom of Denmark
Each Dealer has represented and agreed and each further Dealer
appointed under the Programme will be required to represent and
agree that it has not offered or sold and will not offer, sell or
deliver any Notes directly or indirectly in the Kingdom of Denmark
by way of a public offering, unless in compliance with the
Consolidated Danish Act No. 251 of 21 March 2017 on Trading in
Securities, as amended from time to time, and Executive Orders
issued thereunder and Executive Order No. 623 of 24 April 2015 to
the Danish Financial Business Act to the extent applicable.
Notes issued through the VP will be negotiable instruments and
will not be subject to any restrictions on their free negotiability
within the Kingdom of Denmark.
France
Each of the Dealers has represented and agreed, and each further
Dealer appointed under the Programme will be required to represent
and agree, that it has not offered or sold and will not offer or
sell, directly or indirectly, any Notes to the public in France and
it has not distributed or caused to be distributed and will not
distribute or cause to be distributed to the public in France, this
Prospectus, the relevant Final Terms or any other offering material
relating to the Notes and such offers, sales and distributions have
been and will be made in France only to (a) persons providing
investment services relating to portfolio management for the
account of third parties (personnes fournissant le service de
gestion de portefeuille pour compte de tiers), and/or (b) qualified
investors (investisseurs qualifiés), other than individuals, acting
for their own account, as defined in, and in accordance with,
Articles L.411-1, L.411-2 and D.411-1 of the French Code monétaire
et financier.
General
Each Dealer has agreed and each further Dealer appointed under
the Programme will be required to agree that it will (to the best
of its knowledge and belief) comply with all applicable securities
laws and regulations in force in any jurisdiction in which it
purchases, offers, sells or delivers Notes or possesses or
distributes this Prospectus and will obtain any consent, approval
or permission required by it for the purchase, offer, sale or
delivery by it of Notes under the laws and regulations in force in
any jurisdiction to which it is subject or in which it makes such
purchases, offers, sales or deliveries and neither the Issuer nor
any of the other Dealers shall have any responsibility
therefor.
None of the Issuer and the Dealers represents that Notes may at
any time lawfully be sold in compliance with any applicable
registration or other requirements in any jurisdiction, or pursuant
to any exemption available thereunder, or assumes any
responsibility for facilitating such sale.
General Information
Authorisation
The current update of the Programme and the issue of Notes have
been duly authorised by a resolution of the Board of Directors of
the Issuer dated 24 February 2016.
Listing, Approval and Admission of Notes
It is expected that each Tranche of Notes which is admitted to
the Official List and trading on the London Stock Exchange's
regulated market will be admitted separately as and when issued,
subject only to the issue of a Global Note or Notes initially
representing the Notes of such Tranche. Application has been made
to the UK Listing Authority for Notes issued under the Programme to
be admitted to the Official List and to the London Stock Exchange
for such Notes to be admitted to trading on the London Stock
Exchange's regulated market. The listing of the Programme is
expected to be granted on or before 28 March 2017.
Documents Available
For the period of 12 months following the date of this
Prospectus, copies of the following documents will, when published,
be available for inspection from the registered office of the
Issuer and from the specified office of the Paying Agent for the
time being:
(a) the constitutional documents (with a direct English
translation thereof) of the Issuer;
(b) the audited financial statements of the Issuer in respect of
the financial years ended 31 December 2015 and 2016 together with
the audit reports prepared in connection therewith. The Issuer
currently prepares audited non--consolidated accounts on an annual
basis;
(c) the most recently published audited annual financial
statements of the Issuer and the most recently published unaudited
interim financial statements (if any) of the Issuer, in each case
together with any audit or review reports prepared in connection
therewith. The Issuer currently prepares unaudited
non--consolidated interim accounts on a quarterly basis;
(d) the Programme Agreement, the Agency Agreement, the Deed of
Covenant and the forms of the Global Notes, the Notes in definitive
form, the Receipts, the Coupons and the Talons;
(e) a copy of this Prospectus; and
(f) any future offering circulars, prospectuses, information
memoranda and supplements including Final Terms (save that a Final
Terms relating to a Note which is neither admitted to trading on a
regulated market in the European Economic Area nor offered in the
European Economic Area in circumstances where a prospectus is
required to be published under the Prospectus Directive will only
be available for inspection by a holder of such Note and such
holder must produce evidence satisfactory to the Issuer and the
Paying Agent as to its holding of Notes and identity) to this
Prospectus and any other documents incorporated herein or therein
by reference.
For the period of 12 months following the date of this
Prospectus, copies of each VP Issuing Agency Agreement relating to
VP Systems Notes of the relevant Series will be available for
inspection from the registered office of the Issuer and from the
specified office of the VP Issuing Agent for the time being (save
that a VP Issuing Agency Agreement relating to a Note which is
neither admitted to trading on a regulated market in the European
Economic Area nor offered in the European Economic Area in
circumstances where a prospectus is required to be published under
the Prospectus Directive will only be available for inspection by a
holder of such Note and such holder must produce evidence
satisfactory to the Issuer and the VP Issuing Agent as to its
holding of Notes and identity).
Clearing Systems
The Bearer Notes have been accepted for clearance through
Euroclear and Clearstream, Luxembourg. The appropriate Common Code
and ISIN for each Tranche of Notes allocated by Euroclear and
Clearstream, Luxembourg will be specified in the applicable Final
Terms. If the Notes are to clear through an additional or
alternative clearing system (including the VP or the VP Lux) the
appropriate information will be specified in the applicable Final
Terms. Euroclear, Clearstream, Luxembourg, the VP and/or the VP
Lux, as the case may be, are the entities in charge of keeping
records.
The address of Euroclear is Euroclear Bank SA/NV, 1 Boulevard du
Roi Albert II, B-1210 Brussels, Belgium, the address of
Clearstream, Luxembourg is Clearstream Banking, 42 Avenue JF
Kennedy, L-1855 Luxembourg, Luxembourg, the address of VP is
Weidekampsgade 14, PO Box 4040, DK-2300, Copenhagen S, Denmark and
the address of the VP Lux is 43, avenue Monterey, L-2162
Luxembourg, Luxembourg. The address of any alternative clearing
system will be specified in the applicable Final Terms.
Conditions for determining price
The price and amount of Notes to be issued under the Programme
will be determined by the Issuer and each relevant Dealer at the
time of issue in accordance with prevailing market conditions.
Significant or Material Change
There has been no significant change in the financial position
of the Issuer since 31 December 2016 and there has been no material
adverse change in the financial position or prospects of the Issuer
since 31 December 2016.
Litigation
There are no governmental, legal or arbitration proceedings
(including any such proceedings which are pending or threatened of
which the Issuer is aware), during the 12 months before the date of
this Prospectus which may have, or have had in the recent past,
significant effects on the Issuer's financial position or
profitability.
Auditors
The auditors of the Issuer are PricewaterhouseCoopers,
Statsautoriseret Revisionspartnerselskab (state-authorised public
accountants), who have audited the Issuer's accounts, without
qualification, in accordance with Danish Standards on Auditing for
the financial years, which ended on 31 December 2015 and 31
December 2016 respectively. The auditors of the Issuer have no
material interest in the Issuer. The audited annual financial
statements of the Issuer for the financial years ended 31 December
2015 and 31 December 2016 have been prepared in accordance with
provisions of the Danish Financial Business Act and other Danish
requirements regarding information in the annual financial
statements of listed financial companies.
PricewaterhouseCoopers, Statsautoriseret Revisionspartnerselskab
is a member of "FSR Danske Revisorer", the Danish Association of
State Authorised Public Accountants.
Dealers transacting with the Issuer
Certain of the Dealers and their affiliates have engaged, and
may in the future engage, in investment banking and/or commercial
banking transactions with, and may perform services to the Issuer
and its affiliates in the ordinary course of business.
Yield
The yield of each Tranche of Notes bearing interest at a fixed
rate as set out in the relevant Final Terms will be calculated as
of the relevant issue date on an annual or semi-annual basis using
the relevant issue price. It is not an indication of future
yield.
Index of Defined Terms
$.................................................................................
v
GBP.................................................................................
v
EUR.................................................................................
v
2010 PD Amending Directive.............................. 87
2015
Accounts.......................................................
17
2016
Accounts.......................................................
17
30/360................................................................
36, 43
30E/360....................................................................
43
30E/360
(ISDA)...................................................... 43
360/360....................................................................
43
Accrual
Period.......................................................
36
Actual/360..............................................................
42
Actual/365
(Fixed)................................................. 42
Actual/365
(Sterling)............................................. 42
Actual/Actual........................................................
42
Actual/Actual (ICMA).........................................
36
Actual/Actual (ISDA)..........................................
42
additional own funds requirements...................... 8
Additional Tier 1 Capital......................................
11
Agency Agreement..............................................
29
Agent......................................................................
29
Amortised Face Amount......................................
54
applicable Final Terms..........................................
30
Bank...........................................................................
i
Banking
Day..........................................................
60
Basel
III.....................................................................
7
Bearer
Notes....................................................... i,
29
Bond
Basis.............................................................
43
BRRD........................................................................
8
BRRD Amendment Proposal............................... 14
Business
Day......................................................... 37
Calculation
Agent................................................. 38
Calculation Amount..............................................
35
CIBOR.....................................................................
40
Clearstream, Luxembourg............................ i, 18,
31
combined
buffer...................................................... 8
Commission's proposal........................................
85
Common Depositary.............................................
18
Common Safekeeper.............................................
18
Conditions........................................................
21, 30
Couponholders......................................................
30
Coupons.................................................................
29
Covered
Bonds...................................................... 33
CRA
Regulation....................................................
16
CRD IV Amendment Proposal............................... 8
CRD IV
Directive.....................................................
7
CRD IV
Regulation.................................................. 7
Danish Business Day...........................................
49
Danish Financial Business Act............................. 7
Danish
Kroner.........................................................
v
Danish Recovery and Resolution Act............... 12
Danish
Remedies................................................... 64
Danish VP Registration Order............................. 29
Day Count Fraction........................................ 36,
42
Dealer.........................................................................
i
Dealers.......................................................................
i
Deed of Covenant........................................... 19,
30
Deposit Guarantee Schemes..................................
9
Designated Maturity............................................
38
Determination Period............................................
36
DFSA........................................................................
5
DKK..........................................................................
v
Established
Rate.................................................... 35
EURIBOR................................................................
40
euro.....................................................................
v, 35
Eurobond
Basis..................................................... 43
Euroclear........................................................
i, 18, 31
Event of Default..............................................
58, 59
Exchange
Date....................................................... 18
Exchange
Event..................................................... 18
Exchange
Notice.................................................... 34
FATCA...................................................................
14
FIEA........................................................................
88
Final
Terms................................................................
i
First Reset
Date..................................................... 46
First Reset
Margin................................................ 46
First Reset
Period.................................................. 46
First Reset Rate of Interest..................................
46
Fixed Interest
Period............................................. 35
Floating
Rate..........................................................
38
Floating Rate Option............................................
38
FTT..........................................................................
85
Global
Note............................................................
29
holder of
Notes...................................................... 31
holders....................................................................
30
ICSDs................................................................
14, 85
Indebtedness for Borrowed Money................... 61
Initial Mid-Swap Rate...........................................
46
Insurance Mediation Directive........................... 86
Interest
Amount.................................................... 42
Interest Payment Date..........................................
37
Investor's
Currency.............................................. 15
ISDA
Definitions...................................................
38
ISDA
Rate..............................................................
38
Issuer.............................................................
i, 29, 68
LCR
Ratio...............................................................
82
LIBOR.....................................................................
41
listed...........................................................................
i
London Business Day..........................................
44
London Stock Exchange.........................................
i
Long Maturity Note..............................................
49
Luxembourg Business Day.................................. 49
Luxembourg Remedies.........................................
64
Markets in Financial Instruments Directive......... i
Mid-Market Swap Rate........................................
46
Mid-Market Swap Rate Quotation..................... 47
Mid-Swap
Rate...................................................... 47
MiFID
II..................................................................
86
minimum own funds requirement.......................... 8
MREL......................................................................
13
NGN.........................................................................
18
NIBOR.....................................................................
41
NOK..........................................................................
v
Norwegian
Kroner.................................................. v
Noteholder.............................................................
31
Noteholders...........................................................
30
Notes....................................................................
i, 29
offer of Notes to the public.................................
87
Official
List................................................................
i
participating Member States...............................
85
Paying
Agents.......................................................
29
Payment
Day..........................................................
50
Permanent Global Note.........................................
18
Permitted Security Interest..................................
33
PRIIPs Regulation............................................
iv, 21
Principal
Subsidiary.............................................. 59
Proceedings...........................................................
65
Programme.................................................................
i
Programme Agreement.........................................
86
Prospectus.............................................................
21
Prospectus Directive........................... iv, 21, 86,
87
Put
Notice...............................................................
54
Receipts..................................................................
29
Redeemed
Notes................................................... 53
Redenomination Date...........................................
35
Reference
Banks.................................................... 41
Reference
Rate....................................................... 41
Relevant
Agent..................................................... 39
Relevant Date..................................................
56, 57
relevant
Dealer..........................................................
i
Relevant Implementation Date............................ 87
Relevant Indebtedness........................................
33
Relevant Member State........................................
87
Relevant
Notes...................................................... 35
Relevant Screen Page...........................................
41
Relevant
Time........................................................ 41
Reset
Date........................................................ 38,
47
Reset Determination Date....................................
47
Reset
Margin.........................................................
47
Reset
Period...........................................................
47
Reset Reference Banks.........................................
47
Responsible
Person............................................... iii
Revised Deposit Guarantee Schemes Directive. 9
Securities
Act.........................................................
iii
Securities Trading Act.........................................
29
Security
Interest.................................................... 32
SEK...........................................................................
v
Selection
Date........................................................ 53
Series.......................................................................
30
SIFI..........................................................................
82
SREP..........................................................................
8
Sterling.....................................................................
v
STIBOR...................................................................
41
Subsequent Reset Date........................................
47
Subsequent Reset Margin...................................
47
Subsequent Reset Period.....................................
47
Subsequent Reset Rate of Interest..................... 47
Subsidiary..............................................................
61
sub--unit..................................................................
36
Swedish
Kroner....................................................... v
Talons.....................................................................
29
TARGET2 System.................................................
37
Tax Jurisdiction...............................................
56, 57
Temporary Global Note........................................
18
Tier 2
Capital.................................................... 10,
32
TLAC......................................................................
13
Tranche...................................................................
30
Treaty......................................................................
35
U.S.
dollars...............................................................
v
U.S.$..........................................................................
v
UK Listing
Authority.............................................. i
VaR..........................................................................
80
Voting VP Systems Notes....................................
63
VP.........................................................................
i, 29
VP Issuing Agency Agreement.......................... 29
VP Issuing
Agent.................................................. 29
VP
Lux..................................................................
i, 29
VP Lux
Notes...................................................... i,
29
VP
Notes..............................................................
i, 29
VP Systems Notes..............................................
i, 29
ISSUER
Ringkjøbing Landbobank Aktieselskab
Torvet 1
DK-6950 Ringkøbing
Denmark
ISSUING AND PRINCIPAL PAYING AGENT
BNP Paribas Securities Services, Luxembourg
Branch
60, Avenue J.F. Kennedy
L - 1855 Luxembourg
Luxembourg
LEGAL ADVISERS
To the Issuer as to To the Dealers as to
Danish law English law
Gorrissen Federspiel Clifford Chance LLP
Advokatpartnerselskab 10 Upper Bank Street
Axeltorv 2 Canary Wharf
DK-1609 Copenhagen London E14 5JJ
V
Denmark
AUDITORS
To the Issuer
PricewaterhouseCoopers, Statsautoriseret
Revisionspartnerselskab
Platanvej 4
DK-7400 Herning
Denmark
ARRANGER
Nordea Bank AB (Publ)
Smålandsgatan 17
105 71 Stockholm
Sweden
DEALERS
Danske Bank A/S Nordea Bank AB (Publ)
2-12 Holmens Kanal Smålandsgatan
DK-1092 Copenhagen K 17
Denmark 105 71 Stockholm
Sweden
Landesbank Baden-Württemberg Skandinaviska Enskilda
Am Hauptbahnhof 2 Banken AB (publ)
70173 Stuttgart Kungsträdgårdsgatan
Germany 8
106 40 Stockholm
Sweden
This information is provided by RNS
The company news service from the London Stock Exchange
END
PDIJLMLTMBTTMAR
(END) Dow Jones Newswires
March 29, 2017 05:29 ET (09:29 GMT)
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