Prospectus • Dec 16, 2016
Prospectus
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BASE PROSPECTUS
(incorporated with limited liability in the Kingdom of Sweden)
This base prospectus (the Base Prospectus) of Sandvik AB (publ) (the Issuer) has been approved by the United Kingdom Financial Conduct Authority (the UK Listing Authority), which is the United Kingdom competent authority for the purposes of Directive 2003/71/EC, (as amended, including by Directive 2010/73/EU and includes any relevant implementing measures in a relevant Member State of the European Economic Area) (the Prospectus Directive). This Base Prospectus is issued in compliance with the Prospectus Directive and relevant implementing measures in the United Kingdom for the purpose of giving information with regard to the issue of notes (the Notes) issued under the Euro Medium Term Note Programme (the Programme) described in this Base Prospectus during the period of twelve months after the date hereof.
Application has been made to the UK Listing Authority for Notes (other than Exempt Notes (as defined below)) issued under the Programme during the period of twelve months after the date of this Base Prospectus to be admitted to the official list maintained by 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 (the Regulated Market). The Regulated Market is a regulated market for the purposes of the Markets in Financial Instruments Directive (Directive 2004/39/EC) (the Markets in Financial Instruments Directive).
The requirement to publish a prospectus under the Prospectus Directive only applies to Notes which are to be admitted to trading on a regulated market in the European Economic Area and/or offered to the public in the European Economic Area other than in circumstances where an exemption is available under Article 3.2 of the Prospectus Directive (as implemented in the relevant Member State(s)). References in this Base Prospectus to Exempt Notes are to Notes which are 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. Unless specified otherwise, references to Notes are deemed to include references to Exempt Notes. The Exempt Notes do not comprise part of this Base Prospectus for the purposes of the Prospectus Directive. The UK Listing Authority has neither approved nor reviewed information contained in this Base Prospectus in connection with Exempt Notes.
Notice of the aggregate principal amount of, the interest payable in respect of, the issue price of, and certain other information which is applicable to each series of Notes (other than in the case of Exempt Notes) will be set forth in one or more final terms document (the Final Terms) which, with respect to Notes to be listed on the London Stock Exchange, will be delivered to the UK Listing Authority and to the London Stock Exchange on or before the date of issue of the Notes of such series (the Series). Copies of Final Terms in relation to Notes to be listed on the London Stock Exchange will also be published on the website of the London Stock Exchange through a regulatory information service. In the case of Exempt Notes, notice of the aggregate principal amount of, the interest payable in respect of, the issue price of, and certain other information which is applicable to each Series will be set forth in one or more pricing supplement document (the Pricing Supplement). The Programme provides that Exempt Notes may be issued on the basis that they will not be admitted to listing, trading and/or quotation by any competent authority, stock exchange and/or quotation system or that they may be admitted to listing, trading and/or quotation by such other or further competent authorities, stock exchanges and/or quotation systems (provided that such exchange or quotation system is not a regulated market for the purposes of the Markets in Financial Instruments Directive) as may be agreed between the Issuer and the relevant purchaser(s) in relation to such issue. Copies of each Pricing Supplement relating to Exempt Notes will only be available for inspection by a holder of such Notes at the specified office of the Fiscal Agent upon production of evidence satisfactory to the Fiscal Agent as to the identity of such holder.
As at the date of this Base Prospectus, the senior unsecured debt securities of Sandvik AB (publ) have been assigned a rating of "BBB" by Standard & Poor's Credit Market Services Europe Limited (S&P) and the Programme has been assigned a rating of "BBB" by S&P. S&P is established in the EEA and is registered under the Regulation (EC) No. 1060/2009, as amended (the CRA Regulation). The Notes issued under the Programme may be rated or unrated. Where the Notes are rated, such rating will not necessarily be the same as the rating assigned to the Programme and may be specified in the relevant Final Terms or Pricing Supplement, as may be applicable.
A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency. Investing in Notes issued under the Programme involves certain risks. The principal risk factors that may affect the ability of the Issuer to fulfil its obligations under the Notes are discussed under "Risk Factors" below.
CITIGROUP DANSKE BANK DEUTSCHE BANK HSBC HANDELSBANKEN CAPITAL MARKETS J.P. MORGAN MUFG NATWEST MARKETS NORDEA SEB SOCIÉTÉ GÉNÉRALE CORPORATE & INVESTMENT BANKING STANDARD CHARTERED BANK SWEDBANK AB (PUBL)
16 December 2016
| IMPORTANT NOTICES 1 | |
|---|---|
| OVERVIEW 3 | |
| RISK FACTORS 8 | |
| INFORMATION INCORPORATED BY REFERENCE 21 | |
| FINAL TERMS, PRICING SUPPLEMENTS AND DRAWDOWN PROSPECTUSES 22 | |
| FORMS OF THE NOTES 23 | |
| TERMS AND CONDITIONS OF THE NOTES 29 | |
| FORM OF FINAL TERMS 58 | |
| FORM OF PRICING SUPPLEMENT 66 | |
| SUMMARY OF PROVISIONS RELATING TO THE NOTES WHILE IN GLOBAL FORM 77 | |
| USE OF PROCEEDS 80 | |
| DESCRIPTION OF THE ISSUER 81 | |
| TAXATION 96 | |
| SUBSCRIPTION AND SALE 99 | |
| GENERAL INFORMATION 104 | |
The Issuer accepts responsibility for the information contained in this Base Prospectus and the relevant Final Terms or, in the case of Exempt Notes, the relevant Pricing Supplement, and declares that, having taken all reasonable care to ensure that such is the case, the information contained in this Base Prospectus and the relevant Final Terms or, in the case of Exempt Notes, the relevant Pricing Supplement is to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import.
Each tranche of Notes (the Tranche) will be issued on the terms set out herein under "Terms and Conditions of the Notes" (the Conditions) as completed by the Final Terms or, in the case of Exempt Notes as supplemented, amended and/or replaced by the Pricing Supplement, or in a separate prospectus specific to such Tranche (the Drawdown Prospectus) as described under "Final Terms, Pricing Supplements and Drawdown Prospectuses" below. In the case of Exempt Notes, any reference in this Base Prospectus to "Final Terms" shall be deemed to be a reference to "Pricing Supplement" unless the context requires otherwise. In the case of a Tranche of Notes which is the subject of a Drawdown Prospectus, each reference in this Base Prospectus to information being specified or identified in the relevant Final Terms shall be read and construed as a reference to such information being specified or identified in the relevant Drawdown Prospectus unless the context requires otherwise. This Base Prospectus must be read and construed together with any amendments or supplements hereto and with any information incorporated by reference herein and, in relation to any Tranche of Notes which is the subject of Final Terms must be read and construed together with the relevant Final Terms.
No person has been authorised to give any information or to make any representation not contained in or not consistent with this Base Prospectus or any other document entered into in relation to the Programme or any information supplied by the Issuer or such other information as is in the public domain and, if given or made, such information or representation should not be relied upon as having been authorised by the Issuer or any Dealer.
Neither the Dealers nor any of their respective affiliates have authorised the whole or any part of this Base Prospectus and none of them makes any representation or warranty or accepts any responsibility as to the accuracy or completeness of the information contained in this Base Prospectus. Neither the delivery of this Base Prospectus or any Final Terms nor the offering, sale or delivery of any Note shall, in any circumstances, create any implication that the information contained in this Base Prospectus is true subsequent to the date hereof or, if later, the date upon which this Base Prospectus has been most recently amended or supplemented or that there has been no adverse change, or any event reasonably likely to involve any adverse change, in the prospects or financial or trading position of the Issuer since the date thereof or, if later, the date upon which this Base Prospectus has been most recently amended or supplemented or that any other information supplied in connection with the Programme is correct at any time subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same.
The distribution of this Base Prospectus and any Final Terms and the offering, sale and delivery of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Base Prospectus or any Final Terms comes are required by the Issuer and the Dealers to inform themselves about and to observe any such restrictions. For a description of certain restrictions on offers, sales and deliveries of Notes and on the distribution of this Base Prospectus or any Final Terms and other offering material relating to the Notes see "Subscription and Sale". In particular, the Notes have not been and will not be registered under the United States Securities Act of 1933 (as amended) (the Securities Act) and Bearer Notes are subject to United States (the US) tax law requirements. Subject to certain exceptions, Notes may not be offered, sold or, in the case of Bearer Notes, delivered within the US or to US persons.
Neither this Base Prospectus nor any Final Terms constitutes an offer or an invitation to subscribe for or purchase any Notes and should not be considered as a recommendation by the Issuer, the Dealers or any of them that any recipient of this Base Prospectus or any Final Terms should subscribe for or purchase any Notes. Each recipient of this Base Prospectus or any Final Terms or any other information supplied in connection with the Programme or the issue of any Notes shall be taken to have made its own investigation and appraisal of the condition (financial or otherwise) of the Issuer.
The Notes may not be suitable 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: 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 Base Prospectus or any applicable supplement; 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; have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes, including Notes with principal or interest payable in one or more currencies, or where the currency for principal or interest payments is different from the potential investor's currency; understand thoroughly the terms of the Notes and be familiar with the behaviour of any relevant indices and financial markets; and 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.
The maximum aggregate principal amount outstanding at any one time of Notes under the Programme and notes under the Issuer's SEK 15,000,000,000 Swedish medium term note programme is €3,000,000,000 (or its equivalent in other currencies). The maximum aggregate principal amount of Notes which may be outstanding at any one time under the Programme may be increased from time to time, subject to compliance with the relevant provisions of the Dealer Agreement as defined under "Subscription and Sale".
In this Base Prospectus, unless otherwise specified, references to a Member State are references to a Member State of the European Economic Area, references to Sweden are to the Kingdom of Sweden, references to US\$, US dollars or dollars are to United States dollars, references to €, EUR or euro are to the single currency introduced at the start of the third stage of European Economic and Monetary Union, and as defined in Article 2 of Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro, as amended, references to SEK or Swedish kronor are to the lawful currency of Sweden and references to Renminbi, RMB, Chinese Yuan Renminbi or CNY means the lawful currency of the People's Republic of China (excluding the Hong Kong Special Administrative Region of the People's Republic of China, the Macau Special Administrative Region of the People's Republic of China and Taiwan) (the PRC).
Certain figures included in this Base Prospectus have been subject to rounding adjustments; accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them.
This Base Prospectus has been prepared on the basis that any offer of Notes in any Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State) will be made pursuant to an exemption under the Prospectus Directive, as implemented in that Relevant Member State, from the requirement to publish a prospectus for offers of Notes. Accordingly any person making or intending to make an offer in that Relevant Member State of Notes which are the subject of an offering contemplated in this Base Prospectus as completed by the Final Terms or a Drawdown Prospectus in relation to the offer of those Notes may only do so in circumstances in which no obligation arises for the Issuer or the Dealers to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such offer. Neither the Issuer nor the Dealers have authorised, nor do they authorise, the making of any offer of Notes in circumstances in which an obligation arises for the Issuer or the Dealers to publish or supplement a prospectus for such offer.
In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) appointed as stabilisation manager(s) (the Stabilisation Manager(s)) (or persons acting on behalf of any Stabilisation Manager(s)) 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 Stabilisation Manager(s) (or person(s) acting on behalf of any Stabilisation Manager(s)) in accordance with all other applicable laws and rules.
This overview must be read as an introduction to this Base Prospectus and any decision to invest in the Notes should be based on a consideration of the Base Prospectus as a whole, including any information incorporated by reference.
Words and expressions defined in the "Terms and Conditions of the Notes" below or elsewhere in this Base Prospectus have the same meanings in this overview.
| Issuer: | Sandvik AB (publ). |
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| Group: | Sandvik AB (publ) and its subsidiaries. |
| Risk Factors: | Investing in Notes issued under the Programme involves certain risks. The principal risk factors that may affect the ability of the Issuer to fulfil its obligations under the Notes are discussed under "Risk Factors" below. |
| Arranger: | Deutsche Bank AG, London Branch. |
| Dealers: | Citigroup Global Markets Limited, Danske Bank A/S, Deutsche Bank AG, London Branch, HSBC Bank plc, J.P. Morgan Securities plc, MUFG Securities EMEA plc, Nordea Bank Danmark A/S, Skandinaviska Enskilda Banken AB (publ), Société Générale, Standard Chartered Bank, Svenska Handelsbanken AB (publ), Swedbank AB (publ), The Royal Bank of Scotland plc (trading as NatWest Markets) and any other Dealer appointed from time to time by the Issuer either generally in respect of the Programme or in relation to a particular Tranche of Notes. |
| Fiscal Agent: | Citibank N.A., London Branch. |
| Swedish Issuing Agent: | For notes registered in Sweden (the Swedish Registered Notes), an account operator specifically appointed by the Issuer to assist in connection with the issue of Swedish Registered Notes. |
| Exempt Notes: | The Issuer may agree with any Dealer that Exempt Notes may be issued in a form not contemplated by the Conditions, in which event, the relevant provisions will be included in the relevant Pricing Supplement. |
| Final Terms or Drawdown Prospectus: |
Notes issued under the Programme may be issued either (a) pursuant to this Base Prospectus and associated Final Terms or (b) pursuant to a Drawdown Prospectus. The terms and conditions applicable to any particular Tranche of Notes will be the Conditions as completed by the relevant Final Terms or, as supplemented, amended and/or replaced to the extent described in the relevant Drawdown Prospectus. |
| Listing and Trading: | Application has been made for Notes (other than Exempt Notes) issued under the Programme to be admitted to the Official List and admitted to trading on the Regulated Market. |
| The Programme provides that Exempt Notes may be issued on the basis that they will not be admitted to listing, trading and/or quotation by any competent authority, stock exchange and/or quotation system or that they may be admitted to listing, trading and/or quotation by such other or further competent authorities, stock exchanges and/or quotation systems (provided that such exchange or quotation system is not a regulated market for the purposes of the Markets in Financial Instruments Directive) as may be agreed between the Issuer and the relevant purchaser(s) in |
relation to such issue.
| Clearing Systems: | Euroclear Bank SA/NV (Euroclear) and/or Clearstream Banking, S.A. (Clearstream, Luxembourg, (together with Euroclear, the ICSDs) (or in relation to Swedish Registered Notes, the Swedish Central Securities Depository & Clearing Organisation, Euroclear Sweden AB (Euroclear Sweden)) and/or, in relation to any Tranche of Notes, any other clearing system as may be specified in |
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| the relevant Final Terms. |
Initial Programme Amount: The maximum aggregate principal amount outstanding at any one time of Notes under the Programme (when aggregated with the amounts of notes outstanding under the Issuer's SEK 15,000,000,000 Swedish medium term note programme) is €3,000,000,000 (or its equivalent in other currencies).
Issuance in Series: Notes will be issued in Series. Each Series may comprise one or more Tranches issued on different issue dates. The Notes of each Series will all be subject to identical terms, except that the issue date and the amount of the first payment of interest may be different in respect of different Tranches. For the avoidance of doubt, Swedish Registered Notes can only be issued in one type of denomination for the same Series.
Forms of Notes: Notes may be issued in bearer form (Bearer Notes), in registered form (Registered Notes) or in Swedish registered form in accordance with the Swedish Financial Instruments Accounts Act (Sw. lag (1998:1479) om kontoföring av finansiella instrument) as amended (the SFIA Act).
Each Tranche of Bearer Notes will initially be in the form of either a temporary global note (a Temporary Global Note) or a permanent global note (a Permanent Global Note) in each case as specified in the relevant Final Terms. Each Temporary and Permanent Global Note (each, a Global Note), which is not intended to be issued in new global note form (a Classic Global Note or CGN) as specified in the relevant Final Terms will be deposited on or around the relevant issue date with a depositary or a common depositary for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system, and each Global Note which is intended to be issued in new global note form (a New Global Note or NGN) as specified in the relevant Final Terms will be deposited on or around the relevant issue date with a common safekeeper for Euroclear and/or Clearstream, Luxembourg. Each Temporary Global Note will be exchangeable for a Permanent Global Note or, if so specified in the relevant Final Terms, for Bearer Notes in definitive form (Definitive Notes). If the TEFRA D Rules (as defined below) are specified in the relevant Final Terms, certification as to non-US beneficial ownership will be a condition precedent to any exchange of an interest in a Temporary Global Note or receipt of any payment of interest in respect of a Temporary Global Note. Each Permanent Global Note will be exchangeable for Definitive Notes in accordance with its terms. Definitive Notes will, if interestbearing, have related interest coupons (Coupons) attached and, if appropriate, a talon for further Coupons (Talon).
Each Tranche of Registered Notes will be in the form of either individual Note Certificates in registered form (Individual Note Certificates) or a global note in registered form (Global Registered Note), in each case as specified in the relevant Final Terms. Each Tranche of Notes represented by a Global Registered
| Note will either be: (a) in the case of a Note which is not to be held under the new safekeeping structure (the New Safekeeping Structure or NSS), registered in the name of a common depositary (or its nominee) for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system and the relevant Global Registered Note will be deposited on or about the issue date with the common depositary; or (b) in the case of a Note to be held under the NSS, be registered in the name of a common safekeeper (or its nominee) for Euroclear and/or Clearstream, Luxembourg and the relevant Global Registered Note will be deposited on or about the issue date with the common safekeeper for Euroclear and/or Clearstream, Luxembourg. |
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| Any reference herein to Euroclear and Clearstream, Luxembourg shall, whenever the context so permits, be deemed to include a reference to any successor operator and/or successor clearing system and any additional or alternative clearing system specified in the relevant Final Terms. |
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| Each Tranche of Swedish Registered Notes will be issued in uncertificated and dematerialised book entry form, with the legal title thereto being evidenced by book entries in the register for such Swedish Registered Notes kept by Euroclear Sweden on behalf of the Issuer. Title to Swedish Registered Notes will not be evidenced by any physical note or document of title. For the avoidance of doubt, the TEFRA C and TEFRA D Rules will not be applicable to Swedish Registered Notes. Definitive Notes will not be issued in respect of any Swedish Registered Notes. |
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| Currencies: | Notes may be denominated in euro, US dollars, Swedish kronor or Renminbi or in any other currency or currencies, subject to compliance with all applicable legal and/or regulatory and/or central bank requirements. |
| Status of the Notes: | The Notes constitute direct, unsubordinated and unconditional obligations of the Issuer which will at all times rank pari passu among themselves and at least pari passu with all other present and future unsecured obligations of the Issuer, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application. |
| Issue Price: | Notes may be issued at any price and on a fully paid basis or, in the case of Exempt Notes, on a fully or partly paid basis. The price and amount of Notes to be issued under the Programme will be determined by the Issuer and the relevant Dealer(s) at the time of issue in accordance with prevailing market conditions. |
| Maturities: | Any maturity subject, in relation to specific currencies, to compliance with all applicable legal and/or regulatory and/or central bank requirements. |
| Where Notes have a maturity of less than one year and either (a) the issue proceeds are received by the Issuer in the United Kingdom or (b) the activity of issuing the Notes is carried on from an establishment maintained by the Issuer in the United Kingdom, such Notes must: (i) have a minimum redemption value of £100,000 (or its equivalent in other currencies) and be issued only to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or 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; or (ii) be |
| issued in other circumstances which do not constitute a contravention of section 19 of the Financial Services and Markets Act 2000 (the FSMA) by the Issuer. |
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| Redemption: | The Notes will be redeemable at the final redemption amount specified in the Final Terms (the Final Redemption Amount) on their stated maturity. Exempt Notes may also be redeemable in two or more instalments on such dates and in such manner as may be specified in the relevant Pricing Supplement. |
| Optional Redemption: | Notes may be redeemed before their stated maturity at the option of the Issuer (either in whole or in part) and/or the holders of the Notes (the Noteholders) to the extent (if at all) specified in the relevant Final Terms. |
| Tax Redemption: | Except as described in "Optional Redemption" above, early redemption will only be permitted for tax reasons as described in Condition 10(b) (Redemption and Purchase – Redemption for tax reasons). |
| Interest: | Notes may be interest-bearing or non-interest bearing. Interest (if any) may accrue at a fixed rate or a floating rate, as specified in the relevant Final Terms. In the case of Exempt Notes, the relevant Pricing Supplement may specify whether a different interest basis applies. |
| Denominations: | No Notes may be issued under the Programme which (a) have a minimum denomination of less than €100,000 (or the equivalent in another currency), or (b) carry the right to acquire shares (or transferable securities equivalent to shares) issued by the Issuer or by any entity to whose group the Issuer belongs. Subject thereto, Notes will be issued in such denominations as may be specified in the relevant Final Terms, subject to compliance with all applicable legal and/or regulatory and/or central bank requirements. |
| Negative Pledge: | The Notes will have the benefit of a negative pledge as described in Condition 5 (Negative Pledge). |
| Cross Default: | The Notes will have the benefit of a cross default as described in Condition 14 (Events of Default). |
| Taxation: | All payments in respect of Notes will be made free and clear of withholding taxes of the relevant Tax Jurisdiction unless the withholding is required by law. In that event, the Issuer will (subject as provided in Condition 13 (Taxation)) pay such additional amounts as will result in the Noteholders receiving such amounts as they would have received in respect of such Notes had no such withholding been required. |
| Governing Law: | English law. Swedish Registered Notes must comply with the SFIA Act. |
| Enforcement of Notes in Global Form: |
In the case of Global Notes, individual investors' rights against the Issuer will be governed by a deed of covenant dated 16 December 2016 (the Deed of Covenant), a copy of which will be available for inspection at the specified office of the Fiscal Agent. |
| Ratings: | As at the date of this Base Prospectus, the senior unsecured debt securities of the Issuer have been assigned a rating of "BBB" by S&P and the Programme has been assigned a rating of "BBB" by S&P. |
Tranches of Notes issued under the Programme will be rated or unrated. Where a Tranche of Notes is rated, such rating will not necessarily be the same as the rating(s) described above or the rating(s) assigned to Notes already issued. Where a Tranche of Notes is rated, the applicable rating(s) will be specified in the relevant Final Terms or Drawdown Prospectus (as the case may be).
Selling Restrictions: For a description of certain restrictions on offers, sales and deliveries of Notes and on the distribution of offering material in the US, the European Economic Area (including the United Kingdom and Sweden), Japan, the PRC, Hong Kong and Singapore, see "Subscription and Sale" below.
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 and are not exhaustive, 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 Base Prospectus and reach their own views prior to making any investment decision.
The Group's long-term growth and profitability is dependent on its ability to develop and successfully launch and market new products. The Group's revenues and market share may suffer if it is unable to introduce new products successfully in a timely fashion or if any new or enhanced products or services are introduced by its competitors that its customers find more advanced and/or better suitable for their needs. If the Group is not able to keep pace with global product development and technological advances, including also shifts in technology in the markets in which it operates, or to meet customer demands, this could have a material adverse effect on the Group's business, results of operations and financial condition.
The markets for the Group's products are highly competitive in terms of pricing, product design and service quality, the timing of development and introduction of new products, customer service and terms of financing. The Group faces intense competition from significant global competitors and to a lesser extent small regional companies. If it does not compete successfully in all its business areas and does not anticipate and respond to changes in evolving market demands, including the demand for new products, it will not be able to compete successfully in its markets, which could have a material adverse effect on the Group's business, results of operations and financial condition.
The planning and implementation of the Group's business operations seeks to take into account market opportunities and opportunities to acquire new businesses. Any failure in the Group's business development could have a material adverse effect on the Group's business, results of operations and financial condition.
The demand for the Group's products and services is affected by changes in customers' investment plans and production levels. Customers' investment plans could change materially if the economic situation in an industry, country or region changes. In addition, changes in the political situation in a region or country or political decisions affecting an industry or country could also materially impact on investments in equipment. Also, the replacement needs of existing production capacity, new competing technologies, competitive pressures and other economic factors in its customer industries could also have a material adverse effect on the Group's business, financial condition and results of operations. Although the Issuer believes that the Group's sales are well diversified with customers in many industries and operations in more than 130 countries, the Group may be affected by a downturn in the general economic situation in the markets in which it operates.
The Group has a global manufacturing strategy based on manufacturing core components complemented with sourcing of other components from sub-suppliers. The core component manufacturing is concentrated into few locations per region and if these facilities are destroyed or closed for any reason or the equipment in the facilities is significantly damaged, or there are severe interruptions in its productions, the Group is likely to face setbacks in its ability to manufacture and distribute its products. Such circumstances, to the extent it is unable to find an alternative manufacturing and production facility or repair the damaged facilities or damaged equipment in a timely and cost-efficient manner, could have a material adverse effect on the Group's business, results of operations and financial condition. In addition, the availability of non-core components is dependent on the sub-suppliers and if they have interruptions or if they do not have enough capacity, this could have an adverse effect on the Group's business and results of operations.
Through its comprehensive international operations, the Issuer is exposed to currency, interest and financing risks.
Foreign-exchange movements affect the Issuer's earnings and competitive situation in different ways:
Changes in market interest rates may affect the Group's net financial items adversely. The speed with which a change in interest rate affects net financial items depends on the fixed-interest period of the assets or loans. Interest risk arises in two ways:
Liquidity and refinancing risk is defined as the risk that financing possibilities will be limited when loans must be refinanced, and that payment commitments cannot be met as a result of insufficient liquidity. If refinancing of short-term borrowings and the guaranteed credit facilities is not possible when they fall due this may have a material adverse effect on the Group's business, results of operations and financial condition.
The Group's financial transactions give rise to credit risk in relation to financial counterparties. Credit risk is defined as risk of losses if the counterparty to an agreement does not fulfil its commitments. The Issuer has entered into agreements with the banks that it has outstanding derivatives contract with on such matters as the right to offset receivables and liabilities that arise from these financial transactions, socalled ISDA agreements. This means that the Issuer's counterparty exposure to the financial sector is limited to the unrealised positive results that arise in derivative agreements. On the other hand, Group companies are exposed to the credit risk associated with outstanding trade receivables from ongoing sales. Credit risk is diversified over a large number of customers in all business areas and satisfactorily reflects the spread of sales. If weak financial situations lead to customers not paying their payables to the Group this may have a material adverse effect on the Group's business, results of operations and financial condition.
The Group's operations give rise to risks due to changes in the price of market-quoted raw materials, mainly nickel and of electricity. The price can vary significantly during a year and the price risk associated with these is partially hedged through the signing of financial contracts. If the market does not permit a transfer of the effects of changing raw-material prices into the end-price of the products this may have a material adverse effect on the Group's business, results of operations and financial condition.
The Group most often distributes its products and services directly to the end customers, but also through distributors. A significant part of physical distribution of products is concentrated to a number of distribution centres and the provision of services depends on the efficiency of the Group's aftermarket organisation. Should the Group's distribution centres, distributors or other aftermarket organisations be subjected to disruptions its sales may be affected, which in turn could have a material adverse effect on the Group's revenues and results of operations.
The success of the Group's business depends in large part on the ability to attract and retain key management and operating personnel. The Group's future growth and ultimately its success depends on its ability to hire and retain qualified personnel with the level of expertise, knowledge of its products or industry necessary to conduct its operations. Given that the Group constantly needs to introduce new or enhanced products, it is important that it is able to attract people with sufficient expertise in its product areas, particularly its research and development functions. In addition the Group continuously monitors its need for people or to outsource certain parts of its non-core manufacturing in order to make sure it can fulfil its customers' orders. If the Group fails to monitor its need for employees or if it fails to continue to attract and retain highly qualified management and other skilled employees on acceptable terms it may not be able to sustain or further develop parts of its business which may have a material adverse effect on the Group's business, results of operations and financial condition.
Changes in regulatory requirements, tariffs and other trade barriers, price or exchange controls or other governmental policies in the countries in which it conducts business may result in risks, such as (i) effective legal redress in the courts of such jurisdictions, whether in respect of a breach of law or regulation or in an ownership dispute, being more difficult to obtain, (ii) a higher degree of discretion on the part of governmental authorities, (iii) the lack of judicial or administrative guidance on interpreting applicable rules and regulations, (iv) inconsistencies or conflicts between and within various laws, regulations and decrees, or (v) relative inexperience of the judiciary and courts in such matters. Also, the protection of intellectual property rights may be less developed and less strictly enforced in these countries. There can be no assurance that the Group's licences, licence applications or other legal arrangements of the effectiveness of the enforcement thereof will not be adversely affected by the actions of government authorities or others. In addition, the uncertainty of the legal environment in certain regions could limit the Group's ability to enforce its rights under contracts or otherwise.
The Group also has extensive operations in emerging markets such as certain countries in South America, Africa and Asia. Its business operations in these countries may be subject to various political, economic and social conditions which include nationalisation of assets, social, political or economic instability, volatility in currency exchange rates and in gross domestic product or restrictions on repatriation of profits and transfers of cash which all could have a material adverse effect on the Group's business, results of operations and financial condition. Operations in emerging markets may present risks that are not encountered in countries with well-established economic and political systems, including economic instability, which could make it difficult for the Group to anticipate future business conditions in these markets, which may have a material adverse effect on the Group's business, results of operations and financial condition.
On 23 June 2016, the United Kingdom held a referendum to decide on the United Kingdom's membership of the European Union (EU). The UK vote was to leave the EU. There are a number of uncertainties in connection with the future of the United Kingdom and its relationship with the EU. Until the terms and timing of the United Kingdom's exit from the EU are clearer, it is not possible to determine the impact that the referendum, the United Kingdom's departure from the EU and/or any related matters may have on the business of the Issuer. Further, no assurance can be given that such matters would not adversely affect the market value and/or the liquidity of the Notes in the secondary market.
Like most industrial companies, the Group affects the environment in its production processes, through the use of natural resources, and the generation of emissions and wastes, in the distribution of, as well as in the use and final disposal of its products. Compliance with environmental requirements is a significant factor in its operations, and substantial resources are required to maintain compliance with applicable environmental laws and regulations and to manage environmental risks. The Group is subject to a variety of environmental laws and regulations, particularly in relation to air emissions, waste management and the protection of natural resources. These laws and regulations, the violations of which can lead to substantial fines, injunctions or criminal penalties, have generally become stricter in recent years and may in the future become more stringent and the cost of complying with future changes may be substantial. In addition, the Group could also become subject to liabilities and claims relating to personal injury (including exposure to substances used in its production), property damage or damage to natural resources.
Although the Issuer believes that the Group is in material compliance with applicable environmental laws, substantial environmental costs and liabilities are inherent in industrial operations and there can be no assurances that substantial costs and liabilities will not be incurred in the future or that the adoption of increasingly strict environmental laws, regulations and enforcement policies could not result in increased costs and liabilities in the future. Any such costs and/or liabilities could have a material adverse effect on the Group's business, results of operations and financial condition.
The Group's operations in research and development, production, distribution, marketing and administration are dependent on a large number of complex IT-systems and solutions. Routines and procedures are implemented to protect hardware, software and information from being damaged, manipulated, lost or misused. A major break-down of these systems with loss of information may have a material adverse effect on the Group's business, results of operations and financial condition.
In addition to organically growing the Group's business, the Group continuously evaluates potential value added acquisitions in the core areas of its business to complement its existing product portfolio, to gain access to new markets and to create synergies. The process of co-ordinating and integrating acquired businesses with the Group's own business will continue to require managerial and financial resources. In addition, the integration process could also cause the interruption to, or a loss of momentum in, the activities of its business, which could have a material adverse effect on the Group's business, financial condition and results of operations.
The management of integration of the businesses, systems and culture of any acquired business requires, among other things, the continued development of the acquired businesses financial and management controls, including the integration of information systems and structure, the integration of product offerings and customer base and the training of new personnel, all of which could disrupt and place a strain on the Group's management resources as well as require significant expenditure. Any significant diversion of the Issuer's executive management attention and other resources or any major difficulties encountered in the integration of an acquired business could have a material adverse effect on the Group's business, financial condition and results of operations.
In agreeing to acquire new businesses, the Issuer makes certain assumptions and determinations on, among other things, future sales and need for capital expenditures, based on its investigation of the respective businesses and other information then available. While the Issuer believes it is well positioned to assess the opportunities and risks associated with these acquisitions, the Issuer cannot provide assurance that its assumptions and determinations will prove to be correct and liabilities, contingencies or losses, if realised, could have a material adverse effect on the Group's business, results of operations and financial condition.
The protection of the Group's intellectual property is important to its business. The Issuer cannot give any assurance that its competitors do not seek to utilise its patents, trademarks and logos when it markets its products thereby infringing or challenging its intellectual property rights. In addition, existing laws of certain countries in which the Group conducts its business may offer only limited protection of its intellectual property rights, if at all. If the Group's intellectual property and in particular its registered patents and trademarks cannot be protected, for whatever reason, the Group's business could be materially and adversely affected.
The Issuer has the customary insurance programmes with respect to the Group's property and product liability risks. As a natural part of the Issuer's different activities, measures to limit the effects of damages are continually taken, often in co-operation with the Issuer's external insurance advisors. In such context, standards for desired safeguard levels are established in order to reduce the probability of material damages and to guarantee deliveries to the customers. While the Group holds property, including business interruption, and product liability insurance in amounts the Issuer believes to be appropriate, there can be no assurances that the Group will be able to fully recover such amounts or that recovered amounts will be sufficient to cover the Group's losses.
The Issuer is party to litigation related to its business operations in the ordinary course of business. The Issuer is also party to legal and administrative proceedings related to its responsibility for products, environment, health and safety. There is currently no litigation in relation to the Group which may have a significant effect on the financial position or profitability of the Group. However, there can be no assurance that the Group will not be subject to legal disputes in the future which may have an adverse effect on the Group's business, financial condition and results of operations.
The Issuer has comprehensive pension plans for its employees in all countries in which it operates. The pension provisions vary depending on legislation and local agreements. The most comprehensive agreements are found in Finland, Germany, Sweden, Canada the United Kingdom and the US. Calculating pension and similar obligations require management to make assumptions on discount rates, expected return on plan assets and rate of compensation increase. Actual results could differ from the assumptions made. Additionally, the Issuer may be required to contribute additional amounts to its pension schemes which could have a material adverse effect on the Group's business, results of operations and financial condition.
Many of the Group's employees are covered by collective bargaining agreements. The Issuer cannot provide any assurance that it will not encounter strikes or other disturbances occasioned by its unionised labour force, or that, upon the expiration of existing agreements; it will be able to reach new collective bargaining agreements on satisfactory terms or without work stoppages, strikes or similar industrial actions.
Non-satisfactory terms on any bargaining agreements could cause the Group's labour costs to increase, which would affect its profit margins negatively. In addition, it is required to consult and seek the advice of its employee works' council in respect of a broad range of matters, which could delay or prevent the completion of certain corporate transactions. While the Group has not experienced any major work stoppages in recent years and expect its current process to proceed amicably, the Issuer cannot provide any assurance that it will not experience lengthier consultations or even strikes, work stoppages or other industrial actions in the future. Any industrial action could disrupt its operations, possibly for a significant period of time, and result in increased wages and benefits or otherwise have a material adverse effect on the Group's business, results of operations and financial condition.
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:
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.
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 terms of the securities, the greater the price volatility as compared to conventional interest-bearing securities with comparable maturities.
Notes that bear interest at rates based on LIBOR and/or EURIBOR may be adversely affected by a change in inter-bank lending rate reporting practices or the method in which LIBOR and/or EURIBOR is determined
Floating Rate Notes that bear interest at rates based on the London Interbank Offered Rate (LIBOR) and/or the Euro Interbank Offered Rate (EURIBOR) may be adversely affected by a change in inter-bank lending rate reporting practices or the method in which LIBOR and/or EURIBOR is determined.
Regulators and law enforcement agencies from a number of governments have been conducting investigations relating to LIBOR across a range of maturities and currencies, and certain financial institutions that were member banks surveyed by the British Bankers' Association (BBA) in setting daily LIBOR have entered into agreements with the US Department of Justice, the US Commodity Futures Trading Commission and/or the Financial Conduct Authority in order to resolve the investigations.
In addition, in September 2012, the United Kingdom government published the results of its review of LIBOR, which is referred to as the "Wheatley Review". The Wheatley Review made a number of recommendations for changes with respect to LIBOR, including the introduction of statutory regulation of LIBOR, the transfer of responsibility for LIBOR from the BBA to an independent administrator, changes to the method of compilation of lending rates, new regulatory oversight and enforcement mechanisms for rate-setting and the corroboration of LIBOR, as far as possible, by transactional data. Based on the Wheatley Review, on 25 March 2013, final rules for the regulation and supervision of LIBOR by the FCA were published (the FCA Rules). In particular, the FCA Rules include requirements that (a) an independent LIBOR administrator monitor and survey LIBOR submissions to identify breaches of practice standards and/or potentially manipulative behavior, and (b) firms submitting data to LIBOR establish and maintain a clear conflicts of interest policy and appropriate systems and controls. The FCA Rules took effect on 2 April 2013.
At European level, a new regulation on indices used as benchmarks in financial instruments and financial contracts has been adopted by legislators (the Benchmarks Regulation). The new Benchmarks Regulation was published in the Official Journal of the European Union on 29 June 2016, entered into force on 30 June 2016 and is applicable from 1 January 2018 (though certain provisions are applicable from 30 June 2016). The Benchmarks Regulation will apply principally to "administrators" and, in a more limited way, to "contributors" and "regulated users" of benchmarks. The Benchmarks Regulation aims to improve governance and controls over the benchmark process, improve the quality of input data and avoid conflicts of interest. The Benchmarks Regulation will supersede a number of FCA rules and could impact on the administration of LIBOR and EURIBOR. For example, the administration of these benchmarks must be carried out by an authorised entity, and the methodology or other terms of the benchmarks might be changed in order to comply with the new Benchmarks Regulation. Such changes could have the effect of reducing or increasing the rate or level, or affecting the volatility of the rate or level of the relevant benchmark.
On 1 February 2014, following a transitional period, ICE Benchmark Administration Limited (ICE) succeeded the BBA as administrator of LIBOR. Since being appointed as the administrator of LIBOR, ICE has established a number of reforms including development of a new oversight and governance framework, establishment of a new code of conduct as required by the FCA's Market Conduct Sourcebook, establishment of a new whistle blowing procedure and new surveillance systems. In October 2014, ICE published a position paper for consultation in relation to the evolution of LIBOR. Its proposals included expanding acceptable transaction types to reflect changes in activity in the interbank market, amendments to the type of entity that should be regarded as eligible counterparty types and defining the role of expert judgment in the LIBOR calculation process. On 31 July 2015 ICE published its second position paper which sets out in more detail the evolutionary approach and timeline for LIBOR and in particular, describes a number of parameters for a more unified and prescriptive transaction-based methodology. The key aspect of LIBOR's evolution remains the establishment of a waterfall of calculation methodologies to ensure the continued availability of LIBOR rates and the consistency and reliability of data. The position paper specifies that to further anchor LIBOR in transaction data, the underlying liquidity pool, which is currently based on the inter-bank unsecured lending market, should be expanded. A number of proposals to improve liquidity and therefore increase available transaction data are included in the position paper, including extending the eligible counterparty types, funding centres, transaction types and the transaction timing and window.
Outside of the United Kingdom, it is anticipated that a reform of EURIBOR will be implemented also, which may (but will not necessarily) be in a similar fashion. Accordingly, EURIBOR calculation and publication could be altered, suspended or discontinued.
The European Money Markets Institute (formerly Euribor-EBF) (the EMMI) has continued in its role as administrator of EURIBOR but has also undertaken a number of reforms in relation to its governance and technical framework since January 2013 pursuant to recommendations by the European Securities and Markets Authority (ESMA) and the European Banking Authority. The EMMI published a roadmap to discuss transaction-based EURIBOR and pre-live verification program guidelines on 21 June 2016.
It is not possible to predict the further effect of the FCA Rules, the Benchmarks Regulation, any changes in the methods pursuant to which United Kingdom LIBOR and/or EURIBOR rates are determined or any other reforms to or general increased regulatory scrutiny of LIBOR and/or EURIBOR that may be enacted or undertaken in the United Kingdom, the EU and elsewhere, each of which may adversely affect the trading market for LIBOR-based, and/or EURIBOR-based securities. In addition, such factors and any changes announced by the FCA, ICE, the EMMI, the European Commission or any other successor governance or oversight body, or future changes adopted by such body, in the method pursuant to which LIBOR and/or EURIBOR rates are determined may result in, among other things, a sudden or prolonged increase or decrease in the reported LIBOR and/or EURIBOR rates, a delay in the publication of any such benchmark rates, trigger changes in the rules or methodologies in certain benchmarks discouraging market participants from continuing to administer or participate in certain benchmarks and, in certain situations, could result in a benchmark rate no longer being determined and published. Accordingly, in respect of a Note referencing LIBOR and/or EURIBOR, any such changes in applicable regulation and reform could have a material adverse effect on the value of and return on such a Note (including potential rates of interest thereon).
There are particular risks associated with an investment in certain types of Exempt Notes. In particular, an investor might receive less interest than expected or no interest in respect of such Exempt Notes and may lose a portion of or the entire principal amount invested by it.
The Issuer may issue Exempt Notes with principal or interest determined by reference to an index or formula, to changes in the prices of securities or commodities, to movements in currency exchange rates or other factors (each, a Relevant Factor). In addition, the Issuer may issue Exempt Notes with principal or interest payable in one or more currencies which may be different from the currency in which the Exempt Notes are denominated. Potential investors should be aware that:
The historical performance of an index or other Relevant Factor should not be viewed as an indication of the future performance of such Relevant Factor during the term of any Exempt Notes. Accordingly, each potential investor should consult its own financial and legal advisers about the risk entailed by an investment in any Exempt Notes linked to a Relevant Factor and the suitability of such Exempt Notes in light of its particular circumstances.
Exempt Notes with variable interest rates can be volatile investments. If they are structured to include multipliers or other leverage factors, or caps or floors, or any combination of those features or other similar related features, their market values may be even more volatile than those for securities that do not include those features.
Set out below is a brief description of certain risks relating to the Notes generally:
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 Conditions of the Notes are based on English law in effect as at the date of this Base Prospectus. No assurance can be given as to the impact of any possible judicial decision or change to English law or administrative practice after the date of this Base Prospectus and any such change could materially adversely impact the value of any Notes affected by it.
Whilst the Notes are in global form and held within Euroclear or Clearstream, Luxembourg in all but the most remote circumstances, it is not expected that the new reporting regime and potential withholding tax imposed by sections 1471 through 1474 of the US Internal Revenue Code, as amended (FATCA) will affect the amount of any payment received by the ICSDs (See "Taxation – US Foreign Account Tax Compliance Act"). 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) and 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 Notes are discharged once it has paid the common depositary or common safekeeper for the ICSDs (as bearer and registered holders of the Notes, respectively) and the Issuer has therefore no responsibility for any amount thereafter transmitted through the ICSDs and custodians or intermediaries. Further, foreign financial institutions in a jurisdiction which has entered into an intergovernmental agreement with the US (an IGA) are generally not expected to be required to withhold under FATCA or an IGA (or any law implementing an IGA) from payments they make.
In relation to any issue of 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 Note in respect of such holding (should definitive Notes be printed) and would need to purchase a principal amount of Notes such that its holding amounts to a Specified Denomination.
If definitive Notes are issued, holders should be aware that definitive Notes which have a denomination that is not an integral multiple of the minimum Specified Denomination may be illiquid and difficult to trade.
If at any time the Issuer is unable to maintain any listing, trading and/or quotation of Notes or it is impracticable or unduly onerous to maintain such admission to listing, trading and/or quotation or as a result of legislation relating to publication of financial information, the Issuer could be required to publish financial information either more regularly than, or according to accounting principles which are materially different from that, it would otherwise be subject to or use, respectively, the Issuer may, using its best endeavours, seek an alternative admission to listing, trading and/or quotation of such Notes by another listing authority, securities exchange and/or quotation system that it deems appropriate (including a market which is not a regulated market for the purposes of the Markets in Financial Instruments Directive or a market outside of the EEA). However, if such alternative listing is not available or is unduly onerous, the Notes may be delisted and an alternative listing may not be obtained.
Although there is no assurance as to the liquidity of any Notes as a result of the admission to trading on a regulated market for the purposes of the Markets in Financial Instruments Directive, delisting such Notes may have a material effect on the ability of an investor to (a) continue to hold such Notes, (b) resell the Notes in the secondary market and may affect the market value of the Notes or (c) use them as eligible collateral.
Notes denominated in RMB (RMB Notes) may be issued under the Programme. RMB Notes contain particular risks for potential investors.
Renminbi is not freely convertible and there are significant restrictions on the remittance of Renminbi into and out of the PRC which may adversely affect the liquidity of the Notes.
Renminbi is not freely convertible at present. The PRC government continues to regulate conversion between Renminbi and foreign currencies, including the euro. However, there has been significant reduction in control by the PRC government in recent years, particularly over trade transactions involving import and export of goods and services as well as other frequent routine foreign exchange transactions. These transactions are known as current account items.
On the other hand, remittance of Renminbi by foreign investors into the PRC for the settlement of capital account items, such as capital contributions, is generally only permitted upon obtaining specific approvals from, or completing specific registrations or filings with, the relevant authorities on a case-by-case basis and is subject to a strict monitoring system. Regulations in the PRC on the remittance of Renminbi into the PRC for settlement of capital account items are being developed.
On 30 November 2015, the Executive Board of International Monetary Fund (the IMF) decided that effective from 1 October 2016 the Renminbi will be included in the Special Drawing Right (SDR) basket as the fifth currency, along with the US dollar, the euro, the Japanese yen and the sterling.
There is no assurance that the PRC government will continue to liberalise control over cross-border Renminbi remittances in the future, that the schemes for Renminbi cross-border utilisation will not be discontinued or that new PRC regulations will not be promulgated in the future which have the effect of restricting or eliminating the remittance of Renminbi into or outside the PRC. If the Issuer decided to remit some or all of the proceeds into the PRC in Renminbi, its ability to do so will be subject to obtaining (without guarantee) all necessary approvals from, or registration with, the relevant PRC government authorities. If the Issuer does remit some or all of the proceeds into the PRC in Renminbi and the Issuer subsequently is not able to repatriate funds outside the PRC in Renminbi, this may affect the ability of the Issuer to source Renminbi to perform its obligations under the RMB Notes.
As a result of the restrictions by the PRC government on cross-border Renminbi fund flows, the availability of Renminbi outside the PRC is limited. Whilst the People's Bank of China (the PBOC) has entered into agreements on the clearing of Renminbi business with financial institutions in a number of financial centres and cities (the Renminbi Clearing Banks), including but not limited to Hong Kong, Singapore and London and are in the process of establishing Renminbi clearing and settlement mechanisms in several other jurisdictions (the Settlement Arrangements), the current size of Renminbi denominated financial assets outside the PRC remains limited.
There are restrictions imposed by the PBOC on Renminbi business participating banks in respect of crossborder Renminbi settlement, such as those relating to direct transactions with PRC enterprises. Furthermore, Renminbi business participating banks do not have direct Renminbi liquidity support from the PBOC. The Renminbi Clearing Banks only have access to onshore liquidity support from the PBOC for the purpose of squaring open positions of participating banks for limited types of transactions and are not obliged to square for participating banks any open positions resulting from other foreign exchange transactions or conversion services. In such cases, the participating banks will need to source Renminbi from outside the PRC to square such open positions.
Although it is expected that the offshore Renminbi market will continue to grow in depth and size, its growth is subject to many constraints as a result of PRC laws and regulations on foreign exchange. There is no assurance that new PRC regulations will not be promulgated or the Settlement Arrangements will not be terminated or amended in the future which will have the effect of restricting availability of Renminbi offshore. The limited availability of Renminbi outside the PRC may affect the liquidity of its RMB Notes. To the extent the Issuer is required to source Renminbi in the offshore market to service its RMB Notes, there is no assurance that the Issuer will be able to source such Renminbi on satisfactory terms, if at all.
The value of the Renminbi against the euro and other foreign currencies fluctuates from time to time and is affected by changes in the PRC and international political and economic conditions as well as many other factors. Recently, the PBOC implemented changes to the way it calculates the Renminbi's daily midpoint against the US dollar to take into account market-maker quotes before announcing such daily midpoint. This change and others that may be implemented, may increase the volatility in the value of the Renminbi against other currencies. Except in the limited circumstances as described in the Conditions, the Issuer will make all payments of interest and principal with respect to the RMB Notes in Renminbi. As a result, the value of these Renminbi payments in euro or other applicable foreign currency terms may vary with the changes in the prevailing exchange rates in the marketplace. If the value of Renminbi depreciates against the euro or other applicable foreign currency, the value of a Noteholder's investment in euro or other applicable foreign currency terms will have declined.
If the Issuer is not able, or it is impracticable for it, to satisfy its obligation to pay interest and principal on the RMB Notes when due, in whole or in part, in Renminbi in the relevant RMB Settlement Centre(s) as a result of Inconvertibility, Non transferability or Illiquidity, the Issuer shall be entitled, on giving not less than five nor more than 30 days' irrevocable notice to the Noteholders prior to the due date for payment, to settle any such payment, in whole or in part, in US dollars on the due date at the US Dollar Equivalent (as defined in the Conditions) of any such interest or principal amount otherwise payable in Renminbi, as the case may be. See also "Exchange rate risks and exchange controls" below.
Holders of beneficial interests in the RMB Notes may be required to provide certifications and other information (including Renminbi account information) in order to allow such holder to receive payments in Renminbi in accordance with the Renminbi clearing and settlement system for participating banks in the relevant RMB Settlement Centre(s).
All Renminbi payments to investors in respect of the RMB Notes will be made solely (i) for so long as the RMB Notes are represented by global certificates held with the common depositary or common safekeeper, as the case may be, for Euroclear and Clearstream, Luxembourg or any alternative clearing system, by transfer to a Renminbi bank account maintained in the relevant RMB Settlement Centre in accordance with prevailing rules and procedures of those clearing systems or (ii) for so long as the RMB Notes are in definitive form, by transfer to a Renminbi bank account maintained in the relevant RMB Settlement Centre in accordance with prevailing rules and regulations. Other than as described in the Conditions, the Issuer cannot be required to make payment in relation to RMB Notes by any other means (including in any other currency or by transfer to a bank account in the PRC).
Under the PRC Enterprise Income Tax Law (中華人民共和國企業所得稅法), the PRC Individual Income Tax Law (中華人民共和國個人所得稅法) and the relevant implementation rules, as amended from time to time, any gain realised on the transfer of RMB Notes by non-PRC resident enterprise holders or individual holders may be subject to PRC enterprise income tax (EIT) or PRC individual income tax (IIT) if such gain is regarded as income derived from sources within the PRC. While the PRC Enterprise Income Tax Law levies EIT at the rate of 20 per cent. of the gains derived by a non-PRC resident enterprise Noteholder from the transfer of the RMB Notes, its implementation rules have reduced the EIT rate to 10 per cent. The PRC Individual Income Tax Law levies ITT at a rate of 20 per cent. of the gains derived by a non-PRC resident individual holder from the transfer of RMB Notes.
However, there remains uncertainty as to whether the gain realised from the transfer of the RMB Notes by non-PRC resident enterprise or individual Noteholders would be treated as income derived from sources within the PRC and become subject to the EIT or IIT. This will depend on how the PRC tax authorities interpret, apply or enforce the PRC Enterprise Income Tax Law, the PRC Individual Income Tax Law and their respective implementation rules.
Therefore, if non-PRC enterprise or individual resident Noteholders are required to pay PRC income tax on gains derived from the transfer of RMB Notes, unless there is an applicable tax treaty between PRC and the jurisdiction in which such non-PRC resident enterprise or individual resides that reduces or exempts the relevant EIT or IIT, the value of their investment in the RMB Notes may be materially and adversely affected.
Set out below is a brief description of the principal market risks, including liquidity risk, exchange rate risk, interest rate risk and credit risk:
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.
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 Specified Currency or 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.
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.
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 from using a rating for regulatory purposes if such rating is not issued by a credit rating agency established in the EEA and registered under the CRA Regulation (and such registration has not been withdrawn or suspended). 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 of credit rating agencies and ratings is disclosed on the front cover of this Base Prospectus and if a Tranche of Notes is rated such rating will be disclosed in the relevant Final Terms or Drawdown Prospectus.
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.
The following information shall be deemed to be incorporated in, and to form part of, this Base Prospectus:
Copies of the documents specified above as containing information incorporated by reference in this Base Prospectus may be inspected, free of charge, at www.sandvik.com or http://www.morningstar.co.uk/uk/NSM. Any information contained in any of the documents specified above which is not incorporated by reference in this Base Prospectus is either not relevant to investors or is covered elsewhere in this Base Prospectus. Any documents themselves incorporated by reference in the documents incorporated by reference in this Base Prospectus shall not form part of this Base Prospectus.
In this section the expression "necessary information" means, in relation to any Tranche of Notes, the information necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the Issuer and of the rights attaching to the Notes. In relation to the different types of Notes which may be issued under the Programme the Issuer has endeavoured to include in this Base Prospectus all of the necessary information except for information relating to the Notes which is not known at the date of this Base Prospectus and which can only be determined at the time of an individual issue of a Tranche of Notes.
Any information relating to the Notes which is not included in this Base Prospectus and which is required in order to complete the necessary information in relation to a Tranche of Notes will be contained either in the relevant Final Terms, in a Drawdown Prospectus or, in the case of Exempt Notes, the relevant Pricing Supplement. Such information will be contained in the relevant Final Terms or in the relevant Pricing Supplement unless any of such information constitutes a significant new factor relating to the information contained in this Base Prospectus in which case such information, together with all of the other necessary information in relation to the relevant series of Notes, may be contained in a Drawdown Prospectus or, in the case of Exempt Notes, the relevant Pricing Supplement.
For a Tranche of Notes which is the subject of Final Terms or, in the case of Exempt Notes, the subject of a Pricing Supplement, those Final Terms will, for the purposes of that Tranche only, complete this Base Prospectus or, in the case of Exempt Notes, that Pricing Supplement will for the purposes of that Tranche only, supplement, amend and/or replace this Base Prospectus and must be read in conjunction with this Base Prospectus. The terms and conditions applicable to any particular Tranche of Notes which is the subject of Final Terms are the Conditions as completed by the relevant Final Terms and the terms and conditions applicable to any particular Tranche of Exempt Notes which is the subject of a Pricing Supplement are the Conditions as supplemented, amended and/or replaced by the relevant Pricing Supplement.
The terms and conditions applicable to any particular Tranche of Notes which is the subject of a Drawdown Prospectus will be the Conditions as supplemented, amended and/or replaced to the extent described in the relevant Drawdown Prospectus. In the case of a Tranche of Notes that is the subject of a Drawdown Prospectus, each reference in this Base Prospectus to information being specified or identified in the relevant Final Terms shall be read and construed as a reference to such information being specified or identified in the relevant Drawdown Prospectus unless the context requires otherwise. Each Drawdown Prospectus will be constituted either (a) by a single document containing the necessary information relating to the Issuer and the relevant Notes or (b) by a registration document containing the necessary information relating to the Issuer, a securities note containing the necessary information relating to the Issuer and the relevant Notes and, if applicable, a summary note.
Each Tranche of Bearer Notes will initially be in Temporary Global Note form, without interest coupons, or a Permanent Global Note form, without interest coupons, in each case as specified in the relevant Final Terms. Each Temporary Global Note or, as the case may be, Permanent Global Note which is not intended to be issued in NGN form, as specified in the relevant Final Terms will be deposited on or around the issue date of the relevant Tranche of the Notes with a depositary or a common depositary for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system and each Global Note which is intended to be issued in NGN form, as specified in the relevant Final Terms will be deposited on or around the issue date of the relevant Tranche of the Notes with a common safekeeper for Euroclear and/or Clearstream, Luxembourg.
On 13 June 2006 the European Central Bank (the ECB) announced that Notes in NGN form are in compliance with the "Standards for the use of EU securities settlement systems in ESCB credit operations" of the central banking system for the euro (the Eurosystem), provided that certain other criteria are fulfilled. At the same time the ECB also announced that arrangements for Notes in NGN form will be offered by Euroclear and Clearstream, Luxembourg as of 30 June 2006 and that debt securities in global bearer form issued through Euroclear and Clearstream, Luxembourg after 31 December 2006 will be eligible as collateral for Eurosystem operations if the NGN form is used.
Where the Global Notes issued in respect of any Tranche are in NGN form or the Global Note represents Global Registered Notes held under the NSS, Euroclear and Clearstream, Luxembourg will be notified by or on behalf of the Issuer whether or not each such Global Note is intended to be held in a manner which would allow Eurosystem eligibility. Any indication that the Global Notes are to be so held does not necessarily mean that the Notes of the relevant Tranche will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem either upon issue or at any time during their life as such recognition depends upon the ECB being satisfied that the Eurosystem eligibility criteria have been met. Furthermore, any indication that the Global Notes are not intended to be so held may be the case at the date of the relevant Final Terms. However, should the Notes be recognised as eligible as collateral for Eurosystem operations or 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 Euroclear or Clearstream, Luxembourg as common safekeeper. Similarly, this would 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. Such recognition will depend upon the ECB being satisfied that Eurosystem eligibility criteria have been met.
In the case of each Tranche of Bearer Notes, the relevant Final Terms will also specify whether US Treasury Regulation §1.163-5(c)(2)(i)(C) (the TEFRA C Rules) or US Treasury Regulation §1.163- 5(c)(2)(i)(D) (the TEFRA D Rules) are applicable in relation to the Notes or, if the Notes do not have a maturity of more than 365 days, that neither the TEFRA C Rules nor the TEFRA D Rules are applicable.
If the relevant Final Terms specifies the form of Notes as being Temporary Global Note exchangeable for a Permanent Global Note, then the Notes will initially be in the form of a Temporary Global Note which will be exchangeable, in whole or in part, for interests in a Permanent Global Note, without interest coupons, not earlier than 40 days after the issue date of the relevant Tranche of the Notes (the Exchange Date) upon certification as to non-US beneficial ownership. No payments will be made under the Temporary Global Note unless exchange for interests in the Permanent Global Note is improperly withheld or refused. In addition, interest payments in respect of the Notes cannot be collected without such certification of non-US beneficial ownership.
Whenever any interest in a Temporary Global Note is to be exchanged for an interest in a Permanent Global Note, the Issuer shall procure:
(a) in the case of first exchange, the prompt delivery (free of charge to the bearer) of such Permanent Global Note, duly authenticated and, in the case of an NGN, effectuated, to the bearer of the Temporary Global Note; or
(b) in the case of any subsequent exchange, an increase in the principal amount of such Permanent Global Note in accordance with its terms,
in each case in an aggregate principal amount equal to the aggregate of the principal amounts specified in the certificates of non-US beneficial ownership received by the Fiscal Agent against presentation and (in the case of final exchange) surrender of the Temporary Global Note to or to the order of the Fiscal Agent within 7 days of the bearer requesting such exchange;
provided, however, that in no circumstances shall the principal amount of the Permanent Global Note exceed the initial principal amount of the Temporary Global Note.
If:
then the Temporary Global Note (including the obligation to deliver a Permanent Global Note or increase the principal amount thereof) will become void at 5.00 p.m. (London time) on such seventh day (in the case of (a) above) or at 5.00 p.m. (London time) on such due date (in the case of (b) above) and the bearer of the Temporary Global Note will have no further rights thereunder (but without prejudice to the rights which the bearer of the Temporary Global Note or others may have under the Deed of Covenant). Under the Deed of Covenant, persons shown in the records of Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system as being entitled to an interest in a Temporary Global Note will acquire directly against the Issuer all those rights to which they would have been entitled if, immediately before the Temporary Global Note became void, they had been the holders of Definitive Notes in an aggregate principal amount equal to the principal amount of Notes they were shown as holding in the records of Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system.
The Permanent Global Note will be exchangeable in whole, but not in part, for Definitive Notes:
The exchange upon notice or at any time described above should not be expressed to be applicable if the relevant Notes have denominations consisting of a minimum specified denomination plus one or more integral multiples of another smaller amount in excess thereof.
Whenever the Permanent Global Note is to be exchanged for Definitive Notes, the Issuer shall procure the prompt delivery (free of charge to the bearer) of such Definitive Notes, duly authenticated and with Coupons and Talons attached (if so specified in the relevant Final Terms), in an aggregate principal amount equal to the principal amount of the Permanent Global Note to the bearer of the Permanent Global Note against the surrender of the Permanent Global Note to or to the order of the Fiscal Agent within 30 days of the bearer requesting such exchange.
If the relevant Final Terms specifies the form of Notes as being Temporary Global Note exchangeable for Definitive Notes and also specifies that the TEFRA C Rules are applicable or that neither the TEFRA C Rules or the TEFRA D Rules are applicable, then the Notes will initially be in the form of a Temporary Global Note which will be exchangeable, in whole but not in part, for Definitive Notes not earlier than 40 days after the issue date of the relevant Tranche of the Notes.
If the relevant Final Terms specifies the form of Notes as being Temporary Global Note exchangeable for Definitive Notes and also specifies that the TEFRA D Rules are applicable, then the Notes will initially be in the form of a Temporary Global Note which will be exchangeable, in whole or in part, for Definitive Notes not earlier than 40 days after the issue date of the relevant Tranche of the Notes upon certification as to non-US beneficial ownership. Interest payments in respect of the Notes cannot be collected without such certification of non-US beneficial ownership.
Whenever a Temporary Global Note is to be exchanged for Definitive Notes, the Issuer shall procure the prompt delivery (free of charge to the bearer) of such Definitive Notes, duly authenticated and with Coupons and Talons attached (if so specified in the relevant Final Terms), in an aggregate principal amount equal to the principal amount of the Temporary Global Note to the bearer of the Temporary Global Note against the surrender of the Temporary Global Note to or to the order of the Fiscal Agent within 30 days of the bearer requesting such exchange.
If:
then the Temporary Global Note (including the obligation to deliver a Permanent Global Note or increase the principal amount thereof or deliver Definitive Notes, as the case may be) will become void at 5.00 p.m. (London time) on such thirtieth day (in the case of (a) above) or at 5.00 p.m. (London time) on such due date (in the case of (b) above) and the bearer of the Temporary Global Note will have no further rights thereunder (but without prejudice to the rights which the bearer of the Temporary Global Note or others may have under the Deed of Covenant). Under the Deed of Covenant, persons shown in the records of Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system as being entitled to an interest in a Temporary Global Note will acquire directly against the Issuer all those rights to which they would have been entitled if, immediately before the Temporary Global Note became void, they had been the holders of Definitive Notes in an aggregate principal amount equal to the principal amount of Notes they were shown as holding in the records of Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system.
If the relevant Final Terms specifies the form of Notes as being Permanent Global Note exchangeable for Definitive Notes, then the Notes will initially be in the form of a Permanent Global Note which will be exchangeable in whole, but not in part, for Definitive Notes:
alternative clearing system is available or (b) any of the circumstances described in Condition 14 (Events of Default) occurs and is continuing.
The exchange upon notice or at any time described above should not be expressed to be applicable if the relevant Notes have denominations consisting of a minimum specified denomination plus one or more integral multiples of another smaller amount in excess thereof.
Whenever a Permanent Global Note is to be exchanged for Definitive Notes, the Issuer shall procure the prompt delivery (free of charge to the bearer) of such Definitive Notes, duly authenticated and with Coupons and Talons attached (if so specified in the relevant Final Terms), in an aggregate principal amount equal to the principal amount of the Permanent Global Note to the bearer of the Permanent Global Note against the surrender of the Permanent Global Note to or to the order of the Fiscal Agent within 30 days of the bearer requesting such exchange.
If:
then the Permanent Global Note (including the obligation to deliver Definitive Notes) will become void at 5.00 p.m. (London time) on such thirtieth day (in the case of (a) above) or at 5.00 p.m. (London time) on such due date (in the case of (b) above) and the bearer of the Permanent Global Note will have no further rights thereunder (but without prejudice to the rights which the bearer of the Permanent Global Note or others may have under the Deed of Covenant). Under the Deed of Covenant, persons shown in the records of Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system as being entitled to an interest in a Permanent Global Note will acquire directly against the Issuer all those rights to which they would have been entitled if, immediately before the Permanent Global Note became void, they had been the holders of Definitive Notes in an aggregate principal amount equal to the principal amount of Notes they were shown as holding in the records of Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system.
The terms and conditions applicable to any Definitive Note will be endorsed on that Note and will consist of the terms and conditions set out under "Terms and Conditions of the Notes" below and the provisions of the relevant Final Terms which complete those terms and conditions.
The terms and conditions applicable to any Note in global form will differ from those terms and conditions which would apply to the Note were it in definitive form to the extent described under "Summary of Provisions Relating to the Notes while in Global Form" below.
In the case of any Tranche of Bearer Notes having a maturity of more than 365 days, the Notes in global form, the Notes in definitive form and any Coupons and Talons appertaining thereto will bear a legend to the following effect:
"Any US person who holds this obligation will be subject to limitations under the US income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code."
Each Tranche of Registered Notes will be in the form of either Individual Note Certificates or a Global Registered Note, in each case as specified in the relevant Final Terms. In a press release dated 22 October 2008, "Evolution of the custody arrangement for international debt securities and their eligibility in Eurosystem credit operations", the ECB announced that it had assessed the new holding structure and custody arrangements for registered notes which the ICSDs had designed in cooperation with market participants and that Notes to be held under the NSS would be in compliance with the "Standards for the use of EU securities settlement systems in ESCB credit operations" of the Eurosystem, subject to the conclusion of the necessary legal and contractual arrangements. The press release also stated that the new arrangements for Notes to be held in NSS form will be offered by Euroclear and Clearstream, Luxembourg as of 30 June 2010 and that registered debt securities in global registered form held issued through Euroclear and Clearstream, Luxembourg after 30 September 2010 will only be eligible as collateral in Eurosystem operations if the NSS is used.
Each Global Registered Note will either be: (a) in the case of a Note which is not to be held under the NSS, registered in the name of a common depositary (or its nominee) for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system and the relevant Global Registered Note will be deposited on or about the issue date with the common depositary and will be exchangeable in accordance with its terms; or (b) in the case of a Note to be held under the NSS, be registered in the name of a common safekeeper (or its nominee) for Euroclear and/or Clearstream, Luxembourg and the relevant Global Registered Note will be deposited on or about the issue date with the common safekeeper for Euroclear and/or Clearstream, Luxembourg and will be exchangeable for Individual Note Certificates in accordance with its terms. If the relevant Final Terms specifies the form of Notes as being Individual Note Certificates, then the Notes will at all times be in the form of Individual Note Certificates issued to each Noteholder in respect of their respective holdings.
If the relevant Final Terms specifies the form of Notes as being Global Registered Note exchangeable for Individual Note Certificates, then the Notes will initially be in the form of a Global Registered Note which will be exchangeable in whole, but not in part, for Individual Note Certificates:
Whenever a Global Registered Note is to be exchanged for Individual Note Certificates, the Issuer shall procure that Individual Note Certificates will be issued in an aggregate principal amount equal to the principal amount of the Global Registered Note within 15 days of the delivery, by or on behalf of the holder of the Global Registered Note to the Registrar of such information as is required to complete and deliver such Individual Note Certificates (including, without limitation, the names and addresses of the persons in whose names the Individual Note Certificates are to be registered and the principal amount of each such person's holding) against the surrender of the Global Registered Note at the specified office of the Registrar. Such exchange will be effected in accordance with the provisions of the Agency Agreement and the regulations concerning the transfer and registration of Notes scheduled thereto and, in particular, shall be effected without charge to any holder, but against such indemnity as the Registrar may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such exchange.
If:
then the Global Registered Note (including the obligation to deliver Individual Note Certificates) will become void at 5.00 p.m. (London time) on such thirtieth day (in the case of (a) above) or at 5.00 p.m. (London time) on such due date (in the case of (b) above) and the holder of the Global Registered Note will have no further rights thereunder (but without prejudice to the rights which the holder of the Global Registered Note or others may have under the Deed of Covenant). Under the Deed of Covenant, persons shown in the records of Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system as being entitled to an interest in a Global Registered Note will acquire directly against the Issuer all those rights to which they would have been entitled if, immediately before the Global Registered Note became void, they had been the holders of Individual Note Certificates in an aggregate principal amount equal to the principal amount of Notes they were shown as holding in the records of Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system.
Such exchange will be effected in accordance with the provisions of the Agency Agreement and the regulations concerning the transfer and registration of Notes scheduled thereto and, in particular, shall be effected without charge to any holder, but against such indemnity as the Registrar may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such exchange.
Global Registered Notes held under the NSS allow for the possibility of Notes being issued and held in a manner which will permit them to be recognised as eligible collateral for Eurosystem's monetary policy and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life. Furthermore, any indication that the Global Registered Notes are not intended to be so held may be the case at the date of the relevant Final Terms. However, 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 Euroclear or Clearstream, Luxembourg as common safekeeper. Similarly, this would not necessarily mean that the Notes will then be recognised as eligible collateral for Eurosystem monetary policy and intraday credit operations by the Eurosystem at any time during their life. Such recognition will depend upon the ECB being satisfied that Eurosystem eligibility criteria have been met.
The terms and conditions applicable to any Individual Note Certificate will be endorsed on that Individual Note Certificate and will consist of the terms and conditions set out under "Terms and Conditions of the Notes" below and the provisions of the relevant Final Terms which complete those terms and conditions.
The terms and conditions applicable to any Global Registered Note will differ from those terms and conditions which would apply to the Note were it in definitive form to the extent described under "Summary of Provisions Relating to the Notes while in Global Form" below.
Each Tranche of Swedish Registered Notes will be issued in uncertificated and dematerialised book entry form in accordance with the SFIA Act. No global or definitive Notes will be issued in respect thereof. The holder of a Swedish Registered Note will be the person evidenced as such by the register for such Note maintained by Euroclear Sweden on behalf of the Issuer. Where a nominee (Sw. förvaltare) in accordance with the SFIA Act is so evidenced it shall be treated by the Issuer as the holder of the relevant Swedish Registered Note.
Title to Swedish Registered Notes will pass by transfer between accountholders of Euroclear Sweden, perfected in accordance with the legislation (including the SFIA Act), rules and regulations applicable to and/or issued by Euroclear Sweden that are in force and effect from time to time.
The following is the text of the terms and conditions which, as completed by the relevant Final Terms or, in the case of Exempt Notes, as supplemented, amended and/or replaced by the relevant Pricing Supplement, will be endorsed on each Note in definitive form issued under the Programme. The terms and conditions applicable to any Note in global form will differ from those terms and conditions which would apply to the Note were it in definitive form to the extent described under "Summary of Provisions Relating to the Notes while in Global Form" below.
(e) Deed of Covenant: The Notes may be issued in bearer form (Bearer Notes), in registered form (Registered Notes) or in registered form in accordance with the SFIA Act (Swedish Registered Notes). The Registered Notes are constituted by a deed of covenant dated 16 December 2016 (the Deed of Covenant) entered into by the Issuer.
(f) The Notes: Unless specified otherwise, all subsequent references in these Conditions to "Notes" are both to the Notes which are the subject of the relevant Final Terms and the Exempt Notes which are subject to the relevant Pricing Supplement. Copies of the relevant Final Terms are available for viewing at the Specified Office of the Fiscal Agent, the initial Specified Office of which is set out below, and at www.londonstockexchange.com. Pricing Supplements will only be available for inspection by a holder of such Exempt Notes upon production of evidence satisfactory to the Fiscal Agent or the Issuer as to the identity of such holder. Unless specified otherwise, reference to the "Final Terms" and the "relevant Final Terms" shall include the "Pricing Supplement" or the "relevant Pricing Supplement".
(a) Definitions: In these Conditions the following expressions have the following meanings:
Accrual Yield has the meaning given in the relevant Final Terms;
Additional Business Centre(s) means the city or cities specified as such in the relevant Final Terms;
Additional Financial Centre(s) means the city or cities specified as such in the relevant Final Terms;
Business Day means:
Business Day Convention, in relation to any particular date, has the meaning given in the relevant Final Terms and, if so specified in the relevant Final Terms, may have different meanings in relation to different dates and, in this context, the following expressions shall have the following meanings:
that is a Business Day unless that day falls in the next calendar month in which case that date will be the first preceding day that is a Business Day;
Calculation Agent means the Fiscal Agent or such other Person specified in the relevant Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s);
Calculation Amount has the meaning given in the relevant Final Terms;
CNY Dealer means an independent foreign exchange dealer of international repute active in the Renminbi exchange market in the RMB Settlement Centre(s);
Coupon Sheet means, in respect of a Note, a coupon sheet relating to the Note;
DA Selected Bond means a government security or securities selected by the Determination Agent as having an actual or interpolated maturity comparable with the remaining term of the Notes, that would be utilised, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities denominated in the Specified Currency and of a comparable maturity to the remaining term of the Notes;
Day Count Fraction means, in respect of the calculation of an amount for any period of time (the Calculation Period), such day count fraction as may be specified in these Conditions or the relevant Final Terms and:
(b) where the Calculation Period is longer than one Regular Period, the sum of:
(B) the actual number of days in such Calculation Period falling in the next Regular Period divided by the product of (a) the actual number of days in such Regular Period and (2) the number of Regular Periods in any year;
Day Count Fraction = [360 x (Y2 -Y1)] + [30 x (M2 -M1)]+ (D2 -D1) 360
where:
Y1 is the year, expressed as a number, in which the first day of the Calculation Period falls;
Y2 is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
M1 is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
M2 is the calendar month, expressed as number, in which the day immediately following the last day included in the Calculation Period falls;
D1 is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D1 will be 30; and
D2 is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30;
(vi) if 30E/360 or Eurobond Basis is so specified, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
Day Count Fraction =
$$
\frac{[360 \times (Y_2 - Y_1)] + [30 \times (M_2 - M_1)] + (D_2 - D_1)}{360}
$$
where:
Y1 is the year, expressed as a number, in which the first day of the Calculation Period falls;
Y2 is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
M1 is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
M2 is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
D1 is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D1 will be 30; and
D2 is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31, in which case D2 will be 30; and
(vii) if 30E/360 (ISDA) is so specified, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
Day Count Fraction =
$$
\frac{[360 \times (Y_2 - Y_1)] + [30 \times (M_2 - M_1)] + (D_2 - D_1)}{360}
$$
where:
Y1 is the year, expressed as a number, in which the first day of the Calculation Period falls;
Y2 is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
M1 is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
M2 is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
D1 is the first calendar day, expressed as a number, of the Calculation Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case D1 will be 30; and
D2 is the calendar day, expressed as a number, immediately following the last day included in the Calculation 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 D2 will be 30,
provided, however, that in each such case the number of days in the Calculation Period is calculated from and including the first day of the Calculation Period to but excluding the last day of the Calculation Period;
Determination Agent means an investment bank or financial institution selected by the Issuer as may be specified in the relevant Final Terms or any substitute agent;
Early Redemption Amount (Tax) means, in respect of any Note, its principal amount or such other amount as may be specified in the relevant Final Terms;
Early Termination Amount means, in respect of any Note, its principal amount or such other amount as may be specified in the relevant Final Terms, or determined in accordance with these Conditions;
EURIBOR means Eurozone interbank offered rate;
Euroclear Sweden means the Swedish Central Securities Depositary and Clearing Organisation Euroclear Sweden AB, incorporated in Sweden with Reg. No. 556112-8074;
Euroclear Sweden Register means in respect of Swedish Registered Notes the computerised register maintained by Euroclear Sweden for the Issuer consisting of accounts for the holders of financial instruments registered pursuant to the SFIA Act;
Extraordinary Resolution has the meaning given in the Agency Agreement;
Final Redemption Amount means, in respect of any Note, its principal amount or such other amount as may be specified in the relevant Final Terms;
First Interest Payment Date means the date specified in the relevant Final Terms;
Fixed Coupon Amount has the meaning given in the relevant Final Terms;
Governmental Authority means any de facto or de jure government (or any agency or instrumentality thereof), court, tribunal, administrative or other governmental authority or any other entity (private or public) charged with the regulation of the financial markets (including the central bank) of the relevant RMB Settlement Centre;
Gross Redemption Yield means, with respect to a security, the gross redemption yield on such security, expressed as a percentage and calculated by the Determination Agent on the basis set out by the United Kingdom Debt Management Office in the paper "Formulae for Calculating Gilt Prices from Yields", page 4, Section One: Price/Yield Formulae "Conventional Gilts"; "Double dated and Undated Gilts with Assumed (or Actual) Redemption on a Quasi-Coupon Date" (published 8 June 1998, as amended or updated from time to time) on a semi-annual compounding basis (converted to an annualised yield and rounded up (if necessary) to four decimal places) or on such other basis as the relevant Dealer(s) may approve;
Guarantee means, in relation to any Indebtedness of any Person, any obligation of another Person to pay such Indebtedness including (without limitation):
Holder, in the case of Bearer Notes, has the meaning given in Condition 3(b) (Form, Denomination, Title and Transfer - Title to Bearer Notes), in the case of Registered Notes, has the meaning given in Condition 3(d) (Form, Denomination, Title and Transfer - Title to Registered Notes) and, in the case of Swedish Registered Notes, has the meaning given in Condition 3(e) (Form, Denomination, Title and Transfer - Title to Swedish Registered Notes);
Illiquidity means where the general Renminbi exchange market in the relevant RMB Settlement Centre becomes illiquid and, as a result of which, the Issuer cannot obtain sufficient Renminbi in order to satisfy its obligation to pay interest and principal (in whole or in part) in respect of the Notes as determined by the Issuer in good faith and in a commercially reasonable manner following consultation with two CNY Dealers;
Inconvertibility means the occurrence of any event that makes it impossible for the Issuer to convert any amount due in respect of the Notes in the general Renminbi exchange market in the relevant RMB Settlement Centre, other than where such impossibility is due solely to the failure of the Issuer to comply with any law, rule or regulation enacted by any Governmental Authority (unless such law, rule or regulation is enacted after the first Issue Date of the first Tranche of the Notes and it is impossible for the Issuer, due to an event beyond its control, to comply with such law, rule or regulation);
Indebtedness means any indebtedness of any Person for money borrowed or raised including (without limitation) any indebtedness for or in respect of:
(iii) the amount of any liability in respect of leases or hire purchase contracts which would, in accordance with applicable law and generally accepted accounting principles, be treated as finance or capital leases;
(iv) the amount of any liability in respect of any purchase price for assets or services the payment of which is deferred for a period in excess of 60 days; and
Interest Amount means, in relation to a Note and an Interest Period, the amount of interest payable in respect of that Note for that Interest Period;
Interest Commencement Date means the Issue Date of the Notes or such other date as may be specified as the Interest Commencement Date in the relevant Final Terms;
Interest Determination Date has the meaning given in the relevant Final Terms;
Interest Payment Date means the First Interest Payment Date and any other date or dates specified as such in, or determined in accordance with the provisions of, the relevant Final Terms and, if a Business Day Convention is specified in the relevant Final Terms:
Interest Period means each period beginning on (and including) the Interest Commencement Date or any Interest Payment Date and ending on (but excluding) the next Interest Payment Date;
ISDA Definitions means the 2006 ISDA Definitions (as amended and updated as at the date of issue of the first Tranche of the Notes of the relevant Series (as specified in the relevant Final Terms) as published by the International Swaps and Derivatives Association, Inc.);
Issue Date has the meaning given in the relevant Final Terms;
LIBOR means London interbank offered rate;
Make-Whole Redemption Amount has the meaning given to it in Condition 10(c);
Margin has the meaning given in the relevant Final Terms;
Maturity Date has the meaning given in the relevant Final Terms;
Maximum Redemption Amount has the meaning given in the relevant Final Terms;
Minimum Redemption Amount has the meaning given in the relevant Final Terms;
Non-transferability means the occurrence of any event that makes it impossible for the Issuer to deliver Renminbi between accounts inside the relevant RMB Settlement Centre or from an account inside the relevant RMB Settlement Centre to an account outside the relevant RMB Settlement Centre, other than where such impossibility is due solely to the failure of the Issuer to comply with any law, rule or regulation enacted by any Governmental Authority (unless such law, rule or regulation is enacted after the Issue Date of the first Tranche of Notes and it is impossible for the Issuer, due to an event beyond its control, to comply with such law, rule or regulation);
Noteholder, in the case of Bearer Notes, has the meaning given in Condition 3(b) (Form, Denomination, Title and Transfer - Title to Bearer Notes) and, in the case of Registered Notes, has the meaning given in Condition 3(e) (Form, Denomination, Title and Transfer - Title to Registered Notes);
Optional Redemption Amount (Call) means, in respect of any Note, its principal amount or such other amount as may be specified in the relevant Final Terms;
Optional Redemption Amount (Put) means, in respect of any Note, its principal amount or such other amount as may be specified in the relevant Final Terms;
Optional Redemption Date (Call) has the meaning given in the relevant Final Terms;
Optional Redemption Date (Put) has the meaning given in the relevant Final Terms;
Participating Member State means a Member State of the European Communities which adopts the euro as its lawful currency in accordance with the Treaty;
Payment Business Day means:
Person means any individual, company, corporation, firm, partnership, joint venture, association, organisation, state or agency of a state or other entity, whether or not having separate legal personality;
Principal Financial Centre means, in relation to any currency, the principal financial centre for that currency provided, however, that:
Principal Subsidiary means at any time, any Subsidiary whose total assets, consolidated in the case of a Subsidiary which itself has subsidiaries (to the extent attributable to the consolidated total assets of the Group), as shown by its latest audited balance sheet, represent ten per cent. or more of the consolidated total assets of the Group, as shown by the latest published audited consolidated balance sheet of the Group;
Put Option Notice means a notice which must be delivered to a Paying Agent by any Noteholder wanting to exercise a right to redeem a Note at the option of the Noteholder;
Put Option Receipt means a receipt issued by a Paying Agent to a depositing Noteholder upon deposit of a Note with such Paying Agent by any Noteholder wanting to exercise a right to redeem a Note at the option of the Noteholder;
Quotation Time shall be as set out in the relevant Final Terms;
Rate Calculation Business Day means a day (other than a Saturday, Sunday or public holiday) on which commercial banks are open for general business (including dealings in foreign exchange) in Hong Kong and in New York City;
Rate Calculation Date means the day which is two Rate Calculation Business Days before the due date of the relevant amount under these Conditions;
Rate of Interest means the rate or rates (expressed as a percentage per annum) of interest payable in respect of the Notes specified in the relevant Final Terms or calculated or determined in accordance with the provisions of these Conditions as completed by the relevant Final Terms;
Redemption Amount means, as appropriate, the Final Redemption Amount, the Early Redemption Amount (Tax), the Optional Redemption Amount (Call), the Optional Redemption Amount (Put), the Early Termination Amount as may be specified in the relevant Final Terms;
Redemption Margin shall be as set out in the relevant Final Terms;
Reference Banks has the meaning given in the relevant Final Terms or, if none, four major banks selected by the Calculation Agent in the market that is most closely connected with the Reference Rate;
Reference Bond shall be as set out in the relevant Final Terms or the DA Selected Bond;
Reference Bond Price means, with respect to any date of redemption, (i) the arithmetic average of the Reference Government Bond Dealer Quotations for such date of redemption, after excluding the highest and lowest such Reference Government Bond Dealer Quotations, or (ii) if the Determination Agent obtains fewer than four such Reference Government Bond Dealer Quotations, the arithmetic average of all such quotations;
Reference Bond Rate means, with respect to any date of redemption, the rate per annum equal to the annual or semi-annual yield (as the case may be) to maturity or interpolated yield to maturity (on the relevant Day Count Fraction basis) of the Reference Bond, assuming a price for the Reference Bond (expressed as a percentage of its principal amount) equal to the Reference Bond Price for such date of redemption;
Reference Date will be set out in the relevant notice of redemption;
Reference Government Bond Dealer means each of five banks selected by the Issuer which are (i) primary government securities dealers and their respective successors, or (ii) market markers in pricing corporate bond issues;
Reference Government Bond Dealer Quotations means, with respect to each Reference Government Bond Dealer and any date of redemption, the arithmetic average, as determined by the Determination Agent, of the bid and offered prices for the Reference Bond (expressed in each case as a percentage of its principal amount) at the Quotation Time specified in the relevant Final Terms on the Reference Date quoted in writing to the Determination Agent by such Reference Government Bond Dealer;
Reference Price has the meaning given in the relevant Final Terms;
Reference Rate shall mean (i) LIBOR, (ii) EURIBOR or (iii) STIBOR in each case for the relevant period, as specified in the relevant Final Terms;
Registrar means, in relation to any series of Registered Notes, Citibank N.A., London Branch (which includes any successor registrar appointed from time to time in connection with the Registered Notes) or in respect of any Series of Swedish Registered Notes, Euroclear Sweden in accordance with the SFIA Act;
Relevant Date means, in relation to any payment, whichever is the later of (a) the date on which the payment in question first becomes due and (b) if the full amount payable has not been received in the Principal Financial Centre of the currency of payment by the Fiscal Agent or in respect of Swedish Registered Notes, if the full amount payable has not been made available to Euroclear Sweden, on or prior to such due date, the date on which (the full amount having been so received) notice to that effect has been given to the Noteholders;
Relevant Financial Centre has the meaning given in the relevant Final Terms;
Relevant Indebtedness means any Indebtedness which is in the form of or represented by any bond, note, debenture, debenture stock, loan stock, certificate or other debt securities which is, or is capable of being, listed, quoted or traded on any stock exchange or in any securities market (including, without limitation, any over-the-counter market);
Relevant Screen Page means the page, section or other part of a particular information service (including, without limitation, Reuters) 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;
Relevant Time has the meaning given in the relevant Final Terms;
Remaining Term Interest means, with respect to any Note, the aggregate amount of scheduled payment(s) of interest on such Note for the remaining term of such Note determined on the basis of the rate of interest applicable to such Note from and including the date on which such Note is to be redeemed by the Issuer pursuant to Condition 10(c) (Redemption at the option of the Issuer);
Reserved Matter means any proposal to change any date fixed for payment of principal or interest in respect of the Notes, to reduce the amount of principal or interest payable on any date in respect of the Notes, to alter the method of calculating the amount of any payment in respect of the Notes or the date for any such payment, to change the currency of any payment under the Notes or to change the quorum requirements relating to meetings or the majority required to pass an Extraordinary Resolution;
RMB Settlement Centre(s) means the financial centre(s) specified as such in the relevant Final Terms in accordance with applicable laws and regulations. If no RMB Settlement Centre is specified in the relevant Final Terms, the RMB Settlement Centre shall be deemed to be Hong Kong;
Security Interest means any mortgage, charge, pledge, lien or other security interest including, without limitation, anything analogous to any of the foregoing under the laws of any jurisdiction;
SFIA Act means the Swedish Financial Instruments Accounts Act (Sw. lag (1998:1479) om kontoföring av finansiella instrument) as amended;
Specified Currency has the meaning given in the relevant Final Terms;
Specified Denomination(s) has the meaning given in the relevant Final Terms;
Specified Office has the meaning given in the Agency Agreement or in relation to Swedish Registered Notes, the Swedish Agency Agreement;
Specified Period has the meaning given in the relevant Final Terms;
Spens Amount has the meaning given to it in Condition 10(c);
Spot Rate means the spot/US dollar exchange rate for the purchase of US dollars with Renminbi in the over-the-counter Renminbi exchange market in Hong Kong for settlement in two Rate Calculation Business Days, as determined by the Fiscal Agent at or around 11.00 a.m. (Hong Kong time) on the Rate Calculation Date, on a deliverable basis by reference to Reuters Screen Page TRADCNY3, or if no such rate is available, on a non-deliverable basis by reference to Reuters Screen Page TRADNDF. If neither rate is available, the Fiscal Agent will determine the Spot Rate at or around 11.00 a.m. (Hong Kong time) on the Rate Calculation Date as the most recently available Renminbi/US dollar official fixing rate for settlement in two Rate Calculation Business Days reported by The State Administration of Foreign Exchange of the PRC, which is reported on the Reuters Screen Page CNY=SAEC. Reference to a page on the Reuters Screen means the display page so designated on the Reuter Monitor Money Rates Service (or any successor service) or such other page as may replace that page for the purpose of displaying a comparable currency exchange rate;
STIBOR means Stockholm interbank offered rate;
Subsidiary means a subsidiary company or corporation (the First Company) of another company or corporation (the Holding Company), where:
and, for the purpose of this definition, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;
Talon means a talon for further Coupons;
TARGET2 means the Trans-European Automated Real-Time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007 or any successor thereof;
TARGET Settlement Day means any day on which TARGET2 is open for the settlement of payments in euro;
Tax Jurisdiction means (i) Sweden or any political subdivision or any authority thereof or therein having power to tax; or (ii) any jurisdiction under the laws of which the Issuer or any successor to the Issuer is organised or in which it is resident for tax purposes;
Treaty means the Treaty establishing the European Communities, as amended;
Zero Coupon Note means a Note specified as such in the relevant Final Terms; and
US Dollar Equivalent means the Renminbi amount converted into US dollars using the Spot Rate for the relevant Rate Calculation Date.
(c) Registered Notes and Swedish Registered Notes: Registered Notes and Swedish Registered Notes are in the Specified Denomination(s), which may include a minimum denomination and higher integral multiples of a smaller amount specified in the relevant Final Terms.
(d) Title to Registered Notes: The Registrar will maintain the register in accordance with the provisions of the Agency Agreement. A certificate (each, a Note Certificate) will be issued to each Holder of Registered Notes in respect of its registered holding. Each Note Certificate will be numbered serially with an identifying number which will be recorded in the Register. In the case of Registered Notes, Holder means the person in whose name such Registered Note is for the time being registered in the Register (or, in the case of a joint holding, the first named thereof) and Noteholder shall be construed accordingly.
(j) No charge: The transfer of a Registered Note will be effected without charge by or on behalf of the Issuer or the Registrar or any Transfer Agent but against such indemnity as the Registrar or (as the case may be) such Transfer Agent may require in respect of any tax or other duty of whatsoever nature which may be levied or imposed in connection with such transfer. For the avoidance of doubt, the provisions of this Condition 3(j) (No charge) do not apply to Swedish Registered Notes.
(k) Closed periods: Noteholders may not require transfers to be registered during the period of 15 days ending on the due date for any payment of principal or interest in respect of the Registered Notes. No Holder of Swedish Registered Notes may require the transfer of a Swedish Registered Note to be registered during a period which is the equivalent of any such closed period (if any) pursuant to the then applicable rules and procedures of Euroclear Sweden.
The Notes constitute direct, unsubordinated and unconditional obligations of the Issuer which will at all times rank pari passu among themselves and at least pari passu with all other present and future unsecured obligations of the Issuer, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application.
So long as any Note remains outstanding, the Issuer shall not, and shall procure that none of its Principal Subsidiaries will, create or permit to subsist any Security Interest upon the whole or any part of its present or future undertaking, assets or revenues (including uncalled capital) to secure any Relevant Indebtedness of the Issuer or any of its Principal Subsidiaries or Guarantee of Relevant Indebtedness of the Issuer or any of its Principal Subsidiaries without (a) at the same time or prior thereto securing the Notes equally and rateably therewith or (b) providing such other security for the Notes as may be approved by an Extraordinary Resolution of Noteholders provided that for the purposes of this Condition 5 (Negative Pledge) Principal Subsidiaries shall not include Seco Tools AB.
Rate of Interest to the Calculation Amount, multiplying the product by the relevant Day Count Fraction, rounding the resulting figure to the nearest sub-unit of the Specified Currency (half a sub-unit being rounded upwards) and multiplying such rounded figure by a fraction equal to the Specified Denomination of such Note divided by the Calculation Amount. For this purpose a sub-unit means, in the case of any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, in the case of euro, means one cent.
(iii) if, in the case of (i) above, such rate does not appear on that page or, in the case of (ii) above, fewer than two such rates appear on that page or if, in either case, the Relevant Screen Page is unavailable, the Calculation Agent will:
(B) determine the arithmetic mean of such quotations; and,
and the Rate of Interest for such Interest Period shall be the sum of the Margin and the rate or (as the case may be) the arithmetic mean so determined; provided, however, that if the Calculation Agent is unable to determine a rate or (as the case may be) an arithmetic mean in accordance with the above provisions in relation to any Interest Period, the Rate of Interest applicable to the Notes during such Interest Period will be the sum of the Margin and the rate or (as the case may be) the arithmetic mean last determined in relation to the Notes in respect of a preceding Interest Period.
(iv) 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:
(A) 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
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.
(ii) the product of the Accrual Yield (compounded annually) being applied to the Reference Price on the basis of the relevant Day Count Fraction from (and including) the Issue Date to (but excluding) whichever is the earlier of (i) the day on which all sums due in respect of such Note up to that day are received by or on behalf of the relevant Noteholder and (ii) the day which is five days after the Fiscal Agent has notified the Noteholders that it has received all sums due in respect of the Notes up to such fifth day (except to the extent that there is any subsequent default in payment).
In the case of Exempt Notes with a floating rate of interest where the relevant Pricing Supplement identifies that Screen Rate Determination applies to the calculation of interest, if the Reference Rate from time to time is specified in the relevant Pricing Supplement as being other than LIBOR, EURIBOR or STIBOR, the rate of interest in respect of such Exempt Notes will be determined as provided in the relevant Pricing Supplement.
Exempt Notes may be a Fixed Rate Note, a Floating Rate Note, a Zero Coupon Note, an indexlinked or other variable linked note, a dual currency note, an instalment note or a combination of any of the foregoing, or such other type of Note as provided in the relevant Pricing Supplement.
The rate or amount of interest payable in respect of Exempt Notes which are not also Fixed Rate Notes or Floating Rate Notes shall be determined in the manner specified in the relevant Pricing Supplement.
on giving not less than 30 nor more than 60 days' notice to the Noteholders (which notice shall be irrevocable), at their Early Redemption Amount (Tax), together with interest accrued (if any) to the date fixed for redemption, if:
provided, however, that no such notice of redemption shall be given earlier than:
(1) where the Notes may be redeemed at any time, 90 days prior to the earliest date on which the Issuer would be obliged to pay such additional amounts if a payment in respect of the Notes were then due; or
(2) where the Notes may be redeemed only on an Interest Payment Date, 60 days prior to the Interest Payment Date occurring immediately before the earliest date on which the Issuer would be obliged to pay such additional amounts if a payment in respect of the Notes were then due.
Prior to the publication of any notice of redemption pursuant to this paragraph, the Issuer shall deliver to the Fiscal Agent (or in the case of Swedish Registered Notes to the Swedish Issuing Agent) (A) 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 of and (B) 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. Upon the expiry of any such notice as is referred to in this Condition 10(b) (Redemption for tax reasons), the Issuer shall be bound to redeem the Notes in accordance with this Condition 10(b) (Redemption for tax reasons).
(c) Redemption at the option of the Issuer: If the Call Option is specified in the relevant Final Terms, as being applicable, the Notes may be redeemed at the option of the Issuer in whole or, if so specified in the relevant Final Terms, in part on any Optional Redemption Date (Call) at the relevant Optional Redemption Amount (Call) on the Issuer's giving not less than 15 nor more than 60 days' notice to the Noteholders, or such other period(s) as may be specified in the relevant Final Terms (which notice shall be irrevocable and shall oblige the Issuer to redeem the Notes or, as the case may be, the Notes specified in such notice on the relevant Optional Redemption Date (Call) at the Optional Redemption Amount (Call) plus accrued interest (if any) to such date). In respect of Swedish Registered Notes, the notice shall furthermore specify the Closed Period. Any such redemption must be of a principal 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 relevant Final Terms as being applicable. The Optional Redemption Amount (Call) will be either, as specified in the relevant Final Terms, (i) if Make-Whole Redemption Price is specified as being applicable in the relevant Final Terms, the relevant Make-Whole Redemption Price or (ii) the specified amount per Calculation Amount of the Notes as specified in the relevant Final Terms.
The Make-Whole Redemption Price will be an amount equal to the higher of:
all as determined by the Determination Agent.
(d) Partial redemption: If the Notes are to be redeemed in part only on any date in accordance with Condition 10(c) (Redemption at the option of the Issuer), the Notes to be redeemed shall be selected by the drawing of lots in such place as the Fiscal Agent approves and in such manner as the Fiscal Agent considers appropriate, subject to compliance with applicable law, the rules of each competent authority, stock exchange and/or quotation system (if any) by which the Notes have then been admitted to listing, trading and/or quotation and, in the case of Swedish Registered Notes, the then applicable rules and procedures of Euroclear Sweden and the notice to Noteholders referred to in Condition 10(c) (Redemption at the option of the Issuer) shall specify the serial numbers or, in the case of Swedish Registered Notes, otherwise specify the Notes or amounts of the Notes so to be redeemed. If any Maximum Redemption Amount or Minimum Redemption Amount is specified in the relevant Final Terms, then the Optional Redemption Amount (Call) shall in no event be greater than the maximum or be less than the minimum so specified.
(e) Redemption at the option of Noteholders: If the Put Option is specified in the relevant Final Terms as being applicable, the Issuer shall, at the option of the holder of any Note redeem such Note on the Optional Redemption Date (Put) specified in the relevant Put Option Notice at the relevant Optional Redemption Amount (Put) together with interest (if any) accrued to such date. In order to exercise the option contained in this Condition 10(e) (Redemption at the option of Noteholders), the holder of a Note must, not less than 15 nor more than 60 days (or such other period as specified in the relevant Final Terms) before the relevant Optional Redemption Date (Put), deposit with any Paying Agent such Note together with all unmatured Coupons relating thereto and a duly completed Put Option Notice in the form obtainable from any Paying Agent. The Paying Agent with which a Note is so deposited shall deliver a duly completed Put Option Receipt to the depositing Noteholder. In the case of Swedish Registered Notes, a Put Option Notice will not take effect against the Issuer before the date of which the relevant Swedish Registered Notes have been transferred to the account designated by the Swedish Issuing Agent and blocked for further transfer by such Swedish Issuing Agent (such date will be the first date of a Closed Period). No Note, once deposited with a duly completed Put Option Notice in accordance with this Condition 10(e) (Redemption at the option of Noteholders), may be withdrawn; provided, however, that if, prior to the relevant Optional Redemption Date (Put), any such Note becomes immediately due and payable or, upon due presentation of any such Note on the relevant Optional Redemption Date (Put), payment of the redemption moneys is improperly withheld or refused, the relevant Paying Agent shall mail notification thereof to the depositing Noteholder at such address as may have been given by such Noteholder in the relevant Put Option Notice and shall hold such Note at its Specified Office for collection by the depositing Noteholder against surrender of the relevant Put Option Receipt. For so long as any outstanding Note is held by a Paying Agent in accordance with this Condition 10(e) (Redemption at the option of Noteholders) the depositor of such Note and not such Paying Agent shall be deemed to be the holder of such Note for all purposes.
Notwithstanding the above, in the case of Swedish Registered Notes, the right to require redemption of such Notes in accordance with this Condition 10(e) (Redemption at the option of Noteholders) must be exercised in accordance with the rules and procedures of Euroclear Sweden and where there is any inconsistency between the foregoing and the rules and procedures of Euroclear Sweden, the rules and procedures of Euroclear Sweden shall prevail.
Where such calculation is to be made for a period which is not a whole number of years, the calculation in respect of the period of less than a full year shall be made on the basis of such Day Count Fraction as may be specified in the Final Terms for the purposes of this Condition 10(g) (Early redemption of Zero Coupon Notes) or, if none is so specified, a Day Count Fraction of 30E/360.
This Condition 11 (Payments – Bearer Notes) is only applicable to Bearer Notes.
(d) Payments subject to fiscal laws: All payments in respect of the Bearer Notes are subject in all cases to (i) any applicable fiscal or other laws and regulations in the place of payment, but without prejudice to the provisions of Condition 13 (Taxation) and (ii) any withholding or deduction required pursuant to an agreement described in Section 1471(b) of the United States Internal Revenue Code of 1986, as amended (the Code) or otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any regulations or agreements thereunder, official interpretations thereof, or any law implementing an intergovernmental approach thereto. No commissions or expenses shall be charged to the Noteholders or Couponholders in respect of such payments.
(e) Deductions for unmatured Coupons: If the relevant Final Terms specifies that the Fixed Rate Note Provisions are applicable and a Bearer Note is presented without all unmatured Coupons relating thereto:
Each sum of principal so deducted shall be paid in the manner provided in Condition 11(a) (Principal) above against presentation and (provided that payment is made in full) surrender of the relevant missing Coupons.
claims have already become void pursuant to Condition 15 (Prescription). Upon the due date for redemption of any Bearer Note, any unexchanged Talon relating to such Note shall become void and no Coupon will be delivered in respect of such Talon.
(k) Payment of US Dollar Equivalent: Notwithstanding the foregoing, if by reason of Inconvertibility, Non-transferability or Illiquidity, the Issuer is not able, or it would be impracticable for it, to satisfy payments of principal or interest (in whole or in part) in respect of the Notes when due in Renminbi in the RMB Settlement Centre, the Issuer may, on giving not less than five or more than 30 days' irrevocable notice to the Holders prior to the due date for payment, settle any such payment (in whole or in part) in US dollars on the due date at the US Dollar Equivalent of any such Renminbi denominated amount.
All notifications, opinions, determinations, certificates, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 11(k) (Payment of US Dollar Equivalent) by the Calculation Agent, will (in the absence of wilful default, bad faith or manifest error) be binding on the Issuer, the Agents and all Holders.
Conditions 12(a) (Principal) to Condition 12(g) (Payment of US Dollar Equivalent) are only applicable to Registered Notes. Condition 12(h) (Payment - Swedish Registered Notes) is only applicable to Swedish Registered Notes.
and (in the case of redemption) upon surrender (or, in the case of part payment only, endorsement) of the relevant Note Certificates at the Specified Office of any Paying Agent.
(c) Payments subject to fiscal laws: All payments in respect of the Registered Notes are subject in all cases to (i) any applicable fiscal or other laws and regulations in the place of payment, but without prejudice to the provisions of Condition 13 (Taxation) and (ii) any withholding or deduction required pursuant to an agreement described in Section 1471(b) of the Code or otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any regulations or agreements thereunder, official interpretations thereof, or any law implementing an intergovernmental approach thereto. No commissions or expenses shall be charged to the Noteholders in respect of such payments.
(d) Payments on business days: Where payment is to be made by transfer to an account, payment instructions (for value the due date, or, if the due date is not Payment Business Day, for value the next succeeding Payment Business Day) will be initiated and, where payment is to be made by cheque, the cheque will be mailed (i) (in the case of payments of principal and interest payable on redemption) on the later of the due date for payment and the day on which the relevant Note Certificate is surrendered (or, in the case of part payment only, endorsed) at the Specified Office of a Paying Agent and (ii) (in the case of payments of interest payable other than on redemption) on the due date for payment. A Holder of a Registered Note shall not be entitled to any interest or other payment in respect of any delay in payment resulting from (A) the due date for a payment not being a Payment Business Day or (B) a cheque mailed in accordance with this Condition 13 (Taxation) arriving after the due date for payment or being lost in the mail.
In such event, payments of the US Dollar Equivalent of the relevant principal or interest in respect of Registered Notes represented by Note Certificates shall be made by a US dollar denominated cheque drawn on a bank in New York City and mailed to the Holder of such Note Certificates at its address appearing in the Register, or, upon application by the Holder to the specified office of the Registrar or any Transfer Agent before the Record Date, by transfer to a US dollar denominated account with a bank in New York City.
All notifications, opinions, determinations, certificates, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 12(g) (Payment of US Dollar Equivalent) by the Calculation Agent, will (in the absence of wilful default, bad faith or manifest error) be binding on the Issuer, the Agents and all Holders.
(h) Payment - Swedish Registered Notes: Payments of principal and/or interest in respect of Swedish Registered Notes shall be made to the persons shown as the Holders of Swedish Registered Notes on the fifth Business Day (or in accordance with the rules and procedure applied by Euroclear Sweden from time to time) before the due date for such payment, or such other Business Day falling closer to the due date as may be stipulated in the current rules and procedures of Euroclear Sweden. Such day will be the Record Date in respect of Swedish Registered Notes.
(a) Gross up: All payments of principal and interest in respect of the Notes and the Coupons by or on behalf of the Issuer shall be made free and clear of, and without withholding or deduction for or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of any Tax Jurisdiction, unless the withholding or deduction of such taxes, duties, assessments, or governmental charges is required by law. In that event, the Issuer shall pay such additional amounts as will result in receipt by the Noteholders and the Couponholders after such withholding or deduction of such amounts as would have been received by them had no such withholding or deduction been required, except that no such additional amounts shall be payable in respect of any Note or Coupon:
If any of the following events occurs and is continuing:
provided that no event referred to in this Condition 14(c) (Cross-default of Issuer or Principal Subsidiary) shall constitute an Event of Default, first, unless the relative Indebtedness either alone or when aggregated with other Indebtedness relative to all (if any) other such events which shall have occurred shall amount to at least €50,000,000 (or its equivalent in any other currency); or
then any Note may, by written notice addressed by the holder thereof to the Issuer and delivered to the Issuer or to the Specified Office of the Fiscal Agent, be declared immediately (or, in the case of Swedish Registered Notes, such later date on which the relevant Swedish Registered Notes have been transferred to the account designated by the Swedish Issuing Agent and blocked for further transfer by such Swedish Issuing Agent) due and payable, whereupon it shall become immediately due and payable at its Early Termination Amount together with accrued interest (if any) without further action or formality.
Claims for principal in respect of Bearer Notes shall become void unless the relevant Bearer Notes are presented for payment within ten years of the appropriate Relevant Date. Claims for interest in respect of Bearer Notes shall become void unless the relevant Coupons are presented for payment within five years of the appropriate Relevant Date. Claims for principal and interest on redemption in respect of Registered Notes shall become void unless the relevant Note Certificates are surrendered for payment within ten years of the appropriate Relevant Date.
If any Note, Coupon or Note Certificate is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the Specified Office of the Fiscal Agent, in the case of Bearer Notes, or the Registrar, in the case of Registered Notes (and, if the Notes are then admitted to listing, trading and/or quotation by any competent authority, stock exchange and/or quotation system which requires the appointment of a Paying Agent or Transfer Agent in any particular place, the Paying Agent or Transfer Agent having its Specified Office in the place required by such competent authority, stock exchange and/or quotation system), subject to all applicable laws and competent authority, stock exchange and/or quotation system requirements, upon payment by the claimant of the expenses incurred in connection with such replacement and on such terms as to evidence, security, indemnity and otherwise as the Issuer may reasonably require. Mutilated or defaced Notes, Coupons or Note Certificates must be surrendered before replacements will be issued. For the avoidance of doubt, this Condition 16 (Replacement of Notes and Coupons) shall not apply to the Swedish Registered Notes.
In acting under the Agency Agreement and in connection with the Notes and the Coupons, the Agents act solely as agents of the Issuer and do not assume any obligations towards or relationship of agency or trust for or with any of the Noteholders or Couponholders.
The initial Agents and their initial Specified Offices are listed below. The initial Calculation Agent (if any) is specified in the relevant Final Terms. The Issuer reserves the right at any time to vary or terminate the appointment of any Agent and to appoint a successor fiscal agent or registrar or Calculation Agent and additional or successor paying agents; provided, however, that so long as the relevant Notes or Swedish Registered Notes, as the case may be, remain outstanding:
Notice of any change in any of the Agents or in their Specified Offices shall promptly be given to the Noteholders.
(a) Meetings of Noteholders other than in respect of Swedish Registered Notes: The Agency Agreement contains provisions for convening meetings of Noteholders to consider matters relating to the Notes, including the modification of any provision of these Conditions. Any such modification may be made if sanctioned by an Extraordinary Resolution. Such a meeting may be convened by the Issuer and shall be convened by them upon the request in writing of Noteholders holding not less than one-tenth of the aggregate principal amount of the outstanding Notes. The quorum at any meeting convened to vote on an Extraordinary Resolution will be two or more Persons holding or representing more than half of the aggregate principal amount of the outstanding Notes or, at any adjourned meeting, two or more Persons being or representing Noteholders whatever the principal amount of the Notes held or represented; provided, however, that Reserved Matters may only be sanctioned by an Extraordinary Resolution passed at a meeting of Noteholders at which two or more Persons holding or representing not less than twothirds or, at any adjourned meeting, one quarter of the aggregate principal amount of the outstanding Notes form a quorum. Any Extraordinary Resolution duly passed at any such meeting shall be binding on all the Noteholders and Couponholders, whether present or not.
In addition, a resolution in writing approved by or on behalf of not less than two-thirds of Noteholders of the outstanding aggregate amount of the Notes will take effect as if it were an Extraordinary Resolution. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Noteholders.
The Swedish Agency Agreement will contain provisions regarding meetings of Noteholders of Swedish Registered Notes.
The Swedish Issuing Agent shall prior to and in connection with meetings of Noteholders, and otherwise as and when required to carry out its duties under these Conditions, be entitled to obtain information from the register of Noteholders kept by Euroclear Sweden in respect of the Swedish Registered Notes (Sw. skuldbok), provided that this is permitted under the rules of Euroclear Sweden.
(b) Modification: The Notes, these Conditions and the Deed of Covenant may be amended without the consent of the Noteholders or the Couponholders to correct a manifest error. In addition, the parties to the Agency Agreement may agree to modify any provision thereof, but the Issuer shall not agree, without the consent of the Noteholders, to any such modification unless it is of a formal, minor or technical nature, it is made to correct a manifest error or it is, in the opinion of such parties, not materially prejudicial to the interests of the Noteholders.
The Issuer may from time to time, without the consent of the Noteholders or the Couponholders, create and issue further notes having the same terms and conditions as the Notes in all respects (or in all respects except for the first payment of interest) so as to form a single series with the Notes.
If any sum due from the Issuer in respect of the Notes or the Coupons or any order or judgment given or made in relation thereto has to be converted from the currency (the first currency) in which the same is payable under these Conditions or such order or judgment into another currency (the second currency) for the purpose of (a) making or filing a claim or proof against the Issuer, (b) obtaining an order or judgment in any court or other tribunal or (c) enforcing any order or judgment given or made in relation to the Notes, the Issuer shall indemnify each Noteholder, on the written demand of such Noteholder addressed to the Issuer and delivered to the Issuer or to the Specified Office of the Fiscal Agent, against any loss suffered as a result of any discrepancy between (i) the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (ii) the rate or rates of exchange at which such Noteholder may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof.
This indemnity constitutes a separate and independent obligation of the Issuer and shall give rise to a separate and independent cause of action.
For the purposes of any calculations referred to in these Conditions (unless otherwise specified in these Conditions), (a) all percentages resulting from such calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (with 0.000005 per cent. being rounded up to 0.00001 per cent.), (b) all US dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one half cent being rounded up), (c) all Japanese Yen amounts used in or resulting from such calculations will be rounded downwards to the next lower whole Japanese Yen amount, and (d) all amounts denominated in any other currency used in or resulting from such calculations will be rounded to the nearest two decimal places in such currency, with 0.005 being rounded upwards.
The Final Terms in respect of each Tranche of Notes (other than Exempt Notes) will be substantially in the following form and completed to reflect the particular terms of the relevant Notes and their issue.
Final Terms dated []
Issue of [Aggregate Principal Amount of Tranche] [Title of Notes]
Terms used herein shall be deemed to be defined as such for the purposes of the Conditions (the Conditions) set forth in the base prospectus dated 16 December 2016 [and supplement(s) to it dated [] which [together] constitute[s] a base prospectus (the Base Prospectus) for the purposes of Directive 2003/71/EC (as amended including by Directive 2010/73/EU and includes any relevant implementing measures in a relevant Member State of the European Economic Area) (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 the Base Prospectus.
Full information on the Issuer and the offer of the Notes described herein is only available on the basis of the combination of these Final Terms and the Base Prospectus. The Base Prospectus has been published on http://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
[Terms used herein shall be deemed to be defined as such for the purposes of the [Insert relevant date of the Conditions] Conditions (the Conditions) incorporated by reference in the base prospectus dated 16 December 2016. These Final Terms contain the final terms of the Notes and must be read in conjunction with the base prospectus dated 16 December 2016 [and the supplement(s) to it dated [date]] which [together] constitute[s] a base prospectus (the Base Prospectus) for the purposes of Directive 2003/71/EC (as amended including by Directive 2010/73/EU and includes any relevant implementing measures in a relevant Member State of the European Economic Area) (the Prospectus Directive), save in respect of the Conditions which are set forth in the base prospectus dated [the original date] and are incorporated by reference in the Base Prospectus. This document constitutes the Final Terms relating to the issue of Notes described herein for the purposes of Article 5.4 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, the base prospectus dated 16 December 2016 [and the supplement[s]) dated [] [and []]]. The Base Prospectus has been published on http://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
| 1. | Issuer: | Sandvik AB (publ) | |
|---|---|---|---|
| 2. | [(i) | Series Number:] | [] |
| [(ii) | Tranche Number: | [] | |
| [(iii) | Date on which Notes become fungible: |
[Not Applicable/The Notes shall be consolidated, form a single series and be interchangeable for trading purposes with [] on [/the Issue Date/Exchange of the Temporary Global Note for interests in the Permanent Global Note, as referred to in paragraph [24][which is expected to occur on or about []]].] |
|
| 3. | Specified Currency or Currencies: | [] | |
| 4. | Aggregate Principal Amount: | [] |
| [(i)] | [Series]: | [] | |
|---|---|---|---|
| [(ii) | Tranche: | []] | |
| 5. | Issue Price: | [] per cent. of the Aggregate Principal Amount [plus accrued interest from []] |
|
| 6. | (i) | Specified Denominations: | [] |
| (ii) | Calculation Amount: | [] | |
| 7. | (i) | Issue Date: | [] |
| (ii) | Interest Commencement Date: |
[] [Issue Date] [Not Applicable] | |
| 8. | Maturity Date: | [] | |
| 9. | Interest Basis: | [[] per cent. Fixed Rate] [[] +/- [] per cent. Floating Rate] [Zero Coupon] |
|
| 10. | Redemption/Payment Basis: | Subject to any purchase and cancellation or early redemption, the Notes will be redeemed on the Maturity Date at the Final Redemption Amount. |
|
| 11. | Put/Call Options: | [Not Applicable] [Investor Put] [Issuer Call] [(further particulars specified below)] |
| 12. | Fixed Rate Note Provisions | [Applicable] [Not Applicable] | |
|---|---|---|---|
| (i) | Rate[(s)] of Interest: | [] per cent. per annum payable in arrear on each Interest Payment Date |
|
| (ii) | Interest Payment Date(s): | [[] [and []] in each year [adjusted in accordance with []/not adjusted]] |
|
| (iii) | Fixed Coupon Amount[(s)]: | [[] per Calculation Amount] [Not Applicable] | |
| (iv) | Interest Payment Date adjustment (for Renminbi or Hong Kong dollar denominated Note): |
[Applicable] [Not Applicable] | |
| (v) | Broken Amount(s): | [Not Applicable/[] per Calculation Amount, payable on the Interest Payment Date falling [in/on] []] [Not Applicable] |
|
| (vi) | Day Count Fraction: | [30/360 / Actual/Actual (ICMA/ISDA)/other] | |
| (vii) | [Determination Dates: | [] [and []] in each year][Not Applicable] | |
| 13. | Floating Rate Note Provisions | [Applicable] [Not Applicable] | |
| (i) | Interest Period(s): | [] | |
| (ii) | Specified Period: | [] [Not Applicable] |
| (iii) | Specified Interest Payment Dates: |
[[] in each year, [subject to adjustment in accordance with the Business Day Convention set out in (v) below/not subject to any adjustment, as the Business Day Convention set out in (v) below is specified to be Not Applicable] [Not Applicable] |
|---|---|---|
| (iv) | First Interest Payment Date: | [] |
| (v) | Business Day Convention: | [Floating Rate Convention/Following Business Day Convention/ Modified Following Business Day Convention/ Preceding Business Day Convention/Not Applicable] |
| (vi) | Additional Business Centre(s): |
[Not Applicable] [] |
| (vii) | Manner in which the Rate(s) of Interest is/are to be determined: |
[Screen Rate Determination] [ISDA Determination] |
| (viii) | Party responsible for calculating the Rate(s) of Interest and/or Interest Amount(s) (if not the [Fiscal Agent]): |
[[] shall be the Calculation Agent/Not Applicable] |
| (ix) | Screen Rate Determination: | [Applicable] [Not Applicable] |
| Reference Rate: |
[[] month] [LIBOR/EURIBOR/STIBOR] | |
| Interest Determination Date(s): |
[] | |
| Relevant Screen Page: |
[] | |
| Relevant Time: |
[] | |
| Relevant Financial Centre: |
[] | |
| (x) | ISDA Determination: | [Applicable] [Not Applicable] |
| Floating Rate Option: |
[] | |
| Designated Maturity: |
[] | |
| Reset Date: |
[] | |
| (xi) | 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] |
| (xii) | Margin(s): | [+/-][] per cent. per annum |
| (xiii) | Minimum Rate of Interest: | [Not Applicable] [[•] per cent. per annum] | |
|---|---|---|---|
| (xiv) | Maximum Rate of Interest: | [Not Applicable] [[] per cent. per annum] | |
| (xv) | Day Count Fraction: | [] [Actual/Actual (ICMA)] [Actual/Actual (ISDA)] [Actual/365 (Fixed) ] [Actual/360] [30/360] [30E/360] [30E/360 (ISDA)] [Other] |
|
| 14. | (i) | Zero Coupon Note Provisions Accrual Yield: |
[Applicable] [Not Applicable] [] per cent. per annum |
| (ii) | Reference Price: | [] | |
| (iii) | Day Count Fraction in relation to Early Redemption Amounts and late payment: |
[] | |
| PROVISIONS RELATING TO REDEMPTION | |||
| 15. | Call Option | [Applicable] [Not Applicable] | |
| (i) | Optional Redemption Date(s) (Call): |
(If not applicable, delete the remaining sub paragraphs of this paragraph) [] |
|
| (ii) | Optional Redemption Amount(s) (Call) of each Note: |
[[] per Calculation Amount] [Make-Whole Redemption Price] [in the case of the Optional Redemption Date(s) falling [on []]/[in the period from and including [date] but excluding [date]] |
|
| (iii) | Make-Whole Redemption Price: |
[Spens Amount] [Make-Whole Redemption Amount] [Not Applicable] |
|
| (If not applicable, delete the remaining subparagraphs of this paragraph) |
|||
| Reference Bond: |
[] | ||
| Quotation Time: |
[] | ||
| Redemption Margin: |
[] per cent. | ||
| Determination Date: |
[] | ||
| Determination Agent: |
[] | ||
| (iv) | If redeemable in part: | [Applicable] [Not Applicable] |
(a) Minimum Redemption Amount: [] per Calculation Amount (b) Maximum [] per Calculation Amount
[]
[] per Calculation Amount
[] per Calculation Amount
Redemption Amount:
Early Redemption Amount(s) per Calculation Amount payable on redemption for taxation reasons or on event of default or other early redemption:
[[] per Calculation Amount] [Condition 10(g) applies]
[Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes on [60] days' notice/at any time/in the limited circumstances specified in the Permanent Global Note]
[Temporary Global Note exchangeable for Definitive Notes on or after the Exchange Date]
[Permanent Global Note exchangeable for Definitive Notes on [60] days' notice/at any time/in the limited circumstances specified in the Permanent Global Note]]
[Registered Notes]
[Global Registered Notes registered in the name of a nominee for [a common depositary for Euroclear Bank NA/SV and Clearstream Banking, S.A., a Common Safekeeper for Euroclear Bank NA/SV and Clearstream Banking, S.A. (that is, held under NSS)]]
[Swedish Registered Notes
Registrar: Euroclear Sweden
| Swedish Issuing Agent: []] | ||||
|---|---|---|---|---|
| ----------------------------- | -- | -- | -- | -- |
| 20. | (i) New Global Note: | [Yes] [No] |
|---|---|---|
| (ii) New Safekeeping Structure: | [Yes] [No] | |
| 21. | Additional Financial Centre(s) or other special provisions relating to payment dates: |
[Not Applicable/[]] |
| 22. | Talons for future Coupons or Receipts to be attached to Definitive Notes (and dates on which such Talons mature): |
[Yes/No.][As the Notes have more than 27 coupon payments, talons may be required if, on exchange into definitive form, more than 27 coupon payments are left.] |
| 23. | RMB Settlement Centre(s): | [] [Hong Kong] [Not Applicable] |
[[] 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.]
Signed on behalf of Sandvik AB (publ):
By:..............................................................................
Duly authorised
Listing and admission to trading: [Application has been made by the Issuer (or on its behalf) for the Notes to be admitted to the Official List of the UK Listing Authority and to trading on the Regulated Market with effect from [].] [Application is expected to be made by the Issuer (or on its behalf) for the Notes to be admitted to listing on the Official List of the UK Listing Authority and to trading on the Regulated Market with effect from [].]
[]
Estimate of total expenses related to admission to trading:
Ratings: The Notes to be issued [have been/are expected to be] rated:
[[S&P's Credit Market Services Europe Limited]: "[]"]
[]
| i. | Reasons for the offer: | [] |
|---|---|---|
| ii. | Estimated net proceeds: | [] |
Indication of yield: []
Calculated as [] on the Issue Date.
As set out above, the yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.]
i. ISIN: []
ii. Common Code: []
relevant identification number(s):
iii. Any clearing system(s) other than Euroclear Bank SA/NV and Clearstream Banking, S.A. and the
[Not Applicable/]
[Euroclear Sweden Identification number:]
iv. Delivery: Delivery [against/free of] payment
[Yes. Note that the designation "yes" simply means that the Notes are intended upon issue to be deposited with one of the ICSDs as common safekeeper [(and registered in the name of a nominee of one of the ICSDs acting as common safekeeper)][include this text for Registered Notes] and does not necessarily mean that the Notes will be recognised 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. Such recognition will depend upon the ECB being satisfied that Eurosystem eligibility criteria have been met.]
[No. Whilst the designation is specified as "no" at the date of this Pricing Supplement, 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 registered in the name of a nominee of one of the ICSDs acting as common safekeeper)][include this text for 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. Such recognition will depend upon the ECB being satisfied that Eurosystem eligibility criteria have been met.]
US Selling Restrictions: [Reg. S Compliance 2/Not Applicable]
[TEFRA C/TEFRA D/TEFRA not applicable]
The Pricing Supplement which will be completed for each Tranche of Exempt Notes, whatever the denomination of those notes, issued under the Programme will be substantially in the following form, duly supplemented, amended as necessary to reflect the particular terms of the relevant Notes and their issue.
Pricing Supplement dated []
Issue of [Aggregate Principal Amount of Tranche] [Title of Notes]
Any person making or intending to make an offer of the notes described in this Pricing Supplement (the Notes) may only do so in circumstances in which no obligation arises for the Issuer or any Dealer to publish a prospectus pursuant to Article 3 of the Directive 2003/71/EC (as amended including by Directive 2010/73/EU and includes any relevant implementing measures in a relevant Member State of the European Economic Area) (the Prospectus Directive) or supplement a prospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such offer.
This document constitutes the Pricing Supplement for the Notes described herein. [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 16 December 2016 and the supplement(s) to it dated []] (the Base Prospectus). Full information on the Issuer and the offer of the notes is only available on the basis of the combination of this Pricing Supplement and the Base Prospectus. The Base Prospectus is available for viewing at and copies may be obtained from the registered office of the Issuer at Kungsbron 1, Uppgång G, Plan 6, Box 510 Stockholm SE-101 30, Sweden, and at the registered office of the Paying Agent, Citibank N.A., London Branch, 14th Floor, Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB United Kingdom.]
[Terms used herein shall be deemed to be defined as such for the purposes of the Conditions (the Conditions) set forth in the Base Prospectus dated [the original date] [and the supplement[(s)] to it dated [date]] which are incorporated by reference in the Base Prospectus dated 16 December 2016. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of this Pricing Supplement and the Prospectus dated 16 December 2016 and the supplement(s) to it dated [] and []]. [The Prospectus dated 16 December 2016 [and supplement[s] to it] [is] [are] available for viewing at and copies may be obtained from the registered office of the Issuer at Kungsbron 1, Uppgång G, Plan 6, Box 510 Stockholm SE-101 30, Sweden, and at the registered office of the Paying Agent, at the offices of the Paying Agent, Citibank N.A., London Branch, 14th Floor, Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB United Kingdom.]]
[Include whichever of the following apply or specify as "Not Applicable". Note that the numbering should remain as set out below, even if "Not Applicable" is indicated for individual paragraphs or sub-paragraphs. Italics denote guidance for completing the Pricing Supplement.]
| 1. Issuer: |
Sandvik AB (publ) | |
|---|---|---|
| --------------- | ------------------- | -- |
The Notes will be consolidated and form a single Series with [] 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 []] [Not Applicable]
[(i) Series: []]
[(ii) Tranche: []]
(ii) Calculation Amount: []
[Insert total principal amount of outstanding Notes, including the Tranche which is the subject of this Pricing Supplement]
Issue Price: [] per cent. of the Aggregate Principal Amount [plus accrued interest from [] (if applicable)]
(i) Specified Denomination(s): [] [and integral multiples of [] in excess thereof [up to and including []]]. No Notes in definitive form will be issued with a denomination above [].
[So long as the Notes are represented by a Temporary Global Note or Permanent Global Note and the relevant clearing system(s) so permit, the Notes will be tradeable only in principal amounts of at least the Specified Denomination (or if more than one Specified Denomination, the lowest Specified Denomination) and higher integral multiples of [], notwithstanding that no Definitive Notes will be issued with denominations above [].]
[If only one Specified Denomination, insert the Specified Denomination. If more than one Specified Denomination, insert the highest common factor][N.B. there must be a common factor in the case of two or more Specified Denominations]
[specify date or (for Floating Rate Notes) Interest Payment Date falling in or nearest to the relevant month and year]
| 10. | Redemption/Payment Basis: | [Redemption at par] [Other (specify)] |
|---|---|---|
| [11. | Change of Interest or Redemption Basis: | [] [Not Applicable] [Specify details of any provision for convertibility of Notes into another Interest and/or Redemption Basis] |
| 12. | Put/Call Options: | [Issuer Call][Issuer Put][Not Applicable] [further particulars specified below)] |
| 13. | Fixed Rate Note Provisions | [Applicable][Not Applicable] [If not applicable, delete the remaining sub paragraphs of this paragraph] |
||
|---|---|---|---|---|
| (i) | Rate[(s)] of Interest: | [] per cent. per annum payable in arrear on each Interest Payment Date |
||
| (ii) | Interest Payment Date(s): | [[] [and []] in each year adjusted in accordance with []/ not adjusted]] |
||
| (iii) | Fixed Coupon Amount[(s)]: | [[] per Calculation Amount] [Not Applicable] | ||
| (iv) | Interest Payment Date adjustment (for Renminbi or Hong Kong dollar denominated Note): |
[Applicable] [Not Applicable] | ||
| (v) | Broken Amount(s): | [Not Applicable/[] per Calculation Amount, payable on the Interest Payment Date falling [in/on] []] [Not Applicable] |
||
| (vi) | Day Count Fraction: | [30/360/ Actual/Actual (ICMA/ISDA) / other] [Other (specify)] |
||
| (vii) | Determination Dates: | [[] in each year] [Not Applicable] | ||
| [Insert regular Interest Payment Dates, ignoring the Issue Date or Maturity Date in the case of a long or short first or last coupon. N.B. only relevant where Day Count Fraction is Actual/Actual (ICMA)] |
||||
| (viii) | Name and address of person responsible for calculating Basis of Interest and Interest Amount: |
[] [Not Applicable] | ||
| (ix) | Other terms relating to the method of calculating interest for Fixed Rate Notes: |
[Specify details][Not Applicable] | ||
| 14. | Floating Rate Note Provisions | [Applicable][Not Applicable] | ||
| [If not applicable, delete the remaining sub paragraphs of this paragraph] |
||||
| (i) | Interest Period(s): | [] |
| (ii) | Specified Period: | [[]/Not Applicable] | ||
|---|---|---|---|---|
| (iii) | Specified Interest Payment Dates: |
[[] in each year, [subject to adjustment in accordance with the Business Day Convention set out in (v) below/not subject to adjustment in accordance with the Business Day Convention set out in (v) below as the Business Day Convention in (v) below is specified to be Not Applicable] [Not Applicable] |
||
| (iv) | First Interest Payment Date: | [] | ||
| (v) | Business Day Convention: | [Floating Rate Convention/Following Business Day Convention/Modified Following Business Day Convention/ Preceding Business Day Convention] [Other (specify)] [Not Applicable] |
||
| (vi) | Additional Business Centre(s): |
[Not Applicable] [] | ||
| (vii) | Manner in which the Rate(s) of Interest is/are to be determined: |
[Screen Rate Determination][ISDA Determination] [Other (specify)] |
||
| (viii) | Party responsible for calculating the Rate(s) of Interest and/or Interest Amount(s) (if not the Fiscal Agent): |
[[] shall be the Calculation Agent/ Not Applicable] | ||
| (ix) | Screen Rate Determination: | [Applicable][Not Applicable] | ||
| [If not applicable, delete the remainder of this sub paragraph (vi)] |
||||
| Reference Rate: |
[[] month] [LIBOR/EURIBOR/STIBOR] [Other (specify, including any amendment to fallback provisions)] |
|||
| Interest Determination |
[] | |||
| Date(s): | [Second London business day prior to the start of each Interest Period if LIBOR (other than Sterling or euro LIBOR), first day of each Interest Period if Sterling LIBOR and the second day on which the TARGET System is open prior to start of each Interest Period if EURIBOR or euro LIBOR] |
|||
| Relevant Screen Page: |
[] | |||
| [In the case of EURIBOR, if not Reuters EURIBOR 01, ensure it is a page which shows a composite rate or amend fallback provisions appropriately] |
||||
| Relevant Time: |
[] | |||
| Relevant Financial Centre: |
[] | |||
| (x) | ISDA Determination: | [Applicable][Not Applicable] |
[If not applicable, delete the remainder of this subparagraph (vii)]
Floating Rate Option: [] Designated Maturity: [] Reset Date: [] (xi) 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] (xii) Margin(s): [+/-] [] per cent. per annum (xiii) Minimum Rate of Interest: [] per cent. per annum (xiv) Maximum Rate of Interest: [] per cent. per annum (xv) Day Count Fraction: [] [Actual/Actual (ICMA) Actual/Actual (ISDA) Actual/365 (Fixed) Actual/360 30/360 30E/360 30E/360 (ISDA) Other] (xvi) Fallback provisions, rounding provisions, denominator and any other terms relating to the method of calculating interest on Floating Rate Notes, if different from those set out in the Conditions: [Specify][Not Applicable] 15. Zero Coupon Note Provisions [Applicable][Not Applicable] [If not applicable, delete the remaining subparagraphs of this paragraph] (i) Accrual Yield: [] per cent. per annum (ii) Reference Price: [] (iii) Any other formula/basis of determining amount payable: [Specify][Not Applicable] (iv) Day Count Fraction in relation to Early Redemption Amounts and late payment: [] 16. Index-Linked Interest Note/other variable linked interest Note Provisions [Applicable/Not Applicable] (If not applicable, delete the remaining subparagraphs of this paragraph)
| (i) | Index/Formula/other variable: |
[give or annex details] |
|---|---|---|
[]
(ii) Calculation Agent or other party responsible for calculating the interest due:
(iii) Provisions for determining Coupon where calculated by reference to Index and/or Formula and/or other variable:
(iv) Interest Determination Date(s): []
(v) Provisions for determining Coupon where calculation by reference to Index and/or Formula and/or other variable is impossible or impracticable or otherwise disrupted: []
(viii) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention/other (give details)]
(xii) Day Count Fraction: []
(If not applicable, delete the remaining subparagraphs of this paragraph)
[] [need to include a description of market disruption or settlement disruption events and adjustment provisions]
| 18. | Call Option | [Applicable] [Not Applicable] | ||
|---|---|---|---|---|
| (If not applicable, delete the remaining sub paragraphs of this paragraph) |
||||
| (i) | Optional Redemption Date(s) (Call): |
[] | ||
| (ii) | Optional Redemption Amount(s) (Call) of each Note: |
[[] per Calculation Amount] [Make-Whole Redemption Price] [in the case of the Optional Redemption Date(s) falling [on []]/[in the period from and including [date] but excluding [date]] |
||
| (iii) | Make-Whole Redemption Price: |
[Spens Amount] [Make-Whole Redemption Amount] [Not Applicable] (If not applicable, delete the remaining subparagraphs of this paragraph) |
||
| Reference Bond: |
[] | |||
| Quotation Time: |
[] | |||
| Redemption Margin: |
[] per cent. | |||
| Determination Date: |
[] | |||
| Determination Agent: |
[] | |||
| 19. | Noteholder Put Option | [Applicable][Not Applicable] | ||
| [If not applicable, delete the remaining sub paragraphs of this paragraph] |
||||
| (i) | Optional Redemption Date(s) (Put): |
[] | ||
| (ii) | Optional Redemption Amount(s) (Put) of each Note and method, if any, of calculation of such amount(s): |
[] per Calculation Amount [Other (specify)] [See Appendix] |
||
| (iii) | Notice period: | Minimum period: [15] days Maximum period: [30] days |
Early Redemption Amount(s) payable on redemption for taxation reasons or on event of default:
[[] per Calculation Amount][Condition 10(g) applies] [Other (specify)] [See Appendix]
| 22. | Form of Notes: | [Bearer Notes: |
|---|---|---|
| ----- | ---------------- | ---------------- |
[Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes on [60] days' notice/at any time/in the limited circumstances specified in the Permanent Global Note]
[Temporary Global Note exchangeable for [Definitive Notes on [] days' notice]]
[Permanent Global Note exchangeable for [Definitive Notes on [60] days' notice/at any time/in the limited circumstances specified in the Permanent Global Note]]
[Registered Notes]
[Not Applicable][]
[Swedish Registered Notes
Registrar: Euroclear Sweden
Swedish Issuing Agent: []]
[Yes/ No. If yes, give details]
Details relating to Instalment Notes: [Not Applicable/give details]
[Not Applicable/give details]
amount of each instalment, date on which each payment is to be made:
[Relevant third party information] has been extracted from [specify source]. 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 [specify source], no facts have been omitted which would render the reproduced information inaccurate or misleading.]
Signed on behalf of Sandvik AB (publ):
By:………………………………………
Duly authorised
Listing and admission to trading: [Application has been made by the Issuer (or on its behalf) for the Notes to be admitted to [] and listing on [] with effect from [].] [Application is expected to be made by the Issuer (or on its behalf) for the Notes to be admitted to listing on [] and listing on [] with effect from [].] [Not Applicable] [] [Not Applicable]
Estimate of total expenses related to admission to trading:
Ratings: The Notes to be issued [have been/are expected to be] rated:
[[S & P's Credit Market Services Europe Limited]: []]
[[Moody's Investors Service Ltd.]: []]
[[Fitch Ratings Ltd.]: []]
[]
| iii. | Estimated total expenses: | []] | |
|---|---|---|---|
| ii. | Estimated net proceeds: | [] | |
| i. | Reasons for the offer: | [] |
Indication of yield: []
Calculated as [] on the Issue Date.
As set out above, the yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.]
[Not Applicable/]
[Euroclear Sweden Identification number:]
iv. Delivery: Delivery [against/free of] payment
[Yes/No]
[Yes. Note that the designation "yes" simply means that the Notes are intended upon issue to be deposited with one of the ICSDs as common safekeeper [(and registered in the name of a nominee of one of the ICSDs acting as common safekeeper)][include this text for Registered Notes] and does not necessarily mean that the Notes will be recognised 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. Such recognition will depend upon the ECB being satisfied that Eurosystem eligibility criteria have been met.]
[No. Whilst the designation is specified as "no" at the date of this Pricing Supplement, 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 registered in the name of a nominee of one of the ICSDs acting as common safekeeper)][include this text for 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. Such recognition will depend upon the ECB being satisfied that Eurosystem eligibility criteria have been met.]
Additional Selling Restrictions: []
US Selling Restrictions: [Reg. S Compliance 2/Not Applicable]
[TEFRA C/TEFRA D/TEFRA not applicable]
In relation to any Tranche of Notes represented by a Global Note in bearer form, references in the Conditions to Noteholder are references to the bearer of the relevant Global Note which, for so long as the Global Note is held by a depositary or a common depositary, in the case of a CGN, or a common safekeeper, in the case of an NGN for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system, will be that depositary or common depositary or, as the case may be, common safekeeper.
In relation to any Tranche of Notes represented by a Global Registered Note, references in the Conditions to Noteholder are references to the person in whose name such Global Registered Note is for the time being registered in the Register which, for so long as the Global Registered Note is held by or on behalf of a depositary or a common depositary for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system, will be that depositary or common depositary or a nominee for that depositary or, as the case may be, common safekeeper.
Each of the persons shown in the records of Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system as being entitled to an interest in a Global Note or a Global Registered Note (each, an Accountholder) must look solely to Euroclear and/or Clearstream, Luxembourg and/or such other relevant clearing system (as the case may be) for such Accountholder's share of each payment made by the Issuer to the holder of such Global Note or Global Registered Note and in relation to all other rights arising under such Global Note or Global Registered Note. The extent to which, and the manner in which, Accountholders may exercise any rights arising under the Global Note or Global Registered Note will be determined by the respective rules and procedures of Euroclear and Clearstream, Luxembourg and any other relevant clearing system from time to time. For so long as the relevant Notes are represented by a Global Note or Global Registered Note, Accountholders shall have no claim directly against the Issuer in respect of payments due under the Notes and such obligations of the Issuer will be discharged by payment to the holder of such Global Note or Global Registered Note.
Each Global Note and Global Registered Note will contain provisions which modify the Conditions as they apply to the Global Note or Global Registered Note. The following is a summary of certain of those provisions:
Payments: All payments in respect of the Global Note or Global Registered Note which, according to the Conditions, require presentation and/or surrender of a Note, Note Certificate or Coupon, will be made against presentation and (in the case of payment of principal in full with all interest accrued thereon) surrender of the Global Note or Global Registered Note to or to the order of any Paying Agent and will be effective to satisfy and discharge the corresponding liabilities of the Issuer in respect of the Notes. On each occasion on which a payment of principal or interest is made in respect of the Global Note, the Issuer shall procure that in respect of a CGN the payment is noted in a schedule thereto and in respect of an NGN or a Global Registered Note held in NSS, the payment is entered pro rata in the records of Euroclear and Clearstream, Luxembourg.
Exercise of put option: In order to exercise the option contained in Condition 10(e) (Redemption at the option of Noteholders) the bearer of the Permanent Global Note must, within the period specified in the Conditions for the deposit of the relevant Note and put notice, give written notice of such exercise to the Fiscal Agent specifying the principal amount of Notes in respect of which such option is being exercised. Any such notice will be irrevocable and may not be withdrawn.
Partial exercise of call option: In connection with an exercise of the option contained in Condition 10(c) (Redemption at the option of the Issuer) in relation to some only of the Notes, the Permanent Global Note or Global Registered Note may be redeemed in part in the principal amount specified by the Issuer in accordance with the Conditions and the Notes to be redeemed will not be selected as provided in the Conditions but in accordance with the rules and procedures of Euroclear and Clearstream, Luxembourg (to be reflected in the records of Euroclear and Clearstream, Luxembourg as either a pool factor or a reduction in principal amount, at their discretion).
Notices: Notwithstanding Condition 20 (Notices), while all the Notes are represented by a Permanent Global Note (or by a Permanent Global Note and/or a Temporary Global Note) or Global Registered Note and the Permanent Global Note is (or the Permanent Global Note and/or the Temporary Global Note are), or the Global Registered Note is, deposited with a depositary or a common depositary for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system or a common safekeeper, notices to Noteholders may be given by delivery of the relevant notice to Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system and, in any case, such notices shall be deemed to have been given to the Noteholders in accordance with Condition 20 (Notices) on the date of delivery to Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system.
Record Date: Each payment in respect of a Global Registered Note will be made to the person shown as the Holder in the Register at the close of business (in the relevant clearing system) on the Clearing System Business Day before the due date for such payment (the Record Date) where Clearing System Business Day means a day on which each clearing system for which the Global Registered Note is being held is open for business.
Payment Business Day: Notwithstanding the definition of Payment Business Day in Condition 2(a) (Definitions), while all the Notes are represented by a Permanent Global Note (or by a Permanent Global Note and/or a Temporary Global Note) or a Global Registered Note and the Permanent Global Note is (or the Permanent Global Note and/or the Temporary Global Note are), or the Global Registered Note is deposited with a depositary or a common depositary or a common safekeeper for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system, Payment Business Day means:
While any Global Note is held on behalf of, or any Global Registered Note is registered in the name of any nominee for, a clearing system, then:
effecting of such amendment. Any resolution passed in such manner shall be binding on all Noteholders and holders of Coupons, Talons and Receipts even if the relevant consent or instruction proves to be defective. As used in this paragraph, commercially reasonable evidence includes any certificate or other document issued by Euroclear, Clearstream, Luxembourg or any other relevant clearing system, or issued by an accountholder or participant of them or an intermediary in a holding chain, in relation to the holding of interests in the Notes. Any such certificate or other document shall, in the absence of manifest error, be conclusive and binding for all purposes. Any such certificate or other document may comprise any form of statement or print out of electronic records provided by the relevant clearing system (including Euroclear's EUCLID or Clearstream, Luxembourg's CreationOnline system) in accordance with its usual procedures and in which the accountholder of a particular principal or nominal amount of the Notes is clearly identified together with the amount of such holding. The Issuer shall not be liable to any person by reason of having accepted as valid or not having rejected any certificate or other document to such effect purporting to be issued by any such person and subsequently found to be forged or not authentic.
The net proceeds from the issue of each Series of Notes will be used for the Issuer's general corporate purposes. If in respect of any particular issue, there is a particular identified use of proceeds, this will be stated in the relevant Final Terms.
The Issuer was established in 1862 and incorporated in 1897 under the laws of Sweden as a public limited liability company (publikt aktiebolag). The Issuer is registered at the Swedish Companies Registration Office with registration number 556000-3468. The Issuer's principal place of business is at Kungsbron 1, Uppgång G, Plan 6, Box 510, Stockholm SE-101 30, Sweden and its telephone number is +46 (0) 26 26 00 00.
The Issuer is the ultimate parent company of approximately 250 operative subsidiaries with activities in more than 150 countries worldwide (as at 31 December 2015) and is dependent on the performance of the Group for the satisfaction of its obligations. References in this business description to the Group are to the Issuer and its subsidiaries (the Subsidiaries).
The Issuer was founded in 1862 by Göran Fredrik Göransson, who pioneered the Bessemer method for industrial-scale steel production. The Issuer belongs to a high-technology, engineering group with advanced products in selected areas. The Group's business is based on specialist capabilities and expertise in materials technology. The Group operates in three business areas (see below) focussing on three key product spheres:
According to its last Annual Report, as at 31 December 2015 the Group had about 46,000 employees and annual sales of SEK 90.822 billion.
The Group's business centres on the development, manufacturing, marketing and sale of technologically advanced engineering products and services, including industrial tools, mining and construction equipment and products comprising high-alloy metals. It operates on the basis of a long-term strategy of expansion whilst maintaining a commitment to the quality of its goods and taking into consideration its economic, corporate and environmental responsibility.
The Issuer believes that the Group's strengths are its:
financial strength;
strengthened sustainability programme, both internally and in relation to customers and suppliers;
In March 2016, the Group announced it will merge its Sandvik Mining and Sandvik Construction operations into one business area - Sandvik Mining and Rock Technology. In May 2016, the Group announced it will further consolidate into three business areas by reorganising its operations in Sandvik Venture. This included moving Wolfram (Wolfram Bergbau und Hütten) and two selected production sites from Sandvik Hyperion into Sandvik Machining Solutions; moving Sandvik Drilling and Completions (Varel) into Sandvik Mining and Rock Technology; and identifying Sandvik Process Systems and the remainder of Sandvik Hyperion as non-strategic operations and remaining in Sandvik Venture, which will now be labelled "other operations".
The Group's operations have a decentralised business model with separate product areas based on the product offerings. Each product area has full responsibility and accountability for its respective business. The new structure took effect on 1 July 2016.
As of 1 July 2016 the Group has consolidated into three business areas in line with the selected industries where the company has leading positions – the cutting tool industry, mining and rock technology and advanced special steel and special alloys. In addition, the Group has implemented a decentralised business model where the business decisions are made close to the customers. This will make the Group faster in responding to customers' requirements. The decentralised business model facilitates higher internal transparency and accountability and seeks to promote improved Group performance in the long term.
The strategy aims to shorten decision making in order to adapt to changing market conditions faster. Capital allocation is more strictly directed towards areas where the returns are high and value is added. The Group has also implemented model for performance management that is designed to focus on and promote continued improvements. Alternative structural solutions are evaluated on a regular basis for units that are of lower strategic importance or do not reach acceptable returns.
The Group's business model is founded on exploiting patented technology for the development and shaping of metals and other materials and its strategy enables each core business to develop and optimise product offerings as well as production, distribution and market channels.
Conducting its own core operations, such as manufacturing, ensures that the Issuer's products adhere to the Group's high and globally standardised performance and quality parameters. The Issuer's production organisation is strongly integrated with R&D. This creates favourable conditions for the ongoing development of new products and is a key competitive advantage for the Group.
Comprehensive and goal-oriented R&D is a prerequisite for each of the businesses in the Group. R&D activities are customer-focused and projects are managed in close co-operation with the customer. To ensure maximum customer value, R&D is based on leading, unique technology and active patent work. Research is focused on a number of priority areas, such as developing new materials, efficient industrial processes including automation and information communication technology (ICT), energy efficiency and additive manufacturing (3-D printing). R&D also enhances manufacturing processes and facilitates more efficient production lines.
In order to create maximum leverage within each core business and to optimise the organisation for growth and profitability including new and smaller adjacent businesses, the operation has been organised into three business areas. Each product area has full responsibility and accountability for its respective business.
Sandvik Mining and Rock Technology offers equipment and tools, service and technical solutions for the mining and construction industries. As at 30 September 2016 Sandvik Mining and Rock Technology had 14,049 employees and an operating profit of SEK 2.220 billion.
Sandvik Machining Solutions offers productivity enhancing products and solutions for advanced industrial metal cutting. As at 30 September 2016 Sandvik Machining Solutions had 18,103 employees and an operating profit of SEK 5.087 billion.
Sandvik Materials Technology offers high value-added advanced metal products designed for niche applications. As at 30 September 2016 Sandvik Materials Technology had 6,477 employees and an operating profit of SEK 711 million.
In July 2016, the Issuer signed an agreement to divest its Mining Systems operations to the private equity company CoBe Capital. The Issuer will maintain ownership of ongoing projects which are close to finalisation (for more detail see "Acquisition and Divestments" below).
The Group recently went through a restructuring into three business areas and implemented a more decentralised business model, targeting improved transparency, accountability and speed. The Group carried out important product launches and introduced digital tools for use in the cutting tool industry and also launched new battery powered mining equipment. Although organic growth declined by 5 per cent., the operating result improved by 13 per cent. in the third quarter of 2016 compared to the same period in 2015. The operating margin improved significantly to 13.3 per cent. in the third quarter of 2016 (compared to 11.2 per cent. in the same period in 2015), as a result of ongoing efficiency programs and strict cost control. Even excluding the positive impact from changes in exchange rates, earnings still showed an improvement. Organic order intake remained stable compared with the corresponding period last year, resulting in a neutral ratio of orders received to the amount billed for the period (book-to-bill ratio). The three major regions - Europe, North America and Asia - reported flat to positive growth in order intake, while other regions declined. Sandvik Mining and Rock Technology reported growth in order intake on the back of favourable development for mining equipment. During the quarter, there were initial signs of improvement in the segment for exploration mining and customer activity in the automotive and general engineering segments remained stable. Although demand in the energy segment declined overall, Sandvik Materials Technology received a large order for products related to the oil and gas industry.
Order intake for the third quarter remained on par with the same period last year at fixed exchange rates for comparable units. Notably, order intake excluding major orders also remained stable. The three major regions - Europe, North America and Asia - reported flat to positive growth in order intake, whilst other regions declined. China had a positive impact on order intake in the Asia region. Sandvik Mining and Rock Technology was the primary driver of organic order growth at 5 per cent. in the third quarter of 2016 compared to the third quarter in 2015 (such comparison for such periods as used in this Base Prospectus, year on year) driven predominantly by good progress in the mining equipment business. Sandvik Materials Technology reported stable order intake while Sandvik Machining Solutions declined by 4 per cent. Demand in the energy segment remained muted, although Sandvik Materials Technology received a major order from the oil and gas industry. In the mining segment, initial signs of higher activity were noted in the exploration business, albeit from a very low level. The aftermarket business remained stable compared with the same period last year. The automotive segment remained stable overall, the result of higher activity in Asia, while Europe remained stable and North America declined. Further, the general engineering and construction segments remained stable overall. Changes in exchange rates had a negative impact of about -1 per cent. on order intake and a neutral impact on revenues.
Both operating profit and operating margin improved compared with the same period last year. Operating profit improved by 13 per cent. to SEK 2.623 billion. The operating margin amounted to 13.3 per cent., representing an improvement even when excluding the positive impact of 0.4 per cent. from changes in the exchange rates. Total selling and administration expenses were reduced by 3 per cent. year on year, corresponding to SEK 143 million primarily related to sales costs. The ratio to revenues remained unchanged at 22 per cent. Savings from announced ongoing structural and other improvement programmes amounted to SEK 193 million compared with the preceding year, including a reduction in sales and administration costs. The depreciation of the SEK against some trading currencies as well as the impact from revaluation of balance sheet items had a positive impact on the operating profit of SEK 62 million for the quarter. Favourable changes metal prices positively impacted results by SEK 51 million. The tax rate in the third quarter was 27.5 per cent. for continuing operations. The total tax rate for the Group was 50.1 per cent. for the quarter, which was adversely impacted by a non-deductible capital loss of SEK 847 million related to discontinued operations, as previously announced.
Total assets for the Group decreased year on year primarily due to the impact of a reduction in net working capital. Total assets remained largely stable compared with the preceding quarter. Net working capital decreased by SEK 1.790 billion year on year to a total of SEK 21.583 billion. The decrease was supported by the focused volume reduction of net working capital during 2015. Net working capital in relation to revenues was reduced to 29 per cent. There was a seasonal reduction of net working capital compared with the preceding quarter.
Investments in tangible and intangible assets in the third quarter amounted to SEK 871 million corresponding to 87 per cent. of scheduled depreciations. Investments are seasonally higher in the second half of the year.
Financial net debt declined to SEK 33.477 billion in the third quarter, compared to SEK 35.385 billion in the preceding quarter. Consequently, the net debt to equity ratio was reduced year on year to 0.95. The net pension liability increased to SEK 7.610 billion due to lowered discount rates. Interest-bearing debt with short-term maturity accounted for 15 per cent. of total debt.
Cash flow from operations improved year on year and amounted to SEK 4.5 billion. The higher level of operating cash flow was primarily related to a higher operating result and lower tax payments, the free operating cash flow improved by 12 per cent. year on year to SEK 4.3 billion.
Order intake exceeded revenues for a book-to-bill ratio of 102 per cent. Organic order intake improved by 5 per cent year on year while revenues declined by 5 per cent. due to a recent subdued order intake. The following key items impacted orders and revenues compared to the same period last year:
there were initial signs of higher customer activity, albeit from a low level, in the mining exploration business predominantly related to gold;
demand related to construction remained stable year on year with the relatively stronger customer activity in tunnelling;
Operating profit declined by 10 per cent. and the operating margin contracted year on year to 10.5 per cent. The following items impacted operating profit and margin:
The underlying market for Mining Systems (discontinued operations) remained challenging as customers continued to postpone projects; consequently, price pressure remained tangible. Order intake declined by 54 per cent. year on year and revenues declined by 47 per cent. year on year at fixed exchange rates for comparable units. The operating loss amounted to SEK 1.012 billion, including a capital loss of SEK 847 million. Changes in exchange rates impacted earnings positively by SEK 4 million.
During the third quarter the Issuer signed an agreement to divest its Mining Systems operations. Completion of the deal is expected to take place in the fourth quarter of 2016.
Demand in Asia remained largely stable at -1 per cent., while Europe and North America declined by 3 per cent. and 7 per cent., respectively. The following key items impacted orders and revenues compared to the same period last year:
Despite negative organic growth, the operating profit improved by 11 per cent. and the operating margin was 21.0 per cent., including a positive currency impact. The following items impacted operating profit and margin:
Organic order intake remained stable year on year, which was supported by a large order to the oil and gas industry. Lower alloy surcharges, primarily related to nickel, adversely impacted both order intake and revenues by 2 per cent. The following key items impacted orders and revenues compared to the same period last year:
The reported operating margin was 6.7 per cent. and the underlying operating margin, excluding the impact of metal price effects, was adversely impacted by changes in the exchange rates and decreased to 5.0 per cent. The following key items impacted operating profit and margin:
Organic order intake remained largely stable in the third quarter of 2016 at -1 per cent., supported by good development for Process Systems, compared with same period last year whilst revenues declined by 6 per cent. The following key items impacted orders and revenues compared to the same period last year:
Operating earnings improved by 5 per cent. and the operating margin increased to 10.2 per cent. year on year, supported primarily by positive impact from changes in the exchange rates. The following key items impacted operating profit and margin:
The Issuer's revenues during the third quarter of 2016 amounted to SEK 10.988 billion (compared with SEK 11.610 billion for the same period in 2015) and the operating loss was SEK 200 million (compared with -SEK 850 million for the same period in 2015). Income from shares in the Group consists primarily of dividends and amounted to SEK 1.238 billion after the end of the third quarter. Interest-bearing liabilities and provisions, less cash and cash equivalents and interest-bearing assets, amounted to SEK 12.771 billion. Investments in property, plant and machinery amounted to SEK 586 million compared with SEK 588 million year on year.
On 15 September 2015, the Issuer acquired 100 per cent. of the shares in SGL Technology B.V. (SGL). A cash payment of SEK 11 million was made for the shares. SGL is a manufacturer of industrial processing equipment for the food processing industry. The core capabilities of the company are within steel beltbased equipment for industrial processing of chocolate and other belt equipment for processing of agrifood and non-food products. SGL's offering consists of new equipment as well as service and spare parts. The company has over 30 years of experience in developing processing solutions for customers in the food segment. The acquisition will widen the Issuer's product portfolio of industrial solutions for customers in the food processing business and, in combination with the Issuer's existing capabilities, it will strengthen the market position of the Issuer.
On 25 January 2016 the Issuer acquired 100 per cent. of the shares in Prometec GmbH (Prometec), a supplier of advanced solutions for monitoring and control of machining processes in production machines. Prometec also supplies equipment for laser beam diagnostics and primarily operates in the European and North American market. A large part of the customer base comes from the global automotive industry. Prometec has 35 employees and had in the fiscal year 2014/2015 sales of approximately SEK 48 million. Prometec will be integrated with Sandvik Coromant, a product area within Sandvik Machining Solutions. The acquisition of Prometec is a step forward in Sandvik Machining Solutions' focus on digital solutions and to further drive the development of digital offerings to customers and add value to the customers' value chain.
On 18 July 2016 the Issuer announced that it had signed an agreement to divest its Mining Systems operations - reported in the Issuer's income statement as discontinued operations – to the private equity company CoBe Capital. The Issuer will maintain ownership of ongoing projects that are close to finalisation. The transaction is expected to close in the fourth quarter of 2016, subject to satisfaction of certain conditions precedents. The parties have agreed not to disclose the purchase price. The transaction resulted in a capital loss of SEK 847 million which impacted the result of the Issuer's discontinued operations for the third quarter of 2016. Mining Systems is a supplier of design and engineering of material handling systems for the mining industry. In 2015 the Mining Systems operations, with 1,100 employees, had annual sales of SEK 5.000 billion representing 6 per cent. of Sandvik Group revenues, and an operating loss was reported at a low single digit margin level.
| Business area | Company/unit | Closing date | Annual revenue (SEK '000,000) |
No of employees |
|---|---|---|---|---|
| Sandvik Machining Solutions |
Prometec GmbH | 25 January 2016 |
48 | 35 |
| Sandvik Venture |
SGL Technology B.V. |
15 September 2015 |
60 | 20 |
The Board of Directors of the Issuer (the Board) has responsibility for the Issuer's organisation and the management of the company's business. The Board continuously monitors the Issuer's and the Group's financial position. The Board ensures that the Issuer's organisation is designed in a way that ensures that the accounts, the management of assets, and the Issuer's financial condition are satisfactorily controlled. The Issuer's President and Chief Executive Officer (CEO) is responsible for the daily operations pursuant to guidelines and instructions issued by the Board. The distribution of responsibilities between the Board and the President and CEO is laid down in written terms of reference.
The principal tasks of the Board are to:
The Board is elected at the annual meeting of shareholders and has nine members (Directors). The union organisations are entitled to representation on the Board and have appointed two additional ordinary members and two deputies.
Johan Molin, b. 1959. Chairman of the Board since 2015. Chairman of the Remuneration Committee.
Education and business experience: Degree from the Stockholm School of Economics. President and CEO of ASSA ABLOY since 2005, President and CEO of Nilfisk-Advance 2001–2005 and various positions within the Atlas Copco Group 1983–2001.
Current Board assignments: Director of ASSA ABLOY AB.
Jennifer Allerton, b. 1951. Director of the Issuer since 2015
Education and business experience: M.Sc. in Physics and B.Sc. in Mathematics, Physical Sciences and Geosciences. Chief Information Officer at F. Hoffmann-La Roche Ltd 2002–2012, Technology Director at Barclaycard 1999–2002 and various positions at ServiceNet, USA, BOC (now Linde), Cable & Wireless Business Networks and Unilever plc.
Current Board assignments: Director of Iron Mountain Inc, AVEVA Group plc and Oxford Instruments plc.
Claes Boustedt, b. 1962. Director of the Issuer since 2015. Chairman of the Audit Committee.
Education and business experience: MBA. Vice President of L E Lundbergföretagen AB since 1997 and President of L E Lundberg Kapitalförvaltning AB since 1995.
Current Board assignments: Director of Hufvudstaden AB.
Jürgen M Geissinger, b. 1959. Director of the Issuer since 2012.
Education and business experience: PhD in Mechanical Engineering. CEO of Senvion Holding GmbH since 2015. President and CEO in Schaeffler AG 1998–2013 and various senior positions at ITT Automotive 1992–1998.
Current Board assignments: Director of the Supervisory Board of MTU Aero Engines AG.
Johan Karlström, b. 1957. Director of the Issuer since 2011. Member of the Remuneration Committee.
Education and business experience: MSc (Eng.), President of Skanska AB since 2008, various senior positions at BPA (currently Bravida) 1995–2000.
Current Board assignments: Director of Skanska AB.
Björn Rosengren, b. 1959. President and CEO of the Issuer since November 2015, Director of the Issuer since 2016
Education and business experience: M.Sc. in Technology. President and CEO of Wärtsilä 2011–2015. Senior Executive Vice President Atlas Copco AB and Business Area President for Construction and Mining Technique 2002–2011. President of the Atlas Copco Rock Drilling Equipment division 2001– 2002. President of the Atlas Copco Craelius division 1998–2001. General Manager of Nordhydraulic, Nordwin AB, Sweden 1995–1998. Various positions within ESAB Group 1985–1995.
Current Board assignments: Director of Danfoss A/S
Helena Stjernholm, b. 1970. Director of the Issuer since 2016. Member of the Audit Committee
Education and business experience: M.Sc. Econ. President and CEO of AB Industrivärden since 2015. Prior to joining Industrivärden, she was a partner in the private equity firm IK Investment Partners where she had worked since 1998. She was a member of the firm's Executive Committee as well as the Investment Committee. She has served as a member on numerous Swedish and foreign companies' boards.
Current Board assignments: Board member in AB Industrivärden, AB Volvo and Telefonaktiebolaget LM Ericsson.
Lars Westerberg, b. 1948. Director of the Issuer since 2010. Member of the Audit Committee and the Remuneration Committee.
Education and business experience: MSc (Eng.) and BSc (Econ.), CEO and President of Autoliv Inc. 1999–2007, Gränges AB 1994–1999 and ESAB 1991–1994. Various positions in ESAB and ASEA from 1972.
Current board assignments: Director of SSAB, AB Volvo, Stena AB and Meda AB.
Thomas Lilja, b. 1975, Director of the Issuer since 2016 (Employee representative)
Education and business experience: Technical College Graduate - Mechanical Engineering. Chairman trade Union, Unionen Sandvik Sweden and Unionen Coromant & Machining Solutions. Process & System Coordinator Direct Purchasing at Sandvik Tooling 2007-2010, Professional Buyer Direct Material at Sandvik Coromant/Tooling 2000-2007, Various positions within production and logistics at Scania 1995-2000.
Current Board assignments: None.
Tomas Kärnström, b. 1966. Director of the Issuer since 2006 (Employee representative).
Education and business experience: Principal safety representative Sandvik Materials Technology. Various positions within the Group since 1986.
Current Board assignments: None.
Thomas Andersson, b. 1962. Deputy Director of the Issuer since 2012 (Employee representative).
Education and business experience: Chairman of the Union Committee, Metal Workers' Union, Sandvik Coromant, Gimo. Various operator positions within Gimoverken since 1984. Construction firm Anders Diös 1980–1984.
Current Board assignments: None.
Mats W Lundberg, b. 1974. Deputy Director of the Issuer since 2015 (Employee representative).
Education and business experience: Master of Science and PhD in Chemical Engineering. Principal R&D Engineer, Sandvik Materials Technology since 2010. Scientist and postdoctoral researcher at Risø DTU, Denmark 2007–2010 and Technical Sales Specialist at Spectral Solutions AB 2005–2007.
Current Board assignments: None.
Percy Barnevik, b. 1941. Chairman of the Board of the Issuer 1983–2002.
Ǻsa Thunman, b. 1969. Board Secretary, Executive Vice President and General Counsel of the Issuer since 2014.
Education and business experience: Master of Laws (LLM). Securitas Group, 2009–2014, general counsel since 2011. Elekta AB, 1999–2009, several leading positions, including general counsel. Lagerlöf & Leman law firm, 1996–1999.
The business address for the Members of the Board is currently Kungsbron 1, Uppgång G, Plan 6, Box 510, Stockholm SE-10130, Sweden.
Auditor in charge: George Pettersson, b. 1964. Auditor in charge, Authorised Public Accountant.
Other auditing assignments: Auditor in charge at B&B Tools AB, Holmen AB, Hufudstaden AB, LE Lundbergföretagen AB and Skanska AB, among others.
The President and CEO of the Issuer, the Executive Vice President and CFO of the Issuer, the three presidents of each of the three business areas, and three Executive Vice Presidents make up Group Executive Management. Group Executive Management meets every month and deals with the Group's financial development, Group-wide development projects, leadership and competence sourcing, and other strategic issues. The Issuer has established Group functions responsible for Group-wide activities such as legal affairs, communication, finance and human resources. In addition to the Group Executive Management, business areas and Group functions, a number of committees and other coordination and preparatory bodies are commissioned to coordinate Group-wide strategic areas, such as environment, health and safety, research and development, purchasing, IT, finance and HR.
As of the date of this Base Prospectus, the present members of the Group Executive Management include:
Björn Rosengren, b. 1959. President and CEO of the Issuer since November 2015, Director of the Issuer since 2016.
Education and business experience: M.Sc. in Technology. President and CEO of Wärtsilä 2011–2015. Senior Executive Vice President Atlas Copco AB and Business Area President for Construction and Mining Technique 2002–2011. President of the Atlas Copco Rock Drilling Equipment division 2001– 2002. President of the Atlas Copco Craelius division 1998–2001. General Manager of Nordhydraulic, Nordwin AB, Sweden 1995–1998. Various positions within ESAB Group 1985–1995.
Current Board assignments: Director of Danfoss A/S
Jessica Alm, b. 1977. Executive Vice President and Head of Group Communications of the Issuer, since 2013.
Education and business experience: MSc in Geological and Earth Sciences/Geosciences and Journalism. Employed at the Group since 2006. Various senior positions, including Vice President Communication and Marketing at Sandvik Coromant 2012–2013 and Internal Communication Manager at Sandvik Coromant 2010–2012.
Current Board assignments: None.
Tomas Eliasson, b. 1962. Executive Vice President and Chief Financial Officer, Sandvik AB, since 1 April 2016
Education and business experience: Bachelor of Science (Civilekonomexamen), Uppsala University. Chief Financial Officer of AB Electrolux 2012–2016. Chief Financial Officer and Executive Vice President of ASSA ABLOY AB 2006–2012. Chief Financial Officer of Seco Tools AB 2002–2006. Financial Manager of ABB Robotics AB 1999–2002. Financial Manager of ABB Flexible Automation AB 1997–1999. Various positions within the ABB Group in Sweden and Australia 1987–1997.
Current Board assignments: Board member in Millicom International Callular S.A.
Petra Einarsson, b. 1967. President of the Sandvik Materials Technology business area since 1 February 2013.
Education and business experience: BSc in Business Administration and Economics. Employed at the Group since 1990. Various senior positions, including Financial Manager at Sandvik Materials Technology 2004–2007, President of the Strip product area 2007–2011 and President of the Tube product area 2011–2013.
Current Board assignments: Board member of SSAB, of the Swedish Association of Industrial Employers, Director of the council of the Swedish Steel Producers' Association.
Lars Engström, b.1963. President of the Sandvik Mining and Rock Technology business area since 1 July 2016.
Education and business experience: MSc Industrial Engineering and Management. President of the Sandvik Mining business area 2015-2016, President and CEO BE Group AB 2014-2015, Acting President and CEO Munters AB 2006-2014. Various senior positions within Atlas Copco 1994–2006, such as President of the Atlas Copco Rock Drilling Equipment/Underground Rock Excavation Division 2002–2006 and General Manager Atlas Copco CMT Australia and New Zealand 2000–2002. Various positions within Seco Tools 1988–1994.
Current Board assignments: Board member of Studsvik AB.
Jonas Gustavsson, b. 1967. President of the Sandvik Machining Solutions business area since 2013.
Education and business experience: MSc (Eng.). Various senior positions in the Group since 2008, including President of the Sandvik Materials Technology business area between 2011 and 2013. Vice President Operations at Rotax 2002–2007, various positions at Bombardier 1997–2002 and ABB 1995– 1997.
Current Board assignments: None.
Johan Kerstell, b.1970 Executive Vice President and Head of Human Resources, Sandvik AB, since 2016.
Education and business experience: M.Sc.in Business and Economics. Cap Gemini 1999–2003. Various leading positions in Human Resources and Organisational Development within Sandvik 2004–2016.
Current Board assignments: None.
Ǻsa Thunman, b. 1969. Executive Vice President and General Counsel of the Issuer since 1 October 2014
Education and business experience: Master of Laws (LL.M). Securitas Group, 2009–2014, general counsel since 2011. Elekta AB, 1999–2009, several leading positions, including general counsel. Lagerlöf & Leman law firm, 1996–1999.
Current Board assignments: None.
The business address for the Group Executive Management and Extended Group Executive Management is currently Kungsbron 1, Uppgång G, Plan 6, Box 510, Stockholm SE-101 30, Sweden.
According to the instructions of the Remuneration Committee, the Committee shall undertake the tasks prescribed by the Code (as defined below), which includes preparing proposals to the Board of Directors regarding proposed guidelines for remuneration of and proposed long-term incentive programmes for senior executives. Since the 2015 Annual General Meeting, the members of the Remuneration Committee have been the Board's Chairman Johan Molin (also Chairman of the Remuneration Committee), Johan Karlström and Lars Westerberg.
Based on the recommendations of the Remuneration Committee, the Board of Directors decides the remuneration of and terms of employment for the Issuer's President. The President decides on the remuneration to be paid to the Group Executive Management following consultation with the Remuneration Committee. During 2015, the Remuneration Committee met on three occasions.
The 2015/2016 Audit Committee consisted of Hanne de Mora (Chairman of the Audit Committee), Claes Boustedt and Johan Molin. In 2015, the Audit Committee held five meetings at which the Issuer's external auditors and representatives of the Issuer's management were present. Areas addressed by the Audit Committee mainly related to:
The current members of the Audit Committee are Claes Boustedt (Chairman of the Audit Committee), Helena Stjernholm and Lars Westerberg.
The Nomination Committee is a preparatory body that prepares proposals for, among other things, the nomination of Board of Directors auditors (where necessary) and fees for adoption at the General Meeting. The 2015 Annual General Meeting adopted an instruction for the Nomination Committee, which included a procedure for appointing the Nomination Committee, valid until a General Meeting resolves on a change. In accordance with this instruction the Nomination Committee should comprise representatives of the four largest shareholders, in terms of the number of votes, on the final business day in August plus the Board Chairman (convener). The Nomination Committee for the Annual General Meeting held on 28 April 2016 consisted of Fredrik Lundberg, Chairman (Industrivärden), Kaj Thorén (Alecta), Pär Boman (Handelsbanken AB, Handelsbanken's Pension Foundation and Handelsbanken's Pension Fund), Tomas Hedberg (Swedbank Robur Funds) and Johan Molin (the Issuer's Chairman of the Board). Up to the Annual General Meeting on 28 April 2016, the Nomination Committee met on at least three occasions. Through the Issuer's Board Chairman, the Nomination Committee received information concerning the Board's own evaluation and the Issuer's operations, stage of development and overall status. The Nomination Committee discussed the general criteria that Board members should fulfil, including the independence requirement and reviewed the number of Board assignments that each Board member has in other companies. Furthermore, the Nomination Committee has paid special attention to the requirements relating to diversity and breadth as well as the requirement to strive for even gender distribution.
The Nomination Committee for the 2017 Annual General Meeting has been appointed and comprises of the following members: Fredrik Lundberg, Chairman (Industrivärden), Kaj Thorén (Alecta), Pär Boman (Handelsbanken AB, Handelsbanken's Pension Foundation and Handelsbanken's Pension Fund), Marianne Nilsson (Swedbank Robur funds) and Johan Molin (the Issuer's Chairman of the Board).
Corporate governance defines roles and responsibilities for shareholders, the Board of Directors and Executive Management. It also covers the Group's control and management system.
Corporate governance within the Issuer is based on applicable legislation, the rules and regulations of the OMX Nordic Exchange in Stockholm, Swedish Code of Corporate Governance Code (the Code) and internal guidelines. For additional information on the Swedish Code of Corporate Governance and information on the annual meeting of shareholders, refer to the website of The Swedish Corporate Governance Board, www.bolagsstyrningskollegiet.se. Any content of the website of The Swedish Corporate Governance Board shall not form part of this Base Prospectus.
Helena Stjernholm is president and CEO of AB Industrivärden which owns approximately 12 per cent. of the shares of the Issuer. Therefore, she is not regarded as independent in relation to major shareholders of the Issuer. Björn Rosengren is engaged operatively in the business of the Issuer and is therefore not regarded as independent in relation to the Issuer. The other six members of the Board of Directors elected by the General Meeting are all independent in relation to the Issuer, Group Executive Management and major shareholders. Accordingly, the composition of the Board of Directors complies with the requirements of the Code that the majority of the members elected by the General Meeting be independent in relation to the Issuer and its Group Executive Management and that a minimum of two of those members that are independent in relation to the Issuer and its Group Executive Management are also to be independent in relation to the Issuer's major shareholders.
There are no potential conflicts of interest between the duties to the Issuer of the persons who are listed under Members of the Board and President and Group Executive Management above and their private interests or other duties.
Matters may come before the Board of Directors as to which one or more members of the Board of Directors has a potential conflict of interest. If such a matter arises, any member of the Board of Directors with a potential conflict of interest will not participate in the discussion or voting with respect to such matter in accordance with the rules and regulations of the Code.
The Issuer is listed on the NASDAQ Stock Exchange in Stockholm and is one of the Exchange's oldest companies. The Issuer shares can also be traded in the US in the form of American Depositary Receipts. The Swedish Financial Supervisory Authority (the Finansinspektionen) maintains a public register of senior executives in listed companies, and publishes changes in their shareholdings on a daily basis.
The Issuer's authorised and issued share capital is SEK 1,505,263,107.60 and consists of 1,254,385,923 shares. Each share carries one vote. As at 31 December 2015 the Issuer's ten largest shareholders held 39.4 per cent. of the total number of shares. They are as follows: AB Industrivärden (11.7 per cent.), Alecta Pension Insurance (4.9 per cent.), Handelsbanken's Pension Foundation (3.8 per cent.), AMF insurance and funds (3.5 per cent.), Swedbank Robur Funds (3.4 per cent.), SSB CL Omnibus (administrates shares held in trust) (3.4 per cent.), JPM Chase (administrates shares held in trust) (2.5 per cent.), LE Lundbergföretagen AB (2.4 per cent.), Nordea Investment Funds (2.0 per cent.), Göranssonska Foundations (1.8 per cent.).
As far as the Issuer is aware no shareholders agreement exists between above shareholders.
The information set out in this Base Prospectus shall be read in conjunction with the Issuer's audited financial statements for 2015 and 2014 and the consolidated unaudited interim financial statements for the nine months ended 30 September 2016.
The Issuer's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB), as endorsed by the EU. In addition, the standard RFR 1 Supplementary Accounting Rules for Groups accounts, issued by the Swedish Financial Reporting Board has been applied. The financial statements are presented on pages 71 to 81 of the Annual Report of 2015, and pages 73 to 94 of the Annual Report of 2014.The quarterly financial statements are prepared under IFRS and are unaudited.
The Issuer considers the following metrics (which are referred to in this Prospectus, the Issuer's 2015 Annual Report and accounts, the Issuer's 2014 Annual Report and accounts and/or the Issuer's interim report for the Third Quarter of 2016, as the case may be) to constitute Alternative Performance Measures (as defined in the European Securities and Markets Authority Guidelines on Alternative Performance Measures).
| Metric | Definition | Reconciliation (where relevant) and comparative information |
Rationale for inclusion |
|---|---|---|---|
| EBIT | A financial measure to express earnings before interest costs and tax |
Is the same as "Operating profit" |
Measure of operating performance |
| EBITDA | A financial measure to express earnings before interest costs, tax, depreciation and amortisation |
Sum of "Operating profit" and "Depreciation, amortisation and impairment losses" |
Measure of operating performance |
| FFO (funds from operations) |
A financial measure to express cash generation excluding working capital |
EBITDA less "Taxes paid and net interest costs paid" |
Measure of cash generation from operations |
| Net Debt | A financial measure to express interest bearing current and non-current debts, including net provision for pensions, less cash and cash equivalents |
Interest-bearing current and non-current liabilities, including net provisions for pensions, less cash and cash equivalents |
Measure of indebtedness and borrowing capacity |
| Leverage Ratio |
A financial measure to express the ratio of Net Debt to EBITDA |
Net Debt divided by EBITDA | Measure of indebtedness and borrowing capacity |
| Interest Coverage Ratio |
A financial measure to express the ratio of post-tax earnings to financing costs |
FFO divided by Financial expenses |
Measure of indebtedness and borrowing capacity |
The following is a general description of certain EU tax considerations relating to the Notes and also certain Swedish tax considerations relating to the holders of the Notes. This summary is based upon the laws as currently in effect on the date of this Base Prospectus (i.e. the laws of Sweden in respect of the section on Swedish taxation) and is subject to any change in law that may take effect after such date. It does not purport to be a complete analysis of all tax considerations relating to the Notes, whether in those countries or elsewhere, and is neither intended to be nor should be construed as legal or tax advice. The section on Swedish taxation does, inter alia, not address situations where Notes are held in an investment savings account (Sw. investeringssparkonto) or the rules regarding reporting obligations for, among others, payers of interest. Investors should consult their own professional tax advisers as to which countries' tax laws could be relevant in their particular circumstances in relation to acquiring, holding and disposing of Notes and receiving payments of interest, principal and/or other amounts under the Notes and the consequences of such actions under the tax laws of those countries (including the applicability and effect of tax treaties).
Payments of any principal amount or any amount that is considered to be interest for Swedish tax purposes to the holder of any Notes should not be subject to Swedish income tax, provided that such a holder (a) is not resident in Sweden for Swedish tax purposes or (b) does not have a permanent establishment in Sweden to which the Notes are effectively connected.
However, broadly speaking, provided that the value of or the return on the Notes relates to securities taxed as shares, private individuals who have been residents of Sweden for tax purposes due to a habitual abode in Sweden or a stay in Sweden for six consecutive months at any time during the calendar year of disposal or redemption or the ten calendar years preceding the year of disposal or redemption are liable for capital gains taxation in Sweden upon disposal or redemption of such Notes. In a number of cases though, the applicability of this rule is limited by the applicable tax treaty.
Swedish withholding tax, or Swedish tax deduction, is not imposed on payments of any principal amount or any amount that is considered to be interest for Swedish tax purposes, except for certain payments of interest (and other returns on Notes) to a private individual (or an estate of a deceased individual) who is resident in Sweden for Swedish tax purposes (see "Holders tax resident in Sweden" below).
In general, for Swedish corporations and private individuals (and estates of deceased individuals) with residence in Sweden for Swedish tax purposes, all capital income (e.g. income that is considered to be interest for Swedish tax purposes and capital gains on Notes) will be taxable. Specific tax consequences may be applicable to certain categories of corporations, e.g. life insurance companies. Further, specific tax consequences may be applicable if, and to the extent that, a holder of Notes realises a capital loss on the Notes and to any currency exchange gains or losses.
If amounts that are deemed as interest for Swedish tax purposes are paid by Euroclear Sweden or by another legal entity domiciled in Sweden, including a Swedish branch, to a private individual (or an estate of a deceased individual) with residence in Sweden for Swedish tax purposes, Swedish preliminary taxes are normally withheld by Euroclear Sweden or the legal entity on such payments. Swedish preliminary taxes should normally also be withheld on other returns on Notes (but not capital gains), if the returns are paid out together with such a payment of interest referred to above.
Sections 1471 through 1474 of FATCA impose a new reporting regime and potentially a 30 per cent. withholding tax with respect to certain payments to (a) any non-US financial institution (a "foreign financial institution", or FFI (as defined by FATCA)) that does not become a participating FFI (Participating FFI) by entering into an agreement with the US Internal Revenue Service (IRS) to provide the IRS with certain information in respect of its account holders and investors or is not otherwise exempt from or in deemed compliance with FATCA and (b) any investor (unless otherwise exempt from FATCA) that does not provide information sufficient to determine whether the investor is a US person or should otherwise be treated as holding a "United States Account" of the Issuer (a Recalcitrant Holder). The Issuer may be classified as an FFI.
This withholding regime is now in effect for payments from sources within the US and will apply to foreign passthru payments (a term not yet defined fully) no earlier than 1 January, 2019. This withholding would potentially apply to payments in respect of (i) any Notes characterised as debt (or which are not otherwise characterised as equity and have a fixed term) for US federal tax purposes that are issued after the grandfathering date, which is the date that is the later of 1 January 2019 or the date on which the final US Treasury regulations defining the term foreign passthru payment are published with the US Federal Register, or are materially modified after the grandfathering date and (ii) any Notes characterised as equity or which do not have a fixed term for US federal tax purposes, whenever issued. If Notes are issued on or before the grandfathering date and additional Notes of the same series are issued after that date, the additional Notes may not be treated as grandfathered, which may have negative consequences for the existing Notes, including a negative impact on market price.
The US and a number of other jurisdictions have announced their intention to negotiate IGAs to facilitate the implementation of FATCA. Pursuant to FATCA and the "Model 1" and "Model 2" IGAs released by the US, an FFI in an IGA signatory country could be treated as a "Reporting FI" not subject to withholding under FATCA on any payments it receives. Further, an FFI in an IGA jurisdiction would generally not be required to withhold under FATCA or an IGA (or any law implementing an IGA) (any such withholding being FATCA Withholding) from payments it makes. Under each Model IGA, a Reporting FI would still be required to report certain information in respect of its account holders and investors to its home government or to the IRS. The US and Sweden have entered into an agreement (US-Sweden IGA) based largely on the Model 1 IGA.
If the Issuer is treated as a Reporting FI pursuant to the US-Sweden IGA it does not anticipate that it will be obliged to deduct any FATCA Withholding on payments it makes. There can be no assurance, however, that the Issuer will be treated as a Reporting FI, or that it would in the future not be required to deduct FATCA Withholding from the payments it makes.
Whilst the Notes are in global form and held within 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 or common safekeeper, given that each of the entities in the payment chain beginning with the Issuer and ending with the participants in the ICSDs is a major financial institution whose business is dependent on compliance with FATCA and that any alternative approach introduced under an IGA will be unlikely to affect the Notes. The documentation expressly contemplates the possibility that the Notes 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 FATCA Withholding. However, definitive Notes will only be printed in remote circumstances.
FATCA is particularly complex and its application is uncertain. The above description is based in part on regulations, official guidance, model IGAs, signed IGAs and IGAs that have been agreed in substance and published by the US Treasury, all of which are subject to change. Prospective investors should consult their tax advisers on how these rules may apply to the Issuer and to payments they may receive in connection with the Notes.
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 it will not participate.
The Commission's Proposal has very broad scope and could, if introduced, apply to certain dealings in Notes (including secondary market transactions) in certain circumstances. Primary market transactions referred to in Article 5(c) of Regulation (EC) No 1287/2006 are exempt.
Under the Commission's Proposal the 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 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 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 Notes are advised to seek their own professional advice in relation to the FTT.
Notes may be sold from time to time by the Issuer to any one or more of the Dealers. The arrangements under which Notes may from time to time be agreed to be sold by the Issuer to, and purchased by, the Dealers are set out in an amended and restated Dealer Agreement dated 16 December 2016 (the Dealer Agreement) and made between the Issuer and the Dealers. Any such agreement will, inter alia, make provision for the form and terms and conditions of the relevant Notes, the price at which such Notes will be purchased by the Dealers and the commissions or other agreed deductibles (if any) payable or allowable by the Issuer in respect of such purchase. The Dealer Agreement makes provision for the resignation or termination of appointment of existing Dealers and for the appointment of additional or other Dealers either generally in respect of the Programme or in relation to a particular Tranche of Notes.
United States of America: Regulation S Category 2; TEFRA D or TEFRA C as specified in the relevant Final Terms or neither if TEFRA is specified as not applicable in the relevant Final Terms.
The Notes have not been and will not be registered under the Securities Act and may not be offered or sold within the US or to, or for the account or benefit of, US 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 under the Securities Act.
The Bearer Notes are subject to US tax law requirements and may not be offered, sold or delivered within the US or its possessions or to a US person, except in certain transactions permitted by US tax regulations. Terms used in this paragraph have the meanings given to them by the US Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder.
Each Dealer has represented, warranted and agreed, and each further Dealer appointed under the Programme will be required to represent, warrant and agree, that, except as permitted by the Dealer Agreement, it will not offer, sell or deliver the Notes, (i) as part of their distribution at any time or (ii) 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 US or to, or for the account or benefit of, US 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 US or to, or for the account or benefit of, US persons.
In addition, until 40 days after the commencement of the offering of Notes comprising any Tranche, any offer or sale of Notes within the US by any dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act.
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), each Dealer has represented, warranted and agreed, and each further Dealer appointed under the Programme will be required to represent, warrant and agree, that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date) it had not made and will not make an offer of Notes which are the subject of the offering contemplated by this Base Prospectus as completed by the Final Terms in relation thereto (or would be 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) Approved prospectus: if the Final Terms or Drawdown Prospectus in relation to the Notes specify that an offer of those Notes may be made other than pursuant to Article 3(2) of the Prospectus Directive in that Relevant Member State (a Non-exempt Offer) following the date of publication of a prospectus in relation to such Notes which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, provided that any such prospectus which is not a Drawdown Prospectus has subsequently been completed by the Final Terms contemplating such Non-exempt Offer, in accordance with the Prospectus Directive, in the period beginning and ending on the dates specified in such prospectus or Final Terms, as applicable and the Issuer has consented in writing to its use for the purpose of that Non-exempt Offer;
provided that no such offer of Notes referred to in (b) to (d) 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 as amended, including by Directive 2010/73/EU and includes any relevant implementing measures in the Relevant Member State.
Each Dealer has represented, warranted and agreed, and each further Dealer appointed under the Programme will be required to represent, warrant and agree, that:
where the issue of the Notes would otherwise constitute a contravention of Section 19 of the FSMA by the Issuer;
(b) Financial promotion: it has only communicated or caused to be communicated and will only communicate or cause to be communicated any 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) General compliance: 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.
Each Dealer has represented, warranted and agreed, and each further Dealer appointed under the Programme will be required to represent, warrant and agree, that it will not, directly or indirectly, offer for subscription or purchase or issue invitations to subscribe for or buy Notes or distribute any draft or definite document in relation to any such offer, invitation or sale in Sweden except in circumstances that will not result in a requirement to prepare a prospectus pursuant to the provisions of the Swedish Financial Instruments Trading Act (Sw. lagen (1991:980), om handel med finansiella instrument) nor any other Swedish enactment. Neither the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) nor any other Swedish public body has examined, approved or registered this Base Prospectus or will examine, approve or register this Base Prospectus.
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) and, accordingly, each Dealer has represented, warranted and agreed, and each further Dealer appointed under the Programme will be required to represent, warrant and agree, that it will not offer or sell any Notes, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (as defined under Item 5, Paragraph 1, Article 6 of the Foreign Exchange and Trade Act (Act No. 228 of 1949, as amended)), or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the benefit of a resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with the FIEA and other relevant laws, regulations and ministerial guidelines of Japan.
Each Dealer has represented, warranted and agreed, and each further Dealer appointed under the Programme will be required to represent, warrant and agree, that:
The Notes may not be offered or sold directly or indirectly within the borders of the PRC (which, for such purposes, does not include the Hong Kong or Macau Special Administrative Regions or Taiwan province). This Base Prospectus or the information contained herein has not been approved by or registered with any relevant governmental authorities in the PRC and may not be offered for sale in the PRC. Each Dealer has represented, warranted and agreed, and each further Dealer appointed under the Programme will be required to represent, warrant and agree that it has not made, and will not make, any offers, promotions, or solicitations for sales of or for, as the case may be, any Notes in the PRC, except where permitted by competent authorities or where the activity otherwise is permitted under the PRC law. PRC investors are responsible for obtaining all relevant government regulatory approvals/licences (if any) by themselves, including, but not limited to, any which may be required from the State Administration of Foreign Exchange and other competent regulatory authorities and complying with all relevant PRC regulations (if applicable), including, but not limited to, any relevant foreign exchange regulations and/or overseas investment regulations.
Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that this Base Prospectus has not been and will not be registered as a prospectus with the Monetary Authority of Singapore under the Securities and Futures Act, Chapter 289 of the Singapore Statutes (the SFA). Accordingly, each Dealer has represented, warranted, and agreed, and each further Dealer appointed under the Programme will be required to represent, warrant and agree, that the Notes may not be offered or sold or made the subject of an invitation for subscription or purchase nor may the Base Prospectus or any other document or material in connection with the offer or sale or invitation for subscription or purchase of any Notes be circulated or distributed, whether directly or indirectly, to any person in Singapore other than (a) to an institutional investor (as defined in section 4A of the SFA) pursuant to section 274 of the SFA, (b) to a relevant person (as defined in section 275(2) of the SFA) or to any person pursuant to section 275(1) of the SFA or to any person pursuant to section 275(1A) of the SFA, and in accordance with the conditions specified in section 275 of the SFA or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the Notes are subscribed or purchased under section 275 of the SFA by a relevant person which is:
securities (as defined in section 239(1) of the SFA) of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Notes pursuant to an offer made under section 275 of the SFA except:
Each Dealer has severally represented, warranted and undertaken, and each further Dealer appointed under the Programme will be required to severally represent, warrant and agree, to the Issuer that it has complied and will comply to the best of its knowledge and belief in all material respects with all applicable laws and regulations in each country or jurisdiction in or from which it purchases, offers, sells or delivers Notes or possesses, distributes or publishes this Base Prospectus or any Final Terms or any related offering material, in all cases at its own expense unless agreed otherwise. Other persons into whose hands this Base Prospectus or any Final Terms comes are required by the Issuer and the Dealers to comply with all applicable laws and regulations in each country or jurisdiction in or from which they purchase, offer, sell or deliver Notes or possess, distribute or publish this Base Prospectus or any Final Terms or any related offering material, in all cases at their own expense.
The Dealer Agreement provides that the Dealers shall not be bound by any of the restrictions relating to any specific jurisdiction (set out above) to the extent that such restrictions shall, as a result of change(s) or change(s) in official interpretation, after the date hereof, of applicable laws and regulations, no longer be applicable but without prejudice to the obligations of the Dealers described in the paragraph headed "General" above.
Selling restrictions may be supplemented or modified with the agreement of the Issuer. Any such supplement or modification may be set out in the Relevant Agreement (as defined in the Dealer Agreement) or, in the case of Exempt Notes, in the Relevant Agreement or in the relevant Pricing Supplement (in each case, where the supplement or modification relates only to a particular Tranche of Notes) or in a supplement to this Base Prospectus.
In addition, in the ordinary course of their business activities, the Dealers and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of the Issuer or the Issuer's affiliates. Certain of the Dealers or their affiliates that have a lending relationship with the Issuer routinely hedge their credit exposure to the Issuer consistent with their customary risk management policies. Typically, such Dealers and their affiliates would hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in securities, including potentially the Notes issued under the Programme. Any such positions could adversely affect future trading prices of Notes issued under the Programme. The Dealers and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Sandvik AB (publ) Kungsbron 1 Uppgång G, Plan 6, Box 510 Stockholm SE-101 30 Sweden
Citigroup Centre Canada Square Canary Wharf London E14 5LB United Kingdom
2-12 Holmens Kanal DK-1092 Copenhagen K Denmark
J.P. Morgan Securities plc 25 Bank Street Canary Wharf London E14 5JP
Christianbro, Strandgade 3 DK-1401, Copenhagen K Denmark
29 boulevard Haussmann 75009 Paris France
Blasieholmstorg 11 SE-106 70 Stockholm Sweden
(trading as NatWest Markets) 250 Bishopsgate
London EC2M 4AA United Kingdom
Deutsche Bank AG, London Branch Winchester House 1 Great Winchester Street London EC2N 2DB United Kingdom
HSBC Bank plc 8 Canada Square London E14 5HQ United Kingdom
Kungträdgårdsgatan 8 106 40 Stockholm Sweden
One Basinghall Avenue London EC2V 5DD United Kingdom
Swedbank AB (publ) SE-105 34 Stockholm
Sweden
14th Floor, Citigroup Centre Canada Square Canary Wharf London E14 5LB United Kingdom
14th Floor, Citigroup Centre Canada Square Canary Wharf London E14 5LB United Kingdom
Citibank N.A., London Branch 14th Floor, Citigroup Centre Canada Square Canary Wharf London E14 5LB United Kingdom
14th Floor, Citigroup Centre Canada Square Canary Wharf London E14 5LB United Kingdom
Norton Rose Fulbright LLP 3 More London Riverside London SE1 2AQ United Kingdom
Clifford Chance LLP 10 Upper Bank Street London E14 5JJ United Kingdom
To the Issuer as to English law: To the Issuer as to Swedish law: Mannheimer Swartling Norrlandsgatan 21 Box 1711 11 87 Stockholm Sweden
To the Dealers as to English law: To the Dealers as to Swedish law: Advokatfirman Vinge KB Smålandsgatan 20 Box 1703 111 87 Stockholm Sweden
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