Prospectus • Dec 15, 2017
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 Directive 2004/39/EC and Directive 2014/65/EU (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 European Economic Area (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 CREDIT AGRICOLE CIB DANSKE BANK DEUTSCHE BANK HSBC HANDELSBANKEN CAPITAL MARKETS J.P. MORGAN MUFG NORDEA SEB SOCIÉTÉ GÉNÉRALE CORPORATE & INVESTMENT BANKING SWEDBANK AB (PUBL)
STANDARD CHARTERED BANK
15 December 2017
| IMPORTANT NOTICES 1 | |
|---|---|
| OVERVIEW 4 | |
| RISK FACTORS 9 | |
| INFORMATION INCORPORATED BY REFERENCE 22 | |
| FINAL TERMS, PRICING SUPPLEMENTS AND DRAWDOWN PROSPECTUSES 23 | |
| FORMS OF THE NOTES 24 | |
| TERMS AND CONDITIONS OF THE NOTES 30 | |
| FORM OF FINAL TERMS 60 | |
| FORM OF PRICING SUPPLEMENT 69 | |
| SUMMARY OF PROVISIONS RELATING TO THE NOTES WHILE IN GLOBAL FORM 81 | |
| USE OF PROCEEDS 84 | |
| DESCRIPTION OF THE ISSUER 85 | |
| TAXATION 101 | |
| SUBSCRIPTION AND SALE 104 | |
| GENERAL INFORMATION 109 |
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 krona 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 (Hong Kong), the Macau Special Administrative Region of the People's Republic of China and Taiwan) (the PRC).
IMPORTANT – EEA RETAIL INVESTORS – If the relevant Final Terms (or Drawdown Prospectus, as the case may be) in respect of any Notes includes a legend entitled "Prohibition of Sales to EEA Retail Investors", the Notes are not intended, from 1 January 2018, to be offered, sold or otherwise made available to and, with effect from such date, should not be offered, sold or otherwise made available to any retail investor in the EEA. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, MiFID II); (ii) a customer within the meaning of Directive 2002/92/EC (as amended, the Insurance Mediation Directive), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Prospectus Directive. Consequently no key information document required by the Regulation (EU) No 1286/2014 (the PRIIPS Regulation) for offering or selling the Notes or Exempt Notes, as the case may be, or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or Exempt Notes, as the case may be, or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPS Regulation.
MIFID II PRODUCT GOVERNANCE / TARGET MARKET – The Final Terms in respect of any Notes (or Pricing Supplement, in the case of Exempt Notes) will include a legend entitled "MiFID II Product Governance" which will outline the target market assessment in respect of the Notes and which channels for distribution of the Notes are appropriate. Any person subsequently offering, selling or recommending the Notes (a distributor) should take into consideration the target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or refining the target market assessment) and determining appropriate distribution channels.
A determination will be made in relation to each issue about whether, for the purpose of the MiFID Product Governance rules under Commission Delegated Directive (EU) 2017/593 (the MiFID Product Governance Rules), any Dealer subscribing for any Notes is a manufacturer in respect of such Notes, but otherwise neither the Arranger nor the Dealers nor any of their respective affiliates will be a manufacturer for the purpose of the MiFID Product Governance Rules.
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, Crédit Agricole Corporate and Investment Bank, Danske Bank A/S, Deutsche Bank AG, London Branch, HSBC Bank plc, J.P. Morgan Securities plc, MUFG Securities EMEA plc, Nordea Bank AB (publ), Skandinaviska Enskilda Banken AB (publ), Société Générale, Standard Chartered Bank, Svenska Handelsbanken AB (publ), Swedbank AB (publ) 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, |
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| 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 | |
| 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 Central Securities Depositories and Financial Instruments Accounts Act (Sw. lag (1998:1479) om värdepapperscentraler och 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 krona 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 15 December 2017 (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. If customers' demand for the Group's products decline and production volumes are reduced, the Group will be impacted by under-absorption of fixed costs in respect of its production facilities. 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 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 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 interest items adversely. The impact on net interest items from a change in interest rates depends on the interest terms of assets and liabilities. 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 commercial and financial transactions give rise to credit risk in relation to the Issuer's 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, so-called 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 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 largest funded pension plans are found in Finland, Germany, Sweden, Canada, the United Kingdom and the US. Three main risks are associated with the Issuer's pension obligations: interest rate fluctuations, capital market volatility, and changes in life expectancy. Since the duration of the liabilities differs from the duration of the interestbearing assets, the Issuer is exposed to interest rate fluctuations, both when discounting the liability but also as market value changes in the bond portfolio. Further, calculating pension and similar obligations require management to make assumptions on discount rates, expected return on plan assets and rate of compensation increase, which may not match actual outcomes. If the Issuer's pension liabilities exceeds its assets, this may have a material adverse effect on the Group's 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.
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.
Should there be any non-compliance by any member of the Group or any director, officer, employee or agent of any member of the Group, or anyone acting on its behalf with applicable laws and regulations, including but not limited to bribery and corruption, anti-money laundering, sanctions, competition, trade, data privacy and health and safety laws and regulations, there may be legal consequences and it may weaken the Issuer's financial position and/or tarnish the Issuer's reputation, which may have an adverse effect on the Group's business, financial condition and results of operations.
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.
Various interest rates and other indices which are deemed to be "benchmarks" (including LIBOR and EURIBOR) are the subject of recent national, international and other regulatory guidance and proposals for reform. Some of these reforms are already effective whilst others are still to be implemented, including the majority of the provisions of the EU Benchmark Regulation (Regulation (EU) 2016/1011) (the Benchmarks Regulation).
The sustainability of LIBOR has been questioned by the UK Listing Authority as a result of the absence of relevant active underlying markets and possible disincentives (including possibly as a result of regulatory reforms) for market participants to continue contributing to such benchmarks.
Additionally, in March 2017, the EMMI (formerly Euribor-EBF) published a position paper setting out the legal grounds for the proposed reforms to EURIBOR, which aims to clarify the EURIBOR specification, to continue to work towards a transaction-based methodology for EURIBOR and to align the methodology with the Benchmarks Regulation, the IOSCO Principles for Financial Benchmarks and other regulatory recommendations. The EMMI has since indicated that there has been a "change in market activity as a result of the current regulatory requirements and a negative interest rate environment" and "under the current market conditions it will not be feasible to evolve the current EURIBOR methodology to a fully transaction-based methodology following a seamless transition path". EMMI's current intention is to develop a hybrid methodology. Accordingly, EURIBOR calculation and publication could be altered, suspended or discontinued.
For example, on 27 July 2017, the UK Financial Conduct Authority announced that it will no longer persuade or compel banks to submit rates for the calculation of the LIBOR benchmark after 2021 (the FCA Announcement). The FCA Announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021.
These reforms and other pressures may cause such benchmarks to disappear entirely, to perform differently than in the past (as a result of a change in methodology or otherwise), create disincentives for market participants to continue to administer or contribute to certain benchmarks or have other consequences which cannot be predicted.
The Benchmarks Regulation was published in the Official Journal on 29 June 2016. Most of the provisions of the Benchmarks Regulation will apply from 1 January 2018 with the exception of certain provisions, mainly on critical benchmarks, that applied from 30 June 2016. The Benchmarks Regulation applies to the provision of benchmarks, the contribution of input data to a benchmark and the use of a benchmark within the EU and will, among other things, (i) require benchmark administrators to be authorised or registered (or, if non-EU-based, to be subject to an equivalent regime or otherwise recognised or endorsed) and to comply with extensive requirements in relation to the administration of "benchmarks" and (ii) prevent certain uses by EU supervised entities of "benchmarks" of administrators that are not authorised/ registered (or, if non-EU based, deemed equivalent or recognised or endorsed). The scope of the Benchmarks Regulation is wide and, in addition to so-called "critical benchmark" indices, such as LIBOR or EURIBOR, applies to many interest rates, foreign exchange rate indices and other indices where used to determine the amount payable under or the value or performance of certain financial instruments traded on a trading venue (EU regulated market, EU multilateral trading facility, EU organised trading facility) or via a systematic internaliser, certain financial contracts and investment funds.
It is not possible to predict the further effect of any changes in the methods pursuant to which the LIBOR and/or EURIBOR rates are determined, or any other reforms to or other proposals affecting LIBOR, EURIBOR and any other relevant benchmarks that will be enacted in the United Kingdom, the EU, the US and elsewhere, each of which may adversely affect the trading market for LIBOR, EURIBOR and/or other relevant benchmark-based securities. In addition, any future changes in the method pursuant to which the LIBOR, EURIBOR and/or other relevant benchmarks are determined or the transition to a successor benchmark may result in, among other things, a sudden or prolonged increase or decrease in the reported benchmark 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 Notes referencing LIBOR, EURIBOR or any other relevant benchmark, such proposals for reform and changes in applicable regulation could have a material adverse effect on the value of and return on such Notes (including potential rates of interest thereon).
Based on the foregoing, investors should be aware that:
(i) any of the reforms or pressures described above or any other changes to a relevant interest rate benchmark (including LIBOR and EURIBOR) could affect the level of the published rate, including to cause it lower and/or more volatile than it would otherwise be; and
(ii) if LIBOR or EURIBOR or any other relevant benchmark rate is discontinued, then the rate of interest on the Notes will be determined for a period by the fall-back provisions provided for under Condition 7(c)(v) of the Terms and Conditions of the Notes, although such provisions, being dependent in part upon the provision by major banks of offered quotations for loans to lending European banks, may not operate as intended depending on market circumstances and the availability of rates information at the relevant time and may result, to the extent that other fallback provisions under Condition 7(c)(v) are not applicable, in the effective application of a fixed rate based on the rate which applied in the previous period when LIBOR or EURIBOR or any other relevant benchmark rate was available.
More generally, any of the above matters or any other significant change to the setting or existence of LIBOR, EURIBOR or any other relevant benchmark rate could have a material adverse effect on the value or liquidity of, and the amount payable under, the Notes. No assurance may be provided that relevant changes will not be made to LIBOR, EURIBOR or any other relevant benchmark rate and/or that such benchmarks will continue to exist. Investors should consider these matters when making their investment decision with respect to the Notes.
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 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 into and out of the PRC for the settlement of capital account items, such as capital contributions, debt financing and securities investment, 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 and out of the PRC for settlement of capital account items are being developed.
From 1 October 2016 the Renminbi has been added to the Special Drawing Rights (SDR) basket created by the International Monetary Fund. There is no assurance that the PRC government will continue to gradually liberalise control over cross-border remittance of Renminbi 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 out of the PRC. Despite Renminbi internationalisation pilot programme and efforts in recent years to internationalise the currency, there can be no assurance that the PRC Government will not impose interim or long-term restrictions on the cross-border remittance of Renminbi. In the event that funds cannot be repatriated out of the PRC in Renminbi, this may affect the overall availability of Renminbi outside the PRC and the ability of the Issuer to source Renminbi to finance its obligations under 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. While the People's Bank of China (the PBOC) has entered into agreements (the Settlement Arrangements) on the clearing of Renminbi business with financial institutions in a number of financial centres and cities, including but not limited to Hong Kong, Singapore and London, has established the Cross Border Inter-Bank Payment Systems to facilitate cross border Renminbi settlement and is further in the process of establishing Renminbi clearing and settlement mechanisms in several other jurisdictions, 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, although the PBOC has gradually allowed participating banks to access the PRC's onshore inter-bank market for the purchase and sale of Renminbi. The Renminbi Clearing Banks only have limited 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 cases where the participating banks cannot source sufficient Renminbi through the above channels, they 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, the PRC Individual Income Tax Law and the relevant implementating 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. The PRC Enterprise Income Tax Law levies EIT at the rate of 20 per cent. of the gains derived by such non-PRC resident enterprise Noteholder from the transfer of the RMB Notes but its implementation rules have reduced the EIT rate to 10 per cent. The PRC Individual Income Tax Law levies IIT at a rate of 20 per cent. of the gains derived by a non-PRC resident individual Noteholder from the transfer of RMB Notes.
However, uncertainty remains 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.
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. In addition, liquidity may be limited if the Issuer makes large allocations to a limited number of investors. 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 15 December 2017 (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 consultation with the Issuer) 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 (a) 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 or to alter the method of calculating the amount of any payment in respect of the Notes on redemption or maturity or the date for any such payment, (b) effect the exchange or substitution of the Notes for, or the conversion of the Notes into, shares, bonds or other obligations or securities of the Issuer or any other person or body corporate formed or to be formed, (c) change the currency of any payment under the Notes, (d) change the quorum requirements relating to meetings or the majority required to pass an Extraordinary Resolution or (e) amend the definition hereof. (For the avoidance of doubt, a proposal to change the method of calculating the amount of any interest payment arising from the discontinuation of an interest rate benchmark used to determine the amount of a payment in respect of the Notes shall not be a Reserved Matter.)
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 Central Securities Depositories and Financial Instruments Accounts Act (Sw. lag (1998:1479) om värdepapperscentraler och 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.
(a) Bearer Notes: Bearer Notes are in the Specified Denomination(s) with Coupons and, if specified in the relevant Final Terms, Talons attached at the time of issue and, in the case of Definitive Notes, serially numbered, in the Specified Currency. In the case of a Series of Bearer Notes with more than one Specified Denomination, Bearer Notes of one Specified Denomination will not be exchangeable for Bearer Notes of another Specified Denomination.
(i) Registration and delivery of Note Certificates: Within five business days of the surrender of a Note Certificate in accordance with Condition 3(g) (Transfers of Registered Notes) above, the Registrar will register the transfer in question and deliver a new Note Certificate of a like principal amount to the Registered Notes transferred to each relevant Holder at its Specified Office or (as the case may be) the Specified Office of any Transfer Agent or (at the request and risk of any such relevant Holder) by uninsured first class mail (airmail if overseas) to the address specified for the purpose by such relevant Holder. In this paragraph, business day means a day on which commercial banks are open for general business (including dealings in foreign currencies) in the city where the Registrar or (as the case may be) the relevant Transfer Agent has its Specified Office.
(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.
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 any 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.
more than one Specified Denomination, shall be the relevant Fixed Coupon Amount in respect of the relevant Specified Denomination. The amount of interest payable in respect of each Note on any Interest Payment Date will, if so specified in the relevant Final Terms, amount to the Broken Amount(s) so specified.
(b) Accrual of interest: The Notes bear interest from the Interest Commencement Date at the Rate of Interest payable in arrear on each Interest Payment Date, subject as provided in Condition 11 (Payments - Bearer Notes) and Condition 12 (Payments - Registered Notes). Each Note will cease to bear interest from the due date for final redemption unless, upon due presentation, payment of the Redemption Amount is improperly withheld or refused, in which case it will continue to bear interest in accordance with this Condition 7 (Floating Rate Note Provisions) (as well after as before judgment) until 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).
(c) Screen Rate Determination: If Screen Rate Determination is specified in the relevant Final Terms as the manner in which the Rate(s) of Interest is/are to be determined, the Rate of Interest applicable to the Notes for each Interest Period will be determined by the Calculation Agent on the following basis:
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.
(d) ISDA Determination: If ISDA Determination is specified in the relevant Final Terms as the manner in which the Rate(s) of Interest is/are to be determined, the Rate of Interest applicable to the Notes for each Interest Period will be the sum of the Margin and the relevant ISDA Rate where "the ISDA Rate" in relation to any Interest Period means a rate equal to the Floating Rate (as defined in the ISDA Definitions) that would be determined by the Calculation Agent under an interest rate swap transaction if the Calculation Agent were acting as Calculation Agent for that interest rate swap transaction under the terms of an agreement incorporating the ISDA Definitions and under which:
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.
minimum Specified Denomination the Calculation Agent shall not be obliged to publish each Interest Amount but instead may publish only the Calculation Amount and the Interest Amount in respect of a Note having the minimum Specified Denomination.
(h) Notifications etc.: All notifications, opinions, determinations, certificates, calculations, quotations and decisions given, expressed, made or obtained for the purposes of this Condition 7 (Floating Rate Note Provisions) by the Calculation Agent will (in the absence of manifest error) be binding on the Issuer, the Paying Agents, the Noteholders and the Couponholders and (subject as aforesaid) no liability to any such Person will attach to the Calculation Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions for such purposes.
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:
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:
(i) if Spens Amount is specified as being applicable in the relevant Final Terms, (A) 100 per cent. of the principal amount outstanding of the Notes to be redeemed or (B) the principal amount outstanding of the Notes to be redeemed multiplied by the price (expressed as a percentage of its principal amount), as reported to the Issuer by the Determination Agent, at which the Gross Redemption Yield on such Notes on the Reference Date is equal to the Gross Redemption Yield (determined by reference to the middle market price) at the Quotation Time on the Reference Date of the Reference Bond, plus the Redemption Margin; or
(ii) if Make-Whole Redemption Amount is specified as applicable in the relevant Final Terms, (A) 100 per cent. of the principal amount outstanding of the Notes to be redeemed and (B) the sum of the present values of the principal amount outstanding of the Notes to be redeemed and the Remaining Term Interest on such Notes (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on an annual basis (and in accordance with the relevant Day Count Fraction basis of such Notes, if applicable) at the Reference Bond Rate, plus the Redemption Margin,
all as determined by the Determination Agent.
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.
(iv) payments in Renminbi by credit or transfer to a Renminbi account maintained by or on behalf of the payee with a bank in the RMB Settlement Centre(s) as may be specified in the relevant Final Terms in accordance with applicable laws, rules, regulations and guidelines issued from time to time (including all applicable laws and regulations with respect to settlement in Renminbi in such RMB Settlement Centre(s) as may be specified in the relevant Final Terms).
(b) Interest: Payments of interest shall, subject to Condition 11(h) (Payments other than in respect of matured Coupons) below, be made only against presentation and (provided that payment is made in full) surrender of the appropriate Coupons at the Specified Office of any Paying Agent outside the United States in the manner described in Condition 11(a) (Principal) above.
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.
(f) Unmatured Coupons void: If the relevant Final Terms specifies that this Condition 11(f) (Unmatured Coupons void) is applicable or that the Floating Rate Note Provisions are applicable, on the due date for final redemption of any Note or early redemption in whole of such Note pursuant to Condition 10(b) (Redemption for tax reasons), Condition 10(c) (Redemption at the option of the Issuer), Condition 10(e) (Redemption at the option of Noteholders) or Condition 14 (Events of Default), all unmatured Coupons relating thereto (whether or not still attached) shall become void and no payment will be made in respect thereof.
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.
(iv) payments in Renminbi by credit or transfer to a Renminbi account maintained by or on behalf of the payee with a bank in the RMB Settlement Centre(s) as may be specified in the relevant Final Terms in accordance with applicable laws, rules, regulations and guidelines issued from time to time (including all applicable laws and regulations with respect to settlement in Renminbi in such RMB Settlement Centre(s) as may be specified in the relevant Final Terms),
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.
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.
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.
daily newspaper having general circulation in Europe. Any such notice shall be deemed to have been given on the fourth day after the date of mailing.
(c) Swedish Registered Notes: Notices to the Holders of Swedish Registered Notes shall be valid if sent by mail (if posted to an overseas address) by airmail to their registered addresses appearing in the Euroclear Sweden Register. Any such notice shall be deemed to have been given on the fourth Business Day after the day of which it was mailed.
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.
payment or non-performance under the Conditions applicable to such Swedish Registered Notes, a Swedish Registered Note Holder must first exhaust all available remedies under English law for non-payment or non-performance before any Proceedings may be brought against the Issuer in Sweden in respect of the Swedish Remedies. Notwithstanding Condition 23(d) (Rights of the Noteholders to take proceedings outside England), and in this limited respect only, a Registered Holder of Swedish Registered Notes may therefore not take concurrent Proceedings in Sweden.
(f) Service of process: The Issuer agrees that the documents which start any Proceedings and any other documents required to be served in relation to those Proceedings may be served on it by being delivered to Sandvik Limited at Manor Way, Halesowen, West Midlands, B62 8QZ or at any address of the Group's in Great Britain at which service of process may be served on it in accordance with the Companies Act 2006. Nothing in this paragraph shall affect the right of any Noteholder to serve process in any other manner permitted by law. This Condition 23(f) (Service of Process) applies to Proceedings in England and to Proceedings elsewhere.
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.
The Notes are not intended [, from 1 January 2018,] to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (EEA). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, MiFID II); (ii) a customer within the meaning of Directive 2002/92/EU (as amended, the Insurance Mediation Directive), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Directive 2003/71/EC (as amended including by Directive 2010/73/EU, the Prospectus Directive). Consequently no key information document required by Regulation (EU) No 1286/2014 (the PRIIPS Regulation) for offering or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPS Regulation.] 1
Solely for the purposes of each manufacturer's product approval process, the target market assessment in respect of the Notes has led to the conclusion that: (i) the target market for the Notes is eligible counterparties and professional clients only, each as defined in [Directive 2014/54/EU (as amended, MiFID II)/ MiFID II]; and (ii) all channels for distribution of the Notes to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the Notes (a distributor) should take into consideration the manufacturer's target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or refining the manufacturer's target market assessment) and determining appropriate distribution channels.]
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 15 December 2017 [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 15
1 Legend to be included on front of the Final Terms (i) for offers concluded on or after 1 January 2018 if the Notes potentially constitute "packaged" products and no key information document will be prepared or the issuer wishes to prohibit offers to EEA retail investors for any other reason, in which case the selling restriction should be specified to be "Applicable" or (ii) for offers concluded before 1 January 2018 at the option of the parties.
December 2017. These Final Terms contain the final terms of the Notes and must be read in conjunction with the base prospectus dated 15 December 2017 [and the 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), 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 15 December 2017 [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 up to and including the Maturity Date] [adjusted for payment day purposes only in accordance with the Modified Business Day Convention] [adjusted for payment and interest accrual purposes in accordance with the Modified Business Day Convention] |
|
| (iii) | Fixed Coupon Amount[(s)]: | [[] per Calculation Amount] [Each Fixed Coupon Amount shall be calculated by multiplying the product of the Rate of Interest and the Calculation Amount by the Day Count Fraction and rounding the resultant figure to the nearest [CNY 0.01, CNY 0.005] [HK\$0.01, HK\$0.005] being rounded upwards] [Not Applicable] |
|
| (iv) | Broken Amount(s): | [Not Applicable/[] per Calculation Amount, payable on the Interest Payment Date falling [in/on] []] [Not Applicable] |
|
| (v) Day Count Fraction: |
[Actual/ Actual (ICMA)] [Actual/ Actual (ISDA)] [Actual/ 365 (Fixed)] [Actual/ 360] [30/360] [30E/360] [30E/360 (ISDA)] [Other] |
||
| (vi) | Additional Business Centre(s): |
[Not Applicable] [] | |
| (vii) | Determination Dates: | [] [and []] in each year][Not Applicable] | |
| (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] |
|
| 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 as No Adjustment] [Not Applicable]
| (iv) | First Interest Payment Date: | [] |
|---|---|---|
| (v) | Business Day Convention: | [Following Business Day Convention] [Modified Following Business Day Convention] [Preceding Business Day Convention] [Floating Rate Convention] [No Adjustment] |
| (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)] |
| 14. | Zero Coupon Note Provisions | [Actual/365 (Fixed) ] [Actual/360] [30/360] [30E/360] [30E/360 (ISDA)] [Other] [Applicable] [Not Applicable] |
||
|---|---|---|---|---|
| (i) (ii) |
Accrual Yield: Reference Price: |
[] per cent. per annum [] |
||
| (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) | Note: | Optional Redemption Amount(s) (Call) of each |
[[] 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) | Price: | Make-Whole Redemption | [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 Redemption Amount: |
[] per Calculation Amount |
64
| (v) | Notice period: | [] | |
|---|---|---|---|
| 16. | Put Option (i) |
Optional Redemption Date(s) (Put): |
[Applicable] [Not Applicable] [] |
| (ii) | Optional Redemption Amount(s) (Put) of each Note: |
[] per Calculation Amount | |
| (iii) | Notice period: | [] | |
| 17. | Note | Final Redemption Amount of each | [] per Calculation Amount |
| 18. | Early Redemption Amount | ||
| redemption: | Early Redemption Amount(s) per Calculation Amount payable on redemption for taxation reasons or on event of default or other early |
[[] per Calculation Amount] [Condition 10(g) applies] |
|
| GENERAL PROVISIONS APPLICABLE TO THE NOTES | |||
| 19. | 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 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: | |
|---|---|---|
| ----- | ---------------------- | -- |
(ii) New Safekeeping Structure:
[Yes] [No]
[Yes] [No]
payment dates:
| 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 [].] [Series [] of the Notes is already admitted to the Official List of the UK Listing Authority and to trading on the London Stock Exchange's Regulated Market.]
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]: "[]"]
[]
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.]
ii. Common Code: []
iii. Any clearing system(s) other than Euroclear Bank SA/NV and Clearstream Banking, S.A. and the relevant identification number(s):
[Not Applicable/]
[Euroclear Sweden Identification number:]
iv. Delivery: Delivery [against/free of] payment
[[]/Not Applicable]
[[]/Not Applicable]
[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]
Prohibition of Sales to EEA Retail Investors: [Applicable] [Not Applicable] 2
2 If the offer of the Notes is concluded prior to 1 January 2018, or on and after that date the Notes clearly do not constitute "packaged" products, "Not Applicable " should be specified. If the offer of the Notes will be concluded on or after 1 January 2018 and the Notes may constitute "packaged" products and no key information document will be prepared, "Applicable" should be specified.
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.
The Notes are not intended [, from 1 January 2018,] to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (EEA). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, MiFID II); (ii) a customer within the meaning of Directive 2002/92/EU (as amended, the Insurance Mediation Directive), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Directive 2003/71/EC (as amended including by Directive 2010/73/EU, the Prospectus Directive). Consequently no key information document required by Regulation (EU) No 1286/2014 (the PRIIPS Regulation) for offering or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPS Regulation.] 13
[MIFID II PRODUCT GOVERNANCE / TARGET MARKET – [appropriate target market legend to be included]]
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 15 December 2017 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, Section G, Floor 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 15 December 2017. Full information on the Issuer and the
1 Legend to be included on front of the Final Terms (i) for offers concluded on or after 1 January 2018 if the Notes potentially constitute "packaged" products and no key information document will be prepared or the issuer wishes to prohibit offers to EEA retail investors for any other reason, in which case the selling restriction should be specified to be "Applicable" or (ii) for offers concluded before 1 January 2018 at the option of the parties.
offer of the Notes is only available on the basis of the combination of this Pricing Supplement and the Prospectus dated 15 December 2017 and the supplement(s) to it dated [] and []]. [The Prospectus dated 15 December 2017 [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, Section G, Floor 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) | |
|---|---|---|---|
| 2. | [(a)] | Series Number: | [] |
| [(b) | Tranche Number: | []] | |
| [(c)] | Date on which the Notes will be consolidated and form a single Series: |
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] |
|
| 3. | Specified Currency or Currencies: | [] | |
| 4. | Aggregate Principal Amount: | [] | |
| [(i) Series: | []] [Insert total principal amount of outstanding Notes, including the Tranche which is the subject of this Pricing Supplement] |
||
| [(ii) Tranche: | []] | ||
| 5. | Issue Price: | [] per cent. of the Aggregate Principal Amount [plus accrued interest from [] (if applicable)] |
|
| 6. | (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 [].] |
|||
| (ii) | Calculation Amount: | [] | |
| [If only one Specified Denomination, insert the |
Specified Denomination. If more than one Specified Denomination, insert the highest
factor in the case of two or more Specified Denominations] 7. (i) Issue Date: [] (ii) Interest Commencement Date: [][Issue Date][Not Applicable] 8. Maturity Date: [] [specify date or (for Floating Rate Notes) Interest Payment Date falling in or nearest to the relevant month and year] 9. Interest Basis: [[] per cent. Fixed Rate] [[ ] month [LIBOR/EURIBOR/STIBOR/Other (specify reference rate)] +/- [] per cent. Floating Rate]] [Zero Coupon] [Other (specify)] [(further particulars specified below)] 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]
common factor][N.B. there must be a common
[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 up to and including the Maturity Date] [adjusted for payment day purposes only in accordance with the Modified Business Day Convention] [adjusted for payment and interest accrual purposes in accordance with the Modified Business Day Convention] |
|
| (iii) | Fixed Coupon Amount[(s)]: | [[] per Calculation Amount] [Each Fixed Coupon Amount shall be calculated by multiplying the product of the Rate of Interest and the Calculation Amount by the Day Count Fraction and rounding the resultant figure to the nearest [CNY 0.01, CNY 0.005] [HK\$0.01, HK\$0.005] being rounded upwards] [Not Applicable] |
|
| (iv) | Broken Amount(s): | [Not Applicable/[] per Calculation Amount, payable on the Interest Payment Date falling [in/on] []] [Not Applicable] |
|
| (v) | Day Count Fraction: | [Actual/ Actual (ICMA)] |
| [Actual/ Actual (ISDA)] [Actual/ 365 (Fixed)] [Actual/ 360] [30/360] [30E/360] [30E/360 (ISDA)] [Other (specify)] |
|||
|---|---|---|---|
| (vi) | Additional Business Centre(s): | [Not Applicable] [] | |
| (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) | 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) | Name and address of person responsible for calculating Basis of Interest and Interest Amount: |
[] [Not Applicable] | |
| (x) | 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] [] |
72
| Interest is/are to be determined: | 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 sub-paragraph (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 | |
(vii) Manner in which the Rate(s) of
[Screen Rate Determination][ISDA
| (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 sub paragraphs 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: |
[] [need to include a description of market disruption or settlement disruption events and adjustment provisions] |
|
| (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: |
[] |
| (vi) | Interest or calculation period(s): | [] | ||
|---|---|---|---|---|
| (vii) | Interest Payment Dates/Specified Periods: |
[] | ||
| (viii) Business Day Convention: |
[Floating Rate Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention/other (give details)] |
|||
| (ix) | Additional Business Centre(s): | [] | ||
| (x) | Minimum Rate/Amount of Interest: |
[] per cent. per annum | ||
| (xi) | Maximum Rate/Amount of Interest: |
[] per cent. per annum | ||
| (xii) | Day Count Fraction: | [] | ||
| 17. | Dual Currency Note Provisions | [Applicable/Not Applicable] | ||
| (If not applicable, delete the remaining sub paragraphs of this paragraph) |
||||
| (i) | Rate of Exchange/method of calculating Rate of Exchange: |
[give details] | ||
| (ii) | Calculation Agent, or other party, if any, responsible for calculating the principal and/or interest due (if not the Agent): |
[] | ||
| (iii) | Provisions applicable where calculation by reference to Rate of Exchange impossible or impracticable: |
[] | ||
| (iv) | Person at whose option Specified Currency(ies) is/are payable: |
[] | ||
| PROVISIONS RELATING TO REDEMPTION | ||||
| 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)
[If not applicable, delete the remaining subparagraphs of this paragraph]
(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]
[Registered Notes]
[Swedish Registered Notes
Registrar: Euroclear Sweden Swedish Issuing Agent: []] 23. (i) New Global Note: [Yes][No] (ii) New Safekeeping Structure: [Yes][No] 24. Additional Financial Centre(s) or other special provisions relating to payment dates: [Not Applicable][] 25. Talons for future Coupons or Receipts to be attached to Definitive Notes (and dates on which such Talons mature): [Yes/ No. If yes, give details] 26. RMB Settlement Centre(s): [] [Hong Kong] [Not Applicable] 27. Details relating to Partly Paid Notes amount of each payment comprising the Issue Price and date on which each payment is to be made [and consequences (if any) of failure to pay, including any right of the Issuer to forfeit the Notes and interest due on late payment]: [Not Applicable/give details] 28. Details relating to Instalment Notes: amount of each instalment, date on which each payment is to be made: [Not Applicable/give details] 29. Redenomination, renominalisation and reconventioning provisions: [Not Applicable/give details] 30. Other final terms or special conditions: [Not Applicable][Specify details]
[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 [].] [Series [] of the Notes is already admitted to [] and to trading on the [].] [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.]: []]
[] [Not Applicable]
[]
| i. | Reasons for the offer: | [] |
|---|---|---|
| ii. | Estimated net proceeds: | [] |
iii. Estimated total expenses: []]
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:]
relevant identification number(s):
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.]
| 7. | DISTRIBUTION | |||
|---|---|---|---|---|
| US Selling Restrictions: | [Reg. S Compliance 2/Not Applicable] | |||
| [TEFRA C/TEFRA D/TEFRA not applicable] | ||||
| Prohibition of Sales to EEA Retail Investors: | [Applicable] [Not Applicable] 24 | |||
| Additional Selling Restrictions: | [] |
2 If the offer of the Notes is concluded prior to 1 January 2018, or on and after that date the Notes clearly do not constitute "packaged" products, "Not Applicable" should be specified. If the offer of the Notes will be concluded on or after 1 January 2018 and the Notes may constitute "packaged" products and no key information document will be prepared, "Applicable" should be specified.
[Costs and charges disclosure: []]
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, Section G, Floor 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 sales in more than 150 countries worldwide (as at 31 December 2016) 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 2016 the Group had about 43,000 employees and annual revenue of SEK 81.553 billion.
The Issuer focuses on areas where it is or believes it can become world leading and the customers' first choice. By focusing on its core capabilities – material knowledge, close cooperation with customers to develop its offering, and ability to industrialise – the Issuer ensures its leading position within metal cutting, mining and rock technology and advanced material knowledge.
Following an analysis of profit, business potential and core capabilities, the Issuer made important decisions that allowed it to focus on its core areas. Key progress included:
The Issuer strives to be a technology leader within its chosen segments and markets by investing in product innovation, research and development, efficient time-to-market processes and through close cooperation with its customers.
The Issuer continued to focus on product innovations that boost productivity and energy efficiency, reduce CO2 emissions, improve resource utilisation and increase safety, as well as leverage digitalisation opportunities. Examples include:
The Issuer ensures a high degree of accountability by taking decisions close to customers through a decentralised, entrepreneurial way of working.
The Issuer continued to decentralise its business model to ensure that decisions are made closer to its customers, thereby improving the speed with which they can respond to customers' requirements and market changes. Examples include:
The Issuer focuses on stability and profitability before growth. This involves ensuring that it has the right organisational structure, strong management, efficient working processes and that its businesses ensure stable, predictable results as a prerequisite before driving growth.
The Issuer's business areas were characterised by different challenges and opportunities concerning stability, profitability and growth, which require different strategies and focus. Sandvik Machining Solutions has maintained a stable and profitable business and strengthened its growth ambitions, for example through additive manufacturing. Sandvik Mining and Rock Technology focused on stability by ensuring the right organisational structure, strong management and efficient working processes were in place during the process of restructuring. Sandvik Materials Technology focused on ensuring stable performance and profitability by generating value for the Group through greater efficiency in administration and sales costs and net working capital.
The Issuer strives to achieve efficiency through continuous improvements. This involves promoting a culture of implementing small every-day improvements to increase its productivity, efficiency and consequently, achieve cost reductions – and ultimately ensure operational excellence.
The Issuer established an overall objective to achieve year-on-year productivity improvements of at least 3 per cent. (by reference to revenues per employee). A number of important improvements were made during the year. Examples include:
The Issuer believes that high ethical standards and strong values create long-term value for customers, employees and other stakeholders. Through the Issuer's values, the Code of Conduct and key policies, all encompassed within the governance model, "The Sandvik Way", the Issuer sets clear standards for "doing things right". These key principles apply to all parts of the Issuer and are non-negotiable for all employees and entities. The Issuer's "Speak Up" and investigations processes support central principles within internal control, compliance and internal audit to build a stable foundation for the Issuer's long term business.
The Issuer launched their new governance model, "The Sandvik Way", in 2016, with a complete review of all policies and procedures to adjust them to the new decentralisation strategy. The Issuer's Speak Up process was further developed and transferred to the business areas, through the new investigations procedure, which aims to ensure that it deals with all deviations from the Code of Conduct and policies swiftly and with integrity. The Issuer's compliance programme continues to be rolled-out, including the launch of the Data Privacy-program, to prepare for new legislation entering into force in 2018.
The Issuer promotes a culture that attracts, develops and retains exceptional people, and ensures that the Group is a great place to work. This is fundamental to the Issuer's success.
The Issuer continues to drive initiatives that promote leadership and develop key competence within the organisation. The Issuer focuses on attracting and recruiting employees through its increased digital presence, and takes measures to increase diversity and inclusion. Examples include:
15Net debt to equity ratio means interest-bearing current and non-current debts, including net pension liabilities, less cash and cash equivalents divided by shareholders' equity including non-controlling interests.
The Issuer believes that it can create a more sustainable future together with its customers, employees, shareholders and other stakeholders. Its sustainable business strategy, revised in 2016, aims to further integrate these matters into its core operations, and promote a greater understanding of how its offerings can contribute to a better future. Examples of the Issuer's sustainable strategies include:
On 17 May 2017, the Issuer announced Sandvik Materials Technology's intention to divest parts of its wire operations. Welding and stainless wire were to be divested. These businesses are subject to intense competition and Sandvik Materials Technology does not hold a leading market position. In 2016, the wire businesses, which were to be divested, generated total annual revenues of about SEK 700 million. Kanthal wire for industrial heating remains in Sandvik Materials Technology. The businesses included in the Kanthal product area are regarded as core businesses due to the strong market position and growth potential. In 2016, operations now transferred into the Kanthal product area had annual revenues of about SEK 800 million.
On 30 October 2017, the Issuer signed an agreement to divest the welding wire operations to ESAB, a global leader in the welding industry and part of Colfax Corporation.
On 8 December 2017, the Issuer signed an agreement to divest Hyperion to the US listed investment firm KKR at a price of SEK 4 billion. Hyperion delivers advanced wear-resistant tools, applications and components in hard and super-hard materials. Hyperion, with approximately 1,400 employees, has in the last twelve months reported revenues of approximately SEK 3.2 billion, representing approximately 4 per cent. of the Issuer's total revenues. The closing of the transaction is expected during the first half of 2018 and is subject to the approval of relevant authorities.
Order intake for the third quarter improved organically by 13 per cent. year-on-year and revenues increased by 12 per cent. at fixed foreign exchange rates. All business areas reported strong growth in order intake. Sandvik Machining Solutions reported organic order growth of 11 per cent., despite an adverse impact of -1 per cent. from reduced working days. In respect of Sandvik Mining and Rock Technology orders improved organically by 18 per cent., including one large order received worth about SEK 250 million. Growth was 15 per cent. excluding the impact of major orders. Sandvik Materials Technology reported an increase of 9 per cent. in orders, including one large order received at a value of about SEK 250 million. Growth was 14 per cent. excluding the impact of major orders. In the three major regions, momentum was strongest in Asia with growth at 14 per cent., supported by a significant increase in China. North America reported 12 per cent. growth. Europe improved by 9 per cent., while the figure excluding large orders was 7 per cent. All customer segments improved or remained stable compared with the same period last year. In general, mining demand as well as demand in the general engineering segment grew and was strong across all regions. The energy segment remained generally stable. The automotive segment remained stable, with increased demand in Asia, while Europe and North America remained steady. The aerospace segment noted an overall stable development. Changed exchange rates had a negative impact of -2 per cent. on both order intake and revenues.
Operating profit rose by 28 per cent. year-on-year to SEK 3.344 billion and the operating margin was 15.4 per cent. If the negative impact of changed exchange rates were excluded, operating profit would have risen by 37 per cent. The improvement in operating profit was driven by strong development in Sandvik Mining and Rock Technology and Sandvik Machining Solutions at 80 per cent. and 18 per cent. respectively, due to higher volumes and implemented efficiency measures. In Sandvik Materials Technology, an operating loss of SEK 57 million was reported, primarily due to a negative mix in deliveries, lower profitability in the more standardised tubular business as well as expected seasonality and an adverse impact from changed metal prices. Total selling and administration expenses rose by 5 per cent. This increase was related to sales costs driven by increased market activity, despite a decline in administrative costs. However, the ratio to revenues declined to 21 per cent. Savings from the ongoing efficiency programme announced earlier generated savings of SEK 85 million year-on-year. Changed exchange rates adversely impacted operating profit by -SEK 244 million. Changed metal prices had an adverse impact of -SEK 64 million on results. Finance net decreased significantly year-on-year to -SEK 193 million due primarily to a lower debt level as well as the marked-to-market valuation of derivatives. The tax rate was 25.5 per cent. for continuing operations. The tax rate for the Group total was 25.2 per cent. for the quarter ended 30 September 2017.
Capital employed declined year-on-year to SEK 75.2 billion primarily due to the impact from changed exchange rates.
Net working capital decreased overall by about SEK 200 million year-on-year to SEK 21.6 billion. The decline in reported net working capital was due to the impact from changed exchange rates, while the underlying organic net working capital remained generally stable. The increase in inventories and accounts receivables was more than offset by higher accounts payable and customer advances. Net working capital in relation to revenues declined to 25 per cent. for the quarter.
Investments in tangible and intangible assets in the third quarter amounted to SEK 770 million, corresponding to 76 per cent. of depreciation. Investments are seasonally higher in the second half of the year.
Financial net debt amounted to SEK 25.3 billion in the third quarter, declining year-on-year from SEK 33.5 billion. The net debt to equity ratio declined to 0.62. The net pension liability declined year-on-year from SEK 7.6 million to SEK 6.0 billion due to changed discount rates and increased asset values. Interest-bearing debt with short-term maturity accounted for 9 per cent. of total debt.
Cash flow from operations was reported at SEK 3.8 billion and declined year-on-year. While operating earnings increased, net working capital remained largely unchanged. The previous year's significant reduction in net working capital was not repeated. Consequently, free operating cash flow declined by 14 per cent. year-on-year to SEK 3.7 billion, to be compared with operating profit of SEK 3.3 billion.
Order intake improved organically by 18 per cent. year-on-year, yielding a neutral ratio of orders received to the amount billed for the period (book-to-bill ratio) of 102 per cent. Revenues increased organically by 17 per cent. supported by strong order intake in recent quarters and a favourable demand in the aftermarket business. The following key items impacted orders and revenues compared to the same period last year:
Operating profit improved by 80 per cent. and the operating margin increased significantly to 16.4 per cent., despite an adverse impact from changed exchange rates. The following items impacted operating profit and margin:
For discontinued operations, order intake increased by 30 per cent. and revenues by 33 per cent. year-onyear at fixed exchange rates for comparable units. The operating profit amounted to SEK 33 million. The operating profit in the previous year period was negatively impacted by -SEK 847 million in capital loss related to the planned divestment of Mining Systems. Changed exchange rates impacted earnings positively by SEK 17 million.
Order intake and revenues increased significant year-on-year by 11 per cent. and 10 per cent., respectively. Demand improved in all geographical regions as customer activity intensified or remained stable in all customer segments. The following key items impacted orders and revenues compared to the same period last year:
The operating profit improved by 18 per cent. year-on-year, despite a negative impact from changed exchange rates. The operating margin increased to 23 per cent. The following items impacted operating profit and margin:
Organic order intake increased by 9 per cent. and book-to-bill ratio was 102 per cent. Excluding the impact from major orders, order intake improved by 14 per cent. Revenues improved organically by 3 per cent. Higher alloy prices positively impacted both order intake and revenues by 1 per cent, primarily related to nickel. The following key items impacted orders and revenues compared to the same period last year:
An operating loss of SEK 57 million was reported, in a seasonally weak quarter. If metal price effects were excluded, operating profit would have been SEK 7 million and the operating margin would have been 0.2 per cent. (in each case, including a positive impact from currencies). The following key items impacted operating profit and margin:
Organic order intake improved by 9 per cent., which was the result of positive development in Hyperion, although this was partially offset by a decline in Process Systems. Revenues increased by 10 per cent. as received orders received were converted into deliveries.
The following key items impacted orders and revenues compared to the same period last year:
Operating profit improved by 8 per cent. and the operating margin increased to 10.3 per cent., adversely impacted by transaction-related costs of about -SEK 20 million. The following key items impacted operating profit and margin:
The Issuer's revenues after the third quarter of 2017 amounted to SEK 12.241 billion (compared with SEK 10.988 billion for the same period in 2016) and the operating profit was SEK 1.229 million (compared with -SEK 200 million for the same period in 2016). Expense of shares in Group companies consists primarily of dividends and Group contributions to these and amounted after the third quarter to - SEK 3.841 billion. Interest-bearing liabilities, less cash and cash equivalents and interest-bearing assets, amounted to SEK 16.225 billion. Investments in property, plant and machinery amounted to SEK 533 million.
On 1 October 2016, Comara GmbH (Comara) was acquired by way of an asset-transfer arrangement. Comara specialises in collecting, evaluating and using real-time data to connect machines, and as at the date of the acquisition, the annual revenue generated by Comara was SEK 8 million. Together with Walter, Comara also develops software solutions for connecting all devices in the production environment, from machines and tools to logistics and databases. With "appCom", Comara offers machine manufacturers and industrial companies their own platform for individual "apps" (special software modules) in the production environment.
On 2 November 2017, the Issuer announced the completion of divestments of Mining Systems (which is a supplier of design and engineering of material handling systems, with annual revenue of SEK 2.9 billion in 2016):
On 1 December 2017, the Issuer announced the completion of the divestment of Sandvik Process Systems (which is a supplier of industrial process solutions, with annual revenue of SEK 1.7 billion in 2016) to FAM AB.
| Business area | Company/unit | Closing date |
|---|---|---|
| Sandvik Machining Solutions | Comara GmbH | 1 October 2016 |
| Business area | Purchaser(s) | Closing date |
|---|---|---|
| Sandvik Mining Systems 26 | FLSmidth and NEPEAN | 2 November 2017 |
| Sandvik Process Systems | FAM AB | 1 December 2017 |
The Board of Directors of the Issuer (the Board) is responsible for the Issuer's organisation and the management of the Issuer's business. The Board is required to continuously monitor the Issuer's and the Group's financial position.
The Board is to ensure that the Issuer's organisation is designed in a way that ensures that the financial statements, the management of assets and the Issuer's financial condition in general are controlled in a satisfactory manner.
The President is appointed by the Board and 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 is laid down in the Board's Procedural Guidelines which are reviewed and adopted each year. The review is based on such aspects as the Board's evaluation of the individual and collective work that the Board performs.
In addition to financial reporting and the monitoring and follow-up of daily operations and profit trend, Board meetings address the goals and strategies for the operations, significant acquisitions and investments, as well as matters relating to the capital structure. Senior executives report business plans and strategic issues to the Board on an ongoing basis.
The Board consists of eight members (Directors) elected by the Annual General Meeting. Pursuant to Swedish legislation, trade unions are entitled to representation on the Board and they have appointed two members and two deputies.
Johan Molin, b. 1959. Chairman of the Board since 2015. Chairman of the Remuneration Committee.
Education and business experience: Master of Science in Business and Economics 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 and AVEVA Group 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.
26 The project part of the business related to mining industry has been divested to FLSmidth, with the exception of the project business assets in South Africa which awaits merger control clearance. Clearance is expected during the first quarter of 2018.
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 of 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. In 1997-1998 she worked as a consultant at Bain & Company.
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 and Stena AB.
Tomas Kärnström, b. 1966. Director of the Issuer since 2006 (Employee representative).
Education and business experience: Chairman of the Union Committee, Metal Worker's Union, Sandvik Materials Technology. Various positions within the Group since 1986.
Current Board assignments: None.
Marika Fredriksson, b. 1963. Director of the Issuer since 2017.
Education and business experience: Master of Business Administration. CFO & Group Executive Vice President of Vestas Wind Systems A/S since 2013. Previously CFO of Gambro AB, CFO of Autoliv Inc. and several senior positions within the Volvo Group.
Current Board assignments: Director of SSAB AB.
Tomas Lilja, b. 1975. Director of the Issuer since 2016 (Employee representative).
Education and business experience: Technical College Graduate – Mechanical Engineering. Chairman of Trade Union Unionen Sandvik Sweden and Unionen Coromant & Machining Solutions. Process & System Coordinator Direct Purchasing at Sandvik Tooling 2007-2010 and Professional Buyer Direct Material at Sandvik Coromant/ Tooling 2000-2007. Various positions within production and logistics at Scania 1995-2000.
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, Section G, Floor 6, Box 510, Stockholm SE-10130, Sweden.
Auditor-in-charge (as from January 2017): Joakim Thilstedt, b. 1967. Auditor-in-charge, Authorised Public Accountant.
Other auditing assignments: Auditor-in-charge at Ahlsell AB, Holmen AB, Hufvudstaden AB, LE Lundbergföretagen AB and Modern Times Group MTG AB, among others.
The President and CEO is accountable for Group decision-making in all areas delegated by the Board. In order to ensure a full Group perspective in these matters, the President has appointed the Group Executive Management as an advisory forum, focusing on how to achieve Group targets, strategies, structure and organisation. The Group Executive Management meets each month and its members are accountable for implementing the President's decisions.
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 of Atlas Copco AB and Business Area President for Construction and Mining Technique 2002–2011. President of the Atlas Copco Rock Drilling Equipment Division 2001–
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: B.Sc. in Business Administration and Economics, 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: Director in Millicom International Callular S.A.
Göran Björkman, b. 1965. President of the Sandvik Materials Technology business area since November 2017.
Education and business experience: M.Sc. in Mechanical Engineering. Employed at Sandvik since 1990. Various leading positions within Sandvik Materials Technology 1990–2008, including General Manager Process Support and Distribution, and Vice President and Head of Primary Products. Several senior positions within business area Sandvik Machining Solutions 2008–2017, including Head of Business Development, Vice President Production Strategy, and Vice President Production at product area Sandvik Coromant.
Current Board assignments: None.
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. President and CEO of 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: Director of the industry association Svemin.
Klas Forsström, b.1967. President of the Sandvik Machining Solutions business area, as of April 2017.
Education and business experience: M.Sc. Material Physics and an MBA in International Marketing and Business, Uppsala University, Sweden. Advance Management Program at INSEAD, France. Various positions within Sandvik since 1992, including President for Sandvik Coromant 2011-2017 and President for Sandvik Hard Materials 2009-2011.
Current Board assignments: None.
Johan Kerstell, b.1970 Executive Vice President and Head of Human Resources, Sandvik AB, since 1 June 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 the Group 2004–2016.
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.
The business address for the Group Executive Management and Extended Group Executive Management is currently Kungsbron 1, Section G, Floor 6, Box 510, Stockholm SE-101 30, Sweden.
The tasks of the Committees and their work procedures are stipulated in written instructions issued by the Board. The Committees' primary task is to prepare issues and present them to the Board for resolution.
During 2016, the members of the Remuneration Committee were the Chairman of the Board Johan Molin (Chairman of the Committee), Johan Karlström and Lars Westerberg. The tasks of the Remuneration Committee are, among others, those prescribed by the Code, which include preparing proposals regarding guidelines for remuneration of senior executives and long-term incentive programmes for senior executives.
Based on the recommendations of the Remuneration Committee, the Board decides the remuneration and terms of employment for the President, who in turn decides on the remuneration to be paid to the Group Executive Management in consultation with the Remuneration Committee.
Since the 2016 Annual General Meeting, the members of the Audit Committee are Claes Boustedt (Chairman of the Committee), Helena Stjernholm and Lars Westerberg. Areas addressed by the Audit Committee mainly related to:
• the Group's systematic processes for risk management, including legal disputes, accounting procedures, taxation, finance operations and pension issues;
• the development and effectiveness of compliance processes and Speak Up, the Issuer's global whistleblowing system; and
• the Issuer's sustainable business strategy and materiality analysis.
In 2016, the Audit Committee held five meetings at which the Issuer's external auditor and representatives of the Issuer's management were present.
The Nomination Committee is a preparatory body that prepares proposals for, among other things, the election of the Board of Directors, the Chairman of the Board and auditors as well as fees for adoption at the General Meeting. The Annual General Meeting has adopted an instruction for the Nomination Committee, which includes 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 consist of representatives of the four largest shareholders, in terms of the number of votes, on the final business day in August plus the Chairman of the Board (convener).
For the 2017 Annual General Meeting, the Nomination Committee consists of Fredrik Lundberg, Chairman (Industrivärden), Kaj Thorén (Alecta), Pär Boman (Handelsbanken Pension), Marianne Nilsson (Swedbank Robur Funds) and Johan Molin (the Issuer's Chairman of the Board).
Up to the date of the Annual General Meeting, the Nomination Committee met on three occasions and held separate sessions to interview potential candidates for the Board. Through the Issuer's Chairman of the Board, the Nomination Committee was informed of the results of the Board's own evaluation. The Committee also met with the Issuer's President to review the company's operations, stage of development and overall strategy. The Nomination Committee discussed the general criteria that Board members should fulfill, including the independence requirement, and reviewed the number of Board assignments that each Board member has in other companies. Furthermore, the Nomination Committee paid special attention to the requirements relating to diversity and breadth as well as the requirement to strive for gender balance.
Corporate governance within the Issuer is based on external rules such as the Swedish Companies Act, the Stock Exchange's Rule Book for Issuers, the Swedish Code of Corporate Governance (the Code) and other relevant laws and regulations. The Code is available from corporategovernanceboard.se. In 2016 the Issuer applied the Code without deviating from any of its regulations. Any content of the website of The Swedish Corporate Governance Board shall not form part of this Base Prospectus.
Helena Stjernholm is not regarded as independent in relation to major shareholders in the Issuer and Björn Rosengren is not regarded as independent in relation to the Issuer and its executive management. The other six Board members elected by the General Meeting are all independent in relation to the Issuer and its executive management, as well as the Issuer's major shareholders. Accordingly, the composition of the Board complies with the independence requirements of the Code.
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 (Sw. 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 30 September 2017, the Issuer's ten largest shareholders held 35.6 per cent. of the total number of shares. They are as follows: Industrivärden (11.9 per cent.), Alecta Pensionsförsäkring (5.9 per cent.), AMF – Försäkring och Fonder (3.1 per cent.), Swedbank Robur Fonder (2.6 per cent.), Handelsbanken Pensionsstiftelse (2.6 per cent), L E Lundbergföretagen AB (2.4 per cent.), BlackRock (2.1 per cent.), Vanguard (2 per cent.), SEB Fonder (1.6 per cent.), Göranssonska Stiftelserna (1.4 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 2016 and 2015 and the consolidated unaudited interim financial statements for the nine months ended 30 September 2017.
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 70 to 81 of the Annual Report of 2016, and pages 71 to 81 of the Annual Report of 2015. The quarterly financial statements are prepared under IFRS and are unaudited.
| 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 Issuer considers the following metrics (which are referred to in this Prospectus, the Issuer's 2016 Annual Report and accounts, the Issuer's 2015 Annual Report and accounts and/or the Issuer's interim report for the Third Quarter of 2017, as the case may be) to constitute Alternative Performance Measures (as defined in the European Securities and Markets Authority Guidelines on Alternative Performance Measures).
The following is a general description of certain EU tax considerations relating to the Notes and also certain Swedish tax consequences 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 not address, inter alia, 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 respective 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 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 or continuous stay in Sweden 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 in relation to certain payments of interest (and other distributions on Notes) to a private individual (or the 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 (for example, 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, for example life insurance companies. Moreover, 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 a legal entity domiciled in Sweden, including a Swedish branch, or clearing institution within the EEA, 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 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 that is six months after 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 15 December 2017 (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. Any such agreement will also provide that the obligations of the Dealers to subscribe for Notes may be subject to certain conditions precedent, including (among other things) receipt of legal opinions from counsel. 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.
From 1 January 2018, unless the Final Terms (or Drawdown Prospectus, as the case may be) in respect of the Notes specify the "Prohibition of Sales to EEA Retail Investors" as "Not Applicable", each Dealer has represented and agreed and each further Dealer appointed under the Programme will be required to represent and agree, that it has not offered, sold or otherwise made available and will not offer, sell or otherwise make available, any Notes which are the subject of the offering contemplated by this Base Prospectus as completed by the Final Terms in relation thereto to any retail investor in the EEA. For purposes of this provision, the expression retail investor means a person who is one (or more) of the following:
(iii) not a qualified investor as defined in the Prospectus Directive.
Prior to 1 January 2018 and from that date if the Final Terms in respect of any Note specify the "Prohibition of Sales to EEA Retail Investors" as "Not Applicable", in relation to each Member State of the EEA 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:
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;
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. 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 has not offered or sold any Notes or caused the Notes to be made the subject of an invitation for subscription or purchase and will not offer to sell any Notes or cause the Notes to be made the subject of an invitation for subscription or purchase, and has not circulated or distributed nor will it circulate or distribute, this Base Prospectus or any other document or material in connection with the offer or sale or invitation for subscription or purchase, of the Notes, whether directly or indirectly, to any person in Singapore other than (i) to an institutional investor (as defined in section 4A of the Securities and Futures Act (Chapter 289 of Singapore) (the SFA)) pursuant to section 274 of the SFA, (ii) 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 (iii) 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 Section G, Floor 6, Box 510 Stockholm SE-101 30 Sweden
Citigroup Centre Canada Square Canary Wharf London E14 5LB United Kingdom
Winchester House 1 Great Winchester Street London EC2N 2DB United Kingdom
8 Canada Square London E14 5HQ United Kingdom
Ropemaker Place 25 Ropemaker Street London EC2Y 9AJ United Kingdom
Kungträdgårdsgatan 8 106 40 Stockholm Sweden
One Basinghall Avenue London EC2V 5DD United Kingdom
SE-105 34 Stockholm Sweden
Bank 12, place des Etats-Unis CS 70052 92547 Montrouge Cedex France
Danske Bank A/S 2-12 Holmens Kanal DK-1092 Copenhagen K Denmark
J.P. Morgan Securities plc 25 Bank Street Canary Wharf London E14 5JP United Kingdom
Smålandsgatan 17 105 71 Stockholm Sweden
29 boulevard Haussmann 75009 Paris France
Blasieholmstorg 11 SE-106 70 Stockholm Sweden
Citigroup Centre Canada Square Canary Wharf London E14 5LB United Kingdom
Citigroup Centre Canada Square Canary Wharf London E14 5LB United Kingdom
Citibank N.A., London Branch Citigroup Centre Canada Square Canary Wharf London E14 5LB United Kingdom
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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