TIDM80VD
RNS Number : 2324G
Ringkjoebing Landbobank Akt
02 November 2018
RINGKJØBING LANDBOBANK AKTIESELSKAB
(incorporated with limited liability in Denmark)
EUR2,000,000,000
Euro Medium Term Note Programme
Under this EUR2,000,000,000 Euro Medium Term Note Programme (the
"Programme"), Ringkjøbing Landbobank Aktieselskab (the "Issuer" or
the "Bank") may from time to time issue notes (the "Notes")
denominated in any currency agreed between the Issuer and the
relevant Dealer(s) (as defined below).
Under the Programme, Notes issued by the Bank may be dated and
with a ranking as described in Condition 2.1 (Status of the
Preferred Senior Notes) in "Terms and Conditions of the Notes"
("Preferred Senior Notes"), dated and with a ranking as described
in Condition 2.2 (Status of the Non-Preferred Senior Notes) in
"Terms and Conditions of the Notes" ("Non-Preferred Senior Notes"),
and dated, subordinated and, on issue, constituting Tier 2 Capital
(as defined in Condition 2.3 (Status of the Subordinated Notes) in
"Terms and Conditions of the Notes") ("Subordinated Notes").
This Prospectus supersedes any previous prospectus, offering
memorandum, programme memorandum, information memorandum or any
amendments or supplements thereto.
The maximum aggregate nominal amount of all Notes from time to
time outstanding under the Programme will not exceed
EUR2,000,000,000 (or its equivalent in other currencies calculated
as described in the Programme Agreement described herein), subject
to increase as described herein.
The Notes may be issued on a continuing basis to one or more of
the Dealers specified under "Overview of the Programme" and any
additional Dealer appointed under the Programme from time to time
by the Issuer (each a "Dealer" and together the "Dealers"), which
appointment may be for a specific issue or on an ongoing basis.
References in this Prospectus to the "relevant Dealer" shall, in
the case of an issue of Notes being (or intended to be) subscribed
by more than one Dealer, be to all Dealers agreeing to subscribe
such Notes. Notes may be issued in (a) uncertificated and
dematerialised book entry form ("VP Systems Notes") cleared through
the Danish Securities Centre (Da. "VP Securities A/S") ("VP Notes"
and the "VP", respectively) or (b) bearer form ("Bearer
Notes").
An investment in Notes issued under the Programme involves
certain risks. For a discussion of these risks see "Risk
Factors".
Application has been made to the Financial Conduct Authority in
its capacity as competent authority under the Financial Services
and Markets Act 2000 (the "UK Listing Authority") for Notes issued
under the Programme during the 12 month period from the date of
this Prospectus to be admitted to the official list of the UK
Listing Authority (the "Official List") and to the London Stock
Exchange plc (the "London Stock Exchange") for such Notes to be
admitted to trading on the London Stock Exchange's regulated
market.
References in this Prospectus to Notes being "listed" (and all
related references) shall mean that such Notes have been admitted
to trading on the London Stock Exchange's regulated market and have
been admitted to the Official List. The London Stock Exchange's
regulated market is a regulated market for the purposes of
Directive 2014/65/EU (the "Markets in Financial Instruments
Directive").
Details of the aggregate nominal amount of Notes, interest (if
any) payable in respect of Notes and the issue price of Notes for
each Tranche (as defined under "Terms and Conditions of the Notes")
of Notes will be set out in a final terms document (the "Final
Terms").
The Bearer Notes of each Tranche will initially be represented
by a temporary global note or a permanent global note which will be
deposited on the issue date thereof with the common depository or,
as the case may be, common safekeeper on behalf of Euroclear Bank
SA/NV ("Euroclear") and Clearstream Banking S.A. ("Clearstream,
Luxembourg") and/or any other agreed clearing system. The VP
Systems Notes of each Tranche will be issued in uncertificated and
dematerialised book entry form as more fully described in the "Form
of the Notes" and "Terms and Conditions of the Notes".
The Issuer may agree with any Dealer that Notes may be issued in
a form not contemplated by the Terms and Conditions of the Notes
herein, in which event a new Prospectus, if appropriate, will be
made available which will describe the effect of the agreement
reached in relation to such Notes.
The Issuer has been rated by Moody's Investors Service Ltd,
among others with a Long Term Issuer Rating of A2 and a Long Term
Deposit Rating of A1. Where a certain Series of Notes is rated,
such rating will be specified in the applicable Final Terms. Please
also refer to "Credit ratings may not reflect all risks" in the
Risk Factors section of this Prospectus. For the purposes of the
credit ratings included and referred to in this Prospectus, Moody's
Investors Service Ltd. is established in the European Union and is
registered under the CRA Regulation.
Interest or other amounts payable under the Notes may be
calculated by reference to certain benchmarks. Details of the
administrators of such benchmarks, including details of whether or
not, as at the date of this Prospectus, each such administrator's
name appears on the register of administrators and benchmarks
established and maintained by the European Securities and Markets
Authority ("ESMA") ("ESMA Benchmarks Register") pursuant to article
36 of Regulation (EU) 2016/1011 (the "Benchmarks Regulation") are
set out in the section entitled "Important Notices - Benchmarks
Regulation" on pages v to vi of this Prospectus.
Arranger
Nordea
Dealers
Danske Bank Landesbank Baden-Württemberg
Nordea Nykredit Bank
SEB
The date of this Prospectus is 29 October 2018.
This Prospectus comprises a base prospectus for the purposes of
Article 5.4 of the Prospectus Directive.
The Issuer (the "Responsible Person") accepts responsibility for
the information contained in this Prospectus and the Final Terms
for each Tranche of Notes issued under the Programme. To the best
of the knowledge of the Issuer (having taken all reasonable care to
ensure that such is the case) the information contained in this
Prospectus is in accordance with the facts and does not omit
anything likely to affect the import of such information.
Subject as provided in the applicable Final Terms, the only
persons authorised to use this Prospectus in connection with an
offer of Notes are the persons named in the applicable Final Terms
as the relevant Dealer or the Managers, as the case may be.
Copies of Final Terms will be available from the registered
office of the Issuer and (in the case of Bearer Notes) the
specified office set out below of each of the Paying Agents (as
defined below) or (in the case of VP Systems Notes) the specified
office of VP Issuing Agent (as defined below).
This Prospectus is to be read in conjunction with all documents
which are deemed to be incorporated herein by reference (see
"Documents Incorporated by Reference"). This Prospectus shall be
read and construed on the basis that such documents are
incorporated and form part of this Prospectus.
Save for the Issuer, no party has independently verified the
information contained herein. Accordingly, no representation,
warranty or undertaking, express or implied, is made and no
responsibility or liability is accepted by the Dealers as to the
accuracy or completeness of the information contained or
incorporated in this Prospectus or any other information provided
by the Issuer in connection with the Programme. No Dealer accepts
any liability in relation to the information contained or
incorporated by reference in this Prospectus or any other
information provided by the Issuer in connection with the
Programme.
No person is or has been authorised by the Issuer to give any
information or to make any representation not contained in or not
consistent with this Prospectus or any other information supplied
in connection with the Programme or the Notes and, if given or
made, such information or representation must not be relied upon as
having been authorised by the Issuer or any of the Dealers.
Neither this Prospectus nor any other information supplied in
connection with the Programme or any Notes (a) is intended to
provide the basis of any credit or other evaluation or (b) should
be considered as a recommendation by the Issuer or any of the
Dealers that any recipient of this Prospectus or any other
information supplied in connection with the Programme or any Notes
should purchase any Notes. Each investor contemplating purchasing
any Notes should make its own independent investigation of the
financial condition and affairs, and its own appraisal of the
creditworthiness, of the Issuer. Neither this Prospectus nor any
other information supplied in connection with the Programme or the
issue of any Notes constitutes an offer or invitation by or on
behalf of the Issuer or any of the Dealers to any person to
subscribe for or to purchase any Notes.
Neither the delivery of this Prospectus nor the offering, sale
or delivery of any Notes shall in any circumstances imply that the
information contained herein concerning the Issuer is correct at
any time subsequent to the date hereof or that any other
information supplied in connection with the Programme is correct as
of any time subsequent to the date indicated in the document
containing the same. The Dealers expressly do not undertake to
review the financial condition or affairs of the Issuer during the
life of the Programme or to advise any investor in the Notes of any
information coming to their attention.
The Notes have not been and will not be registered under the
United States Securities Act of 1933, as amended, (the "Securities
Act") and are subject to U.S. tax law requirements. Subject to
certain exceptions, Notes may not be offered, sold or delivered
within the United States or to, or for the account or benefit of,
U.S. persons (see "Subscription and Sale").
This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any Notes in any jurisdiction to
any person to whom it is unlawful to make the offer or solicitation
in such jurisdiction. The distribution of this Prospectus and the
offer or sale of Notes may be restricted by law in certain
jurisdictions. The Issuer and the Dealers do not represent that
this Prospectus may be lawfully distributed, or that any Notes may
be lawfully offered, in compliance with any applicable registration
or other requirements in any such jurisdiction, or pursuant to an
exemption available thereunder, or assume any responsibility for
facilitating any such distribution or offering. In particular, no
action has been taken by the Issuer or the Dealers which is
intended to permit a public offering of any Notes or distribution
of this Prospectus in any jurisdiction where action for that
purpose is required. Accordingly, no Notes may be offered or sold,
directly or indirectly, and neither this Prospectus nor any
advertisement or other offering material may be distributed or
published in any jurisdiction, except under circumstances that will
result in compliance with any applicable laws and regulations.
Persons into whose possession this Prospectus or any Notes may come
must inform themselves about, and observe, any such restrictions on
the distribution of this Prospectus and the offering and sale of
Notes. In particular, there are restrictions on the distribution of
this Prospectus and the offer or sale of Notes in the United
States, the European Economic Area (including the United Kingdom
and Denmark) and Japan, see "Subscription and Sale".
The Notes may not be a suitable investment for all investors.
Each potential investor in the Notes must determine the suitability
of that investment in light of its own circumstances. In
particular, each potential investor should:
(i) have sufficient knowledge and experience to make a
meaningful evaluation of the Notes, the merits and risks of
investing in the Notes and the information contained or
incorporated by reference in this Prospectus or any applicable
supplement;
(ii) have access to, and knowledge of, appropriate analytical
tools to evaluate, in the context of its particular financial
situation, an investment in the Notes and the impact the Notes will
have on its overall investment portfolio;
(iii) have sufficient financial resources and liquidity to bear
all of the risks of an investment in the Notes, including where the
currency for principal or interest payments is different from the
potential investor's currency;
(iv) understand thoroughly the terms of the Notes and be
familiar with the behaviour of any financial markets; and
(v) be able to evaluate (either alone or with the help of a
financial adviser) possible scenarios for economic, interest rate
and other factors that may affect its investment and its ability to
bear the applicable risks.
If the Final Terms in respect of any Notes includes a legend
entitled "Prohibition of Sales to EEA Retail Investors", the Notes
are not intended 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 ("MiFID II"); (ii) a customer within the
meaning of Directive 2016/97/EU ("IDD"), where that customer would
not qualify as a professional client as defined in point (10) of
Article 4(1) of MiFID II; or (iii) not a qualified investor as
defined in Directive 2003/71/EC (as amended, the "Prospectus
Directive"). Consequently, no key information document required by
Regulation (EU) No 1286/2014 (the "PRIIPs Regulation") for offering
or selling the Notes or otherwise making them available to retail
investors in the EEA has been prepared and therefore offering or
selling the Notes or otherwise making them available to any retail
investor in the EEA may be unlawful under the PRIIPs
Regulation.
The Final Terms in respect of any Notes may 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 EU Delegated Directive 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
Arrangers nor the Dealers nor any of their respective affiliates
will be a manufacturer for the purpose of the MIFID Product
Governance Rules.
Some Notes are complex financial instruments. Sophisticated
institutional investors generally do not purchase complex financial
instruments as stand--alone investments. They purchase complex
financial instruments as a way to reduce risk or enhance yield with
an understood, measured, appropriate addition of risk to their
overall portfolios. A potential investor should not invest in Notes
which are complex financial instruments unless it has the expertise
(either alone or with a financial adviser) to evaluate how the
Notes will perform under changing conditions, the resulting effects
on the value of the Notes and the impact this investment will have
on the potential investor's overall investment portfolio.
The investment activities of certain investors are subject to
legal investment laws and regulations, or review or regulation by
certain authorities. Each potential investor should consult its
legal advisers to determine whether and to what extent (1) Notes
are legal investments for it, (2) Notes can be used as collateral
for various types of borrowing and (3) other restrictions apply to
its purchase or pledge of any Notes. Financial institutions should
consult their legal advisors or the appropriate regulators to
determine the appropriate treatment of Notes under any applicable
risk--based capital or similar rules.
All references in this document to "U.S. dollars", "U.S.$" and
"$" refer to United States dollars and to "Danish Kroner" and "DKK"
as relevant refer to Danish Kroner. In addition, all references to
"Sterling" and "GBP" refer to pounds sterling and to "euro" and
"EUR" refer to the currency introduced at the start of the third
stage of European economic and monetary union pursuant to the
Treaty on the Functioning of the European Union, as amended.
Further, all references to "Norwegian Kroner" and "NOK" refer to
Norwegian Kroner and "Swedish Kroner" and "SEK" refer to Swedish
Kroner.
In connection with the issue of any Tranche of Notes, the Dealer
or Dealers (if any) acting named as the Stabilising Manager(s) (or
persons acting on behalf of any Stabilising Manager(s)) in the
applicable Final Terms may over--allot Notes or effect transactions
with a view to supporting the market price of the Notes at a level
higher than that which might otherwise prevail. However,
stabilisation may not necessarily occur. Any stabilisation action
may begin on or after the date on which adequate public disclosure
of the terms of the offer of the relevant Tranche of Notes is made
and, if begun, may cease at any time, but it must end no later than
the earlier of 30 days after the issue date of the relevant Tranche
of Notes and 60 days after the date of the allotment of the
relevant Tranche of Notes. Any stabilisation action or
over--allotment must be conducted by the relevant Stabilising
Manager(s) (or persons acting on behalf of any Stabilising
Manager(s)) in accordance with all applicable laws and rules.
BENCHMARKS REGULATION
Interest and/or other amounts payable under the Notes may be
calculated by reference to certain benchmarks.
Details of the administrators of such benchmarks, including
details of whether or not, as at the date of this Base Prospectus,
each such administrator's name appears on the ESMA Benchmarks
Register, are set out below.
Benchmark Administrator Administrator appears
on ESMA Benchmarks
Register?
EURIBOR (Euro interbank European Money Markets No.
offered rate) Institute As far as the Issuer
is aware, the transitional
provisions in Article
51 of the Benchmarks
Regulation apply,
such that the European
Money Markets Institute
is not currently
required to obtain
authorisation/registration
(or, if located outside
the European Union,
recognition, endorsement
or equivalence.
LIBOR (London interbank ICE Benchmark Administration No.
offered rate) Limited As far as the Issuer
is aware, the transitional
provisions in Article
51 of the Benchmarks
Regulation apply,
such that ICE Benchmark
Administration Limited
is not currently
required to obtain
authorisation/registration
(or, if located outside
the European Union,
recognition, endorsement
or equivalence.
CIBOR (Copenhagen Danish Bankers' Association No.
interbank offered As far as the Issuer
rate) is aware, the transitional
provisions in Article
51 of the Benchmarks
Regulation apply,
such that the Danish
Bankers' Association
is not currently
required to obtain
authorisation/registration
(or, if located outside
the European Union,
recognition, endorsement
or equivalence.
NIBOR (Norwegian Norske Finansielle No.
interbank offered Referanser As far as the Issuer
rate) is aware, the transitional
provisions in Article
51 of the Benchmarks
Regulation apply,
such that Norske
Finansielle Referanser
is not currently
required to obtain
authorisation/registration
(or, if located outside
the European Union,
recognition, endorsement
or equivalence.
STIBOR (Stockholm Swedish Bankers' No.
interbank offered Association As far as the Issuer
rate) is aware, the transitional
provisions in Article
51 of the Benchmarks
Regulation apply,
such that the Swedish
Bankers' Association
is not currently
required to obtain
authorisation/registration
(or, if located outside
the European Union,
recognition, endorsement
or equivalence.
CONTENTS
Page
Overview of the Programme
Risk Factors
Documents Incorporated by Reference
Form of the Notes
Form of Final Terms
Terms and Conditions of the Notes
Use of Proceeds
Description of the Issuer
Taxation
Subscription and Sale
General Information
Index of Defined Terms
Overview of the Programme
The following overview does not purport to be complete and is taken from, and is qualified
in its entirety by, the remainder of this Prospectus and, in relation to the terms and conditions
of any particular Tranche of Notes, the relevant Final Terms.
This Overview constitutes a general description of the Programme for the purposes of Article
22.5(3) of Commission Regulation (EC) No 809/2004 implementing the Prospectus Directive.
Words and expressions defined in "Form of the Notes" and "Terms and Conditions of the Notes"
shall have the same meanings in this Overview.
Issuer: Ringkjøbing Landbobank Aktieselskab
Risk Factors: There are certain factors that may affect the Issuer's
ability to fulfil its obligations under
Notes issued under the Programme. These are set out
under "Risk Factors" below and include
credit risk arising primarily from direct lending
activities, interest rate risk arising from
changes in interest rates, share risk arising from
investment of assets in shares, foreign--exchange
risk arising from changes in exchange rates, liquidity
risk arising from cash fund availability,
property risk arising from a decline in the value of the
Issuer's portfolio of domicile and
investment properties, operational risk such as
inadequate or failed internal processes and
other risks such as maintaining minimum capital
requirements. In addition, there are certain
factors which are material for the purpose of assessing
the market risks associated with Notes
issued under the Programme. These are set out under
"Risk Factors" and include certain risks
relating to the structure of particular Series of Notes
and certain market risks.
Description: Euro Medium Term Note Programme
Arranger: Nordea Bank Abp
Dealers: Danske Bank A/S
Landesbank Baden-Württemberg
Nordea Bank Abp
Nykredit Bank A/S
Skandinaviska Enskilda Banken AB (publ)
and any other Dealers appointed in accordance with the
Programme Agreement.
Certain Restrictions: Each issue of Notes denominated in a currency in respect
of which particular laws, guidelines,
regulations, restrictions or reporting requirements
apply will only be issued in circumstances
which comply with such laws, guidelines, regulations,
restrictions or reporting requirements
from time to time (see "Subscription and Sale")
including the following restrictions applicable
at the date of this Prospectus.
Notes having a maturity of less than one year
Notes having a maturity of less than one year will, if
the proceeds of the issue are accepted
in the United Kingdom, constitute deposits for the
purposes of the prohibition on accepting
deposits contained in section 19 of the Financial
Services and Markets Act 2000 unless they
are issued to a limited class of professional investors
and have a denomination of at least
GBP100,000 or its equivalent, see "Subscription and
Sale".
Issuing and Principal Paying Agent (Bearer Notes): BNP Paribas Securities Services, Luxembourg Branch
Programme Size: Up to EUR2,000,000,000 (or its equivalent in other
currencies calculated as described in the
Programme Agreement) outstanding at any time. The Issuer
may increase the amount of the Programme
in accordance with the terms of the Programme Agreement.
Distribution: Notes may be distributed by way of private or public
placement and in each case on a syndicated
or non--syndicated basis.
Currencies: Notes may be denominated in euro, Sterling, U.S.
dollars, yen and subject to any applicable
legal or regulatory restrictions, any other currency
agreed between the Issuer and the relevant
Dealer.
Redenomination: The applicable Final Terms may provide that certain
Notes may be redenominated in euro. The
relevant provisions applicable to any such
redenomination are contained in Condition 4
(Redenomination).
Maturities: The Notes will have such maturities as may be agreed
between the Issuer and the relevant Dealer,
subject to such minimum or maximum maturities as may be
allowed or required from time to time
by the relevant central bank (or equivalent body) or any
laws or regulations applicable to
the Issuer or the relevant Specified Currency.
Issue Price: Notes may be issued on a fully--paid basis and at an
issue price which is at par or at a discount
to, or premium over, par.
Form of Notes: The Notes may be issued in bearer or, in the case of VP
Systems Notes, in uncertificated and
dematerialised book entry form, as more fully described
in "Form of the Notes".
Fixed Rate Notes: Fixed interest will be payable on such date or dates as
may be agreed between the Issuer and
the relevant Dealer and on redemption and will be
calculated on the basis of such Day Count
Fraction as may be agreed between the Issuer and the
relevant Dealer.
Floating Rate Notes: 1. Floating Rate Notes will bear interest at a rate
determined:
2. on the same basis as the floating rate under a
notional interest rate swap transaction
in the relevant Specified Currency governed by an
agreement incorporating the 2006 ISDA Definitions
(as published by the International Swaps and Derivatives
Association, Inc., and as amended
and updated as at the Issue Date of the first Tranche of
the Notes of the relevant Series);
or
3. by reference to LIBOR, CIBOR, EURIBOR, STIBOR or
NIBOR as adjusted for any applicable margin.
Interest periods will be specified in the relevant Final
Terms.
The margin (if any) relating to such floating rate will
be agreed between the Issuer and the
relevant Dealer for each Series of Floating Rate Notes.
Other provisions in relation to Floating Rate Notes: Floating Rate Notes may also have a maximum interest
rate, a minimum interest rate or both.
Interest on Floating Rate Notes in respect of each
Interest Period, will be payable on such
Interest Payment Dates, and will be calculated on the
basis of such Day Count Fraction, as
specified in the relevant Final Terms.
Reset Notes: The rate of interest in respect of Reset Notes will
change on the relevant Reset Dates. The
revised rate of interest may be either a Fixed Rate or a
Floating Rate for the relevant Reset
Period.
Zero Coupon Notes: Zero Coupon Notes will be offered and sold at a discount
to their nominal amount and will
not bear interest.
Redemption: The applicable Final Terms will indicate either that the
relevant Notes cannot be redeemed
prior to their stated maturity (other than in specified
instalments, if applicable, or for
taxation reasons or following an Event of Default) or
that such Notes will be redeemable at
the option of the Issuer and/or the Noteholders upon
giving notice to the Noteholders or the
Issuer, as the case may be, on a date or dates specified
prior to such stated maturity and
at a price or prices and on such other terms as may be
agreed between the Issuer and the relevant
Dealer.
The applicable Final Terms may provide that Notes may be
redeemable in two or more instalments
of such amounts and on such dates as are indicated in
the applicable Final Terms.
Notes having a maturity of less than one year may be
subject to restrictions on their denomination
and distribution, see "Certain Restrictions - Notes
having a maturity of less than one year"
above.
Redemption upon the occurrence of a MREL Subject to the provisions of Condition 7.13 (Conditions
Disqualification Event: to redemption, purchase, substitution
or variation of Non-Preferred Senior Notes prior to
Maturity Date), if MREL Disqualification
Event Redemption Option is specified as being applicable
in the applicable Final Terms, early
redemption of the Non-Preferred Senior Notes in whole
(but not in part) is permitted upon
the occurrence of a MREL Disqualification Event as
described in Condition 7.4 (Redemption
upon the occurrence of a MREL Disqualification Event).
Denomination of Notes: The Notes will be issued in such denominations as may be
agreed between the Issuer and the
relevant Dealer, subject to a minimum denomination of
EUR100,000 (or its equivalent in other
currencies). Furthermore, the minimum denomination of
each Note will be such amount as may
be allowed or required from time to time by the relevant
central bank (or equivalent body)
or any laws or regulations applicable to the relevant
Specified Currency, see "Certain Restrictions
- Notes having a maturity of less than one year" above.
Substitution and variation of Non-Preferred Senior In the case of Non-Preferred Senior Notes and if the
Notes: MREL Disqualification Event Substitution/Variation
Option is specified as applicable in the applicable
Final Terms, subject to the provisions
of Condition 7.13 (Conditions to redemption, purchase,
substitution or variation of Non-Preferred
Senior Notes prior to Maturity Date), (i) if a MREL
Disqualification Event has occurred and
is continuing or (ii) in order to ensure the
effectiveness and enforceability of Condition
19.1 (Agreement and Acknowledgment), the Issuer may
substitute all (but not some only) of
the Notes or vary the terms of all (but not some only)
of the Notes, without any requirement
for the consent or approval of the Noteholders, so that
they become or remain Qualifying Non-Preferred
Senior Notes, as described in Condition 7.12
(Substitution and variation of Non-Preferred
Senior Notes).
Taxation: All payments in respect of the Notes will be made
without deduction for or on account of withholding
taxes imposed by any Tax Jurisdiction as provided in
Condition 8 (Taxation). In the event
that any such deduction is made, the Issuer will, save
in certain limited circumstances provided
in Condition 8 (Taxation), be required to pay additional
amounts to cover the amounts so deducted.
Negative Pledge: The terms of the Preferred Senior Notes will contain a
negative pledge provision as further
described in Condition 3 (Negative Pledge).
Cross Default: The terms of the Notes will contain a cross default
provision as further described in Condition
10 (Events of Default).
Status of the Preferred Senior Notes: The Preferred Senior Notes will constitute direct,
unconditional, unsubordinated and (subject
to the provisions of Condition 3 (Negative Pledge))
unsecured obligations of the Issuer and
will rank pari passu among themselves and (save for
certain obligations required to be preferred
by law) equally with all other unsecured obligations
(other than subordinated obligations,
if any) of the Issuer, from time to time outstanding.
Status of Non-Preferred Senior Notes The Non-Preferred Senior Notes will constitute direct
and unsecured obligations as described
in Condition 2.2 (Status of the Non-Preferred Senior
Notes).
Status of Subordinated Notes: The Subordinated Notes will be subordinated as described
in Condition 2.3 (Status of the Subordinated
Notes).
Clearing Systems: Euroclear and Clearstream, Luxembourg and/or VP and/or
such other clearing system(s) as may
be specified in the relevant Final Terms.
Rating: Where a certain Series of Notes is rated, such rating
will be specified in the applicable
Final Terms.
Listing, approval and admission to trading: Application has been made to the UK Listing Authority
for Notes issued under the Programme
to be admitted to the Official List and to the London
Stock Exchange for such Notes to be
admitted to trading on the London Stock Exchange's
regulated market.
Applications may be made to list VP Systems Notes on
Nasdaq Copenhagen. Any such applications
will be in accordance with applicable laws and
regulations governing the listing of VP Systems
Notes on Nasdaq Copenhagen from time to time.
Governing Law: The Notes and any non--contractual obligations arising
out of or in connection with them will
be governed by, and construed in accordance with,
English law, except Conditions 1.2, 2.1
(Status of the Preferred Senior Notes), 2.2 (Status of
the Non-Preferred Senior Notes), 2.3
(Status of the Subordinated Notes), 2.4 (No right of
set-off or counterclaim), 7.2.2 (Early
redemption for regulatory reclassification reasons), 7.4
(Redemption upon the occurrence of
a MREL Disqualification Event), 10.2 (Events of Default
relating to Non-Preferred Senior Notes
and Subordinated Notes) and 19 (Recognition of the
Danish Bail-In Power), the registration
and dematerialisation of VP Notes in the VP which are
governed by, and shall be construed
in accordance with, the laws of the Kingdom of Denmark.
VP Systems Notes must comply with the relevant
regulations of the VP and the holders of VP
Systems Notes will be entitled to the rights and are
subject to the obligations and liabilities
which arise under the relevant Danish or Luxembourg
regulations and legislation.
Selling Restrictions: There are restrictions on the offer, sale and transfer
of the Notes in the United States,
the European Economic Area (including the United Kingdom
and Denmark) and Japan and such other
restrictions as may be required in connection with the
offering and sale of a particular Tranche
of Notes, see "Subscription and Sale".
United States Selling Restrictions: Regulation S, Category 2. TEFRA C or D/TEFRA not
applicable, as specified in the applicable
Final Terms.
Risk Factors
The Issuer believes that the following factors may affect its
ability to fulfil its obligations under Notes issued under the
Programme. All of these factors are contingencies which may or may
not occur and the Issuer is not in a position to express a view on
the likelihood of any such contingency occurring.
In addition, factors which are material for the purpose of
assessing the market risks associated with Notes issued under the
Programme are also described below.
The Issuer believes that the factors described below represent
the principal risks inherent in investing in Notes issued under the
Programme, but the inability of the Issuer to pay interest,
principal or other amounts on or in connection with any Notes may
occur for other reasons which may not be considered significant
risks by the Issuer based on information currently available to it
or which it may not currently be able to anticipate. Prospective
investors should also read the detailed information set out
elsewhere in this Prospectus and reach their own views prior to
making any investment decision.
Factors that may affect the Issuer's ability to fulfil its
obligations under Notes issued under the Programme
The Issuer is regulated by the Danish Financial Supervisory
Authority (the "DFSA") which ensures a regulatory environment
comparable to the regulatory environments of other Western European
banks.
In the course of its business activities the Issuer is exposed
to a variety of risks.
The Issuer's general policy with respect to assumption of risks
is that the Issuer only assumes the risks, which are in accordance
with the business principles under which the Issuer is operated,
and which the Issuer possesses the competencies to manage. For an
outline of how the Issuer manages risk please see "Description of
the Issuer - Risks and risk management" which also is referred to
in relation to the risk factors set out in this section.
Credit risk
Credit risk is defined as the risk that payments owed to the
Issuer are judged not to be collectable because of certain
customers' lack of ability or will to pay at the agreed time.
The Issuer generally assumes risks on the basis of a credit
policy, the specified aim of which is that there must be a
well-balanced relationship between risks assumed and the return
achieved by the Issuer, that the Issuer's losses must be at an
acceptable level relative to the Danish financial sector, and
finally that losses must be able to be accommodated within the
Issuer's results, even in extreme situations.
The Issuer has a relatively large exposure to financing of
renewable energy but considers this to be a low risk exposure. The
exposure can be characterised as first priority financing of
various renewable energy plants placed primarily in Denmark and
Germany, whereas the owners of Danish renewable energy plants
receive a subsidy for a certain energy production and where the
owners of wind turbines and solar plants erected in Germany receive
the proceeds from a fixed price electricity payment scheme.
The Issuer is exposed to the agricultural sector in Denmark and
may suffer losses that may be material in amount in relation to
this sector. During recent years, the agricultural sector has
experienced difficult conditions. In 2017 the majority of the
Issuers pig and dairy producers realised satisfactory results given
the realised prices in 2017 to the producers. However, in 2018 the
farmers have been experiencing a drought which will have an impact
of the results of the farmers in 2018, but also is expected to
impact the results of the farmer in 2019 due to uncertainty about
the development in grain prices, because the grain shall be used as
feed, and due to general uncertainty about the development of the
prices of both milk and pork. Besides this, the sector is still
characterised by a high debt burden. Although the Issuer has built
up loss reserves relating to loans to the agricultural sector,
there can be no assurance that the Issuer will not suffer more
losses.
The Issuer also has exposure to the real estate sector, which
generally falls within the following two categories:
(i) Loans with first mortgages on real property and construction
financing without prior creditors. For the former loans, sizes for
such mortgage loans are calculated on the basis of actual cash flow
of the properties with allowances, inter alia, for maintenance,
vacancies and administration.
(ii) Other forms of real estate financing, including loans with
a second mortgage on real property and a strong lessee with an
irrevocable lease and with scheduled repayment within the expiry of
lease agreements. For the latter loans, sizes for such financing
are calculated in the basis of cash flow analysis of the properties
and a detailed examination of the financial status of the lessee
and the investors.
The Issuer considers the real property portfolio to be well
positioned against down turns in the real estate sector. However,
an increased down turn in the real estate sector or an increase of
the interest rate may affect the Issuer negatively.
The Issuer has set up a number of principles and procedures to
manage the external and internal risks, which it is exposed to.
However, notwithstanding the principles and procedures that the
Issuer has put in place, there can be no assurance that the Issuer
will not suffer losses from credit risk in the future that may be
material in amount.
Liquidity risk
Liquidity risk refers to the ability of the Issuer to ensure the
availability of appropriate cash funds to meet its payments
obligations, stemming from mismatches between the maturities of
assets and liabilities, and the liquidity risk arises in the
general funding of the Issuer's activities and in the management of
its operations.
It is the objective of the Issuer with respect to liquidity
management, not to have any uncovered net funding requirements and
not to be dependent on the short-term money market.
It is also an objective that the budgeted liquidity meets the
current LCR requirement for a period of at least 12 months and to
maintain sufficient liquidity for a stress scenario by means of
recovery plans for a period of at least 12 months.
However, there can be no assurance that the Issuer will not
suffer losses from liquidity risks in the future that may be
material in amount.
During recent years, the Issuer has reduced its market funding
and replaced this by deposits. As of 31 December 2017, the value of
deposits and other debt were almost equivalent to the value of
loans and other receivables of the Issuer. After the merger
described in the section "Description of the Issuer", the value of
the deposits and other debt excluding pooled schemes now exceeds
the value of loans and other receivables, thereby resulting in a
significant reduction in the dependence on market funding, but the
Issuer will still use this type of funding source whenever valued
to be suitable. However, because the Issuer receives a significant
portion of its funding from deposits, the Issuer is subject to the
risk that depositors could withdraw their funds at a rate faster
than the rate at which borrowers repay their loans, thus causing a
strain upon the Issuer's liquidity.
A dislocated credit environment compounds the risk that the
Issuer, in such a situation, will not be able to access funds at
favourable rates. These and other factors could also lead creditors
to form a negative view of the Issuer's liquidity, which could
result in less favourable credit ratings, higher borrowing costs
and less accessible funds.
An inability on the Issuer's part to access funds, or to access
the markets from which it raises funds, may put the Issuer's
position in relation to its liquid assets at risk and lead it to
its inability to finance its operations adequately.
Operational risk
The operational risk is defined as the risk of direct or
indirect financial losses because of faults in internal processes
and systems, human errors or external events.
There can be no assurance that the Issuer will not suffer losses
from operational risks in the future that may be material in
amount.
Market risks
Market risk is defined as the risk that the market value of the
Issuer's assets and liabilities will change because of changes in
market conditions. The Issuer's basic policy with respect to market
risks is that the Issuer wishes to keep such risks at a moderate to
a relatively low level depending on the risk type which is
reflected in the risk management system as described in the
business description.
The Issuer's total market risk is comprised of interest rate
risk, foreign exchange risk, share risk and property risk.
Interest rate risk etc.
Interest rate risk is defined as the risk of loss arising from
changes in interest rates. Interest rate risk arises both in
interest-bearing claims and liabilities as well as in
derivatives.
Despite systems in place there can be no assurance that the
Issuer will not suffer losses from interest rate risk in the future
that may be material in amount.
In relation to corporate bonds, their market value can vary over
time in connection with general changes in credit spreads in the
market, and company-specific circumstances can also affect the
value of such bonds.
Share risk
The Issuer invests some of its assets in shares, which are
generally subject to greater risks and volatility than bonds. There
can be no assurance that the Issuer will not suffer losses from
share risks in the future that may be material in amount.
Foreign-exchange risk
Exchange rate changes could negatively impact the Issuer. There
can be no assurance that the Issuer will not suffer losses from
foreign-exchange risks in the future that may be material in
amount.
Property risk
A decline in the value of the Issuer's portfolio of domicile and
investment properties could negatively impact the Issuer. There can
be no assurance that the Issuer will not suffer losses from
property risks in the future that may be material in amount.
Regulatory capital risk
The Issuer is subject to supervision by the DFSA, which provides
for minimum levels of regulatory capital, which are comparable with
that of other banks in Western Europe. If the Issuer were to fail
to maintain its ratios, this may result in administrative actions
or sanctions against it which may impact the Issuer's ability to
fulfil its obligations under the Notes.
In December 2010, the Basel Committee on Banking Supervision
finalised its proposed new capital adequacy and liquidity
requirements ("Basel III"), including increases to the minimum
Common Equity Tier 1 capital requirement and the total Tier 1
capital requirement, the adoption of a capital conservation buffer
and a countercyclical buffer, and the adoption of ratios relating
to leverage, liquidity coverage and net stable funding.
The final versions of the Regulation of the European Parliament
and of the Council on prudential requirements for credit
institutions and investment firms (the "CRD IV Regulation") and the
Directive of the European Parliament and of the Council on
prudential requirements for credit institutions and investment
firms (the "CRD IV Directive") adopted in June 2013 entered into
force on 1 January 2014, with Danish implementation as of 31 March
2014. The framework implements among other things Basel III in the
EU. Each of the CRD IV Regulation and the CRD IV Directive covers a
wide range of prudent requirements for banks across EU member
states, including capital requirements, stricter and aligned
definitions of capital, risk exposure, leverage ratio, large
exposure framework and liquidity and funding requirements. The CRD
IV Directive covers the overall supervisory framework for banks
(including the individual risk assessment) and other measures such
as the combined capital buffer requirement, governance and
remuneration requirements.
The CRD IV Directive has been implemented in the Danish
Financial Business Act, Consolidated Act no. 1140 of 26 September
2017 as amended from time to time (the "Danish Financial Business
Act"), whereas the CRD IV Regulation applies directly without
implementation in national law. The phase-in of the capital
requirements will follow the path set out in the CRD IV Regulation
and the CRD IV Directive, the latter by implementation through the
Danish Financial Business Act. The European Banking Authority will
continue to publish detailed rules through binding technical
standards for many areas including, inter alia, liquidity
requirements and certain aspects of capital requirements.
Under the CRD IV Directive, credit institutions are required to
hold a minimum amount of regulatory capital equal to 8 per cent. of
Risk Exposure Amounts (of which at least 4.5 per cent. must be
Common Equity Tier 1 capital, and at least 6 per cent. must be Tier
1 capital). In addition to these so-called minimum own funds Pillar
1 requirements (the "minimum own funds requirement"), the CRD IV
Directive (including, but not limited to, Article 128) also
introduces capital buffer requirements, which must be met with
Common Equity Tier 1 capital. For the Issuer, the capital buffer
requirement is comprised of two elements (referred to collectively
as the "combined buffer"): (i) the capital conservation buffer and
(ii) the institution-specific countercyclical buffer. The
countercyclical buffer is calculated as a weighted average of the
countercyclical buffer rates that apply in the jurisdiction where
the credit institution's credit exposures are located. In 2017, the
countercyclical buffer rate for Danish credit exposure was set at 0
% by the Danish Minister for Industry, Business and Financial
Affairs. The countercyclical buffer rate for the first quarter of
2018 has been set at 0.5 % with effect from 31 March 2019, thus
giving credit institutions 12 months to meet the capital
requirement. The Systemic Risk Council has recommended to the
Minister for Industry, Business and Financial Affairs that the
countercyclical buffer rate in Denmark shall be increased by
another 0.5% with effect from 30 September 2019.
In addition to the minimum own funds requirements described
above, the CRD IV Directive (including, but not limited to, Article
104(1)(a)) contemplates that competent authorities may require
additional "Pillar 2" capital to be maintained by a credit
institution relating to elements of risks which are not fully
captured by the minimum own funds requirements (the "additional own
funds requirements") or to address macro-prudential
requirements.
The European Banking Authority published guidelines on 19
December 2014 addressed to national supervisors on common
procedures and methodologies for the supervisory review and
evaluation process ("SREP") which contained guidelines proposing a
common approach to determining the amount and composition of
additional own funds requirements and which became effective by 1
January 2016. Under these guidelines, national supervisors should
set a composition requirement for the additional own funds
requirements to cover certain risks, of at least 56 per cent.
Common Equity Tier 1 capital and at least 75 per cent. Tier 1
capital. The guidelines also contemplate that national supervisors
should not set additional own funds requirements in respect of
risks which are already covered by capital buffer requirements
and/or additional macro-prudential requirements. The SREP was
implemented in Denmark with effect as of 1 January 2016 by
Executive Order no. 1587 of 3 December 2015 on Capital to Fulfil
the Individual Solvency Requirement of Credit Institutions.
Therefore, Danish Institutions are required to meet their
additional own funds requirement with at least 56 per cent. Common
Equity Tier 1 capital and at least 75 per cent. Tier 1 capital. The
remaining 25 per cent. of the additional own funds requirement may
be
fulfilled with Common Equity Tier 1 capital, Additional Tier 1
capital or Tier 2 capital. Additional Tier 1 capital instruments or
Tier 2 capital instruments issued prior to 31 December 2015 that
until 31 December 2015 were eligible to cover institutions'
additional own funds requirements will be grandfathered until 31
December 2021.
On 23 November 2016 the European Commission, among others,
proposed a reform of the CRD IV Regulation and the CRD IV Directive
(together the "CRD IV Amendment Proposal"). The CRD IV Amendment
Proposal introduces, among other things, a leverage ratio
requirement of 3 per cent. Common Equity Tier 1 capital, harmonised
binding requirement for stable funding (the Net Stable Funding
Ratio or NSFR), strengthening of the conditions for use of internal
models and changes to the relevant regulator's application of the
institution specific Pillar 2 capital addons (referred to above as
the additional own funds requirement). At the date of this
Prospectus, these proposals are in draft form and are still subject
to the EU legislative process and national implementation, as
applicable. Therefore, it is still uncertain whether and if so, to
what extent, the CRD IV Amendment Proposal will impose additional
capital and/or liquidity requirements on the Issuer, which in turn
may affect the Issuer's capacity to make payments on the Notes.
On 2 July 2014, Directive 2014/59/EU providing for the
establishment of an EU-wide framework for the recovery and
resolution of credit institutions and investment firms (the "BRRD")
entered into force. Among other powers, BRRD provides measures for
bail-in of debt, which may impose existing and future issues of
debt to a risk of conversion into equity and/or write down of
principal amount and interest (see "The Recovery and Resolution
Directive" below).
On 7 December 2017, the Basel Committee announced a new
regulatory framework (commonly referred to as Basel IV) containing
a number of changes to and restrictions for credit institutions
using internal models.
The Basel IV framework includes a number of different
requirements. The Issuer believes that the most important component
for it is the introduction of a so-called capital floor requirement
for credit institutions applying internal ratings-based risk
models. The capital floor requirement entails that a credit
institution will be subject to a minimum capital requirement across
risk types (credit, market and operational risk) of 72.5 per cent.
of the capital requirement calculated according to the standardised
approach. According to the Basel IV framework, a minimum capital
requirement of 50 per cent. will apply to the Issuer as early as
2022 and will gradually increase until fully implemented in 2027.
The recommendations are expected to have a limited impact on the
Issuer's capital.
Any failure by the Issuer to satisfy the regulatory capital
requirements, liquidity requirements and other requirements applied
to the Issuer, and any further increases in such requirements,
could result in regulatory intervention or sanctions or significant
reputation harm, which may have material adverse effect on the
Issuer's financial condition, results of operation and
prospects.
Additional risk factors
The risk factors mentioned above are managed and controlled by
the Issuer's systems and procedures. In addition the Issuer is
directly or indirectly exposed to a number of other risks which
directly or indirectly may affect the ability of the Issuer to
fulfil its obligations. These risks include:
Downturn in economy
The Issuer's business activities are dependent on the level of
banking, finance and financial services required by its customers.
In particular, levels of borrowing are dependent on customer
confidence, employment trends, the state of the economy, the
housing market and market interest rates at the time. As the Issuer
currently conducts almost all of its business in Denmark, its
performance is influenced by the level and cyclical nature of
business activity in Denmark, which is in turn affected by both
domestic and international economic and political events.
Notwithstanding that the Issuer believes it is well positioned to
deal with a downturn in the economy, an increase in unemployment in
Denmark or a reduction in the value of housing and other collateral
provided to the Issuer would increase the losses to the Issuer and
may be in a material amount.
Exposure against the Eurozone
The Issuer's foreign-exchange exposure is, to a large extent,
hedged. However, an economic breakdown in the Eurozone is likely to
have a significant effect on the economic situation all over
Europe, and is likely to affect the Danish economy as well. The
Issuer may subsequently suffer losses in connection with such
events, which may be in a material amount.
Changed market conditions for niche products
A significant proportion of the Issuer's income is generated
from its niche areas (such as financing of renewable energy and
real estate, private banking and the financing of medical
practitioners' purchase of private practices) and a change or
downturn in market conditions might affect these niche areas and
accordingly may have a material effect on the financial condition
of the Issuer.
Impact of regulatory changes
The Issuer is subject to financial services laws, regulations,
administrative actions and policies in Denmark and (to the extent
applicable) the European Union. Changes in supervision and
regulation could materially affect the Issuer's business, the
products and services offered or the value of its assets. Although
the Issuer monitors the situation, future changes in regulation,
fiscal or other policies can be unpredictable and are beyond the
control of the Issuer.
Deposit guarantee schemes or resolution funds
In Denmark and other jurisdictions, deposit guarantee schemes
and similar funds ("Deposit Guarantee Schemes") have been
implemented from which compensation for deposits may become payable
to customers of financial services firms in the event a financial
services firm is unable to pay, or unlikely to pay, claims against
it. In many jurisdictions, these Deposit Guarantee Schemes are
funded, directly or indirectly, by financial services firms which
operate and/or are licensed in the relevant jurisdiction. ,""The
future target level of funds to be accumulated in Deposit Guarantee
Schemes and resolution funds across different EU countries may
exceed the minimum levels provided for in the BRRD in Directive
2014/49/EU ("Revised Deposit Guarantee Schemes Directive") and in
EU Regulation No 806/2014 and EU Regulation No 81/2015 of the
European Parliament and of the Council establishing uniform rules
and a uniform procedure for the resolution of credit institutions
and certain investment firms in the framework of a Single
Resolution Mechanism and a Single Resolution Fund (the latter of
which will be relevant should Denmark choose to participate in the
Single Resolution Mechanism). Both the BRRD and the Revised Deposit
Guarantee Schemes Directive has been implemented into Danish
legislation.
Through participation in the Deposit Guarantee Schemes, Danish
banks, such as the Issuer undertake to cover losses incurred on
covered deposits held with distressed banks. The funds accumulated
by the Danish Deposit Guarantee Scheme must amount to at least 0.8
per cent. of the covered deposits of Danish banks. In addition, the
Issuer contributes to the Danish resolution fund established as the
Danish resolution financing arrangement under the BRRD, which
fund's capital must amount to 1.0 per cent. of the covered deposits
of Danish banks by 31 December 2024.
It is still unclear whether Denmark, despite being outside the
Eurozone, will join the European Banking Union and therefore be
part of the Single Resolution Mechanism. It therefore remains
unclear which costs the Issuer will incur in the coming years in
relation to payments to Deposit Guarantee Schemes and/or resolution
funds on a national or European level.
Factors which are material for the purpose of assessing the
market risks associated with Notes issued under the Programme
Risks related to the structure of a particular issue of
Notes
A wide range of Notes may be issued under the Programme. A
number of these Notes may have features which contain particular
risks for potential investors. Set out below is a description of
the most common such features and the principal risks attached
thereto:
Notes subject to optional redemption by the Issuer
An optional redemption feature of Notes is likely to limit their
market value. During any period when the Issuer may elect to redeem
Notes, the market value of those Notes generally will not rise
substantially above the price at which they can be redeemed. This
also may be true prior to any redemption period.
The Issuer may be expected to redeem Notes when its cost of
borrowing is lower than the interest rate on the Notes. At those
times, an investor generally would not be able to reinvest the
redemption proceeds at an effective interest rate as high as the
interest rate on the Notes being redeemed and may only be able to
do so at a significantly lower rate. Potential investors should
consider reinvestment risk in light of other investments available
at that time.
Automatic amortisation of Subordinated Notes
Subject to the CRD IV Regulation, the nominal amount of the
Subordinated Notes which may qualify as Tier 2 capital (Da.
"supplerende kapital") within the meaning of the CRD IV regulation
(the "Tier 2 Capital") when determining the Issuer's total capital
will, during the final five years of maturity of the Subordinated
Notes, be decreased day by day until the nominal value reaches
zero.
Inverse Floating Rate Notes
Inverse Floating Rate Notes have an interest rate equal to a
fixed rate minus a rate based upon a reference rate such as LIBOR.
The market values of those Notes typically are more volatile than
market values of other conventional floating rate debt securities
based on the same reference rate (and with otherwise comparable
terms). Inverse Floating Rate Notes are more volatile because an
increase in the reference rate not only decreases the interest rate
of the Notes, but may also reflect an increase in prevailing
interest rates, which further adversely affects the market value of
these Notes.
Fixed/Floating Rate Notes
Fixed/Floating Rate Notes may bear interest at a rate that
converts from a fixed rate to a floating rate, or from a floating
rate to a fixed rate. Where the Issuer has the right to effect such
a conversion, this will affect the secondary market and the market
value of the Notes since the Issuer may be expected to convert the
rate when it is likely to produce a lower overall cost of
borrowing. If the Issuer converts from a fixed rate to a floating
rate in such circumstances, the spread on the Fixed/Floating Rate
Notes may be less favourable than then prevailing spreads on
comparable Floating Rate Notes tied to the same reference rate. In
addition, the new floating rate at any time may be lower than the
rates on other Notes. If the Issuer converts from a floating rate
to a fixed rate in such circumstances, the fixed rate may be lower
than then prevailing rates on its Notes.
In addition, a holder of securities with an interest rate that
will be periodically reset during the term of the relevant
securities, such as Notes to which the reset provisions apply, is
also exposed to the risk of fluctuating interest rate levels and
uncertain interest income.
Notes issued at a substantial discount or premium
The market values of securities issued at a substantial discount
or premium from their principal amount tend to fluctuate more in
relation to general changes in interest rates than do prices for
conventional interest-bearing securities. Generally, the longer the
remaining term of the securities, the greater the price volatility
as compared to conventional interest-bearing securities with
comparable maturities.
The Non-Preferred Senior Notes rank junior to the Issuer's other
unsubordinated creditors
The Issuer may issue Non-Preferred Senior Notes. The
Non-Preferred Senior Notes constitute direct and unsecured
obligations of the Issuer and will rank as described in Condition
2.2 (Status of the Non-Preferred Senior Notes).
The Non-Preferred Senior Notes will constitute Non-Preferred
Senior Obligations of the Issuer. Non-Preferred Senior Obligations
are obligations under certain unsubordinated and unsecured
liabilities of a regulated entity which may rank below other
unsubordinated and unsecured liabilities with higher priority
ranking upon the insolvency of such regulated entity.
The Non-Preferred Senior Notes will rank junior to present or
future claims of (a) depositors of the Issuer, (b) unsubordinated
creditors of the Issuer pursuant to section 97 of the Danish
Bankruptcy Act and (c) any other unsubordinated creditors of the
Issuer that are not creditors in respect of Non-Preferred Senior
Obligations, in each case as regards the right to receive periodic
payments on a liquidation or bankruptcy of the Issuer and the right
to receive repayment of capital on a liquidation or bankruptcy of
the Issuer.
The Issuer may issue other obligations or instruments that rank
or are expressed to rank senior to the Non-Preferred Senior Notes
(including Preferred Senior Notes) or pari passu with the
Non-Preferred Senior Notes, in each case as regards the right to
receive periodic payments on a liquidation or bankruptcy of the
Issuer and the right to receive repayment of capital on a
liquidation or bankruptcy of the Issuer. In the event of a
liquidation or bankruptcy of the Issuer, the Issuer will be
required to pay its depositors and other unsubordinated creditors
of the Issuer that are not creditors in respect of Non-Preferred
Senior Obligations of the Issuer in full before it can make any
payments on the Non-Preferred Senior Notes. If this occurs, the
Issuer may not have enough assets remaining after these payments
are made to pay amounts due under the Non-Preferred Senior Notes.
In addition, in the event of a liquidation or bankruptcy of the
Issuer, to the extent the Issuer has assets remaining after paying
its creditors who rank senior to the Non-Preferred Senior Notes,
payments relating to other obligations or instruments of the Issuer
that rank or are expressed to rank pari passu with the
Non-Preferred Senior Notes may, if there are insufficient assets to
satisfy the claims of all of the Issuer's pari passu creditors,
further reduce the assets available to pay amounts due under the
Non-Preferred Senior Notes on a liquidation or bankruptcy of the
Issuer.
The Issuer's obligations under Subordinated Notes are
subordinated
The Issuer may issue Subordinated Notes which will constitute
direct, unconditional, unsecured and subordinated obligations of
the Issuer and will rank as described in Condition 2.3 (Status of
the Subordinated Notes).
The Issuer may issue other obligations or instruments that rank
or are expressed to rank senior to the Subordinated Notes
(including Preferred Senior Notes and Non-Preferred Senior Notes)
or pari passu with the Subordinated Notes, in each case as regards
the rights to receive periodic payments on a liquidation or
bankruptcy of the Issuer and the right to receive repayment of
capital on a liquidation or bankruptcy of the Issuer.
In the event of a liquidation or bankruptcy of the Issuer, the
Issuer will be required to pay (i) its depositors, (ii) its other
unsubordinated creditors and (iii) its subordinated creditors
(other than the present or future claims of creditors that rank or
are expressed to rank pari passu with or junior to the Subordinated
Notes) in full before it can make any payments on the Subordinated
Notes. If this occurs, the Issuer may not have enough assets
remaining after these payments are made to pay amounts due under
the Subordinated Notes. In addition, in the event of a liquidation
or bankruptcy of the Issuer, to the extent the Issuer has assets
remaining after paying its creditors who rank senior to the
Subordinated Notes, payments relating to other obligations or
capital instruments of the Issuer that rank or are expressed to
rank pari passu with the Subordinated Notes may, if there are
insufficient assets to satisfy the claims of all of the Issuer's
pari passu creditors, further reduce the assets available to pay
amounts due under the Subordinated Notes on a liquidation or
bankruptcy of the Issuer.
Although Subordinated Notes may pay a higher rate of interest
than comparable Notes which are not subordinated, there is a real
risk that an investor in Subordinated Notes will lose all or some
of its investment should the Issuer become insolvent.
Set-Off
Subject as provided in the "Terms and Conditions of the Notes"
section below and as a general principle of Danish law, in respect
of Non-Preferred Senior Notes and Subordinated Notes, no
Noteholder, who shall in the event of the liquidation or bankruptcy
of the Issuer be indebted to the Issuer, shall be entitled to
exercise any right of set-off or counterclaim against moneys owed
by the Issuer in respect of the Non-Preferred Senior Notes or the
Subordinated Notes held by such Noteholder.
Limitation on gross-up obligation under the Non-Preferred Senior
Notes and the Subordinated Notes
The Issuer's obligation to pay additional amounts in respect of
any withholding or deduction in respect of taxes under the terms of
the Non-Preferred Senior Notes and the Subordinated Notes applies
only to payments of interest due and paid under the Non-Preferred
Senior Notes and the Subordinated Notes and not to payments of
principal. As such, the Issuer would not be required to pay any
additional amounts under the terms of the Non-Preferred Senior
Notes and the Subordinated Notes to the extent any withholding or
deduction applied to payments of principal. Accordingly, if any
such withholding or deduction were to apply to any payments of
principal under the Non-Preferred Senior Notes or the Subordinated
Notes, as the case may be, holders of Non-Preferred Senior Notes or
Subordinated Notes, as the case may be, may receive less than the
full amount due under the Non-Preferred Senior Notes and the
Subordinated Notes, and the market value of the Non-Preferred
Senior Notes and the Subordinated Notes may be adversely affected.
Holders of Non-Preferred Senior Notes and Subordinated Notes should
note that principal for these purposes may include any payments of
premium.
Redemption of the Subordinated Notes by the Issuer
Under the CRD IV Regulation the Subordinated Notes may generally
not be redeemed during the first five years after the Subordinated
Notes have been issued. The Issuer may, subject to a DFSA consent,
redeem the Subordinated Notes five years after issuance if the
option is so specified in the applicable Final Terms and the
requirements listed under Condition 7 (Redemption and Purchase) in
the Terms and Conditions are complied with.
In addition, during the first five years after the Subordinated
Notes have been issued (and at any time thereafter), the Issuer may
at its option but subject to DFSA consent, at any time redeem all,
but not some, of the Subordinated Notes at their outstanding
principal amounts together with accrued interest for tax reasons as
described in Condition 7.2.1 (Early redemption for tax reasons) of
the Terms and Conditions or in case of a regulatory
reclassification as described in Condition 7.2.2 (Early redemption
for regulatory reclassification reasons) of the Terms and
Conditions. See "Notes subject to optional redemption by the
Issuer".
There are limited events of defaults in relation to
Non-Preferred Senior Notes and Subordinated Notes
Payment of principal and accrued interest on the Non-Preferred
Senior Notes and the Subordinated Notes may only be accelerated in
the event of a bankruptcy or liquidation of the Issuer. There is no
separate right of acceleration in the case of non-payment of
principal or interest on the Non-Preferred Senior Notes or the
Subordinated Notes or of the Issuer's failure to perform any of its
obligations under or in respect of the Non-Preferred Senior Notes
or the Subordinated Notes.
The remedy against the Issuer available for the recovery of
amounts owing in respect of a failure to make payment of any
principal or any interest in respect of the Subordinated Notes
within three Banking Days of the relevant due date, is to institute
proceedings against the Issuer (other than filing a petition for
bankruptcy) provided that the Issuer shall not by virtue of the
institution of any such proceedings be obliged to pay any sum or
sums sooner than the same would otherwise have been payable, except
in the case of a bankruptcy or liquidation in the circumstances set
out in Condition 10.2 (Events of Default relating to Non-Preferred
Senior Notes and Subordinated Notes).
In addition, if the Issuer cannot meet its obligations regarding
subordinated loan capital, such as the Subordinated Notes, the
Issuer will not be considered insolvent under Danish law.
Substitution and variation of Non-Preferred Senior Notes without
Noteholder consent
If the MREL Disqualification Event Substitution/Variation Option
is specified as being applicable in the applicable Final Terms,
subject to Condition 7.13 (Conditions to redemption, purchase,
substitution or variation of Non-Preferred Senior Notes prior to
Maturity Date), if a MREL Disqualification Event has occurred and
is continuing, the Issuer may substitute all (but not some only) of
the Non-Preferred Senior Notes or vary the terms of all (but not
some only) of the Non-Preferred Senior Notes, without the
requirement for the consent or approval of the holders of the
Non-Preferred Senior Notes, so that they become or remain
Qualifying Non-Preferred Senior Notes.
Qualifying Non-Preferred Senior Notes are securities issued or
guaranteed by the Issuer that have, inter alia, terms which (i)
adhere to the specific conditions outlined in the definition of
"Qualifying Non-Preferred Senior Notes" in Condition 7.15
(Definitions) and (ii) other than in respect to the effectiveness
and enforceability of Condition 19.1 (Agreement and
Acknowledgement), are not materially less favourable to the holders
of the Non-Preferred Senior Notes than the terms of the
Non-Preferred Senior Notes (provided that the Issuer shall have
delivered a certificate to that effect signed by two of its
directors to (in the case of Notes other than VP Notes) the
Principal Paying Agent or (in the case of VP Notes) the VP Issuing
Agent (where the VP Agent is not the Issuer). There can be no
assurance that, due to the particular circumstances of each holder,
any Qualifying Non-Preferred Senior Notes will be as favourable to
each holder in all respects or that, if it were entitled to do so,
a particular holder would make the same determination as the Issuer
as to whether the terms of the relevant Qualifying Non-Preferred
Senior Notes are not materially less favourable to holders than the
terms of the Notes.
The qualification of the Non-Preferred Senior Notes as "eligible
liabilities" is subject to uncertainty
The Non-Preferred Senior Notes are intended to be "eligible
liabilities" (or any equivalent or successor term) (MREL Eligible
Liabilities) which are available to meet any MREL Requirement
(however called or defined by then Applicable MREL Regulations) of
the Issuer. However, there is uncertainty regarding the final
substance of the Applicable MREL Regulations and how those
regulations, once enacted, are to be interpreted and applied and
the Issuer cannot provide any assurance that such Notes will be (or
thereafter remain) MREL Eligible Liabilities.
If, for any reason, the Non-Preferred Senior Notes are or will
be excluded from the MREL Eligible Liabilities as a result of:
(i) the implementation of any Applicable MREL Regulations on or
after the date of issue of the last Tranche of such Series; or
(ii) a change in any Applicable MREL Regulations becoming
effective on or after the date of issue of the last Tranche of such
Series,
then, if the MREL Disqualification Event Substitution/Variation
Option and/or the MREL Disqualification Event Redemption Option
is/are specified as being applicable in the applicable Final Terms,
a MREL Disqualification Event may occur.
Risks related to Notes generally
Set out below is a brief description of the principal risks
relating to the Notes generally:
Modification
The conditions of the Notes contain provisions for calling
meetings of Noteholders to consider matters affecting their
interests generally. These provisions permit defined majorities to
bind all Noteholders including Noteholders who did not attend and
vote at the relevant meeting and Noteholders who voted in a manner
contrary to the majority.
The Recovery and Resolution Directive
The BRRD is designed to provide authorities with a credible set
of tools to intervene sufficiently early and quickly in an unsound
or failing credit institutions or investment firms (each an
"institution") so as to ensure the continuity of the institution's
critical financial and economic functions, whilst minimising the
impact of an institution's failure on the economy and financial
system.
The BRRD was to be implemented by Member States by 1 January
2015, with the exception of the general bail-in tool (see below)
which was to apply from 1 January 2016. The BRRD, including the
general bail-in tool and MREL (as defined below) has been
implemented into Danish law with effect as of 1 June 2015 by the
Danish Recovery and Resolution Act, Consolidated Act no. 333 of 31
March 2015 (the "Danish Recovery and Resolution Act") and by
amendments to the Danish Financial Business Act. The general
bail-in tool also entered into force in Denmark on 1 June 2015.
The BRRD contains four resolution tools and powers, which may be
used alone or in combination, where the relevant resolution
authority considers that (a) an institution is failing or likely to
fail, (b) there is no reasonable prospect that any alternative
private sector measures would prevent the failure of such
institution within a reasonable timeframe, and (c) a resolution
action is in the public interest. The resolution tools and powers
are: (i) sale of business - which enables resolution authorities to
direct the sale of the institution or the whole or part of its
business on commercial terms; (ii) bridge institution - which
enables resolution authorities to transfer all or part of the
business of the institution to a "bridge institution" (an entity
created for this purpose that is wholly or partially in public
control); (iii) asset separation - which enables resolution
authorities to transfer impaired or problem assets to one or more
publicly owned asset management vehicles to allow them to be
managed with a view to maximising their value through eventual sale
or orderly wind-down (this can be used together with another
resolution tool only); and (iv) bail-in - which gives resolution
authorities the power to write down certain debt claims of
unsecured creditors of a failing institution (which may include
holders of Notes, whether unsubordinated or subordinated including,
the Power to cancel all or a portion of the principal amount of, or
interest on such unsecured debt claims) and/or to convert such
unsecured debt claims (including the Notes) to equity (the "general
bail-in tool"), which equity could also be subject to any future
application of the general bail-in tool. The BRRD also grants
powers to enable the relevant resolution authority to implement the
resolution tools, including the power to replace or substitute the
relevant financial institution as obligor in respect of debt
instruments, the power to modify the terms of debt instruments
(including altering the maturity and/or the amount of interest
payable and/or imposing a temporary suspension on payments), and/or
the power to discontinue the listing and admission to trading of
financial instruments, all of which could be applied in respect of
the Notes.
As a last resort, the BRRD also allows for a Member State, after
having assessed and utilised the above resolution tools to the
maximum extent possible whilst maintaining financial stability, to
be able to provide extraordinary public financial support through
additional financial stabilisation tools. These consist of the
public equity support and temporary public ownership tools. Any
such extraordinary financial support must be provided in accordance
with the EU state aid framework.
An institution will be considered as failing or likely to fail
when either: (i) it is, or is likely in the near future to be, in
breach of its requirements for continuing authorisation; its assets
are, or are likely in the near future to be, less than its
liabilities; (ii) it is, or is likely in the near future to be,
unable to pay its debts as they fall due; or (iii) it requires
extraordinary public financial support (except in limited
circumstances).
In addition to the general bail-in tool, the BRRD provides
resolution authorities with the further power to permanently
write-down or convert into equity capital instruments (such as the
Subordinated Notes) at the point of non-viability and before any
other resolution action is taken ("non-viability loss absorption").
Any shares issued to holders of the Subordinated Notes upon any
such conversion into equity may also be subject to any application
of the general bail-in tool.
For the purposes of the application of any non-viability loss
absorption measure, the point of non-viability under the BRRD is
the point at which the relevant authority determines that the
institution meets the conditions for resolution (but no resolution
action has yet been taken) or that the institution will no longer
be viable unless the relevant capital instruments (such as the
Subordinated Notes) are written-down or converted or extraordinary
public support is to be provided and without such support the
appropriate authority determines that the institution would no
longer be viable.
To the extent any resulting treatment of Noteholders pursuant to
the exercise of the general bail-in tool is less favourable than it
would have been the case under the hierarchy in normal insolvency
proceedings, such Noteholder has a right to compensation under the
BRRD based on an independent valuation of the institution (which is
referred to as the "no creditor worse off" principle under the
BRRD). Under the Danish implementation of the BRRD, the "no
creditor worse off" principle also applies to the exercise of the
non-viability loss absorption in respect of capital instruments
(such as the Subordinated Notes). However, any such compensation is
unlikely to compensate that holder for the losses it has actually
incurred and there is likely to be a considerable delay in the
recovery of such compensation. Compensation payments (if any) are
also likely to be made considerably later than when amounts may
otherwise have been due under any Notes that have been subject to
the application of the general bail-in tool or non-viability loss
absorption.
With the implementation in Denmark of the BRRD, Danish banks,
including the Issuer, are required to have bail in-able resources
in order to fulfil the Minimum Requirement for own funds and
Eligible Liabilities ("MREL"). There is no minimum European
Union-wide level of MREL, as each resolution authority is required
to make a separate determination of the appropriate MREL
requirement for each resolution group within its jurisdiction,
depending on the resolvability, risk profile, systemic importance
and other characteristics of each institution. In Denmark, each
covered entity's MREL requirement will follow from the entity's
individual resolution plan and it is the Danish Financial
Supervisory Authority after consultation with Finansiel Stabilitet,
which sets the MREL requirement for each relevant entity. On 30
October 2017, the DFSA published its final guidelines regarding
main principles for the MREL requirement for small and medium-sized
Danish banks, such as the Issuer. The guidelines are based on
discussions with the Danish banking industry following a discussion
paper, which the DFSA had published in January 2017. Aside from the
solvency need and capital buffers, the MREL requirement will
consist of a loss absorption add-on and a recapitalisation amount.
The sum of the loss absorption add-on and a recapitalisation amount
is referred to as the MREL add-on. The MREL add-on will be in the
interval of 3.5-6 per cent and phased in over a five-year period.
As a consequence of the guidelines, small and medium-sized banks
will be subject to a subordination requirement for their senior
debt to qualify as MREL eligible liabilities. In addition to the
DFSA's guidelines on the MREL requirement for small and
medium-sized Danish banks, the DFSA has published its reaction
pattern following a breach of MREL. It is emphasised in the
reaction pattern that the DFSA's priority for distressed banks is a
private solution, but that the DFSA will be obliged to transfer the
bank to the Resolution Authority, if such private solution cannot
be found. The DFSA will always undertake a case by case-decision
where a bank is in breach of its MREL requirement. If an
institution does not fulfil the MREL requirement, the relevant
authority may withdraw its banking licence. Also, a comparable
concept for loss absorption, the Financial Stability Board's Total
Loss Absorbing Capacity ("TLAC") for global systemically important
banks, is under discussion internationally, and these discussions
and their outcome could influence the implementation of MREL.
The Issuer has received a preliminary statement from the DFSA
calculated on the basis of figures from the Issuer's 2016-annual
report, which overall gives a capital requirement of 17.9%
inclusive fully phased-in MREL add-ons. Later in 2018 the DFSA will
announce final MREL add-ons to be valid from 1 January 2019 on the
basis of the 2017 annual report. With a balance sheet exceeding EUR
3 billion, the Issuer can opt to fully implement the requirement as
early as 1 January 2019. The Issuer will then have the possibility
of grandfathering contractual senior funding when assessing the
Minimum Requirement for own funds and Eligible Liabilities. The
Issuer has chosen to take advantage of this option. The 17.9 %
capital requirement includes a fully phased-in capital conservation
buffer of 2.5 %.The Issuer expects to receive a final and updated
statement from the DFSA, which will take the merger into account.
The timing hereof is however at present unknown.
The powers set out in BRRD and the Danish Recovery and
Resolution Act will impact how credit institutions and investment
firms are managed, as well as, in certain circumstances, the rights
of creditors. The Noteholders may be subject to write-down or
conversion into equity on any application of the general bail-in
tool and/or non-viability loss absorption, which may result in such
holders losing some or all of their investment. The exercise of any
power under the Danish Recovery and Resolution Act or any
suggestion of such exercise could, therefore, materially adversely
affect the rights of Noteholders, the price or value of their
investment in the Notes and/or the ability of the Issuer to satisfy
its obligations under the Notes.
On 23 November 2016, the European Commission, together with the
CRD IV Amendment Proposal, proposed a reform of the BRRD by way of
two proposals (together, the "BRRD Amendment Proposal"). The BRRD
Amendment Proposal includes, among other things, the introduction
of a higher MREL requirement to take the form of MREL guidance and
that any shortfall in complying with the MREL requirement will
automatically be filled up with Common Equity Tier 1 Capital. At
the date of this Prospectus, these proposals are in draft form and
are still subject to the EU legislative process and national
implementation, as applicable. Therefore, it is still uncertain
whether and if so, to what extent, the proposed amendments will
impose additional requirements on the Issuer, which in turn may
affect the Issuer's capacity to make payments of interest on the
Notes.
Depositor Preference
As part of the reforms required by the BRRD, amendments have
been made to relevant legislation in Denmark to establish a
preference in the insolvency hierarchy for certain deposits that
are eligible for protection by the Danish deposit guarantee scheme
and the uninsured element of such deposits and, in certain
circumstances, deposits made in non-EEA branches of EEA credit
institutions. In addition, the Danish implementation of the Revised
Deposit Guarantee Scheme increased the nature and quantum of
insured deposits to cover a wide range of deposits, including
corporate deposits (unless the depositor is a public sector body or
financial institution) and some temporary high value deposits. The
effect of these changes is to increase the size of the class of
preferred creditors. All such preferred deposits will rank in the
insolvency hierarchy ahead of all other unsecured senior creditors
of the Issuer, including the holders of the Notes. Furthermore,
insured deposits are excluded from the scope of the general bail-in
tool. As a result, if the general bail-in tool were exercised by
the relevant resolution authority, the Notes would be more likely
to be bailed-in than certain other unsubordinated liabilities of
the Issuer such as other preferred deposits.
FATCA
Whilst the Notes are in global form and held within Euroclear
Bank S.A./N.V. and Clearstream Banking S.A. (together, the
"ICSDs"), in all but the most remote circumstances, it is not
expected that FATCA will affect the amount of any payment received
by the ICSDs (see Taxation - FATCA). However, FATCA may affect
payments made to custodians or intermediaries in the subsequent
payment chain leading to the ultimate investor if any such
custodian or intermediary generally is unable to receive payments
free of FATCA withholding. It also may affect payment to any
ultimate investor that is a financial institution that is not
entitled to receive payments free of withholding under FATCA, or an
ultimate investor that fails to provide its broker (or other
custodian or intermediary from which it receives payment) with any
information, forms, other documentation or consents that may be
necessary for the payments to be made free of FATCA withholding.
Investors should choose the custodians or intermediaries with care
(to ensure each is compliant with FATCA or other laws or agreements
related to FATCA), provide each custodian or intermediary with any
information, forms, other documentation or consents that may be
necessary for such custodian or intermediary to make a payment free
of FATCA withholding. Investors should consult their own tax
adviser to obtain a more detailed explanation of FATCA and how
FATCA may affect them. The Issuer's obligations under the
securities are discharged once it has paid the common depositary or
common safekeeper for the ICSDs (as bearer holder of the
securities) and the Issuer has therefore no responsibility for any
amount thereafter transmitted through hands of the ICSDs and
custodians or intermediaries.
Change of law
The conditions of the Notes are based on English law, Danish law
or Luxembourg law (as described in Condition 18.1 (Governing law)),
in each case in effect as at the date of this Prospectus. No
assurance can be given as to the impact of any possible judicial
decision or change to English law, Danish law or Luxembourg law or
administrative practice after the date of this Prospectus.
Bearer Notes where denominations involve integral multiples:
definitive Notes
In relation to any issue of Bearer Notes which have
denominations consisting of a minimum Specified Denomination plus
one or more higher integral multiples of another smaller amount, it
is possible that such Notes may be traded in amounts that are not
integral multiples of such minimum Specified Denomination. In such
a case a holder who, as a result of trading such amounts, holds an
amount which is less than the minimum Specified Denomination in his
account with the relevant clearing system at the relevant time may
not receive a definitive Bearer Note in respect of such holding
(should definitive Bearer Notes be printed) and would need to
purchase a principal amount of Bearer Notes such that its holding
amounts to a Specified Denomination.
If definitive Bearer Notes are issued, holders should be aware
that definitive Bearer Notes which have a denomination that is not
an integral multiple of the minimum Specified Denomination may be
illiquid and difficult to trade.
Form of VP Systems Notes
VP Systems Notes issued under the Programme will not be
evidenced by any physical note or document of title other than
statements of account made by the VP (in the case of VP Notes).
Ownership of VP Systems Notes will be recorded, and transfer
effected, only through the book entry system and register
maintained by the VP (in the case of VP Notes).
Because the VP Systems Notes are dematerialised securities,
investors will have to rely on the relevant clearing systems'
procedures for transfer, payment and communication with the Issuer.
Any closure or operational difficulties in the VP (in the case of
VP Notes) would therefore impact on such transfer, payment or
communication.
Risks related to the market generally
Set out below is a brief description of the principal market
risks, including liquidity risk, exchange rate risk, interest rate
risk and credit risk:
The regulation and reform of "benchmarks" may adversely affect
the value of Notes linked to or referencing such "benchmarks"
Interest rates and indices which are deemed to be "benchmarks"
(such as, in the case of Floating Rate Notes, a Reference Rate
etc.), are the subject of recent national and international
regulatory guidance and proposals for reform. Some of these reforms
are already effective whilst others are still to be implemented.
These reforms may cause such benchmarks to perform differently than
in the past, to disappear entirely, or have other consequences
which cannot be predicted. Any such consequence could have a
material adverse effect on any Notes linked to or referencing such
a "benchmark". The Benchmarks Regulation was published in the
Official Journal of the European Union on 29 June 2016 and has
applied since 1 January 2018. 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 European Union. It,
among other things, (i) requires benchmark administrators to be
authorised or registered (or, if non-European Union based, to be
subject to an equivalent regime or otherwise recognised or
endorsed) and (ii) prevents certain uses by European Union
supervised entities (such as the Issuer) of "benchmarks" of
administrators that are not authorised or registered (or, if
non-European Union based, not deemed equivalent or recognised or
endorsed).
The Benchmarks Regulation could have a material impact on any
Notes linked to or referencing a "benchmark", in particular, if the
methodology or other terms of the "benchmark" are changed in order
to comply with the requirements of the Benchmarks Regulation. Such
changes could, among other things, have the effect of reducing,
increasing or otherwise affecting the volatility of the published
rate or level of the "benchmark".
More broadly, any of the national or international reforms, or
the general increased regulatory scrutiny of "benchmarks", could
increase the costs and risks of administering or otherwise
participating in the setting of a "benchmark" and complying with
any such regulations or requirements. Such factors may have the
following effects on certain "benchmarks": (i) discourage market
participants from continuing to administer or contribute to the
"benchmark"; (ii) trigger changes in the rules or methodologies
used in the "benchmark" or (iii) lead to the disappearance of the
"benchmark". Any of the above changes or any other consequential
changes as a result of national or international reforms or other
initiatives or investigations, could have a material adverse effect
on the value of and return on any Notes linked to or referencing a
"benchmark".
Investors should consult their own independent advisers and make
their own assessment about the potential risks imposed by the
Benchmarks Regulation reforms in making any investment decision
with respect to any Notes linked to or referencing a
"benchmark".
Future discontinuance of certain benchmark rates may adversely
affect the value of Floating Rate Notes which are linked to or
which reference any benchmark rate
On 27 July 2017, the Chief Executive of the United Kingdom
Financial Conduct Authority, which regulates LIBOR, announced that
it does not intend to continue to persuade, or use its powers to
compel, panel banks to submit rates for the calculation of LIBOR to
the administrator of LIBOR after 2021. The announcement indicates
that the continuation of LIBOR on the current basis is not
guaranteed after 2021. It is not possible to predict whether, and
to what extent, panel banks will continue to provide LIBOR
submissions to the administrator of LIBOR going forwards. This may
cause LIBOR to perform differently than it did in the past and may
have other consequences that cannot be predicted.
Whilst the above announcement related to LIBOR, similar concerns
may be applicable to other benchmark rates (such as EURIBOR). As
regards EURIBOR, it is not possible to predict whether, and to what
extent, banks will continue to provide EURIBOR submissions to the
administrator of EURIBOR going forwards. The ECB and other European
authorities have discussed proposals for alternative benchmarks.
For example, the ECB announced plans for a new overnight rate for
interbank unsecured lending among Euro-area banks in September
2017. The impact of such an overnight rate on EURIBOR is currently
unclear.
Investors should be aware that, if a benchmark rate (such as
LIBOR or EURIBOR) were discontinued or otherwise unavailable, the
rate of interest on Floating Rate Notes which are linked to or
which reference such benchmark rate will be determined for the
relevant period by the fall-back provisions applicable to such
Notes. Depending on the manner in which the relevant benchmark rate
is to be determined under the conditions of the Notes, this may in
certain circumstances (i) be reliant upon the provision by
reference banks of offered quotations for such benchmark rate
which, depending on market circumstances, may not be available at
the relevant time or (ii) result in the effective application of a
fixed rate based on the rate which applied in the previous period
when such benchmark rate was available. Any of the foregoing could
have an adverse effect on the value or liquidity of, and return on,
any Floating Rate Notes which are linked to or which reference a
benchmark rate.
The secondary market generally
Notes may have no established trading market when issued, and
one may never develop. If a market does develop, it may not be very
liquid. Therefore, investors may not be able to sell their Notes
easily or at prices that will provide them with a yield comparable
to similar investments that have a developed secondary market. This
is particularly the case for Notes that are especially sensitive to
interest rate, currency or market risks, are designed for specific
investment objectives or strategies or have been structured to meet
the investment requirements of limited categories of investors.
These types of Notes generally would have a more limited secondary
market and more price volatility than conventional debt securities.
Illiquidity may have a severely adverse effect on the market value
of Notes.
Exchange rate risks and exchange controls
The Issuer will pay principal and interest on the Notes in the
Specified Currency. This presents certain risks relating to
currency conversions if an investor's financial activities are
denominated principally in a currency or currency unit (the
"Investor's Currency") other than the Specified Currency. These
include the risk that exchange rates may significantly change
(including changes due to devaluation of the Specified Currency or
revaluation of the Investor's Currency) and the risk that
authorities with jurisdiction over the Investor's Currency may
impose or modify exchange controls. An appreciation in the value of
the Investor's Currency relative to the Specified Currency would
decrease (1) the Investor's Currency-equivalent yield on the Notes,
(2) the Investor's Currency-equivalent value of the principal
payable on the Notes and (3) the Investor's Currency-equivalent
market value of the Notes.
Government and monetary authorities may impose (as some have
done in the past) exchange controls that could adversely affect an
applicable exchange rate. As a result, investors may receive less
interest or principal than expected, or no interest or
principal.
Interest rate risks
Investment in Fixed Rate Notes involves the risk that subsequent
changes in market interest rates may adversely affect the value of
the Fixed Rate Notes.
Credit ratings may not reflect all risks
One or more independent credit rating agencies may assign credit
ratings to the Notes. The ratings may not reflect the potential
impact of all risks related to structure, market, additional
factors discussed above, and other factors that may affect the
value of the Notes. A credit rating is not a recommendation to buy,
sell or hold securities and may be revised or withdrawn by the
rating agency at any time.
In general, European regulated investors are restricted under
Regulation (EC) No. 1060/2009 (the "CRA Regulation") from using
credit ratings for regulatory purposes, unless such ratings are
issued by a credit rating agency established in the EU and
registered under the CRA Regulation (and such registration has not
been withdrawn or suspended), subject to transitional provisions
that apply in certain circumstances whilst the registration
application is pending. Such general restriction will also apply in
the case of credit ratings issued by non-EU credit rating agencies,
unless the relevant credit ratings are endorsed by an EU-registered
credit rating agency or the relevant non-EU rating agency is
certified in accordance with the CRA Regulation (and such
endorsement action or certification, as the case may be, has not
been withdrawn or suspended). Certain information with respect to
the credit rating agencies and ratings will be disclosed in the
Final Terms.
Documents Incorporated by Reference
The following documents which have previously been published or
are published simultaneously with this Prospectus and have been
filed with the Financial Conduct Authority shall be incorporated
in, and form part of, this Prospectus:
(a) the auditor's report and audited annual financial statements
of the Issuer on pages 45 to 95 of the Annual Report for the
financial year ended 31 December 2016, and the auditor's report and
audited annual financial statements of the Issuer on pages 49 to
101 of the Annual Report for the financial year ended 31 December
2017, respectively (the "2016 Accounts" and the "2017 Accounts"
respectively);
(b) the auditor's report and audited annual financial statements
of Nordjyske Bank A/S on pages 44 to 96 of the Annual Report for
the financial year ended 31 December 2016, and the auditor's report
and audited annual financial statements of Nordjyske Bank A/S on
pages 48 to 96 of the Annual Report for the financial year ended 31
December 2017;
(c) the management's review of "Old" Ringkjøbing Landbobank on
pages 9 to 13, 19 to 23, 29 to 30 and 32 to 34 of the 2017 Accounts
and the audited annual financial statements of "Old" Ringkjøbing
Landbobank on pages 61, 94 and 100 to 101 of the 2017 Accounts;
(d) the unaudited interim financial statements of the Issuer on
pages 8 to 23 of the Interim Report for the six months ended 30
June 2017 and the unaudited interim financial statements of the
Issuer on pages 1 to 15, 24 and 37 of the Interim Report for the
six months ended 30 June 2018;
(e) the unaudited interim financial statements of Nordjyske Bank
A/S on pages 21 to 37 of the Interim Report for the six months
ended 30 June 2017; and
(f) the Terms and Conditions of the Notes set out on pages 51 to
86 of the Prospectus dated 29 December 2009, pages 39 to 73 of the
Prospectus dated 13 April 2011, pages 40 to 74 of the Prospectus
dated 21 February 2012, pages 24 to 55 of the Prospectus dated 2
April 2013, pages 25 to 57 of the Prospectus dated 14 March 2014,
pages 27 to 63 of the Prospectus dated 27 March 2015, pages 27 to
62 of the Prospectus dated 21 March 2016, pages 29 to 66 of the
Prospectus dated 28 March 2017 prepared by the Issuer in connection
with the Programme.
The 2016 Accounts, the 2017 Accounts, unaudited interim
financial statements and the Annual Reports for Nordjyske Bank A/S
which are incorporated by reference in this Prospectus are direct
and accurate translations of the original Danish text. To the
extent that there is any inconsistency between the English
translations and the original Danish text, the original Danish text
will prevail.
If documents which are incorporated by reference into the
Prospectus themselves incorporate any information or other
documents therein, either expressly or implicitly, such information
or other documents shall not form part of this Prospectus for the
purpose of the Prospectus Directive, except where such information
or other documents are specifically incorporated by reference into
this Prospectus.
Following the publication of this Prospectus a supplement may be
prepared by the Issuer and approved by the UK Listing Authority in
accordance with Article 16 of the Prospectus Directive. Statements
contained in any such supplement (or contained in any document
incorporated by reference therein) shall, to the extent applicable
(whether expressly, by implication or otherwise), be deemed to
modify or supersede statements contained in this Prospectus or in a
document which is incorporated by reference in this Prospectus. Any
statement so modified or superseded shall not, except as so
modified or superseded, constitute a part of this Prospectus.
Copies of documents incorporated by reference in this Prospectus
can be obtained from the registered office of the Issuer and from
the specified office of the Paying Agent and
www.landbobanken.com.
Any non--incorporated parts of a document referred to herein are
either deemed not relevant for an investor or are otherwise covered
elsewhere in this Prospectus.
The Issuer will, in the event of any significant new factor,
material mistake or inaccuracy relating to information included in
this Prospectus which is capable of affecting the assessment of any
Notes, prepare a supplement to this Prospectus or publish a new
Prospectus for use in connection with any subsequent issue of
Notes.
Form of the Notes
The Notes of each Tranche will be either Bearer Notes, with or
without interest coupons attached, or VP Systems Notes, in each
case as specified in the relevant Final Terms.
Any reference in this section "Form of the Notes" to Euroclear,
Clearstream, Luxembourg and/or the VP shall, whenever the context
so permits, be deemed to include a reference to any additional or
alternative clearing system approved by the Issuer and the Agent
and/or the VP Issuing Agent, as applicable and specified in the
applicable Final Terms.
Bearer Notes
Each Tranche of Bearer Notes will initially be issued in the
form of a temporary global note (a "Temporary Global Note") or, if
so specified in the applicable Final Terms, a permanent global note
(a "Permanent Global Note") which, in either case, will:
(i) if the Global Notes are intended to be issued in new global
note ("NGN") form, as stated in the applicable Final Terms, be
delivered on or prior to the original issue date of the Tranche to
a common safekeeper (the "Common Safekeeper") for Euroclear Bank
SA/NV ("Euroclear") and Clearstream Banking S.A. ("Clearstream,
Luxembourg"); and
(ii) if the Global Notes are not intended to be issued in NGN
Form, be delivered on or prior to the original issue date of the
Tranche to a common depositary (the "Common Depositary") for,
Euroclear and Clearstream, Luxembourg.
Whilst any Note is represented by a Temporary Global Note,
payments of principal, interest (if any) and any other amount
payable in respect of the Notes due prior to the Exchange Date (as
defined below) will be made (against presentation of the Temporary
Global Note if the Temporary Global Note is not intended to be
issued in NGN form) only to the extent that certification (in a
form to be provided) to the effect that the beneficial owners of
interests in such Note are not U.S. persons or persons who have
purchased for resale to any U.S. person, as required by U.S.
Treasury regulations, has been received by Euroclear and/or
Clearstream, Luxembourg and Euroclear and/or Clearstream,
Luxembourg, as applicable, has given a like certification (based on
the certifications it has received) to the Agent.
On and after the date (the "Exchange Date") which is 40 days
after a Temporary Global Note is issued, interests in such
Temporary Global Note will be exchangeable (free of charge) upon a
request as described therein either for (a) interests in a
Permanent Global Note of the same Series or (b) definitive Notes of
the same Series with, where applicable, receipts, interest coupons
and talons attached (as indicated in the applicable Final Terms and
subject, in the case of definitive Notes, to such notice period as
is specified in the applicable Final Terms), in each case against
certification of beneficial ownership as described above unless
such certification has already been given. The holder of a
Temporary Global Note will not be entitled to collect any payment
of interest, principal or other amount due on or after the Exchange
Date unless, upon due certification, exchange of the Temporary
Global Note for an interest in a Permanent Global Note or for
definitive Notes is improperly withheld or refused. The exchange
upon expiry of a period of notice or at any time options referred
to below should not be expressed to be applicable if the Specified
Denomination of the relevant Notes includes language substantially
to the following effect: "EUR100,000 and integral multiples of
EUR1,000 in excess thereof up to and including EUR199,000".
Furthermore, such Specified Denomination construction is not
permitted in relation to any issuance of Notes which is to be
represented on issue by a Temporary Bearer Global Notes
exchangeable for Definitive Notes.
Payments of principal, interest (if any) or any other amounts on
a Permanent Global Note will be made through Euroclear and/or
Clearstream, Luxembourg (against presentation or surrender (as the
case may be) of the Permanent Global Note if the Permanent Global
Note is not intended to be issued in NGN form) without any
requirement for certification.
The applicable Final Terms will specify that a Permanent Global
Note will be exchangeable (free of charge), in whole but not in
part, for definitive Notes with, where applicable, receipts,
interest coupons and talons attached upon either (a) upon the
occurrence of an Exchange Event or (b) at any time at the request
of the Issuer. For these purposes, "Exchange Event" means that (i)
an Event of Default (as defined in Condition 10 (Events of
Default)) has occurred and is continuing, or (ii) the Issuer has
been notified that both Euroclear and Clearstream, Luxembourg have
been closed for business for a continuous period of 15 days (other
than by reason of holiday, statutory or otherwise) or have
announced an intention permanently to cease business or have in
fact done so and no successor clearing system is available or (iii)
the Issuer has or will become subject to adverse tax consequences
which would not be suffered were the Notes represented by the
Permanent Global Note in definitive form. The Issuer will promptly
give notice to Noteholders in accordance with Condition 14
(Notices) if an Exchange Event occurs. In the event of the
occurrence of an Exchange Event, Euroclear and/or Clearstream,
Luxembourg (acting on the instructions of any holder of an interest
in such Permanent Global Note) may give notice to the Agent
requesting exchange. Any such exchange shall occur not later than
45 days after the date of receipt of the first relevant notice by
the Agent.
The following legend will appear on all Bearer Notes which have
an original maturity of more than 365 days and on all receipts and
interest coupons relating to such Bearer Notes:
"ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,
INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a)
OF THE INTERNAL REVENUE CODE."
The sections referred to provide that United States holders,
with certain exceptions, will not be entitled to deduct any loss on
Notes, receipts or interest coupons and will not be entitled to
capital gains treatment of any gain on any sale, disposition,
redemption or payment of principal in respect of such Notes,
receipts or interest coupons.
Notes which are represented by a Global Note will only be
transferable in accordance with the rules or procedures for the
time being of Euroclear or Clearstream, Luxembourg, as the case may
be.
General
Pursuant to the Agency Agreement (as defined under "Terms and
Conditions of the Notes"), the Agent shall arrange that, where a
further Tranche of Bearer Notes is issued which is intended to form
a single Series with an existing Tranche of Bearer Notes, the
Bearer Notes of such further Tranche shall be assigned a common
code and ISIN which are different from the common code and ISIN
assigned to Bearer Notes of any other Tranche of the same Series
until at least the expiry of the distribution compliance period (as
defined in Regulation S under the Securities Act) applicable to the
Bearer Notes of such Tranche.
A Note may be accelerated by the holder thereof in certain
circumstances described in and subject to Condition 10 (Events of
Default). In such circumstances, where any Bearer Note is still
represented by a Global Note and the Global Note (or any part
thereof) has become due and repayable in accordance with the Terms
and Conditions of such Notes and payment in full of the amount due
has not been made in accordance with the provisions of the Global
Note then the Global Note will become void at 8.00 p.m. (London
time) on such day. At the same time, holders of interests in such
Global Note credited to their accounts with Euroclear and/or
Clearstream, Luxembourg, as the case may be, will become entitled
to proceed directly against the Issuer on the basis of statements
of account provided by Euroclear and/or Clearstream, Luxembourg on
and subject to the terms of a deed of covenant (the "Deed of
Covenant") dated 29 October 2018 and executed by the Issuer.
VP Systems Notes
Each Tranche of VP Systems Notes will be issued in
uncertificated and dematerialised book entry form. No VP Systems
Note will be issued in global or definitive form. The holder of a
VP Systems Note will be the person evidenced as such by a book
entry in the VP system (in the case of VP Notes). Where a nominee
is so evidenced, it shall be treated as the holder of the relevant
VP Systems Note.
Ownership of the VP Systems Notes will only be recorded and
transfers effected only through the book entry system and register
maintained by the VP (in the case of VP Notes).
On the issue of such VP Systems Notes, the Issuer will send a
copy of the relevant Final Terms to the Agent and the VP Issuing
Agent. On delivery of the relevant Final Terms by the VP Issuing
Agent (in the case of VP Notes) to the VP and notification to the
VP of the subscribers and their VP account details by the relevant
Dealers.
Settlement of sale and purchase transactions in respect of VP
Systems Notes in the VP (in the case of VP Notes) will take place
in accordance with market practice at the time of the transaction.
Transfers of interests in the VP Systems Notes will take place in
accordance with the rules and procedures for the time being of the
VP (in the case of VP Notes).
Eurosystem Eligibility
The Final Terms in respect of an issue of Notes will confirm (in
paragraph 6(vii) of Part B) whether or not such Notes are to be
intended to be held in a manner which would allow Eurosystem
eligibility.
The designation "yes" simply means that the Notes are intended
upon issue to be deposited with one of the ICSDs as common
safekeeper (and may be registered in the name of a nominee of one
of the ICSDs acting as common safekeeper, in the case of registered
notes) and does not necessarily mean that the Notes will be
recognized as eligible collateral for Eurosystem monetary policy
and intra-day credit operations by the Eurosystem either upon issue
or at any or all times during their life.
Where the designation is specified as "no" at the date of the
Final Terms, then (should the Eurosystem eligibility criteria be
amended in the future such that the Notes are capable of meeting
them) the Notes may then be deposited with one of the ICSDs as
common safekeeper (and may be registered in the name of a nominee
of one of the ICSDs acting as common safekeeper, in the case of
registered notes). Note that this does not necessarily mean that
the Notes will then be recognised as eligible collateral for
Eurosystem monetary policy and intra-day credit operations by the
Eurosystem at any time during their life.
In each case, such recognition will depend upon the ECB being
satisfied that Eurosystem eligibility criteria have been met.
Form of Final Terms
Set out below is the form of Final Terms which will be completed
for each Tranche of Notes issued under the Programme.
MIFID II PRODUCT GOVERNANCE / PROFESSIONAL INVESTORS AND ECPS
ONLY TARGET MARKET - Solely for the purposes of [the/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 2014/65/EU
(as amended, "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/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/s']
target market assessment) and determining appropriate distribution
channels.
[PROHIBITION OF SALES TO EEA RETAIL INVESTORS - The Notes are
not intended, from 1 January 2018, to be offered, sold or otherwise
made available to and, with effect from such date, should not be
offered, sold or otherwise made available to any retail investor in
the European Economic Area ("EEA"). For these purposes, a retail
investor means a person who is one (or more) of: (i) a retail
client as defined in point (11) of Article 4(1) of Directive
2014/65/EU ("MiFID II")/ [MiFID II]; (ii) a customer within the
meaning of Directive 2016/97/EU ("IDD"), where that customer would
not qualify as a professional client as defined in point (10) of
Article 4(1) of MiFID II; or (iii) not a qualified investor as
defined in Directive 2003/71/EC (as amended, the "Prospectus
Directive"). Consequently no key information document required by
Regulation (EU) No 1286/2014 (the "PRIIPs Regulation") for offering
or selling the Notes or otherwise making them available to retail
investors in the EEA has been prepared and therefore offering or
selling the Notes or otherwise making them available to any retail
investor in the EEA may be unlawful under the PRIIPS
Regulation.]
[Date]
RINGKJØBING LANDBOBANK AKTIESELSKAB
Legal entity identifier (LEI):
2138002M5U5K4OUMVV62
Issue of [Aggregate Nominal Amount of Tranche] [Title of
Notes]
under the EUR2,000,000,000
Euro Medium Term Note Programme
PART A - CONTRACTUAL TERMS
Terms used herein shall be deemed to be defined as such for the
purposes of the Conditions set forth in the Prospectus dated 29
October 2018 [, as supplemented by [a] supplement[s] to the
Prospectus dated [--],] [which constitutes a base prospectus (the
"Prospectus") for the purposes of Directive 2003/71/EC (the
"Prospectus Directive")]. This document constitutes the Final Terms
of the Notes described herein [for the purposes of Article 5.4 of
the Prospectus Directive] and must be read in conjunction with such
Prospectus. Full information on the Issuer and the offer of the
Notes is only available on the basis of the combination of these
Final Terms and the Prospectus. The Prospectus is available for
viewing [on the website of the Regulatory News Service operated by
the London Stock Exchange, www.londonstockexchange.com] and at the
registered office of the Issuer and at the specified offices of the
[Agent/VP Issuing Agent] during normal business hours and copies
may be obtained from the registered office of the Issuer and the
specified offices of the [Agent/VP Issuing Agent].
[The following alternative language applies if the first tranche
of an issue which is being increased was issued under a Prospectus
with an earlier date.]
Terms used herein shall be deemed to be defined as such for the
purposes of the Conditions (the "Conditions") set forth in the
Prospectus dated [original date] which are incorporated by
reference in the Prospectus dated [current date] and are attached
hereto. This document constitutes the Final Terms of the Notes
described herein [for the purposes of Article 5.4 of Directive
2003/71/EC (the "Prospectus Directive")] and must be read in
conjunction with the Prospectus dated 29 October 2018 [, as
supplemented by [a] supplement[s] to the Prospectus dated [--],]
[which constitutes a base prospectus for the purposes of the
Prospectus Directive]. Full information on the Issuer and the offer
of the Notes is only available on the basis of the combination of
these Final Terms and the Prospectus dated 29 October 2018 [, as
supplemented by [a] supplement[s] to the Prospectus dated [--],].
Copies of such Prospectus are available for viewing [on the website
of the Regulatory News Service operated by the London Stock
Exchange,
www.londonstockexchange.com/exchange/news/market-news/market-news-home.html,]
and at the registered office of the Issuer and at the specified
offices of the [Agent/VP Issuing Agent] during normal business
hours and copies may be obtained from the registered office of the
Issuer and the specified offices of the [Agent/VP Issuing
Agent].
1. a (a) Series Number: [ ]
(b) Tranche Number: [ ]
(c) Date on which the Notes become fungible: Not Applicable/The Notes shall be consolidated,
form a single series and be interchangeable
for trading purposes with the [ ] on [[ ]/the
Issue Date/exchange of the Temporary Global
Note for interests in the Permanent Global Note,
as referred to in paragraph [ ] below [which
is expected to occur on or about [ ]]
2. Specified Currency: [ ]
3. Aggregate Nominal Amount:
(a) Series: [ ]
(b) Tranche: [ ]
4. Issue Price: [ ] per cent. of the Aggregate Nominal Amount
[plus accrued interest from [ ]]
5. (a) Specified Denominations: [ ]
(b) Calculation Amount: [ ]
6. (a) Issue Date: [ ]
(b) Interest Commencement Date: [Issue Date/Not Applicable/other]
7. Maturity Date: [ ]
8. Interest Basis: [[ ] per cent. Fixed Rate]
[[LIBOR/CIBOR/EURIBOR/NIBOR/STIBOR] +/- [ ] per
cent. Floating Rate]
[Zero Coupon]
9. Redemption/Payment Basis: Subject to any purchase and cancellation or early
redemption, the Notes will be redeemed [on
the Maturity Date at par/ in instalments on each
Instalment Date (see further item 24 below)]
10. Change of Interest Basis or Redemption/Payment [Not Applicable/[ ]]
Basis:
11. Put/Call Options: [Not Applicable]
[Investor Put]
[Issuer Call]
[MREL Disqualification Event Redemption Option]
12. (a) Status of the Notes: [Preferred Senior/ Non-Preferred Senior/
Subordinated]
(b) [Date [Board] approval for issuance of Notes [ ] [and [ ], respectively]]
obtained:
PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE
13. Fixed Rate Note Provisions [Applicable/Not Applicable]
(a) Rate[(s)] of Interest: [ ] per cent. per annum [payable
[annually/semi--annually/ quarterly/other] in
arrear]
(b) Interest Payment Date(s): [ ] in each year [adjusted for payment purposes
only in accordance with the [Floating Rate
Convention/ Following Business Day Convention/
Modified Following Business Day Convention/
Preceding Business Day Convention]/, not
adjusted]
(c) Fixed Coupon Amount(s): [ ] per Calculation Amount
(Applicable to Notes in definitive form.)
(d) Broken Amount(s): Not Applicable/[ ] per Calculation Amount,
(Applicable to Notes in definitive form.) payable on the Interest Payment Date falling
[in/on]
[ ]
(e) Day Count Fraction: [ ]
(f) [Determination Date(s): Not Applicable/[ ] in each year
14. Floating Rate Note Provisions [Applicable/Not Applicable]
(a) Specified Period(s)/Specified Interest Payment [ ]
Dates: (N.B. In the case of Reset Notes with a Floating
Rate Note in a Reset Period, indicate the
Reset Period to which the Floating Rate will
apply. Thereafter in this paragraph indicate
the Floating Rate Note provisions that will apply
to each floating rate period)
(b) Business Day Convention: [Floating Rate Convention/Following Business Day
Convention/ Modified Following Business Day
Convention/Preceding Business Day Convention]
(c) Additional Business Centre(s): [ ]
(d) Manner in which the Rate of Interest and [Screen Rate Determination/ISDA Determination]
Interest Amount is to be determined:
(e) Party responsible for calculating the Rate of [Agent/other]
Interest and Interest Amount:
(f) Screen Rate Determination:
[LIBOR/CIBOR/EURIBOR/NIBOR/STIBOR]
* Reference Rate:
[ ]
* Interest Determination Date(s):
[ ]
* Relevant Screen Page:
[ ] in the Relevant Financial Centre
* Relevant Time:
(g) ISDA Determination:
[ ]
* Floating Rate Option:
[ ]
* Designated Maturity:
[ ]
* Reset Date:
(h) Linear Interpolation Not Applicable/Applicable - the Rate of Interest
for the [long/short] [first/last] Interest
Period shall be calculated using Linear
Interpolation (specify for each short or long
interest
period)
(i) Margin(s): [+/-] [ ] per cent. per annum
(j) Minimum Rate of Interest: Not Applicable/[ ] per cent. per annum
(k) Maximum Rate of Interest: Not Applicable/[ ] per cent. per annum
(l) Day Count Fraction: [Actual/Actual (ISDA)
Actual/365 (Fixed)
Actual/365 (Sterling)
Actual/360
30/360
30E/360
30E/360 (ISDA)]
15. Reset Note Provisions: [Applicable/Not Applicable]
(i) Initial Rate of Interest: See [Fixed/Floating] Rate Note provisions above
(ii) First Reset Margin: [Plus/Minus][--] per cent. per annum
(iii) Subsequent Reset Margins: [[Plus/Minus][--] per cent. per annum/Not
Applicable]
(iv) Interest Payment Date(s): [--] in each year
(v) Fixed Coupon Amount up to (but excluding) the [[--] per Calculation Amount/Not Applicable]
First Reset Date:
(N.B. The Fixed Coupon Amount for an issue of
Subordinated Notes will not apply if the
Calculation
Amount has been adjusted or if any accrued but
unpaid amount of interest has been reduced
and/or cancelled, as applicable, as described in
the Conditions)
(vi) Broken Amount(s) up to (but excluding) the [Not Applicable/[--] per Calculation Amount
First Reset Date: payable on [--]
(Insert particulars of any initial broken
interest amounts which do not correspond with the
Fixed Coupon Amount[(s)])
(N.B. The Broken Amount for an issue of
Subordinated Notes will not apply if the
Calculation
Amount has been adjusted or if any accrued but
unpaid amount of interest has been reduced
and/or cancelled, as applicable, as described in
the Conditions)
(vii) First Reset Date: [--]
(viii) Subsequent Reset Date(s): [[--] [and [--]]/Not Applicable]
(ix) Relevant Screen Page: [--]
(x) Mid-Swap Rate: [Single Mid-Swap Rate/Mean Mid-Swap Rate]
(xi) Mid-Swap Rate Conversion: [Applicable/Not Applicable]
(If not applicable, delete the remaining
sub-paragraph of this paragraph)
[Annual/Semi-annual/Quarterly/Monthly]
* Original Mid-Swap Rate Basis:
(xii) Mid-Swap Floating Leg Maturity: [--]
(xiii) Reset Determination Date(s): [--]
(specify in relation to each Reset Date)
(xiv) Relevant Time: [--]
(xv) Day Count Fraction: [30/360]/[Actual/Actual (ICMA)]/[Actual/365
(Fixed)]
(xvi) Calculation Agent: [--]
16. Zero Coupon Note Provisions [Applicable/Not Applicable]
(a) Accrual Yield: [ ] per cent. per annum
(b) Reference Price: [ ]
PROVISIONS RELATING TO REDEMPTION
17. Issuer Call: [Applicable/Not Applicable]
(a) Optional Redemption Date(s): [ ]
(b) Optional Redemption Amount: [[ ] per Calculation Amount]
(c) If redeemable in part:
(i) Minimum Redemption Amount: [ ]
(ii) Maximum Redemption Amount: [ ]
(d) Notice period: [ ]
18. Investor Put: [Applicable/Not Applicable]
(a) Optional Redemption Date(s): [ ]
(b) Optional Redemption Amount: [[ ] per Calculation Amount]
(c) Notice period: [ ]
19. [MREL Disqualification Event Redemption Option] [Applicable/Not Applicable]
20. Final Redemption Amount: [[ ] per Calculation Amount]
21. Early Redemption Amount payable on redemption for [[ ] per Calculation Amount]
taxation reasons or on event of default
if different from the principal amount of the
Notes:
22. Early Redemption Amount (MREL Disqualification [[ ] per Calculation Amount][Not Applicable]
Event)
GENERAL PROVISIONS APPLICABLE TO THE NOTES
23. Form of Notes:
(a) Form: [Temporary Global Note exchangeable for a Permanent
Global Note which is exchangeable for
Definitive Notes only upon an Exchange Event]
[Temporary Global Note exchangeable for Definitive Notes on and after the Exchange Date]
[Permanent Global Note exchangeable for Definitive Notes [only upon an Exchange Event/at any
time at the request of the Issuer]]
[VP Systems Notes issued in uncertificated and dematerialised book entry form. See further
item 8 of Part B below]
(b) New Global Note: [Yes/No]
24. Additional Financial Centre(s) or other special [Not Applicable/[ ]]
provisions relating to Payment Days:
25. Talons for future Coupons or Receipts to be [Yes/The Talons Mature on [ ]/No]
attached to Definitive Notes (and dates on which
such Talons mature):
26. Details relating to Instalment Notes:
(a) Instalment Amount(s): [Not Applicable/[ ]]
(b) Instalment Date(s): [Not Applicable/[ ]]
27. Redenomination applicable: Redenomination [not] applicable
28. VP Notes: [Not Applicable/[ ]]
[The Issuer shall be entitled to obtain information from the register maintained by the VP
[for the purpose of the meetings of Noteholders/for the purposes of performing its obligations
under the issue of VP Notes]]
29. MREL Disqualification Event Substitution/Variation [Applicable/Not Applicable]
Option:
SIGNATURE
Signed on behalf of Ringkjøbing Landbobank Aktieselskab:
By:
Duly authorised
PART B - OTHER INFORMATION
1. LISTING and admission to trading
(i) Listing and Admission to trading Application is expected to be made by the Issuer (or
on its behalf) for the Notes to be admitted
to trading on the London Stock Exchange's regulated
market and to be listed on the Official
List of the UK Listing Authority with effect from [ ].
(ii) Estimate of total expenses related to admission [ ]
to trading:
2. RATINGS
Ratings: The Notes to be issued have not been rated/The Notes
to be issued have been rated:
Moody's Investors Service Ltd
3. INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE
[ ]
4. REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL EXPENSES
[(i) Reasons for the offer [ ]
[(ii)] Estimated net proceeds: [ ]
5. YIELD (Fixed Rate Notes only)
Indication of yield: [ ]
6. OPERATIONAL INFORMATION
(i) ISIN Code: [ ]
(ii) Common Code: [ ]
(iii) CFI Code: [ ]
(iv) FISN Code: [ ]
(v) Any clearing system(s) other than Euroclear Bank [Not Applicable/[ ]/ VP Securities A/S Denmark, VP
S.A./N.V. and Clearstream Banking S.A. identification number [ ]]
and the relevant identification number(s):
(vi) Delivery: Delivery [against/free of] payment
(vii) Names and addresses of additional Paying Agent(s) [ ]
(if any):
(viii) VP Issuing Agent: [[ ]/Not Applicable]
(ix) Intended to be held in a manner which would allow [Yes] [No]
Eurosystem eligibility:
7. DISTRIBUTION
(i) If syndicated, names of Managers: [Not Applicable/[ ]]
(ii) Date of [Subscription] Agreement: [ ]
(iii) Stabilising Manager(s): [Not Applicable/[ ]]
(iv) Delivery: Delivery [against/free of] payment
(v) If non syndicated, name of relevant Dealer: [Not Applicable/[ ]]
(vi) U.S. Selling Restrictions: [TEFRA D Rules/TEFRA C Rules/TEFRA not applicable]
(vii) Prohibition of Sales to EEA Retail Investors: [Applicable/Not Applicable]
[THIRD PARTY INFORMATION
[ ] has been extracted from [ ]. The Issuer confirms that such information has been accurately
reproduced and that, so far as it is aware and is able to ascertain from information published
by [ ], no facts have been omitted which would render the reproduced information inaccurate
or misleading.]
Terms and Conditions of the Notes
The following are the Terms and Conditions of the Notes which
will be incorporated by reference into each Global Note (as defined
below) and each definitive Note, in the latter case only if
permitted by the relevant stock exchange or other relevant
authority (if any) and agreed by the Issuer and the relevant Dealer
at the time of issue but, if not so permitted and agreed, such
definitive Note will have endorsed thereon or attached thereto such
Terms and Conditions. The following Terms and Conditions will,
whenever the context so permits, also apply to each VP Systems
Note. The applicable Final Terms (or the relevant provisions
thereof) will be endorsed upon, or attached to, each Global Note
and definitive Note and shall apply as aforesaid to VP Systems
Notes. Reference should be made to "Form of the Notes" for a
description of the content of Final Terms which will specify which
of such terms are to apply in relation to the relevant Notes.
This Note is one of a Series (as defined below) of Notes issued
by Ringkjøbing Landbobank Aktieselskab (the "Issuer") pursuant to
the Agency Agreement (as defined below) or the VP Issuing Agency
Agreement (as defined below), as applicable.
References herein to the "Notes" shall be references to the
Notes of this Series and shall mean:
(a) in relation to any Notes issued in bearer form ("Bearer
Notes") represented by a global Note (a "Global Note"), units of
each Specified Denomination in the Specified Currency;
(b) any Global Note;
(c) any definitive Bearer Notes issued in exchange for a Global Note; and
(d) Notes cleared through the Danish Securities Centre (Da. "VP
Securities A/S") ("VP Notes" or "VP System Notes" and the "VP"
respectively) which are in uncertificated book entry form in
accordance with Consolidated Act No. 12 of 8 January 2018 on
Capital Markets (the "Capital Markets Act"), as amended from time
to time, and Executive Orders issued thereunder and Executive Order
No. 1175 of 31 October 2017 on, inter alia, the registration of
fund assets in a securities centre (CSD) (Da. "Bekendtgørelse om
registrering m.v. af fondsaktiver i en værdipapircentral (CSD)")
("Danish VP Registration Order").
The Bearer Notes, the Receipts (as defined below) and the
Coupons (as defined below) have the benefit of an Amended and
Restated Agency Agreement (such Agency Agreement as further amended
and/or supplemented and/or restated from time to time, the "Agency
Agreement") dated 29 October 2018 and made between the Issuer, BNP
Paribas Securities Services, Luxembourg Branch as issuing and
principal paying agent and agent bank (the "Agent", which
expression shall include any successor agent) and the other paying
agents named therein (together with the Agent, the "Paying Agents",
which expression shall include any additional or successor paying
agents).
The Issuer will from time to time, as indicated in the Final
Terms, appoint a VP Issuing Agent (the "VP Issuing Agent", which
expression shall include any successor VP Issuing Agent) to act as
the agent of the Issuer in respect of all dealings with the VP in
respect of each Series of VP Notes. The Issuer and the VP Issuing
Agent will, in respect of each Series of VP Systems Notes, enter
into a VP Issuing Agency Agreement (the "VP Issuing Agency
Agreement"). The VP Systems Notes of the relevant Series will have
the benefit of such VP Issuing Agency Agreement and, to the extent
specified therein, the Agency Agreement.
Interest bearing definitive Bearer Notes have interest coupons
("Coupons") and, in the case of Notes which, where issued in
definitive form have more than 27 interest payment remaining,
talons for further Coupons ("Talons") attached on issue. Any
reference herein to Coupons or coupons shall, unless the context
otherwise requires, be deemed to include a reference to Talons or
talons. Definitive Notes repayable in instalments have receipts
("Receipts") for the payment of the instalments of principal (other
than the final instalment) attached on issue. Global Notes do not
have Receipts, Coupons or Talons attached on issue.
The final terms for this Note (or the relevant provisions
thereof) are set out in Part A of the Final Terms attached to or
endorsed on or, in the case of VP Systems Notes, incorporated into
this Note which complete these Terms and Conditions (the
"Conditions"). References to the "applicable Final Terms" are to
Part A of the Final Terms (or the relevant provisions thereof)
which is, in the case of Bearer Notes, attached to or endorsed on
or, in the case of VP Systems Notes, incorporated into this
Note.
Any reference to "Noteholders" or "holders" shall, in relation
to any Bearer Notes, mean the holders of the Bearer Notes and
shall, in relation to any Notes represented by a Global Note, be
construed as provided below. Any reference herein to Receiptholders
shall mean to the holders of the Receipts and any reference herein
to "Couponholders" shall mean the holders of the Coupons and shall,
unless the context otherwise requires, include the holders of the
Talons. VP Systems Notes are in uncertificated and dematerialised
book entry form and any reference in the Conditions to Receipts,
Coupons and Talons shall not apply to VP Systems Notes.
As used herein, "Tranche" means Notes which are identical in all
respects (including as to listing and admission to trading) and
"Series" means a Tranche of Notes together with any further Tranche
or Tranches of Notes which are (a) expressed to be consolidated and
form a single series and (b) identical in all respects (including
as to listing and admission to trading) except for their respective
Issue Dates, Interest Commencement Dates and/or Issue Prices.
In respect of any Bearer Notes, the Receiptholders, Noteholders
and the Couponholders are entitled to the benefit of the Deed of
Covenant (the "Deed of Covenant") dated 29 October 2018 and made by
the Issuer. The original of the Deed of Covenant is held by the
common depositary for Euroclear (as defined below) and Clearstream,
Luxembourg (as defined below).
Copies of the Agency Agreement and the Deed of Covenant are
available for inspection during normal business hours at the
specified office of each of the Paying Agents. Copies of the
applicable Final Terms (and, in the case of VP Systems Notes, the
applicable VP Issuing Agency Agreement) are available for viewing
at the registered office of the Issuer and of the Agent (in the
case of Bearer Notes) or the VP Issuing Agent (in the case of VP
Systems Notes) and copies may be obtained from those offices save
that, if this Note is neither admitted to trading on a regulated
market in the European Economic Area nor offered in the European
Economic Area in circumstances where a prospectus is required to be
published under the Prospectus Directive, the applicable Final
Terms (and, in the case of VP Systems Notes, the applicable VP
Issuing Agency Agreement) will only be obtainable by a Noteholder
holding one or more Notes and such Noteholder must produce evidence
satisfactory to the Issuer and the relevant Paying Agent (in the
case of Bearer Notes) or the VP Issuing Agent (in the case of VP
Systems Notes) as to its holding of such Notes and identity. The
Noteholders, the Receiptholders and the Couponholders are deemed to
have notice of, and are entitled to the benefit of, all the
provisions of the Agency Agreement (but, in the case of VP Systems
Notes, only to the extent specified in the VP Issuing Agency
Agreement), the Deed of Covenant (in the case of Bearer Notes), the
applicable VP Issuing Agency Agreement (in the case of VP Systems
Notes) and the applicable Final Terms which are applicable to them.
The statements in the Conditions include summaries of, and are
subject to, the detailed provisions of the Agency Agreement (and,
in the case of VP Systems Notes, the applicable VP Issuing Agency
Agreement).
Words and expressions defined in the Agency Agreement or used in
the relevant Final Terms shall have the same meanings where used in
the Conditions unless the context otherwise requires or unless
otherwise stated and provided that, in the event of inconsistency
between the Agency Agreement and the relevant Final Terms, the
relevant Final Terms will prevail.
1. FORM, DENOMINATION AND TITLE
1.1 The Notes are in bearer form or, in the case of VP Systems Notes, in uncertificated and dematerialised book entry form, as specified in the relevant Final Terms and, in the case of definitive Notes, serially numbered, in the Specified Currency and the Specified Denomination(s). Notes of one Specified Denomination may not be exchanged for Notes of another Specified Denomination.
Bearer Notes may not be exchanged for VP Systems Notes and vice
versa.
This Note may be a Fixed Rate Note, a Floating Rate Note, a Zero
Coupon Note or a combination of any of the foregoing, depending
upon the Interest Basis shown in the applicable Final Terms.
This Note may be an Instalment Note depending upon the
Redemption/Payment Basis shown in the applicable Final Terms.
This Note may also be a Preferred Senior Note, a Non-Preferred
Senior Note or a Subordinated Note as indicated in the applicable
Final Terms.
Definitive Notes are issued with Coupons attached, unless they
are Zero Coupon Notes in which case references to Coupons and
Couponholders in the Conditions are not applicable.
Subject as set out below, title to the Bearer Notes, Receipts
and Coupons will pass by delivery. The Issuer and the Paying Agents
will (except as otherwise required by law) deem and treat the
bearer of any Bearer Note, Receipt or Coupon as the absolute owner
thereof (whether or not overdue and notwithstanding any notice of
ownership or writing thereon or notice of any previous loss or
theft thereof) for all purposes but, in the case of any Global
Note, without prejudice to the provisions set out in the next
succeeding paragraph.
For so long as any of the Notes is represented by a Global Note
held on behalf of Euroclear Bank S.A./N.V. ("Euroclear") and/or
Clearstream Banking, S.A. ("Clearstream, Luxembourg"), each person
(other than Euroclear or Clearstream, Luxembourg) who is for the
time being shown in the records of Euroclear or of Clearstream,
Luxembourg as the holder of a particular nominal amount of such
Notes (in which regard any certificate or other document issued by
Euroclear or Clearstream, Luxembourg as to the nominal amount of
such Notes standing to the account of any person shall be
conclusive and binding for all purposes save in the case of
manifest error) shall be treated by the Issuer and the Paying
Agents as the holder of such nominal amount of such Notes for all
purposes other than with respect to the payment of principal or
interest on such nominal amount of such Notes, for which purpose
the bearer of the relevant Global Note shall be treated by the
Issuer and any Paying Agent as the holder of such nominal amount of
such Notes in accordance with and subject to the terms of the
relevant Global Note and the expressions "Noteholder" and "holder
of Notes" and related expressions shall be construed
accordingly.
Notes which are represented by a Global Note will be
transferable only in accordance with the rules and procedures for
the time being of Euroclear and Clearstream, Luxembourg, as the
case may be. References to Euroclear and/or Clearstream, Luxembourg
shall, whenever the context so permits, be deemed to include a
reference to any additional or alternative clearing system
specified in the applicable Final Terms.
1.2 In the case of a VP Systems Note, the person evidenced as
the holder of such VP Systems Note by a book entry in the book
entry system and register maintained by the VP (in the case of VP
Notes) shall be treated by the Issuer, the Agent, the VP Issuing
Agent and any other Paying Agent as the holder of such Notes for
all purposes and expressions "Noteholder" and "holder of Notes" and
related expressions shall be construed accordingly. Ownership of
the VP Systems Notes will be transferred by registration in the
register between the direct or nominee accountholders at the VP (in
the case of VP Notes) in accordance with the rules and procedures
of the VP (in the case of VP Notes) from time to time. Where a
nominee is so evidenced, it shall be treated by the Issuer, the
Agent, the VP Issuing Agent and any other Paying Agent as the
holder of the relevant VP Systems Note.
VP is entitled to provide the Issuer or any person authorised by
the Issuer to receive such information on its behalf, including,
but not limited to, the VP Issuing Agent with information about the
identity of a Holder of VP Systems Notes at a specified time
following a request by the Issuer or such authorised person. Such
information may include the name, address and other contact details
of the Holder of the VP Systems Notes, the date of the registration
with VP, the amount of VP Systems Notes held by such holder and any
other relevant account information
VP Systems Notes will be issued in uncertificated and
dematerialised book entry form and no global or definitive Notes
will be issued in respect thereof and the Conditions shall be
construed accordingly.
2. STATUS OF THE NOTES AND SUBORDINATION
2.1 Status of the Preferred Senior Notes
This Condition 2.1 only applies to Preferred Senior Notes.
The Preferred Senior Notes and any relative Receipts and Coupons
are direct, unconditional, unsubordinated and (subject to the
provisions of Condition 3 (Negative Pledge)) unsecured obligations
of the Issuer and rank:
(i) pari passu without any preference among themselves;
(ii) at least pari passu with all other senior unsecured
obligations (other than subordinated obligations, if any) of the
Issuer (save for certain obligations required to be preferred by
law, including obligations benefitting from preferred ranking to
the Preferred Senior Notes), from time to time outstanding; and
(iii) senior to any Non-Preferred Senior Obligations of the
Issuer as regards the right to receive periodic payments on a
liquidation or bankruptcy of the Issuer and the right to receive
repayment of capital on a liquidation or bankruptcy of the
Issuer.
2.2 Status of the Non-Preferred Senior Notes
This Condition 2.2 only applies to Non-Preferred Senior
Notes.
The Non-Preferred Senior Notes constitute Non-Preferred Senior
Obligations of the Issuer.
The Non-Preferred Senior Notes and any Receipts and/or Coupons
relating to them constitute direct and unsecured obligations of the
Issuer and rank:
(i) pari passu without any preference among themselves;
(ii) pari passu with any other obligation or instruments of the
Issuer that rank or are expressed to rank equally with the
Non-Preferred Senior Notes (including any other Non-Preferred
Senior Obligations of the Issuer), in each case as regards the
right to receive periodic payments on a liquidation or bankruptcy
of the Issuer and the right to receive repayment of capital on a
liquidation or bankruptcy of the Issuer;
(iii) senior to holders of the ordinary shares and any other
obligations or capital instruments that rank or are expressed to
rank junior to the Non-Preferred Senior Notes, or any obligations
pursuant to Section 98 of the Danish Bankruptcy Act, in each case
as regards the right to receive periodic payments on a liquidation
or bankruptcy of the Issuer and the right to receive repayment of
capital on a liquidation or bankruptcy of the Issuer; and
(iv) junior to present or future claims of (a) depositors of the
Issuer, (b) unsubordinated creditors of the Issuer pursuant to
Section 97 of the Danish Bankruptcy Act and (c) any other
unsubordinated creditors of the Issuer that are not creditors in
respect of Non-Preferred Senior Obligations of the Issuer, in each
case as regards the right to receive periodic payments on a
liquidation or bankruptcy of the Issuer and the right to receive
repayment of capital on a liquidation or bankruptcy of the
Issuer.
"Non-Preferred Senior Obligations" means obligations under
certain unsubordinated and unsecured liabilities of a regulated
entity subject to BRRD, as implemented into the Kingdom of Denmark,
which may rank below other unsubordinated and unsecured liabilities
with higher priority ranking upon the insolvency of such regulated
entity pursuant to Section 20 of Act no. 706 of 8 June 2018,
containing amendments to the Danish Act on Recovery and Resolution
of certain Financial Businesses to implement the changes to article
108 of the BRRD set out in article 1 of Directive 2399/2017/EU that
expressly provides for the possibility that, upon the insolvency of
a regulated entity issuer of debt securities, the obligations under
certain unsubordinated and unsecured liabilities (the Non-Preferred
Senior Obligations) may rank below other unsubordinated and
unsecured liabilities with higher priority ranking.
2.3 Status of the Subordinated Notes
This Condition 2.3 only applies to Subordinated Notes.
The Subordinated Notes (Da. "Supplerende
kapital/Kapitalbeviser") and any Receipts and/or Coupons relating
to them constitute direct, unconditional, unsecured and
subordinated obligations of the Issuer. The Subordinated Notes and
the Receipts and the Coupons relating to them constitute Tier 2
capital (Da. "supplerende kapital") within the meaning of the CRD
IV regulation (the "Tier 2 Capital") and rank and will rank:
(i) pari passu without any preference among themselves;
(ii) pari passu with all other present and future Tier 2 Capital of the Issuer;
(iii) senior to the share capital of the Issuer and any debt
instrument issued by the Issuer and qualifying for treatment as
Additional Tier 1 capital (Da. "hybrid kernekapital") within the
meaning of the CRD IV Regulation, in the event of a distribution of
assets in the liquidation or bankruptcy of the Issuer.
(iv) junior to present or future claims of (a) unsubordinated
creditors of the Issuer and (b) subordinated creditors of the
Issuer other than the present or future claims of creditors that
rank or are expressed to rank pari passu with or junior to the
Subordinated Notes.
2.4 No right of set-off or counterclaim
This Condition 2.4 only applies to Non-Preferred Senior Notes
and Subordinated Notes.
In accordance with Danish law, no Noteholder, who shall in the
event of the liquidation or bankruptcy of the Issuer be indebted to
the Issuer, shall be entitled to exercise any right of set-off or
counterclaim against moneys owed by the Issuer in respect of the
Notes held by such Noteholder.
3. NEGATIVE PLEDGE
This Condition 3 only applies to Preferred Senior Notes.
3.1 Negative Pledge
So long as any of the Preferred Senior Notes and/or related
Receipts or Coupons remain outstanding (as defined in the Agency
Agreement), the Issuer will ensure that no Relevant Indebtedness of
the Issuer or any of its Subsidiaries (as defined in Condition 10.3
(Definitions)) will be secured by any mortgage, charge, lien,
pledge or other security interest (each a "Security Interest"),
other than a Permitted Security Interest, upon, or with respect to,
any of the present or future business, undertaking, assets or
revenues (including any uncalled capital) of the Issuer or any of
its Subsidiaries unless the Issuer shall, in the case of the
creation of the Security Interest, before or at the same time and,
in any other case, promptly, take any and all action necessary to
ensure that:
(i) all amounts payable by it under the Preferred Senior Notes
and the Receipts and the Coupons are secured by the Security
Interest equally and rateably with the Relevant Indebtedness;
or
(ii) such other Security Interest or other arrangement (whether
or not it includes the giving of a Security Interest) is provided
as is approved by an Extraordinary Resolution (as defined in the
Agency Agreement or the VP Issuing Agency Agreement, as applicable)
of the Noteholders.
3.2 Interpretation
For the purposes of these Conditions:
"Covered Bonds" means bonds, notes or other securities (however
defined) issued by the Issuer pursuant to and in accordance with
the Danish Financial Business Act and secured on a segregated pool
of assets pursuant to the Danish Financial Business Act;
"Permitted Security Interest" means (i) any Security Interest
which is created pursuant to any securitisation, asset--backed
financing or like arrangement in accordance with normal market
practice and whereby the amount of indebtedness secured by such
Security Interest or, in respect of which any guarantee or
indemnity is secured by such Security Interest, is limited to the
value of the assets secured and (ii) any Security Interest arising
by operation of law; and
"Relevant Indebtedness" means (a) any present or future
indebtedness (whether being principal, premium, interest or other
amounts) for or in respect of any notes, bonds, debentures,
debenture stock, loan stock or other securities (other than Covered
Bonds) which are for the time being quoted, listed or ordinarily
dealt in on any stock exchange, over--the--counter or other
securities market, and (b) any guarantee or indemnity in respect of
any such indebtedness.
4. REDENOMINATION
4.1 Redenomination
Where redenomination is specified in the applicable Final Terms
as being applicable, the Issuer may, without the consent of the
Noteholders, the Receiptholders and the Couponholders on giving
prior notice to the Agent, Euroclear and Clearstream, Luxembourg,
or the VP Issuing Agent, the VP, as applicable, and at least 30
days' prior notice to the Noteholders in accordance with Condition
14 (Notices), elect that, with effect from the Redenomination Date
specified in the notice, the Notes shall be redenominated in
euro.
The election will have effect as follows:
(a) the Notes and the Receipts shall be deemed to be
redenominated in euro in the denomination of euro 0.01 with a
nominal amount for each Note and Receipt equal to the nominal
amount of that Note or Receipt in the Specified Currency, converted
into euro at the Established Rate, provided that, if the Issuer
determines, with the agreement of the Agent or the VP Issuing
Agent, as applicable, that the then market practice in respect of
the redenomination in euro of internationally offered securities is
different from the provisions specified above, such provisions
shall be deemed to be amended so as to comply with such market
practice and the Issuer shall promptly notify the Noteholders, the
stock exchange (if any) on which the Notes may be listed and the
Paying Agents of such deemed amendments;
(b) save to the extent that an Exchange Notice has been given in
accordance with paragraph (d) under, the amount of interest due in
respect of the Notes will be calculated by reference to the
aggregate nominal amount of Notes held (or, as the case may be, in
respect of which Coupons are presented for payment) by the relevant
holder and the amount of such payment shall be rounded down to the
nearest euro 0.01;
(c) if definitive Notes are required to be issued after the
Redenomination Date, they shall be issued at the expense of the
Issuer (i) in the case of Relevant Notes in the denomination of
euro 100,000 and/or such higher amounts as the Agent or the VP
Issuing Agent, as applicable, may determine and notify to the
Noteholders and any remaining amounts less than euro 100,000 shall
be redeemed by the Issuer and paid to the Noteholders in euro in
accordance with Condition 7 (Redemption and Purchase); and (ii) in
the case of Notes which are not Relevant Notes, in the
denominations of euro 1,000, euro 10,000, euro 100,000 and (but
only to the extent of any remaining amounts less than euro 1,000 or
such smaller denominations as the Agent or the VP Issuing Agent, as
applicable, may approve) euro 0.01 and such other denominations as
the Agent or the VP Issuing Agent, as applicable, shall determine
and notify to the Noteholders;
(d) if issued prior to the Redenomination Date, all unmatured
Coupons denominated in the Specified Currency (whether or not
attached to the Notes) will become void with effect from the date
on which the Issuer gives notice (the "Exchange Notice") that
replacement euro--denominated Notes, Receipts and Coupons are
available for exchange (provided that such securities are so
available) and no payments will be made in respect of them. The
payment obligations contained in any Notes and Receipts so issued
will also become void on that date although those Notes and
Receipts will continue to constitute valid exchange obligations of
the Issuer. New euro--denominated Notes, Receipts and Coupons will
be issued in exchange for Notes, Receipts and Coupons denominated
in the Specified Currency in such manner as the Agent or the VP
Issuing Agent, as applicable, may specify and as shall be notified
to the Noteholders in the Exchange Notice. No Exchange Notice may
be given less than 15 days prior to any date for payment of
principal or interest on the Notes;
(e) after the Redenomination Date, all payments in respect of
the Notes, the Receipts and the Coupons, other than payments of
interest in respect of periods commencing before the Redenomination
Date, will be made solely in euro as though references in the Notes
to the Specified Currency were to euro. Payments will be made in
euro by credit or transfer to a euro account (or any other account
to which euro may be credited or transferred) specified by the
payee or, at the option of the payee, by a euro cheque;
(f) if the Notes are Fixed Rate Notes and interest for any period ending on or after the Redenomination Date is required to be calculated for a period ending other than on an Interest Payment Date, it will be calculated:
(i) in the case of the Notes represented by a Global Note, by
applying the Rate of Interest to the aggregate outstanding nominal
amount of the Notes represented by such Global Note; and
(ii) in the case of definitive Notes or VP Systems Notes, by
applying the Rate of Interest to the Calculation Amount;
and, in each case, multiplying such sum by the applicable Day
Count Fraction, and rounding the resultant figure to the nearest
sub--unit of the relevant Specified Currency, half of any such
sub--unit being rounded upwards or otherwise in accordance with
applicable market convention. Where the Specified Denomination of a
Fixed Rate Note in definitive form is a multiple of the Calculation
Amount, the amount of interest payable in respect of such Fixed
Rate Note shall be the product of the amount (determined in the
manner provided above) for the Calculation Amount and the amount by
which the Calculation Amount is multiplied to reach the Specified
Denomination, without any further rounding;
(g) if the Notes are Floating Rate Notes, the applicable Final
Terms will specify any relevant changes to the provisions relating
to interest; and
(h) such other changes shall be made to this Condition 4 as the
Issuer may decide, after consultation with the Agent or the VP
Issuing Agent, as applicable, and as may be specified in the
notice, to conform it to conventions then applicable to instruments
denominated in euro.
4.2 Definitions
In the Conditions, the following expressions have the following
meanings:
"Calculation Amount" is the amount to be determined by the
Issuer for the purpose of calculating the amount of interest
payable per Specified Denomination.
"Established Rate" means the rate for the conversion of the
Specified Currency (including compliance with rules relating to
roundings in accordance with applicable European Union regulations)
into euro established by the Council of the European Union pursuant
to Article 140 of the Treaty;
"euro" means the currency introduced at the start of the third
stage of European economic and monetary union pursuant to the
Treaty;
"Redenomination Date" means (in the case of interest bearing
Notes) any date for payment of interest under the Notes or (in the
case of Zero Coupon Notes) any date, in each case specified by the
Issuer in the notice given to the Noteholders pursuant to Condition
4.1 (Redenomination) above and which falls on or after the date on
which the country of the Specified Currency first participates in
the third stage of European economic and monetary union;
"Relevant Notes" means all Notes where the applicable Final
Terms provide for a minimum Specified Denomination in the Specified
Currency which is equivalent to at least euro 100,000 and which are
admitted to trading on a regulated market in the European Economic
Area; and
"Treaty" means the Treaty on the Functioning of the European
Union, as amended.
5. INTEREST
5.1 Interest on Fixed Rate Notes
Each Fixed Rate Note bears interest from (and including or, in
the case of VP Systems Notes, but excluding) the Interest
Commencement Date at the rate(s) per annum equal to the Rate(s) of
Interest specified in the final terms. Interest will be payable in
arrear on the Interest Payment Date(s) in each year up to (and
including) the Maturity Date.
If the Notes are in definitive form, except as provided in the
applicable Final Terms, the amount of interest payable on each
Interest Payment Date in respect of the Fixed Interest Period
ending on (but excluding) such date will amount to the Fixed Coupon
Amount. Payments of interest on any Interest Payment Date will, if
so specified in the applicable Final Terms, amount to the Broken
Amount so specified.
As used in the Conditions, "Fixed Interest Period" means the
period from (and including or, in the case of VP Systems Notes, but
excluding) an Interest Payment Date (or the Interest Commencement
Date) to (but excluding or, in the case of VP Systems Notes, and
including) the next (or first) Interest Payment Date.
Except in the case of Notes in definitive form where an
applicable Fixed Coupon Amount or Broken Amount is specified in the
applicable Final Terms, interest shall be calculated in respect of
any period by applying the Rate of Interest to:
(A) in the case of Fixed Rate Notes which are represented by a
Global Note, the aggregate outstanding nominal amount of the Fixed
Rate Notes represented by such Global Note; or
(B) in the case of Fixed Rate Notes which are (I) in definitive
form or (II) VP Systems Notes, the Calculation Amount;
and, in each case, multiplying such sum by the applicable Day
Count Fraction, and rounding the resultant figure to the nearest
sub--unit of the relevant Specified Currency, half of any such
sub--unit being rounded upwards or otherwise in accordance with
applicable market convention. Where the Specified Denomination of a
Fixed Rate Note in definitive form or of a Fixed Rate Note which is
a VP Systems Note is a multiple of the Calculation Amount, the
amount of interest payable in respect of such Fixed Rate Note shall
be the product of the amount (determined in the manner provided
above) for the Calculation Amount and the amount by which the
Calculation Amount is multiplied to reach the Specified
Denomination, without any further rounding.
"Day Count Fraction" means, in respect of the calculation of an
amount of interest in accordance with this Condition 5.1:
(a) if "Actual/Actual (ICMA)" is specified in the applicable Final Terms:
(i) in the case of Notes where the number of days in the
relevant period from (and including or, in the case of VP Systems
Notes, but excluding) the most recent Interest Payment Date (or, if
none, the Interest Commencement Date) to (but excluding or, in the
case of VP Systems Notes, and including) the relevant payment date
(the "Accrual Period") is equal to or shorter than the
Determination Period during which the Accrual Period ends, the
number of days in such Accrual Period divided by the product of (I)
the number of days in such Determination Period and (II) the number
of Determination Dates (as specified in the applicable Final Terms)
that would occur in one calendar year; or
(ii) in the case of Notes where the Accrual Period is longer
than the Determination Period during which the Accrual Period ends,
the sum of:
(A) the number of days in such Accrual Period falling in the
Determination Period in which the Accrual Period begins divided by
the product of (x) the number of days in such Determination Period
and (y) the number of Determination Dates that would occur in one
calendar year; and
(B) the number of days in such Accrual Period falling in the
next Determination Period divided by the product of (x) the number
of days in such Determination Period and (y) the number of
Determination Dates that would occur in one calendar year; and
(b) if "30/360" is specified in the applicable Final Terms, the
number of days in the period from (and including or, in the case of
VP Systems Notes, but excluding) the most recent Interest Payment
Date (or, if none, the Interest Commencement Date) to (but
excluding or, in the case of VP Systems Notes, and including) the
relevant payment date (such number of days being calculated on the
basis of a year of 360 days with 12 30-day months) divided by
360.
In the Conditions:
"Determination Period" means each period from (and including or,
in the case of VP Systems Notes, but excluding) a Determination
Date to (but excluding or, in the case of VP Systems Notes, and
including) the next Determination Date (including, where either the
Interest Commencement Date or the final Interest Payment Date is
not a Determination Date, the period commencing on the first
Determination Date prior to, and ending on the first Determination
Date falling after, such date); and
"sub--unit" means, with respect to any currency other than euro,
the lowest amount of such currency that is available as legal
tender in the country of such currency and, with respect to euro,
one cent.
5.2 Interest on Floating Rate Notes
(a) Interest Payment Dates
Each Floating Rate Note bears interest from (and including or,
in the case of VP Systems Notes, but excluding) the Interest
Commencement Date and such interest will be payable in arrear on
either:
(i) the Specified Interest Payment Date(s) in each year
specified in the applicable Final Terms; or
(ii) if no Specified Interest Payment Date(s) is/are specified
in the applicable Final Terms, each date (each such date, together
with each Specified Interest Payment Date, an "Interest Payment
Date") which falls the number of months or other period specified
as the Specified Period in the applicable Final Terms after the
preceding Interest Payment Date or, in the case of the first
Interest Payment Date, after the Interest Commencement Date.
Such interest will be payable in respect of each Interest Period
(which expression shall, in the Conditions, mean the period from
(and including or, in the case of VP Systems Notes, but excluding)
an Interest Payment Date (or the Interest Commencement Date) to
(but excluding or, in the case of VP Systems Notes, and including)
the next (or first) Interest Payment Date).
If a Business Day Convention is specified in the applicable
Final Terms and (x) if there is no numerically corresponding day in
the calendar month in which an Interest Payment Date should occur
or (y) if any Interest Payment Date would otherwise fall on a day
which is not a Business Day, then, if the Business Day Convention
specified is:
(A) in any case where Specified Periods are specified in
accordance with Condition 5.2(a)(i) above, the Floating Rate
Convention, such Interest Payment Date (a) in the case of (x)
above, shall be the last day that is a Business Day in the relevant
month and the provisions of (ii) below shall apply mutatis mutandis
or (b) in the case of (y) above, shall be postponed to the next day
which is a Business Day unless it would thereby fall into the next
calendar month, in which event (i) such Interest Payment Date shall
be brought forward to the immediately preceding Business Day and
(ii) each subsequent Interest Payment Date shall be the last
Business Day in the month which falls the Specified Period after
the preceding applicable Interest Payment Date occurred; or
(B) the Following Business Day Convention, such Interest Payment
Date shall be postponed to the next day which is a Business Day;
or
(C) the Modified Following Business Day Convention, such
Interest Payment Date shall be postponed to the next day which is a
Business Day unless it would thereby fall into the next calendar
month, in which event such Interest Payment Date shall be brought
forward to the immediately preceding Business Day; or
(D) the Preceding Business Day Convention, such Interest Payment
Date shall be brought forward to the immediately preceding Business
Day.
In the Conditions, "Business Day" means a day which is both:
(a) a day on which commercial banks and foreign exchange markets
settle payments and are open for general business (including
dealing in foreign exchange and foreign currency deposits) in
London and each Additional Business Centre specified in the
applicable Final Terms; and
(b) either (i) in relation to any sum payable in a Specified
Currency other than euro, a day on which commercial banks and
foreign exchange markets settle payments and are open for general
business (including dealing in foreign exchange and foreign
currency deposits) in the principal financial centre of the country
of the relevant Specified Currency (which if the Specified Currency
is Australian dollars or New Zealand dollars shall be Sydney and
Auckland, respectively) or (ii) in relation to any sum payable in
euro, a day on which the Trans--European Automated Real--Time Gross
Settlement Express Transfer (TARGET2) System (the "TARGET2 System")
is open.
(b) Rate of Interest
The Rate of Interest payable from time to time in respect of
Floating Rate Notes will be determined in the manner specified in
the applicable Final Terms.
(i) ISDA Determination for Floating Rate Notes
Where ISDA Determination is specified in the applicable Final
Terms as the manner in which the Rate of Interest is to be
determined, the Rate of Interest for each Interest Period will be
the relevant ISDA Rate plus or minus (as indicated in the
applicable Final Terms) the Margin (if any). For the purposes of
this subparagraph (i), "ISDA Rate" for an Interest Period means a
rate equal to the Floating Rate that would be determined by the
Agent under an interest rate swap transaction if the Agent were
acting as Calculation Agent for that swap transaction under the
terms of an agreement incorporating the 2006 ISDA Definitions, as
published by the International Swaps and Derivatives Association,
Inc. and as amended and updated as at the Issue Date of the first
Tranche of the Notes (the "ISDA Definitions") and under which:
(A) the Floating Rate Option is as specified in the applicable Final Terms;
(B) the Designated Maturity is a period specified in the applicable Final Terms;
(C) the relevant Reset Date is the day specified in the applicable Final Terms; and
(D) if Linear Interpolation is specified as applicable in
respect of an Interest Period in the applicable Final Terms, the
Rate of Interest for such Interest Period shall be calculated by
the Calculation Agent by straight-line linear interpolation by
reference to two rates based on the relevant Floating Rate Option,
where:
(1) one rate shall be determined as if the Designated Maturity
were the period of time for which rates are available next shorter
than the length of the relevant Interest Period; and
(2) the other rate shall be determined as if the Designated
Maturity were the period of time for which rates are available next
longer than the length of the relevant Interest Period
provided, however, that if there is no rate available for a
period of time next shorter than the length of the relevant
Interest Period or, as the case may be, next longer than the length
of the relevant Interest Period, then the Calculation Agent shall
determine such rate at such time and by reference to such sources
as it determines appropriate.
For the purposes of this subparagraph (i), "Floating Rate",
"Calculation Agent", "Floating Rate Option", "Designated Maturity"
and "Reset Date" have the meanings given to those terms in the ISDA
Definitions.
Unless otherwise stated in the applicable Final Terms the
Minimum Rate of Interest shall be deemed to be zero.
(ii) Screen Rate Determination for Floating Rate Notes
Where Screen Rate Determination is specified in the applicable
Final Terms as the manner in which the Rate of Interest is to be
determined, the Rate of Interest for each Interest Period will,
subject as provided below, be either:
(A) if the Reference Rate is a composite quotation or
customarily supplied by one entity, the Calculation Agent will
determine the Reference Rate which appears on the Relevant Screen
Page as of the Relevant Time on the relevant Interest Determination
Date;
(B) if Linear Interpolation is specified as applicable in
respect of an Interest Period in the applicable Final Terms, the
Rate of Interest for such Interest Period shall be calculated by
the Calculation Agent by straight-line linear interpolation by
reference to two rates which appear on the Relevant Screen Page as
of the Relevant Time on the relevant Interest Determination Date,
where:
(1) one rate shall be determined as if the relevant Interest
Period were the period of time for which rates are available next
shorter than the length of the relevant Interest Period; and
(2) the other rate shall be determined as if the relevant
Interest Period were the period of time for which rates are
available next longer than the length of the relevant Interest
Period;
provided, however, that if no rate is available for a period of
time next shorter or, as the case may be, next longer than the
length of the relevant Interest Period, then the Calculation Agent
shall determine such rate at such time and by reference to such
sources as it determines appropriate.
(C) in any other case, the Calculation Agent will determine the
arithmetic mean (rounded if necessary to the fifth decimal place,
with 0.000005 being rounded upwards) of the Reference Rates which
appear on the Relevant Screen Page as of the Relevant Time on the
relevant Interest Determination Date;
(expressed as a percentage rate per annum) for the Reference
Rate which appears or appear, as the case may be, on the Relevant
Screen Page as at 11.00 a.m. (London time, in the case of LIBOR,
Copenhagen time, in the case of CIBOR, Brussels time, in the case
of EURIBOR, Stockholm time, in the case of STIBOR or 12.00 noon
Oslo time, in the case of NIBOR) on the Interest Determination Date
in question plus or minus (as indicated in the applicable Final
Terms) the Margin (if any), all as determined by the Agent or, in
the case of VP Systems Notes, the Calculation Agent (pursuant to
the terms of a calculation agency agreement between the Issuer and
the Calculation Agent). If five or more of such offered quotations
are available on the Relevant Screen Page, the highest (or, if
there is more than one such highest quotation, one only of such
quotations) and the lowest (or, if there is more than one such
lowest quotation, one only of such quotations) shall be disregarded
by the Agent or the Calculation Agent, as the case may be, for the
purpose of determining the arithmetic mean (rounded as provided
above) of such offered quotations.
If the Relevant Screen Page is not available or if in the case
of Condition 5.2(a)(ii)(A) above, no such offered quotation appears
or, in the case of Condition 5.2(a)(ii)(B) above, fewer than three
such offered quotations appear, in each case as at the time
specified in the preceding paragraph, the Calculation Agent or the
Independent Adviser (as applicable) shall request each of the
Reference Banks (as defined below) to provide it with its offered
quotation (expressed as a percentage rate per annum) for the
Reference Rate at approximately the Relevant Time on the Interest
Determination Date in question. If two or more of the Reference
Banks provide it with such offered quotations, the Rate of Interest
for such Interest Period shall be the arithmetic mean (rounded if
necessary to the fifth decimal place with 0.000005 being rounded
upwards) of such offered quotations plus or minus (as appropriate)
the Margin (if any), all as determined by the Calculation Agent or
the Independent Adviser (as applicable).
If on any Interest Determination Date one only or none of the
Reference Banks provides the Calculation Agent or the Independent
Adviser (as applicable) with such offered quotations as provided in
the preceding paragraph, the Rate of Interest for the relevant
Interest Period shall be the rate per annum which the Calculation
Agent or the Independent Adviser (as applicable) determines as
being the arithmetic mean (rounded if necessary to the fifth
decimal place, with 0.000005 being rounded upwards) of the rates,
as communication to (and at the request of) the Calculation Agent
or the Independent Adviser (as applicable) by the Reference Banks
or any two or more of them, at which such banks were offered, at
approximately the Relevant Time on the relevant Interest
Determination Date, deposits in the Specified Currency for the
relevant Interest Period by leading banks in the London inter-bank
market (if the Reference Rate is LIBOR), the Copenhagen inter-bank
market (if the Reference Rate is CIBOR), the Euro-zone inter-bank
market (if the Reference Rate is EURIBOR), the Stockholm inter-bank
market (if the Reference Rate is STIBOR) or the Norwegian
inter-bank market (if the Reference Rate is NIBOR) plus or minus
(as appropriate) the Margin (if any) or, if fewer than two of the
Reference Banks provide the Calculation Agent or the Independent
Adviser (as applicable) with such offered rates, the offered rate
for deposits in the Specified Currency for the relevant Interest
Period, or the arithmetic mean (rounded as provided above) of the
offered rates for deposits in the Specified Currency for the
relevant Interest Period, at which, at approximately the Relevant
Time on the relevant Interest Determination Date, any one or more
banks (which bank or banks is or are in the opinion of the Issuer
suitable for such purpose) informs the Calculation Agent or the
Independent Adviser (as applicable) it is quoting to leading banks
in the London inter-bank market (if the Reference Rate is LIBOR),
the Copenhagen inter-bank market (if the Reference Rate is CIBOR),
the Euro-zone inter-bank market (if the Reference Rate is EURIBOR),
the Stockholm interbank market (if the Reference Rate is STIBOR) or
the Norwegian interbank market (if the Reference Rate is NIBOR)
plus or minus (as appropriate) the Margin (if any), provided that,
if the Rate of Interest cannot be determined in accordance with the
foregoing provisions of this paragraph, the Rate of Interest shall
be determined as at the last preceding Interest Determination Date
(though substituting, where a different Margin is to be
applied to the relevant Interest Period from that which applied
to the last preceding Interest Period, the Margin relating to the
relevant Interest Period, in place of the Margin relating to that
last preceding Interest Period).
As used herein:
"CIBOR" means, in respect of any currency and any period
specified hereon, the interest rate benchmark known as the
Copenhagen interbank offered rate which is calculated and published
by a designated distributor (currently Nasdaq Copenhagen) in
accordance with the requirements from time to time of the Danish
Bankers Association based on estimated interbank borrowing rates
for Danish kroner for a number of designated maturities which are
provided by a panel of contributor banks.
"EURIBOR" means, in respect of any specified currency and any
specified period, the interest rate benchmark known as the Euro
zone interbank offered rate which is calculated and published by a
designated distributor (currently Thomson Reuters) in accordance
with the requirements from time to time of the European Money
Markets Institute (or any other person which takes over the
administration of that rate) based on estimated interbank borrowing
rates for a number of designated currencies and maturities which
are provided, in respect of each such currency, by a panel of
contributor banks (details of historic EURIBOR rates can be
obtained from the designated distributor).
"Independent Adviser" means an independent financial institution
of international repute or other independent financial adviser
experienced in the international capital markets, in each case
appointed by the Issuer, in consultation with the Agent, at the
Issuer's expense.
"LIBOR" means, in respect of any currency and any period
specified hereon, the London interbank offered rate for that
currency and period displayed as quoted on the appropriate page
(being currently Reuters screen page LIBOR01 or LIBOR02) on the
information service which publishes that rate.
"NIBOR" means, in respect of Norwegian Kroner and for any
specified period, the interest rate benchmark known as the
Norwegian interbank offered rate which is calculated and published
by a designated distributor (currently Oslo Børs) in accordance
with the requirements from time to time of the Norwegian
association for banks, insurance companies and financial
institutions, Finance Norway - FNO based on estimated interbank
borrowing rates for Norwegian Kroner for a number of designated
maturities which are provided by a panel of contributor banks
(details of historic NIBOR rates can be obtained from the
designated distributor).
"Reference Banks" means (i) in the case of a determination of
LIBOR, the principal London office of four major banks in the
London inter-bank market, (ii) in the case of a determination of
CIBOR, the principal Copenhagen office of four major banks in the
Danish inter-bank market and (iii) in the case of a determination
of EURIBOR, the principal Euro-zone office of four major banks in
the Euro-zone inter-bank market, (iv) in the case of determination
of STIBOR the principal Stockholm office of four major banks in the
Stockholm inter-bank market and (v) in the case of determination of
NIBOR, the principal Oslo office of four major banks in the
Norwegian inter-bank market in each case selected by the Issuer or
Independent Adviser or as specified in the applicable Final
Terms;
"Reference Rate" means EURIBOR, LIBOR, CIBOR, STIBOR or NIBOR as
specified in the relevant Final Terms in respect of the currency
and period specified in the relevant Final Terms;
"Relevant Screen Page" means the page, section or other part of
a particular information service (including, but not limited to,
Reuters and Bloomberg), as may be specified as the Relevant Screen
Page in the relevant Final Terms, or such other page, section or
other part as may replace it on that information service or such
other information service, in each case, as may be nominated by the
person providing or sponsoring the information appearing there for
the purpose of displaying rates or prices comparable to the
Reference Rate; and
"Relevant Time" means, unless otherwise specified in the
relevant Final Terms, 11.00 a.m. (London time, in the case of a
determination of LIBOR, Copenhagen time, in the case of a
determination of CIBOR, Brussels time, in the case of a
determination of EURIBOR, Stockholm time in the case of
determination of STIBOR, or 12.00 noon Oslo time, in the case of
determination of NIBOR).
"STIBOR" means, in respect of Swedish Kronor and for any
specified period, the interest rate benchmark known as the
Stockholm interbank offered rate which is calculated and published
by a designated distributor (currently Nasdaq Stockholm) based on
estimated interbank borrowing rates for Swedish Kronor for a number
of designated maturities which are provided by a panel of
contributor banks (details of historic STIBOR rates can be obtained
from the designated distributor).
(c) Minimum Rate of Interest and/or Maximum Rate of Interest
If the applicable Final Terms specifies a Minimum Rate of
Interest for any Interest Period, then, in the event that the Rate
of Interest in respect of such Interest Period determined in
accordance with the provisions of paragraph (b) above is less than
such Minimum Rate of Interest, the Rate of Interest for such
Interest Period shall be such Minimum Rate of Interest.
If the applicable Final Terms specifies a Maximum Rate of
Interest for any Interest Period, then, in the event that the Rate
of Interest in respect of such Interest Period determined in
accordance with the provisions of paragraph (b) above is greater
than such Maximum Rate of Interest, the Rate of Interest for such
Interest Period shall be such Maximum Rate of Interest.
(d) Determination of Rate of Interest and calculation of Interest Amounts
The Agent, in the case of Floating Rate Bearer Notes and the
Calculation Agent, in the case of Floating Rate VP Systems Notes,
will at or as soon as practicable after each time at which the Rate
of Interest is to be determined, determine the Rate of Interest for
the relevant Interest Period.
The Agent, in the case of Floating Rate Bearer Notes and the
Calculation Agent, in the case of Floating Rate VP Systems Notes,
will calculate the amount of interest (the "Interest Amount")
payable on the Floating Rate Notes for the relevant Interest Period
by applying the Rate of Interest to:
(A) in the case of Floating Rate Notes which are represented by
a Global Note, the aggregate outstanding nominal amount of the
Notes represented by such Global Note; or
(B) in the case of Floating Rate Notes which are (I) in
definitive form or (II) VP Systems Notes, the Calculation
Amount;
and, in each case, multiplying such sum by the applicable Day
Count Fraction, and rounding the resultant figure to the nearest
sub--unit of the relevant Specified Currency, half of any such
sub--unit being rounded upwards or otherwise in accordance with
applicable market convention. Where the Specified Denomination of a
Floating Rate Note which is (I) in definitive form or (II) a VP
Systems Note is a multiple of the Calculation Amount, the Interest
Amount payable in respect of such Note shall be the product of the
amount (determined in the manner provided above) for the
Calculation Amount and the amount by which the Calculation Amount
is multiplied to reach the Specified Denomination, without any
further rounding.
"Day Count Fraction" means, in respect of the calculation of an
amount of interest in accordance with this Condition 5.2:
(i) if "Actual/Actual (ISDA)" or "Actual/Actual" is specified in
the applicable Final Terms, the actual number of days in the
Interest Period divided by 365 (or, if any portion of that Interest
Period falls in a leap year, the sum of (I) the actual number of
days in that portion of the Interest Period falling in a leap year
divided by 366 and (II) the actual number of days in that portion
of the Interest Period falling in a non--leap year divided by
365);
(ii) if "Actual/365 (Fixed)" is specified in the applicable
Final Terms, the actual number of days in the Interest Period
divided by 365;
(iii) if "Actual/365 (Sterling)" is specified in the applicable
Final Terms, the actual number of days in the Interest Period
divided by 365 or, in the case of an Interest Payment Date falling
in a leap year, 366;
(iv) if "Actual/360" is specified in the applicable Final Terms,
the actual number of days in the Interest Period divided by
360;
(v) if "30/360", "360/360" or "Bond Basis" is specified in the
applicable Final Terms, the number of days in the Interest Period
divided by 360, calculated on a formula basis as follows:
Day Count Fraction =
where:
"Y(1) " is the year, expressed as a number, in which the first
day of the Interest Period falls;
"Y(2) " is the year, expressed as a number, in which the day
immediately following the last day of the Interest Period
falls;
"M(1) " is the calendar month, expressed as a number, in which
the first day of the Interest Period falls;
"M(2) " is the calendar month, expressed as a number, in which
the day immediately following the last day of the Interest Period
falls;
"D(1) " is the first calendar day, expressed as a number, of the
Interest Period, unless such number is 31, in which case D(1) will
be 30; and
"D(2) " is the calendar day, expressed as a number, immediately
following the last day included in the Interest Period, unless such
number would be 31 and D(1) is greater than 29, in which case D(2)
will be 30;
(vi) if "30E/360" or "Eurobond Basis" is specified in the
applicable Final Terms, the number of days in the Interest Period
divided by 360, calculated on a formula basis as follows:
Day Count Fraction =
where:
"Y(1) " is the year, expressed as a number, in which the first
day of the Interest Period falls;
"Y(2) " is the year, expressed as a number, in which the day
immediately following the last day of the Interest Period
falls;
"M(1) " is the calendar month, expressed as a number, in which
the first day of the Interest Period falls;
"M(2) " is the calendar month, expressed as a number, in which
the day immediately following the last day of the Interest Period
falls;
"D(1) " is the first calendar day, expressed as a number, of the
Interest Period, unless such number would be 31, in which case D(1)
will be 30; and
"D(2) " is the calendar day, expressed as a number, immediately
following the last day included in the Interest Period, unless such
number would be 31, in which case D(2) will be 30;
(vii) if "30E/360 (ISDA)" is specified in the applicable Final
Terms, the number of days in the Interest Period divided by 360,
calculated on a formula basis as follows:
Day Count Fraction =
where:
"Y(1) " is the year, expressed as a number, in which the first
day of the Interest Period falls;
"Y(2) " is the year, expressed as a number, in which the day
immediately following the last day of the Interest Period
falls;
"M(1) " is the calendar month, expressed as a number, in which
the first day of the Interest Period falls;
"M(2) " is the calendar month, expressed as a number, in which
the day immediately following the last day of the Interest Period
falls;
"D(1) " is the first calendar day, expressed as a number, of the
Interest Period, unless (i) that day is the last day of February or
(ii) such number would be 31, in which case D(1) will be 30;
and
"D(2) " is the calendar day, expressed as a number, immediately
following the last day included in the Interest Period, unless (i)
that day is the last day of February but not the Maturity Date or
(ii) such number would be 31, in which case D(2) will be 30.
(e) Notification of Rate of Interest and Interest Amounts
The Calculation Agent will cause the Rate of Interest and each
Interest Amount for each Interest Period and the relevant Interest
Payment Date to be notified to the Issuer and any stock exchange on
which the relevant Floating Rate Notes are for the time being
listed and, in the case of the VP Systems Notes, the VP Issuing
Agent, (by no later than the first day of each Interest Period) and
notice thereof to be published in accordance with Condition 14 as
soon as possible after their determination but in no event later
than the fourth London Business Day thereafter. Each Interest
Amount and Interest Payment Date so notified may subsequently be
amended (or appropriate alternative arrangements made by way of
adjustment) without prior notice in the event of an extension or
shortening of the Interest Period. Any such amendment will be
promptly notified to each stock exchange on which the relevant
Floating Rate Notes are for the time being listed and to the
Noteholders in accordance with Condition 14 (Notices). For the
purposes of this paragraph, the expression "London Business Day"
means a day (other than a Saturday or a Sunday) on which banks and
foreign exchange markets are open for general business in
London.
(f) Certificates to be final
All certificates, communications, opinions, determinations,
calculations, quotations and decisions given, expressed, made or
obtained for the purposes of the provisions of this Condition 5.2
(Interest on Floating Rate Notes) by the Calculation Agent shall
(in the absence of wilful default, bad faith and manifest error) be
binding on the Issuer, the Agent, the VP Issuing Agent (if
applicable), the Calculation Agent (if applicable), the other
Paying Agents and all Noteholders, Receiptholders and Couponholders
and (in the absence of wilful default and bad faith) no liability
to the Issuer, the Noteholders, Receiptholders or the Couponholders
shall attach to the Agent or, if applicable, the VP Issuing Agent
and/or the Calculation Agent in connection with the exercise or
non--exercise by it of its powers, duties and discretions pursuant
to such provisions.
5.3 Rate Reset Provisions
Application: Conditions 5.3-5.7 (inclusive) shall only apply if
the Reset Note Provisions are specified in the relevant Final Terms
as being applicable to one or more Interest Period(s).
Accrual of Interest: The Notes bear interest on their
outstanding principal amounts:
(a) from (and including) the Interest Commencement Date to (but
excluding) the First Reset Date at the Initial Rate of
Interest;
(b) for the First Reset Period at the First Reset Rate of Interest; and
(c) for each Subsequent Reset Period thereafter (if any) to (but
excluding) the Maturity Date at the relevant Subsequent Reset Rate
of Interest,
payable, in each case, in arrear on each relevant Interest
Payment Date (subject as provided in Condition 6 (Payments).
The Rate of Interest and the Interest Amount payable shall be
determined by the Calculation Agent, (A) in the case of the Rate of
Interest, at or as soon as practicable after each time at which the
Rate of Interest is to be determined, and (B) in the case of the
Interest Amount in accordance with the provisions for calculating
amounts of interest in Conditions 5.1 (Interest on Fixed Rate
Notes).
5.4 Fallbacks
If on any Reset Determination Date, the Relevant Screen Page is
not available or the Mid-Swap Rate does not appear on the Relevant
Screen Page as of the Relevant Time on such Reset Determination
Date, the Rate of Interest applicable to the Notes in respect of
each Interest Period falling in the relevant Reset Period will be
determined by the Calculation Agent on the following basis:
(a) the Calculation Agent shall request each of the Reset
Reference Banks to provide it with its Mid-Market Swap Rate
Quotation as at approximately the Relevant Time on the Reset
Determination Date in question;
(b) if at least three of the Reset Reference Banks provide the
Calculation Agent with Mid-Market Swap Rate Quotations, the First
Reset Rate of Interest or the Subsequent Reset Rate of Interest (as
applicable) for the relevant Reset Period will be equal to the sum
of (A) the arithmetic mean (rounded, if necessary, to the nearest
0.001 per cent. (0.0005 per cent. being rounded upwards)) of the
relevant quotations provided, eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest
(or, in the event of equality, one of the lowest) and (B) the
relevant Reset Margin, all as determined by the Calculation
Agent;
(c) if only two relevant quotations are provided, the First
Reset Rate of Interest or the Subsequent Reset Rate of Interest (as
applicable) for the relevant Reset Period will be equal to the sum
of (A) the arithmetic mean (rounded as aforesaid) of the relevant
quotations provided and (B) the relevant Reset Margin, all as
determined by the Calculation Agent;
(d) if only one relevant quotation is provided, the First Reset
Rate of Interest or the Subsequent Reset Rate of Interest (as
applicable) for the relevant Reset Period will be equal to the sum
of (A) the relevant quotation provided and (B) the relevant Reset
Margin, all as determined by the Calculation Agent; and
(e) if none of the Reset Reference Banks provides the
Calculation Agent with a Mid-Market Swap Rate Quotation as provided
in the foregoing provisions of this Condition 5.4, the First Reset
Rate of Interest or the Subsequent Reset Rate of Interest (as
applicable) will be equal to the sum of (A) the Mid-Swap Rate
determined on the last preceding Reset Determination Date and (B)
the relevant Reset Margin or, in the case of the first Reset
Determination Date, the First Reset Rate of Interest will be equal
to the sum of (A) the Initial Mid-Swap Rate and (B) the relevant
Reset Margin, all as determined by the Calculation Agent.
5.5 Mid-Swap Rate Conversion
This Condition 5.5 is only applicable if Mid-Swap Rate
Conversion is specified in the relevant Final Terms. If Mid-Swap
Rate Conversion is so specified as being applicable, the First
Reset Rate of Interest and, if applicable, each Subsequent Reset
Rate of Interest Issuing will be converted from the Original
Mid-Swap Rate Basis specified in the relevant Final Terms to a
basis which matches the per annum frequency of Interest Payment
Dates in respect of the relevant Notes (such calculation to be
determined by the Issuer in conjunction with a leading financial
institution selected by it).
5.6 Publication
The Calculation Agent will cause the First Reset Rate of
Interest, any Subsequent Reset Rate of Interest and, in respect of
a Reset Period, the Interest Amount payable on each Interest
Payment Date falling in such Reset Period to be notified to the
Agents, each listing authority, stock exchange and/or quotation
system (if any) on which the Notes have then been admitted to
listing, trading and/or quotation and, in the case of VP Systems
Notes, the VP or VPS, as the case may be, and the VP Issuing Agent
as soon as practicable after such determination. Notice thereof
shall also promptly be given to the Noteholders.
5.7 Notification
All notifications, opinions, determinations, certificates,
calculations, quotations and decisions given, expressed, made or
obtained for the purposes of Conditions 5.3 - 5.7 (inclusive) by
the Calculation Agent will (in the absence of manifest error) be
binding on the Issuer, the Agent, the VP Issuing Agent (if
applicable), the Noteholders, the Receiptholders and the
Couponholders and (subject as aforesaid) no liability to any such
person will attach to the Calculation Agent in connection with the
exercise or non-exercise by it of its powers, duties and
discretions for such purposes.
where:
"First Reset Date" means the date specified in the relevant
Final Terms;
"First Reset Margin" means the margin specified as such in the
relevant Final Terms;
"First Reset Period" means the period from (and including) the
First Reset Date to (but excluding) the Second Reset Date or, if no
such Second Reset Date is specified in the relevant Final Terms,
the Maturity Date;
"First Reset Rate of Interest" means, in respect of the First
Reset Period and subject to Condition 5.4 (Fallbacks) and Condition
5.5 (Mid-Swap Rate Conversion), the rate of interest determined by
the Calculation Agent on the relevant Reset Determination Date and
may be either a fixed rate or a floating rate. If a fixed rate it
shall be calculated as the sum of the relevant Mid-Swap Rate and
the First Reset Margin. If a floating rate it shall be calculated
as the sum of the floating rate specified in the Final Terms as
applicable to the First Reset Period and the First Reset
Margin;
"Initial Mid-Swap Rate" has the meaning specified in the
relevant Final Terms;
"Mid-Market Swap Rate" means for any Reset Period the mean of
the bid and offered rates for the fixed leg payable with a
frequency equivalent to the Original Mid-Swap Rate Basis
(calculated on the day count basis customary for fixed rate
payments in the Specified Currency as determined by the Calculation
Agent) of a fixed-for-floating interest rate swap transaction in
the Specified Currency which transaction (i) has a term equal to
the relevant Reset Period and commencing on the relevant Reset
Date, (ii) is in an amount that is representative for a single
transaction in the relevant market at the relevant time with an
acknowledged dealer of good credit in the swap market and (iii) has
a floating leg based on the Mid-Swap Floating Leg Benchmark Rate
for the Mid-Swap Floating Leg Maturity (calculated on the day count
basis customary for floating rate payments in the Specified
Currency as determined by the Calculation Agent);
"Mid-Market Swap Rate Quotation" means a quotation (expressed as
a percentage rate per annum) for the relevant Mid-Market Swap
Rate;
"Mid-Swap Rate" means, in relation to a Reset Determination Date
and subject to Condition 5.4 (Fallbacks), either:
(a) if Single Mid-Swap Rate is specified in the relevant Final
Terms, the rate for swaps in the Specified Currency:
(i) with a term equal to the relevant Reset Period; and
(ii) commencing on the relevant Reset Date, which appears on the Relevant Screen Page; or
(b) if Mean Mid-Swap Rate is specified in the relevant Final
Terms, the arithmetic mean (expressed as a percentage rate per
annum and rounded, if necessary, to the nearest 0.001 per cent.
(0.0005 per cent. being rounded upwards)) of the bid and offered
swap rate quotations for swaps in the Specified Currency:
(i) with a term equal to the relevant Reset Period; and
(ii) commencing on the relevant Reset Date, which appear on the
Relevant Screen Page, in either case, as at approximately the
Relevant Time on such Reset Determination Date, all as determined
by the Calculation Agent;
"Reset Date" means the First Reset Date, the Second Reset Date
and each Subsequent Reset Date (as applicable);
"Reset Determination Date" means, in respect of a Reset Period,
the date specified as such in the relevant Final Terms;
"Reset Margin" means the First Reset Margin and the Subsequent
Reset Margin (as applicable);
"Reset Period" means the First Reset Period or a Subsequent
Reset Period, as the case may be;
"Reset Reference Banks" means the principal office in the
principal financial centre of the Specified Currency of five major
banks in the swap, money, securities or other market most closely
connected with the relevant Mid-Swap Rate as selected by the
Calculation Agent in its discretion after consultation with the
Issuer;
"Subsequent Reset Date" means the date or dates specified in the
relevant Final Terms;
"Subsequent Reset Margin" means the margin specified as such in
the relevant Final Terms;
"Subsequent Reset Period" means the period from (and including)
the Second Reset Date to (but excluding) the next Subsequent Reset
Date, and each successive period from (and including) a Subsequent
Reset Date to (but excluding) the next succeeding Subsequent Reset
Date or the Maturity Date as the case may be; and
"Subsequent Reset Rate of Interest" means in respect of any
Subsequent Reset Period and subject to Condition 5.4 (Fallbacks)
and Condition 5.5 (Mid-Swap Rate Conversion), the rate of interest
determined by the Calculation Agent on the relevant Reset
Determination Date and may be either a fixed rate or a floating
rate. If a fixed rate it shall be calculated as the sum of the
relevant Mid-Swap Rate and the relevant Subsequent Reset Margin. If
a floating rate it shall be calculated as the sum of the floating
rate specified in the Final Terms as applicable to the Subsequent
Reset Period and the Subsequent Reset Margin.
5.8 Accrual of interest
Each Note (or in the case of the redemption of part only of a
Note, that part only of such Note) will cease to bear interest (if
any) from the date for its redemption unless payment of principal
is improperly withheld or refused.
In such event:
(a) in the case of Bearer Notes, interest will continue to
accrue until whichever is the earlier of:
(i) the date on which all amounts due in respect of such Note have been paid; and
(ii) five days after the date on which the full amount of the
moneys payable in respect of such Note has been received by the
Agent and notice to that effect has been given to the Noteholders
in accordance with Condition 14 (Notices); or
(b) in the case of VP Systems Notes, interest will continue to
accrue until the date the holders of the VP Systems Notes receive
the full amount of such payments.
5.9 Benchmark replacement:
Notwithstanding the provisions above in this Condition 5, if the
Issuer (in consultation with the Agent (or the person specified in
the applicable Final Terms as the party responsible for calculating
the Rate of Interest and the Interest Amount(s)) determines that
the relevant Mid-Swap Floating Leg Benchmark Rate or Reference Rate
(as applicable) specified in the applicable Final Terms has ceased
to be published on the Relevant Screen Page as a result of such
benchmark ceasing to be calculated or administered, then the
following provisions shall apply:
(1) the Issuer shall use reasonable endeavours to appoint an
Independent Adviser to determine an alternative rate (the
"Alternative Benchmark Rate") and an alternative screen page or
source (the "Alternative Relevant Screen Page") no later than 3
Business Days prior to the Reset Determination Date or Interest
Determination Date (as applicable) relating to the next succeeding
Reset Period or Interest Period (as applicable) (the "IA
Determination Cut-off Date") for the purposes of determining the
Rate of Interest applicable to the Notes for all future Reset
Periods or Interest Periods (as applicable) (subject to the
subsequent operation of this Condition 5.9;
(2) the Alternative Benchmark Rate shall be such rate as the
Independent Adviser determines has replaced the relevant Mid-Swap
Floating Leg Benchmark Rate or Reference Rate (as applicable) in
customary market usage for purposes of determining floating rates
of interest in respect of eurobonds denominated in the Specified
Currency, or, if the Independent Adviser determines that there is
no such rate, such other rate as the Independent Adviser determines
in its sole discretion is most comparable to the relevant Mid-Swap
Floating Leg Benchmark Rate or Reference Rate, and the Alternative
Relevant Screen Page shall be such page of an information service
as displays the Alternative Benchmark Rate;
(3) if the Issuer is unable to appoint an Independent Adviser,
or the Independent Adviser appointed by it fails to determine an
Alternative Benchmark Rate and Alternative Relevant Screen Page
prior to the IA Determination Cut-off Date in accordance with
sub-paragraph (2) above, then the Issuer (in consultation with the
Agent (or the person specified in the applicable Final Terms as the
party responsible for calculating the Rate of Interest and the
Interest Amount(s)) and acting in good faith and a commercially
reasonable manner) may determine which (if any) rate has replaced
the relevant Mid-Swap Floating Leg Benchmark Rate or Reference Rate
(as applicable) of the benchmark in customary market usage for
purposes of determining floating rates of interest in respect of
eurobonds denominated in the Specified Currency, or, if it
determines that there is no such rate, which (if any) rate is most
comparable to the relevant Mid-Swap Floating Leg Benchmark Rate or
Reference Rate (as applicable), the Alternative Benchmark Rate
shall be the rate so determined by the Issuer and the Alternative
Relevant Screen Page shall be such page of an information service
as displays the Alternative Benchmark Rate; provided, however, that
if this sub-paragraph (3) applies and the Issuer is unable or
unwilling to determine an Alternative Benchmark Rate and
Alternative Relevant Screen Page prior to the Reset Determination
Date or Interest Determination Date (as applicable) relating to the
next succeeding Reset Period or Interest Period (as applicable) in
accordance with this sub-paragraph (3), the Rate of Interest
applicable to such Reset Period or Interest Period shall be equal
to the Rate of Interest last determined in relation to the Notes in
respect of a preceding Reset Period or Interest Period as
applicable (which may be the Initial Rate of Interest) (though
substituting, where a different Margin is to be applied to the
relevant Reset Period or Interest Period from that which applied to
the last preceding Reset Period or Interest Period, the Margin
relating to the relevant Reset Period or Interest Period, in place
of the Margin relating to that last preceding Reset Period or
Interest Period);
(4) if an Alternative Benchmark Rate and Alternative Relevant
Screen Page is determined in accordance with the preceding
provisions, such Alternative Benchmark Rate and Alternative
Relevant Screen Page shall be the benchmark and the Relevant Screen
Page in relation to the Notes for all future Reset Periods or
Interest Periods (as applicable) (subject to the subsequent
operation of this Condition 5.9;
(5) if the Independent Adviser or the Issuer determines an
Alternative Benchmark Rate in accordance with the above provisions,
the Independent Adviser or the Issuer (as the case may be), may
also, following consultation with the Agent (or the person
specified in the applicable Final Terms as the party responsible
for calculating the Rate of Interest and the Interest Amount(s)),
specify changes to the Day Count Fraction, Business Day Convention,
Business Day, Reset Determination Date, Interest Determination
Date, Relevant Time and/or the definition of Mid-Swap Floating Leg
Benchmark Rate or Reference Rate applicable to the Notes, and the
method for determining the fallback rate in relation to the Notes,
in order to follow market practice in relation to the Alternative
Benchmark Rate, which changes shall apply to the Notes for all
future Reset Periods or Interest Periods (as applicable) (subject
to the subsequent operation of this Condition 5.9) (and for the
avoidance of doubt, the Agent shall, at the direction and expense
of the Issuer, effect such consequential amendments to the Agency
Agreement and these Conditions as may be required in order to give
effect to this Condition 5.9 and the Agent shall not be liable to
any party for any consequences thereof, save as provided in the
Agency Agreement. No Noteholder consent shall be required in
connection with effecting the Alternative Benchmark Rate,
Alternative Relevant Screen Page or such other changes, including
for the execution of any documents or other steps by the Agent (if
required)); and
(6) the Issuer shall promptly following the determination of any
Alternative Benchmark Rate and Alternative Relevant Screen Page
give notice thereof and of any changes pursuant to sub-paragraph
(5) above to the Agent and the Noteholders.
For the purposes of this Condition 5.9, "Independent Adviser"
means an independent financial institution of international repute
or other independent financial adviser experienced in the
international capital markets, in each case appointed by the Issuer
at its own expense.
6. PAYMENTS
6.1 Method of payment
Subject as provided below:
(a) payments in a Specified Currency other than euro will be
made by credit or transfer to an account in the relevant Specified
Currency maintained by the payee with, or, at the option of the
payee, by a cheque in such Specified Currency drawn on, a bank in
the principal financial centre of the country of such Specified
Currency (which, if the Specified Currency is Australian dollars or
New Zealand dollars, shall be Sydney and Auckland, respectively);
and
(b) payments in euro will be made by credit or transfer to a
euro account (or any other account to which euro may be credited or
transferred) specified by the payee or, at the option of the payee,
by a euro cheque.
Payments will be subject in all cases to any fiscal or other
laws and regulations applicable thereto in the place of payment,
but without prejudice to the provisions of Condition 9
(Prescription).
6.2 Presentation of definitive Notes, Receipts and Coupons
Payments of principal in respect of definitive Notes will be
made in the manner provided in Condition 6.1 (Method of Payment)
above only against presentation and surrender (or, in the case of
part payment of any sum due, endorsement) of definitive Notes, and
payments of interest in respect of definitive Notes will (subject
as provided below) be made as aforesaid only against presentation
and surrender (or, in the case of part payment of any sum due,
endorsement) of Coupons, in each case at the specified office of
any Paying Agent outside the United States (which expression, as
used herein, means the United States of America (including the
States and the District of Columbia and its possessions)).
Payments of instalments of principal (if any) in respect of
definitive Notes, other than the final instalment, will (subject as
provided below) be made in the manner provided in Condition 6.1
(Method of Payment) above only against presentation and surrender
(or, in the case of part payment of any sum due, endorsement) of
the relevant Receipt in accordance with the preceding paragraph.
Payment of the final instalment will be made in the manner provided
in the Condition 6.1 (Method of Payment) above only against
presentation and surrender (or, in the case of part payment of any
sum due, endorsement) of the relevant Note in accordance with the
preceding paragraph. Each Receipt must be presented for payment of
the relevant instalment together with the definitive Note to which
it appertains. Receipts presented without the definitive Note to
which they appertain do not constitute valid obligations of the
Issuer. Upon the date on which any definitive Note becomes due and
repayable, unmatured Receipts (if any) relating thereto (whether or
not attached) shall become void and no payment shall be made in
respect thereof.
Fixed Rate Notes in definitive form should be presented for
payment together with all unmatured Coupons appertaining thereto
(which expression shall for this purpose include Coupons falling to
be issued on exchange of matured Talons), failing which the amount
of any missing unmatured Coupon (or, in the case of payment not
being made in full, the same proportion of the amount of such
missing unmatured Coupon as the sum so paid bears to the sum due)
will be deducted from the sum due for payment. Each amount of
principal so deducted will be paid in the manner mentioned above
against surrender of the relative missing Coupon at any time before
the expiry of 10 years after the Relevant Date (as defined in
Condition 8 (Taxation)) in respect of such principal (whether or
not such Coupon would otherwise have become void under Condition 10
(Events of Default)) or, if later, five years from the date on
which such Coupon would otherwise have become due, but in no event
thereafter.
Upon any Fixed Rate Note in definitive form becoming due and
repayable prior to its Maturity Date, all unmatured Talons (if any)
appertaining thereto will become void and no further Coupons will
be issued in respect thereof.
Upon the date on which any Floating Rate Note, or Long Maturity
Note in definitive form becomes due and repayable, unmatured
Coupons and Talons (if any) relating thereto (whether or not
attached) shall become void and no payment or, as the case may be,
exchange for further Coupons shall be made in respect thereof. A
"Long Maturity Note" is a Fixed Rate Note (other than a Fixed Rate
Note which on issue had a Talon attached) whose nominal amount on
issue is less than the aggregate interest payable thereon provided
that such Note shall cease to be a Long Maturity Note on the
Interest Payment Date on which the aggregate amount of interest
remaining to be paid after that date is less than the nominal
amount of such Note.
If the due date for redemption of any definitive Note is not an
Interest Payment Date, interest (if any) accrued in respect of such
Note from (and including) the preceding Interest Payment Date or,
as the case may be, the Interest Commencement Date shall be payable
only against surrender of the relevant definitive Note.
6.3 Payments in respect of Global Notes
Payments of principal and interest (if any) in respect of Notes
represented by any Global Note will (subject as provided below) be
made in the manner specified above in relation to definitive Notes
or otherwise in the manner specified in the relevant Global Note,
where applicable against presentation or surrender, as the case may
be, of such Global Note at the specified office of any Paying Agent
outside the United States. A record of each payment made,
distinguishing between any payment of principal and any payment of
interest, will be made on such Global Note either by the Paying
Agent to which it was presented or in the records of Euroclear and
Clearstream, Luxembourg, as applicable.
6.4 Payments in respect of VP Systems Notes
Payments of principal and interest in respect of VP Notes will
be made to the persons registered as Noteholders on the fifth
Danish Business Day (or such other day which may become customary
on the Danish bond market in respect of VP Notes, which in respect
of VP Notes denominated in Danish kroner is expected to be the
third Danish Business Day) prior to the Interest Payment Date or
the Maturity Date, as the case may be, all in accordance with the
rules and procedures applied and/or issued by the VP from time to
time.
As used herein:
"Danish Business Day" means a day on which commercial banks and
foreign exchange markets are open for business in Denmark; and
"Luxembourg Business Day" means a day on which commercial banks
and foreign exchange markets are open for business in
Luxembourg.
6.5 General provisions applicable to payments
The holder of a Global Note shall be the only person entitled to
receive payments in respect of Notes represented by such Global
Note and the Issuer will be discharged by payment to, or to the
order of, the holder of such Global Note in respect of each amount
so paid. Each of the persons shown in the records of Euroclear or
Clearstream, Luxembourg as the beneficial holder of a particular
nominal amount of Notes represented by such Global Note must look
solely to Euroclear or Clearstream, Luxembourg, as the case may be,
for his share of each payment so made by the Issuer to, or to the
order of, the holder of such Global Note.
Notwithstanding the foregoing provisions of this Condition 6, if
any amount of principal and/or interest in respect of Notes is
payable in U.S. dollars, such U.S. dollar payments of principal
and/or interest in respect of such Notes will be made at the
specified office of a Paying Agent in the United States if:
(a) the Issuer has appointed Paying Agents with specified
offices outside the United States with the reasonable expectation
that such Paying Agents would be able to make payment in U.S.
dollars at such specified offices outside the United States of the
full amount of principal and interest on the Notes in the manner
provided above when due;
(b) payment of the full amount of such principal and interest at
all such specified offices outside the United States is illegal or
effectively precluded by exchange controls or other similar
restrictions on the full payment or receipt of principal and
interest in U.S. dollars; and
(c) such payment is then permitted under United States law
without involving, in the opinion of the Issuer adverse tax
consequences to the Issuer.
6.6 Payment Day
If the date for payment of any amount in respect of any Note,
Receipt or Coupon is not a Payment Day, the holder thereof shall
not be entitled to payment until the next following Payment Day and
shall not be entitled to further interest or other payment in
respect of such delay. For these purposes, "Payment Day" means any
day which (subject to Condition 10 (Events of Default)) is:
(a) a day on which commercial banks and foreign exchange markets
settle payments and are open for general business (including
dealing in foreign exchange and foreign currency deposits) in:
(i) in the case of Notes in definitive form only, the relevant place of presentation;
(ii) each Additional Financial Centre specified in the applicable Final Terms; and
(b) either (A) in relation to any sum payable in a Specified
Currency other than euro, a day on which commercial banks and
foreign exchange markets settle payments and are open for general
business (including dealing in foreign exchange and foreign
currency deposits) in the principal financial centre of the country
of the relevant Specified Currency (which if the Specified Currency
is Australian dollars or New Zealand dollars shall be Sydney and
Auckland, respectively) or (B) in relation to any sum payable in
euro, a day on which the TARGET2 System is open.
6.7 Interpretation of principal and interest
Any reference in the Conditions to principal in respect of the
Notes shall be deemed to include, as applicable:
(a) any additional amounts which may be payable with respect to
principal under Condition 8 (Taxation);
(b) the Final Redemption Amount of the Notes;
(c) the Early Redemption Amount of the Notes;
(d) Early Redemption Amount (MREL Disqualification Event)
(e) the Optional Redemption Amount(s) (if any) of the Notes;
(f) in relation to Notes redeemable in instalments, the Instalment Amounts;
(g) in relation to Zero Coupon Notes, the Amortised Face Amount
(as defined in Condition 7.7 (Early Redemption Amounts)); and
(h) any premium and any other amounts (other than interest)
which may be payable by the Issuer under or in respect of the
Notes.
Any reference in the Conditions to interest in respect of the
Notes shall be deemed to include, as applicable, any additional
amounts which may be payable with respect to interest under
Condition 8 (Taxation).
7. REDEMPTION AND PURCHASE
7.1 Redemption at maturity
Unless previously redeemed or purchased and cancelled as
specified below, each Note will be redeemed by the Issuer at its
Final Redemption Amount specified in, or determined in the manner
specified in, the applicable Final Terms in the relevant Specified
Currency on the Maturity Date.
7.2 Early redemption of the Subordinated Notes
This Condition 7.2 only applies to Subordinated Notes.
During the first five years after an issue of Subordinated
Notes, such Subordinated Notes may only be redeemed if the
situations described under Conditions 7.2.1 (Early redemption for
tax reasons) and 7.2.2 (Early redemption for regulatory
reclassification reasons) below apply.
7.2.1 Early redemption for tax reasons
Subject to Condition 7.14 (Condition to redemption or purchase
of the Subordinated Notes prior to Maturity Date), the Subordinated
Notes may be redeemed at the option of the Issuer in whole, but not
in part, at any time (if this Subordinated Note is not a Floating
Rate Note,) or on any Interest Payment Date (if this Subordinated
Note is a Floating Rate Note), on giving not less than 30 nor more
than 60 days' notice to the Agent or, in the case of VP Systems
Notes, the VP Issuing Agent and, in accordance with Condition 14
(Notice), the Noteholders (which notice shall be irrevocable),
if:
(a) on the occasion of the next payment due under the
Subordinated Notes, the Issuer has or will become obliged to pay
additional amounts as provided or referred to in Condition 8
(Taxation) as a result of any change in, or amendment to, the laws
or regulations of a Tax Jurisdiction (as defined in Condition 8
(Taxation)), or any material change in the application or official
interpretation of such laws or regulations, which change or
amendment becomes effective on or after the date on which agreement
is reached to issue the first Tranche of the Subordinates
Notes;
(b) it will no longer be able to obtain a full tax deduction for
the purposes of the Danish tax for any payment of interest under
such Notes; and
(c) the Issuer having demonstrated to the satisfaction of the
DFSA that such change in tax treatment of the relevant Subordinated
Notes is material and was not reasonably foreseeable at the time of
issuance of the first Tranche of the Subordinated Notes,
provided that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which the Issuer
would be obliged to pay such additional amounts were a payment in
respect of the Notes then due.
Prior to the publication of any notice of redemption pursuant to
this Condition 7, the Issuer shall deliver to the Agent or, in the
case of VP Systems Notes, the VP Issuing Agent a certificate signed
by two Directors of the Issuer stating that the Issuer is entitled
to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Issuer so
to redeem have occurred, and an opinion of independent legal
advisers of recognised standing to the effect that the Issuer has
or will become obliged to pay such additional amounts as a result
of such change or amendment.
Notes redeemed pursuant to this Condition 7.2.1 will be redeemed
at their Early Redemption Amount referred to in Condition 7.7
(Early Redemption Amounts) below together (if appropriate) with
interest accrued to (but excluding or, in the case of VP Systems
Notes, and including) the date of redemption
7.2.2 Early redemption for regulatory reclassification reasons
Subject to Condition 7.14 (Condition to redemption or purchase
of the Subordinated Notes prior to Maturity Date), the Subordinated
Notes may be redeemed at the option of the Issuer in whole, but not
in part, at any time (if the Subordinated Note is not a Floating
Rate Note) or on any Interest Payment Date (if this Subordinated
Note is a Floating Rate Note) on giving not less than 30 but no
more than 60 days' notice to the Agent or, in the case of VP
Systems Notes, the VP Issuing Agent and, in accordance with
Condition 14 (Notices), the Noteholders (which notice shall be
irrevocable), if a change in the regulatory classification of the
Subordinated Notes results or will result in:
(a) their exclusion, in whole or in part from the regulatory
capital (in the meaning of the CRD IV Regulation) of the Issuer;
or
(b) reclassification, in whole or in part as a lower quality
form of regulatory capital of the Issuer,
and the DFSA considering such change sufficiently certain and
the Issuer having demonstrated to the satisfaction of the DFSA that
such exclusion or regulatory reclassification was not reasonably
foreseeable at the time of issuance of the first tranche of the
Subordinated Notes,
provided that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which such
change or reclassification, as applicable, becomes effective.
Prior to the publication of any notice of redemption pursuant to
this Condition 7, the Issuer shall deliver to the Agent or, in the
case of VP Systems Notes, the VP Issuing Agent a certificate signed
by two Directors of the Issuer stating that the Issuer is entitled
to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Issuer to
so redeem have occurred, and an opinion of independent legal
advisers of recognised standing to the effect that one of the
conditions set out above in paragraphs (a) and (b) have been
satisfied.
Notes redeemed pursuant to this Condition 7.2.2 will be redeemed
at their Early Redemption Amount referred to in Condition 7.7
(Early Redemption Amounts) below together (if appropriate) with
interest accrued to (but excluding or, in the case of VP Systems
Notes, and including) the date of redemption.
7.3 Redemption for tax reasons of the Preferred Senior Notes and Non-Preferred Senior Notes
This Condition 7.23 only applies to Preferred Senior Notes and
Non-Preferred Senior Notes.
Subject to Condition 7.13 (Conditions to redemption, purchase,
substitution or variation of Non-Preferred Senior Notes prior to
Maturity Date) (in the case of Non-Preferred Senior Notes), the
Notes may be redeemed at the option of the Issuer in whole, but not
in part, at any time (if this Note is not a Floating Rate Note,) or
on any Interest Payment Date (if this Note is a Floating Rate
Note), on giving not less than 30 nor more than 60 days' notice to
the Agent or, in the case of VP Systems Notes, the VP Issuing Agent
and, in accordance with Condition 14 (Notices), the Noteholders
(which notice shall be irrevocable), if:
(a) on the occasion of the next payment due under the Notes, the
Issuer has or will become obliged to pay additional amounts as
provided or referred to in Condition 8 (Taxation) as a result of
any change in, or amendment to, the laws or regulations of a Tax
Jurisdiction (as defined in Condition 8 (Taxation)) or any change
in the application or official interpretation of such laws or
regulations, which change or amendment becomes effective on or
after the date on which agreement is reached to issue the first
Tranche of the Notes; and
(b) such obligation cannot be avoided by the Issuer taking
reasonable measures available to it,
provided that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which the Issuer
would be obliged to pay such additional amounts were a payment in
respect of the Senior Notes then due.
Prior to the publication of any notice of redemption pursuant to
this Condition 7, the Issuer shall deliver to the Agent or, in the
case of VP Systems Notes, the VP Issuing Agent a certificate signed
by two Directors of the Issuer stating that the Issuer is entitled
to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Issuer so
to redeem have occurred, and an opinion of independent legal
advisers of recognised standing to the effect that the Issuer has
or will become obliged to pay such additional amounts as a result
of such change or amendment.
Notes redeemed pursuant to this Condition 7.3 will be redeemed
at their Early Redemption Amount referred to in Condition 7.7
(Early Redemption Amounts) below together (if appropriate) with
interest accrued to (but excluding or, in the case of VP Systems
Notes, and including) the date of redemption.
7.4 Redemption upon the occurrence of a MREL Disqualification Event
This Condition 7.4 only applies to Non-Preferred Senior
Notes.
If the MREL Disqualification Event Redemption Option is
specified in the applicable Final Terms as being applicable, any
Series of Non-Preferred Senior Notes may be redeemed at the option
of the Issuer in whole, but not in part, at any time (if such Notes
are not Floating Rate Notes) or on any Interest Payment Date (if
such Notes are Floating Rate Notes), on giving not less than 30 nor
more than 60 days' notice to (in the case of Notes other than VP
Notes) the Principal Paying Agent or (in the case of VP Notes) the
VP Issuing Agent (where the VP Issuing Agent is not the Issuer)
and, in accordance with Condition 14 (Notices), the Noteholders
(which notice shall be irrevocable), upon the occurrence of a MREL
Disqualification Event. Non-Preferred Senior Notes redeemed
pursuant to this Condition 7.4 will be redeemed at the Early
Redemption Amount (MREL Disqualification Event) specified in the
applicable Final Terms together (if appropriate) with interest
accrued to (but excluding, or, in the case of VP Systems Notes, and
including) the date of redemption.
Prior to the publication of any notice of redemption pursuant to
this Condition 7, the Issuer shall deliver to (in the case of Notes
other than VP Notes) the Principal Paying Agent or (in the case of
VP Notes) the VP Issuing Agent (where the VP Issuing Agent is not
the Issuer) to make available at its specified office to the
Noteholders (or, in the case of VP Notes where the Issuer is the VP
Issuing Agent, the Issuer shall make available to the Noteholders
at its registered office) 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.
7.5 Redemption at the option of the Issuer (Issuer Call)
If Issuer Call is specified in the applicable Final Terms, the
Issuer may, having given:
(a) not less than 15 nor more than 30 days' notice to the
Noteholders in accordance with Condition 14 (Notices); and
(b) not less than 15 days before the giving of the notice
referred to in (a) above, notice to the Agent or, in the case of VP
Systems Notes, the VP Issuing Agent;
(which notices shall be irrevocable and shall specify the date
fixed for redemption), redeem all or some only of the Notes then
outstanding on any Optional Redemption Date and at the Optional
Redemption Amount(s) specified in, or determined in the manner
specified in, the applicable Final Terms together, if appropriate,
with interest accrued to (but excluding or, in the case of VP
Systems Notes, and including) the relevant Optional Redemption
Date. Any such redemption must be of a nominal amount not less than
the Minimum Redemption Amount and not more than the Maximum
Redemption Amount, in each case as may be specified in the
applicable Final Terms. In the case of a partial redemption of
Notes, the Notes to be redeemed ("Redeemed Notes") will be selected
individually by lot, in the case of Redeemed Notes represented by
definitive Notes, and in accordance with the rules of Euroclear
and/or Clearstream, Luxembourg, (to be reflected in the records of
Euroclear and Clearstream, Luxembourg as either a pool factor or a
reduction in nominal amount, at their discretion) in the case of
Redeemed Notes represented by a Global Note, and in accordance with
the rules of the VP, in the case of VP Notes, in each case not more
than 30 days prior to the date fixed for redemption (such date of
selection being hereinafter called the "Selection Date"). In the
case of Redeemed Notes represented by definitive Notes, a list of
the serial numbers of such Redeemed Notes will be published in
accordance with Condition 14 (Notices) not less than 15 days prior
to the date fixed for redemption. No exchange of the relevant
Global Note will be permitted during the period from (and
including) the Selection Date to (and including) the date fixed for
redemption pursuant to this Condition 7 and notice to that effect
shall be given by the Issuer to the Noteholders in accordance with
Condition 14 (Notices) at least five days prior to the Selection
Date.
7.6 Redemption at the option of the Noteholders (Investor Put)
If Investor Put is specified in the applicable Final Terms, upon
the holder of any Note giving to the Issuer in accordance with
Condition 14 (Notices) not less than 15 nor more than 30 days'
notice the Issuer will, upon the expiry of such notice, redeem,
subject to, and in accordance with, the terms specified in the
applicable Final Terms, such Note on the Optional Redemption Date
and at the Optional Redemption Amount together, if appropriate,
with interest accrued to (but excluding or, in the case of VP
Systems Notes, and including) the Optional Redemption Date. It may
be that before an Investor Put can be exercised, certain conditions
and/or circumstances will need to be satisfied. Where relevant, the
provisions will be set out in the applicable Final Terms.
To exercise the right to require redemption of this Note the
holder of this Note must, if this Note is in definitive form and
held outside Euroclear and Clearstream, Luxembourg, deliver, at the
specified office of any Paying Agent at any time during normal
business hours of such Paying Agent falling within the notice
period, a duly completed and signed notice of exercise in the form
(for the time being current) obtainable from any specified office
of any Paying Agent (a "Put Notice") and in which the holder must
specify a bank account (or, if payment is required to be made by
cheque, an address) to which payment is to be made under this
Condition 7 accompanied by this Note or evidence satisfactory to
the Paying Agent concerned that this Note will, following delivery
of the Put Notice, be held to its order or under its control. If
this Note is represented by a Global Note or is in definitive form
and held through Euroclear or Clearstream, Luxembourg, to exercise
the right to require redemption of this Note the holder of this
Note must, within the notice period, give notice to the Agent of
such exercise in accordance with the standard procedures of
Euroclear and Clearstream, Luxembourg (which may include notice
being given on his instruction by Euroclear or Clearstream,
Luxembourg or any common depositary or common safekeeper, as the
case may be, for them to the Agent by electronic means) in a form
acceptable to Euroclear and Clearstream, Luxembourg from time to
time and, if this Note is represented by a Global Note, at the same
time present or procure the presentation of the relevant Global
Note to the Agent for notation accordingly.
In the case of VP Systems Notes, a Put Notice will not be
effective against the Issuer before the date on which the relevant
VP Systems Notes have been transferred to the account designated by
the relevant VP Issuing Agent and blocked for further transfer
until the Optional Redemption Date by the VP Issuing Agent. In the
case of VP Systems Notes, the right to require redemption of such
Notes in accordance with this Condition 7.6 must be exercised in
accordance with the rules and procedures of the VP (in the case of
VP Notes) and if there is any inconsistency between the forgoing
and the rules and procedures of the VP, the rules and procedures of
the VP (in the case of VP Notes) shall prevail.
Any Put Notice or other notice given in accordance with the
standard procedures of Euroclear and Clearstream, Luxembourg, the
VP given by a holder of any Note pursuant to this Condition 7.6
shall be irrevocable except where, prior to the due date of
redemption, an Event of Default has occurred and is continuing, in
which event such holder, at its option, may elect by notice to the
Issuer to withdraw the notice given pursuant to this Condition 7.6
and instead to declare such Note forthwith due and payable pursuant
to Condition 10 (Events of Default).
7.7 Early Redemption Amounts
For the purpose of Conditions 7.2 (Early redemption of the
Subordinated Notes) and 7.3 (Redemption for tax reasons of the
Preferred Senior Notes and Non-Preferred Senior Notes) above and
Condition 10 (Events of Default), each Note will be redeemed at its
Early Redemption Amount calculated as follows:
(a) in the case of a Note with a Final Redemption Amount equal
to the Issue Price, at the Final Redemption Amount thereof;
(b) in the case of a Note (other than a Zero Coupon Note but
including an Instalment Note) with a Final Redemption Amount which
is or may be less or greater than the Issue Price or which is
payable in a Specified Currency other than that in which the Note
is denominated, at the amount specified in, or determined in the
manner specified in, the applicable Final Terms or, if no such
amount or manner is so specified in the applicable Final Terms, at
its nominal amount; or
(c) in the case of a Zero Coupon Note, at an amount (the
"Amortised Face Amount") calculated in accordance with the
following formula:
Early Redemption Amount =
where:
RP means the Reference Price;
AY means the Accrual Yield expressed as a decimal; and
(y) is a fraction the numerator of which is equal to the number
of days (calculated on the basis of a 360--day year consisting of
12 months of 30 days each) from (and including or, in the case of
VP Systems Notes, but excluding) the Issue Date of the first
Tranche of the Notes to (but excluding or, in the case of VP
Systems Notes, and including) the date fixed for redemption or (as
the case may be) the date upon which such Note becomes due and
repayable and the denominator of which is 360,
or on such other calculation basis as may be specified in the
applicable Final Terms.
7.8 Instalments
Instalment Notes will be redeemed in the Instalment Amounts and
on the Instalment Dates. In the case of early redemption, the Early
Redemption Amount will be determined pursuant to Condition 7.7
(Early Redemption Amounts).
7.9 Purchases
Subject to Condition 7.13 (Conditions to redemption, purchase,
substitution or variation of Non-Preferred Senior Notes prior to
Maturity Date) (in the case of Non-Preferred Senior Notes) and 7.14
(Condition to redemption or purchase of the Subordinated Notes
prior to Maturity Date) (in the case of Subordinated Notes (if
required)), the Issuer or any subsidiary of the Issuer may at any
time, however, in the case of Subordinated Notes only after five
years from issuance, purchase Notes (provided that, in the case of
definitive Notes, all unmatured Receipts, Coupons and Talons
appertaining thereto are purchased therewith) at any price in the
open market or otherwise. Such Notes may be held, reissued, resold
or, at the option of the Issuer, surrendered to any Paying Agent
for cancellation or, in the case of VP Systems Notes, cancelled by
causing such VP Systems Notes to be deleted from the records of the
VP (in the case of VP Notes).
7.10 Cancellation
All Notes which are redeemed will forthwith be cancelled
(together with all unmatured Receipts, Coupons and Talons attached
thereto or surrendered therewith at the time of redemption). All
Notes so cancelled and any Notes purchased and cancelled pursuant
to Condition 7.9 (Purchases) above (together with all unmatured
Receipts, Coupons and Talons cancelled therewith) shall (in the
case of Bearer Notes) be forwarded to the Agent and cannot (in any
case) be reissued or resold.
7.11 Late payment on Zero Coupon Notes
If the amount payable in respect of any Zero Coupon Note upon
redemption of such Zero Coupon Note pursuant to Conditions 7.2
(Early redemption of the Subordinated Notes), 7.3 (Redemption for
tax reasons of the Preferred Senior Notes and Non-Preferred Senior
Notes), 7.4 (Redemption upon the occurrence of a MREL
Disqualification Event), 7.5 (Redemption at the option of the
Issuer (Issuer Call)) or 7.6 (Redemption at the option of the
Noteholders (Investor Put)) above or upon its becoming due and
repayable as provided in Condition 10 (Events of Default) is
improperly withheld or refused, the amount due and repayable in
respect of such Zero Coupon Note shall be the amount calculated as
provided in Condition 7.7(c) above as though the references therein
to the date fixed for the redemption or the date upon which such
Zero Coupon Note becomes due and payable were replaced by
references to:
(a) in the case of Bearer Notes, the date which is the earlier of:
(i) the date on which all amounts due in respect of such Zero
Coupon Note have been paid; and
(ii) five days after the date on which the full amount of the
moneys payable in respect of such Zero Coupon Notes has been
received by the Agent and notice to that effect has been given to
the Noteholders in accordance with Condition 14 (Notices); or
(b) in the case of VP Systems Notes, the date on which holders
of the VP Systems Notes received the full amount of such
payment.
7.12 Substitution and variation of Non-Preferred Senior Notes
If the MREL Disqualification Event Substitution/Variation Option
is specified in the applicable Final Terms as being applicable,
subject to Condition 7.13 (Conditions to redemption, purchase,
substitution or variation of Non-Preferred Senior Notes prior to
Maturity Date) and having given no less than 30 nor more than 60
days' notice to (in the case of Notes other than VP Notes) the
Principal Paying Agent or (in the case of VP Notes) the VP Agent
(where the VP Agent is not the Issuer) and, in accordance with
Condition 14 (Notices), the Noteholders (which notice shall be
irrevocable), if a MREL Disqualification Event has occurred and is
continuing, the Issuer may substitute all (but not some only) of
the Non-Preferred Senior Notes or vary the terms of all (but not
some only) of the Non-Preferred Senior Notes, without any
requirement for the consent or approval of the Noteholders, so that
they become or remain Qualifying Non-Preferred Senior Notes.
Any such notice shall specify the relevant details of the manner
in which such substitution or variation shall take effect and where
the Noteholders can inspect or obtain copies of the new terms and
conditions of the Qualifying Non-Preferred Senior Notes. Such
substitution or variation will be effected without any cost or
charge to the Noteholders.
7.13 Conditions to redemption, purchase, substitution or
variation of Non-Preferred Senior Notes prior to Maturity Date
Non-Preferred Senior Notes may only be redeemed, purchased,
substituted or varied pursuant to this Condition 7 if (and, in each
case, to the extent then required by the relevant rules) the Issuer
has notified the DFSA or other relevant regulator of, or the DFSA
or other relevant regulator has granted permission for, or, as the
case may be, not objected to, such redemption, purchase,
substitution or variation (as applicable).
7.14 Condition to redemption or purchase of the Subordinated Notes prior to Maturity Date
The Issuer will not redeem any Subordinated Notes pursuant to
Condition 7.2 (Early redemption of the Subordinated Notes) or
Condition 7.5 (Redemption at the option of the Issuer (Issuer
Call)), nor agree to any modification of these Conditions pursuant
to Condition 15 (Meetings of Noteholders and Modification) in
relation to any Subordinated Notes, without first consulting with
and obtaining the prior consent of the DFSA.
7.15 Definitions
In the Conditions, the following expressions have the following
meanings:
"Applicable MREL Regulations" means, at any time, the laws,
regulations, requirements, guidelines and policies then in effect
in the Kingdom of Denmark giving effect to any MREL Requirement or
any successor regulations then applicable to the Issuer, including,
without limitation to the generality of the foregoing, CRD IV, the
BRRD and those regulations, requirements, guidelines and policies
giving effect to any MREL Requirement or any successor regulations
then in effect (whether or not such requirements, guidelines or
policies have the force of law and whether or not they are applied
generally or specifically to the Issuer);
"DFSA" means the Danish Financial Supervisory Authority or any
successor or replacement thereto or such other authority in Denmark
having primary responsibility for the prudential oversight and
supervision of the Issuer.
"MREL Disqualification Event" means, in respect of a Series of
Non-Preferred Senior Notes, the determination by the Issuer that,
as a result of:
(a) the implementation of any Applicable MREL Regulations on or
after the date of issue of the last Tranche of such Series; or
(b) a change in any Applicable MREL Regulations becoming
effective on or after the date of issue of the last Tranche of such
Series,
all or part of the outstanding principal amounts of such Series
will be excluded from the "eligible liabilities" (or any equivalent
or successor term) available to meet any MREL Requirement (however
called or defined by then Applicable MREL Regulations) if the
Issuer is then or, as the case may be, will be subject to such MREL
Requirement, provided that a MREL Disqualification Event shall not
occur where such exclusion is or will be caused by (1) the
remaining maturity of such Notes being less than any period
prescribed by any applicable eligibility criteria under the
Applicable MREL Regulations, or (2) any applicable limits on the
amount of "eligible liabilities" (or any equivalent or successor
term) permitted or allowed to meet any MREL Requirement(s) being
exceeded;
"MREL Requirement" means the minimum requirement for own funds
and eligible liabilities, in each case which is or, as the case may
be, will be, applicable to the Issuer; and
"Qualifying Non-Preferred Senior Notes" means, in respect of a
Series of Non-Preferred Senior Notes, at any time, any securities
(other than such Notes) issued or guaranteed by the Issuer
that:
(a) contain terms which comply with the then current
requirements for "eligible liabilities" (or any equivalent or
successor term) provided for in the Applicable MREL Regulations in
relation to the relevant MREL Requirement(s) (which, for the
avoidance of doubt, may result in the relevant securities not
including, or restricting for a period of time the application of,
one or more of the early redemption rights which are included in
the relevant Notes);
(b) carry the same rate of interest as the relevant Notes prior
to the relevant substitution or variation pursuant to Condition
7.12 (Substitution and variation of Non-Preferred Senior
Notes);
(c) have the same Specified Denomination(s) and outstanding
principal amounts as the relevant Notes prior to the relevant
substitution or variation pursuant to Condition 7.12 (Substitution
and variation of Non-Preferred Senior Notes);
(d) have the same Maturity Date and the same Interest Payment
Dates as the relevant Notes prior to the relevant substitution or
variation pursuant to Condition 7.12 (Substitution and variation of
Non-Preferred Senior Notes);
(e) have at least the same ranking as the relevant Notes prior
to the relevant substitution or variation pursuant to Condition
7.12 (Substitution and variation of Non-Preferred Senior
Notes);
(f) shall not, immediately following the relevant substitution
or variation pursuant to Condition 7.12 (Substitution and variation
of Non-Preferred Senior Notes) be subject to a MREL
Disqualification Event;
(g) are assigned (or maintain) at least the same solicited
credit ratings as were assigned to the Notes immediately prior to
the relevant substitution or variation pursuant to Condition 7.12
(Substitution and variation of Non-Preferred Senior Notes) unless,
in respect of each such solicited credit rating, any downgrade of
such solicited credit rating compared to the equivalent solicited
credit rating that was assigned to the Notes immediately prior to
the relevant substitution or variation pursuant to Condition 7.12
(Substitution and variation of Non-Preferred Senior Notes) is
solely attributable to the effectiveness and enforceability of
Condition 19 (Recognition of the Danish Bail-In Power);
(h) other than in respect of the effectiveness and
enforceability of Condition 19 (Recognition of the Danish Bail-In
Power), have terms not materially less favourable to the
Noteholders than the terms of the relevant Notes, as determined by
the Issuer in its sole and absolute discretion, and provided that
the Issuer shall have delivered a certificate to that effect signed
by two of its directors to (in the case of Notes other than VP
Notes) the Principal Paying Agent or (in the case of VP Notes) the
VP Issuing Agent (where the VP Agent is not the Issuer) not less
than 5 Business Days prior to (a) in the case of a substitution of
the relevant Notes pursuant to Condition 7.12 (Substitution and
variation of Non-Preferred Senior Notes), the issue date of the
relevant securities or (b) in the case of a variation of the
relevant Notes pursuant to Condition 7.12 (Substitution and
variation of Non-Preferred Senior Notes), the date such variation
becomes effective; and
(i) if (A) the relevant Notes were listed or admitted to trading
on a regulated market for the purposes of Directive 2014/65/EU (a
Regulated Market) immediately prior to the relevant substitution or
variation, are listed or admitted to trading on a Regulated Market
or (B) the relevant Notes were listed or admitted to trading on a
recognised stock exchange other than a Regulated Market immediately
prior to the relevant substitution or variation, are listed or
admitted to trading on any recognised stock exchange (including,
without limitation, a Regulated Market), in either case as selected
by the Issuer.
8. TAXATION
8.1 Taxation provisions applicable to Bearer Notes
All payments of principal and interest in respect of the Bearer
Notes, Receipts and Coupons by the Issuer will be made free and
clear of, and without withholding or deduction for or on account of
any present or future taxes or duties of whatever nature imposed or
levied by or on behalf of any Tax Jurisdiction unless such
withholding or deduction is required by law.
In such event, that such withholding or deduction is required by
law, the Issuer will pay such additional amounts as shall be
necessary in order that the net amounts received by the holders of
the Bearer Notes, Receipts or Coupons after such withholding or
deduction shall be equal to the respective amounts of principal and
interest which would otherwise have been receivable in respect of
the Bearer Notes, Receipts or Coupons, as the case may be, in the
absence of such withholding or deduction; except that no such
additional amounts shall be payable with respect to any Bearer
Note, Receipt or Coupon:
(a) presented for payment in The Kingdom of Denmark; and/or
(b) presented for payment to, or to a third party on behalf of,
holder of which is liable for such taxes, duties, assessments or
governmental charges in respect of such Note, Receipt or Coupon by
reason of his having some connection with a Tax Jurisdiction other
than the mere holding of such Note, Receipt or Coupon; or
(c) presented for payment more than thirty (30) days after the
Relevant Date (as defined below) except to the extent that the
holder thereof would have been entitled to an additional amount on
presenting the same payment on such thirtieth day assuming that day
to have been a Payment Day (as defined in Condition 6.6 (Payment
Day)); and/or
(d) where such withholding or deduction is imposed on a payment
to an individual and is required to be made pursuant to European
Council Directive 2003/48/EC on the taxation of savings income or
any law implementing or complying with, or introduced in order to
conform to, such Directive; and/or
(e) presented for payment by or on behalf of a holder who would
have been able to avoid such withholding or deduction by presenting
the relevant Note, Receipt or Coupon to another Paying Agent in a
Member State of the European Union.
(f) withholding as a consequence of the FATCA rules.
As used herein:
(i) "Tax Jurisdiction" means The Kingdom of Denmark or any
political subdivision or any authority thereof or therein having
power to tax; and
(ii) the "Relevant Date" means the date on which such payment
first becomes due, except that, if the full amount of the moneys
payable has not been duly received by the Agent on or prior to such
due date, it means the date on which, the full amount of such
moneys having been so received, notice to that effect is duly given
to the Noteholders in accordance with Condition 14 (Notices).
8.2 Taxation provisions applicable to VP Systems Notes
All payments of principal and interest in respect of the VP
Systems Notes by the Issuer will be made free and clear of, and
without withholding or deduction for or on account of any future or
present taxes, duties, assessments or governmental charges of
whatever nature imposed or levied by or on behalf of any Tax
Jurisdiction unless such withholding or deduction is required by
law. In such event that such withholding tax or deduction is
required by law the Issuer will pay such additional amounts as
shall be necessary in order that the net amounts received by the
holders of VP Systems Notes after such withholding or deduction
shall equal the respective amounts of principal and interest which
would otherwise have been receivable in respect of the VP Systems
Notes in the absence of such withholding or deduction, except that
no such additional amounts shall be payable with respect to any VP
Systems Note:
(a) presented for payment in The Kingdom of Denmark; and/or
(b) presented for payment to, or to a third party on behalf of,
a holder of which is liable for such taxes, or duties, assessments
or governmental charges in respect of such VP Systems Note by
reason of his having some connection with a Tax Jurisdiction other
than the mere holding of such VP Systems Note; and/or
(c) presented for payment more than thirty (30) days after the
Relevant Date (as defined below) except to the extent that the
holder thereof would have been entitled to an additional amount on
presenting the same payment on such thirtieth day assuming that day
to have been a Payment Day (as defined in Condition 6.6 (Payment
Day)); and/or
(d) where such withholding or deduction is imposed on a payment
to an individual and is required to be made pursuant to European
Council Directive 2003/48/EC on the taxation of savings income in
the form of interest payments or any law implementing or complying
with, or introduced in order to conform to, such Directive;
and/or
(e) presented for payment by or on behalf of a holder who would
have been able to avoid such withholding or deduction by presenting
the relevant VP Systems Note to another Paying Agent in a Member
State of the European Union.
In the case of Non-Preferred Senior Notes and Subordinated Notes
only, and notwithstanding the foregoing, the obligation to pay
additional amounts by the Issuer will be limited to payments of
interest only.
As used herein:
(i) "Tax Jurisdiction" means The Kingdom of Denmark or any
political subdivision or any authority thereof or therein having
power to tax; and
(ii) the "Relevant Date" means the date on which such payment
first becomes due, except that, if the full amount of the moneys
payable has not been duly received by the Agent or, in the case of
VP Systems Notes, the holders of the VP Systems Notes, as the case
may be, on or prior to such due date, it means the date on which,
the full amount of such moneys having been so received, notice to
that effect is duly given to the Noteholders in accordance with
Condition 14 (Notices).
9. PRESCRIPTION
The Bearer Notes, Receipts and Coupons shall become void unless
claims in respect of principal and/or interest are made within a
period of 10 years (in the case of principal) and five years (in
the case of interest) after the Relevant Date (as defined in
Condition 8 (Taxation)) therefor.
There shall not be included in any Coupon sheet issued on
exchange of a Talon any Coupon the claim for payment in respect of
which would be void pursuant to this Condition 9 or Condition 6.2
(Presentation of definitive Notes, Receipts and Coupons) or any
Talon which would be void pursuant to Condition 6.2 (Presentation
of definitive Notes, Receipts and Coupons).
In the case of VP Systems Notes, claims against the Issuer for
the payment of principal and/or interest payable in respect of the
VP Systems Notes shall become void unless made within a period of
10 years (in the case of principal) and three years (in the case of
interest) after the Relevant Date therefor and thereafter any
principal and/or interest in respect of such VP Systems Notes shall
be forfeited and revert to the Issuer.
10. EVENTS OF DEFAULT
10.1 Events of Default relating to Preferred Senior Notes
This Condition 10.1 only applies to Preferred Senior Notes. If
any one or more of the following events (each an "Event of
Default") shall occur and be continuing:
(a) if default is made in the payment of any principal or
interest due in respect of the Notes or any of them and the default
continues for a period of three Banking Days; or
(b) if the Issuer fails to perform or observe any of its other
obligations under the Conditions and (except in any case where the
failure is incapable of remedy when no such continuation or notice
as is hereinafter mentioned will be required) the failure continues
for the period of 14 days next following the service by a
Noteholder on the Issuer of a notice requiring the same to be
remedied; or
(c) if (i) any Indebtedness for Borrowed Money (as defined
below) of the Issuer or any of its Principal Subsidiaries becomes
due and repayable prematurely by reason of an event of default
(however described); (ii) the Issuer or any of its Principal
Subsidiaries fails to make any payment in respect of any
Indebtedness for Borrowed Money on the due date for payment; (iii)
any security given by the Issuer or any of its Principal
Subsidiaries for any Indebtedness for Borrowed Money becomes
enforceable; or (iv) default is made by the Issuer or any of its
Principal Subsidiaries in making any payment due under any
guarantee and/or indemnity given by it in relation to any
Indebtedness for Borrowed Money of any other person, provided that
no event described in this sub--paragraph 10.1.(c) shall constitute
an Event of Default unless the relevant amount of Indebtedness for
Borrowed Money or other relative liability due and unpaid, either
alone or when aggregated (without duplication) with other amounts
of Indebtedness for Borrowed Money and/or other liabilities due and
unpaid relative to all (if any) other events specified in (i) to
(iv) above which have occurred and are continuing, amounts to at
least EUR15,000,000 (or its equivalent in any other currency);
or
(d) if any order is made by any competent court or resolution
passed for the winding up or dissolution of the Issuer or any of
its Principal Subsidiaries, save for the purposes of reorganisation
on terms previously approved by an Extraordinary Resolution (as
defined in the Agency Agreement or the VP Issuing Agency Agreement,
as applicable); or
(e) if the Issuer or any of its Principal Subsidiaries ceases or
threatens to cease to carry on the whole or substantially all of
its business, save for the purposes of reorganisation on terms
previously approved by an Extraordinary Resolution (as defined in
the Agency Agreement or the VP Issuing Agency Agreement, as
applicable), or the Issuer or any of its Principal Subsidiaries
stops or threatens to stop payment of, or is unable to, or admits
inability to, pay, its debts (or any class of its debts) as they
fall due, or is deemed unable to pay its debts pursuant to or for
the purposes of any applicable law, or is adjudicated or found
bankrupt or insolvent; or
(f) if (A) proceedings are initiated against the Issuer or any
of its Principal Subsidiaries under any applicable liquidation,
insolvency, composition, reorganisation or other similar laws, or
an application is made (or documents filed with a court) for the
appointment of an administrative or other receiver, manager,
administrator or other similar official, or an administrative or
other receiver, manager, administrator or other similar official is
appointed, in relation to the Issuer or any of its Principal
Subsidiaries or, as the case may be, in relation to the whole or a
substantial part of the undertaking or assets of any of them, or an
encumbrancer takes possession of the whole or a substantial part of
the undertaking or assets of any of them, or a distress, execution,
attachment, sequestration or other process is levied, enforced
upon, sued out or put in force against the whole or a substantial
part of the undertaking or assets of any of them and (B) in any
case (other than the appointment of an administrator) is not
discharged within 14 days; or
(g) if the Issuer or any of its Principal Subsidiaries initiates
or consents to judicial proceedings relating to itself under any
applicable liquidation, insolvency, composition, reorganisation or
other similar laws (including the obtaining of a moratorium) or
makes a conveyance or assignment for the benefit of, or enters into
any composition or other arrangement with, its creditors generally
(or any class of its creditors) or any meeting is convened to
consider a proposal for an arrangement or composition with its
creditors generally (or any class of its creditors),
then any holder of a Note may, by written notice to the Issuer
at the specified office of the Agent (in the case of Bearer Notes)
or the VP Issuing Agent (in the case of VP Systems Notes),
effective upon the date of receipt thereof by the Agent (in the
case of Bearer Notes) or the VP Issuing Agent (in the case of VP
Systems Notes), declare any Note held by it to be forthwith due and
payable whereupon the same shall become forthwith due and payable
at its Early Redemption Amount, together with accrued interest (if
any) to the date of repayment, without presentment, demand, protest
or other notice of any kind.
10.2 Events of Default relating to Non-Preferred Senior Notes and Subordinated Notes
This Condition 10.2 only applies to Non-Preferred Senior Notes
and Subordinated Notes:
(a) Any one or more of the following events shall constitute an "Event of Default":
(i) There is a failure to make payment of any principal or any
interest in respect of the Notes within three Banking Days of the
relevant due date; or
(ii) an order is made or an effective resolution is passed for
the bankruptcy or liquidation of the Issuer.
(b)
(i) If an Event of Default shall have occurred and be
continuing, any Noteholder may, at its discretion and without
further notice, institute such proceedings against the Issuer as it
may think fit (other than filing a petition for bankruptcy) to
enforce its rights provided that the Issuer shall not by virtue of
the institution of any such proceedings be obliged to pay any sum
or sums sooner than the same would otherwise have been payable,
except as set forth in (ii) below.
(ii) If an order is made or an effective resolution is passed
for the bankruptcy or liquidation of the Issuer, then all the
Subordinated Notes shall become immediately due and payable at the
request of any Noteholder at their then outstanding principal
amount together with interest accrued to such date.
10.3 Definitions
In the Conditions, the following expressions have the following
meanings:
"Principal Subsidiary" means at any time a Subsidiary of the
Issuer:
(a) whose gross revenues (consolidated in the case of a
Subsidiary which itself has Subsidiaries) or whose total assets
(consolidated in the case of a Subsidiary which itself has
Subsidiaries) represent in each case (or, in the case of a
Subsidiary acquired after the end of the financial period to which
the then latest audited consolidated accounts of the Issuer and its
Subsidiaries relate, are equal to) not less than five per cent. of
the consolidated gross revenues of the Issuer, or, as the case may
be, consolidated total assets, of the Issuer and its Subsidiaries
taken as a whole, all as calculated respectively by reference to
the then latest audited accounts (consolidated or, as the case may
be, unconsolidated) of such Subsidiary and the then latest audited
consolidated accounts of the Issuer and its Subsidiaries, provided
that in the case of a Subsidiary of the Issuer acquired after the
end of the financial period to which the then latest audited
consolidated accounts of the Issuer and its Subsidiaries relate,
the reference to the then latest audited consolidated accounts of
the Issuer and its Subsidiaries for the purposes of the calculation
above shall, until consolidated accounts for the financial period
in which the acquisition is made have been prepared and audited as
aforesaid, be deemed to be a reference to such first--mentioned
accounts as if such Subsidiary had been shown in such accounts by
reference to its then latest relevant audited accounts, adjusted as
deemed appropriate by the Issuer;
(b) to which is transferred the whole or substantially the whole
of the undertaking and assets of a Subsidiary of the Issuer which
immediately prior to such transfer is a Principal Subsidiary,
provided that the transferor Subsidiary shall upon such transfer
forthwith cease to be a Principal Subsidiary and the transferee
Subsidiary shall cease to be a Principal Subsidiary pursuant to
this subparagraph (b) on the date on which the consolidated
accounts of the Issuer and its Subsidiaries for the financial
period current at the date of such transfer have been prepared and
audited as aforesaid but so that such transferor Subsidiary or such
transferee Subsidiary may be a Principal Subsidiary on or
(c) at any time after the date on which such consolidated
accounts have been prepared and audited as aforesaid by virtue of
the provisions of subparagraph (a) above or, prior to or after such
date, by virtue of any other applicable provision of this
definition; or
(d) to which is transferred an undertaking or assets which,
taken together with the undertaking or assets of the transferee
Subsidiary, generated (or, in the case of the transferee Subsidiary
being acquired after the end of the financial period to which the
then latest audited consolidated accounts of the Issuer and its
Subsidiaries relate, generate gross revenues equal to) not less
than five per cent. of the consolidated gross revenues of the
Issuer, or represent (or, in the case aforesaid, are equal to) not
less than five per cent. of the consolidated total assets of the
Issuer and its Subsidiaries taken as a whole, all as calculated as
referred to in subparagraph (a) above, provided that the transferor
Subsidiary (if a Principal Subsidiary) shall upon such transfer
forthwith cease to be a Principal Subsidiary unless immediately
following such transfer its undertaking and assets generate (or, in
the case aforesaid, generate gross revenues equal to) not less than
five per cent. of the consolidated gross revenues of the Issuer, or
its assets represent (or, in the case aforesaid, are equal to) not
less than five per cent. of the consolidated total assets of the
Issuer and its Subsidiaries taken as a whole, all as calculated as
referred to in subparagraph (a) above, and the transferee
Subsidiary shall cease to be a Principal Subsidiary pursuant to
this subparagraph (c) on the date on which the consolidated
accounts of the Issuer and its Subsidiaries for the financial
period current at the date of such transfer have been prepared and
audited but so that such transferor Subsidiary or such transferee
Subsidiary may be a Principal Subsidiary on or at any time after
the date on which such consolidated accounts have been prepared and
audited as aforesaid by virtue of the provisions of subparagraph
(a) above or, prior to or after such date, by virtue of any other
applicable provision of this definition,
(e) all as more particularly defined in the Agency Agreement.
A report by two Directors of the Issuer that in their opinion a
Subsidiary of the Issuer is or is not or was or was not at any
particular time or throughout any specified period a Principal
Subsidiary shall, in the absence of manifest error, be conclusive
and binding on all parties.
"Banking Day" means a day a day which is both:
(a) a day on which commercial banks and foreign exchange markets
settle payments and are open for general business (including
dealing in foreign exchange and foreign currency deposits) in
Copenhagen; and
(b) either (i) in relation to any sum payable in a Specified
Currency other than euro, a day on which commercial banks and
foreign exchange markets settle payments and are open for general
business (including dealing in foreign exchange and foreign
currency deposits) in the principal financial centre of the country
of the relevant Specified Currency (which if the Specified Currency
is Australian dollars or New Zealand dollars shall be Sydney or
Auckland, respectively) or (ii) in relation to any sum payable in
euro, a day on which the TARGET2 System is open.
"Indebtedness for Borrowed Money" means any indebtedness
(whether being principal, premium, interest or other amounts) for
or in respect of any notes, bonds, debentures, debenture stock,
loan stock or other securities or any borrowed money or any
liability under or in respect of any acceptance or acceptance
credit.
"Subsidiary" has the meaning given to that term in Section 5(3)
of Consolidated Act No. 1089 of 14 September 2015 on public and
private limited liability companies of the Kingdom of Denmark, as
amended from time to time.
11. REPLACEMENT OF NOTES, RECEIPTS, COUPONS AND TALONS
Should any Note, Receipt, Coupon or Talon be lost, stolen,
mutilated, defaced or destroyed, it may be replaced at the
specified office of the Agent upon payment by the claimant of such
costs and expenses as may be incurred in connection therewith and
on such terms as to evidence and indemnity as the Issuer may
reasonably require. Mutilated or defaced Notes, Receipts, Coupons
or Talons must be surrendered before replacements will be
issued.
12. PAYING AGENTS
12.1 Bearer Notes
The following shall only apply to Bearer Notes:
The names of the initial Paying Agents and their initial
specified offices are set out below.
The Issuer is entitled to vary or terminate the appointment of
any Paying Agent and/or appoint additional or other Paying Agents
and/or approve any change in the specified office through which any
Paying Agent acts, provided that:
(a) there will at all times be an Agent;
(b) so long as the Notes are listed on any stock exchange or
admitted to listing by any other relevant authority, there will at
all times be a Paying Agent with a specified office in such place
as may be required by the rules and regulations of the relevant
stock exchange or other relevant authority;
(c) there will at all times be a Paying Agent in a Member State
of the European Union that will not be obliged to withhold or
deduct tax pursuant to European Council Directive 2003/48/EC or any
law implementing or complying with, or introduced in order to
conform to, such Directive; and
(d) there will at all times be a Paying Agent in a jurisdiction
within continental Europe, other than the jurisdiction in which the
Issuer is incorporated.
In addition, the Issuer shall forthwith appoint a Paying Agent
having a specified office in New York City in the circumstances
described in Condition 6.5 (General provisions applicable to
payments). Any variation, termination, appointment or change shall
only take effect (other than in the case of insolvency, when it
shall be of immediate effect) after not less than 30 nor more than
45 days' prior notice thereof shall have been given to the
Noteholders in accordance with Condition 14 (Notices).
In acting under the Agency Agreement, the Paying Agents act
solely as agents of the Issuer and do not assume any obligation to,
or relationship of agency or trust with, any Noteholders or
Couponholders. The Agency Agreement contains provisions permitting
any entity into which any Paying Agent is merged or converted or
with which it is consolidated or to which it transfers all or
substantially all of its assets to become the successor paying
agent.
12.2 VP Systems Notes
The following shall only apply to VP Systems Notes:
In relation to VP Systems Notes, the Issuer will, in accordance
with the rules and procedures applicable to and/or issued by VP (in
the case of VP Notes) from time to time, appoint (i) VP as the
central securities depositary in the case of VP Notes, and (ii) a
VP Issuing Agent. The VP Issuing Agent will be specified in the
relevant Final Terms.
The Issuer is entitled to vary or terminate the appointment of
VP or the VP Issuing Agent, as the case may be, provided that the
Issuer will appoint another central securities depositary or
issuing agent, and in respect of the appointment of another VP
Issuing Agent in accordance with the rules and procedures
applicable to and/or issued by the VP (in the case of VP Notes)
from time to time. The central securities depository and the VP
Issuing Agent act solely as agents of the Issuer and do not assume
any obligation to, or relationship of agency or trust with, any
Noteholders. Any variation, termination, appointment or change
shall only take effect (other than in the case of insolvency, when
it shall be of immediate effect) after not less than 30 nor more
than 45 days' prior notice thereof shall have been given to the
Noteholders in accordance with Condition 14 (Notices).
13. EXCHANGE OF TALONS
On and after the Interest Payment Date on which the final Coupon
comprised in any Coupon sheet matures, the Talon (if any) forming
part of such Coupon sheet may be surrendered at the specified
office of the Agent or any other Paying Agent in exchange for a
further Coupon sheet including (if such further Coupon sheet does
not include Coupons to (and including) the final date for the
payment of interest due in respect of the Note to which it
appertains) a further Talon, subject to the provisions of Condition
9 (Prescription).
14. NOTICES
All notices regarding the Notes will be deemed to be validly
given if published in a leading English language daily newspaper of
general circulation in London. It is expected that any such
publication in a newspaper will be made in the Financial Times in
London. The Issuer shall also ensure that notices are duly
published in a manner which complies with the rules of any stock
exchange or other relevant authority on which the Notes are for the
time being listed or by which they have been admitted to trading.
Any such notice will be deemed to have been given on the date of
the first publication or, where required to be published in more
than one newspaper, on the date of the first publication in all
required newspapers.
Until such time as any definitive Notes are issued, there may,
so long as any Global Notes representing the Notes are held in
their entirety on behalf of Euroclear and/or Clearstream,
Luxembourg, be substituted for such publication in such
newspaper(s) the delivery of the relevant notice to Euroclear
and/or Clearstream, Luxembourg for communication by them to the
holders of the Notes and, in addition, for so long as any Notes are
listed on a stock exchange or are admitted to trading by another
relevant authority and the rules of that stock exchange or relevant
authority so require, such notice will be published in a daily
newspaper of general circulation in the place or places required by
those rules. Any such notice shall be deemed to have been given to
the holders of the Notes on the second day after the day on which
the said notice was given to Euroclear and/or Clearstream,
Luxembourg.
Notwithstanding the above, all notices to holders of VP Systems
Notes will be valid if given (i) in accordance with the procedures
of the VP (in the case of VP Notes) and (ii) in a manner which
complies with the rules of any stock exchange or other relevant
authority on which the relevant VP Systems Notes are for the time
being listed or by which they have been admitted to trading (and
will be deemed to have been given to the holders of VP Systems
Notes on the second day after the day on which the said notice was
given in such manner.
Notices to be given by any Noteholder in respect of Bearer Notes
shall be in writing and given by lodging the same, together (in the
case of any Note in definitive form) with the relative Note or
Notes, with the Agent. Whilst any of the Notes are represented by a
Global Note, such notice may be given by any holder of a Note to
the Agent through Euroclear and/or Clearstream, Luxembourg, as the
case may be, in such manner as the Agent and Euroclear and/or
Clearstream, Luxembourg, as the case may be, may approve for this
purpose.
Notices to be given by any holder of VP Systems Notes shall be
in writing and given by lodging the same with the VP Issuing
Agent.
15. MEETINGS OF NOTEHOLDERS AND MODIFICATION
15.1 Holders of Bearer Notes
The Agency Agreement contains provisions for convening meetings
of the Noteholders to consider any matter affecting their
interests, including the sanctioning by Extraordinary Resolution of
a modification of the Notes, the Receipts, the Coupons or any of
the provisions of the Agency Agreement. Such a meeting may be
convened by the Issuer and shall be convened by the Issuer if
required in writing by Noteholders holding not less than five per
cent. in nominal amount of the Notes for the time being remaining
outstanding. The quorum at any such meeting for passing an
Extraordinary Resolution is one or more persons holding or
representing not less than 50 % in nominal amount of the Notes for
the time being outstanding, or at any adjourned meeting one or more
persons being or representing Noteholders whatever the nominal
amount of the Notes so held or represented, except that at any
meeting the business of which includes the modification of certain
provisions of the Notes, the Receipts or the Coupons (including
modifying the date of maturity of the Notes or any date for payment
of interest thereon, reducing or cancelling the amount of principal
or the rate of interest payable in respect of the Notes or altering
the currency of payment of the Notes, the Receipts or the Coupons),
the quorum shall be one or more persons holding or representing not
less than two--thirds in nominal amount of the Notes for the time
being outstanding, or at any adjourned such meeting one or more
persons holding or representing not less than one--third in nominal
amount of the Notes for the time being outstanding. An
Extraordinary Resolution passed at any meeting of the Noteholders
shall be binding on all the Noteholders, whether or not they are
present at the meeting, and on all Receiptholders and
Couponholders.
The Agent and the Issuer may agree, without the consent of the
Noteholders, Receiptholders or Couponholders, to:
(a) any modification (except such modification in respect of
which an increased quorum is required as mentioned above) of the
Notes, the Receipts, the Coupons or the Agency Agreement which is
not prejudicial to the interests of the Noteholders; or
(b) any modification of the Notes, the Receipts, the Coupons or
the Agency Agreement which is of a formal, minor or technical
nature or is made to correct a manifest error or to comply with
mandatory provisions of the law.
Any such modification shall be binding on the Noteholders, the
Receiptholders and the Couponholders and any such modification
shall be notified to the Noteholders in accordance with Condition
14 (Notices) as soon as practicable thereafter.
15.2 Holders of VP Systems Notes
The VP Issuing Agency Agreement will contain provisions for
convening meetings of the holders of VP Systems Notes to consider
any matter affecting their interests, including sanctioning by a
majority of votes (as more fully set out in the VP Issuing Agency
Agreement) a modification of the VP Systems Notes or any of the
provisions of the VP Issuing Agency Agreement (or, in certain
cases, sanctioning by a majority of two thirds of votes). Such a
meeting may be convened by the Issuer, the VP Issuing Agent or the
holders of VP Systems Notes holding not less than 10 per cent. of
the Voting VP Systems Notes. For the purpose of this Condition 15,
"Voting VP Systems Notes" means the aggregate nominal amount of the
total number of VP Systems Notes not redeemed or otherwise
deregistered in the VP (in the case of VP Notes), less the VP
Systems Notes owned by the Issuer, any party who has decisive
influence over the Issuer or any party over whom the Issuer has
decisive influence.
The quorum at a meeting for passing a resolution is one or more
persons holding at least one half of the Voting VP Systems Notes or
at any adjourned meeting one or more persons being or representing
holders of Voting VP Systems Notes whatever the nominal amount of
the VP Systems Notes so held or represented, except that at any
meeting the business of which includes the modification of certain
provisions of the VP Systems Notes, the VP Issuing Agency Agreement
(including modifying the date of maturity of the VP Systems Notes
or any date for payment of interest thereof, reducing or cancelling
the amount of principal or the rate of interest payable in respect
of the VP Systems Notes or altering the currency of payment of the
VP Systems Notes), the quorum shall be one or more persons holding
or representing not less than two--thirds in aggregate nominal
amount of the Voting VP Systems Notes for the time being
outstanding, or at any adjourned such meeting one or more persons
holding or representing not less than one--third in aggregate
nominal amount of the Voting VP Systems Notes. A resolution passed
at any meeting of the holders of VP Systems Notes shall be binding
on all the holders of VP Systems Notes, whether or not they are
present at such meeting.
16. FURTHER ISSUES
The Issuer shall be at liberty from time to time without the
consent of the Noteholders or the Couponholders to create and issue
further notes having terms and conditions the same as the Notes or
the same in all respects save for the amount and date of the first
payment of interest thereon and so that the same shall be
consolidated and form a single Series with the outstanding
Notes.
17. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No person shall have any right to enforce any term or condition
of this Note under the Contracts (Rights of Third Parties) Act
1999, but this does not affect any right or remedy of any person
which exists or is available apart from that Act.
18. GOVERNING LAW AND SUBMISSION TO JURISDICTION
18.1 Governing law
The Agency Agreement, the Deed of Covenant, the VP Issuing
Agency Agreement (if applicable), the Notes, the Receipts and the
Coupons and any non-contractual obligations arising out of or in
connection with the Agency Agreement, the Deed of Covenant, the VP
Issuing Agency Agreement (if applicable), the Notes, the Receipts
and the Coupons shall be governed by, and shall be construed in
accordance with, English law, save for the provisions of Conditions
1.2, 2.1 (Status of the Preferred Senior Notes), 2.2 (Status of the
Non-Preferred Senior Notes), 2.3 (Status of the Subordinated
Notes), 2.4 (No right of set-off or counterclaim), 7.2.2 (Early
redemption for regulatory reclassification reasons), 7.4
(Redemption upon the occurrence of a MREL Disqualification Event),
10.2 (Events of Default relating to Non-Preferred Senior Notes and
Subordinated Notes) and 19 (Recognition of the Danish Bail-In
Power), in the case of the registration and dematerialisation of VP
Notes which are governed by, and shall be construed in accordance
with, the laws of the Kingdom of Denmark.
Notwithstanding that, under the Capital Markets Act, the VP
Registration Order and the rules and procedures applicable to
and/or issued by the VP (together the "Danish Remedies"), holders
of VP Systems Notes may have remedies against the Issuer for
non--payment or non--performance under the Conditions applicable to
such VP Systems Notes, a holder of a VP Systems Note must exhaust
all available remedies under English law for non--payment or
non--performance before any proceedings may be brought against the
Issuer in Denmark in respect of the Danish Remedies or in
Luxembourg in respect of the Luxembourg Remedies. Notwithstanding
the above, and in this limited respect only, a holder of a VP
Systems Note may not therefore take concurrent actions in England,
Denmark or Luxembourg, as applicable.
18.2 Submission to jurisdiction
The Issuer irrevocably agrees, for the benefit of the
Noteholders, the Receiptholders and the Couponholders, that the
courts of England are to have exclusive jurisdiction to settle any
disputes which may arise out of or in connection with the Notes the
Receipts and/or the Coupons (including a dispute relating to any
non--contractual obligations arising out of or in connection with
the Notes, the Receipts and the Coupons) and accordingly submits to
the exclusive jurisdiction of the English courts.
The Issuer waives any objection to the courts of England on the
grounds that they are an inconvenient or inappropriate forum. The
Noteholders, the Receiptholders and the Couponholders may take any
suit, action or proceedings (together referred to as "Proceedings")
arising out of or in connection with the Notes, the Receipts and
the Coupons (including any Proceedings relating to any
non--contractual obligations arising out of or in connection with
the Notes, the Receipts and the Coupons) against the Issuer in any
other court of competent jurisdiction and concurrent Proceedings in
any number of jurisdictions.
18.3 Appointment of Process Agent
The Issuer appoints Law Debenture Corporate Services Limited at
its registered office at Fifth Floor, 100 Wood Street, London EC2V
7EC as its agent for service of process, and undertakes that, in
the event of Law Debenture Corporate Services Limited ceasing so to
act or ceasing to be registered in England, it will appoint another
person as its agent for service of process in England in respect of
any Proceedings. Nothing herein shall affect the right to serve
proceedings in any other manner permitted by law.
18.4 Other documents
The Issuer has in the Agency Agreement and the Deed of Covenant
submitted to, and will in the VP Issuing Agency Agreement submit
to, the jurisdiction of the English courts and appointed (or will
appoint, as applicable) an agent for service of process in terms
substantially similar to those set out above.
19. RECOGNITION OF THE DANISH BAIL-IN POWER
19.1 Agreement and Acknowledgement
Notwithstanding and to the exclusion of any other term of the
Notes or any other agreements, arrangements, or understandings
between the Issuer and any Noteholder, by its acquisition of the
Notes, each Noteholder (which, for the purposes of this Condition
19, includes each holder of a beneficial interest in the Notes)
acknowledges and accepts that the Amounts Due arising under the
Notes may be subject to the exercise of the Danish Bail-in Power by
the Resolution Authority and acknowledges, accepts, consents to and
agrees to be bound by:
(a) the exercise and effect of the Danish Bail-in Power by the
Resolution Authority (which may be imposed without any prior notice
to the Noteholders), which, without limitation, may include and
result in any of the following, or some combination thereof:
(i) the reduction or cancellation of all, or a portion, of the Amounts Due;
(ii) the conversion of all, or a portion, of the Amounts Due
into shares, other securities or other obligations of the Issuer or
another person (and the issue to or conferral on the Noteholder of
such shares, securities or obligations), including by means of an
amendment, modification or variation of the terms of the Notes;
(iii) the cancellation of the Notes; and
(iv) the amendment or alteration of the maturity of the Notes or
amendment of the amount of interest payable on the Notes, or the
date on which the interest becomes payable, including by suspending
payment for a temporary period; and
(b) the variation of the terms of the Notes, as deemed necessary
by the Resolution Authority, to give effect to the exercise of the
Danish Bail-in Power by the Resolution Authority.
The exercise of the Danish Bail-Power by the Resolution
Authority pursuant to any relevant laws, regulations, rules or
requirements in effect in Denmark is not dependant on the
application of this Condition 19.
19.2 Payment of Interest and Other Outstanding Amounts Due
No repayment or payment of Amounts Due will become due and
payable or be paid after the exercise of any Danish Bail-in Power
by the Resolution Authority if and to the extent such amounts have
been reduced, converted, cancelled, amended or altered as a result
of such exercise.
19.3 No Event of Default
Neither a reduction or cancellation, in part or in full, of the
Amounts Due nor the conversion thereof into another security or
obligation of the Issuer or another person, as a result of the
exercise of the Danish Bail-in Power by the Resolution Authority
with respect to the Issuer and/or the Notes will be an Event of
Default.
19.4 Notice to Noteholders
Upon the exercise of the Danish Bail-in Power by the Resolution
Authority with respect to the Issuer and/or the Notes, the Issuer
will give notice to the Noteholders in accordance with Condition 14
(Notices) as soon as practicable regarding such exercise of the
Danish Bail-in Power. The Issuer will also deliver a copy of such
notice to the Agent for information purposes.
19.5 Definitions
In the Conditions, the following expressions have the following
meanings:
"Amounts Due" means the principal amount of, or outstanding
amount due under, the Notes, together with any accrued but unpaid
interest due on the Notes. References to such amount will include
amounts that have become due and payable, but which have not been
paid, prior to the exercise of the Danish Bail-in Power by the
Resolution Authority.
"Bail-In Legislation" means the Danish Recovery and Resolution
Act, Consolidated Act no. 333 of 31 March 2015, as amended and the
Danish Financial Business Act, Consolidated Act no. 1140 of 26
September 2017 and any executive order or guidance rules issued
pursuant thereto.
"Danish Bail-in Power" means any write-down, conversion,
transfer, modification or suspension power existing from time to
time under, and exercised in compliance with, any law or regulation
in effect in Denmark, relating to the transposition of Directive
2014/59/EU establishing a framework for the recovery and resolution
of credit institutions and investment firms, as amended, including
but not limited to the Bail-In Legislation and the instruments,
rules and standards created thereunder, pursuant to which any
obligation of a bank or investment firm or affiliate of a bank or
investment firm can be reduced, cancelled, modified or converted
into shares, other securities or other obligations of such entity
or any other person (or suspended for a temporary period) by the
Resolution Authority.
"Resolution Authority" means the Finansiel Stabilitet or any
other authority with the ability to exercise the Danish Bail-in
Power.
Use of Proceeds
The net proceeds from each issue of Notes will be applied by the
Issuer for its general corporate purposes, which include making a
profit.
Description of the Issuer
Introduction
Ringkjøbing Landbobank Aktieselskab (the "Issuer") is a regional
full-service bank. As of 8 June 2018 Ringkjøbing Landbobank
Aktieselskab merged with another regional bank; Nordjyske Bank A/S.
The continuing bank is the Issuer, but the Issuer uses a two
branding strategy using both names; Ringkjøbing Landbobank and
Nordjyske Bank. Numbers relating to the Issuer prior to the merger
will be referred to as "Old" Ringkjøbing Landbobank (""Old"
Ringkjøbing Landbobank") and numbers relating to Nordjyske Bank A/S
prior the merger will be referred to as Nordjyske Bank ("Nordjyske
Bank").
As of June 30 June 2018 the Issuer had approximately 200,000
customers and a total balance sheet of DKK 50 million.
In 2017 the average number of full-time employees on a pro forma
basis for the merged entity was 705 (the number calculated as a
simple addition of the numbers for "Old" Ringkjøbing Landbobank and
Nordjyske Bank).
The Issuer's head office is located in Ringkøbing and with a
regional office located in Nørresundby. At the end of June 2018 the
Issuer had six branches in Central and West Jutland and 22 branches
in North Jutland and one in Copenhagen. Furthermore, the Issuer at
the same date had five private banking branches with one at the
head office in Ringkøbing, one located in Herning in Central
Jutland, one located in Aarhus and one in Vejle - both in Eastern
Jutland - and one located in Holte near Copenhagen.
The Issuer enjoys a strong position in both Central and West
Jutland and in North Jutland with a very high degree of customer
loyalty in both regions.
In addition to traditional banking, the Issuer has developed a
department for long distance customers (Da. "Fjernkundeafdelingen")
which, based on clear business concepts, provides services to
selected customer groups throughout Denmark from the head office in
Ringkøbing.
The Issuer's market share of bank loans calculated on
information as of year-end 2017 is approximately 3% of the total
bank loans in Danish banks.
History
The Issuer was founded in 1886, and its hallmark has always been
stability and a sound footing in the culture of West Jutland.
Over the last few years, the Issuer's return on equity has been
among the best in Denmark and during both the Nordic bank crisis in
the late 1980s and early 1990s and the recent financial crisis the
Issuer has always achieved positive results.
In the period from the mid-1990s to 2006, the Issuer had a
growth-oriented strategy which resulted in several different
initiatives. In around 2012 the Issuer resumed the growth-oriented
strategy.
In 1995, the Issuer established a department for long distance
customers, focusing on niche services such as wind turbine
financing, private banking and the financing of medical
practitioners' purchase of private practices.
In addition, the Issuer has opened branches in Central and West
Jutland over the years in Herning (in 1995), Holstebro (in 1997)
and Viborg (in 2001). In 2004 the Issuer introduced a private
banking concept, and a private banking department was established
in Ringkøbing and a private banking branch was established in
Herning in connection with the concept. The concept proved
successful and was further strengthened in 2010 with the opening of
a private banking branch in Holte close to the Danish capital,
Copenhagen and in 2014 with the opening of a private banking branch
in Aarhus in Eastern Jutland - the second biggest city in Denmark.
In January 2016 the Issuer opened a private banking branch in Vejle
in Eastern Jutland.
In 2002 the Issuer merged with Tarm Bank, in 2004 the Issuer
bought out the activities in the small cooperative bank Sdr. Lem
Andelskasse and in 2015 it bought out the activities in the small
savings bank Ulfborg Sparekasse.
As stated above the Issuer on the 8 June 2018 merged with
Nordjyske Bank A/S. Nordjyske Bank was a result of various mergers
and acquisitions and the history of the bank dates back to 1891. In
2015 Nordjyske Bank A/S merged with another bank located in North
Jutland, Nørresundby Bank A/S, with Nordjyske Bank A/S as the
continuing entity.
The present strategy of the Issuer is to realise healthy,
organic growth which shall be created through increasing the market
share in the areas surrounding the existing branches, through the
niches in which the Issuer has specialised, for example the
department for long distance customers and the private banking
branches of the Issuer.
Ownership
The Issuer is listed on Nasdaq Copenhagen and had approximately
registered 55,000 shareholders at the end of June 2018.
Two shareholders - Nykredit Realkredit A/S, Copenhagen Denmark,
and ATP, Hillerød, Denmark - have informed the Issuer that they
individually own more than 5 % of the share capital of the
Issuer.
According to the Articles of Association each share of nominal
DKK 1 carries one vote and a shareholder may not cast more than
3,000votes.
Business areas
The range of products the Issuer offers to its customers
includes all traditional banking products to both business
customers - mostly SMEs - and private customers including pension
scheme products and mortgage credit loans, which are offered
through cooperation with the mortgage companies Totalkredit and DLR
Kredit.
Furthermore, the Issuer offers banking products to customers
within selected niche areas where the Issuer maintains specialist
knowledge and competencies. The selected niche areas include
private banking, the financing of medical practitioners' and
dentists' purchase of private practices, financing of renewable
energy, including wind turbines, and selected whole sale loans,
hereunder first priority financing of real property.
Geographical location
The map below sets out an overview of the loans and guarantee
portfolio by customer location as a percentage of total bank loans
and guarantee portfolio on a pro forma basis for the merged entity
at the end of December 2017 (unaudited figures - the number for the
total loans and guarantees portfolio are calculated by the basis of
a simple addition of the loans and guarantees portfolio for "Old"
Ringkjøbing Landbobank and Nordjyske Bank as of end December 2017
without any corrections).
As will be evident from the map above there is a geographic
diversification of the Issuer's loans and guarantee portfolio with
the highest concentration in North Jutland (North Denmark Region),
West, Central and East Jutland (Central Denmark Region) and in the
Copenhagen area (Capital Region of Denmark).
Management
As of the end of June 2018 the Issuer's Board of Directors
consisted of twelve members and the shareholders of the Issuer had
elected 39 representatives to a Shareholders' Committee. This
Committee has elected eight members to the Board of Directors and
staff in the Issuer has elected four representatives to the Board
of Directors.
The Articles of Association of the Issuer determines that the
size of the Shareholders' Committee shall be jointly determined by
the Shareholders' Committee and the Board of Directors and have a
minimum of 37 and a maximum of 42 members. Furthermore, the
Articles of Association determines that the Board of Directors
shall consist of at least six and at most eight members who shall
be elected by the members of the Shareholders' Committee. The Board
of Directors shall also include the number of staff members as
prescribed by law.
There are no conflicts of interest between any duties of the
Issuer's Board of Directors or the Issuer's General Management and
their private interests or other duties.
The Board of Directors comprises of the following persons:
Elected by the Shareholders' Committee:
Martin Krogh Pedersen, Ringkøbing
CEO
Chairman of the board of directors
Business address:
Birkevej 2
DK-6971 Spjald
Denmark
Other managerial activities - member of the management of:
A/S Maskinfabrikken PCP
KP Group ApS
KP Group Holding ApS
K. P. Components Inc.
K. P. Holding A/S
K. P. Komponenter A/S
MHKP Holding ApS
MHKPO ApS
MHKPS ApS
Pensionstilskudsfonden for medarbejdere i Ringkjøbing
Landbobank
Techo A/S
Trestads Precisions Mekanik Aktiebolag
Mads Hvolby, Nørresundby
Chartered surveyor
Deputy chairman of the board of directors
Business address: Gasværksvej 30 RDK-9000 Aalborg Denmark
Other managerial activities - member of the management of:
Landinspektørernes Gensidige Erhvervsansvarsforsikring
Landinspektørfirmaet LE34 A/S
NB Gruppen Landinspektøraktieselskab
Jens Møller Nielsen, Ringkøbing
General manager
Deputy chairman of the board of directors
Business address:
Herningvej 3
DK-6950 Ringkøbing
Denmark
Other managerial activities - member of the management of:
Byggeri & Teknik I/S
Vestjysk Landboforening
VL Revision, registreret revisionsaktieselskab
Morten Jensen, Dronninglund
Attorney-at-law
Business address:
Hasserisvej 174
DK-9000 Aalborg
Denmark
Other managerial activities - member of the management of:
Andersen & Aaquist A/S
Badehotellerne Pepita og Sandvig Havn ApS
C. Flauenskjold A/S
Christine og Poul Goos Fond for Fri Forsikring
Dansk Bilglas A/S
Dansk Facility Service Holding A/S
Desmi Contracting A/S
Ejendomsselskabet Nordtyskland I A/S
Ejendomsselskabet Nordtyskland II A/S
Ejendomsselskabet Nordtyskland III A/S
Ejendomsselskabet Nordtyskland IV A/S
Ejendomsselskabet Nordtyskland V A/S
Ejendomsselskabet Nordtyskland VI A/S
Ejendomsselskabet Nordtyskland VII A/S
Ejendomsselskabet Nordtyskland VIII A/S
Ejendomsselskabet Nordtyskland IX A/S
Ejendomsselskabet Nordtyskland Kommanditaktieselskab
Ejendomsselskabet Svinkløv Badehotel A/S
Ergonomic Solutions International Ltd.
Ergonomic Solutions Manufacturing A/S
Ergonomic Solutions Nordic A/S
Felix Arden A/S
Global Ocean Automation A/S
Hattemagervej 5 A/S
Havnens Fiskebod A/S
JenSchu K/S
JM Marine Consult A/S
Komplementaranpartsselskabet Langebjergvej 1
Lundagergaard Holding ApS
Madera Holding ApS
Mesterbyg Klokkerholm A/S
Micodan A/S
Micodan Ejendomme A/S
Micodan Holding A/S
Micodan Norge AS
Miljø-Art A/S
Novagraf A/S
PM Energi A/S
PM Parts A/S
P/S Marshalls Alle
RengøringsCompagniet A/S
RengøringsCompagniets Fond
Saga Shipping A/S
Skandia Kalk Holding ApS
Skovbakkevej 24 ApS
Square Holding A/S
Teglbakken Byggeselskab P/S
Teglbakken, Niverød P/S
Tribodan A/S
Vibeke Emborg Holding ApS
Vibeke Emborg Invest ApS
Jon Steingrim Johnsen, Humlebæk
COO
Business address:
Sundkrogsgade 4
DK-2100 København Ø
Denmark
Other managerial activities - member of the management of:
Forsikringsakademiet A/S
Letpension A/S
PFA Holding A/S
PFA Kapitalforening
PFA Pension, Forsikringsaktieselskab
Jacob Møller, Ringkøbing
CEO
Business address:
Ndr. Ringvej 4
DK-6950 Ringkøbing
Denmark
Other managerial activities - member of the management of:
Dansk Energi
Goenergi A/S
Iron Pump A/S
Iron Pump Ejendomme A/S
Iron Pump Holding A/S
N H Vind 16 ApS
RAH Fiberbredbånd A/S
RAH Holding A/S
RAH Net A/S
RAH Service A/S
Scanenergi A/S
Scanenergi Elsalg A/S
Scanenergi Holding A/S
Scanenergi Solutions A/S
Vestjyske Net 60 KV A/S
Vestjyske Net Service A/S
Lone Rejkjær Söllmann, Tarm
Financial manager
Business address:
Tværvej 31-33
DK-6880 Tarm
Denmark
Other managerial activities - member of the management of:
Tama ApS
Sten Uggerhøj, Frederikshavn
Car dealer
Business address:
Søndergade 244
DK-9900 Frederikshavn
Denmark
Other managerial activities - member of the management of:
A/S Knud Uggerhøj
Aktieselskabet Trigon
Civilingeniør Bent Bøgh og Hustru Inge Bøgh's Fond
Ejendomsselskabet Møllehuset A/S
Ejendomsselskabet Wedellsborgvej 1 A/S
Fortin Madrejon A/S
Knud Uggerhøj Kapital ApS
Techno Danmark F.M.B.A.
Techno Forsikring A/S
Trigon Holding A/S
Uggerhøj A/S
Uggerhøj Erhverv ApS
Uggerhøj Ejendomme A/S
Uggerhøj Erhverv ApS
Uggerhøj Finans A/S
Uggerhøj Herning A/S
Uggerhøj Holding ApS
Uggerhøj Horsens A/S
Uggerhøj Nord ApS
Uggerhøj Aarhus A/S
Elected by the employees:
Dan Junker Astrup, Videbæk
Credit manager
Business address:
Torvet 1
DK-6950 Ringkøbing
Denmark
Gitte Elisa Sigersmunda Høgholm Vigsø, Holstebro
MA (Laws) / compliance employee
Business address:
Torvet 1
DK-6950 Ringkøbing
Denmark
Other managerial activities - member of the management of:
Finansforbundet
Pensionstilskudsfonden for medarbejdere i Ringkjøbing
Landbobank
Arne Ugilt, Hjørring
Credit consultant
Business address:
Torvet 4
DK-9400 Nørresundby
Denmark
Finn Aaen, Aalborg
Business advisor
Business address:
Torvet 4
DK-9400 Nørresundby
Denmark
The Board of Directors appoints the General Management, which
comprises:
John Bull Fisker, Ringkøbing
CEO
Member of the board of directors of:
Letpension A/S, Copenhagen (chairman)
Foreningen Bankdata, Fredericia (deputy chairman)
BI Holding A/S, Copenhagen (deputy chairman)
BI Asset Management Fondsmæglerselskab A/S, Copenhagen (deputy
chairman)
PRAS A/S, Copenhagen
Totalkredit A/S, Copenhagen
AUHE Midtvest's Støttefond, Herning
Pensionstilskudsfonden for medarbejdere i Ringkjøbing
Landbobank, Ringkøbing
Member of the customer board of:
PFA Pension A/S, Copenhagen
Claus Andersen, Frederikshavn
General manager
Member of the board of directors of:
Sæbygård Skov A/S, Nørresundby (chairman)
DLR Kredit A/S, Copenhagen
Lokale Pengeinstitutter, Copenhagen
Jørn Nielsen, Ringkøbing
General manager
Carl Pedersen, Nørresundby
General manager
Member of the board of directors of:
Vækst-Invest Nordjylland A/S
Objective
The Issuer has defined a number of objectives which are:
Full-service bank with a high level of competence: The Issuer
wants to be known as a competent full-service bank and a strong
niche player within private banking, covering high net worth
private customers and financing of securities, financing of medical
practitioners' and dentists' purchase of private practices,
financing of renewable energy, including wind turbines, and
selected wholesale loans. This involves a constant focus on the
development of employee competencies.
Performance: The Issuer's objective is to achieve operating
results among the best third, within the Danish financial sector.
The Issuer's strategy for achieving this is through rational bank
operations and a sound credit policy. The Issuer will focus on: 1)
retention and development of the customer portfolio which is
situated in North, Central and Western Jutland; and 2) serving and
development of selected customer groups throughout Denmark via the
Issuer's department for long distance customers and niche concepts
and the Issuer's Private Banking branches through delivering a high
level of expertise and competitive products.
Capital Structure: The Issuer intends to continue to run its
business on a solid capital base. The Board of Directors decided in
January 2014 that a long-term capital target for "Old" Ringkjøbing
Landbobank of approximately 15 per cent. for the banks Common
Equity Tier 1 capital ratio is sufficient and adequate for the
Issuer.
As at 31 December 2017, "Old" Ringkjøbing Landbobank had a
Common Equity Tier 1 capital ratio of 16.5 per cent., a Tier 1
capital ratio of 16.5 per cent. and a total capital ratio of 17.8
per cent. As at 30 June 2018, the Issuer had a Common Equity Tier 1
capital ratio of 15.1 per cent, a Tier 1 capital ratio of 15.1 per
cent and a total capital ratio of 19.2 per cent.
At the AGM the 28 February 2018 it was announced that the
management of the "Old" Ringkjøbing Landbobank had worked with new
capital target.
These targets were afterwards finalised and the Issuer will
operate with three targets in the future.
The common equity tier 1 capital ratio must be 13.5%, the total
capital ratio must be 17% and the total capital for covering the
MREL add-ons must be 22%. With respect of the target for the total
capital for covering the MREL add-ons, this target will be revised,
when the FSA has informed the Issuer of the final MREL requirement.
It is expected that the target will be revised to approximately 24%
, which includesthe countercyclical buffer.
The first two mentioned targets are minimum figures that must be
met at the end of the year, but there may be major fluctuations in
the capital ratios over the year due to the capital rules applying
to share buy-back programmes. Finally, no time-limit has been set
for when the targets for the common equity tier 1 capital ratio and
the total capital ratio must be met.
The total capital target for covering the MREL add-ons must be
met already at the beginning of 2019, because the Issuer has
decided to meet the fully phased-in MREL requirement from that
date.
More information about the capital structure etc. can be found
in the Annual Report for 2017 of "Old" Ringkjøbing Landbobank on
pages 12-13, 19-23, page 61 and pages 100-101 and in the Interim
Report 2018 ended the 30 June 2018 of the Issuer on pages 1, 6, 9,
10, 14, 15, 24, and 37.
Overview of financial performance
The tables below set out an analysis of the Issuer's and "Old"
Ringkjøbing Landbobank's profit and loss account, balance sheet and
certain key figures and ratios derived from its financial
statements for the years set out below. Only the figures for the
whole years 2016 and 2017 are audited. Furthermore, figures from
Nordjyske Bank are also mentioned. In addition, the figures for the
years 2016 and 2017 audited.
The financial statements of the Issuer, "Old" Ringkjøbing
Landbobank and Nordjyske Bank have been prepared in accordance with
the provisions of the Danish Financial Business Act.
Profit and loss account
Below is mentioned the audited figures for the whole years 2016
and 2017 for both "Old" Ringkjøbing Landbobank and Nordjyske Bank.
Furthermore are the unaudited figures for the first half year of
2017 for "Old" Ringkjøbing Landbobank and 2018 for the Issuer and
for the first half year of 2017 for Nordjyske Bank mentioned in the
table. All the main figures are extracted from the profit and loss
accounts and balance sheets etc. (in accordance with the Danish
Financial Business Act / Danish gaap) of the Issuer, "Old"
Ringkjøbing Landbobank and Nordjyske Bank.
Selected The Issuer "Old" Ringkjøbing Nordjyske Bank
main figures Landbobank
from the
profit
and loss
accounts
(million
DKK)
H1 2018 H1 2017 2017 2016 H1 2017 2017 2016
Full Full Full Full
year year year year
----------- ---------- ------- ------ -------- ------ ------
Net interest
income 352 321 641 679 264 533 559
----------- ---------- ------- ------ -------- ------ ------
Net interest
and fee
income 548 479 932 953 461 898 934
----------- ---------- ------- ------ -------- ------ ------
Value adjustments +99 +77 +143 +64 +39 +68 +46
----------- ---------- ------- ------ -------- ------ ------
Staff and
administration
costs 209 154 327 307 247 502 491
----------- ---------- ------- ------ -------- ------ ------
Impairment
charges
for loans
and other
receivables
etc. -36 -10 -10 -48 -65 -95 -245
----------- ---------- ------- ------ -------- ------ ------
Profit
before
tax 395 391 735 661 172 339 228
----------- ---------- ------- ------ -------- ------ ------
Profit
after tax 328 312 589 539 134 270 185
----------- ---------- ------- ------ -------- ------ ------
Total comprehensive
income 328 312 589 539 134 268 185
----------- ---------- ------- ------ -------- ------ ------
Selected The Issuer "Old" Ringkjøbing Nordjyske Bank
main figures Landbobank
from the
balance
sheets
(million
DKK)
30 June 30 June 31 Dec. 31 Dec. 30 June 31 Dec. 31 Dec.
2018 2017 2017 2016 2017 2017 2016
----------- -------- -------- -------- -------- -------- --------
Loans and
other receivables
at amortised
cost 31,970 19,066 19,351 17,482 11,304 11,822 10,822
----------- -------- -------- -------- -------- -------- --------
Deposits
and other
debt including
pooled
schemes 37,313 19,267 19,110 18,314 16,326 16,743 15,838
----------- -------- -------- -------- -------- -------- --------
Shareholders'
equity 7,066 3,619 3,817 3,555 2,819 2,952 2,758
----------- -------- -------- -------- -------- -------- --------
Balance
sheet total 49,859 25,474 25,796 24,258 20,104 20,527 19,451
----------- -------- -------- -------- -------- -------- --------
Contingent
liabilities 7,809 2,746 3,184 2,460 4,489 4,675 4,223
----------- -------- -------- -------- -------- -------- --------
Capital(*1) 6,464 3,439 3,514 3,355 2,283 2,407 2,201
----------- -------- -------- -------- -------- -------- --------
_______________
(1) Capital base is computed as own funds after deductions.
Key figures for the Issuer and for "Old" Ringkjøbing
Landbobank"
Key figures for the Issuer and for "Old" Ringkjøbing The Issuer "Old" Ringkjøbing Landbobank
Landbobank(*1)
---------------------------------------------------------- -------------- ------------------------------------------
As at 30 June As at 31 December
(per cent.) (per cent.)
---------------------------------------------------------- -------------- ------------------------------------------
2018 2017 2016 2015 2014 2013
-------------- ------- ------- ------- ------- ------
Pre-tax return on equity (per
cent.).......................... 5.8 19.9 19.3 18.4 19.6 16.9
Return on equity after tax (per
cent.)........................ 4.8 16.0 15.8 14.3 14.9 12.8
Income/cost
ratio...................................................
.. 2.55 3.13 2.81 2.60 2.52 2.19
Tier 1 capital ratio (per
cent.)................................... 15.1 16.5 16.9 17.1 17.5 19.2
Total capital ratio (per
cent.).................................... 19.1 17.8 18.3 18.8 17.5 20.0
_______________
(1) Key figures as defined by the Danish Financial Supervisory
Authority (the key figure "Rate of Costs" is not defined by the
Danish Financial Supervisory Authority).
The Issuer reduced its share capital once in each of 2012, 2013,
2014, 2015, 2016 and 2017. A further share capital reduction of
538,000 shares and a new share buy-back programme of up to a value
of up to DKK 170 million and a maximum of 1,000,000 shares was
approved by the annual general meeting on 28 February 2018. On 9
July 2018 the DKK 170 million share buy-back programmes was
concluded with a buy-back of 463,875 shares bought at a total of
DKK 169.999 million.
At an extraordinary general meeting on 7 June 2018 a new share
buy-back programme of up to a value of DKK 300 million and a
maximum of 1,800,000 shares was approved. This programme was
partially implemented on the 16 August 2018 with a decision by the
Issuers Board of Directors to buy own shares to a maximum value of
DKK 150 million and with a maximum of 900,000 shares. The share
buy-back programme runs from 16 August 2018 up to and including 9
November 2018. Subject to final board approval it is current
expectation that the remaining part of the share buy-back programme
equal to DKK 150 million will be implemented at a later point in
time.
In relation to the merger the Issuers' share capital was raised
to DKK 30,994,258.
The Board of Directors can increase the share capital by DKK
14,210,980 to DKK 45,205,238 in one or more increases until the 27
February 2023.
Loan and guarantee portfolio
The table below sets out the Issuer's loans and guarantees by
sector and industry, as a percentage of the Issuer's total loans
and guarantees.
The Issuer "Old" Ringkjøbing Landbobank
As at 31 December
-------------- -------------------------------------
30 June 2018* 2017* 2016*
-------------- ------------------ -----------------
Public
authorities..................................................
............................. 0.1 0.1 0.2
Business
Agriculture, hunting and forestry
Cattle farming
etc.........................................................
.................... 1.5 1.7 1.2
Pig farming
etc.........................................................
........................ 2.0 1.7 1.6
Other agriculture, hunting and
forestry............................................ 4.7 3.9 3.9
Fishing......................................................
.......................................... 2.5 2.4 2.5
Mink
production...................................................
.............................. 0.7 1.0 1.0
Industry and raw material
extraction................................................... 2.8 1.6 2.5
Energy.......................................................
...................................................... 1.6 1.7 2.1
Wind turbines -
Denmark......................................................
............. 1.7 2.9 3.7
Wind turbines -
foreign......................................................
................ 4.1 8.1 10.0
Building and
construction.................................................
.................. 4.1 4.3 2.2
Trade........................................................
.......................................... 4.4 3.3 3.4
Transport, hotels and
restaurants..................................................
...... 1.3 1.4 1.5
Information and
communication................................................
......... 0.4 0.3 0.3
Financing and
insurance....................................................
................. 10.2 13.6 14.3
Real
property......................................................
................................
First-priority without prior
creditors**............................................ 9.3 13.5 10.7
Other real estate
financing***...............................................
........... 5.7 2.7 4.3
Other
business.....................................................
............................... 6.4 7.1 6.7
-------------- ------------------ -----------------
Total
business.....................................................
................................ 63.4 71.2 71.9
Private......................................................
......................................... 36.5 28.7 27.9
-------------- ------------------ -----------------
Total........................................................
.......................................... 100.0 100.0 100.0
============== ================== =================
The distribution by sector and industry is based on the sector
codes of Statistics Denmark (Da. "Danmarks Statistik").
* The figures as at 31 December 2016 as at 2017 are audited,
whereas the figures as at 30 June 2018 are unaudited.
** Loans with first mortgages on real property and construction
financing without prior creditors.
*** Other forms of real estate financing, including loans with
second mortgage on real property and a strong lessee with an
irrevocable lease.
Funding structure
The principal source of funding is customer deposits which
accounted for 75 per cent. of the total funds (Balance Sheet total)
at 30 June 2018 (Issuer per cent,.), 74 per cent. of the total
funds at 31 December 2017 and 76 per cent. at 31 December 2016 (the
per cent. numbers for 2017 and 2016 are "Old" Ringkjøbing
Landbobank). Other sources of funding for both the Issuer and for
"Old" Ringkjøbing Landbobank include equity, subordinated debt and
market funding (from credit institutions and central banks).
Funding sources The Issuer "Old" Ringkjøbing Landbobank
------------------- ------------------------------------
As at 30 June 2018 As at 31 December
(million DKK) (million DKK)
------------------- ------------------------------------
2017 2016
------------------- ----------------- -----------------
Equity.................................................. 7,066 3,817 3,555
Subordinated debt............................... 1,445 372 371
Other liabilities etc.............................. 594 225 263
Deposits and other debt including pooled
schemes................................. 37,313 19,110 18,314
* on demand...................................... 25,601 12,268 11,952
* up to 1 year.................................... 3,378 3,555 3,502
* more than 1 year and up to 5 years. 1,648 1,468 1,192
* more than 5 years........................... 2,769 1,819 1,668
3,917 - -
* Pooled schemes........................
Core funding....................................... 46,418 23,524 22,503
Credit institutions and central banks.. 2,016 1,599 1,458
* on demand...................................... 668 269 281
* up to 1 year.................................... 372 338 162
* more than 1 year and up to 5 years. 626 605 660
* more than 5 years........................... 350 387 355
Issued bonds........................................ 1,425 673 297
0 - -
* on demand......................................
* up to 1 year.................................... 298 298 -
* more than 1 year and up to 5 years. 749 375 297
378 - -
* more than 5 years...........................
Market funding................................... 3,441 2,272 1,755
------------------- ----------------- -----------------
Total Funds (Balance Sheet total)...... 49,859 25,796 24,258
=================== ================= =================
The funding structure by the end of June 2018, December 2017 and
December 2016 is shown in the table below.
Distribution of funding The Issuer "Old" Ringkjøbing Landbobank
---------------------------------------------- ------------------- -------------------------------------------------
As at 30 June 2018 As at 31 December 2017 As at 31 December 2016
(per cent.) (per cent.) (per cent.)
---------------------------------------------- ------------------- ------------------------ -----------------------
Capital base (equity and subordinated
debt).......................................
................. 17 16 16
Other
liabilities.................................
............................................
....................... 1 1 1
Deposits and other
debt........................................
............................................
.. 75 74 76
Debt to credit institutions - term to
maturity over 1
year.................................... 2 4 4
Debt to credit institutions - term to
maturity under 1
year.................................. 2 2 2
Issued bonds - term to maturity over 1
year........................................
............... 2 2 1
Issued bonds - term to maturity under 1
year........................................
............. 1 1 -
Total.......................................
............................................
................................ 100 100 100
=================== ======================== =======================
As seen from the table above and the below table, the Issuer has
debt to credit institutions and issued bonds of DKK 1,338 million
DKK which expire within the next 12 months. This is more than
covered by claims on central banks, other credit institutions and
listed securities (as seen from the table below):
The Issuer "Old" Ringkjøbing
Landbobank
----------- -------------------------
As at As at As at 31
30 June 31 December December
2018 2017 2016
(million (million (million
DKK) DKK DKK )
------------- ----------
Debt to credit institutions and
central banks - term to maturity
under 1 year................................... 1,040 607 443
Issued bonds - term to maturity
under 1
year........................................................................
.......... 298 298
Total.......................................................................
......................................................................... 1,338 905 443
Cash in hand and demand deposits
with the central bank of
Denmark............................................. 630 308 284
Receivables with notice from central
banks - certificate of
deposits................................................. 4,081 957 1,572
Receivables from credit institutions
- term to maturity under 1
year................................................ 366 199 356
Listed bonds, shares and investment
funds certificates at fair
value................................................. 5,982 3,973 3,612
Total.......................................................................
......................................................................... 11,059 5,437 5,824
----------- ------------- ----------
Excess
cover.......................................................................
............................................................. 9,721 4,532 5,381
=========== ============= ==========
As per the table above, the "Old" Ringkjøbing Landbobank had
excess coverage of approximately DKK 5.4 billion at the end of
December 2016 and DKK 4.5 billion at the end of December 2017 and
the Isssuer had excess coverage of approximately DKK 9.7 billion at
the end of June 2018.
Market Risk
The "Old" Ringkjøbing Landbobank's total Value at Risk at 31
December 2017 was DKK 6.0 million. This sum relates to the maximum
loss from a statistical perspective which the Issuer could risk
losing with 99 per cent. probability if all market positions were
retained unchanged for a period of 10 days.
VaR summary 2017 (million DKK)
- "Old" Ringkjøbing Landbobank End of
(Audited figures) Average Minimum Maximum year
---------------------------------------------------------------------- -------- ------------ ------------ --------
VaR VaR
Risk figure VaR figure* VaR figure* figure
---------------------------------------------------------------------- -------- ------------ ------------ --------
Interest............................................................
........................... 9.6 0.9 16.3 5.8
Foreign
exchange............................................................
........... 0.2 0.2 0.1 0,1
Share
price...............................................................
.................. 2.5 2.5 2.8 1.1
Diversification.....................................................
...................... -2.3 -1.1 -1.7 -1.0
Total VaR
figure..............................................................
........... 10.0 2.5 17.5 6.0
*Determined by the total VaR figureAs shown from the table, the
"Old" Ringkjøbing Landbobank's total VaR figure throughout 2017
varied from DKK 2.5 million to DKK 17.5 million with an average of
DKK 10.0 million. The variation over time reflects the fact that
the Issuer regularly adjusts the size of its market positions, and
that the risk in the financial markets varies over time.
The Issuer's total Value at Risk at 30 June 2018 was DKK 15.2
million. This sum relates to the maximum loss from a statistical
perspective which the Issuer could risk losing with 99 per cent.
probability if all market positions were retained unchanged for a
period of 10 days.
VaR summary 1 January - 30
June 2018 (million DKK)- The End of
Issuer (Unaudited figures) Average Minimum Maximum period
---------------------------------------------------------------------- -------- ------------ ------------ --------
VaR VaR
Risk figure VaR figure* VaR figure* Figure
---------------------------------------------------------------------- -------- ------------ ------------ --------
Total VaR
figure..............................................................
........ 6.8 3.0 16.0 15.2
*Determined by the total VaR figure
As shown from the table, the Issuer's total VaR figure
throughout the period 1 January 2018 - 30 June 2018 varied from DKK
3.0 million to DKK 16.0 million with an average of DKK 6.8 million.
The variation over time reflects the fact that the Issuer regularly
adjusts the size of its market positions, and that the risk in the
financial markets varies over time.
Credit concentration
The Issuer is focused on its credit concentration. A measure of
the Issuer's credit concentration is given by the Total Large
Exposure, which is the Issuer's exposure to customers exceeding 10
per cent. of the Issuer's own funds.
The Issuer "Old" Ringkjøbing Landbobank
----------- ------------------------------------------
30 June 2017 2016 2015 2014 2013
2018
----------- ------- ------- ------- ------- ------
Total Large Exposures
(per cent.)............ 0.0 22.5 29.5 63.4 47.8 35.0
With effect from the 1 January 2018 the above mentioned
benchmark for large exposures in the Danish FSA's Supervisory
Diamond (Supervisory Diamond") was changed to another benchmark for
Large Exposures. Now the benchmark must be calculated as the sum of
a bank's 20 largest exposures relative to its common equity tier 1
capital with a limit value of less than 175%. The Issuer's key
figure for this new benchmark for Large Exposures was as of 30 June
2018 103.5%
Risks and risk management
The Issuer is exposed to various types of risks in connection
with its operations: credit risk, market risk, liquidity risk and
operational risk. The Issuer's total market risk is comprised of
interest rate risk, foreign exchange risk, share risk and property
risk.
The Issuer's general policy with respect to assumption of risks
is that the Issuer only assumes risks which it considers to be
within a moderate risk profile and which are in accordance with the
business principles under which the Issuer is run, and which the
Issuer possesses the expertise to manage.
The general policy for management and monitoring of the various
risks is that there must be both central control and central
monitoring as well as reporting to the Issuer's General Management
and Board of Directors. The management function and the control and
reporting functions are separate, and the tasks in question are
performed by different departments in the Issuer's central staff
functions.
The section below contains a description of the various credit
and market risks which should be read in conjunction with the
Annual Report for 2017 for "Old" Ringkjøbing Landbobank and the
Interim Report for the six months ended 30 June 2018 for the Issuer
which contains specific numbers.
Credit risk
Credit risk is defined as the risk that payments owed to the
Issuer are judged not to be collectable because of certain
customers' lack of ability or willingness to pay at the agreed
time.
The Issuer assumes credit risks on the basis of a policy, the
objectives of which are to ensure a balance between risks assumed
and the return gained by the Issuer, the maintenance of losses at
an acceptable level relative to the Danish financial sector, and
the accommodation of actual losses within the Issuer's results even
in extreme situations.
Historically, the "Old" Ringkjøbing Landbobank has always had a
sound and conservative credit policy, and for the Issuer the focus
will remain on ensuring an efficient management and monitoring of
the Issuer's total portfolio of loans and guarantees via its
central credit department.
Actual net losses
The table below documents the performance of "Old" Ringkjøbing
Landbobank's credit policy. As will be evident, "Old" Ringkjøbing
Landbobank 's average percentage loss after interest over the last
30 years (1988-2017) was -0.05 per cent., with -0.77 per cent.
(1992) as the highest percentage loss, and +0.51 per cent. (2000)
as the most positive figure. The average percentage loss before
interest over the last 30 years is -0.51 per cent., with -1.70 per
cent. (1992) as the highest percentage loss and -0.01 per cent.
(1999 and 2000) as the lowest percentage loss. The average
percentage loss after interest over the last 10 years (2008-2017)
is negative by 0.21 per cent., and the average percentage loss
before interest is -0.41 per cent.
Over the years the "Old" Ringkjøbing Landbobank has accumulated
a reserve for loan losses and provisions for losses on guarantees
which amounted to approximately DKK 931 million by the end of 2017.
This has been established as the impairment charges included in the
statement of income have been higher than the actual net losses
shown in the table below. However, in 2017 actual losses were
exceeded by the impairment charges included in the statement of
income.
After the merger the total cumulative impairment charges for
loans and other receivables, provisions for losses on guarantees
and unutilised credit facilities of the Issuer was at the end of
June 2018 total on balance sheet date DKK 2,213 million.
The table below focuses on the actual losses of "Old"
Ringkjøbing Landbobank and the Issuer providing a fair picture of
the real losses of "Old" Ringkjøbing Landbobank.
Actual net losses on loans and guarantees in DKK thousands
Loans Total
and loans,
other Impairments guarantees,
Actual debtors for loans impairments
net with and and Percentage Percentage
Actual losses suspended provisions provisions loss loss
net after calculation for for before after
Year losses interest of interest guarantees guarantees interest(*) interest(*)
--------------------------------------------- -------- --------- ------------ ------------ ------------ ------------ ------------
"Old" Ringkjøbing
Landbobank
1987....................................... -6,696 304 10,544 75,000 1,358,464 -0.49% 0.02%
1988....................................... -14,205 -5,205 4,522 93,900 1,408,830 -1.01% -0.37%
1989....................................... -18,302 -5,302 13,107 117,270 1,468,206 -1.25% -0.36%
1990....................................... -15,867 -1,867 47,182 147,800 1,555,647 -1.02% -0.12%
1991....................................... -11,429 3,571 47,626 170,000 1,805,506 -0.63% 0.20%
1992....................................... -32,928 -14,928 43,325 177,900 1,933,081 -1.70% -0.77%
1993....................................... -27,875 -6,875 30,964 208,700 1,893,098 -1.47% -0.36%
1994....................................... -14,554 4,446 33,889 223,500 1,938,572 -0.75% 0.23%
1995....................................... -10,806 10,194 27,292 238,800 2,058,561 -0.52% 0.50%
1996....................................... -19,802 -1,802 18,404 233,400 2,588,028 -0.77% -0.07%
1997....................................... -31,412 -12,412 39,846 236,600 3,261,429 -0.96% -0.38%
1998....................................... -2,914 18,086 4,905 263,600 3,752,602 -0.08% 0.48%
1999....................................... -442 21,558 18,595 290,450 5,148,190 -0.01% 0.42%
2000....................................... -405 27,595 12,843 316,750 5,377,749 -0.01% 0.51%
2001....................................... -8,038 20,962 14,222 331,950 6,113,523 -0.13% 0.34%
2002....................................... -8,470 20,530 26,290 382,850 7,655,112 -0.11% 0.27%
2003....................................... -22,741 2,259 23,412 394,850 8,497,124 -0.27% 0.03%
2004....................................... -14,554 9,446 18,875 404,855 11,523,143 -0.13% 0.08%
2005....................................... -22,908 192 35,796 357,000 15,522,264 -0.15% 0.00%
2006....................................... -13,531 7,028 20,578 295,000 17,858,787 -0.08% 0.04%
2007....................................... -15,264 4,888 13,190 289,097 19,227,572 -0.08% 0.03%
2008....................................... -34,789 -10,237 22,110 356,083 16,475,975 -0.21% -0.06%
2009....................................... -73,767 -47,658 62,649 467,025 14,890,027 -0.50% -0.32%
2010....................................... -69,428 -40,207 66,237 565,035 14,758,234 -0.47% -0.27%
2011....................................... -78,813 -43,073 61,419 649,856 14,448,638 -0.55% -0.30%
2012....................................... -90,022 -48,337 113,312 758,363 14,849,602 -0.61% -0.33%
2013....................................... -69,030 -25,117 85,258 853,421 16,604,640 -0.42% -0.15%
2014....................................... -53,427 -9,206 58,244 931,398 18,073,200 -0.30% -0.05%
2015....................................... -87,250 -48,815 74,220 942,950 20,194,063 -0.43% -0.24%
2016....................................... -86,666 -54,200 59,904 937,128 20,878,475 -0.42% -0.26%
2017....................................... -45,769 16,414 24,995 931,035 23,465,775 -0.20% -0.07%
The Issuer
2018 (1 January
30
June)......................................
........... 52 16,094 397,216 2,212,626 41,994,024 0.00% 0.04%
"Old" Ringkjøbing
Landbobank
30 year average
(1988-2017)................................
..... -0.51% -0.05%
10-year average
(2008-2017)................................
..... -0.41% -0.21%
_______________
(*) Actual net losses relative to total loans, guarantees,
impairment charges for loans and provisions for guarantees.
Explanation: The percentage losses are computed as the actual net
losses for the year before and after interest on the impaired part
of loans as a percentage of total loans, guarantees, impairments
for loans and provisions for guarantees. A minus in front of a
percentage loss indicates a loss, while a positive percentage loss
means that the interest on the impaired part of loans was greater
than the actual net losses for the year. All the above figures are
computed exclusive of amounts concerning reverse repo transactions
and the national Bank Package I etc.
Credit approval process
The credit approval process is relatively centralised. There is
a specific limit for credit approval defined for each employee
which means that the employee in direct contact with the customer
is able to approve minor credits. Medium sized credits/exposures
can be approved by the branch manager whereas large
credits/exposures need approval by the credit department and/or by
credit committees with General Management representation. Very
large credits/exposures above a certain limit need approval from
the Board of Directors.
Samples of the credits approved are regularly taken by the
credit department to make sure the quality of the credit process is
satisfactory (i.e. that collateral has been sufficiently ensured,
the financial situation of the customer is well analysed and the
customer has a reasonable ability to service the loans).
Furthermore, credits are audited by both the internal auditor and
the external independent auditor of the Issuer on a regular test
basis, and the credit approval process is also audited by the
internal auditor of the Issuer.
Credit monitoring and management
All large credits are regularly reviewed. The Issuer collects
accounts from all customers organized as limited liability
companies as well accounts for a huge number of other customers.
These accounts are analysed by the credit department at least once
a year and more frequently for large customer and customers where
the potential risk of default is increased.
In addition, surveys are conducted of the rest of the customer
base. The samples of customers are selected randomly as well as by
specific criteria such as overdraft, large exposures and specific
types of credits which the Issuer expects to have an increased
probability of default. For every customer with an increased
probability of default a plan of action is defined by the customer
advisor. These plans are approved and monitored by the credit
department.
The Board of Directors receive quarterly reporting of the credit
risks.
Criteria for credit approval
In general the Issuer focuses on the following characteristics
in the credit approval process:
-- First priority security and/or other strong collateral;
-- Steady income/cash flow stream; and
-- Long-term relationship.
The criteria above are also important to the niche areas of the
Issuer. The niche areas have a clear preference for credits with
low margin and low risk in comparison to more risky credits with a
higher margin.
The niche areas include:
-- Loans to finance renewable energy (wind turbines and solar
plants and bio mass plants): The Issuer is primarily focused on
wind turbines erected onshore and solar plants in Denmark and
Germany and bio mass plants in Denmark, where the Issuer grants
first priority loans. Wind turbines and solar plants erected in
Denmark and Germany and bio mass plants in Denmark are of
particular interest to the Issuer, as the governments in both
countries have guaranteed a subsidy.
-- Financing of medical and dental practitioners' purchase or
establishment of private practices and dentists' purchase or
establishment of private practices: The establishment of a private
medical practices is a highly regulated area in Denmark and the
income inflow of a medical or dental practitioner is relatively
stable compared to most other service trades.
-- Selected wholesale loans: Wholesale loans relate primarily to
real property loans comprising of loans secured by a first mortgage
on property and/or loans secured by a second mortgage on property
combined with a lessee that is considered by the Issuer to be
financially in good credit standing according to internal
evaluation criteria of the Issuer and with an irrevocable lease. In
the context of second mortgage financing, the Issuer places
importance on the project's ability to settle the debt prior to the
expiration of the lease.
-- Private Banking: Traditional private banking with a focus on
assets under management and other aspects of optimising the
customers' assets, including the financing of securities.
The valuation of security is highly dependent on the business
sector. In general the Issuer calculates a value which allows the
owner to earn a reasonable rate of return. The rate of return is
adjusted over time to reflect changed lending costs as well as
return on alternative investments. The valuations of private houses
are based on an assessor valuation as well as external property
valuation models.
Credit risk on financial counterparties
Exposures to financial counterparties, and therewith a credit
risk, (including settlement risk) arise in connection with the
Issuer's trading in securities, foreign currency and derivative
financial instruments, the Issuer's loans to other banks and the
Issuer's possession of bonds and payment handling. Settlement risk
is the risk that the Issuer will not receive payment or securities
corresponding to the securities and/or payments which the Issuer
had made and delivered in connection with the settlement of trades
in securities and/or currency.
The Issuer's Board of Directors grants lines for credit risks
and the settlement risks against financial counterparties. When
granting lines, account is taken of the individual counterparty's
risk profile, rating, size and financial circumstances, and there
is constant follow-up on the lines which are granted.
The Issuer's policy is to keep the credit risk exposure to
financial counterparties at a balanced level relative to the
Issuer's size, and to credit institutions with good credit
quality.
Claims on central banks and credit institutions
One of the two major items concerning the credit risk exposure
to financial counterparties is credit balances with central banks
and credit institutions. The Issuer has assumed only a moderate
risk on this item, and for "Old" Ringkjøbing Landbobank in the
total receivables from central banks and credit institutions, 87
per cent. as of 31 December 2017 was thus due within three months,
and for the Issuer the percentage as of 30 June 2018 was 97 per
cent.
The bond portfolio
The second of the two major items concerning the credit risk
with financial counterparties is the Issuer's bond portfolio. For
"Old" Ringkjøbing Landbobank the distribution of bonds by rating
classes was as of 31 December 2017:
As at
31 December
2017
(per
Bonds distributed by rating classes cent.)
------------------------------------------------------------------------------------------------------- -------------
Aaa/AAA..............................................................................................
................................................ 86
Aa1/AA+...............................................................................................
............................................... -
Aa2/AA................................................................................................
................................................ -
Aa3/AA-...............................................................................................
................................................ -
A1/A+.................................................................................................
................................................. -
A2/A.................................................................................................
................................................... 1
A3/A-.................................................................................................
.................................................. -
Baa1/BBB+.............................................................................................
.............................................. -
Baa2/BBB.............................................................................................
................................................ 2
Baa3/BBB-............................................................................................
................................................ 2
Ba1/BB+-.............................................................................................
................................................. 1
Ba2/BB...............................................................................................
.................................................. 1
Ba3/BB--..............................................................................................
................................................ -
Not
rated................................................................................................
.............................................. 7
-------------
Total................................................................................................
.................................................... 100
=============
Explanation: The bond portfolio distributed by rating classes.
Ratings from the credit rating bureaus Moody's Investors Service,
Standard & Poors and Fitch were used in the specification.
The majority of the bond portfolio consists of AAA-rated Danish
government and mortgage credit bonds. There is also a holding of
corporate bonds. The credit quality of the bonds in the corporate
bonds portfolio is good, but their market value can vary over time
in connection with general changes in credit spreads in the market,
and company-specific circumstances can also affect the value of
these bonds.
Market risks
Market risk is defined as the risk that the market value of the
Issuer's assets and liabilities will change because of changes in
market conditions. The Issuer's basic policy with respect to market
risks is that the Issuer wishes to keep such risks at a moderate
level.
The Issuer has determined a concrete exposures limits for each
type of market risk, and the risk assessment includes the objective
that there must be a sensible and balanced relationship between
risk and return.
The Issuer uses derivatives to hedge and manage the various
market risk types to the extent to which the Issuer wishes to
reduce or eliminate, the market risks which the Issuer has
assumed.
To supplement the more traditional measures of market risk, the
Issuer has a mathematical/statistical model to compute market
risks. The model is used to compute Value at Risk ("VaR"), which is
regularly reported to the Issuer's management. VaR is a measure of
risk which describes the Issuer's risk under normal market
conditions.
An isolated VaR figure is calculated for interest rate
positions, foreign exchange positions and listed share positions
etc., and a total VaR figure is also calculated for all of the
Issuer's market risks consisting of interest rate positions,
foreign exchange positions and listed share positions etc. as the
effect of diversification. This possibility of calculating a total
VaR figure for the Issuer's market risks is one of the major
advantages of the VaR model compared with more traditional measures
of risk.
More information about the VaR model can be found in the Annual
Report for 2017 for "Old" Ringkjøbing Landbobank on pages 9, 29-30,
32 and page 94 and for the Issuer on page 12 of the Interim Report
for the six month ended 30 June 2018.
Interest rate risk
The Issuer's loan and deposit business and accounts with credit
institutions are mostly entered into on a variable basis. The
Issuer also has certain fixed interest financial assets and
liabilities, and hedging transactions are entered into as needed
with a consequent reduction of the interest rate risk.
The Issuer's policy is to maintain a moderate interest rate
risk, and thus the Issuer does not assume high levels of exposure
to movements in the interest level.
The Issuer's interest rate risk is monitored and managed daily
by the Issuer's securities department and the Issuer's accounts
department controls maintenance of the limits for assumption of
interest rate risk, and reports to the Issuer's Board of Directors
and General Management.
As will be evident from the below table, "Old" Ringkjøbing
Landbobank and the Issuer has had a moderate interest rate risk
over the last five years in accordance with the Issuer's policy for
this type of risk.
Interest
rate
risk
(per
Date cent.)
----------------------------------------------------------------------------------------------------------------------------------------------------- ---------
"Old" Ringkjøbing Landbobank
31 December
2012...................................................................................................................................... 0.6
30 June
2013............................................................................................................................................... 1.3
31 December
2013...................................................................................................................................... 0.6
30 June
2014............................................................................................................................................... 0.8
31 December
2014...................................................................................................................................... 1.2
30 June
2015............................................................................................................................................... 1.5
31 December
2015...................................................................................................................................... 2.2
30 June
2016............................................................................................................................................... 2.1
31 December
2016...................................................................................................................................... 1.8
30 June
2017............................................................................................................................................... 0.8
31 December
2017...................................................................................................................................... 1.1
The Issuer
30 June 2018 1.1
Explanation: The interest rate risk shows the impact on profit
of a one percentage point change in interest rate level as a
percentage of the Tier 1 capital.
Foreign exchange risk
The Issuer's principal currency is Danish kroner, but the Issuer
has also entered into lending and deposit activities in other
currencies.
The Issuer's policy is to maintain a low foreign exchange risk,
so the Issuer reduces its exposures in foreign currencies via
hedging.
The Issuer's positions in foreign exchange are managed daily by
the foreign department, while the Issuer's accounts department
monitors maintenance of limits and reports to the Board of
Directors and General Management.
The Issuer's and "Old" Ringkjøbing Landbobank's foreign exchange
risk has in 2018 respectively in 2017 as in the previous four years
been at an insignificant level.
The Issuer "Old" Ringkjøbing Landbobank
----------- ------------------------------------------
30 June 31 December
----------- ------------------------------------------
2018 2017 2016 2015 2014 2013
----------- ------- ------- ------- ------- ------
Foreign exchange
position(*1) .. 0.6 1.1 0.6 0.8 0.4 1.6
Foreign exchange
risk(*2) ........ 0.0 0.0 0.0 0.0 0.0 0.0
_______________
(*1) Foreign exchange position is defined as foreign exchange
indicator 1 in per cent. of Tier 1 capital according to the
definitions of the official key figures from the Danish Financial
Supervisory Authority.
(*2) Foreign exchange risk is defined as foreign exchange
indicator 2 in per cent. of Tier 1 capital according to the
definitions of the official key figures from the Danish Financial
Supervisory Authority.
Share price risk
The share price risk is the risk of losing money as a result of
declining share prices of companies in which the Issuer owns
shares.
The Issuer co-owns various sector companies via equity interests
in BI Holding A/S (BankInvest), Bokis A/S, DLR Kredit A/S,
Letpension Holding A/S, PRAS A/S, Sparinvest Holdings SE,
Stonehenge Fondsmæglerselskab A/S, Swift, VP Securities A/S and
others.
The sector companies can be seen as a way of outsourcing a
number of services while the Issuer still keeps an interest through
its ownership stake in the companies. Larger banks typically
provide these services through wholly owned subsidiaries, and the
equity interests are thus not deemed to be a part of the Issuer's
share risk as the positions are primarily held as alternatives to
wholly owned subsidiaries. The Issuer also holds a small portfolio
of listed shares and a portfolio of investment fund
certificates.
The Issuer's policy is to maintain a moderate share price risk.
The daily management of the Issuer's share portfolio is undertaken
by the securities department, while monitoring of the lines and
reporting to the General Management and the Board of Directors are
performed by the accounts department.
"Old" Ringkjøbing Landbobank and The Issuer has maintained
modest share exposure during recent years.
Share
exposure
(per
Date cent.)
------------------------------------------------------------------------------------------------------------------------------------------ -----------
"Old" Ringkjøbing Landbobank
31 December
2012.................................................................................................................................... 1.1
31 December
2013.................................................................................................................................... 0.6
31 December
2014.................................................................................................................................... 0.7
31 December
2015.................................................................................................................................... 0.9
31 December
2016.................................................................................................................................... 1.3
31 December
2017.................................................................................................................................... 0.6
The Issuer
30 June 2018 1.4
Explanation: The share exposure is computed as the Issuer's
portfolios of shares (excluding sector shares and bond-based
investment fund certificates) as a percentage of the Issuers'
equity.
Property risk
The Issuer primarily wishes to possess only properties for use
in banking operations, and also to maintain minimal property
risks.
The Issuer's portfolio of both domicile and investment
properties is thus quite modest relative to the Issuer's total
balance sheet (domicile and investment properties totalled 0.5 per
cent. of total assets and 3.4 per cent. of shareholders' equity at
30 June 2018).
Liquidity risk
Liquidity risk refers to the ability of the Issuer to ensure the
availability of appropriate cash funds to meet its payments
obligations, stemming from mismatches between the maturities of
assets and liabilities, and the liquidity risk arises in the
general funding of the Issuer's activities and in the management of
its operations.
It is the objective of the Issuer with respect to liquidity
management, not to have any uncovered net funding requirements and
not to be dependent on the short-term money market.
It is also an objective that the budgeted liquidity meets the
current LCR requirement for a period of at least 12 months and to
maintain sufficient liquidity for a stress scenario by means of
recovery plans for a period of at least 12 months.
The daily liquidity is managed by the Issuer's accounts
department and regularly reported to the Board of Directors and the
General Management and the Issuer's service and support department
controls the reporting.
The Issuer's assets are funded from a range of sources,
primarily the Issuer's deposits, by joint funding (bond issues) of
the Issuer's home loans, by taking up longer-term loans with other
credit institutions, via the subordinated capital taken up by the
Issuer, and, finally, the Issuer's equity.
The Issuer's deposit base consists of core deposits and deposits
from customers with a long-term relationship with the Issuer. The
Issuer has also entered into longer-term bilateral loan agreements
with various European business partners.
It should be noted that the Issuer's funding situation is not
comprised such that the Issuer is dependent on the individual
business partners or other partners in a single country.
To ensure diversification in funding, the Issuer also has an
EMTN bond programme of EUR 2 billion. The programme helps to ensure
alternative funding sources for the bank. Funds were raised under
the programme in 2017 and in 2018.
The Issuer has joint funding agreements with Totalkredit /
Nykredit and BRFkredit. The agreements mean that the Issuer can
procure liquidity by letting Totalkredit / Nykredit or BRFkredit
issue SDO bonds against security in the loans, which the Issuer has
provided to customers with security in real property.
Both in 2017 and 2018 the Issuer (in 2017 it was "Old"
Ringkjøbing Landbobank) has taken advantage of the joint funding
agreement with Totalkredit, and home loans were sold to Totalkredit
for funding during the years. The Issuer does not currently use the
joint funding partnership with BRFkredit.
As of 30 June 2018 the value of the Issuer's deposits (excluding
pooled schemes) exceeded the value of the Issuer's loans by just
over DKK 1.4 billion. In addition, part of the loan portfolio for
wind turbines erected in Germany was refinanced back-to-back with
KfW Bankengruppe, and DKK 901 million can be disregarded in terms
of liquidity.
The Issuer's short-term funding (debt to credit institutions and
centrals banks an issued bond) with a time to maturity of less than
1 year was by the end of June 2018 DKK 1.3billion, corresponding to
DKK 11.1 billion primarily placed in short-term investments in the
central bank of Denmark and in liquid securities. (please refer to
the section titled "Description of the Issuer - Funding
Structure").
The Issuer thus requires no financing for the coming year to
meet the minimum require-ment that it must always be able to manage
for up to 12 months without access to the financial markets.
In terms of liquidity, the Issuer must comply with the Liquidity
Coverage Requirement ratio ("LCR Ratio"). This key ratio expresses
the ability of banks to honor their payment obligations for a
30-day period without access to market funds. The LCR figure is
computed as the ratio of a bank's cash and cash equivalents /
liquid assets to its payment obligations for the next 30 days as
computed in accordance with specific rules.
The minimum LCR requirement for both systematically important
financial institution ("SIFI" and for non-SIFI banks (the Issuer is
a non-SIFI bank) is that the LCR Ratio must be at least 100 per
cent. On 31 December 2017 "Old" Ringkjøbing Landbobank's LCR Ratio
was 193 per cent. and on 30 June 2018 the Issuer's LCR Ratio was
233 per cent and the Issuer thus met the requirement.
With effect from 20 June 2018 the liquidity benchmark in the
Supervisory Diamond was changed to an LCR benchmark, which will
show the ability of banks to survive stressed liquidity for a
three-month periods with a limit of more than 100 per cent. As of
30 June 2018 the LCR three-month liquidity, which must exceed a
limit value of 100 percent, was 201 per cent.
For data on the funding structure please see the financial
description as well as the Annual Report 2017 pages 11 and 33-34
and the notes to the Annual Report 2017 for "Old" Ringkjøbing
Landbobank and on page 13 of the Interim Report for the six month
ended 30 June 2018 of the Issuer.
Operational risk
The operational risk is defined as the risk of direct or
indirect financial losses because of faults in internal processes
and systems, human errors or external events.
The current capital adequacy rules require among other things
banks to quantify and include an amount for operational risks when
computing their capital adequacy.
The Issuer uses the so-called basic indicator method, where, on
the basis of calculation of an average of the most recent three
financial years' net incomes, a sum is quantified and added to the
total risk exposure to cover the Issuer's operational risks.
The Issuer regularly produces reports on the losses and events
which are judged to be attributable to operational risks. From the
reports, an assessment is made whether procedures etc. can be
adjusted and improved in order to avoid or minimise any operational
risks. The Issuer's procedures are also regularly reviewed and
assessed by the Issuer's internal and external auditors. In
addition, the Issuer makes thematic reviews of selected business
areas, identifying and assessing the potential risk scenarios for
each area and subsequently adjusting the Issuer's procedures
accordingly.
An important area in assessment of the Issuer's operational
risks is IT.
The Issuer's IT organisation and the management regularly assess
IT security, including preparation of IT emergency plans, in
connection with which the Issuer specifies requirements and levels
for availability and stability of the IT systems and data used by
the Issuer. These requirements apply to both the Issuer's internal
IT organisation and its primary external IT supplier, Bankdata,
which the Issuer owns together with a number of other banks.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
Pro forma figures
All the pro forma figures mentioned below have been prepared to
illustrate, on a pro forma basis, the impact of the merger of "Old"
Ringkøbing Landbobank and Nordjyske Bank on the Issuer's profit and
financial position. The pro forma figures have been prepared for
illustrative purposes only, and due to the nature of pro forma
figures, the pro forma financial information addresses a
hypothetical situation and therefore do not purport to represent,
and do not represent what the consolidated financial situation or
the consolidated results of operations of the enlarged group would
have been had the merger occurred on the dates indicated therein or
any other date, nor is the unaudited consolidated pro forma
financial information indicative of our future results or
operations or our financial position.
All the pro forma figures are unaudited. As certain of the pro
forma figures are based on the audited financial statements of
"Old" Ringkjøbing Landbobank and Nordjyske Bank, certain of the
source figures are audited.
Pro forma figures for the profit and loss account according to
Danish Financial Business Act/Danish Gaap
First are stated pro forma figures for the profit and loss
accounts of "Old" Ringkjøbing Landbobank, Nordjyske Bank and the
Issuer in accordance with the Danish Financial Business Act/Danish
Gaap.
The pro forma figures for the income statement items for 1
January to 31 December 2017 and 1 January to 30 June 2018 and were
calculated by an addition of the figures from the respective profit
and loss account statements in accordance with the Danish Financial
Business Act/Danish Gaap from "Old" Ringkjøbing Landbobank and
Nordjyske Bank and with inclusion of any material acquisition
adjustments triggered by the merger, however these are assessed to
be immaterial. The pro forma figures mentioned below were prepared
as if the merger of "Old" Ringkjøbing Landbobank and Nordjyske Bank
had effect 1 January 2017 respectively 1 January 2018.
Pro forma figures for the profit and loss account for the
Financial Year 2017 in accordance with the Danish Financial
Business Act / Danish Gaap (in million DKK):
Pro forma figures for the profit and loss account
for the Financial Year 2017 in accordance with
the Danish Financial Business Act / Danish Gaap
(in million DKK)
"Old" Ringkjøbning Adjustments Pro forma
Landbobank for Nordjyske profit and
for the year Bank for the loss account
ended 31 December year ended 1 January
2017 in accordance 31 December - 31 December
with the Danish 2017 in accordance 2017
Financial with the Danish
Business Act/Danish Financial
Gaap Business Act/Danish
Gaap
------------------------ --------------------- ---------------
Audited figures Audited figures Unaudited
pro forma
figures
------------------------ --------------------- ---------------
Sourced from Sourced from
the 2017 audited the 2017 audited
accounts of accounts of
"Old" Ringkjøbing Nordjyske
Landbobank Bank and have
and have been been extracted
extracted without material
without material adjustments
adjustments
------------------------ --------------------- ---------------
Net interest
and fee income 932 898 1,830
------------------------ --------------------- ---------------
Value adjustments +143 +68 +211
------------------------ --------------------- ---------------
Other operating
income 5 1 6
------------------------ --------------------- ---------------
Staff and
administration
costs 327 502 829
------------------------ --------------------- ---------------
Amortisation,
depreciation
and write-downs
on intangible
and tangible
assets 4 29 33
------------------------ --------------------- ---------------
Other operating
expenses 3 2 5
------------------------ --------------------- ---------------
Impairment
charges for
loans and
other receivables
etc -11 -95 -106
------------------------ --------------------- ---------------
Results from
investments
in associated
companies
and group
enterprises 0 0 0
------------------------ --------------------- ---------------
Profit before
tax 735 339 1,074
------------------------ --------------------- ---------------
Tax 146 69 215
------------------------ --------------------- ---------------
Net profit
for the year 589 270 859
------------------------ --------------------- ---------------
Other comprehensive
income 0 -2 -2
------------------------ --------------------- ---------------
Total comprehensive
income 589 268 857
------------------------ --------------------- ---------------
Pro forma figures for the profit and loss account for the six
month of 2018 ended 30 June in accordance with the Danish Financial
Business Act / Danish Gaap (in million DKK):
Pro forma figures for the profit and loss account
for the six month of 2018 ended 30 June in accordance
with the Danish Financial Business Act / Danish
Gaap (in million DKK)
"Old" Ringkjøbing Adjustments Pro forma
Landbobank for Nordjyske profit and
A/S for the Bank A/S for loss account
six month the period 1 January
period ended ended 8 June - 30 June
30 June 2018 2018 2018
in accordance
with the Danish
Financial
Business Act/Danish
Gaap
----------------------- ------------------ --------------
Unaudited Unaudited Unaudited
figures figures pro forma
figures
----------------------- ------------------ --------------
Sourced from Sourced from
the unaudited accouting
2018 Interim records and
report ended have been
30 June of extracted
the Issuer without material
and have been adjustments
extracted
without material
adjustments
----------------------- ------------------ --------------
Net interest
and fee income 548 402 950
----------------------- ------------------ --------------
Value adjustments +99 +44 +143
----------------------- ------------------ --------------
Other operating
income 3 0 3
----------------------- ------------------ --------------
Staff and
administration
costs 209 312 521
----------------------- ------------------ --------------
Amortisation,
depreciation
and write-downs
on intangible
and tangible
assets 9 33 42
----------------------- ------------------ --------------
Other operating
expenses 1 0 1
----------------------- ------------------ --------------
Impairment
charges for
loans and
other receivables
etc -36 +38 +2
----------------------- ------------------ --------------
Results from
investments
in associated
companies
and group
enterprises 0 0 0
----------------------- ------------------ --------------
Profit before
tax 395 139 534
----------------------- ------------------ --------------
Tax 67 24 91
----------------------- ------------------ --------------
Net profit
for the year 328 115 443
----------------------- ------------------ --------------
Other comprehensive
income 0 0 0
----------------------- ------------------ --------------
Total comprehensive
income 328 115 443
----------------------- ------------------ --------------
Pro forma figures for the alternative performance measure Core
earnings
The Issuer also published various pro forma figures in the
Interim Report for the six months ended 30 June 2018. These pro
forma figures were prepared to give the reader of the Interim
Report for the six months ended 30 June 2018 a better overview of
the development in the Issuer's profit and financial position. The
pro forma figures mentioned below were prepared as if the merger of
"Old" Ringkjøbing Landbobank and Nordjyske Bank had taken effect
from 1 January 2017 respectively 1 January 2018 and with inclusion
of any material acquisition adjustments triggered by the merger,
however, these are assessed to be immaterial.
The income statement items for the periods 1 January 2017 to 31
December 2017 and 1 January to 30 June 2018 were calculated by an
addition of the figures from the respective profit and loss account
statements in accordance with the Danish Financial Business
Act/Danish Gaap from "Old" Ringkjøbing Landbobank and Nordjyske
Bank and corrected by pro forma reposting in Nordjyske Bank and
both converted and adjusted to "Old" Ringkjøbing Landbobank's
statement of the alternative performance measure "apm" "Core
earnings. The principles for calculating core earnings are
explained on page 65 of the Annual Report for 2017 for "Old"
Ringkjøbing Landbobank.
The pro forma statement shows special costs in both banks as
separate items. The Issuer considers amortisation and write-downs
on intangible assets to be a special item, as posting amortisation
and write-downs to this item enhances the quality of its equity and
reduces the deduction when computing total capital. In addition,
merger and restructuring costs paid by Nordjyske Bank before the
merger, and merger and restructuring costs paid by the Issuer after
the merger, are considered special items. Finally, special costs in
the pro forma figures include miscellaneous non-recurring costs.
These non-recurring costs are related to harmonising the cost
accounting principles and valuation principles for tangible assets
in the two banks.
Pro forma figures for the apm Core earnings for the Financial
Year 2017 (in million DKK):
Notes:
Pro forma figures for the apm Core earnings for the Financial
Year 2017 (in million DKK)
Adjustments
------------------------- ----------------------------
"Old" Ringkjøbing Nordjyske Bank's Pro forma apm Core earnings
Landbobank'sapm Core profit and loss account 1 January - 31 December
earnings for the year for the year ended 2017
ended December 2017 December 2017 in
accordance with the
Danish Financial
Business Act/Danish
Gaap*- Note 1
------------------------- ----------------------------
Audited figures Unaudited figures Unaudited pro forma
figures
------------------------- ----------------------------
Sourced from the 2017 Note 3
audited accounts of "Old"
Ringkjøbing Landbobank
and have been extracted
without material adjustments
- Note 2
------------------------- ----------------------------
Total
core income
excl.
trading
income 954 876 1,831
------ ------------------------- ----------------------------
Trading
income 65 21 86
------ ------------------------- ----------------------------
Total
core income 1,019 897 1,917
------ ------------------------- ----------------------------
Staff
and administration
costs;
Depr.
and write-downs
intangible
and tangible
assets;
Other
operation
costs. 335 510 845
------ ------------------------- ----------------------------
Core earnings
before
impairment
charges
for loans 685 387 1,072
------ ------------------------- ----------------------------
Impairment
charges
for loans
and other
receivables
etc. -10 -60 -70
------ ------------------------- ----------------------------
Core earnings 675 327 1,002
------ ------------------------- ----------------------------
Result
for the
portfolio +60 +24 +84
------ ------------------------- ----------------------------
Profit
before
special
costs 735 351 1,086
------ ------------------------- ----------------------------
Amortisation
and write-downs
on intangible
assets 22 22
------ ------------------------- ----------------------------
Profit
before
tax 735 329 1,064
------ ------------------------- ----------------------------
Tax 146 70 216
------ ------------------------- ----------------------------
Profit
after
tax 589 259 848
------ ------------------------- ----------------------------
* Based on the unaudited accounts for the financial year 2017 of Nordjyske Bank.
1 The adjustments related to acquisition adjustments triggered
by the merger to the pro forma figures in 2017 are assessed to be
immaterial.
2 The explanations for the correlation between Danish Gaap and
the apm Core earnings of "Old" Ringkjøbing Landbobank are set out
in notes 15 to 18 of the Annual Report 2017.
3 The apm amounts have been sourced from the 2017 audited
accounts of Nordjyske Bank and have been extracted without material
adjustments. Explanations of the correlation between reported
profit before tax and apm core earnings are set out below:
Net interest and fee MDKK MDKK
income
As reported - income
statement 898
----- -----
Items arising from
an earlier merger
in Nordjyske Bank
(between Nordjyske
Bank and Nørresundby
Bank)
----- -----
Ni) -40
----- -----
Nii) -6
----- -----
-46
----- -----
Items arising from
application of apm
Core earnings principles
of the Issuer / "Old"
Ringkjøbing Landbobank
----- -----
Na) -21
----- -----
Nc) -7
----- -----
Nb) +1
----- -----
Nd) +42
----- -----
Nd) +10
----- -----
Ne) -1
----- -----
+247
----- -----
Net interest and fee
income - core earnings 876
----- -----
Trading income MDKK
Na) +21
-----
Total - core earnings +21
-----
Staff and administration costs; MDKK
Depr. and write-downs intangible
and tangible assets; Other
operation costs
As reported - income statement 532
-----
Nf) -22
-----
Total - core earnings 510
-----
Result for the portfolio MDKK
Nc) +7
-----
Nd) +16
-----
Ne) +1
-----
Total - core earnings +24
-----
Impairment charges for loans MDKK
and other receivables etc.
As reported - income statement -96
-------
Ni) +40
-----
Nii) +6
-----
Niii) -10
-----
+36
-------
Total - core earnings -60
-------
Amortisation and write-downs MDKK
on intangible assets
Nf) +22
-----
Total - core earnings +22
-----
Profit before tax MDKK
As reported - income statement 339
-----
Niii) -10
-----
Total - core earnings 329
-----
Tax MDKK
As reported - income statement 69
-----
Niii) +1
-----
Total 70
-----
Profit after tax MDKK
SAs reported - income statement 270
-----
Niii) -11
-----
Total - core earnings 259
-----
Explanations of the Items reconciling Nordjyske Bank from Danish
gaap to apm Core earnings - arising from an earlier merger in
Nordjyske Bank (between Nordjyske Bank and Nørresundby Bank):
Ni) Value adjustment of lending taken over at a discount conc.
Nørresundby Bank. When merging with other banks, part of lending is
valuated lower than par (primarily lending with individual
write-downs). The difference between market price and nominal value
is amortised (booked as income) over the term of the loan and
booked as income in the official accounts as interest income on
loan. If the loan is not improved at the same rate as the
amortisation, there will be corresponding write-down on lending
etc. If the loans have always been part of Nordjyske Bank's
lending, these movements would have been entered as movements on
write-down on lending etc.
Nii) Interest income conc. the value adjusted part of lending
from Nørresundby Bank. If the original write-downs from Nørresundby
Bank had been write-downs from Nordjyske Bank and not re-classified
at a discount, the interest hereof would be adjusted between
interest on lending and write-downs on lending etc.
Niii) Value adjusted lending valuated higher with regard to
quality than amortization taken over at a discount. When merging
with other banks, part of lending is valuated lower than par
(primarilylending with individual write-downs). The difference
between market price and nominal value is amortised (booked as
income) over the term of the loan and booked as income in the
official accounts as interest income on loan. If the loan is
improved faster than the amortisation, it will not be possible to
immediately book the improvement as income with regard to quality,
and it will not be possible to take the difference that occurs by
this as income in the official accounts until later periods. If the
loans had always been part of Nordjyske Bank's lending, these
movements would be booked as income immediately as movements on
write-downs on lending etc.
Explanations of the Items reconciling Nordjyske Bank's profit
and loss account for the year ended December 2017 in accordance
with the Danish Financial Business Act/Danish Gaap to the apm Core
earnings of the Issuer / "Old" Ringkjøbing Landbobank:
Na) Reposting of trading income MDKK 21 from Net interest and
fee income to Trading income.
Nb) Reposting of other income MDKK 1 from Other operating income
to Total core income excl. trading income.
Nc) Net effect of funding of own portfolio and bond yields etc.
MDKK 7 reposted from Net interest and fee income to Result for the
portfolio.
Nd) Reposting of market value adjustments MDKK 68 from Market
value adjustments,to Total core income excl. trading income
(Foreign exchange income and Value adjustments sector shares MDKK
10+42) and to the Result for portfolio MDKK 16.
Ne) Reposting of dividends - not sector shares to the Result for
portfolio MDKK 1 from Net interest and fee income to Result for the
portfolio.
Nf) Reposting of Amortisation and write-downs on intangible
assets MDKK 22 from Depreciation and write-downs intangible and
tangible asset to Amortisation and write-downs on intangible
asset.
Pro forma figures for the apm Core earnings for the six months
of 2018 ended 30 June (in million DKK):
Pro forma figures for the apm Core earnings for the first six
months of 2018 ended 30 June (in million DKK)
Adjustments
--------------------------- ----------------------------
The Issuer's profit and Nordjyske Bank for Pro forma apm Core earnings
loss account for the the period ended 1 January - 30 June
first six month period 8 June 2018in accordance 2018
ended 30 June 2018 in with the Danish Financial
accordance with the Danish Business Act/Danish
Financial Business Act Gaap* - Note 1
/ Danish Gaap converted
to the apm Core earnings
--------------------------- ----------------------------
Unaudited figures Unaudited figures Unaudited pro forma
figures
--------------------------- ----------------------------
Sourced from the unaudited Note 3
2018 Interim report ended
30 June of the Issuer
and have been extracted
without material adjustments
- Note 2
--------------------------- ----------------------------
Total
core income
excl.
trading
income 563 400 963
----- --------------------------- ----------------------------
Trading
income 38 9 48
----- --------------------------- ----------------------------
Total
core income 601 410 1,011
----- --------------------------- ----------------------------
Staff
and administration
costs;
Depr.
and write-downs
intangible
and tangible
assets;
Other
operation
costs. 199 235 435
----- --------------------------- ----------------------------
Core earnings
before
impairment
charges
for loans 402 175 576
----- --------------------------- ----------------------------
Impairment
charges
for loans
and other
receivables
etc. -36 +38 +2
----- --------------------------- ----------------------------
Core earnings 366 213 578
----- --------------------------- ----------------------------
Result
for the
portfolio +49 +44 +93
----- --------------------------- ----------------------------
Profit
before
special
costs 415 257 671
----- --------------------------- ----------------------------
Amortisation
and write-downs
on intangible
assets 1 17 18
----- --------------------------- ----------------------------
Merger
and restructuring
costs 19 31 50
----- --------------------------- ----------------------------
Non-recurring
costs 0 69 69
----- --------------------------- ----------------------------
Profit
before
tax 395 139 534
----- --------------------------- ----------------------------
Tax 67 24 91
----- --------------------------- ----------------------------
Profit
after
tax 328 115 443
----- --------------------------- ----------------------------
Notes
* Based on the accounting records as of 8 June 2018 in Nordjyske Bank.
1 The adjustments related to acquisition adjustments triggered
by the merger to the pro forma figures in 1 January 2018 to 30 June
2018 are assessed to be immaterial.
2 Sourced from 2018 Interim report of the Issuer and have been
extracted without material adjustment and reconciled in accordance
with the Danish Financial Business Act/Danish Gaap to the apm Core
earnings of the Issuer / "Old" Ringkjøbing Landbobank as
follows:
Net interest and fee MDKK MDKK
income
As reported - income
statement 548
----- -----
Ra) -38
----- -----
Rb) +3
----- -----
Rc) +8
----- -----
Rd) +32
----- -----
Rd) +11
----- -----
Re) -1
----- -----
Total +15
----- -----
Net interest and fee
income - core earnings 563
----- -----
Trading income MDKK
Ra) +38
-----
Total - core earnings +38
-----
Staff and administration costs; MDKK
Depr. and write-downs intangible
and tangible assets; Other
operation costs
As reported - income statement 219
-------
Rf) -1
-----
Rg) -19
-----
Total -20
-------
Total - core earnings 199
-------
Result for the portfolio MDKK
Rc) -8
-----
Rd) +56
-----
Re) +1
-----
Total - core earnings +49
-----
Amortisation and write-downs MDKK
on intangible assets
Rf) +1
-----
Total - core earnings +1
-----
Merger and restructuring costs MDKK
Rg) +19
-----
Total - core earnings +19
-----
Ra) Reposting of trading income MDKK 38 from Net interest and
fee income to Trading income
Rb) Reposting of other income MDKK 3 from Other operating income
to Total core income excl. trading income
Rc) Net effect of funding of own portfolio and bond yields etc.
MDKK 8 reposted from Net interest and fee income to Result for the
portfolio) Reposting of market value adjustments MDKK 99 from
Market value adjustments to Total core income excl. trading income
(Foreign exchange income and Value adjustments sector shares MDKK
32+11) and to the Result for portfolio MDKK 56
Re) Reposting of dividends - not sector shares to the Result for
portfolio MDKK 1 from Net interest and fee income to Result for the
portfolio
Rf) Reposting of Amortisation and write-downs on intangible
assets MDKK 1 from Depr. and write-downs intangible and tangible
assets to Amortisation and write-downs on intangible assets
Rg) Reposting of Merger and restructuring costs MDKK 19 from
Staff and administration costs to Merger and restructuring
costs
3 Based on accounting records as of 8 June 2018 in Nordjyske
Bank items reconciling in accordance with the Danish Financial
Business Act/Danish Gaap to the apm Core earnings of the Issuer /
"Old" Ringkjøbing Landbobank:
Net interest and fee MDKK MDKK
income
In accounting records 402
----- -----
Na) -9
----- -----
Nc) -3
----- -----
Nd) +6
----- -----
Nd) +4
----- -----
Total -2
----- -----
Net interest and fee
income - core earnings 400
----- -----
Trading income MDKK
Na) +9
-----
Total - core earnings +9
-----
Staff and administration costs; MDKK
Depr. and write-downs intangible
and tangible assets; Other
operation costs
In accounting records 345
-------
Nf) -17
-----
Ng) -31
-----
Nh) -62
-----
Total -110
-------
Total - core earnings 235
-------
Result for the portfolio MDKK
Nc) +3
-----
Nd) +34
-----
Nh) +7
-----
Total - core earnings +44
-----
Amortisation and write-downs MDKK
on intangible assets
Nf) +17
-----
Total - core earnings +17
-----
Merger and restructuring costs MDKK
Ng) +31
-----
Total - core earnings +31
-----
Non-recurring costs MDKK
Nh) +69
-----
Total - core earnings +69
-----
Na) Reposting of trading income MDKK 9 from Net interest and fee
income to Trading income
Nc) Net effect of funding of own portfolio and bond yields etc.
MDKK 3 reposted from Net interest and fee income to Result for the
portfolio
Nd) Reposting of market value adjustments MDKK 44 from Market
value adjustments to Total core income excl. trading income
(Foreign exchange income and Value adjustments sector shares MDKK
6+4) and to the Result for portfolio MDKK 34
Nf) Reposting of Amortisation and write-downs on intangible
assets MDKK 17 from Depr. and write-downs intangible and tangible
assets to Amortisation and write-downs on intangible assets
Ng) Reposting of Merger and restructuring costs MDKK 31 from
Staff and administration costs to Merger and restructuring
costs
Nh) Reposting of Non-recurring costs MDKK 69 from Staff and
administration costs and Depr. and write-downs intangible and
tangible assets and Result for the portfolio (Market value
adjustments) to Non-recurring costs
Accountants' report of unaudited pro forma financial
information
PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab,
CVR-nr. 33 77 12 31
Platanvej 4, DK-7400 Herning
T: +45 9660 2500, www.pwc.dk
To Ringkjøbing Landbobank Aktieselskab
We have completed our assurance engagement to report on the
process applied by Ringkjøbing Landbobank Aktieselskab to compile
the pro forma financial information as set out on pages 100- 109 of
the prospectus issued by by Ringkjøbing Landbobank Aktieselskab The
pro forma figures and the basis stated are shown in the "Pro forma
figures" section on pages 100- 109 in the prospectus.
The pro forma figures have been compiled by Management.
As part of this process, Management has extracted information
from the financial statements of Ringkjøbing Landbobank and
Nordjyske Bank for financial year 2017 as well as the accounting
records of the banks for H1 2018. Unmodified auditor's reports
without emphasis of matters have been rendered on the financial
statements which are published on the website of Ringkjøbing
Landbobank Aktieselskab.
For the purpose of this assurance engagement, "properly
compiled" means that, considering the nature of the accessible
data, the pro forma figures have been appropriately classified and
summed up as well as presented on the basis stated in the "Pro
forma figures" section on pages 100- 109 in the prospectus.
For the purpose of this assurance engagement, "the basis is
consistent with the accounting policies applied by the Bank" means
that, where relevant and possible, the existing basis stated of the
pro forma figures in respect of recognition and measurement
(following any required adjustments) is consistent with the
accounting policies disclosed in the financial statements of
Ringkjøbing Landbobank Aktieselskab for 2017.
The pro forma figures and the related reports have been prepared
solely for the purpose of the prospectus. The pro forma figures may
therefore be unsuitable for another purpose.
Management's responsibility
Bank Management is responsible for the compilation and
collection of the pro forma figures on the basis stated and for
ensuring that this basis is consistent with the accounting policies
applied by Ringkjøbing Landbobank Aktieselskab.
Our independence and quality control
We have complied with the independence requirements and other
ethical requirements of the International Ethics Standards Board
for Accountants' Code of Ethics for Professional Accountants
(IEASBA Code) and the additional requirements applicable in Denmark
which are based on the basic principles of integrity, objectivity,
professional competence as well as due care, confidentiality and
professional behaviour.
PricewaterhouseCoopers is subject to the International Standard
on Quality Control, ISQC 1, and thus applies a comprehensive
quality control system, including documented policies and
procedures concerning compliance with ethical requirements,
professional standards and statutory requirements and other
regulation.
Auditor's responsibility
Our responsibility is to express an opinion as required by item
7 of Annex II to the Prospectus Directive Regulation, about whether
the pro forma figures have been properly compiled on the basis
stated, and whether this basis is consistent with the accounting
policies applied by Ringkjøbing Landbobank Aktieselskab.
We conducted our work in accordance with the international
standard on assurance engagements ISAE 3420, "Assurance Reports on
the Process to Compile Pro Forma Financial Information Included in
a
Prospectus", and additional requirements in accordance with
Danish audit regulation. This standard requires that we plan and
perform procedures to obtain reasonable assurance about whether, in
all material respects, the pro forma figures have been properly
compiled on the basis stated and whether, against the existing
background, this basis is consistent with the accounting policies
applied by Ringkjøbing Landbobank Aktieselskab.
For the purpose of this assurance engagement, we are not
responsible for updating or reissuing any reports or opinions on
any historical financial information used in compiling the pro
forma figures, and when conducting our work, we have not performed
an audit or review of the financial information used to compile the
pro forma figures.
The purpose of the pro forma figures in a prospectus is to
illustrate the impact of a significant event or transaction on the
historical unadjusted financial information of Ringkjøbing
Landbobank Aktieselskab as if the event had occurred or the
transaction had been carried through at an earlier date chosen for
illustrative purposes. Accordingly, we do not provide any assurance
that the actual results of the event or transaction would have been
as illustrated.
A reasonable assurance engagement under which we are to issue
our opinion on whether, in all material respects, pro forma figures
have been properly compiled on the basis stated and whether this
basis is consistent with the accounting policies applied by
Ringkjøbing Landbobank Aktieselskab, comprises the performance of
procedures to assess whether the relevant criteria applied by
Management in compiling the pro forma figures provide a reasonable
basis for presenting the significant impact directly attributable
to the event or transaction and whether sufficient appropriate
evidence has been obtained of:
-- the related pro forma adjustments appropriately reflecting these criteria; and of
-- the pro forma financial information reflecting the correct
application of these adjustments of the unadjusted financial
information.
The procedures selected depend on the auditor's judgement
considering the auditor's understanding of the nature of the banks,
the event or transaction in respect of which the pro forma figures
have been compiled and other relevant circumstances of the
engagement.
Our engagement also comprises our consideration of the overall
presentation of the pro forma figures.
We believe that the evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Opinion
In our opinion, in all material respects, the pro forma figures
have been properly compiled on the basis stated and this basis is
consistent with the accounting policies applied by Ringkjøbing
Landbobank Aktieselskab in accordance with the definition of the
terms provided in the opening paragraphs of this Report.
Declaration
For the purposes of Prospectus Rule 5.5.4 R(2)(f), we are
responsible for this report as part of the Prospectus and we
declare that we have taken all reasonable care to ensure that the
information contained in this report is, to the best of our
knowledge, in accordance with the facts and contains no omission
likely to affect its import. This declaration is included in the
Prospectus in compliance with item 13.1 of Annex IX to the
Prospectus Directive Regulation.
Herning, 29 October 2018
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
H.C. Krogh
State Authorised Public Accountant
Taxation
Danish Taxation
The following is a general summary description of Danish
taxation of the Notes according to the Danish tax laws in force at
the date of this Prospectus and is subject to any changes in law
and the interpretation and application thereof, which changes could
be made with retroactive effect. The following summary does not
purport to be a comprehensive description of all the tax
considerations that may be relevant to a decision to acquire, hold
or dispose of the Notes, and does not purport to deal with the tax
consequences applicable to all categories of investors, some of
which (such as professional dealers in securities) may be subject
to special rules. The following cannot replace actual tax
counselling. Potential investors are strongly recommended to obtain
tax counselling from a competent tax advisor to clarify the
individual consequences of their investment, holding and disposal
of the Notes. The Issuer makes no representations regarding the tax
consequences of purchase, holding or disposal of the Notes.
Taxation at source
The existing Danish tax laws apply no general withholding tax or
coupon tax to payments of interest or principal or other amounts
due on the Notes, other than in certain cases on payments in
respect of controlled debt in relation to the Issuer as referred to
in consolidated Act No. 1164 of 6 September 2016 on corporate
taxation as amended from time to time. This will not have any
impact on Noteholders who are not in a relationship whereby they
control, or are controlled by, the Issuer, or where the Noteholders
and the Issuer are not controlled by the same group of
shareholders.
Resident Noteholders
Private individuals, including individuals who are engaged in
financial trade, companies and similar enterprises resident in
Denmark for tax purposes or receiving interest on the Notes through
their permanent establishment in Denmark are liable to pay tax on
such interest.
Capital gains are taxable for individuals and corporate entities
in accordance with the Consolidated Act No. 1283 of 25 October 2016
capital and exchange gains (in Danish "Kursgevinstloven"). Gains
and losses on Notes held by corporate entities are generally taxed
in accordance with a mark--to--market principle (in Danish
"lagerprincippet"), i.e. on an unrealised basis.
Gains and losses on Notes issued to individuals are generally
taxed once the gain or loss is realised. The net gains are taxed as
capital income at a rate of up to 42 per cent in 2018. However,
this rate does not apply if the individual is considered a
professional financial trader. The gain or loss will only be
included in the taxable income when the net gain or loss for the
year on all debt claims, debt denominated in foreign currency and
investment certificates in bond-based investment funds subject to
the minimum taxation exceeds a total of DKK 2,000.
Pension funds and other entities governed by the Consolidated
Act No. 1126 of 10 October 2014 on Taxation of Pension Investments
Returns (in Danish "Pensionsafkastbeskatningsloven"), as amended
from time to time, would, irrespective of realisation, be taxed on
annual value increase or decrease in the fair market value of the
Notes according to a mark-to-market principle (in Danish
"lagerprincippet") as specifically laid down in the act. Such net
return is generally taxed at a flat rate of 15.3 per cent
Non--Resident Noteholders
Under existing Danish tax laws, payments of interest or
principal amounts to any non--resident Noteholders are not subject
to taxation in Denmark, other than in certain cases on payments in
respect of controlled debt in relation to the Issuer as referred to
under "Taxation at source" above. Thus no Danish withholding tax
will be payable with respect to such payments and any capital gain
realised upon the sale, exchange or retirement of a Note will not
be subject to taxation in Denmark, other than in certain cases on
payments in respect of controlled debt in relation to the Issuer as
referred to under "Taxation at source" above.
This tax treatment applies solely to Noteholders who are not
subject to full tax liability in Denmark or included in a Danish
joint taxation scheme and do not carry on business in Denmark
through a permanent establishment.
FATCA
Whilst the Notes are in global form and held within Euroclear or
Clearstream, Luxembourg (together, the "ICSDs"), it is expected
that FATCA will not affect the amount of any payments made under,
or in respect of, the Notes by the Issuer, any paying agent and the
Common Depositary, given that each of the entities in the payment
chain beginning with the Issuer and ending with the ICSDs is a
major financial institution whose business is dependent on
compliance with FATCA. Any alternative approach introduced under an
intergovernmental agreement will be unlikely to affect the
securities. The documentation expressly contemplates the
possibility that the securities may go into definitive form and
therefore that they may be taken out of the ICSDs. If this were to
happen, then a non-FATCA compliant holder could be subject to
withholding. However, definitive notes will only be printed in
remote circumstances.
Subscription and Sale
The Dealers have, in a programme agreement (the "Programme
Agreement") dated 29 October 2018, agreed with the Issuer a basis
upon which they or any of them may from time to time agree to
purchase Notes. Any such agreement will extend to those matters
stated under "Form of the Notes" and "Terms and Conditions of the
Notes". In the Programme Agreement, the Issuer has agreed to
reimburse the Dealers for certain of their expenses in connection
with the establishment and any future update of the Programme and
the issue of Notes under the Programme and to indemnify the Dealers
against certain liabilities incurred by them in connection
therewith.
United States
The Notes have not been and will not be registered under the
Securities Act or with any securities regulatory authority of any
state or other jurisdiction of the United States, and may not be
offered or sold within the United States or to, or for the account
or benefit of, U.S. persons except in certain transactions exempt
from the registration requirements of the Securities Act. Terms
used in this paragraph have the meanings given to them by
Regulation S.
The Notes are subject to U.S. tax law requirements and may not
be offered, sold or delivered within the United States or its
possessions or to a United States person, except in certain
transactions permitted by U.S. Treasury regulations. Terms used in
this paragraph have the meanings given to them by the U.S. Internal
Revenue Code and regulations thereunder.
Each Dealer has agreed that, except as permitted by the Dealer
Agreement, it will not offer, sell or deliver Notes, (a) as part of
their distribution at any time or (b) otherwise until 40 days after
the completion of the distribution of the Notes comprising the
relevant Tranche, as certified to the Fiscal Agent or the Issuer by
such Dealer (or, in the case of a sale of a Tranche of Notes to or
through more than one Dealer, by each of such Dealers as to the
Notes of such Tranche purchased by or through it, in which case the
Fiscal Agent or the Issuer shall notify each such Dealer when all
such Dealers have so certified) within the United States or to, or
for the account or benefit of, U.S. persons, and such Dealer will
have sent to each dealer to which it sells Notes during the
distribution compliance period relating thereto a confirmation or
other notice setting forth the restrictions on offers and sales of
the Notes within the United States or to, or for the account or
benefit of, U.S. persons. Each Dealer has also represented and
agreed that neither it, its affiliates (as defined in Rule 405 of
the Securities Act) nor any person acting on its or their behalf
has engaged or will engage in any directed selling efforts with
respect to the Notes and it and they have complied and will comply
with the offering restrictions requirement of Regulation S. Terms
used in this paragraph have the meanings given to them by
Regulation S.
In addition, until 40 days after the commencement of the
offering of Notes comprising any Tranche, any offer or sale of
Notes within the United States by any dealer (whether or not
participating in the offering) may violate the registration
requirements of the Securities Act.
Prohibition of Sales to EEA Retail Investors
Unless the Final Terms in respect of any Notes specifies the
"Prohibition of Sales to EEA Retail Investors" as "Not Applicable",
each Dealer has represented and agreed that it has not offered,
sold or otherwise made available and will not offer, sell or
otherwise make available any Notes which are the subject of the
offering contemplated by this Prospectus as completed by the Final
Terms in relation thereto to any retail investor in the EEA. For
the purposes of this provision:
(a) the expression "retail investor" means a person who is one
(or more) of the following:
(i) a retail client as defined in point (11) of Article 4(1) of MiFID II; or
(ii) a customer within the meaning of the IDD, 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 (as defined below); and
(b) the expression an "offer" includes the communication in any
form and by any means of sufficient information on the terms of the
offer and the Notes to be offered so as to enable an investor to
decide to purchase or subscribe the Notes.
If the Final Terms in respect of any Notes specifies
"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, and agreed, 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 has not made and will not make an offer of Notes which are the
subject of the offering contemplated by this Prospectus as
completed by the Final Terms in relation thereto to the public in
that Relevant Member State except that it may, with effect from and
including the Relevant Implementation Date, make an offer of such
Notes to the public in that Relevant Member State:
(a) Qualified investors: at any time to any legal entity which
is a qualified investor as defined in the Prospectus Directive;
(b) Fewer than 150 offerees: at any time to fewer than 150
natural or legal persons (other than qualified investors as defined
in the Prospectus Directive), subject to obtaining the prior
consent of the relevant Dealer or Dealers nominated by the Issuer
for any such offer; or
(c) Other exempt offers: at any time in any other circumstances
falling within Article 3(2) of the Prospectus Directive.
provided that no such offer of Notes referred to in (a) to (c)
above shall require the Issuer or any Dealer to publish a
prospectus pursuant to Article 3 of the Prospectus Directive or
supplement a prospectus pursuant to Article 16 of the Prospectus
Directive.
For the purposes of this provision, the expression an "offer of
Notes to the public" in relation to any Notes in any Relevant
Member State means the communication in any form and by any means
of sufficient information on the terms of the offer and the Notes
to be offered so as to enable an investor to decide to purchase or
subscribe the Notes, as the same may be varied in that Member State
by any measure implementing the Prospectus Directive in that Member
State, the expression "Prospectus Directive" means Directive
2003/71/EC (as amended including by Directive 2010/73/EU), and
includes any relevant implementing measure in the Relevant Member
State.
United Kingdom
Each Dealer has represented and agreed, and each further Dealer
appointed under the Programme will be required to represent and
agree, that:
(a) in relation to any Notes which have a maturity of less than
one year, (i) it is a person whose ordinary activities involve it
in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of its business and (ii) it
has not offered or sold and will not offer or sell any Notes other
than to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as
principal or as agent) for the purposes of their businesses or who
it is reasonable to expect will acquire, hold, manage or dispose of
investments (as principal or agent) for the purposes of their
businesses where the issue of the Notes would otherwise constitute
a contravention of Section 19 of the FSMA by the Issuer;
(b) it has only communicated or caused to be communicated and
will only communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning of
Section 21 of the FSMA) received by it in connection with the issue
or sale of any Notes in circumstances in which Section 21(1) of the
FSMA does not apply to the Issuer; and
(c) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in
relation to any Notes in, from or otherwise involving the United
Kingdom.
Japan
The Notes have not been and will not be registered under the
Financial Instruments and Exchange Act of Japan (Act No.25 of
1948), as amended (the "FIEA"). Accordingly, each Dealer has
represented and agreed, and each further Dealer appointed under the
Programme will be required to represent and agree, that it has not,
directly or indirectly, offered or sold and will not, directly or
indirectly, offer to sell any Notes in Japan or to, or for the
benefit of, a resident of Japan (which term as used herein means
any person resident in Japan, including any corporation or other
entity organised under the laws of Japan), or to others for
re--offering or resale, directly or indirectly, in Japan or to, or
for the benefit of, any resident in Japan, except pursuant to an
exemption from the registration requirements of, and otherwise in
compliance with, FIEA and other relevant laws and regulations of
Japan.
Kingdom of Denmark
Each Dealer has represented and agreed and each further Dealer
appointed under the Programme will be required to represent and
agree that it has not offered or sold and will not offer, sell or
deliver any Notes directly or indirectly in the Kingdom of Denmark
by way of a public offering, unless in compliance with the
Consolidated Danish Act No. 12 of 8 January 2018 on Capital
Markets, as amended from time to time, and Executive Orders issued
thereunder and Executive Order No. 747 of 7 June 2017 to the Danish
Financial Business Act to the extent applicable.
Notes issued through the VP will be negotiable instruments and
will not be subject to any restrictions on their free negotiability
within the Kingdom of Denmark.
France
Each of the Dealers has represented and agreed, and each further
Dealer appointed under the Programme will be required to represent
and agree, that it has not offered or sold and will not offer or
sell, directly or indirectly, any Notes to the public in France and
it has not distributed or caused to be distributed and will not
distribute or cause to be distributed to the public in France, this
Prospectus, the relevant Final Terms or any other offering material
relating to the Notes and such offers, sales and distributions have
been and will be made in France only to (a) persons providing
investment services relating to portfolio management for the
account of third parties (personnes fournissant le service de
gestion de portefeuille pour compte de tiers), and/or (b) qualified
investors (investisseurs qualifiés), other than individuals, acting
for their own account, as defined in, and in accordance with,
Articles L.411-1, L.411-2 and D.411-1 of the French Code monétaire
et financier.
General
Each Dealer has agreed and each further Dealer appointed under
the Programme will be required to agree that it will (to the best
of its knowledge and belief) comply with all applicable securities
laws and regulations in force in any jurisdiction in which it
purchases, offers, sells or delivers Notes or possesses or
distributes this Prospectus and will obtain any consent, approval
or permission required by it for the purchase, offer, sale or
delivery by it of Notes under the laws and regulations in force in
any jurisdiction to which it is subject or in which it makes such
purchases, offers, sales or deliveries and neither the Issuer nor
any of the other Dealers shall have any responsibility
therefor.
None of the Issuer and the Dealers represents that Notes may at
any time lawfully be sold in compliance with any applicable
registration or other requirements in any jurisdiction, or pursuant
to any exemption available thereunder, or assumes any
responsibility for facilitating such sale.
General Information
Authorisation
The current update of the Programme and the issue of Notes have
been duly authorised by a resolution of the Board of Directors of
the Issuer dated 12 September 2018.
Listing, Approval and Admission of Notes
It is expected that each Tranche of Notes which is admitted to
the Official List and trading on the London Stock Exchange's
regulated market will be admitted separately as and when issued,
subject only to the issue of a Global Note or Notes initially
representing the Notes of such Tranche. Application has been made
to the UK Listing Authority for Notes issued under the Programme to
be admitted to the Official List and to the London Stock Exchange
for such Notes to be admitted to trading on the London Stock
Exchange's regulated market. The listing of the Programme is
expected to be granted on or before 1 November 2018.
Documents Available
For the period of 12 months following the date of this
Prospectus, copies of the following documents will, when published,
be available for inspection from the registered office of the
Issuer and from the specified office of the Paying Agent for the
time being:
(a) the constitutional documents (with a direct English
translation thereof) of the Issuer;
(b) the audited financial statements of the Issuer in respect of
the financial year ended 31 December 2017 together with the audit
reports prepared in connection therewith. The Issuer currently
prepares audited non--consolidated accounts on an annual basis;
(c) the most recently published audited annual financial
statements of the Issuer and the most recently published unaudited
interim financial statements (if any) of the Issuer, in each case
together with any audit or review reports prepared in connection
therewith. The Issuer currently prepares unaudited
non--consolidated interim financial statements on a quarterly
basis;
(d) the Agency Agreement, the Deed of Covenant and the forms of
the Global Notes, the Notes in definitive form, the Receipts, the
Coupons and the Talons;
(e) a copy of this Prospectus; and
(f) any future offering circulars, prospectuses, information
memoranda and supplements including Final Terms (save that a Final
Terms relating to a Note which is neither admitted to trading on a
regulated market in the European Economic Area nor offered in the
European Economic Area in circumstances where a prospectus is
required to be published under the Prospectus Directive will only
be available for inspection by a holder of such Note and such
holder must produce evidence satisfactory to the Issuer and the
Paying Agent as to its holding of Notes and identity) to this
Prospectus and any other documents incorporated herein or therein
by reference.
For the period of 12 months following the date of this
Prospectus, copies of each VP Issuing Agency Agreement relating to
VP Systems Notes of the relevant Series will be available for
inspection from the registered office of the Issuer and from the
specified office of the VP Issuing Agent for the time being (save
that a VP Issuing Agency Agreement relating to a Note which is
neither admitted to trading on a regulated market in the European
Economic Area nor offered in the European Economic Area in
circumstances where a prospectus is required to be published under
the Prospectus Directive will only be available for inspection by a
holder of such Note and such holder must produce evidence
satisfactory to the Issuer and the VP Issuing Agent as to its
holding of Notes and identity).
Clearing Systems
The Bearer Notes have been accepted for clearance through
Euroclear and Clearstream, Luxembourg. The appropriate Common Code
and ISIN for each Tranche of Notes allocated by Euroclear and
Clearstream, Luxembourg will be specified in the applicable Final
Terms. If the Notes are to clear through an additional or
alternative clearing system (including the VP) the appropriate
information will be specified in the applicable Final Terms.
Euroclear, Clearstream, Luxembourg and the VP are the entities in
charge of keeping records.
The address of Euroclear is Euroclear Bank SA/NV, 1 Boulevard du
Roi Albert II, B-1210 Brussels, Belgium, the address of
Clearstream, Luxembourg is Clearstream Banking, 42 Avenue JF
Kennedy, L-1855 Luxembourg, Luxembourg, and the address of VP is
Weidekampsgade 14, PO Box 4040, DK-2300, Copenhagen S, Denmark. The
address of any alternative clearing system will be specified in the
applicable Final Terms.
Conditions for determining price
The price and amount of Notes to be issued under the Programme
will be determined by the Issuer and each relevant Dealer at the
time of issue in accordance with prevailing market conditions.
Significant or Material Change
There has been no significant change in the financial position
of the Issuer since 30 June 2018 and there has been no material
adverse change in the financial position or prospects of the Issuer
since 30 June 2018.
Litigation
There are no governmental, legal or arbitration proceedings
(including any such proceedings which are pending or threatened of
which the Issuer is aware), during the 12 months before the date of
this Prospectus which may have, or have had in the recent past,
significant effects on the Issuer's financial position or
profitability.
Auditors
The auditors of the Issuer are PricewaterhouseCoopers,
Statsautoriseret Revisionspartnerselskab (state-authorised public
accountants), who have audited the Issuer's accounts, without
qualification, in accordance with Danish Standards on Auditing for
the financial years, which ended on 31 December 2016 and 31
December 2017 respectively. The auditors of the Issuer have no
material interest in the Issuer. The audited annual financial
statements of the Issuer for the financial years ended 31 December
2016 and 31 December 2017 have been prepared in accordance with
provisions of the Danish Financial Business Act.
PricewaterhouseCoopers, Statsautoriseret Revisionspartnerselskab is
a member of "FSR Danske Revisorer", the Danish Association of State
Authorised Public Accountants.
The auditors of Nordjyske Bank were BDO, Statsautoriseret
Revisionsaktieselskab (state-authorised public accountants) and
Beierholm, Statsautoriseret Revisionspartnerselskab
(state-authorised public accountants), who have audited the
Nordjyske Bank's accounts, without qualification, in accordance
with Danish Standards on Auditing for the financial year, which
ended on 31 December 2016.
The auditors of Nordjyske Bank were Beierholm, Statsautoriseret
Revisionspartnerselskab (state-authorised public accountants), who
have audited the Nordjyske Bank's accounts, without qualification,
in accordance with Danish Standards on Auditing for the financial
year, which ended on 31 December 2017.
Both BDO, Statsautoriseret Revisionsaktieselskab and Beierholm,
Statsautoriseret Revisionspartnerselskab are members of "FSR Danske
Revisorer", the Danish Association of State Authorised Public
Accountants.
Auditors report on the compilation of pro forma financial
information
PricewaterhouseCoopers LLP of PricewaterhouseCoopers,
Statsautoriseret Revisionspartnerselskab Platanvej 4DK-7400 Herning
Denmark has given, and has not withdrawn, its consent to the
inclusion in this Base Prospectus of its report on the unaudited
pro forma financial information, in the form and context set out in
"Unaudited Pro Forma Financial Information - Accountants' report of
unaudited pro forma financial information" to this Base Prospectus
and has authorised the content of that report solely for the
purposes of item 5.5.4R(2)(f) of the Prospectus Rules.
Dealers transacting with the Issuer
Certain of the Dealers and their affiliates have engaged, and
may in the future engage, in investment banking and/or commercial
banking transactions with, and may perform services to the Issuer
and its affiliates in the ordinary course of business.
Yield
The yield of each Tranche of Notes bearing interest at a fixed
rate as set out in the relevant Final Terms will be calculated as
of the relevant issue date on an annual or semi-annual basis using
the relevant issue price. It is not an indication of future
yield.
Legal Entity Identifier
The Legal Entity Identifier of the Issuer is
2138002M5U5K4OUMVV62.
Index of Defined Terms
$.................................................................................
v
GBP.................................................................................
v
EUR.................................................................................
v
2016
Accounts.....................................................
21
2017
Accounts.....................................................
21
30/360.............................................................
43, 50
30E/360.................................................................
50
30E/360
(ISDA)................................................... 51
360/360.................................................................
50
Accrual
Period...................................................... 43
Actual/360............................................................
50
Actual/365
(Fixed)............................................... 50
Actual/365 (Sterling)...........................................
50
Actual/Actual.......................................................
49
Actual/Actual (ICMA)........................................
43
Actual/Actual (ISDA)..........................................
49
additional own funds requirements.................... 9
Agency Agreement..............................................
35
Agent......................................................................
35
Amortised Face Amount.................................... 63
applicable Final Terms........................................
35
Bank..........................................................................
i
Banking
Day......................................................... 71
Basel
III...................................................................
8
Bearer
Notes...................................................... i,
35
Benchmarks Regulation........................................
ii
Bond
Basis............................................................
50
BRRD.......................................................................
9
BRRD Amendment Proposal............................ 17
Business
Day........................................................ 44
Calculation
Agent................................................ 45
Calculation Amount............................................
42
CIBOR...................................................................
47
Clearstream, Luxembourg........................ i, 23, 37
combined
buffer..................................................... 9
Common Depositary...........................................
23
Common Safekeeper..........................................
23
Conditions......................................................
27, 35
Couponholders.....................................................
36
Coupons................................................................
35
Covered
Bonds..................................................... 39
CRA
Regulation...................................................
20
CRD IV Amendment Proposal............................ 9
CRD IV
Directive................................................... 8
CRD IV
Regulation................................................ 8
Danish Business Day...........................................
58
Danish Financial Business Act............................. 9
Danish
Kroner.........................................................
v
Danish Recovery and Resolution Act.............. 15
Danish Remedies.................................................
75
Danish VP Registration Order............................ 35
Day Count Fraction...................................... 43,
49
Dealer.........................................................................
i
Dealers.......................................................................
i
Deed of Covenant......................................... 24,
36
Deposit Guarantee Schemes.............................. 11
Designated Maturity............................................
45
Determination Period..........................................
43
DFSA........................................................................
6
DKK.........................................................................
v
ESMA.......................................................................
ii
ESMA Benchmarks Register................................ ii
Established
Rate.................................................. 42
EURIBOR.............................................................
47
euro....................................................................
v, 42
Eurobond
Basis.................................................... 50
Euroclear......................................................
i, 23, 37
Event of
Default.................................................. 70
Exchange
Date..................................................... 23
Exchange
Event................................................... 23
Exchange
Notice.................................................. 40
FATCA...................................................................
17
FIEA.....................................................................
115
Final
Terms...............................................................
i
First Reset
Date.................................................... 53
First Reset
Margin................................................ 53
First Reset
Period.................................................. 53
First Reset Rate of Interest.................................
53
Fixed Interest
Period............................................ 42
Floating
Rate........................................................ 45
Floating Rate Option...........................................
45
Global
Note...........................................................
35
holder of
Notes..................................................... 37
holders....................................................................
36
ICSDs............................................................
17, 113
Indebtedness for Borrowed Money.................. 72
Initial Mid-Swap Rate.........................................
53
Interest
Amount................................................... 49
Interest Payment Date........................................
44
Investor's
Currency.............................................. 19
ISDA
Definitions..................................................
45
ISDA
Rate.............................................................
45
Issuer............................................................
i, 35, 79
LCR
Ratio.............................................................
99
LIBOR...................................................................
48
listed...........................................................................
i
London Business Day.........................................
51
London Stock Exchange........................................
i
Long Maturity Note.............................................
57
Luxembourg Business Day................................ 58
Markets in Financial Instruments Directive........ i
Mid-Market Swap Rate......................................
53
Mid-Market Swap Rate Quotation................... 54
Mid-Swap
Rate.................................................... 54
minimum own funds requirement....................... 9
MREL....................................................................
16
NGN........................................................................
23
NIBOR...................................................................
48
NOK..........................................................................
v
Norwegian
Kroner.................................................. v
Noteholder.............................................................
37
Noteholders...........................................................
36
Notes...................................................................
i, 35
Official
List...............................................................
i
Paying
Agents.......................................................
35
Payment
Day........................................................ 59
Permanent Global Note......................................
23
Permitted Security Interest.................................
39
PRIIPs Regulation...............................................
26
Principal
Subsidiary............................................. 70
Proceedings...........................................................
76
Programme...............................................................
i
Programme Agreement..................................... 114
Prospectus.............................................................
26
Prospectus Directive...................................... 26,
27
Put
Notice..............................................................
63
Receipts.................................................................
35
Redeemed Notes..................................................
62
Redenomination Date.........................................
42
Reference
Banks.................................................. 48
Reference
Rate..................................................... 48
Relevant Date................................................
67, 68
relevant
Dealer.........................................................
i
Relevant Indebtedness.......................................
39
Relevant
Notes..................................................... 42
Relevant Screen Page..........................................
48
Relevant
Time...................................................... 48
Reset Date......................................................
45, 54
Reset Determination Date..................................
54
Reset
Margin.........................................................
54
Reset
Period..........................................................
54
Reset Reference Banks.......................................
54
Responsible
Person................................................ iii
Revised Deposit Guarantee Schemes Directive 11
Securities
Act..........................................................
iii
Securities Trading Act.........................................
35
Security
Interest................................................... 39
SEK...........................................................................
v
Selection
Date....................................................... 62
Series......................................................................
36
SIFI.........................................................................
99
SREP.........................................................................
9
Sterling......................................................................
v
STIBOR.................................................................
49
Subsequent Reset Date.......................................
54
Subsequent Reset Margin...................................
54
Subsequent Reset Period....................................
54
Subsequent Reset Rate of Interest................... 54
Subsidiary..............................................................
72
sub--unit..................................................................
43
Swedish
Kroner....................................................... v
Talons....................................................................
35
TARGET2 System...............................................
44
Tax Jurisdiction.............................................
67, 68
Temporary Global Note......................................
23
Tier 2 Capital.................................................
11, 38
TLAC.....................................................................
16
Tranche..................................................................
36
Treaty.....................................................................
42
U.S.
dollars...............................................................
v
U.S.$.........................................................................
v
UK Listing
Authority............................................... i
VaR........................................................................
96
Voting VP Systems Notes...................................
74
VP........................................................................
i, 35
VP Issuing Agency Agreement.......................... 35
VP Issuing
Agent.................................................. 35
VP
Notes.............................................................
i, 35
VP Systems
Notes.................................................... i
ISSUER
Ringkjøbing Landbobank Aktieselskab
Torvet 1
DK-6950 Ringkøbing
Denmark
ISSUING AND PRINCIPAL PAYING AGENT
BNP Paribas Securities Services, Luxembourg Branch
60, Avenue J.F. Kennedy
L - 1855 Luxembourg
Luxembourg
LEGAL ADVISERS
To the Issuer as to Danish To the Dealers as to English
law law
Gorrissen Federspiel Advokatpartnerselskab Clifford Chance LLP
Axeltorv 2 10 Upper Bank Street
DK-1609 Copenhagen V Canary Wharf
Denmark London E14 5JJ
AUDITORS
To the Issuer
PricewaterhouseCoopers, Statsautoriseret Revisionspartnerselskab
Platanvej 4
DK-7400 Herning
Denmark
LISTING AGENT
BNP Paribas Securities Services, Luxembourg Branch
60, Avenue J.F. Kennedy
L-1855 Luxembourg
Luxembourg
ARRANGER
Nordea Bank Abp
Smålandsgatan 17
105 71 Stockholm
Sweden
DEALERS
Danske Bank A/S Landesbank Baden-Württemberg
2-12 Holmens Kanal Am Hauptbahnhof 2
DK-1092 Copenhagen K 70173 Stuttgart
Denmark Germany
Nordea Bank Abp Nykredit Bank A/S
Smålandsgatan 17 Kalvebod Brygge 1-3
105 71 Stockholm DK-1780 Copenhagen V
Sweden Denmark
Skandinaviska Enskilda Banken AB (publ)
Kungsträdgårdsgatan 8
106 40 Stockholm
Sweden
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
PDIFSIFLEFASELF
(END) Dow Jones Newswires
November 02, 2018 11:06 ET (15:06 GMT)
Ringkjoebing 25 (LSE:80VD)
Historical Stock Chart
From Oct 2024 to Nov 2024
Ringkjoebing 25 (LSE:80VD)
Historical Stock Chart
From Nov 2023 to Nov 2024
