Svenska Handelsbanken AB (publ)

Transcription

1 OFFERING CIRCULAR DATED 13 JANUARY 2014 Svenska Handelsbanken AB (publ) (Incorporated as a public limited liability banking company in The Kingdom of Sweden) Issue of 1,500,000,000 Callable Resettable Dated Subordinated Notes due 15th January 2024 under its U.S.$50,000,000,000 Euro Medium Term Note Programme Issue Price: per cent. The 1,500,000,000 Callable Resettable Dated Subordinated Notes due 15th January 2024 (the Notes ) are being issued by Svenska Handelsbanken AB (publ) (the Issuer or the Bank ) as series 321 under its U.S.$50,000,000,000 Euro Medium Term Note Programme (the Programme ). As set out in the Issue Terms beginning on page 10 of this Offering Circular (the Issue Terms ), the Notes will bear interest from (and including) 15th January 2014 (the Issue Date ) to (but excluding) 15th January 2019 (the Call Date ) at a fixed rate of per cent. per annum. From (and including) the Call Date to (but excluding) 15th January 2024, the Notes will bear interest at a fixed rate of per cent. per annum (the Margin ) above the then applicable annual mid swap rate for euro swap transactions with a maturity of five years determined as described in paragraph 14(i) of the Issue Terms. Interest on the Notes will be payable annually in arrear on 15th January in each year (each an Interest Payment Date ). Subject as provided herein, and subject to the prior approval of the Swedish Financial Supervisory Authority (the SFSA ), the Notes may be redeemed at the option of the Issuer in whole, but not in part only, (i) on the Call Date, (ii) at any time for certain withholding tax reasons as set out under Condition 7(b) in the Terms and Conditions of the Notes (the Base Conditions ) set out in the base Offering Circular dated 14th June, 2013 relating to the Programme (the Programme Offering Circular ) or (iii) upon the occurrence of a Capital Event or a Tax Event (each as defined in Condition 7(n)), in accordance with the Issue Terms and the Base Conditions. This Offering Circular comprises a prospectus for the purposes of Directive 2003/71/EC, as amended, which includes the amendments made by Directive 2010/73/EU to the extent that such amendments have been implemented in a relevant Member State of the European Economic Area (the Prospectus Directive ). This Offering Circular has been approved by the Central Bank of Ireland (the Central Bank ) as competent authority under the Prospectus Directive (as defined below). The Central Bank only approves this Offering Circular as meeting the requirements imposed under Irish law and European Union ( EU ) law pursuant to the Prospectus Directive. Application has been made to the Irish Stock Exchange for the Notes to be admitted to the official list (the Official List ) and trading on its regulated market (the Main Securities Market ). The Main Securities Market is a regulated market for the purposes of Directive 2004/39/EC. The Notes are expected to be rated A by Standard & Poor s Credit Market Services Europe Limited ( Standard & Poor s ) and A+ by Fitch Ratings Ltd ( Fitch ). Each of S&P and Fitch is established in the European Union and is registered under Regulation (EC) No. 1060/2009 (as amended) (the CRA Regulation ) and is, accordingly, included in the list of credit rating agencies published by the European Securities and Markets Authority ( ESMA ) on its website ( in accordance with such Regulation. A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency. An investment in the Notes involves certain risks. For a discussion of these risks see Risk Factors on pages 15 to 26 of the Programme Offering Circular and the risks set out in Risk Factors beginning on page 7 of this Offering Circular. The Notes will be in bearer form and will be initially represented by a global Note which will be delivered on or prior to the Issue Date to a common depositary (the Common Depositary ) for Euroclear Bank SA/NV ( Euroclear ) and Clearstream Banking, société anonyme ( Clearstream, Luxembourg ). Joint Lead Managers BofA Merrill Lynch Credit Suisse Société Générale Corporate & Investment Banking Svenska Handelsbanken AB (publ)

2 The Bank accepts responsibility for the information contained in this Offering Circular. To the best of the knowledge and belief of the Bank (which has taken all reasonable care to ensure that such is the case), the information contained in this Offering Circular is in accordance with the facts and does not omit anything likely to affect the import of such information. This Offering Circular is to be read in conjunction with all documents which are incorporated herein by reference (see Documents Incorporated by Reference on page 4 of this Offering Circular). This Offering Circular shall be read and construed on the basis that such documents are so incorporated and form part of this Offering Circular. None of Credit Suisse Securities (Europe) Limited, Merrill Lynch International, Société Générale or Svenska Handelsbanken AB (publ) (in its capacity as a joint lead manager) (together, the Joint Lead Managers ), nor Deutsche Trustee Company Limited (the Trustee ) have separately verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility is accepted by the Joint Lead Managers or the Trustee as to the accuracy or completeness of the information contained in this Offering Circular or any other information provided by the Bank in connection with the Notes. Neither the Joint Lead Managers nor the Trustee accept any liability in relation to the information contained in this Offering Circular or any other information provided by the Bank in connection with the Notes. No person has been authorised to give any information or to make any representation not contained in or not consistent with this Offering Circular or any other information supplied in connection with the Notes and, if given or made, such information or representation must not be relied upon as having been authorised by the Bank, any of the Joint Lead Managers or the Trustee. Neither this Offering Circular nor any other information supplied in connection with the Notes is intended to provide the basis of any credit or other evaluation and should not be considered as recommendations by the Bank, any of the Joint Lead Managers or the Trustee that any recipient of this Offering Circular, or any further information supplied in connection with the Notes, should purchase any of the Notes. Each investor contemplating purchasing any of the Notes should make its own independent investigation of the financial condition and affairs, and its own appraisal of the credit worthiness, of the Bank and its consolidated subsidiaries (the Group ). Neither this Offering Circular nor any other information supplied in connection with the Notes constitutes an offer or invitation by or on behalf of the Bank, any of the Joint Lead Managers or the Trustee to any person to subscribe for or to purchase any of the Notes. The delivery of this Offering Circular does not at any time imply that the information contained herein concerning the Bank is correct at any time subsequent to the date hereof or that any other information supplied in connection with the Notes is correct as of any time subsequent to the date indicated in the document containing the same. The Joint Lead Managers and the Trustee expressly do not undertake to review the financial condition or affairs of the Bank and its subsidiaries during the life of the Notes or to advise any investor in the Notes of any information coming to their attention. Investors should review, inter alia, the most recently published annual report of the Bank and the annual accounts of the Bank and of the Group, and, if published later, the most recently published interim financial statements of the Group, when deciding whether or not to purchase Notes. The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the Securities Act ), or the securities laws of any U.S. state and are subject to U.S. tax law requirements. Subject to certain exceptions, the Notes may not be offered, sold or delivered within the United States or to U.S. persons (see Subscription and Sale on pages 104 to 106 of the Programme Offering Circular). This Offering Circular does not constitute an offer to sell or the solicitation of an offer to buy 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 Offering Circular and the offer or sale of the Notes are subject to the above restrictions and may be restricted by law in certain other jurisdictions. None of the Issuer, the Joint Lead Managers or the Trustee represents that this Offering Circular may be lawfully 2

3 distributed, or that the 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, the Joint Lead Managers or the Trustee which is intended to permit a public offering of the Notes or distribution of this Offering Circular in any jurisdiction where action for that purpose is required. Accordingly, no Notes may be offered or sold, directly or indirectly, and neither this Offering Circular 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 Offering Circular or any Notes come must inform themselves about, and observe, any such restrictions. In particular, there are restrictions on the distribution of this Offering Circular and the offer or sale of the Notes in the United States, the European Economic Area, the United Kingdom, Sweden and Japan (see Subscription and Sale on pages 104 to 106 of the Programme Offering Circular). In this Offering Circular, references to euro or are to the currency of the member states of the European Union that adopt or have adopted the single currency in accordance with the Treaty on the Functioning of the European Union, as amended. Terms and expressions used and not otherwise defined in this Offering Circular shall have the meanings given in the Programme Offering Circular or the Issue Terms (including the Annex), except where the context otherwise requires. The Notes may not be a suitable investment for all investors. It is advisable that each potential investor in the Notes determines the suitability of that investment in light of its own circumstances. In particular, it is advisable that each potential investor (a) has 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 Offering Circular or any applicable supplement; (b) has 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 such investment will have on its overall investment portfolio; (c) has sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes, including where the potential investor s currency is other than euro; (d) understands thoroughly the terms of the Notes and is familiar with the behaviour of the relevant financial markets; and (e) is 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. In connection with the issue of the Notes, Société Générale (the Stabilising Manager ) (or persons acting on behalf of the Stabilising Manager) 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, there is no assurance that the Stabilising Manager (or persons acting on behalf of the Stabilising Manager) will undertake stabilisation action. Any stabilisation action or over-allotment may begin on or after the date on which adequate public disclosure of the terms of the offer of the Notes is made and, if begun, may be ended 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 Notes. Any such stabilisation action or over-allotment must be conducted by the Stabilising Manager (or persons acting on behalf of the Stabilising Manager) in accordance with all applicable laws and rules. 3

4 DOCUMENTS INCORPORATED BY REFERENCE The following documents, which have previously been published in English and have been filed with the Central Bank, shall be incorporated by reference in, and form part of, this Offering Circular: (a) the sections of the Programme Offering Circular as set out in the table below, which can be viewed online at ( 4a8b-a021-2ad530af1a40.pdf): Page references (inclusive) Overview of the Programme... 8 to 14 Risk Factors to 26 Forms of the Notes Terms and Conditions of the Notes to 90 Use of Proceeds Svenska Handelsbanken AB (publ) to 99 Taxation to 103 Subscription and Sale to 106 (b) (c) (d) (e) (f) the annual report of the Bank and the annual audited consolidated accounts of the Group in respect of the financial year ended 31st December, 2012, which can be viewed online at ( en_hb_12_highlights/$file/hb_12_en_highlights.pdf); the annual report of the Bank and the annual audited consolidated accounts of the Group in respect of the financial year ended 31st December, 2011, which can be viewed online at ( en_hb_11_eng_ar/$file/hb_11_eng_ar.pdf); the interim unaudited consolidated financial statements of the Group for the three month period ended 31st March, 2013 which can be viewed online at ( en_hb_q1_13_eng_report/$file/hb_q1_13_eng_report.pdf); the unaudited consolidated interim financial information of the Issuer for the six-month period ended 30th June, 2013 (which appear on pages (inclusive) of the Issuer s document entitled Interim Report January-June 2013 (the Second Quarter Interim Report ) and the Auditor's review report in relation thereto (which appears on page 60 of the Issuer s Second Quarter Interim Report) which can be viewed online at ( en_hb_q2_13_eng_report/$file/hb_q2_13_eng_report.pdf); and the unaudited consolidated interim financial information of the Issuer for the nine-month period ended 30th September, 2013 (which appear on pages (inclusive) of the Issuer s document entitled Interim Report January-September 2013 (the Third Quarter Interim Report ) and the Auditor's review report in relation thereto (which appears on page 61 of the Issuer s Third Quarter Interim Report) which can be viewed online at ( en_hb_q3_13_eng_report/$file/hb_q3_13_eng_report.pdf). save that any statement contained herein or in a document which is incorporated by reference herein shall be deemed to be modified or superseded for the purpose of this Offering Circular to the extent that a statement contained in any document subsequently incorporated by reference herein by way of a supplement prepared in accordance with Article 16 of the Prospectus Directive modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified 4

5 or superseded shall not, except as so modified or superseded, constitute a part of this Offering Circular. Any information contained in any of the documents listed above which is not expressly incorporated by reference in this Offering Circular does not form part of this Offering Circular and is either not relevant to investors or is covered elsewhere in the Offering Circular. Copies of any or all of the documents which are incorporated herein by reference can be obtained from the registered office of the Bank in Stockholm or on the websites specified above. Any documents themselves incorporated by reference in the documents incorporated by reference in this Offering Circular shall not form part of this Offering Circular. In the event of any significant new factor, material mistake or inaccuracy relating to the information included in this Offering Circular which is capable of affecting the assessment of the Notes arising or being noted prior to when trading in the Notes on the Irish Stock Exchange begins, the Bank will prepare a supplement to this Offering Circular. 5

6 TABLE OF CONTENTS DOCUMENTS INCORPORATED BY REFERENCE... 4 RISK FACTORS... 7 ISSUE TERMS CAPITAL BASE SUBSCRIPTION AND SALE GENERAL INFORMATION

7 RISK FACTORS The Issuer believes that the risk factors incorporated by reference herein from pages 15 to 26 of the Programme Offering Circular and the risk factors set out below may affect its ability to fulfil its obligations under the Notes. All such risk 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. Risk factors which the Issuer believes may be material for the purpose of assessing the market risks associated with the Notes are incorporated by reference herein from pages 15 to 26 of the Programme Offering Circular and set out below. The Issuer believes that the risk factors incorporated by reference herein and the risk factors set out below represent the principal risks inherent in investing in the Notes, but the Issuer may be unable to pay interest, principal or other amounts on or in connection with the Notes 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 incorporated by reference herein or set out elsewhere in this Offering Circular and reach their own views prior to making any investment decision. Loss absorption at the point of non-viability of the Issuer and resolution On 6 June 2012, the European Commission published a legislative proposal for a directive providing for the establishment of an EU-wide framework for the recovery and resolution of credit institutions and investment firms (the draft RRD ). The stated aim of the draft RRD is to provide relevant authorities with common tools and powers to address banking crises pre-emptively in order to safeguard financial stability and minimise taxpayers exposure to losses. The powers provided to resolution authorities in the draft RRD include write down/conversion powers to ensure capital instruments (including, but not limited to, instruments included in regulatory capital) fully absorb losses at the point of non-viability of the issuing institution ( RRD Non-Viability Loss Absorption ). Accordingly, the draft RRD contemplates that resolution authorities will be required to write down such capital instruments in full on a permanent basis, or convert them in full into common equity tier 1 instruments, immediately before or together with any resolution action is taken (see below). The draft RRD currently provides, inter alia, that resolution authorities shall exercise their write down powers in a way that results in (i) common equity tier 1 instruments being written down first in proportion to the relevant losses and (ii) thereafter, the principal amount of other capital instruments being converted into common equity tier 1 instruments or written down on a permanent basis. Common equity tier 1 instruments may be issued to holders of other capital instruments that are written down. The point of non-viability under the draft RRD is the point at which the national resolution authority determines that the institution meets the condition for resolution, which is defined as: (a) the institution is failing or likely to fail, which means: (i) (ii) (iii) (iv) the institution has incurred/is likely to incur in a near future losses depleting all or substantially all its own funds; and/or its assets are/will be in the near future less than its liabilities; and/or the institution is/will be in a near future unable to pay its obligations; and/or the institution requires extraordinary public financial support; (b) there is no reasonable prospect that a private action would prevent the failure; 7

8 . The draft RRD contemplates that it will be implemented in Member States by 31st December 2014, with the RRD Non-Viability Loss Absorption provisions (inter alia) becoming effective as of 1 January An additional bail-in tool, which comprises a more general power for resolution authorities to write down the claims of unsecured creditors of a failing institution and/or to convert unsecured debt claims into equity, is expected to be implemented under the RRD as of 1st January The draft RRD currently provides that a write down/conversion resulting from the use of the bail-in tool would, in principal, follow the ordinary allocation of losses and ranking in an insolvency of the relevant institution. The draft RRD currently represents the only official proposal for the implementation in the European Economic Area of the non-viability requirements set out in the press release dated 13th January 2011 issued by the Basel Committee on Banking Supervision (the Basel Committee ) entitled Minimum requirements to ensure loss absorbency at the point of non-viability (the Basel III Non-Viability Requirements ). The Basel III Non-Viability Requirements form part of the broader Basel III package of new capital and liquidity requirements intended to reinforce capital standards and to establish minimum liquidity standards for credit institutions. The Basel Committee originally contemplated implementation of the broader Basel III reforms as of 1st January However, implementation of these reforms in the European Economic Area has been delayed but will be by way of the CRD IV Directive (as defined in Condition 7(n)) and the CRR (as defined in Condition 7(n)). These texts were published in the Official Journal of the European Union on 27th June They must be applied from 1st January CRR contemplates that the Basel III Non-Viability Requirements will be implemented in the European Economic Area by way of the RRD and the RRD Non-Viability Loss Absorption provisions. If such statutory loss absorption at the point of non-viability is not implemented by 31st December 2015 then CRR indicates that the European Commission shall review and report on whether a provision should be included in CRR and, in light of that review, come forward with appropriate legislative proposals. It is currently unclear whether RRD Non-Viability Loss Absorption, when implemented, will apply to capital instruments (such as the Notes) that are already in issue at that time or whether certain grandfathering rules will apply. If and to the extent that such provisions, when implemented, apply to the Notes, and/or if the Basel III Non-Viability Requirements become applicable to the Notes at any time, the Notes may be subject to write down or conversion to common equity tier 1 instruments upon the occurrence of the relevant trigger event, which may result in Noteholders losing some or all of their investment in the Notes. The exercise of any such power or any suggestion or anticipation of such exercise could, therefore, materially adversely affect the value of the Notes. In addition to RRD Non-Viability Loss Absorption, the draft RRD provides resolution authorities with broader powers to implement other resolution measures with respect to distressed banks, which may include (without limitation) the replacement or substitution of the bank as obligor in respect of debt instruments, modifications to 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 discontinuing the listing and admission to trading of financial instruments. The draft RRD is not in final form and changes may be made to it in the course of the legislative process. In addition, as noted above, it is unclear whether the Basel III Non-Viability Requirements could be applied in respect of the Notes ahead of implementation of the RRD. Accordingly, it is not yet possible to assess the full impact of the relevant loss absorption provisions. There can be no assurance that, once implemented, the availability of applicable loss absorption provisions or the 8

9 taking of any actions currently contemplated or as finally reflected in such provisions would not adversely affect the price or value of a Noteholder s investment in the Notes and/or the ability of the Issuer to satisfy its obligations under the Notes. Redemption upon occurrence of a Tax Event or a Capital Event Upon the occurrence of a Tax Event or a Capital Event (each as defined in Condition 7(n) set out in the Annex to the Issue Terms) but subject in each case to the approval of the SFSA as set out in Condition 7(i) the Bank may, at its option, redeem, all (but not some only) of the Notes upon the terms set out in Condition 7(n). There can be no assurance that Noteholders will be able to reinvest the amounts received upon redemption at a rate that will provide the same rate of return as their investments in the Notes. The interest rate reset could affect the market value of the Notes The Notes will initially bear interest at a Rate of Interest of per cent. from, and including, the Issue Date to, but excluding, the Call Date. Unless the Notes are redeemed on or prior to the Call Date, for the Reset Interest Period, the Rate of Interest will reset on the Call Date to the sum of the Five-year Mid-Swap Rate and the Margin, all as determined by the Agent on the Reset Interest Determination Date and as provided in the Issue Terms. The Rate of Interest for the Reset Interest Period could be less than the initial Rate of Interest which could affect the market value of an investment in the Notes. 9

10 ISSUE TERMS The terms and conditions of the Notes shall consist of the Terms and Conditions of the Notes set out in the Programme Offering Circular (the Base Conditions ) as amended or supplemented by the information set out in these Issue Terms (including the Annex) below. These Issue Terms shall comprise the Final Terms of the Notes for the purposes of the Programme Agreement, the Agency Agreement and the Trust Deed and the Global Note in respect of the Notes. References in the Base Conditions to Final Terms shall be deemed to refer to the information set out under the heading Part A Contractual Terms below and the Annex to the Issue Terms. SVENSKA HANDELSBANKEN AB (publ) Issue of 1,500,000,000 Callable Resettable Dated Subordinated Notes due 15th January 2024 under its U.S.$50,000,000,000 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 Terms and Conditions set forth in the Offering Circular dated 14th June, 2013 (the Programme Offering Circular ). These Issue Terms must be read in conjunction with the Programme Offering Circular as amended by this Offering Circular. The Programme Offering Circular is available for viewing on the website of the Central Bank of Ireland at and the website of the Irish Stock Exchange at 1. Issuer: Svenska Handelsbanken AB (publ) 2. (i) Series Number: 321 (ii) Tranche Number: 1 (iii) Date on which the Notes will be consolidated and form a single Series: Not Applicable 3. Specified Currency or Currencies: Euro ( ) 4. Aggregate Nominal Amount: Tranche: 1,500,000,000 Series: 1,500,000, Issue Price: per cent. of the Aggregate Nominal Amount 6. (i) Specified Denominations: 100,000 and integral multiples of 1,000 in excess thereof up to and including 199,000. No Notes in definitive form will be issued with a denomination above 199,000. (ii) Calculation Amount: 1, (i) Issue Date and Interest Commencement Date: (ii) Interest Commencement Date (if different from the Issue Date): 15th January 2014 Not Applicable 10

11 8. Maturity Date: 15th January Interest Basis: Fixed Rate. The initial Rate of Interest will be per cent. per annum from and including the Issue Date to but excluding the Call Date (as defined in paragraph 18(i) below). The Rate of Interest will reset on the Call Date, subject as provided under paragraph 11 below. (further particulars specified below) 10. Redemption Basis: Subject to any purchase and cancellation or early redemption, the Notes will be redeemed on the Maturity Date at 100 per cent. of their nominal value. 11. Change of Interest Basis: Unless the Notes are redeemed by the Issuer on or prior to the Call Date, the Rate of Interest will be reset in accordance with paragraph 14(i) below. 12. Put/Call Options: Issuer Call (further particulars specified below) 13. Status of the Notes: Dated Subordinated PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE 14. Fixed Rate Note Provisions Applicable (i) Rate(s) of Interest: (a) For the period from (and including) the Interest Commencement Date to (but excluding) the Call Date per cent. per annum; and (b) for the Reset Interest Period, the Rate of Interest will reset on the Call Date to the sum of (A) the Five-year Mid-Swap Rate and (B) the Margin, all as determined by the Agent as described below, payable, in each case, in arrear on each Interest Payment Date. Five-year Mid-Swap Rate means, in relation to the Reset Interest Period: (i) the annual rate for euro swaps with a term of five years commencing on the Call Date, expressed as a percentage, which appears on the Relevant Screen Page as of 11:00 a.m. (Frankfurt time), under the heading EURIBOR BASIS EUR and above the caption 11:00AM FRANKFURT on the Reset Interest Determination Date; or (ii) if the rate referred to in (i) above does not appear on the Relevant Screen Page at such time on the Reset Interest Determination Date, the Reset Reference Bank Rate on the 11

12 Reset Interest Determination Date; Five-year Mid-Swap Rate Quotations means the arithmetic mean of the bid and offered rates for the annual fixed leg (calculated on a 30/360 day count basis) of a fixed-for-floating euro interest rate swap transaction which: (i) has a term of five years commencing on the Call Date; (ii) is in an amount that is representative of 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 six-month EURIBOR (calculated on an Actual/360 day count basis) equivalent to the rate of interest that would apply in respect of the Notes if (a) Screen Rate Determination was specified in these Issue Terms as the manner in which the Rate of Interest is to be determined, (b) the Reference Rate was six-month EURIBOR, (c) the Specified Time was 11:00 a.m., Brussels time, and (d) the Relevant Screen Page was Reuters EURIBOR01; Margin means per cent. per annum; Relevant Screen Page means Reuters Screen Page ISDAFIX2; Reset Interest Determination Date means, in relation to the Reset Interest Period, the second day on which the TARGET2 System is open prior to the Call Date; Reset Interest Period means the period from, and including, the Call Date, to, but excluding, the Maturity Date; Reset Reference Bank Rate means, in relation to the Reset Interest Period, the percentage rate determined on the basis of the Five-year Mid-Swap Rate Quotations provided by the Reset Reference Banks to the Agent at approximately 11:00 a.m. (Brussels time) on the Reset Interest Determination Date. If at least three quotations are provided, the Reset Reference Bank Rate will be the arithmetic mean of the quotations provided, eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest). If only two quotations are provided, the Reset Reference Bank Rate will be the arithmetic mean of the quotations provided. If only one quotation is provided, the Reset Reference Bank Rate 12

13 will be the quotation provided. If no quotations are provided, the Agent will determine the Reset Reference Bank Rate for the Reset Interest Period (or a method for determining such rate), taking into consideration all available information that it in good faith deems relevant; and Reset Reference Banks means five leading swap dealers in the euro interbank market selected by the Agent in its discretion after consultation with the Issuer. (ii) Interest Payment Dates(s): 15th January in each year commencing on 15th January 2015 up to and including the Maturity Date subject to adjustment in accordance with paragraph 14(vii). (iii) Fixed Coupon Amount(s): per Calculation Amount up to, and including, the Call Date. (iv) Broken Amount(s): Not applicable (v) Day Count Fraction: Actual/Actual (ICMA) (vi) Determination Date(s): 15th January, in each year (vii) Business Day Convention: Following, unadjusted The Fixed Coupon Amount per Calculation Amount applicable after the Call Date up to, and including, the Maturity Date (the Reset Period Fixed Coupon Amount ) will be determined by the Agent as set out in paragraph 14(i) above. For the purposes of Condition 8(b) only, the Notes shall be deemed to be Floating Rate Notes. (viii) Additional Business Centre: Not Applicable 15. Floating Rate Note Provisions Not Applicable 16. Zero Coupon Note Provisions Not Applicable PROVISIONS RELATING TO REDEMPTION 17. Notice periods for Condition 7(b) Minimum period: 30 days 18. Issuer Call Applicable Maximum period: 60 days (i) Optional Redemption Date(s): Callable in whole but not in part on 15th January 2019 (the Call Date ) (ii) Optional Redemption Amount: 1,000 per Calculation Amount (iii) If redeemable in part: (a) Minimum Redemption Not Applicable 13

14 Amount: (b) Higher Redemption Amount: Not Applicable (iii) Notice period: Minimum period: 30 days Maximum period: 60 days 19. Investor Put Not Applicable 20. (i) Optional Redemption Not Applicable. The Annex to these Issue Terms Amount payable on redemption provides that the Notes may be redeemed at the option following the occurrence of, in the of the Issuer upon the occurrence of a Capital Event case of Undated Subordinated Notes, or a Tax Event (each as defined in the Annex). a Capital Event or, in the case of Capital Contribution Securities and Enhanced Capital Contribution Securities, a Tax Event, a Rating Event, an Accounting Event or a Capital Event (ii) Notice period: Not Applicable 21. Final Redemption Amount: 1,000 per Calculation Amount. 22. Early Redemption Amount payable on redemption for taxation reasons or on event of default: 1,000 per Calculation Amount GENERAL PROVISIONS APPLICABLE TO THE NOTES 23. Form of Notes: (i) Form: Global Note exchangeable for definitive Notes only upon an Exchange Event (as defined in Form of the Notes in the Programme Offering Circular) (ii) New Global Note: No 24. Additional Financial Centre(s): Not Applicable 25. Talons for future Coupons to be attached to Definitive Notes: No PURPOSE These Issue Terms comprise the terms required for issue of the Notes described herein pursuant to the U.S.$50,000,000,000 Euro Medium Term Note Programme of Svenska Handelsbanken AB (publ). 14

15 PART B OTHER INFORMATION 1. LISTING AND ADMISSION TO TRADING (i) Listing: The Official List of the Irish Stock Exchange. (ii) Admission to trading: Application has been made for the Notes to be admitted to trading on the regulated market of the Irish Stock Exchange with effect from 16th January, (iii) Estimate of total expenses relating to admission to trading: 2, RATINGS Ratings: The Notes are expected to be rated: Standard & Poor s: A Fitch: A+ Each of Standard & Poor s Credit Market Services Europe Limited ( Standard & Poor s ) and Fitch Ratings Ltd ( Fitch ) is established in the European Union and has been registered under Regulation (EC) No. 1060/2009. A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency. 3. INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE Save for any fees payable to the Managers, so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer. The Managers and their affiliates have engaged, and may in the future engage, in investment banking and/or commercial banking transactions with, and may perform other services for, the Issuer and its affiliates in the ordinary course of business. 4. YIELD (Fixed Rate Notes only) Indication of yield: per cent. The yield is calculated at the Issue Date up to the Call Date on the basis of the Issue Price. It is not an indication of future yield. 5. OPERATIONAL INFORMATION (i) ISIN Code: XS (ii) Common Code: (iii) Any clearing system(s) other than Euroclear Bank S.A./N.V. and Clearstream Banking, Not Applicable 15

16 société anonyme and the relevant identification number(s): (iv) Delivery: Delivery against payment (v) Names and addresses of additional Paying Agent(s) (if any): Not Applicable (vi) Intended to be held in a manner which would allow Eurosystem eligibility: No DISTRIBUTION 6. (i) Method of Distribution: Syndicated (ii) (iii) If syndicated, names of Managers: Date of Subscription Agreement: Credit Suisse Securities (Europe) Limited Merrill Lynch International Société Générale Svenska Handelsbanken AB (publ) 13 January 2014 (iv) Stabilising Manager: Société Générale 7. If non-syndicated, name of relevant Dealer: Not Applicable 8. U.S. Selling Restrictions: Reg. S Compliance Category 2; TEFRA C 16

17 ANNEX OTHER TERMS This Annex sets out certain additional terms applicable only to the 1,500,000,000 Callable Resettable Dated Subordinated Notes due 15th January Amendments to Base Conditions 1. For the purpose of the Notes, the following sentence shall replace Condition 7(i) (Consent): In the case of Dated Subordinated Notes, no early redemption, variation or substitution, as the case may be, in any circumstances or purchase under Conditions 7(b), (c), (f), or (n), as applicable, shall take place without the prior written consent of the Relevant Regulator. 2. The following additional Condition 7(n) shall be added to the end of Condition 7 (Redemption and Purchase): (n) Redemption upon Capital Event or Tax Event Upon the occurrence of a Capital Event or a Tax Event (as defined in this Condition 7(n)) but subject to Condition 7(i), the Bank may, at its option, having given not less than 30 days nor more than 60 days notice to the Trustee, the Agent and, in accordance with Condition 17, the Noteholders (which notice shall be irrevocable), at any time, redeem all (but not some only) of the Notes at an amount equal to 1,000 per Calculation Amount, together with interest accrued to (but excluding) the date of redemption, if any. Upon the expiry of any such notice, the Bank shall redeem the Notes. In this Condition 7(n): Capital Event means the determination by the Bank, after consultation with the Relevant Regulator and in compliance with any applicable Relevant Rules, that, as a result of any amendment to, or change in, the Relevant Rules, which amendment or change is effective on or after the Issue Date of the Notes, or if the Notes comprise more than one Tranche, the Issue Date of the last Tranche, the Notes will not be fully included in the Bank s Tier 2 Capital or, on or after CRD IV takes effect in the Kingdom of Sweden, the Notes are fully or partially excluded from the Bank s Tier 2 Capital, as the case may be, such determination to be confirmed by the Bank to the Trustee in a certificate signed by two Authorised Signatories (as defined in the Trust Deed) of the Bank and delivered to the Trustee; CRD IV means, as the context requires, any or any combination of the CRD IV Directive, the CRR and any CRD IV Implementing Measures; CRD IV Directive means a directive of the European Parliament and of the Council on prudential requirements for credit institutions and investment firms dated 26th June 2013 and published in the Official Journal of the European Union on 27th June 2013, as amended or replaced from time to time; CRD IV Implementing Measures means any regulatory capital rules or regulations, or other requirements, which are applicable to the Issuer and which prescribe (alone or in conjunction with any other rules or regulations) the requirements to be fulfilled by financial instruments for their inclusion in the regulatory capital of the Issuer (on a non-consolidated or consolidated basis) to the extent required by the CRD IV Directive or the CRR, including for the avoidance of doubt any regulatory technical standards released by the European Banking Authority (or any successor or replacement thereof); CRR means a regulation of the European Parliament and of the Council on prudential requirements for credit institutions and investment firms dated 26th June 2013 and published 17

18 in the Official Journal of the European Union on 27th June 2013, as amended or replaced from time to time; Relevant Regulator means the Swedish Financial Supervisory Authority (SFSA) and any successor or replacement thereto, or another authority which has the primary responsibility for the prudential oversight and supervision of the Issuer; Relevant Rules means the regulatory capital rules from time to time as applied by the Relevant Regulator and as amended from time to time (including CRD IV and/or the RRD, as applicable); RRD means the Directive of the European Parliament and of the Council on resolution and recovery of credit institutions and investment firms, a first draft of which was published on 6 June 2012, as amended or replaced from time to time; Tax Event means the receipt by the Bank and the Trustee of an opinion of counsel in the Kingdom of Sweden (experienced in such matters) to the effect that, as a result of (i) any amendment to, clarification of, or change (including any announced prospective change) in, the laws or treaties (or any regulations thereunder) of the Kingdom of Sweden or any political subdivision or taxing authority thereof or therein affecting taxation, (ii) any governmental action or (iii) any amendment to, clarification of, or change in the official position or the interpretation of such governmental action or any interpretation or pronouncement that provides for a position with respect to such governmental action that differs from the theretofore generally accepted position, in each case, by any legislative body, court, governmental authority or regulatory body, irrespective of the manner in which such amendment, clarification or change is made known, which amendment, clarification, or change is effective or such pronouncement or decision is announced on or after the Issue Date of the Notes, or if the Notes comprise more than one Tranche, the Issue Date of the last Tranche, there is more than an insubstantial risk that (A) the Bank is, or will be, subject to more than a de minimis amount of taxes, duties or other governmental charges or civil liabilities with respect to the Notes which were not applicable at the relevant Issue Date or (B) the treatment of any of the Bank s items of income or expense with respect to the Notes as reflected on the tax returns (including estimated returns) filed (or to be filed) by the Bank will not be respected by a taxing authority and that subjects the Bank to more than a de minimis amount of taxes, duties or other governmental charges which were not applicable at the relevant Issue Date; and Tier 2 Capital means Tier 2 Capital (Sw. supplementärt kapital) as defined in Chapter 3 of the Swedish Capital Adequacy and Large Exposures Act (Lag 2006:1371 om kapitaltäckning och stora exponeringar), as amended or replaced in the Relevant Rules from time to time. 3. The following additional Conditions shall be added to the end of Condition 6(a): Determination of Rate of Interest The Agent will at or as soon as practicable on the Reset Interest Determination Date, determine the Five-year Mid-Swap Rate and the Rate of Interest for the Reset Interest Period. Notification of Rate of Interest and Interest Amounts The Agent will cause the Five-year Mid-Swap Rate and the Rate of Interest for the Reset Interest Period to be notified to the Bank and the Trustee on the Reset Interest Determination Date and to be notified to any stock exchange or listing authority on which the Notes are for the time being listed and notice thereof to be published in accordance with Condition 17 as soon as possible thereafter but in no event later than the Call Date. 18

19 Determination or calculation by Trustee If for any reason the Agent does not determine the Five-year Mid-Swap Rate or the Rate of Interest for the Reset Interest Period, the Trustee shall determine such Rate of Interest in accordance with section 14 of the Issue Terms and otherwise in its absolute discretion (having such regard as it shall think fit to section 14 of the Issue Terms, it shall deem fair and reasonable in all the circumstances) and each such determination shall be deemed to have been made by the Agent. 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 section 14 of the Issue Terms, whether by the Agent or the Trustee, shall (in the absence of manifest error) be binding on the Bank, the Agent, the Trustee, the other Paying Agents and all Noteholders and Couponholders and (in the absence as aforesaid) no liability to the Bank, the Noteholders or the Couponholders shall attach to the Agent or the Trustee in connection with the exercise or non-exercise by them of their powers, duties and discretions pursuant to such provisions. 19

20 CAPITAL BASE The following information is provided in addition to that set out in the Programme Offering Circular, under the heading Svenska Handelsbanken AB (publ) Capital Base : The Basel III Non-Viability Requirements form part of the broader Basel III package of new capital and liquidity requirements intended to reinforce capital standards and to establish minimum liquidity standards for credit institutions. The Basel Committee contemplated implementation of the Basel III reforms as of 1st January, However, implementation of these reforms in the European Economic Area has been delayed but will be by way of the CRD IV Directive and the CRR. These texts were published in the Official Journal of the European Union on 27th June, They must be applied from 1st January, CRR contemplates that the Basel III Non-Viability Requirements will be implemented in the European Economic Area by way of the RRD (see Risk Factors Loss absorption at the point of nonviability of the Issuer and resolution ). If such statutory loss absorption at the point of non-viability is not implemented by 31st December, 2015 then CRR indicates that the European Commission shall review and report on whether a provision should be included in CRR and, in light of that review, come forward with appropriate legislative proposals. 20

21 SUBSCRIPTION AND SALE The Joint Lead Managers have, in the Syndication Agreement dated 13 January 2014, which is made pursuant to the amended and restated programme agreement dated 14th June, 2013, jointly and severally agreed to subscribe or procure subscribers for the Notes at a price of per cent. of the principal amount of the Notes. 21

22 GENERAL INFORMATION Listing of Notes Application has been made to the Irish Stock Exchange for the Notes to be admitted to the Official List and trading on the Main Securities Market. The Main Securities Market is a regulated market for the purposes of Directive 2004/39/EC. The listing of the Notes is expected to be granted on or about 16th January, Authorisation The issue of Notes is duly authorised pursuant to a resolution of the Board of the Bank passed on 20th March, No consents, approvals, authorisations or other orders of regulatory authorities are required to be obtained by the Bank under the laws of the Kingdom of Sweden, unless otherwise set out herein, in connection with the issue of Notes or to enable the Bank to undertake and perform its obligations under the Notes. Euroclear and Clearstream, Luxembourg The Notes have been accepted for clearance through the Euroclear and Clearstream, Luxembourg systems (which are the entities in charge of keeping the records) with a Common Code of The International Securities Identification Number (ISIN) of the Notes is XS The address of Euroclear is 3 Boulevard du Roi Albert III, B.l210 Brussels, Belgium. The address of Clearstream, Luxembourg is 42 Avenue J. F. Kennedy, L-1855 Luxembourg. Significant/Material Adverse Change There has been no significant change in the financial or trading position of the Bank or the Group since 30th September, 2013 and there has been no material adverse change in the financial position or prospects of the Bank or the Group since 31st December, Litigation There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Bank is aware), which may have, or have had during the twelve months prior to the date hereof, significant effects on the financial position or profitability of the Bank and/or the Group. Statutory Auditors The auditors of the Bank and the Group named in the following two paragraphs have audited the accounts of the Bank and the Group in accordance with auditing standards generally accepted for banking companies in the Kingdom of Sweden and without qualification for each of the financial years ended 31st December, 2011 and 31st December, 2012, respectively. The auditors of the Bank and the Group for the fiscal years ended 31st December, 2011 and 2012 were KPMG AB with Stefan Holmström as auditor in charge, Box 16106, SE Stockholm and Ernst & Young AB with Erik Åström as auditor in charge, Box 7850 SE Stockholm. All of the aforementioned auditors are Authorised Public Accountants. None of the auditors named above has a material interest in the Issuer. Documents Available for Inspection For the period of 12 months following the date of this Offering Circular, copies in English of the following documents will, when published, be available from the registered office of the Bank in Stockholm and from the specified office of each of the Paying Agents: 22