PART A - CONTRACTUAL TERMS

Transcription

1 PROHIBITION OF SALES TO EEA RETAIL INVESTORS Other than with respect to offers of the Notes in Sweden, 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 (as amended, MiFID II ); (ii) a customer within the meaning of Directive 2002/92/EC, where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; of (iii) not a qualified investor as defined in the Prospectus Directive. Consequently, save as provided above, no key information document required by Regulation (EU) No. 1286/2014 (as amended, the PRIIPs Regulation ) for offering or selling the Notes or otherwise making them available to any retail investor in the EEA has been prepared and therefore offering or selling the securities or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation. FINAL TERMS DATED 29 JUNE 2018 Series No. DDBO_SIF_1842 Tranche No. 1 DANSKE BANK A/S EUR 5,000,000,000 Structured Note Programme Issue of DDBO_SIF_1842 ISIN: SE Any person making or intending to make an offer of the Notes may only do so: (i) In those Non-exempt Offer Jurisdictions mentioned in Paragraph 7 (Distribution) of Part B below, provided such person is of a kind specified in that paragraph and that the offer is made during the Offer Period specified in that paragraph; or (ii) otherwise, in circumstances in which no obligation arises for the Issuer or any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or to supplement a prospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such offer. Neither the Issuer nor any Dealer has authorised, nor do they authorise, the making of any offer of Notes in any other circumstances. 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 Base Prospectus dated 19 June 2018 (the "Base Prospectus") for the purposes of 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 Base Prospectus. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of this Final Terms and the Base Prospectus. A Summary of the Notes (which comprises the Summary in the Base Prospectus, as amended to reflect the provisions of this Final Terms), is annexed to this Final Terms. The Base Prospectus and this Final Terms is available for viewing at and copies may be obtained from the Central Bank of Ireland s website at 1. Issuer: Danske Bank A/S 1

2 2. (i) Series Number: DDBO_SIF_1842 (ii) Tranche Number: 1 (iii) Date on which the Notes will be consolidated and form a single Series: 3. Specified Currency or Currencies: SEK 4. Aggregate Principal Amount: Up to SEK 200,000, Issue Price: per cent. of the Aggregate Principal Amount 6. (i) Specified Denominations: SEK 10, (ii) Calculation Amount: SEK 10, (i) Issue Date: 27 September 2018 (ii) Interest Commencement Date: 27 September 2018 (iii) Trade Date: 13 September Maturity Date: 9 July 2023, the "Scheduled Maturity Date" or such later date for redemption determined as provided in Reference Item Condition 2 (Credit-Linked Notes) Scheduled Termination Notice Date: 20 June Interest Basis: INDICATIVELY 7.50 per cent. (to be determined by the Issuer no later than the Issue Date, subject to a minimum of 6.00 per cent.) Fixed Rate 10. Redemption/Payment Basis: Redemption at par and Credit-Linked Redemption Notes (further particular specified at item 34 below) 11. Put/Call Options: 12. Tax Gross-Up: General Condition 8.1 (Gross-up) applicable 13. Date of Board approval for issuance of Notes obtained: PROVISIONS RELATING TO REFERENCE ITEMS AND FX PRINCIPAL/OPTION CONVERSION 14. Rate-Linked Provisions 15. Inflation Linked Provisions 16. Index-Linked Provisions 2

3 17. Equity-Linked Provisions 18. Fund-Linked Provisions 19. Currency-Linked Provisions 20. Commodity-Linked Provisions 21 Additional Disruption Events: Applicable (i) Change in Law: Applicable (ii) Hedging Disruption: Applicable (iii) Increased Cost of Hedging: Applicable (iv) Increased Cost of Stock Borrow: (v) Insolvency Filing: (vi) Loss of Stock Borrow: 22. Credit-Linked Provisions: Applicable (i) Settlement Method: Zero/Set Recovery Notes (ii) Type of Credit-Linked Notes: The Notes are Portfolio Credit-Linked Notes (iii) Tranching: Tranched (A) Attachment Point: per cent. (B) Detachment Point: per cent. (iv) Credit Event Redemption Amount: As set out in Redemption Payout Condition 2.2 (v) Credit Event Redemption Date: Reference Item Linked Condition 2.10 applies (vi) Maturity Credit Event Redemption: Applicable (vii) Reference Entities: The entities specified as a Reference Entity in the table below: Reference Entity Each entity included in Itraxx Europe Crossover Series 29 Version 1 ( All Guarantees Credit Events: TABLE Reference Entity Reference Obligation Set/Zero Notional Amount Recovery Price Calculation Amount / 75 Standard Reference Obligation 0 % The following elections apply to each Reference Entity. Bankruptcy Failure to Pay 3

4 Provisions relating to Restructuring Credit Event: Multiple Holder Obligation: Restructuring Maturity Limitation and Fully Transferable Obligation Modified Restructuring Maturity Limitation and Conditionally Transferable Obligation Obligation Category: Obligation Characteristics: Additional Obligation(s) Excluded Obligation(s): Valuation Obligation Category: Valuation Obligation Characteristics: Additional Valuation Obligation(s): Excluded Valuation Obligation(s): Grace Period Extension Restructuring Reference Item Condition 2.11 ModMod R Applicable Provisions relating to Reference Item Condition 2.12 Applicable Applicable Applicable Borrowed Money None Bond or Loan Not Subordinated Standard Specified Currencies Assignable Loan Consent Required Loan Transferable Maximum Maturity: 30 years Not Bearer (viii) Default Requirement: Reference Item Condition 2.10 applies (ix) Payment Requirement: Reference Item Condition 2.10 applies (x) Credit Event Determination Date: Notice of Publicly Available Information: Applicable Public Source(s): Specified Number: Any Public Source one (xi) Credit Event Backstop Date Adjustment: Applicable the Credit Exposure Start Date is 14 September 2018 (xii) Merger Event: Reference Item Condition 2.9 (xiii) Unwind Costs: (xiv) (xv) Provisions relating to Monoline Insurer as Reference Entity: Provisions relating to LPN Reference Entities: Reference Item Condition 2.13 Reference Item Condition 2.15 (xvi) Additional Interest Amount: (xvii) Fixed Recovery Percentage: 0.00 per cent. (xviii) Valuation Date: 4

5 (xix) Valuation Time: (xx) Indicative Quotations: (xxi) Quotation Method: (xxii) Quotation Amount: (xxiii) Minimum Quotation Amount: (xxiv) Quotation Dealers: (xxv) Quotations: (xxvi) Valuation Method: (xxvii) Calculation Agent City: (xxviii) Business Day Convention: London Following (xxix) Successor Backstop Date Yes (xxx) Limitation Dates subject to adjustment in accordance with Business Day Convention: No (xxxi) Valuation Obligation Observation Settlement Period: (xxxii) Accured Interest: (xxxiii) Settlement Currency: (xxxiv) Financial Reference Entity Terms: (xxxv) Sovering No Asset Package Delivery: (xxxvi) Reference Obligation Only Termination Amount: (xxxvii)subordinated European Insurance Terms: PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE 23. FX Interest Conversion 24. Fixed Rate Note Provisions Applicable in respect of Interest Periods falling during the period from (but excluding) the Issue Date to (and including) 20 June

6 (i) Rate of Interest INDICATIVELY 7.50 per cent. (to be determined by the Issuer no later than the Issue Date, subject to a minimum of 6.00 per cent.) per annum payable quarterly in arrear. (ii) Interest Period Date(s): 20 December 2018, 20 March 2019, 20 June 2019, 20 September 2019, 20 December 2019, 20 March 2020, 20 June 2020, 20 September 2020, 20 December 2020, 20 March 2021, 20 June 2021, 20 September 2021, 20 December 2021, 20 March 2022, 20 June 2022, 20 September 2022, 20 December 2022, 20 March 2023 and 20 June No Adjustment. (iii) Interest Payment Date(s): 9 January 2019, 9 April 2019, 9 July 2019, 9 October 2019, 9 January 2020, 9 April 2020, 9 July 2020,9 October 2020, 9 January 2021, 9 April 2021, 9 July 2021, 9 October 2021, 9 January 2022, 9 April 2022, 9 July 2022, 9 October 2022, 9 January 2023, 9 April 2023 and 9 July 2023 subject to adjustment in accordance with the Following Business Day Convention. (iv) Accrual: Applicable (A) Day Count Fraction: 30/360, unadjusted 25. Variable Rate Note Provisions 26. Provisions for specific types of Variable Rate Notes 27. Reference Item-Linked Interest Provisions 28. Zero Coupon Note Provisions 29. Credit-Linked Interest Provisions Applicable (i) (ii) Accrual of Interest upon Credit Event: Portfolio Linked Interest Adjustment: Applicable (iii) Credit Event Observation Dates: Each Interest Period Date PROVISIONS RELATING TO REDEMPTION 30. Call Option 31. Put Option 32. Early Redemption (i) Early redemption for tax reasons: Applicable 6

7 (ii) Notice Period relating to early redemption for tax reasons: Minimum Period: 15 days Maximum Period: (iii) Early Redemption Amount payable (a) on redemption for taxation reasons or (b) on redemption for an Administrator/ Benchmark Event or (c) an illegality or (d) on an Event of Default or (e) in the case of Reference Item-Linked Notes, following an early redemption pursuant to the provisions of the relevant Reference Item Schedule: As set out in the General Conditions (iv) Early Redemption Amount includes amount in respect of interest: 33. Autocall Early Redemption: 34. Final Redemption Amount Subject as provided in Redemption Payout Condition 2 (Redemption in respect of Credit-Linked Notes), SEK 10,000 per Calculation Amount. 35. FX Principal Conversion: 36. Reference Item-Linked Redemption Provisions: 37. Redemption Valuation Provisions (i) (ii) Initial valuation to determine Reference Item Initial i : Final Valuation to determine Reference Item Final i : (iii) Periodic Valuation: (iv) Continuous Valuation: (v) Daily Valuation: (vi) FX Valuation: GENERAL PROVISIONS APPLICABLE TO THE NOTES 38. Form of Notes: VP Systems Notes issued in uncertificated and dematerialised book entry form. See further item 6 of Part B below 39. New Global Note form: 7

8 40. Applicable Business Centre(s): Stockholm and New York 41. Business Day Convention: Following Business Day Convention 42. Applicable Financial Centre(s) or other special provisions relating to Payment Business Days: Stockholm 43. Notices to be published on: Placera/Strukturerade-produkter/Utestaende-och-forfallna/ Pages/utestaende_aktieindexobligationer.aspx 44. Talons for future Coupons to be attached to Definitive Notes: 45. Name and address of the Calculation Agent: No Danske Bank A/S, Holmens Kanal 2-12, 1092 Copenhagen K, Denmark Signed on behalf of the Issuer: By: By: Duly authorised Duly authorised CC: Citibank, N.A., London Branch as Fiscal Agent 8

9 PART B OTHER INFORMATION 1. Listing and Admission to Trading (i) Listing: Nasdaq Stockholm (ii) Admission to trading: Application has been made for the Notes to be admitted to trading on the regulated market with effect from on or about the Issue Date (iii) Estimate of total expenses related to admission to trading: SEK 39,000 (iv) Market Making: Strukturinvest Fondkommission (FK) AB Stora Badhusgatan Göteborg 2. Interests of Natural and Legal Persons involved in the Issue/Offer 3. Reasons for the Offer, Estimated Net Proceeds and Total Expenses Save as discussed in the Subscription and Sale section of the Base Prospectus. so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer (i) Reasons for the offer: As set out in the Use of Proceeds in the Base Prospectus 4. Information relating to Reference Entity, explanation of effect on value of investment and associated risks and other information concerning the Reference Entity: The return on the Notes is linked to the credit risk and the financial obligations of the underlying Reference Entities (which shall include any Successors thereof). The creditworthiness of the Reference Entities may go down as well as up throughout the life of the Notes. Fluctuations in the credit spreads of the Reference Entities will affect the value of the Notes. Details of the past performance of the entities comprising the Itraxx Europe Crossover Series 29 Version 1, which determined the initial Reference Entities as mentioned in the Table hereto, can be found on the website address and more specifically under Products & Services and Indices. Specific information on an individual Reference Entity can be found on the official websites of such Reference Entity and in financial reports (if any) from credit rating agencies such as Fitch, Inc ( Standard & Poor s Financial Services LLC (a subsidiary of The McGraw-Hill Companies, Inc) ( or Moody s Investors Services ( published in relation to such Reference Entity. The Itraxx Europe Crossover Series 29 Version 1(the Index ) referenced herein is the property of International Index Co. Limited ( Index Sponsor ) and has been licensed for use in connection with DDBO_SIF_1842. Each purchaser, seller or holder acknowledges and agrees that DDBO_SIF_1842 is not sponsored, endorsed or promoted by the Index Sponsor. The Index Sponsor make no representation whatsoever, whether express or implied, and hereby expressly disclaim all warranties (including, without limitation, those of merchantability or fitness for a particular purpose or use), with respect to the Index or any data included therein or relating thereto, and in particular disclaim any warranty 9

10 either as to the quality, accuracy and/or completeness of the Index or any data included therein, the results obtained from the use of the Index and/or the composition of the Index at any particular time on any particular date or otherwise and/or the creditworthiness of any entity, or the likelihood of the occurrence of a credit event or similar event (however defined) with respect to an obligation, in the Index at any particular time on any particular date or otherwise. The Index Sponsor shall not be liable (whether in negligence or otherwise) to the parties or any other person for any error in the Index, and the Index Sponsor is under no obligation to advise the parties or any person of any error therein. The Index Sponsor makes no representation whatsoever, whether express or implied, as to the advisability of entering into DDBO_SIF_1842, the ability of the Index to track relevant markets performances, or otherwise relating to the Index or any transaction or product with respect thereto, or of assuming any risks in connection therewith. The Index Sponsor has no obligation to take the needs of any party into consideration in determining, composing or calculating the Index. No party entering into DDBO_SIF_1842, nor the Index Sponsor, shall have any liability to any party for any act or failure to act by the Index Sponsor in connection with the determination, adjustment, calculation or maintenance of the Index. Each party acknowledges that the other party or one of its affiliates may be, or may be affiliated with, an Index Sponsor and, as such, may be able to affect or influence the determination, adjustment or maintenance of the Index. The Index Sponsor and its affiliates may deal in any obligations that compose the Index, and may, where permitted, accept deposits from, make loans or otherwise extend credit to, and generally engage in any kind of commercial or investment banking or other business with the issuers of such obligations or their affiliates, and may act with respect to such business as if the Index did not exist, regardless of whether such action might adversely affect the Index or DDBO_SIF_1842. The Index Sponsor and its affiliates may be in possession of information in relation to components of the Index that may or may not be publicly available or known to any other party, and each party entering intoddbo_sif_1842 agrees that DDBO_SIF_1842 does not create any obligation on the part of the Index Sponsor or its affiliates to disclose any such information. The Issuer intends to provide post-issuance information on privat/spara-och-placera/placera/strukturerade-produkter/utestaende-och-forfallna/pages/ utestaende_aktieindexobligationer.aspx 5. Operational Information: ISIN Code: SE Common Code: New Global Note intended to be held in a manner which would allow Eurosystem eligibility: Any clearing system(s) other than Euroclear Sweden Euroclear Bank S.A./N.V. and Clearstream Banking, S.A. and the relevant The Issuer shall be entitled to obtain certain information identification number(s): from the register maintained by Euroclear Sweden for the purpose of performing its obligations under the issue of VP Systems Notes Delivery: Delivery against payment Names and addresses of additional Paying Agent(s) (if any): 10

11 6. Distribution (i) Name of Dealer: Danske Bank A/S Holmens Kanal 2-12, 1092 Copenhagen K, Denmark (ii) Total commission and concession: Fees of up to 1.20 per cent. per annum (i.e. total up to 6.00 per cent.) of the Aggregate Principal Amount may be paid by the Issuer to the Authorised Offeror. Inducements are included in the Issue Price. Fees up to 0.40 per cent. per annum (i.e. total up to 2.00 per cent.) of the Aggregate Principal Amount are included in the Issue Price as a structuring fee to the Issuer. (iii) TEFRA Rules: Commission of up to 3.00 per cent. of the Aggregate Principal Amount. Commission is not included in the Issue Price. (iv) Non-exempt Offer where there is no exemption from the obligation under the Prospectus Directive to publish a prospectus: Applicable (v) Non-exempt Offer Jurisdictions: Sweden (vi) Offer Period: From and including 2 July 2018 to and including 31 August 2018 (vii) Financial intermediaries granted specific consent to use the Base Prospectus in accordance with the Condtions in it: Strukturinvest Fondkommission (FK) AB Stora Badhusgatan Göteborg Prohibition on Sales to EEA Retail Investors: 7. Terms and Conditions of the Offer: Offer Price: Conditions to which the offer is subject Applicable other than with respect to offers of the Notes in Sweden. Issue Price The Issuer reserves the right to cancel, in the sole and absolute discretion of the issuer, the Issue of the Notes if (i) the Issuer receives subscriptions for Notes on an Aggregate Principal Amount of less than SEK 15,000,000, or (ii) the Issuer does not determine the Rate of Interest to be at least 6.00 per cent. Further, the Issuer has the right to cancel the offer and the subsequent issue of the Notes if in the sole and absolute discretion of the Issue, during the Offer Period, there is a domestic or international material change in interest levels and/or the volatility in the underlying equities, an 11

12 economic, financial, political or market related material change, which in the sole and absolute discretion of the Issuer makes the offering of Notes inexpedient. Description of the application process: Details of the minimum and/or maximum amount of application: Description of possibility to reduce subscriptions and manner for refunding excess amount paid by applicants: Details of the method and time limits for paying up and delivering the Notes: During the Offer Period prospective investors may subscribe to the Notes during normal banking hours in Sweden by delivering a subscription form to Strukturinvest Fondkommission (FK) AB no later than 31 August The Notes may be subscribed in a minimum lot of one Note. There is no maximum amount of application Notes will be issued to the Investors as per the arrangements in place between the relevant Authorised Offeror and such investor, including as to application process and settlement arrangements. Manner in and date on which results of the offer are to be made public: The Issuer estimates that the Notes will be delivered to the purchaser's respective book-entry securities account(s) on or around the Issue Date. After the Offer Period the results of the offer will be specified in the applicable Final Terms that will be published on a homepage of Danske Bank A/S on or about the Issue Date. Procedure for exercise of any right of preemption, negotiability of subscription rights and treatment of subscription rights not exercised: Whether tranche(s) have been reserved for certain countries: Process for notification to applicants of the amount allotted and the indication whether dealing may begin before notification is made: Amount of any expenses and taxes specifically charged to the subscriber or purchaser: Name(s) and address(es), to the extent known to the Issuer, of the placers in the various countries where the offer takes place: Name and address of the entities which have a firm commitment to act as intermediaries in secondary trading, Subscription fee or purchases fees up to 3.00 per cent. being specified that the Authorised Offeror can waive such fees. Strukturinvest Fondkommission (FK) AB Stora Badhusgatan Göteborg 12

13 providing liquidity through bid and offer rates and description of the main terms of their commitment: 8. EU Benchmark Regulation EU Benchmark Regulation Article 29(2) statement on benchmarks: 9. U.S. Federal Income Tax Considerations (i) The Notes are not Specified Notes for purposes of Section 871(m). 13

14 SUMMARY Summaries are made up of disclosure requirements known as Elements. These Elements are numbered in Sections A E (A.1 E.7). This Summary contains all the Elements required to be included in a summary for the Notes and the Issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in a summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element should be included in the summary explaining why it is not applicable. Section A Introduction and Warnings A.1 This summary should be read as an introduction to the Base Prospectus and the relevant Final Terms. Any decision to invest in any Notes should be based on a consideration of the Base Prospectus as a whole, including any documents incorporated by reference and the relevant Final Terms. Where a claim relating to information contained in the Base Prospectus and the relevant Final Terms is brought before a court in a Member State of the European Economic Area, the plaintiff may, under the national legislation of the Member State where the claim is brought, be required to bear the costs of translating the Base Prospectus and the relevant Final Terms before the legal proceedings are initiated. No civil liability will attach to the Issuer in any such Member State solely on the basis of this summary, including any translation hereof, unless it is misleading, inaccurate or inconsistent when read together with the other parts of the Base Prospectus and the relevant Final Terms or it does not provide, when read together with the other parts of the Base Prospectus and the relevant Final Terms, key information (as defined in Article 2.1(s) of the Prospectus Directive) in order to aid investors when considering whether to invest in the Notes. A.2 The Notes may be offered in circumstances where there is no exemption from the obligation under the Prospectus Directive to publish a prospectus (a Non-exempt Offer ). Consent: Subject to the conditions set out below, the Issuer consents to the use of this Base Prospectus in connection with a Non-exempt Offer of Notes by Strukturinvest Fondkommission (FK) AB (the Authorised Offeror ). Offer period: The Issuer s consent referred to above is given for Non-exempt Offers of Notes during the period from (and including) 2 July 2018 to (and including) 31 August 2018 (the Offer Period ). Conditions to consent: The conditions to the Issuer s consent are that such consent (a) is only valid during the Offer Period; and (b) only extends to the use of the Base Prospectus to make Nonexempt Offers of the relevant Tranche of Notes in Sweden. AN INVESTOR INTENDING TO ACQUIRE OR ACQUIRING ANY NOTES IN A NON-EXEMPT OFFER FROM THE AUTHORISED OFFEROR WILL DO SO, AND OFFERS AND SALES OF SUCH NOTES TO AN INVESTOR BY THE AUTHORISED OFFEROR WILL BE MADE, IN ACCORDANCE WITH ANY TERMS AND OTHER ARRANGEMENTS IN PLACE BETWEEN THE AUTHORISED OFFEROR AND SUCH INVESTOR INCLUDING AS TO PRICE, ALLOCATIONS AND SETTLEMENT ARRANGEMENTS. THE INVESTOR MUST LOOK TO THE AUTHORISED OFFEROR AT THE TIME OF SUCH OFFER FOR THE PROVISION OF SUCH 14

15 INFORMATION AND THE AUTHORISED OFFEROR WILL BE RESPONSIBLE FOR SUCH INFORMATION. B.1 Legal and Commercial Name B.2 Domicile/ Legal Form/ Legislation/ Country of Incorporation B.4b Known trends affecting the Issuer and the industries in Section B Issuer Danske Bank A/S (the "Issuer"). The Issuer was founded in Denmark and incorporated on 5 October The Issuer is a commercial bank with limited liability and carries on business under the Danish Financial Business Act. The Issuer is registered with the Danish Commerce and Companies Agency and the Danish corporate registration number is There are no known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the Issuer s prospects for its current financial year. which it operates The Issuer is the parent company of the Danske Bank Group (the Group ). B.5 Description of the Group The Issuer is an international retail bank that operates in 15 countries with a focus on the Nordic region and with larger retail banking operations in Northern Ireland, Estonia, Latvia and Lithuania. - No profit forecast or estimates have been made in the Base Prospectus. B.9 Profit forecast or estimate B.12 Selected historical key financial information (DDK million) Danske Bank Group 15 Twelve months ended 31 December 2017 Twelve months ended 31 December 2016 Total income 48,149 47,959 Operating expenses 22,722 22,642 Loan impairment charges (873) (3) Profit before tax, core 26,300 25,320 Profit before tax, Non-core (12) 37 Profit before tax 26,288 25,357 Tax 5,388 5,500 Net profit for the period 20,900 19,858 Balance sheet: Loans 1,723,025 1,689,155 Trading portfolio assets 449, ,678 Assets in Non-core 4,886 19,039 Other assets 1,362,325 1,265,799 Total assets 3,539,528 3,483,670 Deposits 911, ,435 Bonds issued by Realkredit Danmark 758, ,732 Trading portfolio liabilities 400, ,301 Liabilities in Non-core 3,094 2,816 Other liabilities 1,297,355 1,249,771 Total liabilities 3,371,272 3,317,055 Additional tier 1 etc. 14,339 14,343 Shareholders equity 153, ,272

16 (DKK million) Danske Bank Group Three months ended 31 March 2018 Three months ended 31 March 2017 Total income Operating expenses Loan impairment charges (330) (235) Profit before tax, core Profit before tax, Non-core (32) (19) Profit before tax Tax Net profit for the period Balance sheet: Loans Trading portfolio assets Assets in Non-core Other assets Total assets Deposits Bonds issued by Realkredit Danmark Trading portfolio liabilities Liabilities in Non-core Other liabilities Total liabilities Additional tier 1 etc Shareholders equity The net profit in the financial highlights is DKK 312 million higher than the net profit in the IFRS income statement. For further information please refer to page 26 in the Interim report first quarter Statement of no material adverse change Description of significant changes to financial or trading position On 3 May 2018, the Danish Financial Supervisory Authority (the DFSA ) ordered the Board of Directors and the Executive Board to reassess the Issuer s and the Group s solvency need in order to ensure an adequate internal capital coverage of compliance and reputational risks as a result of weaknesses in the Issuer s governance. The DFSA initially estimated that a Pillar II addon should amount to at least DKK 5 billion, or about 0.7 per cent. of the REA (risk exposure amount) at the end of (i) Save as outlined in the immediately preceding sentences, there has been no material adverse change in the prospects of the Issuer since 31 December 2017, the last day of the financial period in respect of which the most recently audited financial statements of the Issuer have been prepared; and (ii) there has been no significant change in the financial position of the Issuer or of the Issuer and its subsidiaries taken as a whole since 31 March 2018, the last day of the financial period in respect of which the most recent financial statements of the Issuer have been prepared. B.13 Recent events materially relevant to an evaluation of the Issuer s solvency - There are no recent events particular to the Issuer which are to a material extent relevant to the evaluation of the Issuer s solvency. 16

17 B.14 Dependence on other entities within the Group B.15 Principal activities B.16 Controlling shareholders B.17 Credit ratings assigned to the Issuer See Element B.5. The Issuer is not dependent on any other entities within the Group. The Group is the leading financial service provider in Denmark (Source: the Danish Financial Supervisory Authority) and one of the largest in the Nordic region measured by total assets as at 31 December The Group offers customers a wide range of services in the fields of banking, mortgage finance, insurance, pension, real-estate brokerage, asset management and trading in fixed income products, foreign exchange and equities. The Group is the largest bank in Denmark (Source: the Danish Financial Supervisory Authority), is one of the largest banks in Finland and Northern Ireland and has challenger positions in Sweden and Norway. The Issuer is not aware of any shareholder or group of connected shareholders who directly or indirectly control the Issuer. As at the date of the Base Prospectus, the Issuer has been rated by the following rating agencies: Moody s Investors Service Ltd. ( Moody s ), Standard & Poor s Credit Market Services Europe Limited ( S&P ) and Fitch Ratings Ltd ( Fitch ). The Issuer ratings are as follows: senior unsubordinated long-term debt/ long-term Issuer default rating senior unsubordinated short-term debt/ short-term Issuer default rating Moody's S&P Fitch A1 A A P-1 A-1 F1 A 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. No ratings have been or are expected to be assigned to the Notes at the request of or with the co-operation of the Issuer in the rating process. Section C Notes Element Title C.1 Description of Notes/ISIN The Notes are Credit-Linked Redemption Notes. The Series number is DDBO_SIF_1842. The Tranche number is 1. The International Securities Identification Number (ISIN) is SE The Common Code is Euroclear Sweden identification number is The calculation amount ( CA ) is SEK 10, C.2 Currency The notes are denominated in SEK and the specified currency for payments in respect of the Notes is SEK. 17

18 C.5 Restrictions on the free transferability of the Notes C.8 Rights attached to the Notes, including ranking and limitations on those rights Transfers of Notes may be effected only through the book entry system and register maintained by Euroclear Sweden. The Notes will be freely transferable, subject to the offering and selling restrictions of the United States, the European Economic Area, the United Kingdom, Denmark, Finland, Norway and Sweden and the laws of any jurisdiction in which the Notes are offered or sold. The Notes have terms and conditions relating to, among the other matters: Ranking The Notes will constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer and will rank pari passu without any preference among themselves and at least pari passu with all other ordinary, nonpreferred, unsubordinated and unsecured obligations of the Issuer, present and future save for certain mandatory exceptions provided by law. Taxation All payments in respect of the Notes will be made without withholding or deduction for taxes imposed by Denmark. In the event that any such deduction is made, the Issuer will, save in certain limited circumstances, be required to pay additional amounts to cover the amounts so deducted. If any such additional amounts become payable and cannot be avoided by the Issuer taking reasonable measures available to it, the Issuer may redeem the Notes early by payment of the early redemption amount in respect of each calculation amount. Negative pledge and cross default The terms of the Notes will not have the benefit of a negative pledge or a cross-default. Events of default The terms of the Notes will contain, amongst others, the following events of default: (i) default in payment of any principal or interest due in respect of the Notes, continuing for a period of 5 days after the date on which notice has been given to the Issuer; (ii) default in the performance or observance of any other obligation of the Issuer under the Notes and such default remains unremedied for 30 days after notice requiring remedy has been given to the Issuer; (iii) a legal process is levied or enforced or sued out upon or against any part of the assets of the Issuer which is material in its effect upon the operation of the Issuer and is not discharged or stayed within 60 days of having been so levied, enforced or sued out, (iv) events relating to the bankruptcy of the Issuer; and (v) the Danish Financial Supervisory Authority files a petition for the suspension of payments of the Issuer. Meetings The terms of the Notes will contain provisions for calling meetings of holders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all holders, including holders who did not attend and vote at the relevant meeting and holders who voted in a manner contrary to the majority. Governing Law 18

19 C.9 Interest, Redemption and Representation: The nominal interest rate The date from which interest becomes payable and the due dates for interest Where the rate is not fixed, description of the underlying on which it is based Maturity Date and arrangements for the amortisation of the loan, including the repayment procedure English law, except that the registration of the Notes in Euroclear Sweden shall be governed by Swedish law. The Notes bear interest from their date of issue to (and including) 20 June 2023 at the fixed rate of INDICATIVELY 7.50 per cent. (to be determined by the Issuer no later than on the Issue Date, subject to a minimum of 6.00 per cent.) per annum. Interest, if any, will be paid quarterly in arrear on 9 January 2019, 9 April 2019, 9 July 2019, 9 October 2019, 9 January 2020, 9 April 2020, 9 July 2020, 9 October 2020, 9 January 2021, 9 April 2021, 9 July 2021, 9 October 2021, 9 January 2022, 9 April 2022, 9 July 2022, 9 October 2022, 9 January 2023, 9 April 2023 and 9 July See Taxation and Events of Default in Element C.8 above for information on early redemption in relation to the Notes. In addition, if the Issuer determines that performance of its obligations under the Notes or that any arrangements made to hedge its obligations under the Notes has or will become illegal in whole or in part as a result of compliance with any applicable present or future law (an illegality ), the Issuer may redeem the Notes early and, if and to the extent permitted by applicable law, will pay an amount equal to the early redemption amount in respect of each calculation amount. In the circumstances specified above, the early redemption amount payable on any such early redemption of the Notes will be an amount determined by the Calculation Agent which represents the fair market value of each calculation amount of the Notes on a day selected by the Issuer (in the case of an early redemption following an illegality, ignoring the relevant illegality), but adjusted (except in the case of an early redemption following an event of default) to account for losses, expenses and costs to the Issuer and/ or its affiliates of unwinding any hedging and funding arrangements in respect of the Notes, provided that, for the purposes of determining the fair market value of each calculation amount of the Notes following an event of default, no account shall be taken of the financial condition of the Issuer which shall be presumed to be able to perform fully its obligations in respect of the Notes. Redemption at maturity Unless previously redeemed or purchased and cancelled, the Notes will be redeemed at their Final Redemption Amount on the maturity date. The maturity date is 9 July C.11 Admission to trading Application has been made for the Notes to be admitted to trading on the regulated market of Nasdaq Stockholm AB with effect from on or about the Issue Date. 19

20 C.15 Description of how the value of the investment is affected by the value of the underlying instrument(s The Notes are Fixed Rate Notes. The Notes are also Credit-Linked Notes. Following the occurrence of a Credit Event in respect of a Reference Entity (being, a bankruptcy or a failure to pay or a restructuring in respect of the relevant Reference Entity or specified obligations thereof), interest shall be determined by reference to an amount equal to the Tranched Calculation Amount determined by reference to the reference entity notional amounts in respect of the number of Reference Entities in respect of which a credit event determination date has occurred prior to the credit event observation date falling on or immediately preceding the interest period date falling at the end of the relevant interest period. For the purposes of the above, Tranched Calculation Amount means, in respect of a day, an amount determined by reference to the following formula: where "Aggregate Portfolio Loss" is determined as of the relevant day and is as set out in Element C.18 below provided that where any Final Price is not determined as of the relevant date such Final Price will be deemed to be zero and provided further that TUC will be determined as if the Notes were being redeemed as of the relevant day. Where any Final Price is deemed to be zero, the Calculation Agent will calculate the shortfall (if any) in any amount(s) of interest paid prior to such Final Price being determined on the basis of the amount of interest which would have been payable had the relevant Final Price been determined as of the related Credit Event Determination Date. The Issuer will pay in respect of such Note and each such Final Price for which the relevant shortfall has been calculated, the relevant shortfall(s) relating to that Note on the next following Interest Payment Date or, if none, the Credit Event Redemption Date but without any additional interest or other amount in respect of the relevant delay(s). C.17 Settlement procedure of derivative securities C.18 Return on derivative securities See also Element C.18 below. The Notes are cash settled Notes. The interest amounts (if any) and the redemption amount due at maturity are determined as follows: Interest Subject as provided in Element C.15, the Notes bear interest from (but excluding) their issue date to (and including) 20 June 2023 at the fixed rate of INDICATIVELY 7.50 per cent. (to be determined by the Issuer no later than on the Issue Date, subject to a minimum of 6.00) per annum. Subject as provided in Element C.15, interest, if any, will be paid quarterly in arrear on 9 January 2019, 9 April 2019, 9 July 2019, 9 October 2019, 9 January 2020, 9 April 2020, 9 July 2020, 9 October 2020, 9 January 2021, 9 April 2021, 9 July 2021, 9 October 2021, 9 January 2022, 9 April 2022, 9 July 2022, 9 October 2022, 9 January 2023, 9 April 2023 and 9 July Early redemption 20

21 See Taxation and Events of Default in Element C.8 above for information on early redemption in relation to the Notes. In addition, if the Issuer determines that performance of its obligations under the Notes or that any arrangements made to hedge its obligations under the Notes has or will become illegal in whole or in part as a result of compliance with any applicable present or future law (an illegality ), the Issuer may redeem the Notes early and, if and to the extent permitted by applicable law, will pay an amount equal to the early redemption amount in respect of each calculation amount In the circumstances specified above, the early redemption amount payable on any such early redemption of the Notes will be an amount determined by the Calculation Agent which represents the fair market value of each calculation amount of the Notes on a day selected by the Issuer (in the case of an early redemption following an illegality, ignoring the relevant illegality), but adjusted (except in the case of an early redemption following an event of default) to account for losses, expenses and costs to the Issuer and/or its affiliates of unwinding any hedging and funding arrangements in respect of the Notes, provided that, for the purposes of determining the fair market value of each calculation amount of the Notes following an event of default, no account shall be taken of the financial condition of the Issuer which shall be presumed to be able to perform fully its obligations in respect of the Notes. Redemption at maturity Unless previously redeemed or purchased and cancelled, the Notes will be redeemed at their Final Redemption Amount on the Maturity Date. The maturity date is 9 July Subject as provided below under Redemption following the occurrence of a Credit Event, the Final Redemption Amount is par. Redemption following the occurrence of a Credit Event Notwithstanding the above provisions, if a credit event determination date has occurred in respect of any specified reference entity the Issuer will redeem the Notes, each Note being redeemed at the Credit Event Redemption Amount on the Credit Event Redemption Date. Credit Event Redemption Date means the later of (a) the day falling three Business Days following the date as of which a credit event determination date has occurred or is determined not to have occurred in respect of each reference entity which is relevant for the determination of the Credit Event Redemption amount and (b) the Maturity Date, subject to adjustment. Credit Event Redemption Amount means: in relation to each Calculation Amount equal to Where: 21

22 Aggregate Portfolio Loss means, in respect of a day, a percentage, floored at zero per cent. and capped at 100 per cent., determined by the Calculation Agent by reference to the following formula calculated as of such day: AP is the Attachment Point, being %; DP is the Detachment Point, being %; LP means the Loss Percentage being, in respect of a day, a fraction expressed as a percentage, determined by the Calculation Agent by reference to the following formula calculated as of such day: Where: RENA is the Reference Entity Notional Amount, with RENAu,i being the Reference Entity Notional Amount in respect of any Reference Entity for which a credit event determination date has not occurred and being deemed to be zero for all other Reference Entities and RENAA,i is the Reference Entity Notional Amount in respect of any Reference Entityi for which a credit event determination date has occurred and being deemed to be zero for all other Reference Entities; FP is 0%, with FPA,i being such value in respect of the Reference Entity for which a credit event determination date has occurred; TUC is each Note s pro rata portion of the Unwind Costs Unwind Costs is SEK 0; and n is the number of Reference Entities. The Credit Event Redemption Amount shall not be less than zero. C.20 Underlying The Reference Entities are included in Itraxx Europe Crossover Series 29 Version 1. Information relating to the Reference Entity is available from internationally recognised published or electronically displayed sources such as Bloomberg and any web-site of the Reference Entitiesand from Section D Risks D.2 Key risks specific to the Issuer In purchasing Notes, investors assume the risk that the Issuer may become insolvent or otherwise be unable to make all payments due in respect of the Notes. There is a wide range of factors which individually or together could result in the Issuer becoming unable to make all payments due in respect of the Notes. It is not possible to identify all such factors or to determine which factors are most likely to occur, as the Issuer may not be aware of all relevant factors and certain factors which it currently deems not to be material may become material as a result of the occurrence of events outside the Issuer s control. The 22

23 D.6 Key information on key risks specific to the Notes Issuer has identified in the Base Prospectus a number of factors which could materially adversely affect its business and ability to make payments due under the Notes. These factors include: the Group is exposed to a number of risks, the categories of which are credit risk, counterparty credit risk, market risk, liquidity risk, operational risk, insurance risk, and pension risk; regulatory changes could materially affect the Issuer s business; the Issuer will face increased capital and liquidity requirements as a result of the framework implementing, among other things, the Basel Committee on Banking Supervision s proposals imposing stricter capital and liquidity requirements upon banks in the EU; the implementation of a bank recovery and resolution directive or the taking any action under it could materially affect the value of any Notes; the Group may have to pay additional amounts under deposit guarantee schemes or resolution funds; and the Group may be affected by general economic and geopolitical conditions. The Issuer believes that the factors summarised below represent the principal risks inherent in investing in the Notes, but the Issuer may be unable to pay amounts on or in connection with any Notes for other reasons which may not be considered significant risks by the Issuer based on information currently available to it and which it may not currently be able to anticipate. Notes may involve a high degree of risk. There are certain factors which are material for the purpose of assessing the market risks associated with investing in the Notes, which include, without limitation, the following: an active secondary market in respect of the Notes may never be established or may illiquid and this would adversely affect the value at which an investor could sell its Notes, if an investor holds Notes which are not denominated in the investor s home currency, it will be exposed to movements in exchange rates adversely affecting the value of its holding and the imposition of exchange controls could result in an investor not receiving payment on those Notes, the market value of the Notes will be affected by a number of factors independent of the creditworthiness of the Issuer, credit ratings assigned to the Issuer may not reflect all the risks associated with an investment in the Notes, the Notes may not be a suitable investment for all investors, because the VP Systems Notes are dematerialised securities, investors will have to rely on the clearing system procedures for transfer, payment and communication with the Issuer, taxes and expenses may be payable by holders in connection with the Notes, taxes and expenses may be payable by holders in connection with the Notes, U.S. Foreign Account Tax Compliance Act withholding may affect payments on the Notes, the Hiring Incentives to Restore Employment Act withholding may affect payments on the Notes, the proposed financial transactions tax may apply in respect of certain dealings in Notes, reforms to benchmarks could have an effect on the Notes; the Terms and Conditions of the Notes contain provisions which may permit their modification without the consent of all investors, the value of the Notes could be adversely affected by a change in applicable laws or administrative practice, the Issuer has issued covered bonds and if any relevant claims in respect of these covered bonds are not met out of the pool of assets or the proceeds arising from it, any remaining claims will subsequently rank pari passu with the Issuer s obligations under the Notes. In addition, there are certain factors which are material for the purpose of assessing the risks relating to the structure of the Notes, which include, without limitation, the following: if the Issuer s obligations under the Notes become 23

24 Risk Warning illegal, the Issuer may redeem the Notes and the value of Fixed Rate Notes may be affected by movements in market interest rates. There are certain additional risks associated with Credit-Linked Notes: prospective investors in the Notes should understand the risks of transactions involving the Notes and should reach an investment decision only after careful consideration, with their advisers, of the suitability of the Notes in light of their particular financial circumstances, the information set forth in the Base Prospectus and the information regarding the Notes and the Reference Entities to which the value of and payments in respect of the Notes relate. Fluctuations in the value and/or volatility of obligations issued or guaranteed by a Reference Entity may affect the value of the Notes and the occurrence of a Credit Event in respect of a Reference Entity will reduce the amount of interest and principal payable and may alter the timing of redemption. Investors may risk losing their entire investment. Investors will have no claim against any Reference Entity. Hedging arrangements of the Issuer may affect the value of the Notes and there may be conflicts of interest in respect of the Notes. The terms of the Notes may change by reference to market convention and as a result of determinations made by a relevant Credit Derivatives Determination Committee. A Reference Entity may be replaced due to events beyond the control of the Issuer. The risk associated with the Notes may increase as a result of changes to the Notes after the issue date. THE AMOUNT PAID ON REDEMPTION OF THE NOTES MAY BE LESS THAN THE PRINCIPAL AMOUNT OF THE NOTES, TOGETHER WITH ANY INTEREST, AND MAY IN CERTAIN CIRCUMSTANCES BE ZERO. INVESTORS MAY LOSE THE VALUE OF THEIR ENTIRE INVESTMENT, OR PART OF IT, AS THE CASE MAY BE. Section E Offer Element Title E.2b Reasons for offer and use of The net proceeds from each issue of Notes will be applied by the Issuer to meet part of its general financing requirements. proceeds when different from making profit and/or hedging certain risks E.3 Terms and conditions of the offer This issue of Notes is being offered in a Non-Exempt Offer in Sweden. The issue price of the Notes is per cent. of their principal amount. The Issuer reserves the right to cancel, in the sole and absolute discretion of the Issuer, the Issue of the Notes if (i) the Issuer receives subscriptions for Notes on an Aggregate Principal Amount of less than SEK 15,000,000, or (ii) the Issuer does not determine the Rate of Interest to be at least 6.00 per cent. Further, the Issuer has the right to cancel the offer and the subsequent issue of the Notes if in the sole and absolute discretion of the Issue, during the Offer Period, there is a domestic or international material change in interest levels and/ or the volatility in the underlying equities, an economic, financial, political or market related material change, which in the sole and absolute discretion of the Issuer makes the offering of Notes inexpedient. 24