IMPORTANT NOTICE. In accessing the attached base prospectus (the "Base Prospectus") you agree to be bound by the following terms and conditions.

Transcription

1 IMPORTANT NOTICE In accessing the attached base prospectus (the "Base Prospectus") you agree to be bound by the following terms and conditions. The information contained in the Base Prospectus may be addressed to and/or targeted at persons who are residents of particular countries only as specified in the Base Prospectus and is not intended for use, and should not be relied upon, by any person outside those countries. Prior to relying on the information contained in the Base Prospectus, you must ascertain from the Base Prospectus whether or not you are an intended addressee of, and eligible to view, the information contained therein. The Base Prospectus does not constitute, and may not be used in connection with, an offer to sell or the solicitation of an offer to buy securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities law of any such jurisdiction. The securities described in the Base Prospectus have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States and may include Covered Bonds in bearer form that are subject to U.S. tax law requirements. Subject to certain exceptions, such securities may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act ("Regulation S")). The securities described in the Base Prospectus will only be offered in offshore transactions to non-u.s. persons in reliance upon Regulation S. For a more complete description of restrictions on offers and sales of the securities described in the Base Prospectus, see pages iii to v and the section "Subscription and Sale".

2 BASE PROSPECTUS NORDEA EIENDOMSKREDITT AS (Incorporated with limited liability in the Kingdom of Norway) EUR 10,000,000,000 Covered Bond Programme Nordea Eiendomskreditt AS (the "Issuer") has established a EUR 10,000,000,000 Covered Bond Programme (the "Programme"). Any Covered Bonds (as defined below) issued under the Programme on or after the date of this Base Prospectus are issued subject to the provisions described herein. The Issuer may from time to time issue covered bonds (obligasjoner med fortrinnsrett) (the "Covered Bonds") in accordance with the Norwegian Act No. 40 of 10 June 1988 on Financing Activity and Financial Institutions (the "Financial Institutions Act"), Chapter 2, Sub-Chapter IV and appurtenant regulations (together, the "Covered Bond Legislation") denominated in any currency as may be agreed with the relevant Dealer(s) (as defined below). Covered Bonds issued pursuant to the Programme may include Covered Bonds issued in bearer form ("Bearer Covered Bonds"), in registered form ("Registered Covered Bonds") or in uncertificated and dematerialised book-entry form designated as "VPS Covered Bonds" in the applicable Final Terms or Pricing Supplement and Covered Bonds denominated in Swiss Francs and designated as "Swiss Franc Covered Bonds" in the applicable Pricing Supplement. The maximum aggregate amount of all Covered Bonds from time to time outstanding will not exceed EUR 10,000,000,000 (or its equivalent in other currencies at the time of agreement to issue, subject as further set out herein). For the purposes of calculating amounts outstanding under the Programme, all calculations will be made in euro. The Covered Bonds may be issued on a continuing basis to one or more of the principal dealers or Swiss dealers specified herein and any additional dealer appointed under the Programme from time to time, which appointment may be for a specific issue or on an ongoing basis (each a "Dealer" and together the "Dealers"). This Base Prospectus has been approved by the Central Bank of Ireland (the "Central Bank") as competent authority under the Prospectus Directive (as defined herein). The Central Bank only approves this Base Prospectus as meeting the requirements imposed under Irish and European law pursuant to the Prospectus Directive. Such approval relates only to Covered Bonds which are to be admitted to trading on a regulated market for the purposes of Directive 2004/39/EC on Markets in Financial Instruments ("MiFID"). This Base Prospectus constitutes a base prospectus for the purposes of the Prospectus Directive. The requirement to publish a prospectus under the Prospectus Directive only applies to Covered Bonds which are to be admitted to trading on a regulated market for the purposes of MiFID in the European Economic Area and/or offered to the public in the EEA other than in circumstances where an exemption is available under Article 3.2 of the Prospectus Directive (as implemented in the relevant Member State(s)). References in this Base Prospectus to "Exempt Covered Bonds" are to Covered Bonds for which no prospectus is required to be published under the Prospectus Directive. The Central Bank has neither approved nor reviewed information contained in this Base Prospectus in connection with Exempt Covered Bonds. Application will be made to the Irish Stock Exchange for Covered Bonds issued under the Programme (other than Exempt Covered Bonds (as defined herein)) to be admitted to the official list (the "Official List") and trading on its regulated market (the "Main Securities Market"). An application will also be made to the United Kingdom Financial Conduct Authority (the "FCA") and London Stock Exchange plc (the "London Stock Exchange") for Covered Bonds issued under the Programme (other than Exempt Covered Bonds) to be admitted to listing on the official list of the FCA and to trading on the regulated market of the London Stock Exchange during the period of twelve months after the date hereof. The Central Bank has been requested by the Issuer to provide the FCA with a certificate of approval attesting that the Base Prospectus has been drawn up in accordance with the Prospectus Directive. The Main Securities Market and the regulated market of the London Stock Exchange are regulated markets for the purposes of MiFID. It is expected that this Base Prospectus will be submitted to the SIX Swiss Exchange Ltd (the "SIX Swiss Exchange") for registration as an "issuance programme" for the listing of bonds on the SIX Swiss Exchange in accordance with the listing rules of the SIX Swiss Exchange (the "SIX Listing Rules"). If approved, in respect of any Tranche (as defined herein) of Covered Bonds to be listed on the SIX Swiss Exchange during the period of twelve months from the date of this Base Prospectus, this Base Prospectus, together with the relevant Pricing Supplement, will constitute the listing prospectus for purposes of the SIX Listing Rules. The Programme also permits Covered Bonds to be issued on the basis that they will not be admitted to listing, trading and/or quotation by any competent authority, stock exchange and/or quotation system or to be admitted to listing, trading and/or quotation by such other or further competent authorities, stock exchanges and/or quotation systems as may be agreed with the Issuer (including the SIX Swiss Exchange, in the case of Swiss Franc Covered Bonds). Notice of the aggregate principal amount of, interest (if any) payable in respect of, the issue price of, and, in the case of Exempt Covered Bonds only, any other terms and conditions not contained herein which are applicable to, each Tranche (as defined below) of Covered Bonds will be set forth in a final terms (the "Final Terms") or, in the case of Exempt Covered Bonds, a pricing supplement (the "Pricing Supplement"). There are certain risks related to any issue of Covered Bonds under the Programme which investors should ensure they fully understand (see "Risk Factors" below). This Base Prospectus does not describe all of the risks of an investment in the Covered Bonds. Arranger BofA Merrill Lynch Dealers Barclays BNP PARIBAS BofA Merrill Lynch Citigroup Credit Suisse Deutsche Bank Goldman Sachs International HSBC J.P. Morgan Nomura Nordea The Royal Bank of Scotland Société Générale Corporate & Investment Banking The date of this Base Prospectus is 17 June ii-

3 This Base Prospectus including the Annexes hereto, which form part of this Base Prospectus, should be read and construed together with any amendments or supplements hereto in relation to any Tranche of Covered Bonds, should be read and construed together with the relevant Final Terms or Pricing Supplement. Copies of each Final Terms or each Pricing Supplement will be available from the specified offices of each of the Paying Agents and (in the case of Covered Bonds which may be in registered form) from the specified office of, the Registrar and each of the Transfer Agents (see "Terms and Conditions of the Covered Bonds" herein). The Issuer may agree with any Dealer(s) that Covered Bonds may be issued in a form not contemplated by the "Terms and Conditions of the Covered Bonds" herein, in which case a drawdown prospectus, if appropriate, will be made available which will describe the effect of the agreement reached in relation to such Covered Bonds. In the case of Exempt Covered Bonds, the relevant provisions relating to such Covered Bonds will be included in the relevant Pricing Supplement. The Issuer has confirmed to the Dealers named under "Subscription and Sale" below that this Base Prospectus (including for this purpose, each relevant Final Terms or Pricing Supplement) contains all information which is (in the context of the Programme and the issue, offering and sale of the Covered Bonds) material; that such information is true and accurate in all material respects and is not misleading in any material respect; that any opinions, predictions or intentions expressed herein are honestly held or made and are not misleading in any material respect; that this Base Prospectus does not omit to state any material fact necessary to make such information, opinions, predictions or intentions (in the context of the Programme and the issue, offering and sale of the Covered Bonds) not misleading in any material respect; and that all proper enquiries have been made to verify the foregoing. The Issuer (the "Responsible Person") accepts responsibility for the information contained in this Base Prospectus and the Final Terms or Pricing Supplement for each Tranche of Covered Bonds and declares that, having taken all reasonable care to ensure that such is the case, the information contained in this Base Prospectus is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import. No person has been authorised to give any information or to make any representation not contained in or not consistent with this Base Prospectus or any other document entered into in relation to the Programme or any information supplied by the Issuer or such other information as is in the public domain and, if given or made, such information or representation should not be relied upon as having been authorised by the Issuer or any Dealer. Neither the Dealers nor the Arranger 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 Dealers or the Arranger as to the accuracy or completeness of the financial information contained in this Base Prospectus, or any other financial statements or any further information supplied in connection with the Covered Bonds. The Dealers and the Arranger accept no liability in relation to the financial information contained in this Base Prospectus or any other financial statements or their distribution or with regard to any other information supplied in connection with the Covered Bonds. Neither the delivery of this Base Prospectus nor any Final Terms nor any Pricing Supplement nor the offering, sale or delivery of any Covered Bond shall, in any circumstances, create any implication that the information contained in this Base Prospectus is true subsequent to the date hereof or the date upon which this Base Prospectus has been most recently amended or supplemented or that there has been no adverse change, or any event reasonably likely to involve any adverse change, in the condition (financial or otherwise) of the Issuer since the date thereof or, if later, the date upon which this Base Prospectus has been most recently amended or supplemented or that any other information supplied in connection with the Programme is correct at any time subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same. The distribution of this Base Prospectus and any Final Terms or Pricing Supplement and the offering, sale and delivery of the Covered Bonds in certain jurisdictions may be restricted by law. Persons into whose possession this Base Prospectus comes are required by the Issuer and the Dealers to inform themselves about and to observe any such restrictions. For a description of certain restrictions on offers, sales and - iii-

4 deliveries of Covered Bonds and on distribution of this Base Prospectus or any Final Terms or Pricing Supplement and other offering material relating to the Covered Bonds see "Subscription and Sale". THE COVERED BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION IN THE UNITED STATES NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR THE ADEQUACY OF THIS BASE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES. THE COVERED BONDS HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY INCLUDE COVERED BONDS IN BEARER FORM THAT ARE SUBJECT TO U.S. TAX LAW REQUIREMENTS. SUBJECT TO CERTAIN EXCEPTIONS, THE COVERED BONDS MAY NOT BE OFFERED, SOLD OR DELIVERED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT ("REGULATION S")). SEE "SUBSCRIPTION AND SALE". RATINGS The Covered Bonds to be issued under the Programme are expected to be assigned the following rating: Rating Agency Moody's Investors Service Limited Rating Aaa Moody's Investors Service Limited ("Moody's"), is established in the EEA and is registered under Regulation (EU) No 1060/2009, as amended (the "CRA Regulation"). Tranches of Covered Bonds to be issued under the Programme may be rated or unrated. Where a Tranche of Covered Bonds is rated, the applicable rating(s) will be specified in the relevant Final Terms or Pricing Supplement. Such rating will not necessarily be the same as any rating(s) assigned to the Issuer or to Covered Bonds already issued. Whether or not each credit rating applied for in relation to a relevant Tranche of Covered Bonds will be issued by a credit rating agency established in the EEA and registered under the CRA Regulation will be disclosed in the Final Terms or Pricing Supplement, as applicable. The European Securities and Markets Authority ("ESMA") is obliged to maintain on its website, a list of credit rating agencies registered and certified in accordance with the CRA Regulation. This list must be updated within five working days of ESMA's adoption of any decision to withdraw the registration of a credit rating agency under the CRA Regulation. Therefore, such list is not conclusive evidence of the status of the relevant rating agency as there may be delays between certain supervisory measures being taken against a relevant rating agency and the publication of the updated ESMA list. In general, European regulated investors are restricted from using a rating for regulatory purposes if such rating is not issued by a credit rating agency established in the EEA and registered under the CRA Regulation (and such registration has not been withdrawn or suspended) unless (1) the rating is provided by a credit rating agency not established in the EEA but is endorsed by a credit rating agency established in the EEA and registered under the CRA Regulation (and such endorsement action has not been withdrawn or suspended) or (2) the rating is provided by a credit rating agency not established in the EEA, but which is certified under the CRA Regulation (and such certification has not been withdrawn or suspended). 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. Neither this Base Prospectus nor any Final Terms nor any Pricing Supplement, as the case may be, constitutes an offer or an invitation to subscribe for or purchase any Covered Bonds and should not be considered as a recommendation by the Issuer, the Dealers or any of them that any recipient of this Base - iv-

5 Prospectus or any Final Terms or Pricing Supplement, as the case may be, should subscribe for or purchase any Covered Bonds. Each recipient of this Base Prospectus or any Final Terms or Pricing Supplement, as the case may be, shall be taken to have made its own investigation and appraisal of the condition (financial or otherwise) of the Issuer. In connection with the issue of any Tranche of Covered Bonds under the Programme, the Dealer or Dealers (if any) acting as the Stabilising Manager(s) (or any persons acting on behalf of any Stabilising Manager(s)) may over-allot Covered Bonds or effect transactions with a view to supporting the market price of the Covered Bonds at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilising Manager(s) (or persons acting on behalf of any Stabilising Manager(s)) will undertake stabilisation action. Any stabilisation action may begin on or after the date on which adequate public disclosure of the terms of the offer of the relevant Tranche of Covered Bonds 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 Covered Bonds and 60 days after the date of the allotment of the relevant Tranche of Covered Bonds. Any stabilisation action or over-allotment must be conducted by the relevant Stabilisation Manager(s) (or person(s) acting on behalf of any Stabilisation Manager(s)) in accordance with all applicable laws and rules. The language of the Base Prospectus is English. Certain legislative references and technical terms have been cited in their original language in order that the correct technical meaning may be ascribed to them under applicable law. In this Base Prospectus, references to the "EU" are to the European Union, references to the "EEA" are to the European Economic Area (being the EU plus Iceland, Liechtenstein and Norway), references to "Relevant Member State" are to a Member State of the EEA which has implemented the Prospectus Directive, references to "Prospectus Directive" mean Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State, "2010 PD Amending Directive" means Directive 2010/73/EU and the expression "EU Savings Directive" means EC Council Directive 2003/48/EC on the taxation of savings income in the form of interest payments. References to "U.S.$", "U.S. dollars" or "dollars" are to United States dollars, references to "Euro", "euro", "EUR" or " " are to the currency introduced at the start of the third stage of European economic and monetary union, and as defined in Article 2 of Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the Euro as amended, references to "Swiss Francs", "Swiss francs" or "CHF" are to Swiss Francs, references to "Norwegian Kroner", "Norwegian Krone" or "NOK" are references to Norwegian Kroner, references to "Swedish Krona", "Swedish Kronor" or "SEK" are to Swedish Kronor, references to "Danish Krone" or "DKK" are to Danish Krone, references to "sterling" or " " are to Pounds Sterling and references to "Yen" are to Japanese Yen. In this Base Prospectus, references to "Standard & Poor's" are to Standard & Poor's Credit Market Services Europe Limited, references to "Fitch" are to Fitch Ratings Limited and references to "Moody's" are to Moody's Investors Service Limited. Each of Standard & Poor's, Fitch and Moody's is established in the European Union and registered under the CRA Regulation and is, as of the date of this Base Prospectus, included in the list of credit rating agencies published by ESMA on its website ( in accordance with the CRA Regulation. The terms and conditions applicable to any particular Tranche of Exempt Covered Bonds will be the Conditions as supplemented, amended and/or replaced to the extent described in the relevant Pricing Supplement. - v-

6 CONTENTS OVERVIEW OF THE BASE PROSPECTUS... 1 RISK FACTORS... 5 FORM OF THE COVERED BONDS SUMMARY OF PROVISIONS RELATING TO THE COVERED BONDS WHILE IN GLOBAL FORM CLEARING AND SETTLEMENT FORM OF FINAL TERMS FORM OF PRICING SUPPLEMENT TERMS AND CONDITIONS OF THE COVERED BONDS THE COVERED BOND LEGISLATION USE OF PROCEEDS THE NORDEA GROUP NORDEA EIENDOMSKREDITT AS SELECTED FINANCIAL INFORMATION THE HOUSING MORTGAGE MARKET IN NORWAY TAXATION SUBSCRIPTION AND SALE GENERAL INFORMATION GLOSSARY OF CERTAIN DEFINED TERMS ANNEX 1 Q1 INTERIM FINANCIAL STATEMENTS OF THE ISSUER FOR THE PERIOD ENDED 31 MARCH ANNEX 2 - AUDITED FINANCIAL STATEMENTS OF THE ISSUER FOR THE YEAR ENDED 31 DECEMBER 2012, INCLUDING THE AUDITOR'S REPORT AND NOTES RELATING THERETO ANNEX 3 - AUDITED FINANCIAL STATEMENTS OF THE ISSUER FOR THE YEAR ENDED 31 DECEMBER 2011, INCLUDING THE AUDITOR'S REPORT AND NOTES RELATING THERETO INDEX OF DEFINED TERMS Page

7 OVERVIEW OF THE BASE PROSPECTUS This overview must be read as an introduction to this Base Prospectus and any decision to invest in the Covered Bonds should be based on a consideration of the Base Prospectus as a whole and, in relation to the terms and conditions of any particular Tranche of Covered Bonds, the applicable Final Terms or Pricing Supplement. Each decision to invest in any Covered Bonds should be based on an assessment of the entire Base Prospectus. Words and expressions defined in the "Terms and Conditions of the Covered Bonds" below or elsewhere in this Base Prospectus have the same meanings in this overview. Issuer: Nordea Eiendomskreditt AS (the "Issuer") The Issuer is a licensed mortgage credit institution and a whollyowned subsidiary of Nordea Bank Norway (as defined below), which is the Norwegian bank of the Nordea Group. The Issuer is a limited company incorporated and domiciled in Norway. Arranger: Dealers: Fiscal Agent: Registrar: VPS Paying Agent: Swiss Paying Agent: Irish Listing Agent: Amount: Description: Distribution: Currencies: Status of Covered Bonds: Merrill Lynch International Barclays Bank PLC, BNP Paribas, London Branch, Citigroup Global Markets Limited, Credit Suisse Securities (Europe) Limited, Deutsche Bank Aktiengesellschaft, Goldman Sachs International, HSBC Bank plc, J.P. Morgan Securities plc, Merrill Lynch International, Nomura International plc, Nordea Bank Danmark A/S, The Royal Bank of Scotland plc, Société Générale, and any other Dealer appointed by the Issuer either generally in respect of the Programme or in relation to a particular Tranche of Covered Bonds. Citibank, N.A., London Branch Citigroup Global Markets Deutschland AG Nordea Bank Norge ASA ("Nordea Bank Norway") Citibank, N.A., Zurich Arthur Cox Listing Services Limited Up to EUR 10,000,000,000 (or its equivalent in other currencies at the time of agreement to issue) outstanding at any one time. Covered Bond Programme. Covered Bonds may be distributed by way of private or public placement and in each case on a syndicated or a non-syndicated basis. U.S. dollars, euro, sterling, Swiss Francs, Norwegian Kroner, Swedish Kronor, Danish Krone and Yen and/or such other currency or currencies as may be agreed with the relevant Dealer(s), subject to compliance with all applicable legal and/or regulatory and/or central bank requirements. Covered Bonds will be unsubordinated obligations of the Issuer issued in accordance with the Covered Bond Legislation and will rank pari passu among themselves and with all other obligations of the Issuer that have been provided the same priority as debt instruments issued pursuant to the Covered Bond Legislation. To the extent that claims in relation to the Covered Bonds and related derivative contracts are not met out of the pool of assets maintained by the Issuer in accordance with the Covered Bond Legislation (the "Cover Pool"), the residual claims will rank pari passu with the - 1-

8 unsecured and unsubordinated obligations of the Issuer. Maturities: Issue Price: Issuance in Series: Form of Covered Bonds: Interest: Redemption: Any maturity subject to a minimum maturity of 30 days subject, in relation to specific currencies, to compliance with all applicable legal and/or regulatory and/or central bank requirements. The Covered Bonds will be issued on a fully paid basis and be issued at any price, as specified in the applicable Final Terms or Pricing Supplement including at par, at a discount to, or premium over, par. Covered Bonds are issued in series (each a "Series") and Covered Bonds of each Series will all be subject to identical terms (except issue price, issue date and interest commencement date, which may or may not be identical). Further Covered Bonds may be issued as part of an existing Series (each a "Tranche"), in respect of which, Covered Bonds will be identical in all respects. Covered Bonds may be issued in bearer form (which includes any Swiss Franc Covered Bonds), in registered form or (in the case of VPS Covered Bonds) in uncertificated and dematerialised book-entry form as specified in the relevant Final Terms or Pricing Supplement. Covered Bonds in bearer form will not be exchangeable for Covered Bonds in registered form and Covered Bonds in registered form will not be exchangeable for Covered Bonds in bearer form. Covered Bonds may be interest bearing or non-interest bearing. Covered Bonds may be issued as fixed rate, floating rate or zero coupon as provided in the relevant Final Terms or Pricing Supplement. Covered Bonds may be redeemable at par or, in the case of Exempt Covered Bonds only, at such other redemption amount as may be specified in the relevant Pricing Supplement. Early redemption of Covered Bonds will be permitted for taxation reasons as mentioned in Condition 5(b) (Early Redemption for Taxation Reasons), but will otherwise be permitted only to the extent specified in the relevant Pricing Supplement. Covered Bonds denominated in Sterling may not be redeemed prior to one year and one day from the date of issue. Extended Maturity Date: The applicable Final Terms or Pricing Supplement may provide that an Extended Maturity Date applies to the relevant Series of Covered Bonds. If an Extended Maturity Date is specified in the applicable Final Terms or Pricing Supplement as applying to a Series of Covered Bonds and the Issuer fails to redeem the relevant Covered Bonds in full on the Maturity Date or within three Business Days thereafter, the maturity of the outstanding Covered Bonds and the date on which such Covered Bonds will be due and repayable for the purposes of the Terms and Conditions will be automatically extended up to but no later than the Extended Maturity Date, subject as otherwise specified in the applicable Pricing Supplement. In that event, the Issuer may redeem all or any part of the principal amount outstanding of the Covered Bonds on any Interest Payment Date falling in any month after the Maturity Date up to and including the Extended Maturity Date or as otherwise specified in the applicable Pricing Supplement. If the Issuer fails to redeem the relevant Covered Bonds in full on the Maturity Date or within three Business Days thereafter, the Covered Bonds will bear interest on the principal amount outstanding of the - 2-

9 Covered Bonds from (and including) the Maturity Date to (but excluding) the earlier of the Interest Payment Date after the Maturity Date on which the Covered Bonds are redeemed or the Extended Maturity Date and will be payable in respect of the interest period ending immediately prior to the relevant Interest Payment Date in arrear or as otherwise provided for in the applicable Pricing Supplement on each Interest Payment Date after the Maturity Date at the rate specified in the applicable Final Terms or Pricing Supplement. In the case of a Series of Covered Bonds with an Extended Maturity Date, those Covered Bonds may be issued as fixed rate, floating rate or zero coupon in respect of the period from (and including) the Issue Date to (but excluding) the Maturity Date; and issued as fixed rate or floating rate in respect of the period from (and including) the Maturity Date to (but excluding) the Extended Maturity Date as set out in the applicable Final Terms or Pricing Supplement. In the case of Covered Bonds which are non-interest bearing up to the Maturity Date and for which an Extended Maturity Date applies, the initial outstanding principal amount on the Maturity Date for the above purposes will be the total amount otherwise payable by the Issuer but unpaid on the relevant Covered Bonds on the Maturity Date. Denominations: Taxation: Ratings: Covered Bonds will be issued in such denominations as may be specified in the relevant Final Terms or Pricing Supplement, subject to (i) a minimum denomination of 100,000 (or its equivalent in any other currency) for each Covered Bond admitted to trading on a regulated market within the EEA; and (ii) compliance with all applicable legal and/or regulatory and/or central bank requirements. All payments in respect of the Covered Bonds will be made without withholding or deduction for or on account of withholding taxes imposed by the Kingdom of Norway or any political subdivision or any authority thereof or therein having power to tax unless such withholding or deduction is required by law, in which case such deduction will be made by the Issuer. If such withholdings are required by law, the Issuer will in certain circumstances pay certain additional amounts as described in, and subject to exceptions set out in, Condition 6 (Taxation). The Covered Bonds to be issued under the Programme are expected to be assigned a rating of "Aaa" by Moody's. Tranches of Covered Bonds issued under the Programme will be rated or unrated. Where a Tranche of Covered Bonds is rated, such rating will not necessarily be the same as the rating(s) described above or any rating(s) assigned to the Issuer or to Covered Bonds already issued. Where a Tranche of Covered Bonds is rated, the applicable rating(s) will be specified in the relevant Final Terms or Pricing Supplement, along with the details of the credit rating agency issuing such rating. Listing: Each Series may be admitted to listing on (i) the Official List of the Irish Stock Exchange and to trading on its Main Securities Market or (ii) the official list of the FCA and to trading on the London Stock Exchange's Regulated Market. Each Series of Exempt Covered Bonds may be admitted to listing on a market that is not a regulated market for the purposes of MiFID as agreed between the Issuer and the relevant Dealer and as specified in the relevant Pricing Supplement. - 3-

10 In addition, it is expected that an application will be made to register the Programme on the SIX Swiss Exchange Ltd. Upon specific request, Covered Bonds issued under the Programme may then be listed on the SIX Swiss Exchange Ltd. Unlisted Covered Bonds may also be issued pursuant to a Pricing Supplement. Terms and Conditions: Events of Default and Cross Default: Negative Pledge: Enforcement of Covered Bonds in Global Form: Governing Law: Selling Restrictions: The Conditions applicable to each Tranche of Covered Bonds will be as agreed between the Issuer and the relevant Dealer at or prior to the time of issuance of such Tranche, and will be specified in the relevant Final Terms or Pricing Supplement. The Conditions applicable to each Tranche of Covered Bonds will be those set out in this Base Prospectus, as completed by the relevant Final Terms or as set out in the relevant Pricing Supplement. The Covered Bonds will not provide for events of default entitling Holders to demand immediate redemption and will not provide for a cross-default provision. None. In the case of Covered Bonds in global form or in uncertificated and dematerialised book-entry form, investors' rights will be supported by a Deed of Covenant dated 17 June 2013 (as amended and/or restated and/or replaced from time to time) and by their arrangements with Euroclear and/or Clearstream, Luxembourg or any other applicable clearing system. English law, except that (i) Condition 3 (Status) of the Covered Bonds and (ii) the registration of VPS Covered Bonds in the VPS will be governed by Norwegian law. This Base Prospectus contains a summary of certain selling restrictions in the United States, the EEA, the United Kingdom, Japan, Hong Kong, Singapore, Finland, Denmark, Sweden, Republic of Italy and Norway. Each Dealer and each purchaser of Covered Bonds must observe all applicable laws and regulations in any jurisdiction in which it may offer, sell or deliver Covered Bonds or distribute this Base Prospectus or any offering material in relation to the Covered Bonds. Clearing Systems: Risk Factors: Euroclear and Clearstream, Luxembourg, VPS in respect of VPS Covered Bonds and the SIS in respect of Swiss Franc Covered Bonds and/or such other clearing system(s) as may be agreed from time to time. There are risks related to any issue of Covered Bonds under the Programme and the Issuer's ability to meet its obligations under the Covered Bonds which investors should ensure they fully understand, including: risks relating to the Issuer; risks relating to the Cover Pool; and risks relating to the Covered Bonds. These risks are set out in more detail in "Risk Factors" below. - 4-

11 RISK FACTORS An investment in the Covered Bonds involves a degree of risk. Prospective investors should carefully consider the risks set forth below and the other information contained in this Base Prospectus prior to making any investment decision with respect to the Covered Bonds. The risks described below could have a material adverse effect on the business, results of operations, financial condition or future prospects of the Issuer or the value of the Covered Bonds. Unless otherwise specified, the risk factors that apply in the context of the Issuer's ultimate parent company Nordea Bank AB (publ) ("Nordea Bank") and its subsidiaries (the "Nordea Group" or the "Group") are also applicable to the Issuer. Additional risks and uncertainties, including those of which the Issuer's management is not currently aware or deems immaterial, may also potentially have an adverse effect on the Issuer's business, results of operations, financial condition or future prospects or may result in other events that could cause investors to lose all or part of their investment. Words and expressions defined in the "Terms and Conditions of the Covered Bonds" below or elsewhere in this Base Prospectus have the same meanings in this section. The Issuer believes that the factors described below present the principal risks inherent in investing in the Covered Bonds issued under the Programme, but the inability of the Issuer to pay interest or principal on or in connection with any Covered Bonds may occur for other reasons and the Issuer does not represent that the statements below regarding the risks of holding any Covered Bonds is exhaustive. Risks Relating to the Issuer Risks Relating to Current Macroeconomic Conditions Disruptions and volatility in the global financial markets may adversely impact the Nordea Group From August 2007 through the early part of 2009, the global financial system experienced unprecedented credit and liquidity conditions and disruptions leading to a reduction in liquidity, greater volatility, general widening of spreads and, in some cases, lack of price transparency in money and capital markets interest rates. Following a period of stabilisation in 2010 and the first half of 2011, the recovery was adversely affected by turmoil and disruptions in the capital markets that were triggered by high sovereign budget deficits and rising direct and contingent sovereign debt in Greece, Ireland, Italy, Portugal and Spain. Despite rescue packages provided to certain of these countries during the past years, uncertainty over the outcome of these measures and worries about sovereign finances continued to persist, which, together with concerns about the overall stability and sustainability of the euro area, resulted in further volatility in the global credit and liquidity markets. Reflecting these concerns, Standard & Poor's, Moody's and Fitch downgraded the credit ratings of several EU countries in the beginning of 2012 and in the first half of Market concerns over the direct and indirect exposure of European banks and insurers to these countries as well as to each other also resulted in a widening of credit spreads, increased costs of funding and negative credit ratings outlook for some European financial institutions. Even though market conditions improved somewhat in the latter part of 2012, the developments in the financial markets were driven mainly by central bank initiatives and markets remained volatile with uncertainty about future macroeconomic developments. It cannot be excluded that, for example, a further deterioration of public finances of certain European countries would lead to new funding uncertainty, resulting in increased volatility, widening credit spreads and a potential tightening of liquidity conditions in the future. For example, the rescue package offered to Cyprus in March 2013 resulted in increased market volatility and speculation about the stability of the euro area. Risks related to the European economic crisis have also had, and are likely to continue to have, a negative impact on global economic activity and the financial markets. If these conditions continue to persist, or should there be any further turbulence in these or other markets, this could have a material adverse effect on the Nordea Group's ability to access capital and liquidity on financial terms acceptable to the Nordea Group. Further, any of the foregoing factors could have a material adverse effect on the Nordea Group's business, financial condition and results of operations. Negative economic developments and conditions in the markets in which the Nordea Group operates can adversely affect the Nordea Group's business and results of operations The Nordea Group's performance is significantly influenced by the general economic condition in the countries in which it operates, in particular the Nordic markets (Denmark, Finland, Norway and Sweden) and, to a lesser degree, in Poland, Russia and the Baltic countries. Following the weakened economic - 5-

12 environment and the turmoil in the global financial markets, in 2008 and 2009, which was reflected in declining economic growth, increasing rates of unemployment as well as decreasing asset values in these countries, the economic conditions in the Nordic region have, in general, developed more favourably relative to the rest of Europe, benefiting from generally sound public finances. However, there have been differences between countries within the region. For example, in 2012, Norway maintained strong growth and the Swedish economy also continued to grow, albeit at a slower pace compared to the previous few years, while Finland experienced negative growth. Denmark, which has been affected more deeply by the financial crisis and economic slowdown than the other Nordic economies, followed many euro area countries into a recession. Adverse economic developments of the kind described above have affected and may continue to affect the Nordea Group's business in a number of ways, including, among others, the income, wealth, liquidity, business and/or financial condition of the Nordea Group's customers, which, in turn, could further reduce the Nordea Group's credit quality and demand for the Nordea Group's financial products and services. As a result, any or all of the conditions described above could continue to have a material adverse effect on the Nordea Group's business, financial condition and results of operations, and measures implemented by the Nordea Group might not be satisfactory to reduce any credit, market and liquidity risks. Risks relating to Norway and the Norwegian mortgage market The demand for residential mortgage loans in Norway is dependent on market interest rates, residential property prices, employment trends, the state of the economy, taxation and other factors that have an influence on the customers' financing requirements. As a result, the Issuer's results of operation are significantly influenced by the general economic condition in the Norwegian mortgage markets. As substantially all of the Issuer's Mortgage Loans currently relate to properties located in Norway, the Issuer's performance is influenced by the level and the cyclical nature of business activity in Norway. This is in turn affected by both domestic and international economic and political events. A weakening of the economy in Norway may have an adverse effect on the Issuer's future results and its ability to perform its obligations under the Covered Bonds. Low interest rates and increased disposable income in Norway have led to continued strong growth in demand for loans, especially in the residential mortgage market. A combination of increasing household indebtedness and stable or declining housing prices in Norway could increase the financial vulnerability of some Norwegian mortgage borrowers, especially young and/or low-income borrowers. Most Norwegian customers have mortgage loans with floating interest and increases in interest rates could therefore adversely affect the liquidity situation of some borrowers. An increase in household indebtedness, a decline in house prices or an increase in interest rates could have an adverse effect on mortgage borrowers ability to meet their mortgage obligations and could adversely affect the Issuer s results of operations, financial condition and business prospects and its ability to perform its obligations under the Covered Bonds. Risks Relating to the business of the Issuer Credit risks As a mortgage credit institution, the Issuer's business risk principally pertains to credit risk. Credit risk means that a customer can t fulfil its payment obligations or that the value of granted security is lower than the outstanding debt. Given that a substantial part of the Issuer s lending is granted in exchange for security in real estate or on a certificate showing that the lessee owns a share in a housing cooperative that owns the housing structure of which the unit forms part (No: borettslagsandel) referred to as participation parts, the credit risk is also dependent on fluctuations in value in the real estate and housing markets. The business of the Issuer shows relatively low credit risks and the historic credit losses of the Issuer have been low. The low credit risk is due to the fact that the lending predominantly consists of mortgage backed housing financing with priority in the real estate or the participation parts (No:borettlagsandel). The size of historic credit losses is though not an indicator of the size of future credit losses and there is a risk that future credit losses will be higher. Market risks The Issuer lends in Norwegian kronor but borrows in multiple currencies. Almost all foreign exchange risk derived from that relationship is intended to be eliminated by using hedging instruments. The business also contains interest rate risk, primarily due to differences between the terms of the interest periods for funding and for lending. The interest rate risk is mitigated by using hedging instruments and by the Issuer aiming to match interest payments and maturity dates in the funding and lending operations. - 6-

13 The Issuer is dependent on a liquid hedging market to mitigate its foreign exchange and interest rate risks and there are no assurances that the Issuer will be successful in hedging all of its foreign exchange and interest rate risks. Reliance on derivative arrangements The Issuer may enter into derivative agreements to hedge interest rate risk, currency exchange risk or liquidity risk. If the Issuer fails to make timely payments of amounts due or certain other events occur in relation to the Issuer under a derivative contract and any applicable grace period expires, then the Issuer will default under that derivative contract. If the Issuer defaults under a derivative contract due to nonpayment or otherwise, the relevant derivative counterparty will not be obliged to make further payments under that derivative contract (unless the Issuer has satisfied in full all its payment or delivery obligations under the relevant derivative contract) and may terminate that derivative contract. If a derivative counterparty is not obliged to make payments, if it exercises any right of termination it may have under the relevant derivative contract or if it defaults in its obligations to make payments under a derivative contract, the Issuer will be exposed to changes in currency exchange rates and in the associated interest rates on the currencies, interest rates or liquidity concerns (as applicable). Unless a replacement swap is entered into, the Issuer may have insufficient funds to make payments due on the Covered Bonds. In addition, Nordea Bank Norway will be a swap counterparty under the currency swap and basis swap entered into by the Issuer on an arms-length basis. It may be difficult to enter into a similar replacement swap at similar pricing in the event that such derivative contracts terminate. An inability to replace a swap counterparty under a currency or basis swap following a default or termination by the swap counterparty may adversely affect the Issuer's ability to perform its obligations under the Covered Bonds. Termination payments for swaps If any of the interest rate, currency or other swaps are terminated, the Issuer may, as a result, be obliged to make a termination payment to the relevant swap provider. The amount of the termination payment will be based on the cost of entering into a replacement swap. There can be no assurance that the Issuer will have sufficient funds available to make a termination payment under the relevant swap. Liquidity risks The maturity profile in the Issuer s lending business is to a large extent longer term than the maturity profile within the Issuer s funding operations. The Issuer is therefore to a large extent dependent on being able to refinance matured obligations within the funding operations by obtaining new funding in the bond market. The Issuer also funds itself through revenues from its credit portfolio and finally through financing from Nordea Bank Norway. If the financial markets develop negatively (see "Risks relating to current macro-economic circumstances"), there may be a material negative impact on the Issuer s ability to obtain funding and liquidity on financially reasonable conditions. The above mentioned factors may also have a material negative impact on the Issuer s business, financial position and profitability. Operational risks The business of the Issuer is subject to operational risks, as are all banking and finance businesses. Operational risks include, among others, risks relating to deficient products and services, insufficient internal control, vague divisions of responsibilities, defective technical systems, various types of criminal attacks and insufficient preparations to mitigate disruptions. If the Issuer fails to manage its operational risks, it can t be ruled out that the profitability and financial position of the Issuer would be negatively affected. Competition The Issuer faces fierce competition within its business area, primarily from other Norwegian and Nordic covered bond issuers. Even though the Issuer currently considers itself to have a fairly strong position to face the competition, there is a risk that the Issuer s competitiveness decreases in the future which could negatively impact the Issuer s financial performance. The Issuer is dependent on Nordea Bank Norway to run its operations The Issuer s business is integrated with Nordea Bank Norway s business operations and Nordea Bank Norway s branch network throughout Norway. According to intra-group agreements between the Issuer - 7-

14 and Nordea Bank Norway, the Issuer has assigned Nordea Bank Norway to operate almost all business operations, including among other things, the lending business and the Issuer s funding. If Nordea Bank Norway would cease to provide these services or in any other way fail in its obligations towards the Issuer, there could be a negative impact on the Issuer s business, financial position and profitability as well as a consequential inability of the Issuer to fulfil its obligations towards the investors in the Covered Bonds. Mortgages in the Cover Pool are originated by Nordea Bank Norway. The mortgages that meet the Eligibility Criteria set out in a master sale agreement entered into between the Issuer and Nordea Bank Norway (the "Master Sale Agreement") may be transferred to the Issuer. The transferred mortgages may then be registered as assets in the Cover Pool. Nordea Bank Norway notifies the borrowers of the transfer to the Issuer, and will continue servicing the mortgages pursuant to a servicing agreement entered into between Nordea Bank Norway and the Issuer (the "Servicing Agreement"). The borrower will keep the same account numbers and payment arrangements with Nordea Bank Norway. The Issuer is reliant on Nordea Bank Norway, as Manager, to service all mortgages it owns. Although the servicing arrangements will contain a right on the part of the Issuer to terminate upon material breach by the Manager, default on the part of Nordea Bank Norway or other members of the Nordea Group servicing the mortgages could create operational and administrative difficulties for the Issuer and could adversely affect the Issuer's results of operations, financial condition and business prospects and its ability to perform its obligations under the Covered Bonds. The current procedure for originating mortgages may be amended in the future and mortgages may be given directly from the Issuer to the borrowers. This will, however, not reduce the risks relating to the relationship with Nordea Bank Norway. Payments from the borrowers may under such a procedure still be made to Nordea Bank Norway. Furthermore, the Issuer s accounts will be with Nordea Bank Norway. If the Issuer gives loans directly to the borrowers, Nordea Bank Norway will handle the credit process and service the loans. The Issuer has not undertaken, nor will it undertake, any investigations, searches or other actions in respect of the original underwriting and loan-level documentation of the Mortgage Loans and other assets originated by Nordea Bank Norway contained or to be contained in the Issuer's Cover Pool, but instead fully relies on the warranties of Nordea Bank Norway under the Master Sale Agreement and previous agreements in relation to the transfer of such loans. If any mortgages originated by Nordea Bank Norway do not comply with the Eligibility Criteria, then the market value of these loans may be diminished and the Issuer may have remedies against Nordea Bank Norway under the Master Sale Agreement. Change in laws and regulations The Issuer s business is subject to regulation and supervision. Future changes to Norwegian legislation, regulations and other rules as well as regulatory changes within the EU may affect the Issuer and the Issuer s business, its financial performance and the pricing of the Issuer s Covered Bonds. For the purpose of improving the stability of the financial systems, there are currently efforts within the EU to change the current capital requirement regulations for banks and other financial institutions as well as a review of the regulations regarding recovery and support measures for banks and other financial institutions. The final regulatory framework regarding capital requirements (Basel III, CRD IV and related Norwegian regulations) are not yet finalised but it can be established that the new regulations generally will require higher capital ratios (e.g. an increased proportion of core tier 1 capital) and liquidity ratios in banks and credit market companies. In Norway, the CRD IV will be implemented through the EEA-agreement. Norwegian authorities have sent out proposals for amendments of the Norwegian legislation, including new capital requirements. The proposals involve, amongst other things, that the capital requirements will be implemented prior to the application dates in CRD IV. According to a proposal from the Ministry of Finance, financial institutions shall have at least a common equity tier 1 ("CET1") capital ratio of 4.5 per cent. The current minimum capital ratio will still be 8 per cent., meaning that financial institutions must have an additional 3.5 per cent. of regulatory capital. In addition, the Ministry of Finance proposes a capital conservation buffer of 2.5 per cent. CET1 and a systemic risk buffer of 2 per cent. CET1 the first year. The sum of the proposed new minimum CET1 capital ratio and the buffer requirements as of 1 July 2013 is equal to 9 per cent. CET1, which corresponds to the FSA s current requirements for Norwegian financial institutions. - 8-

15 The proposal involves that the systemic risk buffer for all financial institution will be raised from 2 to 3 per cent. from 1 July Furthermore, systemically important financial institutions must hold an additional buffer of 1 per cent. from 1 July 2015 and 2 per cent. from 1 July The authorities have not yet decided which Norwegian Financial institutions that should be considered as systemically important. In addition to the specific capital requirements above, the Finance Department also proposes an authorisation in the new legislation to introduce regulations on a countercyclical buffer of between 0 and 2.5 per cent. CET1. The Ministry of Finance has also recently published a circular letter on the basis for calculating capital requirements for residential mortgages. The circular letter is a follow-up of the Norwegian Financial Supervisory Authority s review of different measures to increase the risk weights on residential mortgages. According to Act. No. 75 of 6 December 1996 on Guarantee Schemes for Banks and Public Administration etc. of Financial Institutions (the "Guarantee Schemes Act"), Norwegian authorities can write down the share capital and the subordinated loans of the Issuer in a situation where the share capital is lost based on a so-called audited status report. On 26 June 2009 the Norwegian Ministry of Finance gave the Banking Law Commission the mandate to propose a full review of the Guarantee Schemes Act. The Banking Law Commission has postponed this work due to the on-going work in the EU with the Deposit Guarantee Schemes Directive and the recovery and resolution framework. In June 2012, the European Commission adopted a proposal for EU regulations regarding the recovery and resolution of financial institutions. The proposal is currently being processed in the European Parliament and the European Council and an EU directive is expected to be finalised in The proposal implies that the authorities in the future will be given a right to intervene both before a problem arise as well as in an early stage once a problem arise. Within the framework of these regulations a tool may be implemented that, under certain circumstances, would give the authorities a mandate to decide that payment obligations of a financial institution under issued notes shall be bailed in or converted to equity. The Issuer can t, as per the date of this Base Prospectus, overview the potential consequences that future regulations regarding recovery and resolution may have for Covered Bonds issued by the Issuer or if covered bonds will be given a more favourable position than unsecured bonds. Legal and regulatory claims arise in the conduct of the Issuer's business In the ordinary course of its business, the Issuer is subject to regulatory oversight and liability risk. Regulations and regulatory requirements are continuously amended and new requirements are imposed on the Issuer, including, but not limited to, regulations on conduct of business, anti-money laundering, payments, consumer credits, capital requirements, reporting and corporate governance. There can be no assurances that breaches of regulations by the Issuer will not occur and, to the extent that such a breach does occur, that significant liability or penalties will not be incurred. The Issuer may be subject to claims, disputes, legal proceedings and governmental investigations in jurisdictions where it is active as part of its normal course of business. These types of claims and proceedings expose the Issuer to monetary damages, direct or indirect costs (including legal costs), direct or indirect financial loss, civil and criminal penalties, loss of licences or authorisations, or loss of reputation, as well as the potential for regulatory restrictions on its businesses, all of which could have a material adverse effect on the Issuer s business, financial condition and results of operations. Risks relating to the Cover Pool Non-compliance with rules relating to matching of assets and liabilities The Covered Bond Legislation requires the value of the assets in a cover pool to at all times exceed the value on the claims on such cover pool. Because the Covered Bond Legislation does not require that the value of such assets exceed the value of such claims by any specific amount, the assets in the Cover Pool may not be sufficient to ensure that the Issuer will have sufficient cash flow to meet its obligations under the Covered Bonds, or that such collateral will have the intended effect. The Issuer enters into derivative agreements to comply with the matching requirements of the Covered Bond Legislation and is therefore dependent on the availability of derivative counterparties with a sufficient rating and the performance of such counterparties of their obligations under the derivative contracts. Failure to maintain sufficient assets in the Cover Pool could result in the Issuer being unable to issue further Covered Bonds to refinance existing Covered Bonds. See also "Risks relating to the Issuer Liquidity risks". - 9-

16 Changes to the lending criteria of Nordea Bank Norway Each of the mortgage loans originated by Nordea Bank Norway will have been originated in accordance with its lending criteria at the time of origination. Nordea Bank Norway's lending criteria has generally considered the type of property, term of loan, age of applicant, the loan to value (the "LTV"), insurance policies, status and income of applicants and credit history and is expected to continue to do so. Nordea Bank Norway retains the right to revise its lending criteria from time to time but would only do so to the extent that such a change would be acceptable to reasonable and prudent institutional mortgage lenders in the Norwegian market and having consideration of the Norwegian FSA's guidelines. If the lending criteria of Nordea Bank Norway changes in a manner that affects the creditworthiness of the mortgage loans, that may lead to increased defaults by borrowers and may affect the realizable value of the Cover Pool, or part thereof, and the ability of the Issuer to make payments on the Covered Bonds. Bankruptcy of the Issuer In the case of bankruptcy of the Issuer, the Issuer expects that timely payments will be made on the Covered Bonds provided the Cover Pool is in compliance with the Covered Bond Legislation. There can be no assurance, however, that such timely payments will be made. In such event, the bankruptcy administrator and the creditors' committee of the Issuer may take any action considered necessary to ensure that holders of the Covered Bonds receive timely payments on the Covered Bonds, including selling assets in the Cover Pool and issuing new Covered Bonds and entering into new derivative agreements with a right of priority in respect of the assets in the Cover Pool. The bankruptcy administrator and the creditor's committee are required to notify holders of Covered Bonds and derivative counterparties of all decisions that are deemed to be of material consequence to them. If the Issuer is unable to make contractual payments due to the Covered Bondholders, the bankruptcy administrator and the creditor's committee will introduce a halt to payments. A halt to payments will be introduced even if the Cover Pool may generate sufficient cash flows to make correcting payments in the short term. Where a halt to payments is introduced, further administration of the estate will continue under the general rules of the Norwegian bankruptcy legislation. The bankruptcy administrator and the creditor's committee will inform holders of Covered Bonds and the derivative counterparties of the halt to payments and the date on which such halt to payments is to be introduced. The bankruptcy administrator and the creditor's committee will consult the holders of Covered Bonds when making material decisions about the Cover Pool. The size of all preferential claims over the Cover Pool will be calculated on the date the bankruptcy administrator and the creditor's committee introduced the halt to payments. Claims will be calculated by discounting them to present value according to the Covered Bond Legislation. To the extent that holders of Covered Bonds are not fully paid from the proceeds of the liquidation of the assets in the Cover Pool, such holders will be able to pursue their claims as unsecured creditors of the Issuer. The holders of Covered Bonds will in such case be entitled to receive payment from the proceeds of the liquidation of other assets of the Issuer not comprising the Cover Pool (to the extent there are such assets). The holders of Covered Bonds would then rank pari passu with any other mortgage covered bondholders, derivative counterparties and the other unsecured, unsubordinated creditors of the Issuer. The Cover Pool consists of limited assets The Cover Pool consists mainly of Mortgage Loans which are secured on residential property and holiday houses located in Norway and also claims which the Issuer holds, or may acquire, against providers of Covered Bond swaps and certain substitute assets. All assets in a cover pool must comply with the Covered Bond Legislation, which determines the maximum LTV of mortgages when calculating the value of such cover pool for the purposes of the Covered Bond Legislation (at the date of this Base Prospectus, the required ratio is 75 per cent. of the prudent market value of the collateral property in the case of residential mortgage loans and 60 per cent. of the prudent market value of the collateral property in the case of mortgage loans over other real estate ). It should be noted that the value of the Issuer's Cover Pool may decline in the event of a general downturn in the value of property in Norway (given that currently all the mortgaged properties in the Cover Pool are in Norway), which could adversely affect the Issuer's ability to perform its obligations under the Covered Bonds. In addition, the Covered Bondholders shall share the benefit of the statutory preference under the Covered Bond Legislation over the same Cover Pool with any other mortgage covered - 10-

17 bondholders of the Issuer and any related derivative counterparties, on a pari passu basis, which could limit the amount of assets available to satisfy the claims of Covered Bondholders. Collection of mortgage loans and default by borrowers The mortgage loans which secure the Covered Bonds will comprise loans secured on property. A borrower may default on its obligation under such mortgage loan. Defaults may occur for a variety of reasons. Defaults under mortgage loans are subject to credit, liquidity and interest rate risks and rental yield reduction (in the case of investment properties). Various factors influence mortgage delinquency rates, prepayment rates, repossession frequency and the ultimate payment of interest and principal, such as changes in the national or international economic climates, regional economic or housing conditions, changes in tax laws, interest rates, inflation, the availability of financing, yields on alternative investments, political developments and government policies. Other factors relating to borrowers' individual, personal or financial circumstances may affect the ability of the borrowers to repay the mortgage loans. Loss of earnings, illness, divorce, weakening of financial conditions or the results of business operations and other similar factors may lead to an increase in delinquencies by and bankruptcies of borrowers, and could ultimately have an adverse impact on the ability of borrowers to repay the mortgage loans. In addition, the ability of a borrower to sell a property given as security for a mortgage loan at a price sufficient to repay the amounts outstanding under that mortgage loan will depend upon a number of factors, including the availability of buyers for that property, the value of that property and property values in general at the time. Limited description of the assets in the Cover Pool Save for any Cover Pool data the Issuer makes available on its website, Covered Bondholders will not receive information in relation to the mortgage loans and other assets included in the Cover Pool. It is expected that the constitution of the Cover Pool will change from time to time due to, for example, the purchase of further mortgage loans by the Issuer from time to time. The Norwegian FSA has appointed an independent inspector (Uavhengig gransker) (the "Inspector") to monitor the Issuer's compliance with the asset coverage requirement and the register requirement of the Covered Bond Legislation on a quarterly basis, but the report of the Inspector is not publicly available. The limited information available to investors in respect of the Cover Pool may adversely impact the market value of the Covered Bonds. Overcollateralization / Ratings The Issuer's intention is to maintain a prudent market value of the Cover Pool at all times that exceeds, by a certain margin, the aggregate value of claims that may be asserted against the Issuer in relation to the Covered Bonds (taking into account the effects of derivatives contracts) ("Overcollateralization"). The ratings of the Covered Bonds (if applicable) are based on an assumption of Overcollateralization. The level of Overcollateralization that is required for maintaining the rating of the Covered Bonds (if applicable) may change from time to time. There can be no assurance that any specific rating of the Covered Bonds will remain the same until maturity. See also "Risks related to the Covered Bonds Credit rating may not reflect all risks". No precedents The Covered Bond Legislation entered into force in 2007 and, as at the date of this Base Prospectus, there are no precedents as to how the provisions will be interpreted by Norwegian courts or other judicial authorities. On 1 January 2013 some amendments were made to the Regulation of the Covered Bond Legislation regarding loans secured on holiday houses. It is uncertain how the Covered Bond Legislation will be interpreted or whether further changes or amendments will be made to it which will affect Covered Bonds issued under the Programme. Geographic concentration risks Certain geographic regions of Norway from time to time will experience weaker regional economic conditions and housing markets or be directly or indirectly affected by natural disasters. Mortgage loans in such areas will experience higher rates of loss and delinquency than mortgage loans generally. The ability of borrowers to make payments on the Mortgage Loans may also be affected by factors which do not necessarily affect property values, such as adverse economic conditions generally in particular geographic areas or industries, or affecting particular segments of the borrowing community (such as - 11-

18 borrowers relying on commission income and self-employed borrowers). Such occurrences may accordingly affect the actual rates of delinquencies, foreclosures and losses with respect to the mortgage loans in the Cover Pool. The Mortgage Loans may from time to time be concentrated in certain regions. Such concentration may present the risk considerations described above in addition to those generally present for similar securities without such concentration. Appraisals Under Nordea Bank Norway's lending criteria, appraisals or valuation of the properties securing the Mortgage Loans take one of three forms: (1) in the case of a loan to finance (rather than refinance) the acquisition of a property, the transaction sale price determines the valuation for mortgage lending purposes, (2) an independent appraisal conducted by a licensed appraiser or a licensed real estate agent or (3) a valuation from Eiendomsverdi, an automated valuation model provider which compiles information on nearly all residential property transactions in Norway. Such an automated valuation model does not consider the current state or physical condition of a property, which may in actuality, be worse than the condition assumed by such model. For the ongoing valuation of the collateral underlying the Mortgage Loans in the Cover Pool, which takes place quarterly for adjusting the value of the Cover Pool, for investor information and rating agency reporting purposes, an automated valuation model based on the Statistics Norway's House Price Index is used. In the case of those mortgage loans for which an appraisal conducted by a licensed appraiser or a licensed real estate agent was used, such appraisal reflects the individual appraiser or estate agent's judgment as to value, based on the market values of comparable homes sold within the recent past in comparable nearby locations and on the estimated replacement cost. No assurance can be given that values of the properties underlying the mortgage loans have remained or will remain at the levels which existed on the dates of appraisal (or, where applicable, on the dates of appraisal updates) of the related mortgage loans. The appraisal relates both to the land and to the structure; however, a significant portion of the appraised value of a property may be attributable to the value of the land rather than to the residence. Because of the unique locations (for example, properties in scarcely populated areas) and special features of certain properties, identifying comparable properties in nearby locations may be difficult. The appraised values of such properties will be based to a greater extent on adjustments made by the appraisers to the appraised values of reasonably similar properties rather than on objectively verifiable sales data. As a result, such appraisals could be more likely to overvalue certain properties and therefore overstate the value of the collateral underlying the Cover Pool. If the market value of the properties underlying the Mortgage Loans is less than the appraised value of these properties, this may adversely affect the ability of the Issuer to make payments on the Covered Bonds, in circumstances where the Issuer is required to obtain payment from borrowers by a foreclosure sale of the properties underlying the relevant Mortgage Loans. Audit of the Cover Pool The Issuer conducts no audit of the Cover Pool. Furthermore, none of Nordea Bank Norway, the Arranger or any Dealer has conducted any audit of the Cover Pool. However, the Norwegian FSA has appointed the Inspector to monitor the Issuer's compliance with the asset coverage requirement and the register requirement of the Covered Bond Legislation on a quarterly basis, but the report of the Inspector is not publicly available. Risks Relating to the Covered Bonds Credit Risk Investors in Covered Bonds issued by the Issuer takes a credit risk on Nordea Eiendomskreditt. The Covered Bonds are not guaranteed by Nordea Bank Norway, any other company within the Nordea Group or any other person

19 The Covered Bonds may not be a suitable investment for all investors Each potential investor of the Covered Bonds must determine the suitability of that investment in light of such investor's own circumstances. In particular, each potential investor should: (a) (b) (c) (d) (e) have sufficient knowledge and experience to make a meaningful evaluation of the relevant Covered Bonds, the merits and risks of investing in the relevant Covered Bonds and the information contained in this Base Prospectus or any applicable supplement to this Base Prospectus; have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the relevant Covered Bonds and the impact such investment will have on its overall investment portfolio; have sufficient financial resources and liquidity to bear all of the risks of an investment in the Covered Bonds, including Covered Bonds with principal or interest payable in one or more currencies, or where the currency for principal or interest payments is different from the currency in which such potential investor's financial activities are principally denominated; understand thoroughly the terms of the relevant Covered Bonds and the behaviour of any relevant financial markets; and be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks. Some Covered Bonds are complex financial instruments and such instruments may be purchased as a way to reduce risk or enhance yield with an understood, measured, appropriate addition of risk to the investor's overall portfolio. A potential investor should not invest in Covered Bonds which are complex financial instruments unless it has the expertise (either alone or with the assistance of a financial adviser) to evaluate how the Covered Bonds will perform under changing conditions, the resulting effects on the value of such Covered Bonds and the impact this investment will have on the potential investor's overall investment portfolio. Maturity risks The risk of investing in the Covered Bonds will increase with the maturity of the Covered Bonds. It is more difficult to assess the credit risk when the maturity is long. Even the market risk will increase with long maturity, as the fluctuations in price will be greater for Covered Bonds with a long maturity than for Covered Bonds with a short maturity. Because the Global Covered Bonds are held by or on behalf of clearing systems, investors will have to rely on the relevant clearing system's procedures for transfer, payment and communication with the Issuer Covered Bonds issued under the Programme may be represented by one or more Global Covered Bonds. Such Global Covered Bonds will be deposited with a common depositary, or as the case may be a common safekeeper for Euroclear and Clearstream, Luxembourg or (in the case of Swiss Franc Covered Bonds) SIS. Except in the circumstances described in the relevant Global Covered Bond, investors will not be entitled to receive definitive Covered Bonds. The relevant clearing system(s) will maintain records of the beneficial interests in the Global Covered Bonds. While the Covered Bonds are represented by one or more Global Covered Bonds, investors will be able to trade their beneficial interests only through the relevant clearing system(s). While the Covered Bonds are represented by one or more Global Covered Bonds, the Issuer will discharge its payment obligations under the Covered Bonds once the Paying Agent has paid the relevant clearing system(s) or a nominee thereof for distribution to their account holders. A holder of a beneficial interest in a Global Covered Bond must rely on the procedures of the relevant clearing system(s) to receive payments under the relevant Covered Bonds. The Issuer has no responsibility or liability for the records relating to, or payments made in respect of, beneficial interests in the Global Covered Bonds. Holders of beneficial interests in the Global Covered Bonds will not have a direct right to vote in respect of the relevant Covered Bonds. Instead, such holders will be permitted to act only to the extent that they - 13-

20 are enabled by the relevant clearing system(s) to appoint appropriate proxies. Similarly, holders of beneficial interests in the Global Covered Bonds will not have a direct right under the Global Covered Bonds to take enforcement action against the Issuer in the event of a default under the relevant Covered Bonds but will have to rely upon their rights under the Deed of Covenant. Investors in VPS Covered Bonds and Swiss Franc Covered Bonds will have to rely on the VPS's or SIS's procedures as the case may be for transfer, payment and communication with the Issuer Investors in VPS Covered Bonds and Swiss Franc Covered Bonds will have to rely on the relevant clearing system's procedures for transfer, payment and communication with the Issuer. VPS Covered Bonds issued under the Programme will not be evidenced by any physical note or document of title other than statements of account made by the VPS. Ownership of VPS Covered Bonds will be recorded and transfer effected only through the book-entry system and register maintained by the VPS. The Covered Bonds may not be freely transferred The Issuer has not registered, and will not register, the Covered Bonds under the Securities Act or any other securities laws. Accordingly, the Covered Bonds are subject to certain restrictions on resale and other transfer thereof as set forth in the section entitled "Subscription and Sale." As a result of these restrictions, the Issuer cannot be certain of the existence of a secondary market for the Covered Bonds or the liquidity of such a market if one develops. Consequently, a Holder of Covered Bonds and an owner of beneficial interests in those Covered Bonds must be able to bear the economic risk of their investment in the Covered Bonds for the terms of the Covered Bonds. Secondary market and liquidity The Covered Bonds issued under the Programme will be new securities which may not be widely distributed and for which there is currently no active trading market. If a market does develop, it may not be very liquid. If the Covered Bonds are traded after their initial issuance, they may trade at a discount to their initial offering price, depending upon prevailing interest rates, the market for similar securities, general economic conditions and the financial condition of the Issuer. Although applications have been made for Covered Bonds issued under the Programme to be admitted to (i) listing on the Official List of the Irish Stock Exchange and to trading on its Main Securities Market, (ii) listing on the official list of the FCA and to trading on the London Stock Exchange's Regulated Market and it is expected that an application will be made for the registration of the Programme on the SIX Swiss Exchange, there is no assurance that such applications will be accepted, that any particular Tranche of Covered Bonds will be so admitted or that an active trading market will develop. Accordingly, there can be no assurances as to the development or liquidity of any trading market for any particular issuance or Tranche of Covered Bonds. The Issuer may enter into market maker agreements with the Dealers, pursuant to which the Dealers shall, subject to the conditions of such agreements, make specific efforts with regard to establishing and developing a secondary market for Covered Bonds that are given status as benchmark bonds ("Benchmark Covered Bonds"). The Issuer may also buy back outstanding Covered Bonds with the objective of managing liquidity, supporting Dealers, supporting its spread, supporting the general perception of the secondary market or for any other reason. The Issuer s acquisition of outstanding Covered Bonds may be done at different prices than that which might otherwise prevail in the market. There can be no assurance that a secondary market for the Benchmark Covered Bonds will develop. Therefore, investors may not be able to sell their Covered Bonds easily or at prices that will provide them with a yield comparable to similar investments that have a developed a secondary market. Illiquidity may have a severely adverse effect on the market value of the Covered Bonds. Holders of Covered Bonds should be aware that, in view of the prevailing and widely reported global credit market conditions (which, to a certain extent, continue at the date hereof), the secondary market for the Covered Bonds of this kind may be illiquid. The Issuer cannot predict when these circumstances will change. In 2008 the Norwegian parliament authorised the Ministry of Finance to exchange government securities for covered bonds for an agreed period. This so-called swap arrangement was a measure to provide liquidity to Norwegian financial institutions following the credit crisis. Nordea Bank Norway has - 14-

21 participated in the arrangement using covered bonds issued by the Issuer. These covered bonds were not issued under this Programme. Due to the stabilization of the credit markets, it was decided by the Ministry of Finance in December 2009 that auctions using the aforementioned arrangement would be suspended until further notice. The total allotted volume of government securities in such auctions up to such point were approximately NOK 229 billion. The maturity of the swap agreements are up to five years, but the Ministry of Finance has offered an early redemption option in connection with such swap agreements. The volume of covered bonds issued by the Issuer and other Norwegian mortgage credit institutions in connection with the swap arrangement is substantial and this debt will have to be refinanced over the coming years. The increased offering of covered bonds resulting from such a phenomenon may have an adverse effect on the market value of Covered Bonds issued under the Programme. No market for collateral in Norway after an insolvency of the Issuer There is no assurance as to whether there will be a trading market for the collateral in the Cover Pool in Norway after an insolvency of the Issuer. No Events of Default The terms and conditions of the Covered Bonds do not include any events of default relating to the Issuer, and therefore the terms and conditions of the Covered Bonds do not entitle holders of Covered Bonds to accelerate the Covered Bonds. The Covered Bonds may be redeemed prior to the maturity In the event that the Issuer would be obliged to increase the amounts payable in respect of any Covered Bonds due to any withholding or deduction for or on account of, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the Kingdom of Norway or any political subdivision thereof or any authority therein or thereof having power to tax, the Issuer may redeem all outstanding Covered Bonds in accordance with the Conditions. In addition, if in the case of any particular Tranche of Covered Bonds the relevant Final Terms or Pricing Supplement specifies that the Covered Bonds are redeemable at the Issuer's option, the Issuer may choose to redeem the Covered Bonds at times when its cost of borrowing is lower than the interest rate on the Covered Bonds. In such circumstances, an investor may not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as that of the Covered Bonds being redeemed. Potential investors should also consider reinvestment risk in light of other investments available at that time. An optional redemption feature is likely to limit the market value of the Covered Bonds. During any period when the Issuer may elect to redeem Covered Bonds, the market value of such Covered Bonds generally will not rise substantially above and may in fact decrease below the price at which they can be redeemed. This also may be true prior to any redemption period. Covered Bonds with Extended Maturity Date The applicable Final Terms or Pricing Supplement may provide that an Extended Maturity Date will apply to the relevant Series of Covered Bonds. If an Extended Maturity Date is specified as applicable in the Final Terms or Pricing Supplement and the Issuer fails to redeem all of those Covered Bonds on the Maturity Date or within two Business Days thereafter, the maturity of the Covered Bonds and the date on which such Covered Bonds will be due and payable will be automatically extended up to but no later than the Extended Maturity Date, subject as otherwise provided for in the applicable Final Terms or Pricing Supplement. In that event, the Issuer may redeem all or any of part of the principal amount outstanding on the Covered Bonds on an Interest Payment Date falling in any month after the Maturity Date up to and including the Extended Maturity Date or as otherwise provided in the applicable Final Terms or Pricing Supplement. In the event of such an extension of the maturity of the Covered Bonds, interest rates, interest periods and interest payment dates on the Covered Bonds from (and including) the Maturity Date to (but excluding) the Extended Maturity Date shall be determined and made in accordance with the applicable Final Terms or Pricing Supplement

22 The extension of the maturity of the principal amount outstanding in the Covered Bonds from the Maturity Date to the Extended Maturity Date shall not constitute an event of default for any purpose or give any holders of Covered Bonds any right to receive payment of interest, principal or otherwise on the relevant Covered Bonds other than as expressly set out in the Conditions, and in the case of Exempt Covered Bonds only, as amended by the applicable Pricing Supplement. Therefore, investors investing in Covered Bonds with an Extended Maturity Date should be aware of the possibility that their Covered Bonds will not be paid on the Maturity Date and that the interest basis, interest rates and interest periods for the period from the Maturity Date to the Extended Maturity Date may be different to those applicable for the period from the Issue Date to the Maturity Date, as specified in the relevant Final Terms or Pricing Supplement. Covered Bonds issued at a substantial discount or premium The market values of securities issued at a substantial discount or premium to their nominal amount tend to fluctuate more in relation to general changes in interest rates than do prices for conventional interestbearing securities. Generally, the longer the remaining term of the securities, the greater the price volatility as compared to conventional interest-bearing securities with comparable maturities. Exchange rate risks and exchange controls The Issuer will pay principal and interest on the Covered Bonds in the Specified Currency provided in the Final Terms or Pricing Supplement. This presents certain risks relating to currency conversions if an investor's financial activities are denominated principally in a currency or currency unit (the "Investor's Currency") other than the Specified Currency. These include the risk that exchange rates may significantly change (including changes due to devaluation of the Specified Currency or revaluation of the Investor's Currency) and the risk that authorities with jurisdiction over the Investor's Currency may impose or modify exchange controls. An appreciation in the value of the Investor's Currency relative to the Specified Currency would decrease (i) the Investor's Currency-equivalent yield on the Covered Bonds, (ii) the Investor's Currency equivalent value of the principal payable on the Covered Bonds and (iii) the Investor's Currency equivalent market value of the Covered Bonds. Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate. As a result, investors may receive less interest or principal than expected, or no interest or principal. Meetings of Holders The Terms and Conditions of the Covered Bonds and the Fiscal Agency Agreement contain provisions for calling meetings of Holders of Covered Bonds to consider matters affecting their interests on a series by series basis. These provisions permit defined majorities to bind all holders of the relevant series including such holders who did not attend and vote at the relevant meeting and holders of the relevant series who voted in a manner contrary to the majority. The Terms and Conditions of the Covered Bonds may be changed The Terms and Conditions applicable to each Series will be as agreed between the Issuer and the relevant Dealer at or prior to the time of issuance of such Series. The terms and conditions applicable to each Series will therefore be those set out below, subject to being completed by the relevant Final Terms or (in the case of Exempt Covered Bonds only) being completed, amended and/or replaced by the relevant Pricing Supplement. The Fiscal Agency Agreement contains provisions, which are binding on the Issuer and the Holders of Covered Bonds, for convening meetings of the Holders of Covered Bonds of any Series to consider matters affecting their interests, including the modification or waiver of the terms and conditions applicable to any Series of Covered Bonds. The Issuer has the right to correct manifest errors in the terms and conditions without the Covered Bondholders' consent

23 Conflicting interests of other creditors The claims of the holders of Covered Bonds and derivative counterparties included in the Cover Pool rank pari passu with the claims of all other creditors of the Issuer (other than those preferred by law), but have a preferential right against the Cover Pool save for costs incurred in connection with the operation, management, collection and realization of the Cover Pool which shall be covered before the claims of the holders of Covered Bonds and claims relating to the fees and the expenses of a bankruptcy estate, which pursuant to Act no. 2 of 8 February 1980 on Liens are secured by a first priority lien over all of the bankruptcy estate's assets. The bankruptcy estate's lien will be limited to 700 times the standard Norwegian court fee (which at present is approximately NOK 602,000) in respect of the Cover Pool. In addition, the Covered Bondholders' preferential rights against the Cover Pool rank pari passu with the rights of any other mortgage covered bondholders of the Issuer and any related derivative counterparties. To the extent that holders of Covered Bonds are not fully paid from the proceeds of the liquidation of the assets comprising the Cover Pool, they will be able to apply for the balance of their claims as unsecured creditors of the Issuer and will be entitled to receive payment from the proceeds of the liquidation of the other assets of the Issuer not comprising the Cover Pool. The holders of Covered Bonds would then rank pari passu with any other mortgage covered bondholders, derivative counterparties and the other unsecured, unsubordinated creditors of the Issuer and, as a result, may not receive all amounts owed by the Issuer to them. Minimum Specified Denomination and higher integral multiples In relation to any issue of Covered Bonds which have a denomination consisting of a minimum Specified Denomination (as defined in the Final Terms or Pricing Supplement) plus a higher integral multiple of another smaller amount, it is possible that the Covered Bonds may be traded in amounts in excess of the minimum Specified Denomination that are not integral multiples of the minimum Specified Denomination. In such a case a Holder who, as a result of trading such amounts, holds a principal amount of less than the minimum Specified Denomination may not receive a definitive Covered Bond in respect of such holding (should definitive Covered Bonds be printed) and would need to purchase a principal amount of Covered Bonds such that its holding amounts to the minimum Specified Denomination. Changes in the law and regulations No assurance can be given as to the impact of any possible judicial decision or change to English law and/or Norwegian law or administrative practice after the date of this Base Prospectus. Change in tax status or taxation legislation or practice Any change in the Issuer's tax status or in the taxation legislation or practice in a relevant jurisdiction could adversely impact (i) the ability of the Issuer to service the Covered Bonds and (ii) the market value of the Covered Bonds. Credit Ratings May Not Reflect All Risks The Issuer's credit ratings do not always mirror the risk related to individual Covered Bonds under the Programme. Tranches of Covered Bonds to be issued under the Programme may be rated or unrated. Where a Tranche of Covered Bonds is rated, the applicable rating(s) will be specified in the relevant Final Terms or Pricing Supplement. Such rating will not necessarily be the same as any rating(s) assigned to the Issuer or to Covered Bonds already issued. There are no guarantees that such ratings will be assigned or maintained. Any credit rating agency may lower its ratings or withdraw the rating if, in the sole judgement of the credit rating agency, the credit quality of the Covered Bonds has declined or is in question. In addition, at any time a credit rating agency may revise its relevant rating methodology with the result that, among other things, any rating assigned to the Covered Bonds may be lowered. If any of the ratings assigned to the Covered Bonds is lowered or withdrawn, the market value of the Covered Bonds may be reduced. Furthermore, the ratings may not reflect the potential impact of all risks related to structure, market, additional factors discussed above, and other factors that may affect the value of the Covered Bonds. Accordingly, a credit rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating agency at any time. One or more independent credit rating agencies may also assign credit ratings to the Covered Bonds, which may not necessarily be the same ratings as any Issuer rating described in this Base Prospectus or - 17-

24 any rating(s) assigned to Covered Bonds already issued. Such ratings may not reflect the potential impact of all risks related to structure, market, additional factors discussed above, and other factors that may affect the value of the Covered Bonds. A security rating is not a recommendation to buy, sell or hold securities or to keep the investment and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency. In addition, real or anticipated changes in the Issuer's credit ratings generally will affect the market value of the Covered Bonds. Legal investment considerations may restrict certain investments The investments activities of certain investors are restricted by legal investments laws and regulations, or subject to review or regulation of certain authorities. Each potential investor should consult its legal advisers to determine whether and to what extent restrictions apply to its purchase or pledge of any Covered Bonds. Financial institutions should consult their legal advisers or the appropriate regulators to determine the appropriate treatment of Covered Bonds under any applicable risk-based capital or similar rules. Until fully implemented, the Issuer cannot predict the precise effects of the changes that result from the implementation of Basel III/CRD IV in terms of the impact on the pricing of the Covered Bonds issued under the Programme. Prospective investors in the Covered Bonds should consult their own advisers as to the consequences of the implementation of Basel III /CRD IV. Payments in respect of the Covered Bonds may in certain circumstances be made subject to withholding or deduction of tax All payments in respect of Covered Bonds will be made free and clear of withholding or deduction of Norwegian taxation, unless the withholding or deduction is required by law. In that event, the Issuer will pay such additional amounts as will result in the Bondholders receiving such amounts as they would have received in respect of such Covered Bonds had no such withholding or deduction been required. The Issuer's obligation to gross up is, however, subject to a number of exceptions, including withholding or deduction of withholding tax operated in certain EU Member States pursuant to the EU Savings Tax Directive and similar measures agreed with the EU by certain non EU countries and territories. In addition, the Issuer will, in such event, have the option (but not the obligation) of redeeming all outstanding Covered Bonds in full (see Condition 5(b) (Redemption and Purchase Early Redemption for Taxation Reasons). See "Taxation" below. EU Savings Directive Under the EU Savings Directive, each Member State is required to provide to the tax authorities of another Member State details of payments of interest or other similar income paid by a person within its jurisdiction to, or collected by such a person for, an individual resident or certain limited types of entity established in that other Member State; however, for a transitional period, Austria and Luxembourg may instead apply a withholding system in relation to such payments, deducting tax at a rate of 35 per cent. The transitional period is to terminate at the end of the first full fiscal year following agreement by certain non-eu countries to the exchange of information relating to such payments. A number of non-eu countries, and certain dependent or associated territories of certain Member States, have adopted similar measures (either provision of information or transitional withholding) in relation to payments made by a person within its jurisdiction to, or collected by such a person for, an individual resident or certain limited types of entity established in a Member State (as defined in Article 4-2 of the EU Savings Directive). In addition, the Member States have entered into provision of information or transitional withholding arrangements with certain of those dependent or associated territories in relation to payments made by a person in a Member State to, or collected by such a person for, an individual resident or certain limited types of entity established in one of those territories. The European Commission has proposed certain amendments to the EU Savings Directive which may, if implemented, amend or broaden the scope of the requirements described above. If a payment were to be made or collected through a Member State which has opted for a withholding system and an amount of, or in respect of, tax were to be withheld from that payment, neither the Issuer nor any Paying Agent nor any other person would be obliged to pay additional amounts with respect to any Covered Bond as a result of the imposition of such withholding tax. The Issuer is required to maintain a Paying Agent in a Member State that is not obliged to withhold or deduct tax pursuant to the Directive. Investors who are in any doubt as to their position should consult their professional advisers

25 In April 2013, the Luxembourg Government announced its intention to abolish the withholding system with effect from 1 January 2015 in favour of automatic information exchange under the EU Savings Directive. Payments under the Covered Bonds may be subject to withholding tax pursuant to the U.S. Foreign Account Tax Compliance Act The United States passed legislation (commonly referred to as "FATCA") which will impose new information reporting requirements with respect to certain holders of "financial accounts," as defined in the FATCA rules. If these reporting rules are not satisfied, withholding may be imposed under FATCA on payments with respect to securities of what FATCA refers to as foreign financial institutions ("FFIs"). The Kingdom of Norway and the United States have entered into an intergovernmental agreement regarding the implementation of FATCA (the "IGA"). Under the IGA, the Issuer does not expect to be an FFI and even if it were treated as an FFI, it does not expect that FATCA would apply to payments made with respect to the Covered Bonds. However, there are significant aspects of how FATCA will be implemented that are not currently clear, and no assurance can be given that withholding may not be imposed under FATCA on certain payments with respect to the Covered Bonds if the information reporting requirements cannot be complied with. Even if FATCA withholding might apply to certain payments made with respect to the Covered Bonds, it would not apply to payments made with respect to Covered Bonds issued before 1 January 2014 or, if later, the date that is six months after the IRS publishes final regulations that would explain certain aspects of how FATCA might apply to securities like the Covered Bonds. If FATCA withholding were imposed on a payment made with respect to a Covered Bond, the Issuer would have no obligation to pay additional amounts or otherwise indemnify a holder for any such withholding or deduction. FATCA is complex, and prospective investors are urged to consult their own advisors about the possible application of FATCA in their particular situations. Whilst the Covered Bonds are in global form and held within Euroclear and Clearstream, Luxembourg (together, the "ICSDs"), in all but the most remote circumstances, it is not expected that FATCA will affect the amount of any payment received by the ICSDs. However, FATCA may affect payments made to custodians or intermediaries in the subsequent payment chain leading to the ultimate investor if any such custodian or intermediary generally is unable to receive payments free of FATCA withholding. It also may affect payment to any ultimate investor that is a financial institution that is not entitled to receive payments free of withholding under FATCA, or an ultimate investor that fails to provide its broker (or other custodian or intermediary from which it receives payment) with any information, forms, other documentation or consents that may be necessary for the payments to be made free of FATCA withholding. Investors should choose the custodians or intermediaries with care (to ensure each is compliant with FATCA or other laws or agreements related to FATCA), provide each custodian or intermediary with any information, forms, other documentation or consents that may be necessary for such custodian or intermediary to make a payment free of FATCA withholding. Investors should consult their own tax adviser to obtain a more detailed explanation of FATCA and how FATCA may affect them. The Issuer s obligations under the Covered Bonds are discharged once the Paying Agent has paid the ICSDs (as bearer/registered holder of the Covered Bonds) and the Issuer has therefore no responsibility for any amount thereafter transmitted through hands of the ICSDs and custodians or intermediaries

26 FORM OF THE COVERED BONDS Covered Bonds may be issued (i) in the case of Covered Bonds other than VPS Covered Bonds, in bearer form or in registered form or (ii) in the case of VPS Covered Bonds, in uncertificated and dematerialised book-entry form cleared through VPS as specified in the relevant Final Terms or Pricing Supplement. Covered Bonds in bearer form will not be exchangeable for Covered Bonds in registered form and Covered Bonds in registered form will not be exchangeable for Covered Bonds in bearer form. Form of Bearer Covered Bonds Covered Bonds of each Tranche of each Series that are Bearer Covered Bonds (comprising a "Bearer Series") (except for Swiss Franc Covered Bonds) will initially be represented by a temporary global covered bond in bearer form (each a "Temporary Global Covered Bond"), without interest coupons ("Coupons") or talons for further Coupons ("Talons"). Covered Bonds may be issued in Classic Global Covered Bond ("Classic Global Covered Bond" or "CGCB") or New Global Covered Bond ("New Global Covered Bond" or "NGCB") form, as specified in the relevant Final Terms or Pricing Supplement. Each Temporary Global Covered Bond which is not intended to be issued in a new global covered bond form, as specified in the relevant Final Terms or Pricing Supplement, will be deposited with a common depositary on behalf of Clearstream Banking, société anonyme ("Clearstream, Luxembourg") and Euroclear Bank SA/NV ("Euroclear") on the relevant Issue Date. Each Temporary Global Covered Bond which is intended to be issued in New Global Covered Bond form, as specified in the relevant Final Terms or Pricing Supplement, will be deposited with a common safekeeper for Euroclear and/or Clearstream, Luxembourg on the relevant Issue Date. The NGCB form has been introduced to allow for the possibility of Covered Bonds being issued and held in a manner which will permit them to be recognised as eligible collateral for monetary policy of the central banking system for the euro (the "Eurosystem") and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life. However in any particular case such recognition will depend upon satisfaction of the Eurosystem eligibility criteria at the relevant time. Interests in a Temporary Global Covered Bond will be exchangeable for interests in a permanent global covered bond in bearer form (each, a "Permanent Global Covered Bond"), without Coupons or Talons, on or after the date 40 days after the later of the relevant Issue Date and the completion of distribution of all Covered Bonds of a Tranche of a Bearer Series (the "Exchange Date"), upon certification as to non- U.S. beneficial ownership. Each Permanent Global Covered Bond which is not intended to be issued in NGCB form, as specified in the relevant Final Terms or Pricing Supplement, will be deposited with a common depositary on behalf of Clearstream, Luxembourg and Euroclear or any other relevant clearing system(s) on the relevant Exchange Date. Each Permanent Global Covered Bond which is intended to be issued in NGCB form, as specified in the relevant Final Terms or Pricing Supplement, will be deposited with a common safekeeper for Euroclear and/or Clearstream, Luxembourg on the relevant Exchange Date. The Permanent Global Covered Bond will be exchangeable in whole (but not in part) for definitive Bearer Covered Bonds in the limited circumstances more fully described herein. In the case of Bearer Covered Bonds (or any Tranche thereof) having a maturity of more than 1 year from the Issue Date, the Permanent Global Covered Bond, the definitive Bearer Covered Bonds and any Coupons and Talons appertaining thereto will bear a legend to the following effect: "Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code." The sections referred to in such legend provide that a United States person who holds a Bearer Covered Bond, Coupon or Talon will generally not be allowed to deduct any loss realised on the sale, exchange or exercise or redemption of such Bearer Covered Bond, Coupon or Talon and any gain (which might otherwise be characterised as capital gain) recognised on such sale, exchange or exercise or redemption will be treated as ordinary income. If any interest payment on the Covered Bonds of a particular Series falls due whilst any of the Covered Bonds of that Series are represented by a Temporary Global Covered Bond, the related interest payment will be made on such Temporary Global Covered Bond only to the extent that certification as to non-us beneficial ownership has been received by Euroclear or Clearstream, Luxembourg or any other relevant - 20-

27 clearing system(s) in accordance with the terms of such Temporary Global Covered Bond. Payments of amounts due in respect of a Permanent Global Covered Bond will be made through Euroclear or Clearstream, Luxembourg or any other relevant clearing system(s) without any requirement for certification. The applicable Final Terms or Pricing Supplement will specify that a Permanent Global Covered Bond will be exchangeable, in whole but not in part, for definitive Bearer Covered Bonds ("Definitive Bearer Covered Bonds") upon (i) the expiry of such period of notice as may be specified in the relevant Final Terms or Pricing Supplement; (ii) at any time, if so specified in the relevant Final Terms or Pricing Supplement; or (iii) if the relevant Final Terms or Pricing Supplement specifies "in the limited circumstances specified in the Permanent Global Covered Bond", then only upon the occurrence of an Exchange Event. Covered Bonds for which the applicable Final Terms or Pricing Supplement permit trading in the Clearing Systems in Tradable Amounts which are not a Specified Denomination will only be exchangeable for Definitive Bearer Covered Bonds upon an Exchange Event. For these purposes, "Exchange Event" means that the Issuer has been notified that both Euroclear and Clearstream, Luxembourg have been closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or have announced an intention permanently to cease business or have in fact done so and no successor clearing system satisfactory to the Fiscal Agent is available. The Issuer will promptly give notice to Covered Bondholders in accordance with Condition 12 of the "Terms and Conditions of the Covered Bonds" if an Exchange Event occurs. In the event of the occurrence of an Exchange Event, Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of an interest in such Permanent Global Covered Bond) may give notice to the Fiscal Agent requesting exchange. Any such exchange shall occur not later than 45 days after the date of receipt of the first relevant notice by the Fiscal Agent. Definitive Bearer Covered Bonds will, if interest bearing, have Coupons attached and, if appropriate, a Talon for further Coupons. Form of Registered Covered Bonds Each Tranche of Registered Covered Bonds will be in registered form represented by either individual Registered Covered Bond certificates in registered form ("Individual Covered Bond Certificates") or a global Covered Bond in registered form (a "Global Registered Covered Bond"), as specified in the relevant Final Terms or Pricing Supplement. Each Registered Covered Bond represented by a Global Registered Covered Bond will either be: (a) in the case of a Global Registered Covered Bond which is not to be held under the new safekeeping structure ("New Safekeeping Structure" or "NSS"), registered in the name of a common depositary (or its nominee) for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system and the relevant Global Registered Covered Bond will be deposited on or about the issue date with the common depositary; or (b) in the case of a Global Registered Covered Bond to be held under the New Safekeeping Structure, be registered in the name of a common safekeeper (or its nominee) for Euroclear and/or Clearstream, Luxembourg and the relevant Global Registered Covered Bond will be deposited on or about the issue date with the common safekeeper for Euroclear and/or Clearstream, Luxembourg. The NSS form has been introduced to allow for the possibility of Covered Bonds being issued and held in a manner which will permit them to be recognised as eligible collateral for monetary policy of the central banking system for the euro (the "Eurosystem") and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life. However in any particular case such recognition will depend upon satisfaction of the Eurosystem eligibility criteria at the relevant time. If the relevant Final Terms or Pricing Supplement specifies the form of Covered Bonds as being "Individual Covered Bond Certificates", then the Covered Bonds will at all times be in the form of Individual Covered Bond Certificates issued to each Covered Bondholder in respect of their respective holdings. If the relevant Final Terms or Pricing Supplement specifies the form of Covered Bonds as being "Global Registered Covered Bond exchangeable for Individual Covered Bond Certificates", then the Covered Bonds will initially be in the form of a Global Registered Covered Bond which will be exchangeable in whole, but not in part, for Individual Covered Bond Certificates upon (i) the expiry of such period of notice as may be specified in the relevant Final Terms or Pricing Supplement; (ii) at any time, if so specified in the relevant Final Terms or Pricing Supplement; or (iii) if the relevant Final Terms or Pricing Supplement specifies "in the limited circumstances specified in the Global Registered Covered Bond", then only upon the occurrence of an Exchange Event

28 The Issuer will promptly give notice to Covered Bondholders in accordance with Condition 12 of the "Terms and Conditions of the Covered Bonds" if an Exchange Event occurs. In the event of the occurrence of an Exchange Event, Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of an interest in such Global Registered Covered Bond) may give notice to the Fiscal Agent requesting exchange. Any such exchange shall occur not later than 45 days after the date of receipt of the first relevant notice by the Fiscal Agent. Form of VPS Covered Bonds Each Tranche of VPS Covered Bonds will be issued in uncertificated and dematerialised book entry form cleared through the VPS. Legal title to the VPS Covered Bonds will be evidenced by book entries in the records of the VPS. Issues of VPS Covered Bonds will be issued with the benefit of the Fiscal Agency Agreement. On the issue of VPS Covered Bonds, the Issuer will send a copy of the applicable Final Terms or Pricing Supplement to the Paying Agent, with copies sent to the VPS Paying Agent and the Fiscal Agent. The VPS Paying Agent will issue the total amount of the VPS Covered Bonds to the relevant Dealer through its VPS broker account. The nominal amount of the VPS Covered Bonds will then be distributed to each investor's VPS account by the relevant Dealer on the issue date of such Covered Bonds using the relevant trading system, for which it has subscribed and paid. Settlement of sale and purchase transactions in respect of the VPS Covered Bonds in the VPS will take place in accordance with market practice at the time of the transaction. Transfers of interests in the relevant VPS Covered Bonds will take place in accordance with the rules and procedures for the time being of the VPS. Title to the VPS Covered Bonds will pass by registration in the registers between the direct or indirect accountholders at the VPS in accordance with the rules and procedures of the VPS. The holder of a VPS Covered Bond will be the person evidenced as such by a book entry in the records of the VPS. The person evidenced (including any nominee) as a holder of the VPS Covered Bonds shall be treated as the holder of such VPS Covered Bonds for the purposes of payment of principal or interest on such VPS Covered Bonds. Form of Swiss Franc Covered Bonds Each Tranche of Swiss Franc Covered Bonds will be denominated in Swiss francs, issued in bearer form and will be represented exclusively by a Permanent Global Covered Bond which shall be deposited by the Swiss Paying Agent with SIS, or such other depositary as may be approved by the SIX Regulatory Board of the SIX Swiss Exchange (SIS or any such intermediary an "Intermediary"). Once the Permanent Global Covered Bond is deposited with the Intermediary and entered into the accounts of one or more participants of the Intermediary, the Covered Bonds will constitute intermediated securities (Bucheffekten) ("Intermediated Securities") in accordance with the provisions of the Swiss Federal Intermediated Securities Act (Bucheffektengesetz). Each Holder (as defined below) shall have a quotal co-ownership interest (Miteigentumsanteil) in the Permanent Global Covered Bond to the extent of his claim against the Issuer, provided that for so long as the Permanent Global Covered Bond remains deposited with the Intermediary the co-ownership interest shall be suspended and the Covered Bonds may only be transferred or otherwise disposed of in accordance with the provisions of the Swiss Federal Intermediated Securities Act (Bucheffektengesetz), i.e., by the entry of the transferred Covered Bonds in a securities account of the transferee. The records of the Intermediary will determine the number of Swiss Franc Covered Bonds held through each participant in that Intermediary. In respect of the Covered Bonds held in the form of Intermediated Securities, the holders of the Covered Bonds (the "Holders") will be the persons holding the Covered Bonds in a securities account (Effektenkonto) which is in their own name, or in the case of intermediaries (Verwahrungsstellen), the intermediaries (Verwahrungsstellen) holding the Covered Bonds for their own account in a securities account (Effektenkonto) which is in their name. Neither the Issuer nor the Holders shall at any time have the right to effect or demand the conversion of the Permanent Global Covered Bond (Globalurkunde) into, or the delivery of, uncertificated securities (Wertrechte) or Definitive Covered Bonds (Wertpapiere). No physical delivery of the Covered Bonds shall be made unless and until Definitive Covered Bonds (Wertpapiere) are printed. Definitive Covered Bonds may only be printed, in whole, but not in part, if the Swiss Paying Agent determines, in its sole discretion, that the printing of the Definitive Covered Bonds - 22-

29 (Wertpapiere) is necessary or useful or if, under Swiss or any other applicable laws and regulations the enforcement of obligations under the Swiss Franc Covered Bonds can only be ensured by means of presentation of Definitive Covered Bonds (Wertpapiere). Should the Swiss Paying Agent so determine, it shall provide for the printing of definitive Covered Bonds (Wertpapiere) without cost to the Holders. Upon delivery of the Definitive Covered Bonds (Wertpapiere), the Permanent Global Covered Bond will be cancelled and the Definitive Covered Bonds (Wertpapiere) shall be delivered to the Holders against cancellation of the relevant Swiss Franc Covered Bonds in the Holders' securities accounts

30 SUMMARY OF PROVISIONS RELATING TO THE COVERED BONDS WHILE IN GLOBAL FORM Each Temporary Global Covered Bond, Permanent Global Covered Bond (except in relation to Swiss Franc Covered Bonds) and Global Registered Covered Bond each a "Global Covered Bond" contains provisions which apply to the Covered Bonds while they are in global form, some of which modify the effect of the terms and conditions of the Covered Bonds set out herein. Set out in this section is a summary of certain of those provisions. Payments in respect of Bearer Covered Bonds Payments of principal, interest and any additional amounts pursuant to Condition 7 (Payments) of the Covered Bonds, if any, in respect of the Bearer Covered Bonds when represented by a Temporary Global Covered Bond or a Permanent Global Covered Bond which is not intended to be issued in NGCB form will be made against presentation and surrender or, as the case may be, presentation of the relevant Temporary Global Covered Bond or Permanent Global Covered Bond to or to the order of any of the Paying Agents. In respect of Covered Bonds in CGCB form, a record of each payment so made will be endorsed on the relevant schedule to the Temporary Global Covered Bond or Permanent Global Covered Bond by or on behalf of the Fiscal Agent, which endorsement will be prima facie evidence that such payment has been made. In respect of Covered Bonds in NGCB form, the Fiscal Agent will arrange for a record of each payment so made to be entered pro rata in the records of Euroclear and Clearstream, Luxembourg. Payments in respect of Registered Covered Bonds Payments of principal, interest and any additional amounts pursuant to Condition 7 (Payments) of the Covered Bonds, if any, in respect of the Registered Covered Bonds when represented by a Global Registered Covered Bond will be made against presentation and surrender of the relevant Global Registered Covered Bond at the specified office of the Registrar. Notices So long as the Covered Bonds of any Series are represented by a Global Covered Bond, notices to holders of Covered Bonds may be given by delivery of the relevant notice to Euroclear, Clearstream, Luxembourg or any other relevant clearing system(s) for communication by them to entitled account holders in substitution for publication as required by the Conditions provided that, in the case of Covered Bonds listed with any listing authority(ies) or any stock exchange, the requirements (if any) of such listing authority(ies) or stock exchange(s) have been complied with. Meetings The holder of a Temporary Global Covered Bond, Permanent Global Covered Bond or Global Registered Covered Bond as the case may be, will be treated as being two persons for the purposes of any quorum requirements of a meeting of holders of Covered Bonds. Cancellation Cancellation of any Covered Bond surrendered for cancellation following its redemption will be effected by reduction in the principal amount of the relevant Temporary Global Covered Bond, Permanent Global Covered Bond or Global Registered Covered Bond as the case may be. Issuer's Option No drawing of Covered Bonds will be required under Condition 5(c) (Optional Early Redemption (Call)) in the event that the Issuer exercises any option relating to those Covered Bonds while all such Covered Bonds which are outstanding are represented by a Temporary Global Covered Bond, Permanent Global Covered Bond or Global Registered Covered Bond, as the case may be. In such event standard procedures of Euroclear, Clearstream, Luxembourg (to be reflected in the records of Euroclear and Clearstream, Luxembourg as either a pool factor or a reduction in nominal amount, at their discretion) or, as the case may be, such other relevant clearing system(s) shall operate to determine which interests in such Global Covered Bonds, are to be subject to such option

31 Holder's Option For so long as the Covered Bonds of any Series are represented by either a Temporary Global Covered Bond, a Permanent Global Covered Bond or Global Registered Covered Bond, as the case may be, the owner of a beneficial interest therein may exercise its option to redeem under Condition 5(e) (Optional Early Redemption (Put)) of the Terms and Conditions of the Covered Bonds (where such put option is specified in the relevant Final Terms or Pricing Supplement as being applicable) by depositing the redemption notice with any Agent, together with an authority to Euroclear, Clearstream, Luxembourg or any other relevant clearing system(s) to effect redemption (in accordance with its operating procedures and rules) of the portion of the Temporary Global Covered Bond, Permanent Global Covered Bond or Global Registered Covered Bond, as the case may be, which represents the Covered Bonds then being redeemed. Conditions apply Until the whole of a Temporary Global Covered Bond, Permanent Global Covered Bond or Global Registered Covered Bond, as the case may be, has been exchanged as provided therein or cancelled in accordance with the Fiscal Agency Agreement, the holder of the Global Covered Bond shall be subject to the terms and conditions of the Covered Bonds set out herein and, subject as therein otherwise provided, shall be entitled to the same rights and benefits thereunder as if the bearer were the holder of the definitive Covered Bonds and Coupons represented by the relevant part of the relevant Global Covered Bond. Record Date Each payment in respect of a Global Registered Covered Bond will be made to the person shown as the Holder in the Register at the close of business (in the relevant clearing system) on the Clearing System Business Day before the due date for such payment (the "Record Date") where "Clearing System Business Day" means a day on which each clearing system for which the Global Registered Covered Bond is being held is open for business. Business Day Notwithstanding the definition of "Business Day" in Condition 7(5)(c)(i) of the Terms and Conditions of the Covered Bonds, while all the Covered Bonds are represented by a Permanent Global Covered Bond (or by a Permanent Global Covered Bond and/or a Temporary Global Covered Bond) or a Global Registered Covered Bond and the Permanent Global Covered Bond is (or the Permanent Global Covered Bond and/or the Temporary Global Covered Bond are), or the Global Registered Covered Bond is deposited with a depositary or a common depositary or a common safekeeper for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system, "Business Day" means: (i) (ii) if the currency of payment is euro any day which is a TARGET2 Settlement Day and a day on which dealings in foreign currencies may be carried on in each (if any) Relevant Financial Centre; or if the currency of payment is not euro a day on which dealings in foreign currencies may be carried on in the Relevant Financial Centre of the currency of payment and in each other (if any) Relevant Financial Centre

32 CLEARING AND SETTLEMENT The information set out below is subject to changes in or reinterpretation of the rules, regulations and procedures of Euroclear, Clearstream, Luxembourg, VPS or SIS (the "Clearing Systems") from time to time. Investors wishing to use the facilities of any Clearing System must check the rules, regulations and procedures of the relevant Clearing System which are in effect at the relevant time. General The Covered Bonds will be cleared through Euroclear and/or Clearstream, Luxembourg or, in the case of VPS Covered Bonds, the VPS, or in the case of Swiss Franc Covered Bonds, the SIS. Euroclear The Euroclear System was created in 1968 to hold securities for participants in Euroclear ("Euroclear Participants") and to effect transactions between Euroclear Participants through simultaneous book entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfer of securities and cash. Euroclear Participants include banks (including central banks), securities brokers and dealers and other professional financial intermediaries. Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear Participant, either directly or indirectly. The Euroclear group reshaped its corporate structure in 2000 and 2001, transforming the Belgian company Euroclear Clearance System (Société Coopérative) into Euroclear Bank SA/NV, which now operates the Euroclear System. In 2005, a new Belgian holding company, Euroclear SA/NV, was created as the owner of all the shared technology and services supplied to each of the Euroclear CSDs and the ICSD. Euroclear SA/NV is owned by Euroclear plc, a company organised under the laws of England and Wales, which is owned by market participants using Euroclear services as members. As an ICSD, Euroclear provides settlement and related securities services for cross-border transactions involving domestic and international bonds, equities, derivatives and investment funds, and offers clients a single access point to post-trade services in over 40 markets. Distributions with respect to interests in Temporary Global Covered Bonds, Permanent Global Covered Bonds or Definitive Bearer Covered Bonds held through Euroclear will be credited to the Euroclear cash accounts of Euroclear Participants to the extent received by Euroclear's depositary, in accordance with the Euroclear Terms and Conditions. Euroclear will take any other action permitted to be taken by a holder of any such Temporary Global Covered Bonds, Permanent Global Covered Bonds or Definitive Bearer Covered Bonds on behalf of a Euroclear Participant only in accordance with the Euroclear Terms and Conditions. The address of Euroclear is Euroclear Bank SA/NV, 1 Boulevard du Roi Albert II, B-1210 Brussels. Clearstream, Luxembourg Clearstream Banking, société anonyme ("Clearstream, Luxembourg"), located at 42 Avenue JF Kennedy, L-1855 Luxembourg was incorporated in 1970 as a limited company under Luxembourg law. It is registered as a bank in Luxembourg, and as such is subject to regulation by the CSSF, which supervises Luxembourg banks. Clearstream, Luxembourg holds securities for its customers and facilitates the clearance and settlement of securities transactions by book entry transfers between their accounts. Clearstream, Luxembourg provides various services, including safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream, Luxembourg also deals with domestic securities markets in several countries through established depository and custodial relationships. Over 300,000 domestic and internationally traded bonds, equities and investment funds are currently deposited with Clearstream. Currently, Clearstream, Luxembourg has approximately 2,500 customers in over 110 countries. Indirect access to Clearstream, Luxembourg is available to other institutions which clear through or maintain a custodial relationship with an account holder of Clearstream, Luxembourg. The address of Clearstream, Luxembourg is Clearstream Banking, 42 Avenue JF Kennedy, L-1855 Luxembourg

33 VPS VPS ASA is a Norwegian public limited company authorised to register rights to financial instruments subject to the legal effects laid down in the Securities Register Act. VPS clears and settles trades in the Norwegian securities market, and provides services relating to stock issues, distribution of dividends and other corporate actions for companies registered in VPS ASA. Settlement of sale and purchase transactions in respect of Covered Bonds in the VPS will take place three Oslo business days after the date of the relevant transaction. Covered Bonds in the VPS may be transferred between accountholders at the VPS in accordance with the procedures and regulations, for the time being, of the VPS. A transfer of Covered Bonds which are held in the VPS through Euroclear or Clearstream, Luxembourg is only possible by using an account operator or custodian linked to the VPS system. The address of VPS is Norwegian Central Securities Depository, Verdipapirsentralen ASA, P.O. 4, 0051 Oslo, Norway. SIS SIS is a wholly owned subsidiary of SIX Group Ltd. has a bank licences and is supervised by the Swiss Financial Market Supervisory Authority FINMA. SIS acts as the central securities depository and settlement institution for the following Swiss securities: equities, government and private sector bonds, money market instruments, exchange traded funds, conventional investment funds, structured products, warrants and other derivatives. Apart from providing custody and settlement for Swiss securities, SIS acts as global custodian and offers its participants access to custody and settlement in foreign financial markets. SIS offers direct links to other international central securities depositories and central securities depositories including Euroclear and Clearstream, Luxembourg. The address of SIS is SIX SIS AG, Baslerstrasse 100, CH-4600 Olten, Switzerland

34 FORM OF FINAL TERMS A pro forma Final Terms for use in connection with the Programme is set out below. This pro forma is subject to completion to set out the terms upon which each Tranche of Covered Bonds is to be issued. IMPORTANT NOTICE In accessing the attached final terms (the "Final Terms") you agree to be bound by the following terms and conditions. The information contained in the Final Terms may be addressed to and/or targeted at persons who are residents of particular countries only as specified in the Final Terms and/or in the Base Prospectus (as defined in the Final Terms) and is not intended for use and should not be relied upon by any person outside those countries and/or to whom the offer contained in the Final Terms is not addressed. Prior to relying on the information contained in the Final Terms, you must ascertain from the Final Terms and/or the Base Prospectus whether or not you are an intended addressee of the information contained therein. Neither the Final Terms nor the Base Prospectus constitutes an offer to sell or the solicitation of an offer to buy securities in the United States or in any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities law of any such jurisdiction. The securities described in the Final Terms and the Base Prospectus have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold directly or indirectly within the United States or to, or for the account or benefit of, U.S. persons or to persons within the United States of America (as such terms are defined in Regulation S under the Securities Act ("Regulation S")). The securities described in the Final Terms will only be offered in offshore transactions to non-u.s. persons in reliance upon Regulation S. NORDEA EIENDOMSKREDITT AS Issue of [Aggregate Nominal Amount of Tranche] [Title of Covered Bonds] Issued under the EUR 10,000,000,000 Covered Bond Programme PART A CONTRACTUAL TERMS Terms used herein shall be deemed to be defined as such for the purposes of the conditions (the "Conditions") set forth in the base prospectus dated 17 June 2013 [and the base prospectus supplement[s] dated [ ]] which [together] constitute[s] a base prospectus (the "Base Prospectus") for the purposes of the Prospectus Directive. This document constitutes the Final Terms of the Covered Bonds described herein for the purposes of Article 5.4 of the Prospectus Directive and must be read in conjunction with such Base Prospectus [as so supplemented]. Full information on the Issuer and the offer of the Covered Bonds is only available on the basis of the combination of these Final Terms and the Base Prospectus [as so supplemented]. The Base Prospectus [and the base prospectus supplement[s]] and the Final Terms are available for viewing at the registered address of the Issuer and at and copies may be obtained during normal business hours at the registered address of the Issuer. [The expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amendment Directive, to the extent implemented in the relevant Member State) and includes any relevant implementing measures in the Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.] The following alternative language applies if the first tranche of an issue which is being increased was issued under a Base Prospectus with an earlier date. Terms used herein shall be deemed to be defined as such for the purposes of the conditions (the "Conditions") set forth in the Base Prospectus dated 17 June 2013, which are incorporated by reference in the Base Prospectus dated [current date]. This document comprises the Final Terms of the Covered Bonds described herein for the purposes of Article 5.4 of the Prospectus Directive and must be read in - 28-

35 conjunction with the Base Prospectus dated [current date] [and the base prospectus supplement[s] dated [ ]], which [together] constitute[s] a base prospectus for the purposes of the Prospectus Directive. Full information on the Issuer and the offer of the Covered Bonds is only available on the basis of the combination of these Final Terms and the Base Prospectus dated 17 June 2013 [and the base prospectus supplement[s] dated [ ]].The Base Prospectus [and the base prospectus supplement[s] and the Final Terms are available for viewing at the registered office of the Issuer and at and copies may be obtained during normal business hours at the registered office of the Issuer. [The expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amendment Directive, to the extent implemented in the relevant Member State) and includes any relevant implementing measures in the Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.] [Include whichever of the following apply or specify as "Not Applicable" (N/A). Note that the numbering should remain as set out below, even if "Not Applicable" is indicated for individual paragraphs or subparagraphs. Italics denote guidance for completing the Final Terms.] [These Covered Bonds are VPS Covered Bonds. Holders of the VPS Covered Bonds are entitled to the benefit of, and are bound by and are deemed to have notice of, the provisions of the deed of covenant dated 17 June 2013 executed by the Issuer constituting the VPS Covered Bonds. [This paragraph need only be included if the Final Terms relates to VPS Covered Bonds.] 1. Issuer: Nordea Eiendomskreditt AS 2. (i) Series Number: [ ] (ii) Tranche Number: [ ] (iii) Date on which the Covered Bonds become fungible: Not Applicable / The Covered Bonds shall be consolidated, form a single series and be interchangeable for trading purposes with the [ ] on [the Issue Date/exchange of the Temporary Global Covered Bonds for interests in the Permanent Global Covered Bonds, as described in these Final Terms [which is expected to occur on or about [ ]] 3. Specified Currency: [ ] 4. Aggregate Nominal Amount: (i) Series: [ ] (ii) Tranche: [ ] 5. Issue Price: [ ] per cent. of the Tranche [plus accrued interest from [insert date] if applicable] 6. (i) Specified Denominations: [ ] [Where multiple denominations of EUR 100,000 and higher (or its equivalent in any other currency) are being used and Covered Bonds are not being issued in registered form, the following sample wording should be followed: So long as the Covered Bonds are represented by a Temporary Global Covered Bond or a Permanent Global Covered Bond and the relevant clearing systems so permit, the Covered Bonds will be tradeable only in the minimum authorised denomination of [EUR 100,000] and higher integral multiples of [EUR - 29-

36 (ii) Calculation Amount: [ ] 7. (i) Issue Date: [ ] (ii) Interest Commencement Date: [ ] 1,000], notwithstanding that no definitive Covered Bonds will be issued with a denomination above [EUR 199,000].] [If there is more than one Specified Denomination, insert the highest common factor of these Specified Denominations (note: there must be a common factor of two or more Specified Denominations).] 8. (i) Maturity Date: [ ] / Interest Payment date falling in or nearest to [ ] (in the case of Floating Rate Covered Bonds) (ii) Extended Maturity Date: [Applicable/Not Applicable] [If not applicable, delete the remaining sections of this subparagraph] The Extended Maturity Date is [[ ]/Interest Payment Date falling in or nearest to [ ] (in the case of Floating Rate Covered Bonds)]. [If applicable, complete relevant sections regarding interest, etc.] 9. Interest Basis [ ] per cent. Fixed Rate / [ ] LIBOR/ EURIBOR/ BBSW/ BKBM/ CDOR/ CIBOR/ HIBOR/ JIBAR/ MOSPRIME/ NIBOR/ STIBOR/ TIBOR/ TIIE/ TRLIBOR/ WIBOR ± [ ] per cent. Floating Rate / Zero Coupon 10. Redemption: Redemption at par, subject to any purchase and cancellation or early redemption 11. Put/Call Options Not Applicable / Investor Put / Issuer Call 12. Authorisation Not Applicable / The issuance of the Covered Bonds was authorised by a decision of [ ] dated [ ] PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE TO MATURITY DATE 13. Fixed Rate Covered Bonds Provisions [Applicable/Not Applicable] (If not applicable, delete the remaining sub paragraphs of this paragraph) (i) Rate[(s)] of Interest: [ ] per cent. per annum payable [annually / semi-annually / quarterly / monthly] in arrear (ii) Interest Payment Date(s): [ ] in each year[, adjusted [for payment purposes only] in accordance with [specify Business Day Convention and any applicable Business Centre(s) for the definition of "Business Day"]/, not adjusted] - 30-

37 [Insert the following option for Covered Bonds if Interest Payment Dates are to be modified: Interest Payment Dates will be adjusted for calculation of interest and for payment purposes in accordance with the Modified Business Day Convention] (iii) Fixed Coupon Amount[(s)]: [ ] per Calculation Amount (iv) Broken Amount(s): Not Applicable / Insert particulars of any initial or final broken interest amounts which do not correspond with the Fixed Coupon Amount[(s)] (v) Day Count Fraction: Actual/Actual (ICMA) / Actual/Actual (ISDA) / Actual/365 (Fixed) / Actual/365 (Sterling) / Actual/360 / 30/360 / 360/360 / Bond Basis / 30E/360 / Eurobond Basis / 30E/360 (ISDA) (vi) Determination Date(s): [ ] in each year [Insert regular interest payment dates, ignoring issue date or maturity date in the case of a long and short first or last coupon] (NB: This will need to be amended in the case of regular interest payment dates which are not of equal duration). (NB: Only relevant where Day Count Fraction is Actual/Actual (ICMA)). 14. Floating Rate Covered Bonds Provisions [Applicable/Not Applicable] (i) Specified Period(s)/Specified Interest Payment Dates: [ ] in each year commencing on [ ] up to and including [ ] [No adjustments will be made to the Interest Amounts [except for the Broken Amount for the [first/last] Interest Payment date on [ ]]] (ii) Business Day Convention: Following Business Day Convention / Modified Following Business Day Convention / Modified Business Day Convention / Preceding Business Day Convention / FRN Convention / Floating Rate Convention / Eurodollar Convention / No Adjustment (iii) (iv) Manner in which the Rate(s) of Interest is/are to be determined: Party responsible for calculating the Rate(s) of Interest and Interest Amount(s) (if not the Agent): Screen Rate Determination / ISDA Determination [ ] (v) Screen Rate Determination: [ ] Reference Rate: [ ] LIBOR/ EURIBOR/ BBSW/ BKBM/ CDOR/ CIBOR/ HIBOR/ JIBAR/ MOSPRIME/ NIBOR/ STIBOR/ TIBOR/ TIIE/ TRLIBOR/ WIBOR [The applicable reference rate for the first - 31-

38 Interest Determination Date(s): [ ] Relevant Screen Page: [ ] Relevant Time: [ ] (vi) ISDA Determination: [ ] Floating Rate Option: [ ] Designated Maturity: [ ] Reset Date: [ ] short/long Interest Period is [ ]] (vii) Margin(s): [±][ ] per cent. per annum (viii) Minimum Rate of Interest: [ ] per cent. per annum (ix) Maximum Rate of Interest: [ ] per cent. per annum (x) Day Count Fraction: Actual/Actual (ICMA) / Actual/Actual (ISDA) / Actual/365 (Fixed) / Actual/365 (Sterling) / Actual/360 / 30/360 / 360/360 / Bond Basis / 30E/360 / Eurobond Basis / 30E/360 (ISDA) 15. Zero Coupon Covered Bonds Provisions [Applicable/Not Applicable] (i) [Amortisation/Accrual] Yield: [ ] per cent. per annum (ii) Reference Price: [ ] per cent. per annum (If not applicable, delete the remaining sub paragraphs of this paragraph) (iii) Day Count Fraction: Actual/Actual (ICMA) / Actual/Actual (ISDA) / Actual/365 (Fixed) / Actual/365 (Sterling) / Actual/360 / 30/360 / 360/360 / Bond Basis / 30E/360 / Eurobond Basis / 30E/360 (ISDA) PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE FROM THE MATURITY DATE TO THE EXTENDED MATURITY DATE 16. Fixed Rate Covered Bonds Provisions [Applicable/Not Applicable] (If not applicable, delete the remaining sub paragraphs of this paragraph). (i) Rate[(s)] of Interest: [ ] per cent. per annum payable [annually / semi-annually / quarterly / monthly] in arrear (ii) Interest Payment Date(s): [ ] / [ ] in each year[, adjusted [for payment purposes only] in accordance with [specify Business Day Convention and any applicable Business Centre(s) for the definition of "Business Day"]/, not adjusted] [Insert the following option for Covered Bonds if Interest Payment Dates are to be modified: Interest Payment Dates will be adjusted for calculation of interest and for payment purposes in accordance with the Modified - 32-

39 Business Day Convention] (iii) Fixed Coupon Amount[(s)]: [ ] per Calculation Amount (iv) Broken Amount(s): Not Applicable / Insert particulars of any initial or final broken interest amounts which do not correspond with the Fixed Coupon Amount[(s)] (v) Day Count Fraction: Actual/Actual (ICMA) / Actual/Actual (ISDA) / Actual/365 (Fixed) / Actual/365 (Sterling) / Actual/360 / 30/360 / 360/360 / Bond Basis / 30E/360 / Eurobond Basis / 30E/360 (ISDA) (vi) Determination Date(s): [ ] in each year [Insert regular interest payment dates, ignoring issue date or maturity date in the case of a long and short first or last coupon] (NB: This will need to be amended in the case of regular interest payment dates which are not of equal duration). (NB: Only relevant where Day Count Fraction is Actual/Actual (ICMA)). 17. Floating Rate Covered Bonds Provisions [Applicable/Not Applicable] (i) Specified Period(s)/Specified Interest Payment Dates: [ ] in each year commencing on [ ] up to and including [ ] [No adjustments will be made to the Interest Amounts [except for the Broken Amount for the [first/last] Interest Payment date on [ ]]] (ii) Business Day Convention: Following Business Day Convention / Modified Following Business Day Convention / Modified Business Day Convention / Preceding Business Day Convention / FRN Convention / Floating Rate Convention / Eurodollar Convention / No Adjustment (iii) (iv) Manner in which the Rate(s) of Interest is/are to be determined: Party responsible for calculating the Rate(s) of Interest and Interest Amount(s) (if not the Agent): Screen Rate Determination / ISDA Determination [ ] (v) Screen Rate Determination: [ ] Reference Rate: [ ] LIBOR/ EURIBOR/ BBSW/ BKBM/ CDOR/ CIBOR/ HIBOR/ JIBAR/ MOSPRIME/ NIBOR/ STIBOR/ TIBOR/ TIIE/ TRLIBOR/ WIBOR Interest Determination Date(s): [ ] Relevant Screen Page: [ ] Relevant Time: [ ] - 33-

40 (vi) ISDA Determination: [ ] Floating Rate Option: [ ] Designated Maturity: [ ] Reset Date: [ ] (vii) Margin(s): [±][ ] per cent. per annum (viii) Minimum Rate of Interest: [ ] per cent. per annum (ix) Maximum Rate of Interest: [ ] per cent. per annum (x) Day Count Fraction: Actual/Actual (ICMA) / Actual/Actual (ISDA) / Actual/365 (Fixed) / Actual/365 (Sterling) / Actual/360 / 30/360 / 360/360 / Bond Basis / 30E/360 / Eurobond Basis / 30E/360 (ISDA) PROVISIONS RELATING TO REDEMPTION 18. Call Option Applicable/Not Applicable (i) Optional Redemption Date(s): [ ] (ii) Optional Redemption Amount(s): [ ] per Calculation Amount (iii) If redeemable in part: (a) (b) Minimum Redemption Amount: Maximum Redemption Amount: [ ] per Calculation Amount [ ] per Calculation Amount (iv) Notice period: [ ] 19. Put Option [Applicable/Not Applicable] (i) Optional Redemption Date(s): [ ] (If not applicable, delete the remaining subparagraphs of this paragraph). (ii) Optional Redemption Amount(s) of each Covered Bond: [ ] per Calculation Amount (iii) Notice period: [ ] 20. Final Redemption Amount Par 21. Early Redemption Amount [ ] Early Redemption Amount(s) per Calculation Amount payable on redemption for taxation reasons or on event of default or other early redemption: [Condition 5[(b)/(c)/(e)] of Covered Bonds applies] 22. Form of Covered Bonds: [Bearer Covered Bonds]: [Temporary Global Covered Bond exchangeable for a Permanent Global Covered Bond which is exchangeable for Definitive Covered Bonds on [ ] days' notice/at any time/in the limited circumstances specified in - 34-

41 the Permanent Global Covered Bond] [Temporary Global Covered Bond exchangeable for Definitive Covered Bonds on [ ] days' notice.] [Permanent Global Covered Bonds exchangeable for Definitive Covered Bonds on [ ] days' notice/at any time/in the limited circumstances specified in the Permanent Global Covered Bonds.] [Registered Covered Bonds: Individual Covered Bond Certificates / Global Registered Covered Bond [exchangeable for Individual Covered Bond Certificates on [ ] days' notice/at any time/in the limited circumstances specified in the Global Registered Covered Bond] [The Covered Bonds are VPS Covered Bonds in uncertificated and dematerialised book entry form] (N.B. The exchange upon notice/at any time options should not be expressed to be applicable if the Specified Denomination of the Covered Bonds in paragraph 6 includes language substantially to the following effect: "[ 100,000] and integral multiples of [ 1,000] in excess thereof up to and including [ 199,000]." Furthermore, such Specified Denomination construction is not permitted in relation to any issue of Covered Bonds which is to be represented on issue by a Temporary Global Covered Bond exchangeable for Definitive Covered Bonds) 23. [New Global Covered Bonds]/New Safekeeping Structure]: 24. Additional cities for the purposes of the definition of Relevant Financial Centre 25. Talons for future Coupons to be attached to Definitive Covered Bonds (and dates on which such Talons mature): [Yes/No/Not Applicable] Not Applicable / Give details Yes. The Talons mature on [ ] / No Signed on behalf of Nordea Eiendomskreditt AS: By:... By:... Duly authorised Duly authorised Date:... Date:

42 PART B OTHER INFORMATION 1. LISTING Listing and admission to trading: Application has been made to the [Irish Stock Exchange/London Stock Exchange] for the Covered Bonds to be admitted to the Official List and to trading on its regulated market with effect from [ ] (Where documenting a fungible issue need to indicate that original securities are already admitted to trading.) 2. RATINGS Ratings: The issuance of Covered Bonds itself has not been assigned any ratings solicited by the Issuer / The issuance of Covered Bonds itself is expected to be rated: The following ratings reflect the ratings allocated to Covered Bonds of the type being issued under the Issuer's EUR 10,000,000,000 Covered Bond Programme generally: Moody's Investors Service Limited: [ ] 3. [INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE/OFFER Save as discussed in "Subscription and Sale" in the Base Prospectus, so far as the Issuer is aware, no person involved in the offer of the Covered Bonds has an interest material to the offer / [ ] 4. REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL EXPENSES (i) Reasons for the offer: The net proceeds of the issue of the Covered Bonds will be used for the general banking and other corporate purposes of Nordea Eiendomskreditt AS / Other (ii) Estimated net proceeds: [ ] (iii) Estimated total expenses in relation to admission to trading: [ ] 5. [Fixed RateCovered Bonds only - YIELD Indication of yield [ ] per cent. As set out above, the yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.] 6. [Floating Rate Covered Bonds only - HISTORIC INTEREST RATES Details of the historic Reference Rate can be obtained from [Reuters.] 7. [THIRD PARTY INFORMATION [Relevant third party information] has been extracted from [specify source]. The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware, - 36-

43 and is able to ascertain from information published by [specify source], no facts have been omitted which would render the reproduced inaccurate or misleading.] 8. DISTRIBUTION If syndicated: (i) Names of Managers and underwriting commitments: Not Applicable / Give names and underwriting commitments (ii) Date of Subscription Agreement: [ ] (iii) Stabilising Manager(s) (if any): Not Applicable / Give Name If non-syndicated, name of Dealer: [Total commission and concession:] Not Applicable / Give Name [[ ] per cent. Of the Aggregate Nominal Amount] U.S. Selling Restriction: Regulation S Category 2 9. OPERATIONAL INFORMATION (In the case of Bearer Covered Bonds) - TEFRA D/TEFRA C/TEFRA Not Applicable (In the case of Registered Covered Bonds/VPS Covered Bonds) - TEFRA Not Applicable ISIN Code: Common Code: [Swiss Security Number: Intended to be held in a manner which would allow Eurosystem eligibility or global Registered Covered Bond to be held under NSS: [ ] [ ] [ ]] Yes / No / Not Applicable (in the case of Covered Bonds not issued in NGCB / NSS form) [Note that the designation "yes" means that the Covered Bonds are intended upon issue to be deposited with Euroclear or Clearstream, Luxembourg as common safekeeper [and registered in the name of a nominee of one of the ICSDs acting as common safekeeper] and does not necessarily mean that the Covered Bonds will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend upon the European Central Bank being satisfied that Eurosystem eligibility criteria have been met.] [include this text if "yes" selected in which case the Covered Bonds must be bearer Covered Bonds issued in NGCB form or registered Covered Bonds issued in NSS form] [Whilst the designation is specified as "no" at the date of these Final Terms, should the Eurosystem eligibility criteria be amended in the future such that the Covered Bonds are - 37-

44 capable of meeting them the Covered Bonds may then be deposited with Euroclear or Clearstream, Luxembourg as common safekeeper. Note that this does not necessarily mean that the Covered Bonds will then be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem at any time during their life. Such recognition will depend upon the European Central Bank being satisfied that Eurosystem eligibility criteria have been met.] [this text may be appropriate to include if "no" is selected and the Covered Bonds are bearer Covered Bonds issued in NGCB form or registered Covered Bonds issued in NSS form] Clearing system(s) [and the relevant identification number(s), if applicable]: [Euroclear/Clearstream, Luxembourg/VPS, the Norwegian Central Securities Depository, Verdipapirsentralen ASA, P.O. 4, 0051, Oslo, Norway] [VPS identification number: [ ]] Delivery: Name(s) and address(es) of additional Paying Agent(s) (if any): [Name and address of VPS Paying Agent:] Delivery [against/free of] payment [ ] [only applicable to VPS Covered Bonds] - 38-

45 FORM OF PRICING SUPPLEMENT A pro forma Pricing Supplement for use in connection with Exempt Covered Bonds issued under the Programme is set out below. This pro forma is subject to completion and amendment to set out the terms upon which each Tranche of Exempt Covered Bonds is to be issued. IMPORTANT NOTICE In accessing the attached pricing supplement (the "Pricing Supplement") you agree to be bound by the following terms and conditions. The information contained in the Pricing Supplement may be addressed to and/or targeted at persons who are residents of particular countries only as specified in the Pricing Supplement and/or in the Base Prospectus (as defined in the Pricing Supplement) and is not intended for use and should not be relied upon by any person outside those countries and/or to whom the offer contained in the Pricing Supplement is not addressed. Prior to relying on the information contained in the Pricing Supplement, you must ascertain from the Pricing Supplement and/or the Base Prospectus whether or not you are an intended addressee of the information contained therein. Neither the Pricing Supplement nor the Base Prospectus constitutes an offer to sell or the solicitation of an offer to buy securities in the United States or in any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities law of any such jurisdiction. The securities described in the Pricing Supplement and the Base Prospectus have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold directly or indirectly within the United States or to, or for the account or benefit of, U.S. persons or to persons within the United States of America (as such terms are defined in Regulation S under the Securities Act ("Regulation S")). The securities described in the Pricing Supplement will only be offered in offshore transactions to non-u.s. persons in reliance upon Regulation S. Pricing Supplement dated [ ] NO PROSPECTUS IS REQUIRED IN ACCORDANCE WITH DIRECTIVE 2003/71/EC AS AMENDED FOR THIS ISSUE OF COVERED BONDS. NORDEA EIENDOMSKREDITT AS Issue of [Aggregate Nominal Amount of Tranche] [Title of Covered Bonds] Issued under the EUR 10,000,000,000 Covered Bond Programme PART A CONTRACTUAL TERMS [Terms used herein shall be deemed to be defined as such for the purposes of the Conditions (the "Conditions") set forth in the base prospectus dated 17 June 2013 [and the base prospectus supplement[s] dated [ ]] which [together] constitute[s] a base prospectus (the "Base Prospectus"). This document constitutes the Pricing Supplement of the Covered Bonds described herein and must be read in conjunction with such Base Prospectus [as so supplemented]. Full information on the Issuer and the offer of the Covered Bonds is only available on the basis of the combination of this Pricing Supplement and the Base Prospectus [as so supplemented]. The Base Prospectus [and the base prospectus supplement[s]] [is] [are] available for viewing during normal business hours at, and copies may be obtained from, the principal office of the Issuer at [address]] The following alternative language applies if the first tranche of an issue which is being increased was issued under a Base Prospectus with an earlier date: [Terms used herein shall be deemed to be defined as such for the purposes of the Conditions (the "Conditions") set forth in the Base Prospectus dated 17 June 2013 [and the base prospectus supplement[s] dated [ ]]. This document comprises the Pricing Supplement of the Covered Bonds - 39-

46 described herein and must be read in conjunction with the Base Prospectus dated 17 June 2013 [and the base prospectus supplement[s] dated [ ]], which [together] constitute[s] a base prospectus, save in respect of the Conditions which are extracted from the [Base Prospectus] dated 17 June 2013 [and the base prospectus supplement[s] dated [ ]]. Full information on the Issuer and the offer of the Covered Bonds is only available on the basis of the combination of this Pricing Supplement and the Base Prospectus dated 17 June 2013 and [ ] [and the base prospectus supplement[s] dated [ ]]. The Prospectuses [and the base prospectus supplement[s]] [is] [are] available for viewing during normal business hours at, and copies may be obtained from, the principal office of the Issuer at [address].] [These Covered Bonds are VPS Covered Bonds. Holders of the VPS Covered Bonds are entitled to the benefit of, and are bound by and are deemed to have notice of, the provisions of the deed of covenant dated 17 June 2013 executed by the Issuer constituting the VPS Covered Bonds. [This paragraph need only be included if the Pricing Supplement relates to VPS Covered Bonds.] [Include whichever of the following apply or specify as "Not Applicable". Italics denote guidance for completing this Pricing Supplement.] 1. (i) Series Number: [ ] (ii) Tranche Number: [ ] (iii) Date on which the Covered Bonds become fungible: Not Applicable / The Covered Bonds shall be consolidated, form a single series and be interchangeable for trading purposes with the [ ] on [the Issue Date/exchange of the Temporary Global Covered Bond for interests in the Permanent Global Covered Bond, as described in this Pricing Supplement [which is expected to occur on or about [ ]] 2. Specified Currency: [ ] 3. Aggregate Nominal Amount: (i) Series: [ ] (ii) Tranche: [ ] 4. Issue Price: [ ] per cent. of the Tranche [plus accrued interest from [insert date] (in the case of fungible issues only, if applicable)] 5. (i) Specified Denominations: [ ] (ii) Calculation Amount: [ ] [Where multiple denominations at or above EUR 100,000 (or equivalent) are being used and Covered Bonds are not being issued in registered form, the following sample wording should be followed: So long as the Covered Bonds are represented by a Temporary Global Covered Bond or a Permanent Global Covered Bond and the relevant clearing systems so permit, the Covered Bonds will be tradeable only in the minimum authorised denomination of [EUR 100,000] and higher integral multiples of [EUR 1,000], notwithstanding that no definitive Covered Bonds will be issued with a denomination above [EUR 199,000].] [If there is more than one Specified Denomination, insert the highest common factor of those Specified - 40-

47 6. (i) Issue Date: [ ] (ii) Interest Commencement Date: [ ] Denominations (note: there must be a common factor of two or more Specified Denominations)] 7. (i) Maturity Date: [ ] / Interest Payment date falling in or nearest to [ ] (in the case of Floating Rate Covered Bonds) (ii) Extended Maturity Date: [Applicable/Not Applicable] [If not applicable, delete the remaining sections of this subparagraph] The Extended Maturity Date is [[ ]/Interest Payment Date falling in or nearest to [ ] (in the case of Floating Rate Covered Bonds)]. [If applicable, complete relevant sections regarding interest, etc.] 8. Interest Basis: [ ] per cent. Fixed Rate / [ ] [LIBOR/ EURIBOR/ BBSW/ BKBM/ CDOR/ CIBOR/ HIBOR/ JIBAR/ MOSPRIME/ NIBOR/ STIBOR/ TIBOR/ TIIE/ TRLIBOR/ WIBOR / other] ± [ ] per cent. Floating Rate / Zero Coupon 9. Redemption/Payment Basis: Redemption at par, subject to any purchase and cancellation or early redemption 10. Put/Call Options: Not Applicable / Investor Put / Issuer Call 11. Authorisation: Not Applicable / The issuance of the Covered Bonds was authorised by a decision of [ ] dated [ ] PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE 12. Fixed Rate Covered Bond Provisions Applicable / Not Applicable (If not applicable, delete the remaining subparagraphs of this paragraph) (i) Rate[(s)] of Interest: [ ] per cent. per annum payable [annually / semiannually / quarterly / monthly] in arrear (ii) Interest Payment Date(s): [ ] in each year[, adjusted [for payment purposes only] in accordance with [specify Business Day Convention and any applicable Business Centre(s) for the definition of "Business Day"]/, not adjusted] [Insert the following option for Covered Bonds if Interest Payment Dates are to be modified: Interest Payment Dates will be adjusted for calculation of interest and for payment purposes in accordance with the [specify applicable Business Day Convention]] (iii) Fixed Coupon Amount[(s)]: [ ] per Calculation Amount (v) Broken Amount(s): [Insert particulars of any initial or final broken interest amounts which do not correspond with the - 41-

48 Fixed Coupon Amount[(s)]] (vi) Day Count Fraction: Actual/Actual (ICMA) / Actual/Actual (ISDA) / Actual/365 (Fixed) / Actual/365 (Sterling) / Actual/360 / 30/360 / 360/360 / Bond Basis / 30E/360 / Eurobond Basis / 30E/360 (ISDA) (vii) Determination Date(s): [ ] in each year (NB: Actual/Actual (ICMA) is normally only appropriate for Fixed Rate Covered Bonds denominated in euro) [Insert regular interest payment dates, ignoring issue date or maturity date in the case of a long and short first or last coupon] (NB: This will need to be amended in the case of regular interest payment dates which are not of equal duration). (NB: Only relevant where Day Count Fraction is Actual/Actual (ICMA)). 13. Floating Rate Covered Bond Provisions Applicable / Not Applicable (i) Specified Period(s)/Specified Interest Payment Dates: [ ] in each year commencing on [ ] up to and including [ ] [No adjustments will be made to the Interest Amounts [except for the Broken Amount for the [first/last] Interest Payment date on [ ]]] (ii) Business Day Convention: Following Business Day Convention / Modified Following Business Day Convention / Modified Business Day Convention / Preceding Business Day Convention / FRN Convention / Floating Rate Convention / Eurodollar Convention / No Adjustment / other (iii) (iv) (v) Manner in which the Rate(s) of Interest is/are to be determined: Party responsible for calculating the Rate(s) of Interest and/or Interest Amount(s): Screen Rate Determination: Screen Rate Determination / ISDA Determination Agent / [ ] Reference Rate: [ ] [LIBOR/ EURIBOR/ BBSW/ BKBM/ CDOR/ CIBOR/ HIBOR/ JIBAR/ MOSPRIME/ NIBOR/ STIBOR/ TIBOR/ TIIE/ TRLIBOR/ WIBOR / other] [The applicable reference rate for the first short/long Interest Period is [ ]] Interest Determination Date(s): [ ] - 42-

49 Relevant Screen Page: [ ] Relevant Time: [ ] (vi) ISDA Determination: Floating Rate Option: [ ] Designated Maturity: [ ] Reset Date: [ ] (vii) Margin(s): [±][ ] per cent. per annum (viii) Minimum Rate of Interest: [ ] per cent. per annum (ix) Maximum Rate of Interest: [ ] per cent. per annum (x) Day Count Fraction: Actual/Actual (ICMA) / Actual/Actual (ISDA) / Actual/365 (Fixed) / Actual/365 (Sterling) / Actual/360 / 30/360 / 360/360 / Bond Basis / 30E/360 / Eurobond Basis / 30E/360 (ISDA) / other 14. Zero Coupon Covered Bond Provision Applicable / Not Applicable (i) [Amortisation/Accrual] Yield: [ ] per cent. per annum (ii) Reference Price: [ ] per cent. per annum (If not applicable, delete the remaining sub paragraphs of this paragraph) (iii) Any other formula/basis of determining amount payable: [ ] (iv) Day Count Fraction: Following Business Day Convention / Modified Following Business Day Convention / Modified Business Day Convention / Preceding Business Day Convention / FRN Convention / Floating Rate Convention / Eurodollar Convention / No Adjustment / other PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE FROM THE MATURITY DATE TO THE EXTENDED MATURITY DATE 15. Fixed Rate Covered Bonds Provisions [Applicable/Not Applicable] (If not applicable, delete the remaining sub paragraphs of this paragraph). (i) Rate[(s)] of Interest: [ ] per cent. per annum payable [annually / semiannually / quarterly / monthly / other] in arrear (ii) Interest Payment Date(s): [ ] / [ ] in each year[, adjusted [for payment purposes only] in accordance with [specify Business Day Convention and any applicable Business Centre(s) for the definition of "Business Day"]/, not adjusted] [Insert the following option for Covered Bonds if Interest Payment Dates are to be modified: - 43-

50 Interest Payment Dates will be adjusted for calculation of interest and for payment purposes in accordance with the [specify applicable Business Day Convention]] (iii) Fixed Coupon Amount[(s)]: [ ] per Calculation Amount (iv) Broken Amount(s): Not Applicable / Insert particulars of any initial or final broken interest amounts which do not correspond with the Fixed Coupon Amount[(s)] (v) Day Count Fraction: Actual/Actual (ICMA) / Actual/Actual (ISDA) / Actual/365 (Fixed) / Actual/365 (Sterling) / Actual/360 / 30/360 / 360/360 / Bond Basis / 30E/360 / Eurobond Basis / 30E/360 (ISDA) / other (vi) Determination Date(s): [ ] in each year [Insert regular interest payment dates, ignoring issue date or maturity date in the case of a long and short first or last coupon] (NB: This will need to be amended in the case of regular interest payment dates which are not of equal duration). (NB: Only relevant where Day Count Fraction is Actual/Actual (ICMA)). 16. Floating Rate Covered Bonds Provisions [Applicable/Not Applicable] (i) Specified Period(s)/Specified Interest Payment Dates: [ ] / [ ] in each year commencing on [ ] up to and including [ ] [No adjustments will be made to the Interest Amounts [except for the Broken Amount for the [first/last] Interest Payment date on [ ]]] (ii) Business Day Convention: Following Business Day Convention / Modified Following Business Day Convention / Modified Business Day Convention / Preceding Business Day Convention / FRN Convention / Floating Rate Convention / Eurodollar Convention / No Adjustment (iv) (v) Manner in which the Rate(s) of Interest is/are to be determined: Party responsible for calculating the Rate(s) of Interest and Interest Amount(s) (if not the Agent): Screen Rate Determination / ISDA Determination [ ] (vi) Screen Rate Determination: [ ] Reference Rate: [ ] [LIBOR/ EURIBOR/ BBSW/ BKBM/ CDOR/ CIBOR/ HIBOR/ JIBAR/ MOSPRIME/ NIBOR/ STIBOR/ TIBOR/ TIIE/ TRLIBOR/ WIBOR / other] [The applicable reference rate for the first short/long Interest Period is [ ]] - 44-

51 Interest Determination Date(s): [ ] Relevant Screen Page: [ ] Relevant Time: [ ] (vii) ISDA Determination: [ ] Floating Rate Option: [ ] Designated Maturity: [ ] Reset Date: [ ] (viii) Margin(s): [±][ ] per cent. per annum (ix) Minimum Rate of Interest: [ ] per cent. per annum (x) Maximum Rate of Interest: [ ] per cent. per annum (xi) Day Count Fraction: Actual/Actual (ICMA) / Actual/Actual (ISDA) / Actual/365 (Fixed) / Actual/365 (Sterling) / Actual/360 / 30/360 / 360/360 / Bond Basis / 30E/360 / Eurobond Basis / 30E/360 (ISDA) / other PROVISIONS RELATING TO REDEMPTION 17. Call Option Applicable / Not Applicable (i) Optional Redemption Date(s): [ ] (If not applicable, delete the remaining sub paragraphs of this paragraph) (ii) (iii) Optional Redemption Amount(s): If redeemable in part: [ ] per Calculation Amount (a) (b) Minimum Redemption Amount: Maximum Redemption Amount: [ ] per Calculation Amount [ ] per Calculation Amount (iv) Notice period: [ ] 18. Put Option Applicable / Not Applicable (i) Optional Redemption Date(s): [ ] (If not applicable, delete the remaining subparagraphs of this paragraph) (ii) Optional Redemption Amount(s) of each Covered Bond and method, if any, of calculation of such amount(s): [ ] per Calculation Amount (iii) Notice period: [ ] - 45-

52 19. Final Redemption Amount [Par/[ ]] per Calculation Amount 20. Early Redemption Amount Early Redemption Amount(s) per Calculation Amount payable on redemption for taxation reasons or on event of default or other early redemption: Condition 5[(b)/(c)/(e)] applies GENERAL PROVISIONS APPLICABLE TO THE COVERED BONDS 21. Form of Covered Bonds [Bearer Covered Bonds]: [Temporary Global Covered Bond exchangeable for a Permanent Global Covered Bond which is exchangeable for Definitive Covered Bonds on [ ] days' notice/at any time/in the limited circumstances specified in the Permanent Global Covered Bond] [Temporary Global Covered Bond exchangeable for Definitive Covered Bonds on [ ] days' notice.] [Permanent Global Covered Bonds exchangeable for Definitive Covered Bonds on [ ] days' notice/at any time/in the limited circumstances specified in the Permanent Global Covered Bonds.] [Registered Covered Bonds: Individual Covered Bond Certificates / Global Registered Covered Bond [exchangeable for Individual Covered Bond Certificates on [ days' notice/at any time/in the limited circumstances specified in the Global Registered Covered Bond] [The Covered Bonds are VPS Covered Bonds in uncertificated and dematerialised book entry form] (N.B. The exchange upon notice/at any time options should not be expressed to be applicable if the Specified Denomination of the Covered Bonds in paragraph 6 includes language substantially to the following effect: "[ 100,000] and integral multiples of [ 1,000] in excess thereof up to and including [ 199,000]." Furthermore, such Specified Denomination construction is not permitted in relation to any issue of Covered Bonds which is to be represented on issue by a Temporary Global Covered Bond exchangeable for Definitive Covered Bonds) 22. [New Global Covered Bonds / New Safekeeping Structure]: 23. Additional cities for the purposes of the definition of Relevant Financial Centre: 24. Talons for future Coupons to be attached to Definitive Covered Bonds (and dates on which such Talons [Yes/No] Not Applicable / Give details Yes. The Talons mature on [ ] / No - 46-

53 mature): 25. Other terms and conditions: Not Applicable / Give details RESPONSIBILITY The Issuer accepts responsibility for the information contained in this Pricing Supplement. SIGNATURE Signed on behalf of Nordea Eiendomskreditt AS: By: Duly authorised Date: By: Duly authorised Date: - 47-

54 PART B OTHER INFORMATION 1. LISTING AND ADMISSION TO TRADING None / Application has been made to [ ] for the Covered Bonds to be admitted to trading on [ ] with effect from [ ] / The Covered Bonds have been provisionally admitted to trading on the SIX Swiss Exchange with effect from [ ]. Application for definitive listing on the SIX Swiss Exchange will be made as soon as is reasonably practicable thereafter. The last trading day is expected to be on [ ] / Other (Where documenting a fungible issue need to indicate that original securities are already admitted to trading.) 2. RATINGS The issuance of Covered Bonds itself has not been assigned any ratings solicited by the Issuer / The issuance of Covered Bonds itself is expected to be rated: [ ] / The following rating reflects the rating allocated to Covered Bonds of the type being issued under the Issuer's EUR 10,000,000,000 Covered Bond Programme generally: Moody's Investors Service Limited: [ ] 3. INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE/OFFER Save as discussed in "Subscription and Sale" in the Base Prospectus, so far as the Issuer is aware, no person involved in the offer of the Covered Bonds has an interest material to the offer / [ ] 4. REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL EXPENSES Reasons for the offer: Estimated net proceeds: Estimated total expenses in relation to admission to trading: The net proceeds of the issue of the Covered Bonds will be used for the general banking and other corporate purposes of Nordea Eiendomskreditt AS / Other [ ] [ ] 5. [Fixed Rate Covered Bonds only - YIELD Indication of yield: [ ] As set out above, the yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.] 6. [Floating Rate Covered Bonds only - HISTORIC INTEREST RATES Details of the historic Reference Rate can be obtained from [Reuters].] 7. [THIRD PARTY INFORMATION [Relevant third party information] has been extracted from [specify source]. The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware, and is able to ascertain from information published by [specify source], no facts have been omitted which would render the reproduced inaccurate or misleading.] - 48-

55 8. DISTRIBUTION If syndicated: (i) Names of Managers and underwriting commitments: Not Applicable / Give names and underwriting commitments (ii) Date of Subscription Agreement: [ ] (iii) Stabilising Manager(s) (if any): Not Applicable / Give Name If non-syndicated, name of Dealer: [Total commission and concession:] Not Applicable / Give Name [[ ] per cent. Of the Aggregate Nominal Amount] U.S. Selling Restriction: Regulation S Category 2 (In the case of Bearer Covered Bonds) - TEFRA D/TEFRA C/TEFRA Not Applicable (In the case of Registered Covered Bonds/VPS Covered Bonds) - TEFRA Not Applicable Other Selling Restrictions: [ ] / Not Applicable 9. OPERATIONAL INFORMATION ISIN Code: Common Code: [Swiss Security Number: Intended to be held in a manner which would allow Eurosystem eligibility: [ ] [ ] [ ]] Yes / No / Not Applicable (in the case of Covered Bonds not issued in NGCB / NSS form) [Note that the designation "yes" means that the Covered Bonds are intended upon issue to be deposited with Euroclear or Clearstream, Luxembourg as common safekeeper [and registered in the name of a nominee of one of the ICSDs acting as common safekeeper] and does not necessarily mean that the Covered Bonds will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend upon the European Central Bank being satisfied that Eurosystem eligibility criteria have been met.] [include this text if "yes" selected in which case the Covered Bonds must be bearer Covered Bonds issued in NGCB form or registered Covered Bonds issued in NSS form] [Whilst the designation is specified as "no" at the date of this Pricing Supplement, should the Eurosystem eligibility criteria be amended in the future such that the Covered Bonds are capable of meeting them the Covered Bonds may then be deposited with Euroclear or Clearstream, Luxembourg as common safekeeper. Note that this does not necessarily mean that the Covered Bonds - 49-

56 will then be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem at any time during their life. Such recognition will depend upon the European Central Bank being satisfied that Eurosystem eligibility criteria have been met.] [this text may be appropriate to include if "no" is selected and the Covered Bonds are bearer Covered Bonds issued in NGCB form or registered Covered Bonds issued in NSS form] Clearing system(s) [and identification number, if applicable]: Delivery: Name(s) and address(es) of additional Paying Agent(s) / Swiss Paying Agent(s) (if any): [Name and address of VPS Paying Agent:] Euroclear / Clearstream, Luxembourg / SIX SIS Ltd, Olten, Switzerland) / VPS, the Norwegian Central Securities Depository (VPS identification number: [ ]) Delivery [against/free of] payment Not Applicable / Give name and address [only applicable to VPS Covered Bonds] 10. [Swiss Franc Covered Bonds only - DOCUMENTS AVAILABLE Copies of this Pricing Supplement and the Base Prospectus are available at [ ].] 11. [Swiss Franc Covered Bonds only - REPRESENTATIVE In accordance with Article 43 of the Listing Rules of the SIX Swiss Exchange, [ ] has been appointed by the Issuer as representative to lodge the listing application with the SIX Swiss Exchange.] 12. [Swiss Franc Covered Bonds only - NO MATERIAL ADVERSE CHANGE / MATERIAL CHANGES SINCE THE MOST RECENT ANNUAL FINANCIAL STATEMENTS Except as disclosed in the Base Prospectus, there has been no material adverse change in the financial condition or operations of the Issuer since [31 December 2012], which would materially affect its ability to carry out its obligations under the Covered Bonds.] 13. [Swiss Franc Covered Bonds only - LAW AND JURISDICTION English law, courts of England (see Condition [ ] of the "Terms and Conditions of the Covered Bonds").] - 50-

57 TERMS AND CONDITIONS OF THE COVERED BONDS The following are the Terms and Conditions of the Covered Bonds which as completed by the relevant Final Terms or (in the case of Exempt Covered Bonds only) as completed, amended and/or replaced by the relevant Pricing Supplement, will be applicable to each Series of Covered Bonds: The Covered Bonds are issued in accordance with a fiscal agency agreement (as amended and/or restated and/or replaced from time to time, the "Fiscal Agency Agreement") dated 17 June 2013 and made between Nordea Eiendomskreditt AS (the "Issuer"), Citibank, N.A., London Branch in its capacity as fiscal agent (the "Fiscal Agent", which expression shall include any successor to Citibank, N.A., London Branch in its capacity as such), Citibank, N.A., Zurich in its capacity as Swiss paying agent (the "Swiss Paying Agent", which expression shall include any successor to Citibank, N.A., Zurich in its capacity as such), and Citigroup Global Markets Deutschland AG as registrar (the "Registrar" in relation to any Series of Covered Bonds except for VPS Covered Bonds, which expression shall include any successor to Citigroup Global Markets Deutschland AG in its capacity as such) certain financial institutions named therein in their capacity as paying agents (the "Paying Agents", which expression shall include the Fiscal Agent, the Swiss Paying Agent and any substitute or additional paying agents appointed in accordance with the Fiscal Agency Agreement) and Nordea Bank Norge ASA in its capacity as Norwegian paying agent for VPS Covered Bonds (the "VPS Paying Agent"). The Covered Bonds have the benefit of a deed of covenant (the "Deed of Covenant") dated 17 June 2013 (as amended and/or restated and/or replaced from time to time), executed by the Issuer in relation to the Covered Bonds. Copies of the Fiscal Agency Agreement and the Deed of Covenant are available for inspection at the specified office of each of the Paying Agents and the Registrar. All persons from time to time entitled to the benefit of obligations under any Covered Bonds shall be deemed to have notice of and to be bound by all of the provisions of the Fiscal Agency Agreement and the Deed of Covenant insofar as they relate to the relevant Covered Bonds. References herein to "Exempt Covered Bonds" are to Covered Bonds for which no prospectus is required to be published under 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"). The Covered Bonds are issued in series (each a "Series") made up of one or more Tranches, and each Series will be the subject of a final terms (each a "Final Terms") or, in the case of Exempt Covered Bonds, a pricing supplement (the "Pricing Supplement") which, in either case, completes and (in the case of Exempt Covered Bonds only) completes, amends and/or replaces these Terms and Conditions (the "Conditions"). Covered Bonds may be denominated in Swiss francs and cleared through SIX SIS AG, Olten Switzerland ("Swiss Franc Covered Bonds" and "SIS", respectively). Swiss Franc Covered Bonds will be issued in bearer form and will be represented exclusively by a permanent global Covered Bond which shall be deposited with SIS, or such other depositary as may be approved by the SIX Regulatory Board of the SIX Swiss Exchange. For the purposes of Swiss Franc Covered Bonds, references in these Conditions "Euroclear" and/or "Clearstream, Luxembourg" shall be construed as including references to SIS, which expression shall include any other clearing institution recognised by the SIX Swiss Exchange with which the Permanent Global Covered Bond may be deposited from time to time), which shall be considered an additional or alternative clearing system for the purposes of these Conditions. Covered Bonds may also be cleared through the Norwegian Central Securities Depository which will be Verdipapirsentralen ASA ("VPS Covered Bonds" and the "VPS", respectively). The VPS Covered Bonds will be registered in uncertificated and dematerialised book-entry form with the VPS. VPS Covered Bonds registered in VPS are negotiable instruments and not subject to any restrictions on free negotiability under Norwegian law. As the VPS Covered Bonds will be in uncertificated and dematerialised book-entry form, the Terms and Conditions of the VPS Covered Bonds shall be deemed to be incorporated by reference in, and to form part of, the Deed of Covenant by which the VPS Covered Bonds are constituted

58 A registrar agreement dated 9 December 2008 (as amended, supplemented or replaced from time to time, the "VPS Registrar Agreement") has been entered into between the Issuer and the VPS Paying Agent in relation to the VPS Covered Bonds. References in these Conditions to Covered Bonds are to Covered Bonds of the relevant Series and any references to Coupons as defined below, are to Coupons relating to Covered Bonds of the relevant Series. References to "Exempt Covered Bonds" are to Covered Bonds for which no prospectus is required to be published under the Prospectus Directive. 1. Form and Denomination (a) Form Covered Bonds, other than VPS Covered Bonds, are issued in bearer form or registered form, as specified in the relevant Final Terms or Pricing Supplement and are serially numbered. The VPS Covered Bonds are issued in uncertificated and dematerialised book-entry form in accordance with the Norwegian Securities Register Act 2002 (lov om registrering av finansielle instrumenter juli nr. 64). (b) Form of Bearer Covered Bonds Covered Bonds issued in bearer form ("Bearer Covered Bonds"), other than Swiss Franc Covered Bonds, will be represented upon issue by a temporary global Covered Bond (a "Temporary Global Covered Bond") in substantially the form (subject to amendment and completion) scheduled to the Fiscal Agency Agreement. On or after the date which is forty days after the completion of the distribution of the Covered Bonds (the "Exchange Date") of the relevant Series and provided certification as to the beneficial ownership thereof as required by U.S. Treasury regulations (substantially in the form set out in the Temporary Global Covered Bond) has been received, interests in the Temporary Global Covered Bond may be exchanged for: (i) (ii) interests in a permanent global Covered Bond (a "Permanent Global Covered Bond") representing the Covered Bonds of that Series and in substantially the form (subject to amendment and completion) scheduled to the Fiscal Agency Agreement; or if so specified in the relevant Final Terms or Pricing Supplement, definitive Covered Bonds ("Definitive Covered Bonds") serially numbered and in substantially the form (subject to amendment and completion) scheduled to the Fiscal Agency Agreement. If any date on which a payment of interest is due on the Covered Bonds of a Series occurs whilst any of the Covered Bonds of that Series are represented by the Temporary Global Covered Bond, the related interest payment will be made on the Temporary Global Covered Bond only to the extent that certification as to the beneficial ownership thereof as required by U.S. Treasury regulations (in the form set out in the Temporary Global Covered Bond) has been received by Euroclear Bank S.A./N.V ("Euroclear") or Clearstream Banking, société anonyme ("Clearstream, Luxembourg") or by any other clearing system to which Covered Bonds or any interest therein may from time to time be credited. Payments of principal or interest (if any) on a Permanent Global Covered Bond will be made through Euroclear and Clearstream, Luxembourg without any requirement for certification. Interests in the Permanent Global Covered Bond will, unless the contrary is specified in the relevant Pricing Supplement, be exchangeable at the cost and expense of the Issuer, in whole (but not in part), at the option of the Holder of such Permanent Global Covered Bond for Definitive Covered Bonds if Euroclear or Clearstream, Luxembourg or any other relevant clearing system(s) is closed for business for a continuous period of 14 days (other than by reason of public holidays) or announces an intention to cease business permanently or does in fact do so. Whenever the Permanent Global Covered Bond is to be exchanged for Definitive Covered Bonds, the Issuer shall procure the - 52-

59 prompt delivery (free of charge to the Holder) of such Definitive Covered Bonds, duly authenticated and with Coupons and Talons attached (if so specified in the relevant Final Terms or Pricing Supplement), in an aggregate principal amount equal to the principal amount of the Permanent Global Covered Bond to the Holder of the Permanent Global Covered Bond against the surrender of the Permanent Global Covered Bond to or to the order of the Fiscal Agent within 30 days of the Holder requesting such exchange. If default is made by the Issuer in the required delivery of Definitive Covered Bonds and such default is continuing at 6.00 p.m. (London time) on the thirtieth day after the day on which the relevant notice period expires, such Permanent Global Covered Bond will become void in accordance with its terms but without prejudice to the rights of the Account Holders (as defined in the Deed of Covenant) with Euroclear and Clearstream, Luxembourg in relation thereto under the Deed of Covenant. Interest bearing Definitive Covered Bonds will, if so specified in the relevant Final Terms or Pricing Supplement, have attached thereto at the time of their initial delivery coupons ("Coupons"), presentation of which will be a prerequisite to the payment of interest in certain circumstances specified below provided that interest bearing Definitive Covered Bonds, if so specified in the relevant Final Terms or Pricing Supplement, have attached thereto at the time of initial delivery Coupons and one Talon for further Coupons (a "Talon", together with the Coupons in such case and where the context so permits, the "Coupons") entitling the Holder thereof to further Coupons and a further Talon. (c) Form of Registered Covered Bonds Covered Bonds issued in registered form ("Registered Covered Bonds") will be in substantially the form (subject to amendment and completion) scheduled to the Fiscal Agency Agreement. Each Tranche of registered Covered Bonds will be in the form of either individual Covered Bond Certificates ("Individual Covered Bond Certificates") or a global registered Covered Bond (a "Global Registered Covered Bond"), in each case as specified in the relevant Final Terms or Pricing Supplement. Global Registered Covered Bonds may be exchangeable for Individual Covered Bond Certificates in accordance with its terms. Registered Covered Bonds will not be exchangeable for Bearer Covered Bonds. (d) Form of Swiss Franc Covered Bonds Swiss Franc Covered Bonds will be denominated in Swiss francs, issued in bearer form and will be represented exclusively by a Permanent Global Covered Bond which shall be deposited by the Swiss Paying Agent with SIS, or such other depositary as may be approved by the SIX Regulatory Board of the SIX Swiss Exchange (SIS or such other intermediary, (the "Intermediary")). Once the Permanent Global Covered Bond is deposited with the Intermediary and entered into the accounts of one or more participants of the Intermediary, the Covered Bonds will constitute intermediated securities (Bucheffekten) ("Intermediated Securities") in accordance with the provisions of the Swiss Federal Intermediated Securities Act (Bucheffektengesetz). Each Holder (as defined in Condition 2 below) shall have a quotal co-ownership interest (Miteigentumsanteil) in the Permanent Global Covered Bond to the extent of his claim against the Issuer, provided that for so long as the Permanent Global Covered Bond remains deposited with the Intermediary the co-ownership interest shall be suspended and the Swiss Franc Covered Bonds may only be transferred or otherwise disposed of in accordance with the provisions of the Swiss Federal Intermediated Securities Act (Bucheffektengesetz), i.e., by the entry of the transferred Swiss Franc Covered Bonds in a securities account of the transferee. Neither the Issuer nor the Holders shall at any time have the right to effect or demand the conversion of the Permanent Global Covered Bond (Globalurkunde) into, or the delivery of, uncertificated securities (Wertrechte) or Definitive Covered Bonds (Wertpapiere). No physical delivery of the Swiss Franc Covered Bonds shall be made unless and until Definitive Covered Bonds (Wertpapiere) are printed. Definitive Covered Bonds may only be printed, in whole, but not in part, if the Swiss Paying Agent determines, in its - 53-

60 sole discretion, that the printing of the Definitive Covered Bonds (Wertpapiere) is necessary or useful. Should the Swiss Paying Agent so determine, it shall provide for the printing of Definitive Covered Bonds (Wertpapiere) without cost to the Holders. Upon delivery of the Definitive Covered Bonds (Wertpapiere), the Permanent Global Covered Bond will be cancelled and the Definitive Covered Bonds (Wertpapiere) shall be delivered to the Holders against cancellation of the relevant Swiss Franc Covered Bonds in the Holders' securities accounts. (e) Form of VPS Covered Bonds The VPS Covered Bonds shall be regarded as Registered Covered Bonds for the purposes of these Conditions save to the extent these Conditions are inconsistent with Norwegian laws, regulations and operating procedures applicable to and/or issued by VPS for the time being (the "VPS Rules"). No physical VPS Covered Bonds or certificates will be issued in respect of the VPS Covered Bonds and the provisions in these Conditions relating to presentation, surrendering or replacement of such physical Covered Bonds or certificates shall not apply to the VPS Covered Bonds. (f) Denomination of Bearer Covered Bonds Bearer Covered Bonds are in the denomination or denominations (each of which denomination is integrally divisible by each smaller denomination) specified in the Final Terms or Pricing Supplement. Bearer Covered Bonds of one denomination may not be exchanged for Bearer Covered Bonds of any other denomination. (g) Denomination of Registered Covered Bonds Registered Covered Bonds are in the denomination or denominations (each of which denomination is integrally divisible by each smaller denomination) specified in the Final Terms or Pricing Supplement. Registered Covered Bonds of one denomination may not be exchanged for Registered Covered Bonds of any other denomination. (h) Denomination of VPS Covered Bonds VPS Covered Bonds are in the denomination or denominations (each of which denomination is integrally divisible by each smaller denomination) specified in the Final Terms or Pricing Supplement. VPS Covered Bonds of one denomination may not be exchanged for VPS Covered Bonds of any other denomination. (i) Currency of Covered Bonds Covered Bonds may be denominated in any currency subject to compliance with all applicable legal and/or regulatory and/or central bank requirements. For the purposes of these Terms and Conditions (the "Conditions"), references to Covered Bonds shall, as the context may require, be deemed to be Temporary Global Covered Bonds, Permanent Global Covered Bonds, Definitive Covered Bonds or, as the case may be, Registered Covered Bonds. 2. Title (a) Title to Bearer Covered Bonds, Registered Covered Bonds and VPS Covered Bonds Title to the Bearer Covered Bonds (excluding Swiss Franc Covered Bonds) and Coupons passes by delivery. References herein to the "Covered Bond Holders" or "Holders" of Bearer Covered Bonds or Coupons signify the bearers of such Bearer Covered Bonds or such Coupons. Title to the Registered Covered Bonds passes by registration in the register which is kept by the Registrar. References herein to the "Covered Bond Holders" or "Holders" of Registered Covered Bonds signify the persons in whose names such Covered Bonds are so registered

61 Title to the VPS Covered Bonds shall pass by registration in the register (the "VPS Register") in accordance with the Norwegian VPS Rules. The Issuer shall be entitled to obtain information from VPS in accordance with the VPS Rules. Except as ordered by a court of competent jurisdiction or as required by law, the Holder (as defined below) of any VPS Covered Bonds shall be deemed to be and may be treated as its absolute owner for all purposes, whether or not it is overdue and regardless of any notice of ownership, trust or an interest in it and no person shall be liable for so treating the Holder. In these Conditions in relation to VPS Covered Bonds only, "Covered Bond Holder" or "Holder" means, as the context requires, the person in whose name a VPS Covered Bond is registered in the VPS Register and shall also include any person duly authorised to act as a nominee (forvalter) and registered as a holder of the VPS Covered Bonds. The Holder of any Covered Bond or Coupon will (except as otherwise required by applicable law or regulatory requirement) be treated as its absolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any interest thereof or therein, any writing thereon, or any theft or loss thereof) and no person shall be liable for so treating such Holder. (b) Transfer of Registered Covered Bonds and VPS Covered Bonds A Registered Covered Bond may, upon the terms and subject to the Conditions set forth in the Fiscal Agency Agreement, be transferred in whole or in part only (provided that such part is, or is an integral multiple of, the minimum denomination specified in the relevant Final Terms or Pricing Supplement) upon the surrender of the Registered Covered Bond to be transferred, together with the form of transfer endorsed on it duly completed and executed, at the specified office of the Registrar. A new Registered Covered Bond will be issued to the transferee and, in the case of a transfer of part only of a Registered Covered Bond, a new Registered Covered Bond in respect of the balance not transferred will be issued to the transferor. Each new Registered Covered Bond to be issued upon the transfer of Registered Covered Bonds will, upon the effective receipt of such form of transfer by the Registrar at its specified office, be available for delivery at the specified office of the Registrar. For these purposes, a form of transfer received by the Registrar during the period of fifteen London Banking Days, ending on the due date for any payment on the relevant Registered Covered Bonds shall be deemed not to be effectively received by the Registrar until the day following the due date for such payment. The issue of new Registered Covered Bonds on transfer will be effected without charge by or on behalf of the Issuer or the Registrar, but upon payment by the applicant of (or the giving by the applicant of such indemnity as the Registrar may require in respect of) any tax or other governmental charges which may be imposed in relation thereto. One or more VPS Covered Bonds may be transferred in accordance with the VPS Rules. In the case of an exercise of option resulting in VPS Covered Bonds of the same holding having different terms, separate VPS Covered Bonds registered with the VPS Register shall be issued in respect of those VPS Covered Bonds of that holding having the same terms. Such VPS Covered Bonds shall only be issued against surrender of the existing VPS Covered Bonds in accordance with the VPS Rules. Each new VPS Covered Bond to be issued pursuant to the above, shall be available for delivery within three business days of receipt of the request and the surrender of the VPS Covered Bonds for exchange. Delivery of the new VPS Covered Bond(s) shall be made to the same VPS account on which the original VPS Covered Bonds were registered. In this Condition 2(b) (Transfer of Registered Covered Bonds and VPS Covered Bonds) in relation to VPS Covered Bonds only, "business day" means a day, other than a Saturday or Sunday on which VPS is open for business. Exchange and transfer of VPS Covered Bonds on registration, transfer, partial redemption or exercise of an option shall be effected without charge by or on behalf of the Issuer or the VPS Paying Agent, but upon payment of any tax or other governmental charges that may be imposed in relation to it (or the giving of such indemnity as the VPS Paying Agent may require)

62 No Holder may require the transfer of a VPS Covered Bond to be registered during any closed period pursuant to the then applicable VPS Rules. (c) Swiss Franc Covered Bonds 3. Status The records of the Intermediary will determine the number of Covered Bonds held through each participant in that Intermediary. In respect of the Covered Bonds held in the form of Intermediated Securities, the holders of the Covered Bonds (the "Holders") will be the persons holding the Covered Bonds in a securities account (Effektenkonto) which is in their own name, or in the case of intermediaries (Verwahrungsstellen), the intermediaries (Verwahrungsstellen) holding the Covered Bonds for their own account in a securities account (Effektenkonto) which is in their name. The Covered Bonds are unsubordinated obligations issued in accordance with Norwegian Act No. 40 of June 10, 1988 on Financing Activity and Financial Institutions, Chapter 2, Sub-chapter IV and appurtenant regulations (together the "Covered Bond Legislation") and rank pari passu among themselves and with all other obligations of the Issuer that have been provided the same priority as debt instruments issued pursuant to the Covered Bond Legislation. To the extent that claims in relation to the Covered Bonds and relating derivative contracts are not met out of the assets of the Issuer that are covered in accordance with the Covered Bond Legislation, the residual claims will rank pari passu with the unsecured and unsubordinated obligations of the Issuer. 4. Interest Covered Bonds may be interest bearing or non-interest bearing, as specified in the relevant Final Terms or Pricing Supplement. In the case of non-interest bearing Covered Bonds, a reference price and yield will, unless otherwise agreed, be specified in the relevant Final Terms or Pricing Supplement. The Final Terms or Pricing Supplement in relation to each Series of interest bearing Covered Bonds shall specify which one of Conditions 4(1) (Interest Fixed Rate), 4(2) (Interest Floating Rate), 4(3) (Interest Swap Related (ISDA)) or 4(4) (Interest Other Rates) shall be applicable provided that Condition 4(5) (Interest Supplemental Provision) will be applicable to each Series of interest bearing Covered Bonds as specified therein, and provided further that Condition 4(7) (Interest Payments up to the Extended Maturity Date) will be applicable to each series of interest bearing and non-interest bearing Covered Bonds to which Condition 5(j) (Extension of maturity up to Extended Maturity Date) is specified as being applicable in the relevant Final Terms or Pricing Supplement, save, in each case, to the extent inconsistent with the relevant Pricing Supplement. (1) Interest Fixed Rate Covered Bonds in relation to which this Condition 4(1) is specified in the relevant Final Terms or Pricing Supplement as being applicable shall bear interest on its outstanding nominal amount from and including their date of issue to, but excluding the date of final maturity thereof (each date as specified in the relevant Final Terms or Pricing Supplement) at the rate or rates per annum specified in the relevant Final Terms or Pricing Supplement. Interest will be payable in arrear on such dates as are specified in the relevant Final Terms or Pricing Supplement and on the date of final maturity thereof. The amount of interest payable in respect of each Covered Bond for any period for which a Fixed Coupon Amount is not specified in the applicable Pricing Supplement shall be calculated by applying the Rate of Interest to the Calculation Amount, multiplying the product by the relevant Day Count Fraction, rounding the resulting figure to the nearest sub-unit of the Specified Currency (half a sub-unit being rounded upwards) and multiplying such rounded figures by a fraction equal to the Specified Denomination of such Covered Bond divided by the Calculation Amount. For the purposes of this Condition 4, a "subunit" means, in the case of any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, in the case of euro, means one cent. Interest may also be calculated on such other basis as may be specified in the relevant Pricing Supplement

63 (2) Interest Floating Rate (a) (b) (c) (d) Covered Bonds in relation to which this Condition 4(2) is specified in the relevant Final Terms or Pricing Supplement as being applicable shall bear interest on its outstanding nominal amount at the rates per annum determined in accordance with this Condition 4(2). Covered Bonds shall bear interest from and including their date of issue, to, but excluding the date of final maturity thereof (each date as specified in the relevant Final Terms or Pricing Supplement). Interest will be payable on each date (an "Interest Payment Date") which falls in such period of months or any other period as may be specified in the relevant Pricing Supplement after such date of issue or, as the case may be, after the preceding Interest Payment Date. If any Interest Payment Date would otherwise fall on a date which is not a Business Day (as defined in Condition 7 (Payments)), it shall be postponed to the next Business Day unless it would thereby fall into the next calendar month, in which event it shall be brought forward to the preceding Business Day unless it is specified in the relevant Final Terms or Pricing Supplement that if any Interest Payment Date would otherwise fall on the date which is not a Business Day, it shall be postponed to the next Business Day. If such date of issue or any succeeding Interest Payment Date falls on the last Business Day of the month, each subsequent Interest Payment Date shall be the last Business Day of the relevant month. Each period beginning on (and including) such date of issue and ending on (but excluding) the first Interest Payment Date and each period beginning on (and including) an Interest Payment Date and ending on (but excluding) the next Interest Payment Date is herein called an "Interest Period". The Final Terms or Pricing Supplement in relation to each Series of Covered Bonds in relation to which this Condition 4(2) is specified as being applicable shall specify which page (the "Relevant Screen Page") on the Reuters Screen or any other information vending service shall be applicable. For these purposes, "Reuters Screen" means the Reuter Money 3000 Service (or such other service as may be nominated as the information vendor for the purpose of displaying comparable rates in succession thereto). The rate of interest (the "Rate of Interest") applicable to such Covered Bonds for each Interest Period shall be determined by the Fiscal Agent or such other agent as may be specified in the relevant Final Terms or Pricing Supplement (the "Determination Agent") on the following basis: (i) (ii) (iii) (iv) where the Reference Rate is based on the London inter-bank offered rate ("LIBOR") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in the relevant currency for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date; where the Reference Rate is based on the Euro-zone inter-bank offered rate ("EURIBOR") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in euro for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date; where the Reference Rate is based on the Australian bank bill swap rate ("BBSW") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in Australian Dollars for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date where the Reference Rate is based on the New Zealand bank bill rate ("BKBM") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in New Zealand Dollars for a period of the duration of the relevant Interest Period on the - 57-

64 Relevant Screen Page as of the Relevant Time on the Interest Determination Date; (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) where the Reference Rate is based on the Canadian dealer offer rate ("CDOR") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in Canadian Dollars for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date; where the Reference Rate is based on the Copenhagen interbank offered rate ("CIBOR") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in Danish Krone for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date; where the Reference Rate is based on the Hong Kong interbank offered rate ("HIBOR") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in the relevant currency for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date; where the Reference Rate is based on the Johannesburg interbank agreed rate ("JIBAR") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in the relevant currency for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date; where the Reference Rate is based on the Moscow prime offered rate ("MOSPRIME") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in Russian Roubles for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date; where the Reference Rate is based on the Olso interbank offered rate ("NIBOR") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in Norwegian Kroner for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date; where the Reference Rate is based on the Stockholm interbank offered rate ("STIBOR") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in Swedish Krona for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date; where the Reference Rate is based on the Tokyo interbank offered rate ("TIBOR") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in Japanese Yen for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date; where the Reference Rate is based on the Mexican interbank equilibrium interest rate ("TIIE") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in Mexican Peso for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date; - 58-

65 (xiv) (xv) (xvi) (xvii) (xviii) where the Reference Rate is based on the Turkish Lira interbank offer rate ("TRLIBOR") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in Turkish Lira for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date; where the Reference Rate is based on the Warsaw interbank offered rate ("WIBOR") the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in Polish Zloty for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date; where the Reference Rate is based on the interbank offered rate in a Relevant Financial Centre specified in the relevant Pricing Supplement, the Determination Agent will determine the rate for deposits (or, as the case may require, the arithmetic mean of the rates for deposits) in the relevant currency for a period of the duration of the relevant Interest Period on the Relevant Screen Page as of the Relevant Time on the Interest Determination Date; if no such rate for deposits so appears (or, as the case may require, if fewer than two such rates for deposits so appear), the Determination Agent will request appropriate quotations and will determine the arithmetic mean of the rates at which deposits in the relevant currency are offered by four major banks in the Relevant Financial Centre at approximately the Relevant Time on the first day of the relevant Interest Period to prime banks in the interbank market of the Relevant Financial Centre in each such case for a period of the duration of the relevant Interest Period and in an amount that is representative for a single transaction in the relevant market at the relevant time; and if fewer than two rates are so quoted, the Determination Agent will determine the arithmetic mean of the rates quoted by major banks in the Relevant Financial Centre, selected by the Determination Agent at approximately the Relevant Time on the first day of the relevant Interest Period for loans in the relevant currency to leading European banks for a period of the duration of the relevant Interest Period and in an amount that is representative for a single transaction in the relevant market at the Relevant Time, and the Rate of Interest applicable to such Covered Bonds during each Interest Period will be the sum of the relevant margin (the "Relevant Margin") specified in the relevant Final Terms or Pricing Supplement and the rate (or, as the case may be, the arithmetic mean) so determined provided that, if the Determination Agent is unable to determine a rate (or, as the case may be, an arithmetic mean) in accordance with the above provisions in relation to any Interest Period, the Rate of Interest applicable to such Covered Bonds during such Interest Period will be the sum of the Relevant Margin and the rate (or, as the case may be, the arithmetic mean) last determined in relation to such Covered Bonds in respect of a preceding Interest Period. For the purpose of these Conditions "Euro-zone" means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty on European Union as amended, and as used in this Condition 4 (Interest), "business day" means a day on which commercial banks and foreign exchange markets settle payments in the financial centre(s) specified for each Interest Determination Date; "Interest Determination Date" means the date specified as such in the Final Terms or Pricing Supplement or if none is so specified, means (i) in the case of LIBOR, the second London Banking Day before the first day of the relevant Interest Period, or in the case of Covered Bonds denominated in Pounds Sterling, the first London Banking Day of the relevant Interest Period or in the case of euro-libor, the second TARGET Settlement Day before the first day of the relevant Interest Period, (ii) in the case of EURIBOR, the second TARGET Settlement Day before the first day of the relevant Interest Period, (iii) in the case of BBSW, the first Sydney business day of the relevant Interest Period, (iv) in the case of BKBM, the first Auckland and Wellington business day of the relevant Interest Period, (v) in the case of CDOR, the second Toronto business - 59-

66 day prior to the first day of the relevant interest period, (vi) in the case of CIBOR, the second Copenhagen business day prior to the first day of the relevant Interest Period, (vii) in the case of HIBOR, the first Hong Kong business day of the relevant Interest Period, (viii) in the case of JIBAR, the first Johannesburg business day of the relevant Interest Period; (ix) in the case of MOSPRIME, the first Moscow business day before the first day of the relevant Interest Period, (x) in the case of NIBOR, the second Oslo business day before the first day of the relevant Interest Period, (xi) in the case of STIBOR, the second Stockholm business day before the first day of the relevant interest period, (xii) in the case of TIBOR, the second Tokyo business day before the first day of the relevant Interest Period, (xiii) in the case of TIIE, the first Mexico City business day before the first day of the relevant Interest Period, (xiv) in the case of TRLIBOR, the second Istanbul business day before the first day of the relevant Interest Period, (xv) in the case of WIBOR, the first Warsaw business day of the relevant Interest Period, or, in the case of Exempt Covered Bonds, such other Interest Determination Date as shall be specified in the applicable Pricing Supplement; "Reference Rate" means (i) LIBOR; (ii) EURIBOR; (iii) BBSW, (iv) BKBM, (v) CDOR, (vi) CIBOR, (vii) HIBOR, (viii) JIBAR, (ix) MOSPRIME, (x) NIBOR, (xi) STIBOR, (xii) TIBOR, (xiii) TIIE, (xiv) TRLIBOR, (xv) WIBOR, in each case for the relevant Interest Period, as specified in the applicable Final Terms or Pricing Supplement, or, in the case of Exempt Covered Bonds, such other Reference Rate as shall be specified in the applicable Final Terms or Pricing Supplement; "Relevant Financial Centre" has the meaning given to such term in Condition 7(5)(c)(ii) and "Relevant Time" means the time specified as such in the Final Terms or Pricing Supplement or if none is so specified, means (i) in the case of LIBOR, a.m. London time, (ii) in the case of EURIBOR, a.m. Brussels time, (iii) in the case of BBSW, a.m. Sydney time, (iv) in the case of BKBM, a.m. Wellington time, (v) in the case of CDOR, a.m. Toronto time, (vi) in the case of CIBOR, a.m. Copenhagen time, (vii) in the case of HIBOR, a.m. Hong Kong time, (viii) in the case of JIBAR, p.m. Johannesburg time, (ix) in the case of MOSPRIME, p.m. Moscow time, (x) in the case of NIBOR, p.m. Oslo time, (xi) in the case of STIBOR, a.m. Stockholm time, (xii) in the case of TIBOR, a.m. Tokyo time, (xiii) in the case of TIIE, 2.30 p.m. Mexico City time, (xiv) in the case of TRLIBOR, a.m. Istanbul time, (xv) in the case of WIBOR, a.m. Warsaw time or, in the case of Exempt Covered Bonds, such other time as shall be specified in the applicable Pricing Supplement. (e) The Determination Agent will, as soon as practicable after determining the Rate of Interest in relation to each Interest Period, calculate the amount of interest (the "Interest Amount") payable in respect of the Calculation Amount specified in the relevant Final Terms or Pricing Supplement for the relevant Interest Period. The amount of interest shall be calculated by applying the Rate of Interest for such Interest Period to the Calculation Amount, multiplying the product by the actual number of days in the Interest Period concerned divided by 360 (or, in the case of the Covered Bonds denominated in Pounds Sterling, 365 (or, if any portion of such Interest Period falls in a leap year, the sum of (i) the actual number of days in that portion divided by 366 and (ii) the actual number of days in the remainder of such Interest Period divided by 365)) or by such other number as may be specified in the relevant Final Terms or Pricing Supplement, rounding the resulting figure to the nearest sub unit of the currency in which such Covered Bonds are denominated or, as the case may be, in which such interest is payable (one half of any such sub unit being rounded upwards) and multiplying such rounded figure by a fraction equal to the Specified Denomination of the relevant Covered Bond divided by the Calculation Amount. Where the Specified Denomination of such a Covered Bond comprises more than one Calculation Amount, the Interest Amount payable in respect of such Covered Bond shall be the aggregate of the amounts (determined in the manner above) for each Calculation Amount comprising the Specified Denomination, without any further rounding. (3) Interest Swap Related (ISDA) (a) Covered Bonds in relation to which this Condition 4(3) is specified in the relevant Final Terms or Pricing Supplement as being applicable shall bear interest at the rates per annum determined in accordance with this Condition 4(3)

67 (b) Each such Covered Bond shall bear interest from and including its date of issue to, but excluding the date of final maturity thereof (each date as specified in the relevant Final Terms or Pricing Supplement). Interest will be payable on such dates and in such amounts as would have been payable (regardless of any event of default or termination event thereunder) by the Issuer had it entered into a swap transaction (to which a Multi Currency Cross Border Master Agreement and the 2006 ISDA Definitions (as amended and updated from time to time applies), each as published by the International Swaps and Derivatives Association, Inc.,) with the Holder of such Covered Bonds under which: (4) Interest Other Rates the Issuer was the Fixed Rate Payer or, as the case may be, the Floating Rate Payer; the Determination Agent was the Calculation Agent; the Effective Date was such date of issue; the principal amount of such Covered Bond was the Calculation Amount; and all other terms were as specified in the relevant Final Terms or Pricing Supplement. Covered Bonds in relation to which this Condition 4(4) is specified in the relevant Pricing Supplement as being applicable shall bear interest at the rates per annum, or payable in the amounts and in the manner determined in accordance with the relevant Pricing Supplement. (5) Interest Supplemental Provision (a) (b) Condition 4(5)(b) (Notification of Rates of Interest, Interest Amounts and Interest Payment Dates) shall be applicable in relation to Covered Bonds in relation to which Condition 4(2) (Interest Floating Rate) is specified in the relevant Final Terms or Pricing Supplement as being applicable and Condition 4(5)(c) shall be applicable in relation to all interest bearing Covered Bonds. Notification of Rates of Interest, Interest Amounts and Interest Payment Dates The Determination Agent will cause each Rate of Interest, floating rate, Interest Payment Date, final day of a calculation period, Interest Amount or floating amount determined or calculated by it to be notified to the Issuer and the Fiscal Agent. The Fiscal Agent will cause all such determinations or calculations to be notified to the other Paying Agents and, in the case of Registered Covered Bonds, the Registrar (from whose respective specified offices such information will be available) as soon as practicable after such determination or calculated but in any event not later than the fourth London Banking Day thereafter and, in the case of Covered Bonds admitted to the listing on the Official List of the Irish Stock Exchange and to trading on its Main Securities Market, cause each such Rate of Interest, floating rate, Interest Amount or floating amount to be notified to the Irish Stock Exchange. The Determination Agent will be entitled to amend any Interest Amount, floating amount, Interest Payment Date or last day of a calculation period (or to make appropriate alternative arrangements by way of adjustment) without notice in the event of the extension or abbreviation of the relevant Interest Period or calculation period. For the purposes of these Conditions, "London Banking Day" means a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in London and "TARGET2 Settlement Day" has the meaning set out below. (c) The determination by the Determination Agent of all rates of interest and amounts of interest for the purposes of this Condition 4 shall, in the absence of manifest error, be final and binding on all parties. (6) Non Interest Bearing Covered Bonds - 61-

68 If any principal amount in respect of any Covered Bond which is non interest bearing is not paid when due, interest shall accrue from and including such due date on the overdue amount at a rate per annum (expressed as a percentage per annum) equal to the Accrual Yield defined in the Final Terms or Pricing Supplement or at such other rate as may be specified for this purpose in the Pricing Supplement until but excluding the date on which, upon due presentation or surrender of the relevant Covered Bond (if required), the relevant payment is made or, if earlier (except where presentation or surrender of the relevant Covered Bond is not required as a precondition of payment), the seventh day after the date on which, the Fiscal Agent or the Registrar, as the case may be, having received the funds required to make such payment, gives notice to the Holders of the Covered Bonds in accordance with Condition 12 (Notices) that the Fiscal Agent or the Registrar, as the case may be has received the required funds, (except to the extent that there is failure in the subsequent payment thereof to the relevant Holder). The amount of any such interest shall be calculated by multiplying the product of the Accrual Yield and the overdue sum by the Day Count Fraction as specified for this purpose in the Final Terms or Pricing Supplement. (7) Interest Payments up to the Extended Maturity Date If an Extended Maturity Date is specified in the applicable Final Terms or Pricing Supplement as applying to a Series of Covered Bonds and the maturity of those Covered Bonds is extended beyond the Maturity Date in accordance with Condition 5(j) (Extension of maturity up to Extended Maturity Date): (a) (b) (c) the Covered Bonds shall bear interest from (and including) the Maturity Date to (but excluding) the earlier of the relevant Interest Payment Date after the Maturity Date on which the Covered Bonds are redeemed in full and the Extended Maturity Date. Interest shall be payable on the Covered Bonds at the rate specified in the applicable Final Terms or Pricing Supplement on the principal amount outstanding of the Covered Bonds in arrear on each monthly Interest Payment Date after the Maturity Date in respect of the interest period beginning on (and including) the Maturity Date and ending on (but excluding) the first Interest Payment Date after the Maturity Date and each subsequent interest period beginning on (and including) an Interest Payment Date and ending on (but excluding) the next Interest Payment Date, subject (in the case of Exempt Covered Bonds only) as otherwise provided in the applicable Pricing Supplement. The final Interest Payment Date shall fall no later than the Extended Maturity Date; the rate of interest payable from time to time under Condition 4(7)(a) will be as specified in the applicable Final Terms or Pricing Supplement and, where applicable, determined by the Fiscal Agent or, where the applicable Final Terms or Pricing Supplement specify a Determination Agent, the Determination Agent so specified, three Business Days after the Maturity Date in respect of the first such interest period and thereafter as specified in the applicable Final Terms or Pricing Supplement; and in the case of Covered Bonds which are non-interest bearing Covered Bonds up to (and including) the Maturity Date, for the purposes of this Condition 4(7) the principal amount outstanding shall be the total amount otherwise payable by the Issuer on the Maturity Date less any payments made by the Issuer in respect of such amount in accordance with these Conditions. (8) Interest - Definitions For the purposes of these Conditions: "Business Day Convention", in relation to any particular date, has the meaning given in the relevant Final Terms or Pricing Supplement and, if so specified in the relevant Final Terms or Pricing Supplement, may have different meanings in relation to different dates and, in this context, the following expressions shall have the following meanings: (a) "Following Business Day Convention" means that the relevant date shall be postponed to the first following day that is a Business Day; - 62-

69 (b) (c) "Modified Following Business Day Convention" or "Modified Business Day Convention" means that the relevant date shall be postponed to the first following day that is a Business Day unless that day falls in the next calendar month in which case that date will be the first preceding day that is a Business Day; "Preceding Business Day Convention" means that the relevant date shall be brought forward to the first preceding day that is a Business Day; (d) "FRN Convention", "Floating Rate Convention" or "Eurodollar Convention" means that each relevant date shall be the date which numerically corresponds to the preceding such date in the calendar month which is the number of months specified in the relevant Final Terms or Pricing Supplement as the Specified Period after the calendar month in which the preceding such date occurred provided, however, that: (i) (ii) (iii) if there is no such numerically corresponding day in the calendar month in which any such date should occur, then such date will be the last day which is a Business Day in that calendar month; if any such date would otherwise fall on a day which is not a Business Day, then such date will be the first following day which is a Business Day unless that day falls in the next calendar month, in which case it will be the first preceding day which is a Business Day; and if the preceding such date occurred on the last day in a calendar month which was a Business Day, then all subsequent such dates will be the last day which is a Business Day in the calendar month which is the specified number of months after the calendar month in which the preceding such date occurred; and (e) "No Adjustment" or "unadjusted" means that the relevant date shall not be adjusted in accordance with any Business Day Convention. "Calculation Amount" has the meaning given in the relevant Final Terms or Pricing Supplement; "Day Count Fraction" means, in respect of the calculation of an amount for any period of time (the "Calculation Period"), such day count fraction as may be specified in these Conditions or the relevant Pricing Supplement and: (i) if "Actual/Actual (ICMA)" is so specified, means: (a) (b) where the Calculation Period is equal to or shorter than the Regular Period during which it falls, the actual number of days in the Calculation Period divided by the product of (1) the actual number of days in such Regular Period and (2) the number of Regular Periods in any year; and where the Calculation Period is longer than one Regular Period, the sum of: (A) (B) the actual number of days in such Calculation Period falling in the Regular Period in which it begins divided by the product of (1) the actual number of days in such Regular Period and (2) the number of Regular Periods in any year; and the actual number of days in such Calculation Period falling in the next Regular Period divided by the product of (1) the actual number of days in such Regular Period and (2) the number of Regular Periods in any year; (ii) if "Actual/Actual (ISDA)" is so specified, means the actual number of days in the Calculation Period divided by 365 (or, if any portion of the Calculation Period falls in - 63-

70 a leap year, the sum of (A) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Calculation Period falling in a non leap year divided by 365); (iii) (iv) (v) (vi) if "Actual/365 (Fixed)" is so specified, means the actual number of days in the Calculation Period divided by 365; if "Actual/365 (Sterling)" is so specified, means the actual number of days in the Calculation Period divided by 365 or, in the case of an Interest Payment date falling in a leap years, 366; if "Actual/360" is so specified, means the actual number of days in the Calculation Period divided by 360; if "30/360", "360/360" or "Bond Basis" is so specified, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows Day Count Fraction = [ 360x( Y2 Y1 )] + [30x( M 2 M 1)] + ( D2 D1 ) 360 where: "Y 1 " is the year, expressed as a number, in which the first day of the Calculation Period falls; "Y 2 " is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls; "M 1 " is the calendar month, expressed as a number, in which the first day of the Calculation Period falls; "M 2 " is the calendar month, expressed as number, in which the day immediately following the last day included in the Calculation Period falls; "D 1 " is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D 1 will be 30; and "D 2 " is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31 and D1 is greater than 29, in which case D 2 will be 30"; (vii) if "30E/360" or "Eurobond Basis" is so specified, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows Day Count Fraction = [ 360x( Y2 Y1 )] + [30x( M 2 M1)] + ( D2 D1 ) 360 where: "Y 1 " is the year, expressed as a number, in which the first day of the Calculation Period falls; "Y 2 " is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls; "M 1 " is the calendar month, expressed as a number, in which the first day of the Calculation Period falls; "M 2 " is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls; "D 1 " is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D 1 will be 30; and - 64-

71 "D 2 " is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31, in which case D 2 will be 30; and (viii) if "30E/360 (ISDA)" is so specified, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows: [ 360x( Y2 Y1 )] + [30x( M 2 M1)] + ( D2 D1 ) Day Count Fraction = 360 where: "Y 1 " is the year, expressed as a number, in which the first day of the Calculation Period falls; "Y 2 " is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls; "M 1 " is the calendar month, expressed as a number, in which the first day of the Calculation Period falls; "M 2 " is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls; "D 1 " is the first calendar day, expressed as a number, of the Calculation Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case D 1 will be 30; and "D 2 " is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would be 31, in which case D 2 will be 30, provided, however, that in each such case the number of days in the Calculation Period is calculated from and including the first day of the Calculation Period to but excluding the last day of the Calculation Period; "Interest Commencement Date" means the date of issue of the Covered Bonds (as specified in the Final Terms or Pricing Supplement) or such other date as may be specified as such in the Final Terms or Pricing Supplement; "Regular Period" means: (i) (ii) (iii) in the case of Covered Bonds where interest is scheduled to be paid only by means of regular payments, each period from and including the Interest Commencement Date to but excluding the first Interest Payment Date and each successive period from and including one Interest Payment Date to but excluding the next Interest Payment Date; in the case of Covered Bonds where, apart from the first Interest Period, interest is scheduled to be paid only by means of regular payments, each period from and including a Regular Date falling in any year to but excluding the next Regular Date, where "Regular Date" means the day and month (but not the year) on which any Interest Payment Date falls; and in the case of Covered Bonds where, apart from one Interest Period other than the first Interest Period, interest is scheduled to be paid only by means of regular payments, each period from and including a Regular Date falling in any year to but excluding the next Regular Date, where "Regular Date" means the day and month (but not the year) on which any Interest Payment Date falls other than the Interest Payment Date falling at the end of the irregular Interest Period; "TARGET2" means the Trans-European Automated Real-Time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007; and - 65-

72 "TARGET2 Settlement Day" means any day on which TARGET2 is open for the settlement of payments in euro. 5. Redemption and Purchase (a) Redemption at Maturity Unless previously redeemed, or purchased and cancelled, Covered Bonds shall be redeemed at their principal amount (or at such other redemption amount as may be specified in the relevant Pricing Supplement) on the date or dates (or, in the case of Covered Bonds which bear interest at a floating rate of interest, on the date or dates upon which interest is payable) specified in the relevant Final Terms or Pricing Supplement. (b) Early Redemption for Taxation Reasons If, in relation to any Series of Covered Bonds, as a result of any change in the laws of Norway or of any political subdivision thereof or any authority or agency therein or thereof having power to tax or in the interpretation or administration of any such laws or regulations which becomes effective on or after the date of issue of such Covered Bonds or any earlier date specified in the relevant Final Terms or Pricing Supplement on the occasion of the next payment due in respect of such Covered Bonds the Issuer would be required to pay additional amounts as provided in Condition 6 (Taxation), the Issuer may, at its option having given not less than thirty nor more than sixty days' notice (ending, in the case of Covered Bonds which bear interest at a floating rate, on a day upon which interest is payable) to the Holders in accordance with Condition 12 (Notices) (which notice shall be irrevocable) redeem in whole (but not, unless and to the extent that the Final Terms or the relevant Pricing Supplement specifies otherwise, in part) the Covered Bonds of the relevant Series at its principal amount or such other redemption amount as may be specified in the relevant Pricing Supplement or at the redemption amount referred to in Condition 5(f) (Early Redemption of non interest bearing Covered Bonds), together with accrued but unpaid interest ("Accrued Interest") (if any) thereon. (c) Optional Early Redemption (Call) If this Condition 5(c) is specified in the relevant Final Terms or Pricing Supplement as being applicable, then the Issuer may, upon the expiry of the appropriate notice, redeem in whole (but not, unless and to the extent that the relevant Final Terms or Pricing Supplement specifies otherwise, in part), the Covered Bonds of the relevant Series at its principal amount or such other redemption amount as may be specified in the relevant Final Terms or Pricing Supplement), together with Accrued Interest (if any) thereon. Covered Bonds denominated in Sterling may not be redeemed prior to one year and one day from the date of issue. The appropriate notice referred to in this Condition 5(c) is a notice given by the Issuer to the Fiscal Agent, the Registrar (in the case of Registered Covered Bonds) and the Holders of the Covered Bonds of the relevant Series, which notice shall be signed by two duly authorised officers of the Issuer and shall specify: the Series of Covered Bonds subject to redemption; whether such Series is to be redeemed in whole or in part only and, if in part only, the aggregate principal amount of the Covered Bonds of the relevant Series which are to be redeemed; the due date for such redemption, which shall be not less than thirty days (as more particularly specified in the relevant Final Terms or Pricing Supplement) after the date on which such notice is validly given and which is, in the case of Covered Bonds which bear interest at a floating rate, a date upon which interest is payable; and the amount at which such Covered Bonds are to be redeemed, which shall be their principal amount (or such other amount as may be specified in the - 66-

73 relevant Final Terms or Pricing Supplement) together with, in the case of Covered Bonds which bear interest, Accrued Interest thereon. Any such notice shall be irrevocable, and the delivery thereof shall oblige the Issuer to make the redemption therein specified. (d) Partial Redemption If the Covered Bonds of a Series are to be redeemed in part only on any date in accordance with Condition 5(c) (Optional Early Redemption (Call)): (i) (ii) in the case of Bearer Covered Bonds, the Covered Bonds to be redeemed shall be drawn by lot in such European city as the Fiscal Agent may specify, or identified in such other manner or in such other place as the Fiscal Agent may approve and deem appropriate and fair, subject always to compliance with all applicable laws and the rules of each listing authority, stock exchange and/or quotation system (if any) by which the Covered Bonds have then been admitted to listing, trading and/or quotation and, if applicable, the rules of Euroclear and Clearstream, Luxembourg (to be reflected in the records of Euroclear and Clearstream, Luxembourg as either a pool factor or a reduction in nominal amount, at their discretion); and in the case of Registered Covered Bonds, the Covered Bonds shall be redeemed pro rata to their principal amounts, subject always to compliance with all applicable laws and the rules of each listing authority, stock exchange and/or quotation system (if any) by which the Covered Bonds have then been admitted to listing, trading and/or quotation and, if applicable, the rules of Euroclear and Clearstream, Luxembourg. (e) Optional Early Redemption (Put) If this Condition 5(e) is specified in the relevant Final Terms or Pricing Supplement as being applicable, then the Issuer shall, upon the exercise of the relevant option by the Holder of any Covered Bond of the relevant Series, redeem such Covered Bond on the date or the next of the dates specified in the relevant Final Terms or Pricing Supplement at its principal amount (or such other redemption amount as may be specified in the relevant Pricing Supplement), together with Accrued Interest (if any) thereon. In order to exercise such option, the Holder must, not less than forty five days before the date so specified in the relevant Final Terms or Pricing Supplement, deposit the relevant Covered Bond (together, in the case of an interest bearing Definitive Covered Bond, with any unmatured Coupons appertaining thereto) with, in the case of a Bearer Covered Bond, any Paying Agent or, in the case of a Registered Covered Bond, the Registrar together with a duly completed redemption notice in the form which is available from the specified office of any of the Paying Agents or, as the case may be, the Registrar. (f) Early Redemption of non interest bearing Covered Bonds The redemption amount payable in respect of any non interest bearing Covered Bond upon redemption of such Covered Bond pursuant to Condition 5(b) (Early Redemption for Taxation Reasons), or, if applicable Condition 5(c) (Optional Early Redemption (Call)) or 5(e) (Optional Early Redemption (Put)) shall be the Amortised Face Amount (calculated as provided below) of such Covered Bonds. (i) Subject to the provisions of sub paragraph (ii) below, the Amortised Face Amount of any such Covered Bond shall be the sum of (A) the Reference Price specified in the relevant Final Terms or Pricing Supplement and (B) the aggregate amortisation of the difference between the principal amount of such Covered Bond from its date of issue to the date on which such Covered Bond becomes due and payable at a rate per annum (expressed as a percentage) equal to the Accrual Yield specified in the relevant Final Terms or Pricing Supplement compounded annually and the Reference Price. Where such calculation is to be made for a period of less than one year, it shall be made on the basis of a 360 day year consisting of 12 months of 30 days each

74 (ii) If the redemption amount payable in respect of any such Covered Bond upon its redemption pursuant to Condition 5(b) (Early Redemption for Taxation Reasons), or, if applicable Condition 5(c) (Optional Early Redemption (Call)) or 5(e) (Optional Early Redemption (Put)) is not paid when due, the redemption amount due and payable in respect of such Covered Bond shall be the Amortised Face Amount of such Covered Bond as defined in sub paragraph (i) above, except that sub paragraph shall have effect as though the reference therein to the date on which the Covered Bond becomes due and payable were replaced by a reference to the Relevant Date. The calculation of the Amortised Face Amount in accordance with this sub paragraph will continue to be made (as well after as before judgment), until the Relevant Date unless the Relevant Date falls on or after the Maturity Date, in which case the amount due and payable shall be the principal amount of such Covered Bond. (g) Purchase of Covered Bonds The Issuer and its subsidiaries (if any) may at any time purchase Covered Bonds in the open market or otherwise and at any price provided that, in the case of interest bearing Definitive Covered Bonds, any unmatured Coupons appertaining thereto are purchased therewith. Such purchased Covered Bonds may be cancelled, reissued or resold. (h) Cancellation of Redeemed and Purchased Covered Bonds All Covered Bonds redeemed or purchased for cancellation in accordance with this Condition 5 and, in the case of interest bearing Definitive Covered Bonds, any unmatured Coupons attached thereto or surrendered or purchased for cancellation therewith will be cancelled and may not be reissued or resold. References in this Condition 5 to the purchase of Covered Bonds by the Issuer or its subsidiaries (if any) shall not include the purchase of Covered Bonds in the ordinary course of business of dealing in securities or the purchase of Covered Bonds otherwise than as beneficial owner. (i) Procedure for Payment upon Redemption Any redemption of the VPS Covered Bonds pursuant to this Condition 5 shall be in accordance with the VPS Rules. (j) Extension of maturity up to Extended Maturity Date (i) (ii) An Extended Maturity Date may be specified in the applicable Final Terms or Pricing Supplement as applying to the relevant Series of Covered Bonds. If an Extended Maturity Date is specified in the applicable Final Terms or Pricing Supplement as applying to a Series of Covered Bonds and the Issuer fails to redeem the relevant Covered Bonds in full on the Maturity Date or within three Business Days thereafter, the maturity of the outstanding Covered Bonds and the date on which such Covered Bonds will be due and repayable for the purposes of these Conditions will be automatically extended up to but no later than the Extended Maturity Date, subject as otherwise provided for in the applicable Pricing Supplement. In that event, the Issuer may redeem all or any part of the principal amount outstanding of the Covered Bonds on an Interest Payment Date falling in any month after the Maturity Date up to and including the Extended Maturity Date or as otherwise provided for in the applicable Pricing Supplement. The Issuer shall give notice to the Covered Bondholders (in accordance with Condition 12 (Notices)) and the Paying Agents of its intention to redeem all or any of the principal amount outstanding of the Covered Bonds at least five Business Days prior to the relevant Interest Payment Date or, as applicable, the Extended Maturity Date. Any failure by the Issuer to notify such persons shall not affect the validity or effectiveness of any redemption by the Issuer on the relevant Interest Payment Date or, as applicable, the Extended Maturity Date, or give rise to rights to any such person

75 (iii) (iv) (v) (vi) (vii) In the case of Covered Bonds which are non-interest bearing up to (and including) the Maturity Date to which an Extended Maturity Date is specified under the applicable Final Terms or Pricing Supplement, for the purposes of this Condition 5(j) the principal amount outstanding shall be the total amount otherwise payable by the Issuer on the Maturity Date less any payments made by the Issuer in respect of such amount in accordance with these Conditions. Any extension of the maturity of Covered Bonds under this Condition 5(j) shall be irrevocable. Where this Condition 5(j) applies, any failure to redeem the Covered Bonds on the Maturity Date or any extension of the maturity of Covered Bonds under this Condition 5(j), shall not constitute a default, an event of default or acceleration of payment or other similar condition or event (however described) for any purpose or give any Covered Bondholder any right to receive any payment of interest, principal or otherwise on the relevant Covered Bonds other than as expressly set out in these Conditions. In the event of the extension of the maturity of Covered Bonds under this Condition 5(j), rates of interest, interest periods and interest payment dates on the Covered Bonds from (and including) the Maturity Date to (but excluding) the Extended Maturity Date shall be determined and made in accordance with the applicable Final Terms or Pricing Supplement and Condition 4(7) (Interest Payments up to the Extended Maturity Date). If the Issuer redeems part and not all of the principal amount outstanding of Covered Bonds on any Interest Payment Date falling after the Maturity Date, the redemption proceeds shall be applied rateably across the Covered Bonds and the principal amount outstanding on the Covered Bonds shall be reduced by the level of that redemption. If the maturity of any Covered Bonds is extended up to the Extended Maturity Date in accordance with this Condition 5(j), subject as otherwise provided for in the applicable Pricing Supplement, for so long as any of those Covered Bonds remains outstanding, the Issuer shall not issue any further Covered Bonds, unless the proceeds of issue of such further Covered Bonds are applied by the Issuer on issue to redeem in whole or in part the relevant Covered Bonds in accordance with the terms hereof. 6. Taxation (a) All amounts payable (whether in respect of principal, redemption amount, interest or otherwise) in respect of the Covered Bonds will be made free and clear of and without withholding or deduction for, or on account of, any present or future taxes or duties of whatever nature imposed or levied by or on behalf of Norway or any political subdivision thereof or any authority or agency therein or thereof having power to tax, unless the withholding or deduction of such taxes or duties is required by law. In that event, the Issuer will pay such additional amounts as may be necessary in order that the net amounts receivable by the Holders after such withholding or deduction shall equal the respective amounts which would have been receivable in the absence of such withholding or deduction; except that no such additional amounts shall be payable in respect of payment in respect of any Bearer Covered Bond or Coupon presented for payment: (i) (ii) (iii) in Norway; or by or on behalf of a Holder who is liable to such taxes or duties in respect of such Bearer Covered Bond or Coupon by reason of such Holder having some connection with Norway other than the mere holding of such Bearer Covered Bond or Coupon; or more than thirty days after the Relevant Date, except to the extent that the relevant Holder would have been entitled to such additional amounts on presenting the same for payment on the expiry of such period of thirty days; or - 69-

76 (iv) (v) (vi) by or on behalf of, a Holder who would not be liable or subject to the withholding or deduction by making a declaration of non residence or other similar claim for exemption to the relevant tax authority; or where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced in order to conform to, such Directive; or by or on behalf of a Holder who would have been able to avoid such withholding or deduction by presenting the relevant Covered Bond or Coupon to another Paying Agent in a Member State of the European Union, and except that no such additional amounts shall be payable in respect of payment in respect of any Registered Covered Bond the Holder of which is liable to such taxes or duties by reason of his having some connection with Norway, as the case may be, other than the mere holding of such Registered Covered Bond. (b) (c) For the purposes of these Conditions, the "Relevant Date" means the date on which such payment first becomes due and payable, but if the full amount of the moneys payable has not been received by the Fiscal Agent or, as the case may be, the Registrar (or, in respect of Swiss Franc Covered Bonds only, the Swiss Paying Agent) on or prior to such due date, it means the first date on which the full amount of such moneys has been so received and notice to that effect shall have been duly given to the Holders of the Covered Bonds of the relevant Series in accordance with Condition 12 (Notices). Any reference in these Conditions to principal, redemption amount and/or interest in respect of the Covered Bonds shall be deemed also to refer to any additional amounts which may be payable under this Condition 6 or any undertaking given in addition thereto or in substitution therefore. 7. Payments (1) Payments Bearer Covered Bonds (a) (b) (c) This Condition 7(1) is applicable in relation to Bearer Covered Bonds. Payment of amounts (including Accrued Interest) due on the redemption of Bearer Covered Bonds will be made against presentation and, save in the case of a partial redemption by reason of insufficiency of funds, surrender of the relevant Bearer Covered Bonds to or to the order of any of the Paying Agents. Payment of amounts due in respect of interest on Bearer Covered Bonds will be made: (i) (ii) (iii) in the case of a Temporary Global Covered Bond or Permanent Global Covered Bond, against presentation of the relevant Temporary Global Covered Bond or Permanent Global Covered Bond at the specified office of any of the Paying Agents outside the United States and, in the case of a Temporary Global Covered Bond, upon due certification as required therein; in the case of Definitive Covered Bonds without Coupons attached thereto at the time of their initial delivery, against presentation of the relevant Definitive Covered Bonds at the specified office of any of the Paying Agents outside the United States; and in the case of Definitive Covered Bonds delivered with Coupons attached thereto at the time of their initial delivery, against surrender of the relevant Coupons at the specified office of any of the Paying Agents outside the United States. (d) If the due date for payment of any amount due (whether in respect of principal, interest or otherwise) in respect of any Bearer Covered Bonds is not a Business Day, then the Holder thereof will not be entitled to payment thereof until the next following such - 70-

77 Business Day and no further payment shall be due in respect of such delay save in the event that there is a subsequent failure to pay in accordance with these Conditions. (e) Each Definitive Covered Bond initially delivered with Coupons attached thereto should be surrendered for final redemption together with all unmatured Coupons appertaining thereto, failing which: (i) (ii) in the case of Definitive Covered Bonds which bear interest at a fixed rate or rates, the amount of any missing unmatured Coupons will be deducted from the amount otherwise payable on such final redemption, the amount so deducted being payable against surrender of the relevant Coupon at the specified office of any of the Paying Agents at any time prior to the tenth anniversary of the due date of such final redemption or, if later, the fifth anniversary of the date of maturity of such Coupon; and in the case of Definitive Covered Bonds which bear interest at, or at a margin above or below, a floating rate, all unmatured Coupon relating to such Definitive Covered Bonds (whether or not surrendered therewith) shall become void and no payment shall be made thereafter in respect of them. (2) Payments Registered Covered Bonds (a) (b) (c) (d) This Condition 7(2) is applicable in relation to Registered Covered Bonds. Payments of the amounts (including Accrued Interest) due on the final redemption of Registered Covered Bonds will be made against presentation and, save in the case of a partial redemption by reason of insufficiency of funds, surrender of the relevant Registered Covered Bonds at the specified office of the Registrar. If the due date for payment of the final redemption amount of Registered Covered Bonds is not a Business Day, the Holder thereof will not be entitled to payment thereof until the next following such Business Day and no further payment shall be due in respect of such delay save in the event that there is a subsequent failure to pay in accordance with these Conditions. Payment of amounts (whether principal, interest or otherwise) due (other than in respect of the final redemption of Registered Covered Bonds) in respect of Registered Covered Bonds will be paid to the Holders thereof (or, in the case of joint Holders, the first named) as appearing in the register kept by the Registrar as at opening of business (London time) on the fifteenth London Banking Day before the due date for such payment (the "Record Date"). Notwithstanding the provisions of Condition 7(5)(b), payments of interest due (other than in respect of the final redemption of Registered Covered Bonds) will be made by a cheque drawn on a bank in the Relevant Financial Centre and posted to the address (as recorded in the register held by the Registrar) of the Holder thereof, (or, in the case of joint Holders, the first named) on the Business Day immediately preceding the relevant date for payment unless prior to the relevant Record Date the Holder thereof (or, in the case of joint Holders, the first named) has applied to the Registrar and the Registrar has acknowledged such application for payment to be made to a designated account (in the case aforesaid, a non resident account with an authorised foreign exchange bank). (3) Payments Swiss Franc Covered Bonds This Condition 7(3) is applicable in relation to Swiss Franc Covered Bonds. Payment of principal and/or interest shall be made in freely disposable Swiss francs without collection costs in Switzerland to the Holders of the Covered Bonds and/or Holders of the Coupons, without any restrictions, whatever the circumstances may be, irrespective of nationality, domicile or residence of the Holders of the Covered Bonds and/or Holders of the Coupons and without requiring any certification, affidavit or the fulfilment of any other formality. Payment to the Swiss Paying Agent by the Issuer and the receipt by the Swiss Paying Agent of the due and punctual payment of the funds in Swiss francs in Switzerland shall release the Issuer - 71-

78 of its obligations under the Covered Bonds and Coupons for the purposes of payment of principal and interest due on the respective payment dates to the extent of such payments. (4) Payments VPS Covered Bonds Payments of principal and/or interest in respect of the VPS Covered Bonds shall be made to the Holders registered as such on a specified business day, as defined by the then applicable VPS Rules, before the due date for such payment and will be made in accordance with said VPS Rules. Such day shall be the "Record Date" in respect of the VPS Covered Bonds in accordance with the VPS Rules. As of the date of this Base Prospectus, the default VPS Record Date for payments in respect of Covered Bonds is two days prior to the payment date for payments of principal and fifteen business days prior to the payment date for payments of interest. (5) Payments General Provisions (a) (b) (c) Save as otherwise specified herein, this Condition 7(5) is applicable in relation to Covered Bonds whether in bearer or in registered form. Subject to Condition 7(5), payments of amounts due (whether in respect of principal, interest or otherwise) in respect of Covered Bonds denominated in a currency other than euro will be made by cheque drawn on, or by transfer to, an account maintained by the payee with, a bank (in the case aforesaid, an authorised foreign exchange bank) in the Relevant Financial Centre and in respect of an Covered Bond denominated in euro by cheque drawn on, or by transfer to, an euro account (or any other account to which euro may be credited or transferred) maintained by the payee with a bank in the principal financial centre of any member state of the European Union. Payments will be subject in all cases to (i) any fiscal or other laws and regulations applicable thereto in the place of payment, but without prejudice to the provisions of Condition 6 (Taxation) and (ii) any withholding or deduction required pursuant to an agreement described in Section 1471(b) of the U.S. Internal Revenue Code of 1986 (the "Code") or otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any regulations or agreements thereunder, any official interpretations thereof, or (without prejudice to the provisions of Condition 6 (Taxation)) any law implementing an intergovernmental approach thereto. For the purposes of these Conditions: (i) "Business Day" means a day on which commercial banks and foreign exchange markets settle payments in the relevant currency in London and: in relation to Covered Bonds denominated in euro, a TARGET2 Settlement Day; and in relation to Covered Bonds denominated in any other currency, which is a day on which commercial banks and foreign exchange markets settle payments in the relevant currency in the Relevant Financial Centre; and in relation to payments due upon presentation and/or surrender of any Covered Bonds or Coupon, in the relevant place of presentation and/or surrender; and (ii) "Relevant Financial Centre" means, unless otherwise specified in the Pricing Supplement: in relation to Covered Bonds denominated in Australia Dollars, Sydney; in relation to Covered Bonds denominated in Canadian Dollars, Toronto; in relation to Covered Bonds denominated in Danish Krone, Copenhagen; - 72-

79 in relation to Covered Bonds denominated in Hong Kong Dollars, Hong Kong; in relation to Covered Bonds denominated in Japanese Yen, Tokyo; in relation to Covered Bonds denominated in Polish Zloty, Warsaw; in relation to Covered Bonds denominated in Pounds Sterling, London; in relation to Covered Bonds denominated in Mexican Peso, Mexico City; in relation to Covered Bonds denominated in New Zealand Dollars, Wellington and Auckland; in relation to Covered Bonds denominated in Norwegian Kroner, Oslo; in relation to Covered Bonds denominated in Russian Roubles, Moscow; in relation to Covered Bonds denominated in South African Rand, Johannesburg; in relation to Covered Bonds denominated in Swedish Krona, Stockholm; in relation to Covered Bonds denominated in Swiss Francs, Zurich; in relation to Covered Bonds denominated in United States dollars, New York City; and in relation to Covered Bonds denominated in any other currency, such financial centre or centres as may be specified in relation to the relevant currency and for the purposes of the definition of "Business Day" in the 2006 ISDA Definitions (as amended and updated from time to time), as published by the International Swaps and Derivatives Association, Inc. or as specified in the relevant Pricing Supplement. 8. Prescription (a) (b) Bearer Covered Bonds and the related Coupons will become void unless presented for payment within ten years (or, in the case of Coupons and save as provided in Condition 7(1)(e), five years) after the due date for payment. Claims against the Issuer in respect of Registered Covered Bonds will be prescribed unless made within 10 years (or, in the case of claims in respect of interest, five years) after the due date for payment. 9. The Paying Agents and the Registrars The initial Paying Agents and Registrars and their respective initial specified offices are specified below. The Issuer reserves the right at any time to vary or terminate the appointment of any Paying Agent (including the Fiscal Agent) or the Registrar and to appoint additional or other Paying Agents or another Registrar provided that it will at all times maintain (i) a Fiscal Agent, (ii) a Registrar, (iii) a Paying Agent with a specified office in continental Europe but outside Norway, (iv) a Paying Agent in an European Union Member State that will not be obliged to withhold or deduct tax pursuant to the European Council Directive 2003/48/EC or any law implementing or complying with, or introduced to conform to, such Directive, (v) so long as any VPS Covered Bonds are cleared through VPS, a Paying Agent with a specified office in Norway and (vi) so long as Covered Bonds are listed on any stock exchange or admitted to listing by any - 73-

80 other relevant authority, there will at all times be a Paying Agent with a specified office in such place as may be required by the rules and regulations of the relevant stock exchange or other relevant authority. The Paying Agents and the Registrar reserve the right at any time to change their respective specified offices to some other specified office in the same city. Notice of all changes in the identities or specified offices of the Paying Agents or the Registrar will be notified promptly to the Holders. In respect of Swiss Franc Covered Bonds, the Issuer will at all times maintain a paying agent having its specified office in Switzerland and at no time maintain a paying agent having its specified office outside of Switzerland. 10. Replacement of Covered Bonds If any Covered Bond or Coupon is lost, stolen, mutilated, defaced or destroyed, it may be replaced at the specified office of the Fiscal Agent (in the case of Bearer Covered Bonds and Coupons) or of the Registrar (in the case of Registered Covered Bonds), subject to all applicable laws and the requirements of any stock exchange and/or listing authority on which the relevant Covered Bonds are listed, upon payment by the claimant of all expenses incurred in such replacement and upon such terms as to evidence, security, indemnity and otherwise as the Issuer and the Fiscal Agent or, as the case may be, the Registrar may require. Mutilated or defaced Covered Bonds and Coupons must be surrendered before replacements will be delivered. 11. Meetings of Holders The Fiscal Agency Agreement contains provisions, which are binding on the Issuer and the Holders of Covered Bonds or Coupons, for convening meetings of the Holders of Covered Bonds of any Series to consider matters affecting their interests, including the modification or waiver of the Conditions applicable to any Series of Covered Bonds. In relation to VPS Covered Bonds only, meetings of Holders shall be held in accordance with the Fiscal Agency Agreement and in compliance with the relevant regulations of the VPS. For the purposes of a meeting of Holders, the person named in the certificate from the VPS shall be treated as the Holder specified in such certificate provided that he has given an undertaking not to transfer the VPS Covered Bonds so specified (prior to the close of the meeting). 12. Notices (a) To Holders of Bearer Covered Bonds Notices to Holders of Bearer Covered Bonds will, save where another means of effective communication has been specified in the relevant Pricing Supplement, be deemed to be validly given if published in a leading daily newspaper having general circulation in the United Kingdom (which is expected to be the Financial Times) or, in the case of a Temporary Global Covered Bond or Permanent Global Covered Bond if delivered to Euroclear and Clearstream, Luxembourg for communication by them to the persons shown in their respective records as having interests therein provided that, in the case of Covered Bonds admitted to listing and/or trading on any stock exchange, the requirements of such stock exchange or listing authority have been complied with. Any notice so given will be deemed to have been validly given on the date of such publication (or, if published more than once, on the date of first such publication) or, as the case may be, on the fourth Business Day after the date of such delivery. (b) To Holders of Registered Covered Bonds Notices to Holders of Registered Covered Bonds will be deemed to be validly given if sent by first class mail to them (or, in the case of joint Holders, to the first named in the register kept by the Registrar) at their respective addresses as recorded in the Register kept by the Registrar, and will be deemed to have been validly given on the fourth Business Day after the date of such mailing

81 (c) To the Issuer Notices to the Issuer will be deemed to be validly given if delivered at Nordea Eiendomskreditt AS, Essendropsgate 9, 0368 Oslo, Norway and clearly marked on their exterior "Urgent Attention: Group Treasury" (or at such other address and for such other attention as may have been notified to the Holders of the Covered Bonds in accordance with this Condition 12 and will be deemed to have been validly given at the opening of business on the next day on which the Issuer's principal office is open for business. (d) Notices in respect of Swiss Franc Covered Bonds Notices in respect of Swiss Franc Covered Bonds will, so long as the Covered Bonds are listed on the SIX Swiss Exchange and the rules of the SIX Swiss Exchange so require, be deemed to have been given if published by the Swiss Paying Agent at the expense of the Issuer, (i) by means of electronic publication on the internet website of the SIX Swiss Exchange under the section headed "Official Notices" where notices are currently published under the address: notices_en.html or (ii) otherwise in accordance with the regulations of the SIX Swiss Exchange. Notices shall be deemed to be validly given on the date of such publication or, if published more than once, on the date of the first such publication. For Swiss Franc Covered Bonds that are not listed on the SIX Swiss Exchange, notices to Holders shall be given by communication through the Swiss Paying Agent to SIS (or such other intermediary) for forwarding to the holders of the Covered Bonds. Any notice so given shall be deemed to be validly given with the communication to SIS (or such other intermediary). (e) Notices in respect of VPS Covered Bonds Notices in respect of VPS Covered Bonds will be given to the VPS for communication by it to the Holders. Any such notice shall be deemed to have been validly given on the date two days after delivery to the VPS. 13. Provision of Information for VPS Covered Bonds In relation to VPS Covered Bonds, the VPS Paying Agent is obligated, upon request, to provide any relevant Norwegian authorities, including the Norwegian FSA and the Norwegian tax authorities, with any information registered on the relevant VPS account(s). Such information may include the identity of the registered Holder of the Covered Bonds, the residency of the registered Holder of the Covered Bonds, the number of Covered Bonds registered with the relevant Holder, the address of the relevant Holder, the account operator in respect of the relevant VPS account and whether or not the Covered Bonds are registered in the name of a nominee and the identity of any such nominee. 14. Further Issues Subject to Condition 5(j) (Extension of maturity up to Extended Maturity Date) the Issuer may from time to time without the consent of the Holders of any Covered Bonds of any Series create and issue further covered bonds having terms and Conditions the same as those of the Covered Bonds of such Series or the same except for the amount and date of the first payment of interest (if any), which may be consolidated and form a single Series with the outstanding Covered Bonds of such Series. 15. Law and Jurisdiction (a) The Covered Bonds, the Fiscal Agency Agreement and the Deed of Covenant and all non-contractual obligations arising out of or in connection with any of them are governed by English law, except that Condition 3 (Status) and all non-contractual obligations arising out of or in connection with it are governed by, and shall be construed in accordance with the laws of Norway. In addition the Covered Bonds must comply - 75-

82 with the Covered Bond Legislation. Norwegian law and jurisdiction will be applicable with regard to the registration of such VPS Covered Bonds in VPS. (b) The Issuer irrevocably agrees for the benefit of the Holders of the Covered Bonds that the courts of England shall have jurisdiction to hear and determine any suit, action or proceedings, and to settle any disputes, which may arise out of or in connection with the Covered Bonds (including a dispute relating to any non-contractual obligation arising out of or in connection with the Covered Bonds) (respectively, "Proceedings" and "Disputes") and, for such purposes, irrevocably submits to the jurisdiction of such courts. The Issuer irrevocably waives any objection which it might now or hereafter have to the courts of England being nominated as the forum to hear and determine any Proceedings and to settle any Disputes and agrees not to claim that any such court is not a convenient or appropriate forum. The Issuer agrees that the process by which any Proceedings in England are begun may be served on it by being delivered to Nordea Bank Finland Plc, London Branch at its registered address in London from time to time, being presently at 8th Floor, City Place House, 55 Basinghall Street, London EC2V 5NB, or at any other address at which process may from time to time be served on it in accordance with the Companies Act 2006 (as modified or re enacted from time to time). Nothing contained herein shall affect the right to serve process in any other manner permitted by law. The submission to the jurisdiction of the courts of England shall not (and shall not be construed so as to) limit the right of the Holders of the Covered Bonds or any of them to take Proceedings in any other court of competent jurisdiction nor shall the taking of Proceedings in any one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not) if and to the extent permitted by applicable law. 16. Third Parties Rights No person shall have any right to enforce any Condition of any Covered Bonds under the Contracts (Rights of Third Parties) Act 1999 but this does not affect any right or remedy of any person which exists or is available apart from such Act

83 THE COVERED BOND LEGISLATION The following is a brief summary of certain features of the Norwegian legislation concerning the issuance of covered bonds in Norway at the date of this Base Prospectus. The summary does not purport to be, and is not, a complete description of all aspects of the Norwegian legislative and regulatory framework for covered bonds. Please also refer to "Risk factors" above. Introduction The main legislation governing the issue of covered bonds in Norway consists of the Covered Bond Legislation, which entered into force on 1 June It enables certain Norwegian mortgage credit institutions, whose articles of association comply with prescribed mandatory requirements, to issue covered bonds (Obligasjoner med fortrinnsrett). According to the Financial Institution Act credit mortgage institutions are credit institutions which are not banks (and whose activity consists in receiving deposits or other repayable funds from the general public and in making loans for its own account). Mortgage credit institutions must hold a license issued by the Ministry of Finance, fulfill capital requirements and undertake organizational measures, among other things. The issuance of covered bonds is not subject to any further governmental approvals. However, the articles of association shall be approved by the Norwegian FSA. Furthermore, a mortgage credit institution shall notify the Norwegian FSA no later than 30 days prior to the initial issuance of covered bonds. The Issuer is a licensed mortgage credit institution and its articles of association have been approved by the Norwegian FSA. The Issuer did also notify the Norwegian FSA before its first issuance of covered bonds and may consequently issue covered bonds. A Norwegian mortgage credit institution that can issue covered bonds will hereinafter be referred to as an "Institution". Subject to the Covered Bond Legislation holders of covered bonds and counterparties to derivative contracts which meet further requirements in the Regulations ("Derivative Counterparties") shall have an exclusive, equal and proportional preferential claim over the cover pool assigned to them. According to Norwegian law an issuer of covered bonds must register the bonds in uncertificated and dematerialized electronic book entry form with the Norwegian Central Securities Depository, Verdipapirsentralen (the "VPS") if the bonds are issued in Norway. Registration The Institution shall keep a register of the covered bonds it issues, and of the cover assets assigned thereto, including derivative contracts which meet further requirements in the Regulations (the "Register"). The Register must at all times show the nominal value of the covered bonds, the cover pool and the relevant derivative contracts. As a result, the Register requires regular updating, including without limitation due to changes in interest rates, interest periods, outstanding debt and the composition of the cover pool. The value of the underlying collateral securing mortgage credits in the cover pool must also be entered into the Register. The registration is not in itself conclusive evidence of the cover pool pertaining to the covered bonds, but shall, according to the preparatory works to the Covered Bond Legislation, serve as strong evidence. Benefit of a preferential claim If an Institution which has issued covered bonds is declared bankrupt, enters into debt negotiations under Act 58 of 8 June 1984 on Bankruptcy (the "Bankruptcy Act"), is liquidated or is placed under public administration, the holders of covered bonds and Derivative Counterparties agreements will have an exclusive, equal and proportional preferential claim over the cover pool. Such preferential claim shall rank ahead of all other claims, save for claims relating to the fees and the expenses of a bankruptcy estate, which subject to Section 6 4 of Act 2 of 8 February 1980 on Liens will have a first priority lien over all of the assets in the cover pool. The bankruptcy estate's lien will, however, be limited to 700 times the standard Norwegian court fee (which at present is approximately NOK 602,000) in respect of the cover pool. Payment of expenses on operation, management, recovery and realization of the cover pool may also be demanded before the holders of covered bonds and Derivative Counterparties receive payment from the cover pool. By virtue of the aforementioned preferential claim, holders of covered bonds and Derivative Counterparties rank ahead of unsecured creditors and all other creditors of the Institution in respect of - 77-

84 assets in the cover pool (save for the priority administrator in bankruptcy as regards fees and expenses). The preferential claim shall also apply to funds which are subsequently remitted in accordance with terms of contract applying to assets included in the cover pool, provided that certain administrative procedures have been complied with. According to the Covered Bond Legislation assets included in the cover pool may not be pledged or be subject to execution, attachment or other enforcement procedure in favor of particular creditors of the Institution. Nor may a right of set off, right of retention or the like be declared in the assets included in the cover pool. However, this rule does not prevent agreed set offs of cash flows in the same currency and with the same due date from being completed between counterparties to derivative contracts included in the same cover pool. Eligibility criteria for assets in the cover pool The cover pool may only consist of certain assets, which include loans secured by various types of mortgages (the "Mortgages"), loans secured by other registered assets, loans granted to or guaranteed by certain public bodies (the "Public Sector Loans"), assets in the form of certain derivative contracts and so called substitute assets. The Mortgages are defined as loans secured by mortgages over (i) residential property, a document proprietary lease of a housing unit (adkomstdokument) or on a certificate showing that the lessee owns a share in a housing cooperative (borettslagsandel) (together, the "Residential Mortgages") and (ii) loans secured on other real estate (the "Other Real Estate Mortgages"). With effect from 1 January 2013 a clarification was made in the regulations to the Covered Bond Legislation. A new text was added stating that loans secured by mortgages over holiday houses shall be considered as Other Real Estate Mortgages. The reason behind the amendment was that Norwegian Covered Bond Issuers interpreted the definition of Mortgages differently with respect to classification of loans secured on holiday houses. Loans secured by Mortgages and by other registered assets must be secured by assets located within the EEA or the OECD area. Public Sector Loans must have been granted to or guaranteed by certain public bodies, which are located within the EEA or OECD and also meet additional requirements in the Regulations. Only particularly liquid and secure assets may be employed as substitute assets. Substitute assets may constitute up to 20 per cent. of the cover pool at all times. Where special conditions are present, the Norwegian FSA may authorize this proportion to constitute up to 30 per cent. for a limited period. The substitute assets must also meet certain risk category requirements in order to be included for the purpose of verifying the mortgage credit institution's compliance with the asset coverage requirement (described below). As at the date of this Base Prospectus, the articles of association prescribe that the Issuer may only acquire and grant Residential Mortgages and loans secured on holiday houses. Loans that are secured by mortgages over a document proprietary lease of a housing unit (Adkomstdokument) do not constitute Qualifying Loans under the Master Sale Agreement, but could do so in the future, should this be agreed with Nordea Bank Norway by way of an amendment to the Master Sale Agreement. Loan to value ratios and certain other restrictions Pursuant to the Covered Bond Legislation, when calculating the value of the cover pool assets consisting of loans secured by mortgages, the following LTV requirements apply to cover pool assets consisting of mortgages: 75 per cent. of prudent market value in the case of Residential Mortgages; and 60 per cent. of prudent market value in the case of Other Real Estate Mortgages. There is no restriction with respect to the proportion of the cover pool which may be represented by Residential Mortgages or Other Real Estate Mortgages. Furthermore, the proportion of substitute assets may not exceed 20 per cent. of the cover pool, although the Norwegian FSA has the authority to raise this limit to 30 per cent. for a limited period in special circumstances. The proportion of assets in the cover - 78-

85 pool represented by Public Sector Loans and certain derivative contracts may vary, depending on the risk category pertaining to the relevant assets. The Covered Bond Legislation contains additional provisions regarding quantitative and qualitative requirements for the assets in the cover pool. In order for loans secured by mortgages to be entered into the cover pool all legislative requirements must be met. Assets which do not conform to the risk classification, quantitative limits, LTV ratios or other requirements may nonetheless be included in the cover pool, but shall not be included for the purpose of verifying the mortgage credit institution's compliance with the asset coverage requirement (described below). Assets which exceed the quantitative requirements, such as the limit of exposure towards certain credit institutions, or LTVs, may be included in respect of that portion which meets the requirements. The value of mortgages may be included up to the LTV ratios described above even if a subsequent value change indicates that the limits have been exceeded. Asset coverage requirement The Covered Bond Legislation prescribes that the value of the cover pool shall at all times exceed the aggregate value of the covered bonds that give the holders and Derivative Counterparties a preferential claim over that cover pool. When assessing the value of the real estate furnished as collateral for the Mortgages, a prudent value shall be established for each individual asset. Prudent market value may not exceed the market value resulting from a cautious assessment. Valuations shall be conducted by a competent and independent person in accordance with recognized principles. The valuation shall be documented and shall indicate who has conducted it, when it was conducted and the assumptions on which it was based. Valuations of residential properties may never the less be based on general price levels provided this is deemed prudent based on market conditions. The Institution shall establish systems for subsequent monitoring of the value of the assets. The Institution shall also monitor the development of the relevant market conditions. Should market conditions or factors pertaining to the individual asset indicate that significant value impairment has taken place; the Institution shall ensure that a new prudent value is established. Liquidity requirement According to the Covered Bond Legislation the Institution shall ensure that the payment flows from the cover pool at all times enables the Institution to honor its payment obligations towards holders of covered bonds and Derivative Counterparties. The Institution shall also establish a liquidity reserve to be included in the cover pool as substitute assets. Inspector The Norwegian FSA appoints an Inspector for an Institution before it issues covered bonds. The Inspector is responsible for monitoring the Register as defined in section 2 33 to assess whether or not it is being maintained correctly and in compliance with the Covered Bond Legislation. The Inspector shall at least every third month perform limited procedures to assess whether the requirements of sections 2 31 (asset coverage requirement) and 2 33 (register requirement) of the Financial Institutions Act are complied with. The Institution is required to provide the Inspector with all relevant information about its business. Furthermore, the Inspector must be granted full access to the Institution's register, and may also request further information. The Inspector shall each year inform the Norwegian FSA of the observations and assessments arising from the inspections. The reporting to Norwegian FSA consists of certain defined control procedures. If the Inspector has reason to believe that the requirements of the Covered Bond Legislation are not met, based upon the procedures performed, he or she shall inform the Norwegian FSA accordingly. The reporting from the appointed Inspector to Norwegian FSA is not public information. The promissory note In Norway a borrower signs a promissory note when entering into a loan agreement with a financial institution. Chapter 3 of Act No. 46 of 25 June 1999 on Financial Contracts and Financial Assignments ("Financial Contracts Act") governs loan agreements. Financial institutions in Norway use a standard promissory note, which is prepared by the bank associations and the Norwegian consumer authorities

86 The promissory note contains details concerning the specific loan, such as the sum and the interest, together with the general terms of the loan. Deviations from or supplements to the promissory note are normally agreed in a separate loan offer signed by the borrower. A loan agreement can be transferred to another financial institution without the prior approval of the borrower. The creditor must however, typically, notify the borrower of the transfer. Even though the mortgage agreement is transferrable, the borrower may apply the same objections and counter-claims against the acquirer on the basis of the mortgage agreement as against the original creditor, unless otherwise provided by law. However, if a mortgage is transferred to a mortgage credit institution and included in the cover pool, the borrower cannot use such claims to set-off his or hers obligations relating to the loan. The mortgage deed In Norway, a borrower may provide security over a real estate property or over a participation part (borettslagsandel) in housing cooperatives (borettslag) by signing a mortgage deed. The mortgage deed states the registration number of the real estate or the participation part in the housing cooperative, the creditor and the nominal amount the mortgage deed. A mortgage deed must be signed or countersigned by the person holding title to the property. Normally, the mortgage deed itself has no reference to the actual loan agreement. The mortgage lender enters into an individual mortgage agreement stating the specific obligations that are secured by the mortgage. The mortgage deed is registered in the Norwegian Land Register (Grunnboken) by a central registry authority (Statens kartverk) according to the rules of Act No. 2 of 7 June 1935 on Judicial Registration (Tinglysingsloven). The mortgage acquires legal protection through registration in the Norwegian Land Register and the mortgage ranks with other mortgages and encumbrances based on the date of such registration. With regard to mortgage deeds over Participation Parts in housing cooperatives, there are also certain specific rules regarding registration and legal protection in Chapter 6 of Act No. 39 of 6 June 2003 on Housing Cooperatives (Borettslagsloven). The identity of the mortgagee is also registered in the Norwegian Land Register. It is, however, not necessary to register a transfer of a mortgage deed to a new mortgagee; provided notice of the transfer has been received by the debtor, the acquirer has legal protection against the creditors of the transferring mortgagee without such registration. The nominal amount specified in the mortgage deed represents the maximum amount that can be recovered under the mortgage. In addition, expenses and interest are encompassed by the mortgage within the terms of section 1-5 of Act No. 2 of 8 February 1980 on Mortgages (Panteloven) (the "Mortgage Act"). Enforcement procedures The Norwegian Enforcement Authorities (Namsmyndighetene) are responsible for enforcing claims against debtors according to Act No. 86 of 26 June 1992 on enforcement (Tvangsfullbyrdelsesloven). In order to start the enforcement of a claim, a creditor must generally obtain a judgment or have a specific ground for enforcement (særlig tvangsgrunnlag). The promissory note constitutes a specific ground for enforcement, as the borrower has stated in the note that the loan can be recovered without filing a civil lawsuit. On the basis of the promissory note, the creditor can obtain an execution mortgage (utleggspant) against assets belonging to the debtor. The registered mortgage is in itself a specific ground for enforcement of the property. Before filing a petition based on a specific ground for enforcement, the creditor must give the debtor 14 days' written notice. The mortgagee can either apply for an enforced sale (tvangssalg) or for an enforced use (Tvangsbruk) of the property. A petition for enforcement of a property must be filed with the District Court (Tingretten) in the district where the property is registered. As an alternative to enforcement, the debtor may agree to a voluntary sale of the property with the mortgagee. Enforced use of a property means that an administrator is appointed for operating the property for a limited time period. The proceeds from the property, such as income from rent, which exceeds the operating costs, are divided between the mortgagees based upon the priority of their mortgage. A mortgagee cannot, however, claim enforced use over participation parts in housing cooperatives. Enforced use is generally seldom applied for

87 In case of an enforced sale, the District Court may choose either to sell the property using an assistant (medhjelpersalg), normally a real estate agent or an attorney, or to organize an auction held by the Enforcement Authorities. An enforced sale can only be carried out if all encumbrances that rank higher in priority than the mortgage being enforced are covered. Where an enforced sale is carried out by an assistant, the assistant shall notify the parties and other rights holders to the property of the enforced sale with information about the plaintiff and the claim. The assistant shall prepare the sale and gather such information that is common when selling properties through a real estate agent. Furthermore, the assistant shall prepare a property description, advertise and hold viewings for potential buyers. Typically, bids on the property can only be taken into account if they are binding for minimum six weeks. When the assistant has received one or more bids that he or she finds acceptable, the assistant submits the bid to the plaintiff asking if the plaintiff wants to request any of them confirmed. The District Court considers the request from the plaintiff and decides whether the bid shall be confirmed. A bid shall be refused if, among other things, it is probable that new sale efforts will lead to a higher price. Enforced sale through an auction is less common than enforced sale through an assistant. The auction is held either by the Enforcement Officer (namsmannen) or the District Court. The parties and other rights holders to the property shall be given a 14 day written notice of the time and place of the auction. The bidders participate in a public auction where the bids are binding for six weeks after the auction date. The administrator of the auction shall invite the parties, the rights holders and the bidders to comment on the bids that have been received. The rules regarding the confirmation of bids are principally the same as for an enforced sale through an assistant. After a bid is confirmed, the District Court decides by a court order how the proceeds shall be divided. The court fee and the costs of the assistant are covered first and then the mortgages are covered according to their priority. The mortgages with interest and costs are calculated based on the size of the claims on the agreed settlement date. Bankruptcy proceedings Bankruptcy proceedings may be initiated in Norway by application to the Probate and Bankruptcy Court by the debtor or a creditor. For bankruptcy proceedings to be opened the debtor must be insolvent, cf. section 60 of Act No. 58 of 8 June 1984 on Bankruptcy (Konkursloven). In bankruptcy proceedings all the debtor's assets that are accessible by the creditors are seized and are sold. The debtor is deprived of the right to dispose over these assets. The proceedings are led by a trustee of the bankruptcy estate (bobestyrer), usually a lawyer. Chapter 9 of Act No. 59 of 8 June 1984 on Creditor Recovery (Dekningsloven) contains rules on how the funds of the bankruptcy estate shall be distributed to the creditors. "Preferential claims" must be met in full before the remaining funds are divided between the creditors. Preferential claims consist, amongst other things, of claims arising after the opening of the bankruptcy proceedings, the costs of the Probate and Bankruptcy Court and the trustee's fee. After the preferential claims have been covered, other preferred claims, such as wages and taxes, shall be met. The remainder of the estate's funds must then be divided on an equal ranking basis between the unsecured creditors. The special rules concerning priority of claims in the event of bankruptcy of a mortgage credit institution are described in the chapters "The Covered Bond Legislation" and "Risk factors". If a creditor has a valid mortgage for his claim, the creditor will in theory not be affected by the bankruptcy. However, mortgage holders are advised to submit their claim against the estate. In a situation where the mortgagee's claim lies within the value of the collateral, the mortgagee may receive full coverage of the entire claim. If the value of the collateral is lower than the mortgagee's claim, the mortgagee may submit the claim as a dividend claim. Under section 1-9 letter c) of the Mortgage Act, the mortgagee's claim will come due for payment if bankruptcy proceedings are initiated against the debtor. If the debtor does not pay the claim, the mortgagee may apply for an enforcement of the collateral. However, enforcement procedures cannot be carried out for six months following the opening of the bankruptcy proceedings, unless the bankruptcy trustee gives his consent. The trustee may also prevent an enforced sale by paying off the mortgagee who applied for the sale. Furthermore, the bankruptcy trustee may sell a mortgaged asset even if the mortgagee does not receive full coverage. Such a sale may be performed if a sale of the mortgaged asset together - 81-

88 with other non-mortgaged assets is expected to give a higher sale price, or if the sale forms part of a transfer of all or parts of the business of the debtor. If the mortgaged asset has no financial interest for the bankruptcy estate, the bankruptcy trustee may abandon the mortgaged asset to the debtor. The bankruptcy seizure will then be reversed and the collateral will revert to the debtor. In this situation the mortgagee can apply for an enforced sale of the collateral or agree with the debtor to sell the asset voluntarily. The trustee may also transfer assets with no financial interest for the estate to the mortgagee. However, the mortgagee must agree to such a transfer. Generally the bankruptcy trustee may require the enforced sale of mortgaged assets at any time during the bankruptcy proceedings. If an enforced sale does not result in a surplus for the estate or the mortgagees for various reasons are not eligible for a dividend, the affected mortgagees must agree to such a sale. Administration of the cover pool in the event of bankruptcy Bankruptcy or negotiation of debt or public administration of an Institution shall not in itself be sufficient cause for termination or similar remedy by holders of covered bonds and Derivative Counterparties. If an Institution is declared bankrupt, the bankruptcy court will appoint a bankruptcy administrator. The bankruptcy court will in this situation also appoint a creditor committee for the bankruptcy estate. In the event of bankruptcy, negotiation of debt, liquidation or public administration of the Institution, holders of covered bonds and Derivative Counterparties shall be entitled to timely payment from assets encompassed by their preferential claim for the duration of the bankruptcy or administration proceedings. This is, however, provided that the cover pool is essentially in compliance with the statutory requirements. The bankruptcy administrator and the creditor's committee shall, to the extent possible, ensure that holders of covered bonds and Derivative Counterparties receive timely payment. Should it not be possible to make timely payments to the holders of covered bonds and Derivative Counterparties, and an imminent change that will ensure such timely payments is unlikely, the bankruptcy administrator and the creditor's committee shall introduce a halt to payments and set a date for the halt of payments to be introduced. The bankruptcy administrator and the creditor's committee must as soon as possible inform the holders of covered bonds and Derivative Counterparties accordingly. Where a halt to payments is introduced, further administration of the bankruptcy estate will be conducted under the general rules of the Norwegian bankruptcy legislation. However, the holders of covered bonds and Derivative Counterparties will retain the preferential claim over the cover pool. Any residual claims of the holders of covered bonds and derivative counterparties remain a valid claims against the Institution, but will rank pari passu with other unsecured and unsubordinated creditors of the Institution

89 USE OF PROCEEDS The net proceeds of the issue of each Series of Covered Bonds, as the case may be, will be used for the general banking and other corporate purposes of Nordea Eiendomskreditt AS. If, in respect of any particular issue, there is another or a particular identified use of proceeds this will be stated in the applicable Final Terms or Pricing Supplement

90 THE NORDEA GROUP Overview The Nordea Group (Nordea Bank and its subsidiaries, the "Nordea Group" or the "Group") is the largest financial services group in the Nordic markets (Denmark, Finland, Norway and Sweden) measured by total income (based on a comparison of Nordic bank annual reports by Nordea Markets (Nordea Bank Finland Plc)), with additional operations in Poland, Russia, the Baltic countries and Luxembourg, as well as branches in a number of other international locations. The Nordea Group's parent company, Nordea Bank, is a public Swedish limited liability company incorporated under Swedish law. Nordea Bank's shares are listed and traded on the Stockholm, Copenhagen and Helsinki stock exchanges. The Nordea Group's head office is located in Stockholm at Smålandsgatan 17, SE Stockholm, Sweden. As at 31 December 2012, the Nordea Group's assets totalled EUR 677 billion and Tier 1 capital EUR 24.0 billion. As of the same date, the Nordea Group had approximately 11 million customers across the markets in which it operates, of which approximately 9.0 million are household customers in customer programmes and 0.6 million are active corporate customers. As of 31 December 2012, the Nordea Group had approximately 1,000 branch office locations of which more than 210 were located in Russia, Poland, Lithuania, Latvia and Estonia. In addition, the Group has a very large number of telephone and Internet customers. The Nordea Group is very active within e- based financial services and, at the end of 2012, had approximately 6.9 million users of such services. In addition, the Nordea Group acts as an asset manager within the Nordic region with EUR 218 billion in assets under management as per 31 December The Nordea Group also provides life insurance products. The Formation of the Nordea Group The Nordea Group was created through international mergers among four large Nordic financial institutions which gradually resulted in the creation of a single unit. Nordea's predecessors were Nordea Bank Sverige AB (publ) (formerly Nordbanken AB (publ)) in Sweden ("Nordea Bank Sverige"), which, on 1 March 2004, merged with the Group's parent company and underwent a change of name to Nordea Bank AB (publ); Nordea Bank Danmark A/S (formerly Unibank A/S) in Denmark ("Nordea Bank Danmark"); Nordea Bank Finland Plc (formerly Merita Bank Abp) in Finland ("Nordea Bank Finland"); and Nordea Bank Norge ASA (formerly Christiania Bank og Kreditkasse ASA) in Norway ("Nordea Bank Norway"). After the Group's parent company had adopted the name Nordea AB (publ) at the end of 2000, the name "Nordea" was gradually introduced within the Group and, by December 2001, the banks and branch offices within the Group had adopted the name Nordea. Legal Structure To improve operating capacity, reduce risk exposure and enhance capital efficiency, Nordea's Board of Directors initiated a change in the Group's legal structure in June The internal restructuring commenced in 2003 when Nordea, the parent company of the Nordea Group, acquired Nordea Bank Sverige, Nordea Bank Danmark and Nordea Bank Norway from Nordea Bank Finland. At the same time, Nordea AB (publ) also acquired Nordea North America, Inc. from Nordea Bank Finland. Following these transactions, Nordea Bank was established as a bank and its name was changed to Nordea Bank AB (publ). Thereafter, Nordea Bank Sverige merged with Nordea Bank. The merger was registered with the Swedish Patent and Registration Office (currently the Swedish Companies Registration Office) on 1 March The Nordea Group aims at the continued simplification of its legal structure and the aim is that Nordea Bank will be converted into a European company, a "Societas Europaea". The conversion is conditional on, among other things, Nordea Bank obtaining necessary approvals from the relevant authorities. As all regulatory responses to the financial crisis and the "New Normal" are yet to be evaluated, the Nordea Group is following up and analysing the changes in process which are not expected to be finalised during

91 The following chart sets forth the general legal structure of the Nordea Group, including its material subsidiaries, as of 31 December Nordea Bank AB (publ) Sweden Nordea Hypotek AB (publ) Sweden Nordea Bank Danmark A/S Denmark Nordea Bank Finland Plc Finland Nordea Bank Norge ASA Norway Nordea Bank Polska S.A. Poland Holding company Fund companies Investment management various subsidiaries companies Nordea Life Holding AB Sweden Nordea Kredit Realkreditaktieselskab Denmark Various subsidiaries Various subsidiaries Nordea Eiendomskreditt AS Norway Various subsidiaries OJSC Nordea Bank Russia Nordea Livförsäkring Sverige AB (publ) Sweden Nordea Liv Holding Norge AS Norway Nordea Life Assurance Finland Ltd Finland Nordea Liv & Pension livsforsikrings-selskab A/S Various subsidiaries Various subsidiaries Nordea Life & Pension S.A. Luxembourg Nordea Polska Towarzystwo Ubezpieczeń na Życie S.A. Poland Nordea Pensions Estonia AS Estonia Nordea Powszechne Towarzystwo Emerytalne S.A. Poland IPAS Nordea Pensions Latvia Latvia - 85-

92 The Nordea Group's banking business in the Baltic countries is operated as branches of Nordea Bank Finland. The Nordea Group's Organisation Overview The Nordea Group's organisational structure, which was implemented in June 2011, is built around three main business areas: Retail Banking, Wholesale Banking and Wealth Management. In addition to the business areas, the Nordea Group's organisation includes the business unit Group Operations and Other Lines of Business. Group Corporate Centre and Group Risk Management which are the other central parts of the Nordea Group's organisation. The Nordea Group's financial reporting structure has been based on the new organisational structure from and including the third quarter of In the Nordea Group's organisation, all parts of the value chains customer responsibility, support, products, staff and IT development have been incorporated into the three main business areas with the objective to improve efficiency, increase return on equity and deepen customer relationships. By organising the business areas around value chains, the Nordea Group believes that the responsibilities for creating efficiencies will be clearer and that it will be able to respond to new regulatory and investor demands in a more agile manner. The purpose of the organisational structure is also to enable all people within the Nordea Group to work even closer to customers, including understanding and delivering on their needs and preferences. Segmentation of customers and differentiating both the value proposition and resource allocation according to customer needs are at the core of the Nordea Group's customer strategy in the new organisation. Of the Nordea Group's business areas, Retail Banking is responsible for customer relations with household customers as well as large, medium-sized and small corporate customers in the Nordic and Baltic Sea markets. Retail Banking is responsible for segmentation (customer groups) as well as value propositions (customer programmes), cross-border customer strategies and sales processes. The Retail Banking business is operated through Banking Denmark, Banking Finland, Banking Norway, Banking Sweden and Banking Poland and Banking Baltic countries. The Wholesale Banking business area further builds on the Nordea Group's customer-centric relationship banking approach and aims to ensure that all service and product competences of the Nordea Group reach its large corporate customers. The Wholesale Banking business area includes the business units Corporate & Institutional Banking, Shipping, Offshore & Oil Services, Banking Russia, Nordea Markets, Transaction Products and International Units. Wealth Management includes the business units Private Banking (Nordic and International), Asset Management and Life & Pensions. The Private Banking business is operated through an integrated model with Retail Banking. The business unit Group Operations operates the Nordea Group's common development and services, including IT, Processes, Services, and Premises and Property. Group Corporate Centre and Group Risk Management are group functions that continue to operate in the same structure as they did in the Nordea Group's previous operating model. Business Areas At the core of the Nordea Group's strategy is segmentation of customers and differentiating both value proposition and resource allocation according to customer needs. The Nordea Group's customer activities are organised around two major customer groups: household customers and corporate customers. With both its household customers and corporate customers, the Nordea Group seeks to build long-term banking relationships and to become a lifetime financial partner by gaining an understanding of the customers' specific product and service needs and by offering products and advice tailored to meet those requirements. To serve its household customers and corporate customers, the Nordea Group has divided its operations into three main business areas (Retail Banking, Wholesale Banking and Wealth Management) and the business unit Group Operations and Other Lines of Business. The business areas each comprise a number of business units which operate as separate profit units

93 The following chart sets forth the Nordea Group's organisation. Christian Clausen President and Group CEO Group Internal Audit Group Identity & Communications Group Human Resources Retail Banking Wholesale Banking Wealth Management Group Operations Group Corporate Centre Group CFO Group Risk Management Group CRO Banking Denmark Customer Interaction CIB Denmark Capital Markets Services (CIB) International Private Banking Group IT Group Treasury Group Credit Banking Finland Implementation & Execution CIB Finland Transaction Products Private Banking Denmark Group Processes Group Planning & Control Group Credit Control Banking Norway Business Development CIB Norway International Units Private Banking Finland Group Services Group Finance Group Operational Risk and Compliance Banking Sweden Nordea Finance CIB Sweden Segment CIB Private Banking Norway Group Premises Investor Relations Group Market Risk Management Banking Poland & Baltic Countries Shipping, Offshore & Oil Services IT Wholesale Banking Private Banking Sweden Group Strategy & Corporate Development Group Capital and Risk Modelling Nordea Bank Russia IT Capital Markets Asset Management Corporate Social Responsibility Markets - IB Life & Pensions Group Legal Markets - Equities Savings & Wealth Offerings Markets - FICC Strategy, Support & Control Retail Banking Retail Banking is the largest of the business areas within the Nordea Group. As of 31 December 2012, Retail Banking served close to 10 million household and corporate customers in eight markets. Retail Banking is responsible for customer relations with household customers as well as large, medium-sized and small corporate customers in the Nordic and Baltic Sea markets. Household and corporate customers are served on all financial needs and the Nordea Group's ambition is to be a full service provider to its customers. The business area incorporates the whole value chain including sales force, channels, product units, back office and IT. Retail Banking is responsible for segmentation (customer groups) as well as value propositions (customer programmes), cross-border customer strategies and sales processes. Retail Banking operates under one strategy, one operating model and one governance system in Banking Denmark, Banking Finland, Banking Norway, Banking Sweden, Banking Poland and Banking Baltic countries. Retail Banking's ambition is to create a leading retail banking franchise in Europe in terms of profitability, efficiency and customer experience. The plan builds on a strong commitment to relationship banking and a controlled approach to develop this strategy from the current branch-centric model to a true multichannel relationship retail bank. Within Retail Banking, the Nordea Group operates a multi-channel distribution strategy in the household - 87-

94 customer segment to ensure that household customers can access the bank when and how it suits them. The three core elements of Retail Banking's distribution strategy are branches, contact centres and on-line and mobile banking. Through the Nordea Group's common customer relationship system, the three distribution channels are fully integrated so that customer interaction in one channel is simultaneously recorded in all other channels. The Nordea Group assigns household customers in each of the Nordic markets to different segments based on the business volume and number of products and services the customer has with the Nordea Group, namely Premium, Gold, Silver and Bronze customers in the Nordea Group's customer programmes. Retail Banking advisors work to develop relationships with the Nordea Group's household customers and to provide them with product solutions tailored to meet their individual banking needs. In the Nordic markets, Retail Banking divides its corporate customers further into the following customer segments: Large, Medium and Small corporates. The aim for the Large, Medium and Small customer segments is to develop customer relationships and to become the house bank for their respective customers. For customers in the Large and Medium segments, the Nordea Group is also continuing to integrate corporate risk management products and capital market transactions into its basic product offering. Within the Small segment, the Nordea Group has launched a concept to service small corporate customers with one adviser for both their corporate and their household business. Wholesale Banking Wholesale Banking provides services and financial solutions to the largest corporate and institutional customers of the Nordea Group. The business area incorporates the whole value chain, including customer and product units as well as the supporting IT and infrastructure. This allows for an integrated service offering, including tailor-made solutions aimed to fit the needs of individual customers. Wholesale Banking as a business area was established to further build on the Nordea Group's customercentric relationship banking approach and to ensure that all service and product competences of the Nordea Group reach its large corporate customers. The Nordea Group believes that as the leading wholesale banking provider in the Nordic region it has the ability to provide its customers with the best financial tools to optimise their business and manage their risks. The operating model built on Nordic scale and strong local presence enables full alignment between the customer units and product experts. The Nordea Group believes that its strategy for the largest corporate customers has proven robust during the ongoing transformation of the banking industry. It further believes that the Nordea Group's local sales organisations combined with a global production platform enable it to capitalise on the benefits of relationship banking and economies of scale. The relationship strategy provides the Nordea Group with a deep knowledge of its customers and their industries, which allows Wholesale Banking to strengthen its customer offering. Currently, the Wholesale Banking business area includes the units Corporate & Institutional Banking, Shipping, Offshore & Oil Services, Banking Russia, Nordea Markets, Transaction Products and International Units. Corporate & Institutional Banking The Corporate & Institutional Banking organisation serves the Nordea Group's largest Nordic corporate customers and institutional customers in one central unit in each market. The Nordea Group seeks to establish strategic partnerships with its Corporate & Institutional Banking customers by becoming their primary source for a wide range of financial services, including day-to-day banking services such as cash management. The Nordea Group provides Corporate & Institutional Banking with tailored, highly individualised product solutions and terms. A central part of the Nordea Group's corporate strategy is to create value by relationship banking, and, in the upper corporate customer segments, the Nordea Group's goal is to remain a strong partner, which it aims to achieve by strict resource management and efficient resource application, combined with continued high service levels, active business selection and increased operational efficiency. When serving large financial institution customers, such as banks, investment banks, hedge funds and other financial institutions, the Nordea Group employs a similar relationship banking concept, seeking to establish a strategic partnership with the customer and to provide specialised advice and tailored products and services

95 Shipping, Offshore & Oil Services Shipping, Offshore & Oil Services is the Wholesale Banking division responsible for customers within the shipping, offshore, oil services, cruise and ferries industries worldwide. Customers are served from the Nordic offices as well as the international branches in New York, London and Singapore. The Nordea Group believes that it is a leading bank to the global shipping and offshore sector with strong brand recognition and a world leading loan syndication franchise. The business strategy of Shipping, Offshore & Oil Services is founded on long-term customer relationships and strong industry expertise. Nordea Markets The Nordea Group believes that Nordea Markets is the leading capital markets and investment banking operation in the Nordic region. Nordea Markets is responsible for handling trading, research and sales within areas such as foreign exchange, fixed income, equities, structured products, commodities, and capital markets services, financial advisory and corporate finance. Nordea Markets offers its products to corporate and financial institutions and through Wealth Management to household customers. The activities in Nordea Markets are purely customer-driven. The strategy of the Nordea Group is to further increase business in risk management products with the Nordea Group's corporate customers and to provide efficient financing solutions. Banking Russia The Nordea Group offers banking services to corporate and household customers in Russia through its wholly owned subsidiary, OJSC Nordea Bank, a full service bank. Banking Russia has a particular focus on making business with large global companies and core Nordic clients in Russia and offers all regular banking products, including cash management, lending and capital markets services. Based on its strong presence in the Nordic countries, the Nordea Group believes that it can offer companies active both there and in Russia solutions that meet their needs for banking services. Transaction Products The Transaction Products product division consists of three units, Cash Management, Trade Finance and Payment Operations. The division is responsible for the product offering within, among others, transaction products and services, working capital related services, corporate e-channels and trade financing. International Units The Nordea Group operates an international network of branches in New York, London, Frankfurt, Shanghai and Singapore, as well as representative offices in São Paulo and Beijing. In addition to its own network, the Nordea Group has entered into various cooperation agreements with banks around the world. As a result, the Nordea Group is able to offer its corporate customers high-quality solutions for their international business. The product offering focuses on day-to-day banking services, credit products, cash management, trade finance and capital markets products. Wealth Management Wealth Management provides investment, savings and risk management products, manages the Nordea Group's customers' assets and advises affluent and high-net-worth individuals as well as institutional investors on their financial situation. The goal of Wealth Management is to become the leading wealth manager in all Nordic markets, with a global reach and global capabilities. To achieve and maintain that position, Wealth Management believes it needs to ensure that its business model provides high-quality advice and a high standard of service and a full offering of high-quality products through a cost and capital-efficient delivery model. The business area consists of Private Banking, Asset Management and Life & Pensions business units as well as the service unit Savings & Wealth Offerings. Private Banking The Nordea Group operates its Private Banking business through an integrated model with Retail Banking. The Nordea Group believes that this integrated operating model enables it to fully leverage the distribution capabilities and customer base of the whole Group as well as to utilise the investment and product development competencies in the Group

96 In addition to its Nordic Private Banking operations, the Nordea Group engages in International Private Banking operations that are targeted to both customers of a Nordic origin domiciled outside the Nordic region and international customers off non-nordic origin. Asset Management Asset Management is responsible for delivering the Nordea Group's savings products to household customers, including private banking customers. The savings product offering consists of actively managed investment products such as investment funds, life insurance and pension products and discretionary mandates. Asset Management is also responsible for the Nordea Group's asset management offerings to large corporate and institutional customers. Life & Pensions Life & Pensions covers product development and packaging of life insurance and pension products to corporate and household customers. Customers are served through banking branches, Life & Pensions' own sales force or via tied agents and brokers. Strategy Since 2007, the Nordea Group has consistently pursued its relationship strategy. The Nordea Group has maintained this strategic direction despite the challenging macroeconomic environment during the past years and remains committed to servicing customers supporting the real economy (i.e., the part of the economy that is concerned with producing goods and services). The Nordea Group's strategy is based on its "2015 plan", which is focused on the continued development of the relationship banking business model. At the centre of this strategy is the Nordea Group's ambition to understand, advise, service and commit to its customers for the benefit of building long-term core relationships where the main focus areas are: balanced customer focus, building on a customer-centric organisational design, in which the right products are delivered in the right way at a fair price based on the true cost of providing the products; people focus, clear values and principles are reflected in the objectives and incentives that are set within the Group, with the economic profit framework remaining at the heart of how management and support are pursued; and optimised value chain integration, adoption and development of best practices where loyalty to simplicity, transparency and reduction of complexity is promoted while keeping the Nordea Group's clients and their objectives in focus. The Nordea Group believes that having one operating model and business area ownership of the end-toend value chain ensures overview, accountability and congruence. This focused relationship strategy provides the basis for reaching the Nordea Group's financial target, as further discussed below. The Nordea Group believes that profitability will be key to maintaining a high credit rating, low funding costs and flexibility within the Nordea Group's capital position, and further believes that sound profitability is a prerequisite for providing customers with excellent customer experiences in a sustainable manner. For the Nordea Group to stay in what it sees as the top league in performance for its peer group of European banks, the Nordea Group believes it needs to increase the Group's return on equity by taking actions on both cost and capital efficiency, and at the same time continue to grow the Group's income. In line with this strategy, the Nordea Group has set a single financial target for the Group, which is to reach a return on equity of 15 per cent. in a normalised interest environment and with a core Tier 1 capital ratio of above 13 per cent. Capital Policy The Nordea Group has established a capital policy to reflect the new regulatory environment. Under this capital policy, the target is for the Group's core Tier 1 capital ratio to be above 13 per cent. and for the total capital ratio to be above 17 per cent. not later than 1 January The capital policy is based on management's current best view on capitalisation although there is still uncertainty regarding the final framework for new capital adequacy standards, including the CRD IV. The Nordea Group considers - 90-

97 these targets as minimum targets under normal business conditions, given that the regulatory framework is dynamic. Efficiency Initiatives The Nordea Group has introduced efficiency initiatives aimed at both cost efficiency and asset and capital efficiency in order to mitigate the anticipated higher costs for banking in the changed business environment that is often referred to as the "New Normal". In June 2011, the Nordea Group implemented a new organisational structure, which the Nordea Group believes will enable a continued focus on efficiency across value chains and on assisting customers in finding efficient solutions in the "New Normal". The new organisational structure aims to ensure improved accountability and a focused implementation of identified cost efficiency measures. In the second half of 2011, the Nordea Group undertook a range of additional cost efficiency measures, including the reduction in the number of employees of the Group by approximately 2,700 since the second quarter of 2011, and expects to initiate further efficiency measures. The Nordea Group has also taken initiatives for cost efficiency in, among other areas, IT development. The Nordea Group expects to initiate further cost efficiency measures and aims to maintain the Group's costs in 2013 and 2014, at least, at a largely unchanged level as compared to costs in 2011 and The Nordea Group strives for further capital efficiency by focusing the business on capital-light products on the advisory and relationship business as well as ancillary income in customer relations. The Nordea Group's asset and capital efficiency initiatives further aim at taking actions to maintain RWA at an unchanged level despite income growth. These initiatives include reviews of credit risk processes for further improving RWA efficiency as well as further roll-out of internal ratings-based ("IRB") models. Household and Corporate Relationships The Nordea Group's relationship strategies are divided into a household relationship strategy and a corporate relationship strategy. Household Relationship Strategy Household customers are divided into four segments based on their business with the Nordea Group. For each segment, the Nordea Group has developed a value proposition, including contact policy, service level, pricing and product solutions. The core philosophy of this strategy is to provide the best service, advice and product solutions to the customers and thereby to ensure loyalty, brand value and increase business and income. The Nordea Group's household pricing is transparent and generally non-negotiable. Product development is geared at reducing complexity and developing products with a low capital requirement in order to meet both the demands of customers and regulatory requirements. The Nordea Group's savings product offering is designed to take account of customers' wealth, their level of involvement, stage of life and risk appetite. The Nordea Group pursues a multichannel distribution strategy, aiming to improve customer satisfaction while reducing the cost of serving. Proactive contact with customers is conducted by local branches and supplemented by contact centres, online services and the mobile bank. The Nordea Group aims at having recurring advisory meetings with all existing and potential relationship customers, taking their entire finances and long-term preferences into account in order to provide a comprehensive financial solution. Corporate Relationship Strategy Corporate customers comprise four segments based on their business potential and banking needs complexity. For each segment, the Nordea Group has developed a value proposition including contact policy, service level and product solutions to provide comprehensive financial solutions and ensure "house bank" relationships. Relationship managers take a holistic view of the customer's situation and targets and organise the relationship accordingly. The Nordea Group believes that its strength and size as a banking group enable it to offer highly competitive solutions, capitalising on its balance sheet to the benefit of corporate customers. The Nordea Group believes that its strategy for the largest corporate customers has proven robust during the ongoing transformation of the banking industry. The Nordea Group further believes that its local sales organisations combined with a global production platform enable it to capitalise on the benefits of relationship banking and economies of scale

98 The Nordea Group is committed to its goal of becoming the leading bank in the wholesale segment in all its Nordic markets. For corporate customers in the Large and Medium segments, the Nordea Group is continuing to integrate corporate risk management products and capital market transactions into its basic product offering. Within the Small segment, the adviser profile and the Small Entrepreneur service concept is being expanded to meet business and personal banking needs in the segment. Nordea Bank Norway Nordea Bank Norway is one of the three main wholly-owned subsidiaries of NBAB, along with Nordea Bank Denmark and Nordea Bank Finland. Nordea Bank Norway conducts banking operations in Norway as a part of the Nordea Group and its operations are fully integrated into the Nordea Group's operations (see "The Nordea Group" above). Nordea Bank Norway's registered address is at Middelthungst. 17, P.O. Box 1166 Sentrum, 0107 Oslo, Norway. Nordea Bank Norway is a public limited liability company domiciled in Oslo and is regulated under the Norwegian Act on Commercial Banks and Financial Institutions Act. In addition, it holds a license as an investment firm and is therefore also regulated by the Norwegian Securities Trading Act. Nordea Bank Norway's retail operations provide a complete range of financial services and products for a broad circle of private individuals, companies and institutions, as well as the public sector. Nordea Bank Norway has subsidiaries in Norway, the most significant of which are the Issuer and Nordea Finans Norge AS ("NFN"), and branches abroad in New York City and the Cayman Islands. In addition, Nordea Bank Norway owns the real estate agency franchisor Privatmegleren AS. NFN has business area responsibility for some financing products in Norway and its main products are leasing, car financing and factoring. The Issuer is used by Nordea Bank Norway as a vehicle to secure competitive funding by issuing covered bonds secured with household mortgage loans. See "Nordea Eiendomskreditt AS" for an overview of the close cooperation between Nordea Bank Norway and the Issuer. Under the Servicing Agreement, Nordea Bank Norway has been appointed as the Manager of the Residential Mortgages. The day-to-day servicing and managing of the Residential Mortgages is performed by the Manager in accordance with the Servicing Agreement through Nordea Bank Norway's retail branches, telephone and customer service centers, which ensures that the Issuer is able to fulfil all of its obligations towards the debtors under the mortgages. The Manager is also responsible for managing the Cover Pool and ensuring that it complies with the requirements of the Covered Bond Legislation and keeping the loan books

99 NORDEA EIENDOMSKREDITT AS Overview The Issuer is a wholly owned subsidiary of Nordea Bank Norway which is the Norwegian bank of the Nordea Group (see "Description of the Nordea Group Nordea Bank Norway"). The Issuer is a limited company incorporated on 12 May 1992 under the laws of the Kingdom of Norway and registered in the Norwegian Register of Business Enterprises (Foretaksregisteret) with registration number The Issuer's registered address is Essendropsgate 9, 0368 Oslo, Norway and its telephone number is The Issuer is subject to the Act 44 of 13 June 1997 on Limited Liability Companies (Aksjeloven) and the Financial Institutions Act. The Issuer is a licensed mortgage credit institution and its articles of association have been approved by the Norwegian FSA. The Issuer has no subsidiaries of its own, nor does it have any shares in other Nordea Group companies. The Issuer conducts its activities in close cooperation with the parent company Nordea Bank Norway and the parent company's sales offices and branches in Norway. Among other things, Nordea Bank Norway handles the credit processes and decisions regarding the Mortgage Loans, the management of the loans and certain accounting and reporting tasks for the Issuer. Nordea Bank Norway and NBAB are also responsible for handling the Issuer's funding and risk control. Due to the close cooperation with Nordea Bank Norway, the Issuer has only two employees at the date of this Base Prospectus. The Issuer operates solely as a mortgage credit institution. The objective of the Issuer is to acquire and provide residential mortgage loans and finance its activities mainly through issuance of covered bonds, cf. Section 2 of its articles of association. Covered Bond issuances The covered bonds issued by the Issuer under this Programme or any of its other covered bond programmes that it may operate from time to time will be unsubordinated obligations of the Issuer and rank pari passu among themselves and with all other obligations of the Issuer that have been provided the same priority as debt instruments issued pursuant to the Covered Bond Legislation. All covered bonds issued by the Issuer (which rank pari passu with the Issuer's relevant derivative contracts) have, and will have, the benefit of a statutory preference under the Covered Bond Legislation on the Cover Pool maintained by the Issuer. The Issuer maintains only one Cover Pool in respect of the covered bonds issued under the covered bonds programmes that it has or that it may operate from time to time and any relevant derivative contracts, and the Covered Bondholders will share the benefit of the Cover Pool with all other covered bondholders and relevant derivative counterparties. Composition of assets in the Cover Pool The Financial Institutions Act sets out the requirements for the assets that may form part of the cover pool (see "The Covered Bond Legislation Eligibility criteria for assets in the cover pool and Loan to value ratios and certain other restrictions"). The Issuer's Cover Pool consists primarily of Residential Mortgages, which are currently loans secured (i) on residential property (selveide boliger) and (ii) on a certificate showing that the lessee owns a share in a housing cooperative that owns the housing structure of which the unit forms part (borettslagsandel), referred to herein as Participation Parts. In the case of (ii), the loan is granted to the borrower living in the housing cooperative and the loans are secured on the borrower's part in the housing cooperative. For the avoidance of doubt, these do not include loans to the actual housing cooperative who owns the housing structure (fellesgield i borettslag). In addition, the Cover Pool consists of a small share of loans secured by mortgages over holiday houses, which according to the Covered Bond Legislation are considered as Other Real Estate Mortgages. The Issuer may also include mortgages over a document proprietary lease of a housing unit (Adkomstdokument) to be included in the Cover Pool. All properties that constitute security for the mortgages in the Cover Pool are located in Norway. The vast majority of these are residential properties (mainly privately owned detached and semi-detached dwellings and condominiums) followed by loans secured on Participation Parts (consisting mainly of apartments) and much smaller number of loans secured on holiday houses

100 The amount of derivative contracts in the Cover Pool fluctuates with market conditions and hedging needs. Valuation of assets in the Cover Pool The Covered Bond Legislation prescribes that the prudent market value (as determined in accordance with the Covered Bond Legislation) of the Cover Pool will not at any time be less than the value of all Covered Bonds issued under the Program and any other mortgage covered bonds of the Issuer in issue at such time. The value of the covered bonds shall be determined as the sum of the discounted value of nominal and discounted coupon payments. In order to fulfill the asset coverage requirement and, where and when applicable, any other requirement from rating agencies with regard to overcollateralization, the value of the Cover Pool is calculated both in nominal terms and in net present value terms. The calculation is also analyzed under different interest rate scenarios in order to monitor the interest rate risk sensitivity of the Cover Pool and ensure that the value of the Cover Pool remains at the correct level under each scenario. References in this Base Prospectus to the "value of the Cover Pool" is to those mortgages included in the Cover Pool that are taken into account (fully or partially) for the purposes of the calculation of the asset coverage requirement under the Covered Bond Legislation. Treasury services and risk control The Issuer has also entered into an agreement with Nordea Bank Norway regarding treasury services. Pursuant to this agreement, Nordea Bank Norway shall on the behalf of the Issuer, amongst other things, arrange financing for the mortgage loans, manage the daily liquidity, enter into derivative transactions to hedge financial risk and arrange for the composition and size of the Cover Pool to comply with regulatory and internal requirements. In addition, the Issuer and NBAB have entered into an agreement, according to which NBAB shall handle the Issuer's risk control, including daily calculation and reporting of market and credit risk as well as the Issuer's business continuity planning and financial control. Derivative contracts The Issuer will enter into derivative arrangements with Nordea Bank Norway and potentially other parties (as authorised by the Covered Bond Legislation) for the purpose of controlling interest rate risks, liquidity risks and currency risks in relation to the Issuer's funding and lending operations. Funding of the Issuer's business The issuance of covered bonds is the Issuer's primary source of funding. In addition, the Issuer has received its funding through borrowing from its parent company, Nordea Bank Norway. The nominal value of outstanding covered bonds issued by the Issuer as at 31 March 2013 amounted to NOK billion. Board of Directors The board of directors of the Issuer consists of five members elected by the board of representatives (representantskapet) of the Issuer. As at the date of this Base Prospectus, the members of the board of directors are: Jon Brenden (Chairman)... Børre Gundersen... Fanny Borgström... Eva I. Jarbekk... Monica Blix... Deputy of Banking Norway, Nordea Bank Norway Management partner for Head of Banking Norway, Nordea Bank Norway Head of Group Funding, NBAB Attorney at law, partner in the law firm Kluge Controller, Infratek ASA The address of the members of the board and management (see below) is the registered address of the Issuer

101 Management Marianne Glatved is the managing director (daglig leder) of the Issuer. Auditors and Inspector KPMG AS currently acts as auditor for the Issuer. The auditor in charge is Bjarne Haldorsen. The audit partners of KPMG AS are members of the Norwegian Institute of Public Accountants. KPMG AS also currently acts as auditors for Nordea Bank Norway. On 13 February 2009 the Norwegian FSA appointed KPMG AS as Inspector to the Issuer pursuant to Section 2 34 of the Financial Institutions Act. Administrative, management and supervisory bodies; conflicts of interest According to Norwegian law, three out of five members of the Issuer's board of directors may be appointed from the Nordea Group. Nordea Bank Norway employs two of the five current members of the board of directors and also the chairman of the Issuer's board of directors. In addition, NBAB employs one of the five current members of the board of directors. Although NBAB is the parent company of Nordea Bank Norway, which owns all the shares of the Issuer, the Issuer's primary business is to issue covered bonds on behalf of the Nordea Group, and therefore the Issuer does not believe that conflicts of interest will arise. Furthermore, the Issuer is not aware of any conflicts of interest between any duties to the Issuer of the members of the board of directors or the managing director and their private interests and/or other duties. In order to avoid conflicts of interest and clarify how individuals are expected to act if conflicts of interest arise, the Issuer must observe a number of guidelines set out by the Nordea Group, including ethical guidelines, guidelines for employees' secondary jobs and guidelines for employees' private security and foreign currency transactions. Articles of Association The Articles of Association of the Issuer were last amended on 7 March Dividends The Issuer's annual shareholder general meeting has approved, and the Issuer has paid, the following dividends in the last five years based on the results for the preceding financial year: 2013: total dividend payment of NOK : total dividend payment of NOK : total dividend payment of NOK : total dividend payment of NOK : total dividend payment of NOK 340,000,000 (capital contribution) Share and shareholder information The Issuer's share capital as at 31 December 2012 was NOK million, made up of 15,336,269 ordinary shares, each of nominal value NOK 110. The entire issued share capital is owned by Nordea Bank Norway. Corporate governance The Issuer is not listed on the Oslo Stock Exchange and accordingly is not directly subject to the corporate governance regime promulgated by the Norwegian Code of Practice for Corporate Governance

102 SELECTED FINANCIAL INFORMATION The financial information for Nordea Eiendomskreditt AS presented below is extracted from the audited financial statements included in Annex 2 and Annex 3 of the Base Prospectus. The unaudited interim financial information is extracted from Nordea Eiendomskreditt AS Q1 interim financial statements for the period ended 31 March 2013 included in Annex 1. The annual financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The interim financial information is prepared in accordance with International Accounting Standard No 34., Interim Financial Reporting. The financial information below should be read together with the audited annual financial statements including the related notes of the Issuer as of and for the years ended 31 December 2011 and 31 December 2012 and the interim report including unaudited financial information referred to above. Income statement NOK Q Q Operating income... Total interest and related income... 3,997,624 3,005,451 1,087, ,720 Total interest and related expense... 2,757,117 2,442, , ,295 Net interest income... 1,240, , , ,425 Fee and commission income... 53,787 35,345 13,080 12,279 Fee and commission expenses... 3,263 1, Net fee and commission income... 50,524 33,488 12,627 11,715 Net result from items at fair value , ,615 1,490-4,103 Total operating income... 1,277, , , ,037 Operating expenses Staff costs... 2,346 2, Other expenses , ,533 34,611 36,347 Total operating expenses , ,787 35,218 36,979 Profit before loan losses... 1,128, , , ,058 Loan losses (negative figures are reversals)... -8,021 15,789-2,074 2,695 Operating profit before tax... 1,136, , , ,362 Income tax expense , , ,486 55,542 Net profit for the year/period , , , ,820 Allocation to: Shareholders of Nordea Eiendomskreditt AS , , , ,820 Total allocation , , , ,820 Balance sheet NOK Assets Loans to credit institutions, payable on demand... 83, , , ,246 Net loans to the public ,772,332 88,537, ,689, ,538,357 Derivatives... 1,232,911 1,706,490 2,186, ,520 Fair value changes of the hedged items in portfolio hedge of interest rate risk 353, , , ,218 Deferred tax assets Other assets ,862 Accrued income and prepaid expenses 189, , , ,076 Total assets ,631,707 90,982, ,866, ,374,278 Liabilities Total deposits by credit institutions... 21,900,670 15,250,000 22,800,581 18,550,000 Debt securities in issue... 83,792,777 68,966,576 86,652,047 77,001,420 Derivatives , , , ,976 Fair value changes of the hedged items in portfolio hedge of interest rate risk... 1,121, ,062 1,092, ,055 Current tax liabilities , , ,358 5,

103 NOK Other liabilities... 1,860 2, , Accrued expenses and prepaid income , , , ,924 Provisions Retirement benefit obligations... 1,667 2,135 2,377 3,829 Deferred tax... 62,022 33,792 61, ,322 Subordinated loan capital , , , ,000 Total liabilities ,995,132 86,761, ,930,746 98,011,684 Equity Share capital... 1,686,990 1,533,627 1,686,990 1,533,627 Share premium reserve... 1,446,637-1,446,637 - Other reserves Retained earnings... 3,502,949 2,687,307 3,801,327 2,828,967 Total Equity... 6,636,576 4,220,934 6,935,370 4,362,594 Total liabilities and equity ,631,707 90,982, ,866, ,374,278 Cash flow statements NOK Q Q Operating profit before tax... 1,136, , , ,347 Income taxes paid , ,810-62,231-94,405 Adjustment for items not included in cash flow Change in write-downs to provide for loan losses ,831 8,105-2,256 2,775 Cash flow from operating activities before changes in op. assets and liab.... 1,003, , , ,717 Change in loans to the public ,224,046-7,795,305-2,915,235-12,003,676 Change in debt securities in issue... 14,826,201 9,695,136 2,859,270 8,034,844 Change in deposits by credit institutions... 6,650,670-2,350, ,911 3,300,000 Change in other receivables ,900-2,088,812-1,010, ,131 Change in other liabilities ,172 1,328, ,450-47,363 Cash flow from operating activities... -1,670, , ,864 93,653 Purchase/sale of tangible fixed assets Change in loans and receivables to credit institutions, fixed terms Change in subordinated loan capital Change in holdings of bearer bonds issued by others Cash flow from investing activities Group contribution/dividend paid Change in subordinated loan capital , Increase in share capital and premium reserve... 1,600, Cash flow from financing activities... 1,600, , Cash flow for the year/period ,125 53, ,864 93,653 Cash and cash equivalents at beginning of year/period , ,462 83, ,593 Cash and cash equivalents at end of year/period... 83, , , ,246 Change ,125 53, ,864 93,

104 The residential mortgage market THE HOUSING MORTGAGE MARKET IN NORWAY In Norway the main suppliers of housing loans are mortgage companies (about 51 per cent of the total volume as of February 2013) and banks (about 45 per cent as of February 2013). The remaining volume is supplied by Governmental Financial institutions. Many of the mortgage companies are owned by private banks, which are originators and/or servicers of the mortgage company's loans. (Source: Statistics Norway, ?fane=tabell&sort=nummer&tabell= ?fane=tabell&sort=nummer&tabell=107607). A typical residential mortgage loan in Norway has a variable rate. The interest rate is not directly linked to a quoted market rate, but set individually by each bank based in general on an evaluation of (i) the bank's funding costs, (ii) the competitive position, (iii) the bank's financial situation, (iv) the bank s relationship with the customer and (v) LTV. Changes to the rates on residential mortgage loans have traditionally to a great extent followed changes in the key policy rate from the central bank (Norges Bank), which has influenced the market rate. However, in the 4 to 5 years prior to the date of this Base Prospectus, the market rate has changed more independently of the key policy rate and banks have also changed interest rates without following the key policy rate. Before a lender can increase the rate towards its customers, the lender must, according to Norwegian law, send a notification in writing no later than 6 weeks before the new rate is implemented. Some banks offer housing loans with interest rate caps, but as at the date of this Base Prospectus the volume of such loans is insignificant. Since the development of home equity credit lines (rammelån/boligkreditt) in 2004, most of the banks in Norway have also offered these types of housing loans. As of the date of this Base Prospectus the lending limit for new home equity credit lines does normally not exceed 70 per cent. of the market value of the residential property, in accordance with the guidelines from Norwegian FSA. Home equity credit lines enable the borrower to draw on a credit within a specified loan limit. The amount available for the customer s disposal is the difference between the size of the credit line and the drawn amount. The home equity credit lines are regularly used for purchase of the property, refinancing and other purposes, such as financing a car purchase or a house renovation. Guidelines for prudent financing of residential properties The Norwegian FSA issued the above guidelines in a circular dated 1 December 2011, stating among other things, that: The LTV should normally not exceed 85%. If Interest Only period, the LTV should normally not exceed 70%. If Home Equity Credit Line (rammelån/boligkreditt), the LTV should normally not exceed 70%. Regulation of the Norwegian residential mortgage market Pursuant to the Financial Institutions Act, any entity conducting financial activities in Norway, such as the granting of loans secured by residential mortgages, must be authorized by the Norwegian authorities and is subject to regulatory requirements in its capacity as a financial institution pursuant to the Financial Institutions Act. Mortgage companies, such as the Issuer, must have their registered office and head office in Norway and are subject to capital adequacy requirements set out in the Financial Institutions Act and regulations issued thereunder, in particular, the Capital Requirements Regulation, No of 14 December 2006 in addition to other requirements, in particular extensive reporting requirements. Capital adequacy - 98-

105 requirements entail, among other things, that the mortgage company must, at all times, maintain a satisfactory capital ratio based on the credit risk, market risk and the operational risk relating to the company. Its articles of associations must be approved by such Norwegian authorities and may not be amended without approval from the authorities. A mortgage company is further subject to several requirements, in particular, extensive reporting requirements

106 TAXATION The following is a general description of certain tax considerations relating to the Covered Bonds. It does not purport to be a complete analysis of all tax considerations relating to the Covered Bonds, whether in those countries or elsewhere. Prospective purchasers of Covered Bonds should consult their own tax advisers as to which countries' tax laws could be relevant to acquiring, holding and disposing of Covered Bonds and receiving payments of interest, principal and/or other amounts under the Covered Bonds and the consequences of such actions under the tax laws of those countries. This summary is based upon the law as in effect on the date of this Base Prospectus and is subject to any change in law that may take effect after such date. Norwegian Taxation Payments of principal and interest on the Covered Bonds issued under the Programme to persons who have no connection with Norway other than the holding of such Covered Bonds issued by the Issuer are, under present Norwegian law, not subject to Norwegian tax, and may hence be made without any withholding tax or deduction for any Norwegian taxes, duties, assessments or governmental charges. Capital gains or profits realised on the sale, disposal or redemption of such Covered Bonds by persons who have no connection with Norway other than the holding of the Covered Bonds are not, under present Norwegian law, subject to Norwegian taxes or duties. No Norwegian issue tax or stamp duty is payable in connection with the issues of the Covered Bonds. The Covered Bonds will not be subject to any Norwegian estate duties provided that, at the time of death of the holder, such holder has no connection with Norway, including Norwegian citizenship, other than the holding of such Covered Bonds and provided that the Covered Bonds have not been used in, or in connection with, any business activity operated through a permanent establishment situated in Norway. Persons considered domiciled in Norway for tax purposes will be subject to Norwegian income tax on interest received in respect of the Covered Bonds. Likewise, capital gains or profits realised by such persons on the sale, disposal or redemption of the Covered Bonds will be subject to Norwegian taxation. European Union Directive on the Taxation of Savings Income Under EC Council Directive 2003/48/EC on the taxation of savings income (the "EU Savings Directive"), each Member State is required to provide to the tax authorities of another Member State details of payments of interest or other similar income paid by a person within its jurisdiction to, or collected by such a person for, an individual resident or certain limited types of entity established in that other Member State; however, for a transitional period, Austria and Luxembourg may instead apply (unless during that period they elect otherwise) a withholding system in relation to such payments, deducting tax at a rate of 35 per cent. The transitional period is to terminate at the end of the first full fiscal year following agreement by certain non-eu countries to the exchange of information relating to such payments. A number of non-eu countries, and certain dependent or associated territories of certain Member States, have adopted similar measures (either provision of information or transitional withholding) in relation to payments made by a person within its jurisdiction to, or collected by such a person for, an individual resident or certain limited types of entity established in a Member State. In addition, the Member States have entered into provision of information or transitional withholding arrangements with certain of those dependent or associated territories in relation to payments made by a person in a Member State to, or collected by such a person for, an individual resident or certain limited types of entity established in one of those territories. In April 2013, the Luxembourg Government announced its intention to abolish the withholding system with effect from 1 January 2015 in favour of automatic information exchange under the EU Savings Directive. The European Commission has proposed certain amendments to the EU Savings Directive, which may, if implemented, amend or broaden the scope of the requirements described above. Investors who are in any doubt as to their position should consult their professional advisers

107 Swiss Taxation The following discussion is a summary of Swiss withholding tax considerations relating to (i) Covered Bonds issued by the Issuer where the Holder is tax resident in Switzerland or has a tax presence in Switzerland or (ii) Covered Bonds where the Paying Agent, custodian or securities dealer is located in Switzerland. The discussion bases on legislation as of the date of this Base Prospectus. It does not aim to be a comprehensive description of all the Swiss tax considerations that may be relevant for a decision to invest in Covered Bonds. The tax treatment for each investor depends on the particular situation. All investors are advised to consult with their professional tax advisors as to the respective Swiss tax consequences of the purchase, ownership, disposition, lapse, exercise or redemption of Covered Bonds (or options embedded therein) in light of their particular circumstances. Swiss Federal Withholding Tax Payments by the Issuer, of interest on, and repayment of principal of, the Covered Bonds, will not be subject to Swiss federal withholding tax, provided that the Issuer is at all times resident and managed outside Switzerland for Swiss tax purposes. On August 24, 2011, the Swiss Federal Council issued draft legislation, which, if enacted, may require a paying agent in Switzerland to deduct Swiss withholding tax at a rate of 35 per cent. on any payment of interest in respect of a debt security to an individual resident in Switzerland or to a person resident outside of Switzerland. European Directive on the Taxation of Savings Income On October 26, 2004, the European Community and Switzerland entered into an agreement on the taxation of savings income pursuant to which Switzerland will adopt measures equivalent to those of the European Council Directive 2003/48/EC of 3 June 2003 on the taxation of savings income in the form of interest payments. The agreement entered into force as of July 1, In accordance with this agreement, Swiss paying agents have to withhold tax at a rate of 35 per cent. on interest payments made under the Covered Bonds to a beneficial owner who is an individual and resident of an EU member state, with the option of the individual to have the paying agent and Switzerland provide to the tax authorities of the EU member state the details of the interest payments in lieu of the withholding. On 26 October 2004, the European Community and Switzerland entered into an agreement on the taxation of savings income following which Switzerland adopted measures equivalent to those of the European Council Directive 2003/48/EC of 3 June 2003 on the taxation of savings income in the form of interest payments. In accordance therewith, Swiss paying agents are required to withhold tax at a rate of 35 per cent. in respect of a beneficial owner who is an individual and resident of an EU member state on payments of interest income on Covered Bonds, with the option of the individual to have the paying agent and Switzerland provide to the tax authorities of the EU member state the details of the interest payments in lieu of the withholding. Final Foreign Withholding Taxes On 1 January 2013 treaties on final withholding taxes between the Switzerland and the United Kingdom and between Switzerland and Austria entered into force. The treaties, inter alia, require a Swiss paying agent to levy final withholding tax at specified rates in respect of an individual resident in the United Kingdom or resident in Austria, as applicable, on interest or capital gain paid, or credited to an account, relating to the Covered Bonds. The final withholding tax substitutes the United Kingdom or Austrian income tax, as applicable, on such income of interest or capital gain. Such a person may, however, in lieu of the final withholding tax opt for voluntary disclosure of the interest or capital income to the tax authority of his or her country of residency. Note that Switzerland may conclude similar treaties with other European countries, negotiations currently being conducted with Greece and Italy. The proposed Financial Transactions Tax In September 2011, the EU Commission attempted to introduce an EU-wide financial transactions tax. However not all the Member States were in favour of such a tax and so the tax could not be implemented in all Member States. Subsequently, 11 Member States of the EU requested that the Commission develop

108 a proposal for the introduction of a common financial transactions tax (FTT) for each of those Member States. The Commission developed such a proposal under the EU's enhanced cooperation procedure which allows 9 or more Member States to implement common legislation. In January 2013 the EU Council of Ministers authorised the Commission to proceed with enhanced cooperation for a common FTT and the Commission has now published a draft Directive containing proposals for the FTT. This FTT is intended to be introduced in the 11 participating Member States (Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia). Additional Member States may decide to participate. The proposed FTT imposes a charge on a wide range of financial transactions including purchases and sales of financial instruments including bonds; this charge will be levied at not less than 0.1 per cent. of the sale price. Material modifications of financial instruments also attract a charge at the applicable rate. In both cases the charge is applied separately to each financial institution that is party to a transaction; if a financial institution does not pay the tax then its counterparty will be jointly and severally liable. A charge to FTT will arise if at least one party to a financial transaction is established in a participating Member State and a financial institution established in (or is treated as established in) a participating Member State is a party to the transaction, for its own account, for the account of another person, or if the financial institution is acting in the name of a party to the transaction. It is important to be aware that a financial institution will be treated as established in a participating Member State if, among other things, its seat is there, it is authorised there (as regards authorised transactions) or it is acting via a branch in that Member State (as regards branch transactions). It may also be treated as established in a participating Member State in relation to a particular transaction, merely because it is entering into the financial transaction with another person who is established in that Member State. Furthermore, a financial institution which is not otherwise established in a participating Member State will be treated as established in a participating Member State in respect of a financial transaction if it is a party (for its own account or for the account of another person) or is acting in the name of a party, to a financial transaction in respect of a financial instrument issued within that Member State. The other party to such a transaction will, to the extent not otherwise established in a participating Member State, also be treated as established in that Member State. There are limited exemptions to the proposed FTT; one important exemption is the "primary market transactions" exemption which should cover the issuing, allotting, underwriting or subscribing for shares, bonds and securitised debt. There is some uncertainty as to whether this exemption applies to the issuance of commercial paper or money market instruments, although the taxation of such issuances would seem likely to be in breach of EU law. There are no broad exemptions for financial intermediaries or market makers. Therefore the effective cumulative rate applicable to some dealings in financial instruments could be greatly in excess of the headline rate of the tax. Even though the FTT is to be introduced only in the participating Member States, it can be seen from what is said above that it could make dealings in financial instruments more costly for persons both inside and outside the 11 participating Member States, and the FTT could be payable in relation to Covered Bonds issued under this Base Prospectus if the FTT is introduced and the conditions for a charge to arise are satisfied. The proposed FTT is still under review and it may therefore change before it is implemented. In particular, in April 2013, the UK Government announced that is to challenge the legality of certain aspects of the proposed FTT. This challenge may lead to changes in the scope of the FTT. It is currently proposed that the FTT should be introduced in the participating Member States on 1st January, Prospective holders of the Covered Bonds are strongly advised to seek their own professional advice in relation to the FTT

109 SUBSCRIPTION AND SALE Covered Bonds may be sold from time to time by the Issuer to any one or more of Barclays Bank PLC, BNP Paribas, London Branch, Citigroup Global Markets Limited, Credit Suisse Securities (Europe) Limited, Deutsche Bank Aktiengesellschaft, Goldman Sachs International, HSBC Bank plc, J.P. Morgan Securities plc, Merrill Lynch International, Nomura International plc, Nordea Bank Danmark A/S, The Royal Bank of Scotland plc and Société Générale (the "Dealers"). The arrangements under which Covered Bonds may from time to time be agreed to be sold by the Issuer to, and purchased by, Dealers are set out in a dealership agreement dated 17 June 2013 (as amended and/or restated from time to time the "Dealership Agreement") and made between the Issuer and the Dealers. Any such agreement will inter alia make provision for the form and terms and conditions of the relevant Covered Bonds, the price at which such Covered Bonds will be purchased by the Dealers and the commissions or other agreed deductibles (if any) payable or allowable by the Issuer in respect of such purchase. The Dealership Agreement makes provision for the resignation or renewal of existing Dealers and the appointment of additional or other Dealers. Denmark Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it has not offered or sold and will not offer, sell or deliver any of the Covered Bonds directly or indirectly in the Kingdom of Denmark by way of public offering, unless in compliance with the Danish Securities Trading Act (Consolidated Act No. 883 of 9 August 2011, as amended) (in Danish: Værdipapirhandelsloven) and Executive Orders issued thereunder. Finland Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it will not publicly offer the Covered Bonds or bring the Covered Bonds into general circulation in Finland other than in compliance with all applicable provisions of the laws of Finland and especially in compliance with the Finnish Securities Market Act (Arvopaperimarkkinalaki 746/2012), as amended and any regulation or rule made thereunder, as supplemented and amended from time to time. France Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it has not offered or sold and will not offer or sell, directly or indirectly, Covered Bonds to the public in France and it has not distributed or caused to be distributed and will not distribute or cause to be distributed to the public in France, this Base Prospectus, the relevant Final Terms or Pricing Supplement or any other offering material relating to the Covered Bonds and such offers, sales and distributions have been and will be made in France only to (a) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers), and/or (b) qualified investors (investisseurs qualifiés), other than individuals all as defined in, and in accordance with, articles L.411 1, L and D of the French Code monétaire et financier. Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that the offer of Covered Bonds to the public in France will be made only in compliance with the Prospectus Directive and the applicable laws, regulations and procedures in France. This Base Prospectus prepared in connection with the Covered Bonds has not been submitted to the clearance procedures of the French Autorité des marchés financiers (the "AMF"). Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that, unless the approval of this Base Prospectus by the Central Bank has been notified to the AMF in accordance with Article 18 of the Prospectus Directive, as implemented in France, and all the other procedures and formalities required by French laws and regulations to permit the offering (and in which case only for a period of 12 months from the date of such approval) and sale of Covered Bonds in France have been carried out, it has not and will not make an offer of Covered Bonds to the public in France

110 Ireland Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that: (a) (b) (c) it will not underwrite the issue of, or place the Covered Bonds, otherwise than in conformity with the provisions of the European Communities (Markets in Financial Instruments) Regulations 2007 (Nos. 1 to 3) (as amended), including, without limitation, Regulations 7 and 152 thereof or any codes of conduct used in connection therewith and the provisions of the Investor Compensation Act 1998; it will not underwrite the issue of, or place, the Covered Bonds, otherwise than in conformity with the provisions of the Companies Acts 1963 to 2012 (as amended), the Central Bank Acts 1942 to 2011 (as amended) and any codes of conduct rules made under Section 117(1) of the Central Bank Act 1989; and it will not underwrite the issue of, place or otherwise act in Ireland in respect of the Covered Bonds, otherwise than in conformity with the provisions of the Market Abuse (Directive 2003/6/EC) Regulations 2005 (as amended) and any rules issued under Section 34 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005 by the Central Bank of Ireland. Republic of Italy The offering of the Covered Bonds has not been registered pursuant to Italian securities legislation and, accordingly, each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that, save as set out below, it has not offered or sold, and will not offer or sell, any Covered Bonds in the Republic of Italy in an offer to the public and that sales of the Covered Bonds in the Republic of Italy shall be effected in accordance with all Italian securities, tax and exchange control and other applicable laws and regulation. Accordingly, each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it will not offer, sell or deliver any Covered Bonds or distribute copies of this Base Prospectus and any other document relating to the Covered Bonds in the Republic of Italy except: (a) (b) (c) to "qualified investors", as referred to in Article 100 of Legislative Decree No. 58 of 24 February 1998, as amended ("Decree No. 58") and defined in Article 34-ter, paragraph 1, let. b) of CONSOB Regulation No of 14 May 1999, as amended ("Regulation No ") or that it may offer, sell or deliver Covered Bonds or distribute copies of any prospectus relating to such Covered Bonds in an offer to the public in the period commencing on the date of publication of such prospectus, provided that such prospectus has been approved in another Relevant Member State and notified to CONSOB, all in accordance with the Prospectus Directive, and the Directive 2010/73/EU of 24 November 2010 (the "Amending Directive"), as implemented in Italy under Decree 58 and Regulation No , and ending on the date which is 12 months after the date of approval of such prospectus; or in any other circumstances where an express exemption from compliance with the offer restrictions applies, as provided under Decree No. 58 or Regulation No Any such offer, sale or delivery of the Covered Bonds or distribution of copies of this Base Prospectus or any other document relating to the Covered Bonds in the Republic of Italy must be: (a) (b) made by investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with Legislative Decree No. 385 of 1 September 1993 as amended, Decree No. 58, CONSOB Regulation No of 29 October 2007, as amended (the "Banking Act") and any other applicable laws and regulations; in compliance with Article 129 of the Banking Act, as amended, and the implementing guidelines of the Bank of Italy, as amended from time to time, pursuant to which the Bank of Italy may request information on the issue or the offer of securities in the Republic of Italy; and

111 (c) in compliance with any other applicable notification requirement or limitation which may be imposed by CONSOB or the Bank of Italy. Provisions relating to the secondary market in the Republic of Italy Investors should also note that, in any subsequent distribution of the Covered Bonds in the Republic of Italy, Article 100-bis of Decree No. 58 may require compliance with the law relating to public offers of securities. Furthermore, where the Covered Bonds are placed solely with "qualified investors" and are then systematically resold on the secondary market at any time in the 12 months following such placing, purchasers of Covered Bonds who are acting outside of the course of their business or profession may in certain circumstances be entitled to declare such purchase void and, in addition, to claim damages from any authorised person at whose premises the Covered Bonds were purchased, unless an exemption provided for under Decree No. 58 applies. Latvia The Covered Bonds have not been registered under the Financial Instruments Market Law of Latvia and may not be publicly offered or sold in Latvia. Neither the Issuer nor any Dealer has authorised, nor do they authorise, the making of any offer of Covered Bonds in Latvia other than in accordance with the laws of the Republic of Latvia. Lithuania Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that the Covered Bonds have not been offered and will not be offered in Lithuania by way of a public offering, unless in compliance with all applicable provisions of the laws of Lithuania and in particular in compliance with the Law on Securities of the Republic of Lithuania of 18 January 2007 No X-1023 and any regulation or rule made thereunder, as supplemented and amended from time to time. Luxembourg The Covered Bonds may not be offered or sold to the public within the territory of the Grand Duchy of Luxembourg unless: (a) (b) the Commission de Surveillance du Secteur Financier has been provided by the Central Bank of Ireland with a certificate of approval attesting that a prospectus in relation to the Covered Bonds has been drawn up in accordance with the Directive 2003/71/EC of the European Parliament of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading and amending the Prospectus Directive and with a copy of the said prospectus; or the offer of Covered Bonds benefits from an exemption from, or constitutes a transaction not subject to, the requirement to publish a prospectus pursuant to the Luxembourg law of 10 July 2005 on prospectuses for securities and implementing the Prospectus Directive, as amended. The Netherlands For selling restrictions in respect of The Netherlands, see "Public Offer Selling Restriction Under the Prospectus Directive" below and in addition: (a) Specific Dutch selling restriction for exempt offers: Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree that it will not make an offer of Covered Bonds which are the subject of the offering contemplated by this Base Prospectus as completed by the Final Terms or Pricing Supplement in relation thereto to the public in The Netherlands in reliance on Article 3(2) of the Prospectus Directive unless: (i) such offer is made exclusively to persons or legal entities which are qualified investors (as defined in the Dutch Financial Supervision Act (Wet op het financieel toezicht, the "FSA") and which includes authorised discretionary asset managers acting for the account of retail investors under a discretionary investment management contract) in The Netherlands; or

112 (ii) (iii) standard exemption logo and wording are disclosed in the Final Terms or Pricing Supplement as required by Article 5:20(5) of the FSA; or such offer is otherwise made in circumstances in which Article 5:20(5) of the FSA is not applicable, provided that no such offer of Covered Bonds shall require the Issuer or any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive. For the purposes of this provision, the expressions (i) an "offer of Covered Bonds to the public" in relation to any Covered Bonds in The Netherlands and (ii) "Prospectus Directive" have the meaning given to them below in the paragraph headed "Public Offer Selling Restriction Under the Prospectus Directive". (b) Compliance with Dutch Savings Certificates Act: Zero Coupon Covered Bonds (as defined below) in definitive form of the Issuer may only be transferred and accepted, directly or indirectly, within, from or into The Netherlands through the mediation of either the Issuer or a member firm of Euronext Amsterdam N.V. admitted on one or more systems held or operated by Euronext Amsterdam N.V. in full compliance with the Dutch Savings Certificates Act (Wet inzake spaarbewijzen) of 21 May 1985 (as amended) and its implementing regulations. No such mediation is required: (a) in respect of the transfer and acceptance of rights representing an interest in a Zero Coupon Covered Bond in global form, or (b) in respect of the initial issue of Zero Coupon Covered Bonds in definitive form to the first holders thereof, or (c) in respect of the transfer and acceptance of Zero Coupon Covered Bonds in definitive form between individuals not acting in the conduct of a business or profession, or (d) in respect of the transfer and acceptance of such Zero Coupon Covered Bonds within, from or into The Netherlands if all Zero Coupon Covered Bonds (either in definitive form or as rights representing an interest in a Zero Coupon Covered Bond in global form) of any particular Series are issued outside The Netherlands and are not distributed into The Netherlands in the course of initial distribution or immediately thereafter. As used herein "Zero Coupon Covered Bonds" are Covered Bonds that are in bearer form and that constitute a claim for a fixed sum against the Issuer and on which interest does not become due during their tenor or on which no interest is due whatsoever." Norway Covered Bonds denominated in Norwegian Kroner may not be offered or sold within Norway or to or for the account or benefit of persons domiciled in Norway, unless the regulation relating to the offer of VPS Covered Bonds and the registration in the VPS has been complied with. Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it will comply with all laws, regulations and guidelines applicable to the offering of Covered Bonds in Norway. Portugal Each Dealer has represented and agreed, and each and each further Dealer appointed under the Programme will be required to represent and agree, that the Covered Bonds may not be and will not be offered to the public in Portugal or under circumstances which are deemed to be a public offer under the Portuguese Securities Code (Código dos Valores Mobiliários) enacted by Decree-Law no. 486/99 of 13 November 1999, as amended, unless the requirements and provisions applicable to the public offerings in Portugal are met and registration, filing, approval or recognition procedure with the Portuguese Securities Exchange Commission (Comissão do Mercado de Valores Mobiliários, the "CMVM") is made. In particular, the offer of new securities might be made through a private placement (oferta particular), in accordance with the relevant provisions of the Portuguese Securities Code, exclusively to qualified investors (investidores qualificados) within the meaning of Article 30 of the Portuguese Securities Code, and/or to 149 or fewer non-qualified investors. In addition, each Dealer has represented and agreed, and each and each further Dealer appointed under the Programme will be required to represent and agree, that (i) no action has been or will be taken as to directly or indirectly offer, advertise, market, invite to subscribe, gather investment intentions, sell, re-sell, re-offer or deliver any Covered Bonds in circumstances which could qualify as a public offer (oferta pública) of securities pursuant to the

113 Portuguese Securities Code, notably in circumstances which could qualify as a public offer addressed to individuals or entities resident in Portugal or having permanent establishment located in Portuguese territory, as the case may be, and (ii) no action has been or will be taken as to distribute, make available or cause to be distributed the Base Prospectus or any other offering material relating to the Covered Bonds to the public in Portugal, other than in compliance with all applicable provisions of the Portuguese Securities Code, the Prospectus Regulation implementing the Prospectus Directive (Commission Regulation (EC) 809/2004, as amended), any applicable CMVM regulations and all relevant Portuguese securities laws and regulations, in any such case that may be applicable to it in respect of any offer or sale of Covered Bonds in Portugal or to individuals or entities resident in Portugal or having permanent establishment located in Portuguese territory, as the case may be, including the rules and regulations that require the publication of a prospectus, when applicable, and that any placement of the Covered Bonds shall only be authorised and performed to the extent that there is full compliance with such laws and regulations. Spain Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it has only made and will only make an offer of Covered Bonds to the public (oferta pública) in Spain in the period beginning on the date of notification of the approval of this Base Prospectus in relation to the Covered Bonds by the Central Bank of Ireland to the Comisión Nacional del Mercado de Valores (CNMV) in Spain, in accordance with the Spanish Securities Market Act (Ley 24/1988 de 28 de julio, del Mercado de Valores) (the "LMV"), Royal Decree 1310/2005, of 4 November, developing partially the Spanish Securities Market Law as regards admission to listing on official secondary markets, public offers and the prospectus required thereto and the regulations made thereunder, and ending at the latest on the date which is 12 months after the date of the approval of the Prospectus. The Covered Bonds may not be offered or sold in Spain other than by institutions authorised under the LMV and Royal Decree 217/2008, of 15 February, on the legal regime applicable to investment services companies, to provide investment services in Spain, and in compliance with the provisions of the LMV and any other applicable legislation. Sweden Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that no Covered Bonds will be offered to the public in Sweden nor admitted to trading on a regulated market in Sweden unless and until (A) a prospectus in relation to those Covered Bonds has been approved by the competent authority in Sweden or, where appropriate, approved in another Relevant Member State and such competent authority has notified the competent authority in Sweden, all in accordance with the Prospectus Directive and the Swedish Financial Instruments Trading Act; or (B) an exemption from the requirement to prepare a prospectus is available under the Swedish Financial Instruments Trading Act. Public Offer Selling Restriction Under the Prospectus Directive In relation to each Relevant Member State, each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the "Relevant Implementation Date") it has not made and will not make an offer of Covered Bonds which are the subject of the offering contemplated by the Base Prospectus as completed by the Final Terms or Pricing Supplement in relation thereto to the public in that Relevant Member State except that it may, with effect from and including the Relevant Implementation Date, make an offer of such Covered Bonds to the public in that Relevant Member State: (a) (b) Qualified investors: at any time to any legal entity which is a qualified investor as defined in the Prospectus Directive; Fewer than 100 offerees: at any time to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to

114 obtaining the prior consent of the relevant Dealer or Dealers nominated by the Issuer for any such offer; or (c) Other exempt offers: at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Covered Bonds referred to in (a) to (c) above shall require the Issuer or any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive, or supplement a prospectus pursuant to Article 16 of the Prospectus Directive. For the purposes of this provision, the expression an "offer of Covered Bonds to the public" in relation to any Covered Bonds in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Covered Bonds to be offered so as to enable an investor to decide to purchase or subscribe the Covered Bonds, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression "Prospectus Directive" means Directive 2003/71/EC (as amended) and the expression "2010 PD Amending Directive" means Directive 2010/73/EU. Selling Restrictions Addressing Additional United Kingdom Securities Laws Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that: (a) (b) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any Covered Bonds in circumstances in which Section 21(1) of the FSMA would not, if the Issuer was not an authorised person, apply to the Issuer; and it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Covered Bonds in, from or otherwise involving the United Kingdom. The United States of America The Covered Bonds have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons, except in accordance with Regulation S or pursuant to an exemption from the registration requirements of the Securities Act. Terms used in this paragraph have the meanings given to them by Regulation S under the Securities Act. Covered Bonds in bearer form are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to United States persons, except in certain transactions permitted by U.S. Treasury regulations. Terms used in this paragraph have the meanings given to them by the United States Internal Revenue Code and Treasury regulations promulgated thereunder. The applicable Final Terms (or Pricing Supplement, in the case of Exempt Covered Bonds) will identify whether TEFRA C rules or TEFRA D rules apply or whether TEFRA is not applicable. Each Dealer has agreed or will agree and each further Dealer appointed under the Programme will be required to represent and agree, that, except as permitted by the Dealership Agreement, it has not offered, sold or delivered, and will not offer, sell or deliver, Covered Bonds of any Tranche (a) as part of their distribution at any time or (b) otherwise until 40 days after the later of the date of issue of the relevant Tranche of Covered Bonds and the completion of the distribution of such Tranche as certified to the Fiscal Agent or the Issuer by the relevant Dealer(s) within the United States or to, or for the account or of benefit of, U.S. persons, and that it will have sent to each Dealer to which it sells Covered Bonds of such Tranche during the distribution compliance period a confirmation or other notice setting forth the restrictions on offers and sales of such Covered Bonds within the United States or to, or for the account of benefit of, U.S. persons. In addition, until 40 days after the commencement of the offering of any Tranche of Covered Bonds an offer or sale of Covered Bonds of such Tranche within the United States by a Dealer (whether or not

115 participating in the offering of such Covered Bonds) may violate the registration requirements of the Securities Act. Japan The Covered Bonds have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) and, accordingly, each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it will not offer or sell any Covered Bonds directly or indirectly, in Japan or to, or for the benefit of, any Japanese Person or to others for re-offering or resale, directly or indirectly, in Japan or to any Japanese Person except under circumstances which will result in compliance with all applicable laws, regulations and guidelines promulgated by the relevant Japanese governmental and regulatory authorities and in effect at the relevant time. For the purposes of this paragraph, "Japanese Person" shall mean any person resident in Japan, including any corporation or other entity organised under the laws of Japan. Hong Kong Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that (i) it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any Covered Bonds other than (a) to "professional investors" as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a "prospectus" as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance; and (ii) it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Covered Bonds, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Covered Bonds which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" as defined in the Securities and Futures Ordinance and any rules made under that Ordinance. Singapore Each Dealer has acknowledged, and each further Dealer appointed under the Programme will be required to acknowledge, that this Base Prospectus has not been and will not be registered as a prospectus with the Monetary Authority of Singapore under the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"). Accordingly, each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it has not offered or sold any Covered Bonds or caused any Covered Bonds to be made the subject of an invitation for subscription or purchase nor will it offer or sell Covered Bonds or cause any Covered Bonds to be made the subject of an invitation for subscription or purchase, nor has it circulated or distributed nor will it circulate or distribute this Base Prospectus or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of any Covered Bonds, whether directly or indirectly, to persons in Singapore other than (a) to an institutional investor (as defined in Section 4A of the SFA) pursuant to Section 274 of the SFA, (b) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to an offer referred to in Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Where the Covered Bonds are subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) (b) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferred within six months after that

116 corporation or that trust has acquired the Covered Bonds pursuant to an offer made under Section 275 of the SFA, except: (i) (ii) (iii) (iv) to an institutional investor under Section 274 of the SFA or to a relevant person (as defined in Section 275(2) of the SFA), or (in the case of such corporation) where the transfer arises from an offer referred to in Section 276(3)(i)(B) of the SFA or (in the case of such trust) where the transfer arises from an offer referred to in, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA; where no consideration is or will be given for the transfer; where the transfer is by operation of law; or as specified in Section 276(7) of the SFA. General Each Dealer has acknowledged that: (a) (b) (c) with the exception of the approval by the Central Bank of this Base Prospectus as a base prospectus issued in compliance with the Prospectus Directive, no action has been or will be taken in any country or jurisdiction by the Issuer or the Dealers that would permit a public offering of Covered Bonds, or possession or distribution of any offering material in relation thereto, in any country or jurisdiction where action for that purpose is required. Persons into whose hands this Base Prospectus or any Final Terms or Pricing Supplement comes are required by the Issuer and the Dealers to comply with all applicable laws and regulations in each country or jurisdiction in or from which they purchase, offer, sell or deliver Covered Bonds or have in their possession or distribute such offering material, in all cases at their own expense; the Dealership Agreement provides that the Dealers shall not be bound by any of the restrictions relating to any specific jurisdiction (set out above) to the extent that such restrictions shall, as a result of change(s) or change(s) in official interpretation, after the date hereof, of applicable laws and regulations, no longer be applicable but without prejudice to the obligations of the Dealers described in the paragraph headed "General" above; and selling restrictions may be supplemented or modified with the agreement of the Issuer. Any such additional selling restrictions in respect of a jurisdiction not set out herein will be set out in the relevant subscription agreement or dealer accession letter (in the case of an additional selling restriction in respect of a jurisdiction not set out herein relevant only to a particular Tranche of Covered Bonds) or (in case of a supplement, modification or in any other case) in a supplement to this document

117 GENERAL INFORMATION 1. The establishment of the Programme was authorised by a duly convened meeting of the Board of Directors of the Issuer held on 26 April The Issuer is not nor has it been involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Issuer is aware) during the 12 months before the date of this Base Prospectus which may have, or have had in such period, significant effects on the financial position or profitability of the Issuer. 3. Since 31 December 2012, the date to which the latest audited financial statements of the Issuer were prepared, there has been no material adverse change in the prospects of the Issuer, and since 31 March 2013, the date to which the latest unaudited interim financial statements of the Issuer were prepared, there has been no significant change in the financial or trading position of the Issuer. 4. The financial statements of the Issuer as of and for the years ended 31 December 2012 and 2011, were audited by KPMG AS. KPMG AS are independent auditors in accordance with laws, regulations and auditing standards and practices generally accepted in Norway. The financial statements and KPMG AS audit reports are included in Annex 2 and Annex 3 of the Base Prospectus. 5. For the twelve months following the date of this Base Prospectus, physical copies and, where appropriate, English translations of the following documents may be inspected during normal business hours at the specified office of the Fiscal Agent in London and the registered office of the Issuer: (a) (b) (c) (d) (e) (f) (g) (h) the certificate of Registration and Articles of Association of the Issuer; the Fiscal Agency Agreement (as amended from time to time) (which contains the forms of the Covered Bonds); the Deed of Covenant (as supplemented from time to time); the Dealership Agreement (as amended from time to time); the unaudited interim financial statements of the Issuer for the period ended 31 March 2013 and the audited financial statements of the Issuer for the years ended 31 December 2012 and 31 December 2011, including any audit reports relating thereto; this Base Prospectus, together with any supplements thereto; and the Final Terms or Pricing Supplement for issues listed on any stock exchange and issued pursuant to this Base Prospectus; and the Issuer-ICSDs Agreement. Translations into English of any document listed above which is not in the English language are accurate and direct translations of the relevant document. In the event of any discrepancy between the English language version and the original language version of any such document, the original language version shall prevail. 6. The Covered Bonds have been accepted for clearance through Euroclear and Clearstream, Luxembourg, or, in the case of VPS Covered Bonds, the VPS, or in the case of Swiss Franc Covered Bonds, the SIS. The appropriate common code and the International Securities Identification Number in relation to the Covered Bonds of each Tranche will be specified in the relevant Final Terms or Pricing Supplement. The relevant Final Terms or Pricing Supplement shall specify any other clearing system as shall have accepted the relevant Covered Bonds for clearance together with any further appropriate information. The address of Euroclear is Euroclear Bank SA/NV, 1 Boulevard du Roi Albert II, B-1210 Brussels and the address of Clearstream, Luxembourg is Clearstream Banking, 42 Avenue JF Kennedy, L-1855 Luxembourg

118 7. The address of VPS is Norwegian Central Securities Depository, VPS ASA, P.O. Box 4, 0051 Oslo, Norway. 8. It is expected that each Series of Covered Bonds which is to be admitted to listing on the Official List of the Irish Stock Exchange and to trading on the Main Securities Market will be admitted separately as and when issued, subject only to the issue of a Temporary Covered Bond initially representing the Covered Bonds of such Series or, as the case may be, the relevant Registered Covered Bonds and the approval of the Programme in respect of such Covered Bond(s) will be granted on or about 17 June Settlement arrangements will be agreed between the Issuer, the relevant Dealer and the Fiscal Agent or, as the case may be, the Registrar in relation to each Series. 10. There are no material contracts having been entered into outside the ordinary course of the Issuer's business and which could result in any Nordea Group member being under an obligation or entitlement that is material to the Issuer's ability to meet its obligation to Holders in respect of the Covered Bonds being issued. 11. The price and amount of Covered Bonds to be issued under the Programme will be determined by the Issuer and the relevant Dealer at the time of issue in accordance with prevailing market conditions. 12. Certain of the Dealers and their affiliates have engaged, and may in the future engage, in investment banking and/or commercial banking transactions with, and may perform services to the Issuer and its affiliates in the ordinary course of business. In addition, in the ordinary course of their business activities, the Dealers and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of the Issuer or the Issuer's affiliates. Certain of the Dealers of their affiliates that have a lending relationship with the Issuer routinely hedge their credit exposure to the Issuer consistent with their customary risk management policies. Typically, such Dealers and their affiliates would hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in securities, including potentially the Covered Bonds issued under the Programme. Any such short positions could adversely affect future trading prices of Covered Bonds issued under the Programme. The Dealers and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments. 13. Arthur Cox Listing Services Limited is acting solely in its capacity as listing agent for the Issuer in relation to the Covered Bonds and is not itself seeking admission of the Covered Bonds to listing on the Official List of the Irish Stock Exchange and to trading on the Main Securities Market for the purposes of the Prospectus Directive

119 GLOSSARY OF CERTAIN DEFINED TERMS Covered Bond Legislation cover pool derivative transactions register The Norwegian Act No. 40 of 10 June 1988 on Financing Activity and Financial Institutions, Chapter 2, Sub-Chapter IV and appurtenant regulations. The pool of assets entered into the register as assigned to the covered bonds in accordance with the Covered Bond Legislation. Derivatives transactions entered into by the issuer to hedge against the risks relating to covered bonds or their underlying collateral and recorded in the register. The register of covered bonds which the issuer is required to maintain pursuant to the Covered Bond Legislation

120 ANNEX 1 Q1 INTERIM FINANCIAL STATEMENTS OF THE ISSUER FOR THE PERIOD ENDED 31 MARCH

121 Income statements NOK 1000 Note Jan-Mar 2013 Jan-Mar 2012 Year 2012 Interest and related income on loans and deposits with financial institutions 1,207 1,147 7,524 Interest and related income on loans to customers 1,086, ,572 3,989,908 Other interest and related income Total interest and related income 1,087, ,720 3,997,624 Interest and related expense on liabilities to financial institutions 123, , ,708 Interest and related expense on securities issued 525, ,934 2,092,810 Interest and related expense on subordinated loan capital 10,349 13,084 48,031 Other interest and related expense -6,246 61, ,568 Total interest and related expense 652, ,295 2,757,117 Net interest income 435, ,425 1,240,507 Fee and commission income 13,080 12,279 53,787 Fee and commission expense ,263 Net fee and commission income 12,627 11,715 50,524 Net result from items at fair value 3 1,490-4,103-13,998 Total operating income 449, ,037 1,277,034 Staff costs ,285 Other expenses 34,611 36, ,799 Total operating expenses 35,218 36, ,084 Profit before loan losses 413, ,058 1,128,949 Loan losses (negative figures are reversals) 4-2,074 2,695-8,021 Operating profit 415, ,362 1,136,970 Income tax expense 116,486 55, ,284 Net profit for the period 299, , ,686 Attributable to: Shareholder of Nordea Eiendomskreditt AS 299, , ,686 Total 299, , ,686 Statements of comprehensive income NOK 1000 Jan-Mar 2013 Jan-Mar 2012 Year 2012 Net profit for the period 299, , ,686 Defined benefit plans: Remeasurement of defined benefit plans Tax on remeasurement of defined benefit plans Other comprehensive income, net of tax Total comprehensive income 299, , ,102 Attributable to: Shareholder of Nordea Eiendomskreditt AS 299, , ,102 Total 299, , ,102 1 Figures for 2012 are restated, see note 1 Accounting policies for further details. Nordea Eiendomskreditt AS Interim Report, 1st quarter

122 Balance sheets NOK 1000 Note 31 Mar Mar Dec 2012 Assets 5 Loans to credit institutions, payable on demand 390, ,246 83,468 Total loans to credit institutions 390, ,246 83,468 Loans and receivables to the public 4 116,689, ,538, ,772,332 Deferred tax assets Total intangible assets Derivatives 6 2,186, ,520 1,232,911 Fair value changes of the hedged items in portfolio hedge of interest rate risk 322, , ,186 Other assets 0 69, Total other assets 2,508,110 1,406,599 1,586,756 Accrued income and prepaid expenses 277, , ,151 Total assets 119,866, ,374, ,631,707 Liabilities and equity 5 Deposits by credit institutions, payable on demand Deposits by credit institutions, fixed term 22,800,000 18,550,000 21,900,000 Total deposits by credit institutions 22,800,581 18,550,000 21,900,670 Debt securities in issue 86,652,047 77,001,420 83,792,777 Derivatives 6 476, , ,898 Fair value changes of the hedged items in portfolio hedge of interest rate risk 1,092, ,055 1,121,077 Current tax liabilities 344,358 5, ,104 Other liabilities 100, ,860 Total other liabilities 2,013,696 1,065,816 2,017,939 Accrued expenses and prepaid income 620, , ,777 Provisions Retirement benefit obligations 2,377 3,829 2,639 Deferred tax 61, ,322 61,750 Total provisions for other liabilities and expenses 64, ,525 64,669 Subordinated loan capital 780, , ,000 Total subordinated liabilities 780, , ,000 Share capital 1,686,990 1,533,627 1,686,990 Share premium reserve 1,446, ,446,637 Other reserves Retained earnings 3,501,832 2,686,147 3,501,832 Total equity 6,635,875 4,219,774 6,635,875 Net profit for the period 299, ,820 0 Total equity 6,935,370 4,362,594 6,635,875 Total liabilities and equity 119,866, ,374, ,631,707 Assets pledged as security for own liabilities 109,520,904 93,558, ,657,701 Contingent liabilities 3,098 3,921 3,098 Commitments 10,796,469 8,137,642 10,175,614 Nordea Eiendomskreditt AS Interim Report, 1st quarter

123 Statements of changes in equity Other reserves / NOK 1000 Share capital 1) Share premium reserve Defined benefit plans Retained earnings Total equity Opening balance at 1 Jan ,686,990 1,446, ,501,832 6,635,875 Total comprehensive income 299, ,495 Group contribution 0 0 Closing balance at 31 Mar ,686,990 1,446, ,801,327 6,935,370 Other reserves / NOK 1000 Share capital 1) Share premium reserve Defined benefit plans Retained earnings Total equity Reported opening balance at 1 Jan ,533, ,687,307 4,220,934 Restatement due to changed accounting policy 2-1,161-1,161 Restated opening balance at 1 Jan ,533, ,686,146 4,219,773 Total comprehensive income , ,102 Increase of share capital 153,363 1,446,637 1,600,000 Group contribution 0 0 Closing balance at 31 Dec ,686,990 1,446, ,501,832 6,635,875 Other reserves / NOK 1000 Share capital 1) Share premium reserve Defined benefit plans Retained earnings Total equity Reported opening balance at 1 Jan ,533, ,687,307 4,220,934 Restatement due to changed accounting policy 2-1,161-1,161 Restated opening balance at 1 Jan ,533, ,686,146 4,219,773 Total comprehensive income 2 142, ,820 Group contribution 0 0 Closing balance at 31 Mar ,533, ,828,966 4,362,594 1 The company s share capital at 31 March 2013 was NOK ,-. The number of shares was , each with a quota value of NOK 110,-. All shares are owned by Nordea Bank Norge ASA. 2 Related to amended IAS 19, see note 1 Accounting policies for more information Nordea Eiendomskreditt AS Oslo, 15 May 2013 Jon Brenden Chairman of the Board Børre Gundersen Member of the Board Fanny Borgström Member of the Board Eva I. E. Jarbekk Member of the Board Monica Blix Member of the Board Marianne Glatved Managing director Nordea Eiendomskreditt AS Interim Report, 1st quarter

124 Cash flow statements NOK 1000 Jan-Mar 2013 Jan-Mar 2012 Year 2012 Operating activities Operating profit before tax 415, ,347 1,136,909 Income taxes paid -62,231-94, ,100 Adjustments for items not included in cash flow -973 Change in write-downs to provide for loan losses -2,256 2,775-10,831 Cash flow from operating activities before changes in op. assets and liab. 350, ,717 1,003,978 Changes in operating assets and liabilities Change in loans to the public -2,915,235-12,003,676-25,224,046 Change in debt securities in issue 2,859,270 8,034,844 14,826,201 Change in deposits by credit institutions 899,911 3,300,000 6,650,670 Change in other receivables -1,010, , ,900 Change in other liabilities 122,450-47, ,172 Cash flow from operating activities 306,864 93,653-1,670,125 Investing activities Change in loans and receivables to credit institutions, fixed terms Change in holdings of bearer bonds issued by others Cash flow from investing activities Financing activities Group contribution/dividend paid Change in subordinated loan capital Recognised directly in equity 0 0 1,600,000 Cash flow from financing activities 0 0 1,600,000 Cash flow for the period 306,864 93,653-70,125 Cash and cash equivalents at beginning of period 83, , ,593 Cash and cash equivalents at end of period 390, ,246 83,468 Change 306,864 93,653-70,125 Cash and cash equivalents comprise loans to finance institutions with no fixed maturity (bank deposits). Nordea Eiendomskreditt AS Interim Report, 1st quarter

125 Notes to the financial statement Note 1 Accounting policies The accounts of Nordea Eiendomskreditt AS have been prepared in accordance with the Norwegian Accounting Act and the International Financial Reporting Standards (IFRS) and interpretation of such standards by the International Financial Reporting Standards Interpretation Committee (IFRS IC), as endorsed by the EU Commission. The interim accounts for the period 1 January to 31 March 2013 are presented in accordance with IAS 34 Interim Financial Reporting. Changed accounting policies and presentation The accounting policies, basis for calculations and presentation are, in all material aspects, unchanged in comparison with the 2012 Annual Report, except for the presentation of defined benefit plans as described below. The new standard IFRS 13 Fair Value Measurement was implemented in the first quarter 2013 but has not had any impact on the measurement of assets or liabilities. The additional disclosures required by IFRS 13 on a quarterly basis are presented in Note 7 Fair value of financial assets and liabilities and Note 8 Financial assets and liabilities measured at fair value on the balance sheet. 31 Dec Mar Jan 2012 New Old New Old New Old NOKt policy policy policy policy policy policy Net retirement benefit obligastions 2,639 1,667 3,829 2,232 3,747 2,135 Net deferred tax 61,750 62, , ,769 34,243 33,792 Other comprehensive income, net of tax Retained earnings 3,501,832 3,502,949 2,828,967 2,830,117 2,686,146 2,687,307 At transition 1 January 2013 the negative impact on equity was NOK 700t after deduction of income tax and the core tier 1 capital was reduced by NOK 972t, including the impact from changes in deferred tax assets. Exchange rates Jan-Mar Full year Jan-Mar USD 1 = NOK Income statement (average) Balance sheet (at end of period) IAS 32 Financial Instruments: Presentation and IFRS 7 Financial Instruments: Disclosures have been amended as regards offsetting of financial assets and financial liabilities. Nordea has implemented these changes in the first quarter There was no impact from the amendment to IAS 32, while the additional disclosures required by IFRS 7 are presented in Note 9 Financial instruments set off on balance or subject to master netting agreements. IAS 19 Employee Benefits The amended IAS 19 Employee Benefits was implemented 1 January A detailed description of these changes is included in the Annual Report 2012, Note 1 Accounting policies section 3 Changes in IFRSs not yet applied by Nordea. The comparative figures have been restated accordingly and are disclosed in the below tables. The impact on the first quarter 2013 is not significant. Q Full year 2012 New Old New Old NOKt policy policy policy policy Staff costs ,285 2,346 Income tax expence 55,542 55, , ,267 Other comprehensive income, net of tax Nordea Eiendomskreditt AS Interim Report, 1st quarter

126 Note 2 Segment information The activities of Nordea Eiendomskreditt AS represent a single segment. This is a result of the manner in which the company is organised and managed, including the system for internal reporting whereby the business is to all practical purposes managed as a single segment. The services provided by Nordea Eiendomskreditt AS are judged to be subject to the same risks and yield requirements. Nordea Eiendomskreditt AS is part of the Retail Banking segment of the Nordea Bank Norge group. Note 3 Net result from items at fair value NOK 1000 Jan-Mar 2013 Jan-Mar 2012 Year 2012 Interest-bearing securities ,585 Other financial instruments 2,412-4,103-12,413 Foreign exchange gains/losses Total 1,490-4,103-13,998 Net gains/losses for categories of financial instruments NOK 1000 Jan-Mar 2013 Jan-Mar 2012 Year 2012 Foreign currency derivatives Financial instruments under hedge accounting 2,412-4,103-12,413 - of which net losses on hedged items , ,016 - of which net gains on hedging instruments 2,785-8, ,603 Other financial liabilities ,585 Total 1,490-4,103-13,998 Nordea Eiendomskreditt AS Interim Report, 1st quarter

127 Note 4 Loans and impairment Loan losses NOK 1000 Jan-Mar 2013 Jan-Dec 2012 Jan-Mar 2012 Change in allowances for individually assessed loans -2,400 10,370 2,697 Change in allowances for collectively assessed loans ,200 0 Realised loan losses in the period 182 2,815 0 Recoveries of loan losses realised previous years Total loan losses for the period -2,074-8,021 2,695 Reconciliation of allowance accounts for impaired loans NOK 1000 Jan-Mar 2013 Jan-Dec 2012 Jan-Mar 2012 Individually Collectively Individually Collectively Individually Collectively assessed assessed Total assessed assessed Total assessed assessed Total Opening balance at beginning of period 21,634 11,800 33,434 11,264 33,000 44,264 11,264 33,000 44,264 Provisions 1, ,781 14, ,026 2, ,846 Reversals -3, ,146-3,429-21,200-24, Changes through the income statement -1, ,365 10,597-21,200-10,603 2, ,697 Allowances used to cover write-offs Closing balance at end of period 19,234 11,944 31,178 21,634 11,800 33,434 14,039 33,000 47,039 Loans and their impairment NOK Mar Dec Mar 2012 Loans, not impaired 116,678, ,762, ,538,510 Impaired loans; 42,184 43,135 46,886 - Performing 3,632 3,630 8,296 - Non-performing 38,552 39,505 38,590 Loans before allowances 116,721, ,805, ,585,396 Allowances for individually assessed impaired loans; -19,234-21,634-14,039 - Performing -1,142-1,151-2,062 - Non-performing -18,091-20,482-11,977 Allowances for collectively assessed impaired loans -11,944-11,800-33,000 Allowances -31,178-33,434-47,039 Loans, carrying amount 116,689, ,772, ,538,357 Key ratios 31 Mar Dec Mar 2012 Impairment rate, gross 1, in % Impairment rate, net 2, in % Total allowance rate 3, in % Allowance rate, impaired loans 4, in % Total allowances in relation to impaired loans, in % Non-performing loans, not impaired 5, in NOK , , ,061 1 Individually assessed impaired loans before allowances divided by total loans before allowances. 2 Individually assessed impaired loans after allowances divided by total loans before allowances. 3 Total allowances divided by total loans before allowances, 4 Allowances for individually assessed impaired loans divided by individually assessed impaired loans before allowances. 5 Past due loans, not impaired due to future cash flows (included in Loans, not impaired). Nordea Eiendomskreditt AS Interim Report, 1st quarter

128 Note 5 Classification of financial instruments Of the assets listed below, Loans to credit institutions, Loans to the public, Derivatives, as well as accrued interest on these items, are exposed to credit risk. The exposure equals the book value presented in the tables below. Assets Loans and receivables Assets at fair value through profit and loss Derivatives used for hedging Available for sale Non-financial assets Total Loans to credit institutions 390, ,332 Loans to the public 116,689, ,689,824 Derivatives 2,186,012 2,186,012 Fair value changes of the hedged items in portfolio hedge of interest rate risk 322, ,099 Deferred tax assets 0 Other assets 0-2,093 Prepaid expenses and accrued income 277, ,942 Total 31 Mar ,682, ,186, ,866,116 Total 31 Dec ,045, ,586, ,631,708 Total 31 Mar ,426, , ,374,278 Liabilities Liabilities at fair value through profit and loss Derivatives used for hedging Other financial liabilities Non-financial liabilities Total Deposits by credit institutions 22,800,581 22,800,581 Debt securities in issue 86,652,047 86,652,047 Derivatives 476, ,392 Fair value changes of the hedged items in portfolio hedge of interest rate risk 1,092,110 1,092,110 Current tax liabilities 344, ,358 Other liabilities 101, ,115 Accrued expenses and prepaid income 620, ,015 Retirement benefit obligations 2,377 2,377 Deferred tax liabilities 61,750 61, , ,000 Total 31 Mar , ,324,737 1,129, ,930,745 Total 31 Dec ,725, ,473, , ,995,131 Total 31 Mar ,976 96,882, ,083 98,010,534 Nordea Eiendomskreditt AS Interim Report, 1st quarter

129 Note 6 Derivatives and hedge accounting 31 Mar 2013 Fair value NOK 1000 Positive Negative Total nominal amount Derivatives used for hedge accounting: Interest rate swaps 1,330, ,392 63,597,917 Currency interest rate swaps 855,783 17,599,375 Total 2,186, ,392 81,197,292 Total derivatives 2,186, ,392 81,197, Dec 2012 Fair value NOK 1000 Positive Negative Total nominal amount Derivatives used for hedge accounting: Interest rate swaps 1,220, ,293 75,963,851 Currency interest rate swaps 12,301 62,605 16,708,276 Total 1,232, ,898 92,672,127 Total derivatives 1,232, ,898 92,672, Mar 2012 Fair value NOK 1000 Positive Negative Total nominal amount Derivatives used for hedge accounting: Interest rate swaps 622, ,976 43,862,643 Currency interest rate swaps 324,673 17,079,964 Total 947, ,976 60,942,607 Total derivatives 947, ,976 60,942,607 Nordea Eiendomskreditt AS Interim Report, 1st quarter

130 Note 7 Fair value of financial assets and liabilities 31 Mar 2013 NOK 1000 Carrying amount Fair value Assets Loans and receivables to credit institutions 390, ,332 Loans and receivables to the public 116,689, ,689,824 Derivatives 2,186,012 2,186,012 Fair value changes of the hedged items in portfolio hedge of interest rate risk 322, ,099 Other assets 0 0 Prepaid expenses and accrued income 277, ,849 Total assets 119,866, ,866,116 Carrying amount Fair value Liabilities Deposits by credit institutions 22,800,581 22,799,019 Debt securities in issue 86,652,047 86,757,107 Derivatives 476, ,392 Fair value changes of the hedged items in portfolio hedge of interest rate risk 1,092,110 1,092,110 Current tax liabilities 344, ,358 Other liabilities 101, ,115 Accrued expenses and prepaid income 620, ,015 Retirement benefit obligations 2,377 2,377 Deferred tax liabilities 61,750 61,750 Subordinated liabilities 780, ,985 Total liabilities 112,930, ,034,228 The determination of fair value is described in the Annual Report 2012 note 17 Assets and liabilities at fair value. Nordea Eiendomskreditt AS Interim Report, 1st quarter

131 Note 8 Financial assets and liabilities measured at fair value in the balance sheet Categorisation into fair value hierarchy Quoted prices in active markets for same instrument 31 Mar 2013 Valuation technique using observable data Valuation technique using non-observable data NOK 1000 (Level 1) (Level 2) (Level 3) Financial assets 1 Loans and receivables to the public Interest-bearing securities Derivatives Total assets Financial liabilities 1 Debt securities in issue Derivatives Total liabilities Are measured at fair value on a recurring basis at the end of each reporting period. Financial assets and liabilities with offsetting positions in market risk and counterparty risk are measured on the basis of the price that would be received to sell the net asset position or paid to transfer the net liability position for that risk exposure. For more information about valuation techniques and inputs used in the fair value measurement, see the Annual Report 2012, note 17 Assets and liabilities at fair value. Nordea Eiendomskreditt AS Interim Report, 1st quarter

132 Note 9 Financial instruments set off on balance or subject to netting agreements Gross recognised financial assets 1) Gross recognised financial liabilities set off on the balance sheet Net carrying amount on the balance sheet Amounts not set off but subject to master netting agreements and similar agreements Financial instruments Financial collateral received Cash collateral received Net amount 31 March 2013, NOKt Assets Derivatives Reverse repurchase agreements 0 0 Securities borrowing agreements 0 0 Loans 0 0 Variation margin 0 0 Other 0 0 Total Gross recognised financial liabilities 1) Gross recognised financial assets set off on the balance sheet Net carrying amount on the balance sheet Amounts not set off but subject to master netting agreements and similar agreements Financial instruments Financial collateral pledged Cash collateral pledged Net amount 31 March 2013, NOKt Liabilities Derivatives Repurchase agreements 0 0 Securities lending agreements 0 0 Deposits 0 0 Variation margin 0 0 Other 0 0 Total ) All amounts are measured at fair value. Gross recognised financial assets 1) Gross recognised financial liabilities set off onthe balance sheet Net carrying amount on the balance sheet Amounts not set off but subject to master netting agreements and similar agreements Financial instruments Financial collateral received Cash collateral received Net amount 31 March 2012, NOKt Assets Derivatives Reverse repurchase agreements 0 0 Securities borrowing agreements 0 0 Loans 0 0 Variation margin 0 0 Other 0 0 Total Nordea Eiendomskreditt AS Interim Report, 1st quarter

133 Note 9 Financial instruments set off on balance or subject to netting agreements cont. Gross recognised financial liabilities 1) Gross recognised financial assets set off on the balance sheet Net carrying amount on the balance sheet Amounts not set off but subject to master netting agreements and similar agreements Financial instruments Financial collateral pledged Cash collateral pledged Net amount 31 March 2012, NOKt Liabilities Derivatives Repurchase agreements 0 0 Securities lending agreements 0 0 Deposits 0 0 Variation margin 0 0 Other 0 0 Total ) All amounts are measured at fair value. Enforcable master netting arrangements and similar agreements The fact that financial instruments are being accounted for on a gross basis on the balance sheet, would not imply that the financial instruments are not subject to master netting agreements or similar arrangements. Generally financial instruments (derivatives, repos and securities lending transactions), would be subject to master netting agreements, and as a consequence Nordea would be allowed to benefit from netting both in the ordinary course of business and in the case of default towards its counter parties, in any calculations involving counterparty credit risk. The reason why the netted exposures are not reflected under assets and liabilities on the balance sheet, would in most instances depend on the limited application of net settlement of financial transactions. Nordea Eiendomskreditt AS Interim Report, 1st quarter

134 Note 10 Capital adequacy Capital base 31 Mar 31 Dec 31 Mar NOKm Core tier 1 capital Tier 1 capital Capital base Excluding profit for the period, except for year-end which is including profit. 31 Mar 31 Mar 31 Dec 31 Dec 31 Mar 31 Mar Capital requirement NOKm Capital requirement RWA Capital requirement RWA Capital requirement RWA Credit risk , ,536 1,279 15,990 IRB 760 9, ,069 1,247 15,582 - of which corporate of which institutions of which retail 760 9, ,069 1,247 15,582 of which retail SME of which retail real estate 686 8, ,084 1,172 14,648 of which retail other of which other Standardised of which sovereign of which retail of which other Market risk of which trading book, Internal Approach of which trading book, Standardised Approach of which banking book, Standardised Approach Operational risk 109 1, Standardised 109 1, Sub total , ,442 1,352 16,896 Adjustment for transition rules Additional capital requirement according to transition rules 3,241 40,510 3,020 37,745 2,199 27,486 Total 4,158 51,976 4,015 50,187 3,551 44,382 Capital ratio excl. transition rules 31-Mar 31-Dec 31-Mar Core tier 1 capital ratio 1, % 57,6 53,0 24,6 Tier 1 capital ratio 1, % 57,6 53,0 24,6 Capital base ratio 1, % 64,1 58,9 28,8 1 Excluding profit for the period, except for year-end which is including profit. Nordea Eiendomskreditt AS Interim Report, 1st quarter

135 Note 10 Capital adequacy cont. Capital ratio incl. transition rules 31-Mar 31-Dec 31-Mar Core tier 1 capital ratio 1, % 12,7 13,1 9,4 Tier 1 capital ratio 1, % 12,7 13,1 9,4 Capital base ratio 1, % 14,1 14,6 11,0 1 Excluding profit for the period, except for year-end which is including profit. Analysis of capital requirements Exposure class, 31-Mar 2013 Average risk weight (%) Capital requirement (NOKm) Corporate IRB - - Institutions IRB - - Retail IRB Sovereign - - Other Total credit risk Nordea Eiendomskreditt AS Interim Report, 1st quarter

136 Note 11 Risks and uncertainties Nordea Eiendomskreditt s sole business activity is secured residential lending, and the company s main risk exposure is the ability of its borrowers to service their loans. Secondly, the company is exposed to changes in the residential property market. Nordea Eiendomskreditt is also exposed to risks such as market risk, liquidity risk and operational risk. Further information on the composition of the company s risk exposure and risk management can be found in the Annual Report for The company does not anticipate that the exposures and risks mentioned above will have any material adverse effect on the company over the next three months. Note 12 Transactions with related parties Nordea Eiendomskreditt considers that its related parties include its parent company, other companies in the Nordea group, and key persons in senior positions. Interest rate risk and currency risk that arise as part of Nordea Eiendomskreditt s normal business activities, are hedged using interest rate and currency swaps. The parent bank, Nordea Bank Norge ASA is counterparty to all derivative contracts. The volume and fair value of the derivative contracts are shown in note 6. Nordea Bank Norge also provides short term funding to Nordea Eiendomskreditt, and the bank has bought bonds issued by Nordea Eiendomskreditt worth of NOK 20 billion as at 31 march NOK 17.8 billion hereof are exchanged with government securities in the swap arrangements provided by Norges Bank. Only Nordea Bank Norge can be counterpart to Norges Bank for bonds issued by Nordea Eiendomskreditt. Loans to the public, that make up Nordea Eiendomskreditt s cover pool, are purchased from Nordea Bank Norway. Instalments, early redemptions and refinancings will reduce the company s loan portfolio. Loans that cease to be a part of the portfolio, are replaced by new purchases of loans from the parent bank. This year to date, loans amounting to NOK 11.5 billion have been transferred from Nordea Bank Norway to Nordea Eiendomskreditt. The loans transferred are continued to be managed by Nordea Bank Norway. For this service Nordea Eiendomskreditt has paid Nordea Bank Norway an amount of NOK 32.1 million in the first three months of Nordea Eiendomskreditt also buys services related to funding and risk control, accounting and reporting from other Nordea companies according to agreements entered into. All group internal transactions are settled according to the arms length principle. Nordea Eiendomskreditt AS Interim Report, 1st quarter

137 ANNEX 2 - AUDITED FINANCIAL STATEMENTS OF THE ISSUER FOR THE YEAR ENDED 31 DECEMBER 2012, INCLUDING THE AUDITOR'S REPORT AND NOTES RELATING THERETO

138 Income statements NOK 1000 Note Interest and related income on loans and deposits with financial institutions 20 7,524 4,169 Interest and related income on loans to customers 3,989,908 3,000,814 Other interest and related income Total interest and related income 3,997,624 3,005,451 Interest and related expense on liabilities to financial institutions , ,324 Interest and related expense on securities issued 20 2,092,810 1,950,216 Interest and related expense on subordinated loan capital 48,031 4,891 Other interest and related expense 140, ,523 Total interest and related expense 2,757,117 2,442,954 Net interest income 1,240, ,497 Fee and commission income 53,787 35,345 Fee and commission expense 20 3,263 1,857 Net fee and commission income 50,524 33,488 Net result from items at fair value 3, 20-13, ,615 Total operating income 1,277, ,600 Staff costs 4, 12 2,346 2,253 Other expenses 5, , ,533 Total operating expenses 148, ,787 Profit before loan losses 1,128, ,813 Loan losses (negative figures are reversals) 6-8,021 15,789 Operating profit 1,136, ,024 Income tax expense 7 321, ,019 Net profit for the year 815, ,005 Allocated to: Shareholders of Nordea Eiendomskreditt AS 815, ,005 Total allocation 815, ,005 Earnings per share, NOK 53,18 31,17 Nordea Eiendomskreditt Annual Report

139 Statements of comprehensive income NOK Net profit for the period 815, ,005 Other comprehensive income 0 0 Total comprehensive income 815, ,005 Allocated to: Shareholders of Nordea Eiendomskreditt AS 815, ,005 Total allocation 815, ,005 Nordea Eiendomskreditt AS Oslo, 6 February 2013 Jon Brenden Chairman of the Board Børre Gundersen Member of the Board Fanny Borgström Member of the Board Eva I. E. Jarbekk Member of the Board Monica Blix Member of the Board Marianne Glatved Managing director Nordea Eiendomskreditt Annual Report

140 Balance sheets NOK 1000 Note 31 Dec Dec 2011 Assets Loans to credit institutions, payable on demand 20 83, ,593 Total loans to credit institutions 83, ,593 Loans to the public 113,805,766 88,581,720 Allowance for individually assessed loans 6, 8-21,634-11,264 Allowance for collectively assessed loans 6, 8-11,800-33,000 Net loans to the public 113,772,333 88,537,456 Deferred tax assets Total intangible assets 0 0 Derivatives 9, 20 1,232,911 1,706,490 Fair value changes of the hedged items in portfolio hedge of interest rate risk , ,744 Other assets Total other assets 1,586,756 2,132,234 Accrued income and prepaid expenses 189, ,572 Total assets 115,631,707 90,982,855 Liabilities and equity Deposits by credit institutions, payable on demand Deposits by credit institutions, fixed term 11, 20 21,900,000 15,250,000 Total deposits by credit institutions 21,900,670 15,250,000 Debt securities in issue 11, 20 83,792,777 68,966,576 Derivatives 9, , ,596 Fair value changes of the hedged items in portfolio hedge of interest rate risk 10 1,121, ,062 Current tax liabilities 7 290, ,166 Other liabilities 1,860 2,246 Total other liabilities 2,017,938 1,374,070 Accrued expenses and prepaid income , ,975 Provisions Retirement benefit obligations 12 1,667 2,135 Deferred tax 7 62,022 33,792 Total provisions for other liabilities and expenses 63,969 36,301 Subordinated loan capital 780, ,000 Total subordinated liabilities 11, , ,000 Share capital 20 1,686,990 1,533,627 Share premium reserve 20 1,446,637 0 Retained earnings 3,502,949 2,687,307 Total 6,636,576 4,220,934 Total liabilities and equity 115,631,707 90,982,855 Note 16, 17, 18, 19 Assets pledged as security for own liabilities ,657,701 84,222,425 Contingent liabilities 14, 21 3,098 3,921 Commitments 14 10,175,614 7,773,113 Nordea Eiendomskreditt Annual Report

141 Statements of changes in equity NOK 1000 Share capital 1) reserve earnings Total equity Share premium Retained Opening balance at 1 Jan ,533, ,687,307 4,220,934 Total comprehensive income 815, ,642 Increase of share capital 153,363 1,446,637 1,600,000 Group contribution 0 Closing balance at 31 December ,686,989 1,446,637 3,502,949 6,636,576 NOK 1000 Share capital 1) reserve earnings Total equity Share premium Retained Opening balance at 1 Jan ,533, ,209,302 3,742,929 Total comprehensive income 478, ,005 Group contribution 0 Closing balance at 31 December ,533, ,687,307 4,220,934 1 The company s share capital at 31 December 2012 was NOK ,-. The number of shares was , each with a quota value of NOK 110, percent of the shares are owned by Nordea Bank Norge ASA. Nordea Eiendomskreditt Annual Report

142 Cash flow statements NOK Operating activities Operating profit before tax 1,136, ,024 Income taxes paid -122, ,810 Change in write-downs to provide for loan losses -10,831 8,105 Cash flow from operating activities before changes in op. assets and liab. 1,003, ,319 Changes in operating assets and liabilities Change in loans to the public -25,224,046-7,795,305 Change in debt securities in issue 14,826,201 9,695,136 Change in deposits by credit institutions 6,650,670-2,350,000 Change in other receivables 515,900-2,088,812 Change in other liabilities 557,172 1,328,793 Cash flow from operating activities -1,670, ,869 Investing activities Purchase/sale of tangible fixed assets 0 0 Change in loans and receivables to credit institutions, fixed terms 0 0 Change in holdings of bearer bonds issued by others 0 0 Cash flow from investing activities 0 0 Financing activities Group contribution/dividend paid 0 0 Change in subordinated loan capital 0 780,000 Increase in share capital and premium reserve 1,600,000 0 Cash flow from financing activities 1,600, ,000 Cash flow for the year -70,125 53,131 Cash and cash equivalents at 1 January 153, ,462 Cash and cash equivalents at 31 December 83, ,593 Change -70,125 53,131 Comments on the cash flow statement The cash flow statement shows inflows and outflows of cash and cash equivalents during the year, and is prepared in accordance with the indirect method. This means that operating profit is adjusted for the effects of non-cash transactions such as loan losses. Cash flow is broken down into operating, investing and financing activities. Operating activities are the principal revenue-producing activities and cash flows are mainly derived from the operating profit for the year with adjustment for items not included in cash flow and income taxes paid for the year. The adjustment for items not included in cash flow for 2012 relates solely to changes in provisions for losses. Changes in operating assets and liabilities consist of assets and liabilities that are part of normal business activities, such as loans and receivables, short-term funding and debt securities issued. Changes in derivatives are included in the items Change in other receivables and Change in other liabilities. Financing activities are activities that result in changes in equity and subordinated liabilities, such as group contribution paid or received. Cash and cash equivalents comprise loans to finance institutions with no fixed maturity (bank deposits). Nordea Eiendomskreditt Annual Report

143 Notes to the financial statements Note 1: Accounting policies Table of contents 1. Basis for presentation 2. Changed accounting policies and presentation 3. Changes in IFRSs not yet applied by Nordea Eiendomskreditt 4. Critical judgements and key sources of estimation uncertainty 5. Recognition of operating income and loan losses 6. Recognition and derecognition of financial instruments in the balance sheet 7. Translation of assets and liabilities denominated in foreign currencies 8. Hedge accounting 9. Determination of fair value of financial instruments 10. Financial instruments 11. Loans to the public/credit institutions 12. Taxes 13. Employee benefits 14. Related party transactions 1. Basis for presentation The annual accounts of Nordea Eiendomskreditt AS have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretation of such standards by the International Financial Reporting Standards Interpretation Committee (IFRS IC, formerly IFRIC), as endorsed by the EU Commission. In addition, certain complementary rules in the Norwegian Accounting Act with supported regulation have also been applied. The disclosures required by the standards, recommendations and legislation above have been included in the notes, in the Risk, Liquidity and Capital management section or in other parts of the Financial statements. On 06 February 2013 the Board of Directors approved the financial statements, subject to final approval of the Annual General Meeting on 7th March Changes to accounting policies and presentation The accounting policies, basis for calculations and presentation are, in all material aspects, unchanged in comparison with the 2011 Annual Report. Changes in IFRSs implemented 2012 IASB has amended IAS 1 Presentation of Financial Statements (Presentation of Items of Other Comprehensive Income), IFRS 7 Financial instruments: Disclosures (Transfers of Financial Assets) and IAS 12 Income taxes (Recovery of Underlying Assets) and the amendments have been implemented in Nordea as from 1 January The amendments to IAS 1 have changed Nordea s presentation of other comprehensive income so that items that can later be reclassified to profit or loss are separated from the items that will not. The amendments to IFRS 7 have added disclosure around transferred assets in the financial statements of the Nordea companies. The amended IAS 12 has not had any significant impact on the financial statements or on the capital adequacy in Nordea. 3. Changes in IFRSs not yet applied by Nordea Eiendomskreditt IFRS 9 Financial instruments (Phase 1) In 2009 IASB published a new standard on financial instruments, containing requirements for financial assets. Requirements for financial liabilities were added to this standard in The standard is the first step in the replacement of IAS 39 Financial instruments: Recognition and Measurement and this first phase covers classification and measurement of financial assets and liabilities. The effective date for Nordea Eiendomskreditt is as from 1 January 2015, but earlier application is permitted. The EU commission has not endorsed this standard. The tentative assessment is that there will be an impact on the financial statements as the new standard will decrease the number of measurements categories and therefore have an impact on the presentation and disclosures covering financial instruments. The new standard is, on the other hand, not expected to have a significant impact on Nordea Eiendomskreditt s income statement and balance sheet as the mixed measurement model will be maintained. No significant reclassifications between fair value and amortised cost or impact on the capital adequacy are expected, but this is naturally dependent on the financial instruments in Nordea Eiendomskreditt s balance sheet at transition. It is furthermore expected that changes will be made to the standard before the standard becomes effective. Nordea Eiendomskreditt has, due to the fact that the standard is not yet endorsed by the EU commission, and as changes before the effective date are likely, not finalised the investigation of the impact on the financial statements Nordea Eiendomskreditt Annual Report

144 in the period of initial application or in subsequent periods. IFRS 13 Fair Value Measurement IASB has published IFRS 13. The effective date for this standard is as from 1 January 2013, and Nordea Eiendomskreditt will apply the standard from this date. The EU commission has endorsed this standard during IFRS 13 clarifies how to measure fair value but does not change the requirements regarding which items should be measured at fair value. In addition, IFRS 13 requires additional disclosures about fair value measurements, especially in level 3. The assessment is that the new standard will not have a significant impact on Nordea Eiendomskreditt s financial statements nor on its capital adequacy. IAS 19 Employee Benefits IASB has amended IAS 19, and the EU commission has endorsed this amendment during The effective date is as from 1 January 2013, and Nordea Eiendomskreditt will apply the amendment from this date. The amended standard will have an impact on the financial statements in the period of initial application, as well as in subsequent periods. This is mainly related to defined benefit plans. The amended IAS 19 states that actuarial gains/losses shall be recognised immediately in equity through other comprehensive income, which will lead to higher volatility in equity compared to the current corridor approach. Consequently actuarial gains/losses outside the corridor will not be amortised through the income statement. The amended IAS 19 furthermore states that the expected return on plan assets shall be recognised using the same interest rate as the discount rate used when measuring the pension obligation. This will likely lead to higher pension expenses in the income statement as Nordea Eiendomskreditt currently expects a higher return than the discount rate. Any difference between the actual return and the expected return will be a part of the actuarial gains/losses recognised immediately in equity through other comprehensive income without recycling to the income statement. The unrecognised actuarial losses for Nordea Eiendomskreditt as per 31 December 2012 amounted to NOK 0.9m before deduction of income tax. This will at transition have a minor negative impact on equity and also on the capital adequacy. See Note 12 Retirement benefit obligations for more information. IAS 32 Financial Instruments: Presentation This standard has been amended, and the change relates to offsetting of financial assets and financial liabilities. The amendment is not intended to change the criteria for offsetting, but to give additional guidance on how to apply the existing criteria. The effective date is as from 1 January 2014, but earlier application is permitted. The EU commission has endorsed these amendments during Nordea Eiendomskreditt will apply this amendment as from 1 January The tentative assessment is that the amended standard will not have any significant impact on the financial statements or on the capital adequacy. IFRS 7 Financial instruments: Disclosures This standard has been amended and will lead to additional disclosures around offsetting of financial assets and financial liabilities. The effective date is as from 1 January 2013, and Nordea Eiendomskreditt will apply the amendment from this date. The EU commission has endorsed these amendments during The amended standard will not have any impact on the financial statements, apart from disclosures, or on the capital adequacy. 4. Critical judgements and key sources of estimation uncertainty The preparation of financial statements in accordance with generally accepted accounting principles requires, in some cases, the use of estimates and assumptions by management. Actual outcome can later, to some extent, differ from the estimates and the assumptions made. In this section Nordea describes: the sources of estimation uncertainty at the end of the reporting period that have a significant risk of resulting in a material adjustment to the carrying amount of assets and liabilities within the next financial year and the judgements made when applying accounting policies (apart from those involving estimations) that have the most significant effect on the amounts recognised in the financial statements. Critical judgements and estimates are in particular associated with: - fair value measurement of financial instruments (hedging portfolio) - impairment testing of lending to customers - actuarial calculations of pension liabilities - valuation of deferred tax assets Fair value measurement of certain financial instruments Nordea Eiendomskreditt s accounting policy for determining the fair value of financial instruments is described in section 9 Determination of fair value of Nordea Eiendomskreditt Annual Report

145 financial instruments and Note 17 Assets and liabilities at fair value. When determining the fair value of financial instruments that are not stock exchange listed or for which no recently observed market price is available, critical judgement is exercised in respect of the choice of valuation techniques, the determination of observable market parameters and relevant risk factors. Impairment testing on loans to the public Nordea Eiendomskreditt s accounting policy for impairment testing of loans is described in section 11 Loans to the public/credit institutions. When testing individual loans for impairment, the most critical judgement, containing the highest uncertainty, relates to the estimation of the most probable future cash flows generated from the customer. When testing a group of loans collectively for impairment, judgement has to be exercised to identify the events and/ or the observable data that indicate that losses have been incurred in the group of loans. The portfolio is monitored through rating migrations, and a loss event is an event resulting in a negative rating migration. Assessing the net present value of the cash flows generated by the customers in the group contains a degree of uncertainty. This includes the use of historical data on probability of default and loss given default, supplemented by acquired experience when adjusting the assumptions based on historical data to reflect the current situation. Actuarial calculations of pension liabilities and plan assets related to employees Nordea Eiendomskreditt s accounting policy for postemployment benefits is described in section 13 Employee benefits. The Projected Benefit pension Obligation (PBO) for major pension plans is calculated by external actuaries using demographic assumptions based on the current population. As a basis for these calculations a number of actuarial and financial parameters are used. The estimation of the discount rate is subject to uncertainty around whether corporate bond markets are deep enough and of high quality and also in connection to the extrapolation of yield curves to relevant maturities. In Norway the discount rate is determined with reference to covered bonds. Other parameters like assumptions about salary increases and inflation are based on the expected long-term development of these parameters and are also subject to estimation uncertainty. The fixing of these parameters at year-end is disclosed in Note 12 Retirement benefit obligations. The expected return on plan assets is estimated taking into account the asset composition and based on long-term expectations on the return on the different asset classes. On bonds this is linked to the discount rate while equities and real estate have an added risk premium. Both are subject to estimation uncertainty. The expected return is disclosed in Note 12 Retirement benefit obligations. Valuation of deferred tax assets The valuation of deferred tax assets is influenced by management s assessment of Nordea Eiendomskreditt s future profitability. This assessment is updated and reviewed at each balance sheet date, and is, if necessary, revised to reflect the current situation. See also section 12 Taxes and Note 7 Taxes. 5. Recognition of operating income and loan losses Net interest income Interest income and interest expense are calculated and recognised based on the effective interest rate method or, if considered appropriate, based on a method that results in an interest income or interest expense that is a reasonable approximation of using the effective interest rate method as basis for the calculation. The effective interest rate equals the rate that discounts the contractual future cash flows to the carrying amount of the financial asset or financial liability. Interests on derivatives used for hedging are recognised in Net interest income, as well as fees that are considered to be an integral part of the effective interest rate of a financial instrument (generally fees received as compensation for risk). Net fee and commission income The company s fee income is treated as administration fees for maintaining customer accounts related to customers mortgage loans, and is recognised to income as part of the item Lending-related fee and commission income in accordance with standard Nordea policy. Commission expenses are transaction based and recognised in the period the services are received. Net result from items at fair value Realised and unrealised gains and losses, on financial instruments measured at fair value through profit or loss include derivatives and are recognised in the item Net result from items at fair value. Realised gains and losses from financial instruments measured at amortised cost, such as interest compensation received and realised gains/losses on buy-backs of issued own debt, are recognised in Net result from items at fair value. Net result from items at fair value also includes losses from counterparty risk on instruments classified into the category Financial assets at fair value through profit or Nordea Eiendomskreditt Annual Report

146 loss. Impairment losses from instruments within other categories are recognised in the items Net loan losses (see also the sub-section Net loan losses below). Net loan losses Impairment losses from financial assets classified into the category Loans and receivables (see section 10 Financial instruments), in the item Loans to the public in the balance sheet, are reported as Net loan losses. The Nordea Group s accounting policies for the calculation of impairment losses on loans can be found in section 11 Loans to the public/ credit institutions. Counterparty losses on instruments classified into the category Financial assets at fair value through profit or loss are reported under Net result from items at fair value. 6. Recognition and derecognition of financial instruments in the balance sheet Derivative instruments, quoted securities and foreign exchange spot transactions are recognised in and derecognised from the balance sheet on the trade date. Other financial instruments are recognised in the balance sheet on settlement date. Financial assets, other than those for which trade date accounting is applied, are derecognised from the balance sheet when the contractual rights to the cash flows from the financial asset expire or are transferred to another party. The rights to the cash flows normally expire or are transferred when the counterpart has performed by e.g. repaying a loan to Nordea Eiendomskreditt, i.e. on settlement date. Financial liabilities are derecognised from the balance sheet when the liability is extinguished. Normally this occurs when Nordea Eiendomskreditt performs, for example when Nordea Eiendomskreditt repays a deposit to the counterpart, i.e. on settlement date. 7. Translation of assets and liabilities denominated in foreign currencies The functional currency of each entity is decided based upon the primary economic environment in which the entity operates. Foreign currency is defined as any currency other than the functional currency of the entity. Foreign currency transactions are recorded at the exchange rate on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate on the balance sheet date. Nordea Eiendomskreditt has items only in USD in addition to Norwegian kroner. As at the exchange rate was Exchange differences arising on the settlement of transactions at rates different from those at the date of the transaction, and unrealised translation differences on unsettled foreign currency monetary assets and liabilities, are recognised in the income statement in the item Net result on items at fair value. 8. Hedge accounting Nordea applies the EU carve out version of IAS 39 for portfolio hedges of both assets and liabilities. The EU carve out macro hedging enables a group of derivatives (or proportions thereof) to be viewed in combination and designated as the hedging instrument and removes some of the limitations in fair value hedge accounting relating to hedging core deposits and under-hedging strategies. Nordea Eiendomskreditt uses hedge accounting in order to have a symmetrical accounting treatment of the changes in fair value of the hedged item and changes in fair value of the hedging instruments. There are three forms of hedge accounting: Fair value hedge accounting Cash flow hedge accounting Hedges of net investments in foreign operations Fair value hedge accounting Nordea Eiendomskreditt only applies fair value hedge accounting. Fair value hedge accounting is used when derivatives are hedging changes in fair value of a recognised asset or liability attributable to a specific risk. The risk of changes in fair value of assets and liabilities in Nordea Eiendomskreditt s financial statements originates from loans with a fixed interest rate, causing interest rate risk. Changes in fair value from derivatives as well as changes in fair value of the hedged item attributable to the risks being hedged will be recognised separately in the income statement in the item Net result on items at fair value. Given an effective hedge, the two changes in fair value will more or less balance, meaning the net result will be close to zero. The changes in fair value of the hedged item attributable to the risks hedged with the derivative instrument are reflected in an adjustment to the carrying amount of the hedged item, which is also recognised in the income statement. The fair value change of the hedged item in a portfolio hedge of interest rate risks is reported separately from the portfolio in the item Fair value changes of the hedged items in portfolio hedge of interest rate risk in the balance sheet. Fair value hedge accounting in Nordea Eiendomskreditt is performed mainly on a one-to-one basis. Any ineffectiveness is recognised in the income statement under the item Net result on items at fair value. Hedged items A hedged item in a fair value hedge can be a recognised single asset or liability, an unrecognised firm commitment, or a portion thereof. The hedged item can also be a group of assets, liabilities or firm commitments with similar risk characteristics. Hedged items in Nordea Eiendomskreditt consist of both portfolios and individual assets and Nordea Eiendomskreditt Annual Report

147 liabilities. Hedging instruments The hedging instruments used in Nordea Eiendomskreditt are predominantly interest rate swaps and cross currency interest rate swaps, which are always held at fair value. Hedge effectiveness The application of hedge accounting requires the hedge to be highly effective. A hedge is regarded as highly effective if at inception and throughout its life it can be expected that changes in fair value of the hedged item as regards the hedged risk can be essentially offset by changes in fair value of the hedging instrument. The result should be within a range of per cent. When assessing hedge effectiveness retrospectively Nordea Eiendomskreditt measures the fair value of the hedging instruments and compares the change in fair value of the hedging instrument to the change in fair value of the hedged item. The effectiveness measurement is made on a cumulative basis. If the hedge relationship does not fulfil the requirements, hedge accounting will be terminated. The change in the unrealised value of the derivatives will, prospectively from the last time it was last proven effective, be accounted for in the income statement. For fair value hedges, the change in the fair value on the hedged item, up to the point when the hedge relationship is terminated, is amortised to the income statement on a straight-line basis over the remaining maturity of the hedged item. 9. Determination of fair value of financial instruments Financial assets and liabilities classified into the categories Financial assets/liabilities at fair value through profit or loss (including derivative instruments) are recorded at fair value in the balance sheet with changes in fair value recognised in the income statement in the item Net result from items at fair value. Fair value is defined as the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm s length transaction. The existence of published price quotations in an active market is the best evidence of fair value and when they exist they are used to measure financial assets and financial liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an on-going basis. The absolute level for liquidity and volume required for a market to be labelled active vary with the instrument classes. For some classes low price volatility is seen, also for those instruments within the class where the frequency is high. For instruments in such a class the liquidity requirements are lower and correspondingly, the age limit for the prices used for establishing fair value is higher. The labelling of markets to be active or non-active is assessed regularly. The trade frequency and volume are monitored daily. If quoted prices for a financial instrument fail to represent actual and regularly occurring market transactions or if quoted prices are not available, fair value is established by using an appropriate valuation technique. Valuation techniques can range from simple discounted cash flow analysis to complex option pricing models. Valuation models are designed to apply observable market prices and rates as input whenever possible, but can also make use of unobservable model parameters. The adequacy of the valuation model is assessed by measuring its capability to hit market prices. This is done by comparison of calculated prices to relevant benchmark data, e.g. quoted prices from exchange, the counterparty s valuations, price data from consensus services etc. Nordea Eiendomskreditt is using valuation techniques to establish fair value for OTC-derivatives. For financial instruments, where fair value is estimated by a valuation technique, it is investigated whether the variables used in the valuation model are predominantly based on data from observable markets. By data from observable markets, Nordea Eiendomskreditt considers data that can be collected from generally available external sources and where this data is judged to represent realistic market prices. If non-observable data has a significant impact on the valuation, the instrument cannot be recognised initially at the fair value estimated by the valuation technique and any upfront gains are thereby deferred and amortised through the income statement over the contractual life of the instrument. The deferred upfront gains are subsequently released to income if the non-observable data becomes observable. Note 17 Assets and liabilities at fair value provides a breakdown of fair values of financial instruments measured on the basis of : quoted prices in active markets for the same instrument (level 1), valuation techniques using observable data (level 2), and valuation techniques using non-observable data (level 3). The valuation models applied by the Nordea Group are consistent with accepted economic methodologies for pricing financial instruments, and incorporate the factors that market participants consider when setting a price. New valuation models are subject to approval by Group Credit and Risk Control and all models are reviewed on a regular basis. Nordea Eiendomskreditt Annual Report

148 10. Financial instruments Classification of financial instruments Each financial instrument has been classified into one of the following categories: Financial assets: Financial assets at fair value through profit or loss Loans and receivables Financial liabilities: Financial liabilities at fair value through profit or loss Other financial liabilities The classification of financial instruments into different categories forms the basis for how each instrument is measured in the balance sheet and how changes in its value are recognised. In Note 16 Classification of financial instruments the classification of the financial instruments in Nordea Eiendoms s balance sheet is presented into different categories. Financial assets and financial liabilities at fair value through profit or loss Financial assets and financial liabilities at fair value through profit or loss are measured at fair value, excluding transaction costs. All changes in fair values are recognised directly in the income statement in the item Net result from items at fair value. Loans and receivables Loans and receivables are non-derivative financial assets, with fixed or determinable payments, that are not quoted in an active market. These assets and their impairment are further described in the separate section 11 Loans to the public. Other financial liabilities Financial liabilities, other than those classified into the category Financial liabilities at fair value through profit or loss, are measured at amortised cost. Interest from Other financial liabilities is recognised in the item Interest expense in the income statement. Derivatives All derivatives are recognised in the balance sheet and measured at fair value. Derivatives with total positive fair values, including any accrued interest, are recognised as assets in the item Derivatives on the asset side. Derivatives with total negative fair values, including any accrued interest, are recognised as liabilities in the item Derivatives on the liability side. Realised and unrealised gains and losses from derivatives are recognised in the income statement in the item Net result on items at fair value. 11. Loans to the public/credit institutions Financial instruments classified as Loans to the public in the balance sheet and into the category Loans and receivables not measured at fair value, are measured at amortised cost (see also the separate section 6 Recognition and derecognition of financial instruments in the balance sheet as well as Note 16 Classification of financial instruments). Nordea monitors loans and receivables as described in the separate section on Risk, Liquidity and Capital management. Loans to individual customers or groups of customers are identified as impaired if the impairment tests indicate an objective evidence of impairment. Impairment test of individually assessed loans Nordea tests significant loans for impairment on an individual basis. The purpose of the impairment tests is to find out if the loans have become impaired. As a first step in the identification process for impaired loans, Nordea monitors whether there are indicators for impairment (loss event) and whether these loss events represent objective evidence of impairment. More information on the identification of loss events can be found in the Risk, Liquidity and Capital Management section in the Board of Directors report. Loans that are not individually impaired will be transferred to a group of loans with similar risk characteristics for a collective impairment test. Impairment test of collectively assessed loans Loans not impaired on an individual basis are collectively tested for impairment. These loans are grouped on the basis of similar credit risk characteristics that are indicative of the debtors ability to pay all amounts due according to the contractual terms. Nordea monitors its portfolio through rating migrations, the credit decision and annual review process supplemented by quarterly risk reviews. Through these processes Nordea identifies loss events indicating incurred losses in a group. A loss event is an event resulting in a deterioration of the expected future cash flows. Only loss events incurred up to the reporting date are included when performing the assessment of the group. The objective for the group assessment process is to evaluate if there is a need to make a provision due to the fact that a loss event has occurred, but not yet been identified on an individual basis. This period between the date when the loss event occurred and the date when it is identified on an individual basis is called Emergence period. The impairment remains related to the group of loans until the losses have been identified on an individual basis. The identification of the loss is made through a default of the engagement or by other indicators. Nordea Eiendomskreditt Annual Report

149 The collective assessment is performed through a netting principle, i.e. when scored engagements are up-rated due to estimated increases in cash flows, this improvement will be netted against losses on loans that are down-rated due to estimated decreases in cash-flows. Netting is only performed within groups with similar risk characteristics where Nordea Eiendomskreditt assesses that the customers future cash flows are insufficient to serve the loans in full. Impairment loss If the carrying amount of the loans is higher than the sum of the net present value of estimated cash flows, including the fair value of the collaterals, the difference is the impairment loss. If the impairment loss is not regarded as final, the impairment loss is accounted for on an allowance account representing the accumulated impairment losses. Changes in the credit risk and accumulated impairment losses are accounted for as changes in the allowance account and as Net loan losses in the income statement (see also section 5 Recognition of operating income and loan losses). If the impairment loss is regarded as final, it is reported as a realised loss. A realised loss is recognised and the value of the loan and the related allowance for impairment loss are derecognised with a corresponding gain or loss recognised in the line item Net loan losses in the income statement. An impairment loss is regarded as final when the obligor is filed for bankruptcy and the administrator has declared the economic outcome of the bankruptcy procedure, or when Nordea Eiendomskreditt waive its claims either through a legal based or voluntary reconstruction or when Nordea Eiendomskreditt, for other reasons, deems it unlikely that the claim will be recovered. Discount rate The discount rate used to measure impairment is the original effective interest rate for loans attached to an individual customer or, if applicable, to a group of loans. If considered appropriate, the discount rate can be based on a method that results in an impairment that is a reasonable approximation of using the effective interest rate method as basis for the calculation. Restructured loans In this context a restructured loan is defined as a loan where Nordea Eiendomskreditt has granted concessions to the obligor due to its deteriorated financial situation and where this concession has resulted in an impairment loss for Nordea Eiendomskreditt. After a reconstruction the loan is normally regarded as not impaired if it performs according to the new conditions. Concessions made in reconstructions are regarded as final losses unless Nordea Eiendomskreditt retains the possibility to regain the realised loan losses incurred. In the event of a recovery the payment is reported as a recovery of realised loan losses. Assets taken over for protection of claims Repossessed properties are valued at the estimated realisable market value when repossessed. The realisable market value of such properties is monitored continuously, and any reductions in value are recognised as realised loan losses. 12. Taxes Income tax expense comprises current and deferred tax. Income tax expense is recognised in the income statement, except to the extent that the tax effect relates to items recognised in other comprehensive income or directly in equity, in which case the tax effect is recognised in other comprehensive income or in equity respectively. Current tax is the expected tax expense on the taxable income for the year, using nominal tax rate, and any adjustment to tax payable in respect of previous years. Deferred tax assets and liabilities are recognised, using the balance sheet method, providing for temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are not discounted. A deferred tax asset is only recognised to the extent that it is considered likely that they can be applied against future earnings. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Current tax assets and current tax liabilities are offset when the legal right to offset exists. 13. Employee benefits All forms of consideration given by Nordea Eiendomskreditt to its employees as compensation for services performed are employee benefits. Short-term benefits are to be settled within twelve months after the reporting period when the services have been performed. Post-employment benefits are benfits payable after the termination of the employment. Post-employment benefits in the company consist only of pensions. Short-term benefits Short-term benefits consist mainly of fixed and variable salary. Bort fixed and variable salaries are expensed in the period when the employees have performed services to Nordea Eiendomskreditt. Post-employment benefits Pension plans The company s liabilities in respect of its retirement benefit obligations to its employees are mainly funded schemes Nordea Eiendomskreditt Annual Report

150 covered by assets in pension funds. Technical insurance principles are applied to calculate the present value of estimated future retirement benefit entitlements in accordance with IAS 19 Employee benefits. The estimated accrued liability is compared with the accrued value of pension fund investments. The difference is recognised as a liability if negative (defined benefit obligations) or as an asset if positive (defined benefit asset). Unfunded pension plans are recognised as defined benefit obligations. Pension costs Actuarial calculations, performed annually, are applied to assess the present value of defined benefit obligations and related costs, based on several actuarial and financial assumptions (as disclosed in Note 12 Retirement benefit obligations). When establishing the present value of the obligation and the fair value of any plan assets, actuarial gains and losses may arise as a result of changes in actuarial assumptions and experience effects (actual outcome compared to assumptions). The actuarial gains and losses are not recognised immediately in the income statement. Rather, only when the net cummulative unrecognised actuarial gain or loss exceeds a corridor, equal to 10% of the greater of the present value of the defined benefit obligations and the fair value of plan assets, the excess is recognised in the income statement over the expected average remaining service period of the employees participating in the plan. Otherwise, actuarial gains and losses are not recognised. Key management personnel Key management personnel includes the following positions: - The Board of Directors - The Chief Executive Officer (CEO) - The Control Committee - The Board of Representatives. For information about key management personnel and their compensation, see the section Governing bodies and Note 4 Staff costs. Group internal transactions between legal entities are performed according to arm s length principles in conformity with OECD requirements on transfer pricing. Information on transactions between Nordea Eiendomskreditt and other companies in the group is provided in Note 20 Related-party transactions. Social security contribution is calculated and accounted for based on the net recognised surplus or deficit by the plan. Discount rate in Defined Benfit Plans The discount rate is determined by reference to high quality corporate bonds, where a deep enough market for such bonds exists. Covered bonds are in this context considered to be corporate bonds. In Norway, the discount rate is determined with reference to covered bonds. 14. Related party transactions Nordea Eiendomskreditt defines related parties as: - Shareholders with significant influence - Other Nordea Group companies - Key management personnel Shareholders with significant influence Nordea Bank Norge ASA owns 100% of the share capital of Nordea Eiendomskreditt AS and has significant influence. Other Nordea Group Companies Other Nordea Group Companies means the group parent company Nordea Bank AB (publ) and its subsidiaries. Nordea Eiendomskreditt Annual Report

151 Note 2: Segment information The activities of Nordea Eiendomskreditt represent a single segment. This is a result of the manner in which the company is organised and managed, including the system for internal reporting whereby the business to all practical purposes is managed as a single segment. The services provided by Nordea Eiendomskreditt are judged to be subject to the same risks and yield requirements. Nordea Eiendomskreditt is part of the Retail Banking segment of the Nordea Bank Norge group. Note 3: Net result from items at fair value NOK Shares 0 0 Interest-bearing securities -1, ,600 Other financial instruments -12,413-17,985 Foreign exchange gains/losses 0 0 Total -13, ,615 Net gains/losses for categories of financial instruments NOK Foreign currency derivatives 0 0 Financial instruments held for trading 0 0 Financial instruments under hedge accounting -12,413-17,985 - of which net losses on hedged items -571, ,420 - of which net gains on hedging instruments 558, ,435 Other financial liabilities -1, ,600 Total -13, ,615 Nordea Eiendomskreditt Annual Report

152 Note 4: Staff costs NOK Salary and remuneration 1,739 1,849 Pension costs (note 12) Social security contribution Allocation to profit-sharing Other staff costs Total 2,346 2,252 Number of employees at 31 Dec 2 2 Number of full time equivalents at 31 Dec 1,6 1,5 Loans to the Chairman of the Committee of Representatives, members of the Board and Control Committee, or to companys where such persons are officers/board members 0 0 Auditor s fee incl. vat 757 2,274 - of which ordinary audit fee of which other services - 1,875 Remuneration to senior executives Fixed salary and fees - relates to received regular salary for the financial year paid by Nordea Eiendomskreditt AS. Variable salary - includes profit sharing and executive bonuses. All employees receive profit sharing according to common Nordea strategy. Benefits - includes insurance and electronic communication allowance. Pensions - includes changes in the individual s accrued rights under the pension plan during the financial year. The amount stated is the annual change in the present value of the pension obligations (PBO) exclusive of social security tax, which best reflects the change in pension rights for the financial year. Fixed salary Variable Other Total Executive management of Nordea Eiendomskreditt AS and fees salary benefits Pensions remunerations Marianne Glatved, Managing director ,260 Total for the executive management ,260 Board of Directors of Nordea Eiendomskreditt AS Eva I. E. Jarbekk Monica Blix Total for the directors of Nordea Eiendomskreditt AS No director s fee is paid to directors who are employees of the Nordea group. The fees shown in the table are fees paid in 2012 for services provided in Control Committee of Nordea Eiendomskreditt AS Anders Ingebrigtsen, chairman Thorleif Haug Berit Stokke Tom Knoff Total for the Control Committee of Nordea Eiendomskreditt AS Total remuneration of executive management and elected officers of Nordea Eiendomskreditt AS 1, ,620 Loans to employees are made from the balance sheet of Nordea Bank Norway. The company has not entered into any agreements that entitle the Managing Director or the Chairman of the Board to spesific compensation in the event of any change in their employment or office. Nordea Eiendomskreditt Annual Report

153 Note 5: Administration expenses and other expenses NOK Services bought from Group companies 142, ,635 - hereof related to administration of the lending portfolio 134,785 91,005 - hereof related to treasury services 6,931 8,180 - hereof related to accounting and reporting services 800 1,408 - hereof other costs Consulting 1,872 9,124 Auditors fee Other operating expenses Total 145, ,533 Note 6: Loan losses NOK Specification of changes in loan losses Change in allowances for individually assessed loans 10,370 3,905 Change in allowances for collectively assessed loans -21,200 4,200 Realised loan losses in the period 2,815 7,711 Recoveries of loan losses realised previous years Total loan losses for the year -8,021 15,789 Specification of allowances for individually assessed loans 1 Opening balance at 1 January 11,264 7,359 Increased and new allowances this year 14,026 11,147 Allowances used to cover write-offs ,298 Reversals of allowances made in previous years -3, Closing balance at 31 December 21,634 11,264 1 Included in Note 8 Loans and receivables and their impairment. Key ratios Loan loss ratio % 0.02% - of which individual 0.01% 0.01% - of which collective -0.02% 0.01% 2 Net loan losses divided by average balance of loans to the public (lending), calculated on a monthly basis. Nordea Eiendomskreditt Annual Report

154 Note 7: Taxes Income tax expense for the year NOK Current tax 1 293, ,166 Deferred tax 28,230 66,853 Total 321, ,019 1 of which relating to prior years 2,934 0 Calculation of income tax expense NOK Profit before tax 1,136, ,024 Tax calculated at a tax rate of 28% 318, ,927 Non-deductable expenses Tax exempt income Adjustments related to prior years 2,934 0 Total tax charge 321, ,019 Average effective tax rate 28.3 % 28.0 % Deferred tax NOK Deferred tax expense (-) / income (+) Deferred tax due to temporary differences -28,230-66,853 Tax expense, net -28,230-66,853 Deferred tax assets, net Deferred tax assets due to tax losses Deferred tax assets due to temporary differences: - Retirement benefit obligations Financial instruments 1-61,514-33,178 - Other -1,053-1,316 Deferred tax assets (+) / deferred tax liabilities (-), net -62,022-33,792 Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax income taxes related to the same fiscal authority. Deferred tax totalling tnok is carried in the balance sheet in full since the company expects to be able to offset this against future earnings. Nordea Eiendomskreditt had no tax losses carried forward at Nordea Eiendomskreditt Annual Report

155 Note 8 Loans and impairment NOK Dec Dec 2011 Loans and receivables, not impaired 113,762,631 88,540,253 Impaired loans and receivables; 43,135 41,467 - Performing 3,630 8,279 - Non-performing 39,505 33,188 Loans and receivables before allowances 113,805,766 88,581,720 Allowances for individually assessed impaired loans; -21,634-11,264 - Performing -1,151-2,153 - Non-performing -20,482-9,111 Allowances for collectively assessed impaired loans -11,800-33,000 Allowances -33,434-44,264 Loans and receivables, book value 113,772,333 88,537,456 Ramaining maturity 31 Dec Dec 2011 Payable on demand 26,425 62,379 Maximin 3 months 39, , months 78, , years 12,987,223 7,818,661 More than 5 years 100,640,848 79,930,403 Total 113,772,333 88,537,456 Reconciliation of allowance accounts for impaired loans 1 NOK 1000 Individually assessed Collectively assessed Total Opening balance at 1 Jan ,264 33,000 44,264 Provisions 14,026 14,026 Reversals -3,429-21,200-24,629 Changes through the income statement 10,597-21,200-10,603 Allowances used to cover write-offs Closing balance at 31 Dec ,634 11,800 33,434 NOK 1000 Individually assessed Collectively assessed Total Opening balance at 1 Jan ,359 28,800 36,159 Provisions 11,147 24,800 35,947 Reversals ,600-21,544 Changes through the income statement 10,203 4,200 14,403 Allowances used to cover write-offs -6, ,298 Closing balance at 31 Dec ,264 33,000 44,264 1 See Note 6 Loan losses Key ratios 31 Dec Dec 2011 Impairment rate, gross 2, in % 0,04 0,05 Impairment rate, net 3, in % 0,02 0,03 Total allowance rate 4, in % 0,03 0,05 Allowance rate, impaired loans 5, in % 50,15 27,20 Total allowances in relation to impaired loans, % 77,51 106,70 Non-performing loans, not impaired 6, in NOK , ,285 2 Individually assessed impaired loans and receivables before allowances divided by total loans and receivables before allowances, %. 3 Individually assessed impaired loans and receivables after allowances divided by total loans and receivables before allowances, %. 4 Total allowances divided by total loans and receivables before allowances, %. 5 Allowances for individually assessed impaired loans and receivables divided by individually assessed impaired loans and receivables before allowances, %. 6 Past due loans and receivables, not impaired due to future cash flows (included in Loans and receivables, not impaired). Nordea Eiendomskreditt Annual Report

156 Note 9: Derivatives and hedge accounting 31 Dec 2012 Fair value NOK 1000 Positive Negative Total nominal amount Derivatives used for hedge accounting: Interest rate swaps 1,220, ,293 75,963,851 Total 1,220, ,293 75,963,851 Foreign exchange derivatives: Currency and interest rate swaps 12,301 62,605 16,708,276 Total 12,301 62,605 16,708,276 Total derivatives 1,232, ,898 92,672, Dec 2011 Fair value NOK 1000 Positive Negative Total nominal amount Derivatives used for hedge accounting: Interest rate swaps 471, ,596 33,370,470 Total 471, ,596 33,370,470 Foreign exchange derivatives: Currency and interest rate swaps 1,235,277 16,758,875 Total 1,235, ,758,875 Total derivatives 1,706, ,596 50,129,345 Note 10: Fair value changes of the hedged items in portfolio hedge of interest rate risk Assets NOK Booked unrealised gain/loss at beginning of the year 425,744 75,957 Revaluation of hedged items during the year -72, ,788 Booked unrealised gain/loss at end of the year 353, ,744 Whereof expected maturity later than 1 year 117, ,741 Liabilities NOK Booked unrealised gain/loss at beginning of the year 618, ,168 Revaluation of hedged items during the year 503, ,230 Booked unrealised gain/loss at end of the year 1,121, ,062 Whereof expected maturity later than 1 year 851, ,769 Nordea Eiendomskreditt Annual Report

157 Note 11: Debt securities in issue and loans from financial institutions NOK Dec Dec 2011 Loans and deposits from financial institutions for a fixed term 21,900,000 15,250,000 Bond loans issued in Norwegian kroner 108,900,000 89,250,000 Holdings of own bonds in Norwegian kroner -41,524,500-37,841,500 Bond loans issued in US dollars (in NOK) 16,708,276 17,978,205 Subordinated loan 780, ,000 Total nominal value 106,763,776 85,416,705 Maturity information Maximum 1 year 25,972,000 15,250,000 More than 1 year 80,791,776 70,166,705 Total 106,763,776 85,416,705 Note 12: Retirement benefit obligations Pension plans Nordea Eiendomskreditt is obliged to have an occupational pension scheme pursuant to the Mandatory Occupational Pension Plan Act. Nordea Eiendomskreditt s pension schemes meet the requirements by this act. The company has funded its pension obligations through Nordea Norge Pensjonskasse (Nordea Norge Pension Fund), which is administered and managed by Gabler AS. The company also has retirement benefit obligations in connection with supplementary pensions and early retirement pensions, which are not funded through the Nordea Norge Pension Fund. The defined benefit scheme was closed for new employees from 2011, and new employees will instead be entitled to pension arrangements based on a new defined contribution pension scheme. Defined contribution pension schemes are not recognised in the balance sheet unless accrued rights have not yet been paid. reflected in Nordea Eiendomskreditt s balance sheet. The plan in Nordea Eiendomskreditt is a defined benefit plan. The major plans are funded schemes covered by assets in Nordea Norge Pensjonskasse. Supplementary pensions and early retirement pensions that are not funded, are recognised directly on the balance sheet as a liability. Actuarial gains/losses arising from changed assumptions or deviation between expected and actual return on assets may not be recognised in the balance sheet at once, but will be recognised over a fixed period of 10 years if they in total exceeded 10% of gross pension liabilites or assets in the previous reporting period. IAS 19 Pension calculations and assumptions Calculations on all plans are performed by external liability calculators and are based on the actuarial assumptions fixed for all of Nordea Bank Norge Group s pension plans. Defined benefit plans IAS 19 secures that the market based value of pension obligations net of assets backing these obligations will be Assumptions Discount rate 4.0 % 3.0 % Salary increase 3.0 % 3.0 % Inflation 2.0 % 2.0 % Expected return on assets before taxes 4.0 % 4.0 % Expected adjustments of current pensions 2.5 % 2.5 % Expected adjustments of basic Social Security 4.0 % 4.0 % The expected return on assets is based on long-term expectations for return on the different asset classes. On bonds, this is linked to the discount rate while equities and real estate have an added risk premium. Asset composition The combined return on assets in 2012 was 3.7% (2.6%), mainly driven by the development in government bond holdings. At the end of the year, the equity exposure in the pension fund represented 22% (17%) of total assets. Nordea Eiendomskreditt Annual Report

158 Note 12: Retirement benefit obligations cont. Asset composition in funded schemes Equity 22% 17% Bonds 61% 65% Real estate 15% 17% Other assets 2% 1% Defined benefit pension liabilities - balance sheet None of the company s pension schemes was over-funded at the close of the year, and excess pension assets therefore amounted to NOK 0 mill. (NOK 0 mill.), while net recognised pension liabilities amounted to NOK 1.7 mill. (NOK 2.1 mill.). Amounts recognised in the balance sheet at 31 December NOK Pension Benefit Obligation (PBO) 5,360 6,273 Plan assets 2,842 2,726 Total surplus/deficit (-) -2,518-3,547 of which unrecognised actuarial gains(-)/losses 852 1,413 Of which recognised in the balance balance sheet 1,666 2,134 Of which retirement benefit obligations 1,666 2,134 - whereof related to unfunded plans (PBO) 1,487 1,319 Changes in the PBO NOK PBO at 1 January 6,009 4,378 Service cost Interest cost Pensions paid 0 0 Transfer of actuarial gains/losses 0 0 Curtailments and settlements 0 0 Past service cost 0 0 Actuarial gains (-) / losses -1,226 1,287 Change in provision for Social Security Contribution 0 0 PBO at 31 December 5,154 6,009 Changes in the fair value of assets NOK Assets at 1 January 2,726 2,124 Expected return on assets Pensions paid 0 0 Contributions Curtailments and settlements Actuarial gains (-) / losses Assets at 31 December 2,842 2,726 Actual return on plan assets Nordea Eiendomskreditt Annual Report

159 Note 12: Retirement benefit obligations cont. Defined benefit pension costs The total net pension cost recognised in Nordea Eiendomskreditt s income statement (as staff costs) for 2012 is tnok 306 (tnok 161). The amount covers both funded and unfunded pension plans. Recognised net defined benefit cost NOK Service cost Interest cost Expected return on assets Recognised actuarial gains(-) / losses 0 0 Recognised past service cost 0 0 Curtailments and settlements 0 0 Amortisation of effect of changes to estimates 82-8 Net cost Accrued Social Security Contribution Pension cost on defined benefit plans The pension cost in 2012 is the same as expected at the start of the year. For 2013, the net pension cost is expected to be tnok 327. Note 13: Assets pledged as security for own liabilities NOK Dec Dec 2011 Assets pledged as security for own liabilities: Loans to the public 106,657,701 84,222,425 Total 106,657,701 84,222,425 The above pledges pertain to the following liability and committment items: Debt securities in issue 83,792,777 68,966,576 Total 83,792,777 68,966,576 Assets pledged as security for own liabilities contain mortgage loans to the public that have been registered as collateral for issued covered bonds. Counterpart is the public. These transactions are long term with maturity 2-5 years. The terms and conditions that apply to the collateral pledged are regulated by the Financial Institutions Act, Chapter IV Bonds secured on a loan portfolio (covered bonds), and the related Regulation of 25 May 2007 on mortgage credit institutions issuing bonds secured on a loan portfolio. Note 14: Commitments NOK Dec Dec 2011 Accepted, not disbursed loans (unutilised portion of approved overdraft facilities) 10,175,614 7,773,113 Other commitments (note 21) 3,098 3,921 Total 10,179,535 7,777,034 Nordea Eiendomskreditt Annual Report

160 Note 15: Capital adequacy Capital base 31 Dec 31 Dec NOKm Core tier 1 capital 1 6,595 4,165 Tier 1 capital 1 6,595 4,165 Capital base 1 7,333 4,889 1 Including profit for the period 31 Dec 31 Dec 31 Dec 31 Dec Capital requirement NOKm Capital requirement RWA Capital requirement RWA Credit risk ,536 1,126 14,070 IRB ,069 1,083 13,539 - of which corporate of which institutions of which retail ,069 1,083 13,539 of which retail SME of which retail real estate ,084 1,025 12,815 of which retail other of which other Standardised of which sovereign of which retail of which other Market risk of which trading book, Internal Approach of which trading book, Standardised Approach of which banking book, Standardised Approach Operational risk Standardised Sub total ,442 1,185 14,815 Adjustment for transition rules Additional capital requirement according to transition rules 3,020 37,745 1,922 24,019 Total 4,015 50,187 3,107 38,834 Capital ratio excl. transition rules 31 Dec 31 Dec Core tier 1 capital ratio 1, % Tier 1 capital ratio 1, % Capital base ratio 1, % Including profit for the period Capital ratio incl. transition rules 31 Dec 31 Dec Core tier 1 capital ratio 1, % Tier 1 capital ratio 1, % Capital base ratio 1, % Including profit for the period Nordea Eiendomskreditt Annual Report

161 Note 15: Capital adequacy cont. Analysis of capital requirements Exposure class, 31 Dec 2012 Average risk weight (%) Capital requirement (NOKm) Corporate IRB - - Institutions IRB - - Retail IRB Sovereign - - Other Total credit risk Note 16: Classification of financial instruments Of the assets listed below, Loans and receivables to credit institutions, Loans and receivables to the public, Interest-bearing securities, Derivatives, as well as accrued interest on these items, are exposed to credit risk. The exposure equals the book value presented in the tables below. 31 Dec 2012 Loans and receivables Assets at fair value through profit and loss Derivatives used for hedging Available for sale Non-financial assets NOK 1000 Total Assets Cash and balances with sentral banks 0 Loans and receivables to credit institutions 83,468 83,468 Loans and receivables to the public 113,772, ,772,333 Derivatives 1,232,911 1,232,911 Fair value changes of the hedged items in portfolio hedge of interest rate risk 353, ,186 Property and equipment 0 Deferred tax assets 0 Other assets 0 Prepaid expenses and accrued income 189, ,810 Total assets 114,045, ,586, ,631,707 Liabilities at fair value through profit and loss Derivatives used for hedging Other financial liabilities Non-financial liabilities Total Liabilities Deposits by credit institutions 21,900,670 21,900,670 Debt securities in issue 83,792,777 83,792,777 Derivatives 604, ,898 Fair value changes of the hedged items in portfolio hedge of interest rate risk 1,121,077 1,121,077 Current tax liabilities 290, ,104 Other liabilities 2,140 2,140 Accrued expenses and prepaid income 439, ,777 Retirement benefit obligations 1,667 1,667 Deferred tax 62,022 62,022 Subordinated liabilities 780, ,000 Total liabilities 0 1,725, ,473, , ,995,131 Nordea Eiendomskreditt Annual Report

162 Note 16: Classification of financial instruments cont. 31 Dec 2011 Loans and receivables Assets at fair value through profit and loss Derivatives used for hedging Non-financial assets NOK 1000 Available for sale Total Assets Cash and balances with sentral banks 0 Loans and receivables to credit institutions 153, ,593 Loans and receivables to the public 88,537,456 88,537,456 Interest-bearing securities 0 Shares 0 Derivatives 1,706,490 1,706,490 Fair value changes of the hedged items in portfolio hedge of interest rate risk 425, ,744 Property and equipment 0 Deferred tax assets 0 Other assets 0 Prepaid expenses and accrued income 159, ,572 Total assets 88,850, ,132, ,982,855 Liabilities at fair value through profit and loss Derivatives used for hedging Other financial liabilities Non-financial liabilities NOK 1000 Total Liabilities Deposits by credit institutions 15,250,000 15,250,000 Debt securities in issue 68,966,576 68,966,576 Derivatives 634, ,596 Fair value changes of the hedged items in portfolio hedge of interest rate risk 618, ,062 Current tax liabilities 119, ,166 Other liabilities 2,620 2,620 Accrued expenses and prepaid income 354, ,975 Retirement benefit obligations 2,135 2,135 Dererred tax 33,792 33,792 Subordinated liabilities 780, ,000 Total liabilities 0 1,252,658 84,996, ,688 86,761,921 Nordea Eiendomskreditt Annual Report

163 Note 17: Assets and liabilities at fair value 31 Dec Dec 2011 NOK 1000 Book value Fair value Book value Fair value Assets Loans and receivables to credit institutions 83,468 83, , ,593 Loans and receivables to the public 113,772, ,772,333 88,537,456 88,537,456 Derivatives 1,232,911 1,232,911 1,706,490 1,706,490 Fair value changes of the hedged items in portfolio hedge of interest rate risk 353, , , ,744 Property and equipment Deferred tax assets Other assets Prepaid expenses and accrued income 189, , , ,572 Total assets 115,631, ,631,707 90,982,855 90,982,855 Book value Fair value Book value Fair value Liabilities Deposits by credit institutions 21,900,670 21,900,068 15,250,000 15,248,805 Debt securities in issue 83,792,777 83,944,008 68,966,576 68,785,290 Derivatives 604, , , ,596 Fair value changes of the hedged items in portfolio hedge of interest rate risk 1,121,077 1,121, , ,062 Current tax liabilities 290, , , ,166 Other liabilities 2,140 2,140 2,620 2,620 Accrued expenses and prepaid income 439, , , ,975 Retirement benefit obligations 1,667 2,518 2,135 3,547 Deferred tax liabilities 62,022 62,022 33,792 33,792 Subordinated liabilities 780, , , ,463 Total liabilities 108,995, ,146,784 86,761,921 86,580,315 Estimation of fair value for assets and liabilities Financial assets and financial liabilities are measured at fair value in the balance sheet regarding fixed interest rate loans to the public and issued securities in the portfolio hedge of interest rate risk. The book values on other loans and receivables, deposits and issued securities are adjusted for the value of the fixed interest term in order to estimate the fair values that are presented in the tables above. The value of the fixed interest term is a result of changes in the relevant market interest rates. The discount rates used are based on current market rates for each term. Fair value is set to book value in the tables above, for assets and liabilities for which no reliable fair value has been possible to estimate. This is valid for intangible assets, property and equipment and provisions. The total amount of unrealised changes in fair value of financial assets and liabilities recognised in the income statement, (loans to the public, issued securities and derivatives) is based on observable market rates. For further information about valuation of items normally measured at fair value, see Note 1 Accounting Principles. Nordea Eiendomskreditt Annual Report

164 Note 17: Assets and liabilities at fair value cont. Determination of fair value from quoted market prices or valuation techniques The following table presents the valuation methods used to determine fair value where this equals book value, and where fair value differs from nominal value: 31 Dec Dec 2011 Instruments with quoted prices Valuation technique using observable data Instruments with quoted prices Valuation technique using observable data NOK 1000 (Level 1) 1 (Level 2) 2 (Level 1) 1 (Level 2) 2 Assets Loans and receivables to the public Interest-bearing securities Derivatives 1,232,911 1,706,490 Total assets 0 1,232, ,706,490 Liabilities Debt securities in issue Derivatives 604, ,596 Total liabilities 0 604, ,596 1 Level 1 consist of financial assets and financial liabilities valued using unadjusted quoted prices in active markets for identical assets or liabilities. This category includes listed equity shares, exchange-traded derivatives, and government issued securities. 2 Level 2 consists of financial assets and financial liabilities which do not have quoted market prices directly available from an active market, and where fair values are estimated using valuation techniques or models, based wherever possible on assumptions supported by observable market prices or rates prevailing at the balance sheet date. This is the case for the majority of OTC derivatives, and for many unlisted instruments and other items which are not traded in active markets. As for example certificates where issuers are non-government. Level 3 consists of those types of financial instruments where fair values cannot be obtained directly from quoted market prices or indirectly using valuation techniques or models supported by observable market prices or rates. This is generally the case for private equity instruments in unlisted securities and private equity funds, and for certain complex or structured financial instruments. Nordea Eiendomskreditt AS has no financial assets or financial liabilities measured according to level 3. Nordea Eiendomskreditt Annual Report

165 Note 18: Assets and liabilities in foreign currencies 31 December December 2011 NOK 1000 NOK USD Total NOK USD Total Assets Loans to credit institutions 83,468 83, , ,593 Loans to the public 113,772, ,772,332 88,537,456 88,537,456 Interest-bearing securities Other assets 1,387, ,601 1,775,907 1,755, ,321 2,291,806 Total assets 115,243, , ,631,707 90,446, ,321 90,982,855 Liabilities and equity Deposits by credit institutions 21,900,670 21,900,670 15,250,000 15,250,000 Deposits and borrowings from the public Debt securities in issue 67,125,125 16,667,652 83,792,777 51,056,017 17,910,559 68,966,576 Subordinated liabilities 780, , , ,000 Other liabilities and equity 8,725, ,035 9,158,260 5,375, ,424 5,986,280 Total liabilities and equity 98,531,020 17,100, ,631,707 72,461,873 18,520,982 90,982,855 Position not reported in the balance sheet -16,708,276 16,708, ,978,205 17,978,205 0 Net position, currencies 3,809-3, ,456-6,456-0 Nordea Eiendomskreditt Annual Report

166 Note 19: Maturity analysis for assets and liabilities 31 Des 2012 Remaining maturity Payable on demand Max 3 months 3-12 months 1-5 years More than 5 years Without maturity Total NOK 1000 NOK NOK NOK NOK NOK NOK NOK Assets Loans and receivables to credit institutions 83,468 83,468 Loans to the public 26,425 39,066 78,771 12,987, ,640, ,772,333 Derivatives 62, , ,744 1,232,911 Fair value changes of the hedged items in portfolio hedge of interest rate risk 358 7, ,180 27, ,186 Other assets 189, ,810 Total assets 109, ,534 86,067 13,823, ,319, ,631,707 Liabilities and equity Liabilities to financial institutions 21,900,000 21,900,000 Liabilities to the public Debt securities in issue 4,070,281 70,263,836 9,458,661 83,792,778 Derivatives 5,146 24, , , ,898 Fair value changes of the hedged items in portfolio hedge of interest rate risk 644, ,598 1,121,076 Other liabilities 217, ,630 65, ,709 Subordinated liabilities 780, ,000 Equity 6,636,576 6,636,576 Total liabilities and equity ,122,552 4,607,480 71,200,455 10,998,301 6,702, ,631,707 Net total on all items 109,223-21,831,018-4,521,413-57,376,860 90,321,643-6,701,576 (0) The section Liquidity risk in the Report for the year describes the management of the liquidity risk in more detail. 31 Dec 2011 Remaining maturity Payable on demand Max 3 months 3-12 months 1-5 years More than 5 years Without maturity Total NOK 1000 NOK NOK NOK NOK NOK NOK NOK Assets Loans and receivables to credit institutions 153, ,593 Loans to the public 62, , ,500 7,818,661 79,930,403 88,537,456 Derivatives 17,437 1,342, ,622 1,706,490 Fair value changes of the hedged items in portfolio hedge of interest rate risk 317,624 6,380 77,933 23, ,744 Other assets 159, ,572 Total assets 215, , ,880 9,239,025 80,300, ,982,855 Liabilities and equity Liabilities to financial institutions 15,250,000 15,250,000 Debt securities in issue 57,904,076 11,062,500 68,966,576 Derivatives 70,200 13, , , ,595 Fair value changes of the hedged items in portfolio hedge of interest rate risk 402,078 67, , ,063 Other liabilities 134, ,221 39, ,687 Subordinated liabilities 780, ,000 Equity 4,220,934 4,220,934 Total liabilities and equity 0 15,856, ,436 58,164,350 12,349,390 4,260,216 90,982,855 Net total on all items 215,972-14,978,317-3,556-48,925,325 67,951,443-4,260,216 0 Nordea Eiendomskreditt Annual Report

167 Note 20: Related-party transactions NOK Nordea Bank Norge ASA Nordea Bank AB Nordea Bank Norge ASA Nordea Bank AB Profit and loss account Interest income on loans with financial institutions 7,524 4,169 Net gains/losses on items at fair value 563, ,229 Total income 570, ,398 - Interest expenses on liabilities to financial institutions 475, ,324 Interest and related expense on securities issued incl. hedging 595,806 1,077,969 Net gains/losses on items at fair value Interest and related expense on subordinated loan capital 48,031 4,891 Commission and fee expense for banking services Other operating expenses 141, , Total expenses 1,261, ,518, Proposed group contribution - - Balance sheet Loans and receivables to credit institutions 83, ,593 Derivatives 1,232,911 1,706,490 Total assets 1,316,379-1,860,083 - Deposits by credit institutions 21,900,000 15,250,000 Issued bonds 20,000,000 20,000,000 Derivatives 323, ,901 Accrued expenses and prepaid income 6,345 10,327 Subordinated loan capital 780, ,000 Share capital and premium fund 3,133,627 1,533,627 Total libilities and equity 46,143,842-37,814,855 - Off balance sheet items Interest rate swaps (nominal value) 92,672,127 50,129,345 Nordea Eiendomskreditt AS does not have transactions with Group companies other than recognised above. Nordea Eiendomskreditt AS is a wholly owned subsidiary of Nordea Bank Norge ASA, which again is a wholly owned subsidiary of Nordea Bank AB. Transactions between Nordea Eiendomskreditt AS and other legal entities in the Nordea Group are performed according to arm s length principles in conformity with OECD requirements on transfer pricing. Nordea Eiendomskreditt Annual Report

168 Note 21: Contingent liabilities Den norske Bank ASA (formerly DnB Boligkreditt AS/Den Østenfjelske Bykredittforening), Nordea Eiendomskreditt AS (formerly Norgeskreditt AS/Vestenfjelske Bykreditt AS/Den Vestenfjelske Bykredittforening) and Den Nordenfjelske Bykredittforening have jointly and severally guaranteed the 2 nd 7th series of bearer bonds issued by De Norske Bykredittforeninger. The aggregate debt outstanding at 31 December 2012 amounted to NOK 3.1 mill. Nordea Eiendomskreditt s share of the portfolio amounted to NOK 0.0 mill. Note 22: Credit risk disclosures Credit risk management and credit risk analysis is described in the Risk, Liquidity and Capital management section of the Board of Directors Report. Additional information on credit risk is also disclosed in the Capital and Risk management Report (Pillar 3) 2012, which is available on Credit risk is defined as the risk of loss if counterparts fail to fulfil their agreed obligations and that the pledged collateral does not cover the claims. Credit risk stems mainly from various forms of lending, but also from counterparty credit risk in derivatives contracts. The figures in the table represents maximum exposure for credit risk in the company. Credit risk exposures for loans and derivatives NOKm 31 Dec Dec 2011 Loans to credit institutions Loans to the public incl accrued interest 113,961 88,697 - of which household 113,961 88,697 Total loans and receivables 114,045 88,851 Off balance credit exposure - herav utlån til personkunder 10,176 7,773 - herav derivatkontrakter 628 1,072 Off balance credit exposure 10,804 8,845 Total credit exposure 124,849 97,696 Past due loans NOKm 31 Dec Dec days 1,289 1, days days >90 days Total 1,639 1,790 Nordea Eiendomskreditt Annual Report

169 Note 23: Scoring distribution of the lending portfolio Scoring models are pure statistical methods to predict the probability of customer default. The models are used in the household segment as well as for small corporate customers. Bespoke behavioural scoring models, developed on internal data, are used to support the credit approval process in Nordea Bank Norge. This is also valid for loans in Nordea Eiendomskreditt s lending portfolio. As a supplement to the behavioural scoring models also bureau information is used in the credit process. The internal behaviour scoring models are used to identify the PD (Probability of Default), in order to calculate the economic capital and RWA (Risk Weighed Assets) for customers. The scoring model is validated annually. According to the model, the customers are allocated into one of 21 categories, with customers in category A+ representing the best ability to service the debt. Risk grade distribution for Retail, Exposure at Default 40 % 31 Dec % 30 % 25 % 20 % 15 % 10 % 5 % 0 % A+ A A- B+ B B- C+ C C- D+ D D- E+ E E- F+ F F Nordea Eiendomskreditt Annual Report

170 Nordea Eiendomskreditt Annual Report

171 Nordea Eiendomskreditt Annual Report

172 ANNEX 3 - AUDITED FINANCIAL STATEMENTS OF THE ISSUER FOR THE YEAR ENDED 31 DECEMBER 2011, INCLUDING THE AUDITOR'S REPORT AND NOTES RELATING THERETO

173 Income statement NOK 1000 Note Interest and related income on loans and deposits with financial institutions 20 4,169 18,712 Interest and related income on loans to customers 3,000,814 2,429,274 Other interest and related income Total interest and related income 3,005,451 2,448,220 Interest and related expense on liabilities to financial institutions , ,549 Interest and related expense on securities issued 20 1,950,216 1,538,611 Interest and related expense on subordinated loan capital 4,891 3,737 Other interest and related expense 152,523 52,589 Total interest and related expense 2,442,954 1,799,485 Net interest income 562, ,735 Fee and commission income 35,345 28,254 Fee and commission expense 20 1, Net fee and commission income 33,488 27,388 Net result from items at fair value 3, ,615 3,849 Other operating income Total operating income 792, ,187 Staff costs 4, 12 2,253 4,728 Other expenses 5, ,533 93,824 Total operating expenses 112,787 98,552 Profit before loan losses 679, ,635 Loan losses (negative figures are reversals) 6 15,789 37,239 Operating profit 664, ,396 Income tax expense 7 186, ,894 Net profit for the year 478, ,502 Allocated to: Shareholders of Nordea Eiendomskreditt AS 478, ,502 Total allocation 478, ,502 Profit per share, NOK 31,17 25,07 Nordea Eiendomskreditt Annual Report

174 Statement of comprehensive income NOK Net profit for the period 478, ,502 Other comprehensive income 0 0 Total comprehensive income 478, ,502 Allocated to: Shareholders of Nordea Eiendomskreditt AS 478, ,502 Total allocation 478, ,502 Nordea Eiendomskreditt AS Oslo, 8 February 2012 Jon Brenden Chairman of the Board Børre Gundersen Board member Fanny Borgström Board member Eva Jarbekk Board member Monica Blix Board member Marianne Glatved Managing director Nordea Eiendomskreditt Annual Report