Table
of Contents
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-156118
Pricing Supplement No. 72 (to Prospectus and
Prospectus Supplement
each dated December 15, 2008)
$10,000,000
AKTIEBOLAGET SVENSK EXPORTKREDIT (PUBL)
(Swedish Export Credit Corporation)
Modified S&P DTI-TR Linked Notes
Due October 4, 2010
Your notes are issued by
Aktiebolaget Svensk Exportkredit (Publ) (Swedish Export Credit Corporation) (SEK). Your return on the notes at maturity is
linked to the performance of the Standard & Poors Diversified Trends
Indicator-Total Return, which we call the S&P DTI-TR or the Basic Index, as
the S&P DTI-TR has been modified by changes to its methodology developed by
Goldman Sachs & Co. We call the
S&P DTI-TR, as so modified, the S&P DTI-TR modified or the Modified
Index. The notes are not principal
protected. As a result, at maturity you
may receive less than all and possibly none of your principal investment.
On the maturity date, we will
pay you a repayment amount in cash, which will be based on the difference
between the initial index level of 1585.808 and the final index level as
determined on the fifth business day prior to the maturity date, which we call
the determination date. The repayment
amount will equal the principal amount of your notes times a leverage factor of
three times the percentage increase or decrease in the index, as adjusted to
reflect the cost of providing the commodity-linked return on the notes
described in this pricing supplement.
We will also pay interest on
the notes on December 29, 2009, March 25, 2010 and June 25, 2010
and at maturity or upon earlier redemption or repurchase at a rate equal to
three-month U.S. dollar LIBOR minus a spread of 0.27% per annum. The LIBOR rate will be reset on each
quarterly interest payment date.
On any trading day prior to
the determination date, a holder of all the notes may exercise the right to
require us to repurchase all (but not a portion) of the notes for the repayment
amount as determined on the date the holder gives notice of such exercise, plus
interest accrued to the repurchase date, subject to the prior occurrence of an
index end early event as described below.
An index end early event will
be deemed to have occurred on a trading day prior to the determination date on
which the S&P DTI-TR modified settles at or below 1347.937, or 85% of the
initial index level. Upon an index end
early event, you will receive the repurchase amount determined using the
closing value of the S&P DTI-TR modified on the trading day immediately
following the date of such event, plus interest accrued to the redemption
date. The amount you will be entitled to
receive in such event will be significantly less than the principal amount of
your notes and could be zero.
See Risk
Factors beginning on Page P-16 to read about factors you should consider
before buying the notes.
THIS NOTE IS NOT PRINCIPAL PROTECTED. YOU MAY LOSE UP TO 100% OF YOUR
INVESTMENT IN THE NOTES. THE NOTES ARE
OBLIGATIONS OF SEK, AND NOT THE KINGDOM OF SWEDEN.
Neither the Securities and Exchange Commission nor any other
regulatory body has approved or disapproved of these securities or passed upon
the accuracy or adequacy of this pricing supplement or the prospectus and
prospectus supplement to which it relates. Any representation to the contrary
is a criminal offense.
Goldman, Sachs & Co.
has agreed to purchase the notes from us at a price equal to 99.75% of the
principal amount of the notes, which will result in $9,975,000 of proceeds to
us.
Goldman, Sachs & Co.
may offer the notes in transactions in the over-the-counter market or through
negotiated transactions at market prices or at negotiated prices.
UPDATED CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities To
Be Registered
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Amount To Be
Registered
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Proposed Maximum
Aggregate Price Per Unit
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Proposed Maximum
Aggregate Offering
Price
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Amount of Registration Fee
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Notes offered hereby
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$10,000,000
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100%
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$10,000,000
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$558.00(1)
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(1) The filing fee is calculated in accordance with Rule 457(r) under
the Securities Act. Pursuant to Rule 457 (p) under the Securities
Act, $30,330.22 of the registration fees paid in respect of the securities
covered by the registration statement of which this pricing supplement is a
part remains unused. $558.00 of that amount is being offset against the
registration fee for this offering and $29,772.22 remains available for future
registration fees.
Goldman, Sachs & Co.
expects to deliver the notes in book-entry form only through the facilities of
The Depository Trust Company against payment in New York, New York, on September 25,
2009.
Standard & Poors
®
(S&P), S&P
®
and DTI
®
are registered
trademarks of Standard and Poors Financial Services LLC and have been licensed
for use by Goldman, Sachs & Co. The notes are not sponsored,
endorsed, sold or promoted by S&P and S&P makes no representation,
warranty or condition regarding the advisability of investing in the notes.
Goldman, Sachs & Co.
Pricing
Supplement dated September 18, 2009.
Table of
Contents
ABOUT
THIS PRICING SUPPLEMENT
This pricing supplement is a supplement to:
·
the accompanying prospectus supplement dated December 15,
2008 relating to our medium-term notes, series E, due nine months or more from
date of issue and
·
the
accompanying prospectus dated December 15, 2008 relating to our debt
securities.
If the information in this pricing supplement differs
from the information contained in the prospectus supplement or the prospectus,
you should rely on the information in this pricing supplement.
You should read this pricing supplement along with the
accompanying prospectus supplement and prospectus. All three documents contain information you
should consider when making your investment decision. You should rely only on the information
provided or incorporated by reference in this pricing supplement, the
prospectus and the prospectus supplement.
We have not authorized anyone else to provide you with different
information. We and Goldman, Sachs &
Co. are offering to sell the notes and seeking offers to buy the notes only in
jurisdictions where it is lawful to do so.
The information contained in this pricing supplement and the
accompanying prospectus supplement and prospectus is current only as of its
date.
INCORPORATION
OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to incorporate by reference the
information we file with them. This
means:
·
incorporated
documents are considered part of this pricing supplement;
·
we
can disclose important information to you by referring you to those documents;
·
information
in this pricing supplement automatically updates and supersedes information in
earlier documents that are incorporated by reference in the prospectus; and
·
information
that we file with the SEC that we incorporate by reference in this pricing
supplement will automatically update and supersede this pricing supplement.
We incorporate by reference the document listed below
which we furnished to the SEC under the Securities Exchange Act of 1934:
·
our
annual report on Form 20-F for the fiscal year ended December 31,
2008, which we filed with the SEC on May 20, 2009;
·
our
report on Form 6-K which we furnished to the SEC on June 24, 2009;
·
our
report on Form 6-K which we furnished to the SEC on September 2,
2009; and
·
our
report on Form 6-K which we furnished to the SEC on September 8,
2009.
We also incorporate by reference each of the following
documents that we may file with the SEC after the date of this pricing
supplement but before the end of the notes offering:
·
any
report on Form 6-K filed by us pursuant to the Securities Exchange Act of
1934 that indicates on its cover or inside cover page that we will
incorporate it by reference in the registration statement of which this pricing
supplement forms a part; and
P-2
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·
reports
filed under Sections 13(a), 13(c) or 15(d) of the Securities
Exchange Act of 1934.
You may request a copy of any filings referred to
above (excluding exhibits), at no cost, by contacting us at the following
address:
AB Svensk Exportkredit
(Swedish Export Credit Corporation)
Västra Trädgårdsgatan 11B
10327 Stockholm, Sweden
Tel: 011-46-8-613-8300
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Table of
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DESCRIPTION OF THE NOTES
We will issue the notes under the
indenture. The information contained in
this section and in the prospectus supplement and the prospectus summarizes
some of the terms of the notes and the indenture. This summary does not contain all of the
information that may be important to you as a potential investor in the
notes. You should read the indenture and
the supplemental indentures before making your investment decision. We have filed copies of these documents with
the SEC and at the offices of the trustee.
You should also carefully consider the matters set forth in Risk
Factors before you decide to invest in the notes.
For the purposes hereof, the terms Debt
Securities, Indexed Security and Principal Indexed Security used in the
prospectus, and the terms Notes and Indexed Notes used in the prospectus
supplement, include the notes we are offering in this pricing supplement.
Principal Amount:
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$10,000,000 in aggregate. For purposes of expressing
calculations of payments on the Notes, each Note is deemed to have a
Principal Amount of $1,000.
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Issue Price:
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100% of the Principal Amount.
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Trade Date:
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September 18, 2009
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Original Issue Date (Settlement Date):
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September 25, 2009
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Maturity Date:
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October 4, 2010 (the Stated Maturity Date),
unless that day is not a Business Day, in which case the Stated Maturity Date
will be the next following Business Day. If the fifth Business Day before the
Stated Maturity Date is not the Determination Date, then the Stated Maturity
Date will be the fifth Business Day after the Determination Date. If an Index
End Early Event (as defined below) shall have occurred or the Early
Repurchase Option (as defined below) shall have been exercised in accordance
with the terms of the Notes, the relevant maturity date shall be the Early
Maturity Date (as defined below).
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Basic Index:
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The Standard & Poors Diversified Trends
Indicator-Total Return, which we refer to as the S&P DTI-TR or the Basic
Index. See The Standard & Poors Diversified Trends Indicator.
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Basic Index Sponsor:
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The corporation or other entity that, in the
determination of the Calculation Agent, (i) is responsible for setting and
reviewing the rules and procedures and the methods of calculation and
adjustments, if any, related to the Basic Index and (ii) announces
(directly or through an agent) the level of the Basic Index on any Business
Day; as of the date of this pricing supplement, the Basic Index Sponsor is
Standard and Poors.
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Modified Index:
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The S&P DTI-TR, as modified by changes to its
methodology developed by Goldman Sachs & Co. We call the S&P
DTI-TR, as modified, the S&P DTI-TR Modified or the Modified Index. See
The S&P DTI-TR Modified.
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Modified Index Sponsor:
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The corporation or other entity that, in the
determination of the Calculation Agent, (i) is responsible for setting
and reviewing the rules and procedures and the methods of calculation
and adjustments, if any, related to the Modified Index and (ii)
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announces (directly or through an agent) the level
of the Modified Index on any Business Day; as of the date of this pricing
supplement, the Modified Index Sponsor is Goldman Sachs, & Co.
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Interest:
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Interest will accrue on the outstanding principal
amount of each Note for the period from and including the most recent
Interest Payment Date (but if no interest has yet been paid, from and including
the Original Issue Date) to but excluding the earlier of (i) the
immediately following Interest Payment Date and (ii) the Early Maturity
Date, as applicable.
On each Interest Payment Date, interest in an amount
in cash equal to:
(i) If no Index End Early Event has occurred or
no Early Repurchase has been validly designated:
Principal Amount x Accrued
Interest Factor
(ii) If an Index End Early Event has occurred
or an Early Repurchase has been validly designated:
FIDF x Principal Amount x Accrued
Interest Factor
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Interest Factor:
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(Base Rate + Spread)/360, subject to a minimum of
0.00%.
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Accrued Interest Factor:
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For each Interest Period, the sum of the Interest
Factors for each calendar day during such Interest Period.
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Base Rate:
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(i) If the applicable Interest period begins on
the Settlement Date: the Initial Base Rate.
(ii) If the applicable Interest Period
(1) does not begin on the Settlement Date and (2) does not end on
the day before the Stated Maturity Date: USD LIBOR for a maturity of three
months at 11:00 a.m., London time, on the applicable Interest
Determination Date as reported on Reuters Screen LIBOR01 (or any successor or
replacement service or page).
(iii) If the applicable interest Period ends on
the day before the Stated Maturity Date: a rate that the Calculation Agent
will determine by interpolating between (1) the USD LIBOR of longest
maturity that is less than or equal to the length of the applicable Interest
Period, and (2) the USD LIBOR of shortest maturity that is greater than
or equal to the length of the applicable Interest Period, in both cases as
they appear on Reuters Screen LIBOR01 (or any successor or replacement
service or page), as of 11:00 a.m., London time, as determined
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on the applicable Interest Determination Date. For
the avoidance of doubt, the Base Rate will not be re-evaluated even if the
Stated Maturity Date is postponed due to a Market Disruption Event at the end
of the final Interest Period.
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Spread:
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Minus 0.27% per annum.
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Minimum Rate:
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0.00%
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Interest Period:
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The period from and including the Settlement Date to
but excluding the next succeeding Interest Payment Date and each successive
period from and including an Interest Payment Date to but excluding the next
succeeding Interest Payment Date.
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Interest Payment Dates:
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December 29, 2009, March 25, 2010 and
June 25, 2010 and the Maturity Date, unless an Index End Early Event or
an Early Repurchase has been validly designated (in which case the Early
Maturity Date will be the final Interest Payment Date); provided that any
such day that is subsequent to the Early Maturity Date shall not be an
Interest Payment Date (in which case the Early Maturity Date shall instead be
the last Interest Payment Date), provided, further, that if any such day is
not a Business Day, then the Interest Payment Date will be the next
succeeding Business Day, unless that succeeding Business Day would fall in
the next calendar month, in which case such Interest Payment Date will be the
immediately preceding Business Day.
If the Stated Maturity Date is postponed due to a
Market Disruption Event or otherwise, we will pay the accrued interest on the
Maturity Date as postponed.
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Interest Reset Dates:
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December 29, 2009, March 25, 2010 and
June 25, 2010; provided that if any such day is not a Business Day, the
Interest Reset Date will be the next succeeding Business Day, unless that
succeeding Business Day would fall in the next calendar month, in which case
such Interest Reset Date will be the immediately preceding Business Day.
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Interest Determination Dates:
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The second London Banking Day prior to the
Settlement Date and to each Interest Reset Date.
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Determination Date:
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September 27, 2010, provided however, that if
such day is not a Trading Day or if a Market Disruption Event occurs or is
continuing on such date, then the Determination Date shall be the next
Trading Day on which no Market Disruption Event occurs or is continuing;
provided, however, that in any event the Determination Date will be no later
than the Stated Maturity Date (or, if such day is not a Business Day, the
Business Day immediately following the Stated Maturity Date, in which case
the Calculation Agent shall make all required calculations on such date in
the manner described in this pricing supplement).
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Repayment Amount:
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On the Maturity Date,
in addition to the payment of accrued and unpaid interest, if any, you will
receive an amount of cash per Note as determined by the Calculation Agent,
equal to:
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Principal Amount +
Final Index Amount Final TBill Amount Final Fee Amount
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provided that in no event will the Repayment Amount
be less than zero.
If the Final Index Level is less then the Initial
Index Level, the amount payable on the Maturity Date will be less than the
Principal Amount and may be zero.
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Final Index Amount:
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Factor:
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3.0
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Initial Index Level:
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1585.808
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Final Index Level:
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The closing level of the Modified Index on the
Determination Date, subject to the effect of any Market Disruption Event.
If the Final Index Level is less than the Initial
Index Level, the amount payable on the Maturity Date will be less than the
Principal Amount and may be zero.
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Final Fee Amount:
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Annual Fee (Fee):
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1.50% per annum (calculated on the actual number of
days elapsed in a 365 day year).
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Final Fee Days:
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The total number of days from but excluding the
Trade Date to and including the Determination Date.
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Final TBill Amount:
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Principal Amount x Factor x Realized TBill Amount
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Realized TBill Amount:
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Equal to (1+Daily TBill Return) for each calendar
day in the TBill Calculation Period, minus 1,
Where:
(1+Daily TBill Return) equals (1-91/360*r
d-1
) to the power of (-1/91) and d means each calendar
day in the TBill Calculation Period and r
d
is the TBill
Auction High Rate for day d as defined above.
In formulaic terms the Realized TBill Amount equals
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If on any calendar day in the TBill Calculation
Period United States Treasury Bills of the TBill Interest Rate Designated
Maturity have been auctioned on a TBill Interest Rate Reset Date during the
TBill Calculation Period but such rate for such TBill Interest Rate Reset
Date does not appear on Reuters Screen US AUCTION 10111 (or any official
successor or replacement page thereof), the rate for that TBill Interest
Rate Reset Date will be the Bond Equivalent Yield of the rate set forth in
H.15 Daily Update (or any official successor page thereto), or such
other recognized electronic source used for the purpose of displaying such
rate, for that day in respect of the Designated Maturity under the caption
U.S. Government Securities /Treasury bills/Auction high converted by the
Calculation Agent in its discretion to bank discount basis such that it is
expressed in the same manner as the High Auction Rate.
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If on any calendar day in the TBill Calculation
Period United States Treasury Bills of the TBill Interest Rate Designated
Maturity have been auctioned on a TBill Interest Rate Reset Date during the
TBill Calculation Period but such rate for such TBill Interest Rate Reset
Date does not appear on Reuters Screen US AUCTION 10111 (or any official
successor or replacement page thereof) and such rate is not set forth in
the H.15 Daily Update in respect of the TBill Interest Rate Designated
Maturity under the caption U.S. Government securities/Treasury bills/Auction
high or another recognized electronic source, the rate for that TBill
Interest Rate Reset Date will be the Bond Equivalent Yield of the auction
rate for those Treasury Bills as announced by the United States Department of
Treasury, converted by the Calculation Agent in its discretion to bank
discount basis such that it is expressed in the same manner as the High
Auction Rate.
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If the United States Treasury Bills of the TBill
Interest Rate Designated Maturity are not auctioned during any period of
seven consecutive calendar days ending on a Friday and a TBill Interest Rate
Reset Date would have occurred if such Treasury Bills had been auctioned
during that seven-day period, a TBill Interest Rate Reset Date will be deemed
to have occurred on the day during that seven-day period on which such
Treasury Bills would have been auctioned in accordance with the usual
practices of the United States Department of Treasury, and the rate for that
TBill Interest Rate Reset Date will be determined as if the parties had
specified USD-TBILL-Secondary Market as the applicable TBill Interest Rate
Option.
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TBill Interest Rate Designated Maturity:
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3 months.
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TBill Auction High Rate for Each Date:
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The USD-TBill Auction High Rate published at the
most recent Auction Date prior to that day.
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TBill Calculation Period:
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From but excluding the Settlement Date to and
including the Stated Maturity Date.
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TBill Interest Rate Reset Date:
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Each day in the TBill Calculation Period on which
U.S. Treasury Bills of the TBill Interest Rate Designated Maturity are
auctioned.
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TBill Interest Rate Option:
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USD-TBILL Auction High Rate
Where:
USD-TBILL Auction High Rate means that the rate
for a TBill Interest Rate Reset Date on which United States Treasury Bills
are auctioned will be the rate for that day which appears on the Telerate
Page 56 (or any official successor or replacement page thereof) under the
heading HIGH RATE.
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Consequences of Market Disruption:
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If a Market Disruption (as defined below) relating
to one or more underliers included in the Index (which we refer to as the
Index Underliers) occurs or is continuing on the originally scheduled
Determination Date (if that day is not a Trading Day, then the following trading
day) or Early Determination Date, as applicable, the Calculation Agent will
calculate the Final Index Level or the Early Index Level, as applicable, by
using:
(i) for each Index Underlier that did not suffer a
Market Disruption on such date, the Settlement Price (as defined below) of
such Index Underlier on such date as published by the trading facility on
which it is traded and
(ii) for each Index Underlier that did suffer a
Market Disruption on such date, the Settlement Price of such Index Underlier
on the first succeeding Trading Day on which no Market Disruption occurs or
is continuing with respect to such Index Underlier;
provided
that, if such day occurs more
than five business days after the originally scheduled Determination Date or
Early Determination Date, as the case may be, the Calculation Agent shall
determine the price for such Index Underlier on the fifth business day after
the originally scheduled Determination Date or Early Determination Date, as
applicable, taking into consideration the latest available Settlement Price
for such Index Underlier and any other information deemed relevant by the
Calculation Agent.
In calculating the Final Index Level or the Early
Index Level in the circumstances described above, the Calculation Agent will
use the method for calculating the Index last in effect prior to such Market
Disruption.
In addition, if the Calculation Agent determines
that the level of the Index or any Settlement Price that must be used to
determine the Final Index Level or Early Index Level, as applicable, is not
available on the Determination Date or the Early Determination Date, as the
case may be, for any other reason, except as described under
Discontinuance or Modification of the Basic Index or the Index in the
prospectus supplement, then the Calculation Agent will determine the Final
Index Level or Early Index Level, as applicable, based on its assessment,
made in its sole discretion, of the level of the Index or any relevant
Settlement Price on such applicable day.
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Market Disruption:
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Market Disruption with respect to an Index Underlier
means the occurrence on any given Trading Day of any one or more of the
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following circumstances:
(i) A material limitation, suspension, or disruption
of trading in such Index Underlier which results in a failure by the trading
facility on which such Index Underlier is traded to report a Settlement Price
for such Index Underlier on such Trading Day,
(ii) The Settlement Price for such Index Underlier
is a limit price, which means that the Settlement Price for such Index
Underlier on such Trading Day has increased or decreased from the previous
days Settlement Price by the maximum amount permitted under applicable
trading facility rules,
(iii) Failure by the applicable trading facility or
other price source to announce or publish the Settlement Price for such Index
Underlier on such Trading Day, or
(iv) Trading in an Index Underlier on the applicable
trading facility is suspended or interrupted prior to the time at which it is
scheduled to close, and trading in such Index Underlier does not resume at
least 10 minutes prior to the scheduled closing time and in the event trading
does resume at least 10 minutes prior to the scheduled closing time, trading
in such Index Underlier on the applicable trading facility does not continue
for the entire period until such scheduled closing time.
Settlement Price means the official settlement
price of an Index Underlier as published by the trading facility on which it
is traded.
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Valuation Date:
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Valuation Date means
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(i) with respect to the Early Repurchase Option, the
Early Repurchase Notice Date;
(ii) with respect to the Index End Early Event, the
Trading Day immediately following the Trigger Date ((i) and (ii) each being
called an Early Valuation Date); and
(iii) with respect to the Maturity Date, the
Determination Date.
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If the Early Repurchase Option has been exercised or
an Index End Early Event has occurred, the amount payable on the Early
Maturity Date shall be determined as set forth in the relevant sections
below:
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Early Repurchase Amount:
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On the Early Maturity Date, in addition to accrued
and unpaid interest, we will pay for each Note an amount in cash equal to:
Principal
Amount + Early Index Amount Early TBill Amount Early Fee Amount
but not less than 0.
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The Calculation Agent will provide written notice to
the Trustee, on or prior to 10:30 a.m. (New York City time) on the third
Business Day immediately preceding the Early Maturity Date, of the payment to
be delivered with respect to each Note. We will deliver such payment in cash
to the Trustee for delivery to you
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on the Early Maturity Date, upon delivery of your
Notes to the Trustee.
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Early Maturity Date:
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The fifth Business Day following the applicable
Early Valuation Date or, if a Market Disruption Event is in effect on the
Early Valuation Date, the fifth Business Day following the date on which the
applicable Early Index Level is determined.
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Index End Early Event:
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If on any Trading Day prior to the earlier of (i) the
designation of an Early Repurchase by the holder and (2) the scheduled
Determination Date, the closing level of the Modified Index settles at or
below 1347.937 (which is 85% of the Initial Index Level) (the Trigger
Level), as determined by the Calculation Agent in its sole discretion, an
Index End Early Event shall be deemed to have occurred and your note will be
automatically redeemed in accordance with the provisions below relating to
the Early Repurchase Option. Upon occurrence of an Index End Early Event,
notice will be given to DTC in a manner described in the accompanying
prospectus.
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The Calculation Agent will provide written notice of
the occurrence of an Index End Early Event to the Trustee and to DTC at or
prior to 10:30 a.m. (New York City time) on the third Business Day
immediately succeeding the Trigger Date.
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Trigger Date:
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The date on which the level of the Modified Index
settles at or below the Trigger Level.
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Early Repurchase Option:
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Holders of all the Notes representing 100% of the
aggregate Principal Amount will be entitled to require us to repurchase all
(but not a portion) of the Notes on the applicable Early Maturity Date for
the Early Repurchase Amount plus accrued and unpaid interest to but excluding
the applicable Early Maturity Date if by the earlier of 9:00 a.m. (New York
time) on the Early Repurchase Notice Date such holder has (i) completed and
delivered to the Calculation Agent through its participant at The Depository
Trust Company, which we refer to as DTC, the Official Notice of Early
Repurchase Exercise (in the form of Annex A attached hereto), (ii) given
telephonic notification to the Calculation Agent of its exercise of the Early
Repurchase Option (confirmed by fax on such date to the Calculation Agent,
which will give notice to us) and (iii) irrevocably instructed its broker or
the participant through which it owns its interest in the Notes to transfer
the entire book entry interest in the Notes to the Trustee on its behalf on
or before the applicable Early Maturity Date.
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The holder of the Notes will not, however, be
entitled to exercise the Early Repurchase Option if (i) an Index End Early
Event has occurred on or prior to the Early Repurchase Notice Date or (ii) such
holder owns representing less than 100% of the aggregate Principal Amount.
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Early Repurchase Notice Date:
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Any Trading Day on which the holder of all the Notes
has duly completed and delivered to the Calculation Agent the Official Notice
of Early Repurchase Exercise, has made the telephonic and fax notifications
to the Calculation Agent and us and irrevocably instructed its broker or DTC
participant, in each case, at or prior to 9:00 a.m. (New York City time), as
described under
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Early Repurchase Option above; provided that
such Trading Day falls during the period commencing on the Trading Day
following the Issue Date and ending on the earlier of (i) 9:00 a.m. on the
Trading Day prior to any Trigger Date and (ii) 9:00 a.m. (New York City time)
on the Determination Date. If the Official Notice of Early Repurchase
Exercise was given after 9:00 a.m., New York time on a Trading Day, or on a
day that is not a Trading Day, the Early Repurchase Notice Date will be the
first Trading Day following the date on which the Official Notice of Early
Repurchase Exercise is given unless an Index End Early Event occurs on such
date.
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Early Index Amount:
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Early Index Level:
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The closing level of the Modified Index as
determined on the applicable Early Valuation Date, except in limited
circumstances described in the prospectus supplement.
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Index Days Remaining:
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The number of days from (but excluding) the
applicable Early Valuation Date up to (and including) September 27, 2010.
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Fixed Income Discount Factor (FIDF):
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Fixed Income Discount Factor LIBOR (FIDF LIBOR):
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The LIBOR rate for deposits in U.S. Dollars for the
FIDF LIBOR Designated Maturity (interpolated, if necessary, by the
Calculation Agent) which appears on Reuters Screen LIBOR01 (or any successor
or replacement service or page) as of 11:00 a.m., London time, on the
applicable Early Valuation Date. If such rate does not appear on Reuters
Screen LIBOR01 (or any successor or replacement service or page), FIDF LIBOR
shall be determined by the Calculation Agent.
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Fixed Income Days Remaining:
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The number of calendar days from (but excluding) the
Early Maturity Date up to (and including) the earlier of (1) the next
Interest Reset Date immediately following the Early Maturity date and (2) the
Stated Maturity Date.
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FIDF LIBOR Designated Maturity
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A period equal to the Fixed Income Days Remaining,
subject to a minimum of one month.
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Early TBill Amount:
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Principal
Amount * Factor * Historic TBill Amount
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Historic TBill Amount:
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The Realized TBill Amount, with a Calculation Period
from (but excluding) the Trade Date to (and including) the applicable Early
Valuation Date.
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TBill Factor:
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The projected Realized TBill Amount from the
applicable Early Valuation Date to the Determination Date, calculated by the
Calculation Agent in its discretion intended to reflect the fair economic
value to both parties.
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Early Fee Amount:
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Early Fee Days:
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The total number of calendar days from but excluding
the Trade Date up to and including the applicable Early Valuation Date.
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General Provisions
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Trading Day:
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Trading Day means a day when
1) The Basic
Index Sponsor (as defined below under Adjustments to the Basic Index) is
open for business and calculates and publishes the S&P DTI-TR;
2) Goldman, Sachs
& Co. in New York is open for business and calculates and publishes the
Modified Index and the Calculation Agent is open for business in London; and
3) All trading
facilities on which contracts are traded for the commodities included in the
Modified Index are open for trading.
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Business Day:
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Any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close in the City of New York
or London.
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Denominations:
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$1,000 minimum and $1,000 integral multiples
thereafter. For purposes of expressing calculations of payments on the Notes,
each Note is deemed to have a principal amount of $1,000.
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CUSIP:
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00254EJF0
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Form of Note:
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Book Entry. The Notes will be issued in the form of
one or more fully registered global securities which will be deposited with,
or on behalf of, DTC and will be registered in the name of a nominee of DTC.
DTCs nominee will be the only registered holder of the Notes. Your
beneficial interest in the Notes will be evidenced solely by entries on the
books of the securities intermediary acting on your behalf as a direct or
indirect participant in DTC. In this pricing supplement, all references to
actions taken by you or to be taken by you refer to actions taken or to be
taken by DTC and its participants acting on your behalf, and all references
to payments or notices to you will mean payments or notices to DTC, as the
registered holder of the Notes, for distribution to participants in
accordance with DTCs procedures. For more information regarding DTC and book
entry securities, please read Description of the NotesForms of the Notes
in the accompanying prospectus supplement.
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Trustee:
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The Bank of New York Trust Company, N.A., successor
in interest to J.P. Morgan Trust Company, National Association.
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Calculation Agent:
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Goldman Sachs International.
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All determinations made by the Calculation Agent
will be at the sole discretion of the Calculation Agent and will, in the
absence of manifest error, be conclusive for all purposes and binding on
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you, the Trustee and us.
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Adjustment to the Basic Index:
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If the Basic Index is (i) not calculated and
announced by S&P but is calculated and announced by a successor sponsor
acceptable to the Calculation Agent or (ii) replaced by a successor index
using, in the determination of the Calculation Agent, the same or a
substantially similar formula for and method of calculation as used in the
calculation of the Basic Index, then the Basic Index will be deemed to be the
Basic Index so calculated and announced by that successor sponsor or that
successor index, as the case may be. We refer to S&P or any such
successor sponsor or the sponsor of any such successor index as the Index
Sponsor.
If prior to the Determination Date, the Index
Sponsor makes a material change in the formula for or the method of
calculating the Basic Index or in any other way materially modifies the Basic
Index (other than a modification prescribed in that formula or method
relating to the composition of the Basic Index, the weighting of the
components of the Basic Index and other routine events and modifications),
then (unless Goldman, Sachs & Co. has theretofore reflected such change
or modification in the calculation and publication of the Modified Index) the
Calculation Agent shall calculate the level of the Modified Index, in lieu of
a published level for the Modified Index, in accordance with the formula for
and method of calculating the Modified Index last in effect prior to that
change or modification, but using only those contracts that were included in
the Modified Index immediately prior to that change or modification (or, if
such contracts are no longer traded, contracts that are the most comparable,
in the judgment of the Calculation Agent), in good faith and in a
commercially reasonable manner.
If the Final Index Level published on the
Determination Date is subsequently corrected and the correction is published
by the Calculation Agent not later than four Business Days prior to the
Maturity, then the corrected Final Index Level for the Determination Date
shall be deemed the official Final Index Level for the Determination Date and
the Calculation Agent shall use the corrected Final Index Level in accordance
with the above provisions.
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Alternate Redemption Calculation in Case of an Event
of Default:
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In case an event of default with respect to the
Notes shall have occurred and be continuing, the amount declared due and
payable per Note upon any acceleration of the Notes (an Event of Default
Acceleration) shall be determined by the Calculation Agent and shall be an
amount in U.S. dollars equal to the Repayment Amount plus accrued and unpaid
interest to but excluding the applicable redemption date, calculated as
though the date of acceleration were a Valuation Date; provided that, if
either (i) you have exercised your Early Repurchase Option or (ii) an Index
End Early Event has occurred, the amount declared due and payable upon any
such acceleration will be the Early Repurchase Amount plus accrued and unpaid
interest to but excluding the applicable redemption date determined by the
Calculation Agent as of the applicable Valuation Date.
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If the maturity of the Notes is accelerated because
of an Event of Default Acceleration as described above, we shall, or shall
cause the calculation agent to, provide written notice to the Trustee at its
New York office, on which notice the Trustee may conclusively rely, and to
DTC of the aggregate amount of cash due with respect to the Notes as promptly
as possible and in no event later than two Business Days after the date of
acceleration.
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Tax Redemption:
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We may redeem the Notes prior to maturity if, due to
the imposition by Sweden or one of its taxing authorities of any tax,
assessment or governmental charge subsequent to the date of the issuance of
the Notes, we would become obligated to pay additional amounts. If such an
imposition occurs, we may at our option redeem all, but not less than all,
the Notes by giving notice specifying a redemption date at least 30 days, but
not more than 60 days, after the date of the notice. In such event, the
redemption price per Note will be determined by the Calculation Amount and
will be equal to the Repayment Amount plus accrued and unpaid interest to but
excluding the redemption date, calculated as though the applicable Valuation
Date were the third Business Day prior to the Early Maturity Date.
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RISK FACTORS
The
following section of this pricing supplement contains information about risks
that are particular to the notes.
Investors in the notes are also exposed to further risks related to the
issuer of the notes, SEK, which are described in our annual report on Form 20-F
for the year ended December 31, 2008, filed with the SEC on May 20,
2009, and incorporated by reference herein.
See the information under Risk Factors beginning on page 4 of the
annual report on Form 20-F.
Unlike
ordinary debt securities, the return on the notes depends on changes in values
of a basket of futures contracts on specified commodities, currencies and U.S.
Treasury Securities, calculated by the methodologies described under The
Standard & Poors Diversified Trends Indicator and The S&P
DTI-TR Modified in this Pricing Supplement.
As described in more detail below, the trading price of the notes may
vary considerably before the maturity date due, among other things, to
fluctuations in the prices of the futures contracts that make up the S&P
DTI and other events that are difficult to predict and beyond our control. Your notes are a riskier investment than
ordinary debt securities. Also, your
notes are not equivalent to investing directly in the futures contracts
comprising the S&P DTI. You should
carefully consider the risks set forth below before investing in the notes.
The
notes are financial instruments that are suitable only for sophisticated
investors who are experienced with respect to derivatives and derivative
transactions and indexed instruments, and who are able to bear the loss of a
portion of their principal investment.
An investment in a product such as the notes linked to the S&P
DTI-TR modified is speculative and involves a substantial degree of risk. Accordingly, you should consult your own
financial and legal advisors as to the risks entailed by an investment in the
notes and the suitability of such notes in light of your particular
circumstances. For further information,
see Risks associated with foreign currency notes and indexed notes in the
prospectus supplement.
Assuming no changes in market
conditions or any other relevant factors, the value of your notes on the date
of this pricing supplement (as determined by reference to pricing models used
by Goldman, Sachs & Co.) is significantly less than the original issue
price.
The value or quoted price of your notes at any time,
however, will reflect many factors and cannot be predicted. If Goldman, Sachs & Co. makes a
market in the notes, the price quoted by Goldman, Sachs & Co. would
reflect any changes in market conditions and other relevant factors, and the
quoted price (and the value of your notes that Goldman, Sachs & Co.
will use for account statements or otherwise) could be higher or lower than the
original issue price, and may be higher or lower than the value of your notes
as determined by reference to pricing models used by Goldman, Sachs &
Co.
If at any time a third party dealer quotes a price to
purchase your notes or otherwise values your notes, that price may be
significantly different (higher or lower) than any price quoted by Goldman,
Sachs & Co. You should read The
market value of your notes may be influenced by many factors that are complex
and unpredictable, including volatile commodities prices below.
Furthermore, if you sell your notes, you will likely
be charged a commission for secondary market transactions, or the price will
likely reflect a dealer discount.
There is no assurance that Goldman, Sachs &
Co. or any other party will be willing to purchase your notes and, in this
regard, Goldman, Sachs & Co. is not obligated to make a market in the
notes. See Secondary trading in the
notes may be limited below.
We will not repay you a fixed amount
of principal on the notes at maturity and we are not liable for any loss of
principal that you may incur due to fluctuations in the index level.
The repayment amount will depend on the change in the
value of the S&P DTI-TR modified.
Because the value of the Modified Index is subject to market
fluctuations, the repayment amount may be less than the principal amount of the
notes, and you will lose part or all of your investment if the final index
level is below the initial index level.
Even if the final index level is above the initial index level, you may
lose part of your principal investment if the excess does not offset the
deduction in the repayment amount
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for the cost of providing the commodity-linked return
on the notes. You may also lose part or
all of your investment if you sell the notes in the secondary market before
their maturity.
Leverage increases the sensitivity of
your notes to changes in the value of the Modified Index.
Because your investment
in the notes is leveraged, changes in the value of the Modified Index will have
a greater impact on the payout on your notes than on a payout on securities
that are not so leveraged. Since the
leverage factor provides 300% exposure to increases and decreases in the value
of the Modified Index, every 1% change in the value of the Modified Index will
translate into approximately a 3% change in the repayment amount you will
receive. In particular, any decrease in
the value of the Modified Index would result in a significantly greater decrease
in the repayment amount and you would suffer losses on your investment in the
notes substantially greater than you would if your notes did not contain a
leverage component.
Your notes will be automatically
redeemed if the index level is equal to less than
85
% of the initial index
level.
If on any trading day
prior to the Determination Date, the value of the Modified Index is equal to or
less than
85% of the
initial index level, which we call an index end early event, your notes will be
automatically redeemed. The repayment
amount will be based on the performance of the Modified Index, as reduced by
interest charges and fees for providing the index-linked return on the notes,
as determined on the trading day immediately following the index end early
event. In this case, you will receive a
repayment amount that will likely be significantly less than the principal
amount of your notes and could be zero if the index value drops precipitously.
The formula for determining the
repayment amount does not take into account all developments in the S&P
DTI-TR modified.
The formula used to calculate the repayment amount
otherwise only compares the index levels on the trade date and the applicable
valuation date. No other index levels
will be taken into account for that purpose.
As a result, you may lose part of your investment even if the Modified
Index has risen at certain times during the term of the notes before falling to
a level below the initial index level on the determination date.
Past index performance is no guide to
future performance.
The actual performance of the S&P DTI-TR modified
over the life of the notes, as well as the amount payable at maturity, may bear
little relation to the historical levels of the S&P DTI-TR modified or to
the hypothetical return examples set forth elsewhere in this pricing
supplement. We cannot predict the future
performance of the Modified Index.
There is a greater possibility that
the S&P DTI-TR modified will decline substantially over the short term than
over the longer term.
The term of the notes is approximately one year. Actual and hypothetical historical
information indicates that, although the S&P DTI-TR modified has been
profitable over most twelve month periods, it has performed significantly
better over three- and five-year periods.
There is a greater risk over the shorter term than the longer term that
the S&P DTI-TR modified may decline, causing significant losses.
There are economic conditions under
which the S&P DTI-TR modified would sustain major losses.
Whipsaw markets, in which significant price
movements do develop but then repeatedly reverse, could cause substantial
losses due to prices moving against the long or short positions. Furthermore, any factors which contribute to
trendless markets are likely to be adverse to the S&P DTI-TR modified and,
therefore, to the value of your notes.
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Data sourcing, calculation and
concentration risks associated with the S&P DTI-TR modified may adversely
affect the market price of the notes.
The notes are linked to
the Modified Index, which is composed of a basket of exchange-traded futures
contracts on commodities and currencies and is therefore less diversified than
funds or investment portfolios investing in a broader range of products.
Accordingly, the notes could experience greater volatility than these other
investments. Additionally, the monthly
rebalance of the Modified Index is subject to potential errors in data sources
or other errors that may affect the weighting of the Modified Index
underliers. Additionally, the Index
Sponsor may not discover every discrepancy.
Furthermore, the weightings for the Basic Index are determined by the
Index Sponsor and these weightings impact the Modified Index. The Index Sponsor also has discretion in
making decisions with respect to the Basic Index and has no obligation to take
the needs of the holders of the notes into consideration when rebalancing or
making any other changes to the Basic Index.
Finally, the exchange-traded commodities underlying the futures
contracts included in the Modified Index from time to time are concentrated in
a limited number of sectors. An
investment in the notes may therefore carry risks similar to a concentrated
securities investment in a limited number of industries or sectors.
The market value of your notes may be
influenced by many factors that are complex and unpredictable, including
volatile commodities prices.
When we refer to the market value of your notes, we
mean the value that you could receive for your notes if you chose to sell them
in the open market before the maturity date.
The market value of your notes will be affected by
many factors that are beyond our control and are unpredictable. Moreover, these factors interrelate in
complex ways, and the effect of one factor on the market value of your notes
may offset or enhance the effect of another factor. One of the risks in investing in a product
tied to the S&P DTI-TR modified is the complexity of the different factors
which contribute to the results of the index.
The S&P DTI-TR modified could decline in a wide range of market
scenarios, including ones in which other commodity indices (both all long and
long/short) rise substantially.
Prices of commodity futures contracts
may change unpredictably, affecting the value of your notes in unforeseeable
ways.
Prices of commodity futures contracts are affected by
a variety of factors, including weather, governmental programs and policies,
national and international political and economic events, changes in interest
and exchange rates and trading activities in commodities and related
contracts. These factors may affect the
level of the Modified Index and the value of your notes in varying ways, and
different factors may cause the value of different commodity futures contracts
included in the Modified Index, and the volatilities of their prices, to move
in directions not anticipated in the methodologies underlying the basic index
and the Modified Index.
The value of the currencies
underlying the component currency futures contracts may be affected by complex
political and economic factors.
The value of any currency, including those underlying
the futures contracts included in the Modified Index as well as the U.S.
dollar, may be affected by complex political and economic factors. The value of a futures contract for a
currency at any time reflects the expectation of the future supply and demand
for that currency and the U.S. dollar.
Changes in exchange rates and values of futures contracts result over
time from the interaction of many factors directly or indirectly affecting
economic conditions in the countries issuing the applicable currencies, the
United States and other countries. Of
particular importance are the relative rates of inflation, interest rate
levels, the balance of payments and the extent of government surpluses or
deficits in those countries and the United States, all of which are in turn
sensitive to the monetary, fiscal or trade policies pursued by the governments
of the issuing countries, the United States and other countries important to
international trade.
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The index level will affect the
market value of your notes, but the market value of your notes may not change
in the same manner as the level of the Modified Index.
We expect that the market value of your notes at any
particular time will depend substantially on the amount, if any, by which the
level of the Modified Index at that time has risen above or has fallen below
the initial index level.
However, your notes may trade quite differently from
the performance of the Modified Index.
For the reasons described under The formula for determining the
repayment amount does not take into account all developments in the S&P
DTI-TR modified and other market-related reasons, such as those described
below, changes in the level of the Modified Index may not result in comparable
changes in the market value of your notes.
If you sell notes prior to maturity, you may receive substantially less
than the amount that would be payable if the repayment amount were calculated
as if your date of sale were the maturity date because of an expectation that
the index level will continue to fluctuate, or exhibit volatility, until the
final index level is determined. If you
sell your notes at a time when the level of the Modified Index has generally
trended below, or not sufficiently above, the initial index level, you may
receive less than the principal amount of your notes. Political, economic and other developments
that affect the commodity and financial components underlying the Modified
Index may also affect the level of the Modified Index and, indirectly, the
market value of your notes.
Changes in interest rates are likely
to affect the market value of your notes.
We expect that the market value of your notes, like
that of a traditional debt security, will be affected by changes in interest
rates, although these changes may affect your notes and a traditional debt
security to different degrees. This is particularly true because financial
futures contracts represent 50% of the value of the S&P DTI and two of the
component instruments are contracts for U.S. Treasury securities. Because the Modified Index includes contracts
held in short positions, it is difficult to predict how changes in interest
rates will affect the value of the Modified Index and your notes.
Changes in the volatility of the
index are likely to affect the market value of your notes.
The volatility of the index refers to the size and
frequency of the changes in the index level.
Because the methodology of the Modified Index is intended to minimize
overall volatility in the index, we expect, in general, that if the volatility
of the Modified Index increases, the market value of your notes will decrease
and, conversely, if the volatility of the Modified Index decreases, the market
value of your notes will increase.
Any decline in our credit ratings may
affect the market value of your notes.
Our credit ratings are an assessment of our ability to
pay our obligations, including those on the offered notes. Consequently, actual or anticipated declines
in our credit ratings may affect the market value of your notes.
Trading and other transactions by
Goldman, Sachs & Co. in the futures contracts included in the S&P
DTI and the underlying commodities, currencies and U.S. treasury securities may
adversely affect the value of your notes.
Goldman, Sachs & Co. and its affiliates
actively trade the futures contracts included in the S&P DTI and options on
those futures contracts and the underlying commodities, currencies and U.S.
treasury securities and other related instruments and derivative products. This trading by Goldman, Sachs & Co.
and its affiliates and unaffiliated third parties could adversely affect the
value of the Modified Index, which could in turn affect the return on and the
value of your notes.
Although we are not obligated to do so, we have
elected to hedge our obligation under the notes with an affiliate of Goldman,
Sachs & Co. That affiliate, in
turn, will most likely directly or indirectly hedge any of its obligations
through transactions in the futures and options markets.
Goldman, Sachs & Co. and
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its affiliates may also issue or underwrite other
financial instruments with returns indexed to the S&P DTI, S&P DTI-TR
or the Modified Index.
There may be conflicts of interest
between you and Goldman, Sachs & Co.
Certain activities conducted by Goldman, Sachs &
Co. and its affiliates may conflict with your interests as a holder of the
notes. For example, as indicated above,
we have elected to hedge our obligations under the notes with an affiliate of
Goldman, Sachs & Co. It is
possible that affiliates of Goldman, Sachs & Co. could receive
substantial returns with respect to these hedging activities while the value of
your notes may decline.
Goldman, Sachs & Co. and its affiliates may
also engage in trading for their proprietary accounts, for other accounts under
their management or to facilitate transactions, including block transactions,
on behalf of customers relating to one or more of the futures contracts
comprising the Modified Index or in the underlying commodities, currencies or
U.S. treasury securities. Any of these
activities of Goldman, Sachs & Co. or its affiliates could adversely
affect the level of the Modified Index and, therefore, the market value of your
notes and the amount we will pay on your notes at maturity.
We may also issue, and Goldman, Sachs & Co.
and its affiliates may also issue or underwrite, other securities or financial
or derivative instruments indexed to the S&P DTI-TR or the Modified Index,
which would compete with the notes. By
introducing competing products into the marketplace in this manner, we or
Goldman, Sachs & Co. and its affiliates could adversely affect the
market value of your notes and the amount we pay on your notes at
maturity. To the extent that Goldman,
Sachs & Co. or its affiliates serve as issuer, agent or underwriter of
those securities or other similar instruments, their interests with respect to
those products may be adverse to your interests as a holder of the notes.
As calculation agent, Goldman Sachs
International will have the authority to make determinations that could affect
the market value of your notes and the amount you receive at maturity.
As calculation agent for
your notes, Goldman Sachs International will have discretion in making various
determinations that affect your notes, including the final index level or early
index level, the repayment amount payable on any early redemption for tax
reasons or any acceleration, various interest rate determinations (including
the base rate and the realized Tbill amount), and in some cases when a market
disruption event is occurring, daily contract reference prices for futures
contracts. We will use these
determinations to calculate how much cash we must pay at maturity or on an
early maturity date. The exercise of
this discretion by Goldman Sachs International could adversely affect the value
of your notes and may present Goldman, Sachs & Co. and Goldman Sachs
International with a conflict of interest of the kind described above under There
may be conflicts of interest between you and Goldman, Sachs & Co.
Suspensions or disruptions of trading
in the commodity and related futures markets may adversely affect the value of
your notes.
The commodity markets are subject to temporary
distortions or other disruptions due to various factors, including the lack of
liquidity in the markets, the participation of speculators and government
regulation and intervention. In
addition, U.S. futures exchanges and some foreign exchanges have regulations
that limit the amount of fluctuation in futures contract prices which may occur
during a single business day. These
limits are generally referred to as daily price fluctuation limits and the
maximum or minimum price of a contract on any given day as a result of these
limits is referred to as a limit price.
Once the limit price has been reached in a particular contract, trading
restrictions will follow the regulations set forth by the trading facility on
which the contract is listed. Limit
prices may have the effect of precluding trading in a particular contract,
which could adversely affect the value of the Modified Index and, therefore,
the value of your notes.
If a market disruption event occurs on any contract
included in the Modified Index, the value of that contract at the determination
date will not be calculated until a settlement price can be determined. If a market disruption event lasts for five
trading days, the Calculation Agent will calculate the final index level
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and the repayment amount taking into account
information it deems relevant in good faith.
Accordingly, the calculation of your indexed payment may be delayed
beyond what would otherwise be the determination date and may be subject to the
judgment of the Calculation Agent.
Additionally, regardless of the market disruption event, the Modified
Index Sponsor will continue to calculate the value of the Modified Index and
publish such value on Bloomberg, or any successor thereto, according to the
process described above. Therefore, if a
market disruption event occurs, the repayment amount may not reflect the actual
value of the Modified Index on the determination date.
You may not receive your repayment amount on the
stated maturity date or on the fifth business day after an early valuation
date. If a market disruption event is in
effect on the applicable valuation date, you will not receive your repayment
amount until the fifth business day after the final index level or the early
index level can be determined.
It is difficult to predict what
effect higher and lower future prices of commodities included in the S&P
DTI-TR modified relative to their current prices may have on its value.
As the contracts that underlie the S&P DTI come to
expiration, they are replaced by contracts that have a later expiration. Thus, for example, a contract purchased and
held in May may specify a July expiration. As time passes, the contract expiring in July is
replaced by a contract for delivery in October.
This is accomplished by selling the July contract and purchasing
the October contract. This process
is referred to as rolling. If the
market for these contracts is (putting aside other considerations) in backwardation,
where the prices are lower in the distant delivery months than in the nearer
delivery months, the sale of the July contract would take place at a price
that is higher than the price of the October contract, thereby creating a roll
yield. Some commodities futures
contracts included in the Modified Index, such as gold, have historically
traded in contango markets. Contango
markets are those in which the prices of contracts are higher in the distant
delivery months than in the nearer delivery months. Unlike commodities indices which reflect
contracts only in long positions and where the absence of backwardation in the
market for a commodities futures contract could result in negative roll
yields, the presence of short positions in the Modified Index means one cannot
predict the effect of contango and backwardation on the value of the Modified
Index.
Changes in the composition and
valuation of the S&P DTI may adversely affect your notes.
The composition of the S&P DTI may change over
time or other modifications may be made to the S&P DTI in the future. Such changes could adversely affect the value
of the notes.
In the event that Standard & Poors
discontinues publication of the Basic Index, Goldman Sachs International, as
calculation agent, will continue to calculate the Modified Index during the
remaining term of the notes, based on the methodologies described in this
pricing supplement.
Although the S&P DTI-TR modified
includes the same futures contracts that comprise the S&P DTI, its value
and returns will likely differ from those of the S&P DTI-TR.
The S&P DTI-TR modified has different rules from
the S&P DTI governing the procedure by which expiring positions in certain
of the constituent futures contracts are rolled forward into more distant
contract expirations, as explained in The S&P DTI-TR modified. Since one component of the value of a
commodity futures contract is the period remaining until its expiration, these
differences are likely to produce different values for the S&P DTI-TR
modified and the S&P DTI-TR at any given time and, therefore, may produce
differing returns.
As calculation agent for the position determination,
Goldman Sachs International will follow the formula set forth by S&P DTI
Index methodology when determining the long and short position. In the event of a discrepancy between the
Calculation Agents determination and the official determination published by
Standard & Poors, (i) if Standard & Poors announces
its determination prior to the start of the S&P DTI Modified roll period,
the Calculation Agent will follow Standard & Poors official
determination and (ii) if Standard & Poors does not announce its
determination prior to the start of the S&P DTI Modified
P-21
Table of
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roll period, unless there is manifest error, the notes
will follow the Position Determination of the Calculation Agent and as a
result, S&P DTI-TR modified and S&P DTI returns may differ.
Secondary trading in the notes may be
limited.
The notes are a new issue of securities with no
established trading market. Your notes
will not be listed on any securities exchange or be included in any interdealer
market quotation system or any electronic communications network, and there may
be little or no secondary market for your notes. Even if a secondary market for your notes
develops, it may not provide significant liquidity and we expect that
transaction costs in any secondary market would be high. As a result, the differences between bid and
ask prices for your notes in any secondary market could be substantial.
P-22
Table of
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ADDITIONAL INFORMATION
Calculation Agent
We have initially appointed Goldman Sachs
International as Calculation Agent for the purpose of determining the Position
Determination, the Final Index Level and the Repayment Amount, as described
herein, and for all calculations and determinations regarding Market Disruption
Events or an Index End Early Event, the interest rate applicable to any overdue
payment of the Repayment Amount and the redemption or repurchase price upon any
early redemption or repurchase of the notes.
Unless there is manifest error, these determinations by the Calculation
Agent shall be final and binding on us and the holders of the notes.
Investors may obtain information at any time regarding
the calculation of the Modified Index as published on Bloomberg Page GSCI11
or, following any Market Disruption Event, as calculated for purposes of the
notes by contacting the Calculation Agent.
Upon request, the Calculation Agent will provide a written statement to
an investor showing how the closing level of the Modified Index was calculated
on any date for purposes of the notes and how the Repayment Amount per U.S.
$1,000 of the principal amount of the notes was calculated.
Upon request, the Calculation Agent will provide a
written statement to an investor showing how the Repayment Amount per U.S.
$1,000 of the principal amount of the notes was calculated. Requests to the Calculation Agent should be
addressed to:
Goldman Sachs International
Peterborough Court
133 Fleet Street
London EC4A 2BB
Telephone: +1-212-934-9333
Telecopy: +44-20-7-552-8216
Attention
: GSI Calculation Agent
License Agreement
Goldman, Sachs & Co. has entered into a
license agreement (the License Agreement) granting us a non-exclusive license
to use the S&P DTI in connection with the notes. The License Agreement provides that, in the
event that Goldman, Sachs & Co. fails to provide the level of the
Modified Index to us with the result that we are unable to determine the
Repayment Amount payable in respect of the notes, we or our authorized designee
(which shall be a major accounting firm which we appoint) shall be authorized
to calculate the level of the Modified Index.
In such event, Goldman, Sachs & Co. will provide us or the
accounting firm with any and all information that may be necessary in order to
enable us or the accounting firm to perform these calculations.
Goldman, Sachs & Co. makes no representation
or warranty, express or implied, to the owners of the notes or any member of
the public regarding the advisability of investing in securities generally or
in the notes particularly or the ability of the Modified Index or the S&P
DTI to track general commodity market performance or commodity futures market
performance. Neither Goldman, Sachs &
Co. nor S&P has any obligation to take the needs of the licensee or the
owners of the notes into consideration in determining, composing or calculating
the Modified Index. Neither Goldman,
Sachs & Co. nor S&P has any obligation or liability in connection
with the administration or trading of the notes.
NEITHER WE NOR GOLDMAN, SACHS & CO.
GUARANTEES THE QUALITY, ACCURACY OR THE COMPLETENESS OF THE MODIFIED INDEX OR
ANY DATA INCLUDED THEREIN. NEITHER WE
NOR GOLDMAN, SACHS & CO. MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS TO
RESULTS TO BE OBTAINED BY OWNERS OF THE NOTES, OR ANY OTHER PERSON OR ENTITY
FROM ANY USE OF THE MODIFIED INDEX OR ANY DATA INCLUDED THEREIN. NEITHER WE NOR GOLDMAN,
P-23
Table of
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SACHS & CO. MAKES ANY EXPRESS OR IMPLIED
WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE MODIFIED INDEX AND
ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL EITHER WE OR GOLDMAN, SACHS &
CO. HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL
DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH
DAMAGES.
THE NOTES ARE NOT SPONSORED, ENDORSED, SOLD OR
PROMOTED BY S&P. S&P MAKES NO REPRESENTATION, CONDITION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THE NOTES OR ANY MEMBER OF THE PUBLIC
REGARDING THE ADVISABILITY OF INVESTING IN SECURITIES GENERALLY OR IN THE NOTES
PARTICULARLY OR THE ABILITY OF THE S&P DTI TO TRACK GENERAL MARKET
PERFORMANCE. S&PS ONLY RELATIONSHIP TO THE ISSUER IS THE LICENSING
OF CERTAIN TRADEMARKS AND TRADE NAMES AND OF THE S&P DTI WHICH IS
DETERMINED, COMPOSED AND CALCULATED BY S&P WITHOUT REGARD TO THE
NOTES. S&P HAS NO OBLIGATION TO TAKE THE NEEDS OF THE ISSUER OR THE
OWNERS OF THE NOTES INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING
THE S&P DTI. S&P IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED
IN THE DETERMINATION OF THE PRICES AND AMOUNT OF THE NOTES OR THE TIMING OF THE
ISSUANCE OR SALE OF THE NOTES. S&P HAS NO OBLIGATION OR LIABILITY IN
CONNECTION WITH THE ADMINISTRATION, MARKETING, OR TRADING OF THE NOTES.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE
COMPLETENESS OF THE S&P DTI OR ANY DATA INCLUDED THEREIN AND S&P SHALL
HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.
S&P MAKES NO WARRANTY, CONDITION OR REPRESENTATION, EXPRESS OR IMPLIED, AS
TO RESULTS TO BE OBTAINED BY GOLDMAN, SACHS & CO., OWNERS OF THE
NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P INDICES OR ANY
DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES,
REPRESENTATIONS OR CONDITIONS, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OR
CONDITIONS OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE AND
ANY OTHER EXPRESS OR IMPLIED WARRANTY OR CONDITION WITH RESPECT TO THE S&P
DTI OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING,
IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) RESULTING FROM THE
USE OF THE S&P DTI OR ANY DATA INCLUDED THEREIN, EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.
Hypothetical Examples
In the table below, we provide a range of hypothetical
pretax returns for the Modified Index.
Based on these hypothetical index returns, we illustrate a range of
approximate Repayment Amounts, expressed as a percentage of the Principal
Amount of the notes. These figures are
provided for purposes of illustration only.
They should not be taken as an indication or prediction of future
investment results and are intended merely to illustrate the impact that
various hypothetical index returns could have on the Repayment Amount, assuming
all other variables remain constant.
The information in the table reflects hypothetical
rates of return on the notes assuming that they are purchased at a price of
100% of their principal amount on the original Issue Date and held to the
Maturity Date and that no Early Repurchase Option is exercised and no Index End
Early Event occurs. If you exercise the
Early Repurchase Option or an Index End Early Event occurs, your return will
depend on the index level determined on the day of such exercise or the Trading
Day immediately following such occurrence and on when during the term of the
notes that day occurs. If you sell your
notes prior to the Maturity Date, your return will depend upon the market value
of your notes at the time of sale, which may be affected by a number of factors
that are not reflected in the table below.
For a discussion of some of these factors, see Risk Factors above.
The table below also assumes that there is no change
in or affecting futures contracts or the method by which Standard &
Poors calculates the level of the S&P DTI or Goldman, Sachs & Co.
P-24
Table of
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calculates the level of the Modified Index and that no
Market Disruption Event occurs. Also,
the hypothetical rates of return shown below do not take into account the effects
of applicable taxes. Because of the U.S.
tax treatment applicable to your note, tax liabilities could affect the
after-tax rate of return on your notes to a comparatively greater extent than
the after-tax return on the underlying commodity.
The performance of the Index has been volatile in the
past and cannot be predicted for any future period. The actual performance of the Modified Index
over the life of the notes, as well as the amount payable at maturity, may bear
little relation to the hypothetical return examples set forth below or to the
historical levels of the Modified Index set forth elsewhere in this pricing
supplement. For information about the
level of the Modified Index during recent periods, see The S&P DTI-TR
ModifiedHypothetical Historical Performance below.
The table below assumes an Initial Index Level of
1585.808
and is
modeled using the Tbill Auction High Rate for September 18, 2009.
Final
Index
Level
|
|
Percentage Change
in S&P GSDTITR
|
|
Percentage of
Principal Amount
|
|
Annual Yield (%) on
Principal Amount
|
|
3171.616
|
|
100%
|
|
395.39%
|
|
282.52%
|
|
2854.454
|
|
80%
|
|
335.39%
|
|
225.76%
|
|
2378.712
|
|
50%
|
|
245.39%
|
|
140.14%
|
|
2061.550
|
|
30%
|
|
185.39%
|
|
82.65%
|
|
1902.970
|
|
20%
|
|
155.39%
|
|
53.75%
|
|
1744.389
|
|
10%
|
|
125.39%
|
|
24.71%
|
|
1585.808
|
|
0%
|
|
95.39%
|
|
-4.50%
|
|
1427.227
|
|
-10%
|
|
65.39%
|
|
-33.94%
|
|
1268.646
|
|
-20%
|
|
35.39%
|
|
-63.72%
|
|
1110.066
|
|
-30%
|
|
5.39%
|
|
-94.22%
|
|
792.904
|
|
-50%
|
|
0.00%
|
|
-100.00%
|
|
475.742
|
|
-70%
|
|
0.00%
|
|
-100.00%
|
|
317.162
|
|
-80%
|
|
0.00%
|
|
-100.00%
|
|
0.000
|
|
-100%
|
|
0.00%
|
|
-100.00%
|
|
Same-Day Funds Settlement and Payment
The initial settlement
for the notes and all payments of principal will be made in immediately
available funds.
Secondary trading in long-term notes and debentures of
corporate issuers is generally settled in clearing-house or next-day
funds. In contrast, the notes will trade
in the Same-Day Funds Settlement System of The Depository Trust Company (the Depository)
until maturity, and secondary market trading activity in the notes will
therefore be required by the Depository to settle in immediately available
funds. We cannot assure you as to the
effect, if any, of settlement in immediately available funds on trading
activity in the notes.
THE FUTURES MARKETS
Futures contracts on physical commodities, foreign
currencies and U.S. treasury securities are traded on regulated futures
exchanges, in the over-the-counter market and on various types of physical and
electronic trading facilities and markets.
All of the contracts included in the S&P DTI are exchange-traded
futures contracts.
An exchange-traded futures contract is a
bilateral agreement providing for the purchase and sale of a specified type and
quantity of a commodity, currency or financial instrument during a stated
delivery month for a fixed price. A
futures contract provides for a specified settlement month in which the
commodity, currency or financial instrument is to be delivered by the seller
(whose position is
P-25
Table of
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therefore described as short) and acquired by the
purchaser (whose position is therefore described as long) or in which the
cash settlement amount is to be made.
There is no purchase price paid or received on the
purchase or sale of a futures contract.
Instead, an amount of cash or cash equivalents must be deposited with
the broker as initial margin. This
amount varies based on the requirements imposed by the exchange clearing
houses, but may be as low as 5% or less of the value of the contract. This margin deposit provides collateral for
the obligations of the parties to the futures contract.
By depositing margin in the most advantageous form
(which may vary depending on the exchange, clearing house or broker involved),
a market participant may be able to earn interest on its margin funds, thereby
increasing the potential total return that may be realized from an investment
in futures contracts. The market
participant normally makes to, and receives from, the broker subsequent
payments on a daily basis as the price of the futures contract fluctuates. These payments are called variation margin
and make the existing positions in the futures contract more or less valuable,
a process known as marking to market.
Futures contracts are traded on organized exchanges,
known as contract markets in the United States, through the facilities of a
centralized clearing house and a brokerage firm which is a member of the
clearing house. The clearing house
guarantees the performance of each clearing member which is a party to a
futures contract by, in effect, taking the opposite side of the
transaction. At any time prior to the
expiration of a futures contract, subject to the availability of a liquid
secondary market, a trader may elect to close out its position by taking an
opposite position on the exchange on which the trader obtained the
position. This operates to terminate the
position and fix the traders profit or loss.
U.S. contract markets, as well as brokers and market
participants, are subject to regulation by the Commodity Futures Trading
Commission.
THE
STANDARD & POORS DIVERSIFIED TRENDS INDICATOR
The Standard & Poors Diversified Trends
Indicator, or S&P DTI, is a diversified basket of 24 global commodity and
financial futures contracts that are highly liquid. The components are grouped into sectors and
each sector (except energy) is represented on either a long or short basis,
depending on the recent price trends of that sector. The S&P DTI measures the extent and
duration, i.e., the extended volatility, of the trends in these sectors in
aggregate and is designed to capture the economic benefit over long time
periods derived from both rising and declining trends within a cross-section of
futures markets.
An indicator such as the S&P DTI is a
rules-based model or strategy using judgment in its construction to target
particular risk/return characteristics of an asset class or segment of a
market. It does not intend to passively
represent a market, but instead to passively reflect a specific characteristic
of that market.
The primary objective of the S&P DTI is to measure
in aggregate the component trends based on price movement and premium discount
expansion and contraction of certain highly liquid futures. Limiting the volatility of the index was a
guide in the determination of the methodology.
The methodology is implemented in a rules-based, systematic manner. The index is not intended to be
representative of a particular futures market or group of markets.
The S&P DTI evolved from futures market trading
strategies originally developed by Alpha Financial Technologies, LLC (AFT)
and its founder, Victor Sperandeo. AFT
has licensed the intellectual property rights in the methodology underlying the
S&P DTI to S&P, which constructs, calculates and maintains the S&P
DTI with participation from AFT. S&P
publishes daily values of the S&P DTI-TR, which are available on its
website or at Bloomberg page SPDTT, and licenses the use of the S&P
DTI by third parties. AFT assists
S&P with marketing and product development of third party products linked
to the S&P DTI and provides quantitative research and analysis on the
S&P DTI.
P-26
Table of
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There are two kinds of returns for a futures-based
index or indicator. The first sub-index
is a simple combination of the weighted price percentage changes on a daily
basis, which S&P refers to as the S&P Diversified Trends Indicator
Price Return. The second sub-index, the
S&P Diversified Trends Indicator Total Return, or S&P DTI-TR, reflects
the fact that futures contracts are bought on margin and includes a Treasury
Bill return on a hypothetical investment in the S&P DTI. The S&P DTI-TR, therefore, is intended to
reflect the total return on an actual investment in the futures contracts
comprising the S&P DTI including the interest income on the assets used to
margin the positions in those futures contracts.
Key characteristics
Key characteristics of the S&P DTI include:
·
The
S&P DTI comprises 24 component futures contracts, grouped into 14 sectors,
eight financial and six commodity sectors.
By weight, it is equally divided between financial and commodity
components.
·
Long
or short positions in a sector are determined by comparing the current sector
price to a moving exponential average under which prices in more recent periods
are weighted more heavily.
·
Sectors are rebalanced monthly and components are
rebalanced annually.
·
The intention of the S&P DTI is to provide a means
of mitigating the negative effect of commodity and financial price cyclicality.
Components of the S&P DTI
Two key factors in selecting the component futures
contracts of the S&P DTI-TR are liquidity and investability. Liquidity is an indication both of the
significance of the market for the contract and the ability to trade it with
minimal market impact. The components of
the index have been consistently among the leading futures contracts in terms
of trading volume in the U.S. The
component contracts selected can be traded in amounts that make the cost of the
maintaining the Basic Index efficient.
Contracts are limited to those traded on U.S. exchanges to minimize any
impact from major differences in trading hours, avoid currency exchange
calculations and allow for similar closing times and holiday schedules.
The overall weighting of the S&P DTI is divided
equally between commodity contracts and non-equity financial contracts with the
intention to increase the internal non-correlation among the components and
produce a smoother, less volatile return.
It is not intended to reflect their relative notional values.
Commodity weights are based on generally known world
production levels, except that the Natural Gas component uses North American
rather than world production due to constraints linked to transporting natural
gas internationally. Since there is often
no single recognized source for a commoditys production figures, estimates are
used in selecting and making allocations.
Weightings of the financial sectors are based on, but
are not directly proportional, to GDP.
Instead, the financials of the countries with a GDP of greater than $3
trillion are placed into tier 1 and countries with a GPD of less than $3
trillion are placed in tier 2. Tier 1
financials are meant to be close in weight, with slight relative tilts towards
those from the larger economies. Thus,
the U.S.-based financials have a higher importance than the euro currency. Tier 2 markets are weighted approximately
proportionately to each other, but have some adjustments for liquidity, trading
significance and potential correlation to tier 1 markets. For example, the Canadian Dollar component
receives a 1% weighting due to Canadas historical economic connection with the
U.S. However, the Swiss Franc is an
exception as it is allocated a weighting slightly disproportionate to the Swiss
GDP due to the Swiss francs liquidity and Switzerlands political
significance. By not weighting the
financials of the largest GDP countries as high as their relative GDPs would
indicate, the tier weighting approach increases diversification.
P-27
Table of
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The futures contracts
currently included in the S&P DTI are all futures contracts traded on the
New York Mercantile Exchange, Inc. (NYMEX), the Chicago Mercantile
Exchange (CME), the Chicago Board of Trade (CBOT), and the New York Board
of Trade (NYBOT). These contracts,
their component weights, their market symbols and the exchanges on which they
are traded are:
Futures Contract
|
|
Component
Weight
|
|
Market
Symbol
|
|
Exchange
|
|
Commodities (50%):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Livestock
(sector weight 5.00%):
|
|
|
|
|
|
|
|
Live Cattle
|
|
-5.21
|
%
|
LC
|
|
CME
|
|
Lean Hogs
|
|
-2.37
|
%
|
LH
|
|
CME
|
|
Softs (sector weight 4.50%):
|
|
|
|
|
|
|
|
Cocoa
|
|
1.66
|
%
|
CC
|
|
NYBOT
|
|
Coffee
|
|
-2.56
|
%
|
KC
|
|
NYBOT
|
|
Sugar
|
|
1.37
|
%
|
SB
|
|
NYBOT
|
|
Cotton
|
|
1.67
|
%
|
CT
|
|
NYBOT
|
|
Precious Metals (sector weight 5.25%):
|
|
|
|
|
|
|
|
Silver
|
|
3.34
|
%
|
SI
|
|
CMX
|
|
Gold
|
|
5.24
|
%
|
GC
|
|
CMX
|
|
Grains (sector weight 11.50%):
|
|
|
|
|
|
|
|
Corn
|
|
-4.82
|
%
|
C
|
|
CBOT
|
|
Wheat
|
|
-2.80
|
%
|
W
|
|
CBOT
|
|
Soybeans
|
|
-9.36
|
%
|
S
|
|
CBOT
|
|
Industrial
Metals (sector weight 5.00%):
|
|
|
|
|
|
|
|
Copper
|
|
7.44
|
%
|
HG
|
|
NYMEX
|
|
Energy (sector
weight 18.75%):
|
|
|
|
|
|
|
|
Heating Oil
|
|
4.85
|
%
|
HO
|
|
NYMEX
|
|
Unleaded
Gasoline
|
|
7.17
|
%
|
RB
|
|
NYMEX
|
|
Light Crude
|
|
14.05
|
%
|
CL
|
|
NYMEX
|
|
Natural Gas
|
|
3.78
|
%
|
NG
|
|
NYMEX
|
|
|
|
|
|
|
|
|
|
Financials (50)%:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Australian
Dollar
|
|
3.17
|
%
|
AD
|
|
CME
|
|
British Pound
|
|
7.58
|
%
|
BP
|
|
CME
|
|
Canadian Dollar
|
|
1.56
|
%
|
CD
|
|
CME
|
|
Euro
|
|
20.28
|
%
|
EC
|
|
CME
|
|
Japanese Yen
|
|
18.38
|
%
|
JY
|
|
CME
|
|
Swiss Franc
|
|
3.12
|
%
|
SF
|
|
CME
|
|
U.S. Treasury
Bond
|
|
11.23
|
%
|
US
|
|
CBOT
|
|
U.S. Treasury 10
Year Notes
|
|
11.23
|
%
|
TY
|
|
CBOT
|
|
Sectors of the S&P
DTI are rebalanced monthly to their fixed weights. The rebalance date is the second to the last
business day of the month with an effective date randomly selected from any of
the first five business days of the next month.
While sectors are rebalanced monthly back to their fixed weights, the
component weightings are allowed to vary within the sector.
Rebalancing sectors
monthly is designed to keep volatility low since otherwise an extended move in
one group or sector would overweight the S&P DTI and potentially lead to
significantly higher volatility of the index.
Because the sectors are rebalanced, it follows that every month the
aggregate markets are rebalanced to equal weighting of 50% commodities and 50%
financial contracts. An exception to
this is when the Energy sector is in a neutral position as described below
under Position Determination.
At the end of each year,
each of the 24 components is rebalanced.
It is expected that the component weights will not vary significantly
from those shown above. Although production
and GDP figures change over time, in a relative sense as it affects component
weights, that change is small.
P-28
Table of
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Rebalancing components
only annually allows a degree of microeconomic influence among the correlated
sector components so that market actions can determine which components are
relatively more important.
Position Determination
The rule for the
S&P DTI regarding whether to track the long or short position in a given
component can be summarized as follows:
·
Long positions
are tracked when a components current
price input is equal to or greater than an exponential average of the past
seven price inputs;
·
Short positions
are tracked when a components current
price input is less than an exponential average of the past seven price inputs;
·
A flat or neutral (zero weight)
position is applied to the Energy sector
when a short position is otherwise indicated; in this case, the 18.75% weight
for Energy is distributed proportionately among the other 13 sectors.
The Position
Determination is made by comparing the monthly percentage change of a sectors
price to past monthly price changes exponentially weighted to give greatest
weight to the most recent return and least weight to the return seven months
prior.
The price input for a
particular contract that determines whether a long or short position is tracked
is based on the cumulative percentage price change. To create an exponential average for
comparison, price inputs (percentage inputs from the current and prior six
PDDs) are weighted using a base multiplier of 1.6 to establish the weights set
forth below for each trailing months price change.
Trailing Month
|
|
Weight
|
|
7
|
|
2.32
|
%
|
|
6
|
|
3.71
|
%
|
|
5
|
|
5.94
|
%
|
|
4
|
|
9.51
|
%
|
|
3
|
|
15.22
|
%
|
|
2
|
|
24.34
|
%
|
|
1
|
|
38.95
|
%
|
|
|
|
100.00
|
%
|
|
The weighted sum of the percentage changes of all the
sector prices equals the daily movement of the S&P DTI.
After the market closes
on the trade activity date (TAD) in each month, active S&P DTI
contracts are replaced either because (a) a new long/short determination
has been made for a particular sector or component or (b) the contract
must be rolled to a later expiring contract as required by the roll schedule
referred to below, or both. Therefore,
new contracts become active as of the day following the TAD. The TAD is randomly selected and is one of
the first five business days of the month.
S&P acknowledges that limit price closes which occur on the TAD in
active index contracts can restrict, and in some cases eliminate, the liquidity
required for perfect replication of the S&P DTI.
For those sectors with
only one component (Industrial Metals and the eight financial sectors), the
price input calculations to determine position are at the component level. For the Energy, Precious Metals, Livestock
and Grains sectors, the price inputs from the respective underlying components
are aggregated to determine the position for that sector as a whole. In this case, aggregating the components
reduces minor and unnecessary fluctuations such as whipsaws. An exception exists in the calculation of the
Softs
P-29
Table of
Contents
sector. Here,
since there is no fundamental tie between each of its components (Coffee,
Cocoa, Cotton and Sugar), the position of each is determined separately. For example, Coffee could be long while Sugar
is short.
Energy, due to the
significant level of its continuous consumption, limited reserves and oil
cartel controls, is subject to rapid price increases in the event of perceived
or actual shortages. Because no other
sector is subject to the same continuous demand with supply and concentration
risk, the Energy sector is never positioned short in the S&P DTI
methodology.
Contract Expirations
The S&P DTI is an indicator of futures contract
price trends, and futures contracts have limited durations. Consequently, in order for the indicator to
be calculated on an ongoing basis, it must change (or roll) from tracking
contracts that are approaching expiration to tracking new contracts. Currently, each contract has three to four
roll periods each year and its own roll pattern based on historical
liquidity. The S&P DTI observes the
following rules in rolling the component futures contracts from an expiring
contract to the next contract:
·
The non-currency component contracts are rolled from the current
contract to the next contract beginning with the TAD for the month that is two
months before the current contract matures.
·
The currency contracts are rolled from the current contract to the next
maturing futures contract four times per year as of the TAD for the month prior
to the contracts final maturity month.
The risk of aberrational liquidity or pricing around
the maturity date of a commodity futures contract is greater than in the case
of other futures contracts because (among other factors) a number of market
participants take delivery of the underlying commodities. Spot markets in commodities occasionally have
delivery problems, related to, for example, weather conditions, disrupting
transportation of cattle to a delivery point.
Such a delay could cause the spot market to skyrocket, while later-dated
futures contracts are little changed.
The S&P DTI endeavors to avoid delivery issues by owning contracts
that are outside of nearby delivery.
Oversight Committee
In order to provide for the smooth functioning of the
S&P DTI, Standard & Poors and AFT have established the S&P
Diversified Trends Indicator Oversight Committee (Oversight Committee) with
three members from each. The mandate of
the Oversight Committee is to provide advice on analytical, business or other
considerations relating to the S&P DTI and its methodology. The committee will make any decisions that
cannot be systematized or that occur on an ad hoc basis and will implement
established methodology or determine new policy if market conditions warrant
change. For example, an exchange might
substantially change the contract terms or even discontinue trading a component
contract. In such cases, the Oversight
Committee would determine any component or weighting changes. The Oversight Committee does not, however,
use discretion to affect performance.
Always, the goal is to maintain liquidity and low volatility in the
indicator.
THE
S&P DTI-TR MODIFIED
Goldman, Sachs & Co. has modified the S&P
DTI-TR to facilitate the use of the S&P DTI-TR modified as an index
underlying trading instruments such as the notes. The primary modifications
reflected in the Modified Index are the following:
·
To facilitate hedging of instruments such as the
notes, the Modified Index provides that where component contracts from the
previous months composition must be rolled into new contracts as part of the
monthly rebalancing of the S&P DTI, the rolling will occur evenly over the
first five business days of the new month rather than on the single randomly
selected Trade Activity Date within that period as provided in the S&P DTI.
P-30
Table of
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·
For purposes of the Modified Index, the percentage dollar weighting for
each component contract in the S&P DTI will be set on the last business day
of a month (rather than on the TAD) to take effect on the first business day of
the following month. Because of this
modification and because the contract rolls will occur over a five day period,
the resulting percentage dollar weights of the individual component contracts
in the Modified Index may differ from those determined by the S&P DTI
methodology. The contract weights used
in total dollar weight computation detailed below will be computed from the
percentage dollar weighting and the contract price inputs on this same day.
·
There are differences in the calculation of the
quarterly Treasury bill return included in the total return component of the
value of the Modified Index from that reflected in that component of the
S&P DTI-TR.
·
Goldman Sachs International will act as Calculation
Agent for the Position Determination and will make such determination two
Business Days prior to the S&P DTI-TR Modified roll. As Calculation Agent for the Position
Determination, Goldman Sachs International will follow the formula set forth by
S&P DTI Index methodology when determining the long and short
position. In the event of a discrepancy
between the Calculation Agents determination and the official determination
published by Standard & Poors, (i) if Standard & Poors
announces its determination prior to the start of the S&P DTI Modified roll
period, the Calculation Agent will follow Standard & Poors official
determination and (ii) if Standard & Poors does not announce its
determination prior to the start of the S&P DTI Modified roll period,
unless there is manifest error, the notes will follow the Position
Determination of the Calculation Agent and as a result, S&P DTI-TR modified
and S&P DTI returns may differ.
Goldman, Sachs & Co. will calculate the daily
values of the S&P DTI-TR modified and publish them on Bloomberg page GSCI11
or another comparable reporting service.
Value of the S&P DTI-TR Modified
The value of the S&P DTI-TR modified on any given
day, which represents the value of a portfolio constructed according to the
S&P DTI-TR modified methodology, is equal to the total dollar weight of the
S&P DTI-TR modified divided by a normalizing constant that assures the
continuity of the S&P DTI-TR Modified over time. The total dollar weight of the S&P DTI-TR
modified is the sum of the dollar weight of each of the underlying
contracts. Because the S&P DTI-TR
can hold short positions, the methodology of the Modified Index for determining
the dollar weight includes a short fund tracker (SFT) for each contract
that has a short position. The SFT
tracks the value of the funds secured by the short sale of contracts. The dollar weight of a contract
in the S&P DTI-TR modified on any
given day is equal to:
·
the daily contract reference price,
·
multiplied by the appropriate contract weights
·
plus the short fund tracker level for the contract if it has a short
position, and
·
this quantity is multiplied during a roll period by the appropriate roll
weights (discussed below).
The daily contract reference price used in calculating
the dollar weight of each contract on any given day is the most recent daily
contract reference price made available by the relevant exchange, except that
the daily contract reference price for the most recent prior day will be used
if the exchange is closed or otherwise fails to publish a daily contract
reference price on that day. In
addition, if the exchange fails to make a daily contract reference price
available or publishes a daily contract reference price that, in the reasonable
judgment of Goldman, Sachs & Co., reflects manifest error, the
relevant calculation will be delayed until the price is made available or
corrected;
provided
,
that
, if the price is not made available
or corrected by 4:00 P.M. New York City time, Goldman, Sachs &
Co. may, if it deems such action to be
P-31
Table of
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appropriate under the circumstances, determine the appropriate
daily contract reference price for the applicable futures contract in its
reasonable judgment for purposes of the relevant S&P DTI-TR modified
calculation.
The contract weight for each contract is calculated on
the basis of trading volume and world or regional production over the most
recent five-year period for which statistics are available, reevaluated on a
monthly basis.
Contract Daily Return
The contract daily return for the S&P DTI-TR
modified on any given day is equal to the sum, for each of the contracts
included in the S&P DTI-TR modified, of the applicable daily contract
reference price on the relevant contract multiplied by the appropriate contract
weights plus the appropriate SFT and then multiplied by the appropriate roll
weight, divided by the total dollar weight of the S&P DTI-TR modified on
the preceding day, minus one.
The roll weight of a commodity reflects the fact
that the positions in futures contracts must be liquidated or rolled forward
into more distant contract expirations as they approach expiration. The methodology of the S&P DTI-TR
modified is based on the expectation that if actual positions in the relevant
markets were rolled forward, the roll would likely need to take place over a
period of days. Accordingly, the rolling
process incorporated in the S&P DTI-TR modified also takes place over a
period of five days at the beginning of each month (referred to as the roll
period). On each day of the roll
period, the roll weights of the first nearby contract expirations and the
more distant contract expiration into which it is rolled are adjusted, taking
into account the funds received for any short sale of contracts, so that the
hypothetical position in the contract that is included in the S&P DTI-TR
modified is gradually shifted from the first nearby contract expiration to the
more distant contract expiration.
If on any day during a roll period any of the
following conditions exists, the portion of the roll that would have taken
place on that day is deferred until the next day on which such conditions do
not exist:
·
no daily contract reference price is available for a
given contract expiration;
·
any such price represents the maximum or minimum price for such contract
month, based on exchange price limits (referred to as a Limit Price);
·
the daily contract reference price published by the relevant trading
facility reflects manifest error, or such price is not published by 4:00 P.M.,
New York City time. In that event,
Goldman, Sachs & Co. may, but is not required to, determine a daily
contract reference price and complete the relevant portion of the roll based on
such price;
provided
,
that
,
if the trading facility publishes a price before the opening of trading on the
next day, Goldman, Sachs & Co. will revise the portion of the roll
accordingly; or
·
trading in the relevant contract terminates prior to its scheduled
closing time.
If any of these conditions exist throughout the roll
period, the roll with respect to the affected contract will be effected in its
entirety on the next day on which such conditions no longer exist.
Calculation of the S&P DTI-TR
Modified
The value of the S&P DTI-TR modified on any
Trading Day is equal to the product of (i) the value of the S&P DTI-TR
modified on the immediately preceding Trading Day multiplied by (ii) one plus
the sum of the contract daily return and the Treasury bill return on the
hypothetical investment in the S&P DTI-TR modified on the Trading Day on
which the calculation is made multiplied by (iii) one plus the Treasury
bill return on the hypothetical investment in the S&P DTI-TR modified for
each non-Trading Day since the immediately preceding Trading Day. The result of the foregoing calculation is
then rounded to seven digits of precision.
P-32
Table of
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The value of the S&P DTI-TR modified has been
normalized such that its hypothetical level on December 31, 2003 was 1000.
Hypothetical Historical Performance
The table set forth below illustrates, on a
hypothetical basis, how the S&P DTI-TR modified would have performed since December 31,
2003 based on the selection criteria and methodologies described in this
pricing supplement.
THE HISTORICAL PERFORMANCE REFLECTED
IN THE TABLE SET FORTH BELOW IS BASED ON THE SELECTION CRITERIA IDENTIFIED
ABOVE AND ON ACTUAL PRICE MOVEMENTS IN THE RELEVANT MARKETS ON THE RELEVANT
DATE. WE CANNOT ASSURE YOU, HOWEVER,
THAT THIS PERFORMANCE WILL BE REPLICATED IN THE FUTURE OR THAT THE HISTORICAL
PERFORMANCE OF THE S&P DTI-TR MODIFIED WILL SERVE AS A RELIABLE INDICATOR
OF ITS FUTURE PERFORMANCE.
Historical
Value of the S&P DTI-TR Modified
December 31, 2003
|
|
1000.000
|
|
March 31, 2004
|
|
1072.742
|
|
June 30, 2004
|
|
1053.680
|
|
September 30, 2004
|
|
1131.739
|
|
December 31, 2004
|
|
1138.267
|
|
March 31, 2005
|
|
1137.784
|
|
June 30, 2005
|
|
1144.806
|
|
September 30, 2005
|
|
1214.645
|
|
December 30, 2005
|
|
1227.325
|
|
March 31, 2006
|
|
1246.470
|
|
June 30, 2006
|
|
1277.781
|
|
September 29, 2006
|
|
1287.128
|
|
December 29, 2006
|
|
1320.993
|
|
March 30, 2007
|
|
1312.655
|
|
June 29, 2007
|
|
1368.898
|
|
September 28, 2007
|
|
1372.102
|
|
December 31, 2007
|
|
1463.669
|
|
March 31, 2008
|
|
1558.418
|
|
June 30, 2008
|
|
1590.049
|
|
September 30, 2008
|
|
1503.724
|
|
December 31, 2008
|
|
1617.132
|
|
March 31, 2009
|
|
1558.235
|
|
June 30, 2009
|
|
1546.434
|
|
Source: Goldman, Sachs &
Co.
CERTAIN
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain United States
federal income tax considerations that may be relevant to a beneficial owner of
a note who purchases the note at original issuance at the issue price, who
holds the note as a capital asset, and who is a U.S. domestic corporation or
other entity that generally is subject to U.S. federal income tax on a net
income basis and uses an accrual method of tax accounting (a U.S. holder). This summary is based upon the United States
Internal Revenue Code of 1986, as amended (the Code), administrative
pronouncements, judicial decisions, and existing and proposed Treasury
Regulations, changes to any of which subsequent to the date of this pricing
supplement may affect the tax consequences described in this pricing
supplement, possibly with retroactive effect.
This
P-33
Table of
Contents
summary does not address tax considerations applicable
to holders that may be subject to special tax rules, such as mutual funds,
dealers or traders in securities, financial institutions, tax-exempt entities,
holders that hold the notes as a part of a hedging, straddle, conversion or
other integrated transaction, or U.S. Holders (as defined below) whose
functional currency is not the United States dollar.
The discussion set out below is
intended only as a summary of certain United States federal income tax
consequences of an investment in the notes.
Prospective investors are urged to consult their tax advisors as to the
tax consequences of an investment in the notes, including the application to
their particular situations of the tax considerations discussed below, as well
as the application of state, local or foreign tax laws.
No statutory, administrative or judicial authority
directly addresses the treatment of the notes for U.S. federal income tax
purposes. The characterization of the
notes for such purposes therefore is uncertain.
Prospective investors should consult their tax advisors regarding the characterization
of the notes. In addition, prospective
investors are encouraged to consult their own tax advisors about the potential
impact of several proposed changes in the rules addressing the taxation of
derivatives and of commodities positions, and the likelihood any of the
foregoing may take effect. In general,
however, U.S. holders should expect to accrue ordinary income in respect of the
notes on a current basis during their holding period. Prospective investors should consult their
advisors regarding the amount and character of any gain or loss on the sale,
retirement or other taxable disposition of the notes.
PLAN
OF DISTRIBUTION
Subject to the terms and conditions set forth in an
Agency Agreement dated December 15, 2008, and a Terms Agreement dated September 18,
2009 (the Agreements), we have agreed to sell to Goldman, Sachs &
Co. and Goldman, Sachs & Co. has agreed to purchase, all of the notes
offered hereby at 99.75% of the aggregate Principal Amount of the notes. Under the terms and conditions of the
Agreements, Goldman, Sachs & Co. is committed to take and pay for all
of the notes, if any are taken.
Goldman, Sachs & Co. proposes to offer the
Notes from time to time for sale in one or more transactions in the
over-the-counter market, through negotiated transactions or otherwise at market
prices prevailing at the time of sale, at prices related to prevailing market
prices or at negotiated prices, subject to receipt and acceptance by it and
subject to its right to reject any order in whole or in part.
In connection with the offering, Goldman, Sachs &
Co. may purchase and sell the notes in the open market. These transactions may include over-allotment
and stabilizing transactions and purchases to cover positions created by short
sales. Stabilizing transactions consist
of certain bids or purchases made for the purpose of preventing or retarding a
decline in the market price of the notes.
Short sales involve the sale by Goldman, Sachs & Co. of a
greater aggregate principal amount of notes than they are required to purchase
in the offering.
These activities may stabilize, maintain, or otherwise
affect the market price of the notes, which may be higher than the price that
might otherwise prevail in the open market.
If these activities are commenced, they may be discontinued at any
time. These transactions may be effected
in the over-the-counter market or otherwise.
The notes are a new issue of securities with no
established trading market. We have been
advised by Goldman, Sachs & Co. that it intends to make a market in
the notes but is not obligated to do so and may discontinue market making at
any time without notice. The notes will
not be listed on any securities exchange, and there may not be a secondary
market for the notes. We cannot give any
assurance to the liquidity of the trading market for the notes.
We have agreed to indemnify Goldman, Sachs &
Co. against, or to make contributions relating to, certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
From time to time, Goldman, Sachs & Co. and
its affiliates have, and in the future may, engage in transactions with and
perform services for us for which they have been, and may be, paid customary
fees. In particular, an affiliate of
Goldman, Sachs & Co. is the writer of a hedge of our obligation under
the notes.
P-34
Table of
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Goldman, Sachs & Co. has agreed to pay the
out of pocket expenses (other than our internal costs and expenses) of the issue
of the notes.
The initial sale of the notes in this offering entails
a longer settlement period than is customary for similar debt securities. Goldman, Sachs & Co. expects to
deliver the notes against payment on September 25, 2009.
P-35
Table of
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ANNEX A
OFFICIAL
NOTICE OF EARLY REPURCHASE EXERCISE
|
|
Dated:
|
[On or after the original issue date of the Notes
and prior to 9:00 a.m., New York time, on the earlier of the Trading Day
immediately preceding the Trigger Date
and the Determination Date]
|
|
|
|
AB Svensk Exportkredit
|
|
Goldman Sachs International, as
|
Våstra Tradgårdsgaton 11B
|
|
Calculation Agent
|
10327 Stockholm, Sweden
|
|
Peterborough Court
|
Fax No.: +46-8-411-4813
|
|
133 Fleet Street
|
|
|
London EC4A 2BB
|
The Bank of New York Mellon Trust Company, N.A.
(successor in interest to J.P. Morgan Trust Company, National Association)
|
|
Fax No.: +44-20-7552-8216
(Attn: GSI Calculation Agent)
|
2 North LaSalle Street, Suite 1020
|
|
|
Chicago, Illinois 60602
|
|
|
Fax No.: (312) 267-5202
|
|
|
Ladies and Gentlemen:
The undersigned, holder of all the outstanding
Modified S&P DTI-TR Linked Notes due October 4, 2010 of AB Svensk
Exportkredit (SEK) (CUSIP No. 00254EJF0) (the Notes) hereby
irrevocably elects to exercise, with respect to the principal amount of the
Notes indicated below, as of the date hereof (or, if this letter is received
after the earlier of 9:00 a.m. (New York time) on any Trading Day or on
any day that is not a Trading Day, as of the next Trading Day), provided that
such day is after the original issue date of the Notes and is not later than
the earlier of (i) 9:00 a.m. (New York time) on the Determination
Date and (ii) 9:00 a.m. (New York time) on the Trading Day
immediately preceding a Trigger Date, the Early Repurchase Option as described
in Pricing Supplement No. 72 dated September 18, 2009 (the Pricing
Supplement) to the Prospectus and Prospectus Supplement, each dated December 15,
2008, of SEK. Terms not defined herein
have the meanings given to such terms in the Pricing Supplement.
Please date and acknowledge receipt of this notice in
the place provided below on the date of receipt, and fax a copy to the fax
number indicated, whereupon SEK will deliver cash on the Early Maturity Date,
in accordance with the terms of the Notes, as described in the Pricing
Supplement.
The undersigned certifies to you that (i) it is,
or is duly authorized to act for, the beneficial owner of the principal amount
of the Notes indicated below its signature (and attaches evidence of such
ownership as provided by the undersigneds position services department or the
position services department of the entity through which the undersigned holds
its Notes), (ii) that such principal amount comprises all the Notes
outstanding and (iii) it will cause such principal amount of Notes to be
transferred to the Trustee on or before the Early Maturity Date.
|
Very truly yours,
|
|
|
|
[Name of Holder]
|
|
|
|
By:
|
|
|
|
[Title]
|
|
|
|
|
[Fax No.]
|
|
|
|
|
$
|
|
Principal Amount of Notes surrendered for repurchase
|
Receipt of the above Official
P-36
Table of
Contents
Notice of Early Repurchase Exercise is hereby
acknowledged
|
|
AB SVENSK EXPORTKREDIT, as Issuer
|
|
GOLDMAN SACHS INTERNATIONAL, as Calculation Agent
|
|
By GOLDMAN SACHS INTERNATIONAL, as Calculation Agent
|
|
By:
|
|
|
|
Title:
|
|
Date and time of acknowledgment
|
|
P-37
PROSPECTUS
SUPPLEMENT
(To Prospectus dated December 15,
2008)
AKTIEBOLAGET
SVENSK EXPORTKREDIT (PUBL)
(Swedish
Export Credit Corporation)
(incorporated in Sweden with limited
liability)
Medium-Term Notes, Series E
Due Nine Months or More from Date of
Issue
We may offer an unlimited principal amount of notes. The following terms may apply to the notes,
which we may sell from time to time. We
may vary these terms and will provide the final terms for each offering of
notes in a pricing supplement. If the
information in a pricing supplement differs from the information contained in
this prospectus supplement or the prospectus, you should rely on the
information contained in the pricing supplement.
·
The notes may bear interest at fixed or
floating interest rates. Floating
interest rate formulae may be based on:
·
LIBOR;
·
Commercial Paper Rate;
·
the Treasury Rate;
·
the CD Rate;
·
the Federal Funds Rate; or
·
any other rate specified in the relevant
pricing supplement
·
We may sell the notes as indexed notes or
discount notes.
·
The notes may be subject to redemption at our
option or repurchase at our option.
·
The notes will be in registered form and may
be in book-entry or certificated form.
·
The notes will be denominated in U.S. dollars or
other currencies.
·
U.S. dollar-denominated notes will be issued
in denominations of U.S.$1,000 and integral multiples of U.S.$1,000.
·
The notes will not be listed on any securities
exchange, unless otherwise indicated in the applicable pricing supplement.
·
We will make interest payments on the notes
without deducting withholding or similar taxes imposed by Sweden.
See Risks
Associated With Foreign Currency Notes and Indexed Notes beginning on page S-4
to read about certain risks associated with foreign currency notes and indexed
notes which you should consider before investing in such notes.
Neither the Securities and Exchange Commission nor any other
regulatory body has approved or disapproved of these securities or determined
if this prospectus supplement or the related prospectus is truthful or
complete. Any representation to the
contrary is a criminal offense.
Banc
of America Securities LLC
|
|
Barclays Capital
|
|
Citi
|
Deutsche Bank Securities
|
|
Goldman,
Sachs & Co.
|
|
InCapital
|
J.P.
Morgan
|
|
Merrill
Lynch & Co.
|
|
Morgan
Stanley
|
|
|
Wachovia
Securities
|
|
|
This prospectus supplement is dated December 15, 2008.
ABOUT THIS PROSPECTUS SUPPLEMENT
This
prospectus supplement supplements the accompanying prospectus dated December 15,
2008 relating to our debt securities. If
the information in this prospectus supplement differs from the information
contained in the accompanying prospectus, you should rely on the information in
this prospectus supplement.
You
should read this prospectus supplement along with the accompanying prospectus
(and any relevant pricing supplement).
Each document contains information you should consider when making your
investment decision. You should rely
only on the information provided or incorporated by reference in this
prospectus supplement and the accompanying prospectus (or such pricing supplement). We have not authorized anyone else to provide
you with different information. We and
the agents are offering to sell the notes and seeking offers to buy the notes
only in jurisdictions where it is lawful to do so. The information contained in this prospectus
supplement and the accompanying prospectus is current only as of the date
hereof.
This
document is only being distributed to and is only directed at (i) persons
who are outside the United Kingdom or (ii) investment professionals
falling within Article 19(5) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005 (the Order) or (iii) high net
worth entities, and other persons to whom it may lawfully be communicated,
falling within Article 49(2)(a) to (d) of the Order (all such
persons together being referred to as relevant persons). Any notes will only be available to, and any
invitation, offer or agreement to subscribe, purchase or otherwise acquire such
notes will be engaged in only with, relevant persons. Any person who is not a relevant person
should not act or rely on this document or any of its contents.
This
document has been prepared on the basis that, except to the extent
sub-paragraph (ii) below may apply, any offer of notes in any member state
of the European Economic Area which has implemented the Prospectus Directive
(2003/71/EC) (each, a Relevant Member State) will be made pursuant to an
exemption under the Prospectus Directive, as implemented in that Relevant
Member State, from the requirement to publish a prospectus for offers of notes. Accordingly any person making or intending to
make an offer in that Relevant Member State of notes which are the subject of
an offering contemplated in this prospectus supplement as completed by final
terms in relation to the offer of those notes may only do so (i) in
circumstances in which no obligation arises for SEK or any agent to publish a
prospectus pursuant to Article 3 of the Prospectus Directive or supplement
a prospectus pursuant to Article 16 of the Prospectus Directive, in each
case, in relation to such offer, or (ii) if a prospectus for such offer
has been approved by the competent authority in that Relevant Member State or,
where appropriate, approved in another Relevant Member State and notified to
the competent authority in that Relevant Member State and (in either case)
published, all in accordance with the Prospectus Directive, provided that any
such prospectus has subsequently been completed by final terms which specify
that offers may be made other than pursuant to Article 3(2) of the
Prospectus Directive in that Relevant Member State and such offer is made in
the period beginning and ending on the dates specified for such purpose in such
prospectus or final terms, as applicable.
Except to the extent sub-paragraph (ii) above may apply, neither SEK
nor any agent have authorized, nor do they authorize, the making of any offer
of notes in circumstances in which an obligation arises for SEK or any agent to
publish or supplement a prospectus for such offer.
THE
NOTES OFFERED HEREBY MAY BE OFFERED FROM TIME TO TIME IN THE EUROPEAN
UNION PURSUANT TO A BASE PROSPECTUS DIFFERENT FROM, BUT NOT INCONSISTENT WITH,
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS TO WHICH IT REFERS.
S-1
SUMMARY
DESCRIPTION OF THE NOTES
This summary highlights information contained elsewhere in
this prospectus supplement and in the prospectus. It does not contain all the information that
you should consider before investing in the notes. You should carefully read the pricing supplement
relating to the terms and conditions of a particular issue of notes along with
this entire prospectus supplement and the prospectus.
Swedish
Export Credit Corporation
We,
Swedish Export Credit Corporation (or SEK), are a public stock corporation
wholly owned by the Kingdom of Sweden through the Ministry of Foreign Affairs.
Our
principal executive office is located at Västra Trädgårdsgatan 11B, 10327
Stockholm, Sweden; and our telephone number is +46-8-613-8300.
The Notes
Issuer:
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Swedish
Export Credit Corporation
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Agents:
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Banc
of America Securities LLC
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Barclays
Capital Inc.
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Citigroup
Global Markets Inc.
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Deutsche Bank Securities Inc.
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Goldman,
Sachs & Co.
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InCapital
LLC
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J.P.
Morgan Securities Inc.
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Merrill
Lynch, Pierce, Fenner & Smith
Incorporated
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Morgan
Stanley & Co. Incorporated
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Wachovia
Capital Markets, LLC
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Trustee:
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The
Bank of New York Mellon Trust Company, N.A.
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Paying Agent:
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The
Bank of New York Mellon Trust Company, N.A., unless otherwise specified in
the applicable pricing supplement.
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Amount:
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We
may offer an unlimited amount of notes.
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Issue Price:
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We
may issue the notes at par, or at a premium over, or discount to, par and
either on a fully paid or partly paid basis.
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Maturities:
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The
notes will mature at least nine months from their date of issue.
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Fixed Rate Notes:
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Fixed
rate notes will bear interest at a fixed rate.
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Floating Rate Notes:
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Floating
rate notes will bear interest at a rate determined periodically by reference
to one or more interest rate bases plus a spread or multiplied by a spread
multiplier.
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Indexed Notes:
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Payments
of principal and/or interest on indexed notes will be calculated by reference
to a specific measure or index.
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Discount Notes:
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Discount
notes are notes that are offered or sold at a price less than their principal
amount and called discount notes in the applicable pricing supplement. They
may or may not bear interest.
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Redemption and Repayment:
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If
the notes are redeemable at our option (other than on the occurrence of the
tax events described under Description of Debt SecuritiesOptional
Redemption Due to Changes in Swedish Tax Treatment in the accompanying
prospectus) or repayable at the option of the holder
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S-2
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before
maturity, the pricing supplement will specify:
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·
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the
initial redemption date on or after which we may redeem the notes or the
repayment date or dates on which the holders may elect repayment of the
notes;
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the
redemption or repayment price or how this will be calculated; and
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the
required prior notice to the holders or to us.
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Status:
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The
notes will constitute our direct, unconditional and unsecured indebtedness
and will rank equally in right of payment with all our unsecured and
unsubordinated indebtedness. The notes will not be obligations of the Kingdom
of Sweden.
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Taxes:
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Subject to certain
exceptions, we will make all payments on the notes without withholding or
deducting any taxes imposed by Sweden. For further information, see
Description of the NotesAdditional Amounts.
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Further Issues:
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We may from time to time,
without the consent of existing holders, create and issue notes having the
same terms and conditions as any other outstanding notes offered pursuant to
a pricing supplement in all respects, except for the issue date and, if
applicable, the issue price and the first payment of interest thereon.
Additional notes issued in this manner will be consolidated with, and will
form a single series with, any such other outstanding notes.
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Listing:
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We
have not applied to list the notes on any securities exchange. However, we
may apply to list any particular issue of notes on a securities exchange, as
provided in the applicable pricing supplement. We are under no obligation to
list any issued notes and may in fact not list any.
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Stabilization:
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In
connection with issues of notes, a stabilizing manager or any person acting
for the stabilizing manager may over-allot or effect transactions with a view
to supporting the market price of the notes at a level higher than that which
might otherwise prevail for a limited period after the issue date. However,
there may be no obligation of the stabilizing manager or any agent of the
stabilizing manager to do this. Any such stabilizing, if commenced, may be
discontinued at any time, and must be brought to an end after a limited
period. Such stabilizing shall be conducted in compliance with all applicable
laws, regulations and rules.
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Governing Law:
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The
notes will be governed by, and construed in accordance with, New York law,
except that matters relating to the authorization and execution of the notes
by us will be governed by the law of Sweden. Furthermore, if the notes are at
any time secured by property or assets in Sweden, matters relating to the
enforcement of such security will be governed by the law of Sweden.
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Purchase Currency:
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You
must pay for notes by wire transfer in the specified currency. You may ask an
agent to arrange for, at its discretion, the conversion of U.S. dollars or
another currency into the specified currency to enable you to pay for the
notes. You must make this request on or before the fifth business day preceding
the issue date, or by a later date if the agent allows. The agent will set
the terms for each conversion and you will be responsible for all currency
exchange costs.
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Certain Risk Factors:
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For
information about risks associated with foreign currency notes and indexed
notes, see Risks Associated with Foreign Currency Notes and Indexed Notes
beginning on page S-4.
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S-3
RISKS
ASSOCIATED WITH FOREIGN CURRENCY NOTES AND INDEXED NOTES
An
investment in a foreign currency note or an indexed note entails significant
risks that are not associated with an investment in a non-indexed note
denominated in U.S. dollars. This
section describes certain risks associated with investing in such notes. An applicable pricing supplement may describe
additional risks. You should consult
your financial and legal advisors about the risks of investing in the notes and
the suitability of your investment in light of your particular situation. We disclaim any responsibility for advising
you on these matters.
Fluctuations in currency exchange rates and the imposition
of exchange controls could cause the U.S. dollar equivalent of any interest
payments and/or principal payable at maturity of a foreign currency note or a
currency-indexed note to be lower than the U.S. dollar equivalent amount you
paid to purchase the note.
In
general, the currency markets are extremely volatile. Significant changes in the rate of exchange
between the U.S. dollar and the specified currency for a foreign currency note
(or, in the case of a currency-indexed note, the rate of exchange between the
specified currency and the indexed currency or currencies or between two or
more indexed currencies for such note) during the term of any foreign currency
note (or currency-indexed note) may significantly reduce the U.S. dollar
equivalent value of any interest payable in respect of such note and,
consequently, the U.S. dollar equivalent rate of return on the U.S. dollar
equivalent amount paid to purchase such note.
Moreover, if at maturity the specified currency for such note has
depreciated against the U.S. dollar (or, in the case of a currency-indexed
note, if significant changes have occurred in the rate of exchange between the
specified currency and the indexed currency or currencies or between two or
more indexed currencies for such note), the U.S. dollar equivalent value of the
principal amount payable in respect of such note may be significantly less than
the U.S. dollar equivalent amount paid to purchase such note.
In
certain circumstances such changes could result in a net loss to you on a U.S.
dollar basis. If any currency-indexed
note is indexed to an indexed currency on a greater than one to one basis, the
note will be leveraged and the percentage of the potential loss (or gain) to
the investor as a result of the changes in exchange rates between currencies
discussed above may be greater than the actual percentage of the change in the
rate of exchange between the U.S. dollar and the currency or currencies in
which the note is denominated or to which it is indexed.
Currency
exchange rates are determined by, among other factors:
·
changing
supply and demand for a particular currency;
·
trade,
fiscal, monetary, foreign investment and exchange control programs and policies
of governments;
·
U.S.
and foreign political and economic events and policies;
·
restrictions
on U.S. and foreign exchanges or markets;
·
changes
in balances of payments and trade;
·
U.S.
and foreign rates of inflation;
·
U.S.
and foreign interest rates; and
·
currency
devaluations and revaluations.
In addition, governments and central banks from time to time intervene,
directly and by regulation, in the currency markets to influence prices and
may, from time to time, impose or modify foreign exchange controls for a
specified currency or indexed currency.
Changes in exchange controls could affect exchange rates for a
particular currency as well as the availability of a specified currency for
making payments in respect of notes denominated in that currency.
We have no control over the factors that affect rates of exchange
between currencies. In recent years,
rates of exchange have been highly volatile and such volatility may be expected
to continue in the future. Fluctuations
in any particular exchange rate that have occurred in the past, however, are
not necessarily indicative of fluctuations in the rate that may occur during
the term of any note.
The information set forth above is directed to prospective purchasers of
foreign currency notes and currency-indexed notes that are residents of the
United States. If you are a resident of
a country other than the United States, you should consult your own financial
and legal advisors with respect to any matters that may affect your purchase or
holding of, or receipt of payments of any principal, premium or interest in
respect of, foreign currency notes or currency-indexed notes.
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT
DESCRIBE ALL THE RISKS OF AN INVESTMENT IN FOREIGN CURRENCY NOTES OR CURRENCY
INDEXED NOTES. AS A RESULT, YOU SHOULD,
IN EVERY CASE, CONSULT YOUR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS,
IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES, POSED BY AN INVESTMENT IN SUCH
NOTES. SUCH NOTES ARE NOT AN APPROPRIATE
INVESTMENT FOR PERSONS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY
TRANSACTIONS.
The pricing supplement relating to any foreign currency notes or
currency-indexed notes will contain information concerning historical exchange
rates for the relevant specified or indexed currency or currencies against the
U.S. dollar and a brief description of such currency or currencies and any
exchange controls then in effect with respect to such currency or currencies.
S-4
If we are
unable to make payments in the specified currency of a foreign currency note,
you may experience losses due to exchange rate fluctuations.
Exchange controls may restrict or prohibit us from making payments of
any principal, premium or interest in respect of any note in any currency or
composite currency. Even if there are no
actual exchange controls, it is possible that, on a payment date with respect
to any particular note, the currency in which amounts then due in respect of
such note are payable would not be available to us. In that event, we would make such payments in
the manner set forth under Description of the NotesPayment of Principal and
Interest.
If we are required to make payment in respect of a note in a specified
currency other than U.S. dollars and such currency is unavailable due to the
imposition of exchange controls or other circumstances beyond our control or is
no longer used by the government of the country issuing such currency or for
the settlement of transactions by public institutions of or within the
international banking community, then we will make all payments in respect of
such note in U.S. dollars until such currency is again available or so used. Any amounts payable in such currency on any
date will be converted by the exchange rate agent (which may be us, the trustee
or a bank or financial institution we select) into U.S. dollars on the basis of
the most recently available market exchange rate for such currency or as otherwise
indicated in the applicable pricing supplement.
Any payment made under such circumstances in U.S. dollars will not
constitute an event of default under the indenture.
You may not be able to secure a foreign-currency
judgment in the United States.
The notes generally will be governed by, and construed in accordance
with, the law of New York. See Description
of Debt SecuritiesGoverning Law in the accompanying prospectus. Courts in the United States customarily have
not rendered judgments for money damages denominated in any currency other than
the U.S. dollar. The Judiciary Law of
New York provides, however, that an action based upon an obligation denominated
in a currency other than U.S. dollars will be rendered in the foreign currency
of the underlying obligation and converted into U.S. dollars at the rate of
exchange prevailing on the date of the entry of the judgment or decree.
An
investment in indexed notes entails significant risks not associated with a
similar investment in fixed or floating rate debt securities.
An investment in notes that are indexed, as to principal, premium, if
any, and/or interest, to one or more underlying assets or measures, including
currencies or composite currencies, exchange rates, swap indices between
currencies or composite currencies, commodities, commodity indices or baskets,
securities or securities baskets or indices, interest rates or other indices or
measures, either directly or inversely, entails significant risks that are not
associated with investments in a conventional fixed rate or floating rate debt
security.
These risks include the possibility that the value of the underlying,
asset, measure, index or indices may be subject to significant changes, that
the resulting interest rate will be less than that payable on a conventional
fixed or floating rate debt security issued by us at the same time, that the
repayment of principal and/or premium, if any, can occur at times other than
those expected by the investor, and that you, as the investor, could lose all
or a substantial portion of principal and/or premium, if any, payable on the
maturity date. These risks depend on a
number of inter-related factors, including economic, financial and political
events, over which we have no control.
Additionally, if the formula used to determine the amount of principal,
premium, if any, and/or interest payable with respect to such notes contains a
multiplier or leverage factor, the effect of any change in the applicable index
or indices will be magnified. In recent
years, values of many underlying measures and indices have been highly
volatile, and such volatility may continue or intensify.
Any optional redemption feature of any notes might affect their market
value. Since we may be expected to
redeem notes when prevailing interest rates are relatively low, an investor
generally will not be able to reinvest the redemption proceeds in a comparable
security at an effective interest rate that is as high as the then-current
interest rate on the notes.
The secondary market, if any, for indexed notes will be affected by a
number of factors independent of our creditworthiness and the value of the
applicable underlying asset, measure, index or indices, including the
complexity and volatility thereof, the method of calculating the principal,
premium, if any, and/or interest in respect of indexed notes, the time
remaining to the maturity of such notes, the outstanding amount of such notes,
any redemption features of such notes, the amount of other debt securities
linked to such underlying asset, measure, index or indices and the level,
direction and volatility of market interest rates generally. Such factors also will affect the market
value of indexed notes.
In addition, certain notes may be designed for specific investment
objectives or strategies and, therefore, may have a more limited secondary
market and experience more price volatility than conventional debt
securities. Investors may not be able to
sell such notes readily or at prices that will enable them to realize their
anticipated yield. You should not
purchase such notes unless you understand and are able to bear the risks that
such notes may not be readily saleable, that the value of such notes will
fluctuate over time and that such fluctuations may be significant.
Finally, our credit ratings may not reflect the potential impact of the
various risks that could affect the market value of the notes. Accordingly, prospective investors should
consult their own financial and legal advisors as to the risks an investment in
the notes may entail and the suitability of the notes in light of their
particular circumstances.
The pricing supplement relating to any note indexed to a currency,
currencies, a commodity, a commodity index, a stock, a stock index or any
similar such measure or index will contain information concerning the
historical prices or values of such underlying measure or index.
S-5
CURRENCY
EXCHANGE INFORMATION
If you purchase any notes, you must pay for them by wire transfer in the
currency we specify. If you are a
prospective purchaser of foreign currency notes (that is, notes for which the
currency we specify is other than U.S. dollars), you may ask the agent to arrange
for, at its discretion, the conversion of U.S. dollars or another currency into
the specified currency to enable you to pay for such foreign currency
notes. You must make this request on or
before the fifth business day preceding the issue date for such notes, or by a
later date if the agent allows. The
agent will perform each conversion on such terms and subject to such
conditions, limitations and charges as such agent may from time to time
establish in accordance with its regular foreign exchange practices. You will be responsible for any resulting
currency exchange costs.
S-6
DESCRIPTION
OF THE NOTES
The
following description supplements the information contained in Description of
Debt Securities in the prospectus. If
the information in this prospectus supplement differs from the prospectus, you
should rely on the information in this prospectus supplement. Because the information provided in a pricing
supplement may differ from that contained in this prospectus supplement, you
should rely on the pricing supplement for the final description of a particular
issue of notes. The following
description will apply to a particular issue of notes only to the extent that
it is not inconsistent with the description provided in the applicable pricing
supplement.
We will
issue the notes under an indenture, dated as of August 15, 1991, as
supplemented by a first supplemental indenture dated as of June 2, 2004, a
second supplemental indenture dated as of January 30, 2006 and a third
supplemental indenture dated as of October 23, 2008 (together with the
first supplemental indenture and the second supplemental indenture, the supplemental
indentures), each between us and The Bank of New York Mellon Trust Company,
N.A. (directly or as the successor in interest to another party), which serves
as the trustee thereunder. Except where
otherwise indicated or clear from the context, all references to the indenture
are to the indenture as supplemented by the supplemental indentures and as
further supplemented. The information
contained in this section and in the prospectus summarizes some of the terms of
the notes and the indenture. This
summary does not contain all of the information that may be important to you as
a potential investor in the notes. You
should read the indenture, each of the supplemental indentures and the forms of
the notes before making any investment decision. We have filed or will file copies of these
documents with the Securities and Exchange Commission (the SEC) and we have
filed or will file copies of these documents at the offices of the trustee and
the other paying agents, if any.
General Terms of the Notes
The following are summaries of the material provisions of the indenture
and the notes.
·
The
notes will constitute a single series of debt securities with an unlimited
aggregate principal amount we will issue pursuant to the indenture. We have more fully described the indenture in
the accompanying prospectus.
·
We
are offering the notes on a continuous basis through the agents identified on
the cover page of this prospectus supplement.
·
The
notes will mature at least nine months from their issue dates.
·
The
notes may be subject to redemption prior to their maturity dates, as described
under Redemption and Repurchase.
·
The notes will constitute our direct,
unconditional and unsecured indebtedness and will rank equally in right of
payment with all our unsecured and unsubordinated indebtedness. The notes will not be obligations of the
Kingdom of Sweden.
·
We
will issue the notes in fully registered form only, without coupons.
·
Unless
otherwise specified, we will issue the notes in authorized denominations of
U.S.$ 1,000 and integral multiples thereof (in the case of notes denominated in
U.S. dollars). We will set forth the
authorized denominations of foreign currency notes in the applicable pricing
supplements;
·
We
expect to issue the notes initially in book-entry form, represented by a single
global master note. Thereafter, the notes
may be issued either in book entry form (represented by such master global note
or one or more other global notes) or in certificated form. Except as we describe in the accompanying
prospectus under the heading Description of Debt SecuritiesGlobal
Securities, we will not issue book-entry notes in exchange for certificated
notes. See Form of the
NotesBook-Entry Notes below. You may
present certificated notes for registration of transfer or exchange at the
office of the trustee (currently located at 101 Barclay Street (Attn: Trust
Services Window), New York New York 10286), or at such other office or agency
of the trustee as we may designate for such purpose in the Borough of
Manhattan, The City of New York.
The pricing supplement relating to a
note will describe the following terms:
·
the
principal or face amount of such note;
·
the
currency we have specified for the note (and, if such specified currency is
other than U.S. dollars, certain other terms relating to the note and the
specified currency, including the authorized denominations of the note);
·
the
price (expressed as a percentage of the aggregate principal or face amount
thereof) at which we will issue the note;
·
the
date on which we will issue the note;
·
the
maturity date for the note;
·
if
the note is a fixed rate note, the rate per annum at which the note will bear
interest;
·
if
the note is a floating rate note, the initial interest rate, the formula or
formulae by which interest on the note will be calculated thereafter, the dates
on which we will pay interest and any other terms relating to the particular
method and times for calculating the interest rate for such note;
·
if
the note is an indexed note, a description of the applicable index and the
manner of determining the indexed principal amount and/or the indexed interest
amount thereof (all as defined in the accompanying prospectus), together with
other material information relevant to holders of such note;
S-7
·
if
the note is a discount note, the total amount of original issue discount, the
amount of original issue discount allocable to the initial accrual period and
the yield to maturity of such note;
·
whether
such note may be redeemed prior to its maturity date (other than as a result of
a change in Swedish taxation as described under Redemption and Repurchase)
and, if so, the provisions relating to redemption, including, in the case of a
discount note or an indexed note, the information necessary to determine the
amount due upon redemption;
·
whether
the note will be issued initially as a book-entry note or a certificated note;
and
·
any
other material terms of the note.
Business Days
In
this prospectus supplement, the term business day with respect to any note
means any day, other than a Saturday or Sunday, that is a day on which:
(1)
commercial banks are generally open for
business in The City of New York; and
(2)
(a) if such note is a foreign currency
note and the specified currency in which such note is denominated is the euro,
the Trans-European Automated Real-Time Gross Settlement Express Transfer
(TARGET) System or any successor system is open for business; and (b) if
such note is a foreign currency note and the specified currency in which the
note is denominated is other than the euro, commercial banks are generally open
for business in the financial center of the country issuing such currency; and
(3)
if the note is an indexed note, commercial
banks are generally open for business in such other place or places as may be
set forth in the applicable pricing supplement; and
(4)
if the interest rate formula for the note is
LIBOR, a London banking day. The term London
banking day with respect to any note means any day on which dealings in
deposits in the specified currency for such note are transacted in the London
interbank market.
Discount Notes
Any
of the notes we issue may be discount notes.
A discount note is:
(1)
a note, including any note having an interest
rate of zero, that has a stated redemption price at maturity that exceeds its
issue price by at least 0.25% of its principal or face amount, multiplied by
the number of full years from the issue date to the maturity date for such
note; and
(2)
any other note that we designate as issued
with original issue discount for United States federal income tax purposes.
Form of the Notes
The Depository Trust Company, or DTC, is under no obligation
to perform or continue to perform the procedures described below, and it may
modify or discontinue them at any time.
Neither we nor the trustee will be responsible for DTCs performance of
its obligations under its rules and procedures. Additionally, neither we nor the trustee will
be responsible for the performance by direct or indirect participants of their
obligations under their rules and procedures.
We
expect to issue the notes initially in the form of a single master global note
in fully registered form, without coupons.
A master global note will initially be registered in the name of a
nominee (Cede & Co.) of DTC, as depositary. Notes need not be represented by such master
global note, and may instead be represented by separate global notes. Except as set forth in the accompanying
prospectus under Book-Entry Procedures and Settlement, the notes will not be
issuable as certificated notes. For more
information, see Book-Entry Notes below.
Registered Notes
. Registered notes are payable to
the order of and registered in the name of a particular person or entity. In the case of book-entry registered notes,
the global security is registered in the name of a nominee of the applicable
clearing system, and this nominee is considered the sole legal owner or holder
of the notes for purposes of the indenture.
Beneficial interests in a registered note and transfers of those
interests are recorded by the security registrar.
Book-Entry Notes
. All Book-Entry notes with the
same issue date and terms will be represented by one or more global securities
(which may be the master global note) deposited with, or on behalf of, DTC, and
registered in the name of DTC or its nominee (Cede & Co.) (unless the
applicable prospectus supplement provides otherwise). Unless otherwise provided, DTC will act as a
depositary for, and hold the global securities on behalf of, certain financial
institutions, called participants.
These participants, or other financial institutions acting through them
called indirect participants, will represent your beneficial interests in the
global securities (unless the applicable prospectus supplement provides
otherwise). They will record the
ownership and transfer of your beneficial interests through computerized
book-entry accounts, eliminating the need for physical movement of the
notes. Book-entry notes will not be
exchangeable for certificated notes and, except under the circumstances
described below, will not otherwise be issued as certificated notes.
S-8
Unless
otherwise provided in the applicable pricing supplement, if you wish to
purchase book-entry securities, you must either be a direct participant or make
your purchase through a direct or indirect participant. Investors who purchase book-entry securities
will hold them in an account at the bank or financial institution acting as
their direct or indirect participant.
Holding securities in this way is called holding in street name.
When
you hold securities in street name, you must rely on the procedures of the
institutions through which you hold your securities to exercise any of the
rights granted to holders. This is
because our legal obligations and those of the trustee run only to the
registered owner of the global security, which will be the clearing system or
its nominee. For example, once we and
the trustee make a payment to the registered holder of a global security,
neither we nor the trustee will be liable for the payment to you, even if you
do not receive it. In practice, the
clearing system will pass along any payments or notices it receives from us to
its participants, which will pass along the payments to you. In addition, if you desire to take any action
which the holder of a global security is entitled to take, then the clearing
system would authorize the participant through which you hold your book-entry
securities to take such action, and the participant would then either authorize
you to take the action or would act for you on your instructions. The transactions between you, the
participants and the clearing system will be governed by customer agreements,
customary practices and applicable laws and regulations, and not by any of our
or the trustees legal obligations.
As
an owner of book-entry securities represented by a global security, you will
also be subject to the following restrictions:
·
You
will not be entitled to (1) receive physical delivery of the securities in
certificated form or (2) have any of the securities registered in your
name, except under the circumstances described below under Certificated Notes;
·
You
may not be able to transfer or sell your securities to some insurance companies
and other institutions that are required by law to own their securities in
certificated form; and
·
You
may not be able to pledge your securities in circumstances where certificates
must be physically delivered to the creditor or the beneficiary of the pledge
in order for the pledge to be effective.
Outside the United States, if you are a participant in either of
Clearstream Banking,
société anonyme
(referred to as Clearstream Luxembourg) or Euroclear, S.A./N.V. or its
successor, as operator of the Euroclear System (referred to as Euroclear) you
may elect to hold interests in global securities through such systems. Alternatively, you may elect to hold interests
indirectly through organizations that are participants of such systems. Clearstream Luxembourg and Euroclear will
hold interests on behalf of their participants through customers security
accounts in the names of their respective depositaries, which in turn may hold
such interests in customers securities accounts in the names of their
respective depositaries, which we refer to as the U.S. depositaries, on the
books of the DTC. Notes may also be
initially deposited with and settle through Clearstream, Euroclear or any other
depositary specified in the relevant pricing supplement.
As long as the notes are represented by global securities, we will pay
principal of and interest on such notes to or as directed by DTC as the
registered holder of the global securities (or such other depositary as may be
applicable). Payments to DTC (or such
other depositary) will be in immediately available funds by wire transfer. DTC, Clearstream Luxembourg or Euroclear, as
applicable, will credit the relevant accounts of their participants on the
applicable date.
DTC, Clearstream Luxembourg and Euroclear, respectively, advise as
follows:
As to DTC:
DTC advises us that it is a limited-purpose trust company organized
under the New York Banking Law, a banking organization within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a clearing
corporation within the meaning of the New York Uniform Commercial Code, and a clearing
agency registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC
holds issues of U.S. and non-U.S. equity, corporate and municipal debt
securities deposited with it by its participants and facilitates the settlement
of transactions among its participants in such securities through electronic
computerized book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. DTCs participants include securities brokers
and dealers, banks, trust companies, clearing corporations and certain other
organizations, some of which (and/or their representatives) own DTC. Access to DTCs book-entry system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly. According to
DTC, the foregoing information with respect to DTC has been provided to the
financial community for informational purposes only and is not intended to
serve as a representation, warranty or contract modification of any kind.
As to Clearstream Luxembourg
: Clearstream Luxembourg has advised us that
it is incorporated as a limited liability company under Luxembourg law. Clearstream Luxembourg is owned by Deutsche
Börse AG.
Clearstream Luxembourg holds securities for its participating
organizations and facilitates the clearance and settlement of securities
transactions between its participants through electronic book-entry changes in
accounts of participants, thereby eliminating the need for physical movement of
certificates. Clearstream Luxembourg
provides to its participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing.
Clearstream Luxembourg interfaces with domestic markets in several
countries. Clearstream Luxembourg
participants are recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations and may include the
underwriters. Indirect access to
Clearstream Luxembourg is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Clearstream Luxembourg participant either directly or
indirectly. Distributions with respect
to notes held beneficially through Clearstream Luxembourg will be credited to
cash accounts of Clearstream Luxembourg participants in accordance with its rules and
procedures, to the extent received by or on behalf of Clearstream Luxembourg.
S-9
Clearstream Luxembourg effects transactions through its affiliate,
Clearstream Banking SA, which is registered as a bank in Luxembourg, and as
such is subject to regulation by the Commission de Surveillance du Secteur
Financier, which supervises Luxembourg banks. Since 12 February 2001,
Clearstream Banking SA has also been supervised by the Central Bank of
Luxembourg according to the Settlement Finality Directive Implementation of January 12,
2001, following the official notification to the regulators of Clearstream
Banking SAs role as a payment system provider operating a securities
settlement system.
As to Euroclear
:
Euroclear holds securities and book-entry interests in securities for
participating organizations and facilitates the clearance and settlement of
securities transactions between Euroclear participants, and between Euroclear
participants and participants of certain other securities intermediaries
through electronic book-entry changes in accounts of such participants or other
securities intermediaries.
Euroclear provides Euroclear participants, among other things, with
safekeeping, administration, clearance and settlement, securities lending and
borrowing, and related services. Euroclear participants are investment banks,
securities brokers and dealers, banks, central banks, supra-nationals,
custodians, investment managers, corporations, trust companies and certain
other organizations. Certain of the
underwriters, or other financial entities involved in this offering, may be
Euroclear participants.
Non-participants in the Euroclear System may hold and transfer
book-entry interests in notes or index warrants through accounts with a
participant in the Euroclear System or any other securities intermediary that
holds a book-entry interest in the securities through one or more securities
intermediaries standing between such other securities intermediary and
Euroclear.
Under Belgian law, investors that are credited with securities on the
records of Euroclear have a co-property right in the fungible pool of interests
in securities on deposit with Euroclear in an amount equal to the amount of
interests in securities credited to their accounts. In the event of the
insolvency of Euroclear, Euroclear participants would have a right under
Belgian law to the return of the amount and type of interests in securities
credited to their accounts with Euroclear. If Euroclear did not have a
sufficient amount of interests in securities on deposit of a particular type to
cover the claims of all participants credited with such interests in securities
on Euroclears records, all participants having an amount of interests in
securities of such type credited to their accounts with Euroclear would have
the right under Belgian law to the return of their pro-rata share of the amount
of interests in securities actually on deposit.
Under Belgian law, Euroclear is required to pass on the benefits of
ownership in any interests in securities on deposit with it (such as dividends,
voting rights and other entitlements) to any person credited with such
interests in securities on its records.
Distributions with respect to
notes held beneficially through Euroclear will be credited to the cash accounts
of Euroclear participants in accordance with the Euroclear Terms and
Conditions, to the extent received by or on behalf of Euroclear.
Certificated Notes.
We will
issue debt securities in fully registered certificated form in exchange for
book-entry securities represented by a global security only under the
circumstances described in the prospectus under Description of Debt
SecuritiesGlobal Securities. If we do
so, you will be entitled to have registered in your name, and have physically
delivered to you, debt securities in certificated form equal to the amount of
book-entry securities you beneficially own.
If we issue certificated debt securities, they will have the same terms
and authorized denominations as the global security.
Global Clearance and Settlement Procedures
You will be required to make your initial payment for the notes in
immediately available funds. Secondary
market trading between DTC participants will occur in the ordinary way in accordance
with DTC rules and will be settled in immediately available funds using
DTCs Same-Day Funds Settlement System.
Secondary market trading between Clearstream Luxembourg customers and/or
Euroclear participants will occur in the ordinary way in accordance with
applicable rules and operating procedures applicable to conventional
eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or indirectly
through DTC on the one hand, and directly or indirectly through Clearstream
Luxembourg or Euroclear participants, on the other, will be effected within DTC
in accordance with DTCs rules on behalf of the relevant European
international clearing system by its U.S. depositary; however, such
cross-market transactions will require delivery of instructions to the relevant
European international clearing system by the counterparty in such system in
accordance with its rules and procedures and within its established
deadlines (European time). The relevant
European international clearing system will, if the transaction meets its
settlement requirements, deliver instructions to its U.S. depositary to take
action to effect final settlement on its behalf by delivering or receiving
notes in DTC, and making or receiving payment in accordance with normal
procedures. Clearstream Luxembourg
participants and Euroclear participants may not deliver instructions directly
to their respective U.S. depositaries.
Due to time zone differences in their favor, Euroclear Participants and
Clearstream customers may employ their customary procedure for transactions in
which securities are to be transferred by the respective clearing system,
through the applicable U.S. Depository to another Participants . In these cases, Euroclear will instruct its U.S.
Depository to credit the securities to the Participants account against
payment. The payment will then be
reflected in the account of the Euroclear Participant or Clearstream customer
the following business day, and receipt of the cash proceeds in the Euroclear
Participants or Clearstream customers accounts will be back-valued to the
value date (which would be the preceding day, when settlement occurs in New
York). If the Euroclear Participant or
Clearstream customer has a line of credit with its respective clearing system
and elects to draw on such line of credit in anticipation of receipt of the
sale proceeds in its account, the back-valuation may substantially reduce or
offset any overdraft charges incurred over that one-day period. If settlement
is not completed on the intended value date (i.e., the trade fails), receipt of
the cash proceeds in the Euroclear Participants or Clearstream customers
accounts would instead be valued as of the actual settlement date.
S-10
Although DTC, Clearstream Luxembourg and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of securities among
participants of DTC, Clearstream Luxembourg and Euroclear, they are under no
obligation to perform or continue to perform such procedures and they may
discontinue the procedures at any time.
All information in this document on DTC, Clearstream Luxembourg and
Euroclear is derived from DTC, Clearstream Luxembourg or Euroclear, as the case
maybe, and reflects the policies of these organizations; these policies are
subject to change without notice.
Paying Agents, Transfer Agents, Exchange Rate Agents
and Calculation Agents
Until the notes are paid, we will maintain a paying agent and transfer
agent in The City of New York. We have
initially appointed the trustee to serve as our paying agent and transfer
agent.
We will appoint an exchange rate agent to determine the exchange rate
for converting payments on notes denominated in a currency other than U.S.
dollars into U.S. dollars, where applicable.
In addition, as long as any floating rate notes or indexed notes are
outstanding, we will maintain a calculation agent for calculating the interest
rate and interest payments, or indexed principal amount and/or indexed interest
amount on the notes.
Payment of Principal and Interest
General
We will pay interest on registered notes (a) to the persons in
whose names the notes are registered at the close of business on the record
date or (b) if we are paying interest at maturity, redemption or
repurchase, we will make such payment to the person to whom principal is
payable. The regular record date for
registered notes is the date 15 calendar days before the applicable interest
payment date, whether or not a business day.
If we issue notes between a record date and an interest payment date, we
will pay the interest that accrues during this period on the next following
interest payment date to the persons in whose names the notes are registered on
the record date for that following interest payment date.
Book-Entry Note
s
We will, through our paying agent, make payments of principal, premium,
if any, and interest on book-entry notes by wire transfer to the clearing
system or the clearing systems nominee as the registered owner of the notes,
which will receive the funds for distribution to the holders. We expect that the holders will be paid in
accordance with the procedures of the clearing system and its participants. Neither we nor the paying agent will have any
responsibility or liability for any of the records of, or payments made by, the
clearing system or the clearing systems nominee or common depositary.
Registered
Certificated Notes
If we issue registered certificated notes, we will make payments of
principal, premium, if any, and interest to you, as a holder, by wire transfer
if:
·
you
own at least U.S.$ 10,000,000 aggregate principal amount or its equivalent of
notes; and
·
not
less than 15 calendar days before the payment date, you notify the paying agent
of your election to receive payment by wire transfer and provide it with your
bank account information and wire transfer instructions.
If we do not pay interest by wire transfer for any reason, we will,
subject to applicable laws and regulations, mail a check to you on or before
the due date for the payment at your address as it appears on the security
register on the applicable record date.
Payment Currency
We will pay any principal, premium or interest in respect of a note in
the currency we have specified for such note.
In the case of a foreign currency note, the exchange rate agent will
arrange to convert all payments in respect of such note into U.S. dollars in
the manner described in the next paragraph.
However, if U.S. dollars are not available for making payments due to
the imposition of exchange controls or other circumstances beyond our control,
then the holder of such note will receive payments in such specified currency
until U.S. dollars are again available for making such payments. Notwithstanding the foregoing, the holder of
a foreign currency note may (if we so indicate in the applicable pricing
supplement and note) elect to receive all payments in respect of such note in
the specified currency for such note by delivery of a written notice to the
trustee not later than 15 calendar days prior to the applicable payment
date. The holders election generally
will remain in effect until revoked by written notice to the trustee received
not later than 15 calendar days prior to the applicable payment date. The holders election may not be effective
under certain circumstances as described above under Risks Associated with
Foreign Currency Notes and Indexed NotesIf we are unable to make payments in
the specified currency of a foreign currency note, you may experience losses
due to exchange rate fluctuations.
In the case of a foreign currency note, the exchange rate agent will
determine the amount of any U.S. dollar payment in respect of such note based
on the following exchange rate: the highest firm bid quotation expressed in
U.S. dollars, for the foreign or composite currency in which such note is
denominated, received by the exchange rate agent at approximately 11:00 a.m.,
New York City time, on the second business
S-11
day preceding the applicable
payment date (or, if no such rate is quoted on such date, the last date on
which such rate was quoted), from three (or, if three are not available, then
two) recognized foreign exchange dealers in The City of New York, for the
purchase by the quoting dealer, for settlement on such payment date, of the
aggregate amount of the specified currency for such note payable on such
payment date in respect of all notes denominated in such specified
currency. If no such bid quotations are available,
we will make such payments in such specified currency, unless such specified
currency is unavailable due to the imposition of exchange controls or to other
circumstances beyond our control, in which case we will make such payments as
described above under Risks Associated with Foreign Currency Notes and Indexed
NotesIf we are unable to make payments in the specified currency of a foreign
currency note, you may experience losses due to exchange rate fluctuations.
All currency exchange costs will be borne by the holders of foreign currency
notes by deductions from such payments.
Any of the foreign exchange dealers submitting quotes to the exchange
rate agent may be agents soliciting orders for the notes or affiliates of such
agents. All determinations that the
exchange rate agent makes, after being confirmed by us, will be binding unless
they are clearly wrong.
If the principal of any discount note is declared to be due and payable
immediately due to the occurrence of an event of default, the amount of
principal due and payable with respect to such note shall be the issue price of
such note plus the amount of original issue discount amortized from the issue
date of such note to the date of declaration.
Such amortization shall be calculated using the interest method
(computed in accordance with U.S. generally accepted accounting principles in
effect on the date of declaration).
Interest Rates
General
The interest rate on the notes will not be higher than the maximum rate
permitted by New York law, currently 25% per year on a simple interest
basis. This limit will not apply to
notes in which U.S.$ 2,500,000 or more has been invested. Interest payments on the notes will generally
include interest accrued from and including the issue date or the last interest
payment date to but excluding the following interest payment date or the date
of maturity, redemption or repurchase.
Each of these periods is called an interest period.
The relevant pricing supplement will specify the day count fraction
applicable to the calculation of payments due on the notes:
·
if
1/1 is specified, the relevant payment will be calculated on the basis of 1;
·
if
actual/365, act/365, A/365, actual/actual or act/act is specified,
the relevant payment will be calculated on the basis of the actual number of
days in the period in respect of which payment is being made divided by 365
(or, if any portion of that calculation period falls in a leap year, the sum of
(i) the actual number of days in that portion of the period falling in a
leap year divided by 366 and (ii) the actual number of days in that
portion of the calculation period falling in a non-leap year divided by 365);
·
if
actual/365 (fixed), act/365 (fixed), A/365 (fixed) or A/365F is
specified, the relevant payment will be calculated on the basis of the actual
number of days in the calculation period in respect of which payment is being
made divided by 365;
·
if
actual/360, act/360 or A/360 is specified, the relevant payment will be
calculated on the basis of the actual number of days in the calculation period
in respect of which payment is being made divided by 360;
·
if
30/360, 360/360 or bond basis is specified, the relevant payment will be
calculated on the basis of the number of days in the calculation period in
respect of which payment is being made divided by 360 (the number of days to be
calculated on the basis of a year of 360 days with 12 30-day months (unless (i) the
last day of the calculation period is the 31 st day of a month but the first
day of the calculation period is a day other than the 30th or 31st day of a
month, in which case the month that includes that last day shall not be considered
to be shortened to a 30-day month or (ii) the last day of the calculation
period is the last day of the month of February, in which case the month of February shall
not be considered to be lengthened to a 30-day month)); and
·
if
30E/360 or eurobond basis is specified, the relevant payment will be
calculated on the basis of the number of days in the calculation period in
respect of which payment is being made divided by 360 (the number or days to be
calculated on the basis of a year of 360 days with 12 30-day months, without
regard to the date of the first day or last day of the calculation period
unless, in the case of the final calculation period, the maturity date is the
last day of the month of February, in which case the month of February shall
not be considered to be lengthened to a 30-day month).
Unless otherwise specified in the relevant pricing supplement, interest
on fixed rate notes will be calculated on a 30/360 basis.
The relevant pricing supplement will also specify the relevant business
day convention applicable to the calculation of payments due on the notes. The term business day convention means the
convention for adjusting any relevant date if it would otherwise fall on a day
that is not a business day. The
following terms, when used in conjunction with the term business day
convention and a date, shall mean that an adjustment will be made if that date
would otherwise fall on a day that is not a business day so that:
·
if
following is specified, that date will be the first following day that is a
business day;
·
if
modified following or modified is specified, that date will be 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; and
·
if
preceding is specified, that date will be the first preceding day that is a
business day.
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Fixed Rate Notes
Unless otherwise specified in the applicable pricing supplement, each
fixed rate note will bear interest from its issue date at the rate per annum
(which may be zero) stated on the face of the note until the principal amount
of the note is paid or made available for payment. Unless otherwise specified in the applicable
pricing supplement, we will pay interest on each fixed rate note semiannually
in arrears on each March 15 and September 15 and at maturity. Each payment of interest on a fixed rate note
in respect of an interest payment date shall include interest accrued through
the day before such interest payment date.
If we are required to make a payment required in respect of a fixed rate
note on a date that is not a business day for such note, we need not make the
payment on such date, but may make it on the first succeeding business day with
the same force and effect as if we had made it on such date, and no additional
interest shall accrue as a result of such delayed payment.
Floating Rate
Notes
Each floating rate note will bear interest during each interest reset
period (as defined below) based on the interest rate formula for such
note. The pricing supplement for a
floating rate note may specify an interest rate for the first interest period. This formula is generally composed of the following:
·
a
base interest rate with a specified maturity called the index maturity,
e.g
., three months, six months, etc.;
·
plus
or minus a spread measured in basis points with one basis point equal to 1/100
of a percentage point; or
·
multiplied
by a spread multiplier measured as a percentage.
The applicable pricing supplement will specify the base rate, the index
maturity and the spread or spread multiplier.
The pricing supplement may also specify a maximum (ceiling) or minimum
(floor) interest rate limitation. The
calculation agent will use the interest rate formula, taking into account any
maximum or minimum interest rate, to determine the interest rate in effect for
each interest period. All determinations
made by the calculation agent will be binding unless they are clearly wrong.
We may issue floating rate notes with the following base rates:
·
LIBOR;
·
the
Commercial Paper Rate;
·
the
Treasury Rate;
·
the
CD Rate;
·
the
Federal Funds Rate; or
·
any
other rate specified in the relevant pricing supplement.
The applicable pricing supplement will also specify the following with
respect to each floating rate note:
·
the
dates as of which the calculation agent will determine the interest rate for
each interest period (referred to as the interest determination date);
·
the
frequency with which the interest rate will be reset,
i.e.
, daily, weekly, monthly, quarterly, semiannually or
annually;
·
the
dates on which the interest rate will be reset (referred to as the interest
reset dates),
i.e.
, the first day
of each new interest period, using the interest rate that the calculation agent
determined on the interest determination date for that interest period;
·
the
interest payment dates; and
·
if already determined, the initial interest
rate in effect from and including the issue date to but excluding the first
interest reset date.
Unless otherwise specified in the applicable pricing supplement, the
date or dates on which interest will be reset will be as follows:
·
in
the case of notes that reset daily, each business day;
·
in
the case of notes, other than those whose base rate is the Treasury Rate, that
reset weekly, the Wednesday of each week;
·
in
the case of notes whose base rate is the Treasury Rate that reset weekly, the
Tuesday of each week (except as provided below);
·
in
the case of notes that reset monthly, the third Wednesday of each month;
·
in
the case of notes that reset quarterly, the third Wednesday of March, June, September and
December;
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·
in
the case of notes that reset semi-annually, the third Wednesday of the two
months of each year specified in the applicable pricing supplement; and in the
case of notes that reset annually, the third Wednesday of the month of each
year specified in the applicable pricing supplement;
with
the following two exceptions:
·
the
interest rate in effect from the date of issue to the first interest reset date
will be the initial interest rate; and
·
the
interest rate in effect for the 10 days immediately prior to the maturity date
will be that in effect on the tenth day preceding the maturity date.
Determination of
Reset Interest Rates
The interest rate applicable to each period commencing on the respective
interest reset date (the interest reset period) will be the rate determined
as of the applicable interest determination date defined below on or prior to
the relevant calculation date.
Unless otherwise specified in the applicable pricing supplement, the interest
determination date with respect to an interest reset date will be:
·
for
notes for which the base rate is LIBOR, the second London banking day before
the interest reset date unless the designated LIBOR currency is pounds
sterling, in which case the interest determination date, the applicable
interest reset date;
·
for
notes for which the base rate is the CD Rate, the Commercial Paper Rate or the
Federal Funds Rate, the second business day before the interest reset date; and
·
for
notes for which the base rate is the Treasury Rate, the day of the week in
which that interest reset date falls on which treasury bills (as defined below
under Treasury Rate) are normally auctioned.
Treasury bills are normally sold at auction on the Monday of each week,
unless that day is a legal holiday, in which case the auction is normally held
on the following Tuesday, but is sometimes held on the preceding Friday. If as a result of a legal holiday a treasury
bill auction is held on the Friday of the week preceding an interest reset
date, the related interest determination date will be the preceding Friday; and
if an auction falls on any interest reset date, then the interest reset date
instead will be the first business day following the auction.
The interest determination date pertaining to a floating rate note the
interest rate of which is determined with reference to two or more base rates
will be the first business day which is at least two business days prior to the
interest reset date for that floating rate note on which each base rate is determined. Each base rate will be determined on that
date and the applicable interest rate will take effect on the related interest
reset date.
The interest rate in effect with respect to a floating rate note on each
day that is not an interest reset date will be the interest rate determined as
of the interest determination date for the immediately preceding interest reset
date. The interest rate in effect on any
day that is an interest reset date will be the interest rate determined as of
the interest determination date for that interest reset date, subject in each
case to any applicable law and maximum or minimum interest rate
limitations. However, the interest rate
in effect with respect to a floating rate note for the period from its original
issue date to the first interest reset date, to which we refer as the initial
interest rate, will be determined as specified in the applicable pricing
supplement.
Interest Payment
Dates
Unless otherwise specified in the applicable pricing supplement, the
date or dates on which interest will be payable are as follows:
·
in
the case of notes that reset daily, weekly or monthly, the third Wednesday of
each month or the third Wednesday of March, June, September and December of
each year, as specified in the applicable pricing supplement;
·
in
the case of notes that reset quarterly, the third Wednesday of March, June,
September, and December of each year;
·
in
the case of notes that reset semi-annually, the third Wednesday of the two
months of each year specified in the applicable pricing supplement; and
·
in
the case of notes that reset annually, the third Wednesday of the month
specified in the applicable pricing supplement.
If any interest payment date, other than one that falls on the maturity
date or on a date for earlier redemption or repurchase, or any interest reset
date for a floating rate note would fall on a day that is not a business day,
the interest payment date or interest reset date will instead be the next
business day, unless the notes are LIBOR notes and that business day falls in
the next month, in which case the interest payment date or the interest reset
date will be the preceding business day.
If any payment on a floating rate note is due on the maturity date or
upon earlier redemption or repurchase and that date is not a business day, the
payment will be made on the next business day.
In addition, if any payment on a floating rate note is due on a date
that is not a business day in the relevant place of payment, we will make the
payment on the next business day in that place of payment and no additional
interest will accrue as a result of this delay.
We will treat these payments as if they were made on the due date.
S-14
Accrued Interest
Except as specified in the applicable pricing supplement, the
calculation agent will calculate the accrued interest payable on floating rate
notes for any interest period by multiplying the principal amount of the note
by an accrued interest factor, which will equal the interest rate for the
interest period times the relevant day count.
If the interest rate varies during the period, the accrued interest
factor will equal the sum of the interest factors for each day in the interest
period. The calculation agent will
compute the interest factors for each day by dividing the interest rate
applicable to that day by 360, 365 or 366, depending on the day count fraction.
The calculation agent will round all percentages resulting from any
interest rate calculation to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward. For example, the calculation agent will round
9.876545%, or .09876545, to 9.87655% or .0987655. The calculation agent will also round all
specified currency amounts used in or resulting from any interest rate
calculation to the nearest one-hundredth of a unit, with .005 of a unit being
rounded upward.
Calculation Agent
The calculation agent will be specified in the applicable pricing supplement
for each issuance of floating rate notes.
If you are the holder of a floating rate note, you may ask the
calculation agent to provide you with the current interest rate and, if it has
been determined, the interest rate that will be in effect on the next interest
reset date. The calculation agent will
also notify us, each paying agent and the registered holders, if any, of the
following information for each interest period (except for the initial interest
period if this information is specified in the applicable pricing supplement):
·
the
interest rate in effect for the interest period;
·
the
number of days in the interest period;
·
the
next interest payment date; and
·
the
amount of interest that we will pay for a specified principal amount of notes
on that interest payment date.
The calculation agent will generally provide this information by the
first business day of each interest period, unless the terms of a particular
series of notes provide that the calculation agent will calculate the
applicable interest rate on a calculation date after that date, in which case
the calculation agent will provide this information by the first business day
following the applicable calculation date.
Base Rates
LIBOR.
Unless otherwise specified in the applicable
pricing supplement, LIBOR means the rate determined by the calculation agent
in accordance with the following provisions:
(a)
For an interest determination date relating to any floating rate note
for which LIBOR is an applicable base rate, to which we refer as a LIBOR
interest determination date, LIBOR will be the arithmetic mean of the offered
rates, unless the Designated LIBOR page, as defined below, by its terms
provides only for a single rate, in which case that single rate shall be used,
for deposits in the designated LIBOR currency having the index maturity
specified in the applicable pricing supplement, commencing on the applicable
interest reset date, that appear, or, if only a single rate is required as
aforesaid, appears, on the designated LIBOR page as of 11:00 a.m.,
London time, on that LIBOR interest determination date.
If fewer than two offered rates appear, or no single rate appears, as
applicable, LIBOR in respect of that LIBOR interest determination date will be
determined as if the parties had specified the rate described in clause (b) below.
(b)
For a LIBOR interest determination date on which fewer than two offered
rates appear, or no rate appears, as the case may be, on the designated LIBOR page as
specified in clause (a) above, the calculation agent will request the
principal London offices of each of four major reference banks, which may
include one or more of the agents or their affiliates, in the London interbank
market, as selected by the calculation agent, after consultation with us, to
provide its offered quotation for deposits in the designated LIBOR currency for
the period of the index maturity specified in the applicable pricing
supplement, commencing on the applicable interest reset date, to prime banks in
the London interbank market at approximately 11:00 a.m., London time, on
that LIBOR interest determination date and in a principal amount that is
representative for a single transaction in the designated LIBOR currency in
that market at that time.
·
If
the reference banks provide at least two such quotations, then LIBOR for that
LIBOR interest determination date will be the arithmetic mean of such
quotations. If fewer than two quotations
are provided, then LIBOR for that LIBOR interest determination date will be the
arithmetic mean of the rates quoted at approximately 11:00 a.m., in the
applicable principal financial center, as defined below, on that LIBOR interest
determination date by three major banks, which may include one or more of the
agents or their affiliates, in that principal financial center selected by the
calculation agent, after consultation with us, for loans in the designated
LIBOR currency to leading European banks, having the index maturity specified
in the applicable pricing supplement and in a principal amount that is
representative for a single transaction in that designated LIBOR currency in
that market at that time.
S-15
·
If
the banks selected by the calculation agent are not quoting as set forth above,
LIBOR with respect to that LIBOR interest determination date will be LIBOR for
the immediately preceding interest reset period, or if there was no interest
reset period, the rate of interest payable will be the initial interest rate.
Designated LIBOR currency means the currency specified in the
applicable pricing supplement as to which LIBOR will be calculated. If no such currency is specified in the
applicable pricing supplement, the designated LIBOR currency shall be U.S. dollars.
Designated LIBOR page means the display on the Reuters Money Market
Rates Service, or any successor service, on the page specified in the
applicable pricing supplement, or any successor page on that service, for
the purpose of displaying the London interbank rates of major banks for the
designated LIBOR currency.
Principal financial center means the capital city of the country to
which the designated LIBOR currency relates (or the capital city of the country
issuing the specified currency, as applicable), except that with respect to
U.S. dollars, Australian dollars, Canadian dollars, South African rand and
Swiss francs, the principal financial center means The City of New York,
Sydney, Toronto, Johannesburg and Zurich, respectively, and with respect to
euros the principal financial center means the Trans-European Automated
Real-Time Gross Settlement Express Transfer (TARGET) System or any successor
system.
Commercial Paper Rate.
Unless
otherwise specified in the applicable pricing supplement, commercial paper
rate means, for any interest determination date relating to any floating rate
note for which the commercial paper rate is an applicable base rate, to which
we refer as a commercial paper rate interest determination date, the money
market yield on that date of the rate for commercial paper having the index
maturity specified in the applicable pricing supplement as published in
H.15(519) under the caption Commercial Paper Nonfinancial. If the commercial paper rate cannot be
determined as described above, the following procedures will apply:
·
If
the rate described above is not published by 3:00 p.m., New York City
time, on the relevant calculation date, then the commercial paper rate will be
the money market yield of the rate on that commercial paper rate interest
determination date for commercial paper of the specified index maturity as
published in H.15 Daily Update, or in another recognized electronic source used
for the purpose of displaying the applicable rate, under the caption Commercial
Paper Nonfinancial.
·
If
by 3:00 p.m., New York City time, on the calculation date, the rate
described is not yet published in H.15(519), H.15 Daily Update or another
recognized electronic source, the commercial paper rate for the applicable
commercial paper rate interest determination date will be calculated by the
calculation agent and will be the money market yield of the arithmetic mean of
the offered rates (quoted on a bank discount basis), as of 11:00 a.m., New
York City time, on that commercial paper rate interest determination date of
three leading dealers of U.S. dollar commercial paper in The City of New York,
which may include one or more of the agents or their affiliates, selected by
the calculation agent, after consultation with us, for commercial paper of the
index maturity specified in the applicable pricing supplement placed for a
non-financial issuer whose bond rating is Aa, or the equivalent, from a
nationally recognized statistical rating agency.
·
If
the dealers selected as described above by the calculation agent are not
quoting as set forth above, the commercial paper rate with respect to that
commercial paper rate interest determination date will be the commercial paper
rate in effect for the immediately preceding interest reset period, or if there
was no interest reset period, the rate of interest payable will be the initial
interest rate.
Money market yield means the yield, expressed as a percentage,
calculated in accordance with the following formula:
Money
market yield =
|
360 x D
|
|
x
100
|
|
360 (D x M)
|
|
|
where
D is the annual rate for commercial paper quoted on a bank discount basis and
expressed as a decimal, and M is the actual number of days in the applicable
interest period.
H.15(519) means the weekly statistical release designated Statistical
Release H.15(519), Selected Interest Rates, or any successor publication,
published by the Board of Governors of the Federal Reserve System.
H.15 Daily Update means the daily update of H.15(519), available
through the world-wide-web site of the Board of Governors of the Federal
Reserve System at http://www.federalreserve.gov/releases/h15/update, or any
successor site or publication. All
references to this website are inserted as inactive textual references to the uniform
resource locator, or URL, and are for your informational reference
only. Information on that website is not
incorporated by reference in this prospectus supplement or the accompanying
prospectus.
Treasury Rate Notes.
Unless
otherwise specified in the applicable pricing supplement, treasury rate
means, with respect to any interest determination date relating to any floating
rate note for which the treasury rate is an applicable base rate, to which we
refer as a treasury rate interest determination date, the rate from the
auction held on such treasury rate interest determination date of direct
obligations of the United States, or treasury bills, having the index
maturity specified in the applicable pricing supplement under the caption INVEST
RATE on the display on Reuters Money Markets Rates Service or any successor
service, on page USAUCTION 10, or any other page as may replace
that page on that service, or page USAUCTION 11, or any other page as
may replace that page on that service.
If the treasury rate cannot be determined in this manner, the following
procedures will apply:
·
If
the rate described above is not so published by 3:00 p.m., New York City
time, on the related calculation date, the bond equivalent yield of the rate
for those treasury bills as published in H.15 Daily Update, or another
recognized electronic source
S-16
used for the purpose of displaying that rate, under the caption U.S.
Government Securities/Treasury Bills/Auction High, will be the treasury rate.
·
If
the rate described in the prior paragraph is not so published by 3:00 p.m.,
New York City time, on the related calculation date, the bond equivalent yield,
as defined below, of the auction rate of such treasury bills as announced by
the U.S. Department of the Treasury.
·
If
the auction rate described in the prior paragraph is not so announced by the
U.S. Department of the Treasury, or if no such auction is held, then the
treasury rate will be the bond equivalent yield of the rate on that treasury
rate interest determination date of treasury bills having the index maturity
specified in the applicable pricing supplement as published in H.15(519) under
the caption U.S. Government Securities/Treasury Bills/Secondary Market or, if
not yet published by 3:00 p.m., New York City time, on the related
calculation date, the rate on that treasury rate interest determination date of
those treasury bills as published in H.15 Daily Update, or another recognized
electronic source used for the purpose of displaying that rate, under the
caption U.S. Government Securities/Treasury Bills/Secondary Market.
·
If
the rate described in the prior paragraph is not yet published in H.15(519),
H.15 Daily Update or another recognized electronic source, then the treasury
rate will be calculated by the calculation agent and will be the bond
equivalent yield of the arithmetic mean of the secondary market bid rates, as
of approximately 3:30 p.m., New York City time, on that treasury rate
interest determination date, of three leading primary United States government
securities dealers, which may include one or more of the agents or their
affiliates, selected by the calculation agent, after consultation with the
Company, for the issue of treasury bills with a remaining maturity closest to
the index maturity specified in the applicable pricing supplement.
·
If
the dealers selected as described above by the calculation agent are not
quoting as set forth above, the treasury rate with respect to that treasury
rate interest determination date will be the treasury rate for the immediately
preceding interest reset period, or if there was no interest reset period, the
rate of interest payable will be the initial interest rate.
Bond equivalent yield means a yield, expressed as a percentage,
calculated in accordance with the following formula:
Bond equivalent yield =
|
|
|
360 (D x M)
|
where
D is the applicable per annum rate for treasury bills quoted on a bank
discount basis, N refers to 365 or 366, as the case may be, and M is the
actual number of days in the applicable interest reset period.
CD Rate.
Unless otherwise specified in
the applicable pricing supplement, CD rate means, with respect to any interest
determination date relating to any floating rate note for which the CD rate is
an applicable base rate, which date we refer to as a CD rate interest
determination date, the rate on that date for negotiable U.S. dollar
certificates of deposit having the index maturity specified in the applicable
pricing supplement as published in H.15(519), as defined below, under the
heading CDs (Secondary Market). If the
CD rate cannot be determined in this manner, the following procedures will
apply:
·
If
the rate described above is not published by 3:00 p.m., New York City
time, on the relevant calculation date, then the CD rate will be the rate on
that CD rate interest determination date for negotiable U.S. dollar
certificates of deposit having the specified index maturity as published in
H.15 Daily Update, as defined below, or other recognized electronic sources
used for the purpose of displaying the applicable rate, under the caption CDs
(Secondary Market).
·
If
by 3:00 p.m., New York City time, on the applicable calculation date, that
rate is not published in either H.15(519), H.15 Daily Update or another
recognized electronic source, the CD rate for that CD rate interest
determination date will be calculated by the calculation agent and will be the
arithmetic mean of the secondary market offered rates as of 10:00 a.m.,
New York City time, on that CD rate interest determination date, of three
leading non-bank dealers in negotiable U.S. dollar certificates of deposit in
The City of New York, which may include one or more of the agents or their
affiliates, selected by the calculation agent, after consultation with us, for
negotiable U.S. dollar certificates of deposit of major U.S. money market banks
with a remaining maturity closest to the index maturity specified in the
applicable pricing supplement in an amount that is representative for a single
transaction in that market at that time.
·
If
the dealers selected as described above by the calculation agent are not
quoting rates as set forth above, the CD rate for that CD interest rate
determination date will be the CD rate in effect for the immediately preceding
interest reset period, or if there was no interest reset period, then the rate
of interest payable will be the initial interest rate.
Federal Funds Rate.
Unless
otherwise specified in the applicable pricing supplement, federal funds rate
means, with respect to any interest determination date relating to any floating
rate note for which the federal funds rate is an applicable base rate, to which
we refer as a federal funds rate interest determination date, the rate on
that date for United States dollar federal funds as published in H.15(519)
under the heading Federal Funds (Effective) as that rate is displayed on
Reuters Money Markets Rates Service, or any successor service, on page FEDFUNDS1,
or any other page as may replace that page on that service. If the federal funds rate cannot be
determined in this manner, the following procedures will apply.
·
If
the rate described above does not appear on page FEDFUNDS1 by 3:00 p.m.,
New York City time, on the related calculation date, then the federal funds
rate will be the rate on that federal funds rate interest determination date
for United States dollar federal funds as published in H.15 Daily Update, or
another recognized electronic source used for the purpose of displaying that
rate, under the caption Federal Funds (Effective).
S-17
·
If
the rate described above does not appear on FEDFUNDS1 and is not yet
published in H.15(519), H.15 Daily Update or another electronic source by 3:00 p.m.,
New York City time, on the related calculation date, then the federal funds
rate for that federal funds rate interest determination date will be calculated
by the calculation agent and will be the arithmetic mean of the rates for the
last transaction in overnight United States dollar federal funds arranged by
three leading brokers of United States dollar federal funds transactions in The
City of New York, which may include one or more of the agents or their
affiliates, selected by the calculation agent, after consultation with us,
prior to 9:00 a.m., New York City time, on that federal funds rate
interest determination date.
·
If
the brokers selected as described above by the calculation agent are not
quoting as set forth above, the federal funds rate with respect to that federal
funds rate interest determination date will be the federal funds rate for the
immediately preceding interest reset period, or if there was no interest reset
period, the rate of interest payable will be the initial interest rate.
Indexed Notes
We may offer indexed notes according to which the principal and/or
interest is determined by reference to one or more underlying assets or
measures, including currencies or composite currencies, exchange rates, swap
indices between currencies or composite currencies, commodities, commodity
indices or baskets, securities or securities baskets or indices, interest rates
or other indices or any other financial, economic or other measure or
instrument, including the occurrence or non-occurrence of any event or
circumstance described in the applicable pricing supplement.
The pricing supplement will describe how interest and principal payments
on indexed notes will be determined. It
will also include historical and other information about the index or indices
and information about the U.S. tax consequences to the holders of indexed
notes.
Amounts payable on an indexed note will be based on the face amount of
the note. The pricing supplement will
describe whether the principal amount that we will pay you on redemption or
repayment before maturity would be the face amount, the principal amount at
that date or another amount.
If a third party is responsible for calculating or announcing an index
for certain indexed notes and that third party stops calculating or announcing
the index, or changes the way that the index is calculated in a way not
permitted in the pricing supplement, then the index will be calculated by an
independent determination agent named in the pricing supplement. If no independent agent is named, then we
will calculate the index. If neither the
determination agent nor we can calculate the index in the same way and under
the same conditions as the original third party, then the principal or interest
on the notes will be determined as described in the pricing supplement. All calculations that we or the independent
determination agent make will be binding unless they are clearly wrong.
If you purchase an indexed note, the applicable pricing supplement will
include information about the relevant underlying index or measure, about how
amounts that are to become payable will be determined by reference to the price
or value of that index and about the terms on which amounts payable on the note
may be settled physically or in cash.
Note that, under the indenture, physical settlement is only possible if relevant
procedures are agreed between us and the trustee. Such procedures have not yet been
agreed. In the event of physical
settlement, the relevant pricing supplement will specify in detail the
procedures for such physical settlement.
The pricing supplement will also identify the calculation agent that
will calculate the amounts payable with respect to the indexed debt security
and may exercise significant discretion in doing so. An investment in indexed notes may entail
significant risks. See Risks Associated
With Foreign Currency Notes and Indexed NotesIndexed Notes, as well as the
risks described in the applicable pricing supplement.
European Monetary Union
On January 1, 1999, the European Union introduced the single
European currency known as the euro in the 11 (now 15) participating member
states of the European Monetary Union. A
participating member state is a member state of the European Union that has
adopted the euro as its legal currency according to the Treaty of Rome of March 25,
1957, as amended by the Single European Act of 1986 and the Treaty on European
Union, signed in Maastricht on February 1, 1992. As of the date of this prospectus supplement,
Sweden does not participate in the single currency.
If so specified in the applicable pricing supplement, we may at our option,
and without the consent of the holders of the notes or the need to amend the
notes or the indenture, re-denominate the notes issued in the currency of a
country that subsequently participates in the final stage of the European
Monetary Union, or otherwise participates in the European Monetary Union in a
manner with similar effect to such final stage, into euro. The provisions relating to any such
redenomination will be contained in the applicable pricing supplement. You are responsible for informing yourself
about the effects or potential of European Monetary Union on any investment you
make.
Redemption and Repurchase
General
The pricing supplement for the issuance of each series of notes will
indicate either that:
·
the
notes cannot be redeemed prior to their maturity date (other than on the
occurrence of the tax events described under Description of Debt
SecuritiesOptional Redemption Due to Changes in Swedish Tax Treatment in the
accompanying prospectus); or
S-18
·
the
notes will be redeemable or subject to repayment at our or the holders option
on or after a specified date at a specified redemption or repayment price. The redemption or repayment price may be par
or may decline from a specified premium to par at a later date, together, in
each case, with accrued interest to the date of redemption or repayment.
Market Repurchases
We
may repurchase notes at any time and price in the open market or
otherwise. Notes we repurchase may, at
our discretion, be held, resold (subject to compliance with applicable
securities and tax laws) or surrendered to the trustee for cancellation.
Discount Notes
If
the pricing supplement states that a note is a discount note, the amount
payable in the event of redemption, repayment or other acceleration of the
maturity date will be the amortized face amount of the note as of the date of
redemption, repayment or acceleration, but in no event more than its principal
amount. The amortized face amount is
equal to (a) the issue price plus (b) that portion of the difference
between the issue price and the principal amount that has accrued at the yield
to maturity described in the pricing supplement (computed in accordance with
generally accepted U.S. bond yield computation principles) by the redemption,
repayment or acceleration date.
Sinking Fund
The
notes will not be subject to any sinking fund.
Notices
Notices
to holders of notes will be made by first class mail, postage prepaid, or sent
by facsimile transmission to the registered holders. Under the indenture, we have irrevocably
appointed the Consulate General of Sweden in The City of New York as our
authorized agent for service of process in any action based on the debt securities
brought against us in any State or federal court in The City of New York. Under the indenture, we will waive any
immunity from the jurisdiction of these courts to which we might be entitled in
any action based on these debt securities.
S-19
UNITED
STATES FEDERAL INCOME TAX CONSIDERATIONS
The
following discussion summarizes certain U.S. federal income tax considerations
that may be relevant to you if you invest in notes and are a U.S. holder. You will be a U.S. holder if you are a
beneficial owner of the notes and you are an individual who is a citizen or
resident of the United States, a U.S. domestic corporation, or any other person
that is subject to U.S. federal income tax on a net income basis in respect of
an investment in the notes. This summary
deals only with U.S. holders that hold notes as capital assets. It does not address considerations that may
be relevant to you if you are an investor that is subject to special tax rules,
such as a bank, thrift, real estate investment trust, regulated investment
company, insurance company, dealer in securities or currencies, trader in
securities or commodities that elects mark to market treatment, certain
short-term holders of the notes, persons that will hedge their exposure to the
notes or will hold notes as a hedge against currency risk or as a position in a
straddle or conversion transaction, tax-exempt organization or a person whose
functional currency is not the U.S. dollar.
U.S. holders should be aware that the U.S. federal income tax
consequences of holding notes may be materially different for investors
described in the prior sentence.
This
summary is based on laws, regulations, rulings and decisions now in effect, all
of which may change. Any change could
apply retroactively and could affect the continued validity of this summary.
You
should consult your tax adviser about the tax consequences of holding notes,
including the relevance to your particular situation of the considerations
discussed below, as well as the relevance to your particular situation of
state, local or other tax laws.
Payments or Accruals of Interest
Payments
or accruals of qualified stated interest (as defined below) on a note will be
taxable to you as ordinary interest income at the time that you receive or
accrue such amounts (in accordance with your regular method of tax
accounting). If you use the cash method
of tax accounting and you receive payments of interest pursuant to the terms of
a note in a currency other than U.S. dollars (a foreign currency), the amount
of interest income you will realize will be the U.S. dollar value of the
foreign currency payment based on the exchange rate in effect on the date you
receive the payment, regardless of whether you convert the payment into U.S.
dollars. If you are an accrual-basis
U.S. holder, you will accrue interest income on foreign currency notes in the
relevant foreign currency, and will translate the amount so accrued into U.S.
dollars based on the average exchange rate in effect during the interest accrual
period (or with respect to an interest accrual period that spans two taxable
years, based on the average exchange rate for the partial period within the
taxable year). Alternatively, as an
accrual-basis U.S. holder, you may elect to translate all interest income on
foreign currency-denominated notes at the spot rate on the last day of the
accrual period (or the last day of the taxable year, in the case of an accrual
period that spans more than one taxable year) or on the date that you receive
the interest payment if that date is within five business days of the end of
the accrual period. If you make this
election, you must apply it consistently to all debt instruments from year to
year and you cannot change the election without the consent of the Internal
Revenue Service. If you use the accrual
method of accounting for tax purposes, you will recognize foreign currency gain
or loss on the receipt of a foreign currency interest payment if the exchange
rate in effect on the date the payment is received differs from the rate
applicable to a previous accrual of that interest income. This foreign currency gain or loss will be
treated as ordinary income or loss, but generally will not be treated as an
adjustment to interest income received on the note.
Purchase, Sale and Retirement of Notes
Initially,
your tax basis in a note generally will equal the cost of the note to you. Your basis will increase by any amounts that
you are required to include in income under the rules governing original
issue discount and market discount, and will decrease by the amount of any
amortized premium and any payments other than payments of qualified stated
interest made on the note. (The rules for
determining these amounts are discussed below.) If you purchase a note that is
denominated in a foreign currency, the cost to you (and therefore generally
your initial tax basis) will be the U.S. dollar value of the foreign currency
purchase price on the date of purchase calculated at the exchange rate in
effect on that date. If the foreign
currency note is traded on an established securities market and you are a
cash-basis taxpayer (or if you are an accrual-basis taxpayer that makes a
special election), you will determine the U.S. dollar value of the cost of the
note by translating the amount of the foreign currency that you paid for the
note at the spot rate of exchange on the settlement date of your purchase. The amount of any subsequent adjustments to
your tax basis in a note in respect of foreign currency-denominated original issue
discount, market discount and premium will be determined in the manner
described below. If you convert U.S.
dollars into a foreign currency and then immediately use that foreign currency
to purchase a note, you generally will not have any taxable gain or loss as a
result of the conversion or purchase.
When
you sell or exchange a note, or if a note that you hold is retired, you
generally will recognize gain or loss equal to the difference between the
amount you realize on the transaction (less any accrued qualified stated
interest, which will be subject to tax in the manner described above under Payments
or Accruals of Interest) and your tax basis in the note. If you sell or exchange a note for a foreign
currency, or receive foreign currency on the retirement of a note, the amount
you will realize for U.S. tax purposes generally will be the dollar value of
the foreign currency that you receive calculated at the exchange rate in effect
on the date the foreign currency note is disposed of or retired. If you dispose of a foreign currency note that
is traded on an established securities market and you are a cash-basis U.S.
holder (or if you are an accrual-basis holder that makes a special election),
you will determine the U.S. dollar value of the amount realized by translating
the amount at the spot rate of exchange on the settlement date of the sale,
exchange or retirement.
The
special election available to you if you are an accrual-basis taxpayer in
respect of the purchase and sale of foreign currency notes traded on an
established securities market, which is discussed in the two preceding
paragraphs, must be applied consistently to all debt instruments from year to
year and cannot be changed without the consent of the Internal Revenue Service.
Except
as discussed below with respect to market discount, short-term notes (as
defined below) and foreign currency gain or loss, the gain or loss that you
recognize on the sale,
S-20
exchange
or retirement of a note generally will be capital gain or loss. The gain or loss on the sale, exchange or
retirement of a note will be long-term capital gain or loss if you have held
the note for more than one year on the date of disposition. Net long-term capital gain recognized by an
individual U.S. holder generally will be subject to tax at a lower rate than
net short-term capital gain or ordinary income.
The ability of U.S. holders to offset capital losses against ordinary income
is limited.
Despite
the foregoing, the gain or loss that you recognize on the sale, exchange or
retirement of a foreign currency note generally will be treated as ordinary
income or loss to the extent that the gain or loss is attributable to changes
in exchange rates during the period in which you held the note. This foreign currency gain or loss will not
be treated as an adjustment to interest income that you receive on the note.
Original Issue Discount
If
we issue notes at a discount from their stated redemption price at maturity
(as defined below), and the discount is equal to or more than the product of
one-fourth of one percent (0.25%) of the stated redemption price at maturity of
the notes multiplied by the number of full years to their maturity, the notes
will be original issue discount notes. The difference between the issue price
and the stated redemption price at maturity of the notes will be the original
issue discount. The issue price of the notes will be the first price at
which a substantial amount of the notes are sold to the public (
i.e.
, excluding sales of notes to
underwriters, placement agents, wholesalers, or similar persons). The stated redemption price at maturity
will include all payments under the notes other than payments of qualified
stated interest. The term qualified
stated interest generally means stated interest that is unconditionally
payable in cash or property (other than debt instruments issued by the Company)
at least annually during the entire term of a note at a single fixed interest
rate or, subject to certain conditions, based on one or more interest indices.
If
you invest in an original issue discount note, you generally will be subject to
the special tax accounting rules for original issue discount obligations
provided by the Internal Revenue Code of 1986, as amended, and certain U.S.
Treasury regulations. You should be
aware that, as described in greater detail below, if you invest in an original
issue discount note, you generally will be required to include original issue
discount in ordinary gross income for U.S. federal income tax purposes as it
accrues, although you may not yet have received the cash attributable to that
income.
In
general, and regardless of whether you use the cash or the accrual method of
tax accounting, if you are the holder of an original issue discount note with a
maturity greater than one year, you will be required to include in ordinary
gross income the sum of the daily portions of original issue discount on that
note for all days during the taxable year that you own the note. The daily portions of original issue discount
on an original issue discount note are determined by allocating to each day in
any accrual period a ratable portion of the original issue discount allocable
to that period. Accrual periods may be
any length and may vary in length over the term of an original issue discount
note, so long as no accrual period is longer than one year and each scheduled
payment of principal or interest occurs on the first or last day of an accrual
period. If you are the initial holder of
the note, the amount of original issue discount on an original issue discount
note allocable to each accrual period is determined by:
(i)
multiplying the adjusted issue price (as
defined below) of the note at the beginning of the accrual period by a
fraction, the numerator of which is the annual yield to maturity (defined
below) of the note and the denominator of which is the number of accrual
periods in a year; and
(ii)
subtracting from that product the amount (if
any) payable as qualified stated interest allocable to that accrual period.
The
adjusted issue price of an original issue discount note at the beginning of
any accrual period will generally be the sum of its issue price (including any
accrued interest) and the amount of original issue discount allocable to all
prior accrual periods, reduced by the amount of all payments other than any
qualified stated interest payments on the note in all prior accrual
periods. All payments on an original
issue discount note (other than qualified stated interest) will generally be
viewed first as payments of previously accrued original issue discount (to the
extent of the previously accrued discount), with payments considered made from
the earliest accrual periods first, and then as a payment of principal. The annual yield to maturity of a note is
the discount rate (appropriately adjusted to reflect the length of accrual
periods) that causes the present value on the issue date of all payments on the
note to equal the issue price. In the
case of an original issue discount note that is a floating rate note, both the annual
yield to maturity and the qualified stated interest will be determined for
these purposes as though the note will bear interest in all periods at a fixed
rate generally equal to the rate that would be applicable to interest payments
on the note on its date of issue or, in the case of some floating rate notes,
the rate that reflects the yield that is reasonably expected for the note. (Additional rules may apply if interest
on a floating rate note is based on more than one interest index.)
As
a result of this constant yield method of including original issue discount
income, the amounts you will be required to include in your gross income if you
invest in an original issue discount note denominated in U.S. dollars generally
will be lesser in the early years and greater in the later years than amounts
that would be includible on a straight-line basis.
You
generally may make an irrevocable election to include in income your entire
return on a note (
i.e.
, the
excess of all remaining payments to be received on the note, including payments
of qualified stated interest, over the amount you paid for the note) under the
constant yield method described above.
If you purchase notes at a premium or market discount and if you make
this election, you will also be deemed to have made the election (discussed
below under the Premium and Market Discount) to amortize premium or to
accrue market discount currently on a constant yield basis in respect of all
other premium or market discount bonds that you hold.
In
the case of an original issue discount note that is also a foreign currency
note, you should determine the U.S. dollar amount includible as original issue
discount for each accrual period by (i) calculating the amount of original
issue discount allocable to each accrual period in the foreign currency using
the constant yield method described above and (ii) translating that
foreign currency amount at the average
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exchange
rate in effect during that accrual period (or, with respect to an interest
accrual period that spans two taxable years, at the average exchange rate for
each partial period). Alternatively, you
may translate the foreign currency amount at the spot rate of exchange on the
last day of the accrual period (or the last day of the taxable year, for an
accrual period that spans two taxable years) or at the spot rate of exchange on
the date of receipt, if that date is within five business days of the last day
of the accrual period, provided that you have made the election described above
under Payments or Accruals of Interest. Because exchange rates may fluctuate,
if you are the holder of an original issue discount note that is also a foreign
currency note, you may recognize a different amount of original issue discount
income in each accrual period than would be the case if you were the holder of
an otherwise similar original issue discount note denominated in U.S.
dollars. Upon the receipt of an amount
attributable to original issue discount (whether in connection with a payment
of an amount that is not qualified stated interest or the sale or retirement of
the original issue discount note), you will recognize ordinary income or loss
measured by the difference between the amount received (translated into U.S.
dollars at the exchange rate in effect on the date of receipt or on the date of
disposition of the original issue discount note, as the case may be) and the
amount of original issue discount accrued (using the exchange rate applicable
to such previous accrual).
If
you purchase an original issue discount note outside of the initial offering at
a cost less than its remaining redemption amount (
i.e.
, the total of all future payments to be made on the
note other than payments of qualified stated interest), or if you purchase an
original issue discount note in the initial offering at a price other than the
notes issue price, you generally will also be required to include in gross
income the daily portions of original issue discount, calculated as described
above. However, if you acquire an
original issue discount note at a price greater than its adjusted issue price,
you will be required to reduce your periodic inclusions of original issue
discount to reflect the premium paid over the adjusted issue price. On the other hand, if you acquired an
original issue discount note at a price that was less than its adjusted issue
price by at least 0.25% of its adjusted issue price multiplied by the number of
remaining whole years to maturity, the market discount rules discussed
below also will apply.
Floating
rate notes generally will be treated as variable rate debt instruments under
U.S. Treasury regulations dealing with original issue discount notes
Accordingly, the stated interest on a floating rate note generally will be
treated as qualified stated interest and such a note will not have original
issue discount solely as a result of the fact that it provides for interest at
a variable rate. If a floating rate note
does not qualify as a variable rate debt instrument, the note will be subject
to special rules that govern the tax treatment of debt obligations that
provide for contingent payments. We will
provide a detailed description of the tax considerations relevant to U.S.
holders of any such notes in the pricing supplement.
Certain
notes may be redeemed prior to their stated maturity, either at the option of
the Company or at the option of the holder, or may have special repayment or
interest rate reset features as indicated in the pricing supplement. Notes containing these features, in
particular original issue discount notes may be subject to special rules that
differ from the general rules discussed above. If you purchase original issue discount notes
with these features, you should carefully examine the pricing supplement and
consult your tax adviser about their treatment since the tax consequences of
investing in original issue discount notes will depend, in part, on the
particular terms and features of those notes.
Short-Term Notes
The
rules described above also will generally apply to original issue discount
notes with maturities of one year or less (short-term notes), but with some
modifications.
First,
the original issue discount rules treat none of the interest on a
short-term note as qualified stated interest, and treat a short-term note as
having original issue discount. Thus,
all short-term notes will be original issue discount notes. Except as noted below, if you are a cash-basis
holder of a short-term note and you do not identify the short-term note as part
of a hedging transaction you will generally not be required to accrue original
issue discount currently, but you will be required to treat any gain realized
on a sale, exchange or retirement of the note as ordinary income to the extent
such gain does not exceed the original issue discount accrued with respect to
the note during the period you held the note.
You may not be allowed to deduct all of the interest paid or accrued on
any indebtedness incurred or maintained to purchase or carry a short-term note
until the Maturity of the note or its earlier disposition in a taxable
transaction. Notwithstanding the
foregoing, if you are a cash-basis U.S. holder of a short-term note, you may
elect to accrue original issue discount on a current basis (in which case the
limitation on the deductibility of interest described above will not
apply). A U.S. holder using the accrual
method of tax accounting and some cash method holders (including banks,
securities dealers, regulated investment companies and certain trust funds)
generally will be required to include original issue discount on a short-term
note in gross income on a current basis.
Original issue discount will be treated as accruing for these purposes
on a ratable basis or, at the election of the holder, on a constant yield basis
based on daily compounding.
Second,
regardless of whether you are a cash-basis or accrual-basis holder, if you are
the holder of a short-term note you may elect to accrue any acquisition
discount with respect to the note on a current basis Acquisition discount is
the excess of the remaining redemption amount of the note at the time of
acquisition over the purchase price.
Acquisition discount will be treated as accruing ratably or, at the
election of the holder, under a constant yield method based on daily
compounding. If you elect to accrue
acquisition discount, the original issue discount rules will not apply.
Finally,
the market discount rules described below will not apply to short-term
notes.
Premium
If
you purchase a note at a cost greater than the notes remaining redemption
amount, you will be considered to have purchased the note at a premium, and you
may elect to amortize the premium as an offset to interest income, using a
constant yield method, over the remaining term of the note. If you make this election, it generally will
apply to all debt instruments that you hold at the time of the election, as
well as any debt instruments that you subsequently acquire. In addition, you may not revoke the election
without the consent of the Internal Revenue Service. If you elect to amortize the premium, you
will be required to reduce your tax basis in the note by the amount of the
premium amortized
S-22
during
your holding period. Original issue
discount notes purchased at a premium will not be subject to the original issue
discount rules described above. In the
case of premium on a foreign currency note, you should calculate the
amortization of the premium in the foreign currency. Premium amortization deductions attributable
to a period reduce interest income in respect of that period, and therefore are
translated into U.S. dollars at the rate that you use for interest payments in
respect of that period. Exchange gain or
loss will be realized with respect to amortized premium on a foreign currency
note based on the difference between the exchange rate computed on the date or
dates the premium is amortized against interest payments on the note and the
exchange rate on the date the holder acquired the note. If you do not elect to amortize premium, the
amount of premium will be included in your tax basis in the note. Therefore, if you do not elect to amortize
premium and you hold the note to Maturity, you generally will be required to
treat the premium as capital loss when the note matures.
Market Discount
If
you purchase a note at a price that is lower than the notes remaining
redemption amount (or in the case of an original issue discount note, the notes
adjusted issue price), by 0.25% or more of the remaining redemption amount (or
adjusted issue price), multiplied by the number of remaining whole years to
maturity, the note will be considered to bear market discount in your
hands. In this case, any gain that you
realize on the disposition of the note generally will be treated as ordinary
interest income to the extent of the market discount that accrued on the note
during your holding period. In addition,
you may be required to defer the deduction of a portion of the interest paid on
any indebtedness that you incurred or continued to purchase or carry the note. In general, market discount will be treated
as accruing ratably over the term of the note, or, at your election, under a
constant yield method. You must accrue
market discount on a foreign currency note in the specified currency. The amount that you will be required to
include in income in respect of accrued market discount will be the U.S. dollar
value of the accrued amount, generally calculated at the exchange rate in
effect on the date that you dispose of the note.
You
may elect to include market discount in gross income currently as it accrues
(on either a ratable or constant yield basis), in lieu of treating a portion of
any gain realized on a sale of the note as ordinary income. If you elect to include market discount on a
current basis, the interest deduction deferral rule described above will
not apply. If you do make such an
election, it will apply to all market discount debt instruments that you
acquire on or after the first day of the first taxable year to which the
election applies. The election may not
be revoked without the consent of the Internal Revenue Service. Any accrued market discount on a foreign
currency note that is currently includible in income will be translated into
U.S. dollars at the average exchange rate for the accrual period (or portion
thereof within the holders taxable year).
Indexed Notes and Other Notes Providing for Contingent
Payments
Special
rules govern the tax treatment of debt obligations that provide for
contingent payments (contingent debt obligations). These rules generally require accrual of
interest income on a constant yield basis in respect of contingent debt
obligations at a yield determined at the time of issuance of the obligation,
and may require adjustments to these accruals when any contingent payments are
made. We will provide a detailed
description of the tax considerations relevant to U.S. holders of any
contingent debt obligations in the pricing supplement.
Information Reporting and Backup Withholding
The
paying agent must file information returns with the United States Internal
Revenue Service in connection with note payments made to certain United States
persons. If you are a United States
person, you generally will not be subject to United States backup withholding
tax on such payments if you provide your taxpayer identification number to the
paying agent. You may also be subject to
information reporting and backup withholding tax requirements with respect to
the proceeds from a sale of the notes.
If you are not a United States person, you may have to comply with
certification procedures to establish that you are not a United States person
in order to avoid information reporting and backup withholding tax
requirements.
S-23
PLAN OF
DISTRIBUTION
Distribution
We
may offer the notes on a continuous basis through agents that have agreed to
use their reasonable best efforts to solicit orders. The terms and conditions contained in the
agency agreement, dated December 15, 2008 (the Agency Agreement), and
any terms agreement entered into thereunder will govern these selling
efforts. The agents who have entered
into this agreement with us are listed on page S-2.
We
will pay the agents a commission that will be negotiated at the time of
sale. Generally, the commission will take
the form of a discount, which may vary based on the maturity of the notes
offered and is expected to range from 0.125% to 0.650% of the principal amount
(but may be outside that range, and will, in any event, be specified in the
applicable pricing supplement).
In
addition to the agents listed on page S-2, we may sell notes through other
agents who execute the forms and receive the confirmations required by the
Agency Agreement. The applicable pricing
supplement will specify the agents and their commission.
We
have the right to accept orders or reject proposed purchases in whole or in
part. The agents also have the right,
using their reasonable discretion, to reject any proposed purchase of notes in
whole or in part.
We
may also sell notes to agents as principal,
i.e.
, for their own accounts.
These notes may be resold in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying
prices. The pricing supplement relating
to these notes will specify the purchase price paid by the agents and, if the
notes are to be resold at a fixed public offering price, the initial public
offering price and the underwriting discounts and commissions. Unless the pricing supplement specifies
otherwise, any note purchased by an agent as principal will be purchased at
100% of the principal amount of the note minus a percentage equal to the
commission applicable to an agency sale of a note of identical maturity. These notes may be sold to other
dealers. The agents and dealers may
allow concessions, which will be described in the pricing supplement. Such concessions may not be in excess of
those concessions received by such agent from us. After the initial public offering of the
notes, the public offering price, the concession and the discount may be
changed.
The
notes will generally not have an established trading market when issued. The agents may make a market in the notes,
but are not obligated to do so and may discontinue any market-making at any
time without notice. We cannot assure
you that a secondary market will be established for any series of notes, or
that any of them will be sold. The notes
will not be listed on any securities exchange, unless otherwise indicated in
the pricing supplement.
In
order to facilitate the offering of the notes, the stabilizing manager or any
person acting for the stabilizing manager may engage in transactions with a
view to supporting the market price of the notes issued under the program at a
level higher than that which might otherwise prevail for a limited period after
the issue date. In particular, the
stabilizing manager or any person acting for it may:
·
over-allot
in connection with the offering,
i.e.
,
offer and apportion more of the notes than the agents have, creating a short
position in the notes for their own accounts;
·
bid
for and purchase notes in the open market to cover over-allotments or to stabilize
the price of the notes; or
·
if
the stabilizing manager or any person acting on its behalf repurchases
previously-distributed notes, reclaim selling concessions which they gave to
dealers when they sold the notes.
Any
of these activities may stabilize or maintain the market price of the notes
above independent market levels. The
stabilizing manager or any person acting on its behalf are not required to
engage in these activities, and, if they do, they may discontinue them at any
time and they must be brought to an end after a limited period. Such stabilizing shall be in compliance with
all applicable laws, regulations and rules.
We
may agree to reimburse the agents for certain expenses incurred in connection
with the offering of the notes. The
agents and their affiliates may engage in transactions with and perform
services for us in the ordinary course of business.
We
have agreed to indemnify the agents against certain liabilities, including
certain liabilities under the U.S. Securities Act of 1933 (the Securities
Act). The agents, whether acting as
agent or principal, and any dealer that offers the notes, may be deemed to be underwriters
within the meaning of the Securities Act.
A
form of pricing supplement is attached as Annex A to this prospectus
supplement.
Selling Restrictions
Each
of the agents has represented and agreed that it has not offered, sold or
delivered and will not offer, sell or deliver any of the notes directly or
indirectly, or distribute this prospectus supplement or the accompanying
prospectus or any other offering material relating to the notes, in or from any
jurisdiction except under circumstances that will result in compliance with the
applicable laws and regulations thereof and that will not impose any obligations
on us except as set forth in the terms agreement.
S-24
European Economic Area
In
relation to each member state of the European Economic Area which has
implemented the Prospectus Directive (each of which we refer to as a Relevant
Member State), each agent has represented and agreed, and each further agent
appointed under the program 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 (which we refer to as the Relevant Implementation
Date) it has not made and will not make an offer of the notes which are the
subject of the offering contemplated by this prospectus supplement as completed
by the final terms in relation thereto to the public in that Relevant Member
State (which we refer to in this section as the Securities) except that it
may, with effect from and including the Relevant Implementation Date, make an
offer of such Securities to the public in that Relevant Member State:
(a) if the final terms in relation to the
Securities specify that an offer of those Securities may be made other than
pursuant to Article 3(2) of the Prospectus Directive in that Relevant
Member State (a Non-exempt Offer), following the date of publication of a
prospectus in relation to such Securities which has been approved by the
competent authority in that Relevant Member State or, where appropriate,
approved in another Relevant Member State and notified to the competent
authority in that Relevant Member State, provided that any such prospectus has
subsequently been completed by the final terms contemplating such Non-exempt
Offer, in accordance with the Prospectus Directive in the period beginning and
ending on the dates specified in such prospectus or final terms, as applicable;
(b) at any time to legal entities which
are authorised or regulated to operate in the financial markets or, if not so
authorised or regulated, whose corporate purpose is solely to invest in securities;
(c) at any time to any legal entity which
has two or more of (1) an average of at least 250 employees during the
last financial year; (2) a total balance sheet of more than 43,000,000
and (3) an annual net turnover of more than 50,000,000, as shown in its
last annual or consolidated accounts; or
(d) at any time to fewer than 100 natural
or legal persons (other than qualified investors as defined in the Prospectus
Directive) subject to obtaining the prior consent of the relevant agents nominated
by SEK for any such offer; or
(e) at any time in any other
circumstances falling within Article 3(2) of the Prospectus
Directive,
provided
that no such offer of Securities referred to in (b) to (e) above
shall require SEK or any agent 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 to the public in
relation to any Securities 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 Securities to be offered so as to enable an investor to decide to
purchase or subscribe the Securities, as the same may be varied in that Member
State by any measure implementing the Prospectus Directive in that Member State
and the expression Prospectus Directive means Directive 2003/71/EC and
includes any relevant implementing measure in each Relevant Member State.
The
EEA selling restriction is in addition to any other selling restrictions set
out below.
United Kingdom
Each
agent has represented and agreed , and each further agent appointed under the
program will be required to represent and agree, that:
(a)
in relation to any notes which have a maturity
of less than one year, (i) it is a person whose ordinary activities
involve it in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of its business and (ii) it has not
offered or sold and will not offer or sell any notes other than to persons
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or as agent) for the purposes of their
businesses or who it is reasonable to expect will acquire, hold, manage or
dispose of investments (as principal or agent) for the purposes of their
businesses where the issue of the notes would otherwise constitute a
contravention of Section 19 of the FSMA by SEK;
(b)
it has only communicated or caused to be
communicated and will only communicate or cause to be communicated an
invitation or inducement to engage in investment activity (within the meaning
of Section 21 of the FSMA) received by it in connection with the issue or
sale of any notes in circumstances in which Section 21(1) of the FSMA
does not apply to us; and
(c)
it has complied and will comply with all
applicable provisions of the FSMA with respect to anything done by it in
relation to any notes in, from or otherwise involving the United Kingdom.
S-25
Italy
Each
agent has confirmed and agreed that no prospectus has been nor will be
published in Italy in connection with the offering of the notes pursuant to the
Prospectus Directive (Directive 2003/71/EC) and Italian securities legislation
and, accordingly, each agent has agreed that no notes have been offered, sold
or delivered nor will be offered, sold or delivered, nor any document relating
to the notes has been nor will be distributed in Italy, except:
(a)
to qualified investors (
investitori qualificati
), as defined in Article 2, paragraph (e)(i) to (iii) of
the Prospectus Directive; or
(b)
in other circumstances which are exempted from
the rules on public offerings pursuant to Article 100 of Legislative
Decree No. 58 of 24 February 1998, as amended (the Financial
Services Act) and Article 33, first paragraph, of Regulation no. 11971 of
14 May 1999, as amended from time to time, of
Commissione Nazionale delle Società e della Borsa
(the
Italian Securities Exchange Commission, the CONSOB).
Insofar
as the requirements above are based on laws which are superseded at any time
pursuant to the final implementation of the Prospectus Directive in Italy, such
requirements shall be replaced by the applicable requirements under the
relevant implementing measures of the Prospectus Directive in Italy.
Any
offer, sale or delivery of the notes or distribution of any document relating
to the notes in Italy under (a) or (b) above must be:
(i)
made by an investment firm, bank or financial
intermediary permitted to conduct such activities in Italy in accordance with
the Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007,
as amended from time to time, and Legislative Decree No. 385 of 1 September 1993,
as amended (the Banking Act);
(ii)
in compliance with Article 129 of the
Banking Act 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
(iii)
in compliance with any other applicable laws
and regulations or requirement imposed by CONSOB or other Italian authority.
Article 100-bis
of the Financial Services Act affects the transferability of the notes in Italy
to the extent that any placing of the notes is made solely with qualified
investors and such notes are then systematically resold to non-qualified
investors on the secondary market at any time in the 12 months following such
placing. Where this occurs, if has not been published a prospectus compliant
with the Prospectus Directive, purchasers of notes who are acting outside of
the course of their business or profession may in certain circumstances be
entitled to declare such purchase void and to claim damages from any authorized
person at whose premises the Notes were purchased, unless an exemption provided
for under the Financial Services Act applies.
Hong Kong
The
notes may not be offered or sold by means of any document other than to persons
whose ordinary business is to buy or sell shares or debentures, whether as
principal or agent, or in circumstances which do not constitute an offer to the
public within the meaning of the Companies Ordinance (Cap. 32) of Hong Kong,
and no advertisement, invitation or document relating to the notes may be
issued, whether in Hong Kong or elsewhere, which is directed at, or the
contents of which are likely to be accessed or read by, the public in Hong Kong
(except if permitted to do so under the securities laws of Hong Kong) other
than with respect to notes which are or are intended to be disposed of only to
persons outside Hong Kong or only to professional investors within the
meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any
rules made thereunder.
Singapore
This
document has not been registered as a prospectus with the Monetary Authority of
Singapore. Accordingly, this document
and any other document or material in connection with the offer or sale, or
invitation or subscription or purchase, of the notes may not be circulated or
distributed, nor may the notes be offered or sold, or be made the subject of an
invitation for subscription or purchase, whether directly or indirectly, to
persons in Singapore other than under circumstances in which such offer, sale
or invitation does not constitute an offer or sale, or invitation for
subscription or purchase, of the notes to the public in Singapore.
Japan
The
notes have not been and will not be registered under the Securities and
Exchange Law of Japan (the Securities and Exchange Law) and each agent has
agreed that it will not offer or sell any notes, directly or indirectly, in
Japan or to, or for the benefit of, any resident of Japan (which term as used
herein means any person resident in Japan, including any corporation or other
entity organized under the laws of Japan), or to others for re-offering or
resale, directly or indirectly, in Japan or to a resident of Japan, except
pursuant to an exemption from the registration requirements of, and otherwise
in compliance with, the Securities and Exchange Law and any other applicable
laws, regulations and ministerial guidelines of Japan.
S-26
France
Each
agent has confirmed and agreed that no prospectus (including any amendment,
supplement or replacement thereto) has been prepared in connection with the
offering of the notes that has been approved by the
Autorité des marchés financiers
or by the competent authority
of another State that is a contracting party to the Agreement on the European
Economic Area and notified to the
Autorité
des marchés financiers
; no notes have been offered or sold nor will
be offered or sold, directly or indirectly, to the public in France; the
prospectus or any other offering material relating to the notes have not been
distributed or caused to be distributed and will not be distributed or caused
to be distributed to the public in France; such offers, sales and distributions
have been and shall only be made in France to persons licensed to provide the
investment service of portfolio management for the account of third parties,
qualified investors (
investisseurs qualifiés
)
and/or a restricted circle of investors (
cercle
restreint dinvestisseurs
), in each case investing for their own
account, all as defined in Articles L.411-2, D.411-1, D.411-2, D.411-4,
D.734-1, D.744-1, D.754-1 and D.764-1 of the
Code
monétaire et financier.
The direct or indirect distribution to the
public in France of any so acquired notes may be made only as provided by
Articles L. 411-1, L. 411-2, L. 412-1 and L. 621-8 to L. 621-8-3 of the
Code monétaire et financier
and applicable
regulations thereunder.
Kingdom of Sweden
Each
agent has confirmed and agreed and each further agent appointed hereafter will
be required to represent and agree that it will not, directly or indirectly,
offer for subscription or purchase or issue invitations to subscribe for or buy
or sell any notes or distribute any draft or definitive document in relation to
any such offer, invitation or sale in Sweden except in circumstances
that will not result in a requirement to prepare a prospectus pursuant to the
provisions of the Swedish Financial Instruments Trading Act (Sw. Lag (1991:980)
om handel med finansiella instrument
).
S-27
ANNEX A
[FORM OF PRICING SUPPLEMENT] [This form may be modified as
necessary for each issuance of notes.]
PRICING SUPPLEMENT No. [ ]
(To
Prospectus dated December 15, 2008 and
Prospectus Supplement dated December 15, 2008)
[Principal Amount]
|
|
[Face Amount]
|
AKTIEBOLAGET SVENSK EXPORTKREDIT (PUBL)
(Swedish Export Credit Corporation)
(Incorporated in Sweden with limited liability)
[TITLE OF ISSUE]
[MATURITY DATE]
[Issue Price: [
]]
Medium-Term
Notes, Series E
Due Nine Months or More from Date of Issue
The
notes are issued by Aktiebolaget Svensk Exportkredit (publ) (Swedish Export
Credit Corporation). The notes will
mature on [MATURITY DATE]. [The notes
will not be redeemable before maturity except for tax reasons] [and] [will not
be entitled to the benefit of any sinking fund].
[Interest
on the notes will be payable on each [MONTH/DATE] and each [MONTH/DAY] and at
maturity.]
[The
notes will not be listed on any securities exchange.]
Neither the Securities and Exchange Commission nor any
other regulatory body has approved or disapproved these securities or
determined whether this pricing supplement or the related prospectus supplement
and prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
|
|
Price to
Public
|
|
Discounts and
Commissions
|
|
Proceeds,
before
expenses
|
|
Per
Note
|
|
[ ]
|
%
|
[ ]
|
%
|
[ ]
|
%
|
Total
|
|
[ ]
|
|
[ ]
|
|
[ ]
|
|
CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities To Be Registered
|
|
Amount To Be
Registered
|
|
Offering Price Per Unit
|
|
Aggregate
Offering Price
|
|
Amount of
Registration Fee
|
|
Debt securities
|
|
U.S.$
|
[ ]
|
|
[ ]
|
%
|
U.S.$
|
[ ]
|
|
U.S.$
|
[ ]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[If
you purchase any of the notes, you will also be required to pay accrued
interest from [ISSUE DATE] if we deliver the notes after that date.]
[AGENT[S]]
expect to deliver the notes to investors on or about [CLOSING DATE] [through
the facilities of [NAME OF DEPOSITARY].
[AGENT[S]]
The date of this pricing supplement is [DATE].
A-1
ABOUT THIS PRICING SUPPLEMENT
This
pricing supplement is a supplement to:
·
the
accompanying prospectus supplement dated December 15, 2008 relating to an
unlimited aggregate principal amount of our medium-term notes, series E, due
nine months or more from date of issue and
·
the
accompanying prospectus dated December 15, 2008 relating to our debt
securities.
If the information in this pricing supplement differs from the
information contained in the prospectus supplement or the prospectus, you
should rely on the information in this pricing supplement.
You should read this pricing supplement along with the accompanying
prospectus supplement and prospectus.
All three documents contain information you should consider when making
your investment decision. You should
rely only on the information provided or incorporated by reference in this
pricing supplement, the prospectus and the prospectus supplement. We have not authorized anyone else to provide
you with different information. We and
the purchasers are offering to sell the notes and seeking offers to buy the
notes only in jurisdictions where it is lawful to do so. The information contained in this pricing
supplement and the accompanying prospectus supplement and prospectus is current
only as of its date.
INCORPORATION OF INFORMATION
WE FILE WITH THE SEC
The SEC allows us to incorporate by reference the information we file
with them. This means:
·
incorporated
documents are considered part of this prospectus;
·
we
can disclose important information to you by referring you to those documents;
·
information
in this prospectus automatically updates and supersedes information in earlier
documents that are incorporated by reference in this prospectus; and
·
information
that we file with the SEC and which we incorporate by reference in this
prospectus will automatically update and supersede information in this
prospectus.
[We
incorporate by reference the documents listed below, which we filed with or
furnished to the SEC under the Securities Exchange Act of 1934:
·
our
annual report on Form 20-F for the fiscal year ended December 31,
[YEAR], which we filed with the SEC on [DATE] [and]
·
[our
report on Form 6-K, which we furnished to the SEC on [DATE].]
We [also] incorporate by reference each of the following documents that
we will file with the SEC after the date of this prospectus until we terminate
the offering:
·
any
report on Form 6-K filed by us pursuant to the Securities Exchange Act of
1934 that indicates on its cover or inside cover page that we will
incorporate it by reference in this prospectus; and
·
reports
filed under Sections 13(a), 13(c) or 15(d) of the Securities Exchange
Act of 1934.
You
may request a copy of any filings referred to above (excluding exhibits), at no
cost, by contacting us at the following address:
Aktiebolaget Svensk Exportkredit (publ)
(Swedish Export Credit Corporation)
Västra Trädgårdsgatan 11B
10327 Stockholm, Sweden
Tel: +46-8-613-8300
A-2
DESCRIPTION OF THE NOTES
We will issue the notes under the indenture, as
supplemented by the first supplemental indenture, the second supplemental
indenture and the third supplemental indenture.
The information contained in this section and in the prospectus
supplement and the prospectus summarizes some of the terms of the notes and the
indenture, as supplemented. This summary
does not contain all of the information that may be important to you as a
potential investor in the notes. You
should read the indenture, the supplemental indentures and the form of the
notes before making your investment decision.
We have filed copies of these documents with the SEC and we have filed
or will file copies of these documents at the offices of the trustee and the
paying agent(s).
Aggregate
Principal Amount:
|
[ ]
|
|
|
Issue
Price:
|
[ ]%
|
|
|
Original
Issue Date:
|
[ ]
|
|
|
Maturity
Date:
|
[ ]
|
|
|
Specified
Currency:
|
[ ]
|
|
|
Authorized
Denominations:
|
[ ]
|
|
|
Form:
|
[ ]
|
|
|
Interest
Rate:
|
[Floating/[ ]% per annum/Other]
|
|
|
Interest
Payment Dates:
|
[ ]
|
|
|
Regular
Record Dates:
|
[ ]
|
|
|
Floating
Rate Notes:
|
|
|
|
Base
Rate:
|
LIBOR
|
|
|
|
Commercial Paper Rate
|
|
|
|
Treasury Rate
|
|
|
|
CD Rate
|
|
|
|
Federal Funds Rate
|
|
|
|
Other
|
|
|
Index
Maturity:
|
[ ]
|
|
|
Initial
Interest Rate:
|
[ ]
|
|
|
Spread
(+/-) or Spread Multiplier:
|
[ ]
|
|
|
Interest
Reset Dates:
|
[ ]
|
|
|
Interest
Determination Dates:
|
[ ]
|
|
|
Maximum
Interest Rate:
|
[Specify]
[None;
provided
,
however
, that in no event will the
interest rate be higher than the maximum rate permitted by New York law, as
modified by United States law of general application]
|
|
|
Minimum
Interest Rate:
|
[ ]
|
|
|
Optional
Redemption:
|
o
Yes
o
No
|
|
|
[Initial
Redemption Date:]
|
[ ]
|
|
|
Optional
Repayment:
|
o
Yes
o
No
|
|
|
Indexed
Note:
|
o
Yes
o
No
|
|
|
Foreign
Currency Note:
|
o
Yes
o
No
|
|
|
Purchasers:
|
[ ]
|
A-3
Purchase
Price:
|
[ ]%
|
|
|
[Net
Proceeds, after Commissions, to us:]
|
[ ]
|
|
|
Closing
Date:
|
[ ]
|
|
|
Method
of Payment:
|
[ ]
|
|
|
Listing,
if any:
|
[ ]
|
|
|
Securities
Codes:
|
[ ]
|
|
|
Trustee:
|
The
Bank of New York Mellon Trust Company, N.A.
|
|
|
Paying
Agent:
|
[ ]
|
|
|
[Luxembourg
Paying Agent:]
|
[ ]
|
|
|
Calculation
Agent:
|
[ ]
|
|
|
Exchange
Rate Agent:
|
[ ]
|
|
|
Transfer
Agent:
|
[ ]
|
|
|
Further
Issues:
|
We
may from time to time, without the consent of existing holders, create and
issue further notes having the same terms and conditions as the notes being
offered hereby in all respects, except for the issue date, issue price and,
if applicable, the first payment of interest thereon. Additional notes issued in this manner will
be consolidated with, and will form a single series with, the previously
outstanding notes.
|
|
|
Payment
of Principal and Interest:
|
[ ]
|
|
|
Governing
Law:
|
The
notes will be governed by, and construed in accordance with, New York law,
except that matters relating to the authorization and execution of the notes
by us will be governed by the law of Sweden.
Furthermore, if the notes are at any time secured by property or
assets in Sweden, matters relating to the enforcement of such security will
be governed by the law of Sweden.
|
|
|
Further
Information:
|
[ ]
|
[OTHER]
PLAN OF DISTRIBUTION
[Describe
distribution arrangements, if applicable.] [[All] [A portion] of the Notes will
be sold outside the United States.]
A-4
Prospectus
|
|
|
AKTIEBOLAGET
SVENSK EXPORTKREDIT (PUBL)
(Swedish Export Credit Corporation)
(Incorporated in Sweden with limited liability)
Debt
Securities
Index Warrants
We, Aktiebolaget Svensk Exportkredit (publ), also
known as Swedish Export Credit Corporation, or SEK, may from time to time offer
and sell our debt securities and index warrants in amounts, at prices and on
terms to be determined at the time of sale and provided in supplements to this
prospectus. We may sell debt securities
and index warrants having an unlimited aggregate initial offering price or
aggregate principal amount in the United States. The debt securities will constitute direct,
unconditional and unsecured indebtedness of SEK and will rank equally in right
of payment among themselves and with all our existing and future unsecured and unsubordinated
indebtedness. The debt securities and
the index warrants will not be obligations of the Kingdom of Sweden.
We may sell the debt securities and index warrants
directly, through agents designated from time to time or through
underwriters. The names of any agents or
underwriters will be provided in the applicable prospectus supplement(s).
You should read this prospectus and any supplements
carefully. You should not assume that
the information in this prospectus, any prospectus supplement or any document
incorporated by reference in either of them is accurate as of any date other
than the date on the front of such documents.
The debt securities and index
warrants will be obligations of SEK. No
other company or entity will be responsible for payments under the debt
securities or index warrants.
The debt securities and index
warrants will not be guaranteed by any other company or entity. No other entity or company will be liable to
holders of the debt securities and index warrants in the event SEK defaults
thereunder. The debt securities and
index warrants will not be obligations of, or guaranteed by, the Kingdom of
Sweden or any internal division or agency thereof, and will be subject,
entirely and exclusively, to the credit risk of SEK itself. The value of debt securities and index
warrants may be adversely affected by changes in SEKs credit ratings or credit
spreads applicable to SEKs debt.
Neither the Securities and Exchange
Commission nor any other regulatory body has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is December 15,
2008
ABOUT THIS
PROSPECTUS
This prospectus provides you with a general
description of the debt securities and index warrants we may offer. Each time we sell debt securities and index
warrants, we will provide one or more prospectus supplements (which may include
pricing supplements) that will contain specific information about the terms of
that offering. Such prospectus
supplements (including pricing supplements) may also add, update or change
information contained in this prospectus.
If the information in this prospectus differs from any prospectus
supplement (including any pricing supplement), you should rely on the
information in the prospectus supplement.
You should read both this prospectus and the accompanying prospectus
supplement together with additional information described below under the
heading Where You Can Find More Information.
INCORPORATION
OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to incorporate by reference the
information we file with them. This
means:
·
incorporated
documents are considered part of this prospectus;
·
we
can disclose important information to you by referring you to those documents;
·
information
in this prospectus automatically updates and supersedes information in earlier
documents that are incorporated by reference in this prospectus; and
·
information
that we file with the SEC and which we incorporate by reference in this
prospectus will automatically update and supersede information in this
prospectus.
We incorporate by reference:
·
our
annual report on Form 20-F for the fiscal year ended December 31,
2007, which we filed with the SEC on April 1, 2008 under the Securities
Exchange Act of 1934, except for the report of KPMG AB appearing on page F-1
thereof;
·
Amendment
No. 1 to our annual report on Form 20-F for the fiscal year ended December 31,
2007, which we filed with the SEC on December 12, 2008; and
·
our
reports on Form 6-K, furnished to the SEC on January 22, February 19,
April 9, May 14, July 7, August 15, October 23 and October 31,
2008 under the Securities Exchange Act of 1934 (except for the Auditor Review
Reports contained on pages 21 and 22 of our report on Form 6-K
furnished to the SEC on May 14, 2008, pages 24 and 25 of our report
on Form 6-K furnished to the SEC on August 15, 2008 and page 29
of our report on Form 6-K furnished to the SEC on October 31, 2008, which
Auditor Review Reports shall not be so incorporated by reference).
We also incorporate by reference each of the
following documents that we will file with the SEC after the date of this
prospectus until we terminate the offering:
·
any
report on Form 6-K filed by us pursuant to the Securities Exchange Act of
1934 that indicates on its cover or inside cover page that we will
incorporate it by reference in this prospectus (or any part of any such report
that is indicated on the cover or inside cover page thereof to be
incorporated by reference in this prospectus); and
·
reports
filed under Sections 13(a), 13(c) or 15(d) of the Securities Exchange
Act of 1934.
You may request a copy of any filings referred to
above (excluding exhibits), at no cost, by contacting us at the following
address:
Aktiebolaget Svensk
Exportkredit (publ)
(Swedish Export Credit Corporation)
Västra Trädgårdsgatan 11B
10327 Stockholm, Sweden
Tel: +46-8-613-8300
3
FORWARD-LOOKING
STATEMENTS
The following documents relating to our debt
securities may contain forward-looking statements:
·
this
prospectus;
·
any
prospectus supplement;
·
any
pricing supplement to a prospectus supplement; and
·
the
documents incorporated by reference in this prospectus and any prospectus
supplement or pricing supplement.
Certain of the statements contained in these
documents may be statements of future expectations and other forward-looking
statements that are based on our managements views and assumptions and involve
known and unknown risks and uncertainties that could cause actual results,
performance or events to differ materially from those expressed or implied in
such statements. In addition to
statements, which are forward-looking by reason of context, the words may, will,
should, plan, intend, anticipate, believe, estimate, potential,
or continue and similar expressions identify forward-looking statements. Actual results, performance or events may
differ materially from those expressed in such statements due to, without
limitation:
·
general
economic conditions, including in particular economic conditions and markets,
·
the
performance of financial and commodities markets, as well as of individual
securities and commodities and related indices,
·
interest
rates,
·
currency
exchange rates,
·
changing
levels of competition,
·
changes
in laws and regulations,
·
changes
in the policies of central banks and/or governments, and
·
general
competitive factors,
in
each case on a local, regional, national and/or global basis. We assume no obligation to update any
forward-looking information contained in these documents.
ENFORCEMENT
OF LIABILITIES; SERVICE OF PROCESS
We are a public limited liability company
incorporated in Sweden, and all of our directors and executive officers and the
experts named herein are residents of countries other than the United
States. A substantial portion of our
assets and all or a substantial portion of the assets of such persons are
located outside the United States. As a
result, it may be difficult or impossible for investors to effect service of
process within the United States upon such persons or to realize against them
or us upon judgments of courts of the United States predicated upon civil
liabilities under the U.S. Securities Act of 1933, as amended (the Securities
Act). We have been advised by our
Swedish counsel, Advokatfirman Vinge KB, that there is doubt as to the
enforceability of claims in Sweden in respect of liabilities predicated solely
upon the Securities Act, whether or not such claims are based upon judgments of
United States courts. We have consented
to service of process in The City of New York for claims based upon the
indenture (as discussed below) and the debt securities we may offer.
4
PROSPECTUS
SUMMAR
Y
General
This summary provides you with a brief overview of
key information concerning SEK. This
summary also provides you with a brief summary of the material terms of the
debt securities and index warrants we may offer, to the extent we know these
material terms on the date of this prospectus.
For a more complete understanding of the terms of the offered debt
securities and index warrants, and before making your investment decision, you
should carefully read:
·
this
remainder of this prospectus, which explains the general terms of the debt
securities and index warrants we may offer pursuant to this prospectus;
·
any
prospectus supplement, which (1) explains the specific terms of the debt
securities and index warrants being offered and (2) updates and changes
information in this prospectus; and
·
the
documents referred to below under Where You Can Find More Information.
Swedish Export Credit Corporation
We, Swedish Export Credit Corporation, are a public
stock corporation wholly owned by the Kingdom of Sweden through the Ministry of
Foreign Affairs.
Our objective is to engage in financing activities
that are directly related to Swedish exports of goods and services or otherwise
promote Swedish commerce and industry, especially the export sector, by
providing competitive long-term credit.
We extend credit on commercial terms at prevailing market rates, which
we call the M-system, and on state-supported terms, which we call the S-system.
The following table contains certain of our key
financial figures as of the dates and for the periods specified, as computed
under Swedish generally accepted accounting principles (Swedish GAAP) (in the
case of 2005 figures) and International Financial Reporting Standards as issued
by the International Accounting Standard Board (IFRS) (in the case of 2006
and 2007 figures):
|
|
As of or for the Year Ended December 31,
|
|
|
|
2007(1)
|
|
2006(1)
|
|
2005(2)
|
|
|
|
(in millions of Skr)
|
|
Total assets
|
|
297,259.2
|
|
245,215.1
|
|
207,493.2
|
|
Total
shareholders funds
|
|
4,496.5
|
|
4,250.7
|
|
3,738.7
|
|
Net income(3)
|
|
353.0
|
|
355.5
|
|
346.9
|
|
(1) Presented
in accordance with IFRS.
(2) Presented
in accordance with Swedish GAAP.
(3) Exclusive
of the S-system.
Our principal executive office is located at Västra
Trädgårdsgatan 11B, 10327 Stockholm, Sweden.
Our telephone number is (+46) 8-613-8300.
Recent
Developments
On November 10, 2008, the Swedish government
proposed to the Swedish parliament that the Swedish parliament authorize the
Swedish government to provide up to Skr 3 billion in new equity funding to SEK
and, in connection therewith, to transfer to SEK the Swedish states 100%
equity interest in the consolidated group having the parent company Venantius
AB (such group, Venantius). Such
proposal was approved by the Swedish parliament on November 19, 2008. The
Swedish government then decided, on November 20, 2008 to provide to SEK
Skr 3 billion in new equity financing and to transfer to SEK 100% of its shares
in Venantius.
The Skr 3 billion in new equity is expected to be
paid by the state to SEK before the end of 2008. The entire share capital of Venantius is also
expected to be transferred by the state to SEK before the end of 2008.
Venantius was established by the Swedish state, based
on a parliamentary decision in 1995, as a credit market company, and was
created in order to manage certain housing loans entailing a particularly high
risk of credit losses. In 1996 and 1997, this mandate was broadened, based on
parliamentary decisions, to also encompass certain real-estate-related credits to
municipally-owned housing companies, and assets related to the Swedish states
efforts to strengthen the Swedish banking system in the early 1990s,
respectively. The objective of Venantius has been to responsibly manage the
above-mentioned assets. Since 2007, Venantius has been financed only by its own
equity, i.e., Venantius has had no external borrowing. Consequently, in 2007
Venantius was reclassified from a credit market company to a financial
institution, registered with the Swedish Financial Supervisory Authority,
though not supervised by it.
5
According to Venantius 2007 annual report, prepared
in accordance with Swedish GAAP, which contains the most recent financial
information publicly disclosed by Venantius, as of December 31, 2007,
Venantius had total consolidated equity of Skr 2,783.1 million and total consolidated
provisions and liabilities of Skr 96.4 million, in each case under Swedish GAAP. Assets classified as loans amounted to Skr
1,328.5 million under Swedish GAAP.
According to the proposal for the distribution of profits included in
the same report, an amount of Skr 300 million was proposed to be paid as a
dividend to the (government) shareholder. According to the CEO certification
attached to such report, the shareholder approved this dividend. The actual
impact of the Venantius transaction on SEKs capitalization and financial
condition can only be assessed after the transaction has closed. SEK cannot
provide any assurance that the equity funding provided by the Swedish state
will in fact be provided or that Venantius liabilities will not be larger (or
the amount of its shareholders funds smaller) than those reflected in
Venantius 2007 annual report.
In connection with the foregoing, SEK expects to hold
an extraordinary shareholders meeting on December 17, 2008 to obtain
shareholder approval for a Skr 3 billion capital increase.
Further, on December 4, 2008, the Swedish
government proposed to the Swedish parliament that it authorize the Swedish
government to provide to SEK a liquidity facility amounting to not more than
Skr 100 billion, and to provide to SEK the possibility to purchase state
guarantees for its borrowings. In both cases, SEK would pay a commercial fee.
This proposal reflects the importance to the Swedish
economy of the Swedish export sector. The success of Swedish export industries
is very dependent on access to long-term financing. Under normal circumstances, international banks
play an important role in this financing, together with SEK. The present uncertainty and distress in the
global economy and, particularly, disruptions in the financial and credit
markets, have highlighted the need for immediate and reliable access to funding
for Swedish exporters. SEKs role and mission is to secure access to such
financing.
The purpose of the proposed liquidity facility would
be to increase SEKs capacity to immediately and continually provide financing
for new export credits without contravening SEKs funding and liquidity
policies. The purpose of the proposed
state guarantees would be to make it possible for SEK to provide, in cases when
deemed necessary by SEK, explicit state guarantees for particular borrowings. Such guarantees might be necessary due to
changing behavior in the international capital markets, whereby many bond
issuers, especially banks, are now expected to be supported by different state
guarantee schemes.
Further and as a separate matter, the Swedish
Financial Supervisory Authority determined on December 11, 2008 to amend the
capital adequacy regulations for Swedish financial institutions with immediate
effect. The amendment allows financial institutions to take into account 30
percent (compared with the previous 15 percent) of certain hybrid securities in
Tier-1 capital. The amendment is in line with what is already possible in other
countries within the European Union.
The Debt Securities We May Offer
We may use this prospectus to offer an unlimited
amount of debt securities.
We will issue the debt securities under an indenture,
dated as of August 15, 1991, as supplemented by a first supplemental
indenture dated as of June 2, 2004, a second supplemental indenture dated
as of January 30, 2006 and a third supplemental indenture dated October 23,
2008 (together with the first supplemental indenture and the second
supplemental indenture, the supplemental indentures), each between us and The
Bank of New York Mellon Trust Company, N.A. (directly or as the successor in
interest to another party), which serves as the trustee thereunder. The indenture provides that the debt
securities may be issued at one time, or from time to time, in one or more
series.
The debt securities will be our direct, unconditional
and unsecured obligations and will rank equally with all of our other unsecured
and unsubordinated indebtedness for borrowed money. The debt securities will not be obligations
of Kingdom of Sweden.
The prospectus supplement relating to any series of
debt securities will specify the terms of such debt securities.
General Indenture Provisions that Apply to the Debt
Securities.
·
The
indenture does not limit the amount of debt securities that may be issued
thereunder or under any other debt instrument.
·
The
indenture allows for different types of debt securities, such as fixed rate
securities, floating rate securities and indexed securities, to be issued in
one or more series. The indenture
permits us to issue debt securities in book-entry and certificated form.
·
The
indenture permits us to issue debt securities in currencies other than U.S.
dollars.
·
The
indenture allows us to merge or consolidate with another Swedish company, or
convey all or substantially all of our assets to another Swedish company, so
long as the transaction would not result in an event of default. If any such transaction occurs, the other
company would be required to assume our obligations under the debt securities
and the indenture. We would be released
from all liabilities under the debt securities and the indenture when the other
company assumed our responsibilities.
·
The
indenture permits us to elect to redeem the debt securities of any series upon
the occurrence of a change in Swedish tax law requiring us to withhold amounts
payable on the debt securities in respect of Swedish taxes and, as a result, to
pay additional amounts.
·
The
indenture provides that the holders of a majority of the principal amount of
the debt securities outstanding in any series may vote to change our
obligations or your rights concerning those debt securities. However, changes to the financial terms of a
debt security, including changes to the stated maturity date of any principal
or interest, reductions in the principal amount or rate of interest or changing
the place for payment of interest, cannot be made unless every holder of that
security consents.
·
The
indenture permits us to satisfy our payment obligations under any series of
debt securities at any time by depositing with the trustee sufficient amounts
of cash or U.S. government securities to pay our obligations under such series
when due.
6
Events of Default
The indenture specifies that the following shall
constitute events of default with respect to the debt securities of any series:
·
default
for 30 days in the payment of any interest on any debt security of such series
when due;
·
default
for 15 days in the payment of any principal or premium in respect of any debt
security of such series when due;
·
default
for 15 days in the deposit of any sinking fund payment in respect of any debt
security of such series when due;
·
default
in the performance of any other covenant in the indenture (other than a
covenant expressly included in the indenture solely for the benefit of debt
securities of a series other than such series) that has continued for 30 days
after written notice thereof by the trustee or the holders of 25% in aggregate
principal amount of the outstanding debt securities of such series;
·
default
resulting in the acceleration of the maturity of any of our other indebtedness
for borrowed money having an aggregate principal or face amount in excess of
U.S.$10,000,000; and
·
certain
events of bankruptcy, insolvency or reorganization.
The holders of a majority of the principal amount of
outstanding debt securities of a series may, on behalf of all holders of
outstanding debt securities of such series, waive a past event of default. However, no such waiver is permitted for a
default in payment of principal, premium or interest in respect of any debt security
of such series.
The Index Warrants We May Offer
We may issue index warrants independently or together
with debt securities (including as debt security and index warrant units). We will issue any series of index warrants
under a warrant agreement between SEK, as the issuer, and a bank or trust
company, as the warrant agent. You are
encouraged to read the standard form of the warrant agreement, which is filed
as an exhibit to the registration statement of which this prospectus forms a
part.
Index warrants are securities that, when properly
exercised by the purchaser, entitle the purchaser to receive from SEK an amount
in cash or a number of securities that will be indexed to prices, yields, or
other specified measures or changes in an index or differences between two or
more indices.
The prospectus supplement for a series of index
warrants will describe the formula for determining the amount in cash or number
of securities, if any, that we will pay you when you exercise an index warrant
and will contain information about the relevant underlying assets and other
specific terms of the index warrant.
We will generally issue index warrants in book-entry
form, which means that they will not be evidenced by physical
certificates. Also, we will generally
list index warrants for trading on a national securities exchange, such as the
New York Stock Exchange, the Nasdaq Stock Markets National Market, the
American Stock Exchange or the Chicago Board Options Exchange.
The warrant agreement for any series of index
warrants will provide that holders of a majority of the total amount of the
index warrants outstanding in any series may vote to change their rights
concerning those index warrants (following the proposal of such a change by
SEK). However, changes to fundamental
terms such as the amount or manner of payment on an index warrant or changes to
the exercise times may not be made unless every holder affected consents to the
change.
Any prospective purchasers of index warrants should
be aware of special United States federal income tax considerations applicable
to instruments such as the index warrants.
The prospectus supplement relating to each series of index warrants will
describe the important tax considerations.
We may also issue debt security and index warrant
units consisting of debt securities and index warrants. The applicable prospectus supplement will
describe the terms of any debt security and index warrant units.
Ratios of Earnings to Fixed Charges
The following table shows the ratios of our earnings
to fixed charges (exclusive of the S-system), as computed under Swedish GAAP
(in the case of the 2005, 2004 and 2003 figures) and IFRS (in the case of the
2006 and 2007 figures):
Ratio of Earnings to Fixed Charges(1) for the Year ended December 31,
|
|
2007(2)
|
|
2006(2)
|
|
2005(3)
|
|
2004(3)
|
|
2003(3)
|
|
|
|
|
|
|
|
|
|
|
|
1.05
|
|
1.07
|
|
1.10
|
|
1.14
|
|
1.16
|
|
7
(1)
|
|
For the purpose of calculating ratios of earnings to fixed charges,
earnings consist of net profit for the year, plus taxes and fixed charges.
Fixed charges consist of interest expenses, including borrowing costs,
exclusive of the S-system.
|
(2)
|
|
Presented in accordance with IFRS.
|
(3)
|
|
Presented in accordance with Swedish GAAP.
|
The ratio of earnings to fixed charges, computed in
accordance with IFRS, for the nine months ended September 30, 2008 was
1.07. In 2005, 2004 and 2003, the ratio
of earnings computed in accordance with U.S. generally accepted accounting
principles (U.S. GAAP) differed from the Swedish GAAP figure presented
above. The U.S. GAAP figures were 0.59,
1.34 and 1.22 in 2005, 2004 and 2003, respectively. In 2005, under U.S. GAAP, Earnings are
inadequate to cover fixed charges by Skr 2,120.1 million.
8
USE OF PROCEEDS
Unless otherwise specified in a prospectus
supplement, we will use the net proceeds from the sale of debt securities for
general business purposes.
CAPITALIZATION
The following table sets out our unaudited
consolidated capitalization as of September 30, 2008, and as adjusted as
of October 31, 2008 to reflect securities issued during the month of October. This table should be read in conjunction with
the financial statements referred to elsewhere in this document.
|
|
As of
September 30, 2008
|
|
Adjusted as
of October
31, 2008(1)(2)
|
|
|
|
(Skr millions)
|
|
(Skr millions)
|
|
Senior debt:
|
|
|
|
|
|
Long-term
|
|
192,671.3
|
|
198,460.1
|
|
Short-term
|
|
88,935.5
|
|
114,841.5
|
|
Total senior
debt(3)(4)
|
|
281,606.8
|
|
313,301.6
|
|
Subordinated
debt:
|
|
|
|
|
|
Long-term
|
|
3,312.3
|
|
3,312.3
|
|
Short-term
|
|
|
|
|
|
Total
subordinated debt(3)(4)
|
|
3,312.3
|
|
3,312.3
|
|
Equity:
|
|
|
|
|
|
Non-distributable
capital:
|
|
|
|
|
|
Share
capital(5) (990,000 shares issued and paid-up, par value Skr 1,000 made
up of 640,000 Class A shares and 350,000 Class B shares)
|
|
990.0
|
|
990.0
|
|
Fair value
reserves
|
|
(208.2
|
)
|
(208.2
|
)
|
Total
non-distributable capital
|
|
781.8
|
|
781.8
|
|
Distributable
capital:
|
|
|
|
|
|
Retained
earnings
|
|
3,675.0
|
|
3,675.0
|
|
Net profit for
the period
|
|
392.0
|
|
392.0
|
|
Total
distributable capital
|
|
4,067.0
|
|
4,067.0
|
|
Total equity
|
|
4,848.8
|
|
4,848.8
|
|
Total
capitalization (sum of senior debt, subordinated debt and equity)
|
|
289,767.9
|
|
321,462.7
|
|
(1)
|
|
Between October 1 and October 31, 2008, SEK issued new
short-term senior securities in an aggregate principal amount of Skr 25,906.0
million and new long-term senior securities in an aggregate principal amount
of Skr 5,788.8 million. No subordinated securities were issued and no other
financial debt was incurred between October 1 and October 31, 2008.
The table has not been adjusted to reflect the retirement or amortization of
any debt between September 30, 2008 and October 31, 2008. Nor has equity been
adjusted to show changes between September 30, 2008 and October 31, 2008.
|
|
|
|
(2)
|
|
On November 10, 2008, the Swedish government proposed to the
Swedish parliament that the Swedish parliament authorize the Swedish
government to provide up to Skr 3 billion in new equity funding to SEK and,
in connection therewith, to transfer to SEK the Swedish states 100% equity
interest in the consolidated group having the parent company Venantius AB
(such group, Venantius). Such proposal was approved by the Swedish
parliament on November 19, 2008. The Swedish government then decided, on
November 20, 2008 to provide to SEK Skr 3 billion in new equity
financing and to transfer to SEK 100% of its shares in Venantius. The Skr 3
billion in new equity is expected to be paid by the state to SEK before the
end of 2008. The entire share capital of Venantius is also expected to be
transferred by the state to SEK before the end of 2008. Venantius was
established by the Swedish state, based on a parliamentary decision in 1995,
as a credit market company, and was created in order to manage certain
housing loans entailing a particularly high risk of credit losses. In 1996
and 1997, this mandate was broadened, based on parliamentary decisions, to
also encompass certain real-estate-related credits to municipally-owned
housing companies, and assets related to the Swedish states efforts to
strengthen the Swedish banking system in the early 1990s, respectively. The
objective of Venantius has been to responsibly manage the above-mentioned
assets. Since 2007, Venantius has been financed only by its own equity, i.e.,
Venantius has had no external borrowing. Consequently, in 2007 Venantius was
reclassified from a credit market company to a financial institution,
registered with the Swedish Financial Supervisory Authority, though not
supervised by it. According to Venantius 2007 annual report, prepared in
accordance with Swedish GAAP, which
contains the most recent financial information publicly disclosed by
Venantius, as of December 31, 2007, Venantius had total consolidated equity
of Skr 2,783.1 million and total consolidated provisions and liabilities of
Skr 96.4 million, in each case under Swedish GAAP. Assets classified as loans
amounted to Skr 1,328.5 million under Swedish GAAP. According to the proposal
for the distribution of profits included in the same report, an amount of Skr
300 million was proposed to be paid as a dividend to the (government)
shareholder. According to the CEO certification attached to such report, the
shareholder approved this dividend. The actual impact of the Venantius
transaction on SEKs capitalization and financial condition can only be
assessed after the transaction has closed. SEK cannot provide any assurance
that the equity funding provided by the Swedish state will in fact be
provided or that Venantius liabilities will not be larger (or the amount of
its shareholders funds smaller) than those reflected in Venantius 2007
annual report. In connection with the foregoing, SEK expects to hold an
extraordinary shareholders meeting on December 17, 2008 to obtain
shareholder approval for a Skr 3 billion capital increase.
|
|
|
|
(3)
|
|
At September 30, 2008, our consolidated group had no contingent
liabilities. Other than that disclosed herein, we had no other indebtedness
as at September 30, 2008.
|
|
|
|
(4)
|
|
Unguaranteed and unsecured.
|
|
|
|
(5)
|
|
In accordance with our Articles of Association, SEKs share capital
shall be neither less than Skr 700 million nor more than Skr 2,800 million.
|
Except for such matters as are disclosed or referred
to in the footnotes to the table above, there has been no material change in SEKs
capitalization, indebtedness, contingent liabilities and guarantees since September 30,
2008.
9
DESCRIPTION
OF DEBT SECURITIES
The following description of the terms of the debt
securities sets forth certain general terms and provisions of the debt
securities to which any prospectus supplement may relate. The particular terms of the debt securities
offered by any prospectus supplement and the extent, if any, to which the
following general provisions may apply to the debt securities so offered will
be described in the prospectus supplement relating to such debt securities.
The debt securities will be issued under an
indenture, dated as of August 15, 1991, as supplemented by a first
supplemental indenture dated as of June 2, 2004 a second supplemental
indenture dated as of January 30, 2006 and a third supplemental indenture
dated as of October 23, 2008 (together with the first supplemental
indenture and the second supplemental indenture, the supplemental
indentures), each between us and The Bank of New York Mellon Trust Company,
N.A. (directly or as the successor in interest to another party), which serves
as the trustee thereunder. We have filed
the indenture and each of the supplemental indentures as exhibits to, or
incorporated them by reference in, the registration statement. The statements under this caption include
brief summaries of the material provisions of the indenture as supplemented do
not purport to be complete and are subject to, and qualified in their entirety
by reference to, all of the provisions of the indenture and the supplemental
indentures including the definitions in those documents of certain terms. Numerical references in parentheses below are
to sections of the indenture. Whenever
we refer in this document or in a prospectus supplement to particular sections
of, or defined terms in, the indenture, we intend to incorporate by reference
such sections or defined terms.
General
The debt securities offered by this prospectus will
be in an unlimited aggregate amount or initial public offering price or
purchase price. The indenture provides
that we may issue debt securities in an unlimited amount thereunder from time
to time in one or more series. We may
originally issue the debt securities of a series all at one time or from time
to time and, unless otherwise provided, we may reopen any outstanding series
of debt securities from time to time to issue additional debt securities of
such series.
(Section 301)
The debt securities will rank equally with all of our
other unsecured and unsubordinated indebtedness for borrowed money.
(Section 1011)
We refer you to the prospectus supplement relating to any particular series of
debt securities for the terms of such debt securities, including, where
applicable:
(i)
the designation and maximum aggregate
principal or face amount, if any, of such debt securities;
(ii)
the price (expressed as a percentage of the
aggregate principal or face amount thereof) at which we will issue such debt
securities;
(iii)
the date or dates on which such debt
securities will mature;
(iv)
the currency or currencies in which we are
selling such debt securities and in which we will make payments of any
principal, premium or interest in respect of such debt securities, and whether
the holder of any such debt security may elect the currency in which such
payments are to be made and, if so, the manner of such election;
(v)
the rate or rates (which may be fixed,
variable or zero) at which such debt securities will bear interest, if any;
(vi)
the date or dates from which any interest on
such debt securities will accrue, the date or dates on which such interest will
be payable and the date or dates on which payment of such interest will
commence;
(vii)
our obligation, if any, to redeem, repay or
purchase such debt securities, in whole or in part, pursuant to any sinking
fund or analogous provisions or at the option of a holder of debt securities,
and the periods within which or the dates on which, the prices at which and the
terms and conditions upon which such debt securities shall be redeemed, repaid
or purchased, in whole or in part, pursuant to such obligation;
(viii)
the periods within which or the dates on
which, the prices at which and the terms and conditions upon which such debt
securities may be redeemed, if any, in whole or in part, at our option or
otherwise;
(ix)
whether we will issue such debt securities in
whole or in part in the form of one or more global securities and, if so, the
identity of the depository for such global security or securities and the terms
and conditions, if any, upon which you may exchange interests in such global
security or securities in whole or in part for individual debt securities;
(x)
whether we will issue any such debt securities
as indexed securities (as defined below) and, if so, the manner in which the
principal (or face amount) thereof or interest thereon or both, as the case may
be, shall be determined, and any other terms in respect thereof;
(xi)
whether we will issue any such debt securities
as discount securities (as defined below) and, if so, the portion of the
principal amount thereof that shall be due and payable upon a declaration of
acceleration of the maturity thereof in respect of the occurrence of an event
of default and the continuation thereof;
10
(xii)
any additional restrictive covenants or events
of default provided with respect to such debt securities; and any other terms
of such debt securities.
(Section 301)
We may issue debt securities of a series in whole or
in part in the form of one or more global securities, as described below under
Global Securities.
If we are required to pay any principal, premium or
interest in respect of debt securities of any series in a currency other than
U.S. dollars or in a composite currency, we will describe the restrictions,
elections, federal income tax consequences, specific terms and other
information with respect to such debt securities and such currency in the
prospectus supplement relating thereto.
We use the term discount security to mean any debt
security (other than a principal indexed security) that provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the maturity thereof in respect of the occurrence of an
event of default and the continuation thereof.
(Section 101)
We will
describe the United Stated federal income tax consequences and other special
considerations applicable to any discount securities in the prospectus
supplement relating thereto.
Unless otherwise specified in the applicable
prospectus supplement, we use the term indexed security to mean any debt
security that provides that the amount of principal (a principal-indexed
security) or interest (an interest-indexed security), or both, payable in
respect thereof shall be determined by reference to an index based on a
currency or currencies or on the price or prices of one or more commodities or
securities, by reference to changes in the price or prices of one or more
currencies, commodities or securities or otherwise by application of a formula.
(Section 101)
We will describe the United States federal income tax consequences and other
special considerations with respect to any indexed securities in the prospectus
supplement relating thereto.
Unless the prospectus supplement relating thereto
specifies otherwise, we will issue any registered securities denominated in
U.S. dollars only in denominations of U.S.$1,000 or integral multiples
thereof. We will issue one or more
global securities in a denomination or aggregate denominations equal to the
aggregate principal or face amount of the outstanding debt securities of the
series to be represented by such global security or securities.
(Sections
302 and 303)
Exchanges and Transfers
At the option of the holder thereof upon request,
confirmed in writing, and subject to the terms of the indenture, registered
securities of any series (other than a global security, except as set forth
below) will be exchangeable into an equal aggregate principal amount (or, in
the case of any principal indexed security, face amount) of registered
securities of such series of like tenor, but with different authorized
denominations (unless otherwise specified in the applicable prospectus
supplement or related pricing supplement).
Holders may present registered securities for exchange, and may present
registered securities (other than a global security, except as provided below)
for transfer (with the form of transfer endorsed thereon duly executed), at the
office of the security registrar or any transfer agent or other agency we
designate for such purpose, without service charge and upon payment of any
taxes and other governmental charges as described in the indenture. The transfer or exchange will be effected
when we and the security registrar or the transfer or other agent are satisfied
with the documents of title and identity of the person making the request. We have appointed the trustee as the initial
security registrar. (Section 305)
In the event of any redemption in part of the
registered securities of any series, we shall not be required:
·
during
the period beginning at the opening of business 15 days before the day on which
notice of such redemption is mailed and ending at the close of business on the
day of such mailing, to issue, register the transfer of or exchange any registered
security of such series having the same original issue date and terms as the
registered securities called for redemption, or
·
to
register the transfer of or exchange any registered security, or portion
thereof, called for redemption, except the unredeemed portion of any registered
security we are redeeming in part.
(Section 305)
Global Securities
We may issue the debt securities of a series in whole
or in part in the form of one or more global securities that we will deposit
with, or on behalf of, a depositary identified in the prospectus supplement
relating to such series. We may issue
global securities in registered form and in either temporary or definitive
form. Unless and until it is exchanged
in whole or in part for individual debt securities, a global security may not
be transferred except as a whole by the depository for such global security to
a nominee of such depository or by a nominee of such depository to such
depository or another nominee of such depository or by such depository or any
such nominee to a successor of such depository or a nominee of such
successor.
(Sections 303 and 305)
We will describe the specific terms of the depository
arrangement with respect to the debt securities of any series in the prospectus
supplement relating to such series. We
anticipate that provisions similar to the following will apply to such
depository arrangements:
·
Upon
the issuance of a global security, the depository for such global security will
credit, on its book-entry registration and transfer system, the respective
principal amounts (or, in the case of principal indexed securities, face
amounts) of the debt securities represented by such global security to the
accounts of institutions that have accounts with such depository (participants).
·
The
accounts to be credited shall be designated by the underwriters or agents with
respect to such debt securities, or by us if we offer and sell such debt
securities directly. Only participants
or persons that hold interests through participants will own
11
beneficial interests in a global security. Ownership of beneficial interests in a global
security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by participants or persons that hold through
participants. The laws of some states
require that certain purchasers of securities take physical delivery of such
securities. These laws and limitations
on ownership may impair the ability to transfer beneficial interests in a
global security.
·
So
long as the depository for a global security, or its nominee, is the owner of
such global security, such depository or such nominee, as the case may be, will
be considered the sole owner or holder of the individual debt securities
represented by such global security for all purposes under the indenture. Except as set forth below, owners of
beneficial interests in a global security will not be entitled to have any of
the individual debt securities represented by such global security registered
in their names, will not receive or be entitled to receive physical delivery of
any such individual debt securities and will not be considered the owners or
holders thereof under the indenture.
(Section 305)
·
Subject
to any restrictions that may be set forth in the applicable prospectus
supplement, any principal, premium or interest payable in respect of debt
securities registered in the name of or held by a depository or its nominee
will be paid to the depository or its nominee, as the case may be, as the
registered owner or holder of the global security representing such debt
securities.
·
None
of the trustee for such debt securities, any paying agent, the security
registrar for such debt securities or us will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in any global security representing such debt
securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
(Section 308)
·
We
expect that the depository for debt securities of a series, upon receipt of any
payment of principal, premium or interest in respect of a definitive global
security, will immediately credit participants accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such global security as shown on the records of such depository. We also expect that payments by participants
to owners of beneficial interests in such global security held through such participants
will be governed by standing instructions and customary practices, and will be
the responsibility of such participants.
Receipt by owners of beneficial interests in a temporary global security
of payments in respect of such temporary global security may be subject to
restrictions. We will describe any such
restrictions in the applicable prospectus supplement.
·
If
the depository for debt securities of a series is at any time unwilling or
unable to continue as depository and we do not appoint a successor depository
within ninety days, we will issue individual debt securities of such series in
exchange for the global security or securities representing such debt
securities. In addition, we may at any
time and in our sole discretion determine that debt securities of a series
issued in whole or in part in the form of one or more global securities shall
no longer be represented by such global security or securities and, in such
event, we will issue individual debt securities of such series in exchange for
the global security or securities representing such debt securities. In any such instance, an owner of a
beneficial interest in a global security will be entitled to physical delivery
of individual debt securities of the series represented by such global security
equal in aggregate principal amount (or in the case of any principal-indexed
securities, face amount) to such beneficial interest and, if the debt
securities of such series are issuable as registered securities, to have such
debt securities registered in its name.
If the debt securities of such series are issuable as registered
securities, then we will issue individual debt securities of such series as
described in the foregoing sentence. Any
such individual debt securities will be issued as registered securities in
denominations, unless we otherwise specify, of U.S.$ 1,000 and integral
multiples thereof.
(Sections 302 and 305)
Payment and Paying Agents
We will make payment of any principal or premium in
respect of registered securities against surrender of such registered
securities at the office of the trustee or its designee in the Borough of
Manhattan, The City of New York. Unless
otherwise indicated in the applicable prospectus supplement, we will make
payment of any installment of interest on any registered security to the person
in whose name such registered security is registered (which, in the case of a
global security, will be the depository or its nominee) at the close of
business on the regular record date for such interest payment;
provided, however,
that any interest
payable at maturity will be paid to the person to whom any principal is
paid. Unless otherwise specified in the
applicable prospectus supplement, payments in respect of registered securities
will be made in the currency designated for payment at the office of such
paying agent or paying agents as we may appoint from time to time, except that
any such payment may be made by check mailed to the address of the person
entitled thereto as it appears in the security register, by wire transfer to an
account designated by such person or by any other means acceptable to the
trustee and specified in the applicable prospectus supplement.
(Section 307)
Unless otherwise specified in the applicable
prospectus supplement, we will appoint the office of the trustee or its
designee in the Borough of Manhattan, The City of New York, as our sole paying
agent for payments in respect of the debt securities of any series that are
issuable solely as registered securities.
Any other paying agent we initially appoint for the debt securities of a
series will be named in the applicable prospectus supplement. We may at any time designate additional
paying agents or terminate the appointment of any paying agent or approve a
change in the office through which any paying agent acts, except that we will
maintain at least one paying agent in the Borough of Manhattan, The City of New
York, for payments in respect of registered securities.
(Section 1002)
Any payment we are required to make in respect of a
debt security at any place of payment on a date that is not a business day need
not be made at such place of payment on such date, but may be made on the first
succeeding business day with the same force and effect as if made on such date,
and no additional interest shall accrue as a result of such delayed
payment.
(Section 113)
Unless otherwise specified in the applicable
prospectus supplement, we use the term business day with respect to any place
of payment or other location, each Monday, Tuesday, Wednesday, Thursday and
Friday that is a day on which commercial banks in such place of payment or
other location are generally open for business or, when used with respect to
any Place of Payment with respect to any Debt Securities
12
denominated
in Euro, means any date on which the Trans-European Automated Gross Settlement
Express Transfer System (TARGET) is operating credit or transfer instructions
in respect of payments in Euro.
(Section 101)
All moneys we pay to a paying agent for the payment
of any principal, premium or interest in respect of any debt security that
remain unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will be repaid to us, and the holder
of such debt security will thereafter look only to us for payment thereof.
(Section 1003)
We will make any payments of principal, premium or
interest in respect of any debt security without deduction or withholding for
or on account of any present or future taxes, assessments or other governmental
charges imposed on such debt security or the holder thereof, or by reason of
the making of any such payment, by Sweden or any political subdivision or
taxing authority thereof or therein.
Unless otherwise specified in the applicable prospectus supplement, if
we are required by law to make any such deduction or withholding, we will pay
such additional amounts as may be necessary so that every net payment in
respect of such debt security paid to the holder thereof will not be less than
the amount provided for in such debt security and in the indenture, to be then
due and payable;
provided
that:
·
such holder is not otherwise liable to
taxation in Sweden in respect of such payment by reason of any relationship
with or activity within Sweden other than his ownership of such debt security
or his receiving payment in respect thereof; and
·
no such additional amount will be paid:
·
with respect to any debt security if the
holder thereof is able to avoid such withholding by making a declaration of
non-residence or other similar claim for exemption to the relevant tax
authority, or
·
where the withholding or deduction is imposed
on a payment to an individual and is required to be made pursuant to the
European Union Directive on the taxation of savings adopted June 3, 2003
(implementing the conclusions of the Economics and Financial Council meeting of
November 26-27, 2000) or any law implementing or complying with, or
introduced in order to conform to, such Directive. (Section 1007)
Negative Pledge
So long as any debt securities are outstanding, we
will not and will not permit any Subsidiary (as defined in the indenture) to
secure or allow to be secured any indebtedness for money borrowed now or
hereafter existing by any mortgage, lien (other than a lien arising by
operation of law), pledge, charge or other encumbrance upon any of our or any
Subsidiarys present or future revenues or assets (except for any mortgage,
lien, pledge, charge or other encumbrance on property purchased by us or any
Subsidiary as security for all or part of the purchase price thereof) without
at the same time affording the debt securities the same or equivalent security
therefor.
(Section 1010)
Consolidation, Merger and Transfer
of Assets
We may not consolidate with or merge into, or convey,
transfer or lease our properties and assets substantially as an entirety to,
any person, and may not permit any person to consolidate with or merge into, or
convey, transfer or lease its properties and assets substantially as an
entirety to, us, unless:
(i)
in the event that we consolidate with or merge
into, or convey, transfer or lease our properties and assets substantially as
an entirety to, any person, such person is a corporation organized and existing
under the laws of Sweden and such person expressly assumes our obligations on
the debt securities and under the indenture;
(ii)
immediately after giving effect to the
transaction, no event of default and no event that, after notice or lapse of
time or both, would become an event of default shall have occurred and be
continuing; and
(iii)
certain other conditions are met.
(Section 801)
Modification of the Indenture
The indenture permits us and the trustee, with the
consent of the holders of not less than a majority in principal amount (or, in
the case of any principal-indexed security, face amount) of the outstanding
debt securities affected thereby, to execute a supplemental indenture modifying
the indenture or the rights of the holders of such debt securities;
provided
that no such modification shall,
without the consent of the holder of each debt security affected thereby:
·
change the stated maturity of any principal or
interest in respect of any debt security, or reduce the principal amount (or,
in the case of any principal-indexed security, face amount) thereof, or reduce
the rate or change the time of payment of any interest thereon, or change the
manner in which the amount of any payment of any principal, premium or interest
in respect of any indexed security is determined, or change any place of
payment or change the currency in which a debt security is payable or affect
the right of any holder to institute suit for the enforcement of payment in
accordance with the foregoing; or
·
reduce the aforesaid percentage of principal
amount (or, in the case of any principal-indexed security, face amount) of debt
securities, the consent of the holders of which is required for any such
modification.
(Section 902)
13
Events of Default
The indenture provides that the following
shall constitute events of default with respect to the debt securities of any
series:
(i)
default for 30 days in the payment of any
interest on any debt security of such series when due;
(ii)
default for 15 days in the payment of any
principal or premium in respect of any debt security of such series when due;
(iii)
default for 15 days in the deposit of any
sinking fund payment in respect of any debt security of such series when due;
(iv)
default in the performance of any other
covenant in the indenture (other than a covenant expressly included in the
indenture solely for the benefit of debt securities of a series other than such
series) that has continued for 30 days after written notice thereof by the
trustee or the holders of 25% in aggregate principal amount (or, in the case of
any principal indexed security, face amount) of the outstanding debt securities
of such series;
(v)
default resulting in the acceleration of the
maturity of any of our other indebtedness for borrowed money having an
aggregate principal or face amount in excess of U.S.$ 10,000,000; and
(vi)
certain events of bankruptcy, insolvency or
reorganization.
(Section 501)
We are required to file with the trustee
annually a certificate of our principal executive officer, principal financial
officer or principal accounting officer stating whether we have complied with
all conditions and covenants under the indenture.
(Section 1008)
The indenture provides that if an event of
default with respect to the debt securities of any series at the time
outstanding shall occur and be continuing, either the trustee or the holders of
25% in aggregate principal amount (or, in the case of any principal-indexed security,
face amount) of the outstanding debt securities of such series may declare the
principal amount (or, in the case of any discount securities or indexed
securities, such portion of the principal amount thereof as may be specified in
the terms thereof) of all such debt securities together with any accrued but
unpaid interest, to be due and payable immediately.
(Section 502)
In certain cases, the holders of a majority in aggregate principal amount (or,
in the case of any principal-indexed security, face amount) of the outstanding
debt securities of any series may, on behalf of the holders of all such debt
securities, waive any past default or event of default, with certain
exceptions, including for any default not previously cured in payment of any
principal, premium or interest in respect of the debt securities of such
series.
(Sections
502 and 513)
The indenture contains a provision entitling
the trustee, subject to the duty of the trustee during default to act with the
required standard of care, to be indemnified by the holders of the debt
securities of any series before proceeding to exercise any right or power under
the indenture with respect to such series at the request of such holders.
(Section 603)
The indenture provides that no holder of any debt security of any series may
institute any proceeding, judicial or otherwise, to enforce the indenture,
except in the case of failure of the trustee, for 60 days, to act after the
trustee is given notice of default, a request to enforce the indenture by the
holders of not less than 25% in aggregate principal amount (or, in the case of
any principal-indexed security, face amount) of the then outstanding debt
securities of such series and an offer of reasonable indemnity to such trustee.
(Section 507)
This provision will not prevent any holder of debt securities from enforcing
payment of any principal, premium or interest in respect thereof at the
respective due dates for such payments.
(Section 508)
The holders of a
majority in aggregate principal amount (or, in the case of any
principal-indexed security, face amount) of the outstanding debt securities of
any series may direct the time, method and place of conducting any proceedings
for any remedy available to the trustee or exercising any trust or power conferred
on the trustee with respect to the debt securities of such series. However, the trustee may refuse to follow any
direction that conflicts with law or the indenture, or which would be unjustly
prejudicial to holders not joining in such action.
(Section 512)
The indenture provides that the trustee will,
within 90 days after the occurrence of a default with respect to the debt
securities of any series known to the trustee, give to the holders of debt
securities of such series notice of such default if not cured or waived, but,
except in the case of a default in the payment of any principal, premium or
interest in respect of any debt securities, the trustee may withhold such
notice if it determines in good faith that withholding such notice is in the interests
of the holders of such debt securities.
(Section 602)
Defeasance
If so specified in the prospectus supplement
relating to the debt securities of any series, we may terminate certain of our
obligations under the indenture with respect to all or a portion of such debt
securities, on the terms and subject to the conditions contained in the
indenture, by depositing in trust with the trustee money or U.S. government
securities sufficient to pay any principal, premium or interest in respect of
such debt securities to stated maturity.
It is a condition to such deposit and termination that we deliver:
(i)
an opinion of independent United States tax
counsel that the holders of such debt securities will have no United States
federal income tax consequences as a result of such deposit and termination;
and
(ii)
if such debt securities are then listed on any
national securities exchange, an opinion of counsel that such debt securities
will not be delisted as a result of the exercise of this option.
14
Such termination will not relieve us of our
obligation to pay when due any principal, premium or interest in respect of
such debt securities if such debt securities are not paid from the cash or U.S.
government securities held by the trustee for the payment thereof.
(Section 1301)
Optional Redemption Due to Change in
Swedish Tax Treatment
In addition to any redemption provisions that
may be specified in the prospectus supplement relating to the debt securities
of any series, if, at any time subsequent to the issuance of debt securities of
any series, any tax, assessment or other governmental charge shall be imposed
by Sweden or any political subdivision or taxing authority thereof or therein,
as a result of which we shall become obligated under the indenture to pay any
additional amount in respect of any debt security of such series (the
determination as to whether payment of such additional amount would be required
on account of such debt security being made by us on the basis of the evidence
in our possession in respect of the interest payment date or other payment date
immediately preceding the date of such determination and on the basis of the
treaties and laws in effect on the date of such determination or, if we so
elect, those to become effective on or before the first succeeding interest
payment date or other payment date), then we shall have the option to redeem
such debt security and all other debt securities of such series having the same
original issue date and terms as such debt security, as a whole, at any time
(except that debt securities that bear interest at a floating rate shall only
be redeemable on an interest payment date).
Any such redemption shall be at a redemption price equal to 100% of the
principal amount thereof, together with accrued interest, if any, to the
redemption date (except in the case of discount securities and indexed
securities, which may be redeemed at the redemption price specified in such
securities);
provided, however,
that at the time notice of any such redemption is given, our obligation to pay
such additional amount shall remain in effect.
(Section 1108)
Governing Law
The indenture, the supplemental indentures and
the debt securities will be governed by, and construed in accordance with, the
law of the State of New York, except that matters relating to our authorization
and execution of the indenture, the supplemental indentures and the debt
securities shall be governed by the law of Sweden. If the debt securities are at any time
secured by property or assets in Sweden, matters relating to such security and
the enforcement thereof in Sweden, shall be governed by the law of Sweden.
(Section 112)
Consent To Service
Under the Indenture, we have irrevocably
designated the Consulate General of Sweden in The City of New York as our
authorized agent under the indenture for service of process in any legal action
or proceeding arising out of or relating to the indenture, the supplemental
indentures, the debt securities, the index warrants or any warrant agreement
brought in any federal or State court in The City of New York. Under the Indenture, we have irrevocably
submitted to the jurisdiction of such courts in any such action or proceeding.
(Section 115)
Other Relationships with the Trustee
We maintain banking relationships in the
ordinary course of business with the trustee.
Note Regarding Foreign Currencies
Notwithstanding any other provision of the
indenture, (i) other than with respect to bearer securities, holders
requesting or receiving payments in any currency other than U.S. dollars for
any reason must provide wire transfer instructions to the trustee for an
account in the relevant currency not less than 15 calendar days prior to the
first relevant date of payment, and (ii) we must consult with the trustee
regarding the appropriateness of any exchange rate agent and/or paying agent
for each series of debt securities denominated in, or subject to redenomination
into, a currency other than U.S. dollars.
15
DESCRIPTION
OF INDEX WARRANTS
The following briefly summarizes the material
terms and provisions of the index warrants, other than pricing and related
terms to be disclosed in one or more prospectus supplements. You should read the particular terms of the
index warrants that are offered by SEK, which will be described in more detail
in such supplements. The prospectus
supplements will also state whether any of the general provisions summarized
below do not apply to any particular index warrants being offered.
Index warrants may be issued independently or
together with debt securities and may be attached to or separate from any such
offered securities. Each series of index
warrants will be issued under a warrant agreement to be entered into between
SEK, as the issuer, and a bank or trust company, as the warrant agent. A single bank or trust company may act as
warrant agent for more than one series of index warrants. Each warrant agent will act solely as the
agent of SEK under the applicable warrant agreement and will not assume any
obligation or relationship of agency or trust for or with any owners of the
index warrants. A copy of the form of
warrant agreement, including the form of global certificate that may represent
the index warrants of any series, is filed as an exhibit to the registration
statement of which this prospectus forms a part. You should read the more detailed provisions
of the form of warrant agreement and the index warrant certificate for provisions
that may be important to you.
General
The form of warrant agreement does not limit
the number of index warrants that may be issued. SEK will have the right to reopen an
existing series of index warrants by issuing additional index warrants of the
series.
Each index warrant will entitle the warrant
holder to receive cash or securities from SEK upon exercise. The amount in cash or number of securities
will be determined by referring to an index or formula calculated on the basis
of prices, yields, levels or other specified objective measures in respect of:
·
specified securities or securities indices;
·
specified foreign currencies or currency
indices;
·
intangibles;
·
articles or goods;
·
any other financial, economic or other measure
or instrument, including the occurrence or non-occurrence of any event or
circumstance;
·
a combination thereof; or
·
changes in such measure or differences between
two or more such measures.
The prospectus supplement for a series of
index warrants will describe the formula or methodology to be applied to the
relevant index, indices, intangibles, articles, goods or other measures or
instruments to determine the amount payable or distributable on the index
warrants.
If so specified in connection with a
particular offering of index warrants, the index warrants will entitle the
warrant holder to receive from SEK a minimum or maximum amount upon automatic
exercise at expiration or the happening of any other event described in the
prospectus supplement.
Unless otherwise specified in connection with
a particular offering of index warrants, the index warrants will be deemed to
be automatically exercised upon expiration.
Upon an automatic exercise, warrant holders will be entitled to receive
the cash amount or number of securities due, if any, on an exercise of the
index warrants.
You should read the prospectus supplement
applicable to any series of index warrants for any circumstances in which the
payment or distribution or the determination of the payment or distribution on
the index warrants may be postponed or exercised early or cancelled. The amount due after any such delay or
postponement, or early exercise or cancellation, will be described in the
applicable prospectus supplement.
Unless otherwise specified in connection with
a particular offering of index warrants, we will not purchase or take delivery
of or sell or deliver any securities or currencies, including the underlying
assets, other than the payment of any cash or distribution of any securities
due on the index warrants, from or to warrant holders pursuant to the index
warrants.
The applicable prospectus supplement relating
to any series of index warrants will describe the following:
·
the aggregate number of index warrants;
·
the offering price of the index warrants;
·
the measure or measures by which payment or
distribution on the index warrants will be determined;
·
certain information regarding the underlying
securities, foreign currencies, indices, intangibles, articles or good or other
measure or instrument;
16
·
the amount of cash or number of securities
due, or the means by which the amount of cash or number of securities due may
be calculated, on exercise of the index warrants, including automatic exercise,
or upon cancellation, as well as the means of delivery of such cash or
securities to warrant holders;
·
the date on which the index warrants may first
be exercised and the date on which they expire;
·
any minimum number of index warrants
exercisable at any one time;
·
any maximum number of index warrants that may,
at SEKs election, be exercised by all warrant holders or by any person or
entity on any day;
·
any provisions permitting a warrant holder to
condition an exercise of index warrants;
·
the method by which the index warrants may be
exercised;
·
the formula for determining the cash
settlement value of each index warrant;
·
the currency in which the index warrants will
be denominated and in which payments on the index warrants will be made or the
securities that may be distributed in respect of the index warrants;
·
the method of making any foreign currency
translation applicable to payments or distributions on the index warrants;
·
the method of providing for a substitute index
or indices or otherwise determining the amount payable in connection with the
exercise of index warrants if an index changes or is no longer available;
·
the time or times at which amounts will be
payable or distributable in respect of the index warrants following exercise or
automatic exercise;
·
any national securities exchange on which, or
self-regulatory organization with which, the index warrants will be listed;
·
any provisions for issuing the index warrants
in certificated form;
·
if the index warrants are not issued in
book-entry form, the place or places at, and the procedures by which, payments
or distributions on the index warrants will be made; and
·
any other terms of such index warrants.
Prospective purchasers of index warrants
should be aware of special United States federal income tax considerations
applicable to instruments such as the index warrants. The prospectus supplement relating to each
series of index warrants will describe these tax considerations. The summary of United States federal income
tax considerations contained in the prospectus supplement will be presented for
informational purposes only, however, and will not be intended as legal or tax
advice to prospective purchasers. You
are urged to consult your tax advisors before purchasing any index warrants.
Listing
Unless otherwise specified in connection with
a particular offering of index warrants, the index warrants will be listed on a
national securities exchange or with a self-regulatory organization, in each
case as specified in the prospectus supplement.
It is expected that such organization will stop trading a series of
index warrants as of the close of business on the related expiration date of
those index warrants.
Modification
Each applicable warrant agreement and the
terms of the related index warrants may be amended by SEK and the warrant
agent, without the consent of the holders of any index warrants, for any of the
following purposes:
·
curing any ambiguity or curing, correcting or
supplementing any defective or inconsistent provision;
·
maintaining the listing of the index warrants
on any national securities exchange or with any other self-regulatory
organization;
·
registering the index warrants under the U.S.
Securities Exchange Act of 1934;
·
permitting the issuance of individual index
warrant certificates to warrant holders;
·
reflecting the issuance by us of additional
index warrants of the same series or reflecting the appointment of a successor
agent or depositary; or
·
for any other purpose which we may deem
necessary or desirable and which will not materially and adversely affect the
interests of the warrant holders.
We and the warrant agent also may modify or
amend the warrant agreement and the terms of the related index warrants, with
the consent of the holders of not less than a majority of the then outstanding
warrants of each series affected by such modification or amendment, for any
purpose. However, no such modification
or amendment may be made without the consent of each holder affected thereby if
such modification or amendment:
·
changes the amount to be paid to the warrant
holder or the manner in which that amount is to be determined;
17
·
shortens the period of time during which the
index warrants may be exercised;
·
otherwise materially and adversely affects the
exercise rights of the holders of the index warrants; or
·
reduces the percentage of the number of
outstanding index warrants the consent of whose holders is required for
modification or amendment of the warrant agreement or the terms of the related
index warrants.
Merger, Consolidation, Sale or Other Disposition
If at any time there is a merger or consolidation
involving SEK or a sale, transfer, conveyance, other than lease, or other
disposition of all or substantially all of the assets of SEK, then the assuming
corporation will succeed to the obligations of SEK, under each warrant
agreement and the related index warrants.
SEK will then be relieved of any further obligation under the warrant
agreements and index warrants and may then be dissolved, wound up or
liquidated.
Enforceability of Rights by Warrant Holders
Any warrant holder may, without the consent of the
warrant agent or any other warrant holder, enforce by appropriate legal action
on its own behalf its right to exercise, and to receive payment for, its index
warrants.
Governing Law
The index warrants and each warrant agreement will be
governed by, and construed in accordance with, the law of the State of New
York, except that matters relating to our authorization and execution of the
warrants and the warrant agreements shall be governed by the law of
Sweden. If the warrants are at any time
secured by property or assets in Sweden, matters relating to such security and
the enforcement thereof in Sweden, shall be governed by the law of Sweden.
18
SWEDISH
TAXATION
Except where otherwise stated, the following summary
outlines certain Swedish tax consequences relating to the debt securities for
prospective purchasers that are not considered to be Swedish residents for
Swedish tax purposes. This summary is
based on the laws of the Kingdom of Sweden as in effect on the date of this
document. These laws are subject to
change, possibly on retroactive basis.
Prospective purchasers are urged to consult their professional tax
advisors regarding the Swedish and other tax consequences (including the
applicability and effect of double taxation treaties) of acquiring, owning and
disposing of debt securities in their particular circumstances.
Payments of any principal or interest to the holder
of a debt security should not be subject to Swedish income tax, provided that
such holder is not resident in Sweden for Swedish tax purposes and provided
further that such holder does not have a permanent establishment or fixed base
in Sweden to which the notes are effectively connected.
Private individuals who are not resident in Sweden
for tax purposes may, however, be liable to capital gains taxation in Sweden
upon disposal or redemption of certain financial instruments that are deemed
equity-related, depending on the classification of the particular financial
instrument for Swedish income tax purposes, if they have been resident in the
Sweden or have stayed permanently in Sweden at any time during the calendar
year of disposal or redemption or the ten calendar years preceding the year of
disposal or redemption.
Swedish withholding tax, or Swedish tax deduction, is
not imposed on payments of any principal or interest to the holder, except on
certain payments of interest to private individuals (or estates of deceased
individuals) with residence in Sweden for tax purposes.
Generally, for Swedish corporations and private
individuals (and estates of deceased individuals) with residence in Sweden for
tax purposes, all capital income (e.g., interest and capital gains on a note)
will be taxable. Specific tax
consequences, however, may be applicable to certain categories of corporations,
such as investment companies and life insurance companies.
Information concerning the Swedish tax consequences
of holding or disposing of index warrants will be provided in the applicable
prospectus supplements.
19
PLAN OF
DISTRIBUTION
Terms of Sale
We
will describe the terms of a particular offering of debt securities or index
warrants in the applicable prospectus supplement, including the following:
·
the name or names of any underwriters or
agents;
·
the purchase price of the debt securities or
index warrants;
·
the proceeds to us from the sale;
·
any underwriting discounts and other items
constituting underwriters compensation;
·
any initial public offering price of the debt
securities or index warrants;
·
any concessions allowed or reallowed or paid
to dealers; and
·
any securities exchanges on which such debt
securities or index warrants may be listed.
Any
underwriters, dealers or agents participating in a sale of debt securities or
index warrants may be considered to be underwriters under the Securities
Act. Furthermore, any discounts or
commissions received by them may be considered to be underwriting discounts and
commissions under the Securities Act. We
have agreed to indemnify any agents and underwriters against certain
liabilities, including liabilities under the Securities Act. The agents and underwriters may also be
entitled to contribution from us for payments they make relating to these
liabilities.
Method of Sale
We
may sell the debt securities or index warrants in any of three ways:
·
through underwriters or dealers;
·
directly to one or more purchasers; or
·
through agents.
If
we use underwriters in a sale, they will acquire the debt securities or index
warrants for their own account and may resell them in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale.
We may offer the debt securities or index warrants to the public either
through underwriting syndicates represented by managing underwriters or
directly through underwriters. The
obligations of the underwriters to purchase a particular offering of debt
securities or index warrants may be subject to conditions. The underwriters will also be obligated to
purchase all the debt securities or index warrants of an issue if any are
purchased. Any initial public offering
price or any concessions allowed or re-allowed or paid to dealers may be
changed. Please see Expenses below
for a description of our expected expenses in the offering of debt securities
and warrants.
We
may also sell the debt securities or index warrants directly or through
agents. Any agent will be named and any
commissions payable to the agent by us will be set forth in the applicable
prospectus supplement. Any agent will
act on a reasonable best efforts basis for the period of its appointment unless
the applicable prospectus supplement states otherwise.
We
may authorize underwriters or dealers to solicit offers by certain institutions
to purchase a particular offering of debt securities or index warrants at the
public offering price set forth in the applicable prospectus supplement (a
pricing supplement) using delayed delivery contracts. These contracts provide for payment and
delivery on one or more specified dates in the future. The applicable prospectus supplement will
describe the commission payable for solicitation and the terms and conditions
of these contracts.
Agents
and underwriters may be customers of, engage in transactions with, or perform
services for us in the ordinary course of business. Agents and underwriters may also be
counterparties to swaps, which we enter into to hedge our obligations under the
debt securities and index warrants.
There may be certain conflicts of interest between agents and
underwriters that act as swap counterparties and investors in the debt
securities and index warrants.
20
EXCHANGE
CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS
No
approvals are necessary under Swedish law to enable us, at the times and in the
manner provided or to be provided in the debt securities and index warrants we
may offer, or in the indenture or any applicable warrant agreement, to acquire
and transfer out of Sweden all amounts necessary to pay in full all amounts
payable thereunder, and no approval of Sveriges Riksbank would be required for
prepayment of any debt securities or upon any index warrants. Under Swedish law and our articles of
association, there are no limitations on the right of persons who are not
residents of Sweden or persons who are not citizens of Sweden to own or hold
the debt securities and index warrants offered hereby.
VALIDITY OF
THE DEBT SECURITIES
The
following persons will give opinions regarding the validity of the debt
securities and index warrants:
·
For us
:
Advokatfirman Vinge KB; and
·
For the underwriters and
agents, if any
: Cleary Gottlieb Steen & Hamilton
LLP.
As
to all statements in this prospectus with respect to Swedish law, Cleary
Gottlieb Steen & Hamilton LLP will rely on the opinion of
Advokatfirman Vinge KB.
Cleary
Gottlieb Steen & Hamilton LLP has provided legal services to us from
time to time, including in connection with the establishment of this debt
securities and index warrants program.
AUTHORIZED
REPRESENTATIVE
Our
authorized representative in the United States is the Consulate General of
Sweden, One Dag Hammarskjöld Plaza, 885 Second Avenue, 45th Floor, New York,
New York.
EXPENSES
The
table below sets forth the estimated expenses to be paid by us in connection
with the issuance and distribution of an assumed aggregate principal amount of
$5,000,000,000 of debt securities. The
assumed amount has been used to demonstrate the expenses of an offering and
does not represent an estimate of the amount of debt securities or index
warrants that may be registered or distributed because such amount is unknown
at this time.
Legal fees and
expenses
|
|
U.S.$
|
200,000
|
|
Accounting fees
and expenses
|
|
100,000
|
|
Printing and
engraving expenses
|
|
50,000
|
|
Miscellaneous
|
|
200,000
|
|
Total
|
|
U.S.$
|
550,000
|
|
As
a well-known seasoned issuer (as defined in Rule 405 under the
Securities Act), upon each offering of debt securities or index warrants made
under this prospectus we will pay a registration fee to the Securities and
Exchange Commission at the prescribed rate.
We will offset against these fees an aggregate amount of U.S.$16,664.49
representing registration fees placed on account in respect of our previous Registration
Statement on Form F-3 (No. 333-131369). We expect that the agents or underwriters
through which our debt securities and index warrants are offered and sold will
reimburse us for the registration fees we pay.
As a result, we have not included such fees in the above table.
21
EXPERTS
The financial statements of Aktiebolaget Svensk
Exportkredit (Swedish Export Credit Corporation) as of December 31, 2007
and 2006 and for each of the years in the two-year period ended
December 31, 2007
have
been incorporated by reference herein in reliance upon the report dated March
27, 2008 (except for with respect to Note 30 of the financial statements, in
respect of which the report is as of December 12, 2008) of KPMG AB, independent
registered public accounting firm, incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
WHERE YOU
CAN FIND MORE INFORMATION
This
prospectus is part of a registration statement on Form F-3 that we have
filed with the SEC using a shelf registration process. This prospectus does not contain all of the
information provided in the registration statement. For further information, you should refer to
the registration statement.
We
file reports and other information with the SEC. You can request copies of these documents,
upon payment of a duplicating fee, by writing to the SEC. You may also read and copy these documents at
the SECs public reference room in Washington, D.C. at 100 F Street, N.E.,
Washington, D.C. 20549.
Please
call the SEC at 1-800-SEC-0330 for further information on its public reference
rooms, including those in New York and Chicago.
Our SEC filings are also available on the SECs website at
http://www.sec.gov.
22
Table of
Contents
No dealer, salesperson or
other person is authorized to give any information or to represent anything not
contained in this pricing supplement.
You must not rely on any unauthorized information or
representations. This pricing
supplement is an offer to sell only the notes offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The information contained in this pricing
supplement is current only as of its date.
TABLE OF CONTENTS
$10,000,000
AKTIEBOLAGET SVENSK EXPORTKREDIT (PUBL)
(Swedish Export
Credit Corporation)
Modified
S&P DTI-TR Linked Notes
Due
October 4, 2010
Goldman, Sachs & Co.
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