The rights issue will raise SEK 12.4 billion.
Questions and Answers about the share issue
Yes, a group of Swedbank’s largest shareholders are underwriting the rights issue in full.
The subscription period is 2 – 16 of December and the outcome will be presented on 23 of December. The rights issue is expected to be completed in the middle of January 2009.
258 million new preference shares will be issued at a subscription price of SEK 48. All shareholders will receive one subscription right for each ordinary share held on the record date, 28 of November. Two (2) subscription rights entitle to subscription of one (1) new preference share.
The record date for determining the right to receive subscription rights is 28 of November, 2008.
How long will trading in subscription rights be going on?
If you want to exercise the subscription rights that you have received and subscribe for new preference shares in Swedbank you should use the pre-printed bank giro form. You do not have to fill in and hand in an application form. Payment may be made in the same way as when you make other bank giro payments – for example via Internet bank, giro or at any bank office.
If you have purchased, sold or transferred subscription rights to/from your VP account, or if for some other reason the number of subscription rights to be exercised for subscription differs from the number on the pre-printed issue statement, you should fill in the application form ”Subscription by virtue of subscription rights”. Payment for the subscribed preference shares shall be made simultaneously when sending in the application form and can be made in the same way you make other bank giro payments – for example via Internet bank, giro or at any bank office. Read the payment instructions on the application form carefully.
If you want to subscribe for more preference shares than you have subscription rights for you should fill in the application form ”Subscription without subscription rights”. However, the preference shares that you want to subscribe for by virtue of subscription rights you should subscribe for by using the pre-printed bank giro form or the application form “Subscription by virtue of subscription rights”. Note that there is no guarantee that you will be allotted any preference shares. I you are allotted preference shares you will receive a contract note with a payment instruction. No notification will be sent to subscribers that have not received an allotment.
Then you will lose the value of your subscription rights. To avoid this you should either exercise the subscription rights and subscribe for new preference shares in Swedbank no later than 16 of December, 2008, or sell the subscription rights no later than 11 of December, 2008.
When your payment has been received new paid subscribed shares (Sw: betalda tecknade aktier; BTA) will be registered on your VP account. When the rights offering has been registered with the Swedish Companies Registration Office BTAs will automatically be re-registered as preference shares. Trading in BTAs will occur from 2 of December, 2008.
A preference share is a share which has preference to something, for example dividend. Swedbank has today only ordinary shares, however, the new shares that are offered are preference shares and after the share issue Swedbank thus will have ordinary shares as well as preference shares. The preference shares will have the same voting rights as the ordinary shares.
The preference shares have preference to an annual, non-cumulative, dividend of up to SEK 4.80 per preference share, unless a higher dividend is declared on the ordinary shares, in which case such higher dividend will be paid on all shares (except in 2009, when the preference shares will have a preference to a dividend of up to SEK 2.40 per preference share). Note that it is not certain that any dividend will be paid. The dividend is always subject to there being distributable funds and the shareholders resolving on dividend at a shareholders’ meeting. The fact that the dividend is non-cumulative means that if the dividend is not paid one year, no amount will be added to the dividend that the preference shares have preference to during the coming years.
From August 2009 it is possible to convert preference shares into ordinary shares during February and August each year. A form with an application to convert into ordinary shares will be possible to download from Swedbank’s homepage and should be sent to the Board of Directors for approval. The inquiry must cover the whole holding of preference shares. All preference shares will be converted into ordinary shares in 2013.
The subscription rights will be traded on OMX Nordic Exchange Stockholm.
Swedbank will apply for listing of the preference shares on OMX Nordic Exchange Stockholm in connection with the completion of the offering.
A prospectus is expected to be published 1 of December, 2008, before the subscription period starts.
About the background for the share issue
Capital raised from the rights issue will go in to the current operations, helping to further strengthen the capital position whilst creating a larger buffer.
Swedbank is a profitable bank with sound capitalisation. However, the volatile market conditions and worsening macroeconomic environment has resulted in increased benchmarks for appropriate capital requirements for the leading banks. Through this capital raising Swedbank will have capital ratios which compare favourably with other large European banks. It also shows Swedbank’s shareholders’ ability and willingness to support the bank.
The size of the share issue was determined by our objective to compare favourably with Europe’s most well capitalised banks, making us very-well positioned to withstand the downturn in the real economy. After this rights issue we will have successfully met this objective.
The market environment for financial institutions has changed dramatically over the past couple of months. While we maintain that we are currently adequately capitalized we believe it is prudent and in the best interest of all our stakeholders if we are proactive in volatile and uncertain market conditions. Investors and other stakeholders, as a result of the negative development in the financial system and the global financial market, have fundamentally re-evaluated bank capital requirements.
What has happened in recent months is that the world’s financial markets have found themselves in the most serious financial crisis since very long. This has brought with it a difficulty in predicting market behaviour and a need for increased flexibility.
We think the stability plan is a positive measure for the Swedish banking sector. However, we believe it is prudent and in the best interest of all our stakeholders to be proactive in a volatile market and uncertain market conditions. The rights issue enables Swedbank to act from a position of strength in the current environment.
Swedbank’s dividend policy remains unchanged.