Hoist Kredit AB (publ) Prospectus regarding listing of SEK 350,000,000 fixed term subordinated loan notes issued by Hoist Kredit AB (publ)

Transcription

1 Hoist Kredit AB (publ) Prospectus regarding listing of SEK 350,000,000 fixed term subordinated loan notes issued by Hoist Kredit AB (publ)

2 Important Information In this prospectus, the Issuer means Hoist Kredit AB (publ), reg. no The Group means the Issuer with all its subsidiaries from time to time (each a Group Company ). Euroclear Sweden refers to Euroclear Sweden AB. NASDAQ OMX refers to NASDAQ OMX Stockholm AB. SEK refers to Swedish kronor, EUR refers to Euro, GBP refers to United Kingdom pound sterling and PLN refers to Polish zloty. Words and expressions defined in the terms and conditions for Hoist Kredit AB s (publ) SEK up to 350,000,000 fixed term subordinated loan notes dated 24 June 2013 (the Terms and Conditions ) as set out in this prospectus (the Prospectus ) beginning on page 13 have the same meanings when used in this Prospectus, unless expressly stated or the context requires otherwise. Notice to investors On 20 June 2013 the Issuer resolved to issue up to SEK 350,000,000 fixed term subordinated loan notes 2013/2023, (the Notes ). This Prospectus has been prepared for the listing of the Notes on NASDAQ OMX. The Prospectus does not contain and does not constitute an offer or a solicitation to buy or sell Notes. The Prospectus has been prepared pursuant to the provisions of the Swedish Financial Instruments Trading Act (Sw. lagen (1991:980) om handel med finansiella instrument) (the Trading Act ) and the Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council (as amended). The Prospectus has been approved and registered by the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) (the SFSA ) pursuant to the provisions of Chapter 2, Sections 25 and 26 of the Trading Act. Approval and registration by the SFSA does not imply that the SFSA guarantees that the information provided in the Prospectus is correct and complete. The Prospectus is governed by Swedish law. The courts of Sweden have exclusive jurisdiction to settle any dispute arising out of or in connection with this Prospectus. The Prospectus may not be distributed in any jurisdiction where such distribution would require any additional prospectus, registration or measures other than those required under Swedish law, or otherwise would conflict with regulations in such jurisdiction. Persons into whose possession the Prospectus may come are required to inform themselves about, and comply with such restrictions. Any failure to comply with such restrictions may result in a violation of applicable securities regulations. The Notes have not been, and will not be, registered under the United States Securities Act of 1933 or the securities laws of any state or other jurisdiction outside Sweden. Subject to certain exemptions, the Notes may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons. No person has been authorized to provide any information or make any statements other than those contained in the Prospectus. Should such information or statements nevertheless be furnished, it/they must not be relied upon as having been authorized or approved by the Issuer and the Issuer assumes no responsibility for such information or statements. Neither the publication of the Prospectus nor the offering, sale or delivery of any Note implies that the information in the Prospectus is correct and current as at any date other than the date of the Prospectus or that there have not been any changes to the business of the Issuer or the Group since the date of the Prospectus. If the information in the Prospectus becomes subject to any material change, such material change will be made public in accordance with the provisions governing the publication of supplements to prospectuses in the Trading Act. Each potential investor of the Notes must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should: (a) have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits and risks of investing in the Notes and the information contained in this Prospectus, any other documentation, any applicable supplement or other documentation received in relation to the Notes; (b) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Notes and the impact such investment will have on its overall investment portfolio; (c) have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes, including where the currency for principal and interest payments is different from the potential investor s currency; (d) understand thoroughly the terms of the Notes and be familiar with the behaviour of any relevant indices and financial markets; and (e) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment in the Notes and its ability to bear the applicable risks. Forward-looking statements and market data To the extent the Prospectus contains forward-looking statements that reflect the Issuer s current views or expectations with respect to future events and financial and operational performance. The words intend, estimate, expect, may, plan, anticipate or similar expressions regarding indications or forecasts of future developments or trends, which are not statements based on historical facts, constitute forward-looking information. Although the Issuer believes that these statements are based on reasonable assumptions and expectations, the Issuer cannot give any assurances that such statements will materialize. Because these forward-looking statements involve known and unknown risks and uncertainties, the outcome could differ materially from those set out in the forward-looking statement. Factors that could cause the Issuer s and the Group s actual operations, result or performance to differ from the forward-looking statements include, but are not limited to, those described in Risk Factors. The forward-looking statements included in the Prospectus apply only to the date of the Prospectus. The Issuer undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law. Any subsequent forward-looking information that can be ascribed to the Issuer and the Group or persons acting on the Issuer behalf is subject to the reservations in or referred to in this section. The Prospectus contains market data and industry forecasts, including information related to the sizes of the markets in which the Group participates. The information has been extracted from a number of sources. Although the Issuer regards theses sources as reliable, the information contained in them has not been independently verified and therefore it cannot be guaranteed that this information is accurate and complete. However, as far as the Issuer is aware and can assure by comparison with other information made public by these sources, no information has been omitted in such a way as to render the information reproduced incorrect or misleading. In addition to the above, certain data in the Prospectus is also derived from estimates made by the Issuer. Hoist Kredit AB (publ) 2

3 Table of Contents Risk Factors 4 Responsibility Statement 10 Description of the Notes 11 Terms and Conditions 13 Description of the Issuer 21 Board of Directors, Executive Management and Auditor 23 Legal Considerations and Supplementary Information 25 Documents Incorporated by Reference 26 Addresses 27 Hoist Kredit AB (publ) 3

4 Risk Factors Below are some of the risks that may be of significance for the business and future development of the Issuer and the Group. The risk factors are not presented in order of probability, importance or potential impact on the Group s business, profits or financial position. This presentation of risk factors is not complete; it merely includes examples of risk factors that an investor should consider together with other information received in relation to the Group and/or the Notes. Other risk factors that are not currently known or considered significant at this time could also impact the Group s business, profits or financial position. The value of the Notes may be significantly affected if any of the risk factors described below would be realized. Investors are therefore recommended to make their own evaluation of the significance of the Group s business and future development of the risk factors below as well as other potential risks. Risks relating to the Group s business Credit risks Investors investing in the Notes take a credit risk on the Issuer. The Issuer s ability to pay will be dependent, inter alia, on the Group s customers and counterparties performing on their obligations towards the Group. Credit risk on the Group s balance sheet relates mostly to portfolios of consumer receivables, cash deposits with banks, bonds and other interest-bearing securities and derivatives transactions entered into with banks for the purpose of hedging the Group s foreign exchange risk and interest rate exposure. A large part of the Group s assets consist of purchased non-performing consumer receivables, which are acquired in portfolios at prices that typically vary from less than 10 per cent to 35 per cent of the face value (principal amount) outstanding at the time of acquisition. The price depends on the specific characteristics and composition of the portfolios with respect to, for instance, the size, age, and type of the receivables, as well as the age, location and type of debtors, and a number of other factors, such as the financial strength and weaknesses of the economies of which the debtors are part. Credit risk involves that the Group overpays for a portfolio and recovers less from the portfolio than expected, ultimately leading to higher than expected impairments of portfolio carrying values. The total credit risk is equal to the fair value of the assets. If any of the credit risks are materialized, it could materially adversely affect the Group s business, earnings, capital adequacy ratio and financial position. Financial risks Liquidity and financing risk Liquidity risk is the risk of the Group being unable to meet its payment obligations due to insufficient availability of cash and cash equivalents in the Group, or only being able to fulfil its commitments by borrowing cash and cash equivalents at a significantly higher cost. Liquidity risk also refers to the risk of financial instruments that cannot immediately be converted into cash and cash equivalents without decreasing in value. The Group s revenues and costs are relatively stable, therefore liquidity risk in the Group is linked primarily to the Group s funding through deposits from the general public and the risk of large redemptions occurring at short notice. Financial risk is the risk that the Group, in the event of financing a maturity, does not successfully refinance the maturity or only succeeds in borrowing at substantially increased costs. The volume of the Group s sourcing funds, in particular the long term financing, may be limited during liquidity pressure. Turbulence in the global financial markets and economy may adversely affect the Group s financing which may result in that the value of the Notes is decreasing or that the Issuer cannot fulfill its obligations. The liquidity and financing risks could, if materialized, have a material adverse effect on the Group s earnings and financial position. Foreign exchange risk Generally, foreign exchange risk represents the risk to profit and capital arising from adverse movements in exchange rates for assets, such as bonds, receivables, securities, commodities or similar. Foreign exchange risk that has an adverse impact on the Group s income statement, balance sheet and/or cash flows arises mainly as a result of: The currency used in the consolidated financial statements is different from the reporting currency of the subsidiaries (translation risk). Assets and liabilities of the Group are stated in different currencies and certain revenue and costs arise in different currencies (transaction risk). The Group s accounts are denominated in SEK, while a majority of the Group s business is carried out in EUR, GBP and PLN. The Group s receivables portfolios (assets) are mainly denominated in foreign currencies, while the Group s deposits raised from the public (liabilities) are denominated in SEK and the Group is as a consequence exposed to both a translation and a transaction risk. In each respective country, all revenue and the major part of the expenses are in local currency. Significant movements in exchange rates may have a material adverse effect on the Group s earnings and financial position. Hoist Kredit AB (publ) 4

5 Interest rate risk Interest rate risk is the risk that net interest income is negatively impacted as a result of fluctuations in the prevailing level of interest rates. Interest rate risk originates from the Group s cost of funding and interest income. On the liabilities side, the Group s interest costs are affected by interest rate changes on outstanding loans and deposits from the general public. A sudden and permanent interest rate shock would have a negative impact upon the Group s profit to the extent interest rates and interest costs on loans and deposits (should the Issuer need to increase the interest rates to keep deposits) from the general public are affected by the increase in market rates at the same time as income from receivables portfolios remains unchanged. Despite measures by continuously hedging the Group s interest rate exposure through interest rate swaps in SEK, it cannot be ruled out that fluctuations in the interest rate may have an adverse effect on the Group s business, earnings and financial position. Counterparty risks Although a large part of the assets of the Group consist of individually insignificant receivables which carry insignificant counterparty risks in themselves, the Group is also subject to some considerable counterparty exposure. Significant amounts of liquidity are deposited with European commercial banks well in excess of any governmental minimum deposit insurance. The Group also invests surplus liquidity in bonds and thus have a counterparty risk on the Issuers of such bonds. Further, the Group conducts hedging activity with institutions. Derivative transactions are performed solely for the purpose of mitigating foreign exchange risks and interest rate risks in the Group. The Group is exposed to the risk that counterparties are unable to fulfil their commitments and that any collateral provided does not cover the receivable. If counterparty is unable to fulfil its obligations under the agreements and the Group is forced to enter into similar agreements with another counterparty this may, subject to market conditions, result in an increase in the costs of the Group. To a limited extent, the Group is also providing commercial loans and other credits to performing counterparties, where such loans thus entail credit and/or counterparty risk, depending on e.g. the nature of such counterparties, as is the case for any commercial loans provided by professional lenders. If any of the counterparty risks are materialized, it could materially adversely affect the Group s business, earnings, capital adequacy ratio and financial position. Operational risks Key personnel The Group s performance is to a large extent dependent on highly qualified personnel and management, and the continued ability of the Group to compete effectively and implement its strategy depends on its ability to attract new employees and retain and motivate existing employees. Competition within the financial services industry, including from other financial institutions, as well as from businesses outside the financial services industry for key employees is intense. Any loss of the services of key employees, particularly to competitors, or the inability to attract and retain highly skilled personnel in the future could have an adverse effect on the Group s business. Integration of acquired businesses In recent years, the Group has acquired a number of companies and businesses as part of its growth strategy and may consider acquiring further assets, shares or entire companies also in the future. Such acquisitions are always exposed to a number of risks and considerable uncertainty with respect to ownership, other rights, assets, liabilities, licenses and permits, claims, legal proceedings, restrictions imposed by competition law, financial resources, environmental and other aspects. These risks may be greater, more difficult or more extensive to analyze in certain countries or regions where the Group is active other than would normally be the case. Further, acquisitions involve risks due to difficulties in integrating different operations, personnel, technology, products and IT. In connection with potential future acquisitions, the Group may incur considerable transaction, restructuring and administrative costs, as well as other integrationrelated costs and losses (including loss of business opportunities). Such costs may have an adverse effect on the Group s business, earnings, capital adequacy ratio and financial position. Business risks Strategic risk Institutional changes and changes in basic market conditions may occur to the Group. The ability of the board of directors and CEO to plan, organize, follow up on and control the operations and to continuously monitor market conditions is important. Failure to do so may result in a material adverse effect on the Group s financial position. Earnings risk Earnings risk is volatility in earnings that creates a risk of lower income due to an unexpected decrease in income as a result of such factors as financial hardship in the economies of the debtors generally weakening the ability of the debtors (taken as whole) to repay their debt but also competition or volume reductions and could for instance result from successful collection of existing receivables combined with a decreasing stream of newly acquired receivables. Earnings risk is associated with all of the Group s portfolios and activities. Reputational risk Reputational risk is the risk that an event or circumstance could adversely impact the Group s reputation. Adverse publicity from the activities of legislators, pressure groups and the media could potentially have a detrimental impact on the Group s business, e.g. by making it more difficult to attract depositors from the public or Hoist Kredit AB (publ) 5

6 buying new portfolios. There can be no assurance that the Group s financial performance will not be adversely affected should unforeseen events relating to reputational risks arise in the future. Risks relating to the surrounding world including the financial sector The Group may be affected by general changes in the financing market, such as overall functions of the financial systems, changes in customer behavior and competitors behavior. The Group faces strong competition in all areas and markets. Main competitors are receivables purchase and management companies, integrated players operating a wider range of financial service businesses, as well as specialist investors. Although the Group believes it has a strong position and status to meet the competition, there can be no assurance that increased competition does not negatively affect the Group within one or more areas in which the Group operates. Demand for the Group s products is also dependent on customer confidence, market interest rates and other factors affecting the financial situation of customers. In the event the Group s financial performance deteriorates, there is a risk that the value of the Notes is decreasing and also that the Issuer cannot fulfil its obligations to the Noteholders. Regulatory and legal risks Regulatory risks The Group s business is subject to regulation, regulatory supervision and licenses. The SFSA is the main regulator of the Group s operations. The Issuer has established branches in Belgium and Netherlands and is hence subject to scrutiny from the local regulators in these jurisdictions. The Issuer has passported its license to conduct financial business to France, Italy, the Netherlands, Germany and Austria. The Group is subject to numerous financial services laws, regulations, administrative actions and policies. Any significant changes, developments and/or oversight in regulations, regulatory supervision and/or granted licenses could materially affect the Group s business, the products and services it offers or the value of its assets. As a result of the recent global financial and economic crisis, a number of regulatory initiatives have been taken to amend or implement rules and regulations, which are likely to have an impact on the business of the Group. Such initiatives include, but are not limited to, requirements for liquidity, capital adequacy and handling of counterparty risks, and regulatory tools provided to authorities to allow them to intervene in scenarios of distress. In the aftermath of the global economic crisis, many initiatives for regulatory changes have been taken, including an overview of the capital adequacy framework. On 16 December 2010, the Basel Committee on Banking Supervision (the Basel Committee ) published its final guidelines for new capital and liquidity requirements intended to reinforce capital standards and to establish minimum liquidity standards for credit institutions and on 13 January 2011 (the January 2011 release ), it published the minimum requirements for regulatory capital to ensure loss absorbency at the point of non-viability (the Basel III Framework ). The Basel III Framework will be implemented in the EU through Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, of which the member states shall adopt laws and provisions applicable from 31 December 2013, and Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit instructions and investment firms, which will be effective from 1 January The exact measures for implementation of the directive into Swedish law are not ready at the time of writing these risk factors. In addition, on 6 June 2012 the European Commission proposed a new Directive on a comprehensive framework for dealing with ailing banks (Proposal for a directive establishing a framework for the recovery and resolution of credit institutions and investment firms, COM(2012) 280/3, the Crisis Management Directive ). At the time of writing these risk factors, the content and the proposed time table of the Crisis Management Directive is still uncertain. As a result of the changes, the Issuer may be required to raise additional regulatory capital and such changes could result in the Issuer s existing regulatory capital ceasing to count either at the same level as present or at all. Any failure by the Issuer to maintain any increased regulatory capital requirements or to comply with any other requirements introduced by regulators could result in intervention by regulators or the imposition of sanctions, which may have a material adverse effect on the Group s profitability and results and may also have other effects on the Issuer s financial performance and on the pricing of the Notes, both with or without the intervention by regulators or the imposition of sanctions. Legal and regulatory claims In the ordinary course of its business, the Group is subject to regulatory oversight and liability risk. The Group carries out operations through a number of legal entities in a number of jurisdictions and is subject to regulation in each such jurisdiction. Regulation and regulatory requirements Hoist Kredit AB (publ) 6

7 are continuously amended and new requirements are imposed on the Group, including, but not limited to, regulations on conduct of business, anti-money laundering, payments, consumer credits, capital requirements, reporting and corporate governance. The Group is currently not involved in any material litigation or disputes, nor, as far as the Group is aware of, any unordinary regulatory investigations. However, it cannot be ruled out that material litigations, disputes or regulatory investigations occur in the future. These types of claims and proceedings may expose the Group to monetary damages, direct or indirect costs, direct or indirect financial loss, civil and criminal penalties, loss of licences or authorisations, or loss of reputation, as well as the potential for regulatory restrictions on its businesses, all of which could have a material adverse effect on the Group s business, earnings and financial position. Adverse regulatory actions against the Group or adverse judgments in litigation to which the Group is party could result in restrictions or limitations on the Group s operations or result in a material adverse effect on the Group s business, earnings and financial position. Tax The Group conducts its operations through companies in a large number of countries in Europe. The business, including transactions between Group companies, is conducted in accordance with applicable tax laws, tax treaties and provisions in the countries concerned and with the requirements of the relevant tax authorities. However, it cannot be generally ruled out that the Group s interpretation of applicable tax laws, tax treaties and provisions or of the relevant tax authority s interpretation of these rules or of administrative practice is not fully correct, or that such rules are altered, possibly with retroactive effect. The Group s tax position may be altered through decisions of the relevant authorities and this may have a material adverse effect on the Group s business, earnings and financial position. Risks related to the Notes Subordinated right of payment The Notes are effectively subordinated to all existing and future depositors and general creditors of the Issuer. If the Issuer is declared insolvent and a winding up is initiated, it will be required to pay such depositors, creditors and holders of senior debt and meet its obligations to all its other unsubordinated creditors in full before it can make any payments on the Notes. Should the Issuer not have enough assets to fulfil all its payment obligations, it may not be able to repay amounts due under the Notes. According to the Terms and Conditions, the Notes rank equally among themselves and any other tier 2 capital of the Issuer, both as regards the right to receive periodic payments and the right to receive repayment of capital on a liquidation or bankruptcy of the Issuer. The principal rule under Swedish law provides that subordinated debt (debt which by its terms is, or is expressed to be, subordinated to all unsubordinated creditors) ranks equally with all other subordinated debt of a debtor. There are no statutes or precedents under Swedish law concerning priority among subordinated obligations. Redemption and no right to accelerate The Notes shall be repaid on the Maturity Date, being 27 September 2023 and a Noteholder may not accelerate the loan before that time. The Notes will become due and payable only in the event of the liquidation or bankruptcy of the Issuer. However, pursuant to the Terms and Conditions, the Issuer has the right to, at its own option (subject to approval by the SFSA), redeem all outstanding Notes prior to maturity, (i) on the First Call Date, being 27 September 2018, or any Interest Payment Date thereafter or (ii) following a Capital Event, as further defined in the Terms and Conditions and roughly described as an event where the Notes due to regulatory requirements are no longer included as tier 2 capital of the Issuer. An optional redemption feature is likely to limit the market value of the Notes. During any period when the Issuer may elect to redeem the Notes, the market value of such Notes will generally not rise substantially above and may in fact decrease below the price at which they can be redeemed. This also may be true prior to any redemption period. The Issuer may be expected to redeem the Notes when its cost of borrowing regulatory capital with at least the same quality of the Notes is lower than the interest rate on the Notes. At those times, an investor generally would not be able to reinvest the redemption proceeds at an effective interest rate as high as the interest rate on the Notes being redeemed and may only be able to do so at a significantly lower rate. Potential investors should consider reinvestment risk in light of other investments available at that time. It shall also be noted that the Issuer may choose not to redeem the Notes at the First Call Date or any other time prior to the Maturity Date and that the SFSA may prevent the Issuer to redeem the Notes, e.g. if the Notes will not be replaced with own funds instruments of equal or higher quality as the Notes and if the Issuer has failed to demonstrate that its own funds, following redemption of the Notes, exceed the minimum capital adequacy requirements by a margin that the SFSA considers to be significant and appropriate. Hence, a Noteholder cannot expect the Notes to be redeemed prior to the Maturity Date, being 27 September Amendments of Terms and Conditions at Noteholders meeting The Terms and Conditions contain provisions for calling meetings of Noteholders to consider matters relating to the Notes. However, this does not rule out the possibility that the Noteholders, in certain situations, could bring their own action against the Issuer. To enable the Agent to represent the Noteholder in court, the Noteholder may have to submit a written power of attorney for legal proceedings. The failure of all Noteholder to submit such a power of attorney could negatively impact the enforcement of the Notes. Hoist Kredit AB (publ) 7

8 Certain majorities of Noteholders are permitted to bind all Noteholders in relation to certain decisions that modify the Terms and Conditions and may affect the Noteholders rights and obligations under the Notes, including those who did not attend and vote at the relevant meeting or who vote in a manner contrary to the majority. Consequently, the actions of the majority and the Agent in such matters could impact a Noteholder s rights under the Terms and Conditions in a manner that would be undesirable for some of the Noteholders. In particular, it shall be noted that under certain circumstances in respect of a Noteholders meeting regarding amendments of the Terms and Conditions following a Capital Event, there are no quorum requirements. The Issuer and the Agent, acting on behalf of the Noteholders, may also without the approval of a Noteholder s meeting agree to certain amendment of the Terms and Conditions which are of a formal, minor or technical nature, is made to correct a manifest error or does not adversely affect the rights and interests of the Noteholders. Loss absorption at the point of non-viability The January 2011 release (as defined above) states that the terms and conditions of all non-common Tier 1 and Tier 2 instruments issued by a bank must have a provision that requires such instruments, at the option of the relevant authority, to either be written off or converted into common equity upon the occurrence of a specified trigger event and that that instruments issued after 1 January 2013 must meet these requirements in order to be recognised as Tier 2 instruments for regulatory capital purposes. However, it is not necessary to include these provisions in the contractual terms of the instruments if the governing jurisdiction of the bank has in place laws that (i) require such instruments to be written off upon the occurrence a triggering event or (ii) otherwise require such instruments to fully absorb losses before tax payers are exposed to loss. The trigger event, known as a non-viability event, will be the earlier of (a) a decision that a write-off, without which the financial institution would become non-viable, is necessary and (b) a decision to make a public sector injection of capital or equivalent support, without which the financial institution would become non-viable, as determined by the relevant authority. The Terms and Conditions contain a provision, which is applicable and form part of the Terms and Conditions to the extent that its inclusion is required, pursuant to which the Notes shall, upon the occurrence of a non-viability event, be fully used for loss absorption in accordance with the applicable regulations in force from time to time. The Terms and Conditions contain an explicit undertaking by the current shareholder of the Issuer pursuant to which it undertakes to vote for and use any reasonable endeavours to procure that a conversion is made so that the Noteholders receives equity instruments in the Issuer upon the occurrence of a non-viability event. Such equity instrument shall, pursuant to the undertaking in the Terms and Conditions, to the extent sufficient and permitted, be preferential shares and, if that is not sufficient and/or permitted, ordinary shares. A potential investor shall consider that such undertaking is subject to compliance with the implementation of the Crisis Management Directive, especially since the requirement set out in the January 2011 release refers to common equity, it may not be possible in accordance with applicable law to grant preferential shares to the Noteholders in the event of non-viability. No limitation on issuing debt There is no restriction on the amount of debt which the Issuer may issue which ranks senior to the Notes or on the amount of securities which the Issuer may issue which ranks pari passu with the Notes. Such issuance may reduce the amount recoverable by the Noteholders upon the bankruptcy or any liquidation of the Issuer. The secondary market Although the intention is to apply for the Notes to be admitted to listing on the Corporate Bond List of NASDAQ OMX, there is no assurance that such application will be accepted or that an active trading market will develop or, if developed, will be sustained. Prior to any admission to trading, the Notes may not be widely distributed and there is no active trading market for the Notes. Accordingly, there is no assurance to the development or liquidity of any trading market for the Notes. Potential investors should be aware that, in view of the prevailing and widely reported global credit market conditions (which, to a certain extent, continue at the date hereof), the secondary market for the Notes and instruments of this kind may be illiquid. The Issuer cannot predict when these circumstances will change. Clearing and settlement The Notes will be deposited with a common depositary from Euroclear and linked to a so called account-based book entry systems and, consequently, no physical securities will be issued. Clearing and settlement in connection with trading in Notes takes place in the VPC-system. Noteholders are dependent on the clearing system in order to obtain payment under the Notes. Hoist Kredit AB (publ) 8

9 Interest risk Notwithstanding that the interest rate applicable to the Notes will be reset on 31 December 2018, an investment in the Notes involves the risk that subsequent changes in market interest rates both prior to and after 31 December 2018 may adversely affect the value of the Notes. Exchange risk The Issuer will pay principal and interest on the Notes in SEK. This presents certain risks relating to currency conversions if an investor s financial activities are denominated principally in a current or currency unit other than SEK. These include the risk that exchange rates may significantly change (including changes due to devaluation of SEK or revaluation of the investor s currency) and the risk that authorities with jurisdiction over the investor s currency or SEK may impose or modify exchange controls. Change of law The Terms and Conditions are based on Swedish law in effect as at the date of issue of the Notes. No assurance can be given as to the impact of any possible judicial decision or change to Swedish law or administrative practice after the date of issue of the Notes. Hoist Kredit AB (publ) 9

10 Responsibility Statement On 20 June 2013 the Issuer resolved to issue up to SEK 350,000,000 fixed term subordinated loan notes 2013/2023. The Prospectus has been prepared for the purpose of listing the Notes on NASDAQ OMX and in accordance with the Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council (as amended) and the provisions in Chapter 2 of the Swedish Financial Instruments Trading Act. The Issuer accepts responsibility for the information contained in the Prospectus and declares that, having taken all reasonable care to ensure that such is the case, the information contained in the Prospectus is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import. The Board of Directors of the Issuer is, to the extent provided by law, responsible for the information, relating to the Issuer, contained in the Prospectus and declares that, having taken all reasonable care to ensure that such is the case, the information contained in the Prospectus is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import. 1 October 2013 Hoist Kredit AB (publ) The Board of Directors Hoist Kredit AB (publ) 10

11 Description of the Notes The below is only intended to serve as an introduction to the Notes. Any decision to invest in the Notes should therefore be based on an assessment on all information contained in this Prospectus as well as all documents incorporated therein by reference. The complete terms and conditions applicable to the Notes are found under the section Terms and Conditions on pages 13 to 20 below. 1 Issuer Hoist Kredit AB (publ), reg. no Notes Subordinated unsecured loan notes due Agent Swedish Trustee AB (publ), reg. no ISIN SE Issuing Agent Carnegie Investment Bank AB (publ), reg. no Total Nominal Amount SEK 350,000, Denomination SEK 1,000,000 or in multiples thereof. 8 Currency SEK. 9 Initial Issue Date 27 June Maturity Date 27 September First Call Date 27 September Purpose Strengthen the capital base of the Issuer in order to enable it to increase its activities and acquire loan portfolios, why the Terms and Conditions are tailored for the Issuer to be able to include the Notes as Tier 2 capital. 13 Ranking The Notes constitute, direct unsecured and effectively subordinated debt obligations (Sw. förlagslån) and will rank pari passu without any reference among themselves. The rights of the Noteholders shall be subordinated in rights of payment of any present or future claims of depositors and general creditors of the Issuer, but rank pari passu with any other tier 2 capital of the Issuer and senior as regards the right of payment to (i) holders of all classes of share capital of the Issuer, (ii) under undated subordinated loans (perpetual) and (iii) in respect of any obligations of the Issuer ranking or expressed to rank junior to the Notes. 14 Security None. 15 Negative pledge, financial covenants or other specific undertakings None. 16 Interest Rate The Notes will bear interest for each Interest Period at a rate of 12 per cent per annum until 31 December 2018 and thereafter at a rate which will be equal to the sum of (i) the Margin and (ii) 6-month STIBOR, as determined by the Agent on the relevant Determination Date (as defined and further set out in the Terms and Condition). 17 Interest Payment Interest will be paid in arrears on each Interest Payment Date and shall, in relation to; a specific Interest Period prior to or on 31 December 2018, be calculated on the basis of a 360-day year comprised of twelve months of 30 days each; and a specific Interest Period after 31 December 2018, be calculated on the basis of the actual number of days in that Interest Period divided by Interest Period The interest period shall be 6 months ending on each Interest Payment Date. 19 Interest Payment Dates 30 June and 31 December each year. 20 Default interest: 8 per cent per annum in addition to the Interest Rate on the due but unpaid sum. 21 Dis-incentive to redeem Tier 1 instruments Should the Issuer redeem the tier 1 instruments (Sw. konvertibla primärkapitaltillskott) issued as per the Initial Issue Date, and provided that such tier 1 instruments are not replaced with own funds instruments of equal or higher quality, the Interest Rate of the Notes shall be increased by 3 per cent per annum. 22 Redemption at the Maturity Date Unless previously redeemed, the Issuer will redeem the Notes at their outstanding principal amount, together with accrued interest thereon, on the Maturity Date. Hoist Kredit AB (publ) 11

12 23 Optional Redemption by the Issuer after five years 24 Optional Redemption by the Issuer upon the occurrence of a Capital Event The Issuer may on the First Call Date or any Interest Payment Date thereafter with 21 days notice, at its own option and with the prior consent of the SFSA, redeem all (but not only some) of the outstanding Notes at their outstanding principal amount together with accrued interest thereon, without any premium or penalty. If a Capital Event (as defined in the Terms and Conditions) occurs the Issuer may at its option and with the prior consent of the SFSA, redeem all or some of the outstanding Notes at; 104 per cent. of the Nominal Amount if made within one (1) year from the Initial Issue Date; 103 per cent. of the Nominal Amount if made within two (2) years from the Initial Issue Date; 102 per cent. of the Nominal Amount if made within three (3) years from the Initial Issue Date; 101 per cent. of the Nominal Amount if made within four (4) years from the Initial Issue Date; and the Nominal Amount if made after four (4) years from the Initial Issue Date, and always together with accrued interest thereon. 25 Amendments of Terms and Conditions 26 Mandatory conversion upon a Non-Viability Event 27 Undertaking by Hoist International AB upon a Non- Viability Event The Issuer and the Agent, acting on behalf of the Noteholders, may agree to amend the Terms and Conditions or the Agent may, acting on behalf of the Noteholders, waive a right under the Terms and Conditions provided that: such amendment or waiver, in the opinion of the Agent, does not adversely affect the rights and interests of the Noteholders; such amendment or waiver is of a formal, minor or technical nature or is made to correct a manifest error; or such amendment or waiver has been duly approved by a Noteholders meeting in accordance with the Terms and Conditions. Upon the occurrence of a Non-Viability Event (as defined below), the Notes shall be mandatorily fully used for loss absorption in accordance with the Regulations (as defined below), as applicable from time to time. The above shall only be applicable and form part of the Terms and Conditions to the extent that its inclusion is required (taking into account, inter alia, any applicable grandfathering rules) for the Notes to comply with the criteria for Tier 2 Capital. Non-Viability Event means a triggering event according to the Regulations and as determined by the SFSA to be an event where it is required that the instrument is either written off or converted into common equity, such requirement being based on the requirement outlined in the press release of the Basel Committee on Banking Supervision entitled Minimum requirements to ensure loss absorbency at the point of non-viability which states that such specified trigger event will be the earlier of: a decision that a write-off, without which the firm would become non-viable, is necessary, as determined by the relevant authority; and the decision to make a public sector injection of capital, or equivalent support, without which the firm would have become non-viable, as determined by the relevant authority. Regulations means the applicable regulations on prudential requirements for credit institutions in Sweden and the European Union including the implementation of CRD IV in relation to tier 2 capital. Hoist International AB (publ), being the sole shareholder of the Issuer, undertakes to in the event of a conversion of the Notes due to a Non-Viability Event, to the extent permitted by law and the Regulations and sufficient to cure the Non-Viability Event, vote for and otherwise use any reasonable endeavours to procure that each of the Noteholders as substitution for its Notes receives equity instruments in the Issuer as further set out in the Terms and Conditions. 28 Acceleration: Limited to actual bankruptcy/liquidation of the Issuer. 29 Transfer Restrictions: None. However, the Notes may not be offered or sold in any jurisdiction or to any person whose participation requires a prospectus, registration measure, information or action other than those prescribed by Swedish law. 30 CSD: The Notes are connected with the account-based system of Euroclear Sweden, i.e. for the purpose of having the payment of interest managed by Euroclear Sweden. 31 Listing: The Issuer intends to apply for and procure the listing of the Notes on the Corporate Bond List of NASDAQ OMX within 12 months from the Initial Issue Date. 32 Governing Law: Swedish Law. 33 Jurisdiction: Courts of Sweden. Hoist Kredit AB (publ) 12

13 Terms and Conditions 1. DEFINITIONS Account means a securities account (account for shares and other securities (Sw. avstämningskonto) according to the Swedish Financial Instruments Accounts Act (1998:1479) in which each Noteholder s holding of Notes is registered (directly or in the name of a nominee); Account Operator means a bank or other party duly authorised to operate as an account operator pursuant to the Swedish Financial Instruments Accounts Act (1998:1479) and through which a Noteholder has opened an Account in respect of the Notes; Agent means Swedish Trustee AB (publ), corp. reg. no , or any other agent which from time to time is duly appointed to represent the Noteholders pursuant to these Terms and Conditions; Business Day means a day which is not a Saturday, Sunday or other public holiday in Sweden or which in respect of payment of promissory notes is not equal to a public holiday in Sweden; Business Day Convention means: on and prior to 31 December 2018 the Following Business Day Convention; and after 31 December 2018 the Modified Following Business Day Convention; Capital Event means the determination by the Issuer (such determination to be confirmed by the Issuer to the Agent in a certificate signed by two authorised signatories of the Issuer to be in conformity with the assessment of the Swedish FSA), that by reason of the non-compliance of the Notes with the criteria for Tier 2 Capital (excluding, for the avoidance of doubt, non-compliance as a result of any applicable limitation on the amount or ratio of such capital as applicable to the Issuer), the Notes are fully or partly excluded from Tier 2 Capital; CSD means the Issuer s central securities depository and registrar in respect of the Notes, from time to time, initially Euroclear Sweden AB, corp. reg. no , Box 191, Stockholm; CRD IV means the legislative package consisting of the Directive and the Regulation of the European Parliament and of the Council on prudential requirements for credit institutions and investment firms (a draft of which was published on 20 July 2011). Determination Date means in relation to the rate of interest for any Interest Period after the First Call Date, the second (2 nd ) Business Day immediately preceding the first day of that Interest Period; Existing Capital Base Instrument means the existing SEK 200,000,000 convertibles (Sw. primärkapitaltillskott) issued by the Issuer prior to the Initial Issue Date; First Call Date means 27 September 2018; Following Business Day Convention means, for an Interest Payment Date, if such date would fall on a day that is not a Business Day, the next following Business Day; Initial Issue Date means 27 June 2013; Initial Notes means the Notes issued on the Initial Issue Date; Interest Payment Date means the dates on which interest will be paid, i.e. each of 30 June and 31 December of each year (to the extent such day is not a Business Day, subject to Condition 7.3). The first Interest Payment Date shall be 31 December 2013 and the last Interest Payment Date shall be the relevant Redemption Date; Interest Period means each period beginning on (but excluding) the Issue Date for the relevant Note or any Interest Payment Date and ending on (and including) the next Interest Payment Date; Interest Rate means, subject to Condition 12: (a) from (but excluding) the Issue Date of the relevant Note to and including 31 December 2018, 12 per cent per annum; and (b) from (but excluding) 31 December 2018 to and including the Maturity Date at a rate which will be equal to the sum of (i) the Margin and (ii) 6-month STIBOR, as determined by the Agent on the relevant Determination Date; Issue Date means the date of issue of the Initial Notes or any Subsequent Notes under these Terms and Conditions (as applicable); Issuing Agent means initially Carnegie Investment Bank AB (publ), corp. reg. no , or any party replacing it as issuing agent (Sw. emissionsinstitut) in accordance with these Terms and Conditions; Issuer means Hoist Kredit AB (publ.), corp. reg. no ; Majority shall have the meaning set forth in Condition 13.3 (a); Margin means 12 per cent. per annum less the SEK Mid-Swap Rate; Maturity Date means 27 September 2023; Modified Following Business Day Convention means, for an Interest Payment Date, if such date would fall on a day that is not a Business Day, the next following 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; Nominal Amount means SEK 1,000,000; Non-Viability Event means a triggering event according to the Regulations and as determined by the Swedish FSA to be an event where it is required that the instrument is either written off or converted into common equity, such requirement being based on the requirement outlined in the press release of the Basel Committee on Banking Supervision entitled Minimum requirements to ensure loss absorbency at the point of non-viability which states that such specified trigger event will be the earlier of: (a) a decision that a write-off, without which the firm would become non-viable, is necessary, as determined by the relevant authority; and (b) the decision to make a public sector injection of capital, or equivalent support, without which the firm would have become non-viable, as determined by the relevant authority; Note means a freely transferable debt instrument of the type set forth in Chapter 1, Section 3 of the Swedish Financial Instruments Accounts Act (1998:1479) and which has been issued by the Issuer pursuant to these Terms and Conditions, including the Initial Notes and any Subsequent Notes; Hoist Kredit AB (publ) 13

14 Noteholder means a person registered on an Account as holder of a Note or otherwise being entitled to receive payment in respect of a Note; Qualified Majority shall have the meaning set forth in Condition 13.3 (b); Qualifying Tier 2 Notes means securities issued (a) directly or indirectly by the Issuer that, subject as required by the provisions of this definition, have terms not materially less favourable to the investors than the terms of the Notes, as reasonably determined by the Issuer, provided that such securities shall: (b) contain terms which comply with the Regulations; (c) carry the same rate of interest from time to time applying to the Notes prior to the variation; rank at least pari passu with the ranking of the Notes prior to the variation; (d) preserve any existing rights under the Notes to any accrued interest which has not been paid in respect of the period from (and including) the Interest Payment Date last preceding the date of variation; and (e) have the same redemption rights as the Notes prior to variation (including that the Maturity Date cannot be amended); Record Date has the meaning set forth in Condition 7.3; SEK Mid-Swap Rate means the 5Y and 6Y annual swap rates for SEK swap transactions, expressed as a percentage, which is published on NASDAQ OMX s website for Swap Fixing (or through another website replacing it) as of 12:00 a.m., Stockholm time, as determined by the Agent on the second Business Day immediately preceding the Initial Issue Date, interpolated to correspond with the annual swap rate for SEK swap transactions maturing on the First Call Date; STIBOR means: (a) the applicable percentage rate per annum displayed on NASDAQ OMX s website for STIBOR fixing (or through another website replacing it) as of or around a.m. on the Determination Date for the offering of deposits in Swedish Kronor and for a period comparable to the relevant Interest Period; or (b) if no rate is available for the relevant Interest Period, the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request quoted by leading banks in the Stockholm interbank market reasonably selected by the Agent, for deposits of SEK 100,000,000 for the relevant period; or (c) if no quotation is available pursuant to paragraph (b), the interest rate which according to the reasonable assessment of the Agent best reflects the interest rate for deposits in Swedish Kronor offered in the Stockholm interbank market for the relevant period; Redemption Date means each date the Notes are to be redeemed pursuant to Condition 7; Subsequent Notes means Notes issued after the Initial Issue Date at one or several occasions; Regulations means the applicable regulations on prudential requirements for credit institutions in Sweden and the European Union including the implementation of CRD IV in relation to Tier 2 Capital; SEK means the lawful currency for the time being in Sweden; Swedish SFA means the Swedish Financial Supervisory Authority (Sw. Finansinspektionen); Tier 2 Capital means capital included in the capital base of a credit institution as supplementary capital (Sw. supplementärt kapital) or its equivalent from time to time under the Regulations; and U.S. Securities Act shall have the meaning set forth in Condition 8.2. Hoist Kredit AB (publ) 14

15 2. THE AMOUNT OF THE NOTES AND UNDERTAKING TO MAKE PAYMENTS 2.1 The aggregate amount of the Note loan will initially be an amount of up to SEK 200,000,000 (two hundred million) and will be represented by Initial Notes, each of the Nominal Amount. 2.2 The Issuer may, at one or several occasions, issue Subsequent Notes subject to these Terms and Conditions up to the total amount (including the Initial Notes) of SEK 350,000,000 (three hundred and fifty million). Each Subsequent Note shall entitle its holder to Interest in accordance with Condition 5 and otherwise have the same rights as the Initial Notes. 2.3 The Issuer undertakes to repay the Notes, to pay interest and to otherwise act in accordance and comply with these Terms and Conditions. 3. PURPOSE The Issuer is a credit institution under the supervision of the Swedish SFA and issues the Notes to strengthen its capital base in order to enable it to increase its activities and acquire loan portfolios. These Terms and Conditions are tailored for the Issuer to be able to include the Notes as Tier 2 Capital. 4. RANKING The Note will constitute, direct unsecured and effectively subordinated debt obligations (Sw. förlagslån), and will rank: (a) junior as regards the right of payment of any present or future claims of (i) depositors and (ii) general creditors of the Issuer; (b) pari passu without any reference among themselves; (c) pari passu with any other Tier 2 Capital of the Issuer, both as regards the right to receive periodic payments and the right to receive repayment of capital on a liquidation or bankruptcy of the Issuer; and (d) senior as regards the right of payment (i) to holders of all classes of share capital of the Issuer, (ii) under undated subordinated loans (perpetual) and (iii) in respect of any obligations of the Issuer ranking or expressed to rank junior to the Notes (including all the Issuer s Existing Capital Base Instruments and any of its other existing and future securities ranking, or expressed to rank, junior to the Notes) both as regards the right to receive periodic payments and the right to receive repayment of capital on a liquidation or bankruptcy of the Issuer. 5. INTEREST 5.1 The Notes will bear interest at the Interest Rate applied to the Nominal Amount from the Issue Date for the relevant Note up to and including the final Redemption Date. Interest will be paid in arrears on each Interest Payment Date and shall, in relation to; (a) specific Interest Period prior to or on 31 December 2018, be calculated on the basis of a 360-day year comprised of twelve months of 30 days each; and (b) a specific Interest Period after 31 December 2018, be calculated on the basis of the actual number of days in that Interest Period divided by 360, and otherwise in accordance with Condition If, due to the existence of an obstacle referred to in Condition 20.1 it is not possible to determine the Interest Rate for an Interest Period, the Interest Rate for the preceding Interest Period shall apply. As soon as the obstacle has been removed, the Interest Rate shall be determined for the current Interest Period, which shall apply from the second (2nd) Business Day following such determination until (and including) the last day of such Interest Period. 5.3 If the Issuer fails to pay any amount due, the Issuer shall pay default interest on such amount at a rate corresponding to eight (8) percentage units in addition to the applicable Interest Rate, from the date such payment was due up to and including the date of actual payment. Accrued default interest shall not be capitalised. 5.4 If the failure to pay is solely due to an existence of an obstacle for the Agent or the CSD, respectively, as set out in Condition 20.1, the default interest shall not exceed the relevant Interest Rate. 6. NOTES IN BOOK-ENTRY FORM 6.1 The Notes will be registered on behalf of the Noteholders on an Account and no physical notes will be issued. Registration requests relating to the Notes shall be directed to an Account Operator. Those who, according to assignment, pledge, the provisions of the Swedish Children and Parents Code (Sw. Föräldrabalken), conditions of will or deed of gift or otherwise have acquired a right to receive payments in respect of a Note shall register their entitlement to receive payment. 6.2 The Issuer (and the Agent when permitted under the CDS s applicable regulations) shall be entitled to obtain information from the debt register (Sw. skuldbok) kept by the CSD in respect of the Notes. At the request of the Agent, the Issuer shall promptly request and provide such information to the Agent or provide the Agent with a power of attorney to obtain the relevant information from the CSD. 7. REDEMPTION OF THE NOTES AND PAYMENTS 7.1 Redemption at maturity Unless previously redeemed or purchased and cancelled in whole in accordance with these Terms and Conditions, the Issuer shall redeem all outstanding Notes at the Nominal Amount (together with any accrued but not yet paid interest) on the Maturity Date. Hoist Kredit AB (publ) 15

16 7.2 Voluntary redemption by the Issuer All Notes, but not only some, can be redeemed early at the option of the Issuer, with the prior consent of the Swedish FSA: (a) on the First Call Date or any Interest Payment Date thereafter; or (b) following a Capital Event. Any such redemption shall be made only after twenty-one (21) days written notice as set out in Condition 18 and, in case of a Capital Event, is to be made at; (a) 104 per cent. of the Nominal Amount if made within one (1) year from the Initial Issue Date; (b) 103 per cent. of the Nominal Amount if made within two (2) years from the Initial Issue Date; (c) 102 per cent. of the Nominal Amount if made within three (3) years from the Initial Issue Date; (d) 101 per cent. of the Nominal Amount if made within four (4) years from the Initial Issue Date; and (e) the Nominal Amount if made after four (4) years from the Initial Issue Date, and always together with accrued interest from the latest Interest Payment Date up to and including the relevant date for early redemption. Any such notice is irrevocable but may, at the Issuer s discretion, contain one or more conditions precedent. Upon expiry of such notice and the fulfilment of the conditions precedent (if any), the Issuer is bound to redeem the Notes in full at the applicable amounts. 7.3 Payments of principal and interest Payment of the Nominal Amount and interest will be made to the person who is a Noteholder on the fifth (5 th ) Business Day prior to the respective payment date or, if on the relevant time another Business Day which is falling closer to the relevant Redemption Date is generally applied in the Swedish Note market, such other Business Day ( Record Date ). If a Noteholder has registered, through an Account Operator, that payments of principal amounts and interest shall be deposited in a certain bank account, such deposits will be effected by the CSD on the relevant payment date. In other cases, payments will be transferred by the CSD to the Noteholder at the address registered with the CSD on the Record Date. If a day on which an amount becomes due and payable is not a Business Day the amount will be deposited or transferred in accordance with the applicable Business Day Convention. Should the CSD, due to a delay on behalf of the Issuer or some other obstacle, not be able to effect the payment of amounts according to the aforesaid, the CSD will pay such amount to the Noteholders on the Record Date as soon as possible after such obstacle has been removed. If a person to whom payment has been made in accordance with the above was not entitled to receive such payment, the Issuer and the CSD shall nevertheless be deemed to have fulfilled their obligations, provided that the Issuer and/or the CSD did not have knowledge of that such payment was made to a person not entitled to receive such amount and provided the Issuer and/or the CSD acted with normal care. 8. PURCHASE AND TRANSFERS OF NOTES 8.1 The distribution of these Terms and Conditions and the offering, sale and delivery of the Notes in certain jurisdictions may be restricted by law. 8.2 The Notes have not been and will not be registered under the U.S. Securities Act of 1933 or the securities laws of any other jurisdiction (other than Sweden). The Notes may therefore not be offered or sold in any jurisdiction or to any person whose participation requires a prospectus, registration measure, information or action other than those prescribed by Swedish law. 9. LISTING OF NOTES The Issuer currently intends to apply for and procure the listing of the Notes on the Corporate Bond List of NASDAQ OMX Stockholm within 12 months from the Initial Issue Date. 10. ABSENCE OF ACCELERTION EVENT 10.1 The Notes are subordinated and unsecured and the Issuer has no obligation to redeem or prepay the Notes prior to the Maturity Date The Noteholders have no right to accelerate the Notes or otherwise request prepayment or redemption of the principal amount of the Notes prior to the Maturity Date except in the actual bankruptcy or liquidation of the Issuer. 11. MANDATORY CONVERSION UP ON A NON- VIABILITY EVENT This Condition 11 shall only be applicable and form part of these Terms and Conditions to the extent that its inclusion is required (taking into account, inter alia, any applicable grandfathering rules) for the Notes to comply with the criteria for Tier 2 Capital. Upon the occurrence of a Non-Viability Event, the Notes shall be mandatorily fully used for loss absorption in accordance with the Regulations, as applicable from time to time. 12. DIS-INCENTIVE TO REDEEM THE EXISTING CAPITAL BASE INSTRUMENTS Should the Issuer redeem the Existing Capital Base Instruments, and provided that such Existing Capital Base Instruments are not (no later than simultaneously) replaced with capital base instruments of equal or higher quality, the Interest Rate of the Notes shall be increased by 3 per cent per annum. 13. NOTEHOLDERS MEETING OR PROCEDURE IN WRITING 13.1 Each of the Issuer or the Agent can at any time call for a Noteholders meeting or demand for a procedure in writing among the Noteholders Notice shall be made to the Noteholders and the Agent or, as the case may be, the Issuer in accordance with Condition 18 below and shall be made not later than ten (10) Business Days Hoist Kredit AB (publ) 16

17 and not earlier than thirty (30) Business Days prior to the meeting or the last day for replies. The notice shall include (i) time for the meeting or the last day for replies, (ii) place for the meeting or address for replies, (iii) agenda for the meeting, (iv) information regarding which day a Noteholder shall be registered as owner, and if such possibility is provided by the CSD, is entitled to vote in the register of the CSD and (v) what is otherwise required by a Noteholder in order to attend the meeting. The Issuer or, if the Agent is calling, the Agent shall determine the contents in the notice and provide, in writing or electronically, a proxy form or, in case of a procedure in writing, a decision form with the relevant alternatives for resolution Provided that the required quorum exists, a resolution is passed through voting at a meeting (or, in case of a procedure in writing, through calculation), at which each Noteholder entitled to vote shall have one vote per Note (each at a Nominal Amount of SEK 1,000,000) such Noteholder holds. A Noteholder that holds more than one Note must vote in the same manner for all Notes held. However, a representative who represents different Noteholders may vote differently for different Noteholders. Notes held by the Issuer or any of its subsidiaries shall not entitle to any voting rights and shall not be considered when calculating if necessary majority has been achieved in accordance with these Terms and Conditions. (a) The resolution of the Noteholders shall be the opinion which represents more than 50 per cent of the votes cast or answers received ( Majority ). (b) The following actions require at least 75 per cent of the votes cast or answers received in order to deem a resolution passed ( Qualified Majority ): (i) reduction of the principal amount, interest rate or interest amount which is payable by the Issuer in respect of Notes, (ii) for postponing any Redemption Date, or (iii) for amendment of the conditions in this Condition If the number of votes is equal, the opinion which is most beneficial for the Noteholders, according to the chairman of the meeting (or, in case of a procedure in writing, the Agent) will prevail Otherwise than following a Capital Event and in relation to a decision to amend the Terms and Conditions so that the Notes will be Qualifying Tier 2 Notes, a quorum exists only where Noteholders representing at least one fourth of the aggregate outstanding Nominal Amount are duly represented at the meeting (or, in the case of a procedure in writing, provide answers). If quorum is not achieved within fifteen (15) minutes from the scheduled starting of the meeting (or, in case of a procedure in writing, through received answers at the end of the time for replies), the meeting shall be adjourned (or, in case of a procedure in writing, the time for replies shall be extended) to a day which falls not earlier than ten (10) Business Days and not later than thirty (30) Business Days after the date of delivery of a new notice (fulfilling the requirements set out in Condition 13.2) to the Noteholders in accordance with Condition 18 below. If the meeting is quorate for some but not all issues which are to be resolved upon at the meeting, the meeting shall be adjourned after resolutions have been adopted on matters for which the meeting was quorate. Notice containing information regarding time and place for a continued meeting (or, in case of a procedure in writing, information regarding extended time for replies) shall promptly be provided to the Noteholders in accordance with Condition 18. At a continued meeting (or, in case of a procedure in writing, at a new calculation) a resolution can be passed through a Majority (or, if required in accordance with (c) above, through Qualified Majority) of Noteholders entitled to vote irrespective of the number of Notes represented At the meeting the Issuer, the Noteholders and the Agent may attend along with its representatives, counsels and assistants. The meeting can decide that further individuals may attend. The meeting is opened by the Agent or by a person appointed by the Agent and the meeting is led by that person until Noteholders have appointed a chairman for the meeting. The chairman shall arrange for minutes to be kept at the meeting in which Noteholders entitled to vote shall be listed, which other persons have been attending, what has been discussed, how the voting has turned out and which resolutions that have been passed. The minutes shall be signed by the chairman and by at least one person appointed to verify the minutes. In case of a procedure in writing, the Agent shall provide for the calculation and draw up minutes in respect of the calculation. The Agent may request clarifications but is not obliged to do so and may disregard any unclear or illegible answers. The Agent shall disregard answers which do not follow listed alternatives or answers from respondents where it is not clear from the material provided by the Noteholder or CSD that the respondent is entitled to vote for the relevant number of Notes. The Issuer shall have access to the calculation. The minutes shall be completed promptly and be held available for the Noteholders at the Issuer and the Agent If the Issuer and the Agent deem it appropriate a meeting may be combined with a possibility for Noteholders to provide answers in accordance with a written resolution form as an alternative to being present or being represented at a meeting A resolution that has been passed at a duly convened meeting or a procedure in writing is binding to all Noteholders irrespective of them being present or being represented at the meeting or if they have participated in the procedure in writing and irrespective of how and if the they have voted. Hoist Kredit AB (publ) 17

18 13.9 The Issuer shall bear all costs of the Issuer and the Agent in connection with a meeting or a procedure in writing irrespective of who has initiated the meeting or the procedure. 14. THE AGENT 14.1 Each Noteholder appoints the Agent to act as agent for and on behalf of the Noteholders under these Terms and Conditions, and the Agent s obligations are exhaustively regulated herein. The Agent has no obligation to monitor the Issuer s financial standing or its fulfilment of obligations and liabilities, other than as expressly set forth herein The Agent shall not be bound to account to any Noteholder for any sum received by it for its own account The Agent is not obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality Even without a separate authorization from the Noteholders, the Agent, or a person appointed by the Agent, is authorised to represent the Noteholders against the Issuer in accordance with these provisions in every matter concerning the Notes, whether or not in court or before an executive authority (including any legal or arbitration proceeding relating to the perfection, preservation, protection or enforcement of the Notes). Each Noteholder shall immediately upon request by the Agent provide the Agent with any such documents, including a written power of attorney (in form and substance to the Agent s satisfaction), which the Agent deems necessary for the purpose of carrying out its duties under these Terms and Conditions. The Agent is under no obligation to represent a Noteholder which does not comply with such request of the Agent. Even though the Agent is entitled to represent the Noteholders, the Agent is not obliged to take action unless explicitly expressed in these Terms and Conditions The Agent may rely on any representation, notice or document believed by it to be genuine, correct and appropriately authorized and any statement made by a director, authorized signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify In relation to these Terms and Conditions, the Agent may act through its personnel and agents. The Agent may further engage, pay for and rely on the advice or services of any lawyers, accountants or other experts. The reasonable, evidenced and proper costs for such third party advice shall be borne by the Issuer. In acting as Agent for the Noteholders, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments. If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent may reasonably not be deemed to have received it The Agent can be replaced as set out in this Condition 14.7: (a) The Agent may retire from its assignment by giving notice to the Issuer and the Noteholders, in which case the Noteholders shall appoint a leading Swedish or international business bank or securities institution or a reputable provider of fiduciary services (each an Acceptable Replacement Agent ) to accede as new Agent at the same time as the present Agent retires. Noteholders may, by notice if representing more than 50 per cent of the Adjusted Nominal Amount, or if constituting a Majority in accordance with Condition 13 at a meeting or in a procedure in writing, require the Agent to resign. (b) If the Noteholders have not appointed a new Agent within thirty (30) days after the Agent has given the Issuer and the Noteholders notice of its resignation or been required to resign, the Agent has the right to appoint an Acceptable Replacement Agent as a new Agent. (c) If the Agent is subject to bankruptcy or financial reconstruction according to law or regulations from a supervising authority, the Noteholders shall immediately appoint a new Agent. (d) No resignation by the Agent shall take effect until a new Agent has been appointed and all necessary documentation to replace the Agent has been duly executed. (e) When a new Agent has been appointed, the resigning Agent shall bear no responsibility for acts or omissions during the time after the replacement of the Agent but shall continue to enjoy the rights under these Terms and Conditions in respect of any action it took or failed to take whilst acting as Agent. (f) The Agent s successor, the Issuer and the Noteholders shall have the same rights and obligations among themselves as they would have had if such successor would have been the original Agent The Agent is entitled to receive remuneration from the Issuer for acting as Agent in accordance with these Terms and Conditions. If the Agent, based on good reasons, believes that the Issuer is or will become insolvent the Agent is entitled to reserve reasonable remuneration from Noteholders for its continued work in accordance with these Terms and Conditions. If the Agent notifies the Noteholders that it will not take further actions each Noteholder may independently represent its holding of Notes against the Issuer without having to observe the provisions in Conditions 13 and 14. Hoist Kredit AB (publ) 18

19 15. THE ISSUING AGENT 15.1 The Issuer appoints the Issuing Agent to manage certain specified tasks under these Terms and Conditions and in accordance with the legislation, rules and regulations applicable to and/or issued by the CSD and relating to the Notes The Issuing Agent may retire from its assignment or be dismissed by the Issuer, provided that the Issuer has approved that a commercial bank or securities institution approved by the CSD accedes as new Issuing Agent at the same time as the old Issuing Agent retires or is dismissed. If the Issuing Agent is insolvent, the Issuer shall immediately appoint a new Issuing Agent, which shall replace the old Issuing Agent as issuing agent in accordance with these Terms and Conditions. 16. AMENDMENTS OF THE TERMS AND CONDITIONS, WAIVERS 16.1 The Issuer and the Agent, acting on behalf of the Noteholders, may agree to amend these Terms and Conditions or the Agent may acting on behalf of the Noteholders, waive a right under the Terms and Conditions provided that: (a) such amendment or waiver, in the opinion of the Agent, does not adversely affect the rights and interests of the Noteholders; (b) such amendment or waiver is of a formal, minor or technical nature or is made to correct a manifest error; or (c) such amendment or waiver has been duly approved by a Noteholders meeting or procedure in writing in accordance with Condition Any amendment or waiver of these Terms and Conditions shall be notified without delay by the Agent in accordance with Condition 18, setting out the date from which the amendments or waiver will be effective. The latest version of these Terms and Conditions (including any document amending these Terms and Conditions) shall be available on the website of the Agent Any amendment or waiver made in accordance with this Condition 16 is binding and effective on each Noteholder. 17. ALLOCATION OF PAYMENTS If both the Nominal Amount and interest are due for payment and if the available funds are insufficient to discharge all the amounts due and payable, the available funds shall first be applied towards payment of interest and secondly towards payment of the Nominal Amount. 18. NOTICES 18.1 Notices from the Issuer or the Agent to the Noteholders shall be given to the Noteholders at their addresses as registered with the CSD at the time of the notice. Any notice made by the Issuer must be copied to the Agent Notices to the Issuer shall be sent (with a copy to the Agent) to the Issuer s registered address at the time of the notice, a notice to the Issuer shall be addressed with attention to CEO Notices to the Agent shall be sent to the Agent s registered address at the time of the notice The language used for notices and communication under these Terms and Conditions shall be English and Swedish. 19. NOMINEE REGISTRATION In respect of Notes registered with authorised nominees in accordance with the Swedish Financial Instruments Accounts Act (1998:1479) the authorised nominee shall be deemed to be the Noteholder for the purpose of applying these Terms and Conditions, subject to the provisions about the voting rights and relevant majority of the Noteholders in Condition 13 or if otherwise evident from the context where the term Noteholder shall apply to the beneficiary owner of any Notes held by the authorised nominee. 20. LIMITATION OF LIABILITY ETC Neither the Agent nor the Issuing Agent shall be held responsible for any damage arising out of any legal enactment, or any measure taken by a public authority, or war, strike, lockout, boycott, blockade or any other similar circumstance (a Force Majeure Event ). The reservation in respect of strikes, lockouts, boycotts and blockades applies even if the Agent or the Issuing Agent itself takes such measures, or is subject to such measures The Agent or the Issuing Agent shall have no liability to the Noteholders if it has observed reasonable care. The Agent or Issuing Agent shall never be responsible for indirect damage with exception of gross negligence and wilful misconduct Should a Force Majeure Event arise which prevents the Agent or the Issuing Agent from taking any action required to comply with these Terms and Conditions, such action may be postponed until the obstacle has been removed The provisions in this Condition 20 apply unless they are inconsistent with the provisions of the Swedish Financial Instruments Accounts Act (1998:1479) which provisions shall take precedence. 21. GOVERNING LAW AND JURISDICTION 21.1 These Terms and Conditions and any non-contractual obligations relating thereto shall be governed by and construed in accordance with the material provisions of Swedish law Any dispute or claim arising in relation to these Terms and Conditions shall be determined by Swedish courts. Hoist Kredit AB (publ) 19

20 We hereby certify that the above Terms and Conditions are binding upon the Issuer. 24 June 2013 Hoist Kredit AB (publ.) We hereby undertake to act in accordance with the above Terms and Conditions to the extent they refer to us. 24 June 2013 Swedish Trustee AB (publ) As Agent on behalf of itself and the Noteholders Hoist International AB, being the sole shareholder in the Issuer, undertakes to in the event of a conversion of the Notes as set out in Condition 11, to the extent permitted by law and the Regulations and sufficient to cure the Non-Viability Event, vote for and otherwise use any reasonable endeavours to procure that each of the Noteholders as substitution for its Notes receives equity instruments in the Issuer as set out in this undertaking. Such equity instruments shall to the extent sufficient and permitted be: (i) preferential shares with a non-cumulative coupon of 15% p. a.; or (ii) if (i) above is not sufficient and/or permitted, ordinary shares issued at a conversion rate no less favourable to the Noteholders than the conversion rate applicable under the Existing Capital Base Instruments. In each case the shares may at the option of Hoist International AB carry limited voting rights and be redeemable (if sufficient and permitted). This undertaking is for the avoidance of doubt not an undertaking for Hoist International AB to provide new equity or loans to the Issuer, nor shall it in any way be interpreted as a guarantee in respect of any obligations of the Issuer under these Terms and Conditions. 24 June 2013 Hoist International AB Hoist Kredit AB (publ) 20