EXECUTION VERSION Final Terms dated 13 April 2012 MUNICIPALITY FINANCE PLC (Kuntarahoitus Oyj) Issue of SEK 650,000,000 2.750 per cent. Notes due 17 April 2017 Guaranteed by THE MUNICIPAL GUARANTEE BOARD (Kuntien takauskeskus) under the 22,000,000,000 Programme for the Issuance of Debt Instruments The Base Prospectus referred to below (as completed by these Final Terms) has been prepared on the basis that, except as provided in sub-paragraph (ii) below, any offer of Notes in any Member State of the European Economic Area which has implemented the Prospectus Directive (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 the Notes. Accordingly any person making or intending to make an offer of the Notes may only do so: (i) (ii) in circumstances in which no obligation arises for the Issuer or any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such offer; or in those Public Offer Jurisdictions mentioned in Paragraph 36 of Part A below, provided such person is one of the persons mentioned in Paragraph 36 of Part A below and that such offer is made during the Offer Period specified for such purpose therein. Neither the Issuer nor any Dealer has authorised, nor do they authorise, the making of any offer of Notes in any other circumstances. The expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU. PART A CONTRACTUAL TERMS Terms used herein shall be deemed to be defined as such for the purposes of the conditions (the "Conditions") set forth in the Base Prospectus dated 1 June 2011 which constitutes a base prospectus (the "Base Prospectus") for the purposes of the Prospectus Directive (Directive 2003/71/EC) (the "Prospectus Directive"). This document constitutes the Final Terms of the Notes described herein for the purposes of Article 5.4 of the Prospectus Directive and must be read in conjunction with such Base Prospectus. Full information on the Issuer, the Guarantor and the Notes described herein is only available on the basis of the combination of these Final Terms and the Base Prospectus. The Base Prospectus is available for viewing at the office of the Issuer at Jaakonkatu 3 A, 00100 Helsinki, Finland and on the - 1 -
Issuer's website www.munifin.fi and copies may be obtained from the office of the Issuer at Jaakonkatu 3 A, 00100 Helsinki, Finland. 1. (i) Issuer: Municipality Finance Plc (Kuntarahoitus Oyj) (ii) Guarantor: The Municipal Guarantee Board (Kuntien takauskeskus) 2. Series Number: 47/2012 3. Specified Currency or Currencies: Swedish Krona ("SEK") 4. Aggregate Nominal Amount of the Series: SEK 650,000,000 5. (i) Issue Price: 101.037 per cent. of the Aggregate Nominal Amount 6. (i) Specified Denominations: SEK 10,000 (ii) Calculation Amount: SEK 10,000 7. (i) Issue Date: 17 April 2012 (ii) Interest Commencement Date: 17 April 2012 8. Maturity Date: 17 April 2017 9. Interest Basis: 2.750 per cent. Fixed Rate (further particulars specified below) 10. Redemption/Payment Basis: Redemption at par 11. Change of Interest or Redemption/Payment Basis: 12. Put/Call Options: 13. (i) Status of the Notes: Senior (ii) Status of the Guarantee: Senior (iii) Date Board approval for issuance of Notes and Guarantee obtained: 14. Method of distribution: Syndicated - 2 -
PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE 15. Fixed Rate Note Provisions Applicable (i) Rate of Interest: 2.750 per cent. per annum payable annually in arrear (ii) Interest Payment Date(s): 17 April in each year commencing on 17 April 2013 and ending on the Maturity Date, not adjusted (iii) Fixed Coupon Amount: SEK 275 per Calculation Amount (iv) Broken Amount(s): (v) Day Count Fraction: Actual/Actual (ICMA) (vi) Other terms relating to the method of calculating interest for Fixed Rate Notes: 16. Floating Rate Note Provisions 17. Zero Coupon Note Provisions 18. Index-Linked Interest Note Provisions 19. Dual Currency Note Provisions PROVISIONS RELATING TO REDEMPTION 20. Call Option 21. Put Option 22. Final Redemption Amount of each Note SEK 10,000 per Calculation Amount 23. Early Redemption Amount Early Redemption Amount(s) per Calculation Amount payable on redemption for taxation reasons or on event of default or other early redemption and/or the method of calculating the same (if required or if different from that set out in the Conditions): As set out in the Conditions - 3 -
GENERAL PROVISIONS APPLICABLE TO THE NOTES 24. Form of Notes: Bearer Notes: 25. New Global Note: No Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes in the limited circumstances specified in the Permanent Global Note. 26. Financial Centre(s) or other special provisions relating to Payment Dates: 27. Talons for future Coupons or Receipts to be attached to Definitive Notes (and dates on which such Talons mature): London, Stockholm and TARGET Business Day No 28. Details relating to Partly Paid Notes: amount of each payment comprising the Issue Price and date on which each payment is to be made and consequences (if any) of failure to pay, including any right of the Issuer to forfeit the Notes and interest due on late payment: 29. Details relating to Instalment Notes: amount of each instalment, date on which each payment is to be made: 30. Other terms or special conditions: - 4 -
DISTRIBUTION 31. (i) If syndicated, names and address of Managers and underwriting commitments: HSBC Bank plc 8 Canada Square London E14 5HQ United Kingdom SEK 580,000,000 Bank Vontobel AG Gotthardstrasse CH-8022 Zurich SEK 10,000,000 BNP Paribas 10 Harewood Avenue London NW1 6AA United Kingdom SEK 10,000,000 Daiwa Capital Markets Europe Limited 5 King William Street London EC4N 7AX United Kingdom SEK 10,000,000 Danske Bank A/S 2-12 Holmens Kanal DK-1092 Copenhagen K Denmark SEK 10,000,000 Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank International) Croeselaan 18 3521 CB Utrecht The Netherlands SEK 10,000,000 The Toronto-Dominion Bank 60 Threadneedle Street London EC2R 8AP United Kingdom SEK 10,000,000-5 -
(ii) (iii) Date of Subscription Agreement: Stabilising Manager(s) (if any): Zurich Cantonalbank Josefstrasse 222 8005 Zurich Switzerland SEK 10,000,000 13 April 2012 32. If non-syndicated, name and address of Dealer: 33. TEFRA: The D Rules are applicable 34. Total commission and concession: 35. Additional selling restrictions: 1.375 per cent. of the Aggregate Nominal Amount Hong Kong Each Dealer has represented and agreed that: a. it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any Notes, except for Notes which are a "structured product" as defined in the Securities and Futures Ordinance (Cap 571) of Hong Kong (the "SFO"), other than (a) to "professional investors" as defined in the SFO and any rules made under the SFO; or (b) in other circumstances which do not result in the document being a "prospectus" as defined in the Companies Ordinance (Cap. 32) of Hong Kong (the "Companies Ordinance") or which do not constitute an offer to the public within the meaning of the Companies Ordinance; and b. it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Notes, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Notes which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" as defined in the SFO and any rules made - 6 -
under the SFO. Singapore Neither the Base Prospectus nor this Final Terms have been registered as a prospectus with the Monetary Authority of Singapore under the Securities and Futures Act, Cap 289 of Singapore (the "Securities and Futures Act") and accordingly, the Notes may not be offered or sold, nor may the notes be the subject of an invitation for subscription or purchase, nor may the Base Prospectus, this Final Terms or any other document or material in connection with the offer or sale, or invitation for subscription or purchase of the Notes be circulated or distributed, whether directly or indirectly, to any person in Singapore other than (1) to an institutional investor (as defined in Section 4A of the Securities and Futures Act) pursuant to Section 274 of the Securities and Futures Act, (2) to a relevant person (as defined in Section 275(2) of the Securities and Futures Act) pursuant to Section 275(1) of the Securities and Futures Act, or any person pursuant to an offer referred to in Section 275(1A) of the Securities and Futures Act, and in accordance with the conditions specified in Section 275 of the Securities and Futures Act or (3) otherwise pursuant to, and in accordance with, the conditions of any other applicable provision of the Securities and Futures Act. Where the Notes are acquired by persons who are relevant persons specified in Section 276 of the Securities and Futures Act, namely: a. a corporation (which is not an accredited investor (as defined in Section 4A of the Securities and Futures Act)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or b. a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, the shares, debentures and units of shares and debentures of that corporation or the beneficiaries rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Notes pursuant to an offer made under Section 275 of the Securities and Futures Act except: a. to an institutional investor (under Section 274 of the - 7 -
Securities and Futures Act) or to a relevant person as defined in Section 275(2) of the Securities and Futures Act, or any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights or interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets and further for corporations, in accordance with the conditions specified in Section 275(1A) of the Securities and Futures Act; b. where no consideration is or will be given for the transfer; c. where the transfer is by operation of law; or d. as specified in Section 276(7) of the Securities and Futures Act. Sweden Neither the Base Prospectus nor this Final Terms may not be distributed in circumstances that would require a prospectus to be prepared pursuant to the Swedish Financial Instruments Trading Act 1991 (lagen (1991:980) om handel med finansiella instrument). This means that an offer may only be made under the following circumstances: (a) the offer is addressed to Qualified Investors; (b) the offer is addressed to fewer than 100 natural or legal persons per Member State of the European Economic Area (the "EEA"), other than Qualified Investors; (c) the offer is addressed to investors who acquire Units for a total consideration of at least EUR 50,000 per investor; (d) the denomination per unit of the Units offered amounts to at least EUR 50,000; (e) the total consideration of the offer in any 12-month period is not more than EUR 1,000,000; and/or (f) the Units offered are promissory notes with a maturity of less than one year. For these purposes the term "Qualified Investors" means: (1) legal entities which are authorised to act on the financial markets; (2) legal entities whose corporate purpose is solely to invest in financial instruments; (3) national and regional governments, central banks, the European Central Bank, the European Investment Bank, the International Monetary Fund and other similar supranational institutions; (4) legal persons which according to each of their last two annual or consolidated accounts, meet at least two of the following three criteria: (a) an average number of employees during the financial year of at least 250; (b) a total balance sheet exceeding EUR 43,000,000; and (c) an annual net turnover - 8 -
exceeding EUR 50,000,000; and (5) natural persons, if they are considered as qualified investors by another EEA member state, and other legal persons. Accordingly, these Final Terms and Conditions have not been, nor will they be, registered or approved by the SFSA for the purposes of the Financial Instruments Trading Act 1991. Switzerland The Notes may not be publicly offered, sold or advertised, directly or indirectly, in, into or from Switzerland and will not be listed on the SIX Swiss Exchange or on any other exchange or regulated trading facility in Switzerland. Neither this Final Terms, the Base Prospectus, nor any other offering or marketing material relating to the Notes constitutes a prospectus as such term is understood pursuant to article 652a or article 1156 of the Swiss Code of Obligations or a listing prospectus within the meaning of the listing rules of the SIX Swiss Exchange or any other regulated trading facility in Switzerland, and neither this Final Terms, the Base Prospectus nor any other offering or marketing material relating to the Notes may be publicly distributed or otherwise made publicly available in Switzerland. 36. Non-exempt Offer: An offer of the Notes may be made by the Managers other than pursuant to Article 3(2) of the Prospectus Directive in Austria, Belgium, Denmark, France, Luxembourg, Germany, Ireland, The Netherlands and Sweden ("Public Offer Jurisdictions") during the period from the date of publication of these Final Terms until the Issue Date ("Offer Period"), provided, however, that the Offer Period in Austria will not commence until the day after the registration of the issue terms with the Registration Office (Meldestelle) has been duly made as required by the Austrian Capital Markets Act. See further Paragraph 10 of Part B below. PURPOSE OF FINAL TERMS These Final Terms comprise the final terms required for the issue and public offer in the Public Offer Jurisdictions and admission to trading on the Regulated Market of the London Stock Exchange plc of the Notes described herein pursuant to the 22,000,000,000 Programme for the Issuance of Debt Instruments of Municipality Finance Plc (Kuntarahoitus Oyj) guaranteed by The Municipal Guarantee Board (Kuntien takauskeskus). - 9 -
PART B OTHER INFORMATION 1. LISTING 2. RATINGS (i) Listing: Application has been made for the Notes to be admitted to listing on the Official List of the United Kingdom Financial Services Authority with effect from the Issue Date. (ii) Admission to trading: Application has been made for the Notes to be admitted to trading on the Regulated Market of the London Stock Exchange with effect from the Issue Date. Ratings: The Notes to be issued have been rated: 1 S & P: AAA Moody's: Aaa The ratings set out above are issued by Standard & Poor s Credit Market Services Europe Limited and Moody's Investors Service Limited, each of which is established in the European Union and is registered under Regulation (EU) No 1060/2009 (the "CRA Regulation") of the European Parliament and of the Council of 16 September 2009 on credit rating agencies. In general, European regulated investors are restricted from using a rating for regulatory purposes if such rating is not issued by a credit rating agency established in the European Union and registered under the CRA Regulation unless the rating is provided by a credit rating agency operating in the European Union before 7 June 2010 which has submitted an application for registration in accordance with the CRA Regulation and such registration is not refused. 1 Issuer to confirm that ratings are correct. - 11 -
3. INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE OFFER Save as described in "Subscription and Sale" in the Base Prospectus, so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer. 4. REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL EXPENSES 5. YIELD (i) Reasons for the offer: See "Use of Proceeds" in Base Prospectus (ii) Estimated net proceeds: SEK 647,803,000 (iii) Estimated total expenses: EUR 5,000 Indication of yield: 2.527 per cent. per annum 6. HISTORIC INTEREST RATES floating rates only As set out above, the yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield 7. PERFORMANCE OF INDEX/FORMULA/OTHER VARIABLE, EXPLANATION OF EFFECT ON VALUE OF INVESTMENT AND ASSOCIATED RISKS AND OTHER INFORMATION CONCERNING THE UNDERLYING index-linked or other variable-linked notes only 8. PERFORMANCE OF RATES OF EXCHANGE AND EXPLANATION OF EFFECT ON VALUE OF INVESTMENT dual currency notes only 9. OPERATIONAL INFORMATION Intended to be held in a manner which would allow Eurosystem eligibility: ISIN Code: No. XS0772041215 Common Code: 077204121 CUSIP Number: - 12 -
Any clearing system(s) other than Euroclear Bank SA/NV, Clearstream Banking société anonyme and DTC and the relevant identification number(s): Delivery: Names and addresses of additional Paying Agent(s) (if any): Delivery against payment 10. (Retail issues only) TERMS AND CONDITIONS OF THE OFFER Offer Price: Issue Price Conditions to which the offer is subject: Description of the application process: Description of possibility to reduce subscriptions and manner for refunding excess amount paid by applicants: Details of the minimum and/or maximum amount of application: Details of the method and time limits for paying up and delivering the Notes: The Offer Period in Austria will not commence until the day after the filing with the Registration Office (Meldestelle) has been duly made as required by the Austrian Capital Markets Act. There are no pre-identified allotment criteria. The Managers will adopt allotment and/or application criteria in accordance with customary market practices and applicable laws and regulations and/or as otherwise agreed between them. The Notes will be issued by the Issuer to the Managers on a delivery versus payment basis on the Issue Date. Manner in and date on which results of the offer are to be made public: Procedure for exercise of any right of pre-emption, negotiability of subscription rights and treatment of subscription rights not exercised: Categories of potential investors to which the Notes are offered and whether tranche(s) have been reserved - 13 -
for certain countries: Process for notification to applicants of the amount allotted and the indication whether dealing may begin before notification is made: Amount of any expenses and taxes specifically charged to the subscriber or purchaser: Name(s) and address(es), to the extent known to the Issuer, of the placers in the various countries where the offer takes place. None known to the Issuer - 14 -