Equity Research Dividend

Transcript

Equity Basket - Certificate This document describes an investment opportunity created by SEB. The document is a sales material and shall not be considered as investment analysis or advice. Non capital guaranteed investment – the entire invested capital may be lost. Past performance is not indicative of future results, which may vary. Counterparty credit risk on SEB. Equity Research Dividend It is SEB’s assessment that Nordic equities offer attractive dividend yields close to the 10-year average. Equity Research’s Macro Equity Model suggests a sideways market development until mid-year 2015 and we believe that during these market conditions companies with a high estimated dividend yield together with a strong balance sheet can outperform the market. The certificate Equity Research Dividend gives the investor exposure to a concentrated equity basket with up to 20 Nordic companies during three dividend seasons. The equity basket is determined by four selection criteria and is selected in January 2015, November 2015 and November 2016. The certificate’s last day of trading is in June 2017. EQUITY RESEARCH DIVIDEND 2014 was a challenging year for equity investors in the Nordic countries. Underlying momentum was positive until mid-June 2014. The market then started to move sideways with many rises and falls. Equity Research’s Macro Equity Model is aimed at forecasting the SEB Nordic All-Cap Index that consists of 277 Nordic equities. The latest update of the Macro Equity Model suggests a sideways market development with rise and falls during the first half of 2015. Nordic equities offer attractive expected dividend yields, both relative to history and to global equity markets. On 9 January 2015 the SEB Nordic All-Cap Index traded at an estimated dividend yield of 3.4%. This is close to the 10-year average of 3.6%. It is also better than Bloomberg’s estimated dividend yield for the MSCI World and MSCI Nordic index of 2.5% and 2.4%. Equity Research’s assessment is that Nordic stocks with a high estimated dividend yield and a strong balance sheet could generate a risk adjusted return greater than the average for Nordic equities in a sideways market development with rise and falls. What does the certificate offer investors? The certificate Equity Research Dividend gives the investor exposure to a concentrated equity basket with up to 20 Nordic companies during three dividend seasons. CRITERIA FOR THE SHARE BASKET Market capitalisation: Only companies with a market capitalisation greater than 2 billion euro in order to ensure sufficient liquidity in the selected equities. ● ● Balance sheet strength: Companies with a net debt/EBITDA below 2.5 for the current year based on estimates from Equity Research. Not applicable on companies in the Finance sector if they are compliant with capital adequacy regulations. ● Recommendation: Only companies with a Buy or Hold recommendation by Equity Research. ● Dividend yield: Companies with an estimated dividend yield greater than the average for all Nordic companies analysed by Equity Research. THE OFFER IN BRIEF ● Certificate, the value of which is dependent on the development of an equity basket of up to 20 equally weighted companies. The constituents of the equity basket are decided by four selection criteria and will be performed in January 2015, November 2015 and November 2016. ● ● Dividends are reinvested in the respective underlying company. ● The Certificate is not capital guaranteed, which means that you as an investor stands the risk of losing the invested capital. ● The Certificate is aimed at institutional investors as well as SEB Private Banking clients. ● SEB will offer its clients the opportunity to buy and sell the Certificate on a daily basis. Last day of trading is 9 June, 2017 ● Repayment of certificates held on the Final Valuation Day will be made through redemption of the certificate. ● Start Date 20 Februrary 2015. End Date 15 June 2017. The starting value of the Certificate is 100 SEK. Minimum investment is 500 certificates. ● Certificate Equity Research Dividend will have an annual management fee of 1.2 per cent based on the market value of the certificate. The equity basket constituents are selected by using four selection criteria decided by Equity Research. The purpose of the selection criteria is to identify the up to 20 most attractive Nordic companies with a high dividend yield based on the latest analysis and estimates from Equity Research. The selection universe consists of all companies included in the SEB Nordic All-Cap Index. In order for a company to be included in the Index it has to be analysed by Equity Research and listed on a stock exchange in Denmark, Finland, Norway or Sweden. In January 2015 the SEB Nordic All-Cap index had 277 constituents. The screening process begins by eliminating all companies with a market capitalisation below 2 billion euro. Estimates from Equity Research is then used to select all companies with an estimated dividend yield greater than the average of all companies in SEB Nordic All-Cap Index and a net debt/EBITDA less than 2.5. In the last step a maximum of twenty companies with the highest estimated dividend yield and a Buy or Hold recommendation from Equity Research are selected as constituents for the equity basket. During the duration of the certificate, the selection process with the four criteria will be performed in January 2015, November 2015 and November 2016. All companies in the basket are equally weighted after the selection process. The certificate is issued in SEK. The underlying shares are listed in SEK, NOK, DKK and EUR, which means that the value of the Certificate will also depend on the development of the SEK in relation to the currencies in which the underlying security is denominated. Past performance is not indicative of future results, which may vary. The value of investments and the income derived from investments can go down as well as up. Future returns are not guaranteed, and a loss of principal may occur. COMPLETE TERMS The complete terms for the Certificate are available in Swedish in the SEB Base Prospectus dated 9th of November 2014 and supplements dated 5th of August 2014, 4th of November 2014 and 10th of February 2015 for continuous issuance of Certificates and Warrants (in Swedish: Grundprospekt SEB AB Certifikat- och Warrantprogram, available at sebgroup.com/en/InvestorRelations), together with the Final Terms and Conditions of the Certificate (in Swedish: Slutliga Villkor, available upon request from your sales representative). The terms on which the Certificate is issued shall be governed by and construed in accordance with Swedish law, without regard to or application of its conflict of law provisions.This document is a summary and cannot disclose all of the information set forth in the Base Prospectus and Final Terms and conditions referred to above. In case of any inconsistency between this document and either of the Base Prospectus and Final Terms and Conditions, the latter shall prevail. Equities Research Dividend (C1502ERD) Criteria for the equity basket Equity Research Dividend The equity basket Equity Research Dividend is based on four selection criteria. All four criteria must be met for any stock to be eligible for the basket. Please see below for a description of each criterion. The purpose of the criteria is to identify Nordic companies with a high dividend yield, strong balance sheet and a Buy or Hold recommendation based on Equity Research analysis and estimates. The equity basket is selected based on estimates as of 9 January 2015 and will be equally weighted. The duration of the certificate will extend over three dividend seasons the selection process will be performed in January 2015, November 2015 and November 2016 based on the four selection criteria together with the estimates and recommendations from Equity Research. Criterion 1: Market capitalisation: Only companies with a market capitalisation greater than 2 billion euro in order to ensure sufficient liquidity in the selected equities. Criterion 2: Balance sheet strength: Companies with a net debt/EBITDA below 2.5 for the current year based on estimates from Equity Research. Not applicable on companies in the Finance sector if they are compliant with capital adequacy regulations. Criterion 3: Recommendation: Only companies with a Buy or Hold recommendation by Equity Research. Criterion 4: Dividend yield: Companies with an estimated dividend yield greater than the average for all Nordic companies analysed by Equity Research and included in the SEB Nordic All-Cap Index. The dividend proposals are presented in the fourth quarterly report released in January/February. The selection process will be performed in November 2015 and November 2016 when Equity Research analysts has sufficient information regarding the current year to estimate the full year result and the dividend for the companies. The four selection criteria were applied on estimates and recommendation as of 9 January 2015. The selected equity basket contains 20 constituents from Finland, Norway and Sweden. The equity basket has an estimated average dividend yield of 5.5% compared to 3.4% for the SEB Nordic All-Cap Index. This is also higher than the estimated dividend yield of 2.5% for MSCI World and 3.4% for the baskets comparison index MSCI Nordic Countries (source Bloomberg). Past performance is not indicative of future results, which may vary. Equity Basket 9 Januari 2015 Country Marine Harvest Norway Nokian Tyres Finland Tele2 Sweden Nordea Sweden Fortum Finland Swedbank Sweden Elisa Finland TeliaSonera Sweden Statoil Norway Telenor Norway Gjensidige Norway Kesko Finland Sandvik Sweden Sampo Finland NCC Sweden Orion Finland Handelsbanken Sweden Kone Finland Metso Finland Industrivärden Sweden Average for the Equity Basket Sector Consumer Staples Consumer Discretionary Telecommunication Services Financials Utilities Financials Telecommunication Services Telecommunication Services Energy Telecommunication Services Financials Consumer Staples Industrials Financials Industrials Health Care Financials Industrials Industrials Financials Criteria for equity basket Equity Research estimate for SEB All-Cap Index February, 2015 Recommendation Buy / Hold Buy Hold Buy Buy Buy Hold Hold Hold Buy Buy Hold Buy Hold Hold Buy Hold Hold Hold Buy Hold Market Cap (EURm) 4,750 2,836 4,406 37,465 15,582 21,375 3,643 23,107 45,853 26,064 6,856 3,079 9,733 21,840 2,849 3,860 23,582 19,418 3,672 6,508 Dividend Yield 2014 Est 7.9% 7.1% 6.3% 6.3% 6.1% 6.0% 6.0% 6.0% 5.5% 5.1% 5.1% 5.0% 4.9% 4.9% 4.9% 4.9% 4.8% 4.2% 4.2% 4.2% 5.5% Net Debt/EBITDA 2014 Est 1.5 -0.2 1.5 0.0 1.2 0.0 1.9 1.3 0.4 1.3 0.0 -0.3 2.2 0.0 1.6 0.1 0.0 -1.0 0.9 0.0 Buy or Hold Min 2.000 Min 3.4% 3.4% Max 2.5 Equities Research Dividend (C1502ERD) Company descriptions Short description of the companies selected for the equity basket as of 9 January 2015. For more detailed information visit the company’s homepage. MARINE HARVEST Marine Harvest is a Norwegian based fish farming plant operator, raising mainly Atlantic salmon. The company operates hatcheries, processes and packages fish, as well as sells and markets the products. Marine Harvest operates in Canada, Norway and Scotland. The company sells salmon worldwide through its sales companies in Norway, Canada, the United Kingdom and the United States. Source: Bloomberg / Homepage: www.marineharvest.no GJENSIDIGE FORSIKRING ASA Gjensidige Forsikring ASA is a Norwegian insurance company. The company offers general insurance products to private individuals and businesses in the Nordic and Baltics region. Gjensidige Forsikring provides property insurance and insurances for retail customers and enterprises. Source: Bloomberg / Homepage: www.gjensidige.no NOKIAN RENKAAT OYJ Nokian Renkaat OYJ develops, manufactures, and markets summer and winter tires for cars and bicycles and tires for heavy machinery. The company primarily operates in the tire replacement market. Nokian also runs the Vianor tire chain which owns retail outlets in Scandinavia and the Baltic states. The company produces in Europe, the United States, and Asia. Source: Bloomberg / Homepage: www.nokianrenkaat.fi TELE2 AB Tele2 AB is a telecommunications company. The company offers mobile services, fixed broadband and telephony, data network services and content services. Tele2 operates throughout Europe and Eurasia. Source: Bloomberg / Homepage: www.tele2.com SWEDBANK AB Swedbank AB offers retail banking, asset management, financial, and other services. The bank offers deposits, mortgage and other loans, credit and smart cards, lease financing, installment loans on equipment and recreational vehicles, securities trading, export and import services, insurance, and real estate brokerage services. Source: Bloomberg / Homepage: www.swedbank.se NORDEA BANK AB Nordea Bank AB is a financial services group that provides banking services, financial solutions, and related advisory services. The group offers deposits, credit, investment banking, securities trading, and insurance products to private individuals, companies, institutions, and the public sector. Nordea services the Scandinavian countries and the Baltic Sea region. Source: Bloomberg / Homepage: www.nordea.se FORTUM OYJ Fortum OYJ provides a full range of energy related products and services. The company's activities cover the generation, distribution, and sale of electricity and heat and steam, as well as the operation of power plants, and energyrelated services. Fortum operates worldwide but mainly in Northern Europe. Source: Bloomberg / Homepage: www.fortum.com TELIASONERA AB TeliaSonera AB offers telecommunication services. The company offers mobile communications services as well as operates fixed networks throughout Eurasia. Source: Bloomberg /Homepage: www.teliasonera.com ELISA OYJ Elisa OYJ provides telecommunication solutions. The company provides local, long distance, mobile telephone, and data transmission services. Elisa also operates as a service integrator by connecting customers' telecom solutions and related IT (information technology) applications. The company sells it services to private individuals and businesses in Finland. Source: Bloomberg / Homepage: www.elisa.fi SAMPO OYJ Sampo OYJ offers multi-line insurance. The company offers life and pension and property/casualty insurance. Source: Bloomberg/Homepage: www.sampo.fi February, 2015 METSO OYJ Metso Corporation is a process performance provider, with customers in the mining, construction and oil & gas industries. The company’s focus is on the continuous development of intelligent solutions that improve sustainability and profitability. Meto’s shares are listed on the Nasdaq OMX Helsinki Ltd. The company employs around 16,000 professionals in 50 countries. Source: Bloomberg / Homepage: www.metso.com STATOIL ASA Statoil ASA explores for, produces, transports, refines, and trades oil and natural gas. The company explores for oil in Europe, Africa, the Middle East, Asia, and the Americas. Source: Bloomberg / Homepage: www.statoil.com TELENOR ASA Telenor ASA researches, develops and provides telecommunications, information and media services. The company offers telephone services, as well as installs and operates complete IT (information technology) systems. Telenor provides phone card, mobile telephone, satellite communications, paging and mobile data services. Telenor operates in Norway and internationally. Source: Bloomberg / Homepage: www.telenor.no NCC AB NCC AB is a construction company. The company plans, develops, constructs, and renovates commercial buildings, schools, sports facilities, car parks, roads, bridges, airports, and others. NCC also conducts surfacing work for roads and produces asphalt mix, aggregates, and concrete and operates a machinery unit. The company also sells investment properties. NCC is active in northern Europe. Source: Bloomberg / Homepage: www.ncc.se SANDVIK AB Sandvik AB is a high-technology engineering group. The company develops, manufactures, and markets tools for metalworking applications, machinery and tools for rock excavation, stainless steel products, special alloys, and resistance heating materials and process systems. Sandvik markets its products to industrial companies throughout the world, and tools can also be purchased online. Source: Bloomberg / Homepage: www.sandvik.se KESKO OYJ Kesko OYJ, through subsidiaries, operates wholesale and retail stores. The company provides trading sector services with delivery sales and wholesale services of hardware and builders supplies, home improvement trade, interior decoration, home goods, animal feeds, sporting goods, chemicals and machinery. Kesko OYJ also imports passenger cars and commercial vehicles. Source: Bloomberg / Homepage: www.kesko.fi SVENSKA HANDELSBANKEN AB Svenska Handelsbanken AB offers deposits and commercial banking services. The banks services include corporate finance, securities brokerage, commodity trading, structured products, custody services and institutional asset management services. Svenska Handelsbanken operates in Europe, Asia, and the United States. Source: Bloomberg /Homepage: www.handelsbanken.se ORION OYJ Orion OYJ develops and manufactures pharmaceuticals and diagnostic kits. The company produces hormone therapies and drugs to treat central nervous system disorders, cardiovascular diseases and urological disorders, and in vitro diagnostic kits used in doctor's offices and small laboratories. Source: Bloomberg / Homepage: www.orion.fi KONE OYJ Kone OYJ provides solutions for the installation, maintenance, and modernization of elevators and escalators and the maintenance of automatic building doors. Source: Bloomberg/ Homepage: www.kone.com INDUSTRIVÄRDEN AB Industrivärden AB is an investment company. The company's holdings consist of a portfolio of listed Nordic industrial companies. Source: Bloomberg Homepage: www.industrivarden.se Equities Research Dividend (C1502ERD) Historical simulation of the criteria for the equity basket The graphs on the next page provides a historical simulation of how the equity basket would have developed if it the selection criteria would have been applied on Equity Research’s estimates and recommendations as of 30 November 2009 to 2013. The graph shows the development excluding fees for a 5-year to a 1-year holding period. The selection criteria has been chosen in order to identify an equity basket with the possibility to generate an excess return in a sideway market development with rise and falls. In the historical simulation the selection criteria has been applied on the selection universe SEB Nordic All-Cap Index during a time period where the market had a positive development. The simulation shows that during a positive market development the selection criteria have chosen an equity basket that does not outperform but follows the reference index MSCI Nordic Countries Gross. In 2014 when the market development started moving sideways with rise and falls the equity basket showed a positive performance of 27.1% for the fifth year (30/11/2013 to 30/11/2014) compared to the reference index MSCI Nordic Countries Gross that generated a positive return of 17.9% for the same time period. Past performance is not indicative of future results, which may vary. The table below shows the constituents of the equity baskets based on the estimates and recommendations from Equity Research as of 30 November each year. November 2009 Est dividend November 2010 yield Tele2 TeliaSonera Wärtsilä Sanoma Fortum Sampo AstraZeneca Elisa Securitas Skanska Tryg Nokia Hennes & Mauritz Telenor Atlas Copco G4S Handelsbanken Statoil Swedish Match SKF 6.6% 6.3% 6.0% 5.7% 5.5% 5.4% 5.3% 4.9% 4.9% 4.5% 4.4% 4.3% 4.0% 3.9% 3.4% 3.2% 3.2% 3.2% 3.1% 3.0% Average 4.5% February, 2015 Marine Harvest Tele2 Elisa Millicom Orion Sampo Sanoma Nokia AstraZeneca Statoil TeliaSonera Skanska Fortum DNB Securitas UPM Handelsbanken Hennes & Mauritz Kesko Telenor Est dividend November 2011 yield 10.4% 8.9% 8.2% 6.9% 6.7% 5.8% 5.8% 5.6% 5.5% 5.1% 5.0% 5.0% 4.9% 4.7% 4.3% 4.2% 4.0% 4.0% 4.0% 3.9% 5.7% Tele2 TDC Elisa Orion Swedbank Millicom Gjensidige DNB TeliaSonera Sampo AstraZeneca Fortum Skanska Metso Telenor Electrolux Stora Enso Handelsbanken Securitas Nokian Tyres Est dividend yield 15.1% 9.5% 8.7% 7.9% 7.1% 7.1% 7.0% 7.0% 6.5% 6.2% 6.0% 5.9% 5.7% 5.6% 5.6% 5.6% 5.4% 5.1% 5.1% 4.9% 6.8% November 2012 TDC Tele2 Metso Fred Olsen Energy Gjensidige UPM TeliaSonera Orion Millicom AstraZeneca Stora Enso Skanska Orkla Tryg Swedbank Sampo Kesko Ericsson Nokian Tyres Nordea Est dividend yield 11.8% 11.6% 7.7% 7.6% 7.0% 6.9% 6.7% 6.3% 6.3% 6.1% 6.0% 5.7% 5.4% 5.4% 5.2% 5.1% 4.9% 4.4% 4.4% 4.2% 6.4% November 2013 Elisa Orion Swedbank TeliaSonera Tele2 Gjensidige Orkla Metso Statoil TGS-Nopec Skanska Nokian Tyres AstraZeneca Securitas Nordea Sampo Kesko Marine Harvest Coloplast Electrolux Est dividend yield 7.0% 6.7% 6.3% 6.0% 5.5% 5.4% 5.2% 5.1% 5.1% 5.0% 5.0% 4.9% 4.9% 4.8% 4.7% 4.5% 4.4% 4.2% 4.2% 4.1% 5.2% Equities Research Dividend (C1502ERD) 30 November 2009 to 30 November 2014 Equity basket Reference index = MSCI Nordic Countries Gross Return Source: Bloomberg 30 November 2011 to 30 November 2014 Equity basket Reference index = MSCI Nordic Countries Gross Return February, 2015 Source: Bloomberg Equities Research Dividend (C1502ERD) CERTIFICATE WHAT IS A CERTIFICATE? A certificate is a security issued by a bank. The value of the certificate is dependent on the value of a certain underlying asset. This specific certificate provides exposure to a basket of equities. As an owner of this certificate you as an investor do not have any direct ownership in the underlying asset. The issuing bank (the issuer, in this case SEB) will instead during the lifetime of the certificate value the certificate according to the terms and conditions regulating the product. If you keep the certificate to maturity the issuer will pay out the final value in accordance with the terms and conditions. As an investor, you therefore assume, in addition to the market risk in the product, also a counterparty risk towards the issuer. Read more about issuer counterparty risk under the section “Risks”. EASY TO EXECUTE Certificates are generally traded as easily as equities through a custody account or similar. It can also be held in certain “Kapitalförsäkringar” and “Investeringssparkonto” (in Sweden). Certificates can be listed at a regulated market or traded on demand through your SEB advisor. This certificate can be bought and sold on a daily basis through your SEB advisor at a price based on the prevailing prices of the underlying equity basket. The certificate will be listed on the Nordic Derivatives Exchange (NDX). CERTIFICATES WITH DIFFERENT RISK LEVELS Certificates are available in different versions with varying risk levels depending on the underlying asset. You as an investor can choose between different risk levels depending on your preferences. The more risk-willing investor is able to invest in leveraged certificates. This certificate does not have any leverage. The exposure to the underlying asset is equal to the amount invested in the certificate. EXPECTED RETURN The return of the certificate will be dependent on the development of the underlying equity basket, less the management fee. An index will be calculated based on the development of the equity basket. The index will increase in value if the underlying equities increase in value and vice versa. The Equity Research Dividend follows the index, which means that the value of the certificate will increase when the index value increases and decrease when the index value decreases. The value of the equity basket is dependent on each constituent’s share price development as well as the development of the currency in which each constituent is listed in against the Swedish Krona (“SEK”). The equity basket will have a positive development if the February, 2015 share price increases and also if the respective currency increases against the SEK. It is not possible to provide a reasonable expected return of the certificate. The certificate will not distribute any dividends. Potential dividends from the underlying constituents will be reinvested in the distributing company after deduction for relevant withholding tax. IMPORTANT ASPECTS TO CONSIDER The certificate is issued by Skandinaviska Enskilda Banken AB (publ) (”SEB”) creating a counterparty risk towards SEB in addition to the market risk connected with the certificate. The value of the certificate is based on the price of the underlying asset, in this case an equity basket. Investors in the certificate do not have any direct ownership in the underlying asset. Purchases and divestments of the certificate will be possible through SEB on a daily basis until four banking days before the final valuation date of the certificate 15 June, 2017. An investment decision should be based on the investment proposal’s own merits but also on how the investment fits into the overall investment portfolio. This certificate is aimed at someone who wants a focused exposure towards Nordic companies with an estimated high dividend yield, strong balance sheet and a Buy or Hold recommendation by Equity Research. TAXATION This information is only relevant for Swedish physical tax subjects who are liable for tax paid in Sweden. For other physical persons other rules will be applicable. Certificates are liable for tax. Tax regulations may change over time. An investor who is unsure of the taxation of a certificate should consult with a professional tax advisor. The tax consequences for each investor may differ according to the specific situation and prerequisites. CERTIFICATE COSTS Equity Research Dividend will have an annual management fee of 1.2 per cent based on the market value of the certificate. The management fee will be deducted from the value of the certificate on a daily basis. Commission is applicable throughout the lifetime of the certificate on the full invested amount according to SEB’s price list at any given point in time. No commission is charged at expiry of the certificate. Equities Research Dividend (C1502ERD) FACT SHEET Product name Short name ISIN Listing Clearing Currency Start value Start date Last day of trading End date Final payment date Equity Research Dividend C1502ERD SE0006726584 NDX Euroclear Sweden SEK 100 SEK 20 February, 2015 9 June, 2017 15 June, 2017 10 banking days after the end date Minimum investment 500 certificates. Return The value of the certificate is based on the performance of the equity basket Equity Research Dividend. Important factors affecting the value of the equity basket are the performance of the share prices and dividends for the underlying shares as well as currency movements relating to the underlying currencies against the SEK. Equity basket The equity basket Equity Research Dividend consists of companies listed on Nordic stock exchanges and is selected using four selection criteria in order to identify the up to 20 most attractive companies with the highest dividend yield based on Equity Research estimates and recommendations. The equity basket will be selected on three occasions during the duration of the certificate. January 2015, November 2015 and November 2016. The basket will be equally weighted after each selection. Final Valuation Closing prices on the final valuation date is based on the average closing price for each share for the last three valuation dates leading up to the final valuation date adjusted for any transaction costs and/or relevant taxes. The purpose of the average period valuation methodology is to minimise risks for extreme volatility in share prices affecting the value of the certificate. Currency rates are set on the final valuation date. Secondary market The certificate will be listed on the Nordic Derivatives Exchange. SEB will provide the possibility to buy or sell certificates throughout the lifetime of the certificate up until four days prior to the final valuation date. Please contact your SEB advisor for trading. Market disruption event and other events In the case of a market disruption event or other significant events, SEB reserves the right to adjust the value of the certificate or make other necessary changes to the terms and conditions, which SEB deems fit in order to reflect the value of each constituent. A market disruption event or other events is in this case defined as situations where trading in the underlying constituent is disrupted or if there are no official quotes available. Early redemption SEB will inform the investor in case of an early redemption of the certificate. SEB has the right to call the Certificate for settlement at SEB’s own discretion, provided that SEB will use such efforts as it reasonably deems practical to preserve the value of, or provide reasonable value for the Certificate. No commission is charged in relation to an early redemption. February, 2015 Commission In accordance with SEB’s price list at any given time. No commission at expiry. Management fee 1.2 per cent on an annual basis, until the final valuation date, based on the value of the certificate. Product Group D Product Group D includes financial instruments with increased complexity or risk for economic loss. You may lose the entire invested amount. Please find more information at www.seb.se, Spara & Placera, Aktier & andra placeringar, “Regler för hantering av värdepapper”. Issuer Skandinaviska Enskilda Banken AB (publ) is under the supervision of the Swedish FSA (”Finansinspektionen”). Current long term rating of the issuer is A+ (outlook negative) according to Standard & Poor’s, A1 (outlook stable) according to Moody’s and A+ (outlook stable) according to Fitch. Ratings can be subject to change and it is the responsibility of the investor to be up to date with the actual rating levels. Complete terms and conditions The certificate is regulated by a prospectus specifying terms and conditions of the certificate. For complete terms and conditions an investor should read the prospectus for the certificate dated as of July 9, 2014 including amendments as of August 5, 2014, November 4, 2014 and February 10, 2015. The prospectus is written in Swedish and SEB will during the lifetime of the certificate communicate with investors in Swedish and English. Terms and conditions as well as any marketing are regulated by Swedish law and any disputes will be handled by Stockholms tingsrätt. For more information about SEB and its services, please see ”Information om SEB och dess värdepapperstjänster” which you will find at www.seb.se, Spara & Placera, Aktier & andra placeringar, ”Regler för hantering av värdepapper”. Reservations SEB reserves the right to cancel all or parts of the certificate if an event of economic, financial, political or other occurs and this, according to SEB could have a detrimental effect on a successful launch of the certificate. Tax regulations for Swedish, physical tax subjects As the return of the certificate is unknown and not predictable in any way, the return cannot be considered as interest. The return should be considered as capital gains and be taxed according to the principles applicable for this return. The difference between invested amount and received amount at sale of redemption should be taxable as capital gains. Please see more on taxation at www.seb.se. Complaints Any complaints relating to this product should be put forward to the department within SEB which has distributed the product. If complaints still exist after this contact, please contact: SEB Kundrelationer Telephone: 0771-62 10 00 106 40 Stockholm Additional information on www.seb.se. complaints is available at RISKS Credit risk The issuer of the certificate is SEB. As a holder of the certificate you therefore have credit risk on SEB. It is therefore important that the investor is able to evaluate SEB’s likelihood of being able to serve its commitments according to the certificate during its lifetime. An investment in the certificate is not covered by the governmental deposit guarantee. Liquidity risk and secondary market SEB will provide a secondary market in the certificate through trading with SEB. SEB has the right to stop sells and purchases of certificates under certain periods e.g. due to poor liquidity in the underlying asset, at market disruptions or in the case of technical errors at SEB or EuroclearSweden AB. The certificate will be listed at NDX but SEB will not act as a market maker on NDX. Specific risk related to the underlying equity basket A basket often consists of a limited number of shares, focused on the same sector or equities with similar risk profiles. This leads to a risk for higher volatility than a broad index exposure at the same time as the risk towards the specific sectors and risk factors are higher in relation to a broad index exposure. Please note that each of the companies included in the basket carry with them individual investment risks, whether relating to their own specific circumstances, or to the sectors and geographic markets in which they operate. Before investing in the Certificate you are urged to review such risks, for example by referring to the most recent investment research published by SEB or third party research providers on the companies concerned. Currency risk Please note that the investor is not secured against the currency risk resulting from the fact that the currency of the certificate does not correspond to the currency of the assets linked to the performance of the certificate. The investment is therefore exposed to currency fluctuations and the value of the certificate in SEK will increase or decrease relative to the values of the shares in the basket in their domestic currencies. Market risk Investments in financial instruments are always speculation providing the possibility to positive returns and gains but also create a risk for negative returns and losses. When you buy a certificate you are exposed to a risk of the price development of the underlying asset. This is called market risk. If the price of the underlying asset decreases you will have a negative return as a consequence of the decrease. This certificate does not have any leverage. The exposure to the underlying asset is equal to the amount invested in the certificate. No capital guarantee The Certificate is not capital guaranteed and investors must be aware that they may lose all or a substantial part of their investment. INFORMATION General Investments in financial instruments are always speculation providing the possibility to positive returns and gains but also creating a risk for negative returns and losses. The material in this document should not be seen as individual advisory but as a supportive tool for investment decision. SEB is not responsible for the economic result of any decisions taken based on this document. SEB assumes no responsibility for the material describing all aspects of the investment. Before any investment the investor is responsible for securing full understanding of the financial instrument and its characteristics and inherent risks. This is important since the financial risks vary between different instruments. SEB and other issuers issue many different certificates. Even if these products may have similar names, there could be significant differences. The investor therefore needs to be aware that the possibility to compare different certificates, including the pricing component, may be difficult. To get a complete picture of the offering, the investor should read the Base prospectus before investing in the certificate. If doubts still remain the investor should contact an advisor at SEB. The issuer of the certificate is SEB. This means that you as an investor will have a credit risk towards SEB. Repayment and potential returns are dependent on SEB’s ability to complete its commitment on the final payment date. An investment in this certificate is not included in the governmental guarantee for deposits. For more information on investor protection please refer to: ”Information om SEB och dess värdepapperstjänster”, www.seb.se, Spara & Placera, Aktier & andra placeringar, Regler för hantering av värdepapper. Advisory Whether or not an investment in the certificate is suitable must always be evaluated based on the individual investor and its specific situation. This document should not be seen as investment advice, financial advice or any other type of advice to investors. The investor therefore needs to evaluate the investment based on its own perspective or if need be consult with its professional advisers. An investment in the certificate is only suitable for investors with relevant experience and knowledge to make a subjective evaluation of the risks associated with the investment and it is also suitable only for investors whose investment goal is in accordance with the specific investment, its exposure, tenor and other characteristics. Taxation This information is only relevant for Swedish physical tax subjects who are liable for tax paid in Sweden. For other physical persons other rule will be applicable. Certificates are liable for tax. Tax regulations may change over time. An investor who is unsure of the taxation of a certificate should consult with a professional tax advisor. The tax consequences for each investor may differ according to the specific situation and prerequisites. Contact Patrick Åhrén SEB Merchant Banking +468 506 233 86 [email protected] February, 2015