UPDATED CALCULATION OF REGISTRATION FEE
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Proposed Maximum
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Proposed Maximum
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Title of Each Class of
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Amount To Be
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Aggregate Price
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Aggregate Offering
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Amount of
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Securities To Be Registered
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Registered
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Per Unit
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Price
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Registration Fee
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Notes offered hereby
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$
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2,036,500.00
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100.00%
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$
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2,036,500.00
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$
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80.04
(1
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(1)
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The filing fee is calculated in accordance with Rule 457(r)
under the Securities Act. There are unused registration fees of
$82,621.85 that have been paid in respect of securities offered
from Eksportfinans ASA’s Registration Statement
No. 333-140456, of which this pricing supplement is a part.
After giving effect to the $80.04 registration fee for this
offering, $82,541.81 remains available for future offerings. No
additional registration fee has been paid with respect to this
offering.
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PRICING SUPPLEMENT NO. 190 dated April 7, 2008
to Prospectus Supplement and Prospectus dated February 5,
2007
relating to the Eksportfinans ASA U.S. Medium-Term Note
Program
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Filed pursuant to Rule 424(b)(5) Registration Statement No.
333-140456
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9.75%
Enhanced Yield Securities
Linked to the Performance of 10 Stocks
due October 3, 2008
This document is a pricing supplement. This pricing supplement
provides specific pricing information in connection with this
issuance of securities. Prospective investors should read this
pricing supplement together with the prospectus supplement and
prospectus dated February 5, 2007 for a description of the
specific terms and conditions of the particular issuance of
securities. This pricing supplement amends and supersedes the
accompanying prospectus supplement and prospectus to the extent
that the information provided in this pricing supplement is
different from the terms set forth in the prospectus supplement
or the prospectus.
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Issuer:
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Eksportfinans ASA
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Agent:
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Wachovia Capital Markets, LLC. The agent may make sales through
its affiliates or selling agents.
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Principal Amount:
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Each security will have a principal amount of $10.00. Each
security will be offered at an initial public offering price of
$10.00.
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Maturity Date:
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October 3, 2008
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Interest:
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9.75% per annum, to be payable monthly.
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Interest Payment Dates:
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The 3rd of each month, beginning May 3, 2008 to and
including the Maturity Date.
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Constituent Stocks of the Basket:
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The common stock of the following ten companies: AK Steel
Holding Corporation, Apple Inc., Deere & Company, EMC
Corporation, General Cable Corporation, JPMorgan
Chase & Co., Marathon Oil Corporation, Schering-Plough
Corporation, Target Corporation and Terex Corporation,
(collectively, the
Basket
). The issuers of the
constituent stocks of the Basket have no obligations relating
to, and do not sponsor or endorse, the securities.
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Payment at Maturity:
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On the maturity date, for each security you hold, you will
receive a payment equal to (i) the aggregate redemption
amount equal to the sum of the redemption amounts of each
constituent stock of the Basket, plus (ii) any accrued but
unpaid interest in cash. The redemption amount with respect to
each constituent stock equals $1.00, unless the final stock
price is less than the protection stock price for that
constituent stock. The protection stock price with respect to
each constituent stock of the basket will be 15.00% below the
initial stock price of that constituent stock (to be determined
by the calculation agent on the trade date). The initial stock
price of each constituent stock of the Basket will equal the
closing price per share of the constituent stock on the trade
date.
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If the final stock price of a constituent stock is lower than
the protection stock price, the redemption amount for each
constituent stock will equal $1.00 multiplied by the total of
(a) the initial stock price minus the protection stock
price plus the final stock price (b) divided by the initial
stock price.
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If the final stock price is less than the protection stock
price with respect to one or more of the constituent stocks of
the Basket, you will lose some or most of your principal
.
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Listing:
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The securities will not be listed or displayed on any securities
exchange or any electronic communications network.
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Trade Date:
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April 7, 2008
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Expected Settlement Date:
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April 10, 2008
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CUSIP Number:
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282645662
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ISIN Number:
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US2826456624
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For a detailed description of the terms of the securities, see
“Summary Information” beginning on
page P-1
and “— Specific Terms of the Securities”
beginning on
page P-13.
Investing
in the securities involves risks. See “Risk Factors”
beginning on
page P-8.
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Per Security
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Total
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Maximum Public Offering Price
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$
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10.00
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$
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2,036,500.00
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Maximum Underwriting Discount and Commission
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$
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0.125
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$
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25,456.25
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Maximum Proceeds to Eksportfinans ASA
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$
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9.875
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$
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2,011,043.75
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Wachovia Capital Markets, LLC may offer the securities in
transactions in the over-the-counter market or through
negotiated transactions at market prices or at negotiated prices.
Capitalized terms used in this pricing supplement without
definition have the meanings given to them in the prospectus
supplement and accompanying prospectus.
SUMMARY
INFORMATION
This summary includes questions and answers that highlight
selected information from this pricing supplement and the
accompanying prospectus supplement and prospectus to help you
understand the 9.75% Enhanced Yield Securities Linked to the
Performance of 10 Stocks due October 3, 2008, which we
refer to as the
securities
. You should carefully read
this pricing supplement and the accompanying prospectus
supplement and prospectus to fully understand the terms of the
securities as well as the tax and other considerations that are
important to you in making a decision about whether to invest in
the securities. You should carefully review the sections
entitled “Risk Factors” in this pricing supplement and
the accompanying prospectus supplement and prospectus, which
highlight certain risks associated with an investment in the
securities, to determine whether an investment in the securities
is appropriate for you.
Unless otherwise mentioned or unless the context requires
otherwise, all references in this pricing supplement to
“Eksportfinans”, “we”, “us” and
“our” or similar references mean Eksportfinans ASA and
its subsidiaries.
What are
the securities?
The securities offered by this pricing supplement will be issued
by Eksportfinans and will mature on October 3, 2008. The
return on the securities is linked to the performance of the
stocks of the following ten companies (the
Basket)
: AK
Steel Holding Corporation, Apple Inc., Deere &
Company, EMC Corporation, General Cable Corporation, JPMorgan
Chase & Co., Marathon Oil Corporation, Schering-Plough
Corporation, Target Corporation and Terex Corporation, each of
which we refer to as a
Constituent Stock Issuer
and
collectively as the
Constituent Stock Issuers
, and will
depend on whether the final stock price of any such constituent
stock is less than the protection stock price of that
constituent stock, each as described below.
As discussed in the accompanying prospectus supplement, the
securities are debt securities and are part of a series of debt
securities entitled “Medium-Term Notes” that
Eksportfinans may issue from time to time. The securities will
rank equally with all other unsecured and unsubordinated debt of
Eksportfinans. For more details, see “Specific Terms of the
Securities” beginning on
page P-13.
Each security will have a principal amount of $10.00. Each
security will be offered at an initial public offering price of
$10.00. You may transfer only whole securities. Eksportfinans
will issue the securities in the form of a global certificate,
which will be held by The Depository Trust Company, also
known as DTC, or its nominee. Direct and indirect participants
in DTC will record your ownership of the securities.
Are the
securities principal protected?
No, the securities do not guarantee any return of principal at
maturity.
If the final stock price of any constituent
stock of the basket is less than its protection stock price, you
will lose some or most of your principal (but you will still
receive any accrued but unpaid interest in cash).
Will I
receive interest on the securities?
The securities will bear interest at a rate equal to 9.75% per
annum payable on the 3rd of each month, beginning on
May 3, 2008 to and including the maturity date. The
interest rate on the securities is higher than the current
dividend yield of each of the constituent stocks of the Basket.
The interest rate is also higher than the interest we would pay
on a conventional fixed-rate, principal protected debt security.
You will still receive accrued but unpaid interest on the
securities even if the final stock price of any constituent
stock of the basket is less than the protection stock price.
How is
Eksportfinans able to offer 9.75% interest rate on the
securities?
Eksportfinans is able to offer a 9.75% interest rate on the
securities because the securities are riskier than conventional
principal-protected debt securities. As previously described, if
the final stock price of any constituent stock is less than the
protection stock price, then at maturity the aggregate
redemption amount you will receive will be a cash payment that
is less than the principal amount of your securities. The
interest rate
P-1
on the securities reflects the value of our right, under these
circumstances, to deliver to you at the maturity of the
securities an aggregate redemption amount that is less than the
principal amount of your securities. In general, the more
volatile the constituent stocks of the Basket are or are
expected to be, the higher the interest rate and the more likely
the final stock price will be less than the protection stock
price with respect to a constituent stock.
What will
I receive upon maturity of the securities?
The securities will mature on October 3, 2008, subject to
extension in the event of the postponement of the valuation
date. On the maturity date, for each security you hold, you will
receive a payment equal to the aggregate redemption amount, plus
any accrued but unpaid interest. The aggregate redemption amount
is equal to the sum of the redemption amounts with respect to
each constituent stock of the Basket. The redemption amount with
respect to each constituent stock equals $1.00, unless the final
stock price for that constituent stock is less than the
protection stock price for that constituent stock. The
protection stock price with respect to each constituent stock is
15.00% below its initial stock price.
The
redemption amount
with respect to each constituent
stock equals $1.00, unless the final stock price for that
constituent stock is less than the protection stock price for
that constituent stock. If the final stock price of a
constituent stock is lower than the protection stock price, the
redemption amount will equal $1.00 multiplied by the total of
(a) the initial stock price minus the protection stock
price plus the final stock price (b) divided by the initial
stock price.
If the final stock price is less than the protection stock
price with respect to one or more of the constituent stocks of
the Basket, you will lose some or most of your principal (but
you will still receive any accrued but unpaid interest in
cash).
The
initial stock price
for each constituent stock of the
Basket is the closing price per share of that constituent stock
on the trade date.
The
final stock price
for each constituent stock of the
Basket will be determined by the calculation agent and will
equal the closing price per share of that constituent stock
multiplied by the share multiplier of that constituent stock,
each as of the valuation date.
The
protection stock price
for each constituent stock of
the Basket is 15.00% below the initial stock price of that
constituent stock, as follows:
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Initial
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Protection
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Constituent Stock
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Stock Price
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Stock Price
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AK Steel Holding Corporation
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$
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62.99
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$
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53.54
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Apple Inc.
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$
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155.89
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$
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132.51
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Deere & Company
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$
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88.40
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$
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75.14
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EMC Corporation
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$
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14.90
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$
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12.67
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General Cable Corporation
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$
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65.71
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$
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55.85
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JPMorgan Chase & Co.
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$
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45.54
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$
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38.71
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Marathon Oil Corporation
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$
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48.58
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$
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41.29
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Schering-Plough Corporation
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$
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16.76
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$
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14.25
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Target Corporation
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$
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52.77
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$
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44.85
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Terex Corporation
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$
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67.67
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$
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57.52
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The
market price
for each constituent stock of the Basket
is, on any trading day and at any time during the regular
business hours of the relevant exchange, the latest reported
sale price of that constituent stock (or any other security for
which a market price must be determined) on that relevant
exchange at that time, as determined by the calculation agent.
P-2
The
share multiplier
for each constituent stock of the
Basket is 1.0, subject to adjustment for certain corporate
events relating to the relevant Constituent Stock Issuer
described in this pricing supplement under “Additional
Information — Antidilution Adjustments”.
The
valuation date
means the fifth trading day prior to
the maturity date. However, if that date occurs on a day on
which the calculation agent has determined that a market
disruption event has occurred or is continuing with respect to
any constituent stock of the Basket, then the valuation date
with respect to that constituent stock only will be the next
succeeding trading day on which the calculation agent has
determined that a market disruption event has not occurred or is
not continuing with respect to that constituent stock.
If the
valuation date with respect to any constituent stock of the
Basket is postponed, then the maturity date of the securities
will be postponed by an equal number of trading days.
A
trading day
means a day, as determined by the
calculation agent, on which trading is generally conducted on
the New York Stock Exchange, Inc. (
NYSE
), the American
Stock Exchange, the Nasdaq Global Market, the Chicago Board
Mercantile Exchange and the Chicago Board of Options Exchange
and in the over-the-counter market for equity securities in the
United States.
A
business day
means a Monday, Tuesday, Wednesday,
Thursday or Friday that is not a day on which banking
institutions in the City of New York generally are authorized or
obligated by law, regulation or executive order to close.
The
relevant exchange
for each constituent stock of the
Basket is the primary United States securities exchange or
organized market of trading for the constituent stock. If a
reorganization event has occurred, the relevant exchange will be
the stock exchange or securities market in the United States on
which the distribution property (as defined below under
“Additional Information — Antidilution
Adjustments — Adjustments for Reorganization
Events” on
page P-22)
that is a listed equity security is principally traded, as
determined by the calculation agent.
If the final stock price is less than the protection stock
price with respect to one or more of the constituent stocks of
the Basket, you will lose some or most of your principal (but
you will still receive any accrued but unpaid interest ).
Hypothetical
Examples
Set forth below are hypothetical examples of the calculation of
the aggregate redemption amount of your securities. Because the
aggregate redemption amount is equal to the sum of the
redemption amounts with respect to each of the ten constituent
stocks of the Basket, it is not possible to describe all of the
possible outcomes. These examples are based on the following
with respect to each constituent stock of the Basket:
Protection stock price: 15.00% below the initial stock price
Share multiplier on the valuation date: 1.0
Example 1
— The table below illustrates the
effect on the redemption amount when the final stock price is
above the protection stock price with respect to all of the
constituent stocks of the Basket. In this event, the aggregate
redemption amount equals the principal amount plus any accrued
but unpaid interest.
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Aggregate
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Redemption
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Constituent Stock
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AKS
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AAPL
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DE
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EMC
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BGC
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JPM
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MRO
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SGP
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TGT
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TEX
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Amount
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Initial Stock Price
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$
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62.99
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$
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155.89
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$
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88.40
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$
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14.90
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$
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65.71
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$
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45.54
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$
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48.58
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$
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16.76
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$
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52.77
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$
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67.67
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Hypothetical Final Stock Price
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$
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55.00
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$
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135.00
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$
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80.00
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$
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15.00
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$
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60.00
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$
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40.00
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$
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45.00
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$
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15.00
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$
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45.00
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$
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60.00
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Protection Price (85% of the Issue Price)
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$
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53.54
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$
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132.51
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$
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75.14
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$
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12.67
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$
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55.85
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$
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38.71
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$
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41.29
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$
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14.25
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$
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44.85
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$
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57.52
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Final Price Below Protection Price
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No
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No
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No
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No
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No
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No
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No
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No
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No
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No
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Payment at Maturity
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$
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1.00
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$
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1.00
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$
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1.00
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$
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1.00
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$
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1.00
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$
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1.00
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$
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1.00
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$
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1.00
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$
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1.00
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$
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1.00
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$
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10.00
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As indicated in the above table, none of the constituent stocks
of the Basket have declined below their respective protection
prices on the valuation date. As a result, there is no reduction
in the redemption amount. Thus, the hypothetical payment at
maturity would be $10.00, representing a $1.00 redemption amount
for each stock in the Basket. There is also no effect on your
redemption amount because of appreciation in the
P-3
hypothetical stock price. EMC is an example of a stock that has
appreciated with respect to its initial stock price, yet the
redemption amount remains $1.00 with respect to that constituent
stock. In addition, you would receive interest at a rate of
9.75% over the term of the securities.
Example 2
— The table below illustrates the
effect on the redemption amount when the final stock price is
below the protection price on the valuation date with respect to
each of the constituent stocks of the Basket. In this event, the
aggregate redemption amount falls below the principal amount,
although the holder will receive any accrued but unpaid interest.
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Aggregate
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Redemption
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Constituent Stock
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AKS
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AAPL
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DE
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EMC
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BGC
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JPM
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MRO
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SGP
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TGT
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TEX
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Amount
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Initial Stock Price
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$
|
62.99
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$
|
155.89
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$
|
88.40
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$
|
14.90
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$
|
65.71
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$
|
45.54
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$
|
48.58
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$
|
16.76
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$
|
52.77
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$
|
67.67
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Hypothetical Final Stock Price
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$
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50.00
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$
|
130.00
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$
|
70.00
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$
|
10.00
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$
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50.00
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$
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35.00
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$
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40.00
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$
|
12.50
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$
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40.00
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$
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55.00
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Hypothetical Protection Price (85% of the Issue Price)
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$
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53.54
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$
|
132.51
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$
|
75.14
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$
|
12.67
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|
$
|
55.85
|
|
|
$
|
38.71
|
|
|
$
|
41.29
|
|
|
$
|
14.25
|
|
|
$
|
44.85
|
|
|
$
|
57.52
|
|
|
|
|
|
|
Final Price Below Protection Price
|
|
|
Yes
|
|
|
|
Yes
|
|
|
|
Yes
|
|
|
|
Yes
|
|
|
|
Yes
|
|
|
|
Yes
|
|
|
|
Yes
|
|
|
|
Yes
|
|
|
|
Yes
|
|
|
|
Yes
|
|
|
|
|
|
|
Payment at Maturity
|
|
$
|
0.94
|
|
|
$
|
0.98
|
|
|
$
|
0.94
|
|
|
$
|
0.82
|
|
|
$
|
0.91
|
|
|
$
|
0.92
|
|
|
$
|
0.97
|
|
|
$
|
0.90
|
|
|
$
|
0.91
|
|
|
$
|
0.96
|
|
|
$
|
9.26
|
|
As indicated in the above table, each of the constituent stocks
of the Basket have declined below their respective protection
prices on the valuation date. As a result, the redemption amount
for each constituent stock is reduced. Thus, the hypothetical
payment at maturity would be less than $10.00, representing a
redemption amount below $1.00 for each stock in the Basket. In
addition, you would receive interest at a rate of 9.75% over the
term of the securities.
Example 3
— The table below illustrates the
effect on the redemption amount when some of the final stock
prices are above their respective protection prices on the
valuation date and other final stock prices are below their
respective protection stock prices on the valuation date. In
this event, the aggregate redemption amount falls below the
principal amount, although the holder will receive any accrued
but unpaid interest.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redemption
|
|
|
Constituent Stock
|
|
AKS
|
|
|
AAPL
|
|
|
DE
|
|
|
EMC
|
|
|
BGC
|
|
|
JPM
|
|
|
MRO
|
|
|
SGP
|
|
|
TGT
|
|
|
TEX
|
|
|
Amount
|
|
|
|
|
Initial Stock Price
|
|
$
|
62.99
|
|
|
$
|
155.89
|
|
|
$
|
88.40
|
|
|
$
|
14.90
|
|
|
$
|
65.71
|
|
|
$
|
45.54
|
|
|
$
|
48.58
|
|
|
$
|
16.76
|
|
|
$
|
52.77
|
|
|
$
|
67.67
|
|
|
|
|
|
|
Hypothetical Final Stock Price
|
|
$
|
55.00
|
|
|
$
|
130.00
|
|
|
$
|
80.00
|
|
|
$
|
10.00
|
|
|
$
|
60.00
|
|
|
$
|
35.00
|
|
|
$
|
45.00
|
|
|
$
|
12.50
|
|
|
$
|
45.00
|
|
|
$
|
55.00
|
|
|
|
|
|
|
Protection Price (85% of the Issue Price)
|
|
$
|
53.54
|
|
|
$
|
132.51
|
|
|
$
|
75.14
|
|
|
$
|
12.67
|
|
|
$
|
55.85
|
|
|
$
|
38.71
|
|
|
$
|
41.29
|
|
|
$
|
14.25
|
|
|
$
|
44.85
|
|
|
$
|
57.52
|
|
|
|
|
|
|
Final Price Below Protection Price
|
|
|
No
|
|
|
|
Yes
|
|
|
|
No
|
|
|
|
Yes
|
|
|
|
No
|
|
|
|
Yes
|
|
|
|
No
|
|
|
|
Yes
|
|
|
|
No
|
|
|
|
Yes
|
|
|
|
|
|
|
Payment at Maturity
|
|
$
|
1.00
|
|
|
$
|
0.98
|
|
|
$
|
1.00
|
|
|
$
|
0.82
|
|
|
$
|
1.00
|
|
|
$
|
0.92
|
|
|
$
|
1.00
|
|
|
$
|
0.90
|
|
|
$
|
1.00
|
|
|
$
|
0.96
|
|
|
$
|
9.58
|
|
As indicated in the above table, the final stock price of
certain constituent stocks did not fall below the protection
price on the valuation date (as represented by constituent
stocks AKS, DE, BGC, MRO and TGT). There is no reduction in the
redemption amount for such stocks and the redemption amount for
each such constituent stock is $1.00. However, as noted above, a
final stock price in excess of the initial stock price does not
increase your redemption amount. Other constituent stocks of the
Basket have declined below their respective protection prices on
the valuation date (as represented by constituent stocks AAPL,
EMC, JPM, SGP and TEX). As a result, the redemption amount for
those constituent stocks is reduced. Thus, the hypothetical
payment at maturity would be less than $10.00, representing a
redemption amount below $1.00 for certain stocks in the Basket.
In addition, you would receive interest at a rate of 9.75% over
the term of the securities. As noted above, a hypothetical final
stock price in excess of the initial stock price does not
increase your redemption amount, and a gain in one stock does
not offset a loss on another constituent stock.
Who
should or should not consider an investment in the
securities?
We have designed the securities for investors who are willing to
make an investment that is contingently exposed to the full
downside performance risk of each of the constituent stocks of
the Basket and the potential loss of some or all of the value of
their principal, who do not expect to participate in any
appreciation in the market prices of the constituent stocks and
who are willing to receive a cash payment linked, in part, to
the market prices of shares of the constituent stocks as the
return on their investment if the final stock price of any such
constituent stock is less than its protection stock price. In
exchange for the potential downside
P-4
exposure to the constituent stocks of the Basket described in
the preceding sentence, investors in the securities will receive
interest on the securities at a rate 9.75% per year.
The securities are not designed for, and may not be a suitable
investment for, investors who are unwilling to make an
investment that is exposed to the full downside performance
risks of the constituent stocks of the Basket. The securities
are also not designed for, and may not be a suitable investment
for, investors who seek the full upside appreciation in the
market prices of the constituent stocks. The securities may not
be a suitable investment for investors who prefer the lower risk
of fixed income investments with comparable maturities issued by
companies with comparable credit ratings, or who are unable or
unwilling to hold the securities to maturity.
What will
I receive if I sell the securities prior to maturity?
The market value of the securities may fluctuate during the term
of the securities. Several factors and their interrelationship
will influence the market value of the securities, including the
market prices of the constituent stocks of the Basket, dividend
yields on the constituent stocks, the time remaining to maturity
of the securities, interest and yield rates in the market and
the volatility of the market prices of the constituent stocks.
The securities are 100.00% principal protected only if held to
maturity and if the final stock price is not less than the
protection stock price for each constituent stock in the Basket.
If you sell your securities prior to maturity, you may have to
sell them at a discount to the principal amount of the
securities. Depending on the impact of these factors, you may
receive less than the principal amount in any sale of your
securities before the maturity date of the securities and less
than what you would have received had you held the securities
until maturity. For more details, see “Risk
Factors — Many factors affect the market value of the
securities”.
What is
the Basket?
The Basket is a basket of 10 equally weighted stocks.
Provided below is a brief description of the Constituent Stock
Issuers obtained from publicly available information published
by each Constituent Stock Issuer:
AK Steel Holding Corporation is a fully-integrated producer of
flat-rolled carbon, stainless and electrical steels and tubular
products through its wholly-owned subsidiary, AK Steel
Corporation.
Apple Inc. is involved in the design, manufacture, and marketing
of personal computers, portable digital music players, and
mobile communication devices and that it sells a variety of
related software, services, peripherals, and networking
solutions. Apple sells its products worldwide through its online
stores, its retail stores, its direct sales force, and
third-party wholesalers, resellers, and value-added resellers.
Deere & Company has manufactured agricultural
machinery since 1837. Its operations consist of four major
business segments, namely, an agricultural equipment segment, a
commercial and consumer equipment segment, a construction and
forestry segment (together the
Equipment Operations
), and
a credit segment. Deere’s credit service primarily finance
sales and leases of equipment by John Deere dealers and trade
receivables purchased from the Equipment Operations.
EMC Corporation develops, delivers and supports the information
technology industry’s broadest range of information
infrastructure technologies and solutions. The company’s
information infrastructure business supports customers’
information lifecycle management strategies and helps them build
information infrastructures that store, protect, optimize and
leverage their vast and growing quantities of information.
General Cable Corporation develops, designs, manufactures,
markets, distributes and installs copper, aluminum and fiber
optic wire and cable products.
JPMorgan Chase & Co. is a financial holding company.
Its principal bank subsidiaries are JPMorgan Chase Bank,
National Association, a national banking association with
branches in 17 states, and Chase
P-5
Bank USA, National Association, a national bank that is JPMorgan
Chase & Co.’s credit card issuing bank. JPMorgan
Chase & Co.’s activities are organized into six
business segments (Investment Bank, Retail Financial Services,
Card Services, Commercial Banking, Treasury &
Securities Services and Asset Management) and Corporate, which
includes its Private Equity and Treasury businesses, as well as
corporate support functions.
Marathon Oil Corporation, through its subsidiary, Marathon Oil
Company, explores for and produces crude oil and natural gas on
a worldwide basis and also conducts operations in the refining,
marketing, and transportation of petroleum products in the
United States.
Schering-Plough Corporation, and its subsidiaries, is an
innovation-driven, science-centered global health care company
which applies its
research-and-development
platform to human prescription, animal health and consumer
products.
Target Corporation operates large-format general merchandise and
food discount stores in the United States, which include Target
and SuperTarget stores. It offers both everyday essentials and
fashionable, differentiated merchandise.
Terex Corporation is a diversified global manufacturer of
capital equipment focused on delivering reliable,
customer-relevant solutions for the construction,
infrastructure, quarrying, surface mining, shipping,
transportation, refining and utility industries.
You should independently investigate the Constituent Stock
Issuers and decide whether an investment in the securities
linked to the constituent stocks of the Basket is appropriate
for you.
Because the constituent stocks of the Basket are registered
under the Securities Exchange Act of 1934, as amended (the
Exchange Act
), the Constituent Stock Issuers are required
to file periodically certain financial and other information
specified by the Securities and Exchange Commission (the
SEC
). Information provided to or filed with the SEC by
the Constituent Stock Issuers can be located by reference to SEC
file numbers
000-10030
(Apple Inc.),
001-13696
(AK Steel Holding Corporation),
001-04121
(Deere & Company),
001-09853
(EMC Corporation),
001-12983
(General Cable Corporation),
001-05805
(JPMorgan Chase & Co.),
001-05153
(Marathon Oil Corporation),
001-6571
(Schering-Plough Corporation),
001-06049
(Target Corporation),
001-10702
(Terex Corporation), inspected at the SEC’s public
reference facilities or accessed over the Internet through the
SEC’s website. The address of the SEC’s website is
http://www.sec.gov.
In addition, information regarding the constituent stocks of the
Basket may be obtained from other sources including, but not
limited to, press releases, newspaper articles and other
publicly disseminated information. We make no representation or
warranty as to the accuracy or completeness of any such
information. For further information, please see the section
entitled “The Basket — The Constituent Stock
Issuers” in this pricing supplement.
What are
the Constituent Stock Issuers’ role in the
securities?
None of the Constituent Stock Issuers have any obligations
relating to the securities or amounts to be paid to you,
including no obligation to take the needs of Eksportfinans or of
holders of the securities into consideration for any reason. The
Constituent Stock Issuers will not receive any of the proceeds
of the offering of the securities, are not responsible for, and
have not participated in, the offering of the securities and are
not responsible for, and will not participate in, the
determination or calculation of either the redemption amount
with respect to any constituent stock of the Basket or the
aggregate redemption amount with respect to the securities.
Eksportfinans is not affiliated with any of Constituent Stock
Issuers.
How have
the constituent stocks of the Basket performed
historically?
You can find a table with the high, low and closing prices per
share of the constituent stocks of the Basket during each
calendar quarter from calendar year 2005 to the present in the
section entitled “The Basket — Historical
Data” in this pricing supplement. We obtained the
historical information from Bloomberg Financial Markets, without
independent verification. You should not take the past
performance of the constituent stocks of the Basket as an
indication of how the constituent stocks will perform in the
future.
P-6
What
about taxes?
There is currently no statutory, judicial or administrative
authority that directly addresses the U.S. tax treatment of
holders of the securities or similar instruments and the
characterization of the securities for U.S. federal income
tax purposes is uncertain. Pursuant to the terms of the
securities, you agree to treat the securities as income-bearing
financial contracts under which you will be required to treat
the income payable on the securities as ordinary income. You
will be required to characterize the securities for all tax
purposes in this manner (absent an administrative determination
or judicial ruling to the contrary) even if your tax advisor
would otherwise adopt an alternative characterization. If the
United States Internal Revenue Service (the “IRS”)
successfully argues that the securities should be treated
differently, the timing and character of income on the
securities may be affected. We are not requesting a ruling from
the IRS with respect to the securities, and we cannot assure you
that the IRS will agree with the conclusions expressed in this
pricing supplement and in the accompanying prospectus supplement
and prospectus under “Taxation in the United States”.
Will the
securities be listed on a stock exchange?
The securities will not be listed or displayed on any securities
exchange, the Nasdaq Global Market or any electronic
communications network. There is can be no assurance that a
liquid trading market will develop for the securities.
Accordingly, if you sell your securities prior to maturity, you
may have to sell them at a substantial loss. You should review
the section entitled “Risk Factors — There may
not be an active trading market for the securities” in this
pricing supplement.
Are there
any risks associated with my investment?
Yes, an investment in the securities is subject to significant
risks, including the risk of loss of some or all of your
principal. We urge you to read the detailed explanation of risks
in “Risk Factors” beginning on
page P-8.
P-7
RISK
FACTORS
An investment in the securities is subject to the risks
described below, as well as the risks described under “Risk
Factors” in the accompanying prospectus supplement. The
securities are a riskier investment than ordinary debt
securities. Also, the securities are not equivalent to investing
directly in the constituent stocks of the Basket to which the
securities are linked. You should carefully consider whether the
securities are suited to your particular circumstances.
Your
investment may result in a loss of some or most of your
principal
Unlike standard senior non-callable debt securities, the
securities do not guarantee the return of the principal amount
at maturity. With an investment in the securities, you bear the
risk of losing some or most of the value of your principal if
the final stock price of one or more constituent stocks of the
Basket is less than the protection price for that constituent
stock. Under these circumstances, for each security you hold,
the aggregate redemption amount you will receive will be less
than the principal amount per security. The redemption amount
for each constituent stock for which the final stock price is
lower than the protection stock price will be $1.00 multiplied
by the total of (a) the initial stock price minus the
protection stock price plus the final stock price
(b) divided by the initial stock price.
Accordingly,
if the final price of such constituent stock is less than its
protection stock price, you will lose some or most of the value
of the principal amount of your securities. Your principal
protection is contingent and, therefore, your principal will be
protected only if you hold your securities until maturity and
the final stock price for that constituent stock is greater than
the protection stock price for that constituent stock.
Your
yield may be lower than the yield on a standard debt security of
comparable maturity
The yield that you will receive on your securities, which could
be negative if the final stock price for any constituent stock
is less than its protection stock price, may be less than the
return you could earn on other investments. The aggregate
redemption amount per security will not be greater than the
principal amount of your securities. Even if your yield is
positive, your yield may be less than the yield you would earn
if you bought a standard senior non-callable debt security of
Eksportfinans with the same maturity date. Your investment may
not reflect the full opportunity cost to you when you take into
account factors that affect the time value of money.
Owning
the securities is not the same as owning the constituent stocks
of the Basket
Your return will not reflect the return you would realize if you
actually owned and held the constituent stocks of the Basket for
a similar period because the aggregate redemption amount per
security will never exceed the principal amount of your
securities and will be determined without taking into
consideration the value of any dividends that may be paid on the
constituent stocks. The securities represent senior unsecured
obligations of Eksportfinans and do not represent or convey any
rights of ownership in the constituent stocks of the Basket. In
addition, you will not receive any dividend payments or other
distributions on the constituent stocks of the Basket, and as a
holder of the securities, you will not have voting rights or any
other rights that holders of the constituent stocks may have. If
the return on the constituent stocks of the Basket over the term
of the securities exceeds the principal amount of the securities
and the interest payments you receive, your return on the
securities at maturity will be less than the return on a direct
investment in the constituent stocks without taking into account
taxes and other costs related to such a direct investment. If
the market prices of the constituent stocks of the Basket
increase above the initial stock prices during the term of the
securities, the market value of the securities will not increase
by the same amount. It is also possible for the market prices of
the constituent stocks to increase while the market value of the
securities declines.
There may
not be an active trading market for the securities
The securities will not be listed or displayed on any securities
exchange or any electronic communications network. There can be
no assurance that a liquid trading market will develop for the
securities. The development of a trading market for the
securities will depend on our financial performance and other
factors
P-8
such as the increase, if any, in the value of the Basket. Even
if a secondary market for the securities develops, it may not
provide significant liquidity and transaction costs in any
secondary market could be high. As a result, the difference
between bid and asked prices for your security in any secondary
market could be substantial. If you sell your securities before
maturity, you may have to do so at a discount from the initial
public offering price, and, as a result, you may suffer
substantial losses.
Wachovia Capital Markets, LLC currently intends to make a market
for the securities, although they are not required to do so and
may stop any such market-making activities at any time. As
market makers, trading of the securities may cause Wachovia
Capital Markets, LLC to have long or short positions in the
securities. The supply and demand for the securities, including
inventory positions of market makers, may affect the secondary
market for the securities.
Many
factors affect the market value of the securities
The market value of the securities will be affected by factors
that interrelate in complex ways. It is important for you to
understand that the effect of one factor may offset the increase
in the market value of the securities caused by another factor
and that the effect of one factor may compound the decrease in
the market value of the securities caused by another factor. We
expect that the market value of the securities will depend
substantially on the market prices of the constituent stocks of
the Basket at any time during the term of the securities
relative to their respective initial stock prices. If you choose
to sell your securities when the market prices of the
constituent stocks of the Basket exceed or are equal to their
respective initial stock prices, you may receive substantially
less than the amount that would be payable at maturity based on
this market price because of the expectation that the market
prices of the constituent stocks will continue to fluctuate
until the final stock prices are determined and the risk that
the final stock price of any constituent stock of the Basket
will be below such stock’s protection price. In addition,
we believe that other factors that may influence the value of
the securities include:
|
|
|
|
|
|
•
|
the volatility (frequency and magnitude of changes in market
prices) of the constituent stocks of the Basket and in
particular market expectations regarding the volatility of the
constituent stocks;
|
|
|
|
|
•
|
any positive correlation among the constituent stocks of the
Basket;
|
|
|
|
|
•
|
interest rates generally as well as changes in interest rates
and the yield curve;
|
|
|
|
|
•
|
the dividend yields on the constituent stocks of the Basket;
|
|
|
|
|
•
|
the time remaining to maturity;
|
|
|
|
|
•
|
our creditworthiness, as represented by our credit ratings or as
otherwise perceived in the market; and
|
|
|
|
|
•
|
geopolitical, economic, financial, political, regulatory or
judicial events as well as other conditions that affect stock
markets in general and that may affect the Constituent Stock
Issuers and the market prices of the constituent stocks.
|
Correlation
among the constituent stocks of the Basket may affect the value
of the securities
To the extent that the constituent stocks in the Basket all move
in the same direction (i.e., are highly correlated), investors
will lose some of the benefits of a security linked to a basket
of stocks.
We have
no affiliation with the Constituent Stock Issuers and are not
responsible for their public disclosure of information
We are not affiliated with any of the Constituent Stock Issuers
in any way and have no ability to control or predict their
actions, including any corporate actions of the type that would
require the calculation agent to adjust the redemption amount
with respect to any constituent stock of the Basket, and have no
ability to control the public disclosure of these corporate
actions or any events or circumstances affecting them.
Each security is an unsecured debt obligation of Eksportfinans
only and is not an obligation of any of the Constituent Stock
Issuers. None of the money you pay for your securities will go
to any of the Constituent
P-9
Stock Issuers. Since the Constituent Stock Issuers are not
involved in the offering of the securities in any way, they have
no obligation to consider your interest as an owner of
securities in taking any actions that might affect the value of
your securities. The Constituent Stock Issuers may take actions
that will adversely affect the market value of the securities.
This pricing supplement relates only to the securities and does
not relate to the constituent stocks of the Basket. We have
derived the information about the Constituent Stock Issuers in
this pricing supplement from publicly available documents,
without independent verification. We have not participated in
the preparation of any of the documents or made any “due
diligence” investigation or any inquiry of the Constituent
Stock Issuers in connection with the offering of the securities.
We do not assume any responsibility for the adequacy or accuracy
of the information about the Constituent Stock Issuers contained
in this pricing supplement. Furthermore, we do not know whether
the Constituent Stock Issuers have disclosed all events
occurring before the date of this pricing supplement —
including events that could affect the accuracy or completeness
of the publicly available documents referred to above, the
market prices of the constituent stocks of the Basket and,
therefore, the initial stock price and the final stock prices of
the constituent stocks that the calculation agent will use to
determine the redemption amount with respect to any constituent
stock of the Basket or the aggregate redemption amount with
respect to your securities. You, as an investor in the
securities, should make your own investigation of the
Constituent Stock Issuers.
Historical
performances of the constituent stocks of the Basket should not
be taken as an indication of their future performance during the
term of the securities
It is impossible to predict whether the market prices of the
constituent stocks of the Basket will rise or fall. The
constituent stocks have performed differently in the past and
are expected to perform differently in the future. The market
prices of the constituent stocks will be influenced by complex
and interrelated political, economic, financial and other
factors that can affect the Constituent Stock Issuers. You
should refer to “The Basket” beginning on
page P-26
for a description of the Constituent Stock Issuers and
historical data on the constituent stocks of the Basket.
You have
limited antidilution protection
Wachovia Capital Markets, LLC, as calculation agent for your
securities, will, in its sole discretion, adjust the share
multipliers for certain events affecting the constituent stocks
of the Basket, such as stock splits and stock dividends, and
certain other corporate actions involving the Constituent Stock
Issuers, such as mergers. However, the calculation agent is not
required to make an adjustment for every corporate event that
can affect the constituent stocks of the Basket. For example,
the calculation agent is not required to make any adjustments to
a share multiplier if a Constituent Stock Issuer or anyone else
makes a partial tender or partial exchange offer for a
constituent stock of the Basket. Consequently, this could affect
the calculation of the redemption amount with respect to a
constituent stock of the Basket and the market value of the
securities. You should refer to “Additional
Information — Antidilution Adjustments” beginning
on
page P-17
for a description of the general circumstances in which the
calculation agent will make adjustments to the share multiplier.
Hedging
transactions may affect the return on the securities
As described below under “Use of Proceeds and Hedging”
on
page P-34,
we through one or more hedging counterparties may hedge our
obligations under the securities by purchasing the constituent
stocks of the Basket, futures or options on the constituent
stocks of the Basket or other derivative instruments with
returns linked or related to changes in the market prices of the
constituent stocks of the Basket, and our hedging counterparties
may adjust these hedges by, among other things, purchasing or
selling the constituent stocks of the Basket, futures, options
or other derivative instruments with returns linked to the
constituent stocks of the Basket at any time. Although they are
not expected to, any of these hedging activities may adversely
affect the market prices of the constituent stocks of the Basket
and, therefore, the market value of the securities. It is
possible that our hedging counterparties could receive
substantial returns from these hedging activities while the
market value of the securities declines.
P-10
The
inclusion of commissions and projected profits from hedging in
the initial public offering price is likely to adversely affect
secondary market prices for the securities
Assuming no change in market conditions or any other relevant
factors, the price, if any, at which Wachovia Capital Markets,
LLC is willing to purchase the securities in secondary market
transactions will likely be lower than the initial public
offering price, since the initial public offering price
included, and secondary market prices are likely to exclude,
commissions paid with respect to the securities, as well as the
projected profit included in the cost of hedging our obligations
under the securities. In addition, any such prices may differ
from values determined by pricing models used by Wachovia
Capital Markets, LLC, as a result of dealer discounts,
mark-ups
or
other transactions.
The
calculation agent may postpone the valuation date with respect
to any constituent stock of the Basket and, therefore, the
determination of the final stock price of that constituent stock
and the maturity date if a market disruption event with respect
to any constituent stock occurs on the valuation date
The valuation date and, therefore, the determination of the
final stock price of a constituent stock of the Basket may be
postponed if the calculation agent determines that a market
disruption event has occurred or is continuing on the valuation
date. If a postponement occurs, the calculation agent will use
the closing price per share of the affected constituent stock on
the next succeeding trading day on which no market disruption
event occurs or is continuing. As a result, the maturity date
for the securities would also be postponed. You will not be
entitled to any compensation from us or the calculation agent
for any loss suffered as a result of the occurrence of a market
disruption event, any resulting delay in payment or any change
in the market prices of the constituent stocks of the Basket
resulting from the postponement of the valuation date. See
“Market Disruption Event” beginning on
page P-16.
Potential
conflicts of interest could arise
Wachovia Capital Markets, LLC and its affiliates expect to
engage in trading activities related to the constituent stocks
of the Basket, including hedging transactions for their
proprietary accounts, for other accounts under their management
or to facilitate transactions on behalf of customers. Any of
these activities could adversely affect the value of the Basket
or any successor indices — directly or indirectly by
affecting the price of the constituent stocks — and,
therefore, the market value of the notes and payment at
maturity. Wachovia Capital Markets, LLC may also issue or
underwrite, securities or financial or derivative instruments
with returns linked to changes in the value of the Basket, any
successor index or one or more of its constituent stocks. These
trading activities may present a conflict between your interest
in your securities and the interests that Wachovia Capital
Markets, LLC and its affiliates will have in their proprietary
accounts, in facilitating transactions, including block trades,
for their customers and in accounts under their management.
These trading activities, if they influence the market price of
the constituent stocks of the Basket, could be adverse to your
interests as a holder of the securities.
Wachovia Capital Markets, LLC or its affiliates may presently or
from time to time engage in business with us or one or more of
the Constituent Stock Issuers. This business may include
extending loans to, or making equity investments in, the
Constituent Stock Issuers or providing advisory services to the
Constituent Stock Issuers, including merger and acquisition
advisory services. In the course of business, Wachovia Capital
Markets, LLC or its affiliates may acquire non-public
information relating to the Constituent Stock Issuers and, in
addition, one or more affiliates of Wachovia Capital Markets,
LLC may publish research reports about the Constituent Stock
Issuers. We do not make any representation to any purchasers of
the securities regarding any matters whatsoever relating to the
Constituent Stock Issuers. Any prospective purchaser of the
securities should undertake an independent investigation of the
Constituent Stock Issuers as in its judgment is appropriate to
make an informed decision regarding an investment in the
securities.
P-11
Tax
consequences are uncertain
The federal income tax treatment of the securities is uncertain
and the Internal Revenue Service (the IRS) could assert that the
securities should be taxed in a manner that is different than
described in this pricing supplement. As discussed further
below, on December 7, 2007, the IRS issued a notice
indicating that it and the Treasury Department (Treasury) are
actively considering whether, among other issues, whether all or
part of the gain you may recognize upon sale or maturity of an
instrument such as the securities could be treated as ordinary
income. The outcome of this process is uncertain and could apply
on a retroactive basis.
In addition, one member of the House of Representatives recently
introduced a bill that, if enacted, would require holders of
securities purchased after the bill is enacted to accrue
interest income over the term of the securities despite the fact
that there will be no interest payments over the term of the
securities. It is not possible to predict whether this bill or a
similar bill will be enacted in the future and whether any such
bill would affect the tax treatment of your securities.
You should consult your tax advisor as to the tax consequences
of investing in the securities, significant aspects of which are
uncertain. See “Taxation in the United States” in this
pricing supplement and in the accompanying prospectus supplement
and prospectus.
P-12
SPECIFIC
TERMS OF THE SECURITIES
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Issuer:
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Eksportfinans ASA
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Specified currency:
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U.S. dollars
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Principal Amount:
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$10.00
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Aggregate Principal Amount:
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$2,036,500.00
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Agent:
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Wachovia Capital Markets, LLC
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The agent may make sales through its affiliates or selling
agents.
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Agent acting in the capacity as:
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Principal
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Trade Date:
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April 7, 2008
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Original Issue Date:
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April 10, 2008
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Maturity Date:
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October 3, 2008
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Fixed Rate Note:
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Yes. The securities will bear interest at a rate of 9.75% per
annum, to be payable monthly.
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Interest Payment Date:
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The 3rd of each month, beginning May 3, 2008 up to and
including the maturity date.
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If the maturity date is postponed due to a postponement of the
valuation date, we will pay interest on the maturity date as
postponed rather than on the scheduled maturity date, but no
interest will accrue on the securities or on such payment during
the period from or after the scheduled maturity date.
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The regular record dates will be the close of business on the
fifteenth calendar day, whether or not a business day,
immediately preceding the related interest payment date. For the
purpose of determining the holder at the close of business on a
day that is not a business day, the close of business will mean
5:00 P.M. in New York City, on that day.
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Valuation Date:
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The fifth trading day prior to the maturity date. However, if
that date occurs on a day on which the calculation agent has
determined that a market disruption event has occurred or is
continuing with respect to any constituent stock of the Basket,
then the valuation date with respect to that constituent stock
will be the next trading day on which the calculation agent has
determined that a market disruption event has not occurred or is
not continuing with respect to that constituent stock. If the
valuation date with respect to any constituent stock of the
Basket is postponed, then the maturity date of the securities
will be postponed by an equal number of trading days.
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Constituent Stocks of the Basket:
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The common stocks of the following ten companies: AK Steel
Holding Corporation, Apple Inc., Deere & Company, EMC
Corporation, General Cable Corporation, JPMorgan
Chase & Co., Marathon Oil Corporation, Schering-Plough
Corporation, Target Corporation and Terex Corporation, each of
which we refer to as a
Constituent Stock Issuer
and
collectively as the
Constituent Stock Issuers
. The
Constituent Stock Issuers have no obligations relating to, and
do not sponsor or endorse, the securities.
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P-13
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Payment at Maturity:
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On the maturity date, for each security you hold, you will
receive a payment equal to (i) the aggregate redemption
amount equal to the sum of the redemption amounts of each
constituent stock of the Basket, plus (ii) any accrued but
unpaid interest in cash.
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The redemption amount with respect to each constituent stock
equals $1.00, unless the final stock price multiplied by the
share multiplier for that constituent stock is less than the
protection stock price for that constituent stock on the
valuation date.
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The protection stock price with respect to each constituent
stock equals 15.00% below the initial stock price of that
constituent stock.
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Should the final stock price multiplied by the share multiplier
of a constituent stock be lower than the protection stock price
on the valuation date, the redemption amount will equal $1.00
multiplied by the total of (a) the difference between the
initial stock price and the protection stock price plus the
final stock price (b) divided by the initial stock price.
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If the final stock price is less than the protection stock
price with respect to one or more of the constituent stocks of
the Basket, you will lose some or most of your principal.
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Initial Stock Price:
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For each constituent stock of the Basket, the closing price per
share of that constituent stock on the trade date.
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Final Stock Price:
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For each constituent stock of the Basket the closing price per
share of that constituent stock multiplied by the Share
Multiplier of that constituent stock, each as of the valuation
date and each as determined by the calculation agent.
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Protection Stock Price:
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With respect to any constituent stock of the Basket, 15.00%
below the initial stock price of that constituent stock, as
determined by the calculation agent on the trade date as follows:
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• AK Steel Holding Corporation, $53.54;
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• Apple Inc., $132.51;
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• Deere & Company, $75.14;
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• EMC Corporation, $12.67;
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• General Cable Corporation, $55.85;
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• JPMorgan Chase & Co., $38.71;
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• Marathon Oil Corporation, $41.29;
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• Schering-Plough Corporation, $14.25;
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• Target Corporation, $44.85; and
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• Terex Corporation, $57.52.
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Share Multiplier:
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1.0 for each constituent stock of the Basket, subject to
adjustment for certain corporate events relating to the relevant
Constituent Stock Issuer described in this pricing supplement
under “Additional Information — Antidilution
Adjustments”.
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P-14
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Closing Price:
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The closing price for one share of a constituent stock of the
Basket (or one unit of any other security for which a closing
price must be determined) on any trading day means:
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• if the constituent stock of the Basket
(or any such other security) is listed or admitted to trading on
a national securities exchange, the last reported sale price,
regular way, of the principal trading session on such day on the
principal United States securities exchange registered under the
Exchange Act, on which the constituent stock (or any such other
security) is listed or admitted to trading, or
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• if the constituent stock of the Basket
(or any such other security) is a security of the Nasdaq Global
Market, the Nasdaq official closing price published by The
Nasdaq Stock Market, Inc. on such day, or
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• if the constituent stock of the Basket
(or any such other security) is neither listed or admitted to
trading on any national securities exchange nor a security of
the Nasdaq Global Market but is included in the OTC
Bulletin Board (the
OTC Bulletin Board
)
operated by the National Association of Securities Dealers, Inc.
(the
NASD
), the last reported sale price of the principal
trading session on the OTC Bulletin Board on such day.
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If the constituent stock of the Basket (or any such other
security) is listed or admitted to trading on any national
securities exchange or is a security of the Nasdaq Global Market
but the last reported sale price or Nasdaq official closing
price, as applicable, is not available pursuant to the preceding
sentence, then the closing price for one share of that
constituent stock (or one unit of any such other security) on
any trading day will mean the last reported sale price of the
principal trading session on the over-the-counter market as
reported on the Nasdaq Global Market or the OTC
Bulletin Board on such day.
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If the last reported sale price or Nasdaq official closing
price, as applicable, for a constituent stock of the Basket (or
any such other security) is not available pursuant to either of
the two preceding sentences, then the closing price for any
trading day will be the mean, as determined by the calculation
agent, of the bid prices for that constituent stock (or any such
other security) obtained from as many recognized dealers in such
security, but not exceeding three, as will make such bid prices
available to the calculation agent. Bids of Wachovia Capital
Markets, LLC or any of its affiliates may be included in the
calculation of such mean, but only to the extent that any such
bid is the highest of the bids obtained. The term
security of
the Nasdaq Global Market
will include a security included in
any successor to such system, and the term OTC
Bulletin Board Service will include any successor service
thereto.
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Market Price:
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For each constituent stock of the Basket, on any trading day and
at any time during the regular business hours of the relevant
exchange, the latest reported sale price of that constituent
stock (or any other security for which a market price must be
determined)
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P-15
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on that relevant exchange at that time, as determined by the
calculation agent.
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Relevant Exchange:
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For each constituent stock of the Basket, the primary U.S.
securities exchange or organized market of trading for the
constituent stock. If a reorganization event has occurred, the
relevant exchange will be the stock exchange or securities
market on which the distribution property (as defined below
under “Additional Information — Antidilution
Adjustments — Adjustments for Reorganization
Events” on
page P-
22) that is a listed equity security is principally traded,
as determined by the calculation agent. The relevant exchange
for each constituent stock of the Basket at the date hereof is
set forth below:
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AK Steel Holding Corporation
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NYSE
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Apple Inc.
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NASDAQ
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Deere & Company
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NYSE
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EMC Corporation
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NYSE
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General Cable Corporation
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NYSE
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JPMorgan Chase & Co.
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NYSE
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Marathon Oil Corporation
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NYSE
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Schering-Plough Corporation
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NYSE
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Target Corporation
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NYSE
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Terex Corporation
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NYSE
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Market Disruption Event:
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A market disruption event means the occurrence or existence of
any of the following events:
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• a suspension, absence or material
limitation of trading in a constituent stock on its primary
market for more than two hours of trading or during the one-half
hour before the close of trading in that market, as determined
by the calculation agent in its sole discretion;
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• a suspension, absence or material
limitation of trading in option or futures contracts relating to
a constituent stock of the Basket, if available, in the primary
market for those contracts for more than two hours of trading or
during the one-half hour before the close of trading in that
market, as determined by the calculation agent in its sole
discretion;
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• a constituent stock of the Basket does
not trade on the New York Stock Exchange, the American Stock
Exchange, the Nasdaq Global Market or what was the primary
market for that constituent stock, as determined by the
calculation agent in its sole discretion; or
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• any other event, if the calculation
agent determines in its sole discretion that the event
materially interferes with our ability or the ability of any of
our affiliates to unwind all or a material portion of a hedge
with respect to the securities that we or our affiliates have
effected or may effect as described below under “Use of
Proceeds and Hedging”.
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P-16
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The following events will not be market disruption
events:
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• a limitation on the hours or number of
days of trading in a constituent stock of the Basket on its
primary market, but only if the limitation results from an
announced change in the regular business hours of the relevant
market; and
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• a decision to permanently discontinue
trading in the option or futures contracts relating to a
constituent stock of the Basket.
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For this purpose, an
absence of trading
in the primary
securities market on which option or futures contracts relating
to a constituent stock of the Basket, if available, are traded
will not include any time when that market is itself closed for
trading under ordinary circumstances. In contrast, a suspension
or limitation of trading in option or futures contracts relating
to a constituent stock of the Basket, if available, in the
primary market for those contracts, by reason of any of:
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• a price change exceeding limits set by
that market;
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• an imbalance of orders relating to those
contracts; or
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• a disparity in bid and asked quotes
relating to those contacts
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will constitute a suspension or material limitation of trading
in option or futures contracts, as the case may be, relating to
that constituent stock in the primary market for those contracts.
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Antidilution Adjustments:
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The share multiplier of each constituent stock of the Basket is
subject to adjustment by the calculation agent as a result of
the dilution and reorganization adjustments described in this
pricing supplement under “Additional
Information — Antidilution Adjustments”. We
describe the risks relating to dilution above under “Risk
Factors — You have limited antidilution
protection” on
page P-10.
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Calculation Agent:
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Wachovia Capital Markets, LLC
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Business Day:
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For purposes of this issuance, a
business day
means a
Monday, Tuesday, Wednesday, Thursday or Friday that is not a day
on which banking institutions in the City of New York generally
are authorized or obligated by law, regulation or executive
order to close.
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Trading Day:
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For purposes of this issuance, a
trading day
means a day,
as determined by the calculation agent, on which trading is
generally conducted on the NYSE, the American Stock Exchange,
the Nasdaq Global Market, the Chicago Board Mercantile Exchange
and the Chicago Board of Options Exchange and in the
over-the-counter market for equity securities in the United
States.
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Tax Redemption:
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No
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Additional Amounts Payable:
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No
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Authorized Denominations:
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$10.00 and integral multiples of $10.00 in excess thereof
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Form of Securities:
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Book-entry
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Listing:
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The securities will not be listed or displayed on any securities
exchange or any electronic communications network.
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P-17
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Events of Default and Acceleration:
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If the maturity of the notes is accelerated upon an event of
default under the indenture referenced in the accompanying
prospectus, the amount payable upon acceleration will be
determined by the calculation agent. Such amount will be the
redemption amount calculated as if the date of declaration of
acceleration were the valuation date.
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The securities are not renewable notes, index linked notes,
amortizing notes or zero coupon notes, each as described in the
prospectus supplement. In addition, there is no optional
redemption or extension of maturity in connection with the
securities.
Capitalized terms used in this pricing supplement without
definition have the meanings given to them in the accompanying
prospectus supplement and prospectus.
P-18
ADDITIONAL
INFORMATION
Antidilution
Adjustments
The share multiplier of each constituent stock of the Basket is
subject to adjustment by the calculation agent as a result of
the dilution and reorganization adjustments described in this
section. The adjustments described below do not cover all events
that could affect the market value of your securities. We
describe the risks relating to dilution above under “Risk
Factors — You have limited antidilution
protection” on
page P-10.
How
adjustments will be made
If one of the events described below occurs with respect to a
constituent stock of the Basket and the calculation agent
determines that the event has a dilutive or concentrative effect
on the market price of that constituent stock, the calculation
agent will calculate a corresponding adjustment to the share
multiplier as the calculation agent deems appropriate to account
for that dilutive or concentrative effect. For example, if an
adjustment is required because of a two-for-one stock split,
then the share multiplier will be adjusted by the calculation
agent by multiplying the existing share multiplier by a fraction
whose numerator is the number of shares of the constituent stock
of the Basket outstanding immediately after the stock split and
whose denominator is the number of shares of the constituent
stock outstanding immediately prior to the stock split.
Consequently, the share multiplier will be adjusted to double
the prior share multiplier, due to the corresponding decrease in
the market price of the constituent stock.
The calculation agent will also determine the effective date of
that adjustment, and the replacement of a constituent stock of
the Basket, if applicable, in the event of consolidation or
merger or certain other events in respect of a Constituent Stock
Issuer. Upon making any such adjustment, the calculation agent
will give notice as soon as practicable to the trustee and the
issuing and paying agent, stating the adjustment to the share
multiplier. The calculation agent will not be required to make
any adjustments to the share multiplier after the close of
business on the fifth trading day immediately prior to the
maturity date. In no event, however, will an antidilution
adjustment to a share multiplier during the term of the
securities be deemed to change the principal amount per
security, which is fixed at $10.00.
If more than one event requiring adjustment occurs with respect
to a constituent stock of the Basket, the calculation agent will
make an adjustment for each event in the order in which the
events occur, and on a cumulative basis.
Thus, having made an adjustment for the first event, the
calculation agent will adjust the share multiplier for the
second event, applying the required adjustment to the share
multiplier as already adjusted for the first event, and so on
for any subsequent events.
For any dilution event described below, other than a
consolidation or merger, the calculation agent will not have to
adjust a share multiplier unless the adjustment would result in
a change to the share multiplier then in effect of at least
0.1%. The share multiplier resulting from any adjustment will be
rounded up or down, as appropriate, to the nearest one-hundred
thousandth.
If an event requiring an antidilution adjustment occurs, the
calculation agent will make the adjustment with a view to
offsetting, to the extent practical, any change in your economic
position relative to your securities that results solely from
that event. The calculation agent may, in its sole discretion,
modify the antidilution adjustments as necessary to ensure an
equitable result.
The calculation agent will make all determinations with respect
to antidilution adjustments, including any determination as to
whether an event requiring adjustment has occurred, as to the
nature of the adjustment required and how it will be made or as
to the value of any property distributed in a reorganization
event, and will do so in its sole discretion. In the absence of
manifest error, those determinations will be conclusive for all
purposes and will be binding on you and us, without any
liability on the part of the calculation agent. You will not be
entitled to any compensation from us for any loss suffered as a
result of any of these determinations by the calculation agent.
The calculation agent will provide information about the
adjustments that it makes upon your written request.
P-19
No adjustments will be made for certain other events, such as
offerings of common stock by a Constituent Stock Issuer for cash
or in connection with the occurrence of a partial tender or
exchange offer for a constituent stock of the Basket by its
Constituent Stock Issuer.
The following events are those that may require an antidilution
adjustment of a share multiplier:
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a subdivision, consolidation or reclassification of a
constituent stock of the Basket or a distribution or dividend of
a constituent stock to existing holders of the constituent stock
by way of bonus, capitalization or similar issue;
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a distribution or dividend to existing holders of a constituent
stock of the Basket of:
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•
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shares of the constituent stock,
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•
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other share capital or securities granting the right to payment
of dividends
and/or
the
proceeds of liquidation of its Constituent Stock Issuer equally
or proportionately with such payments to holders of the
constituent stock, or
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•
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any other type of securities, rights or warrants in any case for
payment (in cash or otherwise) at less than the prevailing
market price as determined by the calculation agent;
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•
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the declaration by a Constituent Stock Issuer of an
extraordinary or special dividend or other distribution whether
in cash or shares of the constituent stock or other assets;
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•
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a repurchase by a Constituent Stock Issuer of its common stock
whether out of profits or capital and whether the consideration
for such repurchase is cash, securities or otherwise;
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•
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any other similar event that may have a dilutive or
concentrative effect on the market price of a constituent stock
of the Basket; and
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•
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a consolidation of a Constituent Stock Issuer with another
company or merger of its Constituent Stock Issuer with another
company.
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Stock
Splits and Reverse Stock Splits
A stock split is an increase in the number of a
corporation’s outstanding shares of stock without any
change in its stockholders’ equity. Each outstanding share
will be worth less as a result of a stock split.
A reverse stock split is a decrease in the number of a
corporation’s outstanding shares of stock without any
change in its stockholders’ equity. Each outstanding share
will be worth more as a result of a reverse stock split.
If a constituent stock of the Basket is subject to a stock split
or a reverse stock split, then once the split has become
effective the calculation agent will adjust the share multiplier
to equal the product of the prior share multiplier and the
number of shares issued in such stock split or reverse stock
split with respect to one share of the constituent stock.
Stock
Dividends
In a stock dividend, a corporation issues additional shares of
its stock to all holders of its outstanding stock in proportion
to the shares they own. Each outstanding share will be worth
less as a result of a stock dividend.
If a constituent stock of the Basket is subject to a stock
dividend payable in shares of that constituent stock that is
given ratably to all holders of shares of the constituent stock,
then once the dividend has become effective the calculation
agent will adjust the share multiplier on the ex-dividend date
to equal the sum of the prior share multiplier plus the product
of:
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the number of shares issued with respect to one share of the
constituent stock, and
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the prior share multiplier.
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P-20
The ex-dividend date for any dividend or other distribution is
the first day on and after which a constituent stock trades
without the right to receive that dividend or distribution.
No
Adjustments for Other Dividends and Distributions
The share multiplier will not be adjusted to reflect dividends,
including cash dividends, or other distributions paid with
respect to a constituent stock of the Basket, other than:
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stock dividends described above,
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•
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issuances of transferable rights and warrants as described in
“— Transferable Rights and Warrants” below,
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•
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distributions that are spin-off events described in
“— Reorganization Events” beginning on
page P-22, and
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•
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extraordinary dividends described below.
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An
extraordinary dividend
means each of (a) the full
amount per share of a constituent stock of the Basket of any
cash dividend or special dividend or distribution that is
identified by its Constituent Stock Issuer as an extraordinary
or special dividend or distribution, (b) the excess of any
cash dividend or other cash distribution (that is not otherwise
identified by the Constituent Stock Issuer as an extraordinary
or special dividend or distribution) distributed per share of a
constituent stock over the immediately preceding cash dividend
or other cash distribution, if any, per share of the constituent
stock that did not include an extraordinary dividend (as
adjusted for any subsequent corporate event requiring an
adjustment as described in this pricing supplement, such as a
stock split or reverse stock split) if such excess portion of
the dividend or distribution is more than 5% of the closing
price of the constituent stock on the trading day preceding the
ex-dividend date (that is, the day on and after which
transactions in the constituent stock on an organized securities
exchange or trading system no longer carry the right to receive
that cash dividend or other cash distribution) for the payment
of such cash dividend or other cash distribution (such closing
price, the
base closing price
) and (c) the full cash
value of any non-cash dividend or distribution per share of a
constituent stock (excluding marketable securities, as defined
below).
If a constituent stock of the Basket is subject to an
extraordinary dividend, then once the extraordinary dividend has
become effective the calculation agent will adjust the share
multiplier on the ex-dividend date to equal the product of:
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•
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the prior share multiplier, and
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•
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a fraction, the numerator of which is the base closing price of
the constituent stock of the Basket on the trading day preceding
the ex-dividend date and the denominator of which is the amount
by which the base closing price of the constituent stock on the
trading day preceding the ex-dividend date exceeds the
extraordinary dividend.
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Notwithstanding anything herein, the initiation by a Constituent
Stock Issuer of an ordinary dividend on its constituent stock of
the Basket or any announced increase in the ordinary dividend on
its constituent stock will not constitute an extraordinary
dividend requiring an adjustment.
To the extent an extraordinary dividend is not paid in cash, the
value of the non-cash component will be determined by the
calculation agent in its sole discretion. A distribution on a
constituent stock of the Basket that is a dividend payable in
shares of that constituent stock, an issuance of rights or
warrants or a spin-off event and also an extraordinary dividend
will result in an adjustment to the number of shares of that
constituent stock only as described in “— Stock
Dividends” above, “— Transferable Rights and
Warrants” below or “— Reorganization
Events” below, as the case may be, and not as described
here.
Transferable
Rights and Warrants
If a Constituent Stock Issuer issues transferable rights or
warrants to all holders of a constituent stock of the Basket to
subscribe for or purchase the constituent stock at an exercise
price per share that is less than the
P-21
closing price of the constituent stock on the trading day before
the ex-dividend date for the issuance, then the share multiplier
will be adjusted to equal the product of:
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the prior share multiplier, and
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a fraction, (1) the numerator of which will be the number
of shares of the constituent stock of the Basket outstanding at
the close of trading on the trading day before the ex-dividend
date (as adjusted for any subsequent event requiring an
adjustment hereunder) plus the number of additional shares of
the constituent stock offered for subscription or purchase
pursuant to the rights or warrants and (2) the denominator
of which will be the number of shares of the constituent stock
outstanding at the close of trading on the trading day before
the ex-dividend date (as adjusted for any subsequent event
requiring an adjustment hereunder) plus the number of additional
shares of the constituent stock (referred to herein as the
additional shares
) that the aggregate offering price of
the total number of shares of the constituent stock so offered
for subscription or purchase pursuant to the rights or warrants
would purchase at the closing price on the trading day before
the ex-dividend date for the issuance.
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The number of additional shares will be equal to:
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the product of (1) the total number of additional shares of
the constituent stock of the Basket offered for subscription or
purchase pursuant to the rights or warrants and (2) the
exercise price of the rights or warrants,
divided by
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the closing price of the constituent stock on the trading day
before the ex-dividend date for the issuance.
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If the number of shares of the constituent stock of the Basket
actually delivered in respect of the rights or warrants differs
from the number of shares of the constituent stock offered in
respect of the rights or warrants, then the share multiplier
will promptly be readjusted to the share multiplier that would
have been in effect had the adjustment been made on the basis of
the number of shares of the constituent stock actually delivered
in respect of the rights or warrants.
Reorganization
Events
Each of the following is a reorganization event:
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a constituent stock of the Basket is reclassified or changed,
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a Constituent Stock Issuer has been subject to a merger,
consolidation or other combination and either is not the
surviving entity or is the surviving entity but all outstanding
shares of its constituent stock of the Basket are exchanged for
or converted into other property,
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•
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a statutory share exchange involving outstanding shares of a
constituent stock of the Basket and the securities of another
entity occurs, other than as part of an event described above,
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•
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a Constituent Stock Issuer sells or otherwise transfers its
property and assets as an entirety or substantially as an
entirety to another entity,
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a Constituent Stock Issuer effects a spin-off, other than as
part of an event described above (in a spin-off, a corporation
issues to all holders of its common stock equity securities of
another issuer), or
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a Constituent Stock Issuer is liquidated, dissolved or wound up
or is subject to a proceeding under any applicable bankruptcy,
insolvency or other similar law, or another entity completes a
tender or exchange offer for all the outstanding shares of its
constituent stock of the Basket.
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Adjustments
for Reorganization Events
If a reorganization event occurs, then the calculation agent
will adjust the share multiplier to reflect the amount and type
of property or properties — whether cash, securities,
other property or a combination thereof — that a prior
holder of the number of shares of a constituent stock of the
Basket represented by its investment in the securities would
have been entitled to in relation to an amount of shares of the
constituent
P-22
stock equal to what a holder of shares of the constituent stock
would hold after the reorganization event has occurred. We refer
to this new property as the
distribution property
.
For the purpose of making an adjustment required by a
reorganization event, the calculation agent, in its sole
discretion, will determine the value of each type of the
distribution property. For any distribution property consisting
of a security, the calculation agent will use the closing price
of the security on the relevant trading day. The calculation
agent may value other types of property in any manner it
determines, in its sole discretion, to be appropriate. If a
holder of shares of a constituent stock of the Basket may elect
to receive different types or combinations of types of
distribution property in the reorganization event, the
distribution property will consist of the types and amounts of
each type distributed to a holder of shares of the constituent
stock that makes no election, as determined by the calculation
agent in its sole discretion.
If any reorganization event occurs, in each case as a result of
which the holders of a constituent stock of the Basket receive
any equity security listed on a national securities exchange or
traded on the Nasdaq Global Market, which we refer to as a
marketable security
, other securities or other property,
assets or cash, which we collectively refer to as
exchange
property
, the amount payable upon exchange at maturity with
respect to the principal amount of each security following the
effective date for such reorganization event (or, if applicable,
in the case of spinoff stock, the ex-dividend date for the
distribution of such spinoff stock) and any required adjustment
to the share multiplier will be determined in accordance with
the following and, for purposes of certain calculations and
determinations in respect of the securities, such as the
determination of the final stock price, the term
constituent
stock
in this pricing supplement will be deemed to mean:
(a) if the constituent stock of the Basket continues to be
outstanding, the constituent stock (if applicable, as
reclassified upon the issuance of any tracking stock) at the
share multiplier in effect on the valuation date (taking into
account any adjustments for any distributions described under
paragraph (c)(1) below); and
(b) for each marketable security received in such
reorganization event, which we refer to as a
new stock
,
including the issuance of any tracking stock or spinoff stock or
the receipt of any stock received in exchange for the
constituent stock of the Basket, the number of shares of the new
stock received with respect to one share of the constituent
stock multiplied by the share multiplier for the constituent
stock on the trading day immediately prior to the effective date
of the reorganization event (the
new stock share
multiplier
), as adjusted to the valuation date; and
(c) for any cash and any other property or securities other
than marketable securities received in such reorganization
event, which we refer to as
non-stock exchange property
,
(1) if the constituent stock of the Basket continues to be
outstanding, a number of shares of the constituent stock,
determined by the calculation agent on the trading day
immediately prior to the effective date of such reorganization
event, with an aggregate value equal to the share multiplier in
effect for the constituent stock on such trading day multiplied
by a fraction, the numerator of which is the value of the
non-stock exchange property on such trading day and the
denominator of which is the amount by which the closing price of
the constituent stock exceeds the value of the non-stock
exchange property on such trading day; and the number of such
shares of the constituent stock determined in accordance with
this clause will be added at the time of such adjustment to the
share multiplier calculated under (a) above,
(2) if the constituent stock of the Basket is surrendered
for exchange property that includes new stock:
(i) if the new stock is a marketable security in existence
prior to the effective date of the reorganization event, a
number of shares of the new stock determined by the calculation
agent on the trading day immediately prior to the effective date
of such reorganization event with an aggregate value equal to
(x) the new stock share multiplier as calculated under
(b) above (without taking into account the additional
shares in this provision) multiplied by (y) a fraction, the
numerator of which is the value on such trading day of the
non-stock exchange property received per share of the
constituent stock and the denominator of which is the amount by
P-23
which the closing price of the new stock exceeds the value on
such trading day of the non-stock exchange property received per
share of the constituent stock, and
(ii) if the new stock is not a marketable security in
existence prior to the effective date of the reorganization
event, a number of shares of the new stock determined by the
calculation agent on the effective date of such reorganization
event (or the following trading day if such day is not a trading
day or if a market disruption event occurs or is continuing on
such day) with an aggregate value equal to the new stock share
multiplier in effect for the new stock on such trading day
multiplied by a fraction, the numerator of which is the value on
such trading day of the non-stock exchange property received per
share of the constituent stock and the denominator of which is
the amount by which the closing price of the new stock exceeds
the value on such trading day of the non-stock exchange property
received per share of the constituent stock, where the number of
such shares of the new stock determined in accordance with this
clause will be added to the new stock share multiplier as
calculated under (b) above either at the time of such
adjustment, in the case of clause (i) above, or on the date
of determination of additional shares, in case of
clause (ii) above, or
(3) if the constituent stock of the Basket is surrendered
exclusively for non-stock exchange property of the surviving
entity in a reorganization event, any marketable security of the
surviving entity, which shall be chosen by the calculation agent
in its sole discretion, or
(4) if the constituent stock of the Basket is surrendered
exclusively for non-stock exchange property of the surviving
entity in a reorganization event, and either such surviving
entity has no marketable securities or there is no surviving
entity (in each case, a
reference basket event
), an
initially equal dollar weighted basket of three reference basket
stocks (as defined below) with an aggregate value on the
effective date of such reorganization event equal to the value
of the non-stock exchange property multiplied by the share
multiplier in effect for the constituent stock on the trading
day immediately prior to the effective date of such
reorganization event.
If a reorganization event occurs with respect to a constituent
stock of the Basket and the calculation agent adjusts the share
multiplier to reflect the distribution property in the event as
described above, the calculation agent will make further
antidilution adjustments for any later events that affect the
distribution property, or any component of the distribution
property, comprising the new share multiplier. The calculation
agent will do so to the same extent that it would make
adjustments if the shares of the constituent stock were
outstanding and were affected by the same kinds of events. If a
subsequent reorganization event affects only a particular
component of the number of shares of the constituent stock, the
required adjustment will be made with respect to that component
as if it alone were the number of shares of the constituent
stock.
For example, if a Constituent Stock Issuer merges into another
company and each share of that constituent stock is converted
into the right to receive two common shares of the surviving
company and a specified amount of cash, the shares of the
constituent stock will be adjusted to reflect two common shares
of the surviving company and the specified amount of cash. The
calculation agent will adjust the share multiplier to reflect
any later stock split or other event, including any later
reorganization event, that affects the common shares of the
surviving company, to the extent described in this section
entitled “Additional Information — Antidilution
Adjustments”, as if the common shares were shares of the
constituent stock. In that event, the cash component will not be
adjusted but will continue to be a component of the number of
shares of the constituent stock (with no interest adjustment).
Consequently, the final stock price will include the final value
of the two shares of the surviving company and the cash.
Reference
Basket Events
Following the occurrence of a reference basket event described
in paragraph (c)(4) above with respect to a constituent stock of
the Basket, the redemption amount with respect to that
constituent stock will be determined by reference to reference
basket stocks at the basket stock share multiplier then in
effect for each such reference basket stock as determined in
accordance with the following paragraph.
P-24
The
reference basket stocks
will be the three stocks with
the largest market capitalization among the stocks that then
comprise the S&P 500 Index (or, if publication of such
Index is discontinued, any successor or substitute index
selected by the calculation agent in its sole discretion) with
the same primary Standard Industrial Classification Code (
SIC
code
) as the relevant Constituent Stock Issuer; provided,
however, that a reference basket stock will not include any
stock that is subject to a trading restriction under the trading
restriction policies of Eksportfinans or any of its affiliates
that would materially limit the ability of Eksportfinans or any
of its affiliates to hedge the securities with respect to that
stock. In the event that three reference basket stocks cannot be
identified from the S&P 500 Index by primary SIC code for
which there is no trading restriction, the remaining reference
basket stock(s) will be selected by the calculation agent from
the largest market capitalization stock(s) within the same
Division and Major Group classification (as defined by the
Office of Management and Budget) as the primary SIC code for the
relevant Constituent Stock Issuer. Each reference basket stock
will be assigned a basket stock share multiplier equal to the
number of shares of such reference basket stock with a closing
price on the effective date of such reorganization event equal
to the product of (a) the value of the non-stock exchange
property, (b) the share multiplier in effect for the
constituent stock of the Basket on the trading day immediately
prior to the effective date of such reorganization event and
(c) 0.3333333.
Calculation
agent
We have initially appointed Wachovia Capital Markets, LLC as
calculation agent. Unless there is manifest error, these
determinations by the calculation agent shall be final and
binding on us and the holders of the securities.
P-25
THE
BASKET
Provided below is a brief description of the Constituent Stock
Issuers obtained from publicly available information published
by each Constituent Stock Issuer:
AK Steel Holding Corporation (
AK Steel
) has disclosed
that is a fully-integrated producer of flat-rolled carbon,
stainless and electrical steels and tubular products. AK
Steel’s operations consist of seven steelmaking and
finishing plants. Operations also include two tube plants that
further finish flat-rolled carbon and stainless steel into
welded steel tubing used in the automotive, large truck and
construction markets. In addition, the company’s operations
include European trading companies that buy and sell steel and
steel products and other materials.
Apple Inc. (
Apple
) has disclosed that it is involved in
the design, manufacture, and marketing of personal computers,
portable digital music players, and mobile communication devices
and that it sells a variety of related software, services,
peripherals, and networking solutions. Apple sells its products
worldwide through its online stores, its retail stores, its
direct sales force, and third-party wholesalers, resellers, and
value-added resellers.
Deere & Company (
Deere
) has disclosed that it
has manufactured agricultural machinery since 1837. Its
operations consist of four major business segments, namely, an
agricultural equipment segment, a commercial and consumer
equipment segment, a construction and forestry segment (together
the
Equipment Operations
), and a credit segment.
Deere’s credit service primarily finance sales and leases
of equipment by John Deere dealers and trade receivables
purchased from the Equipment Operations.
EMC Corporation (
EMC
) has disclosed that it develops,
delivers and supports the information technology industry’s
broadest range of information infrastructure technologies and
solutions. EMC’s information infrastructure business
supports customers’ information lifecycle management
strategies and helps them build information infrastructures that
store, protect, optimize and leverage their vast and growing
quantities of information. EMC’s information infrastructure
business consists of three segments — Information
Storage, Content Management and Archiving, and RSA Information
Security.
General Cable Corporation (
General Cable
) has disclosed
that it is a global leader in developing, designing,
manufacturing, marketing, distributing and installing copper,
aluminum and fiber optic wire and cable products. General Cable
operates in three segments: (1) North America,
(2) Europe and North Africa, and (3) Rest of World,
which consists of operations in Latin America, Sub-Saharan
Africa, Middle East and Asia Pacific.
JPMorgan Chase & Co. has disclosed that it is a
financial holding company. Its principal bank subsidiaries are
JPMorgan Chase Bank, National Association, a national banking
association with branches in 17 states, and Chase Bank USA,
National Association, a national bank that is JPMorgan
Chase & Co.’s credit card issuing bank. JPMorgan
Chase & Co.’s activities are organized into six
business segments (Investment Bank, Retail Financial Services,
Card Services, Commercial Banking, Treasury &
Securities Services and Asset Management) and Corporate, which
includes its Private Equity and Treasury businesses, as well as
corporate support functions.
Marathon Oil Corporation has disclosed that it has operations
consisting of four operating segments: (1) Exploration and
Production, which explores for, produces and markets liquid
hydrocarbons and natural gas on a worldwide basis; (2) Oil
Sands Mining, which mines, extracts and transports bitumen from
oil sands deposits in Alberta, Canada, and upgrades the bitumen
to produce and market synthetic crude oil and by-products;
(3) Refining, Marketing and Transportation, which refines,
markets and transports crude oil and petroleum products,
primarily in the Midwest, upper Great Plains, Gulf Coast and
southeastern regions of the United States; and
(4) Integrated Gas, which markets and transports products
manufactured from natural gas, such as liquefied natural gas and
methanol, on a worldwide basis, and is developing other projects
to link stranded natural gas resources with key demand areas.
P-26
Schering-Plough Corporation has disclosed that it is an
innovation-driven, science-centered global health care company
which applies its
research-and-development
platform to human prescription, animal health and consumer
products.
Target Corporation (
Target
) has disclosed that it
operates large-format general merchandise and food discount
stores in the United States, offering both everyday essentials
and fashionable, differentiated merchandise. Target’s
credit card operations represent an integral component of its
core retail business. Target also operates Target.com, a fully
integrated online business.
Terex Corporation (
Terex
) has disclosed that it is a
diversified global manufacturer of capital equipment focused on
delivering reliable, customer relevant solutions for the
construction, infrastructure, quarrying, surface mining,
shipping, transportation, refining and utility industries. Terex
operates in five reportable segments: (i) Terex Aerial Work
Platforms, (ii) Terex Construction, (iii) Terex
Cranes, (iv) Terex Materials Processing & Mining
and (v) Terex Roadbuilding, Utility Products and Other.
The
Constituent Stock Issuers
This pricing supplement relates only to the securities and does
not relate to the constituent stocks of the Basket. We have
derived the information about the Constituent Stock Issuers in
this pricing supplement from publicly available documents,
without independent verification. We have not participated in
the preparation of any of the documents or made any “due
diligence” investigation or any inquiry of the Constituent
Stock Issuers in connection with the offering of the securities.
Neither we nor any of our affiliates assumes any responsibility
for the adequacy or accuracy of the information about the
Constituent Stock Issuers contained in this pricing supplement.
Furthermore, we do not know whether the Constituent Stock
Issuers have disclosed all events occurring before the date of
this pricing supplement — including events that could
affect the accuracy or completeness of the publicly available
documents referred to above, the market prices of the
constituent stocks of the Basket and, therefore, the initial
stock price and the final stock prices of the constituent stocks
of the Basket that the calculation agent will use to determine
the redemption amount with respect to any constituent stock or
the aggregate redemption amount with respect to your securities.
You, as an investor in the securities, should make your own
investigation of the Constituent Stock Issuers.
Historical
Data
The constituent stocks of the Basket are listed on the following
exchanges under the following symbols:
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Constituent Stock
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Symbol
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Listing
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AK Steel Holding Corporation
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AKS
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NYSE
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Apple Inc.
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AAPL
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NASDAQ
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Deere & Company
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DE
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NYSE
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General Cable Corporation
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BGC
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NYSE
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JPMorgan Chase & Co.
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JPM
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NYSE
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Marathon Oil Corporation
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MRO
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NYSE
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Schering-Plough Corporation
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SGP
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NYSE
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EMC Corporation
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EMC
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NYSE
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Target Corporation
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TGT
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NYSE
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Terex Corporation
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TEX
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NYSE
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The following tables set forth the high closing price, low
closing price and quarter-end closing prices for the constituent
stocks of the Basket. The information given below is for the
four calendar quarters in each of 2005, 2006 and 2007, the first
calendar quarter in 2008 and for the second partial calendar
quarter in 2008. On April 7, 2008, the closing price for AK
Steel Holding Corporation was $62.99 per share; the closing
price for Apple Inc. was $155.89 per share; the closing price
for Deere & Company was $88.40 per share; the closing
price for EMC Corporation was $14.90 per share; the closing
price for General Cable Corporation was $65.71 per share; the
closing price for JPMorgan Chase & Co. was $45.54 per
share; the closing price for Marathon
P-27
Oil Corporation was $48.58 per share; the closing price for
Schering-Plough Corporation was $16.76 per share; the closing
price for Target Corporation was $52.77 per share; and the
closing price for Terex Corporation was $67.67 per share. The
closing prices listed below were obtained from Bloomberg
Financial Markets without independent verification. The
historical closing prices of the constituent stocks of the
Basket should not be taken as an indication of future
performance, and no assurance can be given that the prices of
the constituent stocks of the Basket will not decrease so that
you would receive less than the principal amount of your
securities at maturity.
Quarterly
High Closing Price, Low Closing Price and Quarter-End Closing
Price of
AK Steel Holding Corporation
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High Closing
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Low Closing
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Quarter-End
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Price of
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Price of
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Closing Price of
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Quarter-End
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AK Steel Holding
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AK Steel Holding
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AK Steel Holding
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Quarter-Start Date
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Date
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Corporation
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Corporation
|
|
|
Corporation
|
|
|
|
|
01/01/2005
|
|
|
03/31/2005
|
|
|
|
17.94
|
|
|
|
10.68
|
|
|
|
11.06
|
|
|
04/01/2005
|
|
|
06/30/2005
|
|
|
|
11.34
|
|
|
|
6.30
|
|
|
|
6.41
|
|
|
07/01/2005
|
|
|
09/30/2005
|
|
|
|
9.61
|
|
|
|
6.43
|
|
|
|
8.57
|
|
|
10/01/2005
|
|
|
12/31/2005
|
|
|
|
8.89
|
|
|
|
6.45
|
|
|
|
7.95
|
|
|
01/01/2006
|
|
|
03/31/2006
|
|
|
|
15.24
|
|
|
|
7.74
|
|
|
|
15.00
|
|
|
04/01/2006
|
|
|
06/30/2006
|
|
|
|
15.92
|
|
|
|
11.30
|
|
|
|
13.83
|
|
|
07/01/2006
|
|
|
09/30/2006
|
|
|
|
14.05
|
|
|
|
11.91
|
|
|
|
12.14
|
|
|
10/01/2006
|
|
|
12/31/2006
|
|
|
|
17.03
|
|
|
|
11.80
|
|
|
|
16.90
|
|
|
01/01/2007
|
|
|
03/31/2007
|
|
|
|
23.68
|
|
|
|
16.39
|
|
|
|
23.39
|
|
|
04/01/2007
|
|
|
06/30/2007
|
|
|
|
38.45
|
|
|
|
23.67
|
|
|
|
37.37
|
|
|
07/01/2007
|
|
|
09/30/2007
|
|
|
|
44.34
|
|
|
|
30.74
|
|
|
|
43.95
|
|
|
10/01/2007
|
|
|
12/31/2007
|
|
|
|
53.21
|
|
|
|
40.17
|
|
|
|
46.24
|
|
|
01/01/2008
|
|
|
03/31/2008
|
|
|
|
55.90
|
|
|
|
35.48
|
|
|
|
54.42
|
|
|
04/01/2008
|
|
|
04/07/2008
|
|
|
|
62.99
|
|
|
|
57.91
|
|
|
|
62.99
|
|
Quarterly
High Closing Price, Low Closing Price and Quarter-End Closing
Price of Apple Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Closing
|
|
|
Low Closing
|
|
|
Quarter-End
|
|
|
|
|
Quarter-End
|
|
|
Price of
|
|
|
Price of
|
|
|
Closing Price of
|
|
|
Quarter-Start Date
|
|
Date
|
|
|
Apple Inc.
|
|
|
Apple Inc.
|
|
|
Apple Inc.
|
|
|
|
|
01/01/2005
|
|
|
03/31/2005
|
|
|
|
45.07
|
|
|
|
31.65
|
|
|
|
41.67
|
|
|
04/01/2005
|
|
|
06/30/2005
|
|
|
|
43.74
|
|
|
|
34.13
|
|
|
|
36.81
|
|
|
07/01/2005
|
|
|
09/30/2005
|
|
|
|
53.84
|
|
|
|
36.50
|
|
|
|
53.61
|
|
|
10/01/2005
|
|
|
12/31/2005
|
|
|
|
74.98
|
|
|
|
49.25
|
|
|
|
71.89
|
|
|
01/01/2006
|
|
|
03/31/2006
|
|
|
|
85.59
|
|
|
|
58.71
|
|
|
|
62.72
|
|
|
04/01/2006
|
|
|
06/30/2006
|
|
|
|
71.89
|
|
|
|
56.02
|
|
|
|
57.27
|
|
|
07/01/2006
|
|
|
09/30/2006
|
|
|
|
77.61
|
|
|
|
50.67
|
|
|
|
76.98
|
|
|
10/01/2006
|
|
|
12/31/2006
|
|
|
|
91.81
|
|
|
|
73.23
|
|
|
|
84.84
|
|
|
01/01/2007
|
|
|
03/31/2007
|
|
|
|
97.10
|
|
|
|
83.27
|
|
|
|
92.91
|
|
|
04/01/2007
|
|
|
06/30/2007
|
|
|
|
125.09
|
|
|
|
90.24
|
|
|
|
122.04
|
|
|
07/01/2007
|
|
|
09/30/2007
|
|
|
|
154.50
|
|
|
|
117.05
|
|
|
|
153.47
|
|
|
10/01/2007
|
|
|
12/31/2007
|
|
|
|
199.83
|
|
|
|
153.76
|
|
|
|
198.08
|
|
|
01/01/2008
|
|
|
03/31/2008
|
|
|
|
194.93
|
|
|
|
119.15
|
|
|
|
143.50
|
|
|
04/01/2008
|
|
|
04/07/2008
|
|
|
|
155.89
|
|
|
|
147.49
|
|
|
|
155.89
|
|
P-28
Quarterly
High Closing Price, Low Closing Price and Quarter-End Closing
Price of Deere & Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Closing
|
|
|
Low Closing
|
|
|
Quarter-End
|
|
|
|
|
Quarter-End
|
|
|
Price of
|
|
|
Price of
|
|
|
Closing Price of
|
|
|
Quarter-Start Date
|
|
Date
|
|
|
Deere & Company
|
|
|
Deere & Company
|
|
|
Deere & Company
|
|
|
|
|
01/01/2005
|
|
|
03/31/2005
|
|
|
|
36.47
|
|
|
|
32.93
|
|
|
|
33.57
|
|
|
04/01/2005
|
|
|
06/30/2005
|
|
|
|
34.06
|
|
|
|
29.85
|
|
|
|
32.75
|
|
|
07/01/2005
|
|
|
09/30/2005
|
|
|
|
36.77
|
|
|
|
30.20
|
|
|
|
30.60
|
|
|
10/01/2005
|
|
|
12/31/2005
|
|
|
|
35.29
|
|
|
|
28.58
|
|
|
|
34.06
|
|
|
01/01/2006
|
|
|
03/31/2006
|
|
|
|
39.89
|
|
|
|
34.00
|
|
|
|
39.53
|
|
|
04/01/2006
|
|
|
06/30/2006
|
|
|
|
45.67
|
|
|
|
38.65
|
|
|
|
41.75
|
|
|
07/01/2006
|
|
|
09/30/2006
|
|
|
|
42.39
|
|
|
|
34.34
|
|
|
|
41.96
|
|
|
10/01/2006
|
|
|
12/31/2006
|
|
|
|
49.07
|
|
|
|
41.80
|
|
|
|
47.54
|
|
|
01/01/2007
|
|
|
03/31/2007
|
|
|
|
57.98
|
|
|
|
45.45
|
|
|
|
54.32
|
|
|
04/01/2007
|
|
|
06/30/2007
|
|
|
|
62.15
|
|
|
|
52.24
|
|
|
|
60.37
|
|
|
07/01/2007
|
|
|
09/30/2007
|
|
|
|
74.21
|
|
|
|
58.55
|
|
|
|
74.21
|
|
|
10/01/2007
|
|
|
12/31/2007
|
|
|
|
93.12
|
|
|
|
70.76
|
|
|
|
93.12
|
|
|
01/01/2008
|
|
|
03/31/2008
|
|
|
|
94.69
|
|
|
|
76.40
|
|
|
|
80.44
|
|
|
04/01/2008
|
|
|
04/07/2008
|
|
|
|
88.40
|
|
|
|
79.82
|
|
|
|
88.40
|
|
Quarterly
High Closing Price, Low Closing Price and Quarter-End Closing
Price of EMC Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Closing
|
|
|
Low Closing
|
|
|
Quarter-End
|
|
Quarter-Start
|
|
Quarter-End
|
|
|
Price of
|
|
|
Price of
|
|
|
Closing Price of
|
|
|
Date
|
|
Date
|
|
|
EMC Corporation
|
|
|
EMC Corporation
|
|
|
EMC Corporation
|
|
|
|
|
01/01/2005
|
|
|
03/31/2005
|
|
|
|
14.73
|
|
|
|
11.98
|
|
|
|
12.32
|
|
|
04/01/2005
|
|
|
06/30/2005
|
|
|
|
14.79
|
|
|
|
11.47
|
|
|
|
13.71
|
|
|
07/01/2005
|
|
|
09/30/2005
|
|
|
|
14.73
|
|
|
|
12.38
|
|
|
|
12.94
|
|
|
10/01/2005
|
|
|
12/31/2005
|
|
|
|
14.30
|
|
|
|
12.84
|
|
|
|
13.62
|
|
|
01/01/2006
|
|
|
03/31/2006
|
|
|
|
14.58
|
|
|
|
13.17
|
|
|
|
13.63
|
|
|
04/01/2006
|
|
|
06/30/2006
|
|
|
|
13.87
|
|
|
|
10.97
|
|
|
|
10.97
|
|
|
07/01/2006
|
|
|
09/30/2006
|
|
|
|
11.98
|
|
|
|
9.65
|
|
|
|
11.98
|
|
|
10/01/2006
|
|
|
12/31/2006
|
|
|
|
13.58
|
|
|
|
11.86
|
|
|
|
13.20
|
|
|
01/01/2007
|
|
|
03/31/2007
|
|
|
|
14.79
|
|
|
|
12.93
|
|
|
|
13.85
|
|
|
04/01/2007
|
|
|
06/30/2007
|
|
|
|
18.10
|
|
|
|
14.09
|
|
|
|
18.10
|
|
|
07/01/2007
|
|
|
09/30/2007
|
|
|
|
20.91
|
|
|
|
17.72
|
|
|
|
20.80
|
|
|
10/01/2007
|
|
|
12/31/2007
|
|
|
|
25.39
|
|
|
|
17.37
|
|
|
|
18.53
|
|
|
01/01/2008
|
|
|
03/31/2008
|
|
|
|
18.02
|
|
|
|
14.24
|
|
|
|
14.34
|
|
|
04/01/2008
|
|
|
04/07/2008
|
|
|
|
14.98
|
|
|
|
14.84
|
|
|
|
14.90
|
|
P-29
Quarterly
High Closing Price, Low Closing Price and Quarter-End Closing
Price of General Cable Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Closing
|
|
|
Low Closing
|
|
|
Quarter-End
|
|
|
|
|
|
|
|
Price of
|
|
|
Price of
|
|
|
Closing Price of
|
|
|
|
|
Quarter-End
|
|
|
General Cable
|
|
|
General Cable
|
|
|
General Cable
|
|
|
Quarter-Start Date
|
|
Date
|
|
|
Corporation
|
|
|
Corporation
|
|
|
Corporation
|
|
|
|
|
01/01/2005
|
|
|
03/31/2005
|
|
|
|
13.39
|
|
|
|
11.14
|
|
|
|
12.07
|
|
|
04/01/2005
|
|
|
06/30/2005
|
|
|
|
15.00
|
|
|
|
11.51
|
|
|
|
14.83
|
|
|
07/01/2005
|
|
|
09/30/2005
|
|
|
|
17.05
|
|
|
|
14.35
|
|
|
|
16.80
|
|
|
10/01/2005
|
|
|
12/31/2005
|
|
|
|
20.66
|
|
|
|
14.98
|
|
|
|
19.70
|
|
|
01/01/2006
|
|
|
03/31/2006
|
|
|
|
30.33
|
|
|
|
19.90
|
|
|
|
30.33
|
|
|
04/01/2006
|
|
|
06/30/2006
|
|
|
|
37.28
|
|
|
|
26.57
|
|
|
|
35.00
|
|
|
07/01/2006
|
|
|
09/30/2006
|
|
|
|
39.10
|
|
|
|
29.38
|
|
|
|
38.21
|
|
|
10/01/2006
|
|
|
12/31/2006
|
|
|
|
45.10
|
|
|
|
37.41
|
|
|
|
43.71
|
|
|
01/01/2007
|
|
|
03/31/2007
|
|
|
|
55.48
|
|
|
|
42.36
|
|
|
|
53.43
|
|
|
04/01/2007
|
|
|
06/30/2007
|
|
|
|
78.35
|
|
|
|
52.57
|
|
|
|
75.75
|
|
|
07/01/2007
|
|
|
09/30/2007
|
|
|
|
83.90
|
|
|
|
50.65
|
|
|
|
67.12
|
|
|
10/01/2007
|
|
|
12/31/2007
|
|
|
|
82.61
|
|
|
|
64.64
|
|
|
|
73.28
|
|
|
01/01/2008
|
|
|
03/31/2008
|
|
|
|
72.04
|
|
|
|
51.29
|
|
|
|
59.07
|
|
|
04/01/2008
|
|
|
04/07/2008
|
|
|
|
65.80
|
|
|
|
62.09
|
|
|
|
65.71
|
|
Quarterly
High Closing Price, Low Closing Price and Quarter-End Closing
Price of
JPMorgan Chase & Co.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Closing
|
|
|
Low Closing
|
|
|
Quarter-End
|
|
|
|
|
Quarter-End
|
|
|
Price of
|
|
|
Price of
|
|
|
Closing Price of
|
|
|
Quarter-Start Date
|
|
Date
|
|
|
JPMorgan Chase & Co.
|
|
|
JPMorgan Chase & Co.
|
|
|
JPMorgan Chase & Co.
|
|
|
|
|
01/01/2005
|
|
|
03/31/2005
|
|
|
|
39.15
|
|
|
|
34.58
|
|
|
|
34.60
|
|
|
04/01/2005
|
|
|
06/30/2005
|
|
|
|
36.26
|
|
|
|
33.77
|
|
|
|
35.32
|
|
|
07/01/2005
|
|
|
09/30/2005
|
|
|
|
35.86
|
|
|
|
33.58
|
|
|
|
33.93
|
|
|
10/01/2005
|
|
|
12/31/2005
|
|
|
|
40.20
|
|
|
|
33.27
|
|
|
|
39.69
|
|
|
01/01/2006
|
|
|
03/31/2006
|
|
|
|
42.11
|
|
|
|
38.05
|
|
|
|
41.64
|
|
|
04/01/2006
|
|
|
06/30/2006
|
|
|
|
46.65
|
|
|
|
39.95
|
|
|
|
42.00
|
|
|
07/01/2006
|
|
|
09/30/2006
|
|
|
|
47.22
|
|
|
|
40.71
|
|
|
|
46.96
|
|
|
10/01/2006
|
|
|
12/31/2006
|
|
|
|
48.95
|
|
|
|
46.01
|
|
|
|
48.30
|
|
|
01/01/2007
|
|
|
03/31/2007
|
|
|
|
51.65
|
|
|
|
46.70
|
|
|
|
48.38
|
|
|
04/01/2007
|
|
|
06/30/2007
|
|
|
|
53.20
|
|
|
|
48.24
|
|
|
|
48.45
|
|
|
07/01/2007
|
|
|
09/30/2007
|
|
|
|
50.05
|
|
|
|
43.00
|
|
|
|
45.82
|
|
|
10/01/2007
|
|
|
12/31/2007
|
|
|
|
47.58
|
|
|
|
40.46
|
|
|
|
43.65
|
|
|
01/01/2008
|
|
|
03/31/2008
|
|
|
|
48.25
|
|
|
|
36.48
|
|
|
|
42.95
|
|
|
04/01/2008
|
|
|
04/07/2008
|
|
|
|
47.00
|
|
|
|
45.54
|
|
|
|
45.54
|
|
P-30
Quarterly
High Closing Price, Low Closing Price and Quarter-End Closing
Price of
Marathon Oil Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter-End
|
|
|
|
|
|
|
|
High Closing Price
|
|
|
Low Closing Price
|
|
|
Closing Price of
|
|
|
|
|
Quarter-End
|
|
|
Price of Marathon Oil
|
|
|
Price of Marathon Oil
|
|
|
Marathon Oil
|
|
|
Quarter-Start Date
|
|
Date
|
|
|
Corporation
|
|
|
Corporation
|
|
|
Corporation
|
|
|
|
|
01/01/2005
|
|
|
03/31/2005
|
|
|
|
24.38
|
|
|
|
17.87
|
|
|
|
23.46
|
|
|
04/01/2005
|
|
|
06/30/2005
|
|
|
|
27.79
|
|
|
|
22.00
|
|
|
|
26.69
|
|
|
07/01/2005
|
|
|
09/30/2005
|
|
|
|
35.42
|
|
|
|
27.35
|
|
|
|
34.47
|
|
|
10/01/2005
|
|
|
12/31/2005
|
|
|
|
34.61
|
|
|
|
28.14
|
|
|
|
30.49
|
|
|
01/01/2006
|
|
|
03/31/2006
|
|
|
|
39.08
|
|
|
|
32.62
|
|
|
|
38.09
|
|
|
04/01/2006
|
|
|
06/30/2006
|
|
|
|
43.02
|
|
|
|
34.92
|
|
|
|
41.65
|
|
|
07/01/2006
|
|
|
09/30/2006
|
|
|
|
46.10
|
|
|
|
35.37
|
|
|
|
38.45
|
|
|
10/01/2006
|
|
|
12/31/2006
|
|
|
|
48.79
|
|
|
|
35.97
|
|
|
|
46.25
|
|
|
01/01/2007
|
|
|
03/31/2007
|
|
|
|
51.28
|
|
|
|
41.72
|
|
|
|
49.42
|
|
|
04/01/2007
|
|
|
06/30/2007
|
|
|
|
66.26
|
|
|
|
49.89
|
|
|
|
59.96
|
|
|
07/01/2007
|
|
|
09/30/2007
|
|
|
|
65.04
|
|
|
|
49.24
|
|
|
|
57.02
|
|
|
10/01/2007
|
|
|
12/31/2007
|
|
|
|
62.59
|
|
|
|
53.34
|
|
|
|
60.86
|
|
|
01/01/2008
|
|
|
03/31/2008
|
|
|
|
61.88
|
|
|
|
45.23
|
|
|
|
45.60
|
|
|
04/01/2008
|
|
|
04/07/2008
|
|
|
|
48.80
|
|
|
|
46.41
|
|
|
|
48.58
|
|
Quarterly
High Closing Price, Low Closing Price and Quarter-End Closing
Price of
Schering-Plough Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Closing
|
|
|
Low Closing
|
|
|
Quarter-End
|
|
|
|
|
|
|
|
Price of
|
|
|
Price of
|
|
|
Closing Price of
|
|
|
|
|
Quarter-End
|
|
|
Schering-Plough
|
|
|
Schering-Plough
|
|
|
Schering-Plough
|
|
|
Quarter-Start Date
|
|
Date
|
|
|
Corporation
|
|
|
Corporation
|
|
|
Corporation
|
|
|
|
|
01/01/2005
|
|
|
03/31/2005
|
|
|
|
21.41
|
|
|
|
17.68
|
|
|
|
18.15
|
|
|
04/01/2005
|
|
|
06/30/2005
|
|
|
|
20.94
|
|
|
|
17.89
|
|
|
|
19.06
|
|
|
07/01/2005
|
|
|
09/30/2005
|
|
|
|
22.45
|
|
|
|
18.48
|
|
|
|
21.05
|
|
|
10/01/2005
|
|
|
12/31/2005
|
|
|
|
21.76
|
|
|
|
19.05
|
|
|
|
20.85
|
|
|
01/01/2006
|
|
|
03/31/2006
|
|
|
|
20.93
|
|
|
|
18.00
|
|
|
|
18.99
|
|
|
04/01/2006
|
|
|
06/30/2006
|
|
|
|
20.00
|
|
|
|
18.25
|
|
|
|
19.03
|
|
|
07/01/2006
|
|
|
09/30/2006
|
|
|
|
22.09
|
|
|
|
18.60
|
|
|
|
22.09
|
|
|
10/01/2006
|
|
|
12/31/2006
|
|
|
|
23.90
|
|
|
|
21.25
|
|
|
|
23.64
|
|
|
01/01/2007
|
|
|
03/31/2007
|
|
|
|
25.51
|
|
|
|
22.75
|
|
|
|
25.51
|
|
|
04/01/2007
|
|
|
06/30/2007
|
|
|
|
33.34
|
|
|
|
25.42
|
|
|
|
30.44
|
|
|
07/01/2007
|
|
|
09/30/2007
|
|
|
|
32.83
|
|
|
|
27.26
|
|
|
|
31.63
|
|
|
10/01/2007
|
|
|
12/31/2007
|
|
|
|
32.94
|
|
|
|
26.20
|
|
|
|
26.64
|
|
|
01/01/2008
|
|
|
03/31/2008
|
|
|
|
27.73
|
|
|
|
14.41
|
|
|
|
14.41
|
|
|
04/01/2008
|
|
|
04/07/2008
|
|
|
|
16.76
|
|
|
|
13.86
|
|
|
|
16.76
|
|
P-31
Quarterly
High Closing Price, Low Closing Price and Quarter-End Closing
Price of Target Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Closing
|
|
|
Low Closing
|
|
|
Quarter-End
|
|
|
|
|
Quarter-End
|
|
|
Price of
|
|
|
Price of
|
|
|
Closing Price of
|
|
|
Quarter-Start Date
|
|
Date
|
|
|
Target Corporation
|
|
|
Target Corporation
|
|
|
Target Corporation
|
|
|
|
|
01/01/2005
|
|
|
03/31/2005
|
|
|
|
52.50
|
|
|
|
48.50
|
|
|
|
50.02
|
|
|
04/01/2005
|
|
|
06/30/2005
|
|
|
|
55.93
|
|
|
|
46.28
|
|
|
|
54.41
|
|
|
07/01/2005
|
|
|
09/30/2005
|
|
|
|
59.98
|
|
|
|
50.84
|
|
|
|
51.93
|
|
|
10/01/2005
|
|
|
12/31/2005
|
|
|
|
58.85
|
|
|
|
51.24
|
|
|
|
54.97
|
|
|
01/01/2006
|
|
|
03/31/2006
|
|
|
|
55.80
|
|
|
|
52.01
|
|
|
|
52.01
|
|
|
04/01/2006
|
|
|
06/30/2006
|
|
|
|
54.71
|
|
|
|
47.60
|
|
|
|
48.87
|
|
|
07/01/2006
|
|
|
09/30/2006
|
|
|
|
56.24
|
|
|
|
45.28
|
|
|
|
55.25
|
|
|
10/01/2006
|
|
|
12/31/2006
|
|
|
|
59.75
|
|
|
|
55.82
|
|
|
|
57.05
|
|
|
01/01/2007
|
|
|
03/31/2007
|
|
|
|
64.32
|
|
|
|
57.18
|
|
|
|
59.26
|
|
|
04/01/2007
|
|
|
06/30/2007
|
|
|
|
64.40
|
|
|
|
57.31
|
|
|
|
63.60
|
|
|
07/01/2007
|
|
|
09/30/2007
|
|
|
|
70.14
|
|
|
|
58.11
|
|
|
|
63.57
|
|
|
10/01/2007
|
|
|
12/31/2007
|
|
|
|
67.57
|
|
|
|
50.00
|
|
|
|
50.00
|
|
|
01/01/2008
|
|
|
03/31/2008
|
|
|
|
57.05
|
|
|
|
48.08
|
|
|
|
50.68
|
|
|
04/01/2008
|
|
|
04/07/2008
|
|
|
|
53.45
|
|
|
|
52.67
|
|
|
|
52.77
|
|
Quarterly
High Closing Price, Low Closing Price and Quarter-End Closing
Price of Terex Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Closing Price
|
|
|
Low Closing
|
|
|
Quarter-End
|
|
|
|
|
Quarter-End
|
|
|
Price of
|
|
|
Price of
|
|
|
Closing Price of
|
|
|
Quarter-Start Date
|
|
Date
|
|
|
Terex Corporation
|
|
|
Terex Corporation
|
|
|
Terex Corporation
|
|
|
|
|
01/01/2005
|
|
|
03/31/2005
|
|
|
|
24.34
|
|
|
|
19.92
|
|
|
|
21.65
|
|
|
04/01/2005
|
|
|
06/30/2005
|
|
|
|
21.73
|
|
|
|
18.16
|
|
|
|
19.70
|
|
|
07/01/2005
|
|
|
09/30/2005
|
|
|
|
25.98
|
|
|
|
19.90
|
|
|
|
24.72
|
|
|
10/01/2005
|
|
|
12/31/2005
|
|
|
|
31.17
|
|
|
|
24.92
|
|
|
|
29.70
|
|
|
01/01/2006
|
|
|
03/31/2006
|
|
|
|
40.51
|
|
|
|
30.42
|
|
|
|
39.62
|
|
|
04/01/2006
|
|
|
06/30/2006
|
|
|
|
50.91
|
|
|
|
39.47
|
|
|
|
49.35
|
|
|
07/01/2006
|
|
|
09/30/2006
|
|
|
|
50.30
|
|
|
|
38.72
|
|
|
|
45.22
|
|
|
10/01/2006
|
|
|
12/31/2006
|
|
|
|
66.29
|
|
|
|
46.50
|
|
|
|
64.58
|
|
|
01/01/2007
|
|
|
03/31/2007
|
|
|
|
72.20
|
|
|
|
56.61
|
|
|
|
71.76
|
|
|
04/01/2007
|
|
|
06/30/2007
|
|
|
|
86.14
|
|
|
|
71.84
|
|
|
|
81.30
|
|
|
07/01/2007
|
|
|
09/30/2007
|
|
|
|
94.13
|
|
|
|
69.00
|
|
|
|
89.02
|
|
|
10/01/2007
|
|
|
12/31/2007
|
|
|
|
90.04
|
|
|
|
56.57
|
|
|
|
65.57
|
|
|
01/01/2008
|
|
|
03/31/2008
|
|
|
|
70.88
|
|
|
|
49.19
|
|
|
|
62.50
|
|
|
04/01/2008
|
|
|
04/07/2008
|
|
|
|
68.42
|
|
|
|
66.16
|
|
|
|
67.67
|
|
P-32
TAXATION
IN THE UNITED STATES
The following discussion supplements and should be read together
with the discussion in the prospectus supplement and the
prospectus under “Taxation in the United States” and
is subject to the limitations and exceptions set forth therein.
The following discussion represents the opinion of
Allen & Overy LLP and does not address all
U.S. Federal income tax matters that may be relevant to a
particular prospective holder.
Prospective holders should
consult their own tax advisers as to the consequences of
acquiring, holding and disposing of securities under the tax
laws of the country of which they are resident for tax purposes
as well of under the laws of any state, local or foreign
jurisdiction.
Taxation of Securities.
There is currently no
statutory, judicial or administrative authority that directly
addresses the U.S. tax treatment of holders of the
securities or similar instruments and the characterization of
the securities for U.S. Federal income tax purposes is not
certain. No ruling is being requested from the IRS with respect
to the securities and, accordingly, no assurance can be given
that the IRS will agree with, and a court will ultimately
uphold, the conclusions expressed herein. We intend to take the
position that the securities will be treated for
U.S. Federal income tax purposes as income-bearing
financial contracts under which you will be required to include
the income payable on the securities in gross income as ordinary
income under your regular method of accounting and, by
purchasing a security, you will be deemed to have agreed to that
treatment. The remainder of this discussion assumes that the
securities will be so treated.
Sale, Exchange, Redemption or Other Disposition of the
Securities.
Generally, your initial tax basis in
the securities will be the price at which you purchased the
securities. Upon the sale, exchange, redemption or other taxable
disposition of the securities, you will generally recognize gain
or loss equal to the difference between the proceeds received
upon disposition (other than amounts attributable to accrued but
unpaid income on the securities, which will be taxable as
ordinary income as described above) and your adjusted tax basis
in the securities. The gain or loss generally will be capital
gain or loss, and should be long-term capital gain or loss if
you held the securities for more than one year at the time of
disposition. The deductibility of capital losses is subject to
limitations.
Possible Alternative
Treatment.
Notwithstanding our mutual contractual
obligation to treat the securities in accordance with the above
characterization, there can be no assurance that the IRS will
accept, or that a court will uphold, this characterization. The
documentation of the securities as debt suggests that the IRS
might seek to apply to the securities the Treasury regulations
governing contingent payment debt instruments (the
Contingent
Payment Regulations
). If the IRS were successful in doing
this, then, among other matters, you would be required to accrue
original issue discount on the securities at a yield comparable
to the yield at which we would issue similar noncontingent
bonds, determined at the time of issuance of the securities
(plus ordinary income in the form of positive adjustments to
reflect the payment of income in excess of such comparable
yield); and, on the sale, exchange, maturity, redemption or
other taxable disposition of the securities, you would recognize
ordinary income, or ordinary loss to the extent of your
aggregate prior ordinary income inclusions and capital loss
thereunder, rather than capital gain or loss.
Possible new administrative guidance
and/or
legislation.
On December 7, 2007, the IRS
released a notice stating that it and Treasury are actively
considering the proper federal income tax treatment of an
instrument such as the securities, including whether the holders
should be required to accrue ordinary income on a current basis
and whether gain or loss should be ordinary or capital, and they
are seeking comments on the subject. It is not possible to
determine what guidance they will ultimately issue, if any and
whether any such guidance would be applied on a retroactive
basis. Treasury regulations or other forms of guidance, if any,
issued after consideration of these issues could materially and
adversely affect the tax consequences of your investment,
possibly retroactively.
Since you will receive coupon payments on the securities on a
current basis and by acquiring the securities you agree to treat
the income payable on the securities as ordinary income for
U.S. Federal income tax purposes in accordance with your
regular method of accounting, if any regulations are ultimately
adopted pursuant to the Notice with respect to pre-paid forward
contracts and similar instruments, it is unclear whether such
regulations would apply to the securities and, if so, whether
such regulations would otherwise alter the
P-33
tax treatment of the securities (e.g., requiring accrual of some
other amount as ordinary income
and/or
requiring any gain or loss to be characterized as ordinary
rather than capital).
The IRS and Treasury are also considering other relevant issues,
including whether foreign holders of such instruments should be
subject to withholding tax on any deemed income accruals, and
whether the special “constructive ownership rules” of
Section 1260 of the Internal Revenue Code might be applied
to such instruments. Holders are urged to consult their tax
advisors concerning the significance, and the potential impact,
of the above considerations. Except to the extent otherwise
provided by law, we intend to treat the securities for
U.S. federal income tax purposes in accordance with the
treatment set forth in this section unless and until such time
as the Treasury and IRS issue guidance providing that some other
treatment is more appropriate.
Prospective purchasers of the securities should review the
“Taxation in the United States” section in the
prospectus supplement and the prospectus for a further
discussion of the U.S. Federal income tax considerations
and consult their tax advisers as to the consequences of
acquiring, holding and disposing of the securities under the tax
laws of the country of which they are resident for tax purposes
as well as under the laws of any state, local or foreign
jurisdiction.
USE OF
PROCEEDS AND HEDGING
The net proceeds from the sale of the securities will be used as
described under “Use of Proceeds” in the accompanying
prospectus and to hedge market risks of Eksportfinans associated
with its obligation to pay the aggregate redemption amount at
the maturity of the securities.
The hedging activity discussed above may adversely affect the
market value of the securities from time to time and the
aggregate redemption amount you will receive on the securities
at maturity. See “Risk Factors — Purchases and
sales by us or our affiliates may affect the return on the
securities” and “Risk Factors — Potential
conflicts of interest could arise” for a discussion of
these adverse effects.
SUPPLEMENTAL
PLAN OF DISTRIBUTION
The securities are being purchased by Wachovia Capital Markets,
LLC (the
agent
) as principal, pursuant to a terms
agreement dated as of April 7, 2008 between the agent and
us. The agent has agreed to pay our out-of-pocket expenses of
the issue of the securities.
From time to time, the agent and its affiliates have engaged,
and in the future may engage, in transactions with and
performance of services for us for which they have been, and may
be, paid customary fees. In particular, an affiliate of the
agent is our swap counterparty for a hedge of our obligation
under the securities.
In the future, the agent and its affiliates may repurchase and
resell the offered securities in market-making transactions,
with resales being made at prices related to prevailing market
prices at the time of resale or at negotiated prices.
The agent named below has committed to purchase all of those
securities if any are purchased. Under certain circumstances,
the commitments of non-defaulting underwriters may be increased.
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
Underwriter
|
|
Principal Amount
|
|
|
|
|
Wachovia Capital Markets, LLC
|
|
$
|
2,036,500.00
|
|
|
Total
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$
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2,036,500.00
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The agent named above proposes to offer the securities in part
directly to the public at the initial maximum offering price set
forth on the cover page of this pricing supplement and in part
to Wachovia Securities, LLC, Wachovia Securities Financial
Network, LLC or certain securities dealers at such prices less a
selling concession not to exceed $0.125 per security.
P-34
Proceeds to be received by Eksportfinans in this offering will
be net of the underwriting discount, commission and expenses
payable by Eksportfinans.
After the securities are released for sale in the public, the
offering prices and other selling terms may from time to time be
varied by the agent.
The securities are new issues of securities with no established
trading markets. We have been advised by the agent that the
agent intends to make a market in the securities but is not
obligated to do so and may discontinue market making at any time
without notice. No assurance can be given as to the liquidity of
the trading market for the securities.
Settlement for the securities will be made in immediately
available funds. The securities will be in the Same Day Funds
Settlement System at DTC and, to the extent the secondary market
trading in the securities is effected through the facilities of
such depositary, such trades will be settled in immediately
available funds.
Eksportfinans has agreed to indemnify the agent against certain
liabilities, including liabilities under the Securities Act of
1933.
This pricing supplement and the attached prospectus and
prospectus supplement may be used by Wachovia Capital Markets,
LLC or an affiliate of Wachovia Capital Markets, LLC, in
connection with offers and sales related to market-making or
other transactions in the securities. Wachovia Capital Markets,
LLC or an affiliate of Wachovia Capital Markets, LLC, may act as
principal or agent in such transactions. Such sales will be made
at prices related to prevailing market prices at the time of
sale or otherwise.
From time to time the agent engages in transactions with
Eksportfinans in the ordinary course of business. The agent has
performed investment banking services for Eksportfinans in the
last two years and has received fees for these services.
Wachovia Capital Markets, LLC, as agent, may engage in
over-allotment, stabilizing transactions, syndicate covering
transactions and penalty bids in accordance with
Regulation M under the Securities Exchange Act of 1934.
Over-allotment involves syndicate sales in excess of the
offering size, which creates a syndicate short position.
Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a
specified maximum. Syndicate covering transactions involve
purchases of the securities in the open market after the
distribution has been completed in order to cover syndicate
short positions. Penalty bids permit reclaiming a selling
concession from a syndicate member when the securities
originally sold by such syndicate member are purchased in a
syndicate covering transaction to cover syndicate short
positions. Such stabilizing transactions, syndicate covering
transactions and penalty bids may cause the price of the
securities to be higher than it would otherwise be in the
absence of such transactions.
No action has been or will be taken by Eksportfinans, the agent
or any broker-dealer affiliates of either Eksportfinans or the
agent that would permit a public offering of the securities or
possession or distribution of this pricing supplement or the
accompanying prospectus in any jurisdiction, other than the
United States, where action for that purpose is required. No
offers, sales or deliveries of the securities, or distribution
of this pricing supplement or the accompanying prospectus
supplement and prospectus, may be made in or from any
jurisdiction except in circumstances which will result in
compliance with any applicable laws and regulations and will not
impose any obligations on Eksportfinans, the underwriters or any
broker-dealer affiliates of either Eksportfinans or the agent.
In respect of specific jurisdictions, please note the following:
The securities, and the offer to sell such securities, do not
constitute a public offering in Argentina. Consequently, no
public offering approval has been requested or granted by the
Comisión Nacional de Valores, nor has any listing
authorization of the securities been requested on any stock
market in Argentina.
P-35
The securities will not be offered or sold to any persons who
are residents of the Bahamas within the meaning of the Exchange
Control Regulations of 1956 issued by the Central Bank of the
Bahamas.
The securities may not be offered or sold to the public in
Brazil. Accordingly, the securities have not been submitted to
the Comissão de Valores Mobiliários for approval.
Documents relating to this offering may not be supplied to the
public as a public offering in Brazil or be used in connection
with any offer for subscription or sale to the public in Brazil.
Neither the securities nor Eksportfinans are registered in the
Securities Registry of the Superintendency of Securities and
Insurance in Chile.
The securities have not been registered with the National
Registry of Securities maintained by the Mexican National
Banking and Securities Commission and may not be offered or sold
publicly in Mexico. This pricing supplement and the accompanying
prospectus supplement and prospectus may not be publicly
distributed in Mexico.
P-36
PROSPECTUS SUPPLEMENT
(To Prospectus dated February 5, 2007)
EKSPORTFINANS ASA
(a Norwegian company)
Medium-Term Notes
We may use this prospectus supplement to offer the notes from
time to time.
The following terms may apply to the notes. The final terms of
each note will be described in a pricing supplement.
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They will rank equally in right of payment to all of our other
existing and future unsecured and unsubordinated debt unless the
applicable pricing supplement or product supplement states
otherwise.
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They will mature nine months or more after their date of issue
unless the applicable pricing supplement or product supplement
states otherwise.
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They will not be redeemable by us or repayable at the option of
the holder unless the applicable pricing supplement or product
supplement states otherwise.
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They may be denominated in U.S. dollars or in a foreign
currency or composite currency.
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They may bear interest at a fixed or floating interest rate, may
be issued at a discount and may be zero coupon notes that do not
bear interest. Floating interest rates may be based on any of
the following formulas:
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— commercial
paper rate
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— CD rate
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— LIBOR
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— CMT rate
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— EURIBOR
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— CMS rate
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— prime
rate
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— federal funds rate
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— treasury
rate
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— another rate specified in the pricing supplement.
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They may be issued as index linked notes or asset linked notes.
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They may be issued in certificated form or book-entry form.
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Interest will be paid on notes on dates determined at the time
of issuance and specified in the applicable pricing supplement
or product supplement.
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They will be issued in minimum denominations of $1,000.00 (or
its equivalent in other currencies) and any multiple of
$1,000.00 (or its equivalent in other currencies) above
$1,000.00 unless the applicable pricing supplement or product
supplement states otherwise.
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Application has been made for notes issued pursuant to this
prospectus supplement to be admitted to trading on the
Luxembourg Stock Exchange’s regulated market and to be
listed on the Official List of the Luxembourg Stock Exchange.
Each pricing supplement with respect to notes that are to be so
listed will be delivered to the Luxembourg Stock Exchange on or
before the date of issue of those notes. We may also issue notes
which will not be listed on any securities exchange or which
will be listed on additional or other securities exchanges. We
will specify in the pricing supplement or product supplement
whether the notes will be listed on the Luxembourg Stock
Exchange or another securities exchange or will be unlisted.
Investing in the notes involves risks. See “Risk
factors” beginning on
page
S-4
of this
prospectus supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus supplement, the accompanying prospectus or any
pricing supplement or product supplement. Any representation to
the contrary is a criminal offense.
Offers to purchase the notes are being solicited from time to
time by the agents listed below. The agents are not required to
sell any specific number or dollar amount of notes but have
agreed to use their reasonable efforts to sell the notes.
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ABN AMRO Bank N.V.
Banc of America Securities Limited
Banc of America Securities LLC
Bear, Stearns & Co. Inc.
Bear, Stearns International Limited
Barclays Capital
BNP PARIBAS
Citigroup
Commerzbank Capital Markets Corp.
Credit Suisse
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Daiwa Securities SMBC Europe
Deutsche Bank
Deutsche Bank Securities
Dresdner Kleinwort
FTN Financial Securities Corp.
Goldman Sachs International
Goldman, Sachs & Co.
IXIS Securities North America Inc.
Jefferies and Company, Inc.
JPMorgan
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Lehman Brothers
Merrill Lynch & Co.
Mitsubishi UFJ Securities International plc
Mizuho International plc
Morgan Stanley
Nomura International plc
Nomura Securities International, Inc.
Nordea
The Toronto-Dominion Bank
UBS Investment Bank
Wachovia Securities
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The date of this prospectus supplement is February 5, 2007.
CONTENTS
Prospectus Supplement
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Page
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iii
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S-1
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S-4
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S-9
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S-33
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S-35
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S-35
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S-35
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S-36
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S-42
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S-43
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S-46
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Prospectus
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1
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1
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2
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3
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5
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6
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14
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23
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24
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24
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No person is authorized to give any information or represent
anything not contained in this prospectus supplement, the
accompanying prospectus and any pricing supplement or product
supplement. We are only offering the securities in places where
offers and sales of those securities are permitted. The
information contained in this prospectus and any accompanying
prospectus supplement, as well as information incorporated by
reference, is current only as of the date of that information.
Our business, financial condition, results of operations and
prospects may have changed since that date.
This prospectus supplement and the accompanying prospectus
include particulars given in compliance with the rules governing
the listing of securities on the Luxembourg Stock Exchange. The
Luxembourg Stock Exchange takes no responsibility for the
contents of this document, makes no representation as to its
accuracy or completeness, and expressly disclaims any liability
whatsoever for any loss howsoever arising from or in reliance
upon the whole or any part of the contents of this prospectus
supplement and the prospectus. We accept full responsibility for
the accuracy of the information contained in this prospectus
supplement and the accompanying prospectus and, having made all
reasonable inquiries, confirm that to the best of our knowledge
and belief there are no other facts the omission of which would
make any statement contained in this prospectus supplement and
the accompanying prospectus misleading.
In this prospectus, “Eksportfinans”, the
“Company”, “we”, “us” and
“our” refer to Eksportfinans ASA or Eksportfinans and
its subsidiary Kommunekreditt Norge AS, as the context requires,
and “Kommunekreditt” refers to Kommunekreditt
Norge AS.
ii
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement contains the terms of the offering of
the securities. Certain additional information about us is
contained in the accompanying prospectus and may be contained in
any applicable pricing supplement or product supplement. This
prospectus supplement, or the information incorporated by
reference in this prospectus supplement or in the accompanying
prospectus or in any applicable pricing supplement or product
supplement, may add or update information in the accompanying
prospectus.
Terms used in this prospectus supplement or in any applicable
pricing supplement or product supplement that are otherwise not
defined will have the meanings given to them in the accompanying
prospectus or in the indenture (as defined in “Description
of the debt securities” on
p.
S-9
of this
prospectus supplement).
It is important for you to read and consider all information
contained or incorporated by reference in this prospectus
supplement, the accompanying prospectus and the applicable
pricing supplement or product supplement in making your
investment decision. You should also read and consider the
information in the documents we have referred you to in
“Where you can find more information about us” on
page 2 of the accompanying prospectus.
iii
SUMMARY
This summary highlights information contained elsewhere in
this prospectus supplement and in the prospectus. It does not
contain all the information that you should consider before
investing in the notes. You should carefully read the pricing
supplement and any applicable product supplement relating to the
terms and conditions of a particular issue of notes along with
this entire prospectus supplement and the prospectus, including
information incorporated by reference.
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Issuer:
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Eksportfinans ASA
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Agents:
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ABN AMRO Bank N.V., Banc of America Securities Limited, Banc of
America Securities LLC, Barclays Bank PLC, Barclays
Capital Inc., Bear, Stearns & Co. Inc., Bear,
Stearns International Limited, BNP Paribas Securities Corp.,
Citigroup Global Markets Inc., Citigroup Global Markets Limited,
Commerzbank Capital Markets Corp., Credit Suisse Securities
(Europe) Limited, Credit Suisse Securities (USA) LLC, Daiwa
Securities SMBC Europe Limited, Deutsche Bank AG, London Branch,
Deutsche Bank Securities Inc., Dresdner Bank AG London Branch,
FTN Financial Securities Corp., Goldman, Sachs & Co.,
Goldman Sachs International, IXIS Securities North America Inc.,
Jefferies and Company, Inc., J.P. Morgan Chase & Co., J.P.
Morgan Securities Ltd., Lehman Brothers Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Mitsubishi UFJ
Securities International plc, Mizuho International plc, Morgan
Stanley & Co. Incorporated, Morgan Stanley & Co.
International Limited, Nomura International plc, Nomura
Securities International, Inc., Nordea Bank Danmark A/ S, The
Toronto-Dominion Bank, UBS Limited, and Wachovia Capital
Markets, LLC
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Trustee:
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The Bank of New York
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Paying Agent:
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Citibank, N.A.
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Exchange Rate Agent (if any):
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Citibank, N.A.
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Calculation Agent (if any):
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Citibank, N.A., unless the applicable pricing supplement or
product supplement states otherwise
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Specified Currencies:
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Including, but not limited to, Australian dollars, Canadian
dollars, Danish kroner, euro, Hong Kong dollars, Japanese yen,
New Zealand dollars, Pounds sterling, Swedish kroner, Swiss
francs and U.S. dollars or any other currency specified in
the applicable pricing supplement or product supplement.
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Issue Price:
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The notes may be issued at par, or at a premium over, or at a
discount to, par and either on a fully paid or partly paid basis.
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Maturities:
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Unless otherwise specified in the applicable pricing supplement
or product supplement, the notes will mature at least nine
months from their date of issue.
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Fixed Rate Notes:
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Fixed rate notes will bear interest at a fixed rate.
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Floating Rate Notes:
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Floating rate notes will bear interest at a rate determined
periodically by reference to one or more interest rate bases
plus a spread or multiplied by a spread multiplier.
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Index Linked Notes:
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Payments on index linked notes or asset linked notes will be
calculated by reference to a specific measure or index.
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S-1
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Discount Notes:
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Discount notes are notes that are offered or sold at a price
less than their principal amount and called discount notes in
the applicable pricing supplement or product supplement. They
may or may not bear interest.
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Redemption and Repayment:
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If the notes are redeemable at our option debt (other than on
the occurrence of the tax events described under
“Description of debt securities — Tax
redemption” in the accompanying prospectus) or repayable at
the option of the holder before maturity, the pricing supplement
or product supplement will specify:
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• the initial redemption date on or after which we may
redeem the notes or the repayment date or dates on which the
holders may elect repayment of the notes,
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• the redemption or repayment price, and
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• the required prior notice to the holders.
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Status:
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The notes will constitute direct, unconditional and unsecured
indebtedness and will rank equal in right of payment among
themselves and, unless subordinated, with all of our existing
and future unsecured and unsubordinated indebtedness.
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Taxes:
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Subject to certain exceptions, we will make all payments on the
notes without withholding or deducting any taxes imposed by
Norway. For further information, see the section in the
prospectus entitled “Description of debt
securities — Payments of additional amounts”.
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Further Issuances:
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We may from time to time, without the consent of existing
holders, create and issue notes having the same terms and
conditions as any other outstanding notes offered pursuant to a
pricing supplement or product supplement in all respects, except
for the issue date, initial offering price and, if applicable,
the first payment of interest thereon. Additional notes issued
in this manner will be consolidated with, and will form a single
series with, any such other outstanding notes.
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Listing:
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Application has been made for notes issued during the period of
twelve months from the date of this prospectus supplement to be
listed on the Luxembourg Stock Exchange. We may also issue notes
which will not be listed on any securities exchange or which
will be listed on additional or other securities exchanges. We
will specify in the pricing supplement or product supplement
whether the notes will be listed on the Luxembourg Stock
Exchange or another securities exchange or will be unlisted. We
are under no obligation to list any issued notes and may in fact
not do so.
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Stabilization:
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In connection with issues made under this program, a stabilizing
manager or any person acting for the stabilizing manager may
over-allot or effect transactions with a view to supporting the
market price of notes issued under this program at a level
higher than that which might otherwise prevail for a limited
period after the issue date. However, there may be no obligation
of the stabilizing manager or any agent of the stabilizing
manager to do this. Any such stabilizing, if commenced, may be
discontinued at any time, and must be brought to an end after a
limited period. Such stabilizing shall be in compliance with all
applicable laws, regulations and rules.
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Governing Law:
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The debt securities and the indenture will be governed by, and
construed in accordance with, the laws of the State of New York,
except that matters
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S-2
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relating to the authorization and execution by us of the
indenture and the debt securities issued under the indenture
will be governed by the laws of Norway. There are no limitations
under the laws of Norway or our Articles of Association on the
right of non-residents of Norway to hold the debt securities
issued.
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Purchase Currency:
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You must pay for notes by wire transfer in the specified
currency. You may ask an agent to arrange for, at its
discretion, the conversion of U.S. dollars or another
currency into the specified currency to enable you to pay for
the notes. You must make this request on or before the fifth
Business Day preceding the issue date, or by a later date if the
agent allows. The agent will set the terms for each conversion
and you will be responsible for all currency exchange costs.
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RATIOS OF EARNINGS TO FIXED CHARGES
The following table shows our unaudited historical ratios of
earnings to fixed charges for the periods indicated, computed in
accordance with Norwegian GAAP and U.S. GAAP.
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Year Ended December 31,
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Nine Months Ended
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Six Months Ended
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September 30, 2006
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June 30, 2006
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2005
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2004
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2003
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2002
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2001
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Norwegian
GAAP
(1)
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1.08
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1.08
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1.06
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1.14
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1.19
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1.14
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1.08
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U.S.
GAAP
(1)(2)
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*
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—
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—
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1.62
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—
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1.37
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1.48
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*
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Not available.
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(1)
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For purposes of the computation of these ratios of earnings to
fixed charges, earnings include net income plus taxes and fixed
charges. Fixed charges represent interest and commissions on
debt, other borrowing expenses, estimates of the interest within
rental expense and premiums or discounts on long-term debt
issued. The ratio of U.S. GAAP earnings to fixed charges is
based on U.S. GAAP income before extraordinary items.
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(2)
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Under U.S. GAAP, in 2003 fixed charges exceeded earnings by NOK
2,346 million as a result of a U.S. GAAP loss of NOK
516 million and U.S. GAAP fixed charges of NOK
1,830 million. In 2005 and at June 30, 2006, the U.S.
GAAP ratio of earnings to fixed charges had a deficiency due to
negative U.S. GAAP income before extraordinary items. The amount
of the coverage deficiency was NOK 0.1 million in 2005
and NOK 1,066 million at June 30, 2006. See
note 34 to our audited consolidated financial statements
included in our Annual Report on Form 20-F/A for the fiscal
year ended December 31, 2005 filed with the SEC
August 29, 2006, which are incorporated into the prospectus
by reference. Our U.S. GAAP losses were driven by the impact of
market movements on the fair value of derivatives, for which
hedge accounting is not applied under U.S. GAAP.
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S-3
RISK FACTORS
Your investment in the notes entails risks. This prospectus
supplement does not describe all of the risks of an investment
in the notes. You should consult your own financial and legal
advisors about the risks entailed by an investment in the notes
and the suitability of your investment in the notes in light of
your particular circumstances. The notes are not an appropriate
investment for investors who are unsophisticated with respect to
the particular type of notes we may offer including foreign
currency transactions or transactions involving the type of
index or formula used to determine the amount payable or
otherwise. You should also consider carefully, among other
factors, the matters described in the documents incorporated
herein by reference, particularly the “Risk Factors”
beginning on page 6 of our
Form
20-F/A
for
the year ended December 31, 2005, as filed with the SEC
August 29, 2006, and any other matter described in any
applicable pricing supplement or product supplement.
Our credit ratings may not reflect all risks of an investment
in the notes
The credit ratings of our medium-term note program may not
reflect the potential impact of all risks related to structure
and other factors on any trading market for, or the trading
value of, the notes. In addition, real or anticipated changes in
our credit ratings will generally affect any trading market for,
or trading value of, the notes.
Any decline in our credit ratings may affect the market value
of your notes
Our credit ratings are an assessment of our ability to pay our
obligations, including those on the offered notes. Consequently,
actual or anticipated declines in our credit ratings may affect
the market value of your notes.
Early redemption may adversely affect your return on the
notes
If the notes are redeemable at our option, we may choose to
redeem the notes at times when prevailing interest rates are
relatively low. In addition, if the notes are subject to
mandatory redemption, we may be required to redeem the notes
also at times when prevailing interest rates are relatively low.
As a result, you generally will not be able to re-invest the
redemption proceeds in a comparable security at an effective
interest rate as high as the notes being redeemed.
There may not be any trading market for the notes, many
factors affect the trading market and value of the notes
We cannot assure you a trading market for the notes will ever
develop or be maintained. Unless the applicable pricing
supplement or product supplement states otherwise, your notes
will not be listed on any securities exchange or be included in
any interdealer market quotation system. As a result, there may
be little or no secondary market for your notes. Even if a
secondary market for your notes develops, it may not provide
significant liquidity and we expect the transaction costs in any
secondary market will be high. As a result, the differences
between bid and ask prices for your notes in any secondary
market could be substantial. In addition to our own
creditworthiness, many other factors may affect the trading
market value of, and trading market for, the notes. These
factors include:
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the complexity and volatility of the index or formula applicable
to the notes,
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the method of calculating the principal, premium and interest in
respect of the notes,
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the time remaining to the maturity of the notes,
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the outstanding amount of the notes,
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any redemption features of the notes,
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the amount of other securities linked to the index or formula
applicable to the notes, and
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the level, direction and volatility of market interest rates
generally.
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S-4
In addition, notes that are designed for specific investment
objectives or strategies often experience a more limited trading
market and more price volatility. There may be a limited number
of buyers when you decide to sell your notes. This may affect
the price you receive for your notes or your ability to sell
your notes at all. You should not purchase notes unless you
understand and know you can bear all of the investment risks
related to your notes.
Judgments of U.S. courts may not be enforceable against
us
There is no treaty between the United States and Norway
providing for reciprocal recognition and enforcement of
judgments rendered in connection with civil and commercial
disputes. Judgments of U.S. courts, including those
predicated on the civil liability provisions of the federal
securities laws of the United States, may not be enforceable in
Norwegian courts. Norwegian courts may review such judgments to
confirm compliance with Norwegian public policy and mandatory
provisions of law. As a result, our security holders that obtain
a judgment against us in the United States may not be able to
require us to pay the amount of the judgment. It may, however,
be possible for a U.S. investor to bring an original action
in a Norwegian court to enforce liabilities against us, or our
affiliates, directors, officers or any expert named herein, who
reside outside the United States, based upon the
U.S. federal securities laws.
Foreign currency risks
Changes in exchange rates and exchange controls could result
in a substantial loss to you
If you measure returns in a currency other than the specified
currency of the notes you are buying, you are subject to certain
risks. For example, if you measure investment return in
U.S. dollars, an investment in notes that are denominated
in, or the payment of which is determined with reference to, a
specified currency (as defined below) other than
U.S. dollars entails significant risks that are not
associated with a similar investment in securities denominated
in U.S. dollars. Similarly, an investment in an index
linked note on which all or part of any payment due is based on
a currency other than U.S. dollars has significant risks
that are not associated with a similar investment in non-index
linked notes or index linked notes based on U.S. dollars.
These risks include, without limitation:
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the possibility of significant changes in rates of exchange
between U.S. dollars and the specified currency, and
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the possibility of the imposition or modification of foreign
exchange controls with respect to the specified currency.
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These risks generally depend on factors over which we have no
control, such as economic events, political events, and the
supply of and demand for the relevant currencies.
In recent years, rates of exchange between U.S. dollars and
certain currencies have been highly volatile, and this
volatility may continue in the future. Fluctuations in any
particular exchange rate that have occurred in the past are not
necessarily indicative, however, of fluctuations in the rate
that may occur during the term of any note. Depreciation against
the U.S. dollar of a foreign currency or foreign currency
units in which a note is denominated would result in a decrease
in the effective yield of such note below its coupon rate, and
in certain circumstances could result in a loss to the investor
on a U.S. dollar basis.
Governments have from time to time imposed, and may in the
future impose, exchange controls that could affect exchange
rates as well as the availability of a foreign currency for
making payments on a note denominated in such currency. We can
give no assurances that exchange controls will not restrict or
prohibit payments of principal, premium, if any, and interest,
if any, in any currency or currency unit. Even if there are no
actual exchange controls, it is possible that on an interest
payment date or at maturity for any particular note, the foreign
currency for such note would not be available to us to make
payments of principal, premium and interest then due. In that
event, we will make such payments in U.S. dollars. See
“The unavailability of currencies could result in a
substantial loss to you” below.
S-5
The unavailability of currencies could result in a
substantial loss to you
Except as we specify in the applicable pricing supplement or
product supplement, if payment on a note is required to be made
in a specified currency other than U.S. dollars and such
currency is either unavailable due to the imposition of exchange
controls or other circumstances beyond our control, no longer
used by the government of the country issuing such currency, or
no longer used for the settlement of transactions by public
institutions of or within the international banking community,
then all payments with respect to the note shall be made in
U.S. dollars until such currency is again available or so
used. The amount so payable on any date in such foreign currency
shall be converted into U.S. dollars at a rate determined
on the basis of the most recently available market exchange rate
or as otherwise determined in good faith by us if the foregoing
is impracticable. Any payment in respect of such note made under
such circumstances in U.S. dollars will not constitute an
event of default under the indenture.
If the official unit of any component currency is altered by way
of combination or subdivision, the number of units of that
currency as a component shall be divided or multiplied in the
same proportion. If two or more component currencies are
consolidated into a single currency, the amounts of those
currencies as components shall be replaced by an amount in such
single currency equal to the sum of the amounts of the
consolidated component currencies expressed in such single
currency. If any component currency is divided into two or more
currencies, the amount of that original component currency as a
component shall be replaced by the amounts of such two or more
currencies having an aggregate value on the date of division
equal to the amount of the former component currency immediately
before such division.
The notes will not provide for any adjustment to any amount
payable as a result of any change in the value of the specified
currency of those notes relative to any other currency due
solely to fluctuations in exchange rates, or any redenomination
of any component currency of any composite currency, unless that
composite currency is itself officially redenominated.
Currently, there are limited facilities in the United States for
conversion of U.S. dollars into foreign currencies, and
vice versa. In addition, banks do not generally offer
non-U.S. dollar-denominated checking or savings account
facilities in the United States. Accordingly, payments on notes
made in a currency other than U.S. dollars will be made
from an account at a bank located outside the United States,
unless otherwise specified in the applicable pricing supplement
or product supplement.
Judgments in a foreign currency could result in a substantial
loss to you
The notes will be governed by and construed in accordance with
the laws of the State of New York. Courts in the United States
customarily have not rendered judgments for money damages
denominated in any currency other than U.S. dollars. The
Judiciary Law of New York State provides, however, that a
judgment based on an obligation denominated in a currency other
than U.S. dollars will be rendered in the foreign currency
of the underlying obligation. If a note is denominated in a
specified currency other than U.S. dollars, any judgment
under New York law is required to be rendered in the foreign
currency of the underlying obligation and converted into
U.S. dollars at a rate of exchange prevailing on the date
of entry of the judgment or decree.
Risks relating to index linked notes or notes linked to
certain assets
Index linked notes or notes linked to certain assets may have
risks not associated with a conventional debt security
An investment in index linked notes or notes linked to certain
assets (including, for example, credit linked notes, equity
linked notes or commodity linked notes, each of which we refer
to as an
asset linked note
) entails significant risks
that are not associated with an investment in a conventional
fixed rate debt security. Indexation of the interest rate of a
note may result in an interest rate that is less than that
payable on a conventional fixed rate debt security issued at the
same time, including the possibility that no interest will be
paid. Indexation of the principal of and/or premium on a note
may result in an amount of principal and/or premium payable that
is less than the original purchase price of the note, including
the possibility that no amount will be paid. The secondary
market for index linked notes or asset linked notes will be
affected by a number of factors, in addition to and
S-6
independent of our creditworthiness. Such factors include the
volatility of the index or asset selected, the time remaining to
the maturity, if any, of the notes, the amount outstanding of
the notes and market interest rates. The value of an index or an
asset can depend on a number of interrelated factors, including
economic, financial and political events, over which we have no
control. Additionally, if the formula used to determine the
amount of principal, premium and interest, in each case if any,
payable with respect to index linked notes contains a multiple
or leverage factor, the effect of any change in the index will
be increased. The historical experience of an index or the
market price of an underlying asset (that is, the asset to which
an asset linked note is linked) should not be taken as an
indication of its future performance. With respect to asset
linked notes providing for physical settlement, there is a risk
that the asset may cease to be available or cease to have value.
Thus, if you purchase an index linked note or asset linked note,
you may lose all or a portion of the principal or other amount
you invest and may receive no interest on your investment.
Accordingly, you should consult your own financial and legal
advisors as to the risks entailed by an investment in index
linked notes or asset linked notes.
Changes in the value of underlying assets of index linked
notes or asset linked notes could result in a substantial loss
to you
An investment in index linked notes or asset linked notes may
have significant risks that are not associated with a similar
investment in a debt instrument that has a fixed principal
amount, is denominated in U.S. dollars, and bears interest
at either a fixed rate or a floating rate based on nationally
published interest rate references.
The risks of a particular index linked note or asset linked note
will depend on the terms of that index linked note or asset
linked note. Such risks may include, but are not limited to, the
possibility of significant changes in the prices of the
underlying assets or economic or other measures making up the
relevant index. Underlying assets could include currencies,
commodities, securities (individual or baskets), and indices.
The risks associated with a particular index linked note or
asset linked note generally depend on factors over which we have
no control and which cannot readily be foreseen. These risks
include economic events, political events, and the supply of,
and demand for, the underlying assets.
In recent years, currency exchange rates and prices for various
underlying assets have been highly volatile. Such volatility may
continue in the future. Fluctuations in rates or prices that
have occurred in the past are not necessarily indicative,
however, of fluctuations that may occur during the term of any
index linked note or asset linked note.
In considering whether to purchase index linked notes or asset
linked note, you should be aware that the calculation of amounts
payable on index linked notes may involve reference to prices
that are published solely by third parties or entities which are
not regulated by the laws of the United States.
The risk of loss as a result of linking of principal or interest
payments on index linked notes or asset linked note to an index
and to the underlying assets can be substantial and you may lose
all or a portion of the principal and other amount you invest
and may receive no interest on your investment. You should
consult your own financial and legal advisors as to the risks of
an investment in index linked notes or asset linked notes.
The issuer of a security or currency that serves as an
underlying asset or comprises part of an index may take actions
that may adversely affect an index linked note or asset linked
note
The issuer of a note that serves as an underlying asset or an
index or part of an index for an index linked note will have no
involvement in the offer and sale of the index linked note and
no obligations to the holder of the index linked note. The
issuer may take actions, such as a merger or sale of assets,
without regard to your interests. Any of these actions could
adversely affect the value of a note linked or index linked to
the security or to an index of which that security is a
component.
The index for an index linked note may include a currency, and
the value of all asset linked notes that do not have physical
settlement terms will be denominated in a currency. The
government that issues that currency will have no involvement in
the offer and sale of the index linked note and no obligations
to the holder of the index linked note or asset linked note.
That government may take actions that adversely affect the value
of such a currency, and therefore the notes.
S-7
The volatility, availability and composition of indices could
result in a substantial loss to you
Certain indices are highly volatile. The expected principal
amount payable at maturity of, or the interest rate on, a note
based on a volatile index may vary substantially from time to
time. Because the principal amount payable at the maturity of,
or interest payable on, notes linked to an index is generally
calculated based on the value of the relevant index on a
specified date or over a limited period of time, volatility in
the index increases the risk that the return on the notes may be
adversely affected by a fluctuation in the level of the relevant
index.
The volatility of any index may be affected by political or
economic events, including governmental actions, or by the
activities of participants in the relevant markets. Any of these
could adversely affect the value of or return on a note linked
to such index.
Certain indices reference several different currencies,
commodities, securities or other financial instruments. The
compiler of such an index typically reserves the right to alter
the composition of the index and the manner in which the value
of the index is calculated. Such an alteration may result in a
decrease in the value of or return on a note which is linked to
such index.
An index or underlying asset may become unavailable due to such
factors as war, natural disasters, cessation of publication of
the index, or suspension of or disruption in trading in the
currency or currencies, commodity or commodities, security or
securities or other financial instrument or instruments
comprising or underlying such index. If an index or underlying
asset becomes unavailable, the determination of principal of or
interest on a note linked to an index may be delayed or an
alternative method may be used to determine the value of the
unavailable index. Alternative methods of valuation are
generally intended to produce a value similar to the value
resulting from reference to the relevant index. However, it is
unlikely that such alternative methods of valuation will produce
values identical to those which would be produced were the
relevant index to be used. An alternative method of valuation
may result in a decrease in the value of or return on a note
linked to an index or an asset.
Notes may be linked to indices which are not commonly utilized
or have been recently developed. The lack of a trading history
may make it difficult to anticipate the volatility or other
risks to which such a note is subject. In addition, there may be
less trading in such indices or instruments underlying such
indices, which could increase the volatility of such indices and
decrease the value of or return on notes relating thereto.
S-8
DESCRIPTION OF DEBT SECURITIES
The following description supplements the description of the
general terms and provisions of the debt securities set forth in
the accompanying prospectus under the heading “Description
of debt securities”. The specific terms of the notes
offered will be included in a pricing supplement or a product
supplement. The accompanying prospectus contains a detailed
summary of additional provisions of the notes and of the
indenture, dated February 20, 2004, between Eksportfinans
and The Bank of New York, as trustee (referred to as the
trustee
), under which the notes will be issued (the
indenture
). This is the same indenture under which we
issued notes relating to Registration Statement
Nos. 333-112973 and 333-124095. Certain provisions of this
section are summaries of the accompanying prospectus and subject
to its detailed provisions. You should read all the provisions
of the accompanying prospectus, including information
incorporated by reference, the applicable pricing supplement,
any applicable product supplement and the indenture.
General terms of the notes
Principal amount
We may offer from time to time the notes described in this
prospectus supplement, in any applicable pricing supplement and
in any applicable product supplement. We refer to the offering
of the notes as our medium-term note program. The notes are
being offered on a continuous basis.
Types of notes
We may issue fixed rate notes and floating rate notes, which are
distinguishable by the manner in which they bear interest.
Fixed rate notes
Fixed rate notes are notes that typically bear interest at a
fixed rate. However, fixed rate notes include zero coupon notes,
which bear no interest and are instead issued at a price lower
than the principal amount. Any interest will be paid on fixed
rate notes on dates specified in the applicable pricing
supplement or product supplement.
Floating rate notes
Floating rate notes provide an interest rate determined, and
adjusted periodically, by reference to any of the following
interest rate bases or formulae: Commercial Paper Rate, LIBOR,
EURIBOR, Prime Rate, Treasury Rate, CD Rate, CMT Rate, CMS Rate,
Federal Funds Rate or any other rate specified in any applicable
pricing supplement or product supplement. Interest will be paid
on floating rate notes on dates determined at the time of
issuance and as specified in any applicable pricing supplement
or product supplement. In some cases the rates may also be
adjusted by adding or subtracting a spread or multiplying by a
spread multiplier and there may be a maximum rate and a minimum
rate.
Index linked or asset linked notes
The notes may be issued from time to time as notes of which the
principal and premium and interest, if any, will be determined
by reference to prices, changes in prices, or differences
between prices, of currencies, commodities, derivatives,
securities, baskets of securities, or indices based on other
price, economic or other measures, in each case as set forth in
the applicable pricing supplement or product supplement. These
notes are referred to as
index linked notes
or
asset
linked notes
. Holders of such notes may receive a principal
amount at maturity, if any, that is greater than or less than
the face amount of the notes depending upon the relative value
of the specified index or underlying asset. Information as to
the method for determining the amount of principal, premium and
interest, in each case if any, payable in respect of index
linked notes or asset linked notes, the time and manner of such
payments, certain historical information with respect to the
specified index or asset, material tax considerations and other
information will be set forth in the applicable pricing
supplement or product
S-9
supplement. You should read carefully that information and the
section entitled “Risk factors — Risks relating
to index linked notes or notes linked to certain assets”.
Amortizing notes
We may from time to time offer fixed rate notes on which all or
a portion of the principal amount is payable before the stated
maturity, if any, in accordance with a schedule, by application
of a formula or by reference to an index. These notes are
referred to as
amortizing notes
. Unless otherwise
specified in the applicable pricing supplement or product
supplement, interest on each amortizing note will be computed on
the basis of a 360-day year of twelve 30-day months. Payments
with respect to amortizing notes will be applied first to
interest and then to principal. Further information concerning
additional terms and provisions of amortizing notes, including
repayment information, will be specified in the applicable
pricing supplement or product supplement.
Exchangeable notes
We may issue notes, which we refer to as
exchangeable
notes
, that are optionally or mandatorily exchangeable into:
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the securities of an entity other than the issuer, including
securities of entities not affiliated with us,
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a basket of those securities, or
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any combination of the above.
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The exchangeable notes may or may not bear interest or be issued
with original issue discount or at a premium. The general terms
of the exchangeable notes are described below.
Optionally exchangeable notes
The holder of an optionally exchangeable note may, during a
period, or at a specific time or times, exchange the note for
the underlying securities at a specified rate of exchange. If
specified in the applicable pricing supplement or product
supplement, we will have the option to redeem the optionally
exchangeable note prior to maturity, if any. If the holder of an
optionally exchangeable note does not elect to exchange the note
prior to maturity, if any, or any applicable redemption date,
the holder will receive the principal amount of the note plus
any accrued interest at maturity, if any, or upon redemption.
Mandatorily exchangeable notes
At maturity, if any, the holder of a mandatorily exchangeable
note must exchange the note for the underlying securities at a
specified rate of exchange, and, therefore, depending upon the
value of the underlying securities at maturity, if any, the
holder of a mandatorily exchangeable note may receive less than
the principal amount of the note at maturity, if any. If so
indicated in the applicable pricing supplement or product
supplement, the specified rate at which a mandatorily
exchangeable note may be exchanged may vary depending on the
value of the underlying securities so that, upon exchange, the
holder participates in a percentage, which may be less than,
equal to, or greater than 100% of the change in value of the
underlying securities. Mandatorily exchangeable notes may
include notes where we have the right, but not the obligation,
to require holders of notes to exchange their notes for the
underlying securities.
Payments upon exchange
The applicable pricing supplement or product supplement will
specify whether upon exchange, at maturity, if any, or
otherwise, the holder of an exchangeable note may receive, at
the specified exchange rate, either the underlying securities or
the cash value of the underlying securities. The underlying
securities may be the securities of either U.S. or foreign
entities or both. The exchangeable notes may or may not provide
for protection against fluctuations in the exchange rate between
the currency in which that note is denominated and the currency
or currencies in which the market prices of the underlying
security or securities are quoted. Exchangeable notes may have
other terms, which will be specified in the applicable pricing
supplement or product supplement.
S-10
Special requirements for exchange of global securities
If an optionally exchangeable note is represented by a global
note, the depositary’s nominee will be the holder of that
note and therefore will be the only entity that can exercise a
right to exchange. In order to ensure that the depositary’s
nominee will timely exercise a right to exchange a particular
note or any portion of a particular note, the beneficial owner
of the note must instruct the broker or other direct or indirect
participant through which it holds an interest in that note to
notify the depositary of its desire to exercise a right to
exchange. Different firms have different deadlines for accepting
instructions from their customers. Each beneficial owner should
consult the broker or other participant through which it holds
an interest in a note in order to ascertain the deadline for
ensuring that timely notice will be delivered to the depositary.
Payments upon acceleration of maturity or tax redemption
If the principal amount payable at maturity, if any, of any
exchangeable note is declared due and payable prior to maturity,
if any, the amount payable on:
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an optionally exchangeable note will equal the face amount of
the note plus accrued interest, if any, to but excluding the
date of payment, except that if a holder has exchanged an
optionally exchangeable note prior to the date of acceleration
or tax redemption without having received the amount due upon
exchange, the amount payable will be an amount in cash equal to
the amount due upon exchange and will not include any accrued
but unpaid interest, and
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a mandatorily exchangeable note will equal an amount determined
as if the date of acceleration or tax redemption were the
maturity date, if any, plus accrued interest, if any, to but
excluding the date of payment.
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For the purpose of determining whether holders of the requisite
principal amount of securities outstanding under the indenture
have made a demand or given a notice or waiver or taken any
other action, the outstanding principal amount of index linked
notes will be deemed to be the face amount of the index linked
notes. In the event of an acceleration of the maturity, if any,
of an index linked note, the principal amount payable to the
holder of that note upon acceleration will be the principal
amount determined by reference to the formula by which the
principal amount of the note would be determined on the maturity
date, if any, as if the date of acceleration were the maturity
date, if any.
Original issue discount notes
We may from time to time offer original issue discount notes.
The applicable pricing supplement or product supplement for the
original issue discount notes may provide that the holders will
not receive periodic interest payments. Additional provisions
relating to the original issue discount notes may be described
in the applicable pricing supplement or product supplement. By
an original issue discount note, we mean either:
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a note, including any zero coupon note, that has a stated
redemption price at stated maturity, if any, that exceeds its
issue price by at least 0.25% of its stated redemption price at
maturity, if any, multiplied by the number of full years from
the original issue date to stated maturity, if any, or
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any other note we designate as issued with original issue
discount for U.S. Federal income tax purposes.
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For the purpose of determining whether holders of the requisite
principal amount of notes outstanding under the indenture have
made a demand or given a notice or waiver or taken any other
action, the outstanding principal amount of original issue
discount notes shall be deemed to be the amount of the principal
that would be due and payable upon acceleration of the stated
maturity, if any, as of the date of such determination. See
“U.S. taxation — U.S. Federal income
tax consequences to U.S. holders — Original issue
discount” below for further information about tax
consequences of an investment in original issue discount notes.
Dual currency notes
We may from time to time offer notes for which we have a
one-time option to pay the principal, premium and interest, in
each case if any, on the notes in an optional currency specified
in the applicable pricing
S-11
supplement that is a different currency from the currency
specified in the note. These notes are referred to as
dual
currency notes
. We shall specify in the applicable pricing
supplement or product supplement for the dual currency note:
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the specified currency,
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the optional payment currency,
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the designated exchange rate,
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the option election dates, and
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the interest payment dates for dual currency notes.
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The amounts payable and the method for calculating these amounts
with respect to dual currency notes and any additional terms and
conditions of any issue of dual currency notes will be specified
in the applicable pricing supplement or product supplement.
Maturity
Unless redeemed by us or repurchased at the option of the
holder, or accelerated after a default, or otherwise each note,
other than a note with no maturity date, will mature on a
Business Day as specified in the applicable pricing supplement
or product supplement.
Extension of maturity
If we have provided in any note the option for us to extend the
stated maturity, if any, for one or more periods, each an
extension period, up to but not beyond the final maturity date,
if any, described in the applicable pricing supplement or
product supplement relating to such note, such pricing
supplement or product supplement will indicate such option and
the basis or formula, if any, for setting the interest rate, in
the case of a fixed rate note, or the spread and/or spread
multiplier, in the case of a floating rate note, applicable to
any such extension period, and such pricing supplement or
product supplement will describe any special tax consequences to
holders of such notes.
We may exercise such option with respect to a note by notifying
the trustee of such exercise at least 45 but not more than 60
calendar days (unless otherwise specified in the applicable
pricing supplement or product supplement) prior to the original
stated maturity, if any, of such note, in effect prior to the
exercise of such option. No later than 40 calendar days (unless
otherwise specified in the applicable pricing supplement or
product supplement) prior to the original stated maturity, if
any, the trustee will mail to the holder of such note an
extension notice relating to such extension period, first class,
postage prepaid, setting forth:
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our election to extend the stated maturity, if any, of such note,
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the new stated maturity,
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in the case of a fixed rate note, the interest rate applicable
to the extension period or, in the case of a floating rate note,
the spread and/or spread multiplier applicable to the extension
period, and
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the provisions, if any, for redemption during the extension
period, including the date or dates on which or the period or
periods during which and the price or prices at which such
redemption may occur during the extension period.
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When the trustee has mailed an extension notice to the holder of
a note, the stated maturity, if any, of such note shall be
extended automatically as described in the extension notice,
and, except as modified by the extension notice and as described
in the next paragraph, such note will have the same terms as
prior to the mailing of such extension notice.
Notwithstanding the above, not later than 20 calendar days
(unless otherwise specified in the applicable pricing supplement
or product supplement) prior to the original stated maturity, if
any, for a note, we may, at our option, revoke the interest
rate, in the case of a fixed rate note, or the spread and/or
spread multiplier, in the case
S-12
of a floating rate note, provided for in the extension notice
and establish a higher interest rate, in the case of a fixed
rate note, or a higher spread and/or spread multiplier, in the
case of a floating rate note, for the extension period by
mailing or causing the trustee to mail notice of such higher
interest rate or higher spread and/or spread multiplier, as the
case may be, first class, postage prepaid, to the holder of such
note. Such notice shall be irrevocable. All notes with respect
to which the stated maturity, if any, is extended will bear such
higher interest rate, in the case of a fixed rate note, or
higher spread and/or spread multiplier, in the case of a
floating rate note, for the extension period.
If we elect to extend the stated maturity, if any, of a note,
the direct holder of such note will have the option to elect
repayment of such note by us at the original stated maturity, if
any, at a price equal to the principal amount of such note plus
any accrued interest to such date. In order for a note to be so
repaid on the original stated maturity, if any, the direct
holder must follow the procedures described below under
“Optional early redemption (put)” for optional
repayment, except that the period for delivery of such note or
notification to the trustee shall be at least 25 but not more
than 35 calendar days (unless otherwise specified in the
applicable pricing supplement or product supplement) prior to
the original stated maturity, if any, and except that a direct
holder who has tendered a note for repayment pursuant to an
extension notice may, by written notice to the trustee, revoke
any such tender for repayment until the close of business on the
tenth day prior to the original stated maturity, if any.
Redenomination
If payments on the notes are to be made in a foreign currency
and the issuing country of that currency becomes a participating
member state of the European Monetary Union, then we may, solely
at our option and without the consent of holders or the need to
amend the indenture or the notes, redenominate all of those
notes into euro (whether or not any other similar debt
securities are so redenominated) on any interest payment date
and after the date on which that country became a participating
member state. We will give holders at least 30 calendar
days’ notice of the redenomination, including a description
of the way we will implement it.
If we elect to redenominate a tranche of notes, the election to
redenominate will have effect, as follows:
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each denomination will be deemed to be denominated in such
amount of euro as is equivalent to its denomination or the
amount of interest so specified in the relevant foreign currency
at the fixed conversion rate adopted by the Council of the
European Union for the relevant foreign currency, rounded down
to the nearest
€
0.01,
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after the redenomination date, all payments in respect of those
notes, other than payments of interest in respect of periods
commencing before the redenomination date, will be made solely
in euro as though references in those notes to the relevant
foreign currency were to euro. Payments will be made in euro by
credit or transfer to a euro account (or any other account to
which euro may be credited or transferred) specified by the
payee, or at the option of the payee, by a euro check,
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if those notes are notes which bear interest at a fixed rate and
interest for any period ending on or after the redenomination
date is required to be calculated for a period of less than one
year, it will be calculated on the basis of the applicable
fraction specified in the applicable pricing supplement or
product supplement,
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if those notes are notes which bear interest at a floating rate,
the applicable pricing supplement or product supplement will
specify any relevant changes to the provisions relating to
interest, and
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such other changes shall be made to the terms of those notes as
we may decide, after consultation with the trustee, and as may
be specified in the notice, to conform them to conventions then
applicable to debt securities denominated in euro or to enable
those notes to be consolidated with other notes, whether or not
originally denominated in the relevant foreign currency or euro.
Any such other changes will not take effect until after they
have been notified to the holders.
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Ranking
The notes will be unsecured indebtedness and, unless otherwise
specified in any applicable pricing supplement or product
supplement, will constitute a single series of debt securities
issued under the indenture. Unless otherwise provided in the
applicable pricing supplement or product supplement, the notes
will rank equally in right of payment to all of our other
existing and future unsecured and unsubordinated debt. If
subordinated notes are issued as indicated in the applicable
pricing supplement or product supplement, such notes will be
subordinate in right of payment to the prior payment in full of
all senior debt of the issuer, as described in the accompanying
prospectus under the heading “Description of debt
securities — Subordination”.
Rating
A pricing supplement or product supplement may indicate that the
notes are expected on issue to be assigned a particular rating
by Moody’s Investors Service, Standard & Poor’s
Ratings Services, a Division of the McGraw-Hill Companies or
Fitch Ratings Limited. A security rating is not a recommendation
to buy, sell or hold the securities and may be subject to
revision, suspension or withdrawal at any time by the assigning
rating organization. A security rating will depend on, among
other things, the criteria used by the assigning rating
organization in issuing ratings. Real or anticipated changes in
the rating, including changes due to a change in the criteria
used by the rating organization, will generally affect the value
of the notes.
Form, exchange and transfer
The form, exchange or transfer of notes will be described and
effected as specified in the accompanying prospectus under the
headings “Description of debt securities — Form,
exchange and transfer” and “Description of debt
securities — Global securities”.
Unless the applicable pricing supplement or product supplement
specifies otherwise, the notes will be represented by one or
more global notes that will be deposited with and registered in
the name of the Depository Trust Company (
DTC
) or its
nominee. Additionally, from time to time as specified in the
applicable pricing supplement or product supplement, we may
issue the notes represented by one or more global notes
deposited with and registered in the name of Euroclear
(
Euroclear
) and/or Clearstream, Luxembourg
(
Clearstream
) or their nominees.
Except as described in the accompanying prospectus under
“Description of debt securities — Global
securities”, a global note is not exchangeable, except for
a global note of like denomination to be registered in the name
of the depositary or their respective nominees.
Investors may elect to hold interests in the notes held by DTC
through Clearstream or Euroclear if they are participants in
those systems, or indirectly through organizations which are
participants in those systems. Clearstream and Euroclear will
hold interests on behalf of their participants through
securities accounts in the names of Clearstream and Euroclear on
the books of their respective depositaries, which in turn will
hold such interests in the registered notes in securities
accounts in the depositaries’ names on the books of DTC.
Clearstream and Euroclear have provided us with the following
information:
Clearstream
Clearstream is incorporated under the laws of Luxembourg as a
professional depositary. Clearstream holds securities for its
participating organizations (
Clearstream participants
)
and facilitates the clearance and settlement of securities
transactions between Clearstream participants through electronic
book-entry changes in accounts of Clearstream participants,
thereby eliminating the need for physical movement of
certificates. Clearstream provides to Clearstream participants,
among other things, services for safekeeping, administration,
clearance and settlement of internationally traded securities
and securities lending and borrowing. Clearstream interfaces
with domestic securities markets in several countries. As a
professional depositary, Clearstream is subject to regulation by
the Luxembourg Commission for the Supervision of the Financial
Sector (
Commission de Surveillance du Secteur Financier
).
Clearstream participants are recognized financial institutions
around the world, including underwriters, securities brokers and
dealers, banks, trust companies, clearing corporations and
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certain other organizations and may include the agents.
Clearstream participants in the U.S. are limited to
securities brokers and dealers and banks. Indirect access to
Clearstream is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a
custodial relationship with a Clearstream participant either
directly or indirectly.
Distributions with respect to notes held beneficially through
Clearstream will be credited to cash accounts of Clearstream
participants in accordance with its rules and procedures, to the
extent received by the U.S. depositary for Clearstream.
Euroclear
Euroclear was created in 1968 to hold securities for
participants of Euroclear (
Euroclear participants
) and to
clear and settle transactions between Euroclear participants
through simultaneous electronic book-entry delivery against
payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of
securities and cash. Euroclear performs various other services,
including securities lending and borrowing and interacts with
domestic markets in several countries. Euroclear is operated by
Euroclear Bank S.A./N.V. (the
Euroclear operator
) under
contract with Euroclear plc, a U.K. corporation. All operations
are conducted by the Euroclear operator, and all Euroclear
securities clearance accounts and Euroclear cash accounts are
accounts with the Euroclear operator, not Euroclear plc.
Euroclear plc establishes policy for Euroclear on behalf of
Euroclear participants. Euroclear participants include banks,
including central banks, securities brokers and dealers and
other professional financial intermediaries and may include the
underwriters. Indirect access to Euroclear is also available to
other firms that clear through or maintain a custodial
relationship with a Euroclear participant, either directly or
indirectly.
The Euroclear operator is a Belgian bank. As such it is
regulated by the Belgian Banking and Finances Commission.
Securities clearance accounts and cash accounts with the
Euroclear operator are governed by the terms and conditions
governing use of Euroclear and the related operating procedures
of the Euroclear System, and applicable Belgian law
(collectively, the
terms and conditions
). The terms and
conditions govern transfers of securities and cash within
Euroclear, withdrawals of securities and cash from Euroclear,
and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible
basis without attribution of specific certificates to specific
clearance accounts. The Euroclear operator acts under the terms
and conditions only on behalf of Euroclear participants, and has
no record of or relationship with persons holding through
Euroclear participants.
Distributions with respect to notes held beneficially through
Euroclear will be credited to the cash accounts of Euroclear
participants in accordance with the terms and conditions, to the
extent received by the U.S. depositary for Euroclear.
Euroclear has further advised the issuer that investors that
acquire, hold and transfer interests in the notes by book-entry
through accounts with the Euroclear operator or any other
securities intermediary are subject to the laws and contractual
provisions governing their relationship with their intermediary,
as well as the laws and contractual provisions governing the
relationship between such an intermediary and each other
intermediary, if any, standing between themselves and the global
securities certificates.
Global clearance and settlement procedures
Initial settlement for the notes will be made in immediately
available funds. Secondary market trading between DTC
participants will occur in the ordinary way in accordance with
DTC rules and will be settled in immediately available funds
using DTC’s Same Day Funds Settlement System. Secondary
market trading between Clearstream participants and/or Euroclear
participants will occur in the ordinary way in accordance with
the applicable rules and operating procedures of Clearstream and
Euroclear and will be settled using the procedures applicable to
conventional eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or
indirectly through DTC, on the one hand, and directly or
indirectly through Clearstream participants or Euroclear
participants, on the other, will be effected through DTC in
accordance with DTC rules on behalf of the relevant European
international clearing system by
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its U.S. depositary; however, such cross market
transactions will require delivery of instructions to the
relevant European international clearing system by the
counterparty in such system in accordance with its rules and
procedures and within its established deadlines. The relevant
European international clearing system will, if the transaction
meets its settlement requirements, deliver instructions to its
U.S. depositary to take action to effect final settlement
on its behalf by delivering or receiving notes through DTC, and
making or receiving payment in accordance with normal procedures
for same day funds settlement applicable to DTC. Clearstream
participants and Euroclear participants may not deliver
instructions directly to their respective U.S. depositaries.
Because of time zone differences, credits of notes received
through Clearstream or Euroclear as a result of a transaction
with a DTC participant will be made during subsequent securities
settlement processing and dated the business day following the
DTC settlement date. Such credits or any transactions in such
notes settled during such processing will be reported to the
relevant Euroclear participants or Clearstream participants on
such business day. Cash received in Clearstream or Euroclear as
a result of sales of notes by or through a Clearstream
participant or a Euroclear participant to a DTC participant will
be received with value on the DTC settlement date but will be
available in the relevant Clearstream or Euroclear cash account
only as the business day following settlement in DTC.
Although DTC, Clearstream and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of notes
among participants of DTC, Clearstream and Euroclear, they are
under no obligation to perform or continue to perform such
procedures and such procedures may be modified or discontinued
at any time. Neither we nor the paying agent will have any
responsibility for the performance by DTC, Euroclear or
Clearstream or their respective direct or indirect participants
of their obligations under the rules and procedures governing
their operations.
Currency
The notes may be denominated in U.S. dollars or in foreign
currencies or composite currency units, which will be described
in any applicable pricing supplement or product supplement. Such
foreign currency or composite currency unit is referred to as
the
specified currency
. If a specified currency is not
described in a pricing supplement or product supplement, the
notes will be denominated in U.S. dollars and payments of
principal, premium and interest, in each case if any, will be
made in U.S. dollars in the manner described in this
prospectus supplement. If any of the notes are to be denominated
in a foreign currency, additional information about the terms of
these notes and other matters of interest to the holders of
these notes will be described in a pricing supplement or product
supplement.
Denominations
The authorized denominations of the notes denominated in
U.S. dollars will be $1,000.00 and any multiple thereof
unless otherwise specified in any applicable pricing supplement
or product supplement. The authorized denominations of notes
denominated in a foreign currency will be set forth in any
applicable pricing supplement or product supplement.
Payment of principal and interest
Payments on book-entry notes
Notes denominated in U.S. dollars
Payments of principal, premium and interest, in each case if
any, on the notes will be made pursuant to the applicable
procedures of the depositary detailed in the accompanying
prospectus under the heading “Description of debt
securities – Global securities”.
Notes denominated other than in U.S. dollars
We understand that pursuant to the current practices of DTC, DTC
elects to have all payments made on global notes for which it is
the depositary made in U.S. dollars, regardless of the
specified currency, unless notified by a bank or broker
participating in its book-entry system through which an indirect
holder’s beneficial
S-16
interest in a global note may be held, that such indirect holder
elects to receive payment in the specified currency outside of
the facilities of DTC. Unless otherwise specified in the
applicable pricing supplement or product supplement, the
following must occur for a beneficial owner of notes in
book-entry form that are denominated in a specified currency
other than U.S. dollars to receive payments of principal or
any premium or interest in that specified currency:
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The beneficial owner must notify the participant of the
depositary through which its interest is held on or before the
applicable regular record date, in the case of a payment of
interest, and on or before the sixteenth day, whether or not a
Business Day, before the stated maturity of the notes (if any),
in the case of principal or premium, of the beneficial
owner’s election to receive all or a portion of any payment
in a specified currency; the participant must notify the
depositary of any election on or before the third Business Day
after the regular record date, and
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The depositary must notify the paying agent of the election on
or before the fifth Business Day after the regular record date
in the case of payment of interest or the tenth Business Day
prior to the payment date for any payment of principal or
premium.
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If complete instructions are received by the participant and
forwarded to the depositary, and forwarded by the depositary to
the paying agent, on or before the relevant dates, the
beneficial owner of the notes in book-entry form will receive
payment in the specified currency and the paying agent will pay
such amount in the specified currency to the participant
directly. See additional discussion with respect to
non-U.S. dollar denominated notes in “Special
provisions relating to foreign currency notes”. If the
preceding procedures are not followed, an indirect owner will
receive payment through the facilities of the depositary in
U.S. dollars.
Payment on certificated notes
Notes denominated in U.S. dollars
Where payments of principal, premium and interest, in each case
if any, and interest for a certificated note are to be made in
U.S. dollars, payments will be made in immediately
available funds, provided that the note is presented to the
trustee in time for the trustee to make the payments in such
funds in accordance with its normal procedures. Notwithstanding
the foregoing, where payments of interest and, in the case of
amortizing notes, principal and premium, if any, with respect to
any certificated note, other than amounts payable at maturity,
if any, are to be made in U.S. dollars, the payments may,
at our option, be paid by check mailed to the address of the
person in whose name a certificated note is registered at the
close of business on the applicable record date, as such address
appears in the security register.
Notes denominated other than in U.S. dollars
Unless we otherwise indicate in the applicable pricing
supplement or product supplement, payments of principal, premium
and interest, in each case if any, with respect to any
certificated note to be made in a specified currency other than
U.S. dollars will be paid in immediately available funds by
wire transfer to such account maintained by the holder with a
bank designated by the holder on or prior to the regular record
date or at least 15 calendar days prior to maturity, if
any, as the case may be, provided that such bank has the
appropriate facilities for such a payment in the specified
currency. However, it is also necessary that with respect to
payments of principal, premium and interest, in each case if
any, at maturity, if any, the note is presented to the trustee
in time for the trustee to make such payment in accordance with
its normal procedures, which shall require presentation no later
than two Business Days prior to maturity, if any, in order to
ensure the availability of immediately available funds in the
specified currency at maturity, if any. A holder must make such
designation by filing the appropriate information with the
trustee and, unless revoked, any such designation made with
respect to any note will remain in effect with respect to any
further payments payable to such holder with respect to such
note.
If we so specify in the applicable pricing supplement or product
supplement, payments of principal and premium, in each case if
any, and interest with respect to any foreign currency note that
is a certificated note, will be made in U.S. dollars if the
holder of such note elects to receive all such payments in
U.S. dollars by delivery of
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a written request to the trustee either on or prior to the
regular record date for such certificated note or at least
15 calendar days prior to maturity, if any. Such election
may be in writing, mailed or hand delivered, or by cable, telex
or other form of facsimile transmission, to the trustee. A
holder of a foreign currency note which is a certificated note
may elect to receive payment in U.S. dollars for all
principal, premium and interest payments, in each case if any
and need not file a separate election for each payment. Such
election will remain in effect until revoked by written notice
to the trustee, but written notice of such revocation must be
received by the trustee either on or prior to the regular record
date or at least 15 calendar days prior to maturity, if any.
Holders of foreign currency notes whose notes are held in the
name of a broker or nominee should contact such broker or
nominee to determine whether and how an election to receive
payments in U.S. dollars may be made.
Calculation of exchange rate
The U.S. dollar amount to be received by a holder of a note
with a specified currency other than U.S. dollars, whether
such note is held in certificated or book-entry form, will be
based upon the exchange rate as determined by the exchange rate
agent based on the most favorable bid quotation of
U.S. dollars for us received by such exchange rate agent at
approximately 11:00 a.m., New York City time, on the second
Business Day preceding the applicable payment date from three
recognized foreign exchange dealers in The City of New York
selected by the exchange rate agent and approved by us, one of
which may be the exchange rate agent, for the purchase by the
quoting dealer, for settlement on such payment date, of the
aggregate amount of the specified currency payable on such
payment date in respect of all notes denominated in such
specified currency. If three quoting dealers are not available,
then two dealers will be used. If no such bid quotations are
available, payments will be made in the specified currency,
unless such specified currency is unavailable due to the
imposition of exchange controls or other circumstances beyond
our control, in which case payment will be made as described
below under “Special provisions relating to foreign
currency notes”. All currency exchange costs will be borne
by the holders of such notes by deductions from such payments.
Unless we otherwise specify in the applicable pricing supplement
or product supplement, Citibank N.A., will be the exchange rate
agent for the notes.
In the event of an official redenomination of a specified
currency for a note, our obligations with respect to payments on
a note denominated in that currency will be deemed immediately
following such redenomination to provide for payment of
equivalent amounts of redenominated currency. In no event will
any adjustment be made to any amount payable under a note as a
result of any change in the value of a specified currency
relative to any other currency due solely to fluctuations in
exchange rates.
Interest and interest rates
Unless otherwise specified in the applicable pricing supplement
or product supplement, each note will accrue any interest from
and including its date of issue or from and including the most
recent date to which interest on the note has been paid or duly
provided for. The applicable pricing supplement or product
supplement will designate whether a particular note bears
interest at a fixed or floating rate. In the case of a floating
rate note, the applicable pricing supplement or product
supplement will also specify whether the note will bear interest
based on the Commercial Paper Rate, LIBOR, EURIBOR, the Prime
Rate, the Treasury Rate, the CD Rate, the CMT Rate, the CMS
Rate, the Federal Funds Rate or on another interest rate or
combination of interest rate bases set forth in the applicable
pricing supplement or product supplement.
The rate of interest on floating rate notes will reset daily,
weekly, monthly, quarterly, semi-annually, annually or
otherwise. The reset dates will be specified in the applicable
pricing supplement or product supplement and on the face of each
note. See “Interest rate reset” below. In addition,
the applicable pricing supplement or product supplement will
specify the spread or spread multiplier, if any, and the maximum
interest rate or minimum interest rate, if any, applicable to
each floating rate note.
The interest rate on the notes will in no event be higher than
the maximum rate permitted by applicable law.
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Interest on a note will be payable on the first interest payment
date following its date of issue, unless the date of issue is on
or after the record date for the first interest payment date, in
which case interest will be payable beginning on the second
interest payment date following the date of issuance.
If any interest payment date with respect to any floating rate
note, other than an interest payment date that is also the
maturity date of that note, if any, falls on a day that is not a
Business Day, that interest payment date will be postponed to
the next day that is a Business Day and interest will continue
to accrue. However, in the case of a LIBOR or EURIBOR note, if
the next Business Day is in the following calendar month, the
interest payment date will be the preceding Business Day. If the
maturity date, if any, of any floating or fixed rate note, or an
interest payment date for any fixed rate note falls on a day
that is not a Business Day, payment of principal, premium,
interest, in each case if any, with respect to that note will be
paid on the next Business Day. No interest on that payment will
accrue from and after that maturity date, if any, or interest
payment date. Interest payable at maturity, if any, will be
payable to the person to whom principal is payable.
Interest rates we offer with respect to the notes may differ
depending upon, among other things, the aggregate principal
amount of notes purchased in any single transaction. We may from
time to time change interest rates, interest rate formulas and
other variable terms of the notes. No change, however, will
affect any note already issued or as to which an offer to
purchase has been accepted by us.
Fixed rate notes
The applicable pricing supplement or product supplement relating
to an offering of fixed rate notes will designate one or more
fixed rates of interest per year payable on the notes. The rate
may change as described above under “Extension of
maturity” and below under “Interest rate reset”.
The rate of interest may be zero. Interest on the notes will be
payable in arrears on the interest payment dates specified in
the applicable pricing supplement or product supplement. Unless
otherwise specified in the applicable pricing supplement or
product supplement, the regular record dates for payment of
interest will be the date (whether or not a Business Day) that
is 15 calendar days (unless otherwise specified in the
applicable pricing supplement or product supplement) immediately
preceding the interest payment dates specified in the applicable
pricing supplement or product supplement; and interest, if any,
on U.S. dollar-denominated fixed rate notes will be
computed on the basis of a
360-day
year of twelve
30-day
months.
Floating rate notes
Unless we otherwise specify in the applicable pricing supplement
or product supplement, each floating rate note will bear
interest at a variable rate determined by reference to an
interest rate formula or formulas, which may be adjusted by
adding or subtracting the spread and/or multiplying by the
spread multiplier, each as described below. A floating rate note
may also have either or both of the following:
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a maximum numerical interest rate limitation, or ceiling, on the
rate of interest which may accrue during any interest period, and
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a minimum numerical interest rate limitation, or floor, on the
rate of interest that may accrue during any interest period.
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The spread is the number of basis points specified by us in the
applicable pricing supplement or product supplement as being
applicable to the interest rate for such note. The spread
multiplier is the percentage specified by us in the applicable
pricing supplement or product supplement as being applicable to
the interest rate for such note.
The applicable pricing supplement or product supplement relating
to a floating rate note will designate an interest rate basis or
bases for such floating rate note. Such basis or bases may be:
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the Commercial Paper Rate, in which case such note will be a
Commercial Paper Rate note,
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LIBOR, in which case such note will be a LIBOR note,
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EURIBOR in which case such note will be a EURIBOR note,
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the Prime Rate, in which case such note will be a Prime Rate
note,
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the Treasury Rate, in which case such note will be a Treasury
Rate note,
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the CD Rate, in which case such note will be a CD Rate note,
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the CMT Rate, in which case such note will be a CMT Rate note,
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the CMS Rate, in which case such note will be a CMS Rate note,
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the Federal Funds Rate, in which case such note will be a
Federal Funds Rate note, or
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such other interest rate formula or formulae (which may include
a combination of more than one of the interest rate bases
described above) as may be described in the applicable pricing
supplement or product supplement.
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In addition, in the applicable pricing supplement or product
supplement we will define or particularize for each note the
following terms, if applicable: initial interest rate, interest
payment dates, Index Maturity, Index Currency, Calculation Date
and Interest Reset Date with respect to such note.
Unless otherwise specified in the applicable pricing supplement
or product supplement, Citibank, N.A. will be the calculation
agent with respect to the calculation of rates of interest
payable on floating rate notes. The calculation agent will
promptly notify the trustee (and, in the case of floating rate
notes listed on the Luxembourg Stock Exchange, the Luxembourg
paying agent) of each determination of the interest rate. The
calculation agent will also notify the trustee (and, in the case
of floating rate notes listed on the Luxembourg Stock Exchange,
the Luxembourg paying agent) of the interest rate, the interest
amount, the interest period and the interest payment date
related to each interest reset date as soon as such information
is available. The calculation agent and the Luxembourg paying
agent will make such information available to the holders of
such notes upon request and, in the case of notes listed on the
Luxembourg Stock Exchange, the Luxembourg Stock Exchange. The
calculation agent’s determination of any interest rate, and
its calculation of the amount of interest for any interest
period, will be final and binding in the absence of manifest
error. Upon the request of a registered holder of a floating
rate note, the calculation agent will provide the interest rate
then in effect and, if different, the interest rate that will
become effective as a result of a determination made on the most
recent Interest Determination Date with respect to that floating
rate note.
Unless otherwise specified in the applicable pricing supplement
or product supplement:
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the regular record date for payment of interest will be the
fifteenth day before the day on which interest will be paid,
whether or not such day is a Business Day, and
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each interest payment on any floating rate note will include
interest accrued from and including the date of issue or the
last date to which interest has been paid, as the case may be,
to, but excluding, the applicable interest payment date or the
date of maturity, if any, as the case may be.
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Accrued interest on a floating rate note will be calculated by
multiplying the principal amount of the note by an accrued
interest factor. The accrued interest factor will be computed by
adding the interest factors calculated for each day in the
period for which accrued interest is being calculated. Unless
otherwise specified in the applicable pricing supplement or
product supplement, the interest factor for each day is computed
by dividing the interest rate in effect on that day by:
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the actual number of days in the year, in the case of Treasury
Rate notes and CMT rate notes, or
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360 days, in the case of all other floating rate notes.
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The interest rate on a floating rate note in effect on any day
will be:
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if the day is an Interest Reset Date, the interest rate with
respect to the Interest Determination Date relating to that
Interest Reset Date, or
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if the day is not an Interest Reset Date, the interest rate with
respect to the Interest Determination Date relating to the
preceding Interest Reset Date.
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S-20
The interest rate in effect for the period from the date of
issue to, but excluding, the first Interest Reset Date will be
the initial interest rate specified in the applicable pricing
supplement or product supplement.
Except as otherwise specified in the applicable pricing
supplement or product supplement, all percentages and decimals
resulting from any calculation of interest on floating rate
notes will be rounded, if necessary, to the nearest
one-hundred
thousandth
of a percentage point, with five
one-millionths
of a
percentage point rounded upwards. For example, 9.876545% (or
0.09876545) will be rounded to 9.87655% (or 0.0987655) and
9.876544% (or 0.09876544) will be rounded to 9.87654% (or
0.0987654). All dollar amounts used in or resulting from any
such calculation will be rounded to the nearest cent (with
one-half cent being rounded upwards) and, in the case of notes
denominated in a specified currency other than
U.S. dollars, to the nearest corresponding hundredth of a
unit. Amounts of
one-half
cent, or five
one-thousandths
of a
unit, or more will be rounded upward.
Commercial Paper Rate notes
A Commercial Paper Rate note will bear interest at an interest
rate calculated with reference to the Commercial Paper Rate and
the spread or spread multiplier, if any, as specified in the
Commercial Paper Rate note and the applicable pricing supplement
or product supplement.
Unless otherwise specified in the applicable pricing supplement
or product supplement, the “Commercial Paper Rate” for
any Interest Determination Date is the Money Market Yield of the
rate on that date for commercial paper having the Index Maturity
specified in the applicable pricing supplement or product
supplement, as published in H.15(519), on the Calculation Date
pertaining to that Interest Determination Date under the heading
“Commercial paper — Nonfinancial”.
The following procedures will be followed if the Commercial
Paper Rate cannot be determined as described above:
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If the rate is not published in H.15(519) by 3:00 p.m., New
York City time, on the Calculation Date, the Commercial Paper
Rate will be the Money Market Yield of the rate on that Interest
Determination Date for commercial paper having the Index
Maturity designated in the applicable pricing supplement or
product supplement, as published in H.15 Daily Update under the
heading “Commercial paper — Nonfinancial”.
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If the rate is not published in either H.15(519) or H.15 Daily
Update by 3:00 p.m., New York City time, on the Calculation
Date, then the calculation agent will determine the Commercial
Paper Rate to be the Money Market Yield of the arithmetic mean
of the following offered rates for commercial paper having the
Index Maturity specified in the applicable pricing supplement or
product supplement and placed for an industrial issuer whose
senior unsecured bond rating is “AA”, or the
equivalent, from a nationally recognized rating agency: the
rates offered as of 11:00 a.m., New York City time, by
three leading dealers of commercial paper in The City of New
York. The calculation agent, after consultation with us, will
select the three dealers referred to above. These dealers may
include one or more of the agents named on the cover of this
prospectus supplement or their affiliates.
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If fewer than three dealers selected by the calculation agent
are quoting as mentioned above, the Commercial Paper Rate will
be the Commercial Paper Rate in effect on that Interest
Determination Date or, if that Interest Determination Date is
the first Interest Determination Date, the initial interest rate.
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LIBOR notes
A LIBOR note will bear interest at an interest rate, calculated
with reference to the London Interbank Offered Rate
(
LIBOR
) and the spread or spread multiplier, if any, as
specified in the LIBOR note and the applicable pricing
supplement or product supplement. Unless otherwise specified in
the applicable pricing supplement or product supplement, the
calculation agent will determine LIBOR as follows:
With respect to each interest determination date:
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If “LIBOR Moneyline Telerate” is specified in the
applicable pricing supplement or product supplement, LIBOR will
be the rate for deposits in the Index Currency having the Index
Maturity specified in
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S-21
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the applicable pricing supplement or product supplement, on that
Interest Determination Date, as that rate appears on the
Designated LIBOR Page as of 11:00 a.m., London time, on
that Interest Determination Date.
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If “LIBOR Reuters” is specified in the applicable
pricing supplement or product supplement, LIBOR will be the
arithmetic mean of the offered rates for deposits in the Index
Currency having the Index Maturity specified in the applicable
pricing supplement or product supplement, on that Interest
Determination Date, as those rates appear on the Designated
LIBOR Page as of 11:00 a.m., London time, on that Interest
Determination Date, if at least two such offered rates appear on
the Designated LIBOR Page.
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If neither “LIBOR Moneyline Telerate” nor “LIBOR
Reuters” is specified in the applicable pricing supplement
or product supplement as the method for calculating LIBOR, LIBOR
will be calculated as if “LIBOR Telerate” had been
specified.
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If the Designated LIBOR Page by its terms provides only for a
single rate, that single rate will be used regardless of the
foregoing provisions requiring more than one rate.
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With respect to any Interest Determination Date on which fewer
than the required number of applicable rates appear or no rate
appears on the applicable Designated LIBOR Page, the calculation
agent will determine LIBOR as follows:
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LIBOR will be determined on the basis of the rates, at
approximately 11:00 a.m., London time, on the Interest
Determination Date, offered by four major banks in the London
interbank market to prime banks in the London interbank market
for deposits in the Index Currency having the Index Maturity
designated in the applicable pricing supplement or product
supplement, on that Interest Determination Date, and in a
principal amount equal to an amount not less than
U.S. $1 million that is representative of a single
transaction in the market at that time. The calculation agent
will select the four banks after consultation with us and
request the principal London office of each of those banks to
provide a quotation of its rate. These banks may include one or
more of the agents named on the cover of this prospectus
supplement or their affiliates. If at least two quotations are
provided, LIBOR for that Interest Determination Date will be the
arithmetic mean of those quotations.
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If fewer than two quotations are provided as mentioned above,
LIBOR will be the arithmetic mean of the rates for loans of the
following kind to European banks quoted, at approximately
11:00 a.m., in the applicable Financial Center, on the
Interest Determination Date, by three major banks in the
applicable Financial Center: loans in the Index Currency, having
the Index Maturity designated in the applicable pricing
supplement or product supplement, on that Interest Determination
Date and in a principal amount equal to an amount not less than
U.S.$1 million that is representative for a single
transaction in that market at that time. The calculation agent,
after consultation with us, will select the three banks referred
to above. These banks may include one or more of the agents
named on the cover of this prospectus supplement or their
affiliates.
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If fewer than three banks selected by the calculation agent are
quoting as mentioned above, LIBOR will be LIBOR in effect during
the prior interest period that Interest Determination Date or,
if that Interest Determination Date is the first Interest
Determination Date, the initial interest rate.
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EURIBOR notes
Each EURIBOR note will bear interest at an interest rate equal
to the Euro Interbank Offered Rate (
EURIBOR
) and any
spread or spread multiplier as specified in the note and the
applicable pricing supplement or product supplement.
Unless otherwise specified in the applicable pricing supplement
or product supplement, the calculation agent will determine
EURIBOR on each Interest Determination Date as follows:
The calculation agent will determine the offered rates for
deposits in euro for the period of the Index Maturity specified
in the applicable pricing supplement or product supplement,
commencing on the Interest Reset
S-22
Date, which appears on page 248 on the Bridge Telerate
Service or any successor service or any page that may replace
page 248 on that service which is commonly referred to as
‘Telerate Page 248’ as of 11:00 a.m.,
Brussels time, on that date.
If EURIBOR cannot be determined on an Interest Determination
Date as described above, then the calculation agent will
determine EURIBOR as follows:
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The calculation agent for the EURIBOR note will select four
major banks in the Euro-zone interbank market. These banks may
include one or more of the agents named on the cover of this
prospectus supplement or their affiliates.
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The calculation agent will request that the principal
Euro-zone
offices of
those four selected banks provide their offered quotations to
prime banks in the Euro-zone interbank market at approximately
11:00 a.m., Brussels time, on the Interest Determination
Date. These quotations shall be for deposits in euro for the
period of the Index Maturity, commencing on the Interest Reset
Date. Offered quotations must be based on a principal amount
equal to at least U.S. $1,000,000.00 or the approximate
equivalent in euro that is representative of a single
transaction in such market at that time.
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If two or more quotations are provided, EURIBOR will be the
arithmetic mean of those quotations. If less than two quotations
are provided, the calculation agent will select four major banks
in the Euro-zone. These banks may include one or more of the
agents named on the cover of this prospectus supplement or their
affiliates and follow the two steps below:
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The calculation agent will then determine EURIBOR as the
arithmetic mean of rates quoted by those four major banks in the
Euro-zone
to leading
European banks at approximately 11:00 a.m., Brussels time,
on the Interest Determination Date. The rates quoted will be for
loans in euro, for the period of the Index Maturity, commencing
on the Interest Reset Date. Rates quoted must be based on a
principal amount of at least U.S. $1,000,000.00 or the
approximate equivalent in euro that is representative of a
single transaction in such market at that time.
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If the banks so selected by the calculation agent are not
quoting rates as described above, EURIBOR for the interest
period will be the same as for the immediately preceding
interest period. If there is no preceding interest period,
EURIBOR will be the initial interest rate.
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Prime Rate notes
A Prime Rate note will bear interest at an interest rate
calculated with reference to the Prime Rate and the spread or
spread multiplier, if any, as specified in the Prime Rate note
and the applicable pricing supplement or product supplement.
Unless otherwise specified in the note and the applicable
pricing supplement or product supplement, the “Prime
Rate” for any Interest Determination Date is the prime rate
or base lending rate on that date, as published in H.15(519), on
the Calculation Date pertaining to the Interest Determination
Date under the heading “Bank prime loan” or any
successor heading.
The following procedures will be followed if the Prime Rate
cannot be determined as described above:
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If the rate is not published in H.15(519) prior to
3:00 p.m., New York City time, on the Calculation Date,
then the Prime Rate will be the rate on the Interest
Determination Date as published in H.15 Daily Update opposite
the heading “Bank prime loan” or another recognized
electronic source.
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If the above rate is not published in either H.15(519) or H.15
Daily Update by 3:00 p.m., New York City time, on the
Calculation Date, then the calculation agent will determine the
Prime Rate to be the arithmetic mean of the rates of interest
publicly announced by each bank that appears on the Reuters
Screen USPRIME1 as that bank’s prime rate or base lending
rate in effect for that Interest Determination Date.
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If fewer than four rates appear on the Reuters Screen USPRIME1
as of 11:00 a.m., New York City time, on the Interest
Determination Date, then the Prime Rate will be the arithmetic
mean of the prime rates or
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S-23
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base lending rates quoted, on the basis of the actual number of
days in the year divided by a
360-day
year, as of the
close of business on the Interest Determination Date by four
major banks in The City of New York selected by the calculation
agent from a list approved by us. These banks may include one or
more of the agents named on the cover of this prospectus
supplement or their affiliates.
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If fewer than four quotations as described in the paragraph
immediately above are provided, then the Prime Rate will be the
arithmetic mean of the prime rates or base lending rates
furnished by the appropriate number of substitute
U.S. banks or trust companies in The City of New York that
are subject to supervision or examination by federal or state
authority. The calculation agent will select the banks or trust
companies referred to above from a list approved by us. These
banks may include one or more of the agents named on the cover
of this prospectus supplement or their affiliates.
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If the banks selected by the calculation agent are not quoting
as mentioned above, the Prime Rate will be the Prime Rate in
effect on that Interest Determination Date or, if that Interest
Determination Date is the first Interest Determination Date, the
initial interest rate.
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Treasury Rate notes
A Treasury Rate note will bear interest at an interest rate
calculated with reference to the Treasury Rate and the spread or
spread multiplier, if any, as specified in the Treasury Rate
note and the applicable pricing supplement or product supplement.
Unless otherwise specified in the applicable pricing supplement,
the “Treasury Rate” for any Interest Determination
Date is the rate set at the most recent auction of direct
obligations of the United States (
Treasury bills
) having
the Index Maturity designated in the applicable pricing
supplement or product supplement, as that rate appears on either
Telerate Page 56 or Telerate Page 57 (or any pages
that may replace such pages) under the heading “Investment
Rate”.
The following procedures will be followed if the Treasury Rate
cannot be determined as described above:
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If the above rate is not published on Telerate Page 56 or
Telerate Page 57 (or any pages that may replace those
pages) by 3:00 p.m., New York City time, on the Calculation
Date, the Treasury Rate will be the Bond Equivalent Yield of the
auction average rate, as otherwise announced by the United
States Department of the Treasury, for the Interest
Determination Date.
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If the results of the most recent auction of Treasury bills
having the Index Maturity designated in the applicable pricing
supplement or product supplement are not published or announced
as described above by 3:00 p.m., New York City time, on the
Calculation Date, or if no auction is held in a particular week,
the Treasury Rate will be the Bond Equivalent Yield of the rate
set forth in H.15(519) for the Interest Determination Date
opposite the Index Maturity under the heading
“U.S. government securities/ Treasury bills/ Secondary
market”.
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If the above rate is not published in H.15(519) by
3:00 p.m., New York City time, on the Calculation Date, the
Treasury Rate will be the Bond Equivalent Yield of the rate set
forth in H.15 Daily Update, or another recognized electronic
source used for the purpose of displaying that rate, for the
Interest Determination Date in respect of the Index Maturity
under the heading “U.S. government securities/
Treasury bills/ Secondary market”.
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If the above rate is not published in H.15(519), H.15 Daily
Update or another recognized source by 3:00 p.m., New York
City time, on the Calculation Date, then the calculation agent
will determine the Treasury Rate to be the Bond Equivalent Yield
of the arithmetic mean of the following secondary market bid
rates for the issue of Treasury bills with a remaining maturity
closest to the Index Maturity specified in the applicable
pricing supplement or product supplement: the rates bid as of
approximately 3:30 p.m., New York City time, on the
Interest Determination Date by three leading primary United
States government securities dealers. The calculation agent,
after consultation with us will select the three dealers
referred to above. These dealers may include one or more of the
agents named on the cover of this prospectus supplement or their
affiliates.
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S-24
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If fewer than three dealers selected by the calculation agent
are quoting as mentioned above, the Treasury Rate will be the
Treasury Rate in effect on that Interest Determination Date or,
if that Interest Determination Date is the first Interest
Determination Date, the initial interest rate.
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CD Rate notes
A CD Rate note will bear interest at an interest rate calculated
with reference to the CD Rate and the spread or spread
multiplier, if any, as specified in the CD Rate note and the
applicable pricing supplement or product supplement.
Unless otherwise specified in the applicable pricing supplement
or product supplement, the CD Rate for any Interest
Determination Date is the rate on that date for negotiable
certificates of deposit having the Index Maturity specified in
the applicable pricing supplement or product supplement, as
published in H.15(519), on the Calculation Date pertaining to
that Interest Determination Date under the heading “CDs
(secondary market)” or any successor heading.
The following procedures will be followed if the CD Rate cannot
be determined as described above:
If the rate is not published in H.15(519) by 3:00 p.m., New
York City time, on the Calculation Date, the CD Rate will be the
rate on that Interest Determination Date for negotiable
U.S. dollar certificates of deposit having the Index
Maturity designated in the applicable pricing supplement or
product supplement as published in H.15 Daily Update under the
heading “CDs (secondary market)” or any successor
heading, or another recognized electronic source.
If the rate is not published in either H.15(519) or H.15 Daily
Update by 3:00 p.m., New York City time, on the Calculation
Date, then the calculation agent will determine the CD Rate to
be the arithmetic mean of the following secondary market offered
rates for negotiable certificates of deposit of major United
States money-center banks of the highest credit standing with a
remaining maturity closest to the Index Maturity designated in
the applicable pricing supplement or product supplement, and in
a denomination of U.S. $5,000,000.00: the rates offered as
of 10:00 a.m., New York City time, on that Interest
Determination Date, by three leading non-bank dealers in
negotiable U.S. dollar certificates of deposit in The City
of New York. The calculation agent, after consultation with us,
will select the three dealers referred to above. These dealers
may include one or more of the agents named on the cover of this
prospectus supplement or their affiliates.
If fewer than three dealers are quoting as mentioned above, the
CD Rate will be the CD Rate in effect on that Interest
Determination Date or, if that Interest Determination Date is
the first Interest Determination Date, the initial interest rate.
CMT Rate notes
A CMT Rate note will bear interest at an interest rate
calculated with reference to the CMT Rate and the spread or
spread multiplier, if any, as specified in the CMT Rate notes
and the applicable pricing supplement or product supplement.
Unless otherwise specified in the applicable pricing supplement
or product supplement, the “CMT Rate” for any Interest
Determination Date is the rate displayed on the Designated CMT
Moneyline Telerate Page by 3:00 p.m., New York City time,
on the Calculation Date pertaining to the Interest Determination
Date under the heading (or any successor heading) “Treasury
Constant Maturities-Federal Reserve Board Release H.15-Mondays
Approximately 3:45 p.m.”, under the column for the
Index Maturity specified in the applicable pricing supplement or
product supplement for:
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if the Designated CMT Moneyline Telerate Page is 7051 (or any
page that may replace that page), such Interest Determination
Date,
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if the Designated CMT Moneyline Telerate Page is 7052 (or any
page that may replace that page), the week, or the month, as
applicable, ended immediately preceding the week in which the
related Interest Determination Date occurs, or
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S-25
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if no page is specified, the Designated CMT Moneyline Telerate
Page is 7052 (or any page that may replace that page) and the
second bullet point immediately above applies.
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The following procedures will be used if the CMT Rate cannot be
determined as described above:
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If the above rate is no longer displayed on the relevant page,
or if not displayed by 3:00 p.m., New York City time, on
the Calculation Date, then the CMT Rate will be the Treasury
constant maturity rate, or if the applicable CMT Telerate page
is 7052 (or any page that may replace that page), the
one-week
or
one-month,
as
applicable, average rate, for the Index Maturity for the
Interest Determination Date, as published in H.15(519).
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If that rate is no longer published in H.15(519), or if not
displayed by 3:00 p.m., New York City time, on the
Calculation Date, then the CMT Rate will be the Treasury
constant maturity rate, or other United States Treasury rate, or
if the applicable CMT Telerate page is 7052 (or any page that
may replace that page), the one-week or one-month, as
applicable, average rate, for the Index Maturity for the
Interest Determination Date as may then be published by either
the Board of Governors of the Federal Reserve System or the
United States Department of the Treasury that the calculation
agent determines to be comparable to the rate formerly displayed
on the Designated CMT Telerate Page and published in H.15(519).
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If that information is no longer provided by 3:00 p.m., New
York City time, on the Calculation Date, then the calculation
agent will determine the CMT Rate to be a yield to maturity
based on the arithmetic mean of the following secondary market
offered rates for the most recently issued direct noncallable
fixed rate obligations of the United States (
Treasury
Notes
) with an original maturity of approximately the Index
Maturity and a remaining term to maturity of not less than the
Index Maturity minus one year: the rates reported as of
approximately 3:30 p.m., New York City time, on the
Interest Determination Date, by three leading primary United
States government securities dealers in The City of New York,
according to their written records. The calculation agent will
select, after consultation with us, five leading primary United
States government securities dealers and will eliminate the
highest and lowest quotations or, in the event of equality, one
of the highest and one of the lowest quotations.
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If the calculation agent cannot obtain three Treasury Note
quotations, the calculation agent will determine the CMT Rate to
be a yield to maturity based on the arithmetic mean of the
following secondary market offered rates for the most recently
issued Treasury Notes with an original maturity of the number of
years that is the next highest to the Index Maturity, a
remaining term to maturity closest to the Index Maturity and in
an amount of at least U.S. $100 million: the offered
rates as of approximately 3:30 p.m., New York City time, on
the Interest Determination Date, of three leading primary United
States government securities dealers in The City of New York,
selected using the same method described above.
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If three or four (but not five) reference dealers are quoting as
described above, then the CMT Rate will be based on the
arithmetic mean of the offered rates obtained and neither the
highest nor the lowest of those quotations will be eliminated.
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If fewer than three leading primary United States government
securities dealers selected by the calculation agent are quoting
as described above, the CMT Rate will be the CMT Rate in effect
that Interest Determination Date or, if that Interest
Determination Date is the first Interest Determination Date, the
initial interest rate.
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CMS Rate notes
A CMS Rate note will bear interest at an interest rate
calculated with reference to the CMS Rate and the spread or
spread multiplier, if any, as specified in the CMS Rate notes
and the applicable pricing supplement or product supplement.
Unless otherwise specified in the applicable pricing supplement
or product supplement, the “CMS Rate” for any Interest
Determination Date is the rate displayed on the Moneyline
Telerate Page 42276 (or any page that
S-26
may replace that page) by 11:00 a.m., New York City time,
on the Calculation Date pertaining to the Interest Determination
Date under the heading (or any successor heading) “RATES AS
AT 11:00 EST (16:00 GMT)”, under the column for
the Index Maturity specified in the applicable pricing
supplement or product supplement for that Interest Determination
Date.
The following procedures will be used if the CMS Rate cannot be
determined as described above:
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If the above rate is no longer displayed on the relevant page,
or if not displayed by 11:00 a.m., New York City time, on
the Calculation Date, then the CMS Rate will be the rate for
U.S. Dollar swaps with a maturity of the Index Maturity
designated in the applicable pricing supplement or product
supplement, expressed as a percentage, which appears on the
Reuters Screen ISDAFIX1 Page as of 11:00 a.m., New York
City time, on the Calculation Date.
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If that information is no longer displayed by 11:00 a.m.,
New York City time, on the Calculation Date, then the CMS rate
will be a percentage determined on the basis of the mid-market
semi-annual swap rate quotations provided by five leading swap
dealers in the New York City interbank market at approximately
11:00 a.m., New York City time, on the Calculation Date.
For this purpose, the semi-annual swap rate means the mean of
the bid and offered rates for the semi-annual fixed leg,
calculated on a 30/360 day count basis, of a
fixed-for-floating U.S. Dollar interest rate swap
transaction with a term equal to the Index Maturity designated
in the applicable pricing supplement or product supplement
commencing on that Interest Determination Date with an
acknowledged dealer of good credit in the swap market, where the
floating leg, calculated on an Actual/ 360 day count basis,
is equivalent to “LIBOR Moneyline Telerate” with a
maturity of three months. The calculation agent will select the
five swap dealers after consultation with us and will request
the principal New York City office of each of those dealers to
provide a quotation of its rate. If at least three quotations
are provided, the CMS Rate for that Interest Determination Date
will be the arithmetic mean of the quotations, eliminating the
highest and lowest quotations or, in the event of equality, one
of the highest and one of the lowest quotations.
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If fewer than three leading swap dealers selected by the
calculation agent are quoting as described above, the
CMS Rate will be the CMS Rate in effect on that
Interest Determination Date or, if that Interest Determination
Date is the first Interest Determination Date, the initial
interest rate.
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Federal Funds Rate notes
Federal Funds Rate notes will bear interest at an interest rate
calculated with reference to the Federal Funds Rate and the
spread or spread multiplier, if any, as specified in the Federal
Funds Rate note and the applicable pricing supplement or product
supplement.
Unless otherwise specified in the applicable pricing supplement
or product supplement, the “Federal Funds Rate” for
any Interest Determination Date is the rate on that date for
Federal Funds as published in H.15(519) under the heading
“Federal funds (effective)”, as such rate is displayed
on Moneyline Telerate Page 120, on the Calculation Date
pertaining to that Interest Determination Date.
The following procedures will be followed if the Federal Funds
Rate cannot be determined as described above:
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If the rate is not published in H.15(519) by 3:00 p.m., New
York City time, on the Calculation Date, the Federal Funds Rate
will be the rate on that Interest Determination Date, as
published in H.15 Daily Update under the heading
“Federal funds (effective)” or any successor heading
or another recognized electronic source.
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If the rate is not published in either H.15(519) or
H.15 Daily Update by 3:00 p.m., New York City time, on
the Calculation Date, then the calculation agent will determine
the Federal Funds Rate to be the arithmetic mean of the rates
for the last transaction in overnight Federal funds arranged
prior to 9:00 a.m., New York City time, on such Interest
Determination Date, by each of three leading brokers of Federal
funds transactions in New York City. The calculation agent,
after consultation with us, will
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select the three brokers referred to above. These brokers may
include one or more of the agents named on the cover of this
prospectus supplement or their affiliates.
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If fewer than three brokers selected by the calculation agent
are quoting as mentioned above, the Federal Funds Rate will be
the Federal Funds Rate in effect that Interest Determination
Date or, if that Interest Determination Date is the first
Interest Determination Date, the initial interest rate.
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Floating rate/fixed rate notes
A note may be a floating rate note for a portion of its term and
a fixed rate note for a portion of its term. In this event, the
interest rate on the note will be determined as if it were a
floating rate note and a fixed rate note for each specified
period, as set out in the applicable pricing supplement or
product supplement.
Interest rate reset
If we have the option under any note to reset the interest rate,
in the case of a fixed rate note, or to reset the spread and/or
spread multiplier, in the case of a floating rate note, we will
indicate such option in the applicable pricing supplement or
product supplement relating to such note, and, if so:
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the date or dates on which such interest rate or such spread
and/or spread multiplier, as the case may be, may be reset, each
being referred to as an optional reset date, and
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the basis or formula, if any, for such optional reset.
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We may exercise such option with respect to a note by notifying
the trustee of such exercise at least 45 but not more than
60 calendar days prior to an optional reset date for such
note, unless otherwise specified in the applicable pricing
supplement or product supplement. Not later than
40 calendar days (unless otherwise specified in the
applicable pricing supplement or product supplement) prior to
such optional reset date, the trustee will mail to the holder of
such note a notice, called the reset notice, first class,
postage prepaid, setting forth:
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our election to reset the interest rate, in the case of a fixed
rate note, or the spread and/or spread multiplier, in the case
of a floating rate note,
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such new interest rate or such new spread and/or spread
multiplier, and
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the provisions, if any, for redemption during the period from
such optional reset date to the next optional reset date or, if
there is no such next optional reset date, to the stated
maturity, if any, of such note (each such period is called a
subsequent interest period) including the date or dates on which
or the period or periods during which and the price or prices at
which such redemption may occur during such subsequent interest
period.
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Notwithstanding the above, not later than 20 calendar days
(unless otherwise specified in the applicable pricing supplement
or product supplement) prior to an optional reset date for a
note, we may, at our option, revoke the interest rate, in the
case of a fixed rate note, or the spread and/or spread
multiplier, in the case of a floating rate note, in either case
provided for in the reset notice and establish a higher interest
rate, in the case of a fixed rate note, or a higher spread
and/or spread multiplier, in the case of a floating rate note,
for the subsequent interest period commencing on such optional
reset date by mailing or causing the trustee to mail notice of
such higher interest rate or higher spread and/or spread
multiplier, as the case may be, first class, postage prepaid, to
the direct holder of such note. Such notice shall be
irrevocable. All notes with respect to which the interest rate
or spread and/or spread multiplier is reset on an optional reset
date will bear such higher interest rate, in the case of a fixed
rate note, or higher spread and/or spread multiplier, in the
case of a floating rate note.
Redemption and repurchase
Unless otherwise specified in the applicable pricing supplement
or product supplement, we will not provide any sinking fund for
your note.
Unless the applicable pricing supplement or product supplement
specifies a redemption commencement date, on which we may redeem
a note, or a repurchase date, on which a note may be repayable
at the option of the
S-28
holder, the notes will not be redeemable by us or repayable at
the option of the holder before their stated maturity.
Optional early redemption (call)
If applicable, the pricing supplement or product supplement will
indicate the terms on which the notes will be redeemable or
subject to repurchase at our option. Unless otherwise specified
in the applicable pricing supplement or product supplement,
notice of redemption or repurchase will be provided by mailing a
notice of redemption or repurchase to each holder at least
30 calendar days and not more than 60 calendar days
(unless otherwise specified in the applicable pricing supplement
or product supplement) before the date fixed for redemption or
repurchase. If not all the notes having the same terms are to be
redeemed or repurchased, as the case may be, the notes to be
redeemed or repurchased shall be selected by the trustee by a
method that the trustee deems fair and appropriate. Unless
otherwise specified in the applicable pricing supplement or
product supplement, the notes will not be subject to any sinking
fund.
Optional early redemption (put)
If applicable, the pricing supplement or product supplement will
indicate that the notes will be subject to repurchase at the
option of the holder on a date or dates prior to maturity, if
any, and at a price or prices, set forth in the applicable
pricing supplement or product supplement, together with accrued
interest to the date of repurchase.
If a note is represented by a global note, the depositary or its
nominee will be the holder of the note and therefore will be the
only entity that can exercise a right to repurchase. In order to
ensure that the depositary or its nominee will timely exercise a
right to repurchase with respect to a particular note, the
beneficial owner of such note must instruct the broker or other
direct or indirect participant through which it holds an
interest in such note to notify the depositary of its desire to
exercise a right to repurchase. Different firms have different
cut-off times for accepting instructions from their customers.
As a result, each beneficial owner should timely consult the
broker or other direct or indirect participant through which it
holds an interest in a note in order to ascertain the cut-off
time by which an instruction must be given in order for timely
notice to be delivered to the depositary.
In order for a certificated note to be repurchased, the trustee
must receive at least 30 calendar days but not more than
45 calendar days (unless otherwise specified in the
applicable pricing supplement or product supplement) prior to
the repurchase date:
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appropriate wire instructions, and
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either (a) the note with the form entitled “Option to
Elect Repurchase” on the reverse of the note duly
completed, or (b) a telegram, telex, facsimile transmission
or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc., or a
commercial bank or trust company in the United States setting
forth:
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the name of the holder of the note,
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the principal amount of the note,
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the portion of the principal amount of the note to be
repurchased,
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the certificate number or a description of the tenor and terms
of the note,
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a statement that the option to elect repurchase is being
exercised, and
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a guarantee that the note to be repaid with the form entitled
“Option to Elect Repurchase” on the reverse of the
note duly completed will be received by the trustee within five
Business Days. The trustee must actually receive the note and
form duly completed by the fifth Business Day.
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S-29
The “Option to Elect Repurchase” form on the reverse
of the note will be addressed to the Company and will
substantially read as follows:
“The undersigned registered owner of this Note hereby
irrevocably acknowledges receipt of a notice from the Company as
to the occurrence of an event which entitles the holder to opt
for optional early redemption and requests and instructs the
Company to redeem the entire principal amount of this Security,
or the portion thereof (which is $1,000.00 or an integral
multiple thereof) below designated, in accordance with the terms
of the Indenture referred to in this Note at the purchase price
indicated in the Indenture or applicable pricing supplement,
including accrued interest, if any, up to, but excluding, such
date, plus such other amounts as may be owing (as described in
the pricing supplement) to the registered Holder hereof.
Principal amount to be redeemed (in an integral multiple of
$1,000.00 if less than all):”
The signature on the form must be guaranteed by a qualified
guarantor institution with membership in an approved signature
guarantee program pursuant to
Rule
17Ad-15
under
the Securities Exchange Act of 1934; and the signature on the
form must correspond to the name written upon the face of the
note in every particular, without alteration or any change
whatsoever.
Exercise of the repurchase option by the holder of a note shall
be irrevocable. The holder of a note may exercise the repurchase
option for less than the entire principal amount of the note
provided that the principal amount of the note remaining
outstanding after repurchase is an authorized denomination. No
transfer or exchange of any note will be permitted after
exercise of a repurchase option. If a note is to be repurchased
in part, no transfer or exchange of the portion of the note to
be repurchased will be permitted after exercise of a repurchase
option. All questions as to the validity, eligibility, including
time of receipt, and acceptance of any note for repurchase will
be determined by us and our determination will be final, binding
and non-appealable.
All instructions given by indirect beneficial owners to their
banks or brokers to exercise a repurchase option will be
irrevocable. In addition, at the time any indirect beneficial
owner gives instructions to exercise a repayment option, the
indirect beneficial owner must cause the bank or broker through
which he or she owns an interest in the global note to transfer
the bank’s or broker’s interest in the global note to
the trustee.
If the repurchase option of the holder as described above is
deemed to be a “tender offer” within the meaning of
Rule
14e-1
under
the Securities Exchange Act of 1934, as amended, we will comply
with Rule
14e-1
as
then in effect to the extent applicable.
Open market purchases
We may purchase notes at any price in the open market or
otherwise. Notes not purchased by us may, at our discretion, be
held or resold or surrendered to the trustee for cancellation.
Optional early redemption for taxation reasons
Unless the applicable pricing supplement provides otherwise, we
may redeem the notes before their maturity, if any, in whole but
not in part, as provided in the accompanying prospectus under
the heading “Description of debt securities — Tax
redemption”.
Redemption of an original issue discount note
Regardless of anything in this prospectus supplement to the
contrary, if a note is an Original Issue Discount Note (other
than an index linked note), the amount payable in the event of
redemption or repayment prior to its stated maturity, if any,
will be the amortized face amount on the redemption or repayment
date, as the case may be. The amortized face amount of an
Original Issue Discount Note will be equal to (i) the issue
price plus (ii) that portion of the difference between the
issue price and the principal amount of the note that has
accrued at the yield to maturity described in the applicable
pricing supplement (computed in accordance with generally
accepted U.S. bond yield computation principles) by the
redemption or repayment date. However, in no case will the
amortized face amount of an Original Issue Discount Note exceed
its principal amount.
S-30
Settlement mechanics
The settlement mechanics applicable to notes calling for
physical settlement will be described in the applicable pricing
supplement.
Covenants
The covenants contained in the indenture will apply to the notes
unless otherwise specified in any applicable pricing supplement.
These covenants are in summary:
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to pay principal, any premium, interest in accordance with the
terms of the notes,
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to maintain a paying agent or office, and if it acts as its own
paying agent to hold moneys in trust,
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to deliver to the trustee a compliance certificate within
120 days after the end of each fiscal year, and
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to preserve its existence (subject to exceptions).
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Other provisions
Any provisions with respect to the notes, including the
specification and determination of one or more interest rate
bases, the calculation of the interest and/or principal payable
on the notes, any redemption, extension or repayment provisions,
or any other provisions relating to the notes, may be modified
or supplemented to the extent not inconsistent with the terms of
the indenture, so long as the provisions are specified in the
notes and in the applicable pricing supplement.
Further issues
The issuer may, from time to time and without the consent of the
holders of the notes, create and issue notes of a series having
the same ranking and the same interest rate, maturity, if any,
and other terms as any tranche of notes issued hereunder, except
for the initial offering price and issue date and, in some
cases, the first interest payment date (a
further issue
).
Any such additional notes having such similar terms will,
together with the notes of that tranche, constitute a single
series of notes under the indenture.
Payment of additional amounts
Unless otherwise specified in any applicable pricing supplement,
if any deduction or withholding for any current or future taxes
or governmental charges of Norway or the United States of
America is required, we have agreed to pay additional amounts as
described in the accompanying prospectus under the heading
“Description of debt securities – Payment of
additional amounts”.
Defeasance
We may discharge or defease the notes as described in the
accompanying prospectus under the heading “Description of
debt securities — Defeasance”.
Paying agents, transfer agents and exchange rate agent
Unless otherwise specified in the applicable pricing supplement,
Citibank, N.A. will be the registrar, paying agent, transfer
agent, calculation agent, determination agent and the exchange
rate agent for the notes. Dexia Banque Internationale à
Luxembourg, société anonyme, will be the Luxembourg
paying agent for the notes. As long as the notes are listed on
the Luxembourg Stock Exchange, we will maintain a paying agent
and transfer agent in Luxembourg.
Important currency information
Purchasers are required to pay for each note in the specified
currency specified by us for that note. If requested by a
prospective purchaser of notes denominated in a currency other
than U.S. dollars on or prior to the fifth day preceding
the delivery of the notes, the agent soliciting the offer to
purchase may, at its discretion,
S-31
arrange for the conversion of U.S. dollars into such
specified currency to enable the purchaser to pay for such
notes. Each such conversion will be made by the relevant agent
on such terms and subject to such conditions, limitations and
charges that the agent may from time to time establish in
accordance with its regular foreign exchange practice, and any
cost associated with such conversion will be solely for the
account of the purchaser. We disclaim any responsibility for any
such transaction. The obligations of each purchaser to us will
be absolute regardless of any such conversion arrangement.
The notes will be governed by and construed in accordance with
the laws of the State of New York, except that matters relating
to the authorization and execution by us of the indenture and
the debt securities issued under the indenture will be governed
by the laws of Norway. If an action based on the notes were
commenced in a court in the United States, it is likely that the
court would grant judgment relating to the notes only in
U.S. dollars. It is not clear, however, whether, in
granting judgment, the rate of conversion into U.S. dollars
would be determined with reference to the date of default, the
date judgment is rendered or some other date. New York statutory
law provides, however, that a court will render a judgment in
the foreign currency of the underlying obligations and that the
judgment will be converted into U.S. dollars at the rate of
exchange prevailing on the date of the entry of the judgment.
S-32
SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES
Foreign currency notes will not be sold in, or to residents of,
the country issuing the specified currency in which particular
notes are denominated.
The information described in this
prospectus supplement, including the information relating to
foreign currency transactions, is directed to prospective
purchasers who are United States residents. We disclaim any
responsibility to advise prospective purchasers with respect to
any matters that may affect the purchase, sale, holding or
receipt of payments of principal of and interest on the notes.
Such persons should consult their own financial and legal
advisors about the risks entailed by an investment in the notes
and the suitability of their investment in the notes in light of
their particular circumstances. The notes are not an appropriate
investment for investors who are unsophisticated with respect to
the particular type of notes we may offer including foreign
currency transactions or transactions involving the type of
index or formula used to determine the amount payable or
otherwise. See “Risk factors — Risks related to the
notes — Foreign currency risks”.
Investors
should also consider carefully, among other factors, the matters
described in the documents incorporated herein by reference as
well as the matters described below, and any other matter
described in any applicable pricing supplement.
The applicable pricing supplement relating to notes that are
denominated in, or the payment of which is determined with
reference to, a specified currency other than U.S. dollars
or relating to currency indexed notes will contain information
concerning historical exchange rates for such specified currency
against the U.S. dollar or other relevant currency, a
description of such currency or currencies and any exchange
controls affecting such currency or currencies. Information
concerning exchange rates is furnished as a matter of
information only and should not be regarded as indicative of the
range of or trend in fluctuations in currency exchange rates
that may occur in the future.
Payment currency
Except as described in the applicable pricing supplement or
product supplement, if payment on a note is required to be made
in a specified currency other than U.S. dollars and such
currency is unavailable in our good faith judgment due to the
imposition of exchange controls or other circumstances beyond
our control, or is no longer used by the government of the
country issuing such currency or for the settlement of
transactions by public institutions of or within the
international banking community, then all payments with respect
to such note shall be made in U.S. dollars until such
currency is again available or so used. Unless we otherwise
specify in the applicable pricing supplement or product
supplement, the amount so payable on any date in such foreign
currency shall be converted into U.S. dollars at a rate
determined by the exchange rate agent on the basis of the market
exchange rate on the second Business Day prior to such payment,
or, if the market exchange rate is not then available, the most
recently available market exchange rate or as otherwise
determined by us in good faith if the foregoing is
impracticable. Any payment in respect of such note made under
such circumstances in U.S. dollars will not constitute an
event of default under the indenture.
Unless we otherwise specify in the applicable pricing supplement
or product supplement, the notes that are denominated in, or the
payment of which is determined by reference to, a specified
currency other than U.S. dollars, will provide that, in the
event of an official redenomination of a foreign currency,
including, without limitation, an official redenomination of a
foreign currency that is a composite currency, our obligations
with respect to payments on notes denominated in such currency
shall, in all cases, be regarded immediately following such
redenomination as providing for the payment of that amount of
redenominated currency representing the amount of such
obligations immediately before such redenomination. Such notes
will not provide for any adjustment to any amount payable under
the notes as a result of:
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change in the value of a foreign currency due solely to
fluctuations in exchange rates, or
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any redenomination of any component currency of any composite
currency, unless such composite currency is itself redenominated.
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If the official unit of any component currency is altered by way
of combination or subdivision, the number of units of that
currency as a component shall be divided or multiplied in the
same proportion. If two or more component currencies are
consolidated into a single currency, the amounts of those
currencies as components
S-33
shall be replaced by an amount in such single currency. If any
component currency is divided into two or more currencies, the
amount of that original component currency as a component shall
be replaced by the amounts of such two or more currencies having
an aggregate value on the date of division equal to the amount
of the former component currency immediately before such
division.
All determinations referred to above made by the exchange rate
agent shall be at its sole discretion, except to the extent
expressly provided herein that any determination is subject to
our approval. In the absence of manifest error, such
determinations shall be conclusive for all purposes and binding
on holders of the notes and the exchange rate agent shall have
no liability therefor.
Exchange rates and exchange controls
If you invest in foreign currency notes, significant risks that
are not associated with a similar investment in a security
denominated in U.S. dollars may apply to your investment.
These risks include, for example, the possibility of significant
changes in rates of exchange between the U.S. dollar and
the various foreign currencies or composite currencies and the
possibility of the imposition or modification of foreign
exchange controls by either the U.S. or foreign
governments. These risks depend on economic and political events
over which we have not control, including the supply of and
demand for the relevant currencies. In recent years, rates or
exchange between the U.S. dollar and some foreign
currencies have been highly volatile, and volatility of this
kind may be expected in the future. Fluctuations in any
particular exchange rate that have occurred in the past are not
necessarily indicative, however, of fluctuations in the rate
that may occur during the term of any note. Depreciation of a
specified currency other that U.S. dollars against the
U.S. dollar would result in a decrease in the effective
yield of the note below its coupon rate, and could result in a
loss to you on a U.S. dollar basis.
Governments have imposed from time to time and may in the future
impose exchange controls which could affect exchange rates as
well as the availability of a specified foreign currency at a
note’s maturity. Even if there are no actual exchange
controls, the specified currency for any particular note might
not be available at the note’s maturity. In that event, we
will repay in U.S. dollars on the basis of the most
recently available noon buying rate in The City of New York for
cable transfers for the specified currency as quoted by the
Federal Reserve Bank of New York. See “Description of debt
securities — Payment of principal and interest”
for a discussion of these payment procedures.
Currently, there are limited facilities in the United States for
conversion of U.S. dollars into foreign currencies, and
vice versa. Accordingly, payments on notes made in a specified
currency other than U.S. dollars are likely to be made from
an account with a bank located in the country issuing the
specified currency. See “Description of debt
securities — Payment of principal and interest”
for a discussion of these payment procedures.
Unless otherwise specified in the applicable pricing supplement
or product supplement, foreign currency notes will not be sold
in, or to residents of, the country issuing the specified
currency in which particular notes are denominated.
S-34
TAXATION IN THE UNITED STATES
For a description of certain material U.S. Federal income
tax consequences to beneficial holders of the notes, see
“Taxation in the United States” in the
accompanying prospectus.
TAXATION IN NORWAY
For a description of the material tax consequences in Norway of
owning the notes, see “Taxation in Norway” in the
accompanying prospectus.
VALIDITY OF NOTES
The validity of the notes under New York law has been passed
upon by Allen & Overy LLP, London, England. The validity of
the notes under Norwegian law has been passed upon by Jens Olav
Feiring, Esq. Mr. Feiring is General Counsel of
Eksportfinans. From time to time, Allen & Overy LLP performs
legal services for Eksportfinans. Sullivan & Cromwell LLP,
London, England, has advised the agents as to certain legal
matters.
S-35
SUPPLEMENTAL PLAN OF DISTRIBUTION
ABN AMRO Bank N.V., Banc of America Securities Limited, Banc of
America Securities LLC, Barclays Bank PLC, Barclays
Capital Inc., Bear, Stearns & Co. Inc., Bear, Stearns
International Limited, BNP Paribas Securities Corp., Citigroup
Global Markets Inc., Citigroup Global Markets Limited,
Commerzbank Capital Markets Corp., Credit Suisse Securities
(Europe) Limited, Credit Suisse Securities (USA) LLC, Daiwa
Securities SMBC Europe Limited, Deutsche Bank AG, London Branch,
Deutsche Bank Securities Inc., Dresdner Bank AG London Branch,
FTN Financial Securities Corp., Goldman, Sachs & Co.,
Goldman Sachs International, IXIS Securities North America Inc.,
Jefferies and Company, Inc., J.P. Morgan Chase & Co., J.P.
Morgan Securities Ltd., Lehman Brothers Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Mitsubishi UFJ
Securities International plc, Mizuho International plc, Morgan
Stanley & Co. Incorporated, Morgan Stanley & Co.
International Limited, Nomura International plc, Nomura
Securities International, Inc., Nordea Bank Danmark A/S, The
Toronto-Dominion Bank, UBS Limited, and Wachovia Capital
Markets, LLC, whom we call the
agents
, and we have
entered into a distribution agreement dated as of June 2,
2004, as amended December 21, 2005, with respect to the
notes. The agents have agreed to use their reasonable efforts to
solicit offers to purchase the notes if we satisfy the
conditions specified in the distribution agreement. We have the
right to accept offers to purchase notes and may reject any
proposed purchase of the notes. The agents may also reject any
offer to purchase notes. We will pay the agents a commission on
any notes sold through the agents. The commission will range
from 0.125% to 0.750% of the principal amount of the notes
depending on the maturity of the notes; provided, however, that
commissions with respect to notes with a stated maturity of more
than 30 years will be negotiated between us and the
applicable agent at the time of sale.
We may also sell notes to agents who will purchase the notes as
principals for their own accounts. Any sale of this kind will be
made at a price equal to the issue price specified in the
applicable pricing supplement, less a discount. Unless otherwise
stated, the discount will equal the applicable commission on an
agency sale of notes of the same maturity. Any notes the agents
purchase as principals may be resold at the market price or at
other prices determined by the agents at the time of resale.
The agents may resell any notes they purchase to other brokers
or dealers at a discount which may include all or part of the
discount the agents received from us. If all the notes are not
sold at the initial offering price, the agents may change the
offering price and the other selling terms.
We may sell notes directly on our own behalf. No commission will
be paid on any notes sold directly by us. In addition, we have
reserved the right to accept offers to purchase notes through
additional agents on substantially the same terms and
conditions, including commission rates, as would apply to
purchases of notes under the distribution agreement referred to
above. We have also reserved the right to appoint additional
agents to solicit offers to purchase notes. Additional agents
may accede from time to time to the distribution agreement. Any
additional agents will be named in the applicable pricing
supplement.
The agents, whether acting as agents or principals, may be
deemed to be “underwriters” within the meaning of the
U.S. Securities Act of 1933. We have agreed to indemnify
the several agents against certain liabilities, including
liabilities under the U.S. Securities Act of 1933.
The agents may sell to dealers who may resell to investors, and
the agents may pay all or part of the discount or commission
they receive from us to the dealers. These dealers may be deemed
to be “underwriters” within the meaning of the
U.S. Securities Act of 1933.
The notes are a new issue of securities with no established
trading market and are not expected to be listed on any
securities exchange in the United States. Application has been
made for notes issued pursuant to this prospectus supplement to
be admitted to trading on the Luxembourg Stock Exchange’s
regulated market and to be listed on the Official List of the
Luxembourg Stock Exchange. We will specify in the applicable
pricing supplement or product supplement whether the notes will
be listed on the Luxembourg Stock Exchange or another securities
exchange or will be unlisted. We do not know how liquid the
trading market for the notes will be.
We estimate that our share of the total expenses of the
offering, excluding underwriting discounts and commissions, will
be approximately $505,000, representing approximately $400,000
in legal fees, $55,000 in
S-36
accounting fees, $30,000 in printing costs, and $20,000 in
trustee and agency fees. As a “well-known seasoned
issuer” (as defined in Rule 405 under the Securities
Act), upon each offering of debt securities made under this
prospectus supplement we will pay a registration fee to the
Securities and Exchange Commission at the prescribed rate,
currently U.S.$107.00 per $1,000,000 of offering price. We will
offset against these fees an aggregate amount of U.S.$7,067.48
representing registration fees paid in respect of unsold
securities previously registered on our Registration Statement
on Form
F-3
(No.
333-112973).
In connection with the offering, the agents may purchase and
sell notes in the open market. These transactions may include
short sales, stabilizing transactions, purchases to cover
positions created by short sales and penalty bids:
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Short sales involve the sale by the agents of a greater number
of notes than they are required to purchase in the offering.
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•
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Stabilizing transactions consist of certain bids or purchases of
notes made for the purpose of preventing or retarding a decline
in the market price of the notes while the offering is in
progress.
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•
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Syndicate covering transactions involve purchases of the notes
in the open market after the distribution has been completed in
order to cover syndicate short positions.
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•
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Penalty bids permit the agents to reclaim a selling concession
from a syndicate member when the notes originally sold by the
syndicate member are purchased in a syndicate covering
transaction or stabilizing purchase.
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Any of these transactions may have the effect of preventing or
retarding a decline in the market price of the notes. They may
also cause the price of the notes to be higher than it would
otherwise be in the absence of these transactions. The agents
may conduct these transactions in the over-the-counter market or
otherwise. If the agents commence any of these transactions, the
agents may discontinue them at any time.
In the ordinary course of their business, the agents and some of
their affiliates have engaged in, and may in the future engage
in, investment and commercial banking transactions and financial
advisory services with us and some of our affiliates.
Notes offered outside the United States
If the applicable pricing supplement indicates that any of the
notes will be offered on a global basis, those registered global
securities will be offered for sale in those jurisdictions
outside of the United States where it is legal to make offers
for sale of those securities.
As further described in “Selling restrictions” below,
each agent has represented and agreed, and any other agent
through which we may offer these securities on a global basis
will represent and agree, that it will comply, to the best of
its knowledge in good faith and on reasonable grounds after
making all reasonable investigations, with all applicable laws
and regulations in force in any jurisdiction outside the United
States in which it purchases, offers, sells or delivers the
securities or possesses or distributes the applicable pricing
supplement or product supplement, this prospectus supplement or
the accompanying prospectus and will obtain any consent,
approval or permission required by it for the purchase, offer or
sale by it of the securities under the laws and regulations in
force in any jurisdiction outside the United States to which it
is subject or in which it makes purchases, offers or sales of
the securities, and we shall not have responsibility for the
compliance of the agents with the applicable laws and
regulations or obtaining any required consent, approval or
permission.
Purchasers of any securities offered on a global basis may be
required to pay stamp taxes and other charges in accordance with
the laws and practices of the country of purchase in addition to
the issue price set forth on the cover page hereof.
S-37
Selling restrictions
No action has been or will be taken in any jurisdiction, except
in the United States, that would permit a public offering of the
notes, or the possession, circulation or distribution of this
prospectus or any other material relating to this offering or
the notes, in any jurisdiction where action for that purpose is
required.
Each agent has agreed that it will comply, to the best of its
knowledge in good faith and on reasonable grounds after making
all reasonable investigations, with all applicable securities
laws and regulations in force in any jurisdiction in which it
purchases, offers, sells or delivers notes or possesses or
distributes this prospectus supplement and will obtain any
consent, approval or permission required by it for the purchase,
offer, sale or delivery by it of notes under the laws and
regulations in force in any jurisdiction to which it is subject
or in which it makes such purchases, offers, sales or deliveries
and neither we nor any of the agents shall have any
responsibility therefor.
Other than with respect to the United States, neither we nor any
of the agents represent that the notes may at any time lawfully
be sold in compliance with any applicable registration or other
requirements in any jurisdiction, or pursuant to any exemption
available thereunder, or assume any responsibility for
facilitating such sale.
Relevant agents will be required to comply with such other
restrictions as we and the relevant agent shall agree.
In relation to each member state of the European Economic Area
which has implemented the Prospectus Directive (each, a
Relevant Member State
), each agent, on behalf of itself
and each of its affiliates, has severally represented and
agreed, or will severally represent and agree, that with effect
from and including the date on which the Prospectus Directive is
implemented in that Relevant Member State (the
Relevant
Implementation Date
), it has not made and will not make an
offer of notes to the public in that Relevant Member State,
except that it may, with effect from and including the Relevant
Implementation Date, make an offer of notes to the public in
that Relevant Member State:
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(i)
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in the period beginning on the date of publication of a
prospectus in relation to those notes that has been approved by
the competent authority in that Relevant Member State or, where
appropriate, approved in another Relevant Member State and
notified to the competent authority in that Relevant Member
State, all in accordance with the Prospectus Directive and
ending on the date which is 12 months after the date of
that publication;
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(ii)
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at any time to legal entities which are authorized or regulated
to operate in the financial markets or, if not so authorized or
regulated, whose corporate purpose is solely to invest in
securities;
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(iii)
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at any time to any legal entity which has two or more of
(1) an average of at least 250 employees during the
last financial year (2) a total balance sheet of more than
€
43,000,000 and
(3) an annual net turnover of more than
€
50,000,000, as
shown in its last annual or consolidated accounts; or
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(iv)
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at any time in any other circumstances which do not require the
publication by the Issuer of a prospectus pursuant to
Article 3 of the Prospectus Directive.
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For the purposes of this provision, the expression an
“offer of notes to the public” in relation to any
notes in any Relevant Member State means the communication in
any form and by any means of sufficient information on the terms
of the offer and the notes to be offered so as to enable an
investor to decide to purchase or subscribe the notes, as the
same may be varied in that member state by any measure
implementing the Prospectus Directive in that member state and
the expression
Prospectus Directive
means Directive
2003/71/EC and includes any relevant implementing measure in
each Relevant Member State.
United Kingdom
In connection with any offering of the notes, each agent, on
behalf of itself and each of its affiliates, has severally
represented and agreed, or will severally represent and agree,
that:
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(i)
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in relation to any notes which have a maturity of less than one
year, (a) it is a person whose ordinary activities involve
it in acquiring, holding, managing or disposing of investments
(as principal or agent)
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for the purposes of its business and (b) it has not offered
or sold and will not offer or sell any notes other than to
persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or
as agent) for the purposes of their businesses or who it is
reasonable to expect will acquire, hold, manage or dispose of
investments (as principal or agent) for the purposes of their
businesses where the issue of the notes would otherwise
constitute a contravention of Section 19 of the Financial
Services and Markets Act 2000 (the
FSMA
) by the issuer;
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(ii)
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it has only communicated or caused to be communicated and will
only communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning
of section 21 of the FSMA) received by it in connection
with the issue or sale of any note in circumstances in which
section 21(1) of the FSMA does not apply to the issuer; and
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(iii)
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it has complied and will comply with all applicable provisions
of the FSMA with respect to anything done by it in relation to
the notes in, from or otherwise involving the United Kingdom.
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Japan
The notes have not been and will not be registered under the
Securities and Exchange Law of Japan (Law No. 25 of 1948 as
amended) (the
SEL
). Each agent, on behalf of itself and
each of its affiliates, has severally represented and agreed, or
will severally represent and agree, that, in connection with
this offering, it will not offer or sell any notes, directly or
indirectly, in Japan or to, or for the benefit of, any resident
of Japan (which term as used herein means any person resident in
Japan, including any corporation or other entity organized under
the laws of Japan) or to others for reoffering or resale,
directly or indirectly in Japan or to a resident of Japan,
except pursuant to an exemption from the registration
requirements of, and otherwise in compliance with, the SEL and
any other applicable laws, regulations and ministerial
guidelines of Japan.
France
The prospectus supplement is not being distributed in the
context of a public offer in France within the meaning of
Article L.
411-1
of the French Monetary and Financial Code (
Code
Monétaire et Financier
), and has not been submitted to
the
Autorité des Marchés Financiers
for prior
approval.
The issuer and each of the agents, on behalf of itself and each
of its affiliates, has severally represented and agreed, or will
severally represent and agree, that either:
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(i)
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it has only made and will only make an offer of notes to the
public (
appel public à l’épargne
) in
France in the period beginning (a) when a prospectus in
relation to those notes has been approved by the
Autorité des marchés financiers
(the
AMF
), on the date of its publication, or (b) when a
prospectus has been approved by the competent authority of
another Member State of the European Economic Area which has
implemented the EU Prospectus Directive 2003/71/ EC, on the date
of notification of such approval to the AMF, and ending at the
latest on the date which is 12 months after the date of the
approval of such prospectus, all in accordance with articles
L.412-1 and L.621-8 of the French
Code monétaire et
financier
and the
Règlement général
of
the AMF; or
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(ii)
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it has not offered or sold, and will not offer or sell, directly
or indirectly, notes to the public in France, and it has not
distributed or caused to be distributed, and will not distribute
or cause to be distributed to the public in France, the
prospectus supplement or any other offering materials relating
to the notes and such offers, sales and distributions have only
been and will only be made in France to (a) providers of
investment services relating to portfolio management for the
account of third parties, or (b) qualified investors
(
investisseurs qualifiés
), or both, each as defined
in, and in accordance with, articles L.411-1, L.411-2, and
D.411-1 of the French
Code monétaire et financier
.
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Recipients of this prospectus supplement are advised that it is
not to be further distributed or reproduced (in whole or in
part) in France, and that the prospectus supplement has been
distributed on the undertaking that such recipients will only
participate in the issue or sale of the notes for their own
account and undertake not to transfer,
S-39
directly or indirectly, the notes to the public in France other
than in compliance with Articles L. 411-1,
L. 411-2, L. 412-1 and L. 621-8 of the French
Monetary and Financial Code.
The Netherlands
In connection with any offering of the notes, each agent, on
behalf of itself and each of its affiliates, has severally
represented and agreed, or will severally represent and agree,
that any notes with a maturity of less than 12 months and a
denomination of less than
€
50,000 will only
be offered in The Netherlands in circumstances where another
exemption or a dispensation from the requirement to make a
prospectus publicly available has been granted under
Article 4 of the Securities Transaction Supervision Act
1995 (
Wet toezicht effectenverkeer 1995
).
Hong Kong
The issuer and each of the agents, on behalf of itself and each
of its affiliates, has severally represented and agreed, or will
severally represent and agree, that:
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(i)
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it has not offered or sold and will not offer or sell in Hong
Kong, by means of any document, any notes other than (a) to
persons whose ordinary business is to buy or sell shares or
debentures (whether as principal or agent), or (b) to
“professional investors” as defined in the Securities
and Futures Ordinance (Cap. 571) of Hong Kong and any rules made
under that Ordinance, or (c) in other circumstances which
do not result in the document being a “prospectus” as
defined in the Companies Ordinance (Cap. 32) of Hong Kong
or which do not constitute an offer to the public within the
meaning of that Ordinance; and
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(ii)
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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 Securities
and Futures Ordinance and any rules made under that Ordinance.
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Singapore
This prospectus has not been registered as a prospectus with the
Monetary Authority of Singapore under the Securities and Futures
Act, Chapter 289 of Singapore (the
SFA
).
Accordingly, the notes may not be offered or sold or made the
subject of an invitation for subscription or purchase nor may
this prospectus or any other document or material in connection
with the offer or sale or invitation for subscription or
purchase of any notes be circulated or distributed, whether
directly or indirectly, to any person in Singapore other than
(a) to an institutional investor pursuant to
Section 274 of the SFA, (b) to a relevant person, or
any person pursuant to Section 275(1A) of the SFA, and in
accordance with the conditions specified in Section 275 of
the SFA, or (c) pursuant to, and in accordance with the
conditions of, any other applicable provision of the SFA.
Each of the following relevant persons specified in
Section 275 of the SFA which has subscribed or purchased
notes, namely a person who is:
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(i)
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a corporation (which is not an accredited investor) 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
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(ii)
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a trust (where the trustee is not an accredited investor) whose
sole purpose is to hold investments and each beneficiary is an
accredited investor,
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S-40
should note that shares, debentures and units of shares and
debentures of that corporation or the beneficiaries’ rights
and interest in that trust shall not be transferable for
6 months after that corporation or that trust has acquired
the notes under Section 275 of the SFA except:
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(a)
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to an institutional investor under Section 274 of the SFA
or to a relevant person, or any person pursuant to
Section 275(1A) of the SFA, and in accordance with the
conditions, specified in Section 275 of the SFA;
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(b)
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where no consideration is given for the transfer; or
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(c)
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by operation of law.
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S-41
LISTING AND GENERAL INFORMATION
Application has been made for permission to admit the notes to
trading on the Luxembourg Stock Exchange’s regulated market
and to list the notes on the Official List of the Luxembourg
Stock Exchange. In connection with the listing application, the
Articles of Association of Eksportfinans and a legal notice
relating to the issuance of the notes have been deposited before
listing with the
Registre du Commerce et des
Sociétés à Luxembourg
, where copies of the
documents may be obtained upon request. So long as any notes
listed on the Luxembourg Stock Exchange are outstanding, copies
of the above documents, together with this prospectus
supplement, the accompanying prospectus, any relevant product
supplement, the indenture, any other material agreement relating
to the issuance and distribution of the notes, our current
annual report (including audited financial statements) and
quarterly or other periodic reports incorporated by reference in
the accompanying prospectus, as well as all future annual
reports (including audited financial statements), quarterly or
other periodic reports incorporated by reference in the
accompanying prospectus, will be made available free of charge
at the main office of Kredietbank S.A. Luxembourgeoise in
Luxembourg. As the parent company, Eksportfinans conducts its
operations directly and through its only subsidiary,
Kommunekreditt. We do not publish any non-consolidated financial
statements. Kredietbank S.A. Luxembourgeoise will act as
intermediary in Luxembourg between us and the holders of the
notes so long as the notes remain in global form. As long as the
notes are listed on the Luxembourg Stock Exchange, we will
maintain a listing agent in Luxembourg. The initial listing
agent in Luxembourg is Kredietbank S.A. Luxembourgeoise.
The documents incorporated by reference in the accompanying
prospectus, copies of the annual reports, other periodic
reports, this prospectus supplement and accompanying prospectus
and all relevant pricing supplements and product supplements
will be available free of charge at the main office of
Kredietbank S.A. Luxembourgeoise in Luxembourg.
Other than as disclosed or contemplated in this prospectus
supplement or the accompanying prospectus or in the documents
incorporated by reference in these documents, there has been no
material adverse change in our financial position since
December 31, 2005, the date of our last audited financial
statements.
Other than as disclosed or contemplated in this prospectus
supplement or the accompanying prospectus or in the documents
incorporated by reference in these documents, neither we nor any
of our subsidiaries is involved in litigation, arbitration or
administrative proceedings relating to claims or amounts that
are material in the context of the issue of the notes.
Resolutions relating to the issue and sale of the notes were
adopted by our board of directors on February 16, 2006.
If specified in the applicable pricing supplement or product
supplement, notes may, when issued, be accepted for clearance
through DTC, Clearstream, Luxembourg, Euroclear or such other
clearing systems as are specified in the applicable pricing
supplement or product supplement and, in the case of notes
listed on the Luxembourg Stock Exchange, acceptable to the
Luxembourg Stock Exchange.
We have given an undertaking in connection with the listing of
any notes on the Luxembourg Stock Exchange to the effect that,
so long as any such notes remain outstanding and listed on such
exchange, in the event of any material adverse change in our
business or financial position that is not reflected in this
prospectus supplement and the accompanying prospectus as then
amended or supplemented (including the documents incorporated by
reference), we will prepare an amendment or supplement to this
prospectus supplement or publish a new document for use with any
subsequent offering and listing of any notes by us.
The Luxembourg Stock Exchange takes no responsibility for the
contents of this document, makes no representation as to its
accuracy or completeness and expressly disclaims any liability
whatsoever for any loss howsoever arising from or in reliance
upon the whole or any part of the contents of this prospectus
supplement or the accompanying prospectus.
S-42
GLOSSARY
Set forth below are definitions of some of the terms used in
this prospectus supplement and not defined in the attached
prospectus.
Bond equivalent yield
means a yield calculated in
accordance with the following formula and expressed as a
percentage:
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D × N
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Bond equivalent yield
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=
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×
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100
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360 – (D × M)
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where “D” refers to the applicable annual rate for
Treasury bills, quoted on a bank discount basis and expressed as
a decimal, “N” refers to 365 or 366, as the case may
be, and “M” refers to the actual number of days in the
interest period for which interest is being calculated.
Business Day
means for any note, a day which meets the
following applicable requirements:
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(i)
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with respect to any note, any day that is not a Saturday or
Sunday and that, in the place designated for payment of the
applicable note, is not a day on which banking institutions
generally are authorized or obligated by law or executive order
to close; and
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(ii)
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if the note is a LIBOR note, a day that is also a London
Business Day; and
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(iii)
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if the note is a EURIBOR note, a day that is also a Euro
Business Day; and
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(iv)
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if the note is denominated in euro or is a LIBOR note for which
the Index Currency is the euro, a day that is also a Euro
Business Day; and
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(v)
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if the note is denominated in a specified currency other than
euro, any day that is also not a day on which banking
institutions are authorized or required by law to close in the
Financial Center of the country issuing the specified currency.
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Calculation Date
means, with respect to any Interest
Determination Date, the date on or before which the calculation
agent is to calculate an interest rate for a floating rate note.
Unless otherwise specified in the note and the applicable
pricing supplement or product supplement, the Calculation Date
pertaining to an Interest Determination Date for a floating rate
note will be the first to occur of:
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(i)
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the tenth calendar day after that Interest Determination Date
or, if that day is not a Business Day, the next succeeding
Business Day; or
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(ii)
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the Business Day preceding the applicable interest payment date
or date of maturity, if any, redemption or repayment, of that
note, as the case may be.
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Designated CMT telerate page
means the display on the
Moneyline Telerate, Inc., or any successor service, on the page
specified in the applicable pricing supplement or product
supplement, or any other page that replaces that page on that
service for the purpose of displaying Treasury Constant
Maturities as reported in H.15(519). If no page is specified,
page 7052 (or any page that may replace that page) for the
most recent week.
Designated LIBOR page
means (i) if “LIBOR
Reuters” is designated in the applicable pricing supplement
or product supplement, the display designated as page
“LIBO” on the Reuters Monitor Money Rates Service, or
a successor nominated as the information vendor, for the purpose
of displaying the London interbank rates of major banks for the
applicable Index Currency, or (ii) if “LIBOR
Telerate” is designated in the applicable pricing
supplement or product supplement, Telerate Page 3750 (or
any page that may replace that page).
Euro business day
means any day on which the
Trans-European Automated Real-Time Gross Settlement Express
Transfer (TARGET) System is open.
Euro-zone
means the region comprised of member states of
the European Union that adopt the single currency in accordance
with the Treaty establishing the European Community, as amended
by the Treaty on European Union.
S-43
Financial Center
means the capital city of the country
issuing the specified currency, except that with respect to the
following currencies the Financial Center shall be the city
listed next to each currency:
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Currency
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Financial Center
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U.S. dollar
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The City of New York
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Australian dollar
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Sydney
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Canadian dollar
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Toronto
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South African rand
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Johannesburg
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Swiss Franc
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Zurich
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H.15(519)
means the weekly statistical publication
entitled “Statistical Release H.15(519), Selected Interest
Rates”, or any successor publication, published by the
Board of Governors of the Federal Reserve System and available
through the World Wide Web site of the Board of Governors of the
Federal Reserve System at
http://www.federalreserve.gov/releases/h15/current, or any
successor site or publication.
H.15 daily update
means the daily update of H.15 (519),
available through the World Wide Web site of the Board of
Governors of the Federal Reserve System at
http://www.federalreserve.gov/releases/h15/update, or any
successor site or publication.
Index Currency
means the currency, including composite
currencies, specified in the applicable pricing supplement or
product supplement as the currency for which LIBOR shall be
calculated. If no currency is specified, the Index Currency will
be U.S. dollars.
Index Maturity
means the period of time designated as the
representative maturity, if any, of the certificates of deposit,
the commercial paper, the Index Currency, the Treasury bills or
other instrument or obligation, respectively, by reference to
transactions in which the CD Rate, the Commercial Paper Rate,
LIBOR, EURIBOR, the Treasury Rate and the CMT Rate,
respectively, are to be calculated, as set forth in the
applicable pricing supplement or product supplement.
Interest Determination Date
means the date as of which
the interest rate for a floating rate note is to be calculated,
to be effective as of the following Interest Reset Date and
calculated on the related Calculation Date.
Unless otherwise specified in the applicable pricing supplement
or product supplement:
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(i)
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the Interest Determination Date pertaining to an Interest Reset
Date for a CD Rate note, Commercial Paper Rate note, Federal
Funds Rate note, Prime Rate note or CMT Rate note will be the
second Business Day preceding that Interest Reset Date;
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(ii)
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the Interest Determination Date pertaining to an Interest Reset
Date for a LIBOR note will be the second London Business Day
preceding that Interest Reset Date;
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(iii)
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the Interest Determination Date pertaining to an Interest Reset
Date for a EURIBOR note will be the second Euro Business Day
preceding that Interest Reset Date; and
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(iv)
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the Interest Determination Date pertaining to an Interest Reset
Date for a Treasury Rate note will be the day of the week during
which that Interest Reset Date falls on which Treasury bills of
the Index Maturity designated in the applicable pricing
supplement or product supplement are auctioned. Treasury bills
are usually sold at auction on Monday of each week, unless that
day is a legal holiday, in which case the auction is usually
held on the following Tuesday or may be held on the preceding
Friday. If, as the result of a legal holiday, an auction is held
on the preceding Friday, that Friday will be the Interest
Determination Date pertaining to the Interest Reset Date
occurring in the following week.
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S-44
Interest reset date
means the date on which a floating
rate note will begin to bear interest at the interest rate
determined as of the related Interest Determination Date. Unless
otherwise specified in the applicable note and pricing
supplement or product supplement, the Interest Reset Dates will
be:
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(i)
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in the case of floating rate notes that reset daily, each
Business Day;
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(ii)
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in the case of floating rate notes, other than Treasury Rate
notes, that reset weekly, Wednesday of each week;
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(iii)
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in the case of Treasury Rate notes that reset weekly, Tuesday of
each week;
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(iv)
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in the case of floating rate notes that reset monthly, the third
Wednesday of each month;
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(v)
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in the case of floating rate notes that reset quarterly, as
specified in the applicable pricing supplement or product
supplement;
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(vi)
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in the case of floating rate notes that reset semi-annually, the
third Wednesday of each of two months of each year specified in
the applicable pricing supplement or product supplement; and
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(vii)
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in the case of floating rate notes that reset annually, the
third Wednesday of one month of each year specified in the
applicable pricing supplement or product supplement.
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If an interest reset date for any floating rate note would
otherwise be a day that is not a Business Day, that Interest
reset date will be postponed to the next Business Day. However,
in the case of a LIBOR note or a EURIBOR note if that Business
Day is in the following calendar month, that Interest reset date
will be the preceding Business Day. If a treasury bill auction,
as described in the definition of interest determination date,
will be held on any day that would otherwise be an interest
reset date for a treasury rate note, then that Interest reset
date will instead be the Business Day immediately following that
auction date.
London Business Day
means any day on which dealings in
deposits in the index currency are transacted in the London
interbank market.
Money market yield
means a yield calculated in accordance
with the following formula and expressed as a percentage:
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D × 360
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Money market yield
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=
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×
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100
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360 – (D × M)
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where “D” refers to the annual rate for commercial
paper, quoted on a bank discount basis and expressed as a
decimal and “M” refers to the actual number of days in
the applicable interest reset period for which interest is being
calculated.
Reuters screen USPRIME1 page
means the display on the
Reuters Monitor Money Rates Service on the page designated as
“USPRIME1”, or any other page that replaces that page
on that service for the purpose of displaying prime rates or
base lending rates of major United States banks.
Telerate page 56, telerate page 57
,
telerate
page 120, telerate page 248
and
telerate
page 3750
mean the displays designated on Moneyline
Telerate, Inc. as Page 56, Page 57, Page 120,
Page 248 or Page 3750, or any page that replaces
either Page 56, Page 57, Page 120, Page 248
or Page 3750 on that service, or another service that is
nominated as the information vendor, for the purpose of
displaying the applicable Treasury bill, federal funds LIBOR or
EURIBOR rates.
S-45
ANNEX A: FORM OF PRICING SUPPLEMENT
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PRICING SUPPLEMENT
NO.
l
dated
l
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Pursuant to Rule 424(b)(
l
)
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to Prospectus Supplement and Prospectus dated
February 5, 2007
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Registration
No. 333-[
l
]
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relating to the Eksportfinans ASA U.S. Medium-Term Note
Program
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[Title of Notes]
This document is a pricing supplement. This pricing supplement
provides specific pricing information in connection with this
issuance of notes. Prospective investors should read this
pricing supplement together with any applicable product
supplement, the prospectus supplement and the prospectus dated
February 5, 2007 for a description of the specific terms
and conditions of the particular issuance of notes. This pricing
supplement amends and supersedes any applicable product
supplement, the accompanying prospectus supplement and
prospectus to the extent that the information provided in this
pricing supplement is different from the terms set forth in any
applicable product supplement, the prospectus supplement or the
prospectus.
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Issuer:
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Eksportfinans ASA
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Issuer rating:
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l
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Specified currency:
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l
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Principal amount:
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l
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CUSIP No.:
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l
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Common code:
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l
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ISIN:
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l
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Price to
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Discounts and
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Proceeds to us (before
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Public
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Commissions
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expenses)
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Per note:
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[100]%
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l
%
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l
%
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Total:
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$
l
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$
l
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$
l
-
l
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Agents:
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[List agents and their addresses]
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Agent acting in the capacity as indicated below:
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[ ] Agent [ ] principal
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Trade date:
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l
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Original issue date:
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l
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Stated maturity date:
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l
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Index linked note:
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[ ] Yes [ ] No
[If yes, index:]
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Asset linked note:
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[ ] Yes [ ] No
[If yes, asset:]
[If yes, determination agent:]
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Amortizing note:
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[ ] Yes [ ] No
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[Insert schedule, if applicable]
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Zero coupon:
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[ ] Yes [ ] No
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Exchangeable:
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[ ] Yes [ ] No
[If yes, insert applicable details]
[ ] optional [ ] mandatory
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Fixed rate note:
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[ ] Yes [ ] No
If so, interest rate per
annum:
l
%
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S-46
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Floating rate note:
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[ ] Yes [ ] No
[ ] commercial paper rate
[ ] LIBOR
[ ] EURIBOR
[ ] Prime rate
[ ] Treasury rate: constant maturity [ ] Yes [ ]
No
[ ] CD rate
[ ] CMT rate
[ ] CMS rate
[ ] Federal funds rate
[ ]
Other:
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Spread (+/-):
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Spread multiplier:
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Maximum interest rate limitation, if any:
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Minimum interest rate limitation if any:
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Index maturity:
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Interest reset dates:
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Interest determination dates:
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Calculation agent:
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Calculation date:
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[Include any additional LIBOR or EURIBOR terms:
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[Define]]
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Interest payment dates:
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l
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Interest accrual:
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[Define]
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Original issue discount:
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[ ] Yes [ ] No
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Issue price:
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Total amount of OID:
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Yield to maturity:
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Initial accrual period OID:
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Interest computation:
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[Define]
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Day count convention:
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[ ] Actual/360
[ ] Actual/ actual
[ ] 30/360
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Accrue to pay:
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[ ] Yes [ ] No
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Tax redemption:
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[ ] Yes [ ] No
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Extension of maturity:
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[If applicable]
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Optional redemption:
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[If applicable]
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Optional repayment date(s):
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Optional repayment price(s):
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Additional amounts payable:
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[ ] Yes [ ] No
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Authorized denomination (if other than $1,000.00 and integral
multiples thereof):
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[If applicable]
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Renewable note:
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[ ] Yes [ ] No
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Form of notes:
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[ ] Book-Entry
[ ] Certificated
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S-47
[RISK FACTORS
This section describes the most significant risks relating to
the notes. You should carefully consider whether the notes are
suited to your particular circumstances before you decide to
purchase them. In addition, we urge you to consult with your
investment, legal accounting, tax and other advisors with
respect to any investment in the
notes.]
1
[Additional disclosure to be added, as necessary].
[TAXATION
The following summary is a general description of certain United
States [and Norwegian] tax considerations relating to the
ownership and disposition of notes. It does not purport to be a
complete analysis of all tax considerations relating to the
notes. Prospective purchasers of notes should consult their tax
advisers as to the consequences of acquiring, holding and
disposing of notes under the tax laws of the country of which
they are resident for tax purposes as well as under the laws of
any state, local or foreign jurisdiction. This summary is based
upon the law as in effect on the date of this pricing supplement
and is subject to any change in law that may take effect after
such
date.]
2
[Additional disclosure to be added, as necessary].
Capitalized terms used herein without definition have the
meanings ascribed to them in the prospectus supplement and the
accompanying prospectus.
[SUPPLEMENTAL PLAN OF DISTRIBUTION
The notes are being purchased by
[
l
]
(the
agent
) as principal, pursuant to a terms agreement
dated as of
[
l
]
between the agent and us. [The agent has agreed to pay our
out-of
-pocket expenses
in connection with the issuance of the notes].
From time to time, the agent and its affiliates have engaged,
and in the future may engage, in transactions with and
performance of services for us for which they have been, and may
be, paid customary fees. In particular, the agent (or its
affiliate) is our swap counterparty for a hedge of our
obligation under the notes.]
[RESPONSIBILITY
This pricing supplement, the prospectus supplement and the
prospectus include particulars given in compliance with the
rules governing the listing of securities on the Luxembourg
Stock Exchange. The Luxembourg Stock Exchange takes no
responsibility for the contents of this document, makes no
representation as to its accuracy or completeness, and expressly
disclaims any liability whatsoever for any loss howsoever
arising from or in reliance upon the whole or any part of the
contents of this pricing supplement, any applicable product
supplement, the prospectus supplement or the prospectus. We
accept full responsibility for the accuracy of the information
contained in this pricing supplement, any applicable product
supplement, the prospectus supplement and the prospectus and,
having made all reasonable inquiries, confirm that to the best
of our knowledge and belief there are no other facts the
omission of which would make any statement contained in this
pricing supplement, any applicable product supplement, the
prospectus supplement or the prospectus misleading.
The issuer confirms that all information in this pricing
supplement provided by a third party has been accurately
reproduced and that, so far as is aware and able to ascertain
from information published by that third party, no facts have
been omitted which would render the reproduced information
inaccurate or
misleading.]
3
1
To
be added, if applicable.
2
To
be added, if applicable.
3
To
be added if the series of notes will be listed on the Luxembourg
Stock Exchange.
S-48
PROSPECTUS
EKSPORTFINANS ASA
(a Norwegian company)
Debt Securities
We may offer senior or subordinated debt securities for sale
through this prospectus. We may offer these securities from time
to time in one or more offerings.
We will provide the specific terms of the securities that we may
offer in supplements to this prospectus. You should read this
prospectus, any prospectus supplement, any applicable product
supplement and any pricing supplement carefully before you
invest. You should also consider carefully the documents
incorporated by reference in this prospectus and in any
prospectus supplement, any applicable product supplement or any
pricing supplement and in the registration statement to which
they relate, before you invest.
Investing in our securities involves risks. Carefully
consider the “Risk Factors” beginning on page 6
of our Form
20-F/A
for the year ended December 31, 2005 filed with the SEC on
August 29, 2006, as well as the risk factors included in
the applicable prospectus supplement and any applicable product
supplement or pricing supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined that this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is February 5, 2007.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the U.S. Securities and Exchange Commission (the
SEC) utilizing the “shelf” registration process. Under
the shelf registration process, we may sell the securities
described in this prospectus in one or more offerings.
This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will
provide a prospectus supplement and, if applicable, a pricing
supplement or a product supplement and terms supplement that
will contain specific information about the terms of the
securities. The prospectus supplement and, if applicable, the
pricing supplement or a product supplement and terms supplement
may add to or update or change information about us contained in
this prospectus, but it will not change the nature of or the
terms of the securities that may be offered by us. You should
read this prospectus, any prospectus supplement, any applicable
product supplement and any pricing supplement together with the
additional information described under the heading “Where
You Can Find More Information About Us”.
FORWARD-LOOKING STATEMENTS
Except for historical statements and discussions, statements
contained in this prospectus constitute “forward-looking
statements” within the meaning of Section 27A of the
U.S. Securities Act of 1933 and Section 21E of the
U.S. Securities Exchange Act of 1934. Other documents of
Eksportfinans ASA filed with or furnished to the SEC, including
those incorporated by reference in this prospectus, may also
include forward-looking statements, and other written or oral
forward-looking statements have been made and may in the future
be made from time to time by us or on our behalf.
Forward-looking statements include, without limitation,
statements concerning our financial position and business
strategy, our future results of operations, the impact of
regulatory initiatives on our operations, our share of new and
existing markets, general industry and macro-economic growth
rates and our performance relative to these growth rates.
Forward-looking statements generally can be identified by the
use of terms such as “ambition”, “may”,
“will”, “expect”, “intend”,
“estimate”, “anticipate”,
“believe”, “plan”, “seek”,
“continue” or similar terms.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that will occur in the future. These
forward-looking statements are based on current expectations,
estimates, forecasts, and projections about the industries in
which we operate, management’s beliefs and assumptions made
by management about future events. These forward-looking
statements involve known and unknown risks, uncertainties and
other factors, many of which are outside of our control, that
may cause actual results to differ materially from any future
results expressed or implied from the forward-looking statements.
Actual results, performance or events may differ materially from
those in such statements due to, without limitation:
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•
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changes in the competitive conditions, regulatory environment or
political, social or economic conditions in the markets in which
we operate,
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•
|
market, foreign exchange rate and interest rate fluctuations,
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•
|
the ability of counterparties to meet their obligations to us,
|
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•
|
the effects of, and changes in, fiscal, monetary, trade and tax
policies, and currency fluctuations,
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•
|
operational factors such as systems failure, human error, or the
failure to properly implement procedures,
|
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•
|
the effects of changes in laws, regulations or accounting
policies or practices, and
|
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•
|
various other factors beyond our control.
|
The foregoing list of important factors is not exhaustive.
Additional information regarding the factors and events that
could cause differences between forward-looking statements and
actual results is contained in our
1
SEC filings. For further discussion of these and other factors,
see “Risk Factors” in our most recent Annual Report on
Form
20-F/A
filed
with the SEC on August 29, 2006.
As a result of these and other factors, no assurance can be
given as to our future results and achievements. You are
cautioned not to put undue reliance on these forward-looking
statements, which are neither predictions nor guarantees of
future events or circumstances. We disclaim any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
circumstances or otherwise.
All subsequent written and oral forward-looking statements
attributable to us or persons acting on our behalf are similarly
qualified.
EKSPORTFINANS ASA
Eksportfinans is the only specialized export lending institution
in Norway, and we provide financing for a broad range of exports
and for the internationalization of Norwegian industry,
including the purchase of foreign assets and other
export-related activities. To a lesser extent, we also provide
financing for the purchase of Norwegian-produced capital goods
and related services within Norway. We provide both commercial
loans as well as government-supported financing. For the latter,
fixed-interest loans are available according to the OECD
Arrangement on Guidelines for Officially Supported Credits
agreed to by most of the member countries of the Organization
for Economic Cooperation and Development. At the request of the
Norwegian Government, we may also from time to time provide
other types of financing.
Our principal assets are our loans and investments, which are
financed by our equity capital and by borrowings principally in
the international capital markets. Our principal source of
income is the excess of our interest revenue on our assets over
the interest expense on our borrowings.
Our articles of association require that all of our loans be
supported by, or extended against, guarantees issued by, or
claims on,
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•
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Norway or other countries, including local, regional and foreign
authorities and government institutions, with high
creditworthiness,
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•
|
Norwegian or foreign banks or insurance companies, or
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•
|
internationally creditworthy Norwegian or foreign companies,
|
as well as certain types of collateral.
To date we have collected all loans falling due, either from the
original obligor or by exercise of guarantees, and therefore
have experienced no loan losses.
Our wholly owned subsidiary, Kommunekreditt, makes loans without
any form of credit enhancement to Norwegian municipalities,
counties and to companies that are the joint undertaking of two
or more municipalities (so called joint-municipal companies) and
to private independent companies against guarantees from
municipalities, counties or the Norwegian Government.
Kommunekreditt provides loans with fixed rates of interest from
one month to 10 years or at a floating rate of interest
both for refinancing existing loans and for new investments.
Eksportfinans was incorporated on May 2, 1962 as a limited
liability company under the laws of Norway. Our principal
executive offices are located at Dronning Mauds gate 15, N-0250
Oslo, Norway, and our telephone number is +47 22-01-22-01.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file annual reports with and furnish other information to the
SEC. You may read and copy any document filed with or furnished
to the SEC by us at the SEC’s public reference room at
100 F Street, N.E., Washington D.C. 20549. Our
SEC filings are also available to the public through the
SEC’s web site at www.sec.gov. Please call the SEC at
1-800-SEC-0330 for further information on the public reference
room in Washington D.C. and in other locations. Copies of
our SEC filings, including annual and quarterly reports, will
2
also be available free of charge at the main offices of Dexia
Banque Internationale à Luxembourg S.A. and Kredietbank
S.A. Luxembourgeoise in Luxembourg.
As allowed by the SEC, this prospectus does not contain all the
information you can find in our registration statement or the
exhibits to the registration statement. The SEC allows us to
“incorporate by reference” information into this
prospectus, which means that:
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•
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documents incorporated by reference are considered part of this
prospectus,
|
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•
|
we may disclose important information to you by referring you to
those documents, and
|
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•
|
information that we file with or furnish to the SEC after the
date of this prospectus that is incorporated by reference in
this prospectus automatically updates and supersedes information
in this prospectus.
|
Unless otherwise noted, all documents incorporated by reference
have the SEC file number 1-8427. This prospectus incorporates by
reference the documents listed below:
|
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|
|
•
|
our Annual Report on
Form
20-F/A
for
the fiscal year ended December 31, 2005 filed on
August 29, 2006,
|
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|
|
•
|
our Reports on 6-K furnished to the SEC May 5, 2006 (two on
May 5), August 14, 2006, August 15, 2006,
August 25, 2006, September 28, 2006, October 2,
2006, November 1, 2006, November 2, 2006,
November 13, 2006, November 27, 2006, December 5,
2006 and January 11, 2007,
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•
|
our Report on
Form
6-K/A
furnished to the SEC August 29, 2006, and
|
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•
|
each of the following documents that we file with or furnish to
the SEC after the date of this prospectus from now until we
terminate the offering of securities under this prospectus:
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—
|
reports filed under Section 13(a), 13(c) or 15(d) of the
Securities Exchange Act of 1934, and
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—
|
reports furnished on
Form
6-K
that
indicate that they are incorporated by reference in this
prospectus.
|
The documents incorporated by reference in this prospectus
contain important information about us and our financial
condition. You may obtain copies of these documents in the
manner described above. You may also upon written or oral
instructions request a copy of these filings, excluding
exhibits, at no cost by contacting us at:
Eksportfinans
ASA
Treasury
Department
Dronning
Mauds gate 15
N-0250
Oslo
Norway
Tel:
+47 22 01 22 01
Fax:
+47 22 01 22 06
E-mail:
funding@eksportfinans.no
FINANCIAL AND EXCHANGE RATE INFORMATION
Except as otherwise noted, we present financial statement
amounts in this prospectus and in the documents incorporated by
reference in accordance with generally accepted accounting
principles in Norway (Norwegian GAAP), which differ in
significant respects from generally accepted accounting
principles in the United States (U.S. GAAP). For a
discussion of the principal differences between Norwegian GAAP
and U.S. GAAP relevant to Eksportfinans, see Note 34
to our audited consolidated financial statements included in our
Annual Report on
Form
20-F/A
for
the fiscal year ended December 31, 2005 filed with the SEC
on August 29, 2006, which is incorporated by reference in
this prospectus.
We have derived the financial data in this prospectus for the
fiscal year ended December 31, 2005, from our audited
financial statements. We have derived all financial data in this
prospectus presenting interim figures from unaudited financial
statements.
3
As used in this prospectus, “dollar” or “$”
refer to the U.S. dollar and “kroner” or
“NOK” refer to the Norwegian krone.
ENFORCEMENT OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS
We are a Norwegian company, a majority of our directors and
management and certain of the experts named in this prospectus
are residents of Norway, and a substantial portion of their
respective assets are located in Norway. As a result, it may be
difficult or impossible for investors to effect service of
process within the United States upon us or such persons with
respect to matters arising under U.S. Federal securities
laws or to enforce against them judgments of courts of the
United States predicated upon civil liability under the
U.S. Federal securities laws. We have been advised by Jens
Olav Feiring, Esq., our Executive Vice President and General
Counsel, that there is doubt as to the enforceability in actions
in Norway, in original actions or in actions for enforcement of
judgments of U.S. courts, of liabilities predicated solely
upon the civil liability provisions of the U.S. Federal
securities laws. In addition, awards of punitive damages in
actions brought in the United States or elsewhere may be
unenforceable in Norway. We have consented to service of process
in New York City for claims based upon the indenture and the
debt securities described under “Description of debt
securities”.
4
CAPITALIZATION AND INDEBTEDNESS
The following table presents our consolidated capitalization in
accordance with Norwegian GAAP as of December 31, 2006. It
is important that you read this table together with, and it is
qualified by reference to, our audited consolidated financial
statements set forth in our Annual Report on
Form
20-F/A
filed
with the SEC on August 29, 2006.
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As of
|
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December 31, 2006
|
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Actual
|
|
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|
|
NOK
|
|
|
U.S.$
|
|
|
|
|
|
|
|
|
|
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(in millions)
|
|
|
|
|
(unaudited)
|
|
|
Short-term debt (commercial paper debt and current portion of
bond debt)*
|
|
|
69,058.6
|
|
|
|
11,040.4
|
|
|
Long-term debt (excluding current portions)
|
|
|
|
|
|
|
|
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|
|
Bonds
|
|
|
88,288.4
|
|
|
|
14,114.6
|
|
|
|
Subordinated debt
|
|
|
1,255.5
|
|
|
|
200.7
|
|
|
|
|
|
|
|
|
|
|
Total long-term debt*
|
|
|
89,543.9
|
|
|
|
14,315.3
|
|
|
|
|
|
|
|
|
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|
Capital contribution
|
|
|
609.9
|
|
|
|
97.5
|
|
|
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
Share capital (nominal value NOK 10,500 per share shares
authorized and outstanding 151,765)
|
|
|
1,593.5
|
|
|
|
254.8
|
|
|
|
Other equity
|
|
|
845.4
|
|
|
|
135.2
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Share premium reserve
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|
162.5
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26.0
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Net income for the period
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0.0
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0.0
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Total shareholders’ equity
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2,601.4
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415.9
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Total capitalization
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161,813.8
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25,869.1
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*All our debt is unsecured and unguaranteed.
For the convenience of the reader, U.S. dollar amounts
above have been translated from Norwegian krone at the rate of
NOK 6.2551 = U.S.$1.00, the noon buying rate of the Central
Bank of Norway on December 31, 2006.
USE OF PROCEEDS
Unless otherwise set forth in the related prospectus supplement
or, if applicable, the pricing supplement, we intend to use the
proceeds from the sale of securities offered through this
prospectus for general corporate purposes, which include
financing our operations and debt repayment and refinancing. The
details of any debt repayment will be described in the
applicable prospectus supplement or pricing supplement.
5
DESCRIPTION OF DEBT SECURITIES
The following is a summary of the general terms of the debt
securities. Each time that we issue debt securities pursuant to
this prospectus we will file with the SEC a prospectus
supplement and, if applicable, a pricing supplement or a product
supplement that you should read carefully. The prospectus
supplement or, if applicable, the pricing supplement or product
supplement, will contain the specific terms applicable to those
debt securities. The terms presented here, together with the
terms contained in the prospectus supplement and, if applicable,
the pricing supplement or product supplement will be a
description of the material terms of the debt securities. You
should also read the indenture under which we will issue the
debt securities, which we have filed with the SEC as an exhibit
to the registration statement of which this prospectus is a
part. The terms of the debt securities include those stated in
the indenture and those made part of the indenture by reference
to the Trust Indenture Act of 1939.
General
The debt securities will be issued under an indenture with The
Bank of New York, 101 Barclay Street, Floor 21W, New
York, New York, 10286, as trustee. The total principal amount of
debt securities that can be issued under the indenture is
unlimited. The indenture does not limit the amount of other
debt, secured or unsecured, that we may issue. We may issue the
debt securities in one or more series.
The prospectus supplement and, if applicable, the pricing
supplement or product supplement relating to any series of debt
securities being offered, will include specific terms relating
to the offering. These terms will include some or all of the
following:
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the price of the debt securities offered,
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the title of the debt securities,
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the total principal amount of the debt securities,
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the date or dates, if any, on which the principal of and any
premium on the debt securities will be payable,
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any interest rate, the date from which interest will accrue,
interest payment dates and record dates for interest payments,
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whether the debt securities are senior or subordinated debt
securities and, if subordinated, the ranking of such debt
securities in relation to other senior or subordinated debt
securities,
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the places at which payments of principal and interest are
payable,
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the terms of any optional or mandatory redemption, including the
price for the redemption,
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any sinking fund provisions,
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the terms of any payments on the debt securities that will be
payable in foreign currency or currency units or another form,
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the terms of any payments that will be payable by reference to
any index or formula,
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any changes or additions to the events of default or covenants
described in this prospectus,
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whether debt securities will be issued as discount securities
and the amount of any discount,
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whether the debt securities will be represented by one or more
global securities,
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any terms for the exchange of the debt securities for securities
of any other entity, and
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any other terms of the debt securities.
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We have the ability under the indenture to “re-open” a
previously issued series of debt securities and issue additional
debt securities of that series or establish additional terms of
the series. We are also permitted to issue debt securities with
the same terms as previously issued debt securities. Unless
otherwise indicated in the related
6
prospectus supplement or, if applicable, the pricing supplement
or product supplement, the debt securities will not be listed on
any securities exchange.
The senior debt securities will be unsecured, unsubordinated
indebtedness and will rank equally with all other unsecured and
unsubordinated debt. The subordinated debt securities will be
unsecured indebtedness and will be subordinated in right of
payment to existing and future debt as set forth in the related
prospectus supplement or, if applicable, the relevant pricing
supplement or product supplement. See “Subordination”
below.
Some of the debt securities may be sold at a substantial
discount below their stated principal amount. These debt
securities will either bear no interest or will bear interest at
a rate which at the time of issuance is below market rates.
U.S. Federal income tax consequences and other special
considerations applicable to discounted debt securities are
discussed below under “Taxation in the United States”
and may be discussed further in the prospectus supplement or, if
applicable, the pricing supplement or product supplement
relating to these debt securities.
Governing law
The debt securities and the indenture will be governed by and
construed in accordance with the laws of the State of New York,
except that matters relating to the authorization and execution
by us of the indenture and the debt securities issued under the
indenture, will be governed by the laws of Norway. There are no
limitations under the laws of Norway or our Articles of
Association on the right of non-residents of Norway to hold the
debt securities issued.
Form, exchange and transfer
Unless otherwise specified in the related prospectus supplement
or, if applicable, the related pricing supplement or product
supplement, the debt securities of each series will be issuable
in fully registered form, without coupons, in denominations of
$1,000.00 and integral multiples thereof.
Unless otherwise specified in the related prospectus supplement,
or, if applicable, the related pricing supplement or product
supplement, any payments of principal, interest and premium on
registered debt securities will be payable and, subject to the
terms of the indenture and the limitations applicable to global
securities, debt securities may be transferred or exchanged at
any office or agency we maintain for such purpose, without the
payment of any service charge except for any applicable tax or
governmental charge.
Global securities
The debt securities of a series may be issued in the form of one
or more global certificates that will be deposited with a
depositary identified in a prospectus supplement or, if
applicable, the related pricing supplement or product
supplement. Unless a global certificate is exchanged in whole or
in part for debt securities in definitive form, a global
certificate may generally be transferred only as a whole and
only to the depositary or to a nominee of the depositary or to a
successor depositary or its nominee.
Unless otherwise indicated in any prospectus supplement, or, if
applicable, the related pricing supplement or product
supplement, The Depositary Trust Company (
DTC
) will act
as depositary. Beneficial interests in global certificates will
be shown on records maintained by DTC and its participants and
transfers of global certificates will be effected only through
these records.
The following paragraphs are based on information provided to us
by DTC. DTC is a limited purpose trust company organized under
the New York Banking Law, a “banking organization”
within the meaning of the New York Banking Law, a member of the
United States Federal Reserve System, a “clearing
corporation” within the meaning of the New York Uniform
Commercial Code and a “clearing agency” registered
under Section 17A of the Exchange Act. DTC holds securities
that its participants deposit with DTC. DTC also facilitates the
clearance and recording of the settlement among its participants
of securities transactions, such as transfers and pledges, in
deposited securities through computerized records for
participant’s accounts. This eliminates the need for
physical exchange of certificates. Direct participants include
securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. Other
organizations such as securities brokers
7
and dealers, banks and trust companies that work through a
participant, either directly or indirectly use DTC’s
book-entry system. The rules that apply to DTC and its
participants are on file with the SEC.
Pursuant to DTC’s procedures, upon the sale of debt
securities represented by a global certificate to underwriters,
DTC will credit the accounts of the participants designated by
the underwriters with the principal amount of the debt
securities purchased by the underwriters. Ownership of
beneficial interests in a global certificate will be shown on
DTC’s records (with respect to participants), by the
participants (with respect to indirect participants and certain
beneficial owners) and by the indirect participants (with
respect to all other beneficial owners). The laws of some states
require that certain persons take physical delivery in
definitive form of the securities that they own. Consequently,
the ability to transfer beneficial interests in a global
certificate may be limited.
We will wire principal and interest payments with respect to
global certificates to DTC’s nominee. We and the trustee
under the indenture will treat DTC’s nominee as the owner
of the global certificates for all purposes. Accordingly, we,
the trustee and the paying agent will have no direct
responsibility or liability to pay amounts due on the global
certificates to owners of beneficial interests in the global
certificates.
It is DTC’s current practice, upon receipt of any payment
of principal or interest, to credit participants’ accounts
on the payment date according to their beneficial interests in
the global certificates as shown on DTC’s records. Payments
by participants to owners of beneficial interests in the global
certificates will be governed by standing instructions and
customary practices between the participants and the owners of
beneficial interests in the global certificates, as is the case
with securities held for the account of customers registered in
“street name”. However, payments will be the
responsibility of the participants and not of DTC, the trustee
or us.
Debt securities of any series represented by a global
certificate will be exchangeable for debt securities in
definitive form with the same terms in authorized denominations
only if:
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DTC notifies us that it is unwilling or unable to continue as
depositary, or DTC is no longer eligible to act as depositary,
and we do not appoint a successor depositary within
90 days, or
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we determine not to have the debt securities of a series
represented by global certificates and notify the trustee of our
decision.
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So long as DTC or its nominee is the registered owner and holder
of the global notes, DTC or its nominee, as the case may be,
will be considered the sole owner or holder of the debt
securities represented by the global notes for all purposes
under the indenture. Except as provided below, you, as the
beneficial owner of interests in the global notes, will not be
entitled to have debt securities registered in your name, will
not receive or be entitled to receive physical delivery of debt
securities in definitive form and will not be considered the
owner or holder of those debt securities under the indenture.
Accordingly, you, as the beneficial owner, must rely on the
procedures of DTC and, if you are not a DTC participant, on the
procedures of the DTC participants through which you own your
interest, to exercise any rights of a holder under the indenture.
Neither we, the trustee, nor any other agent of ours or agent of
the trustee will have any responsibility or liability for any
aspect of the records relating to, or payments made on account
of, beneficial ownership interests in global notes or for
maintaining, supervising or reviewing any records relating to
the beneficial ownership interests. DTC’s practice is to
credit the accounts of DTC’s direct participants with
payment in amounts proportionate to their respective holdings in
principal amount of beneficial interest in a security as shown
on the records of DTC, unless DTC has reason to believe that it
will not receive payment on the payment date. The underwriters
will initially designate the accounts to be credited. Beneficial
owners may experience delays in receiving distributions on their
debt securities because distributions will initially be made to
DTC, and they must be transferred through the chain of
intermediaries to the beneficial owner’s account. Payments
by DTC participants to you will be the responsibility of the DTC
participant and not of DTC, the trustee or us. Accordingly, we
and any paying agent will have no responsibility or liability
for: any aspect of DTC’s records relating to, or payments
made on account of, beneficial ownership interests in debt
securities represented by a global securities certificate; any
other aspect of the relationship between DTC and its
participants or the relationship between those participants and
the owners of beneficial interests in a global securities
certificate held
8
through those participants; or the maintenance, supervision or
review of any of DTC’s records relating to those beneficial
ownership interests.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants,
and by direct participants and indirect participants to
beneficial owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in
effect from time to time.
We have been informed that, under DTC’s existing practices,
if we request any action of holders of debt securities, or an
owner of a beneficial interest in a global security such as you
desires to take any action which a holder of debt securities is
entitled to take under the indenture, DTC would authorize the
direct participants holding the relevant beneficial interests to
take such action, and those direct participants and any indirect
participants would authorize beneficial owners owning through
those direct and indirect participants to take such action or
would otherwise act upon the instructions of beneficial owners
owning through them.
Payments of additional amounts
Unless the prospectus supplement or, if applicable, the pricing
supplement or product supplement for a particular series of debt
securities provides otherwise, we will make all payments on the
debt securities of that series without withholding or deduction
for any taxes or other governmental charges in effect on the
date of issuance of the debt securities of that series or
imposed in the future by or on behalf of Norway or any authority
in Norway.
In the event any Norwegian taxes or other charges are imposed on
payments on any debt security of that series held by you, we
will pay to you such additional amounts as may be necessary so
that the net amounts receivable by you after any payment,
withholding or deduction of tax or charge will equal the amounts
of principal, any interest and any premium that would have been
receivable on the debt security if there were no such payment,
withholding or deduction;
provided, however
, that the
amounts with respect to any Norwegian taxes will be payable only
to holders that are not residents in Norway for purposes of its
tax laws,
and provided further
, that we will not be
required to make any payment of any additional amounts on
account of:
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your being a resident of Norway or having some connection with
Norway (in the case of Norwegian taxes) other than the mere
holding of the debt security or the receipt of principal, any
interest, or any premium on the debt security,
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your presentation of the debt security for payment more than
30 days after the later of (1) the due date for such
payment or (2) the date we provide funds to make such
payment to the trustee,
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any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or other governmental charge,
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any tax, assessment or other governmental charge payable other
than by withholding from payments on the debt security,
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any tax, assessment or other governmental charge which would not
have been imposed or withheld if the holder had declared his or
her non-residence in Norway or made a similar claim for
exemption so that, upon making the declaration or the claim, the
holder would either have been able to avoid the tax, assessment
or charge or to obtain a refund of the tax, assessment or charge,
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any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of,
premium, if any, or any interest on, any debt security, if such
payment can be made without such withholding by any other paying
agent,
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any withholding or deduction imposed on a payment that is
required to be made pursuant to a European Union directive on
the taxation of savings or related law or regulations, or
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any combination of items above,
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9
nor shall additional amounts be paid with respect to any payment
of the principal of, premium, if any, or any interest on any
debt security to any holder who is a fiduciary, a partnership or
a beneficial owner and who is other than the sole beneficial
owner of the payment to the extent the fiduciary or a member of
the partnership or a beneficial owner would not have been
entitled to any additional amount had it been the holder of the
debt security.
Tax redemption
Unless the prospectus supplement or, if applicable, the pricing
supplement or product supplement for a particular series of debt
securities provides otherwise, we may redeem that series of debt
securities before its maturity, in whole but not in part, if, at
any time after the date of issuance of that series of
securities, as a result of any:
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amendment to, or change in, the laws of Norway or any political
subdivision of Norway, or
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change in the application or official interpretation of such
laws or regulations,
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where the amendment or change becomes effective after the date
of the issuance of the series of debt securities, we become, or
will become, obligated to pay any additional amounts as provided
above under “Payments of additional amounts” and
cannot reasonably avoid such obligation.
Before we may redeem debt securities of a particular series as
provided above, we must deliver to the trustee at least
30 days, but not more than 60 days, prior to the date
fixed for redemption:
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a written notice stating that the debt securities of a
particular series are to be redeemed, specifying the redemption
date and other pertinent information, and
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an opinion of independent legal counsel selected by us to the
effect that, as a result of the circumstances described above,
we have or will become obligated to pay any additional amounts.
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We will give you at least 30 days’, but not more than
60 days’, notice before any tax redemption of a series
of securities. On the redemption date, we will pay you the
principal amount of your debt security, plus any accrued
interest (including any additional amounts) to the redemption
date.
Exchange
The terms, if any, upon which debt securities of any series are
exchangeable for other securities will be set forth in the
related prospectus supplement. These terms may include the
exchange price, the exchange period, provisions as to whether
exchange will be at the option of the holders of that series of
debt securities or at our option, any events requiring an
adjustment of the exchange price, provisions affecting exchange
in the event of the redemption of such series of debt securities
and other relevant provisions relating to those securities.
Events of default
Unless otherwise specified in the applicable pricing supplement
or product supplement, the following are defined as events of
default with respect to securities of any series outstanding
under the indenture:
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failure to pay principal or premium, if any, on any debt
security of that series when due, and continuance of such a
default for a period of 15 days or any applicable longer
grace period,
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failure to pay any interest on any debt security of that series
when due, and continuance of such a default for a period of
30 days or any applicable longer grace period,
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failure to deposit any sinking fund payment, when due and
continuance of such a default beyond any applicable grace
period, on any debt security of that series,
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failure to perform any of our other covenants or the breach of
any of the warranties in the indenture after being given written
notice and continuance of such a default for a period of
90 days or any applicable longer grace period,
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certain events in bankruptcy, insolvency or reorganization, and
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any other event of default provided with respect to debt
securities of that series.
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If an event of default for any series of debt securities occurs
and continues, the trustee or the holders of at least 25% in
aggregate principal amount of the outstanding debt securities of
that series may accelerate the maturity of the debt securities
of that series (or, such portion of the principal amount of such
debt securities as may be specified in a prospectus supplement)
and declare all amounts of that series due and payable or
deliverable immediately. If an acceleration occurs, subject to
specified conditions, the holders of a majority of the aggregate
principal amount of the outstanding debt securities of that
series may rescind and annul such acceleration, provided that
all payments and/or deliveries due, other than those due as a
result of acceleration, have been made and all events of default
have been cured or waived. Because each series of debt
securities will be independent of each other series, a default
in respect of one series will not necessarily in itself result
in a default or acceleration of the maturity of a different
series of debt securities.
Other than its duties in case of an event of default, the
trustee is not obligated to exercise any of its rights or powers
under the indenture at the request or direction of any of the
holders, unless the holders offer the trustee indemnity
reasonably satisfactory to it. Subject to the indemnification of
the trustee, the holders of a majority in aggregate principal
amount of the outstanding debt securities of any series may
direct the time, method and place of conducting any proceeding
for any remedy available to the trustee or exercising any trust
or power conferred on the trustee with respect to the debt
securities of that series.
A holder of debt securities of any series will not have any
right to institute any proceeding with respect to the indenture
unless:
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the holder previously gave written notice to the trustee of an
event of default,
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the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of that series have made written
request, and have offered reasonable indemnity to the trustee to
institute such proceeding as trustee, and
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the trustee fails to institute such proceeding, and has not
received from the holders of a majority in aggregate principal
amount of the outstanding debt securities of that series a
direction inconsistent with such request, within 60 days
after such notice, request and offer.
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The limitations described above do not apply to a suit
instituted by a holder of a debt security for the enforcement of
payment of the principal, interest or premium on that debt
security on or after the applicable due date specified in that
debt security.
The holders of a majority in principal amount of the outstanding
debt securities of any series may waive an event of default with
respect to that series, except a default:
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in the payment of any amounts due and payable or deliverable
under the debt securities of that series, or
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in respect of an obligation of Eksportfinans that cannot be
modified under the terms of the indenture without the consent of
each holder of each series of debt securities affected.
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We will be required to furnish to the trustee annually a
statement by our officers as to whether or not we are in default
in the performance of any of the terms of the indenture.
Subordination
The indebtedness evidenced by the subordinated debt securities
will, to the extent provided pursuant to the indenture with
respect to each series of subordinated debt securities, be
subordinate in right of payment to the prior payment in full of
all of our senior debt, as defined, including any senior debt
securities and any subordinated debt securities that are defined
as senior debt for purposes of a particular series of
subordinated debt securities. The prospectus supplement or, if
applicable, the pricing supplement or product supplement
relating to
11
any subordinated debt securities will summarize the
subordination provisions of the indenture applicable to that
series including:
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the applicability and effect of such provisions upon any payment
or distribution of our assets to creditors upon any liquidation,
bankruptcy, insolvency or similar proceedings,
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the applicability and effect of such provisions in the event of
specified defaults with respect to senior debt, including the
circumstances under which and the periods in which we will be
prohibited from making payments on the subordinated debt
securities, and
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the definition of senior debt applicable to the subordinated
debt securities of that series including whether and to what
extent the subordinated debt of that series shall be
subordinated to other subordinated debt of their issuer.
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In the event and during the continuation of any default in the
payment of any senior debt continuing beyond any applicable
grace period specified in the instrument evidencing that senior
debt (unless and until the default shall have been cured or
waived or shall have ceased to exist), no payments on account of
principal, premium, if any, or interest, if any, on the
subordinated debt securities or sums payable with respect to the
exchange, if applicable, of the subordinated debt securities may
be made pursuant to the subordinated debt securities.
Upon payment or distribution of our assets to creditors upon
dissolution or winding-up or total or partial liquidation or
reorganization, whether voluntary or involuntary in bankruptcy,
insolvency, receivership or other proceedings, the holders of
our senior debt will be entitled to receive payment in full of
all amounts due on the senior debt before any payment is made by
us on account of principal, premium, if any, or interest, if
any, on the subordinated debt securities.
By reason of this subordination, in the event of our insolvency,
holders of subordinated debt securities may recover less,
ratably, and holders of senior debt may recover more, ratably,
than our other creditors. The indenture does not limit the
amount of senior debt that we may issue.
Defeasance
Unless otherwise indicated in the related prospectus supplement
or, if applicable, the pricing supplement or product supplement,
we may elect, at our option at any time, to have the provisions
of the indenture relating (a) to defeasance and discharge
of indebtedness or (b) to defeasance of certain restrictive
covenants apply to the debt securities of any series, or to any
specified part of a series.
In order to exercise either option, we must irrevocably deposit,
in trust for the benefit of the holders of those debt
securities, money or U.S. government securities, or both,
that, through the payment of principal and interest in
accordance with their terms, will provide amounts sufficient to
pay the principal of and any premium and interest on those debt
securities on the respective stated maturities in accordance
with the terms of the indenture and those debt securities. Any
additional conditions to exercising these options with respect
to a series of debt securities will be described in a related
prospectus supplement.
If we meet all the conditions to clause (a) above and elect
to do so, we will be discharged from all our obligations with
respect to the applicable debt securities and, if those debt
securities are subordinated debt securities, the provisions
relating to subordination will cease to be effective (other than
obligations to register transfer of debt securities, to replace
lost, stolen or mutilated certificates and to maintain paying
agencies). We shall be deemed to have paid and discharged the
entire indebtedness represented by the applicable debt
securities and to have satisfied all of our obligations under
the debt securities and the indenture relating to those debt
securities.
If we meet all the conditions to clause (b) above and elect
to do so, we may omit to comply with and shall have no liability
in respect of certain restrictive covenants as described in the
related prospectus supplement and, if those debt securities are
subordinated debt securities, the provisions of the indenture
relating to subordination will cease to be effective, in each
case with respect to those debt securities.
12
Modification of the indenture
Under the indenture, our rights and obligations and the rights
of holders may be modified with the consent of the holders
holding not less than a majority of the aggregate principal
amount of the outstanding debt securities of each series
affected by the modification. No modification of the principal
or interest payment terms, and no modification reducing the
percentage required for modifications or altering the provisions
relating to the waiver of any past default, will be effective
against any holder without its consent. We and the trustee may
also amend the indenture or any supplement to the indenture
without the consent of the holders of any debt securities to
evidence the succession or addition of another corporation to
Eksportfinans, to evidence the replacement of the trustee with
respect to one or more series of debt securities and for certain
other purposes.
Consolidation, merger or disposition of assets
We may not consolidate with or merge into, or sell or lease
substantially all of our assets to any person unless:
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the successor person expressly assumes our obligations on the
debt securities and under the indenture,
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immediately after giving effect to the transaction, no event of
default, and no event which, after notice or lapse of time or
both, would become an event of default, shall have occurred and
be continuing, and
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any other conditions specified in the related prospectus
supplement or, if applicable, the pricing supplement or product
supplement are met.
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Concerning the trustee
We and certain of our affiliates and subsidiaries may maintain
deposit account and lines of credit and have other customary
banking relationship with the trustee and its affiliates in the
ordinary course of our and their respective businesses.
Pursuant to the Trust Indenture Act, should a default occur with
respect to the debt securities constituting our senior debt
securities or subordinated debt securities, the trustee would be
required to resign as trustee with respect to the debt
securities constituting either the senior debt securities or the
subordinated debt securities under the indenture within
90 days of the default unless the default were cured, duly
waived or otherwise eliminated or unless only senior debt
securities or subordinated debt securities are outstanding under
the indenture at the time of the default.
TAXATION IN NORWAY
This discussion is the opinion of Wiersholm, Mellbye & Bech,
advokatfirma AS insofar as it relates to matters of Norwegian
tax law and describes certain material Norwegian tax
consequences to beneficial holders of debt securities.
This section does not address all Norwegian income tax matters
that may be relevant to a particular prospective holder. This
section is based on Norwegian law, regulations and judicial and
administrative interpretations, in each case as in effect and
available on the date of this prospectus. All of the foregoing
are subject to changer, which change could apply retroactively
and could affect the consequences described below. Each investor
should consult its own tax advisor with respect to possible
Norwegian tax consequences of acquiring, owning or disposing of
the debt securities in their particular circumstances.
Unless the prospectus supplement or, if applicable, the pricing
supplement or product supplement for a particular series of debt
securities so provides, we will make all payments on the debt
securities of that series without withholding or deduction for
any taxes or other governmental charges in effect on the date of
issuance of the debt securities of that series or imposed in the
future by or on behalf of Norway or any authority in Norway. See
“Description of debt securities — Payments of
additional amounts” and “— Tax
redemption”, above.
Interest paid on the debt securities to a non-Norwegian person
not resident in Norway are not subject to income tax or
withholding tax in Norway.
13
Gains derived from the sale of Eksportfinans’s debt
securities by a non-Norwegian person not resident in Norway are
not subject to Norwegian income taxes.
A non-Norwegian person not resident in Norway who holds
Eksportfinans’s debt securities is not subject to Norwegian
inheritance, gift or wealth tax unless such person operates a
business through a permanent establishment in Norway and
payments on such securities are attributable to such business.
Norwegian inheritance and gift tax may, however, under certain
circumstances be imposed on holders who are non-resident
Norwegian citizens. Under the United States-Norway estate and
inheritance tax treaty, a United States citizen or domiciliary
who becomes liable to pay Norwegian inheritance or gift taxes
generally will be entitled to credit against his
U.S. estate or gift tax liability the amount of such
Norwegian taxes.
TAXATION IN THE UNITED STATES
This discussion is the opinion of Allen & Overy LLP
insofar as it relates to matters of U.S. Federal income tax
law and describes certain material U.S. Federal income tax
consequences to beneficial holders of debt securities. This
section addresses only the U.S. Federal income tax
considerations for holders that acquire the debt securities at
their original issuance and hold the debt securities as capital
assets. This section does not address all U.S. Federal
income tax matters that may be relevant to a particular
prospective holder.
Each prospective investor should consult
a professional tax advisor with respect to the tax consequences
of an investment in the debt securities under their particular
circumstances
. This section does not address tax
considerations applicable to a holder of a debt security that
may be subject to special tax rules including, without
limitation, the following:
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financial institutions,
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insurance companies,
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dealers or traders in securities, currencies or notional
principal contracts,
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tax-exempt entities,
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regulated investment companies,
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real estate investment trusts,
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S corporations,
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persons that will hold the debt securities as part of a
“hedging” or “conversion” transaction or as
a position in a “straddle” or as part of a
“synthetic security” or other integrated transaction
for U.S. Federal income tax purposes,
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persons that own (or are deemed to own) 10% or more (by voting
power) of our stock,
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partnerships,
pass-through
entities
or persons who hold the debt securities through partnerships or
other pass-through entities, and
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holders that have a “functional currency” other than
the U.S. dollar.
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Further, this section does not address alternative minimum tax
consequences or the indirect effects on the holders of equity
interests in a holder of a debt security. This section also does
not address the U.S. Federal estate and gift tax
consequences to holders of debt securities.
This discussion does not cover every type of debt security that
may be issued under this prospectus. If we intend to issue a
debt security of a type not described in this summary, or if
there are otherwise special tax consequences with respect to the
debt security that are not covered herein, additional tax
information will be provided in the prospectus supplement and,
if applicable, the pricing supplement or product supplement for
the applicable debt security.
This section is based on the U.S. Internal Revenue Code of
1986, as amended (the
Code
), U.S. Treasury
regulations and judicial and administrative interpretations, in
each case as in effect and available on the date of
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this prospectus. All of the foregoing are subject to change,
which change could apply retroactively and could affect the tax
consequences described below.
Each prospective investor should consult its own tax advisor
with respect to the U.S. federal, state, local and foreign
tax consequences of acquiring, owning or disposing of the debt
securities in their particular circumstances.
For the purposes of this section, a
U.S. holder
is a
beneficial owner of debt securities that is, for
U.S. Federal income tax purposes:
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a citizen or individual resident of the United States,
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a corporation, or other entity that is treated as a corporation
for U.S. Federal income tax purposes, created or organized
in or under the laws of the United States or any state of the
United States (including the District of Columbia),
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an estate, the income of which is subject to U.S. Federal
income taxation regardless of its source, or
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a trust, if a court within the United States is able to exercise
primary supervision over its administration and one or more
U.S. persons have the authority to control all of the
substantial decisions of such trust.
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A
non-U.S. holder
is a beneficial owner of debt
securities that is not a U.S. holder. If a partnership
holds debt securities, the tax treatment of a partner will
generally depend upon the status of the partner and upon the
activities of the partnership. Partners of partnerships holding
debt securities should consult their tax advisor.
U.S. Federal income tax consequences to
U.S. holders
Interest
Interest paid on the debt securities, other than interest on a
discount note that is not qualified stated interest (each as
defined below under “Original issue discount”), will
be taxable to a U.S. holder as ordinary interest income at
the time it is received or accrued, depending on the
U.S. holder’s method of accounting for
U.S. Federal income tax purposes.
A U.S. holder utilizing the cash method of accounting for
U.S. Federal income tax purposes that receives an interest
payment denominated in a foreign currency will be required to
include in income the U.S. dollar value of that interest
payment, based on the exchange rate in effect on the date of
receipt, regardless of whether the payment is in fact converted
into U.S. dollars.
If interest on a debt security is payable in a foreign currency,
an accrual basis U.S. holder is required to include in
income the U.S. dollar value of the amount of interest
income accrued on a debt security during the accrual period. An
accrual basis U.S. holder may determine the amount of the
interest income to be recognized in accordance with either of
two methods. Under the first accrual method, the amount of
income accrued will be based on the average exchange rate in
effect during the interest accrual period or, with respect to an
accrual period that spans two taxable years, the part of the
period within the taxable year. Under the second accrual method,
the U.S. holder may elect to determine the amount of income
accrued on the basis of the exchange rate in effect on the last
day of the accrual period or, in the case of an accrual period
that spans two taxable years, the exchange rate in effect on the
last day of the part of the period within the taxable year. If
the last day of the accrual period is within five business days
of the date the interest payment is actually received, an
electing accrual basis U.S. holder may instead translate
that interest expense at the exchange rate in effect on the day
of actual receipt. Any election to use the second accrual method
will apply to all debt instruments held by the U.S. holder
at the beginning of the first taxable year to which the election
applies or thereafter acquired by the U.S. holder and will
be irrevocable without the consent of the U.S. Internal
Revenue Service (the
IRS
).
A U.S. holder utilizing either of the foregoing two accrual
methods may recognize ordinary income or loss with respect to
accrued interest income on the date of receipt of the interest
payment (including a payment attributable to accrued but unpaid
interest upon the sale or retirement of a debt security). The
amount of ordinary income or loss, if any, will equal the
difference between the U.S. dollar value of the interest
payment received (determined on the date the payment is
received) in respect of the accrual period and the
U.S. dollar value of
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interest income that has accrued during that accrual period (as
determined under the accrual method utilized by the
U.S. holder).
Foreign currency received as interest on the debt securities
will have a tax basis equal to its U.S. dollar value at the
time the interest payment is received. Gain or loss, if any,
realized by a U.S. holder on a sale or other disposition of
that foreign currency will be ordinary income or loss and will
generally be income from sources within the United States for
foreign tax credit limitation purposes.
Interest on the debt securities received by a U.S. holder
will be treated as foreign source income for the purposes of
calculating that holder’s foreign tax credit limitation.
The limitation on foreign taxes eligible for the
U.S. foreign tax credit is calculated separately with
respect to specific classes of income. The rules relating to
foreign tax credits and the timing thereof are complex. U.S.
holders should consult their own tax advisers regarding the
availability of a foreign tax credit under their particular
situation.
Original issue discount
A debt security, other than a debt security with a term of one
year or less (a
short-term note
), will be treated as
issued at an original issue discount (OID, and a debt security
issued with OID, a
discount note
) for U.S. Federal
income tax purposes if the excess of the sum of all payments
provided under the debt security, other than qualified stated
interest payments, as defined below, over the issue price of the
debt security is more than a
de minimis
amount, as
defined below.
Qualified stated interest
is generally
interest paid on a debt security that is unconditionally payable
at least annually at a single fixed rate. The issue price of the
debt securities will be the first price at which a substantial
amount of the debt securities are sold to persons other than
bond houses, brokers, or similar persons or organizations acting
in the capacity of underwriters, placement agents, or
wholesalers. Special rules for “variable rate debt
securities” are described below under “Original issue
discount — Variable rate debt securities”.
In general, if the excess of the sum of all payments provided
under the debt security other than qualified stated interest
payments (the stated redemption price at maturity) over its
issue price is less than 0.25% of the debt security’s
stated redemption price at maturity multiplied by the number of
complete years to its maturity, then such excess, if any,
constitutes
de minimis
OID
and the debt security
is not a discount note. Unless the election described below
under “Election to Treat All Interest as OID” is made,
a U.S. holder of a debt security with
de minimis
OID
must include such
de minimis
OID in income as stated
principal payments on the debt security are made. The includable
amount with respect to each such payment will equal the product
of the total amount of the debt security’s
de
minimis
OID and a fraction, the numerator of which is the
amount of the principal payment made and the denominator of
which is the stated principal amount of the debt security.
A U.S. holder will be required to include OID on a discount
note in income for U.S. Federal income tax purposes as it
accrues, calculated on a constant-yield method, before the
actual receipt of cash attributable to that income, regardless
of the U.S. holder’s method of accounting for
U.S. Federal income tax purposes. Under this method,
U.S. holders generally will be required to include in
income increasingly greater amounts of OID over the life of the
discount notes.
OID for any accrual period on a discount note that is
denominated in, or determined by reference to, a foreign
currency will be determined in that foreign currency and then
translated into U.S. dollars in the same manner as interest
payments accrued by an accrual basis U.S. holder, as
described under “Interest” above. Upon receipt of an
amount attributable to OID in these circumstances, a
U.S. holder may recognize ordinary income or loss.
OID on a discount note will be treated as foreign source income
for the purposes of calculating a U.S. holder’s
foreign tax credit limitation. The limitation on foreign taxes
eligible for the U.S. foreign tax credit is calculated
separately with respect to specific classes of income. The rules
relating to foreign tax credits and the timing thereof are
complex. U.S. holders should consult their own tax advisers
regarding the availability of a foreign tax credit under their
particular situation.
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Acquisition premium
A U.S. holder that purchases a debt security for an amount
less than or equal to the sum of all amounts payable on the debt
security after the purchase date other than payments of
qualified stated interest but in excess of its adjusted issue
price and that does not make the election described below under
“Election to treat all interest as OID” will have
acquisition premium. Investors should consult their own tax
advisors regarding the U.S. Federal income tax implications
of acquisition premium.
Market discount
A debt security, other than a short-term note, will be treated
as purchased at a market discount (a
market discount
note
) if the debt security’s stated redemption price at
maturity or, in the case of a discount note, the debt
security’s “revised issue price”, exceeds the
amount for which the U.S. holder purchased the debt
security by at least 0.25% of the debt security’s stated
redemption price at maturity or revised issue price,
respectively, multiplied by the number of complete years to the
debt security’s maturity. If such excess is not sufficient
to cause the debt security to be a market discount note, then
such excess constitutes
de minimis
market discount
and the debt security is not subject to the rules discussed in
the following paragraphs. For these purposes, the
revised
issue price
of a debt security generally equals its issue
price, increased by the amount of any OID that has accrued on
the debt security.
Any gain recognized on the maturity or disposition of a market
discount note will be treated as ordinary income to the extent
that such gain does not exceed the accrued market discount on
that debt security. Alternatively, a U.S. holder of a
market discount note may elect to include market discount in
income currently over the life of the debt security. Such an
election shall apply to all debt instruments with market
discount acquired by the electing U.S. holder on or after
the first day of the first taxable year to which the election
applies. This election may not be revoked without the consent of
the IRS.
Market discount on a market discount note will accrue on a
straight-line basis unless the U.S. holder elects to accrue
such market discount on a constant-yield method. Such an
election shall apply only to the debt security with respect to
which it is made and may not be revoked. A U.S. holder of a
market discount note that does not elect to include market
discount in income currently generally will be required to defer
deductions for interest on borrowings allocable to that market
discount note in an amount not exceeding the accrued market
discount on that market discount note until the maturity or
disposition of that market discount note.
Election to treat all interest as OID
A U.S. holder may elect to include in gross income all
interest that accrues on a debt security using the
constant-yield method under the heading “Original issue
discount”, with the modifications described below. For the
purposes of this election, interest includes stated interest,
OID,
de minimis
OID, market discount,
de minimis
market discount and unstated interest, as adjusted by any
amortizable bond premium or acquisition premium.
In applying the constant-yield method to a debt security with
respect to which this election has been made, the issue price of
the debt security will equal its cost to the electing
U.S. holder, the issue date of the debt security will be
the date of its acquisition by the electing U.S. holder,
and no payments on the debt security will be treated as payments
of qualified stated interest. This election will generally apply
only to the debt security with respect to which it is made and
may not be revoked without the consent of the IRS. If this
election is made with respect to a debt security with
amortizable bond premium, then the electing U.S. holder
will be deemed to have elected to apply amortizable bond premium
against interest with respect to all debt instruments with
amortizable bond premium (other than debt instruments the
interest on which is excludible from gross income) held by the
electing U.S. holder as of the beginning of the taxable
year in which the debt security with respect to which the
election is made is acquired or thereafter acquired. The deemed
election with respect to amortizable bond premium may not be
revoked without the consent of the IRS.
If the election to apply the constant-yield method to all
interest on a debt security is made with respect to a market
discount note, the electing U.S. holder will be treated as
having made the election discussed above under
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“Original issue discount — Market discount”
to include market discount in income currently over the life of
all debt instruments held or thereafter acquired by such
U.S. holder.
Variable rate debt securities.
A
variable rate debt security
is a debt security that:
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has an issue price that does not exceed the total non-contingent
principal payments by more than the lesser of (i) the
product of (x) the total non-contingent principal payments,
(y) the number of complete years to maturity from the issue
date and (z) 0.015, or (ii) 15% of the total
non-contingent principal payments; and
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does not provide for stated interest other than stated interest
compounded or paid at least annually at (i) one or more
“qualified floating rates”, (ii) a single fixed
rate and one or more qualified floating rates, (iii) a
single “objective rate” or (iv) a single fixed
rate and a single objective rate that is a “qualified
inverse floating rate”.
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A qualified floating rate or objective rate in effect at anytime
during the term of the instrument must be set at a “current
value” of that rate. A
current value
of a rate is
the value of the rate on any day that is no earlier than three
months prior to the first day on which that value is in effect
and no later than one year following that first day.
A variable rate is a
qualified floating rate
if
(i) variations in the value of the rate can reasonably be
expected to measure contemporaneous variations in the cost of
newly borrowed funds in the currency in which the note is
denominated or (ii) it is equal to the product of such a
rate and either (a) a fixed multiple that is greater than
0.65 but not more than 1.35, or (b) a fixed multiple
greater than 0.65 but not more than 1.35, increased or decreased
by a fixed rate. If a note provides for two or more qualified
floating rates that (i) are within 0.25 percentage
points of each other on the issue date or (ii) can
reasonably be expected to have approximately the same values
throughout the term of the debt security, the qualified floating
rates together constitute a single qualified floating rate. A
rate is not a qualified floating rate, however, if the rate is
subject to certain restrictions (including caps, floors,
governors, or other similar restrictions) unless such
restrictions are fixed throughout the term of the debt security
or are not reasonably expected to significantly affect the yield
on the note.
An
objective rate
is a rate, other than a qualified
floating rate, that is determined using a single fixed formula
and that is based on objective financial or economic information
that is not within the control of or unique to the circumstances
of the relevant issuer or a related party (such as dividends,
profits or the value of the relevant issuer’s stock). A
variable rate is not an objective rate, however, if it is
reasonably expected that the average value of the rate during
the first half of the debt security’s term will be either
significantly less than or significantly greater than the
average value of the rate during the final half of the debt
security’s term. An objective rate is a
qualified
inverse floating rate
if (i) the rate is equal to a
fixed rate minus a qualified floating rate, and (ii) the
variations in the rate can reasonably be expected to inversely
reflect contemporaneous variations in the qualified floating
rate.
If interest on a debt security is stated at a fixed rate for an
initial period of one year or less followed by either a
qualified floating rate or an objective rate for a subsequent
period and (i) the fixed rate and the qualified floating
rate or objective rate have values on the issue date of the debt
security that do not differ by more than 0.25 percentage
points or (ii) the value of the qualified floating rate or
objective rate is intended to approximate the fixed rate, the
fixed rate and the qualified floating rate or the objective rate
constitute a single qualified floating rate or objective rate.
In general, if a variable rate debt security provides for stated
interest at a single qualified floating rate or objective rate,
all stated interest on the debt security is qualified stated
interest and the amount of OID, if any, is determined under the
rules applicable to fixed rate debt instruments by using, in the
case of a qualified floating rate or qualified inverse floating
rate, the value as of the issue date of the qualified floating
rate or qualified inverse floating rate, or, in the case of any
other objective rate, a fixed rate that reflects the yield
reasonably expected for the debt security.
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If a variable rate debt security does not provide for stated
interest at a single qualified floating rate or a single
objective rate and also does not provide for interest payable at
a fixed rate (other than at a single fixed rate for an initial
period), the amount of interest and OID accruals on the debt
security are generally determined by: (i) determining a
fixed rate substitute for each variable rate provided under the
variable rate debt security (generally, the value of each
variable rate as of the issue date or, in the case of an
objective rate that is not a qualified inverse floating rate, a
rate that reflects the reasonably expected yield on the note),
(ii) constructing the equivalent fixed rate debt instrument
(using the fixed rate substitutes described above),
(iii) determining the amount of qualified stated interest
and OID with respect to the equivalent fixed rate debt
instrument, and (iv) making the appropriate adjustments for
actual variable rates during the applicable accrual period.
If a variable rate debt security provides for stated interest
either at one or more qualified floating rates or at a qualified
inverse floating rate, and in addition provides for stated
interest at a single fixed rate (other than at a single fixed
rate for an initial period), the amount of interest and OID
accruals are determined as in the immediately preceding
paragraph with the modification that the variable rate debt
security is treated, for the purposes of the first three steps
of the determination, as if it provided for a qualified floating
rate (or a qualified inverse floating rate, as the case may be)
rather than the fixed rate. The qualified floating rate (or
qualified inverse floating rate) replacing the fixed rate must
be such that the fair market value of the variable rate debt
security as of the issue date would be approximately the same as
the fair market value of an otherwise identical debt instrument
that provides for the qualified floating rate (or qualified
inverse floating rate) rather than the fixed rate.
Index debt securities, exchangeable debt securities and other
debt securities subject to contingencies.
Special U.S. Federal income tax rules apply with respect to
index debt securities, exchangeable debt securities and debt
securities which are subject to the rules governing contingent
payment debt instruments and are not subject to the rules
governing variable rate debt instruments. The timing and
character of income, gain or loss reported on such debt security
may differ substantially from the timing and character of
income, gain or loss reported on a non-contingent payment debt
instrument under general principles of current U.S. Federal
income tax law. If any such securities are issued, information
concerning the U.S. Federal income tax consequences of such
securities will be provided in the applicable pricing supplement
or product supplement.
Securities with perpetual maturity.
Although the treatment of securities with a perpetual maturity
is not entirely clear, securities with a perpetual maturity may
not be characterized as debt for U.S. Federal income tax
purposes. As a result, certain of the tax provisions discussed
herein may not be applicable to securities with perpetual
maturity. If any such securities are issued, information
concerning the U.S. Federal income tax consequences of such
securities will be provided in the applicable pricing supplement
or product supplement.
Prospective purchasers are advised to
consult their tax advisors regarding the tax treatment of such
securities for U.S. federal income tax purposes.
Debt securities subject to redemption
Certain of the debt securities (1) may be redeemable at the
option of the issuer prior to their maturity (a call option)
and/or (2) may be repayable at the option of the holder
prior to their stated maturity (a put option). Debt securities
containing such features may be subject to rules that are
different from the general rules discussed above and the tax
consequences of an investment in such debt securities will
depend, in part, on the particular terms and features of such
debt securities. The prospectus supplement for the debt
securities will contain additional discussion relating to the
terms and features of such debt securities.
Short-term debt securities
Short-term debt securities will be treated as having been issued
with OID. In general, an individual or other cash method
U.S. holder is not required to accrue such OID unless the
U.S. holder elects to do so. If such an election is not
made, any gain recognized by the U.S. holder on the sale,
exchange or maturity of the short-term debt security will be
ordinary income to the extent of the OID accrued on a
straight-line basis, or upon election
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under the constant yield method (based on daily compounding),
through the date of sale or maturity, and a portion of the
deductions otherwise allowable to the U.S. holder for
interest on borrowings allocable to the short-term debt security
will be deferred until a corresponding amount of income is
realized. U.S. holders who report income for
U.S. Federal income tax purposes under the accrual method
are required to accrue OID on a short-term debt security on a
straight-line basis unless an election is made to accrue the OID
under a constant yield method (based on daily compounding).
Debt securities purchased at a premium
A U.S. holder that purchases a debt security for an amount
in excess of its principal amount may elect to treat such excess
as amortizable bond premium. If this election is made, the
amount required to be included in the U.S. holder’s
income each year with respect to interest on the debt security
will be reduced by the amount of amortizable bond premium
allocable (based on the debt security’s yield to maturity)
to such year. In the case of a debt security that is denominated
in, or determined by reference to, a foreign currency,
amortizable bond premium will be computed in units of foreign
currency, and amortizable bond premium will reduce interest
income in units of foreign currency. At the time amortizable
bond premium offsets interest income, a U.S. holder
realizes exchange gain or loss (taxable as ordinary income or
loss) equal to the difference between exchange rates at that
time and at the time of the acquisition of the debt securities.
Any election to amortize bond premium shall apply to all bonds
(other than bonds the interest on which is excludible from gross
income) held by the U.S. holder at the beginning of the
first taxable year to which the election applies or thereafter
acquired by the U.S. holder and is irrevocable without the
consent of the IRS.
Sale, exchange or retirement of the debt securities
A U.S. holder’s tax basis in a debt security will
generally equal its “U.S. dollar cost”, increased
by the amount of any OID or market discount included in the
U.S. holder’s income with respect to the debt security
and the amount, if any, of income attributable to
de
minimis
OID and
de minimis
market discount included
in the U.S. holder’s income with respect to the debt
security (each as determined above), and reduced by the amount
of any payments with respect to the debt security that are not
qualified stated interest payments and the amount of any
amortizable bond premium applied to reduce interest on the debt
security. The
U.S. dollar cost
of a debt security
purchased with a foreign currency will generally be the
U.S. dollar value of the purchase price on (1) the
date of purchase or (2) in the case of a debt security
traded on an established securities market (as defined in the
applicable U.S. Treasury regulations), that is purchased by
a cash basis U.S. holder (or an accrual basis
U.S. holder that so elects), on the settlement date for the
purchase. A U.S. holder will generally recognize gain or
loss on the sale, exchange or retirement of a debt security
equal to the difference between the amount realized on the sale,
exchange or retirement and the tax basis of the debt security.
The amount realized on the sale, exchange or retirement of a
debt security for an amount in foreign currency will be the
U.S. dollar value of that amount on the date of
disposition, or in the case of debt securities traded on an
established securities market (as defined in the applicable
U.S. Treasury regulations) that are sold by a cash basis
U.S. holder or by an accrual basis U.S. holder that so
elects, on the settlement date for the sale.
Gain or loss recognized by a U.S. holder on the sale,
exchange or retirement of a debt security that is attributable
to changes in currency exchange rates will be ordinary income or
loss and will consist of OID exchange gain or loss and principal
exchange gain or loss. OID exchange gain or loss will equal the
difference between the U.S. dollar value of the amount
received on the sale, exchange or retirement of a debt security
that is attributable to accrued but unpaid OID as determined by
using the exchange rate on the date of the sale, exchange or
retirement and the U.S. dollar value of accrued but unpaid
OID as determined by the U.S. holder under the rules
described above under “Original issue discount”.
Principal exchange gain or loss will equal the difference
between the U.S. dollar value of the
U.S. holder’s purchase price of the debt security in
foreign currency determined on the date of the sale, exchange or
retirement, and the U.S. dollar value of the
U.S. holder’s purchase price of the debt security in
foreign currency determined on the date the U.S. holder
acquired the debt security. The foregoing foreign currency gain
or loss will be recognized only to the extent of the total gain
or loss realized by the U.S. holder on the sale, exchange
or retirement of the debt security, and will generally be
treated as from sources within the United States for
U.S. foreign tax credit limitation purposes.
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Any gain or loss recognized by a U.S. holder in excess of
foreign currency gain recognized on the sale, exchange or
retirement of a debt security would generally be
U.S. source capital gain or loss (except to the extent such
amounts are attributable to market discount, accrued but unpaid
interest, or subject to the general rules governing contingent
payment obligations). In the case of a U.S. holder that is
an individual, estate or trust, the maximum marginal federal
income tax rate applicable to such capital gain is currently
lower than the maximum marginal federal income tax rate
applicable to ordinary income if the debt securities are held
for more than one year. The deductibility of capital losses is
subject to limitations.
A U.S. holder will have a tax basis in any foreign currency
received on the sale, exchange or retirement of a debt security
equal to the U.S. dollar value of the foreign currency at
the time of the sale, exchange or retirement. Gain or loss, if
any, realized by a U.S. holder on a sale or other
disposition of that foreign currency will be ordinary income or
loss and will generally be income from sources within the United
States for foreign tax credit limitation purposes.
U.S. Treasury Regulations (the
Disclosure
Regulations
) meant to require the reporting of certain tax
shelter transactions (
Reportable Transactions
) could be
interpreted to cover transactions generally not regarded as tax
shelters. Under the Disclosure Regulations it may be possible
that certain transactions with respect to the debt securities
may be characterized as Reportable Transactions requiring a
holder to disclose that transaction, such as a sale, exchange,
retirement or other taxable disposition of a debt security that
results in a loss exceeding certain thresholds and meeting other
specified conditions. Prospective investors in debt securities
should consult with their own tax advisors to determine the tax
return obligations, if any, with respect to an investment in the
debt securities under their particular circumstances.
Special categories of debt securities
Additional tax rules may apply to other categories of debt
securities of Eksportfinans. The prospectus supplement and, if
applicable, the pricing supplement or product supplement will
describe the rules applicable to these debt securities. In
addition, you should consult your tax advisor in these
situations. These categories of debt securities include:
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debt securities that are extendable at the option of the issuer
or the holder,
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debt securities that are issued in bearer form, and
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debt securities that are callable by the issuer before their
maturity, other than typical calls at a premium.
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Information reporting and backup withholding
In general, information reporting requirements may apply to
certain payments of interest and OID on debt securities, and to
certain payments of the proceeds of a sale, redemption or other
disposition of Notes. A
backup withholding
tax may apply
to such payments or proceeds if the beneficial owner fails to
provide a correct taxpayer identification number or
certification of exempt status or otherwise to comply with the
applicable backup withholding requirements. Information
reporting and backup withholding may be required on interest
payments to a beneficial owner of a debt securities made within
the United States or by a paying agent, custodian, nominee or
agent of the beneficial owner that is a
“U.S. Controlled Person” (as defined below)
unless (1) the beneficial owner is a corporation or a
financial institution or is otherwise eligible for an exemption
from information reporting (and, if necessary, demonstrates its
eligibility for the relevant exemption) or (2) the paying
agent, custodian, nominee or agent (i) obtains a
withholding certificate or other appropriate documentary
evidence establishing that the beneficial owner is not a United
States person, and (ii) does not have actual knowledge or
reason to know that the information contained therein is false.
Proceeds from the sale or redemption of debt securities through
a broker in the United States may be subject to information
reporting and backup withholding unless (1) the beneficial
owner is a corporation or a financial institution or is
otherwise eligible for an exemption from information reporting,
or (2) such broker (i) obtains a withholding
certificate or other appropriate documentation establishing that
the beneficial owner is not a United States person and
(ii) does not have actual knowledge or reason to know that
the information contained therein is false.
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Proceeds from the sale or redemption of a debt securities
through the foreign office of a broker that is a
“U.S. Controlled Person” may be subject to
information reporting and, in certain cases, backup withholding
unless (1) the beneficial owner is a corporation or a
financial institution or is otherwise eligible for an exemption
from information reporting (and, if necessary, demonstrates its
eligibility for the relevant exemption) or (2) such broker
(i) obtains a withholding certificate or other appropriate
documentary evidence establishing that the beneficial owner is a
non-U.S. holder, and (ii) does not have actual
knowledge or reason to know that the information contained
therein is false.
A
U.S. Controlled Person
is a person that
(1) is a United States person, (2) derives at least
50 per cent of its gross income from certain periods
from the conduct of a trade or business within the United
States, (3) is a controlled foreign corporation for
U.S. federal income tax purposes, or (4) is a foreign
partnership that, at any time during its taxable year, is more
than 50 per cent owned (by income or capital interest)
by United States persons or is engaged in the conduct of a trade
or business within the United States.
Backup withholding is not an additional tax. Amounts withheld as
backup withholding may be credited against a holder’s
U.S. federal income tax liability. A holder may obtain a
refund of any excess amounts withheld under the backup
withholding rules by filing appropriate claim for a refund with
the IRS and furnishing any required information.
U.S. Federal income tax consequences to
non-U.S. holders
Sale, exchange or retirement of debt securities
If you sell, exchange or redeem debt securities, you will
generally not be subject to U.S. Federal income tax on any
gain, unless one of the following applies:
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the gain is connected with a trade or business that you conduct
in the United States through an office or other fixed place of
business, or
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you are an individual, you are present in the United States for
at least 183 days during the year in which you dispose of
the debt security, and certain other conditions are satisfied.
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Information reporting and backup withholding
United States rules concerning information reporting and backup
withholding are described above. These rules apply to
non-U.S. holders as follows:
Information reporting and backup withholding may apply if you
use the U.S. office of a broker or agent, and information
reporting (but not backup withholding) may apply if you use the
foreign office of a broker or agent that has certain connections
to the United States. You may be required to comply with
applicable certification procedures to establish that you are
not a U.S. holder in order to avoid the application of such
information reporting and backup withholding requirements. You
should consult your tax advisor concerning the application of
the information reporting and backup withholding rules.
Prospective investors should consult legal and tax advisors
in the countries of their citizenship, residence and domicile to
determine the possible tax consequences of purchasing, holding,
selling and redeeming debt securities in light of their
particular circumstances under the laws of their respective
jurisdictions.
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PLAN OF DISTRIBUTION
We may sell the debt securities offered by this prospectus in
one or more of the following ways:
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through underwriters,
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through dealers,
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through agents, or
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directly to purchasers.
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The distribution of the debt securities may be carried out from
time to time in one or more transactions at a fixed price or
prices, which may be changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices
or at negotiated prices. Underwriters, dealers and agents may be
customers of, engage in transactions with or perform services
for us in the ordinary course of business.
The prospectus supplement or, if applicable, the pricing
supplement or product supplement relating to any offering will
include the following information:
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the terms of the offering,
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the names of any underwriters, dealers or agents,
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the purchase price of, or consideration payable for, the debt
securities,
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the net proceeds to us from the sale of the debt securities,
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any underwriting discounts or other underwriters’
compensation,
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any discounts or concessions allowed or re-allowed or paid to
dealers, and
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any other information we think is important.
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Sales through underwriters or dealers
If we use underwriters in an offering using this prospectus, we
will execute an underwriting agreement with one or more
underwriters. The underwriting agreement will provide that the
obligations of the underwriters with respect to a sale of the
offered debt securities are subject to specified conditions
precedent and that the underwriters will be obligated to
purchase all of the offered debt securities if they purchase
any. Underwriters may sell those debt securities through
dealers. The underwriters may change the initial offering price
and any discounts or concessions allowed or re-allowed or paid
to dealers. If we use underwriters in an offering of debt
securities using this prospectus, the related prospectus
supplement will contain a statement regarding the intention, if
any, of the underwriters to make a market in the offered debt
securities.
We may grant to the underwriters an option to purchase
additional offered debt securities, to cover over-allotments, if
any, at the public offering price (with additional underwriting
discounts or commissions), as may be set forth in the related
prospectus supplement or, if applicable, the pricing supplement
or product supplement. If we grant any over-allotment option,
the terms of the over-allotment option will be set forth in the
prospectus supplement relating to such offered debt securities.
If we use a dealer in an offering of debt securities using this
prospectus, we will sell the offered debt securities to the
dealer as principal. The dealer may then resell those debt
securities to the public or other dealers at a fixed price or
varying prices to be determined at the time of resale.
Direct sales and sales through agents
We may also use this prospectus to directly solicit offers to
purchase debt securities. In this case, no underwriters or
agents would be involved. Except as set forth in the related
prospectus supplement, none of our directors, officers or
employees will solicit or receive a commission in connection
with those direct sales. Those persons may respond to inquiries
by potential purchasers and perform ministerial and clerical
work in connection with direct sales.
23
We may also sell the offered debt securities through agents we
designate from time to time. In the prospectus supplement, we
will describe any commission payable by us to the agent. Unless
we inform you otherwise in the prospectus supplement, any agent
will agree to use its reasonable best efforts to solicit
purchases for the period of its appointment.
Indemnification
Underwriters, dealers or agents participating in a distribution
of debt securities using this prospectus may be deemed to be
underwriters under the Securities Act. Pursuant to agreements
that we may enter into, underwriters, dealers or agents who
participate in the distribution of debt securities by use of
this prospectus may be entitled to indemnification by us against
certain liabilities, including liabilities under the Securities
Act, or contribution with respect to payments that those
underwriters, dealers or agents may be required to make in
respect of those liabilities.
Market making
Certain broker-dealers may, but will not be obligated to, make a
market in the securities of any series. They may also
discontinue market making at any time without notice. We cannot
give any assurance as to the liquidity of the trading market for
the debt securities.
LEGAL MATTERS
The validity of the debt securities under New York law and the
accuracy of the summary contained in “Taxation in the
United States” has been passed upon by Allen &
Overy LLP, London, England and Allen & Overy LLP, New
York, New York, respectively. The validity of the debt
securities under Norwegian law has been passed upon by Jens Olav
Feiring, Esq., General Counsel of Eksportfinans. The accuracy of
the summary contained in “Taxation in Norway” has been
passed upon by Wiersholm, Mellbye & Bech,
advokatfirma AS. From time to time, Allen & Overy
LLP performs legal services for Eksportfinans.
EXPERTS
The financial statements incorporated in this prospectus by
reference to the Annual Report on
Form
20-F/A
for
the year ended December 31, 2005, as filed with the SEC on
August 29, 2006, have been so incorporated in reliance on
the report of PricewaterhouseCoopers AS, independent registered
public accountants, given on the authority of said firm as
experts in auditing and accounting.
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REGISTERED OFFICE OF THE ISSUER
Dronning Mauds gate 15
N-0250 Oslo
TRUSTEE
The Bank of New York
101 Barclay Street
Floor 21W
New York, New York 10286
PRINCIPAL PAYING AGENT AND REGISTRAR
Citibank, N.A.
Canada Square
Canary Wharf
London E14 5LB
PAYING AGENT
Dexia Banque Internationale à Luxembourg,
société anonyme
69, route d’Esch
L-2953 Luxembourg
LISTING AGENT
Kredietbank S.A. Luxembourgeoise
43, Boulevard Royal
L-2955 Luxembourg
AUDITORS
PricewaterhouseCoopers AS
Karenslyst allé 12
0245 Oslo
LEGAL ADVISERS
to the Agents
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Allen & Overy LLP
One Bishops Square
London E1 6AO
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Sullivan & Cromwell LLP
1 New Fetter Lane
London EC4A 1AN
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No dealer, salesman, or any other person has been authorized
to give any information or to make any representation not
contained in this Prospectus Supplement, any Pricing Supplement,
any Product Supplement and the accompanying Prospectus in
connection with the offer contained in this Prospectus
Supplement, any Pricing Supplement, any Product Supplement and
the accompanying Prospectus, and, if given or made, such
information or representations must not be relied upon as having
been authorized by the Company, the agents or any underwriter.
This Prospectus Supplement, any Pricing Supplement, any Product
Supplement and the accompanying Prospectus shall not constitute
an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby in any state to any person to whom it
is unlawful to make such offer or solicitation in such state.
The delivery of this Prospectus Supplement, any Pricing
Supplement, any Product Supplement and the accompanying
Prospectus at any time does not imply that the information
herein is correct as of any time subsequent to the date
hereof.
EKSPORTFINANS ASA
PROSPECTUS
SUPPLEMENT
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ABN AMRO Bank N.V.
Banc of America Securities Limited
Banc of America Securities LLC
Bear, Stearns & Co. Inc.
Bear, Stearns International Limited
Barclays Capital
BNP PARIBAS
Citigroup
Commerzbank Capital Markets Corp.
Credit Suisse
Daiwa Securities SMBC Europe
Deutsche Bank
Deutsche Bank Securities
Dresdner Kleinwort
FTN Financial Securities Corp.
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Goldman Sachs International
Goldman, Sachs & Co.
IXIS Securities North America Inc.
Jefferies and Company, Inc.
JPMorgan
Lehman Brothers
Merrill Lynch & Co.
Mitsubishi UFJ Securities International plc
Mizuho International plc
Morgan Stanley
Nomura International plc
Nomura Securities International, Inc.
Nordea
The Toronto-Dominion Bank
UBS Investment Bank
Wachovia Securities
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February 5, 2007
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