Finnair considers issuance of new hybrid bonds and announces invitation to tender its outstanding hybrid bonds

Finnair Plc                            Stock Exchange Release                            28 September 2015 at 9:45 EET

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, TO ANY U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED) OR IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG, SOUTH AFRICA, SINGAPORE AND JAPAN OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

This release must be read in conjunction with the Tender Offer Memorandum (as defined below).

Finnair Plc is considering the issuance of new hybrid bonds (“New Hybrid Bonds”). The potential issue could be launched in the near future, subject to market conditions.

”Finnair has strong liquidity, which we wish to maintain. With the potential issuance of new hybrid bonds, and the invitation to tender our outstanding hybrid bonds, we are implementing our financing strategy for our wide-body fleet renewal, while maintaining a prudent and flexible capital structure," says Finnair CFO Pekka Vähähyyppä.

At the same time, Finnair hereby also announces the launch of a voluntary cash tender offer (the “Tender Offer”) for the holders holding its outstanding EUR 120 million hybrid bonds (ISIN: FI4000049952) issued in November 2012 (the “2012 Hybrid Bonds”). Full details of the terms and conditions of the Tender Offer (including restrictions relating thereto and certain representations, warranties and covenants to be provided in order to be able to participate therein) are contained in a tender offer memorandum dated 28 September 2015 (the “Tender Offer Memorandum”), which is available from the Tender Agent or the Dealer Managers referred to below. The Tender Offer Memorandum contains important information, which should be read carefully before any decision is made to participate in the Tender Offer. The 2012 Hybrid Bonds are securities with no specified maturity date and Finnair is entitled at its sole option to redeem them on 26 November 2016 and on each interest payment date thereafter.

The purchase price for the 2012 Hybrid Bonds validly submitted for tender pursuant to the Tender Offer and accepted for purchase by Finnair will be EUR 106,750 per each EUR 100,000 nominal amount of the 2012 Hybrid Bonds plus accrued and unpaid interest thereon. The Tender Offer is due to expire at 16:00 EET on 7 October 2015. The settlement date is expected to be 13 October 2015.

The above dates are indicative only and are subject to change as described in the Tender Offer Memorandum.

The Tender Offer is conditional upon a successful issue of the New Hybrid Bonds.

Finnair has appointed Danske Bank Oyj as tender agent (the “Tender Agent”) and each of Danske Bank A/S and Morgan Stanley & Co. International plc as dealer managers (each a “Dealer Manager”) in connection with the Tender Offer. Finnair has appointed each of Danske Bank A/S and Morgan Stanley & Co. International plc as joint coordinators, structuring advisors and joint lead managers and Pohjola Bank plc as joint lead manager in connection with the potential issue of the New Hybrid Bonds.

Further information:
Financial Communications Manager Ilkka Korhonen, tel. +358 9 818 4705, ilkka.korhonen@finnair.com

Distribution:

NASDAQ OMX Helsinki

Principal media

FURTHER INFORMATION

Neither this release nor the Tender Offer Memorandum constitutes a recommendation by Finnair, the Dealer Managers or the Tender Agent or any of their respective directors, employees, officers, agents or affiliates to any holders of 2012 Hybrid Bonds to tender their 2012 Hybrid Bonds in the Tender Offer. None of Finnair, the Dealer Managers, the Tender Agent or any of their respective directors, employees, officers, agents or affiliates has authorised any third party to make any such recommendation. Such holders should thoroughly examine the information contained in the Tender Offer Memorandum, consult their personal legal, tax and investment advisers and make an independent decision whether to tender any 2012 Hybrid Bonds held by them to Finnair on the basis of the Tender Offer.

Such holders, who have questions regarding the Tender Offer or wish to obtain documents, may contact the Tender Agent or the Dealer Managers at the addresses and facsimile or telephone numbers provided above. Questions and requests for information in relation to the procedures for tendering 2012 Hybrid Bonds in the Tender Offer and the submission of tender notices should be directed to the Tender Agent.

In the ordinary course of their respective businesses, the Dealer Managers, the Tender Agent and any of their respective affiliates are entitled to hold positions in the 2012 Hybrid Bonds either for their own account or for the account, directly or indirectly, of third parties. In the ordinary course of their respective businesses, they are entitled to continue to hold or dispose of, in any manner they may elect, any 2012 Hybrid Bonds they may hold as at the date of the Tender Offer Memorandum or, from such date, to acquire further 2012 Hybrid Bonds, subject to applicable law and may or may not submit tender notices in respect of such 2012 Hybrid Bonds.

DISTRIBUTION RESTRICTIONS

The distribution of this release and the invitation to tender the outstanding 2012 Hybrid Bonds is prohibited by law in certain countries. The Tender Offer is not made to the public either inside or outside of Finland. Persons resident outside of Finland may receive this release, the Tender Offer Memorandum and any other information and materials relating to the Tender Offer only in compliance with applicable exemptions or restrictions. Persons into whose possession this release, the Tender Offer Memorandum or any other such information or materials may come are required to inform themselves about and comply with such restrictions. This release, the Tender Offer Memorandum or any other such information or materials may not be distributed or published in any country or jurisdiction if such distribution or publication would constitute a violation of the relevant laws of such jurisdiction or would require actions under the laws of a state or jurisdiction other than Finland, including the United States, Australia, Canada, Hong Kong, South Africa, Singapore and Japan. The information contained in this release shall not constitute an offer to sell or tender, or a solicitation of an offer to buy or sell, the 2012 Hybrid Bonds to any persons in any jurisdiction in which such offer, solicitation or sale or tender would be unlawful. None of Finnair, the Dealer Managers, the Tender Agent or any of their respective affiliates and representatives assumes any legal responsibility for such violations, regardless of whether or not the parties contemplating investing in or divesting any 2012 Hybrid Bonds are aware of these restrictions.

United States: The Tender Offer is not being made, and will not be made, directly or indirectly in or into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of or of any facilities of a national securities exchange of, the United States or to any U.S. Person (as defined in Regulation S of the US Securities Act of 1933, as amended (the “U.S. Securities Act”) (each a “U.S. Person”)). This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. The 2012 Bonds may not be tendered in the Tender Offer by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States or by, or by any person acting for the account or benefit of, a U.S. Person. Accordingly, copies of this release, the Tender Offer Memorandum and any other documents or materials relating to the Tender Offer are not being, and must not be, directly or indirectly mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any persons located or resident in the United States or to any U.S. Person. Any purported tender of 2012 Hybrid Bonds in the Tender Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of 2012 Hybrid Bonds made by a person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.

For the purposes of this paragraph, United States means the United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.

United Kingdom: This release, the Tender Offer Memorandum and any other offer material relating to the Tender Offer are each intended to be a communication falling within section 21(1) of the UK Financial Services and Markets Act 2000 (as amended (the “FSMA”)) having the benefit of an exemption to the applicable restrictions regarding financial promotion pursuant to Articles 19 and 43 of the UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Order”). This release, the Tender Offer Memorandum and any such other offer material relating to the Tender Offer may only be distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Order or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons in (i), (ii) and (iii) above together being referred to as “relevant persons”). Any invitation, offer or agreement to purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this release the Tender Offer Memorandum or any such offering material or any of their contents. For the avoidance of doubt, neither this release, the Tender Offer Memorandum nor any such other offer material relating to the Tender Offer has been or will be approved by an authorised person for the purposes of section 21(1) of the FSMA.

General: Neither this release nor the Tender Offer Memorandum constitutes an offer to buy or the solicitation of an offer to sell 2012 Hybrid Bonds (and tenders of 2012 Hybrid Bonds in the Tender Offer will not be accepted from holders thereof) in any circumstances in which such offer or solicitation is unlawful. In those
jurisdictions where any securities, investor protection or other laws require the Tender Offer to be made by a licensed broker or dealer and any Dealer Manager or any of its affiliates is such a licensed broker or dealer in any such jurisdiction, the Tender Offer shall be deemed to be made by such Dealer Manager or such affiliate, as the case may be, on behalf of the Offeror in such jurisdiction(s).

In addition to the representations referred to above in respect of the United States, each holder of 2012 Hybrid Bonds participating in the Tender Offer will also be deemed to give certain representations, acknowledgements, warranties and undertakings and make certain agreements in respect of the other jurisdictions referred to above and generally as set out in the Tender Offer Memorandum. Any tender of 2012 Hybrid Bonds for purchase pursuant to the Tender Offer from a holder that is unable to make these representations or agreements will not be accepted. Each of Finnair, the Dealer Managers and the Tender Agent reserves the right, in its absolute discretion, to investigate, in relation to any tender of 2012 Hybrid Bonds for purchase pursuant to the Tender Offer, whether any such representation given by a holder thereof is correct and, if such investigation is undertaken and as a result Finnair determines (for any reason) that such representation is not correct, such tender shall not be accepted.

Disclaimer

This release is for information purposes only and is not to be construed as an offer to purchase or sell or a solicitation of an offer to purchase or sell with respect to any securities of Finnair. The distribution of this release and the related material concerning the issuance of the New Hybrid Bonds are prohibited or restricted by law in certain countries. The New Hybrid Bonds are not being and will not be offered to the public either inside or outside of Finland. Persons resident outside of Finland may receive this release and, if Finnair decides to proceed with the issue of the New Hybrid Bonds, any offering material or documentation related to the New Hybrid Bonds only in compliance with applicable exemptions or restrictions. Persons into whose possession this release and any such offering material or documentation may come are required to inform themselves about and comply with such restrictions. This release and any such offering material or documentation may not be distributed or published in any country or jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction or would require actions under the laws of a state or jurisdiction other than Finland, including the United States, Australia, Canada, Hong Kong, South Africa, Singapore and Japan. The information contained herein shall not constitute an offer to sell or tender, or a solicitation of an offer to buy or sell any of Finnair’s securities including New Hybrid Bonds to any persons in any jurisdiction in which such offer, solicitation or sale or tender would be unlawful. None of Finnair, the Dealer Managers, the Tender Agent or the Joint Lead Managers of their respective representatives assume no legal responsibility for such violations, regardless of whether persons contemplating investing in or divesting Finnair’s securities including New Hybrid Bonds are aware of these restrictions or not. The New Hybrid Bonds have not been and will not be registered under the U.S. Securities Act (as defined above), nor under any securities legislation of any state in the United States, and they may not be offered, sold, resold delivered, distributed, bought or transferred in the United States or to any U.S. Person (as defined above), except pursuant to an exemption from the registration requirements of the U.S. Securities Act and any applicable state law legislation. The provisions relating to distribution of any offer materials in the United Kingdom or to relevant persons referred to above shall apply mutatis mutandis to any such offer materials relating to the New Hybrid Bonds.

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Finnair is a network airline specialising in passenger and cargo traffic between Asia and Europe. Helsinki’s geographical location gives Finnair a competitive advantage, since the fastest connections between many European destinations and Asian megacities fly over Finland. Finnair’s vision is to offer its passengers a unique Nordic experience, and its mission is to offer the smoothest, fastest connections in the northern hemisphere via Helsinki and the best network to the world from its home markets. Finnair is the only Nordic carrier with a 4-star Skytrax ranking and a member of the oneworld alliance. In 2014, Finnair’s revenues amounted to EUR 2,400 million and it had a personnel of almost 4,500 at the year-end. Finnair Plc’s shares are quoted on Nasdaq Helsinki.