Finnair has successfully placed EUR 200 million hybrid bonds

Finnair Plc            Stock Exchange Release                1 October 2015 at 5:15 pm 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.

Finnair Plc successfully placed EUR 200 million hybrid bonds on 1 October 2015 (the “New Hybrid Bonds”).

The initial coupon rate of the New Hybrid Bonds is fixed at 7.875 per cent per annum, but it will be subject to a coupon reset on each 5th anniversary of the issue date of the New Hybrid Bonds. The New Hybrid Bonds have no specified maturity date, but Finnair may exercise its redemption option on the 5th anniversary of the issue date of the New Hybrid Bonds and on each annual interest payment date thereafter.

The New Hybrid Bonds were significantly oversubscribed and were allocated to more than 100 investors. The New Hybrid Bonds are expected to be issued on 13 October 2015.

The launch of the voluntary cash tender offer (the “Tender Offer”) announced on 28 September 2015 by Finnair for its outstanding hybrid bonds issued on 26 November 2012 (the “2012 Hybrid Bonds”) is conditional upon the successful issue of the New Hybrid Bonds, and Finnair considers it has received indications of a sufficient amount of subscriptions for the New Hybrid Bonds to proceed with the Tender Offer. As a result, in the absence of any unforeseen development, Finnair expects that it will complete the Tender Offer in accordance with, but subject always to, the terms and conditions of the Tender Offer contained in the Tender Offer Memorandum dated 28 September 2015 (the “Tender Offer Memorandum”) relating to the Tender Offer.

"We are pleased to have successfully placed new hybrid bonds, which constitute Finland's largest hybrid bond issue to date. We are especially pleased with the strong demand from international and domestic investors, which clearly indicates confidence in Finnair and our ability to successfully implement our strategy in the current market environmen," says Finnair CFO Pekka Vähähyyppä.

The New Hybrid Bonds, like Finnair’s 2012 Hybrid Bonds, which are the subject of the Tender Offer, are debt instruments, which are subordinated to Finnair’s unsubordinated debt obligations and treated as equity in the consolidated financial statements under IFRS. The New Hybrid Bonds do not confer on their holders the right to vote at shareholder meetings and do not dilute the holdings of the current shareholders.

Finnair has appointed Danske Bank Oyj as tender agent and Danske Bank A/S and each of Danske Bank A/S and Morgan Stanley & Co. International plc as dealer managers 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 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

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 Tender Offer or issuance of the New Hybrid Bonds are prohibited or restricted by law in certain countries. The Tender Offer is not being made and 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 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 or 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 Joint Lead Managers or their respective representatives assume any legal responsibility for such violations, regardless of whether persons contemplating investing in or divesting Finnair’s securities including New Hybrid Bonds or the 2012 Hybrid Bonds are aware of these restrictions or not.

Persons into whose possession this communication or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This communication is not an offer of securities for sale in the United States. The securities referred to herein (including the New Hybrid Bonds) have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or under the securities laws of any state or other jurisdiction of the United States. Accordingly, the securities referred to herein may not be offered, sold, taken up, exercised, resold, transferred or delivered, directly or indirectly, in or into the United States, or for the account or benefit of, U.S. persons absent registration under, or pursuant to an applicable exemption from, the registration requirements of the Securities Act and in compliance with any relevant state securities laws. There will be no public offer of the securities referred to herein in the United States.

This communication is not being made, and this communication has not been approved, by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000, as amended (the “FSMA”). Accordingly, this communication is not being distributed to, and must not be passed on to, the general public in the United Kingdom or to persons in the United Kingdom save in circumstances where section 21(1) of the FSMA does not apply. This communication is being distributed on the basis that each person in the United Kingdom to whom it is made available or at whom it is directed is (i) an investment professional within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) of the United Kingdom (the “Financial Promotion Order”); (ii) a person within Articles 49(2)(a) to (d) (“high net worth companies, unincorporated associations, etc.”) of the Financial Promotion Order; or (iii) any other person to whom it may otherwise lawfully be communicated by virtue of an exemption to section 21(1) of the FSMA or otherwise in circumstances where it does not apply (all such persons together being referred to as “relevant persons”). This communication and the securities referred to herein are, and will be made, available only to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, such relevant persons. No other person should rely or act upon it.

This communication is an advertisement and not a prospectus for the purposes of Directive 2003/71/EC, as amended.

Stabilisation Notice

Danske Bank A/S (contact: Jens Ismunden; telephone: +45 45 14 67 99) hereby gives notice as Stabilisation Manager may stabilise the offer of the following securities in accordance with Commission Regulation EC/2273/2003 implementing the Market Abuse Directive (2003/6/EC).

In connection with the offer of the above securities, the Stabilisation Manager(s) may over-allot the securities or effect transactions with a view to supporting the market price of the securities at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilisation Manager(s) will take any stabilisation action and any stabilisation action, if begun, may be ended at any time.

ICMA/FCA stabilisation.

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.