Finnair issues EUR 200 million hybrid bond

Finnair Plc             Stock Exchange Release             27 August 2020 at 09.00 a.m. EEST

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, SINGAPORE OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

Finnair Plc (the “Company”) issues new euro-denominated in aggregate EUR 200 million capital securities (the “New Capital Securities”). The New Capital Securities will bear interest at a fixed interest rate of 10.250 per cent per annum until the step-up date of 3 September 2023 (“Step-up Date”) and thereafter, the fixed interest rate will be 15.250 per cent per annum. The New Capital Securities do not have a specified maturity date but the Company is entitled to redeem the New Capital Securities at par on any day during the three (3) month period prior to and including the Step-up Date, and subsequently, on each annual interest payment date thereafter. The issue date is expected to be on or around 3 September 2020.

The Company is not required to redeem the New Capital Securities at any time and they are not redeemable on demand of the holders of the New Capital Securities. Interest accrues on the New Capital Securities and becomes payable in accordance with terms and conditions of the New Capital Securities. The New Capital Securities constitute subordinated obligations of the Company and will be treated as equity in the Company’s consolidated financial statements prepared in accordance with IFRS. The New Capital Securities do not confer their holder the rights of a shareholder nor do they dilute the holdings of the current shareholders.

”Refinancing of the existing hybrid bond further supports our balance sheet strength”, says Finnair’s CFO Mika Stirkkinen. “In addition to the support of our shareholders as demonstrated by our successful rights issue, we maintain a diversified investor base by using equity instruments, such as the hybrid bond, as we seek to mitigate the impacts of the COVID-19 pandemic on our capital structure”.

Application will be made for the New Capital Securities to be admitted to trading on the official list of Nasdaq Helsinki Ltd. The proceeds of the offering will be used, on or about the issue date or shortly thereafter, for the financing of the redemption of the Company’s existing capital securities.

Citigroup Global Markets Limited, Nordea Bank Abp and OP Corporate Bank plc acted as Joint Lead Managers of the issue of the New Capital Securities (the “Joint Lead Managers”).

FINNAIR PLC

Further information:

Finnair communications, 358 9 818 4020, comms@finnair.com

Distribution:

NASDAQ OMX Helsinki

Principal media

Finnair is a modern premium 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 is the only Nordic network carrier with a 4-star Skytrax ranking and a member of the oneworld alliance. In 2019, Finnair’s revenues amounted to EUR 3,098 million and it carried over 14.7 million passengers. Finnair Plc’s shares are quoted on the Nasdaq Helsinki stock exchange.

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 Capital Securities may, in certain jurisdictions, be restricted by law. No actions have been taken to register or qualify the New Capital Securities, or otherwise to permit a public offering of the New Capital Securities, in any jurisdiction. Any offering material or documentation related to the New Capital Securities may be received only in compliance with applicable exemptions or restrictions. Persons into whose possession this release or any such offering material or documentation may come are required to inform themselves of and observe all 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. In particular, this release and any such offering material or documentation may not be distributed in the United States, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa or any other jurisdiction in which it would not be permissible to offer the New Capital Securities and this release and any related material concerning the issuance of the New Capital Securities may not be sent to any person in the before mentioned jurisdictions. 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 the New Capital Securities, to any person in any jurisdiction in which such offer, solicitation or sale or tender would be unlawful. Neither Finnair nor the Joint Lead Managers, or their representatives accept any legal responsibility for any violation by any person, whether or not the persons contemplating investing in or divesting Finnair's securities, including the New Capital Securities, are aware of such restrictions.

The New Capital Securities have not been and will not be registered under the U.S. Securities Act of 1933 (as amended, the “U.S. Securities Act”), or under the securities laws of any state or other jurisdiction of the United States. The New Capital Securities may not be offered, sold, pledged or otherwise transferred directly or indirectly within the United States or to, or for the account or benefit of, U.S. Persons (as such terms are defined in Regulation S under the U.S. Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

The information provided in this release and any offer materials relating to the New Capital Securities is addressed to and directed only at persons in the United Kingdom in circumstances where provisions of section 21(1) of the Financial Services and Markets Act 2000 as amended, do not apply and are solely directed at persons in the United Kingdom who (a) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (b) persons falling within Article 49(2)(a) to (d) of the Order, or other persons to whom they may be lawfully communicated (all such persons together being referred to as “relevant persons”). This release is directed only at relevant persons and any person who is not a relevant person must not act or rely on this release or any of its contents.