NONG - SpareBank 1 Nord-Norge strengthens its equity

The Main Board of Directors of SpareBank 1 Nord-Norge proposes an equity issue of up to NOK 600 million by means of:

• A guaranteed rights issue towards existing equity certificate holders of NOK 450 million
• A private placement of up to NOK 150 million

The background to the proposal to strengthen the equity is as follows:

• New international regulations for capital adequacy significantly alter the calculation of - and minimum requirements for - bank solidity.  SpareBank 1 Nord-Norge wishes at an early stage to ensure that the group's capital adequacy is in accordance with the new regulations.
• The bank wishes to confirm its position of being undisputedly solid

The planned issues will increase the group's core capital adequacy by approximately 1.3 percentage points, compared with 31.12.2010.

The rights issue is guaranteed by a consortium consisting of SpareBank 1 SMN, SpareBank 1 SR-Bank, Sparebanken Hedmark and Samarbeidende Sparebanker AS.

The plan is that the private placement of up to NOK 150 million will mainly be towards Sparebankstiftelsen SpareBank 1 Nord-Norge and the group's employees and members of the the Main Board of Director and the regional Boards of Directors.

Sparebankstiftelsen SpareBank 1 Nord-Norge is a charitable foundation that is in the process of being established.  The main purpose of the foundation is to be a long-term and stable owner of SpareBank 1 Nord-Norge.

The private placement towards Sparebankstiftelsen will be on market terms.  The private placement towards employees and members of the the Main Board of Director and the regional Boards of Directors, will be at a discount, and will further be subject to a lock-in period before onward sale, in line with previous sales of equity capital certificates to the aforesaid.

SpareBank 1 Nord-Norge will also carry out a bonus issue and a split of the bank's equity capital certificates.  Refererence is made to the release published on 9.2.2011 regarding publication of the group's provisional accounts for 2010.

Arctic Securities and SpareBank 1 Markets represented by Argo Securities and SpareBank 1 Nord-Norge Markets are arrangers of the above transactions.

Provisional time schedule:

29 and 30 March 2011:              Supervisory Board meetings

30 March 2011:                         The Bank's equity capital certificates trade ex dividend
31 March 2011:                         The Bank's equity capital trade ex  right to allotment of new equity capital certificates in the bonus issue
5 April 2011:                             The bonus issue  and the split is completed in VPS
5 May 2011:                             Pricing and other terms in the rights issue and the private placement is decided
6 May 2011:                             The equity capital certificates trade  ex rights in the rights issue
12-26 May 2011:                       Subscription period and trading of subscription rights on the Oslo Stock Exchange
31 May 2011:                           Allotment of new equity capital certificates in the rights issue
7 June 2011:                             Listing of the new equity capital certificates from the rights issue on the Oslo Stock Exchange