Nokia Outokumpu Coupon

14 January 2011

The outlook for Nokia and Outokumpu, shares recommended by Nordea, i s bright. The economic cycle is gradually shifting towards slower, sustainable growth and the equity markets are stabilising. Nokia Outokumpu Coupon is an investment with a maturity of at most approximately three years. It will give a better yield than a direct equity investment if the share prices of Nokia and Outokumpu rise moderately. The investment is redeemed before maturity if the values of both shares are at least at their initial levels on the annual valuation date. The investment has no capital protection, which means the investor may lose the invested capital partially or in full.

The investment in brief The outlook for the shares of Nokia and • A bond issued by Nordea Bank Finland Plc. Its Outokumpu is good. With its strong brand, Nokia maturity is at most approximately three years is expected to profit from the growth of the mobile and its yield is based on the performance of phone market, and Outokumpu, one of the world's the reference assets, the shares of Nokia most competitive stainless steel producers, is Corporation and Outokumpu Plc. supported by the demand for stainless steel, • The coupon is approximately 17%* which is picking up. After the brisk economic • Subscription period 17 January–25 February recovery in the early 2010, the cycle is now 2011 shifting towards sustainable but slower growth. • Subscription price variable, about 100% The equity market, too, has moved sideways after • Minimum subscription EUR 10,000 a strong rise. • The investment will be redeemed before maturity if the values of both shares are at Nokia Outokumpu Coupon suits investors who least their initial levels on the annual valuation have a neutral or slightly positive view of the date. If the investment is redeemed before future share price performance of Nokia and maturity, the investor is paid a yield the amount Outokumpu and who believe that the probability of of which depends on the redemption date. The a sharp fall in the values of these shares is small. yield is the coupon multiplied by the number of The investment gives an opportunity to obtain a past annual periods. 17%* yield already after the first year. • If the investment is not redeemed before maturity, the yield on the bond depends on the The investment has no capital protection, but values of the shares on the closing date. even a considerable fall in the value of the reference shares has no effect on the repayment • The nominal capital is not repaid in full if the of the nominal capital. The nominal capital investment has not been redeemed before invested is not repaid to the investor in full if on maturity and the value of the share with the the closing date 5 February 2014 the value of the weakest performance has fallen by over 50 per reference asset with the weakest performance cent by the closing date. has decreased by more than 50% of its initial • The bond involves the risk of the issuer’s value. Hence the bond suits investors who do not repayment ability and of losing any potential believe that the share prices of Nokia or amount paid over par. Outokumpu will collapse within the next three • The investment has no capital protection, years. which means the investor may lose the invested capital partially or in full . Nordea's recommendations and 12-month target • Under normal market conditions Nordea prices for the shares of Nokia and Outokumpu. quotes a repurchase price for the investment. Recommendation Target price Why invest in Nokia Outokumpu Coupon? Nokia Strong Buy 10.5 This bond is a good alternative to direct equity Outokumpu Buy 15.5 investments. The investor has the opportunity to Recommendation on Nokia given on 22 October 2010 and on receive a good return on the investment already Outokumpu given on 14 December 2010. after the first year if the share price performance of Nokia and Outokumpu is neutral or moderately positive.

* 17% is the expected coupon. The coupon will be at least 15% and it will be determined on 3 February 2011.

Performance of the shares of Nokia and the nominal capital if the final values of all the Outokumpu December 2005–December 2010 reference assets are at least their initial levels (starting level indexed at 100%). on 5 February 2014. • The nominal capital in full if the final value of 350 % the reference asset with the weakest Nokia Outokumpu performance is lower than the initial value but 300 % at least 50% of its initial value. (Final value/initial value) x nominal capital if the 250 % • final value of the reference asset with the 200 % weakest performance is less than 50% of the initial value. In this case the repayable amount 150 % is calculated according to the value of the reference asset with the weakest performance. 100 %

50 % More detailed definitions and yield calculation are presented in the bond terms which the investor 0 % should read before making an investment 12/05 12/06 12/07 12/08 12/09 12/10 decision.

The presented figures descri be previous yield or value performance, and no reliable assumptions on future yield or value can be made Risks of the investment based on them. Source: Bloomberg. Nokia Outokumpu Coupon has no capital Yield on the investment protection, the investor may lose the invested The yield on the bond depends on the capital partially or in full if the bond has not been performance of the share prices of Nokia and redeemed before maturity and on 5 February Outokumpu during the investment period. The 2014 the value of the share with the weakest investment can be redeemed before maturity performance has fallen by over 50 per cent from annually or the investment can fall due at maturity. its initial value. No yield is paid on the investment The maximum investment period is approximately if the value of the share with the weakest three years. performance is below its initial level on every valuation date. Any amount paid over par at The investment is redeemed before maturity if the subscription is not repaid to the investor. values of both shares are at least their initial levels on the annual valuation date. For each As the bond is unsecured, it involves the risk of annual period, there is a potential coupon of 17%* the issuer's, Nordea Bank Finland Plc's, which is paid to the investor in the case of repayment ability. The risk relating to the issuer's redemption. The yield is the coupon multiplied by repayment ability means the risk that the issuer the number of the annual periods elapsed. The becomes insolvent and cannot fulfil its table below presents the yield calculation commitments. The investor can hence lose the according to different redemption dates. Besides invested capital and the possible yield partially or the yield, the investor is repaid the nominal capital in full in the event of the issuer's insolvency. in full. Nordea has been given a credit rating Aa2 by Moody's and AA- by Standard & Poor's. The bond Yield table if the investment is redeemed is unsecured. When making an investment before maturity: decision, investors should consider the total risk relating to the capital and the issuer. Annual valuation date Redemption dateYield ** Yield p.a** Under normal market conditions Nordea quotes a 5 Feb 2012 20 Feb 2012 17% 17% repurchase price for the investment. The 5 Feb 2013 20 Feb 2013 34% 15.8% repurchase price may be lower or higher than the nominal value. **The subscription price 100% and the 17% coupon are used in the calculation.

The investment matures on 20 February 2014 Market review unless it has been redeemed before maturity. In such a case the amount of the nominal capital and The heavy share price volatility, which started the yield payable to the investor depend on the after last autumn's reporting season, continued in final values of the reference assets on the closing November and the equity markets moved date 5 February 2014. The amount to be repaid to sideways towards the end of the year. As in the the investor at maturity is: major markets, the trend on the Helsinki stock • The nominal capital in full and a 51%* yield exchange has been slightly upwards. The market (corresponds to an annual yield of 14.7%) on trend has, however, been clearly two-fold. The

* 17% is the expected coupon. The coupon will be at least 15% and it will be determined on 3 February 2011.

industrials, and the engineering industry in with the Motorola deal, expected to be closed at particular, have risen strongly, whereas the share the turn of the year. price performance of the largest listed companies, like Nokia, Fortum, the forest companies and Outokumpu Outokumpu, has been moderate. Outokumpu is one of the world's most competitive stainless steel producers. The company is the After the strong rally, which lasted throughout the world's sixth largest stainless steel producer, with autumn, the share prices on the Helsinki stock a market share of about 17% in Europe and 5% exchange have moved sideways, within a globally. Outokumpu's competitive edge is largely fluctuation range of about four per cent. Investors based on its own chrome mine. Indeed, hoped that the reporting season would give some Outokumpu has announced it will double its direction to the equity markets, but that did not ferrochrome production, which will make the materialise. The earnings as such were good, and company more than self-sufficient in ferrochrome. even if the announcement of the US stimulus The production of stainless steel and ferrochrome package at the beginning of November was is extremely energy intensive. Outokumpu has expected, there was no base for a further price signed a deal with Vattenfall on electricity rally in the wake of the debt problems of the EU deliveries up to 2020. Outokumpu is also involved fringe countries coming into focus again. with a 10% stake in the Fennovoima nuclear Certainly, the markets have also avoided a power plant initiative. correction, because the economic data – although contradictory – has been good enough for the The main applications for stainless steel products markets. Against this backdrop, it is are in construction industry, transportation, understandable, and after the strong rally even process and raw materials industries, catering healthy, that the share prices now take a breather industry and households. Outokumpu's strong and move sideways until the uncertainty domains are the chemical and petrochemical dissipates. industry and the pulp and paper industry.

Nokia The market for stainless steel has suffered from overcapacity and low investment activity. The end The outlook for Nokia has recently turned more demand has, however, began to pick up slowly positive than before. After a few difficult years, the and the capacity utilisation rate has already risen consensus estimates now indicate a turn for the from the 50–60% level to over 70–75%. The better, and the company's net sales and operating volume and price trend in H2 2010 has been profit are estimated to grow in the coming years. modest, mainly due to changes in the price of nickel and the subsequent changes in the In late 2010, the smartphone products range of customer buying behaviour. Nevertheless, it has the important mobile phone unit was renewed with been estimated that the real end-product demand the new Symbian operating system. The new has continued to grow. The largely investment- products will improve Nokia's competitive edge driven demand for special grades has so far, especially in the mid-range and high-end devices, however, been softer. With the economic whereas in the market of cheap smartphones and recovery, investments are bound to start picking low-end phones the company has always fared up at some point. Outokumpu has already well. With the new product range the company announced price rises for Q1 2011. also has better chances to maintain its present market share and raise the average prices of smartphones. More relief can be expected in mid- Source: Nordea Equity Research & Strategic Investment 2011 when we anticipate the next-generation Advice, December 2010. MeeGo-based products to see the light of day.

NAVTEQ was the star of 2010, as the number of the users of the navigation application delivered with smartphones increased strongly. This has also resulted in clearly growing net sales and profitability, which is expected to continue in 2011. The situation of NSN has visibly improved from 2009, and after many difficult years, the network infrastructure market is expected to turn to a growth track in 2011. The size, geographical reach and profitability of NSN will further improve

* 17% is the expected coupon. The coupon will be at least 15% and it will be determined on 3 February 2011.

Issue terms in brief

Issuer Nordea Bank Finland Plc, credit ratings Aa2 (Moody´s) and AA- (S&P). Reference assets Nokia Corporation (Bloomberg: NOK1V FH) Outokumpu Plc (Bloomberg: OUT1V FH) Issue date 17 January 2011 Maturity date 20 February 2014 Subscription period 17 January–25 February 2011 Places of subscription Nordea Private Banking and Nordea Markets Subscription price Variable, approximately 100% Minimum subscription EUR 10,000 Coupon 17%* Starting date The closing values of the reference assets on 2 March 2011. Annual valuation dates 5 February 2012 and 5 February 2013 Early redemption The investment is redeemed before maturity if the values of both shares serving as the reference assets are at least their initial levels on the annual valuation date. In this case the nominal capital is repaid in full and the yield is paid to the investor. The amount of the payable yield depends on which valuation date the values of the reference assets are at least their initial levels. The yield is calculated as follows: the coupon multiplied by the valuation date multiplier in which the valuation date multiplier is the number of the realised valuation dates. Repayment at maturity If the investment has not been redeemed before maturity, the yield and the repayable amount depend on the final values of the reference assets on the closing date 5 February 2014 as follows: - The investor receives the nominal capital in full and a 51%* yield on the nominal capital if the final values of all the reference assets are at least their initial levels. - The investor receives the nominal capital in full if the final value of the reference asset with the weakest performance is lower than the initial value, but at least 50% of the initial value. - The investor receives (Final value/initial value) x nominal capital if the final value of the reference asset with the weakest performance is less than 50% of the initial value. In this case the repayable amount is calculated according to the value of the reference asset with the weakest performance. Security The investment is unsecured. The bond involves the risk of the issuer’s repayment ability. Structuring cost The subscription price includes an annual structuring cost of approximately 0.83%. The presented subscription price and yield include all costs. Secondary market Under normal market conditions Nordea Bank Finland Plc aims to quote a repurchase price for the investment. The repurchase price may be lower or higher than the nominal value. Taxation Possible yield is subject to tax at source on interest income for natural persons resident in Finland and Finnish death estates. Non Finnish residents are not subject to tax at source. Safe custody Free of charge with Nordea Bank Finland Plc. Cancellation of the issue The issuer has the right to cancel the issue based on changes in the economic circumstances or if the total amount of subscriptions is low, or if something should occur that the issuer considers might endanger the issue or if the Coupon cannot be determined to be at least 15%.

Listing If the total amount of subscriptions is sufficient, an application will be made for the bonds to be listed on NASDAQ OMX Helsinki.

Bond 4461 under the Medium-Term Note Programme (a bond programme reported to the Finnish Financial Supervisory Authority from Sweden in accordance with the Prospectus Directive) of Nordea Bank AB (publ) and Nordea Bank Finland Plc dated 25 May 2010. The bond-specific terms and the base prospectus are available at the places of subscription. Read the issue terms and the base prospectus before subscription. The Swedish version of the terms is binding and thus applied in possible dispute situations.

Nordea Markets is the name of the Markets departments of Nordea Bank Norge ASA, Nordea Bank AB (publ), Nordea Bank Finland Pl c and Nordea Bank Danmark A/S. The information provided herein is intended for background information only a nd for the sole use of the intended recipient. The views and other information provided herein are the current views of Nordea Markets on the date of th is document and are subject to change without notice. This document is not an exhaustive description of the described product or the risks related to it, and it should not be relied on as such, nor is it a substitute for the judgement of the recipient. The informa tion provided herein is not intended to constitute and does not constitute investment advice nor is the information intended as an offer or solicitation for the purchase or sale of any financial instrument. The information contained herein has no regard to the specific investme nt objectives, the financial situation or particular needs of any particul ar recipient. Relevant and specific professional advice should always be obtained before making any investment or credit decision. It is important to note that past performance is not indicative of future results. Nordea Markets is not and does not purport to be an adviser as to legal, taxation, accounting or regulatory matters in any jurisdiction. This document may not be copied, distributed or published for any purpose without the prior consent in writing of Nordea Markets.

* 17% is the expected coupon. The coupon will be at least 15% and it will be determined on 3 February 2011.