Samhällsbyggnadsbolaget I Norden Ab (Publ)
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SUPPLEMENT DATED 17 DECEMBER 2019 TO THE BASE PROSPECTUS DATED 26 APRIL 2019 SAMHÄLLSBYGGNADSBOLAGET I NORDEN AB (PUBL) (incorporated with limited liability in Sweden) €2,500,000,000 Euro Medium Term Note Programme This supplement (the "Supplement") is supplemental to, forms part of and must be read and construed in conjunction with, the base prospectus dated 26 April 2019, the base prospectus supplement dated 3 May 2019 and the base prospectus supplement dated 10 July 2019 (together the "Base Prospectus") prepared by Samhällsbyggnadsbolaget i Norden AB (publ) (the "Issuer") in connection with its Euro Medium Term Note Programme (the "Programme") for the issuance of up to €2,500,000,000 in aggregate principal amount of notes ("Notes"). Terms given a defined meaning in the Base Prospectus shall, unless the context otherwise requires, have the same meaning when used in this Supplement. The purpose of the Supplement is to: 1. incorporate by reference into the Base Prospectus the unaudited interim consolidated financial statements of the Issuer and auditor's report in respect of the nine-month period ended 30 September 2019 (the "Unaudited Q3 2019 Financial Statements") as set out on pages 8 to 15 (inclusive), 28 to 32 (inclusive) and 35 of the Issuer's report for the first nine months of 2019; 2. update the section entitled "Description of the Issuer and its operations" and "Risk Factors" in the Base Prospectus; 3. include new sections entitled "Pro Forma Statement", "Auditor's Report on the Pro Forma Statement", "The Combined Company", "Selected Consolidated Financial, Operating and Other Data", "Ownership Structure", "Legal Considerations and Supplementary Information" and "Description of Hemfosa"; 4. append to the Base Prospectus the annual report of Hemfosa Fastigheter AB (publ), reg. no. 556917- 4377 ("Hemfosa") for the 2018 financial year and the interim report of Hemfosa for the period 1 January to 30 September 2019; and 5. update the section entitled "General Information" in the Base Prospectus. This Supplement has been approved by the Central Bank of Ireland (the "CBI"), as competent authority under Directive 2003/71/EC, as amended (the "Prospectus Directive"), as a base prospectus supplement for the purposes of Article 16 of the Prospectus Directive. The CBI only approves this Supplement as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. The Issuer accepts responsibility for the information contained in this Supplement. To the best of the knowledge of the Issuer, having taken all reasonable care to ensure that such is the case, the information contained in this Supplement is in accordance with the facts and contains no omission likely to affect its import. To the extent that there is any inconsistency between (a) any statement in this Supplement or any statement incorporated by reference into the Base Prospectus by this Supplement and (b) any other statement in, or incorporated by reference into, the Base Prospectus, the statements in (a) above will prevail. - i - Save as disclosed in this Supplement, there has been no other significant new factor, material mistake or inaccuracy relating to information included in the Base Prospectus which is capable of affecting the assessment of the Notes issued under the Programme since the publication of the Base Prospectus. Any websites referred to within this Supplement, including https://sbbnorden.se/wp- content/uploads/2019/07/SBB-Q2-2019_EN.pdf do not form part of this Supplement. - ii - CONTENTS Page Amendments to Base prospectus section ...................................................................................................... 2 Amendments to "Risk Factors" section ........................................................................................................ 3 Amendments to "Documents Incorporated by Reference" section ............................................................... 5 Amendments to "Description of the Issuer and its Operations" section ....................................................... 6 New Sections .............................................................................................................................................. 21 Amendments to "General Information" Section ......................................................................................... 58 New Appendices......................................................................................................................................... 59 - 1 - AMENDMENTS TO BASE PROSPECTUS SECTION With effect from the date of this Supplement, the first sentence of the penultimate paragraph on page i of the Base Prospectus shall be replaced with and the paragraph shall begin by reading as follows: "The Issuer has been rated BBB- (positive) by S&P Global Ratings Europe Limited ("S&P") and BBB- (stable) by Fitch Ratings Limited ("Fitch")." - 2 - AMENDMENTS TO "RISK FACTORS" SECTION With effect from the date of this Supplement: 1. the following risk factors shall be added to the section titled "Factors that may affect the Issuer's ability to fulfil its obligations under Notes issued under the Programme " on page 5 of the Base Prospectus: "Risks relating to the Offer (as defined below) The Offer is subject to significant uncertainties On 15 November 2019, the Issuer made a recommended public takeover offer (the "Offer") to shareholders in Hemfosa, to acquire all ordinary and preference shares in Hemfosa. The Issuer has set certain conditions for the completion of the Offer, amongst others that the Offer is accepted to such an extent that the Issuer will become the owner of 90 per cent. of the total amount of shares in Hemfosa and that required approvals from authorities are obtained within a period of time that is acceptable for the Issuer. Due to these conditions being out of the control of the Issuer, there is a risk that the Offer might not be completed. The uncertainty related to the completion of the Offer could result in adverse impact on the price of the Issuer's shares. After the completion of the Offer, Hemfosa will be a part of the operations of the Group When the Offer is completed, Hemfosa's business will become a part of the Group's business. There is a risk that the merger of the Group and Hemfosa is made more difficult or impossible by factors currently unknown to the Issuer. In the section "The Combined Company", the expected effects of the Transaction (as defined below) are described. Amongst others the cost and growth synergies that the Transaction may entail are described. Whether these synergies will be realised depends on a number of factors and is based on the Issuer's assessment of future circumstances. However, there is a risk that the synergies might not be fully realised. Improved integration is required upon the acquisition of a new company to enable synergies in the new business. Since the intent is to coordinate the business in several different operations it is important that the integration process runs efficiently and without material loss of customers or personnel leaving. If the integration process continues for a longer period of time than currently expected, there is a risk that the Group with Hemfosa as a fully owned subsidiary (together, the "Combined Company") is adversely affected. There is a risk that the synergies and other positive effects that the Issuer expects do not realise fully, or at all, which could adversely impact the Combined Company's business. In connection with the completion of the Offer, goodwill will be accrued that over time may turn out to be misleading and lead to write-downs. In connection with the completion of the Offer, goodwill will be accrued. This goodwill will be stated in its entirety in the Combined Company's statement of financial position. If the consideration paid by the Issuer to acquire Hemfosa over time would prove to be misleading and lead to write-downs it would mean that the Combined Company's equity and thereby solvency, would be diminished. Information on Hemfosa has been derived from public sources and has not been independently verified by the Issuer The information included in this Base Prospectus in relation to Hemfosa has principally been compiled on the basis of publicly available information and has not been verified by the Issuer or Hemfosa or Hemfosa's directors. Therefore, following completion of the Offer, the Group may become subject to unknown liabilities or obligations of Hemfosa, which may have a material adverse effect on the Group's business, results of operations and financial condition." 2. the following paragraphs shall be added to the end of the risk factor titled "Macroeconomic factors" on page 5 of the Base Prospectus: - 3 - "Additionally, the Group's community service portfolio is affected by demographic trends such as the growing prevalence of aging populations and increasing rural-to-urban migration in the Nordic region. The demographic trends impact the level of supply and demand for the Group's properties and fluctuations in demography could have a have a material adverse effect on the Group's results of operations and profitability." 3. the following paragraphs shall be added to the end of the risk factor titled "Acquisition and sales of properties" on page 7 of the Base Prospectus: "Additionally, in the Group's acquisition agreements, fixed-term warranties regarding the property and the acquired company are regularly provided by the seller. These warranties may not cover all risks or may fail to cover