Forestry Bond Stora Enso and UPM-Kymmene

Forestry Bond Stora Enso and UPM- Forestry Bond Stora Enso and UPM-Kymmene in brief Kymmene offers good potential annual • A bond issued by Nordea Bank Finland Plc. The maturity of the bond is approximately 5 years. minimum yield and the chance to benefit • The capital returned and yield paid during the from rising interest rates if the reference investment period depend on the reference companies' solvency during the Credit Event companies stay solvent. Both companies Period. • The reference companies are Stora Enso Plc have reported strong cash flow figures (Ba2/BB) and UPM-Kymmene Plc (Ba1/BB). • The annual yield corresponds to the 3-month which strengthens their creditworthiness. Euribor rate plus 2.5%, but it is always at least The investment has no capital protection, the minimum yield* unless a Credit Event occurs in either of the reference companies. which means the investor can lose the • The yield is paid quarterly. • Subscription price is variable, approximately 100%. invested capital or the yield in part or • Minimum subscription EUR 10,000 in full. • Subscription period 17 January to 25 February 2011. • The investment involves the risk of the issuer’s repayment ability and of losing any possible amount paid over par. • Under normal market conditions Nordea quotes a repurchase price on the investment on nominal values of EUR 10,000 or more. • The investment is not capital protected, which means the investor can lose the invested capital in part or in full.

Why invest in Forestry Bond Stora Enso and UPM-Kymmene? The present market situation offers investors in Forestry Bond Stora Enso and UPM-Kymmene an attractive opportunity to enjoy higher yield than is available from government bonds or deposits. The investment offers a minimum yield* and the chance to benefit from rising interest rates if both reference companies stay solvent.

The higher yield is made possible by bearing Stora Enso's and UPM-Kymmene's credit risks. The recent earnings of these companies have been strong especially with respect to their credit ratings. Furthermore,

* Expected minimum yield is 4.5%. The final minimum yield will be confirmed on 28 February 2011 and it will be at least 4.1%. The issuer will cancel the issue if the minimum yield cannot be confirmed as at least 4.1%. our view is supported by the better than anti- (senior unsecured bonds) were 38% on average. cipated economic growth figures and higher When credit events increase, the recovery rates investor confidence. Later in this brochure you usually drop. Detailed definitions are available can read the detailed views of Nordea's experts in the loan terms and conditions, which the on the situation in the corporate bond markets. investor should read before making an investment decision. Yield on the investment The yield of the Forestry Bond Stora Enso and Risks of the investment UPM-Kymmene depends on the performance The investment has no capital protection, of the 3-month Euribor and on any potential which means the investor can lose the invested Credit Event facing Stora Enso or UPM- capital in part or in full. If Stora Enso or UPM- Kymmene. The annual yield corresponds to Kymmene cannot fulfil the financial obligations 3-month Euribor rate plus 2.5%, but it is of their debts and faces a Credit Event, the always at least the minimum yield* unless a amount of capital returned to the investor credit event occurs in either of the reference decreases. The amount of capital returned companies. The yield is paid quarterly. The depends on the recovery rate of the company payment of yield will terminate from the date first facing a credit event. In this case the of any credit event. investment matures early.

The yield is paid and the principal is returned As the bond is unsecured, it involves the risk in full at maturity if the operations of both of the issuer’s, Nordea Bank Finland Plc’s, reference companies continue as normal and repayment ability. The risk relating to the issuer's neither of them faces a credit event during the repayment ability means the risk that the issuer Credit Event Period. The credit event period is becomes insolvent and cannot fulfil its commit - the period of time between 28 February 2011 ments. The investor can hence lose the capital and 20 March 2016. invested and the possible yield partially or in full due to the issuer's insolvency. Nordea has The payment of yield ends and the bond matures been given a credit rating Aa2 by Moody’s and early if Stora Enso or UPM-Kymmene face a AA- by Standard & Poor’s. credit event. In this case only the amount of the recovery rate of the company first facing a The investor can lose the capital invested credit event of the principal will be returned exceeding the nominal value either partially along with any possible positive market value or in full. Under normal market conditions of the interest rate floor swap. Nordea quotes a repurchase price on the investment on nominal values of EUR 10,000 Credit Event or more. The secondary market price can A credit event refers to a status where a reference fluctuate heavily, so the bond is intended as company is in serious financial difficulties and a 'buy and hold' investment. When making an cannot fulfil the payment obligations relating investment decision, investors should consider to its debts. Credit events comprise the Bank - the total risk in their portfolios relating to the ruptcy of a reference company, Failure to Pay, reference companies and the issuer. and Restructuring comparable to debt restructuring. In a credit event the company's creditors and credit investors suffer credit losses. The amount of the credit loss is determined by the recovery rate. The recovery rate can vary from 0% to 100%. The long-term average has been around 40%. In 2009 the recovery rates

Example 1 Positive scenario An investor invests EUR 100,000 in the bond. The operations of both reference companies continue as normal throughout the Credit Event Period, which means that no Credit Events occur. Yield on the bond is paid quarterly and at maturity the issuer repays the principal amount of the bond in full. Example 2 Negative scenario An investor invests EUR 100,000 in the bond. After about two years one of the reference companies ends up in a status fulfilling the definitions of a Credit Event. The recovery rate is determined as 65%. On the early maturity date the customer is repaid the capital in accordance with the recovery rate, which is 65% of the original capital i.e. EUR 65,000. Payment of yield ends on the date on which a Credit Event is announced. Example 3 The worst possible scenario An investor invests EUR 100,000 in the bond. After the issue date one of the reference companies ends up in a status fulfilling the definitions of a Credit Event and the recovery rate is determined as 0%. The payment of yield ends on the date the Credit Event is announced and the investor loses the capital invested in full.

Information on the reference companies

Stora Enso Plc (Ba2/BB) Stora Enso is one of the world's largest manufacturers of paper, packaging and wood products. The company's product range includes newsprint (24% of sales in 2009), magazine paper (21%), fine paper (25%), consumer cardboards (21%) and industrial packaging materials (25%). About 18% of the company's sales come from the Nordic countries, 63% from other European countries, 9% from Asia and 11% from elsewhere in the world.

Stora Enso's Q3 result indicates that its credit profile will continue to strengthen since all of the company's business areas reached a better-than-expected result and the key figures depicting the financial risk improved.

According to the company also its business outlook is positive although seasonal items will burden the result somewhat in Q4. Especially the key figures depicting the company's cash flow have clearly improved and are well above the levels set by the rating agencies. Both Moody's and S&P have recently raised the outlook of the company's rating (Ba2/BB) to positive which is a signal that the rating will possibly be raised in the near future. As the company's result has improved the risk premiums of its bonds have narrowed, but we feel they are still at an attractive level with regard to the strengthening risk profile.

UPM-Kymmene Plc (Ba1/BB) UPM is one of the world's largest producers of paper and paper products. Its production includes, for example, paper and pulp. UPM's position in Europe is especially strong in the magazine paper and newsprint markets. Approximately 72% of its sales come from Europe, 11% from North America and 5% from China. UPM's credit profile is strengthened by the company's strong market position as well as its vertical integration with the production of pulp. In addition, in the energy sector the company owns a significant share of Pohjolan Voima.

Also UPM reported a strong result in Q3. Especially the strong performance of the pulp operations were behind the result. The cash flow figures, among other things, have clearly improved and are at good levels with respect to the credit rating. At the end of the year UPM announced that it will purchase the Finnish company Myllykoski and its German alliance partner Rhein Papier. The acquisition increases at least temporarily the company's indebtedness, which otherwise has been on the wane. However, consolidation on the paper market suffering from oversupply is in the long-term a very positive matter for the paper producers. Source: Nordea Credit Research 7 January 2011

Key figures Stora Enso Plc UPM-Kymmene Plc 2008 2009 2010 f 2008 2009 2010 f Net sales (m€) 10 951 8 745 10 439 9 461 7 719 9 202 EBITDA % 10 9 12 13 14 15 EBIT % 447037 Balance sheet total (m€) 12 492 11 815 11 944 13 781 13 605 13 427 Debt / EBITDA % 3,6 4,3 3,0 4,4 4,4 3,3 Debt / (Debts + Equity) % 42 38 35 47 41 39

The table shows some of Stora Enso Plc's and UPM-Kymmene Plc’s key figures. Source: Nordea Credit Research 7.1.2011. Market review

Companies' improved results support the corporate bond market During the autumn the yield spread between corporate bonds and government bonds decreased. Historically, the excess return offered by corporate bonds in relation to government bonds is still high, also in comparison to historical credit losses. Corporate bonds continue to offer attractive excess return.

Especially high yield bonds have done well, supported by stronger economic growth data and companies' better earnings. More than three out of five European companies have reported a better-than- expected result. This time, strong earnings have also been backed by sales growth, not only cost cuts.

The financial bonds have again been an exception to the positive trend. The renewed problems in the euro area fringe countries have weighed down the financial bonds. The connection has, however, been clearly weaker than in the spring. After the stress tests our conception of the banks' risks related to the fringe countries is a lot clearer. In addition, the euro area stability fund will back the financing of the euro countries in the next few years.

In a normal market situation corporate bonds provide a higher yield than deposits and government bonds. The excess return is determined by how risky the company is evaluated to be in the market. In corporate bonds issued by the companies themselves the risk is formed of the issuer's credit risk, whereas in synthetic corporate bonds the risk is formed of the reference company's or a reference company basket's and the issuer's credit risk. A credit risk means uncertainty of the debtor's ability to service the interest and amortisations of its debts. In corporate bonds the credit risk is higher than in government bonds, which means that companies have to pay higher yield on their bonds than governments. The credit risk may be realised if a company is faced with financial difficulties and becomes insolvent.

The Euribor rates have risen as the ECB starts to apply tighter monetary policy The Euribor rates rose during the autumn due to banks taking out a considerably lower amount of loans with the ECB than were maturing. The withdrawal of surplus liquidity has lifted the shortest market rates and, for example the 3-month Euribor is already above the ECB's policy rate of one per cent.

We believe that the ECB will begin its policy rate hikes towards the end of H2, which would give more room for the Euribor rates to go up. Following which, the ECB will probably continue hiking the rates gradually, resulting in, for example, the 3-month Euribor rate rising to over two per cent in a little over a year. During the euro era, the 3-month Euribor has been markedly over 3% on average, and in 2008 it was momentarily even higher than 5%. Against that backdrop, rates are set to continue rising clearly also after 2011. Then again, we can by no means exclude the possibility of a faster rise. It is a general notion that one reason for the current financial crisis is that after the previous recession interest rates were kept at a low level for too long. Without doubt, the central banks are not inclined to make the same mistake again. Of course, there is always the risk that rate hikes will be delayed if economic growth fails to gain momentum.

Source: Nordea Strategy Research 7 January 2011 Issue terms in brief

Issuer Nordea Bank Finland Plc, credit ratings Aa2(Moody´s) and AA- (S&P). Loan number and ISIN 4456 and FI4000020110 Reference company basket Stora Enso Plc and UPM-Kymmene Plc Issue date 17 January 2011 Maturity 15 April 2016 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 Denomination EUR 1,000 Yield Yield is paid up to the announcement date of the first credit event or up to maturity. The yield paid quarterly corresponds to the 3-month Euribor plus 2.5% p.a. however, it will always equal at least the minimum yield* if no credit events occur in the reference companies. The yield valuation date is two banking days before the beginning of a yield period. The first yield period begins on 28 February 2011 and ends on 20 June 2011. After this the length of a yield period will be three months. The last yield period begins on 20 December 2015 and ends at maturity. If the bond matures early, the yield period ends on the announcement date of a credit event. The yield is paid quarterly and the yield payment dates are 20 March, 20 June, 20 September and 20 December each year and the maturity date or the early redemption date. Repayment of principal The issuer Nordea Bank Finland Plc repays the nominal principal of the bond in full at maturity if no credit events have occurred in the reference companies. If any of the reference companies faces a credit event, the issuer repays on the early redemption date the recovery rate of the company that first faced a credit event plus any possible positive market value of the interest rate floor. The bond involves the risk of the issuer’s repayment ability. The investor can lose the invested principal partially or in full. Credit event period The credit event period is the period between 28 February 2011 and 20 March 2016. However, in accordance with international market practice, the situation of the reference companies can be reviewed retroactively for a period of 60 banking days prior to the beginning of the actual credit event period in order to establish the occurrence of a credit event. The issuer is also entitled to announce a credit event which has occurred during the credit event period, but has not come to the knowledge of the issuer until after the credit event period; however, not later than two weeks after the end of the credit event period. See the bond-specific terms and conditions for details. Credit event A credit event refers to an event concerning the reference company which according to the issuer's estimate is a Failure to Pay, Restructuring or Bankruptcy. Recovery rate After the occurrence of a credit event the recovery rate is determined in an auction arranged by ISDA based on the market values of the reference company's debt commitments or within a valuation method in line with market practice. Security The bond is unsecured. The bond involves the risk of the issuer’s repayment ability. Structuring cost The subscription price includes a structuring cost of approximately 0.8% p.a. No separate subscription or management fee is charged on the bonds. Secondary market Nordea quotes a repurchase price for the bond for nominal amounts of EUR 10,000 or higher. The repurchase price may be lower or higher than the nominal value. Taxation The yield is subject to tax at source on interest income for natural persons and Finnish death estates. 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. The issue will be cancelled if the minimum yield cannot be confirmed as 4.1% at least. Listing If the total amount of subscriptions is sufficient, an application will be made for the bond to be listed on NASDAQ OMX Helsinki. or publishedforanypurposewithout thepriorconsentinwritingofNordeaMarkets. adviser astolegal,taxation,accounting orregulatorymattersinanyjurisdiction.This documentmaynotbe copied, distribut important tonotethatpastperformance isnotindicativeoffutureresults.NordeaMarketsanddoes notpurporttobea Relevant andspecificprofessional adviceshouldalwaysbeobtainedbeforemakinganyinvestment orcreditdecision.Itis herein hasnoregardtothespecificinvestmentobjectives,financial situationorparticularneedsofanyrecip the informationintendedasanoffer orsolicitationfor the purchase orsaleofanyfinancialinstrument.The informationcont of therecipient.The informationprovidedhereinisnot intendedtoconstituteanddoesnotinvestmentadvicenori of thedescribedproductorrisksrelatedtoit,anditshouldnotbe relied onassuch, norisitasubstituteforthejud Markets onthedateofthisdocumentandaresubjecttochange withoutnotice.This documentisnotanexhaustive description for thesoleuseofintendedrecipient.The viewsand otherinformationprovidedhereinarethecurrentviewsofNordea Finland PlcandNordeaBankDanmarkA/S.The information providedhereinisintendedforbackground informationonlyand Nordea MarketsisthenameofdepartmentsBank NorgeASA, NordeaBankAB(publ), situations. subscription. The Swedishversionofthetermsisbindingandthusappliedinpossibledispute available attheplacesofsubscription.Readissuetermsandbaseprospectusbefore FinlandPlcdated25May2010.The bond-specifictermsandthebaseprospectusare Bank AB(publ)andNordea Sweden inaccordancewiththeProspectusDirective)ofNordeaBank Programme (abondprogrammereportedtotheFinnishFinancialSupervisoryAuthorityfrom undertheMedium-Term StoraEnsoandUMP-Kymmene) 4456(Forestry Bond Bond Note gement ained ient. ed s n

Nordea Bank Finland Plc HSI453 01.11