Yesterday, Swedbank AB announced that its board has set the terms for a SEK 15.1 billion ($2.2 billion) rights offering of ordinary shares and that its shareholders had approved the proposed issuance at an extrordiary general meeting held earlier today. Last fall, Swedbank completed an approximately SEK 12.4 billion ($1.56 billion) rights offering and began utilizing the Swedish government guarantee funding program. Among other things, the rights offering aims to accelerate Swedbank’s return to the non-guaranteed wholesale funding markets on competitive terms.

The highlights of the rights offering include:

  • Subscription price: SEK 39 (approximately $5.57) per new ordinary share;
  • Shareholders will have the right to subscribe for 1 new ordinary share per 2 existing shares (both ordinary and preference shares);
  • Record date: September 18, 2009; and

Subscription period: September 22, 2009 - October 6, 2009. A group of existing shareholders including Folksam, 48 independent savings banks and their affiliates, the Swedish Export Credit Corporation, four savings banks foundations, AP2 and AP4, AFA Insurance, AMF, Sparinstitutens Pensionskassa and Konsumentföreningen Stockholm have agreed to exercise subscription rights representing 27.7% of the rights offering. In addition, certain of these shareholders have also agreed to underwrite an additional 11.8% of the rights offering and Alecta and Nektar Fund have entered into undertakings to underwrite 6.9% of the rights offering. Finally, a syndicate led by Bank of America Merrill Lynch and Credit Suisse has agreed to underwrite the remaining 53.6% of the rights offering, subject to customary terms and conditions.