SpareBank 1 SMN strengthens equity

The Board of SpareBank 1 SMN proposes to refinance the hybrid capital bond from
the Norwegian State Finance Fund by implementing:
·   Fully underwritten rights offering with preferential rights for existing
owners of equity certificates with gross proceeds of approx NOK 800 mill
·   Private placement towards the employees of SpareBank 1 SMN
·   Issue of hybrid capital bonds in the market of up to NOK 450 mill during
2010
 
The gross proceeds from the rights offering and the employee offering will be
used to refinance part of the hybrid capital bond of NOK 1,250 mill from the
Norwegian State Finance Fund that SpareBank 1 SMN issued in the autumn of 2009.
The remaining amount of the hybrid capital bond will be redeemed through an
issue of hybrid capital bonds in the market during 2010. The redemption requires
approval from the Financial Supervisory Authority of Norway.
SpareBank 1 SMNs core capital ratio will not be affected since the new capital
will be used to redeem the hybrid capital loan from the Norwegian State Finance
Fund.
The rights offering is fully underwritten of a consortium consisting of DnB NOR
Markets, SpareBank 1 SR-Bank, SpareBank 1 Nord-Norge, Sparebanken Hedmark and
Samarbeidende Sparebanker AS.
To implement the rights offering, SpareBank 1 SMN has retained DnB NOR Markets
as Global Coordinator and Bookrunner. SpareBank 1 SMN Markets is retained as
Joint Lead Manager and Argo Securities as Co-Lead Manager.
Normalised market
- The Norwegian State Finance Fund has played a vital role in the challenging
period the financial services industry has been through. The purpose of the
hybrid capital loan was to strengthen the core capital at a time where the
market and the rating agencies expected it. The Norwegian State Finance Fund
enabled this whereas the market conditions were challenging. We now consider the
market to be normalised and propose to refinance the hybrid capital loan from
the Norwegian State Finance Fund, says CEO Finn Haugan of SpareBank 1 SMN.
- By partly replacing the hybrid capital bond from the Norwegian State Finance
Fund with equity certificate capital, the quality of the banks core capital is
strengthened in line with the market's expectations, says Haugan.
Rights offering
The rights offering with gross proceeds of approx NOK 800 mill is implemented by
issuing new equity certificates with preferential rights for existing equity
certificate owners as of 4 March 2010. According to the preliminary timetable
the subscription period will commence 11 March and end on 25 March 2010. The
subscription price will be resolved by SpareBank 1 SMN's Supervisory Board on 3
March 2010.
Employee offering
The subscription period and the subscription price in the employee offering will
be the same as in the rights offering. According to the proposal from the Board,
each employee of SpareBank 1 SMN and certain subsidiaries are allowed to
subscribe for up to 2,000 equity certificates with a 1 year lock-up period.
Certain employees in leading positions are not allowed to participate in the
employee offering due to restrictions set out by the loan agreement with the
Norwegian State Finance Fund. The gross proceeds from the employee offering will
be up to NOK 80 mill.
The Board of SpareBank 1 SMN considers it of importance that the employees of
the bank have strong focus on value creation and are aligned with ownership
interests. The bank has a long tradition of ownership among its employees.
Hybrid capital bond
The Board of SpareBank 1 SMN has given the administration a power of attorney to
issue up to NOK 450 mill of new hybrid capital bonds. The bank is planning an
issue of hybrid capital bonds in the market during 2010.
Preliminary timetable
3 March 2010:                 The Supervisory Board resolves the issues
5 March 2010:                 Existing equity certificates are traded exclusive
of supscription                           rights
11 - 25 March 2010:         Subscription period and trading of subscription
rights on
                                    Oslo Børs
31 March 2010:                Allocation of new equity certificates
12 April 2010:                  New equity certificates are tradable on Oslo
Børs
Information
A press and analyst presentation will be held Thursday 11 February 2010 at
08:30 in SpareBank 1 SMN's head offices at Vestre Rosten 77 in Trondheim and at
17:00 the same day at Shippingklubben, Haakon VIIs gate 1, Oslo. The
presentation at 17:00 will be broadcasted over webcast. A link to the webcast
will be published under Investor Relations at www.smn.no
More information about the rights offering will be published at a dedicated page
for the rights offering at www.smn.no
 
Trondheim, 10 February 2010
 
Contact persons at SpareBank 1 SMN:
CEO Finn Haugan on +47 900 41 002
Executive Vice President, Finance, Kjell Fordal on +47 905 41 672
Executive Vice President, Corporate Communications, Hans Tronstad on
+47 941 78 322
 
About SpareBank 1 SMN
SpareBank 1 SMN is the region's leading financial services group. It leads the
retail and corporate market, and is positioned in 56 municipalities across the
region. We aim to be the recommended bank for customers in Mid-Norway, and as a
local, independent savings bank we feel a special responsibility for stimulating
growth and prosperity in the region. We base our business on closeness to our
customers, good accessibility, a full product range and comprehensive financial
advisory services.
Our head office is in Trondheim. The Group employs about 1,100 staff and
includes the following subsidiaries: SpareBank 1 SMN Finans, EiendomsMegler 1
Midt-Norge, Allegro Finans and SpareBank 1 SMN Regnskap. SpareBank 1 SMN is one
of six owners of SpareBank 1 Gruppen. For further information, visit our website
at www.smn.no
* * * * *
Disclaimer
 
These written materials are not for distribution in the United States,
Australia, Canada, Hong Kong or Japan.  The information contained herein does
not constitute an offer of securities for sale in the United States, Australia,
Canada, Hong Kong or Japan.
 
The securities may not be offered or sold in the United States unless they are
registered under applicable law or exempt from registration. The Savings Bank
does not intend to register any portion of the offer in the United States or to
conduct a public offer of securities in the United States. No money, securities
or other consideration is being solicited and, if sent in response to the
information contained herein, will not be accepted.
 
This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)
 
[HUG#1383238]