Obligation AB SKF 1.25% ( XS1877892148 ) en EUR

Société émettrice AB SKF
Prix sur le marché refresh price now   96.46 %  ▼ 
Pays  Suede
Code ISIN  XS1877892148 ( en EUR )
Coupon 1.25% par an ( paiement annuel )
Echéance 17/09/2025



Prospectus brochure de l'obligation AB SKF XS1877892148 en EUR 1.25%, échéance 17/09/2025


Montant Minimal 100 000 EUR
Montant de l'émission 300 000 000 EUR
Prochain Coupon 17/09/2024 ( Dans 63 jours )
Description détaillée L'Obligation émise par AB SKF ( Suede ) , en EUR, avec le code ISIN XS1877892148, paye un coupon de 1.25% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 17/09/2025









AKTIEBOLAGET SKF
(a public company incorporated with limited liability in Sweden)
300,000,000 1.250 per cent. Notes due 17 September 2025
Issue price: 99.416 per cent.
The 300,000,000 1.250 per cent. Notes due 17 September 2025 (the Notes) will be issued by Aktiebolaget SKF (the
Issuer) on 17 September 2018 (the Issue Date).
The Notes are subject to redemption at the option of the Issuer, as further described in "Conditions of the Notes ­
Redemption and Purchase ­ Redemption at the Option of the Issuer". Also, the Issuer may, at its option, redeem all,
but not some only, of the Notes at any time at par plus accrued interest, in the event of certain tax changes as described
under the Conditions of the Notes. The Notes mature on 17 September 2025.
Application has been made to the Commission de Surveillance du Secteur Financier (the CSSF) in its capacity as
competent authority under the Luxembourg Act dated 10 July 2005 (the Luxembourg Act) on prospectuses for
securities, as amended, to approve this document (this Document) as a prospectus pursuant to Part II Chapter 1 of the
Luxembourg Act and to the Luxembourg Stock Exchange for the listing of the Notes on the Official List of the
Luxembourg Stock Exchange and admission to trading on the Luxembourg Stock Exchange's regulated market. The
Luxembourg Stock Exchange's regulated market is a regulated market for the purposes of Directive 2014/65/EU.
References in this Prospectus to Notes being listed (and all related references) shall mean that such Notes have been
admitted to trading on the Luxembourg Stock Exchange's regulated market and have been admitted to the Official List
of the Luxembourg Stock Exchange. The CSSF assumes no responsibility for the economic and financial soundness of
the transactions contemplated by this Prospectus or the quality or solvency of the Issuer in accordance with Articles
7(7) of the Luxembourg Act.
The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the
Securities Act) or with any securities regulatory authority of any state or other jurisdiction of the United States. The
Notes are being offered and sold outside the United States in accordance with Regulation S under the Securities Act
(Regulation S), and may not be offered and sold or delivered within the United States or to, for the account or benefit
of, U.S. persons (as defined in Regulation S), except pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act.
PRIIPs Regulation/Prohibition Of Sales To EEA Retail Investors - The Notes are not intended to be offered, sold or
otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the
European Economic Area (EEA). For these purposes, a retail investor means a person who is one (or more) of: (i) a
retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, MiFID II); or (ii) a customer
within the meaning of Directive 2002/92/EC (as amended, the Insurance Mediation Directive), where that customer
would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently no key
information document required by Regulation (EU) No 1286/2014 (as amended, the PRIIPs Regulation) for offering
or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore
offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful
under the PRIIPs Regulation.
MIFID II product governance / Professional investors and eligible counterparties only target market ­ Solely for
the purposes of each manufacturer's product approval process, the target market assessment in respect of the Notes has
led to the conclusion that: (i) the target market for the Notes is eligible counterparties and professional clients only, each
as defined in MiFID II; and (ii) all channels for distribution of the Notes to eligible counterparties and professional
clients are appropriate. Any person subsequently offering, selling or recommending the Notes (a distributor) should
take into consideration the manufacturers' target market assessment; however, a distributor subject to MiFID II is
responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or refining the
manufacturer`s target market assessment) and determining appropriate distribution channels.
The Notes will be rated Baa2 (stable outlook) by Moody's Deutschland GmbH (Moody's) and BBB (stable outlook) by
Fitch Ratings Limited (Fitch). Moody's and Fitch are established in the European Union and are registered under
Regulation (EC) No. 1060/2009 (as amended) (the CRA Regulation). As such Moody's and Fitch are included in the
list of credit rating agencies published by the European Securities and Markets Authority on its website (at
http://www.esma.europa.eu/page/List-registered-and-certified-CRAs) in accordance with the CRA Regulation. A
security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or
withdrawal at any time by the assigning rating agency.



The Notes will initially be represented by a temporary global note (the Temporary Global Note), without interest
coupons, which will be deposited on or about the Issue Date with a common safekeeper for Euroclear Bank SA/NV
(Euroclear) and Clearstream Banking S.A. (Clearstream, Luxembourg). Interests in the Temporary Global Note will
be exchangeable for interests in a permanent global note (the Permanent Global Note and, together with the
Temporary Global Note, the Global Notes), without interest coupons, on or after 27 October 2018 (the Exchange
Date), upon certification as to non-U.S. beneficial ownership. Interests in the Permanent Global Note will be
exchangeable for definitive Notes in bearer form, serially numbered in the denomination of 100,000 and integral
multiples of 1,000 in excess thereof, up to and including 199,000, each with Coupons attached on issue, only in
certain limited circumstances - see "Summary of Provisions relating to the Notes while represented by the Global
Notes". No Notes in definitive form will be issued with a denomination above 199,000.
An investment in Notes involves certain risks. Prospective investors should have regard to the risk
factors described under the heading "Risk Factors" on page 7.
Joint Lead Managers
BofA Merrill Lynch
Citigroup
Nordea


The date of this Prospectus is 13 September 2018




This Prospectus comprises a prospectus for the purposes of Article 5.3 of Directive 2003/71/EC of the
Prospectus Directive and for the purposes of the Luxembourg Act. When used in this Prospectus, Prospectus
Directive means Directive 2003/71/EC (as amended), and includes any relevant implementing measure in a
relevant Member State of the European Economic Area.
The Issuer accepts responsibility for the information contained in this Prospectus. 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 Prospectus is in accordance with the facts and does not omit anything likely to affect the
import of such information.
This Prospectus is to be read in conjunction with all documents which are deemed to be incorporated herein
by reference (see "Documents Incorporated by Reference"). This Prospectus should be read and construed
on the basis that such documents are incorporated and form part of the Prospectus.
Save for the Issuer, no party has independently verified the information contained herein. Accordingly, no
representation, warranty or undertaking, express or implied, is made and no responsibility or liability is
accepted by the Joint Lead Managers as to the accuracy or completeness of the information contained or
incorporated in this Prospectus or any other information provided by the Issuer in connection with the
offering of the Notes. No Joint Lead Manager accepts any liability in relation to the information contained
or incorporated by reference in this Prospectus or any other information provided by the Issuer in connection
with the offering of the Notes or their distribution.
No person is or has been authorised by the Issuer to give any information or to make any representation not
contained in or not consistent with this Prospectus or any other information supplied in connection with the
offering of the Notes and, if given or made, such information or representation must not be relied upon as
having been authorised by the Issuer or any of the Joint Lead Managers.
Neither this Prospectus nor any other information supplied in connection with the offering of the Notes (a) is
intended to provide the basis of any credit or other evaluation or (b) should be considered as a
recommendation by the Issuer or any of the Joint Lead Managers that any recipient of this Prospectus or any
other information supplied in connection with the offering of the Notes should purchase any Notes. Each
investor contemplating purchasing any Notes should make its own independent investigation of the financial
condition and affairs, and its own appraisal of the creditworthiness, of the Issuer. Neither this Prospectus nor
any other information supplied in connection with the offering of the Notes constitutes an offer or invitation
by or on behalf of the Issuer or any of the Joint Lead Managers to any person to subscribe for or to purchase
any Notes.
Neither the delivery of this Prospectus nor the offering, sale or delivery of the Notes shall in any
circumstances imply that the information contained herein concerning the Issuer is correct at any time
subsequent to the date hereof or that any other information supplied in connection with the offering of the
Notes is correct as of any time subsequent to the date indicated in the document containing the same. The
Joint Lead Managers expressly do not undertake to review the financial condition or affairs of the Issuer
during the life of the Notes or to advise any investor in the Notes of any information coming to their
attention.


2







IMPORTANT INFORMATION RELATING TO THE USE OF THIS PROSPECTUS AND OFFERS
OF NOTES GENERALLY
This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy the Notes in any
jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such jurisdiction. The
distribution of this Prospectus and the offer or sale of Notes may be restricted by law in certain jurisdictions.
The Issuer and the Joint Lead Managers do not represent that this Prospectus may be lawfully distributed, or
that the Notes may be lawfully offered, in compliance with any applicable registration or other requirements
in any such jurisdiction, or pursuant to an exemption available thereunder, or assume any responsibility for
facilitating any such distribution or offering. In particular, no action has been taken by the Issuer or the Joint
Lead Managers which is intended to permit a public offering of the Notes or the distribution of this
Prospectus in any jurisdiction where action for that purpose is required. Accordingly, no Notes may be
offered or sold, directly or indirectly, and neither this Prospectus nor any advertisement or other offering
material may be distributed or published in any jurisdiction, except under circumstances that will result in
compliance with any applicable laws and regulations. Persons into whose possession this Prospectus or any
Notes may come must inform themselves about, and observe, any such restrictions on the distribution of this
Prospectus and the offering and sale of Notes. In particular, there are restrictions on the distribution of this
Prospectus and the offer or sale of Notes in the United States and the EEA (including in the United
Kingdom, Belgium and Sweden), see "Subscription and Sale".


3







STABILISATION
IN CONNECTION WITH THE ISSUE OF THE NOTES, CITIGROUP GLOBAL MARKETS
LIMITED AS STABILISATION MANAGER (THE "STABILISATION MANAGER") (OR
PERSONS ACTING ON BEHALF OF ANY STABILISATION MANAGER) MAY OVER-ALLOT
NOTES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE
OF THE NOTES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL.
HOWEVER, STABILISATION MAY NOT NECESSARILY OCCUR. ANY STABILISATION
ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC
DISCLOSURE OF THE TERMS OF THE OFFER OF THE NOTES IS MADE AND, IF BEGUN,
MAY CEASE AT ANY TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30
DAYS AFTER THE ISSUE DATE OF THE NOTES AND 60 DAYS AFTER THE DATE OF THE
ALLOTMENT OF THE NOTES. ANY STABILISATION ACTION OR OVER-ALLOTMENT
MUST BE CONDUCTED BY THE RELEVANT STABILISATION MANAGER (OR PERSONS
ACTING ON BEHALF OF ANY STABILISATION MANAGER) IN ACCORDANCE WITH ALL
APPLICABLE LAWS AND RULES.
The Notes may not be a suitable investment for all investors. Each potential investor in the Notes must
determine the suitability of that investment in light of its own circumstances. In particular, each potential
investor may wish to consider either on its own or with the help of its financial and other professional
advisers, whether it:
(i)
has sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits
and risks of investing in the Notes and the information contained or incorporated by reference in this
Prospectus or any applicable supplement;
(ii)
has access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its
particular financial situation, an investment in the Notes and the impact the Notes will have on its
overall investment portfolio;
(iii)
has sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes,
including where the currency for principal or interest payments is different from the potential
investor's currency;
(iv)
understands thoroughly the terms of the Notes and is familiar with the behaviour of any relevant
indices and financial markets; and
(v)
is able to evaluate possible scenarios for economic, interest rate and other factors that may affect its
investment and its ability to bear the applicable risks.
Legal investment considerations may restrict certain investments. The investment activities of certain
investors are subject to investment laws and regulations, or review or regulation by certain authorities. Each
potential investor should consult its legal advisers to determine whether and to what extent (1) the Notes are
legal investments for it, (2) the Notes can be used as collateral for various types of borrowing and (3) other
restrictions apply to its purchase or pledge of the Notes. Financial institutions should consult their legal
advisers or the appropriate regulators to determine the appropriate treatment of the Notes under any
applicable risk-based capital or similar rules.
The Notes have not been and will not be registered under the United States Securities Act of 1933, as
amended, (the Securities Act) and are subject to U.S. tax law requirements. Subject to certain exceptions,
the Notes may not be offered, sold or delivered within the United States or to U.S. persons. For a further


4







description of certain restrictions on the offering and sale of the Notes and on distribution of this Document,
see "Subscription and Sale" below.
PRESENTATION OF INFORMATION
All references in this Document to U.S. dollars, U.S.$ and $ refer to the currency of the United States of
America, to euro and refer to the currency introduced at the start of the third stage of European economic
and monetary union pursuant to the Treaty on the Functioning of the European Union, as amended, and to
Swedish Kronor, SEK refer to the currency of the Kingdom of Sweden and CNY refer to the currency of
the People's Republic of China (PRC) which, for the purposes of this Prospectus, excludes the Hong Kong
Special Administrative Region of the PRC, the Macau Special Administrative Region of the PRC and
Taiwan.


5







___________________________________
CONTENTS

Page
Risk Factors ........................................................................................................................................................ 7
Documents Incorporated by Reference ............................................................................................................ 17
Conditions of the Notes .................................................................................................................................... 19
Summary of Provisions relating to the Notes while Represented by the Global Notes ................................... 30
Use of Proceeds ................................................................................................................................................ 33
Description of the Issuer ................................................................................................................................... 34
Taxation ............................................................................................................................................................ 48
Subscription and Sale ....................................................................................................................................... 51
General Information ......................................................................................................................................... 53
___________________________________



6







RISK FACTORS
In purchasing Notes, investors assume the risk that the Issuer may become insolvent or otherwise be unable
to make all payments due in respect of the Notes. There is a wide range of risk factors which individually or
together could result in the Issuer becoming unable to make all payments due in respect of the Notes. It is not
possible to identify all such risk factors or to determine which risk factors are most likely to occur, as the
Issuer may not be aware of all relevant risk factors and certain risk factors which it currently deem not to be
material may become material as a result of the occurrence of events outside the Issuer's control. The Issuer
has identified in this Prospectus the following risk factors which could materially adversely affect its
business and ability to make payments due under the Notes.
In addition, risk factors which are material for the purpose of assessing the market risks associated with the
Notes are described below.
Prospective investors should also read the detailed information set out elsewhere in this Prospectus and
reach their own views prior to making any investment decision.
RISK FACTORS THAT MAY AFFECT THE ISSUER'S ABILITY TO FULFIL ITS
OBLIGATIONS UNDER THE NOTES

Litigation, arbitration, antitrust proceedings and unanticipated claims
The Issuer is the parent company of the SKF group of companies (the Group). The Group is, and may
continue to be, involved in litigation and arbitration both as plaintiff and defendant. Many of these disputes
relate to claims arising in the ordinary course of business including, but not limited to, litigation relating to
antitrust, intellectual property, product warranty and product liability. Unanticipated claims could have a
material adverse effect on the Issuer's business and results of operations.
SKF and other companies in the bearing industry are part of an investigation by the U.S. Department of
Justice regarding a possible violation of anti-trust rules. SKF is subject to two investigations in Brazil by the
General Superintendence of the Administrative Council for Economic Defense, one investigation regarding
an alleged violation of antitrust rules concerning bearing manufacturers, and another investigation regarding
an alleged violation of antitrust rules by several companies active on the automotive aftermarket in Brazil.
An enquiry has been initiated by the Competition Commission of India against several different companies,
including SKF, regarding an alleged violation of antitrust rules in India. Moreover, SKF is subject to related
class action claims by direct and indirect purchasers of bearings in the United States and may face additional
follow-on civil actions by both direct and indirect purchasers. Daimler AG has initiated a lawsuit against
SKF GmbH with a claim for damages as a consequence of the settlement decision by the European
Commission for violation of European competition rules.
There can be no assurance that the Group will not become subject to additional legal proceedings, which
may have an adverse effect on the Issuer's business, financial position and results of operation.
Business risks in general/Changes in economic conditions
The Group operates in many different industrial and automotive segments, as well as in many geographical
segments with different business cycles. A general economic downturn at a global level, or in one of the
world's leading economies, or a change in the economic situation in any of the industry segments in which
the Group operates, could affect customers' investment plans which in turn could reduce the demand for the
Group's products, solutions and services for a period of time. In addition, terrorism, war, unrest and other
hostilities, as well as potential impacts of climate change, water availability, natural disasters (including but


7







not limited to earthquakes, tsunamis and ash clouds) and disturbances in the worldwide financial markets,
could have a negative impact on the availability of raw materials and components necessary for the Group's
manufacturing process and/or the demand for the Group's products and services. Under certain circumstances
any of the risks identified above could have a material adverse effect on the Issuer's business, financial
position and results of operations.
Transitional risks
Some of SKF's businesses are subject to transitional risks related to trends such as increased digitalisation,
electrification or pressure to decarbonise industry sectors. Such development may be driven by regulatory
requirements, taxes, tariffs or other governmental policies. These types of macro trends could have an impact
on the SKF Group's operations in general and some of the customer industries in particular which could have
a material adverse effect on the Issuer's business, financial position and results of operations.
Political and regulatory risks
There are political and regulatory risks associated with the wide geographical presence of the Group. The
global and diverse nature of SKF's business and operations means that the Group is required to adhere to
numerous laws and regulations related to all aspects of its activities. Failure to meet these requirements could
lead to legal and financial consequences as well as damage to the Group's reputation. SKF is exposed to
compliance risks mainly related to competition law, fraud, export control, data privacy (including, but not
limited to, in relation to Regulation (EU) No 2016/679 (the General Data Protection Legislation)), corruption
and health and safety regulations. Regulatory requirements, taxes, tariffs and other trade barriers, price or
exchange controls or other governmental policies could limit or otherwise negatively impact the Group's
operations. Under certain circumstances any of the risks identified above could have a material adverse
effect on the Issuer's business, financial position and results of operations.
Competition
Competitors may find better and more cost-efficient ways to produce and distribute products and services.
They may also find ways to produce better functioning products. SKF may suffer loss through new and
disruptive technologies becoming available from companies which are currently not seen as competitors.
Competitive factors, including changes in market penetration, increased price competition, the development
and introduction of new products, product designs and technologies by significant existing and new
competitors and to a lesser extent small regional companies as well as changes in customer demand on sales,
product mix, prices and service quality could have a material adverse effect on the Issuer's business, financial
position and results of operations.
Also, the Issuer cannot give any assurance that its competitors do not or will not seek to utilise the Issuer's
patents, trademarks and logos when they market their products. Such unauthorised use of the Issuer's
intellectual property rights is an infringement of the Issuer's legal rights and may have a material adverse
effect on the Issuer's business, financial position, results and brand image.
Changes in manufacturing costs as well as issues affecting manufacturing and production facilities of the
Group or its suppliers and its ability to distribute its products
Changes in the costs associated with the Group's various levels of operations including, but not limited to,
the effects of unplanned work stoppages, severe interruptions in its production and damage to the equipment,
the cost of labour, and the cost and availability of, for example, materials and energy supply from third party
suppliers could have a material adverse effect on the Issuer's business, financial position and results of
operations.


8







If critical equipment in the operating facilities is significantly damaged, or there are severe interruptions in
its productions, the Group is likely to face setbacks in its ability to manufacture and distribute its products.
Such circumstances, to the extent it is unable to find an alternative manufacturing and production facility or
repair the damaged facilities or damaged equipment in a timely and cost-efficient manner, could have a
material adverse effect on the Group's business, results of operations and financial condition.
SKF's risk of production disruption is not only related to its own operations but also to disruption further
upstream in the demand chain. External factors such as fires, extreme weather events, natural disasters, water
scarcity, war, terrorism or pandemic illness might result in disruption of supply to SKF and have a material
adverse effect on the Issuer's business, financial position and results of operations.
Changes in costs for raw materials
Energy and the cost of carbon can have an impact on SKF in several ways, for example through the cost of
energy and raw materials. The annual cost of raw materials and components is approximately SEK 23 billion
of which steel-based products account for the majority. An increase/decrease of 1 per cent. in the cost of raw
materials and components would reduce/increase the operating profit by approximately SEK 230 million.
Steel scrap is a major ingredient in making bearing steel. An isolated 10 per cent. increase/decrease of
market scrap prices would decrease/increase SKF's operating profit by approximately SEK 90 million.
Calculations are based on the year-end figures for 2017 as well as on the assumption that everything else is
equal.
Property and product liability insurance and product functionality
The Group has the customary insurance programmes with respect to the Group's property and product
liability risks. Measures to limit the effect of damages are continually taken and standards for desired
safeguard levels are established in order to reduce the probability of material damages and to ensure
deliveries to the customers. While the Group holds customary insurance programmes in the amounts the
Issuer believes to be appropriate, there can be no assurances that the Group will be able to fully recover such
amounts or that recovered amounts will be sufficient to cover the Group's losses.
The risk of product failure in customer applications may lead to warranty claims and/or loss of business
which could have a material adverse effect on the Issuer's business, financial position and results of
operations.
IT Risks
The Group's operations are dependent on computer systems and solutions. The Group has initiated a
programme to replace its enterprise resource planning systems in order to create a new common IT
infrastructure. The implementation and roll-out process has started and will be carried out over a number of
years. An unplanned interruption to SKF's computer systems with potential loss of production or delays in
deliveries to customers or a major break-down of these systems with loss of information may have a material
adverse effect on the Group's business, financial position and results of operations.
The Group faces risks relating to cyber security and potential adversaries gaining unauthorised access to SKF
information or computer systems, which could otherwise lead to a loss of production, loss of intellectual
property or financial data, infringement of personal data or violations of export control regulations. Under
certain circumstances any of the risks identified above could have a material adverse effect on the Issuer's
business, financial position and results of operations.


9