Swedish Export Credit Corp /Swed (GRU) 20-F2021 FY Annual report (foreign)

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As filed with the Securities and Exchange Commission on February 24, 2022

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 20-F

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(Mark One)

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☐     Registration statement pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934

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or

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☒     Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2021

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or

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☐     Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

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or

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☐     Shell company report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

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Date of event requiring this shell company report …………………

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For the transition period from                 to                 

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Commission file number: 001-08382

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Securities registered or to be registered pursuant to Section 12(b) of the Act:

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Securities registered or to be registered pursuant to Section 12(g) of the Act:

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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

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Indicate the number of shares outstanding of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

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☑ Yes ☐ No

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If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

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☐ Yes ☑ No

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Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

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Yes ☑ No ☐

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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

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Yes ☑ No ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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† The term “new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

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Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

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Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

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If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow.

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Item 17 ☐ Item 18 ☐

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If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

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☐ Yes ☑ No

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(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

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Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

☐ Yes ☐ No

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INTRODUCTORY NOTES

In this annual report on Form 20-F (the “annual report”), unless otherwise specified, all amounts are expressed in Swedish kronor (“Skr”).

In this annual report, unless otherwise indicated, all descriptions and financial information relate to the consolidated group consisting of Aktiebolaget Svensk Exportkredit (publ), (Swedish Export Credit Corporation) (the “Parent Company”, the “Company” or “SEK”), including the Commercial Interest Reference Rate-system (the Swedish system for officially supported export credits or the “CIRR-system”), which is described herein, and the Parent Company’s wholly owned, inactive subsidiary SEKETT AB (the “Subsidiary”). These are jointly referred to as the “Consolidated Group” or the “Group”. During 2018, the winding-down of the subsidiary Venantius AB, including its wholly owned subsidiary VF Finans AB, was completed.

The consolidated financial statements of SEK included in Item 18 (the “Consolidated Financial Statements”) comprise the consolidated statement of financial position of SEK and its subsidiaries as of December 31, 2021 and December 31, 2020, and the related consolidated statements of comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2021, including the related notes. In certain cases, comparable figures for earlier financial periods are reported in parentheses after the relevant figure for the current period. For example, “(2020: Skr 10 million)” means that the relevant figure for 2020, or as of December 31, 2020, as the context requires, was Skr 10 million.

The Parent Company is a “public limited liability company” within the meaning of the Swedish Companies Act (2005:551). A Swedish limited liability company, even if its shares are not listed on an exchange and are not publicly traded, may choose to declare itself a “public limited liability company”. Only public limited liability companies are allowed to raise funds from the public through the issuance of debt instruments. A public limited liability company is required to add the notation “publ” to its name, unless it is evident from the company’s name that the company is a public limited liability company.

Additional information about SEK, including investor presentations, capital reports and the annual report for the financial year of 2021, is available at www.sek.se/en/for-investors. None of the foregoing reports or presentations, nor any other information available on or accessible through SEK’s website is incorporated herein by reference.

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FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements. SEK has based these forward-looking statements on its current expectations and projections about future events. These statements include but are not limited to:

Forward-looking statements are generally identified by the words “expect”, “anticipate”, “believe”, “intend”, “estimate”, “should” and similar expressions.

Forward-looking statements are based on current plans, estimates and projections, and therefore readers should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and SEK undertakes no obligation to update any forward-looking statement in light of new information or future events, although SEK intends to continue to meet its ongoing disclosure obligations under the U.S. securities laws (such as the obligations to file annual reports on Form 20-F and reports on Form 6-K) and under other applicable laws. Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and generally beyond SEK’s control. Readers are cautioned that a number of important factors could cause actual results or outcomes to differ materially from those expressed in, or implied by, forward-looking statements. These factors include, among others, the following:

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PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not required as this 20-F is filed as an annual report.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not required as this 20-F is filed as an annual report.

ITEM 3. KEY INFORMATION

A. Selected Financial Data

Not applicable.

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

The following section provides a description of the most significant risk factors that (i) could affect SEK’s businesses, results of operations and financial condition; and (ii) could cause SEK’s results to differ materially from those expressed in public statements or documents. There are also other factors beyond those discussed below or elsewhere in this annual report that could affect SEK’s businesses, results of operations and financial condition. Therefore, the risk factors below should not be considered a complete list of all potential risks that SEK may face.

COVID-19 has had an, and could have a further adverse effect on SEK’s business and operations.

While markets stabilized and GDP outlook grew more positive by the end of 2020 and during 2021, a prolongation of the COVID-19 pandemic could significantly affect economic growth and business operations across the global economy, both as a result of weakened economic activity and in terms of the health and wellbeing of employees being affected. Such weakening of the economy could have a material adverse impact on the financial performance or operations of counterparties to SEK and consequently impact SEK, or the cost of funding for SEK, which could have an adverse impact on SEK’s business, financial condition, results of operations and liquidity. Although the overall impact of COVID-19 on SEK’s financial condition and results of operations during 2020 and 2021 has been limited (to some extent due to increased demand for lending caused by clients’ reduced access to capital markets and other forms of financing), there can be no assurance that the impacts on SEK will remain limited amidst a prolongation of the outbreak. While a majority of central banks and governments have announced financial stimulus packages in order to counteract negative GDP developments during 2020 and 2021, the direct and indirect impact of the continued global COVID-19 pandemic remains uncertain. Concerns remain as to whether these policy tools will counter anticipated macro-economic risks.

The unforeseen transition from normal on-site office work to working remotely during the COVID-19 pandemic has also created challenges in terms of deploying reliable technical solutions for internal communication and operations. Although, as a result of quick mobilization and timely management actions during the spring of 2020, SEK managed to resolve the initial challenges in a timely manner and ensured the continuity of its operations with limited impact on SEK’s business or the Group’s clients, there can be no assurance that these technical solutions will remain sufficient or that other challenges from working remotely will not emerge.

The COVID-19 pandemic continues to evolve. As a result, there may be other material adverse impacts on SEK’s business, operations and financial condition that are unpredictable at this time. The extent of the impact of COVID-19 on SEK’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, the length of time government and commercial travel limitations are in place, the effectiveness of SEK’s remote work arrangements, the successful execution of plans in connection with eventual return of its personnel to SEK’s office, actions taken by governmental authorities in response to the pandemic, as well as other direct and indirect impacts on SEK and its customers, vendors and other stakeholders. As such, the impact on SEK’s employees, clients and the markets in which SEK operates is uncertain at this time and cannot be predicted.

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Disruptions in the financial markets or economic recessions (including as a result of geopolitical instability and the prolongation of the global outbreak of COVID-19), have had an, and could have a further, adverse effect on SEK’s operations and financial performance.

SEK’s business and earnings are affected by general business, economic and market conditions, especially within Sweden and Europe. Uncertainty remains concerning the outlook and the future economic environment related to recent events in those regions, such as the impacts of the global outbreak of COVID-19, a continuing weak economic outlook in certain European countries and the uncertainty surrounding the economic effect of the withdrawal of the UK from the EU on 31 January, 2020.

Additionally, even in the absence of slow economic growth or recessions, other economic circumstances – including, but not limited to, volatility in energy prices, contractions in infrastructure spending, fluctuations in market interest or exchange rates, and concerns over the financial health of sovereign governments and their instrumentalities – may have negative consequences for the companies and industries that the Group provides financing to as well as the financial condition of SEK’s financial counterparties and could, in addition to the other factors cited above, have material adverse effects on the Group’s business prospects, financial condition or ability to fulfil its debt obligations.

Disruptions in the financial markets or economic recessions (including as a result of a continuation of the global outbreak of COVID-19) have had an, and could have a further, adverse effect on the credit quality of borrowers and cause risk to other counterparties, which may, in turn, cause SEK to incur credit losses or affect the value of its assets.

Risks arising from the credit quality of borrowers and counterparties and the recoverability of loans and amounts due from counterparties in derivative transactions are inherent in SEK’s business. Consequently, SEK may incur credit losses or delinquency in debt repayments even in normal economic circumstances. Financial market disruptions or economic recessions (including as a result of a continuation of the global outbreak of COVID-19) may further affect SEK’s customers’ and counterparties’ ability to fulfil their obligations. Market and economic disruptions may affect business and consumer spending, bankruptcy rates and asset prices, creating a greater likelihood of impact on an increased number of SEK’s customers’ or counterparties’ credit demand or that they may become delinquent in their loans or other obligations to SEK. For example, following the 2007/2008 financial crisis, SEK was forced to write down the value of some of its assets as a result of disruptions in the financial markets. Such disruptions may affect the recoverability and value of SEK’s assets and may necessitate an increase in SEK’s provisions for delinquent and defaulted debt and other provisions, which could in turn have a material adverse effect on SEK’s business and/or its ability to repay its debts.

To counter the effects of the COVID-19 pandemic, SEK has as per December 31, 2021 made an adjustment of Skr 93 million to increase estimated credit losses in order to seek to ensure that provisioning levels sufficiently capture expected future developments. There can be no assurances, however, that this increase will be sufficient to provide for all credit losses that may actually occur, particularly if the COVID-19 pandemic is prolonged or worsens and its adverse economic effects becomes more enduring or severe than currently anticipated. If SEK’s current estimated credit losses prove to have been insufficient, higher credit losses would be incurred than those reflected by SEK’s provisioning levels, which could have a material adverse effect on SEK’s financial results, SEK’s capital ratios and the ability of the Company to fulfil its debt obligations.

Reduced access to international capital markets for the financing of SEK’s operations, or less favorable financing terms, may have a negative impact on SEK’s profitability and its ability to fulfil its obligations.

In order to finance its operations, SEK is dependent on the international capital markets, where it competes with other issuers of similar standing to obtain financing. Although SEK has been able to finance its operations successfully to date, factors outside of SEK’s control may have material adverse effects on the Group’s continued ability to obtain such financing or could cause the cost of such financing to increase. As a result of the global outbreak of COVID-19, for example, global markets became extremely turbulent and volatile during the spring of 2020 and SEK experienced an increase in costs of funding through the international capital markets (as did other issuers during the same period). The same occurred as a result of the financial crisis in 2008. In both periods, SEK was able to offset the increased cost of funding by increasing the margins on its lending, but currently and in the future that might not be possible. This could result in more expensive access to the capital markets, which could in turn, have a material adverse effect on SEK’s results of operations.

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An additional key factor influencing the cost and availability of financing is SEK’s credit rating. Although SEK has favorable credit ratings from various credit rating agencies currently, those credit ratings depend on many factors, some of which are outside of SEK’s control. Significant factors in determining SEK’s credit ratings or that otherwise could affect its ability to raise financing include its ownership structure, asset quality, liquidity profile, short and long-term financial prospects, risk exposures, capital ratios, prudential measures as well as government support and SEK’s public policy role. Although SEK’s owner (the Swedish State) has reaffirmed continued support for SEK’s current public policy role, there is a risk that this stance could change in the future. Deterioration in any one of these factors or any combination of these factors may lead rating agencies to downgrade of SEK’s credit ratings. If SEK were to experience a downgrade in its credit ratings, it would likely become necessary to offer increased interest margins in the capital markets in order to obtain financing, which would likely have a material adverse effect on the Group’s profit margins and earnings, and harm its overall liquidity and business and its ability to fulfil its obligations.

Changes in laws, regulations or accounting standards may adversely affect SEK’s business.

SEK’s business is subject to regulation and regulatory oversight. In particular, SEK is subject to financial services laws, regulations, administrative actions and policies in each location in which it operates. Any significant legal or regulatory developments could affect the manner in which SEK conducts its business and the results of SEK’s operations. Changes to existing laws, or the interpretation or enforcement of laws, may directly impact SEK’s business, results of operations and financial condition.

In response to the financial crisis in 2008, financial regulators around the world issued and continue to issue significant regulatory and legislative changes resulting in broad reform and increased regulation impacting financial service companies, including SEK. Changes to the current system of supervision and regulation, or any failure to comply with applicable rules (and particularly those applicable in Sweden), could materially and adversely affect SEK’s authorization to operate, business, financial condition or results of operation and/or ability to repay its debt. For example, as a result of legislative changes in 2017, the Swedish FSA required most financial institutions in Sweden, including SEK, to pay a higher resolution fee to the resolution fund to support the recovery of credit institutions, which adversely affected SEK’s results of operations.

In December, 2021 the Swedish Riksdag (Parliament) approved the Government's proposal to introduce a new risk tax for credit institutions which entered into force 1 January, 2022. The new risk tax serves to offset the costs that may affect the Swedish economy as a result of a possible financial crisis. The tax shall apply to credit institutions whose liabilities reach a set limit value at the beginning of the tax year. For 2022, the limit value is set at Skr 150 billion. The size of the tax will be 0.05 percent of the tax base for the tax year 2022, and 0.06 percent for the tax year 2023.

The European Bank Recovery and Resolution Directive (the “BRRD”) provides an EU-wide framework for the recovery and resolution of credit institutions and investment firms, their subsidiaries and certain holding companies and was implemented into Swedish law in 2016 by the Resolution Act (2015:1016) (as amended, the “Resolution Act”). In accordance with the BRRD, SEK is subject to a minimum requirement for own funds and eligible liabilities (“MREL”), which is a parallel requirement to the Capital Requirements Regulation (Regulation (EU) no. 575/2013 of the European Parliament and of the Council of June 26, 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) no. 648/2012 or the “CRR”) in the European Union. In July, 2021 the revised BRRD (BRRD II) was implemented in Sweden, amending the previous MREL requirements to ensure that institutions meet the requirement with own funds and eligible liabilities. The new requirements under BRRD II provide a new legal and regulatory basis for SEK´s MREL requirement. As of January 1, 2022, the MREL-requirement will have to be met with own funds and senior non-preferred bonds (“SNP debt”) with a gradual implementation of the requirement until January 1, 2024, at which point all of the MREL requirements will need to be met with SNP debt.

SEK may experience difficulties in issuing SNP bonds or the interest rate on these bonds may be considerably higher than on other debt securities issued, which would negatively impact SEK’s profitability. For more information, see Item 4 “Information on the Group and the Parent Company—B. Business Overview—Swedish Government Supervision—Supervisory Authorities”.

The Resolution Act confers substantial powers on the Swedish National Debt Office to enable it to take a range of actions in relation to Swedish financial institutions that are considered to be at risk of failing, including a debt write-down tool. The exercise of any resolution power, or any suggestion of the exercise of any resolution power, in relation to SEK may reduce or impede SEK’s ability to obtain financing, cause the cost of financing to increase or impair SEK’s ability to fulfill its obligations.

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In addition, in the wake of the financial disruptions from 2008 and onwards, the Basel Committee on Banking Supervision (the “Basel Committee”) has revised the Basel regime to provide for new, stricter regulations with regard to capital adequacy and liquidity coverage. These stricter regulations (many of which have already come into force, while others are expected to become effective in the near future) will mean that, in general, financial institutions, including SEK, will need to maintain relatively more own funds (capital base) in relation to their risk-weighted assets as well as better matched borrowing in relation to their obligations. Furthermore, stricter rules on which assets can be defined as liquidity reserves as well as stricter requirements on the clearing of derivatives may also affect international capital markets.

In December 2017, the Basel Committee introduced final revisions to the Basel III capital framework to reduce the variability of risk-weighted assets within the banking system (the “2017 Revisions”). In 2019, additional revisions were made by the Basel Committee to the CVA framework. In October, 2021 the EU published proposals to CRR and CRD (CRR III and CRD VI), with the purpose to implement the Basel revisions into EU law. The EU proposal follows the defined requirements of the Basel standards, and while SEK expects a net positive impact of the new requirements on the Company’s risk exposure amount, uncertainty remains until the new regulations have been finalized. Under the EU proposal, the CRD VI needs to be implemented into Swedish national legislation prior to January 1, 2025 before the new requirements become applicable for SEK, while the CRR III will become applicable for SEK as of January 1, 2025. For more information, see Item 4 “Information on the Group and the Parent Company—B. Business Overview—Swedish Government Supervision—Capital adequacy regulations” below.

European Market Infrastructure Regulation (EMIR), a regulation regarding over-the-counter (“OTC”) derivatives, central counterparties and trade repositories, came into effect on August 16, 2012. Since then, various parts of the regulation have been introduced. One of the major revisions relates to risk mitigating techniques, where new bilateral margin requirements are imposed on OTC-derivatives. The application date for the new initial margin requirements for OTC-derivatives was postponed from September, 2021 until September, 2022. Under the new requirements, SEK may be required to post additional collateral in relation to its OTC derivative transactions, which may entail increased costs impacting SEK’s business, results of operations and financial condition.

SEK may experience negative changes in the value of its assets or liabilities and may incur other losses related to volatile and illiquid market conditions.

Increased market volatility, illiquid market conditions and disruptions in the credit markets, including those observed during spring of 2020, make it difficult to value SEK’s assets and liabilities during certain periods. In particular, SEK is exposed to changes in the fair value of certain assets of liabilities due to unrealized gains and losses (e.g. in the form of changes in currency basis spread). Such changes in fair value can have a negative impact on SEK’s results as reported under IFRS.

Subsequent valuations, in light of factors then prevailing, may result in significant changes in the value of SEK’s assets or liabilities in future periods. Furthermore, at the time of any sale of any such assets, the prices SEK ultimately realizes will depend on the demand and liquidity in the market at the time of sale and may be materially lower than such assets’ current fair value. Any of these factors could have an impact on the valuation of SEK’s assets and liabilities, and may therefore have an adverse effect on the Group’s results of operations and financial condition in future periods.

Losses could result from SEK’s derivatives used for hedging, and SEK’s hedging strategies may not be effective.

SEK uses hedging instruments in an attempt to manage interest rate-, currency-, credit-, basis- and other market-related risks. If any of the variety of instruments and strategies the Group uses to hedge exposure to various types of risk is not effective, the Group may incur losses, which may have an adverse effect on the Group’s financial condition and could impair its ability to timely repay or refinance its debts. The majority of SEK’s derivative contracts are OTC derivatives, i.e., derivative contracts that are not transacted on an exchange. These derivatives are entered into under ISDA Master Agreements. If a counterparty were to default on these contracts, the underlying exposure would no longer be effectively hedged, which could result in losses.

In addition, there can be no assurance that the Group will continue to be able to hedge risks related to current or future assets or liabilities in accordance with its current policies in an efficient manner or at all. Disruptions such as market crises and economic recessions, including potentially as a result of a continuation of the global outbreak of COVID-19, may bring a challenge to the availability and effective hedging instruments or strategies. For example, the expected transition away from remaining IBOR exposures may have a different impact on the hedged item and the hedging instrument, which could cause some of SEK’s hedge to become ineffective, resulting in potential losses. An inability to hedge any material risks could result in additional losses, which could have an adverse effect on SEK’s financial condition and its ability to fulfil its obligations.

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Fluctuations in foreign currency exchange rates could harm SEK’s business.

As an international lending institution, SEK faces exposure to adverse movements in foreign currency exchange rates. The adequacy of the Group’s financial resources may be impacted by changes in currency exchange rates that affect the value, in Swedish currency, of the Group’s foreign-currency obligations. SEK’s exposure to foreign currency exchange risk is caused primarily by fluctuations in the Swedish krona (“Skr”)/United States dollar (“USD”) exchange rate and the Skr/Euro exchange rate. Countries could undertake actions that could significantly impact the value of their currencies such as “quantitative easing” measures and potential withdrawals from common currencies. Even though the Group carefully monitors and hedges its foreign currency exposures, changes in currency exchange rates adverse to the Group could harm SEK’s business, its profitability and its ability to repay its debts., SEK does not hedge its exposure towards currency exchange-rate effects related to unrealized changes in the fair value of its assets and liabilities, which could negatively affect the Group’s results of operations. Also, any strengthening of the Swedish krona against other currencies may reduce demand for the products sold overseas by SEK’s Swedish clients and thus reduce demand for its loans from end-purchasers of such products, or cause such clients to experience increased difficulty in repaying their loans to SEK. Such eventualities could have an adverse effect on SEK’s financial condition and its ability to fulfill its obligations.

Increasing competition may adversely affect SEK’s income and business.

The financial services industry is highly competitive. SEK’s lending business, other than the CIRR-system, faces increasing competition from other Swedish and foreign financial institutions, as well as from direct and indirect financing programs of exporters. SEK competes on the basis of a number of factors including service, product innovation, product features, price, commission structures, financial strength and name recognition. Some of SEK’s competitors offer a broader array of products or may have more competitive pricing or greater financial resources than SEK. If SEK is unable to match the products and services of its competitors or has to lower its prices or rates in order to compete for customer business, investments or financing, it could result in lower lending volume, decreased revenue and increased costs, all of which could have a material adverse effect on SEK’s business and its ability to repay its debts.

SEK is exposed to significant operational risk, which could harm SEK’s business, financial performance or the ability to repay its debt.

SEK’s business is dependent on the ability to process complex transactions in an efficient and accurate manner. Operational risk for a financial institution such as SEK can arise from fraud, errors by employees, failure to document transactions properly or to obtain proper internal authorizations, equipment failures, natural disasters, and information security failures, such as data loss, cyber attacks and failure of external systems such as those of SEK’s suppliers or counterparties. These risks could be exacerbated as a result of the global outbreak of COVID-19. Despite having taken preventative actions to protect the security of its information relative to its perceived risks, SEK may nevertheless experience security failures, data losses, cyber attacks or breaches in the future, which could have a material adverse effect on SEK’s business. Failure to address operational risk and increased regulatory requirements relating to operational risk may lead to additional costs, losses or damages to SEK’s reputation which may negatively affect customers’ and investors’ confidence, and consequently SEK’s business, financial performance or ability to repay its debt. For example, SEK has in the past incurred additional costs related to the enhancement of IT-system due to increased regulatory burdens. If, as a further example, SEK failed to comply with its obligations under financial guarantee contracts or other credit risk reducing arrangements or if the contracts were not properly drafted, this could result in SEK not being able to effectively seek recourse under such guarantees or other arrangements in the event the relevant borrower was unable to repay its debt to SEK. SEK’s reputation could also be damaged if SEK failed to comply with applicable legislation and best practices or in any other way failed to meet its commitments and expectations. A significant failure in managing SEK’s operational risk could materially and adversely affect the Company’s business, financial condition, results of operation or ability to repay its debt.

SEK is exposed to risks from the impact of climate change, which could have a negative impact on SEK’s reputation, business, results of operations and creditworthiness of its customers.

Climate change could expose SEK to financial risks either through its physical (e.g., climate or weather-related events) or transitional (e.g., changes in climate policy) effects. Transition risks could be further accelerated by the occurrence of changes in the physical climate.

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Physical risks from climate change arise from climate and weather-related events, such as heatwaves, droughts, floods, storms, sea level rise, coastal erosion and subsidence. These risks could result in significant damage to our customers’ property or businesses or have a material impact on our customers’ business models, which in turn could negatively affect SEK’s costumers ability to pay amounts due on their debt.

Transition risks arise from the process of adjustment towards a low-carbon economy. SEK may face significant and rapid developments in stakeholder expectations, policy, law and regulation which could impact the lending activities SEK undertakes, as well as the risks associated with its lending portfolio, and the value of SEK’s financial assets. Reputation risk could arise from a failure to meet changing societal, investor or regulatory demands.

Furthermore, in 2021, SEK’s Board of Directors adopted a number of climate targets for the operations, including that SEK’s lending portfolio should achieve net zero emissions by 2045, and that the proportion of green loans on the balance sheet should increase to 50 percent by 2030. In order to reach these targets or any other climate related ambitions or targets SEK may commit to in future, SEK will need to incorporate climate considerations into its strategy, business model, the products and services it provides to customers and its financial and non-financial risk management processes (including processes to measure and manage the various financial and non-financial risks SEK faces as a result of climate change). Failure to adequately embed risks associated with climate change into its risk framework to appropriately measure, manage and disclose the various financial and operational risks it faces as a result of climate change, or failure to adapt SEK’s strategy and business model to the changing regulatory requirements and market expectations on a timely basis may have a material and adverse impact on SEK’s business, results of operations and, ultimately, financial condition.

Developments in emerging market countries may result in credit losses for SEK on loans to customers in those countries.

SEK grants loans to customers in a number of emerging markets. Lending in emerging markets generally involves greater economic or political risk than in more developed countries, including economic crises, potentially unstable governments, risks of nationalization of businesses or appropriation of assets, restrictions on foreign ownership and uncertain legal systems. Although a significant amount of SEK’s loans are guaranteed by the Swedish Export Credits Guarantee Board (the “EKN”) (44% and 39% as of December 31, 2021 and 2020, respectively), SEK could experience credit losses with respect to those loans not covered by a guarantee, which could reduce the Group’s net income and have a material adverse effect on the Group’s results of operations, business prospects and financial condition.

Negative interest rates may have an impact on SEK’s profitability.

Negative interest rates may result in lower net interest income for SEK and may negatively affect the value of SEK’s assets and liabilities. For example, negative interest rates may:

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The transition from the use of the London interbank offered rate (LIBOR) may adversely affect SEK’s profitability.

Recent regulatory proceedings and actions by regulators or law enforcement agencies have resulted in the discontinuance of LIBOR and the establishment of alternative reference rates. Although in July 2017, the head of the U.K. Financial Conduct Authority (FCA), which regulates LIBOR, announced plans to phase out the use of LIBOR by the end of 2021, the phase-out of LIBOR is currently proposed to be postponed until the end of June 2023. For the Euro Interbank Offered Rate (“EURIBOR”) and the Stockholm Interbank Offered Rate (“STIBOR”), which are also significant reference rates for SEK, no formal end date has yet been communicated.

The Alternative Reference Rates Committee (ARRC) as well as the Federal Reserve Board (FRB) have declared that the Secured Overnight Financing Rate (“SOFR”) will replace USD LIBOR. The market continues to develop in relation to SOFR as a reference rate for floating rate notes. The continued development of SOFR rates and the market infrastructure for adopting such rates could result in reduced liquidity, increased volatility or could otherwise affect the market price of any SOFR linked notes that SEK may issue. For the sterling market, the Sterling Over Night Index Average (“SONIA”) is expected to become an acceptable alternative to LIBOR, where the Bank of England, the FCA and the Working Group on Sterling Risk-free rates have communicated a firm recommendation for SONIA to replace sterling LIBOR. Some uncertainty regarding the replacement of LIBOR still exists.

At this time, it is not possible to fully predict the effect of these developments, any discontinuance, modification or other reforms to LIBOR, EURIBOR, STIBOR or any other reference rate, the establishment of alternative reference rates, or the impact of any such events on contractual mechanisms may have on the markets, SEK or the Company’s floating rate debt securities. It is still uncertain at what rate liquidity in the market in new instruments linked to, for example, SOFR will build up. However, with regard to floating rate debt securities, SEK has switched from issuing USD LIBOR FRN to SOFR FRN. SEK’s exposure that is directly affected by the interest rate benchmark reform mainly relates to its lending and borrowing contracts with floating interest rates, its lending and borrowing contracts with fixed interest rates that are hedged to floating interest rates as well as currency swaps to floating interest rates. SEK’s exposure that is directly affected by the reference interest rate reform is mainly linked to its lending contracts at variable interest rates, its lending and borrowing contracts at fixed interest rates that are hedged at variable interest rates and currency swaps at variable interest rates. The exposures to variable interest rates are mainly against USD LIBOR, STIBOR and EURIBOR. GBP LIBOR, CHF LIBOR and JPY LIBOR ceased on December 31, 2021. Exposures against these variable interest rates have been converted. For USD LIBOR, the most common maturities are expected to expire after June 30, 2023. SEK has lending contracts and derivative contracts maturing after June 30, 2023 in USD LIBOR with a nominal amount of USD 1,870 million and USD 19,284 million, respectively. This debt generally includes fallback features that would allow for the use of an alternative rate if any of these rates were no longer available. In addition, SEK is working on a cross-organizational project to renegotiate legacy business in reliance on IBORs (primarily STIBOR and EURIBOR), introducing robust fallback provisions and generally following recommended guidelines from the International Swaps and Derivatives Association (ISDA), International Capital Markets Association (ICMA), the Alternative Reference Rates Committee (ARCC) and the FCA. However, the use of an alternative rate could result in increased costs and margin decompression for SEK going forward, impacting SEK’s business, results of operations and financial condition. Depending on market developments, SEK may also experience increased borrowing and hedging costs in the future. Conversely, the use of an alternative rate could also reduce the interest paid on SEK’s floating rate notes which could adversely affect the value and market for those notes. Uncertainty as to the nature of the potential discontinuance, modification, alternative reference rates or other reforms of LIBOR, EURIBOR and STIBOR may negatively impact market liquidity, SEK’s access to funding required to operate the business and the trading market for the Company’s floating rate debt securities.

ITEM 4. INFORMATION ON THE GROUP AND THE PARENT COMPANY

A.   History and Development of the Group and the Parent Company

Aktiebolaget Svensk Exportkredit (publ) (Swedish Export Credit Corporation) is a “public limited liability company” under the Swedish Companies Act (2005:551). It is wholly owned by the Swedish State through the Ministry of Enterprise and Innovation (“Sweden”, the “Swedish State” or the “State”).

The Parent Company was founded in 1962 in order to strengthen the competitiveness of the Swedish export industry by meeting a need for long-term financing for both exporters and their foreign customers. SEK’s objective is to engage in financing activities in accordance with the Swedish Banking and Financing Business Act (2004:297) and, in connection therewith, to promote the development of Swedish commerce and industry as well as otherwise engaging in Swedish and international financing activities on commercial terms. The duration of the Parent Company is indefinite.

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SEK’s mission has evolved since it began its operations in 1962. SEK’s range of products has expanded from its roots in export loans; however it remains a niche operator in the financial markets.

The address of the Parent Company’s principal executive office is AB Svensk Exportkredit (Swedish Export Credit Corporation), Fleminggatan 20, Stockholm, Sweden; and the Parent Company’s telephone number is +46-8-613-83 00. The Parent Company’s authorized representative in the United States is Business Sweden, whose contact information is as follows:

Business Sweden New York

The News Building,

220 E 42^nd Street

Suite 409A,

New York, NY 10017

Tel. No.: (212) 507-9001

usa@business-sweden.se

B.   Business Overview

SEK’s mission is to ensure access to financial solutions for the Swedish export industry on commercial and sustainable terms, with the aim of promoting the development and international competitiveness of Swedish industry and trade. Its mission includes, as a public policy assignment, administration of the CIRR-system. Pursuant to agreements established in 1978 and amended from time to time thereafter, the Group administers the CIRR-system on behalf of the Swedish State in return for compensation.

SEK extends loans on commercial terms at prevailing fixed or floating market interest rates as well as loans on State-supported terms at fixed interest rates that may be lower than prevailing fixed market rates in the CIRR-system. The compensation from the CIRR-system to SEK is recorded as a part of interest income in the Consolidated Statement of Comprehensive Income. See Note 1(f) to the Consolidated Financial Statements. Because Sweden is a member of the Organization for Economic Co-operation and Development (the “OECD”), the CIRR-system is designed to comply with the Arrangement on Guidelines for Officially Supported Export Credits of the OECD (the “Export Credit Guidelines”).

SEK’s product offerings are aimed at Swedish exporters and their customers, and its customers are mainly found among the 100 largest Swedish exporters with sales exceeding Skr 4 billion. Starting in 2015, SEK has also expanded its product offerings to reach medium-sized exporters with sales of more than Skr 500 million.

SEK works mainly in lending and as a result, SEK acts as a complement to, and works in cooperation with, Swedish and international banks as well as other financial institutions. SEK also has close partnerships with other export promotion agencies in Sweden such as Almi, Business Sweden, EKN and Swedfund.

SEK can provide loans in a number of different currencies and with different maturities. The majority of its lending is in Swedish kronor, US dollars or euros, but SEK also offers loans in several other currencies.

SEK’s borrowing activities in the international capital markets have given SEK expertise in financial instruments.

SEK’s niche specialization in long-term export-related financing, combined with its financial capacity and flexible organization, are key factors in the management of its operations.

2021

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Competition

SEK is the only institution authorized by the Swedish State to grant export financing loans under the CIRR-system. With support from the State, SEK helps Swedish export companies compete with other export companies within OECD member countries, which have similar support from their respective domestic export credit agencies and which also provide government-supported export credits. SEK also helps Swedish export companies compete with other export companies outside the OECD member countries. SEK’s lending, excluding the CIRR-system, faces competition from other Swedish and foreign financial institutions, as well as from the direct and indirect financing programs of exporters themselves.

The following table summarizes SEK’s loans outstanding and debt outstanding as of December 31, 2021 and 2020:

(A) Loans outstanding consist of loans due from commercial and financial institutions including loans in the form of interest-bearing securities. For a reconciliation of loans outstanding, see Note 11 to the Consolidated Financial Statements.

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Lending Operations – General

The following table sets forth certain data regarding the Group’s lending operations, including the CIRR-system, during the two-year period ending December 31, 2021:

Total loans outstanding, type of loans

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Over half of the loan volumes granted by SEK are granted to purchasers of Swedish exports. Western European markets are the largest markets for exported Swedish goods by revenue. However, exports to other markets, including less developed markets, are also important. Accordingly, the need for export financing may be related to transactions involving buyers in many different countries, with varying levels of creditworthiness. Pursuant to its credit risk exposure policy, SEK is selective in accepting such risk exposure. The credit risk exposure policy seeks to ensure that SEK is neither dependent on the creditworthiness of individual buyers of Swedish goods and services, nor on the countries in which they are domiciled, but rather on the creditworthiness of individual counterparties to which SEK accepts credit risk exposure. SEK relies to a large extent on guarantees in its lending. For additional information on SEK’s approach to risk, see Note 26 and Note 29 to the Consolidated Financial Statements.

SEK has no exposure to loans that the Company would characterize as high-risk lending, including loans which have been modified or would otherwise qualify as distressed debt, other than the limited amount of such assets disclosed in Note 9 to the Consolidated Financial Statements.

CIRR-system

SEK treats the CIRR-system as a separate operation for accounting purposes. Although the deficits (or surpluses) of programs under the CIRR-system are reimbursed by (or paid to) the Swedish State, any loan losses that may be incurred under such programs are not reimbursed by the Swedish State. Accordingly, SEK has to obtain appropriate credit support for those loans as well. All of the lending under the CIRR-system is reported on SEK’s Consolidated Statement of Financial Position. SEK has consequently presented the financial results of the CIRR-system in the Consolidated Statement of Comprehensive Income as the gross amounts collected and paid in accordance with the agreement with the Swedish State. See Note 1 to the Consolidated Financial Statements for further details. In general, loans under the program are guaranteed by EKN. All such loans granted by SEK must also undergo SEK’s customary approval process.

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Pursuant to an owner instruction adopted by the sole shareholder, the Swedish State, at the Annual General Meeting in April 2016, the difference between interest income related to lending and liquid assets under the CIRR-system on the one hand, and interest expenses related to borrowing, all other financing costs and any net foreign exchange losses incurred by SEK under the CIRR-system, on the other hand, are reimbursed by (or paid to) the Swedish State.

SEK reports loans in the following categories:

Loan Types and Underwriting Policies

(a) Lending to Swedish exporters

(b) Lending to exporters’ customers

Within the CIRR-system, SEK extends loans only for the medium and long-term financing of durable goods exports. CIRR-system lending includes financing in collaboration with intergovernmental organizations and foreign export credit agencies.

SEK’s credit underwriting policies and requirements are similar regardless of loan type, and pertain equally to the CIRR-system. The majority of SEK’s loans are guaranteed by export credit agencies or banks, or by credit default swaps issued by banks or other financial institutions.

SEK’s initial loan offer and subsequent commitment set forth the maximum principal amount of the loan, the currency in which the loan will be denominated, and the repayment and disbursement schedule.

For more information, see the table under the heading “Outstanding loans as per product type” under Note 11 to the Consolidated Financial Statements.

Interest Rates

Outside the CIRR-system, export financing is extended at prevailing market rates of interest. The Group normally makes loan offers at a quoted interest rate that is subject to change prior to acceptance of the loan offer (a non-binding offer). When a borrower accepts a non-binding loan offer, the interest rate is normally set at the then-prevailing market rate (which might have changed since the loan commitment was made), and a binding loan commitment arises. Binding offers can also be provided and are offers with a higher degree of commitment to the customer with regard to disbursement of the loan than non-binding offers, regardless of whether the interest rate is fixed or not.

Because Sweden is a member of the OECD, the CIRR-system is designed to comply with the Export Credit Guidelines, which establish minimum interest rates, required down payments and maximum loan periods for government-supported export loan programs.

SEK offers CIRR loans established by the OECD in accordance with the Export Credit Guidelines. The CIRR rates for new loans are subject to periodic review and adjustment by the OECD. The Export Credit Guidelines stipulate that loan offers may remain valid for a period of not more than 120 days. EU rules and Swedish regulations state that the commercial contract relating to the loan offer must be signed within that 120-day period. Thereafter, the CIRR rate can be locked in for a maximum period of six months in order for the loan agreement to be finalized. No commitment fee is charged by SEK for CIRR loans. SEK receives compensation from the Swedish government in the form of an administrative fee of 0.25 percent per annum, which is calculated based on the loan amount outstanding. The arranging or agent-bank, generally a commercial bank, receives compensation in the amount of 0.25 percent per annum, based on the loan amount outstanding, to cover its costs for arranging and managing loans.

SEK previously participated with government agencies in an export-financing program (the “Concessionary Credit Program”) financed by the Swedish State to promote exports to certain developing countries, incorporating a foreign aid element of at least 35 percent. Sweden is no longer providing new concessionary credits under the program, but SEK still has loans from the program outstanding on its balance sheet. Terms varied according to the per capita income of the importing country.

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The aid element is reflected in the form of lower rates of interest and/or deferred repayment schedules. The Swedish government reimburses SEK through the CIRR-system for the costs incurred as a result of SEK’s participation in the Concessionary Credit Program as well as any costs for CIRR financing.

Guarantees and Credit Default Swaps

SEK relies to a large extent on guarantees in its lending. The guarantors are principally made up of government export credit agencies, such as the EKN, the Export Import Bank of the United States, the Exports Credits Guarantee Department of the United Kingdom, Compagnie Française d’Assurance pour le Commerce Extérieur of France and Euler Hermes Kreditversicherungs AG of Germany, as well as financial institutions and, to a lesser extent, non-financial corporations. Credit risk is allocated to a guarantor in accordance with SEK’s policy and therefore, when disclosing net credit risk exposures, the majority of SEK’s guaranteed credit exposure is shown as exposure to sovereign counterparties. In general, loans under the CIRR-system are guaranteed by the EKN.

Total credit exposures for SEK covered by guarantees

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As of December 31, 2021, government export credit agencies guaranteed 43.5 percent (2020: 42.9 percent) of SEK's total credit exposures.

If a guarantee or credit default swap is entered into for risk-mitigating purposes, the instrument protects a pre-defined amount of SEK’s exposure with respect to the principal amount of the underlying loan (and in some cases interest) as long as the issuer of the guarantee or credit default swap is financially sound. The protected amount is ordinarily 75–100 percent of the principal amount. Most of the counterparties against whom SEK accepts net exposures are rated by one or more of the internationally recognized rating agencies.

For information regarding SEK’s gross and net credit exposures to counterparties, broken down by geography and type of counterparty (taking into account applicable guarantees but not collateral), see Note 26 to the Consolidated Financial Statements.

Loan Maturities

SEK’s historical role (and one that continues today) has been in the provision of long-term financing in order to promote the Swedish export industry. Since many of the projects the export industry engages in are long-term projects, both with regard to disbursement periods and repayment periods, SEK’s loans often have longer terms than those of loan products offered by commercial banks. However, SEK also meets its customers’ needs by providing short-term financing when required. Consequently, SEK’s loan maturities range from very short-term loans (with terms of three to six months) to loans for as long as 20–30 years. Under the CIRR-system, loan maturities generally range from one year up to 20–30 years.

Currency

SEK extends loans in different currencies, depending on the needs of its borrowers. Before the Group makes any loan commitment, it ensures that the currency in which the loan is to be funded is expected to be available for the entire loan period at an interest rate (taking into account the costs of foreign exchange derivatives) that, as of the day the commitment is made, results in a margin that the Group deems sufficient. The Group borrows, on an aggregate basis, at maturities corresponding to or exceeding those of prospective loans. Accordingly, the Group may decide not to hedge particular loan commitments due to movements in interest rate risk until sometime after they are made. Interest rate risks associated with such unhedged commitments are monitored closely and may not exceed interest rate risk limits established by the Board. SEK’s policies are described in Note 29 to the Consolidated Financial Statements.

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The following table shows the currency breakdown of loan offers accepted for loans with maturities exceeding one year for each year in the two-year period ending December 31, 2021.

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Credit Support for Loans Outstanding

The Group’s policies with regard to counterparty exposures are described in detail in Note 29 to the Consolidated Financial Statements.

The following table illustrates the counterparties for the Group’s loans and guarantees outstanding as of December 31, 2021 and December 31, 2020. Although most loans fall into more than one category for any given loan, this table only reflects the counterparty (either the borrower or the guarantor) that SEK believes to be stronger in terms of creditworthiness.

(A) EKN guarantees are in substance insurance against losses caused by the default of a foreign borrower or buyer in meeting its contractual obligations in connection with the purchase of Swedish goods or services. In the case of a foreign private borrower or buyer, coverage is for “commercial” and, in most cases, “political” risks. Coverage for “commercial” risk refers to losses caused by events such as the borrower’s or buyer’s insolvency or failure to make required payments within a certain time period (usually six months). Coverage for “political” risk refers to losses caused by events such as a moratorium, revolution or war in the importing country or the imposition of import or currency control measures in such country. Disputed claims must be resolved by a court judgment or arbitral award, unless otherwise agreed by EKN. In the table above, only the particular amount of any given total loan that is guaranteed is listed as such. The amount of any such loan that is not covered by the relevant guarantee is excluded. EKN is a State agency whose obligations are backed by the full faith and credit of Sweden.

(B) At December 31, 2021, the 2 percent (2020: 2 percent) of total loans represented loans to various financial institutions and minor commercial banks in Sweden, including guarantees in the form of bank guarantees or credit derivatives.

(C) At December 31, 2021, principally obligations of other Nordic, Western European or North American bank groups, together with obligations of Western European governments, including guarantees in the form of bank guarantees or credit derivatives.

(D) At December 31, 2021, approximately 10 percent (2020: 12 percent) of the total loan credit exposure represented loans to the 20 largest Swedish corporations.

See “—Lending Operations—General” for information on the geographical distribution of borrowers, see also Note 26 to the Consolidated Financial Statements.

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Swedish Government Supervision

Supervisory Authorities

SEK operates as a credit market institution within the meaning of the Swedish Banking and Financing Business Act (2004:297). As such, it is subject to supervision and regulation by Finansinspektionen (the “Swedish FSA”), which licenses and monitors the activities of credit market institutions to ensure their compliance with the Swedish Banking and Financing Business Act, including the regulations linked to it, and such institutions’ corporate charters. This supervision with respect to the Group’s minimum capital and liquidity requirements covers the Parent Company but not the Subsidiary because the Subsidiary is not classified as a credit market institution. Among other things, the Swedish FSA requires SEK to submit reports on a daily, monthly, quarterly, semi-annual and annual basis and may conduct periodic inspections. The Swedish FSA has also classified SEK as a level 2 institute in accordance with the EU Supervisory Review and Evaluation Process (SREP). As such, the Swedish FSA also carries out the SREP, which entails a more detailed review and evaluation of SEK’s governance, risk management, internal control as well as capital and liquidity planning, every two years. The Swedish FSA may also (but currently does not) appoint an external auditor to participate with SEK’s independent auditors in examining the Group’s and the Parent Company’s financial statements and the management of the Group.

The Swedish National Debt Office requires information to be reported by credit institutions, including SEK, in accordance with the Resolution Act. The Resolution Act originates from the BRRD, which provides an EU-wide framework for the recovery and resolution of credit institutions, among others. The BRRD requires all EEA member states to provide their relevant resolution authorities with a set of tools to intervene sufficiently early and quickly in an unsound or failing institution so as to ensure the continuity of the institution’s critical financial and economic functions, while minimizing the impact of an institution’s failure on the broader economy and financial system. The information is used to set the minimum requirement for own funds and eligible liabilities for the credit institution.

The Swedish National Audit Office may audit the activities that are conducted by the Swedish State in the form of limited companies if the State as owner has a controlling influence over the activities. The State has controlling influence over the activities of the Parent Company, which is a limited company. Accordingly, the Swedish National Audit Office may appoint an Authorized Public Accountant, in order to get access to the same information as the external auditors, but has not yet done so.

As a credit market institution, SEK is also subject to prudential regulations relating to, among other things, its capital adequacy, its maximal exposure to any counterparty or any group of interconnected clients and its liquidity position.

Capital adequacy regulations

As of January 1, 2014, the revised capital adequacy rules of the Basel Committee, referred to as Basel III, came into force within the European Union. Basel III was introduced by a legislative package consisting of the CRR and the Capital Requirements Directive (Directive 2013/36/EU of the European Parliament and of the Council of June 26, 2013, on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing directives 2006/48/EC and 2006/49/EC or the “CRD IV”). The CRR is directly applicable in Sweden and contains detailed requirements pertaining to capital adequacy, liquidity, large exposures, leverage ratio and supervisory reporting. The CRD IV was incorporated into Swedish legislation as of August 2, 2014 and covers areas such as principles for prudential supervision, internal assessments of risk and capital, corporate governance, capital buffers, sanctions and remuneration.

The current regulations introduced by the CRR and CRD IV replace regulations based on the previous revision of the Basel accord, Basel II, which had been the prevailing standard since 2007, as it was incorporated into EU and Swedish legislation. The CRR, as amended, and the CRD IV, as incorporated into national legislation, apply to credit institutions, including SEK, within Sweden and the European Union.

The main structure of Basel III consists of three “Pillars” as follows:

(i) Pillar 1 deals with minimum capital requirements for credit risks, credit valuation adjustment risks and market risks as well as for operational risks, based on explicit calculation rules. Under Pillar 1, an institution must at all times have own funds that in size and composition are sufficient to meet those minimum capital requirements. The capital requirements and the own funds are calculated in accordance with the CRR. Pillar 1 allows institutions to choose between some alternative methods based on their size, complexity, type of operations and subject to certain conditions. For credit risk, the standardized approach is the simplest

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approach, containing risk weights, all of which are established by national authorities. Institutions can expand upon the supervisory authorities’ risk weights by using risk assessments from recognized credit rating agencies such as Moody’s, Standard & Poor’s and Fitch. The next level of sophistication under Pillar 1 regarding credit risk is called the foundation internal rating-based (“IRB”) approach. Under the foundation IRB approach, the risk weights, and therefore the capital requirements, are partially based on institutions’ internal risk classifications of their exposures and counterparties. SEK’s permission to base its capital requirement for credit risk on the IRB approach covers most of the Company’s exposures.

(ii) Pillar 2 pertains to national supervisory authorities’ evaluation of risks and describes requirements for institutions’ processes for risk and capital management. It also establishes the supervisory authorities’ functions and powers. Further, under Pillar 2 each financial institution must identify risks and assess risk management from a wider perspective, to supplement the capital requirements calculated within the scope of Pillar 1. This Internal Capital Adequacy Assessment Process (ICAAP) and Internal Liquidity Adequacy Assessment Process (ILAAP) also takes qualitative risks into account. SEK annually assesses the development of its future capital and liquidity requirements and available capital primarily in connection with the update of its three-year business plan. Furthermore, each quarter, the Swedish FSA publishes the result of its assessments on the capital adequacy reflecting additional requirements for risks not covered by the Pillar 1 for the ten largest financial institutions in Sweden, including SEK. This publication covers additional estimates of concentration risk, sovereign risk, market risk and pension risk. Moreover, it reflects the ICAAP, where the additional risks are included and evaluated annually.

(iii) Pillar 3 concerns and places requirements on transparency and comparability and how institutions, in a broad sense, should report their operations to the market and the public. The disclosure of capital and risk management must follow the requirements of the CRR and some additional regulations issued in Sweden, most notably the Swedish FSA’s regulations FFFS 2014:12 regarding prudential requirements and capital buffers. Under CRR II (discussed below), the EU introduced formal revision to the disclosure framework with extended scope, application and frequency of Pillar 3 disclosures for large and listed institutions. The revised Pillar 3 framework indicates which disclosures are required from institutions, on the basis of their size, complexity and of whether they are listed or non-listed institutions. As SEK meets the criteria for large and listed institutions since 2021 new quarterly, semi-annual and annual disclosure requirements are applicable to it.

New regulations in force during 2021

CRR II, which is directly applicable in law in all EU member states, entered into force on June 28, 2021. CRD V was incorporated into Swedish national law on December 9, 2020 and entered into force on December 29, 2020.

The new regulation and national adaptation of the directive introduced a binding minimum leverage ratio requirement of at least 3 percent and a net stable funding ratio requirements of at least 100 percent. In addition, a revised market risk framework (FRTB), a new standardized approach for counterparty credit risk (SA-CCR), minimum requirement for own funds and eligible liabilities (MREL), changes to the large exposure framework were also introduced.

The CRD V also introduced the mandate for competent authorities to define appropriate levels of own funds for institutions (a so called “Pillar 2 guidance”). An additional Pillar 2 requirement was communicated by the competent authorities in September 2021, including communication of a Pillar 2 guidance. While the Pillar 2 guidance does not constitute a formal binding requirement, the Swedish FSA expects institutions to follow the recommendation, and retains the option of enforcing the Pillar 2 guidance as a Pillar 2 capital requirement following failure to adhere to the authority’s recommendation.

Upcoming regulations

In October, 2021 the EU Commission published a proposal on how Basel IV shall be implemented in the EU. In the proposal, which covers changes to both CRR (“CRR III”) and CRD (“CRD VI”), the implementation of Basel IV is postponed from the deadline set by the Basel Committee from 1 January, 2023 until 1 January, 2025. The proposed EU directive and regulation largely follows the standards set out by the Basel Committee, and introduces a new output floor for internal models for market risk and credit risk, revised standardized approaches for credit risk and operational risk, constraints on the use of internally modelled approaches for credit risk and changes in leverage ratio requirements. The output floor, which is designed to ensure that banks’ capital requirements calculated under internal models-based approaches may not fall below 72.5% of the capital requirements calculated under the standardized approaches, will be phased in incrementally over five years, beginning with 50% 1 January, 2025 before becoming fully effective with 72.5% on January 1, 2030.

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Liquidity standards

As mentioned above, the CRR also includes liquidity standards: the liquidity coverage ratio (“LCR”) and net stable funding ratio (“NSFR”). The LCR requires that a bank holds enough high quality liquid assets to cover its projected net cash outflows over a 30-day stress scenario. The European Commission has adopted a delegated regulation on LCR. The detailed LCR rules came into force on October 1, 2015 and were amended by a Commission Delegated Regulation in 2018. They require institutions, including SEK, to maintain a LCR of at least 100 percent from 2018. In addition, the Swedish FSA requires institutions to maintain a LCR of at least 100 percent separately in euro and USD and also a LCR of at least 75 percent in Skr and other significant currencies. The NSFR requires that a bank maintain a stable borrowing profile in relation to the composition of its assets and off-balance sheet activities under both normal and stressed conditions. A requirement to maintain a NSFR ratio of at least 100 percent was implemented on June 30, 2021. SEK has consistently maintained an LCR and NSFR in excess of minimum requirements. See Note 26 to the Consolidated Financial Statements for further details on liquidity standards.

Measures of capital adequacy

Two parallel capital requirements must be met from June 2021, a risk-based requirement and a requirement for leverage ratio. For SEK, the risk-based minimum capital requirement exceeds the leverage ratio requirement.

The risk-based requirement is a capital-to-risk exposure amount ratio, which compares the own funds, as defined in the CRR, to the total of risk-weighted exposures, that is assets and off-balance sheet items measured according to the risk level.

According to the CRR, own funds consist of three components with different levels of quality from a loss absorption perspective:

The minimum total capital ratio requirement under Pillar 1 is 8.0 percent, a requirement that has not changed with the CRR. However, the CRR introduced additional requirements on the higher quality components of capital, with a minimum requirement of 4.5 percent and 6.0 percent relating to Common Equity Tier 1 capital and Tier 1 capital, respectively.

¹ Under Pillar 1.

² Under Pillar 1 and Pillar 2 including Buffer requirements.

In addition to these minimum ratios, SEK must meet certain capital buffers requirements. Failure to meet the additional buffers requirements triggers, among other things, restrictions on distributions. The countercyclical buffer rate that is applied to exposures located in Sweden was lowered from 2.5 percent to 0 percent as of March 16, 2020. The reduction was made for preventive purposes, in order to counteract credit tightening due to the development and spread of COVID-19 and its effects on the economy. The Swedish FSA decided on September 29, 2021 to increase the countercyclical buffer rate to 1 percent. The new countercyclical buffer rate applies from September 29, 2022. SEK is also expected to cover the supplementary capital requirements estimated under Pillar 2, which in practice constitutes an extension of the minimum capital requirement for financial institutions in Sweden, covering additional risks not included in the Pillar 1 minimum requirements. Beginning in September 2021 an individual Pillar 2 requirement of 3.67 percent calculated on the total risk exposure amount was introduced, according to the decision from the latest Swedish FSA SREP.

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Furthermore, SEK started from the same date to hold additional capital of 1.5 percent of the total risk-weighted exposure amount in accordance with pillar 2 guidance. The Pillar 2 guidance is not a binding requirement. SEK’s policy is to maintain own funds well in excess of both the regulatory minimum requirements under Pillar 1 and the supplementary capital requirements under Pillar 2.

One of the contributing factors for the decrease in SEK’s capital ratios as of December 31, 2021 compared with year-end 2020 was a weaker Swedish currency against the USD and the euro. SEK does not apply IFRS 9 transitional rules for expected losses. The capital adequacy ratios already reflect the full impact of IFRS 9 with regard to expected losses. See Note 25 to the Consolidated Financial Statements for further details on the capital adequacy and capital buffers of SEK.

Large exposures

The CRR also imposes restrictions on large exposures, which limit a bank’s concentration of credit risks. According to the CRR, a large exposure refers to an exposure to any counterparty or any group of interconnected clients that accounts for at least 10 percent of an institution’s eligible capital, which effectively for SEK is the total of own funds. Beginning June 28, 2021, large exposures are determined based on Tier 1 capital instead of eligible capital pursuant to revisions adopted in CRR II.

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The aggregate amount of SEK’s large exposures as of December 31, 2021 consisted of exposures to 18 different counterparties, or counterparty groups.

In order to monitor large exposures, SEK has defined internal limits for large exposures, which are monitored daily, along with other limits.

Minimum requirement for own funds and eligible liabilities

The Swedish National Debt Office decides on plans for how Swedish banks and other financial institutions are to be managed in a crisis situation. The Swedish National Debt Office, in its role as the Swedish resolution authority, makes an annual assessment of which banks and financial institutions are systemically important,on the basis of their significance for the financial system as a whole. Resolution applies only for systemically important banks or other financial institutions. SEK is a systemically important institution according to the Swedish National Debt Office’s assessment. The Swedish National Debt Office also sets minimum requirements for own funds and eligible liabilities (MREL) for those institutions to ensure resolvability. In July, 2021 the Swedish national adaptation of the revised BRRD (BRRD II) entered into force, amending the previous MREL requirements to ensure that institutions meet the requirement with own funds and eligible liabilities. Additionally, the new MREL requirements needs to also be met with subordinated debt. In December, 2021, the Swedish National Debt Office communicated a new MREL requirement for SEK applicable from 1 January, 2024, including intermediate requirements to be met as of 1 January, 2022. For 2022, SEK must meet a minimum level of at least (i) 13.5 percent of the total risk exposure amount (REA), and (ii) 5 percent of the total Leverage ratio exposure measure (LRE), using own funds and subordinated eligible liabilities. At December 31, 2021, part (i) was the higher requirement for SEK and the outcome was 19.1 percent of REA. This minimum requirement for own funds and eligible liabilities (MREL) is met in whole using SEK’s own funds excluding the CET1 capital used to meet the combined buffer requirements.The requirement that should be met at January 1, 2024 amounts to (i) 27.34 percent of REA, and (ii) 6 percent of LRE, of which at least (i) 23.34 percent of REA, and (ii) 6 percent of LRE should be met using own funds and subordinated eligible liabilities.

The Swedish National Debt Office has also communicated target levels for 2022. The target level for own funds and eligible liabilities is (i) 23.34 percent of REA, and (ii) 6 percent of LRE. At December 31, 2021, part (i) was the higher requirement for SEK and the outcome was 55.9 percent of REA. The target level for own funds and subordinated eligible liabilities coincides with the minimum level as above.

C.   Organizational Structure

In the last quarter of 2021, SEK started to implement a new organization aimed at reaching business goals and ensuring increased selling power as per the new business plan for 2022–2024. The new organization is to be fully implemented in 2022. A new function for Strategy, Business Development and Communication has been created, at the same time as the functions for Marketing & Communication and Transformation have been discontinued. The function International Finance has been added and replaces

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Structured Finance. Business Support has been included in the Client Relations function. Moreover, the Strategic Partnerships and Relations function has been discontinued, and the function’s responsibilities have been allocated between International Finance, Sustainability and Finance. The new Sustainability function is being formed and will be implemented in early 2022. The function will have a Head of Sustainability who reports directly to the CEO and will be part of executive management. The objective is to further increase focus on sustainability topics within the Company. SEK also maintains an independent risk control function, a compliance function as well as staff and support functions.

Risk Control, Compliance and Internal Audit

SEK maintains a risk control function and a compliance function which operate independently of the business areas. See also Note 29 to the Consolidated Financial Statements. In November 2011, upon the recommendation of the Audit Committee, SEK’s Board decided that the independent internal audit function would be outsourced to an external company from the beginning of 2012. SEK’s Board appointed KPMG to be responsible for the independent internal audit function and they commenced their assignment in January 2012. Their assignment was extended for the years 2013 through 2018. As of 2019, this assignment was transferred to another external party, Deloitte, and they maintained the assignment during 2021. In appointing an external party to perform the internal audit, SEK benefits from significant competence and experience in auditing SEK’s compliance with applicable regulations. SEK's Risk and Compliance Committee, of which the Chief Executive Officer (the “CEO”) is the chairman, has overall responsibility to establish the internal rules for the internal control of the financial reporting and follow-up compliance with the internal control regulations. The Risk and Compliance Committee has been discontinued as of 2022. The matters of the committee are now part of the responsibilities of the Executive committee.

D.   Property, Plants and Equipment

SEK’s current headquarters, which occupy approximately 3,445 square meters of office space in central Stockholm, are leased. SEK also leases office space in Gothenburg, which occupies approximately 19 square meters.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

A.    Operating Results

Introduction

A major part of SEK’s operating profit derives from net interest income, which is earned mainly on loans to customers, but also to a lesser extent on liquidity investments. Borrowing for these assets comes from equity and from securities issued in international capital markets. Accordingly, the key determinants of SEK’s operating profit are: the interest rate on interest-bearing assets, the interest rate of issued securities, the outstanding volume of interest-bearing assets and the proportion of assets financed by equity.

SEK issues debt instruments with terms that may be fixed, floating or linked to various indices. SEK’s strategy is to economically hedge these terms at floating rates with the aim of matching the terms of its debt-financed assets. The quality of SEK’s operating profit, its relatively stable credit ratings and SEK’s public role have enabled SEK to achieve borrowing at levels that are competitive within the market. Another factor affecting net interest income is the size of the resolution fee, which SEK is required to pay to a fund to support the recovery of credit institutions.

In addition to net interest income, another key influence on SEK’s operating earnings has been changes in the fair value of certain assets, liabilities and derivatives. The factor that mainly impacts unrealized changes in fair value is cross-currency basis spreads. Cross-currency basis spread is the deviation in the nominal interest rate between two currencies in a currency interest rate swap caused by the difference between the base interest rate of the currencies.

Operating expenses, primarily driven by personnel expenses, also have an important impact on SEK’s operating profit.

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Other comprehensive income is primarily affected by unrealized changes in fair value attributable to credit spreads on SEK’s own debt, which relate to the credit rating attributed to SEK by its investors.

SEK’s general business model is to hold financial instruments measured at fair value to maturity. The net fair value changes that occur mainly relate to changes in credit spreads on SEK’s own debt, which due to IFRS 9, are reported in other comprehensive income from 2018 compared to net results of financial transactions prior to IFRS 9, and basis spreads, which are recognized in net results of financial transactions. The changes could be significant in a single reporting period, but will not affect earnings over time since the lifetime cumulative changes in the instrument’s market value will be zero if it is held to maturity and is a performing instrument. When financial instruments are not held to maturity, realized gains and losses can occur, for example when SEK repurchases its own debt, or if lending is repaid early and the related hedging instruments are terminated prematurely.

For Critical Accounting Policies and Estimates and Recent Accounting Pronouncements Issued and Other Accounting Related Announcements, see Note 1 to the Consolidated Financial Statements.

For a discussion and analysis of SEK’s financial condition and operating results for the year ended December 31, 2020 and 2019, see Item 5 of SEK’s Form 20-F for the year ended December 31, 2020 filed with the SEC on February 23, 2021.

Key Performance Indicators

The following table summarizes SEK’s key performance indicators and how SEK defines them. We use certain key performance indicators to monitor and manage our business. We use these indicators to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. We believe these indicators provide useful information to investors in understanding and evaluating our operating results in the same manner we do.

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Overview of 2021

Over the year, SEK lent Skr 77.0 billion to Swedish exporters and their customers around the world, as compared with lending for 2020 of Skr 125.5 billion when demand for finance was at a record high. The previous year’s high lending volume underlines the benefit provided by SEK in being able to provide the Swedish export industry with finance even in times of economic turbulence. Since provisions for expected credit losses were lower than last year, we achieved a higher net profit for the full year, Skr 1,034 million compared with Skr 968 million last year. Following limited demand for credits during the first half of the year, lending increased over the last six months. For the full-year, we recorded a somewhat lower net interest income, Skr 1,907 million compared with SEK 1,946 million last year.

In the fourth quarter, SEK closed its first transaction within the framework of social loans, an export credit of EUR 186 million, with SEK financing the renovation and new build of two specialist hospitals in Ghana. Several Swedish companies are supplying products and expertise for the project. The hospitals are expected to provide high-quality specialist care that will improve the lives of a great number of people in the communities they serve. Conducting business in developing countries with complex regulatory environments can be challenging, but SEK is working intensely to support projects in the region.

We have continued efforts to review SEK’s strategic direction and to prepare our business plan for 2022–2024. We will strive to increase our income base and grow in terms of the number of clients and total outstanding client exposures. We will also look to deepen relationships and broaden the scope of business with existing clients and create new business opportunities through partnerships and collaboration. We aim to efficiently create more value for more exporters.

SEK has implemented organizational changes with the aim of working more strategically and advancing our position in the area of sustainability. For example, SEK resolved to establish a new function, Sustainability, the manager of which is part of the executive management team. Our aim is for sustainable finance to become an equally natural part of SEK’s brand as international financing is

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today. Another new function is Strategy, Business Development and Communication, which is responsible for the Company’s strategic business development.

In 2021, SEK’s Board of Directors adopted a number of climate targets for the operations, including that SEK’s lending portfolio should achieve net zero emissions by 2045, and that the proportion of green loans on the balance sheet should increase to 50 percent by 2030.

Many exporters have a goal of being climate neutral and are investing in a sustainable green transition. SEK has noted increased demand for financing major transition projects in Sweden and internationally, in particular, within energy, infrastructure, healthcare and water treatment. The need for transition projects in developing countries is substantial, particularly when it comes to projects with a social impact.

During the almost two years that have passed since the beginning of the COVID-19 pandemic, SEK has supported our clients’ increased financing requirements, while retaining a strong financial position. Our capitalization exceeds the requirements of the Finansinspektionen (the Swedish FSA) as well as the Company’s capital target, and we have continually maintained high liquidity while retaining a match funded balance sheet.

Operations

Following limited demand for working capital from Swedish exporters during the first half of the year, lending increased during the second half of the year. Demand for financing has been positively impacted by a favorable economic trend, generally higher acquisition activity, and strong demand for export and project credits.

Some transactions have been delayed due to component shortages and delivery disruptions. The spread of the COVID-19 pandemic has also limited opportunities to meet clients and business partners. Despite this, the number of clients has increased by 11 percent in 2021.

In 2021, SEK prepared two new offerings in sustainable finance: a social loan and a sustainability-linked loan. One example of a sustainability-linked transaction in the fourth quarter was the lending of EUR 55 million in working capital to the industrial group Axel Johnson International, which develops and acquires technology companies in strategic niche markets. The loan is related to Axel Johnson International’s sustainability target that aims to increase its share of renewable electricity as well as energy-efficiency enhancements in own operations and internal transportation. If the target is achieved, a lower interest rate will apply for the borrower.

After a substantial increase in borrowing requirements in 2020 due to increased customer demand largely driven by the COVID-19 pandemic, SEK’s need to raise long-term financing normalized in 2021. Over the course of the year, SEK raised borrowings corresponding to Skr 81.1 billion with maturities of at least one year, compared with Skr 123.2 billion in 2020. The borrowing volume in the fourth quarter of 2021 was Skr 19.1 billion.

In the fourth quarter, SEK conducted a public offering of a USD 1.25 billion two-year fixed rate bond. Similar to SEK’s previous benchmark notes offerings, the bond was marketed and priced against SOFR (Secured Overnight Financing Rate) instead of LIBOR, in accordance with the standard that is being developed in the market. As part of the efforts to adapt to SOFR and replace LIBOR, SEK also issued a new global bond tranche of USD 350 million of its USD 700 million bond with a SOFR-based floating interest rate, which increased its value outstanding to USD 1.05 billion.

The volume of new structured debt in 2021 remained at the same level as 2020, but increased as a share of total new borrowing from 13 percent in 2020 to 20 percent in 2021.

In furtherance of SEK’s commitment to sustainability, the Company issued Skr 6.1 billion in green bonds during 2021.

SEK continues to have high liquidity for new lending and is well prepared to meet the future financing needs of the Swedish export industry.

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Assets and Business Volume

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Total assets decreased by 1 percent compared to the end of 2020.

New lending (offers accepted)

(A) Of which Skr 2.6 billion (year-end 2020: Skr 1.1 billion) had not been disbursed at period end.

(B) Of which Skr 18.6 billion (year-end 2020: Skr 17.9 billion) had not been disbursed at period end.

The decline in lending compared with the previous year is attributable to the extraordinarily high levels of new lending in 2020, when many companies secured their financing needs in the early stages of the COVID-19 pandemic to help strengthen their liquidity position. Lending to Swedish exporters in 2020 was significantly higher than usual.

Binding offers outstanding of lending

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Commitments of undisbursed loans amounted to Skr 53.9 billion in 2021 (year-end 2020: Skr 57.2 billion).

Counterparty Risk Exposures

Credit exposures have increased to financial institutions in 2021 as compared to 2020, which is mainly due to an increase in liquidity investments. For more information, see the table “Total net exposures” in Note 26 to the Consolidated Financial Statements.

Total counterparty exposure

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Other exposures and risks

SEK’s hedging transactions are expected to be effective in offsetting changes in fair value attributable to hedged risks. The determination of the gross value of certain items in the statements of financial position, particularly derivatives and unsubordinated liabilities, which effectively hedge each other, requires complex judgments regarding the most appropriate valuation technique, assumptions and estimates. If different valuation models or assumptions are used, or if assumptions change, a different result may arise. Excluding the impact on the valuation of spreads on SEK’s own debt and basis spreads (which can be significant), such changes in fair value would generally offset each other, with little impact on the value of net assets.

SEK maintains a conservative policy with regard to market risk exposures, primarily consisting of interest rate risks and currency risks. For quantitative and qualitative information about risks and exposures, see Note 26 Risk Information and Note 29 Risk and capital management.

Results of Operations

Net interest income

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Net interest income amounted to Skr 1,907 million (2020: Skr 1,946 million), a decrease of 2 percent compared to the previous year. The record high lending in 2020 has continued to have a positive impact on the Company’s net interest income, albeit now decreasing. SEK has noted a stabilization of net interest income at a somewhat lower level. This is due in part to the fact that some short-term working capital financing that was raised at relatively high interest rates at the start of the COVID-19 pandemic has matured. The table above shows average interest-bearing assets and liabilities.

Commission earned and commission incurred

Commission earned and commission incurred amounted to Skr -29 million (2020: Skr -42 million). Commission earned amounted to Skr 2 million (2020: Skr 1 million). Commission incurred amounted to Skr -31 million (2020: Skr -43 million).

Net results of financial transactions

Net results of financial transactions amounted to Skr 56 million (2020: Skr 83 million) mainly due to early loan redemptions and unrealized value changes in derivatives. Although the volatility in the fixed income market was relatively high during the period, the Company’s risk hedging strategies have worked well and the volatility in the Company’s net results of financial transactions has been kept low.

Operating expenses

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Operating expenses increased 12 percent compared to the previous year. The increase in operating expenses is mainly due to write-downs of intangible assets, but also increased costs in relation to regulatory compliance. No provision was made for the individual variable remuneration program (2020: Skr 8 million).

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Depreciation and impairment of non-financial assets

Depreciation and impairment of non-financial assets amounted to Skr -80 million (2020: Skr -51 million), which was an increase of 57 percent compared to the previous year.

Net credit losses

Net credit losses amounted to Skr 41 million (2020: Skr -153 million). Net credit losses were primarily attributable to decreased provisions for expected credit losses for exposures in stage 1 and stage 2, partly offset by increased provisions for expected credit losses for exposures in stage 3. The decrease in provisions for stage 1 and stage 2 was largely attributable to a gradual decrease of the reserve for expected credit losses that had been increased in connection with the COVID-19 pandemic. In 2021, SEK incurred losses of Skr 52 million on exposures as to which provisions had already largely been taken.

SEK’s IFRS 9 model is based on GDP growth projections estimating the impact on the probability of default. SEK’s management believes the model underestimates the probability of default within the asset portfolio, see Note 4. Although the recovery has been faster than expected, SEK has made an overall adjustment accordingly.

Loss allowances as of December 31, 2021 amounted to Skr -164 million compared to Skr -249 million as of December 31, 2020, of which exposures in stage 3 amounted to Skr -48 million (year-end 2020: Skr -46 million). The provision ratio amounted to 0.06 percent (year-end 2020: 0.08 percent).

Taxes

Tax costs amounted to Skr -271 million (2020: Skr -270 million), of which Skr -272 million (2020: Skr ­266 million) consisted of current tax and Skr 1 million (2020: Skr 0 million) consisted of deferred tax. The effective tax rate amounted to 20.8 percent (2020: 21.8 percent), compared to the nominal tax rate for 2021 of 20.6 percent (2020: 21.4 percent).

Operating and net profit

Operating profit amounted to Skr 1,305 million (2020: Skr 1,238 million). Net profit amounted to Skr 1,034 million (2020: Skr 968 million). The higher net profit compared with the previous year is mainly explained by lower provisions for expected credit losses. The lower provisions are partly attributable to the decrease of the reserve for expected credit losses that had been increased in connection with the COVID-19 pandemic.

Other comprehensive income

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Other comprehensive income before tax amounted to Skr 0 million (2020: Skr 19 million). The outcome is explained by a positive result related to the revaluation of defined benefit plans, which was affected by a higher discount rate and offset by a negative result from changes in own credit risk.

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B.    Liquidity and Capital Resources

SEK’s policy for liquidity and borrowing risk requires that for all loans outstanding as well as agreed but undisbursed loans, there must be borrowing available through maturity. For CIRR loans, which SEK manages on behalf of the Swedish State, the Company counts its credit facility of Skr 200 billion with the Swedish National Debt Office, as available borrowing. In December 2021, the credit facility was renewed through the end of 2022 by the Swedish Government in order to further enhance the ability to promote the Swedish export industry but decreased to Skr 175 billion, of which Skr 13 billion can be used for commercial export financing. SEK had utilized Skr 10 billion of the credit facility by December 31, 2021. For commercial loans, the Company counts its credit facility of Skr 13 billion, as available borrowing. As a consequence, SEK continues to have a high level of liquid assets and a low borrowing risk. The aggregate volume of funds and equity exceeded the aggregate volume of loans outstanding and loans committed during each future time period. Accordingly, SEK considers all loan commitments to be funded through maturity. As of December 31, 2021, SEK had 4 months of available funds to meet potential disbursements under new lending agreements, as compared to 3 months as of December 31, 2020. See the section titled “Liquidity risk and refinancing risk” in Note 26 to the Consolidated Financial Statements and the liquidity risk discussion in Note 29 to the Consolidated Financial Statements.

Borrowing

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New borrowing in 2021 was lower than in 2020. Lower lending volume was the main reason for decreased borrowing.

In 2021, SEK has raised borrowings corresponding to Skr 81 billion with long maturities, that is, maturities of at least one year, a decrease of Skr 42 billion year-on-year. A considerable portion of the long-term borrowing, 80 percent, was conducted in the form of plain vanilla transactions sold to investors worldwide. SEK also issued commercial papers with shorter maturities, corresponding to Skr 4 billion in 2021.

SEK’s borrowing over the course of the year took place in multiple different currencies across a number of different geographic markets. Europe (other than the Nordic countries) and North America were the largest borrowing markets in 2021.

SEK continues to have high liquidity for new lending and is well prepared to meet the future financing needs of the Swedish export industry. The Group has adequate resources to continue for a period of at least 12 months from the date of approval of the financial statements.

Debt Maturities

The following table illustrates SEK’s debt maturity profile for different types of senior and subordinated debt. Repayments are assumed to occur on the maturity date and reflect nominal amounts.

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Senior Debt by Category:

The following table illustrates our outstanding senior debt by category.

⁽¹⁾ As of December 31, 2021 the interest rate ranges for fixed-rate senior debt and variable-rate senior debt were 0 percent to 9 percent (2020: 0 percent to 9 percent) per annum respectively. The wide range of interest rates reflects the fact that the debt is issued in many different currencies and with different maturities.

⁽²⁾ Of which Skr 0 billion (2020: Skr 10 billion) is linked to IBOR.

SEK’s economic hedges are expected to be effective in offsetting changes in fair values attributable to hedged risks. Certain assets and liabilities in such hedges require complex judgments regarding the most appropriate valuation models and assumptions. The gross values of certain assets and liabilities (primarily derivative and senior securities issued by SEK), which effectively hedge each other, are affected by this complexity. If different valuation models or assumptions were employed instead of those used in the valuations in this report, or if assumptions were changed, this could produce different results regarding the gross value of such securities issued and hedging derivatives. Changes in the fair value of derivatives will usually be offset by changes in fair value of securities issued, and the connected change in the fair value will thus not have a material effect on either results or equity except the impact on valuation of credit spreads on SEK’s own debt and basis spreads.

The outstanding volume of debt with remaining maturities of one year or less increased during 2021. At December 31, 2021, outstanding debt with remaining maturities of one year or less amounted to Skr 95 billion, compared with Skr 80 billion at December 31, 2020.

C.    Research and Development, Patents and Licenses

In the ordinary course of business, the Group develops new products and services across each of its business lines.

D.    Trend Information

SEK’s future development is based on a number of factors, some of which are difficult to predict and generally beyond the Company’s control. Material factors for 2021 are presented below:

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For additional information on the trends affecting SEK and the risks it faces, see the discussions elsewhere in this Item 5 (including under “Assets and Business Volume” above) and the “Risk Factors” in Item 3.

E.    Off-Balance Sheet Arrangements

SEK had a credit facility in place with the Swedish National Debt Office of up to Skr 200 billion in 2021. The credit facility could be used both within the current CIRR-system and up to Skr 15 billion, for commercial export financing. The facility is intended as a reserve when funding markets are not available to SEK.

In December 2021, the credit facility was renewed through the end of 2022 but decreased to Skr 175 billion, of which 13 billion can be used for commercial export financing. SEK had utilized Skr 10 billion of the credit facility by December 31, 2021.

F.    Tabular Disclosure of Contractual Obligations

Contractual Commitments

For maturity analysis of SEK’s financial assets and liabilities as of December 31, 2021, see the table entitled “Contractual Flows” in Note 26 to the Consolidated Financial Statements.

G.    Safe Harbor.

See the section entitled “Forward-Looking Statements” above.

ITEM6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

The Board is responsible for the management of the Parent Company.

The Parent Company’s Articles of Association currently provide that the Board shall consist of six to eight directors. The State, as holder of all the shares, elects the directors. The Chairman of the Board is appointed at each Annual General Meeting. The Board may appoint a Vice Chairman of the Board.

The Board meets at least six times a year.

The members of the Board are elected at each Annual General Meeting to serve for a term of one year, which expires at the next Annual General Meeting. An Annual General Meeting is required to be held not later than June 30 of each year.

Certain information with respect to the Parent Company's directors and executive officers is set forth below. Unless otherwise indicated, such information is given as of the date of this report.

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Board of Directors and Executive Officers

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A1.    The Board

Mr. Linder-Aronson was appointed director in May 2011. He is currently Chairman of the board of directors at Strand European Holdings AB, Nordisk Renting AB, Ursvik Entré Holding AB and Ursvik Entré AB. He serves as a director of Facility Labs AB and Morco Förvaltning AB. He has previously served as Managing Director at Enskilda Securities AB and Deputy Managing Director at Skandinaviska Enskilda Banken AB.

Ms. Brandt was appointed director in November 2017. She is currently ambassador and permanent representative of Sweden to the OECD and Unesco in Paris. She has previously served as Executive Director and board member of the World Bank, European Bank for Reconstruction and Development (EBRD), and European Investment Bank (EIB), ambassador for Agenda 2030 at the Ministry for Foreign Affairs and Sweden’s ambassador to Nairobi, Kenya and to Dublin, Ireland.

Mr. Geijer was appointed director in March 2017. He is currently Chairman of the board of directors at BTS Group AB and a board member of Eterna Invest AB, and Livförsäkringsaktiebolaget Skandia. He has previously served as CEO at The Royal Bank of Scotland, Nordic Branch, CEO at Nordisk Renting AB, Executive Vice President at Telia AB and CEO at Swedbank. He has also previously worked in Ericsson Radio Systems AB, SSAB Swedish Steel and Weyerhaeuser Integrated Forest Company, USA.

Mr. Jacobsen was appointed director in March 2021. He is currently Chairman of the board of Careium AB, Qliro AB, and Playground Group AB. He is also a board member of Swedbank Robur Fonder AB and Oryx Holding AB. He has previously served as Executive Vice President, Country Senior Executive Sweden and Head of Retail Banking of Nordea Bank AB and CEO Nordics of GE Capital Global Banking AB.

Ms. Lagercrantz was appointed director in March 2019. She is currently Senior Investment director at Ministry of Enterprise and Innovation at the Government Offices of Sweden. She is currently also a board member of Almi Företagspartner AB and Research Institutes of Sweden (RISE) AB. She has previously served as board member of LKAB, SBAB, SOS Alarm AB, Swedish Space Corporation (SSC), Svenska Skeppshypotek, Swedfund International AB and AO Dom Shvetsii. She has previously worked as an equity analyst at Skandinaviska Enskilda Banken AB, and as a corporate finance executive with UBS AG and S.G. Warburg.

Mr. Larsson was appointed director in March 2017. He is currently Founder and CEO at Linderyd Advisory AB and Lunda Advisory AB. He serves as Chairman of the board of directors at Bank Norwegian ASA. He is currently a board member of Norwegian Finans Holding ASA, Nordnet AB, Nordnet Bank AB and Intrum AB. He has previously served as Member of the Group management, Head

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of Group Strategy & Business Development at SEB, Executive Vice President and Chief of Staff at Lindorff Group and a board member of Nordax AB and Nordax Bank AB.

Ms. Nilsagård was appointed director in April 2018. She is currently Founder and CEO at Nilsagård consulting. She serves as Chairman of the board of directors at Spermosens AB and Diagonal Bio AB. She is also board member in AddLife AB, Bufab AB, Xbrane Biopharma AB, Hansa Biopharma AB, Nimbus Group AB, Nanexa AB and Irras AB, eEducation Albert AB. She has previously served as CFO at Plastal Industri AB, SVP Strategy & Business development Volvo Trucks (EMEA), Vitrolife and VP Finance & IT Volvo Penta and held other senior positions within finance and business development in Volvo, AstraZeneca Group and SKF.

A2.    Management – Executive Officers

Mr. Montan has been CEO since July 2021. He also holds a current position as the Founding Partner at RRM Capital since January 2020. He also held several positions within Nordea between 2014 and 2019; Nordic Head of Business Banking (2016-2019) and Nordic Head of Commercial & Business Banking Strategy & Development (2014-2016). Prior to that he held several positions within HSBC in Europe, Asia and Latin America between 1996 and 2014; Managing Director & Regional Head of Global Trade & Receivables Finance, Latin America (2012-2014), Director & Head of International Business & COO, China (2009-2012), Director & Head of International Business Strategy, Asia Pacific (2008-2009), Director & Head of Multinational Companies, South Korea (2005-2007), Associate Director & Financing & Risk Advisory, Asia Pacific (2004-2005), Relationship Executive Debt Recovery & Restructuring, Asia Pacific (2002-2004), Chief Operating Officer, Uruguay (2001-2002), Relationship Manager Corporate Banking, Brazil (1999-2001) and International Manager Trainee Program (1996-1999). In addition, Mr. Montan holds and has held the following positions of trust; Board Member Majblomman (a Swedish nationwide charity) (2020-current), Board Member Nordea Hypotek (the Nordea mortgage company) (2019-current), Assets & Liabilities Committee (ALCO), Nordea Group (2015-2019), Business Ethics & Values Committee (BEVC), Nordea Group (2015-2019), Risk Committee (RICO), Nordea Group (2015-2017) and International Branches Board, Nordea Group (2015-2019).

Mr. Åkerlind has been Executive Vice President since January 2019. He has previously worked as Head of Strategic Partnerships and Relationships since 2019, Executive Vice President and Head of Treasury & Capital Management since 2015. Prior to that he served as Chief Operating Officer since January 2011. Prior to that he was CFO and Head of Capital Markets since June 2002. Prior to that he served as Treasurer and Head of Debt Capital Markets beginning in 1997. Prior to that he served in various capacities within the Debt Capital Markets group, beginning in 1990.

Mr. Bernerfalk has been General Counsel since 2015. Previously he was Head of Legal Lending since 2007. Prior to that he served as legal counsel of SBAB and served as legal counsel with leading Swedish law firms.

Mr. Ericson has been Head of International Finance since November 2021, Senior Director, Head of Mid Corporates since 2015, and Executive Director, Head of Mid Corporates and member of the Executive Board since 2018. Prior to that he held a position as Director within Debt Capital Markets. Prior to that he served as Senior Underwriter at EKN and before that he held various positions within Export Finance, Securities etc. at SEB.

Mr. Friberg has been CFO since January 2019. He had previously worked as Executive Director, Chief Risk Officer (“CRO”) since May 2015. Previously he held the position as Head of Market Risk control from 2008 and as Head Group Risk Control from 2013 at Skandinaviska Enskilda Banken (“SEB”). Prior to that he served as Head of Credit Portfolio Management at SEB from 2006. Prior to that he held various positions in trading within SEB and Nordea, primarily in derivatives trading, since 1996.

Ms. Hamilton Burman has been Chief Credit Officer since August 2015. Previously she held several positions within Swedbank e.g. Regional Credit Manager, Head of Corporate Banking, Head of Credit analysis. In addition she has been a director representing Swedbank in several of its subsidiaries such as Swedbank Financial Services AB, Swedbank Card Services AB and some partly owned saving banks and the credit bureau UC AB.

Mr. Hedar has been Head of Client Relationship Management since November 2021. Previously he held several positions within SEK since 2018 as Head of Large Corporates, and since 2007, such as Senior Director and Head of Large Corporates, Director, Senior Client Executive and Senior Manager of the Financial Advisory business. Prior to that he served in various capacities in Boliden Mineral AB, Outokumpu Oyj and AvestaPolarit AB.

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Ms. Rusanen has been Chief Human Resources Officer since 2005. Prior to that, she served as Human Resource Manager at Ericsson, beginning in 1997.

Ms. Rystedt has been Head of Strategy, Business Development and Communication since November 2021. She had previously worked as Head of Business Development, Business Support and Transformation since January 2019, and Chief Administrative Officer since March 2009. Prior to that, she served as Head of Business Development & IT at SEB Life beginning in 2005. From 2002 to 2005, she served as Head of IT at SEB Trygg Liv, and before that she served in other capacities at SEB Trygg Liv and Enskilda Securities and as a member of the Group Staff within the SEB Group, beginning in 1990.

Mr. Svensén has been CRO since October 2019. Prior to his employment at SEK, he served as CRO at SBAB for seven years. Prior to SBAB, he worked as a consultant at Oliver Wyman.

Ms. Widaeus has been CIO, Head of IT, since February 2018. Prior to her employment at SEK, she served as CIO at Bankgirot for three years. Prior to that, she worked for fourteen years at Swedbank in different roles.

¹In the form of salaries, fees and other benefits in the case of executive officers. In the form of fees and other benefits in the case of directors.

²Since April 29, 2010, remuneration is not paid from the Company to the representatives on the Board who are employed by the owner, the Swedish State.

³Remuneration and other benefits. The CEO did not receive any variable compensation.

⁴Remuneration and other benefits.

For information on amounts set aside or accrued by SEK to provide employee pension benefits, see also Note 5 to the Consolidated Financial Statements.

C.    Board Practices

Activities and Division of Responsibility within the Board

The Board is responsible for the organization and the administration of SEK’s affairs in which sustainability forms an integral part. The Board is also tasked with ensuring that the Company’s financial statements, including sustainability reporting, are prepared in accordance with legislation, applicable accounting standards and other requirements. The Board must continually assess SEK’s financial position and ensure that SEK is structured in such a way that its accounting, management of funds and SEK’s other financial circumstances are governed by satisfactory controls. The Board adopts the operating targets and strategies for the operations, and issues general internal regulations in policies and instructions. The Board ensures that an efficient system is in place to monitor and control SEK’s operations. In addition, the Board is tasked with appointing, and dismissing if necessary, the CEO and the Chief Risk Officer, and deciding on the remuneration of these individuals and other members of executive management.

The Board’s work follows its rules of procedure and the Board’s rules of procedure are adopted each year at the statutory Board meeting. The Board met on 13 occasions in 2021. The CEO attends all Board meetings except those addressing matters in which there is a conflict of interest, such as when evaluating the CEO’s work or determining the CEO’s compensation.

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The Board´s rules of procedure govern such matters as reporting to the Board, the frequency and form of the meetings of the Board, and delegation and assessment of the work of the Board and the CEO. In addition to this, the Board monitors financial developments and has ultimate responsibility for internal control, compliance and risk management.

The Board is responsible for a well thought-out and firmly established policy and strategy for dealing with respect for the environment, social responsibility, human rights, corruption as well as equal opportunities and diversity.

The Chairman of the Board leads the work of the Board and is responsible for ensuring that the other members of the Board are provided with the necessary information.

When required, the Chairman of the Board participates in important meetings and represents the Company in ownership matters. The tasks of the Chairman of the Board conform to applicable legislation and the rules of procedure of the Board. Auditors are invited to participate at meetings of the Board at least once a year. The auditors appointed by the Annual General Meeting have attended one of the meetings of the Board. The General Counsel acts as secretary to the Board.

The Board has established a credit committee (the body that deals with credit-related matters), a finance and risk committee (the body that deals with other financial matters besides those relating to credits as well as risk issues), an audit committee (the body that deals with the Company’s financial reporting, internal control, etc.) and a remuneration committee (the body that deals with certain remuneration matters). Besides the Board committees and the work for which the Chairman is responsible, work is not divided within the Board.

Appointing the Board and Auditors

The nomination procedure for Board members complies with the State’s ownership policy and is conducted and coordinated by the Division for State-owned enterprises at the Swedish Ministry of Enterprise and Innovation. For each enterprise, the expertise required is analyzed on the basis of the enterprise’s operations, situation and future challenges, board composition and board evaluations performed by the Ministry of Enterprise and Innovation. As part of its work in the board nomination process, the Government Offices also conducts its own ongoing evaluation of the boards of all state-owned enterprises. Any recruitment need is then determined, and recruitment work is begun. The state’s ownership policy sets out that the government seeks to achieve an even gender balance and the target is a minimum of 40 percent board representation for both women and men. Boards with six to eight directors elected by the general meeting of shareholders must include at least three persons of each gender. Directors are to be selected from a broad recruitment base with the aim of utilizing the expertise of women and men, as well as of individuals with various backgrounds and experience. Discrimination associated with gender, transgender identity or expression, ethnic affiliation, religion or other belief, disability, sexual orientation preference or age is prohibited.

SEK carries out a suitability assessment of Board members and senior executives pursuant to the regulatory framework issued by the EBA. SEK’s assessment of potential new Board members is based on the owner (the Swedish State) having identified the candidate in question according to a job specification. The owner is informed of the outcome following SEK’s assessment. Thereafter, SEK reports the candidate to the Swedish Financial Supervisory Authority for its assessment and validation of the candidate. When the procedure is complete, the nominations are disclosed publicly in accordance with the provisions of the Swedish Corporate Governance Code. The terms of the Board members’ engagement do not provide for benefits upon an early termination of engagement or resignation.

The 2021 Annual General Meeting elected Öhrlings PricewaterhouseCoopers AB as auditor of the Company, with auditor authorized public accountant Anneli Granqvist as principal auditor and authorized public accountant Peter Sott as co-signing auditor.

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Policy documents

In 2021, SEK’s Board and committees adopted the following policies and instructions:

Document:

The Board’s rules of procedure

Code of Conduct

Policy of Sustainable Financing

Risk Policy

Credit Policy

Instruction for the CEO

Instruction for the Chief Risk Officer, CRO

Instruction for the Internal Audit function

Instruction for the Compliance function

HR policy

Information Security Policy

Credit Instruction

Accounting instruction

Code of Conduct for Suppliers

Board’s work during the year

During spring 2021, the Board’s work focused largely on the adoption of new overall financial targets for the Company as well as the recruitment of a new CEO. During the Board’s strategy days that were held in the presence of the new CEO, Magnus Montan, much time was devoted to forward-looking questions such as how to design the Company’s capital strategy, how the Company can even more successfully fulfil its mission by doing more for more parties, and determining which long-term sustainability goals should be adopted. These questions have thereafter been addressed at Board meetings throughout the autumn ahead of the adoption of the business plan for the next three years at the November 2021 meeting.

In addition to more customary Board business, such as the adoption of full-year and interim reports, follow-up of reports from the control functions and of major projects, in 2021, the Board also took decisions on the relocation of SEK’s head office, followed up sustainability issues in a couple of individual lending transactions, and adopted a new sustainable finance policy prepared in consultation with the Swedish Export Credit Agency to ensure that the two bodies essentially set the same requirements.

The Covid-19 pandemic continued to impact not only the work of the Company but also of the Board through 2021. A tangible result of this has been that most of the year’s meetings had to be held digitally. At the same time, greater familiarity with managing digital meetings enable the Board to conduct customer meetings virtually. Such meetings were held in the spring with clients in the telecom, energy and shipping sectors. However, physical meetings with clients were held in the autumn. In 2021, the Board of Directors also participated in a number of training courses. The themes that were brought up included capital issues from a broader perspective, the design and function of the recovery plan and a review of the so called IBOR reform (transition to essentially risk-free rates) and SEK’s efforts to adjust to the changes that this entails.

Quality assurance of financial reporting

To ensure correct and reliable financial reporting, SEK has developed a management system for financial reporting based on the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework for internal control (2013 version). This internal control framework is divided into five components: Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring Activities.

Evaluation of the work of the Board and the CEO

A separate assessment of the work of the Board and CEO is carried out once a year under the leadership of the Chairman. The results of this assessment were reported to the Board and, by the Board’s Chairman, to the owner. An evaluation is also performed by the owner in conjunction with the nomination of directors. The evaluation for 2021 was conducted with particular focus on the assessment that is to be made of the Board’s suitability as a group in accordance with the guidelines issued by the EBA.

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The Board Committees

The Board has established the following committees. Credit Committee, Finance and Risk Committee, Remuneration Committee and Audit Committee. The Board’s rules of procedure include establishing annual instructions for all of its committees. The minutes from each committee are reported at meetings of the Board by the respective committee’s chairman.

Credit Committee

Reinhold Geijer (Chairman), Anna Brandt, Lars Linder-Aronson and Eva Nilsagård.

Finance and Risk Committee

Hans Larsson (Chairman), Hanna Lagercrantz and Lars Linder-Aronson.

Ensure that the Company can identify, measure, manage, report internally and control the risks to which it is or can be expected to be exposed.

Remuneration Committee

Lars Linder-Aronson (Chairman), Reinhold Geijer, Lennart Jacobsen and Hanna Lagercrantz.

Audit Committee

Eva Nilsagård (Chairman), Lennart Jacobsen and Hans Larsson.

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Attendance at Board and committee meetings in 2021

D.    Employees

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The total number of employees is small in relation to the volume of lending because the number of lending transactions is relatively small and the administration and documentation of loans are in many cases handled by the banks participating in the transactions. The Group has not experienced any strikes or labor disputes and considers its employee relations to be strong.

For more information, see “Personnel Expenses” in Note 5 to the Consolidated Financial Statements.

Members of the Board, the CEO, and other executive officers have no share ownership in the Parent Company or Subsidiary and no options have been granted to them with respect to the Parent Company’s shares. There are no arrangements for involving the employees in the capital of the Parent Company, including any arrangement that involves the issue or grant of options, shares or securities of the Parent Company.

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E.    Share Ownership

None.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.    Major Shareholders

As of December 31, 2021, the total number of shares outstanding was 3,990,000. Since June 30, 2003, the Swedish State has been the sole (100 percent) owner of SEK. The State owns all of the Company’s shares.

The following table sets forth the share ownership of the Parent Company:

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Ownership and governance

SEK is owned by the Swedish State. The State exerts its influence at the Parent Company’s general meetings and through representation on the Board.

The governance of SEK is divided between the shareholder, the Board and the CEO, in accordance with the Swedish Companies Act, the Articles of Association, and the Board’s procedural rules. The Board appoints the CEO, who conducts ongoing management in accordance with the Board’s guidelines and instructions.

The State as shareholder has decided that State-owned companies should observe the Swedish Corporate Governance Code.

B.    Related party transactions

SEK defines related parties for the Consolidated Group as:

The Swedish State owns 100 percent of the Company’s share capital. By means of direct guarantees extended by the Swedish National Debt Office and the Swedish Export Credits Guarantee Board, EKN, 44 percent (year-end 2020: 39 percent; year-end 2019: 38 percent) of the Company’s outstanding loans on December 31, 2021, were guaranteed by the State. The remuneration to EKN for the guarantees paid by SEK during 2021 amounted to Skr 45 million (2020: Skr 26 million; 2019: Skr 0 million). SEK administers, for compensation, the Swedish State’s export credit support system (the “CIRR-system”) and the State’s related concessionary credit program, see Note 1(f) and Note 24 to the Consolidated Financial Statements.

SEK has a Skr 200 billion (2020: Skr 200 billion; 2019: Skr 125 billion) credit facility with the Swedish National Debt Office, which can be used for State’s export credit support (CIRR) or commercial export financing up to Skr 15 billion (2020: Skr 15 billion; 2019: Skr 0 million). In December 2021, the credit facility was renewed through the end of 2022 but decreased to Skr 175 billion, of which Skr 13 billion can be used for commercial export financing. SEK had utilized Skr 10 billion of the credit facility by December 31, 2021.

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SEK enters into transactions in the ordinary course of business with entities that are partially or wholly-owned or controlled by the State. SEK also extends export credits (in the form of direct or pass-through loans) to entities related to the State. Transactions with such parties are conducted on the same terms (including interest rates and repayment schedules) as transactions with unrelated parties.

Key management personnel include the following persons:

For information about remuneration and other benefits to key management personnel see Note 5, “Personnel expenses” to the Consolidated Financial Statements.

Other related parties include close family members of key management personnel as well as companies which are controlled by key management personnel controlled by close family members to key management personnel.

See also Note 27 to the Consolidated Financial Statements for further details on related-party transactions.

C.    Interests of Experts and Counsel.

Not applicable.

ITEM 8.FINANCIAL INFORMATION

A.    Consolidated Statements and Other Financial Information

See Item 18, “Financial Statements.”

Legal Proceedings

There are no material pending or, to the Group’s knowledge, threatened, legal or governmental proceedings to which the Group is or would be a party or to which any of its property is or would be subject.

Dividend Policy

The Board resolved for each year, as listed in the table below, that the corresponding amount was to be paid to the sole shareholder, the Swedish State, in relation to the fiscal year of each such year.

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For additional details regarding equity, see the Consolidated Statement of Equity.

B.    Significant Changes

Except as otherwise disclosed in this report, there has been no significant change in SEK’s financial position since December 31, 2021.

ITEM 9. THE OFFER AND LISTING

A.    Offer and Listing Details

Not applicable.

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B.    Plan of Distribution

Not applicable.

C.    Markets

The Parent Company’s shares, all of which are owned by the State, are not listed on any exchange in Sweden or outside Sweden.

All issues of SEK’s U.S. medium term notes listed on securities exchanges in the United States are set forth on the cover of this Report. Certain global issues of such notes are listed on European exchanges.