Bond CaixaBank 5.25% ( ES0840609012 ) in EUR

CaixaBank

97.53 % ▼

Spain

ES0840609012 ( in EUR )

5.25% per year ( payment 4 times a year)

Perpetual

Prospectus brochure of the bond Caixabank ES0840609012 en EUR 5.25%, maturity Perpetual

23/09/2025 ( In 25 days )

CaixaBank is a Spanish multinational financial services company headquartered in Valencia, offering a wide range of banking, insurance, and asset management services.

The Bond issued by CaixaBank ( Spain ) , in EUR, with the ISIN code ES0840609012, pays a coupon of 5.25% per year.
The coupons are paid 4 times per year and the Bond maturity is Perpetual

CAIXABANK, S.A.
(incorporated as a limited liability company (sociedad anónima) in Spain)
Perpetual Non-Cumulative Contingent Convertible Additional
Tier 1 Preferred Securities
Issue Price: 100 per cent.
The 1,250,000,000 Perpetual Non-Cumulative Contingent Convertible Additional Tier 1 Preferred Securities of 200,000 liquidation preference each (the "Preferred Securities") are being
issued by CaixaBank, S.A. (the "Bank", the "Issuer" or "CaixaBank") on 23 March 2018 (the "Closing Date"). The Bank and its consolidated subsidiaries are referred to herein as the
"CaixaBank Group" or the "Group".
The Preferred Securities will accrue non-cumulative cash distributions ("Distributions") as follows: (i) in respect of the period from (and including) the Closing Date to (but excluding 23
March 2026 (the "First Reset Date"), at the rate of 5.25 per cent. per annum, and (ii) in respect of each period from (and including) the First Reset Date and every fifth anniversary thereof
(each a "Reset Date") to (but excluding) the next succeeding Reset Date (each such period, a "Reset Period"), at the rate per annum, calculated on an annual basis and then converted to a
quarterly rate in accordance with market convention, equal to the aggregate of 4.504 per cent. per annum (the "Initial Margin") and the 5-year Mid-Swap Rate (as defined in the terms and
conditions of the Preferred Securities (the "Conditions")) for the relevant Reset Period. Subject as provided in the Conditions, such Distributions will be payable quarterly in arrears on 23
March, 23 June, 23 September and 23 December, in each year (each a "Distribution Payment Date").
The Bank may elect, in its sole and absolute discretion, to cancel the payment of any Distribution in whole or in part at any time as further provided in Condition 4.3. Without prejudice to the
right of the Bank to cancel the payments of any Distribution: (a) payments of Distributions in any financial year of the Bank shall be made only to the extent the Bank has sufficient
Distributable Items (as defined in the Conditions). To the extent that the Bank has insufficient Distributable Items to make Distributions on the Preferred Securities, the Bank will only make
partial or, as the case may be, no payment of the relevant Distribution on the Preferred Securities; (b) if the Competent Authority (as defined in the Conditions) requires the Bank to cancel the
relevant Distribution in whole or in part, the Bank will only make partial or, as the case may be, no payment of the relevant Distribution on the Preferred Securities; (c) the Bank may make
partial or, as the case may be, no payment of the relevant Distribution on the Preferred Securities if and to the extent that such payment would cause the Maximum Distributable Amount to be
exceeded or otherwise would cause a breach of any regulatory restriction or prohibition on payments on Additional Tier 1 Capital (as defined in the Conditions) pursuant to Applicable Banking
Regulations (as defined in the Conditions); and (d) if the Trigger Event (as defined in the Conditions) occurs at any time on or after the Closing Date (as defined in the Conditions), the Bank
will not make any further Distribution on the Preferred Securities and any accrued and unpaid Distributions up to a Trigger Event shall be automatically cancelled.
The Preferred Securities are perpetual. All, and not some only, of the Preferred Securities may be redeemed at the option of the Bank on any Distribution Payment Date falling on or after the
First Reset Date, at the liquidation preference of 200,000 per Preferred Security plus any accrued and unpaid Distributions for the then current Distribution Period (as defined in the
Conditions) to (but excluding) the date fixed for redemption (the "Redemption Price"). The Preferred Securities are also redeemable on or after the Closing Date at the option of the Bank in
whole but not in part, at any time, at the Redemption Price if there is a Capital Event or a Tax Event (each as defined in the Conditions). Subject, in each case, to the prior consent of the
Competent Authority and otherwise in accordance with the Applicable Banking Regulations (as defined in the Conditions) then in force.
In the event of the occurrence of the Trigger Event (as defined in the Conditions) (i.e. if at any time the CET1 ratio (as defined in the Conditions) falls below 5.125 per cent.), the Preferred
Securities are mandatorily and irrevocably convertible into newly issued ordinary shares in the capital of the Bank ("Ordinary Shares") at the Conversion Price (as defined in the Conditions).
In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Bank, Holders will be entitled to receive (subject to the limitations described in the
Conditions), in respect of each Preferred Security, their respective liquidation preference of 200,000 plus any accrued and unpaid Distributions for the then current Distribution
Period to the date of payment of the Liquidation Distribution (as defined in the Conditions).
The Preferred Securities are rated BB- by Standard & Poor's Credit Market Services Europe Limited ("S&P"). S&P is established in the European Union ("EU") and is registered under
Regulation (EC) No. 1060/2009 (as amended) on credit rating agencies (the "CRA Regulation"). As such, S&P is included in the list of credit rating agencies published by the European
Securities and Markets Authority on its website in accordance with the CRA Regulation. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision,
suspension or withdrawal at any time by the assigning rating organisation.
This document constitutes a listing prospectus (the "Prospectus") for the purposes of Article 3 of Directive 2003/71/EC of the European Parliament and of the Council of the EU, as amended
and implemented in each Member State (the "Prospectus Directive") and has been prepared in accordance with, and including the information required by annexes I, III (sections 3.1 and 3.2),
XIII and XIV of Regulation (EC) No. 809/2004 (the "Prospectus Regulation"). This Prospectus has been approved by the Spanish National Securities Market Commission (Comisión
Nacional del Mercado de Valores) (the "CNMV") in its capacity as competent authority under the Prospectus Directive and its implementing measures in Spain, including the Spanish
Securities Market Act (Royal Legislative Decree 4/2015, of 23 October, approving the consolidated text of the Spanish Securities Market Act; the "LMV").
Application has been made for the Preferred Securities to be admitted to trading on the Spanish AIAF Fixed Income Securities Market ("AIAF"). The Preferred Securities may also be admitted
to trading on any other secondary market as may be agreed by the Issuer.
Amounts payable under the Preferred Securities from and including the First Reset Date are calculated by reference to the 5-year Mid-Swap Rate (as defined in the Conditions) which appears
on the ICESWAP/ISDAFIX2 screen, which is provided by ICE Benchmark Administration Limited or by reference to EURIBOR 6-month (as defined in the Conditions) which appears on the
EURIBOR01 screen, which is provided by the European Money Markets Institute. As at the date of this Prospectus, ICE Benchmark Administration Limited and the European Money Markets
Institute do not appear on the register of administrators and benchmarks established and maintained by the European Securities and Markets Authority ("ESMA") pursuant to Article 36 of the
Regulation (EU) No. 2016/1011 (the "Benchmark Regulation"). As far as the Issuer is aware, the transitional provisions in Article 51 of the Benchmark Regulation apply, such that ICE
Benchmark Administration Limited and the European Money Markets Institute are required to apply for authorisation or registration before 1 January 2020.
The Preferred Securities are complex financial instruments and are not a suitable or appropriate investment for all investors. The Preferred Securities are not intended to be
offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area ("EEA"). Prospective
investors are referred to the section headed "Restrictions on marketing and sales to retail investors" on pages 4 and 5 of this Prospectus for further information.
Prospective purchasers of the Preferred Securities should ensure that they understand the nature of the Preferred Securities and the extent of their exposure to risks and that they
consider the suitability of the Preferred Securities as an investment in the light of their own circumstances and financial condition.
An investment in the Preferred Securities involves certain risks. For a discussion of these risks see "Risk Factors" beginning on page 7.
The Preferred Securities and any Ordinary Shares to be issued and delivered in the event of the occurrence of the Trigger Event have not been, and will not be, registered under the United
States Securities Act of 1933, as amended (the "Securities Act"), and are subject to United States tax law requirements. The Preferred Securities are being offered outside the United States in
accordance with Regulation S under the Securities Act ("Regulation S"), and may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons
except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
Joint Lead Managers
Barclays
BofA Merrill Lynch
CaixaBank
Citigroup
Goldman Sachs International
The date of this Prospectus is 15 March 2018

1

IMPORTANT NOTICES
This Prospectus is to be read in conjunction with all documents which have been incorporated by reference
herein (see "Documents Incorporated by Reference"). This Prospectus shall be read and construed on the
basis that such documents are incorporated and form part of this Prospectus.
The Issuer has not authorised the making or provision of any representation or information regarding the
Issuer or the Preferred Securities other than as contained in this Prospectus or as approved for such purpose
by the Issuer. Any such representation or information should not be relied upon as having been authorised by
the Issuer or Barclays Bank PLC, CaixaBank, S.A., Citigroup Global Markets Limited, Goldman Sachs
International and Merrill Lynch International (together, the "Joint Lead Managers").
None of the Joint Lead Managers has separately verified the information contained or incorporated by
reference in this Prospectus. None of the Joint Lead Managers nor any of their respective affiliates has
authorised the whole or any part of this Prospectus. Neither the delivery of this Prospectus nor the offering,
sale or delivery of any Preferred Security shall in any circumstances create any implication that there has been
no change in the affairs of the Issuer, or any event reasonably likely to involve any adverse change in the
condition (financial or otherwise) of the Issuer, since the date of this Prospectus or that any other information
supplied in connection with the Preferred Securities is correct as of any time subsequent to the date on which
it is supplied or, if different, the date indicated in the document containing the same.
None of the Joint Lead Managers makes any representation, express or implied, or accepts any responsibility,
with respect to the accuracy or completeness of any of the information contained or incorporated by reference
in this Prospectus or any other information supplied by the Issuer in connection with the Preferred Securities.
Neither this Prospectus nor any such information or financial statements of the Issuer are intended to provide
the basis of any credit or other evaluation and should not be considered as a recommendation by the Issuer or
the Joint Lead Managers that any recipient of this Prospectus or such information or financial statements
should purchase the Preferred Securities. Each potential purchaser of Preferred Securities should determine
for itself the relevance of the information contained or incorporated by reference in this Prospectus and its
purchase of Preferred Securities should be based upon such investigation as it deems necessary. None of the
Joint Lead Managers undertakes to review the financial condition or affairs of the Issuer during the life of the
arrangements contemplated by this Prospectus nor to advise any investor or potential investor in the Preferred
Securities of any information coming to the attention of the Joint Lead Managers.
The Joint Lead Managers are acting exclusively for the Issuer and no one else in connection with any offering
of the Preferred Securities. The Joint Lead Managers will not regard any other person (whether a recipient of
this Prospectus or otherwise) as their client in relation to any such offering and will not be responsible to
anyone other than the Issuer for providing the protections afforded to their clients or for giving advice in
relation to such offering or any transaction or arrangement referred to herein.
This Prospectus does not constitute an offer of, or an invitation to subscribe for or purchase, any Preferred
Securities.
The distribution of this Prospectus and the offering, sale and delivery of Preferred Securities in certain
jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes are required by
the Issuer and the Joint Lead Managers to inform themselves about and to observe any such restrictions.
In particular, the Preferred Securities and the Ordinary Shares have not been and will not be registered under
the Securities Act and are subject to United States tax law requirements. Subject to certain exceptions,
Preferred Securities may not be offered, sold or delivered within the United States or to U.S. persons.

2

In this Prospectus, unless otherwise specified, references to a "member state" are references to a Member
State of the European Economic Area, references to "U.S. dollar" are to United States dollars, references to
"", "EUR" or "euro" are to the currency introduced at the start of the third stage of European economic and
monetary union, and as defined in Article 2 of Council Regulation (EC) No 9741498 of 3 May 1998 on the
introduction of the euro, as amended.
Words and expressions defined in the Conditions (see "Conditions of the Preferred Securities") shall have the
same meanings when used elsewhere in this Prospectus unless otherwise specified.
Potential investors are advised to exercise caution in relation to any offering of the Preferred Securities. If a
potential investor is in any doubt about any of the contents of this Prospectus, it should obtain independent
professional advice. Prior to making an investment decision, potential investors should consider carefully, in
light of their own financial circumstances and investment objectives, all the information contained in this
Prospectus or incorporated by reference herein. A potential investor should not invest in the Preferred
Securities unless it has the expertise (either alone or with its financial and other professional advisers) to
evaluate how the Preferred Securities will perform under changing conditions, the resulting effects on the
value of the Preferred Securities and the impact this investment will have on the potential investor's overall
investment portfolio. See further "Risk Factors The Preferred Securities may not be a suitable investment
for all investors" for additional information.
Restrictions on marketing and sales to retail investors
The Preferred Securities issued pursuant to the Prospectus are complex financial instruments and are not a
suitable or appropriate investment for all investors (see also "Risk Factors Risks related to the Preferred
Securities"). In some jurisdictions, regulatory authorities have adopted or published laws, regulations or
guidance with respect to the offer or sale of securities such as the Preferred Securities to retail investors. As
agreed by the Issuer and the Joint Lead Managers, offers of the Preferred Securities in Spain shall only be
directed specifically at or made to professional investors (clientes profesionales) as defined in Article 205 of
the LMV.
In particular, in June 2015, the U.K. Financial Conduct Authority (the "FCA") published the Product
Intervention (Contingent Convertible Instruments and Mutual Society Shares) Instrument 2015, which took
effect from 1 October 2015 (the "PI Instrument"). In addition, (i) on 1 January 2018, the provisions of
Regulation (EU) No. 1286/2014 on key information documents for packaged and retail and insurance-based
investment products (the "PRIIPs Regulation") became directly applicable in all EEA member states and (ii)
the Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on Markets in
Financial Instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (as amended, "MiFID
II") was required to be implemented in EEA member states by 3 January 2018. Together the PI Instrument,
the PRIIPs Regulation and MiFID II are referred to as the "Regulations".
The Regulations set out various obligations in relation to (i) the manufacture and distribution of financial
instruments and the (ii) offering, sale and distribution of packaged retail and insurance-based investment
products and certain contingent write-down or convertible securities such as the Preferred Securities.
The Joint Lead Managers are required to comply with some or all of the Regulations. By purchasing, or
making or accepting an offer to purchase, any Preferred Securities (or a beneficial interest in the Preferred
Securities) from the Issuer and/or the Joint Lead Managers, each prospective investor represents, warrants,
agrees with and undertakes to the Issuer and each of the Joint Lead Managers that:
1. it is not a retail client (as defined in MiFID II);
2. whether or not it is subject to the Regulations, it will not:

3

(A) sell or offer the Preferred Securities (or any beneficial interest therein) to retail clients (as defined in
MiFID II); or
(B) communicate (including the distribution of the Prospectus) or approve an invitation or inducement to
participate in, acquire or underwrite the Preferred Securities (or any beneficial interests therein)
where that invitation or inducement is addressed to or disseminated in such a way that it is likely to
be received by a retail client (in each case within the meaning of the MiFID II). In selling or offering
the Preferred Securities or making or approving communications relating to the Preferred Securities,
it may not rely on the limited exemptions set out in the PI Instrument; and
3. it will at all times comply with all applicable laws, regulations and regulatory guidance (whether inside or
outside the EEA) relating to the promotion, offering, distribution and/or sale of the Preferred Securities
(or any beneficial interests therein), including (without limitation) MiFID II and any other such laws,
regulations and regulatory guidance relating to determining the appropriateness and/or suitability of an
investment in the Preferred Securities (or any beneficial interests therein) by investors in any relevant
jurisdiction.
Each prospective investor further acknowledges that:
(i)
the identified target market for the Preferred Securities (for the purposes of the product governance
obligations in MiFID II) is eligible counterparties and professional clients; and
(ii)
no key information document (KID) under the PRIIPs Regulation has been prepared and therefore
offering or selling the Preferred Securities or otherwise making them available to any retail investor
in the EEA may be unlawful under the PRIIPs Regulation.
Each potential investor should inform itself of, and comply with, any applicable laws, regulations or
regulatory guidance with respect to any resale of the Preferred Securities (or any beneficial interests therein),
including the Regulations.
Where acting as agent on behalf of a disclosed or undisclosed client when purchasing, or making or accepting
an offer to purchase, any Preferred Securities (or any beneficial interests therein) from the Issuer and/or the
Joint Lead Managers the foregoing representations, warranties, agreements and undertakings will be given by
and be binding upon both the agent and its underlying client.
PRIIPs Regulation / Prohibition of sales to EEA retail investors  The Preferred Securities are not
intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made
available to any retail investor in the EEA. For these purposes, a "retail investor" means a person who is one
(or more) of: (i) a retail client as defined in point (11) of Article 4(I) of MiFID II; (ii) a customer within the
meaning of Directive 2002/92/EC (the "Insurance Mediation Directive"), where that customer would not
qualify as a professional client as defined in point (10) of Article 4(I) of MiFID II; or (iii) not a qualified
investor as defined in the Prospectus Directive. Consequently, no key information document (KID) required
by the PRIIPs Regulation for offering or selling the Preferred Securities or otherwise making them available
to retail investors in the EEA has been prepared and therefore offering or selling the Preferred Securities or
otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs
Regulation.
MIFID II product governance / Professional investors and ECPs only target market  Solely for the
purposes of each manufacturer's product approval process, the target market assessment in respect of the
Preferred Securities has led to the conclusion that: (i) the target market for the Preferred Securities is eligible
counterparties and professional clients only, each as defined in MiFID II; and (ii) all channels for distribution
of the Preferred Securities to eligible counterparties and professional clients are appropriate. Any person
subsequently offering, selling or recommending the Preferred Securities (a "distributor") should take into

4

consideration the manufacturers' target market assessment. However, a distributor subject to MiFID II is
responsible for undertaking its own target market assessment in respect of the Preferred Securities (by either
adopting or refining the manufacturers' target market assessment) and determining appropriate distribution
channels.
Alternative Performance Measures
This Prospectus (and the documents incorporated by reference in this Prospectus) contains certain
management measures of performance or alternative performance measures ("APMs"), which are used by
management to evaluate CaixaBank's overall performance. These APMs are not audited, reviewed or subject
to review by CaixaBank's auditors and are not measurements required by, or presented in accordance with,
International Financial Reporting Standards ("IFRS") as adopted by the EU ("IFRS-EU"). Accordingly, these
APMs should not be considered as alternatives to any performance measures prepared in accordance with
IFRS-EU. Many of these APMs are based on CaixaBank's internal estimates, assumptions, calculations, and
expectations of future results and there can be no guarantee that these results will actually be achieved.
Accordingly, investors are cautioned not to place undue reliance on these APMs.
Furthermore, these APMs, as used by CaixaBank, may not be comparable to other similarly titled measures
used by other companies. Investors should not consider such APMs in isolation, as alternatives to the
information calculated in accordance with IFRS-EU, as indications of operating performance or as measures
of CaixaBank's profitability or liquidity. Such APMs must be considered only in addition to, and not as a
substitute for or superior to, financial information prepared in accordance with IFRS-EU and investors are
advised to review these APMs in conjunction with the audited consolidated annual financial statements and
the unaudited quarterly business activity and results report incorporated by reference in this Prospectus.
The descriptions (including definitions, explanations and reconciliations) of all APMs are set out in section
"Alternative Performance Measures" of the Appendix entitled "Financial reporting glossary" to CaixaBank
Group Management Report for 2016 and CaixaBank Group Management Report for 2017 (as defined below),
in the "Alternative Performance Measures" section of the Appendix entitled "Glossary" to CaixaBank's Full
Year Report for 2017 (as defined below) and in the "Additional Alternative Performance Measures" section of
the Description of the Issuer of this Prospectus.
CaixaBank believes that the description of these management measures of performance in this Prospectus
follows and complies with the "European Securities and Markets Authority Guidelines on Alternative
Performance Measures (APM)" dated 5 October 2015 (the "Guidelines").

5

TABLE OF CONTENTS
Page
IMPORTANT NOTICES ................................................................................................................................... 2
OVERVIEW OF THE PREFERRED SECURITIES ......................................................................................... 7
RISK FACTORS .............................................................................................................................................. 12
DOCUMENTS INCORPORATED BY REFERENCE .................................................................................... 62
DESCRIPTION OF THE ISSUER .................................................................................................................. 64
DESCRIPTION OF SHARE CAPITAL ........................................................................................................ 102
CONDITIONS OF THE PREFERRED SECURITIES ................................................................................... 117
USE OF PROCEEDS ..................................................................................................................................... 158
TAXATION .................................................................................................................................................... 159
SUBSCRIPTION AND SALE ....................................................................................................................... 176
MARKET INFORMATION ........................................................................................................................... 178
ADDITIONAL INFORMATION ................................................................................................................... 184
SIGNATURES ............................................................................................................................................... 188

6

OVERVIEW OF THE PREFERRED SECURITIES
The following is an overview of certain information relating to the Preferred Securities, including the
principal provisions of the terms and conditions thereof. This overview must be read as an introduction to this
Prospectus and any decision to invest in the Preferred Securities should be based on a consideration of this
Prospectus as a whole, including the documents incorporated by reference. This overview is indicative only,
does not purport to be complete and is qualified in its entirety by the more detailed information appearing
elsewhere in this Prospectus. See, in particular, "Conditions of the Preferred Securities".
Words and expressions defined in the Conditions shall have the same meanings in this overview.
Issuer
CaixaBank, S.A.
Risk Factors
There are certain factors that may affect the Bank's ability to fulfil its
obligations under the Preferred Securities. These are set out under "Risk
Factors" above and include the Spanish economy and the global
macroeconomic environment and risks relating to increasingly onerous
capital requirements, the lack of availability of funding, volatility in
interest rates and increased competition. In addition, there are certain
factors which are material for the purpose of assessing the market risks
associated with the Preferred Securities which are described in detail under
"Risk Factors".
Issue size
1,250,000,000
Issue date
23 March 2018
Issue details
1,250,000,000 Perpetual Non-Cumulative Contingent Convertible
Additional Tier 1 Preferred Securities of 200,000 Liquidation Preference
each.

The Issuer has requested that the Preferred Securities qualify as Additional
Tier 1 Capital of the Bank and of the Group pursuant to Applicable
Banking Regulations.
Liquidation Preference
200,000 per Preferred Security.
Use of Proceeds
CaixaBank intends to use the net proceeds from the issue of the Preferred
Securities for its general corporate purposes.
Distributions
The Preferred Securities accrue Distributions as follows: (i) in respect of
the period from (and including) the Closing Date to (but excluding) the
First Reset Date at the rate of 5.25 per cent. per annum; and (ii) in respect
of each Reset Period, at the rate per annum equal to the aggregate of the
Initial Margin and the 5-year Mid-Swap Rate (quoted on an annual basis)
for such Reset Period, first calculated on an annual basis and then
converted to a quarterly rate in accordance with market convention
(rounded to four decimal places, with 0.00005 rounded down), all as
determined by the Bank on the relevant Reset Determination Date. Subject
as provided in Conditions 4.3 and 4.4 (see "Limitations on Distributions"
below), such Distributions will be payable quarterly in arrears on each
Distribution Payment Date.

For further information, see Condition 4.
Limitations on Distributions
The Bank may elect, in its sole and absolute discretion, to cancel the

7

payment of any Distribution (including any additional amounts pursuant to
Condition 12) in whole or in part at any time that it deems necessary or
desirable and for any reason. Without prejudice to the right of the Bank to
cancel the payments of any Distribution:

(a) Payments of Distributions (including any additional amounts
pursuant to Condition 12) in any financial year of the Bank shall be
made only to the extent the Bank has sufficient Distributable Items.
To the extent that the Bank has insufficient Distributable Items to
make Distributions (including any additional amounts pursuant to
Condition 12) on the Preferred Securities scheduled for payment in
the then current financial year and any interest payments,
distributions or other payments on own funds items that have been
paid or made or are scheduled or required to be paid out of or
conditional to sufficient Distributable Items in the then current
financial year, in each case excluding any portion of such payments
already accounted for in determining the Distributable Items of the
Bank or which are not required to be made conditional upon
Distributable Item, the Bank will only make partial or, as the case
may be, no payment of the relevant Distribution (including any
additional amounts pursuant to Condition 12) on the Preferred
Securities.

(b) If the Competent Authority, in accordance with Article 68 of Law
10/2014 and/or Article 16 of the SSM Regulation and/or with
Applicable Banking Regulations, requires the Bank to cancel a
relevant Distribution (including any additional amounts pursuant to
Condition 12) in whole or in part, the Bank will only make partial or,
as the case may be, no payment of the relevant Distribution
(including any additional amounts pursuant to Condition 12) on the
Preferred Securities.

(c) The Bank may make partial or, as the case may be, no payment of the
relevant Distribution (including any additional amounts pursuant to
Condition 12) on the Preferred Securities (whether by way of a
repayment of the Liquidation Preference, the payment of any
Distribution or otherwise) if and to the extent that payment of any
Distribution (including any additional amounts pursuant to Condition
12) would cause, when aggregated together with other distributions
of the kind referred to in Article 141(2) of the CRD IV Directive (or,
as the case may be, any provision of Spanish law transposing or
implementing CRD IV, which will include Article 48 of Law 10/2014
and any of its development provisions), the Maximum Distributable
Amount to be exceeded or otherwise would cause any other breach of
any regulatory restriction or prohibition on payments on Additional
Tier 1 Capital pursuant to Applicable Banking Regulations.

(d) If the Trigger Event occurs at any time on or after the Closing Date,
the Bank will not make any further Distribution (including any
additional amounts pursuant to Condition 12) on the Preferred
Securities and any accrued and unpaid Distributions up to a Trigger

8

Event (whether or not such distributions have become due for
payment) shall be automatically cancelled in accordance with
Condition 6.1(b).

For further information, see Condition 4.
Status of the Preferred
The Preferred Securities will constitute direct, unconditional, unsecured
Securities
and subordinated obligations of the Bank in accordance with Article 92.2º
of the Insolvency Law and, in accordance with Additional Provision 14.3º
of Law 11/2015, but subject to any other ranking that may apply as a result
of any mandatory provision of law (or otherwise).

For further information, see Condition 3.
Optional Redemption
All, and not only some, of the Preferred Securities may be redeemed at the
option of the Bank, subject to the prior consent of the Competent Authority
and otherwise in accordance with Applicable Banking Regulations, on any
Distribution Payment Date falling on or after the First Reset Date, at the
Redemption Price.

The Preferred Securities are also redeemable on or after the Closing Date
at the option of the Bank in whole but not in part, at any time, at the
Redemption Price if there is a Capital Event or a Tax Event.

Subject, in each case, to the prior consent of the Competent Authority and
otherwise in accordance with the Applicable Banking Regulations (as
defined in the Conditions) then in force.

For further information, see Condition 7.
Conversion
In the event of the occurrence of the Trigger Event, the Preferred
Securities are mandatorily and irrevocably convertible into newly issued
Ordinary Shares at the Conversion Price. A Trigger Event occurs if the
CET1 ratio of the Bank or the Group is less than 5.125 per cent.

For further information, see Condition 6.
Conversion price
If the Ordinary Shares of the Bank are (a) then admitted to trading on a
Relevant Stock Exchange, the Conversion Price will be the higher of: (i)
the Current Market Price of an Ordinary Share; (ii) the Floor Price; and
(iii) the nominal value of an Ordinary Share (being 1.00 on the Closing
Date), or (b) not then admitted to trading on a Relevant Stock Exchange,
the Conversion Price will be the higher of subparagraph (ii) or (iii) of
paragraph (a) above.

The Floor Price is subject to adjustment in accordance with Condition 6.3.
Liquidation Distribution
Subject as provided below, in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Bank, the Preferred Securities
(unless previously converted into Ordinary Shares pursuant to Condition
6) will confer an entitlement to receive out of the assets of the Bank
available for distribution to Holders, the Liquidation Distribution. Such
entitlement will arise before any distribution of assets is made to holders of
Ordinary Shares or any other instrument of the Bank ranking junior to the
Preferred Securities.
If, before such liquidation, dissolution or winding-up of the Bank

9

described above, the Trigger Event occurs but the relevant conversion of
the Preferred Securities into Ordinary Shares pursuant to Condition 6 is
still to take place, the entitlement conferred by the Preferred Securities for
the above purposes, will be an entitlement to receive out of the relevant
assets of the Bank a monetary amount equal to that which Holders would
have received on any distribution of the assets of the Bank if such
conversion had taken place immediately prior to such liquidation,
dissolution or winding-up.
Purchases
The Bank, or any member of the Group, may purchase or otherwise
acquire any of the outstanding Preferred Securities at any price in the open
market or otherwise in accordance with Applicable Banking Regulations in
force at the relevant time and subject to the prior consent of the Competent
Authority, if required.
Pre-emptive rights:
The Preferred Securities do not grant Holders preferential subscription
rights in respect of any possible future issues of shares, preferred securities
or any other securities to be carried out by the Bank or any of its
Subsidiaries.
Voting Rights
The Preferred Securities shall not confer any entitlement to receive notice
of or attend or vote at any meeting of the shareholders of the Bank.
Notwithstanding the above, the Conditions contain provisions for
convening meetings of Holders to consider matters affecting their interests
generally. The provisions governing the manner in which Holders may
attend and vote at a meeting of the holders of Preferred Securities must be
notified to Holders in accordance with Condition 13 and/or at the time of
service of any notice convening a meeting.

For further information, see Condition 11.
Withholding Tax and
All payments of Distributions and other amounts payable (excluding, for
Additional Amounts
the avoidance of doubt, repayment of principal) in respect of the Preferred
Securities by or on behalf of the Bank will be made free and clear of and
without withholding or deduction for or on account of any present or
future taxes, duties, assessments or governmental charges of whatever
nature unless such withholding or deduction is required by law. In the
event that any such withholding or deduction is imposed or levied by or on
behalf of the Kingdom of Spain or any political subdivision thereof or any
authority of agency therein or thereof having power to tax in respect of
payments of Distributions (but not any Liquidation Preference or other
amount), the Bank shall (to the extent such payment can be made on the
same basis as for payment of any Distribution in accordance with
Condition 4) pay such additional amounts as will result in Holders
receiving such amounts as they would have received in respect of such
Distribution had no such withholding or deduction been required.

For further information, see Condition 12.
Form
The Preferred Securities have been issued in uncertificated, dematerialised
book-entry form (anotaciones en cuenta) in euro in an aggregate nominal
amount of 1,250,000,000 and denominations of 200,000.
Registration, clearing and
The Preferred Securities have been registered with Iberclear as managing

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