Bond Lloyd's Banking plc 2.717% ( XS0156923913 ) in EUR

Lloyd's Banking plc

100 % ⇌

United Kingdom

XS0156923913 ( in EUR )

2.717% per year ( payment 4 times a year)

Perpetual

Prospectus brochure of the bond Lloyds Bank PLC XS0156923913 en EUR 2.717%, maturity Perpetual

25/05/2025 ( In 7 days )

Lloyds Banking Group plc is a major British multinational banking and financial services corporation headquartered in London, offering a wide range of retail, commercial, and corporate banking services.

The Bond issued by Lloyd's Banking plc ( United Kingdom ) , in EUR, with the ISIN code XS0156923913, pays a coupon of 2.717% per year.
The coupons are paid 4 times per year and the Bond maturity is Perpetual

Offering Circular
6.J.1
Lloyds TSB Bank plc
6.J.2
(incorporated with limited liability in England and Wales with registered number 2065)
6.I.4
3500,000,000
6.I.6
6.35 per cent. Step-up Perpetual Capital Securities
Issue price: 100 per cent.
The 1500,000,000 6.35 per cent. Step-up Perpetual Capital Securities (the "Capital Securities") of Lloyds TSB Bank plc
(the "Bank") will bear interest from (and including) 25 October 2002 at a rate of 6.35 per cent. per annum, payable
annually in arrear on 25 February in each year with the first interest payment due on 25 February 2003 in respect of
the period from (and including) 25 October 2002 to (but excluding) 25 February 2003 amounting to 121.40 per Capital
Security. From (and including) 25 February 2013, the Capital Securities will bear interest at a rate equal to 2.50 per cent.
per annum above the Euro-zone interbank offered rate for three month euro deposits, payable quarterly in arrear on
25 May, 25 August, 25 November and 25 February in each year commencing 25 May 2013, all as more particularly
described in "Terms and Conditions of the Capital Securities 5. Coupon Payments". Payments (not including principal)
may be deferred as described in "Terms and Conditions of the Capital Securities 4. Deferrals", but neither the Bank
nor Lloyds TSB Group plc (the "Parent") may declare, pay or distribute dividends on or redeem, purchase or otherwise
acquire any of its ordinary shares, preference shares or other types of Tier 1 securities whilst any payments are
deferred.
The Capital Securities are redeemable in whole, but not in part, at the option of the Bank on 25 February 2013 or on
any Coupon Payment Date (as defined herein) thereafter. In addition, the Capital Securities may be redeemed at the
option of the Bank in the event that the Bank is required to pay additional amounts as provided in "Terms and
Conditions of the Capital Securities 11. Taxation". Upon the occurrence of certain tax or regulatory events, the Capital
Securities may be exchanged or their terms varied so that they become Upper Tier 2 Securities (as defined in the Terms
and Conditions), provided that if such tax or regulatory events do or would persist after such exchange or variation or
certain other provisions apply, the Capital Securities may be redeemed, as more particularly described in "Terms and
Conditions of the Capital Securities 7. Exchange for Upper Tier 2 Securities, Variation, Redemption and Purchases".
Under existing Financial Services Authority ("FSA") requirements, the Bank may not redeem or purchase any Capital
Securities unless the Financial Services Authority has given its prior consent.
The Capital Securities will be unsecured securities of the Bank and will be subordinated to the claims of all creditors
in that no payment of principal or interest in respect of the Capital Securities shall be due and payable except to the
extent that the Bank could make such payment and still be solvent immediately thereafter.
In the event of the winding-up of the Bank, holders of the Capital Securities will, for the purpose only of calculating
the amounts payable by the Bank in respect of each Capital Security, be treated as if, on the day prior to the
commencement of the winding-up and thereafter, they were the holders of the most senior class or classes of
preference shares ranking pari passu with the holders of that class or classes of preference shares (if any) from time to
time issued by the Bank which have a preferential right to a return of assets in the winding-up over and so rank ahead
of the holders of all other classes of issued shares of the Bank. See "Terms and Conditions of the Capital Securities
6.I.1
3. Winding-up".
For a description of certain matters that prospective investors should consider, see "Investment
Considerations".
23.1(f)
Application has been made to the FSA in its capacity as competent authority (the "UK Listing Authority") under the
Financial Services and Markets Act 2000 (the "FSMA") for the Capital Securities to be admitted to the official list of the
UK Listing Authority (the "Official List") and to the London Stock Exchange plc (the "London Stock Exchange") for the
6.I.3
Capital Securities to be admitted to trading on the London Stock Exchange's market for listed securities. Admission to
the Official List together with admission to trading on the London Stock Exchange's market for listed securities constitute
official listing on a stock exchange. A copy of this Offering Circular, which comprises listing particulars approved by
the UK Listing Authority, has been delivered to the Registrar of Companies in England and Wales for registration as
required by Section 83 of the FSMA.
Joint Bookrunners and Lead Managers
Lehman Brothers
Schroder Salomon Smith Barney
(Structuring Adviser)
Dated: 22 October 2002

This Offering Circular comprises listing particulars given in compliance with the Listing Rules for the
purposes of giving information with regard to the Bank and the Capital Securities.
6.H.3
The Bank accepts responsibility for the information contained in this Offering Circular. To the best of the
knowledge and belief of the Bank (which has taken all reasonable care to ensure that such is the case) the
information contained in this Offering Circular is in accordance with the facts and does not omit anything
likely to affect the import of such information.
23.11(y)
Any reference in this Offering Circular to listing particulars means this Offering Circular excluding all
information incorporated by reference (if any). The Bank has confirmed that any information incorporated
by reference, including any such information to which readers of this Offering Circular are expressly referred,
has not been and does not need to be included in the listing particulars to satisfy the requirements of the
FSMA or the listing rules made under Section 74 of the FSMA by the UK Listing Authority. The Bank
believes that none of the information incorporated herein by reference conflicts in any material respect with
the information included in the listing particulars.
In connection with the issue and sale of the Capital Securities, no person is authorised to give any
information or to make any representation not contained in this Offering Circular and, if given or made,
such information or representation must not be relied upon as having been authorised by the Bank or the
Managers (as defined in "Subscription and Sale" below) or the Parent or the Trustee.
This Offering Circular is not intended to provide the basis of any credit or other evaluation and should not
be considered as a recommendation by the Bank or the Managers that any recipient of this Offering Circular
should purchase any of the Capital Securities. Each investor contemplating purchasing Capital Securities
should make its own independent investigation of the financial condition and affairs, and its own appraisal of
the creditworthiness, of the Bank, the Bank and its subsidiaries as a whole (the "Lloyds TSB Bank Group"),
6.J.11)
the Parent and the Lloyds TSB group of companies (which includes the Bank as wholly owned subsidiary of
the Parent) (the "Lloyds TSB Group" or the "Group").
The distribution of this Offering Circular and the offering or sale of the Capital Securities in certain
jurisdictions may be restricted by law. The Bank and the Managers do not represent that this Offering
Circular may be lawfully distributed, or that the Capital Securities may be lawfully offered, in compliance
with any applicable registration or other requirements in any such jurisdiction, or pursuant to an exemption
available thereunder, or assume any responsibility for facilitating any such distribution or offering. In
particular no action has been taken by the Bank or the Managers which would permit a public offering of
the Capital Securities or distribution of this Offering Circular in any jurisdiction where action for that
purpose is required. Accordingly, no Capital Securities may be offered or sold, directly or indirectly, and
neither this Offering Circular nor any advertisement or other offering material may be distributed or
published in any jurisdiction, except under circumstances that will result in compliance with any applicable
laws and regulations. Persons into whose possession this Offering Circular or the Capital Securities may
come must inform themselves about, and observe, any such restrictions. See "Subscription and Sale" below
for a description, inter alia, of certain restrictions on offers, sales and deliveries of the Capital Securities in
the United States or to U.S. persons. Neither the delivery of this Offering Circular nor any sale hereunder
shall create, under any circumstances, any implication that there has been no change in the affairs of the
Bank since the date hereof or that the information contained herein is correct as of any time subsequent to
its date.
The Capital Securities have not been, and will not be, registered under the United States Securities Act of
1933, as amended, and comprise securities in bearer form that are subject to United States tax law
requirements. Subject to certain exceptions, the Capital Securities may not be sold or delivered, directly or
indirectly, within the United States or to U.S. persons.
In this Offering Circular, all references to "£" and "Sterling" refer to pounds sterling and to "euro" and "2"
refer to the lawful currency of the member states of the European Union that have adopted the single
currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on
European Union and the Treaty of Amsterdam.
Schroder is a trademark of Schroders Holdings plc and is used under licence by Salomon Brothers
International Limited.
2

TABLE OF CONTENTS
Page
SUMMARY .........................................................................................................................................................................................
4
INVESTMENT CONSIDERATIONS ..............................................................................................................................
8
TERMS AND CONDITIONS OF THE CAPITAL SECURITIES ............................................................
10
SUMMARY OF PROVISIONS RELATING TO THE CAPITAL SECURITIES WHILE
IN GLOBAL FORM .....................................................................................................................................................................
30
USE OF PROCEEDS ...................................................................................................................................................................
32
LLOYDS TSB .....................................................................................................................................................................................
33
CAPITALISATION OF LLOYDS TSB BANK PLC .............................................................................................
38
TAXATION .........................................................................................................................................................................................
41
SUBSCRIPTION AND SALE ...............................................................................................................................................
42
GENERAL INFORMATION ................................................................................................................................................
43
6.I.5(b)(i)
In connection with this issue, Salomon Brothers International Limited, or any person acting for it, may
over-allot or effect transactions with a view to supporting the market price of the Capital Securities at a
level higher than that which might otherwise prevail for a limited period. However, there may be no
obligation on Salomon Brothers International Limited or any agent of it to do this. Such stabilising, if
commenced, may be discontinued at any time, and must be brought to an end after a limited period.
3

SUMMARY
The following summary refers to certain provisions of the Terms and Conditions of the Capital Securities
and the Trust Deed and insofar as it refers to the Terms and Conditions of the Capital Securities is qualified
by the more detailed information contained elsewhere in this Offering Circular. Defined terms used herein
have the meanings given to them in "Terms and Conditions of the Capital Securities".
Bank
Lloyds TSB Bank plc.
Parent
Lloyds TSB Group plc.
Trustee
The Law Debenture Trust Corporation (Channel Islands) Limited.
6.I.23(a)
Issue Size
1500,000,000 (denomination of 11,000).
Redemption and Purchases
The Capital Securities are perpetual securities and have no maturity
date. However, the Capital Securities may be redeemed in whole, but
not in part, at the option of the Bank, subject to the prior consent of
the Financial Services Authority, at their principal amount together
with any Outstanding Payments on the Coupon Payment Date falling
on 25 February 2013 or on any Coupon Payment Date thereafter.
The Bank, the Parent and any other Subsidiary of the Parent may,
subject to the prior consent of the Financial Services Authority,
purchase the Capital Securities in any manner and at any price, together
with all unmatured Coupons and Talons appertaining thereto.
Interest
The Capital Securities bear interest at a rate of 6.35 per cent. per annum
from (and including) 25 October 2002 to (but excluding) 25 February
2013 and thereafter at a rate equal to three month EURIBOR plus
2.50 per cent. per annum, reset quarterly.
Coupon Payment Dates
Subject as described below, Coupon Payments will be payable on
25 February in each year from (and including) 25 February 2003 (in
respect of the period from (and including) 25 October 2002 to (but
excluding) 25 February 2003) to (and including) 25 February 2013, and
thereafter, subject to adjustment for non-business days, on 25 May,
25 August, 25 November and 25 February in each year commencing
25 May 2013. The first Coupon Payment due on 25 February 2003 shall
amount to 121.40 per Capital Security.
Subordination
The Capital Securities constitute direct, unsecured and subordinated
securities of the Bank. The rights and claims of the Holders and the
Couponholders under the Capital Securities are subordinated to the
claims of creditors of the Bank:
!
who are depositors or other unsubordinated creditors of the
Bank; or
!
whose claims are, or are expressed to be, subordinated (whether
only in the event of the winding-up of the Bank or otherwise) to
the claims of depositors and other unsubordinated creditors of
the Bank but not further or otherwise; or
!
whose claims are in respect of Junior Subordinated Debt (eg.
undated subordinated bonds) of the Bank; or
!
who are subordinated creditors of the Bank other than those
whose claims rank, or are expressed to rank, pari passu with, or
junior to, the claims of the Holders.
No payment in respect of the Capital Securities shall be due and
payable except to the extent that the Bank is solvent and could make
such payment and still be solvent immediately thereafter.
Winding-up Claims
In the event of the winding-up of the Bank, the Holders will, for the
purpose only of calculating the amounts payable by the Bank in respect
of each Capital Security, be treated as if, save as mentioned below, on
4

the day prior to the commencement of the winding-up and thereafter,
they were the holders of the most senior class or classes of preference
shares (if any) of the Bank in issue and in priority to all other classes of
issued shares of the Bank. Such class would rank junior to the claims of
Senior Creditors and junior to any notional class of preference shares in
the capital of the Bank by reference to which the amount payable in
respect of any Junior Subordinated Debt in the winding-up of the Bank
is determined.
Exceptional Deferral of
If the Bank determines, on the 20th Business Day prior to the date on
payments
which any Payment (which term does not include principal) would, in
the absence of deferral in accordance with Condition 4, be due and
payable that it is, or payment of the relevant Payment will result in the
Bank being, in non-compliance with applicable Capital Regulations, the
Bank may defer such Payment.
Such exceptionally deferred payment may be satisfied at any time
(provided that at the time of satisfying such payment, the Bank is in
compliance with applicable Capital Regulations) by the Bank giving not
less than 16 Business Days notice of such satisfaction. Unless the Bank
elects to defer such Payment pursuant to its general right to defer
referred to below, such exceptionally deferred payment must be satisfied
on the Coupon Payment Date next following the 19th Business Day
after the Bank determines that it no longer is, and such Payment will
not result in it being, in non-compliance with such applicable Capital
Regulations.
No interest will accrue on an Exceptionally Deferred Coupon Payment.
General Deferral of Payments
The Bank may elect to defer any Payment (which term does not include
principal) on the Capital Securities for any period of time. However, the
deferred payment will bear interest at 2 per cent. per annum above the
rate calculated in accordance with Condition 5(b) for such period
of time.
Dividend and Capital Restriction If the Bank defers a Payment for any reason as described above then,
during Period of Deferral
while any Payment is so deferred, no payments will be permitted on
(and no purchases or redemptions will be permitted of) the ordinary
share capital or directly or indirectly issued preference or preferred
securities or other issued Tier 1 securities of the Bank or the Parent.
Alternative Coupon Satisfaction Investors will always receive payments made in respect of Capital
Mechanism
Securities in cash. However, if the Bank defers a Coupon Payment, then
any such Deferred Coupon Payment must be satisfied by the Bank by
the issue of its ordinary shares. In that event, the Parent will issue its
ordinary shares to the Trustee or its agent in exchange for the ordinary
shares so issued by the Bank. When sold, the Parent's shares will
provide a cash amount which, when converted into euro, the Principal
Paying Agent on behalf of the Trustee, will pay to the Holders in
respect of the relevant Payment. The Calculation Agent will calculate in
advance the number of ordinary shares of the Bank or the Parent to be
issued in order to enable the Trustee or its agent to raise the full amount
of money due on the relevant payment date to Holders.
Insufficiency
Each of the Bank and the Parent is required to keep available for issue
enough ordinary shares as it reasonably considers would be required to
satisfy from time to time the next year's Coupon Payment or Payments
(including any Deferred Coupon Payments) using the alternative coupon
satisfaction mechanism.
Market Disruption Event
If, in the opinion of the Bank, a Market Disruption Event in respect of
the Parent's shares exists on or after the 15th Business Day preceding
any date upon which the Bank is due to satisfy a payment using the
alternative coupon satisfaction mechanism, the payment to Holders may
be deferred until the Market Disruption Event no longer exists.
5

Suspension
If, following any take-over offer or any reorganisation, restructuring or
scheme of arrangement, the Parent or any subsequent New Owner
ceases to be the ultimate holding company of the Lloyds TSB group of
companies, the Bank shall give notice thereof and any changes to the
documentation relating to the Capital Securities determined by an
independent investment bank to be appropriate in order to preserve
substantially the economic effect for the Holders of a holding of the
Capital Securities prior to the Suspension will be made by the Bank and
the Trustee. Pending such changes the Bank will be unable to satisfy
Payments using the alternative coupon satisfaction mechanism. If the
investment bank is unable to determine appropriate amendments, as
notified to the Bank and the Trustee, the Capital Securities will (subject
to the prior consent of the FSA) be redeemed at the Suspension
Redemption Price, together with any Outstanding Payments, not later
than the 60th Business Day following the giving of such notice by the
Bank to the Holders.
Additional Amounts
The Bank will pay additional amounts to Holders of the Capital
Securities to gross up Payments upon the imposition of UK withholding
tax, subject to customary exceptions.
Exchange, Variation or
The Bank may, subject to the prior consent of the FSA, redeem all, but
Redemption for Taxation
not some only, of the Capital Securities at their principal amount
Reasons
together with any Outstanding Payments in the event that for reasons
outside its control it is required to pay additional amounts in respect of
United Kingdom withholding taxation as provided in Condition 11 of
the Terms and Conditions of the Capital Securities, subject to
Condition 2. Upon the occurrence of certain other changes in the
treatment of the Capital Securities for taxation purposes, which changes
affect payments of interest falling due on or prior to 25 February 2013
the Bank may, subject to the prior consent of the FSA, exchange the
Capital Securities for, or vary the terms of the Capital Securities so that
they become, Upper Tier 2 Securities or, if such change in tax treatment
also affects or would affect the Upper Tier 2 Securities and subject to
Condition 2, redeem all, but not some only, of the Capital Securities at
their principal amount together with any Outstanding Payments.
Exchange, Variation or
The Capital Securities will qualify as Tier 1 Capital for the purposes of
Redemption for Regulatory
the FSA's capital adequacy regulations. If at any time the FSA has
Reasons
determined that securities of the nature of the Capital Securities cease
to qualify as Tier 1 Capital, the Bank may, subject to the prior consent
of the FSA, exchange the Capital Securities for, or vary the terms of the
Capital Securities so that they become, Upper Tier 2 Securities or, if
such exchange or varied securities do not or would not qualify as Upper
Tier 2 Capital or certain other provisions apply, and subject to
Condition 2, redeem all, but not some only, of the Capital Securities at
their principal amount together with any Outstanding Payments.
Remedy for Non-Payment
The sole remedy against the Bank available to the Trustee or any Holder
6.I.16
of Capital Securities for recovery of amounts owing in respect of the
Capital Securities will be the institution of proceedings for the
winding-up of the Bank and/or proving in such winding-up.
Form
Bearer. The Capital Securities will be represented initially by the
Temporary Global Capital Security, which will be deposited outside the
United States with a Common Depositary for Euroclear Bank S.A./N.V.
as operator of the Euroclear System ("Euroclear") and Clearstream
Banking, société anonyme ("Clearstream, Luxembourg") on or about
25 October 2002. Interests in the Temporary Global Capital Security
will be exchangeable for interests in the Permanent Global Capital
Security on or after a date which is expected to be 4 December 2002
upon certification as to non-US beneficial ownership as required by
6

US Treasury regulations and as described in the Temporary Global
Capital Security. Capital Securities in definitive bearer form with
coupons and a talon attached on issue will be issued in exchange for
interests in the Permanent Global Capital Security (a) upon
non-payment of sums when due as set out in Condition 10, (b) at any
time at the option of the Bank, or (c) in other limited circumstances.
Listing
Application has been made to admit the Capital Securities to the
Official List of the UK Listing Authority and to trading on the London
Stock Exchange.
Rating
The Capital Securities are expected to be assigned, on issue, a rating of
`A+' by Standard & Poor's Rating Services, a division of the
McGraw-Hill Companies, Inc., a rating of `Aa2' by Moody's Investors
Service, Inc and a rating of `AA' by Fitch Ratings Ltd. 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 relevant rating
organisation.
Governing Law
English.
7

INVESTMENT CONSIDERATIONS
The following is a summary of certain aspects of the Capital Securities of which prospective investors should
be aware. This summary is not intended to be exhaustive and prospective investors should carefully consider
this summary in conjunction with the other information contained in this document.
Deferral
The Bank may elect to defer any Payment (such term does not include principal) on the Capital
Securities for any period of time, as more particularly described in "Terms and Conditions of the Capital
Securities 4. Deferrals". Any such deferred payment will, unless it is an exceptional deferral as
described under "Terms and Conditions of the Capital Securities 4. Deferrals (a) Exceptional
Deferral of Payments", bear interest determined in accordance with Condition 5 plus 2 per cent. During
the period of such deferral, the Bank and the Parent will be prohibited from making or allowing
payments on or redeeming, purchasing or otherwise acquiring, its ordinary share capital or directly or
indirectly issued preference or preferred securities or other issued Tier 1 securities.
Perpetual securities
The Bank is under no obligation to redeem the Capital Securities at any time (save in the particular
circumstances referred to in "Terms and Conditions of the Capital Securities 8. Payments
(d) Suspension") and the Holders have no right to call for their redemption.
Redemption and Exchange risk
The Capital Securities may, subject to the prior consent of the FSA, be redeemed in whole, but not in
part, at their principal amount together with accrued Outstanding Payments at the option of the Bank in
the event that it is required to pay additional amounts as provided in "Terms and Conditions of the
Capital Securities 11. Taxation". In addition, upon the occurrence of certain specified tax and
regulatory events, the Capital Securities may be exchanged or their terms varied so that they become
Upper Tier 2 Securities (bearing interest at a rate of 0.25 per cent. per annum below the Coupon Rate
on the Capital Securities, subject to any step up applicable to the coupon rate of such Upper Tier 2
Securities), or, if that or any other such specified tax or regulatory event or any such requirement to pay
additional amounts applies or would apply to the Upper Tier 2 Securities, the Capital Securities may,
subject to the consent of the FSA, be redeemed at their outstanding principal amount together with any
Outstanding Payments all as more particularly described in "Terms and Conditions of the Capital
Securities 7. Exchange for Upper Tier 2 Securities, Variation or Redemption".
No limitation on issuing debt
Save as provided in "Terms and Conditions of the Capital Securities 2. Status (b)(iii) Senior Tier 1
Securities", there is no restriction on the amount of debt which the Bank may issue which ranks senior
to the Capital Securities or on the amount of securities which the Bank may issue which ranks pari passu
with the Capital Securities. The issue of any such debt or securities may reduce the amount recoverable
by Holders on a winding-up of the Bank or may increase the likelihood of a deferral of Payments under
the Capital Securities.
Availability of shares
If the Bank is to make a payment using the alternative coupon satisfaction mechanism and insufficient
ordinary shares in the Bank or the Parent are available, then the Bank's payment obligation shall be
suspended to the extent of such insufficiency and, except in the case of Exceptionally Deferred Coupon
Payments, shall bear interest at 2 per cent. per annum above the rate applicable to the Capital Securities,
until such time as sufficient shares are available to satisfy all or part of the suspended payment
obligation, as more particularly described in "Terms and Conditions of the Capital Securities
6. Alternative Coupon Satisfaction Mechanism (d) Insufficiency".
Market Disruption Event
If, following a decision by the Bank to satisfy a payment using the alternative coupon satisfaction
mechanism, in the opinion of the Bank a Market Disruption Event in respect of the Parent's ordinary
shares exists, the payment to Holders may be deferred until the cessation of such market disruption, as
more particularly described in "Terms and Conditions of the Capital Securities 6. Alternative Coupon
Satisfaction Mechanism (e) Market Disruption". Any such deferred payments shall bear interest at the
rate applicable to the Capital Securities if the Market Disruption Event continues for 14 days or more.
8

Restricted remedy for non-payment
In accordance with the FSA's requirements for subordinated capital, the sole remedy against the Bank
available to the Trustee or any Holder for recovery of amounts owing in respect of any Payment or
principal in respect of the Capital Securities will be the institution of proceedings for the winding-up of
the Bank and/or proving in such winding-up.
Set-off
Subject to applicable law, no Holder or Couponholder may exercise or claim any right of set-off in
respect of any amount owed to it by the Bank arising under or in connection with the Capital Securities
or the Coupons and each Holder and Couponholder shall, by virtue of being the bearer of any Capital
Security or Coupon, be deemed to have waived all such rights of set-off.
Absence of prior public markets
The Capital Securities constitute a new issue of securities by the Bank. Prior to this issue, there will have
been no public market for the Capital Securities. Although application has been made to the UK Listing
Authority under the FSMA for the Capital Securities to be admitted to the Official List and to the
London Stock Exchange for the Capital Securities to be admitted to trading on the London Stock
Exchange's market for listed securities, there can be no assurance that an active public market for the
Capital Securities will develop and, if such a market were to develop, the Managers are under no
obligation to maintain such a market. The liquidity and the market prices for the Capital Securities can
be expected to vary with changes in market and economic conditions, the financial condition and
prospects of the Bank and other factors that generally influence the market prices of securities.
9

TERMS AND CONDITIONS OF THE CAPITAL SECURITIES
The following, subject to alteration, are the terms and conditions of the Capital Securities which will be
endorsed on each Capital Security in definitive form (if issued).
The Capital Securities are constituted by the Trust Deed. The issue of the Capital Securities was
authorised pursuant to resolutions of the Chairman's Committee of the Board of Directors of the Bank
passed on 17 October 2002. The statements in these Terms and Conditions include summaries of, and are
subject to, the detailed provisions of the Trust Deed. Copies of the Trust Deed, the Agency Agreement
and the Calculation Agency Agreement are available for inspection during normal business hours by the
Holders and the Couponholders at the registered office of the Trustee, being at 22 October 2002 at
Whiteley Chambers, Don Street, St Helier, Jersey, JE4 9WG, Channel Islands, and at the specified office
of each of the Paying Agents. The Holders and the Couponholders are entitled to the benefit of, are
bound by, and are deemed to have notice of, all the provisions of the Trust Deed, the Agency Agreement
and the Calculation Agency Agreement applicable to them.
1.
Form, Denomination and Title
(a)
Form and Denomination
6.I.5(a)
The Capital Securities are serially numbered and in bearer form each in the denomination of
6.I.26
11,000, with Coupons and one Talon attached on issue.
(b)
Title
6.I.27
Title to the Capital Securities, Coupons and Talons shall pass by delivery. Except as ordered by a
court of competent jurisdiction or as required by law, the bearer of any Capital Security and the
bearer of any Coupon or Talon shall be deemed to be, and may be treated as, its absolute owner
for all purposes whether or not it is overdue and regardless of any notice of ownership, trust or an
interest in it, any writing on it or its theft or loss and no person shall be liable for so treating the
bearer.
2.
Status
6.I.24
(a)
Status and Subordination of the Capital Securities
The Capital Securities constitute direct, unsecured, subordinated securities of the Bank and rank
pari passu without any preference among themselves.
(b)
(i)
Condition of Payment by the Bank: The rights and claims of the Holders and the
Couponholders under the Capital Securities are subordinated to the claims of Senior
Creditors, in that payments in respect of the Capital Securities (and the issue of Bank
Shares in accordance with Condition 6) are conditional upon the Bank being solvent at the
time of payment (or at the time of issue of such Bank Shares) by the Bank and in that no
principal or Payments shall be due and payable in respect of the Capital Securities
(including the issue of Bank Shares in accordance with Condition 6) except to the extent
that the Bank could make such payment (or make such issue of Bank Shares) and still be
solvent immediately thereafter.
For the purposes of these Terms and Conditions, the Bank shall be solvent if (a) it is able
to pay its debts to Senior Creditors as they fall due and (b) its Assets exceed its Liabilities
(other than its Liabilities to persons who are not Senior Creditors). For the purposes of this
Condition 2(b)(i) any reference to a payment by the Bank in respect of a Capital Security
shall be deemed to include a purchase of such Capital Security by the Bank.
(ii)
Winding-Up Claims of the Bank: Amounts in respect of principal or Payments in respect of
which the conditions referred to in Condition 2(b)(i) are not satisfied on the date upon which
the same would otherwise be due and payable ("Winding-Up Claims") will be payable by the
Bank in a winding-up of the Bank as provided in Condition 3 and on any redemption
pursuant to Condition 7(b), 7(c), 7(d) or 8(d). A Winding-Up Claim shall not bear interest.
(iii)
Senior Tier 1 Securities: So long as any of the Capital Securities remains outstanding (as defind
in the Trust Deed), the Bank will not issue any preference shares or other securities (regardless
of name or designation) or create any guarantee of, or provide any contractual support
arrangement in respect of, the obligations of the Parent or any other entity which in each case
constitutes (whether on a solo, or a solo-consolidated or a consolidated basis) issued Tier 1
10