Bond Mercantil Norte Banco 4.375% ( USP14008AA79 ) in USD

Mercantil Norte Banco

100 % ▼

Mexico

USP14008AA79 ( in USD )

4.375% per year ( payment 2 times a year)

19/07/2015 - Bond has expired

Prospectus brochure of the bond Banco Mercantil del Norte (Banorte) USP14008AA79 in USD 4.375%, expired

100 000 USD

300 000 000 USD

P14008AA7

Banco Mercantil del Norte (Banorte) is a major Mexican financial institution offering a wide range of banking and financial services, including commercial banking, wealth management, and brokerage services.

This financial instrument, an obligation identified by ISIN USP14008AA79 (CUSIP P14008AA7), was issued by Banco Mercantil del Norte (Banorte), a significant Mexican financial institution, and has since reached its full maturity and redemption. Originated from Mexico, this USD-denominated bond carried a fixed interest rate of 4.375% and represented a total issuance of $300,000,000, with a minimum purchase size of $100,000. Paying interest semi-annually, the bond matured on July 19, 2015, and was subsequently repaid at its 100% principal value, concluding its lifecycle as a fully discharged financial obligation.

OFFERING CIRCULAR

U.S.$300,000,000
Banco Mercantil del Norte, S.A.
acting through its Grand Cayman Branch
4.375% Senior Notes Due 2015

We are selling U.S.$300,000,000 aggregate principal amount of 4.375% Senior Notes due 2015 (the "Notes"). The
Notes will mature on July 19, 2015. We will pay interest on the Notes on January 19 and July 19 of each year, beginning on
January 19, 2011. Payments of interest made by our Grand Cayman Branch are not subject to Mexican or Cayman Islands
withholding tax. However, if any such withholding tax would apply, we will pay additional amounts so that the net amount
received by holders of the Notes after Mexican or Cayman Islands withholding tax, if imposed, will equal the amount that
would have been received if no withholding tax had been applicable, subject to some exceptions described in this offering
circular. The Notes will be our senior unsecured obligations and will rank equally in right of payment with all of our other
senior unsecured indebtedness, except for obligations that are preferred by statute. The Notes will be structurally
subordinated to the existing and future obligations of our subsidiaries, including trade payables. In the event of certain
changes in the Mexican or Cayman Islands laws affecting the withholding tax applicable to payments under the Notes, we
may redeem the Notes before their stated maturity at a price equal to 100% of their principal amount plus accrued interest to
the redemption date.

Application has been made to list the Notes on the Official List of the Luxembourg Stock Exchange and to trading on
the Euro MTF market.
This Offering Circular constitutes a Prospectus according to Luxembourg law dated July 10th, 2005 on Prospectuses
for Securities.

Investing in the Notes involves risks. See "Risk Factors" beginning on page 10.
The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the
"Securities Act"). The Notes may not be offered or sold within the United States or to U.S. persons, except to qualified
institutional buyers in reliance on the exemption from registration provided by Rule 144A under the Securities Act and to certain
non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act. You are hereby notified that
sellers of the Notes may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by
Rule 144A.

THE INFORMATION CONTAINED IN THIS OFFERING CIRCULAR IS EXCLUSIVELY OUR
RESPONSIBILITY AND HAS NOT BEEN REVIEWED OR AUTHORIZED BY THE MEXICAN BANKING AND
SECURITIES COMMISSION (COMISIÓN NACIONAL BANCARIA Y DE VALORES, OR THE "CNBV"). THE
NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE MEXICAN NATIONAL SECURITIES
REGISTRY (REGISTRO NACIONAL DE VALORES) MAINTAINED BY THE CNBV AND THEREFORE THE
NOTES MAY NOT BE PUBLICLY OFFERED OR SOLD NOR BE THE SUBJECT OF BROKERAGE ACTIVITIES
IN MEXICO, EXCEPT THAT THE NOTES MAY BE OFFERED IN MEXICO TO INSTITUTIONAL AND
QUALIFIED INVESTORS PURSUANT TO THE PRIVATE PLACEMENT EXEMPTION SET FORTH IN
ARTICLE 8 OF THE MEXICAN SECURITIES MARKET LAW (LEY DEL MERCADO DE VALORES). AS
REQUIRED UNDER THE MEXICAN SECURITIES MARKET LAW, WE WILL NOTIFY THE CNBV OF THE
OFFERING OF THE NOTES OUTSIDE OF MEXICO. SUCH NOTICE WILL BE SUBMITTED TO THE CNBV TO
COMPLY WITH A LEGAL REQUIREMENT AND FOR INFORMATION PURPOSES ONLY, AND THE
DELIVERY OF SUCH NOTICE TO, AND THE RECEIPT OF SUCH NOTICE BY, THE CNBV DOES NOT IMPLY
ANY CERTIFICATION AS TO THE INVESTMENT QUALITY OF THE NOTES, OUR SOLVENCY, LIQUIDITY
OR CREDIT QUALITY OR THE ACCURACY OR COMPLETENESS OF THE INFORMATION SET FORTH
HEREIN. THIS OFFERING CIRCULAR MAY NOT BE PUBLICLY DISTRIBUTED IN MEXICO. THE
ACQUISITION OF THE NOTES BY AN INVESTOR WHO IS A MEXICAN RESIDENT WILL BE MADE UNDER
ITS OWN RESPONSIBILITY.

Price: 99.725%

Delivery of the Notes was made in book-entry form through the Depository Trust Company on July 19, 2010.
Sole Book-Running Manager
J.P. Morgan
August 3, 2010.

Table of Contents
Page Page
AVAILABLE INFORMATION ............................................... iv
BANORTE CAYMAN ......................................................... 96
ENFORCEMENT OF JUDGMENTS ......................................... v
RISK MANAGEMENT........................................................ 98
CAUTIONARY STATEMENT REGARDING
MANAGEMENT .............................................................. 105
FORWARD-LOOKING STATEMENTS ........................... v
RELATED PARTY TRANSACTIONS.................................. 108
PRESENTATION OF CERTAIN FINANCIAL AND OTHER
PRINCIPAL SHAREHOLDERS........................................... 109
INFORMATION ......................................................... vii
THE MEXICAN FINANCIAL SYSTEM............................... 110
SUMMARY ......................................................................... 1
SUPERVISION AND REGULATION ................................... 114
THE OFFERING................................................................... 8
DESCRIPTION OF THE NOTES ......................................... 130
RISK FACTORS................................................................. 10
PLAN OF DISTRIBUTION................................................. 141
USE OF PROCEEDS ........................................................... 22
TRANSFER RESTRICTIONS.............................................. 144
EXCHANGE RATES AND CURRENCY ................................ 23
TAXATION ..................................................................... 147
CAPITALIZATION ............................................................. 24
CERTAIN ERISA CONSIDERATIONS............................... 151
SELECTED CONSOLIDATED FINANCIAL INFORMATION .... 25
LEGAL MATTERS........................................................... 153
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
INDEPENDENT AUDITOR ................................................ 153
FINANCIAL CONDITION AND RESULTS OF
GENERAL INFORMATION ............................................... 154
OPERATIONS ........................................................... 28
SIGNIFICANT DIFFERENCES BETWEEN MEXICAN
SELECTED STATISTICAL INFORMATION ........................... 53
BANKING GAAP AND U.S. GAAP........................ 155
BUSINESS OF BANORTE ................................................... 80
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS......F-1

You should rely only on the information contained in this offering circular or to which we have referred you.
We have not, and the initial purchaser has not, authorized anyone to provide you with information that is different. This
document may only be used where it is legal to sell these securities. The information in this document may only be
accurate on the date of this document.

Unless otherwise specified or the context otherwise requires, references in this offering circular to "the Bank,"
"Banorte," "we," "us" and "our" are references to Banco Mercantil del Norte, S.A., Institución de Banca Múltiple, Grupo
Financiero Banorte and its subsidiaries. References to "Banorte Cayman" are to the Grand Cayman Branch of Banco Mercantil
del Norte, S.A., Institución de Banca Múltiple, Grupo Financiero Banorte. References to "the issuer" are to Banco Mercantil del
Norte, S.A., Institución de Banca Múltiple, Grupo Financiero Banorte, acting through its Grand Cayman Branch.

In connection with the issue of the Notes, J.P. Morgan Securities Inc. (the "Stabilizing Manager") (or persons
acting on behalf of the Stabilizing Manager) may over-allot Notes or effect transactions with a view to supporting the
market price of the Notes at a level higher than that which might otherwise prevail. However, there is no assurance that
the Stabilizing Manager (or persons acting on behalf of the Stabilizing Manager) will undertake stabilization action.
Any stabilization action may begin on or after the date on which adequate public disclosure of the final terms of the offer
of the Notes is made and, if begun, may be ended at any time. Any stabilization action or over-allotment must be
conducted by the Stabilizing Manager (or persons acting on behalf of the Stabilizing Manager) in accordance with all
applicable laws and rules.

We, having made all reasonable inquiries, confirm that this offering circular contains all information with regard to us,
our subsidiaries and the Notes that is material in the context of the issue and offering of the Notes, that the information contained
in this offering circular is true and accurate and is not misleading as of the date of this offering circular, that the opinions and
intentions expressed herein are honestly held and that there are no other facts, the omission of which would make this offering
circular or any of such information or the expression of any such opinions or intentions materially misleading. We accept
responsibility for the information contained in this offering circular.

We are relying upon an exemption from registration under the Securities Act for offers and sales of securities that do
not involve a public offering. By purchasing the Notes, you will be deemed to have made the acknowledgements,
representations and agreements described under "Transfer Restrictions" in this offering circular. We are not, and the initial
i

purchaser is not, making an offer to sell the Notes in any jurisdiction except where such an offer or sale is permitted. You
should understand that you will be required to bear the financial risks of your investment for an indefinite period of time.

Neither the CNBV nor the U.S. Securities and Exchange Commission (the "SEC") nor any state or foreign securities
commission has approved or disapproved of the Notes or determined if this offering circular is truthful or complete. Any
representation to the contrary is a criminal offense.

We have submitted this offering circular solely to a limited number of qualified institutional buyers in the United States
and to investors outside the United States so that they can consider a purchase of the Notes. This offering circular has been
prepared solely for use in connection with the placement of the Notes and for the listing of the Notes on the Official List of the
Luxembourg Stock Exchange and to trading of the Notes on the Euro MTF market. We have not authorized the use of this
offering circular for any other purpose. This offering circular may be distributed and its contents disclosed only to those
prospective investors to whom it is provided. By accepting delivery of this offering circular, you agree to these restrictions. See
"Transfer Restrictions."

This offering circular is based on information provided by us and by other sources that we believe are reliable, but no
assurance can be given by the initial purchaser as to the accuracy or completeness of such information. The initial purchaser
assumes no responsibility for the accuracy or completeness of the information contained herein (financial, legal or otherwise).
In making an investment decision, prospective investors must rely on their own examinations of us and the terms of this offering
and the Notes, including the substantial risks involved. Moreover, the contents of this offering circular are not to be construed as
legal, business or tax advice. You are urged to consult your own attorney, business or tax advisor for legal, business or tax
advice.

This offering circular does not constitute an offer of, or an invitation by or on behalf of, us or the initial purchaser or
any of our or its respective directors, officers and affiliates to subscribe for or purchase any securities in any jurisdiction to any
person to whom it is unlawful to make such an offer in such jurisdiction. Each purchaser of the Notes must comply with all
applicable laws and regulations in force in each jurisdiction in which it purchases, offers or sells such Notes or possesses or
distributes this offering circular and must obtain any consent, approval or permission required by it for the purchase, offer or sale
by it of such Notes under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes such
purchases, offers or sales.

Notwithstanding anything in this document to the contrary, you (and each of your employees, representatives or other
agents) may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax treatment and tax
structure of the offering of Notes and all materials of any kind (including opinions or other tax analyses) that are provided to you
relating to such tax treatment and tax structure. For these purposes, "tax structure" is limited to facts relevant to the U.S. federal
income tax treatment of the offering of Notes.

THE NOTES HAVE NOT BEEN NOR WILL OTHERWISE BE REGISTERED WITH THE MEXICAN
NATIONAL SECURITIES REGISTRY MAINTAINED BY THE CNBV AND, THEREFORE, THE NOTES MAY
NOT BE PUBLICLY OFFERED OR SOLD NOR BE THE SUBJECT OF BROKERAGE ACTIVITIES IN MEXICO,
EXCEPT THAT THE NOTES MAY BE OFFERED IN MEXICO TO INSTITUTIONAL AND QUALIFIED
INVESTORS PURSUANT TO THE PRIVATE PLACEMENT EXEMPTION SET FORTH IN ARTICLE 8 OF THE
MEXICAN SECURITIES MARKET LAW. AS REQUIRED UNDER THE MEXICAN SECURITIES MARKET
LAW, WE WILL NOTIFY THE CNBV OF THE OFFERING OF THE NOTES OUTSIDE OF MEXICO. SUCH
NOTICE WILL BE SUBMITTED TO THE CNBV TO COMPLY WITH A LEGAL REQUIREMENT AND FOR
INFORMATION PURPOSES ONLY, AND THE DELIVERY OF SUCH NOTICE TO, AND THE RECEIPT OF
SUCH NOTICE BY, THE CNBV DOES NOT IMPLY ANY CERTIFICATION AS TO THE INVESTMENT
QUALITY OF THE NOTES, OUR SOLVENCY, LIQUIDITY OR CREDIT QUALITY OR THE ACCURACY OR
COMPLETENESS OF THE INFORMATION SET FORTH HEREIN. THIS OFFERING CIRCULAR MAY NOT BE
PUBLICLY DISTRIBUTED IN MEXICO. THE ACQUISITION OF THE NOTES BY AN INVESTOR OF
MEXICAN NATIONALITY WILL BE MADE UNDER ITS OWN RESPONSIBILITY.

THE INFORMATION CONTAINED IN THIS OFFERING CIRCULAR IS OUR SOLE RESPONSIBILITY
AND HAS NOT BEEN REVIEWED OR AUTHORIZED BY THE CNBV.

No invitation, whether directly or indirectly, may be made to the public in the Cayman Islands to subscribe for the
Notes.

ii

The Notes are not deposits with Banorte and are not insured or otherwise protected by the United States
Federal Deposit Insurance Corporation or any other United States governmental agency or any Mexican governmental
agency, including, without limitation, the Instituto para la Protección al Ahorro Bancario of Mexico ("IPAB").

Pursuant to Article 28 of the Mexican Financial Groups Law (Ley para Regular las Agrupaciones Financieras or
"Financial Groups Law"), a financial services holding company such as Grupo Financiero Banorte, S.A. de C.V. ("GFNorte"),
our holding company, is secondarily (subsidiariamente) and unlimitedly liable for the performance of the obligations
undertaken by the members of our financial group (including Banorte), in respect of the operations that each company is
allowed to carry out pursuant to applicable law. In addition, GFNorte is unlimitedly liable for the losses of each company
comprising our financial group; provided that for such purposes, a company is deemed to have losses when its assets are
insufficient to fulfill its payment obligations. As a result, GFNorte would secondarily be liable in respect of our obligations
under the Notes. However, the enforcement of GFNorte's liability pursuant to Article 28 of the Mexican Financial Groups
Law is subject to a specific proceeding provided for in the Financial Groups Law and may not be enforced expeditiously.
Thus the timing and outcome of an action against GFNorte is uncertain.

We reserve the right to reject any offer to purchase, in whole or in part, for any reason, or to sell less than the full
amount of the Notes offered hereby.

The Notes may not be purchased or held by (i) any plan, program or arrangement subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code") or provisions under any federal, state, local, non-U.S. or other laws or regulations that are substantially similar to
such provisions of ERISA or the Code or (ii) any person acting on behalf of or using the assets of any such plan, program or
arrangement (each of (i) and (ii), a "Plan"), unless such purchase and holding is covered by the exemptive relief provided by
(i) Prohibited Transaction Class Exemption ("PTCE") 96-23, 95-60, 91-38, 90-1 or 84-14, (ii) Section 408(b)(17) of ERISA or
Section 4975(d)(20) of the Code, or (iii) another applicable statutory or administrative exemption. Any purchaser or holder of
Notes or any interest therein will be deemed to have represented by its purchase or holding thereof that either (i) it is not a Plan
and it is not purchasing securities on behalf of or using the assets of any such Plan or (ii) such purchase and holding and any
subsequent disposition of such Notes is covered by the exemptive relief provided by (i) PTCE 96-23, 95-60, 91-38, 90-1 or 84-
14, (ii) Section 408(b)(17) of ERISA or Section 4975(d)(20) of the Code, or (iii) another applicable statutory or administrative
exemption. If a purchaser or holder of Notes that is a Plan elects to rely on an exemption other than (i) PTCE 96-23, 95-60, 91-
38, 90-1 or 84-14, or (ii) Section 408(b)(17) of ERISA or Section 4975(d)(20) of the Code, we may require a satisfactory
opinion of counsel or other evidence with respect to the availability of such exemption for such purchase or holding or any
subsequent disposition of the Notes. Prospective purchasers must carefully consider the restrictions on purchase set forth in
"Transfer Restrictions" and "Certain ERISA Considerations."

This communication is only being distributed to and is only directed at (i) persons who are outside the United Kingdom
or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (the "Order") or (iii) high net worth companies, and other persons to whom it may lawfully be
communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant
persons"). The Notes are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire
the Notes will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this
document or any of its contents.

In any European Economic Area ("EEA") member state that has implemented Directive 2003/71/EC (together with any
applicable implementing measures in any member state, the "Prospectus Directive"), this communication is only addressed to
and is only directed at qualified investors in that member state within the meaning of the Prospectus Directive.

This offering circular has been prepared on the basis that all offers of the Notes will be made pursuant to an exemption
under the Prospectus Directive, as implemented in member states of the EEA, from the requirement to produce a prospectus for
offers of the Notes. Accordingly, any person making or intending to make any offer within the EEA of the Notes which are the
subject of the placement contemplated in this offering circular should only do so in circumstances in which no obligation arises
for us or the initial purchaser to produce a prospectus for such offer. Neither we nor the initial purchaser has authorized, nor do
we or they authorize, the making of any offer of the Notes through any financial intermediary, other than offers made by initial
purchaser which constitute the final placement of such Notes contemplated in this offering circular.

Each person in a Relevant Member State who receives any communication in respect of, or who acquires any Notes
under the offer contemplated in this offering circular will be deemed to have represented, warranted and agreed to and with the
Stabilizing Manager and the Issuer that:

iii

(a)
it is a qualified investor within the meaning of the law in that Relevant Member State implementing
Article 2(1)(e) of the Prospectus Directive; and

(b)
in the case of any Notes acquired by it as a financial intermediary as that term is used in Article 3(2) of the
Prospectus Directive, (i) the Notes acquired by it in the offers have not been acquired on behalf of, nor have they been acquired
with a view to their offer or resale to, persons in any Relevant Member State other than qualified investors, as that term is
defined in the Prospectus Directive, or in circumstances in which the prior consent of the Dealer Managers has been given to the
offer or resale; or (ii) where the Notes have been acquired by it on behalf of persons in any Relevant Member State other than
qualified investors, the offer of those Notes to it is not treated under the Prospectus Directive as having been made to such
persons.

For the purposes of this representation, the expression an "offer" in relation to any Notes in any Relevant Member State means
the communication in any form and by any means of sufficient information on the terms of the offer and any Notes to be offered
so as to enable an investor to decide to purchase or subscribe for the Notes, as the same may be varied in that Relevant Member
State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression "Prospectus
Directive" means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

NOTICE TO NEW HAMPSHIRE RESIDENTS

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION
FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE
REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A
SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE
OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT
ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT
MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR
EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE
SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR
QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON,
SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE,
TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION
INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

AVAILABLE INFORMATION

We are not subject to the information requirements of the United States Securities Exchange Act of 1934, as amended
(the "Exchange Act"). To preserve the exemption for resales and transfers under Rule 144A under the Securities Act, we have
agreed that we will promptly provide any holder or any prospective purchaser of the Notes who is designated by that holder and
is a "qualified institutional buyer," as defined under Rule 144A, upon the request of such holder or prospective purchaser, with
information meeting the requirements of Rule 144A(d)(4), unless we either furnish information to the SEC in accordance with
Rule 12g3-2(b) under the Exchange Act or furnish information to the SEC pursuant to Section 13 or 15(d) of the Exchange Act.
For so long as the Notes are outstanding, such information will be available at our specified offices and (for so long as the Notes
are listed on the Luxembourg Stock Exchange) the Luxembourg Paying Agent. Following completion of this offering, we are
not otherwise obligated to furnish holders or others with any supplemental information, discussion or analysis of our business or
financial reports.

We will make available to the holders of the Notes, at the corporate trust office of the Trustee at no cost, copies of the
indenture as well as this offering circular, and annual audited consolidated financial statements prepared in conformity with
Mexican Banking GAAP (as defined herein). We will also make available at the office of the Trustee our audited annual and
our unaudited quarterly consolidated financial statements prepared in accordance with Mexican Banking GAAP. Information is
also available at the office of the Luxembourg Listing Agent (as defined herein).

Application has been made to list the Notes on the Official List of the Luxembourg Stock Exchange and to trading
on the Euro MTF market, in accordance with the rules of the Luxembourg Stock Exchange. This offering circular forms, in
all material respects, the listing memorandum for admission to the Luxembourg Stock Exchange. We will be required to comply
with any undertakings given by us from time to time to the Luxembourg Stock Exchange in connection with the Notes, and to
iv

furnish to it all such information as the rules of the Luxembourg Stock Exchange may require in connection with the listing of
the Notes.

ENFORCEMENT OF JUDGMENTS

We are a multiple purpose bank (institución de banca múltiple) incorporated in accordance with the laws of Mexico
with limited liability (sociedad anónima). All of our directors and officers and experts named herein are non-residents of the
United States and substantially all of the assets of such non-resident persons and substantially all of our assets are located outside
the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such
persons or to enforce against them or us in United States courts judgments predicated upon the civil liability provisions of
United States federal securities laws. We have been advised by our special Mexican counsel, White & Case, S.C., that there is
doubt as to the enforceability, in original actions in Mexican courts, of liabilities predicated solely on United States federal
securities laws and as to the enforceability in Mexican courts of judgments of United States courts obtained in actions predicated
upon the civil liability provisions of United States federal securities laws. We have been advised by such special Mexican
counsel that no bilateral treaty is currently in effect between the United States and Mexico that covers the reciprocal enforcement
of civil foreign judgments. In the past, Mexican courts have enforced judgments rendered in the United States by virtue of the
legal principles of reciprocity and comity, consisting of the review in Mexico of the United States judgment, in order to
ascertain, among other matters, whether Mexican legal principles of due process and public policy (orden público) have been
complied with, without reviewing the merits of the subject matter of the case.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This offering circular contains forward-looking statements. Examples of such forward-looking statements include, but
are not limited to: (i) statements regarding our future results of operations and financial position; (ii) statements of plans,
objectives or goals, including those related to our operations; and (iii) statements of assumptions underlying such statements.
Words such as "believes," "anticipates," "should," "estimates," "seeks," "forecasts," "expects," "may," "intends," "plans" and
similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such
statements.

You should not place undue reliance on forward-looking statements, which are based on current expectations. By their
very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that
the predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution investors that a
number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and
intentions expressed or implied in such forward-looking statements, including the following factors:

competition;
acquisitions and divestitures;

credit and other lending risks;
limitations on our access to sources of financing on competitive terms;

restrictions on foreign currency convertibility and remittance outside of Mexico;

failure to meet capital requirements or other requirements;

limitations on our ability to freely determine interest rates;

changes in reserve requirements;

changes in requirements to make contributions to or for the receipt of support from programs organized by the
Mexican government;

changes in overall economic conditions in Mexico and internationally;

changes in exchange rates, market interest rates or the rate of inflation;

v

uncertainties in respect of GFNorte's secondary liability;

changes in regulation as it relates to the products we offer; and

the effect of changes in accounting principles, new legislation, intervention by regulatory authorities, government
directives and monetary or fiscal policy in Mexico.

Should one or more of these factors or uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended.

Prospective investors should read the sections of this offering circular entitled "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and "Business of Banorte" for a more complete
discussion of the factors that could affect our future performance and the markets in which we operate. In light of these risks,
uncertainties and assumptions, the forward-looking events described in this offering circular may not occur. All forward-
looking statements included in this offering circular are based upon information available to us as of the date of this offering
circular, and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new
information or future events or developments.

vi

PRESENTATION OF CERTAIN FINANCIAL AND OTHER INFORMATION
Financial Statements

This offering circular includes (i) our audited consolidated financial statements as of December 31, 2009, 2008 and
2007 and for the years ended December 31, 2009, 2008 and 2007, together with the notes thereto (the "audited consolidated
financial statements"), and (ii) our unaudited condensed consolidated financial statements as of and for the three months ended
March 31, 2010 and 2009, together with the notes thereto (the "unaudited interim financial statements," and together with the
audited consolidated financial statements, the "Financial Statements"). The Financial Statements have been prepared in
accordance with the accounting principles and regulations prescribed by the CNBV for credit institutions, as amended
("Mexican Banking GAAP").

Accounting Principles

Mexican Banking GAAP differs from Mexican Financial Reporting Standards (normas de información financiera),
referred to as MFRS, as currently in effect and issued by the Consejo Mexicano para la Investigación y Desarrollo de Normas
de Información Financiera A.C. ("CINIF"). Mexican Banking GAAP also differs in certain significant respects from accounting
principles generally accepted in the United States of America ("U.S. GAAP"). For a summary of the principal differences
between Mexican Banking GAAP and U.S. GAAP, as they relate to our Financial Statements, see "Significant Differences
Between Mexican Banking GAAP and U.S. GAAP." No reconciliation of any of the Financial Statements to U.S. GAAP has
been prepared for the purposes of this offering circular. Any such reconciliation would likely result in material differences.

Effective January 1, 2008, the guidelines of the MFRS B-10 provide that the effects of inflation will no longer be
recognized in financial statements in a non-inflationary environment. After that date, the recording of inflation effects will
only be required in an environment where cumulative inflation over the three preceding years is equal to or greater than 26%.
Because of the relatively low level of Mexican inflation in recent years, the cumulative inflation rate in Mexico over the
three-year period preceding December 31, 2008 and 2009 does not qualify as inflationary.

Consequently, beginning on January 1, 2008, we were no longer required by Mexican Banking GAAP to recognize
the effects of inflation in our financial statements. Accordingly, our financial information through December 31, 2007 is
stated in Pesos in purchasing power as of December 31, 2007. The financial information as of December 31, 2008 and 2009,
and the financial information for the years ended December 31, 2008 and 2009, is not directly comparable to prior periods
due to the recognition of inflation effects in financial information in prior periods.

The Financial Statements and the other financial information contained in this offering circular are presented in
consolidated form.

Currencies

The financial information appearing in this offering circular is presented in Mexican Pesos. In this offering circular
references to "Pesos" or "Ps." are to Mexican Pesos and references to "U.S. dollars," "dollars," "U.S.$" or "$" are to United
States dollars. This offering circular contains translations of certain Peso amounts into U.S. dollars at specified rates solely for
the convenience of the reader. These translations should not be construed as representations that the Peso amounts actually
represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless otherwise indicated, U.S.
dollar amounts that have been translated from Pesos have been so translated at an exchange rate of Ps.12.3306 per U.S. dollar,
the rate calculated for March 31, 2010 and published on March 30, 2010 in the Diario Oficial de la Federación (the Mexican
Official Gazette of the Federation, or the "Official Gazette") by the Banco de México for the payment of obligations
denominated in currencies other than Pesos and payable within Mexico (the "Banco de México Exchange Rate"). As of the
same date, the noon buying rate in New York City for cable transfers in Pesos per U.S. dollar as certified for customs purposes
by the Federal Reserve Bank of New York was Ps.12.3005 per U.S. dollar. See "Exchange Rates and Currency" for information
regarding rates of exchange between the Peso and the U.S. dollar for the periods specified therein.

References herein to "UDIs" are to Unidades de Inversión, a Peso equivalent unit of account indexed for Mexican
inflation. UDIs are units of account whose value in Pesos is indexed to inflation on a daily basis, as measured by the change in
the Índice Nacional de Precios al Consumidor (National Consumers' Price Index, or "NCPI"). Under a UDI-based loan or
financial instrument, the borrower's nominal Peso principal balance is converted either at origination or upon restructuring to a
UDI principal balance, and interest on the loan or financial instrument is calculated on the outstanding UDI balance of the loan
or financial instrument. Principal and interest payments are made by the borrower in an amount of Pesos equivalent to the
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amount due in UDIs at the stated value of the UDIs on the day of payment. As of March 31, 2010, one UDI was equal to
Ps.4.439870 (U.S.$0.36).

Terms Relating to Our Loan Portfolio

As used in this offering circular, the following terms relating to our loan portfolio and other credit assets have the
meanings set forth below, unless otherwise indicated.

"Total performing loans" and "total performing loan portfolio" refer to the aggregate of (i) the total principal amount of
loans outstanding as of the date presented, (ii) amounts attributable to "accrued interest," (iii) "rediscounted loans" and (iv) the
"UDI Trusts" (as explained below). Under Mexican Banking GAAP, we include as income for any reporting period interest
accrued but unpaid during that period. Such "accrued interest" is reported as part of our total performing loan portfolio in the
financial statements until it is paid or becomes part of the total non-performing loan portfolio in accordance with the CNBV's
rules. "Rediscounted loans" are Peso- and dollar-denominated loans made to finance projects in industries that qualify for
priority status under the wholesale lending programs of the Mexican government's development banks and are generally funded
by such development banks. In accordance with Mexican Banking GAAP, rediscounted loans are recorded on the balance sheet
as outstanding loans. As mandated by the CNBV, total performing loans include the portfolio trusts (the "UDI Trusts") holding
our loans converted into UDIs that are consolidated in our Financial Statements. Under the UDI program, we are liable for all
future losses, if any, on the loans in the UDI Trusts. See "Selected Statistical Information--Debtor Support Programs--UDI
Program."

Unless otherwise specified herein, the terms "total performing loans" and "total performing loan portfolio," as used in
this offering circular, do not include "total non-performing loans," as defined below. The term "net total performing loans"
refers to total performing loans less allowance for loan losses on these loans.

The terms "total non-performing loans" and "total non-performing loan portfolio" include past-due principal and past-
due interest. For a description of our policies regarding the classification of loans as non-performing, see "Selected Statistical
Information--Non-Performing Loan Portfolio." The term "net non-performing loans" refers to total non-performing loans less
allowance for loan losses on these loans.

References in this offering circular to "provisions" are to additions to the loan loss allowance or reserves recorded in a
particular period and charged to income. References in this offering circular to "allowance" are to the aggregate loan loss
allowance or reserves shown as of a particular date as a balance sheet item.

The terms "total loans" and "total loan portfolio" include total performing loans plus total non-performing loans, each
as defined above. The terms "net total loans" and "net total loan portfolio" refer to net total performing loans plus net non-
performing loans, as defined above.

The loan portfolio information provided in "Selected Statistical Information" was determined in accordance with the
manner in which we have presented the components of our loan portfolio in other sections of this offering circular as described
above. See "Selected Statistical Information--Loan Portfolio" and the footnotes to the tables included therein.

Terms Relating to Our Capital Adequacy

As used in this offering circular, the following terms relating to our capital adequacy have the meanings set forth
below, unless otherwise indicated.

"Total capital" or "total net capital" refers to capital neto, as such term is determined based on the Mexican Banking
Law (Ley de Instituciones de Crédito) and the General Rules Applicable to Mexican Banks, and includes Tier 1 capital plus Tier
2 capital.

"Tier 1 capital" refers to the parte básica (basic portion) of the total net capital, as such term is determined based on the
Mexican Capitalization Rules.

"Tier 2 capital" refers to the parte complementaria (additional portion) of the total net capital, as such term is
determined based on the Mexican Capitalization Rules.

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