Bond Scotia & Southern Energy 5.025% ( XS0541656509 ) in EUR

Issuer Scotia & Southern Energy
Market price 100 %  ⇌ 
Country  United Kingdom
ISIN code  XS0541656509 ( in EUR )
Interest rate 5.025% per year ( payment 1 time a year)
Maturity Perpetual - Bond has expired



Prospectus brochure of the bond Scottish & Southern Energy (SSE) XS0541656509 in EUR 5.025%, expired


Minimal amount 50 000 EUR
Total amount 500 000 000 EUR
Detailed description Scottish & Southern Energy (SSE) is a large integrated energy company operating in the UK, involved in electricity generation, transmission, distribution, and retail, with a growing presence in renewable energy sources such as wind and hydro.

The Bond issued by Scotia & Southern Energy ( United Kingdom ) , in EUR, with the ISIN code XS0541656509, pays a coupon of 5.025% per year.
The coupons are paid 1 time per year and the Bond maturity is Perpetual







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IMPORTANT: You must read the following before continuing. The following applies to the Prospectus
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reading, accessing or making any other use of the Prospectus. In accessing the Prospectus, you agree to be
bound by the following terms and conditions, including any modifications to them any time you receive
any information from us as a result of such access.
NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE SECURITIES DESCRIBED IN THE
PROSPECTUS IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO DO SO.
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE ``SECURITIES ACT'') OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR OTHER RELEVANT
JURISDICTION AND THE SECURITIES MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS
DEFINED IN
REGULATION
S UNDER
THE
SECURITIES
ACT), EXCEPT
IN
A
TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE OR LOCAL
SECURITIES LAWS.
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OTHER JURISDICTIONS.
Confirmation of your Representation: You have been sent the attached Prospectus at your request and by
accepting the e-mail and by accepting this Prospectus you shall be deemed to have represented to Banco
Bilbao Vizcaya Argentaria, S.A., Barclays Bank PLC, BNP Paribas, Credit Suisse Securities (Europe)
Limited, Mitsubishi UFJ Securities International plc and The Royal Bank of Scotland plc, being the
Managers referred to in the Prospectus and senders of the attached, (i) that you are not (or, if you are
acting for another person, such person is not) a U.S. person, (ii) that you are not (or, if you are acting on
behalf of another person, such person is not) located in the United States of America, its territories or
possessions, any State of the United States or the District of Columbia (where ``possessions'' include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands) and (iii) that you consent (and if you are acting on behalf of another person, such person
consents) to this delivery by electronic transmission.
You are reminded that the Prospectus has been delivered to you on the basis that you are a person into
whose possession the Prospectus may be lawfully delivered in accordance with the laws of the jurisdiction
in which you are located and you may not, nor are you authorised to, deliver the Prospectus to any other
person.
The Prospectus does not constitute, and may not be used in connection with, an offer or solicitation in any
place where offers or solicitations are not permitted by law. If a jurisdiction requires that the offering be
made by a licensed broker or dealer and any Manager or any affiliate of a Manager is a licensed broker or
dealer in that jurisdiction, the offering shall be deemed to be made by such Manager or such affiliate on
behalf of the Issuer in such jurisdiction. The Prospectus may only be communicated to persons in the
United Kingdom in circumstances where section 21(1) of the Financial Services and Markets Act 2000
does not apply.
The Prospectus has been sent to you in electronic form. You are reminded that documents transmitted
via this medium may be altered or changed during the process of electronic transmission and
consequently none of Scottish and Southern Energy plc or any Manager, nor any person who controls any
Manager nor any director, officer, employee, agent or affiliate of any such person accepts any liability or
responsibility whatsoever in respect of any difference between the Prospectus distributed to you in
electronic format herewith and the hard copy version available to you on request from any Manager.


Scottish and Southern Energy plc
(incorporated in Scotland, with limited liability, registered number SC117119)
C500,000,000 Capital Securities
£750,000,000 Capital Securities
Issue Price: 100 per cent. in respect of the Euro Securities
100 per cent. in respect of the Sterling Securities
The A500,000,000 Capital Securities (the ``Euro Securities'') and the £750,000,000 Capital Securities (the ``Sterling Securities'' and together with the Euro Securities, the
``Securities'' and each, a ``Tranche'') will be issued by Scottish and Southern Energy plc (the ``Issuer'') on 20 September 2010 (the ``Issue Date''). The Euro Securities will
bear interest from (and including) the Issue Date to (but excluding) 1 October 2015 at a rate of 5.025 per cent. per annum, payable annually in arrear on 1 October in each
year. The first payment of interest, to be made on 1 October 2011, will be in respect of the period from (and including) the Issue Date to (but excluding) 1 October 2011 and
will amount to A51.76 per A1,000 in principal amount of the Euro Securities. Thereafter, unless previously redeemed, the Euro Securities will bear interest from (and
including) 1 October 2015 to (but excluding) 1 October 2020 at a rate per annum which shall be 3.150 per cent. above the then prevailing euro 5 year Swap Rate (as defined
in the Terms and Conditions of the Euro Securities (the ``Euro Conditions'')), payable annually in arrear on 1 October in each year. From (and including) 1 October 2020,
the Euro Securities will bear interest at a rate reset annually of 4.150 per cent. per annum above the Euro interbank offered rate for 12-month deposits in euro, payable
annually in arrear on the Interest Payment Date (as defined in the Euro Conditions) falling in October in each year, all as more particularly described in ``Terms and
Conditions of the Euro Securities -- Interest Payments''. The Sterling Securities will bear interest from (and including) the Issue Date to (but excluding) 1 October 2015 at a
rate of 5.453 per cent. per annum, payable annually in arrear on 1 October in each year. The first payment of interest, to be made on 1 October 2011, will be in respect of the
period from (and including) the Issue Date to (but excluding) 1 October 2011 and will amount to £56.17 per £1,000 in principal amount of the Sterling Securities. Thereafter,
unless previously redeemed, the Sterling Securities will bear interest from (and including) 1 October 2015 to (but excluding) 1 October 2020 at a rate per annum which shall
be the annualised equivalent of 3.249 per cent. above the then prevailing sterling 5 year Swap Rate (as defined in the Terms and Conditions of the Sterling Securities (the
``Sterling Conditions'' and together with the Euro Conditions, the ``Conditions'')), payable annually in arrear on 1 October in each year. From (and including) 1 October
2020, the Sterling Securities will bear interest at a rate reset annually of 4.249 per cent. per annum above the London interbank offered rate for 12-month deposits in pounds
sterling, payable annually in arrear on the Interest Payment Date (as defined in the Sterling Conditions) falling in October in each year, all as more particularly described in
``Terms and Conditions of the Sterling Securities -- Interest Payments''.
If the Issuer does not elect to redeem the Securities in accordance with Condition 6(g) thereof following the occurrence of a Change of Control Event (as defined in the
relevant Conditions), the then prevailing interest rate per annum (and each subsequent interest rate per annum otherwise determined in accordance with the relevant
Conditions) shall be increased by 5 per cent. per annum with effect from (and including) the date on which the Change of Control Event occurred, see ``Terms and
Conditions of the Euro Securities -- Interest Payments -- Step-up after Change of Control'' and ``Terms and Conditions of the Sterling Securities -- Interest Payments --
Step-up after Change of Control'', respectively.
The Issuer may, at its discretion, elect to defer all or part of any payment of interest on the Securities, subject to limited exceptions, as more particularly described in ``Terms
and Conditions of the Euro Securities -- Optional Interest Deferral'' and ``Terms and Conditions of the Sterling Securities -- Optional Interest Deferral'', respectively. Any
amounts so deferred, together with further interest accrued thereon (at the interest rate per annum prevailing from time to time), shall constitute Arrears of Interest (as
defined in the relevant Conditions). The Issuer may pay outstanding Arrears of Interest, in whole or in part, at any time in accordance with the relevant Conditions.
Notwithstanding this, the Issuer shall pay any outstanding Arrears of Interest, in whole but not in part, on the first to occur of the following dates: (i) the date on which a
Compulsory Interest Payment Event (as defined in the relevant Conditions) occurs; (ii) the date on which the Securities are redeemed (in whole, but not in part) or repaid in
accordance with the relevant Conditions; or (iii) the date on which the Securities are substituted for, or where the terms of the Securities are varied so that they become,
Qualifying Securities (as defined in Condition 7 thereof) in accordance with Condition 7 thereof, all as more particularly described in ``Terms and Conditions of the Euro
Securities -- Optional Interest Deferral -- Arrears of Interest'' and ``Terms and Conditions of the Sterling Securities -- Optional Interest Deferral -- Arrears of Interest'',
respectively.
The Securities will be perpetual securities in respect of which there is no fixed redemption date but each Tranche shall, be redeemable (at the option of the Issuer) in whole
but not in part on the First Call Date, the Second Call Date or any Interest Payment Date (each such term as defined in the relevant Conditions) thereafter, at the principal
amount of the relevant Securities, together with any accrued and unpaid interest up to (but excluding) such date and any outstanding Arrears of Interest. In addition, upon
the occurrence of an Accounting Event, a Capital Event, a Change of Control Event, a Substantial Repurchase Event, a Tax Event or a Withholding Tax Event (each such
term as defined in the relevant Conditions), each Tranche shall be redeemable (at the option of the Issuer) in whole but not in part at the prices set out, and as more
particularly described, in ``Terms and Conditions of the Euro Securities -- Redemption'' and ``Terms and Conditions of the Sterling Securities -- Redemption'',
respectively.
The Issuer may, upon the occurrence of an Accounting Event, a Capital Event, a Tax Event or a Withholding Tax Event, at any time, without the consent of the holders of
the relevant Securities, either (i) substitute all, but not some only, of such Securities for, or (ii) vary the terms of such Securities with the effect that they remain or become,
as the case may be, Qualifying Securities, in each case in accordance with Condition 7 thereof and subject to the receipt by the Trustee of the certificate of the directors of
the Issuer referred to in Condition 8 thereof.
The Securities will be unsecured securities of the Issuer and will constitute subordinated obligations of the Issuer, all as more particularly described in ``Terms and
Conditions of the Euro Securities -- Status'', ``Terms and Conditions of the Euro Securities -- Subordination'', ``Terms and Conditions of the Sterling Securities -- Status''
and ``Terms and Conditions of the Sterling Securities -- Subordination'', respectively.
Payments in respect of the Securities shall be made free and clear of, and without withholding or deduction for, or on account of, taxes of the United Kingdom, unless such
withholding or deduction is required by law. In the event that any such withholding or deduction is made, additional amounts may be payable by the Issuer, subject to
certain exceptions as are more fully described in ``Terms and Conditions of the Euro Securities -- Taxation'' and ``Terms and Conditions of the Sterling Securities --
Taxation'', respectively.
Applications will be made to the Financial Services Authority in its capacity as competent authority under the Financial Services and Markets Act 2000 (the ``UK Listing
Authority'') for the 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 such Securities to be admitted to trading on the London Stock Exchange's Regulated Market (the ``Market''). References in this Prospectus to the
Securities being ``listed'' (and all related references) shall mean that the Securities have been admitted to the Official List and have been admitted to trading on the Market.
The Market is a regulated market for the purposes of Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments.
The Securities of each Tranche will initially be represented by a temporary global security (each a ``Temporary Global Security'' and together with the Temporary Global
Security in respect of the other Tranche, the ``Temporary Global Securities''), without interest coupons or talons, which will be deposited with a common depositary on
behalf of Euroclear Bank S.A./N.V. (``Euroclear'') and Clearstream Banking, socie´te´ anonyme (``Clearstream, Luxembourg'') on or about the Issue Date. Each Temporary
Global Security will be exchangeable for interests in a permanent global security (each a ``Permanent Global Security'' and together with the Permanent Global Security in
respect of the other Tranche, the ``Permanent Global Securities'' and together with the Temporary Global Securities, the ``Global Securities''), without interest coupons or
talons, on or after a date which is expected to be 30 October 2010, upon certification as to non-U.S. beneficial ownership. Each Permanent Global Security will be
exchangeable for definitive Securities in bearer form in the denominations of (i) A50,000 and integral multiples of A1,000 in excess thereof up to, and including, A99,000 in
respect of the Euro Securities and (ii) £50,000 and integral multiples of £1,000 in excess thereof up to, and including, £99,000 in respect of the Sterling Securities, in each case
in the limited circumstances set out in it. No definitive Securities will be issued with a denomination above A99,000 in respect of the Euro Securities and above £99,000 in
respect of the Sterling Securities. See ``Summary of Provisions relating to the Securities while in Global Form''.
The Securities are expected to be rated BBB by Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, Inc. (``Standard & Poor's'') and Baa2 by
Moody's Investors Service, Inc. (``Moody's''). A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at
any time by the assigning rating agency.
Prospective investors should have regard to the factors described under the section headed ``Risk Factors'' in this Prospectus.
JOINT STRUCTURING ADVISERS AND JOINT LEAD MANAGERS
BARCLAYS CAPITAL
THE ROYAL BANK OF SCOTLAND
JOINT LEAD MANAGERS
BNP PARIBAS
CREDIT SUISSE
CO-MANAGERS
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
MITSUBISHI UFJ SECURITIES INTERNATIONAL PLC
The date of this Prospectus is 16 September 2010


This Prospectus comprises a prospectus for the purposes of Directive 2003/71/EC (the ``Prospectus
Directive'') and for the purpose of giving information with regard to the Issuer, the Issuer and its
subsidiaries taken as a whole and the Securities which, according to the particular nature of the Issuer and
the Securities, is necessary to enable investors to make an informed assessment of the assets and
liabilities, financial position, profit and losses and prospects of the Issuer. The Issuer accepts responsibility
for the information contained in this Prospectus. To the best of the knowledge of the Issuer (which has
taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is
in accordance with the facts and does not omit anything likely to affect the import of such information.
This Prospectus is to be read in conjunction with all the documents which are incorporated herein by
reference (see ``Documents Incorporated by Reference'').
This Prospectus does not constitute an offer of, or an invitation by or on behalf of the Issuer or the
Managers (as defined in ``Subscription and Sale'' below) to subscribe or purchase, any of the Securities.
The distribution of this Prospectus and the offering of the Securities in certain jurisdictions may be
restricted by law. Persons into whose possession this Prospectus comes are required by the Issuer and the
Managers to inform themselves about and to observe any such restrictions.
For a description of further restrictions on offers and sales of Securities and distribution of this
Prospectus, see ``Subscription and Sale'' below.
No person is authorised to give any information or to make any representation not contained in this
Prospectus and any information or representation not so contained must not be relied upon as having
been authorised by or on behalf of the Issuer or the Managers. Neither the delivery of this Prospectus nor
any sale made in connection herewith shall, under any circumstances, create any implication that there
has been no change in the affairs of the Issuer since the date hereof or the date upon which this
Prospectus has been most recently amended or supplemented or that there has been no adverse change in
the financial position of the Issuer since the date hereof or the date upon which this Prospectus has been
most recently amended or supplemented or that the information contained in it or any other information
supplied in connection with the 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.
To the greatest extent permitted by law, the Managers accept no responsibility whatsoever for the
contents of this Prospectus or for any other statement, made or purported to be made by a Manager or on
its behalf in connection with the Issuer or the issue and offering of the Securities. Each Manager
accordingly disclaims all and any liability whether arising in tort or contract or otherwise (save as referred
to above) which it might otherwise have in respect of this Prospectus or any such statement.
The Securities have not been and will not be registered under the U.S. Securities Act of 1933 (the
``Securities Act'') and are subject to U.S. tax law requirements. Subject to certain exceptions, the
Securities may not be offered, sold or delivered within the United States or to U.S. persons.
Unless otherwise specified or the context requires, references to ``£'', ``sterling'', ``pounds sterling'' and
``pence'' are to the lawful currency of the United Kingdom, references to ``$'' and ``dollars'' are to the
lawful currency of the United States of America, references to ``euro'' and ``C'' are to the lawful currency
introduced at the start of the third stage of European Economic and Monetary Union pursuant to the
Treaty establishing the European Community, as amended and references to ``yen'' and ``JPY'' are to the
lawful currency of Japan.
In connection with the issue of each Tranche, The Royal Bank of Scotland plc (the ``Stabilising
Manager'') (or any person acting on behalf of the Stabilising Manager) may over-allot the relevant
Securities or effect transactions with a view to supporting the market price of the relevant Securities at a
level higher than that which might otherwise prevail. However, there is no assurance that the Stabilising
Manager (or any person acting on behalf of the Stabilising Manager) will undertake stabilisation action.
Any stabilisation action may begin on or after the date on which adequate public disclosure of the terms
of the offer of the relevant Securities is made and, if begun, may be ended at any time, but it must end no
later than the earlier of 30 days after the issue date of the relevant Securities and 60 days after the date of
the allotment of the relevant Securities. Any stabilisation action or over-allotment must be conducted by
the Stabilising Manager (or any person acting on behalf of the Stabilising Manager) in accordance with all
applicable laws and rules.
2


TABLE OF CONTENTS
Page
DOCUMENTS INCORPORATED BY REFERENCE....................................................................
4
OVERVIEW...............................................................................................................................................
5
RISK FACTORS .......................................................................................................................................
10
TERMS AND CONDITIONS OF THE EURO SECURITIES ......................................................
18
TERMS AND CONDITIONS OF THE STERLING SECURITIES..............................................
35
SUMMARY OF PROVISIONS RELATING TO THE SECURITIES WHILE IN GLOBAL
FORM..........................................................................................................................................................
53
DESCRIPTION OF THE ISSUER .......................................................................................................
55
USE OF PROCEEDS...............................................................................................................................
65
TAXATION ...............................................................................................................................................
66
SUBSCRIPTION AND SALE................................................................................................................
68
GENERAL INFORMATION ...............................................................................................................
70
3


DOCUMENTS INCORPORATED BY REFERENCE
This Prospectus should be read and construed in conjunction with the audited consolidated financial
statements of the Issuer for the financial years ended 31 March 2009 and 31 March 2010, respectively,
together in each case with the audit report thereon, and which are included on pages 76 to 142 of the
2009 Annual Report of the Issuer and pages 77 to 149 of the 2010 Annual Report of the Issuer,
respectively. Such documents shall be incorporated in, and form part of, this Prospectus, save that any
statement contained in a document which is incorporated by reference herein shall be modified or
superseded for the purpose of this Prospectus to the extent that a statement contained herein modifies or
supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so
modified or superseded shall not, except as so modified or superseded, constitute a part of this Prospectus.
Any documents themselves incorporated by reference in the documents incorporated by reference in this
Prospectus shall not form part of this Prospectus.
Copies of documents incorporated by reference in this Prospectus may be obtained (without charge) from
the registered office of the Issuer and viewed on the website of the Regulatory News Service operated by
the London Stock Exchange at www.londonstockexchange.com/en-gb/pricesnews/marketnews/.
4


OVERVIEW
The following overview refers to certain provisions of the Terms and Conditions of the Euro Securities or,
as the case may be, the Terms and Conditions of the Sterling Securities and is qualified by the more detailed
information contained elsewhere in this Prospectus. Capitalised terms used herein have the meaning given
to them in ``Terms and Conditions of the Euro Securities'' or, as the case may be, ``Terms and Conditions of
the Sterling Securities''.
Issuer:
Scottish and Southern Energy plc.
Trustee:
BNY Corporate Trustee Services Limited.
Principal Paying Agent:
The Bank of New York Mellon, London Branch.
Issue Size:
A500,000,000 of Euro Securities and £750,000,000 of Sterling
Securities.
Issue Date:
20 September 2010.
No fixed maturity:
The Securities will be perpetual securities in respect of which there is
no fixed redemption date.
Interest:
The Euro Securities will bear interest from (and including) the Issue
Date to (but excluding) 1 October 2015 at a rate of 5.025 per cent. per
annum, payable annually in arrear on 1 October in each year. The
first payment of interest, to be made on 1 October 2011, will be in
respect of the period from (and including) the Issue Date to (but
excluding) 1 October 2011 and will amount to A51.76 per A1,000 in
principal amount of the Euro Securities. Thereafter, unless
previously redeemed, the Euro Securities will bear interest from
(and including) 1 October 2015 to (but excluding) 1 October 2020 at
a rate per annum which shall be 3.150 per cent. above the then
prevailing euro 5 year Swap Rate, payable annually in arrear on
1 October in each year. From (and including) 1 October 2020, the
Euro Securities will bear interest at a rate reset annually of 4.150 per
cent. per annum above the Euro interbank offered rate for 12-month
deposits in euro, payable annually in arrear on the Interest Payment
Date falling in October in each year, all as more particularly
described in ``Terms and Conditions of the Euro Securities --
Interest Payments''.
The Sterling Securities will bear interest from (and including) the
Issue Date to (but excluding) 1 October 2015 at a rate of
5.453 per cent. per annum, payable annually in arrear on 1 October
in each year. The first payment of interest, to be made on 1 October
2011, will be in respect of the period from (and including) the Issue
Date to (but excluding) 1 October 2011 and will amount to £56.17 per
£1,000 in principal amount of the Sterling Securities. Thereafter,
unless previously redeemed, the Sterling Securities will bear interest
from (and including) 1 October 2015 to (but excluding) 1 October
2020 at a rate per annum which shall be the annualised equivalent of
3.249 per cent. above the then prevailing sterling 5 year Swap Rate,
payable annually in arrear on 1 October in each year. From (and
including) 1 October 2020, the Sterling Securities will bear interest at
a rate reset annually of 4.249 per cent. per annum above the London
interbank offered rate for 12-month deposits in pounds sterling,
payable annually in arrear on the Interest Payment Date falling in
October in each year, all as more particularly described in ``Terms
and Conditions of the Sterling Securities -- Interest Payments''.
If the Issuer does not elect to redeem the Securities in accordance
with Condition 6(g) thereof following the occurrence of a Change of
Control Event, the then prevailing interest rate per annum (and each
subsequent interest rate per annum otherwise determined in
5


accordance with the relevant Conditions) shall be increased by
5 per cent. per annum with effect from (and including) the date on
which the Change of Control Event occurred, see ``Terms and
Conditions of the Euro Securities -- Interest Payments -- Step-up
after Change of Control'' and ``Terms and Conditions of the Sterling
Securities -- Interest Payments -- Step-up after Change of Control'',
respectively.
Interest Payment Dates:
Interest payments in respect of the Securities will be payable
annually in arrear on 1 October in each year from (and including)
1 October 2011 (in respect of a long first coupon) to (and including)
1 October 2020 and thereafter, subject to adjustment for
non-business days, on the Interest Payment Date falling in October
in each year from (and including) the Interest Payment Date falling
in October 2021.
Status:
The Securities and Coupons constitute direct, unsecured and
subordinated obligations of the Issuer and rank pari passu and
without any preference among themselves.
Subordination:
The rights and claims of the Holders and the Couponholders will be
subordinated to the claims of holders of all Senior Obligations in that
if at any time an order is made, or an effective resolution is passed,
for the winding-up of the Issuer (otherwise than for the purposes of a
solvent winding-up or substitution in place of the Issuer of a
``successor in business'' (as defined in the Trust Deed) of the Issuer)
or an administrator of the Issuer is appointed and such administrator
gives notice that it intends to declare and distribute a dividend, the
rights and claims of the Holders and the Couponholders will be
subordinated
in
accordance
with
Condition
3(a)
thereof.
Accordingly, the claims of holders of all Senior Obligations will
first have to be satisfied in any winding-up or analogous proceedings
before the Holders may expect to obtain any recovery in respect of
their Securities and prior thereto Holders will have only limited
ability to influence the conduct of such winding-up or analogous
proceedings. See ``Risk Factors ­ Risks related to the Securities
generally ­ Limited Remedies''.
Optional Interest Deferral:
The Issuer may, at its discretion, elect to defer all or part of any
Interest Payment which is otherwise scheduled to be paid on an
Interest Payment Date unless, in the three months immediately
preceding the relevant Interest Payment Date, a Compulsory Interest
Payment Event has occurred in which case any such election to defer
shall have no force or effect. Any amounts so deferred, together with
further interest accrued thereon (at the interest rate per annum
prevailing from time to time), shall constitute Arrears of Interest.
The Issuer may pay outstanding Arrears of Interest, in whole or in
part, at any time.
Notwithstanding the above, the Issuer shall pay any outstanding
Arrears of Interest, in whole but not in part, on the first to occur of
the following dates:
(i)
the date on which a Compulsory Interest Payment Event
occurs;
(ii)
the date on which the Securities are redeemed (in whole, but
not in part) or repaid in accordance with the relevant
Conditions; or
(iii) the date on which the Securities are substituted for, or where
the terms of the Securities are varied so that they become,
Qualifying Securities in accordance with Condition 7 thereof,
6


all as more particularly described in ``Terms and Conditions of the
Euro Securities -- Optional Interest Deferral -- Arrears of Interest''
and ``Terms and Conditions of the Sterling Securities -- Optional
Interest Deferral -- Arrears of Interest'', respectively.
If none of the events referred to in paragraph (i), (ii) or (iii) takes place
prior to the calendar day which is the fifth anniversary of the Interest
Payment Date on which the relevant Deferred Interest Payment first
arose, it is the intention, though not an obligation, of the Issuer to pay
all outstanding Arrears of Interest (in whole, but not in part) on the
next following Interest Payment Date.
Optional Redemption:
The Issuer may redeem all, but not some only, of the relevant
Securities on the First Call Date, the Second Call Date or any
Interest Payment Date thereafter at their principal amount together
with any accrued and unpaid interest up to (but excluding) the
redemption date and any outstanding Arrears of Interest.
Special Event Redemption:
If a Special Event has occurred and is continuing, the Issuer may
elect to redeem all, but not some only, of the relevant Securities at
any time at their (i) Make Whole Redemption Price (in the case of an
Accounting Event, a Capital Event or a Tax Event where any such
redemption occurs prior to the Second Call Date) or (ii) principal
amount (in the case of an Accounting Event, a Capital Event or a
Tax Event where any such redemption occurs on or after the Second
Call Date or in the case of a Substantial Repurchase Event or a
Withholding Tax Event where any such redemption occurs at any
time), in each case together with any accrued and unpaid interest up
to (but excluding) the redemption date and any outstanding Arrears
of Interest.
Change of Control:
If a Change of Control Event has occurred and is continuing, the
Issuer may elect to redeem all, but not some only, of the relevant
Securities at any time at their principal amount together with any
accrued and unpaid interest up to (but excluding) the redemption
date and any outstanding Arrears of Interest.
Substitution or Variation instead
The Issuer may, upon the occurrence of an Accounting Event, a
of Special Event Redemption:
Capital Event, a Tax Event or a Withholding Tax Event, at any time,
without the consent of the Holders, either (i) substitute all, but not
some only, of the Securities for, or (ii) vary the terms of the Securities
with the effect that they remain or become, as the case may be,
Qualifying Securities, in each case in accordance with Condition 7
thereof and subject to the receipt by the Trustee of the certificate of
the directors of the Issuer referred to in Condition 8 thereof.
Event of Default:
If a default is made by the Issuer for a period of 14 days or more in
the payment of any principal or 21 days or more in the payment of
any interest, in each case in respect of any Tranche and which is due,
then the Issuer shall without notice from the Trustee be deemed to be
in default under the Trust Deed, the relevant Securities and the
Coupons and the Trustee at its sole discretion may, or shall, if so
requested by an Extraordinary Resolution of the Holders or in
writing by the Holders of at least one-quarter in principal amount of
such Securities, subject in each case to its being indemnified and/or
secured and/or prefunded to its satisfaction, institute proceedings for
the winding-up of the Issuer and/or prove in the winding-up of the
Issuer and/or claim in the liquidation of the Issuer for such payment
and/or give notice to the Issuer that such Securities are, and they shall
immediately thereby become, due and payable at their principal
amount together with any accrued and unpaid interest up to (but
excluding) such date and any outstanding Arrears of Interest.
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Additional Amounts:
Payments in respect of the Securities shall be made free and clear of,
and without withholding or deduction for, or on account of, taxes of
the United Kingdom, unless such withholding or deduction is
required by law. In the event that any such withholding or
deduction is made, additional amounts may be payable by the
Issuer, subject to certain exceptions as are more fully described under
``Terms and Conditions of the Euro Securities -- Taxation'' and
``Terms and Conditions of the Sterling Securities -- Taxation'',
respectively.
Replacement Intention:
The Issuer intends (but is not obliged to ensure) that, to the extent
that the relevant Securities provide the Issuer with ``equity credit''
for rating purposes by any Rating Agency immediately prior to any
redemption effected in accordance with the relevant Conditions, it
will repay the principal amount of such Securities to be so redeemed
with the net proceeds received by the Issuer from the issuance, within
a period of 12 months prior to the date set for such redemption, of
securities for which the Issuer will receive the same, or higher
amount of, ``equity credit'' (or such other nomenclature that the
Rating Agency may then use to describe the degree to which an
instrument exhibits the characteristics of an ordinary share) by such
Rating Agency as at the time of such redemption.
Replacement Covenant:
The Issuer shall, in a separate agreement, covenant in favour of the
holders of a class of outstanding long-term unsecured debt
instruments issued (directly or indirectly) by the Issuer and
selected by it from time to time (the ``Covered Debt'') that, from
the first business day following, but not including, the First Call Date
and until the termination of such agreement (in any event on the first
business day immediately following the Interest Payment Date
falling in October 2040 or (subject to certain conditions) earlier), the
Issuer shall not redeem any of the Securities except with the net
proceeds from the issuance, within a period of 12 months prior to the
date set for such redemption, of securities for which the Issuer will
receive the same, or higher amount of, ``equity credit'' (or such other
nomenclature that the Rating Agency may then use to describe the
degree to which an instrument exhibits the characteristics of an
ordinary share) by the relevant Rating Agency at the time of such
redemption, subject to certain exceptions. This places certain
restrictions on the Issuer's ability to redeem the relevant Securities
after the First Call Date, notwithstanding any other provisions in the
Conditions, all as more fully described in ``General Information''.
Form:
The Securities will be in bearer form and each Tranche will initially
be represented by a Temporary Global Security, without interest
coupons or talons, which will be deposited with a common depositary
on behalf of Euroclear and Clearstream, Luxembourg on or about
the Issue Date. Each Temporary Global Security will be
exchangeable for interests in a Permanent Global Security, without
interest coupons or talons, on or after a date which is expected to be
30 October 2010, upon certification as to non-U.S. beneficial
ownership. Each Permanent Global Security will be exchangeable
for definitive Securities in bearer form in the denominations of (i)
A50,000 and integral multiples of A1,000 in excess thereof up to, and
including, A99,000 in respect of the Euro Securities and (ii) £50,000
and integral multiples of £1,000 in excess thereof up to, and including,
£99,000 in respect of the Sterling Securities, in each case in the
limited circumstances set out in it. No definitive Securities will be
issued with a denomination above A99,000 in respect of the Euro
Securities and above £99,000 in respect of the Sterling Securities. See
``Summary of Provisions relating to the Securities while in
Global Form''.
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Denominations:
A50,000 and integral multiples of A1,000 in excess thereof up to, and
including, A99,000 in respect of the Euro Securities and £50,000 and
integral multiples of £1,000 in excess thereof up to, and including,
£99,000 in respect of the Sterling Securities.
Listing and Admission to
Applications will be made to the UK Listing Authority for the
Trading:
Securities to be admitted to the Official List and to the London Stock
Exchange for such Securities to be admitted to trading on the
Market.
Governing Law:
English law save for certain provisions relating to subordination
which shall be governed by Scots law.
Ratings:
The Securities are expected to be rated BBB by Standard & Poor's
and Baa2 by Moody's. A rating is not a recommendation to buy, sell
or hold securities and may be subject to suspension, reduction or
withdrawal at any time by the assigning rating agency.
Use of Proceeds:
The net proceeds of the issue of the Securities will be applied by the
Issuer for general corporate purposes.
Selling Restrictions:
The United States, the United Kingdom and Japan. See
``Subscription and Sale''.
Category 2 selling restrictions will apply for the purposes of
Regulation S under the Securities Act.
Risk Factors:
Prospective investors should carefully consider the information set
out in ``Risk Factors'' in conjunction with the other information
contained or incorporated by reference in this Prospectus.
ISIN:
XS0541656509 in respect of the Euro Securities and XS0540658688 in
respect of the Sterling Securities.
Common Code:
054165650 in respect of the Euro Securities and 054065868 in respect
of the Sterling Securities.
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Document Outline