Bond Emirates NBD Bank 6.375% ( XS1111114135 ) in USD

Emirates NBD Bank

100 % ⇌

United Arab Emirates

XS1111114135 ( in USD )

6.375% per year ( payment 2 times a year)

Perpetual

Prospectus brochure of the bond Emirates NBD XS1111114135 en USD 6.375%, maturity Perpetual

17/03/2026 ( In 35 days )

Emirates NBD is a leading banking group in the Middle East, offering a wide range of financial services including personal and corporate banking, investment banking, and wealth management across multiple countries.

The Bond issued by Emirates NBD Bank ( United Arab Emirates ) , in USD, with the ISIN code XS1111114135, pays a coupon of 6.375% per year.
The coupons are paid 2 times per year and the Bond maturity is Perpetual

EMIRATES NBD 2014 TIER 1 LIMITED
(incorporated as an exempted company with limited liability in the Cayman Islands)
U.S.$500,000,000 Perpetual Tier 1 Capital Securities
irrevocably guaranteed by
EMIRATES NBD PJSC
(incorporated with limited liability in the United Arab Emirates)
The U.S.$500,000,000 Perpetual Tier 1 Capital Securities (the ``Capital Securities'') shall be issued by
Emirates NBD 2014 Tier 1 Limited (the ``Issuer'') on 17 September 2014 (the ``Issue Date''). The
payments of all amounts due in respect of the Capital Securities will be irrevocably guaranteed (the
``Guarantee'') by Emirates NBD PJSC (``ENBD'' and, in its capacity as the guarantor, the ``Guarantor'')
under a deed of guarantee dated the Issue Date (the ``Deed of Guarantee''). The Guarantee is
subordinated to substantially all of the Guarantor's other obligations, including in respect of ordinarily
subordinated debt instruments.
Interest Payment Amounts (as defined herein) shall be payable subject to and in accordance with
``Terms and Conditions of the Capital Securities'' (the ``Conditions'') on the outstanding principal
amount of the Capital Securities from (and including) the Issue Date to (but excluding) 17 September
2020 (the ``First Call Date'') at a rate of 6.375 per cent. per annum. If the Capital Securities are not
redeemed or purchased and cancelled in accordance with the Conditions on or prior to the First Call
Date, Interest Payment Amounts shall be payable from (and including) the First Call Date subject to and
in accordance with the Conditions at a fixed rate, to be reset on the First Call Date and every six years
thereafter, equal to the Relevant Six Year Reset Rate (as defined in the Conditions) plus a margin of
4.237 per cent. per annum. Interest Payment Amounts will (subject to the occurrence of a Non-
Payment Event (as defined in, and as more particularly provided in, Condition 7.1 (Interest Restrictions
Non-Payment Event)) be payable semi-annually in arrear on 17 March and 17 September in each year,
commencing on 17 March 2015 (each, an ``Interest Payment Date''). Payments on the Capital
Securities will be made without deduction for, or on account of, taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature, imposed or levied by or on behalf of any Relevant
Jurisdiction (as defined herein) (the ``Taxes'') to the extent described under Condition 12 (Taxation). All
payments by the Issuer in respect of the Capital Securities and by the Guarantor under the Guarantee
shall be conditional upon satisfaction of the Solvency Conditions (as defined in the Conditions) (as
further described in Condition 4.2 (Status, Subordination Subordination of the Capital Securities) and
Condition 4.4 (Status, Subordination Subordination of the Guarantee)). See, in particular, ``Risk Factors
The Capital Securities are subordinated and unsecured obligations of ENBD''.
The Issuer and the Guarantor may elect, and in certain circumstances shall be required, not to pay
interest falling due on the Capital Securities. Any Interest Payment Amounts not paid as aforesaid will
not accumulate and the holder of the Capital Security shall not have any claim in respect thereof.
The Capital Securities are undated and have no final maturity. Unless the Capital Securities have
previously been redeemed or purchased and cancelled as provided in the Conditions, the Capital
Securities may, at the option of the Issuer and the Guarantor, subject to the prior approval of the
Central Bank of the United Arab Emirates (the ``UAE Central Bank''), be redeemed at par (in whole but
not in part) on the First Call Date or any Interest Payment Date thereafter. In addition, the Capital
Securities may, in the event of a Tax Event or Capital Event (each as defined in the Conditions), be
redeemed (in whole but not in part) at other times, subject to the prior approval of the UAE Central
Bank.
An investment in the Capital Securities involves certain risks. For a discussion of these risks, see
``Risk Factors''.
The Capital Securities may only be offered, sold or transferred in registered form in minimum principal
amounts of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof. Delivery of the Capital
Securities in book-entry form will be made on the Issue Date. The Capital Securities will be represented
by interests in a global certificate in registered form (the ``Global Certificate'') deposited on or about
the Issue Date with, and registered in the name of a nominee for, a common depositary (the
``Common Depositary'') for Euroclear Bank SA/NV (``Euroclear'') and Clearstream Banking, socie´te´
anonyme (``Clearstream, Luxembourg''). Interests in the Global Certificate will be shown on, and
transfers thereof will be effected only through, records maintained by Euroclear and Clearstream,
Luxembourg. Individual Certificates (as defined in ``Form of the Capital Securities'') evidencing holdings
of interests in the Capital Securities will be issued in exchange for interests in the Global Certificate
only in certain limited circumstances described herein.
Application has been made to the Commission de Surveillance du Secteur Financier (the ``CSSF'') in its
capacity as competent authority under the Luxembourg Act dated 10 July 2005 on prospectuses for

securities (the ``Luxembourg Law'') to approve this document (this ``Prospectus'') as a prospectus.
The CSSF assumes no responsibility as to the economic and financial soundness of the Capital
Securities or in respect of the quality or solvency of the Issuer or ENBD pursuant to Article 7(7) of the
Luxembourg Law. Application has also been made to the Luxembourg Stock Exchange for the Capital
Securities to be admitted to trading on the Luxembourg Stock Exchange's regulated market (the
``Regulated Market'') and to be listed on the official list (the ``Official List'') of the Luxembourg Stock
Exchange.
This Prospectus has been approved by the Dubai Financial Services Authority (the ``DFSA'') under the
DFSA's Markets Rule 2.6 and is therefore an Approved Prospectus for the purposes of Article 14 of the
DFSA's Markets Law 2012. Application has also been made to the DFSA for the Capital Securities to
be admitted to the official list of securities (the ``DFSA Official List'') maintained by the DFSA and to
NASDAQ Dubai for such Capital Securities to be admitted to trading on NASDAQ Dubai.
References in this Prospectus to Capital Securities being ``listed'' (and all related references) shall mean
that: (i) the Capital Securities have been admitted to listing on the Official List and admitted to trading
on the Regulated Market which is a regulated market for the purposes of Directive 2004/39/EC (the
``Markets in Financial Instruments Directive''); and/or (ii) the Capital Securities have been admitted to
trading on NASDAQ Dubai and have been admitted to the Official List of securities maintained by the
DFSA.
The DFSA does not accept any responsibility for the content of the information included in this
Prospectus, including the accuracy or completeness of such information. The liability for the content of
this Prospectus lies with each of ENBD and the Issuer. The DFSA has also not assessed the suitability
of the Capital Securities to which this Prospectus relates to any particular investor or type of investor. If
you do not understand the contents of this Prospectus or are unsure whether the Capital Securities to
which this Prospectus relates are suitable for your individual investment objectives and circumstances,
you should consult an authorised financial advisor.
ENBD has a long term rating of A+ and a short term rating of F1 from Fitch Ratings Ltd. (``Fitch''); and
a long term rating of Baa1 and a short term rating of P-2 by Moody's Investors Service Ltd.
(``Moody's''). The United Arab Emirates has been assigned a credit rating of Aa2 by Moody's Investors
Service Singapore Pte. Ltd. (``Moody's Singapore''), which has been endorsed by Moody's in
accordance with Regulation (EC) No. 1060/2009, as amended (the ``CRA Regulation'').
Moody's Singapore is not established in the European Union and has not applied for registration under
the CRA Regulation. Each of Fitch and Moody's is established in the European Union and is registered
under the CRA Regulation. Each of Fitch and Moody's appears on the latest update of the list of
registered credit rating agencies on the European Securities and Markets Authority (``ESMA'') website
at http://www.esma.europa.eu/page/List-registered-and-certified-CRAs.
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.
Neither the Capital Securities nor the Guarantee have been, nor will be, registered under the United
States Securities Act of 1933, as amended (the ``Securities Act'') or with any securities regulatory
authority of any state or other jurisdiction of the United States and may not be offered, sold or
delivered 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 (``Regulation S'')) except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act and applicable state
securities laws. Accordingly, the Capital Securities may be offered or sold solely to persons who are not
U.S. Persons outside the United States in reliance on Regulation S. Each purchaser of the Capital
Securities is hereby notified that the offer and sale of Capital Securities to it is being made in reliance
on the exemption from the registration requirements of the Securities Act provided by Regulation S.
Joint Global Coordinators and Structuring Banks
Morgan Stanley
Standard Chartered Bank
Joint Lead Managers
Citigroup
Commerzbank
Deutsche Bank
Emirates NBD Capital
Morgan Stanley
Standard Chartered Bank
The date of this Prospectus is 16 September 2014
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IMPORTANT NOTICE
This Prospectus complies with the requirements in Part 2 of the Markets Law (DIFC Law No. 1 of
2012) and Chapter 2 of the Markets Rules and comprises a prospectus for the purposes of Article
5.3 of Directive 2003/71/EC as amended (which includes the amendment made by Directive 2010/
73/EU (the ``2010 Amending Directive'') to the extent that such amendments have been
implemented in a Relevant Member State of the European Economic Area) (the ``Prospectus
Directive'') and for the purpose of giving information with regard to the Issuer, the Guarantor and
the Capital Securities which, according to the particular nature of the Issuer and the Guarantor is
necessary to enable investors to make an informed assessment of the assets, liabilities, financial
position, profit, loss and prospects of the Issuer and the Guarantor.
Each of the Issuer and ENBD accepts responsibility for the information contained in this
Prospectus. To the best of the knowledge of each of the Issuer and ENBD (each having 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 must be read and construed together with any supplements hereto and with any
information incorporated by reference herein (see ``Documents Incorporated by Reference'').
Certain information contained in ``Risk Factors'', ``Description of Emirates NBD PJSC ENBD's
Competition'', ``Overview of the UAE and the Emirate of Dubai'' and ``The United Arab Emirates
Banking and Financial Services System'' (as indicated therein) has been extracted from
independent, third party sources. Each of the Issuer and ENBD confirms that all third party
information contained in this Prospectus has been accurately reproduced and that, as far as it is
aware and is able to ascertain from information published by the relevant, third party sources, no
facts have been omitted which would render the reproduced information inaccurate or misleading.
The source of any third party information contained in this Prospectus is stated where such
information appears in this Prospectus.
The Joint Lead Managers have not independently verified the information contained herein.
Accordingly, no representation, warranty or undertaking, express or implied, is made and no
responsibility or liability is accepted by the Joint Lead Managers as to the accuracy or
completeness of the information contained or incorporated in this Prospectus or any other
information provided by any of the Issuer or ENBD in connection with the issuance of the Capital
Securities. No Joint Lead Manager accepts any liability in relation to the information contained or
incorporated by reference in this Prospectus or any other information provided by any of the
Issuer or ENBD in connection with the issuance of the Capital Securities.
No person is or has been authorised by the Issuer or ENBD to give any information or to make
any representation not contained in or not consistent with this Prospectus or any other information
supplied in connection with the issuance of the Capital Securities and, if given or made, such
information or representation must not be relied upon as having been authorised by the Issuer or
ENBD or any of the Joint Lead Managers.
Neither this Prospectus nor any other information supplied in connection with the issuance of the
Capital Securities: (i) is intended to provide the basis of any credit or other evaluation; or (ii) should
be considered as a recommendation by the Issuer, ENBD or any of the Joint Lead Managers that
any recipient of this Prospectus or any other information supplied in connection with the issuance
of the Capital Securities should purchase any Capital Securities. Each investor contemplating
purchasing any Capital Securities should make its own independent investigation of the financial
condition and affairs, and its own appraisal of the creditworthiness, of the Issuer and ENBD.
Neither this Prospectus nor any other information supplied in connection with the issuance of the
Capital Securities constitutes an offer or invitation by or on behalf of the Issuer or ENBD or any of
the Joint Lead Managers to any person to subscribe for or to purchase any Capital Securities.
Neither the delivery of this Prospectus nor the offering, sale or delivery of any Capital Securities
shall in any circumstances imply that the information contained herein concerning the Issuer or
ENBD is correct at any time subsequent to the date hereof or that any other information supplied
in connection with the issuance of the Capital Securities is correct as of any time subsequent to
the date indicated in the document containing the same. The Joint Lead Managers expressly do
not undertake to review the financial condition or affairs of any of the Issuer or ENBD during the
life of the issuance or to advise any investor in the Capital Securities of any information coming to
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their attention. Investors should review, inter alia, the most recently published documents
incorporated by reference into this Prospectus when deciding whether or not to purchase any
Capital Securities.
The Capital Securities have not been and will not be registered under the Securities Act and are
subject to U.S. tax law requirements. Subject to certain exceptions, Capital Securities may not be
offered, sold or delivered within the United States or to, or for the account or benefit of, U.S.
Persons (see ``Subscription and Sale'').
This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any
Capital Securities in any jurisdiction to any person to whom it is unlawful to make the offer or
solicitation in such jurisdiction. The distribution of this Prospectus and the offer or sale of Capital
Securities may be restricted by law in certain jurisdictions. The Issuer, ENBD and the Joint Lead
Managers do not represent that this Prospectus may be lawfully distributed, or that any 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 Issuer, ENBD or the Joint Lead Managers which is intended to permit a public
offering of any Capital Securities or distribution of this Prospectus 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 Prospectus 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
Prospectus or any Capital Securities may come must inform themselves about, and observe, any
such restrictions on the distribution of this Prospectus and the offering and sale of Capital
Securities. In particular, there are restrictions on the distribution of this Prospectus and the offer or
sale of Capital Securities in Hong Kong, the United States, the United Kingdom, Japan, the United
Arab Emirates (excluding the Dubai International Financial Centre), the Dubai International Financial
Centre, the Kingdom of Saudi Arabia, the Kingdom of Bahrain, the State of Qatar (excluding the
Qatar Financial Centre) and the Cayman Islands (see ``Subscription and Sale'').
This Prospectus has not been submitted for clearance to the Autorite´ des marche´s financiers in
France.
Certain figures and percentages included in this Prospectus have been subject to rounding
adjustments. Accordingly, figures shown in the same category presented in different tables may
vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of
the figures which precede them.
All references in this document to ``U.S. dollars'', ``U.S.$ `` and ``$'' refer to United States
dollars, to ``Dirham'' and ``AED'' refer to United Arab Emirates Dirham and all references to
``euro'' and ``g'' refer to the 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. In addition, all references in this Prospectus to ``UAE'' are to the United Arab Emirates
and all references to ``Emirate'' are to an Emirate of the UAE.
This Prospectus includes forward-looking statements. All statements other than statements of
historical facts included in this Prospectus may constitute forward-looking statements. Forward-
looking statements generally can be identified by the use of forward-looking terminology, such as
``may'', ``will'', ``expect'', ``intend'', ``estimate'', ``anticipate'', ``believe'', ``continue'' or similar
terminology. Although the Issuer and ENBD believe that the expectations reflected in their
forward-looking statements are reasonable at this time, there can be no assurance that these
expectations will prove to be correct.
The Capital Securities may not be a suitable investment for all investors. Each potential investor in
the Capital Securities must determine the suitability of that investment in light of its own
circumstances. In particular, each potential investor should:
(a)
have sufficient knowledge and experience to make a meaningful evaluation of the Capital
Securities, the merits and risks of investing in the Capital Securities and the information
contained or incorporated by reference in this Prospectus or any applicable supplement;
(b)
have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of
its particular financial situation, an investment in the Capital Securities and the impact the
Capital Securities will have on its overall investment portfolio;
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(c)
have sufficient financial resources and liquidity to bear all of the risks of an investment in the
Capital Securities, including Capital Securities with principal or interest payable in one or more
currencies, or where the currency for principal or interest payments is different from the
potential investor's currency;
(d)
understand thoroughly the terms of the Capital Securities and be familiar with the behaviour
of any relevant indices and financial markets; and
(e)
be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for
economic, interest rate and other factors that may affect its investment and its ability to bear
the applicable risks.
The Capital Securities are complex financial instruments. Sophisticated institutional investors
generally do not purchase complex financial instruments as stand-alone investments. They
purchase complex financial instruments as a way to reduce risk or enhance yield with an
understood, measured, appropriate addition of risk to their overall portfolios. A potential investor
should not invest in the Capital Securities unless it has the expertise (either alone or with a
financial adviser) to evaluate how the Capital Securities will perform under changing conditions, the
resulting effects on the value of the Capital Securities and the impact this investment will have on
the potential investor's overall investment portfolio.
Legal investment considerations may restrict certain investments. The investment activities of
certain investors are subject to legal investment laws and regulations, or review or regulation by
certain authorities. Each potential investor should consult its legal advisers to determine whether
and to what extent: (a) the Capital Securities are legal investments for it; (b) the Capital Securities
can be used as collateral for various types of borrowing; and (c) other restrictions apply to its
purchase or pledge of any Capital Securities. Financial institutions should consult their legal
advisers or the appropriate regulators to determine the appropriate treatment of Capital Securities
under any applicable risk based capital or similar rules.
STABILISATION
In connection with the issue of the Capital Securities, Standard Chartered Bank (the ``Stabilisation
Manager'') (or persons acting on behalf of the Stabilisation Manager) may over-allot Capital
Securities 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. However, there is no
assurance that the Stabilisation Manager (or persons acting on behalf of a Stabilisation Manager)
will undertake stabilisation action. Any stabilisation action or over-allotment may begin on or after
the date on which adequate public disclosure of the terms of the offer of the Capital Securities is
made and, if begun, may be ended at any time, but it must end no later than the earlier of thirty
(30) days after the issue date of the Capital Securities and sixty (60) days after the date of the
allotment of the Capital Securities. Any stabilisation action or over-allotment must be conducted by
the Stabilisation Manager (or persons acting on behalf of any Stabilisation Manager) in accordance
with all applicable laws and rules.
KINGDOM OF SAUDI ARABIA NOTICE
This Prospectus may not be distributed in the Kingdom of Saudi Arabia except to such persons as
are permitted under the Offers of Securities Regulations issued by the Capital Market Authority of
the Kingdom of Saudi Arabia (the ``Capital Market Authority'').
The Capital Market Authority does not make any representations as to the accuracy or
completeness of this Prospectus, and expressly disclaims any liability whatsoever for any loss
arising from, or incurred in reliance upon, any part of this Prospectus. Prospective purchasers of
the Capital Securities should conduct their own due diligence on the accuracy of the information
relating to the Capital Securities. If a prospective purchaser does not understand the contents of
this Prospectus they should consult an authorised financial adviser.
CAYMAN ISLANDS NOTICE
No invitation may be made to any member of the public of the Cayman Islands to subscribe for
the Capital Securities.
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NOTICE TO RESIDENTS OF THE KINGDOM OF BAHRAIN
In relation to investors in the Kingdom of Bahrain, securities issued in connection with this
Prospectus and related offering documents may only be offered in registered form to existing
account holders and accredited investors as defined by the Central Bank of Bahrain (``CBB'') in the
Kingdom of Bahrain where such investors make a minimum investment of at least U.S.$100,000
or any equivalent amount in other currency or such other amount as the CBB may determine.
This Prospectus does not constitute an offer of securities in the Kingdom of Bahrain in terms of
Article (81) of the Central Bank and Financial Institutions Law 2006 (decree Law No. 64 of 2006).
This Prospectus and related offering documents have not been and will not be registered as a
prospectus with the CBB. Accordingly, no securities may be offered, sold or made the subject of
an invitation for subscription or purchase nor will this Prospectus or any other related document or
material be used in connection with any offer, sale or invitation to subscribe or purchase
securities, whether directly or indirectly, to persons in the Kingdom of Bahrain, other than to
accredited investors for an offer outside the Kingdom of Bahrain.
The CBB has not reviewed, approved or registered this Prospectus or related offering documents
and it has not in any way considered the merits of the securities to be offered for investment,
whether in or outside the Kingdom of Bahrain. Therefore, the CBB assumes no responsibility for
the accuracy and completeness of the statements and information contained in this Prospectus
and expressly disclaims any liability whatsoever for any loss howsoever arising from reliance upon
the whole or any part of the content of this Prospectus. No offer of securities will be made to the
public in the Kingdom of Bahrain and this Prospectus must be read by the addressee only and
must not be issued, passed to, or made available to the public generally.
NOTICE TO RESIDENTS OF THE STATE OF QATAR
This Prospectus does not and is not intended to constitute an offer, sale or delivery of the Capital
Securities under the laws of the State of Qatar and has not been and will not be reviewed or
approved by or registered with the Qatar Financial Markets Authority, the Qatar Financial Centre
Regulatory Authority, the Qatar Central Bank or the Qatar Exchange. The Capital Securities are not
and will not be traded on the Qatar Exchange.
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CONTENTS
Page
RISK FACTORS ...........................................................................................................................
1
DOCUMENTS INCORPORATED BY REFERENCE......................................................................
17
OVERVIEW OF THE ISSUANCE .................................................................................................
18
FORM OF THE CAPITAL SECURITIES .......................................................................................
22
TERMS AND CONDITIONS OF THE CAPITAL SECURITIES ......................................................
25
THE GUARANTEE .......................................................................................................................
45
USE OF PROCEEDS ...................................................................................................................
52
DESCRIPTION OF EMIRATES NBD PJSC ..................................................................................
53
MANAGEMENT OF EMIRATES NBD PJSC................................................................................
77
DESCRIPTION OF EMIRATES NBD 2014 TIER 1 LIMITED........................................................
83
OVERVIEW OF THE UAE AND THE EMIRATE OF DUBAI.........................................................
84
THE UNITED ARAB EMIRATES BANKING AND FINANCIAL SERVICES SYSTEM ....................
98
TAXATION ...................................................................................................................................
107
SUBSCRIPTION AND SALE ........................................................................................................
112
GENERAL INFORMATION ..........................................................................................................
115
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RISK FACTORS
Each of the Issuer and ENBD believes that the following factors may affect their ability to fulfil their
obligations under the Capital Securities or under the Guarantee, respectively. All of these factors are
contingencies which may or may not occur and neither the Issuer nor ENBD is in a position to express a
view on the likelihood of any such contingency occurring.
In addition, factors which are material for the purpose of assessing the market risks associated with the
Capital Securities are also described below.
If any of the risks described below actually materialise, the Issuer's and/or ENBD's business, results of
operations, financial condition or prospects could be materially and adversely affected. If that were to
occur, the trading price of the Capital Securities could decline and investors could lose all or part of their
investment.
Each of the Issuer and ENBD believes that the factors described below represent all the material risks
inherent in investing in the Capital Securities, but the inability of either the Issuer or ENBD to pay
interest, principal or other amounts on or in connection with any Capital Securities or to pay any amount
in respect of the Guarantee, respectively, may occur for other reasons which may not be considered
significant risks by the Issuer and/or ENBD based on information currently available to them or which
they may not currently be able to anticipate and neither the Issuer nor ENBD represents that the
statements below regarding the risks of holding any Capital Securities are exhaustive. Prospective
investors should also read the detailed information set out elsewhere in this Prospectus and reach their
own views prior to making any investment decision.
Words and expressions defined in ``Form of the Capital Securities'' and ``Terms and Conditions of the
Capital Securities'' shall have the same meanings in this section.
Factors that may affect the Issuer's ability to fulfil its obligations under the Capital Securities
The Issuer has a limited operating history and no material assets
At the date of this Prospectus, the Issuer is an exempted company with limited liability,
incorporated under the laws of the Cayman Islands on 7 May 2014 and has a limited operating
history. The Issuer will not engage in any business activity other than the issuance of the Capital
Securities, the issuance of shares in its capital and other activities incidental or related to the
foregoing. The Issuer is not expected to have any income except payments received from ENBD,
which will be the only material sources of funds available to meet the claims of the holders of the
Capital Securities. As a result, the Issuer is subject to all of the risks to which ENBD is subject, to
the extent that such risk could limit ENBD's ability to satisfy in full and on a timely basis its
obligations to the Issuer under the Guarantee.
As the Issuer is a Cayman Islands company, it may not be possible for holders of the Capital
Securities to effect service of process outside of the Cayman Islands.
Factors that may affect ENBD's ability, in its capacity as Guarantor, to fulfil its obligations under
the Capital Securities and/or the Guarantee
Principal shareholder and governmental interests
As at the date of this Prospectus, the Government of Dubai (the ``Government'') indirectly holds
55.6 per cent. of the total issued share capital of ENBD. Investment Corporation of Dubai (``ICD''),
which is wholly-owned by the Government, holds shares in ENBD directly. However, the
Government does not explicitly or implicitly guarantee the financial obligations of ENBD (including
in respect of the Capital Securities and the Guarantee) nor does it, like any other shareholder
(acting through ICD), have any legal obligation to provide any support or additional funding for any
of ENBD's future operations.
Investors should also be aware that in June 2009, Emirates Bank International PJSC issued AED
4 billion of Tier 1 securities to ICD in order to help satisfy the requirements of the UAE Central
Bank. Following the amalgamation of EBI and National Bank of Dubai PJSC (``NBD'') with ENBD,
described further at ``Description of Emirates NBD PJSC'' below, ENBD is now considered to be
the issuer of the securities.
However, notwithstanding the Tier 1 securities issued to ICD described in the previous paragraph,
the funding support received from the UAE Federal Government during the difficult period of the
global financial crisis that occurred from late 2008 to early 2009 and the conversion of AED
12.6 billion of deposits from the UAE Federal Government with ENBD into Tier 2 capital in March
2009, of which AED 7.8 billion has been repaid in 2013 (see `` Capital Adequacy'' under
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``Description of Emirates NBD PJSC'' below), neither the Government nor the UAE Federal
Government are under any obligation to continue to invest in, make deposits with, do business
with or otherwise support ENBD. The Government and the UAE Federal Government may,
whether directly or through government-owned entities, at any time and for any reason, dispose of
its investments in, withdraw its deposits from, cease to do business with or otherwise cease to
support ENBD. The reduction or elimination of governmental support could have a material adverse
effect on the business, results of operations, financial condition and prospects of ENBD.
Competition
ENBD faces high levels of competition for all products and services. ENBD competes primarily
with a large number of other domestic banks in the UAE, some of which are also owned, directly
or indirectly, by the governments of the relevant Emirates, government-related entities or
members of the ruling families of the relevant Emirates. As at the date of this Prospectus, there
were a total of 51 banks registered in the UAE (source: the UAE Central Bank). ENBD's main
domestic competitors in terms of size of banking franchise and product and customer segments
are the Abu Dhabi Commercial Bank PJSC, National Bank of Abu Dhabi, First Gulf Bank, Dubai
Islamic Bank, Mashreqbank, Union National Bank, Abu Dhabi Islamic Bank and HSBC. Among
banks in the UAE market, as at 31 December 2013, ENBD ranked first by total assets (Source:
Bank Financial Statements and Press Releases for FY 2013, Bloomberg). However, there can be
no assurance that ENBD will be able to maintain this ranking in the future.
In addition to the local commercial banks in the UAE, ENBD competes with a number of
international banks in investment advisory, investment banking, corporate advisory, finance and
other services. In the large corporate and government client segments, ENBD faces competition
from international banks and such competition is expected to increase in the UAE over time.
Although ENBD seeks to cooperate with some of the top-tier international banks, especially in
securities underwriting and distribution, it will also compete with them in other areas, particularly
in corporate advisory and treasury operations in which these banks have a long history of
successful operations in other regions.
Further, although the UAE could be viewed as an over-banked market, even by regional standards,
there has traditionally been little impetus for consolidation (see ``The United Arab Emirates Banking
and Financial Services System Principal Banks in Dubai Characteristics of the Banking
System'').
In addition, the UAE's membership of the World Trade Organisation will require greater economic
liberalisation, which may lead to increased competition for ENBD in the future. If ENBD is unable
to compete successfully, it could adversely impact ENBD's business, results of operations,
financial condition and prospects.
Foreign exchange movements may adversely affect the profitability of ENBD
ENBD maintains its accounts and reports its results in AED. The UAE dirham has been pegged at
a fixed exchange rate to the U.S. dollar since 22 November 1980. ENBD is exposed to the
potential impact of any alteration to or abolition of this foreign exchange peg.
Majority of business in the UAE
ENBD has the majority of its operations and assets in the UAE and accordingly its business may
be affected by the financial, political and general economic conditions prevailing from time to time
in the UAE and/or the Middle East generally.
These markets are subject to greater risks than more developed markets, including in some cases
significant legal, economic and political risks. Accordingly, investors should exercise particular care
in evaluating the risks involved and must decide for themselves whether, in the light of those
risks, their investment is appropriate. Generally, investment is only suitable for sophisticated
investors who fully appreciate the significance of the risks involved (see also `` Risk factors
relating to the UAE and the Middle East Political, economic and related considerations'' below).
Importance of key personnel
ENBD's ability to maintain and grow its business will depend, in part, on its ability to continue to
recruit and retain qualified and experienced banking and management personnel. ENBD may face
challenges in recruiting and retaining qualified personnel to manage its business from time to time
and, if it is to continue to grow, will need to continue to increase its employee numbers.
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Additionally, the UAE Federal Government has a recommended policy that companies operating in
the UAE recruit UAE nationals representing at least 4 per cent. of their total employees each year.
In common with other banks in the UAE, ENBD experiences a shortage of, and competition to
recruit and retain, qualified UAE national employees. If ENBD is unable to meet or exceed the
UAE Federal Government's recommended policy for recruiting UAE nationals, it may be subject to
legal penalties including with respect to its current licences, and may be prevented from obtaining
additional licences necessary in order to allow it to expand its business. Due to UAE federal labour
laws, ENBD may also face difficulties that could delay or prevent dismissal of underperforming
UAE national employees.
While ENBD currently meets the UAE Federal Government's ``Emiratisation'' requirements (in
particular, see ``Management of Emirates NBD PJSC Emiratisation'') and believes that it has
effective staff recruitment, training and incentive programmes in place, if it was unable to retain
key members of its senior management and/or remove underperforming staff and/or hire new
qualified personnel in a timely manner, this could have a material adverse effect on its business,
results of operations, financial condition and prospects.
Risks relating to the business of ENBD
In the course of its business activities, ENBD is exposed to a variety of risks, the most significant
of which are market risks, liquidity risks, credit risks and operational risks.
In the last five years in particular, difficult macro-economic and financial market conditions have
affected and could continue to materially adversely affect ENBD's business.
Market risks
Since the second half of 2007, disruptions in global capital and credit markets, coupled with the
re-pricing of credit risk and the deterioration of the real estate markets in the United States,
Europe, the UAE, the other countries of the GCC and elsewhere, have created difficult conditions
in the financial markets. These conditions have resulted in historically high levels of volatility across
many markets (including capital markets) and the failures of a number of financial institutions in
the United States and Europe. Further market disruption may be caused by certain European
countries experiencing debt servicing problems.
The countries of the GCC were affected by the global financial crisis in the second half of 2007;
however, the most significant adverse effects only impacted the region in the second half of 2008.
Since then, there has been a significant slowdown or reversal of the high growth rates that had
been experienced by many countries within the GCC and the UAE, especially in Dubai (as
described further in the next paragraph). Consequently, certain sectors of the GCC economy that
had benefited from the high rate of growth, such as real estate, construction and financial
institutions, have been materially adversely affected by the crisis.
During the second half of 2008 and into 2009, world oil prices fell by approximately 70 per cent.
with the OPEC Reference Basket price falling from its peak level of U.S.$140 per barrel in July
2008 to around U.S.$43 per barrel in February 2009, before returning to above U.S.$108 in
December 2012. According to the OPEC website, the price of the OPEC Reference Basket had a
year-end figure in 2008 of U.S.$94.45 per barrel, a year-end figure in 2009 of U.S.$61.06 per
barrel, a year-end figure in 2010 of U.S.$77.45 per barrel, a year-end figure in 2011 of U.S.$107.46
per barrel, a year-end figure in 2012 of U.S.$109.45 per barrel and a year-end figure in 2013 of
U.S.$105.87 per barrel. Oil prices remain volatile and have the potential to adversely affect the
UAE economy in the future. In addition, the credit crisis in the global financial markets, which was
particularly acute in 2008 and 2009, and the resultant deterioration in the global economic outlook
led to a general reduction in liquidity and available financing and generally increased financing
costs. These events affected Dubai and the UAE in a number of ways. First, gross domestic
product (``GDP'') was adversely affected in 2009 reflecting the significant contributions of the oil
and gas sector to the UAE's GDP and, in the case of Dubai, through the impact of these events
on the construction and real estate sectors. Second, the UAE's trade surplus declined in 2009
reflecting the reduced value of hydrocarbon exports and its current account balance was
additionally impacted as a result of declining services receipts and lower investment income. Third,
certain ``government related entities'' wholly or substantially owned by the Government have
suffered from asset value deterioration and limited cash flow. Although Dubai enjoys a relatively
diverse economy, with the oil sector accounting for less than 1.5 per cent. of Dubai's GDP in
2012, any significant impact on international oil prices may have a negative impact on regional
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