Bond Deutsche Pfandbriefinstitut 5.75% ( XS1808862657 ) in EUR

Deutsche Pfandbriefinstitut

96.43 % ▲

Germany

XS1808862657 ( in EUR )

5.75% per year ( payment 1 time a year)

Perpetual

Prospectus brochure of the bond Deutsche Pfandbriefbank XS1808862657 en EUR 5.75%, maturity Perpetual

28/04/2026 ( In 77 days )

Deutsche Pfandbriefbank (pbb) is a German publically traded bank specializing in commercial real estate finance, public sector finance, and covered bonds (Pfandbriefe).

The Bond issued by Deutsche Pfandbriefinstitut ( Germany ) , in EUR, with the ISIN code XS1808862657, pays a coupon of 5.75% per year.
The coupons are paid 1 time per year and the Bond maturity is Perpetual

Deutsche Pfandbriefbank AG
Munich
(hereinafter also referred to as Deutsche Pfandbriefbank, pbb or Issuer)
EUR 300,000,000 Undated Non-Cumulative Fixed to Reset
Rate Additional Tier 1 Notes of 2018
pbb will issue on 19 April 2018 (the Issue Date) EUR 300,000,000 undated non-cumulative fixed to reset rate Additional Tier 1 notes of
2018 (the Notes). The issue price of the Notes is 100.00 per cent. of their principal amount (the Issue Price).
The Notes will bear interest on their aggregate principal amount at the applicable Rate of Interest (as defined in the terms and conditions of
the Notes set out in the section "4. Conditions of Issue") from (and including) 19 April 2018 (the Interest Commencement Date) to (but
excluding) the day on which the Notes are due for redemption. The applicable Rate of Interest for the period from the Interest
Commencement Date to 28 April 2023 (being the first Reset Date (as defined in the terms and conditions of the Notes) and the first date on
which the Notes may be redeemed at the option of the Issuer other than for tax or regulatory reasons and hereinafter referred to as the First
Redemption Date) will be a fixed rate of 5.750 per cent. per annum; thereafter, the applicable Rate of Interest will be reset at five year
intervals on the basis of the then prevailing 5-Year EUR Mid Swap Rate (as defined in the terms and conditions of the Notes) plus a margin
of 5.383 per cent. per annum. Interest is payable annually in arrear on 28 April of each year (each an Interest Payment Date), commencing
28 April 2019 (long first interest period). Payments of interest (each an Interest Payment) are subject to cancellation, in whole or in part,
and, if cancelled, are non-cumulative and Interest Payments in following years will not increase to compensate for any shortfall in Interest
Payments in any previous year. The Notes do not have a maturity date. The Notes are redeemable by the Issuer at its discretion on the First
Redemption Date and on each Reset Date thereafter or in other limited circumstances and, in each case, subject to limitations and conditions
as described in the terms and conditions of the Notes. The Redemption Amount (as defined in § 5 (6) of the terms and conditions of the
Notes) and the aggregate principal amount of the Notes may be reduced upon the occurrence of a Trigger Event (as defined and further
described in § 5 (8) (a) of the terms and conditions of the Notes).
On each Reset Date the Rate of Interest payable under the Notes is calculated by reference to the annual swap rate for swap transactions
denominated in Euro with a term of five years, which appears on the Reuters Screen Page ICESWAP2 under the heading "EURIBOR
BASIS EUR" and above the caption "11:00 AM FRANKFURT" as of 11.00 a.m. (Frankfurt time) on the relevant Interest Determination
Date, and which is provided by ICE Benchmark Administration (ICE). As at the date of this prospectus (the Prospectus), ICE does not
appear on the register of administrators and benchmarks established and maintained by the European Securities and Markets Authority
(ESMA) pursuant to Article 36 of the Benchmark Regulation (Regulation (EU) 2016/1011) (the Benchmark Regulation). As far as the
Issuer is aware, the transitional provisions in Article 51 Benchmark Regulation apply, such that ICE Benchmark Administration is not
currently required to obtain authorisation or registration. The annual swap rate for swap transactions denominated in Euro with a term of
five years, which appears on the Reuters Screen Page ICESWAP2 under the heading "EURIBOR BASIS EUR" is calculated with
reference to the Euro Interbank Offered Rate (EURIBOR), which is provided by the European Money Market Institute (EMMI). As at the
date of this Prospectus, the EMMI does not appear on the register of administrators and benchmarks established and maintained by the
ESMA pursuant to Article 36 Benchmark Regulation. As far as the Issuer is aware, the transitional provisions in Article 51 Benchmark
Regulation apply, such that the EMMI is not currently required to obtain authorisation or registration.
This Prospectus constitutes a prospectus within the meaning of Article 5.3 of the Directive 2003/71/EC of the European Parliament and of
the Council of 4 November 2003 as amended from time to time (the Prospectus Directive). This Prospectus will be published in electronic
form together with all documents incorporated by reference on the website of the Luxembourg Stock Exchange (www .bourse. lu). This

Prospectus has been approved by the Commission de Surveillance du Secteur Financier of the Grand Duchy of Luxembourg (the CSSF) in
its capacity as competent authority under the Luxembourg law of 10 July 2005 relating to prospectuses for securities, as amended (Loi du
10 juillet 2005 relative aux prospectus pour valeurs mobilières the Luxembourg Prospectus Law), which implements the Prospectus
Directive into Luxembourg law. As per Article 7(7) of the Luxembourg Prospectus Law, by approving the Prospectus the CSSF gives no
undertaking as to the economic or financial soundness of the issue of the Notes or the quality and solvency of the Issuer. Application has
been made for the Notes to be listed on the official list of the Luxembourg Stock Exchange and to be admitted to trading on the regulated
market "Bourse de Luxembourg" of the Luxembourg Stock Exchange. The regulated market of the Luxembourg Stock Exchange is a
regulated market for the purposes of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on Markets in
Financial Instruments, as amended (MiFID II).
Investing in the Notes involves certain risks. Please review the section "1. RISK FACTORS" beginning on page 1 of this Prospectus.
THESE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE SECURITIES ACT) AND MAY BE OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES OF
AMERICA TO NON-U.S. PERSONS IN OFFSHORE TRANSACTIONS IN RELIANCE ON REGULATION S UNDER THE
SECURITIES ACT.
The Notes are issued in bearer form with a denomination of EUR 200,000 each.
The Notes have been assigned the following securities codes: ISIN XS1808862657, Common Code 1808862657, WKN A2GSLH.
Structuring Adviser
UBS Investment Bank
Joint Lead Managers
Goldman Sachs International
J.P. Morgan

UBS Investment Bank
The date of this Prospectus is 17 April 2018.
DAC26954048/2 130527-0026

IMPORTANT NOTICE
Restrictions on marketing and sales to retail investors
The Notes issued pursuant to this Prospectus are complex financial instruments and are not a suitable
or appropriate investment for all investors. In some jurisdictions, regulatory authorities have adopted
or published laws, regulations or guidance with respect to the offer or sale of securities such as the
Notes to retail investors.
In particular, in June 2015, the U.K. Financial Conduct Authority (the FCA) published the Product
Intervention (Contingent Convertible Instruments and Mutual Society Shares) Instrument 2015 (the
PI Instrument). In addition, (i) on 1 January 2018, the provisions of Regulation (EU) No. 1286/2014
on key information documents for packaged and retail and insurance-based investment products
(PRIIPs) became directly applicable in all EEA member states and (ii) the Markets in Financial
Instruments Directive 2014/65/EU (as amended) (MiFID II) was required to be implemented in EEA
member states by 3 January 2018. Together the PI Instrument, PRIIPs and MiFID II are referred to as
the Regulations.
The Regulations set out various obligations in relation to (i) the manufacture and distribution of
financial instruments and the (ii) offering, sale and distribution of packaged retail and insurance-based
investment products and certain contingent write-down or convertible securities such as the Notes.
Potential investors in the Notes should inform themselves of, and comply with, any applicable laws,
regulations or regulatory guidance with respect to any resale of the Notes (or any beneficial interests
therein) including the Regulations.
The Joint Lead Managers are required to comply with some or all of the Regulations. By purchasing,
or making or accepting an offer to purchase any Notes (or a beneficial interest in the Notes) from the
Issuer and/or the Joint Lead Managers each prospective investor represents, warrants, agrees with and
undertakes to the Issuer and each of the Joint Lead Managers that:
1.
it is not a retail client (as defined in MiFID II);
2.
whether or not it is subject to the Regulations it will not:
(A)
sell or offer the Notes (or any beneficial interest therein) to retail clients (as defined in MiFID
II); or
(B)
communicate (including the distribution of the Prospectus) or approve an invitation or
inducement to participate in, acquire or underwrite the Notes (or any beneficial interests therein)
where that invitation or inducement is addressed to or disseminated in such a way that it is likely to be
received by a retail client (in each case within the meaning of the MiFID II).
In selling or offering the Notes or making or approving communications relating to the Notes you
may not rely on the limited exemptions set out in the PI Instrument; and
3.
it will at all times comply with all applicable laws, regulations and regulatory guidance
(whether inside or outside the EEA) relating to the promotion, offering, distribution and/or sale of the
Notes (or any beneficial interests therein), including (without limitation) MiFID II and any other
applicable laws, regulations and regulatory guidance relating to determining the appropriateness
and/or suitability of an investment in the Notes (or any beneficial interests therein) by investors in any
relevant jurisdiction.
Each prospective investor further acknowledges that:
DAC26954048/2 130527-0026
I-2

(i)
the identified target market for the Notes (for the purposes of the product governance
obligations in MiFID II) is eligible counterparties and professional clients; and
(ii)
no key information document (KID) under PRIIPs has been prepared and therefore offering or
selling the Notes or otherwise making them available to any retail investor in the EEA may be
unlawful under PRIIPs.
PRIIPs Regulation/Prospectus Directive/Prohibition of Sales to EEA Retail Investors The
Notes are not intended to be offered, sold or otherwise made available to and should not be offered,
sold or otherwise made available to any retail investor in the EEA. For these purposes, a retail
investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article
4(1) of MiFID II; or (ii) a customer within the meaning of Directive 2002/92/EC (IMD), where that
customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID
II. Consequently, no key information document required by the PRIIPs Regulation for offering or
selling the Notes or otherwise making them available to retail investors in the EEA has been prepared
and therefore offering or selling the Notes or otherwise making them available to any retail investor in
the EEA may be unlawful under the PRIIPs Regulation.
MiFID II product governance/Professional investors and ECPs only target market Solely for
the purposes of each manufacturer's product approval process, the target market assessment in respect
of the Notes has led to the conclusion that: (i) the target market for the Notes is eligible counterparties
and professional clients only, each as defined in MiFID II; and (ii) all channels for distribution of the
Notes to eligible counterparties and professional clients are appropriate. Any person subsequently
offering, selling or recommending the Notes (a distributor) should take into consideration the
manufacturers' target market assessment; however, a distributor subject to MiFID II is responsible for
undertaking its own target market assessment in respect of the Notes (by either adopting or refining
the manufacturers' target market assessment) and determining appropriate distribution channels.

Where acting as agent on behalf of a disclosed or undisclosed client when purchasing, or making or
accepting an offer to purchase, any Notes (or any beneficial interests therein) from the Issuer and/or
the Joint Lead Managers the foregoing representations, warranties, agreements and undertakings will
be given by and be binding upon both the agent and its underlying client.

DAC26954048/2 130527-0026
I-3

NOTICE
No person is authorized to give any information or to make any representations other than those
contained in this Prospectus and, if given or made, such information or representations must not be
relied upon as having been authorised by or on behalf of the Issuer or the Joint Lead Managers (as
defined in the section "8. Subscription and Sale of the Notes"). Neither the delivery of this Prospectus
nor any offering or sale of any Notes made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the Issuer or any of its affiliates since the
date of this Prospectus, or that the information herein is correct at any time since its date.
This Prospectus contains certain forward-looking statements, in particular statements using the words
"believes", "anticipates", "intends", "expects" or other similar terms. This applies in particular to
statements in the section "6. Description of Deutsche Pfandbriefbank AG" and statements elsewhere
in this Prospectus relating to, among other things, the future financial performance, plans and
expectations regarding developments in the business of the Issuer. These forward-looking statements
are subject to a number of risks, uncertainties, assumptions and other factors that may cause the actual
results, including the financial position and profitability of the Issuer to be materially different from or
worse than those expressed or implied by these forward-looking statements. The Issuer does not
assume any obligation to update such forward-looking statements and to adapt them to future events
or developments.
This Prospectus should be read and understood in conjunction with any supplement hereto and with
any other documents incorporated herein by reference.
To the fullest extent permitted by law, neither the Joint Lead Managers nor any other person
mentioned in this Prospectus, except for the Issuer, is responsible for the information contained in this
Prospectus or any other document incorporated herein by reference, and accordingly, and to the extent
permitted by the laws of any relevant jurisdiction, none of these persons accepts any responsibility for
the accuracy and completeness of the information contained in any of these documents. The Joint
Lead Managers have not independently verified any such information and accept no responsibility for
the accuracy thereof.
Each investor contemplating purchasing any Notes should make its own independent investigation of
the financial condition and affairs, and its own appraisal of the creditworthiness of the Issuer. This
Prospectus does not constitute an offer of Notes or an invitation by or on behalf of the Issuer or the
Joint Lead Managers to purchase any Notes. Neither this Prospectus nor any other information
supplied in connection with the Notes should be considered as a recommendation by the Issuer or the
Joint Lead Managers to a recipient hereof and thereof that such recipient should purchase any Notes.
This Prospectus does not constitute, and may not be used for the purposes of, an offer or solicitation
by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to
whom it is unlawful to make such offer or solicitation.
The offer, sale and delivery of the Notes and the distribution of this Prospectus in certain jurisdictions
are restricted by law. Persons into whose possession this Prospectus comes are required by the Issuer
and the Joint Lead Managers to inform themselves about and to observe any such restrictions. In
particular, the Notes have not been and will not be registered under the United States Securities Act of
1933, as amended (the Securities Act) and are subject to U.S. tax law requirements. Subject to certain
limited exceptions, the Notes may not be offered, sold or delivered within the United States of
America (United States) or to U.S. persons. For a further description of certain restrictions on
offerings and sales of the Notes and distribution of this Prospectus (or of any part thereof) see the
section "8. Subscription and Sale of the Notes".
DAC26954048/2 130527-0026
I-4

IN CONNECTION WITH THE ISSUE OF THE NOTES, UBS INVESTMENT BANK (THE
STABILISING MANAGER) (OR PERSONS ACTING ON BEHALF OF THE STABILISING
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, STABILISATION MAY
NOT NECESSARILY OCCUR. ANY STABILISATION ACTION MAY BEGIN ON OR
AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE TERMS OF
THE OFFER OF THE NOTES IS MADE AND, IF BEGUN, MAY CEASE AT ANY TIME,
BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE
DATE OF THE NOTES AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE
NOTES. ANY STABILISATION OR OVER-ALLOTMENT MUST BE CONDUCTED BY
THE STABILISING MANAGER (OR PERSONS ACTING ON BEHALF OF THE
STABILISING MANAGER) IN ACCORDANCE WITH ALL APPLICABLE LAWS AND
RULES.
In this Prospectus all references to , EUR or Euro are to the currency introduced at the start of the
third stage of the European economic and monetary union, and as defined in Article 2 of Council
Regulation (EC) No. 974/98 of 3 May 1998 on the introduction of the Euro, as amended. References
to USD, U.S. dollars, dollar and $ are to United States currency, and the terms United States and U.S.
mean the United States of America, its states, its territories, its possessions and all areas subject to its
jurisdiction.
To supplement the Issuer's consolidated financial statements presented in accordance with the
International Financial Reporting Standards (IFRS), the Issuer uses certain ratios and measures
included in this Prospectus that might be considered to be "alternative performance measures" (each
an APM) as described in the ESMA Guidelines on Alternative Performance Measures (the ESMA
Guidelines) published by the European Securities and Markets Authority on 5 October 2015. The
ESMA Guidelines provide that an APM is understood as "a financial measure of historical or future
financial performance, financial position, or cash flows, other than a financial measure defined or
specified in the applicable financial reporting framework." The ESMA Guidelines also note that they
do not apply to APMs: "disclosed in accordance with applicable legislation, other than the applicable
financial reporting framework, that sets out specific requirements governing the determination of such
measures." The APMs included in this Prospectus are not alternatives to measures prepared in
accordance with the IFRS Accounting and Reporting Regulations and might be different from
similarly titled measures reported by other companies. The Issuer's management believes that this
information, when considered in conjunction with measures reported under the IFRS Accounting and
Reporting Regulations, is useful to investors because it provides a basis for measuring the organic
operating performance in the periods presented and enhances investors' overall understanding of the
Issuer's financial performance. In addition, these measures are used in internal management of the
Issuer, along with financial measures reported under the IFRS Accounting and Reporting Regulations,
in measuring the Issuer's performance and comparing it to the performance of its competitors. In
addition, because the Issuer has historically reported certain APMs to investors, the Issuer's
management believes that the inclusion of APMs in this Prospectus provides consistency in the
Issuer's financial reporting and thus improves investors' ability to assess the Issuer's trends and
performance over multiple periods. APMs should not be considered in isolation from, or as a
substitute for, financial information presented in compliance with the IFRS Accounting and Reporting
Regulations.

DAC26954048/2 130527-0026
I-5

OVERVIEW OF THE NOTES.................................................................................................. 1
1.
RISK FACTORS .......................................................................................................... 1
2.
RESPONSIBILITY STATEMENT ............................................................................ 46
3.
USE OF PROCEEDS ................................................................................................. 47
4.
CONDITIONS OF ISSUE .......................................................................................... 48
5.
INTEREST PAYMENTS AND AVAILABLE DISTRIBUTABLE ITEMS OF THE
ISSUER; POTENTIAL WRITE-DOWN AND COMMON EQUITY TIER 1
CAPITAL RATIO OF THE ISSUER; REGULATORY CAPITAL STRUCTURE OF
THE ISSUER AND PBB GROUP ............................................................................. 85
6.
DESCRIPTION OF DEUTSCHE PFANDBRIEFBANK AG ................................... 90
7.
TAXATION .............................................................................................................. 106
8.
SUBSCRIPTION AND SALE OF THE NOTES ..................................................... 110
9.
GENERAL INFORMATION ................................................................................... 116
10.
DOCUMENTS INCORPORATED BY REFERENCE ........................................... 118
11.
NAMES AND ADDRESSES ................................................................................... 119

DAC26954048/2 130527-0026
I-6

OVERVIEW OF THE NOTES
The following overview contains basic information about the Notes and does not purport to be complete. It
does not contain all the information that is important to making a decision to invest in the Notes. For a more
complete description of the Notes, please refer to the terms and conditions of the Notes set out in the section
"4. Conditions of Issue" of this Prospectus which, in case of any inconsistency, will prevail. For more information
on the Issuer, its business and its financial condition and results of operations, please refer to the section
"6. Description of Deutsche Pfandbriefbank AG" of this Prospectus. In addition, potential investors should
carefully review the section "1. Risk Factors" of this Prospectus. Terms used in this overview and not otherwise
defined have the meanings given to them in the terms and conditions of the Notes.
Issuer
Deutsche Pfandbriefbank AG.
Notes
EUR 300,000,000 Undated Non-cumulative Fixed to Reset Rate Additional Tier 1
Notes of 2018.
Risk Factors
There are certain factors that may affect the Issuer's ability to fulfil its obligations
under the Notes. In addition, there are certain factors that are material for the
purpose of assessing the risks associated with an investment in the Notes. These
risks are set out under the section "1. Risk Factors" of this Prospectus.
Structuring Adviser
UBS Limited, 5 Broadgate, London EC2M 2QS, United Kingdom (UBS
Investment Bank)
Joint Lead Managers
Goldman Sachs International, Peterborough Court, 133 Fleet Street, London EC4A
2BB, United Kingdom, J.P. Morgan Securities plc (J.P. Morgan), 25 Bank Street,
Canary Wharf, London E14 5JP, United Kingdom and UBS Investment Bank
Paying Agent
Citibank, N.A., London Branch, Citigroup Centre, Canada Square, Canary Wharf,
London E14 5LB, United Kingdom
Calculation Agent
Deutsche Pfandbriefbank AG, Freisinger Str. 5, 85716 Unterschleißheim, Germany
Principal Amount
EUR 300,000,000
Issue Price
100 per cent.
Issue Date of the Notes
19 April 2018
First Redemption Date
28 April 2023
Maturity
The Notes have no scheduled maturity and only provide for a redemption right of
the Issuer (see section " Redemption Right of the Issuer" below) but not for a
redemption right of the holders of the Notes (each a Holder).
Specified Denomination
EUR 200,000.00
ISIN, Common Code,
ISIN XS1808862657, Common Code 1808862657, WKN A2GSLH
DAC26954048/2 130527-0026
S-1

WKN
Use of Proceeds
The net proceeds from the issue of the Notes will be used for general corporate
purposes and to strengthen the Issuer's regulatory capital base by providing
Additional Tier 1 capital for the Issuer
Status of the Notes
The Notes constitute direct, unsecured and subordinated obligations of the Issuer,
ranking pari passu among themselves and (subject to the subordination provision
set out in the following sentence and the final paragraph of this section " Status of
the Notes") pari passu with all other subordinated obligations of the Issuer but
senior to obligations of the Issuer under Common Equity Tier 1 instruments and
under instruments which, pursuant to their terms or mandatory provisions of law
rank pari passu with Common Equity Tier 1 instruments. In the event of resolution
measures imposed on the Issuer and in the event of the dissolution, liquidation,
insolvency, composition or other proceedings for the avoidance of insolvency of, or
against, the Issuer, the obligations under the Notes shall be fully subordinated to
(i)
the claims of creditors of the Issuer that are unsubordinated (including
claims against the Issuer under its senior non-preferred debt instruments
within the meaning of § 46f (6) sentence 1 of the German Banking Act
(Kreditwesengesetz KWG) or any successor provision thereto),
(ii)
the claims under Tier 2 instruments and under instruments which, pursuant
to their terms or mandatory provisions of law rank pari passu with or
senior to Tier 2 instruments, and
(iii)
the claims specified in § 39 (1) nos. 1 to 5 of the German Insolvency
Statute (Insolvenzordnung InsO) or any successor provision hereto
so that in any such event no amounts shall be payable in respect of the Notes until
(i)
the claims of such other unsubordinated creditors of the Issuer (including
claims against the Issuer under its senior non-preferred debt instruments
within the meaning of § 46f (6) sentence 1 KWG or any successor
provision thereto),
(ii)
the claims under Tier 2 instruments and under instruments which, pursuant
to their terms or mandatory provisions of law rank pari passu with or
senior to Tier 2 instruments, and
(iii)
the claims specified in § 39 (1) nos. 1 to 5 InsO or any successor provision
thereto
have been satisfied in full.
Subject to this subordination provision, the Issuer may satisfy its obligations under
the Notes also from other distributable assets (freies Vermögen) of the Issuer. No
Holder may set off his claims arising under the Notes against any claims of the
Issuer. No security or guarantee of whatever kind is, or shall at any time be,
provided by the Issuer or any other person securing rights of the Holders under the
Notes.
In the event of the dissolution, liquidation, insolvency, composition or other
DAC26954048/2 130527-0026
S-2

proceedings for the avoidance of insolvency of, or against, the Issuer, claims against
the Issuer under the Notes rank pari passu with claims against the Issuer under other
additional tier 1 instruments within the meaning of Article 52 CRR.
Interest Payments
Pursuant to the terms and conditions of the Notes, the Issuer will (subject to the
provisions set out below, see section " Discretionary Cancellation of Interest" and
" Compulsory Cancellation of Interest") from (and including) the Interest
Commencement Date owe Interest Payments at the applicable Rate of Interest,
calculated annually on the basis of the principal amount of the Notes from time to
time (which may be lower than the initial principal amount of the Notes (see section
" Write-down of the Redemption Amount and the Principal Amount of the Notes"
below)) and payable annually in arrear on 28 April of each year, commencing on 28
April 2019 (long first interest period), subject to having accrued and being payable
under the terms and conditions of the Notes.
The Rate of Interest will reset on the First Redemption Date and on each Reset Date
thereafter. Reset Date means 28 April 2023 and thereafter each fifth anniversary of
the immediately preceding Reset Date. See § 3 of the terms and conditions of the
Notes.
The applicable Rate of Interest (as defined in § 3 (2) of the terms and conditions of
the Notes) for the period from (and including) the Interest Commencement Date to
(but excluding) the First Redemption Date will be a fixed rate of 5.750 per cent. per
annum; thereafter, the applicable Rate of Interest will be reset on the First
Redemption Date and on each Reset Date thereafter on the basis of the then
prevailing 5-Year EUR Mid Swap Rate (as defined in § 3 (2) of the terms and
conditions of the Notes) plus a margin of 5.383 per cent. per annum.
Discretionary
Interest Payments will not accrue if the Issuer has elected, at its sole discretion, to
Cancellation of Interest
cancel payment of interest (non-cumulative as set out below, see section "
Interest Payments are non-cumulative"), in whole or in part, on any Interest
Payment Date.
See § 3 (8) (a) of the terms and conditions of the Notes.
Compulsory
In addition, Interest Payments will not accrue, in whole or in part, on any Interest
Cancellation of Interest
Payment Date:
(a)
to the extent that such payment of interest together with any additional
Distributions (as defined in § 3 (9) of the terms and conditions of the Notes)
that are simultaneously planned or made or that have been made by the
Issuer on the other Tier 1 Instruments (as defined in § 3 (9) of the terms and
conditions of the Notes) as well as potential write-ups in the then current
financial year of the Issuer would exceed the Available Distributable Items
(as defined in § 3 (9) of the terms and conditions of the Notes), provided
that, for such purpose, the Available Distributable Items shall be increased
by an amount equal to what has been accounted for as deduction for
Distributions on Tier 1 Instruments (including payments of interest on the
Notes) in the calculation of the profit (Gewinn) on which the Available
Distributable Items are based; or
DAC26954048/2 130527-0026
S-3

(b)
if and to the extent that the competent supervisory authority orders that all
or part of the relevant payment of interest be cancelled or another
prohibition of Distributions is imposed by law or an authority (including a
prohibition of Distributions in connection with the calculation of the
maximum distributable amount within the meaning of Article 141 (2) of
Directive 2013/36/EU as supplemented or amended from time to time
("Capital Requirements Directive IV" CRD IV) (Maximum Distributable
Amount or MDA) and as currently transposed into German law by § 10i
KWG).
Prohibitions of Distributions imposed by law or an authority pursuant to (b) include,
but are not limited to, restrictions of Distributions as a result of non-compliance
with the combined buffer requirement under § 10i KWG and the limit resulting
from the maximum distributable amount within the meaning of Article 141(2)
CRD IV or any successor provision as transposed into national law (at the time of
issue of the Notes particularly § 10i KWG in connection with § 37 of the German
Solvency Regulation (Solvabilitätsverordnung)).
See § 3 (8) (b) of the terms and conditions of the Notes.
Interest Payments are
Interest Payments are non-cumulative. Consequently, Interest Payments in
non-cumulative
following years will not be increased to compensate for any shortfall in Interest
Payments during a previous year and such shortfall shall not constitute an event of
default under the terms and conditions of the Notes.
Redemption Right of the Any redemption of the Notes, in whole but not in part, is subject to the following:
Issuer
(a)
The Issuer obtaining prior permission of the competent supervisory
authority in accordance with Article 78 CRR (or any successor provision).
At the time of the issuance of the Notes, permission pursuant to Article 78
CRR requires that either
(i)
the Issuer has replaced the Notes with own fund instruments of
equal or higher quality at terms that are sustainable for the income
capacity of the Issuer earlier than, or at the same time as, the
redemption; or
(ii)
the Issuer has demonstrated to the satisfaction of the competent
supervisory authority that the own funds (pursuant to Article 4 (1)
no. 118 CRR own funds means the sum of Tier 1 capital and Tier 2
capital) of the Issuer would following such redemption exceed
the requirements laid down in Article 92 (1) CRR and the combined
buffer requirement as defined in § 10i KWG transposing point (6) of
Article 128 CRD IV by a margin that the competent supervisory
authority considers necessary on the basis of § 10 para. 4 KWG
transposing Article 104 (3) CRD IV;
(b)
In addition to (a), in respect of a redemption prior to the fifth anniversary of
the issue date of the Notes, if and to the extent required under Article 78 (4)
CRR (or any successor provision):
(i)
In the case of redemption for reasons of taxation pursuant to § 5 (3),
DAC26954048/2 130527-0026
S-4