Obbligazione Bertelsman 4.75% ( XS0268583993 ) in EUR

Bertelsman

100 EUR ▼

Germania

XS0268583993 ( in EUR )

4.75% per anno ( pagato 1 volta l'anno)

26/09/2016 - Obbligazione è scaduto

Prospetto opuscolo dell'obbligazione Bertelsmann XS0268583993 in EUR 4.75%, scaduta

1 000 EUR

1 000 000 000 EUR

Bertelsmann è una multinazionale tedesca operante nei settori editoriali, dei media e dei servizi.

The Obbligazione issued by Bertelsman ( Germany ) , in EUR, with the ISIN code XS0268583993, pays a coupon of 4.75% per year.
The coupons are paid 1 time per year and the Obbligazione maturity is 26/09/2016

PROSPECTUS

Bertelsmann AG
(Gütersloh, Germany)

500,000,000 4.375% Notes of 2006/2012
Issue Price 99.803%

1,000,000,000 4.750% Notes of 2006/2016
Issue Price 99.222%

Bertelsmann AG, Gütersloh (the "Issuer") will issue on September 26, 2006 (the "Issue Date") fixed rate bearer
notes (the "Notes") in two tranches: The notes of the first tranche (the "Tranche A Notes") will be issued in an
aggregate principal amount of 500,000,000 at an issue price of 99.803% of their principal amount. The notes of
the second tranche (the "Tranche B Notes") will be issued in an aggregate principal amount of 1,000,000,000 at
an issue price of 99.222% of their principal amount.
The Tranche A Notes will bear interest from and including September 26, 2006 to but excluding September 26,
2012 at a rate of 4.375% per annum. The Tranche B Notes will bear interest from and including September 26,
2006 to but excluding September 26, 2016 at a rate of 4.750% per annum. The interest will in both cases be
payable annually in arrear on September 26 in each year, commencing on September 26, 2007.
The Issuer has requested the Commission de Surveillance du Secteur Financier (the "CSSF") to provide the
competent authorities in the Federal Republic of Germany, Austria, the Netherlands and the United Kingdom with
a certificate of approval attesting that the Prospectus has been drawn up in accordance with the Loi relative aux
prospectus pour valeurs mobilières which implements Directive 2003/71/EC of the European Parliament and the
Council of November 4, 2003 into Luxembourg law (the "Notification"). The Issuer may request the CSSF to
provide competent authorities in additional host Member States within the European Economic Area with a
Notification.
Application has been made to admit the Notes to the official list of the Luxembourg Stock Exchange and to trade
the Notes on the regulated market "Bourse de Luxembourg" and on the regulated market (geregelter Markt) of the
Frankfurt Stock Exchange, both these markets appearing on the list of regulated markets issued by the E.C. pur-
suant to Council Directive 93/22/EEC of May 10, 1993 on investment services in the securities field.

Joint Lead Managers
Barclays Capital
BNP PARIBAS
Deutsche Bank
The Royal Bank of
Scotland

Co-Lead Managers

Helaba
WestLB AG

The date of this Prospectus is September 22, 2006.

For a discussion of certain significant factors affecting investments in the Notes, see "RISK FACTORS".
THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") AND INCLUDE NOTES IN BEARER FORM THAT
ARE SUBJECT TO U.S. TAX LAW REQUIREMENTS. SUBJECT TO CERTAIN EXCEPTIONS, THE
NOTES MAY NOT BE OFFERED, SOLD OR DELIVERED WITHIN THE UNITED STATES OR TO U.S.
PERSONS.
The Notes are governed by the laws of the Federal Republic of Germany ("Germany").
Each of the two tranches of the Notes will be represented by a global note (each, a "Global Note", and together, the
"Global Notes") in bearer form without interest coupons attached. No definitive notes or interest coupons will be
issued.
The Global Notes will be deposited with Deutsche Bank Aktiengesellschaft, Trust & Securities Services, Große
Gallusstraße 10-14, 60272 Frankfurt am Main, Germany, as common depositary (the "Common Depositary") for
Euroclear Bank S. A./N. V. as operator of the Euroclear System ("Euroclear") and Clearstream Banking, société
anonyme, Luxembourg ("CBL"; together the "Clearing System"). The Global Notes will be deposited with the
Common Depositary on or before September 26, 2006.
The Notes may be transferred in book-entry form only. The Notes will be issued in a denomination of 1,000. The
Notes will not be exchangeable for definitive securities.
This Prospectus has been filed with the CSSF and has been published in electronic form together with all docu-
ments incorporated by reference on the website of the Luxembourg Stock Exchange (www.bourse.lu).
In this Prospectus references to "euro" or "EUR" or "" are to the single unified currency of the members of the
European Union that have adopted the euro in accordance with the Treaty on European Union, as amended.

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RESPONSIBILITY STATEMENT

The Issuer accepts responsibility for the information contained in this Prospectus (the "Prospectus") and hereby
declares that, having taken all reasonable care to ensure that such is the case, the information contained in this
Prospectus is, to the best of its knowledge and belief, in accordance with the facts and contains no omission likely
to affect its importance.

NOTICE

The Issuer confirms that (i) this Prospectus contains all information with respect to the Issuer and to the Notes
which is material in the context of the issue and sale of the Notes, including all information which, according to the
particular nature of the Issuer and of the Notes, is necessary to enable investors and their investment advisers to
make an informed assessment of the assets and liabilities, financial position, profits and losses, and prospects of
the Issuer and of the rights attached to the Notes; (ii) the statements contained in this Prospectus relating to the
Issuer and the Notes are in all material respects true and accurate and not misleading; (iii) there are no other facts in
relation to the Issuer or the Notes the omission of which would, in the context of the issue and sale of the Notes,
make any statement in this Prospectus misleading in any material respect, and (iv) all reasonable enquiries have
been made by the Issuer to ascertain such facts and to verify the accuracy of all such information and statements.
This Prospectus contains certain forward-looking statements, including statements using the words "believes",
"anticipates", "intends", "expects" or other similar terms. This applies in particular to statements under the caption
"BUSINESS OF THE BERTELSMANN GROUP" 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 materi-
ally 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 develop-
ments.
No person has been authorised to give any information or to make any representation 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, the Joint Lead Managers or the Co-Lead Managers named on the cover page
of this Prospectus (the Joint Lead Managers and the Co-Lead Managers together the "Managers").
Neither the delivery of this Prospectus nor any offering, sale or delivery of any Notes made hereunder shall, under
any circumstances, create any implication (i) that the information in this Prospectus is correct as of any time subse-
quent to the date hereof or, as the case may be, subsequent to the date on which this Prospectus has been most recently
amended or supplemented, or (ii) that there has been no adverse change in the financial situation of the Issuer which
is material in the context of the issue and sale of the Notes since the date of this Prospectus or, as the case may be, the
date on which this Prospectus has been most recently amended or supplemented, or the balance sheet date of the most
recent financial statements which are deemed to be incorporated into this Prospectus by reference or (iii) that any
other information supplied in connection with the issue of the Notes is correct at any time subsequent to the date on
which it is supplied or, if different, the date indicated in the document containing the same.
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 Managers to purchase any Notes. Neither this
Prospectus nor any other information supplied in connection with the Notes should be considered as a recommen-
dation by the Issuer or the Managers to a recipient hereof and thereof that such recipient should purchase any Notes.
This Prospectus may not be used for or in connection with any offer or invitation in any jurisdiction or in any circum-
stances in which such offer or invitation is unlawful or unauthorised.
No action has been taken by the Issuer or the Managers other than as set out in this Prospectus that would permit a
public offering of the Notes, or possession or distribution of this Prospectus or any other offering material in any
country or jurisdiction where action for that purpose is required. Accordingly, no Notes may be offered or sold,
directly or indirectly, and neither this Prospectus (nor any part hereof) nor any offering circular, prospectus, form of
application, advertisement or other offering materials may be issued, distributed or published in any country or juris-
diction except in compliance with applicable laws, orders, rules and regulations, and each of the Managers has
represented that all offers and sales by it have been made on such terms.

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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 distribution of this Prospectus (or of any part thereof) and the offer, sale and delivery of the Notes in certain
jurisdictions may be restricted by law. Persons into whose possession this Prospectus (or any part thereof) comes are
required by the Issuer and the Managers to inform themselves about and to observe any such restrictions. In particular,
the Notes represent obligations of the Issuer only, and do not represent obligations of any of the Managers or any
of their respective affiliates or any affiliate of the Issuer or any other third person or entity.
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 "SUBSCRIPTION AND SALE".
In connection with the issue of the Notes, Deutsche Bank AG, London Branch as stabilising manager or
persons acting on its behalf may over-allot Notes (provided that the aggregate principal amount of the
Tranche A Notes allotted does not exceed 105% of the aggregate principal amount of the Tranche A Notes,
and the aggregate principal amount of the Tranche B Notes allotted does not exceed 105% of the aggregate
principal amount of the Tranche B Notes) or effect transactions with a view to supporting the market price of
the Notes at a level higher than that which might otherwise prevail. However, there is no assurance that
Deutsche Bank AG, London Branch as stabilising manager (or any person acting on its behalf) will undertake
any 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 Notes is made and, if begun, may be ended at any time, but it must
end no later than the earlier of 30 calendar days after the date of the receipt of the proceeds of the issue by the
Issuer and 60 calendar days after the date of the allotment of the Notes.

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TABLE OF CONTENTS

SUMMARY.............................................................................................................................................................7
Summary regarding the Notes.............................................................................................................................7
Summary regarding the Issuer ............................................................................................................................9
Summary regarding the Risk Factors ................................................................................................................10
GERMAN TRANSLATION OF THE SUMMARY/ZUSAMMENFASSUNG ...................................................12
Zusammenfassung in Bezug auf die Schuldverschreibungen ...........................................................................12
Zusammenfassung in Bezug auf die Emittentin................................................................................................14
Zusammenfassung in Bezug auf die Risikofaktoren .........................................................................................16
RISK FACTORS ...................................................................................................................................................18
Risk Factors regarding the Notes ......................................................................................................................18
Risk Factors regarding the Issuer ......................................................................................................................18
TERMS AND CONDITIONS ...............................................................................................................................23
GENERAL INFORMATION ABOUT THE ISSUER..........................................................................................36
Incorporation.....................................................................................................................................................36
Corporate Seat and Duration .............................................................................................................................36
Corporate Purpose.............................................................................................................................................36
Share Capital .....................................................................................................................................................36
Capitalisation ....................................................................................................................................................37
Shareholder Structure........................................................................................................................................38
Dividend Policy.................................................................................................................................................38
Management and Supervisory Bodies...............................................................................................................38
Corporate Governance ......................................................................................................................................41
Organisational Structure....................................................................................................................................41
Employees.........................................................................................................................................................42
Ratings ..............................................................................................................................................................42
Auditors.............................................................................................................................................................42
Financial Year....................................................................................................................................................42
BUSINESS OF THE BERTELSMANN GROUP .................................................................................................43
Overview...........................................................................................................................................................43
Description of the Corporate Divisions.............................................................................................................43
Corporate Strategy ............................................................................................................................................46
Investments .......................................................................................................................................................47
Financing...........................................................................................................................................................47
Risk Management .............................................................................................................................................47
Material Contracts.............................................................................................................................................47
Litigation and Arbitration Proceedings .............................................................................................................48
Recent Developments .......................................................................................................................................49
Outlook .............................................................................................................................................................49
USE OF PROCEEDS ............................................................................................................................................51
SELECTED FINANCIAL INFORMATION ........................................................................................................52
Consolidated Statements of Income ..................................................................................................................52
Reconciliation to Operating EBIT.....................................................................................................................53
Consolidated Balance Sheet ..............................................................................................................................54
Consolidated Cash Flow Statement...................................................................................................................55
Distribution of Consolidated Revenues by Geographical Regions ...................................................................56
Revenues by Corporate Divisions .....................................................................................................................56
Results Breakdown ...........................................................................................................................................56
TAXATION...........................................................................................................................................................57
Taxation in Germany ........................................................................................................................................57

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EU Savings Tax Directive.................................................................................................................................59
Taxation in Luxembourg...................................................................................................................................59
SUBSCRIPTION AND SALE ..............................................................................................................................61
Subscription of the Notes ..................................................................................................................................61
Selling Restrictions ...........................................................................................................................................61
GENERAL INFORMATION................................................................................................................................64
Authorisation.....................................................................................................................................................64
Litigation...........................................................................................................................................................64
Payment Information.........................................................................................................................................64
Listing ...............................................................................................................................................................64
Clearing Codes ..................................................................................................................................................65
Availability of Documents ................................................................................................................................65
Yield of the Notes .............................................................................................................................................65
Expenses of the Issue ........................................................................................................................................65
DOCUMENTS INCORPORATED BY REFERENCE.........................................................................................66

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SUMMARY
The following constitutes the summary (the "Summary") of the essential characteristics of and risks associated
with the Issuer and the Notes. This Summary should be read as an introduction to this Prospectus. It does not
purport to be complete and is taken from, and is qualified in its entirety by reference to the detailed information
appearing elsewhere in this Prospectus. Any decision by an investor to invest in the Notes should be based on
consideration of this Prospectus as a whole. Where a claim relating to the information contained in this Pro-
spectus is brought before a court, the plaintiff investor might, under the national legislation of such court, have to
bear the costs of translating the Prospectus before the legal proceedings are initiated. Civil liability attaches to
those persons who have tabled this Summary including any translation thereof, and applied for its notification, but
only if the Summary is misleading, inaccurate or inconsistent when read together with the other parts of this
Prospectus.
As used in the Summary, "Bertelsmann AG" and "Issuer" refer solely to the ultimate parent company of the
Bertelsmann Group. "Bertelsmann Group" and "Group" refer to Bertelsmann AG and its consolidated sub-
sidiaries. Expressions defined in the Terms and Conditions of the Notes (see below "TERMS AND CONDI-
TIONS") shall have the same meaning in the Summary.
Summary regarding the Notes
Issuer.......................................... Bertelsmann AG
Principal Amount....................... Tranche A: 500,000,000
Tranche B: 1,000,000,000
Joint Lead Managers .................. Barclays Bank PLC
BNP Paribas
Deutsche Bank AG, London Branch
The Royal Bank of Scotland plc
Co-Lead Managers..................... Landesbank Hessen-Thüringen Girozentrale
WestLB AG
Principal Paying Agent .............. Deutsche Bank Aktiengesellschaft, Frankfurt am Main, Germany
Luxembourg Listing Agent and
Deutsche Bank Luxembourg S.A., Luxembourg
Paying Agent .............................
Issue Price.................................. Tranche A: 99.803%
Tranche B: 99.222%
Issue Date................................... September 26, 2006
Maturity Date............................. Tranche A: September 26, 2012
Tranche B: September 26, 2016
Denomination ............................ The Notes are issued in a denomination of 1,000 each.
Form of the Notes ...................... Each of the two tranches is represented by a Global Note without coupons
which will be deposited with Deutsche Bank Aktiengesellschaft, Frankfurt am
Main, Germany, as common depositary for Euroclear Bank S. A./N. V., as
operator of the Euroclear System, and Clearstream Banking, société anonyme,
Luxembourg. The Notes may be transferred in book-entry form only.
Interest ....................................... The Tranche A Notes bear interest on their principal amount at the rate of
4.375% per annum from (and including) September 26, 2006 to (but exclud-
ing) September 26, 2012. The Tranche B Notes bear interest on their principal
amount at the rate of 4.750% per annum from (and including) September 26,
2006 to (but excluding) September 26, 2016. Interest shall be payable in arrear

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on September 26 in each year. The first payment of interest will be made on
September 26, 2007.
Taxation ..................................... All payments in respect of the Notes will be made without withholding or
deduction for or on account of any present or future taxes or duties of whatever
nature imposed or levied by way of withholding or deduction at source by or
on behalf of the Federal Republic of Germany or any political subdivision or
any authority thereof or therein having power to tax, unless such withholding
or deduction is required by law. In such event, the Issuer will pay such addi-
tional amounts as shall be necessary in order that the net amounts received by
the holders of the Notes after such withholding or deduction shall equal the
respective amounts of principal and compensation which would otherwise
have been receivable in respect of the Notes in the absence of such withholding
or deduction, subject to customary exceptions as set out in the Terms and
Conditions of the Notes.
Early Redemption for Taxation
Early redemption of the Notes, in whole but not in part, for reasons of taxation
Reasons ......................................
will be permitted, if, as a result of any change in, or amendment to, the laws or
regulations prevailing in the Federal Republic of Germany, which change or
amendment becomes effective on or after September 26, 2006, or as a result of
any application or official interpretation of such laws or regulations not gen-
erally known before that date, the Issuer will become obligated to bear with-
holding taxes which are or will be leviable on payments of principal or interest
in respect of the Notes.
Change of Control...................... In the event of a Rating Downgrade to non-investment grade that is at least
partly due to a Change of Control, each Holder will have the option to require
the Issuer to redeem each of the Notes held by such Holder, as more fully set
out in the Terms and Conditions of the Notes.
Status of the Notes ..................... The Notes constitute unsecured and unsubordinated obligations of the Issuer
and rank pari passu with all other unsecured and unsubordinated obligations of
the Issuer, present and future.
Negative Pledge ......................... As long as any Notes are outstanding, but only up to the time all amounts of
principal and interest have been placed at the disposal of the Principal Paying
Agent, the Issuer will not provide security upon any of its assets for any pre-
sent or future Capital Market Indebtedness or any guarantees or other indem-
nities resulting therefrom, without at the same time having the holders of the
Notes share equally and rateably in such security; this obligation does not
apply, however, to security interests of any kind that are already attached to an
asset at the time when such asset is acquired by the Issuer.
Event of Default......................... The Notes provide for events of default entitling holders of the Notes to de-
mand immediate redemption of the Notes, as more fully set out in the Terms
and Conditions of the Notes.
Cross Default ............................. The Notes provide for a cross default with other Indebtedness of the Issuer.
Use of Proceeds ......................... The net proceeds from the issuance of the Notes will amount to approximately
1.49 billion. The majority of the proceeds will be used to repay in part the
4.5 billion syndicated credit facility drawn by the Issuer on July 4, 2006 to
finance the repurchase of a 25.1% stake in the Issuer from Groupe Bruxelles
Lambert, while the remaining part of the proceeds will be used for general
corporate purposes.
Selling Restrictions .................... Subject to certain exceptions, the Notes are not being offered, sold or delivered
within the United States or to U.S. persons. In addition, there are certain
restrictions on the offer and sale of Notes and the distribution of offering
materials in the European Economic Area, the U.K., France and Italy. For a

8

description of these and other restrictions on sale and transfer see "SUB-
SCRIPTION AND SALE Selling Restrictions".
Listing ........................................ Application has been made to admit the Notes to listing and to trading on the
regulated markets of the Luxembourg Stock Exchange and the Frankfurt Stock
Exchange (geregelter Markt).
Settlement .................................. Delivery of the Notes will be made on or about the Issue Date through the
book-entry facilities of Euroclear or CBL against payment therefor in euro in
immediately available funds.
Governing Law .......................... The Notes are governed by German law.
Jurisdiction................................. Non-exclusive place of jurisdiction for any legal proceedings arising under the
Notes is Frankfurt am Main, Germany.

Summary regarding the Issuer
The Issuer is the ultimate parent company of the Bertelsmann Group of companies. The Bertelsmann Group com-
prises six corporate divisions, namely RTL Group, Random House, Gruner + Jahr, BMG, Arvato and Direct Group;
all six divisions are (within the limits prescribed by the Issuer) operationally autonomous and are reportable seg-
ments.
Business Overview
The Issuer serves as an operative management holding company.
RTL Group has operations in the television and radio sector as well as in content production. Its television business
includes the family of channels of RTL Television in Germany, M6 in France, Five in the U.K., the RTL channels in
the Benelux region and a shareholding in Antena 3 in Spain. The Random House portfolio includes more than 100
editorially independent book publishing imprints. The group publishes hardcover and paperback fiction and
non-fiction books for adults and children in English, German, Spanish, Japanese and Korean. Bertelsmann's printing
and publishing division Gruner + Jahr is a magazine publisher, publishing about 285 print titles. The BMG division,
Bertelsmann's music operations, consists of the Sony BMG Music Entertainment joint venture and the Group's
wholly owned business unit BMG Music Publishing (which the Issuer has now agreed to sell to the Vivendi Group).
Arvato is Bertelsmann's media services division and includes the companies in the Arvato Print, Arvato Direct
Services, Arvato Logistics Services, Arvato Storage Media and Arvato Systems units. Direct Group with its book,
music and DVD clubs unites Bertelsmann's worldwide direct-to-customer media sales.
Executive Board, Supervisory Board and Employees
The Issuer's Executive Board consists of seven members. The Executive Board's chairman is the Issuer's Chief
Executive Officer, Dr. Gunter Thielen. The Chief Financial Officer is Dr. Thomas Rabe.
The Supervisory Board currently consists of 13 members. The Supervisory Board's chairman is Prof. Dr. Dieter
H. Vogel and the vice chairman is Prof. Dr. Jürgen Strube.
At the end of 2005, Bertelsmann Group had 88,516 employees worldwide.
Shareholders
The Issuer is a privately held stock corporation. Bertelsmann Stiftung holds 76.9% of the issued share capital, and
the Mohn family the remaining 23.1% (in both cases indirectly through intermediary holding companies).

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Recent Developments
The shares in the Issuer repurchased from Groupe Bruxelles Lambert were transferred to the Issuer on July 4,
2006. On July 13, 2006, the European Court of First Instance annulled the decision of the European Commission
to unconditionally approve the Sony BMG joint venture. In August 2006, Random House acquired the U.S.
publishing house Multnomah Publishers and the remaining shares in the South-Korean book imprint Random
House Joong Ang, thereby further expanding its global portfolio of book imprints. On September 6, 2006, the
Issuer signed a binding agreement with the Vivendi Group for the sale of BMG Music Publishing. The Issuer
expects to receive payment of the purchase price by the end of the year.
Selected Financial Information
Accounting and reporting of the Bertelsmann Group is performed in accordance with the International Financial
Reporting Standards (IFRS).
BERTELSMANN GROUP
(in millions)
H1 2006 (1)
H1 2005 (1, 2)
2005
2004 (2)
Income Statement Data

Revenues
9,144
7,988
17,890
17,016
EBIT (earnings before interest and taxes)
693
564
1,671
1,747
Financial result
(172)
(147)
(386)
(312)
Net income
339
330
1,041
1,172

Balance Sheet Data

Non-current assets
13,669
12,021
14,071
11,774
Current assets
8,092
8,397
8,570
9,216
Total assets
22,026
20,642
22,932
20,990
Equity
4,492
8,898
9,170
8,722

Non-current liabilities
5,485
5,068
5,872
5,469
Current liabilities
11,828
6,636
7,646
6,799
Total equity and liabilities
22,026
20,642
22,932
20,990

(1) Unaudited.

(2) Restated.

Summary regarding the Risk Factors
Summary of Risk Factors regarding the Notes
An investment in the Notes involves certain risks associated with the characteristics of the Notes which could lead
to substantial losses that Noteholders would have to bear in the case of selling their Notes or with regard to re-
ceiving interest payments and repayment of principal. Those risks include that:
· prior to the issue, there has been no public market for the Notes and there can be no assurance that a liquid
secondary market for the Notes will develop or, if it does develop, that it will continue; in an illiquid market, an
investor might not be able to sell his Notes at any time at fair market prices;
· the price of the Notes falls as a result of changes in market interest rates;
· the Notes may be subject to early redemption at the principal amount, if the Issuer becomes obligated to bear
withholding taxes which are or will be leviable on payments of principal or interest in respect of the Notes; if
the Issuer calls and redeems the Notes in such case, the Noteholders may only be able to reinvest the redemp-
tion proceeds in securities with a lower yield; and

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