Obbligazione Intesa Sanpaolo SpA 0% ( XS0545782020 ) in EUR

Emittente Intesa Sanpaolo SpA
Prezzo di mercato 100 EUR  ▼ 
Paese  Italia
Codice isin  XS0545782020 ( in EUR )
Tasso d'interesse 0%
Scadenza 01/06/2016 - Obbligazione è scaduto



Prospetto opuscolo dell'obbligazione INTESA SANPAOLO S.P.A XS0545782020 in EUR 0%, scaduta


Importo minimo /
Importo totale /
Descrizione dettagliata Intesa Sanpaolo S.p.A. è la più grande banca italiana per capitalizzazione di mercato, attiva nel settore bancario con servizi di credito, investimento e gestione patrimoniale, operando sia in Italia che all'estero.

The Obbligazione issued by Intesa Sanpaolo SpA ( Italy ) , in EUR, with the ISIN code XS0545782020, pays a coupon of 0% per year.
The coupons are paid 1 time per year and the Obbligazione maturity is 01/06/2016








PROSPECTUS DATED 30 SEPTEMBER 2010

INTESA SANPAOLO S.P.A.
(incorporated as a società per azioni in the Republic of Italy)
1,000,000,000 9.5 per cent. Fixed Rate Resettable Perpetual Subordinated Notes
The 1,000,000,000 Fixed Rate Resettable Perpetual Subordinated Notes (the "Notes") are issued by Intesa Sanpaolo S.p.A. (the "Issuer") in a
single denomination of 50,000. The Issue Price of the Notes is 100.00 per cent.
The Notes will bear interest on a non-cumulative basis from (and including) the Issue Date at the relevant interest rate from time to time.
Subject as provided in the terms and conditions of the Notes (the "Conditions" and, each of them, a "Condition"), such interest will be payable
annually in arrears on each Interest Payment Date (as defined in the Conditions). The Interest Rate in respect of the period from (and including)
the Issue Date to (but excluding) the First Reset Date will be equal to 9.5 per cent. per annum. Such rate is equal to the swap rate registered on
23 September 2010 plus 7.57 per cent. annum (the "Margin"). The Interest Rate will be reset on the First Reset Date and every five years
thereafter on each subsequent Reset Date and will be the sum of the 5-year mid market swap rate (the "Interest Basis"), registered on the
Reuters page ISDAFIX2 (above the caption "EURSFIXA") at 11.00 a.m. (CET) on the second TARGET Settlement Date (as defined in the
Conditions) before the applicable Reset Date, plus the Margin. Under certain circumstances described in Condition 5 (Interest Suspension), the
Issuer may elect or even be required to suspend interest payments on the Notes.
The Notes will be redeemed on the date on which voluntary or involuntary winding up proceedings are instituted in respect of the Issuer as
described in Condition 7 (Redemption and Purchase). The Issuer may, at its option, redeem the Notes in whole, but not in part, on the First Call
Date and on any Reset Date (as defined in the Conditions) thereafter at an amount equal to their principal amount, together with any accrued
interest and Additional Amounts (as defined in the Conditions), as described in Condition 7.1 (Redemption at the option of the Issuer). In addition,
the Issuer may, at its option, redeem the Notes (in whole but not in part) at any time after 1 January 2013 upon occurrence of a Capital
Disqualification Event (as defined in the Conditions) and within 120 days after the occurrence of such event, at a redemption price equal to
102% of their Original Principal Amount together with interest accrued (if any) up to, but excluding, the Capital Disqualification Event
Redemption Date (as defined in the Conditions) and any Additional Amounts, provided that, if (a) a Principal Write Down Event (as defined in
the Conditions) has occurred before the relevant Capital Disqualification Event, and (b) as a consequence of the Capital Disqualification Event,
the Notes will be qualified as patrimonio supplementare (Tier 2 Capital) of the Issuer, the Issuer shall not redeem the Notes until the obligations of
the Issuer relating to the principal of the Notes have been fully reinstated, as described in Condition 7.2 (Redemption due to a Capital
Disqualification Event). Further, the Issuer may, at its option, redeem the Notes in whole, but not in part, at any time before the First Call Date
following the occurrence of a Tax Event (as defined in the Conditions) provided that, if a Principal Write Down Event has occurred before the
relevant Tax Event, the Issuer shall not redeem the Notes until the obligations of the Issuer relating to the principal of the Notes have been fully
reinstated, as described in Condition 7.3 (Redemption for tax reasons). Any redemption of the Notes other than as described in the first sentence of
this paragraph is subject to the prior approval of the Lead Regulator (as defined herein).
The Notes are expected, on issue, to be rated "Baa1" by Moody's Investors Service, Inc. ("Moody's"), "BBB+" by Standard & Poor's Rating
Services, a division of The McGraw Hill Companies Inc., ("S&P") and "A" by Fitch Ratings Ltd ("Fitch"). A rating is not a recommendation to
buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating organisation.
An investment in Notes involves certain risks. For a discussion of these risks, see the section entitled "Risk Factors" on page 13.
This document constitutes a prospectus (the "Prospectus") for the purposes of article 5 of Directive 2003/71/EC (the "Prospectus Directive").
Application has been made to the Commission de Surveillance du Secteur Financier (the "CSSF"), which is the competent authority in Luxembourg
for the purposes of the Prospectus Directive, to approve this document as a prospectus under the Luxembourg Law of 10 July 2005 on
Prospectuses for Notes (the "Luxembourg Prospectus Law"), which implements the Prospectus Directive in Luxembourg. Application has also
been made for the Notes to be admitted to the official list of the Luxembourg Stock Exchange and to trading on its Regulated Market, which is a
regulated market for the purposes of the Market in Financial Instruments Directive 2004/39/EC.
Joint Lead Managers
Banca IMI
BofA Merrill Lynch
HSBC
Morgan Stanley
Société Générale
Corporate & Investment Banking



The Issuer accepts responsibility for the information contained or incorporated by reference in this Prospectus and
declares that, to the best of its knowledge and belief (having taken all reasonable care to ensure that such is the case), the
information contained in this Prospectus is true and in accordance with the facts and does not omit anything likely to
affect the import of such information.
This Prospectus should be read and construed together with any documents incorporated by reference herein.
No person has been authorised to give any information or to make any representation not contained in, or not
consistent with, this Prospectus or any other document entered into in relation to the Notes or any information
supplied by the Issuer or such other information as is in the public domain and, if given or made, such information or
representation should not be relied upon as having been authorised by the Issuer or any of the Joint Lead Managers (as
defined in "Subscription and Sale" below).
The Joint Lead Managers have not independently verified the information contained herein. No representation or
warranty is made or implied by the Joint Lead Managers or any of their respective affiliates, and none of the Joint Lead
Managers nor any of their respective affiliates makes any representation or warranty or accepts any responsibility as to
the accuracy or completeness of the information contained or incorporated by reference in this Prospectus. Neither the
delivery of this Prospectus nor the offering, sale or delivery of any Note shall, in any circumstances, create any
implication that the information contained in this Prospectus is true subsequent to the date hereof or that there has been
no adverse change, or any event reasonably likely to involve any adverse change, in the condition (financial or
otherwise), business or prospects of the Issuer or of the Intesa Sanpaolo Group (as defined below) since the date hereof or
that any other information supplied in connection with 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.
This Prospectus may only be used for the purposes for which it has been published. The distribution of this Prospectus
and the offer, sale and delivery of the Notes in certain jurisdictions may be restricted by law. No action has been or will
be taken by the Issuer, the Joint Lead Managers or any other person that would permit a public offering of the Notes or
the distribution of this Prospectus or any other offering material relating to the Notes, in any country or jurisdiction
where regulatory action for that purpose is required. Persons into whose possession this Prospectus (or any part of it)
comes are required by the Issuer and the Joint Lead Managers to inform themselves about, and to observe, any such
restrictions. Neither this Prospectus nor any part of it constitutes an offering, or may be used for the purpose of an offer
to sell any of the Notes, or a solicitation of an offering to buy any of the Notes, by anyone in any jurisdiction or in any
circumstances in which such offer or solicitation is not authorised or is unlawful. For a description of certain
restrictions on offers, sales and deliveries of Notes and on the distribution of this Prospectus and other offering material
relating to the Notes, see "Subscription and Sale" below. 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 exceptions, the Notes may not be offered, sold or delivered within the United
States to, or for the benefit of, U.S. persons (as defined in Regulation S under the Securities Act).
This Prospectus does not constitute an offer or an invitation to subscribe for or purchase any Notes and should not be
considered as a recommendation by the Issuer, the Joint Lead Managers or any of them that any recipient of this
Prospectus should subscribe for or purchase any Notes. Each recipient of this Prospectus shall be deemed to have made
its own investigation and appraisal of (a) the condition (financial or otherwise), business and prospects of the Issuer and
of the Intesa Sanpaolo Group, and (b) the terms of the offering of the Notes, including the merits and risks of making an
investment in them. Each prospective investor should consult its own advisers as to legal, tax, financial, credit and any
other relevant aspects of an investment in the Notes.
The Issuer will use its best efforts to adopt a consistent approach with respect to interest payments for holders of both its
Parity Obligations (as defined herein) and the Notes.
2



In this Prospectus, unless otherwise specified, references to "EUR", "euro", "Euro" or "" are to the single currency
introduced at the start of the third stage of 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. Unless otherwise
specified or where the context requires, references to laws and regulations are to the laws and regulations of Italy.
Certain figures included in this Prospectus have been subject to rounding adjustments; accordingly, figures shown for
the same category set out 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.
FORWARD LOOKING STATEMENTS
This Prospectus includes forward looking statements. These include statements relating to, among other things, the
future financial performance of the Intesa Sanpaolo Group (as defined in "Certain Definitions" below), plans and
expectations regarding developments in the business, growth and profitability of the Intesa Sanpaolo Group and general
industry and business conditions applicable to the Intesa Sanpaolo Group. The Issuer has based these forward looking
statements on its current expectations, assumptions, estimates and projections about future events. These forward
looking statements are subject to a number of risks, uncertainties and assumptions that may cause the actual results,
performance or achievements of the Intesa Sanpaolo Group or those of its industry to be materially different from or
worse than 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 except to the extent required by law.
STABILISATION
In connection with the issue of the Notes, Morgan Stanley & Co. International plc (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, there is no assurance that the Stabilising Manager (or persons acting on
behalf of the Stabilising Manager) 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 days after the issue
date of the Notes and 60 days after the date of the allotment of the Notes. Any stabilisation action or over
allotment shall be conducted in accordance with all applicable laws and rules.
CERTAIN DEFINITIONS
Intesa Sanpaolo is the surviving entity from the merger between Banca Intesa S.p.A. and Sanpaolo IMI S.p.A., which
was completed with effect from 1 January 2007. Pursuant to the merger, Sanpaolo IMI S.p.A. merged by incorporation
into Banca Intesa S.p.A. which, upon completion of the merger, changed its name to Intesa Sanpaolo S.p.A.
Accordingly, in this Prospectus:
(i)
references to "Intesa Sanpaolo" are to Intesa Sanpaolo S.p.A. in respect of the period since 1 January 2007
and references to the "Group" or to the "Intesa Sanpaolo Group" are to Intesa Sanpaolo and its subsidiaries
in respect of the same period;
(ii)
references to "Banca Intesa" or "Intesa" are to Banca Intesa S.p.A. in respect of the period prior to 1 January
2007 and references to the "Banca Intesa Group" or the "Intesa Group" are to Banca Intesa and its
subsidiaries in respect of the same period; and
(iii)
references to "Sanpaolo IMI" are to Sanpaolo IMI S.p.A. and references to "Sanpaolo IMI Group" are to
Sanpaolo IMI and its subsidiaries.

3



INDEX
Section
Page
GENERAL OVERVIEW .................................................................................................................................................. 5
RISK FACTORS .............................................................................................................................................................. 13
INFORMATION INCORPORATED BY REFERENCE ............................................................................................. 29
TERMS AND CONDITIONS OF THE NOTES.......................................................................................................... 31
1.
DEFINITIONS AND INTERPRETATION ......................................................................................................... 31
2.
FORM, DENOMINATION AND TITLE ............................................................................................................ 38
3.
STATUS AND SUBORDINATION OF THE NOTES....................................................................................... 38
4.
INTEREST .............................................................................................................................................................. 38
5.
INTEREST SUSPENSION .................................................................................................................................... 40
6.
LOSS ABSORPTION ............................................................................................................................................. 42
7.
REDEMPTION AND PURCHASE ..................................................................................................................... 44
8.
PAYMENTS ........................................................................................................................................................... 46
9.
TAXATION ............................................................................................................................................................ 48
10.
PRESCRIPTION ................................................................................................................................................ 49
11.
REPLACEMENT OF NOTES AND COUPONS ........................................................................................... 49
12.
PAYING AGENTS ............................................................................................................................................ 49
13.
MEETINGS OF NOTEHOLDERS, MODIFICATION, WAIVER AND SUBSTITUTION ....................... 50
14.
FURTHER ISSUES ............................................................................................................................................ 54
15.
NOTICES ........................................................................................................................................................... 54
16.
CURRENCY INDEMNITY .............................................................................................................................. 54
17.
ROUNDING ...................................................................................................................................................... 54
18.
GOVERNING LAW AND JURISDICTION .................................................................................................. 54
SUMMARY OF PROVISIONS RELATING TO THE NOTES WHILE IN GLOBAL FORM ............................... 56
USE OF PROCEEDS ...................................................................................................................................................... 58
DESCRIPTION OF THE ISSUER ................................................................................................................................. 59
SUMMARY FINANCIAL INFORMATION OF THE ISSUER ................................................................................ 78
TAXATION ..................................................................................................................................................................... 88
SUBSCRIPTION AND SALE........................................................................................................................................ 96
GENERAL INFORMATION ........................................................................................................................................ 98


4



GENERAL OVERVIEW
This general overview must be read as an introduction to this Prospectus and is qualified in its entirety by reference to
the more detailed information presented elsewhere in this Prospectus. Any decision to invest in the Notes should be
based on a consideration of the Prospectus as a whole, including the documents incorporated by reference.
Words and expressions defined in the "Terms and Conditions of the Notes" below or elsewhere in this Prospectus
have the same meanings when used in this general overview and references to a "Condition" is to such numbered
condition in the Terms and Conditions of the Notes.
Issuer
Intesa Sanpaolo S.p.A.
Joint Lead Managers
Banca IMI S.p.A.
HSBC Bank plc
Merrill Lynch International
Morgan Stanley & Co. International plc
Société Générale
Principal amount
1,000,000,000
Issue price
100.00 per cent. of the principal amount of the Notes.
Issue Date
1 October 2010
Form and denomination
The Notes will be issued in bearer form in a single denomination of
50,000 each.
Status of the Notes
The Notes will constitute direct, unsecured and deeply subordinated
obligations of the Issuer and, in the event of bankruptcy, dissolution,
liquidation or winding-up of the Issuer, will rank:
(i)
pari passu without any preference among themselves and pari
passu with any present and future Parity Obligations;
(ii)
senior in right of payment to all present and future Junior
Obligations; and
(iii)
junior in right of payment to any present and future claims of
all unsubordinated creditors of the Issuer and to all present
and future Less Deeply Subordinated Obligations.
Maturity
If not previously redeemed or purchased and cancelled, the Notes
will mature and be redeemed on the date on which voluntary or
involuntary winding-up proceedings are instituted in respect of the
Issuer, in accordance with, as the case may be, (i) a resolution passed
at a meeting of the shareholders of the Issuer, (ii) any provision of the
By-laws of the Issuer (which currently provide for the duration of the
Issuer to run until 31 December 2100 but, if this is extended,
redemption of the Notes will be correspondingly adjusted) or (iii) any
applicable legal provision or any decision of any judicial or
administrative authority.
5



Redemption at the option of the
The Issuer may, at its option, redeem the Notes in whole, but not in
Issuer
part, on the First Call Date and on any Reset Date thereafter at a
redemption price equal to their Original Principal Amount together
with any accrued interest and any Additional Amounts, as better
described in Condition 7.1 (Redemption at the option of the Issuer).
However, if a Principal Write Down Event has occurred, the Issuer
shall not be entitled to redeem the Notes until the obligations of the
Issuer relating to the principal of the Notes have been fully reinstated
to their Original Principal Amount.
In the Conditions, the "First Call Date" means 1 June 2021 but, if
Bank of Italy Regulations are amended at any time after the date of
this Prospectus so that instruments that constitute the Issuer's Tier 1
Capital may be redeemed at the option of the Issuer after five years
from the relevant issue date, then the First Call Date will be 1 June
2016. See also "Risk Factors ­ Regulatory uncertainty concerning the First
Call Date".
Redemption due to a Capital
The Issuer may, at its option, redeem the Notes (in whole but not in
Disqualification Event
part) at any time after 1 January 2013, following the occurrence of a
Capital Disqualification Event and within 120 days after the
occurrence of such event, at a redemption price equal to 102% of their
Original Principal Amount together with interest accrued (if any) up
to, but excluding, the Capital Disqualification Event Redemption
Date and any Additional Amounts, provided that, if (a) a Principal
Write Down Event has occurred before the relevant Capital
Disqualification Event, and (b) as a consequence of the Capital
Disqualification Event, the Notes qualify as patrimonio supplementare
(Tier 2 Capital) of the Issuer, the Issuer shall not be entitled to redeem
the Notes until the obligations of the Issuer relating to the principal of
the Notes have been fully reinstated to their Original Principal
Amount, as described in Conditions 7.2 (Redemption due to a Capital
Disqualification Event).
For the sake of clarity, Capital Disqualification Event means a
situation whereby (a) 75% or more of the principal amount of the
Notes would not be eligible to qualify as regulatory capital resources
for the Issuer for the purposes of its Tier 1 Capital save, where such
non-qualification is only as a result of any applicable regulatory
limitations on the amount of such capital (i.e., limitations on the
inclusion of non-core capital instruments as part of the Tier 1 Capital
of the Issuer) or (b) following a regulatory intervention, it is
confirmed to the Issuer that the Notes would not be eligible to qualify
as regulatory capital resources for the Issuer for the purposes of its
Tier 1 Capital.
Redemption for tax reasons
The Issuer may, at its option, redeem the Notes in whole, but not in
part, at any time before the First Call Date following the occurrence of
6



a Tax Event:
(a)
in the case of an Additional Amount Event, at a redemption
price equal to the Original Principal Amount of the Notes; or
(b)
in the case of a Tax Deductibility Event, at a redemption price
equal to the greater of (i) the Original Principal Amount of the
Notes and (ii) the Make Whole Amount (excluding, for the
purposes of this calculation only, the interest accrued (if any)
up to, but excluding, the Tax Event Redemption Date),
in each case, together with interest accrued (if any) up to, but
excluding, the Tax Event Redemption Date and any Additional
Amounts and provided that, if a Principal Write Down Event has
occurred before the relevant Tax Event, the Issuer shall not be entitled
to redeem the Notes until the obligations of the Issuer relating to the
principal of the Notes have been fully reinstated to their Original
Principal Amount, as described in Condition 7.3 (Redemption for tax
reasons).
Redemption subject to regulatory
Any redemption of the Notes, other than in accordance with the
approval
section "Maturity" above, is subject to the prior approval of the Lead
Regulator.
Interest
The Notes will bear interest on a non-cumulative basis from (and
including) the Issue Date at the relevant Interest Rate from time to
time. Such interest will be payable, subject as provided in these
Conditions, annually in arrears on each Interest Payment Date.
The Interest Rate in respect of the First Fixed Rate Period will be
equal to 9.5 per cent. per annum. Such rate is equal to the swap rate,
registered on the Reuters page ISDAFIX2 (above the caption
"EURSFIXA") at 11.00 a.m. (CET) on 23 September 2010 plus 7.57 per
cent. annum (the "Margin").
The Interest Rate will be reset on the First Reset Date and on each
subsequent Reset Date and, for each subsequent Fixed Rate Period,
will be the sum of the 5-year mid market swap rate (the "Interest
Basis"), registered on the Reuters page ISDAFIX2 (above the caption
"EURSFIXA") at 11.00 a.m. (CET) on the second TARGET Settlement
Date before the applicable Reset Date, plus the Margin..
Optional suspension of interest
Subject to "Mandatory payment of interest" below, the Issuer, taking
into account its specific financial and solvency condition, may elect
not to pay all (or part only) of the interest accrued up to an Interest
Payment Date (in circumstances such as the Issuer not having
Distributable Profits according to its Latest Accounts or, since the
Issuer's annual shareholders' meeting in respect of the non-
consolidated financial statements for the financial year immediately
preceding the year in which such Interest Payment Date falls, no
7



dividend or other distribution having been declared, made, approved
or set aside for payment in respect of any Junior Obligations), as
described in further detail in Condition 5.1 (Optional suspension of
interest).
Mandatory suspension of interest
The Issuer will be prohibited from:
(i)
paying all (or part only) of the interest accrued up to an
Interest Payment Date if and to the extent that a Capital
Deficiency Event regarding the Issuer would occur if the
Issuer made such payment of interest (in whole or in part) on
such Interest Payment Date; and
(ii)
paying all (or part only) the interest accrued to an Interest
Payment Date if:
(a)
a Capital Deficiency Event regarding the Issuer has
occurred and is continuing on such Interest Payment
Date; or
(b)
the Issuer is prohibited under applicable Italian
legislation or regulation from declaring a dividend or
making a distribution on its Junior Obligations, other
than in the case of a Capital Deficiency Event; or
(c)
the Lead Regulator, in its sole discretion, determines
that the specific financial and solvency condition of
the Issuer requires the Issuer to cancel the relevant
interest payment; or
(d)
following a Principal Write Down Event, the
obligations of the Issuer in respect of the principal
amount of the Notes have not, as at such Interest
Payment Date, been reinstated in whole to their
Original Principal Amount,
subject, in the case of paragraphs (a) and (b) above, to the
provisions described in "Mandatory payment of interest" below.
For further detail, see Condition 5.2 (Mandatory suspension of interest).
Non-cumulative interest
Where the Issuer elects not to pay the full Interest Amount pursuant
to Condition 5.1 (Optional suspension of interest) or is prohibited from
paying interest pursuant to Condition 5.2 (Mandatory suspension of
interest), it shall not have any obligation to make such interest
payment on the relevant Interest Payment Date and the failure to pay
such Interest Amount shall not constitute a default of the Issuer or
any other breach of obligations under the Conditions or for any
purpose. Interest which the Issuer elects not to pay or is prohibited
from paying will not accumulate or compound and all Noteholders'
rights and claims in respect of any such Interest Amount will be fully
8



and irrevocably cancelled and forfeited.
Mandatory payment of interest
Except in the circumstances described in sub-paragraphs (i), (ii)(c)
and (ii)(d) in "Mandatory suspension of interest" above, the Issuer is
required to pay the relevant Interest Amount on any Interest Payment
Date in full if and to the extent that during the Look-Back Period:
(i)
the Issuer has declared or paid dividends or other
distributions on any Junior Obligations (other than in the form
of further or other Junior Obligations); or
(ii)
the Issuer or any of its Subsidiaries has redeemed,
repurchased or acquired any Junior Obligations (other than in
the case of a Permitted Repurchase),
in each case except and to the extent that a Capital Deficiency Event
has occurred during the period commencing immediately following
the relevant Pusher Event and ending on the relevant Interest
Payment Date, and is continuing on such Interest Payment Date.
Notwithstanding the provisions described in "Optional suspension of
interest" and "Mandatory suspension of interest" above, the Issuer is
required to pay the relevant Interest Amount in full on the Original
Principal Amount on an Interest Payment Date if a Capital
Disqualification Event has occurred and is continuing.
For further information, see Condition 5.3 (Mandatory payment of
interest).
The Issuer will use its best efforts to adopt a consistent approach
with respect to interest payments for holders of both its Parity
Obligations and the Notes.
Loss absorption
If and to the extent that the Issuer suffers losses which would result in
a Capital Deficiency Event, the Issuer, taking into account its specific
financial and solvency condition and at its sole discretion, may
declare that its obligations relating to the principal amount of the
Notes be written down to the extent necessary to enable the Issuer to
continue to carry on its activities as determined in Condition 6.3
(Principal write down mechanics).
In any case, the obligations of the Issuer relating to the principal
amount of the Notes will be written down if:
(i)
under the relevant Capital Deficiency Event, the total risk-
based capital ratio (coefficiente patrimoniale complessivo) of the
Issuer, on a consolidated or non-consolidated basis, falls below
6 per cent. or such other minimum threshold of the Lead
Regulator relating to mandatory principal write down
specified from time to time in Bank of Italy regulations; or
9



(ii)
the Lead Regulator, in its sole discretion, notifies the Issuer
that it has determined that the Issuer's financial condition is
deteriorating such that a Capital Deficiency Event is likely to
occur in the short term; or
(iii)
the Lead Regulator determines that the specific financial and
solvency condition of the Issuer requires a write down of the
principal amount of the Notes.
Any write-down of the outstanding principal amount of the Notes
shall be made (i) pari passu and pro rata with (a) the Issuer's non-
consolidated Tier 1 Capital (patrimonio di base) (as determined in
accordance with the Bank of Italy Regulations), excluding any
innovative or non-innovative capital instruments treated as own
funds, and (b) any innovative or non-innovative capital instruments
or other securities which would be subject to write down features
similar to those provided under Condition 6 (Loss Absorption)
(howsoever described in the terms of the relevant securities and
ignoring, for this purpose, any ineligibility resulting from any
applicable limitations on the amount of such capital), and (ii) to the
extent that new capital would need to be generated to off-set the
relevant losses and bring the total risk-based capital ratio (coefficiente
patrimoniale complessivo) of the Issuer above the minimum
requirements of the Lead Regulator specified in the Bank of Italy
Regulations (being, as at the date of this Prospectus, 8 per cent.).
For further information, see Condition 6 (Loss Absorption).
Reinstatement following loss
Following a Principal Write Down Event, the obligations of the Issuer
absorption
to make payments in respect of the principal amount of the Notes will
be reinstated:
(i)
in whole to the Original Principal Amount, in the event of
voluntary or involuntary winding up, dissolution, liquidation
or bankruptcy (including, inter alia, Liquidazione Coatta
Amministrativa) of the Issuer and with effect immediately prior
to the commencement of such winding up, dissolution,
liquidation or bankruptcy (including, inter alia, Liquidazione
Coatta Amministrativa); and
(ii)
in whole or in part, from time to time, up to the Original
Principal Amount, to the extent that the Principal Write Down
Event has ceased and is no longer continuing, and provided
that (a) the Issuer has reported Distributable Profits following
the occurrence of the Principal Write Down Event, and (b)
reinstatement of the principal amount of the Notes occurs pro
rata (taking into account the Original Principal Amount) and
pari passu with ordinary shares and other outstanding
securities (if any) of the Issuer, which are subject to write
10