Obbligazione Croatica 5.5% ( XS0908769887 ) in USD

Emittente Croatica
Prezzo di mercato 100 USD  ▼ 
Paese  Croazia
Codice isin  XS0908769887 ( in USD )
Tasso d'interesse 5.5% per anno ( pagato 2 volte l'anno)
Scadenza 04/04/2023 - Obbligazione è scaduto



Prospetto opuscolo dell'obbligazione Croatia XS0908769887 in USD 5.5%, scaduta


Importo minimo 200 000 USD
Importo totale 1 500 000 000 USD
Descrizione dettagliata La Croazia offre una costa frastagliata con isole, spiagge e città storiche, un entroterra montuoso con parchi nazionali e un ricco patrimonio culturale.

The Obbligazione issued by Croatica ( Croatia ) , in USD, with the ISIN code XS0908769887, pays a coupon of 5.5% per year.
The coupons are paid 2 times per year and the Obbligazione maturity is 04/04/2023







REPUBLIC OF CROATIA
U.S.$1,500,000,000 5.500 PER CENT. NOTES DUE 2023
Issue price: 99.054 per cent.
The U.S.$1,500,000,000 5.500 per cent. Notes due 2023 (the "Notes") are issued by the Republic of Croatia (the "Issuer" or "Republic" or
"Croatia").
The Notes mature on 4 April 2023.
Application has been made to the Commission de Surveillance du Secteur Financier (the "CSSF") in its capacity as competent authority
under the Luxembourg Act dated 10 July 2005 (the "Luxembourg Act") on prospectuses for securities to approve this document as a
prospectus. The CSSF assumes no responsibility as to the economic and financial soundness of the transaction or the quality or solvency of
the Issuer in accordance with Article 7(7) of the Prospectus Act 2005. Application has also been made to the Luxembourg Stock Exchange for
the listing of the Notes on the Official List of the Luxembourg Stock Exchange and admission to trading on the Luxembourg Stock
Exchange's regulated market.
The Issuer is rated Ba1 (stable outlook) by Moody's Investors Service, Ltd., BB+ (stable outlook) by Standard & Poor's Credit Market Services
Europe Ltd., and BBB- (negative outlook) by Fitch Ratings Ltd. and the Notes will be rated Ba1 (stable outlook) by Moody's Investors Service, Ltd.,
BB+ (stable outlook) by Standard & Poor's Credit Market Services Europe Ltd., and BBB- (negative outlook) by Fitch Ratings Ltd. 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. As at the date of this Prospectus, each of the rating agencies is established in the European Union and is registered under Regulation
(EU) No 1060/2009 (as amended) (the "CRA Regulation"). As such, each of the rating agencies is included in the list of credit rating agencies
published by the European Securities and Markets Authority ("ESMA") on its website in accordance with such Regulation. In general, European
regulated investors are restricted under the CRA Regulation from using credit ratings for regulatory purposes, unless such ratings are issued by a
credit rating agency established in the EU and registered under the CRA Regulation (and such registration has not been withdrawn or suspended),
subject to transitional provisions that apply in certain circumstances whilst the registration application is pending. Such general restriction will also
apply in the case of credit ratings issued by non-EU credit rating agencies, unless the relevant credit ratings are endorsed by an EU-registered credit
rating agency or the relevant non-EU rating agency is certified in accordance with the CRA Regulation (and such endorsement action or certification,
as the case may be, has not been withdrawn or suspended). The list of registered and certified rating agencies published by ESMA on its website in
accordance with the CRA Regulation is not conclusive evidence of the status of the relevant rating agency included in such list, as there may be
delays between certain supervisory measures being taken against a relevant rating agency and the publication of the updated ESMA list. Certain
information with respect to the credit rating agencies and ratings is set out in the sections entitled "Credit Ratings", "There can be no assurance that
Croatia's credit rating will not change" and "Credit Ratings may not reflect all risks" of this Prospectus.
The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act")
or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold or
delivered within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and applicable state securities laws. Accordingly, the Notes are being offered, sold or delivered:
(a) in the United States only to qualified institutional buyers ("QIBs") (as defined in Rule 144A ("Rule 144A") under the Securities
Act) in reliance on, and in compliance with, Rule 144A; and (b) outside the United States in reliance on Regulation S ("Regulation S")
under the Securities Act. Each purchaser of the Notes will be deemed to have made the representations described in "Subscription and
Sale" and is hereby notified that the offer and sale of Notes to it, if in the United States, is being made in reliance on the exemption
from the registration requirements of the Securities Act provided by Rule 144A. In addition, until 40 days after the commencement of
the offering, an offer or sale of any of the Notes within the United States by any dealer (whether or not participating in the offering)
may violate the registration requirements of the Securities Act if the offer or sale is made otherwise than in accordance with
Rule 144A.
The Notes will initially be represented by three global certificates in registered form (the "Global Certificates"), two of which will be issued
in respect of the Notes offered and sold in reliance on Rule 144A (the "Restricted Global Certificates") and will be registered in the name of
Cede & Co., as nominee for The Depository Trust Company ("DTC") and the other of which will be issued in respect of the Notes offered
and sold in reliance on Regulation S (the "Unrestricted Global Certificate") and will be registered in the name of a nominee of a common
depositary for Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream, Luxembourg"). It is
expected that delivery of the Global Certificates will be made on 4 April 2013 or such later date as may be agreed (the "Closing Date") by the
Republic and the Joint Lead Managers (as defined under "Subscription and Sale").
Prospective investors should be aware that none of the statistical information in this Prospectus has been independently verified.
An investment in the Notes involves certain risks. Prospective investors should have regard to the factors described under the heading
"Risk Factors" on page 7.
Joint Lead Managers
BofA MERRILL LYNCH
DEUTSCHE BANK
GOLDMAN SACHS INTERNATIONAL
J.P. MORGAN
The date of this Prospectus is 3 April 2013.


THE REPUBLIC OF CROATIA
i


This Prospectus comprises a prospectus for the purposes of Article 5.3 of Directive 2003/71/EC as amended
(which includes the amendments made by Directive 2010/73/EU to the extent that such amendments have been
implemented in a relevant Member State of the European Economic Area) (the "Prospectus Directive") and for
the purposes of the Luxembourg Act.
The Republic accepts responsibility for the information contained in this Prospectus. To the best of the
knowledge of the Republic (having taken all reasonable care to ensure that such is the case) the information
contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import
of such information.
The Republic, having made all reasonable enquiries, confirms that this Prospectus contains all material
information with respect to the Republic and the Notes which is material in the context of the issue and offering
of the Notes, that the information contained in this Prospectus is true and accurate in every material respect and is
not misleading, that the opinions and intentions expressed in this Prospectus are honestly held and that there are
no other facts the omission of which makes misleading any statement herein, whether of fact or opinion.
The Joint Lead Managers (as described under "Subscription and Sale" below) have not independently verified
the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is
made and no responsibility or liability is accepted by the Joint Lead Managers as to the accuracy or completeness
of the information contained or incorporated in this Prospectus or any other information provided by the
Republic in connection with the offering of the Notes. No Joint Lead Manager accepts any liability in relation to
the information contained or incorporated by reference in this Prospectus or any other information provided by
the Republic in connection with the offering of the Notes or their distribution.
No person is or has been authorised by the Republic to give any information or to make any representation not
contained in or not consistent with this Prospectus or any other information supplied in connection with the
offering of the Notes and, if given or made, such information or representation must not be relied upon as having
been authorised by the Republic or any of the Joint Lead Managers.
Neither this Prospectus nor any other information supplied in connection with the offering of the Notes (a) is
intended to provide the basis of any credit or other evaluation or (b) should be considered as a recommendation by
the Republic or any of the Joint Lead Managers that any recipient of this Prospectus or any other information
supplied in connection with the offering of the Notes should purchase the Notes. 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 Republic. Neither this Prospectus nor any other information supplied in
connection with the offering of the Notes constitutes an offer or invitation by or on behalf of the Republic or any of
the Joint Lead Managers to any person to subscribe for or to purchase any Notes.
Neither the delivery of this Prospectus nor the offering, sale or delivery of the Notes shall in any circumstances
imply that the information contained herein concerning the Republic is correct at any time subsequent to the date
hereof or that any other information supplied in connection with the offering of the Notes is correct as of any
time subsequent to the date indicated in the document containing the same. The Joint Lead Managers expressly
do not undertake to review the financial condition or affairs of the Republic during the life of the Notes or to
advise any investor in the Notes of any information coming to their attention.
This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy the Notes in any
jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such jurisdiction. The
distribution of this Prospectus and the offer or sale of Notes may be restricted by law in certain jurisdictions. The
Republic and the Joint Lead Managers do not represent that this Prospectus may be lawfully distributed, or that
the Notes may be lawfully offered, in compliance with any applicable registration or other requirements in any
such jurisdiction, or pursuant to an exemption available thereunder, or assume any responsibility for facilitating
any such distribution or offering. In particular, no action has been taken by the Republic or the Joint Lead
Managers which is intended to permit a public offering of the Notes or the distribution of this Prospectus in any
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 advertisement or other offering material may be distributed or
published in any jurisdiction, except under circumstances that will result in compliance with any applicable laws
and regulations. Persons into whose possession this Prospectus or any Notes may come must inform themselves
about, and observe, any such restrictions on the distribution of this Prospectus and the offering and sale of Notes.
In particular, there are restrictions on the distribution of this Prospectus and the offer or sale of the Notes in the
United States, the European Economic Area (including the United Kingdom) and the Republic of Croatia, see
"Subscription and Sale".
IN CONNECTION WITH THE ISSUE OF THE NOTES, DEUTSCHE BANK AG, LONDON BRANCH
AS STABILISING MANAGER (THE "STABILISING MANAGER") (OR PERSON(S) ACTING ON
BEHALF OF THE STABILISING MANAGER) MAY OVER-ALLOT NOTES OR EFFECT
ii


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
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 CLOSING DATE OF THE NOTES AND 60 DAYS AFTER THE DATE OF THE
ALLOTMENT OF THE NOTES. ANY STABILISATION ACTION OR OVER-ALLOTMENT MUST BE
CONDUCTED BY THE RELEVANT STABILISING MANAGER(S) (OR PERSONS ACTING ON
BEHALF OF ANY STABILISING MANAGER(S)) IN ACCORDANCE WITH ALL APPLICABLE
LAWS AND RULES.
The Notes have not been approved or disapproved by the United States Securities and Exchange Commission or
any other securities commission or other regulatory authority in the United States, nor have the foregoing
authorities reviewed or passed upon the accuracy or adequacy of this Prospectus. Any representation to the
contrary is a criminal offence.
This Prospectus is being submitted on a confidential basis in the United States to a limited number of QIBs for
informational use solely in connection with the consideration of the purchase of the Notes. It may not be copied
or reproduced in whole or in part nor may it be distributed or any of its contents disclosed to anyone other than
the prospective investors to whom it is originally submitted.
Each purchaser or holder of interests in the Notes will be deemed, by its acceptance or purchase of any such
Notes, to have made certain representations and agreements as set out in "Subscription and Sale".
NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE
HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES WITH
THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY
REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A
FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED
UNDER CHAPTER 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT
NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A
TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE
MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON,
SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY
PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT
WITH THE PROVISIONS OF THIS PARAGRAPH.
SERVICE OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES
The Republic is a foreign sovereign nation, and a substantial portion of the assets of the Republic are located
outside the United States and the United Kingdom. As a result, it may not be possible for investors to effect
service of process within the United States or the United Kingdom upon the Republic, or to enforce judgements
obtained in courts located in the United States or United Kingdom, including judgements predicated upon civil
liability provisions of the securities laws of the United States or any state or territory within the United States.
A substantial part of the Republic's assets are located in the Republic of Croatia and the courts of the Republic of
Croatia may refuse to recognise a judgement obtained in a foreign jurisdiction (including, but not limited to
England and the United States) in certain cases according to the provisions of the Croatian Law on Resolving
Conflicts of Law with Other Countries' Laws and Regulations in Certain Matters (OG 53/1991). Once
recognised, a foreign judgement is equal to the judgment of a Croatian court and is fit for enforcement in the
Republic of Croatia.
iii


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this Prospectus, as well as written and oral statements that Republic and its
representatives make from time to time in reports, filings, news releases, conferences, teleconferences, web
postings or otherwise, are or may be deemed to be forward-looking statements. Statements that are not historical
facts, including, without limitation, statements about the Republic's beliefs and expectations, are forward-looking
statements. These statements are based on current plans, objectives, assumptions, estimates and projections.
When used in this Prospectus, the words "anticipates", "estimates", "expects", "believes", "intends", "plans",
"aims", "seeks", "may", "will", "should" and any similar expressions generally identify forward-looking
statements. Therefore, undue reliance should not be placed on them. The Republic has based these
forward-looking statements on its current view with respect to future events and financial results.
Forward-looking statements speak only as of the date on which they are made and the Republic undertakes no
obligation to update publicly any of them in light of new information or future events. Forward-looking
statements involve inherent risks and uncertainties. The Republic cautions that a number of important factors
could cause actual results to differ materially from those contained in any forward-looking statement.
Forward-looking statements include, but are not limited to: (i) plans with respect to the implementation of
economic policy, including privatisations, and the pace of economic and legal reforms; (ii) expectations about the
behaviour of the economy if certain economic policies are implemented; (iii) the outlook for gross domestic
product, inflation, exchange rates, interest rates, foreign investment, trade and fiscal accounts; and (iv) estimates
of external debt repayment and debt service.
In addition to the factors described in this Prospectus, including those discussed under the "Risk Factors", the
following factors, among others, could cause future results to differ materially from those expressed in any
forward-looking statements made herein:
· adverse external factors, such as global or regional economic slowdowns that may affect the Republic, higher
international interest rates, reduced demand for the Republic's exports or increases in oil and gas prices, which
could each adversely affect the Republic's economy and in particular could negatively affect the current
account, balance of payments and international reserves and cause or contribute to recession or low growth in
the Republic;
· adverse domestic factors, such as recession, declines in foreign direct investment ("FDI") and portfolio
investment, high domestic inflation, high domestic interest rates, exchange rate volatility, a reduction in gas
supplies, difficulties in borrowing in the domestic and foreign markets, trade and political disputes between the
Republic and its trading partners, political uncertainty or lack of political consensus, which could each lead to
lower growth in the Republic and lower international currency reserves;
· decisions of the Republic's official creditors regarding the provision of new debt or rescheduling of the
existing debt and decisions of international organisations regarding the terms of their financial assistance to the
Republic, and accordingly the net cash flow to or from the Republic over the life of the Notes;
· decisions of international financial institutions such as the International Monetary Fund (the "IMF"), the
World Bank, the European Bank for Reconstruction and Development (the "EBRD") and the European
Investment Bank (the "EIB") regarding the funding of new or existing projects over the life of the Notes; and
· political and economic factors in the Republic and abroad, which affect the timing and structure of economic
reforms in the Republic, the success and timing of the Republic's accession to the European Union ("EU"), the
climate for FDI and the pace, scale and timing of privatisations in the Republic.
iv


DEFINED TERMS AND CONVENTIONS
The following terms are used to refer to economic concepts that are discussed in this Prospectus:
· Gross domestic product ("GDP") means the total value of goods and services produced inside a country during
the relevant period. Unless otherwise stated references to GDP is to real, rather than nominal, GDP.
· Gross value added ("GVA") is the value of output less the value of intermediate consumption; it is a measure
of the contribution to GDP made by an individual producer, industry or sector and is used to estimate GDP.
GVA (measured by sector) plus taxes minus subsidies equals GDP.
· Imports comprise all goods and services imported from abroad intended either for consumption or for inward
processing. Exports comprise all goods and services exported from Croatia, which originate from domestic
production or internal trade.
· The registered unemployment rate is calculated as the ratio of the members of the active population who
register with local employment agencies as being unemployed to the total active population.
"Active Population" means people employed and people over the age of 15 registered as seeking employment.
· The inflation rate is measured by the year-on-year percentage change in the consumer price index ("CPI"),
unless otherwise specified. The CPI index, measures inflation based on the price of a basket of approximately
740 goods and services weighted according to the Household Budget Survey and retail sales data. Croatia also
measures inflation in terms of producer price index ("PPI"), which is the measure of wholesale prices at the
producer level calculated based on a basket of approximately 400 industrial products. Unlike CPI, PPI does not
take into account services. Year-on-year rates are calculated by comparing the average of the twelve monthly
indices for the later period against the average of the twelve monthly indices for the prior period.
· The budgetary central government deficit is consolidated revenues minus consolidated expenditures of the
general government. "Budget deficit" is the principal measure of fiscal balance for countries participating in
the European Economic and Monetary Union.
· The Standard International Trade Classification ("SITC") is a statistical classification of the commodities
entering external trade. It is designed to provide the commodity aggregates required for the purposes of
economic analysis and to facilitate the international comparison of trade-by-commodity data.
· General government debt ("general government debt") consists of the sum of: (i) central government debt;
(ii) extra budgetary debt (of government funds and agencies); and (iii) local government debt.
Capitalised terms which are used but not defined in any particular section of this Prospectus will have the
meaning attributed thereto in "Conditions of the Notes" or any other section of this Prospectus.
Certain figures and percentages included in this Prospectus have been subject to rounding adjustments;
accordingly figures shown in the same category presented in different tables may vary slightly and figures shown
as totals in certain tables may not be an arithmetic aggregation of the figures which precede them.
References to a "billion" are to a thousand million.
All references in this document to "U.S. dollars", "dollars", "U.S.$", "USD" and "$" refer to United States
dollars, to "CHF" refer to Swiss francs and to "HRK" and "Kuna" refer to the lawful currency for the time
being of the Republic. In addition, references to "euro", "EUR" and "" refer to the currency introduced at the
start of the third stage of European economic and monetary union pursuant to the Treaty on the Functioning of
the European Union, as amended. References to "Old EU Member States" refer to Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal, Spain, Sweden and
United Kingdom whereas references to "New EU Member States" are to all other Member States of the
European Union.
References to "OG" and "Official Gazette" are to "Narodne novine", the official newspaper of the Republic of
Croatia for the publication of acts, laws and other rules and regulations of the Croatian Parliament, the Croatian
Government, the Ministries and other regulatory bodies and of the President of the Republic of Croatia.
Legislation generally becomes effective eight days following publication in the Official Gazette.
v


INFORMATION SOURCES
The statistical information in this Prospectus has been derived from a number of different identified sources. All
statistical information provided in this Prospectus may differ from that produced by other sources for a variety of
reasons, including the use of different definitions and cut-off times.
The source for most of the financial and demographic statistics for Croatia included in this Prospectus is data
prepared by the Republic's Central Bureau of Statistics ("CBS"), a Croatian independent entity established to
provide comprehensive statistical information, and the Croatian National Bank ("CNB"). The CBS harmonises,
to the extent possible, its programmes and methodologies with the statistics of the EU. Certain other financial
and statistical information contained herein has been derived from official Croatian government sources
including the Ministry of Finance. The statistical information presented herein is based on the latest official
information currently available from the stated source. Several statistics are provisional and are noted as such
where presented. The development of statistical information relating to Croatia is however, an ongoing process,
and revised figures and estimates are produced on a continuous basis. Figures presented may be subject to
rounding.
EXCHANGE RATES
The following table sets forth, for the periods indicated, the period end, average, high and low official mid-point
rates published by the Croatian National Bank, expressed in Kuna per U.S. Dollar.
Period End
Average(1)
High
Low
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.155504
4.934417
5.801776
4.522752
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.089300
5.280370
5.941123
4.803825
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.568252
5.500015
6.088922
5.009663
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.819940
5.343508
5.825236
4.947426
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.958320
6.089386
6.194939
5.615424
January 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.594294
5.701444
5.809095
5.594294
February 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.795890
5.652694
5.795164
5.597661
March 2013 (through to 15 March) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.860674
5.812038
5.835855
5.788220
Source: Croatian National Bank
(1) Average of daily rates.
vi


CONTENTS
Page
OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
CONDITIONS OF THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
THE GLOBAL CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31
OVERVIEW OF THE REPUBLIC OF CROATIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32
THE ECONOMY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41
STRUCTURAL MEASURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
68
FOREIGN TRADE AND INTERNATIONAL BALANCE OF PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . .
74
MONETARY DEVELOPMENTS AND INTERNATIONAL RESERVES . . . . . . . . . . . . . . . . . . . . . . . . . .
90
PUBLIC FINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
117
PUBLIC DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
128
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
137
CLEARING AND SETTLEMENT ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
139
SUBSCRIPTION AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
143
TRANSFER RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
145
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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OVERVIEW
This Overview does not purport to be complete and must be read as an introduction to this Prospectus and any
decision to invest in the Notes should be based on a consideration of this Prospectus as a whole.
Words and expressions defined in "Conditions of the Notes" shall have the same meanings in this Overview.
THE REPUBLIC OF CROATIA
Territory and Population
Croatia occupies a total area of 87,661 square kilometres, of which 56,594 square kilometres is land and
31,067 square kilometres is sea. The capital city, Zagreb, is located in the north of the country. The Dinaric Alps,
which rise to 1,831 metres above sea level, run the length of the country. Croatia borders Slovenia to the north
and Montenegro to the east and shares a sea border with Italy to the west and south. The Danube forms the
eastern border with Serbia while the other two large rivers, the Sava and Drava, form the southern and northern
borders with Bosnia Herzegovina and Hungary, respectively. The area of land between the rivers is dissected by
many smaller tributaries. The Adriatic coastline is the most prominent feature of Croatia, running the entire
length of the western border, from the Istrian peninsula in the north to Dubrovnik in the South with
approximately 1,185 islands along the coast.
According to the preliminary 2011 CBS census results: Zagreb is the largest city in the country, with a population
of 792,875, and is considered the leading industrial, cultural and scientific centre in Croatia. Other cities of
significant size include Split (population 178,192), Rijeka (population 128,735), Osijek (population 107,784) and
Zadar (population 75,082). According to the 2011 census, the total population of the country was 4,290,612.
Constitution and Government Structure
Croatia's constitution was adopted on 22 December 1990 and was substantially amended in December 1997,
November 2000, April 2001 and June 2010 (the "Constitution"). It established a multi-party democracy, with an
economy based on market principles and private ownership. Under the Constitution, the President of Croatia (the
"President") is elected for five-year terms and may not serve more than two terms. The current President, Ivo
Josipovic, was elected in February 2010. The President appoints, with the consent of the President of the
Parliament, a Prime Minister of the Government (the "Prime Minister") who, in turn, appoints Government
Ministers. The current Prime Minister is Zoran Milanovic, appointed in December 2011. The Constitution is
based on the separation of powers between the legislature, executive and judiciary. The most recent
parliamentary elections were held on 4 December 2011.
Judicial Reform
In 2008, the Government commenced a reform of the judiciary (the "Judicial Reform") in order to combat
corruption and restore confidence in the judicial system. The Ministry of Justice has been undertaking measures
aimed at establishing a more efficient judicial system founded upon principles of independence and
professionalism. The objectives of the Judicial Reform include strengthening the rule of law, improving the
efficiency and effectiveness of the judicial system, shortening the period of time between the commencement and
conclusion of training, and improving professionalism and ongoing training of the staff. In particular, since 2008
legislation has been enacted towards furthering the independence of the judicial system and reducing the backlog
of court cases. As of the date of this Prospectus, the majority of the Government's judicial reform measures have
been enacted and taken force in anticipation of Croatia's accession to the EU.
International Relations
After gaining independence, Croatia was admitted to the United Nations (the "UN") in May 1992. In the same
year, Croatia became a participant country in the Organisation for Security and Co-operation in Europe
("OSCE") and became a member of the International Monetary Fund ("IMF"). In 1996, Croatia became the 40th
Member State of the Council of Europe. In October 2000, Croatia became a member of the World Trade
Organisation ("WTO"), while in 2002 it acceded to the Central European Free Trade Area. Furthermore, Croatia
was elected as a non-permanent member of the UN Security Council for the period 2008-2009, holding the
Council's Presidency in December 2008. In April 2009, Croatia acceded to the North Atlantic Treaty
Organisation ("NATO"). Croatia became a candidate country for EU accession in June 2004 and the accession
process is currently in its final phase, as discussed below.
European Union Accession
In October 2005, the EU Council of Ministers formally opened Croatia's accession negotiations with the EU.
Following the adoption of the EU acquis communitaire into national law and the completion of negotiations,
1


Croatia signed the EU Accession Treaty (the "Accession Treaty") on 9 December 2011. Full EU membership is
expected on 1 July 2013. On 22 January 2012, EU accession was approved in a national referendum, with
66.27 per cent. of those participating voting in favour and 33.13 per cent. voting against. Prior to accession, the
EU will continue to monitor Croatia's compliance with the acquis communitaire. The final pre-accession
evaluation report on Croatia was issued by the EU on 26 March 2013. In addition, the parliament of each EU
member state must ratify the Accession Treaty before it can come into effect and the instruments of ratification
must be deposited with the Government of the Italian Republic. Therefore, only upon fulfilment of those
conditions, can the Accession Treaty be considered officially ratified in an individual member state. As of the
date hereof, seven EU member states have still not ratified the Accession Treaty; five EU member states have
obtained parliamentary approval and twenty EU member states have finished the ratification procedure and
deposited documents with the Government of the Italian Republic.
Economy
One of the main objectives of Croatia's economic policy is to continue the process of narrowing the gap between
its GDP per capita and the EU average. According to Eurostat estimates, as at 31 December 2010 (the latest year
for which data is available), Croatia's per capita income was approximately 61 per cent. of the GDP per capita of
the 27 EU member states in purchasing power terms.
The framework and goals of the economic policy of Croatia are defined in a series of strategic documents of the
Government, namely: the Strategic Development Framework for 2006-2013, the Government Programmes
Strategy 2013-2015, the Economic and Fiscal Policy Guidelines and the Pre-accession Economic Programme
(the "PEP"). Those documents provide the basis for the implementation of the economic policy in the medium
term period, and they are prepared through consultations between the Government administration bodies and
employers' and unions' representatives.
The main objective of the economic policy in the current macroeconomic environment is to preserve
macroeconomic stability and create conditions for recovery and stable economic growth.
GDP
The effects of the global financial and economic crisis were first felt in Croatia in the second half of 2008 and
intensified towards the end of the year. The negative impact of the crisis intensified further in 2009 and annual
GDP contracted by 6.9 per cent. in 2009. This trend continued in 2010, with annual GDP for 2010 contracting by
2.3 per cent. In 2011 GDP recorded a growth rate of 0.0 per cent. in real terms, year-on-year. In 2012, Croatia's
real GDP contracted by 2.0 per cent. This contraction was a result of deleveraging of the households' sector,
negative labour market developments, pessimistic expectations, decreased credit activity (high risk aversion and
low demand), slower dynamics of foreign demand and decreased foreign capital inflow. While not an official
forecast, certain Government officials have indicated that original GDP growth projections for 2013 will be
revised downward from 1.8 per cent. to 0.7 per cent.
Gross Value Added
GVA in real terms declined by 6.3 per cent. in 2009 as compared to 2008 when it grew by 2.4 per cent. This
decline was largely attributable to the real GVA decrease in the wholesale and retail trade sector and the mining,
quarrying, manufacturing, electricity, gas and water supply sectors. The GVA dynamics and trends in 2009 and
2010 were primarily due to the negative effects of the global financial and economic crisis. In 2010, GVA
declined by 2.6 per cent. compared to a decline of 6.3 for 2009. This decrease was mainly due to real GVA
decreases in the construction (15.8 per cent.) and wholesale and trade, transportation, storage and accomodation
(2.9 per cent.) sectors. 2011 saw a slight contraction of in GVA of 0.2 per cent., year-on-year. Nominal GVA
increased from HRK 288,356 million in 2010 to HRK 295,165 million in 2011. The contraction was mainly the
result of a real increase in GVA in professional, scientific, technical, administrative support and services (3.4 per
cent.), and a real decrease of GVA recorded in construction (9.1 per cent.). In 2012, GVA decreased further by
2.6 per cent. This decrease was primarily a result of real GVA decreases in agiculture, forestry and fishing,
manufacturing, mining and quarrying and other industries (6.2 per cent.), construction (11.4 per cent.) and
manufacturing (5.2 per cent.).
Inflation
Price stability has consistently been the primary goal of the Croatian National Bank's (the "CNB") monetary
policy, which the CNB pursues primarily through the maintenance of the relatively stable HRK/EUR exchange
rate. The average annual rate of inflation as measured by the consumer price index ("CPI") increased from
2