Obbligazione Nordbank 6.25% ( XS1055787680 ) in USD

Emittente Nordbank
Prezzo di mercato 100 USD  ▲ 
Paese  Germania
Codice isin  XS1055787680 ( in USD )
Tasso d'interesse 6.25% per anno ( pagato 2 volte l'anno)
Scadenza 09/04/2024 - Obbligazione è scaduto



Prospetto opuscolo dell'obbligazione Norddeutsche Landesbank XS1055787680 in USD 6.25%, scaduta


Importo minimo 200 000 USD
Importo totale 500 000 000 USD
Cusip D57188FH8
Standard & Poor's ( S&P ) rating N/A
Moody's rating N/A
Descrizione dettagliata Norddeutsche Landesbank (NordLB) è una banca pubblica tedesca con sede ad Hannover, specializzata in finanziamenti per il settore pubblico e l'economia nord-tedesca.

The Obbligazione issued by Nordbank ( Germany ) , in USD, with the ISIN code XS1055787680, pays a coupon of 6.25% per year.
The coupons are paid 2 times per year and the Obbligazione maturity is 09/04/2024








9 April 2014
PROSPECTUS


Norddeutsche Landesbank Girozentrale
Hanover

(incorporated as public law institution (Anstalt des öffentlichen Rechts) established under, and governed by, the laws of the Federal
Republic of Germany and the German Federal States (Bundesländer) of Lower Saxony (Niedersachsen) and Saxony-Anhalt (Sachsen-
Anhalt))

("Norddeutsche Landesbank ­ Girozentrale ­", "NORD/LB" or the "Issuer")

U.S.$500,000,000 Subordinated Fixed Rate Tier 2 Notes due 2024 (the "Notes")
Issue Price of the Notes: 100.00 per cent. of the principal amount

The Notes constitute direct, unconditional, subordinated and unsecured liabilities of the Issuer, as described in Section 2 of the Terms
and Conditions of the Notes, and, unless previously redeemed or repurchased and cancelled, will mature on 10 April 2024 (the
"Maturity Date").

The Notes will bear interest on their Par Value (as defined in Section 1 of the Terms and Conditions of the Notes), payable semi-
annually in arrear on 10 April and 10 October of each year (each an "Interest Payment Date"), from 10 April 2014 (the "Issue Date")
(inclusive) until the Maturity Date (exclusive) at the rate of 6.25 per cent. per annum.

The Issuer may, at its option, redeem the Notes, in whole but not in part, for certain withholding tax reasons or upon the occurrence of a
Regulatory Event (as defined in Section 5 Paragraph (2) of the Terms and Conditions of the Notes) at their Par Value plus accrued
interest. Any such redemption is subject to the prior permission of the competent regulatory authority, if required, as described in
Section 5 Paragraph (4) of the Terms and Conditions of the Notes.

This prospectus (the "Prospectus") constitutes a prospectus within the meaning of Article 5.3 of Directive 2003/71/EC of the European
Parliament and of the Council of 4 November 2003 (as amended, inter alia, by Directive 2010/73/EU) (the "Prospectus Directive") and
has been drafted in accordance with the Luxembourg law relating to prospectuses for securities of 10 July 2005 (Loi du 10 juillet 2005
relative aux prospectus pour valeurs mobilières), as amended, (the "Luxembourg Prospectus Law"), which implements the
Prospectus Directive into Luxembourg law.

This Prospectus has been approved by the Commission de Surveillance du Secteur Financier (the "CSSF") in its capacity as competent
authority under the Luxembourg Prospectus Law, and will be published in electronic form on the website of the Luxembourg Stock
Exchange (www.bourse.lu) and on the Issuer's website (http://www.nordlb.de). Pursuant to Article 7(7) of the Luxembourg Prospectus
Law, by approving this Prospectus, the CSSF does not give any undertaking as to the economic and financial soundness of the
transaction contemplated by this Prospectus or the quality or solvency of the Issuer.

Application has been made to the Luxembourg Stock Exchange for admission of the Notes to the Official List (Bourse de Luxembourg)
and to trading on the regulated market of the Luxembourg Stock Exchange. The regulated market of the Luxembourg Stock Exchange
is a regulated market for the purposes of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on
markets in financial instruments. The Notes have a denomination of U.S.$200,000 each.

An investment in the Notes involves certain risks. Prospective investors should have regard to the factors described in the
section "Risk Factors" below. The offer, sale and delivery of the Notes and the distribution of this Prospectus in certain
jurisdictions is restricted by law. Persons into whose possession this Prospectus comes are required by the Issuer and any
Joint Lead Managers (as defined below) to inform themselves about and to observe any such restrictions. In particular, the
Notes have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities
Act"), and are subject to special U.S. tax law requirements where held by U.S. persons (TEFRA D rules). Subject to certain
limited exceptions, the Notes may not be offered, sold or delivered within the United States of America ("United States") or to,
or for the account or benefit of, U.S. persons.

For a further description of certain restrictions on offerings and sales of the Notes and distribution of this Prospectus (or of any part
thereof) see "Selling Restrictions and Related Information".

The Notes will initially be represented by a temporary global note (the "Temporary Global Note"), without interest coupons, which will
be deposited on or about 10 April 2014 (the "Closing Date") with a common depositary for Euroclear Bank SA/NV ("Euroclear") and
Clearstream Banking, société anonyme ("Clearstream, Luxembourg"). Interests in the Temporary Global Note will be exchangeable
for interests in a permanent global note (the "Permanent Global Note" and, together with the Temporary Global Note, the "Global
Notes"), without interest coupons, on or after 20 May 2014 (the "Exchange Date"), upon certification as to non-U.S. beneficial
ownership. Notes in definitive form for individual notes or interest coupons will not be issued.

Sole Global Coordinator

HSBC

Joint Lead Managers

BNP PARIBAS
HSBC


J.P. MORGAN



NOMURA
THE ROYAL BANK OF SCOTLAND










































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TABLE OF CONTENTS


I. RISK FACTORS .................................................................................................... 4
1. Risk factors relating to the Issuer ...................................................................... 4
2. Risk factors relating to regulatory aspects concerning credit institutions in

general ............................................................................................................ 10
3. Risk factors relating to the Notes .................................................................... 18
II.

II
RESPONSIBILITY .............................................................................................. 25
I.

DESCRIPTION OF NORDDEUTSCHE LANDESBANK ­ GIROZENTRALE ­ 26
1. Auditors ........................................................................................................... 26
2. General information relating to the Issuer ....................................................... 26
3. Ratings ............................................................................................................ 27
4. Recent events in the business activities of Norddeutsche Landesbank ­

Girozentrale ­ .................................................................................................. 29
5. Business overview ........................................................................................... 31
6. Organisational structure .................................................................................. 38
7. Trend Information ............................................................................................ 39
8. Governing bodies of Norddeutsche Landesbank ­ Girozentrale ­ ................. 39
9. Owners of Norddeutsche Landesbank ­ Girozentrale ­ ................................. 45
10.

Historical Financial Information ................................................................. 45
11. Court and Arbitration Proceedings ................................................................ 46
12. Significant changes in the financial position ................................................. 46
IV.

DESCRIPTION OF THE NOTES ........................................................................ 47
1. Terms and Conditions of the Notes ................................................................ 47
2. General information concerning the Notes ..................................................... 65
V.

TAXATION .......................................................................................................... 68
1. Taxation in Germany ....................................................................................... 68
2. EU Savings Directive on the taxation of savings income ................................ 71
VI.

VI
SELLING RESTRICTIONS AND RELATED INFORMATION ........................... 73
I.

VI IMPORTANT NOTICES ...................................................................................... 78
II.

GENERAL INFORMATION ................................................................................. 79
1. Authorisation ................................................................................................... 79
2. Availability of documents ................................................................................. 79
3. Incorporation by reference .............................................................................. 79
4. Third party information .................................................................................... 81
5. Joint Lead Managers transacting with the Issuer ........................................... 81
IX.



NAMES AND ADDRESSES ............................................................................... 82


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I. RISK FACTORS

Words and expressions defined under "Terms and Conditions of the Notes" below or
elsewhere in this Prospectus have the same meanings, unless otherwise noted.

Prospective investors should read the entire Prospectus. Investing in the Notes involves
certain risks. The information set forth below is a disclosure of risk factors, that are known to
the Issuer at the date of this Prospectus and, that are material to the Notes. Additional risk
factors that are not known at the date of this Prospectus or currently believed to be immaterial
could likewise have an adverse effect on the value of the Notes. This applies, in particular, to
the risk factors set out below under "2. Risk factors relating to regulatory aspects concerning
credit institutions in general". Investors need to understand that the regulation of credit
institutions is under current and ongoing review and development which enhances the risk
that new risk factors which are not known as of the date of this Prospectus will develop as a
result of new regulations and actions applying to financial institutions in the near furture.

1. Risk factors relating to the Issuer

The risks factors relating to the Issuer set out below describe the material risks of Norddeutsche
Landesbank ­ Girozentrale ­ as a financial institution on an unconsolidated basis and in its capacity as
parent company of its ful y consolidated subsidiaries being, inter alia, the following financial institutions:
Bremer Landesbank Kreditanstalt Oldenburg ­ Girozentrale ­, Norddeutsche Landesbank
Luxembourg S.A., NORD/LB Covered Finance Bank S.A. and Deutsche Hypothekenbank (Actien-
Gesel schaft) (also referred to in this section as "NORD/LB and its Subsidiaries"). Norddeutsche
Landesbank ­ Girozentrale ­ defines risks as being "material" all relevant risks which could have a
negative impact on NORD/LB's resources, earnings, its liquidity position or the achievement of its
strategic goals. Such risks may limit the Issuer's ability to fulfil its obligations vis-à-vis investors under
the Notes.

Overview of applicable risks

NORD/LB and its Subsidiaries are primarily exposed to the following types of risks:

(i) credit
risk;


(ii)
investment risk;

(iii)
market price risk;

(iv)
liquidity risk; and

(v) operational
risk.

Credit risk is part of counterparty risk and is divided into - classical credit risk - (understood as the risk
of loss due to default or credit deterioration of credit debtors) and - credit risk of trade - (understood as
the risk that a loss is suffered, due to a failure or deterioration in the creditworthiness of a borrower or
counterparty in commercial transactions). Credit risk of trade is divided into risk from trading,
replacement risk, settlement risk and issuer risk.

Investment risk is another component of credit risk. It denotes the risk of loss resulting from the
undertaking of providing equity capital to third parties or the loss resulting from other financial
obligations to third parties. In addition to the original counterparty risk, in cross-border capital services,
country credit risk may occur, also referred to as transfer risk.

Market price risk refers to potential losses that may arise from changes in market parameters. It is
divided into interest-rate, currency, equity, fund and price volatility risk, as well as credit spread risk of
the assets.


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Liquidity risk includes risks that may result from disruptions in the liquidity of individual market
segments, unexpected events in lending, deposit or investment banking or deterioration of its own
refinancing conditions. It has to be distinguished between classical liquidity risk, funding risk and
market liquidity risk. In addition, placement risk emerging from own issues is viewed as part of liquidity
risk.
Operational risk is the risk of damages resulting from inadequate or failed internal processes,
employees and technology or from external influences. This definition includes legal and reputational
risks. In the understanding of NORD/LB and its Subsidiaries operational risk also includes compliance
risk, outsourcing risk, the dilution risk and fraud risk.

Specification of risks with regard to the Issuer

NORD/LB and its Subsidiaries are subject to significant counterparty and market price risks
and such risks are exacerbated by periods of financial crisis and recession.

NORD/LB and its Subsidiaries are exposed to counterparty risk, inter alia to credit risk of third parties,
primarily with regard to the traditional lending and deposit-taking business, but also, to a lesser extent,
to non-traditional businesses such as derivative transactions, securities, owning securities of third
parties, and other credit arrangements. This exposes them to the risk of counterparty defaults.

Furthermore, there is a risk for NORD/LB and its Subsidiaries that contractors fail to pay their
contractual payment obligations. Even if customers are responsible for losses incurred by the
acquisition of items on their own account, NORD/LB and its Subsidiaries may be exposed to other
credit risks in order to protect themselves against these losses. It may also have a negative impact on
the business of NORD/LB and its Subsidiaries, if customers suffer losses and lose confidence in the
products and services of NORD/LB and its Subsidiaries.

Another form of credit risk is country credit risk in cross-border financial services and business
activities. This risk is manifested when political difficulties and political instability in a country endanger
or diminish the value of assets. Country credit risk applies to both the country concerned, if it is a
contractual partner, and contractual partners in general.

The ongoing economic and financial debt crisis in the European Union comprises a country credit risk
for NORD/LB and its Subsidiaries, since it entails market uncertainty in several countries of the
European Union.

The Credit risk may also be manifested as settlement risk, which involves the possibility of a bank
paying funds to a counterparty but failing to receive the corresponding settlement in return. NORD/LB
and its Subsidiaries are exposed to many different industries and counterparties in the normal course
of their business, but the exposure to counterparties in the financial services industry is particularly
significant. This exposure can arise through trading, lending, deposit-taking, clearance and settlement
and many other activities and relationships. These counterparties include municipal savings banks,
financial services firms, commercial banks, investment banks, mutual funds and other institutional
clients. Many of these relationships expose NORD/LB and its Subsidiaries to credit risk in the event of
default of a counterparty and to systemic risk affecting their counterparties. Where NORD/LB and its
Subsidiaries hold collateral against counterparty exposures, they may not be able to realise it or
liquidate it at prices sufficient to cover the full exposures. Many of the hedging and other risk
management strategies utilised by NORD/LB also involve transactions with financial service
counterparties. The failure of these counterparties to settle or the perceived weakness of these
counterparties may impair the effectiveness of NORD/LB's hedging and other risk management
strategies.

NORD/LB and its Subsidiaries also establish provisions for loan losses, which are reflected in the
provision for impairment losses in the consolidated income statement, in order to maintain appropriate
allowances for loan losses based upon an assessment of prior loan loss experience, the volume and
type of lending being conducted by each bank, industry standards, past due loans, economic
conditions and other factors related to the collectability of each entity's loan portfolio.

5





This determination is based primarily on NORD/LB's and its Subsidiaries' historical experience and
judgment, and they may have to increase or decrease their provisions for loan losses in the future as a
result of increases or decreases in non-performing assets or for other reasons. Any increase in the
provision for loan losses, any loan losses in excess of the previously determined provisions with
respect thereto or changes in the estimate of the risk of loss inherent in the portfolio of non-impaired
loans could have a material adverse effect on the Issuer's business or on the Issuer's results of
operations or financial condition.

The quality of the credit portfolio of NORD/LB and its Subsidiaries deteriorated in 2013 due to
continual negative rating migrations in the shipping sector and resulted in a notable increase in loan
loss provisions.

Due to the current situation in the global market, in particular as regards the low level of utilisation of
capacity and freight rates remaining under pressure, particularly in the container and tanker segment,
NORD/LB and its Subsidiaries anticipate within the shipping sector a difficult market environment and
market uncertainties which will affect the "Ships and Aircraft Customers" segment. Therefore,
NORD/LB and its Subsidiaries are preparing for a continued crisis in the shipping sector during the
next quarters. The ongoing crisis in the shipping sector will continue to have a negative impact on the
Issuer's profit situation and may result in a further deterioration of the shipping portfolio and a further
increase in expenses for loan loss provisions during the next following quarters. Furthermore, the
worsening situation in the shipping portfolio is resulting in an increase in regulatory deficits in valuation
allowances (shortfall), which reduce risk capital.

The shipping crisis, particularly in the container and tanker segment, bears a third-party default risk.
The crisis and the associated risks lead to significantly increased expenses for risk provisions in the
field of ship financing.

NORD/LB and its Subsidiaries make equity investments in companies to secure or improve their
market position. This exposes them to investment risk. Generally, there is no guarantee that
investments will actually fulfil their strategic objective. In particular, losses in the value of an
investment may occur, due to unforeseen developments in the market or in the investment target.
Furthermore, NORD/LB and its Subsidiaries may have to bear losses generated by an affiliate or other
investment target and these losses could exceed the book value of the investment itself.

In order to reduce this risk, NORD/LB and its Subsidiaries are committed to continue the commenced
reduction of investments. In addition, during the course of 2013, the focus was and will be on
continuing to improve the control of investments in respect of the risk-return ratio.

NORD/LB and its Subsidiaries are also exposed to market price risk as a result of open positions in
the foreign exchange markets, the capital markets and fluctuations in interest rates. The risk is linked
to variations in financial results due to fluctuations in market prices or exchange rates.

A market price risk in the trading portfolio arises from trading activities in the interest rate, foreign
exchange and equity markets. A market price risk in the banking portfolio arises from differences in
interest periods. In periods of volatility, significant profits on trading can be followed by periods of
losses on trading. NORD/LB and its Subsidiaries may suffer material losses if they cannot exclude
deteriorating positions in a timely manner, in particular with respect to illiquid assets such as assets
not traded on stock exchanges or other public trading markets such as derivatives contracts between
banks.

NORD/LB and its Subsidiaries conduct substantial amounts of their business in currencies other than
the Euro, most importantly in U.S. dollars which is the predominant currency used in the ship and
aircraft financing business. This exposes NORD/LB and its Subsidiaries to foreign currency translation
risks and foreign currency transaction risks. Foreign exchange effects can significantly affect the
Issuer's income as well as the risk-weighted assets ("RWA"). Therefore, fluctuations in the U.S. dollar
exchange rate may, via its effect on RWA, have a negative influence on capital ratios. Furthermore, to
the extent the Issuer continues to recognise operating income in currencies other than Euro, it will

6




encounter foreign exchange risk, which could have a material adverse effect on its business, results of
operations or financial condition.

If any of the Issuer's instruments and strategies to hedge or manage credit, counterparty or market
price risk is not effective, the Issuer may not be able to effectively mitigate its risk exposures. The
Issuer's financial results also depend on the effectiveness of its cost and credit management in regard
to credit, counterparty and market price risk.

To the extent the Issuer's estimates towards changes in credit quality and risk concentrations or
towards changes in determining its valuation models for fair value of asset and valuation liability values,
or the determination of the appropriate level of provisions for loan losses or other risks, prove to be
inaccurate or unpredictable for actual results, the Issuer could suffer higher than expected credit, trade
or investment losses. The afore mentioned issues could have a material adverse effect on NORD/LB
and its Subsidiaries and the results of operations or the financial condition or business of NORD/LB
and its Subsidiaries.

Changes in interest rates are caused by many factors beyond the Issuer's control and such
changes can have significant adverse effects on its financial results, including its net interest
income, which represents the majority of its operating income.

The Issuer derives the majority of its operating income from net interest income. Interest rates are
sensitive to many factors beyond the Issuer's control, such as monetary policies pursued by central
banks and national governments, the liberalisation of financial services and increased competition in
the markets in which the Issuer operates, domestic and international economic and political
conditions, and other factors. Changes in interest rates could affect the spread between interest rates
charged on interest-earning assets and interest rates paid on interest-bearing liabilities, which in turn
could affect the level of the Issuer's net interest income. Moreover, the composition of the Issuer's
assets and liabilities, and any gap position resulting from the composition, causes its net interest
income to vary with changes in interest rates. A mismatch of interest-earning assets and interest-
bearing liabilities in any given period could, in the event of changes in interest rates, reduce the
Issuer's interest margin and have a material adverse effect on its net interest income and thereby on
its business, results of operations or financial condition.

NORD/LB and its Subsidiaries are subject to liquidity risks.

NORD/LB and its Subsidiaries are subject to liquidity risks, i.e., risks that they are unable to meet their
obligations as they fall due as a result of a sudden and protracted increase in cash outflows. Such
outflows would deplete available cash resources for client lending, trading activities and investments.
In extreme circumstances a lack of liquidity could result in reductions in balance sheet and sales
of assets, or potentially an inability to fulfil lending commitments. These risks are inherent in all
banking operations and can be affected by a range of institution-specific and market-wide events.
The current budgetary crises in certain Member States of the European Union, despite the rescue
packages provided by the European Union for Greece, Ireland, Italy, Spain, Portugal and Cyprus,
represent the risk of further countries requiring support and a prolonged loss of confidence in the
financial markets.

In 2012, the global economy deteriorated and the re-escalation of the European debt crisis from April
to July 2012 has had an additional negative impact on the world economy and consumer confidence.
During periods of market dislocation, the Issuer's ability to manage liquidity requirements may be
impacted by a reduction in the availability of wholesale term funding as well as an increase in the cost
of raising wholesale funds. Asset sales, balance sheet reductions and the increasing costs of raising
funding will affect its earnings.

In illiquid markets, NORD/LB and its Subsidiaries may decide to hold assets rather than securitising,
syndicating or disposing of them. This could affect their ability to originate new loans or support other
customer transactions as both capital and liquidity are consumed by existing or legacy assets.

The liquidity situation in the markets stabilised in 2013 due to the measures taken by the EU states
and the European Central Bank, but continues to be characterised by uncertainty with regard to the

7




possible medium to long term impact of the sovereign debt crisis on the EU periphery countries. All the
factors mentioned above might be detrimental to the business and can have a material adverse effect
on the operating results and financial position of NORD/LB and its Subsidiaries (for further information
see below "2. Risk factors relating to regulatory aspects concerning credit institutions in general").

Unfavourable developments in the Issuer's or a subsidiary's credit rating would increase their
funding costs and affect their ability to access capital markets.

NORD/LB is rated by Moody's Deutschland GmbH, An der Welle 5, 60322 Frankfurt am Main, Federal
Republic of Germany ("Moody's") and Fitch Deutschland GmbH, Taunusanlage 17, 60325 Frankfurt
am Main, Federal Republic of Germany ("Fitch").

Moody's and Fitch are established in the European Union and are registered under Regulation (EC)
No 1060/2009 of the European Parliament and the Council of 16 September 2009 on credit rating
agencies, as amended (the "CRA Regulation"). Moody's and Fitch are listed in the "List of registered
and certified CRAs" as published by the European Securities and Markets Authority on its website
(http://www.esma.europa.eu) in accordance with the CRA Regulation.

Several other companies in the NORD/LB Group (as defined below under "III. Description of
Norddeutsche Landesbank ­ Girozentrale ­ 1. Auditors"), inter alia Bremer Landesbank Kreditanstalt
Oldenburg, Norddeutsche Landesbank Luxembourg S.A., NORD/LB Covered Finance Bank S.A.,
and Deutsche Hypothekenbank (Actien-Gesellschaft) also issue securities on a regular basis and
are or may be rated separately.

In determining the rating assigned to the Issuer, the agencies examine several performance indicators
of the Issuer, including profitability and the ability to maintain its consolidated capital ratios. In the event
that the Issuer does not achieve or maintain certain performance measures, or maintain its capital
ratios above certain levels, one or more of the ratings assigned to the Issuer or to any subsidiary may
be lowered. In addition, if the sovereign debt of Germany ­ the Issuer's primary market ­ were to suffer a
downgrade, it could affect the Issuer's rating and market perceptions of the Issuer's creditworthiness.

A downgrading of the ratings assigned to the Issuer or to any subsidiary could potentially increase
their funding costs, limit their funding resources and negatively impact their access to liquidity and
therefore have a material adverse effect on their business, results of operations or financial condition.

The Issuer's risk management policies, procedures and methods may leave it exposed to
unidentified or unanticipated risks, which could lead to material losses.

The Issuer devotes significant resources to developing risk management policies, procedures and
assessment methods for its banking and other businesses. Nonetheless, the risk management
techniques and strategies applied by the Issuer may not be fully effective in mitigating risk exposure in
all economic market environments or against all types of risk. To develop and refine the Issuer's risk
management, the Issuer is required to make assumptions, judgments and estimates to identify and
anticipate risks, quantify risk exposures and determine its risk-bearing capacity. Unanticipated or
incorrectly quantified risk exposures could result in material losses, which could have a material
adverse effect on the Issuer's business, results of operations or financial condition.

The assumptions, judgments and estimates used to value the assets of NORD/LB and its
Subsidiaries may prove unreliable.

In accordance with International Financial Reporting Standards ("IFRS"), NORD/LB and its
Subsidiaries apply fair value when financial assets and financial liabilities are recognised for the first
time. Generally, in order to determine the fair value of such assets and liabilities, NORD/LB and its
Subsidiaries rely on quoted market prices or, where the market for a financial instrument is not
sufficiently active, internal valuation models that utilise observable market data.

Under certain circumstances, the market data for individual financial instruments or classes of financial
instruments utilised by such valuation models may not be available or may become unavailable due to

8




adverse market conditions. In this case, the internal valuation models require NORD/LB and its
Subsidiaries to make assumptions, judgments and estimates in order to establish fair value. Assets
that are not publicly traded, such as derivatives, may be assigned values that are calculated by using
mathematical models.

As is common with financial institutions, these internal valuation models are complex and the
assumptions, judgments and estimates NORD/LB and its Subsidiaries are required to make, often
relate to matters that are inherently uncertain, such as expected cash flows, the ability of borrowers to
service debt, property appreciation and depreciation, and relative levels of defaults and deficiencies.
These assumptions, judgments and estimates may prove to be unreliable and may need to be
updated to reflect changing trends and market conditions. The resulting change in fair values of
financial instruments could have a material adverse effect on the business, results of operations or
financial condition of NORD/LB and its Subsidiaries.

NORD/LB and its Subsidiaries are subject to operational risks, including fraud, misconduct by
clients or employees, security breaches, technical and information technology errors or
failures and other adverse events, many of which are wholly or partially beyond their control.

NORD/LB and its Subsidiaries, like all financial institutions, are exposed to many types of operational
risk, including the risk of fraud or other misconduct by employees or outsiders, unauthorised
transactions by employees or operational errors, including clerical or record-keeping errors or errors
resulting from faulty computer or telecommunications systems. NORD/LB and its Subsidiaries are
highly dependent on their ability to process a large number of transactions across numerous diverse
markets in different currencies on a daily basis and some of these transactions have become
increasingly complex. Given the high volume of transactions, certain errors may be repeated or
compounded before they are discovered and successfully rectified.

In addition, NORD/LB and its Subsidiaries depend on automated systems to record and process
transactions. This increases the risk that technical systems flaw or employees tamper or manipulate
the systems, taking into account that such violations are hard to detect. The failure or manipulation of
the supporting systems could have a material adverse effect on the business and financial condition of
NORD/LB and its Subsidiaries.

Furthermore, there is a risk that certain circumstances cause disruptions of the operating systems or
the supporting infrastructure of NORD/LB and its Subsidiaries. These circumstances might be wholly
or partially beyond NORD/LB and its Subsidiaries' control and include, but are not limited to,
disruptions caused by terrorist activities, computer viruses, disease pandemics, electrical or
telecommunication outages, transportation or other services used by the Issuer or third parties in order
to conduct business. Each of these disorders can lead to performance failures towards customers and
to further losses and liability by NORD/LB and its Subsidiaries.

NORD/LB and its Subsidiaries are exposed to the risk that external vendors may be unable to fulfil
their contractual obligations (or external vendors will be subject to the risk of fraud or operational
errors by their respective employees), and to the risk that their (or their vendors') business continuity
and data security systems could prove to be ineffective.

NORD/LB and its Subsidiaries are also subject to the risk that the organisation and conception of their
internal controls and procedures could prove to be inadequate or that control mechanisms might be
circumvented by an interferer, thereby causing delays in detection of defaults or errors in information.
Although NORD/LB and its Subsidiaries maintain a system of controls designed to keep operational
risk at appropriate levels, NORD/LB and its Subsidiaries have suffered losses from operational risk
and there can be no assurance that they will not suffer losses from operational risk in the future.


9



2. Risk factors relating to regulatory aspects concerning credit institutions in general

Regulatory changes or enforcement initiatives could adversely affect the business of NORD/LB
and its Subsidiaries.

NORD/LB and its Subsidiaries are subject to banking and financial services laws and government
regulation in each of the jurisdictions in which they conduct business. Regulatory authorities have
broad administrative surveillance authority over many aspects of the financial services business,
which may include liquidity, capital adequacy and permitted investments, ethical issues, money
laundering, privacy, record keeping, and marketing and selling practices. Banking and financial
services laws, regulations and policies currently governing NORD/LB and its Subsidiaries may change
at any time in ways which have an adverse effect on their business. Furthermore, changes in existing
banking and financial services laws and regulations may materially affect the way in which they
conduct business, the products or services they may offer and the value of their assets.

In addition, regulatory authorities have the power to bring administrative or judicial proceedings
against the Issuer or the subsidiaries of the Issuer, which could result, among other things, in
suspension or revocation of the Issuer's licences, cease and desist orders, fines, civil penalties,
criminal penalties or other disciplinary action.
Such proceedings and/or other regulatory initiatives or enforcement actions could have a material
adverse effect on the Issuer's business, results of operations or financial condition.

Stress tests may adversely affect the business of NORD/LB and its Subsidiaries.

NORD/LB and its Subsidiaries may become subject to stress testing exercises initiated by the German
financial regulatory authorities Bundesanstalt für Finanzdienstleistungsaufsicht ("BaFin") and
Deutsche Bundesbank (the "German Central Bank"), the European Banking Authority ("EBA") and/or
the European Central Bank ("ECB"). Together with other large EU-based financial institutions,
NORD/LB expects to be subject to the next EU-wide stress testing exercise by the EBA in 2014. The
Issuer's results of operations may be adversely affected if NORD/LB or any of the financial institutions
with which the Issuer does business receives negative results on such stress tests. In the last such
exercise conducted by the EBA in 2011, the EBA published more stringent capital requirements for
certain larger banks in the EU, including NORD/LB. Also, in July 2013, the EBA recommended to
national regulators to apply a so-called nominal capital floor. Alternatively, the relevant competent
authority may waive the nominal floor requirement where it is determined that a common equity tier 1
ratio of 7%, i.e. the minimum common equity tier 1 requirements and the capital conservation buffer as
determined pursuant to fully implemented CRD IV/CRR requirements is met, i.e., without taking
advantage of any transition rules such as phase-outs of certain capital instruments. While there is
uncertainty as to the precise methodology, it is likely that the Issuer currently does not meet the
nominal capital floor requirement. Instead of such nominal capital floor requirement, the Issuer has
therefore requested BaFin to apply the alternative requirement of a common equity tier 1 ratio to it,
whereby it believes that it will satisfy such alternative requirement. It is not yet clear how BaFin will
implement this recommendation and whether they will agree to apply the alternative testing method to
the Issuer. Depending on BaFin's decision, the Issuer may be required to take further action in relation
to its regulatory capital. Meeting these or similar future requirements imposes significant costs on
NORD/LB Group. Further, the Issuer will be subject to separate stress test(s) as part of the
comprehensive assessment conducted as a preparatory step for the SSM (see related risk factor
below), which is unrelated to the regular EU-wide stress testing exercises by the EBA mentioned in
this risk factor.

If the Issuer's capital was to fall below the predefined threshold of a given stress test at the end of the
stress test period, remedial action may be required to be taken by the Issuer, including potentially
requirements to strengthen the capital situation of the Issuer and/or other supervisory interventions.

Further, the publication of the results of the stress test (and its findings), their evaluation by financial
market participants and the market's general impression that a stress test is not robust enough could
have a negative impact on the Issuer's reputation or its ability to refinance itself as well as increase its

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