Obbligazione Danica Bank 0% ( XS1533885981 ) in NOK

Emittente Danica Bank
Prezzo di mercato 100 NOK  ⇌ 
Paese  Danimarca
Codice isin  XS1533885981 ( in NOK )
Tasso d'interesse 0%
Scadenza 23/12/2021 - Obbligazione è scaduto



Prospetto opuscolo dell'obbligazione Danske Bank XS1533885981 in NOK 0%, scaduta


Importo minimo /
Importo totale /
Descrizione dettagliata Danske Bank è una banca danese con sede a Copenhagen, attiva in diversi paesi del Nord Europa e con una presenza internazionale significativa.

The Obbligazione issued by Danica Bank ( Denmark ) , in NOK, with the ISIN code XS1533885981, pays a coupon of 0% per year.
The coupons are paid 1 time per year and the Obbligazione maturity is 23/12/2021







BASE PROSPECTUS


DANSKE BANK OYJ
(incorporated with public limited liability in Finland)
EUR 10,000,000,000
Euro Medium Term Note and Covered Bond Programme
Under this EUR 10,000,000,000 Euro Medium Term Note and Covered Bond Programme (the "Programme"), Danske Bank Oyj (parallel registered
trade name Danske Bank Plc) (the "Issuer") may from time to time issue Euro Medium Term Notes (the "Notes") and Covered Bonds (the "Covered
Bonds" and, together with the Notes, the "Securities") denominated in any currency agreed between the Issuer and the relevant Dealer (as defined
below).
The maximum aggregate nominal amount of all Securities from time to time outstanding under the Programme will not exceed EUR 10,000,000,000
(or its equivalent in other currencies calculated as described in the Programme Agreement described herein), subject to increase as described herein.
The Securities may be issued on a continuing basis to one or more of the Dealers specified under "General Description of the Programme" and any
additional Dealer appointed under the Programme from time to time by the Issuer (each a "Dealer" and together the "Dealers"), which appointment
may be for a specific issue or on an ongoing basis. References in this Base Prospectus to the "relevant Dealer" shall, in the case of an issue of
Securities being (or intended to be) subscribed by more than one Dealer, be to all Dealers agreeing to subscribe such Securities.
An investment in the Securities issued under the Programme involves certain risks. For a discussion of these risks see "Risk Factors".
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 on prospectuses for securities as amended on 3 July 2012 (the "Prospectus Act 2005") to approve this document
as a base prospectus. By approving this Prospectus, the CSSF shall give no undertaking as to the economic and financial soundness of the operation
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 Securities issued under the Programme (other than Exempt Securities (as defined below)) to be admitted to trading
on the Luxembourg Stock Exchange's regulated market and to be listed on the Official List of the Luxembourg Stock Exchange.
References in this Base Prospectus to Securities being "listed" (and all related references) on the Luxembourg Stock Exchange shall mean that such
Securities have been admitted to trading on the Luxembourg Stock Exchange's regulated market and have been admitted to the Official List of the
Luxembourg Stock Exchange. The Luxembourg Stock Exchange's regulated market is a regulated market for the purposes of the Markets in Financial
Instruments Directive (Directive 2004/39/EC).
The requirement to publish a prospectus under the Prospectus Directive (as defined below) only applies to Securities which are to be admitted to
trading on a regulated market in the European Economic Area and/or offered to the public in the European Economic Area other than in
circumstances where an exemption is available under Article 3.2 of the Prospectus Directive (as implemented in the relevant Member State(s)).
References in this Base Prospectus to "Exempt Notes" and "Exempt Covered Bonds" are to Notes and Covered Bonds, respectively, for which no
prospectus is required to be published under the Prospectus Directive and references in this Base Prospectus to "Exempt Securities" are to Exempt
Notes and/or Exempt Covered Bonds, as the case may be. The CSSF has neither approved nor reviewed information contained in this Base Prospectus
in connection with Exempt Securities.
Except in the case of Exempt Securities, notice of the aggregate nominal amount of the Securities, interest (if any) payable in respect of the Securities,
the issue price of Securities and certain other information which is applicable to each Tranche (as defined under "Terms and Conditions of the Notes"
(the "Note Conditions") or "Terms and Conditions of the Covered Bonds" (the "Covered Bond Conditions"), as the case may be) of the Securities,
where relevant, will be set out in a final terms document (the "Final Terms") which, with respect to the Securities to be listed on the Luxembourg
Stock Exchange, will be filed with the CSSF. Copies of Final Terms in relation to Securities to be listed on the Luxembourg Stock Exchange will also
be published on the website of the Luxembourg Stock Exchange (www.bourse.lu). In the case of Exempt Securities, notice of the aggregate nominal
amount of the Securities, interest (if any) payable in respect of the Securities, the issue price of Securities and certain other information which is
applicable to each Tranche will be set out in a pricing supplement document (the "Pricing Supplement"). In the case of Exempt Securities,
references herein to "Final Terms" shall be deemed to be references to "Pricing Supplement", so far as the context admits.
The Programme provides that Securities may be listed or admitted to trading, as the case may be, on such other or further stock exchanges or markets
as may be agreed between the Issuer and the relevant Dealer. The Issuer may also issue unlisted Exempt Securities and/or Exempt Securities not
admitted to trading on any market.
The rating of certain Tranches (as defined under the Note Conditions or the Covered Bond Conditions, as the case may be) of Securities to be issued
under the Programme may be specified in the applicable Final Terms. Whether or not each credit rating applied for in relation to a relevant Tranche of
Securities will be issued by a credit rating agency established in the European Union and registered under Regulation (EU) No. 1060/2009 (as
amended) (the "CRA Regulation") will be disclosed in the applicable Final Terms. In general, European regulated investors are restricted from using
a rating for regulatory purposes if such rating is not issued by a credit rating agency established in the European Union and registered under the CRA
Regulation unless the rating is provided by a credit rating agency operating in the European Union before 7 June 2010 which has submitted an
application for registration in accordance with the CRA Regulation and such registration is not refused. A list of registered credit rating agencies is
available on the European Securities and Markets Authority ("ESMA") website at www.esma.europa.eu/page/List-registered-and-certified-CRAs (list
last updated on 1 December 2015).
Arrangers and Dealers
BNP PARIBAS
DANSKE BANK
The date of this Base Prospectus is 4 May 2016.
1




This Base Prospectus comprises a base prospectus in respect of all Securities other than Exempt
Securities issued under the Programme for the purposes of Article 5.4 of the Prospectus
Directive. "Prospectus Directive" means Directive 2003/71/EC (as amended, including by
Directive 2010/73/EU), and includes any relevant implementing measure in a relevant Member
State of the European Economic Area.
The Issuer accepts responsibility for the information contained in this Base Prospectus and the
Final Terms for each Tranche of Securities issued under the Programme. To the best of the
knowledge of the Issuer (having taken all reasonable care to ensure that such is the case) the
information contained in this Base Prospectus is in accordance with the facts and does not omit
anything likely to affect the import of such information.
This Base Prospectus is to be read in conjunction with all documents which are deemed to be
incorporated by reference herein (see "Documents Incorporated by Reference"). This Base
Prospectus shall be read and construed on the basis that such documents are incorporated by
reference and form part of this Base Prospectus.
The Dealers 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 Dealers as to the accuracy or completeness of the information
contained or incorporated by reference in this Base Prospectus or any other information
provided by the Issuer in connection with the Programme. No Dealer accepts any liability in
relation to the information contained or incorporated by reference in this Base Prospectus or
any other information provided by the Issuer in connection with the Programme.
No person is or has been authorised by the Issuer or any of the Dealers to give any information
or to make any representation not contained in or not consistent with this Base Prospectus or
any other information supplied in connection with the Programme or the Securities and, if given
or made, such information or representation must not be relied upon as having been authorised
by the Issuer or any of the Dealers.
Neither this Base Prospectus nor any other information supplied in connection with the
Programme or any Securities (a) is intended to provide the basis of any credit or other
evaluation or (b) should be considered as a recommendation by the Issuer or any of the Dealers
that any recipient of this Base Prospectus or any other information supplied in connection with
the Programme or any Securities should purchase any Securities. Each investor contemplating
purchasing any Securities should make its own independent investigation of the financial
condition and affairs, and its own appraisal of the creditworthiness, of the Issuer and, in the
case of Covered Bonds, the Cover Pool (as defined in "The Issuer's Licence and the Cover
Pool"). Neither this Base Prospectus nor any other information supplied in connection with the
Programme or the issue of any Securities constitutes an offer or invitation by or on behalf of the
Issuer or any of the Dealers to any person to subscribe for or to purchase any Securities.
Neither the delivery of this Base Prospectus nor the offering, sale or delivery of any Securities
shall in any circumstances imply that the information contained herein concerning the Issuer is
correct at any time subsequent to the date hereof or that any other information supplied in
connection with the Programme is correct as of any time subsequent to the date indicated in the
document containing the same. The Dealers expressly do not undertake to review the financial
condition or affairs of the Issuer during the life of the Programme or to advise any investor in
the Securities of any information coming to their attention.
The Securities 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




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to certain exceptions, Securities may not be offered, sold or delivered within the United States or
to, or for the account or benefit of, U.S. persons (see "Subscription and Sale").
This Base Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any
Securities in any jurisdiction to any person to whom it is unlawful to make the offer or
solicitation in such jurisdiction. The distribution of this Base Prospectus and the offer or sale of
Securities may be restricted by law in certain jurisdictions. The Issuer and the Dealers do not
represent that this Base Prospectus may be lawfully distributed, or that any Securities 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 Issuer or the Dealers which is intended to permit a public offering of any Securities
or distribution of this Base Prospectus in any jurisdiction where action for that purpose is
required. Accordingly, no Securities may be offered or sold, directly or indirectly, and neither
this Base 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 Base Prospectus or any
Securities may come must inform themselves about, and observe, any such restrictions on the
distribution of this Base Prospectus and the offering and sale of Securities (see "Subscription
and Sale").
This Base Prospectus has been prepared on a basis that would permit an offer of Securities with
a denomination of less than 100,000 (or its equivalent in any other currency) only in the case of
Exempt Securities. As a result, any offer of Securities in any Member State of the European
Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member
State") must be made pursuant to an exemption under the Prospectus Directive, as
implemented in that Relevant Member State, from the requirement to publish a prospectus for
offers of Securities. Accordingly any person making or intending to make an offer of Securities
in that Relevant Member State may only do so in circumstances in which no obligation arises
for the Issuer or any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus
Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive, in each
case, in relation to such offer.
Neither the Issuer nor any Dealer has authorised, nor do any of them authorise, the making of
any offer of Securities in circumstances in which an obligation arises for the Issuer or any
Dealer to publish or supplement a prospectus for such offer.
The Securities may not be a suitable investment for all investors. Each potential investor in the
Securities must determine the suitability of that investment in light of its own circumstances. In
particular, each potential investor should:
(i)
have sufficient knowledge and experience to make a meaningful evaluation of the
Securities, the merits and risks of investing in the Securities and the information
contained or incorporated by reference in this Base Prospectus or any applicable
supplement;
(ii)
have access to, and knowledge of, appropriate analytical tools to evaluate, in the context
of its particular financial situation, an investment in the Securities and the impact the
Securities will have on its overall investment portfolio;
(iii)
have sufficient financial resources and liquidity to bear all of the risks of an investment
in the Securities, including Securities with principal or interest payable in one or more
currencies, or where the currency for principal or interest payments is different from
the potential investor's currency;




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(iv)
understand thoroughly the terms of the Securities and be familiar with the behaviour of
any relevant indices and financial markets; and
(v)
be able to evaluate (either alone or with the help of a financial adviser) possible
scenarios for economic, interest rate and other factors that may affect its investment and
its ability to bear the applicable risks.
Some Securities are complex financial instruments. Sophisticated institutional investors
generally do not purchase complex financial instruments as stand-alone investments. They
purchase complex financial instruments as a way to reduce risk or enhance yield with an
understood, measured, appropriate addition of risk to their overall portfolios. A potential
investor should not invest in Securities which are complex financial instruments unless it has the
expertise (either alone or with a financial adviser) to evaluate how the Securities will perform
under changing conditions, the resulting effects on the value of the Securities and the impact
this investment will have on the potential investor's overall investment portfolio.
All references to "EUR", "euro" 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.
In connection with the issue of any Tranche of Securities, the Dealer or Dealers (if any) named
as the Stabilising Manager(s) (or persons acting on behalf of any Stabilising Manager(s)) in the
applicable Final Terms may over-allot Securities or effect transactions with a view to
supporting the market price of the Securities at a level higher than that which might otherwise
prevail. However, there is no assurance that the Stabilising Manager(s) (or persons acting on
behalf of a 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 relevant Tranche of Securities 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 relevant Tranche of Securities
and 60 days after the date of the allotment of the relevant Tranche of Securities. 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.





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CONTENTS
Clause
Page
Risk Factors ............................................................................................................................................ 6
General Description of the Programme ................................................................................................ 19
Documents Incorporated by Reference ................................................................................................. 26
Form of the Securities ........................................................................................................................... 28
Final Terms for Securities other than Exempt Securities ...................................................................... 31
Pricing Supplement for Exempt Securities ........................................................................................... 42
Terms and Conditions of the Notes ....................................................................................................... 53
Terms and Conditions of the Covered Bonds ....................................................................................... 88
Use of Proceeds................................................................................................................................... 122
Description of the Issuer .................................................................................................................... 123
Act on Mortgage Credit Bank Operations ......................................................................................... 133
The Issuer's Licence and the Cover Pool ........................................................................................... 140
Derivative Transactions ...................................................................................................................... 142
Taxation .............................................................................................................................................. 145
Subscription and Sale .......................................................................................................................... 148
General Information ............................................................................................................................ 151






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RISK FACTORS
Prospective investors should read the entire Base Prospectus and reach their own views prior to
making any investment decision.
The Issuer believes that the following factors may affect its ability to fulfil its obligations under the
Securities issued under the Programme. All of these factors are contingencies that may or may not
occur and the Issuer is not in a position to express a view on the likelihood of any such contingency
occurring.
Factors which the Issuer believes may be material for the purpose of assessing the market risks
associated with the Securities issued under the Programme are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing
in the Securities issued under the Programme, but the Issuer may be unable to pay interest, principal
or other amounts on or in connection with any Securities for other reasons which may not be
considered significant risks by the Issuer based on information currently available to it and which it
may not currently be able to anticipate.
The following is a general discussion of the material risks typically associated with the Issuer and the
acquisition and ownership of the Securities. In particular, it does not consider an investor's specific
knowledge and/or understanding about risks typically associated with the Issuer and the acquisition
and ownership of the Securities, whether obtained through experience, training or otherwise, or the
lack of such specific knowledge and/or understanding, or circumstances that may apply to a
particular investor.
Factors that may affect the Issuer's ability to fulfil its obligations under Securities issued under
the Programme
The Danske Bank Oyj Group is exposed to a number of risks, the categories of which are credit risk,
market risk, liquidity risk and operational risk
The Danske Bank Oyj Group is exposed to a number of risks, which it manages at different
organisational levels. The categories of risk are as follows:
· Credit risk: Credit risk is the risk of losses arising because counterparties or debtors fail to
meet all or part of their payment obligations to the Danske Bank Oyj Group. Credit risk
includes the risk of losses if a sovereign state encounters financial difficulties or losses
because of, for example, political decisions on nationalisation and expropriation.
· Market risk: The risk of loss because the fair value of the Danske Bank Oyj Group's assets,
liabilities and off-balance sheet items varies with changes in market conditions.
· Liquidity risk: The risk of loss because the Danske Bank Oyj Group's funding costs increase
disproportionately, lack of funding prevents the Danske Bank Oyj Group from establishing
new business or lack of funding ultimately prevents the Danske Bank Oyj Group from
meeting its obligations.
· Operational risk: The risk of loss resulting from inappropriate or inadequate internal
processes, human and systems errors, or from external events. Operational risk includes legal
risk.





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The Danske Bank Oyj Group may be affected by general economic and geopolitical conditions
The financial services industry generally prospers in conditions of economic growth, stable
geopolitical conditions, capital markets that are transparent, liquid and buoyant, and positive investor
sentiment. Each of the Danske Bank Oyj Group's operating segments is affected by general economic
and geopolitical conditions, which can cause the Danske Bank Oyj Group's results of operations and
financial position to fluctuate from year to year as well as on a long-term basis.
The general economic environment for the financial sector in Europe remained challenging in 2015.
The economic headwinds eased and unemployment decreased, but high uncertainty about the
economic outlook continued and interest rates fell further. Geopolitical risks in Ukraine and Russia
continued and the possibility of Brexit brought new uncertainty in the EU. Policy measures and
intervention from the ECB and other central banks have mitigated the situation. Although financial
markets were volatile at the beginning of 2016, there is growing confidence that the economic
situation in Europe will eventually improve. The Finnish economy is experiencing a prolonged period
of slow growth. Exports suffer from a weak demand for investment goods and structural changes
made in the manufacturing sector. Companies invest cautiously and private consumption is hindered
by poor outlook for household purchasing power. Recession in Russia has a negative impact on
exports, tourism and retail trade. At the same time the creditworthiness of the Republic of Finland has
remained excellent, although Standard & Poor's and Fitch have downgraded Finland to AA+. Credit
ratings are increasingly dependent on the implementation of structural reforms and austere fiscal
policy. Although weak macroeconomic conditions are usually associated with rising non-performing
loans; cost cutting, low interest rates and the relatively strong balance sheets of Finnish corporates and
households have been able to mitigate the amount of credit losses resulting from such non-performing
loans. Many companies have been able to pay large dividends, which is indicative of a lack of good
investment targets. Although export outlook has improved and consumer confidence stabilized,
economic growth looks modest at best in 2016. The housing market is likely to remain stable, but
prices may diverge regionally. Housing construction is rising especially in Helsinki region in 2016.
Migration and low interest rates support housing prices, but some areas suffer from unemployment
and decline in population. This may dent demand for loans. Low interest rates and competition over
customers keep the level of net interest margin below normal, which leads banks to look for
alternative sources of earnings and cost savings.
Regulatory changes could materially affect the Issuer's business
The Issuer is subject to financial services laws, regulations, administrative actions and policies in
Finland and in each other jurisdiction in which it carries on business. Changes in supervision and
regulation, in particular in Finland, could materially affect the Issuer's business, the products and
services offered or the value of its assets. Although the Issuer works closely with its regulators and
continuously monitors the situation, future changes in regulation, fiscal or other policies can be
unpredictable and are beyond the control of the Issuer.
The Issuer will face increased capital and liquidity requirements as a result of the new Basel III
Framework
The final versions of the Regulation of the European Parliament and of the Council on prudential
requirements for credit institutions and investment firms (the "CRR") and the Directive of the
European Parliament and of the Council on prudential requirements for credit institutions and
investment firms (the "CRD IV Directive") were adopted in June 2013. The CRR entered into force
on 1 January 2014, whereas the CRD IV Directive was implemented in Finland in August 2014. The
framework implemented among other things the Basel Committee on Banking Supervision's
proposals imposing stricter capital and liquidity requirements upon banks ("Basel III") in the
European Union ("EU"). Each of the CRR and the CRD IV Directive covers a wide range of prudent
requirements for banks across EU member states, including capital requirements, stricter and aligned
definitions of capital, risk exposure amount ("REA"), leverage ratio, large exposure framework and




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liquidity and funding requirements. The CRD IV Directive covers the overall supervisory framework
for banks (including the individual risk assessment) and other measures such as the combined capital
buffer requirements, systemically important financial institution ("SIFI"), governance and
remuneration requirements. As a consequence of the European Banking Authority's (the "EBA")
outstanding regulatory technical standards, the Group is subject to the risk of possible interpretational
changes.
The provisions of the CRD IV Directive have been implemented in the Finnish Act on Credit
Institutions (Laki luottolaitostoiminnasta, 610/2014, as amended) which came into force on 15 August
2014, whereas the CRR applies directly without implementation in national law. The phase-in of the
capital requirements follows the path in the CRR until 2018 except for the Capital Conservation
Buffer, which was required from 1 January 2015.
See "Description of the Issuer" for a description of the impact on the Danske Bank Oyj Group of the
new capital and liquidity.
In certain limited circumstances, it is possible that the implementation of the bank recovery and
resolution directive and the adoption of the single resolution mechanism regulation or the taking of
any action under these could affect the value of any Securities
On 2 July 2014, Directive 2014/59/EU providing for the establishment of an EU-wide framework for
the recovery and resolution of credit institutions and investment firms (the "Bank Recovery and
Resolution Directive" or "BRRD") entered into force. Another part of the European bank resolution
regime is the Regulation (EU) No. 806/2014 establishing the Single Resolution Mechanism (the
"Single Resolution Mechanism" or "SRM") (the "SRM Regulation") applicable in Member States
participating in the Banking Union as of 1 January 2016. The Single Resolution Board ("SRB") is the
resolution authority under the SRM and it is responsible for resolution planning and decisions on
resolution actions in relation to banking groups under direct ECB supervision or with cross border
operations. As a member of the Banking Union, Finland is part of the SRM. Since the Issuer is
deemed a SIFI in Finland, its resolution is subject to the SRM Regulation with the competent
resolution authority being the SRB. The BRRD and the SRM Regulation are designed to provide
authorities with a credible set of tools to intervene sufficiently early and quickly in an unsound or
failing institution so as to ensure the continuity of the institution's critical financial and economic
functions, while minimising the impact of an institution's failure on the economy and financial
system.
The BRRD provides that it will be applied by Member States from 1 January 2015, except for the
general bail-in tool (see below) which applies from 1 January 2016. The BRRD was implemented in
Finland with effect as of 1 January 2015 by the Act on Procedure for the Resolution of Credit
Institutions and Investment Firms (the "Bank Resolution Act"). The SRM Regulation entered into
force on 1 January 2015. The SRB has had the authority to carry out resolutions of banks falling under
its authority as from 1 January 2016. The SRM Regulation allows for troubled banks operating under
the authority of the SRB to be restructured with a variety of tools including using, where necessary,
funds from the centralised Single Resolution Fund ("SRF").
The powers of the competent resolution authorities under the BRRD and the SRM regimes are
intended to correspond. The European resolution regimes contain four resolution tools and powers
which may be used alone or in combination where the relevant resolution authority considers that (a)
an institution is failing or likely to fail, (b) there is no reasonable prospect that any alternative private
sector measures would prevent the failure of such institution within a reasonable timeframe, and (c) a
resolution action is in the public interest: (i) sale of business - which enables resolution authorities to
direct the sale of the firm or the whole or part of its business on commercial terms; (ii) bridge
institution - which enables resolution authorities to transfer all or part of the business of the firm to a
"bridge institution" (an entity created for this purpose that is wholly or partially in public control); (iii)
asset separation - which enables resolution authorities to transfer impaired or problem assets to one or




8





more publicly owned asset management vehicles to allow them to be managed with a view to
maximising their value through eventual sale or orderly wind-down (this can be used together with
another resolution tool only); and (iv) bail-in - which gives resolution authorities the power to write
down certain claims of unsecured creditors of a failing institution and to convert certain unsecured
debt claims (including Securities) to equity (including Securities) (the "general bail-in tool"), which
equity could also be subject to any future write-down. Relevant claims for the purposes of the bail-in
tool would include the claims of the holders in respect of any Notes issued under the Programme,
although in the case of Covered Bonds, this would only be the case if and to the extent that the
amounts payable in respect of the Covered Bonds exceed the value of the cover pool collateral against
which payment of those amounts is secured.
The Member States are as a last resort, after having assessed and exploited the above resolution tools
to the maximum extent possible whilst maintaining financial stability, able to provide extraordinary
public financial support through additional financial stabilisation tools. These consist of the public
equity support and temporary public ownership tools. Any such extraordinary financial support must
be provided in accordance with the EU state aid framework.
An institution will be considered as failing or likely to fail when: it is, or is likely in the near future to
be, in breach of its requirements for continuing authorisation; its assets are, or are likely in the near
future to be, less than its liabilities; it is, or is likely in the near future to be, unable to pay its debts as
they fall due; or it requires extraordinary public financial support (except in limited circumstances).
In addition to the general bail-in tool, the European resolution regimes provide that resolution
authorities will be required to exercise a "write-down and conversion" power relating to Additional
Tier 1 and Tier 2 capital instruments before taking any other form of resolution action. This power
provides the resolution authority with the ability to permanently write down or convert into equity
Additional Tier 1 and Tier 2 capital instruments at the point of non-viability and before any other
resolution action is taken (non-viability loss absorption). Any shares issued to holders of capital
instruments upon any such conversion into equity may also be subject to any application of the
general bail-in tool.
For the purposes of the application of any non-viability loss absorption measure, the point of non-
viability under the European resolution regimes is the point at which the relevant authority determines
that the institution meets the conditions for resolution (but no resolution action has yet been taken) or
that the institution will no longer be viable unless the relevant Additional Tier 1 and/or Tier 2 capital
instruments are written down or converted or extraordinary public support is to be provided and
without such support the appropriate authority determines that the institution would no longer be
viable.
The European resolution regimes also provide resolution authorities with broader powers to
implement other resolution measures with respect to distressed banks, which may include (without
limitation) the replacement or substitution of the bank as obligor in respect of debt instruments,
modifications to the terms of debt instruments (including altering the maturity and/or the amount of
interest payable and/or imposing a temporary suspension on payments) and discontinuing the listing
and admission to trading of financial instruments.
With the implementation of the new resolution regimes, European banks are required to have bail in-
able resources in order to fulfil the Minimum Requirement for own funds and Eligible Liabilities
("MREL"). There is no minimum EU-wide level of MREL ­ each resolution authority is required to
make a separate determination of the appropriate MREL requirement for each banking group within
its jurisdiction, depending on the resolvability, risk profile, systemic importance and other
characteristics of each institution. If an institution does not fulfil the MREL requirement, the relevant
authority may withdraw its banking licence. Also, a comparable concept for loss absorption, Total
Loss Absorbing Capacity ("TLAC"), is under discussion internationally, and these discussions and
their outcome will influence the implementation of MREL in the European Union.




9





The powers set out in the BRRD and the SRM Regulation will impact how credit institutions and
investment firms are managed as well as, in certain circumstances, the rights of creditors. Pursuant to
the bank resolution regime established by the BRRD and the SRM Regulation, holders of Securities
may be subject to write-down or conversion into equity on any application of the general bail-in tool
(subject, in the case of Covered Bonds, to the limitation outlined above), which may result in such
holders losing some or all of their investment. A resolution procedure could potentially also delay
realisation of any collateral of the bank. The exercise of any power under the BRRD or any
suggestion of such exercise could, therefore, materially adversely affect the rights of Noteholders, the
price or value of their investment in any Securities and/or the ability of the Issuer to satisfy its
obligations under any Securities.
Risks related to the market generally
Set out below is a description of certain material market risks, including liquidity risk, exchange rate
risk, interest rate risk and credit risk:
An active secondary market in respect of the Securities may never be established or may be illiquid
and this would adversely affect the value at which an investor could sell its Securities
Securities may have no established trading market when issued, and one may never develop. If a
market does develop, it may not be very liquid. Therefore, investors may not be able to sell their
Securities easily or at prices that will provide them with a yield comparable to similar investments
that have a developed secondary market. This is particularly the case for Securities that are especially
sensitive to interest rate, currency or market risks, are designed for specific investment objectives or
strategies or have been structured to meet the investment requirements of limited categories of
investors. These types of Securities generally would have a more limited secondary market and more
price volatility than conventional debt securities. Illiquidity may have a severely adverse effect on the
market value of Securities.
If an investor holds Securities which are not denominated in the investor's home currency, it will be
exposed to movements in exchange rates adversely affecting the value of its holding. In addition, the
imposition of exchange controls in relation to any Securities could result in an investor not receiving
payments on those Securities
The Issuer will pay principal and interest on the Securities in the Specified Currency. This presents
certain risks relating to currency conversions if an investor's financial activities are denominated
principally in a currency or currency unit (the "Investor's Currency") other than the Specified
Currency. These include the risk that exchange rates may significantly change (including changes due
to devaluation of the Specified Currency or revaluation of the Investor's Currency) and the risk that
authorities with jurisdiction over the Investor's Currency or Specified Currency may impose or
modify exchange controls. An appreciation in the value of the Investor's Currency relative to the
Specified Currency would decrease (i) the Investor's Currency-equivalent yield on the Securities, (ii)
the Investor's Currency equivalent value of the principal payable on the Securities and (iii) the
Investor's Currency equivalent market value of the Securities.
Government and monetary authorities may impose (as some have done in the past) exchange controls
that could adversely affect an applicable exchange rate or the ability of the Issuer to make payments in
respect of Securities. As a result, investors may receive less interest or principal than expected, or no
interest or principal.
The value of Fixed Rate Securities may be adversely affected by movements in market interest rates
Investment in Fixed Rate Securities involves the risk that if market interest rates subsequently
increase above the rate paid on the Fixed Rate Securities, this will adversely affect the value of the
Fixed Rate Securities.




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