Obbligazione Naturgas Energy Group 2.374% ( XS2406737036 ) in EUR

Naturgas Energy Group

100 EUR ▲

Spagna

XS2406737036 ( in EUR )

2.374% per anno ( pagato 1 volta l'anno)

perpetue

Prospetto opuscolo dell'obbligazione Naturgy Energy Group XS2406737036 en EUR 2.374%, scadenza perpetue

100 000 EUR

500 000 000 EUR

23/02/2026 ( In 293 giorni )

Naturgy Energy Group è una multinazionale spagnola operante nel settore energetico, attiva nella produzione, distribuzione e commercializzazione di gas naturale ed energia elettrica.

Naturgy Energy Group ha emesso un'obbligazione perpetua in EUR con codice ISIN XS2406737036, al prezzo attuale del 100%, rendimento del 2.374%, taglia totale di emissione di ?500.000.000 e taglia minima di acquisto di ?100.000, con frequenza di pagamento degli interessi annuale.

Naturgy Finance B.V.
(Formerly, Gas Natural Fenosa Finance B.V.; incorporated with limited liability in the Netherlands and having its
statutory domicile in Amsterdam)
500,000,000 UNDATED 5.25 YEAR NON-CALL DEEPLY SUBORDINATED GUARANTEED
FIXED RATE RESET SECURITIES
unconditionally and irrevocably guaranteed on a subordinated basis by
Naturgy Energy Group, S.A.
(Formerly, Gas Natural SDG, S.A.; incorporated with limited liability in the Kingdom of Spain)
The 500,000,000 Undated 5.25 Year Non-Call Deeply Subordinated Guaranteed Fixed Rate Reset Securities (the "Securities")
are issued by Naturgy Finance B.V. (the "Issuer" or "NF") and unconditionally and irrevocably guaranteed on a subordinated
basis by Naturgy Energy Group, S.A. (the "Guarantee" and the "Guarantor", respectively).
The Securities will bear interest on their principal amount (i) at a fixed rate of 2.374 per cent. per annum from (and including) the
Issue Date to (but excluding) the First Reset Date (as defined in the section headed "Terms and Conditions of the Securities" (the
"Conditions")) payable annually (except for a short first Interest Period) in arrear on 23 February in each year, with the first
Interest Payment Date (as defined below), commencing on 23 February 2022; and (ii) from (and including) the First Reset Date
(as defined in the Conditions), at the applicable 5 Year Swap Rate in respect of the relevant Reset Period plus: (A) in respect of
the period commencing on the First Reset Date to (but excluding) the First Step-up Date, 2.437 per cent. per annum; (B) in respect
of the period commencing on the First Step-up Date to (but excluding) the Second Step-up Date, 2.687 per cent. per annum; and
(C) from and including the Second Step-up Date 3.437 per cent. per annum, all as determined by the Agent Bank (as defined in
the Conditions) subject to the operation of Condition 4(d), payable annually in arrear on 23 February in each year (each, an Interest
Payment Date, as defined in the Conditions), commencing on 23 February 2028.
The Issuer may, at its sole discretion, elect to defer (in whole or in part) any payment of interest on the Securities, as more
particularly described in Condition 5 (Optional Interest Deferral). Any amounts so deferred, together with further interest accrued
thereon (at the Prevailing Interest Rate applicable from time to time), shall constitute Arrears of Interest (as defined in the
Conditions). The Issuer may pay outstanding Arrears of Interest, in whole or in part, at any time in accordance with the Conditions.
Notwithstanding the foregoing, the Issuer shall pay any outstanding Arrears of Interest in whole, but not in part, on the first
occurring Mandatory Settlement Date following the Interest Payment Date on which any outstanding Arrears of Interest was first
deferred, all as more particularly described in Condition 5(c) (Optional Interest Deferral--Mandatory Settlement of Arrears of
Interest).
The Securities will be undated securities in respect of which there is no specific maturity date and shall be redeemable (at the
option of the Issuer) in whole, but not in part, on any date during the period commencing on (and including) 23 November 2026
and ending on (and including) the First Reset Date or upon any Interest Payment Date thereafter, at their principal amount together
with any accrued and unpaid interest up to (but excluding) the Redemption Date (as defined in the Conditions) and any outstanding
Arrears of Interest (including any Additional Interest Amounts thereon). The Securities will be redeemable (at the option of the
Issuer) in whole, but not in part, at any time (other than during the Relevant Period and on any subsequent Interest Payment Date)
at the Make-whole Redemption Amount (each such term as defined in the Conditions). In addition, upon the occurrence of an
Accounting Event, a Capital Event, a Tax Event, a Withholding Tax Event, or a Substantial Purchase Event (each such term as

defined in the Conditions), the Securities will be redeemable (at the option of the Issuer) in whole, but not in part, at the amount
set out, and as more particularly described, in Condition 6 (Redemption and Purchase).
The Securities will constitute direct, unsecured and subordinated obligations of the Issuer and will at all times rank pari passu
and without any preference among themselves, all as more particularly described in Condition 2 (Status and Subordination of the
Securities and Coupons). The payment obligations of the Guarantor under the Guarantee will constitute direct, unsecured and
subordinated obligations of the Guarantor and will at all times rank pari passu and without any preference among themselves. In
the event of the Guarantor being declared in insolvency under Spanish insolvency law, the rights and claims of Holders (as defined
in the Conditions) against the Guarantor in respect of or arising under the Guarantee will rank, as against the other obligations of
the Guarantor, in the manner more particularly described in Condition 3 (Guarantee, Status and Subordination of the Guarantee).
Payments in respect of the Securities will be made without withholding or deduction for, or on account of, any present or future
taxes, duties, assessments or governmental charges of whatever nature of the Netherlands or the Kingdom of Spain, unless such
withholding or deduction is required by law. In the event that any such withholding or deduction is made, additional amounts will
be payable by the Issuer or, as the case may be, the Guarantor, subject to certain exceptions as are more fully described in
Condition 8 (Taxation).
Application has been made to admit the Securities to the official list of the Luxembourg Stock Exchange (the "Official List") and
to trading on the Luxembourg Stock Exchange's Euro MTF Market (the "Euro MTF Market"). The Euro MTF Market is not a
regulated market for the purposes of Directive 2014/65/EU (as amended, "MiFID II") of the European Parliament and of the
Council on markets in financial instruments. References in this Offering Circular to the Securities being "listed" (and all related
references) shall mean that the Securities have been admitted to the Official List and admitted to trading on the Euro MTF Market.
The Securities have not been, and will not be, registered under the United States Securities Act of 1933 (the "Securities Act")
and are subject to U.S. tax law requirements. The Securities are being offered outside the United States by the Joint Bookrunners
(as defined in "Subscription and Sale") in accordance with Regulation S under the Securities Act ("Regulation S"), and may not
be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
The Securities will be in bearer form and in the denomination of 100,000. The Securities will initially be represented by a
temporary global security (the "Temporary Global Security"), without interest coupons or talons, which will be deposited with
a common depositary on behalf of Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking, S.A. ("Clearstream,
Luxembourg") on or about the Issue Date. Interests in the Temporary Global Security will be exchangeable for interests in a
permanent global security (the "Permanent Global Security" and together with the Temporary Global Security, the "Global
Securities") in the circumstances set out in the Temporary Global Security. The Permanent Global Security will be exchangeable
for definitive Securities (the "Definitive Securities") in the circumstances set out in the Permanent Global Security. See
"Summary of Provisions relating to the Securities while in Global Form".
The Securities are expected to be rated BB+ by Standard & Poor's Ratings Europe Limited ("S&P") and BBB- by Fitch Ratings
Limited ("Fitch Ratings"). Each of S&P and Fitch Ratings is established in the European Union and registered under Regulation
(EU) No 1060/2009, as amended (the "CRA Regulation").
A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or
withdrawal at any time by the assigning rating agency.
The determination of the Prevailing Interest Rate in respect of the Securities is dependent upon the relevant 6-month Euro
Interbank Offered Rate ("EURIBOR") administered by the European Money Markets Institute and the 5 Year Swap Rate
appearing on the Reuters Screen Page "ICESWAP2/EURSFIXA" provided by ICE Benchmark Administration Limited. As at the
date of this Offering Circular, the European Money Markets Institute is included in the register of administrators and benchmarks
established and maintained by the European Securities and Markets Authority ("ESMA") pursuant to Article 36 of Regulation
(EU) No 2016/1011 (the "Benchmarks Regulation"). The transitional provisions in Article 51 of the Benchmarks Regulation
apply, such that ICE Benchmark Administration Limited is not currently required to obtain recognition, endorsement or
equivalence.
Prospective investors should have regard to the factors described under the section headed "Risk Factors" in this Offering
Circular.

Global Coordinator and Joint Bookrunner
Morgan Stanley
Joint Bookrunners
BBVA
BofA Securities
CaixaBank
Citigroup
Crédit Agricole CIB
Deutsche Bank
HSBC
J.P. Morgan
Mizuho Securities
MUFG
Société Générale
Corporate & Investment Banking
UniCredit
17 November 2021

IMPORTANT NOTICES
This Offering Circular constitutes a prospectus for the purposes of the Luxembourg Act dated July 16, 2019 on
Prospectuses for securities. This document does not constitute a prospectus for the purposes of Regulation (EU)
2017/1129, as amended (the "Prospectus Regulation"). Each of the Issuer and the Guarantor accepts
responsibility for the information contained in this Offering Circular and declares that, to the best of its
knowledge, the information contained in this Offering Circular is in accordance with the facts and makes no
omission likely to affect its import. Information appearing in this Offering Circular is only accurate as of the
date on the front cover of this Offering Circular. The business, financial condition, results of operations and
prospects of the Issuer and the Guarantor may have changed since such date.
This Offering Circular may only be used for the purposes for which it has been published.
This Offering Circular is to be read in conjunction with all the documents which are incorporated herein by
reference (see "Documents Incorporated by Reference"). This Offering Circular shall be read and construed on
the basis that such documents are incorporated and form part of this Offering Circular.
The language of this Offering Circular is English. Certain legislative references and technical terms have been
cited in their original language in order that the correct technical meaning may be ascribed to them under
applicable law.
Each of the Issuer (in respect of itself) and the Guarantor (in respect of itself and the Issuer) has confirmed to
the Joint Bookrunners named under "Subscription and Sale" below (the "Joint Bookrunners") that this
Offering Circular contains all information regarding the Issuer, the Guarantor and the Securities which is (in
the context of the issue of the Securities) material; such information is true and accurate in all material respects
and is not misleading in any material respect; any opinions, predictions and intentions expressed in this Offering
Circular on the part of the Issuer or the Guarantor (as the case may be) are honestly held or made; and that there
are no other facts the omission of which would make this Offering Circular as a whole or any of such
information or the expression of any such opinions or intentions misleading in any material respect and that the
Issuer and the Guarantor (as applicable) have made all reasonable enquiries to ascertain all facts material for
the purposes aforesaid.
Neither the Issuer nor the Guarantor has authorised the making or provision of any representation or information
regarding the Issuer, the Guarantor or the Securities other than as contained in this Offering Circular or as
approved for such purpose by the Issuer and the Guarantor. Any such representation or information should not
be relied upon as having been authorised by the Issuer, the Guarantor or the Joint Bookrunners.
Neither the delivery of this Offering Circular nor the offering, sale or delivery of any Securities shall, under any
circumstances, create any implication that there has been no change in the affairs of the Issuer or the Guarantor
since the date hereof or the date upon which this Offering Circular has been most recently amended or
supplemented or that there has been no adverse change in the financial position of the Issuer or the Guarantor
since the date hereof or the date upon which this Offering Circular has been most recently amended or
supplemented or that the information contained in it or any other information supplied in connection with the
Securities is correct as of any time subsequent to the date on which it is supplied or, if different, the date
indicated in the document containing the same. The Joint Bookrunners expressly do not undertake to review
the financial condition or affairs of the Issuer or the Guarantor during the life of the Securities or to advise any
investor in the Securities of any information coming to their attention.
The Joint Bookrunners have not independently verified the information contained herein. Accordingly, no
representation, warranty or undertaking, express or implied, is made and no responsibility or liability (whether
fiduciary, in tort or otherwise) is accepted by the Joint Bookrunners as to the accuracy or completeness of the
4

information contained or incorporated in this Offering Circular or any other information provided by the Issuer
or the Guarantor in connection with the Securities. The Joint Bookrunners accept no liability in relation to the
information contained or incorporated by reference in this Offering Circular or any other information provided
by the Issuer or the Guarantor in connection with the Securities.
To the fullest extent permitted by law, none of the Joint Bookrunners accepts any responsibility for any act or
omission of the Issuer or the Guarantor, or for the contents of this Offering Circular or for any other statements
made or purported to be made by any Joint Bookrunner or on their behalf in connection with the Issuer, the
Guarantor or the issue and offering of any Securities. Each of the Joint Bookrunners accordingly disclaims all
and any liability whether arising in tort or contract or otherwise which it might otherwise have in respect of any
act or omission of the Issuer or the Guarantor, or this Offering Circular or any such statement.
This Offering Circular does not constitute an offer of, or an invitation to subscribe for or purchase, any
Securities.
The distribution of this Offering Circular and the offering, sale and delivery of Securities in certain jurisdictions
may be restricted by law. Persons into whose possession this Offering Circular comes are required by the Issuer,
the Guarantor and the Joint Bookrunners to inform themselves about and to observe any such restrictions. For
a description of certain restrictions on offers, sales and deliveries of Securities and on distribution of this
Offering Circular and other offering material relating to the Securities, see "Subscription and Sale".
In particular, the Securities have not been and will not be registered under the Securities Act and are subject to
United States tax law requirements. Subject to certain exceptions, Securities may not be offered, sold or
delivered within the United States or to U.S. persons.
In this Offering Circular, unless otherwise specified, references to a "Member State" are references to a
Member State of the European Economic Area, references to "U.S.$" are to United States dollars, the lawful
currency of the United States of America, references to "£" are to the currency of the United Kingdom and
references to "euro" or "" are to the currency introduced at the start of the third stage of the European economic
and monetary union, and as defined in Article 2 of Council Regulation (EC) No 974/98 of 3 May 1998 on the
introduction of the euro, as amended.
As used in this Offering Circular, "Group" or "Naturgy" means the Guarantor and its consolidated subsidiaries,
unless the context requires otherwise.
The Securities are securities which, because of their nature, are normally bought and traded by a limited number
of investors who are particularly knowledgeable in investment matters, and 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 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;
(ii)
have sufficient financial resources and liquidity to bear all of the risks of an investment in the Securities,
including where the currency for principal or interest payments is different from the potential investor's
currency;
(iii)
understand thoroughly the terms of the Securities and be familiar with the behaviour of any relevant
indices and financial markets; and
(iv)
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.
5

Sophisticated institutional investors generally do not purchase complex financial instruments as stand-alone
investments. They purchase complex financial instruments as a way to enhance yield with an understood,
measured, appropriate addition of risk to their overall portfolios. A potential investor should not invest in the
Securities unless it has the knowledge and 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.
Prior to making an investment decision, potential investors should consider carefully, in light of their own
financial circumstances and investment objectives, all the information contained in this Offering Circular or
incorporated by reference herein. Potential investors should not construe anything in this Offering Circular as
legal, tax, business or financial advice. Each investor should consult with his or her own advisers as to the legal,
tax, business, financial and related aspects of a purchase of the Securities.
MiFID II product governance / Professional investors and ECPs only target market Solely for the
purposes of each manufacturer's product approval process, the target market assessment in respect of
the Securities has led to the conclusion that: (i) the target market for the Securities is eligible
counterparties and professional clients only, each as defined in MiFID II; and (ii) all channels for
distribution of the Securities to eligible counterparties and professional clients are appropriate. Any
person subsequently offering, selling or recommending the Securities (a "distributor") should take into
consideration the manufacturers' target market assessment; however, a distributor subject to MiFID II
is responsible for undertaking its own target market assessment in respect of the Securities (by either
adopting or refining the manufacturers' target market assessment) and determining appropriate
distribution channels.
UK MiFIR product governance / Professional investors and ECPs only target market Solely for the
purposes of each manufacturer's product approval process, the target market assessment in respect of
the Securities has led to the conclusion that: (i) the target market for the Securities is only eligible
counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook, and professional
clients, as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MiFIR"); and (ii) all channels for distribution of the
Securities to eligible counterparties and professional clients are appropriate. Any person subsequently
offering, selling or recommending the Securities (a "distributor") should take into consideration the
manufacturers' target market assessment; however, a distributor subject to the FCA Handbook Product
Intervention and Product Governance Sourcebook (the "UK MiFIR Product Governance Rules") is
responsible for undertaking its own target market assessment in respect of the Securities (by either
adopting or refining the manufacturers' target market assessment) and determining appropriate
distribution channels.
PROHIBITION OF SALES TO EEA RETAIL INVESTORS The Securities are not intended to be
offered, sold or otherwise made available to and should not be offered, sold or otherwise made available
to any retail investor in the European Economic Area (the "EEA"). For these purposes, a retail investor
means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID
II; or (ii) a customer within the meaning of Directive (EU) 2016/97 (the "IDD"), where that customer
would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently
no key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs
Regulation") for offering or selling the Securities or otherwise making them available to retail investors
in the EEA has been prepared and therefore offering or selling the Securities or otherwise making them
available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
PROHIBITION OF SALES TO UK RETAIL INVESTORS The Securities are not intended to be
offered, sold or otherwise made available to and should not be offered, sold or otherwise made available
6

to any retail investor in the United Kingdom ("UK"). For these purposes, a retail investor means a person
who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No
2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018
("EUWA"); or (ii) a customer within the meaning of the provisions of the Financial Services and Markets
Act 2000 (the "FSMA") and any rules or regulations made under the FSMA to implement IDD, where
that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of UK
MiFIR. Consequently no key information document required by the PRIIPs Regulation as it forms part
of domestic law by virtue of the EUWA (the "UK PRIIPs Regulation") for offering or selling the Securities
or otherwise making them available to retail investors in the UK has been prepared and therefore offering
or selling the Securities or otherwise making them available to any retail investor in the UK may be
unlawful under the UK PRIIPs Regulation.
In connection with the issue of the Securities, Morgan Stanley Europe SE (the "Stabilisation Manager")
(or persons acting on behalf of the Stabilisation Manager) 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, stabilisation may not necessarily occur. Any stabilisation action may begin
on or after the date on which adequate public disclosure of the terms of the offer of the Securities is made
and, if begun, may cease at any time, but it must end no later than the earlier of 30 days after the issue
date of the Securities and 60 days after the date of the allotment of the Securities. Any stabilisation action
or over-allotment must be conducted by the Stabilisation Manager (or person(s) acting on behalf of the
Stabilisation Manager) in accordance with all applicable laws and rules.
No Active Trading Market
The Securities are new securities which may not be widely distributed and for which there is currently no active
trading market. If the Securities are traded after their initial issuance, they may trade at a discount to their initial
offering price, depending upon prevailing interest rates, the market for similar securities, general economic
conditions and the financial condition of the Issuer and the Guarantor. Although application has been made to
admit the Securities to the official list of the Luxembourg Stock Exchange and to trading on the Luxembourg
Stock Exchange's Euro MTF Market, there is no assurance that an active trading market will develop.
Accordingly, there is no assurance as to the development or liquidity of any trading market for the Securities.
ALTERNATIVE PERFORMANCE MEASURES
Certain alternative performance measures (as defined in the ESMA Guidelines on Alternative Performance
Measures) ("Alternative Performance Measures" or "APMs") are included in this Offering Circular (which
reference includes any information incorporated by reference herein). Such APMs, which are not required by,
and have not been prepared in accordance with, International Financial Reporting Standards as adopted by the
European Union ("IFRS-EU"), have been extracted or derived from the accounting records of the Group.
The Guarantor believes these measures will assist securities analysts, investors and other interested parties in
the understanding of the Group's results of operations and financial position. These APMs should be viewed as
complementary to, rather than a substitute for, the figures determined according to IFRS-EU. Such APMs have
not been audited or reviewed, and are not recognised measures of financial performance or liquidity under
IFRS-EU but are used by management to monitor the underlying performance of the business, operations and
financial condition of the Group.
These APMs may not be indicative of the Group's historical results, nor are such measures meant to be
predictive of its future results. The Guarantor has presented these APMs in this Offering Circular because it
considers them to be important supplemental measures of the Group's performance or liquidity, because these
and similar measures are seen to be used widely in the sector in which it operates as a means of evaluating a
company's operating performance and liquidity. However, not all companies calculate such APMs in the same
7

manner or on a consistent basis. As a result, these measures may not be comparable to measures used by other
companies under the same or similar names. and they should not be considered as a substitute for financial
measures computed in accordance with IFRS-EU.
Accordingly, undue reliance should not be placed on such APMs contained in this Offering Circular.
For the definitions and reconciliations of such APMs, see "Alternative performance metrics" in Annex I to the
consolidated annual directors' report of the Guarantor for the year ended 31 December 2020 and Appendix I of
the interim consolidated directors' report of the Guarantor for the six-month period ended 30 June 2021 (the
"Interim Consolidated Directors' Report 2021") which are incorporated by reference in this Offering Circular
for information on APMs contained in this Offering Circular.
8

TABLE OF CONTENTS
IMPORTANT NOTICES
.........................................................................................
4
TABLE OF CONTENTS
.........................................................................................
9
RISK FACTORS ...................................................................................................
10
OVERVIEW OF THE SECURITIES ............................................................................
28
DOCUMENTS INCORPORATED BY REFERENCE
......................................................
36
TERMS AND CONDITIONS OF THE SECURITIES
......................................................
41
SUMMARY OF PROVISIONS RELATING TO THE SECURITIES WHILE IN GLOBAL FORM
... 69
FORM OF GUARANTEE .........................................................................................
71
USE AND ESTIMATED NET AMOUNT OF PROCEEDS
...................................................
76
DESCRIPTION OF NATURGY FINANCE B.V. ...............................................................
77
DESCRIPTION OF NATURGY ENERGY GROUP, S.A.
...................................................
79
TAXATION
.........................................................................................................
112
SUBSCRIPTION AND SALE ....................................................................................
119
GENERAL INFORMATION
....................................................................................
123
9

RISK FACTORS
Any investment in the Securities is subject to a number of risks. Prior to investing in the Securities, prospective
investors should carefully consider risk factors associated with any investment in the Securities, the business of
the Issuer and the Guarantor and the industries in which each of them operates, together with all other
information contained in this Offering Circular, including, in particular the risk factors described below. Words
and expressions defined in the "Terms and Conditions of the Securities" below or elsewhere in this Offering
Circular have the same meanings in this section.
The Issuer and the Guarantor have identified in this Offering Circular a number of factors which could
materially adversely affect their businesses and ability to make payments due under the Securities and the
Guarantee, respectively, and believe that the factors described below represent the principal risks inherent in
investing in the Securities.
Those risk factors that the Issuer and the Guarantor believe are the most material as at the date of this Offering
Circular have been presented first in each category. The order of presentation of the categories themselves or
the remaining risk factors in each category is not intended to be an indication of the probability of their
occurrence or of their potential effect on the Issuer's or the Guarantor's ability to fulfil their obligations under
the Securities.
Additional risks and uncertainties relating to the Issuer and the Guarantor that are not currently known to the
Issuer and the Guarantor or that either currently deems immaterial, may individually or cumulatively also have
a material adverse effect on the business, prospects, results of operations and/or financial position of the Issuer
and the Guarantor, and if any such risk should occur, the price of the Securities may decline and investors could
lose all or part of their investment. Investors should consider carefully whether an investment in the Securities
is suitable for them in light of the information in this Offering Circular and their personal circumstances.
(I)
RISK FACTORS THAT MAY AFFECT THE ISSUER'S AND THE GUARANTOR'S ABILITY TO
FULFIL THEIR OBLIGATIONS UNDER THE SECURITIES
The risk factors set out below are applicable to the Issuer as a member of the Group, and the Guarantor.
1.
LEGAL AND REGULATORY RISKS
Risks relating to the Group's regulatory environment
The Group operates in a highly regulated environment that impacts both regulated and liberalised activities and,
as a result, the Guarantor and its subsidiaries are required to comply with a wide variety of legal rules and
regulations applying to the natural gas and electricity sectors. In particular, gas and electricity distribution are
regulated businesses in most of the countries in which the Group carries out these activities. In addition, the
Group is subject to laws and regulations concerning prices, environmental requirements and other aspects of its
activities in each of the countries in which it operates. An overview of such laws and regulations is available at
Note 2 of Appendix IV of the Guarantor's consolidated annual accounts for the year ended 31 December 2020,
which are incorporated by reference in this Offering Circular, together with some further descriptions of recent
regulatory developments set out in "Description of Naturgy Energy Group, S.A.--Legislation in Spain".
Although such overview contains all the information that the Group considers material as at the date of this
Offering Circular and in the context of the issue of the Securities, it does not constitute an exhaustive description
of all applicable laws and regulations affecting the Group.
Prospective investors and their advisers should make their own analysis of the legislation and regulations
applicable to the Group and of the impact they may have on the Group and any investment in the Securities and
should not rely on such overview only.
The laws and regulations governing the natural gas and electricity sectors in the countries where the Group
operates are typically subject to periodic review by the regulatory authorities. Following such reviews, or as a
result of the approval of new laws and regulations, the regulatory frameworks prevailing in those jurisdictions,
along with the interpretation of the applicable rules, may be modified, and such modifications may be significant
in certain instances. Additionally, the regulatory authorities periodically update the tariffs and remunerations
of the regulated activities, which may result in adverse variations in the income or remuneration of the Group.
10