Obligation Hybrid Capital Funding One 8% ( XS0216711340 ) en USD

Hybrid Capital Funding One

1.49 % ▼

Allemagne

XS0216711340 ( en USD )

8% par an ( paiement trimestriel )

Perpétuelle

Prospectus brochure de l'obligation Hybrid Capital Funding I XS0216711340 en USD 8%, échéance Perpétuelle

1 000 USD

300 000 000 USD

30/03/2026 ( Dans 51 jours )

Hybrid Capital Funding I est une société de capital-investissement qui investit dans des entreprises de croissance à forte valeur ajoutée, en utilisant une combinaison de financement par actions et de dette, offrant ainsi une flexibilité accrue aux entreprises ciblées.

L'obligation perpétuelle XS0216711340 émise par Hybrid Capital Funding I en Allemagne, d'une taille totale de 300 000 000 USD et négociée en USD, offre un taux d'intérêt de 8 % avec des paiements trimestriels (fréquence 4), un prix actuel sur le marché de 0,5 %, une taille minimale d'achat de 1 000 USD et une maturité perpétuelle.

OFFERING CIRCULAR
US$ 300,000,000 Capital Securities
issued by
Hybrid Capital Funding I Limited Partnership
(a limited partnership established under the laws of Jersey on 22 March 2005)
for purposes of acquiring a silent partnership interest in the
commercial enterprise (Handelsgewerbe) of
WestLB AG
(a stock corporation (Aktiengesellschaft) established under the laws of Germany)
Issue price of the Capital Securities: 100 per cent.
The issue price of the US$ 300,000,000 Capital Securities in the denomination of US$ 1,000 each
(the ``Capital Securities''), issued by Hybrid Capital Funding I Limited Partnership (the ``Issuer''), a
limited partnership established under the laws of Jersey on 22 March 2005, is 100 per cent. of their
principal amount.
The Capital Securities will bear interest from (and including) 22 April 2005 (the ``Issue Date'') at a rate
of 8.0 per cent. per annum, payable quarterly in arrear on 30 March, 30 June, 30 September and
30 December of each year, commencing on 30 June 2005. Payments may be delayed and are
contingent on the Issuer's actual receipt of funds under the Participation Agreement and under the Loan
Agreement (each as defined below) as described in ``Terms and Conditions of the Capital Securities''.
The Capital Securities are redeemable in whole, but not in part, at the option of the Issuer on 30 June
2011 or on 30 June of any year thereafter as described in ``Terms and Conditions of the Capital
Securities''.
With the proceeds of the issue, the Issuer will acquire a silent partnership interest (the ``Participation'')
in the commercial enterprise (Handelsgewerbe) of WestLB AG (``WestLB'' or the ``Bank'') in the form of
a Stille Gesellschaft under German law pursuant to an agreement providing for a capital contribution by
the Issuer to WestLB in the amount of US$ 300,000,000 (the ``Silent Contribution'') and dated 6 April
2005 (the ``Participation Agreement''). The Issuer expects to fund interest payments on the Capital
Securities with distributions received under the Participation Agreement and funds received from WestLB
(in this capacity, the ``Lender'') under a loan agreement.
Investing in the Capital Securities involves certain risks. Please review carefully the section
entitled ``Risk Factors'' beginning on page 22 of this Offering Circular.
The Capital Securities will initially be represented by a temporary global security in bearer form without
coupons which will be deposited on or about the Issue Date with a common depositary for Euroclear
Bank S.A./N.V. as operator of the Euroclear System (``Euroclear'') and Clearstream Banking S.A.,
Luxembourg (``Clearstream Luxembourg''), where the Capital Securities have been accepted for
clearance. It is expected that delivery of the Capital Securities will be made through Euroclear and
Clearstream Luxembourg against payment therefor in immediately available funds, on or about the Issue
Date. The temporary global security will be exchangeable for a permanent global security in bearer form
upon certification as to non-US beneficial ownership.
The Capital Securities have not been, and will not be registered under the U.S. Securities Act of
1933, as amended (the ``1933 Act''), or under any state securities laws and may not be offered,
sold or delivered in the United States unless registered under the 1933 Act or if an exemption
from the registration requirements of the 1933 Act is available. The Capital Securities are being
offered and sold only to certain persons in transactions outside the United States in compliance
with Regulation S under the 1933 Act.
Application has been made to list the Capital Securities on the Luxembourg Stock Exchange.
Joint Bookrunner
Joint Bookrunner
JPMorgan
Lehman Brothers
Joint Bookrunner and Structuring Advisor
Joint Bookrunner
Merrill Lynch International
WestLB
The date of this Offering Circular is 20 April 2005

WestLB accepts responsibility for the information contained in this Offering Circular. To the best
of its knowledge and belief (having taken all reasonable care to ensure that such is the case) the
information contained in this Offering Circular is in accordance with the facts and does not omit
anything likely to affect the import of such information. The Issuer and its partners accept
responsibility for the information in this Offering Circular about themselves and the description
of the Transaction (as defined in ``Summary'') but do not accept responsibility for any other
information contained in this Offering Circular.
In connection with the issue and sale of the Capital Securities, no person is authorised to give
any information or to make any representation not contained in this document and in the
documents referred to herein, which are made available for inspection by the public, and if given
or made, such information or representation must not be relied upon as having been authorised
by the Issuer, the partners of the Issuer, WestLB or the Managers (as defined in ``Subscription
and Sale'').
The Jersey Financial Services Commission (the ``Commission'') has given and has not withdrawn
its consent under Article 8 of the Control of Borrowing (Jersey) Order 1958 to the creation by the
Issuer of the limited partnership interests in the Issuer. The Commission is protected by the
Borrowing (Control) (Jersey) Law 1947, as amended, against liability arising from the discharge
of its functions under that Law.
Nothing in this Offering Circular or anything communicated to holders of, or investors in, the
Capital Securities (or any such potential Security holders or investors) is intended to constitute,
or should be construed as, advice on the merits of the purchase of, or subscription for, the
Capital Securities or the exercise of any rights attached thereto for the purposes of the Financial
Services (Jersey) Law 1998, as amended.
An investment in the Capital Securities is suitable only for financially sophisticated investors
who are capable of fully evaluating the risks involved in making such investments and who have
an asset base sufficiently substantial as to enable them to sustain any loss that they might suffer
as a result of making such investments.
Prospective investors should satisfy themselves that they understand all of the risks associated
with making investments in the Capital Securities. If a prospective investor is in any doubt
whatsoever as to the risks involved in investing in the Capital Securities, he should consult
professional advisers.
Prospective investors should inform themselves as to the legal requirements and tax conse-
quences within the countries of their residence and domicile for the acquisition, holding or
disposal of Capital Securities and any foreign exchange restrictions that might be relevant to
them. This Offering Circular does not constitute an offer of, or an invitation by or on behalf of, the
Issuer, the partners of the Issuer, WestLB or the Managers to subscribe for or to purchase any of
the Capital Securities.
This Offering Circular is not intended to provide the basis of any credit or other evaluation and
should not be considered as a recommendation by the Issuer, the partners of the Issuer, WestLB
or the Managers that any recipient of this Offering Circular should purchase any of the Capital
Securities. Each investor contemplating purchasing Capital Securities should make its own
independent investigation of the financial condition and affairs, and its own appraisal of the
creditworthiness, of the Issuer and WestLB.
The distribution of this document and the offering or sale of the Capital Securities in certain
jurisdictions may be restricted by law. None of the Issuer, the partners of the Issuer, WestLB or
the Managers represent that this document may be lawfully distributed, or that the Capital
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, none of
the Issuer, the partners of the Issuer. WestLB or the Managers has taken any action which would
permit a public offering of the Capital Securities or distribution of this document in any
jurisdiction where action for that purpose is required. Accordingly, no Capital Securities may be
offered or sold, directly or indirectly, and neither this Offering Circular 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
2

into whose possession this Offering Circular or the Capital Securities may come, must inform
themselves about, and observe, any such restrictions (see ``Subscription and Sale'' for a
description, inter alia, of certain restrictions on offers, sales and deliveries of the Capital
Securities). Neither the delivery of this Offering Circular nor any sale hereunder shall create,
under any circumstances, any implication that there has been no change in the affairs of the
Issuer, the partners of the Issuer, WestLB or the WestLB Group (as defined in ``Presentation of
Financial Information'') since the date hereof or that the information contained herein is correct
as of any time subsequent to its date.
It should be noted that the Capital Securities do not represent partnership interests in the Issuer.
In connection with the offering, Merrill Lynch International or any person acting for it may
over-allot or effect transactions with a view to supporting the market prices of the Capital
Securities at a level higher than that which might otherwise prevail for a limited time. However,
there is no obligation on Merrill Lynch International or any of its agents to do this. Such
stabilising, if commenced, may be discontinued at any time and must be brought to an end after
a limited period. Such transactions may be effected on the Luxembourg Stock Exchange or
otherwise.
The Capital Securities have not been, and will not be, registered under the 1933 Act and are
securities in bearer form that are subject to United States tax law requirements. Subject to certain
exceptions, the Capital Securities may not be sold or delivered, directly or indirectly, within the
United States or to U.S. persons.
3

FORWARD-LOOKING STATEMENTS
In addition to historical information, this Offering Circular includes forward-looking statements. These
statements relate to WestLB's future prospects, developments and business strategies. They are based
on analyses of forecasts of future results and estimates of amounts not yet determinable or foreseeable.
These forward-looking statements are identified by the use of terms and phrases such as ``anticipate'',
``believe'', ``could'', ``estimate'', ``expect'', ``intend'', ``may'', ``plan'', ``predict'', ``project'', ``will'', and similar
terms and phrases, including references to assumptions. These statements are contained in the sections
entitled ``Summary of the Transaction'', ``Summary of the Offering'', ``Risk Factors'', ``Business of
WestLB'' and other sections of this Offering Circular.
These forward-looking statements involve risks, uncertainties and other factors that may cause the
actual future results, performance and achievements to be materially different from those suggested or
described in this Offering Circular. Many of the factors that will determine these results, performance and
achievements are beyond WestLB's control. Such factors include, among others, uncertainties in respect
of overall economic development, loan defaults, court proceedings or other proceedings such as formal
investigations of the European Commission in respect of illegal state aid, maintenance of appropriate
refinancing conditions and generally the economic and business framework of the markets relevant for
WestLB's business.
The risks described above and in the section entitled ``Risk Factors'' are not comprehensive. New risks,
uncertainties and other factors may emerge from time to time and it is not possible for WestLB to predict
all such risk factors, to assess the impact of all such risk factors on its business or the extent to which
any factor, or combination of factors, may cause actual results to differ materially from those contained
in any forward-looking statements. Given these risks and uncertainties, the investor should not place
undue reliance on forward-looking statements as a prediction or guarantee of actual results or events.
4

PRESENTATION OF FINANCIAL INFORMATION
WestLB's unconsolidated and consolidated financial statements have been prepared on the basis of the
German Commercial Code (Handelsgesetzbuch) and generally accepted accounting rules thereunder
(``German GAAP''). All of the financial information presented in this Offering Circular and relating to
WestLB is based on WestLB's audited consolidated and unconsolidated financial statements as of and
for the years ended 31 December 2002, 2003 and 2004 including the notes thereto. The audited
unconsolidated and consolidated financial statements for the year ended 31 December 2004 have not
yet been formally approved (festgestellt) by WestLB's Supervisory Board. WestLB's consolidated
financial statements reflect financial information of WestLB and its affiliates consolidated under German
GAAP (together, the ``WestLB Group'').
5

TABLE OF CONTENTS
SUMMARY OF THE TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
SUMMARY OF THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
SUMMARY OF THE TERMS OF THE CAPITAL SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
SUMMARY OF THE TERMS OF THE PARTICIPATION AGREEMENT . . . . . . . . . . . . . . . . . . . . . .
14
SUMMARY OF THE TERMS OF THE LOAN AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
SELECTED FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
CAPITALISATION, REGULATORY CAPITAL, DISTRIBUTABLE PROFITS AND DIVIDENDS . .
27
TERMS AND CONDITIONS OF THE CAPITAL SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30
TERMS AND CONDITIONS OF THE PARTICIPATION AGREEMENT . . . . . . . . . . . . . . . . . . . . . . .
51
TERMS AND CONDITIONS OF THE LOAN AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63
DESCRIPTION OF THE CONTRIBUTION AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
76
DESCRIPTION OF THE ASSIGNMENT AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77
GENERAL INFORMATION ON WESTLB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
78
GENERAL INFORMATION ON THE ISSUER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
86
BUSINESS OF WESTLB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88
REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100
SUBSCRIPTION AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
102
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
105
RECENT DEVELOPMENTS AND OUTLOOK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
107
6

SUMMARY OF THE TRANSACTION
The following paragraphs contain a brief overview of the most significant features of the transaction
consisting of the issuance of the US$ 300,000,000 Capital Securities (the ``Capital Securities'') by
Hybrid Capital Funding I Limited Partnership (the ``Issuer'') and the acquisition by the Issuer of a silent
partnership interest (the ``Participation'') in the commercial enterprise of WestLB AG (``WestLB'') in the
form of a Stille Gesellschaft under German law pursuant to an agreement providing for a capital
contribution by the Issuer to WestLB in the amount of US$ 300,000,000 (the ``Silent Contribution'') and
dated 6 April 2005 (the ``Participation Agreement'') (together, the ``Transaction'').
The Issuer proposes to issue US$ 300,000,000 Capital Securities. With the proceeds of issue of the
Capital Securities, the Issuer will acquire a silent partnership interest in the aggregate amount of US$
300,000,000 in the commercial enterprise (Handelsgewerbe) of WestLB in the form of a Stille
Gesellschaft under German law. As silent partner under the Participation Agreement (``Silent Partner''),
the Issuer will make the Silent Contribution in the form of a cash contribution of US$ 300,000,000 to
WestLB as principal. In return, the Issuer, as Silent Partner, will earn profit participations (``Profit
Participations'') calculated annually on the basis of the nominal amount of its Silent Contribution for
each fiscal year of WestLB and payable quarterly in arrear (``Profit Participation Payments''). Profit
Participations will not accrue if (but only to such extent that) there are insufficient Distributable Profits
available to make payment thereof. The Participation Agreement defines ``Distributable Profits'' as the
unconsolidated net profit (Jahresüberschuss) or net loss (Jahresfehlbetrag) of the Bank, plus withdrawals
from other earnings reserves, if any, accumulated during the term of this Agreement, minus any loss
carried forward from previous years and minus any amount to be allocated to the legal reserves pursuant
to Section 300 of the German Stock Corporation Act, all in compliance and determined in accordance
with German GAAP (see ``-Risk Factors Risks associated with an investment in the Capital Securities
Coupon Payments on the Capital Securities depend on WestLB's profits and allocation of Profit
Participations to the Participation''). If Distributable Profits of WestLB do not suffice for the accrual of full
Profit Participations, Profit Participations may accrue in part. In addition, the Silent Partner shares in an
Annual Balance Sheet Loss (as defined in the Silent Partnership Agreement) in the proportion which the
book value of its Silent Contribution bears in relation to the aggregate book value of all components of
WestLB's regulatory liable capital (Haftkapitalanteile) which are required to share in such Annual Balance
Sheet Loss. In such case, the book value of the Silent Contribution will be reduced in the amount of its
pro-rata share in the relevant Annual Balance Sheet Loss (``Reduction''). After a Reduction, the book
value of the Silent Contribution will be written up again to its initial amount of US$ 300,000,000 to the
extent that such write-up will not result in a Balance Sheet Loss for the relevant year. Future Profit
Participations may only be paid after a full write-up of the Silent Contribution's book value to US$
300,000,000. Profit Participation Payments in following years will not increase to compensate for
any shortfall in Profit Participation Payments during a previous year.
Profit Participation Payments and replenishments of the Silent Contribution after a Reduction are subject
to German withholding tax (Kapitalertragssteuer) (``German Withholding Tax'') plus solidarity surcharge
(Solidaritätszuschlag) to be withheld and transferred by WestLB to the German tax authorities. To the
extent such Profit Participation Payments and to the extent such replenishments are attributable to the
Issuer's limited partner as taxable profit under German tax laws, such withholdings will be counted as a
prepayment towards the German income tax owed by the Issuer's limited partner. The Issuer's limited
partner will be entitled to refund claims against the German tax authorities (``Tax Refund Claims'') in
amounts by which the prepayments in the form of withholdings made by WestLB exceed its actual
German income tax liability. The Issuer's limited partner has undertaken, in a separate contribution
agreement with the Issuer's general partner dated 20 April 2005 (the ``Contribution Agreement''), to
contribute to the Issuer amounts it receives from the German tax authorities on account of its Tax Refund
Claims as and when it receives such amounts (each such payment a ``Contribution Payment''). As Tax
Refund Claims only become due after the tax assessment for each tax year, the Issuer, on 6 April 2005,
has entered into a loan agreement (the ``Loan Agreement'') with the Lender. Under the Loan Agreement,
the Lender is obliged to make loan advances (each an ``Advance'') to the Issuer. The Advances will be
made (i) in the amount of the withholdings made by the Bank in connection with Profit Participation
Payments on account of German Withholding Tax in order to fund in part the Issuer's obligation to pay
interest on the Capital Securities, (ii) in the amount of the withholdings made by the Bank on account of
German Withholding Tax in connection with a replenishment of the Silent Contribution after a Reduction
in order to fund the Issuer's obligation to pay such amount to the Bank to further replenish the Silent
Contribution, and (iii) in the amount of the interest payments falling due on the Capital Securities up to
and including 30 March 2006 in order to fund such interest payments. The Issuer expects to repay the
7

Advances (i) made in connection with withholdings made by the Bank on account of German Withholding
Tax with the monies that it receives as Contribution Payments and (ii) made to fund interest payments
on the Capital Securities falling due on or prior to 30 March 2006 with the monies it receives as the first
Profit Participation Payment under the Partnership Agreement.
Principal payments (``Capital Payments'') and interest payments (``Coupon Payments'') under the
Capital Securities are conditional upon receipt by the Issuer of (i) Profit Participations under the
Participation Agreement, (ii) the Repayment Amount (as defined below) to be paid to the Issuer by
WestLB following termination of the Participation Agreement and (iii) Advances from the Lender under
the Loan Agreement. Coupon Payments (save for Coupon Payments falling due on or prior to 30 March
2006) are thus linked to the Profit Participation Payments payable under the Participation Agreement
falling due on such dates as the corresponding payments under the Capital Securities fall due. These are
in turn dependent upon WestLB's financial performance. Similarly, the repayment of principal on the
Capital Securities is dependent upon WestLB's ability after termination of the Participation Agreement to
pay the Repayment Amount. In both instances, the Issuer's ability and obligation to make payments
under the Capital Securities are directly dependent on the financial condition and results of operations
of WestLB. Moreover, if WestLB incurs an Annual Balance Sheet Loss in any fiscal year, the book
value of the Silent Contribution will be written down and holders of the Capital Securities (the
``Securityholders'') will not receive Coupon Payments under the Capital Securities until the Silent
Contribution has been fully written up using subsequent Distributable Profits.
The Capital Securities have an indefinite term. The Issuer will redeem the Capital Securities only if it has
actually received prior to redemption sufficient funding for the Capital Payments, whether through the
payment of the Repayment Amount by WestLB following termination of the Participation Agreement or
otherwise. The Participation Agreement runs for an indefinite period and may only be terminated by
WestLB. It may not be terminated by the Silent Partner. A termination of the Participation Agreement by
WestLB requires two years' notice and, subject to certain exceptions described in this Offering Circular,
may not become effective prior to 31 December 2015 for repayment on 30 June 2016. In addition, the
Participation Agreement provides that no termination may become effective without prior regulatory
approval. Securityholders should therefore be aware that they may be required to bear the
financial risks of an investment in the Capital Securities for an indefinite period of time.
Pursuant to a security assignment agreement dated 20 April 2005 (``Assignment Agreement'') between
the Issuer, the Issuer's partners, WestLB, the Lender and HSBC Trustee (C.I.) Limited acting as a
security trustee for the benefit of the Securityholders (the ``Security Trustee''), the Issuer has assigned
to the Security Trustee, for the benefit of the Securityholders, all present and future payment claims
under the Participation Agreement, the Loan Agreement and the Contribution Agreement.
WestLB intends to treat the Silent Contribution under the Participation Agreement as solo tier one capital
for the purposes of determining its compliance with regulatory capital requirements. For more information
on the regulatory capital requirements applicable to WestLB and the WestLB Group, see ``Regulation''.
8

SUMMARY OF THE OFFERING
The following overview describes the most important elements of the offering and the Transaction. It is
necessarily incomplete and investors are urged to read carefully the entire summary and the full text of
the Offering Circular for a more precise description of the offered Capital Securities and the information
concerning (i) the Transaction, (ii) WestLB, the Issuer and the partners in the Issuer and (iii) the
agreements among them. The following description is based on the situation on the Issue Date of the
Capital Securities.
Securities Offered
US$ 300,000,000 Capital Securities; see (``Summary of the Terms of the
Capital Securities'').
Issuer
Hybrid Capital Funding I Limited Partnership, a limited partnership
established under the laws of Jersey on 22 March 2005.
Partners in the Issuer
The Issuer's general partner (with a 0.01 per cent. interest in the Issuer's
equity) is Hybrid Capital Funding Limited, a limited liability company
incorporated under the laws of Jersey (the ``Issuer General Partner'').
The sole shareholder of the Issuer General Partner is Mourant & Co.
Trustees Limited as trustee of the Hybrid Capital Funding Charitable Trust.
The Issuer's limited partner (with a 99.99 per cent. interest in the Issuer's
equity) is Hybrid Funding GmbH, Straelen, Germany, a limited liability
company (Gesellschaft mit beschränkter Haftung) incorporated under the
laws of Germany (the ``Issuer Limited Partner''). The sole beneficial
shareholder of the Issuer Limited Partner is Mourant & Co. Trustees
Limited as trustee of the Hybrid Funding Charitable Trust.
Limited Purpose of
Apart from entering into the Participation Agreement (see ``Summary of the
Issuer
Terms of the Participation Agreement''), entering into other agreements
ancillary to the Transaction and issuing the Capital Securities, the Issuer
General Partner has undertaken to the Issuer Limited Partner that the
Issuer will not create additional liabilities, except for those liabilities which
are absolutely necessary to keep its business in operation. See `` General
Information on the Issuer--Incorporation, Domicile, Duration and Object''.
Ordinary Issuer
Under the partnership agreement of the Issuer and the articles of
Relocation
association of the Issuer General Partner, the Issuer and the Issuer
General Partner will relocate their principal place of business and tax
jurisdiction for German trade tax purposes to Germany, subject to certain
conditions. Such relocation (an ``Ordinary Issuer Relocation'') will not
affect the Issuer's obligations under the Capital Securities. See `` General
Information on the Issuer--Ordinary Issuer Relocation''.
Participation
With the proceeds of the issue of the Capital Securities, the Issuer will
acquire the Participation pursuant to the Participation Agreement; see
``Summary of the Terms of the Participation Agreement''.
Contribution Agreement
In the Contribution Agreement, entered into between the Issuer Limited
Partner and the Issuer General Partner, the Issuer Limited Partner has
undertaken for the benefit of the Issuer to contribute to the Issuer any
amounts it receives from the German tax authorities on account of its Tax
Refund Claims. See ``Description of the Contribution Agreement''.
Following an Ordinary Issuer Relocation, the Issuer Limited Partner
expects to continue to be entitled to receive amounts on account of its Tax
Refund Claims and its obligation to pay those amounts to the Issuer
remains unchanged.
9

Loan Agreement
Under the Loan Agreement entered into between the Issuer and the
Lender, the Issuer will be paid Advances corresponding to the relevant
withholdings on account of German Withholding Tax on (i) the Profit
Participation Payments and (ii) replenishments of the Silent Contribution
after a Reduction. The Issuer will use the Advances to fund its obligations
to make the Coupon Payments under the Capital Securities and to make
such additional cash contribution to WestLB as is necessary to make up
the withheld tax and complete the replenishment of the Silent Contribution
after a Reduction. The Issuer will also be paid Advances by the Lender
under the Loan Agreement to fund Coupon Payments falling due on the
Capital Securities on or prior to 30 March 2006. See ``Summary of the
Terms of the Loan Agreement''.
Assignment Agreement
Pursuant to the Assignment Agreement, the Issuer has assigned to the
Security Trustee, for the benefit of the Securityholders, all present and
future payment claims under the Participation Agreement, the Loan
Agreement and the Contribution Agreement. See ``Description of the
Assignment Agreement''.
Principal Paying Agent
WestLB AG
Luxembourg Paying
WestLB International S.A.
Agent
Rating
The Issuer expects that, upon issuance, the Capital Securities will be
assigned a rating of Baa2 by Moody's Investors Service, Inc. A rating is not
a recommendation to buy, sell or hold securities, and may be subject to
revision, suspension or withdrawal at any time by Moody's Investor
Service, Inc.
Security Trustee
HSBC Trustee (C.I.) Limited
Listing
Application has been made to list the Capital Securities on the Luxembourg
Stock Exchange
Securities Codes
ISIN: XS0216711340
Common Code: 021671134
Wertpapier-Kenn-Nummer (WKN): A0D1KQ
10