Obligation Générale Société 0% ( XS0867614595 ) en USD

Générale Société

100 % ▼

France

XS0867614595 ( en USD )

29/11/2018 - Obligation échue

Prospectus brochure de l'obligation SOCIETE GENERALE XS0867614595 en USD 0%, échue

Société Générale est une banque universelle française offrant des services de banque de détail, banque privée, banque d'investissement et gestion d'actifs.

L'Obligation émise par Générale Société ( France ) , en USD, avec le code ISIN XS0867614595, paye un coupon de 0% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 29/11/2018

Series No: 54065/13-9,Tranche No: 1
Issue of USD 1,250,000,000 Undated Deeply Subordinated Resettable Interest Rate Notes
under the 125,000,000,000 Debt Instruments Issuance Programme
Issue price: 100.00 per cent.
The USD 1.250,000,000 Undated Deeply Subordinated Resettable Interest Rate Notes (the "Notes") will be issued by Société Générale (the
"Issuer") under its 125,000,000,000 Debt Instruments Issuance Programme (the "Programme"). The Notes will constitute direct, unconditional,
unsecured and deeply subordinated obligations of the Issuer, as described in Condition 4 (Status of the Notes) in "Terms and Conditions of the
Notes".
The Notes will bear interest on their Current Principal Amount (as defined in Condition 2 (Interpretation) in "Terms and Conditions of the
Notes"), payable (subject to cancellation as described below) semi-annually in arrear on 29 November and 29 May in each year (each an "Interest
Payment Date"), from (and including) 6 September 2013 (the "Issue Date") to (but excluding) 29 November 2018 (the "First Call Date") at the rate
of 8.250 per cent. per annum. The first payment of interest will be made on 29 November 2013 in respect of the period from (and including) the Issue
Date to (but excluding) 29 November 2013. The rate of interest will reset on the First Call Date and on each Reset Date (as defined in Condition 2
(Interpretation) in "Terms and Conditions of the Notes") thereafter. The Issuer may elect, or may be required, to cancel the payment of interest on
the Notes (in whole or in part) on any Interest Payment Date. See Condition 5 (Interest and interest cancellation) in "Terms and Conditions of the
Notes".
The Current Principal Amount of the Notes may be written down if: (i) prior to the CRD Implementation Date, the EBA CT1 ratio is less than
5.125 per cent. and (ii) from (and including) the CRD Implementation Date, the Issuer's Common Equity Tier 1 capital ratio falls below 5.125 per
cent. (all as defined in Condition 2 (Interpretation) in "Terms and Conditions of the Notes"). Following such reduction, the Current Principal
Amount may, at the Issuer's full discretion, be written back up if certain conditions are met. See Condition 6 (Loss Absorption and Return to
Financial Health) in "Terms and Conditions of the Notes".
The Notes have no fixed maturity and Holders do not have the right to call for their redemption. The Issuer may, at its option, redeem all,
but not some only, of the Notes on the First Call Date or any Reset Date thereafter at their Redemption Amount (all as defined in Condition 2
(Interpretation) in "Terms and Conditions of the Notes"). The Issuer may also, at its option, redeem all, but not some only, of the Notes at any time
at their Redemption Amount upon the occurrence of a Tax Event or a Capital Event (each as defined in Condition 2 (Interpretation) in "Terms and
Conditions of the Notes"). Redemption can be made by the Issuer even if the principal amount of the Notes has been Written Down and not yet
reinstated in full, as described in Condition 6 (Loss Absorption and Return to Financial Health).
Application has been made to the Luxembourg Stock Exchange for the Notes 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 with effect from the Issue Date.
Based on their respective methodologies, the Notes were rated BB by Fitch Ratings Ltd ("FitchRatings") and Ba3 by Moody's Investor
Services Ltd ("Moody's") and were rated BB+ by Standard & Poor's Credit Market Services S.A.S ("S&P") on 22 August 2013. Each of
FitchRatings, Moody's and S&P is established in the European Union ("EU") and is registered under Regulation (EC) No. 1060/2009 (as amended)
(the "CRA Regulation") and is included in the list of credit rating agencies registered in accordance with the CRA Regulation as of the date of this
Prospectus. This list is available on the ESMA website at www.esma.europa.eu/page/List-registered-and-certified-CRAs (list last updated on 30 July
2012). A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the
assigning rating agency.
An investment in the Notes involves certain risks. Prospective purchasers of the Notes should ensure that they understand the nature of
the Notes and the extent of their exposure to risks and that they consider the suitability of the Notes as an investment in t he light of their own
circumstances and financial condition. For a discussion of these risks see "Risk Factors" below.
Global Coordinator and Structuring Advisor
Société Générale Corporate & Investment Banking
Joint-Lead Managers
Citigroup
Credit Suisse
Deutsche Bank
HSBC
Société Générale Bank & Trust
Société Générale Corporate & Investment Banking

Co - Managers
Banca IMI
Banco Bilbao Vizcaya Argentaria, S.A.
Danske Bank
Rabobank International
Raiffeisen Bank International AG
Swedbank AB
The date of this Prospectus is 4 September 2013

This Prospectus should be read and construed together with any documents incorporated by reference
herein (see "Documents Incorporated by Reference").
This Prospectus has been approved by the Luxembourg Commission de Surveillance du Secteur
Financier (the "CSSF"), which is the Luxembourg competent authority for the purpose of the Prospectus
Directive (as defined below) and relevant implementing legislation in Luxembourg, as a prospectus issued in
compliance with the Prospectus Directive and relevant implementing legislation in Luxembourg for the
purpose of giving information with regard to the issue of the Notes. This Prospectus constitutes a prospectus
for the purposes of Article 5.3 of the Prospectus Directive. The CSSF assumes no responsibility for the
economic and financial soundness of the transactions contemplated by this Prospectus or the quality or
solvency of the Issuer in accordance with Article 7(7) of the Luxembourg Act dated 10 July 2005 as
amended on 3 July 2012 (the "Luxembourg Act") on prospectuses for securities. Application has been made
to the Luxembourg Stock Exchange for the Notes 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 with
effect from the Issue Date. The Luxembourg Stock Exchange's regulated market is a regulated market for the
purposes of the Markets in Financial Instruments Directive 2004/39/EC.
No person has been authorised by the Issuer or any Manager (as defined in "Subscription and Sale"
below) to give any information or to make any representation not contained in or not consistent with this
Prospectus or any other information supplied by the Issuer or such other information as is in the public
domain and, if given or made, such information or representation should not be relied upon as having been
authorised by the Issuer or any of the Managers.
No representation or warranty is made or implied by the Managers (other than Société Générale) or
any of their respective affiliates, and neither the Managers (other than Société Générale) nor any of their
respective affiliates makes any representation or warranty or accepts any responsibility, as to the accuracy or
completeness of the information contained in this Prospectus. Neither the delivery of this Prospectus nor the
offering, sale or delivery of the Notes shall, in any circumstances, create any implication that the information
contained in this Prospectus is true subsequent to the date hereof or that any other information supplied in
connection with the Notes is correct at any time subsequent to the date on which it is supplied or, if different,
the date indicated in the document containing the same.
Neither this Prospectus nor any other information supplied in connection with the Notes (a) is intended
to provide the basis of any credit evaluation or (b) should be considered as a recommendation or a statement
of opinion (or a report on either of those things) by the Issuer, the Managers or any of them that any recipient
of this Prospectus or any other information supplied in connection with the Notes should purchase any Notes.
Each investor contemplating purchasing any Notes should make its own independent investigation of the
financial condition and affairs, and its own appraisal of the creditworthiness of the Issuer.
Neither this Prospectus nor any other information supplied in connection with the Notes constitutes an
offer or invitation by or on behalf of the Issuer, the Managers or any of them to any person to subscribe for
or to purchase any Notes.
This Prospectus may not be used for the purpose of an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to
make such an offer or solicitation.
The distribution of this Prospectus and the offering, sale and delivery of the Notes in certain
jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes are required by
the Issuer and the Managers to inform themselves about and to observe any such restrictions (see
"Subscription and Sale").

2

The Notes have not been and will not be registered under the U.S. Securities Act of 1933 (the
"Securities Act") and are subject to U.S. tax law requirements. Subject to certain exceptions, the Notes
may not be offered, sold or delivered within the United States or to U.S. persons (as defined in the U.S.
Internal Revenue Code of 1986, as amended, and regulations thereunder). The Notes may be offered
and sold outside the United States to non U.S. persons in reliance on Regulation S ("Regulation S")
under the Securities Act. For a description of certain restrictions on offers, sales and deliveries of the
Notes and on the distribution of this Prospectus and other offering material relating to the Notes, see
"Subscription and Sale".
The Notes are not deposit liabilities of the Issuer and are not insured by the Canada Deposit Insurance
Corporation, the U.S. Federal Deposit Insurance Corporation or any other governmental agency of Canada,
France, the United States or any other jurisdiction.
Société Générale (Canada Branch) is listed in Schedule III to the Bank Act (Canada) and is subject to
regulation by the Office of the Superintendent of Financial Institutions (Canada). The Notes will be issued
from the Paris branch of the Issuer and not from its Canadian branch.
This Prospectus has been prepared on the basis that any offer of the Notes in any Member State of the
European Economic Area (each, a "Relevant Member State") will 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 the Notes. Accordingly, any person making or intending to make an offer in that
Relevant Member State of the Notes may only do so in circumstances in which no obligation arises for the
Issuer or any Manager 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 Manager has authorised, nor do they authorise, the making of any offer of
the Notes in circumstances in which an obligation arises for the Issuer or any Manager to publish or
supplement a prospectus for such offer. As used herein, the expression "Prospectus Directive" means
Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive) and includes
any relevant implementing measure in the Relevant Member State and the expression "2010 PD Amending
Directive" means Directive 2010/73/EU.
Each prospective investor in the Notes must determine, based on its own independent review and such
professional advice as it deems appropriate under the circumstances, that its acquisition of the Notes is fully
consistent with its financial needs, objectives and condition, complies and is fully consistent with all
investment policies, guidelines and restrictions applicable to it and is a fit, proper and suitable investment for
it, notwithstanding the clear and substantial risks inherent in investing in or holding the Notes.
A prospective investor may not rely on the Issuer, the Managers or any of their respective affiliates in
connection with its determination as to the legality of its acquisition of the Notes or as to the other matters
referred to above.
Each potential investor in the Notes must determine the suitability of that investment in light of its
own financial circumstances and investment objectives, and only after careful consideration with their
financial, legal, tax and other advisers. In particular, each potential investor should:
have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits and
risks of investing in the Notes and the information contained or incorporated by reference in this
Prospectus or any applicable supplement;
have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular
financial situation, an investment in the Notes and the impact the Notes will have on its overall
investment portfolio;

3

have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes,
including where the currency for principal or interest payments is different from the potential investor's
currency;
understand thoroughly the terms of the Notes and be familiar with the behaviour of financial markets;
and
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 applicable risks.
The Notes 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 and appropriate addition
of risk to their overall portfolios. A potential investor should not invest in Notes which are complex financial
instruments unless it has the expertise (either alone or with a financial adviser) to evaluate how the Notes
will perform under changing conditions, the resulting effects on the value of the Notes and the impact this
investment will have on the potential investor's overall investment portfolio.
Each prospective investor should consult its own advisers as to legal, tax and related aspects in
connection with any investment in the Notes. An investor's effective yield on the Notes may be diminished
by certain charges such as taxes, duties, custodian fees on that investor on its investment in the Notes or the
way in which such investment is held.
All references in this Prospectus to "EUR", "" or "euro" are 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 of those members of the European Union which are participating in the European economic
and monetary union and all references to "U.S.$", "USD" and "U.S. Dollars" are to the currency of the
United States of America.

RESPONSIBILITY STATEMENT
The Issuer accepts responsibility for the information contained in this Prospectus. To the best of the
knowledge of the Issuer (which has taken all reasonable care to ensure that such is the case), the information
contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the
import of such information. References herein to this "Prospectus" are to this document, as supplemented
from time to time including the documents incorporated by reference.

STABILISATION
IN CONNECTION WITH THE ISSUE OF THE NOTES, SOCIÉTÉ GÉNÉRALE (IN ITS
CAPACITY AS JOINT LEAD MANAGER) AS STABILISING MANAGER (THE "STABILISING
MANAGER") (OR PERSONS ACTING ON BEHALF OF THE STABILISING MANAGER) MAY
OVER ALLOT NOTES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE
PRICE OF THE NOTES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE
PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THE STABILISING MANAGER (OR
PERSONS ACTING ON BEHALF OF 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 NOTES IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END
NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE AND 60 DAYS AFTER
THE DATE OF THE ALLOTMENT OF THE NOTES. SUCH STABILISING OR OVER-
ALLOTMENT SHALL BE CONDUCTED IN ACCORDANCE WITH ALL APPLICABLE LAWS,
REGULATIONS AND RULES.

4

TABLE OF CONTENTS

Page
Risk Factors ........................................................................................................................................................ 6
Documents Incorporated by Reference ............................................................................................................ 17
Terms and Conditions of the Notes .................................................................................................................. 23
Use of Proceeds ................................................................................................................................................ 47
Description of the Issuer ................................................................................................................................... 48
Subscription and Sale ....................................................................................................................................... 49
Taxation ............................................................................................................................................................ 50
General Information ......................................................................................................................................... 54

5

RISK FACTORS
Prospective purchasers of Notes should carefully consider the following information in conjunction
with the other information contained in this Prospectus (including the documents incorporated by
reference see page 25 under the heading "Cross reference list for documents incorporated by reference
- B. Registration Documents and related updates") and any Supplement thereto before purchasing
Notes.
The Issuer believes that the following factors may affect its ability to fulfil its obligations under the
Notes. 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 Notes are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing
in the Notes, but the Issuer may be unable to pay interest, principal or other amounts on or in connection
with the Notes 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 certain risks typically associated with the Issuer and the
acquisition and ownership of the Notes. 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 Notes, 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.
Words and expressions defined in the "Terms and Conditions of the Notes" below or elsewhere in this
Prospectus have the same meanings in this section, unless otherwise stated. References to a numbered
"Condition" shall be to the relevant Condition in the Terms and Conditions of the Notes.
RISKS RELATING TO THE ISSUER
The Group is exposed to the risks inherent in its core businesses.
For information on the risks relating to the Issuer and/or the Group, investors should refer to the "Risk
Management" section on pages 205-265 of the 2013 Registration Document of Société Générale which is
incorporated by reference into this Prospectus.
Creditworthiness of the Issuer
The Notes constitute deeply subordinated contractual obligations of the Issuer and of no other person.
The Notes will rank junior in priority of payment to unsubordinated creditors (including depositors) of the
Issuer and other subordinated creditors of the Issuer, as more fully described in the Terms and Conditions of
the Notes. The Issuer issues a large number of financial instruments on a global basis and, at any given time,
the financial instruments outstanding may be substantial. Any investor purchasing the Notes is relying upon
the creditworthiness of the Issuer.

6

RISKS RELATING TO THE NOTES
Subordinated obligations
The Issuer's obligations under the Notes are unsecured and subordinated and will rank junior in
priority of payment to unsubordinated creditors (including depositors) of the Issuer and to ordinarily
subordinated indebtedness of the Issuer, any prêts participatifs granted to the Issuer and any titres
participatifs issued by it (participating loans and participating securities, respectively, each as defined under
French law), as more fully described in the Terms and Conditions of the Notes.
If any judgment is rendered by any competent court declaring the judicial liquidation (liquidation
judiciaire) of the Issuer or if the Issuer is liquidated for any other reason, the rights of payment of the
Holders of the Notes shall rank in priority only to any payments to holders of Issuer Shares. In the event of
incomplete payment of unsubordinated creditors in the event of a liquidation, the obligations of the Issuer in
connection with the Notes will be terminated. Holders shall be responsible for taking all steps necessary for
the orderly accomplishment of any collective proceedings or voluntary liquidation in relation to any claims
they may have against the Issuer.
Although the Notes may pay a higher rate of interest than notes which are not subordinated, there is a
substantial risk that investors in subordinated notes such as the Notes will lose all or some of their
investment should the Issuer become insolvent.
As of 30 June 2013, the Issuer had indebtedness of 1,204 billion, including but not limited to debt due
to banks, customer deposits (including savings accounts), debt securities, other liabilities and subordinated
indebtedness, all of which are senior to the Notes.
The Issuer is not prohibited from issuing further debt which may rank pari passu with or senior to the
Notes
There is no restriction on the amount of debt that the Issuer may issue that ranks senior to the Notes or
on the amount of securities that it may issue that rank pari passu with the Notes. The issue of any such debt
or securities may reduce the amount recoverable by investors upon the Issuer's bankruptcy. If the Issuer's
financial condition were to deteriorate, the Holders could suffer direct and materially adverse consequences,
including suspension of interest and reduction of interest and principal and, if the Issuer were liquidated
(whether voluntarily or involuntarily), the Holders could suffer loss of their entire investment.
As of 30 June 2013, the Issuer had 4.9 billion of indebtedness outstanding that ranks pari passu to the
Notes in the event of liquidation.
There are no events of default under the Notes
The Terms and Conditions of the Notes do not provide for events of default allowing acceleration of
the Notes if certain events occur. Accordingly, if the Issuer fails to meet any obligations under the Notes,
including the payment of any interest, investors will not have the right of acceleration of principal. Upon a
payment default, the sole remedy available to Holders for recovery of amounts owing in respect of any
payment of principal or interest on the Notes will be the institution of proceedings to enforce such payment.
Notwithstanding the foregoing, the Issuer will not, by virtue of the institution of any such proceedings, be
obliged to pay any sum or sums sooner than the same would otherwise have been payable by it.
In certain circumstances, the Issuer may decide not to pay interest on the Notes or be required by the
terms of the Notes not to pay such interest
The Issuer may elect, and in certain circumstances shall be required, not to pay all or some of the
Interest Amounts falling due on the Notes on any Interest Payment Date. Prior to the CRD Implementation
Date, an Interest Amount (in whole or, as the case may be, in part) may be required to be cancelled at the

7

direction of the Relevant Regulator, or where the aggregate of the risk-based consolidated capital ratios of
the Issuer and its consolidated subsidiaries and affiliates has fallen below the minimum required percentage
required in accordance with the then Relevant Rules (or would do so if the relevant Interest Amount was
paid). From (and including) the CRD Implementation Date, the Issuer will be required to cancel all or some
of the Interest Amounts falling due on the Notes: (a) to the extent that it would exceed the Distributable
Items of the Issuer; or (b) to the extent that such payment would cause the Maximum Distributable Amount
then applicable to the Issuer to be exceeded. See Condition 5.9 of the Notes (Interest and interest
cancellation Cancellation of Interest Amount).
Any interest not so paid on any such Interest Payment Date shall be cancelled and shall no longer be
due and payable by the Issuer. A cancellation of interest pursuant to Condition 5 does not constitute a
default under the Notes for any purpose.
Any actual or anticipated cancellation of interest on the Notes will likely have an adverse effect on the
market price of the Notes. In addition, as a result of the interest cancellation provisions of the Notes, the
market price of the Notes may be more volatile than the market prices of other debt securities on which
interest accrues that are not subject to such cancellation and may be more sensitive generally to adverse
changes in the Issuer's financial condition. Following the CRD Implementation Date, any indication that the
Issuer's Common Equity Tier 1 capital ratio is trending towards the minimum combined buffer may have an
adverse effect on the market price of the Notes.
The Issuer may reduce the principal amount of the Notes to absorb losses
The Notes are being issued for capital adequacy regulatory purposes with the intention and purpose of
being eligible as Tier 1 Capital of the Issuer. Such eligibility depends upon a number of conditions being
satisfied, which are reflected in the Terms and Conditions of the Notes. One of these relates to the ability of
the Notes and the proceeds of their issue to be available to absorb any losses of the Issuer. Accordingly, if
(prior to the CRD Implementation Date) the EBA CT1 ratio is less than 5.125 per cent. or (from and
including the CRD Implementation Date) the Issuer's Common Equity Tier 1 capital ratio falls below 5.125
per cent., the Current Principal Amount of the Notes may be reduced. See Condition 6 of the Notes (Loss
Absorption and Return to Financial Health).
Holders may lose all or some of their investment as a result of a Write Down. If any judgment is
rendered by any competent court declaring the judicial liquidation (liquidation judiciaire) of the Issuer or if
the Issuer is liquidated for any other reason prior to the Notes being written up in full pursuant to Condition
6, Holders' claims for principal will be based on the reduced Current Principal Amount of the Notes.
Further, during the period of any Write Down pursuant to Condition 6, interest will accrue on the Current
Principal Amount of the Notes, which shall be lower than the Original Principal Amount.
The extent to which the Issuer makes a profit from its operations (if any) will affect whether the
principal amount of the Notes may be reinstated to their Original Principal Amount. The Issuer will not in
any circumstances be obliged to write up the principal amount of the Notes, but any write up must be
undertaken on a pro rata basis with any other Tier 1 instruments providing for a reinstatement of principal
amount in similar circumstances (see definition of Discretionary Temporary Write-Down Instrument in
Condition 2 of the Notes (Interpretation)). See Condition 6.3 of the Notes (Return to Financial Health).
The market price of the Notes is expected to be affected by fluctuations in the EBA CT1 ratio (prior to
the CRD Implementation Date) and the Issuer's Common Equity Tier 1 capital ratio (from and including the
CRD Implementation Date). Any indication that the EBA CT1 ratio or the Issuer's Common Equity Tier 1
capital ratio (as relevant) is trending towards 5.125 per cent. may have an adverse effect on the market price
of the Notes. The level of the EBA CT1 ratio or the Issuer's Common Equity Tier 1 capital ratio (as
relevant) may significantly affect the trading price of the Notes.

8

Loss absorption at the point of non-viability of the Issuer and resolution
On 6 June 2012, the European Commission published a legislative proposal for a directive providing
for the establishment of an EU-wide framework for the recovery and resolution of credit institutions and
investment firms (the "RRD"). The stated aim of the draft RRD is to provide relevant authorities with
common tools and powers to address banking crises pre-emptively in order to safeguard financial stability
and minimise taxpayers' exposure to losses.
The powers provided to "resolution authorities" in the draft RRD include write down/conversion
powers to ensure capital instruments (including Additional Tier 1 capital instruments such as the Notes) fully
absorb losses at the point of non-viability of the issuing institution. Accordingly, the draft RRD contemplates
that resolution authorities will be required to write down such capital instruments in full on a permanent
basis, or convert them in full into common equity tier 1 instruments ("RRD Non-Viability Loss
Absorption"), before any resolution action is taken (see below). The draft RRD currently provides, inter
alia, that resolution authorities shall exercise the write down power in a way that results in (i) Common
Equity Tier 1 instruments being written down first in proportion to the relevant losses and (ii) thereafter, the
principal amount of other capital instruments (including Additional Tier 1 capital instruments such as the
Notes) being reduced to zero on a permanent basis. Common Equity Tier one instruments may be issued to
holders of other capital instruments that are written down.
The point of non-viability under the draft RRD is the point at which the national resolution authority
determines if the institution meets the condition for resolution, defined as:
(a) the institution is failing or likely to fail, which means:
(i)
the institution has incurred/is likely to incur in a near future losses depleting all or
substantially all its own funds; and/or
(ii)
the assets are/will be in a near future less than its liabilities; and/or
(iii)
the institution is/will be in a near future unable to pay its obligations; and/or
(iv)
the institutions requires public financial support;
(b) there is no reasonable prospect that a private action would prevent the failure; and
(c) a resolution action is necessary in the public interest.
The draft RRD contemplates that it will be implemented in Member States by 31 December 2014,
with the RRD Non-Viability Loss Absorption provisions (inter alia) becoming effective as of 1 January
2015.
An additional bail-in tool, which comprises a more general power for resolution authorities to write
down the claims of unsecured creditors of a failing institution and to convert unsecured debt claims into
equity, is expected to be implemented under the RRD as of 1 January 2018.
The draft RRD currently provides that a write down/conversion resulting from the use of the bail-in
tool would, in summary, follow the ordinary allocation of losses and ranking in an insolvency of the relevant
institution.
The draft RRD currently represents the only official proposal at the EU level for the implementation
in the European Economic Area of the non-viability requirements set out in the press release dated 13
January 2011 issued by the Basel Committee on Banking Supervision (the "Basel Committee") entitled
"Minimum requirements to ensure loss absorbency at the point of non-viability" (the "Basel III Non-
Viability Requirements"). The Basel III Non-Viability Requirements form part of the broader Basel III

9

package of new capital and liquidity requirements intended to reinforce capital standards and to establish
minimum liquidity standards for credit institutions.
The Basel Committee contemplated implementation of the Basel III reforms as of 1 January 2013.
However, implementation of these reforms in the European Economic Area has been delayed but will be by
way of the Directive of the European Parliament and of the Council on prudential requirements for credit
institutions and investment firms ("CRD IV") or the Regulation of the European Parliament and of the
Council on prudential requirements for credit institutions and investment firms ("CRR"). These texts were
published in the Official Journal of the European Union on 27 June 2013. They must be applied from 1
January 2014. CRR contemplates that the Basel III Non-Viability Requirements will be implemented in the
European Economic Area by way of the RRD and the RRD Non-Viability Loss Absorption. If such
statutory loss absorption at the point of non-viability is not implemented by 31 December 2015 then the most
recent text of CRR indicates that the European Commission shall review and report on whether provision for
such a provision should be included in CRR and, in light of that review, come forward with appropriate
legislative proposals.
It is currently unclear whether RRD Non-Viability Loss Absorption, when implemented, will apply
to capital instruments (such as the Notes) that are already in issue at that time or whether certain
grandfathering rules will apply. If and to the extent that such provisions, when implemented, apply to the
Notes, and/or if the Basel III Non-Viability Requirements become applicable to the Notes at any time, the
Notes may be subject to write down or conversion to common equity tier 1 instruments upon the occurrence
of the relevant trigger event, which may result in Holders losing some or all of their investment in the Notes.
The exercise of any such power or any suggestion or anticipation of such exercise could, therefore,
materially adversely affect the value of the Notes.
In addition to RRD Non-Viability Loss Absorption, the draft RRD provides 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.
The draft RRD is not in final form and changes may be made to it in the course of the legislative
process. In addition, as noted above, it is unclear whether the Basel III Non-Viability Requirements could be
applied in respect of the Notes ahead of implementation of the RRD. Accordingly, it is not yet possible to
assess the full impact of the relevant loss absorption provisions. There can be no assurance that, once
implemented, the fact of applicable loss absorption provisions or the taking of any actions currently
contemplated or as finally reflected in such provisions would not adversely affect the price or value of a
Holder's investment in the Notes and/or the ability of the Issuer to satisfy its obligations under the Notes.
The banking law dated 26 July 2013 on separation and regulation of banking activities (loi de
séparation et de régulation des activités bancaires) has entered into force in France. Among other things,
this law sets up a resolution regime applicable to French banks. This new banking law gives resolution
powers to a new Resolution Board of the French Prudential Supervisory Authority which becomes the
Autorité de contrôle prudentiel et de résolution (ACPR). It provides that the French resolution authority
may, at its discretion and when the point of non-viability is reached, cancel or reduce share capital, and
subsequently if necessary write down, cancel or convert deeply subordinated notes (such as the Notes) to
absorb losses as estimated in a preliminary valuation. No grandfathering applies to notes issued before this
law. In addition, the French resolution authority may require cancellation of payments under such notes
(including the Notes).
No scheduled redemption
The Notes are undated securities in respect of which there is no fixed redemption or maturity date.
The Issuer is under no obligation to redeem the Notes at any time (except as provided in Condition 7 of the

10