Obligation Nederlandse Waterbank N.V. 0.4% ( XS1622990429 ) en EUR

Nederlandse Waterbank N.V.

100 % ▲

Pays-bas

XS1622990429 ( en EUR )

0.4% par an ( paiement annuel )

09/06/2027

Prospectus brochure de l'obligation NEDERLANDSE WATERSCHAPSBANK N.V XS1622990429 en EUR 0.4%, échéance 09/06/2027

100 000 EUR

10 000 000 EUR

09/06/2026 ( Dans 122 jours )

La Nederlandse Waterschapsbank N.V. est une banque publique néerlandaise spécialisée dans le financement des projets d'aménagement et de gestion de l'eau pour les waterchappen (organismes de gestion de l'eau) aux Pays-Bas.

L'Obligation émise par Nederlandse Waterbank N.V. ( Pays-bas ) , en EUR, avec le code ISIN XS1622990429, paye un coupon de 0.4% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 09/06/2027

28 April 2017

NEDERLANDSE WATERSCHAPSBANK N.V.
(Incorporated in the Netherlands with its statutory seat in The Hague)
60,000,000,000 Debt Issuance Program
Under this 60,000,000,000 Debt Issuance Program (the `Program') Nederlandse Waterschapsbank N.V. (the
`Issuer' or `NWB Bank') may from time to time issue notes (the `Notes') denominated in any currency agreed
between the Issuer and the relevant Dealer (as defined below). As set out herein, the Notes will not be subject to any
maximum maturity but will have a minimum maturity of one month. The maximum aggregate nominal amount of
all Notes from time to time outstanding will not exceed 60,000,000,000 (or its equivalent in any other currency
calculated as described herein).
The Notes will be issued on a continuing basis to one or more of the Dealers specified below and any additional
Dealer appointed for the duration of the Program or, with regard to an issue of a particular tranche of Notes, for the
purposes of that tranche (each a `Dealer' and together the `Dealers'). The Dealer or Dealers with whom the Issuer
agrees or proposes to agree on the issue of any Notes is or are referred to as the `relevant Dealer' in respect of those
Notes. The Notes will be issued in series (each a `Series') each of which will comprise one or more tranches (each a
`Tranche').
This document constitutes a base prospectus dated 28 April 2017 (the `Base Prospectus') within the meaning of
Directive 2003/71/EC as amended (including by Directive 2010/73/EC) (the `Prospectus Directive', which term
includes any relevant implementing measure in the Member State (as defined below) which has implemented the
Prospectus Directive (a `Relevant Member State')) and is issued in replacement of a prospectus dated 28 April
2016. This does not affect any notes issued prior to the date of this Base Prospectus.
This Base Prospectus has been approved by the Netherlands Authority for the Financial Markets (Stichting Autoriteit
Financiële Markten, the `AFM'), which is the Netherlands competent authority for the purpose of the Prospectus
Directive and relevant implementing measures in the Netherlands, as a Base Prospectus issued in compliance with
the Prospectus Directive and relevant implementing measures in the Netherlands for the purpose of giving
information with regard to the issue of Notes during the period of twelve months after the date hereof.
Application may be made for Notes to be admitted to trading on Euronext in Amsterdam (`Euronext Amsterdam'),
the regulated market of Euronext Amsterdam N.V., the Official List of the Luxembourg Stock Exchange (the
`Luxembourg Stock Exchange'), Euronext in Paris (`Euronext Paris'), the regulated market of Euronext Paris
S.A., Eurex Deutschland (`Eurex Deutschland'), the regulated market of Eurex Frankfurt AG and the regulated
market of London Stock Exchange plc (the `London Stock Exchange'). In addition, Notes may be listed or
admitted to trading, as the case may be, on any other stock exchange or market specified in the applicable Final
Terms. The Program also permits Notes to be issued on the basis that they will not be admitted to listing, trading
and/or quotation by any listing authority, stock exchange and/or quotation system.
The AFM has been requested by the Issuer to provide the Luxembourg Commission de Surveillance du Secteur
Financier (the `CSSF'), the French Autorité des marchés financiers (the `AMF'), the German Bundesanstalt für
Finanzdienstleistungsaufsicht (the `BaFin') and the United Kingdom Financial Conduct Authority (the `FCA') with
a certificate of approval attesting that the Base Prospectus has been drawn up in accordance with Regulation
809/2004/EC (the `Prospectus Regulation', which term includes any amendments thereto).

50106254 M 21287745 / 7

The AFM shall notify the European Securities and Markets Authority (`ESMA') of the approval of this Base
Prospectus and any supplement hereto at the same time as such approval is notified to the Issuer. In addition, the
AFM shall provide ESMA with a copy of this Base Prospectus and any supplement hereto.
The Program has been rated AAA (in respect of Notes with a maturity of more than one year) and A-1+ (in respect
of Notes with a maturity of one year or less) by Standard & Poor's Credit Market Services Europe Limited
(`Standard & Poor's') and has been rated P-1 (in respect of short-term Notes) and Aaa (in respect of senior
unsecured medium-term Notes) by Moody's Investors Service Limited (`Moody's'). Tranches or Series of Notes
may be rated or unrated. Where a Tranche or Series of Notes is rated, such rating will not necessarily be the same as
the ratings assigned to the Program. 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. As of the date of
this Base Prospectus, each of Standard & Poor's and Moody's is established in the European Union and is registered
under Regulation (EC) No 1060/2009 of 16 September 2009 on credit rating agencies, as amended and
supplemented (the `CRA Regulation').
The rating of a certain Series or Tranche of Notes, if applicable, will be specified in the applicable Final Terms.
Whether or not each credit rating applied for in relation to such Series or Tranche of Notes will be issued by a credit
rating agency established in the European Union and registered or certified under the CRA Regulation will be
disclosed clearly and prominently in the Final Terms.
The Issuer may agree with any Dealer that Notes may be issued in a form not contemplated by the Terms and
Conditions of the Notes as set out herein, in which case a supplement, a new base prospectus or a drawdown
prospectus, as appropriate, will be made available which will describe the effect of the agreement reached in relation
to such Notes and, if relevant, which will be subject to the prior approval of the AFM.
The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the
`Securities Act') or any U.S. state securities laws, and the Notes may not be offered, sold or delivered within the
United States, or to or for the account or benefit of U.S. persons (as defined in Regulation S under the Securities Act
(`Regulation S')), except pursuant to an exemption from, or a transaction not subject to, the registration
requirements of the Securities Act, applicable U.S. state securities laws or pursuant to an effective registration
statement. The Notes may be offered and sold (a) in bearer form or registered form outside the United States to non-
U.S. persons in reliance on Regulation S and (b) in registered form within the United States, to persons who are
`qualified institutional buyers' (`QIBs') within the meaning of and in reliance on Rule 144A under the Securities
Act (`Rule 144A'). Prospective purchasers who are QIBs are hereby notified that sellers of the Notes may be relying
on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. For a description of
these and certain further restrictions on offers, sales, and transfers of Notes and distribution of this Base Prospectus,
see `Plan of Distribution' and `Transfer Restrictions'. Notes in bearer form are subject to U.S. tax law requirements.
An investment in the Notes involves certain risks. Prospective investors should have regard to the risk factors
described under `Risk Factors' in this Base Prospectus.
This Base Prospectus must be read and construed together with any amendments or supplements hereto and with the
documents incorporated by reference herein (which can be found on the website of the Issuer,
http://www.nwbbank.com and may be obtained by contacting the Issuer by telephone (+31 70 416 62 66) or by e-
mail: [email protected]), and in relation to any Tranche, this Base Prospectus should be read and construed
together with the applicable Final Terms.

50106254 M 21287745 / 7

Joint-Arrangers
BofA Merrill Lynch
NatWest Markets
Dealers
ABN AMRO
Barclays
BMO Capital Markets
BNP PARIBAS
BofA Merrill Lynch
Citigroup
Commerzbank Aktiengesellschaft
Crédit Agricole CIB
Daiwa Capital Markets Europe
Deutsche Bank
DZ BANK AG
Goldman Sachs International
HSBC
ING
J.P. Morgan
Landesbank Baden-Württemberg
Mizuho Securities
Morgan Stanley
Natixis
NatWest Markets
Nomura
NORD/LB
Rabobank
RBC Capital Markets
Scotiabank
Shinkin International Ltd
SMBC Nikko
TD Securities
Zürcher Kantonalbank

50106254 M 21287745 / 7

TABLE OF CONTENTS

Page
Risk Factors ................................................................................................................................................................... 2
Overview of the Program and Key Characteristics of the Notes ................................................................................. 22
Important Notices ........................................................................................................................................................ 33
Service of Process and Enforcement of Civil Liabilities ............................................................................................. 39
Presentation of Financial and Other Information ......................................................................................................... 40
Cautionary Statement Regarding Forward-Looking Statements ................................................................................. 41
Documents Incorporated by Reference ........................................................................................................................ 43
Form of the Notes ........................................................................................................................................................ 44
Book-Entry Clearance Systems ................................................................................................................................... 48
Form of Final Terms .................................................................................................................................................... 52
Terms and Conditions of the Notes ............................................................................................................................. 77
Use of Proceeds ......................................................................................................................................................... 118
Nederlandse Waterschapsbank N.V. ......................................................................................................................... 119
Capitalization ............................................................................................................................................................. 140
Selected Financial Data ............................................................................................................................................. 141
Operating and Financial Review ............................................................................................................................... 142
Taxation ..................................................................................................................................................................... 174
Benefit Plan Investor Considerations ........................................................................................................................ 186
Plan of Distribution ................................................................................................................................................... 187
Transfer Restrictions .................................................................................................................................................. 193
General Information .................................................................................................................................................. 197

i

50106254 M 21287745 / 7

RISK FACTORS
NWB Bank believes that certain factors may affect its ability to fulfill its obligations under the Notes. Such factors
and factors which could be material for the purpose of assessing the market risks associated with the Notes
(although not exhaustive), such as risks related to the market for the Notes, risks related to Notes generally and risks
related to the structure of a particular issue of Notes are described below.
NWB Bank believes that the factors described below represent the principal risks inherent in investing in the Notes,
but the inability of NWB Bank to pay interest, principal or other amounts on or in connection with any Notes may
occur for other reasons and NWB Bank does not represent that the statements below regarding the risks of holding
any Notes are exhaustive. The risks described below are not the only risks NWB Bank faces. Additional risks and
uncertainties not presently known to NWB Bank or that it currently believes to be immaterial could also have a
material impact on its business operations and the price of the Notes. Prospective investors should also read the
detailed information set out elsewhere in this Base Prospectus and reach their own views prior to making any
investment decision.
Words and expressions defined in the Terms and Conditions of the Notes or elsewhere in this Base Prospectus have
the same meanings in this section, unless otherwise stated. Prospective investors should consider, among other
things, the following.
FACTORS THAT MAY AFFECT NWB BANK'S ABILITY TO FULFILL ITS OBLIGATIONS UNDER
THE NOTES
NWB Bank's business and results of operations may be negatively affected by actual or perceived local and
global economic and financial market conditions
NWB Bank's business and results of operations are affected by local and global economic conditions, perceptions of
those conditions and future economic prospects. Global trade has increased at a steady, albeit modest pace in recent
years. However, the outlook for the global economy in the near- to medium-term remains uncertain due to several
factors, including geopolitical risks and concerns around global growth and price and currency stability. Risks to
growth and stability stem from, amongst other things, continued imbalances in Europe and elsewhere, low growth
levels in foreign markets and from uncertainty about how economies will respond to the monetary policy measures
including the European Central Bank's (`ECB') implementation of the quantitative easing (`QE') program, which
was announced in January 2015 and has since expanded to exceed 2.4 trillion and the U.S. Federal Reserve's
interest hikes. In addition, there is a risk that Europe may suffer from deflation, causing consumers and businesses to
cut back on spending. The outlook for the economy in the Netherlands remains modest. Gross domestic product
(`GDP') in the Netherlands increased by 2.1% in 2016 and GDP growth is expected to remain at 2.1% in 2017.1 The
average number of people unemployed in the Netherlands decreased to 6.0% of the working population in 2016
from 6.9% in 2015 (2014: 7.4%),2 and projections suggest it is set to decrease to 5.3% in 2017. Inflation in the
Netherlands was approximately 0.1% in 20161, and projections suggest it is set to increase to approximately 0.9% in
2017.1 However, these forecasts may prove inaccurate and conditions may worsen, including if any of the risks
described herein or other risks materialize.
NWB Bank's business is impacted generally by the business and economic environment in which it operates, which
itself is impacted by factors such as changes in interest rates, securities prices, credit and liquidity spreads, exchange
rates, consumer spending, business investment, real estate valuations, government spending, inflation, the volatility
and strength of the capital markets and other destabilizing forces such as geopolitical tensions or acts of terrorism.
Although the Dutch economy improved in 2015 and 2016, volatility resulting from the factors noted above and
market disruption over the past several years could create a less favorable environment for NWB Bank's public
sector clientele. The weak economic conditions in Europe and, in particular, the Netherlands that followed the global
economic and financial crisis, resulted in higher unemployment rates, weak property markets and pressure on

1 Source: CPB Netherlands Bureau for Economic Policy Analysis (Centraal Planbureau).
2 Source: Statistics Netherlands (Centraal Bureau voor de Statistiek).
2

50106254 M 21287745 / 7

disposable incomes, which has slowed investment and consumer spending. This in turn has had an adverse effect on
the financing requirements of NWB Bank's public sector clients.
These factors, together with volatility in the capital and credit markets during recent years, have had a material
impact on NWB Bank's core activities of funding and lending and NWB Bank believes that economic and market
conditions in the Netherlands and Western Europe in general will continue to affect NWB Bank's results of
operations. In particular, NWB Bank's ability to generate revenues and expand its loan portfolio in the future largely
depends on continued economic and market recovery within the Netherlands, which in turn relies on recovery in
Western Europe. NWB Bank expects lending to housing associations to decrease in the coming years due to
multiple challenges facing the social housing sector, including changes in regulations and governmental housing
policies. The amended Housing Act, which took effect in July 2015, defines the legal framework within which the
housing associations must operate. The Housing Act also places certain limitations on the manner in which housing
associations can finance their activities. In response, housing associations have been postponing and may continue to
postpone new near-term investments or may further sell parts of their housing portfolios. The healthcare sector and
especially the smaller care providers continue to experience low financing requirements. In addition, local and
regional authorities' demand for long-term loans in recent years has fallen principally due to weak demand
generally, as well as local and regional authorities' obligation to use excess funds to help finance local municipality
activities. See also ` NWB Bank is exposed to certain concentration risks in its loan portfolio'.
NWB Bank's business and results of operations are also affected by financial market conditions. Financial markets
experienced high volatility in the last quarter of 2014, and periodic periods of volatility through 2015 and into 2016.
In addition, credit markets experienced elevated levels of volatility during 2016, partly due to low commodities
prices. Further, the European markets may be negatively impacted by uncertainties surrounding the exit of the
United Kingdom and, potentially, other European Union member states. See ` A weakening of economic recovery
in Europe, the uncertainties surrounding the United Kingdom's exit from the European Union, and any renewed
threat of default by certain Eurozone countries, may adversely affect NWB Bank's business and results of
operations'.
During the next few years, it is unclear whether a combination of anticipated recovery in private sector demand and
in Europe and the United States will result in a return by certain central banks toward more conventional monetary
policies, following the recent period that has been characterized by highly accommodative policies, which were
implemented to support demand at a time of pronounced fiscal tightening and balance sheet repair. The U.S. Federal
Reserve ended its QE program in October 2014 and in December 2015 it decided to raise its target range for the
federal funds rate for the first time since June 2006. In December 2016, the U.S. Federal Reserve raised its target
range for the federal funds rate by 25 basis points, to a range of 0.50% to 0.75%. In addition, in March 2017, the
U.S. Federal Reserve announced an interest rate hike of 25 basis points. On the contrary, the ECB announced in
September 2014 its decision to further ease its monetary policy and, in March 2015, it commenced a 1 trillion QE
program (which has since expanded to 2.4 trillion), in which it expects to purchase government bonds worth up to
80 billion per month until March 2017, and 60 billion per month until December 2017. In addition, in March 2016
the ECB decided on a number of new monetary policy easing measures, reducing interest rates to record lows in
order to secure a return of inflation rates towards the ECB's definition of price stability. Quantitative easing is
exerting downward pressure on interest rates and yield curves, which may impact interest rate margins. A prolonged
period of flatter than usual interest rate yield curves and negative interest rates could have a material adverse effect
on NWB Bank.
The contrast that has arisen between the United States and the Eurozone manifests itself in, among other things, a
significant difference in interest rate expectations between U.S. and EU capital markets. Further market volatility
may occur as interest rates are increased in certain economies and markets await the outcome of the ECB's QE
program. The possibility of one or more central banks or governments, in particular the U.S. Federal Reserve and
the ECB, starting and/or accelerating the process of tightening or unwinding historically unprecedented loose
monetary policy or extraordinary measures in coming years, could lead to generally weaker than expected growth,
or even contracting GDP, reduced business confidence, higher levels of unemployment, adverse changes to levels of
inflation, potentially higher interest rates and falling property prices, and consequently to an increase in delinquency
rates and default rates among customers. The resulting uncertainty in financial markets combined with challenging
3

50106254 M 21287745 / 7

economic conditions in the Netherlands creates a somewhat difficult operating environment for financial
institutions, including NWB Bank, as they place strain on funding needs and may cause significant volatility to
funding costs.
Any slowing of monetary stimulus and the actions and commercial soundness of other financial institutions have the
potential to impact market liquidity. The adverse impact on the credit quality of NWB Bank's customers and
counterparties, coupled with a decline in collateral values, could lead to a reduction in recoverability and value of
NWB Bank's assets and higher levels of impairment allowances, which could have an adverse effect on NWB
Bank's prospects, financial condition and results of operations.
Should further volatility in the financial and credit markets occur, or global economic recovery stagnate, NWB Bank
may experience reductions in business activity, increased and volatile funding costs and funding pressures,
decreased asset values and/or lower profitability. As a result of changing market conditions and the influence of
financial, economic and/or other cycles, NWB Bank's results of operations are subject to volatility that may be
outside the control of NWB Bank. NWB Bank's financial condition and results of operations may, therefore, vary
significantly from year to year depending on market and general economic conditions.
A weakening of economic recovery in Europe, the uncertainties surrounding the United Kingdom's exit from the
European Union, and any renewed threat of default by certain Eurozone countries, may adversely affect NWB
Bank's business and results of operations
Countries such as Greece, Italy, Ireland, Portugal and Spain (`GIIPS') have been particularly affected by the
macroeconomic and financial conditions since 2008 and forecasts of growth in 2017 for some of the largest
European economies such as Italy remain low. Greece's economy remained in recession during the second half of
2016, with continued uncertainty about potential sovereign default. Pressure from the European Union over the
refugee crises and ongoing bail-out tranche talks continue to negatively impact the European markets. The potential
impact of a sovereign default on the Eurozone countries, including the potential that some member states of the
European Union (`Member States') could leave the Eurozone (either voluntarily or involuntarily), continues to
raise concerns about the ongoing viability of the euro currency and the Economic and Monetary Union (the `EMU').
While the QE program of the ECB that commenced in March 2015 is designed to improve confidence in Eurozone
equities and encourage private bank lending, there remains considerable uncertainty as to whether such measures
will sustain the economic recovery or avert the threat of sovereign default.
In addition, in a referendum held in the United Kingdom on 23 June 2016, a majority voted for the United Kingdom
to leave the European Union. There is uncertainty relating to the negotiation and form of the United Kingdom's
relationships with the European Union, with other multilateral organizations and with individual countries at the
time of exit and beyond. The uncertainty surrounding such exit could negatively impact the European markets.
Further, the presidential elections in France and federal elections in Germany in 2017 could result in general market
volatility or instability, including due to potential discussions about those countries' place in the European Union,
which in turn could negatively impact the European markets.
The full effects on the Dutch, European and global economies of the United Kingdom's exit from the European
Union, the 2017 elections in Europe, an exit of one or more Member States from the EMU, or a potential dissolution
of the EMU and a consequential re-introduction of individual currencies in one or more EMU Member States, are
impossible to predict. However, if any such event were to occur it would likely:
result in significant market dislocation;
result in significant volatility in the value of the euro against other currencies;
heighten counterparty risk;
result in downgrades of credit ratings for European borrowers, giving rise to increases in credit spreads and
decreases in security values;
4

50106254 M 21287745 / 7

disrupt and adversely affect the economic activity of the Dutch and other European markets; and
adversely affect the management of market risk and in particular asset and liability management due, in
part, to the redenomination of financial assets and liabilities and the potential for mismatch.
The occurrence of any of these events could have a material adverse effect on NWB Bank's prospects, financial
condition and results of operations.
Changes in interest rates and or/widening of liquidity and credit spreads may negatively affect NWB Bank's
prospects, financial condition and results of operations
NWB Bank's exposure to fluctuations in interest rates arises from differences in interest rate and terms between
lending and borrowing. In a period of changing interest rates (and volatile spreads), interest expense may increase at
different rates than the interest earned on assets. Accordingly, changes in interest rates could decrease interest
income, NWB Bank's primary source of revenue. In addition, changes in interest rates may negatively affect the
value of NWB Bank's assets and its ability to realize gains or avoid losses from the sale of those assets, all of which
also ultimately affect profit. Changes in interest rates may also result in unrealized losses that may be required to be
recognized in the income statement or in equity on the balance sheet. Furthermore, an increase in interest rates (or
spreads) may decrease the demand for loans. Accordingly, changes in prevailing interest rates and/or widening of
liquidity and credit spreads may negatively affect NWB Bank's prospects, financial condition and results of
operations.
NWB Bank's policy is to manage the interest rate risk bank-wide by using interest rate swaps and other derivative
instruments for both the asset and the liability sides of the balance sheet, in which NWB Bank agrees to exchange, at
specified intervals, the difference between fixed and variable interest rates calculated by reference to an agreed-upon
notional principal amount. NWB Bank's hedging activities, however, may not have the desired beneficial impact on
its financial condition or results of operations.
NWB Bank is subject to liquidity risks and adverse capital and credit market conditions may impact NWB Bank's
ability to access liquidity as well as the cost of credit
Liquidity risk is the risk that NWB Bank, although solvent, is at any given moment unable to meet its payment
obligations due to insufficient financial resources or can only secure such financial resources at excessive cost.
NWB Bank requires liquidity in its day-to-day business activities primarily to pay its operating expenses and interest
or other payments on its debt or derivatives and replace certain of its maturing liabilities. The principal source of
liquidity for NWB Bank is the wholesale lending markets.
During the worst stages of the global economic and financial crisis, credit markets worldwide, including interbank
markets, experienced severe reductions in the availability of financing for prolonged periods. During the first part of
2012, credit markets were disrupted mainly due to the sovereign debt crises associated with, amongst others, the
GIIPS, which resulted in funding being difficult to obtain and terms for certain borrowers being less favorable.
Intervention of the ECB and its long-term refinancing operations made available in December 2011 and February
2012 reduced this liquidity problem that was adversely affecting banks across Europe and had shut many European
banks out of the wholesale public markets. In addition, the ECB announced in June 2014 that it would conduct a
series of targeted longer-term refinancing operations aimed at improving bank lending to the non-financial private
sector over a period of two years. However, certain European banks, in particular in Spain, Portugal, Greece and
Italy, remained reliant on the ECB as one of their principal sources of liquidity. If volatility were to return to the
global credit markets, it could have a material adverse impact on the availability of funding and the cost of obtaining
such funding.
In addition, the market perception of counterparty risk between banks has changed significantly as a result of the
global economic and financial crisis. Uncertainty regarding the perception of credit risk across financial institutions
has led to, and may continue to lead to, reductions in access to traditional sources of funding, such as the wholesale
lending markets, or increases in the costs of accessing such funding.
5

50106254 M 21287745 / 7

Although credit markets experienced elevated volatility during 2016, NWB Bank's overall liquidity position
remained strong. However, if any of the problems discussed above continue or recur, NWB Bank's access to the
wholesale lending markets could be restricted or available only at a higher cost.
The availability and cost of financing depend on a variety of factors such as the market conditions referred to above,
as well as the general availability of funds, the volume of trading activities, the availability of funds to the financial
services industry, an issuer's credit ratings and credit capacity, as well as the possibility that customers or lenders
could develop a negative perception of an issuer's long- or short-term financial prospects. NWB Bank's access to
funds and the cost of obtaining such funds is significantly influenced by the views of rating agencies. If NWB
Bank's access to the capital markets or the cost of accessing such markets should increase significantly or if NWB
Bank is unable to attract other sources of financing, these developments could have an adverse effect on NWB
Bank's liquidity position and its financial condition and results of operations.
Credit and counterparty risk may negatively affect NWB Bank's financial condition and results of operations
NWB Bank is subject to general credit risks, including credit risks of borrowers. Third parties that owe NWB Bank
money, securities or other assets may not pay or perform under their obligations. These parties include borrowers
under loans made by NWB Bank, the issuers whose securities NWB Bank holds, customers, trading counterparties,
counterparties under swap and credit and other derivative contracts, clearing agents and central clearing houses,
exchanges and other financial intermediaries. These parties may default on their obligations to NWB Bank due to
bankruptcy, lack of liquidity, downturns in the economy, operational failure, systemic failure or for other reasons.
Any such defaults could lead to losses for NWB Bank, which could have a material adverse effect on NWB Bank's
financial condition and results of operations.
Ratings downgrades and other ratings actions could have an adverse impact on NWB Bank's operations and
financial condition
Ratings are important to NWB Bank's business for a number of reasons, including because they may affect NWB
Bank's continued access to the capital markets and the cost of accessing such markets. NWB Bank has credit ratings
from Standard & Poor's and Moody's. Each of the rating agencies reviews its ratings and rating methodologies on a
recurring basis and may decide to downgrade NWB Bank at any time.
On 2 December 2013, Standard & Poor's lowered the long-term rating of NWB Bank from `AAA' to `AA+.' The
downgrade of NWB Bank reflects a similar action on the Netherlands on 29 November 2013. On 24 November
2015, Standard & Poor's raised the long-term rating on NWB Bank from AA+ to AAA with a `stable' outlook. On 9
December 2016, Standard & Poor's affirmed the AAA long-term rating of NWB Bank and its `stable' outlook. In
accordance with Standard & Poor's criteria for rating government-related entities, they believe that there is an
`almost certain' likelihood that NWB Bank as a government-related entity would receive timely and sufficient
extraordinary support from the Dutch government in the event of financial distress. As a result, Standard & Poor's
equalized the long-term ratings with that of the Netherlands. Standard & Poor's opinion of an `almost certain'
likelihood of government support for NWB Bank reflects its view that NWB Bank plays a `critical role' for the
Dutch government through its key public policy mandate and has an `integral' link with the Dutch government as
Standard & Poor's considers NWB Bank as an extension of the government. In addition, on 29 May 2014, while
affirming the Aaa long-term rating of NWB Bank, Moody's changed the outlook on NWB Bank's long-term rating
from `stable' to `negative.' This outlook change was part of Moody's rating action to change the outlook on 82 long-
term European bank ratings to negative following its initial assessment of the Bank Recovery and Resolution
Directive (`BRRD') (adopted in April 2014) and the Single Resolution Mechanism (`SRM') regulation (approved
by the European Parliament in April 2014), see `Nederlandse Waterschapsbank N.V. Supervision and Regulation.'
On 17 March 2015, Moody's changed the outlook on NWB Bank's long-term rating from `negative' to `stable.' On
5 January 2016 and again on 13 January 2017, Moody's affirmed the Aaa long-term rating of NWB and its `stable'
outlook.
Notwithstanding Standard & Poor's view, which is shared by Moody's, that NWB Bank is a `government-related
entity,' investors should note that NWB Bank is not a government entity and its debt (including the Notes) are not
6

50106254 M 21287745 / 7

direct or indirect obligations of the State of the Netherlands or guaranteed in any way by the State of the
Netherlands.
As evidenced by the rating action taken by Standard & Poor's, any rating action taken by Standard & Poor's or
Moody's with respect to the State of the Netherlands can be expected to impact NWB Bank's ratings. While NWB
Bank did not experience significant negative effects as a result of the rating actions by Standard & Poor's in 2013
and Moody's in 2014, any adverse rating action could adversely affect NWB Bank. In the event of a downgrade or
negative outlook with respect to NWB Bank or if NWB Bank is placed on credit watch, NWB Bank's cost of issuing
debt instruments might increase, having an adverse effect on net profit and potentially impacting NWB Bank's
competitive position with its clients in the public sector and its financial condition.
NWB Bank is exposed to certain concentration risks in its loan portfolio
NWB Bank lends primarily to public authorities and institutions guaranteed by public authorities. In addition, NWB
Bank holds an interest-bearing securities portfolio comprising mainly securitized Dutch home mortgage loans
(`Residential Mortgage Backed Securities' or `RMBS notes') that are guaranteed under the National Mortgage
Guarantee (a guarantee provided to certain mortgage lenders by Stichting WEW, a private entity, covering payment
obligations of the borrowers vis-à-vis the mortgage lender), which carry limited- to high-weighted credit risk, and
bonds issued or guaranteed by public sector institutions, which carry limited weighted credit risk. The portfolio of
RMBS notes declined by 0.1 billion during 2016 to 2.1 billion as at 31 December 2016. A relatively small
proportion of loans is provided to government controlled companies without a government guarantee (Dutch utility
companies), which carry a high weighted credit risk. In addition, NWB Bank carries out hedging transactions with
financial institutions, including currency and interest rate swaps, and enters into other derivative transactions, as
well as money market transactions, based on which there is a counterparty risk. NWB Bank's Articles of
Association prohibit all lending to privately owned entities, except that, since the amendments to the Articles of
Association in April 2013, NWB Bank is permitted to extend long-term financing in a public-private partnership
(`PPP') model without a government guarantee. Loans to be extended under this PPP model carry a higher weighted
credit risk.
While NWB Bank's niche position as a specialized lender to the Dutch public sector means that it has a low-risk
weighted portfolio, it also has a limited ability to diversify its lending and hence its main revenue source (net-
interest income), which are strongly concentrated in both sector and geography. In particular, NWB Bank has a
strong concentration in lending to social housing associations (approximately 64% of its total lending portfolio as at
31 December 2016), which loans are guaranteed by Stichting Waarborgfonds Sociale Woningbouw (`WSW'), a
social housing fund ultimately supported by the Dutch central government and municipalities. The social housing
sector has been facing multiple challenges for several years. These challenges have included the additional tax on
housing corporations (verhuurdersheffing), the effects of the financial crisis, demographic trends and political
decision-making, all of which affect housing corporations' policies and finances. Government policies and European
rules on permitted state aid have a major impact on the social housing sector's financial position and ability to
invest. On 1 January 2011, an interim state aid scheme for social housing associations took effect, which defines
activities that are eligible for state aid and the conditions to which they are subject. For example, housing
associations are required to confine their activities to their core business: activities in the social rented housing
sector, or services of general economic interest (`SGEI'). In 2013, the Dutch government concluded an agreement
allowing housing associations, under certain conditions, to continue to develop non-SGEI activities. On 1 July 2015,
amendments to the Dutch Housing Act (herziene Woningwet), which set out permissible non-SGEI activities and
their preconditions, entered into force. These amendments limit the scope of business activities of housing
associations and, in response, housing associations have been postponing and may continue to postpone new near-
term investments. In addition, some housing corporations are compelled to reduce their housing portfolios, which
would adversely affect their refinancing needs. In the long term, from an accounting and legal standpoint, SGEI
activities must be separated from non-SGEI activities. Only SGEI activities may be performed with state aid.
Guarantees issued by WSW are the principal form of state aid and many non-SGEI activities are currently financed
under a WSW guarantee. Since the ultimate impact of the new housing legislation is to limit the volume of
guaranteed loans to social housing associations, NWB Bank's financial condition and results of operations could be
adversely affected. In response to the foregoing developments the social housing sector implemented cost-saving
7

50106254 M 21287745 / 7