Obligation Covivo SA 2.375% ( XS1772457633 ) en EUR

Covivo SA

100 % ▼

France

XS1772457633 ( en EUR )

2.375% par an ( paiement annuel )

20/02/2028 - Obligation échue

Prospectus brochure de l'obligation Covivio S.A XS1772457633 en EUR 2.375%, échue

Covivio S.A. est une société immobilière européenne cotée en bourse, spécialisée dans l'investissement et la gestion d'actifs immobiliers diversifiés, principalement dans les secteurs du tertiaire, de l'hôtellerie et de la résidentiel.

L'analyse d'un instrument financier majeur révèle la conclusion réussie d'une obligation d'envergure, portant le code ISIN XS1772457633, émise par Covivio S.A., un acteur immobilier européen de premier plan basé en France, spécialisé notamment dans les bureaux, l'hôtellerie et le résidentiel. Cette obligation, libellée en Euros et affichant un taux d'intérêt fixe de 2.375% versé annuellement, avait une date de maturité fixée au 20 février 2028, et son prix de marché reflétait sa valeur nominale de 100% avant son remboursement, signifiant ainsi qu'elle a été entièrement et ponctuellement remboursée à ses détenteurs à son échéance, attestant de la solidité financière de l'émetteur et de la bonne gestion de cette ligne de dette.

Beni Stabili S.p.A. Siiq
(incorporated with limited liability under the laws of the Republic of Italy)
300,000,000
2.375 per cent. Notes due 20 February 2028
The issue price of the 300,000,000 2.375 per cent. Notes due 20 February 2028 (the Notes) of Beni Stabili S.p.A. Siiq (the Issuer or Beni Stabili) is
99.063 per cent. of their principal amount.
Unless previously redeemed or cancelled, the Notes will be redeemed at their principal amount on 20 February 2028. The Notes are subject to
redemption, in whole but not in part, at their principal amount, plus interest, if any, to the date fixed for redemption in the event of certain changes
affecting taxation in the Republic of Italy and redemption, in whole and in part, at the Make Whole Amount (as defined in Condition 6) at the option
of the Issuer at any time. In addition, the holder of a Note may, by the exercise of the relevant option, require the Issuer to redeem or, at the Issuer`s
option, purchase such Note at 100 per cent. of its principal amount together with accrued and unpaid interest (if any) to (but excluding) the Put Date
upon the occurrence of a Put Event (each as defined below). See Terms and Conditions of the Notes -- Redemption and Purchase.
The Notes will bear interest from 20 February 2018 (the Issue Date) at the rate of 2.375 per cent. per annum payable annually in arrear on 20
February each year commencing on 20 February 2019. Payments on the Notes will be made in Euro without deduction for or on account of taxes
imposed or levied by the Republic of Italy to the extent described under Terms and Conditions of the Notes Taxation.
The Notes will constitute senior, unsecured obligations of the Issuer which will at all times rank pari passu among themselves and at least pari passu
with all other present and future unsecured obligation of the Issuer, save for certain mandatory exceptions of applicable law.
Application has been made to the Commission de Surveillance du Secteur Financier (the CSSF) in its capacity as competent authority under the
Luxembourg Act dated 10 July 2005, as amended (the Luxembourg Prospectus Act) relating to prospectuses for securities, for the approval of this
Prospectus for the purposes of Directive 2003/71/EC (as amended, including by Directive 2010/73/EU) (the Prospectus Directive). Pursuant to
Article 7(7) of the Luxembourg Prospectus Act, by approving this prospectus, the CSSF gives no undertaking as to the economic and financial
soundness of the Notes to be issued hereunder and the quality or solvency of the Issuer. Application has also been made to the Luxembourg Stock
Exchange for the Notes to be listed on the official list of the Luxembourg Stock Exchange (the Official List) and to be admitted to trading on the
Luxembourg Stock Exchange`s regulated market. References in this Prospectus to the Notes being listed (and all related references) shall mean that
the Notes have been listed on the Official List and admitted to trading on the Luxembourg Stock Exchange`s regulated market. The Luxembourg
Stock Exchange`s regulated market is a regulated market for the purposes of Directive 2014/65/EU of the European Parliament and of the Council on
markets in financial instruments.
The Issuer has been rated BBB- by Standard & Poor`s Credit Market Services Europe Limited (S&P). The Notes will be rated BBB- by S&P. S&P
is established in the European Union and is registered under the Regulation (EC) No. 1060/2009 (as amended) (the CRA Regulation). As such, S&P
is included in the list of credit rating agencies published by the European Securities and Markets Authority on its website (at
http://www.esma.europa.eu/page/List-registered-and-certified-CRAs) in accordance with the CRA Regulation. A security rating is not a
recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency.
The Notes have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the Securities Act) and are subject
to United States tax law requirements. The Notes are being offered outside the United States by the Joint Lead Managers (as defined in Subscription
and Sale) in accordance with Regulation S under the Securities Act (Regulation S), and may not be offered, sold or delivered within the United
States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. For a description of certain restrictions on transfers of the Notes, see Subscription and Sale.
Investing in the Notes involves risks. See "Risk Factors" beginning on page 2 of this Prospectus for a discussion of certain risks prospective
investors should consider in connection with any investment in the Notes.
The Notes will be in bearer form in the denomination of 100,000 each and, for so long as the Notes are represented by a Global Note (as defined
below) and Euroclear Bank SA/NV (Euroclear) and Clearstream Banking S.A. (Clearstream, Luxembourg) (or other relevant clearing system)
allow, in denominations of 1,000 in excess of 100,000, up to and including 199,000. The Notes will initially be in the form of a temporary global
note (the Temporary Global Note), without interest coupons, which will be deposited on or around the Issue Date with a common safekeeper for
Euroclear and Clearstream, Luxembourg. The Temporary Global Note will be exchangeable, in whole or in part, for interests in a permanent global
note (the Permanent Global Note, and together with the Temporary Global Note, each a Global Note), without interest coupons, not earlier than 40
days after the Issue Date upon certification as to non-U.S. beneficial ownership. Interest payments in respect of the Notes cannot be collected without
such certification of non U.S. beneficial ownership. The Permanent Global Note will be exchangeable in certain limited circumstances in whole, but
not in part, for Notes in definitive form in principal amounts equal to 100,000 and integral multiples of 1,000 in excess thereof, up to and including
199,000, each with interest coupons attached. No Notes in definitive form will be issued with a denomination above 199,000. See Overview of
Provisions Relating to the Notes in Global Form.
JOINT LEAD MANAGERS
Morgan Stanley
Natixis
Prospectus dated 16 February 2018

TABLE OF CONTENTS

RISK FACTORS ......................................................................................................................................................... 2
IMPORTANT NOTICES ...........................................................................................................................................15
INFORMATION INCORPORATED BY REFERENCE...........................................................................................21
TERMS AND CONDITIONS OF THE NOTES .......................................................................................................24
OVERVIEW OF PROVISIONS RELATING TO THE NOTES IN GLOBAL FORM .............................................41
USE OF PROCEEDS ................................................................................................................................................43
DESCRIPTION OF THE ISSUER ............................................................................................................................44
TAXATION ...............................................................................................................................................................76
SUBSCRIPTION AND SALE ...................................................................................................................................86
GENERAL INFORMATION ....................................................................................................................................88

i

RISK FACTORS
Any investment in the Notes is subject to a number of risks. Prior to investing in the Notes, prospective
investors should carefully consider risk factors associated with any investment in the Notes, the business of
the Issuer and its consolidated subsidiaries (together the Group or the Beni Stabili Group) and the industry
in which it and the Group operates together with all other information contained in this Prospectus,
including, in particular, the risk factors described below. 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.
The following is a list of risks which are specific to the situation of the Issuer and/or the Notes and which
investors may face when making an investment in the Notes and should be used as guidance only. Additional
risks and uncertainties relating to the Issuer that are not currently known to the Issuer or that it currently
deems immaterial, may individually or cumulatively also have a material adverse effect on the business,
prospects, results of operations and/or financial position of the Issuer and/or its Group and, if any such risk
should occur, the price of the Notes may decline and investors could lose all or part of their investment.
Investors should consider carefully whether an investment in the Notes is suitable for them in light of the
information in this Prospectus and their personal circumstances.
Factors that may affect the Issuer's ability to fulfil its obligations under the Notes
Risks relating to the Beni Stabili Group
Risks linked to the environment in which Beni Stabili operates
Risks linked to the economic environment
Changes in domestic or international economic conditions (economic growth, interest rates, unemployment
rate, calculation, method for rent indexation, changes in various indices, etc.) may have a significant negative
impact on the business of the Beni Stabili Group and its financial results. The Beni Stabili Group could
experience a downturn in demand for corporate real estate projects, a drop in the occupancy rate and in the
leasing or re-leasing price of its real estate properties, and a decline in the valuation of its portfolio.
Risks linked to changes in real estate market
The Italian and international real estate markets are subject to cyclical trends and are influenced by a series of
macroeconomic factors. Market demand and supply are affected by, amongst other things, general economic
conditions, interest rate fluctuations, inflation trends, tax regimes, market liquidity and alternative investment
opportunities.
The Beni Stabili Group operates primarily in the office property sector in Italy. The value of the Group`s
portfolio depends on the performance of the market in which it operates as well as on the evolution of the
macro environment, legislation and tax regulations. It may fluctuate, particularly with respect to rental income
and property values in light of the supply/demand balance and the overall economic situation. The Beni
Stabili Group may not be in a position to carry out its rental or leasing strategy, its investments and, where
applicable, its disposals at a favourable time or under favourable market conditions. It may be forced to defer
or change such strategy and investments depending on the fluctuations in the property market.
Although the Group pursues an investment strategy aimed at minimising the impact of the economic cycle, an
extended period of economic downturn or the occurrence of other factors that negatively impact real estate
values could have an adverse effect on the Group`s financial condition and results of operations.

2

Competition risks
Within the context of its development, the Beni Stabili Group is in competition with numerous players that
have a more significant financial basis. The Group`s rental activity is also subject to strong competitive
pressure. As a whole, these factors could lead to uncertainty in relation to the Group`s growth forecasts and
have a negative impact on its business, its financial condition and its results of operations.
Risks linked to the scope and type of business of the Group
The geographical concentration of the Group's property assets may have a negative impact on its business
The Group operates wholly in the Italian market, with its property assets concentrated primarily in northern
Italy, and is therefore particularly exposed to the trends of the local economy.
As at 30 June 2017, the majority of the Group`s portfolio of properties by market value was located in
northern Italy, and especially in Milan and surrounding areas, with approximately 62 per cent. of the overall
value of its properties concentrated in such areas. The second largest city in terms of concentration is Turin,
where, as at 30 June 2017, 6 per cent. of the properties were located while the third largest city is Rome
where, as at 30 June 2017, 5 per cent. of the properties were located. Furthermore, 91 per cent. of the
portfolio is composed of office properties whereas 9 per cent. of the portfolio is composed of retail and other
buildings. All the above percentages are calculated on a group share basis1 (referred to in this Prospectus as
Group Share basis).
Consequently, the Group`s results of operations and the value of its property portfolio could be negatively
affected by a worsening of the local economy or of the local real estate market in the Italian cities where the
Group`s real estate assets are concentrated. This exposes the Group to specific local risks in relation to
changes in the local economy and local politics and/or planning laws, which cannot easily be predicted and
which could have an adverse effect on the Group`s financial condition and results of operations.
Risks related to renewal of leases and letting of real estate assets
Upon expiration of existing leases, the Group may not be in a position to renew them under equivalent terms
or to lease the assets within a reasonable time frame, particularly due to macroeconomic and real estate
market conditions. The Group may fail to succeed in maintaining its occupancy rate and its rental income,
which would have an adverse impact on its financial condition and results of operations.
The Group is primarily dependent on a limited number of tenants for its rental revenues
As at 30 June 2017, the Group`s annual rental income generated from its top four tenants accounted for
approximately 55 per cent. of the Group`s total rental income on a Group Share basis (63 per cent. on a
consolidated basis). Among these four main tenants (Telecom Italia S.p.A., Intesa Sanpaolo S.p.A., Maire
Technimont S.p.A. and the Italian public administration), Telecom Italia alone accounted for approximately
34 per cent of the Group`s total rental income on a Group Share basis (46 per cent. of the Group`s
consolidated total rental income). The Issuer`s management constantly monitors the creditworthiness of these
main tenants. Nonetheless, an extended period of economic downturn could result in a material breach of
contract by one or more of these or other tenants or a worsening of their creditworthiness or their capacity to
fulfil their rental obligations, which could have an adverse effect on the Group`s financial condition and
results of operations.

1 The Issuer calculates the group share by taking into account the participation into Central SICAF at the current stake of 60%.

3

The Group is exposed to credit risk arising from its commercial activity
Credit risk represents the Group`s exposure to potential losses that could be incurred if a counterparty fails to
meet its obligations. This risk arises primarily from economic and financial factors (i.e., where the
counterparty defaults on its obligations), as well as from factors that are technical, commercial, administrative
or legal in nature.
The Group`s exposure to credit risk is due mainly to the concentration of its commercial relationships with
four major tenants (see The Group is primarily dependent on a limited number of tenants for its rental
revenues above).
Material defaults by major tenants or financial counterparties, or a significant increase in current default rates
by counterparties generally, could have an adverse effect on the Group`s financial condition and results of
operations.
As at 30 June 2017, receivables from tenants, before the related provision for write-downs, totalled 50,856
thousand (including receivables for invoices to be issued totalling 21,960 thousand, which were recorded
pursuant to the rules of IAS 17 in order to even out the overall contractual compensation over the term of the
lease). Of this amount, about 17,516 thousand was more than 12 months overdue. Moreover, the provision
for receivable write-downs as at 30 June 2017 totalled about 19,518 thousand.
For additional information on credit risk from the Issuer`s business, see the unaudited consolidated half-year
financial statements of the Issuer for the six months ended on 30 June 2017 and specifically Paragraph 3.1 of
the Notes to the Financial Statements on pages 61 to 73, which are incorporated by reference in this
Prospectus.
Credit recovery expectations are assessed on a position-by-position basis, taking into account existing validly
enforceable guarantees and opinions of external counsel in respect of any relevant recovery actions. The
operating and financial performance of the Group`s more important tenants are monitored on an ongoing
basis, with bank sureties and guarantee deposits provided by tenants securing more than one quarter of the
aggregate amount of annual rentals as at 30 June 2017. However, assessments of creditworthiness are based
on the information available at the time and could be adversely affected by market or general economic
conditions, and could ultimately have a material adverse impact on the Group`s financial condition and results
of operations.
The Group is exposed to fluctuating property values
Since investment properties, properties held for sale and, where applicable, properties under development are
measured at fair value and the relative fluctuations are accounted for in the Group`s income statement,
movements in property prices can have a significant impact on the Group`s operating performance.
Furthermore, part of the Group`s operating results derive from property trading, which is also significantly
influenced by property value trends and the volume of transactions. Rents and property values are cyclical in
nature, and are influenced by macroeconomic factors such as interest rates, liquidity and economic growth.
The Group`s investment policy aims to minimise the impact of different stages of the cycle through a careful
selection of investments that offer long-term leases with creditworthy tenants, strategic locations in cities that
have a structural shortage of good quality office space and low vacancy rates. Purchases and sales of
properties in the Group`s trading portfolio are carefully monitored both to minimise risk and to exploit
opportunities. However, fluctuations in property values are largely out of the control of the Group and could
have a material adverse impact on the Group`s financial condition and results of operations.

4

The Group may not be successful in completing development projects as planned, or on commercially
favourable terms
The Group has invested in development assets, currently representing approximately 10 per cent. of its total
portfolio. As at the date of this Prospectus, the Group`s main development projects include the development
of two disused industrial areas, the renovation of another three existing properties in Milan (the Symbiosis
Area in Milan (formerly called Ripamonti), the property in Via Schievano, and the buildings in Via Cernaia
which is almost completed and delivered, Via Colonna, Piazza Monte Titano, Via Principe Amedeo and the
refurbishment of an existing building complex in Turin, C.so. Ferrucci (for further information, see the
section headed Description of the Issuer - Business Overview of the Beni Stabili Group below)).
Development projects may require substantial capital expenditure, and it usually takes a considerable amount
of time before projects are completed and begin generating income. Certain general risks affect development
and refurbishment activities, including risks relating to completion, the possibility of construction overruns
(both in terms of time and budget), the risk of not obtaining, or delays in obtaining, necessary administrative
permits, statutory consents and planning permissions and risks relating to the financing of the development.
Inaccurate assessment of a development opportunity or a decrease in tenant demand due to competition from
other commercial real estate properties or adverse market conditions, could result in a substantial proportion
of the development remaining vacant after completion and exert pressure on the Group to provide rental or
capital incentives to tenants or purchasers.
In addition, there are risks associated with (i) the failure to obtain title to property, and (ii) failure by third
parties, including failure to complete a compulsory purchase order by a local authority. In addition, the Group
may become subject to obligations under development agreements giving rise to additional expenditure
commitments. Any of these factors could increase the cost of, or could delay or prevent completion of, a
project and/or could result in a delay or loss of revenues or of capital invested. In addition, overruns on any
new or existing developments (or the insolvency of contractors or failure of contractors to perform
obligations) may have an adverse impact on the financial viability of the scheme and may lead to the need for
additional funding.
Consequently, there can be no assurance that the existing or future development of property by the Group will
not have an adverse effect on the Group`s business, financial condition and/or results of operations.
The Group's success depends on attracting and retaining key personnel
The Group`s success depends, to a significant extent, on the continued services of its executive management
team, which has substantial experience in the property industry. In addition, the Group`s ability to continue to
identify and develop properties depends on the management`s knowledge of, and expertise in, the property
market. There is no guarantee that the executive management team will remain employed by the Group. The
sudden and/or unanticipated loss of the services of one or more members of the executive management team
could have an adverse effect on the Group`s business, financial condition and/or results of operations which
could, in turn, have a material adverse impact on the ability of the Issuer to meet its obligations under the
Notes and/or its obligations under its other financial indebtedness.
Legal, fiscal, regulatory, environmental and insurance risks
The Group's business and results of operations could be negatively affected by changes in the legislative,
regulatory and fiscal framework in Italy and at a European level
The Group`s activities are subject to a number of building, health and safety and planning legislation and
regulations (at both a national and regional level), environmental laws and regulations (at the European
Community level), landlord-tenant legislation, and specific tax regimes. Increased capital expenditure and

5

operating costs resulting from future laws and regulations, amendments to applicable tax rates and regimes,
changes in the regulations on commercial leases and changes in environmental regulations could adversely
affect the Group`s results of operations and financial condition. The failure to comply with the requisite
standards and regulations in relation to any particular property may adversely affect such property`s value
and/or result in increased costs to be borne by the Group in order to remedy such non-compliance, which in
turn could have an adverse effect on the Group`s financial condition and results of operations.
The Group may be liable for environmental issues relating to its current and former operations and
properties
The Group may be liable for the costs of removal, investigation or remediation of hazardous or toxic
substances located on or in a property owned by or leased to it at a particular time, or any property formerly
owned by it but subsequently disposed of. The costs of any required removal, investigation or remediation of
such substances may be substantial. The presence of such substances, or the failure to remediate such
substances properly, may also adversely affect the Group`s ability to sell or lease the real estate or to borrow
using the real estate as security. Whilst the Group has generally not provided contractual representations
regarding environmental liabilities when selling properties in recent years, laws and regulations, as these may
be amended over time, may impose liability for the release of certain materials into the air or water from a
current or former real estate investment, including asbestos, and such release can form the basis for liability to
third persons for personal injury or other damages. Other laws and regulations can limit the development of,
and impose liability for the disturbance of, wetlands or the habitats of threatened or endangered species.
In addition, the Beni Stabili Group`s exposure to potential health and environmental risks may tarnish the
image and the reputation of the Issuer.
Non-compliance with, or liabilities under, existing or future environmental laws and regulations, including
failure to hold the requisite permits or licences, could result in fines, penalties, third-party claims and other
costs that could have a material adverse effect on the Group`s business, financial condition and/or results of
operations. This could, in turn, have a material adverse impact on the ability of the Issuer to make repayments
under the Notes and its other financial indebtedness, although prospective investors should note that,
historically, the Group is not aware of any such claims, penalties or similar actions arising in respect of the
properties in its portfolio.
The Group is currently involved in a number of disputes
At the date of this Prospectus, Beni Stabili and other Group companies are parties to a number of legal and
tax disputes arising in the ordinary course of their activities (see the section headed Description of the
Issuer - Litigation and contingencies, as well as pages 191 to 195 of the audited consolidated annual
financial statements of the Issuer for the financial year ended 31 December 2016 and pages 114 to 118 of the
unaudited consolidated half-year financial statements of the Issuer as at and for the six months ended on 30
June 2017, incorporated by reference in this Prospectus).
The Group monitors the development of these proceedings with the help of external advisers and, where
necessary, has recorded provisions considered appropriate in light of the circumstances following a prudent
analysis of each dispute and the risks concerned. The evaluation of risks is, however, subjective and
necessarily involves estimations of potential liabilities. There can be no assurance that the ultimate outcome
of these disputes will not have a material adverse impact on the Group`s financial conditions and results of
operations and there can be no assurance that further disputes, not currently known to the Issuer, will not be
commenced in the future.

6

The Group may be insufficiently insured to cover all of the losses, damage and limitations of use which
may affect its properties
The Group is required by its best practice and policy guidelines to maintain or procure that there is maintained
certain insurance cover with respect to its portfolio of property assets consistent with market practice. In
addition, the Group is required to maintain such insurance cover in relation to assets that have been
mortgaged to secure financings (which is the case in respect of most of the Group`s assets). The Group has
entered into an annual global insurance policy with a primary insurer covering damages to its property assets
as a result of fire, natural and socio-political events, earthquakes and structural collapses, with an additional
insurance policy extending coverage up to a maximum recoverable amount of 50 million per annum for
insured loss caused by natural events and earthquakes. The Group also has insurance covering liability for
damages caused to third parties for a maximum recoverable amount of 10.33 million, with an additional
insurance policy extending coverage for such damages up to 20.33 million.
The Group`s ability to continue to fulfil these requirements will be subject to the availability of such
insurance generally in the global insurance market. The Group may remain exposed (or become further
exposed) to certain uninsured risks, for example, where insurance is not generally available or is not generally
available on commercially reasonable terms.
The Group`s insurance policies are subject to exclusions of liability and limitations of liability both in amount
and with respect to the type of insured loss events.
In addition, there are certain types of losses, generally of a catastrophic nature, such as those caused by
floods, hurricanes, terrorism or acts of war that may be or become uninsurable or unavailable on
commercially reasonable terms. Inflation, changes in building codes and ordinances, environmental
considerations and other factors, may also result in insurance proceeds, if any, being insufficient to repair or
replace a property if it is damaged or destroyed. Under such circumstances, the insurance proceeds, if any,
may be inadequate to fully compensate the Group with respect to the affected real estate. Should an uninsured
loss or a loss in excess of insured limits occur, the Group could lose capital invested in the affected property
as well as anticipated future revenue from that property. In addition, the Group could be liable to repair
damage caused by uninsured risks. The Group would also remain liable for any debt or other financial
obligation related to that property. There can be no guarantee that the level of insurance cover for the Group
now or in the future will be sufficient. No assurance can be given that material losses in excess of insurance
proceeds will not occur in the future or that any insurance proceeds will be received at all. If such losses occur
and are not covered by insurance and the Group has to make a payment, there could be an adverse effect on
the Group`s business, financial condition and/or results of operations. This could, in turn, have a material
adverse impact on the ability of the Issuer to meet its obligations under the Notes and/or its obligations under
its other financial indebtedness.
Risks related to the tax treatment of the Issuer as a Siiq
Effective from January 2011, the Issuer opted for the SIIQ (Società Immobiliare di Investimento Quotata
Real Estate Investment Trust) regime, i.e., a special status which allows a company to benefit from certain tax
advantages.
In order to hold the SIIQ status, certain requirements must be met by the Issuer at all times, including but not
limited to compliance with objective requirements (such as being incorporated as a joint-stock company,
having tax residence in Italy or in a white listed member state of the EU/EEA and being listed on a
regulated stock exchange), corporate requirements (the by-laws shall set out the rules governing the
investment policy, risk limitations on counterparty concentration and the maximum permitted leverage),
shareholding structure and corporate governance limitations (the controlling stakeholder cannot own more

7

than 60 per cent. of the voting rights) and limitations on corporate rental activity (the regime requires a
minimum 80 per cent. ratio between assets rented or to be rented plus participation into SIIQ/SIINQ and total
assets (the so called Asset Test) as well as a minimum 80 per cent. ratio between revenues from rents (and
related recovered costs) plus dividends from SIIQ/SIINQ and total revenues (the so called Profit Test).
As at the date of this Prospectus, the Issuer is in compliance with all requirements under the relevant legal
provisions to hold the SIIQ status, and thus, to benefit from the related special tax regime. However, in the
future, if the Issuer is not able to comply with such requirements, among which, the requirement to distribute
a portion of income from leasing activities and also the income calculated in application of the so-called
carry forward mechanism, or if it is not able to restore these measures by any deadline imposed by
applicable regulations, the Issuer could lose this favourable tax treatment and be subject to ordinary taxation
with a consequent negative impact on the Issuer`s operating and financial position and on its ability to
distribute dividends.
Given their financial and economic importance for the purpose of the Asset Test and the Profit Test, the
forfeiture of the special scheme by the participating SIINQ could also result in important effects with regard
to the Issuer maintaining the SIIQ regime.
Risks related to information systems and cyber crime
Information systems have an essential role within the context of the Group`s activities. A default or a system
failure leading to loss or deterioration of data could have adverse consequences on the Issuer`s activities.
The Beni Stabili Group may also be subject to cyber-attacks or fraud attacks which may lead to theft, loss of
information or business interruption.
These interruptions, violations or defaults of the information systems could have adverse financial
consequence or damage the Group`s image.
Risks associated to the financial markets and the financial position of the Beni Stabili Group
Risks relating to global financial conditions
The continuing uncertainty regarding the development of the global economy, for example due to the
sovereign debt crises and inflation and deflation risks in many parts of the world, particularly in Europe, the
uncertainties in connection with the future of the United Kingdom and its relationship with the European
Union further to the United Kingdom`s vote to leave the European Union and the ongoing quantitative easing
announced by the European Central Bank, may result in economic instability, limited access to debt and
equity financing and possible defaults by the Issuer`s counterparties.
As a result, the Issuer`s ability to access the capital and financial markets and to refinance debt to meet the
financial requirements of the Issuer and the Group may be adversely impacted and costs of financing may
significantly increase. This could adversely affect the business, results of operations and financial condition of
the Issuer, with a consequent adverse effect on the market value of the Notes and the Issuer`s ability to meet
its obligations under the Notes.
Liquidity risk
To finance its investments and acquisitions and to refinance any debts that have reached maturity, the Issuer
must be in a position to raise significant financial resources. The Issuer runs the risk of experiencing a lack of
liquidity if it is unable to raise the necessary resources in the form of equity or borrowing.

8

The Issuer also incurs the risk of insufficient liquidity to service its debt. A shortage of cash could result in
acceleration or prepayment, and if the debt is collateralised, enforcement of the guarantee and, where
applicable, the seizure of assets
Under the SIIQ regime, Beni Stabili is required to distribute a significant part of its profits. Therefore, it relies
to a great extent on debt to finance its growth. This type of financing may sometimes not be available at
advantageous terms, depending on, among others, favourable market conditions (see Risks relating to the
global financial conditions above).
These factors may materially and adversely affect the Group`s results of operations and financial condition
should the Issuer be obliged to incur extra costs to meet its financial commitments or continue investments or,
in extreme cases, threaten the Issuer`s future as a going concern and lead to insolvency with possible
consequences on the Issuer`s ability to fulfil its obligations under the Notes.
The Group is exposed to interest rate fluctuations
As the Group`s financial indebtedness comprises various financings, including a number which require
payment of interest at a floating rate, it is particularly exposed to the risk of interest rate fluctuations. The
Group seeks to minimise its exposure through hedging activities, primarily interest rate swaps, interest rate
swaption, interest rate caps and zero cost collars. There is a constant monitoring of interest rate risk through
valuation tests conducted on a quarterly basis. Whilst the Group does not carry out any purely speculative
transactions, nor any transaction not directly connected to its debt exposure, and derivative instruments as at
30 June 2017 cover approximately 75.51% per cent. of the outstanding principal amount of its indebtedness,
the protection offered by derivative instruments is limited in amount and in time and, as a result, future
interest rate fluctuations may nonetheless adversely affect the Group`s financial condition and results of
operations.
Financial counterparty risk
The use of lines of credit and of interest rate hedging contracts from financial institutions could expose Beni
Stabili to the risk of insolvency by the counterparties to such contracts, triggering payment delays or defaults,
which could result in a negative impact on Beni Stabili`s financial condition and results of operations.
It should be noted that the Group operates on a continuing and permanent basis with primary counterparties
with an acceptable credit rating, thus limiting the related credit risk.
Risks linked to covenants and other undertakings stipulated in certain credit agreements
Some credit contracts signed by Beni Stabili contain commitments or covenants that the Issuer undertakes to
respect. If Beni Stabili were to breach one of its financial undertakings and fail to remedy such breach within
the contractually stipulated time period, the lenders could demand early repayment of the debt and possibly
seize any collateral backing the debt. Consequently, any failure to meet its financial undertakings could have
an adverse impact on Beni Stabili` financial condition, its results of operations, and its flexibility in
conducting business and pursuing its development.
The Group is exposed to fluctuations in the rate of inflation
Most lease contracts with tenants are inflation-linked, providing for an increase in rent by a certain percentage
based on price inflation. Fluctuations in the level of inflation are largely out of the control of the Group. As a
consequence, the Issuer may not be able to forecast the rental prices for the future and this could have a
material adverse impact on the Group`s financial condition and results of operations.

9