Obligation Hellenic National Bank 1.85% ( XS1860479077 ) en EUR

Société émettrice Hellenic National Bank
Prix sur le marché 100 %  ⇌ 
Pays  Grece
Code ISIN  XS1860479077 ( en EUR )
Coupon 1.85% par an ( paiement annuel )
Echéance 28/07/2023 - Obligation échue



Prospectus brochure de l'obligation National Bank of Greece XS1860479077 en EUR 1.85%, échue


Montant Minimal /
Montant de l'émission /
Description détaillée La National Bank of Greece est une grande banque commerciale grecque, l'une des plus importantes du pays, offrant une large gamme de services bancaires aux particuliers et aux entreprises.

L'Obligation émise par Hellenic National Bank ( Grece ) , en EUR, avec le code ISIN XS1860479077, paye un coupon de 1.85% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 28/07/2023







BASE PROSPECTUS
NATIONAL BANK OF GREECE S.A.
(incorporated with limited liability in the Hellenic Republic)
15 billion Covered Bond Programme II
Under this 15 billion covered bond programme II (the "Programme"), National Bank of Greece S.A. (the "Issuer", "NBG" or the "Bank") may from time to time issue
bonds (the "Covered Bonds") denominated in any currency agreed between the Issuer and the relevant Dealer(s) (as defined below).
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 Act") on prospectuses for securities to approve this document as a base prospectus (the "Base Prospectus"). By approving this
base prospectus, the CSSF does not give any undertaking as to the economic and financial soundness of the operation or the quality or solvency of the Issuer in accordance
with Article 7(7) of the Luxembourg Act. Application has also been made to the Luxembourg Stock Exchange for Covered Bonds issued under the Programme to be admitted
to trading on the Bourse de Luxembourg, which is the Luxembourg Stock Exchange's regulated market (the "Luxembourg Stock Exchange's regulated market") for the
purposes of Directive 2014/65/EU ("MiFID II") and to be listed on the Official List of the Luxembourg Stock Exchange. This document comprises a base prospectus for the
purposes of Article 5.4 of Directive 2003/71/EC as amended (which includes amendments made by Directive 2010/73/EU to the extent that such amendments have been
implemented in a relevant Member State of the European Economic Area) (the "Prospectus Directive") but is not a base prospectus for the purposes of Section 12(a)(2) or
any other provision of or rule under the Securities Act.
References in this Base Prospectus to Covered Bonds being listed and all related references shall mean that such Covered Bonds are intended to be admitted to trading on
the Luxembourg Stock Exchange's regulated market and are intended to be listed on the official list of the Luxembourg Stock Exchange's regulated market.
The Programme also permits Covered Bonds to be issued on the basis that they will be admitted to listing, trading and/or quotation by any competent authority, stock
exchange and/or quotation system or to be admitted to listing, trading and/or quotation by such other or further competent authorities, stock exchanges and/or quotation
systems as may be agreed with the Issuer.
The maximum aggregate nominal amount of all Covered Bonds from time to time outstanding under the Programme will not exceed 15 billion (or its equivalent in other
currencies calculated as described herein). The payment of all amounts due in respect of the Covered Bonds will constitute direct and unconditional obligations of the
Issuer, having recourse to assets forming part of the cover pool (the "Cover Pool").
The Covered Bonds may be issued on a continuing basis to one or more of the Dealers specified under "General Description of the Programme" and any additional Dealer
appointed under the Programme from time to time, which appointment may be for a specific issue or on an ongoing basis (each a "Dealer" and together the "Dealers").
References in this Base Prospectus to the "relevant Dealer" shall, in the case of an issue of Covered Bonds being (or intended to be) subscribed by more than one Dealer,
be to the lead manager of such issue and, in relation to an issue of Covered Bonds subscribed by one Dealer, to such Dealer.
The price and amount of Covered Bonds to be issued under the Programme will be determined by the Issuer and each relevant Dealer at the time of issue in accordance
with prevailing market conditions. Notice of the aggregate nominal amount of Covered Bonds, interest (if any) payable in respect of Covered Bonds, the issue price of
Covered Bonds and any other terms and conditions not contained herein which are applicable to each Series or Tranche (as defined under "Terms and Conditions of the
Covered Bonds") of Covered Bonds will be set out in a separate document specific to that Series or Tranche called the final terms (each, a "Final Terms") which, with
respect to Covered Bonds to be listed on the official list of the Luxembourg Stock Exchange, will be delivered to the Luxembourg Stock Exchange on or before the date of
issue of such Series or Tranche of Covered Bonds.
Amounts payable on Floating Rate Covered Bonds will be calculated by reference to one of LIBOR, EURIBOR or another reference rate as specified in the relevant Final
Terms. As at the date of this Base Prospectus, the administrators of LIBOR and EURIBOR are not included in ESMA's register of administrators under Article 36 of the
Regulation (EU) No. 2016/1011 (the "Benchmarks Regulation"). As far as the Issuer is aware, the transitional provisions in Article 51 of the Benchmarks Regulation
apply, such that Intercontinental Exchange (in respect of LIBOR) and European Money Markets Institute (in respect of EURIBOR) are not currently required to obtain
authorisation/registration (or, if located outside the European Union, recognition, endorsement or equivalence).
The rating of certain Series of Covered Bonds to be issued under the Programme may be specified in the applicable Final Terms. Whether or not each credit rating applied
for in relation to a relevant Series of Covered Bonds will be issued by a credit rating agency established in the European Union and registered under Regulation (EU) No
1060/2009 (the "CRA Regulation") will be disclosed in the Final Terms. In general, European regulated investors are restricted from using a rating for regulatory purposes
if such rating is not issued by a credit rating agency established in the European Union and registered under the CRA Regulation unless the rating is provided by a credit
rating agency operating in the European Union before 7 June 2010 which has submitted an application for registration in accordance with the CRA Regulation and such
registration is not refused. The Covered Bonds issued under the Programme will have the rating set out in the applicable Final Terms by Moody's Investors Service Limited
or its successor ("Moody's"), by Fitch Ratings Limited or its successor ("Fitch") (or such other ratings that may be agreed by the Rating Agencies from time to time). A
credit rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, change or withdrawal at any time by the assigning rating
organisation.
Investing in Covered Bonds issued under the Programme involves certain risks. The principal risk factors that may affect the abilities of the Issuer to fulfil its obligations in
respect of the Covered Bonds are discussed under "Risk Factors" below. Investors should review and consider these risk factors carefully before purchasing any Covered
Bonds.
Arrangers
National Bank of Greece S.A.
UBS Investment Bank
Dealers
National Bank of Greece S.A.
UBS Investment Bank
The date of this Base Prospectus is 16 March 2018.
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The Issuer accepts responsibility for the information contained in this Base Prospectus and the Final Terms
for each Series or Tranche of Covered Bonds issued under the Programme and declares that, having taken all
reasonable care to ensure that such is the case, the information contained in this Base Prospectus and the Final
Terms is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect
its import.
Copies of each Final Terms (in the case of Covered Bonds to be admitted to the Luxembourg Stock
Exchange) will be available from the registered office of the Issuer and from the specified office of the
Paying Agents for the time being in London or in Luxembourg at the office of the Luxembourg Listing
Agent.
This Base Prospectus is to be read in conjunction with all documents which are deemed to be incorporated
herein by reference (see the section entitled Documents Incorporated by Reference below). This Base
Prospectus shall be read and construed on the basis that such documents are so incorporated and form part of
this Base Prospectus.
Each Series (as defined herein) of Covered Bonds may be issued without the prior consent of the holders of
any outstanding Covered Bonds (the "Covered Bondholders") subject to the terms and conditions set out
herein under "Terms and Conditions of the Covered Bonds" (the "Conditions") as completed by the Final
Terms. This Base Prospectus must be read and construed together with any supplements hereto and with any
information incorporated by reference herein and, in relation to any Series of Covered Bonds which is the
subject of Final Terms, must be read and construed together with the relevant Final Terms. All Covered
Bonds will rank pari passu and rateably without any preference or priority among themselves, irrespective
of their Series, except for their respective Issue Dates, Interest Commencement Dates and/or Issue Prices.
The Issuer confirmed to each Dealer named under "General Description of the Programme" below that this
Base Prospectus contains all information which is (in the context of the Programme, the issue, offering and
sale of the Covered Bonds) material; that such information is true and accurate in all material respects and is
not misleading in any material respect; that any opinions, predictions or intentions expressed herein are
honestly held or made and are not misleading in any material respect; that this Base Prospectus does not omit
to state any material fact necessary to make such information, opinions, predictions or intentions (in the
context of the Programme, the issue and the offering and sale of the Covered Bonds) not misleading in any
material respect; and that all proper enquiries have been made to verify the foregoing.
No person has been authorised to give any information or to make any representation not contained in or not
consistent with this Base Prospectus or any other document entered into in relation to the Programme or any
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
Dealer.
Neither the Arranger nor any Dealer nor the Trustee nor any of their respective affiliates have authorised the
whole or any part of this Base Prospectus and none of them makes any representation or warranty or accepts
any responsibility as to the accuracy or completeness of the information contained in this Base Prospectus.
Neither the delivery of this Base Prospectus or any Final Terms nor the offering, sale or delivery of any
Covered Bond shall, in any circumstances, create any implication that the information contained in this Base
Prospectus is true subsequent to the date hereof or the date upon which this Base Prospectus has been most
recently supplemented or that there has been no adverse change, or any event reasonably likely to involve any
adverse change, in the prospects or financial or trading position of the Issuer since the date thereof or, if later,
the date upon which this Base Prospectus has been most recently supplemented, or that any other information
supplied in connection with the Programme 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.
The distribution of this Base Prospectus, any document incorporated herein by reference and any Final Terms
and the offering, sale and delivery of the Covered Bonds in certain jurisdictions may be restricted by law.
Persons into whose possession this Base Prospectus or any Final Terms comes are required by the Issuer, and
each Dealer to inform themselves about and to observe any such restrictions. For a description of certain
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restrictions on offers, sales and deliveries of Covered Bonds and on the distribution of this Base Prospectus or
any Final Terms and other offering material relating to the Covered Bonds, see "Subscription and Sale". In
particular, Covered Bonds 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 U.S. tax law requirements. Subject to certain
exceptions, Covered Bonds may not be offered, sold or delivered within the United States or to U.S. persons.
Covered Bonds may be offered and sold outside the United States in reliance on Regulation S under the
Securities Act ("Regulation S").
IMPORTANT ­ EEA RETAIL INVESTORS: If the Final Terms in respect of any Covered Bonds include
a legend entitled "Prohibition of Sales to EEA Retail Investors", the Covered Bonds are not intended to be
offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to
any retail investor in the European Economic Area (the "EEA"). For these purposes, a retail investor means
a person who is one (or more) of: (i) a retail client, as defined in point (11) of Article 4(1) of Directive
2014/65/EU ("MiFID II"); or (ii) a customer within the meaning of Directive 2002/92/EC on insurance
mediation ("IMD"), where that customer would not qualify as a professional client as defined in point (10)
of Article 4(1) of MiFID II. Consequently, no key information document required by Regulation (EU) No
1286/2014 (the "PRIIPs Regulation") for offering or selling the Covered Bonds or otherwise making them
available to retail investors in the EEA has been prepared and therefore offering or selling the Covered
Bonds or otherwise making them available to any retail investor in the EEA may be unlawful under the
PRIIPS Regulation.
MiFID II PRODUCT GOVERNANCE/TARGET MARKET ­ The Final Terms in respect of any Covered
Bonds will include a legend entitled "MiFID II Product Governance" which will outline the target market
assessment in respect of the Covered Bonds and which channels for distribution of the Covered Bonds are
appropriate. Any person subsequently offering, selling or recommending the Covered Bonds (a
"Distributor") should take into consideration the target market assessment; however, a Distributor subject to
MiFID II is responsible for undertaking its own target market assessment in respect of the Covered Bonds (by
either adopting or refining the target market assessment) and determining appropriate distribution channels.
A determination will be made in relation to each issue about whether, for the purpose of the MiFID Product
Governance rules under EU Delegated Directive 2017/593 (the "MiFID Product Governance Rules"), any
Dealer subscribing for any Covered Bonds is a manufacturer in respect of such Covered Bonds, but otherwise
neither the Arrangers nor the Dealers nor any of their respective affiliates will be a manufacturer for the
purpose of the MiFID Product Governance Rules.
Neither this Base Prospectus, any supplement thereto, nor any Final Terms constitutes an offer or an
invitation to subscribe for or purchase any Covered Bonds and should not be considered as a recommendation
by the Issuer, the Arranger, any Dealer, the Trustee or any of them that any recipient of this Base Prospectus
or any Final Terms should subscribe for or purchase any Covered Bonds. Each recipient of this Base
Prospectus or any Final Terms shall be taken to have made its own investigation and appraisal of the
condition (financial or otherwise) of the Issuer.
The maximum aggregate principal amount of Covered Bonds outstanding at any one time under the
Programme will not exceed 15 billion (and for this purpose, the principal amount outstanding of any
Covered Bonds denominated in another currency shall be converted into euro at the date of the agreement to
issue such Covered Bonds (calculated in accordance with the provisions of the Programme Agreement)). The
maximum aggregate principal amount of Covered Bonds which may be outstanding at any one time under the
Programme may be increased from time to time, subject to compliance with the relevant provisions of the
Programme Agreement as defined under "Subscription and Sale".
In this Base Prospectus, unless otherwise specified, references to a "Member State" are references to a
Member State of the European Economic Area and references to "", "EUR" or "euro" are to the single
currency introduced at the start of the third stage of European Economic and Monetary Union ("EMU")
pursuant to the Treaty establishing the European Community.
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In this Base Prospectus, all references to "Greece" or to the "Greek State" are to the Hellenic Republic.
This Base Prospectus has been prepared on the basis that any offer of Covered Bonds in any Member State
of the European Economic Area which has implemented the Prospectus Directive (2003/71/EC) as amended
(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
Covered Bonds. Accordingly any person, making or intending to make an offer in that Relevant Member
State of Covered Bonds which are the subject of an offering or placement contemplated in this Base
Prospectus as completed by Final Terms in relation to the offer of those Covered Bonds, may only do so in
circumstances in which no obligation arises for the Issuer, the Arranger or any Dealer 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, the Arranger nor
any Dealer has authorised, nor do they authorise, the making of any offer of Covered Bonds in
circumstances in which an obligation arises for the Issuer, the Arranger or any Dealer to publish or
supplement a prospectus for such offer.
ALTERNATIVE PERFORMANCE MEASURES
This Base Prospectus contains references to certain performance measures which, although not recognised as
financial measures under International Financial Reporting Standards as adopted by the European Union
("IFRS"), are used by the management of the Issuer to monitor the Group's financial and operating
performance. In particular:
(i).
Adjusted loans. The Group defines "adjusted loans" or "adjusted loans and advances to customers", as
loans and advances to customers excluding the amortising 30 year loan to the Hellenic Republic with a
principal amount of 5.4 billion expiring in September 2037. The Group defines "adjusted loans before
allowance for impairment" as loans and advances to customers before allowance for impairment on
loans and advances to customers and excluding the amortising 30-year loan to the Hellenic Republic.
Adjusted loans amounted to 35,470 million, 39,126 million and 61,481 million as at 31 December
2016, 2015 and 2014, respectively and to 32,781 million as at 30 June 2017. Adjusted loans before
allowance for impairment amounted to 46,927 million, 51,969 million and 72,055 million as at 31
December 2016, 2015 and 2014, respectively and to 43,749 million as at 30 June 2017;
(ii).
Common Equity Tier 1 ("CET1") ratio. The Group defines CET1 ratio as CET1 capital, as defined
by Regulation No. 575/2013, and based on the transitional rules over Risk Weighted Assets ("RWAs");
(iii). Loans-to-Deposits Ratio. The Group defines Loans-to-Deposits Ratio as net adjusted loans and
advances to customers over due to customers, at the end of the period;
(iv). Non-Performing Exposures ("NPE"). The Group defines NPEs, according to EBA ITS Technical
Standards on Forbearance and Non-Performing Exposures, as exposures that satisfy either or both of
the following criteria:
a) material exposures which are more than 90 days past due; and
b) the debtor is assessed as unlikely to pay its credit obligations in full without realisation of
collateral, regardless of the existence of any past due amount or of the number of days past due;
(v).
NPE ratio. The Group defines NPE ratio as NPEs divided by adjusted loans before allowance for
impairment at the end of the period;
(vi). Non-Performing Loans ("NPLs"). The Group defines NPLs as loans and advances to customers that
are in arrears for 90 days or more;
4


(vii). 90 Days Past Due Ratio. The Group defines 90 Days Past Due Ratio as Adjusted loans more than 90
days past due divided by adjusted loans before allowance for impairment at the end of the period.
Investors should be aware that:
·
these financial measures are not recognised as a measure of performance under IFRS;
·
they should not be recognised as an alternative to operating income or net income or any other
performance measures recognised as being in accordance with IFRS or any other generally accepted
accounting principles; and
·
they are used by management to monitor the underlying performance of the business and operations but
are not indicative of the historical operating results of the Issuer, nor are they meant to be predictive of
future results.
Furthermore, since companies do not all calculate these measures in an identical manner, the Issuer's
presentation may not be consistent with similar measures used by other companies. Therefore, undue reliance
should not be placed on any such data.
In connection with the issue of any Series or Tranche of Covered Bonds, the Dealer or Dealers (if any)
named as the Stabilising Manager(s) (or persons acting on behalf of any Stabilising Manager(s)) in the
applicable Final Terms may over allot such Series or Tranche of Covered Bonds or effect transactions
with a view to supporting the market price of the Covered Bonds at a level higher than that which
might otherwise prevail. However, there is no assurance that the Stabilising Manager(s) (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
relevant Series of Covered Bonds 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 of the relevant Series or Tranche of Covered
Bonds and 60 days after the date of the allotment of the relevant Series or Tranche of Covered Bonds.
Any stabilisation or over allotment must be conducted by the relevant Stabilising Manager(s) (or
person(s) acting on behalf of any Stabilising Manager(s)) in accordance with all applicable laws and
rules.
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TABLE OF CONTENTS
Page
RISK FACTORS ................................................................................................................................................ 7
GENERAL DESCRIPTION OF THE PROGRAMME ................................................................................... 64
DOCUMENTS INCORPORATED BY REFERENCE ................................................................................... 94
TERMS AND CONDITIONS OF THE COVERED BONDS ........................................................................ 99
FORMS OF THE COVERED BONDS ......................................................................................................... 133
FORM OF FINAL TERMS ........................................................................................................................... 135
INSOLVENCY OF THE ISSUER ................................................................................................................. 149
OVERVIEW OF THE GREEK COVERED BOND LEGISLATION .......................................................... 150
THE ISSUER ................................................................................................................................................. 153
BUSINESS OVERVIEW ............................................................................................................................... 166
RISK MANAGEMENT ................................................................................................................................. 189
DIRECTORS AND MANAGEMENT .......................................................................................................... 202
REGULATION AND SUPERVISION OF BANKS IN GREECE ............................................................... 219
THE MACROECONOMIC ENVIRONMENT IN THE GROUP'S MARKET ........................................... 264
THE MORTGAGE AND HOUSING MARKET IN GREECE .................................................................... 281
DESCRIPTION OF PRINCIPAL DOCUMENTS ........................................................................................ 290
TAXATION ................................................................................................................................................... 308
SUBSCRIPTION AND SALE ....................................................................................................................... 312
GENERAL INFORMATION ........................................................................................................................ 316
6


RISK FACTORS
The Issuer believes that the following factors may affect its ability to fulfil its obligations in respect of the
Covered Bonds issued under the Programme. All of these factors are contingencies which 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.
In addition, factors which are material for the purpose of assessing the market risks associated with Covered
Bonds issued under the Programme are also described below. It is not possible to identify all risks or to
determine which risks are most likely to occur, as the Issuer may not be aware of all relevant risks and
certain risks which it currently deems not to be material may become material as a result of the occurrence of
events outside the Issuer's control.
The Issuer believes that the factors described below represent the principal risks inherent in investing in
Covered Bonds issued under the Programme, but the inability of the Issuer to pay interest, principal or other
amounts on or in connection with any Covered Bonds may occur for other unknown reasons and the Issuer
does not represent that the statements below regarding the risks of holding any Covered Bonds are
exhaustive. 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. If potential investors are in
doubt about the contents of this Base Prospectus they should consult with an appropriate professional adviser
to make their own legal, tax, accounting and financial evaluation of the merits and risk of investment in such
Covered Bonds.
Prospective investors should read the entire Base Prospectus. Words and expressions defined in the "Terms
and Conditions of the Covered Bonds" below or elsewhere in this Base Prospectus have the same meanings
in this section. Investing in the Covered Bonds involves certain risks. Prospective investors should consider,
among other things, the following:
Factors that may affect the Issuer's ability to fulfil its obligations under Covered Bonds issued under
the Programme
The Covered Bonds will be obligations of the Issuer only
The Covered Bonds will be solely obligations of the Issuer and will not be obligations of or guaranteed by
the Trustee, the Asset Monitor, the Account Bank, the Agents, the Hedging Counterparties, the Arranger,
the Dealer or the Listing Agent (as defined below). No liability whatsoever in respect of any failure by the
Issuer to pay any amount due under the Covered Bonds shall be accepted by any of the Arranger, the
Dealer, the Hedging Counterparties the Trustee, the Agents, the Account Bank, any company in the same
group of companies as such entities or any other party to the transaction documents relating to the
Programme.
Maintenance of the Cover Pool
Pursuant to the Greek Covered Bond Legislation, the Cover Pool is subject to a number of Statutory Tests set
out in the Secondary Covered Bond Legislation. Failure of the Issuer to take prompt remedial action to cure
any breach of these tests will result in the Issuer being unable to issue further Covered Bonds and any failure
to satisfy the Statutory Tests may have an adverse effect on the ability of the Issuer to meet its payment
obligations in respect of the Covered Bonds.
Pursuant to the Servicing and Cash Management Deed after the occurrence of an Issuer Event the Cover
Pool is subject to an Amortisation Test. The Amortisation Test is intended to ensure that the Cover Pool
Assets are sufficient to meet the obligations under all Covered Bonds outstanding together with senior
expenses that rank in priority or pari passu with amounts due on the Covered Bonds. Failure to satisfy the
Amortisation Test on any Calculation Date following an Issuer Event will constitute a Cover Pool Event of
7


Default, thereby entitling the Trustee to accelerate the Covered Bonds subject to and in accordance with the
Conditions and the Trust Deed.
Pursuant to the Servicing and Cash Management Deed after the occurrence of an Issuer Event the Cover
Pool is also subject to an Enhanced Amortisation Test. If following the occurrence of an Issuer Event the
Enhanced Amortisation Test is not met, all Cover Pool Available Funds shall be applied to repay all Series
of Covered Bonds (which shall then become Pass Through Covered Bonds) subject to and in accordance
with the relevant Priority of Payments.
Please see "Risks related to the Covered Bonds - Extension of the Covered Bonds' maturity under the
Conditions."
Factors that may affect the realisable value of the Cover Pool or any part thereof
The realisable value of Loans and their Related Security comprised in the Cover Pool may be reduced by:
(a)
default by borrowers (each borrower being, in respect of a Loan Asset, the individual specified as
such in the relevant mortgage terms together with each individual (if any) who assumes from time to
time an obligation to repay such Loan Asset (the "Borrower") in payment of amounts due on their
Loans;
(b)
changes to the lending criteria of the Issuer; and
(c)
possible regulatory changes by the regulatory authorities;
Each of these factors is considered in more detail below. However, it should be noted that the Statutory Tests,
the Amortisation Test and the Eligibility Criteria are intended to ensure that there will be an adequate amount
of Loan Assets in the Cover Pool to enable the Issuer to repay the Covered Bonds following service of a
Notice of Default and accordingly it is expected (but there is no assurance) that the Loan Assets could be
realised for sufficient value to enable the Issuer to meet its obligations under the Covered Bonds.
Default by Borrowers in paying amounts due on their Loans
Borrowers may default on their obligations under the Loans in the Cover Pool. Defaults may occur for a
variety of reasons. The Loans are affected by credit, liquidity and interest rate risks. Various factors
influence mortgage delinquency rates, prepayment rates, repossession frequency and the ultimate payment of
interest and principal, such as changes in the national or international economic climate, regional economic
or housing conditions, changes in tax laws, interest rates, inflation, the availability of financing, yields on
alternative investments, political developments and government policies. Other factors in Borrowers'
individual, personal or financial circumstances may affect the ability of Borrowers to repay the Loans. Loss
of earnings, illness, divorce and other similar factors may lead to an increase in delinquencies by and
bankruptcies of Borrowers and could ultimately have an adverse impact on the ability of Borrowers to repay
the Loans. In addition, the ability of a Borrower to sell a property given as security for a Loan at a price
sufficient to repay the amounts outstanding under that Loan will depend upon a number of factors, including
the availability of buyers for that property, the value of that property and property values in general at the
time.
Changes to the Lending Criteria of the Issuer
Each of the Loans originated by the Issuer will have been originated in accordance with its Lending Criteria at
the time of origination. It is expected that the Issuer's Lending Criteria will generally consider, inter alia, type
of property, term of loan, age of applicant, the loan-to-value ratio, status of applicant and credit history. The
Issuer retains the right to revise its Lending Criteria from time to time but would do so only to the extent that
such a change would be acceptable to a reasonable, prudent mortgage lender. If the Lending Criteria change
in a manner that affects the creditworthiness of the Loans, that may lead to increased defaults by Borrowers
8


and may affect the realisable value of the Cover Pool, or part thereof, and the ability of the Issuer to make
payments under the Covered Bonds.
Sale of Loans and their Related Security following the occurrence of an Issuer Event
Following the occurrence of an Issuer Event, the Servicer shall be obliged to sell in whole or in part the Loan
Assets in respect of the relevant Series of Pass Through Covered Bonds, in accordance with the Servicing and
Cash Management Deed. The proceeds from any such sale will be credited to the Transaction Account and
applied in accordance with the applicable Priority of Payments. There is no guarantee that the Servicer will be
able to sell in whole or in part the Loan Assets as the Servicer may not be able to find a buyer at the time it is
obliged to sell.
The Issuer will have the right to prevent the sale of a Loan Asset to third parties by removing the Loan Asset
made subject to sale from the Cover Pool and transferring within ten Athens Business Days from the receipt
of the offer letter, to the Transaction Account, an amount equal to the price set forth in such offer letter,
subject to the provision of a solvency certificate.
No representations or warranties to be given by the Servicer if Loan Assets are to be sold
Following an Issuer Event, the Servicer will be obliged to sell Loan Assets to third party purchasers (subject
in certain circumstances to a right of pre-emption in favour of the Issuer) pursuant to the terms of the
Servicing and Cash Management Deed. In respect of any sale of Loan Assets to third parties, however, the
Servicer will not be permitted to give representations and warranties or indemnities in respect of those Loan
Assets. There is no assurance that the Issuer would give any representations and warranties or indemnities in
respect of the Loan Assets. Any representations and warranties previously given by the Issuer in respect of the
Loan Assets in the Cover Pool may not have value for a third party purchaser if the Issuer is then insolvent.
Accordingly, there is a risk that the realisable value of the Loan Assets could be adversely affected by the lack
of representations and warranties or indemnities. See "Description of Principal Documents ­ The Servicing
and Cash Management Deed".
Reliance on Hedging Counterparties
To provide a hedge against possible variances in the rates of interest payable on the Loans in the Cover Pool
(which may, for instance, include discounted rates of interest, fixed rates of interest or rates of interest which
track a base rate and other variable rates of interest) and EURIBOR for 1, 3 or 6 month euro deposits, the
Issuer may enter into an Interest Rate Swap with the Interest Rate Swap Provider in respect of each Series of
Covered Bonds under the Interest Rate Swap Agreement.
In addition, to provide a hedge against interest rate, currency and/or other risks in respect of amounts received
by the Issuer under the Loans in the Cover Pool and the Interest Rate Swaps and amounts payable by the
Issuer under the Covered Bonds, and, if applicable, any FX Swap and amounts payable by the Issuer under
the Covered Bonds, the Issuer may enter into a Covered Bond Swap with a Covered Bond Swap Provider in
respect of a Series of Covered Bonds under the Covered Bond Swap Agreement.
If the Issuer fails to make timely payments of amounts due under any Hedging Agreement, then it will have
defaulted under that Hedging Agreement. A Hedging Counterparty is only obliged to make payments to the
Issuer as long as the Issuer complies with its payment obligations under the relevant Hedging Agreement. If the
Hedging Counterparty is not obliged to make payments or if it defaults on its obligations to make payments of
amounts in the relevant currency equal to the full amount to be paid to the Issuer on the due date for payment
under the relevant Hedging Agreement, the Issuer will be exposed to any changes in the relevant currency
exchange rates to Euro and to any changes in the relevant rates of interest. Unless a replacement swap is
entered into, the Issuer may have insufficient funds to make payments under the Covered Bonds.
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If a Hedging Agreement terminates, then the Issuer (or the Servicer on its behalf) may be obliged to make a
termination payment to the relevant Hedging Counterparty. There can be no assurance that the Issuer (or the
Servicer on its behalf) will have sufficient funds available to make a termination payment under the relevant
Hedging Agreement, nor can there be any assurance that the Issuer will be able to enter into a replacement
swap agreement, or if one is entered into, that the credit rating of the replacement swap counterparty will be
sufficiently high to prevent a downgrade of the then current ratings of the Covered Bonds by the Rating
Agencies.
If the Issuer is obliged to pay a termination payment under any Hedging Agreement, such termination
payment will rank ahead of amounts due on the Covered Bonds (in respect of the Interest Rate Swaps) and
pari passu with amounts due on the Covered Bonds (in respect of the Covered Bond Swaps), except where
default by, or downgrade of, the relevant Hedging Counterparty has caused the relevant Swap Agreement to
terminate.
Conflicts of Interest
Certain parties to this Transaction act in more than one capacity. The fact that these entities fulfil more than
one role could lead to a conflict between the rights and obligations of these entities in one capacity and the
rights and obligations of these entities in another capacity. In addition, this could also lead to a conflict
between the interests of these entities and the interests of the Covered Bondholders. Any such conflict may
adversely affect the ability of the Issuer to make payments of principal and/or interest in respect of the
Covered Bonds.
Differences in timings of obligations of the Issuer and the Covered Bond Swap Provider under the Covered
Bond Swaps
With respect to the Covered Bond Swaps that the Issuer may enter into, the Issuer (or the Servicer on its
behalf) will, periodically, pay or provide for payment of an amount to each corresponding Covered Bond
Swap Provider based on EURIBOR for Euro deposits for the agreed period. The Covered Bond Swap
Provider may not be obliged to make corresponding swap payments to the Issuer under a Covered Bond Swap
until amounts are due and payable by the Issuer under the Covered Bonds. If a Covered Bond Swap Provider
does not meet its payment obligations to the Issuer under the relevant Covered Bond Swap Agreement or such
Covered Bond Swap Provider does not make a termination payment that has become due from it to the Issuer
under the Covered Bond Swap Agreement, the Issuer may have a larger shortfall in funds with which to make
payments under the Covered Bonds than if the Covered Bond Swap Provider's payment obligations coincided
with the Issuer's payment obligations under the Covered Bond Swap. Hence, the difference in timing between
the obligations of the Issuer and the obligations of the Covered Bond Swap Providers under the Covered
Bond Swaps may affect the Issuer's ability to make payments with respect to the Covered Bonds. A Covered
Bond Swap Provider may be required, pursuant to the terms of the relevant Covered Bond Swap Agreement,
to post collateral with the Issuer if the relevant rating of the Covered Bond Swap Provider is downgraded by a
Rating Agency below the rating specified in the relevant Covered Bond Swap Agreement.
Change of counterparties
The parties to the Transaction Documents who receive and hold moneys pursuant to the terms of such
documents (such as the Account Banks) are required to satisfy certain criteria in order that they can continue
to receive and hold moneys.
These criteria include requirements in relation to the long-term or short-term issuer default ratings assigned
by Fitch and short-term, unguaranteed and unsecured credit ratings ascribed to such party by Moody's and
DBRS. If the party concerned ceases to satisfy the applicable criteria, including the ratings criteria detailed
above, then the rights and obligations of that party (including the right or obligation to receive moneys on
behalf of the Issuer) may be required to be transferred to another entity which does satisfy the applicable
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