Obligation Iberdrola Energía 1.874% ( XS2244941063 ) en EUR

Iberdrola Energía

99.7 % ▲

Espagne

XS2244941063 ( en EUR )

1.874% par an ( paiement annuel )

Perpétuelle

Prospectus brochure de l'obligation Iberdrola XS2244941063 en EUR 1.874%, échéance Perpétuelle

28/04/2026 ( Dans 55 jours )

Iberdrola est une entreprise énergétique multinationale espagnole, l'une des plus grandes au monde, active dans la production, le transport et la distribution d'énergie, notamment éolienne, solaire et nucléaire.

L'obligation perpétuelle d'Iberdrola (XS2244941063), émise en Espagne et libellée en EUR, affiche actuellement un prix de marché de 98,43% de sa valeur nominale, offrant un taux d'intérêt de 1,874% avec une fréquence de paiement annuelle.

Offering Circular dated 22 October 2020
IBERDROLA INTERNATIONAL B.V.
(incorporated with limited liability in the Netherlands and having its corporate domicile in Amsterdam)
1,600,000,000 5.5 Year Non-Call Undated Deeply Subordinated Reset Rate Guaranteed Securities
1,400,000,000 8.5 Year Non-Call Undated Deeply Subordinated Reset Rate Guaranteed Securities
unconditionally and irrevocably guaranteed on a subordinated basis by
IBERDROLA, S.A.
(incorporated with limited liability in the Kingdom of Spain)
Issue Price 100.00 per cent.
The 1,600,000,000 5.5 Year Non-Call Undated Deeply Subordinated Reset Rate Guaranteed Securities (the "5.5 Year Non-Call Securities") and the 1,400,000,000 8.5 Year Non-Call Undated
Deeply Subordinated Reset Rate Guaranteed Securities (the "8.5 Year Non-Call Securities", and together with the 5.5 Year Non-Call Securities, the "Securities") are issued by Iberdrola
International B.V. (the "Issuer" or "Iberdrola International") and unconditionally and irrevocably guaranteed on a subordinated basis by Iberdrola, S.A. (the "Guarantee", and the "Guarantor" or
"Iberdrola", respectively).
The 5.5 Year Non-Call Securities will bear interest on their principal amount (i) from (and including) the Issue Date to (but excluding) the First Reset Date at a rate of 1.874 per cent. per annum;
and (ii) from (and including) the First Reset Date (as defined in the section headed "Terms and Conditions of the 5.5 Year Non-Call Securities" (the "5.5 Year Non-Call Conditions")), at, in respect
of each Reset Period, the relevant 5 year Swap Rate plus: (A) in respect of the Reset Period commencing on the First Reset Date, 2.321 per cent. per annum; (B) in respect of the Reset Periods
commencing on 28 April 2031 to (but excluding) 28 April 2046, 2.571 per cent. per annum; and (C) in respect of any other Reset Period, 3.321 per cent. per annum, all as determined by the Agent
Bank. Interest will be payable annually in arrear on 28 April in each year (each an Interest Payment Date as defined in the 5.5 Year Non-Call Conditions), commencing on 28 April 2021. If the
Issuer does not elect to redeem the 5.5 Year Non-Call Securities in accordance with Condition 6(f) following the occurrence of a Change of Control Event (as defined in the 5.5 Year Non-Call
Conditions), the then Prevailing Interest Rate (as defined in the 5.5 Year Non-Call Conditions), and each subsequent Prevailing Interest Rate otherwise determined in accordance with the 5.5 Year
Non-Call Conditions, on the 5.5 Year Non-Call Securities shall be increased by 5 per cent. per annum with effect from (and including) the date on which the Change of Control Event occurred.
See Condition 4(h) (Step-up after Change of Control Event).
The 8.5 Year Non-Call Securities will bear interest on their principal amount (i) from (and including) the Issue Date to (but excluding) the First Reset Date at a rate of 2.250 per cent. per annum;
and (ii) from (and including) the First Reset Date (as defined in the section headed "Terms and Conditions of the 8.5 Year Non-Call Securities" (the "8.5 Year Non-Call Conditions")), at, in respect
of each Reset Period, the relevant 5 year Swap Rate plus: (A) in respect of the Reset Period commencing on the First Reset Date, 2.574 per cent. per annum; (B) in respect of the Reset Periods
commencing on 28 April 2034 to (but excluding) 28 April 2049, 2.824 per cent. per annum; and (C) in respect of any other Reset Period, 3.574 per cent. per annum, all as determined by the Agent
Bank. Interest will be payable annually in arrear on 28 April in each year (each an Interest Payment Date as defined in the 8.5 Year Non-Call Conditions), commencing on 28 April 2021. If the
Issuer does not elect to redeem the 8.5 Year Non-Call Securities in accordance with Condition 6(f) following the occurrence of a Change of Control Event (as defined in the 8.5 Year Non-Call
Conditions), the then Prevailing Interest Rate (as defined in the 8.5 Year Non-Call Conditions), and each subsequent Prevailing Interest Rate otherwise determined in accordance with the 8.5 Year
Non-Call Conditions, on the 8.5 Year Non-Call Securities shall be increased by 5 per cent. per annum with effect from (and including) the date on which the Change of Control Event occurred.
See Condition 4(h) (Step-up after Change of Control Event).
The 5.5 Year Non-Call Conditions and the 8.5 Year Non-Call Conditions together shall be referred to as the "Conditions".
The Issuer may, at its sole discretion, elect to defer (in whole or in part) any payment of interest on the Securities, subject to limited exceptions, as more particularly described in Condition 5
(Optional Interest Deferral). Any amounts so deferred, together with further interest accrued thereon (at the Prevailing Interest Rate applicable from time to time), shall constitute Arrears of
Interest (as defined in the Conditions). The Issuer may pay outstanding Arrears of Interest, in whole or in part, at any time in accordance with the Conditions. Notwithstanding the foregoing, the
Issuer shall pay any outstanding Arrears of Interest in whole, but not in part, on the first occurring Mandatory Settlement Date following the Interest Payment Date on which any outstanding
Arrears of Interest was first deferred, all as more particularly described in Condition 5(c) (Mandatory Settlement of Arrears of Interest).
The Securities will be undated securities in respect of which there is no specific maturity date and shall be redeemable (at the option of the Issuer) in whole, but not in part, on any date during the
period commencing on (and including) (i) 28 January 2026 in respect of the 5.5 Year Non-Call Securities and (ii) 28 January 2029 in respect of the 8.5 Year Non-Call Securities and ending on
(and including) the First Reset Date and on any Interest Payment Date thereafter, at their principal amount together with any accrued and unpaid interest up to (but excluding) the Redemption Date
(as defined in the Conditions) and any outstanding Arrears of Interest. The Issuer furthermore has the right to redeem the Securities (in whole but not in part) at the Make-whole Redemption
Amount (as more particularly described in Condition 6). In addition, upon the occurrence of an Accounting Event, a Capital Event, a Change of Control Event, a Tax Event, a Withholding Tax
Event or a Substantial Purchase Event (each such term as defined in the Conditions), the Securities will be redeemable (at the option of the Issuer) in whole, but not in part, at the prices set out,
and as more particularly described, in Condition 6 (Redemption and Purchase).
The Securities will constitute direct, unsecured and subordinated obligations of the Issuer and will at all times rank pari passu and without any preference among themselves and with the (i)
1,000,000,000 Undated Deeply Subordinated Reset Rate Guaranteed Securities, (ii) 700,000,000 Undated Deeply Subordinated Reset Rate Guaranteed Securities and (iii) 800,000,000 Undated
Deeply Subordinated Reset Rate Guaranteed Securities, in each case, issued by Iberdrola International B.V. and unconditionally and irrevocably guaranteed on a subordinated basis by Iberdrola,
S.A., all as more particularly described in Condition 2 (Status and Subordination of the Securities and Coupons). The payment obligations of the Guarantor under the Guarantee will constitute
direct, unsecured and subordinated obligations of the Guarantor and will at all times rank pari passu and without any preference among themselves. In the event of the Guarantor being declared
in insolvency under Spanish insolvency law, the rights and claims of Holders (as defined in the Conditions) against the Guarantor in respect of or arising under the Guarantee will rank, as against
the other obligations of the Guarantor, in the manner more particularly described in Condition 3 (Guarantee, Status and Subordination of the Guarantee).
Payments in respect of the Securities will be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever
nature of the Netherlands or the Kingdom of Spain, unless such withholding or deduction is required by law. In the event that any such withholding or deduction is made, additional amounts will
be payable by the Issuer or, as the case may be, the Guarantor, subject to certain exceptions as are more fully described in Condition 8 (Taxation). See "Taxation".
Application has been made to admit the Securities to the official list of the Luxembourg Stock Exchange (the "Official List") and to trading on the Luxembourg Stock Exchange's Euro MTF
Market (the "Euro MTF Market"). The Euro MTF Market is not a regulated market for the purposes of Directive 2014/65/EU (as amended, "MiFID II") of the European Parliament and of the
Council on markets in financial instruments. References in this Offering Circular to the Securities being "listed" (and all related references) shall mean that the Securities have been admitted to
the Official List and admitted to trading on the Euro MTF Market.
The Securities are in bearer form and in the denomination of 100,000 each. The relevant Securities will initially be represented by a temporary global security (each a "Temporary Global
Security"), without interest coupons or talons, which will be deposited with a common depositary on behalf of Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking, S.A. ("Clearstream,
Luxembourg") on or about the Issue Date. Interests in each Temporary Global Security will be exchangeable for interests in a permanent global security (each a "Permanent Global Security" and
together with each Temporary Global Security, the "Global Securities") as set out in each Temporary Global Security. Each Permanent Global Security will be exchangeable for definitive Securities
(the "Definitive Securities") as set out in the Permanent Global Security. See "Summary of Provisions relating to the Securities while in Global Form".
The Securities are expected to be rated BBB- by Standard & Poor's Credit Market Services Europe Limited ("S&P"), Baa3 by Moody's Investors Service Limited ("Moody's") and BBB by Fitch
Ratings Limited ("Fitch"). A 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.
Each of S&P, Moody's and Fitch is established in the European Union or the UK and is registered under Regulation (EC) No 1060/2009 (the "CRA Regulation").
Prospective investors should have regard to the factors described under the section headed "Risk Factors" in this Offering Circular.

Global Coordinators and
Structuring Agents to the Issuer and Guarantor
BNP PARIBAS
HSBC
Joint Bookrunners
Banco Sabadell
Bankia
Bankinter
Barclays
BNP PARIBAS
BofA Securities
Crédit Agricole CIB
Deutsche Bank
HSBC
J.P. Morgan
Mizuho Securities
Morgan Stanley
MUFG
NatWest Markets
RBC Capital Markets
Scotiabank
SMBC Nikko
UniCredit

IMPORTANT INFORMATION
This Offering Circular constitutes a prospectus for the purposes of the Luxembourg Act dated July 16, 2019 on
Prospectuses for securities. This document does not constitute a prospectus for the purposes of Regulation (EU)
2017/1129, as amended. The Issuer and the Guarantor accept responsibility for the information contained in
this Offering Circular. To the best of the knowledge of the Issuer and the Guarantor (each having taken all
reasonable care to ensure that such is the case), the information contained in this Offering Circular is in
accordance with the facts and does not omit anything likely to affect the import of such information.
This Offering Circular may only be used for the purposes for which it has been published.
This Offering Circular is to be read in conjunction with all the documents which are incorporated herein by
reference (see "Documents Incorporated by Reference"). This Offering Circular shall be read and construed on
the basis that such documents are incorporated and form part of this Offering Circular.
This Offering Circular does not constitute an offer to sell or the solicitation of an offer to buy any of the
Securities in any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such
jurisdiction. The offer or sale of Securities may be restricted by law in certain jurisdictions. None of the Issuer,
the Guarantor or the Joint Bookrunners (as defined in "Subscription and Sale" below) represents that this
Offering Circular may be lawfully distributed, or that the Securities may be lawfully offered, in compliance
with any applicable registration or other requirements in any such jurisdiction, or pursuant to an exemption
available thereunder, or assume any responsibility for facilitating any such distribution or offering. In particular,
no action has been taken by the Issuer, the Guarantor or the Joint Bookrunners which is intended to permit a
public offering of the Securities or distribution of this Offering Circular in any jurisdiction where action for that
purpose is required. Accordingly, no Securities may be offered or sold, directly or indirectly, and neither this
Offering Circular nor any advertisement or other offering material may be distributed or published in any
jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations.
Persons into whose possession this Offering Circular or any Securities may come must inform themselves about,
and observe, any such restrictions on the distribution of this Offering Circular and the offering and sale of
Securities. In particular, there are restrictions on the distribution of this Offering Circular and the offer or sale
of Securities in the United States, the United Kingdom, the European Economic Area, Italy, the Kingdom of
Spain, Switzerland and Singapore, see "Subscription and Sale" below.
No person is or has been authorised to give any information or to make any representation not contained in or
not consistent with this Offering Circular and any information or representation not so contained must not be
relied upon as having been authorised by or on behalf of the Issuer, the Guarantor or the Joint Bookrunners.
Neither the delivery of this Offering Circular nor the offering, sale or delivery of any Securities shall, under any
circumstances, create any implication that there has been no change in the affairs of the Issuer or the Guarantor
since the date hereof or the date upon which this Offering Circular has been most recently amended or
supplemented or that there has been no adverse change in the financial position of the Issuer or the Guarantor
since the date hereof or the date upon which this Offering Circular has been most recently amended or
supplemented or that the information contained in it or any other information supplied in connection with the
Securities is correct as of any time subsequent to the date on which it is supplied or, if different, the date
indicated in the document containing the same. The Joint Bookrunners expressly do not undertake to review
the financial condition or affairs of the Issuer or the Guarantor during the life of the Securities or to advise any
investor in the Securities of any information coming to their attention.
The Joint Bookrunners have not independently verified the information contained herein. Accordingly, no
representation, warranty or undertaking, express or implied, is made and no responsibility or liability (whether
fiduciary, in tort or otherwise) is accepted by the Joint Bookrunners as to the accuracy or completeness of the
2

information contained or incorporated in this Offering Circular or any other information provided by the Issuer
or the Guarantor in connection with the Securities. The Joint Bookrunners accept no liability in relation to the
information contained or incorporated by reference in this Offering Circular or any other information provided
by the Issuer or the Guarantor in connection with the Securities.
To the fullest extent permitted by law, none of the Joint Bookrunners accepts any responsibility for any act or
omission of the Issuer or the Guarantor, or for the contents of this Offering Circular or for any other statements
made or purported to be made by any Joint Bookrunner or on their behalf in connection with the Issuer, the
Guarantor or the issue and offering of any Securities. Each of the Joint Bookrunners accordingly disclaims all
and any liability whether arising in tort or contract or otherwise which it might otherwise have in respect of any
act or omission of the Issuer or the Guarantor, or this Offering Circular or any such statement.
No person is or has been authorised by the Issuer or the Guarantor to give any information or to make any
representation not contained in or not consistent with this Offering Circular or any other information supplied
in connection with the offering of any Securities and, if given or made, such information or representation must
not be relied upon as having been authorised by the Issuer, the Guarantor or any Joint Bookrunner.
Neither this Offering Circular nor any other information supplied in connection with the Securities (a) is
intended to provide the basis of any credit or other evaluation or (b) should be considered as a recommendation
by the Issuer, the Guarantor or the Joint Bookrunners that any recipient of this Offering Circular or any other
information supplied in connection with the Securities should purchase any Securities. Each investor
contemplating purchasing any Securities should make its own independent investigation of the financial
condition and affairs, and its own appraisal of the creditworthiness, of the Issuer and/or the Guarantor. Neither
this Offering Circular nor any other information supplied in connection with the Securities constitutes an offer
or invitation by or on behalf of the Issuer or the Guarantor or the Joint Bookrunners to any person to subscribe
for or to purchase any Securities.
References in this section "Important Information" to a "Joint Bookrunner" shall include such entity in its
capacity as a Joint Bookrunner or Global Coordinator and Structuring Agent to the Issuer and the Guarantor as
well, as applicable.
The Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the
"Securities Act") and are subject to U.S. tax law requirements. Subject to certain exceptions, Securities may
not be offered, sold or delivered within the United States or to U.S. persons.
Unless otherwise specified or the context requires, references to "dollars", "U.S. dollars" and "U.S.$" are to
United States dollars and references to "euro" and "" are to the currency introduced at the start of the third
stage of European economic and monetary union pursuant to the Treaty establishing the European Community,
as amended.
In connection with the issue of the Securities, HSBC France (the "Stabilisation Manager") (or any person
acting on behalf of the Stabilisation Manager) may over-allot Securities or effect transactions with a view
to supporting the market price of the Securities at a level higher than that which might otherwise prevail.
However, stabilisation may not necessarily occur. Any stabilisation action may begin on or after the date
on which adequate public disclosure of the terms of the offer of the Securities is made and, if begun, may
cease at any time, but it must end no later than the earlier of 30 days after the issue date of the Securities
and 60 days after the date of the allotment of the Securities. Any stabilisation action or over-allotment
must be conducted by the Stabilisation Manager (or any person(s) acting on behalf of the Stabilisation
Manager) in accordance with all applicable laws and rules.
MIFID II product governance/Professional investors and ECPs only target market Solely for the purposes of
each manufacturer's product approval process, the target market assessment in respect of the Securities has led
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to the conclusion that: (i) the target market for the Securities is eligible counterparties and professional clients
only, each as defined in MiFID II; and (ii) all channels for distribution of the Securities to eligible counterparties
and professional clients are appropriate. Any person subsequently offering, selling or recommending the
Securities (a "distributor") should take into consideration the manufacturers' target market assessment;
however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in
respect of the Securities (by either adopting or refining the manufacturers' target market assessment) and
determining appropriate distribution channels.
PRIIPs Regulation/Prohibition of sales to EEA and UK retail investors The Securities 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 ("EEA") or in the United Kingdom (the "UK"). 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
MiFID II; or (ii) a customer within the meaning of Directive (EU) 2016/97, 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 (as amended, the "PRIIPs Regulation") for
offering or selling the Securities or otherwise making them available to retail investors in the EEA or in the UK
has been prepared and therefore offering or selling the Securities or otherwise making them available to any
retail investor in the EEA or in the UK may be unlawful under the PRIIPs Regulation.
Amounts payable under the Securities are calculated by reference to the 5 year Swap Rate which itself refers to
ICESWAP2, which is provided by the ICE Benchmark Administration ("IBA") and the Euro Interbank Offered
Rate ("EURIBOR"), which is provided by the European Money Markets Institute ("EMMI"). As at the date of
this Offering Circular, the IBA and the EMMI appear on the register of administrators and benchmarks
established and maintained by the European Securities and Markets Authority pursuant to article 36 of the
Benchmark Regulation (Regulation (EU) 2016/1011) (the "BMR").
NOTIFICATION UNDER SECTION 309B(1)(C) OF THE SECURITIES AND FUTURES ACT
(CHAPTER 289) OF SINGAPORE (THE SFA) the Securities are prescribed capital markets products (as
defined in the Securities and Futures (Capital Markets Products) Regulations 2018) and Excluded Investment
Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice
FAA-N16: Notice on Recommendations on Investment Products).
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Table of Contents
Page
Overview ..................................................................................................................................................... 6
Documents Incorporated By Reference....................................................................................................... 15
Risk Factors............................................................................................................................................... 19
Terms and Conditions of the 5.5 Year Non-Call Securities........................................................................... 45
Terms and Conditions of the 8.5 Year Non-Call Securities........................................................................... 72
Summary of Provisions relating to the Securities while in Global Form....................................................... 99
Form of Guarantee ................................................................................................................................... 102
Description of the Issuer........................................................................................................................... 108
Description of the Guarantor..................................................................................................................... 109
Use of Proceeds........................................................................................................................................ 121
Taxation................................................................................................................................................... 122
Subscription and Sale............................................................................................................................... 127
General Information ................................................................................................................................. 131
5

Overview
This overview must be read as an introduction to this Offering Circular and any decision to invest in the
Securities should be based on a consideration of this Offering Circular as a whole, including the documents
incorporated by reference. Words and expressions defined in the Conditions shall have the same meanings in
this section.
Issuer:
Iberdrola International B.V.
Issuer's Legal Entity Identifier
549300ZMLFJKWC63XN87
("LEI"):
Guarantor:
Iberdrola, S.A.
Guarantor's LEI:
5QK37QC7NWOJ8D7WVQ45
Description of Securities:
1,600,000,000 5.5 Year Non-Call Undated Deeply
Subordinated Reset Rate Guaranteed Securities (the "5.5
Year Non-Call Securities") and the 1,400,000,000 8.5
Year Non-Call Undated Deeply Subordinated Reset Rate
Guaranteed Securities (the "8.5 Year Non-Call
Securities", and together with the 5.5 Year Non-Call
Securities, the "Securities"), to be issued by the Issuer on
28 October 2020 (the "Issue Date").
Global Coordinators and Structuring
BNP Paribas and HSBC France
Agents to the Issuer and the
Guarantor:
Joint Bookrunners:
Banco de Sabadell, S.A., Bankia, S.A., Bankinter, S.A.,
Barclays Bank Ireland PLC, BNP Paribas, BofA
Securities Europe SA, Crédit Agricole Corporate and
Investment Bank, Deutsche Bank Aktiengesellschaft,
HSBC France, J.P. Morgan Securities plc, Mizuho
Securities Europe GmbH, Morgan Stanley & Co.
International plc, MUFG Securities (Europe) N.V.,
NatWest Markets N.V., RBC Europe Limited, Scotiabank
Europe plc, SMBC Nikko Capital Markets Limited and
UniCredit Bank AG
Fiscal Agent:
The Bank of New York Mellon, London Branch
Issue Price:
100.00 per cent.
Maturity Date:
Undated
Interest:
The 5.5 Year Non-Call Securities will bear interest on
their principal amount:
(i) from (and including) the Issue Date to (but
excluding) the First Reset Date at a rate of 1.874 per
cent. per annum commencing on 28 April 2021; and
6

(ii) from (and including) the First Reset Date, at, in
respect of each Reset Period, the relevant 5 year
Swap Rate plus:
(A) in respect of the Reset Period commencing on
the First Reset Date, 2.321 per cent. per annum;
(B) in respect of the Reset Periods commencing on
28 April 2031 to (but excluding) 28 April 2046,
2.571 per cent. per annum; and
(C) in respect of any other Reset Period, 3.321 per
cent. per annum,
all as determined by the Agent Bank, payable annually in
arrear on each Interest Payment Date.
The 8.5 Year Non-Call Securities will bear interest on
their principal amount:
(i) from (and including) the Issue Date to (but
excluding) the First Reset Date at a rate of 2.250 per
cent. per annum commencing on 28 April 2021; and
(ii) from (and including) the First Reset Date, at, in
respect of each Reset Period, the relevant 5 year
Swap Rate plus:
(A) in respect of the Reset Period commencing on
the First Reset Date, 2.574 per cent. per annum;
(B) in respect of the Reset Periods commencing on
28 April 2034 to (but excluding) 28 April 2049,
2.824 per cent. per annum; and
(C) in respect of any other Reset Period, 3.574 per
cent. per annum,
all as determined by the Agent Bank, payable annually in
arrear on each Interest Payment Date.
All as more particularly described in Condition 4.
If the Issuer does not elect to redeem the Securities in
accordance with Condition 6(f) following the occurrence
of a Change of Control Event, the then Prevailing Interest
Rate, and each subsequent Prevailing Interest Rate
otherwise determined in accordance with the Conditions,
on the Securities shall be increased by 5 per cent. per
annum with effect from (and including) the date on which
the Change of Control Event occurred. See Condition 4.
Interest Payment Dates:
Interest payments in respect of the Securities will be
payable annually in arrear on 28 April in each year,
commencing on 28 April 2021.
Status of the Securities:
The Securities and the Coupons constitute direct,
unsecured and subordinated obligations of the Issuer
(senior only to Junior Obligations of the Issuer) and shall
7

at all times rank pari passu and without any preference
among themselves.
Subordination of the Securities:
In the event of an Issuer Winding-up, the rights and claims
of the Holders against the Issuer in respect of or arising
under the Securities and the Coupons will rank (i) junior
to the claims of all holders of Senior Obligations of the
Issuer, (ii) pari passu with the claims of holders of all
Parity Obligations of the Issuer and (iii) senior to the
claims of holders of all Junior Obligations of the Issuer.
Subject to applicable law, no Holder may exercise or
claim any right of set-off in respect of any amount owed
to it by the Issuer arising under or in connection with the
Securities or the Coupons and each Holder shall, by virtue
of being the Holder, be deemed to have waived all such
rights of set-off. Condition 2(b) is an irrevocable
stipulation (derdenbeding) for the benefit of the creditors
of Senior Obligations of the Issuer and each such creditor
may rely on and enforce this Condition 2(b) under Section
6:253 of the Dutch Civil Code.
Guarantee and Status of Guarantee:
Payment of all sums expressed to be payable by the Issuer
under the Securities and the Coupons will be
unconditionally and irrevocably guaranteed by the
Guarantor on a subordinated basis.
The payment obligations of the Guarantor under the
Guarantee constitute direct, unsecured and subordinated
obligations of the Guarantor (senior only to Junior
Obligations of the Guarantor) and will at all times rank
pari passu and without preference among themselves.
Subordination of the Guarantee:
Subject to mandatory provisions of Spanish applicable
law, in the event of the Guarantor being declared in
insolvency (concurso) under Spanish insolvency law, the
rights and claims of Holders against the Guarantor in
respect of or arising under the Guarantee will rank (i)
junior to the claims of the holders of all Senior
Obligations of the Guarantor, (ii) pari passu with the
claims of the holders of all Parity Obligations of the
Guarantor and (iii) senior to the claims of the holders of
all Junior Obligations of the Guarantor.
Optional Interest Deferral:
The Issuer may, at its sole discretion, elect to defer (in
whole or in part) any payment of interest on the Securities,
subject to limited exceptions, as more particularly
described in Condition 5 (Optional Interest Deferral).
Non-payment of interest so deferred shall not constitute a
default by the Issuer or Guarantor under the Securities or
the Guarantor or for any other purpose. Any amounts so
deferred, together with further interest accrued thereon (at
8

the Prevailing Interest Rate applicable from time to time),
shall constitute Arrears of Interest.
Optional Settlement of Arrears of
Arrears of Interest may be satisfied at the option of the
Interest:
Issuer, in whole or in part, at any given time upon giving
not more than 14 and no less than seven Business Days
notice to the Holders, the Fiscal Agent and the Paying
Agents prior to the relevant Optional Deferred Interest
Settlement Date informing them of its election so to
satisfy such Arrears of Interest (or part thereof) and
specifying the relevant Optional Deferred Interest
Settlement Date. See Condition 5(b).
Mandatory Settlement of Arrears of
The Issuer shall pay any outstanding Arrears of Interest in
Interest:
whole, but not in part, on the first occurring Mandatory
Settlement Date following the Interest Payment Date on
which any Deferred Interest Payment was first deferred.
"Mandatory Settlement Date" means the earliest of:
(i) as soon as reasonably practicable (but not later than
the fifth business day) following the date on which a
Compulsory Arrears of Interest Settlement Event
occurs;
(ii) on the next scheduled Interest Payment Date on
which the Issuer does not elect to defer in whole the
interest accrued in respect of the relevant Interest
Period;
(iii) the date on which the Securities are redeemed or
repaid in accordance with Condition 6 or become
due and payable in accordance with Condition 9; and
(iv) the date on which the Securities are substituted or
varied in accordance with Condition 12(c).
Subject to certain exceptions, as more particularly
described in Condition 5 a "Compulsory Arrears of
Interest Settlement Event" shall have occurred if:
(i) a Dividend Declaration is made in respect of any
Junior Obligations or any Parity Obligations (other
than in respect of any Dividend Declaration made
exclusively in Ordinary Shares of the Guarantor); or
(ii) the Guarantor or any of its subsidiaries has
repurchased, redeemed or otherwise acquired any
Junior Obligations or any Parity Obligations,
all as more particularly described in Condition 5.
Optional Redemption:
The Issuer may redeem the Securities in whole, but not in
part, on any date during the period commencing on (and
including) (i) 28 January 2026 in respect of the 5.5 Year
Non-Call Securities and (ii) 28 January 2029 in respect of
the 8.5 Year Non-Call Securities and ending on (and
9