Regulatory Filings • Jul 13, 2018
Regulatory Filings
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(incorporated in the Republic of France)
This document comprises the base prospectus (the "Base Prospectus") for the issuance of fixed rate notes, floating rate notes (including constant maturity swap ("CMS") linked notes), inflation linked notes, and zero coupon notes, (the "Notes", each series a "Series of Notes") under the €15,000,000,000 Medium Term Note Programme (the "Programme") of Compagnie de Saint-Gobain (the "Issuer" or "Saint-Gobain"). The Issuer may, subject to compliance with all relevant laws, regulations and directives, from time to time, outside the Republic of France, issue Notes denominated in any currency (including Euro) agreed between the Issuer and the relevant Dealer (as defined below).
Notes may be issued in bearer or registered form (respectively "Bearer Notes" and "Registered Notes"). The maximum aggregate nominal amount of all Notes from time to time outstanding under the Programme will not exceed €15,000,000,000 (or its equivalent in other currencies calculated as described in the Programme Agreement described herein), subject to increase as described herein. The minimum denomination for Notes issued under the Programme shall be €100,000 (or its equivalent in any other currency as at the date of issue of the Notes).
The Notes may be issued to one or more of the Dealers specified under "Description of the Programme" and any additional Dealer appointed under the Programme from time to time by the Issuer (each a "Dealer" and together the "Dealers"), which appointment may be for a specific issue or on an ongoing basis. References in this Base Prospectus to the "relevant Dealer" shall, in the case of an issue of Notes being (or intended to be) subscribed by more than one Dealer, be to all Dealers agreeing to subscribe such Notes.
Application has been made to the Financial Conduct Authority in its capacity as competent authority under the Financial Services and Markets Act 2000 (the "UK Listing Authority") for Notes issued under the Programme during the period of 12 months from the date of this Base Prospectus to be admitted to the official list of the UK Listing Authority (the "Official List"), and to the London Stock Exchange plc (the "London Stock Exchange") for such Notes to be admitted to trading on the London Stock Exchange's Regulated Market.
The Programme provides that Notes may also be listed or admitted to trading, as the case may be, on Euronext Paris as may be agreed between the Issuer and the relevant Dealer as described in "Description of the Programme – Listing and admission to trading". References in this Base Prospectus to Notes being listed (and all related references) shall mean that such Notes have been admitted to trading on the London Stock Exchange's Regulated Market and have been admitted to the Official List or on another stock exchange as aforesaid. Each of the London Stock Exchange's Regulated Market and Euronext Paris is a regulated market for the purposes of Directive 2004/39/EC (the "MiFID").
Notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of Notes, the issue price of Notes and any other terms and conditions not contained herein which are applicable to each Tranche (as defined under "Terms and Conditions of the Notes") of Notes will be set out in the relevant final terms (the "Final Terms") which will be delivered to the UK Listing Authority and the London Stock Exchange.
The Programme also provides for the issue of Notes that will not be admitted to the Official List or to trading on the London Stock Exchange's regulated market or that may be listed or admitted to trading on other stock exchanges or markets as may be agreed between the Issuer and the relevant Dealer(s) (such Notes being "Exempt Notes"). Notice of the aggregate nominal amount of, interest (if any) payable in respect of, the issue price of, and any other terms and conditions which are applicable to each Tranche of Exempt Notes will be set forth in a pricing supplement document (the "Pricing Supplement").
Information contained in this Base Prospectus relating to Exempt Notes has not been reviewed or approved by the UK Listing Authority and does not constitute part of the prospectus for the purposes of the Prospectus Directive (as defined herein).
Holders of the Notes (the "Noteholders") will be entitled, following a Change of Control, to request the Issuer to redeem, purchase or procure the purchase of their Notes at their principal amount together with any accrued interest as more fully described under "Terms and Conditions of the Notes – Change of Control".
Series of Notes issued under the Programme may be rated or unrated. Where a Series of Notes is rated, such rating will not necessarily be the same as the rating(s) assigned to the Programme. The rating of certain Series of Notes to be issued under the Programme may be specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement). Whether or not each credit rating applied for in relation to relevant Series of Notes will be issued by a credit rating agency established in the European Union ("EU") and registered under Regulation (EC) No. 1060/2009, as amended (the "CRA Regulation") will be disclosed in the Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement). In general, European regulated investors are restricted under the CRA Regulation from using credit ratings for regulatory purposes, unless such ratings are issued by a credit rating agency established in the European Union and registered under the CRA Regulation (and such registration has not been withdrawn or suspended), subject to transitional provisions that apply in certain circumstances whilst the registration application is pending. For more information on the ratings of the Programme, see "Description of the Programme – Rating". A credit rating is not a recommendation to buy, sell or hold Notes and may be revised or withdrawn by the relevant rating agency at any time. Any such revision or withdrawal could adversely affect the market value of the Notes.
The Issuer may agree with any Dealer that Notes may be issued in a form not contemplated by the terms and conditions of the Notes under "Terms and Conditions of the Notes" (the "Conditions"), in which event a new prospectus, if appropriate, will be made available which will describe the effect of the agreement reached in relation to such Notes.
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any U.S. state, and may not be offered or sold, directly or indirectly, in the United States or to, or for the account or the benefit of, U.S. persons, as defined in Regulation S under the Securities Act, unless the Notes are registered under the Securities Act or except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and or such state securities laws. See "Notes in Global Form" for a description of the manner in which Notes will be issued. Registered Notes are subject to certain restrictions on transfer; see "Subscription and Sale and Transfer and Selling Restrictions".
NOMURA
DEALERS
BANCO BILBAO VIZCAYA ARGENTARIA, S.A. BNP PARIBAS
GOLDMAN SACHS INTERNATIONAL ING
J.P. MORGAN MUFG
NATWEST MARKETS NOMURA
SANTANDER GLOBAL CORPORATE BANKING SOCIETE GENERALE CORPORATE &
CITIGROUP CRÉDIT AGRICOLE CIB
INVESTMENT BANKING
The date of this Base Prospectus is 13 July 2018.
This Base Prospectus has been approved by the UK Listing Authority, as competent authority under Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU, to the extent implemented in the Relevant Member State) (the "Prospectus Directive") and comprises a base prospectus in respect of all Notes other than Exempt Notes issued under the Programme for the purposes of Article 5.4 of the Prospectus Directive.
In this document references to the "Group" are to Saint-Gobain and its consolidated subsidiaries.
The Issuer accepts responsibility for the information contained in this Base Prospectus and for the information contained in the Final Terms for each issue of Notes under the Programme. To the best of the knowledge of the Issuer (having taken all reasonable care to ensure that such is the case) the information contained in this Base Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information.
This Base Prospectus and applicable Final Terms will be available on the website of the London Stock Exchange at
as well as, upon request, from the registered office of the Issuer and the specified office set out below of each of the Paying Agents (as defined below).
Following the publication of this Base Prospectus, a supplement may be prepared by the Issuer and approved by the UK Listing Authority in accordance with Article 16 of the Prospectus Directive. Statements contained in any such supplement (or contained in any document incorporated by reference therein) shall, to the extent applicable (whether expressly, by implication or otherwise), be deemed to modify or supersede statements contained in this Base Prospectus or in a document which is incorporated by reference in this Base Prospectus. Any statement so modified or superseded shall not, except as so modified or superseded, constitute a part of this Base Prospectus.
This Base Prospectus is to be read in conjunction with all documents that are deemed to be incorporated herein by reference (see "Documents Incorporated by Reference"). This Base Prospectus shall be read and construed on the basis that such documents are incorporated and form part of this Base Prospectus.
The Dealers have not independently verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by the Dealers as to the accuracy or completeness of the information contained or incorporated in this Base Prospectus or any other information provided by the Issuer in connection with the Programme. No Dealer accepts any liability in relation to the information contained or incorporated by reference in this Base Prospectus or any other information provided by the Issuer in connection with the Programme.
No person is or has been authorised by the Issuer to give any information or to make any representation not contained in this Base Prospectus and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuer or any of the Dealers.
Neither this Base Prospectus nor any other information supplied in connection with the Programme or any Notes (a) is intended to provide the basis of any credit or other evaluation or (b) should be considered as a recommendation by the Issuer or any of the Dealers that any recipient of this Base Prospectus or any other information supplied in connection with the Programme or any Notes should purchase any Notes. Each investor contemplating purchasing any Notes should make its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness, of the Issuer. Neither this Base Prospectus nor any other information supplied in connection with the Programme or the issue of any Notes constitutes an offer or invitation by or on behalf of the Issuer or any of the Dealers to any person to subscribe for or to purchase any Notes.
Neither the delivery of this Base Prospectus nor the offering, sale or delivery of any Notes shall in any circumstances imply that the information contained herein concerning the Issuer is correct at any time subsequent to the date hereof or that any other information supplied in connection with the Programme is correct as of any time subsequent to the date indicated in the document containing the same. The Dealers expressly do not undertake to review the financial condition or affairs of the Issuer during the life of the Programme or to advise any investor in the Notes of any information coming to their attention. Investors should review, inter alia, the most recently published documents incorporated by reference into this Base Prospectus when deciding whether or not to purchase any Notes.
The Notes in bearer form are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to United States persons, except in certain transactions permitted by U.S. tax regulations. Terms used in this paragraph have the meanings given to them by the U.S. Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.
This Base Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any Notes in any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such jurisdiction. The distribution of this Base Prospectus and the offer or sale of Notes may be restricted by law in certain jurisdictions. The Issuer and the Dealers do not represent that this Base Prospectus may be lawfully distributed, or that any Notes 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 or the Dealers which would permit a public offering of any Notes within or outside the UK or distribution of this Base Prospectus in any jurisdiction where action for that purpose is required. Accordingly, no Notes may be offered or sold, directly or indirectly, and neither this Base Prospectus 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 Base Prospectus or any Notes may come must inform themselves about, and observe, any such restrictions on the distribution of this Base Prospectus and the offering and sale of Notes. In particular, there are restrictions on the distribution of this Base Prospectus and the offer or sale of Notes in the United States, the United Kingdom, France and Japan. (See "Subscription and Sale and Transfer and Selling Restrictions".)
MiFID II product governance / target market – The Final Terms in respect of any Notes (or Pricing Supplement, in the case of Exempt Notes) will include a legend entitled "MiFID II Product Governance" which will outline the target market assessment in respect of the Notes and which channels for distribution of the Notes are appropriate. Any person subsequently offering, selling or recommending the Notes (a "distributor") should take into consideration the target market assessment; however, a distributor subject to Directive 2014/65/EU (as amended, "MiFID II") is responsible for undertaking its own target market assessment in respect of the Notes (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 Notes is a manufacturer in respect of such Notes, but otherwise neither the Arranger nor the Dealers nor any of their respective affiliates will be a manufacturer for the purpose of the MiFID Product Governance Rules.
PRIIPs – IMPORTANT – EEA RETAIL INVESTORS – If the relevant Final Terms for a Tranche of Notes issued under the Programme includes a legend entitled "Prohibition of Sales to EEA Retail Investors", such Notes 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 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 MiFID II, (ii) a customer within the meaning of Directive 2002/92/EC ("IMD"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II, or (iii) not a qualified investor as defined in the Prospectus Directive. Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). Any Notes will only be available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such Notes will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
The Notes may not be a suitable investment for all investors. Each potential investor in the Notes must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:
(i) have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits and risks of investing in the Notes and the information contained or incorporated by reference in this Base Prospectus or any applicable supplement;
(ii) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Notes and the impact the Notes will have on its overall investment portfolio;
(iii) have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes, including Notes with principal or interest payable in one or more currencies, or where the currency for principal or interest payments is different from the potential investor's currency;
(iv) understand thoroughly the terms of the Notes and be familiar with the behaviour of any relevant indices and financial markets; and
(v) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.
Some Notes are complex financial instruments. Sophisticated institutional investors generally do not purchase complex financial instruments as stand-alone investments. They purchase complex financial instruments as a way to reduce risk or enhance yield with an understood, measured, appropriate addition of risk to their overall portfolios. A potential investor should not invest in Notes which are complex financial instruments unless it has the expertise (either alone or with a financial adviser) to evaluate how the Notes will perform under changing conditions, the resulting effects on the value of the Notes and the impact this investment will have on the potential investor's overall investment portfolio. None of the Dealers or the Issuer makes any representation to any investor in the Notes regarding the legality of the investor's investment in the Notes under any laws applicable to such investor. In addition, the investment activities of certain investors are subject to legal investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal advisers to determine whether and to what extent (i) Notes are legal investments for it, (ii) Notes can be used as collateral for various types of borrowing and (iii) other restrictions apply to its purchase or pledge of any Notes. Financial institutions should consult their legal advisors or the appropriate regulators to determine the appropriate treatment of Notes under any applicable risk-based capital or similar rules.
All references in this document to U.S. dollars and U.S.\$ refer to United States dollars. In addition, all references to Yen, JPY and ¥ refer to currency of Japan, to Sterling, GBP and £ refer to pounds sterling and to Euro and € refer 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.
THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH, RECOMMENDED BY OR APPROVED BY THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), ANY STATE SECURITIES COMMISSION IN THE U.S. OR ANY OTHER SECURITIES COMMISSION OR REGULATORY AUTHORITY IN THE U.S., NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE ACCURACY OR ADEQUACY OF THIS BASE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.
This Base Prospectus is being or may be circulated on a confidential basis in the United States to QIBs or Institutional Accredited Investors (each as defined under "Notes in Global Form") for informational use solely in connection with the consideration of the purchase of the Notes being offered hereby. Its use for any other purpose in the United States is not authorised. It may not be copied or reproduced in whole or in part nor may it be distributed or any of its contents disclosed to anyone other than the prospective investors to whom it is originally submitted.
Registered Notes may be offered or sold within the United States only to QIBs or to Institutional Accredited Investors, in either case in transactions exempt from registration under the Securities Act. Each U.S. purchaser of Registered Notes is hereby notified that the offer and sale of any Registered Notes to it may be made in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A under the Securities Act ("Rule 144A").
Purchasers of Definitive IAI Registered Notes will be required to execute and deliver an IAI Investment Letter (as defined under "Terms and Conditions of the Notes"). Each purchaser or holder of Definitive IAI Registered Notes, Notes represented by a Rule 144A Global Note or any Notes issued in registered form in exchange or substitution therefor (together "Legended Notes") will be deemed, by its acceptance or purchase of any such Legended Notes, to have made certain representations and agreements intended to restrict the resale or other transfer of such Notes as set out in "Subscription and Sale and Transfer and Selling Restrictions". Unless otherwise stated, terms used in this paragraph have the meanings given to them in "Terms and Conditions of the Notes".
To permit compliance with Rule 144A in connection with any resales or other transfers of Registered Notes that are "restricted securities" within the meaning of the Securities Act, the Issuer has undertaken in a deed poll dated 27 July 2016 to furnish, upon the request of a holder of such Notes or any beneficial interest therein, to such holder or to a prospective purchaser designated by him, the information required to be delivered under Rule 144A(d)(4) under the Securities Act if, at the time of the request, the Issuer is neither a reporting company under Section 13 or 15(d) of the U.S. Securities Exchange Act of 1934, as amended, (the "Exchange Act"), nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder.
The Issuer is a corporation organised under the laws of France. The majority of the officers and directors named herein reside outside the United States and all or a substantial portion of the assets of the Issuer and of such officers and directors are located outside the United States. As a result, it may not be possible for investors to effect service of process outside France upon the Issuer or such persons, or to enforce judgments against them obtained in courts outside France predicated upon civil liabilities of the Issuer or such directors and officers under laws other than French law, including any judgment predicated upon United States federal securities laws.
The Issuer maintains its financial books and records and prepares its consolidated financial statements in Euros in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union which differ in certain important respects from generally accepted accounting principles in the United States ("U.S. GAAP").
This Base Prospectus contains conversions of certain amounts into Euro solely for the convenience of the reader. No representation is made that such amounts referred to in this Base Prospectus could have been or could be converted into Euro at any particular rate or at all.
In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) named as the Stabilisation Manager(s) (or persons acting on behalf of any Stabilisation Manager(s)) may over-allot Notes or effect transactions with a view to supporting the market price of the Notes at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilisation Manager(s) (or persons acting on behalf of a Stabilisation 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 Tranche of Notes is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date of the relevant Tranche of Notes and 60 days after the date of the allotment of the relevant Tranche of Notes. Any stabilisation action or over-allotment shall be conducted in accordance with all applicable laws and rules.
This Base Prospectus contains "forward-looking statements" relating to the Issuer's business and the sectors in which it operates. Forward-looking statements include all statements that are not historical facts, and can be identified by words such as "believes", "anticipates", "projects", "intends", "expects", or the negatives of these terms or similar expressions. These statements appear in a number of places in this Base Prospectus. Any forward-looking statements contained in this Base Prospectus should not be relied upon as predictions of future events. No assurance can be given that the expectations expressed in these forward-looking statements will prove to be correct. Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of the underlying assumptions or expectations proves to be inaccurate or is unrealised or if other factors affect the outcome. Some important factors that could cause actual results to differ materially from those in the forward-looking statements are, in certain instances, included with such forward-looking statements and in the section entitled "Risk Factors" in this Base Prospectus. The forward-looking statements included in this Base Prospectus are only made as of the date of this Base Prospectus and the Issuer does not undertake any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances.
| RISK FACTORS |
10 |
|---|---|
| DESCRIPTION OF THE PROGRAMME |
31 |
| DOCUMENTS INCORPORATED BY REFERENCE | 38 |
| FORM OF FINAL TERMS | 41 |
| FORM OF PRICING SUPPLEMENT IN RELATION TO EXEMPT NOTES | 55 |
| TERMS AND CONDITIONS OF THE NOTES |
69 |
| NOTES IN GLOBAL FORM | 131 |
| USE OF PROCEEDS | 136 |
| INFORMATION ABOUT THE ISSUER | 137 |
| BOOK-ENTRY CLEARANCE SYSTEMS |
161 |
| TAXATION | 166 |
| SUBSCRIPTION AND SALE AND TRANSFER AND SELLING RESTRICTIONS | 170 |
| GENERAL INFORMATION | 180 |
The Issuer believes that the following factors may affect its ability to fulfil its obligations under Notes issued under the Programme. Most 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 Notes issued under the Programme are also described below.
Although the factors described below represent certain risks inherent in investing in Notes issued under the Programme, the inability of the Issuer to pay interest, principal or other amounts on or in connection with any Notes may occur for other reasons and the Issuer does not represent that the statements below regarding the risks of holding any Notes 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.
The Group's business is especially influenced by general economic conditions in France and other countries in Europe.
During the global economic crisis, in 2008 and 2009, refinancing costs of banks increased significantly, and the liquidity available in the interbank markets declined substantially. In Europe, countries such as Greece, Italy, Ireland, Portugal and Spain have been particularly affected by the macroeconomic and financial conditions since 2008. Although the risk of sovereign default continued to decline in 2017 due to the continuing actions of the European Central Bank and the EU and improving economic conditions, the risk of default and the possibility that the contagion effect spreads to other member states of the European Union ("Member States") remains. The impact a sovereign default could have on the Eurozone countries, including the potential that some countries could leave the Eurozone (either voluntarily or involuntarily), continues to raise concerns about the ongoing viability of the Euro currency and the European monetary union. If these conditions continue or there is further uncertainty over sovereign finances, this could lead to a material downturn of the economy including a decrease in the demand for the products and services offered by the Group, which could materially adversely affect the Group's results of operations and financial condition.
On 23 June 2016, the United Kingdom voted by referendum to leave the European Union. The result of the referendum is likely to necessitate a period of negotiations to determine the future terms of the relationship between the United Kingdom and the European Union. This could trigger a prolonged period of uncertainty and volatility in European and global markets, which could disproportionately affect the construction sector and accordingly weaken demand for the products and services offered by the Group. Any of these or other impacts of the referendum could materially adversely affect the Group's business, results of operations, financial condition and cash flows.
On 18 September 2015, Moody's downgraded France's government bond ratings from Aa1 to Aa2 as a result of continuing weakness in France's medium-term growth outlook and the challenges that low growth, coupled with institutional and political constraints, poses for the material reduction in the government's high debt burden. The bailout funds European Financial Stability Facility and European Stability Mechanism have also been downgraded from the best possible credit rating AAA to Aa1. Risks and ongoing concerns related to the sovereign debt crisis in Europe could lead to further market volatility and could have a detrimental impact on global economic recovery.
If the economies in countries where the Group is active resume the deterioration experienced in the past, or if growth remains at low levels, the level of demand by the Group's individual customers for its products and services and the willingness of the Group's business customers to purchase the products of the Group may weaken. This could, in turn, negatively impact the Group's revenue development, including in the future growth areas on which it plans to focus, and jeopardise the attainment of the Group's growth targets.
As with any other international company, the Group is exposed to various types of financial risks, such as currency risk, interest risk, liquidity risk, and credit risk. The Group has a welldocumented policy to handle such risks through various financial strategies.
Most of the Group's markets are cyclical in nature. A significant portion of revenues depends on the level of investment in the construction market, which generally closely follows the cyclical nature of economic trends. Consequently, the Group's earnings are sensitive to the economic conditions of the geographic zones, both at regional and local levels, where the Group is active.
Further deterioration in the global economic environment and in financial market conditions could have a material adverse effect on the Group's sales, earnings, cash flow and prospects.
The Group is active worldwide, including outside Western Europe and North America. Specifically, it is active in Eastern Europe, Asia, the Middle East and emerging countries, particularly Brazil. In certain countries located in these regions, there is greater economic and political instability, as well as greater exposure to social disruption and infrastructure malfunctions than in the more mature markets. Thus, the direct and indirect consequences of political instability, or of an unstable economic or regulatory environment in which the Group operates, in a country in which the Group is active or markets its products, could have a material adverse impact on investment levels in that country's construction sector, and consequently on the Group's businesses, financial position, earnings or prospects.
Moreover, legal or regulatory changes (involving, among other things, taxation, restrictions on capital transfers, customs duties, intellectual property and import and export licenses, the employment system or health, safety or the environment) could significantly increase the Group's costs in the various countries in which it is active, or limit its ability to freely transfer its capital, and consequently have a material adverse impact on its businesses, financial position, earnings and prospects.
Demand for and supply of the Group's products may be affected by numerous factors, some of which it cannot predict or control which could affect its financial condition, performance, strategies and prospects.
Numerous factors may affect the demand for and supply of the Group's products, including:
If any of these factors occur, the demand for and supply of the affected Group's products could suffer, which in turn could negatively affect its financial condition, performance, strategies and prospects.
The Group has made research and innovation the focus of its strategy in order to remain competitive and maintain a high level of financial and non-financial performance and operational excellence. The emergence of new technologies, new products and new distribution channels is driving rapid change in some of the Group's markets. The Group has to keep pace with these changes at all times and integrate these new technologies into its product offerings, in order to respond effectively to customers' needs.
This innovation policy requires significant spending on research and development, computer network infrastructure and logistics, with no guaranteed impacts.
The Group's sales, operating margins and results could be affected if it fails to invest in appropriate technologies or to rapidly bring new products to market, or if competing products are introduced or the Group's new products do not adequately address customers' needs. This could in turn have a material adverse effect on the Group's financial position and results.
Development of the Group's business relies on protecting its manufacturing secrets, patents, trademarks and models and other intellectual property rights. If the Group is unable to obtain, protect and preserve its intellectual property rights, this could result in the loss of its exclusive right to use technologies and processes, with a material adverse effect on earnings.
Since the Group's activities are, in part, in countries where the protection of intellectual property rights is not as developed as in Western Europe or North America, the Group cannot guarantee the level of protection that will be accorded to its portfolio of patents and brands, and must address risks of counterfeiting of its products and the appropriation or illicit use of its intellectual property rights.
The Group may be forced to take legal action against third parties suspected of breaching its rights. Any such proceedings may give rise to significant costs and hamper growth in sales of the products manufactured using the rights concerned, or force the Group to incur additional expenses to develop other technologies that do not use the disputed technology.
The Group's businesses, some of which are heavy consumers of energy, may be affected by a significant increase in prices and difficulties in obtaining a supply of raw materials and/or energy (such as natural gas). Its ability to pass on these cost increases to its customers depends to a large extent on market conditions and practices. If the Group's ability to immediately and/or fully pass on increases in raw materials and/or energy costs were limited, this could have a material adverse effect on its businesses, financial position or results.
The Group could incur significant expenses and be exposed to environmental liabilities as a result of its operation of past, present or future industrial sites.
The industrial and environmental risks arising from the operation of some sites primarily relate to the storage of certain hazardous substances.
As at 31 December 2017, five sites were classified under Directive 2012/18/EU on the control of major-accident hazards involving dangerous substances, known as "Seveso III". These industrial sites are subject to specific regulations and close supervision by the competent authorities and the Group's Environment, Health and Safety Department.
Of these facilities, the Balsta (Gypsum) site in Sweden, which stores liquid natural gas, the Etolikon (Gypsum) site in Greece, which stores liquid petroleum gas, and the Mannheim (Flat Glass) site in Germany, which stores oil products, are classified as "lower-tier" under the Seveso III Directive. Two Other facilities are classified as "upper-tier": Bagneaux-sur-Loing (Flat Glass) in France, which stores arsenic (AS2O3) and Carrascal del Río (Flat Glass) in Spain, which stores, among other things, hydrofluoric acid (HF).
In France, under the Law of 30 July 2003 on the prevention of technological and natural risks and the remediation of contaminated sites, specific risk prevention and safety policies have been implemented at all of the French sites listed above. After identifying accident risks and their potential impact on the environment, preventive measures were implemented at these facilities, covering the design and construction of storage areas, as well as the manner in which they are used and maintained. Internal contingency plans have been developed to respond to incidents. Certain financial consequences of personal injury and damage to property that may arise by accident from plant operations may be covered by the current Group civil liability insurance programme, except for the Bagneaux-sur-Loing plant, which is insured under a specific policy subscribed by the joint venture operating the facility. In the event of a technological accident, compensation payments to victims would be organised jointly by the joint venture, the insurance broker and the insurer.
The Group also has to deal with risks relating to chronic pollution, and could therefore be required to incur expenses to restore industrial sites or clean up the environment. 72 Group sites are classified as "IED" installations as defined by Directive 2010/75/EU on industrial emissions, and are subject to integrated pollution prevention and control regulations.
Breach of these regulations could result in fines or other civil, administrative or criminal penalties, specifically the withdrawal of permits and licenses needed for the activities in question to continue operations.
The Group's strategy is based, in part, on external growth, in particular by acquiring businesses or assets, taking equity interests or establishing joint ventures in the Group's business lines and in geographic regions where the Group seeks to establish or strengthen itself. The Group may, however, not be able to identify attractive targets or enter into transactions at the optimal time and/or under satisfactory conditions. The expected benefits of these external growth operations depend, in part, on the realisation of expected synergies and integration of the activities of the acquired companies, and on relationships with other participants in the joint ventures. The Group gives no guarantees as to these objectives, which, if not fulfilled within the expected timeframes and at the expected levels, could affect the Group's financial position, results and prospects.
Daily management of the Group's activities, specifically the conduct of its commercial, industrial and accounting processes, particularly in its Distribution activities, requires the proper functioning of all technical infrastructure and computer applications. The risk of system malfunction or shutdown, which may be external or internal in origin (computer viruses or hacking, service providers defaults, blackouts or network shutdowns, natural disasters, human error, etc.) cannot be underestimated.
To minimise the impact of this type of malfunction, the Information Systems Department has set strict rules for information systems governance and security, relating to infrastructure and applications, data backups and business continuity plans, rolled out at the Group level and controlled by the Internal Audit and Control Department.
The occurrence of such malfunctions may adversely affect the Group's operations, the protection of its know-how and its financial results.
The Group's exposure to customer credit risk is limited due to its wide range of businesses, worldwide presence and very large customer base. Past-due receivables are regularly analysed and provisions are booked whenever necessary. Nevertheless, changes in the economic situation could lead to an increase in customer credit risk.
Nevertheless, changes in the economic situation could lead to an increase in customer credit risk which could have a material adverse effect on its financial position and results.
The Group has undertaken a variety of cost-cutting and restructuring initiatives. While further savings are planned, there is no guarantee that the forecast reductions will be achieved or that the related restructuring costs will not be higher than originally budgeted. In particular, certain restructuring operations and other initiatives may cost more than expected, or the cost savings may be less than expected or take longer than expected to achieve. An increase in restructuring costs and/or the Group's inability to achieve the expected savings could have a material adverse effect on the Group's results and outlook.
The Group makes significant accounting accruals to cover pension and other post-employment benefit plans, mainly in Western Europe (particularly France, Germany, the Netherlands and the United Kingdom) and in North America (United States and Canada). Most of these plans are closed to new entrants. At 31 December 2017, total commitments under pension and other post-employment benefit plans were €11.9 billion.
The provision for pension plans recognised in the consolidated balance sheet (€2.9 billion at 31 December 2017) may be affected by adverse changes in the actuarial assumptions used to calculate the projected benefit obligation, by a reduction in the discount rates used to measure future commitments, a change in life expectancy or higher inflation, or a fall in the market values of plan assets, consisting mainly of equities and bonds. Risks associated with goodwill and impairment of property, plant and equipment and intangible assets.
Brands and goodwill make up a significant proportion of the Group's intangible assets, representing €2.0 billion and €10.6 billion, respectively, at 31 December 2017. In line with Group accounting policies, goodwill and certain other intangible assets with indefinite use lives are tested for impairment periodically and whenever there is an indication that their carrying amount may not be fully recoverable. Goodwill and other identified intangible assets may become impaired as a result of worse-than-expected Group performance, unfavourable market conditions, unfavourable legal or regulatory changes or many other factors. The recognition of impairment losses on goodwill could have an adverse effect on consolidated net income.
Property, plant and equipment (€11.6 billion at 31 December 2017) represent roughly onequarter of total assets and may become impaired in the event of adverse development of the business.
In a crisis environment, the Group might be unable to raise the financing or refinancing needed to cover its investment plans on the credit or capital markets, or to obtain such financing or refinancing on acceptable terms.
The Group's overall exposure to liquidity risk on its net debt is managed by the Treasury and Financing Department of Saint-Gobain, the Group's parent company. Generally, the subsidiaries enter into short- or long-term financing arrangements with Saint-Gobain or with the National Delegations' cash pools.
The Group's policy is to ensure that the Group's financing will be rolled over at maturity and to optimise borrowing costs. Long-term debt therefore systematically represents a high percentage of overall debt. At the same time, the maturity schedules of long-term debt are set in such a way that replacement capital market issues are spread over time.
The Group's main source of long-term financing is bonds, which are generally issued under the Medium-Term Notes programme. Saint-Gobain also uses perpetual bonds, participating securities, a long-term securitization programme, bank borrowings and lease financing.
Short-term debt is composed of borrowings under a French Commercial Paper (Billet de Trésorerie), and occasionally, in the past, Euro Commercial Paper programmes and US Commercial Paper, but also includes receivables securitization programs and bank financing. Financial assets comprise marketable securities and cash and cash equivalents.
Saint-Gobain's liquidity position is secured by two confirmed syndicated lines of credit.
Saint-Gobain's long-term debt issues have been rated BBB with a stable outlook by Standard & Poor's since 9 December 2014.
Saint-Gobain's long-term debt issues have been rated Baa2 with a stable outlook by Moody's since 9 December 2014.
There is no guarantee that the Issuer will be in a position to maintain its credit risk ratings at current levels. Any deterioration in the Group's credit risk rating could limit its capacity to raise funds and could lead to higher rates of interest on future borrowings.
Short-term investments consist of bank deposits and mutual fund units. To reduce liquidity and volatility risk, whenever possible, the Group invests in money market and/or bond funds.
The Group's overall exposure to interest rate risk on consolidated debt is managed by the Treasury and Financing Department of Saint-Gobain. Where subsidiaries use derivatives to hedge interest rate risks, their counterparty is generally Saint-Gobain, the Group's parent company.
The Group's policy is aimed at fixing the cost of its medium-term debt against interest rate risk and optimizing borrowing costs. According to Group policy, the derivative financial instruments used to hedge these risks can include interest rate swaps, cross-currency swaps, options – including caps, floors and swaptions – and forward rate agreements.
Note 8.4 to the Financial Statements 2017 provides a breakdown of interest rate risk hedging instruments and of gross debt by rate type (fixed or variable) after hedging.
There is no guarantee of the Group's ability to successfully manage the cost of the mediumterm debt and to optimise annual borrowing costs. Should the Group not be able to manage the interest rate risk, this could have a material adverse effect on its financial position and results.
The currency hedging policies described below could be insufficient to protect the Group against unexpected or sharper than expected fluctuations in exchange rates resulting from economic and financial market conditions.
Foreign exchange risks are managed by hedging virtually all transactions entered into by Group entities in currencies other than the functional currency of the particular entity. Saint-Gobain and its subsidiaries may use forward contracts and options to hedge exposures arising from current and forecast transactions.
Subsidiaries generally contract with the Group's parent company, Saint-Gobain, which then carries out corresponding Exchange rate hedging operations; otherwise, the subsidiary either deals with the cash pool of its relevant regional delegation or, failing that, with one of the subsidiary's banks.
Most forward contracts have short maturities of around three months. However, forward contracts taken out to hedge firm orders may have longer terms.
The Group monitors its exposure to foreign exchange risk using a monthly reporting system that captures the foreign exchange positions taken by its subsidiaries. At 31 December 2017, 98% of the Group's foreign exchange exposure eligible for hedging was hedged.
The Group is exposed to changes in the price of the energy it consumes and the raw materials used in its activities. Its energy and commodity hedging programs may be insufficient to protect the Group against significant or unforeseen price swings that could result from the prevailing financial and economic environment.
The Group may limit its exposure to energy price fluctuations by using swaps and options to hedge part of its fuel oil, natural gas and electricity purchases. The swaps and options are mainly contracted in the functional currency of the entities concerned. Hedges of fuel oil, gas and electricity purchases are managed by a steering committee comprising members of the Group Finance Department, the Group Purchasing Department and the relevant Delegations.
Hedges of energy purchases (excluding fixed-price purchases negotiated directly with suppliers by the Purchasing Department) are generally arranged by the Group Treasury and Financing Department (or with the Delegations' treasury departments) in accordance with instructions received from the Purchasing Department.
From time to time, the Group may enter into contracts to hedge purchases of certain commodities, in accordance with the same principles as those outlined above for energy purchases.
The Group is exposed to changes in the Saint-Gobain share price as a result of its performance unit plans. To reduce its exposure to fluctuations in the share price, the Group uses hedging instruments such as equity swaps.
As a result, if the price of the Saint-Gobain share changes, any changes in the expense recorded in the income statement will be fully offset by the hedges in place.
The Group is exposed to the risk of default by the financial institutions that manage its cash or other financial instruments, since such default could lead to losses for the Group.
The Group limits its exposure to risk of default by its counterparties by dealing solely with reputable financial institutions and regularly monitoring their credit ratings. However, the credit quality of a financial counterparty can change rapidly, and a high credit rating cannot eliminate the risk of a rapid deterioration of its financial position. As a result, the Group's policy in relation to the selection and monitoring of its counterparties is unable to entirely eliminate exposure to a risk of default.
To limit the Group's exposure to credit risk, the Treasury and Financing Department deals primarily with counterparties with a long-term rating of A- or above from Standard & Poor's or A3 or above from Moody's. Concentrations of credit risk are also closely monitored to ensure that they remain at reasonable levels, taking into account the relative CDS (Credit Default Swap) level of each counterparty.
The Group is not subject to any specific regulations that could have an impact on its financial position, although the Group companies that operate industrial sites are generally required to comply with the specific national laws and regulations of the country where such sites are located. In France, for example, Group plants are subject to the laws and regulations applicable to classified sites.
Laws and regulations applicable to the Group and to the materials and products it uses in its activities may change in a manner that may be unfavourable to the Group. The introduction of stricter regulations or more diligent enforcement of existing regulations may affect the conditions under which the Group operates its businesses, which could increase its operating expenses, limit the scope of its activities or act as a brake on business growth. More generally, the Group cannot guarantee that there will be no rapid or significant regulatory changes in the future with a material adverse effect on its business, financial position or results. The legal risks to which the Group is most exposed are risks of asbestos-related litigation in France and the United States and competition-related risks.
In France, 10 further individual lawsuits were filed in 2017 by former employees (or persons claiming through them) of Everite and Saint-Gobain PAM which in the past had carried out fiber-cement operations for asbestos-related occupational diseases they have or had. As at 31 December 2017, a total of 815 such lawsuits had been issued against the two companies since 1996 with the aim of obtaining supplementary compensation over and above the amounts paid by the French Social Security authorities in this respect.
As of 31 December 2017, 775 of these 815 lawsuits had been completed in terms of liability and quantum as well as in terms of liability for the payment of compensation. In all these cases, the employers were held liable on the grounds of "inexcusable fault".
Compensation paid by Everite and Saint-Gobain PAM in settlement of these lawsuits totalled approximately €3 million.
Concerning the 40 lawsuits outstanding against Everite and Saint-Gobain PAM at 31 December 2017, seven have been completed in terms of both liability and quantum, but liability for the payment of compensation has not yet been assigned.
Out of the 33 remaining lawsuits, at 31 December 2017 the procedures relating to the merits of 28 cases were at different stages, with two in the process of being investigated by the French Social Security authorities and 26 pending before the Social Security Courts or the Appeal Courts. The last five actions have been cancelled but the plaintiffs may request their restoration at any time within a two-year period following their cancellation.
In addition, as of 31 December 2017, 228 similar suits had been filed since the outset of the litigation by current or former employees, or persons claiming through them, of 13 other French companies of the Group (excluding suits against companies that are no longer part of the Group), in particular by current or former employees who used equipment containing asbestos to protect themselves against heat from furnaces.
As of 31 December 2017, 191 lawsuits had been completed. In 110 of these cases, the employer was held liable for "inexcusable fault".
The compensation definitively paid by these companies totalled approximately €6.1 million.
With regard to the 37 suits outstanding at 31 December 2017, two cases were still at the investigation stage by the French Social Security authorities, 34 were being investigated – including 24 pending before the Social Security Courts, eight before the Appeal Courts and two before the Civil Supreme Court (Court of Cassation). Lastly, one suit has been cancelled but the plaintiff may request its restoration at any time within a two-year period following its cancellation.
Eight of the Group's French companies, including six that operate or have operated facilities classified as containing asbestos, are subject of damages claims that are different from those described above.
"Facilities classified as containing asbestos" are defined as industrials facilities, that have been closed or are still operating, which previously manufactured materials containing asbestos or used protection and insulation equipment containing asbestos and are included by ministerial decree on the official list of facilities whose current or former employees are entitled to the early-retirement benefits paid to asbestos workers (ACAATA).
At 31 December 2017, a total of 822 suits had been brought by current or former employees claiming compensation for anxiety suffered as a result of their alleged exposure to asbestos. None of these plaintiffs were suffering from an asbestos-related disease and some of them were not receiving the ACAATA benefit. Of these 822 suits, 693 have been terminated. Three plaintiffs had their claims dismissed, while for the 690 others who were recognised as having been exposed to an asbestos risk, the total amount of compensation is €7.6 million at 31 December 2017. Of the remaining 129 suits, two are pending before the competent Appeal Courts and 116 have been cancelled but the plaintiffs may request their restoration at any time during a period of two years following their cancellation. Finally, six suits have been dismissed by the competent labour tribunals and five plaintiffs have withdrawn the action they initiated.
The figures above do not take into account suits filed against companies that are no longer part of the Group.
In the United States, several companies that once manufactured products containing asbestos such as asbestos-cement pipes, roofing products, specialised insulation or gaskets, are facing legal action from persons other than their employees or former employees. These claims for compensatory – and in some cases punitive – damages are based on alleged exposure to these products, although in many instances the claimants cannot demonstrate any specific exposure to one or more products, or any specific illness or physical disability. The vast majority of these claims are made simultaneously against many other non-Group entities which have been manufacturers, distributors, installers or users of products containing asbestos.
About 3,100 new claims were filed against CertainTeed in 2017, a slight decrease compared to the 3,200 filed in 2016. Over the last few years, the number of new claims has remained relatively stable.
Almost all of the claims against CertainTeed are settled out of court or dismissed. Approximately 3,900 of the pending claims were resolved in 2017, compared to 3,700 in 2016 and 4,600 in 2015. Taking into account the 35,100 outstanding claims at the end of 2016 and the new claims having arisen during the year, as well as claims settled, around 34,300 claims were outstanding at 31 December 2017. A large number of these pending claims were filed more than five years ago by individuals without any significant asbestos-related impairment, and it is likely that many of these claims will ultimately be dismissed.
The Group recorded a USD 102 million charge in 2017 to cover future developments in relation to claims. This amount is stable compared to the amount recorded in 2016 and 2015.
At 31 December 2017, the Group provision for asbestos-related claims against CertainTeed in the United States amounts to USD 555 million (compared to USD 562 million at 31 December 2016 and USD 581 million at 31 December 2015).
Compensation paid in respect of these claims against CertainTeed, including claims settled prior to 2017 but only paid out in 2017, and those fully resolved and paid in 2017, and compensation paid in 2017 by other Group businesses in the United States in connection with asbestos-related litigation, amounted to USD 76 million (compared to USD 97 million in 2016 and USD 65 million in 2015).
In Brazil, former employees of Brasilit suffering from asbestos-related occupational illnesses are offered, depending on the case, solely financial compensation, or otherwise lifetime medical assistance combined with financial compensation. Around 1,200 contractual instruments were signed accordingly so far.
Two collective actions were initiated against Brasilit in 2017 by two associations defending the former exposed workers of plants of São Caetano (SP) and Recife (PE), asking for reconsideration of medical assistance and compensation. These cases are at a very early stage for the moment.
Brasilit is subject to controls by the Ministry of Labour and continues to comply with all its legal obligations with regard to medical assistance of employees and former employees.
In November 2017, the Supreme Court of Brazil has decided to ban asbestos definitively across the country. Brasilit stopped using this material voluntarily in 2002.
Legal provisions covering competition apply to the Group companies in countries in which it operates. Violation of competition law exposes the Group to fines and, in certain countries, potential criminal sanctions on the Group and its employees involved. Any litigation filed by a competition authority could, in the event of conviction, give rise to the payment of fines and potentially damages, which is likely to have a significant impact on the Group's reputation, financial situation and operating results.
The Group is firmly committed to opposing any practice that might violate competition rules and has long applied the principle of zero tolerance. A plan for compliance with competition law has been in place within the Group since 2007.
Investigation by the Swiss Competition Commission in the sanitary products wholesale sector
In November 2011, the Swiss Competition Commission (Commission Suisse de la Concurrence) opened an investigation for anti-competitive practices in the sanitary products wholesale sector. In May 2014, the Commission Secretariat issued a notification of complaints against Sanitas Troesch and against other wholesalers in the sector alleging that Sanitas Troesch and some of its competitors had, among other things, agreed in 2005 and 2012 to lower gross prices.
The total fine decided against all the companies involved is CHF 80 million. For Sanitas Troesch, the fine is CHF 28.5 million. Sanitas Troesch appealed this decision on 2 May 2016. Sanitas Troesch continues to firmly refute the claims made; however, a provision for litigation was recognised at 31 December 2015 for an amount equivalent to the fine (unchanged at 31 December 2017).
Investigation by the French Competition Authority in the building insulation products sector
On 6 August 2014, Saint-Gobain Isover and Saint-Gobain (as the parent company of the Group) received a notice of complaints from the French Competition Authority (Autorité de la Concurrence Française). The only complaint made was of having exchanged allegedly strategic and confidential information, between 2002 and 2007, relating to a certification request lodged by Actis before the Versailles Commercial Court for one of its products, and in relation to a dispute between Actis and the mineral wool manufacturers' association (FILMM), of which Saint-Gobain Isover was a member.
Saint-Gobain Isover and Saint-Gobain are challenging this complaint. A hearing was held on 11 May 2016. The Competition Authority's final ruling was postponed to a date not yet known.
In the civil law area, in March 2013 Actis served a civil liability writ on Saint-Gobain Isover, the Centre Scientifique et Technique du Bâtiment, and the FILMM before the Paris Civil Court (Tribunal de Grande Instance) for the adverse consequences of facts forming the subject of the investigation by the Competition Authority. In an order dated 16 December 2014, the pre-trial judge declared a stay of proceedings while waiting for the decision from the Competition Authority.
In July 2015, the Anti-trust division of the United States Department of Justice opened a criminal investigation into potential anti-competitive practices, specifically a price agreement, in the United States drywall industry. This investigation followed complaints filed in late 2012 in the form of class actions in the civil courts against eight drywall manufacturers in the sector, including CertainTeed, by some of their customers.
On the basis of testimony and documents submitted in the civil proceedings, CertainTeed and its attorneys have not identified any element that might create liability for CertainTeed, and as a result filed a motion for summary judgment in May 2015 in order to end the civil proceedings. This application was accepted on 18 February 2016 by the competent court. An appeal against this decision is still possible.
Levels of PFOA (perfluorooctanoic acid) in excess of U.S. Environmental Protection Agency (EPA) or state health advisories have been found in municipal water systems and private wells near current Saint-Gobain Performance Plastics (SG PPL) facilities in Hoosick Falls (New York) and Merrimack (New Hampshire), and two former facilities in North Bennington (Vermont) in the United States. PFOA and PTFE (polytetrafluorethylene) have never been manufactured by these plants. SG PPL is a processor of PTFE which it purchases from third party suppliers and which in the past contained traces of PFOA.
SG PPL has voluntarily provided bottled water in all three communities, installed point-ofentry treatment systems to residents and businesses in the Hoosick Falls and North Bennington areas, and installed carbon filtration systems on the municipal water supply in Hoosick Falls. In addition, it has voluntarily committed to fund water line extensions in certain communities in the Merrimack and Bennington areas. The investigations are on-going and the scope of responsibility for SG PPL arising from environmental remediation and clean-up obligations at these sites has not yet been established. Without admitting liability, SGPPL has signed consent orders with the environmental regulators in New York and Vermont pursuant to which SGPPL has agreed to complete investigations and implement interim remediation measures. Responsibility, if any, is expected to be shared with other parties as regards in particular the Hoosick Falls' site.
PFOA-related lawsuits alleging both health-related and economic damages claims have been filed in civil courts in New York, New Hampshire and Vermont, some of which are in the form of proposed class actions. It is difficult to predict the timing or outcome of any such litigation, or whether any additional litigation will be brought against SG PPL.
On 31 December 2017, the provision recorded by the Company in respect of this matter amounts to € 44 million.
At the time of the refurbishing of the Grenfell Tower in 2015, Celotex sold through distributors an insulation product for use as part of multicomponent ventilated rainscreen cladding system.
Following the Grenfell Tower fire on 14 June 2017, investigations of British authorities are ongoing in this context, involving Celotex as well as more than 60 other companies or organizations.
Some of the Group's companies may also be the subject of other claims made by their employees or by the tax authorities. Apart from the proceedings and litigation described above, to the best of the Company's knowledge no other government, court or arbitration proceedings exist (including pending proceedings) which could have or which has had, in the last 12 months, a significant impact on the financial or profit position of the Company and/or Group.
The Group transfers its risks to the insurance market when this is the most efficient solution. Default by one or more of the Group's insurers could therefore lead to financial losses which could have a material adverse effect on the Group's financial position and results.
The Group's policy is to implement preventive programs and purchase insurance coverage to protect its assets and revenue. This policy is embedded within a Group doctrine, which takes into account current conditions in the insurance market. It is determined, coordinated and overseen by the Risks and Insurance Department. It defines insurance criteria for the most significant risks, such as property and business interruption, as well as general and product liability.
For other types of coverage, such as automobile fleet insurance, the Risks and Insurance Department advises the individual operating units on policy content, broker selection and which market to consult. These are called "high-frequency" risks, for which claims are monitored internally and appropriate action taken. The 2016 policies were renewed as 2017 policies.
Companies acquired during the year have been integrated into existing insurance programmes.
Group's non-excluded property and casualty risks and business interruption risks arising from accidental damage to insured assets are covered by a worldwide insurance program.
The programmes meet the insurance criteria laid down by the Department, specifically:
These criteria take into account current insurance offerings, which exclude certain risks and cover natural disasters like floods, storms, earthquakes or tsunamis only up to a certain amount.
In extreme scenarios, such events could have a substantial uninsured financial impact in terms of both reconstruction costs and lost production costs.
The Risks and Insurance Department's policy is based on the findings of the annual audits carried out by independent prevention experts recognised by the Group's insurers. These audits give a clear picture of the risk exposure of the main sites in the event of a fire or other incident, and provide an estimate of the financial consequences in a worst-case scenario.
Individual claims in excess of €12.5 million are transferred to the insurance market for all Group subsidiaries.
Claims up to this amount are self-insured through the Group's captive insurance company, which purchases reinsurance coverage against increases in frequency and/or severity rates.
Should the Group not be able to recover losses resulting from property damage, casualty or business interruption under its insurance policies, this could have a material adverse effect on the Group's financial position and results.
A programme provides coverage for third-party personal injury and property damage claims for which the Group would be legally held liable. This program comprises several programmes for the lower tranches of coverage.
The first programme covers all subsidiaries and has a coverage limit of €100 million. Subsidiaries situated in the geographical territory of the United States and Canada Delegation have a deductible of USD 50 million. The program's exclusions are consistent with market practice and concern in particular potentially carcinogenic substances and gradual pollution.
In order to satisfy local regulatory requirements, a policy is taken out in each country in which the Group has a significant presence. Local policies are backed up by the master policy issued in Paris, which can be activated when local coverage proves inadequate.
The second programme covers subsidiaries located in the geographic area covered by the United States and Canada Delegation and has a coverage limit of USD 50 million. This programme is structured differently to deal with the specific nature of liability risks in the United States. It is divided into several lines of coverage, requiring it to be placed, if needed, on the London insurance market. Exclusions are in line with current market practice in the United States and primarily concern contractual liability, pollution and third-party consequential loss.
In addition to the two programmes described above, a number of supplementary programmes have been set up in order to bring the total coverage limit to a level considered compatible with the Group's businesses.
Within the operating units, action is taken to raise awareness of liability risks, and the units are motivated to control costs by assuming a deductible that does not, however, constitute selfinsurance. The Group also runs a risk prevention programme at its operating units with the support of the Environment, Health and Safety Department.
Joint ventures and companies not controlled by the Group are excluded from the above programmes and purchase separate insurance coverage.
A wide range of Notes may be issued under the Programme. A number of these Notes may have features which contain particular risks for potential investors. Set out below is a description of the most common such features:
An optional redemption feature of Notes is likely to limit their market value. During any period when the Issuer may elect to redeem Notes, the market value of those Notes generally will not rise substantially above the price at which they can be redeemed. This also may be true prior to any redemption period.
The Issuer may be expected to redeem Notes when its cost of borrowing is lower than the interest rate on the Notes. At those times, an investor generally would not be able to reinvest the redemption proceeds at an effective interest rate as high as the interest rate on the Notes being redeemed and may only be able to do so at a significantly lower rate. Potential investors should consider reinvestment risk in light of other investments available at that time.
Variable Rate Notes with a multiplier or other leverage factor
Notes with variable interest rates can be volatile investments. If they are structured to include multipliers or other leverage factors, or caps or floors, or any combination of those features or other similar related features, their market values may be even more volatile than those for securities that do not include those features.
Inverse Floating Rate Notes have an interest rate equal to a fixed rate minus a rate based upon a reference rate such as LIBOR. The market values of those Notes typically are more volatile than market values of other conventional floating rate debt securities based on the same reference rate (and with otherwise comparable terms). Inverse Floating Rate Notes are more volatile because an increase in the reference rate not only decreases the interest rate of the Notes, but may also reflect an increase in prevailing interest rates, which further adversely affects the market value of these Notes.
Fixed/Floating Rate Notes may bear interest at a rate that converts from a fixed rate to a floating rate, or from a floating rate to a fixed rate. Where the Issuer has the right to effect such a conversion, this will affect the secondary market and the market value of the Notes since the Issuer may be expected to convert the rate when it is likely to produce a lower overall cost of borrowing. If the Issuer converts from a fixed rate to a floating rate in such circumstances, the spread on the Fixed/Floating Rate Notes may be less favourable than then prevailing spreads on comparable Floating Rate Notes tied to the same reference rate. In addition, the new floating rate at any time may be lower than the rates on other Notes. If the Issuer converts from a floating rate to a fixed rate in such circumstances, the fixed rate may be lower than then prevailing rates on its Notes.
The market values of securities issued at a substantial discount or premium from their principal amount tend to fluctuate more in relation to general changes in interest rates than do prices for conventional interest-bearing securities. Generally, the longer the remaining term of the securities, the greater the price volatility as compared to conventional interest-bearing securities with comparable maturities.
In cases where an investor purchases securities at an issue price that is higher than or equal to the sum of the redemption amount and any interest payments on the securities, potential investors may also face the risk of no yield or a negative yield in relation to such securities.
Range Accrual Notes are securities which pay interest linked to the performance of the reference asset(s) that accrues only on days during a pre-set period on which the performance of the reference asset(s) is within a certain pre-determined range. Consequently, the interest payable will be lower where the performance of the reference asset(s) was trading outside the pre-determined range during such interest period (dependent on the amount of days the reference asset is outside the pre-determined range), and may be zero depending on the terms of the Notes. The market value of the Notes may be adversely affected by rising implied volatility of the reference asset(s) or movements in the performance of such reference asset(s) which indicate that the performance of the reference asset(s) will be outside the pre-determined range during a relevant period. The market value of the Notes may also be affected by the absolute amount of interest payable on the Notes.
Inflation indexes may go down as well as up. Where Notes in respect of which the amount of interest payable is subject to adjustment by reference to movements in an inflation index are issued, a decrease in such inflation index over the reference period will reduce the amount of interest payable in respect of such Notes. In a deflationary environment, the annual interest received may be lower than the rate of interest specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement). Where the amount payable upon redemption of the Notes is subject to adjustment by reference to movements in an inflation index, a decrease in the specified inflation index over the reference period may reduce the amount to be repaid upon redemption of the Notes to less than the nominal amount of the Notes. Investors as a consequence may lose the value of their entire investment or part of it. The historical experience of the relevant inflation index should not be viewed as an indication of future performance of that inflation index during the term of any Inflation Linked Notes.
Potential conflicts of interest may exist between the Calculation Agent and Noteholders (including a Dealer acting as a Calculation Agent), including with respect to certain determinations and judgements that such Calculation Agent may make pursuant to the Terms and Conditions of the Notes that may influence the amounts receivable by the Noteholders during the term of the Notes and upon their redemption.
The rate of interest on the Notes (collectively, the "Benchmark Notes") may be calculated on the basis of the London Interbank Offered Rate ("LIBOR"), the Euro Interbank Offered Rate ("EURIBOR") or any other reference rate specified in the relevant Final Terms (any such reference rate, a "Benchmark"), or by reference to a swap rate that is itself based on a Benchmark. Accordingly, changes in the method by which any Benchmark is calculated or the discontinuation of any Benchmark may impact the rate of interest applicable to Benchmark Notes bearing interest on the basis of such Benchmark, and thus their value.
LIBOR, EURIBOR and other Benchmarks are subject to national and international regulatory reforms. Some of these reforms are already effective while others are still to be implemented. Following the implementation of any such reforms, the manner of the administration or determination of such Benchmarks may change with the result that they may perform differently than in the past, or their calculation method may be revised, or they could be eliminated entirely.
In June 2016, the European Union adopted Regulation (EU) 2016/1011 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds (the "Benchmark Regulation"). The Benchmark Regulation entered into force on 20 June 2016 with the majority of its provisions applying from 1 January 2018. It provides that administrators of benchmarks in the European Union (such as ICE Benchmark Administration Limited and the European Money Market Institute, which currently administer LIBOR and EURIBOR, respectively) generally must be authorised by or registered with regulators no later than 1 January 2020, and that they must comply with a code of conduct designed primarily to ensure reliability of input data, governing issues such as conflicts of interest, internal controls and benchmark methodologies. The Benchmark Regulation could have a material impact on the Benchmark Notes, in particular, if the terms of any applicable Benchmark are changed in order to comply with the requirements of the Benchmark Regulation.
Benchmark administrators in the United Kingdom will be required to comply with the Benchmark Regulation so long as the United Kingdom remains part of the European Union (and possibly thereafter, depending on the terms of withdrawal), and will also be required to comply with U.K. national requirements. U.K. national requirements may have a particularly significant impact on the calculation of LIBOR (or whether LIBOR continues to exist as a Benchmark). On 27 July 2017, the U.K. Financial Conduct Authority (the "FCA") announced that it will no longer persuade or compel banks to submit rates for the calculation of the LIBOR after 2021. The FCA announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021.
It is not possible to predict the effect of any reforms to LIBOR, EURIBOR or any other Benchmark. Changes in the methods pursuant to which LIBOR, EURIBOR or any other Benchmark is determined, or the announcement that a Benchmark will be replaced with a successor or alternative rate, or the permanent discontinuation of a Benchmark, could result in a sudden or prolonged increase or decrease in the reported values of such Benchmark, increased volatility or other effects. If this were to occur, it could have an adverse impact on the Group's ability to service the Benchmark Notes. The rate of interest on and the trading value of the Benchmark Notes could also be adversely affected due to the uncertainty regarding the future of or changes to the Benchmarks. In addition, the risk that it becomes unlawful or impermissible (for regulatory reasons) for either the Calculation Agent or the Issuer to determine or use such Benchmark cannot be excluded.
Pursuant to the Terms and Conditions of any Benchmark Notes, if the Issuer or the Calculation Agent determines at any time that the relevant Benchmark that constitutes the reference rate for such Notes has been discontinued, the Issuer will appoint a benchmark determination agent (which may be one of the Dealers), who will determine a replacement reference rate for the relevant Benchmark Notes, acting in good faith, in a commercially reasonable manner and as an independent expert, as well as any necessary changes to the Business Day Convention, the definition of "Business Day", the remaining Interest Determination Dates, the Day Count Fraction and any method for calculating the replacement reference rate, including any adjustment factor needed to make such replacement reference rate comparable to the relevant Benchmark. Such replacement reference rate will (in the absence of manifest error) be final and binding, and will apply to the Benchmark Notes without any requirement that the Issuer obtain consent of any Noteholders.
The replacement reference rate may perform differently from the discontinued Benchmark. For example, there are currently proposals to replace LIBOR (which generally has a term of one, three or six months) with an overnight rate. Similarly, proposals have been made to use a rate on highly-rated government obligations to replace LIBOR, which is currently based on interbank lending rates and carries an implicit element of credit risk of the banking sector. There can also be no assurance that any adjustment factor applied to any series of the Benchmark Notes intended to make the replacement reference rate comparable to the relevant Benchmark will adequately compensate for such differences. These could in turn impact the rate of interest on and trading value of the affected Benchmark Notes.
If the benchmark determination agent is unable to determine an appropriate replacement reference rate for any Benchmark and it is not possible to determine a value for a given Benchmark, the relevant interest rate on such Notes will be the last available setting of such Benchmark plus the applicable Margin, effectively converting such Notes into fixed rate obligations.
It is possible that, if a Benchmark is discontinued, it will take some time before a clear successor rate is established in the market. Accordingly, the Terms and Conditions of the Benchmark Notes provides that, following the designation of a replacement reference rate, if the benchmark determination agent appointed by the Issuer considers that such replacement rate is no longer substantially comparable to the Benchmark or does not constitute an industryaccepted successor rate, the Issuer will re-appoint a benchmark determination agent (which may or may not be the same entity as the original benchmark determination agent) for the purposes of confirming the replacement reference rate or determining a substitute replacement reference rate (despite the continued existence of the initial replacement reference rate). Any such substitute replacement reference rate, once designated pursuant to the Terms and Conditions, will apply to the affected Benchmark Notes without the consent of their holders. This could impact the rate of interest on and trading value of the affected Benchmark Notes. In addition, any holders of such Benchmark Notes that enter into hedging instruments based on the original replacement reference rate may find their hedges to be ineffective, and they may incur costs replacing such hedges with instruments tied to the new replacement reference rate.
Set out below is a brief description of certain risks relating to the Notes generally:
The conditions of the Notes contain provisions for calling meetings of Noteholders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Noteholders including Noteholders who did not attend and vote at the relevant meeting and Noteholders who voted in a manner contrary to the majority.
A Noteholder's effective yield on the Notes may be diminished by the tax impact on that Noteholder of its investment in the Notes. Payments of interest on the Notes, or profits realised by the Noteholder upon the sale or repayment of the Notes, may be subject to taxation in the Noteholder's home jurisdiction or in other jurisdictions in which it is required to pay taxes. Certain French, UK and EU tax matters relating to an investment in the Notes are summarised under the "Taxation" section below; however, that section does not contain a comprehensive description of the tax impact of an investment in the Notes and the tax impact on an individual Noteholder may differ from the impact described in that section. The Issuer advises all investors to contact their own tax advisors for advice on the tax impact of an investment in the Notes.
On 14 February 2013, the European Commission published a proposal (the "Commission's Proposal") for a Directive for a common financial transaction tax (the "FTT") in Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovenia, Slovakia and Spain (the "Participating Member States"). However, Estonia has since stated that it will not participate.
The Commission's Proposal has very broad scope and could, if introduced in its current form, impose a tax at generally not less than 0.1%, generally determined by reference to the amount of consideration paid, on certain dealings in Notes (including secondary market transactions) in certain circumstances. The issuance and subscription of Notes should, however, be exempt. The mechanism by which the tax would be applied and collected is not yet known, but if the proposed directive or any similar tax is adopted, transactions in the Notes would be subject to higher costs, and the liquidity of the market for the Notes may be diminished.
Under the Commission's Proposal, the FTT could apply in certain circumstances to persons both within and outside of the Participating Member States. Generally, it would apply to certain dealings in Notes where at least one party is a financial institution, and at least one party is established in a Participating Member State. A financial institution may be, or be deemed to be, "established" in a Participating Member State in a broad range of circumstances, including (a) by transacting with a person established in a Participating Member State or (b) where the financial instrument which is subject to the dealings is issued in a Participating Member State.
The FTT proposal remains subject to negotiation between the Participating Member States (excluding Estonia) and the scope of any such tax is uncertain. It may therefore be altered prior to any implementation, the timing of which remains unclear. Additional EU Member States may decide to participate and/or certain of the Participating Member States may decide to withdraw. Prospective holders of Notes are advised to seek their own professional advice in relation to the consequences of the FTT associated with subscribing for, purchasing, holding and disposing of the Notes.
The conditions of the Notes are based on English law in effect as at the date of this Base Prospectus. No assurance can be given as to the impact of any possible judicial decision or change to English law or administrative practice after the date of this Base Prospectus.
In relation to any issue of Notes which have a minimum denomination and are tradeable in the clearing systems in amounts above such minimum denomination which are smaller than it, should definitive Notes be required to be issued, a holder who does not have an integral multiple of the minimum denomination in his account with the relevant clearing system at the relevant time may not receive all of his entitlement in the form of definitive Notes unless and until such time as his holding becomes an integral multiple of the minimum denomination.
Set out below is a brief description of the principal market risks, including liquidity risk, exchange rate risk, interest rate risk and credit risk:
Notes may have no established trading market when issued, and one may never develop. If a market does develop, it may not be very liquid. Therefore, investors may not be able to sell their Notes easily or at prices that will provide them with a yield comparable to similar investments that have a developed secondary market. This is particularly the case for Notes that are especially sensitive to interest rate, currency or market risks, are designed for specific investment objectives or strategies or have been structured to meet the investment requirements of limited categories of investors. These types of Notes generally would have a more limited secondary market and more price volatility than conventional debt securities. Illiquidity may have a severely adverse effect on the market value of Notes.
The Issuer will pay principal and interest on the Notes in the currency specified in the applicable Final Terms (or, in the case of exempt Notes, in the applicable Pricing Supplement) (the "Specified Currency"). This presents certain risks relating to currency conversions if an investor's financial activities are denominated principally in a currency or currency unit (the "Investor's Currency") other than the Specified Currency. These include the risk that exchange rates may significantly change (including changes due to devaluation of the Specified Currency or revaluation of the Investor's Currency) and the risk that authorities with jurisdiction over the Investor's Currency may impose or modify exchange controls. An appreciation in the value of the Investor's Currency relative to the Specified Currency would decrease (1) the Investor's Currency-equivalent yield on the Notes, (2) the Investor's Currencyequivalent value of the principal payable on the Notes and (3) the Investor's Currencyequivalent market value of the Notes.
Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate. As a result, investors may receive less interest or principal than expected, or no interest or principal.
Investment in Fixed Rate Notes involves the risk that subsequent changes in market interest rates may adversely affect the value of the Fixed Rate Notes.
One or more independent credit rating agencies may assign credit ratings to the Notes. There is no guarantee that such ratings will be assigned or maintained or that such credit ratings reflect the potential impact of all risks related to an investment in the Notes. Rating agencies may change their rating methodology making it more difficult to maintain a certain credit rating. Accordingly, a credit rating is not a recommendation to buy, sell or hold Notes and may be revised or withdrawn by the relevant rating agency at any time. Any such revision or withdrawal could adversely affect the market value of the Notes.
In general, European regulated investors are restricted under the CRA Regulation from using credit ratings for regulatory purposes unless such ratings are issued by a credit rating agency established in the European Union and registered under the CRA Regulation (and such registration has not been withdrawn or suspended), subject to transitional provisions that apply in certain circumstances whilst the registration application is pending. Such general restriction will also apply in the case of credit ratings issued by non-EU credit rating agencies, unless the relevant credit ratings are endorsed by an EU-registered credit rating agency or the relevant non-EU rating agency is certified in accordance with the CRA Regulation (and such endorsement action or certification, as the case may be, has not been withdrawn or suspended). Certain information with respect to the credit rating agencies and ratings will be disclosed in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement).
The change of control definition in Condition 10 (Change of Control) includes a reference, inter alia, to the de facto control resulting from the direct or indirect holding of a certain amount of voting rights which allow the holder thereof to determine in fact decisions taken at ordinary or extraordinary shareholders meetings. Such de facto control will depend on a number of factors which can only be determined at the relevant time taking into account all of the relevant surrounding circumstances arising and, accordingly, its precise application in any given set of circumstances would require determinations of questions of fact which in some cases may be complex and subject to dispute.
Words and expressions defined in the section "Terms and Conditions of the Notes" shall have the same meanings in this overview.
| Issuer: | Compagnie de Saint-Gobain, a French société anonyme |
|---|---|
| Description: | Medium Term Note Programme |
| Arranger: | Nomura International plc |
| Dealers: | Banco Bilbao Vizcaya Argentaria, S.A. Banco Santander, S.A. BNP Paribas Citigroup Global Markets Limited Crédit Agricole Corporate and Investment Bank Goldman Sachs International ING Bank N.V. Belgian Branch J.P. Morgan Securities plc MUFG Securities EMEA plc NatWest Markets Plc Nomura International plc Société Générale |
| and any other Dealers appointed in accordance with the Programme Agreement. |
|
| Certain Restrictions: | Each issue of Notes denominated in a currency in respect of which particular laws, guidelines, regulations, restrictions or reporting requirements apply will only be issued in circumstances which comply with such laws, guidelines, regulations, restrictions or reporting requirements from time to time (see "Subscription and Sale and Transfer and Selling Restrictions") including the following restrictions applicable at the date of this Base Prospectus. |
| Notes having a maturity of less than one year | |
| Notes having a maturity of less than one year will, if the proceeds of the issue are accepted in the United Kingdom, constitute deposits for the purposes of the prohibition on accepting deposits contained in section 19 of the Financial Services and Markets Act 2000 unless they are issued to a limited class of professional investors and have a denomination of at least £100,000 or its equivalent, see "Subscription and Sale and Transfer and Selling Restrictions". |
|
| Issuing and Principal Paying Agent: |
Deutsche Bank AG, London Branch |
| Programme Size: | Up to €15,000,000,000 (or its equivalent in other currencies calculated as described in the Programme Agreement) outstanding at any time. The Issuer may increase or decrease the amount of the Programme in accordance with the terms of the Programme Agreement. |
|---|---|
| Distribution: | Notes may be distributed by way of private or public placement and in each case on a syndicated or non syndicated basis. |
| Currencies: | Notes may be denominated in Euro, Sterling, U.S. dollars, Yen and, subject to any applicable legal or regulatory restrictions, any other currency agreed between the Issuer and the relevant Dealer and provided for in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) (the "Specified Currency"). |
| Maturities: | Notes will have such maturities as may be agreed between the Issuer and the relevant Dealer, subject to such minimum or maximum maturities as may be allowed or required from time to time by the relevant central bank (or equivalent body) or any laws or regulations applicable to the Issuer or the relevant Specified Currency. |
| Issue Price: | Notes may be issued on a fully-paid basis and at an issue price which is at par or at a discount to, or premium over, par. |
| Form of Notes: | The Notes will be issued in bearer or registered form as described in "Terms and Conditions of the Notes". Registered Notes will not be exchangeable for Bearer Notes and vice versa. |
| Fixed Rate Notes: | "Fixed Rate Notes" bear a fixed interest that will be payable on such date or dates as may be agreed between the Issuer and the relevant Dealer and on redemption and will be calculated on the basis of such Day Count Fraction under the Conditions as may be agreed between the Issuer and the relevant Dealer. |
| Floating Rate Notes: | "Floating Rate Notes" will bear interest, according to the Conditions, at a rate determined: |
| (a) on the same basis as the floating rate under a notional interest rate swap transaction in the relevant Specified Currency governed by an agreement incorporating the 2006 ISDA Definitions (as published by the International Swaps and Derivatives Association, Inc., and as amended and updated as at the Issue Date |
of the first Tranche of the Notes of the relevant Series); (b) on the basis of a reference rate appearing on the agreed screen page of a commercial quotation service; or (c) on the basis of a CMS reference rate ("CMS Linked Notes"). The margin (if any) relating to such floating rate will be agreed between the Issuer and the relevant Dealer for each Series of Floating Rate Notes. Range Accrual Notes: The Rate of Interest for Fixed Rate Notes and Floating Rate Notes (including CMS Linked Notes) may be determined by multiplying the applicable Rate of Interest payable from time to time in respect of such Notes by a range accrual factor, as specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) ("Range Accrual Notes"). Inflation Linked Notes: Payments of principal and/or interest in respect of "Inflation Linked Notes" will be calculated by reference to an Inflation Factor, derived from either: (i) the UK Retail Price Index (all items) published by the Office of National Statistics (the "RPI"); (ii) the non-revised Harmonised Index of Consumer Prices excluding tobacco, or the relevant successor index, measuring the rate of inflation in the European Monetary Union excluding tobacco published by Eurostat (the "HICP"); (iii) the consumer price index (excluding tobacco) for all households in metropolitan France, as calculated and published monthly by the Institut National de la Statistique et des Etudes Economiques (the "French CPI"); (iv) the consumer price index (excluding tobacco) in Italy, ("Indice dei prezzi al consumo per famiglie di operai e impiegati (FOI) senza tabacchi") published by Istituto nazionale di statistica (the "Italian CPI"); or (v) the All Items Consumer Price Index for All Urban Consumers (CPI-U) before seasonal adjustment published by the U.S. Bureau of Labor Statistic (the "U.S. CPI").
| Other provisions in relation to Floating Rate Notes and Inflation Linked Notes: |
Floating Rate Notes (including CMS Linked Notes) and Inflation Linked Notes may also have a maximum interest rate, a minimum interest rate or both. Interest on Floating Rate Notes (including CMS Linked Notes) and Inflation Linked Notes in respect of each Interest Period, as agreed prior to issue by the Issuer and the relevant Dealer, will be payable on such Interest Payment Dates, and will be calculated on the basis of such Day Count Fraction, as may be agreed between the Issuer and the relevant Dealer. |
|---|---|
| Zero Coupon Notes: |
"Zero Coupon Notes" will be offered and sold at a discount to, or premium over, their nominal amount and will not bear interest. |
| Redemption: | The applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) will indicate either that the relevant Notes cannot be redeemed prior to their stated maturity (other than for taxation reasons or following an Event of Default or, in the case of Inflation Linked Notes only, for reasons linked to the relevant Index) or that such Notes will be redeemable at the option of the Issuer and/or the Noteholders upon giving notice to the Noteholders or the Issuer, as the case may be, on a date or dates specified prior to such stated maturity and at a price or prices and on other terms pursuant to the Conditions. |
| Notes having a maturity of less than one year may be subject to restrictions on their denomination and distribution, see "Certain Restrictions–Notes having a maturity of less than one year" above. |
|
| Denomination of Notes: | The Notes will be issued in such denominations as may be agreed between the Issuer and the relevant Dealer save that the minimum denomination of each Note will be such amount as may be allowed or required from time to time by the relevant central bank (or equivalent body) or any laws or regulations applicable to the relevant Specified Currency, see "Certain Restrictions–Notes having a maturity of less than one year" above and save that, if such allowed or required minimum denomination is below €100,000, the minimum denomination of each Note will be €100,000 (or, if the Notes are denominated in a currency other than Euro, the equivalent amount in such currency). |
| Taxation: | All payments in respect of the Notes and any related Coupons shall be made free and clear of, and without |
| withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges imposed or levied by or on behalf of the Republic of France, or any authority therein or thereof, having the power to tax, unless the withholding or deduction of such taxes is required by law. If French law should require that payments of principal or interest in respect of any Note or Coupon be subject to withholding or deduction in respect of any present or future taxes, duties, assessments or governmental charges of whatever nature, the Issuer will (subject to certain limited exceptions), to the fullest extent then permitted by law, pay such additional amounts as shall result in receipt by the Noteholders or, if applicable, the Couponholders, as the case may be, of such amounts as would have been received by them had no such withholding or deduction been required. |
|
|---|---|
| Negative Pledge: | The terms of the Notes will contain a negative pledge provision as further described in Condition 4 (Negative Pledge). |
| Cross Default: | The terms of the Notes will contain a cross default provision as further described in Condition 13 (Events of Default). |
| Rating: | The Issuer's general long term debt ratings are (P)Baa2 by Moody's Deutschland GmbH and BBB by S & P Global Ratings Europe Limited. The Programme has been rated (P)Baa2 by Moody's Deutschland GmbH and BBB by S & P Global Ratings Europe Ltd. Moody's Deutschland GmbH is established in the European Union and registered under the CRA Regulation. S & P Global Ratings Europe Limited is established in the European Union and registered under the CRA Regulation. As such, Moody's Deutschland GmbH and S & P Global Ratings Europe Limited are included in the list of credit rating agencies published by the European Securities and Markets Authority ("ESMA") on its website in accordance with the CRA Regulation. The rating of certain Series of Notes to be issued under the Programme may be specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement). Where an issue of Notes is rated, its rating will not necessarily be the same as the rating applicable to the Programme or to the Issuer. A credit rating is not a recommendation to buy, sell or hold Notes and may |
be revised or withdrawn by the relevant rating agency at any time. Any such revision or withdrawal could adversely affect the market value of the Notes. Whether or not each credit rating applied for in relation to a relevant Series of Notes will be issued by a credit rating agency established in the European Union and registered under the CRA Regulation will be disclosed in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement). 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 June 7, 2010 which has submitted an application for registration in accordance with the CRA Regulation and such registration is not refused. Listing and admission to trading – Notes other than Exempt Notes: Application has been made to the UK Listing Authority for Notes issued under the Programme to be admitted to the Official List and to the London Stock Exchange for such Notes to be admitted to trading on the London Stock Exchange's Regulated Market. Notes may also be listed or admitted to trading, as the case may be, on Euronext Paris, if agreed between the Issuer and the relevant Dealer in relation to the Series. Euronext Paris is a regulated market for the purposes of Directive 2004/39/EC (the "MiFID"). The applicable Final Terms will state on which stock exchanges and/or markets the relevant Notes are to be listed and/or admitted to trading. Exempt Notes: Exempt Notes are either (i) not admitted to the Official List or to trading on the London Stock Exchange's regulated market or (ii) listed or admitted to trading on other stock exchanges or markets, as may be agreed between the Issuer and the relevant Dealer(s). Passporting: Once this Prospectus has been approved by the Financial Conduct Authority in the United Kingdom, the Issuer will request the Financial Conduct Authority to passport it to France by way of sending a certificate of approval to Autorité des marchés financiers. after which the Prospectus can be used for the admission to trading of Notes in France.
| Governing Law: | The Notes will be governed by, and construed in accordance with, English law. |
|---|---|
| Selling Restrictions: | There are restrictions on the offer, sale and transfer of the Notes in the United States, the European Economic Area (including the United Kingdom and France), Japan and such other restrictions as may be required in connection with the offering and sale of a particular Tranche of Notes, see "Subscription and Sale and Transfer and Selling Restrictions". |
This Base Prospectus should be read and construed in conjunction with:
Any documents themselves incorporated by reference in the documents incorporated by reference in this Base Prospectus shall not form part of this Base Prospectus for the purposes of the Prospectus Directive.
Any statement contained in the Base Prospectus or in any of the documents incorporated by reference herein, and forming part of the Base Prospectus, shall be deemed to be modified or superseded for the purpose of this Base Prospectus to the extent that a statement contained in any supplement thereto or in any document subsequently incorporated by reference, including the documents incorporated by reference by this Base Prospectus, modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Base Prospectus.
Certain information contained in the documents listed above has not been incorporated by reference in this Base Prospectus. Such information is either (i) not considered by the Issuer to be relevant for prospective investors in the Notes or (ii) is covered elsewhere in this Base Prospectus.
For ease of reference, the table below sets out the relevant page references for the English language translation of the audited consolidated annual financial statements of the Issuer as at and for the financial years ended 31 December 2016 and 2017 respectively, together with the English language translation of the audit reports. These English language translations are free translations of the French language original versions of such documents. The non-incorporated parts of the documents incorporated by reference are either not relevant for investors or are covered elsewhere in this Base Prospectus.
| Statutory Auditors' Report on the Consolidated Financial | 2nd-5th unnumbered page of the Financial |
|---|---|
| Statements | Statements 2016 |
| Consolidated Balance Sheet | Page 3, Financial Statements 2016 |
| Consolidated Income Statement | Page 4, Financial Statements 2016 |
| Statement of Recognised Income and Expense | Page 5, Financial Statements 2016 |
| Consolidated Cash Flow Statement | Page 6, Financial Statements 2016 |
| Consolidated Statement of Changes in Equity | Pages 7,Financial Statements 2016 |
| Notes to the Consolidated Financial Statements | Pages 8-63, Financial Statements 2016 |
| Statutory Auditors' Report on the Consolidated Financial | 3rd-9th unnumbered page of the Financial |
|---|---|
| Statements | Statements 2017 |
| Consolidated Balance Sheet | Page 3, Financial Statements 2017 |
| Consolidated Income Statement | Page 4, Financial Statements 2017 |
| Statement of Recognised Income and Expense | Page 5, Financial Statements 2017 |
| Consolidated Cash Flow Statement | Page 6, Financial Statements 2017 |
| Consolidated Statement of Changes in Equity | Pages 7, Financial Statements 2017 |
| Notes to the Consolidated Financial Statements | Pages 8-65, Financial Statements 2017 |
Copies of documents deemed to be incorporated by reference in this Base Prospectus may be obtained from (i) the website of the Issuer at https://www.saint-gobain.com/en/finance, (ii) the registered office of the Issuer, (iii) the website of the UK National Storage Mechanism, http://www.morningstar.co.uk/uk/NSM, or (iv) from the specified office of the Paying Agent for the time being in London.
Following the publication of this Base Prospectus a supplement may be prepared by the Issuer and approved by the UK Listing Authority in accordance with Article 16 of the Prospectus Directive. Statements contained in any such supplement (or contained in any document incorporated by reference therein) shall, to the extent applicable (whether expressly, by implication or otherwise), be deemed to modify or supersede statements contained in this Base Prospectus or in a document which is incorporated by reference in this Base Prospectus. Any statement so modified or superseded shall not, except as so modified or superseded, constitute a part of this Base Prospectus.
The Issuer will, in the event of any significant new factor, material mistake or inaccuracy relating to information included in this Base Prospectus which is capable of affecting the assessment of any Notes, prepare a supplement to this Base Prospectus or publish a new prospectus for use in connection with any subsequent issue of Notes. The Issuer has undertaken to the Dealers in the Programme Agreement (as defined in "Subscription and Sale and Transfer and Selling Restrictions") that it will comply with section 87G of the Financial Services and Markets Act 2000, as amended.
[MIFID II PRODUCT GOVERNANCE/ PROFESSIONAL INVESTORS AND ECPS ONLY TARGET MARKET – Solely for the purposes of the manufacturer's product approval process, the target market assessment in respect of the Notes has led to the conclusion that: (i) the target market for the Notes is eligible counterparties and professional clients only, each as defined in Directive 2014/65/EU (as amended, "MiFID II"); and (ii) all channels for distribution of the Notes to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the Notes (a "distributor") should take into consideration the manufacturer's target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or refining the manufacturer's target market assessment) and determining appropriate distribution channels.]
[PROHIBITION OF SALES TO EEA RETAIL INVESTORS – The Notes 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"). 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"); (ii) a customer within the meaning of Directive 2002/92/EC (as amended, the "IMD"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Prospectus Directive (as defined below). Consequently, no key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPS Regulation.]
[Date]
Terms used herein shall be deemed to be defined as such for the purposes of the Conditions set forth in the Base Prospectus dated 13 July 2018 [and supplement(s) to it dated [●]] which [together] constitute(s) a base prospectus (the "Base Prospectus") for the purposes of the Prospectus Directive (Directive 2003/71/EC) (the "Prospectus Directive"). This document constitutes the Final Terms of the Notes described herein for the purposes of Article 5.4 of the Prospectus Directive and must be read in conjunction with the Base Prospectus. The Base Prospectus and any supplement(s) thereto will be published electronically on the website of the London Stock Exchange plc at http://www.londonstockexchange.com/exchange/news/marketnews/market-news-home.html. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of these Final Terms and the Base Prospectus.
[Terms used in this document are deemed to be defined as such for the purposes of the Conditions set forth in the base prospectus dated [original date] [and the supplemental prospectus dated [date]] (the "Conditions") and incorporated by reference into the Base Prospectus dated 13 July 2018 [and supplement(s) to it dated [●]]. This document constitutes the Final Terms of the Notes described in it for the purposes of Article 5.4 of Prospectus Directive (Directive 2003/71/EC) (the "Prospectus Directive") and must be read in conjunction with the Prospectus dated 13 July 2018 [and supplement(s) to it dated [●]], which [together] constitute[s] a base prospectus for the purposes of the Prospectus Directive (the "Base Prospectus"), including the Conditions which are extracted from the base prospectus dated [original date] [and the supplement(s) to it dated [●]]. The Base Prospectus and any supplement(s) thereto will be published electronically on the website of the London Stock Exchange plc at http://www.londonstockexchange.com/exchange/news/market-news/marketnews-home.html. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of these Final Terms and the Base Prospectus.
| 1. | (i) | Series Number: | [●] |
|---|---|---|---|
| (ii) | Tranche Number: | [●] | |
| 2. | Specified Currency: | [●] | |
| 3. | Aggregate Nominal Amount of Notes admitted to trading: |
||
| (i) | Series: | [●] | |
| (ii) | Tranche: | [●] | |
| 4. | Issue Price: | [●]%, of the Aggregate Nominal Amount [plus accrued interest from [●]] |
|
| 5. | (i) | Specified Denominations: | [€100,000] [and higher integral multiples of €1,000 in excess thereof] |
| (ii) | Calculation Amount: | [●] | |
| 6. | (i) | Issue Date: | [●] |
| (ii) | Interest Commencement | [●]/[Issue Date]/[Not Applicable] | |
| 7. | Date: Maturity Date: |
[●] | |
| 8. | Interest Basis: | [[●]% Fixed Rate]/[particular reference rate] +/- [●]% Floating Rate]/[Inflation Linked |
interest]/[[●] years [insert currency] CMS Reference Rate]/[Zero Coupon]
(further particulars specified below)
| 9. | Redemption/Payment Basis: | [Redemption at par]/[●]/[Inflation Linked Redemption] |
|
|---|---|---|---|
| 10. | Change of Interest Basis: | [Applicable, on [●]]/[Not Applicable] | |
| (i) | First Interest Basis: | [●] | |
| (ii) | Second Interest Basis: | [●] | |
| (iii) | Interest Basis Conversion Date: |
[●] [subject to adjustment in accordance with the Business Day Convention]/[subject to no adjustment] |
|
| 11. | Put/Call Options: | [Investor Put] / [Issuer Call] / [Not Applicable] [(further particulars specified below)] |
|
| 12. | Notes: | Date(s) of relevant corporate authorisations for issuance of |
[●] (Board Authorisation) and [●] (Decision to Issue) |
| 13. | Fixed Rate Note provisions | [Applicable]/[Not Applicable] |
|---|---|---|
| (i) | Rate(s) of Interest: | [●]%, per annum payable in arrear on each Interest Payment Date |
| (ii) | Interest Payment Date(s): | [●] in each year |
| (iii) | Fixed Coupon Amount(s): | [●] per Calculation Amount |
| (iv) | Broken Amount(s): | [●] per Calculation Amount, payable on the Interest Payment Date falling [in/on] [●] |
| (v) | Day Count Fraction: | [30/360]/[Actual/Actual (ICMA)] |
| (vi) | Determination Date(s): | [●] in each year |
| (vii) | Range Accrual: | [Applicable (further particulars specified below)]/[Not Applicable] |
| 14. | Floating Rate Note provisions | [Applicable]/[Not Applicable] |
| (i) | Interest Period(s): |
[●] |
| (ii) | Specified Interest Payment Dates: | [[●] in each year, subject to adjustment in accordance with the Business Day Convention set out in (iv) below] |
|---|---|---|
| (iii) | First Interest Payment Date: | [●] |
| (iv) | Business Day Convention: | [Floating Rate Convention]/[Following Business Day Convention]/[Modified Following Business Day Convention]/ [Preceding Business Day Convention]/[Not Applicable] |
| (v) | Business Centre(s): | [●] |
| (vi) | Manner in which the Rate(s) of Interest is/are to be determined: |
[Screen Rate Determination]/[ISDA Determination]/[CMS Rate] |
| (vii) | Party responsible for calculating the Rate(s) of Interest and/or Interest Amount (if not the Agent): |
[●] |
| (viii) | Screen Rate Determination: | [Applicable]/[Not Applicable] |
| • Reference Rate: | [LIBOR]/[EURIBOR]/[●] | |
| • Designated Maturity: | [●] | |
| • Relevant Screen Page: | [●] | |
| • Relevant Time: | [11.00 a.m. London time]/[11.00 a.m. Brussels time]/[●] |
|
| (ix) | ISDA Determination: | [Applicable]/[Not Applicable] |
| • Floating Rate Option: | [●] | |
| • Designated Maturity: | [●] | |
| • Reset Date: | [●] | |
| (x) | CMS Rate | [Applicable]/[Not Applicable] |
| • Multiplier: | [●] | |
| • First Relevant Screen Page: | [●] | |
| • First Relevant Time: | [●] |
| • First Designated Maturity: | [●] | |
|---|---|---|
| • Second Relevant Screen Page: | [●] | |
| • Second Relevant Time: | [●] | |
| • Second Reference Currency: | [●] | |
| • Second Designated Maturity: | [●] | |
| (xi) | Linear Interpolation: | [Not Applicable]/[Applicable: the Rate of Interest for the [long/short] [first/last] Interest Period shall be calculated using Linear Interpolation between [●] and [●] [●]] |
| (xii) | Margin(s): | [+/-] [●]% per annum |
| (xiii) | Minimum Rate of Interest: | [●] |
| (xiv) | Maximum Rate of Interest: | [●] |
| (xv) | Day Count Fraction: | [Actual/Actual]/[Actual/Actual (ISDA)]/[Actual/365(Fixed)]/[Actual/365 (Sterling)]/[Actual/360]/[30/360]/[360/360]/ [Bond Basis]/[30E/360]/[Eurobond Basis] |
| (xvi) | Interest Determination Date(s): | [●] |
| (xvii) | Range Accrual: | [Applicable(further particulars specified below)]/[Not Applicable] |
| 15. | Range Accrual Notes |
[Applicable]/[Not Applicable] |
| (i) | Accrual Condition Type: | [Single Rate Range Accrual]/[Spread Range Accrual] |
| (ii) | Range Accrual Floating Rate 1 | |
| (A) Screen Rate Determination: | [Applicable]/[Not Applicable] | |
| • Reference Rate: | [●] | |
| • Designated Maturity: | [●] | |
| • Relevant Screen Page: | [●] | |
| • Relevant Time: | [●] | |
| 45 |
| (B) ISDA Determination: | [Applicable]/[Not Applicable] | |
|---|---|---|
| • Floating Rate Option: | [●] | |
| • Designated Maturity: | [●] | |
| • Reset Date: | [●] | |
| (iii) | Range Accrual Floating Rate 2 (only applicable to Spread Range Accrual) |
[Applicable]/[Not Applicable] |
| (A) Screen Rate Determination: | [Applicable]/[Not Applicable] | |
| • Reference Rate: | [●] | |
| • Designated Maturity: | [●] | |
| • Relevant Screen Page: | [●] | |
| • Relevant Time: | [●] | |
| (B) ISDA Determination: | [Applicable]/[Not Applicable] | |
| • Floating Rate Option: | [●] | |
| • Designated Maturity: | [●] | |
| • Reset Date: | [●] | |
| (iv) | Lower Barrier: | [●]/[Not Applicable] |
| (v) | Upper Barrier: | [●]/[Not Applicable] |
| (vi) | Observation Period: | [As specified in the Condition 6.2(d)]/[●] |
| 16. | Inflation Linked Notes provisions | [Applicable]/[Not Applicable] |
| (i) | Index | [RPI]/[HICP]/[French CPI]/[Italian CPI]/[U.S. CPI] |
| (ii) | Interest Period(s) |
[●] |
| (iii) | Specified Interest Payment Dates: | [[●] in each year, subject to adjustment in accordance with the Business Day Convention set out in (iv) below] |
| (iv) | Business Day Convention: | [Floating Rate Convention]/[Following Business Day Convention]/[Modified Following Business Day Convention]/ [Preceding Business Day Convention]/[Not Applicable] 46 |
| (v) | Business Centre(s): | [●] |
|---|---|---|
| (vi) | Interest Determination Date: | [●] |
| (vii) | Rate of Interest: | [Condition 7.1(b)]/[Condition 7.1(c)] applies |
| (viii) | Margin: | [●]% per annum, subject to adjustment in accordance with Condition 7, payable in arrear on each Interest Payment Date |
| (ix) | Inflation Factor: | [Option A]/[Option B]/[Option C] applies |
| (x) | Initial Valuation date: | [●] |
| (xi) | Reference Month: | (i) Initial Valuation Date: the calendar month falling [●] month[s] prior to the Initial Valuation Date |
| (ii) relevant Interest Payment Date: the calendar month falling [●] month[s] prior to the relevant Interest Payment Date |
||
| (xii) | Index Sponsor: | [●] |
| (xiii) | Delay in publication and rebasing: |
[General Conditions 7.4(a)(i) and 7.4(c)(iv)(A) apply] / [Conditions 7.4(a)(ii) and 7.4(c)(iv)(B) specific to the French CPI apply] |
| (xiv) | Related Bond: | [●]/[Not applicable] |
| (xv) | Fallback Bond: | [●]/[Not applicable] |
| (xvi) | Day Count Fraction: | [Actual/Actual]/[Actual/Actual (ISDA)]/[Actual/365(Fixed)]/[Actual/365 (Sterling)]/[Actual/360]/[30/360]/[360/360]/ [Bond Basis]/[30E/360]/[Eurobond Basis] |
| (xvii) | Minimum Rate of Interest: |
[[●]]/[Not Applicable] |
| (xviii) | Maximum Rate of Interest: | [[●]]/[Not Applicable] |
| (xix) | Name and address of the Calculation Agent: |
[●] |
| 17. | Zero Coupon Note provisions | [Applicable]/[Not Applicable] |
| (i) | Amortisation/Accrual Yield: | [●]% per annum 47 |
| 18. | Call Option: | [Applicable]/[Not Applicable] |
|---|---|---|
| (i) | Optional Redemption Date(s): | [●] |
| (ii) | Optional Redemption Amount of each Note: |
[At par]/[Make-whole Amount] |
| (A) Reference Bond: | [●] | |
| (B) Quotation Time: | [●] | |
| (C) Redemption Margin: | [●]% | |
| (D) Reference Dealers: | [●] | |
| (iii) | If redeemable in part: | |
| • Minimum Redemption Amount: | [●] | |
| • Maximum Redemption Amount: | [●] | |
| 19. | Put Option: | [Applicable]/[Not Applicable] |
| (i) | Optional Redemption Date(s): | [●] |
| (ii) | Optional Redemption Amount: | [At par]/[[●] per Calculation Amount]/ |
| 20. | Final Redemption Amount | |
| (i) | Fixed Rate Notes, Floating Rate Notes and Zero Coupon Notes: |
[At par]/[[●] per Calculation Amount]/[Not Applicable] |
| (ii) | Inflation Linked Redemption: | [Applicable]/[Not Applicable] |
| (A) Index: | [●] | |
| (B) Party responsible for calculating the Final Redemption Amount (if not the Agent): |
[●] | |
| (C) Initial Valuation date: | [●] | |
| (D) Reference Month: | (i) Initial Valuation Date: the calendar month falling [●] month[s] prior to the Initial Valuation Date. |
(ii) Scheduled Redemption Date: the calendar month falling [●] month[s] prior to the Maturity Date.
| (E) Related Bond: | [●]/[As specified in the conditions] | |
|---|---|---|
| (F) Final Redemption Floor: | [Applicable]/[Not Applicable] | |
| 21. | Early Redemption Amount of each Note payable on redemption for taxation reasons or on event of default or other early redemption: |
[At par]/[[●] per Calculation Amount] |
| 22. | Form of Notes: | [Bearer Notes:] |
|---|---|---|
| [Temporary Bearer Global Note exchangeable for a Permanent Bearer Global Note which is exchangeable for Definitive Notes only upon an Exchange Event] |
||
| [Temporary Bearer Global Note exchangeable for Definitive Notes on [●] days' notice] |
||
| [Permanent Bearer Global Note exchangeable for Definitive Notes only upon an Exchange Event] |
||
| [Registered Notes:] | ||
| [Regulation S Global Note (U.S.\$[●] nominal amount) registered in the name of a nominee for [DTC/a common depositary for Euroclear and Clearstream, Luxembourg/a common safekeeper for Euroclear and Clearstream, Luxembourg (that is, held under the New Safekeeping Structure ("NSS"))]] |
||
| [Rule 144A Global Note U.S.\$[●] nominal amount registered in the name of a nominee for [DTC/ a common depositary for Euroclear and Clearstream, Luxembourg]/[Definitive IAI Registered Notes/a common safekeeper for Euroclear and Clearstream, Luxembourg (that is, held under the New Safekeeping Structure ("NSS"))]] |
||
| 23. | New Global Note ("NGN") | [Yes]/[No] |
| 24. | Financial Centre(s): | [Not Applicable]/[●] |
|---|---|---|
| 25. | Talons for future Coupons to be attached to Definitive Notes (and dates on which such Talons mature): |
[Yes]/[No] |
| 26. | Redenomination: | [Not Applicable]/[The provisions in Condition 5 apply] |
[[●] has been extracted from [●].] The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware and able to ascertain from information published by [●], no facts have been omitted which would render the reproduced information inaccurate or misleading.]
Signed on behalf of the Issuer:
By:
Duly authorised
2. RATINGS
Ratings: The Notes to be issued [have been/are expected to be] rated:
[S & P: [●]]
[Moody's: [●]]
[●]/[Save as discussed in ["Subscription and Sale and Transfer and Selling Restrictions"], so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer. The Dealers and their affiliates have engaged, and may in the future engage, in investment banking and/or commercial banking transactions with, and may perform other services for, the Issuer and its affiliates in the ordinary course of business.]
4. YIELD (Fixed Rate Notes only)
Indication of yield: [●]/[Not Applicable]
The yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.
(i) Underlying Index: [RPI]/[HICP]/[French CPI]/[Italian CPI]/[U.S. CPI]
(ii) Information about the Index, its volatility and past and future performance can be obtained from: [●]
Benchmarks: Amounts payable under the Notes will be calculated by reference to [●] which is provided by [●]. As at the date of these Final Terms, [●] [appears]/[does not 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 "Benchmark Regulation")]. [As far as the Issuer is aware, the transitional provisions set forth in Article 51 of the Benchmark regulation apply such that [●] is not currently required to obtain authorisation or registration.]/[Not applicable]
ISIN Code: [●]/
[Until the Notes have been consolidated and form a single series with Tranche(s) [●], which is expected to be on or about [●], they will be assigned a Temporary ISIN Code as follows:
Thereafter, they will assume the same ISIN Code Tranche(s) [●] as follows:
[●]]
[Until the Notes have been consolidated and form a single series with Tranche(s) [●], which is expected to be on or about [●], they will be assigned a Temporary Common Code as follows:
[●]
Thereafter, they will assume the same Common Code as Tranche(s) [●] as follows:
[●]]
FISN/s: [●]/[Not Applicable]
[●]/[Not Applicable]
CFI code/s [●]/[Not Applicable]
Book-entry clearing systems [Euroclear Bank S.A./N.V.]/[Clearstream Banking, société anonyme]/[Depository Trust Company]
Delivery: Delivery [against/free of] payment
Names and addresses of additional Paying Agent(s) (if any):
Intended to be held in a manner which would allow Eurosystem eligibility:
[Yes. Note that the designation "yes" simply means that the Notes are intended upon issue to be deposited with one of the International Central Securities Depositaries ("ICSDs") as common safekeeper, [and registered in the name of a nominee of one of the ICSDs acting as common safekeeper, that is held under the New Safekeeping Structure for registered global securities,] [include this text for Registered Notes which are to be held under the NSS] and does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend upon the ECB being satisfied that the Eurosystem eligibility criteria have been met.] /
[No. Whilst the designation is specified as "no" at the date of these Final Terms, should the Eurosystem eligibility criteria be amended in the future such that the Notes are capable of meeting them the Notes may then be deposited with one of the ICSDs as common safekeeper [and registered in the name of a nominee of one of the ICSDs acting as common safekeeper, that is held under the New Safekeeping Structure for registered global securities]. Note that this does not necessarily
mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem at any time during their life. Such recognition will depend upon the ECB being satisfied that the Eurosystem eligibility criteria have been met.]
U.S. Selling Restrictions: [TEFRA D]/[TEFRA C]/[TEFRA not Applicable] Stabilisation Manager(s) (if any): [Not Applicable]/[give name]
[MIFID II PRODUCT GOVERNANCE/ PROFESSIONAL INVESTORS AND ECPS ONLY TARGET MARKET – Solely for the purposes of the manufacturer's product approval process, the target market assessment in respect of the Notes has led to the conclusion that: (i) the target market for the Notes is eligible counterparties and professional clients only, each as defined in Directive 2014/65/EU (as amended, "MiFID II"); and (ii) all channels for distribution of the Notes to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the Notes (a "distributor") should take into consideration the manufacturer's target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or refining the manufacturer's target market assessment) and determining appropriate distribution channels.]
[PROHIBITION OF SALES TO EEA RETAIL INVESTORS – The Notes 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"). 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"); (ii) a customer within the meaning of Directive 2002/92/EC (as amended, the "IMD"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Prospectus Directive (as defined below). Consequently, no key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPS Regulation.]
[Date]
Information contained in this Pricing Supplement has not been approved or reviewed by the UK Listing Authority and does not constitute part of the prospectus for the purposes of the Prospectus Directive.
Terms used herein shall be deemed to be defined as such for the purposes of the Conditions set forth in the Base Prospectus dated 13 July 2018 [and supplement(s) to it dated [●]] which [together] constitute(s) a base prospectus (the "Base Prospectus"). This document constitutes the Pricing Supplement of the Notes described herein and must be read in conjunction with the Base Prospectus. The Base Prospectus and any supplement(s) thereto will be published electronically on the website of the London Stock Exchange plc at http://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of this Pricing Supplement and the Base Prospectus.
[Terms used in this document are deemed to be defined as such for the purposes of the Conditions set forth in the base prospectus dated [original date] [and the supplemental prospectus dated [date]] (the "Conditions") and incorporated by reference into the Base Prospectus dated 13 July 2018 [and supplement(s) to it dated [●]]. This document constitutes the Pricing Supplement of the Notes described in it and must be read in conjunction with the Prospectus dated 13 July 2018 [and supplement(s) to it dated [●]], which [together] constitute[s] a base prospectus (the "Base Prospectus"), including the Conditions which are extracted from the base prospectus dated [original date] [and the supplement(s) to it dated [●]]. The Base Prospectus and any supplement(s) thereto will be published electronically on the website of the London Stock Exchange plc at http://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of this Pricing Supplement and the Base Prospectus.
| 1. | (i) | Series Number: | [●] |
|---|---|---|---|
| (ii) | Tranche Number: | [●] | |
| 2. | Specified Currency: | [●] | |
| 3. | Aggregate Nominal Amount of Notes admitted to trading: |
||
| (i) | Series: | [●] | |
| (ii) | Tranche: | [●] | |
| [The Notes will be consolidated and form a single series with Tranche(s) [●] on or about [date].] |
|||
| (If fungible with an existing Series, details of that Series, including the date on which the Exempt Notes become fungible) |
|||
| 4. | Issue Price: | [●]%, of the Aggregate Nominal Amount [plus [●] accrued interest (representing [●] days of accrued interest) for the period from, and including, [add reference to the Interest Commencement Date] to, but excluding, the Issue Date.] |
|
| 5. | (i) | Specified Denominations: | [€100,000] [and higher integral multiples of €1,000 in excess thereof] |
| (ii) | Calculation Amount: | [●] | |
| 6. | (i) | Issue Date: | [●] |
| (ii) | Interest Commencement Date: |
[●]/[Issue Date]/[Not Applicable] | |
|---|---|---|---|
| 7. | Maturity Date: | [●] | |
| 8. | Interest Basis: | [[●]% Fixed Rate]/[particular reference rate] +/- [●]% Floating Rate]/[Inflation Linked interest]/[[●] years [insert currency] CMS Reference Rate]/[Zero Coupon] |
|
| (further particulars specified below) | |||
| 9. | Redemption/Payment Basis: |
[Redemption at par]/[● (insert zero coupon redemption amount)]/[Inflation Linked Redemption] |
|
| 10. | Change of Interest Basis: | [Applicable, on [●]]/[Not Applicable] | |
| (i) | First Interest Basis: | [●] | |
| (ii) | Second Interest Basis: | [●] | |
| (iii) | Interest Basis Conversion Date: |
[●] [subject to adjustment in accordance with the Business Day Convention]/[subject to no adjustment] |
|
| 11. | Put/Call Options: | [Investor Put] / [Issuer Call] / [Not Applicable] [(further particulars specified below)] |
|
| 12. | Notes: | Date(s) of relevant corporate authorisations for issuance of |
[●] (Board Authorisation) and [●] (Decision to Issue) |
| PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE | |||
| 13. | Fixed Rate Note provisions | [Applicable]/[Not Applicable] | |
| (i) | Rate(s) of Interest: | [●]%, per annum payable in arrear on each Interest Payment Date |
|
| (ii) | Interest Payment Date(s): | [●] in each year | |
| (iii) | Fixed Coupon Amount(s): (Applicable to Exempt Notes in definitive form) |
[●] per Calculation Amount | |
| (iv) | Broken Amount(s): (Applicable to Exempt Notes in definitive form) |
[●] per Calculation Amount, payable on the Interest Payment Date falling [in/on] [●] |
| (v) | Day Count Fraction: | [30/360]/[Actual/Actual (ICMA)] |
|---|---|---|
| (vi) | Determination Date(s): | [●] in each year |
| (vii) | Range Accrual: | [Applicable (further particulars specified below)]/[Not Applicable] |
| 14. | Floating Rate Note provisions | [Applicable]/[Not Applicable] |
| (i) | Interest Period(s) |
[●] |
| (ii) | Specified Interest Payment Dates: | [[●] in each year, subject to adjustment in accordance with the Business Day Convention set out in (iv) below] |
| (iii) | First Interest Payment Date: | [●] |
| (iv) | Business Day Convention: | [Floating Rate Convention]/[Following Business Day Convention]/[Modified Following Business Day Convention]/ [Preceding Business Day Convention]/[Not Applicable] |
| (v) | Business Centre(s): | [●] |
| (vi) | Manner in which the Rate(s) of Interest is/are to be determined: |
[Screen Rate Determination]/[ISDA Determination]/[CMS Rate] |
| (vii) | Party responsible for calculating the Rate(s) of Interest and/or Interest Amount (if not the Agent): |
[●] |
| (viii) | Screen Rate Determination: | [Applicable]/[Not Applicable] |
| • Reference Rate: | [LIBOR]/[EURIBOR]/[●] | |
| • Designated Maturity: | [●] | |
| • Relevant Screen Page: | [●] | |
| • Relevant Time: | [11.00 a.m. London time]/[11.00 a.m. Brussels time]/[●][Include the Relevant Time of the business centre of the relevant floating rate if not LIBOR or EURIBOR] |
|
| • Relevant Screen Page: | [●] | |
| (ix) | ISDA Determination: | [Applicable]/[Not Applicable] |
| • Floating Rate Option: | [●] |
| • Designated Maturity: | [●] | |
|---|---|---|
| • Reset Date: | [●] | |
| (x) | CMS Rate | [Applicable]/[Not Applicable] |
| • Multiplier: | [●] | |
| • First Relevant Screen Page: | [●] | |
| • First Relevant Time: | [●] | |
| • First Relevant Currency: | [●] | |
| • First Designated Maturity: | [●] | |
| • Second Relevant Screen Page: | [●] | |
| • Second Relevant Time: | [●] | |
| • Second Relevant Currency: | [●] | |
| • Second Designated Maturity: | [●] | |
| (xi) | Linear Interpolation: | [Not Applicable]/[Applicable: the Rate of Interest for the [long/short] [first/last] Interest Period shall be calculated using Linear Interpolation between [next shorter] and [next longer] [reference rate]] |
| (xii) | Margin(s): | [+/-] [●]% per annum |
| (xiii) | Minimum Rate of Interest: | [●] |
| (xiv) | Maximum Rate of Interest: | [●] |
| (xv) | Day Count Fraction: | [Actual/Actual]/[Actual/Actual (ISDA)]/[Actual/365(Fixed)]/[Actual/365 (Sterling)]/[Actual/360]/[30/360]/[360/360]/ [Bond Basis]/[30E/360]/[Eurobond Basis] |
| (xvi) | Interest Determination Date(s): | [●] |
| (xvii) | Range Accrual Notes: |
[Applicable (further particulars specified below)]/[Not Applicable] |
| 15. | Range Accrual Notes |
[Applicable]/[Not Applicable] |
| (i) | Accrual Condition Type: | [Single Rate Range Accrual]/[Spread Range Accrual] |
|---|---|---|
| (ii) | Range Accrual Floating Rate 1 | |
| (A) Screen Rate Determination: | [Applicable]/[Not Applicable] | |
| • Reference Rate: | [●] | |
| • Designated Maturity: | [●] | |
| • Relevant Screen Page: | [●] | |
| • Relevant Time: | [●] | |
| (B) ISDA Determination: | [Applicable]/[Not Applicable] | |
| • Floating Rate Option: | [●] | |
| • Designated Maturity: | [●] | |
| • Reset Date: | [●] | |
| (iii) | Range Accrual Floating Rate 2 (only applicable to Spread Range Accrual) |
[Applicable]/[Not Applicable] |
| (A) Screen Rate Determination: | [Applicable]/[Not Applicable] | |
| • Reference Rate: | [●] | |
| • Designated Maturity: | [●] | |
| • Relevant Screen Page: | [●] | |
| • Relevant Time: | [●] | |
| (B) ISDA Determination: | [Applicable]/[Not Applicable] | |
| • Floating Rate Option: | [●] | |
| • Designated Maturity: | [●] | |
| • Reset Date: | [●] | |
| (iv) | Lower Barrier: | [●]/[Not Applicable] |
| (v) | Upper Barrier: | [●]/[Not Applicable] |
| (vi) | Observation Period: | [As specified in the Condition 6.2(d)]/[●] |
|---|---|---|
| 16. | Inflation Linked Notes provisions | [Applicable]/[Not Applicable] |
| (i) | Index | [RPI]/[HICP]/[French CPI]/[Italian CPI]/[U.S. CPI] |
| (ii) | Interest Period(s): |
[●] |
| (iii) | Specified Interest Payment Dates: | [[●] in each year, subject to adjustment in accordance with the Business Day Convention set out in (iv) below] |
| (iv) | Business Day Convention: | [Floating Rate Convention]/[Following Business Day Convention]/[Modified Following Business Day Convention]/ [Preceding Business Day Convention]/[Not Applicable] |
| (v) | Business Centre(s): | [●] |
| (vi) | Interest Determination Date: | [●]/[As specified in Condition 7.2] |
| (vii) | Rate of Interest: | [[Condition 7.1(b)]/[Condition 7.1(c)] applies]/[●] |
| (viii) | Margin: | [●]% per annum, subject to adjustment in accordance with Condition 7, payable in arrear on each Interest Payment Date |
| (ix) | Inflation Factor: | [[Option A]/[Option B]/[Option C] applies]/[●] |
| (x) | Initial Valuation date: | [●] |
| (xi) | Reference Month: | (i) Initial Valuation Date: the calendar month falling [●] month[s] prior to the Initial Valuation Date |
| (ii) relevant Interest Payment Date: the calendar month falling [●] month[s] prior to the relevant Interest Payment Date |
||
| (xii) | Index Sponsor: | [●] |
| (xiii) | Delay in publication and rebasing: | [General Conditions 7.4(a)(i) and 7.4(c)(iv)(A) apply] / |
| [Conditions 7.4(a)(ii) and 7.4(c)(iv)(B) specific to the French CPI apply] |
||
|---|---|---|
| (xiv) | Related Bond: | [●]/[Not applicable] |
| (xv) | Fallback Bond: | [●]/[Not applicable] |
| (xvi) | Day Count Fraction: | [Actual/Actual]/[Actual/Actual (ISDA)]/[Actual/365(Fixed)]/[Actual/365 (Sterling)]/[Actual/360]/[30/360]/[360/360]/ [Bond Basis]/[30E/360]/[Eurobond Basis] |
| (xvii) | Minimum Rate of Interest: | [[●]]/[Not Applicable] |
| (xviii) | Maximum Rate of Interest: | [[●]]/[Not Applicable] |
| (xix) | Name and address of the Calculation Agent: |
[●] |
| 17. | Zero Coupon Note provisions | [Applicable]/[Not Applicable] |
| (i) | Amortisation/Accrual Yield: | [●]% per annum |
| (ii) | Reference Price: | [●] |
| 18. | Call Option: | [Applicable]/[Not Applicable] |
|---|---|---|
| (i) | Optional Redemption Date(s): | [●] |
| (ii) | Optional Redemption Amount of each Note: |
[At par]/[Make-whole Amount] |
| (A) Reference Bond: | [●] | |
| (B) Quotation Time: | [●] | |
| (C) Redemption Margin: | [●]% | |
| (D) Reference Dealers: | [●] | |
| (iii) | If redeemable in part: | |
| • Minimum Redemption Amount: | [●] | |
| • Maximum Redemption Amount: | [●] | |
| 19. | Put Option: | [Applicable/Not Applicable] |
| (i) | Optional Redemption Date(s): | [●] |
| (ii) | Optional Redemption Amount: | [At par]/[[●] per Calculation Amount] |
|---|---|---|
| 20. | Final Redemption Amount: | |
| (i) | Fixed Rate Notes, Floating Rate Notes and Zero Coupon Notes: |
[At par]/[[●] per Calculation Amount]/[Not Applicable] |
| (ii) | Inflation Linked Redemption: | [Applicable]/[Not Applicable] |
| (A) Index: | [●] | |
| (B) Party responsible for calculating the Final Redemption Amount (if not the Agent): |
[●] | |
| (C) Initial Valuation date: | [●] | |
| (D) Reference Month: | (i) Initial Valuation Date: the calendar month falling [●] month[s] prior to the Initial Valuation Date |
|
| (ii) Scheduled Redemption Date: the calendar month falling [●] month[s] prior to the Maturity Date |
||
| (E) Related Bond: | [●]/[As specified in the conditions] | |
| (F) Final Redemption Floor: | [Applicable]/[Not Applicable] | |
| 21. | Early Redemption Amount of each Note payable on redemption for taxation reasons or on event of |
[At par]/[[●] per Calculation Amount] |
default or other early redemption:
| 22. | Form of Notes: | [Bearer Notes:] | ||
|---|---|---|---|---|
| [Temporary Bearer Global Note exchangeable for a Permanent Bearer Global Note which is exchangeable for Definitive Notes only upon an Exchange Event] |
||||
| [Temporary Bearer Global Note exchangeable for Definitive Notes on [●] days' notice] |
[Permanent Bearer Global Note exchangeable for Definitive Notes only upon an Exchange Event]
[Registered Notes:]
[Regulation S Global Note (U.S.\$[●] nominal amount) registered in the name of a nominee for [DTC/a common depositary for Euroclear and Clearstream, Luxembourg/a common safekeeper for Euroclear and Clearstream, Luxembourg (that is, held under the NSS)]]
[Rule 144A Global Note (U.S.\$[●] nominal amount registered in the name of a nominee for [DTC/ a common depositary for Euroclear and Clearstream, Luxembourg/a common safekeeper for Euroclear and Clearstream, Luxembourg (that is, held under the NSS)]/Definitive IAI Registered Notes]
26. Redenomination: [Not Applicable]/[The provisions in Condition 5 apply]
[[●] has been extracted from [●].] The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware and able to ascertain from information published by [●], no facts have been omitted which would render the reproduced information inaccurate or misleading.
[Yes]/[No]
Signed on behalf of the Issuer:
By:
Duly authorised
Listing: [Not Applicable]/[Application [has been made/is expected to be made] by the Issuer (or on its behalf) for the notes to be listed on [Specify market – note this should not be a regulated market] with effect from [●].]
Ratings: The Notes to be issued [have been/are expected to be] rated:
[S & P: [●]] [Moody's: [●]]
[●]/[Save as discussed in ["Subscription and Sale and Transfer and Selling Restrictions"], so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer. The Dealers and their affiliates have engaged, and may in the future engage, in investment banking and/or commercial banking transactions with, and may perform other services for, the Issuer and its affiliates in the ordinary course of business.]
Indication of yield:
[●]/[Not Applicable]
The yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.
CPI]
| ISIN Code: | [●]/ |
|---|---|
| [Until the Notes have been consolidated and form a single series with Tranches [●], which is expected to be on or about [●], they will be assigned a Temporary ISIN Code as follows: [●] |
|
| Thereafter, they will assume the same ISIN Code as Tranches [●] as follows: |
|
| [●]] | |
| Common Code: | [●]/ |
| [Until the Notes have been consolidated and form a single series with Tranches [●], which is expected to be on or about [●], they will be assigned a Temporary Common Code as follows: |
|
| [●] | |
| Thereafter, they will assume the same Common Code as Tranches [●] as follows: |
|
| [●]] | |
| FISN/s: | [●]/[Not Applicable] |
| CFI code/s | [●]/[Not Applicable] |
| Book-entry clearing systems | [Euroclear Bank S.A./N.V.]/[Clearstream Banking, société anonyme]/[Depository Trust Company] |
| Delivery: | Delivery [against/free of] payment |
| Names and addresses of additional Paying Agent(s) (if any): |
[●]/[Not Applicable] |
| Intended to be held in a manner which would allow Eurosystem eligibility: |
[Yes. Note that the designation "yes" simply means that the Notes are intended upon issue to be deposited with one of the International Central Securities Depositaries ("ICSDs") as common safekeeper, [and registered in the name of a nominee of one of the ICSDs acting as |
66
common safekeeper, that is held under the New Safekeeping Structure for registered global securities,] [include this text for Registered Notes which are to be held under the NSS] and does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend upon the ECB being satisfied that the Eurosystem eligibility criteria have been met.] / [No. Whilst the designation is specified as "no" at the date of this Pricing Supplement, should the Eurosystem eligibility criteria be amended in the future such that the Notes are capable of meeting them the Notes may then be deposited with one of the ICSDs as common safekeeper [and registered in the name of a nominee of one of the ICSDs acting as common safekeeper, that is held under the New Safekeeping Structure for registered global securities]. Note that this does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem at any time during their life. Such recognition will depend upon the ECB being satisfied that the Eurosystem eligibility criteria have been met.]
Benchmarks: Amounts payable under the Notes will be calculated by reference to [●] which is provided by [●]. As at the date of these Final Terms, [●] [appears]/[does not 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 "Benchmark Regulation")]. [As far as the Issuer is aware, the transitional provisions set forth in Article 51 of the Benchmark regulation apply such that [●] is not currently required to obtain authorisation or registration.]/[Not applicable]
U.S. Selling Restrictions: TEFRA D]/[TEFRA C]/[TEFRA Not Applicable Method of distribution: [Syndicated]/[Non-syndicated] Name(s) of the Dealer(s): [●]
Stabilisation Manager(s) (if any): [Not Applicable]/[give name] Additional selling restrictions: [Not Applicable]/[give details]
The following are the Terms and Conditions of the Notes which will be incorporated by reference into each Global Note (as defined below) and each definitive Note, in the latter case only if permitted by the relevant stock exchange or other relevant authority (if any) and agreed by the Issuer and the relevant Dealer at the time of issue but, if not so permitted and agreed, such definitive Note will have endorsed thereon or attached thereto such Terms and Conditions.
The applicable Final Terms in respect of Notes (other than Exempt Notes) (or the relevant provisions thereof) will be endorsed upon, or attached to, each Global Note and definitive Note. Reference should be made to "Form of Final Terms" in respect of Notes (other than Exempt Notes) for a description of the content of Final Terms which will specify which of such terms are to apply in relation to the relevant Notes.
In relation to Exempt Notes, the applicable Pricing Supplement (or the relevant provisions thereof) will be endorsed upon, or attached to, each Global Note and Definitive Note. Reference should be made to "Form of Pricing Supplement in relation to Exempt Notes" for a description of the content of Pricing Supplement, which will include the definitions of certain terms used in the following Terms and Conditions or specify which of such terms are to apply in relation to the relevant Exempt Notes.
References herein to the Notes shall be references to the Notes of this Series and shall mean:
The Notes and the Coupons (as defined below) have the benefit of the agency agreement (as amended and/or supplemented and/or restated from time to time, the "Agency Agreement") dated 13 October 2006 and made between Compagnie de Saint-Gobain (the "Issuer"), Deutsche Bank AG, London Branch, as issuing and principal paying agent and agent bank (the "Agent", which expression shall include any successor agent) and the other paying agents named therein (together with the Agent, the "Paying Agents", which expression shall include any additional or successor paying agents); Deutsche Bank AG, London Branch, as exchange rate agent (the "Exchange Rate Agent", which expression shall include any successor exchange rate agent) and Deutsche Bank Luxembourg S.A. as registrar (the "Registrar", which expression shall include any successor registrar) and Deutsche Bank AG, London Branch, as a transfer agent and the other transfer agents named therein (together with the Registrar, the "Transfer Agents", which expression shall include any additional or successor transfer agents).
Interest-bearing definitive Bearer Notes have interest coupons ("Coupons") and, if indicated in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), talons for further Coupons ("Talons") attached on issue. Any reference herein to Coupons or coupons shall, unless the context otherwise requires, be deemed to include a
reference to Talons or talons. Registered and Global Notes do not have Coupons or Talons attached on issue.
The relevant final terms for each issue of the Notes (or the relevant provisions thereof) are set out in Part A of the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), which supplement these terms and conditions (the "Conditions") and specify the applicable terms and conditions of the relevant Notes pursuant to the Conditions. References to the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) are references to Part A of the Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) (or the relevant provisions thereof).
Any reference to "Noteholders" or "holders" in relation to any Notes shall mean (in the case of Bearer Notes) the holders of the Notes and (in the case of Registered Notes) the persons in whose name the Notes are registered and shall, in relation to any Notes represented by a Global Note, be construed as provided below. Any reference herein to "Couponholders" shall mean the holders of the Coupons and shall, unless the context otherwise requires, include the holders of the Talons.
As used herein, "Tranche" means Notes which are identical in all respects (including as to listing and admission to trading) and "Series" means a Tranche of Notes together with any further Tranche or Tranches of Notes which are (a) expressed to be consolidated and form a single series and (b) identical in all respects (including as to listing and admission to trading) except for their respective Issue Dates, Interest Commencement Dates and/or Issue Prices.
The Noteholders and the Couponholders are entitled to the benefit of the Deed of Covenant (as amended and restated from time to time, the "Deed of Covenant") dated 7 September 2016 and made by the Issuer. The original of the Deed of Covenant is held by the common depositary for Euroclear (as defined below) and Clearstream, Luxembourg (as defined below).
Copies of the Agency Agreement, a deed poll (as amended and/or supplemented and/or restated from time to time, the "Deed Poll") dated 27 July 2016 and made by the Issuer and the Deed of Covenant are available for inspection during normal business hours at the specified office of each of the Agent, the Registrar and the other Paying Agents and Transfer Agents (such Agents and the Registrar being together referred to as the "Agents"). Copies of the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) may be obtained from Deutsche Bank AG, London Branch, Winchester House, 1 Great Winchester Street, London EC2N 2DB. If this Note is an Exempt Note, the applicable Pricing Supplement will only be obtainable by a Noteholder holding one or more Notes and such Noteholder must produce evidence satisfactory to the Issuer and the Agent as to its holding of such Notes and identity. The Noteholders and the Couponholders are deemed to have notice of, and are entitled to the benefit of, all the provisions of the Agency Agreement, the Deed of Covenant and the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) which are applicable to them. The statements in the Conditions include summaries of, and are subject to, the detailed provisions of the Agency Agreement.
Words and expressions defined in the Agency Agreement or used in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) shall have the same meanings where used in the Conditions unless the context otherwise requires or unless otherwise stated and provided that, in the event of inconsistency between the Agency Agreement and the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) will prevail.
The following legend will appear on all Bearer Notes which have an original maturity of more than 365 days and on all interest coupons relating to such Notes: "ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE".
The sections referred to provide that United States holders, with certain exceptions, will not be entitled to deduct any loss on Bearer Notes or interest coupons and will not be entitled to capital gains treatment of any gain on any sale, disposition, redemption or payment of principal in respect of such Notes or interest coupons.
The Notes are in bearer form or in registered form as specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) and, in the case of definitive Notes, serially numbered, in the Specified Currency and the Specified Denomination(s). Notes of one Specified Denomination may not be exchanged for Notes of another Specified Denomination and Bearer Notes may not be exchanged for Registered Notes and vice versa.
The Notes may be Fixed Rate Notes, Floating Rate Notes (including CMS Linked Notes), Range Accrual Notes, Inflation Linked Notes, or Zero Coupon Notes, or a combination of any of the foregoing, depending upon the interest basis shown in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement). The Specified Denomination of the Notes may be Euro, Sterling, U.S. dollar, Yen and, subject to any applicable legal or regulatory restrictions, any other currency agreed between the Issuer and the relevant Dealer and provided for in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement).
Definitive Bearer Notes are issued with Coupons attached, unless they are Zero Coupon Notes in which case references to Coupons and Couponholders in these Conditions are not applicable.
Subject as set out below, title to the Bearer Notes and Coupons will pass by delivery and title to the Registered Notes will pass upon registration of transfers in accordance with the provisions of the Agency Agreement. The Issuer and any Agent will (except as otherwise required by law) deem and treat the bearer of any Bearer Note or Coupon and the registered holder of any Registered Note as the absolute owner thereof (whether or not overdue and notwithstanding any notice of ownership or writing thereon or notice of any previous loss or theft thereof) for all purposes but, in the case of any Global Note, without prejudice to the provisions set out in the next succeeding paragraph.
For so long as any of the Notes is represented by a Global Note held on behalf of Euroclear Bank S.A./N.V. as operator of the Euroclear System ("Euroclear") and/or Clearstream Banking, société anonyme ("Clearstream, Luxembourg"), each person (other than Euroclear or Clearstream, Luxembourg) who is for the time being shown in the records of Euroclear or of Clearstream, Luxembourg as the holder of a particular nominal amount of such Notes (in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the nominal amount of such Notes standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest error) shall be treated by the Issuer and the Agents as the holder of such nominal amount of such Notes for all purposes other than with respect to the payment of principal or interest on such nominal amount of such Notes, for which purpose the bearer of the relevant Bearer Global Note or the registered holder of the relevant Registered Global Note (as defined below) shall be treated by the Issuer and any Agent as the holder of such nominal amount of such Notes in accordance with and subject to the terms of the relevant Global Note and the expressions "Noteholder" and "holder of Notes" and related expressions shall be construed accordingly.
For so long as the Depository Trust Company ("DTC") or its nominee is the registered owner or holder of a Registered Global Note, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by such Registered Global Note for all purposes under the Agency Agreement and the Notes except to the extent that in accordance with DTC's published rules and procedures any ownership rights may be exercised by its participants or beneficial owners through participants.
Notes which are represented by a Global Note will be transferable only in accordance with the rules and procedures for the time being of DTC, Euroclear and Clearstream, Luxembourg, as the case may be. References to DTC, Euroclear and/or Clearstream, Luxembourg shall, whenever the context so permits, be deemed to include a reference to any additional or alternative clearing system specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement).
The Registered Notes of each Tranche sold to Institutional Accredited Investors will be in definitive form, registered in the name of the holder thereof ("Definitive IAI Registered Notes"). Unless otherwise set forth in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), Definitive IAI Registered Notes will be issued only in minimum denominations of U.S.\$500,000 and integral multiples of U.S.\$1,000 in excess thereof (or the approximate equivalents in the applicable Specified Currency). Definitive IAI Registered Notes will be subject to the restrictions on transfer set forth therein and will bear the restrictive legend described under "Subscription and Sale and Transfer and Selling Restrictions". Institutional Accredited Investors that hold Definitive IAI Registered Notes may not elect to hold such Notes through DTC, but transferees acquiring the Notes in transactions exempt from Securities Act registration pursuant to Regulation S or Rule 144 under the Securities Act (if available) may do so upon satisfaction of the requirements applicable to such transfer as described under "Subscription and Sale and Transfer and Selling Restrictions". The Rule 144A Global Note (as defined below) and the Definitive IAI Registered Notes will be subject to certain restrictions on transfer set forth therein and will bear a legend regarding such restrictions.
Transfers of beneficial interests in Registered Global Notes will be effected by DTC, Euroclear or Clearstream, Luxembourg, as the case may be, and, in turn, by other participants and, if appropriate, indirect participants in such clearing systems acting on behalf of beneficial transferors and transferees of such interests. A beneficial interest in a Registered Global Note will, subject to compliance with all applicable legal and regulatory restrictions, be transferable for Notes in definitive form or for a beneficial interest in another Registered Global Note only in the authorised denominations set out in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) and only in accordance with the rules and operating procedures for the time being of DTC, Euroclear or Clearstream, Luxembourg, as the case may be, and in accordance with the terms and conditions specified in the Agency Agreement. Transfers of a Registered Global Note registered in the name of a nominee for DTC shall be limited to transfers of such Registered Global Note, in whole but not in part, to another nominee of DTC or to a successor of DTC or such successor's nominee.
(b) Transfers of Registered Notes in Definitive Form
Subject as provided in Condition 2(e), (f) and (g) below, upon the terms and subject to the conditions set forth in the Agency Agreement, a Registered Note in definitive form may be transferred in whole or in part (in the authorised denominations set out in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement)). In order to effect any such transfer (i) the holder or holders must (A) surrender the Registered Note for registration of the transfer of the Registered Note (or the relevant part of the Registered Note) at the specified office of the Registrar or any Transfer Agent, with the form of transfer thereon duly executed by the holder or holders thereof or his or their attorney or attorneys duly authorised in writing and (B) complete and deposit such other certifications as may be required by the Registrar or, as the case may be, the relevant Transfer Agent and (ii) the Registrar or, as the case may be, the relevant Transfer Agent must, after due and careful enquiry, be satisfied with the documents of title and the identity of the person making the request. Any such transfer will be subject to such reasonable regulations as the Issuer and the Registrar may from time to time prescribe (the initial such regulations being set out in Schedule 6 to the Programme Agreement). Subject as provided above, the Registrar or, as the case may be, the relevant Transfer Agent will, within three business days (being for this purpose a day on which banks are open for business in the city where the specified office of the Registrar or, as the case may be, the relevant Transfer Agent is located) of the request (or such longer period as may be required to comply with any applicable fiscal or other laws or regulations), authenticate and deliver, or procure the authentication and delivery of, at its specified office to the transferee or (at the risk of the transferee) send by uninsured mail, to such address as the transferee may request, a new Registered Note in definitive form of a like aggregate nominal amount to the Registered Note (or the relevant part of the Registered Note) transferred. In the case of the transfer of part only of a Registered Note in definitive form, a new Registered Note in definitive form in respect of the balance of the Registered Note not transferred will be so authenticated and delivered or (at the risk of the transferor) sent to the transferor.
(c) Registration of Transfer upon Partial Redemption
In the event of a partial redemption of Notes under Condition 9.5 (Redemption and Purchase – Early Redemption Amounts), the Issuer shall not be required to register the transfer of any Registered Note, or part of a Registered Note, called for partial redemption.
(d) Costs of Registration
Noteholders will not be required to bear the costs and expenses of effecting any registration of transfer as provided above, except for any costs or expenses of delivery other than by regular uninsured mail and except that the Issuer may require the payment of a sum sufficient to cover any stamp duty, tax or other governmental charge that may be imposed in relation to the registration.
(e) Transfers of Interests in Regulation S Global Notes
Prior to expiry of the applicable Distribution Compliance Period, transfers by the holder of, or of a beneficial interest in, a Regulation S Global Note to a transferee in the United States or who is a U.S. person will only be made:
and, in each case, in accordance with any applicable securities laws of any State of the United States or any other jurisdiction.
In the case of (A) above, such transferee may only take delivery through a Legended Note in global or definitive form and, in the case of (B) above, such transferee may take delivery only through a Legended Note in definitive form. After expiry of the applicable Distribution Compliance Period (i) beneficial interests in Regulation S Global Notes registered in the name of a nominee for DTC may be held through DTC directly, by a participant in DTC, or indirectly through a participant in DTC and (ii) such certification requirements will no longer apply to such transfers.
(f) Transfers of Interests in Legended Notes
Transfers of Legended Notes or beneficial interests therein may be made:
(i) to a transferee who takes delivery of such interest through a Regulation S Global Note, upon receipt by the Registrar of a duly completed Transfer Certificate from the transferor to the effect that such transfer is being made in accordance with Regulation S and that in the case of a Regulation S Global Note registered in the name of a nominee for DTC, if such transfer is being made prior to expiry of the applicable Distribution Compliance Period, the interests in the Notes being transferred will be held immediately thereafter through Euroclear and/or Clearstream, Luxembourg; or
and, in each case, in accordance with (i) any applicable securities laws of any State of the United States or any other jurisdiction and (ii) when the transferor is a holder of a Definitive IAI Registered Note, the terms of the IAI Investment Letter executed by such transferor.
Notes transferred by Institutional Accredited Investors to QIBs pursuant to Rule 144A or outside the United States pursuant to Regulation S will be eligible to be held by such QIBs or non-U.S. investors through DTC, Euroclear or Clearstream, Luxembourg, as appropriate, and the Registrar will arrange for any Notes which are the subject of such a transfer to be represented by the appropriate Registered Global Note, where applicable.
Upon the transfer, exchange or replacement of Legended Notes, or upon specific request for removal of the legend, the Registrar shall deliver only Legended Notes or refuse to remove the legend, as the case may be, unless there is delivered to the Issuer such satisfactory evidence as may reasonably be required by the Issuer, which may include an opinion of U.S. counsel, that neither the legend nor the restrictions on transfer set forth therein are required to ensure compliance with the provisions of the Securities Act.
(g) Exchanges and Transfers of Registered Notes Generally
Holders of Registered Notes in definitive form, other than holders of Definitive IAI Registered Notes, may exchange such Notes for interests in a Registered Global Note of the same type at any time.
(h) Definitions
In this Condition, the following expressions shall have the following meanings:
"Distribution Compliance Period" means the period that ends 40 days after the completion of the distribution (for purposes of Regulation S) of each Tranche of Notes, as certified by the relevant Dealer (in the case of a non-syndicated issue) or the relevant Lead Manager (in the case of a syndicated issue);
"Institutional Accredited Investor" means accredited investors as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act that are institutions;
"Legended Note" means Registered Notes in definitive form that are issued to Institutional Accredited Investors and Registered Notes (whether in definitive form or represented by a Registered Global Note) sold in private transactions to QIBs in accordance with the requirements of Rule 144A;
"QIB" means a qualified institutional buyer within the meaning of Rule 144A;
"Registered Global Note" means a Regulation S Global Note or a Rule 144A Global Note;
"Regulation S" means Regulation S under the Securities Act;
"Regulation S Global Note" means a global Registered Note representing Notes sold outside the United States in reliance on Regulation S;
"Rule 144A" means Rule 144A under the Securities Act;
"Rule 144A Global Note" means a global Registered Note representing Notes sold in private transactions to QIBs in accordance with the requirements of Rule 144A; and
"Securities Act" means the United States Securities Act of 1933, as amended.
The Notes (including any relative Coupons) constitute direct, unconditional, unsubordinated and (subject to Condition 4 (Negative Pledge) and corresponding provisions in the Agency Agreement) unsecured obligations of the Issuer without any preference among themselves and will rank at least equally with all other unsubordinated and unsecured obligations of the Issuer (subject, in the event of insolvency, to the laws affecting creditors' rights generally and to such preferred exceptions as may from time to time be provided for by law).
(a) So long as any Note remains Outstanding and unpaid, the Issuer will not, and will not permit any of its Consolidated Subsidiaries to, issue, assume or guarantee any Indebtedness (as defined below) secured by a Lien (as defined below) upon or with respect to any Principal Property, without making effective provision whereby all the Notes shall be directly secured equally and rateably with the Indebtedness secured by such Lien; provided that these provisions shall not apply to the creation, incurrence, assumption or existence of: (i) any Lien created by its Consolidated Subsidiary in favour of the Issuer or any wholly owned Consolidated Subsidiary of the Issuer; (ii) Liens on any asset of a corporation existing at the time it becomes a Subsidiary of the Issuer, provided that such Lien was not created in contemplation of the acquisition of such corporation; (iii) any Lien created over any asset acquired by the Issuer, or such Consolidated Subsidiary after 12 December 2008, to secure Indebtedness incurred to finance the acquisition of such asset simultaneously with the creation of such Lien if the Indebtedness incurred does not exceed the price of the asset acquired; (iv) any Lien existing as of 12 December 2008; (v) any refinancing, extension, renewal or replacement of any of the Indebtedness secured by Liens referred to above, provided that the principal amount of the Indebtedness secured thereby is not increased and such Lien is not spread to cover any additional assets; and (vi) Indebtedness secured by Liens upon or with respect to any Principal Property, other than those permitted in Conditions 4(a)(i) through (v) above, provided that immediately after the incurrence of any such Lien under this Condition 4(a)(vi), the aggregate outstanding amount of indebtedness secured by Liens under this Condition 4(a)(vi) plus the aggregate Attributable Debt (as defined below) in respect of the Sale and Leaseback Transactions (as defined below) permitted by the provisions of clause (b) below shall not exceed 15% of Consolidated Net Tangible Assets of the Issuer (as defined below). A certificate of the Auditors (PricewaterhouseCoopers Audit and KPMG Audit, a department of KPMG S.A.) (or such other firm of independent public accountants which may at the time be independent public accountants for the Issuer,) shall be conclusive evidence as to the amount, at the date specified in such certificate, of Consolidated Net Tangible Assets of the Issuer.
(b) So long as any Note remains Outstanding and unpaid, the Issuer will not, and will not permit any of its Consolidated Subsidiaries to, enter into any arrangement with any Person (as defined below) providing for the leasing by it, or any of its Subsidiaries of any Principal Property which has been or is to be sold or transferred by it, or such Consolidated Subsidiary to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such Principal Property (a Sale and Leaseback Transaction). Each of the Issuer and any of its Consolidated Subsidiaries may enter into a Sale and Leaseback Transaction which would otherwise be prohibited by the foregoing sentence, if (A) within 90 days of the effective date of any such Sale and Leaseback Transaction, an amount equal to the fair value (as determined by the Board of Directors of the Issuer) of the Principal Property so leased is applied to the retirement of long-term Indebtedness of the Issuer, or (B) immediately after entering into such transaction the Attributable Debt in respect of such and other Sale and Leaseback Transactions plus the aggregate principal amount of Indebtedness secured by Liens on Principal Properties then outstanding do not at the time exceed 15% of Consolidated Net Tangible Assets. Attributable Debt means with respect to a Sale and Leaseback Transaction, as of any particular time, the present value (discounted at the Rate of Interest implicit in the terms of the lease involved in such Sale and Leaseback Transaction, as determined in good faith by the Issuer) of the obligation of the lessee thereunder for net rental payments (excluding, however, any amounts required to be paid by such lessee, whether or not designated as rent or additional rent, on account of maintenance and repairs, services, insurance, taxes, assessments, water rates and similar charges or any amounts required to be paid by such lessee thereunder contingent upon monetary inflation or the amount of sales, maintenance and repairs, insurance, taxes, assessments, water rates or similar charges) during the remaining term of such lease (including any period for which such lease has been extended or may at the option of the lessor, be extended). A certificate of the Auditors (PricewaterhouseCoopers Audit and KPMG Audit, a department of KPMG S.A.) (or such other firm of independent public accountants as shall at the time be independent public accountants for the Issuer) shall be conclusive evidence as to the amount, at the date specified in such certificate of Attributable Debt.
(c) Definitions – as used above, the following terms shall have the following meanings:
"Consolidated Net Tangible Assets" means the excess over current liabilities of all assets properly appearing on a consolidated balance sheet of the Issuer and its Consolidated Subsidiaries, less goodwill, trademarks, patents, deferred software costs, other like intangibles and the minority interests of others in Subsidiaries;
"Consolidated Subsidiary" means a Subsidiary of the Issuer, the accounts of which are consolidated with those of the Issuer in accordance with IFRS;
"indebtedness" means, with respect to any person, (A) any indebtedness for borrowed money or for the deferred purchase price of property or services and (B) all obligations which, under IFRS, are required to be recorded as capitalised leases on the consolidated balance sheet of the Issuer;
"Lien" means any mortgage, pledge, security interest, lien or other encumbrance;
"Person" means any individual, partnership, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof;
"Principal Property" means, as of any date, any building, structure or other facility together with the land upon which it is erected and fixtures comprising a part thereof used primarily for manufacturing, processing or production and owned or leased or to be owned or leased by the Issuer or any of its Consolidated Subsidiaries, and in each case the net book value of which as of such date exceeds 2% of the Consolidated Net Tangible Assets of the Issuer, as shown on its audited consolidated balance sheet contained in its latest annual report to shareholders, other than any such land, building, structure or other facility or portion thereof which, in the opinion of the Board of Directors of the Issuer, as applicable, is not of material importance to the business conducted by the Issuer and its Consolidated Subsidiaries, considered as one enterprise; and
"Subsidiary" means any corporation of which shares of stock of each class having ordinary voting power (other than, stock having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation are at the time owned by the Issuer or by one or more its Subsidiaries or by the Issuer and one or more of its Subsidiaries (a Subsidiary shall be deemed wholly owned by a person who owns all of the voting shares of such Subsidiary except for directors' qualifying shares).
Where redenomination is specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) as being applicable, the Issuer may, without the consent of the Noteholders and the Couponholders, on giving prior notice to the Agent, Euroclear and Clearstream, Luxembourg and at least 30 days' prior notice to the Noteholders in accordance with Condition 17 (Notices), elect that, with effect from the Redenomination Date specified in the notice, the Notes shall be redenominated in Euro.
The election will have effect as follows:
which Euro may be credited or transferred) specified by the payee or, at the option of the payee, by a Euro cheque;
In the Conditions, the following expressions have the following meanings:
"Established Rate" means the rate for the conversion of the Specified Currency (including compliance with rules relating to roundings in accordance with applicable European Community regulations) into Euro established by the Council of the European Union pursuant to Article 123 of the Treaty;
"Euro" means the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty;
"Redenomination Date" means (in the case of interest bearing Notes) any date for payment of interest under the Notes or (in the case of Zero Coupon Notes) any date, in each case specified by the Issuer in the notice given to the Noteholders pursuant to Condition 5.1 (Redenomination – Redenomination) above and which falls on or after the date on which the country of the Specified Currency first participates in the third stage of European economic and monetary union; and
"Treaty" means the Treaty establishing the European Community, as amended.
Each Fixed Rate Note bears interest on its outstanding nominal amount from (and including) the Interest Commencement Date at the rate(s) per annum equal to the Rate(s) of Interest. Interest will be payable in arrear on the Interest Payment Date(s) in each year up to the Maturity Date.
The amount of interest payable on each Interest Payment Date in respect of the Fixed Interest Period ending on (but excluding) such date will amount to the Fixed Coupon Amount. Payments of interest on any Interest Payment Date will, if so specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), amount to the Broken Amount so specified.
As used in the Conditions, "Fixed Interest Period" means the period from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date.
If interest is required to be calculated for a period other than a Fixed Interest Period, such interest shall be calculated by applying the Rate of Interest to each Specified Denomination, multiplying such sum by the applicable Day Count Fraction, and rounding the resulting figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention.
"Day Count Fraction" means, in respect of the calculation of an amount of interest in accordance with this Condition 6.1:
(such number of days being calculated on the basis of a year of 360 days with twelve 30-day months) divided by 360.
In the Conditions:
"Determination Period" means each period from (and including) a Determination Date (as specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement)) to (but excluding) the next Determination Date (including, where either the Interest Commencement Date or the final Interest Payment Date is not a Determination Date, the period commencing on the first Determination Date prior to, and ending on the first Determination Date falling after, such date);
"Determination Date" means the date(s) specified as such in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) or, if none is so specified, the Interest Payment Date(s); and
"sub-unit" means, with respect to any currency other than Euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, with respect to Euro, one cent.
(a) Interest Payment Dates
Each Floating Rate Note and Inflation Linked Note bears interest on its outstanding nominal amount from (and including) the Interest Commencement Date and such interest will be payable in arrears on either (each such date, together with each Specified Interest Payment Date, an "Interest Payment Date"):
Such interest will be payable in respect of each "Interest Period" (which expression shall, in the Conditions, mean the period from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date).
If a Business Day Convention is specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) and (x) if there is no numerically corresponding day in the calendar month in which an Interest Payment Date should occur or (y) if any Interest Payment Date would otherwise fall on a day which is not a Business Day, then, if the Business Day Convention specified is:
Gross Settlement Express Transfer (TARGET2) System (the "TARGET2 System") is open.
(b) Rate of Interest for Floating Rate Notes (other than CMS Linked Notes)
The Rate of Interest payable from time to time in respect of Floating Rate Notes will be determined either according to ISDA Determination or Screen Rate Determination, as specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement).
"Relevant Financial Centre" means, with respect to any Floating Rate or CMS Rate to be determined on an Interest Determination Date (as defined below), the financial centre as may be specified as such in the applicable Final Terms (or, in the case of the Exempt Notes, the applicable Pricing Supplement) or, if none is so specified, the financial centre with which the relevant Reference Rate or CMS Rate is most closely connected (which in the case of the Euro Inter-bank Offered Rate ("EURIBOR") shall be the euro area) or, if none is so connected, London.
"Relevant Screen Page" means such page, section, caption, column or other part of a particular information service (including, but not limited to, the Reuters Money 3000 Service ("Reuters")) as may be specified for the purpose of providing a Reference Rate or CMS Reference Rate, as the case may be, or such other page, section, caption, column or other part as may replace it on that information service or on such other information service, in each case as may be nominated by the person or organisation providing or sponsoring the information appearing there for the purpose of displaying rates or prices comparable to that Reference Rate or CMS Reference Rate, as the case may be.
"Relevant Time" (i) where Screen Date Determination is specified in the applicable Final Terms (or, in the case of the Exempt Notes, the applicable Pricing Supplement) as the manner in which the Interest Rate is to be determined, means, with respect to any Interest Determination Date, the local time in the Relevant Financial Centre at which it is customary to determine bid and offered rates in respect of deposits in the Relevant Currency in the interbank market in the Relevant Financial Centre and, where the primary source for the Floating Rate is a Relevant Screen Page, the time as of which the Relevant Rate(s) appearing on such Relevant Screen Page is or are set and posted on such Relevant Screen Page and for this purpose "local time" means, with respect to Europe and the Eurozone as a Relevant Financial Centre, Central European Time or (ii) where CMS Rate is specified in the applicable Final Terms (or, in the case of the Exempt Notes, the Pricing Supplement) as the manner in which the Interest Rate is to be determined, has the meaning specified in the Final Terms or Pricing Supplement.
(i) ISDA Determination
Where ISDA Determination is specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will be the relevant ISDA Rate plus or minus (as indicated in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement)) the Margin (if any). For the purposes of this Condition 6.2(b)(i), "ISDA Rate" for an Interest Period means a rate equal to the Floating Rate that would be determined by the Agent under an interest rate swap transaction if the Agent were acting as Calculation Agent for that swap transaction under the terms of an agreement incorporating the 2006 ISDA Definitions, as published by the International Swaps and Derivatives Association, Inc. and as amended and updated as at the Issue Date of the first Tranche of the Notes (the "ISDA Definitions") and under which:
For the purposes of this Condition 6.2(b)(i), "Floating Rate", "Calculation Agent", "Floating Rate Option", "Designated Maturity" and "Reset Date" have the meanings given to those terms in the ISDA Definitions.
Unless otherwise stated in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the Minimum Rate of Interest shall be deemed to be zero.
If the specified ISDA Rate is not available, the applicable interest rate will be determined according to the fallback rules of the relevant Floating Rate Option under the ISDA Definitions.
(ii) Screen Rate Determination
Under Screen Rate Determination, the "Reference Rate" is either:
with reference to the Designated Maturity as specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement).
Where Screen Rate Determination is specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will, subject as provided below, be either:
(expressed as a percentage rate per annum) for the Reference Rate which appears or appear, as the case may be, on the Relevant Screen Page as at the Relevant Time (11.00 a.m. London time if the Reference Rate is LIBOR, 11.00 a.m. Brussels time if the Reference Rate is EURIBOR) or as otherwise specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) (the "Relevant Time") on the interest determination date as specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) (the "Interest Determination Date") in question plus or minus (as indicated in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement)) the Margin (if any), all as determined by the Agent. If five or more of such offered quotations are available on the Relevant Screen Page, the highest (or, if there is more than one such highest quotation, one only of such quotations) and the lowest (or, if there is more than one such lowest quotation, one only of such quotations) shall be disregarded by the Agent for the purpose of determining the arithmetic mean (rounded as provided above) of such offered quotations.
In case of LIBOR or EURIBOR, if the Relevant Screen Page is not available or if, in the case of Condition 6.2(b)(ii)(A) immediately above, no offered quotation appears or, in the case of Condition 6.2(b)(ii)(B) immediately above, fewer than three offered quotations appear, in each case as at the Specified Time, the Issuer and/or an agent appointed by the Issuer shall request each of the Reference Banks to provide its offered quotation (expressed as a percentage rate per annum) for the Reference Rate at approximately the Specified Time on the Interest Determination Date in question. If two or more of the Reference Banks provide the Issuer and/or an agent appointed by the Issuer with offered quotations, the Rate of Interest for the Interest Period shall be the arithmetic mean (rounded if necessary to the fifth decimal place with 0.000005 being rounded upwards) of the offered quotations plus or minus (as appropriate) the Margin (if any), all as determined by the Calculation Agent.
If on any Interest Determination Date one only or none of the Reference Banks provides the Issuer or an agent appointed by the Issuer with an offered quotation as provided in the preceding paragraph, the Rate of Interest for the relevant Interest Period shall be the rate per annum which the Calculation Agent determines as being the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) of the rates, as communicated to (and at the request of) the Issuer or an agent appointed by the Issuer by the Reference Banks or any two or more of them, at which such banks were offered, at approximately the Specified Time on the relevant Interest Determination Date, deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate by leading banks in the London inter-bank market (if the Reference Rate is LIBOR) or the Euro-zone inter-bank market (if the Reference Rate is EURIBOR) plus or minus (as appropriate) the Margin (if any) or, if fewer than two of the Reference Banks provide the Issuer or an agent appointed by the Issuer with offered rates, the offered rate for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, or the arithmetic mean (rounded as provided above) of the offered rates for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, at which, at approximately the Specified Time on the relevant Interest Determination Date, any one or more banks (which bank or banks is or are in the opinion of the Issuer suitable for the purpose) informs the Issuer or an agent appointed by the Issuer it is quoting to leading banks in the London interbank market (if the Reference Rate is LIBOR) or the Euro-zone inter-bank market (if the Reference Rate is EURIBOR) plus or minus (as appropriate) the Margin (if any), provided that, if the Rate of Interest cannot be determined in accordance with the foregoing provisions of this paragraph, the Rate of Interest shall be determined as at the last preceding Interest Determination Date (though substituting, where a different Margin is to be applied to the relevant Interest Period from that which applied to the last preceding Interest Period, the Margin relating to the relevant Interest Period in place of the Margin relating to that last preceding Interest Period).
Notwithstanding the two preceding paragraphs, if the Issuer or the Calculation Agent determines that the relevant Benchmark has been discontinued, the Issuer will as soon as reasonably practicable appoint an agent (the "Benchmark Determination Agent"), which will determine, acting in good faith, in a commercially reasonable manner, and as an independent expert in the performance of its duties, whether a substantially comparable substitute or successor rate is available for purposes of determining the Reference Rate. If the Benchmark Determination Agent determines that there is an industryaccepted successor rate, the Benchmark Determination Agent will use such successor rate to determine the Reference Rate. If the Benchmark Determination Agent has determined a substitute or successor rate in accordance with the foregoing (such rate, the "Replacement Reference Rate"), for the purposes of determining the Reference Rate on each Interest Determination Date falling on or after such determination, (i) the Benchmark Determination Agent will also determine changes (if any) to the Business Day Convention, the definition of "Business Day", the remaining Interest Determination Dates, the Day Count Fraction, and any method for obtaining the Replacement Reference Rate, including any adjustment factor needed to make such Replacement Reference Rate comparable to the Relevant Screen Page, in each case in a manner that is consistent with industry-accepted practices for such Replacement Reference Rates; (ii) references to the Reference Rate in the Conditions and the Final Terms applicable to the relevant Notes will be deemed to be references to the relevant Replacement Reference Rate, including any alternative method for determining such rate as described in (i) above; (iii) the Benchmark Determination Agent will notify the Issuer of the foregoing as soon as reasonably practicable; and (iv) the Issuer will give notice as soon as reasonably practicable to the Noteholders (in accordance with Condition 17 (Notices)) and the relevant Paying Agent, specifying the Replacement Reference Rate, as well as the details described in (i) above.
The determination of the Replacement Reference Rate and the other matters referred to above by the Benchmark Determination Agent will (in the absence of manifest error) be final and binding on the Issuer, the Calculation Agent, the Fiscal Agent, the relevant Paying Agent and the Noteholders, unless the Benchmark Determination Agent, acting in good faith, in a commercially reasonable manner, and as an independent expert in the performance of its duties, considers at a later date that the Replacement Reference Rate is no longer substantially comparable to the Reference Rate or does not constitute an industry-accepted successor rate, in which case the Issuer shall re-appoint a Benchmark Determination Agent (which may or may not be the same entity as the original Benchmark Determination Agent) for the purpose of confirming the Replacement Reference Rate or determining a substitute Replacement Reference Rate in an identical manner as described in the paragraph above. If the Benchmark Determination Agent is unable to or otherwise does not determine a substitute Replacement Reference Rate, then the Replacement Reference Rate will remain unchanged.
For the avoidance of doubt, the Fiscal Agent shall, at the direction and expense of the Issuer, effect such consequential amendments to the Agency Agreement and these Conditions as may be required in order to give effect to the Replacement Reference Rate. No Noteholder consent shall be required in connection with effecting the Replacement Reference Rate or such other changes pursuant to the two preceding paragraphs, including for the execution of any documents or other steps by the Agents (if required).
Notwithstanding the above, (i) if the Benchmark Determination Agent determines that the Reference Rate on the Relevant Screen Page has been discontinued but for any reason a Replacement Reference Rate has not been determined, no Replacement Reference Rate or any other successor, replacement or alternative benchmark or screen rate will be adopted and the Reference Rate for the relevant Interest Period will be equal to the last Reference Rate available on the Relevant Screen Page as determined by the Calculation Agent.
The Benchmark Determination Agent may be (i) a leading bank or a brokerdealer in the principal financial center of the Specified Currency as appointed by the Issuer or (ii) the Calculation Agent.
In case of the Market Rate, if the specified Market Rate is not available, the applicable Interest Rate will be determined according to the fall-back rules of the relevant Floating Rate Option under the ISDA Definitions.
(iii) Rate of Interest for CMS Linked Notes
Where CMS Rate is specified in the applicable Final Terms (or for Exempt Notes, the applicable Pricing Supplement) as the manner in which the Interest Rate is to be determined, the Interest Rate for each Interest Period will be:
Margin + Multiplier x (CMS Rate1 +/- CMS Rate2)
where:
"Margin" has the meaning specified in the applicable Final Terms (or, in the case of the Exempt Notes, the applicable Pricing Supplement);
"Multiplier" shall mean the value specified in the applicable Final Terms (or, in the case of the Exempt Notes, the applicable Pricing Supplement);
"CMS Rate1" shall mean the CMS Reference Rate determined with reference to the First Reference Currency, the First Designated Maturity, the First Relevant Screen Page and the First Relevant Time; and
"CMS Rate2" shall mean the CMS Reference Rate determined with reference to the Second Reference Currency, the Second Designated Maturity, the Second Relevant Screen Page and the Second Relevant Time.
For the purposes of this Condition 6.2(b)(iii), the "CMS Reference Rate" for an Interest Period means the Relevant Swap Rate for swap transactions in the Reference Currency with a maturity of the Designated Maturity (as specified in the applicable Final Terms or, in the case of Exempt Notes the Pricing Supplement) commencing on the first day of the relevant Interest Period (expressed as a percentage rate per annum) which appears on the Relevant Screen Page (as specified in the applicable Final Terms or, in the case of Exempt Notes the Pricing Supplement) as at the Relevant Time (as specified in the applicable Final Terms or, in the case of Exempt Notes the Pricing Supplement) on the relevant Interest Determination Date, all as determined by the Agent or another calculation agent (as specified in the applicable Final Terms or, in the case of Exempt Notes the Pricing Supplement) (the "Calculation Agent").
If the Relevant Screen Page is not available, the Issuer and/or an agent appointed by the Issuer shall request each of the Reference Banks to provide the Issuer and/or an agent appointed by the Issuer with its quotation for the Relevant Swap Rate (expressed as a percentage rate per annum) at approximately the Relevant Time on the Interest Determination Date in question. If two or more of the Reference Banks provide the Issuer and/or an agent appointed by the Issuer with such quotations, the CMS Reference Rate for such Interest Period shall be the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) of the quotations, eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest).
If on any Interest Determination Date one only or none of the Reference Banks provides the Issuer and/or an agent appointed by the Issuer with such quotations as provided in the preceding paragraph, the CMS Reference Rate shall be determined by the Calculation Agent in its sole and absolute discretion on a commercial basis as it shall consider appropriate and in accordance with standard market practice.
"Reference Banks" means (i) where the Reference Currency is euro, the principal office of five leading swap dealers in the inter-bank market, (ii) where the Reference Currency is Sterling, the principal London office of five leading swap dealers in the London inter-bank market, (iii) where the Reference Currency is United States dollars, the principal New York City office of five leading swap dealers in the New York City inter-bank market, or (iv) in the case of any other Reference Currency, the principal Relevant Financial Centre office of five leading swap dealers in the Relevant Financial Centre inter-bank market, in each case as selected by the Issuer and/or an agent appointed by the Issuer.
equivalent to USD-LIBOR-BBA (as defined in the ISDA Definitions) with a designated maturity of three months; and
Where Linear Interpolation is specified hereon as applicable in respect of an Interest Period, the Rate of Interest for such Interest Period shall be calculated by the Calculation Agent by straight line linear interpolation by reference to two rates based on the relevant Reference Rate (where Screen Rate Determination is specified hereon as applicable) or the relevant Floating Rate Option (where ISDA Determination is specified hereon as applicable), one of which shall be determined as if the Applicable Maturity were the period of time for which rates are available next shorter than the length of the relevant Interest Period and the other of which shall be determined as if the Applicable Maturity were the period of time for which rates are available next longer than the length of the relevant Interest Period provided however that if there is no rate available for the period of time next shorter or, as the case may be, next longer, then the Calculation Agent shall determine such rate at such time and by reference to such sources as it determines appropriate.
"Applicable Maturity" means (a) in relation to Screen Rate Determination, the period of time designated in the Reference Rate and (b) in relation to ISDA Determination, the Designated Maturity.
(c) Rate of Interest on Inflation Linked Notes
The Rate of Interest, the Margin and the Inflation Factor in respect of Inflation Linked Notes for each Interest Period will be as specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement). Amounts of interest payable in respect of Inflation Linked Notes shall be calculated in accordance with Condition 7.
Rate of Interest x Range Accrual Factor
(ii) The "Range Accrual Factor" for an Observation Period corresponding to an Interest Payment Date will be calculated as the quotient of (i) n divided by (ii) N, expressed formulaically as:
where:
"n" in respect of an Observation Period corresponding to an Interest Payment Date is the number of Observation Dates within that Observation Period that the Accrual Condition is satisfied; and
"N" in respect of an Observation Period corresponding to an Interest payment Date, is the number of Observation Dates within that Observation Period.
in each case as determined by the Calculation Agent.
Where:
"Corresponding Lower Barrier" means, in respect of the determination of any Accrual Condition and any Range Accrual Floating Rate or Range Accrual Spread, the percentage rate specified as being 'Lower Barrier' applicable to such Range Accrual Floating Rate or Range Accrual Spread in the applicable Final Terms (or, in case of Exempt Notes, the applicable Pricing Supplement);
"Corresponding Upper Barrier" means, in respect of the determination of any Accrual Condition and Range Accrual Floating Rate or Range Accrual Spread, the percentage rate specified as being 'Upper Barrier' applicable to such Range Accrual Floating Rate or Range Accrual Spread in the applicable Final Terms (or, in case of Exempt Notes, the applicable Pricing Supplement);
"Observation Date" means each calendar day in the relevant Observation Period;
"Observation Period" means, unless otherwise specified in the relevant Issue Terms, each Interest Period;
"Range Accrual Floating Rate" means, in respect of any Observation Date in an Observation Period, the percentage rate of interest per annum for the relevant Observation Date calculated in accordance with Condition 6.2(d)(iv) below;
"Range Accrual Floating Rate 1" means, in respect of any Observation Date in an Observation Period, the Range Accrual Floating Rate determined in respect of (i) the Reference Rate (ii) the relevant Designated Maturity (if any) and (iii) the Relevant Screen Page specified as applicable to 'Range Accrual Floating Rate 1' in the applicable Final Terms (or, in case of Exempt Notes, the applicable Pricing Supplement); and
"Range Accrual Floating Rate 2" in respect of any Observation Date in an Observation Period, the Range Accrual Floating Rate determined in respect of (i) the Reference Rate (ii) the relevant Designated Maturity (if any) and (iii) the Relevant Screen Page specified as applicable to 'Range Accrual Floating Rate 2' in the Final Terms (or, in the case of the Exempt Notes, the applicable Pricing Supplement).
(iv) If on any Observation Date the Relevant Screen Page specified in the Final Terms (or, in the case of the Exempt Notes, the Pricing Supplement) to apply to a Range Accrual Floating Rate is not available, or no such offered quotation appears on such Relevant Screen Page as at the Relevant Screen Time specified in the Final Terms (or, in the case of the Exempt Notes, the Pricing Supplement) to apply to such Range Accrual Floating Rate, subject to the next sentence, such Range Accrual Floating Rate shall be deemed to be the corresponding Range Accrual Floating Rate for the immediately preceding calendar day on which an offered quotation appears on such Relevant Screen Page as at such Relevant Screen Time.
If the Relevant Screen Page specified in the Final Terms (or, in the case of the Exempt Notes, the Pricing Supplement) to apply to a Range Accrual Floating Rate is not available, or no such offered quotation appears on such Relevant Screen Page as at the Relevant Screen Time specified in the Final Terms (or, in the case of the Exempt Notes, the Pricing Supplement) to apply to such Range Accrual Floating Rate for seven consecutive calendar days, the relevant fallback provisions applicable to either ISDA Determination or Screen Rate Determination as set out in Condition 6.2 apply.
(e) Exempt Notes
The rate or amount of interest payable in respect of Exempt Notes shall be determined in the manner specified in the applicable Pricing Supplement, provided that the Calculation Agent, if applicable, will notify the Agent of the Interest Rate or Interest Amount for the relevant Interest Period as soon as practicable after calculating the same.
(f) Minimum Rate of Interest and/or Maximum Rate of Interest
If the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) specifies a "Minimum Rate of Interest" for any Interest Period, then, in the event that the Rate of Interest in respect of such Interest Period determined in accordance with the provisions of Condition 6.2(b) above is less than such Minimum Rate of Interest, the Rate of Interest for such Interest Period shall be such Minimum Rate of Interest (for clarity, following adjustment by an applicable Range Accrual Factor, if any).
If the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) specifies a "Maximum Rate of Interest" for any Interest Period, then, in the event that the Rate of Interest in respect of such Interest Period determined in accordance with the provisions of Condition 6.2(b) above is greater than such Maximum Rate of Interest, the Rate of Interest for such Interest Period shall be such Maximum Rate of Interest (for clarity, following adjustment by an applicable Range Accrual Factor, if any).
(g) Determination of Rate of Interest and Calculation of Interest Amounts
The Agent, in the case of Floating Rate Notes, and the Calculation Agent, in the case of Inflation Linked Notes, will at or as soon as practicable after each time at which the Rate of Interest is to be determined, determine the Rate of Interest for the relevant Interest Period. In the case of Inflation Linked Notes, the Calculation Agent will notify the Agent of the Rate of Interest for the relevant Interest Period as soon as practicable after calculating the same.
The Agent will calculate the amount of interest (the "Interest Amount") payable on the Floating Rate Notes or the Inflation Linked Notes in respect of each Specified Denomination for the relevant Interest Period. Each Interest Amount shall be calculated by applying the Rate of Interest to each Specified Denomination, multiplying such sum by the applicable Day Count Fraction, and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention.
"Day Count Fraction" means, in respect of the calculation of an amount of interest in accordance with this Condition 6.2:
(i) if "Actual/Actual" or "Actual/Actual (ISDA)" is specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the actual number of days in the Interest Period divided by 365 (or, if any portion of that Interest Period falls in a leap year, the sum of (I) the actual number of days in that portion of the Interest Period falling in a leap year divided by 366 and (II) the actual number of days in that portion of the Interest Period falling in a non-leap year divided by 365);
The Agent will cause the Rate of Interest and each Interest Amount for each Interest Period and the relevant Interest Payment Date to be notified to the Issuer, and any stock exchange on which the relevant Floating Rate Notes or Inflation Linked Notes are for the time being listed and notice thereof to be published in accordance with Condition 17 (Notices) as soon as possible after their determination but in no event later than the fourth London Business Day thereafter. Each Interest Amount and Interest Payment Date so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without prior notice in the event of an extension or shortening of the Interest Period. Any such amendment will be promptly notified to each stock exchange on which the relevant Floating Rate Notes or Inflation Linked Notes are for the time being listed and to the Noteholders in accordance with Condition 17 (Notices). For the purposes of this paragraph, the expression "London Business Day" means a day (other than a Saturday or a Sunday) on which banks and foreign exchange markets are open for general business in London.
(i) Certificates to be Final
All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 6.2 (Interest – Interest on Floating Rate Notes and Inflation Linked Notes), whether by the Agent or, if applicable, the Calculation Agent, shall (in the absence of wilful default, bad faith or manifest error or proven error) be binding on the Issuer, the Agent, the Calculation Agent (if applicable), the other Paying Agents and all Noteholders and Couponholders and (in the absence as aforesaid) no liability to the Issuer, the Noteholders or the Couponholders shall attach to the Agent or, if applicable, the Calculation Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions pursuant to such provisions.
Each Note (or in the case of the redemption of part only of a Note, that part only of such Note) will cease to bear interest (if any) from the date for its redemption unless, upon due presentation thereof, payment of principal is improperly withheld or refused. In such event, interest will continue to accrue until whichever is the earlier of:
This Condition 7 is applicable only if the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) specify the Notes as Inflation Linked Notes. The Rate of Interest for Inflation Linked Notes that are Exempt Notes can also be determined in any other manner specified in the relevant Pricing Supplement.
accordance with Condition 7.1(b)(i) or Condition 7.1(b)(ii), as specified in the applicable Final Terms (or, in case of Exempt Notes, the applicable Pricing Supplement).
(i) If this Condition 7.1(b)(i) applies, the applicable Interest Rate is the sum of (x) a margin percentage rate specified as such in the Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) for such relevant Interest Payment Date (which rate may be negative) (the "Margin") plus (y) the Inflation Factor determined for such relevant Interest Payment Date in accordance with Condition 7.2 below and rounded in accordance with Condition 6.2(g); which can also be expressed formulaically as:
(ii) If this Condition 7.1(b)(ii) applies, the applicable Interest Rate is the total of (x) a margin percentage rate specified as such in the Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) for such relevant Interest Payment Date (which rate may be negative) (the "Margin") multiplied by (y) the Inflation Factor determined for such relevant Interest Payment Date in accordance with Condition 7.2 below and rounded in accordance with Condition 6.2(g); which can also be expressed formulaically as:
(c) If the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) specifies a Minimum Rate of Interest for any Interest Period, then, in the event that the Rate of Interest in respect of such Interest Period determined in accordance with the provisions of Condition 7.1(b) above is less than such Minimum Rate of Interest, the Rate of Interest for such Interest Period shall be such Minimum Rate of Interest.
If the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) specifies a Maximum Rate of Interest for any Interest Period, then, in the event that the Rate of Interest in respect of such Interest Period determined in accordance with the provisions of Condition 7.1(b) above is greater than such Maximum Rate of Interest, the Rate of Interest for such Interest Period shall be such Maximum Rate of Interest.
(a) Option A
Where Option A is specified in the relevant Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the applicable Inflation Factor is determined by dividing:
(i) the Inflation Index Level for the calendar month ("Reference Month") specified in the Final Terms (or in the case of Exempt Notes, the relevant Pricing Supplement) as applicable to the relevant Interest Payment Date ("Final Index"); by
(ii) the Inflation Index Level for the Reference Month specified in the Final Terms (or in the case of Exempt Notes, the relevant Pricing Supplement) as applicable to the Initial Valuation Date ("Base Index").
The Inflation Factor of Option A can also be expressed formulaically as:
The following terms as used above have the following meanings:
"Calculation Amount" means a nominal amount of the Notes equal to the Specified Denomination (unless a different amount is specified in the relevant Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), in which case, such amount).
"Day Count Fraction" means the fraction equal to the number of days of the Interest Period divided by the number of days of the year, in each case as determined by the applicable convention, which may be any of 'Actual/Actual(ICMA)', 'Act/Act(ICMA)', 'Actual/Actual', 'Actual/Actual (ISDA)', 'Actual/365 (Fixed)', 'Actual/360', '30/360', '360/360', 'Bond Basis', '30E/360', 'Eurobond Basis', '30E/360 (ISDA)' (each as defined in Condition 6.2(g)), as specified in the relevant Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement).
"Inflation Index" means either the Index, as specified in the Final Terms (or in the case of Exempt Notes, the relevant Pricing Supplement) and published by the relevant index sponsor (as specified in the relevant Final Terms or, in the case of Exempt Notes, the relevant Pricing Supplement) (the "Index Sponsor").
"Inflation Index Level" means the level of the Inflation Index first published or announced for the relevant Reference Month, as determined by the Calculation Agent, subject to Condition 7.4.
"Interest Determination Date" means the date specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) or, if no such date is specified, the date falling five Business Days prior to the relevant Interest Payment Date.
"Interest Payment Date" means the date or dates specified as such in the Final Terms (or, in the case of the Exempt Notes, the Pricing Supplement).
"Initial Valuation Date" means the date specified in the Final Terms (or in the case of Exempt Notes, the relevant Pricing Supplement).
(b) Option B
Where Option B is specified in the relevant Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the applicable Inflation Factor is determined by dividing:
and subtracting "one".
The Inflation Factor of Option B can also be expressed formulaically as:
| $Final Index$ | 1 |
|---|---|
| $Base Index$ | 1 |
The following terms as used above have the following meanings:
"Calculation Amount" means a nominal amount of the Notes equal to the Specified Denomination (unless a different amount is specified in the relevant Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), in which case, such amount).
"Day Count Fraction" means the fraction equal to the number of days of the Interest Period divided by the number of days of the year, in each case as determined by the applicable convention, which may be any of 'Actual/Actual(ICMA)', 'Act/Act(ICMA)', 'Actual/Actual', 'Actual/Actual (ISDA)', 'Actual/365 (Fixed)', 'Actual/360', '30/360', '360/360', 'Bond Basis', '30E/360', 'Eurobond Basis', '30E/360 (ISDA)' (each as defined in Condition 6.2(g)), as specified in the relevant Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement).
"Inflation Index" means either the RPI, the HICP, the French CPI, the Italian CPI or the U.S. CPI, as specified in the Final Terms (or in the case of Exempt Notes, the relevant Pricing Supplement) and published by the relevant Index Sponsor.
"Inflation Index Level" means the level of the Inflation Index first published or announced for the relevant Reference Month, as determined by the Calculation Agent, subject to Condition 7.4.
"Interest Determination Date" means the date specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) or, if no such date is specified, the date falling five Business Days prior to the relevant Interest Payment Date.
"Interest Payment Date" means the date or dates specified as such in the Final Terms (or, in the case of the Exempt Notes, the Pricing Supplement).
"Initial Valuation Date" means the date specified in the Final Terms (or in the case of Exempt Notes, the relevant Pricing Supplement).
(c) Option C
Where Option C is specified in the relevant Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the applicable Inflation Factor is determined by the following formula as applicable to any day ("d") in any month ("m"):
$$
I_d = Index_{m-3} + \frac{nbd}{q_m} \times (Index_{m-2} - Index_{m-3})
$$
where:
"Id" is the Index Level for the day d, subject to Condition 7.4;
"Indexm-2" is the level of Inflation Index Level for month m-2;
"Indexm-3" is the level of Inflation Index Level for month m-3;
"Inflation Index" means the Index, as specified in the Final Terms (or in the case of Exempt Notes, the relevant Pricing Supplement) and published by the relevant Index Sponsor;
"Inflation Index Level" means the level of the Inflation Index first published or announced for the relevant Reference Month, as determined by the Calculation Agent, subject to Condition 7.4;
"nbd" is the actual number of days from and excluding the first day of month m to but including day d;
and
"qm" is the actual number of days in month m.
(d) The first publication or announcement of the Inflation Index Level for a Reference Month shall be final and conclusive and later revisions to the level for such calculation month will not be used in any calculations.
(a) United Kingdom Retail Price Index
Where RPI is specified as the Index in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the applicable Index for the relevant Inflation Linked Notes is the UK Retail Price Index (for all items) published by the Office for National Statistics (January 1987 = 100) or any comparable index which may replace the UK Retail Price Index for the purpose of calculating the amount payable on repayment of the Related Bond as defined in Condition 7.4 (the "RPI"). Information on the RPI may be found on the website of the Office for National Statistics at http://ons.gov.uk/ons/taxonomy/index.html?nscl=Retail+Prices+Index#tab-data-tables or at http://www.bloomberg.com/quote/UKRPI:IND.
(b) Harmonised Index of Consumer Prices
Where HICP is specified as the Index in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the applicable Index for the relevant Inflation Linked Notes is the non-revised Harmonised Index of Consumer Prices excluding tobacco or relevant Successor Index as defined in Condition 7.4, measuring the rate of inflation in the European Monetary Union excluding tobacco, expressed as an index and published by Eurostat (the "HICP"). Information on the HICP may be found on the Eurostat website at http://ec.europa.eu/eurostat/web/hicp or at http://www.bloomberg.com/quote/CPEXEMUY:IND.
(c) French Consumer Price Index
Where the French CPI is specified as the Index in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the applicable Index for the relevant Inflation Linked Notes is the consumer price index excluding tobacco for all households in metropolitan France, as calculated and published by the Institut National de la Statistique et des Etudes Economiques (the "INSEE") (the "French CPI"). Information on the French CPI may be found on the website www.aft.gouv.fr and on the Agence France Trésor Reuters page OATINFLATION01 or on Bloomberg TRÉSOR
(d) Italian Consumer Price Index
Where the Italian CPI is specied as the Index in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the applicable Index for the relevant Inflation Linked Notes is the consumer price index (excluding tobacco) in Italy, ("Indice dei prezzi al consumo per famiglie di operai e impiegati (FOI) senza tabacchi") published by Istituto nazionale di statistica (the "Italian CPI"). Information on the Italian CPI may be found on the Istat website at http://www.istat.it/en/archive/CPI.
(e) U.S. Consumer Price Index
Where the U.S. CPI is specified as the Index in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the applicable Index for the relevant Inflation Linked Notes is the All Items Consumer Price Index for All Urban Consumers (CPI-U) before seasonal adjustment (the "U.S. CPI") published by the U.S. Bureau of Labor Statistics. Information on the U.S. CPI may be found on the website of the U.S. Bureau of Labor Statistics at http://www.bls.gov/cpi/ or at http://www.bloomberg.com/quote/CPURNSA:IND.
Where this Condition 7.4(a)(i) is specified as applicable in the relevant Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the following provisions will apply to a delay in the publication of the Index.
If the Calculation Agent determines that any Index Level for a Reference Month which is relevant to the calculation of any payment or delivery under the Notes and/or any other determination in respect of the Notes (a "Relevant Level") has not been published or announced by the related Cut-off Date, the Calculation Agent shall determine an alternative level in place of such Relevant Level (a "Substitute Index Level") by using the following methodology:
Substitute Index Level = Base Level x (Latest Level/Reference Level),
where:
"Base Level" means the Index Level (excluding any "flash" estimates) published or announced by the Index Sponsor in respect of the month that is 12 calendar months prior to the month for which the Substitute Index Level is being determined.
"Latest Level" means the latest Index Level (excluding any "flash estimates") published or announced by the Index Sponsor prior to the month in respect of which the Substitute Index Level is being determined.
"Reference Level" means, in respect of an Index, the Index Level (excluding any "flash" estimates) published or announced by the relevant Index Sponsor in respect of the month that is 12 calendar months prior to the month referred to in "Latest Level" above.
If a Relevant Level is published or announced at any time on or after the Cutoff Date then such Relevant Level will not be used in any calculations. The Substitute Index Level so determined pursuant to Condition 7.4 will be the definitive level for that Reference Month.
The Issuer shall give notice to Noteholders in accordance with Condition 17 of any Substitute Index Level calculated pursuant to this Condition 7.4.
(ii) French CPI
Where this Condition 7.4(a)(ii) is specified as applicable in the relevant Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the following provisions will apply to a delay in the publication of the Index.
The calculation method described below is based on the recommendation issued by the French Bond Association (Comité de Normalisation Obligataire www.cnofrance.org) in its July 2011 Paper entitled "Inflation-linked bonds".
If the relevant French CPI ("CPI Monthly Reference Index") is not published in a timely manner, a substitute CPI Monthly Reference Index (the "Substitute CPI Monthly Reference Index") shall be determined by the Calculation Agent in accordance with the following provisions:
If a provisional CPI Monthly Reference Index (indice provisoire) has already been published, such index shall be used as the Substitute CPI Monthly Reference Index. Such provisional CPI Monthly Reference Index would be published under the heading indice de substitution. Once the definitive CPI Monthly Reference Index is released, it would apply from the day following its release to all calculations taking place from this date.
If no provisional CPI Monthly Reference Index is available, a substitute index shall be calculated on the basis of the most recently published figure adjusted as set out in the following formula:
Substitute CPI Monthly Reference IndexM=
CPI Monthly Reference
$$
\times \left[ \frac{CPI \; Monthly \; Reference \; Index_{M-1}}{CPI \; Monthly \; Reference \; Index_{M-13}} \right] \frac{1}{12}
$$
If the Calculation Agent determines that the Index Level has not been published or announced by the relevant Index Sponsor for two consecutive months or the Index Sponsor announces that it will no longer continue to publish or announce such Index and/or the Index Sponsor cancels the Index, then the Calculation Agent shall determine a successor index in lieu of any previously applicable Index (a "Successor Index") for the purposes of the relevant Notes by using the following methodology:
(i) if Related Bond is specified in the applicable Final Terms or, in the case of Exempt Notes, the applicable Pricing Supplement, the Calculation Agent shall determine a Successor Index by reference to the corresponding successor index determined under the terms and conditions of the Related Bond;
In relation to the determination of any Successor Index in accordance with this Condition 7.4, the Calculation Agent shall determine the date on which the Successor Index shall be deemed to replace the relevant Index for the purposes of the Notes. Notice of the determination of a Successor Index and the effective date of the Successor Index shall be given to Noteholders by the Issuer in accordance with Condition 17.
(c) Adjustments
(i) Successor Index
If a Successor Index is determined in accordance with Condition 7.4(b) above, the Calculation Agent may make any adjustment or adjustments (without limitation) to any amount payable under the Notes and/or any other relevant term of the Notes as the Calculation Agent deems necessary to account for this. The Issuer shall give notice to the Noteholders of any such adjustment in accordance with Condition 17.
If the Calculation Agent determines a Substitute Index Level in accordance with Condition 7.4(a), the Issuer shall make any adjustment or adjustments (without limitation) to (x) the Substitute Index Level determined in accordance with Condition 7.4(a) above and/or (y) any amount payable under the Notes and/or any other relevant term of the Conditions as the Calculation Agent deems necessary, in agreement with the Issuer, that are necessary and consistent with the adjustments made to the Index and with the intention that the same should leave the Issuer and the Noteholders in no better and no worse position than they would have been had the initial Index continued to apply. The Issuer shall give notice to the Noteholders of any such adjustment in accordance with Condition 17.
Level shall not be used in any calculation or determination under the Notes and that the Substitute Index Level shall be deemed to be the definitive Relevant Level for the relevant Reference Month, or (y) request the Issuer to make any adjustment to any amount payable under the Notes and/or any other relevant term of the Notes as it deems, in agreement with the Issuer, appropriate, necessary and consistent with the adjustments made to the Index and with the intention that the same should leave the Issuer and the Noteholders in no better and no worse position than they would have been had the Relevant Level continued to apply, as a result of the announcement or publication of the Relevant Level and/or determine the amount (if any) that is payable as a result of such publication or announcement. The Issuer shall give notice to the Noteholders of any determination in respect of (x) or (y), together with any adjustment and/or amount in respect thereof, in accordance with Condition 17.
Where this Condition 7.4(c)(iv)(A) is specified as applicable in the relevant Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the following provisions will apply to the rebasing of the Index.
If the Calculation Agent determines that the Index has been or will be rebased at any time, the Index as so rebased (the "Rebased Index") will be used for purposes of determining the Index Level from the date of such rebasing (the "Rebased Index Level"). Notwithstanding the foregoing, the Calculation Agent may:
same rate of inflation as the Index before it was rebased,
and in each case the Issuer shall make any adjustments to any amount payable under the Notes and/or any other term of the Notes necessary and consistent with the Rebased Index. Notice of any such adjustment and the effective date thereof shall be given to Noteholders in accordance with Condition 17.
Any such rebasing will not affect any prior payments made under the Notes.
(B) The French CPI
Where this Condition 7.4(c)(iv)(B) is specified as applicable in the relevant Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the following provisions will apply to the rebasing of the Index.
In the event INSEE decides to proceed with one or more base changes for the purpose of calculating the CPI Monthly Reference Index, the two CPI Monthly Reference Indexes which have been calculated on a different basis will be chained on the basis of the December CPI Monthly Reference Index of the last year of joint publications, which corresponds to the CPI Daily Inflation Reference Index for 1st March of the following year.
Such chaining will be carried out in accordance with the following equation:
Key = CPI Monthly Reference Indexpertaining to December calculated on the new basis CPI Monthly Reference Indexpertaining to December calculated on the previous basis
Such that:
CPI Monthly Reference Index Date D New Basis = CPI Monthly Reference Index Date D Previous Basis XKey
any amount payable under the Securities), consistent with any adjustments made to the Related Bond, or
For purposes of any calculations by the Calculation Agent in connection with the Index, all percentages resulting from such calculations will be rounded, if necessary, either:
(A) if Related Bond is specified as applicable in the applicable Final Terms (or, in the case of the Exempt Notes, the applicable Pricing Supplement), in accordance with the rounding conventions of the documentation governing the Related Bond; or
(d) Definitions
Defined terms in this Condition 7.4 shall have the following meaning:
"Cut-off Date" means the fifth Business Day prior to a relevant Payment/Delivery Date.
"Fallback Bond" means a bond selected by the Calculation Agent and issued by the government of the country to whose level of inflation the Index relates and which pays a coupon or redemption amount which is calculated by reference to the Index, with a maturity date which falls on (a) the same day as the Maturity Date, (b) a day that is the closest day to but following the Maturity Date if there is no such bond maturing on the Maturity Date, or (c) a day that is the closest to but preceding the Maturity Date if no bond defined in (a) or (b) is reasonably available for selection by the Calculation Agent. If the Index relates to the level of inflation across the European Monetary Union, the Calculation Agent will select an inflation linked bond that is a debt obligation of one of the governments (but not any government agency) of France, Italy, Germany or Spain and which pays a coupon or redemption amount which is calculated by reference to the level of inflation in the European Monetary Union. In each case, the Calculation Agent will select the Fallback Bond from those inflation linked bonds issued on or before the Issue Date and, if there is more than one inflation linked bond maturing on the same date, the Fallback Bond shall be selected by the Calculation Agent from those bonds. If the Fallback Bond redeems the Calculation Agent will select a new Fallback Bond on the same basis, but selected from all eligible bonds in issue at the time the original Fallback Bond redeems (including any bond for which the redeemed bond is exchanged).
"Index" means the inflation index specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) or any Successor Index as determined by the Calculation Agent pursuant to Condition 7.4(b).
"Index Level" means subject to the provisions of Condition 7.4(c), the first publication or announcement of a level of the Index for the relevant Reference Month.
"Index Modification" means the Index Sponsor announces a (in the opinion of the Calculation Agent) material change in the formula for or the method of calculating the Index or in any other way materially modifies the Index.
"Index Sponsor" means the entity that publishes or announces (directly or through an agent) the Index Level, which as of the Issue Date is the Index Sponsor specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement).
"Payment/Delivery Date" means a day on which a payment or delivery is scheduled to be made in respect of the Notes, the amount of which is to be determined by reference to an Index Level or any Substitute Index Level.
"Reference Month" means, as specified in the Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the relevant calendar month for which the Index Level is reported, regardless of when this information is published or announced. If the period for which the Index Level is reported is a period other than a month, the Reference Month is the period for which the Index Level is reported.
"Related Bond" means the bond (if any) specified as such in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), provided that, if no bond is specified as the Related Bond, the Related Bond shall be the Fallback Bond. If the Related Bond redeems or matures during the term of the relevant Notes, following such redemption or maturity, the Related Bond shall be the Fallback Bond.
"Related Bond Redemption Event" means at any time prior to the Maturity Date, (i) the Related Bond is redeemed, repurchased or cancelled; (ii) the Related Bond becomes repayable prior to its stated date of maturity for whatever reason; or (iii) the issuer of the Related Bond announces that the Related Bond will be redeemed, repurchased or cancelled prior to its stated date of maturity.
Subject as provided below:
(a) payments in a Specified Currency other than Euro will be made by credit or transfer to an account in the relevant Specified Currency (which, in the case of a payment in Japanese Yen to a non-resident of Japan, shall be a non-resident account) maintained by the payee with, or, at the option of the payee, by a cheque in such Specified Currency drawn on, a bank in the principal financial centre of the country of such Specified Currency (which, if the Specified Currency is Australian dollars or New Zealand dollars, shall be Sydney and Auckland, respectively); and
(b) payments in Euro will be made by credit or transfer to a Euro account (or any other account to which Euro may be credited or transferred) specified by the payee or, at the option of the payee, by a Euro cheque.
Payments will be subject in all cases to any fiscal or other laws and regulations applicable thereto in the place of payment, but without prejudice to the provisions of Condition 11 (Taxation).
Payments of principal in respect of definitive Bearer Notes will (subject as provided below) be made in the manner provided in Condition 8.1 (Payments – Method of Payment) above only against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of definitive Bearer Notes, and payments of interest in respect of definitive Bearer Notes will (subject as provided below) be made as aforesaid only against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of Coupons, in each case at the specified office of any Paying Agent outside the United States (which expression, as used herein, means the United States of America (including the States and the District of Columbia, its territories, its possessions and other areas subject to its jurisdiction)).
Fixed Rate Notes in definitive bearer form (other than Long Maturity Notes (as defined below) and Fixed Rate Notes which specify Interest Payment Date Adjustment as being applicable in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) or Inflation Linked Notes) should be presented for payment together with all unmatured Coupons appertaining thereto (which expression shall for this purpose include Coupons falling to be issued on exchange of matured Talons), failing which the amount of any missing unmatured Coupon (or, in the case of payment not being made in full, the same proportion of the amount of such missing unmatured Coupon as the sum so paid bears to the sum due) will be deducted from the sum due for payment. Each amount of principal so deducted will be paid in the manner mentioned above against surrender of the relative missing Coupon at any time before the expiry of 10 years after the Relevant Date (as defined in Condition 11 (Taxation)) in respect of such principal (whether or not such Coupon would otherwise have become void under Condition 12 (Prescription)) or, if later, five years from the date on which such Coupon would otherwise have become due, but in no event thereafter.
Upon any Fixed Rate Note in definitive bearer form becoming due and repayable prior to its Maturity Date, all unmatured Talons (if any) appertaining thereto will become void and no further Coupons will be issued in respect thereof.
Upon the date on which any Floating Rate Note, Long Maturity Note, Fixed Rate Note which specify Interest Payment Date Adjustment as being applicable in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) or Inflation Linked Note in definitive bearer form becomes due and repayable, unmatured Coupons and Talons (if any) relating thereto (whether or not attached) shall become void and no payment or, as the case may be, exchange for further Coupons shall be made in respect thereof. A "Long Maturity Note" is a Fixed Rate Note (other than a Fixed Rate Note which on issue had a Talon attached) whose nominal amount on issue is less than the aggregate interest payable thereon provided that such Note shall cease to be a Long Maturity Note on the Interest Payment Date on which the aggregate amount of interest remaining to be paid after that date is less than the nominal amount of such Note.
If the due date for redemption of any definitive Bearer Note is not an Interest Payment Date, interest (if any) accrued in respect of such Note from (and including) the preceding Interest Payment Date or, as the case may be, the Interest Commencement Date shall be payable only against surrender of the relevant definitive Note.
Payments of principal and interest (if any) in respect of Notes represented by any Global Note in bearer form will (subject as provided below) be made in the manner specified above in relation to definitive Bearer Notes and otherwise in the manner specified in the relevant Global Note against presentation or surrender, as the case may be, of such Global Note at the specified office of any Paying Agent outside the United States. A record of each payment made against presentation or surrender of any Global Note in bearer form, distinguishing between any payment of principal and any payment of interest, will be made on such Global Note by the Paying Agent to which it was presented and such record shall be prima facie evidence that the payment in question has been made.
Payments of principal in respect of each Registered Note (whether or not in global form) will be made against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of the Registered Note at the specified office of the Registrar or any of the Paying Agents. Such payments will be made by transfer to the Designated Account (as defined below) of the holder (or the first named of joint holders) of the Registered Note appearing in the register of holders of the Registered Notes maintained by the Registrar (the "Register") at the close of business on the third business day (being for this purpose a day on which banks are open for business in the city where the specified office of the Registrar is located) before the relevant due date. Notwithstanding the previous sentence, if (i) a holder does not have a Designated Account or (ii) the principal amount of the Notes held by a holder is less than U.S.\$250,000 (or its approximate equivalent in any other Specified Currency), payment will instead be made by a cheque in the Specified Currency drawn on a Designated Bank (as defined below). For these purposes, "Designated Account" means the account (which, in the case of a payment in Japanese Yen to a non-resident of Japan, shall be a non-resident account) maintained by the holder with a Designated Bank and identified as such in the Register and "Designated Bank" means (in the case of payment in a Specified Currency other than Euro) a bank in the principal financial centre of the country of such Specified Currency (which, if the Specified Currency is Australian dollars or New Zealand dollars, shall be Sydney or Auckland, respectively) and (in the case of a payment in Euro) any bank which processes payments in Euro.
Payments of interest in respect of each Registered Note (whether or not in global form) will be made by a cheque in the Specified Currency drawn on a Designated Bank and mailed by uninsured mail on the business day in the city where the specified office of the Registrar is located immediately preceding the relevant due date to the holder (or the first named of joint holders) of the Registered Note appearing in the Register at the close of the day prior to the relevant due date (the "Record Date") at his address shown in the Register on the Record Date and at his risk. Upon application of the holder to the specified office of the Registrar not less than three business days in the city where the specified office of the Registrar is located before the due date for any payment of interest in respect of a Registered Note, the payment may be made by transfer on the due date in the manner provided in the preceding paragraph. Any such application for transfer shall be deemed to relate to all future payments of interest (other than interest due on redemption) in respect of the Registered Notes which become payable to the holder who has made the initial application until such time as the Registrar is notified in writing to the contrary by such holder. Payment of the interest due in respect of each Registered Note on redemption will be made in the same manner as payment of the principal amount of such Registered Note.
Holders of Registered Notes will not be entitled to any interest or other payment for any delay in receiving any amount due in respect of any Registered Note as a result of a cheque posted in accordance with this Condition 8.4 arriving after the due date for payment or being lost in the post. No commissions or expenses shall be charged to such holders by the Registrar in respect of any payments of principal or interest in respect of the Registered Notes.
All amounts payable to DTC or its nominee as registered holder of a Registered Global Note in respect of Notes denominated in a Specified Currency other than U.S. dollars shall be paid by transfer by the Registrar to an account in the relevant Specified Currency of the Exchange Rate Agent on behalf of DTC or its nominee for conversion into and payment in U.S. dollars in accordance with the provisions of the Agency Agreement.
None of the Issuer, or the Agents will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the Registered Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
The holder of a Global Note shall be the only person entitled to receive payments in respect of Notes represented by such Global Note and the Issuer will be discharged by payment to, or to the order of, the holder of such Global Note in respect of each amount so paid. Each of the persons shown in the records of Euroclear or Clearstream, Luxembourg or DTC as the beneficial holder of a particular nominal amount of Notes represented by such Global Note must look solely to Euroclear or Clearstream, Luxembourg or DTC, as the case may be, for his share of each payment so made by the Issuer to, or to the order of, the holder of such Global Note.
Notwithstanding the foregoing provisions of this Condition, if any amount of principal and/or interest in respect of Bearer Notes is payable in U.S. dollars, such U.S. dollar payments of principal and/or interest in respect of such Notes will be made at the specified office of a Paying Agent in the United States if:
(i) the Issuer has appointed Paying Agents with specified offices outside the United States with the reasonable expectation that such Paying Agents would be able to make payment in U.S. dollars at such specified offices outside the United States of the full amount of principal and interest on the Bearer Notes in the manner provided above when due;
If the date for payment of any amount in respect of any Note or Coupon is not a Payment Day, the holder thereof shall not be entitled to payment until the next following Payment Day in the relevant place and shall not be entitled to further interest or other payment in respect of such delay. For these purposes, Payment Day means any day which (subject to Condition 12 (Prescription)) is:
Any reference in the Conditions to principal in respect of the Notes shall be deemed to include, as applicable:
Any reference in the Conditions to interest in respect of the Notes shall be deemed to include, as applicable, any additional amounts which may be payable with respect to interest under Condition 11 (Taxation).
The Final Inflation Factor calculation can also be expressed formulaically as:
( ) ( )
"Calculation Amount" means a nominal amount of the Notes equal to the Specified Denomination (unless a different amount is specified in the Final Terms or, in the case of Exempt Notes, the Pricing Supplement, in which case, such amount).
"Inflation Index" means either the RPI, the HICP, the French CPI, the Italian CPI or the U.S. CPI, as specified in the Final Terms (or in the case of Exempt Notes, the relevant Pricing Supplement).
"Inflation Index Level" means the level of the Inflation Index first published or announced for the relevant Reference Month as specified in the Final Terms (or in the case of Exempt Notes, the relevant Pricing Supplement), as determined by the Calculation Agent, subject to Condition 7.4.
"Initial Valuation Date" means the date specified in the Final Terms (or in the case of Exempt Notes, the relevant Pricing Supplement).
"Valuation Date" means the Initial Valuation Date, the Final Valuation Date or any other date on which the Inflation Index Level is required to be determined.
The Notes may be redeemed at the option of the Issuer in whole, but not in part, at any time (if the Notes are Fixed Rate Notes, Inflation Linked Notes or Zero Coupon Notes) or on any Interest Payment Date (if the Notes are Floating Rate Notes or Inflation Linked Notes) (the "Early Redemption Date"), on giving not less than 30 nor more than 60 days' notice to the Agent and, in accordance with Condition 17 (Notices), the Noteholders (which notice shall be irrevocable), if:
(i) on the occasion of the next payment due under the Notes, the Issuer has or will become obliged to pay additional amounts as provided or referred to in Condition 11 (Taxation) as a result of any change in, or amendment to, the laws or regulations of France or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after the date on which agreement is reached to issue the first Tranche of the Notes; and
(ii) such obligation cannot be avoided by the Issuer taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such additional amounts were a payment in respect of the Notes then due.
Prior to the publication of any notice of redemption pursuant to this Condition, the Issuer shall deliver to the Agent a certificate signed by the Finance Director of the Issuer stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred, and an opinion of independent legal advisers of recognised standing to the effect that the Issuer has or will become obliged to pay such additional amounts as a result of such change or amendment.
Notes redeemed pursuant to this Condition 9.2 (Redemption and Purchase – Redemption for Tax Reasons) will be redeemed at their Early Redemption Amount referred to in Condition 9.5 (Redemptions and Purchase – Early Redemption Amounts).
If Issuer Call is specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), the Issuer may, having given:
(which notices shall be irrevocable and shall specify the date fixed for redemption) redeem all or some only of the Notes then outstanding on any optional redemption date (the "Optional Redemption Date"), as specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), and at the Optional Redemption Amount(s) calculated in accordance with Condition 9.6. Any such redemption must be of a nominal amount not less than the Minimum Redemption Amount and not more than the Maximum Redemption Amount, in each case as may be specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement). In the case of a partial redemption of Notes, the Notes to be redeemed ("Redeemed Notes") will be selected individually by lot, in the case of Redeemed Notes represented by definitive Notes, and in accordance with the rules of Euroclear and/or Clearstream, Luxembourg and/or DTC, as applicable, (to be reflected in the records of Euroclear and/or Clearstream, Luxembourg and/or DTC as either a pool factor or a reduction in nominal amount, at their discretion) in the case of Redeemed Notes represented by a Global Note, not more than 30 days prior to the date fixed for redemption (such date of selection being hereinafter called the "Selection Date"). In the case of Redeemed Notes represented by definitive Notes, a list of the serial numbers of such Redeemed Notes will be published in accordance with Condition 17 (Notices) not less than 15 days prior to the date fixed for redemption.
The aggregate nominal amount of Redeemed Notes represented by definitive Notes shall bear the same proportion to the aggregate nominal amount of all Redeemed Notes as the aggregate nominal amount of definitive Notes outstanding bears to the aggregate nominal amount of the Notes outstanding, in each case on the Selection Date, provided that such first mentioned nominal amount shall, if necessary, be rounded downwards to the nearest integral multiple of the Specified Denomination, and the aggregate nominal amount of Redeemed Notes represented by a Global Note shall be equal to the balance of the Redeemed Notes. No exchange of the relevant Global Note will be permitted during the period from (and including) the Selection Date to (and including) the date fixed for redemption pursuant to this Condition 9.3 and notice to that effect shall be given by the Issuer to the Noteholders in accordance with Condition 17 (Notices) at least five days prior to the Selection Date.
If Investor Put is specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), upon the holder of any Note giving to the Issuer in accordance with Condition 17 (Notices) not less than 15 nor more than 30 days' notice, the Issuer will, upon the expiry of such notice, redeem such Note on the Optional Redemption Date, as specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), and at the Optional Redemption Amount calculated in accordance with Condition 9.6. Registered Notes may only be redeemed under this Condition 9.4 in any multiple of their lowest Specified Denomination.
To exercise the right to require redemption of the Notes the holder of the Notes must deliver, at the specified office of any Paying Agent (in the case of Bearer Notes) or the Registrar (in the case of Registered Notes) at any time during normal business hours of such Paying Agent or, as the case may be, the Registrar falling within the notice period, a duly completed and signed notice of exercise in the form (for the time being current) obtainable from any specified office of any Paying Agent or, as the case may be, the Registrar (a "Put Notice") and in which the holder must specify a bank account (or, if payment is required to be made by cheque, an address) to which payment is to be made under this Condition 9.4 and, in the case of Registered Notes, the nominal amount thereof to be redeemed and, if less than the full nominal amount of the Registered Notes so surrendered is to be redeemed, an address to which a new Registered Note in respect of the balance of such Registered Notes is to be sent subject to and in accordance with the provisions of Condition 2(b) (Transfers of Registered Notes–Transfers of Registered Notes in Definitive Form). If the Notes are in definitive form, the Put Notice must be accompanied by the Notes or evidence satisfactory to the Paying Agent concerned that the Notes will, following delivery of the Put Notice, be held to its order or under its control.
Any Put Notice given by a holder of any Note pursuant to this paragraph shall be irrevocable except where, prior to the due date of redemption, an Event of Default shall have occurred and be continuing, in which event such holder, at its option, may elect by notice to the Issuer to withdraw the notice given pursuant to this paragraph and instead to declare such Note forthwith due and payable pursuant to Condition 13 (Events of Default).
For the purpose of Condition 9.2 (Redemption and Purchase–Redemption for Tax Reasons) above and Condition 13 (Events of Default), each Note will be redeemed at its Early Redemption Amount as follows:
Early Redemption Amount = RP x (1 + AY)y
where:
For the purpose of Condition 9.3 (Redemption at the Option of the Issuer (Issuer Call)), each Fixed Rate Note and Floating Rate Note will be redeemed at its Optional Redemption Amount, as specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), calculated as follows:
The Make-whole Premium is the value of all required interest payments that would otherwise be due to be paid on the Notes during the period between the Optional Redemption Date and the Maturity Date, excluding accrued but unpaid interest at the Optional Redemption Date, calculated using a discount rate equal to the sum of the applicable redemption margin (the "Redemption Margin"), as specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), and the yield to maturity of the applicable Reference Bond quoted on the Quotation Date. Neither the Agent nor the Calculation Agent will perform the calculation of the Make-whole Premium.
The Reference Bond will be a government bond commonly used as a point of reference in the relevant bond market with a maturity mostly nearly equal to the remaining life of the Notes that would be utilised, at the time of selection and in accordance with customary financial practice, in pricing new issues of denominated corporate debt securities in a principal amount approximately equal to the then outstanding principal amount of the relevant Notes, as selected by a reputable financial institution selected by the Issuer (the "Reference Dealer"), named in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement).
The Quotation Date for quoting the applicable yield of the Reference Bond will be the third day (other than a Saturday or Sunday) on which banks and foreign exchange markets are open for business generally in London preceding the Optional Redemption Date.
For the purpose of Condition 9.4 (Redemption at the Option of the Noteholders (Investor Put)), each Fixed Rate Note and Floating Rate Note will be redeemed at par together with interest unpaid and accrued to (but excluding) the relevant Optional Redemption Date.
Each Zero Coupon Note will be redeemed at the Amortised Face Amount pursuant to Condition 9.5.
The Issuer may at any time purchase Notes (provided that, in the case of definitive Bearer Notes, all unmatured Coupons and Talons appertaining thereto are purchased therewith) at any price in the open market or otherwise subject to the applicable laws and/or regulations. All Notes so purchased may be held and resold in accordance with Articles L.213-1-A and D.213-1-A of the French Code monétaire et financier for the purpose of enhancing the liquidity of the Notes, or cancelled.
All Notes which are redeemed or purchased for cancellation by or on behalf of the Issuer will forthwith be cancelled (together with all unmatured Coupons and Talons attached thereto or surrendered therewith at the time of redemption). All Notes so cancelled or, where applicable, transferred or surrendered for cancellation (together with all unmatured Coupons and Talons cancelled, transferred or surrendered therewith) shall be forwarded to the Agent and cannot be reissued or resold.
If the amount payable in respect of any Zero Coupon Note upon redemption of such Zero Coupon Note pursuant to Condition 9.1, 9.2, 9.3 or 9.4 above or upon its becoming due and repayable as provided in Condition 13 (Events of Default) is improperly withheld or refused, the amount due and repayable in respect of such Zero Coupon Note shall be the amount calculated as provided in Condition 9.5(ii) above as though the references therein to the date fixed for the redemption or the date upon which such Zero Coupon Note becomes due and payable were replaced by references to the date which is the earlier of:
If at any time while any Note remains outstanding there occurs (i) a Change of Control and within the Change of Control Period (if, at the start of the Change of Control Period the Notes are rated by any Rating Agency) a Rating Downgrade in respect of that Change of Control occurs; or (ii) a Change of Control (if at such time the Notes are not rated) (in either case, a "Put Event"), the holder of each Note will have the option (the "Put Option") (unless, prior to the giving of the Put Event Notice (as defined below), the Issuer gives notice of its intention to redeem the Notes under Condition 9.2 (Redemption and Purchase – Redemption for Tax Reasons)) to require the Issuer to redeem or, at the Issuer's option, to purchase or procure the purchase of that Note on the Change of Control Redemption Date (as defined below) at par together with (or, where purchased, together with an amount equal to) accrued interest to but excluding the Change of Control Redemption Date. A "Change of Control" shall be deemed to have occurred at each time (whether or not approved by the Board of Directors of the Issuer) that any person or persons acting in concert or any person or persons acting on behalf of any such person(s) (the "Relevant Person(s)"), at any time directly or indirectly come(s) to own or acquire(s) (A) more than 50% of the voting rights normally exercisable at a general meeting of the Issuer; or (B) otherwise the ability to determine in fact through voting rights held (directly or indirectly) by such Relevant Person(s) the decisions taken at ordinary or extraordinary general meetings of the Issuer.
"Change of Control Period" means the period commencing on the date that is the earlier of (1) the date of the first public announcement of the relevant Change of Control and (2) the date of the earliest Potential Change of Control Announcement (if any) and ending on the date which is 180 days after the date of the first public announcement of the relevant Change of Control (the "Initial Longstop Date") provided that, unless any other Rating Agency has on or prior to the Initial Longstop Date effected a Rating Downgrade in respect of its rating of the Notes, if a Rating Agency publicly announces at any time on or after the date which is 60 days prior to the Initial Longstop Date up to and including the Initial Longstop Date that it has placed its rating of the Notes under consideration for rating review, the Change of Control Period shall be extended to the date which falls 60 days after the date of such public rating review consideration announcement;
"Rating Agency" means any of the following: (a) Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, Inc.; (b) Moody's Investor Services; (c) any other rating agency of equivalent international standing specified from time to time by the Issuer – and, in each case, their respective successors or affiliates.
A "Rating Downgrade" shall be deemed to have occurred in respect of a Change of Control if within the Change of Control Period the rating previously assigned to the Notes by any Rating Agency is (x) withdrawn or (y) changed from an investment grade rating (BBB-/Baa3, or their respective equivalents for the time being, or better) to a non-investment grade rating (BB=/Ba1, or their respective equivalents for the time being, or worse) or (z) if the rating previously assigned to the Notes by any Rating Agency was below an investment grade rating (as described above), lowered by at least one full rating notch (for example, from BB+ to BB or their respective equivalents), provided that a Rating Downgrade otherwise arising by virtue of a particular change in rating shall be deemed not to have occurred in respect of a particular Change of Control if the Rating Agency making the change in rating does not publicly announce or publicly confirm that the reduction was the result, in whole or part, of any event or circumstance comprised in or arising as a result of, or in respect of, the applicable Change of Control.
"Potential Change of Control Announcement" means that any public announcement or statement by the Issuer, any actual or potential bidder or any designated advisor thereto relating to any specific and near-term potential Change of Control (whereby "near-term" shall mean that such potential Change of Control is reasonably likely to occur, or is publicly stated by the Issuer, the actual or potential bidder or any such designated advisor to be intended to occur, within twelve months of the date of such announcement or statement).
Promptly upon the Issuer becoming aware that a Put Event has occurred, the Issuer shall give notice (a "Put Event Notice") to the Noteholders in accordance with Condition 17 (Notices) specifying the nature of the Put Event and the circumstances giving rise to it and the procedure for exercising the Put Option contained in this Condition 10.
To exercise the Put Option to require redemption or, as the case may be, purchase of a Note under this Condition 10, the holder of that Note must transfer or cause to be transferred by its Account Holder its Notes to be so redeemed or purchased to the account of the Agent specified in the Put Option Notice for the account of the Issuer within the period (the "Put Period") of 45 days after the Put Event Notice is given together with a duly signed and completed notice of exercise in the form (for the time being currently and in the form substantially set out in the Agency Agreement) obtainable from the specified office of any Paying Agent (a "Put Option Notice") and in which the holder shall specify a bank account to which payment is to be made under this Condition 10.
The Issuer shall redeem or at the option of the Issuer purchase or procure the purchase of the Notes in respect of which the Put Option has been validly exercised as provided above, and subject to the transfer of such Notes to the account of the Paying Agent for the account of the Issuer as described above on the date which is the fifth Business Day following the end of the Put Period (the "Change of Control Redemption Date"). The provisions of the second paragraph of Condition 8.1 (Payments – Method of Payment) shall apply, mutatis mutandis, to such payments.
For the avoidance of doubt, the Issuer shall have no responsibility for any costs or loss of whatever kind (including breakage costs) which the Noteholder may incur as a result of or in connection with its exercise, or purported exercise, of, or otherwise in connection with, any Put Option – whether upon the occasion of any purchase or redemption arising therefrom or otherwise.
(a) All payments in respect of the Notes and any related Coupons shall be made free and clear of, and without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges imposed or levied by or on behalf of the Republic of France, or any authority therein or thereof, having the power to tax, unless the withholding or deduction of such taxes is required by law.
As used herein, the Relevant Date means the date on which such payment first becomes due, except that, if the full amount of the moneys payable has not been duly received by the Agent or the Registrar, as the case may be, on or prior to such due date, it means the date on which, the full amount of such moneys having been so received, notice to that effect is duly given to the Noteholders in accordance with Condition 17 (Notices).
The Notes (whether in bearer or registered form) and Coupons will become void unless presented for payment within a period of 10 years (in the case of principal) and five years (in the case of interest) after the Relevant Date (as defined in Condition 11 (Taxation)) therefor.
There shall not be included in any Coupon sheet issued on exchange of a Talon any Coupon the claim for payment in respect of which would be void pursuant to this Condition 12 or Condition 8.2 (Payments – Presentation of Definitive Bearer Notes and Coupons) or any Talon which would be void pursuant to Condition 8.2 (Payments – Presentation of Definitive Bearer Notes and Coupons).
An Event of Default with respect to any Note shall mean any one or more of the following:
(iv) if the Issuer or any Principal Subsidiary defaults in the payment, when and as the same shall become due and payable, of the principal or interest on any of its obligations, or in making any payment due under any guarantee and/or indemnity given by it in relation to obligations, in each case, in respect of borrowed monies where the amount of the default, individually or aggregated with defaults then outstanding, is in excess of €50 million (or its equivalent in any other currency or composite currency) if such default shall continue for more than the period of grace, if any, applicable thereto or if any such obligations in respect of borrowed monies of or assumed by the Issuer or such Principal Subsidiary (and of like amount) shall have become repayable before the due date thereof as a result of acceleration of maturity by reason of the occurrence of an event of default thereunder; or
(v) if the Issuer or any Principal Subsidiary (i) shall commence any case or proceeding seeking to have an order for relief entered on its behalf as debtor in a bankruptcy, insolvency, reorganisation, liquidation, dissolution, arrangement, composition, readjustment of debt or similar proceeding or to adjudicate it as bankrupt or insolvent or seeking reorganisation, liquidation, dissolution, winding up, arrangement, composition or readjustment of its debts or any other relief under any bankruptcy, insolvency, reorganisation, liquidation, dissolution, arrangement, composition, readjustment of debt or other similar act or law of any jurisdiction, domestic or foreign, now or hereafter existing; or (ii) shall apply for a receiver, custodian or trustee of it or for all or a substantial part of its property; or (iii) shall make a general assignment for the benefit of creditors; or (iv) shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (v) shall take any corporate action in furtherance of any of the foregoing; or
As used above, the following terms shall have the following meanings:
(iv) "Net Sales" of any Subsidiary, as determined at any time, means that amount set forth in the financial statements for such Subsidiary as "Net Sales" for the period corresponding to the period to which the most recent audited consolidated financial statements of the Issuer and its Consolidated Subsidiaries relate.
If an Event of Default with respect to a Note shall have occurred and be continuing, then the Holder of such Note may exercise any right, power or remedy permitted to it by law, and shall have, in particular, without limiting the generality of the foregoing, the right to declare the entire principal of (including premium, if any), and all interest accrued, if any, on such Note to be, and such Note shall thereupon become, forthwith due and payable, without any presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived.
Should any Note, Coupon or Talon be lost, stolen, mutilated, defaced or destroyed, it may be replaced at the specified office of the Agent (in the case of Bearer Notes or Coupons) or the Registrar (in the case of Registered Notes) upon payment by the claimant of such costs and expenses as may be incurred in connection therewith and on such terms as to evidence and indemnity as the Issuer may reasonably require. Mutilated or defaced Notes, Coupons or Talons must be surrendered before replacements will be issued.
The names of the initial Agents and their initial specified offices are set out below.
The Issuer is entitled to vary or terminate the appointment of any Agent and/or appoint additional or other Agents and/or approve any change in the specified office through which any Agent acts, provided that;
In addition, the Issuer shall forthwith appoint a Paying Agent having a specified office in New York City in the circumstances described in Condition 8.5 (Payments – General Provisions Applicable to Payments). Any variation, termination, appointment or change shall only take effect (other than in the case of insolvency, when it shall be of immediate effect) after not less than 30 nor more than 45 days' prior notice thereof shall have been given to the Noteholders in accordance with Condition 17 (Notices).
In acting under the Agency Agreement, the Paying Agents act solely as agents of the Issuer and do not assume any obligation to, or relationship of agency or trust with, any Noteholders or Couponholders. The Agency Agreement contains provisions permitting any entity into which any Paying Agent is merged or converted or with which it is consolidated or to which it transfers all or substantially all of its assets to become the successor paying agent.
On and after the Interest Payment Date on which the final Coupon comprised in any Coupon sheet matures, the Talon (if any) forming part of such Coupon sheet may be surrendered at the specified office of the Agent or any other Paying Agent in exchange for a further Coupon sheet including (if such further Coupon sheet does not include Coupons to (and including) the final date for the payment of interest due in respect of the Note to which it appertains) a further Talon, subject to the provisions of Condition 12 (Prescription).
All notices regarding the Bearer Notes will be deemed to be validly given if published in a leading English language daily newspaper of general circulation in London. It is expected that such publication will be made in the Financial Times in London. The Issuer shall also ensure that notices are duly published in a manner which complies with the rules of any stock exchange or other relevant authority on which the Bearer Notes are for the time being listed or by which they have been admitted to trading. Any such notice will be deemed to have been given on the date of the first publication or, where required to be published in more than one newspaper, on the date of the first publication in all required newspapers.
All notices regarding the Registered Notes will be deemed to be validly given if sent by first class mail or (if posted to an address overseas) by airmail to the holders (or the first named of joint holders) at their respective addresses recorded in the Register and will be deemed to have been given on the fourth day after mailing and, in addition, for so long as any Registered Notes are listed on a stock exchange and the rules of that stock exchange (or any other relevant authority) so require, such notice will be published in a daily newspaper of general circulation in the place or places required by those rules.
Until such time as any definitive Notes are issued, there may, so long as any Global Notes representing the Notes are held in their entirety on behalf of Euroclear and/or Clearstream, Luxembourg, and/or DTC be substituted for such publication in such newspaper(s) the delivery of the relevant notice to Euroclear and/or Clearstream, Luxembourg and/or DTC for communication by them to the holders of the Notes and, in addition, for so long as any Notes are listed on a stock exchange or are admitted to trading by another relevant authority and the rules of that stock exchange or relevant authority so require, such notice will be published in a daily newspaper of general circulation in the place or places required by those rules. Any such notice shall be deemed to have been given to the holders of the Notes on the second day after the day on which the said notice was given to Euroclear and/or Clearstream, Luxembourg and/or DTC.
Notices to be given by any Noteholder shall be in writing and given by lodging the same, together (in the case of any Note in definitive form) with the relative Note or Notes, with the Agent (in the case of Bearer Notes) or the Registrar (in the case of Registered Notes). Whilst any of the Notes are represented by a Global Note, such notice may be given by any holder of a Note to the Agent or the Registrar through Euroclear and/or Clearstream, Luxembourg and/or DTC, as the case may be, in such manner as the Agent, the Registrar and Euroclear and/or Clearstream, Luxembourg, and/or DTC as the case may be, may approve for this purpose.
As the Notes are being issued outside of the Republic of France within the meaning of Article L.228-90 of the French Code de commerce, the provisions of the French Code de commerce relating to the masse will not apply to the Holders of the Notes.
The Agency Agreement contains provisions for convening meetings of the Noteholders to consider any matter affecting their interests, including the sanctioning by the Noteholders' extraordinary resolution of a modification of the Notes, the Coupons or any of the provisions of the Agency Agreement. Such a meeting may be convened by the Issuer and shall be convened by the Issuer if required in writing by Noteholders holding not less than 25% in nominal amount of the Notes for the time being remaining outstanding. The quorum at any such meeting for passing an extraordinary resolution of the Noteholders is one or more persons holding or representing not less than 50% in nominal amount of the Notes for the time being outstanding, or at any adjourned meeting one or more persons being or representing Noteholders whatever the nominal amount of the Notes so held or represented, except that at any meeting the business of which includes the modification of certain provisions of the Notes or the Coupons (including modifying the date of maturity of the Notes or any date for payment of interest thereon, reducing or cancelling the amount of principal or the rate of interest payable in respect of the Notes or altering the currency of payment of the Notes or the Coupons), the quorum shall be one or more persons holding or representing not less than two-thirds in nominal amount of the Notes for the time being outstanding, or at any adjourned such meeting one or more persons holding or representing not less than one-third in nominal amount of the Notes for the time being outstanding. An extraordinary resolution passed at any meeting of the Noteholders shall be binding on all the Noteholders, whether or not they are present at the meeting, and on all Couponholders.
The Agent and the Issuer may agree, without the consent of the Noteholders or Couponholders, to:
Any such modification shall be binding on the Noteholders and the Couponholders and any such modification shall be notified to the Noteholders in accordance with Condition 17 (Notices) as soon as practicable thereafter.
The Issuer shall be at liberty from time to time without the consent of the Noteholders or the Couponholders to create and issue further notes having terms and conditions the same as the Notes or the same in all respects save for the issue date, and amount and date of the first payment of interest thereon and so that the same shall be consolidated and form a single Series with the outstanding Notes; provided that any further notes consisting of Registered Notes shall be issued under a separate CUSIP, ISIN or CINS unless the further notes are issued pursuant to a "qualified reopening" of the original series, are otherwise treated as part of the same "issue" of debt instruments as the original series or are issued with no more than a de minimis amount of original discount, in each case for U.S. federal income tax purposes. For the purpose of French law, such further notes shall be assimilated ("assimilables") to the Notes as regards their financial service.
No person shall have any right to enforce any term or condition of the Notes under the Contracts (Rights of Third Parties) Act 1999, but this does not affect any right or remedy of any person which exists or is available apart from that Act.
The Agency Agreement, the Deed of Covenant, the Deed Poll, the Notes and the Coupons and any non-contractual obligation arising out of or in connection with the Agency Agreement, the Deed of Covenant, the Deed Poll, the Notes and the Coupons are governed by, and shall be construed in accordance with, English law.
The Issuer, the Noteholders and the Couponholders irrevocably agree for their mutual benefit that the courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with the Notes and/or the Coupons and that accordingly any suit, action or proceedings (together referred to as "Proceedings") arising out of or in connection with this Agreement shall be brought in such courts.
The Issuer, the Noteholders and the Couponholders waive any objection to the courts of England on the grounds that they are an inconvenient or inappropriate forum.
The Issuer appoints Saint-Gobain Limited at its registered office at Saint-Gobain House, Binley Business Park, Coventry, CV3 2TT as its agent for service of process, and undertakes that, in the event of Saint-Gobain Limited ceasing so to act or ceasing to be registered in England, it will appoint another person as its agent for service of process in England in respect of any Proceedings. Nothing herein shall affect the right to serve proceedings in any other manner permitted by law.
The Issuer hereby irrevocably and unconditionally waives with respect to the Notes and the Coupons any right to claim sovereign or other immunity from jurisdiction or execution and any similar defence and irrevocably and unconditionally consents to the giving of any relief or the issue of any process, including without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment made or given in connection with any Proceedings.
The Issuer has in the Agency Agreement, the Deed of Covenant and the Deed Poll submitted to the jurisdiction of the English courts and appointed an agent for service of process in terms substantially similar to those set out above.
The Notes of each Series will be either in bearer form, with or without interest coupons attached, or in registered form, without interest coupons attached. Bearer Notes will be sold by Dealers outside the United States in reliance on Regulation S under the Securities Act ("Regulation S") and Registered Notes will be sold by Dealers both outside the United States in reliance on the exemption from registration provided by Regulation S and within the United States in reliance on Rule 144A or another exemption under the Securities Act, for offers and sales that do not involve a public offering.
Each Tranche of Bearer Notes will be in bearer form and will be initially issued in the form of a temporary bearer global note (a "Temporary Bearer Global Note") or, if so specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement), a permanent Global Note (a "Permanent Bearer Global Note" and, together with the Temporary Bearer Global Note, the "Bearer Global Notes").
If the Bearer Global Notes are stated in the applicable Final Terms to be issued in new global note ("NGN") form, the Global Notes will be delivered on or prior to the original issue date of the Tranche to a common safekeeper (the "Common Safekeeper") for Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream, Luxembourg"). Global Notes which are not issued in NGN form ("Classic Global Notes" or "CGNs") will be delivered on or prior to the original issue date of the Tranche to a common depositary (the "Common Depositary") for Euroclear and Clearstream, Luxembourg.
Where the Bearer Global Notes issued in respect of any Tranche are in NGN form, the relevant clearing system(s) will be notified whether or not such Bearer Global Notes are intended to be held in a manner which would allow Eurosystem eligibility. Any indication that the Bearer Global Notes are to be so held does not necessarily mean that the Notes of the relevant Tranche will be recognised as eligible collateral for Eurosystem monetary policy and intra-day operations by the Eurosystem either upon issue or at any times during their life as such recognition depends on the satisfaction of the Eurosystem eligiblity criteria. The Common Safekeeper for NGNs will either be Euroclear or Clearstream, Luxembourg or another entity approved by Euroclear and Clearstream, Luxembourg.
If the Bearer Global Note is a NGN, the principal amount of the Notes shall be the aggregate amount from time to time entered in the records of Euroclear or Clearstream, Luxembourg. The records of such clearing system shall be conclusive evidence of the principal amount of Notes represented by the Bearer Global Note and a statement issued by such clearing system at any time shall be conclusive evidence of the records of the relevant clearing system at that time.
Whilst any Note is represented by a Temporary Bearer Global Note, payments of principal, interest (if any) and any other amount payable in respect of the Notes due prior to the Exchange Date (as defined below) will be made against presentation of the Temporary Bearer Global Note (if the Temporary Bearer Global Note is not intended to be issued in NGN form) only to the extent that certification (in a form to be provided) to the effect that the beneficial owners of interests in such Note are not U.S. persons or persons who have purchased for resale to any U.S. person, as required by U.S. Treasury regulations, has been received by Euroclear and/or Clearstream, Luxembourg and Euroclear and/or Clearstream, Luxembourg, as applicable, has given a like certification (based on the certifications it has received) to the Agent.
On and after the date (the Exchange Date) which is 40 days after a Temporary Bearer Global Note is issued, interests in such Temporary Bearer Global Note will be exchangeable (free of charge) upon a request as described therein either for (a) interests in a Permanent Global Note of the same Series or (b) for definitive Bearer Notes of the same Series with, where applicable, interest coupons and talons attached (as indicated in the applicable Final Terms and subject, in the case of definitive Notes, to such notice period as is specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement)), in each case against certification of beneficial ownership as described above unless such certification has already been given, provided that purchasers in the United States and certain other United States persons will not be able to receive definitive Bearer Notes. The holder of a Temporary Bearer Global Note will not be entitled to collect any payment of interest, principal or other amount due on or after the Exchange Date unless, upon due certification, exchange of the Temporary Bearer Global Note for an interest in a Permanent Bearer Global Note or for definitive Bearer Notes is improperly withheld or refused.
The applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) will specify that a Permanent Bearer Global Note will be exchangeable (free of charge), in whole but not in part, for definitive Notes with, where applicable, interest coupons and talons attached only upon the occurrence of an Exchange Event. For these purposes, "Exchange Event" means that (i) an Event of Default (as defined in Condition 13 (Events of Default)) has occurred and is continuing, or (ii) the Issuer has been notified that both Euroclear and Clearstream, Luxembourg have been closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or have announced an intention permanently to cease business or have in fact done so and no successor clearing system is available, or (iii) the Issuer has or will become subject to adverse tax consequences which would not be suffered were the Notes represented by this global Note in definitive form. The Issuer will promptly give notice to Noteholders in accordance with Condition 17 (Notices) if an Exchange Event occurs. In the event of the occurrence of an Exchange Event, Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of an interest in such Permanent Bearer Global Note) may give notice to the Agent requesting exchange. Any such exchange shall occur not later than 45 days after the date of receipt of the first relevant notice by the Agent.
Notes which are represented by a Global Note will only be transferable in accordance with the rules and procedures for the time being of Euroclear or Clearstream, Luxembourg, as the case may be.
Payments of principal, interest (if any) or any other amounts on a Permanent Bearer Global Note will be made through Euroclear and/or Clearstream, Luxembourg against presentation or surrender (as the case may be) of the Permanent Bearer Global Note (if the Permanent Bearer Global Note is not intended to be issued in NGN form) without any requirement for certification.
The Registered Notes of each Tranche offered and sold in reliance on Regulation S, which will be sold to non-U.S. persons outside the United States, will initially be represented by a global note in registered form (a "Regulation S Global Note"). Prior to expiry of the distribution compliance period (as defined in Regulation S) applicable to each Tranche of Notes, beneficial interests in a Regulation S Global Note may not be offered or sold to, or for the account or benefit of, a U.S. person save as otherwise provided in Condition 2 (Transfers of Registered Notes) and may not be held otherwise than through Euroclear or Clearstream, Luxembourg and such Regulation S Global Note will bear a legend regarding such restrictions on transfer.
The Registered Notes of each Tranche may only be offered and sold in the United States or to U.S. persons in private transactions (i) to "qualified institutional buyers" within the meaning of Rule 144A under the Securities Act ("QIBs") or (ii) to "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that are institutions ("Institutional Accredited Investors") who agree to purchase the Notes for their own account and not with a view to the distribution thereof. The Registered Notes of each Tranche sold to QIBs and Institutional Accredited Investors will be represented by a global note in registered form (a "Rule 144A Global Note" and, together with a Regulation S Global Note, the "Registered Global Notes")
Registered Global Notes will either (i) be deposited with a custodian for, and registered in the name of a nominee of, DTC for the accounts of its participants (including, Euroclear and Clearstream, Luxembourg, if relevant) or (ii) be deposited with a common depositary or (iii) if the Registered Global Notes are to be held under the new safekeeping structure (the "NSS"), be delivered to a common safekeeper for Euroclear and Clearstream, Luxembourg, and registered in the name of the nominee for the common depositary of, Euroclear and Clearstream, Luxembourg or in the name of a nominee of the common safekeeper, as specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement). Persons holding beneficial interests in Registered Global Notes will be entitled or required, as the case may be, under the circumstances described below, to receive physical delivery of definitive Notes in fully registered form.
Payments of principal, interest and any other amount in respect of the Registered Global Notes will, in the absence of provision to the contrary, be made to the person shown on the Register (as defined in Condition 8.4 (Payments – Payments in Respect of Registered Notes)) as the registered holder of the Registered Global Notes. None of the Issuer, any Paying Agent or the Registrar will have any responsibility or liability for any aspect of the records relating to or payments or deliveries made on account of beneficial ownership interests in the Registered Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
Where the Registered Global Notes issued in respect of any Tranche are intended to be held under the NSS, the applicable Final Terms will indicate whether or not such Registered Global Notes are intended to be held in a manner which would allow Eurosystem eligibility. Any indication that the Registered Global Notes are to be so held does not necessarily mean that the Notes of the relevant Tranche will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem either upon issue or at any time during their life as such recognition depends upon satisfaction of the Eurosystem eligibility criteria. The common safekeeper for a Registered Global Note held under the NSS will either be Euroclear or Clearstream, Luxembourg or another entity approved by Euroclear and Clearstream, Luxembourg.
Payments of principal, interest or any other amount in respect of the Registered Notes in definitive form will, in the absence of provision to the contrary, be made to the persons shown on the Register on the relevant Record Date (as defined in Condition 8.4 (Payments – Payments in Respect of Registered Notes)) immediately preceding the due date for payment in the manner provided in that Condition.
Interests in a Registered Global Note will be exchangeable (free of charge), in whole but not in part, for definitive Registered Notes without interest coupons or talons attached only upon the occurrence of an Exchange Event. For these purposes, Exchange Event means that (i) an Event of Default has occurred and is continuing, (ii) in the case of Notes registered in the name of a nominee for DTC, either DTC has notified the Issuer that it is unwilling or unable to continue to act as depository for the Notes and no alternative clearing system is available or DTC has ceased to constitute a clearing agency registered under the Exchange Act, (iii) in the case of Notes registered in the name of a nominee for a common depositary or common safekeeper for Euroclear and Clearstream, Luxembourg, the Issuer has been notified that both Euroclear and Clearstream, Luxembourg have been closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or have announced an intention permanently to cease business or have in fact done so and, in any such case, no successor clearing system is available or (iv) the Issuer has or will become subject to adverse tax consequences which would not be suffered were the Notes represented by the Registered Global Note in definitive form. The Issuer will promptly give notice to Noteholders in accordance with Condition 17 (Notices) if an Exchange Event occurs. In the event of the occurrence of an Exchange Event, DTC, Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of an interest in such Registered Global Note) may give notice to the Registrar requesting exchange and, in the event of the occurrence of an Exchange Event as described in (iv) above, the Issuer may also give notice to the Registrar requesting exchange. Any such exchange shall occur not later than 10 days after the date of receipt of the first relevant notice by the Registrar.
Interests in a Registered Global Note may, subject to compliance with all applicable restrictions, be transferred to a person who wishes to hold such interest in another Registered Global Note or in the form of a Definitive IAI Registered Note and Definitive IAI Registered Notes may, subject to compliance with all applicable restrictions, be transferred to a person who wishes to hold such Notes in the form of an interest in a Registered Global Note. No beneficial owner of an interest in a Registered Global Note will be able to transfer such interest, except in accordance with the applicable procedures of DTC, Euroclear and Clearstream, Luxembourg, in each case to the extent applicable. Registered Notes are also subject to the restrictions on transfer set forth therein and will bear a legend regarding such restrictions, see "Subscription and Sale and Transfer and Selling Restrictions".
Payments of principal, interest (if any) or any other amounts on a Registered Global Note will be made through DTC, Euroclear and/or Clearstream, Luxembourg, following which payment will be made to the registered holder.
Pursuant to the Agency Agreement (as defined under "Terms and Conditions of the Notes"), the Agent shall arrange that, where a further Tranche of Notes is issued which is intended to form a single Series with an existing Tranche of Notes, the Notes of such further Tranche shall be assigned a common code and ISIN and, where applicable, a CUSIP and CINS number which are different from the common code, ISIN, CUSIP and CINS assigned to Notes of any other Tranche of the same Series until at least the expiry of the distribution compliance period (as defined in Regulation S under the Securities Act) applicable to the Notes of such Tranche; provided that any further Tranche of Notes shall be issued under a separate CUSIP, ISIN or CINS unless the further Tranche of Notes are issued pursuant to a "qualified reopening" of the original series, are otherwise treated as part of the same "issue" of debt instruments as the original series or are issued with no more than a de minimis amount of original discount, in each case for U.S. federal income tax purposes.
For so long as any of the Notes is represented by a Global Note held on behalf of Euroclear and/or Clearstream, Luxembourg each person (other than Euroclear or Clearstream, Luxembourg) who is for the time being shown in the records of Euroclear or of Clearstream, Luxembourg as the holder of a particular nominal amount of such Notes (in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the nominal amount of such Notes standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest error) shall be treated by the Issuer and its agents as the holder of such nominal amount of such Notes for all purposes other than with respect to the payment of principal or interest on such nominal amount of such Notes, for which purpose the bearer of the relevant Bearer Global Note or the registered holder of the relevant Registered Global Note shall be treated by the Issuer and its agents as the holder of such nominal amount of such Notes in accordance with and subject to the terms of the relevant Global Note and the expressions "Noteholder" and "holder of Notes" and related expressions shall be construed accordingly.
So long as DTC or its nominee is the registered owner or holder of a Registered Global Note, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by such Registered Global Note for all purposes under the Agency Agreement and such Notes except to the extent that in accordance with DTC's published rules and procedures any ownership rights may be exercised by its participants or beneficial owners through participants.
Any reference herein to Euroclear and/or Clearstream, Luxembourg and/or DTC shall, whenever the context so permits, be deemed to include a reference to any additional or alternative clearing system specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement).
A Note may be accelerated by the holder thereof in certain circumstances described in Condition 13 (Events of Default). In such circumstances, where any Note is still represented by a Global Note and the Global Note (or any part thereof) has become due and repayable in accordance with the Conditions and payment in full of the amount due has not been made in accordance with the provisions of the Global Note then the Global Note will become void at 8.00 p.m. (London time) on such day. Holders of interests in such Global Note credited to their accounts with Euroclear and/or Clearstream, Luxembourg, and/or DTC as the case may be, will become entitled to proceed directly against the Issuer on the basis of statements of account provided by Euroclear, Clearstream, Luxembourg and/or DTC as the case may be, on and subject to the terms of a deed of covenant (the "Deed of Covenant") dated 17 July 2015 and executed by the Issuer. In addition, holders of interests in such Global Note credited to their accounts with DTC may require DTC to deliver Definitive Notes in registered form in exchange for their interest in such Global Note in accordance with DTC's standard operating procedures.
The net proceeds from each issue of Notes will be applied by the Issuer for its general corporate purposes.
Saint-Gobain was incorporated on 17 May 1907 under the laws of the Republic of France and is the parent company of the Saint-Gobain group of companies. Saint-Gobain is a French société anonyme governed by Articles L. 210-1 et seq, of the French Commercial Code, with its head office at Les Miroirs, 18, avenue d'Alsace, 92400 Courbevoie, France (telephone number: +33(0)1 47 62 30 00). It is registered with the Nanterre Trade and Companies Registry under no. 542 039 532 (activity code APE 741J), Siret number 54203953200040.
Saint-Gobain is listed on Euronext Paris and maintains a listing on other principal European stock exchanges, including the London Stock Exchange.
The Group is a global manufacturer of engineered materials with a high technological content and a provider of associated services. In the year to 31 December 2017, it had consolidated net sales of €40.8 billion, which placed it among the largest French industrial groups. The Group has significant international operations.
The financial year of the Issuer is from 1 January to 31 December. The Issuer's legal term will expire on 31 December 2040, unless the Issuer is dissolved prior to that date or an extension is obtained.
The Group has 350 years of experience in manufacturing. Its operations are organised into three sectors:
The Group is now to a significant extent focused on construction products and building distribution, which for 2017 represented over three quarters of the Group's total net sales.
| Year ended 31 December | ||||
|---|---|---|---|---|
| 2017 | 2016 | |||
| Operating | Operating | |||
| Net Sales | Income | Net Sales | Income | |
| (%) | ||||
| Innovative Materials Sector | 25 | 42 | 25 | 39 |
| Construction Products Sector | 31 | 38 | 30 | 39 |
| Building Distribution Sector | 46 | 21 | 47 | 22 |
| Other1 | (2) | (1) | (2) | 0 |
| Total | 100 | 100 | 100 | 100 |
| Total in € millions | 40,810 | 3,028 | 39,093 | 2,818 |
1 "Other" corresponds to the elimination of holding company transactions.
___________
In line with its search for new growth in promising segments, the Group is continuing to expand in emerging economies where the habitat and construction markets offer substantial growth potential due to the rapid pace of urban development and exponentially rising infrastructure needs.
Percentage of Consolidated Net Sales by Geographical Market1
| Year ended 31 December | ||
|---|---|---|
| 2017 | 2016 | |
| Market | (%) | |
| France | 26 | 26 |
| Other western European countries | 43 | 44 |
| North America | 13 | 13 |
| Emerging countries and Asia | 22 | 21 |
| Internal Sales | (5) | (5) |
| Total | 100 | 100 |
Flat Glass combines the production and marketing of flat glass, and the processing and distribution of glass solutions for the building market, the automotive industry and transport. These solutions address the challenges of energy savings, aesthetics, comfort, ergonomics and safety and plan ahead for changes in regulatory obligations. Flat Glass develops products and services to suit local characteristics and uses the new opportunities afforded by digital to enhance its services to customers.
1 Source: the information has been extracted without material adjustment from the Financial Statements 2017.
2 Unless otherwise indicated, numbers state the data as of 31 December 2017.
interior decoration markets and to protect assets and people. With a strong manufacturing base incorporating recent carbon footprint-limiting technologies, and a distribution network with unrivalled coverage, Saint-Gobain aspires to be the partner of choice for its customers: installers, processors, manufacturers, distributors and architects.
The Group responds to the needs of its European key accounts with a dedicated structure and sales force for each market segment. Additionally, it caters to the expectations of its installer clients as closely as possible through its own Glassolutions network of 200 processing and distribution sites in Europe.
Saint-Gobain's glass solutions help to improve building energy efficiency and user comfort: thermal insulation, solar control, light transmission (with the new ECLAZ glazing in particular), interior solutions and decoration (kitchen worktops and colored splashbacks, shower screens with anti-corrosion treatment, etc.), and bulletproof and fireproof glass (through its VETROTECH brand). Saint-Gobain also offers a wide range of active glazing such as PRIVA-LITE, which turns opaque on demand when switched on, and the variable-tint SageGlass® solutions, provided mainly for façade projects. Lastly, it provides specialist products for household appliances (EuroKera, a joint venture with Corning, is a world co-leader in glass-ceramic cooking surfaces) and for commercial refrigeration.
Saint-Gobain Sekurit manufactures and produces windshields, side windows, rear windows, glass sun roofs and pre-assembled modules for major global automotive manufacturers. This glazing ensures everyday comfort for motorists and responds to the changes in mobility in terms of practices and regulations, particularly in the area of the environment. Saint-Gobain is also active in the transportation market, producing glass for the aerospace and railroad sectors, shipping, industrial vehicles and armoured vehicles.
Finally, Saint-Gobain Autover distributes replacement automotive glass in the independent market and, under its Glassdrive brand, has a network of repair and replacement facilities.
Saint-Gobain Sekurit offers global coverage for its activities, to meet the needs of users and automobile manufacturers. In addition, a regional organizational structure also provides more local coordination and services in response to local specifics.
In March 2018, Saint-Gobain acquired Italian company Logli Massimo, the specialist in glass systems and accessories for the fixing and assembly of glass panels, in particular for railings, shower doors, partition walls and interior and exterior doors. See "Recent Developments— Recent Developments after the annual 2017 results—Other Recent Developments."
In April 2018, Saint-Gobain also announced that it had taken a 50% stake in a flat glass production line of the Chinese group JJG, located in Zibo in the Shandong province, North-East China, with a total annual capacity of 160,000 tons. See "Recent Developments—Recent Developments after the annual 2017 results—Other Recent Developments."
In 2017, the net sales in the Flat Glass division totalled €5.7 billion, an increase of 5.7% compared with 2016. Nippon Sheet Glass, Asahi, Guardian and Şişecam, as well as various Chinese glass manufacturers, are the Group's principal competitors in Flat Glass.
High-Performance Materials (HPM) provides value-added solutions for a wide range of hightech applications in transport, health, construction and industry. It is developing considerable expertise in a range of technologies, giving it the ability to design solutions tailored to its customers' specific needs.
The HPM Sector is underpinned by strong materials science, formulation and design capabilities in ceramics, performance polymers and glass fibre. It has expertise in multiple state-of-the-art applications that make use of the specific properties of its materials (high temperature resistance, abrasion, chemical stability, surface properties, etc.).
Many of the sector's products are developed jointly with customers to cater for specific customer needs, particularly in plastic products, highly sophisticated refractory products for the metalworking and glass manufacturing industries, and crystals for radiation detection systems.
In order to be closer to its markets, the sector maintains a large sales force that is supported, in the largest countries, by logistics centres that allow it to provide quick and efficient service to customers.
The Ceramic Materials Activity consists of businesses involved in the synthesis and transformation of ceramics raw materials used in a wide variety of markets: abrasives, petroleum extraction, aerospace, defence, paper, etc., as well as refractory products for metallurgy and all glass-related technologies.
Our key competitors in the Ceramic Materials Activity are Imerys and Carbo Ceramics.
The Abrasives Activity offers complete solutions for each stage of the abrasion, cutting and polishing process. It serves a wide range of markets: construction and habitat (from rough cutting of concrete walls and floors to sanding of wooden floors and decorative finishes), heavy industry (steelworks, paper mills, and mineral extraction), and manufacturing and high-tech industries (automotive, aerospace, and electronics). Saint-Gobain leverages its expertise in ceramic grains and its in-depth knowledge of materials to design abrasives systems that are optimised for its customers' applications, as well as being safe and comfortable to use.
Our key competitors in the Abrasives Activity are 3M, Noritake and Tyrolit.
The Performance Plastics Activity has a wide technological expertise in high-performance polymer products that afford considerable scope for application in industry (automotive, aerospace, and health) and construction. It produces composite materials (specialty films, foams, tapes, specialty adhesives and coated fabrics for construction and industry), bearings and seals (particularly for the automotive and aerospace industries), and fluid systems (for healthcare, food and beverage, aerospace, electronics, etc.).
Our key competitors in the Performance Plastics Activity are 3M and Trelleborg.
Saint-Gobain Adfors manufactures technical glass fibre fabrics for the construction and industry markets. With a range of innovative solutions combined with strong customer commitment, it can cater for every kind of market need: grid systems for wall, floor and roadway reinforcement; glass fibre mat solutions to improve product technical performance; and ranges of wall coverings, joint tapes and insect screens.
In March 2018, Saint-Gobain acquired HyComp, a leading supplier of composite components made with proprietary carbon fibres and thermoplastic materials, used in high temperature and long life applications in the aerospace industry. See "Recent Developments—Recent Developments after the annual 2017 results—Other Recent Developments."
In April 2018, Saint-Gobain also acquired the pharmaceutical business of Micro Hydraulics, an Irish-based supplier and manufacturer of single-use fluid handling components and systems in high-performance plastics for high purity applications in the pharmaceutical and biopharmaceutical industries. See "Recent Developments—Recent Developments after the annual 2017 results—Other Recent Developments."
Our key competitors in the Saint-Gobain Adfors sector are Johns Manville, Phifer and Valmiera.
The Construction Products Sector designs and develops innovative solutions to improve the quality of living places and reduce the environmental impact of buildings, with unique product and service offerings for all construction fields, tailored to local conditions. These solutions are intended to improve building energy efficiency and user comfort.
The Construction Products Sector's aim is to become the reference in sustainable construction and drinking water supply solutions. It relies on its five constituent Activities, which provide systems and bespoke solutions for the interior and exterior home improvement markets.
The interior solutions product line encompasses three main product groups: plaster and plasterboard, acoustic and thermal insulation products, and ceiling solutions. These products and solutions are used in new building and renovation, contributing to everyday wellbeing in healthy, high-performance, comfortable buildings.
The Gypsum and Ceilings Activity extracts and processes gypsum into a wide array of plaster products for construction and decoration. These solutions are intended for use in partitions and facings for walls, ceilings and floors. They meet high technical specifications in terms of fire and damp resistance and thermal and acoustic insulation. Easy to install, the products also meet growing customer demand for a comfortable and visually pleasing home environment. The Gypsum and Ceilings Activity offers solutions that comply with the highest technological standards and promote their widespread adoption, and remain a step ahead of new regulations concerning, for example, the elimination of formaldehyde to improve interior air quality.
The Insulation Activity designs, develops and markets products, systems and solutions for thermal and acoustic building insulation as well as for industrial applications. Its line of products made from mineral wool (glass wool and stone wool), polystyrene foam, polyurethane and, most recently, wood fibre, caters for the needs of the residential and commercial building markets. Here, they are used to insulate the building envelope (roofs, walls and floors) in order to reduce energy consumption and improve comfort with insulation from noise pollution. Other needs are also addressed, such as heating and air conditioning system insulation. Finally, some products also afford technical solutions for industrial facilities, the transport sector and various niche industries.
Saint-Gobain and the Kuwait-based company Alghanim Industries who are already partners in insulation manufacturing joint-ventures in Turkey (Izocam) and Saudi Arabia (SIIMCO), have decided to extend their partnership to Kuwait: as of 11 January 2018, they have become jointventure partners in KIMMCO. See "Recent Developments—Recent Developments after the annual 2017 results—Other Recent Developments."
Saint-Gobain is also investing in a new blowing glass wool production line in its Isover plant of Chemillé, near Angers, France. This line, due to come on stream mid-2019, is designed to meet the rising demand of the French market for roof space thermal insulation solutions. Beyond the installation of this structuring equipment, two other dedicated lines, in Azuqueca near Madrid, Spain and Vidalengo close to Milan, Italy, will become operational in the spring and autumn of 2018 respectively. These new lines represent a total investment of €45m, mostly earmarked for Chemillé. See "Recent Developments—Recent Developments after the annual 2017 results—Other Recent Developments."
Saint-Gobain has announced the modernization and extension of its ISOVER plant's stone wool production line in Ploiesti, Romania, due to come on stream in the second half of 2019. See "Recent Developments—Recent Developments after the annual 2017 results—Other Recent Developments."
Our key competitors in Interior Solutions are Armstrong, BNBM, Boral, Johns Manville, Kingspan, Knauf, Owens Corning, Rockwool, Siniat, Technonicol and USG.
The Construction Products Sector provides a wide range of solutions for exterior improvement, combining performance and architectural improvement. These solutions help to guarantee the sustainable supply of drinking water, and the visual appeal and energy efficiency of buildings, roofs and exterior walls in both new building and renovation.
The Mortars Activity is the world leader in its field. It provides a wide range of solutions to protect, insulate and decorate the exterior walls of single-family dwellings and multi-unit housing, commercial and industrial buildings. Its special tiling solutions ensure safety and ease of use. In flooring, its solutions cover various fields of application: new and renovated subfloors, levelling and finishing prior to laying a floor, decoration with the use of selfcoloured mortars, technical solutions for areas of high footfall, and underfloor heating. A range of technical mortars is available, covering all areas of construction, to help in structural work or rework. The Activity also offers delivery of expanded clay. Lastly, a line of admixtures caters for the growing demand for improved technical properties in concrete for use in construction.
The Pipe Activity offers complete solutions leveraging drawing on more than 160 years of experience in the water supply market to meet the highest expectations. It produces and markets ductile cast iron pipe systems for drinking water and sewage systems, steel products for highways and roadways, and wastewater and rainwater drainage systems for buildings. It is also active in the mining, hydroelectric and manufacturing markets.
The Exterior Products Activity is active in the North American construction market with a complete range of products specifically for the North American construction market. For roofs, it offers premium asphalt and composite shingles in a wide range of styles and colours. For exterior walls, it provides solutions covering vinyl, polymer shake and insulated siding products in a multitude of materials (PVC, polypropylene, etc.). Easy to maintain, these products are known for combining visual appeal and durability. The Activity also offers complete exterior solutions for single-family and multi-family dwellings, with fencing, decking and railing products in PVC and composite materials.
Our key competitors in Exterior Solutions are Ardex, BASF, Duktus-VonRoll, Electrosteel, GAF, Jindal, Mapei, Owens Corning, Parex, Ply Gem, STO and XinXing.
The Building Distribution Sector aims to be the Reference for its customers and suppliers alike. To accomplish this, it has developed a network of strong and complementary brands, generalist, specialist and cross-channel, aimed at trade professionals, the private project owner, and small, medium and large businesses. Each brand is rooted in its local market, positioned so as to cater for the specific needs of that market. It relies on the dynamism, calibre and expertise of its teams.
The sector is building on the development of its cross-channel offer to drive profitable, sustainable growth for its brands, with the aim of providing the same level of service and satisfaction for every type of customer. The sector's strong logistics also mean that it can broaden its range of products and services and continue to improve product availability. It continues to invest in developing its information systems to enhance its internal efficiency and day-to-day productivity. These investments also contribute to improving the customer experience.
The Building Distribution Sector is constantly innovating to give its customers all the information they need. The brands are enhancing the product information available on their websites. New sites have been launched and new digital services have been made available, covering the entire customer journey, from initial inspiration to after-sales. In the United Kingdom, a Digital Hub has been created to provide customers with a "Connected Experience", while helping brands to develop their business using new digital tools. It brings together the expertise of specialists in data analysis, user experience and online advertising.
In traditional sales channels, communication is based on relationships and sales staff providing advice to customers. The sector's brands are enhancing this information via digital channels, with online catalogues, video demonstrations, customer testimonials, tutorials on fitting, etc. Showrooms, a source of inspiration for customers and traditionally located in sales outlets, are also becoming mobile, with the introduction of roaming display trucks.
The sector is continuing with the development of services to simplify its customers' journeys, improve their day-to-day efficiency and create productivity gains for them: online appointment bookings with a sales specialist, project simulators, advice from professionals on websites or social media, augmented reality tools, etc.
The brands are also developing the option for their customers to purchase products and services via their mobile applications, request construction waste management services, or select a delivery method.
In France, the sector provides an intermediation platform for that puts qualified building professionals and private project owners in touch with one another. Project owners can use it to select the most appropriate tradespeople for their project, while tradespeople can increase their visibility and develop their business.
The sector's increasingly innovative range of services was enhanced this year with the addition of new mobile applications for improving and smoothing the customer journey, even to the point of allowing fast-track payment in sales outlets. Adapting to modern technology and specific customer needs, the sector now includes drones in its product range and offers 3D printing technology as one of its services.
These multiple interactions provide the brands with an ever more detailed understanding of their customers, whose use of digital technology is increasing. As a result, the sector records nearly 100 million visits per year across all its websites. The data gathered are used to analyse customers' purchasing and browsing behaviour, and are used by the brands as a basis for new product and customised service offerings, via targeted emails, for example.
The sector's brands invest in training for their employees (for example, in the use of digital tools or how products are used) in order to improve their performance, thereby cultivating better support for their customers. They also contribute to increasing the level of professionalism in the building trade through training, with free morning information sessions on new standards and regulations, refresher training leading to qualifications, e-learning to supplement knowledge on energy retrofitting, and self-paced training using practical guides and books.
Many brands have introduced on- and offline tools for measuring customer satisfaction, via the Internet, by phone or directly in sales outlets. The results gathered day-to-day enable the brands to develop their product and service lines in real time.
The sector has introduced customised responses for every type of customer. Whether these responses relate to service needs or specific products, the brands develop new concepts and products or invest in new markets. The brands identify needs and take hold of growth levers to diversify their businesses. Thus, some of them provide their customers with specific products and services for roads (guardrails, light poles, etc.). They also supply solutions for the hydroelectric dam market, as well as materials specifically for the marine industry.
Other specialist brands are investing in the prefabricated market, such as bathroom, roofing and structural components.
In anticipation of the major social issue posed by population aging, the sector has a range of products and services devoted more broadly to accessibility for all in living places.
The sector is continuing with the development of shared spaces for several brands, as well as for the logistics centres throughout Europe. It offers a comprehensive, centralised product line to save customers time.
The sector has enhanced its product offering by developing private labels for the sanitarywareheating, structural work and tooling markets, including four on the international stage. They are positioned as reference brands in each of these product categories, and fulfil strict specifications which guarantee product quality and compliance. The Building Distribution sector also caters for the needs of customers with specific requirements in terms of efficiency and value for money.
The sector offers diverse logistics services, organizing the routing of materials to increasingly time-pressed, demanding customers in a more fluid, efficient and environmentally friendly way. For example, the Click & Collect system allows customers to collect materials from the nearest sales outlet at short notice.
By pooling their logistics centres, the brands can optimise their stock management and carefully control supply to the different sales outlets, for continuous improvement in terms of product availability. Automation of the centres also means that thousands of order lines can be processed every day, reducing delivery times to 24 hours, and even just 1 hour in certain major conurbations. The brands are also developing integrated logistics solutions, offering customers end-to-end logistics for a construction or renovation site, from delivery of materials to waste collection.
Overall, the ongoing objective of the Building Distribution Sector is to anticipate and respond to its customers' changing needs, with the aim of simplifying their journey and ensuring their satisfaction. As such, it provides them with increasingly innovative, high value-added products, services and concepts.
Our key competitors in the Building Distribution Sector are Ferguson, CRH, BayWa, Travis Perkins, SIG, Grafton, Ahlsell, Chasson Herige Samse, and Cordes & Graefe.
Research and Innovation are integral to Saint-Gobain's strategy and key to increasing the share of sales of high value-added products and solutions in the most buoyant sectors.
Differentiation is one of the critical drivers of this strategy which is expressed at all stages of the value chain, from innovation and design of Saint-Gobain's solutions in relation to its customers to the creation of tools and services. It specifically includes an ambitious approach to marketing aimed at better understanding, anticipating and formulating customer needs, supplemented by R&D developments directly involving these customers, to provide tailored solutions.
R&D also contributes to improving industrial manufacturing processes, with regard to competitiveness, capability and environmental performance.
R&D will continue its efforts in the next few years, in particular with regard to investments, to allow the Group to maintain and expand its leadership positions in its Activities and to maintain a high level of performance and operational excellence. In 2017, the Group invested €446 million in research and development, and 3,700 employees worked on nearly 900 research projects, resulting in applications for nearly 400 new patents.
There is continued recognition for Saint-Gobain's approach to innovation. For the seventh year running, Clarivate Analytics ranked Saint-Gobain among its Top 100 Global Innovators.
The discussion below reflects the situation as at 31 December 2017. Developments since that date are discussed under "Information about the Issuer—Recent Developments after the annual 2017 results."
Capital expenditure of the Group increased by 12.3% to €1,538 million during 2017 (compared to €1,370 million in 2016). In 2018, the Group will continue to pursue a capital expenditure programme of around €1.7 billion, with a focus on growth capex outside Western Europe and also on productivity and digital transformation, particularly in Building Distribution.
The Group continued to implement its strategic priorities in 2017, €290 million in cost savings, as part of the €1.2 billion cost reduction programme for 2017-2010. The Group completed 28 acquisitions of small and mid-sized companies for a total of €641 million and made disposals totalling €213 million, selling off Vemac in the Building Distribution Sector in Italy and Finglass in the Flat Glass Sector in Finland, as part of the portfolio optimization strategy targeting €2 billion in acquisitions for 2017-2010.
Saint-Gobain has two syndicated lines of credit that are intended to provide a secure source of financing for the Group (including as additional backing for its Negotiable European Commercial Paper (NEU CP), US Commercial Paper and Euro Commercial Paper programs):
Based on the Group's current credit rating for long-term debt issues, the two facilities are not subject to any hard covenants.
Neither of these two lines of credit had been drawn down at 31 December 2017.
On 30 September 2011, Saint-Gobain issued €1 billion worth of 3.50% notes due 2015 and €750 million worth of 4.50% notes due 2019 (the "2019 Bond"). On 18 and 19 January 2012, Saint-Gobain issued a further €200 million worth of notes in three tranches under the 2019 Bond. On 13 January 2012, Saint-Gobain issued JPY5 billion worth of 1.90% notes due 2017. On 28 March 2012, Saint-Gobain issued €750 million worth of 3.625% notes due 2022 (the "2022 Bond"). On 16 May 2012, Saint-Gobain issued a further €150 million worth of notes in two tranches under the 2022 Bond. On 4 June 2012, Saint-Gobain issued two 4.00% notes due 2032 for a total of €90 million. On 15 June 2012, Saint-Gobain issued €750 million worth of 3.625% notes due 2021. On 28 June 2012, Saint-Gobain issued €45 million worth of EUR 10 year CMS linked notes due 2024 and €50 million worth of EUR 10 year CMS linked notes due 2024. On 8 October 2012, Saint-Gobain issued two 4% 20 year notes issues due 2032, for €30 million and €20 million respectively. On 9 October 2012, Saint-Gobain issued a 17 year bond for an amount of GBP 250 million with an annual coupon of 4.625% due in 2029, swapped for euros at approximately 4.31%. On 27 March 2013, Saint-Gobain issued NOK750 million worth of 4.00% notes due 2018. On 28 March 2013, Saint-Gobain issued €100 million worth of 3.875% notes due 2033. On 5 June 2013, Saint-Gobain issued €164 million worth of 2.875% notes due 2023 (the "2023 Bond"). Saint-Gobain subsequently issued €70 million worth of notes on 3 July 2013. On 25 September 2013, Saint-Gobain issued €37 million worth of 4.18% notes due 2033. On 27 September 2013, Saint-Gobain issued €10 million worth of 4.16% notes due 2033. On 21 October 2013, Saint-Gobain issued €50 million and €16 million worth of 2.875% notes due 2023. Further, on 26 November 2013, Saint-Gobain issued €50.4 million and €11.6 million worth of 2.875% notes due 2023. On 24 March 2014 Saint-Gobain issued €100.0 million and €25.2 million worth of 3.875% notes due 2033. On 27 May 2014 Saint-Gobain issued €40.0 million worth of 3.625% notes due 2038. On 5 September 2014 Saint-Gobain issued €34.0 million worth of 3.00% notes due 2034. On 23 December 2014, Saint-Gobain issued €30.0 million worth of 3.00% notes due 2049. On 13 March 2015, Saint-Gobain issued €500.0 million worth of floating rate notes due 2016. On 27 September 2016, Saint-Gobain issued €1 billion worth of 0% notes due 2020. On 17 March 2017, Saint-Gobain issued €750.0 million worth of 1.00% notes due 2025. On 14 June, 2017, Saint-Gobain issued €750.0 million worth of 1.375% notes due 2027. On 22 March 2018, Saint-Gobain issued €750.0 million notes worth of 1.125% notes due 2026. On 17 April 2018, Saint-Gobain issued €20.0 million worth of EUR CMS linked notes due 2023. On 24 May 2018, Saint-Gobain issued €60.0 million worth of Fixed Rate-to-CMS Floater Rate Notes due 2033. On 25 June 2018, Saint-Gobain issued €180.0 million worth of 2yr Floating Rate Notes due 2020. On 25 June 2018, Saint-Gobain also issued €300.0 million worth of 2yr Floating Rate Notes due 2020.
The Group has set up two receivables securitization programmes, one through its French subsidiary Point. P Finances GIE, and the other through its US subsidiary, Saint-Gobain Receivables Corporation.
The French programme was rolled over on 10 November 2016 for a maximum amount of €500 million. It amounted to €500 million at both 31 December 2017 and 31 December 2016. Based on observed seasonal fluctuations in receivables included in the programme and on the contract's features, €400 million of this amount was classified as non-current and the balance as current.
The US programme was renewed on 21 October 2015 for a maximum amount of \$350 million.
On 26 April 2018, Saint-Gobain announced its unaudited first-quarter 2018 sales3 . The Group posted €9,755 million in sales for the first quarter of 2018, down 1.8% on the same period in 2017 (€9,937 million).
On a like-for-like basis, sales grew by 1.6%. Prices continued to rise (up 2.1%) against a higher comparison basis. Volumes declined 0.5%, hit by a negative calendar impact of around 2% and by harsh weather conditions, especially in Europe and in March. North America, Asia and emerging countries enjoyed further good growth momentum.
3 Source of data in this section: the information has been extracted without material adjustment from the press release published by Saint-Gobain on 26 April 2018 (https://www.saintgobain.com/sites/sgcom.master/files/cp_ca_t1_2018_va.pdf).
On a reported basis, sales totalled €9,755 million, with a strong negative 4.7% currency impact notably due to the depreciation of the US dollar, Brazilian real, Nordic krona and other Asian and emerging country currencies against the euro.
The Group structure impact added 1.3% to sales growth and mainly reflects the consolidation of companies in Asia and emerging countries (KIMMCO, Tumelero, Megaflex, Isoroc Poland), in new niche technologies and services (TekBond, Maris, Scotframe), and to consolidate our strong positions (Glava, Biolink, Kirson, Wattex, SimTek, boit-on acquisitions in Building Distribution).
The table below presents sales trends by Business Sector and major geographic area:
| Sales Q1 2017 |
Sales Q1 2018 |
Change on an actual structure basis |
Change on a comparable structure basis |
Like-for like change |
|
|---|---|---|---|---|---|
| BUSINESS SECTOR |
|||||
| Innovative Materials (1) |
2,606 | 2,550 | (2.1)% | (2.6)% | 3.7% |
| Flat Glass | 1,426 | 1,384 | (2.9)% | (3.1)% | 0.9% |
| High-Performance Materials |
1,184 | 1,173 | (0.9)% | (1.7)% | 7.3% |
| Construction Products (1) |
3,104 | 3,054 | (1.6)% | (3.9)% | 3.2% |
| Interior Solutions | 1,707 | 1,748 | 2.4% | (0.8)% | 4.6% |
| Exterior Solutions | 1,419 | 1,331 | (6.2)% | (7.6)% | 1.6% |
| Building Distribution |
4,483 | 4,399 | (1.9)% | (2.7)% | (0.7)% |
| Internal sales and misc. |
(256) | (248) | ------ | ------ | ------ |
| GEOGRAPHIC | |||||
| AREA France |
2,637 | 2,673 | 1.4% | 4.6% | 4.6% |
| Other Western | 4,241 | 4,166 | (1.8)% | 5.9% | 8.3% |
| European countries North America |
1,398 | 1,275 | (8.8)% | 12.3% | 8.2% |
| Emerging countries and Asia |
2,174 | 2,184 | 0.5% | 13.7% | 10.5% |
| Internal sales | (513) | (543) | ------ | ------ | ------ |
| GROUP | 9,937 | 9,755 | (1.8)% | (3.1)% | 1.6% |
(1) Including inter-division eliminations.
Construction Products delivered 3.2% sales growth despite a negative calendar impact. The price effect continued its strong rise, except for Exterior Products in the US.
Building Distribution sales slipped 0.7%, including a negative calendar impact of around 2% and a strong negative impact due to weather conditions in Europe. Harsh weather affected ail of our main countries, with construction projects delayed. Trading in France continued to recover with good momentum in new-builds and progress in renovation. Nordic countries continued to see good underlying growth despite the negative impacts of the first quarter (working days and weather). UK volumes continued to deteriorate, partly offset by a strong price effect. Germany was hit especially by poor weather in March. Trading remained weak in Brazil.
Unaudited First-quarter Sales – Results by Geographic Area5
• France (up 1.3%) confirmed its improvement excluding the calendar impact despite the harsh weather conditions. Sales were buoyed by dynamic new-build activity and by progress in renovation.
4 Source of data in this section: http://www.saint-gobain.com/en/press/
5 Source of data in this section: http://www.saint-gobain.com/en/press/
Saint-Gobain and the Kuwait-based company Alghanim Industries who are already partners in insulation manufacturing joint-ventures in Turkey (Izocam) and Saudi Arabia (SIIMCO), have decided to extend their partnership to Kuwait: as of 11 January 2018, they have become jointventure partners in KIMMCO. This company, as the other common joint-ventures, will be managed jointly by both partners and will be consolidated in Saint-Gobain's accounts.
KIMMCO is the regional leader in Insulation with a glasswool manufacturing plant in Shuaiba-Kuwait, operating under license from Saint-Gobain ISOVER. It reported total sales close to 24 million Kuwaiti dinar in 2016 (about €70 million), selling in Kuwait and to the Middle East. The market is dynamic, driven by increasing awareness around energy efficiency and insulation needs, and regional weather conditions.
This acquisition is in line with the Group's strategy of expanding its presence in new geographies. It will enable Saint-Gobain Construction Products and Alghanim Industries to take a leading role in offering solutions to the energy and sustainable development challenges in the Gulf countries.
Saint-Gobain is investing in a new blowing glass wool production line in its Isover plant of Chemillé, near Angers, France. This line, due to come on stream mid-2019, is designed to meet the rising demand of the French market for roof space thermal insulation solutions. It demonstrates Saint-Gobain's commitment in favour of the climate and its active participation in the building energy renovation Plan.
Beyond the installation of this structuring equipment, two other dedicated lines, in Azuqueca near Madrid, Spain and Vidalengo close to Milan, Italy, will become operational in the spring and autumn of 2018 respectively.
These new lines represent a total investment of €45m, mostly earmarked for Chemillé.
In March 2018, Saint-Gobain acquired Italian company Logli Massimo, the specialist in glass systems and accessories for the fixing and assembly of glass panels, in particular for railings, shower doors, partition walls and interior and exterior doors.
Founded in 1989, today the company employs nearly 60 people. Already the leader in Italy, it is developing its position in France, Benelux and a number of other European countries. Integration with the Group will enable the company to accelerate its growth in Europe by being able to offer complete solutions to architects and tradespeople.
This acquisition is consistent with the Group's strategy of expanding its range of downstream products towards high value-added solutions.
In March 2018, Saint-Gobain acquired HyComp, a leading supplier of composite components made with proprietary carbon fibres and thermoplastic materials, used in high temperature and long life applications in the aerospace industry. HyComp is headquartered in Ohio, United States, and employs around 120 people.
This acquisition is fully in line with the Group's strategy to develop new adjacent technological niches. It will enable the High-Performance Materials Activity to broaden its portfolio of materials for technically demanding applications.
Saint-Gobain has announced the modernization and extension of its ISOVER plant's stone wool production line in Ploiesti, Romania, due to come on stream in the second half of 2019. This renovation will considerably increase the plant's production capacity, taking it up to 30,000 tons a year, and extend its range of products for the Romanian market and neighbouring countries. It will also enable Saint-Gobain to strengthen its positions on the insulation market and meet the rising growth in demand in South-East Europe.
Saint-Gobain ISOVER has run operations on its Ploiesti site since 1997, with a glass wool line currently being modernised and due to start up in July 2018, and a stone wool line.
In April 2018, Saint-Gobain announced that it had taken a 50% in a flat glass production line of the Chinese group JJG, located in Zibo in the Shandong province, North-East China, with a total annual capacity of 160,000 tons.
This JV will allow Saint-Gobain to almost double its production of basic glass in China, reinforcing the reliability of the flat glass supply for its Sekurit automotive glass factories.
Saint-Gobain has been present in glass in China since 1994. It already manages one flat glass production unit of 100,000 tons per year in Qingdao in the Shandong province, and three production units for automotive glass.
This investment is in line with the Group's strategy of expanding its presence in emerging countries, reinforcing Saint-Gobain's position in automotive glass in China.
In April 2018, Saint-Gobain acquired the pharmaceutical business of Micro Hydraulics, an Irish-based supplier and manufacturer of single-use fluid handling components and systems in high-performance plastics for high purity applications in the pharmaceutical and biopharmaceutical industries.
It will strengthen Saint-Gobain's High-Performance Materials Activity, allowing the Group to expand its service and product offering and enhance its local presence for customers in the Healthcare market.
This acquisition is in line with the Group's strategy to develop new adjacent technological niches in fast-growing markets.
Sika, the Burkard family and Saint-Gobain signed agreements which terminate and resolve their dispute to the common benefit of all parties involved and that of their respective shareholders and stakeholders. The following was agreed:
Saint-Gobain acquired all outstanding shares of SWH from the Burkard family for a purchase price of CHF 3.22 billion,an increase of over CHF 500 million from the purchase price agreed in December 2014 between Saint-Gobain and the Burkard Family, taking into account the increase in Sika's value since 2014. Sika purchased a 6.97% stake in Sika from SWH (representing a 23.7% voting interest) for a total consideration of CHF 2.08 billion. This amount contains a CHF 795 million premium over the market value as of 4 May 2018.
All pending litigation will be terminated. Furthermore, it is intended to propose to the shareholders
of Sika to terminate the mandate of the Special Experts.
Sika called for an extraordinary shareholders' meeting (EGM) on 11 June 2018 and proposed to:
SWH, fully owned by Saint-Gobain at the time of the EGM, voted in favour of all resolutions. Urs F. Burkard, Jürgen Tinggren and Willi Leimer have resigned from the board of directors of Sika. All independent directors continue to serve the company and in time will seek to strengthen the board with new appointees.
The future relationship between Saint-Gobain and Sika will be on both shareholder and business levels:
Saint-Gobain will become a shareholder of Sika through SWH. After the EGM it holds 10.75% of votes and capital interest in Sika. The parties have agreed on lock-up (2 years) and standstill obligations (up to 10.75% for four years, up to 12.875% for the following two years) with regard to Saint-Gobain's stake in Sika. In case ot an intended sale, these shares will first be offered to Sika up to 10.75%.
The two groups will also continue their substantial existing business relationship and seek to further expand it to areas of mutual benefit while preserving and respecting each group's economic and legal independence.
Sika funded this transaction through a bridge loan committed by UBS. Subsequently, Sika intends to optimise its capital structure through the issuance of debt and debt-like securities, while maintaining both the investment grade rating as well as the financial flexibility to fund the defined growth strategy of the company.
Saint-Gobain is managed by its Board of Directors. The Board is comprised of 14 Directors, 8 of whom are independent. It includes 1 Director representing employee shareholders and 2 Directors representing employees. The names, functions in Saint-Gobain, other principal activities and business addresses of the current members of the Board of Directors of Saint-Gobain are provided below.
Pierre-André de Chalendar, 59, was appointed Chief Operating Officer of Saint-Gobain on 3 May 2005 and was elected to the Board of Directors on 8 June 2006, becoming Chief Executive Officer on 7 June 2007 and Chairman and Chief Executive Officer on 3 June 2010. He is a member of the Strategy and CSR Committee. He is also a Director of BNP Paribas. He was a Director of Veolia Environnement until April 2015. Within the Group, he is a Director of Saint-Gobain Corporation and GIE SGPM Recherche. He was Chairman of the Board of Directors of Verallia (the former Packaging Sector of the Group) from March 2011 to March 2014.
Business address: Les Miroirs, 18 Avenue d'Alsace – 92400 Courbevoie (France)
Lydie Cortes, 47, was a member of the Works Council, Personnel Representative, member of the Health, Hygiene and Safety Committee of Weber and Central Union Delegate for the CFDT. She was also a member of the Group Committee and Secretary of the European Convention and Select Committee of Saint-Gobain
Business address: Les Miroirs, 18 Avenue d'Alsace – 92400 Courbevoie (France)
Iêda Gomes Yell, 61, a British and Brazilian national, was Chief Executive Officer of Companhia de Gas de São Paulo from 1995 to 1998 and has since held several management positions within the BP group and professional organisations. Ms. Yell is a member of the Nomination and Remuneration Committee. Ms. Yell is a Director and member of the Strategy Committee and Audit & Risk Committee of Bureau Veritas, a Director and member of the Nominating and Corporate Governance Committee of Exterran Corporation and a Director and Chairman of the Governance Committee of InterEnergy Holfings. She is was also the Founding Chairman of Energix Strategic Ltd until 2017 and was a member of the Board of BP Brasil Ltd and BP Egypt Investments Ltd up to 2011.
Business address: Route de Lyon, 01960 Servas (France)
Anne-Marie Idrac, 66, was appointed in 1995 Secrétaire d'Etat for Transportation, a position she held until June 1997. She was elected member of Parliament for Yvelines in 1997 and 2002 and served on the Ile-de-France Regional Council from 1998 to 2002. Between 2002 and 2006, Ms. Idrac was Chairman and Chief Executive Officer of the Paris transportation authority (RATP) and, between 2006 and 2008, was Chairman of the French national railway (SNCF). In March 2008, she was appointed Secrétaire d'Etat for Foreign Trade, serving in that capacity until November 2010. In addition, Ms. Idrac was Chairman of European-France Movement from 1999 to 2005 and a member of the Economic and Social Council from 2004 to 2008. She is also Chairman of the Advisory Board of the School of Public Affairs of Sciences Po Paris and Deputy Chair of the Robert Schuman Foundation. Ms. Idrac is also a director of Air-France KLM and a Director of Total and Bouygues. Ms. Idrac was a member of the Supervisory Board of Vallourec until 2014 and a director of Médiobanca until 2014. Ms. Idrac resigned as Chairman of the Supervisory Board of Aéroport Toulouse-Blagnac in May 2018. She is Chair of the Nomination and Remuneration Committee.
Business address: Les Miroirs, 18 Avenue d'Alsace – 92400 Courbevoie (France)
Pamela Knapp, 60, a German national, is a member of the Supervisory Board and the Nomination, Remuneration and Governance Committee and the Finance and Audit Committee of Peugeot S.A., a director of Hostettler, Kramarsch & Partner Group AG, a director and member of the Audit Committee of Panalpina World Transport (Holding) Ltd and a Director and member of the Audit Committee of NB Bekaert. From 2009 to 2014, Ms. Knapp was a member of the Management Board of GfK SE.
Business address: Les Miroirs, 18 Avenue d'Alsace – 92400 Courbevoie (France)
Agnès Lemarchand, 63, is Chairman of Orchad SAS as well as a director of Solvay and Biomérieux. Until 2014, Ms. Lemarchand was Executive Chairman of Steetley Dolomite Limited. Until 2015, Ms. Lemarchand was a member of the Supervisory Board of Vivescia Industries (representing BPI France Participations) and a member of the Supervisory Board of Areva. Until 2017, Ms. Lemarchand was a director of CGG.
Business address: Les Miroirs, 18 Avenue d'Alsace – 92400 Courbevoie (France)
Frédéric Lemoine, 52, was Chairman of the Management Board of Wendel as well as Chairman of the Supervisory Board of Oranje-Nassau Groep BV, Chairman of the Board of Directors of Trief Corporation, Chairman of the Supervisory Council of Constantia Flexibles and Chairman of the Board of Directors of Bureau Veritas.
Business address: Les Miroirs, 18 Avenue d'Alsace – 92400 Courbevoie (France)
Dominique Leroy, 52, a Belgian national, is Chief Executive Officer of Proximus, a member of the Supervisory Board and of the Sustainability and Innovation Committee of Ahold Delhaize, and Director and Chairman of the Audit Committee of Lotus Bakeries.
Business address: Les Miroirs, 18 Avenue d'Alsace – 92400 Courbevoie (France)
Jacques Pestre, 61, is Deputy Chief Executive Officer of Saint-Gobain Distribution Bâtiment France responsible for the Point.P brand and as Chairman, Chairman of the Board of Directors or Director in the following companies of the Saint-Gobain Building Distribution Sector: DOCKS DE L'OISE, SONEN (since 2012), BMSO, BMCE, COMASUD, BMRA, Méridionale des Bois et Matériaux MBM, CIBOMAT, DMO and TROUILLARD. He does not hold any other directorships.
Business address: Immeuble Le Mozart – 13/15 rue Germaine Tailleferre – 75940 Paris Cedex 19 (France)
Denis Ranque, 66, is Chairman of the Board of Directors of Airbus as well as a Director of CMA-CGM and was a Director of Scilab Enterprises until 2017. He has served as Chairman of the Board of Mines Paris Tech, of the Cercle de l'Industrie and Association Nationale Recherche et Technologie. Denis Ranque is currently Chairman of the Haut Comité de Gouvernement d'Entreprise (High Committee on Corporate Governance) and Chairman of the Board of Directors of the Fondation École Polytechnique.
Business address: 12, rue Pasteur – BP76 92152 Suresnes Cedex (France)
Gilles Schnepp, 59, is Chairman and Chief Executive Officer of Legrand and holds various positions and functions within various Legrand Group subsidiaries.
Business address: 128, avenue du Maréchal de Tassigny – 87045 Limoges Cedex (France)
Jean-Dominique Senard, 65, is Chief Executive Officer of Michelin and was, until 2013, a Director of SEB. He is Chairman of the Strategy and CSR Committee.
Business address: 23, place des Carmes Déchaux – 63040 Clermont-Ferrand Cedex 9 (France)
Philippe Thibaudt, 37, was Secretary of the CHSCT, Vice-Secretary of the Works Council and Union Delegate for the CGT. He was also a titular member and Vice-Secretary of the Central Enterprise Committee, Central Union Delegate of SG Isover and titular member of the Group Committee. He has also held coordination and animation missions for the Glass Division at the Glass Federation. Lastly, he is also alternate representative of the Central Enterprise Committee at the Isover Board of Directors.
Business address: 19 rue Paul Sabatier, P.P. 15, 71102 Chalon-sur-Saône (France)
Philippe Varin, 65, is Chairman of the Audit and Risk Committee. He is also Chairman of the Board of Directors of Areva S.A., a special representative of the Minister of Foreign Affairs and International Development for the ASEAN countries and Chairman of the Cercle de I'Industrie. He was previously a Director of PSA Peugeot Citroën, PCMA Holding BV, Faurecia S.A., Banque PSA Finance S.A. (until 2014), BG Group Plc (until 2013) and EDF (until 2016).
Business address: 1, place Jean Miller – 92400 Courbevoie (France).
Saint-Gobain complies with the principles of corporate governance set out in the AFEP-MEDEF corporate governance code for publicly listed companies in France.
The independent directors of the Board of Directors of Saint-Gobain are Iêda Gomes Yell, Anne-Marie Idrac, Pamela Knapp, Agnès Lemarchand, Agnès Lemarchand, Dominique Leroy, Gilles Schnepp, Jean-Dominique Senard and Philippe Varin. The representative of Wendel, a major shareholder of Saint-Gobain, is Frédéric Lemoine whilst the representatives of employees of Saint-Gobain are Lydie Cortes and Philippe Thibaudet and the representative of employee shareholders is Jacques Pestre.
There are no potential conflicts of interest between the duties owed to the Issuer by the Directors of the Issuer and their private interests and/or other duties.
The members of the Financial Statements Committee of the Group are Philippe Varin (Chairman), Pamela Knapp, Agnès Lemarchand and Gilles Schnepp.
According to the Board of Directors' internal rules, the Audit and Risk Committee has the following responsibilities:
turnover, and reports to the Board its opinion concerning the Statutory Auditors' independence.
The Committee fulfils the duties of both a nominations committee and a remuneration committee, provided for in the AFEP-MEDEF Code.
According to the Board of Directors' internal rules in force at 1 February 2018, the Nomination and Remuneration Committee has the following responsibilities:
The members of the Strategy and Corporate Social Responsibility Committee of the Group are Jean-Dominique Senard (Chairman), Pierre-André de Chalendar and Frédéric Lemoine.
According to the Board of Directors' internal rules in force at 1 February 2018, the Strategy and Corporate Social Responsibility (CSR) Committee has the following responsibilities:
In so far as Saint-Gobain is aware, it is not directly or indirectly owned or controlled by any person.
Wendel owns a significant holding in the shares of Saint-Gobain (2.5% of the share capital and 4.5% of voting rights, each as at 31 December 2017). Its position as a shareholder is the subject of the agreements signed with Wendel and announced on 26 May 2011, which were approved by the Company's annual general meeting held on 7 June 2012 in its fourth resolution concerning related party agreements. The commitments made under these arrangements will apply for a 10-year period as from the Company's annual general meeting held on 9 June 2011.
The issued and fully paid share capital of Saint-Gobain as of 12 July, 2018 was €2,209,959,432 divided into:
| Class of Share | Nominal Value per share (€) |
Number issue |
in |
|---|---|---|---|
| Ordinary | 4 | 552,489,858 | |
Saint-Gobain is a French public société anonyme governed by Articles L. 210-1 et seq. of the French Commercial Code, with its head office at Les Miroirs, 18 avenue d'Alsace, 92400 Courbevoie, France. It is registered in Nanterre under no. 542039532. Its APE business identifier code is 741J and its Siret code is 54203953200040.
Saint-Gobain's corporate purpose is to conduct and manage, in France and internationally, any and all industrial commercial, financial, securities and real estate transactions related to its manufacturing activities, through French or foreign subsidiaries or affiliates or otherwise (article 3 of the bylaws). The Issuer's fiscal year runs from 1 January to 31 December. Its term will end on 31 December 2040, unless it is wound up before that date or its term is extended.
The information set out below is subject to any change in or reinterpretation of the rules, regulations and procedures of DTC, Euroclear or Clearstream, Luxembourg (together, the "Clearing Systems") currently in effect. The information in this section concerning the Clearing Systems has been obtained from sources that the Issuer believes to be reliable, but none of the Issuer nor any Dealer takes any responsibility for the accuracy thereof. Investors wishing to use the facilities of any of the Clearing Systems are advised to confirm the continued applicability of the rules, regulations and procedures of the relevant Clearing System. None of the Issuer nor any other party to the Agency Agreement will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the Notes held through the facilities of any Clearing System or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
DTC
DTC has advised the Issuer that it is a limited purpose trust company organised under the New York Banking Law, a banking organisation within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code and a clearing agency registered pursuant to Section 17A of the Exchange Act. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerised bookentry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organisations. DTC is a wholly-owned subsidiary of the Depositary Trust & Clearing Corporation ("DTCC"). DTCC, in turn is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation, and Emerging Markets Clearing Corporation) NSCC, FICC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC System is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants").
Under the rules, regulations and procedures creating and affecting DTC and its operations (the "Rules"), DTC makes book-entry transfers of Registered Notes among Direct Participants on whose behalf it acts with respect to Notes accepted into DTC's book-entry settlement system ("DTC Notes") as described below and receives and transmits distributions of principal and interest on DTC Notes. The Rules are on file with the Securities and Exchange Commission. Direct Participants and Indirect Participants with which beneficial owners of DTC Notes ("Owners") have accounts with respect to the DTC Notes similarly are required to make bookentry transfers and receive and transmit such payments on behalf of their respective Owners. Accordingly, although Owners who hold DTC Notes through Direct Participants or Indirect Participants will not possess Registered Notes, the Rules, by virtue of the requirements described above, provide a mechanism by which Direct Participants will receive payments and will be able to transfer their interest in respect of the DTC Notes.
Purchases of DTC Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the DTC Notes on DTC's records. The ownership interest of each actual purchaser of each DTC Note ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participant's records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the DTC Notes are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in DTC Notes, except in the event that use of the book-entry system for the DTC Notes is discontinued.
To facilitate subsequent transfers, all DTC Notes deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co or such other nominee as may be requested by an authorised representative. The deposit of DTC Notes with DTC and their registration in the name of Cede & Co. or such other nominee effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the DTC Notes; DTC's records reflect only the identity of the Direct Participants to whose accounts such DTC Notes are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the DTC Notes within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to DTC Notes. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the DTC Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the DTC Notes will be made to Cede & Co., or such other nominee as may be requested by an authorised representative of DTC and credited to Direct Participants' accounts in accordance with DTC's customary practice. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name", and will be the responsibility of such Participant and not of DTC or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Issuer, disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants,
Under certain circumstances, including if there is an Event of Default under the Notes, DTC will exchange the DTC Notes for definitive Registered Notes, which it will distribute to its Participants in accordance with their proportionate entitlements and which, if representing interests in a Rule 144A Global Note, will include the legend as set forth under "Subscription and Sale and Transfer and Selling Restrictions".
Since DTC may only act on behalf of Direct Participants, who in turn act on behalf of Indirect Participants, any Owner desiring to pledge DTC Notes to persons or entities that do not participate in DTC, or otherwise take actions with respect to such DTC Notes, will be required to withdraw its Registered Notes from DTC as described below.
DTC's address is Depository Trust Company, 55 Water Street, 1SL, New York, NY 10041- 0099, United States of America.
Euroclear and Clearstream, Luxembourg each holds securities for its customers and facilitates the clearance and settlement of securities transactions by electronic book-entry transfer between their respective account holders. Euroclear and Clearstream, Luxembourg provide various services including safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Euroclear and Clearstream, Luxembourg also deal with domestic securities markets in several countries through established depository and custodial relationships. Euroclear and Clearstream, Luxembourg have established an electronic bridge between their two systems across which their respective participants may settle trades with each other.
Euroclear and Clearstream, Luxembourg customers are world-wide financial institutions, including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations. Indirect access to Euroclear and Clearstream, Luxembourg is available to other institutions that clear through or maintain a custodial relationship with an account holder of either system.
Euroclear's address is Euroclear Bank S.A./N.V., 1 Boulevard du Roi Albert II, 1210 Brussels, Belgium, and Clearstram, Luxembourg's address is Clearstream Banking, société anonyme, 42, avenue John F. Kennedy, L-1855 Luxembourg.
The Issuer may apply to DTC in order to have any Tranche of Notes represented by a Registered Global Note accepted in its book-entry settlement system. Upon the issue of any such Registered Global Note, DTC or its custodian will credit, on its internal book-entry system, the respective nominal amounts of the individual beneficial interests represented by such Registered Global Note to the accounts of persons who have accounts with DTC. Such accounts initially will be designated by or on behalf of the relevant Dealer. Ownership of beneficial interests in such a Registered Global Note will be limited to Direct Participants or Indirect Participants, including, in the case of any Regulation S Global Note, the respective depositaries of Euroclear and Clearstream, Luxembourg. Ownership of beneficial interests in a Registered Global Note accepted by DTC will be shown on, and the transfer of such ownership will be effected only through, records maintained by DTC or its nominee (with respect to the interests of Direct Participants) and the records of Direct Participants (with respect to interests of Indirect Participants).
Payments in U.S. dollars of principal and interest in respect of a Registered Global Note accepted by DTC will be made to the order of DTC or its nominee as the registered holder of such Note. In the case of any payment in a currency other than U.S. dollars, payment will be made to the Exchange Rate Agent on behalf of DTC or its nominee and the Exchange Rate Agent will (in accordance with instructions received by it) remit all or a portion of such payment for credit directly to the beneficial holders of interests in the Registered Global Note in the currency in which such payment was made and/or cause all or a portion of such payment to be converted into U.S. dollars and credited to the applicable Participants' account.
The Issuer expects DTC immediately to credit accounts of Direct Participants in accordance with and subject to DTC's customary practice. The Issuer also expects that payments by Participants to beneficial owners of Notes will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers, and will be the responsibility of such Participant and not the responsibility of DTC, the Issuing and Principal Paying Agent, the Registrar or the Issuer. Payment of principal, premium, if any, and interest, if any, on Notes to DTC is the responsibility of the Issuer.
Transfers of any interests in Notes represented by a Registered Global Note within DTC, Euroclear and Clearstream, Luxembourg will be effected in accordance with the customary rules and operating procedures of the relevant clearing system. The laws in some States within the United States require that certain persons take physical delivery of securities in definitive form. Consequently, the ability to transfer Notes represented by a Registered Global Note to such persons may depend upon the ability to exchange such Notes for Notes in definitive form. Similarly, because DTC can only act on behalf of Direct Participants in the DTC system who in turn act on behalf of Indirect Participants, the ability of a person having an interest in Notes represented by a Registered Global Note accepted by DTC to pledge such Notes to persons or entities that do not participate in the DTC system or otherwise to take action in respect of such Notes may depend upon the ability to exchange such Notes for Notes in definitive form. The ability of any holder of Notes represented by a Registered Global Note accepted by DTC to resell, pledge or otherwise transfer such Notes may be impaired if the proposed transferee of such Notes is not eligible to hold such Notes through a direct or indirect participant in the DTC system.
Subject to compliance with the transfer restrictions applicable to the Registered Notes described under "Subscription and Sale and Transfer and Selling Restrictions", cross-market transfers between DTC, on the one hand, and directly or indirectly through Clearstream, Luxembourg or Euroclear accountholders, on the other, will be effected by the relevant clearing system in accordance with its rules and through action taken by the Registrar, the Fiscal Agent and any custodian ("Custodian") with whom the relevant Registered Global Notes have been deposited.
On the Issue Date for any Series, transfers of Notes of such Series to accountholders in Clearstream, Luxembourg and Euroclear and transfers of Notes of such Series between participants in DTC will generally have a settlement date three business days after the trade date (T+3). Following the implementation of the T+2 settlement cycle by Clearstream, Luxembourg and Euroclear in accordance with Regulation (EU) No 909/2014, transfers of Notes of such Series after the Issue Date between accountholders in Clearstream, Luxembourg and Euroclear will have a settlement date two business days after the trade date (T+2). The customary arrangements for delivery versus payment will apply to all such transfers.
Cross-market transfers between accountholders in Clearstream, Luxembourg or Euroclear and DTC participants will need to have an agreed settlement date between the parties to such transfer. Because there is no direct link between DTC, on the one hand, and Clearstream, Luxembourg and Euroclear, on the other, transfers of interests in the relevant Registered Global Notes will be effected through the Registrar, the Fiscal Agent and the Custodian receiving instructions (and, where appropriate, certification) from the transferor and arranging for delivery of the interests being transferred to the credit of the designated account for the transferee. In the case of cross-market transfers, settlement between Euroclear or Clearstream, Luxembourg accountholders and DTC participants cannot be made on a delivery versus payment basis. The securities will be delivered on a free delivery basis and arrangements for payment must be made separately.
DTC, Clearstream, Luxembourg and Euroclear have each published rules and operating procedures designed to facilitate transfers of beneficial interests in Registered Global Notes among participants and accountholders of DTC, Clearstream, Luxembourg and Euroclear. However, they are under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued or changed at any time. None of the Issuer, the Agents or any Dealer will be responsible for any performance by DTC, Clearstream, Luxembourg or Euroclear or their respective direct or indirect participants or accountholders of their respective obligations under the rules and procedures governing their operations and none of them will have any liability for any aspect of the records relating to or payments made on account of beneficial interests in the Notes represented by Registered Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial interests.
The comments below are of a general nature based on current United Kingdom ("UK") tax law as applied in England and published practice of HM Revenue & Customs ("HMRC"), the UK tax authorities. Such law may be repealed, revoked or modified and such practice may not bind HMRC and/or may change (in each case, possibly with retrospective effect), resulting in UK tax consequences different from those discussed below. The comments below only discuss the withholding of UK income tax from interest on Notes, certain UK information reporting requirements and certain UK stamp duty and stamp duty reserve tax ("SDRT") consequences of issuing and transferring Notes, and they are not exhaustive. The comments do not deal with other UK tax aspects of acquiring, holding or disposing of Notes. The comments relate only to the position of persons who are the absolute beneficial owners of their Notes, Receipts and Coupons and may not apply to certain classes of persons such as dealers. Prospective holders of Notes who are in any doubt as to their own tax position or who may be subject to tax in a jurisdiction other than the United Kingdom should consult their professional advisers.
The references to "interest" in this discussion mean "interest" as understood for UK withholding tax purposes under UK tax law. The comments below do not take account of any different definitions which may prevail under any other law or which may be created by the terms and conditions of the Notes or any related documentation.
Any redemption premium may be "interest" for UK tax purposes, although the position will depend on the particular terms and conditions of the Notes. If such amounts are not interest they should not be subject to withholding or deduction for or on account of UK income tax. For Notes issued at a discount, the difference between the face value and the issue price will not generally be regarded as "interest" for these purposes.
Payments of interest on the Notes may be made without withholding or deduction for or on account of UK income tax if the interest does not have a UK source.
Payments of interest may also be made without withholding or deduction for or on account of UK income tax if the Notes are and continue to be listed on a "recognised stock exchange", as defined in section 1005 of the UK Income Tax Act 2007. The London Stock Exchange is such a recognised stock exchange, and the Notes will be treated as "listed" on the London Stock Exchange while they are admitted to the Official List by the UK Listing Authority and admitted to trading on the London Stock Exchange's Regulated Market. Provided that the Notes remain so listed, payments of interest on the Notes will be payable without withholding or deduction for or on account of UK income tax even if the interest has a UK source.
In other cases, payments of interest on the Notes (if the interest has a UK source) will fall to be paid under deduction of UK income tax at the basic rate (currently 20%) subject to such relief as may be available under the provisions of any applicable double taxation treaty or to any other exemption that may apply. However, this withholding will not apply under current UK tax law if the relevant interest is paid on Notes with a maturity of less than one year and which are not issued under arrangements the effect of which is to render such Notes part of a borrowing with a total term of a year or more.
Where interest has been paid under deduction of UK income tax, Noteholders who are not resident in the United Kingdom may be able to recover all or part of the tax deducted if there is an appropriate provision in any applicable double taxation treaty.
Noteholders should note that information relating to the Notes may be required to be provided to HMRC in certain circumstances pursuant to certain domestic and international reporting and transparency regimes. This may include (but is not limited to) information relating to the value of the Notes, amounts paid or credited with respect to the Notes, details of the holders or beneficial owners of the Notes (or the persons for whom the Notes are held), details of the persons who exercise control over entities that are, or are treated as, holders of the Notes, details of the persons to whom payments derived from the Notes are or may be paid and information and documents in connection with transactions relating to the Notes. Information may be required to be provided by, amongst others, the Issuer, the holders of the Notes, persons by or through whom payments derived from the Notes are made or credited or who receive such payments (or who would be entitled to receive such payments if they were made), persons who effect or are a party to transactions relating to the Notes on behalf of others and certain registrars or administrators. Accordingly, in order to enable these requirements to be met, holders of the Notes may be required to provide information to the Issuer or to other persons. In certain circumstances, the information obtained by HMRC may be exchanged with tax authorities in other countries.
No stamp duty or SDRT will be payable in the United Kingdom in connection with (i) the issue and delivery into DTC, Euroclear or Clearstream, Luxembourg of Registered Notes or Bearer Notes that constitute loan capital for UK stamp duty purposes, or (ii) an electronic book-entry transfer of Notes in accordance with the rules and procedures of DTC, Euroclear or Clearstream, Luxembourg.
The descriptions below are intended as a basic summary of certain withholding tax consequences that may be relevant to holders of Notes who do not concurrently hold shares of the Issuer. Persons who are in any doubt as to their tax position should consult a professional tax adviser.
Pursuant to Article 125 A III of the French General Tax Code, payments of interest and other revenues made by the Issuer on such Notes are not subject to withholding tax unless such payments are made outside France in a non-cooperative State or territory within the meaning of Article 238-0 A of the French General Tax Code (a "Non-Cooperative State"), in which case a 75% withholding tax is applicable subject to exceptions, certain of which are set forth below, and to the more favourable provisions of any applicable double tax treaty. The 75% withholding tax is applicable irrespective of the tax residence of the Noteholder. The list of Non-Cooperative States is published by a ministerial executive order, which may be updated at any time and at least once a year. A draft law published by the French government on 28 March 2018 would, if adopted in its current form, expand the list of Non-Cooperative States as defined under Article 238-0 A of the French General Tax Code, to include states and jurisdictions on the blacklist published by the Council of the European Union and as a consequence, would expand this withholding tax regime to certain states and jurisdictions included in the blacklist.
Furthermore, according to Article 238 A of the French General Tax Code, interest and other revenues will not be deductible from the Issuer's taxable income, if they are paid or accrued to persons domiciled or established in a Non-Cooperative State or paid to a bank account opened in a financial institution located in such a Non-Cooperative State. The abovementioned draft law published by the French government on 28 March 2018, would, if adopted in its current form, expand this regime to the states and jurisdictions included in the blacklist published by the Council of the European Union. Under certain conditions, any such non-deductible interest or other revenues may be recharacterised as constructive dividends pursuant to Articles 109 et seq. of the French General Tax Code, in which case such non-deductible interest and other revenues may be subject to the withholding tax set out under Article 119 bis 2 of the same Code, at a rate of (i) 30% (to be reduced and aligned to the standard corporate income tax rate set forth in Article 219-I of the French General Tax Code for the fiscal years beginning on or after 1 January 2020) for Noteholders who are non-French tax resident legal persons, (ii) 12.8% for Noteholders who are non-French tax resident individuals, in each case (x) unless payments are made in a Non-Cooperative State (in which case the withholding tax rate would be equal to 75%) and (y) subject to certain exceptions and to more favourable provisions of any applicable double tax treaty.
Notwithstanding the foregoing, neither the 75% withholding tax provided by Article 125 A III of the French General Tax Code, the non-deductibility of the interest and other revenues nor the withholding tax set out under Article 119 bis 2 of the same Code that may be levied as a result of such non-deductibility, to the extent the relevant interest or revenues relate to genuine transactions and is not in an abnormal or exaggerated amount, will apply in respect of a particular issue of Notes provided that the Issuer can prove that the main purpose and effect of such issue of Notes is not that of allowing the payments of interest or other revenues to be made in a Non-Cooperative State (the "Exception").
In addition, under French tax administrative guidelines (BOI-INT-DG-20-50-20140211) dated 11 February 2014, an issue of Notes benefits from the Exception without the Issuer having to provide any evidence supporting the main purpose and effect of such issue of Notes, if such Notes are:
Payments of interest and other revenues with respect to Notes which are consolidated (assimilables for the purpose of French law) and form a single series with Notes issued (or deemed issued) outside France as provided under Article 131 quater of the French General Tax Code, before 1 March 2010, provided that their term has not been prorogated, will continue to be exempt from the withholding tax set out under Article 125 A III of the French General Tax Code.
Notes issued before 1 March 2010 and whose term has not been prorogated, whether denominated in Euro or in any other currency, and constituting obligations under French law, or titres de créances négociables within the meaning of the French tax administrative guidelines (BOI-RPPM-RCM-30-10-30-30-20140211), dated 11 February 2014, or other debt securities issued under French or foreign law and considered by the French tax authorities as falling into similar categories, are deemed to be issued outside the Republic of France for the purpose of Article 131 quater of the French General Tax Code, in accordance with the aforementioned administrative guidelines.
In addition, interest and other revenues paid by the Issuer on Notes issued on or after 1 March 2010 and which are to be consolidated (assimilables for the purpose of French law) and form a single series with Notes issued before 1 March 2010 will not be subject to the withholding tax set out in Article 119 bis 2 of the French General Tax Code solely on account of their being paid on a bank account opened in a financial institution located in a Non-Cooperative State or accrued or paid to persons established or domiciled in a Non-Cooperative State.
Pursuant to Article 125A of the French General Tax Code (i.e. where the paying agent (établissement payeur) is located in France), subject to certain exceptions, interest received by French tax resident individuals is subject to a 12.8% levy withheld at source, which is deductible from their personal income tax liability in respect of the year in which the payment has been made. Social contributions (CSG, CRDS and other related contributions) are also levied by way of withholding tax at an aggregate rate of 17.2% on interest paid to French tax resident individuals. Holders of Notes who are French tax resident individuals are urged to consult with their usual tax advisor on the way the 12.8% levy and the 17.2% social security contributions are collected, where the paying agent is not located in France.
US persons considering the purchase of Notes should consult their own tax advisers concerning the application of US federal income tax laws to their particular situations as well as any consequences of the purchase, ownership and disposition of Notes arising under the laws of any state, local or other taxing jurisdiction.
The Dealers have, in a programme agreement (the "Programme Agreement") dated 13 October 2006, amended as of 14 December 2007, and amended and restated as of 12 December 2008, as of 20 July 2011, as of 17 July 2013, as of 17 July 2015, as of 27 July 2016, as of 12 July 2017 and as of 13 July 2018 agreed with the Issuer a basis upon which they or any of them may from time to time agree to purchase Notes. Any such agreement will extend to those matters stated under "Form of Final Terms", "Form of Pricing Supplement in relation to Exempt Notes" and "Terms and Conditions of the Notes". In the Programme Agreement, the Issuer has agreed to reimburse the Dealers for certain of their expenses in connection with the establishment and any future update of the Programme and the issue of Notes under the Programme and to indemnify the Dealers against certain liabilities incurred by them in connection therewith.
In order to facilitate the offering of any Tranche of the Notes, certain persons participating in the offering of the Tranche may engage in transactions that stabilise, maintain or otherwise affect the market price of the relevant Notes during and after the offering of the Tranche. Specifically such persons may over-allot or create a short position in the Notes for their own account by selling more Notes than have been sold to them by the Issuer. Such persons may also elect to cover any such short position by purchasing Notes in the open market. In addition, such persons may stabilise or maintain the price of the Notes by bidding for or purchasing Notes in the open market and may impose penalty bids, under which selling concessions allowed to syndicate members or other broker-dealers participating in the offering of the Notes are reclaimed if Notes previously distributed in the offering are repurchased in connection with stabilisation transactions or otherwise. The effect of these transactions may be to stabilise or maintain the market price of the Notes at a level above that which might otherwise prevail in the open market. The imposition of a penalty bid may also affect the price of the Notes to the extent that it discourages resales thereof. No representation is made as to the magnitude or effect of any such stabilising or other transactions. Such transactions, if commenced, may be discontinued at any time. Under UK laws and regulations stabilising activities may only be carried on by the relevant Stabilisation Manager(s) (or person(s) acting on behalf of any Stabilisation Manager(s)) in accordance with all applicable laws and rules and such activities must end no later than the earlier of 30 days after the Issue Date of the relevant Tranche of Notes and 60 days after the date of the allotment of the relevant Tranche of Notes.
Each purchaser of Registered Notes offered hereby or person wishing to transfer an interest from one Registered Global Note to another or from global to definitive form or vice versa, will be required (and in any event will be deemed) to acknowledge, represent and agree as follows (terms used in this paragraph that are defined in Rule 144A or in Regulation S are used herein as defined therein):
(i) that either: (a) it is a QIB, purchasing (or holding) the Notes for its own account or for the account of one or more QIBs and it is aware that any sale to it is being made in reliance on Rule 144A or (b) it is an Institutional Accredited Investor which has delivered an IAI Investment Letter or (c) it is outside the United States and is not a U.S. person;
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER APPLICABLE U.S. STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (A) REPRESENTS THAT (1) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING THE SECURITIES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE QUALIFIED INSTITUTIONAL BUYERS OR (2) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") 11; (B) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITIES EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT REFERRED TO HEREIN AND WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITIES PRIOR TO THE DATE WHICH IS ONE YEAR AFTER THE LATER OF THE DATE OF ORIGINAL ISSUANCE OF THIS SECURITY AND THREE MONTHS AFTER THE HOLDER HEREOF CEASES TO BE AN "AFFILIATE" (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE ISSUER (OR SUCH LATER DATE AS MAY BE REQUIRED BY APPLICABLE LAWS), UNLESS SUCH OFFER OR TRANSFER IS MADE (1) TO THE ISSUER OR ANY AFFILIATE THEREOF, (2) INSIDE THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 903 OR RULE 904 AS APPLICABLE UNDER THE SECURITIES ACT, (4) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND ANY OTHER JURISDICTION; AND (C) IT AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THIS SECURITY AND RELATED DOCUMENTATION (INCLUDING, WITHOUT LIMITATION, THE AGENCY AGREEMENT REFERRED TO HEREIN) MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, WITHOUT THE CONSENT OF, BUT UPON NOTICE TO, THE HOLDERS OF SUCH SECURITIES SENT TO THEIR REGISTERED ADDRESSES, TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO RESALES OR OTHER TRANSFERS OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL BE DEEMED, BY ITS ACCEPTANCE OR PURCHASE HEREOF, TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT (EACH OF WHICH SHALL BE CONCLUSIVE AND BINDING ON THE HOLDER HEREOF AND ALL FUTURE HOLDERS OF THIS SECURITY AND ANY SECURITIES ISSUED IN EXCHANGE OR SUBSTITUTION THEREFOR, WHETHER OR NOT ANY NOTATION THEREOF IS MADE HEREON).";
(vii) if it is outside the United States and is not a U.S. person, that if it should resell or otherwise transfer the Notes prior to the expiration of the distribution compliance period (defined as 40 days after the later of the commencement of the offering and the completion of the distribution (for the purposes of Regulation S) of all of the Notes of the Tranche of which the Notes form a part), it will do so only (a)(i) outside the United States in compliance with Rule 903 or 904 as applicable under the Securities Act or (ii) to a QIB in compliance with Rule 144A and (b) in accordance with all applicable U.S. State securities laws; and it acknowledges that the Regulation S Global Notes will bear a legend to the following effect unless otherwise agreed to by the Issuer:
"THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER APPLICABLE U.S. STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE AGENCY AGREEMENT AND PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT. THIS LEGEND SHALL CEASE TO APPLY UPON THE EXPIRY OF THE PERIOD OF 40 DAYS AFTER THE COMPLETION OF THE DISTRIBUTION (FOR THE PURPOSES OF REGULATION S) OF ALL THE NOTES OF THE TRANCHE OF WHICH THIS NOTE FORMS PART.";
Institutional Accredited Investors who purchase Registered Notes in definitive form offered and sold in the United States are required to execute and deliver to the Registrar an IAI Investment Letter. Upon execution and delivery of an IAI Investment Letter by an Institutional Accredited Investor, Notes will be issued in definitive registered form, see "Terms and Conditions of the Notes".
The IAI Investment Letter will state, among other things, the following:
to any distribution of the Notes, subject, nevertheless, to the understanding that the disposition of its property shall at all times be and remain within its control; and
(vi) that it is acquiring for (unless it is a bank fiduciary acting on behalf of others) its own account, and if it is a non-bank fiduciary acting on behalf of others it is acquiring for each other account for which it is purchasing Notes, Notes having a minimum purchase price of at least U.S.\$500,000 (or the approximate equivalent in another Specified Currency).
No sale of Legended Notes in the United States to any one purchaser will be for less than U.S.\$250,000 (or its foreign currency equivalent) principal amount or, in the case of sales to Institutional Accredited Investors, U.S.\$500,000 (or its foreign currency equivalent) principal amount and no Legended Note will be issued in connection with such a sale in a smaller principal amount. If the purchaser is a non-bank fiduciary acting on behalf of others, each person for whom it is acting must purchase at least U.S.\$250,000 (or its foreign currency equivalent) or, in the case of sales to Institutional Accredited Investors, U.S.\$500,000 (or its foreign currency equivalent) principal amount of Registered Notes.
The Notes have not been, and will not be, registered under the Securities Act or the state securities laws of any state of the United States, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons, as defined in Regulation S, unless the Notes are registered under the Securities Act or except pursuant to an exemption from, or in transactions not subject to, the registration requirements of the Securities Act and in compliance with any applicable state securities laws.
The Notes in bearer form (other than Notes with a maturity of 365 days or less including unilateral rollovers and extensions) are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to a United States person, except in accordance with the provisions of United States Treasury Regulations Section 1.163-5(c)(2)(i)(D) (the "D Rules"), or in accordance with the provisions of United States Treasury Regulations Section 1.163-5(c)(2)(i)(C) (the "C Rules"), as specified in the applicable Final Terms. Terms used in this paragraph have the meanings given to them by the U.S. Internal Revenue Code of 1986, as amended, and regulations thereunder, including the D Rules.
In respect of Notes issued in accordance with the D Rules, each Dealer has represented and agreed that:
(1) except to the extent permitted under the D Rules, it (a) has not offered or sold, and during the restricted period will not offer or sell, Notes in bearer form to a person who is within the United States or its possessions or to a United States person, and (b) has not delivered and will not deliver within the United States or its possessions definitive Notes in bearer form that are sold during the restricted period;
(2) it has and throughout the restricted period will have in effect procedures reasonably designed to ensure that its employees or agents who are directly engaged in selling Notes in bearer form are aware that such Notes may not be offered or sold during the restricted period to a person who is
within the United States or its possessions or to a United States person, except as permitted by the TEFRA D;
(3) if it is a United States person, it is acquiring the Notes in bearer form for purposes of resale in connection with their original issuance and if it retains Notes in bearer form for its own account, it will only do so in accordance with the requirements of U.S. Treas. Reg. § 1.163-5(c)(2)(i)(D)(6); and
(4) with respect to each affiliate that acquires from such Dealer Notes in bearer form for the purpose of offering or selling such Notes during the restricted period, it either (a) repeats and confirms the representations and agreements contained in clauses (1), (2) and (3) on its behalf or (b) agrees that it will obtain from such affiliate for the Issuer's benefit the representations and agreements contained in clauses (1), (2) and (3).
In addition, no Dealer has entered into, nor will enter into any contractual arrangement with any distributor (as that term is defined for purposes of Regulation S and the D Rules) with respect to the distribution of the Notes, except with an affiliate of one of the Dealers or with the prior written consent of the Issuer.
Under the C Rules, Notes in bearer form must be issued and delivered outside the United States and its possessions in connection with their original issuance. Each Dealer has not offered, sold or delivered, and will not offer, sell or deliver, directly or indirectly, Notes in bearer form within the United States or its possessions in connection with their original issuance. Further, in connection with the original issuance of Notes in bearer form, the Dealer has not communicated, and will not communicate, directly or indirectly, with a prospective purchaser if either of the Dealer or the prospective purchase is within the United States or its possessions or otherwise involve the Dealer's U.S. office in the offer and sale of Notes in bearer form. Terms used in this paragraph have the meanings given to them by the U.S. Internal Revenue Code of 1986, as amended, and regulations thereunder, including the C Rules.
In connection with any Notes which are offered or sold outside the United States in reliance on an exemption from the registration requirements of the Securities Act provided under Regulation S ("Regulation S Notes"), each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it will not offer, sell or deliver such Regulation S Notes (i) as part of their distribution at any time or (ii) otherwise until 40 days after the completion of the distribution of all Notes of the Tranche of which such Notes are a part, as determined and certified by the relevant Dealer or, in the case of an issue of Notes on a syndicated basis, the relevant lead manager, of all Notes of the Tranche of which such Regulation S Notes are a part, within the United States or to, or for the account or benefit of, U.S. persons, as defined in Regulation S. Each Dealer has further agreed, and each further Dealer appointed under the Programme will be required to agree, that it will send to each dealer to which it sells any Regulation S Notes during the distribution compliance period a confirmation or other notice setting forth the restrictions on offers and sales of the Regulation S Notes within the United States or to, or for the account or benefit of, U.S. persons, as defined in Regulation S.
In addition, until 40 days after the commencement of the offering of any Tranche of Notes, an offer or sale of such Notes of such Tranche within the United States, or to or for the account of a U.S. person, as defined in Regulation S, by any dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with an available exemption from registration under the Securities Act.
In connection with any Notes which are offered or sold within the United States pursuant to a private placement, each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that:
the Notes will be offered in the United States only by approaching prospective purchasers on an individual basis and not in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act. No general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act will be used in connection with the offering of the Notes in the United States; and
This Base Prospectus has been prepared by the Issuer for use in connection with the offer and sale of Notes outside the United States to non-U.S. persons in reliance on Regulation S and the offer and sale of Notes in the United States to persons reasonably believed to be QIBs in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A or certain Institutional Accredited Investors in reliance upon an exemption from the registration requirements of the Securities Act. The Issuer and the Dealers reserve the right to reject any offer to purchase, in whole or in part, for any reason, or to sell less than the number of Notes which may be offered pursuant to Rule 144A or to Institutional Accredited Investors. This Base Prospectus does not constitute an offer to any person in the United States or to any U.S. person other than any QIB or Institutional Accredited Investor to whom an offer has been made directly by one of the Dealers or an affiliate of one of the Dealers. Distribution of this Base Prospectus by any non-U.S. person outside the United States or by any QIB or Institutional Accredited Investor in the United States to any U.S. person or to any other person within the United States other than any QIB or Institutional Accredited Investor and those persons, if any, retained to advise such non-U.S. person or QIB or Institutional Accredited Investor with respect thereto, is unauthorised and any disclosure without the prior written consent of the Issuer of any of its contents to any such U.S. person or other person within the United States other than any QIB or Institutional Accredited Investor and those persons, if any, retained to advise such non-U.S. person or QIB or Institutional Accredited Investors, is prohibited.
Each issue of Inflation Linked Notes shall be subject to such additional U.S. selling restrictions as the Issuer and the relevant Dealer may agree as a term of the issue and purchase of such Notes, which additional selling restrictions shall be set out in the applicable Final Terms (or, in the case of Exempt Notes, the Pricing Supplement). Each relevant Dealer has agreed and each further Dealer appointed under the programme will be required to agree that it will offer, sell or deliver such Notes only in compliance with such additional U.S. selling restrictions.
In relation to each Member State of the European Economic Area (each, a "Member State"), each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it has not made and will not make an offer of Notes which are the subject of the offering contemplated by this Base Prospectus as completed by the Final Terms in relation thereto to the public in that Member State (the "Securities") except that it may make an offer of such Securities to the public in that Member State:
provided that no such offer of Securities referred to in (a) to (c) above shall require the Issuer 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.
For the purposes of this provision, the expression an "offer to the public" in relation to any Securities in any Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Securities to be offered so as to enable an investor to decide to purchase or subscribe the Securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression "Prospectus Directive" means Directive 2003/71/EC (as amended, including Directive 2010/73/EU), and includes any relevant implementing measure in the Member State.
The EEA selling restriction is in addition to any other selling restrictions set out below.
Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it has not offered, sold or otherwise made available and will not offer, sell or otherwise make available any Notes which are the subject of the offering contemplated by this Prospectus as completed by the Final Terms (or Pricing Supplement, as the case may be) in relation thereto to any retail investor in the European Economic Area. For the purposes of this provision:
(a) the expression "retail investor" means a person who is one (or more) of the following:
(i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or
(ii) a customer within the meaning of Directive 2002/92/EC (as amended, the "Insurance Mediation Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or
(iii) not a qualified investor as defined in the Prospectus Directive; and
(b) the expression "offer" includes the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes.
Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that:
The Notes have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Act No. 25 of 1948, as amended) (the "FIEL") and each Dealer has agreed, and each further Dealer appointed under the Programme will be required to agree, that it will not offer or sell any Notes, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the FIEL and any other applicable laws, regulations and ministerial guidelines of Japan.
Each of the Dealers has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that:
(a) it has not offered or sold and will not offer or sell, directly or indirectly, Notes to the public in France except to (a) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers) and/or (b) qualified investors (investisseurs qualifiés) acting for their own account, all as defined in, and in accordance with, Articles L.411-2, D.411-1, D.744-1, D.754-1, and D.764-1 of the French Code monétaire et financier (the "Code") and applicable regulations thereunder, except that qualified investors shall not include individuals.
If necessary these selling restrictions will be supplemented, amended or deleted in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement).
Each Dealer has agreed and each further Dealer appointed under the Programme will be required to agree that it will comply with all applicable securities laws and regulations in force in any jurisdiction in which it purchases, offers, sells or delivers Notes or possesses or distributes this Base Prospectus and will obtain any consent, approval or permission required by it for the purchase, offer, sale or delivery by it of Notes or distribution of the prospectus under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes such purchases, offers, sales or deliveries and neither the Issuer nor any of the other Dealers shall have any responsibility therefor.
None of the Issuer and the Dealers represents that Notes may at any time lawfully be sold in compliance with any applicable registration or other requirements in any jurisdiction, or pursuant to any exemption available thereunder, or assumes any responsibility for facilitating such sale.
With regard to each Tranche, the relevant Dealer will be required to comply with such other restrictions as the Issuer and the relevant Dealer shall agree.
The Programme and the issue of Notes have been duly authorised by resolutions of the Board of Directors of the Issuer dated 20 February 2013 (which included authorisation of the increase of the Programme to EUR15,000,000,000) and 22 February 2018, respectively. Each issue of Notes which constitute obligations under French law must be authorised by the Board of Directors. Each issue of Notes which do not constitute obligations under French law must be authorised by the decision of a Directeur Général of the Issuer.
The admission of Notes to the Official List will be expressed as a percentage of their nominal amount (excluding accrued interest). It is expected that each Tranche of Notes which is to be admitted to the Official List and to trading on the London Stock Exchange's Regulated Market will be admitted separately as and when issued, subject only to the issue of a Global Note or Notes initially representing the Notes of such Tranche. Application has been made to the UK Listing Authority for Notes issued under the Programme to be admitted to the Official List and to the London Stock Exchange for such Notes to be admitted to trading on the London Stock Exchange's Regulated Market. The listing of the Programme in respect of Notes is expected to be granted on or before 17 July 2018.
For the period of 12 months following the date of this Base Prospectus, copies of the following documents will, when published, be available from the registered office of the Issuer and from the specified office of the Paying Agent for the time being in London:
In addition, copies of this Base Prospectus, each Final Terms relating to listed Notes and each document incorporated by reference herein are available on the website of the London Stock Exchange at http://www.londonstockexchange.com/exchange/news/market-news/marketnews-home.html.
The Notes in bearer form have been accepted for clearance through Euroclear and Clearstream, Luxembourg. The appropriate Common Code and ISIN for each Tranche of Bearer Notes allocated by Euroclear and Clearstream, Luxembourg will be specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement). In addition, the Issuer may make an application for any Notes in registered form to be accepted for trading in book-entry form by DTC. The CUSIP and/or CINS numbers for each Tranche of Registered Notes, together with the relevant ISIN and common code, will be specified in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement).
The address of Euroclear is Euroclear Bank SA/NV, 1 Boulevard du Roi Albert II, B-1210 Brussels and the address of Clearstream, Luxembourg is Clearstream Banking, 42 Avenue JF Kennedy, L-1855 Luxembourg.
The price and amount of Notes to be issued under the Programme will be determined by the Issuer and the relevant Dealer at the time of issue in accordance with prevailing market conditions.
There has been no significant change in the financial or trading position of the Group since 31 December 2017, being the date of its last published consolidated annual financial statements.
There has been no material adverse change in the financial position or prospects of the Issuer since 31 December 2017, being the date of its last published consolidated annual financial statements.
Except as set out in "Risk Factors—Legal Risks" on pages 18 to 22 there are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware) during the previous 12 months which may have, or have had in the recent past, significant effects on the Issuer and/or the Group's financial position or profitability.
Third-party information referred to in the sections entitled "Information about the Issuer" and "Terms and Conditions of the Notes" has been accurately reproduced and as far as the Issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. The source of such third party information is identified where used.
PricewaterhouseCoopers Audit, 63, rue de Villiers, 92208 Neuilly-sur-Seine Cedex, France and KPMG Audit — Department of KPMG S.A. of Tour Eqho, 2, avenue Gambetta, CS 60055, 92066 Paris La Défense, France, both of whom are members of the Compagnie Regionale des Commissionaires aux Comptes de Versailles, have audited, and rendered unqualified audit reports on, the accounts of the Issuer for the financial years ended 31 December 2017 and 31 December 2016.
The Issuer does not intend to provide any post-issuance information in relation to any issues of Note.
Certain of the Dealers and their affiliates have engaged, and may in the future engage, in investment banking and/ or commercial banking transactions with, and may perform services to the Issuer and its affiliates in the ordinary course of business. Certain of the Dealers and their affiliates may have positions, deal or make markets in the Notes issued under the Programme, related derivatives and reference obligations, including (but not limited to) entering into hedging strategies on behalf of the Issuer and its affiliates, investor clients, or as principal in order to manage their exposure, their general market risk, or other trading activities.
In addition, in the ordinary course of their business activities, the Dealers and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of the Issuer or the Issuer's affiliates. Certain of the Dealers or their affiliates that have a lending relationship with the Issuer routinely hedge their credit exposure to the Issuer consistent with their customary risk management policies. Typically, such Dealers and their affiliates would hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in securities, including potentially the Notes issued under the Programme. Any such positions could adversely affect future trading prices of Notes issued under the Programme. The Dealers and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
The Issuer's legal entity identifier (LEI) is NFONVGN05Z0FMN5PEC35.
Les Miroirs 18, avenue d'Alsace 92400 Courbevoie France
Deutsche Bank AG, London Branch
Winchester House 1 Great Winchester Street London EC2N 2DB United Kingdom
Deutsche Bank Luxembourg S.A. 2, boulevard Konrad Adenauer L- 1115 Luxembourg
Deutsche Bank AG, London Branch Winchester House 1 Great Winchester Street London EC2N 2DB
DEALERS
Banco Bilbao Vizcaya Argentaria, S.A. Ciudad BBVA
Calle Sauceda 28, Edificio Asia Madrid 28050 Spain
10 Harewood Avenue London NW1 6AA United Kingdom
Citigroup Centre Canada Square Canary Wharf London E14 5LB United Kingdom
ING Bank N.V. Belgian Branch Avenue Marnix, 24 – 1000 Brussels Belgium
MUFG Securities EMEA plc
Ropemaker Place 25 Ropemaker Street London EC2Y 9AJ United Kingdom
Société Générale 29 Boulevard Haussmann 75009 Paris France
To the Issuer as to French law Legal Department Compagnie de Saint-Gobain Les Miroirs 18, avenue d'Alsace 92400 Courbevoie France
United Kingdom
Banco Santander, S.A. Ciudad Grupo Santander Avenida de Cantabria s/n 28660, Boadilla del Monte
Madrid Spain Crédit Agricole Corporate and Investment Bank 12 place des Etats-Unis, CS 70052 92547 Montrouge CEDEX
France
Goldman Sachs International Peterborough Court, 133 Fleet St London EC4A 2BB United Kingdom
J.P. Morgan Securities plc 25 Bank Street Canary Wharf London, E14 5JP
United Kingdom Nomura International plc 1 Angel Lane
London EC4R 3AB United Kingdom
NatWest Markets Plc
250 Bishopsgate London EC2M 4AA United Kingdom
To the Dealers as to English, U.S. and French law Cleary Gottlieb Steen & Hamilton LLP 2 London Wall Place London EC2Y 5AU United Kingdom
63, rue de Villiers 92208 Neuilly-Sur-Seine Cedex France
Tour Eqho 2, avenue Gambetta CS 60055 92066, Paris La Défense France
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