Regulatory Filings • May 4, 2020
Regulatory Filings
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(incorporated in England with limited liability, registered number 2468686)
Under the Euro Note Programme described in this Prospectus (the "Programme"), Aviva plc (the "Issuer"), subject to compliance with all relevant laws, regulations and directives, may from time to time issue notes (the "Notes"). The Notes may be issued as dated unsubordinated notes ("Senior Notes") or as dated subordinated notes with terms capable of qualifying as Tier 3 Capital (as defined in "Terms and Conditions of the Tier 3 Notes") ("Dated Tier 3 Notes") or as undated subordinated notes with terms capable of qualifying as Tier 3 Capital (as defined in "Terms and Conditions of the Tier 3 Notes") ("Undated Tier 3 Notes" and, together with the Dated Tier 3 Notes, the "Tier 3 Notes") or as dated subordinated notes with terms capable of qualifying as Tier 2 Capital (as defined in "Terms and Conditions of the Tier 2 Notes")("DatedTier 2 Notes") or as undated subordinated notes with terms capable of qualifying as Tier 2 Capital (as defined in "Terms and Conditions of the Tier 2 Notes") ("Undated Tier 2 Notes" and, together with the Dated Tier 2 Notes, the "Tier 2 Notes"). The aggregate nominal amount of Notes outstanding will not at any time exceed £7,000,000,000 (or the equivalent in other currencies).
This Prospectus has been approved as a base prospectus (the "Prospectus") by the United KingdomFinancial Conduct Authority (the "FCA") as competent authority under Regulation (EU) 2017/1129, as amended (the "Prospectus Regulation"). The FCA only approves this Prospectus as meeting the standards of completeness, comprehensibility and consistency imposed by the Prospectus Regulation. Approval by the FCA should not be considered as an endorsement of the Issuer or of the quality of the Notes that are the subject of this Prospectus. Investors should make their own assessment as to the suitability of investing in the Notes.
Applications have been made to the FCA for Notes issued under the Programme (other than PR Exempt Notes (as defined below)) for the period of 12 months from the date of this Prospectus to be admitted to the official list of the FCA (the "Official List") and to the London Stock Exchange plc (the "London Stock Exchange") for such Notes to be admitted to trading on the Main Market of the London Stock Exchange (the "Market"). The Market is a regulated market for the purposes of European Council Directive 2014/65/EU, as amended ("MiFID II"). References in this Prospectus to Notes being "listed" (and all related references) shall mean that such Notes have been admitted to trading on the Market (or any other stock exchange) and have been admitted to the Official List. The relevant Final Terms (as defined herein) or Pricing Supplement (as defined herein) in respect of the issue of any Notes will specify whether or not such Notes will be listed on the Official List and admitted to trading on the Market (or any other stock exchange). References in this Prospectus to "PRExempt Notes" are to Notes for which no prospectus is required to be published pursuant to the Prospectus Regulation. Information contained in this Prospectus regarding PR Exempt Notes shall not be deemed to form part of this Prospectus and the FCA has neither approved nor reviewed information contained in this Prospectus in connection with the offering and sale of PR Exempt Notes. In the case of PR Exempt Notes, notice of the aforesaid information which is applicable to each Tranche will be set out in a pricing supplement document ("Pricing Supplement"). Accordingly, in the case of PR Exempt Notes, each reference in this Prospectus to information being specified or identified in the applicable Final Terms shall be read and construed as a reference to such information being specified or identified in the applicable Pricing Supplement, unless the context requires otherwise.
Each Series (as defined herein) of Notes in bearer form will be represented on issue by a temporary global note in bearer form (each a "temporary Global Note") or a permanent global note in bearer form (each a "permanent Global Note" and, together with a temporary Global Note, a "Global Note"). Notes in registered form will be represented by registered certificates (each a "Certificate"), one Certificate being issued in respect of each Noteholder's (as defined herein) entire holding of Registered Notes (as defined herein) of one Series. Certificates representing Registered Notes that are registered in the name of a nominee or a common nominee, as the case may be, for one or more clearing systems are referred to as "Global Certificates". In the case of Senior Notes, if the relevant Global Note is 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 relevant Tranche (as defined herein) to a common safekeeper (the "Common Safekeeper") for Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking S.A. ("Clearstream, Luxembourg"). Global Notes which are not issued in NGN form ("Classic Global Notes" or "CGNs") and Certificates will be deposited on the issue date of the relevant Tranche with a common depositary on behalf of Euroclear and Clearstream, Luxembourg (the "Common Depositary"). In the case of Senior Notes, if the relevant Global Certificates are stated in the applicable Final Terms to be issued under the New Safekeeping Structure ("NSS form"), the Global Certificates will be delivered on or prior to the original issue date of the relevant Tranche to the Common Safekeeper for Euroclear and Clearstream, Luxembourg. The provisions governing the exchange of interests in Global Notes for other Global Notes and definitive Notes are described in "Overview of Provisions Relating to the Notes while in Global Form".
Series of Notes to be issued under the Programme will be rated or unrated. Where a Series of Notes is to be rated, such rating will not necessarily be the same as the rating assigned to the Programme or Notes already issued. Where a Series of Notes is rated, the applicable rating(s) will be specified in the applicable Final Terms. The credit ratings and financial strength ratings which are included in this Prospectus have been provided by A.M. Best Europe - Rating Services Limited ("AM Best"), Fitch Ratings Limited ("Fitch"), Moody'sInvestors Service Ltd. ("Moody's") and S&P Global Ratings Europe Limited ("S&P"). Each of AM Best, Fitch and Moody's is established in the United Kingdom (the "UK") and registered under Regulation 1060/2009/EC of the European Parliament and of the Council of 16 September 2009 on credit rating agencies(as amended, the "CRA Regulation"). S&P is established in the European Union and registered under the CRA Regulation. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency.
In the case of any Notes which are to be admitted to trading on a regulated market within the European Economic Area (the "EEA") (or the UK) or offered to the public in a Member State of the EEA (or the UK) in circumstances which require the publication of a prospectus under the Prospectus Regulation, the minimum denomination shall be at least €100,000 (or its equivalent in any other currency as at the date of issue of the Notes).
Prospective investors should have regard to the section headed "Risk Factors" on page 15 of this Prospectus for a discussion of factors which may affect the Issuer's ability to fulfil its obligations in respect of Notes issued under the Programme and factors which are material for the purpose of assessing the market risks associated with the Notes issued under the Programme.
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or with any securities regulatory authority of any State or other jurisdiction of the United States (the "United States" or "U.S.") and the Notes may include bearer notes that are subject to U.S. tax law requirements. Subject to certain exceptions, the Notes may not be offered, sold or delivered within the U.S. or to, or for the account or benefit of, U.S. persons (as defined in the U.S. Internal Revenue Code of 1986, as amended, and regulations thereunder).
Interests in a temporary Global Note will be exchangeable, in whole or in part, for interests in a permanent Global Note on or after the date 40 days after the later of the commencement of the offering and the relevant issue date (the "Exchange Date"), upon certification as to non-U.S. beneficial ownership.
Arranger Citigroup
Dealers
Barclays Crédit Agricole CIB Goldman Sachs International Lloyds Bank Corporate Markets NatWest Markets
Citigroup Deutsche Bank HSBC Morgan Stanley Société Générale Corporate & Investment Banking This Prospectus constitutes a base prospectus for the purposes of article 8 of the Prospectus Regulation.
This Prospectus (supplemented as at the relevant time, if applicable) is valid for 12 months from its date in relation to Notes which are to be admitted to trading on a regulated Market in the EEA or in the UK and/or offered to the public in the EEA or in the UK other than in circumstances where an exemption is available under Article 1(4) and/or 3(2) of the Prospectus Regulation. The Issuer will, in the event of any significant new factor, material mistake or material inaccuracy relating to the information included in this Prospectus which may affect the assessment of any Notes, prepare a supplement to this Prospectus or publish a new prospectus for use in connection with any subsequent issue of Notes in compliance with section 87G of the Financial Services and Markets Act (the "FSMA"). The obligation to supplement this Prospectus in the event of a significant new factor, material mistake or material inaccuracy does not apply when this Prospectus is no longer valid.
The Issuer accepts responsibility for the information contained in this Prospectus and the Final Terms relating to any Series of Notes. To the best of the knowledge of the Issuer the information contained in this Prospectus and the Final Terms relating to any Series of Notes is in accordance with the facts and this Prospectus as completed by the Final Terms relating to any Series of Notes makes no omission likely to affect the import of such information.
The information on any websites to which this Prospectus refers (other than any information which is incorporated by reference herein) does not form part of this Prospectus and has not been scrutinised or approved by the FCA.
Relevant third-party information has been extracted from sources as specified in this Prospectus. The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware and is able to ascertain, no facts have been omitted which would render the reproduced information inaccurate or misleading.
This Prospectus has been prepared on the basis that any offer of Notes in any Member State of the EEA or the United Kingdom (each, a "Relevant State") will be made pursuant to an exemption under the Prospectus Regulation from the requirement to publish a prospectus for offers of Notes. Accordingly, any person making or intending to make an offer in that Relevant State of Notes which are the subject of an offering contemplated in this Prospectus as completed by Final Terms in relation to the offer of those Notes may only do so in circumstances in which no obligation arises for the Issuer or any Dealer (as defined in "Overview of the Programme") to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation, in each case, in relation to such offer. None of the Issuer, the Arranger (as defined in "Overview of the Programme") nor any Dealer has authorised, nor do they authorise, the making of any offer of Notes in circumstances in which an obligation arises for the Issuer, the Arranger or any Dealer to publish or supplement a prospectus for such offer.
This Prospectus is to be read in conjunction with all documents which are deemed to be incorporated herein by reference (see "Documents Incorporated by Reference" below).
No person has been authorised to give any information or to make any representation other than those contained in this Prospectus in connection with the issue or sale of the Notes 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 or the Arranger. Neither the delivery of this Prospectus nor the offering, sale or delivery of any Notes made in connection herewith shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer since the date hereof or the date upon which this Prospectus has been most recently amended or supplemented, or that there has been no adverse change in the financial position of the Issuer since the date hereof or the date upon which this Prospectus has been most recently amended or supplemented, or that any other information supplied in connection with the Programme is correct as of any time subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same.
The distribution of this Prospectus and the offering or sale of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes are required by the Issuer, the Dealers and the Arranger to inform themselves about and to observe any such restriction. The Notes have not been and will not be registered under the Securities Act and include Notes in bearer form that are subject to U.S. tax law requirements. Subject to certain exceptions, Notes may not be offered, sold or delivered within the U.S. or to U.S. persons. For a description of certain restrictions on offers and sales of Notes and on distribution of this Prospectus, see "Subscription and Sale".
IMPORTANT – EEA AND UK RETAIL INVESTORS – If the Final Terms (or Pricing Supplement, as the case may be) in respect of any Notes includes a legend entitled "Prohibition of Sales to EEA and UK 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 EEA or in the UK. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; (ii) a customer within the meaning of Directive (EU) 2016/97 (the "Insurance Distribution 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 Regulation. 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 or in the UK has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA or in the UK may be unlawful under the PRIIPs Regulation.
MIFID II PRODUCT GOVERNANCE/TARGET MARKET – The Final Terms (or Pricing Supplement, as the case may be) in respect of any Notes may 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 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.
NOTIFICATION UNDER SECTION 309B(1) OF THE SECURITIES AND FUTURES ACT (CHAPTER 289) OF SINGAPORE, AS MODIFIED OR AMENDED FROM TIME TO TIME (THE "SFA") AND THE SECURITIES AND FUTURES (CAPITAL MARKETS PRODUCTS) REGULATIONS 2018 OF S INGAPORE (THE "CMP REGULATIONS 2018") – In connection with Section 309(B) of the SFA and the CMP Regulations 2018, unless otherwise specified before an offer of Notes, the Issuer has determined, and hereby notifies all persons (including all relevant persons as defined in Section 309A(1) of the SFA)), that all Notes issued or to be issued under the Programme are prescribed capital markets products (as defined in the CMP Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).
BENCHMARKS REGULATION – Interest and/or other amounts payable under the Notes may be calculated by reference to certain reference rates and amounts payable on Fixed Rate Reset Notes, Floating Rate Notes and Fixed to Floating Rate Notes after the Fixed Rate End Date, may in certain circumstances be determined in part by reference to such reference rates. Any such reference rate may constitute a benchmark for the purposes of Regulation (EU) 2016/2011 (the "Benchmarks Regulation"). If any such reference rate does constitute such a benchmark, the applicable Final Terms (or Pricing Supplement, as the case may be) will indicate whether or not the benchmark is provided by an administrator included in the register of administrators and benchmarks established and maintained by the European Securities and Markets Authority ("ESMA") pursuant to Article 36 (Register of administrators and benchmarks) of the Benchmarks Regulation. Not every reference rate will fall within the scope of the Benchmarks Regulation. Furthermore, the transitional provisions in the Benchmarks Regulation may have the result that the administrator of a particular benchmark is not required to appear in the register of administrators and benchmarks at the date of the applicable Final Terms (or Pricing Supplement, as the case may be) (or if located outside the EU, recognition, endorsement or equivalence). The registration status of any administrator under the Benchmarks Regulation is a matter of public record and, save where required by applicable law, the Issuer does not intend to update the applicable Final Terms (or Pricing Supplement, as the case may be) to reflect any change in the registration status of the administrator.
This Prospectus does not constitute an offer of, or an invitation by or on behalf of the Issuer, the Arranger or the Dealers to subscribe for, or purchase, any Notes.
To the fullest extent permitted by law, none of the Dealers, the Arranger or the Trustee accepts any responsibility for the contents of this Prospectus or for any other statement, made or purported to be made by the Arranger, the Trustee or a Dealer or on its behalf in connection with the Issuer or the issue and offering of the Notes. The Arranger, the Trustee and each Dealer accordingly disclaims all and any liability to any investor whether arising in tort or contract or otherwise (save as referred to above) which it might otherwise have in respect of this Prospectus or any such statement. Neither this Prospectus nor any other information supplied in connection with the Programme or the Notes is intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by any of the Issuer, the Arranger, the Trustee or the Dealers that any recipient of this Prospectus or any other information supplied in connection with the Programme or the Notes should purchase the Notes. Each potential purchaser of Notes should determine for itself the relevance of the information contained in this Prospectus or any other information supplied in connection with the Programme or the Notes and its purchase of Notes should be based upon such investigation as it deems necessary. None of the Dealers, the Trustee or the Arranger undertakes to review the financial condition or affairs of the Issuer during the life of the arrangements contemplated by this Prospectus nor to advise any investor or potential investor in the Notes of any information coming to the attention of any of the Dealers, the Trustee or the Arranger.If a jurisdiction requires that the offering be made by a licensed broker or dealer and a Dealer or any affiliate of a Dealer is a licensed broker or dealer in that jurisdiction, the offering shall be deemed to be made by such Dealer or such affiliate on behalf of the Issuer in such jurisdiction.
In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) named as the stabilising manager(s) (the "Stabilising Manager(s)") (or persons acting on behalf of any Stabilising Manager(s)) in the applicable final terms / pricing supplement 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, stabilisation may not necessarily occur. Any stabilisation action may begin on or after the date on which adequate public disclosure of the terms of the offer of the relevant Tranche of Notes is made and, if begun, may cease at any time, but it must end no later than the earlier of 30 days after the issue date of the 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 must be conducted by the relevant Stabilising Manager(s) (or person(s) acting on behalf of any Stabilising Manager(s)) in accordance with all applicable laws and rules. Any loss or profit sustained as a consequence of any such over-allotment or stabilising shall, as against the Issuer, be for the account of the Stabilising Manager(s).
In this Prospectus, unless otherwise specified or the context otherwise requires, all references to "pounds sterling", "sterling" and "£" are to the currency of the UK, all references to "Canadian dollars" and "CAD" are to the currency of Canada, and all references to "€" and "euro" are to the single currency which was introduced at the start of the third stage of European Economic and Monetary Union, pursuant to the Treaty establishing the European Community (as amended from time to time).
If at any time the Issuer shall be required to prepare a supplemental prospectus pursuant to Article 23 of the Prospectus Regulation, the Issuer will prepare and make available an appropriate amendment or supplement to this Prospectus or a further prospectus which, in respect of any subsequent issue of Notes to be listed on the Official List and admitted to trading on the Market, shall constitute a supplemental prospectus as required by Article 23 of the Prospectus Regulation.
The Issuer has given an undertaking to the Dealers in the Dealer Agreement (as defined in "Subscription and Sale" herein) that it will comply with Article 23 of the Prospectus Regulation and, if required by law, the Issuer shall prepare an amendment or supplement to this Prospectus or publish a replacement Prospectus for use in connection with any subsequent offering of the Notes and shall supply to each Dealer such number of copies of such supplement hereto as such Dealer may reasonably request.
| OVERVIEW OF THE PROGRAMME | 8 |
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| RISK FACTORS | 15 |
| DOCUMENTS INCORPORATED BY REFERENCE | 46 |
| TERMS AND CONDITIONS OF THE SENIOR NOTES | 47 |
| TERMS AND CONDITIONS OF THE TIER 3 NOTES |
75 |
| TERMS AND CONDITIONS OF THE TIER 2 NOTES 115 |
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| OVERVIEW OF PROVISIONS RELATING TO THE NOTES WHILE IN GLOBAL FORM 155 |
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| USE OF PROCEEDS160 | |
| DESCRIPTION OF THE GROUP 161 |
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| UK TAXATION 169 |
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| SUBSCRIPTION AND SALE171 | |
| FORM OF FINAL TERMS FOR SENIOR NOTES177 | |
| FORM OF FINAL TERMS FOR TIER 3 NOTES183 | |
| FORM OF FINAL TERMS FOR TIER 2 NOTES191 | |
| FORM OF PRICING SUPPLEMENT FOR SENIOR NOTES 199 |
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| FORM OF PRICING SUPPLEMENT FOR TIER 3 NOTES207 | |
| FORM OF PRICING SUPPLEMENT FOR TIER 2 NOTES215 | |
| GENERAL INFORMATION223 |
The following overview does not purport to be complete and is taken from, and is qualified in its entirety by, the remainder of this Prospectus and, in relation to the terms and conditions of any particular Tranche of Notes, the applicable Final Terms or Pricing Supplement. Any decision to invest in any Note should be based on a consideration of this Prospectus as a whole, including the documents incorporated by reference.
This overview constitutes a general description of the Programme for the purposes of Article 25(1) of Commission Delegated Regulation (EU) 2019/980.
Words and expressions defined in "Terms and Conditions of the Senior Notes", "Terms and Conditions of the Tier 3 Notes" and"Terms and Conditions of the Tier 2 Notes" below shall, as appropriate, have the same meanings in this overview.
| Issuer: | Aviva plc |
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| Legal Entity Identifier of the Issuer: | YF0Y5B0IB8SM0ZFG9G81 |
| Issuer's website: | https://www.aviva.co.uk/ |
| Description: | Euro Note Programme. |
| Size: | Up to £7,000,000,000 (or the equivalent in other currencies at the date of issue) aggregate nominal amount of Notes outstanding at any one time. |
| Risk Factors: | There are certain factors that may affect the Issuer's ability to fulfil its obligations under Notes issued under the Programme. In addition, there are certain factors which are material for the purpose of assessing the market risks associated with Notes issued under the Programme. See "Risk Factors". |
| Arranger: | Citigroup Global Markets Limited. |
| Dealers: | Barclays Bank PLC Citigroup Global Markets Limited Crédit Agricole Corporate and Investment Bank Deutsche Bank AG, LondonBranch Goldman Sachs International HSBC Bank plc Lloyds BankCorporate Markets plc Morgan Stanley & Co. International plc NatWest Markets Plc Société Générale |
| The Issuer may from time to time terminate the appointment of any dealer under the Programme or appoint additional dealers either in respect of one or more Tranches or in respect of the whole Programme. References in this Prospectus to "Permanent Dealers" are to the persons listed above as Dealers and to such additional persons that are appointed as dealers in respect of the whole Programme (and whose appointment has not been terminated) and references to "Dealers" are to all Permanent Dealers and all persons appointed as a dealer in respect of one or more Tranches. |
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| Trustee: | The Law Debenture Trust Corporation p.l.c. |
| Issuing and Paying Agent: | HSBC Bank plc |
| Canadian Paying Agent: | The Issuer may from time to time appoint a Canadian paying agent (the "Canadian Paying Agent") under the Programme. |
| U.S. Paying Agent: | The Issuer may from time to time appoint a U.S. paying agent (the "U.S. Paying Agent") under the Programme. |
| Method of Issue: | The Notes will be issued on a syndicated or non-syndicated basis. The Notes will be issued in series (each a "Series") having one or more issue dates and on terms otherwise identical (or identical other than in respect of the first payment of interest), the Notes of each Series being intended to be interchangeable with all other Notes of that Series. Each Series may be issued in tranches (each a "Tranche") on the same or different issue dates. The specific terms of each Tranche (which will be completed, where necessary, with supplemental terms and conditions and, save in respect of the issue date, issue price, first payment of interest and nominal amount of the Tranche, will |
| be identical to the terms of other Tranches of the same Series) will be completed in the applicable final terms document (the "Final Terms") or Pricing Supplement. |
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| Issue Price: | Notes may be issued at their nominal amount or at a discount or premium to their nominal amount. |
| Form of Notes: | The Notes may be issued in bearer form ("Bearer Notes") or in registered form ("Registered Notes"). |
| Each Tranche of Bearer Notes will be represented on issue by a temporary Global Note if (i) definitive Notes are to be made available to Noteholders following the expiry of 40 days after their issue date or (ii) such Notes have an initial maturity of more than one year and are being issued in compliance with TEFRA D (as defined in "Overview of the Programme – Selling Restrictions"); otherwise such Tranche will be represented by a permanent Global Note. |
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| Registered Notes will be represented by Certificates, one Certificate being issued in respect of each Noteholder's entire holding of Registered Notes of one Series. Certificates representing Registered Notes that are registered in the name of a nominee or a common nominee, as the case may be, for one or more clearing systems are referred to as "Global Certificates". Global Certificates may be issued in NSS form. |
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| Clearing Systems: | Clearstream, Luxembourg and Euroclear and, in relation to any Tranche, such other clearing system as may be agreed between the Issuer, the Issuing and Paying Agent, the Trustee and the relevant Dealer. |
| Initial Delivery of Notes: | On or before the issue date for each Tranche of Senior Notes, if the relevant Global Note represents Bearer Notes and is in NGN form, the relevant Global Note will be delivered to a Common Safekeeper for Euroclear and Clearstream, Luxembourg. On or before the issue date for each Tranche of Senior Notes, if the relevant Global Certificates represent Registered Notes and are in NSS form, the relevant Global Certificates will be delivered to a Common Safekeeper for Euroclear and Clearstream, Luxembourg. |
| On or before the issue date for each Tranche ofTier 2 Notes, Tier 3 Notes or Senior Notes (if the relevant Global Note is in CGN form), the relevant Global Note representing Bearer Notes or the Certificate representing Registered Notes may be deposited with a common depositary for Euroclear and Clearstream, Luxembourg. Global Notes or Certificates may also be deposited with any other clearing system or may be delivered outside any clearing system provided that the method of such delivery has been agreed in advance by the Issuer, the Issuing and Paying Agent, the Trustee and the relevant Dealer. Registered Notes that are to be credited to one or more clearing systems on issue will be registered in the name of nominees or a common nominee for such clearing systems. |
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| Currencies: | Subject to compliance with all relevant laws, regulations and directives, Notes may be issued in any currency agreed between the Issuer and the relevant Dealers. |
| Maturities: | Subject to compliance with all relevant laws, regulations, directives and requirements of the Prudential Regulatory Authority ("PRA"), Dated Tier 2 Notes may have any maturity of no less than 10 years and Undated Tier 2 Notes will be perpetual and will not have a stated maturity. |
| Subject to compliance with all relevant laws, regulations, directives and requirements of the PRA, Dated Tier 3 Notes may have any maturity of no less than 5 years and Undated Tier 3 Notes will be perpetual and will not have a stated maturity. |
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| Subject to compliance with all relevant laws, regulations and directives, SeniorNotes may be issued with any maturity between one month and 30 years. |
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| Specified Denomination: | Definitive Notes will be in such denominations as may be specified in the relevant Final Terms, save that in the case of any Notes which are to be admitted to trading on a regulated market within the United Kingdom or the |
| EEA or offered to the public in the United Kingdom or a Member State of the EEA in circumstances which require the publication of a prospectus under the Prospectus Regulation, the minimum denomination shall be at least €100,000 (or its equivalent in any other currency as at the date of issue of the Notes). |
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| Fixed Rate Notes: | Fixed interest will be payable in arrear on the date or dates in each year specified in the relevant Final Terms. |
| Fixed Rate Reset Notes: | In relation to the Tier 3 Notes and the Tier 2 Notes only, fixed interest will be payable at the Initial Rate of Interest in arrear on the Interest Payment Date in each year for an initial period as specified in the relevant the Final Terms. Thereafter, the interest rate may be recalculated on certain dates specified by reference to a Mid-Swap Rate, a Benchmark Gilt Rate, a Reference Bond Rate or a CMT Rate, and for a period equal to the Reset Period, as adjusted for any applicable margin, in each case as specified in the relevant Final Terms. |
| Fixed to Floating Rate Notes: | In relation to the Tier 3 Notes and the Tier 2 Notes only, interest on the Fixed to Floating Rate Notes will bear a fixed rate of interest during the period from the Interest Commencement Date to but excluding the Fixed Rate End Date specified in the relevant Final Terms and from the Fixed Rate End Date will bear interest as if they were Floating Rate Notes. |
| Floating Rate Notes: | Floating Rate Notes will bear interest determined separately for each Series as follows: |
| (i) 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.; or |
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| (ii) by reference to CDOR, EURIBOR, LIBOR, SONIA, Compounded Daily SOFR or Weighted Average SOFR. |
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| Interest periods will be specified in the relevant Final Terms. | |
| Benchmark Discontinuation: | If Floating Rate Notes, Fixed Rate Reset Notes or Fixed to Floating Rate Notes provide for a Rate of Interest (or any component part thereof) to be determined by reference to a reference rate and a Benchmark Event in respect of such reference rate occurs, then the Issuer shall use its best efforts to appoint an Independent Adviser to determine a Successor Reference Rate, failing which an Alternative Reference Rate for use in place of the Original Reference Rate and to determine an Adjustment Spread (if any) and any Benchmark Amendments. Ifthe Issuer is unable to appoint an Independent Adviser or the Independent Adviser fails to determine a Successor Reference Rate or Alternative Reference Rate (as applicable), then the Issuer may determine such Successor Reference Rate, Alternative Reference Rate (as applicable), an Adjustment Spread (if any) and any Benchmark Amendments. If the Issuer is unable to make such determination, the Rate of Interest shall be determined by reference to the Original Reference Rate for the immediately preceding Interest Period. |
| Zero Coupon Notes (Senior Notes only): |
Zero Coupon Notes (as defined in "Terms and Conditions of the Senior |
| Notes") may be issued at their nominal amount or at a discount to it and will not bear interest. |
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| Interest Periods and Interest Rates: | The length of the interest periods for the Notes and the applicable interest rate or its method of calculation may differ from time to time or be constant for any Series. Notes may have a maximum interest rate, a minimum interest rate, or both. All such information will be set out in the relevant Final Terms. |
| Redemption: | The relevant Final Terms will specify the basis for calculating the redemption amounts payable. Unless permitted by then current laws and regulations, Notes which have a maturity of less than one year must have a minimum redemption amount of at least £100,000 (or its equivalent in other currencies). |
| Redemption of Dated Tier 3 Notes prior to their stated maturity is subject to prior written notice to, and the absence of objection from, the Relevant Regulator as more fully described in "Terms and Conditions of the Tier 3 Notes – Redemption, Substitution, Variation, Purchase and Options". Undated Tier 3 Notes have no Final Maturity Date and are only redeemable or repayable subject to prior written notice to, and the absence of objection from, the Relevant Regulator as more fully described in "Terms and Conditions of the Tier 3 Notes – Redemption, Substitution, Variation, Purchase and Options". |
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| Redemption of Dated Tier 2Notes prior to their stated maturity is subject to prior written notice to, and the absence of objection from, the Relevant Regulator as more fully described in "Terms and Conditions of the Tier 2 Notes – Redemption, Substitution, Variation, Purchase and Options". Undated Tier 2 Notes have no Final Maturity Date and are only redeemable or repayable subject to prior written notice to, and the absence of objection from, the Relevant Regulator as more fully described in "Terms and Conditions of the Tier 2 Notes – Redemption, Substitution, Variation, Purchase and Options". |
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| Optional Redemption: | The Final Terms issued in respect of each issue of Notes will state whether such Notes may be redeemed at the option of the Issuer and/or (in the case of Senior Notes only) the holders (either in whole or in part) and, if so, the terms applicable to such redemption. No Tier 3 Notes orTier 2 Notes may be redeemed at the option of the holders of such Notes. |
| Subject to certain conditions, if at any time after the Issue Date 80 per cent. or more of the aggregate principal amount of the Notes originally issued has been redeemed and/or purchased or cancelled, then the Issuer may, at its option (without any requirement for the consent or approval of the Noteholders) redeem all (but not some only) of the Notes at any time at their principal amount, together with (to the extent that such interest has not been cancelled in accordance with the Conditions) any accrued and unpaid interest to (but excluding) the date of redemption. |
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| Status of Senior Notes: | The Senior Notes constitute direct, unsecured and unsubordinated obligations of the Issuer. |
| Status of Tier 3 Notes: | The Tier 3 Notes constitute direct, unsecured and subordinated obligations of the Issuer and rank pari passuand without any preference among themselves. In the event of the winding-up or administration of the Issuer, the payment obligations of the Issuer under the Tier 3 Notes shall be subordinated to the claims of all Senior Creditors (as defined in "Terms and Conditions of the Tier 3 Notes") of the Issuer but shall rank at least pari passu with all other subordinated obligations of the Issuer which constitute Tier 3 Capital (as defined in "Terms and Conditions of the Tier 3 Notes") and shall rank in priority to the claims of holders of: (i) all obligations of the Issuer which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital or Tier 1 Capital (as defined in "Terms and Conditions of the Tier 3 Notes"); and (ii) all classes of share capital of the Issuer. |
| Except as provided in Condition 3(b) of the Terms and Conditions of the Tier 3 Notes, all payments in respect of the Tier 3 Notes shall be conditional upon the Issuer being solvent as contemplated under "Terms and Conditions of the Tier 3 Notes – Status" at the time for payment by the Issuer, and no amount shall be payable in respect of the Tier 3 Notes unless and until such time as the Issuer could make such payment and still be solvent immediately thereafter. |
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| Status of Tier 2 Notes: | The Tier 2 Notes constitute direct, unsecured and subordinated obligations of the Issuer and rank pari passuand without any preference among themselves. In the event of the winding-up or administration of the Issuer, the payment obligations of the Issuer under the Tier 2 Notes shall be subordinated to the claims of all Senior Creditors (as defined in "Terms and Conditions of the Tier 2 Notes") of the Issuer but shall rank at least pari passu with all other subordinated obligations of the Issuer which constitute Tier 2 Capital (other than Existing Undated Tier 2 Securities) (as defined in "Terms and |
| Conditions of the Tier 2 Notes") and shall rank in priority to the claims of holders of:(i) Existing Undated Tier 2 Securities (as defined in "Terms and Conditions of the Tier 2 Notes"); (ii) all obligations of the Issuer which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 1 Capital(as defined in "Terms and Conditions of the Tier 2 Notes"); and (iii) all classes of share capital of the Issuer. |
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| Except as provided in Condition 3(b) of the Terms and Conditions of the Tier 2 Notes, all payments in respect of the Tier 2 Notes shall be conditional upon the Issuer being solvent as contemplated under "Terms and Conditions of the Tier 2 Notes – Status" at the time for payment by the Issuer, and no amount shall be payable in respect of the Tier 2 Notes unless and until such time as the Issuer could make such payment and still be solvent immediately thereafter. |
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| Interest Deferral – Tier 3 Notes: | If Optional Interest Payment Date is specified, the Issuer may on any Optional Interest Payment Date defer payments of interest on Tier 3 Notes. |
| The Issuer is required to defer any payment of interest on Tier 3 Notes on each Mandatory Interest Deferral Date (being an Interest Payment Date in respect of which a Regulatory Deficiency Interest Deferral Event (which shall include, without limitation, (i) any event which causes any Solvency Capital Requirement or Minimum Capital Requirement to be breached and such breach is an event, or (ii) (where Insolvent Insurer Winding-up Condition is specified as applicable in the Final Terms or Pricing Supplement) where an Insolvent Insurer Winding-up has occurred and is continuing and the continuation of such Insolvent Insurer Winding-up is an event) has occurred and is continuing). |
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| Interest Deferral – Tier 2 Notes: | If Optional Interest Payment Date is specified, the Issuer may on any Optional Interest Payment Date defer payments of interest on Tier 2 Notes. |
| The Issuer is required to defer any payment of interest on Tier 2 Notes on each Mandatory Interest Deferral Date (being an Interest Payment Date in respect of which a Regulatory Deficiency Interest Deferral Event (which shall include, without limitation, (i) any event which causes any Solvency Capital Requirement or Minimum Capital Requirement to be breached and such breach is an event, or (ii) (where Insolvent Insurer Winding-up Condition is specified as applicable in the Final Terms or Pricing Supplement) where an Insolvent Insurer Winding-up has occurred and is continuing and the continuation of such Insolvent Insurer Winding-up is an event) has occurred and is continuing). |
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| Redemption Deferral – Tier 3 Notes: | The Issuer is required to defer any scheduled redemption of Tier 3 Notes (whether at maturity (if any) or if it has given notice of early redemption in the circumstances described below in Conditions 6(c), 6(d), 6(e) and 6(f)) if (i) a Regulatory Deficiency Redemption Deferral Event has occurred and is continuing or would occur if the Tier 3 Notes were redeemed, (ii) the Tier 3 Notes cannot be redeemed in compliance with the Solvency Condition, or (iii) (if then required) regulatory consent has not been obtained or redemption cannot be made in compliance with the Relevant Rules at such time. |
| Redemption Deferral – Tier 2 Notes: | The Issuer is required to defer any scheduled redemption of Tier 2 Notes (whether at maturity (if any) or if it has given notice of early redemption in the circumstances described below in Conditions 6(c), 6(d), 6(e) and 6(f)) if (i) a Regulatory Deficiency Redemption Deferral Event has occurred and is continuing or would occur if the Tier 2 Notes were redeemed, (ii) the Tier 2 Notes cannot be redeemed in compliance with the Solvency Condition, or (iii) (if then required) regulatory consent has not been obtained or redemption cannot be made in compliance with the Relevant Rules at such time. |
| Negative Pledge - Senior Notes only: | Applicable to Senior Notes only. See "Terms and Conditions of the Senior Notes – Negative Pledge". |
| Early Redemption, Variation or Substitution for Taxation Reasons, Capital Disqualification Event and |
Rating Methodology Event: The Tier 3 Notes may, subject as provided in Condition 6 of the relevant Terms and Conditions, be redeemed at their Optional Redemption Amount
together with any interest accrued to (but excluding) the date fixed for redemption and any accrued interest and any Arrears of Interest at the option of the Issuer on any Optional Redemption Date. In addition, upon the occurrence of a Tax Event, a Capital Disqualification Event, or a Rating Methodology Event (if Rating Methodology Call is specified) the Tier 3 Notes may be (i) substituted for, or their terms varied so that they become, Qualifying Tier 3 Securities or Rating Agency Compliant Securities, whichever is relevant; or (ii) redeemed in the case of (x) a Tax Event, at their outstanding principal amount, (y) a Capital Disqualification Event, at the Special Redemption Price or (z) a Rating Methodology Event, at the Special Redemption Price, together in each case with any accrued interest and any Arrears of Interest, all as more particularly described in "Terms and Conditions of the Tier 3 Notes – Redemption, Substitution, Variation, Purchase and Options".
The Tier 2 Notes may, subject as provided in Condition 6 of the relevant Terms and Conditions, be redeemed at their Optional Redemption Amount together with any interest accrued to (but excluding) the date fixed for redemption and any accrued interest and any Arrears of Interest at the option of the Issuer on any Optional Redemption Date. In addition, upon the occurrence of a Tax Event, a Capital Disqualification Event, or a Rating Methodology Event (if Rating Methodology Call is specified) the Tier 2 Notes may be (i) substituted for, or their terms varied so that they become, Qualifying Tier 2 Securities or Rating Agency Compliant Securities, whichever is relevant; or (ii) redeemed in the case of (x) a Tax Event, at their outstanding principal amount, (y) a Capital Disqualification Event, at the Special Redemption Price or (z) a Rating Methodology Event, at the Special Redemption Price, together in each case with any accrued interest and any Arrears of Interest, all as more particularly described in "Terms and Conditions of the Tier 2 Notes – Redemption, Substitution, Variation, Purchase and Options".
The Senior Notes may, subject as provided in Condition 6(c) of the Senior Notes, be redeemed at their Early Redemption Amount together with any interest accrued to (but excluding) the date fixed for redemption at the option of the Issuer if the Issuer becomes obliged to pay additional amounts in respect of withholding tax.
Withholding Tax: All payments of principal and interest in respect of the Notes will be made free and clear of withholding or deduction for or on account of UK taxes, unless required by law, in which case, subject to customary exceptions, such additional amounts will also be paid in respect of interest payments and (in the case of Senior Notes only) in respect of principal payments as shall result in receipt by the Noteholders and Couponholders of such amounts as would have been received by them had no withholding or deduction been required – see Terms and Conditions of the Senior Notes, the Tier 3 Notes and the Tier 2 Notes.
Listing: Applications have been made to list Notes (other than PR Exempt Notes) issued under the Programme for the period of 12 months from the date of this Prospectus on the Official List and to admit them to trading on the Market. PR Exempt Notes may be unlisted and/or may be admitted to trading on another market or stock exchange, as set out in the applicable Pricing Supplement.
Ratings: Tranches of Senior Notes, Dated Tier 3 Notes, Undated Tier 3 Notes, Dated Tier 2 Notes and Undated Tier 2 Notes may be rated or unrated. As at the date of this Prospectus, Moody's has assigned a rating of A2 to the Senior Notes, of A3to the Dated Tier 2 Notes, of A3to the Undated Tier 2 Notes, of A3 to Dated Tier 3 Notes and of A3 to Undated Tier 3 Notes. In addition, Fitch has assigned a rating of A to the Senior Notes, of BBB+ to the Dated Tier 2 Notes, of BBB+ to the Undated Tier 2 Notes, of BBB+ to Dated Tier 3 Notes and of BBB+ to Undated Tier 3 Notes. However, the ratings assigned by any ratings agency may change from time to time. Any rating applicable to any Tranche of Notes issued will be specified in the relevant Final Terms.
A rating is not a recommendation to buy, sell or hold s ecurities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency.
Selling Restrictions: U.S., EEA and UK Retail Investors, Public Offer under the Prospectus Regulation, UK, Republic of Italy, France, Hong Kong, Japan, Singapore, Switzerland, Australia and Canada. See "Subscription and Sale".
The Issuer is Category 2 for the purposes of Regulation S under the Securities Act.
The Notes will be issued in compliance with U.S. Treasury Regulation §1.163-5(c)(2)(i)(D) (or any successor rules in substantially the same form that are applicable for the purposes of Section 4701 of the U.S. Internal Revenue Code of 1986, as amended (the "Code")) ("TEFRA D") unless (i) the relevant Final Terms states that Notes are issued in compliance with U.S. Treasury Regulation §1.163-5(c)(2)(i)(C) (or any successor rules in substantially the same form that are applicable for the purposes of Section 4701 of the Code) ("TEFRA C") or (ii) the Notes are issued other than in compliance with TEFRA D or TEFRA C but in circumstances in which the Notes will not constitute "registration required obligations"under the United States Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA"), which circumstances will be referred to in the relevant Final Terms as a transaction to which TEFRA is not applicable.
The Issuer believes that the following factors, which are specific to the Issuer, may affect its ability to fulfil its obligations under Notes issued under the Programme. All of these factors are contingencies which may or may not occur.
In addition, risk factors which are specific to the Notes issued under the Programme are also described below.
The Issuer believes that the factors described below represent the material risks inherent in investing in Notes issued under the Programme as at the date of this Prospectus. If any or a combination of these risks actually occurs, the business, results of operations, financial condition and/or prospects of the Group could be materially and adversely affected, which could result in the Issuer being unable to pay interest, principal or other amounts on or in connection with any Notes or materially and adversely affect the trading price of any Notes.
Prospective investors should note that the risks relating to the Issuer and the Notes summarised in this section are the risks that the Issuer believe to be the most essential to an assessment by a prospective investor of whether to consider an investment in the Notes and the Issuers do not represent that the statements below regarding the risks ofinvesting in the Notes are exhaustive. As the risks which the Issuer faces relate to events and depend on circumstances that may or may not occur in the future, prospective investors should also read the detailed information set out elsewhere in this Prospectus (including any documents which are incorporated by reference herein) and reach their own views prior to making any investment decision.
Capitalised expressions used in this section have the definitions ascribed to them in the Terms and Conditions of the Senior Notes, the Terms and Conditions of the Tier 2 Notes and Terms and Conditions of the Tier 3 Notes, as appropriate, unless otherwise defined in this Prospectus.
There are many factors which affect the Group's ability to sell its products, including fiscal incentives, price and yields offered, financial strength and ratings, range of product lines and product quality, brand strength and name recognition, service levels to customers, fund management performance and historical bonus levels. In some of the Group's markets, it faces competitors that are comparable in size, scope and brand recognition. In some markets, competitors have greater financial resources or greater market share, offer a broader range of products, benefit from more advantageous tax treatments, or have higher bonus rates or claims paying ratios. In certain non-UK markets, the Group faces intense competition from local and international financial institutions, which may be more established in these markets and may have other competitive advantages, such as greater size and breadth, which may limit the Group's ability to be successful in these markets. In addition, local laws and regulations may be tailored to domestic providers, which may pose additional challenges to the Group's business.
The Group's principal competitors in the life market include many of the major financial services businesses including, in particular, Axa, Allianz, CNP, Generali, Legal & General, Unum and Zurich. The Group's principal competitors in the general insurance market include Axa, Allianz, Direct Line Insurance, Intact, RSA and Zurich. The Group's principal competitors in the savings and investment management market include BlackRock, Fidelity Investments, M&G, Schroders, Standard Life Aberdeen and State Street Global, as well as the fund management divisions of its principal competitors in the life market, and specialised investment platform businesses, such as Hargreaves Landsdown.
The Group also faces competitors who specialise in many of the niche markets in which it operates. The Group believes that competition will intensify across all regions in response to consumer demand, technological advances, the impact of consolidation, regulatory actions and other factors. The Group's ability to generate an appropriate return depends significantly upon its capacity to anticipate and respond appropriately to these competitive pressures.
As a normal part of their operating activities, various Group companies have given guarantees and options, including interest rate and investment return guarantees, in respect of certain long-terminsurance and fund management products. In providing these guarantees and options, the Group's capital position is sensitive to fluctuations in financial variables, including interest rates, property values and equity prices.
Interest rate guaranteed returns, such as those available on guaranteed annuity options, are sensitive to interest rates falling below the guaranteed level. Other guarantees, such as maturity value guarantees and guarantees in relation to minimum rates of return, are sensitive to fluctuations in the investment return below the level assumed when the guarantee was made.
On 19 March 2020, the Bank of England further reduced the base interest rate from 0.25 per cent. to 0.10 per cent. (following a first reduction from 0.75 per cent. to 0.25 per cent. on 10 March 2020) in response to the "economic shock" of the Novel Coronavirus ("COVID-19") outbreak and it is feasible further reductions could be made to the base interest rate. Periods of significant and sustained downturns in equity markets, increased equity volatility or reduced interest rates could result in an increase in the valuation of the future policy benefits or policyholder account balance liabilities associated with such products, resulting in a reduction to net income. The Group uses reinsurance and derivative instruments to mitigate some of the liability exposure and the volatility of net income associated with these liabilities, and while the Group believes that these and other actions mitigate the risks related to these bene fits, the Group remains liable for the guaranteed benefit in the event that reinsurers or derivative counterparties are unable or unwilling to pay.
In addition, the Group is subject to the risk that unanticipated policyholder behaviour or mortality, combined with adverse market events, produces economic losses beyond the scope of the risk management techniques employed. These, individually or collectively, may have a material adverse effect on the Group's results of operations, financial condition or liquidity.
Poor investment returns in the Group's investment management business, due to either general market conditions or underperformance (relative to competitors or to benchmarks) by funds or accounts that it manages, may adversely affect the Group's ability to retain existing assets and to attract new clients or additional assets from existing clients. The ability of the Group's investment teamto deliver strong investment performance depends in large part on its ability to identify appropriate investment opportunities in which to invest client assets. If the investment team for any of the Group's strategies is unable to identify sufficient appropriate investment opportunities for existing and new client assets on a timely basis, the investment performance of the strategy could be adversely affected. The risk that sufficient appropriate investment opportunities may be unavailable is influenced by a number of factors, including general market conditions. This could adversely affect the management and incentive fees that the Group earns on assets under management and its results of operations.
In operating securities lending of Group and third-party client assets, the Group's fund management operations must manage risks associated with (i) ensuring that the value of the collateral held against the securities on loan does not decline in value or become illiquid and that its nature and value complies with regulatory requirements and investment requirements; (ii) the potential that a borrower defaults or does not return a loaned security on a timely basis; and (iii) errors in the settlement of securities, daily mark-to-market valuations and collateral collection. The failure of the Group's fund management controls to mitigate these risks could result in financial losses for the Group and third -party clients that participate in its securities lending programmes. Variable market conditions may also have a material impact on liquidity and asset valuations, both having material adverse effects on the Group's results of operations and financial condition.
As a holding company, the Issuer has no substantial operations of its own. Its principal sources of funding are dividends from subsidiaries, shareholder-backed funds and any amounts that may be raised through the issuance of debt and commercial paper. The Group's insurance and fund management operations are generally conducted through direct and indirect subsidiaries. Certain subsidiaries have regulatory restrictions that may limit the payment of dividends and could prompt a decision to inject capital, which in some more adverse circumstances and over the longer-term could limit the Group's ability to pay dividends to shareholders. Once the UK's transition period following its exit from the European Union ("EU") has ended, such restrictions imposed by local EU supervisors on dividend payments to the Issuer from its subsidiaries, may increase, as the Issuer will be a non-EU parent. This could have a material adverse impact on the Group's business.
Any restrictions on the transferability and fungibility of capital between subsidiaries and the Issuer may result in restrictions to the Group's Solvency II own funds recognised to the extent these funds cannot be made available to the Issuer within nine months and thus adversely impact the Group's solvency position.
As a financial services group, the Group collects and processes significant amounts of sensitive personal data (including name, address, age, medical details, bank details and other personal data) from its customers, business contacts and employees. Despite the controls put in place, there remains a risk that this data could be stolen, lost, corrupted and/or misused as a result of an intentional or unintentional act by parties internal or external to the Group, including through the hacking of its IT systems and failure to adequately encrypt data. This could result in fines, the need to compensate
customers, the cost of remediation and a negative impact on the Group's reputation with the consequential impact on sales volumes, persistency levels, and third-party managed funds, and hence adversely impact its results of operations.
The Group is required to comply with data protection and privacy laws and industry standards in the UK and the countries of residence of the Group's customers. This includes compliance with the General Data Protection Regulation (EU) 2016/679) ("GDPR"). The GDPR increases the maximum levels of fines for compliance failures to 4 per cent. of the Group's global annual turnover.
There is a risk that data collected by the Group and its third-party service providers is not processed in accordance with notifications made to, or obligations imposed by, data subjects, regulators, or other counterparties or applicable law. Failure to operate effective data collection controls could potentially lead to regulatory censure, fines, reputational and financial costs as well as result in potential inaccurate rating of risks or overpayment of claims.
Large organisations, such as the Group, are increasingly becoming targets for cyber-crime, particularly if those organisations retain personal information about many people, and migrate some of their operations on t o digital platforms. The Group is exposed to the risk that the personal data it controls could be wrongfully accessed and/or used, whether by employees or other third parties, or otherwise lost or disclosed or processed in breach of data protection regulations. If the Group or any of the third-party service providers on which it relies fails to process, store or protect such personal data in a secure manner or if any such theft or loss of personal data were otherwise to occur, the Group could face liability under data protection laws. This could also result in damage to the Group's brand and reputation as well as the loss of new or repeat business, any of which could have a material adverse effect on the Group's business, results of operations, financial condition and prospects.
The Group's ability to exercise management control or influence over its partnership operations, its joint ven tures and its investment in them depends on the terms of the legal agreements. In particular, the relationships depend on the allocation of control among, and continued co-operation between, the participants.
The Group may also face financial or other exposure in the event that any of its partners fail to meet their obligations under their partnership agreements or encounter financial difficulty. Partnership agreements may also be terminated on certain dates or subject to certain conditions and could be subject to renewal on less favourable terms. In addition, a significant proportion of the Group's product distribution, such as bancassurance, is carried out through arrangements with third parties not controlled by the Group and is dependent upon the contin uation of these relationships. A temporary or permanent disruption to these distribution arrangements could affect the Group's financial condition. Some of these arrangements require the Group's third-party partners to participate in and provide capital to its joint venture, associate and subsidiary undertakings. The Group's partners may change their strategic priorities or encounter financial difficulties preventing them from providing the necessary capital to promote future growth.
In addition, the Group outsources certain customer service, technology and legacy policy administration functions to third parties and may do so increasingly in the future. If the Group does not effectively develop, implement and maintain its outsourcing strategy, third-party providers do not perform as anticipated or the Group experiences technological or other problems with a transition to or between such providers, the Group may not realise the full extent of productivity improvements or administration and cost efficiencies and, as a result, may experience operational difficulties, increased costs and a loss of business. In particular, failings by the Group outsource partners to perform outsourced functions, or to perform them to the required standards, may adversely affect th e Group's reputation and lead to the loss of customers and operating profit or to regulatory fines.
The Group's fund management operation depends on a number of key vendors for various fund administration, accounting, valuations, custody and transfer agentroles and other operational needs. The failure or inability to diversify sources for key services or the failure of any key vendors to fulfil their obligations could lead to operational issues for the Group and in certain products could result in financial losses for its clients and impact its results of operations.
As an international financial services organisation with a decentralised management structure, the Group relies to a considerable extent on the quality of local management in the countries in which it operates. The success of the Group operations is dependent, among other things, on its ability to attract and retain highly qualified professional employees. Competition for such key employees is intense. The Group's ability to attract and retain key employees is dependent on a number of factors, including prevailing market conditions, working environment and compensation packages offered by companies competing for the same talent. This may be affected by any change to the freedom of movement of UK and other EU citizens between the UK and other EU countries.
Further, heightened competition for talented and skilled employees with local experience, particularly in the emerging, high growth markets, may adversely impact the Group by limiting its ability to grow businesses as quickly as planned.
The Group operates both defined benefit and defined contribution staff pension schemes. In the UK, the Group operates three main pension schemes: the Aviva Staff Pension Scheme ("ASPS"), the Friends Provident Pension Scheme ("FPPS") and the RAC (2003) Pension Scheme. The defined benefit section of the ASPS was closed to new members in 2002 other than on an exceptional basis, and closed to future accruals for all existing members from 1 April 2011. The FPPS has been closed to new members since July 2007 and closed to active membership on 31 December 2012. The defined benefit section of the RAC (2003) Pension Scheme was also closed to new members and closed to future accrual in April 2011.
Closure of the defined benefit schemes removes some of the volatility associated with additional future accrual for active members.
There are still inherent funding risks associated with the defined benefit schemes. Events could result in a material reduction in the funding position of such schemes and may result in a materially increased deficit between the pension scheme's assets and liabilities. The factors that affect the scheme's position include: poor performance of pension fund investments; greater life expectancy than assumed; adverse changes in interest rates or inflation or discount rates; and other events occurring that increase the costs of past service benefits over the amo unts predicted in the actuarial assumptions. In the short-term, the funding position is inherently volatile due to movements in the market value of assets. Where a funding deficit or surplus arises, the position will be discussed with the scheme trustees t o agree appropriate actions. This may include a plan to fund the deficit over a period of years. Any surplus or deficit in the defined benefit pension schemes will affect shareholders' equity, although the IFRS position may diverge from the scheme funding position.
The UK pension schemes are subject to statutory requirements with regards to funding and other matters relating to the administration of the schemes. Compliance with these requirements is subject to regular review. A determination that the Group has failed to comply with applicable regulations could have an adverse impact on its results of operations or its relationship with members and the sponsoring employer, and adverse publicity.
The determination of the amount of allowances and impairments varies by investment type and is based upon the Group's periodic evaluation and assessment of known risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available and additional impairments may need to be taken or allowances provided for in the future. If the carrying value of an investment is greater than the recoverable amount, the carrying value is reduced through a charge to the income statement in the period of impairment. There can be no assurance that management has accurately assessed the level of impairments taken and allowances reflected in its financial statements.
The Group values its fair value securities using designated methodologies, estimations and assumptions. These securities, which are reported at fair value on the consolidated statement of financial position, represent the majority of the Group's total cash and invested assets. The Group has categorised the measurement basis for assets carried at fair value into a 'fair value hierarchy' in accordance with the valuation inputs and consistent with IFRS 13: Fair Value Measurement. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1); the middle priority to fair values other than quoted prices based on observable market information (Level 2); and the lowest priority to unobservable inputs that reflect the assumptions that the Group considers market participants would normally use (Level 3). The majority of the Group's financial assets are valued based on quoted market information (Level 1) or observable market data (Level 2). At 31 December 2019, 17 per cent. of total financial investments, loans and investment properties at fair value were classified as Level 3, amounting to £65,496 million. Where estimates were used for inputs to Level 3 fair values, these were based on a combination of independent third-party evidence and internally developed models, intended to be calibrated to market observable data where possible.
An asset or liability's classification within the fair value hierarchy is based on the lowest level of significant input to the Group's valuation.
Goodwill represents the excess of the amounts paid to acquire subsidiaries and other businesses over the fair value of their net assets at the date of acquisition. The Group tests goodwill and intangible assets with indefinite useful lives at least annually for impairment or when circumstances or events indicate there may be uncertainty over this value. The Group tests intangibles with finite lives when circumstances or events indicate there may be uncertainty over this value. For impairment testing, goodwill and intangibles have been allocated to cash-generating units by geographical reporting unit and business segment. The fair value of the reporting unit is impacted by the performance of the business. Goodwill, negative unallocated divisible surplus and indefinite life intangibles are written down for impairment where the recoverable amount is insufficient to support its carrying value. Such write downs could have a material adverse effect on the Group's results of operations or financial condition.
A significant proportion of the Group's product sales are unit-linked contracts, where product benefit is linked to the prices of underlying unit funds. While comprehensive controls are in place, there is a risk of error in the calculation of the prices of these funds due to human error in data entry, IT-related issues or other causes. Additionally, it is possible that policy charges which are deducted from these contracts are taken incorrectly, or the methodology is subsequently challenged by policyholders or regulators and changed retrospectively. Any of these can give rise to compensation payments to customers. Controls are in place to mitigate these risks, but errors could give rise to future liabilities. Payments due to errors or compensation may negatively impact the Group's results of operations or financial condition.
As part of the Group's move to a more simplified structure, a number of business disposals, operating entity mergers and operational restructures have taken place, and may continue to occur in the future. This includes the potential sale of a number of non-core businesses. These changes are intended to reduce the operational costs of the Group and allow resources to be re-deployed in more capital efficient businesses. There is a risk that these expected benefits may not be realised. These changes may reduce operating profit in the short-term and will lead to changes in the geographical and product risk profile of the Group. The execution risk including the risks relating to securing the necessary regulatory approvals, could result in the failure to achieve cost savings, the loss of key staff, and disruption to core business activities and governance structures which could have a material adverse effect on the Group's business, results of operations and financial condition.
The proceeds received from disposals may not reflect the values that management believes are achievable and/or may cause substantial accounting losses (particularly if the disposals are done in difficult market conditions), each of which may result in the Group's failure to realise the anticipated benefits and gains from any such disposal. In addition, disposals of businesses, which may be cash generative and profitable, may adversely affect the Group's short-term cash flows until the medium to long-term strategic benefits of such disposals are realised, as well as gives rise to a corresponding potential impact on capital requirements and liquidity. Preparation of businesses for disposal, and the disposal process more generally, may divert management time and attention away from the operation of the business in the ordinary course and may be disruptive to the business. The Group retains a residual exposure in respect of disposed businesses as a result of any representations, warranties or indemnities provided.
Execution risk is inherent in the completion of all strategic transactions. Such risks include uncertainty in relation to obtaining the required regulatory approvals on satisfactory terms for the change of control envisaged by such transactions. Such execution risk gives rise to a corresponding potential impact on capital requirements and liquidity.
The Group's business is dependent on processing a large number of complex transactions across numerous and diverse products. Furthermore, the long-term nature of the majority of the Group's business means that accurate records have to be maintained for significant periods.
The Group's systems and processes on which it is dependent to serve its customers are designed to identify appropriately and address the operational risks associated with its activities. However, they may nonetheless fail due to IT malfunctions, human error, intentional disruption through the hacking of the Group's IT systems, phishing attacks, planting of malware by third parties or by other means, business interruptions, non-performance by third parties or other external events and failure of disaster recovery arrangements. This could disrupt business operations resulting in material reputational damage and the loss of customers, and have a consequent material adverse effect on the Group's results of operations and financial condition. Although the Group has taken steps to upgrade systems and processes to reduce these operational risks, the Group cannot anticipate the details or timing of all possible operational and systems failures which may adversely impact its business. The increasing sophistication of cyber criminals and the importance of digital interaction with the Group's customers to its strategy means the inherent risk of failure of its operations due to the malicious acts of third parties is expected to increase.
The Group's businesses are exposed to risk from potential non-compliance with policies, employee misconduct or negligence and fraud, which could result in regulatory sanctions and serious reputational or financial harm. In recent years, a number of multinational financial institutions have suffered material losses due to the actions of 'rogue traders' or other employees. Though the Group takes precautions to prevent and detect this activity, it is not always possible to completely deter employee misconduct, and this risk could impact the Group's business and reputation .
The Group has in place risk management policies, procedures and assessment methods to identify, assess and control risks to avoid or limit potential losses or liabilities. However, such policies, procedures and assessment methods may not be fully effective in identifying and mitigating the risk exposure of such businesses in all market environments or against all types of risk. Unanticipated or incorrectly quantified risk exposures and/or inadequate or incorrect responses to these risk exposures could result in a material adverse effect on the Group's business, results of operations and/or financial condition.
The Group employs a range of risk mitigation strategies including the use of equity, interest rate and credit derivatives and reinsurance arrangements to reduce market, credit and insurance risks. A range of different modelling approaches are used to derive and evaluate the strategies adopted. The breakdown of the ass umptions used in these modelling approaches, which may occur during market dislocations, could cause these risk mitigation strategies to be less effective than anticipated and thereby adversely affect the Group's financial condition and results of operatio ns.
The Group currently uses the reinsurance markets primarily to limit its risk, to support growth and to manage its capital more efficiently. The Group is exposed to concentrations of risk with individual reinsurers due to the nature of the reinsurance market and the restricted range of reinsurers that have acceptable credit ratings. The Group is also exposed to any systemic failure in the reinsurance market. The Group operates a policy to manage its reinsurance counterparty exposures, by limiting the reinsurers that may be used and applying strict limits to each reinsurer. Reinsurance exposures are aggregated with other exposures to ensure that the overall counterparty risk is within the Group's risk appetite. The Group's asset and liability management and risk functions have an active monitoring role with escalation to the Chief Financial Officer, the Group's asset liability committee and the Board's risk committee as appropriate.
Reductions in risk appetite among reinsurers may result in changes in price or willingness to reinsure certain risks, which could have a material adverse effect on the Group's results of operations or financial condition. If reinsurers do not offer to renew their products and services, in whole or in part, for any reason, there is a risk that the Group may be unable to procure replacement cover for any reinsurance agreements terminated at rates equivalent to those of the terminated cover, or at all, and the Group may be exposed to un-reinsured losses during any interim period between termination of the existing agreements and the start of any replacement cover.
While reinsurance makes the assuming reinsurer liable to the Group to the extent of the risk ceded, it does not discharge the Group from its primary obligation to pay under an insurance policy for losses incurred. Accordingly, the Group remains primarily liable for the reinsured risks without regard to whether the reinsurer meets its reinsurance obligations to the Group. Therefore, the Group is exposed to disputes on, and defects in, contracts with its reinsurers, challenges to claims asserted against reinsurers and the possibility of default by its reinsurers. The insolvency of any reinsurers or their inability or refusal to pay claims under the terms of any of their agreements with the Group could therefore significantly increase the Group's exposure to losses and have a material adverse effect on the Group's financial condition and results of operations. Collectability of reinsurance is largely a function of the solvency of reinsurers. Significant reinsurance purchases are reviewed annually by the Group to verify that the levels of protection being bought reflect any developments in exposure and its risk appetite.
Key IT initiatives may not deliver what is required either on time or within budget or provide the performance levels required to support the current and future needs of the business. Significant resources are devoted to maintaining and developing IT systems to keep pace with developments within the insurance and fund management industries, reduce the risk of error and to maintain service levels and availability at acceptable levels. Failure to do so could result in the inability to gather information for pricing, underwriting and reserving, to attract and retain customers or meet regulatory requirements or only to do so at excessive cost. Therefore this could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.
In past years, the Group has completed a number of acquisitions and the Group may undertake further acquisitions in the future. Growth by acquisition involves risks that could adversely affect the Group's operating results, including the substantial amount of management time and other resources that may be diverted from operations to pursue and complete acquisitions, or risks of undisclosed liabilities or integration or separation issues. The integration of any future acquisition may not be successful or in line with the Group's expectations and any acquired businesses may fail to achieve, in the near or long term, the financial results projected or the strategic objectives of the relevant acquisition (such as cost savings or synergies) and, once acquired, may continue to divert further management attention and resources or necessitate changes in Group strategy. The inability to realise expected benefits fromsuch transactions may adversely affect the Group's results of operations.
The Group's strategy, which may be revised from time to time, may involve carrying on business in new markets, developing capabilities to carry out new business activities, expanding or reducing the scope of certain types of business activity or products and reorganising the Group in a manner which is appropriate for such business development changes, taking into account legal, regulatory, operational, capital and other requirements. The implementation of any strategy, changes in strategy, adoption of any new strategy, Group reorganisation and/or entry into new markets could
entail significant changes in the Group's business which may entail higher levels of risk or could adversely affect the results of operations, the financial condition and/or the credit and financial strength ratings of the Group.
The Group may be unable to execute, or may encounter difficulties or delays in successfully executing, its business and strategic goals which are subject to the risks set out herein and other factors that are currently unforeseen and which may be beyond its control. Failure to achieve any or all strategic goals, or the encounter of undue delay or unforeseen costs in implementing such goals, could adversely affect the Group's results of operations and financial condition, as well as its reputation and standing in the marketplace.
A rating downgrade, or the perceived potential for such a downgrade, of the Group or any of its rated insurance subsidiaries may, among other things, materially increase the number of policy surrenders and withdrawals by policyholders of cash values from their policies, as ratings principally inform public confidence in the Group's products. The outcome of such activities may be cash payments requiring the sale of invested assets, including illiquid assets, at a price that may result in realised investment losses. These cash payments to policyholders would result in a decrease in total invested assets and a decrease in net income. Among other things, early withdrawals may also cause the Group to accelerate amortisation of policy acquisition costs, which would reduce net income. A rating downgrade may also impact sales volumes, particularly in Canada, where there is more focus by brokers on ratings when evaluating similar products. The ratings provided by AM Best and S&P are considered to be the most important for distribution in Canada, and a downgrade could lead to a significant loss of sales and the termination of some distribution agreements. A significant rating downgrade may also adversely impact the Group by increasing the Group's cost of borrowing or limiting its access to some forms of financing.
The Group's results are, to a certain extent, dependent on the strength of its brand and reputation. While the Group is well recognised, it is vulnerable to adverse market and customer perception. The Group operates in an industry where integrity, customer trust and confidence are paramount. The Group is exposed to the risk that litigation, employee misconduct, operational failures, the outcome of regulatory investigations, press speculation and negative publicity, disclosure of confidential client information, inadequate services, amongst others, whether true or not, could impact its brand or reputation. The Group's brand and reputation could also be affected if products or services recommended by it (or any of its intermediaries) do not perform as expected (whether or not the expectations are realistic) or in line with the customers' expectations for the product range. Such events, which cannot be readily controlled, could adversely affect its results of operations and financial condition.
The Group derives significant revenue from management fees, the quantum of which is based on the value of assets under management. A proportion of the Group's funds permit investors or customers to reduce the aggregate amount of their investment with no, or only short periods of, notice, or to withdraw altogether from such portfolios or contracts. If interest rates rise, stock markets decline or the Group's investment performance underperforms, the pace of redemptions and withdrawals could accelerate. A significant or systemic withdrawal of assets under management would result in lower management fees and therefore lower revenues and, depending on the extent of such withdrawals, could impact the Group's results of operations and financial condition.
Redemptions and withdrawals of investment assets may also be requested more quickly than assets can be sold to meet such redemptions and withdrawals, or market volatility and illiquidity may make it difficult to assign values to assets, especially in respect of funds holding relatively illiquid assets such as property. In such circumstances, the Group may be forced to suspend customer redemptions or take other mitigating measures. Although the Group attempts to maintain the pricing of investment funds and sufficient liquidity to meet customer redemptions, there have been examples in recent years for the Group and other asset managers where this has not always been possible, particularly during periods of economic or political uncertainty. In such cases, it may be (and has previously been) necessary or prudent for the Group temporarily to suspend trading in the affected fund or funds. Such temporary suspensions could impact the Group's reputation, financial condition and results of operations.
The Group's primary brand in the UK ("Aviva") is a registered trade mark in the UK and elsewhere. The Group own and trade under other registered or pending trade marks in the UK and elsewhere (such as Friends Provident, General Accident and Quotemehappy), including Community trademarks having effect in the entire EU. The Group relies on a combination of contractual rights, copyright and trademark laws to establish and protect its intellectual property. Although the Group uses a broad range of measures to protect its intellectual property rights, third parties may infringe or misappropriate its intellectual property. The loss of intellectual property protection or th e inability to secure or enforce the protection of the Group's intellectual property assets could have a material adverse effect on its business and its ability to compete.
Third parties may have, or may eventually be issued, patents or other protections that could be infringed by the Group's products, methods, processes or services or could limit its ability to offer certain product features. In recent years, there has been increasing intellectual property litigation in the financial services industry challenging, among other things, product designs and business processes. If a third party were to successfully assert an intellectual property infringement claim against the Group, or if the Group were otherwise precluded from offering certain features or designs, or utilising certain processes, it could have a material effect on its business, results of operations and financial condition .
The Group's life insurance companies are required to make a number of assumptions when pricing, underwriting and reserving in relation to the business concerned. These assumptions are based on a number of factors including market data and historical experience, estimates and individual expert judgements in respect of known or potential future changes as well as statistical projections of what the Group believes will be the costs and cash flows of its assets and liabilities. Pricing and reserving factors include the mortality and morbidity rates of the Group's customers (the proportion of customers dying or falling sick or recovering from illness), the development of corporate bond yields and defaults, equity and property market values, interest rates, persistency rates (the proportion of customers retaining existing policies and continuing to pay premiums up to their maturity dates), the exercise by customers of options included within their policies and future levels of expenses. By their nature, these assumptions may prove to be incorrect.
When establishing their liabilities, the Group's life insurance companies allow for changes in the assumptions made, monitor their experience against the actuarial assumptions used and assess the information gathered to refine their longterm assumptions, together with taking actual claims experience into account. However, it is not possible to determine precisely the total amounts that will ultimately be paid under the policies written by the business as amounts may vary from estimates. Changes in assumptions may also lead to changes in the level of capital required to be maintained, meaning that the Group may need to increase the amount of the Group's reserves. This could have a material adverse impact on the Group's value, the results of its operations and financial condition.
Additionally, the Group's management of the general insurance business requires the general insurance companies to make a number of assumptions in relation to the business written. These assumptions include the costs of writing the business and settling claims, and the frequency and severity of claims. The assumptions may turn out to be incorrect, thereby adversely impacting on the Group's profit. Additionally, man-made disasters, including accidents and intentional events, are particularly difficult to predict with any degree of accuracy. These would also have an adverse impact on the Group's profit due to higher than expected claims.
Furthermore, outstanding claims provisions for the general insurance business are based on the best-estimate ultimate cost of all claims incurred but not settled at a given date, whether reported or not, together with related claims handling costs. Any provisions for re-opened claims are also included. A range of methods, including stochastic projections, may be used to determine these provisions. Underlying these methods are a number of explicit or implicit assumptions relating to the expected settlement amount and settlement pattern of claims. If the assumptions underlying the reserving basis were to prove incorrect, the Group might have to increase the amount of the general insurance provisions, which would adversely impact its financial condition or results of operations.
The Group incurs significant costs in connection with acquiring new and renewal business. Those costs that vary with and are driven by the production of new and renewal business are deferred and referred to as DAC. The recovery of DAC is dependent upon the future expected profitability of the related business. The amount of future profit or margin is dependent principally on expected investment returns in excess of the amounts credited to policyholders, mortality, morbidity, persistency, general insurance underwriting profit and expenses to administer the business. Of these factors, investment margins and general insurance underwriting profit are most likely to impact the rate of amortisation of such costs. The aforementioned factors enter into management's estimates of gross profit or margins, which generally are used to amortise such costs. If the estimates of gross profit or margins were overstated, then the amortisation of such costs would be accelerated in the period the actual amount is known and would result in a charge to income. Significant or sustained equity market declines could result in an acceleration of amortisation of the DAC related to unit-linked business, resulting in a charge to income. Such adjustments could have a material adverse effect on the results of operations or financial condition.
AVIF reflects the estimated present value of future profit that will emerge over the remaining life of certain in-force contracts in a life insurance company, acquired either directly or through the purchase of a subsidiary, associate or joint venture, and represents the portion of the purchase price that is allocated to the value of the right to receive future cash flows from the insurance and investment contracts in-force at the acquisition date. AVIF is based on actuarially determined projections. Actual experience may vary from the projections. Revisions to estimates result in changes to the amounts expensed in the reporting period in which the revisions are made and could result in impairment and a charge to net income. Such adjustments could have an adverse effect on the Group's results of operations or financial condition.
On 11 March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic. Governments in affected areas have imposed a number of measures designed to contain the outbreak, including business closures, travel restrictions, stay at home orders and prohibition of gatherings and events. The spread of COVID-19 has resulted in a sharpeconomic downturn in countries in which the Group operates and the global economy more widely, as well as causing increased volatility and declines in financial markets. If the pandemic is prolonged, or further diseases emerge that give rise to similar effects, the adverse impact on the global economy could be deepened and result in further declines in financial markets.
As an insurer,the Group is impacted by the COVID-19 pandemic through the its general insurance products primarily as a result of adverse claims experience arising from disruption to business and travel insured by the Group; its life protection products as a result of increased mortality;savings products as a result of potentially lower future premiums and higher future outflows; and income protection, critical illness and health insurance products as a result of increased morbidity. The COVID-19 pandemic may also result in increased operational risk through enforced remote working, staff absences for sickness and childcare, market volatility and through the Group's outsourcing arrangements impacting the quality and continuity of service to customers and the reputation of the Group, as well as increasing the Group's exposureto risks relating to extensive working from home including cyber, data loss and occupational health. As a result the business, results of operations, corporate reputation and financial condition of the Group could be adversely impacted for a substantial period of time. On 8 April 2020, the Issuer announced that, in light of the significant uncertainties presented by the COVID-19 pandemic, the Board of Directors of the Issuer had agreed to withdraw its recommendation to pay the 2019 final dividend to ordinary shareholders in June 2020. The Board considers that it is prudent to suspend dividend payments at this time, and expects to reconsider any distributions to ordinary shareholders in the fourth quarter of 2020.
Interest rate risk could impact the Group in the following ways:
The low interest rate environment, including negative interest rates, in a number of markets around the world has resulted in the Group's current reinvestment yields being lower than the overall current portfolio yield, primarily for investments in fixed income securities. Interest rates may remain below historical averages for an extended period of time and may reduce further. If this were to happen, investing activity would decrease the portfolio yield, as long as market yields remain below the current portfolio level, resulting in lower net investment income in future periods and adversely impacting the Group's profitability.
Conversely, any significant increases in market interest rates could increas e surrenders of life insurance policies and contracts, as policyholders seek higher guaranteed minimum and overall returns. If this were to happen, the Group would need access to cash, which may involve liquidating fixed maturing investments, thereby causing a loss to the Group's realised investments and overall profitability. Premature withdrawals may also cause the Group to accelerate amortisation of policy acquisition costs, reducing its net income. This could arise in the future if the accommodative monetary policies of central banks, in particular the U.S. Federal Reserve, European Central Bank and the Bank of England, are wound down or stopped.
Interest rates are highly sensitive to many factors beyond the Group's control, including, without limitation, governmental, monetary and tax policies, domestic and international economic and political considerations, inflationary factors, fiscal deficits, trade surpluses or deficits and, regulatory requirements. The Group's exposure to interest rate risk relates primarily to the market price and cash flow variability of assets and liabilities associated with changes in interest rates.
Some of the Group's products (such as traditional participating products) expose the Group to the risk that changes in interest rates will reduce its 'spread' relative to the earnable rate of return on investments intended to support the Group's contractual obligationsthereunder. The Group's spread is a key component of its net income. If interest rates decrease or remain at low levels, the Group may be forced to reinvest proceeds from investments at lower yields, reducing its investment return. Moreover, borrowers may prepay or redeem their fixed-income securities, commercial mortgages and mortgage-backed securities in the Group's investment portfolio with greater frequency in order to
borrow at lower market rates which increases this risk. Lowering interest crediting or policyholder bonus rates can help offset decreases in investment margins on some products. However, the Group's ability to lower these rates could be limited by competition or by contractually guaranteed minimum rates and may not match the timing or magnitude of changes in asset yields. Hence, the Group's spread could decrease or potentially become negative.
The Group's expectations for future spreads is a key component in the amortisation of policy acquisition costs and significantly lower spreads may cause the Group to accelerate amortisation, thereby reducing net income in the affected reporting period. During periods of declining interest rates, the guarantees within existing life insurance and annuity products may be more attractive to consumers, resulting in increased premium payments on pro ducts with flexible premium features, and a higher percentage of insurance policies remaining in force from year to year, during a period when the Group's new investments carry lower returns.
The Group's mitigation efforts are designed to ensure the maintenance of an investment portfolio with diversified maturities with a weighted average duration approximate to the duration of its policyholder liability cash flow profile. Notwithstanding these efforts, the Group's ability to provide matched cash flows remains uncertain, in particular in jurisdictions with less developed bond markets and in certain markets where regulated surrender value or maturity values are set to the prevailing interest rate at the time. This results in a residual asset/liability mismatch risk that can be managed but not eliminated. In addition, the Group's estimate of the liability cash flow profile may be inaccurate for other reasons, such as varying mortality, morbidity or general insurance claims, and the Group may be forced to liquidate investments prior to maturity at a loss in order to cover the liability. Such a loss could have a material adverse effect on the Group's results of operations and financial condition.
In a speech on 27 July 2017, the FCA indicated that it intends to cease sustaining LIBOR after the end of 2021, following a transition period to one or more alternative reference rates. The impact of any such reforms is unpredictable, including any potential impact on EURIBOR, other relevant reference rates andbenchmark-based instruments. It is also unpredictable what alternative reference rates may develop. The consequences for the calculation of the Group's insurance liabilities and its investment portfolio, and consequently, its business are therefore uncertain.
The Group's results of operations are materially affected by actual and perceived uncertainty in the worldwide financial markets and macroeconomic conditions generally. A wide variety of factors, including concerns over slowing growth, high sovereign debt within, and to a lesser degree outside, the eurozone, the stability and solvency of financial institutions, longer-term low interest rates in developed markets (or a sudden reversal of these), inflationary threats as well as geopolitical issues in, and emanating from, the Middle East (in particular Syria), Russia and neighbouring states and North Korea, as well as a deterioration in trade relations between the U.S. and China and the EU resulting in increased import tariffs, and other trade restrictions and sanctions following U.S. withdrawal from the 2015 Iran nuclear deal framework, have contributed to increased volatility in the financial markets in recent years and have diminished growth expectations for the global economy. Global fixed income markets continue to experience periods of both volatility and limited market liquidity, which have affected a broad range of asset classes and sectors.
Factors relating to general economic conditions (such as consumer spending, business investment, government spending and high sovereign debt levels, exchange rates and commodity prices), uncertainty over the outcome and effects of the UK-EU free trade agreement negotiations, the outcome of U.S. Presidential and Congressional elections, the impact and spread of COVID-19, the volatility and strength of both debt and equity markets, and inflation, all affect the profitability of the Group. In a sustained economic phase of low growth and high public debt, characterised by higher unemployment, lower household income, lower corporate earnings, lower business investment and lower consumer spending, the demand for financial and insurance products could be adversely affected. In addition, the Grou p may experience an elevated incidence of claims or surrenders of policies or claims of misselling. Any potential material adverse effect on the Group will also be dependent upon customer behaviour and confidence.
As a result of these market exposures, the Group's financial position and results of operations may be subject to significant volatility and negative effects, particularly if such effects are prolonged. Such effects may include, inter alia : (i) a general reduction in business activity and market volumes which affects fees, commissions and margins from customer driven transactions and revenues, and from sales of insurance products; (ii) market downturns which are likely to reduce the level and valuations of assets managed on behalf of clients, thereby reducing asset based and performance based fees; (iii) reduced market liquidity, limiting trading and arbitrage opportunities and presenting impediments for managing risks, impacting both trading income and performance based fees; (iv) a reduced value in assets held for the Group's own account if trading positions fall in value; (v) increased impairments and defaults on credit exposures and on trading and investment positions, which losses may be exacerbated by falling collateral values; (vi) increased collateral requirements under derivative and other financial instruments; (vii) increased costs of hedging against market risks such as equity or interest rate exposure; (viii) pressure to reduce equity and/or debt investments or maintain additional capital in respect of such holdings; (ix) an increase in technical provisions and capital requirements in
response to market related stress tests; and (x) a requirement to hold a larger proportion of liquid assets in order to offset the impact of a reduction in market liquidity on a company's ability to meet payment obligations.
The interdependence of global financial institutions means that the failure of a sufficiently large and influential financial institution could materially disrupt global securities markets or clearance and settlement systems in the markets. This could cause severe market decline or volatility. Such a failure could also lead to a chain of defaults by counterparties that could materially adversely affect the Group. This risk, known as 'systemic risk', could adversely impact the Group's future product sales as a result of reduced confidence in the financial services industry. It could also adversely impact the Group's results because of market declines and write downs of assets.
Uncertainty over the fiscal policies of the Italian and other European governments (especially following the widespread impact of COVID-19 outbreaks in Italy and other countries, resulting in country-wide 'lockdowns' in March 2020), their consequences, and the response of the EU may trigger a re-emergence of a sovereign debt crisis in highly-indebted EU member states, in particular Italy and Greece, disrupting equity and fixed income markets, and result in volatile bond yields on the sovereign debt of EU members.
There are concerns over the solvency of some European banks, particularly in Italy where their position is worsened by the weak position of the government, and their resilience to any deterioration in macroeconomic conditions. Possible measures which could be taken by governments to restore the solvency of their banks may breach EU rules or significantly increase sovereign indebtedness, and act as a trigger for a re-emergence of the sovereign debt and banking crisis in Europe, all of which could have a material adverse effect on the Group's financial condition and results of operations.
The issues arising out of a re-emergence of the sovereign debt crisis may transcend Europe, cause investors to lose confidence in the safety and soundness of European financial institutions and the stability of European economies, and likewise affect UK and U.S. based financial institutions, the stability of the global financial markets and any economic recovery.
If an EU member state were to default on its obligations or to seek to leave the eurozone, or if the eurozone were broken up entirely, the impact on the financial and currency markets would be significant and could impact materially all financial institutions, including the Group.
Past political negotiations in the U.S. over raising the U.S. debt ceiling indicate that the risks associated with record levels of government debt and sovereign debt default and the potential adverse impact on global markets which could result from this is not limited to the eurozone. Such events could adversely affect the Group's business, results of operations, financial condition and liquidity.
The Group's exposure to credit spreads primarily relates to market price variability associated with changes in credit spreads in its investment portfolio. These are largely held to maturity, so although the Group's financial statements reflect the market value of assets, its priority remains the management of assets and liabilities over the longer-term. Credit spread moves may be caused by changes in market perceptions of the creditworthiness of a company, or from market factors such as the market's risk appetite and liquidity. A widening of credit spreads will generally reduce the value of fixed income securities the Group holds. Conversely, credit spread tightening will generally increase the value of fixed income securities the Group holds. It can be difficult to value certain of the Group's securities if trading becomes less liquid. Accordingly, valuations of investments may include assumptions or estimates t hat may have significant period-to-period changes that could have a material adverse effect on the Group's consolidated results of operations or financial condition. Downturns in the net unrealised value of the Group's investment portfolio may also have a material adverse effect on the Group's Solvency II balance sheet surplus, despite the Group setting aside significant capital for credit risk.
The Group chooses to take and manage credit risk through investment assets partly to increase returns to policyholders whose policies the assets back, and partly to optimise the return for shareholders.
The Group has significant exposure to third parties that owe it money, securities or other assets who may not perform under their payment obligations. These parties include private sector and government (or governmen t-backed) issuers whose debt securities the Group holds in its investment portfolios (including mortgage -backed, asset-backed, government bonds and other types of securities), borrowers under residential and commercial mortgages and other loans, re-insurers to which the Group has ceded insurance risks, customers, trading counterparties, and counterparties under swap and other derivative contracts. The Group also executes transactions with other counterparties in the
financial services industry, including brokers and dealers, commercial and investment banks, hedge funds and other investment funds, insurance groups and institutions. Many of these transactions expose the Group to the risk of counterparty default.
In addition, with respect to secured transactions, the Group's credit risk may be increased when the collateral held by it cannot be realised or is liquidated at prices insufficient to recover the full amount of the loan or other value due. The Group also has exposure to financial institutions in the form of unsecured debt instruments and derivative transactions. Such losses or impairments to the carrying value of these assets could materially and adversely affect the Group's financial condition and results of operations.
The Group uses reinsurance and hedging programmes to hedge various risks, including certain guaranteed minimum benefits contained in many of its long-term insurance and fund management products. These programmes cannot eliminate all of the risks and no assurance can be given as to the extent to which such programmes will be effective in reducing such risks. The Group enters into a variety of derivative instruments, including options, forwards, interest rate and currency swaps, with a number of counterparties. The Group's obligations und er its fund management and life products are not changed by its hedging activities and it remains primarily liable for its obligations, even if its derivative counterparties default. Defaults by such counterparties could have a material adverse effect on the Group's financial condition, results of operations and profitability (to the extent any collateral mechanism, if such a mechanism is in place, also fails).
The Group is also susceptible to an adverse financial outcome from a change in third-party credit standing. As well as having a potential impact on asset values and, as a result, the Group's financial condition and results of operations, credit rating movements can also impact its solvency position where regulatory capital requirements are linked to t he credit rating of the investments held. Such movements in the credit standing of third parties could impact on the Group's solvency, profitability and shareholders' equity.
The Group is subject to inflation risk through its holdings of fixed interest and other investments and as a result of the potential for the cost of claims and expenses to rise faster than anticipated in the Group's pricing or reserving. Changes in inflation could also affect the value perceived to be offered by the Group's policies and so adversely affect persistency levels.
The Group is subject to equity and property price risk due to holdings of equities and investment properties in a variety of locations worldwide. Downturns in equity markets will depress equity prices and have a negative impact on the Group's capital position in that unrealised losses in its net investment portfolio will increase, and its defined benefit pension scheme surplus/deficit will reduce/increase as the market value of scheme assets invested in equities decreases.
Downturns and volatility in equity markets can have a material adverse effect on the revenues and returns from the Group's unit-linked, participating and fund management business. The unit-linked and fund management business depends on fees related primarily to the value of assets under management and would therefore be reduced by declines in equity and property markets. Profit could also be reduced as a result of current investors withdrawing funds or reducing their rates of on-going investment with the Group's fund management companies, or switching to lower risk funds generating lower income, or as a result of the Group's fund management companies failing to attract funds from new investors. Similarly, bonuses credited to participating policyholders will reduce following declines in equity and property markets and this will generally also lead to reductions in transfers to shareholders.
Downturns in equity markets may also have a material adverse effect on the Group's regulatory capital surplus as measured under the Solvency II Directive.
The Group provides certain guarantees within some of its products that protect policyholders against significant downturns in the equity markets. In volatile or declining equity market conditions, the Group may need to increase liabilities for future policy benefits and policyholder account balances, negatively affecting net income. For property investment, the Group is subject to counterparty, valuation and liquidity risks. These investments may be adversely affected by weakness in property markets and increased mortgage delinquencies. The Group is also subject to property risk indirectly in its investments in residential mortgage-backed securities and commercial mortgage-backed securities and covered bonds. There is the risk that the underlying collateral may fall in value causing the investment in securities to fall in value. The markets for these property investments and instruments can become illiquid, and issues relating to counterparty credit ratings and other factors may increase pricing and valuation uncertainties. The Group is also indirectly exposed to property risk through its UK commercial finance lending. The fall in prices of any such investments due to such risks could adversely affect the Group's results of operations, shareholders' equity and financial condition.
The Group operates internationally and is exposed to foreign currency exchange risk arising from fluctuations in exchange rates of various currencies. For the year ended 31 December 2019, 58 per cent. of the Group's premium income from continuing operations arose in currencies other than sterling, and its net assets were denominated in a variety of currencies, of which the largest are the euro, sterling and Canadian dollar. In managing the Group's foreign currency exposures, it does not hedge revenues as these are substantially retained locally to support the growth of the business and meet local regulatory and market requirements. Nevertheless, the effect of exchange rate fluctuations on local operating results could lead to significant fluctuations in the Group's consolidated financial statements upon translation of the results into sterling. Although the Group takes certain actions to address this risk, foreign currency exchange rate fluctuation could materially adversely affect its reported results due to unhedged positions or the failure of hedges to effectively offset the impact of the foreign currency exchange rate fluctuation. A ny adverse foreign currency exchange fluctuation may also have a material adverse effect on the Group's regulatory capital surplus based on the Solvency II Directive.
At Group level, the Group needs some of its invested assets to be liquid to pay its operating expenses, taxes, interest on its debt, dividends on its capital stock and to repay maturing debt. At an operational level the Group also needs liquidity and sufficient cash flow sources to meet insurance claims. Without sufficient liquidity, the Group could be forced to curtail its operations and the Group's business would suffer. The principal sources of the Group's liquidity are insurance premiums, annuity considerations, deposit funds and cash flow from its investment portfolio and assets, consistin g mainly of cash or assets that are readily convertible into cash. Sources of liquidity in normal markets also include a variety of short and long-term instruments, including repurchase agreements, commercial paper, medium and long-term debt, junior subordinated debt, securities, capital securities and stockholders' equity.
The Group holds certain investments that may lack liquidity such as commercial mortgages, real estate, privately placed fixed-maturity securities, and unlisted equities. The valuations of such assets are based on inputs which are not directly observable in the market. The inputs used reflect the assumptions that the Group considers market participants would normally use based on a combination of independent third-party evidence and internally developed models, intended to be calibrated to market observable data where possible. These are known as Level 3 asset classes in the Group's fair value hierarchy and represented 17 per cent. of total financial assets and investment properties held at fair value as of 31 December 2019. Even some higher-quality assets may become more illiquid as has been experienced in challenging market conditions in the past.
The reported value of the Group's relatively illiquid types of investments, its investments in the asset classes described in the paragraph above and, at times, its higher-quality, generally liquid asset classes, do not necessarily reflect the lowest current market price for the asset. If the Group were forced to sell certain of its assets in the current market, there can be no certainty that it would be able to sell them for the prices at which it has recorded them and it may be forced to sell them at significantly lower prices.
The Group may refinance existing financing arrangements and may, in exceptional circumstances, need to seek additional financing to supplement liquidity available from internal resources. The availability of additional financing will depend on a variety of factors such as market conditions, the general availability of credit, the overall availability of credit to the financial services industry and the market's perception of the Group's financial condition. Disruptions and uncertainty or volatility in the capital and credit markets, as has been experienced in the past, in particular throughout the eurozone, may exert downward pressure on availability of liquidity and credit capacity for certain issuers and, if access to liquidity is constrained for a prolonged period of time, may limit the Group's access to capital require d to operate and grow its business at a sustainable cost. Adverse market conditions may limit the Group's ability to replace, in a timely manner, maturing debt, satisfy statutory capital requirements and generate fee income and market related revenue to meet liquidity needs.
As such, the Group may be forced to reduce its dividends, defer interest payments or redemptions, delay raising capital, issue shorter-term securities than it prefers, or bear an unattractive cost of capital which could decrease profitability and reduce financial flexibility. The Group's results of operations, financial condition and cash flows could be materially adversely affected.
Longevity statistics are monitored in detail, compared with emerging industry trends, and the results are used to inform both the reserving and pricing of annuities. It is likely that uncertainty will remain in the development of future longevity that cannot be mitigated.
A strengthening in the longevity assumption, either to reflect changes in the underlying life expectancy (for example, as a result of healthier lifestyles, improved screening programmes or increased availability or effectiveness of medical treatments) of the population or of the Group's particular portfolio used to calculate the Group's long -term business liabilities, would result in an increase in these reserves and reduce shareholders' equity .
On 31 January 2020,the UK left the EU (otherwise referred to as "Brexit"). Under the terms of the UK-EU article 50 withdrawal agreement (the "Article 50 Withdrawal Agreement") there is now an implementation period in effect until 31 December 2020, during which time the UK will no longer be a member of the EU but will continue to be subject to EU rules and regulations and remain a member of the single EU market and customs union. Under the Article 50 Withdrawal Agreement, the implementation period may, before 1 July 2020, be extended once by up to two years. However, the UK legislation ratifying the Article 50 Withdrawal Agreement (the European Union (Withdrawal) Act 2018 as amended by the European Union (Withdrawal Agreement) Act 2020 (as so amended, the "EUWA")) contains a prohibition on a Minister of the Crown agreeing any extension to the transition period. While this does not entirely remove the prospect that the transition period will be extended (as the UK Parliament could pass legislation that would override the effect of the prohibition in the EUWA), the likelihood of exercising the one-time extension option is reduced. The purpose of the implementation period is to enable the UK and the EU to negotiate a free-trade agreement for the post-implementation relationship, however, during the implementation period, there is a risk that the UK and the EU may not reach agreement on the future relationship between them (leading to a "no deal" Brexit), or may reach a significantly narrower agreement than that envisaged by the political declaration of the European Commission and the UK Government. The UK has simultaneously begun negotiations with other countries to replace the trade agreements it currently has during the transition period as a former member of the EU, as well as those countries which currently do not have comprehensive trade agreements with the EU such as the U.S. and Australia.
The outcome of the EU's negotiations on the UK's trade and access to the country's major trading markets, including the single EU market, is currently unknown. The exact impact of market risks faced by the Group is uncertain, and difficult to predict and respond to. In particular, there are difficulties in predicting the rate at which any economic deterioration may occur, and over what duration; and the fact that many of the related risks to the business are totally, or partly, outside the control of the Group. Due to the geographic location of the Group's businesses and customers, the Group's business, results, financial condition and prospects have scope to be adversely affected.
The EU has a number of unilateral reserved powers in relation to third countries, which impact trade and market access depending on whether the EU considers the third country's regulations to be equivalent to the EU's, in particular in relation to financial services and data protection. Subsequent to the end of the implementation period, the UK will be treated by the EU as a third country. The EU has committed to conclude on the equivalence of relevant UK laws and regulations by 30 June 2020, which will apply after the conclusion of the implementation period .
The Group's business could be impacted by adverse outcomes from the EU's equivalence deliberations and the UK's negotiations with the EU, which could have a material impact on the regulatory and legal framework within which the Group's UK and European businesses operate. Potential adverse outcomes include restrictions on the Group's European businesses to delegate asset management activities back to the UK, the requirement for a holding company for the Group's EU operations potentially restricting the transferability of capital within the Group and the EU not recognising the UK's data protection regime as adequate which in the absence of mitigating actions could restrict the transfer of data between the Group's EU operations and the UK.
Domestic UK political tensions between the UK's regions over the UK's withdrawal from the EU and its future relationship has also increased the risk of referendums on independence for Scotland and the status of Northern Ireland in the UK. The possible occurrence of such events and the uncertain outcome of the arrangements which will be put in place for the UK to exit the EU could result in heightened market volatility and a significant risk of macroeconomic deterioration. In the event the UK and the EU fail to conclude a free trade agreement by the end of the implementation period, the Bank of England could respond by loosening its monetary policy causing a reduction in the long term interest rates on UK gilts with the possibility that such rates could stay at record low levels for a prolonged period. The European Central Bank may also follow suit causing a reduction in the interest rates on European government securities. While the Group actively manages its risk exposure, sustained low yields alongside macroeconomic uncertainty and heightened volatility could impact the profitability of the Group's business through a reduction of the Group's spread relative to its contractual obligations and income earned on shareholder assets.
The Group offers products and services in Europe (including the UK), North America and the Asia Pacific region through wholly owned and majority owned subsidiaries, joint ventures, companies in which the Group holds non controlling equity stakes, agents and independent contractors. The Group's international operations expose it to local political, regulatory, business and financial risks and challenges which may affect the demand for its products and services, the value of its investment portfolio, the required levels of capital and surplus, and the credit quality of local counterparties. These risks include, for example, political, social or economic instability in countries in which the Group operates, the global impact and spread of diseases such as COVID-19, discriminatory regulation, credit risks of the Group's counterparties, lack of local business experience in certain markets, risks associated with exposure to insurance industry insolvencies through policyholder guarantee funds or similar mechanisms set up in markets in which the Group is present and, in certain cases, risks associated with the potential incompatibility with foreign partners, especially in countries in which the Group is conducting business through entities which it does not control. Some of the Group's international insurance operations are, and are likely to continue to be, in emerging markets where these risks are heightened. The Group's business could be adversely affected by this as the Group's overall success as a global business and the results of its operations depend, in part, upon its ability to succeed in different economic, social and political conditions.
Climate change may result in the Group's pricing being based on inadequate or inaccurate data or inappropriate assumptions, and may cause the Group to incorrectly estimate future increases in the frequency and severity of claims. As a result, the Group could underprice risks, which could negatively affect its loss ratio for general insurance business, or the Group could overprice risks, which could reduce its business volume and competitiveness. Climate change may also mean that it is no longer commercially viable for the Group and its competitors to provide flood and windstorm insurance cover at an affordable price to an increasing proportion of the population in the markets in which it operates and it is unclear what future governmental public and regulatory policy response to this market failure would be .
The Group faces potentially significant risks related to the transition to a lower-carbon economy as climate change continues to move up the agenda of many regulators, governments, non-governmental organisations and investors. Governmental and corporate efforts to transition to a low carbon economy in the coming decades could have an adverse impact on global investment assets. In particular, there is a risk that this transition including the related changes to technology, law and policies and the speed of their implementation, could result in some sectors (such as, but not limited to, the fossil fuel industry) facing significantly higher costs and a disorderly adjustment to their asset values. There is also potential that certain climate change risk factors have not yet been fully priced in by financial markets, with the risk that sudden late government policy action in response to a failure to achieve emission goals could lead to unanticipated and potentially large shifts in asset valuations for industries required to rapidly move to a net zero emissions position. If climate considerations are not effectively integrated into the Group's investment decisions and fiduciary and stewardship duties this could adversely impact on the value and the future performance of its investmen t assets. The Group's business could be adversely affected by this, because where the Group's investment horizons are long-term, the relevant assets are potentially more exposed to the long-term impact of climate change and any future changes in policy.
Historically, the insurance industry has been cyclical and operating results of insurers have fluctuated because of volatile and sometimes unpredictable developments, many of which are beyond the direct control of any insurer. Although the Group has a geographically diverse group of businesses providing a wide range of products, it expects to experience the effects of this cyclical nature, including changes in sales and premium levels. The Group's business could be adversely affected by this given that the unpredictability and competitive nature of the general insurance business has contributed historically to significant quarter-to-quarter and year-to-year fluctuations in underwriting results and net earnings.
The Group's business is exposed to volatile natural and man-made disasters such as pandemics, hurricanes, windstorms, earthquakes, terrorism, riots, fires and explosions. Such events may not only affect insurance claims, but could also adversely impact investment markets and cause declines in the value of the Group's investment portfolio. Over the past several years, changing weather patterns and climatic conditions have added to the unpredictability and frequency of natural disasters in certain parts of the world and created additional uncertainty as to future trends and exposure.
The Group's life insurance operations are exposed to the risk of catastrophic mortality, such as a pandemic or other event that causes a large number of deaths. The effectiveness of external parties, including governmental and nongovernmental organisations, in combating the spread and severity of such a pandemic could have a material impact on the losses experienced by the Group (see the risk factor above entitled 'The occurrence of epidemics such as COVID-19 may affect the Group's business and the global economy more widely' for discussion of COVID-19).
The extent of losses from a catastrophe is a function of both the total amount of insured exposure in the area affected by the event and the severity of the event. Most catastrophes are restricted to small geographic areas; however, pandemics, hurricanes, earthquakes and man-made catastrophes may produce significant damage in larger areas, especially those that are heavily populated. Catastrophic events could also harm the financial condition of the Group's reinsurers and thereby increase the probability of default on reinsurance recoveries and could also reduce the Group's ability to write new business. Furthermore, pandemics, natural disasters, terrorism and fires could disrupt the Group's operations and result in significant loss of property, key personnel and information about its clients and its business if its business continuity plans fail to cope with the scale or nature of the catastrophe. Such events could adversely affect the Group's business, results of operations, corporate reputation and financial condition for a substantial period of time.
Furthermore, market conditions beyond the Group's control determine the availability and cost of the reinsurance protection it purchases. Accordingly, the Group may be forced to incur additional expenses for reinsurance or may not be able to obtain sufficient reinsurance on acceptable terms, which could adversely affect its ability to write future business.
The Solvency II Directive, which governs insurance industry regulation and prudential capital requirements in the EU, including associated Implementing Technical Standards and guidelines, became effective on 1 January 2016. The European Commission began a review in late 2016 of some aspects of the Solvency II legislation, which is expected to continue until 2021 and covers, among other things, a review of the Long Term Guarantee measures. The Group applied for, and has been granted, approval by the PRA to use the following measures when calculating its Solvency II capital requirements: the use of an internal model, the matching adjustment ("MA") for UK annuities, the 'volatility adjustment' for the Group's business in France, and transitional measures including transitional measures on technical provisions ("TMTP"). There is a risk that in the future changes are required to be made to the approved internal model and these related applications, which could have a material impact on the Group Solvency II capital position. Where internal model changes are subject to regulatory approval, there is a risk that the approval is delayed or not given. In such circumstances, changes in the Group's risk profile would not be able to be appropriately reflec ted in the Group's internal model, which could have a material impact on the Group's Solvency II capital position.
The PRA has published and continues to publish consultations and supervisory statements that set out its expectations relating to elements of the Solvency II regime. As a result of these consultations, a number of these supervisory statements have been issued or updated and the PRA has indicated that further consultations are likely. These include, amongst others, consultations and supervisory statements relating to illiquid assets, the MA and the TMTP deduction.
There is a risk that a future change in the regulatory treatment of Lifetime Mortgages ("LTMs") will result in a material increase in technical provisions, which could have a negative effect on the business, results of operations, financial condition and prospects of the Group.
There is a risk that the implementation of one or more of the PRA consultation papers or supervisory statements may give rise to greater capital requirements than are currently the case.
In July 2013 the Group was designated by the Financial Stability Board ("FSB") as a global systemically important insurer ("G-SII"). The list was updated annually until 2018, when the FSB in consultation with the International Association of Insurance Supervision ("IAIS") and national authorities decided not to engage in an identification of G-SIIs, suspending the G-SII identification process. This decision will be reviewed by the FSB in 2022, based on the initial years of implementation of the IAIS's holistic framework for the assessment and mitigation of systemic risk. There is a risk that intervention powers under the holistic framework could potentially be applied to the Group in the future that could have negative consequences for the Group's business and results of operations and, in particular, could impact on the ability of subsidiaries to remit dividends to the Group, and consequently on the Group's ability to remit dividends to shareholders.
The IAIS is also developing a common framework for the supervision of internationally active insurance groups ("ComFrame"). The framework is designed to develop common principles for supervision. The intention is that an insurance capital standard ("ICS"), currently being developed and applicable to globally active insurers, will ultimately form part of ComFrame. The IAIS has proposed a two phased approach to implementation of the ICS. The first phase being a five-year monitoring period commencing in 2020 where the ICS will not be used as a prescribed capital requirement, but will be confidentially reported to group wide supervisors for discussion in supervisory colleges. The second phase is intended to be the implementation of the ICS as a group wide prescribed capital requirement .
The Group is subject to extensive laws and regulations that are administered and enforced by a number of different governmental authorities and non-governmental agencies, including the PRA, the FCA and other regulators. These authorities may seek to exercise their supervisory or enforcement authority in new or more robust ways. All of these possibilities, if they occurred, could affect the way the Group conducts its business and manages its capital, and may require the Group to satisfy increased capital requirements.
Insurance regulation in the UK and the regulations that apply to the Group's European subsidiaries are largely ba sed on the requirements of EU directives. Inconsistent application of directives by regulators in different EU member states
may place the Group at a competitive disadvantage to other European financial services groups. In addition, changes in the local regulatory regimes of designated territories could affect the calculation of the Group's solvency position.
The Group's insurance subsidiaries and branches worldwide are subject to detailed and comprehensive government regulation in each of the jurisdictions in which they conduct business. Regulatory agencies have broad administrative power over many aspects of the insurance business, which may include premium rates, marketing and selling practices, advertising, licensing agents, policy forms, capital adequacy and permitted investments. Government regulators are concerned primarily with the protection of policyholders rather than the Group's shareholders or creditors.
The failure of any of the Group's subsidiaries to meet minimum capital and surplus requirements could subject the Group to further examination or corrective action imposed by insurance regulators, including limitations on its ability to write additional business, increased supervision by regulators or the implementation of resolution plans. Any corrective action imposed could have a material adverse effect on the Group's business, results of operations and financial condition. A decline in minimum capital and surplus amounts may also limit the ability of an insurance subsidiary to make dividend payments or distributions and could be a factor in causing rating agencies to downgrade the Group's financial strength ratings, which could have a material adverse effect on its business, results of operations and financial condition. Over and above regulatory minimum capital and surplus requirements, regulators in the countries in which the Group operates may deem it necessary to impose restrictions on dividend distributions by the Group and its subsidiaries in the event of a significant financial market or insurance event which creates uncertainty over the future capital and solvency position of the Group and its subsidiaries. Any restrictions on the transferability and fungibility of capital between subsidiaries and the Group may impact the ability of the Group to pay dividends and also may result in restrictions to the Group's Solvency II own funds recognised to the extent these funds cannot be made available to the Group within nine months and thus adversely impact the Group's solvency position.
In the UK, the Group's business is subject to regulation by both the PRA and the FCA, which have broad powers, including the authority to grant, vary the terms of, or cancel a regulated firm's authorisation, to investigate marketing and sales practices, to make product intervention rules and to require the maintenance of adequate financial resources. The PRA and the FCA have the power to undertake a range of investigative, disciplinary or enforcement actions, including public censure, restitution, fines or sanctions and to require firms to pay compensation.
The PRA and the FCA may make enquiries of the companies which they regulate regarding compliance with regulations governing the operation of business and, similar to the other UK regulated financial services companies, the Group faces the risk that the PRA or the FCA could find that the Group has failed to comply with applicable regulations or has not undertaken corrective action as required.
Issues and disputes may arise from time to time from the way in which the insurance industry or fund management industry has sold or administered an insurance policy or other product or in the way in which they have treated policyholders or customers, either individually or collectively, which may result in investigative, disciplinary or enforcement actions by the FCA or PRA or require the making of redress to customers.
Where larger groups or matters of public policy are concerned, the PRA and the FCA may intervene directly to provide redress to customers. There have been several industry-wide issues in which the PRA or the FCA has intervened directly, including the sale of personal pensions, the sale of mortgage-related endowments and investments in split capital investment trusts and sale of payment protection insurance.
Outside of the UK, the Group's businesses are regulated by local regulators that often have similar powers to the PRA and the FCA and the exercise of these powers could therefore have a similar negative impact on perceptions of its businesses or have a material adverse effect on its business.
There has been an increased focus in the EU on the fair treatment of customers, in particular on the way in which the insurance industry sells and administers insurance products. The Insurance Distribution Directive ("IDD") implemented minimum standards on the distribution of insurance. This includes a principle that insurance distributors should act in accordance with the best interests of their customers and ensure that information distributed to customers subject to the IDD is fair, clear and not misleading. The European Insurance and Occupational Pensions Authority has also set out its intentions to focus on the convergence of supervision within the EU with the aim of achieving comparable levels of consumer protection. There is a risk that guidance on the application of this principle could potentially lead to additional distribution and compliance costs, which could have a material adverse effect on its results, operations, and/or costs or otherwise negatively impact on its distribution arrangements.
Furthermore, various jurisdictions in which the Group operates, including the UK, have created investor compensation schemes that require mandatory contributions from market participants in some instances in the event of a failure of another market participant. As a major participant in the majority of the Group's chosen markets, circumstances could arise where the Group, along with other companies, may be required to make such contributions. The Group (like all other groups in which an entity is PRA and/or FCA regulated) contribute to the Financial Services Compensation Scheme and the levels of contribution to the Financial Services Compensation Scheme may change over time.
A determination that the Group has failed to comply with applicable regulation could have a negative impact on its results of operations or on its relations with current and potential customers. Regulatory action against a member of the Group could result in adverse publicity for, or negative perceptions regarding, the Group, or could have a material adverse effect on its business, its results of operations and financial condition and divert management's attention from the day-to-day management of the business.
The Group will not always be able to predict the impact of future legislation or regulation or changes in the interpretation or operation of existing legislation or regulation on its business, results of operations and financial condition. Changes in government policy, legislation or regulatory interpretation applying to companies in the financial services and insurance industries in any of the markets in which the Group operates, which may be applied retrospectively, may adversely affect the range of products offered, the terms and conditions applicable to t hese products (including retrospectively), distribution channels, capital requirements, dividends payable by subsidiaries and, consequently, results and financing requirements.
In February 2018, the FCA initiated a review into non-workplace pensions publishing its findings in July 2019. Nonworkplace pensions is an umbrella term for three main products; Individual Personal Pensions; Stakeholder Personal Pensions, and Self-invested Personal Pensions all of which the Group is a provider of. The review probed the extent to which information asymmetry and/or customer inertia has led to poor value for money and poor outcomes for customers. Potential remedies proposed by the FCA following the review include measures to promote change transparency, reduce charge complexity and expose charges to external scrutiny. There remains uncertainty over if and how such measures will be enacted. If such, or other remedial measures are adopted, they could impact the Group's charges to customers and as a result adversely impact the Group's trading and financial performance.
In October 2019, the FCA published its interim report on general insurance pricing practices. Potential measures proposed by the report include remedies to tackle market practices that (i) result in the progressive charging of loyal customers more than new customers and (ii) discourage customers from switching insurers. There remains uncertainty over if and how such measures will be enacted, which could impact customer premiums and as a result adversely impact the Group's trading and financial performance.
The Group may face increased compliance costs due to the need to set up additional compliance controls or the direct cost of such compliance because of changes to financial services legislation or regulatio n.
The Group has been named as defendants in lawsuits, including class actions and individual lawsuits. The Group ha s been subject to regulatory investigations or examinations in the various jurisdictions in which it operates. These actions arise in various contexts, including in connection with the Group's activities as an insurer, securities issuer, employer, investment adviser, investment manager, investor and taxpayer.
Lawsuits and investigations may also arise which could seek significant or unspecified amounts of damages, including punitive damages, and certain of the regulatory authorities involved in these proceedings have substantial powers over the conduct and operations of the Group's business.
Due to the nature of certain of these lawsuits and investigations, the Group cannot make an estimate of loss or predict with any certainty the potential impact of these lawsuits or investigations.
In the course of conducting insurance business, the Group receives general insurance liability claims, and becomes involved in actual or threatened related litigation arising therefrom, including claims in respect of pollution and other environmental hazards. Given the significant delays that are experienced in the notification of these claims, the potential number of incidents that they cover and the uncertainties associated with establishing liability and the availability of reinsurance, the ultimate cost cannot be determined with certainty.
Additionally, it is possible that a regulator in one of the Group's major markets may conduct a review of products previously sold, either as part of an industry-wide review or specific to it. The result of this review may be to compensate customers for losses they have incurred as a result of the products they were sold.
As industry practices and legal, judicial, social and other environmental conditions change, unexpected and unintended issues related to claims and coverage may emerge. Examples of emerging claims and coverage issues include adverse changes in loss trends, judicial expansion of policy coverage and the impact of new theories of liability; growth of claims culture; legislative or judicial action that affects policy coverage or interpretation, claim quantification, or pricing; a growing trend of plaintiffs targeting property and casualty insurers in purported class action litigation relating
to claims handling and other practices; new causes of liability or mass claims; claims in respect of directors' and officers' coverage, professional indemnity and other liability covers; and climate change related litigation.
All of the above could adversely impact the Group's results of operations or financial condition.
The Group operates in numerous tax jurisdictions around the world and faces risks associated with changes in tax law, interpretation of tax law, changes in tax rates and the risk of failure to comply with procedures required by tax authorities. Failure to manage tax risks could lead to an additional tax charge or a financial penalty.
If, as a result of a particular tax risk materialising, the tax costs associated with certain transactions are greater than anticipated, it could affect the profitability of those transactions.
There are also specific rules governing the taxation of policyholders. The Group is unable to predict accurately the impact of future changes in tax law on the taxation of life insurance and pension policies in the hands of policyholders. Amendments to existing legislation, particularly if there is the withdrawal of any tax relief, or an increase in tax rates, or the introduction of new rules, may affect the future long-term business and the decisions of policyholders. The impact of such changes upon the Group might depend on the mix of business in-force at the time of such change.
The design of life insurance products by the Group's life insurance companies takes into account a number of factors, including risks and taxation and is based on the tax legislation in force at that time. Changes in tax legislation or in the interpretation of tax legislation may therefore, when applied to such products, have a material adverse effect on the financial condition of the relevant long-term business fund of the company in which the business was written.
The Group's accounts are prepared in accordance with the current IFRS applicable to the insurance industry. Changes to IFRS for insurance companies have been proposed in recent years and further changes may be proposed in the future. Following the UK's withdrawal from the EU and any agreed transitional period the applicability of changes to IFRS will be subject to a UK endorsement process.
On 18 May 2017, the International Accounting Standards Board (the "IASB") published IFRS 17, Insurance Contracts, effective from 1 January 2021. In March 2020 the IASB deferred the effective date to 1 January 2023, however, this remains subject to the IASB's consultation on recommended changes to the IFRS and the EU and UK endorsement processes. This new standard introduces significant changes to the statutory reporting of insurance entities that prepare financial statements according to IFRS, changing the presentation and measurement of insurance contracts, including the effect of technical reserves and reinsurance on the value of insurance contracts. Field testing during 2018 identified important issues with the current standard which are now being re-deliberated by the IASB. The IASB is expected to publish amendments to IFRS 17 in the second quarter of 2020.
Given the current stage of the Group's implementation of IFRS 17, any change or modification of IFRS accounting policies, such as in connection with the implementation of IFRS 17 requirements to amend the reporting standards for insurance entities who prepare accounts to IFRS, may require a change in the reporting basis of future results or a restatement of reported results. The effect of changes required to the Group's accounting policies as a result of implementing the new standard is currently being considered but these changes can be expected to, among other things, alter the timing of IFRS profit recognition, costs and distributable reserves and impact the Group's reported results of operations and financial position.
The Issuer is under no obligation to redeem the Undated Tier 3 Notes at any time and the holders of Undated Tier 3 Notes have no right to call for their redemption.
This means that Noteholders have no ability to exit their investment in any Undated Tier 3 Notes, except: (i) if th e Issuer exercises its rights to redeem the Undated Tier 3 Notes in accordance with the "Terms and Conditions of the Tier 3 Notes"; (ii) by selling their Undated Tier 3 Notes in the secondary market; or (iii) upon a winding-up of the Issuer, in which limited circumstances the Noteholders may receive some of any resulting liquidation proceeds following payment being made in full to all senior and more senior subordinated creditors. The proceeds, if any, realised as a result of any of the actions described in (i) to (iii) may be substantially less than the principal amount of such Notes or the price paid by an investor for the Notes.
The Undated Tier 3 Notes will constitute direct, unsecured and subordinated obligations of the Issuer and rank pari passu and without any preference among themselves. In the event of the winding-up or administration of the Issuer, the payment obligations of the Issuer under or arising from the Undated Tier 3 Notes, the Coupons relating to them and the Trust Deed shall be subordinated to the claims of all Senior Creditors (as defined in Condition 18 of "Terms and Conditions of the Tier 3 Notes") of the Issuer but shall rank at least pari passuwith all other subordinated obligations of the Issuer which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 3 Capital and shall rank in priority to the claims of holders of all obligations of the Issuer which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital or Tier 1 Capital (as defined in Condition 18 of "Terms and Conditions of the Tier 3 Notes") and all classes of share capital of the Issuer.
Without prejudice to Condition 3(a) of "Terms and Conditions of the Tier 3 Notes", all payments under or arising from the Undated Tier 3 Notes, the Coupons relating to them and the Trust Deed shall be conditional upon the Issuer being solvent at the time for payment by the Issuer, and no amount shall be payable in respect of the Undated Tier 3 Notes unless and until such time as the Issuer could make such payment and still be solvent as contemplated by the "Terms and Conditions of the Tier 3 Notes" immediately thereafter.
If at any time an order is made or an effective resolution is passed for the winding -up of the Issuer (except in the circumstances described in Condition 3(a) of "Terms and Conditions of the Tier 3 Notes") or an administrator of the Issuer has been appointed and given notice that it intends to declare and distribute a dividend, there shall be payable on each Undated Tier 3 Note an amount equal to the principal amount of such Undated Tier 3 Note, together with Arrears of Interest, if any, and any interest (other than Arrears of Interest) which has accrued up to, but excluding, the date of repayment. Any such repayment will be subordinated as described above.
Although the Undated Tier 3 Notes may pay a higher Rate of Interest than comparable Notes which are not subordinated, there is a significant risk that an investor in Undated Tier 3 Notes will lose all or some of its investment should the Issuer become insolvent.
If Optional Interest Payment Date is specified as being applicable in the relevant Final Terms, the Issuer may on any Optional Interest Payment Date elect to defer paying interest on each Optional Interest Payment Date.
The Issuer is required to defer any payment of interest on Undated Tier 3 Notes on each Mandatory Interest Deferral Date (being an Interest Payment Date in respect of which a Regulatory Deficiency Interest Deferral Event (which, if Insolvent Insurer Winding-up Condition is specified as applicable in the Final Terms or Pricing Supplement, may include an Insolvent Insurer Winding-up) has occurred and is continuing) and when the Issuer is in breach of the Solvency Condition (as defined in Condition 3(b) of "Terms and Conditions of the Tier 3 Notes").
Any interest in respect of the Notes not paid on an Interest Payment Date, together with any other interest in respect thereof not paid on any earlier Interest Payment Date, may (subject to Condition 3(b), to any notifications to, or consent from (in either case if and to the extent applicable), the Relevant Regulator and to any other requirements under the Relevant Rules) be paid in whole or in part at any time and in any event will automatically become immediately due and payable in whole upon the earlier of:
Arrears of Interest and any other amount, payment of which is so deferred, shall not themselves bear interest .
The Issuer is required to defer any redemption of Undated Tier 3 Notes (if it has given notice of early redemption in the circumstances described below in Conditions 6(c), 6(d), 6(e) and 6(f)) if (i) a Regulatory Deficiency Redemption Deferral Event (which may include an Insolvent Insurer Winding-Up) has occurred and is continuing or would occur if the Undated Tier 3 Notes were redeemed, (ii) the Undated Tier 3 Notes cannot be redeemed in compliance with the Solvency Condition, or (iii) (if then required) regulatory consent has not been obtained or redemption cannot be made in compliance with the Relevant Rules at such time.
If redemption of the Undated Tier 3 Notes is deferred, the Undated Tier 3 Notes will only become due for redemption in the circumstances described in Conditions 6(a)(iv) and 6(a)(v).
The Undated Tier 3 Notes may, subject as provided in Condition 6, be redeemed at their Optional Redemption Amount together with any interest accrued to (but excluding) the date fixed for redemption and any Arrears of Interest at the option of the Issuer on any Optional Redemption Date. In addition, upon the occurrence of a Tax Event, a Capital Disqualification Event or a Rating Methodology Event (if Rating Methodology Call is specified), the Undated Tier 3 Notes may be: (i) substituted for, or their terms varied so that they become Qualifying Tier 3 Securities or, in the case of a Rating Methodology Event, Rating Agency Compliant Securities; or (ii) redeemed in the case of (x) a Tax Event, at their outstanding principal amount, (y) a Capital Disqualification Event, at the Special Redemption Price or (z) a Rating Methodology Event, at the Special Redemption Price, together in each case with Arrears of Interest, all as more particularly described in "Terms and Conditions of the Tier 3 Notes — Redemption, Substitution, Variation, Purchase and Options".
The Undated Tier 3 Notes may, subject as provided in Condition 6, at the sole discretion of the Issuer, be redeemed at their principal amount together with any accrued but unpaid interest to (but excluding) the date of redemption and any Arrears of Interest in exercise of a clean-up call option by the Issuer (in the event that 80 per cent. or more of the aggregate principal amount of the Undated Tier 3 Notes has been redeemed and/or purchased and cancelled by the Issuer).
The cash paid to investors upon such a redemption may be less than the then current market value of the Undated Tier 3 Notes or the price at which investors purchased the Undated Tier 3 Notes, and any actual or perceived possibility of redemption by the Issuer could also impact the market value of the Undated Tier 3 Notes. Subject to the contractual and regulatory restrictions on doing so set out in the Conditions, the Issuer might be expected to redeem the Undated Tier 3 Notes when its costs of borrowing for an instrument with a comparable regulatory capital treatment at the time is lower than the interest payable on them. 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 payable on the Undated Tier 3 Notes being redeemed and may only be able to do so at a significantly lower rate. Potential investors should consider reinvestment risk in the light of other investments available at that time.
There is no restriction on the amount of securities which the Issuer may issue and which may rank senior to, or pari passu with, the Undated Tier 3 Notes. The issue of any such securities may reduce the amount recoverable by holders of Undated Tier 3 Notes on a winding-upof the Issuer and/or may increase the likelihood of a deferral of payments under the Undated Tier 3 Notes.
If specified in the relevant Final Terms, on the First Reset Note Reset Date and each Reset Note Reset Date thereafter, the Rate of Interest on the Undated Tier 3 Notes will be reset by reference to the applicable Mid-Swap Rate, Benchmark Gilt Rate, Reference Bond Rate or CMT Rate, and for a period equal to the Reset Period, as adjusted for any app licable margin, as more particularly described in "Terms and Conditions of the Tier 3 Notes — 4. Interest and other Calculations". The reset of the Rate of Interest in accordance with such provisions may affect the secondary market and the market value of such Undated Tier 3 Notes and, following any such reset of the Rate of Interest, the First Reset Rate of Interest or the Subsequent Reset Rate of Interest on the relevant Undated Tier 3 Notes may be lower than the Initial Rate of Interest, the First Reset Rate of Interest and/or the previous Subsequent Reset Rate of Interest, thereby reducing the amount of interest payable to Noteholders.
Fixed to Floating Rate Notes may bear interest at a rate that the Issuer may elect to conve rt from a fixed rate to a floating rate. The Issuer's ability to convert the interest rate will affect the secondary market and the market value of such Undated Tier 3 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, the spread on the Fixed to Floating Rate Notes may be less favourable than the 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 Undated Tier 3 Notes.
The Dated Tier 3 Notes will constitute direct, unsecured and subordinated obligations of the Issuer and rank pari passu and without any preference among themselves. In the event of the winding-up or administration of the Issuer, the payment obligations of the Issuer under or arising from the Dated Tier 3 Notes, the Coupons relating to them and the Trust Deed shall be subordinated to the claims of all Senior Creditors (as defined in Condition 18 of "Terms and Conditions of the Tier 3 Notes") of the Issuer but shall rank at least pari passuwith all other subordinated obligations of the Issuer which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 3 Capital and shall rank in priority to the claims of holders of all obligations of the Issuer which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital or Tier 1 Capital (as defined in Condition 18 of "Terms and Conditions of the Tier 3 Notes") and all classes of share capital of the Issu er.
Without prejudice to Condition 3(a) of "Terms and Conditions of the Tier 3 Notes", all payments under or arising from the Dated Tier 3 Notes, the Coupons relating to them and the Trust Deed shall be conditional upon the Issuer being solvent at the time for payment by the Issuer, and no amount shall be payable in respect of the Dated Tier 3 Notes unless and until such time as the Issuer could make such payment and still be solvent as contemplated by the "Terms and Conditions of the Tier 3 Notes" immediately thereafter.
If at any time an order is made or an effective resolution is passed for the winding -up of the Issuer (except in the circumstances described in Condition 3(a) of "Terms and Conditions of the Tier 3 Notes") or an administrator of the Issuer has been appointed and given notice that it intends to declare and distribute a dividend, there shall be payable on each Dated Tier 3 Note an amount equal to the principal amount of such Dated Tier 3 Note, together with Arrears of Interest, if any, and any interest (other than Arrears of Interest) which has accrued up to, but excluding, the date of repayment. Any such repayment will be subordinated as described above.
Although the Dated Tier 3 Notes may pay a higher Rate of Interest than comparable Notes which are not subordinated, there is a significant risk that an investor in Dated Tier 3 Notes will lose all or some of its investment should the Issuer become insolvent.
If Optional Interest Payment Date is specified as being applicable in the relevant Final Terms, the Issuer may on any Optional Interest Payment Date elect to defer paying interest on each Optional Interest Payment Date.
The Issuer is required to defer any payment of interest on Dated Tier 3 Notes on each Mandatory Interest Deferral Date (being an Interest Payment Date in respect of which a Regulatory Deficiency Interest Deferral Event (which, if Insolvent Insurer Winding-up Condition is specified as applicable in the Final Terms or Pricing Supplement, may include an Insolvent Insurer Winding-up) has occurred and is continuing) and when the Issuer is in breach of the Solvency Condition (as defined in Condition 3(b) of "Terms and Conditions of the Tier 3 Notes").
Any interest in respect of the Notes not paid on an Interest Payment Date, together with any other interest in respect thereof not paid on any earlier Interest Payment Date, may (subject to Condition 3(b), to any notifications to, or consent from (in either case if and to the extent applicable), the Relevant Regulator and to any other requirements under the Relevant Rules) be paid in whole or in part at any time and in any event will automatically become immediately due and payable in whole upon the earlier of:
Arrears of Interest and any other amount, payment of which is so deferred, shall not themselves bear interest.
The Issuer is required to defer any scheduled redemption of Dated Tier 3 Notes (whether at maturity or if it has given notice of early redemption in the circumstances described below in Conditions 6(c), 6(d), 6(e) and 6(f)) if (i) a Regulatory Deficiency Redemption Deferral Event (which may include an Insolvent Insurer Winding-Up) has occurred and is continuing or would occur if the Dated Tier 3 Notes were redeemed, (ii) the Dated Tier 3 Notes cannot be redeemed in compliance with the Solvency Condition, or (iii) (if then required) regulatory consent has not been obtained or redemption cannot be made in compliance with the Relevant Rules at such time.
If redemption of the Dated Tier 3 Notes is deferred, the Dated Tier 3 Notes will only become due for redemption in the circumstances described in Conditions 6(a)(iv) and 6(a)(v).
The Dated Tier 3 Notes may, subject as provided in Condition 6, be redeemed at their Optional Redemption Amount together with any interest accrued to (but excluding) the date fixed for redemption and any Arrears of Interest at the option of the Issuer on any Optional Redemption Date. In addition, upon the occurrence of a Tax Event, a Capital Disqualification Event or a Rating Methodology Event (if Rating Methodology Call is specified), the Dated Tier 3 Notes may be: (i) substituted for, or their terms varied so that they become Qualifying Tier 3 Securities or, in the case of a Rating Methodology Event, Rating Agency Compliant Securities; or (ii) redeemed in the case of (x) a Tax Event, at
their outstanding principal amount, (y) a Capital Disqualification Event, at the Special Redemption Price or (z) a Rating Methodology Event, at the Special Redemption Price, together in each case with Arrears of Interest, all as more particularly described in "Terms and Conditions of the Tier 3 Notes — Redemption, Substitution, Variation, Purchase and Options".
The Dated Tier 3 Notes may, subject as provided in Condition 6, at the sole discretion of the Issuer, be redeemed at their principal amount together with any accrued but unpaid interest to (but excluding) the date of redemption and any Arrears of Interest in exercise of a clean-up call option by the Issuer (in the event that 80 per cent. or more of the aggregate principal amount of the Dated Tier 3 Notes has been redeemed and/or purchased and cancelled by the Issuer).
The cash paid to investors upon such a redemption may be less than the then current market value of the Dated Tier 3 Notes or the price at which investors purchased the Dated Tier 3 Notes, and any actual or perceived possibility of redemption by the Issuer could also impact the market value of the Dated Tier 3 Notes. Subject to the contractual and regulatory restrictions on doing so set out in the Conditions, the Issuer might be expected to redeem the Dated Tier 3 Notes when its costs of borrowing for an instrument with a comparable regulatory capital treatment at the time is lower than the interest payable on them. 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 payable on the Dated Tier 3 Notes being redeemed and may only be able to do so at a significantly lower rate. Potential investors should consider reinvestment risk in the light of other investments available at that time.
There is no restriction on the amount of securities which the Issuer may issue and which may rank senior to, or pari passu with, the Dated Tier 3 Notes. The issue of any such securities may reduce the amount recoverable by holders of Dated Tier 3 Notes on a winding-up of the Issuer and/or may increase the likelihood of a deferral of payments under the Dated Tier 3 Notes.
If specified in the relevant Final Terms, on the First Reset Note Reset Date and each Reset Note Reset Date thereafter, the Rate of Interest on the Dated Tier 3 Notes will be reset by reference to the applicable Mid-Swap Rate, Benchmark Gilt Rate, Reference Bond Rate or CMT Rate, and for a period equal to the Reset Period, as adjusted for any app licable margin, as more particularly described in "Terms and Conditions of the Tier 3 Notes — 4. Interest and other Calculations". The reset of the Rate of Interest in accordance with such provisions may affect the secondary market and the market value of such Dated Tier 3 Notes and, following any such reset of the Rate of Interest, the First Reset Rate of Interest or the Subsequent Reset Rate of Interest on the relevant Dated Tier 3 Notes may be lower than the Initial Rate of Interest, the First Reset Rate of Interest and/or the previous Subsequent Reset Rate of Interest, thereby reducing the amount of interest payable to Noteholders.
Fixed to Floating Rate Notes may bear interest at a rate that the Issuer may elect to convert from a fixed rate to a floating rate. The Issuer's ability to convert the interest rate will affect the secondary market and the market value of such Dated Tier 3 Notes since the Issuer may be expected to convert the rate when it is likely to produce a lowe r overall cost of borrowing. If the Issuer converts from a fixed rate to a floating rate, the spread on the Fixed to Floating Rate Notes may be less favourable than the 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 Dated Tier 3 Notes.
The Issuer is under no obligation to redeem the Undated Tier 2 Notes at any time and the holders of Undated Tier 2 Notes have no right to call for their redemption.
This means that Noteholders have no ability to exit their investment in any Undated Tier 2 Notes, except: (i) if the Issuer exercises its rights to redeem the Undated Tier 2 Notes in accordance with the "Terms and Conditions of the Tier 2 Notes"; (ii) by selling their Undated Tier 2 Notes in the secondary market; or (iii) upon a winding -up of the Issuer, in which limited circumstances the Noteholders may receive some of any resultin g liquidation proceeds following payment being made in full to all senior and more senior subordinated creditors. The proceeds, if any, realised as a result of any of the actions described in (i) to (iii) may be substantially less than the principal amount of such Notes or the price paid by an investor for the Notes.
The Undated Tier 2 Notes will constitute direct, unsecured and subordinated obligations of the Issuer and rank pari passu and without any preference among themselves. In the event of the winding-up or administration of the Issuer, the payment obligations of the Issuer under or arising from the Undated Tier 2 Notes, the Coupons relating to them and the
Trust Deed shall be subordinated to the claims of all Senior Creditors (as defined in Condition 18 of "Terms and Conditions of the Tier 2 Notes") of the Issuer but shall rank at least pari passuwith all other subordinated obligations of the Issuer which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital (other than Existing Undated Tier 2 Securities) and shall rank in priority to the claims of holders of Existing Undated Tier 2 Securities, all obligations of the Issuer which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 1 Capital (as defined in Condition 18 of "Terms and Conditions of the Tier 2 Notes") and all classes of share capital of the Issuer.
Without prejudice to Condition 3(a) of "Terms and Conditions of the Tier 2 Notes", all payments under or arising from the Undated Tier 2 Notes, the Coupons relating to them and the Trust Deed shall be conditional upon the Issuer being solvent at the time for payment by the Issuer, and no amount shall be payable in respect of the Undated Tier 2 Notes unless and until such time as the Issuer could make such payment and still be solvent as contemplated by the "Terms and Conditions of the Tier 2 Notes" immediately thereafter.
If at any time an order is made or an effective resolution is passed for the winding -up of the Issuer (except in the circumstances described in Condition 3(a) of "Terms and Conditions of the Tier 2 Notes") or an administrator of the Issuer has been appointed and given notice that it intends to declare and distribute a dividend, there shall be payable on each Undated Tier 2 Note an amount equal to the principal amount of such Undated Tier 2 Note, together with Arrears of Interest, if any, and any interest (other than Arrears of Interest) which has accrued up to, but excluding, the date of repayment. Any such repayment will be subordinated as described above.
Although the Undated Tier 2 Notes may pay a higher Rate of Interest than comparable Notes which are not subordinated, there is a significant risk that an investor in Undated Tier 2 Notes will lose all or some of its investment should the Issuer become insolvent.
If Optional Interest Payment Date is specified as being applicable in the relevant Final Terms, the Issuer may on any Optional Interest Payment Date elect to defer paying interest on each Optional Interest Payment Date.
The Issuer is required to defer any payment of interest on Undated Tier 2 Notes on each Mandatory Interest Deferral Date (being an Interest Payment Date in respect of which a Regulatory Deficiency Interest Deferral Event (which, if Insolvent Insurer Winding-up Condition is specified as applicable in the Final Terms or Pricing Supplement, may include an Insolvent Insurer Winding-up) has occurred and is continuing) and when the Issuer is in breach of the Solvency Condition (as defined in Condition 3(b) of "Terms and Conditions of the Tier 2 Notes").
Any interest in respect of the Notes not paid on an Interest Payment Date, together with any other interest in respect thereof not paid on any earlier Interest Payment Date, may (subject to Condition 3(b), to any notifications to, or consent from (in either case if and to the extent applicable), the Relevant Regulator and to any other requirements under the Relevant Rules) be paid in whole or in part at any time and in any event will automatically become immediately due and payable in whole upon the earlier of:
Arrears of Interest and any other amount, payment of which is so deferred, shall not themselves bear interest .
The Issuer is required to defer any redemption of Undated Tier 2 Notes (if it has given notice of early redemption in the circumstances described below in Conditions 6(c), 6(d), 6(e) and 6(f)) if (i) a Regulatory Deficiency Redemption Deferral Event (which may include an Insolvent Insurer Winding-Up) has occurred and is continuing or would occur if the Undated Tier 2 Notes were redeemed, (ii) the Undated Tier 2 Notes cannot be redeemed in compliance with the Solvency Condition, or (iii) (if then required) regulatory consent has not been obtained or redemption cannot be made in compliance with the Relevant Rules at such time.
If redemption of the Undated Tier 2 Notes is deferred, the Undated Tier 2 Notes will only become due for redemption in the circumstances described in Conditions 6(a)(iv) and 6(a)(v).
The Undated Tier 2 Notes may, subject as provided in Condition 6, be redeemed at their Optional Redemption Amount together with any interest accrued to (but excluding) the date fixed for redemption and any Arrears of Interest at the option of the Issuer on any Optional Redemption Date. In addition, upon the occurrence of a Tax Event, a Capital Disqualification Event or a Rating Methodology Event (if Rating Methodology Call is specified), the Undated Tier 2 Notes may be: (i) substituted for, or their terms varied so that they become Qualifying Tier 2 Securities or, in the case of a Rating Methodology Event, Rating Agency Compliant Securities; or (ii) redeemed in the case of (x) a Tax Event, at their outstanding principal amount, (y) a Capital Disqualification Event, at the Special Redemption Price or (z) a Rating Methodology Event, at the Special Redemption Price, together in each case with Arrears of Interest, all as more particularly described in "Terms and Conditions of the Tier 2 Notes — Redemption, Substitution, Variation, Purchase and Options".
The Undated Tier 2 Notes may, subject as provided in Condition 6, at the sole discretion of the Issuer, be redeemed at their principal amount together with any accrued but unpaid interest to (but excluding) the date of redemption and any Arrears of Interest in exercise of a clean-up call option by the Issuer (in the event that 80 per cent. or more of the aggregate principal amount of the Undated Tier 2 Notes has been redeemed and/or purchased and cancelled by the Issuer).
The cash paid to investors upon such a redemption may be less than the then current market value of the Undated Tier 2 Notes or the price at which investors purchased the Undated Tier 2 Notes, and any actual or perceived possibility of redemption by the Issuer could also impact the market value of the Undated Tier 2 Notes. Subject to the contractual and regulatory restrictions on doing so set out in the Conditions, the Issuer might be expected to redeem the Undated Tier 2 Notes when its costs of borrowing for an instrument with a comparable regulatory capital treatment at the time is lower than the interest payable on them. 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 payable on the Undated Tier 2 Notes bein g redeemed and may only be able to do so at a significantly lower rate. Potential investors should consider reinvestment risk in the light of other investments available at that time.
There is no restriction on the amount of securities which the Issuer may issue and which may rank senior to, or pari passu with, the Undated Tier 2 Notes. The issue of any such securities may reduce the amount recoverable by holders of Undated Tier 2 Notes on a winding-up of the Issuer and/or may increase the likelihood of a deferral of payments under the Undated Tier 2 Notes.
If specified in the relevant Final Terms, on the First Reset Note Reset Date and each Reset Note Reset Date thereafter, the Rate of Interest on the Undated Tier 2 Notes will be reset by reference to the applicable Mid-Swap Rate, Benchmark Gilt Rate, Reference Bond Rate or CMT Rate, and for a period equal to the Reset Period, as adjusted for any ap plicable margin, as more particularly described in "Terms and Conditions of the Tier 2 Notes — 4. Interest and other Calculations". The reset of the Rate of Interest in accordance with such provisions may affect the secondary market and the market value ofsuch Undated Tier 2 Notes and, following any such reset of the Rate of Interest, the First Reset Rate of Interest or the Subsequent Reset Rate of Interest on the relevant Undated Tier 2 Notes may be lower than the Initial Rate of Interest, the First Reset Rate of Interest and/or the previous Subsequent Reset Rate of Interest, thereby reducing the amount of interest payable to Noteholders.
Fixed to Floating Rate Notes may bear interest at a rate that the Issuer may elect to conv ert from a fixed rate to a floating rate. The Issuer's ability to convert the interest rate will affect the secondary market and the market value of such Undated Tier 2 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, the spread on the Fixed to Floating Rate Notes may be less favourable than the 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 Undated Tier 2 Notes.
The Dated Tier 2 Notes will constitute direct, unsecured and subordinated obligations of the Issuer and rank pari passu and without any preference among themselves. In the event of the winding-up or administration of the Issuer, the payment obligations of the Issuer under or arising fromthe Dated Tier 2 Notes, the Coupons relating to them and the Trust Deed shall be subordinated to the claims of all Senior Creditors (as defined in Condition 18 of "Terms and Conditions of the Tier 2 Notes") of the Issuer but shall rank at least pari passuwith all other subordinated obligations of the Issuer which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital (other than Existing Undated Tier 2 Securities) and shall rank in priority to the claims of holders of Existing Undated Tier 2 Securities, all obligations of the Issuer which constitute, or would but for any applicable limitation on
the amount of such capital constitute, Tier 1 Capital (as defined in Condition 18 of "Terms and Conditions of the Tier 2 Notes") and all classes of share capital of the Issuer.
Without prejudice to Condition 3(a) of "Terms and Conditions of the Tier 2 Notes", all payments under or arising from the Dated Tier 2 Notes, the Coupons relating to them and the Trust Deed shall be conditional upon the Issuer being solvent at the time for payment by the Issuer, and no amount shall be payable in respect of the Dated Tier 2 Notes unless and until such time as the Issuer could make such payment and still be solvent as cont emplated by the "Terms and Conditions of the Tier 2 Notes" immediately thereafter.
If at any time an order is made or an effective resolution is passed for the winding -up of the Issuer (except in the circumstances described in Condition 3(a) of "Terms and Conditions of the Tier 2 Notes") or an administrator of the Issuer has been appointed and given notice that it intends to declare and distribute a dividend, there shall be payable on each Dated Tier 2 Note an amount equal to the principal amount of such Dated Tier 2 Note, together with Arrears of Interest, if any, and any interest (other than Arrears of Interest) which has accrued up to, but excluding, the date of repayment. Any such repayment will be subordinated as described above.
Although the Dated Tier 2 Notes may pay a higher Rate of Interest than comparable Notes which are not subordinated, there is a significant risk that an investor in Dated Tier 2 Notes will lose all or some of its investment should the Issuer become insolvent.
If Optional Interest Payment Date is specified as being applicable in the relevant Final Terms, the Issuer may on any Optional Interest Payment Date elect to defer paying interest on each Optional Interest Payment Date.
The Issuer is required to defer any payment of interest on Dated Tier 2 Notes on each Mandatory Interest Deferral Date (being an Interest Payment Date in respect of which a Regulatory Deficiency Interest Deferral Event (which, if Insolvent Insurer Winding-up Condition is specified as applicable in the Final Terms or Pricing Supplement, may include an Insolvent Insurer Winding-up) has occurred and is continuing) and when the Issuer is in breach of the Solvency Condition (as defined in Condition 3(b) of "Terms and Conditions of the Tier 2 Notes").
Any interest in respect of the Notes not paid on an Interest Payment Date, together with any other interest in respect thereof not paid on any earlier Interest Payment Date, may (subject to Condition 3(b), to any notifications to, or consent from (in either case if and to the extent applicable), the Relevant Regulator and to any other requirements under the Relevant Rules) be paid in whole or in part at any time and in any event will automatically become immediately due and payable in whole upon the earlier of:
Arrears of Interest and any other amount, payment of which is so deferred, shall not themselves bear interest.
The Issuer is required to defer any scheduled redemption of Dated Tier 2 Notes (whether at maturity or if it has given notice of early redemption in the circumstances described below in Conditions 6(c), 6(d), 6(e) and 6(f)) if (i) a Regulatory Deficiency Redemption Deferral Event (which may include an Insolvent Insurer Winding-Up) has occurred and is continuing or would occur if the Dated Tier 2 Notes were redeemed, (ii) the Dated Tier 2 Notes cannot be redeemed in compliance with the Solvency Condition, or (iii) (if then required) regulatory consent has not been obtained or redemption cannot be made in compliance with the Relevant Rules at such time.
If redemption of the Dated Tier 2 Notes is deferred, the Dated Tier 2 Notes will only become due for redemption in the circumstances described in Conditions 6(a)(iv) and 6(a)(v).
The Dated Tier 2 Notes may, subject as provided in Condition 6, be redeemed at their Optional Redemption Amount together with any interest accrued to (but excluding) the date fixed for redemption and any Arrears of Interest at the option of the Issuer on any Optional Redemption Date. In addition, upon the occurrence of a Tax Event, a Capital Disqualification Event or a Rating Methodology Event (if Rating Methodology Call is specified), the Dated Tier 2 Notes may be: (i) substituted for, or their terms varied so that they become Qualifying Tier 2 Securities or, in the case of a Rating Methodology Event, Rating Agency Compliant Securities; or (ii) redeemed in the case of (x) a Tax Even t, at their outstanding principal amount, (y) a Capital Disqualification Event, at the Special Redemption Price or (z) a Rating Methodology Event, at the Special Redemption Price, together in each case with Arrears of Interest, all as more particularly described in "Terms and Conditions of the Tier 2 Notes — Redemption, Substitution, Variation, Purchase and Options".
The Dated Tier 2 Notes may, subject as provided in Condition 6, at the sole discretion of the Issuer, be redeemed at their principal amount together with any accrued but unpaid interest to (but excluding) the date of redemption and any Arrears of Interest in exercise of a clean-up call option by the Issuer (in the event that 80 per cent. or more of the aggregate principal amount of the Dated Tier 2 Notes has been redeemed and/or purchased and cancelled by the Issuer).
The cash paid to investors upon such a redemption may be less than the then current market value of the Dated Tier 2 Notes or the price at which investors purchased the Dated Tier 2 Notes, and any actual or perceived possib ility of redemption by the Issuer could also impact the market value of the Dated Tier 2 Notes. Subject to the contractual and regulatory restrictions on doing so set out in the Conditions, the Issuer might be expected to redeem the Dated Tier 2 Notes when its costs of borrowing for an instrument with a comparable regulatory capital treatment at the time is lower than the interest payable on them. 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 payable on the Dated Tier 2 Notes being redeemed and may only be able to do so at a significantly lower rate. Potential investors should consider reinvestment risk in the light of other investments available at that time.
There is no restriction on the amount of securities which the Issuer may issue and which may rank senior to, or pari passu with, the Dated Tier 2 Notes. The issue of any such securities may reduce the amount recoverable by holders of Dated Tier 2 Notes on a winding-up of the Issuer and/or may increase the likelihood of a deferral of payments under the Dated Tier 2 Notes.
If specified in the relevant Final Terms, on the First Reset Note Reset Date and each Reset Note Reset Date thereafter, the Rate of Interest on the Dated Tier 2 Notes will be reset by reference to the applicable Mid-Swap Rate, Benchmark Gilt Rate, Reference Bond Rate or CMT Rate, and for a period equal to the Reset Period, as adjusted for any applicable margin, as more particularly described in "Terms and Conditions of the Tier 2 Notes — 4. Interest and other Calculations". The reset of the Rate of Interest in accordance with such provisions may affect the secondary market and the market value of such Dated Tier 2 Notes and, following any such reset of the Rate of Interest, the First Reset Rate of Interest or the Subsequent Reset Rate of Interest on the relevant Dated Tier 2 Notes may be lower than the Initial Rate of Interest, the First Reset Rate of Interest and/or the previous Subsequent Reset Rate of Interest, thereby reducing the amount of interest payable to Noteholders.
Fixed to Floating Rate Notes may bear interest at a rate that the Issuer may elect to convert from a fixed rate to a floating rate. The Issuer's ability to convert the interest rate will affect the secondary market and the market value of such Dated Tier 2 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, the spread on the Fixed to Floating Rate Notes may be less favourable than the 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 Dated Tier 2 Notes.
Fixed/Floating Rate Senior Notes may bear interest at a rate that the Issuer may elect to convert from a fixed rate to a floating rate, or from a floating rate to a fixed rate. The Issuer's ability to convert the interest rate will affect th e secondary market and the market value of such Senior 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, the spread on the Fixed/Floating Rate Senior Notes may be less favourable than the prevailing spreads on comparable Floating Rate Senior Notes tied to the same reference rate. In addition, the new floating rate at any time may be lower than the rates on other Senior Notes. If the Issuer converts from a floating rate to a fixed rate, the fixed rate may be lower than then prevailing rates on its Senior Notes.
The market values of securities issued at a substantial discount or premium to their nominal 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 with conventional interest-bearing securities with comparable maturities.
An optional redemption feature is likely to limit the market value of Notes. 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.
The Terms and 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 do not attend and vote at the relevant meeting and Noteholders who vote in a manner contrary to the majority.
The Terms and Conditions of the Notes also provide that the Trustee may, without the consent of Noteholders, agree to (i) subject (in the case of the Tier 3 Notes and the Tier 2 Notes) to receiving no objection from the PRA, any modification of, or to the waiver or authorisation of any breach or proposed breach of, any of the provisions of Notes or (ii) the substitution of another company as principal debtor under any Notes in place of the Iss uer in each case in the circumstances described in the Terms and Conditions of the Notes.
In relation to any issue of Notes which have denominations consisting of a minimum Specified Denomination plus on e or more higher integral multiples of another similar amount, it is possible that the Notes may be traded in amounts that are not integral multiples of such minimum Specified Denominations (as defined in the applicable Final Terms). In such a case a Noteholder, who as a result of trading such amounts, holds a principal amount of less than the minimum Specified Denomination in his account with the relevant clearing system at the relevant time will not receive a definitive Note in respect of such holding (should definitive Notes be printed) and would need to purchase a principal amount of Notes such that it holds an amount equal to one or more Specified Denominations.
If definitive Notes are issued, holders should be aware that definitive Notes which have a denomination that is not an integral multiple of the minimum Specified Denomination may be illiquid and difficult to trade.
In accordance with PRA requirements for subordinated capital, the sole remedy against the Issuer available to the Trustee or (where the Trustee has failed to proceed against the Issuer as provided in the Terms and Conditions of the Notes) any holder of Notes for recovery of amounts owing in respect of the Tier 3 Notes and Coupons and the Tier 2 Notes and Coupons will be the institution of proceedings for the winding-up of the Issuer and/or proving in such winding-up or administration and/or claiming in the liquidation of the Issuer for such amounts.
The LIBOR, EURIBOR, CDOR, SONIA, SOFR and other "benchmarks" used to determine the amounts payable under financial instruments or the value of such financial instruments are the subject of ongoing regulatory scrutiny and proposals for reform.
In a speech on 27 July 2017, Andrew Bailey, the then Chief Executive of the FCA, questioned the sustainability of LIBOR in its current form, and advocated planning transition to alternative reference rates based on transactions. He noted that LIBOR panel banks have agreed to support LIBOR until 2021 but that, at the end of this period, it is the FCA's intention that it will not be necessary to sustain LIBOR through its influence or legal powers by persuading, or obliging banks to submit to LIBOR. Therefore, the continuation of LIBOR after 2021 cannot be guaranteed. Subsequent speeches by Andrew Bailey and other FCA officials have emphasised that market participants should not rely on the continued publication of LIBOR after the end of 2021. It is not possible to predict whether, to what extent, and for how long, panel banks will continue to provide LIBOR submissions to the administrator of LIBOR going forwards. This may cause LIBOR to perform differently than it did in the past and may have other consequences that cannot be predicted.
Separate workstreams are also underway in Europe to reform EURIBOR using a hybrid methodology and to provide a fallback by reference to a euro risk-free rate (based on a euro overnight risk-free rate as adjusted by a methodology to create a term rate). The European Money Markets Institute ("EMMI") was granted authorisation on 2 July 2019 for the administration of EURIBOR and the European Central Bank published €STR for the first time on 2 October 2019. In addition, on 21 January 2019, the euro risk free rate working group published a set of guiding principles for fallback provisions in new euro denominated cash products (including bonds). The guiding principles indicate, among other things, that continuing to reference EURIBOR in relevant contracts may increase the risk to the euro area financial system. This may cause EURIBOR to perform differently than it did in the past and may have other consequence s that cannot be predicted.
The Terms and Conditions of the Senior Notes, the Terms and Conditions of the Tier 3 Notes and the Terms and Conditions of the Tier 2 Notes provide for certain fallback arrangements in the event that a published benchmark, such as LIBOR, EURIBOR or CDOR, (including any page on which such benchmark may be published (or any successor service)) becomes unavailable.
Investors should be aware that, if a benchmark rate were discontinued or otherwise unavailable, the interest rate on Floating Rate Notes (or Fixed to Floating Rate Notes after the Fixed Rate End Date which may bear interest at a rate that the Issuer may elect to convert from a fixed rate to a floating rate) which are linked to or which reference such benchmark rate will be determined for the relevant period by the fallback provisions applicable to such Notes; or in respect of Fixed Rate Reset Notes where the Reset Rate is to be determined by reference to the Mid-Swap Rate and such Mid-Swap Rate cannot be determined by reference to the Relevant Screen Page, the Terms and Conditions of the Notes provide fallback arrangements in the event that the Original Reference Rate, including an inter-bank offered rate such as LIBOR, EURIBOR, CDOR or other relevant reference rates are unavailable.
If the circumstances described in the preceding paragraph occur in the case of Floating Rate Notes, Fixed to Floating Rate Notes and/or Fixed Rate Reset Notes and if (i) Screen Rate Determination is specified in the relevant Final Terms as the manner in which the Rate of Interest is to be determined; (ii) Mid-Swap Rate is specified as the Reset Rate for Fixed Rate Reset Notes and (iii) a Benchmark Event occurs in relation to an Original Reference Rate when any Rate of Interest (or any component part thereof) remains to be determined by reference to such original Reference Rate, such fallback arrangements will include the possibility that, despite the continued availability of the Original Reference Rate, the Issuer shall use its best efforts to appoint an Independent Adviser to, or, failing which, the Issuer may, set a Successor Reference Rate or, failing which, an Alternative Reference Rate and in each case an Adjustment Spread (if any). The use of any such Successor Reference Rate or Alternative Reference Rate to determine the Rate of Interest may, result in Notes linked to or referencing the Original Reference Rate performing differently (which may include payment of a lower Rate of Interest) than they would do if the Original Reference Rate were to continue to apply in its current form. In addition, the market (if any) for Notes linked to any such Successor Reference Rate or Alternative Reference Rate may be less liquid than the market for Notes linked to the Original Reference Rate. In certain circumstances, the ultimate fallback of interest for a particular Rate of Interest may result in the Rate of Interest for the last preceding Interest Determination Date being used. This may result in the effective application of a fixed rate for such Notes. In addition, due to the uncertainty concerning the availability of Successor Reference Rates and Alternative Reference Rates and the involvement of an Independent Adviser, the relevant fallback provisions may not operate as intended at the relevant time.
No consent of the Noteholders shall be required in connection with effecting any relevant Successor Reference Rate or Alternative Reference Rate (as applicable) or any other related adjustments and/or amendments described above.
Any such consequences could have a material adverse effect on the value of and return on any such Notes. Moreover, any of the above matters or any other significant change to the setting or existence of any relevant rate could affect the ability of the Issuer to meet its obligations under such Notes or could have a material adverse effect on the value or liquidity of, and the amount payable under, such Notes. Investors should note that the relevant Independent Adviser or the Issuer (as applicable) will have discretion to apply an Adjusted Spread to the relevant Successor Reference Rate or Alternative Reference Rate (as applicable) in the circumstances described above. The aim of the Adjustment Spread is to reduce or eliminate, to the extent reasonably practicable, any economic prejudice or benefit (as the case may be) to Noteholders as a result of the replacement of the Original Reference Rate with such Successor Reference Rate or the Alternative Reference Rate (as applicable). The Adjustment Spread could therefore be a spread or formula or methodology for calculating a spread in either case which: in the case of a Successor Reference Rate, is formally recommended in relation to the replacement of the Original Reference Rate with such Successor Reference Rate by any Relevant Nominating Body; or (ii) in the case of a Successor Reference Rate for which no such recommendation has been made or in the case of an Alternative Reference Rate, the Independent Adviser or the Issuer (as applicable) determines, is customarily applied to the relevant Successor Reference Rate or the Alternative Reference Rate (as the case may be) in international debt capital markets transactions to produce an industry-accepted replacement rate for the Original Reference Rate; or (iii) in the case that the Independent Adviser or the Issuer (as applicable) determines that no such spread is customarily applied, the relevant Independent Adviser or the Issue r (as applicable) determines is recognised or acknowledged as being in customary market usage in international debt capital markets transactions which reference the Original Reference Rate, where such rate has been replaced by such Successor Reference Rate or Alternative Reference Rate (as applicable); or (iv) if the Independent Adviser or the Issuer (as applicable) determines that no such industry standard is recognised or acknowledged, the Independent Adviser or the Issuer (as applicable) (acting in good faith and in a commercially reasonable manner), determines to be appropriate.
However, any such Adjustment Spread could have unexpected commercial consequences and there can be no assurance that, due to the particular circumstances of each Noteholder, any such adjustment will be favourable to each Noteholder.
Investors should consider all of these matters with respect to the Floating Rate Notes, Fixed Rate Reset Notes or Fixed to Floating Rates Notes after the Fixed Rate End Date (as applicable) and consult their own independent advisers and make their own assessment about the potential risks imposed by benchmark regulation reforms when making their investment decision with respect to such Notes.
Investors should be aware that the market continues to develop in relation to SONIA and SOFR as reference rates in the capital markets and their adoption as an alternative to sterling LIBOR and U.S. dollar LIBOR, respectively. In particular,market participants and relevant working groups are exploring alternative reference rates based on SONIA and SOFR, including term SONIA or SOFR reference rates which seek to measure the market's forward expectation of an average SONIA or SOFR rate over a designated term.
SOFR is published by the Federal Reserve Bank of New York (the "Federal Reserve") and is intended to be a broad measure of the cost of borrowing cash overnight collateralised by Treasury securities and a current preferred replacement rate to U.S. dollar LIBOR. The future performance of SOFR cannot be predicted based on its historical performance. The level of SOFR over the term of Floating Rate Notes may bear little or no relation to the historical level of SOFR. Prior observed patterns, if any in the behaviour of market variables, such as correlations, may change in the future.
While some pre-publication hypothetical performance data have been published by the Federal Reserve, such data inherently involve assumptions, estimates and approximations. The future performance of SOFR is impossible to predict based on its historical performance and therefore no future performance of SOFR or Floating Rate Notes linked to or which reference a SOFR rate may be inferred from any of the hypothetical or actual historical performance data. Hypothetical or actual historical performance data are not indicative of, and have no bearing on, the potential performance of SOFR or Floating Rate Notes linked to or which reference a SOFR rate.
The market, or a significant part thereof, may adopt an application of SONIA and/or SOFR that differs significantly from that set out in the Terms and Conditions of the Notes. As each of SONIA and SOFR is published and calculated by third parties based on data received from other sources, the Issuer has no control over their respective determinations, calculations or publications. Furthermore, the Issuermay in future issue Notes referencing SONIA and/or SOFR that differ materially in terms of interest determination when compared with any previous SONIA-referenced Notes and/or SOFR-referenced Notes respectively issued under the Programme. The nascent development of Compounded Daily SOFR as an interest reference rate for the Eurobond markets, as well as continued development of SONIA-based and SOFR-based rates for such market and the market infrastructure for adopting such rates, could result in reduced liquidity or increased volatility or could otherwise affect the market price of any SONIA-referenced and/or SOFRreferenced Notes issued under the Programme from time to time. There can be no guarantee that SONIA and/or SOFR will not be discontinued or fundamentally altered in a manner that is materially adverse to the interests of investors in Floating Rate Notes linked to or which reference a SONIA rate or a SOFR rate (or that any applicable benchmark fallback provisions provided for in the Terms and Conditions of the Notes will provide a rate which is economically equivalent for Noteholders). Neither the Bank of England nor the Federal Reserve has an obligation to consider the interests of Noteholders in calculating, adjusting, converting, revising or discontinuing SONIA or SOFR, respectively. If the manner in which SONIA and/or SOFR is calculated is changed, that change may result in a reduction of the amount of interest payable on such Notes and the trading prices of such Notes.
Furthermore, the Rate of Interest payable on Floating Rate Notes which reference a SONIA rate or a SOFR rate is only capable of being determined at the end of the relevant Interest Accrual Period and immediately prior to the relevant Interest Payment Date. It may therefore be difficult for investors in Floating Rate Notes which reference a SONIA rate or a SOFR rate to reliably estimate the amount of interest which will be payable on such Notes. Further, in contrast to LIBOR-based Notes, if Notes referencing SONIA or SOFR become due and payable as a result of an Event of Default under Condition 10 in each of the Senior Notes, Tier 3 Notes and Tier 2 Notes, are otherwise redeemed early on a date which is not an Interest Payment Date, the final Rate of Interest payable in respect of such Notes shall only be determined immediately prior to the date on which the Notes become due and payable and shall not be reset thereafter.
Investors should also be aware that the manner of adoption or application of SONIA or SOFR as reference rates in the international debt capital markets may differ materially compared with the application and adoption o f SONIA and SOFR in other markets, such as the derivatives and loan markets. Investors should carefully consider how any mismatch between the adoption of SONIA or SOFR as reference rates across these markets may impact any hedging or other arrangements which they may put in place in connection with any acquisition, holding or disposal of Floating Rate Notes linked to or which reference a SONIA rate or a SOFR rate.
Furthermore, interest on Notes which reference Compounded Daily SONIA is only capable of being determined at the end of the relevant Observation Period on the relevant Interest Determination Date. It may be difficult for investors in Notes which reference Compounded Daily SONIA to estimate reliably the amount of interest which will be payable on such Notes, and some investors may be unable or unwilling to trade such Notes without changes to their IT systems, both of which could adversely impact the liquidity of such Notes. Further, in contrast to LIBOR or EURIBOR-based Notes, if Notes referencing Compounded Daily SONIA become due and payable as a result of an Event of Default under Condition 10 in each of the Senior Notes, Tier 3 Notes and Tier 2 Notes, the Rate of Interest payable for the final
Interest Accrual Period in respect of such Notes shall only be determined on the date on which such Notes become due and payable and shall not be reset thereafter.
Since SONIA and SOFR are relatively new market indices (with publication of SOFR having only commenced on 3 April 2018, for example), Floating Rate Notes linked to or which reference a SONIA rate or a SOFR rate may have no established trading market when issued, and an established trading market may never develop or may not be very liquid. Market terms for debt securities linked to or which reference a SONIA rate or a SOFR rate may evolve over time and trading prices of such Notes may be lower than those of the later issued Notes that are linked to or which reference a SONIA rate or a SOFR rate as a result. Further, if SONIA or SOFR do not prove to be widely used in securities like the Notes, the trading price of Floating Rate Notes linked to or which reference a SONIA rate or a SOFR rate may be lower than those of Notes linked to or which reference indices that are more widely used. Investors in such Notes may not be able to sell such Notes at all or may not be able to sell such Notes at prices that will provide them with a yield comparable to similar investments that have a developed secondary market, and may consequently suffer from increased pricing volatility and market risk.
Furthermore, the Issuer may in future issue Notes referencing SONIA or SOFR that differ materially in terms of interest determination when compared with any previous SONIA or SOFR-reference Notes issued under the Programme. The nascent development of Compounded Daily SONIA, Compounded Daily SOFR and Weighted Average SOFR as interest reference rates for the Eurobond markets, as well as continued development of SONIA and SOFR-based rates for such market and the market infrastructure for adopting such rates, could result in reduced liquidity or increased volatility or could otherwise affect the market price of any SONIA or SOFR-reference Notes issued under the Programme from time to time.
Investors should consider these matters when making their investment decision with respect to any such Floating Rate Notes linked to or which reference a SONIA rate or a SOFR rate.
Notes may have no established trading market when issued, and one may never develop. If a market does develop, it may not be liquid. Therefore, investors may not be able to sell their Notes easily or at prices that will provide them with a yield comparable with similar investments that have a developed secondary market. 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 Specified Currency. This presents certain risks relating t o 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 Currency equivalent value of the principal payable on the Notes and (3) the Investor's Currency equivalent market value of the Notes.
Investments in Fixed Rate Notes and Fixed Rate Reset Notes involves the risk that changes in market interest rates after the Issue Date and, in the case of Fixed Rate Reset Notes only, after the First Reset Note Reset Date or each Reset Note Reset Date (as applicable), may adversely affect the value of Fixed Rate Notes and, as the case may be, Fixed Rate Reset Notes.
One or more independent credit rating agencies may assign credit ratings to an issue of Notes. The ratings may not reflect the potential impact of all risks related to structure, market, additional factors discussed above, and other factors that may affect the value of the Notes. Changes in methodology and criteria used by such credit agencies could also result in downgrades to the credit ratings initially assigned to an issue of Notes that do not reflect changes in the general economic conditions or the Issuer's financial condition. A credit rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating agency at any time.
This Prospectus should be read and construed in conjunction with the following documents which have been prev iously published or are published simultaneously with this Prospectus and which have been approved by the FCA or filed with it:
Such documents shall be deemed to be incorporated in, and form part of, this Prospectus, approved by the FCA for the purpose of the Prospectus Regulation, save that any statement contained in a document which is deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purpose of this Prospectus to the extent that a statement contained herein 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 Prospectus. Where a document listed above has been extracted from another document, the remainder of the document from which it is extracted is not relevant for the purposes of this Prospectus. Any documents themselves incorporated by reference in the documents incorporated by reference in this Pro spectus shall not constitute part of this Prospectus. Items (1) and (3) listed above were prepared in accordance with applicable law and International Financial Reporting Standards ("IFRS") as adopted by the EU.
Certain alternative performance measures ("APMs") are included or referred to in this Prospectus. APMs are non-GAAP measures used by the Group within its financial publications to supplement disclosures prepared in accordance with other regulations such as IFRS and the Solvency II Directive. The Issuer considers that these measures provide useful information to enhance the understanding of financial performance. The APMs should be viewed as complementary to, rather than a substitute for, the figures determined according to other regulatory measures. APMs have been referenced using the "‡" in the Issuer's Annual Report and Accounts for the year ended 31 December 2019, and an explanation of each such metric's components and calculation method can be found at pages 254 to 258 (incorporated by reference herein) of the Issuer's Annual Report and Accounts for the year ended 31 December 2018; and pages 275 to 283 (incorporated by reference herein) of the Issuer's Annual Report and Accounts for the year ended 31 December 2019.
The following is the text of the terms and conditions that, subject to completion and as supplemented in accordance with the provisions of Part A of the relevant Final Terms or, in the case of PR Exempt Notes, the relevant Pricing Supplement, shall be applicable to the Senior Notes in definitive form (if any) issued in exchange for the Global Note(s) or Certificates representing each Series of Senior Notes. The full text of these terms and conditions together with the relevant provisions of Part A of the Final Terms or Pricing Supplement (as applicable) shall be endorsed on such Bearer Notes or on the Certificates relating to such Registered Notes. Accordingly, references in these terms and conditions to provisionsspecified hereon shall be to the provisions endorsed on the face of the relevant Note or set out in the relevant Final Terms or Pricing Supplement (as applicable). The relevant Pricing Supplement in relation to the PR Exempt Notes may specify other terms and conditions which shall, to the extent so specified or to the extent inconsistent with these Terms and Conditions, replace or modify these Terms and Conditions for the purposes of this Note. All capitalised terms that are not defined in these Conditions will have the meanings given to them in Part A of the relevant Final Terms or Pricing Supplement. Those definitions will be endorsed on the definitive Notes or Certificates, as the case may be. References in the Conditions to "Notes" are to the Senior Notes of one Series only, not to all Notes that may be issued under the Programme.
The Notes are constituted by a Trust Deed (as amended or supplemented as at the date of issue of the Notes) (the "Issue Date"), (the "Trust Deed") dated 1 May 2020 between Aviva plc (the "Issuer") and the Law Debenture Trust Corporation p.l.c. (the "Trustee", which expression shall include all persons for the time being the trustee or trustees under the Trust Deed) as trustee for the Noteholders (as defined below). These terms and conditions include summaries of, and are subject to, the detailed provisions of the Trust Deed, which includes the form of the Bearer Notes, Certificates, Coupons and Talons referred to below. An Agency Agreement dated 22 April 2016 (as amended or supplemented as at the Issue Date) (the "Agency Agreement") has been entered into in relation to the Notes between the Issuer, the Trustee, HSBC Bank plc as initial issuing and paying agent and the other agents named in it. The issuing and paying agent, the paying agents, the registrar, the transfer agents and the calculation agent(s) for the time being (if any) are referred to below respectively as the "Issuing and Paying Agent", the "Paying Agents" (which expression shall include the Issuing and Paying Agent), the "Registrar", the "Transfer Agents" (which expression shall include the Registrar) and the "Calculation Agent(s)". Copies of the Trust Deed and the Agency Agreement are available for inspection during usual business hours and upon reasonable notice at the principal office of the Trustee (presently at Fifth Floor, 100 Wood Street, London EC2V 7EX, United Kingdom) and at the specified offices of the Paying Agents and the Transfer Agents (the Trust Deed is also available at the website of the Issuer at https://www.aviva.com/investors/).
The Noteholders and the holders of the interest coupons (the "Coupons") relating to interest-bearing Notes in bearer form and, where applicable in the case of such Notes, talons for further Coupons (the "Talons") (the "Couponholders") are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and are deemed to have notice of those provisions applicable to them of the Age ncy Agreement.
As used in these Conditions, "Tranche" means Notes which are identical in all respects.
The Notes are issued in bearer form ("Bearer Notes") or in registered form ("Registered Notes") in each case in the Specified Denomination(s) shown hereon provided that in the case of any Notes which are to be admitted to trading on a regulated market within the European Economic Area (or the United Kingdom) or offered to the public in a Member State of the European Economic Area (or the United Kingdom) in circumstances which require the publication of a Prospectus under the Prospectus Regulation (Regulation (EU) 2017/1129, as amended or superseded), the minimum Specified Denomination shall be at least €100,000 (or its equivalent in any other currency as at the date of issue of the relevant Notes).
This Note is a Fixed Rate Note, a Floating Rate Note (which shall include a SONIA Linked Interest Note, a Compounded Daily SOFR Linked Interest Note or a Weighted Average SOFR Linked Interest Note if this Note is specified as such in the Final Terms or Pricing Supplement) or a Zero Coupon Note or a combination of any of the foregoing, depending upon the Interest Basis and Redemption Basis shown hereon.
Bearer Notes are serially numbered and are issued with Coupons (and, where appropriate, a Talon) attached, save in the case of Zero Coupon Notes in which case references to interest (other than in relation to interest due after the Maturity Date), Coupons and Talons in these Conditions are not applicable.
Registered Notes are represented by registered certificates ("Certificates") and, save as provided in Condition 2(b), each Certificate shall represent the entire holding of Registered Notes by the same holder.
Title to the Bearer Notes and the Coupons and Talons shall pass by delivery. Title to the Registered Notes shall pass by registration in the register that the Issuer shall procure to be kept by the Registrar in accordance with the provisions of the Agency Agreement (the "Register"). Except as ordered by a court of competent jurisdiction or as required by law, the holder (as defined below) of any Note, Coupon or Talon shall be deemed to be and may be treated as its absolute owner for all purposes whether or not it is overdue and regardless of any notice of ownership, trust or an interest in it, any writing on it (or on the Certificate representing it) or its theft or loss (or that of the related Certificate) and no person shall be liable for so treating the holder.
In these Conditions, "Noteholder" means the bearer of any Bearer Note or the person in whose name a Registered Note is registered (as the case may be), "holder" (in relation to a Note, Coupon or Talon) means the bearer of any Bearer Note, Coupon or Talon or the person in whose name a Registered Note is registered (as the case may be) and capitalised terms have the meanings given to them hereon and in the Trust Deed.
One or more Registered Notes may be transferred upon the surrender (at the specified office of the Registrar or any Transfer Agent) of the Certificate representing such Registered Notes to be transferred, together with the form of transfer (as set out in Schedule 1 of the Trust Deed) endorsed on such Certificate, (or another form of transfer substantially in the same form and containing the same representations and certifications (if any), unless otherwise agreed by the Issuer), duly completed and executed and any other evidence as the Registrar or Transfer Agent may reasonably require. In the case of a transfer of part only of a holding of Registered Notes represented by one Certificate, a new Certificate shall be issued to the transferee in respect of the part transferred and a further new Certificate in respect of the balance of the holding not transferred shall be issued to the transferor. All transfers of Notes and entries on the Register will be made subject to the detailed regulations concerning transfers of Notes scheduled to the Agency Agreement. The regulations may be changed by the Issuer, with the prior written approval of the Registrar and the Trustee. A copy of the current regulations will be made available by the Registrar to any Noteholder upon request.
In the case of an exercise of an Issuer's or Noteholders' option in respect of a holding of Registered Notes represented by a single Certificate or a partial redemption of a holding of Registered Notes represented by a single Certificate, a new Certificate shall be issued to the holder to reflect the exercise of such option or in respect of the balance of the holding not redeemed. In the case of a partial exercise of an option resulting in Registered Notes of the same holding having different terms, separate Certificates shall be issued in respect of those Notes of that holding that have the same terms. New Certificates shall only be issued against surrender of the existing Certificates to the Registrar or any Transfer Agent. In the case of a transfer of Registered Notes to a person who is already a holder of Registered Notes, a new Certificate representing the enlarged holding shall only be issued against surrender of the Certificate representing the existing holding.
Each new Certificate to be issued pursuant to Condition 2(a) or (b) shall be available for delivery within three business days of receipt of the form of transfer or Exercise Notice (as defined in Condition 6(e)) and su rrender of the Certificate for exchange. Delivery of the new Certificate(s) shall be made at the specified office of the Transfer Agent or of the Registrar (as the case may be) to whom delivery or surrender of such form of transfer, Exercise Notice or Certificate shall have been made or, at the option of the holder making such delivery or surrender as aforesaid and as specified in the relevant form of transfer, Exercise Notice or otherwise in writing, be mailed by uninsured post at the risk of the holder entitled to the new Certificate to such address as may be so specified, unless such holder requests otherwise and pays in advance to the relevant Transfer Agent the costs of such other method of delivery and/or such insurance as it may specify. In this Condition 2(c), "business day" means a day, other than a Saturday or Sunday, on which banks are open for business in the place of the specified office of the relevant Transfer Agent or the Registrar (as the case may be).
Exchange and transfer of Notes and Certificates on registration, transfer, exercise of an option or partial redemption shall be effected without charge by or on behalf of the Issuer, the Registrar or the Transfer Agents, but upon payment of any tax or other governmental charges by the person submitting such Notes or Certificates that may be imposed in relation to it (or the giving of such indemnity as the Registrar or the relevant Transfer Agent may require).
No Noteholder may require the transfer of a Registered Note to be registered (i) during the period of 15 days ending on the due date for redemption of that Note, (ii) during the period of 15 days prior to any date on which Notes may be called for redemption by the Issuer at its option pursuant to Condition 6(d), (iii) after any such Note has been called for redemption or (iv) during the period of seven days ending on (and including) any Record Date.
The Notes and the Coupons relating to them constitute (subject to Condition 4) unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference among themselves. The payment obligations of the Issuer under the Notes and the Coupons relating to them shall, save for such exceptions as may be provided by applicable legislation and subject to Condition 4, at all times rank at least equally with all other unsecured and unsubordinated indebtedness and monetary obligations of the Issuer, present and future.
So long as any of the Notes remains outstanding (as defined in the Trust Deed) the Issuer shall not create or have outstanding any mortgage, charge, pledge, lien or other encumbrance (other than any arising by operation of law) upon the whole or any part of its undertakings or assets (other than assets representing the fund or funds maintained by the Issuer in respect of long-term business (as defined in the Financial Services and Markets Act 2000)) present or future, to secure any Relevant Indebtedness (as defined below) or to secure any guarantee or indemnity in respect thereof, without simultaneously with, or prior to, the creation of such security, securing the Notes equally and rateably therewith to the satisfaction of the Trustee, or providing other security therefor which the Trustee in its absolute discretion shall deem not materially less beneficial to the Noteholders or as shall be approved by an Extraordinary Resolution (as defined in the Trust Deed) of the Noteholders.
"Relevant Indebtedness" means any indebtedness for moneys borrowed (as defined in Condition 10) (other than (i) indebtedness which has a stated maturity not exceeding one year or (ii) any indebtedness which comprises non-recourse borrowings (as defined below) and which, in either case, is in the form of, or represented or evidenced by, bonds, notes, debentures, loan stock or other securities which, with the agreement of the Issuer, are quoted, listed, dealt in or traded on a stock exchange or over-the-counter or other recognised securities market.
"non-recourse borrowings" means any indebtedness for moneys borrowed to finance the ownership, acquisition, development and/or operation of an asset in respect of which the person or persons to whom any such indebtedness for moneys borrowed is or may be owed by the relevant borrower has or have no recourse whatsoever to the Issuer or any of its Subsidiaries for the repayment thereof other than:
"Subsidiary" means any entity which is for the time being a subsidiary (within the meaning of Section 1159 of the Companies Act 2006).
Each Fixed Rate Note bears interest on its outstanding nominal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest being payable in arrear on each Interest Payment Date specified hereon. The amount of interest payable shall be determined in accordance with Condition 5(f).
(i) Interest Payment Dates: Each Floating Rate Note bears interest on its outstanding nominal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest being payable in arrear on each Interest Payment Date. The amount of interest payable shall be determined in accordance with Condition 5(f). Such Interest Payment Date(s) is/are either shown hereon as Specified Interest Payment Dates or, if no Specified Interest Payment Date(s) is/are shown hereon, "Interest Payment Date" shall mean each date which falls the number of months or other period shown hereon as the
Interest Period after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest Commencement Date.
Where ISDA Determination is specified hereon as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each relevant Interest Accrual Period shall be determined by the Calculation Agent as a rate equal to the relevant ISDA Rate. For the purposes of this sub-paragraph (A), "ISDA Rate" for an Interest Accrual Period means a rate equal to the Floating Rate that would be determined by the Calculation Agent under a Swap Transaction under the terms of an agreement incorporating the ISDA Definitions and under which:
For the purposes of this sub-paragraph (A), "Floating Rate", "Calculation Agent", "Floating Rate Option", "Designated Maturity", "Reset Date" and "Swap Transaction" have the meanings given to those terms in the ISDA Definitions.
(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 either 11.00 a.m. (London time in the case of LIBOR or Brussels time in the case of EURIBOR) or 10.00 a.m. Toronto time, in the case of CDOR, on the Interest Determination Date in question as determined by the Calculation 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 Calculation Agent for the purpose of determining the arithmetic mean of such offered quotations.
(y) if the Relevant Screen Page is not available or if, sub-paragraph (x)(1) applies and no such offered quotation appears on the Relevant Screen Page or if sub-paragraph (x)(2) above applies and fewer than three such offered quotations appear on the Relevant Screen Page in each case as at the time specified above, subject as provided below, the Calculation Agent shall request, if the Reference Rate is LIBOR, the principal London office of each of the Reference Banks or, if the Reference Rate is EURIBOR, the principal Eurozone office of each of the Reference Banks or, if the Reference Rate is CDOR, the principal Toronto office of each of the Reference Banks, to provide the Calculation Agent with its offered quotation (expressed as a percentage rate per annum) for the Reference Rate if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time), or, if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time), or, if the Reference
Rate is CDOR, at approximately 10.00 a.m. (Toronto time) on the Interest Determination Date in question. If two or more of the Reference Banks provide the Calculation Agent with such offered quotations, the Rate of Interest for such Interest Accrual Period shall be the arithmetic mean of such offered quotations as determined by the Calculation Agent; and
Where the Reference Rate is specified as being SONIA, the Rate of Interest for each Interest Accrual Period will, subject to the provisions of Condition 5(b)(iii)(F) and as provided below, be Compounded Daily SONIA plus or minus (as indicated in the Final Terms or Pricing Supplement) the Margin (if any), all as determined by the Calculation Agent (or such other party responsible for the calculation of the Rate of Interest, as specified in the Final Terms or Pricing Supplement) on the Interest Determination Date for such Interest Accrual Period.
For the purposes of this Condition 5(b)(iii)(C):
"Compounded Daily SONIA" means with respect to an Interest Accrual Period, the rate of return of a daily compound interest investment during the Observation Period corresponding to such Interest Accrual Period (with the daily Sterling overnight reference rate as reference rate for the calculation of interest) and will be calculated by the Calculation Agent (or such other party responsible for the calculation of the Rate of Interest, as specified in the Final Terms or Pricing Supplement) on the relevant Interest Determination Date, as follows, and the resulting percentage will be rounded, if necessary, to the fifth decimal place, with 0.000005 being rounded upwards:
$$
\left[\prod_{i=1}^{d_o} \left(1 + \frac{SONIA_{i-pLBD} \times n_i}{365}\right) - 1\right] \times \frac{365}{d}
$$
Where:
"d" means the number of calendar days in the relevant Interest Accrual Period;
"d0" means the number of London Business Days in the relevant Interest Accrual Period;
"i" means a series of whole numbers from one to d0, each representing the relevant London Business Days in chronological order from, and including, the first London Business Day in the relevant Interest Accrual Period;
"London Business Day" or "LBD" means a day (other than a Saturday or Sunday) on which commercial banks are open for general business(including dealings in foreign exchange and foreign currency deposits) in London;
"ni" means, in relation to any London Business Day "i", the number of calendar days from and including such London Business Day "i" up to, but excluding, the following London Business Day;
"Observation Period" means, in respect of the relevant Interest Accrual Period, the period from, and including, the date falling "p" London Business Days prior to the first day of the relevant Interest Accrual Period (and the first Interest Accrual Period shall begin on and include the Interest Commencement Date) and ending on, but excluding, the date falling "p" London Business Days prior to the Interest Payment Date for such Interest Accrual Period (or the date falling "p" London Business Days prior to such earlier date, if any, on which the Notes become due and payable);
"p" means, for any Interest Accrual Period, the number of London Business Days included in the Observation Look-back Period, as specified in the relevant Final Terms or Pricing Supplement (or, if no such number is specified, five London Business Days);
the "SONIA reference rate", in respect of any London Business Day, is a reference rate equal to the daily Sterling Overnight Index Average ("SONIA") rate for such London Business Day as provided by the administrator of SONIA to authorised distributors and as then published on the Relevant Screen Page or, if the Relevant Screen Page is unavailable, as otherwise published by such authorised distributors (on the London Business Day immediately following such London Business Day); and
"SONIAi-pLBD" means, in respect of any London Business Day "i" falling in the relevant Interest Accrual Period, the SONIA reference rate for the London Business Day falling "p" London Business Days prior to the relevant London Business Day "i".
Subject to the provisions of Condition 5(b)(iii)(F), if, in respect of any London Business Day in the relevant Observation Period, the Calculation Agent (or such other party responsible for the calculation of the Rate of Interest, as specified in the Final Terms or Pricing Supplement) determines that the SONIA reference rate is not available on the Relevant Screen Page or has not otherwise been published by the relevant authorised distributors, such SONIA reference rate shall be:
Subject to the provisions of Condition 5(b)(iii)(F), if the Rate of Interest cannot be determined in accordance with paragraphs (x) and (y) by the Calculation Agent (or such other party responsible for the calculation of the Rate of Interest, as specified in the Final Terms or Pricing Supplement), the Rate of Interest shall be:
If the Notes become due and payable in accordance with Condition 10, the final Interest Determination Date shall, notwithstanding any Interest Determination Date specified in the Final Terms or Pricing Supplement, be deemed to be the date on which such Notes become due and payable and the Rate of Interest on the Notes shall, for so long as any of the Notes remain outstanding, be
determined on such date and as if (solely for the purpose of such interest determination) the relevant Interest Accrual Period had been shortened accordingly.
"Compounded Daily SOFR" means, in relation to an Interest Accrual Period, the rate of return of a daily compound interest investment (with SOFR as the reference rate for the calculation of interest) and will be calculated by the Calculation Agent (or such other party responsible for the calculation of the Rate of Interest, as specified in the Final Terms or Pricing Supplement) on the relevant Interest Determination Date as follows, and the resulting percentage will be rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards:
$$
\left[\prod_{i=1}^{a_0} \left(1 + \frac{SOFR_i \times n_i}{360}\right) - 1\right] \times \frac{360}{d}
$$
Where:
"d" means, in relation to any Interest Accrual Period, the number of calendar days in such Interest Accrual Period;
"d0" means, in relation to any Interest Accrual Period, the number of U.S. Government Securities Days in such Interest Accrual Period;
"Federal Reserve's Website" means the website of the Board of Governors of the Federal Reserve System currently at http://www.federalreserve.gov, or any successor website;
"i" means, in relation to any Interest Accrual Period, a series ofwhole numbers from one to d0, each representing the relevant U.S. Government Securities Business Day in chronological order from (and including) the first U.S. Government Securities Business Day in such Interest Accrual Period;
"ni" means, in relation to any U.S. Government Securities Business Day "i", the number of calendar days from (and including) such U.S. Government Securities Business Day "i" up to (but excluding) the following U.S. Government Securities Business Day;
"New York City Banking Day" means any day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in New York City;
"New York Federal Reserve's Website" means the website of the Federal Reserve Bank of New York currently at http://www.newyorkfed.org, or any successor website of the Federal Reserve Bank of New York or the website of any successor administrator;
"OBFR" or "Overnight Bank Funding Rate" means, in relation to any New York City Banking Day (the "OBFR Determination Date"), the daily Overnight Bank Funding Rate as published by the Federal Reserve Bank of New York, as the administrator of such rate (or any successor administrator) at or around 5:00 pm (New York City time) on the New York Federal Reserve's Website on the next succeeding New York City Banking Day for such OBFR Determination Date;
"OBFR Index Cessation Effective Date" means, in relation to an OBFR Index Cessation Event, the date on which the Federal Reserve Bank of New York (or any successor administrator of the daily Overnight Bank Funding Rate) ceases to publish the daily Overnight Bank Funding Rate or the date as of which the daily Overnight Bank Funding Rate may no longer be used;
"OBFR Index Cessation Event" means the occurrence of one or more of the following events:
"SIFMA" means the Securities Industry and Financial Markets Association (or any successor thereto);
(a) subject to (b) below, "SOFR" in relation to each SOFR Reset Date falling on or after the SOFR Index Cessation Effective Date shall be equal to the rate determined in accordance with (1) or (2) above (as applicable) but as if:
(b) if the rate specified in (a) above is not so published and an OBFR Index Cessation Event and an OBFR Index Cessation Effective Date have both occurred, then, in relation to each SOFR Reset Date falling on or after the later of the SOFR Index Cessation Effective Date and the OBFR Index Cessation Effective Date, "SOFR" shall be equal to the rate determined in accordance with (1) above but as if:
"SOFR Index Cessation Event" means the occurrence of one or more of the following events:
"SOFR Reset Date" means, in relation to any Interest Accrual Period, each U.S. Government Securities Business Day during such Interest Accrual Period, other than any U.S. Government Securities Business Day in the Cut-Off Period;
"SOFRi" means, in relation to any Interest Accrual Period and any U.S. Government Securities Business Day "i", SOFR in respect of that day "i"; and
"U.S. Government Securities Business Day" means any day except for a Saturday, Sunday or a day on which SIFMA recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
"Weighted Average SOFR" means, in relation to any Interest Accrual Period, the arithmetic mean of SOFRi in effect for each U.S. Government Securities Business Day during such Interest Accrual Period (each such U.S. Government Securities Business Day, "i"), calculated by multiplying the relevant SOFRifor any U.S. Government Securities Business Day "i" by the number of days such SOFRi is in effect (being the number of calendar days from (and including) such U.S. Government Securities Business Day "i" up to (but excluding) the following U.S. Government Securities Business Day), determining the sum of such products and dividing such sum by the number of calendar days in the relevant Interest Accrual Period. Where:
"Federal Reserve's Website" means the website of the Board of Governors of the Federal Reserve System currently at http://www.federalreserve.gov, or any successor website;
"New York City Banking Day" means any day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in New York City;
"New York Federal Reserve's Website" means the website of the Federal Reserve Bank of New York currently at http://www.newyorkfed.org, or any successor website of the Federal Reserve Bank of New York or the website of any successor administrator;
"OBFR" or "Overnight Bank Funding Rate" means, in relation to any New York City Banking Day (the "OBFR Determination Date"), the daily Overnight Bank Funding Rate as published by the Federal Reserve Bank of New York, as the administrator of such rate (or any successor administrator) at or around 5:00 pm (New York City time) on the New York Federal Reserve's Website on the next succeeding New York City Banking Day for such OBFR Determination Date;
"OBFR Index Cessation Effective Date" means, in relation to an OBFR Index Cessation Event, the date on which the Federal Reserve Bank of New York (or any success or administrator of the daily Overnight Bank Funding Rate) ceases to publish the daily Overnight Bank Funding Rate or the date as of which the daily Overnight Bank Funding Rate may no longer be used;
"OBFR Index Cessation Event" means the occurrence of one or more of the following events:
"SIFMA" means the Securities Industry and Financial Markets Association (or any successor thereto);
Interest Accrual Period up to (but excluding) the SOFR Index Cessation Effective Date and (y) SOFRi in effect for each New York City Banking Day in such Interest Accrual Period from (and including) the SOFR Index Cessation Effective Date, and the definition of "Weighted Average SOFR" shall be construed accordingly); and
(ii) the reference in paragraph (1) above to the "daily Secured Overnight Financing Rate published at or around 5:00 p.m. (New York City time) on the New York Federal Reserve's Website on the next succeeding U.S. Government Securities Business Day" were a reference to the short-term interest rate target set by the Federal Open Market Committee, as published on the Federal Reserve's Website and as prevailing on the SOFR Reset Date, or if the Federal Open Market Committee has not set a single rate, the mid-point of the short-term interest rate target range set by the Federal Open Market Committee, as published on the Federal Reserve's Website and as prevailing on the SOFR Reset Date (calculated as the arithmetic average of the upper bound of the target range and the lower bound of the target range, rounded, if necessary, to the nearest second decimal place with 0.005 being rounded upwards);
"SOFR Index Cessation Effective Date" means, in relation to a SOFR Index Cessation Event, the date on which the Federal Reserve Bank of New York (or any successor administrator of the daily Secured Overnight Financing Rate) ceases to publish the daily Secured Overnight Financing Rate, or the date as of which the daily Secured Overnight Financing Rate may no longer be used;
"SOFR Index Cessation Event" means the occurrence of one or more of the following events:
"SOFR Reset Date" means, in relation to any Interest Accrual Period, each U.S. Government Securities Business Day during such Interest Accrual Period, other than any U.S. Government Securities Business Day in the Cut-Off Period;
"SOFRi" means, in relation to any Interest Accrual Period and any U.S. Government Securities Business Day "i", SOFR in respect of that day "i"; and
"U.S. Government Securities Business Day" means any day except for a Saturday, Sunday or a day on which SIFMA recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
(F) Benchmark Discontinuation
If:
then the following provisions shall apply to the Floating Rate Notes:
for determining, such Adjustment Spread, then such Adjustment Spread shall be applied to such Successor Reference Rate or Alternative Reference Rate (as applicable). For the avoidance of doubt, if the relevant Independent Adviser or the Issuer (as applicable) is unable to (i) determine whether an Adjustment Spread is required or (ii) calculate such Adjustment Spread, then the Rate of Interest applicable to the next succeeding Interest Period shall be equal to the Rate of Interest determined as at the last preceding Interest Determination Date or, in the case of the first Interest Determination Date, the Rate of Interest shall be the Initial Rate of Interest. Where a different Margin or Maximum or Minimum Rate of Interest is to be applied to the relevant Interest Period from that which applied to the last preceding Interest Period, the Margin or Maximum or Minimum Rate of Interest relating to the relevant Interest Period shall be substituted in place of the Margin or Maximum or Minimum Rate of Interest relating to that last preceding Interest Period); or
Prior to any such waivers and/or consequential amendments taking effect, the Issuer shall provide a certificate signed by two Directors or other Authorised Signatories (as defined in the Trust Deed) of the Issuer to the Trustee and the Issuing and Paying Agent (i) confirming that a Benchmark Event has occurred and (ii) that such waivers and/or Benchmark Amendments are required to give effect to any application of this Condition 5(b)(iii)(F) and the Trustee and the Issuing and Paying Agent shall be entitled to rely on such certificate without further enquiry or liability to any person. For the avoidance of doubt, the Trustee shall not be liable to the Noteholders or any other person for so acting or relying, irrespective of whether any such modification is or may be materially prejudicial to the interests of any such person. Such changes shall apply to all future payments of interest on the Notes (subject to the subsequent operation of this Condition 5(b)(iii)(F).
The Trustee shall not be obliged to agree to any modification if in the sole opinion of the Trustee doing so would impose more onerous obligations upon it or expose it to any additional duties, responsibilities or liabilities or reduce rights and/or the protective provisions afforded to the Trustee in these Conditions or the Trust Deed.
No consent of the Noteholders shall be required in connection with effecting the relevant Successor Reference Rate or Alternative Reference Rate as described in this Condition 5(b)(iii)(F) or such other relevant adjustments pursuant to this Condition 5(b)(iii)(F), or any Adjustment Spread, including for the execution of, or amendment to, any documents (including, inter alia, by the execution of a deed supplemental to or amending the Trust Deed) or the taking of other steps by the Issuer or any of the parties to the Trust Deed and/or the Agency Agreement (if required).
Where a Note the Interest Basis of which is specified to be Zero Coupon is repayable prior to the Maturity Date specified hereon and is not paid when due, the amount due and payable prior to the Maturity Date shall be the Early Redemption Amount of such Note (as described in Condition 6(b)(i)). As from the Maturity Date, the Rate of Interest for any overdue principal of such a Note shall be a rate per annum (expressed as a percentage) equal to the Amortisation Yield (as described in Condition 6(b)(i)).
Interest shall cease to accrue on each Note on the due date for redemption unless, upon due presentation, payment is improperly withheld or refused, in which event interest shall continue to accrue (as well a fter as before judgement) at the Rate of Interest in the manner provided in this Condition 5 to the Relevant Date (as defined in Condition 8).
The amount of interest payable per Calculation Amount in respect of any Note for any Interest Accrual Period shall be equal to the product of the Rate of Interest, the Calculation Amount specified hereon, and the Day Count Fraction for such Interest Accrual Period, unless an Interest Amount (or a formula for its calculation) is applicable to such Interest Accrual Period, in which case the amount of interest payable per Calculation Amount in respect of such Note for such Interest Accrual Period shall equal such Interest Amount (or be calculated in accordance with such formula). Where any Interest Period comprises two or more Interest Accrual Periods, the amount of interest payable per Calculation Amount in respect of such Interest Period shall be the sum of the Interest Amounts payable in respect of each of those Interest Accrual Periods. In respect of any other period for which interest is required to be calculated, the provisions above shall apply save that the Day Count Fraction shall be for the period for which interest is required to be calculated. Where the Specified Denomination comprises more than one Calculation Amount, the amount of interest payable in respect of such Note shall be the aggregate of the amounts (determined in the manner provided above) for each Calculation Amount comprising the Specified Denomination specified hereon.
The Calculation Agent shall, as soon as practicable on each Interest Determination Date, or such other time on such date as the Calculation Agent may be required to calculate any rate or amount, obtain any quotation or make any determination or calculation, determine such rate and calculate the Interest Amounts for the relevant Interest Accrual Period, calculate the Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount (as may be provided for hereon), obtain such quotation or make such determination or calculation, as the case may be, and cause the Rate of Interest and the Interest Amounts for each Interest Accrual Period and the relevant Interest Payment Date and, if required to be calculated, the Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount to be notified to the Trustee, the Issuer, each of the
Paying Agents, the Noteholders, any other Calculation Agent appointed in respect of the Notes that is to make a further calculation upon receipt of such information and, if the Notes are listed on a stock exchange and the rules of such exchange or other relevant authority so require, such exchange or other relevant authority as soon as possible after their determination but in no event later than (A) the commencement of the relevant Interest Period, if determined prior to such time, in the case of notification to such exchange of a Rate of Interest and Interest Amount, or (B) in all other cases, the fourth Business Day after such determination. Where any Interest Payment Date or Interest Period Date is subject to adjustment pursuant to Condition 5(b)(ii), the Interest Amounts and the Interest Payment Date so published may subsequently be amended (or appropriate alternative arrangements made with the consent of the Trustee by way of adjustment) without notice in the event of an extension or shortening of the Interest Period. If the Notes become due and payable under Condition 10, the accrued interest and the Rate of Interest payable in respect of the Notes shall nevertheless continue to be calculated as previously in accordance with this Condition but no publication of the Rate of Interest or the Interest Amount so calculated need be made unless the Trustee otherwise requires. The determination of any rate or amount, the obtaining of each quotation and the making of each determination or calculation by the Calculation Agent(s) shall (in the absence of manifest error) be final and binding upon all parties.
If the Calculation Agent does not at any time for any reason determine or calculate the Rate of Interest for an Interest Accrual Period or any Interest Amount, Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount, the Trustee shall do so (or shall appoint an agent on its behalf to do so) and such determination or calculation shall be deemed to have been made by the Calculation Agent. In doing so, the Trustee shall apply the foregoing provisions of this Condition, with any necessary consequential amendments, to the extent that, in its opinion, it can do so, and, in all other respects, it shall do so in such manner as it shall deem fair and reasonable in all the circumstances.
In these Conditions, unless the context otherwise requires, the following defined terms shall have the meanings set out below:
"Adjustment Spread" means either a spread (which may be positive, negative or zero) or formula or methodology for calculating a spread in either case, which the Independent Adviser, or the Issuer (as applicable) determines is required to be applied to a Successor Reference Rate or an Alternative Reference Rate (as applicable) in order to reduce or eliminate, to the extent reasonably practicable in the circumstances, any economic prejudice or benefit (as applicable) to Noteholders and Couponholders as a result of the replacement of the Original Reference Rate with such Successor Reference Rate or Alternative Reference Rate (as applicable) and is the spread, formula or methodology which:
"Alternative Reference Rate" means an alternative benchmark or screen rate which the relevant Independent Adviser or the Issuer (as applicable) determines in accordance with Condition 5(b)(iii)(F) is customarily applied in the international debt capital markets for the purposes of determining floating rates of interest in respect of notes denominated in the Specified Currency and of a comparable duration to the relevant Interest Period, and which, in the circumstances contemplated in limb (vi) of the definition of Benchmark Event shall be deemed to be the New Reference Rate.
(i) the Original Reference Rate ceasing to be published for a period of at least 5 Business Days or ceasing to exist; or
"Day Count Fraction" means, in respect of the calculation of an amount of interest on any Note for any period of time (from and including the first day of such period to but excluding the last) (whether or not constituting an Interest Period or Interest Accrual Period, the "Calculation Period"):
Day Count Fraction = [360 x (Y2 – Y1)] + [30 x (M2 – M1)] + (D2 – D1)
360
where:
"Y1" is the year, expressed as a number, in which the first day of the Calculation Period falls;
"Y2" is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
"M2" is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"D1" is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D1 will be 30; and
"D2" is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30;
(vi) if "30E/360" or "Eurobond Basis" is specified hereon, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
Day Count Fraction = [360 x (Y2 – Y1)] + [30 x (M2 – M1)] + (D2 – D1)
360
where:
"Y1" is the year, expressed as a number, in which the first day of the Calculation Period falls;
"Y2" is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
"M2" is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"D1" is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D1 will be 30; and
"D2" is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31, in which case D2 will be 30;
(vii) if "30E/360 (ISDA)" is specified hereon, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
Day Count Fraction = [360 x (Y2 – Y1)] + [30 x (M2 – M1)] + (D2 – D1)
360
where:
"Y1" is the year, expressed as a number, in which the first day of the Calculation Period falls;
"Y2" is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
"M2" is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"D1" is the first calendar day, expressed as a number, of the Calculation Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case D1 will be 30; and
"D2" is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would be 31, in which case D2 will be 30; and
(B) if the Calculation Period is longer than one Determination Period, the sum of:
(x) the number of days in such Calculation Period falling in the Determination Period in which it begins divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year; and
where:
"Determination Date" means the date specified as such hereon or, if none is so specified, the Interest Payment Date; and
"Determination Period" means the period from and including a Determination Date in any year to but excluding the next Determination Date.
"Eurozone" means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty on the Functioning of the European Union, as amended.
"FCA" means the UK Financial Conduct Authority in its capacity as the UK listing authority for the purposes of the Financial Services and Markets Act 2000 ("FSMA") or any successor authority appointed as the competent UK listing authority for the purposes of Part VI (Official Listing) of the FSMA or otherwise.
"FSB" means the Financial Stability Board.
"Independent Adviser" means an independent financial institution of international repute or other independent financial adviser experienced in the international debt capital markets.
"Interest Accrual Period" means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the first Interest Period Date and each successive period beginning on (and including) an Interest Period Date and ending on (but excluding) the next succeeding Interest Period Date.
"Interest Amount" means:
"Interest Commencement Date" means the Issue Date or such other date as may be specified hereon.
"Interest Determination Date" means, with respect to a Rate of Interest and Interest Accrual Period, the date specified as such hereon or, if none is so specified, (A) the first day of such Interest Accrual Period if the Specified Currency is Sterling or (B) the day falling two Business Days in London for the Specified Currency prior to the first day of such Interest Accrual Period if the Specified Currency is neither Sterling nor euro or (C) the day falling two TARGET Business Days prior to the first day of such Interest Accrual Period if the Specified Currency is euro.
"Interest Period" means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the first Interest Payment Date and each successive period beginning on (and including) an Interest Payment Date and ending on (but excluding) the next succeeding Interest Payment Date.
"Interest Period Date" means each Interest Payment Date unless otherwise specified hereon.
"ISDA Definitions" means the 2006 ISDA Definitions as amended or supplemented, as published by the International Swaps and Derivatives Association, Inc., unless otherwise specified hereon.
"Original Reference Rate" means the originally specified reference rate used to determine the Rate of Interest (or any component part thereof) (being LIBOR or EURIBOR or CDOR), in each case for the relevant period, as specified hereon.
"Rate of Interest" means the rate of interest payable from time to time in respect of this Note and that is either specified or calculated in accordance with the provisions hereon.
"Reference Banks" means, in the case of a determination of LIBOR, the principal London office of four major banks in the London inter-bank market, in the case of a determination of EURIBOR, the principal Eurozone office of four major banks in the Eurozone inter-bank market and in the case of a determination of CDOR, four major Canadian Schedule I chartered banks, in each case selected by the Calculation Agent or as specified hereon.
"Relevant Nominating Body" means, in respect of any Original Reference Rate:
"Relevant Screen Page"means such page, section, caption, column or other part of a particular information service as may be specified hereon.
"Specified Currency" means the currency specified as such hereon or, if none is specified, the currency in which the Notes are denominated.
"Successor Reference Rate" means the rate which has been formally published, endorsed, approved, recommended or recognised as a successor or replacement to the relevant Original Reference Rate by any Relevant Nominating Body.
"TARGET System" means the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET2) System or any successor thereto.
The Issuer shall procure that there shall at all times be one or more Calculation Agent(s) if provision is made for them hereon and for so long as any Note is outstanding (as defined in the Trust Deed). Where more than one Calculation Agent is appointed in respect of the Notes, references in these Conditions to the Calculation Agent shall be construed as each Calculation Agent performing its respective duties unde r the Conditions. If the Calculation Agent is unable or unwilling to act as such or if the Calculation Agent fails duly to establish the Rate of Interest for an Interest Accrual Period or to calculate any Interest Amount, Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount, as the case may be, or to comply with any other requirement, the Issuer shall (with the prior approval of the Trustee) appoint a leading bank or investment banking firm engaged in the interbank market (or, if appropriate, money, swap or over-the-counter index options market) that is most closely connected with the calculation or determination to be made by the Calculation Agent (acting through its principal London office or any other office actively involved in such market) to act as such in its place. The Calculation Agent may not resign its duties without a successor having been appointed as aforesaid.
Unless previously redeemed or purchased and cancelled as provided below, each Note shall be finally redeemed on the Maturity Date specified hereon at its Final Redemption Amount (which, unless otherwise provided hereon, is its nominal amount).
judgement) until the Relevant Date, unless the Relevant Date falls on or after the Maturity Date, in which case the amount due and payable shall be the scheduled Final Redemption Amount of such Note on the Maturity Date together with any interest that may accrue in accordance with Condition 5(c).
Where such calculation is to be made for a period of less than one year, it shall be made on the basis of the Day Count Fraction shown hereon.
(ii) Other Notes: The Early Redemption Amount payable in respect of any Note (other than Notes described in (i) above), upon redemption of such Note pursuant to Condition 6(c), Condition 6(d) or Condition 6(e) or upon it becoming due and payable as provided in Condition 10, shall be the Final Redemption Amount unless otherwise specified hereon.
The Notes may be redeemed at the option of the Issuer in whole, but not in part, on any Interest Payment Date (if this Note is a Floating Rate Note) or at any time (if this Note is not a Floating Rate Note), on giving not less than 30 nor more than 60 days' notice to the Noteholders (which notice shall be irrevocable) at their Early Redemption Amount (as described in Condition 6(b) above) (together with interest accrued to the date fixed for redemption) if immediately prior to the giving of the notice referred to above, as a result of a change in or proposed change in, or amendment or proposed amendment to, the laws or regulations of the UKor any political subdivision or authority therein or thereof having the power to tax, including any treaty to which the UK is a party, or any change in the application of official or generally published interpretation of such laws, including a decision of any court or tribunal, or any interpretation or pronouncement by any relevant tax authority that provides for a position with respect to such laws or regulations that differs from the previously generally accepted position in relation to similar transactions which change or amendment becomes, or would become, effective or in the case of a change or proposed change in law, if such change is enacted (or, in the case of a proposed change, is expected to be enacted) by UKAct of Parliament or by Statutory Instrument, on or after the Issue Date of the Notes, in making any payments on, or in connection with, the Notes, the Issuer has paid or will or would on the next payment date be required to pay Additional Amounts (as defined in Condition 8) on, or in connection with the Notes and the Issuer cannot avoid the foregoing in connection with the Notes by taking measures reasonably available to it.
Prior to the publication of any notice of redemption pursuant to this Condition 6(c), the Issuer shall deliver to the Trustee a certificate signed by two Directors or other Authorised Signatories (as defined in the Trust Deed) of the Issuerstating that the relevant requirement or circumstance referred to above applies and the Trustee shall accept such certificate as sufficient evidence of the satisfaction of the conditions precedent set out above in which event it shall be conclusive and binding on the Trustee, the Noteholders and the Couponholders. Upon expiry of such notice the Issuer shall redeem the Notes as aforesaid.
If a Call Option is specified hereon, the Issuer may, on giving not less than 15 nor more than 30 days' irrevocable notice to the Noteholders (or such other notice period as may be specified hereon) redeem all or, if so provided, some of the Notes on any Optional Redemption Date specified hereon. Any such redemption of Notes shall be at their Optional Redemption Amount (as may be provided for hereon) together with interest accrued to the date fixed for redemption. Any such redemption or exercise must relate to Notes of a nominal amount at least equal to the Minimum Redemption Amount to be redeemed specified hereon and no greater than the Maximum Redemption Amount to be redeemed specified hereon.
All Notes in respect of which any such notice is given shall be redeemed on the date specified in such notice in accordance with this Condition.
In the case of a partial redemption the notice to Noteholders shall also contain the certificate numbers of the Bearer Notes, or in the case of Registered Notes shall specify the nominal amount of Registered Notes drawn and the holder(s) of such Registered Notes, to be redeemed, which shall have been drawn in such place as the Trustee may approve and in such manner as it deems appropriate, subject to compliance with any applicable laws and stock exchange or other relevant authority requirements.
If a Put Option is specified hereon, the Issuer shall, at the option of the holder of any such Note, upon the holder of such Note giving not less than 15 nor more than 30 days' notice to the Issuer (or such other n otice period as may be specified hereon) redeem such Note on the Optional Redemption Date(s) at its Optional Redemption Amount specified hereon (which may be the Early Redemption Amount (as described in Condition 6(b) above)) together with interest accrued to the date fixed for redemption.
To exercise such option the holder must deposit (in the case of Bearer Notes) such Note (together with all unmatured Coupons and unexchanged Talons) with any Paying Agent or (in the case of Registered Notes) the
Certificate representing such Note(s) with the Registrar or any Transfer Agent at its specified office, together with a duly completed option exercise notice ("Exercise Notice") in the form obtainable from any Paying Agent, the Registrar or any Transfer Agent (as applicable) within the notice period. No Note or Certificate so deposited and option exercised may be withdrawn (except as provided in the Agency Agreement) without the prior consent of the Issuer.
The Issuer and any of its Subsidiaries may at any time purchase Notes (provided that all Coupons and unexchanged Talons relating thereto are attached thereto or surrendered therewith) in the open market or otherwise at any price.
All Notes purchased by or on behalf of the Issuer or any of its Subsidiaries may be surrendered for cancellation, in the case of Bearer Notes, by surrendering each such Note together with all Coupons and all unexchanged Talons to the Issuing and Paying Agent and, in the case of Registered Notes, by surrendering the Certificate representing such Notes to the Registrar and, in each case, if so surrendered, shall, together with all Notes redeemed by the Issuer, be cancelled forthwith (together with all unmatured Coupons and unexchanged Talons attached thereto or surrendered therewith). Any Notes so surrendered for cancellation may not be reissued or resold and the obligations of the Issuer in respect of any such Notes shall be discharged.
If more than one notice of redemption is given pursuant to this Condition 6, the first of such notices to be given shall prevail.
The Trustee shall not be under any duty to monitor whether any event or circumstance has happened or exists within this Condition 6 and will not be responsible to Noteholders for any loss arising from any failure or delay by the Trustee to do so. Unless and until the Trustee has actual knowledge of the occurrence of any event or circumstance within this Condition 6, it shall be entitled to assume that no such event or circumstance exists.
Payments of principal and interest in respect of Bearer Notes shall, subject as mentioned below, be made against presentation and surrender of the relevant Notes (in the case of all payments of principal and, in the case of interest, as specified in Condition 7(f)(v)) or Coupons (in the case of interest, save as specified in Condition 7(f)(ii)), as the case may be, at the specified office of any Paying Agent outside the U.S. by a cheque payable in the relevant currency drawn on, or, at the option of the holder, by transfer to an account denominated in such currency with, a Bank. "Bank" means a bank in the principal financial centre for such currency or, in the case of euro, in a city in which banks have access to the TARGET System.
Notwithstanding the foregoing, if any Bearer Notes are denominated in U.S. dollars, payments in respect thereof may be made at the specified office of any Paying Agent in New York City in the same manner as aforesaid if (i) the Issuer shall have appointed Paying Agents with specified offices outside the U.S. with the reasonable expectation that such Paying Agents would be able to make payment of the amounts on the Notes in the manner provided above when due, (ii) payment in full of such amounts at all such offices is illegal or effectively precluded by exchange controls or other similar restrictions on payment or receipt of such amounts and (iii) such payment is then permitted by U.S. law, without involving, in the opinion of the Issuer, any adverse tax consequence to the Issuer.
All payments are subject in all cases to any applicable fiscal or other laws, regulations and directives in any jurisdiction (whether by operation of law or agreement of the Issuer or its agents) and the Issuer will not be liable to pay any additional amount in respect of taxes or duties of whatever nature imposed or levied by or pursuant to such laws, regulations, directives or agreements, but without prejudice to the provisions of Condition 8. No commission or expenses shall be charged to the Noteholders or Couponholders in respect of such payments. For the purpose of this paragraph, the phrase "fiscal or other laws, regulations and directives" shall include any withholding or deduction imposed by sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended ("FATCA"), any regulations thereunder, any law implementing an inter-governmental approach thereto, any agreement entered into pursuant to FATCA, or any official interpretation of FATCA .
The Issuing and Paying Agent, the Paying Agents, the Registrar, the Transfer Agents and the Calculation Agent initially appointed by the Issuer and its specified office are listed below. The Issuing and Paying Agent, the Paying Agents, the Registrar, the Transfer Agents and the Calculation Agent act solely as agents of the Issuer and do not assume any obligation or relationship of agency or trust for or with any Noteholder or Couponholder. The Issuer reserves the right at any time with the approval of the Trustee to vary or terminate the appointment of the Issuing and Paying Agent, any other Paying Agent, the Registrar, any Transfer Agent or the Calculation Agent(s) and to appoint additional or other Paying Agents or Transfer Agents, provided that the Issuer shall at all times maintain (i) an Issuing and Paying Agent, (ii) a Registrar in relation to Registered Notes, (iii) a Transfer Agent in relation to Registered Notes, (iv) one or more Calculation Agent(s) where the Conditions so require, and (v) a Paying Agent having specified offices in London so long as the Notes are admitted to the Official List of the FCA in its capacity as competent authority under the Financial Services and Markets Act 2000 and admitted to trading on the Main Market of the London Stock Exchange.
In addition, the Issuer shall forthwith appoint a Paying Agent in New York City in respect of any Bearer Notes denominated in U.S. dollars in the circumstances described in paragraph (c) above.
Notice of any such change or any change of any specified office shall promptly be given to the Noteholders. If any additional Paying Agents are appointed in connection with any Series, the names of such Paying Agents will be specified in Part B of the applicable Final Terms or Pricing Supplement.
Maturity Date shall be payable on redemption of such Note against presentation of the relevant Note or Certificate representing it, as the case may be.
On or after the Interest Payment Date for the final Coupon forming part of a Coupon sheet issued in respect of any Bearer Note, the Talon forming part of such Coupon sheet may be surrendered at the specified office of the Issuing and Paying Agent in exchange for a further Coupon sheet (and if necessary another Talon for a further Coupon sheet) (but excluding any Coupons that may have become void pursuant to Condition 9).
If any date for payment in respect of any Note or Coupon is not a business day, the holder shall not be entitled to payment until the next following business day nor to any interest or other sum in respect of such postponed payment. In this paragraph, "business day" means a day (other than a Saturday or a Sunday) on which banks and foreign exchange markets are open for business in the relevant place of presentation, in such jurisdictions as shall be specified as "Financial Centres" hereon and:
All payments of principal and interest by or on behalf of the Issuer in respect of the Notes and the Coupons shall be made free and clear of, and without withholding or deduction for or on account of, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the UK or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law. In that event, the Issuer shall pay such additional amounts as shall result in receipt by the Noteholders and Couponholders of such amounts as would have been received by them had no such withholding or deduction been required by law to be made, except that no such additional amounts shall be payable with respect to any Note or Coupon:
presented for payment by or on behalf of, a holder who is liable to such taxes, duties, assessments or governmental charges in respect of such Note or Coupon by reason of his having some connection with the UK other than the mere holding of the Note or Coupon; or
presented for payment by or on behalf of, a holder who could lawfully avoid (but has not so avoided) such deduction or withholding by complying or procuring that any third party complies with any statutory requirements or by making or procuring that any third party makes a declaration of non -residence or other similar claim for exemption to any tax authority in the place where the relevant Note (or the Certificate representing it) or Coupon is presented for payment; or
presented (or in respect of which the Certificate representing it is presented) for payment more than 30 days after the Relevant Date (as defined below) except to the extent that the holder of it would have been entitled to such additional amounts on presenting it for payment on the thirtieth day; or
where such withholding or deduction arises out of any combination of paragraphs (a) to (c) above.
As used in these Conditions, "Relevant Date" in respect of any Note or Coupon means the date on which payment in respect of it first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which payment in full of the amount outstanding is made or (if earlier) the date seven days after that on which notice is duly given to the Noteholders that, upon further presentation of the Note (or relevant Certificate) or Coupon being made in accordance with the Conditions, such payment will be made, provided that payment is in fact made upon such presentation. References in these Conditions to (i) "principal" shall be deemed to include any premium payable in respect of the Notes, Final Redemption Amounts, Early Redemption Amounts, Optional Redemption Amounts, Amortised Face Amounts and all other amounts in the nature of principal payable pursuant to Condition 6 or any amendment or supplement to it, (ii) "interest" shall be deemed to include all Interest Amounts and all other amounts payable pursuant to Condition 5 or any amendment or supplement to it and (iii) "principal" and/or "interest" shall be deemed to include any additional amounts that may be payable under this Condition or any undertaking given in addition to or in substitution for it under the Trust Deed ("Additional Amounts").
Claims against the Issuer for payment in respect of the Notes and Coupons (which, for this purpose, shall not include Talons) shall be prescribed and become void unless made within 10 years (in the case of principal) or five years (in the case of interest) from the appropriate Relevant Date in respect of them.
If any of the following events ("Events of Default") occurs, the Trustee at its discretion may, and if so requested by holders of at least one-quarter in nominal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution shall, subject in each case to being indemnified and/or secured and/or prefunded to its satisfaction (but, in the case of the happening of any of the events mentioned in paragraphs (ii), (iv), (v) and (vii) below, only if the Trustee shall have certified in writing that such event is, in its opinion, materially prejudicial to the interests of the Noteholders), give notice to the Issuer that the Notes are, and they shall immediately become, due and payable at their Early Redemption Amount together with accrued interest:
For the purposes of these Conditions:
"Adjusted Capital and Reserves" means the aggregate of:
"indebtedness for moneys borrowed" means the principal amount of:
which are not for the time being beneficially owned by the Issuer or any of its Subsidiaries; and
"Specified Amount" means the greater of: (i) £50,000,000 (or its equivalent in any other currency or currencies); and (ii) such amount in sterling as is equal to 0.5 per cent. of Adjusted Capital and Reserves.
The Trust Deed contains provisions for convening meetings of Noteholders to consider any matter affecting their interests, including the sanctioning by Extraordinary Resolution (as defined in the Trust Deed) of a modification of any of these Conditions or any provisions of the Trust Deed. Such a meeting may be convened by Noteholders holding not less than 10 per cent. in nominal amount of the Notes for the time being outstanding. The quorum for any meeting convened to consider an Extraordinary Resolution shall be one or more persons holding or representing a clear majority 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 held or represented, unless the business of such meeting includes consideration of proposals, inter alia, (i) to amend the dates of maturity or redemption of the Notes or any date for payment of interest or Interest Amounts on the Notes, (ii) to reduce or cancel the nominal amount of, or any premium payable on redemption of, the Notes, (iii) to reduce the rate or rates of interest in respect of the Notes or to vary the method or basis of calculating the rate or rates or amount of interest or the basis for calculating any Interest Amount in respect of the Notes, (iv) if a Minimum and/or a Maximum Rate of Interest or Redemption Amount is shown hereon, to reduce any such Minimum and/or Maximum, (v) to vary any method of, or basis for, calculating the Final Redemption Amount, the Early Redemption Amount or the Optional Redemption Amount, including the method of calculating the Amortised Face Amount, (vi) to vary the currency or currencies of payment or denomination of the Notes, o r (vii) to modify the provisions concerning the quorum required at any meeting of Noteholders or the majority required to pass the Extraordinary Resolution, in which case the necessary quorum shall be one or more persons holding or representing not less than two-thirds, or at any adjourned meeting not less than one-third, in nominal amount of the Notes for the time being outstanding. Any Extraordinary Resolution duly passed shall be binding on Noteholders (whether or not they were present at the meeting at which such resolution was passed) and on all Couponholders.
The consent or approval of the Noteholders and the Couponholders shall not be required in the case of amendments to the Conditions pursuant to Condition 5(b)(iii)(F) to vary the method or basis of calculating the rate or rates or amount of interest or the basis for calculating any Interest Amount in respect of the Notes or for any other variation of these Conditions and/or the Trust Deed required to be made in the circumstances described in Condition 5(b)(iii)(F), where the Issuer has delivered to the Trustee a certificate pursuant to Condition 5(b)(iii)(F)(8).
The Trustee may agree, without the consent of the Noteholders or Couponholders, to (i) any modification of any of the provisions of the Trust Deed that is in its opinion of a formal, minor or technical nature or is made to correct a manifest error, and (ii) any other modification (except as mentioned in the Trust Deed), and any waiver or authorisation of any breach or proposed breach, of any of the provisions of the Trust Deed that is in the opinion of the Trustee not materially prejudicial to the interests of the Noteholders. Any such modification, authorisation or waiver shall be binding on the Noteholders and the Couponholders and, if the Trustee so requires, such modification shall be notified to the Noteholders as soon as practicable.
If requested by the Issuer, the Trustee shall, without the consent of the Noteholders or Couponholders, agree with the Issuer to the substitution in place of the Issuer (or of any previous Substitute Issuer under this Condition) as a newprincipal debtor under the Trust Deed of (i) any subsidiary or any holding company (each as defined in Section 1159 of the Companies Act 2006) of the Issuer or (ii) a successor in business to the Issuer (each a "Substitute Obligor") in each case provided that:
(i) a trust deed is executed or some other form of undertaking is given by the Substitute Obligor in form and mannersatisfactory to the Trustee, agreeing to be bound by the terms of the Trust Deed and the Notes, the Coupons and the Talons, with any consequential amendments which the Trustee may deem appropriate, as fully as if the relevant Substitute Obligor had been named in the Trust Deed and on the Notes, the Coupons and the Talons, as the principal debtor in place of the Issuer (or of any previous Substitute Obligor, as the case may be);
In connection with the exercise of its functions (including but not limited to those referred to in this Condition) the Trustee shall have regard to the interests of the Noteholders as a class and shall not have regard to the consequences of such exercise for individual Noteholders or Couponholders and the Trustee shall not be entitled to require, nor shall any Noteholder or Couponholder be entitled to claim, from the Issuer or any Substitute Obligor any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders or Couponholders.
At any time after the Notes become due and payable pursuant to Condition 10, the Trustee may, at its discretion and without further notice, institute such proceedings against the Issuer as it may think fit to enforce the terms of the Trust Deed, the Notes and the Coupons, but it need not take any such proceedings unless (a) it shall have been so directed by an Extraordinary Resolution or so requested in writing by Noteholders holding at least one-fifth in nominal amount of the Notes outstanding, and (b) it shall have been indemnified and/or secured and/or prefunded to its satisfaction. No Noteholder or Couponholder may proceed directly against the Issuer unless the Trustee, having become bound so to proceed, fails to do so within a reasonable time and such failure is continuing.
The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility. The Trustee is entitled to enter into business transactions with the Issuer and any entity related to the Issuer without accounting for any profit.
If a Note, Certificate, Coupon or Talon is lost, stolen, mutilated, defaced or destroyed, it may be replaced, subject to applicable laws, regulations and stock exchange or other relevant authority regulations, at the specified office of the Issuing and Paying Agent (in the case of Bearer Notes, Coupons or Talons) and of the Registrar (in the case of Certificates) or such other Paying Agent or Transfer Agent, as the case may be, as may from time to time be designated by the Issuer for the purpose and notice of whose designation is given to Noteholders, in each case on payment by the claimant of the fees and costs incurred in connection therewith and on such terms as to evidence, security and indemnity (which may provide, inter alia, that if the allegedly lost, stolen or destroyed Note, Certificate, Coupon or Talon is subsequently presented for payment or, as the case may be, for exchange for further Coupons, there shall be paid to the Issuer on demand the amount payable by the Issuer in respect of such Notes, Certificates, Coupons or further Coupons) and otherwise as the Issuer may require. Mutilated or defaced Notes, Certificates, Coupons or Talons must be surrendered before replacements will be issued.
The Issuer may from time to time without the consent of the Noteholders or Couponholders create and issue further securities either having the same terms and conditions as the Notes in all respects (or in all respects except for the first payment of interest on them) and so that such further issue shall be consolidated and form a single series with the outstanding securities of any series (including the Notes) or upon such terms as the Issuer may determine at the time of their issue. References in these Conditions to the Notes include (unless the context requires otherwise) any other
securities issued pursuant to this Condition and forming a single series with the Notes. Any further securities forming a single series with the outstanding securities of any series (including the Notes) constituted by the Trust Deed or any deed supplemental to it shall, and any other securities may (with the consent of the Trustee), be constituted by the Trust Deed. The Trust Deed contains provisions for convening a single meeting of the Noteholders and the holders of securities of other series where the Trustee so decides.
Notices to the holders of Registered Notes shall be mailed to them at their respective addresses in the Register and deemed to have been given on the fourth weekday (being a day other than a Saturday or a Sunday) after the date of mailing. Notices to the holders of Bearer Notes shall be valid if published in a daily newspaper of general circulation in London (which is expected to be the Financial Times). If in the opinion of the Trustee any such publication is not practicable, notice shall be validly given if published in another leading daily English language newspaper with general circulation in Europe. Any such notice shall be deemed to have been given on the date of such publication or, if published more than once or on different dates, on the first date on which publication is made, as provided above.
Couponholders shall be deemed for all purposes to have notice of the contents of any notice given to the holders of Bearer Notes in accordance with this Condition.
No person shall have any right to enforce any term or condition of the Notes under the Contracts (Rights of Third Parties) Act 1999.
The Trust Deed, the Notes, the Coupons and the Talons and any non-contractual obligations arising out of or in connection with the Trust Deed, the Notes, the Coupons and the Talons are governed by, and shall be construed in accordance with, English law.
The following is the text of the terms and conditions that, subject to completion and as supplemented in accordance with the provisions of Part A of the relevant Final Terms or, in the case of PR Exempt Notes, the relevant Pricing Supplement, shall be applicable to the Tier 3 Notes in definitive form (if any) issued in exchange for the Global Note(s) or Certificates representing each Series of Tier 3 Notes. The full text of these terms and conditions together with the relevant provisions of Part A of the Final Terms or Pricing Supplement (as applicable) shall be endorsed on such Bearer Notes or on the Certificates relating to such Registered Notes. Accordingly, references in these terms and conditions to provisions specified hereon shall be to the provisions endorsed on the face of the relevant Note or set out in the relevant Final Terms or Pricing Supplement (as applicable). The relevant Pricing Supplement in relation to the PR Exempt Notes may specify other terms and conditions which shall, to the extent so specified or to the extent inconsistent with these Terms and Conditions, replace or modify these Terms and Conditions for the purposes of this Note. All capitalised terms that are not defined in these Conditions will have the meanings given to th em in Part A of the relevant Final Terms or Pricing Supplement. Those definitions will be endorsed on the definitive Notes or Certificates, as the case may be. References in the Conditions to "Notes" are to the Tier 3 Notes of one Series only, not to all Notes that may be issued under the Programme.
The Notes are constituted by a trust deed dated 1 May 2020(as amended or supplemented as at the date of issue of the Notes (the "Issue Date")) (the "Trust Deed") between Aviva plc (the "Issuer") and The Law Debenture Trust Corporation p.l.c. (the "Trustee", which expression shall include all persons for the time being the trustee or trustees under the Trust Deed) as trustee for the Noteholders (as defined below). These terms and conditions include summaries of, and are subject to, the detailed provisions of the Trust Deed, which includes the form of the Bearer Notes, Certificates, Coupons and Talons referred to below. An Agency Agreement dated 22 April 2016 (as amended or supplemented as at the Issue Date, the "Agency Agreement") has been entered into in relation to the Notes between the Issuer, the Trustee, HSBC Bank plc as initial issuing and paying agent and the other agents named in it. The issuing and paying agent, the paying agents, the registrar, the transfer agents and the calculation agent(s) for the time being (if any) are referred to below respectively as the "Issuing and Paying Agent", the "Paying Agents" (which expression shall include the Issuing and Paying Agent), the "Registrar", the "Transfer Agents" (which expression shall include the Registrar) and the "Calculation Agent(s)". Copies of the Trust Deed and the Agency Agreement are available for inspection during usual business hours and upon reasonable notice at the principal office of the Trustee (presently at Fifth Floor, 100 Wood Street, London EC2V 7EX, United Kingdom) and at the specified offices of the Paying Agents and the Transfer Agents (the Trust Deed is also available at the website of the Issuer at https://www.aviva.com/investors/).
The Noteholders and the holders of the interest coupons (the "Coupons") relating to interest-bearing Notes in bearer form and, where applicable, in the case of such Notes, talons for further Coupons (the "Talons") (the "Couponholders") are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and are deemed to have notice of those provisions applicable to them of the Agency Agreement.
As used in these Conditions, "Tranche" means Notes which are identical in all respects.
The Notes are issued in bearer form ("Bearer Notes") or in registered form ("Registered Notes") in each case in the Specified Denomination(s) shown hereon provided that in the case of any Notes which are to be admitted to trading on a regulated market within the European Economic Area (or the United Kingdom) or offered to the public in a Member State of the European Economic Area (or the United Kingdom) in circumstances which require the publication of a Prospectus under the Prospectus Regulation (Regulation (EU) 2017/1129, as amended or superseded), the minimum Specified Denomination shall be at least €100,000 (or its equivalent in any other currency as at the date of issue of the relevant Notes).
This Note is a Fixed Rate Note, a Fixed to Floating Rate Note, a Fixed Rate Reset Note or a Floating Rate Note (which term shall include a SONIA Linked Interest Note, a Compounded Daily SOFR Linked Interest Note or a Weighted Average SOFR Linked Interest Note if this Note is specified as such in the Final Terms or Pricing Supplement) or a combination of the foregoing, depending upon the Interest Basis and Redemption Basis shown hereon.
Bearer Notes are serially numbered and are issued with Coupons (and, where appropriate, a Talon) attached.
Registered Notes are represented by registered certificates ("Certificates") and, save as provided in Condition 2(b), each Certificate shall represent the entire holding of Registered Notes by the same holder.
Title to the Bearer Notes and the Coupons and Talons shall pass by delivery. Title to the Registered Notes shall pass upon registration in the register that the Issuer shall procure to be kept by the Registrar in accordance with the provisions of the Agency Agreement (the "Register"). Except as ordered by a court of competent jurisdiction or as required by law, the holder (as defined below) of any Note, Coupon or Talon shall be deemed to be and may be treated as its absolute owner for all purposes whether or not it is overdue and regardless of any notice of ownership, trust or an interest in it, any writing on it (or on the Certificate representing it) or its theft or loss (or that of the related Certificate) and no person shall be liable for so treating the holder.
In these Conditions, "Noteholder" means the bearer of any Bearer Note or the person in whose name a Registered Note is registered (as the case may be), "holder" (in relation to a Note, Coupon or Talon) means the bearer of any Bearer Note, Coupon or Talon or the person in whose name a Registered Note is registered (as the case may be) and capitalised terms have the meanings given to them hereon, the absence of any such meaning indicating that such term is not applicable to the Notes.
One or more Registered Notes may be transferred upon the surrender (at the specified office of the Registrar or any Transfer Agent) of the Certificate representing such Registered Notes to be transferred, together with the form of transfer (as set out in Schedule 1 of the Trust Deed) endorsed on such Certificate (or another form of transfer substantially in the same form and containing the same representations and certifications (if any), unless otherwise agreed by the Issuer), duly completed and executed and any other evidence as the Registrar or Transfer Agent may reasonably require. In the case of a transfer of part only of a holding of Registered Notes represented by one Certificate, a new Certificate shall be issued to the transferee in respect of the part transferred and a further new Certificate in respect of the balance of the holding not transferred shall be issued to the transferor. All transfers of Notes and entries on the Register will be made subject to the detailed regulations concerning transfers of Notes scheduled to the Agency Agreement. The regulations may be changed by the Issuer, with the prior written approval of the Registrar and the Trustee. A copy of the current regulations will be made available by the Registrar to any Noteholder upon request.
In the case of an exercise of an Issuer's or Noteholder's option in respect of a holding of Registered Notes represented by a single Certificate or a partial redemption of a holding of Registered Notes represented by a single Certificate, a new Certificate shall be issued to the holder to reflect the exercise of such option or in respect ofthe balance of the holding not redeemed. In the case of a partial exercise of an option resulting in Registered Notes of the same holding having different terms, separate Certificates shall be issued in respect of those Notes of that holding that have the same terms. New Certificates shall only be issued against surrender of the existing Certificates to the Registrar or any Transfer Agent. In the case of a transfer of Registered Notes to a person who is already a holder of Registered Notes, a new Certificate representing the enlarged holding shall only be issued against surrender of the Certificate representing the existing holding.
Each new Certificate to be issued pursuant to Condition 2(a) or (b) shall be available for delivery within three Business Days of receipt of the form of transfer and surrender of the Certificate for exchange. Delivery of the new Certificate(s) shall be made at the specified office of the Transfer Agent or of the Registrar (as the case may be) to whom delivery or surrender of such form of transfer, Exercise Notice or Certificate shall have been made or, at the option of the holder making such delivery or surrender as aforesaid and as specified in the relevant form of transfer, Exercise Notice or otherwise in writing, be mailed by uninsured post at the risk of the holder entitled to the new Certificate to such address as may be so specified, unless such holder requests otherwise and pays in advance to the Registrar or relevant Transfer Agent (as applicable) the costs of such other method of delivery and/or such insurance as it may specify. In this Condition 2(c), "Business Day" means a day, other than a Saturday or Sunday, on which banks are open for business in the place of the specified office of th e relevant Transfer Agent or the Registrar (as the case may be).
Transfer of Notes and Certificates on registration, transfer, exercise of an option or partial redemption shall be effected without charge by or on behalf of the Issuer, the Registrar or the Transfer Agents, but upon payment of any tax or other governmental charges by the person submitting such Notes or Certificates that may be imposed in relation to it (or the giving of such indemnity as the Registrar or the relevant Transfer Agent may require).
No Noteholder may require the transfer of a Registered Note to be registered (i) during the period of 15 days ending on the due date for redemption of that Note, (ii) during the period of 15 days prior to any date on which Notes may be called for redemption by the Issuer at its option pursuant to Condition 6(d), (iii) after any such Note has been called for redemption or (iv) during the period of seven days ending on (and including) any Record Date.
The Notes and the Coupons relating to them constitute direct, unsecured and subordinated obligations of the Issuer and rank pari passuand without any preference among themselves. In the event of the winding-up of the Issuer (except, in any such case, a solvent winding-up solely for the purposes of a reconstruction or amalgamation or the substitution in place of the Issuer of a successor in business of the Issuer, the terms of which reconstruction, amalgamation or substitution (i) have previously been approved in writing by the Trustee or by an Extraordinary Resolution (as defined in the Trust Deed) and (ii) do not provide that the Notes shall thereby become payable) or the appointment of an administrator of the Issuer where the administrator has given notice that it intends to declare and distribute a dividend, the payment obligations of the Issuer under or arising from the Notes and the Coupons relating to them and the Trust Deed, including any Arrears of Interest, shall be subordinated in the manner provided in the Trust Deed to the claims of all Senior Creditors (as defined in Condition 18) of the Issuer, but shall rank (a) at least pari passu with all other subordinated obligations of the Issuer which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 3 Capital and all obligations which rank, or are expressed to rank, pari passu therewith ("Pari Passu Securities"); and (b) shall rank in priority to the claims of holders of: (i) all obligations of the Issuer which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital or Tier 1 Capital and all obligations which rank, or are expressed to rank, pari passu therewith; and (ii) all classes of share capital of the Issuer (together, the "Junior Securities").
Without prejudice to Condition 3(a) above, all payments under or arising from the Notes, the Coupons relating to them and the Trust Deed shall be conditional upon the Issuer being solvent at the time for payment by the Issuer, and no amount shall be payable under or arising from the Notes, the Coupons relating to them and the Trust Deed unless and until such time as the Issuer could make such payment and still be solvent immediately thereafter (the "SolvencyCondition"). For the purposes of this Condition 3(b), the Issuer will be solvent if (i) it is able to pay its debts owed to Senior Creditors and Pari Passu Creditors as they fall due and (ii) its Assets exceed its Liabilities. A certificate as to the solvency of the Issuer signed by two Directors or, if there is a winding-up or administration of the Issuer, the liquidator or, as the case may be, the administrator of the Issuer shall, in the absence of manifest error, be treated and accepted by the Issuer, the Trustee, the holders of the Notes and the Coupons relating to them and all other interested parties as correct and sufficient evidence thereof and the Trustee shall be entitled to rely on such certificate without liability to any person. In a winding-up of the Issuer or in an administration of the Issuer if the administrator has given notice of his intention to declare and distribute a dividend, the amount payable in respect of the Notes and the Coupons relating to them shall be an amount equal to the principal amount of such Notes, together with Arrears of Interest, if any, and any interest (other than Arrears of Interest) which has accrued up to, but excluding, the date of repayment and will be subordinated in the manner described in Condition 3(a) above.
Without prejudice to any other provision in these Conditions, amounts representing any payments of principal, premium or interest or any other amount, including any damages awarded for breach of any obligations in respect of which the conditions referred to in Condition 3(b) are not satisfied on the date upon which the same would otherwise be due and payable ("Solvency Claims") will be payable by the Issuer in a winding-up of the Issuer as provided in Condition 3(a). A Solvency Claim shall not bear interest.
Subject to applicable law, no holder of the Notes and the Coupons relating to them may exercise, claim or plead any right of set-off, compensation or retention in respect of any amount owed to it by the Issuer arising under or in connection with the Notes and the Coupons relating to them and each holder of the Notes and the Coupons relating to them shall, by virtue of being the holder of any Note or Coupon, be deemed to have waived all such rights of set-off, compensation or retention. Notwithstanding the preceding sentence, if any of the amounts owing to any holder of the Notes or Coupons relating to them by the Issuer is discharged by set-off, such holder shall, unless such payment is prohibited by applicable law, immediately pay an amount equal to the amount of such discharge to the Issuer or, in the event of its winding-up or administration, the liquidator or administrator, as appropriate, of the Issuer for payment to the Senior Creditors in respect of amounts owing to them by the Issuer, and, until such time as payment is made, shall hold an amount equal to such amount in trust for the Issuer, or the liquidator or administrator, as appropriate, of the Issuer (as the case may be), for payment to the Senior Creditors in respect of amounts owing to them by the Issuer and, accordingly, any such discharge shall be deemed not to have taken place.
On a winding-up of the Issuer, there may be no surplus assets available to meet the claims of the Noteholders after the claims of the parties ranking senior to the Noteholders (as provided in Condition 3) have been satisfied.
Subject to Condition 3(b) and Condition 5, each Fixed Rate Note or Fixed to Floating Rate Note bears interest on its outstanding principal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest to (but excluding), in the case of Fixed to Floating Rate Notes, the Fixed Rate End Date specified hereon, such interest shall be payable in arrear on each Interest Payment Date specified hereon. The amount of interest payable shall be determined in accordance with Condition 4(e).
payable, in each case, in arrear on the Interest Payment Dates specified hereon. The amount of interest payable shall be determined in accordance with Condition 4(e).
(ii) Reset Rate Screen Page
If Mid-Swap Rate is specified as the Reset Rate for Fixed Rate Reset Notes in the applicable Final Terms or Pricing Supplement and the relevant Reset Rate Screen Page is not available or if the Mid-Swap Rate does not appear on the relevant Reset Rate Screen Page, (other than in the circumstances provided for in Condition 4(c)(iii)(F)) the Calculation Agent shall request each of the Reference Banks to provide the Calculation Agent with its offered quotation (expressed as a percentage rate per annum) for the relevant Reset Rate at approximately 11.00 a.m. in the principal financial centre of the Specified Currency on the relevant Reset Determination Date for such Reset Period. If two or more of the Reference Banks provide the Calculation Agent with offered quotations, the Reset Rate for the relevant Reset 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 applicable Reset Margin (if any), all as determined by the Calculation Agent. If on any Reset Determination Date only one or none of the Reference Banks provides the Calculation Agent with an offered quotation as provided in the foregoing provisions of this paragraph, the Reset Rate shall be determined as at the last preceding Reset Determination Date or, in the case of the first Reset Determination Date, the Reset Rate shall be determined using the Mid-Swap Rate last displayed on the relevant Reset Rate Screen Page prior to the relevant Reset Determination Date.
(i) Interest Payment Dates
Subject to Condition 3(b) and Condition 5, each Floating Rate Note and each Fixed to Floating Rate Note bears interest on its outstanding principal amount from, in the case of a Floating Rate Note, the Interest Commencement Date and, in the case of a Fixed to Floating Rate Note, the Fixed Rate End Date specified hereon at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such int erest shall be payable in arrear on each Interest Payment Date in the case of a Floating Rate Note and on each Interest Payment Date commencing after the Fixed Rate End Date specified hereon in the case of a Fixed to Floating Rate Note. The amount of interest payable shall be determined in accordance with Condition 4(e). Such Interest Payment Date(s) is/are either shown hereon as Specified Interest Payment Dates or, if no Specified Interest Payment Date(s) is/are shown hereon, "Interest Payment Date" shall mean each date which falls the number of months or other period shown hereon as the Specified Period after the preceding Interest Payment Date or, in the case of the first such Interest Payment Date, after the Interest Commencement Date, in the case of a Floating Rate Note, or after the Fixed Rate End Date, in the case of a Fixed to Floating Rate Note.
(ii) Business Day Convention
If any date referred to in these Conditions that is specified to be subject to adjustment in accordance with a Business Day Convention would otherwise fall on a day that is not a Business Day, then, if the Business Day Convention specified hereon is (A) the Floating Rate Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event (x) such date shall be brought forward to the immediately preceding Business Day and (y)
each such subsequent date shall be the last Business Day of the month in which such date would have fallen had it not been subject to adjustment, (B) the Following Business Day Convention, such date shall be postponed to the next day that is a Business Day, (C) the Modified Following Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event such date shall be brought forward to the immediately preceding Business Day or (D) the Preceding Business Day Convention, such date shall be brought forward to the immediately preceding Business Day.
(iii) Rate of Interest for Floating Rate Notes and Fixed to Floating Rate Notes
The Rate of Interest in respect of Floating Rate Notes and, from and including the Fixed Rate End Date, Fixed to Floating Rate Notes for each Interest Accrual Period shall be determined in the manner specified hereon and the provisions below relating to either ISDA Determination or Screen Rate Determination shall apply, depending upon which is specified hereon.
(A) ISDA Determination for Floating Rate Notes
Where ISDA Determination is specified hereon as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each relevant Interest Accrual Period shall be determined by the Calculation Agent as a rate equal to the relevant ISDA Rate. For the purposes of this subparagraph (A), "ISDA Rate" for an Interest Accrual Period means a rate equal to the Floating Rate that would be determined by the Calculation Agent under a Swap Transaction under the terms of an agreement incorporating the ISDA Definitions and under which:
(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 either 11.00 a.m. (London time in the case of LIBOR or Brussels time in the case of EURIBOR) or 10.00 a.m. Toronto time, in the case of CDOR, on the Interest Determination Date in question as determined by the Calculation 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 Calculation Agent for the purpose of determining the arithmetic mean of such offered quotations.
(y) if the Relevant Screen Page is not available or if, sub-paragraph (x)(1) applies and no such offered quotation appears on the Relevant Screen Page or if sub-paragraph (x)(2) above applies and fewer than three such offered quotations appear on the Relevant Screen Page in each case as at the time specified above, subject as provided below, the Calculation Agent shall request, if the Reference Rate is LIBOR, the principal London office of each of the Reference Banks or, if the Reference Rate is EURIBOR, the principal Eurozone office of each of the Reference Banks or, if the Reference Rate is CDOR, the principal Toronto office of each of the Reference Banks, to provide the Calculation Agent with its offered quotation (expressed as a percentage rate per annum) for the Reference Rate if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time), or, if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time), or, if the Reference Rate is CDOR, at approximately 10.00 a.m. (Toronto time) on the
Interest Determination Date in question. If two or more of the Reference Banks provide the Calculation Agent with such offered quotations, the Rate of Interest for such Interest Accrual Period shall be the arithmetic mean of such offered quotations as determined by the Calculation Agent; and
(z) if paragraph (y) above applies and the Calculation Agent determines that fewer than two Reference Banks are providing offered quotations, subject as provided below, the Rate of Interest shall be the arithmetic mean of the rates per annum (expressed as a percentage) as communicated to (and at the request of) the Calculation Agent by the Reference Banks or any two or more of them, at which such banks were offered, (A) if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time) or, if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels 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, if the Reference Rate is LIBOR, the London inter-bank market or, if the Reference Rate is EURIBOR, the Eurozone inter-bank market, as the case may be, or, if fewer than two of the Reference Banks provide the Calculation Agent with such 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 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, if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time) or, if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time), on the relevant Interest Determination Date, any one or more banks (which bank or banks is or are in the opinion of the Trustee and the Issuer suitable for such purpose) informs the Calculation Agent it is quoting to leading banks in, if the Reference Rate is LIBOR, the London inter-bank market or, if the Reference Rate is EURIBOR, the Eurozone inter-bank market, as the case may be, or (B) if the Reference Rate is CDOR, the arithmetic mean of the bid rates as communicated to (and at the request of) the Calculation Agent by Schedule I chartered banks in Toronto, for Canadian dollar bankers' acceptances for a period comparable to the applicable Interest Period in an amount representative for a single transaction in the relevant market at the relevant time accepted by those banks as of 10.00 a.m. (Toronto time), 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 or Maximum or Minimum Rate of Interest is to be applied to the relevant Interest Accrual Period from that which applied to the last preceding Interest Accrual Period, the Margin or Maximum or Minimum Rate of Interest relating to the relevant Interest Accrual Period, in place of the Margin or Maximum or Minimum Rate of Interest relating to that last preceding Interest Accrual Period).
(C) Screen Rate Determination for Floating Rate Notes which are SONIA Linked Interest Notes
Where the Reference Rate is specified as being SONIA, the Rate of Interest for each Interest Accrual Period will, subject to the provisions of Condition 4(c)(iii)(F) and as provided below, be Compounded Daily SONIA plus or minus (as indicated in the Final Terms or Pricing Supplement) the Margin (if any), all as determined by the Calculation Agent (or such other party responsible for the calculation of the Rate of Interest, as specified in the Final Terms or Pricing Supplement) on the Interest Determination Date for such Interest Accrual Period.
For the purposes of this Condition 4(c)(iii)(C):
"Compounded Daily SONIA" means with respect to an Interest Accrual Period, the rate of return of a daily compound interest investment during the Observation Period corresponding to such Interest Accrual Period (with the daily Sterling overnight reference rate as reference rate for the calculation of interest) and will be calculated by the Calculation Agent (or such other party responsible for the calculation of the Rate of Interest, as specified in the Final Terms or Pricing Supplement) on the relevant Interest Determination Date, as follows, and the resulting percentage will be rounded, if necessary, to the fifth decimal place, with 0.000005 being rounded upwards:
$$
\left[\prod_{i=1}^{d_o} \left(1 + \frac{50NIA_{i-pLBD} \times n_i}{365}\right) - 1\right] \times \frac{365}{d}
$$
Where:
"d" means the number of calendar days in the relevant Interest Accrual Period;
"SONIAi-pLBD" means, in respect of any London Business Day "i" falling in the relevant Interest Accrual Period, the SONIA reference rate for the London Business Day falling "p" London Business Days prior to the relevant London Business Day "i".
Subject to the provisions of Condition 4(c)(iii)(F), if, in respect of any London Business Day in the relevant Observation Period, the Calculation Agent (or such other party responsible for the calculation of the Rate of Interest, as specified in the Final Terms or Pricing Supplement) determines that the SONIA reference rate is not available on the Relevant Screen Page or has not otherwise been published by the relevant authorised distributors, such SONIA reference rate shall be:
Subject to the provisions of Condition 4(c)(iii)(F), if the Rate of Interest cannot be determined in accordance with paragraphs (x) and (y) by the Calculation Agent (or such other party responsible for the calculation of the Rate of Interest, as specified in the Final Terms or Pricing Supplement), the Rate of Interest shall be:
(z) that determined as at the last preceding Interest Determination Date (though substituting, where a different Margin or Maximum Rate of Interest or Minimum Rate of Interest is to be applied to the relevant Interest Accrual Period from that which applied to the last preceding Interest Accrual Period, the Margin or Maximum
Rate of Interest or Minimum Rate of Interest relating to the relevant Interest Accrual Period in place of the Margin or Maximum Rate of Interest or Minimum Rate of Interest relating to that last preceding Interest Accrual Period); or
(aa) if there is no such preceding Interest Determination Date, the initial Rate of Interest which would have been applicable to the Notes for the first Interest Accrual Period had the Notes been in issue for a period equal in duration to the scheduled first Interest Accrual Period but ending on (and excluding) the Interest Commencement Date (but applying the Margin and any Maximum Rate of Interest or Minimum Rate of Interest applicable to the first Interest Accrual Period).
If the Notes become due and payable in accordance with Condition 10, the final Interest Determination Date shall, notwithstanding any Interest Determination Date specified in the Final Terms or Pricing Supplement, be deemed to be the date on which such Notes become due and payable and the Rate of Interest on the Notes shall, for so long as any of the Notes remain outstanding, be determined on such date and as if (solely for the purpose of such interest determination) the relevant Interest Accrual Period had been shortened accordingly.
$$
\left[\prod_{i=1}^{d_0}\left(1+\frac{\textit{SOFR}_i\times n_i}{360}\right)-1\right]\times\frac{360}{d}
$$
Where:
"New York City Banking Day" means any day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in New York City;
"New York Federal Reserve's Website" means the website of the Federal Reserve Bank of New York currently at http://www.newyorkfed.org, or any successor website of the Federal Reserve Bank of New York or the website of any successor administrator;
(3) if the rate specified in (1) above is not so published, and a SOFR Index Cessation Event and SOFR Index Cessation Effective Date have both occurred, "SOFR" in relation to a SOFR Reset Date shall be the rate that was recommended as the replacement for the daily Secured Overnight Financing Rate by the Federal Reserve Board and/or the Federal Reserve Bank of New York or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York for the purpose of recommending a replacement for the daily Secured Overnight Financing Rate (which rate may be produced by the Federal Reserve Bank of New York or other designated administrator, and which rate may include any adjustments or spreads); provided, however, that, if no such rate has been recommended within one U.S. Government Securities Business Day of the SOFR Index Cessation Effective Date, then:
(a) subject to (b) below, "SOFR" in relation to each SOFR Reset Date falling on or after the SOFR Index Cessation Effective Date shall be equal to the rate determined in accordance with (1) or (2) above (as applicable) but as if:
"SOFR Index Cessation Event" means the occurrence of one or more of the following events:
(1) a public statement by the Federal Reserve Bank of New York (or a successor administrator of the daily Secured Overnight Financing Rate) announcing that it has ceased or will cease to publish or provide the daily Secured Overnight Financing Rate permanently or indefinitely, provided that, at that time, there is no successor administrator that will continue to publish or provide a daily Secured Overnight Financing Rate;
time) on the New York Federal Reserve's Website on the next succeeding New York City Banking Day for such OBFR Determination Date;
"SOFR" means:
"Weighted Average SOFR" shall be construed so that it means the arithmetic mean of (x) SOFRi in effect for each U.S. Government Securities Business Day in such Interest Accrual Period up to (but excluding) the SOFR Index Cessation Effective Date and (y) SOFRi in effect for each New York City Banking Day in such Interest Accrual Period from (and including) the SOFR Index Cessation Effective Date, and the definition of "Weighted Average SOFR" shall be construed accordingly);
(2) the publication of information which reasonably confirms that the Federal Reserve Bank of New York (or a successor administrator of the daily Secured Overnight Financing Rate) has ceased or will cease to provide the daily Secured Overnight Financing Rate permanently or indefinitely, provided that, at that time there is no successor administrator that will continue to publish or provide the daily Secured Overnight Financing Rate; or
(3) a public statement by a U.S. regulator or other U.S. official sector entity prohibiting the use of the daily Secured Overnight Financing Rate that applies to, but need not be limited to, all swap transactions, including existing swap transactions;
then the following provisionsshall apply to the Floating Rate Notes, Fixed Rate Reset Notes and Fixed to Floating Rate Notes after the Fixed Rate End Date (as applicable):
Alternative Reference Rate and, in each case an Adjustment Spread (if any) prior to the relevant IA Determination Cut-off Date, then the Issuer (acting in good faith and in a commercially reasonable manner), no later than three Business Days prior to the Interest Determination Date relating to the next Interest Period (the "Issuer Determination Cut-off Date"), may determine a Successor Reference Rate or, if the Issuer fails so to determine a Successor Reference Rate, an Alternative Reference Rate (as applicable) and, in each case, an Adjustment Spread (if any) and/or any Benchmark Amendments (with the relevant provisionsin this Condition 4(c)(iii)(F) applying mutatis mutandis to allow such determination to be made by the Issuer without consultation with an Independent Adviser) (in any such case, acting in good faith and in a commercially reasonable manner) for the purposes of determining the Rate of Interest (or the relevant component part thereof) for all future payments of interest on the Notes (subject to the subsequent operation of this Condition 4(c)(iii)(F),
(7) Without prejudice to the definitions thereof, for the purposes of determining a Successor Reference Rate, Alternative Reference Rate or an Adjustment Spread (if any), the Independent Adviser or the Issuer (as applicable) will take into account relevant and applicable market precedents as well as any published guidance from relevant associations involved in the establishment of market standards and/or protocols in the international debt capital markets and such other materials as the Issuer (as applicable), in its sole discretion, considers appropriate.
Prior to any such waivers and/or consequential amendments taking effect, the Issuer shall provide a certificate signed by two Directors or other Authorised Signatories (as defined in the Trust Deed) of the Issuer to the Trustee and the Issuing and Paying Agent (i) confirming that a Benchmark Event has occurred and (ii) that such waivers and/or Benchmark Amendments are required to give effect to any application of this Condition 4(c)(iii)(F) and the Trustee and the Issuing and Paying Agent shall be entitled to rely on such certificate without further enquiry or liability to any person. For the avoidance of doubt, the Trustee shall not be liable to the Noteholders or any other person for so acting or relying, irrespective of whether any such modification is or may be materially prejudicial to the interests of any such person. Such changes shall apply to all future payments of interest on the Notes (subject to the subsequent operation of this Condition 4(c)(iii)(F)).
The Trustee shall not be obliged to agree to any modification if in the sole opinion of the Trustee doing so would impose more onerous obligations upon it or expose it to any additional duties, responsibilities or liabilities or reduce rights and/or the protective provisions afforded to the Trustee in these Conditions or the Trust Deed.
No consent of the Noteholders shall be required in connection with effecting the relevant Successor Reference Rate or Alternative Reference Rate as described in this Condition 4(c)(iii)(F) or such other relevant adjustments pursuant to this Condition 4(c)(iii)(F), or any Adjustment Spread, including for the execution of, or amendment to, any documents (including, inter alia, by the execution of a deed supplemental to or amending the Trust Deed) or the taking of other steps by the Issuer or any of the parties to the Trust Deed and/or the Agency Agreement (if required).
Notwithstanding any other provision of this Condition 4(c)(iii)(F) no Successor Reference Rate or Alternative Reference Rate will be adopted, nor will the applicable Adjustment Spread be applied, nor will any Benchmark Amendments be made if and to the extent that, in the sole determination of the Issuer, the same could reasonably be expected to prejudice the qualification of the Notes as Tier 3 Capital of the Issuer or of the Group, eligible liabilities or loss absorbing capacity instruments for the purposes of the Relevant Rules.
Notwithstanding any other provision of this Condition 4(c)(iii)(F), no Successor Rate or Alternative Rate will be adopted, nor will the applicable Adjustment Spread be applied, nor will any Benchmark Amendments be made, if and to the extent that, in the determination of the Issuer, the same could reasonably be expected to cause a Capital Disqualification Event or a Rating Methodology Event to occur.
The amount of interest payable per Calculation Amount in respect of any Note for any Interest Accrual Period shall be equal to the product of the Rate of Interest, the Calculation Amount specified hereon, and the Day Count Fraction for such Interest Accrual Period, unless an Interest Amount (or a formula for its calculation) is applicable to such Interest Accrual Period, in which case the amount of interest payable per Calculation Amount in respect of such Note for such Interest Accrual Period shall equal such Interest Amount (or be calculated in accordance with such formula). Where any Interest Period comprises two or more Interest Accrual Periods, the amount of interest payable per Calculation Amount in respect of such Interest Period shall be the sum of the Interest Amounts payable in respect of each of those Interest Accrual Periods. In respect of any other period for which interest is required to be calculated, the provisions above shall apply save that the Day Count Fraction shall be for the period for which interest is required to be calculated. Where the Specified Denomination comprises more than one Calculation Amount, the amount of interest payable in respect of such Note shall be the aggregate of the amounts (determined in the manner provided above) for each Calculation Amount comprising the Specified Denomination specified hereon.
The Calculation Agent shall, as soon as practicable on each Interest Determination Date or Reset Determination Date (as applicable), or such other time on such date as the Calculation Agent may be required to calculate any rate or amount, obtain any quotation or make any determination or calculation, determine such rate and calculate the Interest Amounts for the relevant Interest Accrual Period, calculate the Final Redemption Amount, Optional Redemption Amount or Special Redemption Price (as may be provided for hereon), obtain such quotation or make such determination or calculation, as the case may be, and cause the Rate of Interest and the Interest Amounts for each Interest Accrual Period and the relevant Interest Payment Date and, if required to be calculated, the Final Redemption Amount, Optional Redemption Amount or Special Redemption Price, to be notified to the Trustee, the Issuer, each of the Paying Agents, the Noteholders, any other Calculation Agent appointed in respect of the Notes that is to make a further calculation upon receipt of such information and, if the Notes are listed on a stock exchange and the rules of such exchange or other relevant authority so require, such exchange or other relevant authority as soon as possible after their determination but in any event no later than (i) the commencement of the relevant Interest Period, if determined prior to such time, in the case of notification to such exchange of a Rate of Interest and Interest Amount, or (ii) in all other cases, the fourth Business Day after such determination. Where any Interest Payment Date or Interest Period Date is subject to adjustment pursuant to Condition 4(c)(ii), the Interest Amounts and the Interest Payment Date so published may subsequently be amended (or appropriate alternative arrangements made with the consent of the Trustee by way of adjustment) without notice in the event of an extension or shortening of the Interest Period. If the Notes become due and payable under Condition 10, the accrued interest and the Rate of Interest payable in respect of the Notes shall nevertheless continue to be calculated as previously in accordance with this Condition but no publication of the Rate of Interest or the Interest Amount so calculated need be made unless the Trustee otherwise requires. The
determination of any rate or amount, the obtaining of each quotation and the making of each determination or calculation by the Calculation Agent(s) shall (in the absence of manifest error) be final and binding upon all parties.
If the Calculation Agent does not at any time for any reason determine or calculate the Rate of Interest for an Interest Accrual Period or any Interest Amount, Final Redemption Amount, Optional Redemption Amount or Special Redemption Price, the Trustee shall do so (or shall appoint an agent on its behalf to do so) and such determination or calculation shall be deemed to have been made by the Calculation Agent. In doing so, the Trustee shall apply the foregoing provisions of this Condition, with any necessary consequential amendments, to the extent that, in its opinion, it can do so, and, in all other respects, it shall do s o in such manner as it shall deem fair and reasonable in all the circumstances.
In these Conditions, unless the context otherwise requires, the following defined terms shall have the meanings set out below:
"Adjustment Spread" means either a spread (which may be positive, negative or zero) or formula or methodology for calculating a spread in either case, which the Independent Adviser or the Issuer (as applicable) determines is required to be applied to a Successor Reference Rate or an Alternative Reference Rate (as applicable) in order to reduce or eliminate, to the extent reasonably practicable in the circumstances, any economic prejudice or benefit (as applicable) to Noteholders and Couponholders as a result of the replacement of the Original Reference Rate with such Successor Reference Rate or Alternative Reference Rate (as applicable) and is the spread, formula or methodology which:
"Alternative Reference Rate" means an alternative benchmark or screen rate which the relevant Independent Adviser or the Issuer (as applicable) determines in accordance with Condition 4(c)(iii)(F) is customarily applied in the international debt capital markets for the purposes of determining floating rates of interest in respect of notes denominated in the Specified Currency and of a comparable duration to the relevant Interest Period, and which, in the circumstances contemplated in limb (vi) of the definition of Benchmark Event shall be deemed to be the New Reference Rate.
"Anniversary Date" means the date specified hereon.
(vi) the Issuer determines in consultation with a bank of international standing selected by the Issuer in its sole discretion that there has taken place (or will otherwise take place, prior to the next following Interest Determination Date) a change in customary market practice in the international debt capital markets applicable generally to floating rate notes denominated in the Specified Currency (determined according to factors including, but not limited to, those in (i) to (v) of this definition and public statements, opinions and publications of industry bodies and organisations) to refer to a base rate (the "New Reference Rate") other than the Original Reference Rate specified in the applicable Final Terms or Pricing Supplement, despite the continued existence of such Original Reference Rate, when any Rate of Interest (or any component part thereof) remains to be determined by reference to the Original Reference Rate.
"Benchmark Gilt" means, in respect of a Reset Period, the Benchmark Gilt specified hereon or, if no Benchmark Gilt is specified hereon or if the relevant Benchmark Gilt is no longer outstanding at the relevant time, such United Kingdom government security having a maturity date on or about the last day of such Reset Period as the Issuer, with the advice of the Reference Banks and after consultation with the Calculation Agent, may determine to be appropriate.
"Benchmark Gilt Rate" means, in respect of a Reset Period, the gross redemption yield (as calculated by the Calculation Agent in accordance with generally accepted market practice at such time) on a s emi-annual compounding basis (converted to an annualised yield and rounded up (if necessary) to four decimal places) of the Benchmark Gilt in respect of that Reset Period, with the price of the Benchmark Gilt for this purpose being the arithmetic average (rounded up (if necessary) to the nearest 0.001 per cent. (0.0005 per cent. being rounded upwards)) of the bid and offered prices of such Benchmark Gilt quoted by the Reference Banks at 3.00 p.m. (London time) on the relevant Reset Determination Date on a dealing basis for settlement on the next following dealing day in London. If only two or three quotations are provided, the Benchmark Gilt Rate will be the rounded arithmetic mean of the quotations provided. If only one quotation is provided, the Benchmark Gilt Rate will be the rounded quotation provided. If no quotations are provided, the Benchmark Gilt Rate will be determined by the Calculation Agent in its sole discretion following consultation with the Issuer.
"Bloomberg Screen" meansthe relevantpage on the Bloomberg L.P. service or any successor service or such other page as may replace that page on that service for the purpose of displaying "Treasury constant maturities (Nominal)" as reported in the H.15.
"Business Day" means:
"CMT Rate" means, in relation to a Reset Period and the Reset Rate Determination Date in relation to such Reset Period, the rate determined by the Calculation Agent and expressed as a percentage equal to:
"Day Count Fraction" means, in respect of the calculation of an amount of interest on any Note for any period of time (from and including the first day of such period to but excluding the last) (whether or not constituting an Interest Period or Interest Accrual Period, the "Calculation Period"):
Day Count Fraction = [360 x (Y2 - Y1)] + [30 x (M2 - M1)] + (D2 - D1)
360
where:
"Y1" is the year, expressed as a number, in which the first day of the Calculation Period falls;
"Y2" is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
"M2" is the calendar month, expressed as number, in which the day immediately following the last day included in the Calculation Period falls;
"D1" is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D1 will be 30; and
"D2" is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30;
(vi) if "30E/360" or "Eurobond Basis" is specified hereon, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
Day Count Fraction = [360 x (Y2 - Y1)] + [30 x (M2 - M1)] + (D2 - D1)
360
where:
"Y1" is the year, expressed as a number, in which the first day of the Calculation Period falls;
"Y2" is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
"M2" is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"D1" is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D1 will be 30; and
"D2" is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31, in which case D2 will be 30;
(vii) if "30E/360 (ISDA)" is specified hereon, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
Day Count Fraction = [360 x (Y2 - Y1)] + [30 x (M2 - M1)] + (D2 - D1)
360
where:
"Y1" is the year, expressed as a number, in which the first day of the Calculation Period falls;
"Y2" is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
"M2" is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"D1" is the first calendar day, expressed as a number, of the Calculation Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case D1 will be 30; and
"D2" is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would be 31, in which case D2 will be 30; and
(viii) if "Actual/Actual-ICMA" is specified hereon:
(x) the number of days in such Calculation Period falling in the Determination Period in which it begins divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year; and
(y) the number of days in such Calculation Period falling in the next Determination Period divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year,
"Determination Date" means the date specified as such hereon or, if none is so specified, the Interest Payment Date; and
"Determination Period" means the period from and including a Determination Date in any year to but excluding the next Determination Date.
"Eurozone" means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty on the Functioning of the European Union, as amended.
"First Reset Note Reset Date" means the date specified hereon.
"First Reset Period" means the period from (and including) the First Reset Note Reset Date until (but excluding) the first Anniversary Date.
"First Reset Rate of Interest" means the rate of interest being determined by the Calculation Agent on the relevant Reset Determination Date as the sum of the relevant Reset Rate plus the Reset Margin.
"Fixed Rate End Date" means the date specified as such hereon.
"FSB" means the Financial Stability Board.
"H.15" means the weekly statistical release designated as H.15, or any successor publication, published by the Board of Governors of the U.S. Federal Reserve System at http://www.federalreserve.gov/releases/H15/ or any successor site or publication.
"Independent Adviser" means an independent financial institution of international repute or other independent financial adviser experienced in the international debt capital markets.
"Initial Rate of Interest" means the initial rate of interest per annum specified hereon.
"Interest Accrual Period" means the period beginning on (and including) the Interest Commencement Date, in respect of the Floating Rate Notes, and the Fixed Rate End Date, in respect of the Fixed to Floating Rate Notes, and ending on (but excluding) the first Interest Period Date and each successive period beginning on (and including) an Interest Period Date and ending on (but excluding) the next succeeding Interest Period Date.
"Interest Amount" means, in respect of an Interest Accrual Period, the amount of interest payable per Calculation Amount for that Interest Accrual Period and which, in the case of Fixed Rate Notes, Fixed Rate Reset Notes, and, prior to the Fixed Rate End Date, Fixed to Floating Rate Notes, and unless otherwise specified hereon, shall mean the Fixed Coupon Amount or Broken Amount specified hereon as being payable on the Interest Payment Date ending the Interest Period of which such Interest Accrual Period forms part; and, in respect of any other period, the amount of interest payable per Calculation Amount for that period.
"Interest Commencement Date" means the Issue Date or such other date as may be specified hereon.
"Interest Determination Date" means, with respect to a Rate of Interest and Interest Accrual Period, the date specified as such hereon or, if none is so specified: (i) the first day of such Interest Accrual Period if the Specified Currency is
sterling or (ii) the day falling two Business Days in London prior to the first day of such Interest Accrual Period if the Specified Currency is neither sterling nor euro or (iii) the day falling two TARGET Business Days prior to the first day of such Interest Accrual Period if the Specified Currency is euro.
"Interest Period" means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the first Interest Payment Date and each successive period beginning on (and including) an Interest Payment Date and ending on (but excluding) the next succeeding Interest Payment Date.
"Interest Period Date" means each Interest Payment Date unless otherwise specified hereon.
"ISDA Definitions" means the 2006 ISDA Definitions as amended or supplemented, as published by the International Swaps and Derivatives Association, Inc. unless otherwise specified hereon.
"Mid-Swap Benchmark Rate" means EURIBOR if the Specified Currency is euro, CDOR if the Specified Currency is Canadian dollars or LIBOR for the Specified Currency if the Specified Currency is not one of the currencies listed in this definition.
"Mid-Swap Maturity" has the meaning specified hereon.
"Mid-Swap Rate" means for any Reset Period the arithmetic mean of the bid and offered rates for the fixed leg payable with a frequency equivalent to the frequency with which scheduled interest payments are payable on the Notes during the relevant Reset Period (calculated on the day count basis customary for fixed rate payments in the Specified Currency as determined by the Calculation Agent) of a fixed-for-floating interest rate swap transaction in the Specified Currency which transaction (i) has a term equal to the relevant Reset Period and commencing on the relevant Reset Date, (ii) is in an amount that is representative for a single transaction in the relevant market at the relevant time with an acknowledged dealer of good credit in the swap market, and (iii) has a floating leg based on the Mid -Swap Benchmark Rate for the Mid-Swap Maturity as specified hereon (calculated on the day count basis customary for floating rate payments in the Specified Currency as determined by the Calculation Agent).
"Original Reference Rate" means the originally specified reference rate used to determine the Rate of Interest (or any component part thereof) (being LIBOR or EURIBOR or CDOR), in each case for the relevant period, as specified hereon.
"Rate of Interest" means the rate of interest payable from time to time in respect of this Note and that is either specified or calculated in accordance with the provisions hereon.
"Reference Banks" means, in the case of a determination of LIBOR, the principal London office of four major banks in the London inter-bank market, in the case of a determination of EURIBOR, the principal Eurozone office of four major banks in the Eurozone inter-bank market, in the case of a determination of CDOR, four major Canadian Schedule I chartered banks, in each case selected by the Calculation Agent or as specified hereon and in the case of a Benchmark Gilt Rate, four brokers of gilts and/or gilt-edged market makers selected by the Calculation Agent in its discretion after consultation with the Issuer.
"Reference Bond" means, for any Reset Period, the Reference Bond specified hereon or, if no Reference Bond is specified hereon or if the relevant Reference Bond is no longer outstanding at the relevant time, such government security or securities issued by the government of the state responsible for issuing the Specified Currency (which, if the Specified Currency is euro, shall be Germany) selected by the Issuer after consultation with the Calculation Agent as having an actual or interpolated maturity date comparable with the last day of the relevant Reset Period and that would be utilised, at the time of selection and in accordance with customary financial practice, in pricing new issuances of corporate debt securities denominated in the Specified Currency and of a comparable maturity to the relevant Reset Period.
"Reference Bond Dealer" means each of four banks (selected by the Issuer after consultation with the Calculation Agent), or their affiliates, which are primary government securities dealers or market makers in pricing corporate bond issuances denominated in the Specified Currency.
"Reference Bond Dealer Quotations" means, with respect to each Reference Bond Dealer and the relevant Reset Determination Date, the arithmetic mean, as determined by the Calculation Agent, of the bid and offered prices for the Reference Bond (expressed in each case as a percentage of its nominal amount) as at approximately 11.00 a.m. in the principal financial centre of the Specified Currency on the relevant Reset Determination Date and quoted in writing to the Calculation Agent by such Reference Bond Dealer.
"Reference Bond Price" means, with respect to a Reset Determination Date, (a) the arithmetic mean of the Reference Bond Dealer Quotations for that Reset Determination Date, after excluding the highest and lowest such Reference Bond Dealer Quotations, or (b) if the Calculation Agent obtains fewer than four such Reference Bond Dealer Quotations, the arithmetic mean of all such quotations or (c) if the Calculation Agent obtains only one Reference Bond Dealer Quotation, the Reference Bond Dealer Quotation obtained or (d) if the Calculation Agent obtains no Reference Bond Dealer Quotations, the Subsequent Reset Rate of Interest shall be that which was determined on the last preceding Reset Determination Date or, in the case of the first Reset Determination Date, the First Reset Rate of Interest shall be t he Initial Rate of Interest, in each case, as determined by the Calculation Agent.
"Reference Bond Rate" means, in respect of a Reset Period, the annual yield to maturity or interpolated yield to maturity (on the relevant day count basis) of the Reference Bond, assuming a price for such Reference Bond (expressed as a percentage of its nominal amount) equal to the Reference Bond Price.
"Relevant Nominating Body" means, in respect of any Original Reference Rate:
"Relevant Screen Page" means such page, section, caption, column or other part of a particular information service as may be specified hereon.
"Reset Determination Date" means, in respect of the First Reset Period, the second Business Day prior to the First Reset Note Reset Date and, in respect of each Reset Period thereafter, the second Business Day prior to the first day of each such Reset Period.
"Reset Margin" means the margin specified as such hereon. In setting the Reset Margin the Issuer shall have consideration to the limitations set out in any Relevant Rules.
"Reset Note Reset Date" means every date which falls on each Anniversary Date as may be specified hereon.
"Reset Period" means the First Reset Period or a Subsequent Reset Period.
"Reset Rate" means:
"Reset Rate Determination Date" means, in respect of each Reset Period, the day falling five U.S. Government Securities Business Days prior to the relevant Reset Date.
"Reset Rate Screen Page" has the meaning specified hereon.
"Reset Reference Dealer Rate" means, on any Reset Rate Determination Date, the rate calculated by the Calculation Agent as being a yield-to-maturity based on the arithmetic mean of the secondary market bid prices for Reset U.S. Treasury Securities at approximately 4:30 p.m. (New York City time) on such Reset Rate Determination Date, of leading primary U.S. government securities dealers in New York City (each, a "Reference Dealer"). The Calculation Agent will select five Reference Dealers to provide such bid prices and will eliminate 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); provided, however, that, if fewer than five but more than two such bid prices are provided, then neither the highest nor the lowest of those quotations will be eliminated prior to calculating the arithmetic mean of such bid prices.
"Reset U.S. Treasury Securities" means, on any Reset Rate Determination Date, U.S. Treasury Securities with an U.S. Treasury Original Maturity as specified hereon, a remaining term to maturity of no more than one (1) year shorter than U.S. Treasury Original Maturity and in a principal amount equal to an amount that is representative for a single transaction in such U.S. Treasury Securities in the New York City market. If two (2) U.S. Treasury Securities have remaining terms to maturity equally close to U.S. Treasury Original Maturity, the U.S. Treasury Security with the shorter remaining term to maturity will be used.
"Specified Currency" means the currency specified as such hereon or, if none is specified, the currency in which the Notes are denominated.
"Subsequent Reset Period" means each successive period other than the First Reset Period from (and including) a Reset Note Reset Date to (but excluding) the next succeeding Reset Note Reset Date.
"Subsequent Reset Rate of Interest" means, in respect of any Subsequent Reset Period, the rate of interest being determined by the Calculation Agent on the relevant Reset Determination Date as the sum of the relevant Reset Rate plus the Reset Margin.
"Successor Reference Rate" means the rate which has been formally published, endorsed, approved, recommended or recognised as a successor or replacement to the relevant Original Reference Rate by any Relevant Nominating Body.
"TARGET System" means the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET2) System or any successor thereto.
"U.S. Government Securities Business Days" means any day except for a Saturday, Sunday or a day on which the Securities Industry and Financial Markets Association or its successor recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
"U.S. Treasury Securities" means securities that are direct obligations of the United States Treasury, issued other than on a discount rate basis.
The Issuer shall procure that there shall at all times be one or more Calculation Agent(s) if provision is made for them hereon and for so long as any Note is outstanding (as defined in the Trust Deed). Where mo re than one Calculation Agent is appointed in respect of the Notes, references in these Conditions to the Calculation Agent shall be construed as each Calculation Agent performing its respective duties under the Conditions. If the Calculation Agent is unable or unwilling to act as such or if the Calculation Agent fails duly to establish the Rate of Interest for an Interest Period or Interest Accrual Period or to calculate any Interest Amount, Final Redemption Amount, Optional Redemption Amount or Special Redemption Price, as the case may be, or to comply with any other requirement, the Issuer shall (with the prior approval of the Trustee) appoint a leading bank or investment banking firm engaged in the inter-bank market (or, if appropriate, money, swap or overthe-counter index options market) that is most closely connected with the calculation or determination to be made by the Calculation Agent (acting through its principal London office or any other office actively involved in such market) to act as such in its place. The Calculation Agent may not resign its duties without a successor having been appointed as aforesaid.
If Optional Interest Payment Date is specified hereon, the Issuer may elect in respect of any Optional Interest Payment Date by notice to the Noteholders, the Paying Agent and the Trustee pursuant to Condition 5(d) below, to defer payment of all (but not some only) of the interest accrued to that date and the Issuer shall not have any obligation to make such payment on that date.
Notwithstanding any other provision in these Conditions or the Trust Deed, the deferral of any payment of interest on an Optional Interest Payment Date in accordance with this Condition 5(a) or in accordance with Condition 3(b) will not constitute a default by the Issuer and will not give the Noteholders or the Trustee any right to accelerate the Notes.
Payment of interest on the Notes will be mandatorily deferred on each Mandatory Interest Deferral Date. The Issuer shall notify the Noteholders, the Paying Agent and the Trustee of any Mandatory Interest Deferral Date in accordance with Condition 5(d).
A certificate signed by two Directors or other Authorised Signatories (as defined in the Trust Deed) confirming that (a) a Regulatory Deficiency Interest Deferral Event has occurred and is continuing, or would occur if payment of interest on the Notes were to be made or (b) a Regulatory Deficiency Interest Deferral Event has ceased to occur and/or payment of interest on the Notes would not result in a Regulatory Deficiency Interest Deferral Event occurring, shall, in the absence of manifest error, be treated and accepted by the Issuer, the Trustee, the holders of the Notes and the Coupons relating to them and all other interested parties as correct and sufficient evidence thereof and the Trustee shall be entitled to rely on such certificate without liability to any person.
Notwithstanding any other provision in these Conditions or in the Trust Deed, the deferral of any payment of interest on a Mandatory Interest Deferral Date in accordance with this Condition 5(b) or in accordance with Condition 3(b) will not constitute a default by the Issuer and will not give Noteholders or the Trustee any right to accelerate repayment of the Notes.
Any interest in respect of the Notes not paid on an Interest Payment Date as a result of the exercise by the Issuer of its discretion pursuant to Condition 5(a) (if applicable) or the obligation on the Issuer to defer pursuant to Condition 5(b) or due to the operation of the Solvency Condition contained in Condition 3(b), together with any other interest in respect thereof not paid on an earlier Interest Payment Date shall, so long as the same remains unpaid, constitute "Arrears of Interest". Arrears of Interest shall not themselves bear interest.
Any Arrears of Interest and any other amount, payment of which is deferred in accordance with Conditions 5(a), 5(b) or 3(b), may (subject to Condition 3(b), to any notifications to, or consent from (in either case if and to the extent applicable), the Relevant Regulator and to any other requirements under the Relevant Rules), be paid in whole or in part at any time upon the expiry of not less than 14 days' notice to such effect given by the Issuer to the Trustee, the Paying Agent and the Noteholders in accordance with Condition 16, and in any event will become due and payable (subject, in the case of (i) and (iii) below, to Condition 3(b) and any notifications to, or consent from (in either case if and to the extent applicable), the Relevant Regulator) in whole (and not in part) upon the earliest of the following dates:
The Issuer shall notify the Trustee, the Paying Agent and the Noteholders in writing in accordance with Condition 16 not less than 5 Business Days prior to an Interest Payment Date:
(C) the Relevant Regulator does not consent to the redemption (to the extent that consent is then required by the Relevant Regulator or the Relevant Rules) or such redemption otherwise cannot be effected in compliance with the Relevant Rules on such date,
the Issuer shall notify the Trustee and the Issuing and Paying Agent in writing and notify the Noteholders in accordance with Condition 16 no later than five Business Days prior to the Maturity Date (if any) or the date specified for redemption in accordance with Condition 6(c), Condition 6(d), Condition 6(e), Condition 6(f) or Condition 6(g), as applicable, (or as soon as reasonably practicable if the relevant circumstance requiring redemption to be deferred arises, or is determined, less than five Business Days prior to the relevant redemption date).
(vi) A certificate signed by two Directors or other Authorised Signatories (as defined in the Trust Deed) confirming that (A) a Regulatory Deficiency Redemption Deferral Event has occurred and is continuing, or would occur if redemption of the Notes were to be made or (B) a Regulatory Deficiency Redemption Deferral Event has ceased to occur and/or redemption of the Notes would not result in a Regulatory Deficiency Redemption Deferral Event occurring or (C) that any circumstance described in Condition 6(a)(iii)(B) or (C) apply, shall, in the absence of manifest error, be treated and accepted by the Issuer, the Trustee, the holders of the Notes and the Coupons relating to them and all other interested parties as correct and sufficient evidence thereof and the Trustee shall be entitled to rely on such certificate without liability to any person.
(vii) Notwithstanding any other provision in these Conditions or in the Trust Deed, the deferral of redemption of the Notes in accordance with Condition 3(b) or this Condition 6 will not constitute a default by the Issuer and will not give Noteholders or the Trustee any right to accelerate the Notes.
Notwithstanding the above requirements of this Condition 6(b), if, at the time of any redemption, variation or purchase, the Relevant Rules permit the redemption, variation or purchase only after compliance with one or more alternative or additional conditions to those set out above (if and to the extent required or applicable in order for the notes to qualify as Tier 3 Capital of the Issuer and/or the Group under the Relevant Rules from time to time), the Issuer shall comply with such alternative and/or, as appropriate additional condition(s) as are then so required.
If immediately prior to the giving of the notice referred to below:
(i) as a result of a change in or proposed change in, or amendment or proposed amendment to, the laws or regulations of the UK or any political subdivision or authority therein or thereof having the power to tax, including any treaty to which the UK is a party, or any change in the application of official or generally published interpretation of such laws, including a decision of any court or tribunal, or any interpretation or pronouncement by any relevant tax authority that provides for a position with respect to such laws or regulations that differs from the previously generally accepted position in relation to similar transactions (in respect of securities similar to the Notes and which are capable of constituting Tier 3 Capital) or which differs from any specific written confirmation given by a tax authority in respect of the Notes, which change or amendment becomes, or would become, effective, or in the case of a change or proposed change in law if such change is enacted (or, in the case of a proposed change, is expected to be enacted) by UK Act of Parliament or by Statutory Instrument, on or after the Issue Date of the Notes (each a "Tax Law Change"), in making any payments on the Notes, the Issuer has paid or will or would on the next payment date be required to pay Additional Amounts (as defined in Condition 8) on the Notes and the Issuer cannot avoid the foregoing in connection with the Notes by taking measures reasonably available to it; or
Prior to the publication of any notice of substitution, variation or redemption pursuant to this Condition 6(c) the Issuer shall deliver to the Trustee a certificate signed by two Directors or other Authorised Signatories (as defined in the Trust Deed) of the Issuer stating that the relevant requirement or circumstance referred to in subparagraph (i) or (ii) above applies and the Trustee shall accept such certificate as sufficient evidence of the satisfaction of the conditions precedent set out in such paragraphs (without liability to any person) in which event it shall be conclusive and binding on the Trustee and the Noteholders and the Couponholders. Upon expiry of such notice the Issuer shall (subject to Condition 6(b) and, in the case of a redemption, to Condition 3(b), Condition 6(a)(ii), Condition 6(a)(iii), Condition 6(a)(iv) and Condition 6(a)(v)) either redeem, vary or substitute the Notes, as the case may be.
In connection with any substitution or variation in accordance with this Condition 6(c), the Issuer shall comply with the rules of any stock exchange or other relevant authority on which the Notes are for the time being listed or admitted to trading, and (for so long as the Notes are listed on the Official List of the FCA in its capacity as competent authority under the Financial Services and Markets Act 2000 (the "FSMA") and admitted to trading on the Main Market of the London Stock Exchange) shall publish a supplement in connection therewith if the Issuer is required to do so in order to comply with Section 87 of the FSMA.
Unless the Issuer shall have given notice to redeem the Notes under Condition 6(c) or Condition 6(e) or Condition 6(f) on or prior to the expiration of the notice referred to below, and if Call Option is specified hereon, the Issuer may at its option, subject to Condition 3(b), Condition 6(a)(ii) and Condition 6(b) and having given not less than 30 nor more than 60 days' irrevocable notice to the Noteholders (or such other notice period as may be specified hereon) redeem all or, if so provided, some of the Notes on any Optional Redemption Date specified hereon. Any such redemption of Notes shall be at their Optional Redemption Amount (as may be provided for hereon) together with any interest accrued to (but excluding) the date fixed for redemption in accordance with these Conditions and any Arrears of Interest. Any such redemption or exercise must relate to Notes of a principal amount at least equal to the Minimum Redemption Amount to be redeemed specified hereon and no greater than the Maximum Redemption Amount to be redeemed specified hereon.
All Notes in respect of which any such notice is given shall be redeemed, or the Issuer's option shall be exercised, on the date specified in such notice in accordance with this Condition.
In the case of a partial redemption or a partial exercise of an Issuer's option, the notice to Noteholders shall also contain the certificate numbers of the Notes to be redeemed or in respect of which such option has been exercised, which shall have been drawn in such place as the Trustee may approve and in such manner as it deems
appropriate, subject to compliance with any applicable laws and stock exchange or other relevant authority requirements.
If Capital Disqualification Call is specified hereon and within the period from and including the date of the occurrence of a Capital Disqualification Event to and including the date which is the first anniversary of such occurrence (or such shorter period as may be set out hereon), the Issuer gives the notice referred to below and if on the date of such notice a Capital Disqualification Event is continuing, then:
Prior to the publication of any notice of substitution, variation or redemption pursuant to this Condition 6(e) the Issuer shall deliver to the Trustee a certificate signed by two Directors or other Authorised Signatories (as defined in the Trust Deed) stating that a Capital Disqualification Event has occurred and is continuing as at the date of the certificate, and the Trustee shall accept such certificate as sufficient evidence of the occurrence and continuation of a Capital Disqualification Event (without liability to any person) in which event it shall be conclusive and binding on the Trustee and the Noteholders and the Couponholders. Upon expiry of such notice the Issuer shall (subject to Condition 6(b) and, in the case of a redemption, to Condition 3(b), Condition 6(a)(ii), Condition 6(a)(iii), Condition 6(a)(iv) and Condition 6(a)(v)) either redeem, vary or substitute the Notes, as the case may be.
In connection with any substitution or variation in accordance with this Condition 6(e), the Issuer shall comply with the rules of any stock exchange or other relevant authority on which the Notes are for the time being listed or admitted to trading.
If a Rating Methodology Call is specified hereon, and if after a date (the "Rating Methodology Event Commencement Date") specified as such hereon a Rating Methodology Event occurs and within the period from and including the date of the occurrence of such Rating Methodology Event to and including the date which is (i) the first anniversary of such occurrence or (ii) if a later first call date is specified hereon, such later call date (the "Rating Methodology Event First Call Date"), the Issuer gives the notice referred to below and if on the date of such notice the Rating Methodology Event is continuing, then:
notice shall be irrevocable), substitute at any time all (and not some only) of the Notes for, or vary the terms of the Notes so that they become Rating Agency Compliant Securities, and the Trustee shall (subject to the following provisions of this paragraph (ii) and subject to the receipt by it of certificates of Directors of the Issuer referred to below and in the definition of Qualifying Tier 3 Securities and Rating Agency Compliant Securities) agree to such substitution or variation. The Trustee shall use its reasonable endeavours to assist the Issuer in the substitution or variation of the Notes for or into Rating Agency Compliant Securities provided that the Trustee shall not be obliged to participate or assist in any such substitution or variation of the terms of the securities into which the Notes are to be substituted or are to be varied if such substitution or variation imposes, in the Trustee's opinion, more onerous obligations upon it. If the Trustee does not so participate or assist as provided above, the Issuer may, subject as provided above, redeem the Notes as provided above.
Prior to the publication of any notice of substitution, variation or redemption pursuant to this Condition 6(f) the Issuer shall deliver to the Trustee a certificate signed by two Directors or other Authorised Signatories (as defined in the Trust Deed) stating that a Rating Methodology Event has occurred and is continuing as at the date of the certificate, and the Trustee shall accept such certificate as sufficient evidence of the occurrence and continuation of a Rating Methodology Event (without liability to any person) in which event it shall be conclusive and binding on the Trustee and the Noteholders and the Couponholders. Upon expiry of such notice the Issuer shall (subject to Condition 6(b) and, in the case of a redemption, to Condition 3(b), Condition 6(a)(ii), Condition 6(a)(iii), Condition 6(a)(iv)) and Condition 6(a)(v)) either redeem, vary or substitute the Notes, as the case may be.
In connection with any substitution or variation in accordance with this Condition 6(f), the Issuer shall comply with the rules of any stock exchange or other relevant authority on which the Notes are for the time being listed or admitted to trading.
Subject to Condition 3(b), Condition 6(a)(ii) and Condition 6(b), if at any time after the Issue Date, 80 per cent. or more of the aggregate principal amount of the Notes originally issued (and, for these purposes, any further securities issued pursuant to Condition 15 will be deemed to have been originally issued) has been redeemed and/or purchased and cancelled, then the Issuer may, at its option (without any requirement for the consent or approval of the Noteholders), and having given not less than 30 nor more than 60 days' notice to the Trustee, the Paying Agent, the Registrar and, in accordance with Condition 16, the Noteholders (which notice shall be irrevocable and shall specify the date fixed for redemption), redeem all (but not some only) of the Notes at any time at their principal amount, together with (to the extent that such interest has not been cancelled in accordance with these Conditions) any accrued and unpaid interest to (but excluding) the date of redemption and any Arrears of Interest.
Subject to Conditions 3(b) and 6(b), the Issuer and any of its Subsidiaries for the time being may, subject to the Issuer having complied with regulatory rules on notification to, or consent from (in each case if and to the extent applicable), the Relevant Regulator, at any time purchase Notes (provided that all unmatured Coupons and unexchanged Talons relating thereto are attached thereto or surrendered therewith) in the open market or otherwise and at any price.
All Notes purchased by or on behalf of the Issuer or any of its Subsidiaries may (at the option of the Issuer or the relevant Subsidiary) be held, reissued, resold or surrendered for cancellation, in the case of Bearer Notes, by surrendering each suchNote together with all unmatured Coupons and all unexchanged Talons to the Issuing and Paying Agent and, in the case of Registered Notes, by surrendering the Certificate representing such Notes to the Registrar and, in each case, if so surrendered, shall, together with all Notes redeemed by the Issuer, be cancelled forthwith (together with all unmatured Coupons and unexchanged Talons attached thereto or surrendered therewith). Any Notes so redeemed or surrendered for cancellation may not be reissued or res old and the obligations of the Issuer in respect of any such Notes and Coupons shall be discharged.
The Trustee shall not be under any duty to monitor whether any event or circumstance has happened or exists within this Condition 6 and will not be responsible to Noteholders for any loss arising from any failure or delay by the Trustee to do so. Unless and until the Trustee has actual knowledge of the occurrence of any event or circumstance within this Condition 6, it shall be entitled to assume that no such event or circumstance exists.
Payments of principal and interest in respect of Bearer Notes shall, subject as mentioned below, be made against presentation and surrender of the relevant Notes (in the case of all payments of principal and, in the case of interest, as specified in Condition 7(f)(v)) or Coupons (in the case of interest, save as specified in Condition 7(f)(ii)), as the case may be, at the specified office of any Paying Agent outside the U.S. by a cheque payable in the relevant currency drawn on, or, at the option of the holder, by transfer to an account denominated in such currency with, a Bank. "Bank" means a bank in the principal financial centre for such currency or, in the case of euro, in a city in which banks have access to the TARGET System.
Notwithstanding the foregoing, if any Bearer Notes are denominated in U.S. dollars, payments in respect thereof may be made at the specified office of any Paying Agent in New York City in the same manner as aforesaid if (i) the Issuer shall have appointed Paying Agents with specified offices outside the U.S. with the reasonable expectation that such Paying Agents would be able to make payment of the amounts on the Notes in the manner provided above when due, (ii) payment in full of such amounts at all such offices is illegal or effectively precluded by exchange controls or other similar restrictions on payment or receipt of such amounts and (iii) such Payment is then permitted by U.S. law, without involving, in the opinion of the Issuer, any adverse tax consequence to the Issuer.
All payments are subject in all cases to any applicable fiscal or other laws, regulations and directives in any jurisdiction (whether by operation of law or agreement of the Issuer or its agents) and the Issuer will not be liable to pay any additional amount in respect of taxes or duties of whatever nature imposed or levied by or pursuant to such laws, regulations, directives or agreements, but without prejudice to the provisions of Condition 8. No commission or expenses shall be charged to the Noteholders or Couponholders in respect of such payments. For the purpose of this paragraph, the phrase "fiscal or other laws, regulations and directives" shall include any withholding or deduction imposed by sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended ("FATCA"), any regulations thereunder, any law implementing an inter-governmental approach thereto, any agreement entered into pursuant to FATCA, or any official interpretation of FATCA.
The Issuing and Paying Agent, the Paying Agents, the Registrar, the Transfer Agents and the Calculation Agent initially appointed by the Issuer and their respective specified offices are listed below. Subject as provided in the Agency Agreement, the Issuing and Paying Agent, the Paying Agents, the Registrar, the Transfer Agents and the Calculation Agent act solely as agents of the Issuer and do not assume any obligation or relationship of agency or trust for or with any Noteholder or Couponholder. The Issuer reserves the right at any time with the approval of the Trustee to vary or terminate the appointment of the Issuing and Paying Agent, any other Paying Agent, the Registrar, any Transfer Agent or the Calculation Agent(s) and to appoint additional or other Paying Agents or Transfer Agents, provided that the Issuer shall at all times maintain (i) an Issuing and Paying Agent, (ii) a Registrar in relation to Registered Notes, (iii) a Transfer Agent in relation to Registered Notes, (iv) one or more Calculation Agent(s) where the Conditions so require, and (v) a Paying Agent having s pecified offices in London so long as the Notes are admitted to the Official List of the FCA in its capacity as competent authority under the Financial Services and Markets Act 2000 and admitted to trading on the Main Market of the London Stock Exchange.
In addition, the Issuer shall forthwith appoint a Paying Agent in New York City in respect of any Bearer Notes denominated in U.S. dollars in the circumstances described in Condition 7(c).
Notice of any such change or any change of any specified office shall promptly be given to the Noteholders. If any additional Paying Agents are appointed in connection with any Series, the names of such Paying Agents will be specified in Part B of the applicable Final Terms or Pricing Supplement.
On or after the Interest Payment Date for the final Coupon forming part of a Coupon sheet issued in respect of any Bearer Note, the Talon forming part of such Coupon sheet may be surrendered at the specified office of the Issuing and Paying Agent in exchange for a further Coupon sheet (and another Talon for a further Coupon sheet) (but excluding any Coupons that may have become void pursuant to Condition 9).
If any date for payment in respect of any Note or Coupon is not a Business Day, the holder shall not be entitled to payment until the next following Business Day nor to any interest or other sum in respect of such postponed payment.In this paragraph, "Business Day" means a day (other than a Saturday or a Sunday) on which banks and foreign exchange markets are open for business in the relevant place of presentation, in such jurisdictions as shall be specified as "Additional Financial Centres" hereon and:
All payments of principal and interest by or on behalf of the Issuer in respect of the Not es and the Coupons shall be made free and clear of, and without withholding or deduction for or on account of, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the UK or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law. In that event, the Issuer shall pay such additional amounts in respect of interest payments (but not in respect of any payments of principalor any other amounts) as shall result in receipt by the Noteholders and Couponholders of such amounts as would have been received by them in respect of payments of interest had no such withholding or deduction been required by law to be made, except that no such additional amounts shall be payable with respect to any Note or Coupon:
presented for payment by or on behalf of a holder who is liable to such taxes, duties, assessments or governmental charges in respect of such Note or Coupon by reason of his having some connection with the UK other than the mere holding of the Note or Coupon; or
presented for payment by or on behalf of, a holder who could lawfully avoid (but has not so avoided) such deduction or withholding by complying or procuring that any third party complies with any statutory requirements or by making or procuring that any third party makes a declaration of non -residence or other similar claim for exemption to any tax authority in the place where the relevant Note (or the Certificate representing it) or Coupon is presented for payment; or
presented (or in respect of which the Certificate representing it is presented) for payment more than 30 days after the Relevant Date (as defined below) except to the extent that the holder of it would have been entitled to such additional amounts on presenting it for payment on the thirtieth day after the Relevant Date; or
where such withholding or deduction arises out of any combination of paragraphs (a) to (c) above.
As used in these Conditions, "Relevant Date" in respect of any Note or Coupon means the date on which payment in respect of it first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which payment in full of the amount outstanding is made or (if earlier) the date seven days after that on which notice is duly given to the Noteholders that, upon further presentation of the Note (or relevant Certificate) or Coupon being made in accordance with the Conditions, such payment will be made, provided that payment is in fact made upon such presentation. References in these Conditions to (i) "principal" shall be deemed to include any premium payable in respect of the Notes, Final Redemption Amount, Optional Redemption Amount or Special Redemption Price and all other amounts in the nature of principal payable pursuant to Condition 6 or any amendment or supplement to it and (ii) "interest" shall be deemed to include any additional amounts that may be payable under this Condition or any undertaking given in addition to or in substitution for it under the Trust Deed ("Additional Amounts"), all Interest Amounts and all other amounts payable pursuant to Condition 4 or any amendment or supplement to it.
Claims against the Issuer for payment in respect of the Notes and Coupons (which, for this purpose, shall not include Talons) shall be prescribed and become void unless made within ten years (in the case of principal) or five years (in the case of interest) from the appropriate Relevant Date in respect of them.
Notwithstanding any of the provisions below in this Condition 10, the right to institute winding- up proceedings is limited to circumstances where payment has become due. Pursuant to Condition 3(b), no principal, interest or any other amount will be due on the relevant payment date if the Solvency Condition is not satisfied, at the time of and immediately after any such payment. In the case of any payment of interest in respect of the Notes, such payment may be deferred pursuant to Condition 5(a) and if so deferred will not be due and will be deferred and not be due if Condition 5(b) applies and, in the case of payment of principal, such payment will be deferred and will not be due if Condition 6(a)(ii) applies or the Relevant Regulator does not consent to the redemption (to the extent that consent is then required by the Relevant Regulator or the Relevant Rules), or such redemption otherwise cannot be effected in compliance with the Relevant Rules on such date.
If:
the Trustee may at its discretion institute proceedings for the winding-up of the Issuer and/or prove in the winding-up or administration of the Issuer and/or claim in the liquidation of the Issuer for such payment, but may take no further or other action to enforce, prove or claim for any such payment. No payment in
respect of the Notes, the Coupons or the Trust Deed may be made by the Issuer pursuant to Condition 10(a), nor will the Trustee accept the same, otherwise than during or after a winding-up of the Issuer or after an administrator of the Issuer has given notice that it intends to declare and distribute a dividend, unless the Issuer has given prior written notice (with a copy to the Trustee) to, and received consent (if required) from, the Relevant Regulator which the Issuer shall confirm in writing to the Trustee.
If an order is made by the competent court or resolution passed for the winding-up of the Issuer (except, in any such case, a solvent winding-up, solely for the purpose of a reconstruction or amalgamation of the Issuer, the terms of which reconstruction or amalgamation (i) have previously been approved in writing by the Trustee or by an Extraordinary Resolution and (ii) do not provide that the Notes shall thereby become payable) or an administrator of the Issuer gives notice that it intends to declare and distribute a dividend, the Trustee at its discretion may, and if so requested by Noteholders of at least one-quarter in principal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution shall (subject in each case to Condition 10(d)), give notice to the Issuer that the Notes are, and they shall accordingly forthwith become, immediately due and repayable at the amount equal to their principal amount together with accrued interest and any Arrea rs of Interest.
Without prejudice to Condition 10(a) or (b) above, the Trustee may at its discretion and without further notice institute such proceedings against the Issuer as it may think fit to enforce any obligation, condition or provision binding on the Issuer under the Trust Deed, the Notes or the Coupons (other than any payment obligation of the Issuer under or arising from the Notes, the Coupons or the Trust Deed including, without limitation, payment of any principal, premium or interest in respect of the Notes or the Coupons and any damages awarded for breach of any obligations) and in no event shall the Issuer, by virtue of the institution of any such proceedings, be obliged to pay any sum or sums (in cash or otherwise) sooner than the same would otherwise have been payable by it. Nothing in this Condition 10(c) shall, subject to Condition 10(a), prevent the Trustee instituting proceedings for the winding-up of the Issuer, proving in any winding-up of the Issuer and/or claiming in any liquidation of the Issuer in respect of any payment obligations of the Issuer arising from the Notes, the Coupons or the Trust Deed (including without limitation, payment of any principal, premiums, or interest in respect of the Notes or the Coupons and any damages awarded for any breach of any obligations).
The Trustee shall not be bound to take any of the actions referred to in Condition 10(a), (b) or (c) above to enforce the obligations of the Issuer under the Trust Deed, the Notes or the Coupons unless (i) it shall have been so directed by an Extraordinary Resolution of the Noteholders or so requested in writing by the holders of at least one-quarter in principal amount of the Notes then outstanding and (ii) it shall have been indemnified and/or secured and/or prefunded to its satisfaction.
No Noteholder or Couponholder shall be entitled to proceed directly against the Issuer or to institute proceedings for the winding-up or claim in the liquidation of the Issuer or to prove in such winding-up unless the Trustee, having become so bound to proceed or being able to prove in such winding-up or claim in such winding-up, fails to do so within a reasonable period and such failure shall be continuing, in which case the Noteholder or Couponholder shall have only such rights against the Issuer as those which the Trustee is entitled to exercise as set out in this Condition 10. Any such proceedings brought by any Noteholder or Couponholder shall be brought in the name of the Trustee, subject to such Noteholder or Couponholder indemnifying and/or securing and/or prefunding the Trustee to its satisfaction.
No remedy against the Issuer, other than as referred to in this Condition 10, shall be available to the Trustee or the Noteholders or Couponholders, whether for the recovery of amounts owing in respect of the Notes or under the Trust Deed or in respect of any breach by the Issuer of any of its other obligations under or in respect of the Notes, Coupons or under the Trust Deed.
The Trust Deed contains provisions for convening meetings of Noteholders to consider any matter affecting their interests, including the sanctioning by Extraordinary Resolution (as defined in the Trust Deed) of a modification of any of these Conditions or any provisions of the Trust Deed. Such a meeting may be convened by Noteholders holding not less than 10 per cent. in principal amount of the Notes for the time being outstanding. The quorum
for any meeting convened to consider an Extraordinary Resolution shall be one or more persons holding or representing a clear majority in principal amount of the Notes for the time being outstanding, or at any adjourned meeting one or more persons holding or representing Noteholders whatever the principal amount of the Notes held or represented, unless the business of such meeting includes consideration of proposals, inter alia, (i) to amend the dates of maturity or redemption of the Notes or any date for payment of interest or Interest Amounts or Arrears of Interest on the Notes, (ii) to reduce or cancel the principal amount of, or any premium payable on redemption of, the Notes, (iii) to reduce the rate or rates of interest or Arrears of Interest in respect of the Notes or to vary the method or basis of calculating the rate or rates or amount of interest or the basis for calculating any Interest Amount in respect of the Notes, (iv) if a Minimum and/or a Maximum Rate of Interest is shown hereon, to reduce any such Minimum and/or Maximum, (v) to vary any method of, or basis for, calculating the Final Redemption Amount, the Optional Redemption Amount or the Special Redemption Price, (vi) to vary the currency or currencies of payment or denomination of the Notes, (vii) to take any steps that as specified hereon may only be taken following approval by an Extraordinary Resolution to which the special quorum provisions apply, (viii) to modify the provisions concerning the quorum required at any meeting of Noteholders or the majority required to pass an Extraordinary Resolution, or (ix) to modify Condition 3, in which case the necessary quorum shall be one or more persons holding or representing not less than two-thirds, or at any adjourned meeting not less than one-third, in principal amount of the Notes for the time being outstanding. The agreement or approval of the Noteholders shall not be required in the case of any variation of these Conditions and/or the Trust Deed required to be made in the circumstances described in Condition 6(c) or (e) in connection with the substitution or variation of the Notes so that they remain or become Qualifying Tier 3 Securities or in the circumstances described in Condition 6(f) in connection with the substitution or variation of the Notes so that they become Rating Agency Compliant Securities, and to which the Trustee has agreed pursuant to the relevant provisions of Condition 6(c), (e) or (f), as the case may be. Any Extraordinary Resolution duly passed shall be binding on Noteholders (whether or not they were present at the meeting at which such resolution was passed) and on all Couponholders.
The consent or approval of the Noteholders and the Couponholders shall not be required in the case of amendments to the Conditions pursuant to Condition 4(c)(iii)(F) to vary the method or basis of calculating the rate or rates or amount of interest or the basis for calculating any Interest Amount in respect of the Notes or for any other variation of these Conditions and/or the Trust Deed required to be made in the circumstances described in Condition 4(c)(iii)(F), where the Issuer has delivered to the Trustee a certificate pursuant to Condition 4(c)(iii)(F)(9).
The Trustee may agree, without the consent of the Noteholders or Couponholders, to (i) any modification of any of the provisions of the Trust Deed or the Agency Agreement that is in the opinion of the Trustee of a formal, minor or technical nature or is made to correct a manifest error, and (ii) any other modification (except as mentioned in the Trust Deed), and any waiver or authorisation of any breach or proposed breach, of any of these Conditions and the provisions of the Trust Deed or the Agency Agreement that is in the opinion of the Trustee not materially prejudicial to the interests of the Noteholders.
Any such modification, authorisation or waiver shall be binding on the Noteholders and the Couponholders and, if the Trustee so requires, such modification shall be notified to the Noteholders as soon as practicable.
No modification to these Conditions or any other provisions of the Trust Deed shall become effective unless the Issuer shall have given at least one month's prior written notice to, and received no objection from, the Relevant Regulator (or such other period of notice as the Relevant Regulator may from time to time require or accept and, in any event, provided that there is a requirement to give such notice).
The Trustee, if it is satisfied that so to do would not be materially prejudicial to the interests of the Noteholders or Couponholders, may agree with the Issuer, without the consent of the Noteholders or Couponholders, to the substitution on a subordinated basis equivalent to that referred to in Condition 3 of any person or persons incorporated in any country in the world (other than the U.S.) (the "Substitute Obligor") in place of the Issuer (or any previous Substitute Obligor under this Condition) as a new principal debtor under the Trust Deed, the Notes and the Coupons provided that:
(i) a trust deed is executed or some other form of undertaking is given by the Substitute Obligor in form and manner satisfactory to the Trustee, agreeing to be bound by the terms of the Trust Deed, the Notes, the Coupons and the Talons, with any consequential amendments which the Trustee may deem appropriate, as fully as if the Substitute Obligor had been named in the Trust Deed and on the Notes, the Coupons and the Talons, as the principal debtor in place of the Issuer (or of any previous Substitute Obligor, as the case may be);
In connection with any proposed substitution as aforesaid, the Trustee shall have regard to the interests of the Noteholders as a class and the Trustee shall not have regard to the consequences of such substitution or such exercise for individual Noteholders or Couponholders resulting from their being for any purpose domiciled or resident in, or otherwise connected with. or subject to the jurisdiction of, any particular territory. In connection with any substitution or such exercise as aforesaid, no Noteholder or Couponholder shall be entitled to claim, whether from the Issuer, the Substitute Obligor or the Trustee or any other person, any indemnification or payment in respect of any tax consequence of any such substitution or any such exercise upon any individual Noteholders or Couponholders except to the extent already provided in Condition 8 and/or any undertaking given in addition thereto or in substitution therefor pursuant to the Trust Deed.
Any substitution pursuant to this Condition 11 shall be subject (to the extent then required by the Relevant Regulator or the Relevant Rules) to any notifications to, or consent from, the Relevant Regulator.
In connection with the exercise of its functions (including but not limited to those referred to in Condition 11) the Trustee shall have regard to the interests of the Noteholders as a class and shall not have regard to the consequences of such exercise for individual Noteholders or Couponholders and the Trustee shall not be entitled to require, nor shall any Noteholder or Couponholder be entitled to claim, from the Issuer any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders or Couponholders.
The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility, including provisions relieving it from taking any action unless indemnified and/or secured and/or prefunded to its satisfaction. The Trustee is entitled to enter into business transactions with the Issuer and any entity related to the Issuer without accounting for any profit.
If a Note, Certificate, Coupon or Talon is lost, stolen, mutilated, defaced or destroyed, it may be replaced, subject to applicable laws, regulations and stock exchange or other relevant authority regulations, at the specified office of the Issuing and Paying Agent (in the case of Bearer Notes, Coupons or Talons) and of the Registrar (in the case of Certificates) or such other Paying Agent or Transfer Agent. as the case may be, as may from time to time be designated by the Issuer for the purpose and notice of whose designation is given to Noteholders, in each case on payment by the claimant of the fees and costs incurred in connection therewith and on such terms as to evidence, security and indemnity (which may provide, inter alia, that if the allegedly lost, stolen or destroyed Note, Certificate, Coupon or Talon is subsequently presented for payment or, as the case may be, for exchange for further Coupons, there shall be paid to the Issuer on demand the amount payable by the Issuer in respect of such Notes, Certificates, Coupons or further Coupons)
and otherwise as the Issuer may require. Mutilated or defaced Notes, Certificates, Coupons or Talons must be surrendered before replacements will be issued.
The Issuer may from time to time without the consent of the Noteholders or Couponholders create and issue further securities either having the same terms and conditions as the Notes in all respects (or in all respects except for the first payment of interest on them) and so that such further issue shall be consolidated and form a single series with the outstanding securities of any series (including the Notes) or upon such terms as the Issuer may determine at the time of their issue. References in these Conditions to the Notes include (unless the context requires otherwise) any other securitiesissued pursuant to this Condition and forming a single series with the Notes. Any further securities forming a single series with the outstanding securities of any series (including the Notes) constituted by the Trust Deed or any deed supplemental to it shall, and any other securities may (with the consent of the Trustee), be constituted by the Trust Deed. The Trust Deed contains provisions for convening a single meeting of the Noteholders and the holders of securities of other series where the Trustee so decides.
Notices to the holders of Registered Notes shall be mailed to them at their respective addresses in the Register and deemed to have been given on the fourth weekday (being a day other than a Saturday or a Sunday) after the date of mailing. Notices to the holders of Bearer Notes shall be valid if published in a daily newspaper of general circulation in London (which is expected to be the Financial Times). If in the opinion of the Trustee any such publication is not practicable, notice shall be validly given if published in another leading daily English language newspaper with general circulation in Europe. Any such notice shall be deemed to have been given on the date of such publication or, if published more than once or on different dates, on the first date on which publication is made, as provided above.
Couponholders shall be deemed for all purposes to have notice of the contents of any notice given to the holders of Bearer Notes in accordance with this Condition.
No person shall have any right to enforce any term or condition of the Notes under the Contracts (Rights of Third Parties) Act 1999.
As used herein:
"Arrears of Interest" has the meaning given to it in Condition 5;
"Assets" means the unconsolidated gross assets of the Issuer, as shown in the latest published audited balance sheet of the Issuer, but adjusted for subsequent events, all in such manner as the Directors may determine;
"Capital Disqualification Event" is deemed to have occurred if as a result of any replacement or change to (or change to the interpretation by any court or authority entitled to do so of) the Relevant Rules, the whole or any part of the principal amount of the Notes is no longer capable of counting as Tier 3 Capital for the purposes of the Issuer or the Group as a whole, whether on a solo, group or consolidated basis, except (in either case) where such non -qualification is only as a result of any applicable limitation on the amount of such capital;
"Clean-Up Event" means an event of the type described in Condition 6(g);
"Compulsory Interest Payment Date" means any Interest Payment Date in respect of which during the immediately preceding 6 months a Compulsory Interest Payment Event has occurred and is not a Mandatory Interest Deferral Date and on which the Solvency Condition is satisfied;
"Directors" means the directors of the Issuer;
"European Economic Area" or "EEA" means the countries comprising the European Union together with Norway, Liechtenstein and Iceland;
"FCA" means the UK Financial Conduct Authority in its capacity as the UK listing authority for the purposes of the Financial Services and Markets Act 2000 ("FSMA") or any successor authority appointed as the competent UK listing authority for the purposes of Part VI (Official Listing) of the FSMA or otherwise;
"Final Redemption Amount" has the meaning given to it in the relevant Final Terms or Pricing Supplement. In setting the Final Redemption Amount the Issuer shall have consideration to the limitations set out in any Relevant Rules;
"Group" means the Issuer and its Subsidiaries;
"Group Insurance Undertaking" means an insurance undertaking or reinsurance undertaking whose data is included for the purposes of the calculation of the Solvency Capital Requirement of the Group pursuant to the Relevant Rules;
in each case, where the assets of that Group Insurance Undertaking may or will be insufficient to meet all the claims of the policyholders and/or beneficiaries pursuant to a contract of insurance of that insurance undertaking which is in winding-up or administration (and for these purposes, the claims of policyholders or beneficiaries pursuant to a contract of insurance shall include all amounts to which policyholders or beneficiaries are entitled under applicable legislation or rules relating to the winding-up of insurance companies to reflect any right to receive or expectation of receiving benefits which policyholders or beneficiaries may have);
"insurance undertaking" has the meaning given to it in the Relevant Rules;
"Junior Securities" has the meaning given to it in Condition 3(a);
"Level 2 Regulations" means the Commission Delegated Regulation (EU) No. 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council of the European Union on the taking-up and pursuit of the business of insurance and reinsurance (Solvency II);
"Liabilities" means the unconsolidated gross liabilities of the Issuer, as shown in the latest published audited balance sheet of the Issuer, but adjusted for contingent liabilities and for subsequent events, all in such manner as the Directors may determine;
"Mandatory Interest Deferral Date" means each Interest Payment Date in respect of which a Regulatory Deficiency Interest Deferral Event has occurred and is continuing or would occur if payment of interest was made on such Int erest Payment Date;
"Maturity Date" has the meaning given to it in the relevant Final Terms or Pricing Supplement and if specified hereon will be at least five years from the Issue Date;
"Minimum Capital Requirement" means the Minimum Capital Requirement, the minimum consolidated group Solvency Capital Requirement or other minimum capital requirements (as applicable) referred to in the Relevant Rules;
"Optional Interest Payment Date" means any Interest Payment Date other than a Compulsory Interest Payment Date, if Compulsory Interest Payment Date is specified hereon, or a Mandatory Interest Deferral Date;
"Optional Redemption Amount" has the meaning given to it in the relevant Final Terms or Pricing Supplement. In setting the Optional Redemption Amount the Issuer shall have consideration to the limitations set out in any Relevant Rules;
"Ordinary Shares" means fully paid ordinary shares in the capital of the Issuer;
"Pari Passu Creditors" means creditors of the Issuer whose claims rank, or are expressed to rank pari passu with, the claims of the Noteholders including holders of Pari Passu Securities;
"Pari Passu Securities" has the meaning given to it in Condition 3(a);
"Qualifying Tier 3 Securities" means securities issued (including by way of exchange, conversion or otherwise) directly or indirectly by the Issuer that:
(i) have terms not materially less favourable to a holder than the terms of the Notes, as reasonably determined by the Issuer in consultation with an independent investment bank of international standing, and provided that a certification to such effect (including as to the consultation with the independent investment bank and in respect of the matters specified in (1) to (7) below) signed by two Directors or other Authorised Signatories (as defined in the Trust Deed) shall have been delivered to the Trustee (upon which the Trustee shall be entitled to rely without liability to any person) prior to the issue of the relevant securities, provided that they shall (1) contain terms which comply with the then current requirements of the Relevant Regulator in relation to Tier 3 Capital; (2) bear the same rate of interest from time to time applying to the Notes and preserve the Interest Payment Dates; (3) contain terms providing for mandatory deferral of payments of interest and/or principal only if such terms are not materially less favourable to a holder thereof than the mandatory interest deferral provisions contained in these Conditions; (4) rank senior to, or pari passu with, the Notes; (5) provide for the same Maturity Date (if one is specified hereon) and preserve the obligations (including the obligations arising from the exercise of any right) of the Issuer as to redemption of the Notes, including (without limitation) as to timing of, and amounts payable upon, such redemption, but provided that such Qualifying Tier 3 Securities may not be
redeemed by the Issuer prior to the first Optional Redemption Date specified hereon (save for redemption, substitution or variation on terms analogous with the terms of Condition 6(c) or (e) and subject to the same conditions as those set out in Condition 6(b)); (6) do not contain any term which provides for, requires or entitles the Issuer to effect any loss absorption through the write-down of the nominal amount of Qualifying Tier 3 Securities or conversion of such Qualifying Tier 3 Securities into Ordinary Shares; and (7) preserve any existing rights under these Conditions to any Arrears of Interest and any other amounts payable under the Notes which, in each case, has accrued to Noteholders and not been paid; and
(ii) are listed or admitted to trading on the London Stock Exchange, the Luxembourg Stock Exchange or such other stock exchange as is a Recognised Stock Exchange at that time as selected by the Issuer and approved by the Trustee;
"Rating Agency" means A.M. Best Europe Rating Services Limited, Fitch Ratings Limited, Moody's Investors Service Ltd. or S&P Global Ratings Europe Limited or any of their respective successors;
"Rating Agency Compliant Securities" means securities issued directly or indirectly by the Issuer that are:
"Rating Methodology Event" will be deemed to occur upon a change in methodology of the Rating Agency (or in the interpretation of such methodology) as a result of which the equity content assigned by the Rating Agency to the Notes is, in the reasonable opinion of the Issuer, materially reduced when compared with the equity content assigned by the Rating Agency to the Notes on or around the Issue Date;
"Recognised Stock Exchange" means a recognised stock exchange as defined in Section 1005 of the Income Tax Act 2007 as the same may be amended from time to time and any provision, statute or statutory instrument replacing the same from time to time;
"Regulatory Deficiency Interest Deferral Event" means any event (including, without limitation, (i) any event which causes any Solvency Capital Requirement or Minimum Capital Requirement to be breached and such breach is an event, or (ii) (where Insolvent Insurer Winding-up Condition is specified as applicable in the Final Terms or Pricing Supplement) where an Insolvent Insurer Winding-up has occurred and is continuing and the continuation of such Insolvent Insurer Winding-up is an event) which under the Relevant Rules requires the Issuer to defer payment of interest (or, if applicable, Arrears of Interest) in respect of the Notes (on the basis that the Notes qualify (or are intended to qualify) as Tier 3 Capital under the Relevant Rules);
"Regulatory Deficiency Redemption Deferral Event" means any event (including, without limitation, where an Insolvent Insurer Winding-up has occurred and is continuing and any event which causes any Solvency Capital Requirement or Minimum Capital Requirement to be breached and the continuation of such Insolvent Insurer Windingup is, or as the case may be, such breach is, an event) which under the Relevant Rules requires the Issuer to defer or suspend repayment or redemption of the Notes (on the basis that the Notes qualify (or are intended to qualify) as Tier 3 Capital under the Relevant Rules);
"Relevant Regulator" means the Bank of England acting as the UK Prudential Regulation Authority through its Prudential Regulation Committee or such successor or other authority having primary supervisory authority with respect to prudential matters in relation to the Issuer and/or the Group;
"Relevant Rules" means, at any time, any legislation, rules, guidelines or regulations (whether having the force of law or otherwise) then applied by the Relevant Regulator to the Issuer, the Group or any Subsidiary of the Issuer engaged in insurance business,relating, but not limited to, own funds, capital resources, capital requirements, financial adequacy requirements or other prudential matters (including, but not limited to, the characteristics, features or criteria of any of the foregoing) and without limitation to the foregoing, includes (to the extent then applied as aforesaid) Solvency II, Directive 98/78/EC of the European Union as amended and any legislation, rules, guidelines or regulations of the Relevant Regulator relating to such matters;
"Senior Creditors" means (a) creditors of the Issuer who are unsubordinated creditors of the Issuer including all policyholders of the Issuer and all beneficiaries under contracts of insurance written by the Issuer (for the avoidance of doubt, the claims of policyholders and such beneficiaries shall include all amounts to which policyholders or such beneficiaries are entitled under applicable legislation or rules relating to the winding-up of insurance companies to reflect any right to receive or expectation of receiving benefits which policyholders or such beneficiaries may have) and (b) creditors of the Issuer whose claims are, or are expressed to be, subordinated to the claims of other creditors of the Issuer (other than those (A) whose claims are in respect of instruments or obligations which constitute, or would but for any applicable limitation on the amount of any such capital constitute, (i) Tier 1 Capital, (ii) Tier 2 Capital, or (iii) Tier
3 Capital (in the case of any such tier, whether issued on, before or after Solvency II Implementation) or (B) whose claims otherwise rank, or are expressed to rank, pari passu with, or junior to, the claims of the Notehold ers);
"Solvency Capital Requirement" means the Solvency Capital Requirement or the consolidated group Solvency Capital Requirement referred to in, or any other capital requirement (other than the Minimum Capital Requirement) howsoever described in, the Relevant Rules;
"Solvency II" means the Solvency II Directive and any implementing measures adopted pursuant to the Solvency II Directive including, without limitation, the Level 2 Regulations (for the avoidance of doubt, whether implemented by way of a regulation, a directive or otherwise);
"Solvency II Directive" means Directive 2009/138/EC of the European Parliament and of the Council of the European Union of 25 November 2009 on the taking-up and pursuit of the business of insurance and reinsurance (Solvency II);
"Solvency II Implementation" means 1 January 2016;
"Special Redemption Price" has the meaning given to it in the relevant Final Terms or Pricing Supplement;
"Subsidiary" has the meaning given to it under Section 1159 of the Companies Act 2006 (as amended from time to time);
"subsidiary undertaking" has the meaning given to subsidiary undertaking under Section 1162 of the Companies Act 2006 (as amended from time to time);
"Tax Event" means an event of the type described in Condition 6(c)(i) or (ii);
"Tier 1 Capital" has the meaning given to it for the purposes of the Relevant Rules from time to time (including, without limitation, by virtue of the operation of any grandfathering provisions under any Relevant Rules);
"Tier 2 Capital" has the meaning given to it for the purposes of the Relevant Rules from time to time (including, without limitation, by virtue of the operation of any grandfathering provisions under any Relevant Rules);
"Tier 3 Capital" has the meaning given to it for the purposes of the Relevant Rules from time to time (including, without limitation, by virtue of the operation of any grandfathering provisions under any Relevant Rules); and
"United Kingdom" or "UK" means the United Kingdom of Great Britain and Northern Ireland.
The Trust Deed, the Notes, the Coupons and the Talons and any non -contractual obligations arising out of or in connection with the Trust Deed, the Notes, the Coupons and the Talons are governed by, and shall be construed in accordance with, English law.
The following is the text of the terms and conditions that, subject to completion and as supplemented in accordance with the provisions of Part A of the relevant Final Terms or, in the case of PR Exempt Notes, the relevant Pricing Supplement, shall be applicable to the Tier 2 Notes in definitive form (if any) issued in exchange for the Global Note(s) or Certificates representing each Series of Tier 2 Notes. The full text of these terms and conditions togeth er with the relevant provisions of Part A of the Final Terms or Pricing Supplement (as applicable) shall be endorsed on such Bearer Notes or on the Certificates relating to such Registered Notes. Accordingly, references in these terms and conditions to provisions specified hereon shall be to the provisions endorsed on the face of the relevant Note or set out in the relevant Final Terms or Pricing Supplement (as applicable). The relevant Pricing Supplement in relation to the PR Exempt Notes may specify other terms and conditions which shall, to the extent so specified or to the extent inconsistent with these Terms and Conditions, replace or modify these Terms and Conditions for the purposes of this Note. All capitalised terms that are not defined in these Conditions will have the meanings given to them in Part A of the relevant Final Terms or Pricing Supplement. Those definitions will be endorsed on the definitive Notes or Certificates, as the case may be. References in the Conditions to "Notes" are to the Tier 2 Notes of one Series only, not to all Notes that may be issued under the Programme.
The Notes are constituted by a trust deed dated 1 May 2020(as amended or supplemented as at the date of issue of the Notes (the "Issue Date")) (the "Trust Deed") between Aviva plc (the "Issuer") and The Law Debenture Trust Corporation p.l.c. (the "Trustee", which expression shall include all persons for the time being the trustee or trustees under the Trust Deed) as trustee for the Noteholders (as defined below). These terms and conditions include summaries of, and are subject to, the detailed provisions of the Trust Deed, which includes the form of the Bearer Notes, Certificates, Coupons and Talons referred to below. An Agency Agreement dated 22 April 2016 (as amended or supplemented as at the Issue Date, the "Agency Agreement") has been entered into in relation to the Notes between the Issuer, the Trustee, HSBC Bank plc as initial issuing and paying agent and the other agents named in it. The issuing and paying agent, the paying agents, the registrar, the transfer agents and the calculation agent(s) for the time being (if any) are referred to below respectively as the "Issuing and Paying Agent", the "Paying Agents" (which expression shall include the Issuing and Paying Agent), the "Registrar", the "Transfer Agents" (which expression shall include the Registrar) and the "Calculation Agent(s)". Copies of the Trust Deed and the Agency Agreement are available for inspection during usual business hours and upon reasonable notice at the principal office of the Trustee (presently at Fifth Floor, 100 Wood Street, London EC2V 7EX, United Kingdom) and at the specified offices of the Paying Agents and the Transfer Agents (the Trust Deed is also available at the website of the Issuer at https://www.aviva.com/investors/).
The Noteholders and the holders of the interest coupons (the "Coupons") relating to interest-bearing Notes in bearer form and, where applicable, in the case of such Notes, talons for further Coupons (the "Talons") (the "Couponholders") are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and are deemed to have notice of those provisions applicable to them of t he Agency Agreement.
As used in these Conditions, "Tranche" means Notes which are identical in all respects.
The Notes are issued in bearer form ("Bearer Notes") or in registered form ("Registered Notes") in each case in the Specified Denomination(s) shown hereon provided that in the case of any Notes which are to be admitted to trading on a regulated market within the European Economic Area (or the United Kingdom) or offered to the public in a Member State of the European Economic Area (or the United Kingdom) in circumstances which require the publication of a Prospectus under the Prospectus Regulation (Regulation (EU) 2017/1129, as amended or superseded), the minimum Specified Denomination shall be at least €100,000 (or its equivalent in any other currency as at the date of issue of the relevant Notes).
This Note is a Fixed Rate Note, a Fixed to Floating Rate Note, a Fixed Rate Reset Note or a Floating Rate Note (which shall include a SONIA Linked Interest Note, a Compounded Daily SOFR Linked Interest Note or a Weighted Average SOFR Linked Interest Note if this Note is specified as such in the Final Terms or Pricing Supplement) or a combination of the foregoing, depending upon the Interest Basis and Redemption Basis shown hereon.
Bearer Notes are serially numbered and are issued with Coupons (and, where appropriate, a Talon) attached.
Registered Notes are represented by registered certificates ("Certificates") and, save as provided in Condition 2(b), each Certificate shall represent the entire holding of Registered Notes by the same holder.
Title to the Bearer Notes and the Coupons and Talons shall pass by delivery. Title to the Registered Notes shall pass upon registration in the register that the Issuer shall procure to be kept by the Registrar in accordance with the provisions of the Agency Agreement (the "Register"). Except as ordered by a court of competent jurisdiction or as required by law, the holder (as defined below) of any Note, Coupon or Talon shall be deemed to be and may be treated as its absolute owner for all purposes whether or not it is overdue and regardless of any notice of ownership, trust or an interest in it, any writing on it (or on the Certificate representing it) or its theft or loss (or that of the related Certificate) and no person shall be liable for so treating the holder.
In these Conditions, "Noteholder" means the bearer of any Bearer Note or the person in whose name a Registered Note is registered (as the case may be), "holder" (in relation to a Note, Coupon or Talon) means the bearer of any Bearer Note, Coupon or Talon or the person in whose name a Registered Note is registered (as the case may be) and capitalised terms have the meanings given to them hereon, the absence of any such meaning indicating that such term is not applicable to the Notes.
One or more Registered Notes may be transferred upon the surrender (at the specified office of the Registrar or any Transfer Agent) of the Certificate representing such Registered Notes to be transferred, together with the form of transfer (as set out in Schedule 1 of the Trust Deed) endorsed on such Certificate (or another form of transfer substantially in the same form and containing the same representations and certifications (if any), unless otherwise agreed by the Issuer), duly completed and executed and any other evidence as the Registrar or Transfer Agent may reasonably require. In the case of a transfer of part only of a holding of Registered Notes represented by one Certificate, a new Certificate shall be issued to the transferee in respect of the part transferred and a further new Certificate in respect of the balance of the holding not transferred shall be issued t o the transferor. All transfers of Notes and entries on the Register will be made subject to the detailed regulations concerning transfers of Notes scheduled to the Agency Agreement. The regulations may be changed by the Issuer, with the prior written approval of the Registrar and the Trustee. A copy of the current regulations will be made available by the Registrar to any Noteholder upon request.
In the case of an exercise of an Issuer's or Noteholder's option in respect of a holding of Registered Notes represented by a single Certificate or a partial redemption of a holding of Registered Notes represented by a single Certificate, a new Certificate shall be issued to the holder to reflect the exercise of such option or in respect of the balance of the holding not redeemed. In the case of a partial exercise of an option resulting in Registered Notes of the same holding having different terms, separate Certificates shall be issued in respect of those Notes of that holding that have the same terms. New Certificates shall only be issued against surrender of the existing Certificates to the Registrar or any Transfer Agent. In the case of a transfer of Registered Notes to a person who is already a holder of Registered Notes, a new Certificate representing the enlarged holding shall only be issued against surrender of the Certificate representing the existing holding.
Each new Certificate to be issued pursuant to Condition 2(a) or (b) shall be available for delivery within three Business Days of receipt of the form of transfer and surrender of the Certificate for exchange. Delivery of the new Certificate(s) shall be made at the specified office of the Transfer Agent or of the Registrar (as the case may be) to whom delivery or surrender of such form of transfer, Exercise Notice or Certificate shall have been made or, at the option of the holder making such delivery or surrender as aforesaid and as specified in the relevant form of transfer, Exercise Notice or otherwise in writing, be mailed by uninsured post at the risk of the holder entitled to the new Certificate to such address as may be so specified, unless such holder requests otherwise and pays in advance to the Registrar or relevant Transfer Agent (as applicable) the costs of such other method of delivery and/or such insurance as it may specify. In this Condition 2(c), "Business Day" means a day, other than a Saturday or Sunday, on which banks are open for business in the place of the specified office of the relevant Transfer Agent or the Registrar (as the case may be).
Transfer of Notes and Certificates on registration, transfer, exercise of an option or partial redemption sh all be effected without charge by or on behalf of the Issuer, the Registrar or the Transfer Agents, but upon payment of any tax or other governmental charges by the person submitting such Notes or Certificates that may be imposed in relation to it (or the giving of such indemnity as the Registrar or the relevant Transfer Agent may require).
No Noteholder may require the transfer of a Registered Note to be registered (i) during the period of 15 days ending on the due date for redemption of that Note, (ii) during the period of 15 days prior to any date on which Notes may be called for redemption by the Issuer at its option pursuant to Condition 6(d), (iii) after any such Note has been called for redemption or (iv) during the period of seven days ending on (and including) any Record Date.
The Notes and the Coupons relating to them constitute direct, unsecured and subordinated obligations of the Issuer and rank pari passuand without any preference among themselves. In the event of the winding-up of the Issuer (except, in any such case, a solvent winding-up solely for the purposes of a reconstruction or amalgamation or the substitution in place of the Issuer of a successor in business of the Issuer, the terms of which reconstruction, amalgamation or substitution (i) have previously been approved in writing by the Trustee or by an Extraordinary Resolution (as defined in the Trust Deed) and (ii) do not provide that the Notes shall thereby become payable) or the appointment of an administrator of the Issuer where the administrator has given notice that it intends to declare and distribute a dividend, the payment obligations of the Issuer under or arising from the Notes and the Coupons relating to them and the Trust Deed, including any Arrears of Interest, shall be subordinated in the manner provided in the Trust Deed to the claims of all Senior Creditors (as defined in Condition 18) of the Issuer, but shall rank (a) at least pari passu with all other subordinated obligations of the Issuer which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital (other than Existing Undated Tier 2 Securities) and all obligations which rank, or are expressed to rank, pari passu therewith ("Pari Passu Securities"); and (b) shall rank in priority to the claims of holders of: (i) Existing Undated Tier 2 Securities; (ii) all obligations of the Issuer which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 1 Capital and all obligations which rank, or are expressed to rank, pari passu therewith; and (iii) all classes of share capital of the Issuer (together, the "Junior Securities").
Without prejudice to Condition 3(a) above, all payments under or arising from the Notes, the Coupons relating to them and the Trust Deed shall be conditional upon the Issuer being solvent at the time for payment by the Issuer, and no amount shall be payable under or arising from the Notes, the Coupons relating to them and the Trust Deed unless and until such time as the Issuer could make such payment and still be solvent immediately thereafter (the "SolvencyCondition"). For the purposes of this Condition 3(b), the Issuer will be solvent if (i) it is able to pay its debts owed to Senior Creditors and Pari Passu Creditors as they fall due and (ii) its Assets exceed its Liabilities. A certificate as to the solvency of the Issuer signed by two Directors or, if there is a winding-up or administration of the Issuer, the liquidator or, as the case may be, the administrator of the Issuer shall, in the absence of manifest error, be treated and accepted by the Issuer, the Trustee, the holders of the Notes and the Coupons relating to them and all other interested parties as correct and sufficient evidence thereof and the Trustee shall be entitled to rely on such certificate without liability to any person. In a winding -up of the Issuer or in an administration of the Issuer if the administrator has given notice of his intention to declare and distribute a dividend, the amount payable in respect of the Notes and the Coupons relating to them shall be an amount equal to the principal amount of such Notes, together with Arrears of Interest, if any, and any interest (other than Arrears of Interest) which has accrued up to, but excluding, the date of repayment and will be subordinated in the manner described in Condition 3(a) above.
Without prejudice to any other provision in these Conditions, amounts representing any payments of principal, premium or interest or any other amount, including any damages awarded for breach of any obligations in respect of which the conditions referred to in Condition 3(b) are not satisfied on the date upon which the same would otherwise be due and payable ("Solvency Claims") will be payable by the Issuer in a winding-up of the Issuer as provided in Condition 3(a). A Solvency Claim shall not bear interest.
Subject to applicable law, no holder of the Notes and the Coupons relating to them may exercise, claim or plead any right of set-off, compensation or retention in respect of any amount owed to it by the Issuer arising under or in connection with the Notes and the Coupons relating to them and each holder of the Notes and the Coupons relating to them shall, by virtue of being the holder of any Note or Coupon, be deemed to have waived all such rights of set-off, compensation or retention. Notwithstanding the preceding sentence, if any of the amounts owing to any holder of the Notes or Coupons relating to them by the Issuer is discharged by set-off, such holder shall, unless such payment is prohibited by applicable law, immediately pay an amount equal to the amount of such discharge to the Issuer or, in the event of its winding-up or administration, the liquidator or administrator, as appropriate, of the Issuer for payment to the Senior Creditors in respect of amounts owing to them by the Issuer, and, until such time as payment is made, shall hold an amount equal to such amount in trust for the Issuer, or the liquidator or administrator, as appropriate, of the Issuer (as the case may be), for payment to the Senior Creditors in respect of amounts owing to them by the Issuer and, accordingly, any such discharge shall be deemed no t to have taken place.
On a winding-up of the Issuer, there may be no surplus assets available to meet the claims of the Noteholders after the claims of the parties ranking senior to the Noteholders (as provided in Condition 3) have been satisfied.
Subject to Condition 3(b) and Condition 5, each Fixed Rate Note or Fixed to Floating Rate Note bears interest on its outstanding principal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest to (but excluding), in the case of Fixed to Floating Rate Notes, the Fixed Rate End Date specified hereon, such interest shall be payable in arrear on each Interest Payment Date specified hereon. The amount of interest payable shall be determined in accordance with Condition 4(e).
payable, in each case, in arrear on the Interest Payment Dates specified hereon. The amount of interest payable shall be determined in accordance with Condition 4(e).
(ii) Reset Rate Screen Page
If Mid-Swap Rate is specified as the Reset Rate for Fixed Rate Reset Notes in the applicable Final Terms or Pricing Supplement and the relevant Reset Rate Screen Page is not available or if the Mid-Swap Rate does not appear on the relevant Reset Rate Screen Page, (other than in the circumstances provided for in Condition 4(c)(iii)(F)) the Calculation Agent shall request each of the Reference Banks to provide the Calculation Agent with its offered quotation (expressed as a percentage rate per annum) for the relevant Reset Rate at approximately 11.00 a.m. in the principal financial centre of the Specified Currency on the relevant Reset Determination Date for such Reset Period. If two or more of the Reference Banks provide the Calculation Agent with offered quotations, the Reset Rate for the relevant Reset 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 applicable Reset Margin (if any), all as determined by the Calculation Agent. If on any Reset Determination Date only one or none of the Reference Banks provides the Calculation Agent with an offered quotation as provided in the foregoing provisions of this paragraph, the Reset Rate shall be determined as at the last preceding Reset Determination Date or, in the case of the first Reset Determination Date, the Reset Rate shall be determined using the Mid-Swap Rate last displayed on the relevant Reset Rate Screen Page prior to the relevant Reset Determination Date.
(i) Interest Payment Dates
Subject to Condition 3(b) and Condition 5, each Floating Rate Note and each Fixed to Floating Rate Note bears interest on its outstanding principal amount from, in the case of a Floating Rate Note, the Interest Commencement Date and, in the case of a Fixed to Floating Rate Note, the Fixed Rate End Date specified hereon at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest shall be payable in arrear on each Interest Payment Date in the case of a Floating Rate Note and on each Interest Payment Date commencing after the Fixed Rate End Date specified hereon in the case of a Fixed to Floating Rate Note. The amount of interest payable shall be determined in accordance with Condition 4(e). Such Interest Payment Date(s) is/are either shown hereon as Specified Interest Payment Dates or, if no Specified Interest Payment Date(s) is/are shown hereon, "Interest Payment Date" shall mean each date which falls the number of months or other period shown hereon as the Specified Period after the preceding Interest Payment Date or, in the case of the first such Interest Payment Date, after the Interest Commencement Date, in the case of a Floating Rate Note, or after the Fixed Rate End Date, in the case of a Fixed to Floating Rate Note.
(ii) Business Day Convention
If any date referred to in these Conditions that is specified to be subject to adjustment in accordance with a Business Day Convention would otherwise fall on a day that is not a Business Day, then, if the Business Day Convention specified hereon is (A) the Floating Rate Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event (x) such date shall be brought forward to the immediately preceding Business Day and (y) each such subsequent date shall be the last Business Day of the month in which such date would have fallen had it not been subject to adjustment, (B) the Following Business Day Convention, such date shall be postponed to the next day that is a Business Day, (C) the Modified Following Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event such date shall be brought forward to the immediately preceding Business Day or (D) the Preceding Business Day Convention, such date shall be brought forward to the immediately preceding Business Day.
(iii) Rate of Interest for Floating Rate Notes and Fixed to Floating Rate Notes
The Rate of Interest in respect of Floating Rate Notes and, from and including the Fixed Rate End Date, Fixed to Floating Rate Notes for each Interest Accrual Period shall be determined in the manner specified hereon and the provisions below relating to either ISDA Determination or Screen Rate Determination shall apply, depending upon which is specified hereon.
(A) ISDA Determination for Floating Rate Notes
Where ISDA Determination is specified hereon as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each relevant Interest Accrual Period shall be determined by the Calculation Agent as a rate equal to the relevant ISDA Rate. For the purposes of this sub paragraph (A), "ISDA Rate" for an Interest Accrual Period means a rate equal to the Floating Rate that would be determined by the Calculation Agent under a Swap Transaction under the terms of an agreement incorporating the ISDA Definitions and under which:
(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 either 11.00 a.m. (London time in the case of LIBOR or Brussels time in the case of EURIBOR) or 10.00 a.m. Toronto time, in the case of CDOR, on the Interest Determination Date in question as determined by the Calculation 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 Calculation Agent for the purpose of determining the arithmetic mean of such offered quotations.
(y) if the Relevant Screen Page is not available or if, sub-paragraph (x)(1) applies and no such offered quotation appears on the Relevant Screen Page or if sub-paragraph (x)(2) above applies and fewer than three such offered quotations appear on the Relevant Screen Page in each case as at the time specified above, subject as provided below, the Calculation Agent shall request, if the Reference Rate is LIBOR, the principal London office of each of the Reference Banks or, if the Reference Rate is EURIBOR, the principal Eurozone office of each of the Reference Banks or, if the Reference Rate is CDOR, the principal Toronto office of each of the Reference Banks, to provide the Calculation Agent with its offered quotation (expressed as a percentage rate per annum) for the Reference Rate if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time), or, if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time), or, if the Reference Rate is CDOR, at approximately 10.00 a.m. (Toronto time) on the Interest Determination Date in question. If two or more of the Reference Banks provide the Calculation Agent with such
offered quotations, the Rate of Interest for such Interest Accrual Period shall be the arithmetic mean of such offered quotations as determined by the Calculation Agent; and
Where the Reference Rate is specified as being SONIA, the Rate of Interest for each Interest Accrual Period will, subject to the provisions of Condition 4(c)(iii)(F), and as provided below, be Compounded Daily SONIA plus or minus (as indicated in the Final Terms or Pricing Supplement) the Margin (if any), all as determined by the Calculation Agent (or such other party responsible for the calculation of the Rate of Interest, as specified in the Final Terms or Pricing Supplement) on the Interest Determination Date for such Interest Accrual Period.
For the purposes of this Condition 4(c)(iii)(C):
"Compounded Daily SONIA" means with respect to an Interest Accrual Period, the rate of return of a daily compound interest investment during the Observation Period corresponding to such Interest Accrual Period (with the daily Sterling overnight reference rate as reference rate for the calculation of interest) and will be calculated by the Calculation Agent (or such other party responsible for the calculation of the Rate of Interest, as specified in the Final Terms or Pricing Supplement) on the relevant Interest Determination Date, as follows, and the resulting percentage will be rounded, if necessary, to the fifth decimal place, with 0.000005 being rounded upwards:
$$
\left[\prod_{i=1}^{d_o} \left(1 + \frac{SONIA_{i-pLBD} \times n_i}{365}\right) - 1\right] \times \frac{365}{d}
$$
Where:
"d" means the number of calendar days in the relevant Interest Accrual Period;
"d0" means the number of London Business Days in the relevant Interest Accrual Period;
"i" means a series of whole numbers from one to d0, each representing the relevant London Business Days in chronological order from, and including, the first London Business Day in the relevant Interest Accrual Period;
"London Business Day" or "LBD" means a day (other than a Saturday or Sunday) on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in London;
"ni" means, in relation to any London Business Day "i", the number of calendar days from and including such London Business Day "i" up to, but excluding, the following London Business Day;
"Observation Period" means, in respect of the relevant Interest Accrual Period, the period from, and including, the date falling "p" London Business Days prior to the first day of the relevant Interest Accrual Period (and the first Interest Accrual Period shall begin on and include the Interest Commencement Date) and ending on, but excluding, the date falling "p" London Business Days prior to the Interest Payment Date for such Interest Accrual Period (or the date falling "p" London Business Days prior to such earlier date, if any, on which the Notes become due and payable);
"p" means, for any Interest Accrual Period, the number of London Business Days included in the Observation Look-back Period, as specified in the relevant Final Terms or Pricing Supplement(or, if no such number is specified, five London Business Days);
the "SONIA reference rate", in respect of any London Business Day, is a reference rate equal to the daily Sterling Overnight Index Average ("SONIA") rate for such London Business Day as provided by the administrator of SONIA to authorised distributors and as then published on the Relevant Screen Page or, if the Relevant Screen Page is unavailable, as otherwise published by such authorised distributors (on the London Business Day immediately following such London Business Day); and
"SONIAi-pLBD" means, in respect of any London Business Day "i" falling in the relevant Interest Accrual Period, the SONIA reference rate for the London Business Day falling "p" London Business Days prior to the relevant London Business Day "i".
Subject to the provisions of Condition 4(c)(iii)(F), if, in respect of any London Business Day in the relevant Observation Period, the Calculation Agent (or such other party responsible for the calculation of the Rate of Interest, as specified in the Final Terms or Pricing Supplement) determines that the SONIA reference rate is not available on the Relevant Screen Page or has not otherwise been published by the relevant authorised distributors, such SONIA reference rate shall be:
Subject to the provisions of Condition 4(c)(iii)(F), if the Rate of Interest cannot be determined in accordance with paragraphs (x) and (y) by the Calculation Agent (or such other party responsible for the calculation of the Rate of Interest, as specified in the Final Terms or Pricing Supplement), the Rate of Interest shall be:
If the Notes become due and payable in accordance with Condition 10, the final Interest Determination Date shall, notwithstanding any Interest Determination Date specified in the Final Terms or Pricing Supplement, be deemed to be the date on which such Notes become due and payable and the Rate of Interest on the Notes shall, for so long as any of the Notes remain outstanding, be determined on such date and as if (solely for the purpose of such interest determination) the relevant Interest Accrual Period had been shortened accordingly.
"Compounded Daily SOFR" means, in relation to an Interest Accrual Period, the rate of return of a daily compound interest investment (with SOFR as the reference rate for the calculation of interest) and will be calculated by the Calculation Agent (or such other party responsible for the calculation of the Rate of Interest, as specified in the Final Terms or Pricing Supplement) on the relevant Interest Determination Date as follows, and the resulting percentage will be rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards:
$$
\left[\prod_{i=1}^{d_0}\left(1+\frac{SOFR_i\times n_i}{360}\right)-1\right]\times\frac{360}{d}
$$
Where:
administrator of the daily Overnight Bank Funding Rate) ceases to publish the daily Overnight Bank Funding Rate or the date as of which the daily Overnight Bank Funding Rate may no longer be used;
"OBFR Index Cessation Event" means the occurrence of one or more of the following events:
Interest Accrual Period from (and including) the SOFR Index Cessation Effective Date, and "i" shall be construed accordingly);
"SOFR Index Cessation Event" means the occurrence of one or more of the following events:
(3) a public statement by a U.S. regulator or other U.S. official sector entity prohibiting the use of the daily Secured Overnight Financing Rate that applies to, but need not be limited to, all swap transactions, including existing swap transactions;
"SOFR Reset Date" means, in relation to any Interest Accrual Period, each U.S. Government Securities Business Day during such Interest Accrual Period, other than any U.S. Government Securities Business Day in the Cut-Off Period;
"SOFRi" means, in relation to any Interest Accrual Period and any U.S. Government Securities Business Day "i", SOFR in respect of that day "i"; and
"U.S. Government Securities Business Day" means any day except for a Saturday, Sunday or a day on which SIFMA recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
"Weighted Average SOFR" means, in relation to any Interest Accrual Period, the arithmetic mean of SOFRi in effect for each U.S. Government Securities Business Day during such Interest Accrual Period (each such U.S. Government Securities Business Day, "i"), calculated by multiplying the relevant SOFRifor any U.S. Government Securities Business Day "i" by the number of days such SOFRi is in effect (being the number of calendar days from (and including) such U.S. Government Securities Business Day "i" up to (but excluding) the following U.S. Government Securities Business Day), determining the sum of such products and dividing such sum by the number of calendar days in the relevant Interest Accrual Period.
Where:
administrator that will continue to publish or provide a daily Overnight Bank Funding Rate;
"SIFMA" means the Securities Industry and Financial Markets Association (or any successor thereto);
"SOFR" means:
(a) subject to (b) below, "SOFR" in relation to each SOFR Reset Date falling on or after the SOFR Index Cessation Effective Date shall be equal to the rate determined in accordance with (1) or (2) above (as applicable) but as if:
(iv) references to "SOFR Index Cessation Effective Date" were references to "OBFR Index Cessation Effective Date"; and
"SOFR Index Cessation Event" means the occurrence of one or more of the following events:
"SOFRi" means, in relation to any Interest Accrual Period and any U.S. Government Securities Business Day "i", SOFR in respect of that day "i"; and
"U.S. Government Securities Business Day" means any day except for a Saturday, Sunday or a day on which SIFMA recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
(F) Benchmark Discontinuation
If:
then the following provisions shall apply to the Floating Rate Notes, Fixed Rate Reset Notes and Fixed to Floating Rate Notes after the Fixed Rate End Date (as applicable):
determining the Rate of Interest (or the relevant component part thereof) for all future payments of interest on the Notes (subject to the subsequent operation of this Condition 4(c)(iii)(F)).
public statements, opinions and publications of industry bodies and organisations) in relation to such Successor Reference Rate or Alternative Reference Rate (as applicable), including, but not limited to (A) the relevant Additional Business Centre(s), Business Day, Business Day Convention, Day Count Fraction, Interest Determination Date, Reference Banks, Additional Financial Centre(s), and/or Relevant Screen Page applicable to the Notes and (B) the method for determining the fallback to the Rate of Interest in relation to the Notes if such Successor Reference Rate or Alternative Reference Rate (as applicable) is not available; and
(2) any other changes which the relevant Independent Adviser or the Issuer (as applicable) determines are reasonably necessary to ensure the proper operation and comparability to the Original Reference Rate of such Successor Reference Rate or Alternative Reference Rate (as applicable),
Prior to any such waivers and/or consequential amendments taking effect, the Issuer shall provide a certificate signed by two Directors or other Authorised Signatories (as defined in the Trust Deed) of the Issuer to the Trustee and the Issuing and Paying Agent (i) confirming that a Benchmark Event has occurred and (ii) that such waivers and/or Benchmark Amendments are required to give effect to any application of this Condition 4(c)(iii)(F) and the Trustee and the Issuing and Paying Agent shall be entitled to rely on such certificate without further enquiry or liability to any person. For the avoidance of doubt, the Trustee shall not be liable to the Noteholders or any other person for so acting or relying, irrespective of whether any such modification is or may be materially prejudicial to the interests of any such person. Such changes shall apply to all future payments of interest on the Notes (subject to the subsequent operation of this Condition 4(c)(iii)(F)).
The Trustee shall not be obliged to agree to any modification if in the sole opinion of the Trustee doing so would impose more onerous obligations upon it or expose it to any additional duties, responsibilities or liabilities or reduce rights and/or the protective provisions afforded to the Trustee in these Conditions or the Trust Deed.
No consent of the Noteholders shall be required in connection with effecting the relevant Successor Reference Rate or Alternative Reference Rate as described in this Condition 4(c)(iii)(F) or such other relevant adjustments pursuant to this Condition 4(c)(iii)(F), or any Adjustment Spread, including for the execution of, or amendment to, any documents (including, inter alia, by the execution of a deed supplemental to or amending the Trust Deed) or the taking of other steps by the Issuer or any of the parties to the Trust Deed and/or the Agency Agreement (if required).
Notwithstanding any other provision of this Condition 4(c)(iii)(F) no Successor Reference Rate or Alternative Reference Rate will be adopted, nor will the applicable Adjustment Spread be applied, nor will any Benchmark Amendments be made if and to the extent that, in the sole determination of the Issuer, the same could reasonably be expected to prejudice the qualification of the Notes as Tier 2 Capital of the Issuer or of the Group, eligible liabilities or loss absorbing capacity instruments for the purposes of the Relevant Rules.
Notwithstanding any other provision of this Condition 4(c)(iii)(F), no Successor Rate or Alternative Rate will be adopted, nor will the applicable Adjustment Spread be applied, nor will any Benchmark Amendments be made, if and to the extent that, in the determination of the Issuer, the same could reasonably be expected to cause a Capital Disqualification Event or a Rating Methodology Event to occur.
case of yen, which shall be rounded down to the nearest yen. For these purposes "unit" means the lowest amount of such currency that is available as legal tender in the country[ies] of such currency.
The amount of interest payable per Calculation Amount in respect of any Note for any Interest Accrual Period shall be equal to the product of the Rate of Interest, the Calculation Amount specified hereon, and the Day Count Fraction for such Interest Accrual Period, unless an Interest Amount (or a formula for its calculation) is applicable to such Interest Accrual Period, in which case the amount of interest payable per Calculation Amount in respect of such Note for such Interest Accrual Period shall equal such Interest Amount (or be calculated in accordance with such formula). Where any Interest Period comprises two or more Interest Accrual Periods, the amount of interest payable per Calculation Amount in respect of such Interest Period shall be the sum of the Interest Amounts payable in respect of each of those Interest Accrual Periods. In respect of any other period for which interest is required to be calculated, the provisions above shall apply save that the Day Count Fraction shall be for the period for which interest is required to be calculated. Where the Specified Denomination comprises more than one Calculation Amount, the amount of interest payable in respect of such Note shall be the aggregate of the amounts (determined in the manner provided above) for each Calculation Amount comprising the Specified Denomination specified hereon.
The Calculation Agent shall, as soon as practicable on each Interest Determination Date or Reset Determination Date (as applicable), or such other time on such date as the Calculation Agent may be required to calculate any rate or amount, obtain any quotation or make any determination or calculation, determine such rate and calculate the Interest Amounts for the relevant Interest Accrual Period, calculate the Final Redemption Amount, Optional Redemption Amount or Special Redemption Price (as may be provided for hereon), obtain such quotation or make such determination or calculation, as the case may be, and cause the Rate of Interest and the Interest Amounts for each Interest Accrual Period and the relevant Interest Payment Date and, if required to be calculated, the Final Redemption Amount, Optional Redemption Amount or Special Redemption Price, to be notified to the Trustee, the Issuer, each of the Paying Agents, the Noteholders, any other Calculation Agent appointed in respect of the Notes that is to make a further calculation upon receipt of such information and, if th e Notes are listed on a stock exchange and the rules of such exchange or other relevant authority so require, such exchange or other relevant authority as soon as possible after their determination but in any event no later than (i) the commencement of the relevant Interest Period, if determined prior to such time, in the case of notification to such exchange of a Rate of Interest and Interest Amount, or (ii) in all other cases, the fourth Business Day after such determination. Where any Interest Payment Date or Interest Period Date is subject to adjustment pursuant to Condition 4(c)(ii), the Interest Amounts and the Interest Payment Date so published may subsequently be amended (or appropriate alternative arrangements made with the consent of the Trustee by way of adjustment) without notice in the event of an extension or shortening of the Interest Period. If the Notes become due and payable under Condition 10, the accrued interest and the Rate of Interest payable in respect of the Notes shall nevertheless continue to be calculated as previously in accordance with this Condition but no publication of the Rate of Interest or the Interest Amount so calculated need be made unless the Trustee otherwise requires. The determination of any rate or amount, the obtaining of each quotation and the making of each determination or calculation by the Calculation Agent(s) shall (in the absence of manifest error) be final and binding upon all parties.
If the Calculation Agent does not at any time for any reason determine or calculate the Rate of Interest for an Interest Accrual Period or any Interest Amount, Final Redemption Amount, Optional Redemption Amount or Special Redemption Price, the Trustee shall do so (or shall appoint an agent on its behalf to do so) and such determination or calculation shall be deemed to have been made by the Calculation Agent. In doing so, the Trustee shall apply the foregoing provisions of this Condition, with any necessary consequential amendments, to the extent that, in its opinion, it can do so, and, in all other respects, it shall do so in such manner as it shall deem fair and reasonable in all the circumstances.
In these Conditions, unless the context otherwise requires, the following defined terms shall have the meanings set out below:
"Adjustment Spread" means either a spread (which may be positive, negative or zero) or formula or methodology for calculating a spread in either case, which the Independent Adviser, or the Issuer (as applicable) determines, is required to be applied to a Successor Reference Rate or an Alternative Reference Rate (as applicable) in order to reduce or eliminate, to the extent reasonably practicable in the circumstances, any economic prejudice or benefit (as applicable) to Noteholders andCouponholders as a result of the replacement of the Original Reference Rate with such Successor Reference Rate or Alternative Reference Rate (as applicable) and is the spread, formula or methodology which:
"Alternative Reference Rate" means an alternative benchmark or screen rate which the relevant Independent Adviser or the Issuer (as applicable) determines in accordance with Condition 4(c)(iii)(F) is customarily applied in the international debt capital markets for the purposes of determining floating rates of interest in respect of notes denominated in the Specified Currency and of a comparable duration to the relevant Interest Period, and which, in the circumstances contemplated in limb (vi) of the definition of Benchmark Event shall be deemed to be the New Reference Rate.
"Anniversary Date" means the date specified hereon.
"Benchmark Gilt" means, in respect of a Reset Period, the Benchmark Gilt specified hereon or, if no Benchmark Gilt is specified hereon or if the relevant Benchmark Gilt is no longer outstanding at the relevant time, such United Kingdom government security having a maturity date on or about the last day of such Res et Period as the Issuer, with the advice of the Reference Banks and after consultation with the Calculation Agent, may determine to be appropriate.
"Benchmark Gilt Rate" means, in respect of a Reset Period, the gross redemption yield (as calculated by the Calculation Agent in accordance with generally accepted market practice at such time) on a semi-annual compounding basis (converted to an annualised yield and rounded up (if necessary) to four decimal places) of the Benchmark Gilt in respect of that Reset Period, with the price of the Benchmark Gilt for this purpose being the arithmetic average (rounded up (if necessary) to the nearest 0.001 per cent. (0.0005 per cent. being rounded upwards)) of the bid and offered prices of such Benchmark Gilt quoted by the Reference Banks at 3.00 p.m. (London time) on the relevant Reset Determination Date on a dealing basis for settlement on the next following dealing day in London. If only two or three quotations are provided, the Benchmark Gilt Rate will be the rounded arithmetic mean of the quotations provided. If only one quotation is provided, the Benchmark Gilt Rate will be the rounded quotation provided. If no quotations are
provided, the Benchmark Gilt Rate will be determined by the Calculation Agent in its sole dis cretion following consultation with the Issuer.
"Bloomberg Screen" means the relevant page on the Bloomberg L.P. service or any successor service or such other page as may replace that page on that service for the purpose of displaying "Treasury constant maturities(Nominal)" as reported in the H.15.
"Business Day" means:
"CMT Rate" means, in relation to a Reset Period and the Reset Rate Determination Date in relation to such Reset Period, the rate determined by the Calculation Agent and expressed as a percentage equal to:
"Day Count Fraction" means, in respect of the calculation of an amount of interest on any Note for any period of time (from and including the first day of such period to but excluding the last) (whether or not constituting an Interest Period or Interest Accrual Period, the "Calculation Period"):
Day Count Fraction = [360 x (Y2 - Y1)] + [30 x (M2 - M1)] + (D2 - D1)
360
where:
"Y1" is the year, expressed as a number, in which the first day of the Calculation Period falls;
"Y2" is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
"M2" is the calendar month, expressed as number, in which the day immediately following the last day included in the Calculation Period falls;
"D1" is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D1 will be 30; and
"D2" is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30;
(vi) if "30E/360" or "Eurobond Basis" is specified hereon, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
Day Count Fraction = [360 x (Y2 - Y1)] + [30 x (M2 - M1)] + (D2 - D1)
360
where:
"Y1" is the year, expressed as a number, in which the first day of the Calculation Period falls;
"Y2" is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
"M2" is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"D1" is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D1 will be 30; and
"D2" is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31, in which case D2 will be 30;
(vii) if "30E/360 (ISDA)" is specified hereon, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
Day Count Fraction =
$$
[360 x (Y_2 - Y_1)] + [30 x (M_2 - M_1)] + (D_2 - D_1)
$$
$$
360
$$
where:
"Y1" is the year, expressed as a number, in which the first day of the Calculation Period falls;
"Y2" is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
"M2" is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"D1" is the first calendar day, expressed as a number, of the Calculation Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case D1 will be 30; and
"D2" is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would b e 31, in which case D2 will be 30; and
(x) the number of days in such Calculation Period falling in the Determination Period in which it begins divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year; and
(y) the number of days in such Calculation Period falling in the next Determination Period divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year,
where:
"Determination Date" means the date specified as such hereon or, if none is so specified, the Interest Payment Date; and
"Determination Period" means the period from and including a Determination Date in any year to but excluding the next Determination Date.
"Eurozone" means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty on the Functioning of the European Union, as amended.
"First Reset Note Reset Date" means the date specified hereon.
"First Reset Period" means the period from (and including) the First Reset Note Reset Date until (but excluding) the first Anniversary Date.
"First Reset Rate of Interest" means the rate of interest being determined by the Calculation Agent on the relevant Reset Determination Date as the sum of the relevant Reset Rate plus the Reset Margin.
"Fixed Rate End Date" means the date specified as such hereon.
"FSB" means the Financial Stability Board.
"H.15" means the weekly statistical release designated as H.15, or any successor publication, published by the Board of Governors of the U.S. Federal Reserve System at http://www.federalreserve.gov/releases/H15/ or any successor site or publication.
"Independent Adviser" means an independent financial institution of international repute or other independent financial adviser experienced in the international debt capital markets.
"Initial Rate of Interest" means the initial rate of interest per annum specified hereon.
"Interest Accrual Period" means the period beginning on (and including) the Interest Commencement Date, in respect of the Floating Rate Notes, and the Fixed Rate End Date, in respect of the Fixed to Floating Rate Notes, and ending on (but excluding) the first Interest Period Date and each successive period beginning on (and including) an Interest Period Date and ending on (but excluding) the next succeeding Interest Period Date.
"Interest Amount" means, in respect of an Interest Accrual Period, the amount of interest payable per Calculation Amount for that Interest Accrual Period and which, in the case of Fixed Rate Notes, Fixed Rate Reset Notes, and, prior to the Fixed Rate End Date, Fixed to Floating Rate Notes, and unless otherwise specified hereon, shall mean the Fixed Coupon Amount or Broken Amount specified hereon as being payable on the Interest Payment Date ending the Interest Period of which such Interest Accrual Period forms part; and, in respect of any other period, the amount of interest payable per Calculation Amount for that period.
"Interest Commencement Date" means the Issue Date or such other date as may be specified hereon.
"Interest Determination Date" means, with respect to a Rate of Interest and Interest Accrual Period, the date specified as such hereon or, if none is so specified: (i) the first day of such Interest Accrual Period if the Specified Currency is sterling or (ii) the day falling two Business Days in London prior to the first day of such Interest Accrual Period if the Specified Currency is neither sterling nor euro or (iii) the day falling two TARGET Business Days prior to the first day of such Interest Accrual Period if the Specified Currency is euro.
"Interest Period" means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the first Interest Payment Date and each successive period beginning on (and including) an Interest Payment Date and ending on (but excluding) the next succeeding Interest Payment Date.
"Interest Period Date" means each Interest Payment Date unless otherwise specified hereon.
"ISDA Definitions" means the 2006 ISDA Definitions as amended or supplemented, as published by the International Swaps and Derivatives Association, Inc. unless otherwise specified hereon.
"Mid-Swap Benchmark Rate" means EURIBOR if the Specified Currency is euro, CDOR if the Specified Currency is Canadian dollars or LIBOR for the Specified Currency if the Specified Currency is not one of the currencies listed in this definition.
"Mid-Swap Maturity" has the meaning specified hereon.
"Mid-Swap Rate" means for any Reset Period the arithmetic mean of the bid and offered rates for the fixed leg payable with a frequency equivalent to the frequency with which scheduled interest payments are payable on the Notes during the relevant Reset Period (calculated on the day count basis customary for fixed rate payments in the Specified Currency as determined by the Calculation Agent) of a fixed-for-floating interest rate swap transaction in the Specified Currency which transaction (i) has a term equal to the relevant Reset Period and commencing on the relevant Reset Date, (ii) is in an amount that is representative for a single transaction in the relevant market at the relevant time with an acknowledged dealer of good credit in the swap market, and (iii) has a floating leg based on the Mid -Swap Benchmark Rate for the Mid-Swap Maturity as specified hereon (calculated on the day count basis customary for floating rate payments in the Specified Currency as determined by the Calculation Agent).
"Original Reference Rate" means the originally specified reference rate used to determine the Rate of Interest (or any component part thereof) (being LIBOR or EURIBOR or CDOR), in each case for the relevant period, as specified hereon.
"Rate of Interest" means the rate of interest payable from time to time in respect of this Note and that is either specified or calculated in accordance with the provisions hereon.
"Reference Banks" means, in the case of a determination of LIBOR, the principal London office of four major banks in the London inter-bank market, in the case of a determination of EURIBOR, the principal Eurozone office of four major banks in the Eurozone inter-bank market, in the case of a determination of CDOR, four major Canadian Schedule I chartered banks, in each case selected by the Calculation Agent or as specified hereon and in the case of a Benchmark Gilt Rate, four brokers of gilts and/or gilt-edged market makers selected by the Calculation Agent in its discretion after consultation with the Issuer.
"Reference Bond" means, for any Reset Period, the Reference Bond specified hereon or, if no Reference Bond is specified hereon or if the relevant Reference Bond is no longer outstanding at the relevant time, such government security or securities issued by the government of the state responsible for issuing the Specified Currency (which, if the Specified Currency is euro, shall be Germany) selected by the Issuer after consultation with the Calculation Agent as having an actual or interpolated maturity date comparable with the last day of the relevant Reset Period and that would be utilised, at the time of selection and in accordance with customary financial practice, in pricing new issuances of corporate debt securities denominated in the Specified Currency and of a comparable maturity to the relevan t Reset Period.
"Reference Bond Dealer" means each of four banks (selected by the Issuer after consultation with the Calculation Agent), or their affiliates, which are primary government securities dealers or market makers in pricing corporate bond issuances denominated in the Specified Currency.
"Reference Bond Dealer Quotations" means, with respect to each Reference Bond Dealer and the relevant Reset Determination Date, the arithmetic mean, as determined by the Calculation Agent, of the bid and offered prices for the Reference Bond (expressed in each case as a percentage of its nominal amount) as at approximately 11.00 a.m. in the principal financial centre of the Specified Currency on the relevant Reset Determination Date and quoted in writing to the Calculation Agent by such Reference Bond Dealer.
"Reference Bond Price" means, with respect to a Reset Determination Date, (a) the arithmetic mean of the Reference Bond Dealer Quotations for that Reset Determination Date, after excluding the highest and lowest such Reference Bond Dealer Quotations, or (b) if the Calculation Agent obtains fewer than four such Reference Bond Dealer Quotations, the arithmetic mean of all such quotations or (c) if the Calculation Agent obtains only one Reference Bond Dealer Quotation, the Reference Bond Dealer Quotation obtained or (d) if the Calculation Agent obtains no Reference Bond Dealer Quotations, the Subsequent Reset Rate of Interest shall be that which was determined on the last preceding Reset Determination Date or, in the case of the first Reset Determination Date, the First Reset Rate of Interest shall be the Initial Rate of Interest, in each case, as determined by the Calculation Agent.
"Reference Bond Rate" means, in respect of a Reset Period, the annual yield to maturity or interpolated yield to maturity (on the relevant day count basis) of the Reference Bond, assuming a price for such Reference Bond (expressed as a percentage of its nominal amount) equal to the Reference Bond Price.
"Relevant Nominating Body" means, in respect of any Original Reference Rate:
"Relevant Screen Page" means such page, section, caption, column or other part of a particular information service as may be specified hereon.
"Reset Determination Date" means, in respect of the First Reset Period, the second Business Day prior to the First Reset Note Reset Date and, in respect of each Reset Period thereafter, the second Business Day prior to the first day of each such Reset Period.
"Reset Margin" means the margin specified as such hereon. In setting the Reset Margin the Issuer shall have consideration to the limitations set out in any Relevant Rules.
"Reset Note Reset Date" means every date which falls on each Anniversary Date as may be specified hereon.
"Reset Period" means the First Reset Period or a Subsequent Reset Period.
"Reset Rate Determination Date" means, in respect of each Reset Period, the day falling five U.S. Government Securities Business Days prior to the relevant Reset Date.
"Reset Rate Screen Page" has the meaning specified hereon.
"Reset Reference Dealer Rate" means, on any Reset Rate Determination Date, the rate calculated by the Calculation Agent as being a yield-to-maturity based on the arithmetic mean of the secondary market bid prices for Reset U.S. Treasury Securities at approximately 4:30 p.m. (New York City time) on s uch Reset Rate Determination Date, of leading primary U.S. government securities dealers in New York City (each, a "Reference Dealer"). The Calculation Agent will select five Reference Dealers to provide such bid prices and will eliminate the highest quota tion (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest); provided, however, that, if fewer than five but more than two such bid prices are provided, then neither the highest nor the lowest of those quotations will be eliminated prior to calculating the arithmetic mean of such bid prices.
"Reset U.S. Treasury Securities" means, on any Reset Rate Determination Date, U.S. Treasury Securities with an U.S. Treasury Original Maturity as specified hereon, a remaining term to maturity of no more than one (1) year shorter than U.S. Treasury Original Maturity and in a principal amount equal to an amount that is representative for a single transaction in such U.S. Treasury Securities in the New York City market. If two (2) U.S. Treasury Securities have remaining terms to maturity equally close to U.S. Treasury Original Maturity, the U.S. Treasury Security with the shorter remaining term to maturity will be used.
"Specified Currency" means the currency specified as such hereon or, if none is specified, the currency in which the Notes are denominated.
"Subsequent Reset Period" means each successive period other than the First Reset Period from (and including) a Reset Note Reset Date to (but excluding) the next succeeding Reset Note Reset Date.
"Subsequent Reset Rate of Interest" means, in respect of any Subsequent Reset Period, the rate of interest being determined by the Calculation Agent on the relevant Reset Determination Date as the sum of the re levant Reset Rate plus the Reset Margin.
"Successor Reference Rate" means the rate which has been formally published, endorsed, approved, recommended or recognised as a successor or replacement to the relevant Original Reference Rate by any Relevant Nomina ting Body.
"TARGET System" means the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET2) System or any successor thereto.
"U.S. Government Securities Business Days" means any day except for a Saturday, Sunday or a day on which the Securities Industry and Financial Markets Association or its successor recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities.
"U.S. Treasury Securities" means securities that are direct obligations of the United States Treasury, issued other than on a discount rate basis.
The Issuer shall procure that there shall at all times be one or more Calculation Agent(s) if provision is made for them hereon and for so long as any Note is outstanding (as defined in the Trust Deed). Where more than one Calculation Agent is appointed in respect of the Notes, references in these Conditions to the Calculation Agent shall be construed as each Calculation Agent performing its respective duties under the Conditions. If the Calculation Agent is unable or unwilling to act as such or if the Calculation Agent fails duly to establish the Rate of Interest for an Interest Period or Interest Accrual Period or to calculate any Interest Amount, Final Redemption Amount, Optional Redemption Amount or Special Redemption Price, as the case may be, or to comply with any other requirement, the Issuer shall (with the prior approval of the Trustee) appoint a leading bank or investment banking firm engaged in the inter-bank market (or, if appropriate, money, swap or overthe-counter index options market) that is most closely connected with the calculation or determination to be made by the Calculation Agent (acting through its principal London office or any other office actively involved in such market) to act as such in its place. The Calculation Agent may not resign its duties without a successor having been appointed as aforesaid.
If Optional Interest Payment Date is specified hereon, the Issuer may elect in respect of any Optional Interest Payment Date by notice to the Noteholders, the Paying Agent and the Trustee pursuant to Condition 5(d) below, to defer payment of all (but not some only) of the interest accrued to that date and the Issuer shall not have any obligation to make such payment on that date.
Notwithstanding any other provision in these Conditions or the Trust Deed, the deferral of any payment of interest on an Optional Interest Payment Date in accordance with this Condition 5(a) or in accordance with Condition 3(b) will not constitute a default by the Issuer and will not give the Noteholders or the Trustee any right to accelerate the Notes.
Payment of interest on the Notes will be mandatorily deferred on each Mandatory Interest Deferral Date. The Issuer shall notify the Noteholders, the Paying Agent and the Trustee of any Mandatory Interest Deferral Date in accordance with Condition 5(d).
A certificate signed by two Directors or other Authorised Signatories (as defined in the Trust Deed) confirming that (a) a Regulatory Deficiency Interest Deferral Event has occurred and is continuing, or would occur if payment of interest on the Notes were to be made or (b) a Regulatory Deficiency Interest Deferral Event has ceased to occur and/or payment of interest on the Notes would not result in a Regulatory Deficiency Interest Deferral Event occurring, shall, in the absence of manifest error, be treated and accepted by the Issuer, the Trustee, the holders of the Notes and the Coupons relating to them and all other interested parties as correct and sufficient evidence thereof and the Trustee shall be entitled to rely on such certificate without liability to any person.
Notwithstanding any other provision in these Conditions or in the Trust Deed, the deferral of any payment of interest on a Mandatory Interest Deferral Date in accordance with this Condition 5(b) or in accordance with Condition 3(b) will not constitute a default by the Issuer and will not give Noteholders or the Trustee any right to accelerate repayment of the Notes.
Any interest in respect of the Notes not paid on an Interest Payment Date as a result of the exercise by the Issuer of its discretion pursuant to Condition 5(a) or the obligation on the Issuer to defer pursuant to Condition 5(b) or due to the operation of the Solvency Condition contained in Condition 3(b), together with any other interest in respect thereof not paid on an earlier Interest Payment Date shall, so long as the same remains unpaid, constitute "Arrears of Interest". Arrears of Interest shall not themselves bear interest.
Any Arrears of Interest and any other amount, payment of which is deferred in accordance with Conditions 5(a), 5(b) or 3(b), may (subject to Condition 3(b), to any notifications to, or consent from (in either case if and to the extent applicable), the Relevant Regulator and to any other requirements under the Relevant Rules), be paid in whole or in part at any time upon the expiry of not less than 14 days' notice to such effect given by the Issuer to the Trustee, the Paying Agent and the Noteholders in accordance with Condition 16, and in any event will become due and payable (subject, in the case of (i) and (iii) below, to Condition 3(b) and any notifications to, or consent from (in either case if and to the extent applicable), the Relevant Regulator) in whole (and not in part) upon the earliest of the following dates:
The Issuer shall notify the Trustee, the Paying Agent and the Noteholders in writing in accordance with Condition 16 not less than 5 Business Days prior to an Interest Payment Date:
(i) if that Interest Payment Date is an Optional Interest Payment Date in respect of which the Issuer elects to defer interest as provided in Condition 5(a) above; and
(ii) if that Interest Payment Date is a Mandatory Interest Deferral Date and specifying that interest will not be paid because a Regulatory Deficiency Interest Deferral Event has occurred and is continuing or would occur if payment of interest was made on such Interest Payment Date, provided that if a Regulatory Deficiency Interest Deferral Event occurs less than 5 Business Days prior to an Interest Payment Date, the Issuer shall give notice of the interest deferral in accordance with Condition 16 as soon as reasonably practicable following the occurrence of such event.
the Issuer shall notify the Trustee and the Issuing and Paying Agent in writing and notify the Noteholders in accordance with Condition 16 no later than five Business Days prior to the Maturity Date (if any) or the date specified for redemption in accordance with Condition 6(c), Condition 6(d ), Condition 6(e), Condition 6(f) or Condition 6(g) as applicable, (or as soon as reasonably practicable if the relevant circumstance requiring redemption to be deferred arises, or is determined, less than five Business Days prior to the relevant redemption date).
such date would result in a Regulatory Deficiency Redemption Deferral Event occurring, in which case the provisions of Condition 6(a)(ii), Condition 6(a)(iii) and this Condition 6(a)(iv) shall apply mutatis mutandis to determine the due date for redemption); or
exceeded by an appropriate margin immediately after such redemption or purchase (taking into account the solvency position of the Issuer and the Group, including by reference to the Issuer's and the Group's medium-term capital management plan); and
Notwithstanding the above requirements of this Condition 6(b), if, at the time of any redemption, variation or purchase, the Relevant Rules permit the redemption, variation or purchase only after compliance with one or more alternative or additional conditions to those set out above (if and to the extent required or applicable in order for the notes to qualify as Tier 2Capital of the Issuer and/or the Group under the Relevant Rules from time to time), the Issuer shall comply with such alternative and/or, as appropriate additional condition(s) as are then so required.
If immediately prior to the giving of the notice referred to below:
Tier 2 Securities) agree to such substitution or variation. The Trustee shall use its reasonable endeavours to assist the Issuer in the substitution or variation of the Notes for or into Qualifying Tier 2 Securities provided that the Trustee shall not be obliged to participate or assist in any such substitution or variation of the terms of the securities into which the Notes are to be substituted or are to be varied if such substitution or variation imposes, in the Trustee's opinion, more onerous obligations upon it. If the Trustee does not so participate or assist as provided above, the Issuer may, subject as provided above, redeem the Notes as provided above.
Prior to the publication of any notice of substitution, variation or redemption pursuant to this Condition 6(c) the Issuer shall deliver to the Trustee a certificate signed by two Directors or other Authorised Signatories (as defined in the Trust Deed) of the Issuer stating that the relevant requirement or circumstance referred to in subparagraph (i) or (ii) above applies and the Trustee shall accept such certificate as sufficient evidence of the satisfaction of the conditions precedent set out in such paragraphs (without liability to any person) in which event it shall be conclusive and binding on the Trustee and the Noteholders and the Couponholders. Upon expiry of such notice the Issuer shall (subject to Condition 6(b) and, in the case of a redemption, to Condition 3(b), Condition 6(a)(ii), Condition 6(a)(iii), Condition 6(a)(iv) and Condition 6(a)(v)) either redeem, vary or substitute the Notes, as the case may be.
In connection with any substitution or variation in accordance with this Condition 6(c), the Issuer shall comply with the rules of any stock exchange or other relevant authority on which the Notes are for the time being listed or admitted to trading, and (for so long as the Notes are listed on the Official List of the FCA in its capacity as competent authority under the Financial Services and Markets Act 2000 (the "FSMA") and admitted to trading on the Main Market of the London Stock Exchange) shall publis h a supplement in connection therewith if the Issuer is required to do so in order to comply with Section 87 of the FSMA.
Unless the Issuer shall have given notice to redeem the Notes under Condition 6(c) or Cond ition 6(e) or Condition 6(f) on or prior to the expiration of the notice referred to below, and if Call Option is specified hereon, the Issuer may at its option, subject to Condition 3(b), Condition 6(a)(ii) and Condition 6(b) and having given not less than 30 nor more than 60 days' irrevocable notice to the Noteholders (or such other notice period as may be specified hereon) redeem all or, if so provided, some of the Notes on any Optional Redemption Date specified hereon. Any such redemption of Notes shall be at their Optional Redemption Amount (as may be provided for hereon) together with any interest accrued to (but excluding) the date fixed for redemption in accordance with these Conditions and any Arrears of Interest. Any such redemption or exercise must relate to Notes of a principal amount at least equal to the Minimum Redemption Amount to be redeemed specified hereon and no greater than the Maximum Redemption Amount to be redeemed specified hereon.
All Notes in respect of which any such notice is given shall be redeemed, or the Issuer's option shall be exercised, on the date specified in such notice in accordance with this Condition.
In the case of a partial redemption or a partial exercise of an Issuer's option, the notice to Noteholders shall also contain the certificate numbers of the Notes to be redeemed or in respect of which such option has been exercised, which shall have been drawn in such place as the Trustee may approve and in such manner as it deems appropriate, subject to compliance with any applicable laws and stock exchange or other relevant authority requirements.
If Capital Disqualification Call is specified hereon and within the period from and including the date of the occurrence of a Capital Disqualification Event to and including the date which is the first anniversary of such occurrence (or such shorter period as may be set out hereon), the Issuer gives the notice referred to below and if on the date of such notice a Capital Disqualification Event is continuing, then:
such substitution or variation. The Trustee shall use its reasonable endeavours to assist the Issuer in the substitution or variation of the Notes for or into Qualifying Tier 2 Securities provided that the Trustee shall not be obliged to participate or assist in any such substitution or variation of the terms of the securities into which the Notes are to be substituted or are to be varied if such substitution or variation imposes, in the Trustee's opinion, more onerous obligations upon it. If the Trustee does not so participate or assist as provided above, the Issuer may, subject as provided above, redeem the Notes as provided above.
Prior to the publication of any notice of substitution, variation or redemption pursuant to this Condition 6(e ) the Issuer shall deliver to the Trustee a certificate signed by two Directors or other Authorised Signatories (as defined in the Trust Deed) stating that a Capital Disqualification Event has occurred and is continuing as at the date of the certificate, and the Trustee shall accept such certificate as sufficient evidence of the occurrence and continuation of a Capital Disqualification Event (without liability to any person) in which event it shall be conclusive and binding on the Trustee and the Noteholders and the Couponholders. Upon expiry of such notice the Issuer shall (subject to Condition 6(b) and, in the case of a redemption, to Condition 3(b), Condition 6(a)(ii), Condition 6(a)(iii), Condition 6(a)(iv) and Condition 6(a)(v)) either redeem, vary or s ubstitute the Notes, as the case may be.
In connection with any substitution or variation in accordance with this Condition 6(e), the Issuer shall comply with the rules of any stock exchange or other relevant authority on which the Notes are for the time being listed or admitted to trading.
If a Rating Methodology Call is specified hereon, and if after a date (the "Rating Methodology Event Commencement Date") specified as such hereon a Rating Methodology Event occurs and within the period from and including the date of the occurrence of such Rating Methodology Event to and including the date which is (i) the first anniversary of such occurrence or (ii) if a later first call date is specified hereon, such later call date (the "Rating Methodology Event First Call Date"), the Issuer gives the notice referred to below and if on the date of such notice the Rating Methodology Event is continuing, then:
Prior to the publication of any notice of substitution, variation or redemption pursuant to this Condition 6(f) the Issuer shall deliver to the Trustee a certificate signed by two Directors or other Authorised Signatories (as defined in the Trust Deed) stating that a Rating Methodology Event has occurred and is continuing as at the date of the certificate, and the Trustee shall accept such certificate as sufficient evidence of the occurrence and continuation of a Rating Methodology Event (without liability to any person) in which event it shall be conclusive and binding on the Trustee and theNoteholders and the Couponholders. Upon expiry of such notice the Issuer shall (subject to Condition 6(b) and, in the case of a redemption, to Condition 3(b), Condition 6(a)(ii), Condition 6(a)(iii), Condition 6(a)(iv) and Condition 6(a)(v)) either redeem, vary or substitute the Notes, as the case may be.
In connection with any substitution or variation in accordance with this Condition 6(f), the Issuer shall comply with the rules of any stock exchange or other relevant authority on which the Notes are for the time being listed or admitted to trading.
Subject to Condition 3(b), Condition 6(a)(ii) and Condition 6(b), if at any time after the Issue Date, 80 per cent. or more of the aggregate principal amount of the Notes originally issued (and, for these purposes, any further securities issued pursuant to Condition 15 will be deemed to have been originally issued) has been redeemed and/or purchased and cancelled, then the Issuer may, at its option (without any requirement for the consent or approval of the Noteholders), and having given not less than 30 nor more than 60 days' notice to the Trustee, the Paying Agent, the Registrar and, in accordance with Condition 16, the Noteholders (which notice shall be irrevocable and shall specify the date fixed for redemption), redeem all (but not some only) of the Notes at any time at their principal amount, together with (to the extent that such interest has not been cancelled in accordance with these Conditions) any accrued and unpaid interest to (but excluding) the date of redemption and any Arrears of Interest.
Subject to Conditions 3(b) and 6(b), the Issuer and any of its Subsidiaries for the time being may, subject to the Issuer having complied with regulatory rules on notification to, or consent from (in each case if and to the extent applicable), the Relevant Regulator, at any time purchase Notes (provided that all unmatured Coupons and unexchanged Talons relating thereto are attached thereto or surrendered therewith) in the open market or otherwise and at any price.
All Notes purchased by or on behalf of the Issuer or any of its Subsidiaries may (at the option of the Issuer or the relevant Subsidiary) be held, reissued, resold or surrendered for cancellation, in the case of Bearer Notes, by surrendering each such Note together with all unmatured Coupons and all unexchanged Talons to the Issuing and Paying Agent and, in the case of Registered Notes, by surrendering the Certificate representing such Notes to the Registrar and, in each case, if so surrendered, shall, together with all Notes redeemed by the Issuer, be cancelled forthwith (together with all unmatured Coupons and unexchanged Talons attached thereto or surrendered therewith). Any Notes so redeemed or surrendered for cancellation may not be reissued or resold and the obligations of the Issuer in respect of any such Notes and Coupons shall be discharged.
The Trustee shall not be under any duty to monitor whether any event or circumstance has happened or exists within this Condition 6 and will not be responsible to Noteholders for any loss arising from any failure or delay by the Trustee to do so. Unless and until the Trustee has actual knowledge of the occurrence of any event or circumstance within this Condition 6, it shall be entitled to assume that no such event or circumstance exists.
Payments of principal and interest in respect of Bearer Notes shall, subject as mentioned below, be made against presentation and surrender of the relevant Notes (in the case of all payments of principal and, in the case of interest, as specified in Condition 7(f)(v)) or Coupons (in the case of interest, save as specified in Condition 7(f)(ii)), as the case may be, at the specified office of any Paying Agent outside the U.S. by a cheque payable in the relevant currency drawn on, or, at the option of the holder, by transfer to an account denominated in such currency with, a Bank. "Bank" means a bank in the principal financial centre for such currency or, in the case of euro, in a city in which banks have access to the TARGET System.
holders) of such Note at its address appearing in the Register. Upon application by the holder to the specified office of the Registrar or any Transfer Agent before the Record Date, such payment of interest may be made by transfer to an account in the relevant currency maintained by the payee with a Bank.
Notwithstanding the foregoing, if any Bearer Notes are denominated in U.S. dollars, payments in respect thereof may be made at the specified office of any Paying Agent in New York City in the same manner as aforesaid if (i) the Issuer shall have appointed Paying Agents with specified offices outside the U.S. with the reasonable expectation that such Paying Agents would be able to make payment of the amounts on the Notes in the manner provided above when due, (ii) payment in full of such amounts at all such offices is illegal or effective ly precluded by exchange controls or other similar restrictions on payment or receipt of such amounts and (iii) such Payment is then permitted by U.S. law, without involving, in the opinion of the Issuer, any adverse tax consequence to the Issuer.
All payments are subject in all cases to any applicable fiscal or other laws, regulations and directives in any jurisdiction (whether by operation of law or agreement of the Issuer or its agents) and the Issuer will not be liab le to pay any additional amount in respect of taxes or duties of whatever nature imposed or levied by or pursuant to such laws, regulations, directives or agreements, but without prejudice to the provisions of Condition 8. No commission or expenses shall be charged to the Noteholders or Couponholders in respect of such payments. For the purpose of this paragraph, the phrase "fiscal or other laws, regulations and directives" shall include any withholding or deduction imposed by sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended ("FATCA"), any regulations thereunder, any law implementing an inter-governmental approach thereto, any agreement entered into pursuant to FATCA, or any official interpretation of FATCA.
The Issuing and Paying Agent, the Paying Agents, the Registrar, the Transfer Agents and the Calculation Agent initially appointed by the Issuer and their respective specified offices are listed below. Subject as provided in the Agency Agreement, the Issuing and Paying Agent, the Paying Agents, the Registrar, the Transfer Agents and the Calculation Agent act solely as agents of the Issuer and do not assume any obligation or relationship of agency or trust for or with any Noteholder or Couponholder. The Issuer reserves the right at any time with the approval of the Trustee to vary or terminate the appointment of the Issuing and Paying Agent, any other Paying Agent, the Registrar, any Transfer Agent or the Calculation Agent(s) and to appoint additional or other Paying Agents or Transfer Agents, provided that the Issuer shall at all times maintain (i) an Issuing and Paying Agent, (ii) a Registrar in relation to Registered Notes, (iii) a Transfer Agent in relation to Registered Notes, (iv) one or more Calculation Agent(s) where the Conditions so require, and (v) a Paying Agent having specified offices in London so long as the Notes are admitted to the Official List of the FCA in its capacity as competent authority under the Financial Services and Markets Act 2000 and admitted to trading on the Main Market of the London Stock Exchange.
In addition, the Issuer shall forthwith appoint a Paying Agent in New York City in respect of any Bearer Notes denominated in U.S. dollars in the circumstances described in Condition 7(c).
Notice of any such change or any change of any specified office shall promptly be given to the Noteholders. If any additional Paying Agents are appointed in connection with any Series, the names of such Paying Agents will be specified in Part B of the applicable Final Terms or Pricing Supplement.
(iii) Upon the due date for redemption of any Bearer Note, any unexchanged Talon relating to such Note (whether or not attached) shall become void and no Coupon shall be delivered in respect of such Talon.
(iv) Where any Bearer Note that provides that the relevant unmatured Coupons are to become void upon the due date for redemption of those Notes is presented for redemption without all unmatured Coupons, and where any Bearer Note is presented for redemption without any unexchanged Talon relating to it, redemption shall be made only against the provision of such indemnity as the Issuer may require.
On or after the Interest Payment Date for the final Coupon forming part of a Coupon sheet issued in respect of any Bearer Note, the Talon forming part of such Coupon sheet may be surrendered at the specified office of the Issuing and Paying Agent in exchange for a further Coupon sheet (and another Talon for a further Coupon sheet) (but excluding any Coupons that may have become void pursuant to Condition 9).
If any date for payment in respect of any Note or Coupon is not a Business Day, the holder shall not be entitled to payment until the next following Business Day nor to any interest or other sum in respect of such postponed payment. In this paragraph, "Business Day" means a day (other than a Saturday or a Sunday) on which banks and foreign exchange markets are open for business in the relevant place of presentation, in such jurisdictions as shall be specified as "Additional Financial Centres" hereon and:
All payments of principal and interest by or on behalf of the Issuer in respect of the Notes and the Coupons shall be made free and clear of, and without withholding or deduction for or on account of, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the UK or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law. In that event, the Issuer shall pay such additional amounts in respect of interest payments (but not in respect of any payments of principal or any other amounts) as shall result in receipt by the Noteholders and Couponholders of such amounts as would have been received by them in respect of payments of interest had no such withholding or deduction been required by law to be made, except that no such additional amounts shall be payable with respect to any Note or Coupon:
presented for payment by or on behalf of a holder who is liable to such taxes, duties, assessments or governmental charges in respect of such Note or Coupon by reason of his having some connection with the UK other than the mere holding of the Note or Coupon; or
presented for payment by or on behalf of, a holder who could lawfully avoid (but has not so avoided) such deduction or withholding by complying or procuring that any third party complies with any statutory requirements or by making or procuring that any third party makes a declaration of non-residence or other similar claim for exemption to any tax authority in the place where the relevant Note (or the Certificate representing it) or Coupon is presented for payment; or
presented (or in respect of which the Certificate representing it is presented) for payment more than 30 days after the Relevant Date (as defined below) except to the extent that the holder of it would have been entitled to such additional amounts on presenting it for payment on the thirtieth day after the Relevant Date; or
where such withholding or deduction arises out of any combination of paragraphs (a) to (c) above.
As used in these Conditions, "Relevant Date" in respect of any Note or Coupon means the date on which payment in respect of it first becomes due or (if any amount of the money payable is improperly withheld or
refused) the date on which payment in full of the amount outstanding is made or (if earlier) the date seven days after that on which notice is duly given to the Noteholders that, upon further presentation of the Note (or relevant Certificate) or Coupon being made in accordance with the Conditions, such payment will be made, provided that payment is in fact made upon such presentation. References in these Conditions to (i) "principal" shall be deemed to include any premium payable in respect of the Notes, Final Redemption Amount, Optional Redemption Amount or Special Redemption Price and all other amounts in the nature o f principal payable pursuant to Condition 6 or any amendment or supplement to it and (ii) "interest" shall be deemed to include any additional amounts that may be payable under this Condition or any undertaking given in addition to or in substitution for it under the Trust Deed ("Additional Amounts"), all Interest Amounts and all other amounts payable pursuant to Condition 4 or any amendment or supplement to it.
Claims against the Issuer for payment in respect of the Notes and Coupons (which, for this purpose, shall not include Talons) shall be prescribed and become void unless made within ten years (in the case of principal) or five years (in the case of interest) from the appropriate Relevant Date in respect of them.
Notwithstanding any of the provisions below in this Condition 10, the right to institute winding- up proceedings is limited to circumstances where payment has become due. Pursuant to Condition 3(b), no principal, interest or any other amount will be due on the relevant payment date if the Solvency Condition is not satisfied, at the time of and immediately after any such payment. In the case of any payment of interest in respect of the Notes, such payment may be deferred pursuant to Condition 5(a) and if so deferred will not be due and will be deferred and not be due if Condition 5(b) applies and, in the case of payment of principal, such payment will be deferred and will not be due if Condition 6(a)(ii) applies or the Relevant Regulator does not consent to the redemption (to the extent that consent is then required by the Relevant Regulator or the Relevant Rules), or such redemption otherwise cannot be effected in compliance with the Relevant Rules on such date.
If:
the Trustee may at its discretion institute proceedings for the winding-up of the Issuer and/or prove in the winding-up or administration of the Issuer and/or claim in the liquidation of the Issuer for such payment, but may take no further or other action to enforce, prove or claim for any such payment. No payment in respect of the Notes, the Coupons or the Trust Deed may be made by the Issuer pursuant to Condition 10(a), nor will the Trustee accept the same, otherwise than during or after a winding-up of the Issuer or after an administrator of the Issuer has given notice that it intends to declare and distribute a dividend, unless the Issuer has given prior written notice (with a copy to the Trustee) to, and received consent (if required) from, the Relevant Regulator which the Issuer shall confirm in writing to the Trustee.
If an order is made by the competent court or resolution passed for the winding-up of the Issuer (except, in any such case, a solvent winding-up, solely for the purpose of a reconstruction or amalgamation of the Issuer, the terms of which reconstruction or amalgamation (i) have previously been approved in writing by the Trustee or by an Extraordinary Resolution and (ii) do not provide that the Notes shall thereby become payable) or an administrator of the Issuer gives notice that it intends to declare and distribute a dividend, the Trustee at its discretion may, and if so requested by Noteholders of at least one-quarter in principal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution shall (subject in each case to Condition 10(d)), give notice to the Issuer that the Notes are, and they shall accordingly forthwith become, immediately due and repayable at the amount equal to their principal amount together with accrued interest and any Arrears of Interest.
Without prejudice to Condition 10(a) or (b) above, the Trustee may at its discretion and without further notice institute such proceedings against the Issuer as it may think fit to enforce any obligation, condition or provision binding on the Issuer under the Trust Deed, the Notes or the Coupons (other than any payment obligation of the Issuer under or arising from the Notes, the Coupons or the Trust Deed including, without limitation, payment of any principal, premium or interest in respect of the Notes or the Coupons and any damages awarded for breach of any obligations) and in no event shall the Issuer, by virtue of the institution of any such proceedings, be obliged to pay any sum or sums (in cash or otherwise) sooner than the same would otherwise have been payable by it. Nothing in this Condition 10(c) shall, subject to Condition 10(a), prevent the Trustee instituting proceedings for the winding-up of the Issuer, proving in any winding-up of the Issuer and/or claiming in any liquidation of the Issuer in respect of any payment obligations of the Issuer arising from the Notes, the Coupons or the Trust Deed (including without limitation, payment of any principal, premiums, or interest in respect of the Notes or the Coupons and any damages awarded for any breach of any obligations).
The Trustee shall not be bound to take any of the actions referred to in Condition 10(a), (b) or (c) above to enforce the obligations of the Issuer under the Trust Deed, the Notes or the Coupons unless (i) it shall have been so directed by an Extraordinary Resolution of the Noteholders or so requested in writing by the holders of at least one-quarter in principal amount of the Notes then outstanding and (ii) it shall have been indemnified and/or secured and/or prefunded to its satisfaction.
No Noteholder or Couponholder shall be entitled to proceed directly against the Issuer or to institute proceedings for the winding-up or claim in the liquidation of the Issuer or to prove in such winding-up unless the Trustee, having become so bound to proceed or being able to prove in such winding-up or claim in such winding-up, fails to do so within a reasonable period and such failure shall be continuing, in which case the Noteholder or Couponholder shall have only such rights against the Issuer as those which the Trustee is entitled to exercise as set out in this Condition 10. Any such proceedings brought by any Noteholder or Couponholder shall be brought in the name of the Trustee, subject to such Noteholder or Couponholder indemnifying and/or securing and/or prefunding the Trustee to its satisfaction.
No remedy against the Issuer, other than as referred to in this Condition 10, shall be available to the Trustee or the Noteholders or Couponholders, whether for the recovery of amounts owing in respect of the Notes or under the Trust Deed or in respect of any breach by the Issuer of any of its other obligations under or in respect of the Notes, Coupons or under the Trust Deed.
The Trust Deed contains provisions for convening meetings of Noteholders to consider any matter affecting their interests, including the sanctioning by Extraordinary Resolution (as defined in the Trust Deed) of a modification of any of these Conditions or any provisions of the Trust Deed. Such a meeting may be convened by Noteholders holding not less than 10 per cent. in principal amount of the Notes for the time being outstanding. The quorum for any meeting convened to consider an Extraordinary Resolution shall be one or more pe rsons holding or representing a clear majority in principal amount of the Notes for the time being outstanding, or at any adjourned meeting one or more persons holding or representing Noteholders whatever the principal amount of the Notes held or represented, unless the business of such meeting includes consideration of proposals, inter alia, (i) to amend the dates of maturity or redemption of the Notes or any date for payment of interest or Interest Amounts or Arrears of Interest on the Notes, (ii) to reduce or cancel the principal amount of, or any premium payable on redemption of, the Notes, (iii) to reduce the rate or rates of interest or Arrears of Interest in respect of the Notes or to vary the method or basis of calculating the rate or rates or amount of interest or the basis for calculating any Interest Amount in respect of the Notes, (iv) if a Minimum and/or a Maximum Rate of Interest is shown hereon, to reduce any such Minimum and/or Maximum, (v) to vary any method of, or basis for, calculating the Final Redemption Amount, the Optional Redemption Amount or the Special Redemption Price, (vi) to vary the currency or currencies of payment or denomination of the Notes, (vii) to take any steps that as specified hereon may only be taken following approval by an Extraordinary Resolution to which the special quorum provisions apply, (viii) to modify the provisions concerning the quorum required at any meeting of Noteholders or the majority required to pass an Extraordinary Resolution, or (ix) to modify Condition 3, in which case the necessary quorum shall be one or more persons holding or representing not less than two -thirds, or at any adjourned meeting not less than one-third, in principal amount of the Notes for the time being outstanding. The agreement or approval of the Noteholders shall not be required in the case of any variation of these Conditions and/or the Trust Deed required to be made in the circumstances described in Condition 6(c) or (e) in connection with the substitution or variation of the Notes so that they remain or become Qualifying Tier 2 Securities or in the circumstances described in Condition 6(f) in connection with the substitution or variation of the Notes so that they become Rating Agency Compliant Securities, and to which the Trustee has agreed pursuant to the relevant provisions of Condition 6(c), (e) or (f), as the case may be. Any Extraordinary Resolution duly passed shall be binding on Noteholders (whether or not they were present at the meeting at which such resolution was passed ) and on all Couponholders.
The consent or approval of the Noteholders and the Couponholders shall not be required in the case of amendments to the Conditions pursuant to Condition 4(c)(iii)(F) to vary the method or basis of calculating the rate or rates or amount of interest or the basis for calculating any Interest Amount in respect of the Notes or for any other variation of these Conditions and/or the Trust Deed required to be made in the circumstances described in Condition 4(c)(iii)(F), where the Issuer has delivered to the Trustee a certificate pursuant to Condition 4(c)(iii)(F)(9).
The Trustee may agree, without the consent of the Noteholders or Couponholders, to (i) any modification of any of the provisions of the Trust Deed or the Agency Agreement that is in the opinion of the Trustee of a formal, minor or technical nature or is made to correct a manifest error, and (ii) any other modification (except as mentioned in the Trust Deed), and any waiver or authorisation of any breach or proposed breach, of any of these Conditions and the provisions of the Trust Deed or the Agency Agreement that is in the opinion of the Trustee not materially prejudicial to the interests of the Noteholders.
Any such modification, authorisation or waiver shall be binding on the Noteholders and the Couponholders and, if the Trustee so requires, such modification shall be notified to the Noteholders as soon as practicable.
No modification to these Conditions or any other provisions of the Trust Deed shall become effective unless the Issuer shall have given at least one month's prior written notice to, and received no objection from, the Relevant Regulator (or such other period of notice as the Relevant Regulator may from time to time require or accept and, in any event, provided that there is a requirement to give such notice).
The Trustee, if it is satisfied that so to do would not be materially prejudicial to the interests of the Noteholde rs or Couponholders, may agree with the Issuer, without the consent of the Noteholders or Couponholders, to the substitution on a subordinated basis equivalent to that referred to in Condition 3 of any person or persons incorporated in any country in the world (other than the U.S.) (the "Substitute Obligor") in place of the Issuer (or any previous Substitute Obligor under this Condition) as a new principal debtor under the Trust Deed, the Notes and the Coupons provided that:
(vii) the Issuer and the Substitute Obligor comply with such other requirements as are reasonable in the interests of the Noteholders, as the Trustee may direct.
In connection with any proposed substitution as aforesaid, the Trustee shall have regard to the interests of the Noteholders as a class and the Trustee shall not have regard to the consequences of such substitution or such exercise for individual Noteholders or Couponholders resulting from their being for any purpose domiciled or resident in, or otherwise connected with. or subject to the jurisdiction of, any particular territory. In connection with any substitution or such exercise as aforesaid, no Noteholder or Couponholder shall be entitled to claim, whether from the Issuer, the Substitute Obligor or the Trustee or any other person, any indemnification or payment in respect of any tax consequence of any such substitution or any such exercise upon any individual Noteholders or Couponholders except to the extent already provided in Condition 8 and/or any undertaking given in addition thereto or in substitution therefor pursuant to the Trust Deed.
Any substitution pursuant to this Condition 11 shall be subject (to the extent then required by the Relevant Regulator or the Relevant Rules) to any notifications to, or consent from, the Relevant Regulator.
In connection with the exercise of its functions (including but not limited to those referred to in Condition 11) the Trustee shall have regard to the interests of the Noteholders as a class and shall not have regard to the consequences of such exercise for individual Noteholders or Couponholders and the Trustee shall not be entitled to require, nor shall any Noteholder or Couponholder be entitled to claim, from the Issuer any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders or Couponholders.
The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility, including provisions relieving it from taking any action unless indemnified and/or secured and/or prefunded to its satisfaction. The Trustee is entitled to enter into business transactions with the Issuer and any entity related to the Issue r without accounting for any profit.
If a Note, Certificate, Coupon or Talon is lost, stolen, mutilated, defaced or destroyed, it may be replaced, subject to applicable laws, regulations and stock exchange or other relevant authority regulations, at the specified office of the Issuing and Paying Agent (in the case of Bearer Notes, Coupons or Talons) and of the Registrar (in the case of Certificates) or such other Paying Agent or Transfer Agent. as the case may be, as may from time to time be designated by the Issuer for the purpose and notice of whose designation is given to Noteholders, in each case on payment by the claimant of the fees and costs incurred in connection therewith and on such terms as to evidence, security and indemnity (which may provide, inter alia, that if the allegedly lost, stolen or destroyed Note, Certificate, Coupon or Talon is subsequently presented for payment or, as the case may be, for exchange for further Coupons, there shall be paid to the Issuer on demand the amount payable by the Issuer in respect of such Notes, Certificates, Coupons or further Coupons) and otherwise as the Issuer may require. Mutilated or defaced Notes, Certificates, Coupons or Talons must be surrendered before replacements will be issued.
The Issuer may from time to time without the consent of the Noteholders or Couponholders create and issue further securities either having the same terms and conditions as the Notes in all respects (or in all respects except for the first payment of interest on them) and so that such further issue shall be consolidated and form a single series with the outstanding securities of any series (including the Notes) or upon such terms as the Issuer may determine at the time of their issue. References in these Conditions to the Notes include (unless the context requires otherwise) any other securities issued pursuant to this Condition and forming a single series with the Notes. Any further securities forming a single series with the outstanding securities of any series (including the Notes) constituted by the Trust Deed or any deed supplemental to it shall, and any other securities may (with the consent of the Trustee), be constituted by the Trust Deed. The Trust Deed contains provisions for convening a single meeting of the Noteholders and the holders of securities of other series where the Trustee so decides.
Notices to the holders of Registered Notes shall be mailed to them at their respective addresses in the Register and deemed to have been given on the fourth weekday (being a day other than a Saturday or a Sunday) after the date of mailing. Notices to the holders of Bearer Notes shall be valid if published in a daily newspaper of general circulation in London (which is expected to be the Financial Times). If in the opinion of the Trustee any such publication is not practicable, notice shall be validly given if published in another leading daily English language newspaper with general circulation in Europe. Any such notice shall be deemed to have been given o n the date of such publication or, if published more than once or on different dates, on the first date on which publication is made, as provided above.
Couponholders shall be deemed for all purposes to have notice of the contents of any notice given to th e holders of Bearer Notes in accordance with this Condition.
No person shall have any right to enforce any term or condition of the Notes under the Contracts (Rights of Third Parties) Act 1999.
As used herein:
"Arrears of Interest" has the meaning given to it in Condition 5;
"Assets" means the unconsolidated gross assets of the Issuer, as shown in the latest published audited balance sheet of the Issuer, but adjusted for subsequent events, all in such manner as the Directors may determine;
"Capital Disqualification Event" is deemed to have occurred if as a result of any replacement or change to (or change to the interpretation by any court or authority entitled to do so of) the Relevant Rules, the whole or any part of the principal amount of the Notes is no longer capable of counting as Tier 2 Capital for the purposes of the Issuer or the Group as a whole, whether on a solo, group or consolidated basis, except (in either case) where such non -qualification is only as a result of any applicable limitation on the amount of such capital;
"Clean-Up Event" means an event of the type described in Condition 6(g);
"Compulsory Interest Payment Date" means any Interest Payment Date in respect of which during the immediately preceding 6 months a Compulsory Interest Payment Event has occurred and is not a Mandatory Interest Deferral Date and on which the Solvency Condition is satisfied;
"Compulsory Interest Payment Event" means:
(i) any declaration, payment or making of a dividend or distribution by the Issuer to its ordinary shareholders; or
(ii) any repurchase by the Issuer of its ordinary shares for cash, provided such repurchase is not made in the ordinary course of business of the Issuer in connection with any share option scheme or share ownership scheme for management or employees of the Issuer or management or employees of affiliates of the Issuer;
"Directors" means the directors of the Issuer;
"European Economic Area" or "EEA" means the countries comprising the European Union together with Norway, Liechtenstein and Iceland;
"Existing Undated Tier 2 Securities" means Upper Tier 2 Capital issued prior to Solvency II Implementation;
"FCA" means the UK Financial Conduct Authority in its capacity as the UK listing authority for the purposes of the Financial Services and Markets Act 2000 ("FSMA") or any successor authority appointed as the competent UK listing authority for the purposes of Part VI (Official Listing) of the FSMA or otherwise;
"Final Redemption Amount" has the meaning given to it in the relevant Final Terms or Pricing Supplement. In setting the Final Redemption Amount the Issuer shall have consideration to the limitations set out in any Relevant Rules;
"Group" means the Issuer and its Subsidiaries;
"Group Insurance Undertaking" means an insurance undertaking or reinsurance undertaking whose data is included for the purposes of the calculation of the Solvency Capital Requirement of the Group pursuant to the Relevant Rules;
"Insolvent Insurer Winding-up" means:
in each case, where the assets of that Group Insurance Undertaking may orwill be insufficient to meet all the claims of the policyholders and/or beneficiaries pursuant to a contract of insurance of that insurance undertaking which is in winding-up or administration (and forthese purposes, the claims of policyholders or beneficiaries pursuant to a contract of insurance shallinclude all amounts to which policyholders or beneficiaries are entitled under applicable legislation or rules relating to the winding-up of insurance companies to reflect any right to receive or expectation of receiving benefits which policyholders or beneficiaries may have);
"insurance undertaking" has the meaning given to it in the Relevant Rules;
"Junior Securities" has the meaning given to it in Condition 3(a);
"Level 2 Regulations" means the Commission Delegated Regulation (EU) No. 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council of the European Union on the taking-up and pursuit of the business of insurance and reinsurance (Solvency II);
"Liabilities" means the unconsolidated gross liabilities of the Issuer, as shown in the latest published audited balance sheet of the Issuer, but adjusted for contingent liabilities and for subsequent events, all in such manner as the Directors may determine;
"Mandatory Interest Deferral Date" means each Interest Payment Date in respect of which a Regulatory Deficiency Interest Deferral Event has occurred and is continuing or would occur if payment of interest was made on such Interest Payment Date;
"Maturity Date" has the meaning given to it in the relevant Final Terms or Pricing Supplement and if specified hereon will be at least ten years from the Issue Date;
"Minimum Capital Requirement" means the Minimum Capital Requirement, the minimum consolidated group Solvency Capital Requirement or other minimum capital requirements (as applicable) referred to in the Relevant Rules;
"Optional Interest Payment Date" means any Interest Payment Date other than a Compulsory Interest Payment Date, if Compulsory Interest Payment Date is specified hereon, or a Mandatory Interest Deferral Date;
"Optional Redemption Amount" has the meaning given to it in the relevant Final Terms or Pricing Supplement. In setting the Optional Redemption Amount the Issuer shall have consideration to the limitations set out in any Relevant Rules;
"Ordinary Shares" means fully paid ordinary shares in the capital of the Issuer;
"Pari Passu Creditors" means creditors of the Issuer whose claims rank, or are expressed to rank pari passu with, the claims of the Noteholders including holders of Pari Passu Securities;
"Pari Passu Securities" has the meaning given to it in Condition 3(a);
"Qualifying Tier 2 Securities" means securities issued (including by way of exchange, conversion or otherwise) directly or indirectly by the Issuer that:
"Rating Agency" means A.M. Best Europe Rating Services Limited, Fitch Ratings Limited, Moody's Investors Service Ltd. or S&P Global Ratings Europe Limited or any of their respective successors;
"Rating Agency Compliant Securities" means securities issued directly or indirectly by the Issuer that are:
"Rating Methodology Event" will be deemed to occur upon a change in methodology of the Rating Agency (or in the interpretation of such methodology) as a result of which the equity content assigned by the Rating Agency to the Notes is, in the reasonable opinion of the Issuer, materially reduced when compared with the equity content assigned by the Rating Agency to the Notes on or around the Issue Date;
"Recognised Stock Exchange" means a recognised stock exchange as defined in Section 1005 of the Income Tax Act 2007 as the same may be amended from time to time and any provision, statute or statutory instrument replacing the same from time to time;
"Regulatory Deficiency Interest Deferral Event" means any event (including, without limitation,(i) any event which causes any Solvency Capital Requirement or Minimum Capital Requirement to be breached and such breach is an event, or (ii) (where Insolvent Insurer Winding-up Condition is specified as applicable in the Final Terms or Pricing Supplement) where an Insolvent Insurer Winding-up has occurred and is continuing and the continuation of such Insolvent Insurer Winding-up is an event) which under the Relevant Rules requires the Issuer to defer payment of interest (or, if applicable, Arrears of Interest) in respect of the Notes (on the basis that the Notes qualify (or are intended to qualify) as Tier 2 Capital under the Relevant Rules);
"Regulatory Deficiency Redemption Deferral Event" means any event (including, without limitation, where an Insolvent Insurer Winding-up has occurred and is continuing and any event which causes any Solvency Capital Requirement or Minimum Capital Requirement to be breached and the continuation of such Insolvent Insurer Windingup is, or as the case may be,such breach is, an event) which under the Relevant Rules requires the Issuer to defer or suspend repayment or redemption of the Notes (on the basis that the Notes qualify (or are intended to qualify) as Tier 2 Capital under the Relevant Rules);
"Relevant Regulator" means the Bank of England acting as the UK Prudential Regulation Authority through its Prudential Regulation Committee or such successor or other authority having primary supervisory authority with respect to prudential matters in relation to the Issuer and/or the Group;
"Relevant Rules" means, at any time, any legislation, rules, guidelines or regulations (whether having the force of law or otherwise) then applied by the Relevant Regulatorto the Issuer, the Group or any Subsidiary of the Issuer engaged in insurance business, relating, but not limited to, to own funds, capital resources, capital requirements, financial adequacy requirements or other prudential matters (including, but not limited to, the characteristics, features or criteria o f any of the foregoing) and without limitation to the foregoing, includes (to the extent then applied as aforesaid) Solvency II, Directive 98/78/EC of the European Union as amended and any legislation, rules, guidelines or regulations of the Relevant Regulator relating to such matters;
"Senior Creditors" means (a) creditors of the Issuer who are unsubordinated creditors of the Issuer including all policyholders of the Issuer and all beneficiaries under contracts of insurance written by the Issuer (for the avoidance of doubt, the claims of policyholders and such beneficiaries shall include all amounts to which policyholders or such beneficiaries are entitled under applicable legislation or rules relating to the winding-up of insurance companies to reflect any right to receive or expectation of receiving benefits which policyholders or such beneficiaries may have) and (b) creditors of the Issuer whose claims are, or are expressed to be, subordinated to the claims of other creditors of the Issuer (other than those (A) whose claims are in respect of instruments or obligations which constitute, or would but for any applicable limitation on the amount of any such capital constitute, (i) Tier 1 Capital or (ii) Tier 2 Capital (in the case of any such tier whether issued on, before or after Solvency II Implementation) or (B) whose claims otherwise rank, or are expressed to rank, pari passu with, or junior to, the claims of the Noteholders);
"Solvency Capital Requirement" means the Solvency Capital Requirement or the consolidated group Solvency Capital Requirement referred to in, or any other capital requirement (other than the Minimum Capital Requirement) howsoever described in, the Relevant Rules;
"Solvency II" means the Solvency II Directive and any implementing measures adopted pursuant to the Solvency II Directive including, without limitation, the Level 2 Regulations (for the avoidance of doubt, whether implemented by way of a regulation, a directive or otherwise);
"Solvency II Directive" means Directive 2009/138/EC of the European Parliament and of the Council of the European Union of 25 November 2009 on the taking-up and pursuit of the business of insurance and reinsurance (Solvency II);
"Solvency II Implementation" means 1 January 2016;
"Special Redemption Price" has the meaning given to it in the relevant Final Terms or Pricing Supplement;
"Subsidiary" has the meaning given to it under Section 1159 of the Companies Act 2006 (as amended from time to time);
"subsidiary undertaking" has the meaning given to subsidiary undertaking under Section 1162 of the Companies Act 2006 (as amended from time to time);
"Tax Event" means an event of the type described in Condition 6(c)(i) or (ii);
"Tier 1 Capital" has the meaning given to it for the purposes of the Relevant Rules from time to time (including, without limitation, by virtue of the operation of any grandfathering provisions under any Relevant Rules);
"Tier 2 Capital" has the meaning given to it for the purposes of the Relevant Rules from time to time (including, without limitation, by virtue of the operation of any grandfathering provisions under any Relevant Rules);
"United Kingdom" or "UK" means the United Kingdom of Great Britain and Northern Ireland; and
"Upper Tier 2 Capital" has the meaning given to it for the purposes of the Relevant Rules prior to Solvency II Implementation.
The Trust Deed, the Notes, the Coupons and the Talons and any non -contractual obligations arising out of or in connection with the Trust Deed, the Notes, the Coupons and the Talons are governed by, and shall be construed in accordance with, English law.
If the Global Notes in respect of any series of Senior Notes in bearer form are stated in the applicable Final Terms to be issued in NGN form, the Global Notes will be delivered on or prior to the original issue date of the Tranche to a Common Safekeeper. If the Global Certificates in respect of any series of Senior Notes in registered form are stated in the applicable Final Terms to be issued in NSS form, the Global Certificates will be delivered on or prior to the original issue date of the Tranche to a Common Safekeeper. Where the Global Notes issued in respect of any Tranche are in NGN form or are held under the NSS, Euroclear and Clearstream, Luxembourg will be notified whether or not such Global Notes are intended to be held in a manner which would allow Eurosystem eligibility. Depositing the Global Notes or Global Certificates (as the case may be) with the Common Safekeeper does not necessarily mean that the relevant Senior 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 satisfaction of the Eurosystem eligibility criteria.
Global Notes which are issued in CGN form and Certificates may be delivered on or prior to the original issue date of the Tranche to a Common Depositary (other than Global Certificates in NSS form, which shall be delivered to a Common Safekeeper).
If the Global Note is in CGN form, upon the initial deposit of a Global Note with a common depositary for Euroclear and Clearstream, Luxembourg (the "Common Depositary") or registration of Registered Notes in the name of any common nominee for Euroclear and Clearstream, Luxembourg and delivery of the relevant Global Certificate to the Common Depositary, Euroclear or Clearstream, Luxembourg will credit each subscriber with a nominal amount of Notes equal to the nominal amount thereof for which it has subscribed and paid. If the Global Note is in NGN form, the nominal 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 nominal amount of Notes represented by the 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.
Notes that are initially deposited with the Common Depositary may also be credited to the accounts of subscribers with (if indicated in the relevant Final Terms) other clearing systems through direct or indirect accounts with Euroclear and Clearstream, Luxembourg held by such other clearing systems. Conversely, Notes that are initially deposited with any other clearing system may similarly be credited to the accounts of subscribers with Euroc lear, Clearstream, Luxembourg or other clearing systems.
Each of the persons shown in the records of Euroclear, Clearstream, Luxembourg or any other clearing system as the holder of a Note represented by a Global Note or a Global Certificate must look solely to Euroclear, Clearstream, Luxembourg or such clearing system (as the case may be) for his share of each payment made by the Issuer to the bearer of such Global Note or the holder of the underlying Registered Notes, as the case may be, and in relation to all other rights arising under the Global Notes or Global Certificates subject to and in accordance with the respective rules and procedures of Euroclear, Clearstream, Luxembourg, or such clearing system (as the case may be). Such persons shall have no claim directly against the Issuer in respect of payments due on the Notes for so long as the Notes are represented by such Global Note or Global Certificate and such obligations of the Issuer will be discharged by payment to the bearer of such Global Note or the holder of the underlying Registered Notes, as the case may be, in respect of each amount so paid.
Each temporary Global Note will be exchangeable, free of charge to the holder, on or after its Exchange Date:
If the temporary Global Note is exchangeable for Definitive Notes at the option of the holder and the relevant clearing system(s) so permit, the Notes shall be tradeable only in amounts of at least the Specified Denomination specified in the
Final Terms (such as €100,000 (or its equivalent in another currency)) plus one or more higher integral multiples of another smaller amount (such as €1,000 (or its equivalent in another currency)).
Each permanent Global Note will be exchangeable, free of charge to the holder, on or after its Exchange Date in whole but not in part for Definitive Notes if the permanent Global Note is held on behalf of Euroclear or Clearstream, Luxembourg or any other clearing system (an "Alternative Clearing System") and any such clearing system is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or in fact does so.
In the event that a Global Note is exchanged for Definitive Notes, such Definitive Notes shall be issued in Specified Denomination(s) only. Noteholders who hold Notes in the relevant clearing system in amounts that are not integral multiples of a Specified Denomination may need to purchase or sell, on or before the relevant Exchange Date, a principal amount of Notes such that their holding is an integral multiple of a Specified Denomination.
If the Final Terms state that the Notes are to be represented by a permanent Global Certificate on issue, the following will apply in respect of transfers of Notes held in Euroclear or Clearstream, Luxembourg or an Alternative Clearing System. These provisions will not prevent the trading of interests in the Notes within a clearing system whilst they are held on behalf of such clearing system, but will limit the circumstances in which the Notes may be withdrawn from the relevant clearing system.
Transfers of the holding of Notes represented by any Global Certificate pursuant to Condition 2(a) may only be made in part:
provided that, in the case of the first transfer of part of a holding pursuant to (i) above, the Registered Holder has given the Registrar not less than 30 days' notice at its specified office of the Registered Holder's intention to effect such transfer.
If the Global Note is in CGN form, on or after any due date for exchange the holder of a Global Note may surrender such Global Note or, in the case of a partial exchange, present it for endorsement to or to the order of the Issuing and Paying Agent. In exchange for any Global Note, or the part thereof to be exchanged, the Issuer will (i) in the case of a temporary Global Note exchangeable for a permanent Global Note, deliver, or procure the delivery of, a permanent Global Note in an aggregate nominal amount equal to that of the whole or that part of a temporary Global Note that is being exchanged or, in the case of a subsequent exchange, endorse, or procure the endorsement of, a permanent Global Note to reflect such exchange or (ii) in the case of a Global Note exchangeable for Definitive Notes or Registered Notes, deliver, or procure the delivery of, an equal aggregate nominal amount of duly executed and authenticated Definitive Notes and/or Certificates, as the case may be, or if the Global Note is in NGN form, the Issuer will procure that details of such exchange be entered pro rata in the records of the relevant clearing system. In this Prospectus, "Definitive Notes" means, in relation to any Global Note, the definitive Bearer Notes for which such Global Note may be exchanged (if appropriate, having attached to them all Coupons in respect of interest that has not already been paid on the Global Note and a Talon). Definitive Notes will be security printed and Certificates will be printed in accordance with any applicable legal and stock exchange requirements in or substantially in the form set out in the Schedules to the Trust Deed. On exchange in full of each permanent Global Note, the Issuer will, if the holder so requests, procure that it is cancelled and returned to the holder together with the relevant Definitive Notes.
"Exchange Date" means, in relation to a temporary Global Note, the day falling after the expiry of 40 days after its issue date and, in relation to a permanent Global Note, a day falling not less than 60 days, or in the cas e of an exchange for Registered Notes five days, or in the case of failure to pay principal in respect of any Notes when due 30 days, after that on which the notice requiring exchange is given and on which banks are open for business in the city in which t he
specified office of the Issuing and Paying Agent is located and in the city in which the relevant clearing system is located.
The temporary Global Notes, permanent Global Notes and Global Certificates contain provisions that apply to the Notes that they represent, some of which modify the effect of the terms and conditions of the Notes set out in this Prospectus. The following is a summary of certain of those provisions:
No payment falling due after the Exchange Date will be made on any Global Note unless exchange for an interest in a permanent Global Note or for Definitive Notes or Registered Notes is improperly withheld or refused. Payments on any temporary Global Note issued in compliance with TEFRA D before the Exchange Date will only be made against presentation of certification as to non-U.S. beneficial ownership in the form set out in the Agency Agreement. All payments in respect of Notes represented by a Global Note in CGN form will be made against presentation for endorsement and, if no further payment falls to be made in respect of the Notes, surrender of that Global Note to or to the order of the Issuing and Paying Agent or such other Paying Agent as shall have been notified to the Noteholders for such purpose. Ifthe Global Note is a CGN, a record of each payment so made will be endorsed on each Global Note, which endorsement will be prima facie evidence that such payment has been made in respect of the Notes. Condition 7(f)(v) and Condition 8(e)will apply to the Definitive Notes only. If the Global Note is in NGN form, the Issuer shall procure that details of each such payment shall be entered pro rata in the records of the relevant clearing system and in the case of payments of principal, the nominal amount of the Notes recorded in the records of the relevant clearing system and represented by the Global Note will be reduced accordingly. Payments under the NGN will be made to its holder. Each payment so made will discharge the Issuer's obligations in respect thereof. Any failure to make the entries in the records of the relevant clearing system shall not affect such discharge.
For the purpose of any payments made in respect of a Global Note, the relevant place of presentation shall be disregarded in the definition of "business day" set out in Condition 7(h).
All payments in respect of Notes represented by a Global Certificate will be made to, or to the order of, the person whose name is entered on the Register at the close of business on the Clearing System Business Day immediately prior to the date for payment, where "Clearing System Business Day" means Monday to Friday inclusive except 25 December and 1 January.
Claims against the Issuer in respect of Notes that are represented by a permanent Global Note will become void unless it is presented for payment within a period of 10 years (in the case of principal) and 5 years (in the case of interest) from the appropriate Relevant Date (as defined in Condition 9).
The holder of a permanent Global Note or of the Notes represented by a Global Certificate shall (unless such permanent Global Note or Global Certificate represents only one Note) be treated as being two persons for the purposes of any quorum requirements of a meeting of Noteholders and, at any such meeting, the holder of a permanent Global Note shall be treated as having one vote in respect of each £1 of principal amount of the Notes.
Cancellation of any Note represented by a permanent Global Note that is required by the Conditions to be cancelled (other than upon its redemption) will be effected by reduction in the nominal amount of the relevant permanent Global Note.
Notes represented by a permanent Global Note may only be purchased by the Issuer or any of its subsidiaries if they are purchased together with the rights to receive all future payments of interest (if any) thereon.
Any option of the Issuer provided for in the Conditions of any Notes while such Notes are represented by a permanent Global Note shall be exercised by the Issuer giving notice to the Noteholders within the time limits set out in and containing the information required by the Conditions, except that the notice shall not be required to contain the serial numbers of Notes drawn in the case of a partial exercise of an option and, accordingly, no drawing of Notes shall be required. In the event that any option of the Issuer is exercised in respect of some but not all of the Notes of any Series, the rights of accountholders with a clearing system in respect of the Notes will be governed by the standard procedures of Euroclear, Clearstream, Luxembourg (to be reflected in the records of Euroclear and Clearstream, Luxembourg as either a pool factor or a reduction in nominal amount, at their discretion) or any other clearing system (as the case may be).
Any option of the Noteholders provided for in the Conditions of any Notes while such Notes are represented by a permanent Global Note may be exercised by the holder of the permanent Global Note giving notice to the Issuing and Paying Agent within the time limits relating to the deposit of Notes with a Paying Agent set out in the Conditions substantially in the form of the notice available from any Paying Agent, except that the notice shall not be required to contain the serial numbers of the Notes in respect of which the option has been exercised, and stating the nominal amount of Notes in respect of which the option is exercised and at the same time, where the permanent Glo bal Note is a CGN, presenting the permanent Global Note to the Issuing and Paying Agent, or to a Paying Agent acting on behalf of the Issuing and Paying Agent, for notation. Where the Global Note is in NGN form, the Issuer shall procure that details of such exercise shall be entered pro rata in the records of the relevant clearing system and the nominal amount of the Notes recorded in those records will be reduced accordingly.
Where the Global Note is in NGN form, the Issuer shall procure that any exchange, payment, cancellation, exercise of any option or any right under the Notes, as the case may be, in addition to the circumstances set out above shall be entered in the records of the relevant clearing systems and upon any such entry being made, in respect of payments of principal, the nominal amount of the Senior Notes represented by such Global Note shall be adjusted accordingly.
In considering the interests of Noteholders while any Global Note is held on behalf of, or Registered Notes are registered in the name of, any nominee or any common nominee, as the case may be, for a clearing system, the Trustee may have regard to any information provided to it by such clearing system or its operator as to the identity (either individually or by category) of its accountholders with entitlements to such Global Note or Registered Notes and may consider such interests as if such accountholders were the holders of the Notes represented by such Global Note or Global Certificate and, in the case of Registered Notes only, the Trustee may have regard to any other letter of confirmation, form of record, information and/or certification as the Trustee shall, in its absolute discretion, think fit as evidence that at any particular time or throughout any particular period any particular person should be regarded as having an interest in a particular nominal amount of Registered Notes and if the Trustee does so rely on such evidence, such letter of confirmation, form of record, information and/or certification shall be conclusive and binding on all concerned.
So long as any Notes are represented by a Global Note and such Global Note is held on behalf of a clearing system, notices to the holders of Notes of that Series may be given by delivery of the relevant notice to that clearing system for communication by it to entitled accountholders in substitution for publication as required by the Conditions or by delivery of the relevant notice to the holder of the Global Note. Where a Global Certificate held by CDS is exchanged for definitive Notes in the circumstances set out in (Exchange) above, the Issuer will provide notices to the holders of Notes in accordance with the Conditions, provided however that such notices will be published in a le ading daily newspaper of general circulation in Canada (which is expected to be The Globe and Mail).
While any Global Note is held on behalf of, or any Global Certificate is registered in the name of any nominee for, a clearing system, then:
relevant clearing system for the purposes of (b) above. Any resolution passed in such manner shall be binding on all Noteholders and Couponholders, even if the relevant consent or instruction proves to be defective. Any such certificate or other document may comprise any form of statement or print out of electronic records provided by the relevant clearing system (including Euroclear's EUCLID or Clearstream, Luxembourg's CreationOnline system) in accordance with its usual procedures and in which the accountholder of a particular principal or nominal amount of the Notes is clearly identified together with the amount of such holding. Neither the Issuer nor the Trustee shall be liable to any person by reason of having accepted as valid or not having rejected any certificate or other document to such effect purporting to be issued by any such person and subsequently found to be forged or not authentic.
The net proceeds of the issue of each Series or Tranche of Notes will be used to fund the general business and commercial activities of the Group, including the refinancing of Group borrowings, and to strengthen further its capital base.
The Issuer, Aviva plc, is a public limited company incorporated under the laws of England and Wales with registered number 2468686, and is the holding company of the Group. The Group's main activities are the provision of long-term insurance and savings, general and health insurance, and fund management products and services.
The issued share capital of the Issuer as at 30 April 2020 (being the latest practicable date prior to the publication of this Prospectus) comprised 3,927.67 million ordinary shares of 25 pence each totalling £981.92 million in nominal value, and 200 million irredeemable preference shares of £1 each totalling £200 million in nominal value, all of which are fully paid. This results in a total issued share capital of £1,181.92 million.
The Issuer's registered office is St Helen's, 1 Undershaft, London EC3P 3DQ.
The telephone number is +44 (0)20 7283 2000.
The Group was formed by the merger of CGU plc and Norwich Union plc on 30 May 2000. CGU plc was renamed CGNU plc on completion of the merger, and subsequently renamed Aviva plc on 1 July 2002. CGU plc and Norwich Union plc were both major UK-based insurers operating in the long-term insurance business and general insurance markets. Both companies had long corporate histories. On 1 July 2016, Aviva Canada Inc. acquired 100 per cent. of the issued and outstanding shares of RBC General Insurance Company.
On 31 May 2018, the Group completed its acquisition of Irish insurer Friends First Life Assurance Company dac from Dutch insurer, Achmea BV.
The Group operates across four main market sectors – life insurance and savings, general insurance, accident and health insurance and fund management, providing services to over 33 million customers worldwide. The Group operates across a number of markets: the UK; Canada; Europe (Ireland, France, Poland, Italy and Turkey); Asia (Singapore, China, Hong Kong, Indonesia, Vietnam and India) and Aviva Investors. There are approximately 30,000 employees across the Group.
In 2019, the Group's operating segments were UK Life; UK General Insurance; Canada; France; Poland; Italy, Ireland and Other; Asia; and Aviva Investors. The Group continues to report the results of the businesses by market on this basis in the 2019 Strategic Report and 2019 Annual Report and Accounts. From 2020, the Group's operating model is organised into five business divisions. The business divisions are Investments, Savings and Retirement, UK Life, General Insurance, Europe Life, and Asia Life.
On 20 November 2019, the Group announced it had agreed the sale of its shareholding in its Hong Kong joint venture, Blue, to joint venture partner, Hillhouse AVHolding Limited.
On 6 March 2020, the Group announced its intention to sell its entire shareholding in its Indonesian joint venture, PT Astra Aviva Life, to the joint venture partner, PT Astra International Tbk. The transaction is expected to complete in quarter four of 2020 and is subject to certain closing conditions, including regulatory approval in Indonesia and the completion of Bangkok Bank Public Company Limited's acquisition of PT Bank Permata Tbk, Aviva Indonesia's bancassurance partner.
Following his appointment as the new Group Chief Executive Officer on 4 March 2019, Maurice Tulloch undertook a review of the Group's strategic priorities, purpose and vision.
Since November 2019 the Group has defined its strategy to three key areas:
The Group's focus is on meeting customers' savings, retirement and insurance needs. The Group will simplify the way in which it interacts with and serves customers, promoting resolution as early as possible and enhancing digital platforms. Progress has and will continue to be monitored through metrics including trust and net promotor scores.
The Group's focus is on the core activities of the business: underwriting, claims management, investment performance and cost efficiency. The Group will maximise the use of data and analytics and will continue to digitise the business. The Group plans to achieve its cost saving target of £300 million over the next three years, having delivered a £72 million saving in financial year 2019.
The Group's focus is on investing with a clear commercial benefit, being selective with opportunities to be pursued and investing where economic returns and long-term value can be generated for shareholders. By adopting a rigorous investment framework, focused on value and capital return, the Group expects to generate increasing revenues, fund flows, capital, cash and profit. The Group plans to invest in areas such as IT simplification, transformation of UK customer experience and mandated regulatory change over the next three years.
In 2010, the Group brought allits businesses together under the Aviva brand, which remains the case for the majority of its products and services.
Across the business divisions, the Group offers the following products (the products provided by different divisions are noted in the description of the divisions in Section 5):
Some of the Group's insurance and investment contracts contain a discretionary participation feature, which is a contractual right to receive additional benefits as a supplement to guaranteed benefits. These are referred to as 'participating' contracts.
The Group's general insurance business operates under the Aviva brand globally and is focussed on the following products:
• Personal lines – motor, household, travel and creditor.
Investments, Savings and Retirement
This new division intends to help customers meet their savings and retirement needs, whilst providing a growth opportunity for the business. This division bringstogether the global asset manager, Aviva Investors, and the Group's modern UK Savings & Retirement business to create a wealth and asset management business. This business intends to serve a fast-growing market as consumers look to save for their future, safeguard against the unknown and enjoy income in their retirement years.
The main products for this division are pensions, bonds and savings and investment sales.
The Group is one of the bestpositioned to win in this business. With a market-leading brand, the Group is currently number one in UK Workplace Pensions by assets under administration and as at year end 2019 Aviva Investors' assets under management was £346 billion. With a large customer base, scale of assets and strong advisor relationships, this division is well-positioned for growth. It will also draw on the Group's strong track record and expertise in the area of responsible investing.
From2020, the Group's UK Life division incorporates three lines of business: annuities & equity release, protection & health and heritage. This division is key in generating sustainable cash flow. The focus for UK Life is to generate significant levels of capital and cash flow and to recycle some of that capital to write profitable new business.
The UK Life division focuses on annuities, equity release and protection products.
The Group is a leading provider within each of these three lines, evidenced by a strong franchise and leading market share positions. Aviva-branded products are currently ranked: number one in individual annuities1 , number two in group protection2 and number two in individual protection3 . Across these lines, the Group has a full suite of capabilities, including data analytics, underwriting, asset-liability management, scale efficiencies and access to Aviva Investors' solutions.
Europe Life
The Issuer's Europe life division offers a range of insurance savings, investment and protection products to customers who want to make the most of their money, plan for the future and protect against the unexpected. The Group operates across five countries, including France, Italy, Poland, Ireland and Turkey and as at year end 2019 had eight million customers.Europe Life has diverse distribution and focuses on maintaining a capital efficient product mix. The Group's focus in this division is to continue to generate sustainable growth, while actively managing the low interest rate environment. The Group will achieve this by transforming the product mix from guaranteed savings towards capital light products, expanding and investing in the distribution channels, focusing on the fundamentals of insurance to drive operational efficiencies and leveraging expertise and technology from across the Group.
1 Company Reporting, H1 2019.
2 Company Reporting, H1 2019.
3 SwissRe Group Watch Report 2019.
Europe Life offers all of the life product types noted in Section 4, except from equity release.
The Europe Life division holdsseveral strong market positions, including number two in Poland, number four in Ireland and number five in Italy.4 The Group has also grown policyholder reserves to £120 billion at year end 2019 across the division.
Asia Life includes businesses in Singapore, China, India, Vietnam and Hong Kong. The business in Singapore contributed 77 per cent. to Asia Life's total value of new business in financial year 2019. In China, the Group's joint venture company in partnership with COFCO, Aviva-Cofco Life Insurance Co. Ltd, continues to deliver strong growth, especially in the agency and broker channels, alongside margin expansion. The Group plansto invest further and extend these competitive advantages and continue to outperform peers in value creation and profit growth. In November 2019, the Group announced the sale of its stake in the Hong Kong joint venture, Blue, to its partner Hillhouse AV Holding Limited, subject to regulatory approval. The Group is also in discussions with partners in relation to the business in Vietnam. Asia Life will include the Group's business in Indonesia until the completion of the sale of PT Astra Aviva Life which is expected in quarter four of 2020.
In general Asia Life offers all of the life product types noted in Section 4, except from annuities and equity release.
In Singapore, the Group is a leader in the financial advisor channel, based on market share, and operates a profitable business offering protection and savings products. The Group's aim is to continue to grow market share and further extend its lead in the financial advisor and employee benefits segments with a broad customer footprint across private and public sectors.
The Group's General Insurance division helps protect customers from loss in the event of damage to their property or assets, or injury to themselves or others for which they are responsible. The Group offers a wide range of products to personal and business customers, including motor, home, travel and pet insurance, commercial property, liability and specialty covers such as classic car and boiler breakdown. The focus is on generating sustainable profitable growth through improving speed, simplicity and efficiency for customers. In the UK, the business has aligned UK Digital with UK General Insurance to help deliver this. The Group will also build on its leading insurance expertise to expand the commercial lines business whilst continuing to optimise potential in personal lines.
The General Insurance division offers a comprehensive set of products, as described in Section 4.
The Group provides general insurance at scale in the UK and Canada and has a significant European business operating in France, Ireland, Italy and Poland. The Group holds the number one market position in the UK, and number two in Canada and Ireland.5
Customers can buy the Group's products through a range of distribution and service channels, including:
4 Based on written premiums.
5 Based on written premiums.
The Issueris an industry leader in sustainability and sound environmental, social and governance ("ESG") practices. Aviva Investors was a founding signatory of the Carbon Disclosure Project in 2001 and the UN Principles for Responsible Investment in 2006. The Issuer became a founding signatory of Climatewise and Accounting for Sustainability Principlesin 2007 and a signatory of the UN's Net Zero Asset Alliance in November 2019. More details on the Issuer's ESG practices can be found in the Strategic Report 2019. A summary of the Issuer's ESG data is also available at https://www.aviva.com/social-purpose.
The Issuer is committed to supporting a low carbon economy that will improve the resilience of the economy, society and the financial system in line with the 2015 Paris Agreement target on climate change. The Issuer has invested £6 billion in green assets since 2015 (£3.8 billion in low carbon infrastructure, £2.2 billion in green and sustainable bonds). In 2019, Aviva Investors launched the European Equity Climate Transition Fund, which excludes investments in companies with exposure to high carbon fossil fuels and invests in companies that provide solutions for climate mitigation/adaptation or are orientating their business models to support the transition to a low carbon economy.
The Issuer has developed 'climate conscious' products across the Group, which reward customers for environmentally responsible actions and provide an element of adaptation/resilience or additional cover for those customers at risk of the extreme weather impact of climate change. Last year, the Issuer confirmed it would stop underwriting insurance products for fossil fuel power generation worldwide and has recently launched a whole lifecycle insurance for renewable energy companies. The Issuer continues to reduce the environmental impact of its claims process and implements changes which benefit the customer and minimise the amount of waste to landfill or recycling.
The Issuer's operations havebeen carbon neutral since 2006. Since 2010, the Issuer has reduced carbon emissions from day-to-day operations by 66 per cent. beating its 2020 target of a 50 per cent.reduction and making strong progress to its 70 per cent. reduction by 2030 target.
The Issuer has built a strong system of governance, with effective and robust controls. In 2019, the Senior Management Function's Statements of Responsibilities was updated in line with the PRA's Supervisory Statement 3/19. The regulated entities' Chief Risk Officers ("CROs") are responsible for ensuring that climate-related risks and opportunities are identified, monitored and managed through the Group's risk management framework and in line with its risk appetite. The Group Chief Risk Officer (the "Group CRO") is responsible for overseeing, at Group level, the embedding of the risk management framework. To support the CROs in meeting regulatory expectations, the Group has initiated a group-wide climate-related risks and opportunities project, with the Group CRO acting as the executive sponsor.The Group has established a senior level steering committee to oversee and coordinate the progression of environmental risk management into all corners of its business, from investment to product design and customer claims.
Having achieved the targets set as part of its 2015 strategic response to climate change, this year the Group is widening the scope of its climate strategy from primarily focusing on investments, to create a broader, joined-up four-pillar approach covering investments, insurance, operations and influence.
The Issuer fully endorses the recommendations of the Financial Stability Board's Taskforce on Climate -related Financial Disclosures ("TCFD") (the TCFD is available online at https://www.fsb-tcfd.org/). The Issuer's latest "Climate-related financial disclosure 2019 report" is available online at www.aviva.com/TCFD.
Social
In the UK, the Issuer plays a significant role in its communities, including as a major employer and a long-term responsible investor. The Issuer's community activities include a strategic partnership with the British Red Cross and community investment directed through the Aviva Community Fund and the Aviva Foundation. In additio n, every UK employee is granted volunteering leave every year. In 2019 the Issuersupported over 2000 community projects, helping over 1.2 million people. During the COVID-19 pandemic, in the UK, the Group has extended coverage on motor policies for NHS employees to enable them to get back on the road quickly, regardless of the level of cover they purchased and free enhanced personal belongings cover for home contents customers who are NHS workers if their belongings are lost, damaged or stolen while working/commuting.The Issuer's policy extensions for COVID-19 have all been made for an initial three month period.
Diversity and Inclusion are key to the Issuer being a sustainable, successful business.
At the end of 2019, the Group had 31 per cent. female leaders. This has been achieved through targeted female development programmes, diverse short lists and a leadership team committed to change. In the UK, the Group's mean and median gender pay gap and gender bonus gaps have all reduced marginally compared to the end of 2017 and 2018. The Issuer is committed to driving long term change and continue to focus on recruitment, progression and retention.
The Issuer is also committed to improving ethnic diversity representation within the employee population and has launched an Ethnic Minority Leadership programme as well as sponsoring Uncovering Different Women, a report highlighting ethnic minorities in female resource groups and networks.
The Board considers it crucial that the Group maintains a reputation for high standards of business conduct. The Board is responsible for setting, monitoring and upholding the culture, values, standards, ethics, brand and reputation of the company to ensure that its obligations to its shareholders, employees, customers and others are met. Management drives the embedding of the desired culture throughout the organisation. The Board monitors adherence to the Group's policies and compliance with local corporate governance requirements across the Group and is committed to acting where the Group's businesses fail to act in the manner expected of them.
The Board is also focussed on the wider social context within which the Group's businesses operate, including those issues related to climate change, good governance and business ethics including anti-bribery and anti-corruption programmes, human rights and anti-modern slavery. More details can be found in the 'Corporate responsibility' section of the Strategic Report 2019.
The following chart shows, in simplified form, the organisational structure of the Group as at 1 May 2020:
Note: Intermediate holding companies between operating businesses and AGH not shown.
As at 30 April2020 (being the latest practicable date prior to the publication of this Prospectus) the Group's rating from Standard and Poor's is AA-(very strong) with a Stable outlook; Aa3 (good) with a Stable outlook from Moody's; AA- (very strong) with a Stable outlook from Fitch Ratings; and A (excellent) with a Stable outlook from A.M. Best.
On 8 April 2020 the Issuer made an announcement via the Regulatory News Service (RNS) which stated that the Issuer's Board of Directors had agreed to withdraw its recommendation to pay the 2019 final dividend to ordinary shareholders in June 2020 in light of the significant uncertainties presented by the COVID-19 pandemic. The Board considers that it is prudent to suspend dividend payments at this time, and expects to reconsider any distributions to ordinary shareholders in the fourth quarter of 2020. By retaining the final dividend, the estimated Group solvency capital ratio increased to approximately 182 per cent. as of 13 March 2020. The estimate does not allow for any increase in insurance claims or changes in experience or assumptions that may arise from COVID-19. It remains too early to quantify the impact of COVID-19 on claims expenses in the Group's life and general insurance businesses, and the potential effect of capital markets and economic trends on the Group's results.
The following is a list of directors of the Issuer and their principal directorships (if any) performed outside the Group which are, or may be, significant with respect to the Issuer, as at 1 May 2020. The business address of each of the directors referred to below is at St Helen's, 1 Undershaft, London EC3P 3DQ.
Sir Adrian Montague will step down as Chairman of the Board of Directors once a successor has been appointed. The Board has initiated a process for the appointment of a successor.
| Name | Responsibilities in relation to the Issuer |
Other significant directorships |
|---|---|---|
| Sir Adrian Alastair | Chairman | The Manchester Airports Group plc (Chairman) |
| Montague | Cadent Gas Ltd (Chairman) | |
| Advisory Council of TheCityUK (Chair) | ||
| Commonwealth War Graves Foundation (Trustee) | ||
| Maurice Tulloch | Group Chief Executive | Pool Reinsurance Company Ltd (Non-Executive Director) |
| Officer | Insurance Development Forum | |
| Geneva Association | ||
| Jason Windsor | Chief Financial Officer | N/A |
| Amanda Blanc | Independent Non | Welsh Rugby Union (Non-Executive Director) |
| Executive Director, | Professional Game (Chair) | |
| Chair of the Customer, Conduct and Reputation Committee |
||
| Patricia Anne Cross | Independent Non | Commonwealth Superannuation Corporation (Chairman) |
| Executive Director | Australian Indigenous Education Foundation (Ambassador) | |
| George Culmer | Senior Independent Non-Executive Director |
Rolls Royce Plc (Non-Executive Director) |
| Patrick Flynn | Independent Non Executive Director |
Royal Bank of Scotland (Non-Executive Director) |
| Belén Romana García | Independent Non | Banco Santander (Non-Executive Director) |
| Executive Director | Foundation Rafael del Pino | |
| Digital Future Society (Co-Chair) |
| Name | Responsibilities in relation to the Issuer |
Other significant directorships |
|---|---|---|
| Michael Philip Mire | Independent Non Executive Director |
HM Land Registry (Chairman) |
| Department of Health and Social Care (Non – Executive Director) |
||
| Lazard (Senior Advisor) | ||
| Kirstine Cooper | Group General Counsel and Company Secretary |
Royal Opera House (Trustee) |
| HM Land Registry (Non-Executive Director) |
There are no potential conflicts of interest between the duties to the Issuer of the persons listed under "Directors of the Issuer" above and their private interests or other duties.
The comments below are of a general nature and are based on the Issuer's understanding of current UK law, as applied in England & Wales and H.M. Revenue & Customs practice (which may or may not be binding on H.M. Revenue & Customs)relating to certain aspects ofUK taxation of interest and are subject to changes therein or thereof, possibly with retrospective effect, in each case as at the latest practicable date before the date of this Prospectus; they deal only with the question of whether payments of interest under the Notes and Coupons may be made without withholding or deduction for or on account of UK income tax and with some additional points regarding the potential impact of residence on taxation by direct assessment and do not deal with other UK tax consequences which might arise from holding Notes or Coupons. They are not exhaustive and do not necessarily apply where the income is deemed for tax purposes to be the income of any other person. They relate only to the position of persons who are the absolute beneficial owners of their Notes and Coupons and hold their Notes and Coupons as investors, and may not apply to certain classes of persons such as dealers, persons connected with the Issuer or certain professional investors, to whom special rules may apply. Prospective Noteholders should be aware that the particular terms of issue of any series of Notes as specified in the relevant Final Terms or Pricing Supplement may affect the UK tax treatment of that and any other series of Notes. These comments do not purport to constitute legal or tax advice. Any Noteholders who may be subject to tax in a jurisdiction other than the UK (in particular, in any jurisdiction where such Noteholders are resident), or are in any doubt as to their own tax position, should consult their professional advisers.
The comments below are of a general nature and are based on the Issuer's understanding of FATCA (as defined below), the IGA (as defined below) and current UK and U.S. law and practice relating to FATCA and the IGA, and are subject to changes therein or thereof, possibly with retrospective effect. These comments are not exhaustive and do not purport to constitute legal or tax advice. Any Noteholders in any doubt as to the application of FATCA, the IGA or any other relevant law or practice (whether in the UK, the U.S. or elsewhere) should consult their professional advisers.
Pursuant to certain provisions of the U.S. Internal Revenue Code of 1986, commonly known as FATCA, a " foreign financial institution" (as defined by FATCA) may be required to withhold on certain payments it makes ("foreign passthru payments") to persons that fail to meet certain certification, reporting, or related requirements. The UK has entered into an intergovernmental agreement with the U.S. to implement FATCA (the "IGA"), which modifies the way in which FATCA applies in the UK. Under the provisions of the IGA as currently in effect, a foreign financial institution in the UK would generally not be required to withhold under FATCA from payments that it makes. Even if withholding would be required pursuant to FATCA or an IGA with respect to payments on instruments such as the Notes, proposed regulations have been issued that provide that such withholding would not apply to foreign passthru payments prior to the date that is two years after the date on which final regulations defining "foreign passthru payments" are published in the U.S. Federal Register. In the preamble to these proposed regulations, the U.S. Treasury Department indicated that taxpayers may rely on these proposed regulations until the issuance of final regulations. Additionally, Notes that are not treated as equity for U.S. federal income tax purposes and have a fixed term that are issued on or prior to the date that is six months after the date on which final regulations defining "foreign passthru payments" are filed with the U.S. Federal Register generally would be "grandfathered" for purposes of FATCA withholding on foreign passthru payments unless materially modified after such date (including by reason of a substitution of the Issuer). However, if additional notes that are not distinguishable from outstanding Notes are issued after the expiration of the grandfathering period and are subject to withholding under FATCA, then withholding agents may treat all such notes that cannot be distinguished from each other as subject to withholding under FATCA. Noteholdersshould consult their own tax advisors regarding how these rules may apply to their investment in the Notes.
Subject to the terms and on the conditions contained in a Dealer Agreement dated 1 May 2020 (the "Dealer Agreement") between the Issuer, the Permanent Dealers and the Arranger, the Notes will be offered on a continuous basis by the Issuer to the Permanent Dealers. However, the Issuer has reserved the right to sell Notes directly on its own behalf to Dealers that are not Permanent Dealers. The Notes may be resold at prevailing market prices, or at price s related thereto, at the time of such resale, as determined by the relevant Dealer. The Notes may also be sold by the Issuer through the Dealers, acting as agents of the Issuer. The Dealer Agreement also provides for Notes to be issued in syndicated Tranches that are jointly and severally underwritten by two or more Dealers.
The Issuer will pay each relevant Dealer a commission as agreed between them in respect of Notes subscribed by it. The Issuer has agreed to reimburse the Arranger for certain of its expenses incurred in connection with the establishment of the Programme and the Dealers for certain of their activities in connection with the Programme.
The Issuer has agreed to indemnify the Dealers against certain liabilities in connection with the offer and sale of the Notes. The Dealer Agreement entitles the Dealers to terminate any agreement that they make to subscribe Notes in certain circumstances prior to payment for such Notes being made to the Issuer.
Each Dealer has acknowledged, and each further Dealer under the Dealer Agreement will be required to acknowledge that the Notes have not been and will not be registered under the Securities Act, and the Notes may not be offered or sold within the U.S. or to, or for the account or benefit of, U.S. persons except in certain transactions exempt from the registration requirements of the Securities Act. Terms used in this paragraph have the meaning given to them by Regulation S under the Securities Act.
The Notes are subject to U.S. tax law requirements and may not be offered, sold or delivered within the U.S. or its possessions or to a U.S. person, 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 regulations thereunder.
Each Dealer has agreed that, and each further Dealer appointed under the Dealer Agreement will be required to agree that, except as permitted by the Dealer Agreement, it will not offer, sell or deliver the Notes (i) as part of its distribution at any time or (ii) otherwise until 40 days after the completion of the distribution of any identifiable tranche of which such Notes are a part, as determined, and certified to the Issuer, by the relevant Dealer, within the U.S. or to, or for the account or benefit of, U.S. persons, and it will have sent to each dealer to which it sells Notes during the distribution compliance period a confirmation or other notice setting forth the restrictions on offers and sales of the Notes within the U.S. or to, or for the account or benefit of, U.S. persons. Terms used in this paragraph have the meaning given to them by Regulation S under the Securities Act.
In addition, until 40 days after the commencement of the offering of any identifiable tranche of Notes, an offer or sale of Notes within the U.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.
Unless the Final Terms (or Pricing Supplement, as the case may be) in respect of any Notes specifies the "Prohibition of Sales to EEA and UKRetail Investors" as "Not Applicable", eachDealer 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 offerin g 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 EEA or in the UK. For the purposes of this provision:
If the Final Terms (or Pricing Supplement, as the case may be) in respect of any Notes specifies "Prohibition of Sales to EEA and UK Retail Investors" as "Not Applicable", in relation to each Member State of the European Economic Area or the United Kingdom, 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 Prospectus as completed by the Final Terms in relation thereto to the public in that MemberState or the United Kingdom except that it may make an offer of such Notes to the public in that Member State or the United Kingdom:
provided that no such offer of Notes 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 Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
For the purposes of this provision, the expression an "offer of Notes to the public" in relation to any Notes in any Member State or the United Kingdom means 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, warranted and agreed, and each further Dealer appointed under the Programme will be required to represent, warrant and agree, that:
Each Dealer has represented, warranted and agreed that:
(b) if such Canadian Purchaser is resident in a province or territory of Canada other than Ontario, such Canadian Purchaser must be an "accredited investor" as defined in section 1.1 of National Instrument 45- 106 – Prospectus Exemptions ("NI 45-106");
(c) if such Canadian Purchaser is resident in the Province of Ontario, such Canadian Purchaser must be an "accredited investor" as defined in Section 73.3(1) of the Securities Act (Ontario);
The offering of the Notes has not been registered with the Commissione Nazionale per le Societ à e la Borsa ("CONSOB") pursuant to Italian securities legislation and, accordingly, 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 distributed, and will not offer, sell or distribute any Notes or any copy of this Prospectus or any other document relating to the Notes in the Republic of Italy ("Italy") in an offer of securities to the public under the meaning of Article 2, letter (d) of Prospectus Regulation and/or Article 1, paragraph 1, letter t) of Legislative Decree no. 58 of 24 February 1998, as amended (the "Consolidated Financial Services Act"), except:
Moreover, and subject to the foregoing, any offer, sale or delivery of the Notes or distribution of copies of this Prospectus or any other document relating to the Notes in Italy under (a) or (b) above must be:
Any investor purchasing the Notes will be solely responsible for ensuring that any offer or resale of the Notes it purchased occurs in compliance with any applicable laws and regulations. This Prospectus and the information contained herein are intended only for the use of its recipient and are not to be distributed to any third party resident or located in Italy for any reason. No person resident or located in Italy other than the original recipients of this Prospectus may rely on it or its contents. In any event the Notes shall not be offered or sold to any individuals in Italy in either the primary or the secondary market.
Each of the Dealers has represented and agreed that it has only offered or sold and will only offer or sell, directly or indirectly, any Notes in France and it has only distributed or caused to be distributed and will only distribute or cause to be distributed in France, this Prospectus, the relevant Final Terms or any other offering material relating to the Notes to qualified investors (investisseurs qualifiés) as defined in Article 2(e) of the Prospectus Regulation.
This Prospectus, prepared in connection with the Notes to be issued under the Programme, has not been submitted to the clearance procedure of the French financial markets authority (Autorité des marchés financiers).
No prospectus or other disclosure document (as defined in the Corporations Act 2001 of Australia) ("Corporations Act") in relation to the Notes has been, or will be, lodged with the Australian Securities and Investments Commission ("ASIC").
Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it:
unless:
Each Dealer has represented and agreed and each further Dealer appointed under the Programme will be required to represent and agree thatit (a) will only offer or sell, directly or indirectly, Notes in Switzerland in compliance with all applicable laws and regulations in force in Switzerland and (b) will to the extent necessary, obtain any consent, approval or permission required, if any, for the offer or sale by it of Notes under the laws and regulations in force in Switzerland.
Only the relevant Final Terms for the offering of Notes in Switzerland together with this Prospectus (including any supplement thereto at the relevant time), which together constitute the prospectus for such Notes within the meaning of the Swiss Financial Services Act (as amended (the "FinSA")), may be used in the context of a public offer in Switzerland. Each Dealer has therefore represented and agreed that the relevant Final Terms and th is Prospectus (including any supplement thereto at the relevant time) shall be furnished to any potential purchaser in Switzerland upon request in such manner and at such times as shall be required by, and is in compliance with, the FinSA.
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 Act of Japan (Act No. 25 of 1948, as amended (the "FIEA")) and 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 or sell any Notes directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (as defined under Item 5, Paragraph 1, Article 6 of the Foreign Exchange and Foreign Trade Act (Act No. 228 of 1949, as amended)), or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the account or benefit of, a resident of Japan except pursuant to an exemption from registration requirements of, and otherwise in compliance with the FIEA and any other applicable laws, regulations and ministerial guidelines of Japan.
Each Dealer has acknowledged, and each further Dealer appointed under the Programme will be required to acknowledge, that the Prospectus has not been registered as a prospectus with the Monetary Authority of Singapore under the Securities and Futures Act, Chapter 289, of Singapore (the "SFA").
Accordingly, 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 or sold any Notes or caused the Notes to be made the subject of an invitation for subscription or purchase and will not offer or sell any Notes or cause the Notes to be made the subject of an invitation forsubscription or purchase, and has not circulated or distributed, nor will it circulate or distribute, this Prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Notes, whether directly or indirectly, to any person in Singapore other than:
Where the Notes are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
securities or securities-based derivatives contracts (each term as defined in Section 2(1) of the SFA) of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Notes pursuant to an offer made under Section 275 of the SFA except:
NOTIFICATION UNDER SECTION 309B(1) OF THE SECURITIES AND FUTURES ACT (CHAPTER 289) OF SINGAPORE, AS MODIFIED OR AMENDED FROM TIME TO TIME (THE "SFA") AND THE SECURITIES AND FUTURES (CAPITAL MARKETS PRODUCTS) REGULATIONS 2018 OF SINGAPORE (THE "CMP REGULATIONS 2018") – In connection with Section 309(B) of the SFA and the CMP Regulations 2018, unless otherwise specified before an offer of Notes, the Issuer has determined, and hereby notifies all persons (including all relevant persons as defined in Section 309A(1) of the SFA)), that all Notes issued or to be issued under the Programme are prescribed capital markets products (as defined in the CMP Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).
These selling restrictions may be modified by the agreement of the Issuer and the Dealers following a change in a relevant law, regulation or directive. Any such modification will be set out in the Final Terms issued in respect of the issue of Notes to which it relates or in a supplement to this Prospectus.
No action has been or will be taken in any country or any jurisdiction by the Dealers or the Issuer that would permit a public offering of any of the Notes, or possession or distribution of this Prospectus or any oth er offering or publicity material relating to any of the Notes, in any country or jurisdiction where action for that purpose is required. Each Dealer has agreed that it shall comply (to the best of its knowledge and belief, having made reasonable enquiries) with all applicable laws and regulations and directives in each jurisdiction in which it purchases, offers, sells or delivers any of the Notes or has in its possession or distributes the Prospectus or any such other material relating to any of the Notes, in all cases at its own expense. Each Dealer has also undertaken to ensure that no obligations are imposed on the Issuer or any other Dealer in any such jurisdiction as a result of any of the foregoing actions. The Issuer and the other Dealers will have no responsibility for, and each Dealer has agreed to obtain any consent, approval or permission required by it for, the acquisition, offer, sale or delivery by it of any of the Notes under the laws and regulations in force in any jurisdiction to which it is subject or in or from which it makes any acquisition, offer, sale or delivery. No Dealer has been authorised to make any representation or use any information in connection with the issue, subscription and sale of any of the Notes other than as contained or incorporated by reference in this Prospectus or any amendment or supplement to it.
The form of Final Terms that will be issued in respect of each Tranche, subject only to the deletion of non -applicable provisions, is set out below:
Final Terms dated [●]
under the £7,000,000,000
Euro Note Programme
[MIFID II PRODUCT GOVERNANCE/PROFESSIONAL INVESTORS AND ELIGIBLE COUNTERPARTIES ONLY TARGET MARKET – Solely for the purposes of [the/each] 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/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/s'] target market assessment) and determining appropriate distribution channels.]
[PROHIBITION OF SALES TO EEA AND UKRETAIL 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") or in the United Kingdom ("UK"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as amended ("MiFID II"); (ii) a customer within the meaning of Directive (EU) 2016/97 (the "Insurance Distribution 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 Regulation (EU) 2017/1129 (as amended, the "Prospectus Regulation"). 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 or in the UK has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA or in the UK may be unlawful under the PRIIPS Regulation.]
[NOTIFICATION UNDER SECTION 309B(1) OF THE SECURITIES AND FUTURES ACT (CHAPTER 289) OF SINGAPORE, AS MODIFIED OR AMENDED FROM TIME TO TIME (THE "SFA") AND THE SECURITIES AND FUTURES (CAPITAL MARKETS PRODUCTS) REGULATIONS 2018 OF SINGAPORE (THE "CMP REGULATIONS 2018") – In connection with Section 309(B) of the SFA and the CMP Regulations 2018, the Issuer has determined, and hereby notifies all persons (including all relevant persons as defined in Section 309A(1) of the SFA), that the Notes are [prescribed capital markets products] [capital markets products other than prescribed capital markets products] (as defined in the CMP Regulations 2018) and [are] [Excluded]/ [Specified] Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale and Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).] 6
Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions of the Senior Notes (the "Conditions") set forth in the Prospectus dated 1 May 2020 [and the supplemental Prospectus dated [●]] which [together] constitute[s] a base prospectus for the purposes of Regulation (EU) 2017/1129 (the "Prospectus Regulation"). This document constitutes the Final Terms of the Notes described herein for the purposes of the Prospectus Regulation and must be read in conjunction with such Prospectus [as so supplemented]in order to obtain all the relevant information. 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 Prospectus [as so supplemented]. [The Prospectus [and the supplemental Prospectus] [have] [has] been published on the website of the Regulatory News Service operated by the London Stock Exchange at http://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.]
[Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions of the Senior Notes (the "Conditions") contained in the Trust Deed dated [original date] and set forth in the Prospectus dated [original date] and incorporated by reference into the Prospectus dated [current date] and which are attached hereto. This document constitutes the Final Terms of the Notes described herein for the purposes of Regulation (EU) 2017/1129 (the "Prospectus Regulation") and must be read in conjunction with the Prospectus dated [current date] [and the supplemental Prospectus dated [●], which [together] constitute[s] a base prospectus for the purposes of the Prospectus Regulation. Full information on the Issuer and the offer of the Notes is only available on the basis of the
6 For any Notes to be offered to Singapore investors, the Issuer to consider whether it needs to re-classify the Notes pursuant to Section 309(B) of the SFA prior to launch of the offer.
combination of the Conditions, these Final Terms and the Prospectus dated [current date] [as so supplemented]. The Prospectus [and the supplemental Prospectus] [has] [have] been published on the website of the Regulatory News Service operated by the London Stock Exchange at http://www.londonstockexchange.com/exchange/news/marketnews/market-news-home.html.]
| 1 Issuer: Aviva plc 2 (i) Series Number: [●] (ii) Tranche Number: [●] 3 Specified Currency or Currencies: [●] 4 Aggregate Nominal Amount of Notes admitted to trading: [●] (i) Series: [●] (ii) Tranche: [●] 5 Issue Price: [●] per cent. of the Aggregate Nominal Amount [plus accrued interest from [●]] |
|
|---|---|
| 6 (i) Specified Denominations: [[●] and integral multiples of [●] in excess |
|
| thereof up to and including [●]. No Notes | |
| in definitive form will be issued with a | |
| denomination above [●]] | |
| (ii) Calculation Amount [●] |
|
| (Definitive Notes only): | |
| 7 (i) Issue Date: [●] (ii) Interest Commencement Date: [●] |
|
| 8 Maturity Date: [[●]/The Interest Payment Date falling in or |
|
| nearest to [●]] | |
| 9 Interest Basis: [[●] per cent. Fixed Rate/[●] month |
|
| [[LIBOR/EURIBOR/CDOR] +/-[●] per | |
| cent. Floating Rate]/ | |
| [Floating Rate: SONIA Linked Interest]/ | |
| [Floating Rate Compounded Daily SOFR | |
| Linked Interest Rate]/ [Floating Rate: | |
| Weighted Average SOFR Linked Interest Rate]/ [Zero Coupon] |
|
| 10 Change of Interest Basis [●] |
|
| 11 Redemption Basis [Redemption at par] |
|
| 12 Put/Call Options: [Investor Put] |
|
| [Issuer Call] | |
| 13 (i) Status of the Notes: Senior |
|
| (ii) [Date [Board] approval for issuance of [[●]/Not Applicable, save as discussed in |
|
| Notes obtained: Section 2 of the "General Information" |
|
| section in the Prospectus] | |
| PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE | |
| 14 Fixed Rate Note Provisions: [Applicable/Not Applicable] |
|
| (i) Rate[(s)] of Interest: [●] per cent. per annum [payable |
|
| [annually/semi | |
| annually/quarterly/monthly] in arrear] | |
| (ii) Interest Payment Date(s): [●] in each year [adjusted in accordance with paragraph 14(vii)/not adjusted] |
|
| (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: ["Actual/Actual"/"Actual/Actual – |
|
| ISDA"/"Actual/Actual Canadian | |
| Compound Method"/"Actual/365 (Fixed)"/"Actual/360"/"30/360"/"360/360" |
|
| /"Bond Basis"/"30E/360"/"Eurobond | |
| Basis"/"30E/360 (ISDA)"/"Actual/Actual – | |
| ICMA"] | |
| (vi) Determination Dates: [●] in each year |
|
| (vii) Business Day Convention: [Floating Rate Business Day Convention/Following Business Day |
| Form of Final Terms for Senior Notes | |||
|---|---|---|---|
| Day Convention/Preceding Business Day | |||
| Convention] | |||
| 15 | Floating Rate Note Provisions: | [Applicable/Not Applicable] | |
| (i) (ii) |
Interest Period(s): Interest Payment Dates: |
[●] [●] |
|
| (iii) | Business Day Convention: | [Floating Rate Business Day | |
| Convention/Following Business Day | |||
| Convention/Modified Following Business | |||
| Day Convention/Preceding Business Day | |||
| Convention] | |||
| (iv) | Additional Business Centre(s): | [●] | |
| (v) | Manner in which the Rate(s) of Interest is/are to be | [Screen Rate Determination/ISDA | |
| determined: (vi) |
Party responsible for calculating the Rate(s) of Interest | Determination] [●] |
|
| and Interest Amount(s) (if not the [Calculation Agent]): | |||
| (vii) | Screen Rate Determination: | [Offered quotation/Arithmetic mean of | |
| offered quotations] | |||
| - Reference Rate: | [●] month [LIBOR/EURIBOR/CDOR] | ||
| [SONIA] [[CompoundedDaily / Weighted | |||
| Average] SOFR] | |||
| - Interest Determination Date(s): | [●] | ||
| - Relevant Screen Page: - For the purposes of the "Observation Period" "p" |
[●] [[●] London Business Days] [Not |
||
| means: | Applicable] | ||
| (viii) | ISDA Determination: | ||
| - Floating Rate Option: | [●] | ||
| - Designated Maturity: | [●] | ||
| - Reset Date: | [●] | ||
| (ix) | Margin(s): | [+/-][●] per cent. per annum | |
| (x) | Minimum Rate of Interest: | [●] per cent. per annum | |
| (xi) (xii) |
Maximum Rate of Interest: Day Count Fraction: |
[●] per cent. per annum ["Actual/Actual"/"Actual/Actual – |
|
| ISDA"/"Actual/Actual Canadian | |||
| Compound Method"/"Actual/365 | |||
| (Fixed)"/"Actual/360"/"30/360"/"360/360" | |||
| /"Bond Basis"/"30E/360"/"Eurobond | |||
| Basis"/"30E/360 (ISDA)"/"Actual/Actual – | |||
| ICMA"] | |||
| 16 | Zero Coupon Note Provisions: | [Applicable/Not Applicable] | |
| (i) (ii) |
Amortisation Yield: Day Count Fraction: |
[●] per cent. per annum ["Actual/Actual"/"Actual/Actual – |
|
| ISDA"/"Actual/Actual Canadian | |||
| Compound Method"/"Actual/365 | |||
| (Fixed)"/"Actual/360"/"30/360"/"360/360" | |||
| /"Bond Basis"/"30E/360"/"Eurobond | |||
| Basis"/"30E/360 (ISDA)"/"Actual/Actual – | |||
| ICMA"] | |||
| PROVISIONS RELATING TO REDEMPTION | |||
| 17 | Call Option: (i) |
Optional Redemption Date(s): | [Applicable/Not Applicable] [●] |
| (ii) | Optional Redemption Amount(s) of each Note: | [●] per Calculation Amount [Condition | |
| 5(b) applies] | |||
| (iii) | If redeemable in part: | ||
| (a) Minimum Redemption Amount: |
[●] per Calculation Amount | ||
| (b) Maximum Redemption Amount: |
[●] per Calculation Amount | ||
| (iv) | Notice period: | [●] | |
| 18 | Put Option: | [Applicable/Not Applicable] | |
| (i) (ii) |
Optional Redemption Date(s): Optional Redemption Amount(s) of each Note and |
[●] [●] per Calculation Amount |
|
| method, if any, of calculation of such amount(s): | |||
| (iii) | Notice period: | [●] | |
| 19 | Early Redemption Amount | ||
| Early Redemption Amount(s) per Calculation Amount payable | [●] | ||
| on redemption for taxation reasons or on event of default or | |||
other early redemption:
21 Form of Notes: [Bearer Notes:
Applicable]
[Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes in the limited circumstances specified in the Permanent Global Note] [Temporary Global Note exchangeable for Definitive Notes on [●] days' notice] [Permanent Global Note exchangeable for Definitive Notes in the limited circumstances specified in the Permanent Global Note] [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)]].
[Not Applicable/[●]]
[Yes] [No] [As the Notes have more than 27 Coupons, Talons will be attached.]
27 U.S. selling restrictions: [Reg. S Compliance Category; TEFRA C/TEFRA D/TEFRA Not Applicable]
(If the Notes clearly do not constitute "packaged" products or the Notes do constitute "packaged" products and a key information document will be prepared, "Not Applicable" should be specified. If the Notes may constitute "packaged" products and no KID will be prepared, "Applicable" should be specified.)
[●] has been extracted from [●]. The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware, and is 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
| 1 LISTING |
|||
|---|---|---|---|
| Listing: | [London] | ||
| (i) | Admission to trading: | [Application has been made for the Notes to be admitted | |
| to trading on [the London Stock Exchange] with effect | |||
| from [●].] | |||
| (ii) | Estimate of total expenses related to | [●] | |
| admission to trading: | |||
| 2 | RATINGS | ||
| Ratings: | The Notes to be issued have been rated: | ||
| [S&P: [●]] | |||
| [Moody's: [●]] | |||
| [Fitch: [●]] | |||
| [Need to include a brief explanation of the meaning of the | |||
| ratings if this has previously been published by the rating | |||
| provider.] | |||
| (The above disclosure should reflect the rating allocated | |||
| to Notes of the type being issued under the Programme | |||
| generally or, where the issue has been specifically rated, | |||
| that rating.) | |||
| 3 | REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL EXPENSES | ||
| (i) | Reasons for the offer | (See [["Use of Proceeds"] in [Base] | |
| Prospectus/Give details]) | |||
| (ii) | Estimated net proceeds: | [●] | |
| [(iii) | Estimated total expenses: | [●]] | |
| 4 | [INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE [ISSUE/OFFER] | ||
| [[●]/"Save as discussed in ["Subscription and Sale"], so far as the Issuer is aware, no person involved in the | |||
| offer of the Notes has an interest material to the offer."] | |||
| 5 | [Fixed Rate Notes only – YIELD | ||
| Indication of yield: | [●] | ||
| The yield is calculated at the Issue Date on the basis of the | |||
| Issue Price. It is not an indication of future yield.] | |||
| 6 | OPERATIONAL INFORMATION | ||
| ISIN Code: | [●] | ||
| Common Code: | [●] |
Any clearing system(s) other than Euroclear Bank SA/NV and Clearstream Banking S.A. and the relevant identification number(s): Intended to be held in a manner which would allow Eurosystem eligibility:
[Not Applicable/[●]]
[Yes. Note that the designation "yes" simply means that the Notes are intended upon issue to 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,][include this text for registered notes] and does not necessarily mean that the Notes will be recognized 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 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,][include this text for registered notes] . Note that this does no necessarily mean that the Notes will then be recognised as eligible collateral Names and addresses of additional Paying Agent(s) (if any):
Relevant Benchmark[s] (Floating Rate Notes calculated by reference to benchmarks only):
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 Eurosystem eligibility criteria have been met.]]
[●]
[Amounts payable under the Notes will be calculated by reference to [specify benchmark (as this term is defined in the Benchmarks Regulation)] which is provided by [legal name of the benchmark administrator]. As at the date of these Final Terms, [legal name of the benchmark administrator] [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 Benchmarks Regulation.
[As far as the Issuer is aware, [specify benchmark (as this term is defined in the Benchmarks Regulation)] [does not fall within the scope of the Benchmarks Regulation/the transitional provisions in Article 51 of the Benchmarks Regulation apply]such that [legal name of the benchmark administrator] is not currently required to obtain authorisation or registration (or, if located outside the EU, recognition, endorsement or equivalence).]]
The form of Final Terms that will be issued in respect of each Tranche, subject only to the deletion of non -applicable provisions, is set out below:
Final Terms dated [●]
under the £7,000,000,000
Euro Note Programme
[MIFID II PRODUCT GOVERNANCE/PROFESSIONAL INVESTORS AND ELIGIBLE COUNTERPARTIES ONLY TARGET MARKET – Solely for the purposes of [the/each] 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/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/s'] target market assessment) and determining appropriate distribution channels.]
[PROHIBITION OF SALES TO EEA AND UKRETAIL 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") or in the United Kingdom ("UK"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); (ii) a customer within the meaning of Directive (EU) 2016/97 (the "Insurance Distribution 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 Regulation (EU) 2017/1129 (as amended, the "Prospectus Regulation"). 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 or in the UK has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA or in the UK may be unlawful under the PRIIPS Regulation.]
[NOTIFICATION UNDER SECTION 309B(1) OF THE SECURITIES AND FUTURES ACT (CHAPTER 289) OF SINGAPORE, AS MODIFIED OR AMENDED FROM TIME TO TIME (THE "SFA") AND THE SECURITIES AND FUTURES (CAPITAL MARKETS PRODUCTS) REGULATIONS 2018 OF SINGAPORE (THE "CMP REGULATIONS 2018") – In connection with Section 309(B) of the SFA and the CMP Regulations 2018, the Issuer has determined, and hereby notifies all persons (including all relevant persons as defined in Section 309A(1) of the SFA), that the Notes are [prescribed capital markets products] [capital markets products other than prescribed capital markets products] (as defined in the CMP Regulations 2018) and [are] [Excluded]/ [Specified] Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale and Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).]7
[Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions of the Tier 3 Notes (the "Conditions") set forth in the Prospectus dated 1 May 2020 [and the supplemental Prospectus dated [●]] which [together] constitute[s] a base prospectus for the purposes of Regulation (EU) 2017/1129 (the "Prospectus Regulation"). This document constitutes the Final Terms of the Notes described herein for the purposes of the Prospectus Regulation and must be read in conjunction with such Prospectus [as so supplemented]in order to obtain all the relevant information. 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 Prospectus [as so supplemented]. [The Prospectus [and the supplemental Prospectus] [have] [has] been published on the website of the Regulatory News Service operated by the London Stock Exchange at http://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.]
[Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions of the Tier 3 Notes (the "Conditions") contained in the Trust Deed dated [original date] and set forth in the Prospectus dated [original date] and incorporated by reference into the Prospectus dated [current date] and which are attached hereto.
7 For any Notes to be offered to Singapore investors, the Issuer to consider whether it needs to re-classify the Notes pursuant to Section 309(B) of the SFA prior to launch of the offer.
This document constitutes the Final Terms of the Notes described herein for the purposes of Regulation (EU) 2017/1129 (the "Prospectus Regulation") and must be read in conjunction with the Prospectus dated [current date] [and the supplemental Prospectus dated [●], which [together] constitute[s] a base prospectus for the purposes of the Prospectus Regulation. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of the Conditions, these Final Terms and the Prospectus dated [current date] [as so supplemented]. [The Prospectus [and the supplemental Prospectus] [has] [have] been published on the website of the Regulatory News Service operated by the London Stock Exchange at http://www.londonstockexchange.com/exch ange/news/marketnews/market-news-home.html.]
| 1 | Issuer: | Aviva plc | |
|---|---|---|---|
| 2 | (i) | Series Number: | [●] |
| (ii) | Tranche Number: | [●] | |
| 3 | Specified Currency or Currencies: | [●] | |
| 4 | Aggregate Nominal Amount of Notes admitted to trading: | [●] | |
| (i) | Series: | [●] | |
| (ii) | Tranche: | [●] | |
| 5 | Issue Price: | [●] per cent. of the Aggregate Nominal Amount [plus accrued interest from [●]] |
|
| 6 | (i) | Specified Denominations: | [[●] [and integral multiples of [●] in excess thereof up to and including [●]. No Notes in definitive form will be issued with a denomination above[●]] |
| (ii) | Calculation Amount (Definitive Notes only): | [●] | |
| 7 | (i) | Issue Date: | [●] |
| (ii) | Interest Commencement Date | [●] | |
| 8 | Maturity Date: | [[●]/The Interest Payment Date falling in or nearest to [●]]/[Not Applicable] |
|
| 9 | Interest Basis: | [[●] per cent. Fixed Rate]/ | |
| [●] month | |||
| [[LIBOR/EURIBOR/CDOR] +/-[●] per cent. Floating Rate]/ [Floating Rate: SONIA Linked Interest]/ [Floating Rate: Compounded Daily SOFR Linked Interest Rate]/ [Floating Rate Weighted Average SOFR Linked Interest Rate]/ |
|||
| [Fixed Rate Reset Notes]/ | |||
| [Fixed to Floating Rate Notes] | |||
| 10 | Redemption Basis: | [Redemption at par]/[Not Applicable] | |
| 11 | Change of Interest Basis: | [●]/[Fixed Rate Reset Notes]/[Fixed to Floating Rate Notes] |
|
| 12 | Put/Call Options: | [Issuer Call] | |
| 13 | (i) | Status of the Notes: | Tier 3 |
| (ii) | [Date [Board] approval for issuance of Notes obtained: | [[●]/Not Applicable, save as discussed in Section 2 of the "General Information" section in the Prospectus] |
|
| PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE | |||
| 14 | Fixed Rate Note and Fixed to Floating Rate Note Provisions: | [Applicable/Not Applicable/Applicable for the period from and including [●] to, but excluding, [●] (the "Fixed Rate End Date")] |
| (i) | Rate[(s)] of Interest: | Form of Final Terms for Tier 3 Notes [●] per cent. per annum [payable [annually/semi annually/quarterly/monthly] in arrear] |
|
|---|---|---|---|
| (ii) | Interest Payment Date(s): | [●] in each year [adjusted in accordance with paragraph 14(vii)/not adjusted]/[commencing on [●] to and including [●]] |
|
| (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: | [["Actual/Actual"/ "Actual/Actual - ISDA"/ "Actual/Actual Canadian Compound Method"/"Actual/365 (Fixed)"/ "Actual/360"/ "30/360"/ "360/ 360"/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/ "Actual/Actual -ICMA"] |
|
| (vi) | Determination Dates: | [●] in each year | |
| (vii) | Business Day Convention: | [Floating Rate Business Day Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention] |
|
| 15 | Fixed Rate Reset Note Provisions: | [Applicable/Not Applicable] | |
| (i) | Initial Rate of Interest: | [●] per cent. per annum [payable [annually/semi annually/quarterly/monthly] in arrear] |
|
| (ii) | Reset Rate: | [Mid-Swap Rate] [Benchmark Gilt Rate] [Reference Bond Rate] [CMT Rate] |
|
| (iii) | Reset Margin: | [+/-][●] per cent. per annum | |
| (iv) | Interest Payment Date(s): | [●] in each year | |
| (v) | Fixed Coupon Amount[(s)]: | [●] per Calculation Amount | |
| (vi) | Broken Amount(s): | [●] per Calculation Amount payable on the Interest Payment Date falling [in/on] [●] |
|
| (vii) | First Reset Note Reset Date: | [●] | |
| (viii) | Anniversary Date(s): | [●] [and each corresponding day and month falling [●] years thereafter] |
|
| (ix) | Reset Rate Screen Page: | [[●]/Not Applicable] | |
| (x) | Mid-Swap Maturity: | [[●]/Not Applicable] | |
| (xi) | Day Count Fraction: | [["Actual/Actual"/"Actual/Actual ISDA"/ "Actual/Actual Canadian Compound Method"/ "Actual/365 (Fixed)"/ "Actual 360"/ "30/360"/ "360/ 360"/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/ "Actual/Actual - ICMA"] |
|
| (xii) | Reference Bond: | [[●]/Not Applicable] | |
| (xiii) | Benchmark Gilt: | [[●]/Not Applicable] | |
| (xiv) | U.S. Treasury Original Maturity: | [[●]/Not Applicable] |
16 Floating Rate Note and Fixed to Floating Rate Note [Applicable/Not Applicable/Applicable
for the period from and including the
| Provisions: | Fixed Rate End Date to, but excluding, [●]] |
||||
|---|---|---|---|---|---|
| (i) | Interest Period(s): | [●] | |||
| (ii) | Interest Payment Dates: | [●] | |||
| (iii) | Business Day Convention: | [Floating Rate Business Day Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention] |
|||
| (iv) | Additional Business Centre(s): | [●] | |||
| (v) | Manner in which the Rate(s) of Interest is/are to be determined: |
[Screen Rate Determination/ISDA Determination] |
|||
| (vi) | Party responsible for calculating the Rate(s) of Interest and Interest Amount(s) (if not the [Calculation Agent]): |
[●] | |||
| (vii) | Screen Rate Determination: | [Offered quotation/Arithmetic mean of offered quotations] |
|||
| - Reference Rate: | [●] month [LIBOR/EURIBOR/CDOR] [SONIA] [Compounded Daily/Weighted Average] SOFR] |
||||
| - Interest Determination Date(s): | [●] | ||||
| - Relevant Screen Page: | [●] | ||||
| - For the purposes of the "Observation Period", "p" means: |
[[●] London Business Days]/[Not Applicable] |
||||
| (viii) | ISDA Determination: | ||||
| - Floating Rate Option: | [●] | ||||
| - Designated Maturity: | [●] | ||||
| - Reset Date: | [●] | ||||
| (ix) | Margin(s): | [+/-][●] per cent. per annum | |||
| (x) | Minimum Rate of Interest: | [●] per cent. per annum | |||
| (xi) | Maximum Rate of Interest: | [●] per cent. per annum | |||
| (xii) | Day Count Fraction: | ["Actual/Actual" / "Actual/Actual – ISDA"/ "Actual/Actual Canadian Compound Method"/ "Actual/365 (Fixed)"/ "Actual 360"/ "30/360"/ "360/ 360"/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/ "Actual/Actual – ICMA"] |
|||
| 17 | Optional Interest Payment Date: | [Applicable/Not Applicable] | |||
| 18 | Compulsory Interest Payment Date: | [Applicable/Not Applicable] | |||
| 19 | Insolvent Insurer Winding-up Condition: | [Applicable/Not Applicable] | |||
| PROVISIONS RELATING TO REDEMPTION | |||||
| 20 | Right to Extend Maturity Date: | [Applicable/Not Applicable] [This is without prejudice to the mandatory redemption deferral provisions and other provisions contained in Condition 6, which shall apply to this issue of Notes.] [The Extended Maturity Date is [●].] |
|||
| 21 | Call Option: | [Applicable/Not Applicable] | |||
| (i) | Optional Redemption Date(s): | [●] | |||
| (ii) | Optional Redemption Amount(s) of each Note: | [●] per Calculation Amount |
Form of Final Terms for Tier 3 Notes
Form of Final Terms for Tier 3 Notes (iii) If redeemable in part: (a) Minimum Redemption Amount: [[●] per Calculation Amount]/[Not Applicable] (b) Maximum Redemption Amount: [[●] per Calculation Amount]/[Not Applicable] (iv) Notice period: [●] 22 Capital Disqualification Call: [Applicable/Not Applicable] 23 Rating Methodology Call: [Applicable/Not Applicable/Applicable. The Rating Methodology Event Commencement Date is [●]] 24 Rating Methodology Event First Call Date: [Not Applicable/Applicable. The Rating Methodology Event First Call Date is [●]] 25 Final Redemption Amount of each Note: [[●] per Calculation Amount]/[Not Applicable] 26 Special Redemption Price: (i) in respect of a Capital Disqualification Event redemption: [●] per Calculation Amount (ii) in respect of a Rating Methodology Event redemption: [●] per Calculation Amount 27 Unmatured Coupons to become void upon Early Redemption: [Yes/No/Not Applicable] GENERAL PROVISIONS APPLICABLE TO THE NOTES 28 Form of Notes: [Bearer Notes:
[Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes in the limited circumstances specified in the Permanent Global Note]
[Temporary Global Note exchangeable for Definitive Notes on [●]days' notice]
[Permanent Global Note exchangeable for Definitive Notes in the limited circumstances specified in the Permanent Global Note]]
[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)]]
| 29 | Global Certificates (Registered Notes): | [Yes] [No] |
|---|---|---|
| 30 | Additional Financial Centre(s) or other special provisions relating to Payment Dates: |
[Not Applicable/[●]] |
| 31 | Talons for future Coupons to be attached to Definitive Notes (and dates on which such Talons mature): |
[Yes] [No] [As the Notes have more than 27 Coupons, Talons will be attached.] |
| DISTRIBUTION | ||
| 32 | U.S. selling restrictions: | [Reg. S Compliance Category; TEFRA C/TEFRA D/TEFRA Not Applicable] |
| 33 | Additional selling restrictions: | [Not Applicable] |
Form of Final Terms for Tier 3 Notes
(If the Notes clearly do not constitute "packaged" products or the Notes do constitute "packaged" products and a key information document will be prepared, "Not Applicable" should be specified. If the Notes may constitute "packaged" products and no KID will be prepared, "Applicable" should be specified.)
[●] has been extracted from [●]. The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware, and is 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
(ii) Admission to trading: [Application has been made for the Notes to be admitted to trading on [the London Stock Exchange] with effect from [●].]
2 RATINGS Ratings:The Notes to be issued have been rated:
[S&P: [●]]
[Moody's: [●]]
[Fitch: [●]]
[Need to include a brief explanation of the meaning of the ratings if this has previously been published by the rating provider.]
(The above disclosure should reflect the rating allocated to Notes of the type being issued under the Programme generally or, where the issue has been specifically rated, that rating.)
[[●]/ "Save as discussed in ["Subscription and Sale"], so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer."]
Indication of yield: [●]
The yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.]
ISIN Code: [●]
Common Code: [●]
Any clearing system(s) other than Euroclear Bank SA/NV and Clearstream Banking S.A. and the relevant identification number(s):
Names and addresses of additional Paying Agent(s) (if any): [●]
Relevant Benchmark[s] (Fixed to Floating Rate Notes, Fixed Rate Reset Notes or Floating Rate Notes calculated by reference to benchmarks only):
[Not Applicable/[●]]
[Amounts payable under the Notes will be calculated by reference to [specify benchmark (as this term is defined in the Benchmarks Regulation)] which is provided by [legal name of the benchmark administrator]. As at the date of these Final Terms, [legal name
Form of Final Terms for Tier 3 Notes of the benchmark administrator] [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 Benchmarks Regulation.
[As far as the Issuer is aware, [specify benchmark (as this term is defined in the Benchmarks Regulation)] [does not fall within the scope of the Benchmarks Regulation/the transitional provisions in Article 51 of the Benchmarks Regulation apply]such that [legal name of the benchmark administrator] is not currently required to obtain authorisation or registration (or, if located outside the EU, recognition, endorsement or equivalence).]]
The form of Final Terms that will be issued in respect of each Tranche, subject only to the deletion of non -applicable provisions, is set out below:
Final Terms dated [●]
under the £7,000,000,000
Euro Note Programme
[MIFID II PRODUCT GOVERNANCE/PROFESSIONAL INVESTORS AND ELIGIBLE COUNTERPARTIES ONLY TARGET MARKET – Solely for the purposes of [the/each] 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/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/s'] target market assessment) and determining appropriate distribution channels.]
[PROHIBITION OF SALES TO EEA AND UK 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") or in the United Kingdom ("UK"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); (ii) a customer within the meaning of Directive (EU) 2016/97 (the "Insurance Distribution 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 Regulation (EU) 2017/1129 (the "Prospectus Regulation"). 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 or in the UK has been prepared and therefore offering or selling the Notes or otherwise making them available to an y retail investor in the EEA or in the UK may be unlawful under the PRIIPS Regulation.]
[NOTIFICATION UNDER SECTION 309B(1) OF THE SECURITIES AND FUTURES ACT (CHAPTER 289) OF SINGAPORE, AS MODIFIED OR AMENDED FROM TIME TO TIME (THE "SFA") AND THE SECURITIES AND FUTURES (CAPITAL MARKETS PRODUCTS) REGULATIONS 2018 OF SINGAPORE (THE "CMP REGULATIONS 2018") – In connection with Section 309(B) of the SFA and the CMP Regulations 2018, the Issuer has determined, and hereby notifies all persons (including all relevant persons as defined in Section 309A(1) of the SFA), that the Notes are [prescribed capital markets products] [capital markets products other than prescribed capital market products] (as defined in the CMP Regulations 2018) and [are] [Excluded]/[Specified] Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale and Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).]8
[Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions of the Tier 2 Notes (the "Conditions") set forth in the Prospectus dated 1 May 2020 [and the supplemental Prospectus dated [●]] which [together] constitute[s] a base prospectus for the purposes of Regulation (EU) 2017/1129 (the "Prospectus Regulation"). This document constitutes the Final Terms of the Notes described herein for the purposes of the Prospectus Regulation and must be read in conjunction with such Prospectus [as so supplemented] in order to obtain all relevant information. 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 Prospectus [as so supplemented]. The Prospectus has been published on the website of the Regulatory News Service operated by the London Stock Exchange at http://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.]
[Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions of the Tier 2 Notes (the "Conditions") contained in the Trust Deed dated [original date] and set forth in the Prospectus dated [original date] and incorporated by reference into the Prospectus dated [current date] and which are attached hereto. This document constitutes the Final Terms of the Notes described herein for the purposes of Regulation (EU) 2017/1129 (the "Prospectus Regulation") and must be read in conjunction with the Prospectus dated [●] 2020 [and the
8 For any Notes to be offered to Singapore investors, the Issuer to consider whether it needs to re-classify the Notes pursuant to section 309(B) of the SFA prior to launch of the offer.
supplemental Prospectus dated [●], which [together] constitute[s] a base prospectus for the purposes of the Prospectus Regulation. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of the Conditions, these Final Terms and the Prospectus dated [current date] [as so supplemented]. The Prospectus has been published on the website of the Regulatory News Service operated by th e London Stock Exchange at http://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.]
| 1 | Issuer: | Aviva plc | ||
|---|---|---|---|---|
| 2 | (i) | Series Number: | [●] | |
| (ii) | Tranche Number: | [●] | ||
| 3 | Specified Currency or Currencies: | [●] | ||
| 4 | Aggregate Nominal Amount of Notes admitted to trading: | [●] | ||
| (i) | Series: | [●] | ||
| (ii) | Tranche: | [●] | ||
| 5 | Issue Price: | [●] per cent. of the Aggregate Nominal Amount [plus accrued interest from [●]] |
||
| 6 | (i) | Specified Denominations: | [[●] [and integral multiples of [●] in excess thereof up to and including [●]. No Notes in definitive form will be issued with a denomination above[●]] |
|
| (ii) | Calculation Amount (Definitive Notes only): | [●] | ||
| 7 | (i) | Issue Date: | [●] | |
| (ii) | Interest Commencement Date: | [●] | ||
| 8 | Maturity Date: | [[●]/The Interest Payment Date falling in or nearest to [●]]/[Not Applicable] |
||
| 9 | Interest Basis: | [[●]per cent. Fixed Rate]/ | ||
| [●] month | ||||
| [[LIBOR/EURIBOR/CDOR] +/-[●] per cent. Floating Rate] /[Floating Rate: SONIA Linked Interest] / [Floating Rate: Compounded Daily SOFR Linked Interest Rate]/ [Floating Rate Weighted Average SOFR Linked Interest Rate]/ |
||||
| [Fixed Rate Reset Notes]/ | ||||
| [Fixed to Floating Rate Notes] | ||||
| 10 | Redemption Basis: | [Redemption at par]/[Not Applicable] | ||
| 11 | Change of Interest Basis: | [●]/[Fixed Rate Reset Notes]/[Fixed to Floating Rate Notes] |
||
| 12 | Put/Call Options: | [Issuer Call] | ||
| 13 | (i) | Status of the Notes: | Tier 2 | |
| (ii) | [Date [Board] approval for issuance of Notes obtained: | [[●]/Not Applicable, save as discussed in Section 2 of the "General Information" section in the Prospectus] |
||
| PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE | ||||
| 14 | Fixed Rate Note and Fixed to Floating Rate Note Provisions: | [Applicable/Not Applicable/Applicable for the period from and including [●] to, but excluding, [●] (the "Fixed Rate End Date")] |
||
| (i) | Rate[(s)] of Interest: | [●] per cent. per annum [payable [annually/semi annually/quarterly/monthly] in arrear] |
||
| (ii) | Interest Payment Date(s): | [●] in each year [adjusted in accordance |
| (iii) | Fixed Coupon Amount[(s)]: | [●] per Calculation Amount |
|---|---|---|
15 Fixed Rate Reset Note Provisions: [Applicable/Not Applicable]
(iv) Interest Payment Date(s): [●] in each year
(v) Fixed Coupon Amount[(s)]: [●] per Calculation Amount
(vii) First Reset Note Reset Date: [●]
(ix) Reset Rate Screen Page: [[●]/Not Applicable]
(x) Mid-Swap Maturity: [[●]/Not Applicable]
(xiii) Benchmark Gilt: [[●]/Not Applicable]
(i) Interest Period(s): [●]
Form of Final Terms for Tier 2 Notes with paragraph 14(vii)/not adjusted]/[commencing on [●] to and including [●]]
(iv) Broken Amount(s): [[●] per Calculation Amount payable on the Interest Payment Date falling [in/on] [●]]/[●]
(v) Day Count Fraction: [["Actual/Actual"/ "Actual/Actual - ISDA"/ "Actual/Actual Canadian Compound Method"/ "Actual/365 (Fixed)"/ "Actual/360"/ "30/360"/ "360/ 360"/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/ "Actual/Actual - ICMA"]
(vii) Business Day Convention: [Floating Rate Business Day Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention]
(i) Initial Rate of Interest: [●] per cent. per annum [payable [annually/semi-
annually/quarterly/monthly] in arrear]
(ii) Reset Rate: [Mid-Swap Rate] [Benchmark Gilt Rate] [Reference Bond Rate] [CMT Rate]
(iii) Reset Margin: [+/-][●] per cent. per annum
(vi) Broken Amount(s): [●] per Calculation Amount payable on the Interest Payment Date falling [in/on] [●]
(viii) Anniversary Date(s): [●] [and each corresponding day and month falling [●] years thereafter]
(xi) Day Count Fraction: [["Actual/Actual"/ "Actual/Actual - ISDA"/ "Actual/Actual Canadian Compound Method"/ "Actual/365 (Fixed)"/ "Actual 360"/ "30/360"/ "360/ 360"/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/ "Actual/Actual - ICMA"]
(xii) Reference Bond: [[●]/Not Applicable]
[Applicable/Not Applicable/Applicable for the period from and including the Fixed Rate End Date to, but excluding, [●]]
| (ii) | Interest Payment Dates: | Form of Final Terms for Tier 2 Notes [●] |
|
|---|---|---|---|
| (iii) | Business Day Convention: | [Floating Rate Business Day Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention] |
|
| (iv) | Additional Business Centre(s): | [●] | |
| (v) | Manner in which the Rate(s) of Interest is/are to be determined: |
[Screen Rate Determination/ISDA Determination] |
|
| (vi) | Party responsible for calculating the Rate(s) of Interest and Interest Amount(s) (if not the [Calculation Agent]): |
[●] | |
| (vii) | Screen Rate Determination: | [Offered quotation/Arithmetic mean of offered quotations] |
|
| - Reference Rate: | [●] month [LIBOR/EURIBOR/CDOR] [SONIA] [Compounded Daily/Weighted Average] SOFR] |
||
| - Interest Determination Date(s): | [●] | ||
| - Relevant Screen Page: | [●] | ||
| - For the purposes of the "Observation Period", "p" means: |
[[●] London Business Days] [Not Applicable] |
||
| (viii) | ISDA Determination: | ||
| - Floating Rate Option: | [●] | ||
| - Designated Maturity: | [●] | ||
| - Reset Date: | [●] | ||
| (ix) | Margin(s): | [+/-][●] per cent. per annum | |
| (x) | Minimum Rate of Interest: | [●] per cent. per annum | |
| (xi) | Maximum Rate of Interest: | [●] per cent. per annum | |
| (xii) | Day Count Fraction: | ["Actual/Actual" / "Actual/Actual - ISDA" / "Actual/Actual Canadian Compound Method" / "Actual/365 (Fixed)"/ "Actual 360"/ "30/360"/ "360/ 360"/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/ "Actual/Actual - ICMA"] |
|
| 17 | Optional Interest Payment Date: | [Applicable/Not Applicable] | |
| 18 | Compulsory Interest Payment Date: | [Applicable/Not Applicable] | |
| 19 | Insolvent Insurer Winding-up Condition: | [Applicable/Not Applicable] | |
| PROVISIONS RELATING TO REDEMPTION | |||
| 20 | Right to Extend Maturity Date: | [Applicable/Not Applicable] [This is without prejudice to the mandatory redemption deferral provisions and other provisions contained in Condition 6, which shall apply to this issue of Notes.] [The Extended Maturity Date is [●].] |
|
| 21 | Call Option: | [Applicable/Not Applicable] | |
| (i) | Optional Redemption Date(s): | [●] | |
| (ii) | Optional Redemption Amount(s) of each Note: | [●] per Calculation Amount | |
| (iii) | If redeemable in part: | ||
| (a) Minimum Redemption Amount: |
[[●] per Calculation Amount]/[Not Applicable] |
| (b) Maximum Redemption Amount: |
Form of Final Terms for Tier 2 Notes [[●] per Calculation Amount]/[Not Applicable] |
|
|---|---|---|
| (iv) Notice period: |
[●] | |
| 22 | Capital Disqualification Call: | [Applicable/Not Applicable] |
| 23 | Rating Methodology Call: | [Applicable/Not Applicable/Applicable. The Rating Methodology Event Commencement Date is [●]] |
| 24 | Rating Methodology Event First Call Date: | [Not Applicable/Applicable. The Rating Methodology Event First Call Date is [●]] |
| 25 | Final Redemption Amount of each Note: | [[●] per Calculation Amount]/[Not Applicable] |
| 26 | Special Redemption Price: | |
| (i) in respect of a Capital Disqualification Event redemption: |
[●] per Calculation Amount | |
| (ii) in respect of a Rating Methodology Event redemption: |
[●] per Calculation Amount | |
| 27 | Unmatured Coupons to become void upon Early Redemption: |
[Yes/No/Not Applicable] |
| GENERAL PROVISIONS APPLICABLE TO THE NOTES | ||
| 28 | Form of Notes: | [Bearer Notes: |
| [Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes in the limited circumstances specified in the Permanent Global Note] |
||
| [Temporary Global Note exchangeable for Definitive Notes on [●]days' notice] |
||
| [Permanent Global Note exchangeable for Definitive Notes in the limited circumstances specified in the Permanent Global Note]] |
||
| [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)]] |
| 29 | Global Certificates (Registered Notes): | [Yes] [No] |
|---|---|---|
| 30 | Additional Financial Centre(s) or other special provisions relating to Payment Dates: |
[Not Applicable/[●]] |
| 31 | Talons for future Coupons to be attached to Definitive Notes (and dates on which such Talons mature): |
[Yes] [No] [As the Notes have more than 27 Coupons, Talons will be attached.] |
| DISTRIBUTION | ||
| 32 | U.S. selling restrictions: | [Reg. S Compliance Category; TEFRA C/TEFRA D/TEFRA Not Applicable] |
| 33 | Additional selling restrictions: | [Not Applicable] |
| 34 | Stabilisation Manager(s): | [Not Applicable/[●]] |
| 35 | Prohibition of Sales to EEA and UK Retail Investors: | [Applicable/Not Applicable] |
Form of Final Terms for Tier 2 Notes (If the Notes clearly do not constitute "packaged" products or the Notes do constitute "packaged" products and a key information document will be prepared, "Not Applicable" should be specified. If the Notes may constitute "packaged" products and no KID will be prepared, "Applicable" should be specified.)
[●] has been extracted from [●]. The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware, and is 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
(ii) Admission to trading: [Application has been made for the Notes to be admitted to trading on [the London Stock Exchange] with effect from [●].]
2 RATINGS Ratings:The Notes to be issued have been rated:
[S&P: [●]]
[Moody's: [●]]
[Fitch: [●]]
[Need to include a brief explanation of the meaning of the ratings if this has previously been published by the rating provider.]
(The above disclosure should reflect the rating allocated to Notes of the type being issued under the Programme generally or, where the issue has been specifically rated, that rating.)
Prospectus/Give details])
[[●]/ "Save as discussed in ["Subscription and Sale"], so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer."]
Indication of yield: [●]
The yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.]
| ISIN Code: | [●] |
|---|---|
| Common Code: | [●] |
Any clearing system(s) other than Euroclear Bank SA/NV and Clearstream Banking S.A. and the relevant identification number(s):
Names and addresses of additional Paying Agent(s) (if any): [●]
Relevant Benchmark[s] (Fixed to Floating Rate Notes, Fixed Rate Reset Notes or Floating Rate Notes calculated by reference to benchmarks only):
[Not Applicable/[●]]
[Amounts payable under the Notes will be calculated by reference to [specify benchmark (as this term is defined in the Benchmarks Regulation)] which is provided by [legal name of the benchmark administrator]. As at the
Form of Final Terms for Tier 2 Notes date of these Final Terms, [legal name of the benchmark administrator] [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 Benchmarks Regulation.
[As far as the Issuer is aware, [specify benchmark (as this term is defined in the Benchmarks Regulation)] [does not fall within the scope of the Benchmarks Regulation/the transitional provisions in Article 51 of the Benchmarks Regulation apply]such that [legal name of the benchmark administrator] is not currently required to obtain authorisation or registration (or, if located outside the EU, recognition, endorsement or equivalence).]]
No prospectus is required in accordance with Regulation (EU) 2017/1129, as amended or superseded, for the issue of the PR Exempt Notes described herein. The Financial Conduct Authority has neither approved nor reviewed information contained in this Pricing Supplement.
The form of Pricing Supplement that will be issued in respect of each Tranche, subject only to the deletion of non applicable provisions, is set out below:
Pricing Supplement dated [●]
Aviva plc
Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes]
under the £7,000,000,000 Euro Note Programme
[MIFID II PRODUCT GOVERNANCE/PROFESSIONAL INVESTORS AND ELIGIBLE COUNTERPARTIES ONLY TARGET MARKET – Solely for the purposes of [the/each] 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/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/s'] target market assessment) and determining appropriate distribution channels.]
[PROHIBITION OF SALES TO EEA AND UK RETAIL INVESTORS -- The Notes are not intendedto be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area ("EEA") or in the United Kingdom (the "UK"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); (ii) a customer within the meaning of Directive (EU) 2016/97 (the "Insurance Distribution 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 Regulation (EU) 2017/1129 (the "Prospectus Regulation"). 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 or in the UKhas been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA or in the UK may be unlawful under the PRIIPS Regulation.]
[NOTIFICATION UNDER SECTION 309B(1) OF THE SECURITIES AND FUTURES ACT (CHAPTER 289) OF SINGAPORE, AS MODIFIED OR AMENDED FROM TIME TO TIME (THE "SFA") AND THE SECURITIES AND FUTURES (CAPITAL MARKETS PRODUCTS) REGULATIONS 2018 OF SINGAPORE (THE "CMP REGULATIONS 2018") – In connection with Section 309(B) of the SFA and the CMP Regulations 2018, the Issuer has determined, and hereby notifies all persons (including all relevant persons as defined in Section 309A(1) of the SFA), that the Notes are [prescribed capital markets products] [capital markets products other than prescribed capital markets products] (as defined in the CMP Regulations 2018) and [are] [Excluded]/[Specified] Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale and Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).]9
Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions of the Senior Notes (the "Conditions") set forth in the Prospectus dated 1 May 2020[and the supplemental Prospectus dated [•]] (the "Prospectus"). Any reference in the Conditions to "relevant Final Terms" shall be deemed to include "relevant Pricing Supplement", where applicable.
This document constitutes the Pricing Supplement of the PR Exempt Notes described herein and must be read in conjunction with the Prospectus [as so supplemented]. Full information on the Issuer and the offer of the PR Exempt Notes is only available on the basis of the combination of this Pricing Supplement and the Prospectus [as so supplemented]. [The Prospectus [and the supplemental Prospectus] [is] [are] available for viewing at [address] [an d] [website] and copies may be obtained from [address].]
| 1 | Issuer: | ||
|---|---|---|---|
| 2 | (i) | Series Number: | [●] |
| (ii) | Tranche Number: | [●] |
9 For any Notes to be offered to Singapore investors, the Issuer to consider whether it needs to re-classify the Notes pursuant to Section 309(B) of the SFA prior to launch of the offer.
| 3 | Specified Currency or Currencies: | [●] | |
|---|---|---|---|
| 4 | Aggregate Nominal Amount of Notes admitted to trading: | [●] | |
| (i) | Series: | [●] | |
| (ii) | Tranche: | [●] | |
| 5 | Issue Price: | [●] per cent. of the Aggregate Nominal Amount [plus accrued interest from [●]] |
|
| 6 | (i) | Specified Denominations: | [[●] [and integral multiples of [●] in excess thereof up to and including [•]. No Notes in definitive form will be issued with a denomination above [●]] |
| (ii) | Calculation Amount (Definitive Notes only): | [●] | |
| 7 | (i) | Issue Date: | [●] |
| (ii) | Interest Commencement Date: | [●] | |
| 8 | Maturity Date: | [[●] / The Interest Payment Date falling in or nearest to [●]]/[Not Applicable] |
|
| 9 | Interest Basis: | [[●] per cent. Fixed Rate]/ | |
| [●] month | |||
| [[LIBOR/EURIBOR/CDOR] +/-[●] per cent. Floating Rate]/ [Floating Rate: SONIA Linked Interest]/ [Floating Rate Compounded Daily SOFR Linked Interest Rate]/ [Floating Rate: Weighted Average SOFR Linked Interest] |
|||
| [Zero Coupon]] | |||
| 10 | Change of Interest Basis: | [●] | |
| 11 | Redemption Basis: | [Redemption at par] /[Not Applicable] | |
| 12 | Put/Call Options: | [Investor Put] | |
| [Issuer Call] | |||
| 13 | (i) | Status of the Notes: | Senior |
| (ii) | [Date [Board] approval for issuance of Notes obtained: | [[•]/Not Applicable, save as discussed in Section 2 of the "General Information" section in the Prospectus] |
|
| PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE | |||
| 14 | Fixed Rate Note Provisions: | [Applicable/Not Applicable/Applicable for the period from and including [●] to, but excluding, [●] (the "Fixed Rate End Date")] |
|
| (i) | Rate[(s)] of Interest: | [●] per cent. per annum [payable [annually/semi annually/quarterly/monthly] in arrear] |
|
| (ii) | Interest Payment Date(s): | [●] in each year [adjusted in accordance with paragraph 14(vii)/not adjusted]/[commencing on [●] to and including [●]] |
|
| (iii) | Fixed Coupon Amount[(s)]: | [●] per Calculation Amount |
| Form of Pricing Supplement for Senior Notes | |||||
|---|---|---|---|---|---|
| (iv) | Broken Amount(s): | [●]]/[●] | [[●] per Calculation Amount payable on the Interest Payment Date falling [in/on] |
||
| (v) | Day Count Fraction: | ISDA"/ 360"/ |
["Actual/Actual"/ "Actual/Actual – "Actual/Actual Canadian Compound Method" / "Actual/365 (Fixed)"/ "Actual/ 360"/ "30/360"/ "360/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/ "Actual/Actual – ICMA"] |
||
| (vi) | Determination Dates: | [●] in each year | |||
| (vii) | Business Day Convention: | [Floating Rate Business Day Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention] |
|||
| 15 | Floating Rate Note Provisions: | [●]] | [Applicable/Not Applicable/Applicable for the period from and including the Fixed Rate End Date to, but excluding, |
||
| (i) | Interest Period(s): | [●] | |||
| (ii) | Interest Payment Dates: | [●] | |||
| (iii) | Business Day Convention: | [Floating Rate Business Day Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention] |
|||
| (iv) | Additional Business Centre(s): | [●] | |||
| (v) | Manner in which the Rate(s) of Interest is/are to be determined: |
[Screen Rate Determination/ISDA Determination] |
|||
| (vi) | Party responsible for calculating the Rate(s) of Interest and Interest Amount(s) (if not the [CalculationAgent]): |
[●] | |||
| (vii) | Screen Rate Determination: | [Offered quotation/Arithmetic mean of offered quotations] |
|||
| - | Reference Rate: | [●] month [LIBOR/EURIBOR/CDOR] [SONIA] [[Compounded Daily / Weighted Average] SOFR] |
|||
| - | Interest Determination Date(s): | [●] | |||
| - | Relevant Screen Page: | [●] | |||
| - | For the purposes of the "Observation Period", "p" means: |
[[●] London Business Days] [Not applicable] |
|||
| (viii) | ISDA Determination: | ||||
| - | Floating Rate Option: | [●] | |||
| - | Designated Maturity: | [●] | |||
| - | Reset Date: | [●] | |||
| (ix) | Margin(s): | [+/-][●] per cent. per annum | |||
| Form of Pricing Supplement for Senior Notes | |||
|---|---|---|---|
| (x) | Minimum Rate of Interest: | [●] per cent. per annum | |
| (xi) | Maximum Rate of Interest: | [●] per cent. per annum | |
| (xii) | Day Count Fraction: | ["Actual/Actual"/ "Actual/Actual – ISDA"/ "Actual/Actual Canadian Compound Method"/ "Actual/365 (Fixed)"/ "Actual/360"/ "30/360"/ "360/ 360"/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/ "Actual/Actual – ICMA"] |
|
| 16 | Zero Coupon Note Provisions: | [Applicable/Not Applicable] | |
| (i) | Amortisation Yield: | [●] per cent. per annum | |
| (ii) | Day Count Fraction: | ["Actual/Actual"/ "Actual/Actual – ISDA"/ "Actual/Actual Canadian Compound Method"/ "Actual/365 (Fixed)"/ "Actual/360"/ "30/360"/ "360/ 360"/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/ "Actual/Actual – ICMA"] |
| 17 | Call Option: | [Applicable/Not Applicable] | |
|---|---|---|---|
| (i) | Optional Redemption Date(s): | [●] | |
| (ii) | Optional Redemption Amount(s) of each Note: | [●] per Calculation Amount [Condition 5(b) applies] |
|
| (iii) | If redeemable in part: | ||
| (a) Minimum Redemption Amount: |
[[●] per Calculation Amount]/[Not Applicable] |
||
| (b) Maximum Redemption Amount: |
[[●] per Calculation Amount]/[Not Applicable] |
||
| (iv) | Notice period: | [●] | |
| 18 | Put Option: | [Applicable/Not Applicable] | |
| (i) | Optional Redemption Date(s): | [●] | |
| (ii) | Optional Redemption Amount(s) of each Note and method, if any, of calculation of such amount(s): |
[●] per Calculation Amount | |
| (iii) | Notice period: | [●] | |
| 19 | Early Redemption Amount | ||
| Early Redemption Amount(s) per Calculation Amount payable on redemption for taxation reasons or on event of default or other early redemption: |
[●] | ||
| 20 | Final Redemption Amount of each Note: | [[●] per Calculation Amount]/[Not |
[Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes in the limited circumstances specified in the Permanent Global Note]
[Temporary Global Note exchangeable for Definitive Notes on [●] days' notice]
[Permanent Global Note exchangeable for Definitive Notes in the limited circumstances specified in the Permanent Global Note]]
[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)]].
| New Global Note (Bearer Notes): | [Yes] [No] |
|---|---|
| Global Certificates (Registered Notes): | [Yes] [No] |
| New Safekeeping Structure (Registered Notes): | [Yes] [No] |
| Additional Financial Centre(s) or other special provisions relating to Payment Dates: |
[Not Applicable/[●]] |
| Talons for future Coupons to be attached to Definitive Notes (and dates on which such Talons mature): |
[Yes] [No] [As the Notes have more than 27 Coupons, Talons will be attached.] |
| DISTRIBUTION | |
| U.S. selling restrictions: | [Reg. S Compliance Category; TEFRA C/TEFRA D/TEFRA Not Applicable] |
| Additional selling restrictions: | [Not Applicable] |
| StabilisationManager(s): | [Not Applicable/[●]] |
| Prohibition of Sales to EEA and UK Retail Investors: | [Applicable/Not Applicable] |
| (If the Notes clearly do not constitute "packaged" products or the Notes do constitute "packaged" products and a key information document will be prepared, "Not Applicable" should be specified. If the Notes may constitute "packaged" products and no KID will be prepared, "Applicable" should be specified.) |
|
[●] has been extracted from [●]. The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware, and is 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:
Duly authorised
| (i) | Listing: | [London/[●]/None] | |
|---|---|---|---|
| (ii) | Admission to trading: | [Application has been made for the Notes to be admitted to trading on [●] with effect from [●].] |
|
| [Not Applicable] | |||
| (iii) | Estimate of total expenses related to admission to trading: |
[●] | |
| 2 | RATINGS | ||
| Ratings: | The Notes to be issued have been rated: | ||
| [S&P: [●]] |
[Moody's: [●]]
[Fitch: [●]]
[Need to include a brief explanation of the meaning of the ratings if this has previously been published by the rating provider.]
(The above disclosure should reflect the rating allocated to Notes of the type being issued under the Programme generally or, where the issue has been specifically rated, that rating.)
| Reasons for the offer and use of proceeds: | (See [["Use of Proceeds"] in |
|---|---|
| [Base] Prospectus/Give details]) | |
| Estimated net proceeds: | [●] |
| Estimated total expenses: | [●]] |
[[•]/ "Save as discussed in ["Subscription and Sale"], so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer."]
Indication of yield: [●]
The yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.]
| ISIN Code: | [●] |
|---|---|
| Common Code: | [●] |
| Any clearing system(s) other than Euroclear Bank SA/NVand | [Not Applicable/[●]] |
Any clearing system(s) other than Euroclear Bank SA/NVand Clearstream Banking S.A. and the relevant identification number(s):
Names and addresses of additional Paying Agent(s) (if any): [●]
Relevant Benchmark[s] (Floating Rate Notes calculated by reference to benchmarks only):
[Amounts payable under the Notes will be calculated by reference to [specify benchmark (as this term is defined in the Benchmarks Regulation)] which is provided by [legal name of the benchmark administrator]. As at the date of these Final Terms, [legal name of the benchmark administrator] [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 Benchmarks Regulation.
[As far as the Issuer is aware, [specify benchmark (as this term is defined in the Benchmarks Regulation)] [does not fall within the scope of the Benchmarks Regulation/the transitional provisions in Article 51 of the Benchmarks Regulation apply] such that [legal name of the benchmark administrator] is not currently required to obtain authorisation or registration (or, if located outside the EU, recognition, endorsement or equivalence).]]
No prospectus is required in accordance with Regulation (EU) 2017/1129, as amended or superseded, for the issue of the PR Exempt Notes described herein. The Financial Conduct Authority has neither approved nor reviewed information contained in this Pricing Supplement.
The form of Pricing Supplement that will be issued in respect of each Tranche, subject only to the deletion of non applicable provisions, is set out below:
Pricing Supplement dated [●]
Aviva plc
Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes]
under the £7,000,000,000 Euro Note Programme
[MIFID II PRODUCT GOVERNANCE/PROFESSIONAL INVESTORS AND ELIGIBLE COUNTERPARTIES ONLY TARGET MARKET – Solely for the purposes of [the/each] 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/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/s'] target market assessment) and determining appropriate distribution channels.]
[PROHIBITION OF SALES TO EEA AND UKRETAIL 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") or in the United Kingdom ("UK"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); (ii) a customer within the meaning of Directive (EU) 2016/97 (the "Insurance Distribution 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 Regulation (EU) 2017/1129 (the "Prospectus Regulation"). 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 or in the UK has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA or in the UK may be unlawful under the PRIIPS Regulation.]
[NOTIFICATION UNDER SECTION 309B(1) OF THE SECURITIES AND FUTURES ACT (CHAPTER 289) OF SINGAPORE, AS MODIFIED OR AMENDED FROM TIME TO TIME (THE "SFA") AND THE SECURITIES AND FUTURES (CAPITAL MARKETS PRODUCTS) REGULATIONS 2018 OF SINGAPORE (THE "CMP REGULATIONS 2018") – In connection with Section 309(B) of the SFA and the CMP Regulations 2018, the Issuer has determined, and hereby notifies all persons (including all relevant persons as defined in Section 309A(1) of the SFA), that the Notes are [prescribed capital markets products] [capital markets products other than prescribed capital markets products] (as defined in the CMP Regulations 2018) and [are] [Excluded]/[Specified] Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale and Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).]10
Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions of the Tier 3 Notes (the "Conditions") set forth in the Prospectus dated 1 May 2020[and the supplemental Prospectus dated [•]] (the "Prospectus"). Any reference in the Conditions to "relevant Final Terms" shall be deemed to include "relevant Pricing Supplement", where applicable.
This document constitutes the Pricing Supplement of the PR Exempt Notes described herein and must be read in conjunction with the Prospectus [as so supplemented]. Full information on the Issuer and the offer of the PR Exempt Notes is only available on the basis of the combination of this Pricing Supplement and the Prospectus [as so supplemented]. [The Prospectus [and the supplemental Prospectus] [have] [has] been published on the website of the Regulatory News Service operated by the London Stock Exchange at http://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.]
10 For any Notes to be offered to Singapore investors, the Issuer to consider whether it needs to re-classify the Notes pursuant to Section 309(B) of the SFA prior to launch of the offer.
| 1 | Issuer: | Aviva plc | |
|---|---|---|---|
| 2 | (i) | Series Number: | [●] |
| (ii) | Tranche Number: | [●] | |
| 3 | Specified Currency or Currencies: | [●] | |
| 4 | Aggregate Nominal Amount of Notes admitted to trading: | [●] | |
| (i) | Series: | [●] | |
| (ii) | Tranche: | [●] | |
| 5 | Issue Price: | [●] per cent. of the Aggregate Nominal Amount [plus accrued interest from [●]] |
|
| 6 | (i) | Specified Denominations: | [[●] [and integral multiples of [●] in excess thereof up to and including [•]. No Notes in definitive form will be issued with a denomination above [●]] |
| (ii) | Calculation Amount (Definitive Notes only): | [●] | |
| 7 | (i) | Issue Date: | [●] |
| (ii) | Interest Commencement Date: | [●] | |
| 8 | Maturity Date: | [[●] / The Interest Payment Date falling in or nearest to [●]]/[Not Applicable] |
|
| 9 | Interest Basis: | [[●] per cent. Fixed Rate]/ | |
| [●] month | |||
| [[LIBOR/EURIBOR/CDOR] +/-[●] per cent. Floating Rate]/ [Floating Rate: SONIA Linked Interest]/ [Floating Rate Compounded Daily SOFR Linked Interest Rate]/ [Floating Rate: Weighted Average SOFR Linked Interest Rate]/ |
|||
| [Fixed Rate Reset Notes]/ | |||
| [Fixed to Floating Rate Notes]/ | |||
| 10 | Change of Interest Basis: | [●] /[Fixed Rate Reset Notes]/ [Fixed to Floating Rate Notes] |
|
| 11 | Redemption Basis: | [Redemption at par] /[Not Applicable] (N.B. Only relevant for Tier 3 Notes with a Maturity Date specified hereon) |
|
| 12 | Put/Call Options: | [Issuer Call] | |
| 13 | (i) | Status of the Notes: | Tier 3 |
| (ii) | [Date [Board] approval for issuance of Notes obtained: | [[•]/Not Applicable, save as discussed in Section 2 of the "General Information" section in the Prospectus] |
|
| PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE | |||
| 14 | Fixed | Rate Note and Fixed to Floating Rate Note Provisions: |
[Applicable/Not Applicable/Applicable for the period from and including [●] to, but excluding, [●] (the "Fixed Rate End |
Date")]
| Form of Pricing Supplement for Tier 3 Notes | |||
|---|---|---|---|
| (i) | Rate[(s)] of Interest: | [●] per cent. per annum [payable [annually/semi annually/quarterly/monthly] in arrear] |
|
| (ii) | Interest Payment Date(s): | [●] in each year [adjusted in accordance with paragraph 14(vii)/not adjusted]/[commencing on [●] to and including [●]] |
|
| (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: | ["Actual/Actual"/ "Actual/Actual - ISDA"/ "Actual/Actual Canadian Compound Method"/ "Actual/365 (Fixed)"/ "Actual/ 360"/ "30/360"/ "360/ 360"/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/ "Actual/Actual - ICMA"] |
|
| (vi) | Determination Dates: | [●] in each year | |
| (vii) | Business Day Convention: | [Floating Rate Business Day Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention] |
|
| 15 | Fixed Rate Reset Note Provisions: | ||
| (i) | Initial Rate of Interest: | [●] per cent. per annum [payable [annually/semi annually/quarterly/monthly] in arrear] |
|
| (ii) | Reset Rate: | [Mid-Swap Rate] [Benchmark Gilt Rate] [Reference Bond Rate] [CMT Rate] |
|
| (iii) | Reset Margin: | [+/-][●] per cent. per annum | |
| (iv) | Interest Payment Date(s): | [●] in each year | |
| (v) | Fixed Coupon Amount[(s)]: | [●] per Calculation Amount | |
| (vi) | Broken Amount(s): | [●] per Calculation Amount payable on the Interest Payment Date falling [in/on] [●] |
|
| (vii) | First Reset Note Reset Date: | [●] | |
| (viii) | Anniversary Date | [●] [and each corresponding day and month falling [●] years thereafter] |
|
| (ix) | Reset Rate Screen Page: | [[●]/Not Applicable] | |
| (x) | Mid-Swap Maturity: | [[●]/Not Applicable] | |
| (xi) | Day Count Fraction: | ["Actual/Actual"/ "Actual/Actual - ISDA"/ "Actual/Actual Canadian Compound Method"/ "Actual/365 (Fixed)"/ "Actual/360"/ "30/360"/ "360/ |
209
360"/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/
Form of Pricing Supplement for Tier 3 Notes "Actual/Actual - ICMA"]
| (xii) | Reference Bond: | [[●]/Not Applicable] | |
|---|---|---|---|
| (xiii) | Benchmark Gilt: | [[●]/Not Applicable] | |
| (xiv) | U.S. Treasury Original Maturity: | [[●]/Not Applicable] | |
| 16 | Provisions: | Floating Rate Note and Fixed to Floating Rate Note |
[Applicable/Not Applicable/Applicable for the period from and including the Fixed Rate End Date to, but excluding, [●]] |
| (i) | Interest Period(s): | [●] | |
| (ii) | Interest Payment Dates: | [●] | |
| (iii) | Business Day Convention: | [Floating Rate Business Day Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention] |
|
| (iv) | Additional Business Centre(s): | [●] | |
| (v) | Manner in which the Rate(s) of Interest is/are to be determined: |
[Screen Rate Determination/ISDA Determination] |
|
| (vi) | Party responsible for calculating the Rate(s) of Interest and Interest Amount(s) (if not the [Calculation Agent]): |
[●] | |
| (vii) | Screen Rate Determination: | [Offered quotation/Arithmetic mean of offered quotations] |
|
| - Reference Rate: |
[●] month [LIBOR/EURIBOR/CDOR] [SONIA] [Compounded Daily/ Weighted Average] SOFR] |
||
| - Interest Determination Date(s): |
[●] | ||
| - Relevant Screen Page: |
[●] | ||
| - For the purposes of the "Observation Period", "p" means: |
[[●] London Business Days] [Not Applicable] |
||
| (viii) | ISDA Determination: | ||
| - Floating Rate Option: |
[●] | ||
| - Designated Maturity: |
[●] | ||
| - Reset Date: |
[●] | ||
| (ix) | Margin(s): | [+/-][●] per cent. per annum | |
| (x) | Minimum Rate of Interest: | [●] per cent. per annum | |
| (xi) | Maximum Rate of Interest: | [●] per cent. per annum | |
| (xii) | Day Count Fraction: | ["Actual/Actual"/ "Actual/Actual - ISDA"/ "Actual/Actual Canadian Compound Method"/ "Actual/365 (Fixed)"/ "Actual/360"/ "30/360"/ "360/ 360"/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/ |
|
| 17 | Optional Interest Payment Date: | "Actual/Actual - ICMA"] [Applicable/Not Applicable] |
210
| 18 | Compulsory Interest Payment Date: | Form of Pricing Supplement for Tier 3 Notes [Applicable/Not Applicable] |
|||||
|---|---|---|---|---|---|---|---|
| 19 | Insolvent Insurer Winding-up Condition: | [Applicable/Not Applicable] | |||||
| PROVISIONS RELATING TO REDEMPTION | |||||||
| 20 | Call Option: | [Applicable/Not Applicable] | |||||
| (i) Optional Redemption Date(s): |
[●] | ||||||
| (ii) | Optional Redemption Amount(s) of each Note: | [●] per Calculation Amount [Condition 5(b) applies] |
|||||
| (iii) | If redeemable in part: | ||||||
| (a) | Minimum Redemption Amount: | [[●] per Calculation Amount]/[Not Applicable] |
|||||
| (b) | Maximum Redemption Amount: | [[●] per Calculation Amount]/[Not Applicable] |
|||||
| (iv) | Notice period: | [●] | |||||
| 21 | Right to Extend Maturity Date: | [Applicable/Not Applicable] [This is without prejudice to the mandatory redemption deferral provisions and other provisions contained in Condition 6, which shall apply to this issue of Notes.] [The Extended Maturity Date is [●].] (N.B. Only relevant for Tier 3 Notes with a Maturity Date specified hereon) |
|||||
| 22 | Capital Disqualification Call: | [Applicable/Not Applicable] | |||||
| 23 | Rating Methodology Call: | [Applicable/Not Applicable/Applicable. The Rating Methodology Event Commencement Date is [●]] |
|||||
| 24 | Rating Methodology Event First Call Date | [Not Applicable/Applicable. The Rating Methodology Event First Call Date is [●]] |
|||||
| 25 | Final Redemption Amount of each Note: | [[●] per Calculation Amount]/[Not Applicable] (N.B. Only relevant for Tier 3 Notes with a Maturity Date specified hereon) |
|||||
| 26 | Special Redemption Price: | ||||||
| (i) | in redemption: |
respect of a Capital Disqualification Event |
[●] per Calculation Amount | ||||
| (ii) | in respect of a Rating Methodology Event redemption: | [●] per Calculation Amount | |||||
| 27 | Unmatured Redemption: |
Coupons to become void upon |
Early | [Yes/No/Not Applicable] (N.B. Only relevant for Tier 3 Notes with a Maturity Date specified hereon) |
|||
| GENERAL PROVISIONS APPLICABLE TO THE NOTES | |||||||
| 28 | Form of Notes: | [Bearer Notes: | |||||
| [Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes in the |
limited circumstances specified in the
Permanent Global Note]
| Form of Pricing Supplement for Tier 3 Notes [Temporary Global Note exchangeable for Definitive Notes on [●] days' notice] |
||
|---|---|---|
| [Permanent Global Note exchangeable for Definitive Notes in the limited circumstances specified in the Permanent Global Note]] |
||
| [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)]]. |
||
| 29 | Global Certificates (Registered Notes): | [Yes] [No] |
| 30 | Additional Financial Centre(s) or other special provisions relating to Payment Dates: |
[Not Applicable/[●]] |
| 31 | Talons for future Coupons to be attached to Definitive Notes (and dates on which such Talons mature): |
[Yes] [No] [As the Notes have more than 27 Coupons, Talons will be attached.] |
| DISTRIBUTION | ||
| 32 | U.S. selling restrictions: | [Reg. S Compliance Category; TEFRA C/TEFRA D/TEFRA Not Applicable] |
| 33 | Additional selling restrictions: | [Not Applicable] |
| 34 | StabilisationManager(s): | [Not Applicable/[●]] |
| 35 | Prohibition of Sales to EEA and UK Retail Investors: | [Applicable/Not Applicable] |
| (If the Notes clearly do not constitute "packaged" products or the Notes do not constitute "packaged" products and a key information document will be prepared, "Not Applicable" should be specified. If the Notes may constitute "packaged" products and no KID will be prepared, "Applicable" should be specified.) |
||
| OTHER |
[●] has been extracted from [●]. The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware, and is 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
| (i) | Listing: | [London/[●]/None] | |
|---|---|---|---|
| (ii) | Admission to trading: | [Application has been made for the Notes to be admitted to trading on [●] with effect from [●].] |
|
| [Not Applicable] | |||
| (iii) | Estimate of total expenses related to admission to trading: |
[●] | |
| 2 | RATINGS | ||
| Ratings: | The Notes to be issued have been rated: | ||
| [S&P: [●]] |
[Moody's: [●]]
[Fitch: [●]]
[Need to include a brief explanation of the meaning of the ratings if this has previously been published by the rating provider.]
(The above disclosure should reflect the rating allocated to Notes of the type being issued under the Programme generally or, where the issue has been specifically rated, that rating.)
| (i) | Reasons for the offer and use of proceeds: | (See [["Use of Proceeds"] in |
|---|---|---|
| [Base] Prospectus/Give details]) | ||
| (ii) | Estimated net proceeds: | [●] |
| [(iii) | Estimated total expenses: | [●]] |
[[•]/ "Save as discussed in ["Subscription and Sale"], so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer."]
Indication of yield: [●]
The yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.]
| ISIN Code: | [●] |
|---|---|
| Common Code: | [●] |
| Any clearing system(s) other than Euroclear Bank SA/NV and | [Not Applicable/[●]] |
Any clearing system(s) other than Euroclear Bank SA/NV and Clearstream Banking S.A. and the relevant identification number(s):
Names and addresses of additional Paying Agent(s) (if any): [●]
Relevant Benchmark[s] (Fixed to Floating Rate Notes, Fixed Rate Reset Notes or Floating Rate Notes calculated by reference to benchmarks only):
[Amounts payable under the Notes will be calculated by reference to [specify benchmark (as this term is defined in the Benchmarks Regulation)] which is provided by [legal name of the benchmark administrator]. As at the date of these Final Terms, [legal name of the benchmark administrator] [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 Benchmarks Regulation.
[As far as the Issuer is aware, [specify benchmark (as this term is defined in the Benchmarks Regulation)] [does not fall within the scope of the Benchmarks Regulation/the transitional provisions in Article 51 of the Benchmarks Regulation apply] such that [legal name of the benchmark administrator] is not currently required to obtain authorisation or registration (or, if located outside the EU, recognition, endorsement or equivalence).]]
No prospectus is required in accordance with Regulation (EU) 2017/1129, as amended or superseded, for the issue of the PR Exempt Notes described herein. The Financial Conduct Authority has neither approved nor reviewed information contained in this Pricing Supplement.
The form of Pricing Supplement that will be issued in respect of each Tranche, subject only to the deletion of non applicable provisions, is set out below:
Pricing Supplement dated [●]
Aviva plc
Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes]
under the £7,000,000,000 Euro Note Programme
[MIFID II PRODUCT GOVERNANCE/PROFESSIONAL INVESTORS AND ELIGIBLE COUNTERPARTIES ONLY TARGET MARKET – Solely for the purposes of [the/each] 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/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/s'] target market assessment) and determining appropriate distribution channels.]
[PROHIBITION OF SALES TO EEA AND UK 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") or in the United Kingdom ("UK"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); (ii) a customer within the meaning of Directive (EU) 2016/97 (the "Insurance Distribution 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 Regulation (EU) 2017/1129 (the "Prospectus Regulation"). 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 or in the UK has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA or in the UK may be unlawful under the PRIIPS Regulation.]
[NOTIFICATION UNDER SECTION 309B(1) OF THE SECURITIES AND FUTURES ACT (CHAPTER 289) OF SINGAPORE, AS MODIFIED OR AMENDED FROM TIME TO TIME (THE "SFA") AND THE SECURITIES AND FUTURES (CAPITAL MARKETS PRODUCTS) REGULATIONS 2018 OF SINGAPORE (THE "CMP REGULATIONS 2018") – In connection with Section 309(B) of the SFA and the CMP Regulations 2018, the Issuer has determined, and hereby notifies all persons (including all relevant persons as defined in Section 309A(1) of the SFA), that the Notes are [prescribed capital markets products] [capital markets products other than prescribed capital markets products] (as defined in the CMP Regulations 2018) and [are] [Excluded]/[Specified] Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale and Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).]11
Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions of the Tier 2 Notes (the "Conditions") set forth in the Prospectus dated 1 May 2020 [and the supplemental Prospectus dated [•]] (the "Prospectus"). Any reference in the Conditions to "relevant Final Terms" shall be deemed to include "relevant Pricing Supplement", where applicable.
This document constitutes the Pricing Supplement of the PR Exempt Notes described herein and must be read in conjunction with the Prospectus [as so supplemented]. Full information on the Issuer and the offer of the PR Exempt Notes is only available on the basis of the combination of this Pricing Supplement and the Prospect us [as so supplemented]. [The Prospectus [and the supplemental Prospectus] [have] [has] been published on the website of the Regulatory News Service operated by the London Stock Exchange at http://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.]
1 Issuer: Aviva plc
11 For any Notes to be offered to Singapore investors, the Issuer to consider whether it needs to re-classify the Notes pursuant to Section 309(B) of the SFA prior to launch of the offer.
| 2 | (i) | Series Number: | [●] |
|---|---|---|---|
| (ii) | Tranche Number: | [●] | |
| 3 | Specified Currency or Currencies: | [●] | |
| 4 | Aggregate Nominal Amount of Notes admitted to trading: | [●] | |
| (i) | Series: | [●] | |
| (ii) | Tranche: | [●] | |
| 5 | Issue Price: | [●] per cent. of the Aggregate Nominal Amount [plus accrued interest from [●]] |
|
| 6 | (i) | Specified Denominations: | [[●] [and integral multiples of [●] in excess thereof up to and including [•]. No Notes in definitive form will be issued with a denomination above [●]] |
| (ii) | Calculation Amount (Definitive Notes only): | [●] | |
| 7 | (i) | Issue Date: | [●] |
| (ii) | Interest Commencement Date: | [●] | |
| 8 | Maturity Date: | [[●] / The Interest Payment Date falling in or nearest to [●]]/[Not Applicable] |
|
| 9 | Interest Basis: | [[●] per cent. Fixed Rate]/ | |
| [●] month | |||
| [[LIBOR/EURIBOR/CDOR] +/-[●] per cent. Floating Rate]/ [Floating Rate: SONIA Linked Interest]/ [Floating Rate Compounded Daily SOFR Linked Interest Rate]/ [Floating Rate: Weighted Average SOFR Linked Interest Rate]/ |
|||
| [Fixed Rate Reset Notes]/ | |||
| [Fixed to Floating Rate Notes]/ | |||
| 10 | Change of Interest Basis: | [●] /[Fixed Rate Reset Notes]/ [Fixed to Floating Rate Notes] |
|
| 11 | Redemption Basis: | [Redemption at par] /[Not Applicable] (N.B. Only relevant for Tier 2 Notes with a Maturity Date specified hereon) |
|
| 12 | Put/Call Options: | [Issuer Call] | |
| 13 | (i) | Status of the Notes: | Tier 2 |
| (ii) | [Date [Board] approval for issuance of Notes obtained: | [[•]/Not Applicable, save as discussed in Section 2 of the "General Information" section in the Prospectus] |
|
| PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE | |||
| 14 | Fixed | Rate Note and Fixed to Floating Rate Provisions: |
Note [Applicable/Not Applicable/Applicable for the period from and including [●] to, but excluding, [●] (the "Fixed Rate End Date")] |
| (i) | Rate[(s)] of Interest: | [●] per cent. per annum [payable [annually/semi annually/quarterly/monthly] in arrear] |
| (ii) | Interest Payment Date(s): | Form of Pricing Supplement for Tier 2 Notes [●] in each year [adjusted in accordance |
|||||
|---|---|---|---|---|---|---|---|
| with paragraph 14(vii)/not adjusted]/[commencing on [●] to and including [●]] |
|||||||
| (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: | ["Actual/Actual"/ "Actual/Actual - ISDA"/ "Actual/Actual Canadian Compound Method"/ "Actual/365 (Fixed)"/ "Actual/ 360"/ "30/360"/ "360/ 360"/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/ "Actual/Actual - ICMA"] |
|||||
| (vi) | Determination Dates: | [●] in each year | |||||
| (vii) | Business Day Convention: | [Floating Rate Business Day Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention] |
|||||
| 15 | Fixed Rate Reset Note Provisions: | ||||||
| (i) | Initial Rate of Interest: | [●] per cent. per annum [payable [annually/semi annually/quarterly/monthly] in arrear] |
|||||
| (ii) | Reset Rate: | [Mid-Swap Rate] [Benchmark Gilt Rate] [Reference Bond Rate] [CMT Rate] |
|||||
| (iii) | Reset Margin: | [+/-][●] per cent. per annum | |||||
| (iv) | Interest Payment Date(s): | [●] in each year | |||||
| (v) | Fixed Coupon Amount[(s)]: | [●] per Calculation Amount | |||||
| (vi) | Broken Amount(s): | [●] per Calculation Amount payable on the Interest Payment Date falling [in/on] [●] |
|||||
| (vii) | First Reset Note Reset Date: | [●] | |||||
| (viii) | Anniversary Date: | [●] [and each corresponding day and month falling [●] years thereafter] |
|||||
| (ix) | Reset Rate Screen Page: | [[●]/Not Applicable] | |||||
| (x) | Mid-Swap Maturity: | [[●]] | |||||
| (xi) | Day Count Fraction: | ["Actual/Actual"/ "Actual/Actual - ISDA"/ "Actual/Actual Canadian Compound Method"/ "Actual/365 (Fixed)"/ "Actual/360"/ "30/360"/ "360/ 360"/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/ "Actual/Actual - ICMA"] |
|||||
| (xii) | Reference Bond: | [[●]/Not Applicable] |
(xiii) Benchmark Gilt: [[●]/Not Applicable]
| (xiv) | U.S. Treasury Original Maturity: | Form of Pricing Supplement for Tier 2 Notes [[●]/Not Applicable] |
||
|---|---|---|---|---|
| 16 | Floating Rate Note and Fixed to Floating Rate Note Provisions: |
[Applicable/Not Applicable/Applicable for the period from and including the Fixed Rate End Date to, but excluding, [●]] |
||
| (i) | Interest Period(s): | [●] | ||
| (ii) | Interest Payment Dates: | [●] | ||
| (iii) | Business Day Convention: | [Floating Rate Business Day Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention] |
||
| (iv) | Additional Business Centre(s): | [●] | ||
| (v) | Manner in which the Rate(s) of Interest is/are to be determined: |
[Screen Rate Determination/ISDA Determination] |
||
| (vi) | Party responsible for calculating the Rate(s) of Interest and Interest Amount(s) (if not the [CalculationAgent]): |
[●] | ||
| (vii) | Screen Rate Determination: | [Offered quotation/Arithmetic mean of offered quotations] |
||
| - Reference Rate: |
[●] month [LIBOR/EURIBOR/CDOR] [SONIA] [[Compounded Daily / Weighted Average] SOFR] |
|||
| - Interest Determination Date(s): |
[●] | |||
| - Relevant Screen Page: |
[●] | |||
| - For the purposes of the "Observation Period", "p" means: |
[[●] London Business Days] [Not Applicable] |
|||
| (viii) | ISDA Determination: | |||
| - Floating Rate Option: |
[●] | |||
| - Designated Maturity: |
[●] | |||
| - Reset Date: |
[●] | |||
| (ix) | Margin(s): | [+/-][●] per cent. per annum | ||
| (x) | Minimum Rate of Interest: | [●] per cent. per annum | ||
| (xi) | Maximum Rate of Interest: | [●] per cent. per annum | ||
| (xii) | Day Count Fraction: | ["Actual/Actual"/ "Actual/Actual - ISDA"/ "Actual/Actual Canadian Compound Method"/ "Actual/365 (Fixed)"/ "Actual/360"/ "30/360"/ "360/ 360"/ "Bond Basis"/ "30E/360"/ "Eurobond Basis"/ "30E/360 (ISDA)"/ "Actual/Actual - ICMA"] |
||
| 17 | Optional Interest Payment Date: | [Applicable/Not Applicable] | ||
| 18 | Compulsory Interest Payment Date: | [Applicable/Not Applicable] | ||
| 19 | Insolvent Insurer Winding-up Condition: | [Applicable/Not Applicable] |
| 20 | Call Option: | Form of Pricing Supplement for Tier 2 Notes [Applicable/Not Applicable] |
||||
|---|---|---|---|---|---|---|
| (i) | Optional Redemption Date(s): | [●] | ||||
| (ii) | Optional Redemption Amount(s) of each Note: | [●] per Calculation Amount [Condition 5(b) applies] |
||||
| (iii) | If redeemable in part: | |||||
| (a) | Minimum Redemption Amount: | [[●] per Calculation Amount]/[Not Applicable] |
||||
| (b) | Maximum Redemption Amount: | [[●] per Calculation Amount]/[Not Applicable] |
||||
| (iv) | Notice period: | [●] | ||||
| 21 | Right to Extend Maturity Date: | [Applicable/Not Applicable] [This is without prejudice to the mandatory redemption deferral provisions and other provisions contained in Condition 6, which shall apply to this issue of Notes.] [The Extended Maturity Date is [●].] (N.B. Only relevant for Tier 2 Notes with a Maturity Date specified hereon) |
||||
| 22 | Capital Disqualification Call: | [Applicable/Not Applicable] | ||||
| 23 | Rating Methodology Call: | [Applicable/Not Applicable/Applicable. The Rating Methodology Event Commencement Date is [●]] |
||||
| 24 | Rating Methodology Event First Call Date: | [Not Applicable/Applicable. The Rating Methodology Event First Call Date is [●]] |
||||
| 25 | Final Redemption Amount of each Note: | [[●] per Calculation Amount]/[Not Applicable] (N.B. Only relevant for Tier 2 Notes with a Maturity Date specified hereon) |
||||
| 26 | Special Redemption Price: | |||||
| (i) | in redemption: |
respect | of a Capital Disqualification Event | [●] per Calculation Amount | ||
| (ii) | in respect of a Rating Methodology Event redemption: | [●] per Calculation Amount | ||||
| 27 | Unmatured Coupons to become void upon Early Redemption: |
[Yes/No/Not Applicable] (N.B. Only relevant for Tier 2 Notes with a Maturity Date specified hereon) |
||||
| GENERAL PROVISIONS APPLICABLE TO THE NOTES | ||||||
| 28 | Form of Notes: | [Bearer Notes: | ||||
| [Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes in the limited circumstances specified in the Permanent Global Note] |
||||||
| [Temporary Global Note exchangeable for Definitive Notes on [●] days' notice] |
[Permanent Global Note exchangeable for Definitive Notes in the limited
Form of Pricing Supplement for Tier 2 Notes circumstances specified in the Permanent Global Note]]
[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)]].
| 29 | Global Certificates (Registered Notes): | [Yes] [No] | ||
|---|---|---|---|---|
| 30 | Additional Financial Centre(s) or other special provisions relating to Payment Dates: |
[Not Applicable/[●]] | ||
| 31 | Talons for future Coupons to be attached to Definitive Notes (and dates on which such Talons mature): |
[Yes] [No] [As the Notes have more than 27 Coupons, Talons will be attached.] |
||
| DISTRIBUTION | ||||
| 32 | U.S. selling restrictions: | [Reg. S Compliance Category; TEFRA C/TEFRA D/TEFRA Not Applicable] |
||
| 33 | Additional selling restrictions: | [Not Applicable] | ||
| 34 | Stabilisation Manager(s): | [Not Applicable/[●]] | ||
| 35 | Prohibition of Sales to EEA and UK Retail Investors: | [Applicable/Not Applicable] | ||
| OTHER | (If the Notes clearly do not constitute "packaged" products or the Notes do constitute "packaged" products and a key information document will be prepared, "Not Applicable" should be specified. If the Notes may constitute "packaged" products and no KID will be prepared, "Applicable" should be specified.) |
|||
36 Other terms and conditions: [●]
[●] has been extracted from [●]. The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware, and is 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
| (i) | Listing: | [London/[●]/None] | |||
|---|---|---|---|---|---|
| (ii) | Admission to trading: | [Application has been made for the Notes to be admitted to trading on [●] with effect from [●].] |
|||
| [Not Applicable] | |||||
| (iii) | Estimate of total expenses related to admission to trading: |
[●] | |||
| 2 | RATINGS | ||||
| Ratings: | The Notes to be issued have been rated: | ||||
| [S&P: [●]] |
[Moody's: [●]]
[Fitch: [●]]
[Need to include a brief explanation of the meaning of the ratings if this has previously been published by the rating provider.]
(The above disclosure should reflect the rating allocated to Notes of the type being issued under the Programme generally or, where the issue has been specifically rated, that rating.)
| (i) | Reasons for the offer and use of proceeds: | (See [["Use of Proceeds"] in | |
|---|---|---|---|
| [Base] Prospectus/Give details]) | |||
| (ii) | Estimated net proceeds: | [●] | |
| [(iii) | Estimated total expenses: | [●]] |
[[•]/ "Save as discussed in ["Subscription and Sale"], so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer."]
Indication of yield: [●]
The yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.]
| ISIN Code: | [●] |
|---|---|
| Common Code: | [●] |
| Any clearing system(s) other than Euroclear Bank SA/NVand | [Not Applicable/[●]] |
Any clearing system(s) other than Euroclear Bank SA/NVand Clearstream Banking S.A. and the relevant identification number(s):
Names and addresses of additional Paying Agent(s) (if any): [●]
Relevant Benchmark[s] (Fixed to Floating Rate Notes, Fixed Rate Reset Notes or Floating Rate Notes calculated by reference to benchmarks only):
[Amounts payable under the Notes will be calculated by reference to [specify benchmark (as this term is defined in the Benchmarks Regulation)] which is provided by [legal name of the benchmark administrator]. As at the date of these Final Terms, [legal name of the benchmark administrator] [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 Benchmarks Regulation.
[As far as the Issuer is aware, [specify benchmark (as this term is defined in the Benchmarks Regulation)] [does not fall within the scope of the Benchmarks Regulation/the transitional provisions in Article 51 of the Benchmarks Regulation apply] such that [legal name of the benchmark administrator] is not currently required to obtain authorisation or registration (or, if located outside the EU, recognition, endorsement or equivalence).]]
(10) The annual accounts of the Issuer for the last two financial years have been audited:
(i) the consolidated accounts of the Issuer for the year ended 31 December 2018 were audited by PricewaterhouseCoopers LLP, Registered Auditor (authorised and regulated by the FCA for designated investment business), the auditor appointed by the Issuer for the purposes of auditing its consolidated accounts, in accordance with auditing standards and have been reported on without qualification. The report prepared by PricewaterhouseCoopers LLP for the Issuer for the year ended 31 December 2018 contained the following statement: "This report, including the opinions, has been prepared for and only for the Company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing." The address of PricewaterhouseCoopers LLP is 7 More London Riverside, London SE1 2RT, United Kingdom.
(13) 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 for the Issuer and/or 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.
(14) The Issuer's Legal Entity Identifier ("LEI") is YF0Y5B0IB8SM0ZFG9G81
Aviva plc St Helen's 1 Undershaft London EC3P 3DQ United Kingdom
Citigroup Centre Canada Square Canary Wharf London E14 5LB United Kingdom
5 The North Colonnade Canary Wharf London E14 4BB United Kingdom
12, place des Etats-Unis CS 70052 92547 Montrouge Cedex France
Plumtree Court 25 Shoe Lane London EC4A 4AU United Kingdom
10 Gresham Street London EC2V 7AE United Kingdom
250 Bishopsgate London EC2M 4AA United Kingdom
Citigroup Centre Canada Square Canary Wharf London E14 5LB United Kingdom
Winchester House 1 Great Winchester Street London EC2N 2DB United Kingdom
8 Canada Square London E14 5HQ United Kingdom
25 Cabot Square Canary Wharf London E14 4QA United Kingdom
Immeuble Basalte 17 Cours Valmy 92987 Paris La Défense Cedex France
The Law Debenture Trust Corporation p.l.c. Fifth Floor 100 Wood Street London EC2V 7EX United Kingdom
HSBC Bank plc
8 Canada Square London E14 5HQ United Kingdom
PricewaterhouseCoopers LLP 7 More London Riverside SE1 2RT United Kingdom
Slaughter and May One Bunhill Row London EC1Y 8YY United Kingdom
to the Issuer to the Dealers and the Trustee Linklaters LLP One Silk Street London EC2Y 8HQ United Kingdom
imprima — C109540
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