Imperial Brands PLC

Capital/Financing Update • Jan 26, 2017

Final Terms

IMPERIAL BRANDS FINANCE PLC

issue of €500,000,000 1.375 per cent Notes due 27 January 2025 Guaranteed by Imperial Brands PLC irrevocably and unconditionally under the €15,000,000,000 Debt Issuance Programme

PART A - CONTRACTUAL TERMS

Terms used herein shall be deemed to be defined as such for the purposes of the Conditions set forth in the Prospectus dated 6 December 2016 which constitutes a base prospectus for the purposes of the Prospectus Directive (the "Prospectus"). This document constitutes the Final Terms of the Notes described herein for the purposes of Article 5.4 of the Prospectus Directive and must be read in conjunction with the Prospectus. Full information on the Issuer, the Guarantor and the offer of the Notes is only available on the basis of the combination of these Final Terms and the Prospectus. The Prospectus has been published via the regulatory news service maintained by the London Stock Exchange (www.londonstockexchange.com/exchange/news/market-news/market-news-home.html).

1.	(i)	Issuer:	Imperial Brands Finance PLC
	(ii)	Guarantor:	Imperial Brands PLC
2.	(i)	Series Number:	36
	(ii)	Tranche Number:	1
	(iii)	Date on which the Notes will be consolidated and form a single Series:	Not Applicable
3.	Specified Currency or Currencies:		Euro ("€")
Aggregate Nominal Amount: 4.
	(i)	Series:	€500,000,000
	(ii)	Tranche:	€500,000,000
5.	Issue Price:		99.617 per cent of the Aggregate Nominal Amount
6.	(i)	Specified Denominations:	€100,000 and integral multiples of €1,000 in excess thereof up to and including €199,000. No Notes in definitive form will be issued with a denomination above €199,000
	(ii)	Calculation Amount:	€1,000
7.	(i)	Issue Date:	27 January 2017
	(ii)	Interest Commencement Date:	Issue Date

8.	Maturity Date:	27 January 2025
9.	Interest Basis:	1.375 per cent Fixed Rate (see paragraph 14 below)
	10. Redemption/Payment Basis:	Subject to any purchase or cancellation or early redemption, the Notes will be redeemed on the Maturity Date at 100 per cent of their nominal amount
	11. Change of Interest Basis:	Step Up Ratings Change and Step Down Ratings Change apply to the Rate of Interest (see paragraph 14(vii) below)
	12. Put/Call Options:	Issuer Call Issuer Make-Whole Call Issuer Residual Call Change of Control Investor Put (see paragraph 18/19/20/22 below)
	13. Date Board approval for issuance of Notes and Guarantee obtained.	January 2015 and 30 October 29 2014. respectively

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

	14. Fixed Rate Note Provisions	Applicable
(i) Rate(s) of Interest:		1.375 per cent per annum payable in arrear on each Interest Payment Date
(ii) Interest Payment Date(s):		27 January in each year commencing on 27 January 2018 up to and including the Maturity Date
(iii) Fixed Coupon Amount(s):		€13.75 per Calculation Amount
(iv) Broken Amount(s):		Not Applicable
(v) Day Count Fraction:		Actual/Actual (ICMA)
(vi) Determination Dates:		27 January in each year
(vii)	Step Up Ratings Change and Step Down Ratings Change:	Applicable
	Step Up Margin	$1.250$ per cent
15. Floating Rate Note Provisions		Not Applicable
	16. Zero Coupon Note Provisions	Not Applicable
	PROVISIONS RELATING TO REDEMPTION
	17. Notice periods for Condition 6(c) (Redemption for Taxation Reasons):	Minimum period: 30 days Maximum period: 60 days
18. Issuer Call		Applicable

	(i) Optional Redemption Date(s):		but excluding 27 January 2025	Any date from and including 27 October 2024 to
	(ii)	Optional Redemption Amount and method, if any, of calculation of such amount(s):		€1,000 per Calculation Amount
	(iii)	If redeemable in part:		Not Applicable
	(iv) Notice periods:		Minimum period: 15 days Maximum period: 30 days
	19. Issuer Make-Whole Call				Applicable
	(i) Sterling Make-Whole Redemption:				Not Applicable
	(ii)	Non-Sterling Redemption:		Make-Whole	Applicable
		(a)	Reference Bond:		DBR 1% 08/2024
		(b)	Quotation Time:		10.00 am (Central European time)
		(c)	Redemption Margin:		$+0.250$ per cent
		(d)	If redeemable in part:		Not Applicable
		(e)	Notice Periods:		Minimum period: Maximum period:	15 days 30 days
	20. Issuer Residual Call:		Applicable
	Residual Call Early Redemption Amount:		€1,000 per Calculation Amount
	21. General Investor Put				Not Applicable
	22. Change of Control Investor Put Optional Redemption Amount:		Applicable
			€1,000 per Calculation Amount
	23. Final Redemption Amount				€1,000 per Calculation Amount
	24. Early Redemption Amount Early Redemption Amount payable on $\epsilon$ 1,000 per Calculation Amount redemption for taxation reasons or on event of default:
				GENERAL PROVISIONS APPLICABLE TO THE NOTES
	25. 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

26. New Global Notes:	Yes
27. Additional Financial Centre(s):	London
contract and the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of t

1. Talons for future Coupons to be attached No to Definitive Notes:

Signed on behalf of Imperial Brands Finance PLC:

$\left\vert \mathbf{r}\right\rangle$

By:.................................... Signed on behalf of Imperial Brands PLC: By:............................
Duly authorised , , , , , , , , , , , , , , , , , , , ,

$\frac{1}{2}$

PART B - OTHER INFORMATION

$\mathbf{1}$ . LISTING AND ADMISSION TO TRADING

$(i)$ Listing and admission to trading: Application has been made by the Issuer (or on its behalf) for the Notes to be admitted to trading on the regulated market of the London Stock Exchange and to be listed on the Official List of the UK Listing Authority with effect from 27 January 2017

Estimate of total expenses related to £3,650 $(ii)$ admission to trading:

$2.$ RATINGS

5.

6.

Ratings:

The Notes to be issued are expected to be rated Baa3 (stable) by Moody's Investors Service Ltd and BBB (stable) by Standard & Poor's Credit Market Services Europe Limited.

INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE $3.$

Save for any fees payable to the Managers, so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer. The Managers and their affiliates have engaged, and may in the future engage, in investment banking and/or commercial banking transactions with, any may perform other services for, the Issuer and the Guarantor and their affiliates in the ordinary course of business.

$4.$ REASONS FOR THE OFFER

(i)	Reasons for the offer:	The net proceeds of the issue of the Notes will be used by the Issuer for its general corporate purposes.
(ii)	Estimated net proceeds:	€496,565,000
YIELD (Fixed Rate Notes only)
Indication of yield:		$1.426$ per cent.
		The yield is calculated as at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.
	OPERATIONAL INFORMATION
$\sf (i)$	ISIN:	XS1558013360

Common Code: 155801336 $(ii)$

$(iii)$ Any clearing system(s) other Not Applicable than Euroclear Bank S.A./N.V. and Clearstream Banking, anonyme société and the identification relevant number(s):

Not Applicable

Delivery against payment

• $(iv)$ Delivery:
• Names and addresses of $(v)$ additional Paying Agent(s) (if any):
• $(vi)$ Intended to be held in a manner which would allow Eurosystem eligibility:

Note that the designation "yes" simply Yes. means that the Notes are intended upon issue to be deposited with one of the ICSDs as common safekeeper and does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend upon the ECB being satisfied that Eurosystem eligibility criteria have been met.

7. US SELLING RESTRICTIONS

US Selling Restrictions:

Reg S Compliance Category 2, TEFRA D