Prospectus • Feb 18, 2015
Prospectus
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£500,000,000 Euro Medium Term Note Programme
Arranger and Dealer
Deutsche Bank
AN INVESTMENT IN NOTES ISSUED UNDER THE PROGRAMME INVOLVES CERTAIN RISKS.
YOU SHOULD HAVE REGARD TO THE RISK FACTORS DESCRIBED IN SECTION 2 (RISK FACTORS) OF THIS BASE PROSPECTUS.
This document (the "Base Prospectus") relates to the £500,000,000 Euro Medium Term Note Programme (the "Programme") of Intermediate Capital Group plc (the "Issuer" or "ICG") under which the Issuer may from time to time issue notes ("Notes") denominated in any currency agreed between it and the relevant Dealer(s) (as defined below). The Issuer's payment obligations under the Notes will be guaranteed (the "Guarantee") by the Guarantors (as defined in Appendix B (Terms and Conditions of the Notes) from time to time). This Base Prospectus contains information describing the Issuer's and the Guarantors' respective business activities as well as certain financial information and material risks faced by the Issuer and the Guarantors, and is intended to provide investors with the information necessary to enable them to make an informed investment decision before purchasing any Notes.
The principal amount (being the amount which is used to calculate payments made on each Note) of all Notes for the time being outstanding under the Programme will not exceed £500,000,000 (or its equivalent in other currencies calculated as described in the Dealer Agreement described herein), subject to any increase that may be agreed between the Issuer and the Dealers.
This Base Prospectus is valid for one year from the date hereof and may be supplemented from time to time to reflect any significant new factor, material mistake or inaccuracy relating to the information included in it.
This Base Prospectus relates to the issuance of three different types of Notes: Fixed Rate Notes, on which the Issuer will pay interest at a fixed rate; Floating Rate Notes, on which the Issuer will pay interest at a floating rate; and Zero Coupon Notes, which do not bear interest. Notes may also be issued as a combination of these options.
The contractual terms of any particular issuance of Notes will be comprised of the terms and conditions set out in Appendix B (Terms and Conditions of the Notes) at pages 129 to 154 of this Base Prospectus (the "Conditions"), as completed by a separate Final Terms document, which is specific to that issuance of Notes (the "Final Terms").
The Conditions are comprised of numbered provisions (1 – 17) including generic provisions that are applicable to Notes generally and certain optional provisions that will only apply to certain issuances of Notes.
The following provisions within the Conditions (together with the introductory wording appearing before Condition 1 on page 130) apply to Notes generally:
Condition 12 (Indemnification of the Trustee)
Condition 13 (Replacement of Notes, Coupons and Talons)
The following Conditions contain certain optional provisions that will only apply to certain issuances of Notes:
The applicable Final Terms will specify which optional provisions apply to any particular issuance of Notes.
This Base Prospectus contains all information which is necessary to enable investors to make an informed decision regarding the financial position and prospects of the Issuer and the Guarantors and the rights attaching to the Notes. Some of this information (such as the latest publicly available financial information relating to the Issuer and the Guarantors) is incorporated by reference into the Base Prospectus and some of this information is completed in the Final Terms. Before making any investment decision in respect of any Notes, you should read this Base Prospectus, together with the documents incorporated by reference, as well as the Final Terms relating to such Notes.
The Base Prospectus and the Final Terms relating to any Notes will be made available at the registered office of the Issuer and will be published at: www.londonstockexchange.com/exchange/news/marketnews/market-news-home.html.
While this Base Prospectus includes general information about all Notes, the Final Terms is the document that sets out the specific details of each particular issuance of Notes.
The Final Terms will contain the relevant economic terms applicable to any particular issuance of Notes. The Final Terms will contain, for example:
Wherever the Conditions provide optional provisions, the Final Terms will specify which of those provisions apply to a specific issuance of Notes.
This Base Prospectus includes information that is relevant to all types of Notes that may be issued under the Programme; however, certain sections of this Base Prospectus are relevant to particular types of Notes only.
The following sections are relevant to particular types of Notes only:
As described above, certain of the Conditions provide optional provisions that will only apply to certain issuances of Notes. The Final Terms will specify which optional provisions within the Conditions will apply to a specific issuance of Notes.
Please refer to the section below starting on page ix entitled "How do I use this Base Prospectus?". If you have any questions regarding the content of this Base Prospectus, any Final Terms and/or any Notes or the actions you should take, it is recommended that you seek professional advice from your broker, solicitor, accountant or other independent financial adviser before deciding whether or not to invest.
This Base Prospectus constitutes a base prospectus for the purposes of Article 5.4 of Directive 2003/71/EC (as amended, including by Directive 2010/73/EU) (the "Prospectus Directive") and has been prepared in accordance with the Prospectus Rules of the Financial Conduct Authority (the "FCA"). This document does not constitute an offer to subscribe for any Notes.
Application has been made to the FCA in its capacity as competent authority under the Financial Services and Markets Act 2000 (the "FSMA") (the "UK Listing Authority") for Notes issued under the Programme during the period of 12 months from the date of this Base Prospectus to be admitted to the official list of the UK Listing Authority (the "Official List") and to the London Stock Exchange plc (the "London Stock Exchange") for such Notes to be admitted to trading on the London Stock Exchange's regulated market and, where relevant, through the electronic order book for retail bonds (the "ORB") of the London Stock Exchange. References in this Base Prospectus to Notes being "listed" (and all related references) shall mean that such Notes have been admitted to the Official List and have been admitted to trading on the London Stock Exchange's regulated market and, where relevant, through the ORB. The London Stock Exchange's regulated market is a regulated market for the purposes of Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments (the "Markets in Financial Instruments Directive" or "MiFID").
The Notes may be issued on a continuing basis to Deutsche Bank AG, London Branch (as a dealer under the Programme) and/or any additional dealer appointed under the Programme (and whose appointment has not been terminated) from time to time by the Issuer (each a "Dealer" and together, the "Dealers"), which appointment may be for a specific issue or on an ongoing basis. References in this Base Prospectus to the "relevant Dealer" shall, in the case of an issue of Notes being (or intended to be) subscribed by more than one Dealer, be to all Dealers agreeing to subscribe such Notes.
The Issuer accepts responsibility for the information contained in this Base Prospectus and, in relation to each issue of Notes, the applicable Final Terms for such issue. To the best of the knowledge of the Issuer (having taken all reasonable care to ensure that such is the case) the information contained in this Base Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information.
Each Original Guarantor named in this Base Prospectus accepts responsibility for the information in relation to itself set out in this Base Prospectus in Section 1 (Summary), Section 2 (Risk Factors) in relation to the risks relating to the Group (as defined below) and its business; Section 7 (Description of the Original Guarantors); Section 8 (Selected Financial Information of the Original Guarantors); Section 9 (Information Incorporated by Reference); Section 16 (Additional Information); and in relation to the Guarantee set out in Appendix B (Terms and Conditions of the Notes). To the best of the knowledge of each Original Guarantor (each having taken all reasonable care to ensure that such is the case) such information is in accordance with the facts and does not omit anything likely to affect the import of such information.
Certain terms or phrases in this Base Prospectus are defined in double quotation marks and subsequent references to that term are designated with initial capital letters. The locations in this Base Prospectus where these terms are first defined are set out in Appendix A (Defined Terms) of this Base Prospectus.
In this Base Prospectus, all references to the "Issuer" are to Intermediate Capital Group plc, which is the issuer of the Notes to be issued under the Programme. All references herein to the "Group" are to the Issuer and its consolidated subsidiaries taken as a whole. See Section 5 (Description of Intermediate Capital Group plc) for details of the Issuer's principal subsidiaries.
The Notes to be issued under the Programme are not protected by the Financial Services Compensation Scheme (the "FSCS"). As a result, neither the FSCS nor anyone else will pay compensation to you upon the failure of the Issuer, the Guarantors or the Group as a whole. If the Issuer and/or the Guarantors go out of business or become insolvent, you may lose all or part of your investment in any Notes.
This Base Prospectus, including the Appendices, must be read together with all information which is deemed to be incorporated in this Base Prospectus by reference (see Section 9 (Information Incorporated by Reference)).
The Issuer has a long term debt rating of BBB- from each of Fitch Ratings Limited ("Fitch") and Standard and Poor's Credit Market Services Europe Limited ("S&P"). Each of Fitch and S&P is established in the European Union and registered under Regulation (EC) No. 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies, as amended (the "CRA Regulation"). A credit rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, change or withdrawal at any time by the assigning rating organisation. The Programme is not rated by any credit rating agency.
The Notes may not be a suitable investment for all investors. Each potential investor in the Notes must determine the suitability of any investment in light of its own circumstances. In particular, each potential investor should consider, either on its own or with the help of its financial and other professional advisers, whether it:
Legal investment considerations may restrict certain investments. The investment activities of certain investors are subject to legal investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal advisers to determine whether and to what extent (i) Notes are legal investments for it, (ii) Notes can be used as collateral for various types of borrowing and (iii) other restrictions apply to its purchase or pledge of any Notes. Financial institutions should consult their legal advisers or the appropriate regulators to determine the appropriate treatment of Notes under any applicable risk-based capital or similar rules.
No person is or has been authorised by the Issuer, the Guarantors, the Dealers or Deutsche Trustee Company Limited (the "Trustee") to give any information or to make any representation not contained in or not consistent with this Base Prospectus and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuer, the Guarantors, the Arranger, any of the Dealers or the Trustee.
Neither the publication of this Base Prospectus nor the offering, sale or delivery of the Notes shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer or the Guarantors since the date of this Base Prospectus or that there has been no adverse change in the financial position of the Issuer or the Guarantors since the date of this Base Prospectus or that any other information supplied in connection with the offering of the Notes is correct as of any time subsequent to the date indicated in the document containing the same. Neither the Arranger, nor any of the Dealers nor the Trustee undertakes to review the financial condition or affairs of the Issuer or the Guarantors during the life of the Notes to be issued under the Programme, or to advise any investor in the Notes of any information coming to their attention.
Neither this Base Prospectus nor any other information supplied in connection with the offering of any Notes should be considered as a recommendation by the Issuer, any Guarantor, any Dealer or the Trustee that any recipient of this Base Prospectus or any other information supplied in connection with the offering of the Notes should purchase any Notes. Each potential purchaser of Notes should determine for itself the relevance of the information contained in this Base Prospectus and any purchase of Notes should be based upon such investigation as it deems necessary.
The distribution of this Base Prospectus and the offering or sale of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Base Prospectus comes are required by the Issuer, the Guarantors, the Arranger and the Dealers to inform themselves about and to observe any such restriction. The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended, (the "Securities Act") and are subject to U.S. tax law requirements. Subject to certain exceptions, Notes may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons (see Section 10 (Subscription and Sale)).
Neither the Arranger, nor the Dealers nor the Trustee has independently verified or confirmed the information contained in this Base Prospectus. No representation, warranty or undertaking, express or implied, is made by the Arranger, the Dealers or the Trustee as to the accuracy or completeness of the information contained in this Base Prospectus or any other information provided by the Issuer or the Guarantors in connection with the offering of any Notes. Neither the Arranger, nor the Dealers nor the Trustee accepts liability in relation to the information contained in this Base Prospectus or any other information provided by the Issuer or Guarantors in connection with the offering of any Notes or their distribution.
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, or the Guarantors and their affiliates in the ordinary course of business.
In this Base Prospectus, reference to websites or uniform resource locators (URLs) are inactive textual references. The contents of any such website or URL shall not form part of, or be deemed to be incorporated into, this Base Prospectus.
In connection with the issue of any Tranche of Notes, one or more relevant Dealer or Dealers (the "Stabilising Manager(s)") (or any person acting on behalf of any Stabilising Manager(s)) may overallot Notes or effect transactions with a view to supporting the market price of the Notes at a level higher than that which might otherwise prevail. However, there is no assurance that any Stabilising Manager(s) (or any person acting on behalf of any Stabilising Manager) will undertake stabilisation action. Any stabilisation action may begin on or after the date on which adequate public disclosure of the final terms of the offer of the relevant Tranche is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date of the relevant Tranche and 60 days after the date of the allotment of the relevant Tranche. 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.
This Base Prospectus includes statements that are, or may be deemed to be, 'forward-looking statements'. These forward-looking statements can be identified by the use of forward-looking expressions, including the terms 'believes', 'estimates', 'anticipates', 'expects', 'intends', 'may', 'will', or 'should' or, in each case, their negative or other variations or similar expressions, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Base Prospectus and include, but are not limited to, the following: statements regarding the intentions, beliefs or current expectations of the Issuer, the Guarantors and the Group concerning, amongst other things, the Group's results of operations, financial condition, liquidity, prospects, growth, strategies and the industries in which the Group operates.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the actual results of the Group's operations, financial condition and liquidity, and the development of the countries and the industries in which the Group operates may differ materially from those described in, or suggested by, the forward-looking statements contained in this Base Prospectus. In addition, even if the results of operations, financial condition and liquidity, and the development of the countries and the industries in which the Group operates, are consistent with the forward-looking statements contained in this Base Prospectus, those results or developments may not be indicative of results or developments in subsequent periods. These and other factors are discussed in more detail under Section 2 (Risk Factors). Many of these factors are beyond the control of the Issuer, the Guarantors and the Group. Should one or more of these risks or uncertainties materialise, or should underlying assumptions on which the forward-looking statements are based prove incorrect, actual results may vary materially from those described in this Base Prospectus as anticipated, believed, estimated or expected. Except to the extent required by laws and regulations, the Issuer and the Guarantors do not intend, and do not assume any obligation, to update any forward-looking statements set out in this Base Prospectus.
This Base Prospectus is based on English law in effect as of the date of issue of this Base Prospectus. Except to the extent required by laws and regulations, the Issuer and the Guarantors do not intend, and do not assume any obligation, to update this Base Prospectus in light of the impact of any judicial decision or change to English law or administrative practice after the date of this Base Prospectus.
In certain circumstances, investors may also hold interests in the Notes through Euroclear UK & Ireland Limited (formerly CREST Co Limited) ("CREST") through the issuance of dematerialised depository interests (i.e. securities without any physical document of title which are distinct from the Notes), held, settled and transferred through CREST ("CREST Depository Interests" or "CDIs"), representing the interests in the relevant Notes underlying the CDIs (the "Underlying Notes"). CDIs are independent securities constituted under English law and transferred through CREST and will be issued by CREST Depository Limited pursuant to a global deed poll dated 25 June 2001 (as subsequently modified, supplemented and/or restated). Neither the Notes nor any rights attached to the Notes will be issued, settled, held or transferred within the CREST system other than through the issue, settlement, holding or transfer of CDIs. Holders of CDIs will not be entitled to deal directly in the Notes and, accordingly, all dealings in the Notes will be effected through CREST in relation to the holding of CDIs. Investors should note that the CDIs are the result of the CREST settlement mechanics and are not the subject of this Base Prospectus.
You should read and understand fully the contents of this Base Prospectus, including any documents incorporated by reference, and the relevant Final Terms before making any investment decision in respect of any Notes. This Base Prospectus contains important information about the Issuer, the Original Guarantors, the Group, the terms of the Notes and the terms of the Guarantee; as well as describing certain risks relating to the Issuer, the Original Guarantors, the Group and their businesses and also other risks relating to an investment in the Notes generally. An overview of the various sections comprising this Base Prospectus is set out below.
The "Summary" section sets out in tabular format standard information which is arranged under standard headings and which the Issuer is required, for legal and regulatory reasons, to include in a prospectus summary for a base prospectus of this type. This section also provides the form of the "issue specific summary" information, which will be completed and attached to the Final Terms relating to any Notes which are to be offered under the Programme.
Section 2 (Risk Factors) describes the principal risks and uncertainties which may affect the ability of the Issuer and/or the Guarantors to fulfil their respective obligations under the Notes and/or the Guarantee.
Section 3 (Information About the Programme) provides an overview of the Programme in order to assist the reader.
Section 4 (How the Return on Your Investment is Calculated) sets out worked examples of how the interest amounts are calculated under a variety of scenarios and how the redemption provisions will affect the Notes.
Section 5 (Description of Intermediate Capital Group plc) provides certain information about the Issuer and its group structure, as well as the nature of the Group's business. See also Section 6 (Selected Financial Information of Intermediate Capital Group plc) for summary financial information relating to the Group.
Section 7 (Description of the Original Guarantors) provides a description of the subsidiaries of the Issuer who are the Original Guarantors under the Programme. See also Section 8 (Selected Financial Information of the Original Guarantors) for summary financial information relating to each Original Guarantor.
Section 9 (Information Incorporated by Reference) sets out the information that is deemed to be incorporated by reference into this Base Prospectus. This Base Prospectus should be read together with all information which is deemed to be incorporated into this Base Prospectus by reference.
Section 10 (Subscription and Sale) contains a description of the material provisions of the Dealer Agreement, which includes certain selling restrictions applicable to making offers of the Notes under the Programme.
Section 11 (Taxation) provides a brief outline of certain United Kingdom taxation implications regarding Notes that may be issued under the Programme, as well as certain other taxation considerations which may be relevant to the Notes.
Section 12 (Clearing and Settlement) briefly sets out certain information relating to the clearing systems and settlement of securities in CREST.
Section 13 (Important Information Relating to Public Offers of Notes) contains important information regarding the basis on which this Base Prospectus may be used for the purpose of making public offers of Notes.
Section 14 (Use of Proceeds) describes the manner in which the Issuer intends to use the proceeds from issues of Notes under the Programme.
Section 15 (Forms of Final Terms) sets out the templates for the Final Terms that the Issuer will prepare and publish when offering any Notes under the Programme. Any such completed Final Terms will detail the relevant information applicable to each respective offer, amended to be relevant only to the specific Notes being offered.
Section 16 (Additional Information) sets out further information on the Issuer, the Guarantors and the Programme which the Issuer is required to include under applicable rules. This includes the availability for inspection of certain documents relating to the Programme, confirmations from the Issuer and the Guarantors and details regarding the listing of the Notes.
The section "Appendix A (Defined Terms)" provides a glossary of certain technical terms used in this Base Prospectus as well as an index of defined terms identifying the locations in this Base Prospectus where terms are defined.
The section "Appendix B (Terms and Conditions of the Notes)" sets out the terms and conditions which apply to any Notes that may be issued under the Programme. The relevant Final Terms relating to any offer of Notes will complete the terms and conditions of those Notes and should be read in conjunction with this section.
The section "Appendix C (Summary of Provisions Relating to the Notes while in Global Form)" provides a summary of certain terms of the Global Notes which apply to the Notes while they are held in global form by the clearing systems, some of which include minor and/or technical modifications to the terms and conditions of the Notes as set out in this Base Prospectus.
A "Table of Contents" identifying each section of this Base Prospectus with corresponding page references is included on the next page.
| 1. | SUMMARY 1 | |
|---|---|---|
| 2. | RISK FACTORS 18 | |
| 3. | INFORMATION ABOUT THE PROGRAMME 33 | |
| 4. | HOW THE RETURN ON YOUR INVESTMENT IS CALCULATED 40 | |
| 5. | DESCRIPTION OF INTERMEDIATE CAPITAL GROUP PLC 45 | |
| 6. | SELECTED FINANCIAL INFORMATION OF INTERMEDIATE CAPITAL GROUP PLC 57 | |
| 7. | DESCRIPTION OF THE ORIGINAL GUARANTORS 61 | |
| 8. | SELECTED FINANCIAL INFORMATION OF THE ORIGINAL GUARANTORS 66 | |
| 9. | INFORMATION INCORPORATED BY REFERENCE 70 | |
| 10. | SUBSCRIPTION AND SALE 72 | |
| 11. | TAXATION 77 | |
| 12. | CLEARING AND SETTLEMENT 83 | |
| 13. | IMPORTANT INFORMATION RELATING TO PUBLIC OFFERS OF NOTES 87 | |
| 14. | USE OF PROCEEDS 94 | |
| 15. | FORMS OF FINAL TERMS 96 | |
| 16. | ADDITIONAL INFORMATION 115 | |
| APPENDIX A – DEFINED TERMS 118 | ||
| APPENDIX B – TERMS AND CONDITIONS OF THE NOTES 129 | ||
| APPENDIX C – SUMMARY OF PROVISIONS RELATING TO THE NOTES WHILE IN GLOBAL FORM . 155 |
The following is a summary of information relating to Intermediate Capital Group plc, the Original Guarantors and the Programme.
Summaries are made up of disclosure requirements known as 'Elements'. These Elements are numbered in Sections A – E (A.1 – E.7). This summary contains all the Elements required to be included in a summary for these types of security and this type of issuer. As some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of security and issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of 'not applicable'.
| Section A - Introduction and Warnings | |||||
|---|---|---|---|---|---|
| Element | Title | ||||
| A.1 | Warning and introduction | This summary must be read as an introduction to the Base Prospectus. Any decision to invest in the Notes should be based on a consideration of the Base Prospectus as a whole, including any documents incorporated by reference, by any investor. Where a claim relating to the information contained in the Base Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member States of the European Economic Area where the claim is brought, have to bear the costs of translating the Base Prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary, including any translation hereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Base Prospectus or it does not provide, when read together with the other parts of the Base Prospectus, key information in order to aid investors when considering whether to invest in the Notes. |
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| A.2 | Consent by the Issuer and the Guarantors to the use of the Base Prospectus for subsequent resale or final placement of securities by financial intermediaries |
Notes with a denomination of less than €100,000 (or its equivalent in any other currency) may be offered in circumstances where there is no exemption from the obligation under Article 3.2 of Directive 2003/71/EC (as amended, including by Directive 2010/73/EU) (the "Prospectus Directive") to publish a prospectus. Any such offer is referred to herein as a "Public Offer". In relation to Notes issued under the Programme which are to be offered as part of a Public Offer, the Issuer and the Guarantors may provide their consent to the use of the Base Prospectus for subsequent resale or final placement of Notes by financial intermediaries, provided that such subsequent resale or final placement of Notes is made in the United Kingdom during the relevant offer period and subject to certain other conditions attached to the consent which are relevant for the use of the Base Prospectus. Issue specific summary: |
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| [Not Applicable; [the Notes are issued in denominations of at least €100,000 (or its equivalent in any other currency)] [the Notes are issued in denominations of less than €100,000 (or its equivalent in any other currency) but there will be no Public Offer of the Notes].] |
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| [Consent: The Issuer and the Guarantors each consent to the use of the Base Prospectus and the Final Terms with respect to the subsequent resale or final placement of the Notes subject to the following conditions: |
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| (i) the Public Offer is only made in the United Kingdom; |
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| (ii) the Public Offer is only made during the period from, and including, [ ] and ending at [ ], or such earlier date as may be published by the Issuer (the "Offer Period"); |
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| (iii) the Public Offer is only made by the Manager[s][, [ ] [and] [each financial intermediary whose name is published on the Issuer's website (www.icgplc.com/investments) and identified as being appointed as an Authorised Offeror in respect of the Public Offer] [and] [any financial intermediary which is authorised to make such offers under the Markets in Financial Instruments Directive (Directive 2004/39/EC)] ([each] an "Authorised Offeror")[; and] |
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| (iv) [ ]. |
| [Any financial intermediary who wishes to use the Base Prospectus in connection with a Public Offer is required, for the duration of the Offer Period, to publish on its website that it is using the Base Prospectus for such Public Offer in accordance with the consent of each of the Issuer and the Guarantors and the conditions attached thereto.] |
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| A Public Offer may only be made, subject to the conditions set out above, during the Offer Period by the Issuer, the Guarantors, the Manager[s] and/or the other Authorised Offerors. |
| Other than as set out above, neither the Issuer, nor the Guarantors nor any Manager has authorised the making of any Public Offer of Notes by any person in any circumstances and any such person is not permitted to use the Base Prospectus in connection with any offer of Notes. Any such offers are not made on behalf of the Issuer, the Guarantors or by or on behalf of any Manager or any other Authorised Offeror and neither the Issuer, nor the Guarantors, nor any Manager nor any other Authorised Offeror has any responsibility or liability for the actions of any person making such unauthorised offers. |
| An investor intending to acquire or acquiring any Notes from an Authorised Offeror will do so, and offers and sales of the Notes to an investor by an Authorised Offeror will be made, in accordance with any terms and other arrangements in place between such Authorised Offeror and such investor including as to price, allocations and settlement arrangements (the "Terms and Conditions of the Public Offer"). Neither the Issuer nor the Guarantors will be a party to any such arrangements with investors in connection with the offer or sale of the Notes and, accordingly, the Base Prospectus will not contain such information. |
| INFORMATION ON THE TERMS AND CONDITIONS OF THE PUBLIC OFFER BY ANY AUTHORISED OFFEROR WILL BE PROVIDED BY THE AUTHORISED OFFEROR AT THE TIME OF SUCH PUBLIC OFFER. |
| Section B - Summary Information on the Issuer and the Original Guarantors | ||||
|---|---|---|---|---|
| Element | Title | |||
| B.1 | Legal and commercial name of the Issuer |
Intermediate Capital Group plc. | ||
| B.2 | Domicile and legal form | The Issuer is incorporated in England and Wales under the Companies Act 1985 as a public limited company with registered number 02234775. |
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| B.4b | Known trends affecting the Issuer |
The Issuer operates in the fund management industry with particular focus on the alternative investments market. This market includes senior and mezzanine lending to mid-market companies and real estate. These markets are affected by various changes and fluctuations that include governmental regulation, interest rate movements, the availability of credit in the financial markets and general levels of economic confidence. However, there are no known current and specific trends that are materially affecting the Issuer or the industry in which it operates. |
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| B.5 | Description of the Group | The Issuer is the ultimate parent company of the Group (as defined in Element B.15 below). The operations of the Group are generally conducted through the Issuer and the Issuer's direct and indirect subsidiaries. Accordingly, the Issuer is dependent on the performance of such members of the Group. The Issuer is listed on the London Stock Exchange. |
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| B.9 | Profit forecast or estimate | Not applicable; the Issuer has not made any profit forecast or estimate. | ||
| B.10 | Qualifications in the Auditors' report |
Not applicable; there are no qualifications in the audit reports to the Issuer's annual report and accounts of the Issuer and its consolidated subsidiaries for the financial years ended 31 March 2014 and 31 March 2013. |
| B.12 | Selected key financial | The following tables present the consolidated income statement, consolidated | ||
|---|---|---|---|---|
| information, regarding the | statements of financial position and consolidated statement of cash flow of the Issuer | |||
| Issuer | for, and as at, the years ended 31 March 2014 and 31 March 2013 and for, and as at, | |||
| the six months ended 30 September 2014. The information has been derived from the | ||||
| Issuer's unaudited consolidated half year financial statements and the Issuer's audited | ||||
| consolidated financial statements audited by Deloitte LLP. | ||||
| Audited Consolidated Annual Financial Statements | ||||
| For the year ended | ||||
| Consolidated Income Statement | 31 March | |||
| 2014 | 2013 | |||
| (£m, except per share information) | ||||
| Profit before tax | 158.7 | 142.6 | ||
| Tax expense | (21.3) | (18.8) | ||
| Profit for the year | 137.4 | 123.8 | ||
| Attributable to: | ||||
| Equity holders of the parent | 137.2 | 124.4 | ||
| Non-controlling interests | 0.2 | (0.6) | ||
| 137.4 | 123.8 | |||
| Earnings per share | 35.7p | 32.1p | ||
| Diluted earnings per share | 35.6p | 32.1p | ||
| Consolidated Statement of Financial Position | As at 31 March | |||
| 2014 | 2013 | |||
| (£m) | (£m) | |||
| Total assets | 2,465.4 | 2,899.4 | ||
| Total equity and liabilities | 2,465.4 | 2,899.4 | ||
| For the year ended | ||||
| Consolidated Statement of Cash Flow | 31 March | |||
| 2014 | 2013 | |||
| (£m) | (£m) | |||
| Net increase/(decrease) in cash | 130.1 | (106.8) | ||
| Net cash and cash equivalents at end of year | 164.8 | 41.8 | ||
| Unaudited Condensed Consolidated Financial Statements | ||||
| For the six months ended | ||||
| Condensed Consolidated Income Statement | 30 September* | |||
| 2014 | Restated 2013 |
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| (£m, except per share | ||||
| information) | ||||
| Profit before tax | 85.3 | 155.3 | ||
| Tax expenses | (15.1) | (32.4) | ||
| Profit for the period | 70.2 | 122.9 | ||
| Attributable to: | ||||
| Equity holders of the parent | 69.6 | 123.0 | ||
| Non-controlling interests | 0.6 | (0.1) | ||
| 70.2 | 122.9 | |||
| Earnings per share | 18.2p | 32.0p | ||
| Diluted earnings per share | 18.2p | 31.9p | ||
| Condensed Consolidated Statement of Financial | ||||
|---|---|---|---|---|
| Position | As at 30 September* | |||
| Restated | ||||
| 2014 | 2013 | |||
| (£m) | (£m) | |||
| Total assets | 2,159.5 | 2,431.2 | ||
| Total equity and liabilities | 2,159.5 | 2,431.2 | ||
| Condensed Consolidated Statement of Cash Flow | For the six months ended 30 September |
|||
| Restated | ||||
| 2014 | 2013 | |||
| (£m) | (£m) | |||
| Net increase/(decrease) in cash | 30.0 | 147.1 | ||
| Net cash and cash equivalents at end of period | 140.2 | 184.1 | ||
| * In the 30 September 2014 unaudited consolidated financial statements, the 30 September 2013 balances were restated as the Issuer became an Investment Entity under International Financial Reporting Standard (IFRS) 10 - 'Consolidated Financial Statements' and accounted for investment entities it controlled at fair value where they were previously consolidated. |
||||
| There has been no significant change in the financial or trading position of the Issuer or | ||||
| the Group since 30 September 2014 and there has been no material adverse change in | ||||
| the prospects of the Issuer or the Group since 31 March 2014. | ||||
| B.13 | Recent material events relevant to the Issuer's solvency |
Not applicable; there have been no recent events particular to the Issuer which are to a material extent relevant to the evaluation of the Issuer's solvency. |
||
| B.14 | Dependency on other | |||
| members of the Group | As the parent company of the Group, the Issuer is reliant on other members of the Group to provide fund management services as well as to hold other assets that are ultimately included in the consolidated balance sheet of the Group. |
|||
| B.15 | Issuer's principal activities | The Issuer along with its consolidated subsidiaries (the "Group") structures and provides (a) mezzanine finance, which is debt that ranks ahead of equity but behind the debt of other parties, such as bank lenders, (b) equity, and (c) leveraged debt, which includes loans or other forms of debt which is incurred specifically to fund the acquisition of a company or part of it and where assets of the acquired company are usually used as security for the loans. |
||
| The Issuer invests in the above products on behalf of third parties (the fund management business) and on its own behalf. The Issuer also invests capital in its third party funds. |
||||
| The Issuer is the ultimate parent company of the Group. | ||||
| B.16 | Ownership structure | The Issuer is not directly or indirectly owned or controlled. | ||
| B.17 | Credit ratings | The Issuer has been rated BBB- by each of Fitch Ratings Limited ("Fitch") and Standard and Poor's Credit Market Services Europe Limited ("S&P"). |
||
| Programme summary: Notes issued under the Programme may be rated or unrated. Where a Tranche of Notes is to be rated, such rating will not necessarily be the same as any rating assigned to the Issuer or any other Notes. |
||||
| Issue specific summary: [The Notes [are not/have been/are expected to be] rated.]: | ||||
| [Rating agency]: [ ] |
||||
| [[Rating agency] is established in the European Union and registered under Regulation (EC) No. 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies, as amended (the "CRA Regulation").] |
| B.18 | Nature and scope of the guarantee |
Each of the Guarantors has, pursuant to the trust deed (the "Trust Deed") dated 28 February 2014 between the Issuer, the Original Guarantors and Deutsche Trustee Company Limited (the "Trustee"), jointly and severally, unconditionally and irrevocably, subject to release of any such Guarantor under the Terms and Conditions of the Notes, guaranteed the due payment of all sums expressed to be payable by the Issuer under the Trust Deed, the Notes and the coupons relating to them. Under the Terms and Conditions of the Notes, if any subsidiary of the Issuer provides a guarantee in respect of any facility agreement of the Group under which indebtedness of £100,000,000 (or its equivalent in other currencies) or more is incurred, the Issuer will procure that such subsidiary will accede as a guarantor in respect of any Notes issued under the Programme. Similarly, if any subsidiary of the Issuer ceases to provide a guarantee in respect of any such facility agreement of the Group, such guarantor will in certain circumstances cease to be a guarantor in respect of the Notes. |
||
|---|---|---|---|---|
| B.19 | Information about the Guarantors |
Information about the Original Guarantors (as applicable) is set out below. | ||
| B.19/ B.1 |
Legal and commercial name of the Guarantor |
Intermediate Capital Investments Limited ("ICIL"). | ||
| B.19/ B.2 |
Domicile and legal form | ICIL is incorporated in England and Wales under the Companies Act 1985 as a private limited company with registered number 02327070. |
||
| B.19/ B.4b |
Known trends affecting the Guarantor |
Not applicable; there are no known trends affecting ICIL and the industries in which it operates. |
||
| B.19/ B.5 |
Description of the Group | ICIL is an asset-owning consolidated subsidiary of the Issuer. | ||
| B.19/ B.9 |
Profit forecast or estimate | Not applicable; ICIL has not made any profit forecast or estimate. | ||
| B.19/ B.10 |
Qualifications in the Auditors' report |
Not applicable; there are no qualifications in the audit report on the historical information. |
||
| B.19/ B.12 |
Selected key financial information regarding the Guarantors |
ICIL The following tables present the profit and loss account, balance sheet and cash flow statement of ICIL for, and as at, the years ended 31 March 2014 and 31 March 2013. The information has been derived from ICIL's audited financial statements audited by Deloitte LLP. Profit & Loss Account For the year ended 31 March 2014 2013 |
||
| Profit on ordinary activities after taxation | (£'000) 70,044 |
(£'000) 42,272 |
||
| Balance Sheet | As at 31 March | |||
| 2014 (£'000) |
2013 (£'000) |
|||
| Total assets | 270,465 | 309,920 | ||
| Total capital employed | 70,314 | 70,270 | ||
| Cash Flow Statement | For the year ended 31 March | |||
| 2014 (£'000) |
2013 (£'000) |
|||
| Net cash outflow from operating activities | - | (88) | ||
| Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year |
- - |
88 - |
||
| There has been no significant change in the financial or trading position of ICIL and no material adverse change in the prospects of ICIL since 31 March 2014. |
| B.19/ B.13 |
Recent material events particular to the Guarantor's solvency |
Not applicable; there have been no recent events particular to ICIL which are to a material extent relevant to the evaluation of ICIL's solvency. |
||
|---|---|---|---|---|
| B.19/ B.14 |
Dependency on other members of the Group |
As a subsidiary within the Group, ICIL is reliant on other members of the Group to provide fund management services. |
||
| B.19/ B.15 |
Guarantor's principal activities |
ICIL's primary business activities are the making of investments and owning an investment portfolio as part of the Issuer's investment business. |
||
| B.19/ B.16 |
Ownership structure | ICIL is a wholly owned subsidiary of the Issuer. | ||
| B.19/ B.17 |
Ratings | Not applicable; ICIL is not rated. | ||
| B.19/ B.1 |
Legal and commercial name of the Guarantor |
Intermediate Capital Managers Limited ("ICML"). | ||
| B.19/ B.2 |
Domicile and legal form | ICML is incorporated in England and Wales under the Companies Act 1985 as a private limited company with registered number 02327504. |
||
| B.19/ B.4b |
Known trends affecting the Guarantor |
Not applicable; there are no known trends affecting ICML and the industries in which it operates. |
||
| B.19/ B.5 |
Description of the Group | ICML is a consolidated subsidiary of the Issuer providing fund management services to both third party investors and other companies within the Group. |
||
| B.19/ B.9 |
Profit forecast or estimate | Not applicable; ICML has not made any profit forecast or estimate. | ||
| B.19/ B.10 |
Qualifications in the Auditors' report |
Not applicable; there are no qualifications in the audit report on the historical information. |
||
| B.19/ B.12 |
Selected key financial information regarding the Guarantors |
ICML The following tables present the profit and loss account, balance sheet and cash flow statement of ICML for, and as at, the years ended 31 March 2014 and 31 March 2013. The information has been derived from ICML's audited financial statements audited by Deloitte LLP. |
||
| Profit & Loss Account For the year ended 31 March* |
||||
| 2014 (£'000) |
Restated 2013 (£'000) |
|||
| Profit on ordinary activities after taxation | 21,217 | 37,708 | ||
| Balance Sheet | As at 31 March* | Restated | ||
| 2014 (£'000) |
2013 (£'000) |
|||
| Total assets Total equity and reserves |
122,306 28,762 |
102,691 33,545 |
||
| Cash Flow Statement | For the year ended 31 March* 2014 |
Restated 2013 |
||
| Cash and cash equivalents at the beginning of the year | (£'000) - |
(£'000) 1 |
||
| Cash and cash equivalents at the end of the year | - | - | ||
| * The 31 March 2013 balances were restated in the 31 March 2014 financial statements as ICML prepared its financial statements in accordance with IFRS (previously United Kingdom Generally Accepted Accounting Practice (UK GAAP)) for the first time. |
||||
| There has been no significant change in the financial or trading position of ICML and no material adverse change in the prospects of ICML since 31 March 2014. |
| B.19/ B.13 |
Recent material events particular to the Guarantor's solvency |
Not applicable; there have been no recent events particular to ICML which are to a material extent relevant to the evaluation of ICML's solvency. |
||
|---|---|---|---|---|
| B.19/ B.14 |
Dependency on other members of the Group |
As a subsidiary within the Group, ICML is reliant on other members of the Group to hold the assets that represent commitments to the funds that it is a fund manager for. |
||
| B.19/ B.15 |
Guarantor's principal activities |
ICML's primary business activity is to act as the investment advisor to the Issuer's fund management business. |
||
| B.19/ B.16 |
Ownership structure | ICML is a wholly owned subsidiary of the Issuer. | ||
| B.19/ B.17 |
Ratings | Not applicable; ICML is not rated. | ||
| B.19/ B.1 |
Legal and commercial name of the Guarantor |
Intermediate Investments LLP ("IIL"). | ||
| B.19/ B.2 |
Domicile and legal form | IIL is incorporated under the Limited Liability Partnerships Act 2000 and registered in England and Wales as a limited liability partnership with registered number OC323795. |
||
| B.19/ B.4b |
Known trends affecting the Guarantor |
Not applicable; there are no known trends affecting IIL and the industries in which it operates. |
||
| B.19/ B.5 |
Description of the Group | IIL is an asset-owning consolidated subsidiary of the Issuer. | ||
| B.19/ B.9 |
Profit forecast or estimate | Not applicable; IIL has not made any profit forecast or estimate. | ||
| B.19/ B.10 |
Qualifications in the Auditors' report |
Not applicable; there are no qualifications in the audit report on the historical information. |
||
| B.19/ B.12 |
Selected key financial information regarding the Guarantors |
IIL The following tables present the profit and loss account, balance sheet and cash flow statement of IIL for, and as at, the years ended 31 March 2014 and 31 March 2013. The information has been derived from IIL's audited financial statements audited by Deloitte LLP. |
||
| Profit & Loss Account | For the year ended 31 March* | |||
| 2014 | Restated 2013 |
|||
| Result for the financial year available for discretionary division among members |
(£'000) - |
(£'000) - |
||
| Balance Sheet | As at 31 March* 2014 |
Restated 2013 |
||
| Net assets attributable to members Total members' interests |
(£'000) 77,379 77,379 |
(£'000) 77,379 77,379 |
||
| Cash Flow Statement | For the year ended 31 March* 2014 |
Restated 2013 |
||
| Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year |
(£'000) - - |
(£'000) - - |
||
| * The 31 March 2013 balances were restated in the 31 March 2014 financial statements as IIL prepared its financial statements in accordance with IFRS (previously UK GAAP) for the first time. |
||||
| There has been no significant change in the financial or trading position of IIL and no material adverse change in the prospects of IIL since 31 March 2014. |
| B.19/ B.13 |
Recent material events particular to the Guarantor's solvency |
Not applicable; there have been no recent events particular to IIL which are to a material extent relevant to the evaluation of the IIL's solvency. |
|---|---|---|
| B.19/ B.14 |
Dependency on other members of the Group |
As a subsidiary within the Group, IIL is reliant on other members of the Group to provide fund management services. |
| B.19/ B.15 |
Principal activities | IIL's primary business activity is that of holding and managing an investment portfolio as part of the Issuer's investment business. |
| B.19/ B.16 |
Ownership structure | IIL is indirectly controlled and owned by the Issuer. |
| B.19/ B.17 |
Ratings | Not applicable; IIL is not rated. |
| In addition, in certain circumstances, investors may also hold interests in the Notes indirectly through Euroclear UK & Ireland Limited ("CREST") through the issuance of dematerialised depository interests issued, held, settled and transferred through CREST ("CDIs"). CDIs represent interests in the relevant Notes underlying the CDIs; the CDIs are not themselves Notes. CDIs are independent securities distinct from the Notes, are constituted under English law and transferred through CREST and will be issued by CREST Depository Limited pursuant to the global deed poll dated 25 June 2001 (as subsequently modified, supplemented and/or restated). CDI holders will not be entitled to deal directly in the Notes. Issue specific summary: |
|||||
|---|---|---|---|---|---|
| Series number: | [ ] |
||||
| Tranche number: | [ ] |
||||
| Aggregate Principal Amount: | |||||
| (i) Series: |
[ ] |
||||
| (ii) Tranche: |
[ ] |
||||
| Issue Price: | [ ] per cent. of the Aggregate Principal Amount [plus accrued interest from [ ]] |
||||
| Specified Denomination(s): | [ ] |
||||
| Form of the Notes: | [Temporary Global Note exchangeable for permanent Global Note which is exchangeable for Definitive Notes only in the limited circumstances specified in the permanent Global Note] |
||||
| [Temporary Global Note exchangeable for Definitive Notes on and after the Exchange Date] |
|||||
| [Permanent Global Note exchangeable for Definitive Notes only in the limited circumstances specified in the permanent Global Note] |
|||||
| International Securities Identification Number (ISIN): |
[ ] |
||||
| Common Code: | [ ] |
||||
| C.2 | Currency of the Notes | Programme summary: | |||
| Subject to compliance with all relevant laws, regulations and directives, Notes may be issued in any currency agreed between the Issuer and the relevant Dealer or Dealers. |
|||||
| Issue specific summary: | |||||
| The Specified Currency of the Notes is [ | ]. | ||||
| C.5 | A description of any restriction on the free |
Programme summary: | |||
| transferability of the Notes | The Notes will be freely transferable. However, the primary offering of any Notes will be subject to offer restrictions in the United States, the European Economic Area (including the United Kingdom), Guernsey, the Isle of Man, Japan and Jersey and to any applicable offer restrictions in any other jurisdiction in which such Notes are offered or sold. The Issuer is Category 2 for the purposes of Regulation S under the United States Securities Act 1933. |
| Description of the rights attached to the Notes |
Status of the Notes and the Guarantee: | |
|---|---|---|
| The Notes are unsecured obligations of the Issuer and therefore do not benefit from any security. The Notes rank pari passu (i.e. equally in right of payment), without any preference among themselves, with all other present and future unsecured obligations of the Issuer, but in the event of insolvency, only to the extent permitted by applicable laws relating to creditors' rights. |
||
| Similarly, the obligations of each Guarantor under the Guarantee are unsecured obligations of the relevant Guarantor and shall at all times (subject as aforesaid) rank pari passu, without any preference among themselves, with all other present and future unsecured obligations of such Guarantor but, in the event of insolvency, only to the extent permitted by applicable laws relating to creditors' rights. |
||
| Negative pledge: | ||
| The Terms and Conditions of the Notes contain a negative pledge provision. In general terms, a negative pledge provision restricts an issuer of unsecured bonds from granting security over assets for other comparable bond financings. Under the negative pledge provision in the Terms and Conditions of the Notes, therefore, neither the Issuer, nor any Guarantor nor any other material subsidiary of the Issuer may create, assume or permit to subsist any security upon the whole or any part of their undertaking, assets or revenues to secure any bond type debt without securing the Notes and the obligations of the Guarantors under the Guarantee equally, subject to certain exceptions. |
||
| Events of default: | ||
| An event of default generally refers to a breach by the Issuer, any Guarantor and any material subsidiary of the Group of certain provisions described in the Terms and Conditions of the Notes. Events of default under the Notes include non-payment of principal for seven days; non-payment of interest for 14 days; breach of other obligations under the Notes or the Trust Deed (which breach is not remedied within 30 days); cross-acceleration relating to certain other indebtedness of the Issuer, a Guarantor or any material subsidiary; and certain events related to enforcement, insolvency or winding up of the Issuer, a Guarantor or any material subsidiary. Customary thresholds and grace periods are applicable before certain of the events described above will be deemed to constitute "events of default". |
||
| In addition, (i) in certain circumstances, it will also be necessary for the Trustee to certify that the occurrence of any such event is materially prejudicial to the interests of the holders of the Notes ("Noteholders") before the event will constitute an "event of default" and (ii) certain events will not be deemed to occur to the extent that any such event arises in relation to a Permitted Transaction (generally, any securitisation or other structured finance transaction where the obligations of the Issuer, Guarantor or any material subsidiary are funded by identified property or assets and where recourse to the Issuer, Guarantor or material subsidiary in respect of such obligations is limited to such property or assets). |
||
| Withholding tax: | ||
| All payments of principal and interest made by the Issuer or any Guarantor in respect of the Notes, shall be made free and clear of, and without withholding or deduction for any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within the relevant jurisdiction or any authority therein or thereof having power to tax, unless required by law or pursuant to a voluntary agreement with a taxing authority. In such case the Issuer or any Guarantor shall pay additional amounts as will result in receipt by the holders of the Notes of such amounts as would have been received by them had no such withholding or deduction been required, subject to customary exceptions. |
||
| Meetings of Noteholders: | ||||
|---|---|---|---|---|
| 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 did not vote on the relevant resolution and Noteholders who voted in a manner contrary to the majority. |
||||
| Modification, waiver and substitution: | ||||
| The Trustee may, in certain circumstances, without the consent of Noteholders, agree to (i) any modification of (subject to certain exceptions), or to the waiver or authorisation of any breach or proposed breach of, any of the provisions of the Trust Deed or (ii) the substitution of certain other entities in place of the Issuer, any Guarantor or any previous substituted company as principal debtor or guarantor under the Notes. |
||||
| Governing law: | ||||
| English law. | ||||
| C.9 | Interest and redemption provisions |
Interest Rate: | ||
| Notes may or may not bear interest. Interest-bearing Notes will either bear interest payable at a fixed rate or a floating rate. Interest will be payable on such date or dates as may be specified below. |
||||
| Fixed Rate Notes | ||||
| Issue specific summary: | ||||
| [The Notes are not Fixed Rate Notes.] | ||||
| [Rate)s of Interest: | [ ] per cent. per annum |
|||
| Interest Payment Dates: | [ ] and [ ] in each year] |
|||
| Floating Rate Notes | ||||
| Floating Rate Notes will bear interest determined separately for each Series; either determined on the basis of the applicable 2006 ISDA Definitions (as published by the International Swaps and Derivatives Association, Inc) ("ISDA Determination") or else by reference to LIBOR or EURIBOR, as adjusted for any applicable margin ("Screen Rate Determination"). |
||||
| Issue specific summary: | ||||
| [The Notes are not Floating Rate Notes.] | ||||
| [Interest Period(s): | [ ]] |
|||
| [Specified Interest Payment Dates: | [ ] and [ ] in each year, subject to adjustment in accordance with the Business Day Convention set out below] |
|||
| First Interest Payment Date: | [ ] |
|||
| Business Day Convention: | [Floating Rate Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention] |
|||
| Determination of Rate(s) of Interest: | [Screen Rate Determination/ISDA Determination] |
| Margin(s): | [+/-] [ ] per cent. per annum |
|---|---|
| Minimum Rate of Interest: | [ ] |
| Maximum Rate of Interest: | [ ] |
| Zero Coupon Notes | |
| bear interest. | Zero Coupon Notes will be issued at a discount to their principal amount and will not |
| Issue specific summary: | |
| [The Notes are not Zero Coupon Notes.] | |
| Amortisation Yield: | [ ] |
| Redemption: | |
| Maturity | |
| The relevant Maturity Date for a Series of Notes is specified below. | |
| Issue specific summary: | |
| Maturity Date: | [[ ]/Interest Payment Date falling in or nearest to [ ]]. |
| at [[100] per cent. of their principal amount]. | Unless repaid or purchased earlier, the Issuer will repay the Notes on the Maturity Date |
| Early redemption | |
| limits. | The Issuer may elect to repay the Notes prior to their maturity date in certain circumstances for tax reasons. In addition, if so specified below, the Notes (or only some of them) may be redeemed prior to their maturity date in certain circumstances, including pursuant to an Issuer call option and/or an investor put option. Certain Series of Notes may be redeemed early at the Issuer's option at an amount (a "Make-whole Amount") linked to the relevant UK Government Stock or such other government debt as specified (the "Reference Bond") plus any margin. Certain Series of Notes may also be redeemed early at the Noteholders' option upon the occurrence of a change of control put event, which will be deemed to occur if there is (i) a change of control in 50 per cent. of the Issuer's ordinary share capital or shares in the Issuer carrying more than 50 per cent. of the voting rights, and (ii) the Notes are subject to a ratings downgrade from a rating agency or, if not rated prior to the change of control, the Notes are not assigned a rating of at least investment grade within prescribed time |
| Issue specific summary: | |
| Call Option | [Applicable/Not Applicable] |
| Optional Redemption Date(s): | [ ] |
| Optional Redemption Amount(s): | [[ ] per Calculation Amount] [Make-whole Amount: [Reference Bond] [plus margin: [ ] per cent.]] |
| Notice period: | [ ] |
| If redeemable in part: | |
| (a) Minimum Redemption Amount: |
[ ] per Calculation Amount |
| (b) Maximum Redemption Amount: |
[ ] per Calculation Amount |
| Put Option | [Applicable/Not Applicable] | |||||
|---|---|---|---|---|---|---|
| Optional Redemption Date(s): | [ ] |
|||||
| Optional Redemption Amount(s): | [ ] per Calculation Amount |
|||||
| Notice period: | [ ] |
|||||
| Change of Control Put Option | [Applicable/Not Applicable] | |||||
| Change of Control Redemption Amount: |
[ ] per Calculation Amount |
|||||
| Other Early Redemption | ||||||
| Early Redemption Amount payable on redemption for taxation reasons or on event of default or other early redemption: |
[ ] per Calculation Amount |
|||||
| Indication of Yield | ||||||
| an indication of future yield. | Yield will be calculated on the basis of the Issue Price and is set out below. This is not | |||||
| Issue specific summary: | ||||||
| Yield on the Issue Date: | [ ] |
|||||
| Trustee | ||||||
| Deutsche Trustee Company Limited | ||||||
| C.10 | Derivative component in interest payments |
such as a formula, index or inflation. | Not applicable; there will be no derivative component in any interest payments made in respect of the Notes. Hence payments are not linked to specific market references, |
|||
| C.11 | An indication as to whether the Notes will be the object of |
Programme summary: | ||||
| an application for admission to trading, with a view to their distribution in a regulated market or other equivalent markets with an |
Application has been made to admit Notes issued during the period of 12 months from the date of the Base Prospectus to the Official List and to trading on the London Stock Exchange's regulated market. |
|||||
| indication of the markets in question |
Notes may be admitted to trading through the electronic order book for retail bonds (ORB) on the London Stock Exchange's regulated market. |
|||||
| Issue specific summary: | ||||||
| with effect from or about [ ].] |
[Application [has been] [is expected to be] made by the Issuer (or on its behalf) for the Notes to be listed on the Official List and admitted to trading on the [electronic order book for retail bonds (ORB) of the] regulated market of the London Stock Exchange |
|||||
| [Not Applicable. Please refer to Element C.21 below.] | ||||||
| C.21 | An indication of the market where the Notes will be |
Programme summary: | ||||
| traded and for which the Base Prospectus has been published |
Application has been made to admit Notes issued during the period of 12 months from the date of the Base Prospectus to the Official List and to trading on the London Stock Exchange's regulated market. |
|||||
| Issue specific summary: | ||||||
| of the London Stock Exchange with effect from or about [ | [Application [has been] [is expected to be] made by the Issuer (or on its behalf) for the Notes to be listed on the Official List and admitted to trading on the regulated market ].] |
|||||
| [Not Applicable. Please refer to Element C.11 above.] |
| Section D - Summary Risk Factors | ||||
|---|---|---|---|---|
| Element | Title | |||
| D.2 | Key information on the key risks that are specific to the Issuer/ Guarantors |
• Significant unexpected changes or outcomes, beyond those factored into the Group's strategy and business model, may occur, which could have an adverse impact on the Group's performance or financial position. |
||
| • Poor performance of the Group's investment portfolio could have a material adverse effect on the business, financial condition, results of operations and/or prospects of the Group. |
||||
| • The Group may be unable to raise future investment funds from third parties which could limit the Group's capacity to make new investments, increase its exposure to individual deals and decrease the Group's income from management and advisory fees, performance fees and carried interest. |
||||
| • The removal of a member of the Group as the investment manager for one or more funds would reduce fee income and thus could have a material adverse effect on the business, financial condition, results of operations and prospects of the Group. |
||||
| • The level of repayments on the Group's loan portfolio and consequently on the timing of the realisation of rolled up interest as well as delays in realising minority interests could have a negative impact on the Group's investment capacity. |
||||
| • The Group is exposed to fluctuations in exchange rates which could adversely affect the Group's returns and financial condition. |
||||
| • If the Group cannot retain and motivate its senior investment professionals and other key employees, the Group's business could be adversely affected. |
||||
| • The Issuer may be subject to a withholding tax of 30 per cent. on certain payments to it if it, and in certain cases, an affiliate, does not comply with the applicable information reporting and withholding requirements under Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986 (the "Code"), an intergovernmental agreement entered into in furtherance of such Sections of the Code, any related non U.S. legislation implemented in furtherance of such an intergovernmental agreement or an agreement with a taxing authority pursuant to such Sections of the Code (collectively, "FATCA"). Any such withholding may materially impair the Issuer's ability to make payments on the Notes. |
||||
| D.3 | Key information on the key risks that are specific to the Notes |
• Unlike a bank deposit, the Notes are not protected by the Financial Services Compensation Scheme (the "FSCS"). As a result, neither the FSCS nor anyone else will pay compensation to investors upon the failure of the Issuer, any of the Guarantors or the Group. |
||
| • There is a risk of early redemption of the Notes by the Issuer due to a change in tax law or at its option (if such option is applicable). A Noteholder may not be able to reinvest the redemption proceeds at an effective interest rate as high as the interest rate of the Notes and may only be able to do so at a significantly lower rate. |
||||
| • Defined majorities may be permitted to bind all the Noteholders with respect to modification and waivers of the Terms and Conditions of the Notes, including Noteholders who did not attend and vote or who voted in a manner contrary to the majority. |
||||
| • A market for the Notes may not develop, or may not be very liquid and such illiquidity may have a severely adverse effect on the market value of the Notes. |
||||
| • If a payment were to be made or collected through an EU Member State which has opted for a withholding system and an amount of, or in respect of, tax were to be withheld from that payment pursuant to EC Council Directive 2003/48/EC on the taxation of savings income (the "Savings Directive"), neither the Issuer nor any Paying Agent nor any other person would be obliged to pay additional amounts with respect to any Note as a result of the imposition of such withholding tax. |
| • Payments, including principal, on the Notes to certain Noteholders and beneficial owners may be subject to a withholding tax of 30 per cent. if the Noteholders or beneficial owners do not comply with the relevant requirements under FATCA. No additional amounts will be payable in respect of any amounts deducted or withheld in connection with FATCA. |
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|---|---|
| • Investors in CDIs will have an interest in a separate legal instrument and will not be the legal owners of the Notes in respect of which the CDIs are issued. Accordingly, rights under the Notes cannot be enforced by CDI holders except indirectly through the intermediary depositaries and custodians. Further, such investors will be subject to provisions outside of, and different from, the Notes by virtue of their holding CDIs issued by the CREST Depository. |
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| Issue specific summary: | |
| • [Investment in Fixed Rate Notes involves the risk that subsequent changes in market interest rates may adversely affect the value of Fixed Rate Notes.] |
|
| • [The market price of Notes issued at a substantial [discount/premium] may experience greater fluctuations in certain circumstances.] |
| Section E - Summary Information on the Offer: | ||||
|---|---|---|---|---|
| Element | Title | |||
| E.2b | Reasons for the Offer and Use of Proceeds |
Programme summary: | ||
| The net proceeds from each issue of Notes will be applied by the Issuer for its general corporate purposes. If, in respect of any particular issue there is a particular identified use of proceeds, this will be stated below. |
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| Issue specific summary: | ||||
| Reasons for the offer: [ ] Use of proceeds: [ ] |
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| E.3 | Terms and conditions of the offer |
Programme summary: | ||
| The terms and conditions of each offer of Notes will be determined by agreement between the Issuer and the relevant Dealers at the time of issue and specified in the applicable Final Terms. |
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| Issue specific summary: | ||||
| [Not Applicable: the Notes are issued in denominations of at least €100,000 (or its equivalent in any other currency).] |
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| [An investor intending to acquire or acquiring any Notes in a Public Offer from an offeror other than the Issuer will do so, and offers and sales of such Notes to an investor by such offeror will be made, in accordance with any terms and other arrangements in place between such offeror and such investor including as to price, allocations, expenses, payment and delivery arrangements. |
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| Offer Price: [ ] |
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| Conditions to which the offer is subject: [ ] |
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| Description of the application process: [ ] |
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| Description of possibility to reduce subscriptions and manner for refunding excess amount paid by applicants: [ ] |
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| Details of the minimum and/or maximum amount of application: [ ] |
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|---|---|---|
| Details of the method and time limits for paying up and delivering the Notes: [ ] |
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| Manner in and date on which results of the offer are to be made public: [ ] |
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| Procedure for exercise of any right of pre-emption, negotiability of subscription rights and treatment of subscription rights not exercised: [ ] |
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| Categories of potential investors to which the Notes are offered and whether tranche(s) have been reserved [ ] for certain countries: |
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| Process for notification to applicants of the amount allotted and the indication whether dealing may begin before notification is made: [ ] |
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| Amount of any expenses and taxes specifically charged to the subscriber or purchaser: [ ] |
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| Name(s) and address(es) of the entities which have a firm commitment to act as intermediaries in secondary trading, providing liquidity through bid and offer rates and description of the main terms of its/their commitment: [ ]] |
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| E.4 | Interests of natural and legal | Programme summary: |
| persons involved in the issue of the Notes |
The relevant Dealer(s) may be paid fees in relation to any issue of Notes. 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 its affiliates in the ordinary course of business. |
|
| Issue specific summary: | ||
| [Save for [ ],] so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer. [There are no conflicts of interest which are material to the offer of the Notes.] |
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| E.7 | Estimated expenses charged to investors |
Programme summary: |
| There are no expenses charged to the investor by the Issuer. Expenses may be charged by an Authorised Offeror; these are beyond the control of the Issuer and not set by the Issuer. They may vary depending on the size and the amount subscribed for and the investor's arrangements with the Authorised Offeror. Neither the Issuer nor any of the Dealers are party to such terms or other arrangements. |
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| Issue specific summary: | ||
| [The expenses to be charged by those Authorised Offerors known to the Issuer as of the date of the Final Terms are unknown.] [The Issuer estimates that, in connection with the sale of Notes to an investor, the expenses charged by the [Authorised Offeror(s)] will be up to [ ] per cent. of the aggregate principal amount of the Notes sold to such investor.] |
Before applying for the Notes, you should consider whether the Notes are a suitable investment for you.
The following is a description of the principal risks and uncertainties which may affect the ability of the Issuer and/or the Guarantors to fulfil their respective obligations under the Notes and/or the Guarantee.
Each of Intermediate Capital Group plc (the "Issuer" or "ICG") and Intermediate Capital Investments Limited ("ICIL"), Intermediate Capital Managers Limited ("ICML") and Intermediate Investments LLP ("IIL" and, together with ICIL and ICML, the "Original Guarantors") believes that the following factors may affect its ability to fulfil its obligations under the Notes or the Guarantee, as the case may be. All of these factors are possibilities which may or may not happen and neither the Issuer nor any of the Original Guarantors is in a position to express a view on the exact likelihood of any such contingency happening.
Factors which each of the Issuer and the Original Guarantors believes may be material for the purpose of assessing the market risks associated with the Notes are also described below.
Each of the Issuer and the Original Guarantors believes that the factors described below represent the principal risks involved in investing in the Notes, but the Issuer or the Guarantors may be unable to pay interest, principal or other amounts on or in connection with the Notes for other reasons, and neither the Issuer nor any of the Original Guarantors represents that the statements below regarding the risks of holding the Notes are exhaustive. Prospective investors should also read the detailed information set out elsewhere in this Base Prospectus (including any documents incorporated by reference herein) and reach their own views prior to making any investment decision.
References below to the "Group" are to the Issuer and its consolidated subsidiaries.
The Group's strategy and business model are based on an analysis of and assumptions regarding its operating environment and macro-economic conditions.
This includes market evaluations and the identification and assessment of external and internal risk factors. Significant unexpected changes or outcomes, beyond those factored into the Group's strategy and business model, may occur, which could have an adverse impact on the Group's performance or financial position. While the Group plans for such events as far as possible to try to reduce any risk, it is not possible to completely foresee what may occur. The likelihood of such changes and their possible extent is unable to be predicted by the Group; in a worst case scenario, the effect of such changes could impact the ability of the Issuer and the Guarantors to pay interest, principal or other amounts on or in connection with the Notes.
The performance of the Group's investment portfolio (i.e. the total range of investments made by the Group) is affected by a number of factors. The portfolio may experience poor investment performance (both in terms of the absolute amount or relative to the performance of portfolios managed by competitors or relative to other types of asset) due to the failure of strategies implemented in managing the portfolio assets. The value of the funds and assets managed on behalf of the Group (referred to below as "assets under management") and performance of the investment portfolio may also be affected by matters beyond the Group's control, including conditions in the domestic and global financial markets and the wider economy, such as the level and volatility of bond prices, interest rates, exchange rates, the break-up of the European single currency zone or other similar event having an impact on the value of the Euro, liquidity in markets, credit spreads, margin requirements imposed by lenders, the availability and cost of loans and other debt and the responses of governments and regulators to these economic and market conditions.
Adverse movements in any of the global conditions described above could result in losses on investments from the Group's own balance sheet in the investment portfolio and reduced performance fees (i.e. incentive fees paid when fund performance exceeds a fixed return) received on third party funds, all of which, individually or taken together, could have a material adverse effect on the business, financial condition, results of operations and/or prospects of the Group. The likelihood of such factors and their possible extent is unable to be predicted by the Group. While the Group plans for such events as far as possible to try to reduce any risk, it is not possible to completely foresee what may occur.
The Group invests only in certain geographies, industries and sectors. If investment in any one geography, industry or sector becomes unduly concentrated, the Group could suffer an increased downturn in its investment performance or increased financial loss as a consequence of adverse market, economic or environmental conditions impacting a particular geography, industry or sector. The portfolio is regularly reviewed by senior investment professionals appointed for the purpose of considering concentration risk. In addition, the Group sources a significant proportion of its balance sheet funding from a small number of banks. The Group could become less able to make investments or suffer financial loss in the event of failure of one or more of its relationship banks.
The unlisted equity portfolio of the Issuer and that of third party funds currently managed by the Group are valued based on the market value of such assets and, therefore, market valuations may impact the amount of assets under management. The sensitivity to market fluctuations of the Group's equity portfolio overall is expected to increase due to market fluctuations.
Furthermore, loss of investor confidence in the Group specifically or in the sector in which the Group operates generally, whether because of changes in investor risk appetite, investor liquidity requirements, regulatory and fiscal changes, poor performance of the Group's investment or alternative investment funds generally or for any other reason could have an adverse impact on the Group's performance or financial position.
The Group's ability to raise investment funds from third parties depends on a number of factors, including the appetite of investors, general availability of funds in the market, investment track records and competitor fundraising activity. Certain factors, such as the performance of financial markets or the asset allocation rules or regulations to which such third parties are subject, could inhibit or restrict the ability of certain third parties to provide the Group with investment funds to manage or invest in the types of assets in which the Group invests. In addition, if the Group is unable to increase its assets under management, this may reduce the level of the Group's return from management and advisory fees, performance fees and "carried interest". "Carried interest" is the share of profits that the Group is due once it has returned the cost of investment and agreed preferred return to investors. The possible extent of such reduction is unable to be predicted by the Group but in an extreme case could reduce the Group's fund management income substantially over the period of the Notes. Any such reduction in the Group's income could affect the ability of the Issuer and the Guarantors to make payments under the Notes and/or the Guarantee, respectively.
Fees earned from managing the Group's funds are expected to comprise an increasing proportion of the Group's revenue. All or substantially all of the funds are managed pursuant to management, advisory or fund partnership agreements that may be terminated by the independent board of directors of the particular fund. The termination of a management agreement could cause a material reduction in assets under management and loss of revenue and adversely affect the Group's reputation, which in turn could affect its business, financial condition, results of operations (including reductions in the value of goodwill) and/or prospects. The Group proactively manages its relationship with investors to try to avoid dissatisfaction with its performance, which in turn reduces the likelihood of a removal. However, as such termination is beyond the Group's control, it is not possible to estimate the likelihood of such events or the extent to which they may occur. The extent of such reduction would depend on the size of the relevant fund or funds and the fee levels received but, in an extreme case, such removals could reduce the Group's fund management income substantially over the period of the Notes.
The investment mandates for a number of the funds managed by the Group may contain restrictions (whether by the investor, financing counterparties or as a result of regulatory requirements in the relevant jurisdiction) on the investments to be made by those funds. The Group does have internal checks to ensure those restrictions are observed. However, if breaches of these restrictions did occur, this may result in losses suffered by investors, termination of external financing or regulatory action. This may reduce revenue and assets under management and could also damage the Group's reputation and result in weak future financial performance given that fees earned from managing the Group's funds are expected to comprise an increasing proportion of the Group's revenue. It could also expose the Group to the risk of litigation from investors who have suffered losses which in turn could affect the business, financial condition, results of operations and/or prospects of the Group. The possible costs of such breaches are unable to be predicted by the Group but may be material.
The Group operates in a number of jurisdictions and its business, particularly the fund management part of the business, is subject predominantly to the regulatory regimes of the United Kingdom, the United States, Singapore and Hong Kong, from where core regulated activities are currently undertaken. The Group's strategy anticipates that it will undertake regulated fund management activities in other jurisdictions as it grows and, as a result, will over time become exposed to an increased number of regulatory regimes. The Financial Conduct Authority (the "FCA") is the Group's lead regulator. This will remain the case as long as the Group is headquartered in the United Kingdom.
The FCA, and other regulatory authorities, have broad regulatory powers dealing with all aspects of financial services, including the authority to grant, and in specific circumstances to vary or cancel, permissions and to regulate marketing and sales practices, advertising and the maintenance of adequate financial resources. If the Group were to breach any such laws or regulations, including those to which it had not previously been subject, it would be exposed to the risk of investigations, fines, temporary or permanent prohibition from engaging in certain activities, suspensions of personnel or revocation of their licences and suspension or termination of regulatory permissions to operate. In addition, a material breach of applicable laws and regulations by an investment management subsidiary of the Group could result in a breach of certain external financing facilities provided to the funds managed by that investment management subsidiary. This could lead to such facilities being withdrawn or refinanced on more onerous terms.
While the Group currently operates within the relevant regulatory framework, either its expansion to new jurisdictions or changes in that existing framework will increase costs and time spent on this area, and increases the risk of failing to identify applicable requirements or the risk of a breach due to the enhanced volume of requirements.
In addition, there is a risk that changes to any laws, regulations, policies or interpretations thereof in any of the jurisdictions in which the Group operates may adversely affect the Group. In particular, following the recent global and European economic crises, regulators and governments across the world have effected greater regulatory scrutiny over financial markets and financial institutions. It is expected that enhanced regulatory scrutiny will continue for the foreseeable future, particularly in relation to compliance with new and existing rules relating to corporate governance, compensation, remuneration, capital and liquidity requirements and conduct of business. Furthermore, new legislation, and regulations implementing such legislation, might have an adverse impact on the Group by, for example, imposing restrictions on the marketing of funds to certain investors. As such legislation or regulation is beyond the Group's control, it is not possible to accurately estimate the likelihood or the effect of such legislation or regulation.
The Group's business is structuring and providing mezzanine finance (i.e. finance that ranks below senior loans and above ordinary shareholders' equity), leveraged credit (i.e. senior loans) and equity. Historically, the Group has often received early repayments from companies that borrow from it on the amounts it has lent ahead of the due repayment of such loans. In addition, mezzanine investments (i.e. the provision of mezzanine finance) are often structured so that interest is "rolled up" and repaid in full at the end of the loan period, rather than being repaid during the life of the loan. Owing to the illiquid market for the sale of mezzanine investments, these repayments and realisations usually only occur upon the event of a refinancing of the capital structure or a sale of the portfolio company. The Group cannot predict such events and so cannot predict when, or if, any repayments of the loan principal and realisations of the rolled up interest on its investments will occur. The Group does not control the timing of exits in portfolio companies where it holds a minority equity interest or where it has lent mezzanine debt to such a company and thus the investments will be subject to the risk that the majority stakeholders may defer realisation of the investment where to do so may not be in line with the Group's interests. Delays in equity realisation and repayment of principal and realisation of rolled up interest could have a negative impact on the Issuer's investment capacity.
Mezzanine investments are typically issued as private loans which have no, or a limited, trading market and therefore, such investments are typically not easy to sell as there is not a ready supply of buyers. As a result, the Group's ability to sell its portfolio for liquidity purposes at short notice or to receive a fair price will be limited. This may have an adverse effect on the Group's business, financial condition and prospects. As market liquidity is beyond the Group's control, it is not possible to estimate the likelihood or extent of any failure to sell.
The Group invests from its own balance sheet using cash generated from investing activities, credit facilities and other third party funds. Unexpected changes in the levels of investment activities and/or realisations or in interest rates could adversely impact the Group's ability to take advantage of opportunities to make new investments. A significant shortfall in third party funds would require possible alternative financing structures to enable the Group to continue to invest in accordance with its plans. Such structures could entail higher costs and/or operational complexity and could impact the Group's ability to take advantage of future investment opportunities.
The Group's ability to borrow funds or access debt capital markets in the longer term is dependent on a number of factors including credit market conditions. Difficult credit market conditions may make it difficult for the Group to refinance existing credit facilities as and when they mature or to obtain debt financing for new investments. In addition, the cost and terms of any new or replacement facilities may be less favourable and may include more onerous financial covenants. If the Group increases its gearing ratio (i.e. the proportion of the Group's debt to its equity) by returning capital to shareholders there would be a lesser amount of working capital available, which may lead to a greater need to borrow funds or otherwise raise debt capital to enable the Group to operate as planned, and the effect of any failure to do so would be amplified. Failure to secure borrowings on commercially acceptable terms or a default by the Group under its debt agreements may have a material adverse effect upon the Group's financial condition and results. The possible effect of any such failure is unable to be predicted by the Group but may be material; in a worst case scenario, the effect of such failure could impact the ability of the Issuer and the Guarantors to pay interest, principal or other amounts on or in connection with the Notes.
Exchange rate risk is the risk that an investment's value changes due to changes in currency exchange rates. The Group reports its accounts in Sterling and pays dividends from Sterling profits. The underlying assets in the Group's portfolio are principally denominated in Euros, and to a lesser degree in U.S. dollars and other currencies. Therefore, changes in the rates of exchange of these currencies or changes to the Euro due to the break-up of the European single currency zone or similar event may have an adverse effect on the value of the Group's investments and any undrawn amount of the Group's debt facilities. The Group seeks to reduce currency exposures by matching loans and investment assets denominated in a foreign currency with debt borrowed in the same currency. In addition, the Group has used and continues to use derivative financial instruments, such as swaps (a type of derivative where two parties exchange cash flows of one party's financial instrument for those of the other party's financial instrument) and other instruments, on a limited basis, as part of its foreign exchange risk management. Failure by a counterparty to make payments due under such derivative financial investments may reduce the Group's returns. Although the Group has in place measures to mitigate the foreign exchange risk on its assets and liabilities, to the extent that any currency exposures are unhedged or unmatched or result in a currency event as a consequence of political risk, such exposure could adversely affect the Issuer's returns and financial condition. As exchange rates are beyond the Group's control, it is not possible to estimate the likelihood or extent of any failure to sell.
The Group's continued success is highly dependent upon the efforts of the Group's investment professionals and other key employees. The Group's future success and growth depends to a substantial degree on the Group's ability to retain and motivate key employees, the market for whom is very competitive. The Group may be unable to retain such key employees or to continue to motivate them.
The Group's investment professionals possess substantial experience and expertise in investing and are responsible for locating and executing the Group's investments. The loss of even a small number of the Group's investment professionals could jeopardise the Group's ability to source, execute and manage investments as well as affect recoveries on troubled assets, which could have a material adverse effect on the Group's business.
The Group attempts to reward its investment professionals and other key employees in line with market practice. Failure to maintain an appropriate and attractive reward system may result in the loss of some of the Group's key staff, with a possible consequential downturn in performance. On the other hand, successful efforts to retain investment professionals or other key staff may result in significant additional expenses, which could adversely affect the Group's returns. In addition, the Group may deem it necessary to maintain reward levels to retain key employees even during periods when it generates lower returns than in previous periods.
Interest rate risk is the risk of a change in an asset's value resulting from variations in interest rates. The Group has a mixture of fixed and floating rate assets, which are funded with a mixture of equity and borrowings. The Group seeks to reduce its exposure to interest rate risk by matching the type, maturity and currency of its borrowings to those of a group of assets with a similar profile and by using derivative financial instruments. A failure to match borrowings by type or maturity or the failure or inappropriate use of derivative financial instruments for the purpose of hedging could have an adverse impact on the Group's returns and financial condition.
In addition, many of the Group's portfolio companies rely on borrowing money to finance their business operations and increase the rate of return on their equity. Investments in entities with higher rates of borrowings are inherently more sensitive to interest rate movements. Therefore, a significant increase in interest rates could adversely affect the returns and financial condition of the Group's portfolio companies and may even lead some of the Group's portfolio companies to breach financial or operating requirements in their credit agreements or default on their debt. As interest rates are beyond the Group's control, it is not possible to estimate the effect of such changes.
The Group relies heavily on its financial, accounting and other data processing systems. Although the Group has in place business processes and procedures covering information security, changes in management, business continuity and disaster recovery, aimed at ensuring that its systems can be rebuilt in the event any of its premises suffer a disaster, if any of these procedures or systems do not operate properly or are disabled, the Group could suffer financial loss, disruption of businesses and damage to its reputation. If there have been, or are, failures in the Issuer's accounting and other data processing systems, the Group may be unable to report its or its funds' financial information on a timely basis. This could result in a loss of investor confidence and thereby adversely affect the performance of the Group.
In addition, the Group maintains a system of internal controls designed to detect, amongst other things, fraud by the Group's employees, agents and counterparties. A failure of these internal controls to detect any such fraud could result in the imposition of fines and/or other criminal or regulatory sanctions and could also damage the Group's reputation.
Notwithstanding anything in this risk factor, this risk factor should not be taken as implying that either the Issuer or the Group will be unable to comply with its obligations as a company with securities admitted to the official list of the UK Listing Authority or as a supervised firm regulated by the FCA.
Failure to make investments at the planned rate may reduce the value of future management fees, investment income, performance fees and carried interest which could have a material adverse effect on the business, financial condition, results of operatives and/or prospects of the Group
Due to a range of external factors (including macro-economic conditions and competition from other fund managers), it is possible that the Group may not be able to achieve or maintain the rate of investment currently anticipated by the Group's management. Failure to deploy capital at the anticipated rate could reduce the value of future management fees, interest and dividend income, performance fees and carried interest achieved by the Group, as the Group would be earning fees on a lower level of investments than anticipated. In addition, such failure to deploy capital may have the effect of making it more difficult to fundraise for future funds as the Group would be unable to demonstrate to potential investors that it had been able to continue to make investments at an anticipated rate. Such failure to deploy capital could also increase risks described in "Poor performance of the Group's investment portfolio could have a material adverse effect on the business, financial condition, results of operations and/or prospects of the Group" above as a slower than anticipated deployment rate could increase pressure on management to recommend investments which they may otherwise reject as not of sufficient quality.
The rate of investment is kept under continual review by the investment committees and senior management to ensure acceptable levels are maintained in current market conditions. In an increasingly competitive investment landscape the Group has continued to deploy funds in line with the anticipated deployment rate during the last financial year. However, it is not possible for the Group to anticipate what future investment opportunities will arise. The likelihood of a decrease in future management fees, interest and dividend income, performance fees and carried interest due to a failure to deploy capital is unable to be predicted by the Group. In an extreme case, such a decrease could impact the ability of the Issuer and the Guarantors to pay interest, principal or other amounts on or in connection with the Notes.
A change in relevant UK legislation (whether pursuant to the proposals of the Organisation for Economic Co-operation and Development (OECD) in respect of base erosion and profit shifting or otherwise) or in HM Revenue & Customs policy or practice could adversely affect the Group's returns or financial condition. As such legislation and practice is beyond the Group's control, it is not possible to estimate the likelihood or effect of any such change.
Similar risks may exist in certain other jurisdictions in which the Group operates and in relation to tax structures which have been put in place, some of which make use of off-shore vehicles. This includes structures designed to ensure that the Group does not create a permanent establishment in some jurisdictions or that certain Group or portfolio companies are tax resident in a particular jurisdiction only, as a necessary part of the overall tax structure.
The creation of a permanent establishment for the Issuer in some jurisdictions or certain Group or portfolio companies being considered tax resident in more than one particular jurisdiction could result in the Issuer or those Group or portfolio companies being subject to withholding or other taxes on income received from or gains arising on the sale of investments. Likewise, changes in relevant taxation legislation or applicable tax treaties could affect the expected tax position of the Issuer or of certain Group or portfolio companies, and could require less favourable tax structures to be put in place.
The Issuer or a Guarantor may be subject to a withholding tax of 30 per cent. on certain payments to it if it, and in certain cases, an affiliate, does not comply with the applicable information reporting and withholding requirements in connection with Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986 (the "Code"), any intergovernmental agreement entered into in furtherance of such Sections of the Code, any related non-U.S. legislation implemented in furtherance of such an intergovernmental agreement or any agreement with a taxing authority pursuant to such Sections of the Code (collectively, "FATCA"). Any such withholding may materially impair the Issuer's and/or the Guarantors' ability to make payments on the Notes and/or under the Guarantee, as applicable.
Since the Issuer is a holding company, its operating results and financial condition are, in part, dependent on the performance of members of the Group. Each of the Original Guarantors is a subsidiary of, or controlled by, the Issuer and owns assets in its own right. Other subsidiaries will make distributions to the Issuer by way of dividends. From time to time, the ability of those subsidiaries to make such distributions may be restricted as a result of several factors, including covenants in loan agreements that restrict the subsidiary from making payments in specified circumstances, limitations on exchanging or making payments in foreign currencies, the requirements of applicable law and regulatory, fiscal or other restrictions. This could impact the Issuer's ability to make payments due under the Notes.
Each of the Original Guarantors is a subsidiary of, or controlled by, the Issuer and may from time to time rely on the Issuer for financial support
As part of the Group's financial arrangements, the Issuer or other companies in the Group may from time to time and in the ordinary course of business make capital injections or otherwise provide financial support to certain Group members. Such Group members may include the Guarantors, each of whom is a subsidiary of, or controlled by, the Issuer. As noted in the annual report of Intermediate Capital Investments Limited ("ICIL") for the financial year ended 31 March 2014, as at 31 March 2014, ICIL had net current liabilities of £116.4 million mainly due to amounts payable to the Issuer for group undertakings. The Issuer has confirmed its intention to support ICIL to enable it to meet its obligations as they fall due and not demand repayment until the entity is in a financial position to do so, and has issued a legally binding letter of support to ICIL. In addition, as noted in the annual report of Intermediate Capital Managers Limited ("ICML") for the financial year ended 31 March 2014, ICG FMC Limited, the immediate parent company of ICML, has confirmed its intention to support ICML to enable it to meet its full financial obligations as and when they fall due for at least twelve months from the date thereof. It is anticipated by the Issuer that any similar situations arising in the future would be treated in the same way, to the extent this were financially practicable. However, if any Group member would be unable to call upon financial support from its holding company or controlling party for any reason (such as the relevant holding company or controlling party having insufficient funds) this may have a material adverse effect upon the financial condition of such Group member. In the case of a
Guarantor, this could affect the ability of the affected Guarantor to make payments on or in connection with the Guarantee.
The Issuer holds certain of its assets through its subsidiaries. The Issuer's rights to participate in a distribution of its subsidiaries' assets upon their liquidation, re-organisation or insolvency is generally subject to prior claims of the subsidiaries' creditors, including secured creditors such as its lending banks, any trade creditors and preferred shareholders. Noteholders will rank alongside other unsecured senior creditors in the event of the liquidation, re-organisation or insolvency of a Guarantor but, in the event of the liquidation, re-organisation or insolvency of any other subsidiary, the Issuer will rank as a shareholder and will only receive any assets once the creditors of the subsidiary with prior claims have been paid out in full. See also "What will Noteholders receive in a winding-up of the Issuer and the Group?" in Section 3 (Information About the Programme).
A range of Notes may be issued under the Programme. A number of these Notes may have features which contain particular risks for potential investors. Set out below is a description of certain of those features:
If the Issuer has the right to redeem any Notes at its option, this may limit the market value of the Notes concerned and an investor may not be able to reinvest the redemption proceeds in a manner which achieves a similar effective return
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 such 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 may 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.
Notes which are issued at a substantial discount or premium may experience price volatility in response to changes in market interest rates
The market values of securities issued at a substantial discount (such as Zero Coupon Notes) or premium to their principal amount tend to fluctuate more in relation to general changes in interest rates than do prices for more conventional interest bearing securities. Generally, the longer the remaining term of the securities, the greater the price volatility as compared to more conventional interest-bearing securities with comparable maturities.
Set out below is a description of certain risks relating to the Notes generally.
Unlike a bank deposit, the Notes are not protected by the Financial Services Compensation Scheme (the "FSCS"). As a result, neither the FSCS nor anyone else will pay compensation upon the failure of the Issuer, any of the Guarantors or the Group. If the Issuer or any of the Guarantors goes out of business or becomes insolvent, investors may lose all or part of their investment in the Notes.
The Terms and Conditions of the Notes contain provisions which may permit their modification without the consent of all investors and confer significant discretions on the Trustee which may be exercised without the consent of the Noteholders and without regard to the individual interests of particular Noteholders
The Terms and Conditions of the Notes contain provisions for calling meetings of Noteholders of a Series to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Noteholders of the relevant Series, including Noteholders who did not attend and vote at the relevant meeting and Noteholders who voted in a manner contrary to the majority.
The Issuer has appointed Deutsche Trustee Company Limited to act as trustee (the "Trustee") and represent the Noteholders. The functions of the Trustee include taking enforcement action on behalf of the holders where necessary. The Trustee also has certain discretions to agree with the Issuer changes to the Terms and Conditions of the Notes without seeking the consent of the Noteholders. In particular, the Terms and Conditions of the Notes provide that the Trustee may, without the consent of Noteholders and without regard to the interests of particular Noteholders, agree 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, (ii) certain other modifications, 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, and (iii) in certain circumstances, the substitution of certain other entities in place of the Issuer, any Guarantor or any previous substituted company as principal debtor or guarantor, as the case may be, under the Trust Deed and the Notes.
As the Global Note relating to each issue of Notes will be held by or on behalf of Euroclear and/or Clearstream, Luxembourg, investors will have to rely on the procedures of those clearing systems for transfer, payment and communications with the Issuer
Notes issued under the Programme will be held by investors through international clearing systems such as Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking société anonyme ("Clearstream, Luxembourg"). In such circumstances, the Notes will be represented by one or more 'Global Notes' (namely a single note representing all, or the relevant part, of the entire issue) which will be deposited with a common depositary or common safekeeper for Euroclear and Clearstream, Luxembourg. Except in the circumstances described in each Global Note, investors will not be entitled to receive Notes in definitive form (i.e. physical certificates of ownership). Each of Euroclear and Clearstream, Luxembourg and their respective direct and indirect participants will maintain records of the beneficial interests in each Global Note held through it. While the Notes are represented by a Global Note, investors will be able to trade their beneficial interests only through the relevant clearing systems and their respective participants.
While the Notes are represented by Global Notes, the Issuer will discharge its payment obligation under the Notes by making payments to the common depositary or common safekeeper, as applicable, for the relevant clearing systems for distribution to the relevant account holders. A holder of a beneficial interest in a Global Note must rely on the procedures of the relevant clearing system and its participants to receive payments under the Notes. The Issuer has no responsibility or liability for the records relating to, or payments made in respect of, beneficial interests in any Global Note.
Holders of beneficial interests in a Global Note will not have a direct right to vote in respect of the Notes so represented. Instead, such holders will be permitted to act only to the extent that they are enabled by the relevant clearing system and its participants to appoint appropriate proxies.
The Notes may be subject to withholding taxes in circumstances where the Issuer is not obliged to make gross up payments and this would result in holders receiving less interest than expected and could significantly adversely affect their return on the Notes.
Under EC Council Directive 2003/48/EC (the "Savings Directive") on the taxation of savings income each Member State of the European Union (an "EU Member State") is required to provide to the tax authorities of another EU Member State details of payments of interest or other similar income payments ("Savings Income") made by a person within its jurisdiction to or collected by such a person for an individual or to certain non-corporate entities, resident in that other EU Member State (interest payments on the Notes will for these purposes be Savings Income). However, for a transitional period, Austria is instead applying a withholding system in relation to such payments, deducting tax of 35 per cent. The transitional period is to terminate at the end of the first full fiscal year following agreement by certain non-EU countries to the exchange of information relating to such payments.
A number of non-EU countries and certain dependent or associated territories of certain EU Member States have adopted and implemented similar measures (either provision of information or transitional withholding) in relation to payments of Savings Income made by a person within its jurisdiction to an individual, or to certain non-corporate entities, resident in an EU Member State.
In addition, EU Member States have entered into reciprocal arrangements with certain of those non-EU countries and dependent or associated territories of certain EU Member States in relation to payments of Savings Income made by a person in an EU Member State to an individual, or to certain noncorporate entities, resident in certain dependent or associated territories or non-EU countries.
On 24 March 2014, the Council of the European Union adopted a Council Directive amending and broadening the scope of the requirements described above. EU Member States are required to apply these new requirements from 1 January 2017. The changes will expand the range of payments covered by the Savings Directive, in particular to include additional types of income payable on securities. The Savings Directive will also apply a "look through approach" to payments made via certain persons, entities or legal arrangements (including trusts and partnerships), where certain conditions are satisfied, where an individual resident in an EU Member State is regarded as the beneficial owner of the payment for the purposes of the Savings Directive. This approach may in some cases apply where the person, entity or arrangement is established or effectively managed outside of the European Union.
If a payment were to be made or collected through an EU Member State which has opted for a withholding system and an amount of, or in respect of, tax were to be withheld from that payment, neither the Issuer, nor any Guarantor nor any Paying Agent nor any other person would be obliged to pay additional amounts with respect to any Note as a result of the imposition of such withholding tax. The Issuer is required to maintain a Paying Agent in an EU Member State that is not obliged to withhold or deduct tax pursuant to the Savings Directive.
Whilst the Notes are in global form and held within the clearing systems, FATCA may affect the amount of payments made to custodians or intermediaries in the payment chain leading to the ultimate investor if any such custodian or intermediary generally is unable to receive payments free of FATCA withholding. It also may affect payment to any ultimate investor that is a financial institution that is not entitled to receive payments free of withholding under FATCA, or an ultimate investor that fails to provide its broker (or other custodian or intermediary from which it receives payment) with any information, forms, other documentation or consents that may be necessary for the payments to be made free of FATCA withholding. Investors should choose the custodians or intermediaries with care (to ensure each is compliant with FATCA) and provide each custodian or intermediary with any information, forms, other documentation or consents that may be necessary for such custodian or intermediary to make a payment free of FATCA withholding. Investors should consult their own tax adviser to obtain a more detailed explanation of FATCA and how FATCA may affect them. The Issuer's and the Guarantors' obligations under the Notes are discharged once it has paid the common depositary or common safekeeper for the clearing systems (as bearer of the Notes) and neither the Issuer nor the Guarantors have a responsibility to make any payments of additional amounts thereafter transmitted through the hands of the clearing systems and custodians or intermediaries. See Section 11 (Taxation - FATCA) below.
Interests in the Notes may be held through Euroclear UK & Ireland Limited (formerly CREST Co Limited) ("CREST") through the issuance of dematerialised depository interests (i.e. securities without any physical document of title distinct from the Notes and constituted under English law), held, settled and transferred through CREST ("CREST Depository Interests" or "CDIs"), representing the interests in the relevant Notes underlying the CDIs (the "Underlying Notes"). Holders of CDIs ("CDI Holders") will hold or have an interest in a separate legal instrument and will not be the legal owners of the Underlying Notes. The rights of CDI Holders to the Underlying Notes are represented by the relevant entitlements against CREST Depository Limited (the "CREST Depository") which through CREST International Nominees Limited (the "CREST Nominee") holds interests in the Underlying Notes. Accordingly, rights under the Underlying Notes cannot be enforced by CDI Holders except indirectly through the intermediary depositaries and custodians. The enforcement of rights under the Underlying Notes will be subject to the local law of the relevant intermediaries. This could result in an elimination or reduction in the payments that otherwise would have been made in respect of the Underlying Notes in the event of any insolvency or liquidation of any of the relevant intermediaries, in particular where the Underlying Notes held in clearing systems are not held in special purpose accounts and are fungible with other securities held in the same accounts on behalf of other customers of the relevant intermediaries.
The rights of the CDI Holders will be governed by the arrangements between CREST, Euroclear, Clearstream, Luxembourg and the Issuer, including the global deed poll dated 25 June 2001 (as subsequently modified, supplemented and/or restated) (the "CREST Deed Poll"). Potential investors should note that the provisions of the CREST Deed Poll, the CREST International Manual dated 14 April 2008, as amended, modified, varied or supplemented from time to time (the "CREST Manual") and the CREST Rules contained in the CREST Manual applicable to the CREST International Settlement Links Service (the "CREST Rules") contain indemnities, warranties, representations and undertakings to be given by CDI Holders and limitations on the liability of the CREST Depository. CDI Holders are bound by such provisions and may incur liabilities resulting from a breach of any such indemnities, warranties, representations and undertakings in excess of the amounts originally invested by them. As a result, the rights of and returns received by CDI Holders may differ from those of holders of Notes which are not represented by CDIs.
In addition, CDI Holders may be required to pay fees, charges, costs and expenses to the CREST Depository in connection with the use of the CREST International Settlement Links Service (the "CREST International Settlement Links Service"). These will include the fees and expenses charged by the CREST Depository in respect of the provision of services by it under the CREST Deed Poll and any taxes, duties, charges, costs or expenses which may be or become payable in connection with the holding of the Notes through the CREST International Settlement Links Service.
Potential investors should note that neither the Issuer, nor the Guarantors, nor the Dealers, nor the Trustee nor any Paying Agents will have any responsibility for the performance by any intermediaries or their respective direct or indirect participants or accountholders of their respective obligations under the rules and procedures governing their operations.
Potential investors should note that the CDIs are the result of the CREST settlement mechanics and are not the subject of this Base Prospectus.
For further information on the issue and holding of CDIs see Section 12 (Clearing and Settlement).
The Terms and Conditions of the Notes are based on English law in effect as at the date of issue of the relevant Notes. No assurance can be given as to the impact of any possible judicial decision or change to English law or administrative practice after the date of issue of the relevant Notes and any such change could materially adversely impact the value of any Notes affected by it.
The denomination of each series of Notes will be specified in the Final Terms in the paragraph "Specified Denomination(s)". In relation to any issue of Notes which have denominations consisting of a minimum Specified Denomination plus one or more higher integral multiples of another smaller amount, it is possible that such Notes may be traded in amounts that are not integral multiples of such minimum Specified Denomination. In such a case a Noteholder who, as a result of trading such amounts, holds an amount which is less than the minimum Specified Denomination in his account with the relevant clearing system at the relevant time may 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 its holding amounts to a Specified Denomination.
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.
The London Interbank Offered Rate ("LIBOR") and the Euro Interbank Offered Rate ("EURIBOR") are currently the subject of national, international and other regulatory guidance and proposals for reform. Some of these reforms are already effective whilst others are still to be implemented. These reforms may cause LIBOR and EURIBOR to perform differently than in the past, or have other consequences which cannot be predicted.
Changes to LIBOR or EURIBOR as a result of international, national or other proposals for reform or other initiatives or investigations, could have a material adverse effect on the value of and return on the Notes.
Set out below is a brief description of the principal market risks, including liquidity risk, exchange rate risk, interest rate risk and credit risk. As these market risks are beyond the Group's control, the Group is unable to estimate their likelihood or potential effect.
If an investor chooses to sell its Notes in the open market at any time prior to the maturity of the Notes, the price the investor will receive from such sale may be less than its original investment, and may be less than the amount due to be repaid at the maturity of the Notes if an investor were to hold onto the Notes until that time. Factors that will influence the price received by investors who choose to sell their Notes in the open market may include, but are not limited to, market appetite, inflation, the period of time remaining to maturity of the Notes, prevailing interest rates and the financial position of the Issuer and the Guarantors. In addition, inflation may reduce the real value of the Notes over time which may affect what investors can buy with their investments in the future (including on the maturity of the Notes).
Notes may have no established trading market when issued, and one may never develop. If a market does develop, it may not be liquid or may become illiquid at a later stage. Therefore, investors may not be able to sell their Notes easily or at prices that will provide them with a yield comparable to similar investments that have a developed secondary market. This is particularly the case for Notes that are especially sensitive to interest rate, currency or market risks, are designed for specific investment objectives or strategies or have been structured to meet the investment requirements of limited categories of investors. These types of Notes generally would have a more limited secondary market and more price volatility than conventional debt securities. Illiquidity may have a severely adverse effect on the market value of Notes.
In the case of Notes issued under the Programme which are tradable through the London Stock Exchange's electronic order book for retail bonds (ORB), a registered market-maker on the ORB will be appointed in respect of the relevant Notes from the date of admission of the Notes to trading. Market-making means that a person will quote prices for buying and selling securities during trading hours. In such circumstances, there would be no guarantee that any such market-maker would remain as a market-maker for the life of the relevant Notes. If no replacement market-maker were appointed in such circumstances, this could have an adverse impact on an investor's ability to sell its Notes.
If an investor holds Notes which are not denominated in the investor's home currency, he will be exposed to movements in exchange rates adversely affecting the value of his holding. In addition, the imposition of exchange controls in relation to any Notes could result in an investor not receiving payments on those Notes
The currency of each series of Notes will be specified in the Final Terms in the paragraph "Specified Currency". The Issuer will pay principal and interest on the Notes in the Specified Currency. This presents certain risks relating to currency conversions if an investor's financial activities are denominated principally in a currency or currency unit (the "Investor's Currency") other than the Specified Currency. These include the risk that exchange rates may significantly change (including changes due to devaluation of the Specified Currency or revaluation of the Investor's Currency) and the risk that authorities with jurisdiction over the Investor's Currency may impose or modify exchange controls. An appreciation in the value of the Investor's Currency relative to the Specified Currency would decrease (i) the Investor's Currency-equivalent yield on the Notes, (ii) the Investor's Currency equivalent value of the principal payable on the Notes and (iii) the Investor's Currency equivalent market value of the Notes.
Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate or the ability of the Issuer or the Guarantors to make payments in respect of the Notes and/or the Guarantee. As a result, investors may receive less interest or principal than expected, or no interest or principal.
Investment in Fixed Rate Notes involves the risk that if market interest rates subsequently increase above the rate paid on the Fixed Rate Notes, this will adversely affect the value of the Fixed Rate Notes.
The Issuer has been rated BBB- by each of Fitch Ratings Limited ("Fitch") and Standard and Poor's Credit Market Services Europe Limited ("S&P"). As defined by Fitch, a "BBB-" rating means that the expectation of default risk is currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity.1 As defined by S&P, a "BBB-" rating means that the obligations of the Issuer exhibit adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.2 In each case, the "-" sign shows the relative standing within this rating category. The rating 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. A credit rating is not a recommendation to buy, sell or hold securities and may be revised, suspended or withdrawn by the rating agency at any time. Any such revision, suspension or withdrawal could adversely affect the market value of any Notes. For the avoidance of doubt, the Issuer does not commit to ensure that the specific rating of any Notes will be upheld nor that the credit rating agencies rating any Notes will remain the same.
In general, European regulated investors are restricted under Regulation (EC) No. 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies, as amended (the "CRA Regulation") from using credit ratings for regulatory purposes, unless such ratings are issued by a credit rating agency established in the EU and registered under the CRA Regulation (and such registration has not been withdrawn or suspended), subject to transitional provisions that apply in certain circumstances whilst the registration application is pending. Such general restriction will also apply in the case of credit ratings issued by non-EU credit rating agencies, unless the relevant credit ratings are endorsed by an EU-registered credit rating agency or the relevant non-EU rating agency is certified in accordance with the CRA Regulation (and such endorsement action or certification, as the case may be, has not been withdrawn or suspended). The list of registered and certified rating agencies published by the European Securities and Markets Authority ("ESMA") on its website in accordance
1
Source: Fitch Ratings – Definitions of Ratings and Other Forms of Opinion – December 2014. Source: Standard and Poor's - Ratings Definitions (20 November 2014).
with the CRA Regulation is not conclusive evidence of the status of the relevant rating agency included in such list, as there may be delays between certain supervisory measures being taken against a relevant rating agency and the publication of the updated ESMA list. Certain information with respect to the Issuer's ratings and the credit rating agencies which have assigned such ratings is set out under the heading "Important Notices" at the beginning of this Base Prospectus. Where an issue of Notes is rated, such rating will be specified in the relevant Final Terms and may not necessarily be the same as the rating assigned to the Issuer.
Potential investors should note that any indication of yield (i.e. income return on the Notes) stated in the Final Terms of the Notes applies only to investments made at the issue price of the relevant Notes, and not to investments made above or below the issue price of those Notes. This is because the stated yield is calculated as a "current yield", which is determined as at the issue date of the Notes by reference to the following formula:
ൌ ݈݅݁݀ݕ ݐ݁݊ݎݎݑܿ ݁ݐܽݎ ݐݏ݁ݎ݁ݐ݅݊ ݈ܽݑܽ݊݊ ݅ܿ݁ݎܲ ݁ݑݏݏܫ
If an investor purchases Notes at a price above or below the issue price of those Notes, the yield on that investment will be different from any indication of the yield set out in the relevant Final Terms. No indication of yield will be included in the relevant Final Terms in respect of any Floating Rate Notes.
The following is an overview of the Programme and the key terms of the Notes. The full text of the Terms and Conditions of the Notes are contained in Appendix B. It is important that you read the entirety of this Base Prospectus before you invest in any Notes. It is also recommended that you consult your financial adviser or any other professional adviser before you decide to purchase any Notes.
What is the Programme? The Programme is a debt issuance programme under which Intermediate Capital Group plc as the Issuer may, from time to time, issue debt instruments which are referred to in this Base Prospectus as Notes. Notes are also commonly referred to as bonds.
The Programme is constituted by a set of master documents containing standard terms and conditions and other contractual provisions that can be used by the Issuer to undertake any number of issues of Notes from time to time in the future, subject to a maximum limit of £500,000,000 (or its equivalent in other currencies) in principal amount of Notes outstanding at any time under the Programme.
The standard terms and conditions that can be used by the Issuer to undertake each issue of Notes are contained in a set of provisions referred to as the Terms and Conditions, as set out in this Base Prospectus in Appendix B (Terms and Conditions of the Notes).
The Programme was established on 28 February 2014 and was updated on 18 February 2015.
How are Notes issued under the Programme? Whenever the Issuer decides to issue Notes, it undertakes what is commonly referred to as a "drawdown". On a drawdown, documents which are supplementary to the Programme master documents are produced, indicating which provisions in the master documents are relevant to that particular drawdown and setting out the terms of the Notes to be issued under the drawdown. The key supplementary documents of which you will need to be aware when deciding whether to invest in Notes issued as part of a drawdown over the 12 month period from the date of this Base Prospectus are: (a) any supplement to this Base Prospectus published after the date of this Base Prospectus and (b) the applicable Final Terms for such Notes.
In the event of any significant new factor, material mistake or inaccuracy relating to information included in this Base Prospectus which is capable of affecting the assessment of any Notes and whose inclusion or removal from this Base Prospectus is necessary for the purpose of allowing an investor to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the Issuer and the Group, and the rights attaching to the Notes, the Issuer will prepare and publish a supplement to this Base Prospectus or prepare and publish a new base prospectus, in each case, for use in connection with such Notes and any subsequent issue of Notes.
In the case of a programme, the Terms and Conditions of the Notes cater for all the permutations of provisions that the issuer envisages being likely to be applicable to issues under the programme, with the final terms document for each issue (referred to herein as the Final Terms) setting out the specific commercial terms applicable to the issue and the extent to which the provisions in the Terms and Conditions of the Notes are applicable. Each Final Terms is intended to be read alongside the Terms and Conditions of the Notes, and the two together provide the specific terms of the Notes relevant to a specific drawdown.
Terms and Conditions of the Notes beginning on page 129 and the Forms of Final Terms beginning on page 115
Refer to
Terms and Conditions of
the Notes beginning on page 129
| What types of Notes may be issued under |
Three types of Notes may be issued under the Programme: Fixed Rate Notes, Floating Rate Notes and Zero Coupon Notes, or any combination of these. |
Terms and Conditions of the Notes beginning on |
|---|---|---|
| the Programme? |
Fixed Rate Notes are Notes where the interest rate payable by the Issuer on the Notes is determined prior to issue, and remains fixed throughout the life of the Notes. See Section 4 (How the Return on Your Investment is Calculated) for a worked example showing how the return on an issue of Fixed Rate Notes is calculated. |
page 129 and the Forms of Final Terms beginning on page 96 |
| Floating Rate Notes are Notes where the interest rate is calculated by reference to a fluctuating benchmark rate. Under the Programme, that benchmark rate will be either an ISDA defined rate, the Euro Interbank Offered Rate (EURIBOR) or the London Interbank Offered Rate (LIBOR). The floating interest rate is recalculated on or around the start of each new interest period and applies for the length of that interest period. Therefore, Floating Rate Notes in effect have a succession of fixed interest rates. Although the floating interest rate will be based on the benchmark rate, it will typically also include a fixed percentage margin which is added to the benchmark rate. See Section 4 (How the Return on Your Investment is Calculated) for a worked example showing how the return on an issue of Floating Rate Notes is calculated. |
||
| Zero Coupon Notes are Notes which do not carry any interest but are generally issued at a deep discount to their principal amount. Zero Coupon Notes are repaid at their full amount. Therefore, if you purchase Zero Coupon Notes on their issue date and hold them to maturity, your return will be the difference between the issue price and the principal amount of the Zero Coupon Notes paid on maturity. Alternatively, you might realise a return on Zero Coupon Notes through a sale prior to their maturity. |
||
| The specific details of each Note issued will be specified in the applicable Final Terms. |
||
| How will the price of the Notes be determined? |
Notes may be issued at their principal amount or at a discount or premium to their principal amount. The price and amount of Notes to be issued under the Programme will be determined by the Issuer and the relevant Dealer or Dealers at the time of "pricing" of the Notes in accordance with prevailing market conditions. The issue price for each Tranche will be specified in the applicable Final Terms. |
N/A |
| What is the yield on Fixed Rate Notes? |
The yield in respect of each issue of Fixed Rate Notes will be calculated on the basis of the issue price and specified in the applicable Final Terms. Yield is not an indication of future price. The Final Terms in respect of any Floating Rate Notes will not include any indication of yield. |
N/A |
| Will the Notes issued under the Programme have a credit rating? |
The Programme is not currently rated by any credit rating agency; however, issues of Notes issued under the Programme may be specifically rated. Any such ratings will not necessarily be the same as the rating assigned to the Issuer or to any other issues of Notes. 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 general, European regulated investors are restricted from using a rating for regulatory purposes if such rating is not issued by a credit rating agency established in the European Union and registered under Regulation (EC) No. 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies, as amended (the "CRA |
N/A |
| Regulation"). | ||
|---|---|---|
| -- | --------------- | -- |
| Will I be able to trade the Notes issued under the Programme? |
Application has been made to admit Notes issued during the period of 12 months from the date of this Base Prospectus to the official list of the UK Listing Authority and to admit them to trading on London Stock Exchange's regulated market. Notes may also be admitted to trading through the electronic order book for retail bonds (commonly known as the ORB) on the London Stock Exchange's regulated market. |
Section 16 (Additional Information – paragraph 1) on page 115 |
|---|---|---|
| Once listed, the Notes may be purchased or sold through a broker. The market price of the Notes may be higher or lower than their issue price depending on, among other things, the level of supply and demand for the Notes, movements in interest rates and the financial performance of the Issuer and the Group. (See "Risk Factors - Risks related to the market generally - An active secondary market in respect of the Notes may never be established or may be illiquid and this would adversely affect the value at which an investor could sell his Notes"). |
||
| Who is issuing the Notes? |
The Notes will be issued by Intermediate Capital Group plc. | Terms and Conditions of the Notes beginning on page 129 |
| Who is guaranteeing the Notes? |
Each of Intermediate Capital Investments Limited, Intermediate Capital Managers Limited and Intermediate Investments LLP (referred to in the Terms and Conditions of the Notes as the Original Guarantors) will guarantee the due payment of all sums expressed to be payable by the Issuer under the Notes. |
Terms and Conditions of the Notes beginning on page 129 |
| In addition, pursuant to the Terms and Conditions of the Notes, if any subsidiary of the Issuer provides a guarantee in respect of certain facility agreements of the Group, they will become a Guarantor in respect of any Notes issued under the Programme. |
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| In the same way, pursuant to the Terms and Conditions of the Notes, if any Guarantor ceases to provide a guarantee in respect of such facility agreements, such Guarantor will in certain circumstances cease to be a Guarantor in respect of any Notes issued under the Programme. |
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| The Original Guarantors, plus any subsidiary which becomes a guarantor as described above (but excluding any subsidiary which ceases to act as a guarantor as described above), are referred to herein as the Guarantors. |
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| What is the relationship between the Issuer and the Group? |
The Issuer is the ultimate parent company of the Group and the Group's business is conducted through the Issuer and its subsidiary undertakings. Its own performance is, therefore, partially dependent on the performance of the Group (see Section 5 (Description of Intermediate Capital Group plc)). |
Section 5 (Description of Intermediate Capital Group plc) beginning on page 57 |
| What will Noteholders receive in a winding-up of the Issuer and the Group? |
If the Issuer or a Guarantor becomes insolvent and is unable to pay its debts, an administrator or liquidator would be expected to make distributions to its creditors in accordance with a statutory order of priority. An investor's claim as a Noteholder would be expected to rank after the claims of any holders of the Issuer's secured debt or other creditors that are given preferential treatment by applicable laws of mandatory application relating to creditors, but ahead of any shareholder of the Issuer or Guarantor, as applicable. A simplified |
N/A |
| Type of obligation | Examples of obligations/securities |
|
|---|---|---|
| Higher ranking |
Proceeds realised from the enforcement of a fixed charge (i.e. a charge secured on particular property or assets of a borrower) |
E.g. a fixed charge over shares and assets of one subsidiary of the Issuer as security for the obligations of that subsidiary in favour of the secured noteholders |
| Expenses of the liquidation/administration |
Currently none | |
| Preferential creditors | Including remuneration due to employees |
|
| Proceeds realised from the enforcement of a floating charge (i.e. a charge taken over all the assets or a class of assets of a borrower from time to time) |
Currently none other than a floating charge over assets of one subsidiary of the Issuer as security in favour of the secured noteholders |
|
| Unsecured obligations, including guarantees in respect of them |
Notes issued under the Programme and the Guarantee of the Guarantors. |
|
| Also includes other unsecured obligations (including guarantee obligations), such as the Issuer's Sterling denominated 6.25 per cent. notes due 2020, Sterling denominated 7.00 per cent. notes due 2018 and the Group's various banking facility agreements. |
||
| Shareholders | Ordinary shareholders |
diagram illustrating the expected ranking of the Notes compared to other creditors of the Issuer and the Guarantors, as the case may be, is set out below:
However, as well as being aware of the ranking of the Notes issued under the Programme compared to the other categories of creditor, and the shareholders, of the Issuer, investors should note that the Issuer holds a substantial amount of its assets in its subsidiaries. See Section 5 (Description of Intermediate Capital Group plc)) for details of the Issuer's principal subsidiaries.
As a shareholder of a subsidiary, the Issuer will have a right to participate in a distribution of such subsidiary's assets in the event of any liquidation, re-organisation (other than a solvent internal Group reorganisation) or insolvency of such subsidiary. However, the Issuer's right to participate is generally subject to any claims made against that subsidiary, including creditors such as any lending bank and trade creditors. The obligations of the Issuer under the Notes are therefore structurally subordinated to any liabilities of the Issuer's subsidiaries. Structural subordination in this context means that, in the event of a winding up or insolvency of a subsidiary of the Issuer, any creditors of that subsidiary (which may include the Noteholders if that subsidiary is a Guarantor) would (subject to the following paragraph) have preferential claims to the assets of that subsidiary ahead of any creditors of the Issuer (i.e. including Noteholders).
Pursuant to the Conditions, however, the Issuer will be required to procure that any subsidiary of the Issuer which provides a guarantee in respect of certain facility agreements of the Issuer shall at or prior to the date of giving such guarantee also be added as an additional Guarantor of the Notes (see "Who is guaranteeing the Notes?" above). If any other such subsidiary of the Issuer becomes an additional Guarantor pursuant to the Conditions, then, by virtue of its guarantee of the Notes, the Noteholders would become senior unsecured creditors of such additional Guarantor and thereafter would cease to be structurally subordinated to other senior unsecured creditors of that entity.
A simplified diagram illustrating the structural subordination of the Issuer's obligations under the Notes to any liabilities of the Issuer's subsidiaries is set out below:
| Type of obligation of the subsidiary |
Examples of obligations | |
|---|---|---|
| Higher ranking |
Proceeds of fixed charge assets |
|
| Expenses of the liquidation/administration |
||
| Preferential creditors | Including remuneration of the subsidiary's employees |
|
| Proceeds of floating charge assets |
||
| Unsecured obligations, including guarantees in respect of them |
For example, trade creditors and unsecured debt obligations (including obligations as borrower or guarantor); and also the Noteholders if the subsidiary is an Original Guarantor or becomes a Guarantor under the Notes |
|
| Shareholders | Intermediate Capital Group plc (i.e. the Issuer of the Notes) |
The arrangements in the Conditions of the Notes under which subsidiaries of the Issuer may be required to become additional Guarantors under the Notes as described above is intended to mitigate the effect of the structural subordination illustrated in the table above.
Are the Notes secured? No, as of the date the Notes are issued, the obligations of the Issuer to pay interest and principal on the Notes will not be secured either by any of the Issuer's or any other member of the Group's assets or otherwise.
Who will represent the interests of the Noteholders?
The Trustee is appointed to act on behalf of the Noteholders as an intermediary between Noteholders and the Issuer throughout the life of the Notes. The main obligations of the Issuer and the Guarantors (such as the obligation to pay and observe the various covenants in the Terms and Conditions of the Notes) are owed to the Trustee. These obligations are enforceable by the Trustee only and not the Noteholders themselves. Although the entity chosen to act as Trustee is chosen and appointed by the Issuer, the Trustee's role is to protect the interests of the Noteholders as a class.
N/A
Terms and Conditions of the Notes beginning on page 129
Do the Notes have voting rights? Noteholders have certain rights to vote at meetings of the Noteholders, but are not entitled to vote at any meeting of shareholders of the Issuer, the Guarantors or any other member of the Group. The Terms and Conditions of the Notes contain provisions for calling meetings of Noteholders to consider matters affecting their interests generally. These provisions permit majorities of certain sizes to bind all Noteholders, including Noteholders who did not attend and vote at the relevant meeting and Noteholders who voted in a different manner than the majority did. Terms and Conditions of the Notes (Condition 10 - Meetings of Noteholders, Modification, Waiver and Substitution) beginning on page 152 Do the Notes contain any covenants? Yes. The Notes contain a negative pledge covenant with respect to the Issuer, each Guarantor and any other Material Subsidiary of the Issuer. In general terms, a negative pledge provision restricts an issuer of unsecured bonds from granting security over assets for other comparable bond financings. Its purpose is to provide price protection for the bonds containing the negative pledge: if the issuer issued similar bonds that had the benefit of security, investors might be more likely to purchase the secured bonds, which may adversely affect the price of the unsecured bonds. Terms and Conditions of the Notes (Condition 3 – Negative Pledge) beginning on page 132 Under the negative pledge provision in the Terms and Conditions of the Notes, therefore, neither the Issuer, nor any Guarantor nor any other Material Subsidiary of the Issuer may create, assume or permit to subsist any security upon the whole or any part of their undertaking, assets or revenues to secure any bond type debt without securing the Notes and the obligations of the Guarantors under the Guarantee equally, subject to certain exceptions. Can the Terms and Conditions of the Notes be amended? The Terms and Conditions of the Notes provide that the Trustee may, without the consent of the Noteholders and without regard to the interests of particular Noteholders, agree 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, (ii) certain other modifications, 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, and (iii) in certain circumstances, the substitution of certain other entities in place of the Issuer, any Guarantor or any previous substituted company as principal debtor or guarantor, as the case may be, under the Trust Deed, the Notes and the Coupons. Terms and Conditions of the Notes (Condition 10 - Meetings of Noteholders, Modification, Waiver and Substitution) beginning on page 152 Noteholders may also sanction a modification of the Terms and Conditions of the Notes by passing an Extraordinary Resolution. What will the proceeds be used for? The net proceeds from each issue of Notes will be applied by the Issuer for its general corporate purposes, which may include investing alongside the Group's diverse strategies as well as funding a return of capital to the Issuer's shareholders. If, in respect of any particular issue, there is a particular identified use of proceeds this will be stated in the relevant Final Terms. Section 14 (Use of Proceeds) on pages 94 to 95 What if I have further questions? If you are unclear in relation to any matter, or uncertain if any Notes offered under the Programme are a suitable investment, you should seek professional advice from your broker, solicitor, accountant or other independent financial adviser before deciding whether or not to invest. N/A
The following section sets out worked examples of how the interest amounts are calculated under a variety of scenarios and how the redemption provisions will affect the Notes.
Three types of Notes may be issued pursuant to this Base Prospectus: Fixed Rate Notes which bear periodic fixed rate interest; Floating Rate Notes which bear periodic floating rate interest; and Zero Coupon Notes, which do not bear interest (or any combination of these). Upon maturity, the Notes will pay a fixed redemption amount. Notes may provide for early redemption at the option of the Issuer (a call option) or at your option either upon a change of control of the Issuer or as otherwise specified (a put option). The Issuer may also elect to redeem the Notes early in certain circumstances for tax reasons.
The examples below are intended to demonstrate how the return on your investment will be calculated depending on the interest type and the relevant redemption provisions specified to be applicable for your Notes.
Fixed Rate Notes pay a periodic and predetermined fixed rate of interest over the life of the Note.
Unless your Notes are redeemed early, in respect of each Note and on each interest payment date you will receive an amount calculated by applying the relevant fixed rate to the principal amount, and then multiplying such amount by the applicable 'day count' fraction (which is a fraction used to reflect the number of days over which interest has accrued).
Assuming, for the purpose of this worked example only, that:
the interest amount payable on the interest payment date will be £15.04 (rounded to two decimal places). This figure is calculated as fixed interest of 3%, or 0.03 × £1,000 × day count fraction of 183/365 or 0.5013699.
Floating Rate Notes pay interest that is calculated by reference to a fluctuating benchmark rate, either (i) an interest rate benchmark, such as the London Interbank Offered Rate (LIBOR) or the Euro Interbank Offered Rate (EURIBOR), or (ii) a rate of interest determined in accordance with market standard definitions, published by the International Swaps and Derivatives Association, Inc ("ISDA Definitions"), plus or minus, in each case, a margin and subject, in certain cases, to a maximum or minimum rate of interest. Interest rate benchmarks reflect the rate at which banks are willing to lend funds to each other in a particular market (for LIBOR this is the London interbank market and for EURIBOR this is the Euro-zone interbank market). Interest rates determined in accordance with the ISDA Definitions reference hypothetical derivative contracts to determine a rate of interest.
If the benchmark rate is, for example, LIBOR or EURIBOR, this will commonly be taken as the rate appearing at the relevant time on a specified screen service. This is referred to in the Terms and Conditions of the Notes and the Final Terms as "Screen Rate Determination" and, in the case of such an issue of Floating Rate Notes, the Final Terms will specify the relevant benchmark (referred to in the Final Terms as the "Reference Rate"), the date on which the benchmark rate will be determined for each interest period (the "Interest Determination Date") and the screen from which the rate will be taken (the "Relevant Screen Page"). If the screen rate is not available, the Terms and Conditions of the Notes contain fallback provisions which allow the rate to be determined on the basis of the arithmetic mean of rates quoted by reference banks in the relevant market.
If the interest rate is to be determined using the ISDA Definitions, this is referred to in the Terms and Conditions of the Notes and the Final Terms as "ISDA Determination". In such a case, the interest rate will be equivalent to the floating rate which would be determined in a hypothetical interest rate swap transaction for which the Floating Rate Option, the Designated Maturity and the relevant Reset Date are specified in the Final Terms. In an interest rate swap, each counterparty agrees to pay either a fixed or floating rate denominated in a particular currency to the other counterparty. The relevant ISDA Definitions on which the hypothetical swap transaction will be based will also be specified in the Final Terms.
Unless your Notes are redeemed early, in respect of each Note and on each interest payment date you will receive an amount calculated by applying the rate of interest for that interest period to the principal amount, and then multiplying such amount by the applicable 'day count' fraction (which is a fraction used to reflect the number of days over which interest has accrued). The rate of interest for any interest period will be determined by adding the relevant margin to the level of the interest rate benchmark or rate determined using the ISDA Definitions, as applicable, for such interest period (or subtracting the relevant margin, if the margin is a negative number). The result will be subject to any maximum or minimum rate which may be specified in the Final Terms.
Assuming, for the purpose of this worked example only, that:
Assuming, for the purpose of this worked example only, that:
No amount of interest will accrue or become payable on Zero Coupon Notes. Zero Coupon Notes are generally issued at discounted issue price (such as 95%) to their principal amount and then repaid at their full amount (100%). Therefore, if you purchase Zero Coupon Notes on their issue date and hold them to maturity, your return will be the difference between the issue price and the principal amount of the Zero Coupon Notes paid on maturity.
Assuming, for the purpose of this worked example only, that the Zero Coupon Notes are issued in a principal amount of £1,000 at a discounted issue price of 95%. An investor will pay £950 to purchase a Note but on maturity will be repaid £1,000. The investor will not receive any interest on the Note but will earn £50 as a result of holding the Note to maturity.
All of the Notes to be issued under the Programme will be principal protected. This means that, provided you hold the Notes until maturity, the amount you receive when the Notes mature will equal your initial investment. Unless your Notes are redeemed early (as described below) or are purchased and cancelled, if you purchased £1,000 in principal amount of the Notes, you will receive £1,000 from the Issuer on the maturity date of the Notes. This is known as redemption at par. In such circumstances, the "Final Redemption Amount" will be shown in the relevant Final Terms as "100 per cent. of the principal amount of the Notes" or "£1,000 per Calculation Amount". The Calculation Amount is a notional amount which is used to calculate interest and redemption amounts on the Notes. It is identified in the Final Terms in paragraph 5 and, for the purposes of this example, is assumed to be £1,000.
A call option gives the issuer the right to redeem the Notes before the final maturity date at a predetermined cash price on a specified date(s). If the Notes are redeemed, you will be paid the redemption amount specified in the Final Terms plus any accrued and unpaid interest. The Issuer is given the right to redeem the Notes in certain circumstances for tax reasons, as described in Condition 5(c) (tax call). The terms of any additional call options will be set out in the Final Terms.
Following the exercise by the issuer of a call option, in respect of each Note, as well as any accrued but unpaid interest, you will receive an amount equal to the Early Redemption Amount specified in the Final Terms (in the case of a tax call) or the Optional Redemption Amount specified in the Final Terms (in the case of any other call option).
If the Optional Redemption Amount in respect of a Note is specified in the Final Terms as being the Make-whole Amount, you will receive an amount calculated with reference to the then current yield of a benchmark government security (such as a UK gilt, a U.S. Treasury or a German bund), as adjusted to reflect the difference in creditworthiness of the Issuer and the relevant government. The Make-whole Amount is intended to produce an amount that, if reinvested in the government security, would continue to give you a yield on the money you originally invested equivalent to the yield that you would have received if the Notes had not been redeemed by the Issuer.
A put option gives you the right to require the Issuer to redeem one or more of your Notes before the final maturity date at a predetermined cash price on a specified date(s). If you elect to exercise the put option in respect of one or more of your Notes, you will be paid the redemption amount specified in the Final Terms plus any accrued and unpaid interest. Notes that are not sold shall continue until the final maturity date.
If Change of Control Put Option is specified as being applicable in the Final Terms, you will have the right to sell one or more of your Notes in the event that (i) more than 50 per cent. of the Issuer's ordinary share capital or shares in the Issuer carrying more than 50 per cent. of voting rights are acquired by any person or persons acting in concert and (ii) as a result of such acquisition, the Notes are subject to a ratings downgrade from a rating agency or, if not rated prior to the change of control, the Notes are not assigned a rating of at least investment grade within prescribed time limits. The terms of any additional put options will be set out in the Final Terms.
Following the exercise by you of a put option, in respect of that Note, as well as any accrued but unpaid interest, you will receive an amount equal to the Change of Control Redemption Amount specified in the Final Terms (in the case of a Change of Control Put Option) or the Optional Redemption Amount specified in the Final Terms (in the case of any other put option).
This section sets out information about Intermediate Capital Group plc and its subsidiary companies.
Intermediate Capital Group plc (the "Issuer") was incorporated on 23 March 1988 under the laws of England and Wales as a private limited company (registration number 02234775).
In 1994, the Issuer re-registered as a public limited company and had its ordinary shares (the "Ordinary Shares") admitted to listing on the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange and changed its name to Intermediate Capital Group plc. The principal legislation under which the Issuer operates is the Companies Act 2006. It is also regulated and authorised by the Financial Conduct Authority (the "FCA"). The Issuer's registered office and principal place of business is at Juxon House, 100 St Paul's Churchyard, London EC4M 8BU, United Kingdom and its telephone number is +44 (0)20 3201 7700.
As at 13 February 2015 (being the latest practicable date before the publication of this Base Prospectus), the issued and fully paid up share capital of the Issuer amounted to £80,495,162.60 divided into 402,475,813 Ordinary Shares of £0.20 each.
The Issuer (together with its consolidated subsidiaries, the "Group") structures and provides mezzanine finance (i.e. finance that ranks below senior loans and above ordinary shareholders' equity), leveraged credit (i.e. senior loans) and equity. The Group had approximately €13.7 billion, as at 30 September 2014, under management in proprietary capital and third party funds. The Issuer is a leading fund manager of, and independent investor in, mezzanine finance and leveraged buyout debt with an experienced investment team operating from its head office in London and offices in Amsterdam, Frankfurt, Hong Kong, Madrid, New York, Paris, Singapore, Stockholm, Sydney and Tokyo. The Issuer's income is generated from fund management fees, interest and dividend income, capital gains arising from the sale of shares and warrants acquired in conjunction with financings and fees from arranging and underwriting mezzanine debt. An Executive Committee comprising the three managing directors of the Issuer has general responsibility for its resources, strategy, financial and operational control and managing the business worldwide.
The Group's business is organised into two business categories: (i) Fund Management Company and (ii) Investment Company.
The Group's fund management business sources and manages investments on behalf of the Issuer's investment business and other third party funds. The funds under management are categorised into three main business areas: (i) mezzanine and minority equity funds; (ii) credit funds; and (iii) real estate funds. Mezzanine and minority equity funds invest in mid-market companies with strong positions in their local markets. Credit funds primarily invest through the Issuer's third party funds in senior loans and high yield bonds of European companies. Real estate funds invest in the Group's third party funds in loans to property businesses with proven track records. The Issuer believes that each of these business areas is underpinned by a common credit culture and process, with the Issuer maintaining a strong local network of investment professionals with local insight, knowledge and relationships to provide it with an operational platform.
The total assets under management as at 30 September 2014 and the most recent two financial year ends are set out in the table below:
| Business | Assets under management (€m) | |||
|---|---|---|---|---|
| 30 September 2014 | 31 March 2014 | 31 March 2013 | ||
| Mezzanine & Minority Equity Funds | 3,658 | 3,678 | 4,395 | |
| Credit Funds and segregated mandates | 6,048 | 5,717 | 4,972 | |
| Real Estate Funds | 1,653 | 1,274 | 533 | |
| Investment Company | 2,343 | 2,311 | 3,030 | |
| Total assets under management | 13,702 | 12,980 | 12,930 |
The Group has been managing third party mezzanine funds since 1998. These funds invest alongside the Issuer on a co-investment basis, sharing the benefits of the Issuer's local knowledge, sourcing expertise, investment discipline and on-going asset management. The Issuer provides these asset management services for institutional investors in over 25 countries, including sovereign wealth funds, insurance companies, charitable foundations, funds of funds, and government and corporate pension funds.
As at 30 September 2014, the Issuer managed nine mezzanine funds.
In 1999, the Group built upon the skills it had acquired through its mezzanine lending to raise third party money to invest in sub-investment grade funds containing a mixture of European senior debt, mezzanine debt and high yield bonds issued by companies in leveraged buyout transactions. The Issuer closed its first Collateralised Debt Obligation ("CDO") fund in the same year, the first of its kind to be based on European loan, bond and mezzanine assets.
The credit funds invest in liquid assets, such as senior and subordinated loans and high yield bonds as well as illiquid private loans. As at 30 September 2014, the Issuer managed 25 credit funds.
In 2010, the Issuer acquired a 51 per cent. stake in Longbow Real Estate Capital LLP ("ICG Longbow") which represented the entry of the Group into the UK real estate debt market. In September 2014, the remaining 49 per cent. was acquired by the Issuer. ICG Longbow seeks to capitalise on market opportunities in this market by focusing on providing mezzanine finance to leading UK property companies with a proven track record; providing senior finance to support acquisition of under-managed properties, and opportunistically acquiring high quality loans from the secondary market at discounted prices. ICG Longbow leverages its extensive network of relationships with UK property companies, advisors and lenders to seek out investment opportunities.
As at 30 September 2014, the Issuer managed four real estate funds.
The Group's Investment Company holds the Group's investment in and co-investment alongside ICG funds. The Issuer's investment portfolio has grown from a value of £144 million at the time of its listing in 1994 to £1.83 billion as at 30 September 2014.
The Group's Co-Investment portfolio as at 30 September 2014 consisted of investments in over 87 different companies diversified by sector, size and geography, being spread across 27 different industries and 17 countries. As at 30 September 2014, the largest industrial sector, business services, represented 9.6 per cent. of the total portfolio of the Group. Further details of the portfolio are included below under "Co-Investment Portfolio". In addition, the Investment Company holds investments in ICG's funds and as at 30 September 2014, 24 such investments were in place.
The Group currently funds these activities from its own resources of shareholder funds, bank debt, onbalance sheet securitisation and private placement debt.
The Group's income is generated from managing funds for third parties, interest and dividend income, capital gains arising from the sale of shares and warrants acquired in conjunction with mezzanine financings and fees from arranging and underwriting mezzanine assets.
The Issuer's profit before tax for the years ending 31 March 2014 and 31 March 2013 as well as the six months ending 30 September 2014 was as follows:
| Business category | Profit before tax (£m) |
|||
|---|---|---|---|---|
| For the 6 months ended 30 September 2014 |
For the year ended 31 March 2014 |
For the year ended 31 March 2013 |
||
| Fund Management Company | 26.7 | 35.0 | 40.4 | |
| Investment Company | 61.4* | 140.1* | 107.9* | |
| Total Group | 88.1* | 175.1* | 148.3* |
* Excludes fair value movements of derivatives (all periods).
The Issuer acts as the holding company for its subsidiary undertakings, the principal activities of which are the provision of mezzanine capital and equity to companies in Europe, the Asia Pacific region and the United States, along with the management of third party funds. As at the date of this Base Prospectus, the Issuer had the following significant subsidiary undertakings all of which are, save as described below, private limited companies and wholly owned:
| Name | Country of incorporation |
Proportion of Issuer's ownership interest |
Principal activity |
|---|---|---|---|
| Intermediate Capital Investments Limited | United Kingdom | 100 per cent. | Investment Company |
| Intermediate Capital Managers Limited | United Kingdom | 100 per cent. | Advisory Company |
| ICG Alternative Investment Limited United Kingdom | 100 per cent. | Advisory Company | |
| Intermediate Finance II PLC United Kingdom | 100 per cent. | Provider of mezzanine finance | |
| JOG Partners Limited. | United Kingdom | 100 per cent. | Investment Company |
| Intermediate Investments LLP | United Kingdom | 100 per cent. | Holding Company for loans and |
| investments | |||
| Intermediate Investments Jersey Limited. | Jersey | 100 per cent. | Investment Company |
| Intermediate Capital Asia Pacific Limited | Hong Kong | 100 per cent. | Advisory Company |
| Intermediate Capital Group SAS | France | 100 per cent. | Advisory Company |
| Intermediate Capital Group Espana SL | Spain | 100 per cent. | Advisory Company |
| Intermediate Capital Nordic AB | Sweden | 100 per cent. | Advisory Company |
| Intermediate Capital Group Beratungsgesellschaft GmbH | Germany | 100 per cent. | Advisory Company |
| Intermediate Capital Group Benelux B.V | Amsterdam | 100 per cent. | Advisory Company |
| Intermediate Capital Australia Pty Limited. | Australia | 100 per cent. | Advisory Company |
| Intermediate Capital Group Inc. | United States | 100 per cent. | Advisory Company |
| Intermediate Capital Group (Singapore) Pte. Limited | Singapore | 100 per cent. | Advisory Company |
| Nomura Japan KK | Japan | 50 per cent. | Advisory Company |
| ICG FMC Ltd | United Kingdom | 100 per cent. | Holding Company for funds |
| management | |||
| Longbow Real Estate Capital LLP | United Kingdom | 100 per cent. | Advisory Company |
| ICG Europe Fund V Jersey Limited | Jersey | 20 per cent. | Investment Company |
| ICG Global Investment Jersey Limited | Jersey | 100 per cent. | General Partner |
| ICG Fund Advisors LLC | United States | 100 per cent. | Advisory Company |
| ICG Debt Advisors LLC | United States | 100 per cent. | Advisory Company |
| ICG Alternative Credit LLC | United States | 100 per cent. | Advisory Company |
| ICG Strategies Secondaries Advisors | United States | 100 per cent. | Advisory Company |
| ICG US CLO 2014-1, Limited | United States | 100 per cent. | Investment Company |
| ICG US CLO 2014-2, Limited | United States | 100 per cent | Investment Company |
| ICG US CLO 2014-3, Limited | United States | 100 per cent | Investment Company |
The Group's strategic priorities are to:
The Group aims to increase its assets under management by building on its credit strategy and launching new products for institutional investors through its well-established distribution team, which it intends to expand further.
In respect of the Group's buyout mezzanine business, the Issuer intends to continue to build on its positions in European and Asia Pacific mezzanine and to expand its presence in the United States.
The Group seeks to (i) increase its assets under management in respect of senior loans and high yield bonds through a growing range of investment products and (ii) exploit new investment opportunities arising as a result of the liquidity shortage in Europe, using the Issuer's distribution team to market these opportunities to investors. In addition, the Group will continue to review investment opportunities with a view to expanding its franchise geographically and through selective acquisitions.
In its commercial real estate mezzanine business, the Issuer believes that there are opportunities to grow its ICG Longbow franchise.
The Issuer believes that it has achieved success in its mezzanine and European leveraged loan and high yield bond businesses by combining local, dedicated teams of investment specialists with a common investment method, following similar diligence and review processes, and operating platform. In 2010, the Issuer acquired a 51 per cent. stake in ICG Longbow (which became a fully owned subsidiary in September 2014) in order to gain a foothold in the real estate mezzanine market. The Group has stated its intention to increase the investment products it offers through a measured expansion into adjacent asset classes and this objective has seen new teams recently joining the Group covering the alternative credit and private equity secondaries asset classes.
The Group has a wide and experienced local network dedicated to sub-investment grade investments and therefore believes that it has a strong capability for originating deals. The Issuer recognises the importance of having local teams that speak the languages and understand the cultures of the markets in which they operate. The Issuer believes that these investment teams have (i) established it as a trusted and experienced investment partner with an ability to structure deals in an innovative manner and (ii) built long-standing relationships with local private equity sponsors, banks, advisors and management teams, providing it with a flow of deals and access to investment opportunities.
Each of the Group's investment opportunities is considered on its merits and in the context of the expected risk and return requirements set by the Issuer's Investment Committee. The Issuer aims to limit the downside risk of the investment with the underlying focus on generating cash flow and the repayment of the investment. In order to achieve this, the Issuer's investment strategy is underpinned by rigorous analysis of the credit fundamentals of each investment.
The Group believes that regular involvement with the companies in its investment portfolio is fundamental to managing and supporting the value of its investments. The monitoring of investments is a key focus of both the Issuer's investment executives and the Issuer Investment Committee and the Issuer typically seeks board attendance rights from companies in its investment portfolio. The Issuer's investment executives are responsible for attending monthly and quarterly board meetings. The Issuer believes that such board representation assists in:
• effective portfolio management due to access to the relevant company's management and information; and
• building and strengthening relationships with stakeholders, which has historically provided the Issuer with follow-on or new investment opportunities.
The Issuer believes that by closely monitoring investments and with the experience of its executives in recovering principal amounts invested in defaulting companies, it can identify risks within its investment portfolio at an early stage and act accordingly.
The Mezzanine and Minority Equity Investment Committee framework is based on three regionally focussed investment committees, one each for Europe, Asia Pacific and the United States. All of these committees are chaired by Christophe Evain, Chief Executive Officer (CEO) and Chief Investment Officer (CIO). The Chairman selects up to seven members from two pre-defined lists of senior investment professionals including Managing Directors (who sit on all mezzanine and minority equity investment committees) and senior members of the mezzanine and equity business. One of these members will be nominated as a sponsor member, to reflect the specificities of the investment (i.e. geography, size, nature of the transaction). The committee members are responsible for reviewing and approving all investment proposals presented by investment executives in accordance with the Investment Policy set by the Board. The approval of the Board is required for large investments according to pre-set thresholds. These Mezzanine and Minority Equity Investment Committees also review and manage potential and actual conflicts of interest, review quarterly performance reports of the Group's portfolio companies and co-ordinate management plans for individual assets as necessary.
The Credit Funds Investment Committee framework is based on product specific investment committees with most being chaired by Christophe Evain, CEO and CIO. The Alternative Credit Investment Committee is chaired by the head of that business. The Chairman of each specific investment committee selects up to five members among six pre-defined lists of senior investment professionals including Managing Directors and senior members of the Credit Funds Management team. One of these members will be nominated as sponsor member, depending on the specificities of the investment (i.e. geography, size, nature of the transaction). The members of each specific investment committee are responsible for reviewing and approving all investment proposals presented by credit executives in accordance with the Investment Policy. The Credit Funds Investment Committee also reviews and manages potential and actual conflicts of interest, reviews the quarterly performance reports of the Group's credit funds' portfolio companies and co-ordinates management plans for individual assets as necessary.
By chairing most of the mezzanine and credit fund investment committees, the CIO ensures that consistency of decision making is applied across the firm.
The ICG Longbow Investment Committee is chaired by a senior member of the real estate team and is comprised of members representing the senior investment professionals and credit and risk functions of ICG Longbow. The Longbow Investment Committee is responsible for reviewing and approving all investment proposals relating to ICG Longbow's commercial real estate debt funds. The Longbow Investment Committee also reviews and manages potential conflicts of interest, reviews the quarterly performance reports of investments and co-ordinates management plans for individual assets as necessary.
The Group's strategy is to leverage its deep sector or company specific knowledge to identify undervalued assets through rigorous bottom-up research and analysis of the fundamentals of the underlying company.
| Issuer's | |
|---|---|
| Co-Investment Portfolio |
|
| Industry Sector | (per cent.) |
| Financial services | 5.5 |
| Business services | 9.6 |
| Construction materials | 8.3 |
| Retail | 6.4 |
| Telecoms, media and technology | 9.3 |
| Entertainment and leisure | 5.1 |
| Healthcare | 6.1 |
| Food and consumer products | 5.5 |
| Transport | 4.5 |
| Utilities and waste management | 3.4 |
| Pharmaceuticals and chemicals | 0.6 |
| Manufacturing and engineering | 2.6 |
| Real estate | 3.8 |
| Automotive | 2.8 |
| Packaging | 2.2 |
| Publishing & advertising | 0.2 |
| Investment in ICG Funds | 23.3 |
| Other | 0.7 |
| Region | Percentage of Issuer's Co Investment Portfolio (per cent.) |
|---|---|
| UK | 31.6 |
| France | 28.4 |
| Germany | 6.4 |
| North America | 8.0 |
| Australia | 4.9 |
| Nordic | 5.3 |
| Italy | 3.7 |
| Spain | 7.1 |
| Asia Pacific | 0.1 |
| Benelux | 4.0 |
| New Zealand | 0.5 |
| Other Europe | 0.0 |
The top 20 co-investment assets, as valued on the Issuer's balance sheet as at 30 September 2014 on a consolidated basis, which amounted to £744.3 million in aggregate, were as follows:
| Investment | ||||
|---|---|---|---|---|
| Company | Country | Industry | year | £m(1) |
| Gerflor | France | Building Materials | 2006 | 95.2 |
| Minimax | Germany | Electronics | 2014 | 60.2 |
| N&W Global Vending | Italy | Retail | 2008 | 54.2 |
| SAG | Germany | Utilities | 2007 | 42.1 |
| Feu Vert | France | Automotive | 2007 | 42.1 |
| Fort Dearborn | US | Packaging & Paper | 2010 | 38.1 |
| Euro Cater | Denmark | Retail | 2013 | 37.3 |
| Education Personnel | UK | Employment Agency | 2014 | 34.4 |
| Fraikin | France | Transport | 2007 | 34.2 |
| Inspecta | Finland | Business Services | 2007 | 33 |
| AAS Link | Australia | Financial Services | 2007 | 32.9 |
| Parkeon | France | Business Services | 2007 | 32 |
| Intelsat | US | Telecoms | 2008 | 30 |
| Flaktwoods | France | Telecoms | 2007 | 29.6 |
| Casa Reha | Germany | Healthcare | 2008 | 29.1 |
| ATPI | UK | Leisure | 2012 | 23.3 |
| Courtepaille | France | Retail | 2011 | 23.1 |
| Firth Rixon | UK | Manufacturing and Engineering | 2007 | 23 |
| Tractel | France | Manufacturing and Engineering | 2007 | 22.9 |
| Hospital Management Group | US | Healthcare | 2011 | 21.7 |
(1) Carrying value on the Issuer's balance sheet at 30 September 2014.
The top 10 equity assets, as valued on the Issuer's balance sheet as at 30 September 2014 on a consolidated basis, which amounted to £259.3 million in aggregate, were as follows:
| Company | Country | Industry | £m(1) |
|---|---|---|---|
| Gerflor | France | Building Materials | 74 |
| AAS Link | Australia | Financial Services | 32.9 |
| Intelsat | US | Telecoms | 30 |
| Parkeon | France | Business Services | 27.9 |
| Mennisez | France | Food and Consumer Products | 21.6 |
| Minimax | Germany | Electronics | 15.9 |
| Quorn | UK | Food Manufacturing | 15.6 |
| Anacap | UK | Financial Services | 14.2 |
| Acromas | UK | Financial Services | 13.6 |
| ACVR | Netherlands | Waste Management | 13.6 |
Note:
(1) Carrying value on the Issuer's balance sheet at 30 September 2014.
The Issuer is not aware of any known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on its prospects for the current financial year.
The Issuer's management team has extensive experience in the credit market. Two of the Executive Directors have been employed by the Issuer for over ten years. Furthermore, the management team represents a spread of nationalities that provides the relevant local knowledge and understanding to identify and manage the Group's diverse portfolio. The Issuer believes that it has the highest number of investment professionals compared to any other leading player in the European and Asia Pacific mezzanine markets. This enables the Issuer to dedicate substantial time and resources to the origination of high quality investments as well as managing the portfolios.
The Issuer maintains a remuneration policy that promotes alignment between the staff and shareholders, supports the long term corporate strategy of the Issuer, promotes staff ownership and is transparent. In particular, payments under the Issuer's various medium-term and long-term incentive schemes are only made in respect of realised gains.
The Issuer's directors (for the purposes of this section, "Directors" and each a "Director"), as at the date of this Base Prospectus, are as follows:
| Directors | Title | Principal activities outside the Group |
|---|---|---|
| Christophe Evain | Managing Director and Chief Executive Officer (Executive) |
Not Applicable |
| Philip Keller | Managing Director and Chief Financial Officer (Executive) |
Not Applicable |
| Benoît Durteste | Managing Director (Executive) |
Not Applicable |
| Justin Dowley | Chairman (Non-Executive) |
Ascot Authority (Holdings) Limited Melrose Industries Plc Claridge Partners Limited L.J. and E.L. Dowley Farming Partnership National Crime Agency |
| Peter Gibbs | Director (Non-Executive) |
Bank of America Merrill Lynch (UK) Pension Plan Trustee Ltd Friends Life Group plc Aspect Capital Limited |
| Kevin Parry | Director (Non-Executive) |
Standard Life PLC Daily Mail and General Trust Plc Homes and Communities Agency Royal National Children's Foundation |
| Kim Wahl | Director (Non-Executive) |
Ceki AS Strømstangen AS UPM Kymmene Oy Voxtra Foundation/Voxtra AS DNB Bank ASA |
| Kathryn Purves | Director (Non-Executive) |
Chief Risk Officer of Partnership Assurance Group PLC |
Justin Dowley. Mr Dowley is the Chairman of the Issuer. He qualified as a chartered accountant with Price Waterhouse in 1980. From 1981 until 2011, his career was in investment banking: he was a founder partner of Tricorn Partners, Head of Investment Banking at Merrill Lynch Europe and a Director of Morgan Grenfell. He is a non-executive Director of Melrose Industries PLC and is also a director of a number of private companies including Ascot Authority (Holdings) Limited.
Christophe Evain. Mr Evain has been CEO of the Issuer since 2010; he had worked at the Issuer for 16 years prior to this and was responsible for opening its offices in Paris, Hong Kong and New York. Before working for the Issuer, Mr Evain held a number of roles in leading financial institutions including Banque de Gestion Privée, National Westminster Bank and Crédit Lyonnais specialising in leverage and structured finance. He is a Graduate of Dauphine University, Paris. He is the Chief Executive Officer and chairs the Issuer's Investment Committees in his role as Chief Investment Officer.
Philip Keller. Prior to joining the Issuer in 2006, Mr Keller was finance director at ERM Holdings Ltd., one of the world's largest environmental consultancies. He has previously held a number of financial directorships in the GlaxoSmithKline and Johnson & Johnson groups. He is a chartered accountant, and as a member of the Executive Committee he is responsible for the Issuer's finance and operations.
Benoît Durteste. Prior to joining the Issuer in 2002, Mr Durteste worked in the leveraged and structured finance divisions of Swiss Reinsurance Company Ltd. and BNP Paribas S.A. He also worked for GE Capital as chief financial officer of a portfolio company. He is a graduate of the Ecole Supérieure de Commerce de Paris.
Kevin Parry. Mr Parry is Chairman of the Issuer's Audit Committee and Risk Committee and Senior Independent Director. He is also a director of Standard Life PLC, Daily Mail and General Trust Plc and the Homes and Communities Agency. He was formerly chief financial officer of Schroders plc, chief executive at the Management Consulting Group Plc and a managing partner of KPMG. He is a chartered accountant.
Peter Gibbs. Mr Gibbs is Chairman of the Issuer's Remuneration Committee. He was chief investment officer of Merrill Lynch's investment management activities outside the United States until 2008, and prior to that co-head of Merrill Lynch's equity investments worldwide. He is currently a non-executive director of Friends Life Group plc and a director of Bank of America Merrill Lynch (UK) Pension Plan Trustee Ltd.
Kim Wahl. Mr Wahl joined the Issuer on 10 July 2012. He has extensive European private equity experience having co-founded IK Investment Partners in 1989, and he is owner and Chairman of investment firm Strømstangen AS, focusing on asset management emphasising long term value creation, which he established in 2004. Mr Wahl is also a board member of Ceki AS and DNB Bank ASA. In addition, Mr Wahl is Co-Founder and Chairman of the Voxtra Foundation.
Kathryn Purves. Ms Purves joined the Issuer in November 2014. Ms Purves is Chief Risk Officer of Partnership Assurance Group plc ("Partnership"), a leading provider of non-standard annuities which is listed on the London Stock Exchange. Ms Purves is a Director of Partnership's subsidiary life assurance company. Before joining Partnership in 2008, Ms Purves worked within the private equity industry for approximately ten years. Prior to that she worked as an investment manager for Deutsche Bank's European fund of funds team and UBS Capital's direct investment team in Australia and Asia. She is a graduate of the University of Edinburgh.
Christophe Evain, Philip Keller and Benoît Durteste are also Directors of Intermediate Capital Investments Limited ("ICIL") and Intermediate Capital Managers Limited ("ICML") and are Directors of each of the designated members of Intermediate Investments LLP ("IIL"). As a result, potential conflicts of interest may from time to time arise between the duties each such Director owes to the Issuer and the duties he owes to an Original Guarantor. The Issuer's Articles of Association allow the Directors to disclose and, where appropriate, authorise conflicts of interest and the Board has adopted a policy and effective procedures for managing and, where appropriate, approving potential conflicts of interest.
Save as set out above, as at the date of this Base Prospectus, no Director has a potential conflict of interest between any of his/her duties to the Issuer and his/her private interests and/or other duties.
The business address for each of the Directors is Juxon House, 100 St Paul's Churchyard, London EC4M 8BU, United Kingdom.
The Audit Committee consists of the four independent Non-Executive Directors of the Issuer: Kevin Parry (Chairman of the Audit Committee), Peter Gibbs, Kim Wahl and Kathryn Purves. The Executive Directors and Chairman of the Board of Directors are not members of the Audit Committee but are normally invited to attend committee meetings. Deloitte LLP, the Issuer's auditor, is also invited to attend such meetings and has direct access to committee members. The Audit Committee meets regularly, at least four times a year, and is responsible for:
The Risk Committee consists of five Non-Executive Directors of the Issuer, these being Kevin Parry (Chairman of the Risk Committee), Peter Gibbs, Justin Dowley, Kim Wahl and Kathryn Purves. The Executive Directors are not members of the Risk Committee but are normally invited to attend to the extent appropriate. The Risk Committee is responsible for:
The Issuer complied, throughout the year ended 31 March 2014 as well as the six months ended 30 September 2014, with the provisions of the UK Corporate Governance Code issued by the Financial Reporting Council (the "FRC Code").
As at 30 January 2015 (being the latest practicable date before the publication of this Base Prospectus), the Issuer was aware of the following persons, other than Directors of the Issuer and other than the Issuer itself by virtue of it holding treasury shares, who, directly or indirectly, were interested in 3 per cent. or more of the voting rights attached to the Issuer's share capital (calculated exclusive of treasury shares):
| Shareholder | Number of Ordinary Shares |
Approximate percentage of the voting rights |
|---|---|---|
| Schroders | 29,164,923 | 7.2% |
| BlackRock Inc | 27,927,826 | 6.9% |
| Directors, Employees & Related Parties | 19,880,752 | 4.9% |
| Aviva Investors | 19,167,975 | 4.8% |
| Ameriprise Financial | 16,232,381 | 4.0% |
|---|---|---|
| Baillie Gifford & Co | 15,616,202 | 3.9% |
| JO Hambro Capital Mgt | 14,342,540 | 3.6% |
| LSV Asset Mgt | 13,147,058 | 3.3% |
| Tikehau Group | 12,654,326 | 3.1% |
| Bank of New York Mellon | 12,531,136 | 3.1% |
| Legal & General Investment Mgt | 12,101,019 | 3.0% |
| Norges Bank Investment Mgt | 11,935,007 | 3.0% |
This section sets out selected financial information relating to Intermediate Capital Group plc and its consolidated subsidiaries.
The financial summary set out below has been extracted without material adjustment from the audited consolidated financial statements of the Issuer for the years ended 31 March 2014 and 31 March 2013. The selected financial information should be read together with the consolidated financial statements. The audited consolidated financial statements of the Issuer for the years ended 31 March 2014 and 31 March 2013 are incorporated by reference into this Base Prospectus.
| For the year ended 31 March |
||
|---|---|---|
| 2014 | 2013 | |
| (£m, except per share information) | ||
| Finance income | 199.4 | 218.6 |
| Gains on investments | 149.4 | 73.0* |
| Fee and other operating income | 85.8 | 78.8 |
| 434.6 | 370.4 | |
| Finance costs | (61.4) | (60.7) |
| Impairments | (112.4) | (80.0) |
| Administrative expenses | (102.1) | (87.1) |
| Profit before tax | 158.7 | 142.6 |
| Tax expense | (21.3) | (18.8) |
| Profit for the year | 137.4 | 123.8 |
| Attributable to: | ||
| Equity holders of the parent | 137.2 | 124.4 |
| Non-controlling interests | 0.2 | (0.6) |
| 137.4 | 123.8 | |
| Earnings per share | 35.7p | 32.1p |
| Diluted earnings per share | 35.6p | 32.1p |
* Fair value movements on financial assets
| As at 31 March | ||
|---|---|---|
| 2014 (£m) |
2013 (£m) |
|
| Non-current assets Current assets |
2,097.2 368.2 |
2,721.7 177.7 |
| Total assets | 2,465.4 | 2,899.4 |
| Total equity | 1,508.0 | 1,562.9 |
| Non-current liabilities Current liabilities |
806.2 151.2 |
749.4 587.1 |
| Total liabilities | 957.4 | 1,336.5 |
| Total equity and liabilities | 2,465.4 | 2,899.4 |
| For the year ended 31 March |
||
|---|---|---|
| 2014 (£m) |
2013 (£m) |
|
| Net cash (used in)/generated from operating activities | 539.9 | (129.8) |
| Net cash (used in)/from investing activities | (2.7) | (1.3) |
| Net cash (used in)/from financing activities | (407.1) | 24.3 |
| Net increase/(decrease) | 130.1 | (106.8) |
| Net cash and cash equivalents at the end of the year | 164.8 | 41.8 |
The financial summary set out below has been extracted without material adjustment from the unaudited condensed consolidated financial statements of the Issuer for the six months ended 30 September 2014 and 30 September 2013. The selected financial information should be read together with the consolidated financial statements. The unaudited condensed consolidated financial statements of the Issuer for the six months ended 30 September 2014 and 30 September 2013 are incorporated by reference into this Base Prospectus.
| For the six months ended 30 September* |
||
|---|---|---|
| 2014 | Restated 2013 |
|
| (£m, except per share information) | ||
| Finance income | 81.3 | 114.8 |
| Gains on investments | 42.9 | 155.3 |
| Fee and other operating income | 53.1 | 40.1 |
| 177.3 | 310.2 | |
| Finance costs | (14.3) | (29.9) |
| Impairments | (21.1) | (76.3) |
| Administrative expenses | (56.6) | (48.7) |
| Profit before tax | 85.3 | 155.3 |
| Tax expense | (15.1) | (32.4) |
| Profit for the period | 70.2 | 122.9 |
| Attributable to: | ||
| Equity holders of the parent | 69.6 | 123.0 |
| Non-controlling interests | 0.6 | (0.1) |
| 70.2 | 122.9 | |
| Earnings per share | 18.2p | 32.0p |
| Diluted earnings per share | 18.2p | 31.9p |
| As at 30 September* | ||
|---|---|---|
| 2014 (£m) |
Restated 2013 (£m) |
|
| Non-current assets Current assets |
1,844.0 315.5 |
2,049.2 382.0 |
| Total assets | 2,159.5 | 2,431.2 |
| Total equity | 1,451.5 | 1,521.8 |
| Non-current liabilities Current liabilities |
591.7 116.3 |
636.8 272.6 |
| Total liabilities | 708.0 | 909.4 |
| Total equity and liabilities | 2,159.5 | 2,431.2 |
| For the six months ended 30 September |
||
|---|---|---|
| 2014 (£m) |
Restated 2013 (£m) |
|
| Net cash (used in)/from operating activities Net cash (used in)/from investing activities |
107.1 (2.7) |
573.2 (1.8) |
| Net cash (used in)/from financing activities Net increase/(decrease) |
(74.4) 30.0 |
(424.3) 147.1 |
| Net cash and cash equivalents at end of period | 140.2 | 184.1 |
* In the 30 September 2014 unaudited consolidated financial statements, the 30 September 2013 balances were restated as the Issuer became an Investment Entity under International Financial Reporting Standard (IFRS) 10 - 'Consolidated Financial Statements' and accounted for investment entities it controlled at fair value where they were previously consolidated.
This section sets out information about the Original Guarantors.
Intermediate Capital Investments Limited ("ICIL") was incorporated on 9 December 1988 under the Companies Act 1985 as a private limited company and registered in England and Wales with registered number 02327070. ICIL is governed by the Companies Act 2006. Its registered office is Juxon House, 100 St Paul's Churchyard, London EC4M 8BU, United Kingdom, and its telephone number is +44 (0)203 201 7700.
As at 13 February 2015 (being the latest practicable date prior to the publication of this Base Prospectus), the issued and fully paid up share capital of ICIL amounted to £9,001,000 divided into 9,001,000 ordinary shares of £1 each.
ICIL's primary business activities are the making of investments and owning an investment portfolio as part of the Issuer's investment business (see "Description of Intermediate Capital Group plc – Investment Company").
ICIL is a wholly owned subsidiary of the Issuer (see "Description of Intermediate Capital Group plc – Group Structure").
The Directors of ICIL and their principal outside activities are as follows:
| Directors | Title | Principal activities outside the Group |
|---|---|---|
| Christophe Evain | Chief Executive Officer (Executive) | Not Applicable |
| Philip Keller | Finance Director (Executive) | Not Applicable |
| Benoît Durteste | Managing Director (Executive) | Not Applicable |
The business address of the Directors is Juxon House, 100 St Paul's Churchyard, London EC4M 8BU, United Kingdom.
Each of the Directors listed above is also a Director of the Issuer. As a result, potential conflicts of interest may from time to time arise between the duties each Director owes to ICIL and the duties he owes to the Issuer. ICIL's Articles of Association allow the Directors to disclose and, where appropriate, authorise conflicts of interest and the Board has adopted a policy and effective procedures for managing and, where appropriate, approving potential conflicts of interest.
Save as set out above, at the date of this Base Prospectus, no Director has a potential conflict of interest between any of his duties to ICIL and his private interests and/or other duties.
The United Kingdom's corporate governance regime does not directly apply to ICIL, it being a wholly owned subsidiary of the Issuer; the Issuer is a public limited company having its Ordinary Shares admitted to listing on the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange.
Intermediate Capital Managers Limited ("ICML") was incorporated on 12 December 1988 under the Companies Act 1985 as a private limited company and registered in England and Wales with registered number 02327504. ICML is governed by the Companies Act 2006. Its registered office is Juxon House, 100 St Paul's Churchyard, London EC4M 8BU, United Kingdom, and its telephone number is +44 (0)203 201 7700.
As at 13 February 2015 (being the latest practicable date prior to the publication of the Base Prospectus), the issued and fully paid-up share capital of ICML amounted to £400,000 divided into 400,000 ordinary shares of £1 each.
ICML's primary business activity is to act as the investment advisor to the Issuer's fund management business (see "Description of Intermediate Capital Group plc – Fund Management Company").
ICML is a wholly owned subsidiary of the Issuer (see "Description of Intermediate Capital Group plc – Group Structure").
The directors of ICML and their principal outside activities are as follows:
| Directors | Title | Principal activities outside the Group |
|---|---|---|
| Christophe Evain | Chief Executive Officer (Executive) | Not Applicable |
| Philip Keller | Finance Director (Executive) | Not Applicable |
| Benoît Durteste | Managing Director (Executive) | Not Applicable |
The business address of the Directors is Juxon House, 100 St Paul's Churchyard, London EC4M 8BU, United Kingdom.
Each of the Directors listed above is also a Director of the Issuer. As a result, potential conflicts of interest may from time to time arise between the duties each Director owes to ICML and the duties he owes to the Issuer. ICML's Articles of Association allow the Directors to disclose and, where appropriate, authorise conflicts of interest and the Board has adopted a policy and effective procedures for managing and, where appropriate, approving potential conflicts of interest.
Save as set out above, at the date of this Base Prospectus, no Director has a potential conflict of interest between any of his duties to ICML and his private interests and/or other duties.
The United Kingdom's corporate governance regime does not directly apply to ICML, it being a wholly owned subsidiary of the Issuer; the Issuer is a public limited company having its Ordinary Shares admitted to listing on the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange.
Intermediate Investments LLP ("IIL") was incorporated on 7 November 2006 under the Limited Liability Partnerships Act 2000 as a limited liability partnership registered in England and Wales with registered number OC323795. IIL is governed by the Limited Liability Partnerships Act 2000. Its registered office is Juxon House, 100 St Paul's Churchyard, London EC4M 8BU, United Kingdom, and its telephone number is +44 (0)203 201 7700.
Under Clause 3.2 of the partnership agreement dated 8 November 2006 (the "Partnership Agreement")entered into between JOG Partners Limited and Intermediate Capital Limited, and acceded to by Intermediate Investments Guarantee Limited by way of a deed of accession dated 4 December 2006, IIL carries on (i) the business of investing in permitted investments listed therein with a view to a profit, (ii) any other business which may seem to members capable of being conveniently carried on in connection with investing in permitted investments listed therein, and (iii) any other business with a view to profit as the members may agree in writing from time to time.
IIL's primary business activity is that of holding and managing an investment portfolio as part of the Issuer's investment business (see "Description of Intermediate Capital Group plc – Investment Company").
The Issuer is the controlling party and ultimate parent company of IIL (see "Description of Intermediate Capital Group plc – Group Structure").
The designated members of IIL are:
| Designated member | Date joined | Directors |
|---|---|---|
| JOG Partners Limited 8 November 2006 | Christophe Evain Philip Keller Benoît Durteste |
|
| Intermediate Capital Limited 8 November 2006 | Christophe Evain Philip Keller Benoît Durteste |
|
| Intermediate Investments Guarantee Limited 4 December 2006 | Philip Keller Christophe Evain Benoît Durteste |
The business address of the designated members and the Directors of the designated members is Juxon House, 100 St Paul's Churchyard, London EC4M 8BU, United Kingdom.
Each of the Directors of the designated members listed above is also a Director of the Issuer. As a result, potential conflicts of interest may from time to time arise between the duties each Director owes to each designated member and IIL and the duties he owes to the Issuer. The articles of association of the designated members allow the designated members to disclose and, where appropriate, authorise conflicts of interest and the designated members have adopted a policy and effective procedures for managing and, where appropriate, approving potential conflicts of interest.
Save as set out above, at the date of this Base Prospectus, no designated member nor any director of any designated member has a potential conflict of interest between any of their duties to IIL and his/her private interests and/or other duties.
The United Kingdom's corporate governance regime does not directly apply to IIL, it being controlled by the Issuer; the Issuer is a public limited company having its Ordinary Shares admitted to listing on the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange.
This section sets out selected financial information relating to the Original Guarantors.
The financial summary set out below has been derived from the audited financial statements of ICIL for the financial years ended 31 March 2014 and 31 March 2013 and should be read together with such audited financial statements. The audited financial statements of ICIL for the financial years ended 31 March 2014 and 31 March 2013 are incorporated by reference into this Base Prospectus.
| For the year ended 31 March | ||
|---|---|---|
| 2014 (£'000) |
2013 (£'000) |
|
| Profit on ordinary activities before taxation | 93,395 | 28,186 |
| Tax credit/(charge) on profit on ordinary activities | (23,351) | 14,086 |
| Profit on ordinary activities after taxation | 70,044 | 42,272 |
| As at 31 March | ||
|---|---|---|
| 2014 | 2013 | |
| (£'000) | (£'000) | |
| Fixed Asset: | ||
| Investments | 186,762 | 216,517 |
| Current Assets | 83,703 | 93,403 |
| Total Assets | 270,465 | 309,920 |
| Creditors: | ||
| Amounts falling due within one year | (200,151) | (239,650) |
| Net Assets | 70,314 | 70,270 |
| Capital and reserves | ||
| Equity shareholders' funds | 70,314 | 70,270 |
| Total capital employed | 70,314 | 70,270 |
| For the year ended 31 March |
||
|---|---|---|
| 2014 (£'000) |
2013 (£'000) |
|
| Net cash outflow from operating activities | - | (88) |
| Cash and cash equivalents at the beginning of the year | - | 88 |
| Cash and cash equivalents at the end of the year | - | - |
The financial summary set out below has been derived from the audited financial statements of ICML for the financial years ended 31 March 2014 and 31 March 2013 and should be read together with such audited financial statements. The audited financial statements of ICML for the financial years ended 31 March 2014 and 31 March 2013 are incorporated by reference into this Base Prospectus.
| For the year ended 31 March* | ||
|---|---|---|
| 2014 (£'000) |
Restated 2013 (£'000) |
|
| Profit on ordinary activities before taxation | 27,662 | 50,083 |
| Tax on profit on ordinary activities | (6,445) | (12,375) |
| Profit on ordinary activities after taxation | 21,217 | 37,708 |
| As at 31 March* | |
|---|---|
| 2014 (£'000) |
Restated 2013 (£'000) |
| 2,279 | |
| - | |
| 65,755 | 100,412 |
| 122,306 | 102,691 |
| (93,544) | (69,146) |
| 28,762 | 33,545 |
| 33,545 | |
| 1,410 55,141 28,762 |
| For the year ended 31 March |
||
|---|---|---|
| 2014 (£'000) |
Restated 2013 (£'000) |
|
| Net cash outflow from operating activities | - | (1) |
| Cash and cash equivalents at the beginning of the year | - | 1 |
| Cash and cash equivalents at the end of the year | - | - |
* The 31 March 2013 balances were restated in the 31 March 2014 financial statements as ICML prepared its financial statements in accordance with IFRS (previously United Kingdom Generally Accepted Accounting Practice (UK GAAP)) for the first time.
** Financial assets at fair value through profit or loss (FVTPL).
The financial summary set out below has been derived from the audited financial statements of IIL for the financial years ended 31 March 2014 and 31 March 2013 and should be read together with such audited financial statements. The audited financial statements of IIL for the financial years ended 31 March 2014 and 31 March 2013 are incorporated by reference into this Base Prospectus.
| For the year ended 31 March* | ||
|---|---|---|
| 2014 (£'000) |
Restated 2013 (£'000) |
|
| Profit for the financial year before members' remuneration and profit shares | - | 743 |
| Members' remuneration charged as an expense | - | (743) |
| Result for the financial year available for discretionary division among members |
- | - |
| As at 31 March* | ||
|---|---|---|
| Restated 2014 (£'000) |
Restated 2013 (£'000) |
|
| Current Assets | 77,379 | 77,379 |
| Net assets attributable to members | 77,379 | 77,379 |
| Total members' interests: Loans and debts due to members |
77,379 | 77,379 |
| For the year ended 31 March |
||
|---|---|---|
| 2014 (£'000) |
Restated 2013 (£'000) |
|
| Net cash outflow from operating activities | - | - |
| Cash and cash equivalents at the beginning of the year | - | - |
| Cash and cash equivalents at the end of the year | - | - |
* The 31 March 2013 balances were restated in the 31 March 2014 financial statements as IIL prepared its financial statements in accordance with IFRS (previously UK GAAP) for the first time.
This section contains a description of the information that is deemed to be incorporated by reference into this Base Prospectus.
This Base Prospectus should be read and construed in conjunction with:
each of which has been previously published (or is published simultaneously with this Base Prospectus) and reviewed by the UK Listing Authority or filed with it. Such documents shall be incorporated in, and form part of, this Base Prospectus, save that any statement contained in a document which is incorporated by reference herein shall be modified or superseded for the purpose of this Base 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, except as so modified or superseded, constitute a part of this Base Prospectus. Any documents themselves incorporated by reference in the documents incorporated by reference in this Base Prospectus shall not form part of this Base Prospectus. Information contained in the documents incorporated by reference into this Base Prospectus, which is not itself incorporated by reference, is either not relevant for investors or else is covered elsewhere in this Base Prospectus.
Copies of this Base Prospectus and all of the documents incorporated by reference in this Base Prospectus will be available for inspection upon request (free of charge) during normal business hours at the registered office of the Issuer and at the specified office of the Issuing and Paying Agent and copies of the documents referred to in paragraphs (i) to (iii) above can also be obtained from the Issuer's website at http://www.icgplc.com/shareholders/results-and-presentations.aspx. The other contents of the Issuer's website shall not form part of this Base Prospectus.
This section contains a description of the material provisions of the Dealer Agreement and certain selling restrictions applicable to making offers of the Notes under the Programme.
Subject to the terms and on the conditions contained in a dealer agreement dated 18 February 2015 (the "Dealer Agreement") between the Issuer, the Original Guarantors and Deutsche Bank AG, London Branch (as Dealer and Arranger), the Notes will be issued from time to time by the Issuer and subscribed for and/or distributed from time to time by one or more Dealers. However, the Issuer has reserved the right to sell Notes directly on its own behalf to Dealers who are appointed as Dealers in respect of specified Tranches only. The Notes may be resold at prevailing market prices, or at prices 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(s) a commission as agreed between them in respect of any Notes subscribed by it. The Issuer has agreed to reimburse the Arranger for its expenses incurred in connection with the establishment of the Programme and for certain other activities in connection with the Programme. The commissions in respect of an issue of Notes on a syndicated basis may be stated in the relevant Final Terms.
The Issuer has agreed to indemnify the Dealers against certain liabilities in connection with the offer and sale of any 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.
Notes may be offered by the Issuer or the Dealers to any investors, subject to the restrictions described below.
The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended, (the "Securities Act") and may not be offered or sold within the United States 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 meanings 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 United States or its possessions or to a United States person, except in certain transactions permitted by U.S. Treasury regulations. Terms used in this paragraph have the meanings given to them by the U.S. Internal Revenue Code of 1986 and Treasury regulations promulgated thereunder. The relevant Final Terms will identify whether TEFRA C rules or TEFRA D rules apply or whether TEFRA is not applicable.
The Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it will not offer, sell or deliver Notes (a) as part of their distribution at any time or (b) otherwise until 40 days after the completion of the distribution, as determined and certified by the relevant Dealer or, in the case of an issue of Notes on a syndicated basis, the relevant lead manager, of all Notes of the Tranche of which such Notes are a part, within the United States or to, or for the account or benefit of, U.S. persons. The Dealer has further agreed, and each further Dealer appointed under the Programme will be required to agree, that it will send to each dealer to which it sells any Notes during the distribution compliance period a confirmation or other notice setting forth the restrictions on offers and sales of the Notes within the United States or to, or for the account or benefit of, U.S. persons. Terms used in this paragraph have the meanings given to them by Regulation S under the Securities Act.
In addition, until 40 days after the commencement of the offering of any Series of Notes, an offer or sale of such Notes within the United States by any dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act.
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), the Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that, with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the "Relevant Implementation Date"), it has not made and will not make an offer of Notes which are the subject of the offering contemplated by this Base Prospectus as completed by the relevant Final Terms in relation thereto to the public in that Relevant Member State except that it may, with effect from and including the Relevant Implementation Date, make an offer of such Notes to the public in that Relevant Member State:
provided that no such offer of Notes referred to in (b) to (d) above shall require the Issuer or any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.
For the purposes of this provision, the expression an "offer of Notes to the public" in relation to any Notes in any Relevant Member State 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 for the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State; the expression "Prospectus Directive" means Directive 2003/71/EC (as amended, including by Directive 2010/73/EU).
The Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that:
Notes in circumstances in which section 21(1) of the FSMA would not apply to the Issuer or the Guarantors; and
(c) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Notes in, from or otherwise involving the United Kingdom.
The Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent, warrant and agree, that:
The Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent, warrant and agree, that this Base Prospectus has not been and will not be registered or filed as a prospectus with any governmental or other authority in the Isle of Man and this Base Prospectus and the issue of the Notes have not been approved by the Isle of Man Financial Supervision Commission. Any offer for subscription, sale or exchange of the Notes in or from the Isle of Man must be made:
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 benefit of, a resident of Japan pursuant to an exemption from the registration requirements of and otherwise in compliance with, the FIEA and any other applicable laws, regulations and ministerial guidelines of Japan.
The Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it has not circulated, and will not circulate, in Jersey any offer for subscription, sale or exchange of any Notes unless such offer is circulated in Jersey by a person or persons authorised to conduct investment business under the Financial Services (Jersey) Law 1998, as amended and (a) such offer does not for the purposes of Article 8 of the Control of Borrowing (Jersey) Order 1958, as amended, constitute an offer to the public, or (b) an identical offer is for the time being circulated in the United Kingdom without contravening the Financial Services and Markets Act 2000 and is, mutatis mutandis, circulated in Jersey only to persons similar to those to whom, and in a manner similar to that in which, it is for the time being circulated in the United Kingdom.
These selling restrictions may be modified by the agreement of the Issuer, the Guarantors and the Dealers following a change in a relevant law, regulation or directive.
No representation is made that any action has been taken in any jurisdiction that would permit a public offering of any of the Notes, or possession or distribution of this Base Prospectus or any other offering material or any Final Terms, in any country or jurisdiction where action for that purpose is required.
The Dealer has agreed, and each further Dealer appointed under the Programme will be required to agree, that it shall, to the best of its knowledge, comply with all relevant laws, regulations and directives in each jurisdiction in which it purchases, offers, sells or delivers Notes or has in its possession or distributes or publishes this Base Prospectus, any other offering material or any Final Terms therefor in all cases at its own expense.
If you are considering applying for Notes, it is important that you understand the taxation consequences of investing in the Notes. It is recommended that you read this section and discuss the taxation consequences with your tax adviser, financial adviser or other professional adviser before deciding whether to invest in the Notes.
The comments below are of a general nature based on current United Kingdom tax law as applied in England and Wales and HM Revenue & Customs practice (which may not be binding on HM Revenue & Customs) and are not intended to be exhaustive. They 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 may not apply to certain classes of persons such as dealers, certain professional investors, or persons connected with the Issuer. The comments are intended as a general guide and should be treated with appropriate caution, particularly since the precise provisions of the Final Terms could alter the tax treatment. This summary does not cover any issues or taxes not expressly covered; nor should it be considered legal or tax advice to any person. The summary does not take into account the effect of any overriding anti-avoidance legislation that may apply to Noteholders in their particular circumstances or to any wider arrangements to which they may be a party. Each potential purchaser is advised to consult its own tax adviser as to the United Kingdom tax consequences attributable to acquiring, holding and disposing of Notes and in particular it is recommended that any Noteholders who are in doubt as to their own tax position, or who may be subject to tax in a jurisdiction other than the United Kingdom, consult their professional advisers.
1.1 While the Notes continue to be listed on a recognised stock exchange within the meaning of Section 1005 Income Tax Act 2007, payments of interest by the Issuer may be made without withholding or deduction for or on account of United Kingdom income tax. The London Stock Exchange is a recognised stock exchange for these purposes. Notes will be treated as listed on the London Stock Exchange if they are included in the Official List by the United Kingdom Listing Authority and are admitted to trading on the London Stock Exchange.
If the Notes cease to be so listed and traded, interest will generally be paid by the Issuer under deduction of income tax at the basic rate (currently 20 per cent.) unless:
and HM Revenue & Customs has not given a direction that the interest should be paid under deduction of tax; or
permanent establishment in the United Kingdom, in connection with which the interest is received or to which the Notes are attributable, in which case (subject to exemptions for interest received by certain categories of agent) tax may be levied on the United Kingdom branch or agency, or permanent establishment.
If interest were paid under deduction of United Kingdom income tax (e.g. if the Notes lost their listing), Noteholders who are not resident in the United Kingdom may be able to recover all or part of the tax deducted if there is an appropriate provision in an applicable double taxation treaty.
Noteholders should note that the provisions relating to additional amounts referred to in "Terms and Conditions of the Notes — Taxation" below would not apply if HM Revenue & Customs sought to assess directly the person entitled to the relevant interest to United Kingdom tax. However exemption from, or reduction of, such United Kingdom tax liability might be available under an applicable double taxation treaty.
The references to "interest" above mean interest as understood in United Kingdom tax law and in particular any premium element of the redemption amount of the Notes redeemable at a premium may constitute a payment of interest subject to the withholding tax and reporting provisions discussed above and under "Information Reporting and EU Directive on the Taxation of Savings Income" below. In certain circumstances, the discount at which a Note is issued to its nominal amount could also constitute "interest" for these purposes.
The United Kingdom withholding tax treatment of payments by the Guarantors under the terms of the Guarantee in respect of interest on the Notes (or other amounts due under the Notes other than the repayment of amounts subscribed for the Notes) is uncertain. In particular, such payments by the Guarantors may not be eligible for the exemption in respect of Notes listed on a recognised stock exchange described above in relation to payments of interest by the Issuer. Accordingly, if a Guarantor makes any such payments, they may be subject to United Kingdom withholding tax at the basic rate.
The European Commission has published a proposal (the "Commission Proposal") for a Directive for a common FTT in Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia (the "participating Member States").
The Commission Proposal has a very broad scope and could, if introduced in its current form, apply to certain dealings in Notes (including secondary market transactions) in certain circumstances. The issuance and subscription of Notes should, however, be exempt. Under the Commission Proposal, the FTT could apply in certain circumstances to persons both within and outside of the participating Member States. Generally, it would apply to certain dealings in Notes where at least one party is a financial institution, and at least one party is established in a participating Member State. A financial institution may be, or be deemed to be, "established" in a participating Member State in a broad range of circumstances, including (a) by transacting with a person established in a participating Member State or (b) where the financial instrument which is subject to the dealings is issued in a participating Member State.
Should the FTT be introduced in that form, it would primarily be a tax levied on financial institutions (such as banks, credit institutions and pension funds) in the secondary market. However, such financial institutions may choose to transfer the FTT cost on to the holders of Notes, who may consequently suffer additional transaction costs.
Joint statements issued by participating Member States indicate an intention to implement the FTT by 1 January 2016.
However, the proposed FTT remains subject to negotiation between the participating Member States and the scope of such tax is uncertain. Additional EU Member States may decide to participate. Prospective holders of the Notes are advised to seek their own professional advice in relation to the FTT.
HM Revenue & Customs has powers to obtain information relating to securities in certain circumstances. This may include details of the beneficial owners of the Notes (or the persons for whom the Notes are held), details of the persons to whom payments derived from the Notes are or may be paid and information and documents in connection with transactions relating to the Notes. Information may be required to be provided by, amongst others, the holders of the Notes, persons by (or via) whom payments derived from the Notes are made or who receive (or would be entitled to receive) such payments, persons who effect or are a party to transactions relating to the Notes on behalf of others and certain registrars or administrators. In certain circumstances, such information may be exchanged with tax authorities in other countries.
Under EC Council Directive 2003/48/EC (the "Savings Directive") on the taxation of savings income each Member State of the European Union (an "EU Member State") is required to provide to the tax authorities of another EU Member State details of payments of interest or other similar income payments ("Savings Income") made by a person within its jurisdiction to or collected by such a person for an individual or to certain non-corporate entities, resident in that other EU Member State (interest payments on the Notes will for these purposes be Savings Income). However, for a transitional period, Austria is instead applying a withholding system in relation to such payments, deducting tax of 35 per cent. The transitional period is to terminate at the end of the first full fiscal year following agreement by certain non-EU countries to the exchange of information relating to such payments.
A number of non-EU countries and certain dependent or associated territories of certain EU Member States have adopted and implemented similar measures (either provision of information or transitional withholding) in relation to payments of Savings Income made by a person within its jurisdiction to an individual, or to certain non-corporate entities, resident in an EU Member State.
In addition, EU Member States have entered into reciprocal arrangements with certain of those non-EU countries and dependent or associated territories of certain EU Member States in relation to payments of Savings Income made by a person in an EU Member State to an individual, or to certain noncorporate entities, resident in certain dependent or associated territories or non-EU countries.
On 24 March 2014, the Council of the European Union adopted a Council Directive amending and broadening the scope of the requirements described above. EU Member States are required to apply these new requirements from 1 January 2017. The changes will expand the range of payments covered by the Savings Directive, in particular to include additional types of income payable on securities. The Savings Directive will also apply a "look through approach" to payments made via certain persons, entities or legal arrangements (including trusts and partnerships), where certain conditions are satisfied, where an individual resident in an EU Member State is regarded as the beneficial owner of the payment for the purposes of the Savings Directive. This approach may in some cases apply where the person, entity or arrangement is established or effectively managed outside of the European Union.
ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES CONTAINED HEREIN IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING U.S. FEDERAL TAX PENALTIES THAT MAY BE IMPOSED ON THE TAXPAYER; ANY SUCH DISCUSSION IS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE TRANSACTIONS DESCRIBED HEREIN; AND EACH TAXPAYER SHOULD SEEK ADVICE BASED ON THE TAXPAYER'S PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
FATCA may require a payor to withhold 30 per cent. of payments made on or after 1 July 2014 to certain non-U.S. entities, such as the Issuer and the Guarantors. However, as described in more detail below, the Issuer and the Guarantors may avoid the withholding tax by complying with the necessary requirements under FATCA, including, to the extent applicable, any UK laws enacted to implement the intergovernmental agreement between the United Kingdom and United States in respect of FATCA. If necessary, the Issuer and the Guarantors may, in the future, enter into an agreement ("FATCA Agreement") with the U.S. Internal Revenue Service ("IRS") pursuant to which the Issuer or a Guarantor will be obligated to report on its Noteholders and beneficial owners of interests in the Notes and to withhold on payments to Noteholders and beneficial owners that are not FATCA compliant. There is no assurance that the Issuer and the Guarantors will be able to comply with the foregoing requirements, including any requirements under UK law, and avoid the withholding tax. Further, noncompliance by certain affiliates may, in certain cases, prevent the Issuer and the Guarantors from being able to comply with FATCA.
A financial institution, broker, agent or other intermediary (collectively, "Intermediaries") through which a beneficial owner of Notes holds its interests may also enter into a FATCA Agreement or comply with any applicable local laws in furtherance of FATCA to avoid the FATCA withholding tax.
To comply with FATCA, the Issuer, the Guarantors or an Intermediary may be required, among other things, to withhold up to 30 per cent. of payments, including principal, to Noteholders or beneficial owners that are Recalcitrant Holders (as defined below) or that are Non-Participating FFIs (as defined below). A "Recalcitrant Holder" is an investor that either fails to comply with requests for information that will help the Issuer, the Guarantors or an Intermediary comply with its reporting requirements under FATCA or, if applicable, does not execute a waiver of law prohibiting the disclosure of such information to a taxing authority. A "Non-Participating FFI" is a "foreign financial institution" as defined under FATCA (i) that fails to enter into an agreement with the IRS to report and withhold on its own account holders, unless exempted, or (ii) if applicable, that does not comply with any requirements imposed by its own government in respect of FATCA. No additional amounts will be payable by the Issuer, Guarantors or an Intermediary in respect of any amounts withheld in connection with FATCA. Prospective purchasers should refer to "Terms and Conditions of the Notes – Condition 7".
Any withholding on the Notes, to the extent required, is not expected to begin prior to 1 January 2017. In addition, a grandfathering rule provides that certain non-U.S. source obligations issued on or before the date that is six months after the date on which final U.S. Treasury regulations addressing "foreign passthru payments" are published and that are not modified and treated as reissued, for U.S. federal income tax purposes, after such date will not be subject to withholding. Obligations that are treated as equity and certain other obligations lacking a definitive term (such as saving and demand deposits), however, are not eligible for grandfathering. Assuming that the Notes are treated, for U.S. federal income tax purposes, as non-U.S. source debt obligations, Notes that are issued on or before the grandfathering date should qualify for the grandfathering exemption. However, there can be no assurance that any Notes, including any Notes subject to a modification or waiver of any conditions or terms relating to such Notes, will qualify for such treatment.
It is also possible that an Intermediary may be required to redeem early or cause the disposition or transfer of a Note held by a Noteholder or beneficial owner that does not comply with the requirements under FATCA and the proceeds from any such redemption, disposition or transfer may be an amount less than the then current fair market value of the Notes. No additional amounts will be paid to compensate a Noteholder or beneficial owner for any such losses.
As noted above, a financial institution may not be required to enter into its own FATCA Agreement with the IRS if it is a resident of a jurisdiction that enters into an intergovernmental agreement (an "IGA") with the United States in furtherance of FATCA. The United Kingdom entered into such an IGA with the United States on 12 September 2012. UK legislation implementing this IGA was made on 6 August 2013, and has come into force on 1 September 2013. Under the UK-US IGA, a UK financial institution will not be required to enter an agreement with the IRS, but would instead be required to register with the IRS to obtain a Global Intermediary Identification Number and comply with UK legislation that is expected to be implemented to give effect to the IGA. UK legislation will require a UK financial institution to report account information directly to the UK taxing authorities, which will forward such information to the IRS. In addition, withholding will not be imposed on payments made to a UK financial institution unless the IRS has specifically listed the UK financial institution as non-participating. Finally, a UK financial institution will not be required to withhold on payments it makes (except, in certain cases, payments to other financial institutions) unless the UK financial institution has otherwise assumed responsibility for withholding under US tax law.
FATCA is particularly complex and the full extent of its application to the Issuer, Guarantors, Intermediaries and Notes is currently uncertain. The Issuer's (or, if applicable, the Guarantor's) ability to avoid the withholding taxes under FATCA may not be within its control and may, in some cases, depend on the actions of an Intermediary, other withholding agents in the chain of custody, or the investors or their beneficial owners. There can be no assurance that payments on a Note will not be subject to withholding under FATCA. It is recommended that investors consult their own tax advisors about how FATCA may affect an investment in the Notes.
This section contains a summary of certain information relating to the clearing systems and settlement of securities in CREST.
The information set out below is subject to any change in or reinterpretation of the rules, regulations and procedures of Euroclear, Clearstream, Luxembourg and/or CREST currently in effect. Investors wishing to use the facilities of any of the clearing systems are advised to confirm the continued applicability of the rules, regulations and procedures of the relevant clearing system. Neither the Issuer, nor the Guarantors, nor the Issuing and Paying Agent, nor the Trustee nor any other party to the Agency Agreement will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the Notes held through the facilities of any clearing system or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
The Issuer may make applications to Euroclear and/or Clearstream, Luxembourg for acceptance in their respective book-entry systems in respect of any Series of Notes. Global Notes will be deposited with a common depositary or common safekeeper, as the case may be, for Euroclear and/or Clearstream, Luxembourg or an alternative clearing system as agreed between the Issuer and the relevant Dealer(s). Transfers of interests in such Global Notes will be made in accordance with the normal operating procedures of Euroclear and Clearstream, Luxembourg or, if appropriate, the alternative clearing system. Each Global Note deposited with a common depositary or common safekeeper, as the case may be, on behalf of Euroclear and Clearstream, Luxembourg will have an ISIN and a Common Code.
Euroclear and Clearstream, Luxembourg each holds securities for its customers and facilitates the clearance and settlement of securities transactions by electronic book-entry transfer between their respective account holders. Euroclear and Clearstream, Luxembourg provide various services including safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Euroclear and Clearstream, Luxembourg also deal with domestic securities markets in several countries through established depository and custodial relationships. Euroclear and Clearstream, Luxembourg have established an electronic bridge between their two systems across which their respective participants may settle trades with each other.
Euroclear and Clearstream, Luxembourg customers are world-wide financial institutions, including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations. Indirect access to Euroclear and Clearstream, Luxembourg is available to other institutions that clear through or maintain a custodial relationship with an account holder of either system.
If so specified in the applicable Final Terms, following the delivery of an issue of Notes into Euroclear and/or Clearstream, Luxembourg (the "Relevant Clearing Systems" and each a "Relevant Clearing System"), investors may also hold interests in the Notes through Euroclear UK & Ireland Limited (formerly known as CREST Co Limited) ("CREST") through the issuance of dematerialised depository interests ("CREST Depository Interests" or "CDIs") issued, held, settled and transferred through CREST, representing interests in the relevant Notes underlying the CDIs (the "Underlying Notes"). CREST Depository Interests are independent securities distinct from the Notes, constituted under, and governed by, English law and transferred through CREST and will be issued by CREST Depository Limited (the "CREST Depository") pursuant to the global deed poll dated 25th June, 2001 (as subsequently modified, supplemented and/or restated) (the "CREST Deed Poll").
The CDIs will represent indirect interests in the interest of CREST International Nominees Limited (the "CREST Nominee") in the Underlying Notes. Pursuant to the CREST Manual (as defined below), Notes held in global form by the common depositary or common safekeeper may be settled through CREST, and the CREST Depository will issue CDIs. The CDIs will be independent securities distinct from the Notes, constituted under English law, and may be held and transferred through CREST.
Interests in the Underlying Notes will be credited to the CREST Nominee's account with a Relevant Clearing System and the CREST Nominee will hold such interests as nominee for the CREST Depository which will issue CDIs to the relevant CREST participants.
Each CDI will be treated by the CREST Depository as if it were one Underlying Note, for the purposes of determining all rights and obligations and all amounts payable in respect thereof. The CREST Depository will pass on to holders of CDIs ("CDI Holders") any interest or other amounts received by it as holder of the Underlying Notes on trust for such CDI Holders. CDI Holders will also be able to receive from the CREST Depository notices of meetings of holders of Underlying Notes and other relevant notices issued by the Issuer.
Transfers of interests in Underlying Notes by a CREST participant to a participant of a Relevant Clearing System will be effected by cancellation of the corresponding CDIs and transfer of an interest in such Underlying Notes to the account of the relevant participant with the Relevant Clearing System.
The CDIs will have the same ISIN as the ISIN of the Underlying Notes and will not require a separate listing on the Official List maintained by the UK Listing Authority.
Prospective subscribers for Notes represented by CDIs are referred to Section 3 (CREST International Manual) of the CREST manual issued by Euroclear UK & Ireland (including the CREST International Manual dated 14 April 2008) as amended, modified, varied or supplemented from time to time (the "CREST Manual"), which contains the form of the CREST Deed Poll to be entered into by the CREST Depository. The rights of the CDI Holders will be governed by the arrangements between CREST, the Relevant Clearing Systems and the Issuer including the CREST Deed Poll (in the form contained in Section 3 of the CREST Manual) executed by the CREST Depository. These rights may be different from those of holders of Notes which are not represented by CDIs.
If issued, CDIs will be delivered, held and settled in CREST, by means of the CREST International Settlement Links Service (the "CREST International Settlement Links Service"). The settlement of the CDIs by means of the CREST International Settlement Links Service has the following consequences for CDI Holders:
undertakings to be given by CDI Holders and limitations on the liability of the CREST Depository as issuer of the CDIs.
The following section contains important information regarding the basis on which this Base Prospectus may be used for the purpose of making public offers of Notes.
If, in the context of a Public Offer (as defined below), you are offered Notes by any entity, you should check that such entity is authorised to use this Base Prospectus for the purposes of making such offer before agreeing to purchase any Notes. To be authorised to use this Base Prospectus in connection with a Public Offer (referred to below as an "Authorised Offeror"), an entity must either be:
Valid offers of Notes may only be made by an Authorised Offeror in the context of a Public Offer if the offer is made in the United Kingdom and within the time period referred to in the Final Terms as the "Offer Period". Other than as set out above, none of the Issuer, the Guarantors and any Dealer has authorised the making of any Public Offer by any person in any circumstances and such person is not permitted to use this Base Prospectus in connection with any offer of Notes.
Please see below for certain important legal information relating to Public Offers.
Notes with a denomination of less than €100,000 (or its equivalent in any other currency) may be offered in circumstances where there is no exemption from the obligation under Article 3.2 of Directive 2003/71/EC (as amended, including by Directive 2010/73/EU) (the "Prospectus Directive") to publish a prospectus. Any such offer is referred to herein as a "Public Offer". In relation to Notes issued under the Programme which are to be offered as part of a Public Offer, the Issuer and the Guarantors may provide their consent to the use of the Base Prospectus for subsequent resale or final placement of the Notes by financial intermediaries, provided that such subsequent resale or final placement of Notes is made in compliance with any conditions attached to that consent. Any person making or intending to make a Public Offer of Notes on the basis of this Base Prospectus as completed by the relevant Final Terms must do so only with the consent of the Issuer and the Guarantors as provided under "Consent given in accordance with Article 3.2 of the Prospectus Directive" below and provided such person complies with the conditions attached to that consent.
At any time during the period of 12 months following the date of this Base Prospectus, the Issuer and the Guarantors may request that the Financial Conduct Authority (the "FCA") notifies the competent authority of any other Member State of the European Economic Area which has implemented the Prospectus Directive that this Base Prospectus has been drawn up in accordance with the Prospectus Directive pursuant to the procedures set out in Articles 17 and 18 thereof (each such Member State, a "Host Member State"). Upon any such request, the Issuer and the Guarantors shall prepare and publish a supplement to this Base Prospectus identifying any Host Member States so notified, and references herein to the Public Offer Jurisdiction(s) shall thereupon include any such Host Member States.
The Issuer accepts responsibility for the contents of this Base Prospectus and the relevant Final Terms, and each Guarantor accepts responsibility for the information in relation to itself set out in this Base Prospectus in Section 1 (Summary), Section 2 (Risk Factors) in relation to the risks relating to the Group and its business; Section 7 (Description of the Original Guarantors); Section 8 (Selected Financial Information of the Original Guarantors); Section 9 (Information Incorporated by Reference); Section 16 (Additional Information); and in relation to the Guarantee set out in Appendix B (Terms and Conditions of the Notes).
The Issuer and the Guarantors consent to the use of this Base Prospectus and the relevant Final Terms (and accept responsibility for the information contained in this Base Prospectus and the relevant Final Terms on the basis described above) with respect to any subsequent resale or final placement of the Notes which satisfies the conditions set out below.
The conditions attached to the consent are that:
"We, [insert legal name of financial intermediary], refer to the offer of [insert details of the relevant Notes] (the "Notes") described in the Final Terms dated [insert date] (the "Final Terms") published by Intermediate Capital Group plc (the "Issuer"). In consideration of the Issuer and the Guarantors named in the Base Prospectus (as defined in the Final Terms) offering to grant their consent to our use of the Base Prospectus in connection with the offer of the Notes in [specify Member State(s), as identified in the relevant Final Terms] during the Offer Period specified in the Final Terms and subject to the other conditions to such consent, each as specified in the Base Prospectus, we hereby accept such offer by the Issuer and the Guarantors in accordance with the Authorised Offeror Terms (as specified in the Base Prospectus) and confirm that we are using the Base Prospectus in connection with the offer of the Notes accordingly."
The "Authorised Offeror Terms", being the terms to which the relevant financial intermediary agrees in connection with the use of this Base Prospectus, are that the relevant financial intermediary:
appropriateness or suitability of any investment in the Notes by any person and disclosure to any potential investor;
Issuer, that such financial intermediary is solely responsible for such communication and that the Issuer, the Guarantors and the relevant Dealer do not accept any responsibility for such communication and (C) does not, without the prior written consent of the Issuer or the relevant Dealer (as applicable), use the legal or publicity names of the Issuer, the Guarantors or the relevant Dealer or any other name, brand or logo registered by an entity within their respective groups or any material over which any such entity retains a proprietary interest, except to describe the Issuer as issuer of the relevant Notes and the guarantors as Guarantors of the relevant Notes in each case on the basis set out in this Base Prospectus;
(16) either (i) obtain from each potential investor an executed application for the Notes, or (ii) keep a record of all requests such financial intermediary (x) makes for its discretionary management clients, (y) receives from its advisory clients and (z) receives from its execution-only clients, in each case prior to making any order for the Notes on their behalf, and in each case maintain the same on its files for so long as is required by any applicable Rules;
(B) agrees and undertakes to indemnify each of the Issuer, the Guarantors and the relevant Dealer (in each case on behalf of such entity and its respective directors, officers, employees, agents, affiliates and controlling persons) against any losses, liabilities, costs, claims, charges, expenses, actions or demands (including reasonable costs of investigation and any defence raised thereto and counsel's fees and disbursements associated with any such investigation or defence) which any of them may incur or which may be made against any of them arising out of or in relation to, or in connection with, any breach of any of the foregoing agreements, representations, warranties or undertakings by such financial intermediary, including (without limitation) any unauthorised action by such financial intermediary or failure by such financial intermediary to observe any of the above restrictions or requirements or the making by such financial intermediary of any unauthorised representation or the giving or use by it of any information which has not been authorised for such purposes by the Issuer, the Guarantors or the relevant Dealer; and
The relevant Final Terms may specify other conditions to which the consent is subject.
Any Authorised Offeror falling within paragraph (iv)(c) above who wishes to use this Base Prospectus in connection with a Public Offer as set out above is required, for the duration of the relevant Offer Period, to publish on its website that it is using this Base Prospectus for such Public Offer in accordance with the consent of the Issuer and the Guarantors and the conditions attached thereto (in the form of the Acceptance Statement).
Except in the circumstances described above, neither the Issuer, nor the Guarantors nor any Dealer has authorised the making of any Public Offer by any person and neither the Issuer nor any Guarantor has consented to the use of this Base Prospectus or any Final Terms by any other person in connection with any Public Offer of Notes in any jurisdiction. Any Public Offer made without the consent of the Issuer and the Guarantors is unauthorised and neither the Issuer, nor the Guarantors nor any Dealer accepts any responsibility or liability in relation to such offer.
If, in the context of a Public Offer, an investor is offered Notes by a person who is not an Authorised Offeror, the investor should check with such person whether anyone is responsible for this Base Prospectus for the purposes of section 90 of the FSMA in the context of such Public Offer and, if so, who that person is. If an investor is in any doubt about whether it can rely on this Base Prospectus and/or who is responsible for its contents, the investor should take legal advice.
An investor intending to acquire or acquiring any Notes in a Public Offer from an Authorised Offeror will do so, and offers and sales of such Notes to an investor by such Authorised Offeror will be made, in accordance with any terms and other arrangements in place between such Authorised Offeror and such investor including as to price, allocations and settlement arrangements (the "Terms and Conditions of the Public Offer"). Neither the Issuer nor any Guarantor will be a party to any such arrangements in connection with the offer or sale of any Notes and, accordingly, this Base Prospectus does not contain such information.
Neither the Issuer, nor the Guarantors, nor the Arranger nor any Dealer nor other Authorised Offeror has any responsibility or liability for any information regarding the Terms and Conditions of the Public Offer provided to an investor by any Authorised Offeror or for any of the actions of any other Authorised Offeror at any time, including compliance by an Authorised Offeror with applicable conduct of business rules or other local regulatory requirements or other securities law requirements in relation to such offer or sale.
Notes to be offered pursuant to a Public Offer will be issued by the Issuer at the Issue Price specified in the relevant Final Terms. The Issue Price will be determined by the Issuer in consultation with the relevant Dealer(s) at the time of the relevant Public Offer and will depend, amongst other things, on prevailing market conditions at that time. The offer price at which the Authorised Offeror will offer such Notes to the investor will be the Issue Price or such other price as may be agreed between an investor and the Authorised Offeror making the offer of the Notes to such investor. Neither the Issuer nor any Guarantor will be party to arrangements between an investor and an Authorised Offeror, and the investor will need to look to the relevant Authorised Offeror to confirm the price at which such Authorised Offeror is offering the Notes to such investor.
The following section describes the manner in which the Issuer intends to use the proceeds from issues of Notes under the Programme.
The net proceeds from the issue of each Tranche of Notes will be applied by the Issuer for its general corporate purposes, which may include investing alongside the Group's diverse strategies as well as funding a return of capital to the Issuer's shareholders. If, in respect of any particular Tranche, there is a particular identified use of proceeds, this will, to the extent required, be stated in the applicable Final Terms.
This section contains the forms of Final Terms that the Issuer will complete when offering any Notes under the Programme. There is a form of Final Terms for Notes issued with a denomination of less than €100,000 (or its equivalent in any other currency) and a separate form of Final Terms for Notes issued with a denomination of €100,000 (or its equivalent in any other currency) or more.
Set out below is the form of Final Terms which will be completed for each Tranche of Notes issued under the Programme which have a minimum denomination of less than €100,000 (or its equivalent in another currency).
Terms used herein shall be deemed to be defined as such for the purposes of the Conditions (the "Conditions") set forth in the Base Prospectus dated [date] [as supplemented by the supplement[s] to it dated [date] [and [date]]] which [together] constitute[s] a base prospectus (the "Base Prospectus") for the purposes of Article 5.4 of Directive 2003/71/EC (as amended, including by Directive 2010/73/EU) (the "Prospectus Directive"). This document constitutes the Final Terms of the Notes described herein for the purposes of Article 5.4 of the Prospectus Directive and must be read in conjunction with the Base Prospectus. Full information on the Issuer, the Guarantors and the offer of the Notes is only available on the basis of the combination of these Final Terms and the Base Prospectus. A summary of the Notes (which comprises the "Summary" in the Base Prospectus as amended to reflect the provisions of these Final Terms) is annexed to these Final Terms. The Base Prospectus has been published on the website of [the Issuer at www.icgplc.com] [and] [the Regulatory News Service operated by the London Stock Exchange at www.londonstockexchange.com/exchange/news/market-news/market-newshome.html] and is available for inspection upon request (free of charge) during normal business hours at the registered office of the Issuer at Juxon House, 100 St Paul's Churchyard, London EC4M 8BU and at the specified office of the Issuing and Paying Agent.
| (i) Series Number: 1. |
[ | ] |
|---|---|---|
| ----------------------------- | --- | --- |
(iii) Date on which the Notes will be consolidated and form a single Series: [The Notes will be consolidated and form a single Series with [original notes] on [the Issue Date/exchange of the temporary Global Note for interests in the permanent Global Note, as
Specified Currency or Currencies: [ ]
Applicable]
(ii) Tranche: [ ]
(ii) Calculation Amount: [ ]
Issue Price: [ ] per cent. of the Aggregate Principal Amount [plus accrued interest from [ ]]
referred to in paragraph 22 below, which is expected to occur on or about [date]]] [Not
| 6. | (i) | Issue Date: | [ | ] |
|---|---|---|---|---|
| (ii) | Interest Commencement Date: | [[ | ]/Issue Date/Not Applicable] | |
| 7. | Maturity Date: | [[ to [ |
]/Interest Payment Date falling in or nearest ]] |
|
| 8. | Interest Basis: | [[ [[ |
] per cent. Fixed Rate] ] +/- [ ] per cent. Floating Rate] [Zero Coupon] |
|
| (further particulars specified in paragraph [13] [14] [15] below) |
||||
| 9. | Redemption Basis: | Subject to any purchase and cancellation or early redemption, the Notes will be redeemed on the Maturity Date at [ ] per cent. of their principal amount. |
||
| 10. | Change of Interest Basis: | [[ | ]/Not Applicable] | |
| 11. | Put/Call options: | [Issuer Call Option] [Investor Put Option] [Change of Control Put Option] |
||
| [(further particulars specified in paragraph [17] [18] [19] below)] |
||||
| [Not Applicable] | ||||
| 12. | Date of Board [and Committee] approval | [ | ] [and [ ], respectively] |
for issuance of Notes obtained:
| 13. | Fixed Rate Note Provisions: | [Applicable/Not Applicable] | |
|---|---|---|---|
| (i) | Rate(s) of Interest: | [ ] per cent. per annum payable in arrear on each Interest Payment Date |
|
| (ii) | Interest Payment Date(s): | [ ] [and [ ]] in each year up to and including the Maturity Date |
|
| (iii) | Fixed Coupon Amount(s): | [ ] per Calculation Amount |
|
| (iv) | Broken Amount(s): | [[ ] per Calculation Amount, payable on the Interest Payment Date falling [in/on] [ ]/Not Applicable] |
|
| (v) | Day Count Fraction: | [30/360] [Actual/Actual-ICMA] | |
| (vi) | Determination Date(s): | [[ ] in each year] [Not Applicable] |
|
| 14. | Floating Rate Note Provisions: | [Applicable/Not Applicable] | |
| (i) | Interest Period(s): | [ ] |
|
| (ii) | Specified Interest Payment Dates: | [[ ] [and [ ]] in each year, subject to adjustment in accordance with the Business Day Convention set out in (v) below] |
|
| (iii) | First Interest Payment Date: | [ ] |
| (iv) | Interest Period Date: | [ | ] [Not Applicable] | |||
|---|---|---|---|---|---|---|
| (v) | Business Day Convention: | [Floating Convention/Following |
Rate | Business Day Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention] |
||
| (vi) | Additional Business Centre(s): | [ | ] [Not Applicable] | |||
| (vii) | Manner in which the Rate(s) of Interest is/are to be determined: |
[Screen Determination] |
Rate | Determination/ISDA | ||
| (viii) | Party responsible for calculating the Rate(s) of Interest and/or Interest Amount(s) (if not the Issuing and Paying Agent): |
[ | ] [Not Applicable] | |||
| (ix) | Screen Rate Determination: | |||||
| Reference Rate: | [ | ] month [LIBOR/EURIBOR] | ||||
| Interest Determination Date(s): | [ | ] | ||||
| Relevant Screen Page: | [ | ] | ||||
| (x) | ISDA Determination: | |||||
| Floating Rate Option: | [ | ] | ||||
| Designated Maturity: | [ | ] | ||||
| Reset Date: | [ | ] | ||||
| ISDA Definitions: | [2006 ISDA Definitions] [ | ] | ||||
| (xi) | Margin(s): | [+/-] [ | ] per cent. per annum | |||
| (xii) | Minimum Rate of Interest: | [[ | ] per cent. per annum/Not Applicable] | |||
| (xiii) | Maximum Rate of Interest: | [[ | ] per cent. per annum/Not Applicable] | |||
| (xiv) | Day Count Fraction: | [Actual/365 (Fixed)] [Actual/365 (Sterling)] [Actual/360] [30E/360 (ISDA)] |
[30/360] [360/360] [Bond Basis] [30E/360] [Eurobond Basis] |
[Actual/Actual] [Actual/Actual - ISDA] | ||
| 15. | Zero Coupon Note Provisions: | [Applicable/Not Applicable] | ||||
| (i) | Amortisation Yield: | [ | ] per cent. per annum | |||
| (ii) | Day Count Fraction in relation to Early Redemption Amounts: |
[Actual/365 (Fixed)] [Actual/365 (Sterling)] [Actual/360] [30E/360 (ISDA)] |
[30/360] [360/360] [Bond Basis] [30E/360] [Eurobond Basis] |
[Actual/Actual] [Actual/Actual - ISDA] |
| 16. | Notice Periods for Condition 5(c): | Minimum Period: [30] [ ] days |
|
|---|---|---|---|
| Maximum Period: [60] [ ] days |
|||
| 17. | Call Option (Condition 5(d)): | [Applicable/Not Applicable] | |
| (i) | Optional Redemption Date(s): | [ ]/[Any date from and including [ ] to but excluding [ ]] |
|
| (ii) | Optional Redemption Amount(s): | [[ ] per Calculation Amount/Make-whole Amount] |
|
| (a) Condition 5(b) applies: |
[Applicable/Not Applicable] | ||
| (b) Make-whole Amount: |
[Applicable/Not Applicable] | ||
| Quotation Time: | [ ] |
||
| Determination Date: | [ ] |
||
| Reference Bond: | [ ] [or if such stock is no longer in issue, such other [ ] stock with a maturity date as near as possible to the Maturity Date, as the Financial Adviser may recommend] |
||
| Redemption Margin: | [[ ] per cent.] [None] |
||
| (iii) | If redeemable in part: | [Applicable/Not Applicable] | |
| (a) Minimum Redemption Amount: |
[ ] per Calculation Amount |
||
| (b) Maximum Redemption Amount: |
[ ] per Calculation Amount |
||
| (iv) | Notice periods for Condition 5(d): | Minimum Period: [15] [ ] days |
|
| Maximum Period: [30] [ ] days |
|||
| 18. | Put Option (Condition 5(e)): | [Applicable/Not Applicable] | |
| (i) | Optional Redemption Date(s): | [ ] |
|
| (ii) | Optional Redemption Amount(s): | [ ] per Calculation Amount |
|
| Condition 5(b) applies: | [Applicable/Not Applicable] | ||
| (iii) | Notice periods for Condition 5(e): | Minimum Period: [15] [ ] days |
|
| Maximum Period: [30] [ ] days |
|||
| 19. | 5(f)): | Change of Control Put Option (Condition | [Applicable/Not Applicable] |
| Change of Control Redemption Amount: | [ ] per Calculation Amount |
||
| 20. | Final Redemption Amount: | [ ] per Calculation Amount |
|
| 21. | Early Redemption Amount payable on redemption for taxation reasons or on event |
[ ] per Calculation Amount |
of default:
| 22. | (a) | Form of Notes: | [Temporary Global Note exchangeable for a permanent Global Note which is exchangeable for Definitive Notes only in the limited circumstances specified in the permanent Global Note] |
|---|---|---|---|
| [Temporary Global Note exchangeable for Definitive Notes on and after the Exchange Date] |
|||
| [Permanent Global Note exchangeable for Definitive Notes only in the limited circumstances specified in the permanent Global Note] |
|||
| (b) | New Global Note: | [Yes] [No] | |
| 23. | Financial Centre(s): | [Not Applicable/[ ]] |
|
| 24. | Talons for future Coupons to be attached to Definitive Notes: |
[Yes, as the Notes have more than 27 coupon payments, Talons may be required if, on exchange into definitive form, more than 27 coupon payments are still to be made./No] |
|
| Signed on behalf of Intermediate Capital Group plc: |
By: ..............................................
Duly authorised
Signed on behalf of [GUARANTORS]:
By: ..............................................
Duly authorised
Application [has been/is expected to be] made by the Issuer (or on its behalf) for the Notes to be listed on the Official List of the UK Listing Authority and admitted to trading on the [order book for retail bonds (ORB) segment of the] [regulated market of the London Stock Exchange] with effect from [ ].
[The Notes to be issued [have been/are expected to be] assigned the following ratings]/[The following ratings reflect ratings assigned to Notes of this type issued under the Programme generally]]:
[Standard & Poor's Credit Market Services Europe Limited: [ ]] [Fitch Ratings Limited: [ ]]
[As defined by [Standard & Poor's Credit Market Services Europe Limited/Fitch Ratings Limited], a rating of [ ] means [ ].]
[The Notes have not been specifically rated.]
[[Save for [ ], so] [So] far as the Issuer is aware, no person involved in the issue and offer of the Notes has an interest material to the issue/offer, including conflicting interests. / So far as the Issuer is aware, the following persons have an interest material to the issue/offer: [ ]. The [Managers] and their affiliates have engaged, and may in the future engage, in investment banking and/or commercial banking transactions with, and may perform other services for, the Issuer and the Guarantors and their affiliates in the ordinary course of business.]
| (i) | Reasons for the offer: | [ | ] | |
|---|---|---|---|---|
| (ii) | Use of proceeds: | [ | ] | |
| (iii) | Estimated net proceeds: | [ | ] | |
| (iv) | Estimated total expenses: | [ | ] |
Indication of yield: Calculated as [ ] per cent. per annum on the Issue Date. Yield is not an indication of future price.]]
[Not Applicable]
Details of historic [LIBOR/EURIBOR] rates can be obtained from [http://www.bbalibor.com/rates/historical/ / http://www.euribor-ebf.euleuribor-orgleuriborrates.html / [ ]] [Not Applicable]
| (i) ISIN: [ ] |
|
|---|---|
| ------------------------ | -- |
the Notes.]
(iv) Delivery: Delivery [against/free of] payment
(v) Names and addresses of additional Paying Agent(s) (if any): [Not Applicable/[ ]]
[[ ] per cent. of the Aggregate Principal Amount]/[ ]]
[TEFRA C Rules/TEFRA D Rules/TEFRA not applicable]
(a) Public Offer: [Not Applicable] [An offer of the Notes may be made by the Manager[s] [the other Initial Authorised Offerors identified in paragraph 9(xii) below] [and any other Authorised Offerors granted consent in accordance with paragraph 9(xii) below] [and any other financial intermediary for the time being complying with (x) the Authorised Offeror Terms [and] (y) the other conditions attaching to the consent set out in the Base Prospectus [and (z) [ ]]] other than pursuant to Article 3.2 of the Prospectus Directive in the United Kingdom (the "Public Offer Jurisdiction[s]") during the period from [ ] [a.m./p.m.] until [ ] [a.m./p.m.] on [ ] (the "Offer Period"). See further paragraph 9(xii) below.]
| (i) | Offer Price: | [Issue Price/Not Applicable/[ | ]] |
|---|---|---|---|
| (ii) | Conditions to which the offer is subject: |
[Not Applicable/[ ]] |
|
| (iii) | Description of the application process: |
[Not Applicable/[ ]] |
|
| (iv) | Description of possibility to reduce subscriptions and manner for refunding excess amount paid by applicants: |
[Not Applicable/[ ]] |
|
| (v) | Details of the minimum and/or maximum amount of application: |
[Not Applicable/[ ]] |
|
| (vi) | Details of the method and time limits for paying up and delivering the Notes: |
[Not Applicable/[ ]] |
|
| (vii) | Manner in and date on which results of the offer are to be made public: |
[Not Applicable/[ ]] |
|
| (viii) | Procedure for exercise of any right of pre-emption, negotiability of subscription rights and treatment of subscription rights not exercised: |
[Not Applicable/[ ]] |
|
| (ix) | Categories of potential investors to which the Notes are offered and whether tranche(s) have been reserved for certain countries: |
[Not Applicable/[ ]] |
|
| (x) | Process for notification to applicants of the amount allotted and the indication whether dealing may begin before notification is |
[Not Applicable/[ ]] |
(xi) Amount of any expenses and taxes specifically charged to the subscriber or purchaser:
made:
(xii) Name(s) and address(es), to the extent known to the Issuer and the Guarantors, of the placers in the various countries where the offer takes place:
[None] [The Initial Authorised Offerors identified below [and any additional financial intermediaries who have or obtain the consent of the Issuer and the Guarantors to use the Base Prospectus in connection with the Public Offer and who are identified [on the Issuer's website (www.icgplc.com/investments)] [by the Issuer by way of RNS announcement during the Offer Period] as being Authorised Offerors (together, the "Authorised Offerors").]
[Not Applicable/[ ]]
[As of the date of these Final Terms, the following financial intermediaries are, together with the Manager[s], the "Initial Authorised
[ ]]
[The Issuer and the Guarantors have granted consent to the use of the Base Prospectus and these Final Terms by the persons listed above and other relevant stockbrokers and financial intermediaries in the United Kingdom during the Offer Period on the basis of and so long as, in either case, they comply with (x) the Authorised Offeror Terms [and] (y) the other conditions attaching to the consent set out in the Base Prospectus [and the other conditions set out under paragraph 8(vii) above].]]
(xiii) Name(s) and address(es) of the entities which have a firm commitment to act as intermediaries in secondary trading, providing liquidity through bid and offer rates and description of the [[ ] will be appointed as registered market maker[s] [through the London Stock Exchange's order book for retail bonds (ORB) when the Notes are issued].]
main terms of its/their commitment:
[ ] has been extracted from [ ]. The Issuer and Guarantors confirm that such information has been accurately reproduced and that, so far as each 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.] [Not Applicable]
[Base Prospectus "Summary" to be inserted and the options given as placeholders in the "Summary" to be completed in respect of the Notes being issued]
Set out below is the form of Final Terms which will be completed for each Tranche of Notes issued under the Programme which have a minimum denomination of at least €100,000 (or its equivalent in another currency).
Terms used herein shall be deemed to be defined as such for the purposes of the Conditions (the "Conditions") set forth in the Base Prospectus dated [date] [as supplemented by the supplement[s] to it dated [date] [and [date]]] which [together] constitute[s] a base prospectus (the "Base Prospectus") for the purposes of Article 5.4 of Directive 2003/71/EC (as amended, including by Directive 2010/73/EU) (the "Prospectus Directive"). This document constitutes the Final Terms of the Notes described herein for the purposes of Article 5.4 of the Prospectus Directive and must be read in conjunction with the Base Prospectus. Full information on the Issuer, the Guarantors and the offer of the Notes is only available on the basis of the combination of these Final Terms and the Base Prospectus. A summary of the Notes (which comprises the "Summary" in the Base Prospectus as amended to reflect the provisions of these Final Terms) is annexed to these Final Terms. The Base Prospectus has been published on the website of [the Issuer at www.icgplc.com] [and] [the Regulatory News Service operated by the London Stock Exchange at www.londonstockexchange.com/exchange/news/market-news/market-newshome.html] and is available for inspection upon request (free of charge) during normal business hours at the registered office of the Issuer at Juxon House, 100 St Paul's Churchyard, London EC4M 8BU and at the specified office of the Issuing and Paying Agent.
| 1. | (i) | Series Number: | [ | ] |
|---|---|---|---|---|
| (ii) | Tranche Number: | [ | ] |
(iii) Date on which the Notes will be consolidated and form a single Series:
[The Notes will be consolidated and form a single Series with [original notes] on [the Issue Date/exchange of the temporary Global Note for interests in the permanent Global Note, as referred to in paragraph 22 below, which is expected to occur on or about [date]]] [Not Applicable]
(ii) Calculation Amount: [ ]
Issue Price: [ ] per cent. of the Aggregate Principal Amount [plus accrued interest from [ ]]
(i) Specified Denomination(s): [ ] [[€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].]
107
| 6. | (i) | Issue Date: | [ | ] |
|---|---|---|---|---|
| (ii) | Interest Commencement Date: | [[ | ]/Issue Date/Not Applicable] | |
| 7. | Maturity Date: | [[ to [ |
]/Interest Payment Date falling in or nearest ]] |
|
| 8. | Interest Basis: | [[ [[ |
] per cent. Fixed Rate] ] +/- [ ] per cent. Floating Rate] [Zero Coupon] |
|
| (further particulars specified in paragraph [13] [14] [15] below) |
||||
| 9. | Redemption Basis: | Subject to any purchase and cancellation or early redemption, the Notes will be redeemed on the Maturity Date at [ ] per cent. of their principal amount. |
||
| 10. | Change of Interest Basis: | [[ | ]/Not Applicable] | |
| 11. | Put/Call options: | [Issuer Call Option] [Investor Put Option] [Change of Control Put Option] |
||
| [(further particulars specified in paragraph [17] [18] [19] below)] |
||||
| [Not Applicable] | ||||
| 12. | Date of Board [and Committee] approval | [ | ] [and [ ], respectively] |
for issuance of Notes obtained:
| 13. | Fixed Rate Note Provisions: | [Applicable/Not Applicable] | |
|---|---|---|---|
| (i) | Rate(s) of Interest: | [ ] per cent. per annum payable in arrear on each Interest Payment Date |
|
| (ii) | Interest Payment Date(s): | [ ] [and [ ]] in each year up to and including the Maturity Date |
|
| (iii) | Fixed Coupon Amount(s): | [ ] per Calculation Amount |
|
| (iv) | Broken Amount(s): | [[ ] per Calculation Amount, payable on the Interest Payment Date falling [in/on] [ ]/Not Applicable] |
|
| (v) | Day Count Fraction: | [30/360] [Actual/Actual-ICMA] | |
| (vi) | Determination Date(s): | [[ ] in each year] [Not Applicable] |
|
| 14. | Floating Rate Note Provisions: | [Applicable/Not Applicable] | |
| (i) | Interest Period(s): | [ ] |
|
| (ii) | Specified Interest Payment Dates: | [[ ] [and [ ]] in each year, subject to adjustment in accordance with the Business Day Convention set out in (v) below] |
|
| (iii) | First Interest Payment Date: | [ ] |
| (iv) | Interest Period Date: | [ ] [Not Applicable] |
|
|---|---|---|---|
| (v) | Business Day Convention: | [Floating Rate Business Day Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention] |
|
| (vi) | Additional Business Centre(s): | [ ] [Not Applicable] |
|
| (vii) | Manner in which the Rate(s) of Interest is/are to be determined: |
[Screen Rate Determination/ISDA Determination] | |
| (viii) | Party responsible for calculating the Rate(s) of Interest and/or Interest Amount(s) (if not the Issuing and Paying Agent): |
[ ] [Not Applicable] |
|
| (ix) | Screen Rate Determination: | ||
| Reference Rate: | [ ] month [LIBOR/EURIBOR] |
||
| Interest Determination Date(s): | [ ] |
||
| Relevant Screen Page: | [ ] |
||
| (x) | ISDA Determination: | ||
| Floating Rate Option: | [ ] |
||
| Designated Maturity: | [ ] |
||
| Reset Date: | [ ] |
||
| ISDA Definitions: | [2006 ISDA Definitions] [ ] |
||
| (xi) | Margin(s): | [+/-] [ ] per cent. per annum |
|
| (xii) | Minimum Rate of Interest: | [[ ] per cent. per annum/Not Applicable] |
|
| (xiii) | Maximum Rate of Interest: | [[ ] per cent. per annum/Not Applicable] |
|
| (xiv) | Day Count Fraction: | [Actual/Actual] [Actual/Actual - ISDA] [Actual/365 (Fixed)] [Actual/365 (Sterling)] [Actual/360] [30/360] [360/360] [Bond Basis] [30E/360] [Eurobond Basis] [30E/360 (ISDA)] |
|
| 15. | Zero Coupon Note Provisions: | [Applicable/Not Applicable] | |
| (i) | Amortisation Yield: | [ ] per cent. per annum |
|
| (ii) | Day Count Fraction in relation to Early Redemption Amounts: |
[Actual/Actual] [Actual/Actual - ISDA] [Actual/365 (Fixed)] [Actual/365 (Sterling)] [Actual/360] [30/360] [360/360] [Bond Basis] [30E/360] [Eurobond Basis] [30E/360 (ISDA)] |
| 16. | Notice Periods for Condition 5(c): | Minimum Period: [30] [ ] days |
|
|---|---|---|---|
| Maximum Period: [60] [ ] days |
|||
| 17. | Call Option (Condition 5(d)): | [Applicable/Not Applicable] | |
| (i) | Optional Redemption Date(s): | [ ]/[Any date from and including [ ] to but excluding [ ]] |
|
| (ii) | Optional Redemption Amount(s): | [[ ] per Calculation Amount/Make-whole Amount] |
|
| (a) Condition 5(b) applies: |
[Applicable/Not Applicable] | ||
| (b) Make-whole Amount: |
[Applicable/Not Applicable] | ||
| Quotation Time: | [ ] |
||
| Determination Date: | [ ] |
||
| Reference Bond: | [ ] [or if such stock is no longer in issue, such other [ ] stock with a maturity date as near as possible to the Maturity Date, as the Financial Adviser may recommend] |
||
| Redemption Margin: | [[ ] per cent.] [None] |
||
| (iii) | If redeemable in part: | [Applicable/Not Applicable] | |
| (a) Minimum Redemption Amount: |
[ ] per Calculation Amount |
||
| (b) Maximum Redemption Amount: |
[ ] per Calculation Amount |
||
| (iv) | Notice periods for Condition 5(d): | Minimum Period: [15] [ ] days |
|
| Maximum Period: [30] [ ] days |
|||
| 18. | Put Option (Condition 5(e)): | [Applicable/Not Applicable] | |
| (i) | Optional Redemption Date(s): | [ ] |
|
| (ii) | Optional Redemption Amount(s): | [ ] per Calculation Amount |
|
| Condition 5(b) applies: | [Applicable/Not Applicable] | ||
| (iii) | Notice periods for Condition 5(e): | Minimum Period: [15] [ ] days |
|
| Maximum Period: [30] [ ] days |
|||
| 19. | 5(f)): | Change of Control Put Option (Condition | [Applicable/Not Applicable] |
| Change of Control Redemption Amount: | [ ] per Calculation Amount |
||
| 20. | Final Redemption Amount: | [ ] per Calculation Amount |
|
| 21. | Early Redemption Amount payable on redemption for taxation reasons or on event |
[ ] per Calculation Amount |
of default:
| 22. | (a) | Form of Notes: | [Temporary Global Note exchangeable for a permanent Global Note which is exchangeable for Definitive Notes only in the limited circumstances specified in the permanent Global Note] |
|---|---|---|---|
| [Temporary Global Note exchangeable for Definitive Notes on and after the Exchange Date] |
|||
| [Permanent Global Note exchangeable for Definitive Notes only in the limited circumstances specified in the permanent Global Note] |
|||
| (b) | New Global Note: | [Yes] [No] | |
| 23. | Financial Centre(s): | [Not Applicable/[ ]] |
|
| 24. | Talons for future Coupons to be attached to Definitive Notes: |
[Yes, as the Notes have more than 27 coupon payments, Talons may be required if, on exchange into definitive form, more than 27 coupon payments are still to be made./No] |
|
| Signed on behalf of Intermediate Capital Group plc: |
By: ..............................................
Duly authorised
Signed on behalf of [GUARANTORS]:
By: ..............................................
Duly authorised
Application [has been/is expected to be] made by the Issuer (or on its behalf) for the Notes to be listed on the Official List of the UK Listing Authority and admitted to trading on the regulated market of the London Stock Exchange with effect from [ ].
[The Notes to be issued [have been/are expected to be] assigned the following ratings]/[The following ratings reflect ratings assigned to Notes of this type issued under the Programme generally]]:
[Standard & Poor's Credit Market Services Europe Limited: [ ]] [Fitch Ratings Limited: [ ]]
[The Notes have not been specifically rated.]
[[Save for [ ], so] [So] far as the Issuer is aware, no person involved in the issue and offer of the Notes has an interest material to the issue/offer, including conflicting interests. / So far as the Issuer is aware, the following persons have an interest material to the issue/offer: [ ]. The [Managers] and their affiliates have engaged, and may in the future engage, in investment banking and/or commercial banking transactions with, and may perform other services for, the Issuer and the Guarantors and their affiliates in the ordinary course of business.]
Estimated total expenses: [ ]
Indication of yield: Calculated as [ ] per cent. per annum on the Issue Date. Yield is not an indication of future price.]]
[Not Applicable]
| (i) | [ |
|---|---|
| ISIN: | ] |
(iv) Delivery: Delivery [against/free of] payment
(v) Names and addresses of additional Paying Agent(s) (if any): [Not Applicable/[ ]]
[TEFRA C Rules/TEFRA D Rules/TEFRA not applicable]
[ ] has been extracted from [ ]. The Issuer and Guarantors confirm that such information has been accurately reproduced and that, so far as each 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.] [Not Applicable]
[Base Prospectus "Summary" to be inserted and the options given as placeholders in the "Summary" to be completed in respect of the Notes being issued]
You should be aware of a number of other matters that may not have been addressed in detail elsewhere in this Base Prospectus.
The London Stock Exchange's regulated market is a regulated market for the purposes of MiFID.
There has been no significant change in the financial or trading position of ICIL and no material adverse change in the prospects of ICIL since 31 March 2014.
There has been no significant change in the financial or trading position of ICML and no material adverse change in the prospects of ICML since 31 March 2014.
There has been no significant change in the financial or trading position of IIL and no material adverse change in the prospects of IIL since 31 March 2014.
The address of Euroclear is Euroclear Bank SA/NV, 1 Boulevard du Roi Albert II, B-1210 Brussels; the address of Clearstream, Luxembourg is Clearstream Banking, société anonyme, 42 Avenue JF Kennedy, L-1855 Luxembourg; and the address of CREST is Euroclear UK & Ireland, 33 Cannon Street, London EC4M 5SB.
This Base Prospectus and Final Terms relating to listed Notes will also be 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. The contents of the website of the Regulatory News Service operated by the London Stock Exchange shall not form part of this Base Prospectus.
This section contains a glossary of certain technical terms used in this Base Prospectus as well as an index of defined terms.
The following is a glossary explaining certain technical terms used in this Base Prospectus.
"assets under management" means the value of all funds and assets managed by the Fund Management Company.
"carried interest" means the share of profits that the fund manager is due once it has returned the cost of investment and agreed preferred return to investors.
"co-investment" means a direct investment made alongside a fund taking a pro rata share of all instruments.
"collateralised debt obligation" or "CDO" means investment grade securities backed by a pool of non-mortgage based bonds, loans or other assets. CDO values and payments are derived from a portfolio of fixed income underlying assets.
"Financial Reporting Council" means the UK's independent regulator responsible for promoting high quality corporate governance and reporting.
"Fund Management Company" means the Group's operating vehicle, which sources and manages investments on behalf of the IC and third party funds.
"high yield bonds" are a type of sub investment grade bond that typically has a higher risk of default but pays higher yields.
"Investment Company" means the investment unit of the Issuer. It co-invests alongside third party funds.
"leveraged credit" or "leveraged finance" – this refers to the provision of loans or other forms of credit to companies to fund their borrowing needs. These are often made at a higher rate of interest to reflect a higher risk of default by the borrower.
"leveraged buy-out debt" – this is leveraged credit which is used specifically to fund the acquisition of a company or part of it, either by a management team or by a third party. Assets of the acquired company will usually be used as collateral for the loans.
"liquid assets" are asset classes with an active, established market in which assets may be readily bought and sold.
"mezzanine finance" or "mezzanine debt" – this refers to money being provided to companies as subordinated debt or preferred equity instruments. It represents a claim on a company's assets which ranks ahead of the rights of equity holders but behind other parties, including any senior lenders.
"performance fees" are incentive fees paid when fund performance exceeds a fixed return.
"realisation" means the return of invested capital in the form of principal, rolled up interest and/or capital gain.
"securitisation" is a form of financial structuring whereby a pool of assets is used as security (collateral) for the issue of financial instruments.
"senior debt", "senior finance" or "senior loans" – a debt financing obligation of a company under which the lender holds legal claim to the borrower's assets above all other debt obligations. The loan is considered senior to all other claims against the borrower, which means that in the event of a bankruptcy the senior bank loan is the first to be repaid, before all other interested parties receive repayment. They are usually secured against the assets of the borrower. Senior finance ranks above mezzanine finance and equity.
"sub-investment grade investments" – a loan made to a borrower with a lower credit rating, as determined by one or more rating agency.
"subordinated debt", "subordinated finance" or "subordinated loans" – a debt financing obligation of a company under which the lender's claim is not to be paid until the claims of senior lenders have been paid in full. In the event of a bankruptcy, the subordinated claims will only be paid after any senior finance has been repaid in full.
"UK Corporate Governance Code" sets out standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders.
| 30/360 138 | |
|---|---|
| 30E/360 138 | |
| 30E/360 (ISDA) 139 | |
| 360/360 138 | |
| Acceptance Statement 89 | |
| Actual/360 138 | |
| Actual/365 (Fixed) 137 | |
| Actual/365 (Sterling) 138 | |
| Actual/Actual 137 | |
| Actual/Actual - ISDA 137 | |
| Actual/Actual-ICMA 139 | |
| Agency Agreement 130 | |
| Alternative Clearing System 156 | |
| assets under management 19, 119 | |
| Authorised Offeror 2, 89 | |
| Authorised Offeror Contract 92 | |
| Authorised Offeror Terms 89 | |
| Authorised Signatory 150 | |
| Bank 146 | |
| Base Prospectus ii | |
| Bond Basis 138 | |
| business day 147 | |
| Business Day 137 | |
| Calculation Agent 134 | |
| Calculation Agent(s) 130 | |
| Calculation Period 137 | |
| carried interest 20, 119 | |
| CDI Holders 28, 85 | |
| CDIs viii, 10, 28, 84, 160 |
| CDO 47, 119 | |
|---|---|
| CGN 156 | |
| Change of Control 144 | |
| Change of Control Period 145 | |
| Change of Control Put Date 144 | |
| Change of Control Put Event 143 | |
| Change of Control Put Event Notice 144 | |
| Change of Control Put Notice 144 | |
| Change of Control Put Period 144 | |
| Clearstream, Luxembourg 9, 27 | |
| Code 15, 25 | |
| co-investment 119 | |
| collateralised debt obligation 119 | |
| commercially reasonable evidence 160 | |
| Commission Proposal 79 | |
| Common Depositary 156 | |
| Common Safekeeper 156 | |
| Conditions ii, 130 | |
| Couponholders 130 | |
| Coupons 130 | |
| CRA Regulation vi, 5, 31, 35 | |
| CREST viii, 10, 28, 84, 160 | |
| CREST Deed Poll 29, 84, 160 | |
| CREST Depository 29, 84, 160 | |
| CREST Depository Interests viii, 28, 84, 160 | |
| CREST International Settlement Links Service 29, 85 | |
| CREST Manual 29, 85 | |
| CREST Nominee 29, 84 | |
| CREST Rules 29, 85 | |
| D1 138, 139 | |
| D2 138, 139 | |
| Day Count Fraction 137 |
| Dealer v | |
|---|---|
| Dealer Agreement 73 | |
| Dealers v, 9 | |
| Debt 133 | |
| Definitive Notes 157 | |
| Designated Maturity 134 | |
| Determination Date 139 | |
| Determination Period 139 | |
| Director 53 | |
| Directors 53 | |
| Dispute 92 | |
| Electronic Consent 159 | |
| ESMA 31 | |
| EU Member State 27, 80 | |
| EURIBOR 30 | |
| Eurobond Basis 138 | |
| Euroclear 9, 27 | |
| Euro-zone 139 | |
| Events of Default 149 | |
| Exchange Date 157 | |
| Exercise Notice 143 | |
| Facility Agreement 132 | |
| FATCA 15, 25 | |
| FATCA Agreement 80 | |
| FCA v, 21, 46, 88 | |
| FIEA 75 | |
| Final Terms ii, 9 | |
| Financial Adviser 142 | |
| Financial Centres 147 | |
| Financial Reporting Council 119 | |
| Financing Assets 133 | |
| Fitch vi, 5, 31, 145 |
| Floating Rate 134 | |
|---|---|
| Floating Rate Option 134 | |
| foreign passthru payments 81 | |
| FRC Code 55 | |
| FSCS vi, 15, 26 | |
| FSMA v, 90 | |
| FTT 79 | |
| Fund Management Company 119 | |
| Gross Redemption Yield 143 | |
| Group v, 5, 19, 46, 151 | |
| Guarantee ii, 131 | |
| Guarantor 131 | |
| Guarantors 131 | |
| high yield bonds 119 | |
| holder 131 | |
| Host Member State 88 | |
| ICG ii, 19 | |
| ICG Longbow 47 | |
| ICIL 6, 19, 25, 54, 62, 130 | |
| ICML 7, 19, 25, 54, 63, 130 | |
| IGA 81 | |
| IIL 8, 19, 54, 64, 130 | |
| interest 149 | |
| Interest Accrual Period 139 | |
| Interest Amount 140 | |
| Interest Commencement Date 140 | |
| Interest Determination Date 140 | |
| Interest Period 140 | |
| Interest Period Date 140 | |
| Intermediaries 81 | |
| Investment Company 119 | |
| Investment Grade Rating 144 |
| Investor's Currency 31 | |
|---|---|
| IRS 80 | |
| ISDA Definitions 41, 140 | |
| ISDA Determination 12 | |
| ISDA Rate 134 | |
| ISIN 116 | |
| Issue Date 130 | |
| Issuer ii, v, 19, 46, 130 | |
| Issuing and Paying Agent 130 | |
| leveraged buy-out debt 119 | |
| leveraged credit 119 | |
| leveraged finance 119 | |
| LIBOR 30 | |
| liquid assets 119 | |
| London Stock Exchange v | |
| M1 138, 139 | |
| M2 138, 139 | |
| Make-whole Amount 13 | |
| Markets in Financial Instruments Directive v, 89 | |
| Material Subsidiary 151 | |
| mezzanine debt 119 | |
| mezzanine finance 119 | |
| MiFID v, 89 | |
| Negative Rating Event 145 | |
| NGN 156 | |
| Non-Investment Grade Rating 144 | |
| Non-Participating FFI 81 | |
| Noteholder 131 | |
| Noteholders 11 | |
| Notes ii | |
| offer of Notes to the public 74 | |
| Offer Period 2, 89 |
| Official List v | |
|---|---|
| ORB v | |
| Ordinary Shares 46 | |
| Original Guarantor 130 | |
| Original Guarantors 19, 130 | |
| participating Member States 79 | |
| Partnership 54 | |
| Partnership Agreement 64 | |
| Paying Agents 130 | |
| performance fees 119 | |
| Permitted Security Interest 133 | |
| Permitted Transaction 151 | |
| principal 149 | |
| Programme ii | |
| Prospectus Directive v, 2, 74, 88 | |
| Public Offer 2, 74, 88 | |
| Public Offer Jurisdiction(s) 89 | |
| Rate of Interest 140 | |
| Rating Agency 145 | |
| realisation 119 | |
| Recalcitrant Holder 81 | |
| Reference Banks 140 | |
| Reference Bond 13 | |
| Reference Rate 140 | |
| Relevant Announcement Date 144 | |
| Relevant Clearing System 84 | |
| Relevant Date 148 | |
| relevant Dealer v | |
| Relevant Implementation Date 74 | |
| Relevant Jurisdiction 142 | |
| Relevant Member State 74 | |
| Relevant Potential Change of Control Announcement 145 |
| Relevant Screen Page 140 | |
|---|---|
| Reset Date 134 | |
| Rules 89 | |
| S&P vi, 5, 31, 145 | |
| Savings Directive 15, 27, 80 | |
| Savings Income 27, 80 | |
| Screen Rate Determination 12 | |
| Securities Act vii, 73 | |
| securitisation 119 | |
| Security 132 | |
| senior debt 119 | |
| senior finance 119 | |
| senior loans 119 | |
| Series 9 | |
| Specified Amount 151 | |
| Specified Currency 140 | |
| Stabilising Manager(s) vii | |
| sub-investment grade investments 119 | |
| subordinated debt 120 | |
| subordinated finance 120 | |
| subordinated loans 120 | |
| Subsidiary 152 | |
| Swap Transaction 134 | |
| Talons 130 | |
| TARGET Business Day 137 | |
| TARGET System 140 | |
| Terms and Conditions of the Public Offer 3, 93 | |
| Tranche 9, 130 | |
| Trust Deed 6, 130 | |
| Trustee vi, 6, 27, 130 | |
| UK Corporate Governance Code 120 | |
| UK Listing Authority v |
| Underlying Notes viii, 28, 84, 160 | |
|---|---|
| unit 136 | |
| Y1 138, 139 | |
| Y2 138, 139 |
This section sets out the text of the terms and conditions of the Notes.
The following is the text of the terms and conditions that, subject to completion in accordance with the provisions of Part A of the relevant Final Terms, shall be applicable to the Notes in definitive form (if any) issued in exchange for the Global Note(s) representing each Series. Either (i) the full text of these terms and conditions together with the relevant provisions of Part A of the Final Terms or (ii) these terms and conditions as so completed (and subject to simplification by the deletion of the nonapplicable provisions), shall be endorsed on such Notes. 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. Those definitions will be endorsed on the definitive Notes. References in the Conditions to "Notes" are to the 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 28 February 2014 between Intermediate Capital Group plc (the "Issuer"), Intermediate Capital Investments Limited ("ICIL"), Intermediate Capital Managers Limited ("ICML") and Intermediate Investments LLP ("IIL") as guarantors (ICIL, ICML and IIL together, the "Original Guarantors" and each an "Original Guarantor") and Deutsche Trustee Company Limited (the "Trustee", which expression shall include all persons for the time being who are the trustee or trustees under the Trust Deed) as trustee for the Noteholders (as defined below). These terms and conditions (the "Conditions") include summaries of, and are subject to, the detailed provisions of the Trust Deed, which includes the form of the Notes, Coupons and Talons referred to below. An Agency Agreement (as amended or supplemented as at the Issue Date, the "Agency Agreement") dated 28 February 2014 has been entered into in relation to the Notes between the Issuer, the Original Guarantors, the Trustee, Deutsche Bank AG, London Branch as initial issuing and paying agent and calculation agent and the other agents named in it. The issuing and paying agent, the other paying 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) and the "Calculation Agent(s)". Copies of the Trust Deed and the Agency Agreement are available for inspection by Noteholders during usual business hours at the principal office of the Trustee (presently at Winchester House, 1 Great Winchester Street, London EC2N 2DB) and at the specified offices of the Paying Agents.
The Noteholders and the holders of the interest coupons (the "Coupons") relating to interest bearing Notes and, where applicable in the case of such Notes, talons (the "Talons") for further Coupons (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 in the Specified Denomination(s) shown hereon. Notes of one Specified Denomination may not be exchanged for Notes of another Specified Denomination.
This Note is a Fixed Rate Note, a Floating Rate Note or a Zero Coupon Note or a combination of any of the foregoing, depending upon the Interest Basis shown hereon.
The 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.
Title to the Notes and the Coupons and Talons shall pass by delivery. 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 its theft or loss and no person shall be liable for so treating the holder.
In these Conditions, "Noteholder" means the bearer of any Note, "holder" (in relation to a Note, Coupon or Talon) means the bearer of any Note, Coupon or Talon 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.
Neither the Issuer nor any Guarantor will be required to execute or provide any other document in relation to any release pursuant to this Condition 2(d) but, if the Issuer requests in writing, the Trustee shall enter into any documentation in relation to the release of any Guarantor which the Issuer (acting reasonably) considers necessary or desirable and in a form satisfactory to the Trustee (acting reasonably) to evidence the release of that Guarantor, provided that, the Trustee shall not be obliged to enter into any documentation which, in the sole opinion of the Trustee, would have the effect of:
(i) exposing the Trustee to any liability against which it has not been indemnified and/or secured and/or prefunded to its satisfaction; or
(ii) increasing the obligations or duties, or protections, of the Trustee in the Trust Deed, the Agency Agreement, the Notes or the Coupons.
If any Subsidiary of the Issuer released from the Guarantee as described above subsequently provides a guarantee in respect of any Facility Agreement at any time after such release, such Subsidiary of the Issuer will be required to provide a guarantee as described in Condition 2(e).
Notice of any release of a Guarantor pursuant to this Condition will be given by the Issuer to the Noteholders in accordance with Condition 15.
(e) Addition of Guarantors: Without prejudice to Condition 10(c), if any Subsidiary of the Issuer provides a guarantee in respect of any Facility Agreement, the Issuer covenants that it shall procure that such Subsidiary of the Issuer shall at or prior to the date of the giving of such guarantee in respect of such Facility Agreement provide a Guarantee in respect of the Trust Deed, the Notes and the Coupons. The Issuer shall provide written notice to the Trustee of the proposed addition of such Guarantor under the relevant Facility Agreement. The Trust Deed provides that the Trustee shall agree, subject to such amendment of, or supplement to, the Trust Deed as the Trustee may require and such other conditions as are set out in the Trust Deed, but without the consent of the Noteholders or the Couponholders, to such Guarantee being provided by such new Guarantor. Subject to satisfaction of the conditions specified in the Trust Deed, the addition of a new Guarantor shall take effect on the same date that the addition of such Subsidiary of the Issuer as a guarantor takes effect under the relevant Facility Agreement.
Notice of any addition of a Guarantor pursuant to this Condition will be given by the Issuer to the Noteholders in accordance with Condition 15.
"Facility Agreement" means:
So long as any of the Notes remains outstanding (as defined in the Trust Deed), each of the Issuer and any Guarantor shall not, and the Issuer shall procure that no other Material Subsidiary (as defined in Condition 9) of the Issuer shall, create, assume or permit to subsist any mortgage, lien (not being a lien arising by operation of law), pledge, charge or other security ("Security") other than a Permitted Security Interest upon the whole or any part of its undertaking, assets or revenues, present or future (including any uncalled capital), to secure any Debt of any person or any obligation of the Issuer, any Guarantor or any Subsidiary of the Issuer under any guarantee, of or indemnity in respect of, any Debt of any person without at the same time or prior thereto securing the Issuer's obligations under the Notes, the Coupons and the Trust Deed and all amounts payable by each of the Guarantors, if any, in respect of the Guarantee, if any, equally and rateably therewith to the satisfaction of the Trustee or providing such other Security for the Notes and the Coupons, and all amounts payable by any such Guarantors in respect of the Guarantee, if any, as the Trustee in its absolute discretion deems to be not materially less beneficial to the Noteholders or which has been approved by an Extraordinary Resolution (as defined in the Trust Deed) of the Noteholders.
In this Condition 3:
"Debt" means indebtedness which is in the form of, or represented or evidenced by, bonds, notes, debentures, loan stock or other securities which for the time being are, or are intended to be, quoted, listed, ordinarily dealt in or traded on any stock exchange, over-the-counter or other established securities market but excluding any such indebtedness which has a stated maturity not exceeding one year; and
(a) Interest on Fixed Rate Notes: Each Fixed 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, such interest being payable in arrear on each Interest Payment Date. The amount of interest payable shall be determined in accordance with Condition 4(f).
(i) Interest Payment Dates: Each 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, such interest being payable in arrear on each Interest Payment Date. The amount of interest payable shall be determined in accordance with Condition 4(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 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) 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.
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 5(b)(i)).
(d) Accrual of Interest: 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 (both before and after judgment) at the Rate of Interest in the manner provided in this Condition 4 to the Relevant Date (as defined in Condition 7).
so require, such exchange or other relevant authority as soon as possible after their determination but in no event 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(b)(ii), the Interest Amounts and the Interest Payment Date so published may subsequently be amended (or appropriate alternative arrangements made 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 9, 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 in its sole discretion 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.
"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 an Interest Accrual Period, the "Calculation Period"):
(ii) if "Actual/365 (Fixed)" is specified hereon, the actual number of days in the Calculation Period divided by 365;
(iii) if "Actual/365 (Sterling)" is specified hereon, the actual number of days in the Calculation Period divided by 365 or, in the case of an Interest Payment Date falling in a leap year, 366;
Day Count Fraction =
$$
\frac{[360 \times (Y_2 - Y_1)] + [30 \times (M_2 - M_1)] + (D_2 - D_1)}{360}
$$
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 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 =
$$
\frac{[360 \times (Y_2 - Y_1)] + [30 \times (M_2 - M_1)] + (D_2 - D_1)}{360}
$$
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 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 =
$$
\frac{[360 \times (Y_2 - Y_1)] + [30 \times (M_2 - M_1)] + (D_2 - D_1)}{360}
$$
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 be 31, in which case D2 will be 30;
where:
"Determination Date" means the date(s) specified as such hereon or, if none is so specified, the Interest Payment Date(s); and
"Determination Period" means the period from and including a Determination Date in any year to but excluding the next Determination Date.
"Euro-zone" means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community, as amended.
"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 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 for the Specified Currency 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 published by the International Swaps and Derivatives Association, Inc., unless otherwise 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 and, in the case of a determination of EURIBOR, the principal Euro-zone office of four major banks in the Euro-zone inter-bank market, in each case selected by the Calculation Agent.
"Reference Rate" means the rate specified as such hereon (or any successor or replacement rate).
"Relevant Screen Page" means such page, section, caption, column or other part of a particular information service as may be specified hereon (or any successor or replacement page, section, caption, column or other part of a particular information service).
"Specified Currency" means the currency specified as such hereon or, if none is specified, the currency in which the Notes are denominated.
"TARGET System" means the Trans-European Automated Real-Time Gross Settlement Express Transfer (known as TARGET2) System which was launched on 19 November 2007 or any successor thereto.
(j) Calculation Agent: The Issuer shall procure that there shall at all times be one or more Calculation Agents if provision is made for them hereon and for so long as any Note is outstanding. 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 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 written approval of the Trustee) appoint a leading bank or financial institution engaged in the inter-bank 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.
(a) Final Redemption: Unless previously redeemed, 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 principal amount).
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 Conditions 5(c), 5(d), 5(e) or 5(f) or upon it becoming due and payable as provided in Condition 9, 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 (or such other notice period as may be specified hereon) (which notice shall be irrevocable) at their Early Redemption Amount (as described in Condition 5(b) above) (together with interest accrued to the date fixed for redemption), if (i) the Issuer satisfies the Trustee immediately prior to the giving of such notice that it has (or, if the Guarantee was called, any of the Guarantors has) or will become obliged to pay additional amounts as provided or referred to in Condition 7 as a result of any change in, or amendment to, the laws or regulations of a Relevant Jurisdiction, or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective (a) in the case of the Issuer or an Original Guarantor, on or after the date on which agreement is reached to issue the first Tranche of the Notes, or (b) in the case of any Guarantor which becomes a Guarantor after the date on which agreement is reached to issue the first Tranche of the Notes, the first day after such Guarantor becomes a Guarantor pursuant to Condition 2(e), and (ii) such obligation cannot be avoided by the Issuer (or any such Guarantor, as the case may be) taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer (or such Guarantor, as the case may be) would be obliged to pay such additional amounts were a payment in respect of the Notes (or the Guarantee, as the case may be) then due. Prior to the publication of any notice of redemption pursuant to this Condition 5(c), the Issuer shall deliver to the Trustee a certificate signed by two directors of the Issuer (or the relevant Guarantor, as the case may be) stating that the obligation referred to in (i) above has arisen and cannot be avoided by the Issuer (or the relevant Guarantor, as the case may be) taking reasonable measures available to it and the Trustee shall be entitled to accept such certificate as sufficient evidence of the satisfaction of the conditions precedent set out in (i) and (ii) above (without liability to any person) in which event it shall be conclusive and binding on the Noteholders and the Couponholders.
In these Conditions:
"Relevant Jurisdiction" means, in the case of the Issuer, the United Kingdom or any political subdivision or any authority thereof or therein having power to tax and, in the case of any Guarantor, any jurisdiction under the laws of which that Guarantor is incorporated, or any political subdivision or any authority thereof or therein having power to tax.
If Call Option is specified hereon, the Issuer may, unless either an Exercise Notice or a Change of Control Put Event Notice has been given pursuant to Condition 5(e) or 5(f), 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. Any such redemption of Notes shall be at their Optional Redemption Amount specified hereon (which may be the Early Redemption Amount (as described in Condition 5(b) above)), together with interest accrued to the date fixed for redemption. 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 on the date specified in such notice in accordance with this Condition.
If Make-whole Amount is specified hereon as the Optional Redemption Amount, the Optional Redemption Amount per Note shall be equal to the greater of the following, in each case together with interest accrued to but excluding the Optional Redemption Date(s):
where the Financial Adviser advises the Issuer and the Trustee that, for reasons of illiquidity or otherwise, such Reference Bond is not appropriate for such purpose, such other government stock as such Financial Adviser may recommend) plus any applicable Redemption Margin specified hereon.
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. Any notice of redemption given under this Condition 5(d) will override any notice of redemption given (whether previously, on the same date or subsequently) under Condition 5(c).
In the case of a partial redemption the notice to Noteholders shall also contain the certificate numbers of the Notes to be redeemed, which shall have been drawn in such place as the Issuer 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.
The Trustee shall be entitled to rely on any advice of the Financial Adviser pursuant to this Condition without liability to any person and without further enquiry or evidence and such advice shall be binding on all parties.
In this Condition:
"Gross Redemption Yield" means a yield calculated in accordance with generally accepted market practice at such time, as advised in writing to the Issuer and the Trustee by the Financial Adviser.
If 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 notice 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 5(b) above)), together with interest accrued to the date fixed for redemption.
To exercise such option the holder must deposit such Note (together with all unmatured Coupons and unexchanged Talons) with any Paying Agent at its specified office, together with a duly completed option exercise notice ("Exercise Notice") in the form obtainable from any Paying Agent within the notice period. No Note so deposited and option exercised may be withdrawn (except as provided in the Agency Agreement) without the prior consent of the Issuer.
If Change of Control Put Option is specified hereon, the holder of each Note will have the option (unless prior to the giving of the relevant Change of Control Put Event Notice (as defined below) the Issuer has given notice of redemption under Condition 5(c) or 5(d) above) to require the Issuer to redeem or, at the Issuer's option, purchase (or procure the purchase of) that Note on the Change of Control Put Date (as defined below) at the Change of Control Redemption Amount specified hereon together with interest accrued to (but excluding) the Change of Control Put Date if a Change of Control Put Event occurs.
(i) any person or any persons acting in concert (as defined in the City Code on Takeovers and Mergers), other than a holding company (as defined in Section 1159 of the Companies Act 2006 as amended) whose shareholders are or are to be substantially similar to the pre-existing shareholders of the Issuer, shall become interested (within the meaning of Part 22 of the Companies Act 2006 as amended) in (A) more than 50 per cent. of the issued or allotted ordinary share capital of the Issuer or (B) shares in the capital of the Issuer carrying more than 50 per cent. of the voting rights normally exercisable at a general meeting of the Issuer (each such event being, a "Change of Control"); and
provided that if at the time of the occurrence of the Change of Control the Notes carry a credit rating from more than one Rating Agency, at least one of which is investment grade, then paragraph (A) will apply; and
(iii) in making any decision to downgrade or withdraw a credit rating pursuant to paragraphs (A) and (B) above or not to award a credit rating of at least investment grade as described in the definition of Negative Rating Event, the relevant Rating Agency announces publicly or confirms in writing to the Issuer that such decision(s) resulted, in whole or in part, from the occurrence of the Change of Control or the Relevant Potential Change of Control Announcement.
Promptly upon the Issuer becoming aware that a Change of Control Put Event has occurred, the Issuer shall notify the Trustee in writing and the Issuer shall, and at any time upon the Trustee having express notice thereof the Trustee may, and if so requested by the holders of at least 25 per cent. in principal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution of the Noteholders, shall (subject in each case to the Trustee being indemnified and/or secured and/or prefunded to its satisfaction) give notice (a "Change of Control Put Event Notice") to the Noteholders and the Trustee (where such Change of Control Put Event Notice is given by the Issuer) in accordance with Condition 15 specifying the nature of the Change of Control Put Event and the procedure for exercising the Change of Control Put Option.
To exercise the Change of Control Put Option, the holder of a Note must deliver such Note to the specified office of any Paying Agent at any time during normal business hours of such Paying Agent falling within the period (the "Change of Control Put Period") of 30 days after a Change of Control Put Event Notice is given, accompanied by a duly signed and completed notice of exercise in the form (for the time being current) obtainable from the specified office of any Paying Agent (a "Change of Control Put Notice"). The Note should be delivered together with all Coupons appertaining thereto maturing after the date which is seven days after the expiration of the Change of Control Put Period (the "Change of Control Put Date"), failing which the Paying Agent will require payment from or on behalf of the Noteholder of an amount equal to the face value of any such missing Coupon. Any amount so paid will be reimbursed to the Noteholder against presentation and surrender of the relevant missing Coupon (or any replacement therefor issued pursuant to Condition 13) at any time after such payment, but before the expiry of the period of five years from the date on which such Coupon would have become due, but not thereafter. The Paying Agent to which such Note and Change of Control Put Notice are delivered will issue to the Noteholder concerned a nontransferable receipt in respect of the Note so delivered. Payment in respect of any Note so delivered will be made, if the holder duly specified a bank account in the Change of Control Put Notice to which payment is to be made, on the Change of Control Put Date by transfer to that bank account and, in every other case, on or after the Change of Control Put Date against presentation and surrender or (as the case may be) endorsement of such receipt at the specified office of any Paying Agent. A Change of Control Put Notice, once given, shall be irrevocable. For the purposes of these Conditions, receipts issued pursuant to this Condition 5(f) shall be treated as if they were Notes. The Issuer shall redeem or purchase (or procure the purchase of) the relevant Notes on the Change of Control Put Date unless previously redeemed (or purchased) and cancelled.
If 85 per cent. or more in principal amount of the Notes then outstanding have been redeemed or purchased pursuant to this Condition 5(f), the Issuer may, on giving not less than 30 nor more than 60 days' notice to the Noteholders (such notice being given within 30 days after the Change of Control Put Date), redeem or purchase (or procure the purchase of), at its option, all but not some only of the remaining outstanding Notes at the Change of Control Redemption Amount specified hereon together with interest accrued to (but excluding) the date fixed for such redemption or purchase.
If the rating designation employed by Fitch or S&P is changed from that which is described in paragraph (ii) of the definition of Change of Control Put Event above, or if a rating is procured from any other Rating Agency, the Issuer shall determine the rating designations of Fitch or S&P or such other Rating Agency (as appropriate) as are most equivalent to the prior rating designation of Fitch or S&P and this Condition 5(f) shall be construed accordingly.
The Trustee is under no obligation to ascertain or monitor whether a Change of Control Put Event or Change of Control or any event which could lead to the occurrence of or could constitute a Change of Control Put Event or Change of Control has occurred, or to seek any confirmation from any Rating Agency pursuant to paragraph (iii) above or pursuant to the definition of Negative Rating Event below, and, until it shall have express notice pursuant to the Trust Deed to the contrary, the Trustee may assume that no Change of Control Put Event or Change of Control or other such event has occurred and shall have no liability to the Noteholders or any other person in respect thereof.
In this Condition 5(f):
"Change of Control Period" means the period commencing on and including the Relevant Announcement Date and ending on and including the date falling 90 days after the Change of Control (or such longer period for which the Notes are under consideration (such consideration having been announced publicly within the period described above) for rating review or, as the case may be, rating by a Rating Agency, such period not to exceed 60 days from and including the public announcement of such consideration);
a "Negative Rating Event" shall be deemed to have occurred if at such time as there is no rating assigned to the Notes by a Rating Agency the Issuer does not, by the end of the Change of Control Period, obtain such a rating of at least investment grade;
"Rating Agency" means Fitch Ratings Limited ("Fitch"), Moody's Investors Service, Inc., Standard & Poor's Rating Services ("S&P") or any of their respective successors or any other internationally recognised rating agency appointed by the Issuer to assign a credit rating to the Notes; and
"Relevant Potential Change of Control Announcement" means any public announcement made under the City Code on Takeovers and Mergers or statement by the Issuer, any actual or potential bidder or any adviser acting on behalf of any actual or potential bidder relating to any potential Change of Control where within 180 days following the date of such announcement or statement, a Change of Control occurs.
In addition, the Issuer and the Guarantors shall forthwith appoint a Paying Agent in New York City in respect of any Notes denominated in U.S. dollars in the circumstances described in paragraph (b) above.
Notice of any such change or any change of any specified office shall promptly be given to the Noteholders.
All payments of principal and interest by or on behalf of the Issuer or any Guarantor in respect of the Notes and the Coupons or under the Guarantee shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within a Relevant Jurisdiction or any other authority therein or thereof having power to tax, unless such withholding or deduction is required by law or pursuant to a voluntary agreement with a taxing authority. In that event, the Issuer or, as the case may be, any Guarantor shall pay such additional amounts as shall result in receipt by the Noteholders and the Couponholders of such amounts as would have been received by them had no such withholding or deduction been required, except that no such additional amounts shall be payable with respect to any Note or Coupon:
As used in these Conditions, "Relevant Date" in respect of any Note or Coupon means whichever is the later of (i) the date on which payment in respect of it first becomes due and (ii) if the full amount payable has not been received in London by the Issuing and Paying Agent or the Trustee on or prior to such due date, the date on which, the full amount having been so received, notice to that effect shall have been given to the Noteholders.
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 5 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 4 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.
Claims against the Issuer and/or a Guarantor 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 25 per cent. in principal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution shall (subject in each case to it being indemnified and/or secured and/or prefunded to its satisfaction), give notice to the Issuer that the Notes are, and they shall immediately become, due and payable at their Early Redemption Amount together (if applicable) with accrued interest:
(d) Enforcement Proceedings: a distress, attachment, execution or other legal process is levied, enforced or sued out on or against any part of the property, assets or revenues of the Issuer, a Guarantor or any Material Subsidiary and is not discharged or stayed within 30 days; or
(e) Security Enforced: any mortgage, charge, pledge, lien or other encumbrance, present or future securing an amount equal to or exceeding the Specified Amount and created or assumed by the Issuer, a Guarantor or any Material Subsidiary becomes enforceable and any step is taken to enforce it (including the taking of possession or the appointment of a receiver, administrative receiver, administrator manager or other similar person) and in any such case is not discharged or stayed within 30 days; or
provided that (i) in the case of Condition 9(b), and, in respect of Material Subsidiaries or any Guarantor, Conditions 9(c), 9(d), 9(f) and 9(g), and 9(i) in respect of Material Subsidiaries only, the Trustee shall have certified that in its opinion such event is materially prejudicial to the interests of the Noteholders, and (ii) any of the events described in Conditions 9(c), 9(d), 9(e), 9(f), 9(g) and 9(i) shall not be deemed to occur to the extent that such event arises in relation to a Permitted Transaction.
In these Conditions:
"Authorised Signatory" means any person who (i) is a director of the Issuer or (ii) has been notified by the Issuer in writing to the Trustee as being duly authorised to sign documents and to do other acts and things on behalf of the Issuer for the purposes of the Trust Deed;
"Material Subsidiary" shall, at any time, mean a Subsidiary of the Issuer:
calculated respectively by reference to the most recent annual audited financial statements (consolidated or, as the case may be, unconsolidated) of the Subsidiary of the Issuer and the then latest audited consolidated financial statements of the Issuer,
provided that in the case of a Subsidiary of the Issuer acquired after the end of the financial period to which the then latest audited consolidated financial statements of the Issuer relate, for the purpose of applying each of the foregoing tests, the reference to the Issuer's latest audited consolidated financial statements shall, until consolidated accounts for the financial period in which the acquisition is made have been published, be deemed to be a reference to such financial statements as if such Subsidiary of the Issuer had been shown therein by reference to its then latest relevant financial statements, adjusted as deemed appropriate by the Issuer; or
(ii) to which is transferred the whole or substantially all of the business, undertaking and assets of another Subsidiary of the Issuer which immediately prior to such transfer is a Material Subsidiary, whereupon (a) the transferor Material Subsidiary shall immediately upon such transfer cease to be a Material Subsidiary and (b) the transferee Subsidiary of the Issuer shall immediately upon such transfer become a Material Subsidiary, provided that such transferee Subsidiary of the Issuer shall cease to be a Material Subsidiary pursuant to this subparagraph (ii) on the date on which the consolidated financial statements for the Group for the financial period current at the date of such transfer are published, but so that such transferor Subsidiary of the Issuer or such transferee Subsidiary of the Issuer may be a Material Subsidiary on or at any time after such date by virtue of the provisions of subparagraph (i) above;
The Trustee shall be entitled to rely upon a certificate signed by two Authorised Signatories that in their opinion a Subsidiary of the Issuer is or is not or was or was not at any particular time or throughout any specified period a Material Subsidiary without liability to any person and without further enquiry or evidence and, if relied upon by the Trustee, shall, in the absence of manifest error, be conclusive and binding on all parties;
"Permitted Transaction" shall mean any securitisation or other structured finance transaction where:
"Specified Amount" shall mean the greater of (1) £25,000,000 or its equivalent in any other currency or currencies and (2) such amount in Sterling as is equal to one per cent. of the aggregate of (i) the principal amount of the share capital of the Issuer for the time being issued and paid up or credited as paid up; (ii) the amounts standing to the credit of the reserves (including any share premium account and profit and loss account) of the Issuer and its Subsidiaries and (iii) any amounts attributable to minority interests in Subsidiaries of the Issuer, all as shown in the latest audited consolidated balance sheet of the Issuer and its Subsidiaries prepared in accordance with generally accepted accounting principles in the United Kingdom or as is required by English law less (iv) any amounts, determined in accordance with generally accepted accounting principles in the United Kingdom, representing distribution of cash or tangible assets declared, recommended or made by the Issuer or any of its Subsidiaries (other than any distribution attributable to the Issuer or another Subsidiary of the Issuer) out of profits accrued prior to the date of, and not provided for in, the latest audited consolidated balance sheet of the Issuer and its Subsidiaries and less (v) any amounts shown in such latest audited consolidated balance sheet attributable to intangible assets and (y) of any debit on profit and loss account;
A certificate signed by two Authorised Signatories as to the Specified Amount shall, in the absence of manifest error, be conclusive and binding on all parties and the Trustee shall be entitled to rely on such certificate without liability to any person; and
"Subsidiary" means a subsidiary within the meaning of Section 1159 of the Companies Act 2006.
(a) Meetings of Noteholders: The Trust Deed contains provisions for convening meetings of Noteholders to consider any matter affecting their interests, including the sanctioning by Extraordinary Resolution 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 two 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 two or more persons being 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 modify 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 principal 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, or (vii) to modify the provisions concerning the quorum required at any meeting of Noteholders or the majority required to pass the Extraordinary Resolution or (viii) to modify or cancel the Guarantee, in which case the necessary quorum shall be two or more persons holding or representing not less than 75 per cent., or at any adjourned meeting not less than 25 per cent., in principal 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 Trust Deed provides that a resolution in writing signed by or on behalf of the holders of not less than 75 per cent. in principal amount of the Notes outstanding shall for all purposes be as valid and effective as an Extraordinary Resolution passed at a meeting of Noteholders duly convened and held. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Noteholders.
At any time after the Notes become due and payable, the Trustee may, at its discretion and without further notice, institute such steps, actions or proceedings against the Issuer and/or a Guarantor 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 steps, actions or proceedings unless (a) it shall have been so directed by an Extraordinary Resolution or so requested in writing by Noteholders holding at least 25 per cent. in principal 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 and/or a Guarantor 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 any contract or transaction with the Issuer, a Guarantor and any entity related to the Issuer or any Guarantor without accounting for any profit.
As further specified in the Trust Deed, the Trustee may rely without liability to Noteholders or Couponholders on a report, confirmation or certificate or any advice of any accountants, financial advisers, financial institution or any other expert, whether or not addressed to it and whether their liability in relation thereto is limited (by its terms or by any engagement letter relating thereto entered into by the Trustee or in any other manner) by reference to a monetary cap, methodology or otherwise. The Trustee may accept and shall be entitled to rely on any such report, confirmation or certificate or advice and such report, confirmation or certificate or advice shall be binding on the Issuer, the Trustee and the Noteholders.
If any Note, 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 requirements, at the specified office of the Issuing and Paying Agent or such other Paying Agent 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 upon payment by the claimant of the expenses 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, 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, Coupons or further Coupons) and otherwise as the Issuer may reasonably require. Mutilated or defaced Notes, 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 14 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 or any deed supplemental to it. 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 Noteholders shall be valid if published in a leading newspaper having 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 English language newspaper of 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 Noteholders in accordance with this Condition 15.
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 them, are governed by, and shall be construed in accordance with, English law.
The Global Note contains provisions which apply to the Notes while they are held in global form by the clearing systems, some of which include minor and/or technical modifications to the terms and conditions of the Notes set out in this Base Prospectus. The following is a summary of certain parts of those provisions.
If the Global Notes are intended to be issued in new global note ("NGN") form, the Global Notes will be delivered on or prior to the original issue date of the Tranche to a common safekeeper (the "Common Safekeeper") for Euroclear and Clearstream, Luxembourg. Depositing the Global Notes with the Common Safekeeper 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 satisfaction of the Eurosystem eligibility criteria.
If the relevant Global Notes are to be issued in NGN form, the Issuer shall confirm to the Issuing and Paying Agent and to the clearing systems whether or not such Global Notes are intended to be held in a manner which would allow recognition as eligible collateral for Eurosystem monetary policy and intra-day credit operations and if such relevant Global Note is to be deposited with one of the ICSDs as Common Safekeeper.
Global Notes which are issued in classic global note ("CGN") form may be delivered on or prior to the original issue date of the Tranche to a common depositary (the "Common Depositary") on behalf of Euroclear and Clearstream, Luxembourg.
If the Global Note is a CGN, upon the initial deposit of a Global Note with a Common Depositary for Euroclear and Clearstream, Luxembourg, Euroclear or Clearstream, Luxembourg will credit each subscriber with a principal amount of Notes equal to the principal amount thereof for which it has subscribed and paid. If the Global Note is a NGN, the principal amount of the Notes shall be the aggregate amount from time to time entered in the records of Euroclear or Clearstream, Luxembourg. The records of such clearing system shall be conclusive evidence of the principal amount of Notes represented by the 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 Euroclear, Clearstream, Luxembourg or other clearing systems.
Each of the persons shown in the records of Euroclear, Clearstream, Luxembourg or any other clearing system ("Alternative Clearing System") as the holder of a Note represented by a Global Note must look solely to Euroclear, Clearstream, Luxembourg or any such Alternative Clearing System (as the case may be) for his share of each payment made by the Issuer to the bearer of such Global Note and in relation to all other rights arising under the Global Notes, subject to and in accordance with the respective rules and procedures of Euroclear, Clearstream, Luxembourg or such Alternative 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 and such obligations of the Issuer will be discharged by payment to the bearer of such Global Note 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:
(a) if the relevant Final Terms indicate that such Global Note is issued in compliance with the TEFRA C Rules or in a transaction to which TEFRA is not applicable (as to which, see "Summary of the Programme - Element C.5"), in whole, but not in part, for the Definitive Notes defined and described below; and
(b) otherwise, in whole or in part upon certification as to non-U.S. beneficial ownership in the form set out in the Agency Agreement for interests in a permanent Global Note or, if so provided in the relevant Final Terms, for Definitive Notes.
Each permanent Global Note will be exchangeable, free of charge to the holder, on or after its Exchange Date in whole but not, except as provided under paragraph 3.3 below, in part for Definitive Notes if the permanent Global Note is held on behalf of Euroclear, Clearstream, Luxembourg or 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 does in fact do so.
In the event that a Global Note is exchanged for Definitive Notes, such Definitive Notes shall be issued in Specified Denomination(s) only. A Noteholder who holds a principal amount of less than the minimum Specified Denomination will not receive a Definitive Note in respect of such holding and would need to purchase a principal amount of Notes such that it holds an amount equal to one or more Specified Denominations.
For so long as a permanent Global Note is held on behalf of a clearing system and the rules of that clearing system so permit, such permanent Global Note will be exchangeable in part on one or more occasions for Definitive Notes.
If the Global Note is a CGN, 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 principal amount equal to that of the whole or that part of the 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, deliver, or procure the delivery of, an equal aggregate principal amount of duly executed and authenticated Definitive Notes or, if the Global Note is a NGN, the Issuer will procure that details of such exchange be entered pro rata in the records of the relevant clearing system. In this Base Prospectus, "Definitive Notes" means, in relation to any Global Note, the definitive Notes for which such Global Note may be exchanged (if appropriate, having attached to them all Coupons that have not already been paid on the Global Note and a Talon). Definitive Notes will be security 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 after that on which the notice requiring exchange is given and on which banks are open for business in the city in which the specified office of the Issuing and Paying Agent is located and in the city in which the relevant clearing system is located.
Temporary Global Notes will not be expressed to be exchangeable upon notice into Definitive Notes if the relevant Notes have denominations consisting of minimum Specified Denominations plus one or more higher integral multiples of another smaller amount in excess thereof.
The temporary Global Notes and permanent Global Notes 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 Base 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 is improperly withheld or refused. Payments on any temporary Global Note issued in compliance with the TEFRA D Rules 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. If the 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 6(d)(iv) and Condition 7(d) will apply to the Definitive Notes only. If the Global Note is a NGN, 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 principal 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 a 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 6(g).
Claims against the Issuer and/or any Guarantor 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 five years (in the case of interest) from the appropriate Relevant Date (as defined in Condition 7).
The holder of a permanent Global Note shall (unless such permanent Global Note 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 integral currency unit of the Specified Currency 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 principal amount of the relevant permanent Global Note.
Notes represented by a permanent Global Note may only be purchased by the Issuer, any of the Guarantors or any Subsidiary of the Issuer if they are purchased together with the rights to receive all future payments of interest 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 and/or Clearstream, Luxembourg (to be reflected in the records of Euroclear and Clearstream, Luxembourg as either a pool factor or a reduction in principal amount, at their discretion) or any other Alternative 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 principal amount of Notes in respect of which the option is exercised and at the same time, where the permanent Global 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 a NGN, the Issuer shall procure that details of such exercise shall be entered pro rata in the records of the relevant clearing system and the principal amount of the Notes recorded in those records will be reduced accordingly.
Where the Global Note is a NGN, 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 principal amount of the 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 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 and may consider such interests as if such accountholders were the holders of the Notes represented by such Global Note.
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.
While any Global Note is held on behalf of a clearing system, then:
(a) approval of a resolution proposed by the Issuer or the Trustee (as the case may be) given by way of electronic consents communicated through the electronic communications systems of the relevant clearing system(s) in accordance with their operating rules and procedures by or on behalf of the holders of not less than 75 per cent. in principal amount of the Notes outstanding (an "Electronic Consent" as defined in the Trust Deed) shall, for all purposes (including matters that would otherwise require an Extraordinary Resolution to be passed at a meeting for which the special quorum provisions as described in the Trust Deed were satisfied), take effect as an Extraordinary Resolution passed at a meeting of Noteholders duly convened and held, and shall be binding on all Noteholders and holders of Coupons and Talons whether or not they participated in such Electronic Consent; and
(b) where Electronic Consent is not being sought, for the purpose of determining whether a Written Resolution (as defined in the Trust Deed) has been validly passed, the Issuer and the Trustee shall be entitled to rely on consent or instructions given in writing directly to the Issuer and/or the Trustee, as the case may be, by accountholders in the clearing system with entitlements to such Global Note or, where the accountholders hold any such entitlement on behalf of another person, on written consent from or written instruction by the person for whom such entitlement is ultimately beneficially held, whether such beneficiary holds directly with the accountholder or via one or more intermediaries and provided that, in each case, the Issuer and the Trustee have obtained commercially reasonable evidence to ascertain the validity of such holding and have taken reasonable steps to ensure that such holding does not alter following the giving of such consent or instruction and prior to the effecting of such amendment. 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. As used in this paragraph, "commercially reasonable evidence" includes any certificate or other document issued by Euroclear, Clearstream, Luxembourg or any other relevant clearing system, or issued by an accountholder of them or an intermediary in a holding chain, in relation to the holding of interests in the Notes. Any such certificate or other document shall, in the absence of manifest error, be conclusive and binding for all purposes. 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 principal 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.
Investors may also hold interests in the Notes indirectly through Euroclear UK & Ireland Limited (formerly known as CRESTCo Limited) ("CREST") through the issuance of dematerialised depository interests ("CREST Depository Interests" or "CDIs") issued, held, settled and transferred through CREST, representing interests in the relevant Notes in respect of which the CDIs are issued (the "Underlying Notes"). CREST Depository Interests are independent securities distinct from the Notes, constituted under English law and transferred through CREST and will be issued by CREST Depository Limited (the "CREST Depository") pursuant to the global deed poll dated 25 June 2001 (as subsequently modified, supplemented and/or restated) (the "CREST Deed Poll"). See Section 12 (Clearing and Settlement) for more information regarding holding CDIs.
Intermediate Capital Group plc Juxon House 100 St Paul's Churchyard London EC4M 8BU United Kingdom
Intermediate Capital Investments Limited
Juxon House 100 St Paul's Churchyard London EC4M 8BU United Kingdom
Intermediate Capital Managers Limited Juxon House 100 St Paul's Churchyard London EC4M 8BU United Kingdom
Juxon House 100 St Paul's Churchyard London EC4M 8BU United Kingdom
1 Great Winchester Street London EC2N 2DB United Kingdom
Deutsche Trustee Company Limited Winchester House 1 Great Winchester Street London EC2N 2DB United Kingdom
Deutsche Bank AG, London Branch Winchester House 1 Great Winchester Street London EC2N 2DB United Kingdom
To the Arranger and Dealer and the Trustee
Linklaters LLP One Silk Street
London EC2Y 8HQ United Kingdom
To the Issuer and the Guarantors
Broadwalk House 5 Appold Street London EC2A 2HA United Kingdom
Deloitte LLP 2 New Street Square London EC4A 3BZ United Kingdom
Printed by Ashurst LLP 39088071
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