Kruk S.A. — Capital/Financing Update 2016

Jul 29, 2016

Current Report No. 82/2016

Date: July 29 th 2016

Subject: Conclusion of a senior notes issuance agreement

Legal basis: Art. 17.1 of MAR - Inside information

Text of the report:

Further to Current Report No. 45/2016 of May 20th 2016 on the materialbinding agreement (Agreement) which was concluded between KRUK S.A.'ssubsidiary i.e. ProsperoCapital S.a r.l. having its registered office inLuxembourg (ProsperoCapital), and entities of the Eurobank Group:respectively Bancpost S.A. and ERB Retail Services IFN S.A both havingtheir registered offices in Bucharest, and its Dutch subsidiary ERB NewEurope Funding II B.V. having its registered office in Amsterdam, (theSellers), the subject of which is the acquisition of three portfolios ofreceivables with a nominal value of EUR 597m (the Receivables), theManagement Board of KRUK S.A. (the Issuer) announces that on July 29th2016 in order to finance the acquisition of the Receivables,ProsperoCapital entered into a senior notes issuance agreement (theNotes Issuance Agreement).

The Notes Issuance Agreement was concluded between ProsperoCapital, theInternational Finance Corporation, a part of the World Bank Group, withits headquarters in Washington, DC, USA (IFC) and the Issuer'ssubsidiary InvestCapital Malta Ltd. having its registered office inMalta (ICM) (both called Investors) to invest in senior notes (theSenior Notes). On the basis of the Notes Issuance AgreementProsperoCapital will issue Senior Notes in the registered form in anamount of up to RON 255m (PLN 249,5m according to NBP exchange rate ofJuly 29th 2016). The proceeds will be applied towards payment of thepurchase price (the Price) of the Receivables as well as any otherexpenses to be incurred by ProsperoCapital in accordance with the NotesIssuance Agreement. The Investors will subscribe for the Senior Notestowards payment of the Price for the Receivables on a pro rata basis,which is 33 per cent. in respect of IFC and 67 per cent. in respect ofICM. The issuance of Senior Notes is conditional upon the Investorshaving confirmed to ProsperoCapital that all conditions precedent listedin the Notes Issuance Agreement have been met.

The maturity period of the Senior Notes is 72 months from the datefalling in five business days after the subscription offer is given byProsperoCapital (the Issue Date) or any later date agreed betweenProsperoCapital and the Investors.

Interests on the Senior Notes will be paid to the Investors on a monthlybasis. The amount of interests as well as principal repaid will dependon net cash flow from the collection of the Receivables and will becalculated in accordance with the formula stipulated in the NotesIssuance Agreement.

In order to ensure management and collection of the Receivables, aservicing agreement between ProsperoCapital and the Issuer's subsidiaryKRUK Romania S.R.L. (KRUK Romania), as a servicer is going to beconcluded (the "Servicing Agreement"). The fact of choosing KRUK Romaniaas a partner-servicer for the investment project was described by theIssuer in current report No 52/2015 of July 31st 2015.

The liabilities of ProsperoCapital under the Notes Issuance Agreementwill be secured by:

a) a Luxembourg law governed bank account pledge agreement;

b) a Romanian law governed movable mortgage over: (i) the Receivablesand the related rights to be acquired by ProsperoCapital, (ii)ProsperoCapital's rights and claims under the Servicing Agreement and(iii) each of ProsperoCapital's bank account located in Romania, (iv)KRUK Romania's bank accounts dedicated for collection of Receivables;

c) an English law governed deed of charge which is a first fixedsecurity for the payment or discharge of ProsperoCapital's obligationsunder the Senior Notes