Regulatory Filings • Mar 7, 2016
Regulatory Filings
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(incorporated in Scotland with limited liability under the Companies Acts 1948 to 1980, registered number SC045551)
(incorporated in Scotland with limited liability under the Companies Acts 1948 to 1980,
registered number SC090312)
On 22 February 1994, The Royal Bank of Scotland plc entered into a £1,500,000,000 (since increased from time to time to £90,000,000,000) Euro Medium Term Note Programme (the "Programme") and issued a prospectus on that date describing the Programme. Further prospectuses describing the Programme were issued by The Royal Bank of Scotland Group plc (an "Issuer" or "RBSG") and The Royal Bank of Scotland plc (an "Issuer" or "Royal Bank" or "RBS" and, together with RBSG, the "Issuers" and each an "Issuer"), the latest prospectus being issued on 2 April 2015. This Prospectus supersedes any previous prospectus. Any Notes (as defined below) issued under the Programme on or after the date of this Prospectus are issued subject to the provisions described herein. This does not affect any Notes issued before the date of this Prospectus.
Under the Programme, each of RBSG and RBS may, subject to compliance with all relevant laws, regulations and directives, from time to time, issue notes (the "Notes") denominated in any currency agreed by the relevant Issuer and the relevant Dealer(s) (as defined below). The maximum aggregate nominal amount of all Notes from time to time outstanding will not exceed £90,000,000,000 (or its equivalent in other currencies, subject to increase as provided herein). Notes to be issued under the Programme may comprise (i) unsubordinated Notes (the "Ordinary Notes") and (ii) Notes which are subordinated as described herein with a maturity date and with terms capable of qualifying as Tier 2 Capital (as defined herein) (the "Tier 2 Notes").
The requirement to publish a prospectus under Directive 2003/71/EC, as amended (the "Prospectus Directive") applies to Notes which are to be admitted to trading on a regulated market in the European Economic Area. References in this Prospectus to "Exempt Notes" are to Notes for which no prospectus is required to be published under the Prospectus Directive. Information contained in this Prospectus regarding Exempt Notes shall not be deemed to form part of this Prospectus and the UK Listing Authority (as defined below) has neither approved nor reviewed information contained in this Prospectus in connection with Exempt Notes.
The Notes may be issued on a continuing basis to one or more of the Dealers specified below and any additional Dealer appointed under the Programme from time to time, which appointment may be for a specific issue or on an ongoing basis (each a "Dealer" and together the "Dealers").
Application has been made to the Financial Conduct Authority under Part VI of the Financial Services and Markets Act 2000 (the "FSMA") (the "UK Listing Authority") for Notes (other than Exempt Notes) issued under the Programme during the period of 12 months from the date of this Prospectus to be admitted to the Official List of the UK Listing Authority (the "Official List") and to the London Stock Exchange plc (the "London Stock Exchange") for such Notes to be admitted to trading on the London Stock Exchange's regulated market (the "Market"). References in this Prospectus to Notes (other than Exempt Notes) being "listed" (and all related references) shall mean that such Notes have been admitted to trading on the Market and have been admitted to the Official List. The 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").
The Programme provides that Exempt Notes may be listed or admitted to trading, as the case may be, on such other or further stock exchange(s) or markets as may be agreed between the relevant Issuer and the relevant Dealer(s). The Issuers may also issue unlisted Exempt Notes and/or Exempt Notes not admitted to trading on any market. In the case of Exempt Notes, the applicable Pricing Supplement (as defined below) will state whether or not the relevant Notes will be listed and/or admitted to trading.
Other than in the case of the Exempt Notes, notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of such Notes, the issue price of such Notes and other information which is applicable to each Tranche of such Notes will be set out in a final terms document (the "Final Terms") which will be delivered to the UK Listing Authority and the London Stock Exchange on or before the date of issue of the Notes of such Tranche. In the case of Exempt Notes, notice of the aggregate nominal amount, interest (if any) payable in respect of such Notes, the issue price of such Notes and other information which is applicable to each Tranche of Exempt Notes will be set out in a pricing supplement document (the "Pricing Supplement"). Accordingly, in the case of Exempt Notes, each reference in this Prospectus to the applicable Final Terms shall be read and construed as a reference to the applicable Pricing Supplement unless the context requires otherwise.
Prospective investors should ensure that they understand the nature of the relevant Notes and the extent of their exposure to risks and that they consider the suitability of the relevant Notes as an investment in the light of their own circumstances and financial condition. It is the responsibility of prospective purchasers to ensure that they have sufficient knowledge, experience and professional advice to make their own legal, financial, tax, accounting and other business evaluation of the merits and risks of investing in the Notes and are not relying on the advice of the Issuers, the Trustee (as defined herein) or any Dealer in that regard. Prospective investors should consider carefully the risks set forth herein under "Risk Factors" prior to making investment decisions with respect to the Notes.
Each of the Issuers may agree with any Dealer that Notes may be issued in a form not contemplated by the terms and conditions of the Notes herein, in which event, in the case of Notes (other than Exempt Notes) and if appropriate, a drawdown prospectus will be made available which will describe the effect of the agreement reached in relation to such Notes. In the case of listed Exempt Notes only and if appropriate, a supplementary prospectus or drawdown prospectus will be published which will describe the effect of the agreement reached in relation to such Notes, or such additional terms will be set out in the applicable Pricing Supplement.
As at the date of this Prospectus: (i) long-term senior obligations of RBSG are rated "BBB-" by Standard & Poor's Credit Market Services Europe Limited ("S&P"), "Ba1" by Moody's Investors Service Ltd. ("Moody's") and "BBB+" by Fitch Ratings Ltd. ("Fitch"); (ii) short-term obligations of RBSG are rated "A-3" by S&P, "NP" by Moody's and "F2" by Fitch; (iii) long-term senior obligations of RBS are rated "BBB+" by S&P, "A3" by Moody's and "BBB+" by Fitch; and (iv) short-term obligations of RBS are rated "A-2" by S&P, "P-2" by Moody's and "F2" by Fitch. Notes issued under the Programme may be rated or unrated. When an issue of a certain Series of Notes is rated, its rating will not necessarily be the same as the rating applicable to the Programme (if any) and such rating may be specified in the applicable Final Terms. Standard & Poor's Credit Market Services Europe Limited, Fitch Ratings Limited and Moody's Investors Service Limited, are each established in the European Union and registered under the Regulation (EC) No. 1060/2009 (as amended) (the "CRA Regulation"). A 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 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 the CRA Regulation unless the rating is provided by a credit rating agency operating in the European Union before 7 June 2010 which has submitted an application for registration in accordance with the CRA Regulation and such registration is not refused.
Arranger The Royal Bank of Scotland Dealers
BofA Merrill Lynch BNP PARIBAS Citigroup Credit Suisse Deutsche Bank J.P. Morgan Mizuho Securities Morgan Stanley Nomura Société Générale Corporate & Investment Banking The Royal Bank of Scotland UBS Investment Bank This Prospectus (excluding the RBS Information (as defined below) and the section headed "Forms of Pricing Supplement") comprises a base prospectus for the purposes of the Prospective Directive in respect of Notes other than Exempt Notes to be issued by RBSG (the "RBSG Base Prospectus"). This Prospectus (excluding the RBSG Information (as defined below) and the section headed "Forms of Pricing Supplement") also comprises a separate base prospectus for the purposes of the Prospectus Directive in respect of Notes other than Exempt Notes to be issued by RBS (the "RBS Base Prospectus"). This Prospectus has also been prepared for the purpose of giving information with regard to the Issuers and their subsidiaries, which, according to the particular nature of each Issuer and the Notes, is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profit and losses and prospects of the relevant Issuer.
For the purposes of the previous paragraph:
"RBS Information" means: (i) the section headed "Forms of Final Terms – Part II – Applicable Final Terms for Issues by RBS"; and (ii) the information incorporated by reference into this Prospectus pursuant to paragraphs (e) to (g) in the section headed "Documents Incorporated by Reference"; and
"RBSG Information" means: (i) the section headed "Forms of Final Terms – Part I – Applicable Final Terms for Issues by RBSG"; and (ii) the information incorporated by reference into this Prospectus pursuant to paragraph (d) in the section headed "Documents Incorporated by Reference".
RBSG (whose registered office address appears on page 124 of this Prospectus) accepts responsibility for the information contained in the RBSG Base Prospectus and the section headed "Forms of Pricing Supplement – Part I – Applicable Pricing Supplement for Issues by RBSG", and to the best of its knowledge (having taken all reasonable care to ensure that such is the case), the information contained in the RBSG Base Prospectus and the section headed "Forms of Pricing Supplement – Part I – Applicable Pricing Supplement for Issues by RBSG" is in accordance with the facts and does not omit anything likely to affect the import of such information.
RBS (whose registered office address appears on page 124 of this Prospectus) accepts responsibility for the information contained in the RBS Base Prospectus and the section headed "Forms of Pricing Supplement – Part II – Pricing Supplement for Issues by RBS", and to the best of its knowledge (having taken all reasonable care to ensure that such is the case), the information contained in the RBS Base Prospectus and the section headed "Forms of Pricing Supplement – Part II – Pricing Supplement for Issues by RBS" is in accordance with the facts and does not omit anything likely to affect the import of such information.
Notes may only be issued in bearer form. Each Tranche of Notes will be initially represented by a global Note which will, (i) if the global Notes are intended to be issued in new global note ("NGN") form, as stated in the applicable Final Terms, be delivered on or prior to the original issue date of the Tranche to a common safekeeper (the "Common Safekeeper") for Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream, Luxembourg"); (ii) if the global Notes are not intended to be issued in NGN form ("CGN"), as stated in the applicable Final Terms, be delivered on or prior to the original issue date of the Tranche to a common depositary (the "Common Depositary") for Euroclear and Clearstream, Luxembourg; and (iii) if the global Notes are intended to be cleared through the Central Moneymarkets Unit Service ("CMU Service") operated by the Hong Kong Monetary Authority (the "CMU Operator"), as stated in the applicable Final Terms, be delivered on or prior to the original issue date of the Tranche to a sub-custodian for the CMU Service (such Notes initially cleared through the CMU Service, the "CMU Notes"). A temporary global Note will be exchangeable for either a permanent global Note or Notes in definitive form, in each case as specified in the applicable Final Terms, and in each case upon certification as to non-U.S. beneficial ownership as required by U.S. Treasury regulations. A permanent global Note will be exchangeable for definitive Notes, in whole or, in the circumstances described in "Form of the Notes" below, in part, upon either (a) 60 days' notice given at any time or (b) only upon the occurrence of an Exchange Event (as defined in "Form of the Notes" 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 Notes are (unless (i) the applicable Final Terms indicate that the Limited Exchange Event as defined in "Form of the Notes" applies and (ii) the Notes are treated as issued in registered form for U.S. federal income tax purposes) subject to U.S. tax law requirements under the U.S. Tax Equity and Fiscal Responsibility Act of 1982. 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 "Subscription and Sale" below).
This Prospectus is to be read in conjunction with all documents which are deemed to be incorporated herein by reference (see "Documents Incorporated by Reference" below). This Prospectus shall be read and construed on the basis that such documents are so incorporated and form part of this Prospectus.
None of the Dealers, the Agent, the other Paying Agents and the Trustee have separately verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility is accepted by any of the Dealers, the Agent, the other Paying Agents or the Trustee as to the accuracy or completeness of the information contained in this Prospectus or any financial statements or any other information provided by the Issuers in connection with the Programme or the Notes.
No person has been authorised to give any information or to make any representation not contained in or which is inconsistent with this Prospectus (including the information incorporated by reference herein) and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuers, any of the Dealers, the Agent, the other Paying Agents or the Trustee.
This Prospectus (including the information incorporated by reference herein) (i) is not intended to provide the basis of any credit or other evaluation and (ii) should not be considered as a recommendation or a statement of opinion (or a report of either of those things) by the Issuers, any of the Dealers, the Agent, the other Paying Agents or the Trustee that any recipient of this Prospectus (including the information incorporated by reference herein) should purchase any Notes. Prospective investors should have regard to the factors described under, and referred to in, the section headed "Risk Factors" in this Prospectus. Each investor contemplating purchasing any Notes should make its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness, of the relevant Issuer. This Prospectus (including the information incorporated by reference herein) does not constitute an offer or invitation by or on behalf of the Issuers, any of the Dealers, the Agent, the other Paying Agents or the Trustee to any person to subscribe for or to purchase any Notes.
The delivery of this Prospectus does not at any time imply that the information contained in this Prospectus (including the information incorporated by reference herein) concerning either Issuer is correct at any time subsequent to the date of this Prospectus. The Dealers, the Agent, the other Paying Agents and the Trustee expressly do not undertake to review the financial condition or affairs of the Issuers or any of their subsidiaries during the life of the Programme.
The Issuers, the Dealers, the Agent, the other Paying Agents and the Trustee do not represent that this Prospectus may be lawfully distributed, or that the Notes may be lawfully offered, in compliance with any applicable registration or other requirements in any jurisdiction, or pursuant to an exemption available thereunder, or assume any responsibility for facilitating any such distribution or offering. In particular, no action has been taken by the Issuers, the Dealers, the Agent, the other Paying Agents or the Trustee which is intended to permit distribution of this Prospectus in any jurisdiction where action for that purpose is required. Accordingly, the Notes may not be offered or sold, directly or indirectly, and neither this Prospectus nor any advertisement or other offering material may be distributed or published in any jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations, and the Dealers have represented accordingly.
This Prospectus has been prepared on the basis that any offer of Notes in any Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State") must be made pursuant to an exemption under the Prospectus Directive, as implemented in that Relevant Member State, from the requirement to publish a prospectus for offers of Notes. Accordingly any person making or intending to make an offer in that Relevant Member State of Notes which are the subject of an offering contemplated in this Prospectus as completed by final terms in relation to the offer of those Notes may only do so in circumstances in which no obligation arises for the relevant 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, in each case, in relation to such offer. Neither the Issuers nor any Dealer have authorised, nor do they authorise, the making of any offer of Notes in circumstances in which an obligation arises for an Issuer or any Dealer to publish or supplement a prospectus for such offer. References in this paragraph to the Prospectus Directive mean Directive 2003/71/EC (as amended, including by Directive 2010/73/EU), and includes any relevant implementing measure in the Relevant Member State.
The distribution of this Prospectus and the offer or sale of Notes may be restricted by law in certain jurisdictions. Persons into whose possession this Prospectus or any Notes come must inform themselves about, and observe, any such restrictions. In particular, there are restrictions on the distribution of this Prospectus and/or the offer or sale of Notes in the United States of America, the United Kingdom, Australia, Japan, Hong Kong, the PRC (as defined below), France and Singapore (see "Subscription and Sale" below).
All references in this Prospectus to "euro", "€" and "EUR" refer to the currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the Treaty on the Functioning of the European Union as amended, those to "Japanese Yen" refer to the currency of Japan, those to "Sterling", "£" and "pounds" refer to the currency of the United Kingdom, those to "Australian dollars" and "A\$" refer to the currency of Australia, those to "Canadian dollars" and "C\$" refer to the currency of Canada, those to "RMB", "CNY" or "Renminbi" refer to the currency of the PRC and those to "United States dollars" and "U.S.\$" refer to the currency of the United States of America.
All references in this Prospectus to "PRC" are to the People's Republic of China, which for the purpose of this Prospectus shall exclude the Hong Kong Special Administrative Region of the People's Republic of China, the Macao Special Administrative Region of the People's Republic of China and Taiwan.
Notes may not be a suitable investment for all investors. Each potential investor in any Notes must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:
(iii) have sufficient financial resources and liquidity to bear all of the risks of an investment in the relevant Notes, including where principal or interest is payable in one or more currencies, or where the currency for principal or interest payments is different from the potential investor's currency;
(iv) understand thoroughly the terms of the relevant Notes and be familiar with any relevant indices and financial markets; and
Some Notes are complex financial instruments. Sophisticated institutional investors generally do not purchase complex financial instruments as stand-alone instruments. They purchase complex financial instruments as a way to reduce risk or enhance yield with an understood, measured and appropriate addition of risk to their overall portfolios. A potential investor should not invest in Notes which are complex financial instruments unless it has the expertise (either alone or with the help of a financial adviser) to evaluate how the Notes will perform under changing conditions, the resulting effects on the value of such Notes and the impact this investment will have on the potential investor's overall investment portfolio.
Each potential investor should consult its own financial and legal advisers about the risks entailed by an investment in any Notes with returns that are calculated with reference to a variable and the suitability of such Notes in light of the potential investor's particular circumstances.
Legal investment considerations may restrict certain investments. The investment activities of certain investors are subject to 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 (1) Notes are legal investments for it, (2) Notes can be used as collateral for various types of borrowing and (3) 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.
In connection with the issue of any Tranche of Notes, one or more relevant Dealers (if any) (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 the 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 terms of the offer of the relevant Tranche of Notes is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date of the relevant Tranche of Notes and 60 days after the date of the allotment of the relevant Tranche of Notes. Any stabilisation action or over-allotment must be conducted by the relevant Stabilising Manager(s) (or any person acting on behalf of any Stabilising Manager(s)) in accordance with all applicable laws and rules.
The Commissioners of Her Majesty's Treasury ("HM Treasury") have neither reviewed this Prospectus nor verified the information contained in it, and HM Treasury makes no representation with respect to, and does not accept any responsibility for, the contents of this Prospectus or any other statement made or purported to be made on its behalf in connection with the Issuers or the issue and offering of the Notes by the Issuers. HM Treasury accordingly disclaims all and any liability, whether arising in tort or contract or otherwise, which it might otherwise have in respect of this Prospectus or any such statement.
| OVERVIEW OF THE PROGRAMME 7 | |
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| RISK FACTORS 12 | |
| DOCUMENTS INCORPORATED BY REFERENCE 21 | |
| SUPPLEMENTAL PROSPECTUS 24 | |
| FORM OF THE NOTES 25 | |
| TERMS AND CONDITIONS OF THE ORDINARY AND TIER 2 NOTES 29 | |
| USE OF PROCEEDS 66 | |
| DESCRIPTION OF THE ISSUERS 67 | |
| UNITED KINGDOM TAXATION 71 | |
| UNITED STATES TAXATION 74 | |
| SUBSCRIPTION AND SALE 75 | |
| FORMS OF FINAL TERMS 80 | |
| FORMS OF PRICING SUPPLEMENT 98 | |
| GENERAL INFORMATION AND RECENT DEVELOPMENTS 120 |
The following overview does not purport to be complete and is taken from, and is qualified in its entirety by, the remainder of this Prospectus and, in relation to the terms and conditions of any particular Tranche of Notes, the applicable Final Terms. This overview must be read as an introduction to this Prospectus. Any decision to invest in any Notes should be based on a consideration of this Prospectus as a whole, including the documents incorporated by reference, by any investor.
Words and expressions defined under the headings "Form of the Notes" or "Terms and Conditions of the Ordinary and Tier 2 Notes" below shall have the same meanings in this overview. The Issuer may agree with any Dealers that Notes may be issued in a form other than that contemplated in "Terms and Conditions of the Ordinary and Tier 2 Notes" herein, in which event, in the case of Notes (other than Exempt Notes) and if appropriate, a drawdown prospectus will be made available which will describe the effect of the agreement reached in relation to such Notes. In the case of listed Exempt Notes only and if appropriate, a supplementary prospectus or drawdown prospectus will be published which will describe the effect of the agreement reached in relation to such change, or such additional terms will be set out in the applicable Pricing Supplement.
Issuers The Royal Bank of Scotland Group plc ("RBSG").
The Royal Bank of Scotland plc ("RBS").
RBS is a wholly-owned subsidiary of RBSG. RBSG and RBS are public limited companies incorporated in Scotland. RBSG is the holding company of a large banking and financial services group. Headquartered in Edinburgh, RBSG and its subsidiaries consolidated in accordance with International Financial Reporting Standards (together, the "Group") operate in the United Kingdom and internationally through RBSG's principal subsidiaries, RBS and National Westminster Bank Plc ("NatWest").
As at 26 February 2016, HM Treasury held 72.6 per cent. of the issued ordinary share capital of RBSG.
The Group had total assets of £815 billion and owners' equity of £53 billion as at 31 December 2015. The Group's capital ratios on the end-point CRR basis as at 31 December 2015 were a total capital ratio of 19.6 per cent., a CET1 capital ratio of 15.5 per cent. and a Tier 1 capital ratio of 16.3 per cent. The Group's capital ratios on the PRA transitional basis as at 31 December 2015 were a total capital ratio of 24.7 per cent., a CET1 capital ratio of 15.5 per cent. and a Tier 1 capital ratio of 19.1 per cent.
RBS and its subsidiaries consolidated in accordance with International Financial Reporting Standards (the "RBS Group") had total assets of £961 billion and owners' equity of £45 billion as at 30 June 2015. The RBS Group's capital ratios on the end-point CRR basis as at 30 June 2015 were a total capital ratio of 16.4 per cent., a CET1 capital ratio of 10.8 per cent. and a Tier 1 capital ratio of 10.8 per cent.
| Risk Factors | The principal risk factors that may affect the Issuers' ability to fulfil their respective obligations under the Notes are discussed under "Risk Factors" below. |
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| Arranger | The Royal Bank of Scotland plc. |
| Dealers | BNP Paribas, Citigroup Global Markets Limited, Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, London Branch, J.P. Morgan Securities plc, Merrill Lynch International, Mizuho International plc, Morgan Stanley & Co. International plc, Nomura International plc, Société Générale, The Royal Bank of Scotland plc and UBS Limited. |
| Size | Up to £90,000,000,000 (or its equivalent in any other currencies) outstanding at any time. The Issuers may increase the amount of the Programme. |
| Maturities | Any maturity as indicated in the applicable Final Terms. |
| Issue Price | Notes will be issued at an issue price which is at par or at a discount to, or premium over, par. |
| Form of Notes | Each Tranche of Notes will initially be issued in the form of a temporary global Note, or, if so specified in the applicable Final Terms, a permanent global Note (which may or may not be in new global note form). A temporary global Note will be exchangeable, either for a permanent global Note or definitive Notes and a permanent global Note will be exchangeable for definitive Notes in certain circumstances. |
| Terms of Notes | The following types of Note may be issued: Notes (i) bearing interest at a fixed rate or a floating rate or (ii) not bearing interest or (iii) being a combination of any of the foregoing. |
| Interest periods, rates of interest and the amounts payable on redemption may differ depending on the Notes being issued. Such terms will be specified in the applicable Final Terms. |
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| Fixed Rate Notes | Fixed Rate Notes will bear interest at the fixed rate(s) of interest specified in the applicable Final Terms. Such interest will be payable in arrear on the Interest Payment Date(s) specified in the applicable Final Terms or determined pursuant to the Terms and Conditions. |
| Reset Notes | Reset Notes will, in respect of an initial period, bear interest at the initial fixed rate of interest specified in the applicable Final Terms. Thereafter, the fixed rate of interest will be reset on one or more date(s) specified in the applicable Final Terms by reference to a mid-market swap rate for the relevant Specified Currency, and for a period equal to the reset period, as adjusted for any applicable margin, in each case as may be specified in the applicable Final Terms. Such interest will be payable in arrear on the Interest Payment Date(s) specified in the applicable Final Terms or determined pursuant to the Terms and Conditions. |
| Floating Rate Notes | Floating Rate Notes will bear interest determined separately for each Series as follows: |
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| (i) on the same basis as the floating rate under a notional interest rate swap transaction in the relevant Specified Currency governed by an agreement incorporating the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc.; or (ii) by reference to LIBOR, EURIBOR, BBSW, BKBM, |
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| SHIBOR, CNH HIBOR or SOR, | |
| in any such case as adjusted for any applicable margin specified in the applicable Final Terms. |
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| Interest periods will be specified in the applicable Final Terms. Such interest will be payable in arrear on the Interest Payment Date(s) specified in the applicable Final Terms or determined pursuant to the Terms and Conditions. Floating Rate Notes may also have a maximum interest rate, a minimum interest rate, or both. |
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| Zero Coupon Notes | Zero Coupon Notes may be issued at their nominal amount or at a discount to their nominal amount and will not bear interest. |
| Redemption | The applicable Final Terms will specify the redemption amount and whether the relevant Notes can be redeemed prior to their stated maturity (other than for taxation reasons or following an event of default) at the option of the relevant Issuer and/or the holders of such Notes (or, in the case of Tier 2 Notes only, upon the occurrence of a Capital Disqualification Event). |
| Redemption of Tier 2 Notes | The relevant Issuer may, subject to Condition 5(k), redeem all, but not some only, of the Tier 2 Notes of any Series at the price set out in the applicable Final Terms together with any outstanding interest: |
| (i) in the event that it is obliged to pay additional amounts in respect of any present or future tax, duty or charge of whatever nature imposed or levied by or on behalf of the United Kingdom or any political subdivision or any authority thereof or therein having the power to tax; or |
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| (ii) upon the occurrence of certain other changes in the treatment of the relevant Notes for taxation purposes as described in Condition 5(b), |
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| in each case provided that the relevant Issuer cannot avoid the foregoing by taking measures reasonably available to it. |
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| If at any time a Capital Disqualification Event occurs in relation to any Series of Tier 2 Notes, the relevant Issuer may, subject to Condition 5(k), redeem all, but not some only, of the Tier 2 Notes of such Series at the price set out in the applicable Final Terms together with any outstanding interest. |
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| If the applicable Final Terms for Tier 2 Notes of any Series specify that the relevant Issuer has an option to redeem such |
Notes, the relevant Issuer may opt to redeem all, or (if specified
in the applicable Final Terms) some only, of such Tier 2 Notes at the price set out in the applicable Final Terms together with any outstanding interest.
Loss Absorption Disqualification Event Redemption (only in respect of Ordinary Notes issued by RBSG) If at any time a Loss Absorption Disqualification Event occurs and is continuing in relation to any Series of Ordinary Notes issued by RBSG, and the applicable Final Terms for the Ordinary Notes of such Series specify that RBSG has an option to redeem such Notes following the occurrence of a Loss Absorption Disqualification Event, RBSG may redeem all, but not some only, of the Notes of such Series at the price set out in the applicable Final Terms together with any outstanding interest.
Denomination of Notes The Notes will be issued in such denominations as specified in the applicable Final Terms save that (i) the minimum denomination of Notes which require the publication of a prospectus under the Prospectus Directive will be €100,000 (or its equivalent) and (ii) unless permitted by current laws and regulations, the minimum denomination of Notes issued by RBSG which have a maturity of less than one year from their issue date shall be £100,000 (or its equivalent in any other currencies).
Taxation All payments in respect of the Notes will be made without deduction for or on account of withholding taxes imposed within the United Kingdom unless required by law. If a deduction for or on account of such withholding tax is required by law, subject as provided in Condition 6, the relevant Issuer will be required to pay such additional amounts as will result in receipt by the holders of the sums which would have been received by them had no such withholding been required.
Status of Ordinary Notes Ordinary Notes (as described in Condition 2(a)) will constitute direct, unconditional, unsecured and unsubordinated obligations of the relevant Issuer and (save to the extent that laws affecting creditors' rights generally in a bankruptcy, winding up or administration may give preference to any of such other obligations) equally with all other present and future unsecured and unsubordinated obligations of the relevant Issuer.
Waiver of set-off – Ordinary Notes issued by RBSG If the applicable Final Terms specify that Condition 2(a)(ii) applies, then, subject to applicable law, no holder of any Ordinary Notes or the Coupons relating thereto (if any) nor the Trustee may exercise or claim any right of set-off in respect of any amount owed to it by the Issuer arising under or in connection with the Ordinary Notes or the Coupons relating thereto, and each Ordinary Noteholder or Ordinary Couponholder shall, by virtue of its subscription, purchase or holding of any Ordinary Note or Coupon, be deemed to have waived all such rights of set-off.
Status of Tier 2 Notes Tier 2 Notes (as described in Condition 2(b)) will constitute
| unsecured and subordinated obligations of the relevant Issuer and the holders of Tier 2 Notes will, in the event of the Winding Up or a Qualifying Procedure of the relevant Issuer, be subordinated in the manner provided in the Trust Deed and as specified in Condition 2(b) but shall rank at least pari passu with the claims of holders of all other subordinated obligations of the relevant Issuer and shall rank in priority to the claims of holders of all undated or perpetual subordinated obligations of the relevant Issuer and to the claims of holders of all classes of share capital of the relevant Issuer. |
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| Waiver of set-off – Tier 2 Notes | Subject to applicable law, neither any Tier 2 Noteholder or Tier 2 Couponholder nor the Trustee may exercise or claim any right of set-off in respect of any amount owed to it by the Issuer arising under or in connection with the Tier 2 Notes or the Tier 2 Coupons and each Tier 2 Noteholder and Tier 2 Couponholder shall, by virtue of its subscription, purchase or holding of any Tier 2 Note or Tier 2 Coupon, be deemed to have waived all such rights of set-off. |
| Remedies for Non-Payment (Tier 2 Notes only) |
The sole remedy against the relevant Issuer available to the Trustee or any holder or Couponholder for recovery of amounts owing in respect of any payment of principal or interest in respect of any Tier 2 Notes will be the institution of proceedings for the winding-up of the relevant Issuer and/or proving in any winding-up of the relevant Issuer. |
| Rating | Each Tranche of Notes may be rated or unrated. |
| Listing and admission to trading | Application has been made to admit the Notes (other than Exempt Notes) to be issued under the Programme to the Official List and to trading on the Market. |
| In the case of Exempt Notes, the applicable Pricing Supplement will state whether or not the relevant Notes will be listed and/or admitted to trading. |
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| Governing Law | The Notes, and any non-contractual obligations arising out of or in connection with the Notes will be governed by, and construed in accordance with, English law, save that (i) the set off provisions of the Ordinary Notes issued by RBSG where the applicable Final Terms specify that Condition 2(a)(ii) applies and (ii) the set-off and subordination provisions of the Tier 2 Notes will be governed by Scots law. |
| Selling Restrictions | See "Subscription and Sale" below. |
None of the Trust Deed, the Ordinary Notes and the Tier 2 Notes contains any negative pledge covenant by the Issuers and there is no cross default provision.
Prospective investors should consider carefully the risks set forth below and the other information contained in this Prospectus (including any documents incorporated by reference herein) and reach their own views prior to making any investment decision with respect to the Notes. Each of the risks highlighted below could have a material adverse effect on the business, operations, financial condition or prospects of each Issuer, which, in turn, could cause the Group's future results to be materially different from expected results and could have a material adverse effect on the amount of principal and interest which investors will receive in respect of the Notes. In addition, each of the risks highlighted below could adversely affect the trading price of the Notes or the rights of investors under the Notes and, as a result, investors could lose some or all of their investment.
The factors discussed below should not be regarded as a complete and comprehensive statement of all potential risks and uncertainties the Group's businesses face. The Issuers believe that the factors described below represent the principal risks inherent in investing in Notes issued under the Programme, but the Issuers may be unable to pay interest, principal or other amounts on or in connection with any Notes for other reasons (including risks of which they are not currently aware) and the Issuers do not represent that the statements below regarding the risks of holding any Notes are exhaustive. All of these factors are contingencies which may or may not occur and the Issuers are not in a position to express a view on the likelihood of any such contingency occurring. Investors should note that they bear the Issuers'solvency risk. Prospective investors should also read the detailed information set out elsewhere in this Prospectus (including any documents incorporated by reference herein) and reach their own views prior to making any investment decision.
RBS is the principal operating subsidiary of RBSG and, as at 31 December 2015, accounted for more than 95 per cent. of the consolidated assets and liabilities and more than 95 per cent. of operating loss before tax of RBSG. Accordingly, risk factors set out below or incorporated by reference herein which relate to RBSG and the Group will also be applicable to RBS and its subsidiaries consolidated in accordance with International Financial Reporting Standards (together, the "Issuer Group") and the occurrence of any such risks could have a material adverse effect on the Issuer Group's business, reputation, results of operations, financial condition and/or cash flows.
Prospective investors should consider the section entitled "Risk Factors" at pages 390 – 414 in the 2015 Annual Report and Accounts of RBSG as referred to in, and incorporated by reference into this Prospectus as set out in, "Documents Incorporated by Reference" on page 21 of this Prospectus.
Factors which the Issuers believe may be material for the purpose of assessing the market risks associated with Notes issued under the Programme are also described below.
Notes issued under the Programme may be structured in such a way that means they have features which contain particular risks for potential investors. Set out below is a description of certain such features:
An optional redemption feature is likely to limit the market value of Notes. During any period when the relevant Issuer may elect to redeem Notes, the market value of those Notes generally will not rise substantially above the price at which they can be redeemed. This may also be true prior to any redemption period. Further, during periods when there is an increased likelihood, or perceived increased likelihood, that the Notes will be redeemed early, the market value of the Notes may be adversely affected.
The relevant Issuer may be expected to redeem Notes when its cost of borrowing is lower than the interest rate on the Notes. At those times, an investor generally would not be able to reinvest the redemption proceeds at an effective interest rate as high as the interest rate on the Notes being redeemed and may only be able to do so at a significantly lower rate. Potential investors should consider reinvestment risk in light of other investments available at that time.
See "Tier 2 Notes, Redemption" and "Ordinary Notes, Redemption" below. Any additional optional redemption right of the relevant Issuer in relation to any Notes will be set out in the applicable Final Terms.
Notes may have returns that are variable as a result of the method by which the coupon is calculated or of the way interest is paid. The most basic example of this are Notes where the interest rate is floating, and therefore subject to changes as a result of movements in the prevailing interest rate. In these cases, the success or otherwise of the variable can impact significantly on the return under the Notes as well as the ability to trade the Notes on the secondary market. It should be expected that the value of the Notes and the secondary market for the Notes may decrease if the performance of the variable is less than anticipated.
These risks depend on a number of inter-related factors, including economic, financial and political events over which the Issuers have no control.
It should be assumed that the market for trading different types of Notes varies even though they are issued under the same Programme. By way of example, a Zero Coupon Note may be more difficult to trade and its price more variable than a Fixed Interest Rate Note. It may also be more difficult to trade a Zero Coupon Note that has just been issued than a Zero Coupon Note nearer its redemption, as returns on Zero Coupon Notes will be paid to investors only on redemption.
Inverse Floating Rate Notes have an interest rate equal to a fixed rate minus a rate based upon a reference rate such as LIBOR. The market values of such Notes typically are more volatile than market values of other conventional floating rate debt securities based on the same reference rate (and with otherwise comparable terms). Inverse Floating Rate Notes are more volatile because an increase in the reference rate not only decreases the interest rate of the Notes, but may also reflect an increase in prevailing interest rates, which further adversely affects the market value of these Notes.
Fixed/Floating Rate Notes may bear interest at a rate that the relevant Issuer may elect to convert from a fixed rate to a floating rate, or from a floating rate to a fixed rate. Where the relevant Issuer has the right to effect such a conversion, this will affect the secondary market in and the market value of such Notes since the relevant Issuer may be expected to convert the rate when it is likely to produce a lower overall cost of borrowing. If the relevant Issuer converts from a fixed rate to a floating rate in such circumstances, the spread on the Fixed/Floating Rate Notes may be less favourable than then prevailing spreads on comparable Floating Rate Notes tied to the same reference rate. In addition, the new floating rate at any time may be lower than the rates on other Notes. If the relevant Issuer converts from a floating rate to a fixed rate in such circumstances, the fixed rate may be lower than then prevailing rates on its Notes.
Reset Notes will initially bear interest at the Initial Rate of Interest until (but excluding) the First Reset Date. On the First Reset Date, the Second Reset Date (if applicable) and each Subsequent Reset Date (if any) thereafter, the interest rate will be reset to the sum of the applicable Mid-Swap Rate and the First Margin or Subsequent Margin (as applicable) as determined by the Calculation Agent on the relevant Reset Determination Date (each such interest rate, a "Subsequent Reset Rate"). The Subsequent Reset Rate for any Reset Period could be less than the Initial Rate of Interest or the Subsequent Reset Rate for prior Reset Periods and could affect the market value of an investment in the Reset Notes.
The market values of securities issued at a substantial discount or premium to their nominal amount tend to fluctuate more in relation to general changes in interest rates than do prices for conventional interest-bearing securities. Generally, the longer the remaining term of the securities, the greater the price volatility as compared to conventional interest-bearing securities with comparable maturities.
The obligations of the relevant Issuer under Tier 2 Notes will be unsecured and subordinated and will rank junior in priority of payment to the claims of Senior Creditors. "Senior Creditors" means, in respect of an Issuer, the creditors of such Issuer whose claims are admitted to proof in the winding up, administration or other insolvency procedure of such Issuer and who are unsubordinated creditors of such Issuer.
Although Tier 2 Notes may pay a higher rate of interest than comparable Notes which are not so subordinated, there is a real risk that an investor in such Tier 2 Notes will lose all or some of his investment should the relevant Issuer become insolvent.
On 6 June 2012, the European Commission published a legislative proposal for a directive providing for the establishment of an EU-wide framework for the recovery and resolution of credit institutions and investment firms, known as the Bank Recovery and Resolution Directive (the "BRRD"). Following the political agreement reached by the EU Member States and the European Parliament on 12 December 2013, the BRRD was adopted by the European Parliament on 15 April 2014 and the Council of the European Union on 6 May 2014.
The stated aim of the BRRD is to provide supervisory authorities with common tools and powers to address banking crises pre-emptively in order to safeguard financial stability and minimise taxpayers' exposure to losses. The BRRD requires Member States to give powers to their regulators and other bodies responsible for resolution activities ("Resolution Authorities") to recapitalise EU banks and investment firms ("Institutions") and/or their EEA parent holding companies that are in severe financial difficulty or at the point of non-viability by permanently writing-down certain capital instruments issued by such Institutions and/or their EEA parent holding companies (or converting capital instruments into shares) ("Regulatory Capital Write-Down Powers"). Resolution Authorities also have powers to 'bail-in' certain unsecured liabilities of an Institution and/or its EEA parent holding companies in a resolution scenario ("Bail-In Powers"), i.e. to impose losses of a failed or failing Institution onto certain creditors by writing down unsecured liabilities owed to them or by converting those liabilities into shares. Member States were required to transpose the requirements set out under the BRRD by 31 December 2014 and apply the requirements from 1 January 2015, although Member States were permitted to delay the application of Bail-in Powers until 1 January 2016. HM Treasury has not taken advantage of this option and Bail-in Powers have accordingly been in force in the United Kingdom since 31 December 2014.
Under the Regulatory Capital Write-Down Powers in the BRRD, Resolution Authorities will have the power (and will be obliged when specified conditions are determined by the relevant Resolution Authority to have been met) to write-down, or convert into CET1 Capital instruments (e.g. ordinary shares) of the Institution and/or its EEA parent holding company, Tier 1 and Tier 2 Capital instruments issued by Institutions and/or their EEA parent holding companies (including Tier 2 Notes) before determining that the relevant Institution and/or EEA parent holding company has reached a point of non-viability ("PONV") and, accordingly, taking any form of resolution action or applying any resolution power set out in the BRRD. Resolution Authorities will also be able to exercise Bail-In Powers to write-down certain unsecured liabilities of Institutions and/or their EEA parent holding companies that meet the conditions for resolution (which include a determination that a PONV has been reached or is likely to be reached) or to convert such unsecured liabilities into equity, either to recapitalise the relevant Institution and/or EEA parent holding company (subject to appropriate restructuring of the Institution's business) or to provide capital for any bridge institution that the Resolution Authorities establish in connection with the resolution of the Institution.
Subject to certain exemptions set out in the BRRD (including secured liabilities, bank deposits guaranteed under an EU member state's deposit guarantee scheme, liabilities arising by virtue of the holding of client money, liabilities to other non-group banks or investment firms that have an original maturity of fewer than seven days and certain other exceptions), it is intended that all liabilities of Institutions and/or their EEA parent holding companies should potentially be 'bail-in-able' ("Eligible Liabilities"). Resolution Authorities will apply the Bail-In Powers to the shares and other Eligible Liabilities of a failing Institution and/or EEA parent holding company in accordance with a hierarchy prescribed by the BRRD, pursuant to which, for example, subordinated debt instruments are to be written down or converted ahead of senior unsecured debt.
The Bail-In Powers given to Resolution Authorities include the ability to write-down or convert certain unsecured debt instruments into shares (or other instruments of ownership) of the Institution, to reduce the outstanding amount due under such debt instruments (including reducing such amounts to zero) or to cancel, modify or vary the terms of such debt instruments (including varying the maturity of such instruments). In addition, pursuant to Section 78A of the Banking Act 2009, the use of government financial stabilisation tools (such as public equity support or temporary public ownership tools) shall only be used in the very extraordinary situation of a systemic crisis, as a last resort and after having assessed and exploited the other resolution tools (including the Bail-In Powers) to the maximum extent practicable whilst maintaining financial stability, as determined by HM Treasury after consulting the Bank of England.
Tier 2 Notes, accordingly, fall within the pool of regulatory capital instruments that are subject to the Regulatory Capital Write-Down Powers. Ordinary Notes and (insofar as they have not already been written down or converted under the Regulatory Capital Write-Down Powers referred to above) Tier 2 Notes also fall within the scope of the Bail-In Powers set out in the BRRD (which the United Kingdom has implemented through the Financial Services (Banking Reform) Act 2013 and secondary legislation, which introduced bailin as a fourth stabilisation option which may be exercised by the Bank of England under the Banking Act 2009 in addition to the three previously existing stabilisation options provided under the Banking Act 2009).
The determination that all or part of the principal amount of the Notes will be subject to the Regulatory Capital Write-Down Powers or Bail-In Powers may be unpredictable and may be outside of the relevant Issuer's control. Accordingly, trading behaviour in respect of the Notes which are subject to such write-down or conversion powers is not necessarily expected to follow trading behaviour associated with other types of securities. Any final determination that the Notes will become subject to the Regulatory Capital Write-Down Powers or Bail-In Powers set out in the BRRD could have an adverse effect on the market price of the relevant Notes. Potential investors should also consider the risk that a Noteholder may lose all of its investment in such Notes and claims to unpaid interest. Any amounts written-off as a result of the application of either the Regulatory Capital Write-Down Powers or the Bail-in Powers would be irrevocably lost and holders of such Notes would cease to have any claims for (i) the written-off principal amount of the Notes and (ii) any unaccrued obligations or claims arising in relation to such amounts if the full principal amount of a Note is written-off. In circumstances where UK Resolution Authorities use their Bail-In Powers to reduce part of the principal amount of the Notes, the terms of the Notes would continue to apply in relation to the residual principal amount, subject to any modification to the amount of interest payable to reflect the reduction of the principal amount.
Where UK Resolution Authorities use their Bail-In Powers, they must ensure that creditors do not incur greater losses than they would have incurred had the Institution been wound up under normal insolvency proceedings immediately before the exercise of the resolution power, however there can be no guarantee that the application of this requirement will mean that a Noteholder will not lose all of its investment in the Notes in the event that the UK Resolution Authorities use their Bail-in Powers in this way.
The relevant Issuer may redeem all, but not some only, of the Tier 2 Notes of any Series at the price set out in the applicable Final Terms together with any outstanding interest:
in each case, provided that the relevant Issuer cannot avoid the foregoing by taking measures reasonably available to it.
If the applicable Final Terms for Tier 2 Notes of any Series specify that the relevant Issuer has an option to redeem such Notes, the relevant Issuer may opt to redeem all, or (if specified in the applicable Final Terms) some only, of such Tier 2 Notes at the price set out in the applicable Final Terms together with any outstanding interest.
If at any time a Capital Disqualification Event occurs in relation to any Series of Tier 2 Notes, and the applicable Final Terms for the Tier 2 Notes of such Series specify that the relevant Issuer has an option to redeem such Notes in such circumstances, the relevant Issuer may redeem all, but not some only, of the Tier 2 Notes of such Series at the price set out in the applicable Final Terms together with any outstanding interest.
If the Tier 2 Notes are to be so redeemed, there can be no assurance that Noteholders will be able to reinvest the amounts received upon redemption at a rate that will provide the same rate of return as their investment in the Tier 2 Notes.
The sole remedy against the relevant Issuer available to the Trustee or any Noteholder or Couponholder for recovery of amounts owing in respect of or arising under any Tier 2 Notes will be the institution of proceedings for the winding up of the relevant Issuer and/or proving in any Winding Up or Qualifying Procedure of the relevant Issuer. As such, the remedies available to holders of Tier 2 Notes are more limited than those typically available to holders of senior-ranking securities, including Ordinary Notes, which may make enforcement more difficult.
The relevant Issuer may opt to redeem all, but not some only, of the Ordinary Notes of any Series at the price set out in the applicable Final Terms together with any outstanding interest for the taxation reasons described in (i) or (ii) above (and, in each case, subject to the proviso) of "Tier 2 Notes, Redemption".
If the applicable Final Terms for Ordinary Notes of any Series specify that the relevant Issuer has an option to redeem such Notes, the relevant Issuer may opt to redeem all, or (if specified in the applicable Final Terms) some only, of such Ordinary Notes at the price set out in the applicable Final Terms together with any outstanding interest. In particular, if the applicable Final Terms for Ordinary Notes of any Series specify that the relevant Issuer has an option to redeem such Notes at a time when the remaining contractual maturity is one year or less, where the relevant Issuer is RBSG and such Notes count towards its and/or the Regulatory Group's minimum requirements for (A) own funds and eligible liabilities and/or (B) loss absorbing capacity instruments, RBSG may be expected to redeem such Notes pursuant to such option, as the Notes will, as a result of the remaining contractual maturity being less than the period prescribed by the applicable eligibility criteria under the current Loss Absorption Regulations, be expected to cease to so count.
If the Ordinary Notes are to be so redeemed, there can be no assurance that Noteholders will be able to reinvest the amounts received upon redemption at a rate that will provide the same rate of return as their investment in the Ordinary Notes.
If at any time a Loss Absorption Disqualification Event occurs and is continuing in relation to any Series of Ordinary Notes issued by RBSG, and the applicable Final Terms for the Ordinary Notes of such Series specify that RBSG has an option to redeem such Ordinary Notes, RBSG may redeem all, but not some only, of the Ordinary Notes of such Series at the price set out in the applicable Final Terms together with any outstanding interest. A Loss Absorption Disqualification Event shall be deemed to have occurred if (i) at the time that any Loss Absorption Regulation (as defined in the Conditions) becomes effective, and as a result of such Loss Absorption Regulation becoming so effective, in each case with respect to RBSG and/or the Regulatory Group, the Notes do not or (in the opinion of RBSG or the PRA (as defined in the Conditions)) are likely not to qualify in full towards RBSG's and/or the Regulatory Group's minimum requirements for (A) own funds and eligible liabilities and/or (B) loss absorbing capacity instruments; or (ii) as a result of any amendment to, or change in, any Loss Absorption Regulation, or any change in the application or official interpretation of any Loss Absorption Regulation, in any such case becoming effective on or after the Issue Date of the first Tranche of the Notes, the Notes are or (in the opinion of RBSG or the PRA) are likely to be fully or (if so specified in the applicable Final Terms) partially excluded from RBSG's and/or the Regulatory Group's minimum requirements for (A) own funds and eligible liabilities and/or (B) loss absorbing capacity instruments, in each case as such minimum requirements are applicable to RBSG and/or the Regulatory Group and determined in accordance with, and pursuant to, the relevant Loss Absorption Regulations; provided that in the case of (i) and (ii) above, a Loss Absorption Disqualification Event shall not occur where the exclusion of the Notes from the relevant minimum requirement(s) is due to the remaining maturity of the Notes being less than any period prescribed by any applicable eligibility criteria for such minimum requirements under the relevant Loss Absorption Regulations effective with respect to RBSG and/or the Regulatory Group on the Issue Date of the first Tranche of the Notes. As the implementation of the minimum requirements for eligible liabilities under the BRRD is subject to the adoption of further secondary legislation and implementation in the United Kingdom, RBSG is currently unable to predict whether the Notes will not (or are likely not to) qualify in full towards its or the Regulatory Group's minimum requirements for (A) own funds and eligible liabilities and/or (B) loss absorbing capacity instruments, or will be fully or partially excluded from its or the Regulatory Group's minimum requirements for (A) own funds and eligible liabilities and/or (B) loss absorbing capacity instruments, in each case as such minimum requirements are applicable to RBSG and/or the Regulatory Group.
If such Ordinary Notes are to be so redeemed, there can be no assurance that Noteholders will be able to reinvest the amounts received upon redemption at a rate that will provide the same rate of return as their investment in such Ordinary Notes.
There is no restriction on the amount of securities or other liabilities which the relevant Issuer may issue or incur and which rank senior to, or pari passu with, any other issue of Tier 2 Notes of such Issuer. The issue of any such securities or the incurrence of any such other liabilities may reduce the amount (if any) recoverable by Holders on a winding up, administration or other insolvency procedure of the relevant Issuer.
Notes issued by RBSG will be obligations exclusively of RBSG. RBSG is a holding company and conducts substantially all of its operations through its subsidiaries. RBSG's subsidiaries are separate and distinct legal entities, and have no obligation to pay any amounts due to holders of Notes from RBSG or to provide RBSG with funds to meet any of its payment obligations. RBSG's ability to make payments to the holders of the Notes depends largely upon the receipt of dividends, distributions, interest or advances from its wholly or partially owned subsidiaries. The ability of those subsidiaries to pay dividends, distributions, interest or advances may be subject to applicable laws. RBSG's rights to participate in the assets of any subsidiary if it is liquidated will be subject to prior claims of the subsidiary's creditors.
Set out below is a brief description of certain risks relating to the Notes generally:
The Terms and Conditions contain provisions for calling meetings of Noteholders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Noteholders including Noteholders who did not attend and vote at the relevant meeting and Noteholders who voted in a manner contrary to the majority.
The Terms and Conditions also provide that the Trustee may, without the consent of the Noteholders, (i) agree to any modification of, or waiver or authorisation of any breach or proposed breach of, any of the relevant Terms and Conditions (ii) determine without the consent of the Noteholders that any Event of Default (as defined in the Trust Deed) or potential Event of Default (as defined in the Trust Deed) shall not be treated as such or (iii) agree to the substitution of another entity as principal debtor under any Notes in place of the Issuer.
As a result of the above, actions may be taken with respect to a Series of Notes with which some holders of such Notes may not agree.
Notes will be governed by English law, except that (i) the set-off provisions of the Ordinary Notes issued by RBSG where the applicable Final Terms specify that Condition 2(a)(ii) applies and (ii) the set-off and subordination provisions of Tier 2 Notes will be governed by Scots law. No assurance can be given as to the impact of any possible judicial decision or change to English or Scots law or administrative practice after the date of this Prospectus (and any supplement to it and/or applicable Final Terms for the relevant Notes).
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 holder 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.
Set out below is a description of the principal risks which are relevant to an investor in Notes denominated in CNY:
CNY is not freely convertible at present. The PRC government continues to regulate conversion between CNY and foreign currencies, including the Hong Kong dollar, despite the significant reduction over the years by the PRC government of its control over routine foreign exchange transactions under current accounts. In efforts to internationalise CNY, the People's Bank of China ("PBOC") has established CNY clearing and settlement systems in a number of major global financial centres (each a "CNY Clearing Bank"), including Hong Kong, London, Frankfurt and Singapore. However, the current size of CNY-denominated financial assets outside the PRC is limited. Each CNY Clearing Bank only has access to its own onshore liquidity support from PBOC to square open positions of its relevant participating banks for limited types of transactions. Moreover, the offshore CNY clearing and settlement system operated by one CNY Clearing Bank is not linked to the offshore CNY clearing and settlement system operated by other CNY Clearing Banks resulting in the segregation of offshore CNY into separate and discrete pools.
Except in limited circumstances, all payments of CNY under the Notes to an investor will be made solely by transfer to a CNY bank account maintained with a Hong Kong bank in accordance with the prevailing rules and regulations and in accordance with the Terms and Conditions. The relevant Issuer cannot be required to make payment by any other means (including in bank notes or by transfer to a bank account in the PRC or anywhere else outside Hong Kong). In addition, there can be no assurance that access to CNY for the purposes of making payments under the Notes by the relevant Issuer or generally may remain or will not become restricted. If it becomes impossible to convert CNY from/to another freely convertible currency, or transfer CNY between accounts in Hong Kong, or the general CNY exchange market in Hong Kong becomes illiquid, or any CNY clearing and settlement system for participating banks in Hong Kong is disrupted or suspended, any payment of CNY under the Notes may be delayed or the relevant Issuer may make such payments in another currency selected by the relevant Issuer using an exchange rate determined by the Calculation Agent, or the relevant Issuer may need to redeem the Notes.
The value of CNY against the Hong Kong dollar and other foreign currencies fluctuates and is affected by changes in the PRC and international political and economic conditions and by many other factors. The relevant Issuer will make all CNY payments under the Notes in CNY unless otherwise specified. As a result, the value of such payments in CNY (in Hong Kong dollars or other applicable foreign currency terms) may vary with the prevailing exchange rates in the marketplace. If the value of CNY depreciates against the Hong Kong dollar or other foreign currencies, the value of a Noteholder's investment in Hong Kong dollars or other applicable foreign currency terms will decline.
The value of CNY payments under the Notes may be susceptible to interest rate fluctuations occurring within and outside the PRC, including PRC CNY repo rates and/or the Shanghai inter-bank offered rate.
Set out below is a description of the material market risks, including liquidity risk, exchange rate risk, interest rate risk and credit risk, which may be relevant to an investment in any 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. 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 would generally have a more limited secondary market and more price volatility than conventional debt securities. Illiquidity may have a material adverse effect on the market value of Notes.
The Issuers 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 (1) the Investor's Currency-equivalent yield on the Notes, (2) the Investor's Currency-equivalent value of the principal payable on the Notes and (3) the Investor's Currency-equivalent market value of the Notes.
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 relevant Issuer to make payments in respect of the Notes. As a result, investors may receive less interest or principal than expected, or no interest or principal.
Investment in Fixed Rate Notes involves the risk that subsequent changes in market interest rates may adversely affect the value of Fixed Rate Notes.
One or more independent credit rating agencies may assign credit ratings to an issue of Notes. The ratings may not reflect the potential impact of all risks related to structure, market and additional factors discussed above that may affect the value of the Notes and as such should not be relied upon by investors when making an investment decision. 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.
The following documents, which have been (1) previously published and (2) approved by the Financial Conduct Authority or filed with it, shall be deemed to be incorporated in, and form part of, this Prospectus:
(xxiii) Compliance report on pages 84 to 85;
(xxiv) Report of the Directors on pages 86 to 91;
(xxiii) Compliance report on pages 94 to 95;
(xxiv) Report of the Directors on pages 96 to 101;
(xxxiii) Glossary of terms on pages 505 to 511;
Any information or other documents themselves incorporated by reference, either expressly or implicitly, in the documents incorporated by reference in this Prospectus shall not form part of this Prospectus, except where such information or other documents are specifically incorporated by reference into this Prospectus.
It should be noted that, except as set forth above, no other portion of the above documents is incorporated by reference into this Prospectus. In addition, where sections of any of the above documents which are incorporated by reference into this Prospectus cross-reference other sections of the same document, such cross-referenced information shall not form part of this Prospectus, unless otherwise incorporated by reference herein. Those parts of the documents incorporated by reference which are not specifically incorporated by reference in this Prospectus are either not relevant for prospective investors in the Notes or the information is included elsewhere in this Prospectus.
The Issuers will provide, without charge, to each person to whom a copy of this Prospectus has been delivered, upon the oral or written request of such person, a copy of any or all of the information which is incorporated herein by reference. Written or oral requests for such information should be directed to RBSG at its principal office set out on page 124 of this Prospectus.
A copy of any or all of the information which is incorporated by reference in this Prospectus can be obtained from the website of RBSG at http://www.rbs.com and from the London Stock Exchange plc's website at http://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
The Issuers will, in the event of any significant new factor, material mistake or inaccuracy relating to information included in this Prospectus which is capable of affecting the assessment of any Notes, prepare a supplement to this Prospectus or publish a new prospectus in accordance with the Prospectus Directive for use in connection with any subsequent issue of Notes. The Issuers have undertaken to the Dealers in the Programme Agreement (as defined in "Subscription and Sale") that they will comply with section 87G of the FSMA.
Statements contained in any such supplement (or contained in any document incorporated by reference therein) shall, to the extent applicable (whether expressly, by implication or otherwise), be deemed to modify or supersede statements contained in this Prospectus or in a document which is incorporated by reference in this Prospectus. Any statement so modified or superseded shall not, except as so modified or superseded, constitute a part of this Prospectus.
The Notes of each Tranche will be in bearer form. Notes will be issued outside the United States in reliance on the exemption from registration provided by Regulation S under the Securities Act ("Regulation S").
Each Tranche of Notes will be in bearer form and will be initially issued in the form of a temporary global Note or, if so specified in the applicable Final Terms, a permanent global Note which, in either case, will, (i) if the global Notes are to be issued in NGN form, be delivered on or prior to the original issue date of the Tranche to the Common Safekeeper for Euroclear and Clearstream, Luxembourg; (ii) if the global Notes are to be issued in CGN form, be delivered on or prior to the original issue date of the Tranche to the Common Depositary for Euroclear and Clearstream, Luxembourg; and (iii) if the global Notes are to be issued in respect of CMU Notes, be delivered on or prior to the original issue date of the Tranche to the sub-custodian for the CMU Service. Delivering the global Notes in NGN form to 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. Whilst any Note is represented by a temporary global Note, payments of principal and interest (if any) due prior to the Exchange Date (as defined below) will be made (against presentation of the temporary global Note if the temporary global Note is issued in CGN form) outside the United States and its possessions only to the extent that certification of non-U.S. beneficial ownership as required by U.S. Treasury regulations (in the form referred to in the temporary global Note) has been received by (in the case of Notes other than CMU Notes) Euroclear and/or Clearstream, Luxembourg or (in the case of CMU Notes) the CMU Lodging and Paying Agent. See the description of "CMU Service" in "General Information and Recent Developments" for further details of the process for certification of non-U.S. beneficial ownership in relation to CMU Notes.
If the global Note is issued in CGN form, upon the initial deposit of a global Note with the Common Depositary, Euroclear or Clearstream, Luxembourg will credit each subscriber with a nominal amount of Notes equal to the nominal amount thereof for which it has subscribed and paid. If the global Note is issued in NGN form, the nominal amount of the Notes shall be the aggregate amount from time to time entered in the records of Euroclear or Clearstream, Luxembourg. If the global Note is issued in respect of CMU Notes, upon initial lodgement of a global Note with a sub-custodian of the CMU Service, the CMU Service will credit the account maintained by each initial purchaser with a nominal amount of Notes equal to the nominal amount thereof for which it has subscribed and paid. The records of such clearing systems shall be conclusive evidence of the nominal amount of Notes represented by the global Note and a statement issued by a clearing system at any time shall be conclusive evidence of the records of such clearing system at that time.
On and after the date (the "Exchange Date") which is 40 days after the date on which the temporary global Note is issued, interests in the temporary global Note will be exchangeable either for (a) interests in a permanent global Note without Coupons or Talons or (b) for definitive Notes (where the applicable Final Terms so permit), in each case, against certification of non-U.S. beneficial ownership as required by U.S. Treasury regulations in accordance with the terms set out in the temporary global Note, unless such certification has already been given as described in the last sentence of the first paragraph above. The holder of a temporary global Note will not be entitled to receive any payment of interest or principal due on or after the Exchange Date.
Pursuant to the Agency Agreement (as defined under "Terms and Conditions of the Ordinary and Tier 2 Notes" below), in the case of Notes other than CMU Notes, the Agent or, in the case of CMU Notes, the CMU Lodging and Paying Agent (each as so defined) shall arrange that, where a further Tranche of Notes is issued, the Notes of such Tranche shall be assigned a common code, ISIN and/or, in the case of CMU Notes only, a CMU instrument number (as the case may be) which are different from the common code, ISIN and/or CMU instrument number (as the case may be) assigned to Notes of any other Tranche of the same Series and shall remain different until at least 40 days after the completion of the distribution of the Notes of such further Tranche as certified by, in the case of Notes other than CMU Notes, the Agent or, in the case of CMU Notes, the CMU Lodging and Paying Agent to the relevant Dealer(s). Payments of principal and interest (if any) on a permanent global Note will be made, in the case of Notes other than CMU Notes, through Euroclear and/or Clearstream, Luxembourg (against presentation or surrender (as the case may be) of the permanent global Note if the permanent global Note is in CGN form) or, in the case of CMU Notes, in accordance with the rules of the CMU Service, in any case outside the United States and without any requirement for certification. Where the applicable Final Terms so permit, a permanent global Note will be exchangeable in whole or (subject to the Notes which continue to be represented by the permanent global Note being regarded by, in the case of Notes other than CMU Notes, Euroclear and Clearstream, Luxembourg or, in the case of CMU Notes, the CMU Service as fungible with the definitive Notes issued in partial exchange for such permanent global Note) in part, for security-printed definitive Notes with, where applicable, Coupons and Talons attached, either (a) on 60 days' notice given at any time, from (in the case of Notes other than CMU Notes) Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of an interest in such permanent global Note) to the Agent or (in the case of CMU Notes) the CMU Lodging and Paying Agent (acting on the instructions of any holder of an interest in such permanent global Note given through the CMU Service in accordance with its rules), in any case as described therein or (b) only upon the occurrence of an Exchange Event.
For these purposes, "Exchange Event" means:
The applicable Final Terms may provide that for the purposes of a particular permanent global Note, the definition of "Exchange Event" shall be "that the Issuer has been notified that, in the case of Notes other than CMU Notes, both Euroclear and Clearstream, Luxembourg have or, in the case of CMU Notes, the CMU Service has been closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) and no successor clearing system satisfactory to the Trustee is available" (the "Limited Exchange Event").
The relevant Issuer will promptly give notice to Noteholders in accordance with Condition 12 if an Exchange Event described in (i) or (ii) in each of subparagraphs (A) and (B) above occurs or if it decides to exercise its option described in (iii) in subparagraph (B) above. In the event of the occurrence of an Exchange Event, in the case of Notes other than CMU Notes, Euroclear and/or Clearstream, Luxembourg or, in the case of CMU Notes, the CMU Service (acting on the instructions of any holder of an interest in such Permanent Global Note) or the Trustee may give notice to, in the case of Notes other than CMU Notes, the Agent or, in the case of CMU Notes, the CMU Lodging and Paying Agent requesting exchange and, in the event of the occurrence
of an Exchange Event as described in (iii) in sub-paragraph (B) above, the Issuer may give notice to, in the case of Notes other than CMU Notes, the Agent or, in the case of CMU Notes, the CMU Lodging and Paying Agent requesting exchange. Any such exchange shall occur not later than 45 days after the date of receipt of the first relevant notice by, in the case of Notes other than CMU Notes, the Agent or, in the case of CMU Notes, the CMU Lodging and Paying Agent.
Global Notes and definitive Notes will be issued pursuant to the Agency Agreement. No definitive Note delivered in exchange for a permanent global Note will be mailed or otherwise delivered to any location in the United States in connection with such exchange. At the date hereof, none of Euroclear, Clearstream, Luxembourg and the CMU Service regards Notes in global form as fungible with Notes in definitive form. Temporary global Notes, permanent global Notes and definitive Notes will be authenticated and delivered by, in the case of Notes other than CMU Notes, the Agent or, in the case of CMU Notes, the CMU Lodging and Paying Agent on behalf of the relevant Issuer.
If, in respect of any Tranche of Notes, the applicable Final Terms specifies that a global Note may be exchanged for definitive Notes in circumstances other than upon the occurrence of an Exchange Event, such Notes will be issued with only one Specified Denomination or all Specified Denominations of such Notes will be an integral multiple of the lowest Specified Denomination, as specified in the applicable Final Terms.
Save where TEFRA is stated to be "Not Applicable" in the applicable Final Terms, the following legend will appear on all permanent global Notes and definitive bearer Notes which have an original maturity of more than 365 days and on all Coupons and Talons relating to such Notes:
For so long as any of the Notes is represented by a global Note held on behalf of Euroclear and/or Clearstream, Luxembourg, each person who is for the time being shown in the records of Euroclear and/or Clearstream, Luxembourg as the holder of a particular nominal amount of such Notes (in which regard any certificate or other document issued by Euroclear and/or Clearstream, Luxembourg as to the nominal amount of such Notes standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest error) shall be treated by the relevant Issuer, the Trustee, the Agent and any Paying Agent (as defined in "Terms and Conditions of the Ordinary and Tier 2 Notes" below) as the holder of such nominal amount of such Notes for all purposes other than with respect to the payment of principal (including premium (if any)) and interest on such Notes, the right to which shall be vested, as against the relevant Issuer, the Trustee and any Paying Agent, solely in the bearer of the global Note in accordance with and subject to its terms (or the Trustee in accordance with the Trust Deed) and the expressions "Noteholder", "holder of Notes" and related expressions shall be construed accordingly.
For so long as any of the Notes is represented by a global Note held by or on behalf of the CMU Operator, each person for whose account a relevant interest in such global Note is credited as being held by the CMU Operator, as notified to the CMU Lodging and Paying Agent by the CMU Operator in a relevant CMU Instrument Position Report or in any other relevant notification by the CMU Operator shall be deemed to be the holder of a corresponding nominal amount of such Notes (and the holder of the relevant global Note shall not be deemed to be the holder) for all purposes other than with respect to the payment of principal or interest on such Notes, the right to which shall be vested, as against the relevant Issuer, the Trustee and the CMU Lodging and Paying Agent, solely in the bearer of such global Note and for which purpose the bearer of such global Note shall be deemed to be the holder of such nominal amount of such Notes in accordance with and subject to its terms (or the Trustee in accordance with the Trust Deed) and the expressions "Noteholder", "holder of Notes" and related expressions shall be construed accordingly. For these purposes, a notification from the CMU Service shall be conclusive and binding evidence of the identity of any holder of Notes and the nominal amount of any Notes represented by such global Note credited to its account (save in the case of manifest error).
Notes which are represented by a global Note will only be transferable in accordance with the rules and procedures for the time being of Euroclear and/or Clearstream, Luxembourg and/or the CMU Service, as the case may be.
Any reference herein to Euroclear and/or Clearstream, Luxembourg and/or CMU Service shall, whenever the context so permits, be deemed to include a reference to any additional or alternative clearance system approved by the relevant Issuer, the Trustee and the Agent.
The following are (subject to completion and other than the paragraphs in italics) the Terms and Conditions of Notes which will be (i) incorporated by reference into each global Note and (ii) endorsed upon each definitive Note (if any) or incorporated therein by reference. The following Terms and Conditions are subject to completion in accordance with the provisions of the applicable Final Terms or Pricing Supplement (each as defined below) in relation to any Notes. Reference should be made to the section headed "Forms of Final Terms" and "Forms of Pricing Supplement" for the forms of Final Terms and Pricing Supplement, as applicable, which will include the definition of certain terms used in the following Terms and Conditions.
In these Terms and Conditions, the expression "Notes" shall mean (i) in relation to any Notes represented by a global Note, units of each Specified Denomination in the Specified Currency (each as defined in the applicable Final Terms (as defined below)) of the relevant Notes, (ii) definitive Notes issued in exchange for a temporary global Note or a permanent global Note and (iii) any global Note. The Notes are constituted by a Trust Deed (the "Original Trust Deed") dated 22 February 1994 as subsequently modified and/or supplemented and/or restated from time to time, most recently by a Thirty Fourth Supplemental Trust Deed dated 7 March 2016 made between The Royal Bank of Scotland plc ("Royal Bank" or an "Issuer"), The Royal Bank of Scotland Group plc ("RBSG" or an "Issuer" and, together with Royal Bank, the "Issuers") and The Law Debenture Trust Corporation p.l.c. (the "Trustee", which expression shall include any successor as trustee) as Trustee for the holders for the time being of the Notes (the "Noteholders", which expression shall, in relation to any Notes represented by a global Note, be construed as provided in Condition 1 below) (the Original Trust Deed as so modified and as further modified and/or supplemented and/or restated from time to time, the "Trust Deed"). References in Conditions 1 to 19 (inclusive) to "the Issuer" are to the entity named as such in the applicable Final Terms.
Interest bearing definitive Notes will have interest coupons ("Coupons") and, if applicable, talons for further Coupons ("Talons") attached on issue. Any reference herein to Coupon(s) or Couponholder(s) (as defined below) shall, unless the context otherwise requires, be deemed to include a reference to Talon(s) or Talonholder(s) (as defined below), respectively.
Payments in respect of the Notes will be made under an amended and restated Agency Agreement dated 2 April 2015 and made between the Issuers, The Bank of New York Mellon as agent (the "Agent", which expression shall include any successor as agent), The Bank of New York Mellon (Luxembourg) S.A. as a further paying agent, The Bank of New York Mellon, acting through its Hong Kong Branch as CMU lodging agent and paying agent (the "CMU Lodging and Paying Agent", which expression shall include any successor CMU Lodging and Paying Agent) (the CMU Lodging and Paying Agent together with the Agent, The Bank of New York Mellon (Luxembourg) S.A. and any additional or successor paying agent(s), the "Paying Agents") and the Trustee (such Agreement as further amended, supplemented or restated from time to time, the "Agency Agreement").
Notes may be issued at such times as shall be agreed between the relevant Issuer and the relevant Dealer(s) pursuant to an amended and restated Programme Agreement dated 2 April 2015 between the Issuers and the Dealers named therein. The relevant Issuer and the relevant Dealer(s) shall, prior to the time of issue of any Notes, agree upon the relevant provisions of the Notes to be issued pursuant to the terms set out below, such provisions to be indicated in the applicable Final Terms (as defined below).
The applicable Pricing Supplement in relation to any Tranche of Notes for which no prospectus is required to be published under Directive 2003/71/EC (as amended, including by Directive 2010/73/EU) (the "Prospectus Directive", which term includes any relevant implementing measure in a relevant Member State of the European Economic Area) ("Exempt Notes") may specify terms and conditions other than those set out herein which shall, to the extent so specified or to the extent inconsistent with these Terms and Conditions, replace or modify these Terms and Conditions for the purpose of such Notes. For the avoidance of doubt, the Final Terms in relation to each Tranche of Notes (other than Exempt Notes) shall not modify or replace the Terms and Conditions of the Notes as set out herein. The applicable Final Terms (which term in these Conditions in relation to Exempt Notes shall be deemed to refer to the applicable Pricing Supplement where relevant, as set out below) (or the relevant provisions thereof) will be attached hereto or endorsed hereon.
References herein to the "applicable Final Terms" are to Part A of the Final Terms (or, in the case of Exempt Notes, Part A of the Pricing Supplement) attached hereto or endorsed hereon and expressions defined or used in the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement) shall have the same meanings in these Terms and Conditions, unless the context otherwise requires or unless otherwise stated.
The following statements are summaries of the detailed provisions of the Trust Deed and the applicable Final Terms. Copies of the Trust Deed (which contains the forms of the Notes, Coupons and Talons), together with copies of the Agency Agreement which contains the form of the Final Terms for each issue of Notes, will be available for inspection, free of charge, at the registered office of the Trustee being at the date hereof at Fifth Floor, 100 Wood Street, London EC2V 7EX and at the specified office of each of the Paying Agents. A copy of the applicable Final Terms in relation to Notes may be obtained from the specified office of each of the Paying Agents. The Noteholders, the holders of the Coupons (the "Couponholders") and the holders of the Talons (the "Talonholders") will be deemed to have notice of, and will be entitled to the benefit of, all the provisions of the Trust Deed and the Agency Agreement, which will be binding on them. Words and expressions defined in the Trust Deed shall have the same meanings where used herein unless the context otherwise requires or unless otherwise stated.
As used herein, "Series" means the Notes of each original issue of Notes together with the Notes of any further issues expressed to be consolidated and form a single series with the Notes of an original issue and which are denominated in the same currency and the terms of which (save for the Issue Date, the Interest Commencement Date or the Issue Price) are otherwise identical (including whether or not they are listed on any stock exchange) and shall be deemed to include the temporary and permanent global Notes and the definitive Notes of such Series; and the expressions "Notes of the relevant Series" and "holders of Notes of the relevant Series" and related expressions shall be construed accordingly. As used herein, "Tranche" means all Notes of the same Series with the same Issue Date, Interest Commencement Date and Issue Price.
As used herein, "CNY", "RMB" and "Renminbi" each mean the currency of the PRC and "PRC" means the People's Republic of China which for the purpose of these Terms and Conditions, excludes the Hong Kong Special Administrative Region of the PRC, the Macao Special Administrative Region of the PRC and Taiwan.
The Notes are in bearer form and, in the case of definitive Notes, serially numbered, in the Specified Currency and the Specified Denomination(s) specified in the applicable Final Terms.
This Note may (i) bear interest calculated by reference to one or more fixed rates of interest (such Note, a "Fixed Rate Note"), (ii) bear interest calculated by reference to, in the case of an initial period, an initial fixed rate of interest and, thereafter, the applicable fixed rate of interest that has been determined pursuant to the reset provisions contained in these Terms and Conditions, by reference to a mid-market swap rate for the Specified Currency (such Note, a "Reset Note"), (iii) bear interest calculated by reference to one or more floating rates of interest (such Note, a "Floating Rate Note"), (iv) be issued on a non-interest bearing basis and be offered and sold at a discount to its nominal amount (such Note, a "Zero Coupon Note") or (v) be a combination of any of the foregoing.
In addition, the Notes will provide that the rights of Noteholders with regard to payments of principal will either be (i) unsubordinated ("Ordinary Notes") or (ii) subordinated in the manner described under Condition 2(b) below with a fixed redemption date and with terms capable of qualifying as Tier 2 Capital (the "Tier 2 Notes"). The term "Tier 2 Capital" has the meaning given in the Capital Regulations (as defined in Condition 5(m)).
Subject as set out below, title to the Notes and Coupons will pass by delivery. The Issuer, the Replacement Agent (as defined in the Agency Agreement) and any Paying Agent may (to the fullest extent permitted by applicable law) deem and treat the bearer of any Note or Coupon as the absolute owner thereof (whether or not such Note or Coupon shall be overdue and notwithstanding any notice of ownership or writing thereon or notice of any previous loss or theft thereof) for all purposes but, in the case of any global Note, without prejudice to the provisions set out in the next two succeeding paragraphs. The holder of each Coupon, whether or not such Coupon is attached to a Note, shall be subject to and bound by all the provisions contained in the relevant Note.
For so long as any of the Notes of this Tranche is represented by a global Note (including Notes issued in new global note ("NGN") form, as specified in the applicable Final Terms) held on behalf of Euroclear Bank S.A./N.V. ("Euroclear") and/or Clearstream Banking, société anonyme ("Clearstream, Luxembourg"), each person who is for the time being shown in the records of Euroclear or of Clearstream, Luxembourg as the holder of a particular nominal amount of such Notes (in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the nominal amount of such Notes standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest error) shall be treated by the Issuer, the Trustee and any Paying Agent as the holder of such nominal amount of such Notes for all purposes other than with respect to the payment of principal and interest on such Notes, the right to which shall be vested, as against the Issuer, the Trustee and any Paying Agent, solely in the bearer of the relevant global Note in accordance with and subject to its terms (or the Trustee in accordance with the Trust Deed) (and the expressions "Noteholder" and "holder of Notes" and related expressions shall be construed accordingly). Notes which are represented by a global Note will be transferable only in accordance with the rules and procedures for the time being of Euroclear or of Clearstream, Luxembourg, as the case may be.
For so long as any of the Notes in this Tranche is represented by a global Note held by or on behalf of the Hong Kong Monetary Authority as operator (the "CMU Operator") of the Central Moneymarkets Unit Service ("CMU Service"), each person for whose account a relevant interest in such global Note is credited as being held by the CMU Operator, as notified to the CMU Lodging and Paying Agent by the CMU Operator in a relevant CMU Instrument Position Report or in any other relevant notification by the CMU Operator (which notification, in either case, shall be conclusive evidence of the records of the CMU Operator save in the case of manifest error) shall be deemed to be the holder of a corresponding nominal amount of the Notes (and the holder of the relevant global Note shall not be deemed to be the holder) for all purposes other than with respect to the payment of principal or interest on such Notes, the right to which shall be vested, as against the Issuer, the Trustee and the CMU Lodging and Paying Agent, solely in the bearer of such global Note and for which purpose the bearer of such global Note shall be deemed to be the holder of such nominal amount of such Notes in accordance with and subject to its terms (or the Trustee in accordance with the Trust Deed) (and the expressions "Noteholder", "holder of Notes" and related expressions shall be construed accordingly). For these purposes, a notification from the CMU Service shall be conclusive and binding evidence of the identity of any holder of Notes and the nominal amount of any Notes represented by such global Note credited to its account (save in the case of manifest error).
Any reference to "CMU Notes" means Notes denominated in any currency which the CMU Service accepts for settlement from time to time that are, or are intended to be, initially cleared through the CMU Service.
Any reference to "Euroclear" and/or "Clearstream, Luxembourg" and/or "CMU Service" shall, whenever the context so permits, be deemed to include a reference to any additional or alternative clearing system approved by the Issuer, the Trustee and the Agent.
The Ordinary Notes and the Coupons relating thereto (if any) constitute direct, unconditional, unsecured and unsubordinated obligations of the Issuer and rank pari passu and without any preference among themselves and (save to the extent that laws affecting creditors' rights generally in a bankruptcy, winding up, administration or other insolvency procedure may give preference to any of such other obligations) equally with all other present and future unsecured and unsubordinated obligations of the Issuer from time to time outstanding.
(ii) Set-Off1
If the applicable Final Terms specify that this Condition 2(a)(ii) applies, then, subject to applicable law, no holder of any Ordinary Notes ("Ordinary Noteholders") or the Coupons relating thereto ("Ordinary Couponholders") (if any) nor the Trustee may exercise or claim any right of set-off in respect of any amount owed to it by the Issuer arising under or in connection with the Ordinary Notes or the Coupons relating thereto, and each Ordinary Noteholder or Ordinary Couponholder shall, by virtue of its subscription, purchase or holding of any Ordinary Note or Coupon, be deemed to have waived all such rights of set-off. To the extent that any set-off takes place, whether by operation of law or otherwise, between: (y) any amount owed by the Issuer to an Ordinary Noteholder or Ordinary Couponholder arising under or in connection with the Ordinary Notes or the Coupons relating thereto; and (z) any amount owed to the Issuer by such Ordinary Noteholder or, as the case may be, Ordinary Couponholder, such Ordinary Noteholder or, as the case may be, Ordinary Couponholder will immediately transfer such amount which is set-off to the Issuer or, in the event of its Winding Up or Qualifying Procedure (as the case may be), the liquidator, administrator or other relevant insolvency official of the Issuer, to be held on trust for the Senior Creditors.
The Tier 2 Notes and the Coupons relating thereto (if any) constitute unsecured and, in accordance with paragraph (ii) below, subordinated obligations of the Issuer and rank pari passu without any preference among themselves.
(ii) Subordination
In the event of the Winding Up or a Qualifying Procedure (each as defined in Condition 2(c) below) of the Issuer, the rights and claims of the holders of the Tier 2 Notes (the "Tier 2 Noteholders") and the Coupons (if any) relating thereto (the "Tier 2 Coupons", and "Tier 2 Couponholders" will be construed accordingly) against the Issuer in respect of or arising under the Tier 2 Notes and the relative Tier 2 Coupons and the Trust Deed (including any amounts attributable to the Tier 2 Notes and the relative Tier 2 Coupons and the Trust Deed and any
1 Only applicable to Ordinary Notes issued by RBSG.
damages awarded for breach of any obligations) will be subordinated in the manner provided in this paragraph (ii) and in the Trust Deed to the claims of all Senior Creditors but shall rank at least pari passu with the claims of holders of all other subordinated obligations (including guarantee obligations) of the Issuer and shall rank in priority to the claims of holders of all undated or perpetual subordinated obligations (including guarantee obligations) of the Issuer and to the claims of holders of all classes of share capital of the Issuer.
(iii) Set-Off
Subject to applicable law, neither any Tier 2 Noteholder or Tier 2 Couponholder nor the Trustee may exercise or claim any right of set-off in respect of any amount owed to it by the Issuer arising under or in connection with the Tier 2 Notes or the Tier 2 Coupons and each Tier 2 Noteholder and Tier 2 Couponholder shall, by virtue of its subscription, purchase or holding of any Tier 2 Note or Tier 2 Coupon, be deemed to have waived all such rights of set-off. To the extent that any set-off takes place, whether by operation of law or otherwise, between: (y) any amount owed by the Issuer to a Tier 2 Noteholder or a Tier 2 Couponholder arising under or in connection with the Tier 2 Notes or the Tier 2 Coupons; and (z) any amount owed to the Issuer by such Tier 2 Noteholder or, as the case may be, Tier 2 Couponholder, such Tier 2 Noteholder or, as the case may be, Tier 2 Couponholder will immediately transfer such amount which is set-off to the Issuer or, in the event of its Winding Up or Qualifying Procedure (as the case may be), the liquidator, administrator or other relevant insolvency official of the Issuer, to be held on trust for the Senior Creditors.
For the purposes of Conditions 2(a) and 2(b), "Senior Creditors" means creditors of the Issuer whose claims are admitted to proof in the winding up, administration or other insolvency procedure of the Issuer and who are unsubordinated creditors of the Issuer.
(c) Definitions
In these Terms and Conditions:
"PRA" means the Prudential Regulation Authority or such other governmental authority in the United Kingdom (or, if the Issuer becomes domiciled in a jurisdiction other than the United Kingdom, in such other jurisdiction) having primary supervisory authority with respect to the Issuer;
"Qualifying Procedure" means (i) that an administrator has been appointed in respect of the Issuer and has given notice that he/she intends to declare and distribute a dividend or (ii) a liquidation or dissolution of the Issuer or any procedure similar to a Winding Up or that procedure described in (i) that is commenced in respect of the Issuer, including any bank insolvency procedure or bank administration procedure pursuant to the Banking Act 2009; and
"Winding Up" means any winding up of the Issuer excluding a solvent winding up solely for the purposes of a reconstruction, amalgamation, reorganisation, merger or consolidation on terms previously approved by the Trustee or by an Extraordinary Resolution (as defined in the Trust Deed) of the holders of the Notes of the relevant Series.
Each Fixed Rate Note bears interest from (and including) the Interest Commencement Date specified in the applicable Final Terms at the rate(s) per annum equal to the Rate(s) of Interest payable in arrear on the date(s) so specified in the applicable Final Terms on which interest is payable in each year (each, an "Interest Payment Date") (subject to adjustment as described below) and on the Maturity Date so specified if that does not fall on an Interest Payment Date. If the Notes are in definitive form, except as provided in the applicable Final Terms, the amount of interest payable on each Interest Payment Date will be the Fixed Coupon Amount if one is specified in the applicable Final Terms. The first payment of interest will be made on the Interest Payment Date next following the Interest Commencement Date and, if the period from the Interest Commencement Date to such Interest Payment Date differs from the period between subsequent Interest Payment Dates, the amount of the first interest payment will be the initial Broken Amount specified in the applicable Final Terms. If the Maturity Date is not an Interest Payment Date, interest from (and including) the preceding Interest Payment Date (or the Interest Commencement Date, as the case may be) to (but excluding) the Maturity Date will be the final Broken Amount specified in the applicable Final Terms.
If the Modified Following Business Day Convention is specified in the applicable Final Terms and (x) if there is no numerically corresponding day in the calendar month in which an Interest Payment Date (or other date) should occur or (y) if any Interest Payment Date (or other date) would otherwise fall on a day which is not a Business Day, then such Interest Payment Date (or other date) shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event such Interest Payment Date (or other date) shall be brought forward to the immediately preceding Business Day. Unless the applicable Final Terms specify that the Business Day Convention is "adjusted", any such adjustment to an Interest Payment Date (or other date) shall not affect the amount of interest payable in respect of a Fixed Rate Note and, for the purposes of the determination of any amount in respect of interest and the applicable Day Count Fraction, the number of days in the relevant period shall be calculated on the basis that no adjustment has been made to the relevant Interest Payment Date (or other date).
Except in the case of Notes in definitive form where a Fixed Coupon Amount or Broken Amount is specified in the applicable Final Terms, interest shall be calculated in respect of any period by applying the Rate of Interest to:
and, in each case, multiplying such sum by the applicable Day Count Fraction, and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention. Where the Specified Denomination of a Fixed Rate Note in definitive form comprises more than one Calculation Amount, the amount of interest payable in respect of such Fixed Rate Note shall be the aggregate of the amounts (determined in the manner provided above) for each Calculation Amount comprising the Specified Denomination without any further rounding.
"Day Count Fraction" means, in respect of the calculation of an amount of interest in accordance with this Condition 3(a):
(a) in the case of Notes where the number of days in the relevant period from (and including) the most recent Interest Payment Date (or, if none, the Issue Date or, if different from the Issue Date, the Interest Commencement Date) to (but excluding) the relevant payment date (the "Accrual Period") is equal to or shorter than the Determination Period during which the Accrual Period ends, the number of days in such Accrual Period divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Dates that would occur in one calendar year assuming interest was to be payable in respect of the whole of that year; or
(b) in the case of Notes where the Accrual Period is longer than the Determination Period commencing on the last Interest Payment Date on which interest was paid (or, if none, the Issue Date or, if different from the Issue Date, the Interest Commencement Date), the sum of:
In this Condition:
"Business Day" has the meaning given to it in Condition 3(c)(i);
"Determination Period" means the period from (and including) a Determination Date (as specified in the applicable Final Terms) to (but excluding) the next Determination Date;
"euro" has the meaning given to it in Condition 3(c)(i); and
"sub-unit" means, with respect to any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, with respect to euro, means one cent.
Each Reset Note bears interest:
payable, in each case, in arrear on the date(s) so specified in the applicable Final Terms on which interest is payable in each year (each an "Interest Payment Date") (subject to adjustment as described in the second paragraph of Condition 3(a)) and on the Maturity Date if that does not fall on an Interest Payment Date. The Rate of Interest and the amount of interest (the "Interest Amount") payable shall be determined by the Calculation Agent, (A) in the case of the Rate of Interest, at or as soon as practicable after each time at which the Rate of Interest is to be determined, and (B) in the case of the Interest Amount in accordance with the provisions for calculating amounts of interest in Condition 3(a) and, for such purposes, references in the second and third paragraphs of Condition 3(a) to "Fixed Rate Notes" shall be deemed to be to "Reset Notes" and Condition 3(a) shall be construed accordingly.
In these Terms and Conditions:
"First Margin" means the margin specified as such in the applicable Final Terms;
"First Reset Date" means the date specified in the applicable Final Terms;
"First Reset Period" means the period from (and including) the First Reset Date until (but excluding) the Second Reset Date or, if no such Second Reset Date is specified in the applicable Final Terms, the Maturity Date;
"First Reset Rate of Interest" means, in respect of the First Reset Period and subject to Condition 3(b)(ii), the rate of interest determined by the Calculation Agent on the relevant Reset Determination Date as the sum of the relevant Mid-Swap Rate and the First Margin;
"Initial Rate of Interest" has the meaning specified in the applicable Final Terms;
"Mid-Market Swap Rate" means for any Reset Period the mean of the bid and offered rates for the fixed leg payable with a frequency equivalent to the frequency with which scheduled interest payments are payable on the Notes during the relevant Reset Period (calculated on the day count basis customary for fixed rate payments in the Specified Currency as determined by the Calculation Agent) of a fixed-for-floating interest rate swap transaction in the Specified Currency which transaction (i) has a term equal to the relevant Reset Period and commencing on the relevant Reset Date, (ii) is in an amount that is representative for a single transaction in the relevant market at the relevant time with an acknowledged dealer of good credit in the swap market and (iii) has a floating leg based on the Mid-Swap Floating Leg Benchmark Rate for the Mid-Swap Maturity (as specified in the applicable Final Terms) (calculated on the day count basis customary for floating rate payments in the Specified Currency as determined by the Calculation Agent);
"Mid-Market Swap Rate Quotation" means a quotation (expressed as a percentage rate per annum) for the relevant Mid-Market Swap Rate;
"Mid-Swap Floating Leg Benchmark Rate" means EURIBOR if the Specified Currency is euro or LIBOR for the Specified Currency if the Specified Currency is not euro;
"Mid-Swap Rate" means, in relation to a Reset Determination Date and subject to Condition 3(b)(ii), either:
which appears on the Relevant Screen Page; or
which appear on the Relevant Screen Page,
in either case, as at approximately 11.00 a.m. in the principal financial centre of the Specified Currency on such Reset Determination Date, all as determined by the Calculation Agent;
"Rate of Interest" means the Initial Rate of Interest, the First Reset Rate of Interest or the Subsequent Reset Rate of Interest, as applicable;
"Reset Date" means the First Reset Date, the Second Reset Date and each Subsequent Reset Date (as applicable), in each case as adjusted (if so specified in the applicable Final Terms) in accordance with Condition 3(a) as if the relevant Reset Date was an Interest Payment Date;
"Reset Determination Date" means, in respect of the First Reset Period, the second Business Day prior to the First Reset Date, in respect of the first Subsequent Reset Period, the second Business Day prior to the Second Reset Date and, in respect of each Subsequent Reset Period thereafter, the second Business Day prior to the first day of each such Subsequent Reset Period;
"Reset Period" means the First Reset Period or a Subsequent Reset Period, as the case may be;
"Second Reset Date" means the date specified in the applicable Final Terms;
"Subsequent Margin" means the margin specified as such in the applicable Final Terms;
"Subsequent Reset Date" means the date or dates specified in the applicable Final Terms;
"Subsequent Reset Period" means the period from (and including) the Second Reset Date to (but excluding) the next Subsequent Reset Date, and each successive period from (and including) a Subsequent Reset Date to (but excluding) the next succeeding Subsequent Reset Date; and
"Subsequent Reset Rate of Interest" means, in respect of any Subsequent Reset Period and subject to Condition 3(b)(ii), the rate of interest determined by the Calculation Agent on the relevant Reset Determination Date as the sum of the relevant Mid-Swap Rate and the relevant Subsequent Margin.
If on any Reset Determination Date the Relevant Screen Page is not available or the Mid-Swap Rate does not appear on the Relevant Screen Page, the Calculation Agent shall request each of the Reference Banks (as defined below) to provide the Calculation Agent with its Mid-Market Swap Rate Quotation as at approximately 11.00 a.m. in the principal financial centre of the Specified Currency on the Reset Determination Date in question.
If two or more of the Reference Banks provide the Calculation Agent with Mid-Market Swap Rate Quotations, the First Reset Rate of Interest or the Subsequent Reset Rate of Interest (as applicable) for the relevant Reset Period shall be the sum of the arithmetic mean (rounded, if necessary, to the nearest 0.001 per cent. (0.0005 per cent. being rounded upwards)) of the relevant Mid-Market Swap Rate Quotations and the First Margin or Subsequent Margin (as applicable), all as determined by the Calculation Agent.
If on any Reset Determination Date only one or none of the Reference Banks provides the Calculation Agent with a Mid-Market Swap Rate Quotation as provided in the foregoing provisions of this paragraph, the First Reset Rate of Interest or the Subsequent Reset Rate of Interest (as applicable) shall be determined to be the Rate of Interest as at the last preceding Reset Date or, in the case of the first Reset Determination Date, the First Reset Rate of Interest shall be the Initial Rate of Interest.
For the purposes of this Condition 3(b)(ii) "Reference Banks" means the principal office in the principal financial centre of the Specified Currency of four major banks in the swap, money, securities or other market most closely connected with the relevant Mid-Swap Rate as selected by the Issuer on the advice of an investment bank of international repute.
(iii) Notification of First Reset Rate of Interest, Subsequent Reset Rate of Interest and Interest Amount
The Calculation Agent will cause the First Reset Rate of Interest, any Subsequent Reset Rate of Interest and, in respect of a Reset Period, the Interest Amount payable on each Interest Payment Date falling in such Reset Period to be notified to the Issuer, the Agent and any stock exchange or other relevant authority on which the relevant Reset Notes are for the time being listed and notice thereof to be published in accordance with Condition 12 as soon as possible after their determination but in no event later than the fourth London Business Day (where a "London Business Day" means a day (other than a Saturday or a Sunday) on which banks and foreign exchange markets are open for business in London) thereafter.
If for any reason the Calculation Agent defaults in its obligation to determine the First Reset Rate of Interest, a Subsequent Reset Rate of Interest or to calculate any Interest Amount in accordance with this Condition 3(b), the Trustee shall determine the First Reset Rate of Interest or the Subsequent Reset Rate of Interest (as applicable) at such rate as, in its absolute discretion (having such regard as it shall think fit to the foregoing provisions of this Condition and to any terms specified in the applicable Final Terms), it shall deem fair and reasonable in all the circumstances or, as the case may be, the Trustee shall calculate the Interest Amount(s) in such manner as it shall deem fair and reasonable in all the circumstances and each such determination or calculation shall be deemed to have been made by the Calculation Agent.
All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 3(b), whether by the Calculation Agent or the Trustee shall (in the absence of wilful default, bad faith and manifest error) be binding on the Issuer, the Agent, the Calculation Agent, the Trustee, the other Paying Agents and all Noteholders and Couponholders and (in the absence of bad faith and wilful default) no liability to the Issuer, the Trustee, the Noteholders or the Couponholders shall attach to either the Calculation Agent or the Trustee in connection with the exercise or non-exercise by it of its powers, duties and discretions pursuant to such provisions.
Each Floating Rate Note bears interest from (and including) the Interest Commencement Date at the rate equal to the Rate of Interest and such interest will be payable in arrear on either:
Such interest will be payable in respect of each Interest Period.
If a Business Day Convention is specified in the applicable Final Terms and (x) if there is no numerically corresponding day in the calendar month in which an Interest Payment Date (or other date) should occur or (y) if any Interest Payment Date (or other date) would otherwise fall on a day which is not a Business Day, then, if the Business Day Convention specified is:
(4) the Preceding Business Day Convention, such Interest Payment Date (or other date) shall be brought forward to the immediately preceding Business Day.
In this Condition:
"euro" means the single currency introduced on 1 January 1999 pursuant to the Treaty on the Functioning of the European Union (but, for the avoidance of doubt, excluding any national currency units which are denominations of the euro); and
"Interest Period" means the period from and including an Interest Payment Date (or the Interest Commencement Date) to but excluding the next (or first) Interest Payment Date which may or may not be the same number of months or other period throughout the life of the Notes.
(ii) Rate of Interest
The rate of interest (the "Rate of Interest") payable from time to time in respect of this Note if it is a Floating Rate Note will be determined in the manner specified in the applicable Final Terms.
(iii) ISDA Determination for Floating Rate Notes
Where ISDA Determination is specified in the applicable Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will be the relevant ISDA Rate plus or minus (as indicated in the applicable Final Terms) the Margin (if any). For the purposes of this sub paragraph (iii), "ISDA Rate" for an Interest Period means a rate equal to the Floating Rate that would be determined by the Agent or other person specified in the applicable Final Terms under an interest rate swap transaction if the Agent or that other person were acting as Calculation Agent for that swap transaction under the terms of an agreement incorporating the ISDA Definitions and under which:
For the purposes of this sub paragraph (iii), (a) "ISDA Definitions" means the 2006 ISDA Definitions, as amended and updated as at the Issue Date of the first Tranche of the Notes of the relevant Series, published by the International Swaps and Derivatives Association, Inc. and (b) "Floating Rate", "Calculation Agent", "Floating Rate Option", "Designated Maturity" and "Reset Date" have the meanings given to those terms in the ISDA Definitions.
When this sub paragraph (iii) applies, in respect of each relevant Interest Period:
Where Screen Rate Determination is specified in the applicable Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will, subject as provided below, be either:
(expressed as a percentage rate per annum) for the Reference Rate (being LIBOR, EURIBOR, BBSW, BKBM, SHIBOR, CNH HIBOR or SOR, as specified in the applicable Final Terms) which appears or appear, as the case may be, on the Relevant Screen Page (or any successor or replacement page, section, caption, column or other part of a particular information service) as at the Specified Time (as defined below) on the Interest Determination Date in question (as indicated in the applicable Final Terms) plus or minus (as indicated in the applicable Final Terms) the Margin (if any), all as determined by the Agent or other person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s). If five or more such offered quotations are available on the Relevant Screen Page, the highest (or, if there is more than one such highest quotation, one only of such quotations) and the lowest (or, if there is more than one such lowest quotation, one only of such quotations) shall be disregarded by the Agent or other person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s) for the purpose of determining the arithmetic mean (rounded as provided above) of such offered quotations.
If the Relevant Screen Page is not available or if subparagraph (A) above applies and no such offered quotation appears on the Relevant Screen Page or, if subparagraph (B) above applies and fewer than three such offered quotations appear on the Relevant Screen Page, in each case as at the Specified Time, the Agent or other person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s) shall request each of the Reference Banks (as defined below) to provide the Agent with its offered quotation (expressed as a percentage rate per annum) for deposits in the Specified Currency for the relevant Interest Period, if the Reference Rate is LIBOR, to leading banks in the London inter bank market as at approximately 11.00 a.m. (London time), if the Reference Rate is EURIBOR, to leading banks in the Euro zone inter bank market as at 11.00 a.m. (Brussels time), if the Reference Rate is BBSW, to leading banks in the Sydney inter bank market as at 10.30 a.m. (Sydney time), if the Reference Rate is BKBM, to leading banks in the New Zealand inter bank market at 10.45 a.m. (Auckland and Wellington time), if the Reference Rate is SHIBOR, to leading banks in the Beijing inter bank market at 11.30 a.m. (Beijing time), if the Reference Rate is CNH HIBOR, to leading banks in the Hong Kong inter bank market as at 11.00 a.m. (Hong Kong time), or, if the Reference Rate is SOR, to leading banks in the Singapore inter bank market as at 11.00 a.m. (Singapore time), on the Interest Determination Date in question. If two or more of the Reference Banks provide the Agent or other person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s) with such offered quotations, the Rate of Interest for such Interest Period shall be the arithmetic mean (rounded as provided above) of such offered quotations plus or minus (as appropriate) the Margin (if any), all as determined by the Agent.
If on any Interest Determination Date one only or none of the Reference Banks provides the Agent or other person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s) with such an offered quotation as provided above, the Rate of Interest for the relevant Interest Period shall be the rate per annum which the Agent or other person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s) determines as being the arithmetic mean (rounded as provided above) of the rates, as communicated to (and at the request of) the Agent or other person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s) by the Reference Banks or any two or more of them, at which such banks were offered, at approximately the Specified Time, on the relevant Interest Determination Date, deposits in the Specified Currency for the relevant Interest Period by leading banks in, if the Reference Rate is LIBOR, the London inter bank market, if the Reference Rate is EURIBOR, the Euro zone inter bank market, if the Reference Rate is BBSW, the Sydney inter bank market, if the Reference Rate is BKBM, the New Zealand inter bank market, if the Reference Rate is SHIBOR, the Beijing inter bank market, if the Reference Rate is CNH HIBOR, the Hong Kong inter bank market, or, if the Reference Rate is SOR, the Singapore inter bank market, plus or minus (as appropriate) the Margin (if any) or, if fewer than two of the Reference Banks provide the Agent or other person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s) with such offered rates, the offered rate for deposits in the Specified Currency for the relevant Interest Period, or the arithmetic mean (rounded as provided above) of the offered rates for deposits in the Specified Currency for the relevant Interest Period, at which, at approximately the Specified Time, on the relevant Interest Determination Date, any one or more banks selected by the Agent or other person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s) for the purpose (which bank or banks shall be so selected after consultation with the Issuer and shall not include any bank or banks which in the opinion of the Issuer is not or are not suitable for such purpose) informs the Agent or other person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s) it is quoting to leading banks in, if the Reference Rate is LIBOR, the London inter bank market, if the Reference Rate is EURIBOR, the Euro zone inter bank market, if the Reference Rate is BBSW, the Sydney inter bank market, if the Reference Rate is BKBM, the New Zealand inter bank market, if the Reference Rate is SHIBOR, the Beijing inter bank market, if the Reference Rate is CNH HIBOR, the Hong Kong inter bank market, or, if the Reference Rate is SOR, the Singapore inter bank market, as the case may be, plus or minus (as appropriate) the Margin (if any), provided that, if the Rate of Interest cannot be determined in accordance with the
foregoing provisions of this paragraph, the Rate of Interest shall be determined as at the last preceding Interest Determination Date (though substituting, where a different Margin is to be applied to the relevant Interest Period from that which applied to the last preceding Interest Period, the Margin relating to the relevant Interest Period, in place of the Margin relating to that last preceding Interest Period).
In this paragraph, the expression "Specified Time" means, 11.00 a.m. (London time, in the case of a determination of LIBOR, or Brussels time, in the case of a determination of EURIBOR), or 10.30 a.m. Sydney time (in the case of a determination of BBSW), or 10.45 a.m. New Zealand time (in the case of a determination of BKBM), or 11.30 a.m. Beijing time (in the case of a determination of SHIBOR), or 11.15 a.m. (Hong Kong time) or if, at or around that time it is notified that the fixing will be published at 2.30 p.m. (Hong Kong time), then 2.30 p.m. (in the case of a determination of CNH HIBOR), or 11.00 a.m. Singapore time (in the case of a determination of SOR), "Reference Banks" means, in the case of (A) above, those banks whose offered rates were used to determine such quotation when such quotation last appeared on the Relevant Screen Page and, in the case of (B) above, those banks whose offered quotations last appeared on the Relevant Screen Page when no fewer than three such offered quotations appeared and "Euro-zone" means the region comprised of member states of the European Union that have adopted the euro as the single currency in accordance with the Treaty on European Union.
If the applicable Final Terms specifies a Linear Interpolation as applicable in respect of an Interest Period, the Rate of Interest for such Interest Period shall be calculated by the Agent by straight line linear interpolation by reference to two rates based on the relevant Reference Rate (where Screen Rate Determination is specified hereon as applicable) or the relevant Floating Rate Option (where ISDA Determination is specified hereon as applicable), one of which shall be determined as if the Applicable Maturity were the period of time for which rates are available next shorter than the length of the relevant Interest Period and the other of which shall be determined as if the Applicable Maturity were the period of time for which rates are available next longer than the length of the relevant Interest Period provided however that if there is no rate available for the period of time next shorter or, as the case may be, next longer, then the Calculation Agent shall determine such rate at such time and by reference to such sources as it determines appropriate.
"Applicable Maturity" means: (a) in relation to Screen Rate Determination, the period of time designated in the Reference Rate and, (b) in relation to ISDA Determination, the Designated Maturity.
If the applicable Final Terms specifies a Minimum Rate of Interest for any Interest Period, then the Rate of Interest for such Interest Period determined in accordance with the above provisions shall in no event be less than such Minimum Rate of Interest. Unless otherwise stated in the applicable Final Terms, the Minimum Rate of Interest shall be deemed to be zero.
If the applicable Final Terms specifies a Maximum Rate of Interest for any Interest Period, then the Interest Rate for such Interest Period determined in accordance with the above provisions shall in no event exceed such Maximum Rate of Interest.
The Agent or other person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s) will, at or as soon as practicable after each time at which the Rate of Interest is to be determined determine the Rate of Interest and calculate the amount of interest (the "Interest Amount") payable for the relevant Interest Period. Each Interest Amount shall be calculated by applying the Rate of Interest to:
and, in each case, multiplying such sum by the applicable Day Count Fraction, and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention. Where the Specified Denomination of a Floating Rate Note in definitive form comprises more than one Calculation Amount, the Interest Amount payable in respect of such Note shall be the aggregate of the amounts (determined in the manner provided above) for each Calculation Amount comprising the Specified Denomination without any further rounding.
"Day Count Fraction" means, in respect of the calculation of an amount of interest for any Interest Period in accordance with this Condition 3(c):
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 Interest Period falls;
"Y2" is the year, expressed as a number, in which the day immediately following the last day of the Interest Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of the Interest Period falls;
"M2" is the calendar month, expressed as a number, in which the day immediately following the last day of the Interest Period falls;
"D1" is the first calendar day, expressed as a number, of the Interest Period, unless such number is 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 Interest Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30;
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 Interest Period falls;
"Y2" is the year, expressed as a number, in which the day immediately following the last day of the Interest Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of the Interest Period falls;
"M2" is the calendar month, expressed as a number, in which the day immediately following the last day of the Interest Period falls;
"D1" is the first calendar day, expressed as a number, of the Interest 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 Interest Period, unless such number would be 31, in which case D2 will be 30;
Day Count Fraction =
$$
\frac{[360 \times (Y_2 - Y_1)] + [30 \times (M_2 - M_1)] + (D_2 - D_1)}{360}
$$
"Y1" is the year, expressed as a number, in which the first day of the Interest Period falls;
"Y2" is the year, expressed as a number, in which the day immediately following the last day of the Interest Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of the Interest Period falls;
"M2" is the calendar month, expressed as a number, in which the day immediately following the last day of the Interest Period falls;
"D1" is the first calendar day, expressed as a number, of the Interest 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 Interest Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would be 31, in which case D2 will be 30; and
The Agent (or the person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s)) will cause the Rate of Interest and each Interest Amount for each Interest Period and the relevant Interest Payment Date to be notified to the Issuer and any stock exchange on which the relevant Floating Rate Notes are for the time being listed and notice thereof to be published in accordance with Condition 12 as soon as possible after their determination but in no event later than the fourth London Business Day (where a "London Business Day" means a day (other than Saturday or Sunday) on which banks and foreign exchange markets are open for business in London) thereafter. Each Interest Amount and Interest Payment Date so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) in the event of an extension or shortening of the Interest Period. Any such amendment will be promptly notified to each stock exchange on which the relevant Floating Rate Notes are for the time being listed and to the Noteholders in accordance with Condition 12.
If for any reason the Agent (or the person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s)) defaults in its obligation to determine the Rate of Interest or calculate any Interest Amount in accordance with this Condition 3(c), the Trustee shall determine the Rate of Interest at such rate as, in its absolute discretion (having such regard as it shall think fit to the foregoing provisions in this Condition and to any terms specified in the applicable Final Terms), it shall deem fair and reasonable in all the circumstances or, as the case may be, the Trustee shall calculate the Interest Amount(s) in such manner as it shall deem fair and reasonable in all the circumstances and each such determination or calculation shall be deemed to have been made by the Agent (or the person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and the Interest Amount(s)).
All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 3(c) whether by the Agent (or the person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s)) or the Trustee shall (in the absence of wilful default, bad faith and manifest error) be binding on the Issuer, the Agent (or the person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s)), the Trustee, the other Paying Agents and all Noteholders and Couponholders and (in the absence of bad faith and wilful default) no liability to the Issuer, the Trustee, the Noteholders or the Couponholders shall attach to either the Agent (or the person specified in the applicable Final Terms as the party responsible for calculating the Rate(s) of Interest and Interest Amount(s)) or the Trustee in connection with the exercise or non exercise by it of its powers, duties and discretions pursuant to such provisions.
Each Note (or in the case of the redemption of part only of a Note, that part only of such Note) will cease to bear interest (if any) from the due date for its redemption unless, upon, where applicable, due presentation thereof, payment of principal is improperly withheld or refused. In such event, interest will continue to accrue until whichever is the earlier of:
For the purposes of this Condition 3, references to the Agent in relation to all certificates, communications, opinions, determinations, calculations, quotations, decisions or related actions given, expressed, made or obtained for the purposes of the provisions of this Condition by the Agent shall, in the case of CMU Notes, be deemed to be references to the CMU Lodging and Paying Agent, unless the context otherwise requires.
(a) Method of Payment
Subject as provided below:
All payments are subject in all cases to any applicable fiscal or other laws, regulations and directives in the place of payment or other laws or agreements to which the Issuer or any of the Paying Agents agrees to be subject and the Issuer will not be liable for any taxes or duties of whatever nature imposed or levied by such laws, regulations, directives or agreements, but without prejudice to the provisions of Condition 6.
Payments of principal in respect of definitive Notes (if issued) will (subject as provided below) be made in the manner provided in paragraph (a) above only against presentation and surrender of such definitive Notes, and payments of interest in respect of definitive Notes will (subject as provided below) be made as aforesaid only against presentation and surrender of Coupons, in each case at the specified office of any Paying Agent outside the United States. Payments under paragraph (a) above made, at the option (if any such option is specified under paragraph (a) above) of the bearer of such Note or Coupon, by cheque shall be mailed or delivered to an address outside the United States furnished by such bearer. Subject to any applicable laws and regulations, such payments made by transfer will be made in immediately available funds to an account maintained by the payee with a bank located outside the United States. No payment in respect of any definitive Note or Coupon will be made upon presentation and surrender of such definitive Note or Coupon at any office or agency of the Issuer or any Paying Agent in the United States, nor will any such payment be made by transfer to an account, or by mail to an address, in the United States.
Fixed Rate Notes in definitive form (other than Long Maturity Notes (as defined below)) should be presented for payment together with all unmatured Coupons appertaining thereto (which expression shall for this purpose include Coupons falling to be issued on exchange of matured Talons), failing which the full amount of any missing unmatured Coupon (or, in the case of payment not being made in full, the same proportion of the full amount of such missing unmatured Coupon as the sum so paid bears to the total sum due) will be deducted from the sum due for payment. Each amount of principal so deducted will be paid in the manner mentioned above against surrender of the relevant missing Coupon at any time thereafter but before the expiry of ten years after the Relevant Date (as defined in Condition 6) in respect of such principal (whether or not such Coupon would otherwise have become void under Condition 7) or, if later, five years from the date on which such Coupon would otherwise have become due.
Upon any Fixed Rate Note becoming due and repayable prior to its Maturity Date, all unmatured Talons (if any) appertaining thereto will become void and no further Coupons will be issued in respect thereof.
Upon the date on which any Floating Rate Note, Reset Note or Long Maturity Note in definitive form becomes due and repayable, all unmatured Coupons and Talons (if any) relating thereto (whether or not attached) shall become void and no payment or, as the case may be, exchange for further Coupons shall be made in respect thereof. A "Long Maturity Note" is a Fixed Rate Note (other than a Fixed Rate Note which on issue had a Talon attached) whose nominal amount on issue is less than the aggregate interest payable thereon provided that such Note shall cease to be a Long Maturity Note on the Interest Payment Date on which the aggregate amount of interest remaining to be paid after that date is less than the nominal amount of such Note.
If the due date for redemption of any definitive Note is not an Interest Payment Date, interest (if any) accrued in respect of such Note from (and including) the preceding Interest Payment Date or, as the case may be, the Interest Commencement Date shall be payable only against surrender of the relevant definitive Note.
Payments of principal and interest (if any) in respect of Notes represented by any global Note will (subject as provided below) be made in the manner specified above in relation to definitive Notes or otherwise in the manner specified in the relevant global Note, where applicable, against presentation or surrender, as the case may be, of such global Note at the specified office of any Paying Agent outside the United States. A record of each payment made distinguishing between any payment of principal and any payment of interest, will be made on such global Note either by the Paying Agent to which such global Note is presented for the purpose of making such payment or in the records of (in the case of a global Note representing Notes other than CMU Notes) Euroclear and Clearstream, Luxembourg or (in the case of a global Note representing CMU Notes) the CMU Service.
The holder of a global Note held on behalf of Euroclear and/or Clearstream, Luxembourg shall be the only person entitled to receive payments in respect of Notes represented by such global Note and the Issuer will be discharged by payment to, or to the order of, the holder of such global Note in respect of each amount so paid. Each of the persons shown in the records of Euroclear or Clearstream, Luxembourg as the beneficial holder of a particular nominal amount of Notes represented by such global Note must look solely to Euroclear or Clearstream, Luxembourg, as the case may be, for his share of each payment so made by the Issuer to, or to the order of, the holder of such global Note. No person other than the holder of such global Note shall have any claim against the Issuer in respect of any payments due on that global Note.
The holder of a global Note held by or on behalf of the CMU Operator shall be the only person entitled to receive payments in respect of Notes represented by such global Note and the Issuer will be discharged by payment to, or to the order of, the holder of such global Note in respect of each amount so paid. Payments of principal or interest (if any) in respect of such global Note will be made to the persons for whose account a particular nominal amount of Notes represented by such global Note is credited as being held by the CMU Operator at the relevant time, as notified to the CMU Lodging and Paying Agent by the CMU Operator in a relevant CMU Instrument Position Report or in any other relevant notification by the CMU Operator. No person other than the holder of such global Note shall have any claim against the Issuer in respect of any payments due on that global Note.
Notwithstanding the foregoing, U.S. dollar payments of principal and interest in respect of the Notes will be made at the specified office of any Paying Agent in the United States (which expression, as used in this Condition, means the United States of America (including the States and the District of Columbia, its territories, its possessions and other areas subject to its jurisdiction)) if:
If the date for payment of any amount in respect of any Note or Coupon is not a Payment Date, the holder thereof shall not be entitled to payment of the amount due until the next following Payment Date in the relevant place and shall not be entitled to any interest or other payment in respect of such delay. For these purposes, "Payment Date" means any day which is:
(A) in the case of Notes in definitive form only, the relevant place of presentation;
(B) each Additional Financial Centre specified in the applicable Final Terms; and
Any reference in these Terms and Conditions to principal in respect of the Notes shall be deemed to include, as applicable:
Any reference in these Terms and Conditions to interest in respect of the Notes shall be deemed to include, as applicable, any additional amounts which may be payable with respect to interest under Condition 6 or under any undertaking or covenant given in addition thereto, or in substitution therefor, pursuant to the Trust Deed.
In this Condition, "euro" has the meaning as is given to it in Condition 3(c)(i).
If "CNY Currency Event" is specified in the applicable Final Terms and a CNY Currency Event, as determined by the Issuer acting in good faith, exists on a date for payment of any amount in respect of any Note or Coupon, the Issuer may, in its sole and absolute discretion, take the action described in (i), (ii) and/or (iii) below:
Upon the occurrence of a CNY Currency Event, the Issuer shall give notice as soon as practicable to the Noteholders in accordance with Condition 12 stating the occurrence of the CNY Currency Event, giving details thereof and the action proposed to be taken in relation thereto.
For the purpose of this Condition 4(e) and unless stated otherwise in the applicable Final Terms:
"Alternate Settlement Rate" means the spot rate, determined by the Calculation Agent, between CNY and the Relevant Currency, taking into consideration all available information which the Calculation Agent deems relevant (including, but not limited to, the pricing information obtained from the CNY non-deliverable market outside the PRC and/or the CNY exchange market within the PRC);
"CNY Currency Events" means any one of CNY Illiquidity, CNY Non-Transferability and CNY Inconvertibility;
"CNY Illiquidity" means the general CNY exchange market in Hong Kong becomes illiquid as a result of which the Issuer and/or any of its affiliates cannot obtain sufficient CNY in order to make a payment or perform any other of its obligations under the Notes, as determined by the Calculation Agent;
"CNY Inconvertibility" means the occurrence of any event that makes it impossible, impracticable or illegal for the Issuer and/or any of its affiliates to convert any amount into or from CNY as may be required to be paid by the Issuer under the Notes on any payment date at the general CNY exchange market in Hong Kong, other than where such impossibility, impracticability or illegality is due solely to the failure of that party to comply with any law, rule or regulation enacted by any Governmental Authority (unless such law, rule or regulation is enacted after the Issue Date of the first Tranche of the relevant Series and it is impossible, impracticable or illegal for the Issuer and/or any of its affiliates, due to an event beyond the control of the Issuer or the relevant affiliate, to comply with such law, rule or regulation);
"CNY Non-Transferability" means the occurrence of any event that makes it impossible, impracticable or illegal for the Issuer and/or any of its affiliates to deliver CNY between accounts inside Hong Kong or from an account inside Hong Kong to an account outside Hong Kong (including where the CNY clearing and settlement system for participating banks in Hong Kong is disrupted or suspended), other than where such impossibility, impracticability or illegality is due solely to the failure of the Issuer and/or the relevant affiliate to comply with any law, rule or regulation enacted by any Governmental Authority (unless such law, rule or regulation is enacted after the Issue Date of the first Tranche of the relevant Series and it is impossible, impracticable or illegal for the Issuer and/or any of its affiliates, due to an event beyond the control of the Issuer and/or the relevant affiliate, to comply with such law, rule or regulation);
"Governmental Authority" means any de facto or de jure government (or any agency or instrumentality thereof), court, tribunal, administrative or other governmental authority or any other entity (private or public) charged with the regulation of the financial markets (including the central bank) of Hong Kong; and
"Relevant Currency" means United States dollars, Hong Kong dollars or such other currency as may be specified in the applicable Final Terms.
Unless previously redeemed or purchased and cancelled as specified below, each nominal amount of Ordinary Notes and Tier 2 Notes equal to the Calculation Amount will be redeemed by the Issuer at the Final Redemption Amount specified in the applicable Final Terms in the relevant Specified Currency on the Maturity Date.
The Notes of any Series may (subject, in the case of Tier 2 Notes, to the provisions of Condition 5(k)) be redeemed at the option of the Issuer in whole, but not in part, at any time (in the case of a Note other than a Floating Rate Note) or only on an Interest Payment Date (in the case of a Floating Rate Note) on giving not less than the minimum period nor more than the maximum period of notice specified in the applicable Final Terms to the Trustee and the Agent and, in accordance with Condition 12, the Noteholders (which notice shall be irrevocable and shall specify the date fixed for redemption), at their Early Redemption Amount (as determined in accordance with paragraph (g) below), if:
in each such case, as a result of any change in, or amendment to, the laws or regulations of the United Kingdom or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after the date on which agreement is reached to issue (or, in the case of Tier 2 Notes, on or after the Issue Date of) the first Tranche of Notes of that Series and the effect of which cannot be avoided by the Issuer taking reasonable steps available to it, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such additional amounts as referred to in paragraph (i) above, would be treated as making distributions as referred to in paragraph (ii) above or would not be entitled to have the loss or non-trading deficit set against the profits as referred to in paragraph (iii) above, in each case, were a payment in respect of the Notes of that Series then due. Upon the expiration of such notice, the Issuer shall be bound to redeem such Notes at their Early Redemption Amount.
Before the publication of any notice of redemption pursuant to this Condition 5(b), the Issuer shall deliver to the Trustee a certificate signed by two authorised signatories of the Issuer stating that a condition for redemption pursuant to this Condition 5(b) (i) has occurred and (ii) (in the case of Ordinary Notes only) is continuing as at the date of the certificate, and the Trustee shall accept such certificate as sufficient evidence of such occurrence, in which event it shall be conclusive and binding on the Noteholders.
This Condition 5(b) shall only apply in the case of Tier 2 Notes to the extent not prohibited by CRD IV.
If the applicable Final Terms specify that this Condition 5(c) applies, then, any Series of Tier 2 Notes may, subject to the provisions of Condition 5(k), be redeemed at the option of the Issuer in whole, but not in part, at any time (in the case of a Note other than a Floating Rate Note) or only on an Interest Payment Date (in the case of a Floating Rate Note) on giving not less than the minimum period nor more than the maximum period of notice specified in the applicable Final Terms to the Trustee and the Agent and, in accordance with Condition 12, the Noteholders (which notice shall be irrevocable), if the Issuer determines that a Capital Disqualification Event has occurred.
Upon the expiration of such notice, the Issuer shall be bound to redeem such Notes at their Early Redemption Amount (as determined in accordance with paragraph (g) below).
This Condition 5(c) shall only apply in the case of Tier 2 Notes and only to the extent not prohibited by CRD IV.
As used in this Condition 5(c), a "Capital Disqualification Event" shall be deemed to have occurred if, as a result of any amendment to, or change in the regulatory classification of the Notes of any Series of Tier 2 Notes under, the Capital Regulations (or official interpretation thereof), in any such case becoming effective on or after the Issue Date of the first Tranche of Notes, the whole or any part of the Notes of such Series of Tier 2 Notes are, or are likely to be, excluded from Tier 2 Capital (as defined in the Capital Regulations) of the Issuer and/or the Regulatory Group.
If the Issuer is specified in the applicable Final Terms as having an option to redeem the Notes of any Series, the Issuer may (subject, in the case of Tier 2 Notes, to the provisions of Condition 5(k)), having given not less than the minimum period nor more than the maximum period of notice specified in the applicable Final Terms to the Agent and the Noteholders of that Series in accordance with Condition 12 (which notice shall be irrevocable and shall specify the date fixed for redemption), redeem all, or (if so specified in the Final Terms) some only, of the Notes of such Series then outstanding on the Optional Redemption Date(s) and at the Optional Redemption Amount(s) specified in the applicable Final Terms together, if appropriate, with interest accrued to (but excluding) the relevant Optional Redemption Date(s). Any such redemption must be of a nominal amount not less than the Minimum Redemption Amount or not greater than the Maximum Redemption Amount, both as indicated in the applicable Final Terms. In the case of a partial redemption of Notes of any Series, the Notes to be redeemed ("Redeemed Notes") will be selected individually by lot at such place and in such manner as the Agent may approve and deem fair and reasonable, in the case of Redeemed Notes represented by definitive Notes, and in accordance with the rules of, in the case of Notes other than CMU Notes, Euroclear and/or Clearstream, Luxembourg or, in the case of CMU Notes, the CMU Service (to be reflected in the records of, in the case of Notes other than CMU Notes, Euroclear and Clearstream, Luxembourg or, in the case of CMU Notes, the CMU Service as either a pool factor or a reduction in nominal amount, at their discretion), in the case of Redeemed Notes represented by a global Note, not more than 60 days or such other period specified in the applicable Final Terms prior to the date fixed for redemption (such date of selection being hereinafter called the "Selection Date"). In the case of Redeemed Notes represented by definitive Notes, a list of the serial numbers of such Redeemed Notes will (unless otherwise specified in the applicable Final Terms) be published in accordance with Condition 12 not less than the minimum period and not more than the maximum period specified in the applicable Final Terms prior to the date fixed for redemption. No exchange of the relevant global Note will be permitted during the period from and including the Selection Date to and including the
2 Not applicable to Ordinary Notes.
date fixed for redemption pursuant to this subparagraph (d) and notice to that effect shall (unless otherwise specified in the applicable Final Terms) be given by the Issuer to the Noteholders of the relevant Series in accordance with Condition 12 at least 10 days or such other period specified in the applicable Final Terms prior to the Selection Date.
If the applicable Final Terms specify that this Condition 5(e) applies, then any Series of Ordinary Notes may on or after the date specified in the applicable Final Terms be redeemed at the option of the Issuer in whole, but not in part, at any time (in the case of a Note other than a Floating Rate Note) or only on an Interest Payment Date (in the case of a Floating Rate Note) on giving not less than the minimum period nor more than the maximum period of notice specified in the applicable Final Terms to the Trustee and the Agent and, in accordance with Condition 12, the Noteholders (which notice shall be irrevocable), if the Issuer determines that a Loss Absorption Disqualification Event has occurred and is continuing.
Upon the expiration of such notice, the Issuer shall be bound to redeem such Notes at their Early Redemption Amount (as determined in accordance with paragraph (g) below).
As used in this Condition 5(e), a "Loss Absorption Disqualification Event" shall be deemed to have occurred if:
in each case as such minimum requirements are applicable to the Issuer and/or the Regulatory Group and determined in accordance with, and pursuant to, the relevant Loss Absorption Regulations; provided that in the case of (i) and (ii) above, a Loss Absorption Disqualification Event shall not occur where the exclusion of the Notes from the relevant minimum requirement(s) is due to the remaining maturity of the Notes being less than any period prescribed by any applicable eligibility criteria for such minimum requirements under the relevant Loss Absorption Regulations effective with respect to the Issuer and/or the Regulatory Group on the Issue Date of the first Tranche of the Notes.
"Loss Absorption Regulations" means, at any time, the laws, regulations, requirements, guidelines, rules, standards and policies relating to minimum requirements for own funds and eligible liabilities and/or loss absorbing capacity instruments of the United Kingdom, the PRA, the United Kingdom resolution authority, the Financial Stability Board and/or of the European Parliament or of the Council of the European Union then in effect in the United Kingdom including, without limitation to the generality of the foregoing, any delegated or implementing acts (such as regulatory technical standards) adopted by the European Commission and any regulations, requirements, guidelines, rules,
3 Only applicable to Ordinary Notes issued by RBSG.
standards and policies relating to minimum requirements for own funds and eligible liabilities and/or loss absorbing capacity instruments adopted by the PRA and/or the United Kingdom resolution authority from time to time (whether or not such regulations, requirements, guidelines, rules, standards or policies are applied generally or specifically to the Issuer or to the Regulatory Group (as defined below)).
Before the publication of any notice of redemption pursuant to this Condition 5(e), the Issuer shall deliver to the Trustee a certificate signed by two authorised signatories of the Issuer stating that the condition for redemption pursuant to this Condition 5(e) has occurred and is continuing as at the date of the certificate, and the Trustee shall accept such certificate as sufficient evidence of such occurrence, in which event it shall be conclusive and binding on the Noteholders.
If the Noteholders of any Series are specified in the applicable Final Terms as having an option to redeem, upon the holder of any Note of such Series giving to the Issuer in accordance with Condition 12 not less than the minimum period nor more than the maximum period of notice specified in the applicable Final Terms (which notice shall be irrevocable), the Issuer will, upon the expiry of such notice, redeem, subject to, and in accordance with, the terms specified in the applicable Final Terms, in whole (but not in part), such Note on the Optional Redemption Date (which Optional Redemption Date shall, in the case of a Floating Rate Note be an Interest Payment Date) and at the Optional Redemption Amount specified in the applicable Final Terms together, if appropriate, with interest accrued to (but excluding) the Optional Redemption Date.
If the Note is in definitive form, to exercise the right to require redemption of the Note the holder of the Note must deliver such Note at the specified office of any Paying Agent on any Business Day at any time during normal business hours of such Paying Agent falling within the notice period, accompanied by a duly signed and completed notice of exercise in the form (for the time being current) obtainable from any specified office of any Paying Agent (a "Put Notice") in which the holder must specify a bank account (or, if payment is by cheque, an address) to which payment is to be made under this Condition.
For the purpose of paragraphs (b), (c) and (e) above and Condition 8, the Notes of any Series will be redeemed at the Early Redemption Amount calculated as follows:
4 Not applicable to Tier 2 Notes.
The Issuer may, (subject, in the case of Tier 2 Notes, to the provisions of Condition 5(k)) at any time purchase beneficially or procure others to purchase beneficially for its account Notes of any Series (provided that, in the case of definitive Notes, all unmatured Coupons appertaining thereto are purchased therewith) in the open market, by tender or by private treaty. Notes purchased or otherwise acquired by the Issuer may be held or resold or, at the discretion of the Issuer, surrendered to the Agent for cancellation (together with (in the case of definitive Notes) any unmatured Coupons attached thereto or purchased therewith).
This Condition 5(h) shall apply in the case of Tier 2 Notes to the extent purchases of Tier 2 Notes are not prohibited by CRD IV.
(i) Cancellation
All Notes which are redeemed or purchased or otherwise acquired as aforesaid and surrendered to the Agent for cancellation will forthwith be cancelled (together, in the case of definitive Notes, with all matured Coupons attached thereto or surrendered therewith at the time of redemption) and thereafter may not be re-issued or resold.
If the amount payable in respect of any Zero Coupon Note upon redemption of such Zero Coupon Note pursuant to paragraph (a), (b), (c), (d), (e) or (f) above or upon its becoming due and repayable as provided in Condition 8 is improperly withheld or refused, the amount due and repayable in respect of such Zero Coupon Note shall be the amount calculated as provided in paragraph (g)(iii) above as though the references therein to the date fixed for the redemption or the date upon which such Zero Coupon Note becomes due and payable were replaced by references to the date which is the earlier of:
Tier 2 Notes may only be purchased pursuant to Condition 5(h) or (in the case only of redemption prior to the relevant Maturity Date) redeemed by the Issuer pursuant to Condition 5(b), Condition 5(c) or 5(d), in each case, provided that (except to the extent that the PRA no longer so requires):
(x) the Issuer has given such notice to the PRA as the PRA may then require before it becomes committed to such a purchase or such a redemption and the PRA has granted permission for the Issuer to make such redemption or repurchase and any other requirements of the PRA applicable to such purchases or redemptions at the time have been complied with by the Issuer; and
(y) in respect of any redemption proposed to be made pursuant to Condition 5(b) or 5(c) only, and except to the extent that the PRA no longer so requires, the Issuer may only redeem the Notes before five years after the Issue Date of the first Tranche of such Notes if, in addition to the condition set out in (x) above, the Issuer demonstrates to the satisfaction of the PRA that the circumstance that entitles it to exercise such right of redemption was not reasonably foreseeable as at the Issue Date of the first Tranche of the Notes.
In relation to CMU Notes, references in this Condition 5 to the Agent shall be deemed to be to the CMU Lodging and Paying Agent.
(m) Definitions
As used in this Condition 5:
"Capital Regulations" means, at any time, the laws, regulations, requirements, guidelines and policies relating to capital adequacy of the PRA and/or of the European Parliament or of the Council of the European Union (including, without limitation, as to leverage) then in effect in the United Kingdom including, without limitation to the generality of the foregoing, any delegated or implementing acts (such as regulatory technical standards) adopted by the European Commission and any regulations, requirements, guidelines and policies relating to capital adequacy adopted by the PRA from time to time (whether or not such requirements, guidelines or policies are applied generally or specifically to the Issuer or to the Regulatory Group (as defined below));
"CRD IV" means, taken together, (i) the CRD IV Directive, (ii) the CRD IV Regulation and (iii) the Capital Regulations;
"CRD IV Directive" means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, and any successor directive;
"CRD IV Regulation" means Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms amending Regulation (EU) No. 648/2012, and any successor regulation; and
"Regulatory Group" means RBSG, its subsidiary undertakings, participations, participating interests and any subsidiary undertakings, participations or participating interests held (directly or indirectly) by any of its subsidiary undertakings from time to time and any other undertakings from time to time consolidated with RBSG for regulatory purposes, in each case in accordance with the rules and guidance of the PRA then in effect.
All payments of principal and/or interest in respect of Notes and/or Coupons by or on behalf of the Issuer shall (save as may be provided in the applicable Final Terms) be made without withholding or deduction for, or on account of, any present or future tax, duty, assessment or governmental charge of whatsoever nature imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law. In that event, the Issuer shall pay such additional amounts as will result (after such withholding or deduction) in receipt by the holders of the Notes or Coupons of the sums which would have been receivable (in the absence of such withholding or deduction) by them in respect of their Notes and/or Coupons; except that no such additional amounts shall be payable with respect to any Note or Coupon:
For the avoidance of doubt, any amounts to be paid by the relevant Issuer on the Notes will be paid net of any deduction or withholding imposed or required pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code (the "Code"), as amended, any current or future official interpretations thereof or regulations with respect to such Sections, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (or any law implementing such an intergovernmental agreement) (a "FATCA Withholding Tax"), and the relevant Issuer will not be required to pay additional amounts on account of any FATCA Withholding Tax.
The "Relevant Date" in respect of any payment means the date on which such payment first becomes due or (if the full amount of the moneys payable has not been duly received (in the case of Notes other than CMU Notes) in London by the Agent or the Trustee or (in the case of CMU Notes) in Hong Kong by the CMU Lodging and Paying Agent or the Trustee, in either case on or prior to such due date) the date on which, the full amount of such moneys having been so received, notice to that effect is given to the Noteholders in accordance with Condition 12.
The Notes and Coupons will become void unless claims in respect of principal and/or interest are made within a period of ten years (in the case of principal) and five years (in the case of interest) after the Relevant Date (as defined in Condition 6) therefor. There shall be no prescription period for Talons but there shall not be included in any Coupon sheet issued in exchange for a Talon any Coupon the claim for payment in respect of which would be void pursuant to this Condition 7 or Condition 4(b) or any Talon which would be void pursuant to Condition 4(b).
The Trustee at its discretion may, and if so requested in writing by the holders of at least one fifth in nominal amount of the Ordinary Notes of any Series then outstanding or if so directed by an Extraordinary Resolution of the holders of the Ordinary Notes of any Series then outstanding, shall (subject, in the case of the happening of any of the events mentioned in sub paragraph (ii) below, to the Trustee having certified in writing to the Issuer that the happening of such event is, in its opinion, materially prejudicial to the interests of holders of the Ordinary Notes of that Series), subject to its being indemnified and/or secured and/or prefunded to its satisfaction, give notice to the Issuer that the Ordinary Notes of that Series are, and they shall accordingly immediately become, due and payable if any of the following events occurs and is continuing:
Unless otherwise specified in the applicable Final Terms, Ordinary Notes which become due and repayable pursuant to this paragraph (a) shall be repaid by the Issuer at the relevant Early Redemption Amount specified in Condition 5(g).
At any time after the Ordinary Notes of any Series or any of them shall have become immediately due and repayable and have not been repaid the Trustee may, at its discretion and without further notice, institute such proceedings against the Issuer as it may think fit to enforce repayment thereof together with accrued interest and to enforce the provisions of the Trust Deed, but it shall not be bound to institute any such proceedings unless (x) it shall have been so directed by an Extraordinary Resolution of the holders of Ordinary Notes of such Series or so requested in writing by the holders of at least one-fifth in nominal amount of the Ordinary Notes of such Series then outstanding and (y) it shall have been indemnified and/or secured and/or prefunded to its satisfaction. No holder of Ordinary Notes of any Series or the Coupons relating thereto shall be entitled to proceed against the Issuer unless the Trustee, having become bound so to proceed, fails to do so within a reasonable time and such failure is continuing.
of any obligations) then the Trustee may, subject as provided below, at its discretion and without further notice, bring such proceedings as it may think fit to enforce the obligation in question provided that the Issuer shall not, as a result of the bringing of any such proceedings, be obliged to pay any sum sooner than the same would otherwise have been payable by it. Nothing in this Condition 8(b) shall, however, prevent the Trustee instituting proceedings for the winding-up of the Issuer and/or proving in any Winding Up or Qualifying Procedure of the Issuer in respect of any payment obligations of the Issuer arising from the Tier 2 Notes, the Tier 2 Coupons or the Trust Deed (including any damages awarded for breach of any such obligations).
Should any Note (including any global Note), Coupon or Talon be lost, stolen, mutilated, defaced or destroyed, it may be replaced at the specified office of (in the case of Notes other than CMU Notes) the Agent or (in the case of CMU Notes) the CMU Lodging and Paying Agent, upon payment by the claimant of such costs and expenses as may be incurred in connection therewith and on such terms as to evidence and indemnity as the Issuer may reasonably require. Mutilated or defaced Notes, Coupons or Talons must be surrendered before replacements will be issued.
The names of the initial Agent and the other initial Paying Agents and their initial specified offices are set out below.
The Issuer is entitled, subject to the approval of the Trustee, at any time to vary or terminate the appointment of any Paying Agent and/or appoint additional or other Paying Agents and/or approve any change in the specified office through which any Paying Agent acts, provided that:
In addition, the Issuer shall forthwith appoint a Paying Agent having a specified office in New York City in the circumstances described in the final paragraph of Condition 4(b). Any variation, termination, appointment or change shall only take effect (other than in the case of insolvency, when it shall be of immediate effect) after not less than 30 nor more than 45 days' prior notice thereof shall have been given to the Noteholders in accordance with Condition 12.
In acting under the Agency Agreement, the Agent and the other Paying Agents will act solely as agents of the Issuer and, in certain circumstances specified therein, of the Trustee, and do not assume any obligations or relationships of agency or trust to or with the Noteholders and Couponholders, except that (without affecting the obligations of the Issuer to the Noteholders and Couponholders to repay Notes and pay interest thereon) funds received by the Agent and any other Paying Agent for the payment of any sums due in respect of the Notes shall be held by them in trust for the Noteholders and/or Couponholders until the expiration of the relevant period of prescription under Condition 7. The Agency Agreement contains provisions for the indemnification of the Paying Agents and for relief from responsibility in certain circumstances, and entitles any of them to enter into business transactions with the Issuer without being liable to account to the Noteholders or Couponholders for any resulting profit.
On and after the Interest Payment Date on which the final Coupon comprised in any Coupon sheet matures, the Talon (if any) forming part of such Coupon sheet may (subject to Condition 7) be surrendered at the specified office of (in the case of Notes other than CMU Notes) the Agent, (in the case of CMU Notes) the CMU Lodging and Paying Agent or, in any case, any other Paying Agent outside the United States in exchange for a further Coupon sheet, including (if such further Coupon sheet does not include Coupons to (and including) the final date for the payment of interest due in respect of the Note to which it appertains) a further Talon. Each Talon shall, for the purposes of these Terms and Conditions, be deemed to mature on the Interest Payment Date on which the final Coupon comprised in the relative Coupon sheet matures.
All notices regarding the Notes of any Series shall be validly given if published in a leading English language daily newspaper of general circulation (in the case of Notes other than CMU Notes) in London (which is expected to be the Financial Times) or (in the case of CMU Notes) in Hong Kong (which is expected to be the South China Morning Post). Any such notice will be deemed to have been given on the date of such publication in such leading newspaper or, if published more than once, on the date of the first publication. Couponholders will be deemed for all purposes to have notice of the contents of any notice given to the holders of the Notes of any Series in accordance with this Condition. If the giving of notice as provided above is not practicable, notice will be given in such other manner, and will be deemed to have been given on such date, as the Trustee shall approve.
So long as no definitive Notes are in issue in respect of a particular Series, there may, so long as the global Note(s) for such Series is or are held in its or their entirety on behalf of (in the case of Notes other than CMU Notes) Euroclear and/or Clearstream, Luxembourg or (in the case of CMU Notes) the CMU Service, be substituted for such publication in such newspaper(s) the delivery of the relevant notice to (in the case of Notes other than CMU Notes) Euroclear and/or Clearstream, Luxembourg or (in the case of CMU Notes) to the CMU Lodging and Paying Agent for communication by them to the holders of the Notes, except that so long as the Notes for such Series are listed on the Official List of the UK Listing Authority and admitted to trading on the London Stock Exchange's regulated market and the rules of the UK Listing Authority and the London Stock Exchange so require, the relevant notice shall also be published in a leading newspaper having general circulation in London. Any such notice shall be deemed to have been given to the holders of the Notes on the day on which the said notice was given to (in the case of Notes other than CMU Notes) Euroclear and/or Clearstream, Luxembourg or (in the case of CMU Notes) to the CMU Lodging and Paying Agent.
Notices to be given by any Noteholder shall be in writing and given by lodging the same, together with the relative Note or Notes, with the Agent (in the case of Notes other than CMU Notes) or the CMU Lodging and Paying Agent (in the case of Notes which are CMU Notes). Whilst any Notes (other than CMU Notes) are represented by a global Note, such notice may be given by a Noteholder to the Agent via Euroclear and/or Clearstream, Luxembourg, as the case may be, in such manner as the Agent and Euroclear and/or Clearstream, Luxembourg may approve for this purpose. Whilst any CMU Notes are represented by a global Note, such notice may be given by a Noteholder to the CMU Lodging and Paying Agent via the CMU Service in such manner as the CMU Lodging and Paying Agent and the CMU Service may approve for this purpose.
Save as otherwise provided herein and without prejudice to Conditions 8(a) and 8(b)(v), only the Trustee may pursue the remedies available under the general law or under the Trust Deed to enforce the rights of holders of Notes and Couponholders and no holder of a Note or Couponholder shall be entitled to take proceedings directly against the Issuer unless the Trustee, having become bound to proceed in accordance with the terms of the Trust Deed, fails to do so within a reasonable time and such failure is continuing.
No remedy against the Issuer, other than as referred to in Condition 8(b), shall be available to the Trustee or any Tier 2 Noteholder or Tier 2 Couponholder (i) for the recovery of amounts owing in respect of or arising under the Trust Deed, the Tier 2 Notes or the relative Tier 2 Coupons or (ii) in respect of the breach of any other term or condition or other obligation binding on the Issuer under or in respect of the Trust Deed, the Tier 2 Notes or the relative Tier 2 Coupons.
The Trust Deed contains provisions for convening meetings of Noteholders (or the holders of the Notes of any one or more Series) to consider any matter affecting their interests, including the sanctioning by Extraordinary Resolution of a modification of the Terms and Conditions of the Ordinary and Tier 2 Notes of any one or more Series or the provisions of the Trust Deed. Such a meeting may be convened by the Trustee, the Issuer or the Trustee upon the request of Noteholders holding not less than ten per cent. in nominal amount of the Notes (or, as the case may be, the Notes of the relevant one or more Series) for the time being remaining outstanding. The quorum at any such meeting convened to consider a resolution proposed as an Extraordinary Resolution is two or more persons holding or representing a clear majority in nominal amount of the Notes (or, as the case may be, the Notes of the relevant one or more Series) for the time being outstanding, or at any adjourned meeting two or more persons being or representing Noteholders (or, as the case may be, holders of the Notes of the relevant one or more Series) whatever the nominal amount of the Notes (or, as the case may be, the Notes of the relevant one or more Series) for the time being outstanding so held or represented, except that at any meeting the business of which includes the modification of certain of the Terms and Conditions of the Ordinary and Tier 2 Notes (or, as the case may be, the Notes of the relevant one or more Series) (including postponing the date of maturity of such Notes or any date for payment of interest thereon, reducing or cancelling the amount of principal or the rate of interest payable in respect of such Notes, varying the method of calculating the rate of interest or reducing the minimum or maximum rate of interest on the Notes, altering the currency of payment of such Notes and the Coupons relating thereto or modifying the majority required to pass an Extraordinary Resolution) or certain of the provisions of the Trust Deed, the necessary quorum for passing an Extraordinary Resolution will be two or more persons holding or representing not less than two thirds, or at any adjourned such meeting not less than one third, in nominal amount of the Notes (or, as the case may be, the Notes of the relevant one or more Series) for the time being outstanding. An Extraordinary Resolution in writing or duly passed at any meeting of the Noteholders (or, as the case may be, holders of the Notes of the relevant one or more Series) shall be binding on all the Noteholders (or, as the case may be, holders of the Notes of the relevant one or more Series), whether or not they are present at the meeting, and on all holders of Coupons relating to the relevant Notes.
The Trust Deed provides that a resolution in writing signed by or on behalf of the holders of not less than 75 per cent. of the nominal 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 may consist of several instruments in the like form each executed by or on behalf of one or more Noteholders.
The Trustee may agree, without the consent of the Noteholders or Couponholders (or, as the case may be, the holders of the Notes or Coupons of the relevant one or more Series), to:
Any such modification shall be binding on the Noteholders and the Couponholders (or, as the case may be, the holders of the Notes or Coupons of the relevant one or more Series) and, unless the Trustee agrees otherwise, any such modification shall be notified to the Noteholders (or, as the case may be, the holders of the Notes of the relevant one or more Series) in accordance with Condition 12 as soon as practicable thereafter. No modification of these conditions insofar as it relates to the Terms and Conditions of any Series of Tier 2 Notes shall be effected without prior notification to, and receiving no objection from and/or receiving the consent of, the PRA (in each case solely to the extent then required).
The Trustee may also waive or authorise any breach or proposed breach of the Terms and Conditions of the Notes of any Series or the provisions of the Trust Deed in relation to such Notes which, in its opinion, is not materially prejudicial to the interests of the Noteholders of the relevant Series.
The Trustee may also agree, subject to the conditions set out in the immediately following sentence and to such amendment of the Trust Deed and such other conditions as the Trustee may require, but without the consent of the Noteholders or the Couponholders of the relevant Series of Notes, to the substitution of the Holding Company or of a subsidiary of the Issuer or of a Successor in Business (as defined in the Trust Deed) in place of the Issuer as principal debtor under the Notes and the Coupons of any Series and under the Trust Deed in relation to such Notes and Coupons. Such agreement shall only be granted if, inter alia, the Trustee is satisfied that such substitution is not materially prejudicial to the interests of the Noteholders and the Couponholders of such Series.
No such substitution shall be effected in relation to any Series of Tier 2 Notes without prior notification to, and receiving no objection from and/or receiving the consent of, the PRA (in each case solely to the extent then required).
In connection with the exercise by it of any of its trusts, power, authorities and discretions (including, without limitation, any modification, waiver, authorisation or determination), the Trustee shall have regard to the general interests of the Noteholders of the relevant Series as a class (but shall not have regard to any interests arising from circumstances particular to individual Noteholders or Couponholders whatever their number) and, in particular but without limitation, shall not have regard to the consequences of any such exercise for individual Noteholders or Couponholders of that Series (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political subdivision thereof and the Trustee shall not be entitled to require, nor shall any Noteholder or Couponholder be entitled to claim from the Issuer, the Trustee or any other person any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders or Couponholders except to the extent provided for in Condition 6 (and/or any obligations undertaken in addition thereto or in substitution therefor pursuant to the Trust Deed).
The Issuer shall be at liberty from time to time without the consent of the relevant Noteholders or Couponholders to create and issue further notes having terms and conditions the same as (or the same in all respects save for the Issue Date, Interest Commencement Date and Issue Price), and so that the same shall be consolidated and form a single Series with, the outstanding Notes of a particular Series.
The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility, including provisions relieving it from taking proceedings to enforce repayment unless indemnified and/or secured and/or prefunded to its satisfaction. The Trustee is entitled to enter into business transactions with the Issuer and/or any of its subsidiaries without accounting for any profit resulting therefrom and to act as Trustee for the holders of any other securities issued by the Issuer.
All discretions exercised and calculations and determinations made in respect of the Notes by the Calculation Agent shall be made in its sole and absolute discretion and in good faith and shall (save in the case of manifest error) be final, conclusive and binding on the Issuer, the Agent, the CMU Lodging and Paying Agent, any other Paying Agent, the Trustee, the Noteholders and the Couponholders.
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 Agency Agreement, the Notes and the Coupons, and any non-contractual obligations arising out of or in connection with them, shall be governed by, and construed in accordance with, English law, except that the provisions of (i) Condition 2(a)(ii) (and related provisions of the Trust Deed) relating to set-off of the Ordinary Notes issued by RBSG (if specified in the Final Terms to be applicable) and (ii) Condition 2(b) (and related provisions of the Trust Deed) relating to subordination and set-off of the Tier 2 Notes, are governed by, and shall be construed in accordance with, Scots law.
The Issuer has submitted to the jurisdiction of the English courts in the Trust Deed.
The net proceeds from each issue of Notes will be applied by the relevant Issuer to fund its general banking business. If, in respect of a particular issue, there is a particular identified use of proceeds, this will be stated in the applicable Final Terms.
RBS is the principal operating subsidiary of RBSG and, as at 31 December 2015, accounted for more than 95 per cent. of the consolidated assets and liabilities and more than 95 per cent. of operating loss before tax of RBSG. Accordingly, disclosure below which relates to RBSG and the Group will also be of relevance to RBS and the Issuer Group.
RBSG is a public limited company incorporated in Scotland with registration number SC045551 and was incorporated under Scots law on 25 March 1968. RBSG is the holding company of a large banking and financial services group.
RBS is a public limited company incorporated in Scotland with registration number SC090312 and was incorporated under Scots law on 31 October 1984. RBS is a wholly-owned subsidiary of RBSG.
Headquartered in Edinburgh, the Group operates in the United Kingdom and internationally through its principal subsidiaries, RBS and NatWest. Both RBS and NatWest are major United Kingdom clearing banks. The Group has a diversified customer base and provides a wide range of products and services to personal, commercial and large corporate and institutional customers.
For a description of the governmental, legal or arbitration proceedings that RBSG, RBS and the Group face, see the section entitled "Litigation, investigations and reviews" in the "Notes to the consolidated accounts" at pages 334-346 of the 2015 Annual Report and Accounts of RBSG as incorporated by reference into this Prospectus, as set out in "Documents Incorporated by Reference" on page 21 of this Prospectus.
The directors and the secretary of RBSG and RBS, each of whose business address is RBS Gogarburn, PO Box 1000, Edinburgh EH12 1HQ, United Kingdom, their functions within the Group and their principal activities outside the Group (if any) of significance to the Group are as follows:
| Functions within the | Principal outside activity (if any) of significance | |
|---|---|---|
| Name | Group | to the Group |
| Chairman | ||
| Howard Davies | Chairman | Currently serves as Independent director of |
| Prudential plc and chair of the Risk Committee, | ||
| member of the Regulatory and Compliance | ||
| Advisory Board of Millennium Management LLC, | ||
| Chair of the International Advisory Council of the | ||
| China Securities Regulatory Commission and | ||
| Member of the International Advisory Council of | ||
| the China Banking Regulatory Commission. | ||
| Was Deputy Governor of the Bank of England from | ||
| 1995 to 1997 and Chairman of the UK Financial | ||
| Services Authority from 1997 to 2003. Howard was | ||
| Director of the London School of Economics and | ||
| Political Science from 2003 until May 2011. He is | ||
| also Professor of Practice at the Paris Institute of | ||
| Political Science (Sciences Po). Howard recently | ||
| chaired the UK Airports Commission and is also the |
| Name | Functions within the Group |
Principal outside activity (if any) of significance to the Group |
|---|---|---|
| author of several books on financial subjects. | ||
| Executive Directors | ||
| Ross McEwan | Chief Executive | Formerly group executive for Retail Banking Services and an executive general manager at Commonwealth Bank of Australia. He was previously managing director of First NZ Capital Securities and prior to that was chief executive of National Mutual Life Association of Australasia Ltd / AXA New Zealand Ltd. |
| Ewen Stevenson | Chief Financial Officer | Previously at Credit Suisse for 25 years where he was latterly co-Head of the EMEA Investment Banking Division and Co-Head of the Global Financial Institutions Group. Ewen has over 20 years' experience advising the banking sector while at Credit Suisse. |
| Non-Executive Directors | ||
| Sandy Crombie | Senior Independent Director |
President of the Cockburn Association. Former member and vice-chairman of the Board of Governors of the Royal Conservatoire of Scotland and director of the Association of British Insurers and previous Chairman of Creative Scotland. Formerly group chief executive of Standard Life plc. |
| Alison Davis | — | Currently serves as non-executive director and member of the compensation committee of Unisys Corporation. Currently non-executive director, chair of the compensation committee and member of the audit committee of Diamond Foods Inc. Currently non-executive director and member of the audit committee of Fiserv Inc. and non-executive director and chair of the audit committee of Ooma Inc. Member of the advisory Board of Strategic Global Advisors LLP. Former director of City National Bank and First Data Corporation. Previously chaired the board of LECG Corporation. Former chief financial officer of Barclays Global Investors (now Blackrock) and managing partner of Belvedere Capital. |
| Morten Friis | — | Currently a director of the Harvard Business School Club of Toronto and the Canadian Institute for Advanced Research. Held various roles at Royal |
| Name | Functions within the Group |
Principal outside activity (if any) of significance to the Group |
|---|---|---|
| Bank of Canada and its subsidiaries including Associate Director at Orion Royal Bank, Vice President, Business Banking and Vice President, Financial Institutions. In 1997, he was appointed as Senior Vice President, Group Risk Management and served as the Chief Credit Officer then Chief Risk Officer from 2004 to 2014. Formerly a director of RBC Bank (USA), RBC Dexia Investor Services Trust, RBC Life Insurance Company and Westbury Life Insurance Company. |
||
| Robert Gillespie | — | Currently an independent board director at Ashurst LLP and chairman of the Council at the University of Durham, and Chairman of the Boat Race Company Limited. Director of Social Finance Limited. Previously Chairman of Somerset House Trust. Formerly Director General of the UK Panel on Takeovers and Mergers from 2010 to 2013, as a secondment from Evercore Partners. Former vice chairman of UBS Investment Bank, after holding a number of senior management roles in UBS. He is a non-executive director of Citizens Financial Group, Inc. |
| Penny Hughes | — | Currently a non-executive director and member of the audit and nomination committees of SuperGroup Plc, and non-executive chairman, chair of the nominations committee and member of the audit risk and remuneration committees of the Gym Group plc, Former non-executive director of Cable & Wireless Worldwide PLC, The Gap Inc, Vodafone Group PLC, Reuters Group PLC, Home Retail Group plc and Skandinaviska Enskilda Banken AB. Former President of Coca-Cola Great Britain and Ireland. Previously a non-executive director, chair of the corporate compliance and responsibility committee and member of the audit, nomination and remuneration committees of Wm Morrisons Supermarkets PLC. |
| Brendan Nelson | — | Currently a board member of the Financial Reporting Review Panel and a non-executive director and chairman of the audit committee of BP plc. Former President of the Institute of Chartered Accountants of Scotland. Formerly held various |
| Name | Functions within the Group |
Principal outside activity (if any) of significance to the Group |
|---|---|---|
| positions within KPMG, including global chairman, financial services. |
||
| Baroness Noakes | — | Deputy Chairman of Ofcom. Former Non-executive director of Severn Trent plc, Carpetright plc, the Court of the Bank of England, Hanson, ICI, John Laing and SThree. Former partner at KPMG where she previously headed KPMG's European and International Government practices. In 2000, she was appointed to the House of Lords and served on the Conservative front bench in various roles, including as Shadow Treasury Minister between 2003 and 2010. Past President of the Institute of Chartered Accountants for England and Wales. |
| Mike Rogers | Currently Chief Executive of Liverpool Victoria Group and Non-executive director of the Association of British Insurers. |
|
| Mike joined Barclays in 1986 where he undertook a variety of roles in the UK and overseas across business banking, wealth management and retail banking. Mike was Managing Director of Small Business, Premier Banking and UK Retail Banking. |
||
| Chief Governance Officer and Board |
||
| Counsel | ||
| Aileen Taylor | Company Secretary | — |
The Group has procedures in place to ensure that each board's management of conflicts of interest and its powers for authorising certain conflicts are operating effectively. On appointment, each director is provided with the Group's guidelines for referring conflicts of interest to the board of directors. Each director is required to notify the board of any actual or potential situational or transactional conflicts of interest and to update the board with any changes to the facts and circumstances surrounding such conflicts.
Situational conflicts can be authorised by the board of directors in accordance with the Companies Act 2006 and the relevant Issuer's articles of association. The board of directors considers each request for authorisation on a case by case basis and has the power to impose conditions or limitations on any authorisation granted as part of the process.
Details of all directors' conflicts of interest are recorded in a register which is maintained by the Chief Governance Officer and Board Counsel and reviewed annually by the board of directors.
Except as set out above, no potential conflicts of interest exist between any duties to RBSG or RBS, as the case may be, of the Directors listed above and their private interests and/or other duties.
The comments below are of a general nature and relate to certain United Kingdom tax implications for persons who are the absolute beneficial owners of their Notes and Coupons and may not apply to certain classes of person (such as dealers and persons connected with an Issuer). The comments relate only to withholding tax on payments of interest in respect of the Notes and do not deal with any other United Kingdom taxation implications of acquiring, holding or disposing of Notes. They are not intended to be exhaustive. The comments address the position of such persons under current United Kingdom tax law and published practice of HM Revenue and Customs ("HMRC") (which may not be binding on HMRC). The United Kingdom tax treatment of prospective holders of Notes depends on their individual circumstances and may be subject to change in the future. In addition, prospective holders of Notes should be aware that the particular terms of issue of any series of Notes as specified in the applicable Final Terms may affect the tax treatment of that and other series of Notes. Prospective holders of the Notes who are in any doubt as to their tax position or who may be subject to tax in a jurisdiction other than the United Kingdom should seek independent advice.
Pursuant to the Taxation of Regulatory Capital Securities Regulations 2013 (the "Regulations") payments of interest on Tier 2 Notes may be made without deduction of or withholding on account of United Kingdom income tax provided that such Tier 2 Notes qualify or have qualified as Tier 2 instruments under Article 63 of Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms (the "CRD IV Regulation") and such Tier 2 Notes form or have formed a component of Tier 2 capital for the purposes of the CRD IV Regulation and provided further that there are not arrangements the main purpose, or one of the main purposes, of which is to obtain a tax advantage (as defined in Section 1139 of the Corporation Tax Act 2010) for any person as a result of the application of the Regulations.
Payments of interest made in respect of Non-Tier 2 Notes which carry a right to interest and which are and continue to be listed on a recognised stock exchange (as defined in section 1005 of the Income Tax Act 2007 (the "Act")) 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. Securities will be treated as listed on the London Stock Exchange if they are included in the Official List (within the meaning and in accordance with the provisions of Part 6 of the FSMA) by the United Kingdom Listing Authority and are admitted to trading on the London Stock Exchange. Provided, therefore, that the Non-Tier 2 Notes carry a right to interest and remain so listed, interest on the Non-Tier 2 Notes will be payable without withholding or deduction on account of United Kingdom tax whether or not the relevant Issuer carries on a banking business in the United Kingdom and whether or not the interest is paid in the ordinary course of its business.
RBS is entitled to make payments of interest without deduction or withholding for or on account of United Kingdom income tax provided that it is and continues to be a bank within the meaning of section 991 of the Act and the interest on the Non-Tier 2 Notes (other than Tier 2 Notes to which the Regulations do not apply as a result of there being arrangements the main purpose, or one of the main purposes, of which is to obtain a tax advantage for any person as a result of the application of the Regulations) is and continues to be paid in the ordinary course of its business within the meaning of section 878 of the Act.
Each Issuer is entitled to make payments of interest without deduction or withholding for or on account of United Kingdom income tax if, at the time the relevant payments are made, the Issuer reasonably believes (and any person by or through whom interest on the Non-Tier 2 Notes is paid reasonably believes) that the person beneficially entitled to the income is a company within the charge to United Kingdom corporation tax in respect of the interest or falls within a list of specified entities and bodies (unless HMRC has given a direction that this exemption shall not apply, having reasonable grounds for believing the conditions for this exemption will not be met at the time the payment is made).
Interest on the Non-Tier 2 Notes may also be paid without withholding or deduction on account of United Kingdom tax where such Notes have a maturity of less than 365 days from the date of issue and are not issued under arrangements, the effect of which is to render such Notes part of a borrowing with a total term which is capable of being 365 days or more.
Subject to the following or the availability of any other exemption or relief, in other cases an amount must generally be withheld from payments of interest on Non-Tier 2 Notes that has a United Kingdom source on account of United Kingdom income tax at the basic rate (currently 20 per cent.). However, where an applicable double tax treaty provides for a lower rate of withholding tax (or for no tax to be withheld) in relation to a holder of Non-Tier 2 Notes HMRC can issue a notice to the Issuer to pay interest to the holder of the Non-Tier 2 Notes without deduction of tax (or for the interest to be paid with tax deducted at the rate provided for in the relevant double tax treaty, as applicable).
Payments of interest in respect of Notes may have a United Kingdom source and accordingly may be chargeable to United Kingdom tax by direct assessment even if paid without withholding or deduction.
Where the interest is paid without deduction or withholding on account of United Kingdom tax, the interest will not be chargeable to United Kingdom tax in the hands of a Noteholder who is not resident for tax purposes in the United Kingdom unless that Noteholder carries on a trade, profession or vocation in the United Kingdom in connection with which the interest is received or to which the relevant Notes are attributable (or if the holder of Notes is a company, unless such company carries on a trade in the United Kingdom through a permanent establishment in connection with which the interest is received or the Notes are attributable). There are certain exemptions for interest received by certain categories of agent (such as some brokers and investment managers).
Noteholders should note that the provisions relating to additional amounts set out in Condition 6 of the Terms and Conditions of the Ordinary and Tier 2 Notes would not apply if HMRC sought to assess the person entitled to the relevant interest directly to United Kingdom tax on interest. However, exemption from or reduction of such United Kingdom tax liability might be available for holders of Notes who are not resident in the United Kingdom under an applicable double taxation treaty.
If Notes are issued at a discount to their principal amount, any such discount element is not subject to any United Kingdom withholding tax. If Notes are redeemed at a premium to their principal amount (as opposed to being issued at a discount) then, depending on the circumstances, such premium may constitute a payment of interest for United Kingdom tax purposes and hence be subject to United Kingdom withholding tax rules.
The references to "interest" and "discount" in 1 to 4 above mean "interest" and "discount" as understood in United Kingdom tax law. The statements in 1 to 2 do not take any account of any different definitions of "interest" or "principal" which may prevail under any other law or which may be created by the terms and conditions of the Notes or any related documentation.
On 14 February 2013, the European Commission 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"). However, Estonia has since stated that it will not participate.
The Commission Proposal has 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.
However, the FTT proposal remains subject to negotiation between participating Member States and the scope of any such tax is uncertain. Additional EU Member States may decide to participate. Prospective holders of Notes are advised to seek their own professional advice in relation to the FTT.
Pursuant to certain provisions of the U.S. Internal Revenue Code of 1986, commonly known as FATCA, a "foreign financial institution" may be required to withhold on certain payments it makes ("foreign passthru payments") to persons that fail to meet certain certification, reporting, or related requirements. A number of jurisdictions (including the United Kingdom) have entered into, or have agreed in substance to, intergovernmental agreements with the United States to implement FATCA ("IGAs"), which modify the way in which FATCA applies in their jurisdictions. A foreign financial institution in an IGA jurisdiction would generally not be required to withhold under FATCA or an IGA from payments that it makes. Certain aspects of the application of the FATCA provisions and IGAs to instruments such as the Notes, including whether withholding would ever be required pursuant to FATCA or an IGA with respect to payments on instruments such as the Notes, are uncertain and may be subject to change. Even if withholding would be required pursuant to FATCA or an IGA with respect to payments on instruments such as the Notes, such withholding would not apply prior to 1 January 2019. Holders should consult their own tax advisors regarding how these rules may apply to their investment in the Notes. In the event any withholding would be required pursuant to FATCA or an IGA with respect to payments on the Notes, no person will be required to pay additional amounts as a result of the withholding.
The Dealers have, in an amended and restated programme agreement (the "Programme Agreement") dated 2 April 2015, agreed with the Issuers a basis upon which they or any of them may from time to time agree to purchase Notes. Any such agreement will extend to those matters stated under "Form of the Notes" and "Terms and Conditions of the Ordinary and Tier 2 Notes" above. In the Programme Agreement, the Issuers have agreed to reimburse the Dealers for certain of their expenses in connection with the establishment of the Programme and the issue of Notes under the Programme.
The Notes have not been and will not be registered under 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, or for the account or benefit of, a United States person, except in certain transactions permitted by U.S. tax regulations. Terms used in this paragraph have the meanings given to them by the U.S. Internal Revenue Code of 1986, as amended, and the regulations thereunder. The applicable Final Terms (or Pricing Supplement, in the case of Exempt Notes) will identify whether TEFRA C rules or TEFRA D rules apply or whether TEFRA is not applicable.
Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that, except as permitted by the Programme Agreement, it will not offer, sell or deliver Notes (i) as part of their distribution at any time or (ii) otherwise until 40 days after the completion of the distribution of all Notes of the Tranche of which such Notes are a part, as determined and certified by the relevant Dealer, or, in the case of an issue of Notes on a syndicated basis, the relevant lead manager, within the United States or to, or for the account or benefit of, U.S. persons and it will have sent to each Dealer to which it sells Notes during the distribution compliance period, as defined in Regulation S under the Securities Act, 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. Until 40 days after the commencement of the offering of any identifiable tranche of Notes, an offer or sale of Notes within the United States by any Dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with an available exemption from registration under the Securities Act.
Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that:
(i) in relation to any Notes issued by RBSG which have a maturity of less than one year from the date of issue, (x) it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business and (y) it has not offered or sold and will not offer or sell any Notes other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or as agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the issue of the Notes would otherwise constitute a contravention of section 19 of the FSMA by RBSG as an Issuer;
No prospectus or other disclosure document (as defined in the Australian Corporations Act) in relation to the Programme or any Notes has been, or will be, lodged with the Australian Securities and Investments Commission ("ASIC"). Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that, unless the applicable Final Terms (or Pricing Supplement, in the case of Exempt Notes) (or any other supplement to this Prospectus) otherwise provides, it:
unless
Each Dealer has represented that it understands that the Notes have not been, and will not be, registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended, the "FIEA"). Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it has not offered or sold and 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, except 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.
Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that:
Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that neither it nor any of its affiliates has offered or sold or will offer or sell any of the Notes in the People's Republic of China (excluding Hong Kong, Macau and Taiwan, the "PRC") as part of the initial distribution of the Notes.
This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities in the PRC to any person to whom it is unlawful to make the offer or solicitation in the PRC.
The Issuers do not represent that this Prospectus may be lawfully distributed, or that any Notes may be lawfully offered, in compliance with any applicable registration or other requirements in the PRC, or pursuant to an exemption available thereunder, or assume any responsibility for facilitating any such distribution or offering. In particular, no action has been taken by the Issuers which would permit a public offering of any Notes or distribution of this document in the PRC. Accordingly, the Notes are not being offered or sold within the PRC by means of this Prospectus or any other document. Neither this Prospectus nor any advertisement or other offering material may be distributed or published in the PRC, except under circumstances that will result in compliance with any applicable laws and regulations.
Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that, it has not offered or sold and will not offer or sell, directly or indirectly any Notes to the public in France, and it has not distributed or caused to be distributed and will not distribute or cause to be distributed to the public in France, the Prospectus, the applicable Final Terms (or Pricing Supplement, in the case of Exempt Notes) or any other offering material relating to the Notes and such offers, sales and distributions have been and will be made in France only to persons providing investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers), qualified investors (investisseurs qualifiés) other than individuals acting for their own account, and/or a limited circle of investors (cercle restreint), all as defined in, and in accordance with, articles L.411-1, L.411-2, D.411-1 and D.411-4 of the French Code monétaire et financier.
Each Dealer has acknowledged, and each further Dealer appointed under the Programme will be required to acknowledge, that this Prospectus has not been registered as a prospectus with the Monetary Authority of Singapore under the Securities and Futures Act, Chapter 289 of Singapore (the "Securities and Futures Act"). Accordingly, each Dealer has represented and agreed, and each future Dealer appointed under the Programme will be required to represent and agree, that it has not offered or sold any Notes or caused the Notes to be made the subject of an invitation for subscription or purchase and will not offer or sell any Notes or cause the Notes to be made the subject of an invitation for subscription or purchase, and has not circulated or distributed, nor will it circulate or distribute, this Prospectus or any document or material in connection with the offer or sale, or invitation for subscription or purchase, of any Notes, whether directly or indirectly, to any person in Singapore other than (a) to an institutional investor pursuant to Section 274 of the Securities and Futures Act, (b) to a relevant person pursuant to Section 275(1), or to any person pursuant to Section 275(1A), of the Securities and Futures Act and in accordance with the conditions specified in Section 275 of the Securities and Futures Act or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the Securities and Futures Act.
This Prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this Prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of Notes may not be circulated or distributed, nor may Notes be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the SFA, (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where Notes are subscribed or purchased under Section 275 of the Securities and Futures Act by a relevant person which is:
"securities" (as defined in Section 239(1) of the Securities and Futures Act) of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Notes pursuant to an offer made under Section 275 of the Securities and Futures Act except:
(ii) where no consideration is or will be given for the transfer;
(iii) where the transfer is by operation of law;
Each Dealer has agreed, and each further Dealer appointed under the Programme will be required to agree, to comply with all applicable laws and regulations in force in any jurisdiction in which it purchases, offers, sells or delivers the Notes or possesses or distributes this Prospectus, any other offering material or any Final Terms (or Pricing Supplement, in the case of Exempt Notes) and will obtain any consent, approval or permission required by it for the purchase, offer, sale or delivery by it of the Notes under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes such purchases, offers, sales or deliveries and neither the Issuers nor any other Dealer shall have responsibility therefor.
None of the Issuers, the Dealers and the Trustee represents that Notes may at any time lawfully be sold in compliance with any applicable registration or other requirements in any jurisdiction, or pursuant to any exemption available thereunder, or assumes any responsibility for facilitating such sale.
Final Terms dated [date] The Royal Bank of Scotland Group plc Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes] under the £90,000,000,000 Euro Medium Term Note Programme
[Terms used herein shall be deemed to be defined as such for the purposes of the Conditions set forth in the Prospectus dated [●] 2016 [and the supplemental Prospectus[es] dated [●][and [●]]] which [together] constitute[s] a base prospectus for the purposes of Directive 2003/71/EC (and amendments thereto, including 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 such Prospectus [as so supplemented]. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of these Final Terms and the Prospectus. The Prospectus [and the supplemental Prospectus[es]] [is] [are] available for viewing at [address] [and] [website] and copies may be obtained from [address].]
[Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions (the "Conditions") set forth in the Prospectus dated [original date] which are incorporated by reference in the Prospectus dated [●] 2016 and are attached hereto [and the supplemental Prospectus[es] dated [●][and [●]]]. This document constitutes the Final Terms of the Notes described herein for the purposes of Article 5.4 of Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU) (the "Prospectus Directive") and must be read in conjunction with the Prospectus dated [●] 2016 [and the supplemental Prospectus[es] dated [●][and [●]]], which [together] constitute[s] a base prospectus for the purposes of the Prospectus Directive [and the supplemental Prospectus[es] dated [●][and [●]]]. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of the Conditions, these Final Terms and the Prospectus dated [●] 2016 [and the supplemental Prospectus[es] dated [●][and [●]]]. The Prospectus [and the supplemental Prospectus[es]] are available for viewing at [address] [and] [website] and copies may be obtained from [address].]
| 1 | Issuer: | The Royal Bank of Scotland Group plc |
|---|---|---|
| 2 | [(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 [●] on [the Issue Date/exchange of the Temporary Global Note for interests in the Permanent Global Note, as referred to in paragraph 25 below, which is expected to occur on or about [●]/[other]]/[Not Applicable]] |
|
| 3 | Specified Currency or Currencies: | [●] [CNY Currency Event] [Relevant Currency: USD/HKD/[●]] |
| 4 | Aggregate Nominal Amount: | [●] |
| [(i)] Series: | [●] | |
| [(ii) Tranche: |
[●]] | |
| 5 | Issue Price: | [●] per cent. of the Aggregate Nominal Amount [plus accrued interest from [●]] |
| 6 | (i) Specified Denominations: |
[●] [and integral multiples of [●] in excess thereof up to and including [●]. No notes in definitive form will be issued with a denomination above [●]] |
| (ii) Calculation Amount: |
[●] | |
|---|---|---|
| 7 | [(i)] Issue Date: | [●] |
| [(ii)] Interest Commencement Date: | [●] | |
| 8 | Maturity Date: | [●] |
| 9 | Interest Basis: | [[●] per cent. Fixed Rate] [Reset Notes] [[LIBOR][EURIBOR][BBSW][BKBM][SHIBOR] [CNH HIBOR][SOR] +/– [●] per cent. Floating Rate] [Zero Coupon] |
| 10 | Redemption/Payment Basis: | Subject to any purchase and cancellation or early redemption, the Notes will be redeemed on the Maturity Date at [●] per cent. of their nominal amount |
| 11 | Change of Interest Basis: | [●]/Not Applicable |
| 12 | Put/Call Options: | [Investor Put][Issuer Call] |
| 13 | (i) Status of the Notes: |
[Ordinary Notes]/[Tier 2 Notes] |
| (ii) Set-off: |
Condition 2(a)(ii): [Applicable/Not Applicable] | |
| (iii) [Date [Board] approval for issuance of Notes obtained: |
[●]] |
| 14 | 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 [[in each case,] subject to adjustment in accordance with paragraph 14(vii)] |
|
| (iii) Fixed Coupon Amount[(s)]: |
[[●] per Calculation Amount][Not Applicable] | |
| (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)]/[Actual/365 (Fixed)]/[RBA Bond Basis] |
|
| (vi) Determination Dates: |
[●] in each year | |
| (vii) Business Day Convention: | [Modified Following Business Day Convention [[unadjusted]/[adjusted]]/Not Applicable] |
|
| (viii) Business Centre(s): | [●] | |
| 15 | Reset Note Provisions: | [Applicable/Not Applicable] |
| (i) Initial Rate of Interest: |
[●] per cent. per annum payable in arrear [on each Interest Payment Date] |
|
| (ii) First Margin: |
[+/-][●] per cent. per annum | |
| (iii) Subsequent Margin: |
[[+/-][●] per cent. per annum] [Not Applicable] | |
| (iv) Interest Payment Date(s): |
[●] [and [●]] in each year up to and including the Maturity Date[[in each case,] subject to adjustment in accordance with |
|
| paragraph 15(xv)] | |||
|---|---|---|---|
| (v) | Fixed Coupon Amount up to (but excluding) the First Reset Date: |
[[●] per Calculation Amount][Not Applicable] | |
| (vi) | Broken Amount(s): | [[●] per Calculation Amount payable on the Interest Payment Date falling [in/on] [●]][Not Applicable] |
|
| (vii) First Reset Date: | [●][subject to adjustment in accordance with paragraph 15(xv)] |
||
| (viii) Second Reset Date: | [●]/[Not Applicable][subject to adjustment in accordance with paragraph 15(xv)] |
||
| (ix) | Subsequent Reset Date(s): | [●] [and [●]] [subject to adjustment in accordance with paragraph 15(xv)] |
|
| (x) | Relevant Screen Page: | [●] | |
| (xi) | Mid-Swap Rate: | [Single Mid-Swap Rate/Mean Mid-Swap Rate] | |
| (xii) Mid-Swap Maturity | [●] | ||
| (xiii) Day Count Fraction: | [30/360]/[Actual/Actual (ICMA)]/[Actual/365 (Fixed)]/[RBA Bond Basis] |
||
| (xiv) Determination Dates: | [●] in each year | ||
| (xv) Business Day Convention: | [Modified Following Business Day Convention [[unadjusted]/[adjusted]]/Not Applicable] |
||
| (xvi) Business Centre(s): | [●] | ||
| (xvii) Calculation Agent: | [●] | ||
| 16 | Floating Rate Note Provisions: | [Applicable/Not Applicable] | |
| (i) | Interest Period(s)/Specified Interest Payment Dates: |
[●] | |
| (ii) | Business Day Convention: | [Floating Rate Convention/ Following Business Day Convention/ Modified Following Business Day Convention/ Preceding Business Day Convention] |
|
| (iii) | Business Centre(s): | [●] | |
| (iv) | Manner in which the Rate(s) of Interest is/are to be determined: |
[Screen Rate Determination/ ISDA Determination] | |
| (v) | Party responsible for calculating the Rate(s) of Interest and Interest Amount(s) (if not the Agent or, as the case may be, the CMU Lodging and Paying Agent): |
[●] | |
| (vi) | Screen Rate Determination: | ||
| − Reference Rate: |
[● month] [LIBOR] [EURIBOR] [BBSW] [BKBM] [SHIBOR] [CNH HIBOR] [SOR] |
||
| − Interest Determination Date(s): |
[Second day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in London prior to the start of each Interest Period] |
[First day of each Interest Period]
[Second day on which the TARGET 2 System is open prior to the start of each Interest Period]
[the date falling two Business Days prior to the first day of such Interest Period]
[[●] Business Day[s] prior to the start of each Interest Period]
(vii) ISDA Determination:
| − | Floating Rate Option: | [●] |
|---|---|---|
| --- | ----------------------- | ----- |
| − | Designated Maturity: | [●] |
|---|---|---|
− Reset Date: [●]
(viii) Linear Interpolation: [Not Applicable/Applicable – the Rate of Interest for the [long/short] [first/last] Interest Period shall be calculated using Linear Interpolation]
| (ix) Margin(s): |
[+/-][●] per cent. per annum | |
|---|---|---|
| (x) Minimum Rate of Interest: |
[●] per cent. per annum | |
| (xi) Maximum Rate of Interest: |
[●] per cent. per annum | |
| (xii) Day Count Fraction: | [Actual/Actual or Actual/Actual (ISDA) Actual/365 (Fixed) Actual/365 (Sterling) Actual/360 30/360 or 360/360 or Bond Basis 30E/360 or Eurobond Basis 30E/360 (ISDA) RBA Bond Basis] |
|
| 17 | Zero Coupon Note Provisions: | [Applicable/Not Applicable] |
| (i) Accrual Yield: |
[●] per cent. per annum | |
| (ii) Reference Price: |
[●] | |
| PROVISIONS RELATING TO REDEMPTION | ||
| 18 | Notice periods for Condition 5(b): | Minimum period: [●] days |
| Maximum period: [●] days | ||
| 19 | Redemption for Capital Disqualification Event: |
[Applicable/Not Applicable] |
| Notice periods for Condition 5(c): | [Minimum period: [●] days | |
| Maximum period: [●] days]/[Not Applicable] |
20 Issuer Call: [Applicable/Not Applicable]
(i) Optional Redemption Date(s): [●]
(ii) Optional Redemption Amount(s): [●] per Calculation Amount
(iii) Redeemable in part: [Yes][No]
(iv) If redeemable in part:
84
| (a) | Minimum Redemption Amount: |
[●] | ||
|---|---|---|---|---|
| (b) | Maximum Redemption Amount: |
[●] | ||
| (v) | Notice periods: | Minimum period: [●] days Maximum period: [●] days |
||
| (vi) | Selection Date: | [60 days prior to the date fixed for redemption]/[●] days prior to the date fixed for redemption] |
||
| form: | (vii) Publication of list of serial numbers for Notes in definitive |
[Minimum period: [●] days Maximum period: [●] days] [Not Applicable] |
||
| (viii) Notification of period in relation to exchange of global Note: |
[10 days]/[[●] days] | |||
| 21 | Redemption for Loss Absorption Disqualification Event: |
Condition 5(e): [Applicable from [●]/Not Applicable] | ||
| (i) | Loss Absorption Disqualification Event for partial exclusion: |
[Applicable/Not Applicable] | ||
| (ii) | 5(e): | Notice periods for Condition | [Minimum period: [●] days Maximum period: [●] days] |
|
| 22 | Investor Put: | [Applicable/Not Applicable] | ||
| (i) | Optional Redemption Date(s): | [●] | ||
| (ii) | Optional Redemption Amount(s): |
[●] per Calculation Amount | ||
| (iii) | Notice periods: | Minimum period: [●] days | ||
| Maximum period: [●] days | ||||
| 23 | Final Redemption Amount: | [●] per Calculation Amount | ||
| 24 | Early Redemption Amount payable on redemption (a) for taxation reasons or (b) following the occurrence of a |
[As per Condition 5(g)/[●] per Calculation Amount] |
Capital Disqualification Event (in the case of Tier 2 Notes) or (c) following the occurrence of a Loss Absorption Disqualification Event (in the case of Ordinary Notes) or (d) on an event of
25 Form of Notes:
default:
(a) Form: Bearer Notes: [Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes [on and after the Exchange Date on 60 days' notice given at any time/only upon the occurrence of an Exchange Event]]
[Temporary Global Note exchangeable for Definitive Notes
on and after the Exchange Date]
[Permanent Global Note exchangeable for Definitive Notes [on 60 days' notice given at any time/only upon the occurrence of an Exchange Event/in the limited circumstances set out in the Permanent Global Note]]
[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/[●]]
[TEFRA D/TEFRA C/TEFRA rules not applicable]
[[●] has been extracted from [source]. The Royal Bank of Scotland Group plc (as Issuer) confirms that such information has been accurately reproduced and that, so far as it is aware, and is able to ascertain from information published by [●], no facts have been omitted which would render the reproduced information inaccurate or misleading.]
Signed on behalf of The Royal Bank of Scotland Group plc:
By: ______________________________
Duly authorised
(i) Admission to trading: [Application has been made by the Issuer (or on its behalf) for the Notes to be admitted to trading on the London Stock Exchange's regulated market with effect from [●]]/[Application is expected to be made by the Issuer (or on its behalf) for the Notes to be admitted to trading on the London Stock Exchange's regulated market with effect from [●]] (ii) Estimate of total expenses [●]
2 RATINGS
relating to admission to trading:
Ratings: [The Notes to be issued have not been rated.] [The Notes to be issued [have been rated] [are expected to be rated]: [Standard & Poor's: [●]] [Moody's Investors Service Limited: [●]] [Fitch Ratings Limited: [●]]
["Save as discussed in ["Subscription and Sale"], so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer."] [●]]
[●]]
Indication of yield: [●]
Calculated as [●] on the Issue Date. The yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.
Details of historic [LIBOR/EURIBOR/BBSW/BKBM/SHIBOR/CNH HIBOR/SOR rates] can be obtained from [Reuters].
identification number(s):
| (i) | ISIN: | [●] |
|---|---|---|
| (ii) | Common Code: | [●] |
| (iii) | CMU Instrument Number: | [●] |
| (iv) | Clearing System: | [Euroclear Bank S.A./N.V. and Clearstream Banking, société anonyme/Central Moneymarkets Unit Service] |
| (v) | Any clearing system(s) other than Euroclear Bank S.A./N.V. and Clearstream Banking, société anonyme and the relevant |
[Not Applicable/[●]] |
[Yes] [No]
Final Terms dated [date]
The Royal Bank of Scotland plc
Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes]
under the £90,000,000,000 Euro Medium Term Note Programme
[Terms used herein shall be deemed to be defined as such for the purposes of the Conditions set forth in the Prospectus dated [●] 2016 [and the supplemental Prospectus[es] dated [●][and [●]]] which [together] constitute[s] a base prospectus for the purposes of Directive 2003/71/EC (and amendments thereto, including 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 such Prospectus [as so supplemented]. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of these Final Terms and the Prospectus. The Prospectus [and the supplemental Prospectus[es]] [is] [are] available for viewing at [address] [and] [website] and copies may be obtained from [address].]
[Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions (the "Conditions") set forth in the Prospectus dated [original date] which are incorporated by reference in the Prospectus dated [●] 2016 and are attached hereto [and the supplemental Prospectus[es] dated [●] [and [●]]]. This document constitutes the Final Terms of the Notes described herein for the purposes of Article 5.4 of Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU) (the "Prospectus Directive") and must be read in conjunction with the Prospectus dated [●] 2015 [and the supplemental Prospectus[es] dated [●] [and [●]]], which [together] constitute[s] a base prospectus for the purposes of the Prospectus Directive [and the supplemental Prospectus[es] dated [●][and [●]]]. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of the Conditions, these Final Terms and the Prospectus dated [●] 2016 [and the supplemental Prospectus[es] dated [●] [and [●]]]. The Prospectus [and the supplemental Prospectus[es]] are available for viewing at [address] [and] [website] and copies may be obtained from [address].]
| 1 | Issuer: | The Royal Bank of Scotland plc |
|---|---|---|
| 2 | [(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 [●] on [the Issue Date/exchange of the Temporary Global Note for interests in the Permanent Global Note, as referred to in paragraph 25 below, which is expected to occur on or about [●]/[other]]/[Not Applicable]] |
|
| 3 | Specified Currency or Currencies: | [●] |
| [CNY Currency Event] | ||
| [Relevant Currency: USD/HKD/[●]] | ||
| 4 | Aggregate Nominal Amount: | [●] |
| [(i)] Series: |
[●] | |
| [(ii) Tranche: |
[●]] | |
| 5 | Issue Price: | [●] per cent. of the Aggregate Nominal Amount [plus accrued interest from [●]] |
| 6 | (i) Specified Denominations: |
[●] [and integral multiples of [●] in excess thereof up to |
| and including [●]. No notes in definitive form will be issued with a denomination above [●]] |
||
| (ii) Calculation Amount: |
[●] |
| [(ii)] Interest Commencement Date: |
[●] | |
|---|---|---|
| 8 | Maturity Date: | [●] |
| 9 | Interest Basis: | [[●] per cent. Fixed Rate] [Reset Notes] |
| [[LIBOR][EURIBOR][BBSW][BKBM][SHIBOR] [CNH HIBOR] [SOR] +/– [●] per cent. Floating Rate] |
||
| [Zero Coupon] | ||
| 10 | Redemption/Payment Basis: | Subject to any purchase and cancellation or early redemption, the Notes will be redeemed on the Maturity Date at [●] per cent. of their nominal amount |
| 11 | Change of Interest Basis: | [●]/Not Applicable |
| 12 | Put/Call Options: | [Investor Put] [Issuer Call] |
| 13 | (i) Status of the Notes: |
[Ordinary Notes]/[Tier 2 Notes] |
| (ii) [Date [Board] approval for issuance of Notes obtained: |
[●]] |
| 14 | 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 [[in each case,] subject to adjustment in accordance with paragraph 14(vii)] |
||
| (iii) | Fixed Coupon Amount[(s)]: | [[●] per Calculation Amount][Not Applicable] | ||
| (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)]/[Actual/365(Fixed)]/ [RBA Bond Basis] |
||
| (vi) | Determination Dates: | [●] in each year | ||
| (vii) Business Day Convention: | [Modified Following Business Day Convention [[unadjusted]/[adjusted]]/Not Applicable] |
|||
| (viii)Business Centre(s): | [●] | |||
| 15 | Reset Note Provisions: | [Applicable/Not Applicable] | ||
| (i) | Initial Rate of Interest: | [●] per cent. per annum payable in arrear [on each Interest Payment Date] |
||
| (ii) | First Margin: | [+/-][●] per cent. per annum | ||
| (iii) | Subsequent Margin: | [[+/-][●] per cent. per annum] [Not Applicable] | ||
| (iv) | Interest Payment Date(s): | [●] [and [●]] in each year up to and including the Maturity Date [[in each case,] subject to adjustment in accordance with paragraph 15(xv)] |
| (v) | Fixed Coupon Amount up to (but excluding) the First Reset Date: |
[[●] per Calculation Amount][Not Applicable] | |
|---|---|---|---|
| (vi) | Broken Amount(s): | [[●] per Calculation Amount payable on the Interest Payment Date falling [in/on] [●]][Not Applicable] |
|
| (vii) First Reset Date: | [●][subject to adjustment in accordance with paragraph 15(xv)] |
||
| (viii)Second Reset Date: | [●]/[Not Applicable] [subject to adjustment in accordance with paragraph 15(xv)] |
||
| (ix) | Subsequent Reset Date(s): | [●] [and [●]] [subject to adjustment in accordance with paragraph 15(xv)] |
|
| (x) | Relevant Screen Page: | [●] | |
| (xi) | Mid-Swap Rate: | [Single Mid-Swap Rate/Mean Mid-Swap Rate] | |
| (xii) Mid-Swap Maturity | [●] | ||
| (xiii)Day Count Fraction: | [30/360]/[Actual/Actual(ICMA)]/[Actual/365 (Fixed)]/ [RBA Bond Basis] |
||
| (xiv) Determination Dates: | [●] in each year | ||
| (xv) Business Day Convention: | [Modified Following Business Day Convention [[unadjusted]/[adjusted]]/Not Applicable] |
||
| (xvi) Business Centre(s): | [●] | ||
| (xvii)Calculation Agent: | [●] | ||
| 16 | Floating Rate Note Provisions: | [Applicable/Not Applicable] | |
| (i) | Interest Period(s)/Specified Interest Payment Dates: |
[●] | |
| (ii) | Business Day Convention: | [Floating Rate Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention] |
|
| (iii) | Business Centre(s): | [●] | |
| (iv) | Manner in which the Rate(s) of Interest is/are to be determined: |
[Screen Rate Determination/ISDA Determination] | |
| (v) | Party responsible for calculating the Rate(s) of Interest and Interest Amount(s) (if not the Agent or, as the case may be, the CMU Lodging and Paying Agent): |
[●] | |
| (vi) | Screen Rate Determination: | ||
| − Reference Rate: |
[● month] [LIBOR] [EURIBOR] [BBSW] [BKBM] [SHIBOR] [CNH HIBOR] [SOR] |
||
| − Interest Determination Date(s): |
[Second day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in London prior to the start of each Interest Period] |
||
| [First day of each Interest Period] |
[Second day on which the TARGET 2 System is open prior to the start of each Interest Period]
[the date falling two Business Days prior to the first day of such Interest Period]
[[●] Business Day[s] prior to the start of each Interest Period]
(vii) ISDA Determination: − Floating Rate Option: − Designated Maturity: − Reset Date: [●] [●] [●] (viii) Linear Interpolation: [Not Applicable/Applicable – the Rate of Interest for the [long/short] [first/last] Interest Period shall be calculated using Linear Interpolation] (ix) Margin(s): [+/-][●] per cent. per annum (x) Minimum Rate of Interest: [●] per cent. per annum (xi) Maximum Rate of Interest: [●] per cent. per annum (xii) Day Count Fraction: [Actual/Actual or Actual/Actual (ISDA) Actual/365 (Fixed) Actual/365 (Sterling) Actual/360 30/360 or 360/360 or Bond Basis 30E/360 or Eurobond Basis 30E/360 (ISDA) RBA Bond Basis]
− Relevant Screen Page: [●]
17 Zero Coupon Note Provisions: [Applicable/Not Applicable] (i) Accrual Yield: [●] per cent. per annum (ii) Reference Price: [●]
| 18 | Notice periods for Condition 5(b): | Minimum period: [●] days |
|---|---|---|
| Maximum period: [●] days | ||
| 19 | Redemption for Capital Disqualification Event: |
[Applicable/Not Applicable] |
| Notice periods for Condition 5(c): | [Minimum Period: [●] days | |
| Maximum period: [●] days]/[Not Applicable] | ||
| 20 | Issuer Call: | [Applicable/Not Applicable] |
| (i) Optional Redemption Date(s): |
[●] | |
| (ii) Optional Redemption Amount(s): |
[●] per Calculation Amount | |
| (iii) Redeemable in part: |
[Yes][No] | |
| (iv) If redeemable in part: |
||
| (a) Minimum Redemption |
[●] | |
Amount:
| (b) Maximum Redemption Amount: |
[●] | |
|---|---|---|
| (v) Notice periods: |
Minimum period: [●] days Maximum period: [●] days |
|
| (vi) Selection Date: |
[60 days prior to the date fixed for redemption]/[●] days prior to the date fixed for redemption] |
|
| (vii) Publication of list of serial numbers for Notes in definitive form: |
[Minimum Period: [●] days Maximum Period: [●] days]/[Not Applicable] |
|
| (viii)Notification period in relation to exchange of global Note: |
[10 days]/[[●] days] | |
| 21 | Investor Put: | [Applicable/Not Applicable] |
| (i) Optional Redemption Date(s): |
[●] | |
| (ii) Optional Redemption Amount(s): |
[●] per Calculation Amount | |
| (iii) Notice periods: |
Minimum period: [●] days | |
| Maximum period: [●] days | ||
| 22 | Final Redemption Amount: | [●] per Calculation Amount |
| 23 | Early Redemption Amount payable on redemption (a) for taxation reasons or |
[As per Condition 5(g)/[●] per Calculation Amount] |
(b) following the occurrence of a Capital Disqualification Event (in the case of Tier 2 Notes) or (c) following the occurrence of a Loss Absorption Disqualification Event (in the case of Ordinary Notes) or (d) on an event of
| 24 | Form of Notes: | |
|---|---|---|
default:
| (a) Form: |
Bearer Notes: |
|---|---|
| [Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes [on and after the Exchange Date on 60 days' notice given at any time/only upon the occurrence of an Exchange Event]] |
|
| [Temporary Global Note exchangeable for Definitive Notes on and after the Exchange Date] |
|
| [Permanent Global Note exchangeable for Definitive Notes [on 60 days' notice given at any time/only upon the occurrence of an Exchange Event/in the limited circumstances set out in the Permanent Global Note]] |
|
| (b) NGN: |
[Yes][No] |
| (c) CMU Notes: |
[Yes][No] |
[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/[●]]
27 Whether TEFRA D/TEFRA C rules applicable or TEFRA rules not applicable:
[TEFRA D/TEFRA C/TEFRA rules not applicable]
[[●] has been extracted from [source]. The Royal Bank of Scotland plc confirms that such information has been accurately reproduced and that, so far as it is aware, and is able to ascertain from information published by [●], no facts have been omitted which would render the reproduced information inaccurate or misleading.]
Signed on behalf of The Royal Bank of Scotland plc:
By: ………………………………………………….. Duly authorised
| (i) | Admission to trading: | [Application has been made by the Issuer (or on its behalf) for the Notes to be admitted to trading on the London Stock Exchange's regulated market with effect from [●]]/[Application is expected to be made by the Issuer (or on its behalf) for the Notes to be admitted to trading on the London Stock Exchange's regulated market with effect from [●]] |
|
|---|---|---|---|
| (ii) | Estimate of total expenses relating to admission to trading: |
[●] | |
| 2 | RATINGS | [The Notes to be issued have not been rated.] | |
| Ratings: | [The Notes to be issued [have been rated] [are expected to be rated]: |
||
| [Standard & Poor's: [●]] | |||
| [Moody's Investors Service Limited: [●]] [Fitch | |||
| Ratings Limited: [●] |
["Save as discussed in ["Subscription and Sale"], so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer."]/[●]]
Indication of yield: [●]
Calculated as [●] on the Issue Date.
The yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.
Details of historic [LIBOR/EURIBOR/BBSW/BKBM/SHIBOR/CNH HIBOR/SOR rates] can be obtained from [Reuters].
| (i) | ISIN: | [●] |
|---|---|---|
| (ii) | Common Code: | [●] |
| (iii) | CMU Instrument Number: | [●] |
| (iv) | Clearing System: | [Euroclear Bank S.A./N.V. and Clearstream Banking, société anonyme/Central Moneymarkets Unit Service] |
| (v) | Any clearing system(s) other than Euroclear Bank S.A./N.V. and Clearstream Banking, société anonyme and the relevant identification number(s): |
[Not Applicable/[●]] |
Pricing Supplement dated [date] The Royal Bank of Scotland Group plc Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes] under the £90,000,000,000 Euro Medium Term Note Programme
Set out below is the form of Pricing Supplement which will be completed for each Tranche of Exempt Notes issued by RBSG under the Programme.
NO PROSPECTUS IS REQUIRED IN ACCORDANCE WITH DIRECTIVE 2003/71/EC (AS AMENDED) FOR THE ISSUE OF THE NOTES DESCRIBED BELOW AND THE UNITED KINGDOM LISTING AUTHORITY HAS NEITHER APPROVED NOR REVIEWED INFORMATION CONTAINED HEREIN.
[Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions (the "Conditions") set forth in the Prospectus dated [●] 2016 [and the supplemental Prospectus[es] dated [date] [and [date]]] ([together,] the "Prospectus"). This document constitutes the Pricing Supplement of the Notes described herein and must be read in conjunction with the Prospectus. The full information that has been provided on the Issuer and the offer of the Notes is only available on the basis of the combination of the Pricing Supplement and the Prospectus.]
[The Prospectus [and the supplemental Prospectus(es)] [is][are] available for viewing at [address] [and] [website] and copies may be obtained from [address].]
[The following alternative language applies if the first tranche of an issue which is being increased was issued under a Prospectus with an earlier date:
Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions (the "Conditions") contained in the Trust Deed dated [original date] and set forth in the Prospectus dated [original date] [and the supplemental Prospectus[es] dated [date] [and [date]]] ([together,] the "Prospectus"). This document constitutes the Pricing Supplement of the Notes described herein and must be read in conjunction with the Prospectus dated [●] 2016 [and the supplemental Prospectus[es] dated [date] [and [date]]], save in respect of the Conditions which are extracted from the Prospectus dated [original date] and are attached hereto. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of the Conditions, this Pricing Supplement and the Prospectus.]
[The Prospectus [and the supplemental Prospectus(es)] [is][are] available for viewing at [address] [and] [website] and copies may be obtained from [address].]
[Include whichever of the following apply or specify as "Not Applicable" (N/A). Note that the numbering should remain as set out below, even if "Not Applicable" is indicated for individual paragraphs or subparagraphs. Italics denote guidance for completing the Pricing Supplement.]
| 1 | Issuer: | The Royal Bank of Scotland Group plc |
|---|---|---|
| 2 | [(i)] Series Number: | [●] |
3 Specified Currency or Currencies: [●]
4 Aggregate Nominal Amount: [●] [(i)] Series: [●]
(ii) Calculation Amount: [●]
(If fungible with an existing Series, details of that Series, including the date on which the Notes become fungible).
The Notes will be consolidated and form a single Series with [●] on [the Issue Date/exchange of the Temporary Global Note for interests in the Permanent Global Note, as referred to in paragraph 25 below, which is expected to occur on or about [●]/[other]]/[Not Applicable]]
[CNY Currency Event]
[Relevant Currency: USD/HKD/[●]] [US Dollar Settlement]
(N.B. CNY Currency Event, Relevant Currency and US Dollar Settlement apply to Notes denominated in Renminbi only. A Calculation Agent will also need to be specified for such Notes.)
5 Issue Price: [●] per cent. of the Aggregate Nominal Amount [plus accrued interest from [●]] (in the case of fungible issues only, if applicable)
6 (i) Specified Denominations: [●] [and integral multiples of [●] in excess thereof up to and including [●]. No notes in definitive form will be issued with a denomination above [●]]
(Note – Although RBSG may issue Notes with a denomination of less than €100,000 or equivalent, where multiple denominations above €100,000 or equivalent are being used the following sample wording should be followed:
"[€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].")
(If the Notes have a maturity of less than one year from the date of their issue, the minimum denomination must be £100,000 or its equivalent in any other currency).
(If only one Specified Denomination, insert the Specified Denomination.
If more than one Specified Denomination, insert the highest common factor. Note: There must be a
| common factor in the case of two or more Specified Denominations.) |
||
|---|---|---|
| 7 | [(i)] Issue Date: | [●] |
| [(ii)] Interest Commencement Date: | [●] | |
| 8 | Maturity Date: | [specify date or (for Floating Rate Notes) Interest Payment Date falling in or nearest to the relevant month and year] |
| 9 | Interest Basis: | [[●] per cent. Fixed Rate] [Reset Notes] [[LIBOR][EURIBOR][BBSW][BKBM][SHIBOR] [CNH HIBOR] [SOR] [specify other reference rate] +/– [●] per cent. Floating Rate] [Zero Coupon] [(specify other)] (Further particulars specified below) |
| 10 | Redemption/Payment Basis: | Subject to any purchase and cancellation or early redemption, the Notes will be redeemed on the Maturity Date at [●] per cent. of their nominal amount [(specify other)] |
| 11 | Change of Interest or Redemption/Payment Basis: |
[Specify details of any provision for change of Notes into another interest or redemption/payment basis] |
| 12 | Put/Call Options: | [Investor Put] [Issuer Call] [(Further particulars specified below)] |
| 13 | (i) Status of the Notes: |
[Ordinary Notes]/[Tier 2 Notes] |
| (ii) Set-off: |
Condition 2(a)(ii): [Applicable/Not Applicable] | |
| (iii) [Date [Board] approval for issuance of Notes obtained: |
[●]] (N.B. Only relevant where Board (or similar) authorisation is required for the particular tranche of Notes)] |
|
| PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE | ||
| 14 | Fixed Rate Note Provisions: | [Applicable/Not Applicable] |
(If not applicable, delete the remaining subparagraphs of this paragraph)
(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 [[in each case,] subject to adjustment in accordance with [specify Business Day Convention and any applicable Business Centre(s) for the definition of "Business Day"]]
(iii) Fixed Coupon Amount[(s)]: [[●] per Calculation Amount] [Not Applicable]
(x) Relevant Screen Page: [●]
(xii) Mid-Swap Maturity: [●]
(Applicable to Notes in definitive form)
(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)]/[Actual/365 (Fixed)]/[RBA Bond Basis]/[specify other]
(vi) Determination Dates: [●] in each year (insert regular interest payment dates, ignoring issue date or maturity date in the case of a long or short first or last coupon. N.B. only relevant where Day Count Fraction is Actual/Actual (ICMA))
[Not Applicable/give details]
(viii) Business Day Convention: [Modified Following Business Day Convention [[unadjusted]/[adjusted]]/Not Applicable]
15 Reset Note Provisions: [Applicable/Not Applicable]
(i) Initial Rate of Interest: [●] per cent. per annum payable in arrear [on each Interest Payment Date]
(ii) First Margin: [+/-][●] per cent. per annum
(iii) Subsequent Margin: [[+/-][●] per cent. per annum] [Not Applicable]
(iv) Interest Payment Date(s): [●] [and [●]] in each year up to and including the Maturity Date [[in each case,] subject to adjustment in accordance with [specify Business Day Convention and any applicable Business Centre(s) for the definition of "Business Day"]]
[[●] per Calculation Amount][Not Applicable] (Applicable to Notes in definitive form)
(vi) Broken Amount(s): [[●] per Calculation Amount payable on the Interest Payment Date falling [in/on] [●]][Not Applicable]
(Applicable to Notes in definitive form)
(vii) First Reset Date: [●] [subject to adjustment in accordance with paragraph 15(xv)]
(viii)Second Reset Date: [●]/[Not Applicable] [subject to adjustment in accordance with paragraph 15(xv)]
(ix) Subsequent Reset Date(s): [●] [and [●]][subject to adjustment in accordance with paragraph 15(xv)]
(xi) Mid-Swap Rate: [Single Mid-Swap Rate/Mean Mid-Swap Rate]
(xiii) Day Count Fraction: [30/360]/[Actual/Actual (ICMA)]/[Actual/365 (Fixed)]/[RBA Bond Basis]
(xiv) Determination Dates: [●] in each year (insert regular interest payment dates, ignoring issue date or maturity date in the
(i) Interest Period(s)/Specified Interest Payment Dates:
(iii) Business Centre(s): [●]
case of a long or short first or last coupon. N.B. only relevant where Day Count Fraction is Actual/Actual (ICMA))
(xv) Business Day Convention: [Modified Following Business Day Convention/Not Applicable]
(If not applicable, delete the remaining subparagraphs of this paragraph)
[●]
(ii) Business Day Convention: [Floating Rate Convention/ Following Business Day Convention/ Modified Following Business Day Convention/ Preceding Business Day Convention/specify other]
[Screen Rate Determination/ ISDA Determination/specify other]
[●]
— Interest Determination Date(s): [Second day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in London prior to the start of each Interest Period]
[First day of each Interest Period]
[Second day on which the TARGET 2 System is open prior to the start of each Interest Period]
[the date falling two Business Days prior to the first day of such Interest Period (In respect of the Reference Rate being CNH HIBOR)]
[[●] Business Day[s] prior to the start of each Interest Period]
[specify other]
— Relevant Screen Page: [●] (In the case of EURIBOR, if not Reuters EURIBOR01, ensure it is a page which shows a composite rate or amend the fallback provisions appropriately)
Reset Date: [●]
(x) Minimum Rate of Interest: [●] per cent. per annum
(viii) Linear Interpolation: [Not Applicable/Applicable – the Rate of Interest for the [long/short] [first/last] Interest Period shall be calculated using Linear Interpolation (specify for each short or long interest period)]
(xii) Day Count Fraction: [Actual/Actual or Actual/Actual (ISDA) Actual/365 (Fixed) Actual/365 (Sterling) Actual/360 30/360 or 360/360 or Bond Basis 30E/360 or Eurobond Basis 30E/360 (ISDA) RBA Bond Basis (specify other)]
(xiii) Fall back provisions, rounding provisions, denominator and any other terms relating to the method of calculating interest on Floating Rate Notes, if different from those set out in the Conditions:
[●]
[●]
Minimum period: [●] days Maximum period: [●] days]/[Not Applicable] (N.B. When setting notice periods the Issuer is advised to consider the practicalities of distribution of information through intermediaries, for example, clearing systems and custodians, as well as any other notice requirements which may apply, for example, as between the Issuer and the Agent or Trustee)
20 Issuer Call: [Applicable/Not Applicable]
(If not applicable, delete the remaining sub-
| (iv) | If redeemable in part: | ||
|---|---|---|---|
(ii) Optional Redemption Amount(s) and method, if any, of calculation of such
amount:
paragraphs of this paragraph)
(i) Optional Redemption Date(s): [●]
[●] per Calculation Amount
(iii) Redeemable in part: [Yes][No]
(v) Notice periods: Minimum period: [●] days
Maximum period: [●] days
(N.B. When setting notice periods the Issuer is advised to consider the practicalities of distribution of information through intermediaries, for example, clearing systems and custodians, as well as any other notice requirements which may apply, for example, as between the Issuer and the Agent or Trustee)
(vi) Selection Date: [60 days prior to the date fixed for redemption]/[●] days prior to the date fixed for redemption]
[Minimum period: [●] days Maximum period: [●] days]]
[10 days]/[[●] days]
Condition 5(e): [Applicable from [●]/Not Applicable]
[Applicable/Not Applicable]
Maximum period: [●] days]
22 Investor Put: [Applicable/Not Applicable]
(If not applicable, delete the remaining subparagraphs of this paragraph)
[●] per Calculation Amount
(iii) Notice periods: Minimum period: [●] days Maximum period: [●] days
(N.B. When setting notice periods the Issuer is advised to consider the practicalities of distribution of information through intermediaries, for example, clearing systems and custodians, as well as any other notice requirements which may apply, for example, as
24 Early Redemption Amount payable on redemption (a) for taxation reasons or (b) following the occurrence of a Capital Disqualification Event (in the case of Tier 2 Notes) or (c) following the occurrence of a Loss Absorption Disqualification Event (in the case of Ordinary Notes) or (d) on an event of default:
(a) Form: Bearer Notes:
[Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes [on and after the Exchange Date on 60 days' notice given at any time/only upon the occurrence of an Exchange Event]]
[Temporary Global Note exchangeable for Definitive Notes on and after the Exchange Date]
[Permanent Global Note exchangeable for Definitive Notes [on 60 days' notice given at any time/only upon the occurrence of an Exchange Event/in the limited circumstances set out in the Permanent Global Note]]
[N.B. If Limited Exchange Event applies, insert details and a new form of Permanent Global Note needs to be executed]
(N.B. The exchange upon notice at any time option should not be expressed to be applicable if the Specified Denomination of the Notes in paragraph 6 includes language substantially to the following effect: "[€100,000] and integral multiples of [€1,000] in excess thereof up to and including [€199,000]." Furthermore, such Specified Denomination construction is not permitted in relation to any issue of Notes which is to be represented on issue by a Temporary Global Note exchangeable for Definitive Notes.)
(If the Notes are intended to be eligible collateral for Eurosystem monetary policy and intra-day credit operations, the New Global Note should be used. The New Global Note must be used if it is intended that the Notes be held in a manner which would allow Eurosystem eligibility and a "yes" election is made
between the Issuer and the Agent or Trustee)
23 Final Redemption Amount: [●] per Calculation Amount/specify other/see Appendix]
[As per Condition 5(g)/[●] per Calculation Amount/specify other]
| in the section in Part B under the heading "Operational Information" entitled "Intended to be held in a manner which would allow Eurosystem eligibility".) |
||
|---|---|---|
| (c) CMU Notes: |
[Yes][No] | |
| (If the Notes are intended to be cleared through the Central Moneymarkets Unit Service, CMU Notes should be specified.) |
||
| 26 | Additional Financial Centre(s): | [Not Applicable/[●]] |
| 27 | Talons for future Coupons to be attached to Definitive Notes (and dates on which such Talons mature): |
[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/[●]] |
| 28 | Other final terms or special conditions: (consider if additional risk factors are required) |
[Not Applicable/give details] |
| DISTRIBUTION | ||
| 29 | (i) If syndicated, names and addresses of Managers and underwriting commitments: |
[Not Applicable/give names, addresses and underwriting commitments] |
| (ii) Date of [Syndication] Agreement: |
[●] | |
| (iii) Stabilising Manager(s) (if any): |
[Not Applicable/give name] | |
| 30 | If non-syndicated, name and address of Dealer: | [Not Applicable/give name and address] |
| 31 | [Total commission and concession: | [●] per cent. of the Aggregate Nominal Amount]] |
| 32 | Additional selling restrictions: | [Not Applicable/give details] |
| 33 | Whether TEFRA D/TEFRA C rules applicable or TEFRA rules not applicable |
[TEFRA D/TEFRA C/TEFRA rules not applicable] |
This Pricing Supplement comprises the final terms required for issue [and] [admission to trading on [specify relevant market]] of the Notes described herein pursuant to the £90,000,000,000 Euro Medium Term Note Programme of The Royal Bank of Scotland Group plc and The Royal Bank of Scotland plc.
[[●] has been extracted from [source]. The Royal Bank of Scotland Group plc (as Issuer) confirms that such information has been accurately reproduced and that, so far as it is aware, and is able to ascertain from information published by [●], no facts have been omitted which would render the reproduced information inaccurate or misleading.]
Signed on behalf of The Royal Bank of Scotland Group plc:
By: ______________________________
Duly authorised
| 1 | LISTING | |
|---|---|---|
| Admission to trading: | [Application has been made by the Issuer (or on its behalf) for the Notes to be admitted to trading on [specify relevant market] with effect from [●]] [Not Applicable] |
|
| (Where documenting a fungible issue, indicate that original securities are already admitted to trading.) |
||
| 2 | RATINGS | |
| Ratings: | [The Notes to be issued have not been rated.] | |
| [The Notes to be issued [have been rated] [are expected to be rated]: |
||
| [Standard & Poor's: [●]] | ||
| [Moody's Investors Service Limited: [●]] | ||
| [Fitch Ratings Limited: [●]] |
Include a description of any interest, including conflicting ones, that is material to the issue/offer, detailing the persons involved and the nature of the interest. May be satisfied by the inclusion of the following statement:
["Save as discussed in ["Subscription and Sale"], so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer."] [●]]
[●]
(See "Use of Proceeds" wording in Prospectus – if reasons for offer different from making profit and/or hedging certain risks will need to include those reasons here.)]
Indication of yield: [●]
Calculated as [include details of method of calculation in summary form] [●] on the Issue Date. The yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.]
Details of historic [LIBOR/EURIBOR/BBSW/BKBM/SHIBOR/CNH HIBOR/SOR rates] [repo rates for Renminbi with a maturity of seven days][other] can be obtained from [Reuters].]
| (i) | ISIN: | [●] |
|---|---|---|
| (ii) | Common Code: | [●] |
| (iii) | CMU Instrument Number: | [●] |
| (iv) | Clearing System: | [Euroclear Bank S.A./N.V. and Clearstream Banking, société anonyme/Central Moneymarkets Unit Service] |
| (v) | Any clearing system(s) other than Euroclear Bank S.A./N.V. and |
[Not Applicable/give name(s) and number(s) [and number(s)]] |
Clearstream Banking, société anonyme and the relevant identification number(s):
(vi) Delivery: Delivery [against/free of] payment
[●]/[Not Applicable]
[Note that the designation "yes" simply means that the Notes are intended upon issue to be deposited with one of the international central securities depositaries as common safekeeper and does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend upon the European Central Bank being satisfied that Eurosystem eligibility criteria have been met.] [include this text if "yes" selected in which case the Notes must be issued in NGN form]
[Whilst the designation is specified as "no" at the date of these Final Terms, should the Eurosystem eligibility criteria be amended in the future such that the Notes are capable of meeting them the Notes may then be deposited with one of the ICSDs as common safekeeper. Note that this does not necessarily mean that the Notes will then be recognised as eligible collateral for Eurosystem monetary policy and intra day credit operations by the Eurosystem at any time during their life. Such recognition will depend upon the European Central Bank being satisfied that Eurosystem eligibility criteria have been met.] [include this text if "no" selected]
Set out below is the form of Pricing Supplement which will be completed for each Tranche of Exempt Notes issued by RBS under the Programme.
NO PROSPECTUS IS REQUIRED IN ACCORDANCE WITH DIRECTIVE 2003/71/EC (AS AMENDED) FOR THE ISSUE OF THE NOTES DESCRIBED BELOW AND THE UNITED KINGDOM LISTING AUTHORITY HAS NEITHER APPROVED NOR REVIEWED INFORMATION CONTAINED HEREIN.
[Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions (the "Conditions") set forth in the Prospectus dated [●] 2016 [and the supplemental Prospectus[es] dated [date] [and [date]]] ([together,] the "Prospectus[es]"). This document constitutes the Pricing Supplement of the Notes described herein and must be read in conjunction with the Prospectus. The full information that has been provided on the Issuer and the offer of the Notes is only available on the basis of the combination of the Pricing Supplement and the Prospectus.]
[The Prospectus [and the supplemental Prospectus(s)] [is][are] available for viewing at [address] [and] [website] and copies may be obtained from [address].]
[The following alternative language applies if the first tranche of an issue which is being increased was issued under a Prospectus with an earlier date:
Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions (the "Conditions") contained in the Trust Deed dated [original date] and set forth in the Prospectus dated [original date] [and the supplemental Prospectus[es] dated [date] [and [date]]] ([together,] the "Prospectus"). This document constitutes the Pricing Supplement of the Notes described herein and must be read in conjunction with the Prospectus dated [●] 2016 [and the supplemental Prospectus[es] dated [date] [and [date]]], save in respect of the Conditions which are extracted from the Prospectus dated [original date] and are attached hereto. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of the Conditions, this Pricing Supplement and the Prospectus.]
[The Prospectus [and the supplemental Prospectus(es)] [is][are] available for viewing at [address] [and] [website] and copies may be obtained from [address].]
[Include whichever of the following apply or specify as "Not Applicable" (N/A). Note that the numbering should remain as set out below, even if "Not Applicable" is indicated for individual paragraphs or subparagraphs. Italics denote guidance for completing the Pricing Supplement.]
| 1 | Issuer: | The Royal Bank of Scotland plc |
|---|---|---|
| 2 | [(i)] Series Number: | [●] |
| [(ii) Tranche Number: | [●]] | |
| (If fungible with an existing Series, details of that Series, |
| consolidated and form a single Series: | with [●] on [the Issue Date/exchange of the Temporary Global Note for interests in the Permanent Global Note, as referred to in paragraph 25 below, which is expected to occur on or about [●]/[other]]/[Not Applicable]] |
|
|---|---|---|
| 3 | Specified Currency or Currencies: | [●] |
| [CNY Currency Event] | ||
| [Relevant Currency: USD/HKD/[●]] | ||
| [US Dollar Settlement] | ||
| (N.B. CNY Currency Event, Relevant Currency and US Dollar Settlement apply to Notes denominated in Renminbi only. A Calculation Agent will also need to be specified for such Notes.) |
||
| 4 | Aggregate Nominal Amount: | [●] |
| [(i)] Series: | [●] | |
| [(ii) Tranche: | [●]] | |
| 5 | Issue Price: | [●] per cent. of the Aggregate Nominal Amount [plus accrued interest from [●] (in the case of fungible issues only, if applicable) |
| 6 | (i) Specified Denominations: |
[●] [and integral multiples of [●] in excess thereof up to and including [●]. No notes in definitive form will be issued with a denomination above [●]] |
| (Note – Although RBS may issue Notes with a denomination of less than €100,000 or equivalent, where multiple denominations above €100,000 or equivalent are being used the following sample wording should be followed: |
||
| "[€100,000] and integral multiples of [€1,000] in excess thereof up to and including [€199,000]. No Notes in definitive form will be issued with a denomination above [€199,000].") |
||
| (ii) Calculation Amount: |
[●] | |
| (If only one Specified Denomination, insert the Specified Denomination. |
||
| If more than one Specified Denomination, insert the highest common factor. Note: There must be a common factor in the case of two or more Specified Denominations.) |
||
| 7 | [(i)] Issue Date: | [●] |
| [(ii)] Interest Commencement Date: | [●] | |
| 8 | Maturity Date: | [specify date or (for Floating Rate Notes) Interest Payment Date falling in or nearest to the relevant month |
[(iii) Date on which the Notes will be
including the date on which the Notes become fungible).
The Notes will be consolidated and form a single Series
110
| and year] | |||
|---|---|---|---|
| 9 | Interest Basis: | [[●] per cent. Fixed Rate] [Reset Notes] [[LIBOR][EURIBOR][BBSW][BKBM][SHIBOR] [CNH HIBOR][SOR] [specify other reference rate] +/– [●] per cent. Floating Rate] [Zero Coupon] [(specify other)] (Further particulars specified below) |
|
| 10 | Redemption/Payment Basis: | Subject to any purchase and cancellation or early redemption, the Notes will be redeemed on the Maturity Date at [●] per cent. of their nominal amount [(specify other)] |
|
| 11 | Basis: | Change of Interest or Redemption/Payment | [Specify details of any provision for change of Notes into another interest or redemption/payment basis] |
| 12 | Put/Call Options: | [Investor Put] [Issuer Call] [(Further particulars specified below)] |
|
| 13 | (i) | Status of the Notes: | [Ordinary Notes]/[Tier 2 Notes] |
| (ii) | [Date [Board] approval for issuance of Notes obtained: |
[●]] (N.B. Only relevant where Board (or similar) authorisation is required for the particular tranche of Notes)] |
|
| PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE | |||
| 14 | Fixed Rate Note Provisions: | [Applicable/Not Applicable] | |
| (If not applicable, delete the remaining sub-paragraphs of this paragraph) |
|||
| (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 [[in each case,] subject to adjustment in accordance with [specify Business Day Convention and any applicable Business Centre(s) for the definition of "Business Day"]] |
|
| (iii) | Fixed Coupon Amount[(s)]: | [[●] per Calculation Amount][Not Applicable] | |
| (Applicable to Notes in definitive form) | |||
| (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)]/[Actual/365(Fixed)] /[RBA Bond Basis]/[specify other] |
(vi) Determination Dates: [●] in each year (insert regular interest payment dates, ignoring issue date or maturity date in the case of a long or short first or last coupon. N.B. only relevant where
| (vii) Other terms relating to method of calculating interest for Fixed Rate Notes: |
[Not Applicable/give details] | |
|---|---|---|
| (viii) Business Day Convention: | [Modified Following Business Day Convention [[unadjusted]/[adjusted]]/Not Applicable] |
|
| (ix) Business Centre(s): |
[●] | |
| 15 | Reset Note Provisions: | [Applicable/Not Applicable] |
| (i) Initial Rate of Interest: |
[●] per cent. per annum payable in arrear [on each Interest Payment Date] |
|
| (ii) First Margin: |
[+/-][●] per cent. per annum | |
| (iii) Subsequent Margin: |
[[+/-][●] per cent. per annum] [Not Applicable] | |
| (iv) Interest Payment Date(s): |
[●] [and [●]] in each year up to and including the Maturity Date [[in each case,] subject to adjustment in accordance with [specify Business Day Convention and any applicable Business Centre(s) for the definition of "Business Day"]] |
|
| (v) Fixed Coupon Amount up to (but excluding) the First Reset Date: |
[[●] per Calculation Amount][Not Applicable] (Applicable to Notes in definitive form) |
|
| (vi) Broken Amount(s): |
[[●] per Calculation Amount payable on the Interest Payment Date falling [in/on] [●]][Not Applicable] (Applicable to Notes in definitive form) |
|
| (vii) First Reset Date: | [●] [subject to adjustment in accordance with paragraph 15 (xv)] |
|
| (viii) Second Reset Date: | [●]/[Not Applicable] [subject to adjustment in accordance with paragraph 15(xv)] |
|
| (ix) Subsequent Reset Date(s): |
[●] [and [●]] [subject to adjustment in accordance with paragraph 15(xv)] |
|
| (x) Relevant Screen Page: |
[●] | |
| (xi) Mid-Swap Rate: |
[Single Mid-Swap Rate/Mean Mid-Swap Rate] | |
| (xii) Mid-Swap Maturity: | [●] | |
| (xiii) Day Count Fraction: | [30/360]/[Actual/Actual(ICMA)]/[Actual/365 (Fixed)]/ [RBA Bond Basis] |
|
| (xiv) Determination Dates: | [●] in each year (insert regular interest payment dates, ignoring issue date or maturity date in the case of a long or short first or last coupon. N.B. only relevant where Day Count Fraction is Actual/Actual (ICMA)) |
|
| (xv) Business Day Convention: | [Modified Following Business Day Convention/Not Applicable] |
|
| (xvi) Business Centre(s): | [●] | |
| (xvii) Calculation Agent: | [●] | |
Day Count Fraction is Actual/Actual (ICMA))
| 16 | Floating Rate Note Provisions: | [Applicable/Not Applicable] |
|---|---|---|
(iii) Business Centre(s): [●]
(If not applicable, delete the remaining sub-paragraphs of this paragraph)
[●]
(ii) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention/ specify other]
[Screen Rate Determination/ISDA Determination/specify other]
[●]
− Interest Determination Date(s): [Second day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in London prior to the start of each Interest Period]
[First day of each Interest Period]
[Second day on which the TARGET 2 System is open prior to the start of each Interest Period]
[the date falling two Business Days prior to the first day of such Interest Period (In respect of the Reference Rate being CNH HIBOR)]
[[●] Business Day[s] prior to the start of each Interest Period]
[specify other]
− Relevant Screen Page: [●] (In the case of EURIBOR, if not Reuters EURIBOR01, ensure it is a page which shows a composite rate or amend the fallback provisions appropriately)
(vii) ISDA Determination:
(viii) Linear Interpolation: [Not Applicable/Applicable – the Rate of Interest for the [long/short] [first/last] Interest Period shall be calculated
[●] [●] [●] using Linear Interpolation (specify for each short or long interest period)]
(xii) Day Count Fraction: [Actual/Actual or Actual/Actual (ISDA) Actual/365 (Fixed) Actual/365 (Sterling) Actual/360 30/360 or 360/360 or Bond Basis 30E/360 or Eurobond Basis 30E/360 (ISDA) RBA Bond Basis (specify other)]
(xiii) Fall back provisions, rounding provisions, denominator and any other terms relating to the method of calculating interest on Floating Rate Notes, if different from those set out in the Conditions:
17 Zero Coupon Note Provisions: [Applicable/Not Applicable] (i) Accrual Yield: [●] per cent. per annum (ii) Reference Price: [●] (iii) Any other formula/basis of determining amount payable: [●]
| 18 | Notice periods for Condition 5(b): | Minimum period: [●] days |
|---|---|---|
| Maximum period: [●] days | ||
| (N.B. When setting notice periods the Issuer is advised to consider the practicalities of distribution of information through intermediaries, for example, clearing systems and custodians, as well as any other notice requirements which may apply, for example, as between the Issuer and the Agent or Trustee) |
||
| 19 | Redemption for Capital Disqualification Event: |
[Applicable/Not Applicable] |
| Notice periods for Condition 5(c): | [Minimum period: [●] days | |
| Maximum period: [●] days]/[Not Applicable]] | ||
| 20 | Issuer Call: | [Applicable/Not Applicable] |
| (If not applicable, delete the remaining sub-paragraphs of this paragraph) |
||
| (i) Optional Redemption Date(s): |
[●] |
[●]
114
| (ii) | Optional Redemption Amount(s) and method, if any, of calculation of such amount: |
[●] per Calculation Amount | |
|---|---|---|---|
| (iii) | Redeemable in part: | [Yes][No] | |
| (iv) | If redeemable in part: | ||
| (A) Minimum Redemption Amount: |
[●] | ||
| (B) Maximum Redemption Amount: |
[●] | ||
| (v) | Notice periods: | Minimum period: [●] days | |
| Maximum period: [●] days | |||
| (N.B. When setting notice periods the Issuer is advised to consider the practicalities of distribution of information through intermediaries, for example, clearing systems and custodians, as well as any other notice requirements which may apply, for example, as between the Issuer and the Agent or Trustee) |
|||
| (vi) | Selection Date: | [60 days prior to the date fixed for redemption]/[●] days prior to the date fixed for redemption] |
|
| (vii) Publication of list of serial numbers for | [Minimum period: [●] days | ||
| Notes in definitive form: | Maximum period: [●] days]] | ||
| (viii) Notification period in relation to exchange of global Note: |
[10 days]/[[●] days] | ||
| 21 | Investor Put: | [Applicable/Not Applicable] | |
| (If not applicable, delete the remaining sub-paragraphs of this paragraph) |
|||
| (i) | Optional Redemption Date(s): | [●] | |
| (ii) | Optional Redemption Amount(s) and method, if any, of calculation of such amount: |
[●] per Calculation Amount | |
| (iii) | Notice periods: | Minimum period: [●] days | |
| Maximum period: [●] days | |||
| (N.B. When setting notice periods the Issuer is advised to consider the practicalities of distribution of information through intermediaries, for example, clearing systems and custodians, as well as any other notice requirements which may apply, for example, as between the Issuer and the Agent or Trustee) |
|||
| 22 | Final Redemption Amount: | [[●] per Calculation Amount/specify other/see Appendix] | |
| 23 | Early | Redemption Amount payable on redemption (a) for taxation reasons or (b) |
[As per Condition 5(g)/[●] per Calculation Amount/specify other] |
115
following the occurrence of a Capital Disqualification Event (in the case of Tier 2 Notes) or (c) following the occurrence of a Loss Absorption Disqualification Event (in the case of Ordinary Notes) or (d) on an event of default:
24 Form of Notes:
(a) Form: Bearer Notes:
[Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes [on and after the Exchange Date on 60 days' notice given at any time/only upon the occurrence of an Exchange Event]]
[Temporary Global Note exchangeable for Definitive Notes on and after the Exchange Date]
[Permanent Global Note exchangeable for Definitive Notes [on 60 days' notice given at any time/only upon the occurrence of an Exchange Event/in the limited circumstances set out in the Permanent Global Note]]
[N.B. If Limited Exchange Event applies, insert details and a new form of Permanent Global Note needs to be executed]
(N.B. The exchange upon notice at any time option should not be expressed to be applicable if the Specified Denomination of the Notes in paragraph 6 includes language substantially to the following effect: "[€100,000] and integral multiples of [€1,000] in excess thereof up to and including [€199,000]." Furthermore, such Specified Denomination construction is not permitted in relation to any issue of Notes which is to be represented on issue by a Temporary Global Note exchangeable for Definitive Notes.)
(If the Notes are intended to be eligible collateral for Eurosystem monetary policy and intra-day credit operations, the New Global Note should be used. The New Global Note must be used if it is intended that the Notes be held in a manner which would allow Eurosystem eligibility and a "yes" election is made in the section in Part B under the heading "Operational Information" entitled "Intended to be held in a manner which would allow Eurosystem eligibility".)
(b) NGN: [Yes][No]
| (c) CMU Notes: |
[Yes][No] | |
|---|---|---|
| (If the Notes are intended to be cleared through the Central Moneymarkets Unit Service, CMU Notes should be specified.) |
||
| 25 | Additional Financial Centre(s): | [Not Applicable/[●]] |
| 26 | Talons for future Coupons to be attached to Definitive Notes (and dates on which such Talons mature): |
[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/[●]] |
| 27 | Other final terms or special conditions: | [Not Applicable/give details] |
| (consider if additional risk factors are required) |
||
| DISTRIBUTION | ||
| 28 | (i) If syndicated, names and addresses of Managers and underwriting commitments: |
[Not Applicable/give names, addresses and underwriting commitments] |
| (ii) Date of [Syndication] Agreement: |
[●] | |
| (iii) Stabilising Manager(s) (if any): |
[Not Applicable/give name] | |
| 29 | If non-syndicated, name and address of Dealer: |
[Not Applicable/give name and address] |
| 30 | [Total commission and concession: | [●] per cent. of the Aggregate Nominal Amount]] |
| 31 | Additional selling restrictions: | [Not Applicable/give details] |
| 32 | Whether TEFRA D/TEFRA C rules applicable or TEFRA rules not applicable |
[TEFRA D/TEFRA C/TEFRA rules not applicable] |
This Pricing Supplement comprises the final terms required for issue [and] [admission to trading on [specify relevant market]] of the Notes described herein pursuant to the £90,000,000,000 Euro Medium Term Note Programme of The Royal Bank of Scotland Group plc and The Royal Bank of Scotland plc.
[[●] has been extracted from [source]. The Royal Bank of Scotland plc confirms that such information has been accurately reproduced and that, so far as it is aware, and is able to ascertain from information published by [●], no facts have been omitted which would render the reproduced information inaccurate or misleading.]
Signed on behalf of The Royal Bank of Scotland plc:
By: ………………………………………………….. Duly authorised
| 1 | LISTING | |
|---|---|---|
| Admission to trading: | [Application has been made by the Issuer (or on its behalf) for the Notes to be admitted to trading on [specify relevant market] with effect from [●]] [Not Applicable] |
|
| (Where documenting a fungible issue, indicate that original securities are already admitted to trading.) |
||
| 2 | RATINGS | [The Notes to be issued have not been rated.] |
| Ratings: | [The Notes to be issued [have been rated] [are expected to be rated]: |
|
| [Standard & Poor's: [●]] | ||
| [Moody's Investors Service Limited: [●]] [Fitch Ratings Limited: [●]] |
Include a description of any interest, including conflicting ones, that is material to the issue/offer, detailing the persons involved and the nature of the interest. May be satisfied by the inclusion of the following statement:
["Save as discussed in ["Subscription and Sale"], so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer."] [●]]
(See "Use of Proceeds" wording in Prospectus – if reasons for offer different from making profit and/or hedging certain risks will need to include those reasons here.)]
Indication of yield: [●]
Calculated as [●] [include details of method of calculation in summary form] on the Issue Date.
The yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.]
Details of historic [LIBOR/EURIBOR/BBSW/BKBM/SHIBOR/CNH HIBOR/SOR rates] [repo rates for Renminbi with a maturity of seven days] [other] can be obtained from [Reuters].]
(i) ISIN: [●] (ii) Common Code: [●] (iii) CMU Instrument Number: [●]
(iv) Clearing System: [Euroclear Bank S.A./N.V. and Clearstream Banking,
société anonyme/Central Moneymarkets Unit Service]
[Not Applicable/give name(s) and number(s) [and number(s)]]
(vi) Delivery: Delivery [against/free of] payment
[●]/[Not Applicable]
[Note that the designation "yes" simply means that the Notes are intended upon issue to be deposited with one of the international central securities depositaries as common safekeeper and does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend upon the European Central Bank being satisfied that Eurosystem eligibility criteria have been met.] [include this text if "yes" selected in which case the Notes must be issued in NGN form]
[Whilst the designation is specified as "no" at the date of these Final Terms, should the Eurosystem eligibility criteria be amended in the future such that the Notes are capable of meeting them the Notes may then be deposited with one of the ICSDs as common safekeeper. Note that this does not necessarily mean that the Notes will then be recognised as eligible collateral for Eurosystem monetary policy and intra day credit operations by the Eurosystem at any time during their life. Such recognition will depend upon the European Central Bank being satisfied that Eurosystem eligibility criteria have been met.] [include this text if "no" selected]
The establishment and/or updates of the Programme and/or the issue of Notes under the Programme have been duly authorised by resolutions of the Board of Directors of Royal Bank dated 27 October 1993, 25 January 1995, 24 January 1996, 22 January 1997, 28 January 1998, 27 January 1999, 26 January 2000, 31 January 2001, 20 February 2002, 30 March 2005, 29 March 2006, 28 March 2007, 23 April 2008, 29 April 2009 and 15 December 2009 and by resolutions of an authorised committee of the Board of Directors of Royal Bank dated 22 February 1994, 14 February 1995, 12 February 1996, 11 February 1997, 13 February 1998, 11 February 1999, 15 April 1999, 28 July 1999, 22 December 1999, 10 February 2000, 21 February 2000, 28 March 2001, 28 March 2002, 26 March 2003, 19 April 2004, 29 April 2005, 9 August 2005, 28 June 2006, 22 May 2007, 12 June 2008 and 15 June 2009. On 15 December 2009, the Board of Directors of Royal Bank approved the appointment of a committee to approve the establishment of, and/or updates to, and/or issuance of, notes under certain debt issuance programmes of the Royal Bank. On 8 February 2010, that committee established a sub-committee in relation to the Programme which authorised the update of the Programme on 8 June 2010, 6 June 2011, 22 February 2012, 19 March 2013, 5 March 2014, 17 March 2015 and 7 March 2016.
The addition of RBSG as an Issuer and/or the updates of the Programme and/or the issue of Notes under the Programme have been duly authorised by a resolution of the Board of Directors of RBSG dated 31 March 2004, 30 March 2005, 29 March 2006, 28 March 2007, 23 April 2008, 29 April 2009, 15 December 2009 and 20 January 2010 and by resolutions of an authorised committee of the Board of Directors of RBSG dated 19 April 2004, 29 April 2005, 9 August 2005, 28 June 2006, 22 May 2007, 12 June 2008 and 15 June 2009. On 15 December 2009 and 20 January 2010, the Board of Directors of RBSG approved the appointment of a committee to approve the establishment of, and/or updates to, and/or issuance of, notes under certain debt issuance programmes of RBSG. On 8 February 2010, that committee established a sub-committee in relation to the Programme which authorised the update of the Programme on 8 June 2010, 6 June 2011, 22 February 2012, 19 March 2013, 5 March 2014, 17 March 2015 and 7 March 2016.
Notes which are admitted to the Official List will be expressed as a percentage of their nominal amount (excluding accrued interest). It is expected that each Tranche of Notes which is to be admitted to the Official List and to trading on the Market will be admitted separately as and when issued, upon submission to the UK Listing Authority and to the Market of the relevant Final Terms, subject only to the issue of the Notes of that Tranche. The listing of the Programme in respect of such Notes is expected to be granted on or about 10 March 2016.
The issue price and amount of the relevant Notes will be determined before filing of the applicable Final Terms of each Tranche, based on prevailing market conditions.
From the date hereof, so long as any of the Notes remains outstanding and throughout the life of the Programme, copies of the following documents will, when available, be available during usual business hours on a weekday (Saturdays, Sundays and public holidays excepted) for inspection at the principal office of each Issuer at RBS Gogarburn, PO Box 1000, Edinburgh EH12 1HQ:
A Paying Agent will be maintained in London throughout the life of the Programme.
Unless otherwise stated in the applicable Final Terms, the relevant Issuer does not intend to provide postissuance information in connection with any issue of Notes.
Other than as incorporated by reference into the section entitled "Description of the Issuers – Legal Proceedings" on page 67 of this Prospectus, there are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Issuers are aware), which may have or have had during the 12 months preceding the date of this Prospectus, a significant effect on the financial position or profitability of the RBSG, RBS, the Group and/or, as the case may be, the Issuer Group.
There has been no significant change in the trading or financial position of the Group taken as a whole since 31 December 2015 (the end of the last financial period for which the latest audited financial information has been published).
There has been no material adverse change in the prospects of RBSG since 31 December 2015 (the last date to which the latest audited published financial information of the Group was prepared).
Save in relation to matters disclosed in the 2015 Annual Report and Accounts of RBSG, the completion of the divestment by RBSG of its investment in Citizens Financial Group ("CFG") and the deconsolidation of CFG from the Issuer Group for accounting and regulatory reporting purposes, and save for the matters set out below, there has been no significant change in the financial position of the Issuer Group taken as a whole since 30 June 2015 (the end of the last financial period for which the latest unaudited interim financial information has been published).
As disclosed in the 2015 Annual Report and Accounts of RBSG: (i) the Group has revised its pension accounting policy (see pages 7, 267 and 268 of the 2015 Annual Report and Accounts of RBSG); (ii) an additional provision by the Group of \$2.2 billion (£1.5 billion) in relation to various US residential mortgagebacked securities litigation claims has been made; and (iii) an additional provision by the Group of £500 million in relation to payment protection insurance in the context of the recent FCA consultation paper CP15/39 has been made. The aforementioned matters have the same impact on the consolidated results and financial position of the Issuer Group.
Save in relation to the completion of the divestment by RBSG of its investment in CFG and the deconsolidation of CFG from the Issuer Group for accounting and regulatory reporting purposes, there has been no material adverse change in the prospects of RBS since 31 December 2014 (the last date to which the latest audited published financial information of the Issuer Group was prepared).
The consolidated financial statements of RBSG for the years ended 31 December 2015 and 2014 have been audited by Deloitte LLP, Chartered Accountants (authorised and regulated by the Financial Conduct Authority for designated investment business), whose address is 2 New Street Square, London EC4A 3BZ. Deloitte LLP is affiliated to the Institute of Chartered Accountants of England and Wales (the "ICAEW") and all partners of Deloitte LLP have a practising certificate with the ICAEW.
The financial information incorporated by reference in this Prospectus in relation to RBSG does not constitute RBSG's statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the years ended 31 December 2015 and 31 December 2014 to which the financial information in this Prospectus relates have been, or (in the case of the year ended 31 December 2015) will be, delivered to the Registrar of Companies in Scotland.
Deloitte LLP has reported on such statutory accounts and such reports in respect of the years ended 31 December 2014 and 31 December 2015 were unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.
RBSG does not produce unconsolidated financial statements.
The consolidated financial statements of RBS for the years ended 31 December 2014 and 2013 have been audited by Deloitte LLP, Chartered Accountants (authorised and regulated by the Financial Conduct Authority for designated investment business), whose address is 2 New Street Square, London EC4A 3BZ. Deloitte LLP is affiliated to the ICAEW and all partners of Deloitte LLP have a practising certificate with the ICAEW.
The financial information incorporated by reference in this Prospectus in relation to RBS does not constitute the RBS's statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the years ended 31 December 2014 and 31 December 2013 to which the financial information in this Prospectus relates have been delivered to the Registrar of Companies in Scotland.
Deloitte LLP has reported on such statutory accounts and such reports in respect of the years ended 31 December 2013 and 31 December 2014 were unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.
RBS does not produce unconsolidated financial statements.
The Notes (other than the CMU Notes) have been accepted for clearance through Euroclear and Clearstream, Luxembourg which are the entities in charge of keeping the records. The address of Euroclear is Euroclear Bank SA/NV, 1 Boulevard du Roi Albert II, B-1210 Brussels and the address of Clearstream, Luxembourg is Clearstream Banking, 42 Avenue JF Kennedy, L-1855 Luxembourg. The appropriate codes for each Tranche allocated by Euroclear and Clearstream, Luxembourg will be contained in the applicable Final Terms.
The CMU Service is a central depositary service provided by the Central Moneymarkets Unit of the Hong Kong Monetary Authority (the "HKMA") for the safe custody and electronic trading between the members of this service (the "CMU Members") of capital markets instruments (the "CMU Instruments") which are specified in the CMU Service Reference Manual as capable of being held within the CMU Service. The CMU Service is only available to CMU Instruments issued by a CMU Member or by a person for whom a CMU Member acts as agent for the purposes of lodging instruments issued by such persons. Membership of the CMU Service is open to all members of the Hong Kong Capital Markets Association and "authorised institutions" under the Banking Ordinance (Cap. 155) of Hong Kong. Compared to clearing services provided by Euroclear and Clearstream, Luxembourg, the standard custody and clearing service provided by the CMU Service is limited. In particular (and unlike Euroclear and Clearstream, Luxembourg), the HKMA does not as part of this service provide any facilities for the dissemination to the relevant CMU Members of payments (of interest or principal) under, or notices pursuant to the payment or notice provisions of, the CMU Instruments. Instead, the HKMA advises the lodging CMU Member (or a designated paying agent) of the identities of the CMU Members to whose accounts payments in respect of the relevant CMU Instruments are to be credited or notices in respect of the relevant CMU Instruments are to be delivered, whereupon the lodging CMU Member (or the designated paying agent) will make the necessary payments of interest or principal or send notices directly to the relevant CMU Members. Similarly, the HKMA will not obtain certificates of non-U.S. beneficial ownership from CMU Members or provide any such certificates on behalf of CMU Members. The CMU Lodging and Paying Agent will collect such certificates from the relevant CMU Members identified from an instrument position report obtained by request from the HKMA for this purpose.
An investor may hold an interest in any Notes cleared through the CMU Service through an account with either Euroclear or Clearstream, Luxembourg. If that is the case, such investor will hold that interest through the respective accounts which Euroclear and Clearstream, Luxembourg each have with the CMU Service.
The current address of the CMU Service is 55th Floor, Two International Finance Centre, 8 Finance Street Central, Hong Kong.
If the Notes are to be cleared through an additional or alternative clearing system, the appropriate information will be contained in the applicable Final Terms.
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 Issuers and their affiliates in the ordinary course of business. Certain of the Dealers and their affiliates may have positions, deal or make markets in the Notes issued under the Programme, related derivatives and reference obligations, including (but not limited to) entering into hedging strategies on behalf of the Issuers and their affiliates, investor clients, or as principal in order to manage their exposure, their general market risk, or other trading activities.
In addition, in the ordinary course of their business activities, the Dealers and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of the Issuers or Issuers' affiliates. Certain of the Dealers or their affiliates that have a lending relationship with the Issuers routinely hedge their credit exposure to the Issuers consistent with their customary risk management policies. Typically, such Dealers and their affiliates would hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in securities, including potentially the Notes issued under the Programme. Any such positions could adversely affect future trading prices of Notes issued under the Programme. The Dealers and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
36 St Andrew Square Edinburgh EH2 2YB
Tel: +44 (0)131 556 8555
Tel: +44 (0)131 556 8555
Edinburgh
Tel: +44 (0)131 626 0000
The Law Debenture Trust Corporation p.l.c. Fifth Floor 100 Wood Street London EC2V 7EX
The Bank of New York Mellon One Canada Square London E14 5AL
The Bank of New York Mellon (Luxembourg) S.A. Vertigo Building-Polaris 2-4 rue Eugène Ruppert L-2453 Luxembourg
Hong Kong
To the Issuers as to English law
Linklaters LLP
One Silk Street London EC2Y 8HQ CMS Cameron McKenna LLP Saltire Court 20 Castle Terrace
Edinburgh EH1 2EN
To the Issuers as to Scottish law
To the Dealers and the Trustee as to English law
Allen & Overy LLP One Bishops Square London E1 6AD
BNP Paribas
10 Harewood Avenue London NW1 6AA Attention: MTN Desk
Credit Suisse (Securities) Europe Limited One Cabot Square London E14 4QJ Attention: DCM Transaction Management
J.P. Morgan Securities plc
25 Bank Street Canary Wharf London E14 5JP Attention: Euro Medium Term Note Desk
Mizuho International plc Bracken House One Friday Street London EC4M 9JA Attention: MTN Trading Desk
Nomura International plc 1 Angel Lane London EC4 3AB Attention: Fixed Income Syndicate Citigroup Global Markets Limited Citigroup Centre Canada Square
Canary Wharf London E14 5LB Attention: MTN Desk
Deutsche Bank AG, London Branch
Winchester House 1 Great Winchester Street London EC2N 2DB Attention: PPSN Trading Desk
Merrill Lynch International 2 King Edward Street London EC1A 1HQ Attention: EMTN Trading and Distribution Desk
Morgan Stanley & Co. International plc 25 Cabot Square Canary Wharf London E14 4QA Attention: Global Capital Markets – Head of Transaction Management Group
Société Générale 29 boulevard Haussmann 75009 Paris France Attention: Syndicate desk GLFI/SYN/CAP/BND
The Royal Bank of Scotland plc 135 Bishopsgate London EC2M 3UR Attention: Euro Medium Term Note Desk
UBS Limited 1 Finsbury Avenue London EC2M 2PP Attention: MTNs and Private Placements
To the Issuers Deloitte LLP Chartered Accountants 2 New Street Square London EC4A 3BZ
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