30/360 day-count basis) of a fixed-for-floating U.S. dollar interest rate swap which (i) has a term of 10 years commencing on the relevant Reset Interest Determination Date, (ii) is in an amount that is representative of 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 3-month LIBOR rate (calculated on an Actual/360 day count basis) and;
Margin means in respect of (i) each Reset Period which falls in the period commencing on 28 March 2023 and ending on (but excluding) 28 March 2043, 5.21 per cent.; and (ii) each Reset Period which falls on or after 28 March 2043, 5.96 per cent.
The Subsequent Fixed Interest Rate shall be determined as provided above in respect of each Reset Period and, as so determined, such rate shall apply to each Interest Period falling within that Reset Period.
(e) Determination of Subsequent Fixed Interest Rates
The Agent Bank will, as soon as practicable after 11.00 hours (London time) on each Reset Interest Determination Date, determine the Subsequent Fixed Interest Rate in respect of each Interest Period falling within the relevant Reset Period.
(f) Publication of Subsequent Fixed Interest Rates
The Issuer shall cause notice of each Subsequent Fixed Interest Rate determined in accordance with this Condition 4 in respect of each relevant Interest Period to be given to the Trustee, the Paying
Agents, any stock exchange on which the Securities are for the time being listed or admitted to trading and, in accordance with Condition 16, the Holders, in each case as soon as practicable after its determination but in any event not later than the fourth Business Day thereafter.
(g) Agent Bank and Reset Reference Banks
With effect from the First Reset Date, the Issuer will maintain an Agent Bank and five Reset Reference Banks where the Interest Rate is to be calculated by reference to them. The name of the initial Agent Bank and its initial specified office is set out at the end of these Conditions.
The Issuer may, with the prior written approval of the Trustee, from time to time replace the Agent Bank or any Reset Reference Bank with another leading financial institution in London. If the Agent Bank is unable or unwilling to continue to act as the Agent Bank or fails duly to determine a Subsequent Fixed Interest Rate in respect of any Interest Period as provided in Condition 4(d), the Issuer shall forthwith appoint another leading financial institution in London approved in writing by the Trustee to act as such in its place. The Agent Bank may not resign its duties or be removed without a successor having been appointed as aforesaid.
(h) Determinations of Agent Bank Binding
All notifications, opinions, determinations, certificates, calculations, quotations and decisions given, expressed, made or obtained for the purposes of this Condition 4 by the Agent Bank shall (in the absence of wilful default, bad faith or manifest error) be binding on the Issuer, the Agent Bank, the Trustee, the Paying Agents and all Holders and (in the absence as aforesaid) no liability to the Holders or the Issuer shall attach to the Agent Bank in connection with the exercise or non-exercise by it of any of its powers, duties and discretions.
(i) Step-up after Change of Control
Notwithstanding any other provision of this Condition 4, if the Issuer does not elect to redeem the Securities in accordance with Condition 6(f) following the occurrence of a Change of Control Event, the then prevailing Interest Rate, and each subsequent Interest Rate otherwise determined in accordance with the provisions of this Condition 4 (including, if applicable, Condition 4(j)), on the Securities shall be increased by 5 per cent. with effect from (and including) the date on which the Change of Control Event occurred.
(j) Step-up in connection with Equity Offering
Notwithstanding any other provision of this Condition 4, if an Equity Offering Linked Call Event has occurred and is continuing, and the Issuer has not on or before the date falling 6 months after the Issue Date given notice of its election to redeem the Securities, the then prevailing Interest Rate (and each subsequent Interest Rate otherwise determined in accordance with the provisions of this Condition 4 (including, if applicable, Condition 4(i)) shall be increased by 5 per cent. with effect from (and including) the date falling 6 months after the Issue Date.
5 Optional Interest Deferral (a) Deferral of Payments
Notwithstanding the provisions of Condition 4(a), the Issuer may, at its discretion, elect to defer all or part of any Interest Payment (a Deferred Interest Payment) which is otherwise scheduled to be paid on an Interest Payment Date by giving notice (a Deferral Notice) of such election to the Holders in accordance with Condition 16, the Trustee and the Principal Paying Agent not more than 14 nor less than 7 Business Days prior to the relevant Interest Payment Date. Subject to Condition 5(c), if the Issuer elects not to make all or part of any Interest Payment on an Interest Payment Date, then it will not have any obligation to pay such interest on the relevant Interest Payment Date and any such non- payment of interest will not constitute an Event of Default or any other breach of its obligations under the Securities or for any other purpose.
(b) Optional Settlement
Arrears of Interest (as defined below) may be satisfied at the option of the Issuer in whole or in part at any time (the Optional Deferred Interest Settlement Date) following delivery of a notice to such
effect given by the Issuer to the Holders in accordance with Condition 16, the Trustee and the Principal Paying Agent not more than 14 nor less than 7 Business Days prior to the relevant Optional Deferred Interest Settlement Date informing them of its election to so satisfy such Arrears of Interest (or part thereof) and specifying the relevant Optional Deferred Interest Settlement Date.
Any Deferred Interest Payment shall itself bear interest (such further interest together with the Deferred Interest Payment, being Arrears of Interest), at the Interest Rate applicable to the Securities from time to time, from (and including) the date on which (but for such deferral) the Deferred Interest Payment would otherwise have been due to be made to (but excluding) the relevant Optional Deferred Interest Settlement Date or, as appropriate, such other date on which such Deferred Interest Payment is paid in accordance with Condition 5(c), in each case such further interest being compounded on each Interest Payment Date.
Non-payment of Arrears of Interest shall not constitute a default by the Issuer under the Securities or for any other purpose, unless such payment is required in accordance with Condition 5(c).
(c) Mandatory Settlement
Notwithstanding the provisions of Condition 5(a), the Issuer shall pay any outstanding Arrears of Interest, in whole but not in part, on the first occurring Mandatory Settlement Date following the Interest Payment Date on which a Deferred Interest Payment first arose.
6 Redemption
(a) Final Redemption
Unless previously redeemed, or purchased and cancelled, and subject to the provisions of Condition 3(a) and without prejudice to the provisions of Condition 12, the Securities will be redeemed at their principal amount on 28 March 2073 (the Maturity Date), together with any accrued and unpaid interest up to (but excluding) the Maturity Date and any outstanding Arrears of Interest. The Securities may not be redeemed at the option of the Issuer other than in accordance with this Condition 6.
(b) Issuer’s Call Option
The Issuer may, by giving not less than 30 nor more than 60 days’ notice to the Trustee, the Principal Paying Agent and, in accordance with Condition 16, the Holders (which notice shall be irrevocable), redeem all, but not some only, of the Securities on the First Reset Date, on 28 March 2028 or on the first following Reset Date, or thereafter on each Interest Payment Date, in each case at their principal amount, together with any accrued and unpaid interest up to (but excluding) the redemption date and any outstanding Arrears of Interest.
(c) Redemption for Taxation Reasons
If, immediately prior to the giving of the notice referred to below, a Tax Deduction Event or a Withholding Tax Event has occurred and is continuing, then the Issuer may, subject to having given not less than 30 nor more than 60 days’ notice to the Trustee, the Principal Paying Agent and, in accordance with Condition 16, the Holders (which notice shall be irrevocable) and subject to Condition 7, redeem in accordance with these Conditions at any time all, but not some only, of the Securities at (i) 101 per cent. of their principal amount (where such redemption occurs prior to the First Reset Date) or (ii) their principal amount (where such redemption occurs on or after the First Reset Date), together, in each case, with any accrued and unpaid interest up to (but excluding) the redemption date and any outstanding Arrears of Interest. Upon the expiry of such notice, the Issuer shall redeem the Securities.
(d) Redemption for Rating Reasons
If, immediately prior to the giving of the notice referred to below, a Rating Event has occurred and is continuing, then the Issuer may, subject to having given not less than 30 nor more than 60 days’ notice to the Trustee, the Principal Paying Agent and, in accordance with Condition 16, the Holders (which notice shall be irrevocable) and subject to Condition 7, redeem in accordance with these Conditions all, but not some only, of the Securities at any time at (i) 101 per cent. of their principal amount (where
such redemption occurs prior to the First Reset Date) or (ii) their principal amount (where such redemption occurs on or after the First Reset Date), together, in each case, with any accrued and unpaid interest up to (but excluding) the redemption date and any outstanding Arrears of Interest. Upon the expiry of such notice, the Issuer shall redeem the Securities.
(e) Redemption for Substantial Repurchase
If, immediately prior to the giving of the notice referred to below, a Substantial Repurchase Event has occurred, then the Issuer may, subject to having given not less than 30 nor more than 60 days’ notice to the Trustee, the Principal Paying Agent and, in accordance with Condition 16, the Holders (which notice shall be irrevocable) and subject to Condition 7, redeem in accordance with these Conditions all, but not some only, of the Securities at any time at their principal amount, together with any accrued and unpaid interest up to (but excluding) the redemption date and any outstanding Arrears of Interest. Upon the expiry of such notice, the Issuer shall redeem the Securities.
(f) Redemption for Change of Control
If, immediately prior to the giving of the notice referred to below, a Change of Control Event has occurred and is continuing, then the Issuer may, subject to having given not less than 30 nor more than 60 days’ notice to the Trustee, the Principal Paying Agent and, in accordance with Condition 16, the Holders (which notice shall be irrevocable) and subject to Condition 7, redeem in accordance with these Conditions all, but not some only, of the Securities at any time at their principal amount, together with any accrued and unpaid interest up to (but excluding) the redemption date and any outstanding Arrears of Interest. Upon the expiry of such notice, the Issuer shall redeem the Securities.
At or around the Issue Date, the Issuer intends to undertake with and for the benefit of all holders of its Relevant Securities (as defined below) that, for so long as any of the Securities is outstanding, following the occurrence of a Change of Control Event in respect of which it intends to deliver a notice exercising its right to redeem the Securities in accordance with this Condition 6(f) it will do so only after making a tender offer, directly or indirectly, to all holders of the Relevant Securities to repurchase their respective securities at their respective aggregate nominal amounts together with any interest accrued until the day of completion of the repurchase. The Issuer will undertake to make such tender offer in such a way as to ensure that the repurchase of any such Relevant Securities tendered to it will be effected prior to any redemption of the Securities in accordance with this Condition 6(f). Relevant Securities means any current or future indebtedness of the Issuer to Senior Creditors (as defined in Condition 3(a)) in the form of, or represented or evidenced by bonds, notes, debentures or other similar securities or instruments (or a guarantee thereof) which benefits from a solicited rating from an external rating agency recognised by EU or US regulations, and which does not include protection for the holders thereof in the event of a change of control of the Issuer (however defined).
(g) Redemption for Equity Offering Linked Call Event
If an Equity Offering Linked Call Event has occurred and is continuing, the Issuer may, subject to having given not less then 30 nor more than 60 days’ notice to the Trustee, the Principal Paying Agent and, in accordance with Condition 16, the Holders (which notice shall be irrevocable), redeem all, but not some only, of the Securities at 101 per cent. of their principal amount, together with any accrued and unpaid interest up to (but excluding) the redemption date and any outstanding Arrears of Interest. As used herein:
Compliant Equity Offering means a capital raise by the Issuer by means of issuing ordinary shares of the Issuer and/or any Mandatory Convertible Debt Securities which raises gross proceeds at least equal to all or substantially all of the Equity Offering Target Proceeds Amount;
an Equity Offering Linked Call Event shall be deemed to have occurred and be continuing if by 28 September 2013 the Issuer has not completed a Compliant Equity Offering or it announces its decision not to pursue a Compliant Equity Offering;
Equity Offering Target Proceeds Amount means€3bn;
Mandatory Convertible Debt Securities means securities issued by the Issuer or by another entity and guaranteed by the Issuer which provide for their mandatory conversion into ordinary shares of the Issuer and which on issue receive 100 per cent. equity treatment from a Rating Agency; and
substantially all, as used in this Condition 6(g), shall mean a number which is not less than€2.5 bn of the Equity Offering Target Proceeds Amount.
Unless the rating assigned by S&P to the Issuer is at least “BBB-” (or such similar nomenclature then used by S&P) and the Issuer is comfortable that such rating would not fall below this level as a result of such redemption or repurchase, the Issuer intends (without thereby assuming a legal obligation), during the period from and including the issue date of the Securities to but excluding the Reset Date falling on 28 March 2043, in the event of:
(i) an early redemption of the Securities, or
(ii) a repurchase of the Securities of more than (a) 10 per cent. of the aggregate principal amount of the Securities originally issued in any period of 12 consecutive months or (b) 25 per cent. of the aggregate principal amount of the Securities originally issued in any period of 10 consecutive years,
that it will redeem or repurchase such Securities only to the extent that such part of the aggregate principal amount of the Securities to be redeemed or repurchased as was characterised as equity credit by S&P at the time of their issuance to apply to the Securities after redemption of the Securities upon the occurrence of an Equity Offering Linked Call Event no longer is available to the Issuer (but taking into account any changes in hybrid capital methodology or another relevant methodology or the interpretation thereof since the issuance of the Securities) does not exceed such part of the net proceeds which is received by the Issuer or any subsidiary of the Issuer during the 360-day period prior to the date of such redemption or repurchase from the sale or issuance by the Issuer or any subsidiary of the Issuer to third party purchasers (other than subsidiaries of the Issuer) of securities as is characterised by S&P, at the time of sale or issuance, as equity credit. This is a statement of the Issuer’s intention as at the date of this Prospectus and does not impose any legal obligations on the Issuer. Accordingly, this statement does not form part of the relevant Conditions.
7 Preconditions to Special Event Redemption, Change of Control Event Redemption and Equity Offering Linked Call Event
Prior to the publication of any notice of redemption pursuant to Condition 6 (other than redemption pursuant to Condition 6(b)), the Issuer shall deliver to the Trustee a certificate signed by two managing directors of the Issuer stating that the relevant requirement or circumstance giving rise to the right to redeem is satisfied, and where the relevant Special Event or, as the case may be, Change of Control Event or Equity Offering Linked Call Event, requires measures reasonably available to the Issuer to be taken, the relevant Special Event or, as the case may be, Change of Control Event or Equity Offering Linked Call Event, cannot be avoided by the Issuer taking such measures. In relation to a redemption pursuant to Condition 6(c), such certificate shall also include a copy of an opinion of an independent nationally recognised law firm or other tax adviser experienced in such matters that a Tax Deduction Event or Withholding Tax Event has occurred. The Trustee may rely absolutely upon and shall be entitled to accept such certificate without any liability to any person for so doing and without any further inquiry as sufficient evidence of the satisfaction of the conditions precedent set out in such paragraphs in which event it shall be conclusive and binding on the Holders.
Any redemption of the Securities in accordance with Condition 6(b), 6(c), 6(d), 6(e), 6(f) or 6(g) shall be conditional on all outstanding Arrears of Interest being paid in full in accordance with the provisions of Condition 5 on or prior to the date thereof, together with any accrued and unpaid interest up to (but excluding) such redemption date.
The Trustee is under no obligation to ascertain whether any Special Event or Change of Control Event or Change of Control or Equity Offering Linked Call Event or any event which could lead to the occurrence of, or could constitute, any such Special Event, Change of Control Event or Change of Control or Equity Offering Linked Call Event, has occurred and, until it shall have actual knowledge or express notice pursuant to the Trust Deed to the contrary, the Trustee may assume that no such Special Event, Change of Control Event or Change of Control or Equity Offering Linked Call Event or such other event has occurred.
8 Purchases and Cancellation (a) Purchases
The Issuer or any of its subsidiaries may at any time purchase or procure others to purchase beneficially for its account Securities in any manner and at any price. The Securities so purchased,
while held by or on behalf of the Issuer, shall not entitle the Holder to vote at any meetings of the Holders and shall not be deemed to be outstanding for the purposes of calculating quorums at meetings of the Holders or for the purposes of Condition 13.
(b) Cancellation
All Securities redeemed by the Issuer pursuant to Condition 6 will forthwith be cancelled. All Securities purchased by the Issuer or any of its subsidiaries may be held, reissued, resold or, at the option of the Issuer, the Certificate in respect thereof may be surrendered to the Registrar for cancellation. Securities in respect of which the relevant Certificate is so surrendered, shall be cancelled