Società Cattolica di Assicurazione Società Cooperativa

Transcription

1 Prospectus dated 16 December 2013 Società Cattolica di Assicurazione Società Cooperativa 100,000,000 Fixed/Floating Rate Subordinated Notes due December 2043 callable December 2023 Issue Price: 100 per cent. The 100,000,000 Fixed/Floating Rate Subordinated Notes due December 2043 callable December 2023 (the Notes) of Società Cattolica di Assicurazione Società Cooperativa (the Issuer) will be issued on 17 December 2013 (the Issue Date). The obligations of the Issuer under the Notes in respect of principal, interest and other amounts, constitute unconditional, unsecured and subordinated obligations of the Issuer and rank pari passu without any preference among themselves and at least equally with all other Dated Subordinated Obligations of the Issuer which are expressed to be senior subordinated obligations of the Issuer having a specified maturity date but junior to any unconditional, unsubordinated, unsecured obligations of the Issuer (and the policyholders of the Issuer) and senior to any Dated Deeply Subordinated Notes of the Issuer (including any More Deeply Subordinated Obligations of the Issuer) and any Hybrid Obligations of the Issuer, as set out and defined in the "Terms and Conditions of the Notes Status of the Notes". Unless previously redeemed or repurchased and cancelled in accordance with the Conditions and subject as set out in Condition 4, the Notes will bear interest on their principal amount from (and including) the Issue Date to (but excluding) 17 December 2023 (the Interest Reset Date), at the rate of 7.25 per cent. per annum, payable, subject as provided in the Conditions, annually in arrear on each Initial Period Interest Payment Date commencing on 17 December 2014, provided that the interest payment on the Interest Payment Date falling on 17 December 2014 will be in respect of the period from (and including) the Issue Date to (but excluding) 17 December If the Issuer has not redeemed the Notes in accordance with Condition 5 on the Interest Reset Date, the Notes will bear interest from and including the Interest Reset Date to but excluding the date of redemption of the Notes, at the Floating Rate of Interest (as defined in "Terms and Conditions of the Notes") payable, subject as provided in the Conditions, quarterly in arrear on each Interest Payment Date. Payment of interest on the Notes may be deferred at the option of the Issuer, or shall, be deferred under certain circumstances, as set out in "Terms and Conditions of the Notes Interest and Interest Deferral - Interest Deferral". Unless previously redeemed by the Issuer as provided below, the Notes will be redeemed on 17 December 2043 at their principal amount, together with interest accrued to, but excluding, such date and any Arrears of Interest. The Issuer may, subject to the prior approval of the Lead Regulator, redeem all, but not some only, of the Notes on the Interest Reset Date and on any Interest Payment Date thereafter, at their principal amount together with any interest accrued to, but excluding, the relevant date of redemption and any Arrears of Interest. The Issuer may also, at its option (but subject to the approval of the Lead Regulator in each case) and subject to certain conditions, redeem the Notes at the applicable Early Redemption Price at any time upon the occurrence of a Gross-up Event, a Tax Deductibility Event, a Rating Methodology Event or a Regulatory Event (each as defined in "Terms and Conditions of the Notes"). If at any time the Issuer determines that a Tax Event (as defined in "Terms and Conditions of the Notes"), a Regulatory Event or a Rating Methodology Event has occurred on or after the Issue Date, the Issuer may, as an alternative to exercising its right to call the Notes as described above, on any Interest Payment Date, without the consent of the Noteholders, (a) exchange the Notes for new notes replacing the Notes (the Exchanged Notes), or (ii) vary the terms of the Notes (the Varied Notes), so that (i) in the case of a Tax Event, the Exchanged Notes or Varied Notes (as the case may be) no longer trigger the relevant Tax Event, (b) in the case of a Regulatory Event, the aggregate nominal amount of the Exchanged Notes or Varied Notes (as the case may be) is treated under Italian Legislation on Solvency Margin (including, for the avoidance of doubt, for the purpose of compliance with any grandfathering provisions thereof) or the Future Regulations as at least "tier two" own funds regulatory capital (or whatever the terminology employed at such time by Future Regulations) of the Issuer and/or the Issuer and its subsidiaries (the Group) for the purposes of the determination of the Issuer s regulatory capital or, as appropriate, (c) in the case of a Rating Methodology Event, the Exchanged Notes or the Varied Notes receive (or continue to receive) the equity credit first assigned to the Notes by the relevant Rating Agency. Any such exchange or variation is subject to the certain conditions. See "Terms and Conditions of the Notes Redemption and Purchase". This Prospectus has been approved by the Central Bank of Ireland, as Irish competent authority under the Directive 2003/71/EC, as amended (which includes the amendments made by the 2010 PD Amending Directive to the extent that such amendments have been implemented in a Member State of the European Economic Area) (the Prospectus Directive) and relevant implementing measures in Ireland. The Central Bank of Ireland only approves this Prospectus as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. Such approval relates only to the Notes which are to be admitted to trading on the regulated market of the Irish Stock Exchange Limited (the Irish Stock Exchange) or other regulated markets for the purposes of Directive 2004/39/EC (the Markets in Financial Instruments Directive) or which are to be offered to the public in a Member State of the European Economic Area. Application has been made to the Irish Stock Exchange for Notes to be admitted to the official list (the Official List) and trading on its regulated market. The regulated market of the Irish Stock Exchange is a regulated market for the purposes of the Markets in Financial Instruments Directive. The Notes will initially be represented by a temporary global note (the Temporary Global Note), without interest coupons, which will be deposited on or about the Issue Date with a common depositary for Euroclear Bank SA/NV (Euroclear) and Clearstream Banking, société RM:

2 anonyme (Clearstream, Luxembourg). Interests in the Temporary Global Note will be exchangeable for interests in a permanent global note (the Permanent Global Note and, together with the Temporary Global Note, the Global Notes), without interest coupons, on or after 27 January 2014 (the Exchange Date), upon certification as to non-u.s. beneficial ownership. Interests in the Permanent Global Note will be exchangeable for definitive Notes only in certain limited circumstances - see "Summary of Provisions relating to the Notes while Represented by the Global Notes". The Notes are expected to be rated BB+ by Standard & Poor s Credit Market Services Italy S.r.l. (Standard & Poor's). Standard & Poor s is established in the European Union and registered under Regulation (EC) No. 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies as amended by Regulation (EU) No. 513/2011 (the CRA Regulation) and included in the list of credit rating agencies registered in accordance with the CRA Regulation published on the European Securities and Markets Authority s website ( as of the date of this Prospectus. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension, change or withdrawal at any time by the assigning rating agency. Prospective investors should have regard to the risk factors described under the section headed "Risk Factors" in this Prospectus, in connection with any investment in the Notes. MEDIOBANCA Joint Arrangers, Lead Managers and Bookrunners SOCIÉTÉ GÉNÉRALE CORPORATE & INVESTMENT BANKING RM:

3 This Prospectus comprises a prospectus for the purposes of Article 5.3 of the Prospectus Directive. The Issuer accepts responsibility for the information contained in this Prospectus. To the best of the knowledge and belief of the Issuer (having taken all reasonable care to ensure that such is the case) the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information. 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"). This Prospectus should be read and construed on the basis that such documents are so incorporated and form part of this Prospectus. Save for the Issuer, no other party has separately verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by Mediobanca Banca di Credito Finanziario S.p.A. or Société Générale as joint lead managers (the Managers) as to the accuracy or completeness of the information contained or incorporated in this Prospectus or any other information provided by the Issuer in connection with the offering of the Notes. The Managers do not accept any liability in relation to the information contained or incorporated by reference in this Prospectus or any other information provided by the Issuer in connection with the offering of the Notes or their distribution. To the fullest extent permitted by law, none of the Managers, the Fiscal Agent or the Agent Bank accepts any responsibility for the contents of this Prospectus or for any other statements made or purported to be made by any Manager or on their behalf in connection with the Issuer or the issue and offering of any Notes. Each of the Managers, the Fiscal Agent and the Agent Bank 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. No person is or has been authorised by the Issuer to give any information or to make any representation not contained in or not consistent with this Prospectus or any other information supplied in connection with the offering of the Notes and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuer or any Manager. Neither this Prospectus nor any other information supplied in connection with the offering of the Notes (a) is intended to provide the basis of any credit or other evaluation or (b) should be considered as a recommendation by the Issuer or any Manager that any recipient of this Prospectus or any other information supplied in connection with the offering of the Notes should purchase any Notes. 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 Issuer. Neither this Prospectus nor any other information supplied in connection with the offering of the Notes constitutes an offer or invitation by or on behalf of the Issuer or any Manager to any person to subscribe for or to purchase any Notes. Neither the delivery of this Prospectus nor the offering, sale or delivery of the Notes shall in any circumstances imply that the information contained herein concerning the Issuer or the Group is correct at any time subsequent to the date hereof or that any other information supplied in connection with the offering of the Notes is correct as of any time subsequent to the date indicated in the document containing the same. The Managers expressly do not undertake to review the financial condition or affairs of the Issuer or the Group during the life of the Notes or to advise any investor in the Notes of any information coming to their attention. The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the Securities Act) and are subject to U.S. tax law requirements. Subject to certain exceptions, the Notes may not be offered, sold or delivered within the United States or to U.S. persons. For a further RM:

4 description of certain restrictions on the offering and sale of the Notes and on distribution of this document, see "Subscription and Sale" below. This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy the Notes in any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such jurisdiction. The distribution of this Prospectus and the offer or sale of Notes may be restricted by law in certain jurisdictions. None of the Issuer or the Managers represents 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 such jurisdiction, or pursuant to an exemption available thereunder, or assumes any responsibility for facilitating any such distribution or offering. In particular, no action has been taken by the Issuer or the Managers which would permit a public offering of the Notes or the distribution of this Prospectus in any jurisdiction where action for that purpose is required. Accordingly, no Notes may 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. Persons into whose possession this Prospectus or any Notes may come must inform themselves about, and observe, any such restrictions on the distribution of this Prospectus and the offering and sale of Notes. In particular, there are restrictions on the distribution of this Prospectus and the offer or sale of Notes in the United States, the United Kingdom and the Republic of Italy. The consolidated financial statements of the Issuer for the years ended 31 December 2012 and 31 December 2011 and the six months ended 30 June 2013 have been prepared in accordance with IFRS as adopted by the European Union. In this Prospectus, all references in this document to euro and refer to the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty establishing the European Community, as amended. The language of the Prospectus is English. Certain legislative references and technical terms have been cited in their original language in order that the correct technical meaning may be ascribed to them under applicable law RM:

5 FORWARD-LOOKING STATEMENTS Certain statements contained herein are forward-looking statements including, but not limited to, statements with respect to the Issuer s business strategies, expansion and growth of operations, plans or objectives, trends in its business, competitive advantage and regulatory changes, based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact. Forward-looking statements are typically identified by words or phrases such as, without limitation, "anticipate", "assume", "believe", "continue", "estimate", "expect", "foresee", "intend", "project", "anticipate", "seek", "may increase" and "may fluctuate" and similar expressions or by future or conditional verbs such as, without limitation, "will", "should", "would" and "could". Undue reliance should not be placed on such statements, because, by their nature, they are subject to known and unknown risks, uncertainties, and other factors and actual results may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Please refer to the section entitled "Risk Factors" below. The Issuer expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the Issuer's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based RM:

6 TABLE OF CONTENTS Section Page Overview... 6 Risk Factors Documents Incorporated by Reference Terms and Conditions of the Notes Summary of Provisions relating to the Notes while Represented by the Global Notes Use of Proceeds Description of the Group Taxation Subscription and Sale General Information RM:

7 OVERVIEW This Overview section must be read as an introduction to this Prospectus and any decision to invest in the Notes should be based on a consideration of this Prospectus as a whole. Words and expressions defined in "Terms and Conditions of the Notes" shall have the same meanings in this section. Issuer: Description: Managers: Fiscal Agent and Agent Bank: Use of proceeds: Società Cattolica di Assicurazione Società Cooperativa. 100,000,000 Fixed/Floating Rate Subordinated Notes due December 2043 callable December 2023 (the Notes). Mediobanca Banca di Credito Finanziario S.p.A. Société Générale BNP Paribas Securities Services, Luxembourg Branch The net proceeds of the issue of the Notes will be used by the Issuer to finance the acquisition of Fata Assicurazioni Danni S.p.A. Maturity date: 17 December 2043 Denomination: 100,000. Form of the Notes: Ranking: Negative pledge: Enforcement Events; No Events of Default: The Notes will be issued in bearer form and will initially be in the form of the Temporary Global Note, without Coupons, which will be deposited on or around the Issue Date with a common depositary for Euroclear and Clearstream Banking, société anonyme. Interests in the Temporary Global Note will be exchangeable for interests in the Permanent Global Note, without Coupons, on or after the Exchange Date, upon certification as to non-u.s. beneficial ownership. Interests in the Permanent Global Note will be exchangeable for Definitive Bearer Notes only in certain limited circumstances in accordance with the terms of the Permanent Global Note. The Notes constitute unconditional and unsecured subordinated obligations of the Issuer and rank pari passu without any preference among themselves and at least equally with all other Dated Subordinated Obligations of the Issuer which are expressed to be senior subordinated obligations of the Issuer having a specified maturity date but junior to any unconditional, unsubordinated, unsecured obligations of the Issuer (and the policyholders of the Issuer) and senior to any Dated Deeply Subordinated Notes of the Issuer (including any More Deeply Subordinated Obligations of the Issuer) and any Hybrid Obligations of the Issuer. There will be no negative pledge in respect of the Notes. There will be no events of default in respect of the Notes. However, each Note shall become immediately due and payable at its principal amount, together with accrued interest thereon, to the date of payment and any Arrears of Interest, in the event that (i) an order is made or an RM:

8 effective resolution is passed for the winding-up, liquidation or dissolution of the Issuer or (ii) any event occurs which under the laws of any relevant jurisdiction has an analogous effect to any of the events referred to in (i) above. Interest: Unless previously redeemed or repurchased and cancelled in accordance with these Conditions and subject to the further provisions of Condition 4, the Notes will bear interest on their principal amount from (and including) the Issue Date to (but excluding) 17 December 2023 (the Interest Reset Date), at the rate of 7.25 per cent. per annum (the Fixed Rate of Interest), payable annually in arrear on each Initial Period Interest Payment Date commencing on 17 December 2014, provided that the interest payment on the first Initial Period Interest Payment Date falling on 17 December 2014 will be in respect of the period from (and including) the Issue Date to (but excluding) 17 December If the Issuer has not redeemed the Notes in accordance with Condition 5 on the Interest Reset Date, the Notes will bear interest for each Step- Up Interest Period from and including the Interest Reset Date to but excluding the date of redemption of the Notes, at the Floating Rate of Interest payable, subject as provided in these Conditions, quarterly in arrear on each Step-Up Period Interest Payment Date. Interest Deferral and Arrears of Interest: Optional Interest Deferral The Issuer may, subject to Condition 4.2(b), elect, by giving notice to the Noteholders pursuant to Condition 4.2(d), to defer payment of all (or some only) of the interest accrued to an Interest Payment Date in respect of the Notes if the Fiscal Agent has received written notice from the Issuer that the Optional Deferral Conditions are met on such Interest Payment Date. If the Issuer makes such an election, the Issuer shall have no obligation to make such payment and any such nonpayment of interest shall not constitute a default of the Issuer or any other breach of obligations under the Notes or for any other purpose. Mandatory Interest Deferral The Issuer shall, by giving notice to the Noteholders pursuant to Condition 4.2(d), defer payment of all (but not some only) of the interest accrued to an Interest Payment Date in respect of the Notes upon the occurrence of a Mandatory Deferral Event, unless the then applicable regulations provide that the Lead Regulator may give (and the Lead Regulator has then given, and has not withdrawn by the relevant Interest Payment Date) its prior consent to the payment of the relevant interest (or, as applicable, waiver of the interest deferral), provided that payment of the relevant interest amount does not further weaken the solvency position of the Issuer and, following implementation of the Future Regulations, the Minimum Capital Requirements (or such other requirement required to be complied with under the Future Regulations in order for the deferral of interest to be waived) is complied with even after the interest payment is made. If interest is deferred pursuant to this Condition, the Issuer shall have no obligation to make such payment and any such non-payment of RM:

9 interest shall not constitute a default of the Issuer or any other breach of obligations under the Notes or for any other purpose. Arrears of Interest Any such unpaid amounts of interest pursuant to Condition 4.2(a) (Optional Interest Deferral), or (b) (Mandatory Interest Deferral) will constitute Arrears of Interest. Arrears of Interest will not itself bear interest. Arrears of Interest may at the option of the Issuer be paid in whole or in part at any time but shall become due and payable on the Interest Payment Date immediately following the occurrence of a Deferred Interest Payment Event or in the case of (d) or (e) of the definition of "Deferred Interest Payment Event", upon the occurrence of the relevant event, provided that the Lead Regulator has given and has not withdrawn its prior consent to payment of the relevant amounts (to the extent required at the time in accordance with then applicable regulations in order for the Notes to qualify as regulatory capital). If amounts in respect of Arrears of Interest become partially payable: (i) (ii) Arrears of Interest accrued for any Interest Period shall not be payable until full payment has been made of all Arrears of Interest that have accrued during any earlier Interest Period; and the amount of Arrears of Interest payable in respect of any Note shall be pro rata to the total amount of all unpaid Arrears of Interest accrued to the date of payment. Redemption; General: Unless previously redeemed or purchased and cancelled as provided in the Conditions, the Issuer will redeem the Notes on the Maturity Date at their principal amount, together with any interest accrued to (but excluding) the Maturity Date and any outstanding Arrears of Interest, provided that: (A) (B) no Regulatory Intervention has occurred and is continuing, and such redemption would not itself result in a Regulatory Intervention. If (i) a Regulatory Intervention has occurred and is continuing on the Maturity Date; or (ii) redemption of the Notes on the Maturity Date would itself result in a Regulatory Intervention, then the Notes may only be redeemed on the Interest Payment Date immediately following the day on which no Regulatory Intervention is continuing and the redemption would itself not cause a Regulatory Intervention; and the prior approval of the Lead Regulator has been obtained if so required under applicable legislation at the relevant time. In the case the Issuer fails to obtain the prior approval of the Lead Regulator to redemption on the Maturity Date, the Maturity Date shall be postponed to the earlier of: (A) the date on which such approval is obtained; or (B) the date on which voluntary or involuntary winding up proceedings are instituted in respect of the Issuer in accordance with, as the case may be, (aa) a resolution of the shareholders' meeting of the Issuer; (bb) any provision of the by-laws of the Issuer, RM:

10 (currently, maturity of the Issuer is set at 31 December 2100 though if this is extended, redemption of the Notes will be equivalently adjusted), as applicable; or (cc) any applicable legal provision, or any decision of any jurisdictional or administrative authority. The proviso above shall also apply to any early redemption of the Notes in the optional early redemption circumstances set out below. Optional Early Redemption as from Interest Rest Date: Optional Early Redemption following a Gross-Up Event: Optional Early Redemption in case of Tax Deductibility Event: Optional Early Redemption for Regulatory Reasons: The Issuer may, subject to the prior approval of the Lead Regulator, redeem all of the Notes (but not some only) on the Interest Reset Date and on any Interest Payment Date thereafter, in each case at their principal amount together with any accrued interest up to (but excluding) the date fixed for redemption and any outstanding Arrears of Interest, on giving not less than 30 and not more than 60 calendar days' notice to the Noteholders in accordance with Condition 12. If, at any time, by reason of a change in any Italian law or regulation, or any change in the official application or interpretation thereof, becoming effective after the Issue Date, the Issuer would, on the occasion of the next payment of principal or interest due in respect of the Notes, not be able to make such payment without having to pay additional amounts as specified in Condition 7 (a Gross-Up Event), the Issuer may, subject to the prior approval of the Lead Regulator, on any Interest Payment Date, subject to having given not more than 60 nor less than 30 days' prior notice to the Noteholders in accordance with Condition 12 (which notice shall be irrevocable), redeem the Notes in whole, but not in part, at their principal amount, together with all interest accrued (including any Arrears of Interest) to the date fixed for redemption. If, an opinion of a recognised law firm of international standing has been delivered to the Issuer and the Fiscal Agent, stating that by reason of a change in Italian law or regulation, or any change in the official application or interpretation of such law, becoming effective after the Issue Date, the tax regime of any payments under the Notes is modified and such modification results in a material reduction of the deductibility of payments of interest by the Issuer in respect of the Notes (a Tax Deductibility Event and together with a Gross-Up Event, a Tax Event), so long as this cannot be avoided by the Issuer taking reasonable measures available to it at the time, the Issuer may, subject to the prior approval of the Lead Regulator, redeem the Notes in whole, but not in part, at their principal amount together with all interest accrued (including any Arrears of Interest) to the date fixed for redemption, on the latest practicable date on which the Issuer could make such payment with interest payable being tax deductible in Italy or, if such date has past, as soon as practicable thereafter. The Issuer shall give the Fiscal Agent notice of any such redemption not less than 30 nor more than 60 days before the date fixed for redemption and the Fiscal Agent shall promptly thereafter publish a notice of redemption in accordance with Condition 12. If at any time, the Issuer determines that a Regulatory Event has occurred with respect to the Notes on or after the Issue Date, the Issuer may, subject to the prior approval of the Lead Regulator, redeem the RM:

11 Notes in whole, but not in part, subject to having given not more than 60 nor less than 30 days prior notice to the Noteholders in accordance with Condition 12, at their principal amount plus any accrued interest (including Arrears of Interest) to the date fixed for redemption. For the purpose of the Conditions, Regulatory Event means that after the Issue Date: (i) (ii) (iii) (iv) the Issuer is no longer subject to the consolidated regulatory supervision of the Lead Regulator; or the Issuer is subject to the consolidated regulatory supervision of the Lead Regulator and is not permitted under the applicable rules and regulations adopted by the Lead Regulator, or an official application or interpretation of those rules and regulations, including a decision of any court or tribunal, at any time whilst any of the Notes are outstanding to treat the Notes (in whole or in part) as own funds for the purposes of the determination of its Solvency Margin under Italian Legislation on Solvency Margin, prior to implementation of the Future Regulations; or the Lead Regulator issues new or amended Tier 2 Capital Requirements (whether or not as a consequence of implementation of the Future Regulations) and subsequently notifies the Issuer that the Notes (in whole or in part) do not meet such Tier 2 Capital Requirements (including, for the avoidance of doubt, where the Lead Regulator has previously notified the Issuer that the Notes do meet such Tier 2 Capital Requirements); or under Italian Legislation on Solvency Margin, following implementation of the Future Regulations, the Notes (in whole or in part) do not qualify as Tier 2 Own Funds, except where, in each case (ii), (iii) or (iv) this is merely the result of exceeding any then applicable limits on the inclusion of the Notes as own funds, or Tier 2 Own Funds, as the case may be. Optional Early Redemption for Rating Reasons: Exchange/Variation: If at any time the Issuer determines that a Rating Methodology Event has occurred with respect to the Notes, such Notes will, subject to the prior approval of the Lead Regulator, be redeemable in whole, but not in part, at the option of the Issuer having given not less than 30 nor more than 60 days notice to the Noteholders in accordance with Condition 12 on any Interest Payment Date at their principal amount plus any accrued interest (including Arrears of Interest if any) to the date fixed for redemption. If at any time the Issuer determines that a Tax Event, a Regulatory Event or a Rating Methodology Event has occurred on or after the Issue Date, the Issuer may, as an alternative to exercising the available early redemption options described above, on any Interest Payment Date, without the consent of the Noteholders, (i) exchange the Notes for new notes replacing the Notes (the Exchanged Notes), or (ii) vary RM:

12 the terms of the Notes (the Varied Notes), so that (i) in the case of a Tax Event, the Exchanged Notes or Varied Notes (as the case may be) no longer trigger the relevant Tax Event, (ii) in the case of a Regulatory Event, the aggregate nominal amount of the Exchanged Notes or Varied Notes (as the case may be) is treated under Italian Legislation on Solvency Margin (including, for the avoidance of doubt, for the purpose of compliance with any grandfathering provisions thereof) or the Future Regulations as at least "tier two" own funds regulatory capital (or whatever the terminology employed by Future Regulations) of the Issuer and/or the Group for the purposes of the determination of the Issuer s regulatory capital or, as appropriate, (iii) in the case of a Rating Methodology Event, the Exchanged Notes or the Varied Notes receive (or continue to receive) the Equity Credit first assigned to the Notes by the relevant Rating Agency. Any such exchange or variation is subject to the certain conditions. Automatic Disapplication for Regulatory Reasons: Purchase: Taxation and Additional Amounts: In the event that, following the implementation of the Solvency II Directive, the option of the Issuer (i) to redeem the Notes further to the occurrence of a Tax Event or a Rating Methodology Event or (ii) to exchange the Notes or vary the terms of the Notes further to the occurrence of a Tax Event or a Rating Methodology Event, would prevent at any time before the Interest Reset Date, the Notes from being treated under the Future Regulations as applicable (including, for the avoidance of doubt, for the purpose of compliance with any grandfathering provisions thereof) as at least tier two own funds regulatory capital (or, if different, whatever terminology is employed by the Italian Legislation on Solvency Margin or the Future Regulations, as applicable) of the Issuer and/or the Group for the purposes of the determination of the Issuer s solvency margin or regulatory capital, the terms of the Notes shall automatically be varied by the Issuer to exclude the relevant option(s). In any such event: (a) the prior approval of the Lead Regulator will be obtained, if such approval is required at the time, and (b) notice will be given to Noteholders in accordance with Condition 12. However, subparagraph (v) of Condition 5.5 above will not apply to such variation. The Issuer or any of the Issuer's Subsidiaries may at any time, subject to the prior approval of the Lead Regulator if required at the relevant time, purchase Notes (provided that all unmatured Coupons appertaining to the Notes are purchased with the Notes) in any manner and at any price. Such Notes may be held, reissued or resold or at the option of the Issuer, surrendered to the Fiscal Agent for cancellation. All payments in respect of the Notes by or on behalf of the Issuer shall be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature (Taxes) imposed or levied by or on behalf of any of the Relevant Jurisdictions, unless the withholding or deduction of the Taxes is required by law. In that event, the Issuer will pay such additional amounts as may be necessary in order that the net amounts received by the Noteholders and Couponholders after the withholding or deduction shall equal the respective amounts which would have been receivable in respect of the Notes or, as the case may be, Coupons in the absence of the withholding or deduction; subject to RM:

13 customary exceptions. Meetings of Noteholders and Modifications: The Agency Agreement contains provisions for convening meetings of the Noteholders to consider any matter affecting their interests, including the modification or abrogation by Extraordinary Resolution of any of the Conditions. 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. Any modifications of any of the Conditions shall be subject to the prior approval of the Lead Regulator. Listing: Rating: Clearing: Selling Restrictions: Governing Law: Application is expected to be made for the Notes to be admitted to listing and to trading on the regulated market of the Irish Stock Exchange. The Notes are expected to be rated BB+ by Standard & Poor s. The Notes have been accepted for clearance through Clearstream Banking, société anonyme and Euroclear Bank SA/N.V. There are restrictions on the offer and sale of the Notes and the distribution of offering material, including in the United States of America, the United Kingdom, the Republic of Italy. The Agency Agreement, the Notes and the Coupons and any noncontractual obligations arising out of or in connection with them are governed by, and will be construed in accordance with, English law, other than the provisions of Condition 2 which shall be governed by, and construed in accordance with, Italian law and provided that Condition 11 and the provisions of Annex 3 of the Agency Agreement concerning meetings of Noteholders and the appointment of the rappresentante comune are subject to compliance with Italian law RM:

14 RISK FACTORS The Issuer believes that the following factors may affect its ability to fulfil its obligations under the Notes. All of these factors are contingencies which may or may not occur and the Issuer is not in a position to express a view on the likelihood of any such contingency occurring. Factors which the Issuer believes may be material for the purpose of assessing the market risks associated with the Notes are also described below. The Issuer believes that the factors described below represent the principal risks inherent in investing in the Notes, but the inability of the Issuer to pay interest, principal or other amounts on or in connection with the Notes may occur for other reasons and the Issuer does not represent that the statements below regarding the risks of holding the Notes are exhaustive. Prospective investors should read the entire Prospectus. The following is a disclosure of risk factors that are material to the Notes in order to assess the market risk associated with these Notes and risk factors that may affect the Issuer s ability to fulfil its obligations under the Notes. Prospective investors should consider these risk factors before deciding to purchase Notes. The following statements are not exhaustive. Prospective investors should consider all information provided in this Prospectus and consult with their own professional advisers if they consider it necessary. In addition, investors should be aware that the risks described may combine and thus intensify one another. The occurrence of one or more risks may have a material adverse effect on the own funds, the financial position and the operating result of the Issuer. Each of the risks highlighted below could have a material adverse effect on the business, operations, financial condition or prospects of the Issuer or the Group, which in turn 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. Words and expressions defined in the section entitled "Terms and Conditions of the Notes" herein shall have the same meanings in this section. The order in which the following risks factors are presented is not an indication of the likelihood of their occurrence. RISK FACTORS RELATING TO THE ISSUER Financial results may be affected by fluctuations in the financial markets Market levels and investment returns are an important part of determining the Group's overall profitability, and fluctuations in the financial markets, such as the fixed income, equity, property and foreign exchange markets, can have a material effect on its consolidated results of operations. Changes in these factors can be very difficult to predict. Any adverse changes in the economies and/or financial markets in which funds under management are invested could have a material adverse effect on the Group's consolidated financial condition, results of operations and cash flows. Fluctuations in interest rates may affect returns on fixed income investments and their market value. Generally, investment income may be reduced during sustained periods of lower interest rates as higher yielding fixed income securities are called, mature or are sold, and the proceeds are reinvested at lower rates, even though prices of fixed income securities tend to rise and gains realised upon their sale tend to increase. During periods of rising interest rates, the prices of fixed income securities tend to fall, meaning gains made upon their sale are lower or the losses made are greater RM:

15 General economic conditions, stock market conditions, level of disposable income and many other factors beyond the control of the Group can adversely affect the equity and property markets. Investment returns are also susceptible to changes in the general creditworthiness of the issuers of the debt securities and equity securities held in the businesses' portfolios. The value of fixed income securities may be affected by, amongst other things, changes in the issuer's credit rating. Where the credit rating of a debt security drops, the value of the security may also decline. The current dislocation in the global and Italian capital markets and credit conditions has led to the most severe examination of the banking system's capacity to absorb sudden significant changes in the funding and liquidity environment in recent history, and has had an impact on the wider economy. Should the Group be unable to continue to source a sustainable funding profile which can absorb these sudden shocks, the Group's ability to fund its financial obligations at a competitive cost, or at all, could be adversely affected. The investment risk on life assurance portfolios is often shared in whole or in part with policyholders, depending on the product sold. Fluctuations in the fixed income, equity and property markets will directly affect the financial results of life assurance operations and will also have indirect effects through their impact on the value of technical reserves, which, in most cases, are related to the value of the assets backing the policy liabilities. Should the credit rating of the issuer of the fixed income securities drop to a level such that regulatory guidelines prohibit the holding of such securities to back insurance liabilities, the resulting disposal may lead to a significant loss on the Group's investment. For further considerations relating to interest rates, currency and credit risks, please refer to the risk factors: "Financial results may be affected by interest rates", "Financial results may be affected by insurance risk" and "The Group is subject to credit risk". Financial results may be affected by interest rates Significant changes in interest rates could materially and adversely affect the Group's business and financial performance. The level of, and changes in, interest rates (including changes in the difference between the levels of prevailing short-term and long-term rates) can affect the Group's life insurance, banking and asset management results and interest payable on debt. In particular, interest rates can affect the availability of disposable income for investment in life assurance and other savings products, asset values, levels of bad debts, levels of investment income gains and losses on investments, funding costs and interest margins. Whilst interest rates increase the margin spread potential for the banking business, they are also likely to result in a decrease in fixed income asset values for life insurance companies. Generally, the impact of rising interest rates on the asset management business is driven by the change in value of funds under management. Fluctuations in interest rates (and returns from equity markets) also have an impact on consumer behaviour, especially in the life and asset insurance accumulation businesses, where demand for fixed income products may decline when interest rates fall and equity markets are performing well. The demand of general insurance, particularly commercial lines, can also vary with the overall level of economic activity. The Group is subject to credit risk The Group is prone to counterparty risk in relation to third parties. A failure by its counterparties to meet their obligations could have a material impact on its financial position. The Group is exposed to credit risk, amongst other things, through holdings of fixed income instruments and loan advances. Additionally, the Group's life assurance and general insurance businesses have substantial exposure to reinsurers through reinsurance arrangements. Under such arrangements, other insurers assume a portion of the costs, losses and expenses associated with policy claims and maturities, and reported and unreported losses in exchange for a portion of policy premiums. The availability, amount and cost of reinsurance depend on general market conditions and may vary significantly year to year. Any decrease in the amount of RM:

16 reinsurance cover purchased will increase the Group's risk of loss. When reinsurance is obtained, the Group is still liable for those transferred risks if the reinsurer does not meet its obligations. Therefore, the inability or failure of reinsurers to meet their financial obligations could materially affect the Group's operations and financial condition. A default by an institution, or even concerns as to its credit worthiness, could lead to significant liquidity problems, losses or defaults by other institutions because the stability of many financial institutions may be closely linked to credit, trading, clearing or other relationships between institutions. This risk may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges with which the Group interacts on a daily basis, and therefore could adversely affect the Group. Financial results may be affected by insurance risk Underwriting performance, for both the life and non-life businesses, represents an important part of the Group's overall profitability, and fluctuations in the frequency and severity of insurance claims can have a material effect on the consolidated results of operations. In addition, any adverse changes in the rate of claims inflation or in the cost of reinsurance protection could have a material adverse effect on the Group's consolidated financial condition, results of operations and cash flows. Changes in these factors can be very difficult to predict. Actual experience in the Group's life and non-life businesses could be inconsistent with the assumptions the Issuer uses to price its products which could adversely affect its results The results of the Group's life and non-life businesses depend significantly upon the extent to which its actual claim experience remains consistent with the assumptions used in the pricing of its products. Life insurance premiums are calculated using assumptions as to mortality, interest rates and expenses used to project future liabilities. In non-life insurance, claim frequency, claim severity and expense assumptions are used to determine prices. Although experience (i.e. the claims and expenses as actually experienced) is closely monitored, there is no guarantee that actual experience will match the assumptions that were used in initially establishing the future policyholder benefits and related premium levels. To the extent that actual experience differs significantly from the assumptions used, the Group's insurance businesses may be faced with unforeseen losses that negatively impact its results. The Group is subject to risks concerning the adequacy of its technical reserves, which could have a negative impact on its results in case these provisions prove to be insufficient The technical reserves of the Group's insurance businesses serve to cover the current and future liabilities towards its policyholders and originate from the collection of the insurance premiums. Technical reserves are established with respect to both the Group's life insurance businesses and non-life insurance businesses and are divided in different categories depending on the type of insurance business (life or non life) to which they relate. These technical reserves and the assets backing them represent the major part of the Group's balance sheet. Depending on the actual realisation of the future liabilities (i.e. the claims as actually experienced), the current technical reserves may prove to be inadequate. For example, the Group's life and health insurance technical reserves are derived from actuarial practices and assumptions, including an assessment of mortality, morbidity rates, expenses and interest rates. If the actual future mortality and morbidity rates deviate from those used in the projections, this may lead to inadequate reserving. Inadequate reserving can also occur due to other factors that are beyond the control of insurers, such as unexpected legal developments, advances in medicine and changes in social attitudes. Although the Group has the necessary actuarial tools (such as liability adequacy testing) in place to closely monitor and manage reserve risk, a residual risk still exists, and to the extent that technical reserves are insufficient to cover the Group's actual insurance losses, expenses or future policy benefits, the Group would have to add to these technical reserves and incur a charge to its earnings, which could adversely impact its results and financial condition RM: