Fortis Banque Luxembourg S.A. ( FBL ) FBL is part of Fortis (Incorporated in Luxembourg)

Transcription

1 Base Prospectus 13th November, 2007 Fortis Banque Luxembourg S.A. ( FBL ) FBL is part of Fortis (Incorporated in Luxembourg) EUR 12,000,000,000 Euro Medium Term Note Programme On 28th November, 1996 Fortis Banque Luxembourg S.A. (formerly known as Banque Générale du Luxembourg S.A.) (the Issuer or the Bank ) entered into a U.S.$1,000,000,000 Euro Medium Term Note Programme (the Programme ) which was subsequently amended on 29th October, 1997 (whereby, inter alia, the Programme was increased to U.S.$2,000,000,000), on 18th December, 1998 (whereby, inter alia, the Programme was increased to U.S.$3,000,000,000), on 28th June, 2000, on 6th August, 2001, on 6th August, 2002, on 29th July, 2003, on 1st October, 2003 (whereby the Programme was increased to U.S.$5,000,000,000), on 29th July, 2004, on 2nd March, 2005 (whereby the Programme was increased to U.S.$8,000,000,000) on 29th September, 2005, on 22nd August 2006 and on the date hereof. This Base Prospectus supersedes all previous offering circulars in connection with the Programme. Any Notes issued under the Programme are issued subject to the provisions set out herein. This does not affect any Notes already in issue or any Notes issued after the date hereof and forming a single series with Notes issued prior to the date hereof. Under this Programme the Issuer may, either directly or acting through any branch, from time to time issue notes (the Notes ), which expression shall include Euro Notes, Luxembourg Notes, Senior Notes and Subordinated Notes (each as defined below) denominated in any currency as may be agreed between the Issuer and the relevant Dealer (as defined below). The Notes will rank either as senior obligations of the Issuer ( Senior Notes ) or as subordinated obligations of the Issuer ( Subordinated Notes ). Subordinated Notes will be issued as Upper Tier II Subordinated Notes (subject to the prior approval of the terms thereof by the Commission de Surveillance du Secteur Financier (the CSSF ), or Lower Tier II Subordinated Notes or Tier III Subordinated Notes (in each case as described on page 10). The Notes will either be Euro Notes ( Euro Notes ) or Luxembourg Notes ( Luxembourg Notes ). The Euro Notes (whichmay be in bearerform ( Bearer Notes ) or registered form ( Registered Notes )) will be governed by English law (save in the case of SubordinatedNotes, which shall be governed by Luxembourg law). The Luxembourg Notes (which will be Bearer Notes only) will be governed by Luxembourg law. The maximum aggregate nominal amount of all Notes from time to time outstanding will not exceed EUR12,000,000,000 (or its equivalent in other currencies calculated as described herein). A description of the restrictions applicable at the date of this Base Prospectus relating to the maturity of certain Notes is set out on page 7. The Notes may be issued on a continuing basis to one or more of the Dealers specified on page 6 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 ). References in this Base Prospectus to the Relevant Dealer shall, in the case of an issue of Notes being (or intended to be) subscribed by more than one Dealer, be to all Dealers agreeing to subscribe such Notes. An investment in Notes issued under the Programme involves certain risks. For a discussion of these risks see Risk Factors. The Issuer 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 a supplement to the Base Prospectus, if appropriate, will be made available which will describe the effect of the agreement reached in relation to such Notes. Application has been made to the CSSF in its capacity as competent authority under the Luxembourg Act dated 10th July, 2005 on prospectuses for securities to approve this document as a Base Prospectus. Application has been made to the Luxembourg Stock Exchange for Notes issued under the Programme to be listed on the official list (the Official List ) and admitted to trading on the Bourse de Luxembourg, which is the regulated market of the Luxembourg Stock Exchange (the Regulated Market ). Application has also been made to the Luxembourg Stock Exchange for Notes issued under the Programme during the 12 months from the date of this Base Prospectus to be admitted to trading on the Luxembourg Stock Exchange s alternative market Euro MTF and to be listed on the Official List of the Luxembourg Stock Exchange. Application has also be made to the Swiss Exchange ( SWX ) to approve this document as a Swiss listing prospectus and for Notes issued under the Programme to be admitted to listing and/or trading on SWX. The Luxembourg Stock Exchange s Regulated Market is a regulated market in the sense of Directive 2004/39/EC on Markets in Financial Instruments. Notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of Notes, the issue price of Notes and any other terms and conditions not contained herein which are applicable to each Tranche (as defined on page 54 or 82, as the case may be) of Notes will be set forth in the final terms (the Final Terms ) which, with respect to Notes to be listed on the Official List and admitted to trading on the Regulated Market of the Luxembourg Stock Exchange, will be filed with the CSSF. The Programme provides that 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 Issuer and the relevant Dealer. The Issuer may also issue unlisted Notes and/or Notes not admitted to trading on any markets. The Issuer has requested the CSSF to provide to the relevant competent authority of the Netherlands, Belgium, France, Poland, Italy, Germany, Austria and Spain respectively with a certificate of approval attesting that the Base Prospectus has been drawn up in accordance with the Prospectus Directive. In accordance with Article 18 of the Directive 2003/71/EC (the Prospectus Directive ) and Article 19 of the Luxembourg Act dated 10th July, 2005 on prospectuses for securities, the Issuer reserves the rights to request the CSSF to provide any other competent authority with a certificate of approval attesting that the Base Prospectus has been drawn up in accordance with the Prospectus Directive. Unless otherwise provided in the applicable Final Terms, Bearer Notes of each Tranche will initially be represented by a temporary global Note ( Temporary Global Note )or a permanent global note ( Permanent Global Note and, together with the Temporary Global Note, Global Notes ), in each case as specified in the relevant Final Terms and Registered Notes will be represented by a global certificate ( Global Certificate ). Each Global Note which is not intended to be issued in new global note ( NGN ) form (a Classic Global Note or CGN ), as specified in the relevant Final Terms or the Global Certificate for any issue will be deposited on the issue date thereof with, and the Global Certificate will be registered in the name of, or in the name of a nominee for, a common depositary on behalf of Euroclear Bank S.A./N.V. ( Euroclear ) and Clearstream Banking, société anonyme ( Clearstream, Luxembourg ) and/or any other clearing system as may be agreed between the Issuer and the relevant Dealer(s). Each Global Note which is intended to be issued in NGN form (a New Global Note or NGN ), as specified in the relevant Final Terms, will be deposited on or around the relevant issue date with a common safekeeper for Euroclear and/or Clearstream, Luxembourg. The Temporary Global Note will be exchangeable (as provided in the applicable Final Terms) for either a Permanent Global Note or Notes in definitive form ( Definitive Notes ), in each case (unless otherwise provided in the applicable Final Terms) upon certification as to non-u.s. beneficial ownership as required by U.S. Treasury regulations. Unless otherwise specified in the applicable Final Terms, a Permanent Global Note will be exchangeable for Definitive Notes, and a Global Certificate will be exchangeable for individual certificates ( Individual Certificates ), only in the limited circumstances described in Form of the Notes below. The Programme has been rated (including Senior Notes issued under it) by Moody s Investors Service Limited ( Moody s ), Standard & Poor s Ratings Services, a Division of the McGraw Hill Companies Inc. ( S&P ), and Fitch Ratings Limited ( Fitch ), respectively. Tranches of Notes issued under the Programme may be rated or unrated. Where a tranche of Notes is rated, such rating will not necessarily be the same as the ratings assigned to the Programme. Ratings in respect of Upper Tier II Subordinated Notes, Lower Tier II Subordinated Notes and Tier III Subordinated Notes will be sought from Moody s, S&P and Fitch at the time of issuance of any such Notes. A security 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. This Base Prospectus has been prepared on the basis that, except to the extent sub-paragraph (ii) below may apply, any offer of Notes in any Member State of the European Economic Area which has implemented the Prospectus Directive (each a Relevant Member State ) will 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 Base Prospectus as completed by Final Terms in relation to the offer of those Notes may only do so (i) in circumstances in which no obligation arises from the Issuer or the Dealers 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, or (ii) if a prospectus for such offer has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State and (in either case) published, all in accordance with the Prospectus Directive, provided that any such prospectus has subsequently been completed by Final Terms which specify that offers may be made other than pursuant to Article 3(2) of the Prospectus Directive in that Relevant Member State and such offer is made on or prior to the date specified for such purpose in such prospectus or Final Terms as applicable. Except to the extent sub-paragraph (ii) above may apply, neither the Issuer nor the Dealers have authorised, nor do they authorise, the making of any offer of Notes in circumstances in which an obligation arises for the Issuer or the Dealers to publish or supplement a prospectus for such offer. Arranger Fortis Bank Dealers BNP PARIBAS Citi Commerzbank Corporates & Markets Deutsche Bank Fortis Bank Goldman Sachs International JPMorgan Lehman Brothers Merrill Lynch International Morgan Stanley UBS Investment Bank

2 This Base Prospectus comprises a base prospectus for the purposes of Article 5.4 of the Prospectus Directive. The Issuer (the Responsible Person ) accepts responsibility for the information contained in this Base 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 Base Prospectus is in accordance with the facts and contains no omission likely to affect its import. Copies of Final Terms will be available from the registered office of the Issuer and the specified office set out below of each of the Paying Agents (as defined below) and will be published on the website of the Luxembourg Stock Exchange ( Each Tranche (as defined herein) of Notes will be issued on the terms set out herein under Terms and Conditions of the Notes (the Conditions ) as amended and/or supplemented by a document specific to such Tranche called Final Terms or in a separate prospectus specific to such Tranche (the Drawdown Prospectus ) as described under Final Terms and Drawdown Prospectuses below. In the case of a Tranche of Notes which is the subject of a Drawdown Prospectus, each reference in this Base Prospectus to information being specified or identified in the relevant Final Terms shall be read and construed as a reference to such information being specified or identified in the relevant Drawdown Prospectus unless the context requires otherwise. This Base Prospectus should be read in conjunction with any supplement hereto and any other documents or information incorporated herein by reference and in relation to any Tranche (as defined herein) of Notes which is the subject of Final Terms, must be read and construed together with the relevant Final Terms. The Dealers have not independently verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by the Dealers as to the accuracy or completeness of the information contained or incorporated in this Base Prospectus or any other information provided by the Issuer in respect of the Programme or Notes issued thereunder. No Dealer accepts any liability in relation to the information contained or incorporated by reference in this Base Prospectus or any other information provided by the Issuer in connection with the Programme or Notes issued thereunder. 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 Base Prospectus or any other information supplied in connection with the Programme or 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 of the Dealers. Neither this Base Prospectus nor any other information supplied in connection with the Programme or any Notes (i) is intended to provide the basis of any credit or other evaluation or (ii) should be considered as a recommendation by the Issuer or any of the Dealers that any recipient of this Base Prospectus or any other information supplied in connection with the Programme or any 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 Base Prospectus nor any other information supplied in connection with the Programme or the issue of any Notes constitutes an offer or invitation by, or on behalf of, the Issuer or any of the Dealers to any person to subscribe for, or to purchase, any Notes. Neither the delivery of this Base Prospectus or any Final Terms nor the offering, sale or delivery of any Notes shall in any circumstances imply that the information contained herein concerning the Issuer is correct at any time subsequent to the date hereof or the date upon which this Base Prospectus has been most recently supplemented or that there has been no adverse change or any event reasonably likely to involve any adverse change in the prospects or financial or trading position of the Issuer since the date thereof or, if later, the date upon which this Base Prospectus has been most recently supplemented or that any other information supplied in connection with the Programme is correct as of any time subsequent to the date indicated in the document containing the same. The Dealers expressly do not undertake to review the financial condition or affairs of the Issuer during the life of the Programme or to advise any investor in the Notes of any information coming to their attention. Neither this Base Prospectus nor any Final Terms constitutes an offer to sell or the solicitation of any offer to buy any 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 Base Prospectus and the offer or sale of Notes may be restricted by law in certain jurisdictions. The Issuer and the Dealers do not represent that this Base Prospectus may be lawfully distributed, or that any 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. In particular, no action 2

3 has been taken by the Issuer or the Dealers which would permit a public offering of any Notes outside Luxembourg, Belgium, France, Poland, Italy, Germany, Austria, Spain or the Netherlands, or distribution of this Base 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 Base 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 that all offers and sales by them will be made on the same terms. Persons into whose possession this Base Prospectus or any Notes come must inform themselves about, and observe, any such restriction on the distribution of this Base Prospectus and the offering and sale of Notes. In particular, there are restrictions on the distribution of this Base Prospectus and the offer or sale of Notes in the United States, the European Economic Area (including the United Kingdom, France, Belgium, Italy, Germany, Austria, Spain and the Netherlands) and Japan (see Subscription and Sale 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 the Bearer Notes are subject to U.S. tax law requirements. Subject to certain exceptions, Notes may not be offered, sold or delivered within the United States or to U.S. persons (see Subscription and Sale below). The Notes issued under the Programme are not a Collective Investment Scheme within the meaning of the Swiss Collective Investment Schemes Act of 23 June 2006 (the CISA ) and has not been approved by the Swiss Federal Banking Commission. The Notes issued under the Programme are neither issued nor guaranteed by a Swiss financial intermediary. All references in this document to U.S. dollars, U.S.$, $, USD and U.S. cent refer to the lawful currency of the United States of America, those to Japanese Yen, Yen, JPY and refer to the lawful currency of Japan, those to Sterling, GBP and refer to the lawful currency of the United Kingdom, those to Swiss Francs and CHF refer to the lawful currency of Switzerland, those to S$ refer to the lawful currency of Singapore and those to EUR, euro and E refer to the lawful currency of member states of the European Union that have adopted the single currency introduced in accordance with the Treaty establishing the European Community, as amended. The maximum aggregate principal amount of Notes outstanding at any one time under the Programme will not exceed EUR 12,000,000,000 (and for this purpose, any Notes denominated in another currency shall be translated into euros at the date of the agreement to issue such Notes (calculated in accordance with the provisions of the Programme Agreement)). The maximum aggregate principal amount of Notes which may be outstanding at any one time under the Programme may be increased from time to time, subject to compliance with the relevant provisions of the Programme Agreement as defined under Subscription and Sale. In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) named as the Stabilising Manager(s) (or persons acting on behalf of any Stabilising Manager(s)) in the applicable Final Terms may over-allot 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 persons acting on behalf of a 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 person(s) acting on behalf of any Stabilising Manager(s)) in accordance with all applicable laws and rules. 3

4 CONTENTS Page Summary of the Programme ; ; ; ; ; ; ; ; ; 5 Risk Factors ; ; ; ; ; ; ; ; ; ; ; 12 Final Terms and Drawdown Prospectuses ; ; ; ; ; ; ; 24 General Description of the Programme ; ; ; ; ; ; ; 25 Documents Incorporated by Reference ; ; ; ; ; ; ; 26 Form of the Notes ; ; ; ; ; ; ; ; ; ; 27 Form of Final Terms ; ; ; ; ; ; ; ; ; ; 30 Terms and Conditions of the Notes ; ; ; ; ; ; ; ; 53 Terms and Conditions of the Euro Notes ; ; ; ; ; ; 53 Terms and Conditions of the Luxembourg Notes ; ; ; ; ; 81 Schedule 1: Single Index ; ; ; ; ; ; ; ; ; 104 Schedule 2: Basket of Indices ; ; ; ; ; ; ; ; 109 Schedule 3: Equity-Linked Notes (Single Share) ; ; ; ; ; ; 114 Schedule 4: Basket of Shares ; ; ; ; ; ; ; ; 123 Schedule 5: First-to-Default Credit-Linked Notes with physical settlement ; ; 132 Schedule 6: First-to-Default Credit-Linked Notes with cash settlement ; ; ; 147 Schedule 7: Credit-Linked Notes with a Static Portfolio of reference entities as underlying 164 Schedule 8: Standard terms added as Annex of each CDS confirmation ; ; ; 189 Use of Proceeds ; ; ; ; ; ; ; ; ; ; 206 Description of the Issuer ; ; ; ; ; ; ; ; ; 207 Subscription and Sale; ; ; ; ; ; ; ; ; ; 231 Taxation ; ; ; ; ; ; ; ; ; ; ; 237 General Information ; ; ; ; ; ; ; ; ; ; 261 Consolidated Financial Statements for the Year Ending 31 December 2006 ; ; 263 4

5 SUMMARY OF THE PROGRAMME This summary must be read as an introduction to this Base Prospectus and any decision to invest in the Notes should be based on a consideration of this Base Prospectus as a whole, including the documents incorporated by reference. Following the implementation of the relevant provisions of the Prospectus Directive (Directive 2003/71/EC) in each Member State of the European Economic Area no civil liability will attach to the persons taking responsibility for the Base Prospectus (the Responsible Persons ) in any such Member State solely on the basis of this summary, including any translation thereof, unless it is misleading, inaccurate or inconsistent when read together with the other parts of this Base Prospectus. Where a claim relating to information contained in this Base Prospectus is brought before a court in a Member State of the European Economic Area, the plaintiff may, under the national legislation of the Member State where the claim is brought, be required to bear the costs of translating the Base Prospectus before the legal proceedings are initiated. Words and expressions defined in Form of the Notes and Terms and Conditions of the Notes shall have the same meaning in this summary. Issuer: Risk Factors: Fortis Banque Luxembourg S.A., either directly or acting through any specified branch (the Specified Branch ). There are certain factors that may affect the value of the Notes issued under the Programme. These are set out under Risk Factors below and include investment considerations relating to the business of Fortis Banque Luxembourg S.A., factors which are material for the purpose of assessing the market risks associated with Notes issued under the Programme and risks related to the market generally. In addition, there are certain factors which are material for the purpose of assessing the market risks associated with Notes issued under the Programme. (See Risk Factors ). The following is a brief summary of such factors: r r r r r r r r r r r r r as part of the financial services industry, the Issuer faces substantial competitive pressures which could adversely affect the Issuer s results of operations; market conditions can adversely affect the Issuer s results; market risk can adversely affect the Issuer s banking activities; asset illiquidity can adversely affect the Issuer s business; while the Issuer manages its operational risks, these risks remain an inherent part of all of its businesses; the Issuer has significant counterparty risk exposure; catastrophic events, terrorist attacks and other acts of war could have a negative impact on the Issuer s business and results; the Issuer s results of operations can be adversely affected by significant adverse regulatory developments including changes in tax law; the Notes may not be a suitable investment for all investors; there are risks related to the structure of a particular issue of Notes; there are risks related to Subordinated Notes; there are certain risks related to Notes generally; there are certain risks related to the market generally; and 5

6 r legal investment considerations may restrict certain investments. Description: Arranger: Dealers: Euro Medium Term Note Programme Fortis Bank nv-sa. BNP PARIBAS Citigroup Global Markets Limited Commerzbank Aktiengesellschaft Deutsche Bank AG, London Branch Fortis Bank nv-sa Goldman Sachs International J.P. Morgan Securities Ltd. Lehman Brothers International (Europe) Merrill Lynch International Morgan Stanley & Co. International plc UBS Limited The Issuer may from time to time terminate the appointment of any Dealer under the Programme or appoint additional Dealers, which appointment may be for a specific issue or on an ongoing basis. Regulatory matters: Issuing and Principal Paying Agent (the Agent ): Registrar and Transfer Agent (for the Euro Notes): Calculation Agent: Delivery Agent: Each issue of Notes denominated in a currency in respect of which particular laws, guidelines, regulations, restrictions or reporting requirements apply will only be issued in circumstances which comply with such laws, guidelines, regulations, restrictions or reporting requirements from time to time (see Subscription and Sale ). Fortis Banque Luxembourg S.A. Fortis Banque Luxembourg S.A. or any other agent(s) appointed from time to time. Fortis Banque Luxembourg S.A. or any other agent(s) appointed from time to time. Fortis Banque Luxembourg S.A. or any other agent(s) appointed from time to time. Final Terms or Drawdown Prospectus: Notes issued under the Programme may be issued either (1) pursuant to this Base Prospectus and associated Final Terms or (2) pursuant to a drawdown prospectus (each a Drawdown Prospectus ) prepared in connection with a particular Tranche of Notes. Programme Size: Distribution: Up to EUR 12,000,000,000 (or its equivalent in other currencies calculated as described in the Programme Agreement) outstanding at any time. The Issuer may increase the amount of the Programme in accordance with the terms of the Programme Agreement. Notes may be distributed by way of private or public placement and in each case on a syndicated or non-syndicated basis. 6

7 Status: Currencies: Redenomination: Maturities: Issue Price: Form of the Notes: Notes may be issued as either Senior Notes or Subordinated Notes. The Subordinated Notes may be issued as either Upper Tier II Subordinated Notes (subject to the prior approval of the terms thereof by the CSSF), Lower Tier II Subordinated Notes or Tier III Subordinated Notes, all as defined and described in the Terms and Conditions of the Notes. Subject to any applicable legal or regulatory restrictions, such currencies as may be agreed between the Issuer and the relevant Dealer as specified in the applicable Final Terms. The applicable Final Terms may provide that certain Notes may be redenominated in euro. Such maturities as may be agreed between the Issuer and the relevant Dealer and as indicated in the applicable Final Terms, subject to such minimum or maximum maturities as may be allowed or required from time to time by the relevant central bank (or equivalent body) or any laws or regulations applicable to the Issuer or the relevant Specified Currency. At the date of this Base Prospectus, the minimum maturity of all Senior Notes is one month and the Subordinated Notes will either be undated Notes ( Undated Subordinated Notes ) or will be dated Notes ( Dated Subordinated Notes ) in respect of which the minimum maturity is either five years (in the case of Upper Tier II Subordinated Notes or Lower Tier II Subordinated Notes) or two years (in the case of Tier III Subordinated Notes). Under the Luxembourg Law on Prospectuses for Securities which implements the Prospectus Directive, prospectuses for the offering to the public or for the admission to trading on regulated market of money market instruments having a maturity at issue of less than 12 months and complying also with the definition of securities are not subject to the approval provisions of such law and do not need to be approved by the CSSF. Notes may be issued on a fully-paid or a partly-paid basis and at an Issue Price (expressed either (i) as a percentage or (ii) as an amount in currency per Note of the relevant Specified Denomination) which is at par or at a discount to, or premium over, par. In the case of partly-paid Notes, the Issue Price will be payable in two or more instalments. Euro Notes will be issued in bearer form or registered form. Luxembourg Notes will be issued in bearer form only. Each Tranche of Notes will initially be in the form of either a Temporary Global Note or a Permanent Global Note, in each case as specified in the relevant Final Terms. Each Global Note which is not intended to be issued in new global note ( NGN ) form (a Classic Global Note or CGN ), as specified in the relevant Final Terms, will be deposited on or around the relevant Issue Date with a depositary or a common depositary for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system and each Global Note which is intended to be issued in NGN form (a New Global Note or NGN ), as specified in the relevant Final Terms, will be deposited on or around the relevant Issue Date with a common safekeeper for Euroclear and/or Clearstream, Luxembourg. Each Temporary Global Note will be exchangeable for a Permanent Global Note or, if so specified in the relevant Final Terms, for Definitive Notes. If the TEFRA D Rules are specified in the relevant Final Terms as applicable, certification as to non-u.s. beneficial ownership will be a condition precedent to any exchange of an interest in a 7

8 Temporary Global Note or receipt of any payment of interest in respect of a Temporary Global Note. Each Permanent Global Note will be exchangeable for Definitive Notes in accordance with its terms. Definitive Notes will, if interest-bearing, have Coupons attached and, if appropriate, a Talon for further Coupons. See Form of the Notes. Fixed Rate Notes: Floating Rate Notes: Fixed interest will be payable on such date or dates as may be agreed between the Issuer and the relevant Dealer and on redemption and will be calculated on the basis of such Day Count Fraction as may be agreed between the Issuer and the relevant Dealer as indicated in the applicable Final Terms. Floating Rate Notes will bear interest at a rate determined: (i) (ii) 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 ISDA Definitions; or on the basis of a reference rate appearing on the agreed screen page of a commercial quotation service; or (iii) on such other basis as may be agreed between the Issuer and the relevant Dealer. The margin (if any) relating to such floating rate will be agreed between the Issuer and the relevant Dealer for each Series of Floating Rate Notes. Index-Linked Notes: Other provisions in Relation to Floating Rate Notes and Index-Linked Interest Notes: Payments of principal in respect of Index-Linked Redemption Amount Notes or of interest in respect of Index-Linked Interest Notes will be calculated by reference to such index and/or formula or to changes in the price of securities or commodities or to such other factors as the Issuer and the relevant Dealer may agree. Floating Rate Notes and Index-Linked Interest Notes may also have a Maximum Interest Rate, a Minimum Interest Rate or both. Interest on Floating Rate Notes and Index-Linked Interest Notes in respect of each Interest Period, as agreed prior to issue by the Issuer and the relevant Dealer, will be payable on such Interest Payment Dates, and will be calculated on the basis of such Day Count Fraction as may be agreed between the Issuer and the relevant Dealer. Dual Currency Notes: Zero Coupon Notes: Asset-Linked Notes: Payments (whether in respect of principal or interest and whether at maturity or otherwise) in respect of Dual Currency Notes will be made in such currencies, and based on such rates of exchange, as the Issuer and the relevant Dealer may agree. Zero Coupon Notes will be offered and sold at a discount to their nominal amount and will not bear interest. Asset-Linked Notes relating to an underlying asset will be issued on the terms and conditions specified in the applicable Final Terms. Asset-Linked Notes will not be linked to the equity of the Issuer nor will they be linked to the equity of a member of the Fortis Group. Other Notes: Further terms applicable to Indexed Notes, High Interest Notes, Low Interest Notes, Step-up Notes, Step-down Notes, Dual Currency Notes, Reverse Dual Currency Notes, Optional Dual Currency Notes, 8

9 Partly Paid Notes, Credit-linked Notes, Snowball Notes, Thunderball Notes, Swing Notes, Target Redemption Notes, Range Accrual Notes, Autocallable Notes, Inflation Linked Notes, Equity Linked Notes, Index Linked Notes, or any variant, and any other type of Note which the Issuer and any Dealer or Dealers may agree to issue under the Programme will be set out in the relevant Final Terms. Redemption: The applicable Final Terms will indicate either that the relevant Notes cannot be redeemed prior to their stated maturity (other than in specified instalments, if applicable, or for taxation reasons or following an Event of Default) or that such Notes will be redeemable at the option of the Issuer (in whole or in part) and/or, in the case of Senior Notes, the Noteholders upon giving such period of notice as may be agreed between the Issuer and the relevant Dealer. The Issuer may also issue Notes the terms of which permit it to pay and/or discharge its obligations with respect of such Notes by the payment or delivery of securities and/or other property or any combination of cash, securities and/or other property. The terms of such Notes and the conditions upon which such payment and/or discharge may be effected will be set out in full in the applicable Final Terms or Drawdown Prospectus, as appropriate. The applicable Final Terms may provide that Notes may be redeemable in two or more instalments of such amounts and on such dates as are indicated in the applicable Final Terms. Dated Subordinated Notes which are Upper Tier II Subordinated Notes will be redeemed at maturity only with the prior approval of the CSSF. Unless the CSSF otherwise agrees, Undated Subordinated Notes which are either Upper Tier II Subordinated Notes or Lower Tier II Subordinated Notes may be redeemed by the Issuer on giving 5 years notice and Undated Subordinated Notes which are Tier III Subordinated Notes may be redeemed by the Issuer on giving 2 years notice, in the case of Upper Tier II Subordinated Notes subject to the prior approval of the CSSF. Any early redemption of Dated Subordinated Notes will be subject to the prior approval of the CSSF. In addition, in the case of Tier III Subordinated Notes, redemption may not be permitted if after payment the Issuer would no longer meet 100 per cent. of the integrated capital adequacy ratio ( Integrated Capital Adequacy Ratio ) as defined in the Circular 2000/10 of the CSSF (as amended by Circular 04/144 and Circular 04/156 of the CSSF) on the definition of own funds ratios pursuant to Article 56 of the law of 5th April, 1993 on the financial sector, as amended, as such circular may be amended or supplemented from time to time. Denomination of Notes: Notes will be issued in such denominations as may be agreed between the Issuer and the relevant Dealer, save that the minimum denomination of each Note will be such amount as may be allowed or required from time to time by the relevant central bank (or equivalent body) or any laws or regulations applicable to the relevant Specified Currency and save that the minimum denomination of each Note admitted to trading on a regulated market within the European Economic Area or offered to the public in a Member State of the European Economic Area in circumstances which require the publication of a prospectus under the Prospectus Directive will be 9

10 E1,000 (or, if the Notes are denominated in a currency other than euro, the near equivalent amount in such currency). Taxation: Negative Pledge: All payments in respect of the Notes will be made without deduction for or on account of withholding taxes imposed within Luxembourg or the jurisdiction in which the Specified Branch (if any) is located, subject as provided in Condition 8 in the case of Euro Notes, or Condition 7 in the case of Luxembourg Notes. Unless otherwise specified in the applicable Final Terms, the terms of the Euro Notes (other than Subordinated Notes) will contain a negative pledge provision as further described in Condition 3 of the Euro Notes. The terms of the Subordinated Notes and the terms of the Luxembourg Notes will not contain a negative pledge provision. Cross Default: Unless otherwise specified in the applicable Final Terms, the terms of the Euro Notes (other than Subordinated Notes) will contain a cross-default provision as further described in Condition 10 of the Euro Notes. The terms of the Subordinated Notes and the terms of the Luxembourg Notes will not contain a cross-default provision. Status of Senior Notes: The Senior Notes will constitute direct, unconditional, unsubordinated and, subject to the provisions of Condition 3 of the Euro Notes, unsecured obligations of the Issuer and will rank pari passu among themselves and (save for certain debts required to be preferred by law) equally with all other present and future unsecured and unsubordinated obligations of the Issuer, from time to time outstanding. Status and characteristics relating to Subordinated Notes: The Subordinated Notes (which are governed by Luxembourg law) may be issued as (i) Upper Tier II Subordinated Notes, the terms of which are not contained herein but will be set out in full in the applicable Final Terms and will be subject to the prior approval of the CSSF as to qualification as Upper Tier II Subordinated Notes, (ii) Lower Tier II Subordinated Notes, the terms of which are set out herein or (iii) Tier III Subordinated Notes, the terms of which are set out herein, and which may be dated or undated as described under Maturities above. Subordinated Notes will constitute direct, unsecured, subordinated and unconditional obligations of the Issuer, all as described in Terms and Conditions of the Euro Notes or Terms and Conditions of the Luxembourg Notes, as the case may be. Ratings: The Programme has been rated (including Senior Notes issued under it) by Moody s Investors Service Limited ( Moody s ), Standard & Poor s Ratings Services, a Division of the McGraw Hill Companies Inc. ( S&P ), and Fitch Ratings Limited ( Fitch ), respectively. Tranches of Notes issued under the Programme may be rated or unrated. Where a tranche of Notes is rated, such rating will not necessarily be the same as the ratings assigned to the Programme. Ratings in respect of Upper Tier II Subordinated Notes, Lower Tier II Subordinated Notes and Tier III Subordinated Notes will be sought from Moody s, S&P and Fitch at the time of issuance of any such Notes. 10

11 The rating of the Notes to be issued under the Programme will be specified in the applicable Final Terms. 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. Listing and Admission to Trading: Application has been made to the CSSF to approve this document as a base prospectus. Application has been made to the Luxembourg Stock Exchange for Notes issued under the Programme to be listed on the Official List and admitted to trading on the Bourse de Luxembourg, which is the regulated market of the Luxembourg Stock Exchange. Application has also been made to the Luxembourg Stock Exchange for Notes issued under the Programme during the 12 months from the date of this Base Prospectus to be admitted to trading on the Luxembourg Stock Exchange s alternative market Euro MTF and to be listed on the Official List of the Luxembourg Stock Exchange. Application has also been made to the SWX to approve this document as a Swiss listing prospectus and for Notes issued under the Programme to be admitted to listing and/or trading on SWX. The Notes may also be listed or admitted, as the case may be on such other or further stock exchange(s) or markets as may be agreed between the Issuer and the relevant Dealer in relation to each Series. Notes which are neither listed nor admitted to trading on any market may also be issued. The applicable Final Terms will state whether or not the relevant Notes are to be listed and/or admitted to trading and if so, on which stock exchanges and/or markets. Governing Law: The Euro Notes will be governed by, and construed in accordance with, English law (save, in the case of Subordinated Notes, which shall be governed by, and construed in accordance with, Luxembourg law). The Luxembourg Notes will be governed by, and construed in accordance with, Luxembourg law. Upper Tier II Subordinated Notes, Lower Tier II Subordinated Notes and Tier III Subordinated Notes will be governed by, and construed in accordance with, Luxembourg law. Selling Restrictions: United States Selling Restrictions: There are restrictions on the offer, sale and transfer of the Notes in the United States, the European Economic Area (including the United Kingdom, France, Spain, Belgium, Italy, Germany, Austria and the Netherlands) and Switzerland, Japan, Hong Kong, Singapore and such other jurisdictions as may be relevant in connection with the offering and sale of a particular Tranche of Notes. See Subscription and Sale below. Regulation S, Category 2. TEFRA C or D/TEFRA not applicable, as specified in the applicable Final Terms. 11

12 RISK FACTORS The Issuer believes that the following factors may affect the value of the Notes issued under the Programme. Most 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. In addition, factors which are material for the purpose of assessing the market risks associated with Notes issued under the Programme are also described below. The Issuer believes that the factors described below represent the principal risks inherent in investing in Notes issued under the Programme, but the inability of the Issuer to pay interest, principal or other amounts on or in connection with any Notes may occur for other reasons and which may not be considered significant risks by the Issuer based on information currently available to it or which it may not currently be able to anticipate. Prospective investors should also read the detailed information set out elsewhere in this Base Prospectus and reach their own views prior to making any investment decision. Factors that may affect the value of the Notes issued under the Programme Investment considerations Relating to the business of Fortis Banque Luxembourg S.A. As part of the financial services industry, the Issuer faces substantial competitive pressures which could adversely affect the Issuer s results of operations. There is substantial competition in Luxembourg and the other regions in which the Issuer does business for the types of banking and other products and services which the Issuer provides. As a result, the Issuer s strategy is to maintain customer loyalty and retention which can be influenced by a number of factors, including service levels, the prices and attributes of products and services, financial strength and claims-paying ratings and actions taken by competitors. If the Issuer is unable to compete with attractive product and service offerings that are profitable, the Issuer may lose market share or incur losses on some or all activities. Competition in the financial services industry is affected by the high level of consolidation, both at a national and an international level, in the markets in which the Issuer operates as well as the emergence of alternative distribution channels for many of the products the Issuer offers. Consumer demand, technological changes, regulatory actions and other factors also affect competition. The implementation of the euro also resulted in increased cross-border competition. Competitive pressures could result in increased pricing pressures on a number of the Issuer s products and services, particularly as competitors seek to win market share, and may harm the Issuer s ability to maintain or increase profitability. Market conditions can adversely affect the Issuer s results. The Issuer s business segments are affected by market conditions, which can cause results to fluctuate from year to year as well as on a long-term basis. These conditions include economic cycles such as financial market cycles, including volatile movements in market prices, and banking industry cycles. Fluctuations in interest rates and exchange rates, monetary policy, consumer and business spending and demographics and competitive and other factors also influence the Issuer s performance. As a result of changing market conditions and the influence of financial and industry cycles, the Issuer s results of operations are subject to volatility that may be outside the control of the Issuer. In particular, the Issuer s merchant banking activities income and profit or loss before taxation may vary significantly from year to year depending on market conditions. Market risk can adversely affect the Issuer s banking activities. Market risk can negatively affect the Issuer s merchant banking activities. Market risk is the risk of losses due to sharp fluctuations on the financial markets in share prices, interest rates, exchange rates or property prices. These fluctuations also create risks which impact on the structural positions of the banking activities and on the trading positions taken by the banking business (trading risk). In the banking activities, the fixed-rate period of the assets is longer than that of the liabilities, since banks traditionally receive funds in the shorter term and reinvest them for the longer term. As a result, an upward 12

13 movement in the yield curve on the capital market will lead to a more pronounced fall in the value of the assets than in the value of the liabilities. This also has the effect of reducing the value of the Issuer (which is after all the difference between its assets and liabilities). A movement in the opposite direction naturally increases the Issuer s value. A decline in the stock or bond markets would adversely affect investments, could reduce market liquidity, and could reduce the popularity of products linked to financial assets. Market downturns and high volatility can occur not only as a result of purely economic factors, but also as a result of war, acts of terrorism, natural disasters, or other similar events. As mentioned above, the results of the Issuer s banking operations are also affected by its management of interest rate sensitivity. Interest rate sensitivity refers to the relationship between changes in market interest rates and changes in net interest income. The composition of the Issuer s banking assets and liabilities, and any gap position resulting from the composition, causes the banking operations net interest income to vary with changes in interest rates. In addition, variations in interest rate sensitivity may exist within the repricing periods or between the different currencies in which the Issuer s holds interest rate positions. A mismatch of interest-earning assets and interest-bearing liabilities in any given period may, in the event of changes in interest rates, have a material effect on the financial condition or result from operations of the Issuer s banking business. Asset illiquidity can adversely affect the Issuer s business. Liquidity risk is inherent in much of the Issuer s business. Each asset purchased and liability sold has liquidity characteristics that are unique. Some liabilities are surrenderable while some assets have low liquidity such as privately placed loans, mortgages loans, real estate and limited partnership interests. Additionally, protracted market declines can reduce the liquidity of markets that are typically liquid. If, in the course of its insurance or other activities, the Issuer requires significant amounts of cash on short notice in excess of anticipated cash requirements, the Issuer may have difficulty selling these investments at attractive prices, in a timely manner, or both. While the Issuer manages its operational risks, these risks remain an inherent part of all of its businesses. The operational risks that the Issuer faces include the possibility of inadequate or failed internal or external processes or systems, human error, regulatory breaches, employee misconduct or external events such as fraud. These events can potentially result in financial loss as well as harm to the Issuer s reputation. Additionally, the loss of key personnel could adversely affect the Issuer s operations and results. The Issuer s business inherently generates operational risks. The business is dependent on processing a large number of complex transactions across numerous and diverse products, and is subject to a number of different legal and regulatory regimes. Additionally, because of the long-term nature of much of the Issuer s business, accurate records have to be maintained for significant periods. The Issuer attempts to keep operational risks at appropriate levels by maintaining a sound and well controlled environment in light of the characteristics of its business, the markets and the regulatory environments in which it operates. While these control measures mitigate operational risks they do not eliminate them. The Issuer has significant counterparty risk exposure. The Issuer is subject to general credit risks, including credit risks of borrowers. Third parties that owe the Issuer money, securities or other assets may not pay or perform under their obligations. These parties include borrowers under loans made, the issuers whose securities the Issuer holds, customers, trading counterparties, counterparties under swaps and credit and other derivative contracts, clearing agents, exchanges, clearing houses and other financial intermediaries. These parties may default on their obligations to the Issuer due to bankruptcy, lack of liquidity, downturns in the economy or real estate values, operational failure or other reasons. Catastrophic events, terrorist attacks and other acts of war could have a negative impact on the Issuer s business and results. Catastrophic events, terrorist attacks, other acts of war or hostility, and responses to those acts may create economic and political uncertainties, which could have a negative impact on economic conditions in the regions in which the Issuer operates and, more specifically, on the business and results of the Issuer in ways that cannot be predicted. 13