Obligation Accor SA 2.625% ( FR0011731876 ) en EUR

Accor SA

100 % ▼

France

FR0011731876 ( en EUR )

2.625% par an ( paiement annuel )

04/02/2021 - Obligation échue

Prospectus brochure de l'obligation Accor SA FR0011731876 en EUR 2.625%, échue

100 000 EUR

900 000 000 EUR

Accor SA est un groupe hôtelier français multinational opérant une large gamme d'hôtels, resorts et autres hébergements à travers le monde, sous diverses marques et segments de marché.

L'Obligation émise par Accor SA ( France ) , en EUR, avec le code ISIN FR0011731876, paye un coupon de 2.625% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 04/02/2021

PROSPECTUS DATED 3 FEBRUARY 2014

Accor
(a société anonyme incorporated in France)
750,000,000
2.625 per cent. Bonds due 2021
Issue Price: 99.076 per cent.
The 750,000,000 2.625 per cent. Bonds due 2021 (the "Bonds") of Accor (the "Issuer") will be issued outside the Republic of
France for the purpose of Article L.228-90 of the French Code de commerce and will mature on 5 February 2021.
Interest on the Bonds will accrue at the rate of 2.625 per cent. per annum from 5 February 2014 (the "Issue Date") and will be payable
in Euro annually in arrear on 5 February in each year, commencing on 5 February 2015. Payments of principal and interest on the
Bonds will be made without deduction for or on account of taxes of the Republic of France (See "Terms and Conditions of the
Bonds-- Taxation").
Unless previously purchased and cancelled, the Bonds may not be redeemed prior to 5 February 2021. The Bonds may, and in certain
circumstances shall, be redeemed, in whole but not in part, at their principal amount together with accrued interest in the event that
certain French taxes are imposed (See "Terms and Conditions of the Bonds--Redemption and Purchase") or at the option of the Issuer
in accordance with Condition 4(c) (Redemption at the option of the Issuer) or at the option of Bondholders in accordance with
Condition 4(d) (Redemption at the option of Bondholders following a Change of Control).
The Bonds will, upon issue on 5 February 2014, be inscribed (inscription en compte) in the books of Euroclear France which shall
credit the accounts of the Account Holders (as defined in "Terms and Conditions of the Bonds--Form, Denomination and Title")
including Euroclear Bank S.A./N.V. ("Euroclear") and the depositary bank for Clearstream Banking, société anonyme
("Clearstream, Luxembourg").
The Bonds will be in dematerialised bearer form in the denomination of 100,000. The Bonds will at all times be represented in book
entry form (inscription en compte) in the books of the Account Holders in compliance with Article L.211-3 of the French Code
monétaire et financier. No physical document of title (including certificats représentatifs pursuant to Article R.211-7 of the French
Code monétaire et financier) will be issued in respect of the Bonds.
Application has been made to the Commission de Surveillance du Secteur Financier (the "CSSF") in its capacity as competent
authority under the Luxembourg Act dated 10 July 2005 relating to prospectuses for securities, as amended (the "Luxembourg
Prospectus Act"), for the approval of this Prospectus as a prospectus for the purposes of Article 5.3 of Directive 2003/71/EC, as
amended (the "Prospectus Directive"). Application has also been made to the Luxembourg Stock Exchange for the Bonds to be listed
on the official list of the Luxembourg Stock Exchange (the "Official List") and admitted to trading on the Luxembourg Stock
Exchange's regulated market. The Luxembourg Stock Exchange's regulated market is a regulated market for the purposes of Directive
2004/39/EC of the European Parliament and of the Council on markets in financial instruments. Pursuant to Article 7(7) of the
Luxembourg Prospectus Act, by approving this Prospectus, the CSSF gives no undertaking as to the economic and financial soundness
of the Bonds to be issued hereunder and the quality or solvency of the Issuer.
The Bonds are expected to be rated BBB- by Standard & Poor's Ratings Services ("S&P") and a rating of BBB- by Fitch Ratings Ltd.
("Fitch"). The Issuer's long-term senior unsecured debt is rated BBB- by S&P. A security rating is not a recommendation to buy, sell
or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating agency. Each of S&P
and Fitch is established in the European Union and is registered under Regulation (EC) No 1060/2009 as amended (the "CRA
Regulation") and is included in the list of registered credit rating agencies published on the website of the European Securities and
Markets Authority (www.esma.europa.eu/page/List-registered-and-certified-CRAs).
Prospective investors should have regard to the factors described in the section headed "Risk Factors" in this Prospectus.
Global Coordinator
Société Générale Corporate & Investment Banking
Joint Lead Managers
Crédit Agricole CIB
HSBC
Société Générale Corporate &
Natixis
Investment Banking
UBS Investment Bank
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This Prospectus constitutes a prospectus for the purposes of Article 5.3 of the Prospectus Directive, and has
been prepared for the purpose of giving information with regard to Accor (the "Issuer"), the Issuer and its
subsidiaries and affiliates taken as a whole (the "Group") and the Bonds which is necessary to enable
investors to make an informed assessment of the assets and liabilities, financial position and profit and
losses of the Issuer.
This Prospectus is to be read in conjunction with all the documents which are incorporated herein by
reference.
This Prospectus does not constitute an offer of, or an invitation by or on behalf of the Issuer or the Joint
Lead Managers (as defined in "Subscription and Sale" below) to subscribe or purchase, any of the Bonds.
The distribution of this Prospectus and the offering of the Bonds in certain jurisdictions may be restricted
by law. Persons into whose possession this Prospectus comes are required by the Issuer and the Joint Lead
Managers to inform themselves about and to observe any such restrictions. The Bonds have not been and
will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act").
Subject to certain exceptions, the Bonds may not be offered, sold or delivered within the United States or to
the account or benefit of U.S. persons (as defined in Regulation S under the Securities Act
("Regulation S")). For a description of certain restrictions on offers and sales of Bonds and on distribution
of this Prospectus, see "Subscription and Sale".
No person is authorised to give any information or to make any representation not contained in this
Prospectus and any information or representation not so contained must not be relied upon as having been
authorised by or on behalf of the Issuer or the Joint Lead Managers. Neither the delivery of this Prospectus
nor any sale made in connection herewith shall, under any circumstances, create any implication that there
has been no change in the affairs of the Issuer since the date hereof or the date upon which this Prospectus
has been most recently amended or supplemented or that there has been no adverse change in the financial
position of the Issuer since the date hereof or the date upon which this Prospectus has been most recently
amended or supplemented or that the information contained in it or any other information supplied in
connection with the Bonds is correct as of any time subsequent to the date on which it is supplied or, if
different, the date indicated in the document containing the same.
To the extent permitted by law, each of the Joint Lead Managers accepts no responsibility whatsoever for
the content of this Prospectus or for any other statement in connection with the Issuer.
The Joint Lead Managers have not separately verified the information contained in this Prospectus in
connection with the Issuer. None of the Joint Lead Managers makes any representation, express or implied,
or accepts any responsibility, with respect to the accuracy or completeness of any of the information in this
Prospectus in connection with the Issuer. Neither this Prospectus nor any other financial statements are
intended to provide the basis of any credit or other evaluation and should not be considered as a
recommendation by any of the Issuer and the Joint Lead Managers that any recipient of this Prospectus or
any other financial statements should purchase the Bonds. Each potential purchaser of Bonds should
determine for itself the relevance of the information contained in this Prospectus and its purchase of Bonds
should be based upon such investigation as it deems necessary. None of the Joint Lead Managers
undertakes to review the financial condition or affairs of the Issuer during the life of the arrangements
contemplated by this Prospectus nor to advise any investor or potential investor in the Bonds of any
information coming to the attention of any of the Joint Lead Managers.
In this Prospectus, unless otherwise specified, references to a "Member State" are references to a Member
State of the European Economic Area, references to "EUR" or "euro" or "" are to the single 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.
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In connection with the issue of the Bonds, Société Générale (the "Stabilising Manager") (or any person
acting on behalf of the Stabilising Manager) may over-allot Bonds or effect transactions with a view to
supporting the market price of the Bonds at a level higher than that which might otherwise prevail.
However, there is no assurance that the Stabilising Manager (or any person acting on behalf of the
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 Bonds 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 and 60 days
after the date of the allotment of the Bonds. Any stabilisation action or over-allotment must be conducted
by the relevant Stabilising Manager (or any person acting on behalf of the Stabilising Manager) to the
extent and in accordance with all applicable laws and regulations.

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TABLE OF CONTENTS
Page
RISK FACTORS .................................................................................................................................... 5
DOCUMENTS INCORPORATED BY REFERENCE ........................................................................ 12
PERSONS RESPONSIBLE FOR THE INFORMATION GIVEN IN THE PROSPECTUS ............... 15
TERMS AND CONDITIONS OF THE BONDS ................................................................................. 16
USE OF PROCEEDS ........................................................................................................................... 28
RECENT DEVELOPMENTS .............................................................................................................. 29
TAXATION .......................................................................................................................................... 49
SUBSCRIPTION AND SALE ............................................................................................................. 52
GENERAL INFORMATION ............................................................................................................... 54

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RISK FACTORS
The following are certain risk factors of the offering of the Bonds of which prospective investors should be
aware. Prior to making an investment decision, prospective investors should consider carefully all of the
information set out in this Prospectus, including in particular the following risk factors detailed below. This
description is not intended to be exhaustive and prospective investors should make their own independent
evaluations of all risk factors and should also read the detailed information set out elsewhere in this
Prospectus.
The terms defined in "Terms and Conditions of the Bonds" shall have the same meaning where used below.
Risks related to the Issuer
See "Documents incorporated by reference" in this Prospectus.
Claims and litigation risk
Accor is also subject to risks relating to claims and litigation proceedings.
CIWLT tax audit
A tax audit was carried out on the permanent branch in France of Compagnie Internationale des Wagons
Lits et du Tourisme (CIWLT), a Belgian company that is 99.78 per cent.-owned by Accor. Following the
audit for the years 1998 to 2002 and 2003, the French tax authorities concluded that CIWLT's seat of
management was located in France not in Belgium.
Accordingly, the French tax authorities added back CIWLT's profits in Belgium for the purpose of
calculating income tax payable in France. The resulting reassessments, for a total of 263 million including
late interest, had been contested by CIWLT, on the basis of the notice received from the Belgian tax
authorities confirming that its seat of management was in Belgium.
CIWLT subsequently asked the Cergy Pontoise Administrative Court to rule on the contested
reassessments. On 12 December 2008 and 12 May 2011, the court found against CIWLT concerning the
reassessments for the years 1998 to 2002 and the year 2003. For the years 1998 to 2002 and 2003, CIWLT
decided to appeal this ruling before the Versailles Administrative Court of Appeal on 10 February 2009 and
on 11 July 2011.
Under French law, collection of the tax deficiencies is not suspended while the appeal is being heard.
For the years 1998 to 2002, 242.5 million was paid at the end of February 2009. The tax deficiencies and
penalties for 2003, in an amount of 17.5 million, were paid in July 2011, while the estimated 2.7 million
in late interest was paid in August 2011. They were recognized as an asset in the balance sheet.
For the years 1998 to 2002, on 1 February 2011, the reporting judge read out his conclusions and stated that
he did not support CIWLT's case.
In a ruling handed down on 15 March 2011, the Versailles Administrative Court of Appeal found against
CIWLT for the period 1998 to 2002. To appeal the ruling, CIWLT filed a summary motion to institute
proceedings with the French Supreme Court of Appeal (Conseil d'Etat) on 12 May 2011, followed by a
supplementary brief on 10 August 2011. As regards 2003, the appeal has not yet been heard by the
Versailles Administrative Court of Appeal.
In light of these unfavorable developments, the tax receivable recognized as an asset in the balance sheet at
31 December 2010 was written down by 242.5 million in 2010 and an additional provision of
approximately 20.6 million was set aside, corresponding to the tax deficiency for 2003 and estimated late
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interest up to 31 December 2010. Following payment of the tax deficiency in July and August 2011, a tax
receivable was recognised as an asset in the balance sheet in an amount of 20.2 million. The asset was
immediately written down in full by transferring the same amount from the existing 20.6 million
provision, of which the remainder, i.e. 0.4 million, was reversed.
Based on the reporting judge's conclusions, on 28 December 2012 the Supreme Court of Appeal issued a
ruling rejecting CIWLT's application to appeal the Versailles Court's ruling.
This decision meant that the 242.5 million tax reassessment became final. However, this had no impact on
CIWLT's income statement because the tax receivable was already written down in full. In CIWLT's 2012
financial statements, the 242.5 million tax receivable has been written off and the corresponding provision
has been reversed. These accounting entries had no adverse effect on the company's cash position, as the
tax had been paid in February 2009.
In a ruling handed down on 21 May 2013, the Versailles Administrative Court of Appeal also found against
CIWLT for the year 2003. CIWLT appealed this ruling before the French Supreme Court of Appeal in
August 2013. This appeal has been admitted and the French Supreme Court of Appeal will have to rule on
the validity or not of the ruling of the Versailles Administrative Court of Appeal found against CIWLT.
Dividend withholding tax (précompte)
In 2002, Accor mounted a legal challenge to its obligation to pay withholding tax (précompte) on the
redistribution of European source dividends.
Until 2004, French parent companies were entitled to a 50 per cent. tax credit on dividends received from
French subsidiaries, which could be set off against the précompte withholding tax. However, no tax credit
was attached to European source dividends. Accor contested this rule, on the grounds that it breached
European Union rules.
In the dispute between Accor and the French State, on 21 December 2006 the Versailles Administrative
Court ruled that Accor was entitled to a refund of the précompte dividend withholding tax paid in the
period 1999 to 2001, in the amount of 156 million.
The amount of 156 million was refunded to Accor during the first-half of 2007, together with 36.4
million in late interest due by the French State.
However, on 8 March 2007, the French State appealed the ruling before the Versailles Administrative Court
of Appeal. The French State's appeal was rejected on 20 May 2008.
As the French State had not yet exhausted all avenues of appeal, a liability was recognized for the amounts
received and the financial impact of the rulings by the Versailles Administrative Court and Court of Appeal
was not recognized in the financial statements.
On 3 July 2009, the French Supreme Court of Appeal announced that it would postpone ruling on the
French State's appeal and on 4 August 2009, it applied to the Court of Justice of the European Communities
("ECJ") for a preliminary ruling on this issue.
After reviewing the matter, the ECJ's final ruling was handed down on 15 September 2011. In this ruling,
the ECJ held that the French précompte/tax credit system restricts the freedom of establishment and free
movement of capital.
During 2011 and 2012, Accor and the tax authorities submitted various briefs to the Supreme Court of
Appeal and Accor produced documentary evidence of the EU source dividends and of the tax paid by its
European subsidiaries on the distributed amount.
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On 21 November 2012, the Supreme Court of Appeal met to review the reporting judge's conclusions. In
summary, the reporting judge considered that the dividend tax credit and précompte withholding tax
systems had been shown to be incompatible.
However, he also considered that the amount to be refunded was subject to strict rules which, to all intents
and purposes, restricted Accor's right to a refund.
On 10 December 2012, the Supreme Court of Appeal handed down a ruling closely aligned with the
reporting judge's conclusions, according to which Accor was entitled to 6.3 million of the 156 million
already refunded. In addition to the 149.7 million to be returned to the French State, Accor is also required
to repay the late interest received in 2007, amounting to approximately 36.4 million, less the portion
related to the retained refund of 6.3 million. In all, 184.7 million in principal and interest was repaid to
the French State during the first-half 2013.
In the 2012 financial statements, the 6.3 million précompte dividend withholding tax refunded to Accor
and not repayable to the French State has been credited to a reserve account (see Changes in Consolidated
Shareholders' Equity). The estimated 1.4 million in late interest received on this amount was considered
as offsetting the early payment of tax, and was therefore recorded as a tax benefit in the income statement.
The total amount repaid to the French State, representing approximately 184.7 million, led to an increase
in net debt of the same amount.
Accor has noted the Supreme Court of Appeal's decision and intends to continue to use the avenues
available to it to defend its position in the dispute with the French tax authorities.
On 7 February 2007, Accor filed an application originating proceedings before the Cergy Pontoise
Administrative Court on the same grounds, to obtain a refund of the 187 million in précompte dividend
withholding tax paid in the period 2002 to 2004. There were no developments concerning this matter in
2012 and 2013.
Tax dispute in Italy
In October 2011, the Italian tax authorities notified several Accor and Edenred subsidiaries of a 27.4
million tax reassessment concerning registration duties. The reassessment is based on the requalification as
the sale of a business subject to registration duty of a number of transactions carried out as part of the
reorganisation of Accor's Services division in Italy between 2006 and 2010.
The Accor and Edenred companies concerned wrote to the Italian authorities on 16 December 2011
contesting the reassessments.
The reassessment notices required settlement of the tax deficiencies within 60 days and the companies
concerned therefore paid the amounts claimed on 16 December 2011. The cost was shared equally between
Accor and Edenred pursuant to an agreement assigning the risk and any resulting costs to the two parties on
a 50/50 basis.
The companies believe that the tax reassessment is without merit and, after consulting with their legal and
tax advisors, consider that their challenges have a reasonable chance of success. No related impact was
recorded in Accor's 2011 consolidated income statements. There were no developments concerning this
matter in the first-half of 2013.
Other claims and litigation
In the normal course of its business, the Group is exposed to claims, litigations and proceedings that may
be in progress, pending or threatened. Accor believes that these claims, litigations and proceedings have not
and will not give rise to any material costs at Group level and have not and will not have a material adverse
effect on the Group's financial position, business and/or results of operations.
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Risks related to the Bonds
The Bonds may not be a suitable investment for all investors
Each potential investor in the Bonds must determine the suitability of that investment in light of its own
circumstances. In particular, each potential investor should:
(i)
have sufficient knowledge and experience to make a meaningful evaluation of the Bonds, the merits
and risks of investing in the Bonds and the information contained or incorporated by reference in
this Prospectus or any applicable supplement;
(ii)
have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its
particular financial situation, an investment in the Bonds and the impact the Bonds will have on its
overall investment portfolio;
(iii) have sufficient financial resources and liquidity to bear all of the risks of an investment in the
Bonds, including where the currency for principal or interest payments is different from the potential
investor's currency;
(iv)
understand thoroughly the terms of the Bonds and be familiar with the behaviour of any relevant
indices and financial markets; and
(v)
be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for
economic, interest rate and other factors that may affect its investment and its ability to bear the
applicable risks.
Risks related to the market generally
Set out below is a brief description of the principal market risks, including liquidity risk, exchange rate risk,
interest rate risk and credit risk:
The secondary market generally
The Bonds may have no established trading market when issued, and one may never develop. If a market
does develop, it may not be very liquid. Therefore, investors may not be able to sell their Bonds in the
secondary market in which case the market or trading price and liquidity may be adversely affected or at
prices that will provide them with a yield comparable to similar investments that have a developed
secondary market.
Exchange rate risks and exchange controls
The Issuer will pay principal and interest on the Bonds in Euro. This presents certain risks relating to
currency conversions if an investor's financial activities are denominated principally in a currency or
currency unit (the "Investor's Currency") other than Euro. These include the risk that exchange rates may
change significantly (including changes due to devaluation of Euro or revaluation of the Investor's
Currency) and the risk that authorities with jurisdiction over the Investor's Currency may impose or modify
exchange controls. An appreciation in the value of the Investor's Currency relative to the Euro would
decrease (i) the Investor's Currency-equivalent yield on the Bonds, (ii) the Investor's Currency-equivalent
value of the principal payable on the Bonds and (iii) the Investor's Currency-equivalent market value of the
Bonds.
Government and monetary authorities may impose (as some have done in the past) exchange controls that
could adversely affect an applicable exchange rate. As a result, investors may receive less interest or
principal than expected, or no interest or principal.
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Interest rate risks
Investment in the Bonds involves the risk that subsequent changes in market interest rates may adversely
affect the value of the Bonds.
The Bonds may be redeemed prior to maturity
In the event that the Issuer would be obliged to pay additional amounts payable in respect of any Bonds due
to any withholding as provided in Condition 4(b), the Issuer may redeem all outstanding Bonds in
accordance with such Terms and Conditions.
In addition, the Issuer has the option to redeem all (but not some only) of the Bonds as provided in
Condition 4(c) of the Terms and Conditions of the Bonds. If the market interest rates decrease, the risk to
Bondholders that the Issuer will exercise its right of early redemption increases. As a consequence, the
yields received upon such early redemption may be lower than expected, and the redeemed face amount of
the Bonds may be lower than the purchase price paid for such Bonds by the Bondholder where the purchase
price was above par. As a consequence, part of the capital invested by the Bondholder may be lost, so that
the Bondholder in such case would not receive the total amount of the capital invested. However, the
redeemed face amount of the Bonds may not be below par. In addition, investors that choose to reinvest
monies they receive through an early redemption may be able to do so only in securities with a lower yield
than such redeemed Bonds.
Exercise of put option in respect of certain Bonds may affect the liquidity of the Bonds in respect of
which such put option is not exercised
Depending on the number of Bonds in respect of which the put option provided in Condition 4(d) is
exercised, any trading market in respect of those Bonds in respect of which such put option is not exercised
may become illiquid.
Market value of the Bonds
The value of the Bonds depends on a number of interrelated factors, including economic, financial and
political events in France or elsewhere, including factors affecting capital markets generally and the stock
exchanges on which the Bonds are traded. The price at which a holder of Bonds will be able to sell the
Bonds prior to maturity may be at a discount, which could be substantial, from the issue price or the
purchase price paid by such purchaser.
Credit Rating may not reflect all risks

The ratings assigned by the Rating Agency to the Bonds may not reflect the potential impact of all risks
related to structure, market, additional factors discussed above, and other factors that may affect the value
of the Bonds. A rating is not a recommendation to buy, sell or hold securities and may be revised or
withdrawn by the Rating Agency at any time.
Change of law
The Terms and Conditions of the Bonds are based on the laws of France in effect as at the date of this
Prospectus. No assurance can be given as to the impact of any possible judicial decision or change to the
laws of France or administrative practice after the date of this Prospectus. Furthermore, the Issuer operates
in a heavily regulated environment and has to comply with extensive regulations in France and elsewhere.
No assurance can be given as to the impact of any possible judicial decision or change to laws or
administrative practices after the date of this Prospectus.
French insolvency law
Under French insolvency law as amended by ordinance n°2008-1345 dated 18 December 2008 which came
into force on 15 February 2009, holders of debt securities are automatically grouped into a single assembly
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of holders (the "Assembly") during a safeguard procedure (procédure de sauvegarde), an accelerated
financial safeguard procedure (procédure de sauvegarde financière accélérée) or a judicial reorganisation
procedure (procédure de redressement judiciaire) of the Issuer, in order to defend their common interests.
The Assembly comprises holders of all debt securities issued by the Issuer (including the Bonds), whether
or not under a debt issuance programme (EMTN) and regardless of their governing law. The Assembly
deliberates on the proposed safeguard plan (projet de plan de sauvegarde), proposed accelerated financial
safeguard plan (projet de plan de sauvegarde financière accélérée) or judicial reorganisation plan (projet de
plan de redressement) applicable to the Issuer and may further agree to:
- increase the liabilities (charges) of holders of debt securities (including the Bondholders) by rescheduling
and/or writing-off debts;
- establish an unequal treatment between holders of debt securities (including the Bondholders) as
appropriate under the circumstances; and/or
- decide to convert debt securities (including the Bonds) into shares.
Decisions of the Assembly will be taken by a two-third majority (calculated as a proportion of the debt
securities held by the holders attending such Assembly or represented thereat). No quorum is required on
convocation of the Assembly. For the avoidance of doubt, the provisions relating to the Masse described in
this Prospectus will not be applicable in these circumstances.
Taxation
Potential purchasers and sellers of the Bonds should be aware that they may be required to pay taxes or
other documentary charges or duties in accordance with the laws and practices of the country where the
Bonds are transferred or other jurisdictions. In some jurisdictions, no official statements of the tax
authorities or court decisions may be available for innovative financial instruments such as the Bonds.
Potential investors are advised not to rely upon the tax overview contained in this Prospectus but to ask for
their own tax adviser's advice on their individual taxation with respect to the acquisition, holding, sale and
redemption of the Bonds. Only these advisors are in a position to duly consider the specific situation of the
potential investor. This investment consideration has to be read in connection with the taxation sections of
this Prospectus.
EU Savings Directive
On 3 June 2003, the European Council of Economic and Finance Ministers adopted a directive 2003/48/CE
regarding the taxation of savings income in the form of interest payments (the "Directive"). The Directive
requires Member States, subject to a number of conditions being met, to provide to the tax authorities of
other Member States details of payments of interest and other similar income made by a paying agent
located within its jurisdiction to, or for the benefit of, an individual resident or a "residual entity" (as
defined in Article 4.2 of the Directive) established in that other Member State, except that, for a transitional
period, Luxembourg and Austria will instead withhold an amount on interest payments unless the relevant
beneficial owner of such payment elects otherwise.
If a payment were to be made or collected through a Member State which has opted for a withholding
system and an amount of, or in respect of tax were to be withheld from that payment, neither the Issuer nor
any paying agent nor any other person would be obliged to pay additional amounts with respect to any
Bond as a result of the imposition of such withholding tax.
On 10 April 2013, Luxembourg officially announced its intention to no longer apply the withholding
system as from 1st January 2015 and to provide details of payment of interest (or similar income) as from
this date.
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