Obligation Vodafone Group 2% ( XS1371473601 ) en GBP

Vodafone Group

100 % ⇌

Royaume-Uni

XS1371473601 ( en GBP )

2% par an ( paiement annuel )

25/02/2019 - Obligation échue

Prospectus brochure de l'obligation Vodafone Group XS1371473601 en GBP 2%, échue

100 000 GBP

1 440 000 000 GBP

Vodafone Group est une société multinationale de télécommunications offrant des services de téléphonie mobile, fixe, internet haut débit et télévision dans plus de 30 pays, principalement en Europe, Afrique et Asie-Pacifique.

L'Obligation émise par Vodafone Group ( Royaume-Uni ) , en GBP, avec le code ISIN XS1371473601, paye un coupon de 2% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 25/02/2019

Prospectus dated 1 October 2018

Vodafone Group Plc
(incorporated with limited liability in England and Wales)
£500,000,000 Capital Securities due 2078

Issue Price: 100.000 per cent.

The £500,000,000 Capital Securities due 2078 (the "Securities") will be issued by Vodafone Group Plc (the "Issuer") on 3 October 2018 (the "Issue Date").
The Securities will bear interest on their principal amount from (and including) the Issue Date to (but excluding) 3 October 2025 (the "First Reset Date") at a rate of 4.875 per cent. per
annum, payable annually in arrear on 3 October in each year. Thereafter, unless previously redeemed, the Securities will bear interest from (and including) the First Reset Date to (but
excluding) 3 October 2030 at a rate per annum which shall be 3.267 per cent. above the 5 year Swap Rate (as defined in the "Terms and Conditions of the Securities" (the "Conditions"))
for the relevant Reset Period (as defined in the Conditions), payable annually in arrear on 3 October in each year. From (and including) 3 October 2030 to (but excluding) 3 October 2045
the Securities will bear interest at a rate per annum which shall be 3.517 per cent. above the 5 year Swap Rate for the relevant Reset Period payable annually in arrear on 3 October in each
year. From (and including) 3 October 2045 up to (but excluding) 3 October 2078 (the "Maturity Date"), the Securities will bear interest at a rate per annum which shall be 4.267 per cent.
above the 5 year Swap Rate for the relevant Reset Period payable annually in arrear on 3 October in each year, al as more particularly described in "Terms and Conditions of the Securities--
Interest Payments".
If the Issuer does not elect to redeem the Securities in accordance with Condition 6(g) following the occurrence of a Change of Control Event (as defined in the Conditions), the then
prevailing interest rate per annum (and each subsequent interest rate per annum otherwise determined in accordance with the Conditions) for the Securities shall be increased by 5 per cent.
per annum with effect from (and including) the date on which the Change of Control Event occurs, see "Terms and Conditions of the Securities--Interest Payments--Step-up after Change
of Control Event".
The Issuer may, at its discretion, elect to defer all or part of any payment of interest on the Securities as more particular ly described in "Terms and Conditions of the Securities--Optional
Interest Deferral". Any amounts so deferred, together with further interest accrued thereon (at the interest rate per annum prevailing from time to time), shall constitute Arrears of Interest
(as defined in the Conditions). The Issuer may pay outstanding Arrears of Interest, in whole or in part, at any time in accordance with the Conditions. Notwithstanding this, the Issuer shall
pay any outstanding Arrears of Interest, in whole but not in part, on the first occurring Mandatory Settlement Date (as defined in the Conditions) following the Interest Payment Date on
which a Deferred Interest Payment (as defined in the Conditions) arose, al as more particularly described in "Terms and Conditions of the Securities -- Optional Interest Deferral--
Mandatory Settlement".
The Securities will be redeemed at their principal amount, together with any accrued and unpaid interest and any outstanding Arrears of Interest, on 3 October 2078. The Securities may not
be redeemed prior to the Maturity Date at the option of the Issuer other than in accordance with Condition 6. The Securities shall be redeemable (at the option of the Issuer) in whole but not
in part on any date from (and including) 3 July 2025 to (and including) the First Reset Date or on any Interest Payment Date thereafter, at the principal amount of the Securities, together
with any accrued and unpaid interest up to (but excluding) such date and any outstanding Arrears of Interest.
In addition, upon the occurrence of an Accounting Event, an Acquisition Event, a Capital Event, a Change of Control Event, a Substantial Repurchase Event, a Tax Event or a Withholding
Tax Event (each such term as defined in the Conditions), the Securities shall be redeemable (at the option of the Issuer) in whole but not in part at the prices set out, and as more particularly
described, in "Terms and Conditions of the Securities--Redemption".
The Issuer may, upon the occurrence of an Accounting Event, a Capital Event, a Tax Event or a Withholding Tax Event, at any t ime, without the consent of the holders of the Securities,
either (i) substitute all, but not some only, of the Securities for, or (ii) vary the terms of the Securities with the effect that they remain or become, as the case may be, Qualifying Securities
(as defined in the Conditions), in each case in accordance with Condition 7 and subject to the receipt by the Trustee of the certificate of the Authorised Signatories (as defined in the
Conditions) of the Issuer referred to in Condition 8.
The Securities will be unsecured securities of the Issuer and will constitute subordinated obligations of the Issuer, al as more particularly described in "Terms and Conditions of the
Securities--Status" and "Terms and Conditions of the Securities--Subordination".
Payments in respect of the Securities shall be made free and clear of, and without withholding or deduction for, or on account of, taxes of the United Kingdom, unless such withholding or
deduction is required by law. In the event that any such withholding or deduction is made, Additional Amounts may be payable by the Issuer, subject to certain exceptions as are more fully
described in "Terms and Conditions of the Securities--Taxation".
Application has been made to the United Kingdom Financial Conduct Authority (the "FCA") acting under Part VI of the Financial Services and Markets Act 2000 (the "UK Listing
Authority") for the Securities to be admitted to the official list of the UK Listing Authority (the "Official List") and to the London Stock Exchange plc (the "London Stock Exchange")
for the Securities to be admitted to trading on the London Stock Exchange's regulated market (the "Market"). References in this Prospectus to Securities being "listed" (and all related
references) shall mean that the Securities have been admitted to trading on the Market and have been admitted to the Official List. The Market is a regulated market for the purposes of
Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments (as amended, "MiFID II").
The Securities will initially be represented by a temporary global security (the "Temporary Global Security"), without interest coupons or talons, which will be deposited with a common
depositary on behalf of Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking S.A. ("Clearstream, Luxembourg") on or about the Issue Date. The Temporary Global Security
will be exchangeable for interests in a permanent global security (the "Permanent Global Security" and together with the Temporary Global Security, the "Global Securities"), without
interest coupons or talons, on or after a date which is expected to be 12 November 2018, upon certification as to non-U.S. beneficial ownership. The Permanent Global Security will be
exchangeable for definitive Securities in bearer form in the denominations of £100,000 and integral multiples of £1,000 in excess thereof, up to and including £199,000, in each case in the
limited circumstances set out in "Summary of Provisions relating to the Securities while in Global Form". No definitive Securities will be issued with a denomination above £199,000.
The Securities are expected to be rated BBB- (stable outlook) by Fitch Ratings Limited ("Fitch"), BBB- (negative outlook) by Standard & Poor's Credit Market Services Europe Limited
("Standard & Poor's") and Baa3 (negative watch) by Moody's Investors Service España S.A. ("Moody's"). Each of Fitch, Standard & Poor's and Moody's is established in the European
Union (the "EU") and is registered under Regulation (EC) No. 1060/2009 (as amended) of the European Parliament and of the Council of 16 September 2009 on credit rating agencies. A
rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency.
Investing in the Securities involves a high degree of risk. Prospective investors should have regard to the factors described under the section headed "Risk Factors" in this Prospectus.
GLOBAL CO-ORDINATOR
BofA Merrill Lynch

JOINT BOOKRUNNERS
BofA Merrill Lynch
J.P. Morgan
RBC Capital Markets

This Prospectus comprises a prospectus for the purposes of Directive 2003/71/EC as amended (the "Prospectus
Directive") and for the purpose of giving information with regard to the Issuer, the Issuer and its subsidiaries and
affiliates taken as a whole (the "Group") and the Securities which, according to the particular nature of the Issuer
and the Securities, is necessary to enable investors to make an informed assessment of the assets and liabilities,
financial position, profit and losses and prospects of the Issuer. 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 the documents which are incorporated herein by reference
(see "Documents Incorporated by Reference").
This Prospectus does not constitute an offer of, or an invitation by or on behalf of the Issuer or the Joint
Bookrunners (as defined in "Subscription and Sale" below) to subscribe or purchase, any of the Securities. The
distribution of this Prospectus and the offering of the Securities in certain jurisdictions may be restricted by law.
Persons into whose possession this Prospectus comes are required by the Issuer and the Joint Bookrunners to
inform themselves about and to observe any such restrictions.
For a description of further restrictions on offers and sales of the Securities and distribution of this Prospectus,
see "Subscription and Sale" below.
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 Bookrunners (as defined in "Subscription and Sale" below). 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 that there has been no adverse
change in the financial position of the Issuer since the date hereof or that the information contained in it or any
other information supplied in connection with the Securities 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 greatest extent permitted by law, the Joint Bookrunners accept no responsibility whatsoever for the contents
of this Prospectus or for any other statement made or purported to be made by the Issuer or a Joint Bookrunner or
on its behalf in connection with the Issuer or the issue and offering of the Securities. Each Joint Bookrunner
accordingly disclaims all and any liability whether arising in tort or contract or otherwise (save as referred to
above) which it might otherwise have in respect of this Prospectus or any such statement.
The Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the
"Securities Act") and are subject to U.S. tax law requirements. Subject to certain exceptions, the Securities may
not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons.
In connection with Section 309B of the Securities and Futures Act (Chapter 289) of Singapore (the "SFA") and
the Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore (the "CMP Regulations
2018"), the Issuer has determined, and hereby notifies all relevant persons (as defined in Section 309A(1) of the
SFA), that the Securities are prescribed capital markets products (as defined in the CMP Regulations 2018) and
Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products
and MAS Notice FAA-N16: Notice on Recommendation on Investment Products).
The Securities may not be a suitable investment for all investors. Each potential investor in the Securities must
determine the suitability of that investment in light of its own circumstances. In particular, each potential investor
should:

i

(a)
have sufficient knowledge and experience to make a meaningful evaluation of the Securities, the merits
and risks of investing in the Securities and the information contained or incorporated by reference in this
Prospectus or any applicable supplement;
(b)
have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular
financial situation, an investment in the Securities and the impact the Securities will have on its overall
investment portfolio;
(c)
have sufficient financial resources and liquidity to bear all of the risks of an investment in the Securities;
(d)
understand thoroughly the terms of the Securities and be familiar with the behaviour of the relevant
financial markets and of any financial variable which might have an impact on the return on the
Securities; and
(e)
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.
The Securities are complex financial instruments and such instruments may be purchased by potential investors
as a way to reduce risk or enhance yield with an understood, measured, appropriate addition of risk to their overall
portfolios. A potential investor should not invest in the Securities unless it has the expertise (either alone or with
a financial adviser) to evaluate how the Securities will perform under changing conditions, the resulting effects
on the value of the Securities and the impact this investment will have on the potential investor's overall
investment portfolio.
Prospective investors should also consult their own tax advisers as to the tax consequences of the purchase,
ownership and disposition of the Securities.
The credit ratings assigned to the Securities 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 Securities. A credit
rating is not a recommendation to buy, sell or hold Securities and may be revised or withdrawn by the rating
agency at any time.
The investment activities of certain investors are subject to legal investment laws and regulations, or review or
regulation by certain authorities. Each potential investor should consult its legal advisers to determine whether
and to what extent (1) the Securities are legal investments for it, (2) the Securities can be used as collateral for
various types of borrowing and (3) other restrictions apply to its purchase or pledge of any of the Securities.
Financial institutions should consult their legal advisers or the appropriate regulators to determine the appropriate
treatment of Securities under any applicable risk-based capital or similar rules.
Certain financial and statistical information in this Prospectus has been subject to rounding adjustments.
Accordingly, the sum of certain data may not conform to the total. In addition, all financial information in this
Prospectus is qualified by reference to, and should be read in conjunction with, the documents incorporated by
reference in this Prospectus (see "Documents Incorporated by Reference" below). This Prospectus contains certain
forward-looking statements. A forward-looking statement is a statement that does not relate to historical facts and
events. They are based on analyses or forecasts of future results and estimates of amounts not yet determinable or
foreseeable. These forward-looking statements are identified by the use of terms and phrases such as "anticipate",
"believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will" and similar terms
and phrases, including references and assumptions. This applies, in particular, to statements in this Prospectus
containing information on future earning capacity, plans and expectations regarding the Group's business and
management, its growth and profitability, and general economic and regulatory conditions and other factors that
affect it.

ii

Forward-looking statements in this Prospectus are based on current estimates and assumptions that the Issuer
makes to the best of its present knowledge. These forward-looking statements are subject to risks, uncertainties
and other factors which could cause actual results, including the Group's financial condition and results of
operations, to differ materially from and be worse than results that have expressly or implicitly been assumed or
described in these forward-looking statements. The Group's business is also subject to a number of risks and
uncertainties that could cause a forward-looking statement, estimate or prediction in this Prospectus to become
inaccurate. Accordingly, investors are strongly advised to read the following sections of this Prospectus: "Risk
Factors", "Documents Incorporated by Reference", "Overview" and "Description of the Issuer". These sections
include more detailed descriptions of factors that might have an impact on the Group's business and the markets
in which it operates. In light of these risks, uncertainties and assumptions, future events described in this
Prospectus may not occur.
Unless otherwise specified or the context requires, references to "£", "sterling", and "penny" are to the lawful
currency of the United Kingdom, references to "U.S.$" are to the lawful currency of the United States of America
and references to "" are to the lawful 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.
In connection with the issue of the Securities, Merrill Lynch International (in such capacity, the
"Stabilisation Manager") (or any person acting on behalf of any Stabilisation Manager) may over-allot the
Securities or effect transactions with a view to supporting the market price of the Securities at a level higher
than that which might otherwise prevail. However, stabilisation may not necessarily occur. Any stabilisation
action may begin on or after the date on which adequate public disclosure of the terms of the offer of the
Securities is made and, if begun, may cease at any time, but it must end no later than the earlier of 30 days
after the issue date of the Securities and 60 days after the date of the allotment of the Securities. Any
stabilisation action or over-allotment must be conducted by the Stabilisation Manager or person acting on
behalf of the Stabilisation Manager in accordance with all applicable laws and rules.
MiFID II product governance / Professional investors and eligible counterparties only target market
Solely for the purposes of each manufacturer's product approval process, the target market assessment in respect
of the Securities has led to the conclusion that: (i) the target market for the Securities is eligible counterparties and
professional clients only, each as defined in MiFID II; and (ii) all channels for distribution of the Securities to
eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or
recommending the Securities (a "distributor") should take into consideration the manufacturers' target market
assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market
assessment in respect of the Securities (by either adopting or refining the manufacturers' target market assessment)
and determining appropriate distribution channels.
PRIIPs Regulation / Prohibition of sales to EEA retail investors  The Securities are not intended to be offered,
sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail
investor in the European Economic Area ("EEA"). For these purposes, a retail investor means a person who is
one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; or (ii) a customer within
the meaning of Directive 2002/92/EC (as amended, the "Insurance Mediation Directive"), where that customer
would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. No key information
document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or
selling the Securities or otherwise making them available to retail investors in the EEA has been prepared and
therefore offering or selling the Securities or otherwise making them available to any retail investor in the EEA
may be unlawful under the PRIIPS Regulation.
Amounts payable under the Securities are calculated by reference to the mid-swap rate for sterling swaps with a
term of 5 years which appears on the Reuters screen "ICESWAP4" as of 11:00 a.m. (London time) on the relevant
Reset Interest Determination Date (as defined in the Conditions) which is provided by ICE Benchmark
Administration Limited. As at the date of this Prospectus, ICE Benchmark Administration Limited appears on the

iii

register of administrators and benchmarks established and maintained by the European Securities and Markets
Authority pursuant to Article 36 of the Benchmark Regulation (Regulation (EU) 2016/1011).

iv

DOCUMENTS INCORPORATED BY REFERENCE
Documents incorporated by reference
The following documents, which have previously been published or are published simultaneously with this
Prospectus and have been filed with the FCA, shall be incorporated in, and form part of, this Prospectus:
(i)
the unaudited consolidated financial information of the Issuer as at and for the three months ended 30
June 2018, as set out in the Issuer's press release dated 25 July 2018 (the "First Quarter Results Press
Release"), save for:
a. the seventh bullet point in the section "Highlights" on page 1 of the First Quarter Results Press
Release;
b. the last two sentences of the first paragraph of the quote from Vittorio Colao, Group Chief Executive,
on page 1 of the First Quarter Results Press Release;
c. the last sentence of the first paragraph in the section "Operating Review Fixed & Convergence"
on page 2 of the First Quarter Results Press Release;
d. the entire section "Operating Review Outlook" on page 2 of the First Quarter Results Press
Release;
e. the last sentence of the third paragraph in the section "Operating Review Germany" on page 4 of
the First Quarter Results Press Release;
f. the last sentence of the fourth paragraph in the section "Operating Review India" on page 7 of the
First Quarter Results Press Release; and
g. the last sentence of the fifth paragraph in the section "Operating Review India" on page 7 of the
First Quarter Results Press Release;
(ii)
the audited consolidated annual financial statements of the Issuer for the financial year ended 31 March
2018, including the auditors' report thereon, as set out on pages 93-177, the section on alternative
performance measures, as set out on pages 207-217, and the definitions section set out on pages 222-224
of the Issuer's Annual Report for the year ended 31 March 2018;
(iii)
the audited consolidated annual financial statements of the Issuer for the financial year ended 31 March
2017, including the auditors' report thereon, as set out on pages 91-176, the section on alternative
performance measures, as set out on pages 205-213, and the definitions section set out on pages 218-220
of the Issuer's Annual Report for the year ended 31 March 2017; and
(iv)
the following sections of the prospectus of the Issuer's 30,000,000,000 Euro Medium Term Note
Programme dated 31 August 2018 (the "EMTN Prospectus"):
a. "Risk Factors Factors that may affect the Issuer's ability to fulfil its obligations under Notes issued
under the Programme" on pages 9 and 10;
b. "Description of the Issuer" on pages 78 to 84; and
c. "General Information Legal Proceedings" on pages 103 to 105,
save that (i) any statement contained in a document which is incorporated by reference herein shall be deemed to
be modified or superseded for the purposes of this Prospectus to the extent that a statement contained herein
modifies or supersedes such earlier statement (whether expressly, by implication or otherwise) and (ii) any

v

documents which are incorporated by reference therein shall not constitute a part of this Prospectus. Any statement
so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Any documents themselves incorporated by reference in the documents incorporated by reference in this
Prospectus shall not form part of this Prospectus.
Any non-incorporated parts of a document referred to herein are either not relevant for an investor or are
otherwise covered elsewhere in this Prospectus.
Copies of documents incorporated by reference in this Prospectus will be available for viewing on the website of
the
Regulatory
News
Service
operated
by
the
London
Stock
Exchange
at
www.londonstockexchange.com/exchange/news/market-news/market-newshome.html.

Alternative Performance Measures

Certain alternative performance measures ("APMs") are included or referred to in this Prospectus. APMs are non-
GAAP measures used by the Group within its financial publications to supplement disclosures prepared in
accordance with other regulations such as International Financial Reporting Standards. The Issuer considers that
these measures provide useful information to enhance the understanding of financial performance. The APMs
should be viewed as complementary to, rather than a substitute for, the figures determined according to other
regulatory measures. An explanation of each such metric's components and calculation method can be found at
pages 9 to 12 (incorporated by reference herein) of the First Quarter Results Press Release, at pages 207 to 217
(incorporated by reference herein) of the Issuer's Annual Report for the year ended 30 March 2018 and at pages
205 to 213 (incorporated by reference herein) of the Issuer's Annual Report for the year ended 30 March 2017.

vi

TABLE OF CONTENTS

PAGE

RISK FACTORS .....................................................................................................................................1
OVERVIEW ............................................................................................................................................8
TERMS AND CONDITIONS OF THE SECURITIES ......................................................................... 15
SUMMARY OF PROVISIONS RELATING TO THE SECURITIES WHILE IN GLOBAL FORM 40
DESCRIPTION OF THE ISSUER ........................................................................................................ 43
USE OF PROCEEDS ............................................................................................................................ 44
TAXATION .......................................................................................................................................... 45
SUBSCRIPTION AND SALE .............................................................................................................. 48
GENERAL INFORMATION ................................................................................................................ 52

vii

RISK FACTORS
The Issuer believes that the risks described in the section entitled "Risk Factors Factors that may affect the
Issuer's ability to fulfil its obligations under Notes issued under the Programme" on pages 9 and 10 of the EMTN
Prospectus, which is incorporated by reference in this Prospectus (the "Risks Relating to the Business") may
affect its ability to fulfil its obligations under the Securities. 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.
In addition, factors which the Issuer believes may be material for the purpose of assessing the market risks
associated with the Securities are described below.
The Issuer believes that the factors described in the Risks Relating to the Business and those set out below
represent the principal risks inherent in investing in the Securities, but the Issuer may be unable to pay interest,
principal or other amounts on or in connection with the Securities for other reasons, and the Issuer does not
represent that the statements in the Risks Relating to the Business and those set out below regarding the risks of
holding the Securities are exhaustive. Prospective investors should also read the detailed information set out
elsewhere in this Prospectus (including any documents incorporated by reference herein) and reach their own
views prior to making any investment decision.
Capitalised terms used herein have the meaning given to them in "Terms and Conditions of the Securities".
Factors that may affect the Issuer's ability to fulfil its obligations under or in connection with the Securities
For the factors that may affect the Issuer's ability to fulfil its obligations under or in connection with the Securities,
see the section entitled "Risk Factors Factors that may affect the Issuer's ability to fulfil its obligations under
Notes issued under the Programme" on pages 9 and 10 of the EMTN Prospectus, which is incorporated by
reference in this Prospectus. See "Documents Incorporated by Reference".
Risks related to the Securities generally
The Securities will be subject to optional redemption by the Issuer including upon the occurrence of certain
events
The Securities will be redeemable, at the option of the Issuer, in whole but not in part on (i) any date from (and
including) the First Call Date to (and including) the First Reset Date or (ii) any Interest Payment Date thereafter
at their principal amount together with any accrued and unpaid interest up to (but excluding) the redemption date
and any outstanding Arrears of Interest. In addition, upon the occurrence of an Accounting Event, an Acquisition
Event, a Capital Event, a Change of Control Event, a Tax Event, a Substantial Repurchase Event or a Withholding
Tax Event (each as defined in the Conditions and as more fully described in Condition 6), the Issuer shall have
the option to redeem, in whole but not in part, the Securities at the prices set out therein, in each case together
with any accrued and unpaid interest up to (but excluding) the redemption date and any outstanding Arrears of
Interest. In the case of a Change of Control Event, in the event that the Issuer does not elect to redeem the
Securities, the then prevailing Interest Rate (as defined in the Conditions), and each subsequent Interest Rate
otherwise determined in accordance with Condition 4, on the Securities shall be increased by 5 per cent. per annum
with effect from (and including) the date on which the Change of Control Event occurred.
During any period when the Issuer may elect to redeem the Securities or is perceived to be able to redeem the
Securities, the market value of the Securities generally will not rise substantially above the price at which they
can be redeemed. This also may be true prior to any redemption period.
The Issuer may redeem the Securities when its cost of borrowing is lower than the interest payable on them. At
those times, an investor generally would not be able to reinvest the redemption proceeds at an effective interest

1

rate as high as the interest payable on the Securities being redeemed and may only be able to do so at a significantly
lower rate. Potential investors should consider reinvestment risk in light of other investments available at that
time.
There is no redemption at the option of the holders of the Securities.
The current IFRS accounting classification of financial instruments such as the Securities as financial
liabilities may change, which may result in the occurrence of an Accounting Event
The current IFRS accounting classification of financial instruments such as the Securities as financial liabilities
may change in the future and this may result in the occurrence of an Accounting Event. In such an event, the
Issuer may have the option to redeem, in whole but not in part, the Securities (pursuant to Condition 6(e)) or
substitute, or vary the terms of, the Securities in accordance with Condition 7. No assurance can be given as to
the future classification of the Securities from an accounting perspective or whether any such change may result
in the occurrence of an Accounting Event, thereby providing the Issuer with the option to redeem, substitute or
vary the terms of the Securities pursuant to the Conditions.
The interest rate on the Securities will reset on the First Reset Date and on every Reset Date thereafter, which
can be expected to affect the interest payment on the Securities and the market value of the Securities
Although the Securities will earn interest at a fixed rate until (but excluding) the First Reset Date, the current
market interest rate on the capital markets (the "market interest rate") typically changes on a daily basis. Since
the initial fixed rate of interest for the Securities will be reset on the First Reset Date (as set out in the Conditions)
and on each subsequent Reset Date, the interest payment on each the Securities will also change. Holders of the
Securities (the "Holders") should be aware that movements in these market interest rates can adversely affect the
price of the Securities and can lead to losses for the Holders if they sell the Securities.
Holders are exposed to the risk of fluctuating interest rate levels and uncertain interest income as the reset rates
could affect the market value of an investment in the Securities.
Integral multiples of less than the specified denomination
The denominations of the Securities are £100,000 and integral multiples of £1,000 in excess thereof, up to and
including £199,000. Therefore, it is possible that the Securities may be traded in amounts in excess of £100,000,
that are not integral multiples of £100,000. In such a case, a Holder who, as a result of trading such amounts, holds
a principal amount of less than £100,000, will not receive a definitive Security in respect of such holding (should
definitive Securities be printed) and would need to purchase a principal amount of Securities such that it holds an
amount equal to one or more denominations. If definitive Securities are issued, Holders should be aware that
definitive Securities which have a denomination that is not an integral multiple of £100,000, may be illiquid and
difficult to trade.
The Issuer's obligations under the Securities are subordinated
The Issuer's obligations under the Securities will be unsecured and subordinated. In the event that an order is
made, or an effective resolution is passed, for the winding-up of the Issuer (otherwise than for the purposes of a
solvent winding-up solely for the purposes of a reorganisation, reconstruction, amalgamation or the substitution
in place of the Issuer of a "successor in business" (as defined in the Trust Deed) of the Issuer, (I)(x) the terms of
which reorganisation, reconstruction, amalgamation or substitution have previously been approved in writing by
the Trustee or by an Extraordinary Resolution (as defined in the Trust Deed) or (y) which substitution will be
effected in accordance with Condition 14(c) and (II) in either case, the terms of which do not provide that the
Securities shall thereby become redeemable or repayable in accordance with the Conditions) or an administrator
of the Issuer has been appointed and such administrator gives notice that it intends to declare and distribute a
dividend, the claims of the Holders will rank junior to the claims of holders of all Senior Obligations and pari

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