CNMV - Ibercaja

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D. Antonio Martínez Martínez, mayor de edad, de nacionalidad española, con domicilio
profesional en Zaragoza (50008), Plaza de Basilio Paraíso, nº 2 y D.N.I.
número 25.183.529-R, en vigor, en nombre y representación de Ibercaja Banco, S.A.,
con número de identificación fiscal A-99319030 y domicilio social en Zaragoza (50008),
Plaza de Basilio Paraíso, nº 2, debidamente apoderado al efecto
CERTIFICA
Que el contenido del folleto informativo de admisión a negociación de la emisión
denominada "Euro 500,000,000 Fixed Rate Reset Subordinated Notes due 28
July 2025" (el "Folleto"), registrado con fecha 30 de julio de 2015 por la Comisión
Nacional del Mercado de Valores (la "CNMV"), coincide exactamente con el ejemplar
del mismo que ha sido remitido a la CNMV en formato electrónico.
Asimismo, por la presente se autoriza a la CNMV para que el Folleto sea puesto a
disposición del público a través de su página web.
Y para que así conste y surta los efectos oportunos, en Zaragoza, a 30 de julio de 2015.
Ibercaja Banco, S.A.
p.p.
__________________________
D. Antonio Martínez Martínez
Ibercaja Banco S.A. (2085) NIF. A-99319030. Inscrita en el Registro Mercantil de Zaragoza (T. 3865, F. 1, H. Z-52186, Inscrip. 1ª). Domicilio
Social: Plaza de Basilio Paraíso,2 50008 Zaragoza.
IBERCAJA BANCO, S.A.
(incorporated with limited liability under
the laws of the Kingdom of Spain)
Euro 500,000,000
Fixed Rate Reset Subordinated Notes due 28 July 2025
The issue price of the Euro 500,000,000 Fixed Rate Reset Subordinated Notes due 28 July 2025 (the
"Notes") of Ibercaja Banco, S.A. (the "Issuer" or "Ibercaja Banco") is 100 per cent. of their principal
amount.
Unless previously redeemed, the Notes will be redeemed at their Outstanding Principal Amount (as
defined in the Conditions) on 28 July 2025. The Notes may be redeemed at the option of the Issuer at any
time in whole, but not in part, at their Outstanding Principal Amount (as defined in the Conditions), and
subject as provided in the Conditions, in particular to the previous consent of the Regulator (as defined in
the Conditions), in the event of certain changes affecting taxation in the Kingdom of Spain (see
Condition 6.3 ("Redemption for tax reasons")), or if a Capital Event (as defined in the Conditions) occurs
(see Condition 6.4 ("Redemption at the option of the Issuer (Capital Event)"). In addition, the Issuer may
at its option (subject to prior approval of the Regulator), redeem all, but not some only, of the Notes at
their Outstanding Principal Amount (as defined in the Conditions) plus accrued and unpaid interest on 28
July 2020 (the "Call Date") (see Condition 6.2 ("Redemption at the option of the Issuer (Issuer Call)").
The Notes will bear interest on their principal amount (i) at a fixed rate of 5.000 per cent. per annum from
(and including) the Closing Date (as defined in the Conditions) to (but excluding) the Reset Date (as
defined in the Conditions) payable annually in arrear on 28 July in each year, with the first Interest
Payment Date on 28 July 2016; and (ii) from (and including) the Reset Date (as defined in the
Conditions), at the applicable 5-year Mid-Swap Rate in respect of the Reset Period, plus 4.551 per cent.
per annum as determined by the Agent (as defined in the Conditions), payable annually in arrear on 28
July in each year (each, an Interest Payment Date as defined in the Conditions), commencing on 28
July 2020. Payments on the Notes will be made in Euro without deduction for or on account of taxes
imposed or levied by the Kingdom of Spain to the extent described under Condition 7 (Taxation).
This Prospectus has been approved by the Spanish National Securities Market Commission (Comisión
Nacional del Mercado de Valores) (the "CNMV") in its capacity as competent authority under
Law 24/1988, of 28 July, on the Securities Market (Ley 24/1988, de 28 de julio, del Mercado de Valores)
(the "LMV") and relevant implementing measures in Spain. Application has been made for the Notes to
be admitted to trading on the Spanish AIAF Fixed Income Securities Market (AIAF Mercado de Renta
Fija) ("AIAF").
The Notes have not been, and will not be, registered under the United States Securities Act of 1933 (the
"Securities Act") and are subject to United States tax law requirements. The Notes are being offered
outside the United States by the Lead Managers (as defined in "Subscription and Sale") in accordance
with Regulation S under the Securities Act ("Regulation S"), and may not be offered, sold or delivered
within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
The Notes have been rated "B2" by Moody's Investors Service España, S.A. ("Moody's"), "B" by
Standard & Poor's Credit Market Services Europe Limited ("S&P") and "BB" by Fitch Ratings
España, S.A. Unipersonal ("Fitch").
- i-
Moody's, S&P and Fitch are established in the EEA and registered under Regulation (EU) No 1060/2009,
as amended (the "CRA Regulation"). Moody's, S&P and Fitch appear on the latest update of the list of
registered credit rating agencies (as of 12 December 2014) on the ESMA website
http://www.esma.europa.eu.
A security 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.
Structuring Bank and Lead
Manager
Barclays
Lead Managers
Banco Bilbao Vizcaya
Argentaria, S.A.
J.P. Morgan
27 July 2015
- ii-
UBS Investment Bank
CONTENTS
Page
IMPORTANT NOTICES ............................................................................................................................. 1
INFORMATION INCORPORATED BY REFERENCE ............................................................................ 3
OVERVIEW ................................................................................................................................................. 4
RISK FACTORS .......................................................................................................................................... 7
TERMS AND CONDITIONS OF THE NOTES ....................................................................................... 27
REGULATIONS OF THE SYNDICATE OF NOTEHOLDERS .............................................................. 39
SUMMARY OF CLEARANCE AND SETTLEMENT PROCEDURES APPLICABLE TO BOOKENTRY NOTES ......................................................................................................................................... 42
USE OF PROCEEDS ................................................................................................................................. 44
DESCRIPTION OF THE ISSUER............................................................................................................. 45
TAXATION ............................................................................................................................................... 64
SUBSCRIPTION AND SALE ................................................................................................................... 70
GENERAL INFORMATION .................................................................................................................... 71
SIGNATURES ........................................................................................................................................... 73
- 1-
IMPORTANT NOTICES
The Issuer accepts responsibility for the information contained in this Prospectus and declares that,
having taken all reasonable care to ensure that such is the case, the information contained in this
Prospectus to the best of its knowledge is in accordance with the facts and contains no omission likely to
affect its import.
The Issuer has confirmed to the Lead Managers named under "Subscription and Sale" below (the "Lead
Managers") that this Prospectus contains all information regarding the Issuer and the Notes which is (in
the context of the issue of the Notes) material; such information is true and accurate in all material
respects and is not misleading in any material respect; any opinions, predictions or intentions expressed in
this Prospectus on the part of the Issuer are honestly held or made and are not misleading in any material
respect; this Prospectus does not omit to state any material fact necessary to make such information,
opinions, predictions or intentions (in such context) not misleading in any material respect; and all proper
enquiries have been made to ascertain and to verify the foregoing.
The Issuer has not authorised the making or provision of any representation or information regarding the
Issuer or the Notes other than as contained in this Prospectus or as approved for such purpose by the
Issuer. Any such representation or information should not be relied upon as having been authorised by the
Issuer or the Lead Managers.
Neither the Lead Managers nor any of their respective affiliates have independently verified the
information contained herein or authorised the whole or any part of this Prospectus and none of them
makes any representation or warranty or accepts any responsibility as to the accuracy or completeness of
the information contained in this Prospectus. Neither the delivery of this Prospectus nor the offering, sale
or delivery of any Note shall in any circumstances create any implication that there has been no adverse
change, or any event reasonably likely to involve any adverse change, in the condition (financial or
otherwise) of the Issuer since the date of this Prospectus.
Neither this Prospectus nor any other information supplied in connection with the Notes (a) is intended to
provide the basis of any credit or other evaluation or (b) should be considered as a recommendation by
the Issuer or any of the Lead Managers that any recipient of this Prospectus or any other information
supplied in connection with the Notes should purchase any Notes. Each investor contemplating
purchasing any Notes should make its own independent investigation of the financial condition and
affairs, and its own appraisal of the creditworthiness, of the Issuer. Neither this Prospectus nor any other
information supplied in connection with the issue of any Notes constitutes an offer or invitation by or on
behalf of the Issuer or any of the Lead Managers to any person to subscribe for or to purchase any Notes.
Neither the delivery of this Prospectus 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. The Lead Managers expressly do not undertake to review the financial
condition or affairs of the Issuer or to advise any investor in the Notes of any information coming to their
attention.
The distribution of this Prospectus and the offering, sale and delivery of the Notes in certain jurisdictions
may be restricted by law. Persons into whose possession this Prospectus comes are required by the Issuer
and the Lead Managers to inform themselves about and to observe any such restrictions. For a description
of certain restrictions on offers, sales and deliveries of the Notes and on distribution of this Prospectus
and other offering material relating to the Notes, see "Subscription and Sale".
In particular, the Notes have not been and will not be registered under the Securities Act and are subject
to United States tax law requirements. Subject to certain exceptions, the Notes may not be offered, sold or
delivered within the United States or to U.S. persons.
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" are to the currency
introduced at the start of the third stage of European economic and monetary union, and as defined in
Article 2 of Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the Euro, as
amended.
- 1-
In connection with the issue of the Notes, Barclays Bank PLC (the "Stabilising Manager(s)")(or
persons acting on behalf of the Stabilising Manager(s)) may over allot the Notes or effect
transactions with a view to supporting the 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 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 Notes and 60 days after the date of the allotment of the Notes. Any
stabilisation action or over-allotment must be conducted by the Stabilising Manager(s) (or persons
acting on behalf of the Stabilising Manager(s)) in accordance with all applicable laws and rules.
- 2-
INFORMATION INCORPORATED BY REFERENCE
The information set out below shall be deemed to be incorporated in, and to form part of, this Prospectus.
Such documents will be made available, free of charge, during usual business hours at the registered
offices of the CNMV. Such documents will also be available to view on the CNMV website
(www.cnmv.es) and on Ibercaja Banco website (http://www.ibercaja.es/informacionInversores/informesanuales/), and will be also available to view in English on the Ibercaja Banco website
(www.ibercaja.es/investors/annual-report/).
Information incorporated by reference:
(i)
Spanish language audited consolidated annual accounts, consolidated Director's report, together
with the audit report of PricewaterhouseCoopers Auditores S.L., as at and for the year ended 31
December 2014.
(ii)
Spanish language audited consolidated annual accounts, consolidated Director's report, together
with the audit report of PricewaterhouseCoopers Auditores S.L., as at and for the year ended 31
December 2013.
- 3-
OVERVIEW
This overview must be read as an introduction to this Prospectus and any decision to invest in the Notes
should be based on a consideration of the Prospectus as a whole, including the documents incorporated
by reference.
Words and expressions defined in the "Terms and Conditions of the Notes" below or elsewhere in this
Prospectus have the same meanings in this overview.
The Issuer:
Ibercaja Banco, S.A., incorporated in the Kingdom of Spain.
Structuring Bank:
Barclays Bank PLC.
Lead Managers:
Banco Bilbao Vizcaya Argentaria, S.A., Barclays Bank PLC,
J.P. Morgan Securities plc and UBS Limited.
The Notes:
Euro 500,000,000 Fixed Rate Reset Subordinated Notes due 28
July 2025.
Issue Price:
100 per cent. of the principal amount of the Notes.
Closing Date:
Expected to be on or about 28 July 2015.
Use of Proceeds:
See "Use of Proceeds".
Interest:
The Notes will bear interest on their outstanding principal
amount (i) at a fixed rate of 5.000 per cent. per annum from (and
including) the Closing Date to (but excluding) the Reset Date (as
defined in the Conditions) payable annually in arrear on 28 July
in each year, with the first Interest Payment Date on 28
July 2016; and (ii) from (and including) the Reset Date (as
defined in the Conditions), at the applicable 5-year Mid-Swap
Rate in respect of the Reset Period, plus 4.551 per cent. per
annum as determined by the Agent, payable annually in arrear
on 28 July in each year (each, an Interest Payment Date as
defined in the Conditions), commencing on 28 July 2020.
All as more particularly described in Condition 4 ("Interest and
other calculations") of the Terms and Conditions of the Notes.
Status:
The Notes are subordinated, unconditional and unsecured
obligations of the Issuer. All as more particularly described in
Condition 3 ("Status of the Notes") of the Terms and Conditions
of the Notes.
Form and Denomination:
The Notes will be issued in uncertificated, dematerialised bookentry form (anotaciones en cuenta) and will be registered with
the Sociedad de Gestión de los Sistemas de Registro,
Compensación y Liquidación de Valores, S.A. Unipersonal
("Iberclear") as managing entity of the central registry of the
Spanish clearance and settlement system (the "Spanish Central
Registry") and its member entities ("Iberclear Members"). The
Notes will be in the denomination of Euro 100,000.
Final Redemption:
28 July 2025.
Optional Redemption:
The Notes may be redeemed in whole prior to their stated
maturity at the option of the Issuer in accordance with
Condition 6.2 ("Redemption at the option of the Issuer (Issuer
Call)").
- 4-
Tax Redemption:
Early redemption will be permitted for tax reasons at the option
of the Issuer in accordance with Condition 6.3 ("Redemption for
tax reasons").
Regulatory Redemption:
Early redemption will be permitted for regulatory reasons at the
option of the Issuer if a Capital Event (as defined in the
Conditions) occurs, in accordance with Condition 6.4
("Redemption at the option of the Issuer (Capital Event)").
Rating:
The Notes have been rated "B2" by Moody's, "B" by S&P and
"BB" by Fitch.
In general, European regulated investors are restricted from
using a rating for regulatory purposes if such rating is not issued
by a credit rating agency established in the EEA and registered
under the CRA Regulation unless (1) the rating is provided by a
credit rating agency not established in the EEA but is endorsed
by a credit rating agency established in the EEA and registered
under the CRA Regulation or (2) the rating is provided by a
credit rating agency not established in the EEA which is certified
under the CRA Regulation.
Withholding Tax:
All payments in respect of Notes will be made free and clear of
withholding taxes of the Kingdom of Spain, as the case may be,
unless the withholding is required by law. In that event, the
Issuer will (subject as provided in Condition 7 ("Taxation")) pay
such additional amounts as will result in the Noteholders
receiving such amounts as they would have received in respect
of such Notes had no such withholding been required.
See "Taxation in Spain".
Governing Law:
The issue of the Notes, including their legal nature (obligaciones
u otros valores que reconozcan o creen deuda), the title and
transfer of the Notes as described in Condition 2.3 ("Title and
transfer"), the status of the Notes as described in Condition 3
("Status of the Notes") and the provisions of Condition 10
("Syndicate of Noteholders, Modification and Waiver") relating
to the appointment of the Commissioner and the Syndicate of
Noteholders, and any non-contractual obligations arising out of
or in connection with those provisions, are governed by, and
shall be construed in accordance with, Spanish law. The Notes
(save as provided above) and any non-contractual obligations
arising out of or in connection with the Notes are governed by,
and shall be construed in accordance with, English law. The
Notes are issued in accordance with the formalities prescribed
by Spanish law.
Listing and Trading:
Application will be made for the Notes to be admitted to trading
on the AIAF, the Spanish market for trading in fixed income
securities issued by industrial companies, financial institutions
and regional public bodies.
Clearing Systems:
Iberclear.
Holders of a beneficial interest in the Notes who do not have,
directly or indirectly through their custodians, a participating
account with Iberclear may participate in the Notes through
bridge accounts maintained by each of Euroclear System
("Euroclear") and Clearstream Banking, société anonyme
- 5-
("Clearstream Luxembourg"), with Iberclear.
Selling Restrictions:
See "Subscription and Sale".
Risk Factors:
Investing in the Notes involves risks. See "Risk Factors".
- 6-
RISK FACTORS
Any investment in the Notes is subject to a number of risks. Prior to investing in the Notes, prospective
investors should carefully consider risk factors associated with any investment in the Notes, the business
of the Issuer and the industry in which it operates together with all other information contained in this
Prospectus, including, in particular the risk factors described below. Words and expressions defined in
the "Terms and Conditions of the Notes" below or elsewhere in this Prospectus have the same meanings
in this section.
The following is not an exhaustive list or explanation of all risks which investors may face when making
an investment in the Notes and should be used as guidance only. Additional risks and uncertainties
relating to the Issuer that are not currently known to the Issuer or that it currently deems immaterial, may
individually or cumulatively also have a material adverse effect on the business, prospects, results of
operations and/or financial position of the Issuer and, if any such risk should occur, the price of the Notes
may decline and investors could lose all or part of their investment. Investors should consider carefully
whether an investment in the Notes is suitable for them in light of the information in this Prospectus and
their personal circumstances.
Risks Relating To the Issuer
Risks in Relation to the Banking Activities and Operations of Ibercaja Banco and its consolidated
subsidiaries (the "Group")
Exposure to the real estate market has made the Issuer more vulnerable to market fluctuations in the
price of real estate.
As a portion of the Issuer's loan portfolio is linked to the real estate market, it is exposed to market
fluctuations in the price of real estate.
From 2002 to 2007, population increase, economic growth and the strength of the labour market in Spain,
together with the decrease in interest rates within the EU, led to an increase in demand for mortgage
loans. This contributed to increased real estate prices in Spain, which, in turn, has led to speculation that
there could be a significant downturn in the Spanish real estate market. During late 2007, the housing
market began to adjust in Spain as a result of excess supply and higher interest rates. Since 2008, as
economic growth came to a halt in Spain, housing oversupply persisted, unemployment continued to
increase, housing demand continued to decrease and home prices declined while mortgage delinquencies
increased. Further, recent government measures, such as the increase in the value added tax rate of real
estate transactions may lead to further declines in demand for property. These trends, especially in the
case of higher interest rates and unemployment rates coupled with declining real estate prices, could have
a material adverse impact on the Issuer's mortgage payment delinquency rates, which in turn could have a
material adverse effect on its business, financial condition and results of operations.
In addition, the decline in property prices decreases the value of the real estate securing the Issuer's
mortgage loans and adversely affects the credit quality of property developers to whom the Issuer has
lent. A further decrease in real estate prices may occur including to levels below the outstanding principal
balance on these loans, which may require the Issuer to reclassify the relevant loans, establish additional
provisions for loan losses and increase reserve requirements. Decreasing real estate prices therefore
increase the risk of loss and decrease the value of the Issuer's real estate loan portfolio, which could have
a material adverse effect on its business, results of operation and financial condition.
Property risk, financing for property construction and development business.
The Issuer has lending exposure to risks in the property development and construction sector.
At 31 March 2015, loans for property construction and/or development amounted to €3,085.8 million,
which is 8.7 per cent. of the Issuer's total gross lending to customers. Specific coverage (non-performing
loans ("NPLs") and sub-standard) for this exposure amounted to €1,037.7 million at the same date. The
NPL ratio on loans to real-estate developers was 51.24 per cent. at 31 March 2015. Of the €3,085.8
million indicated, €2,744.3 million correspond to loans secured by mortgages, while €341.5 million
correspond to unsecured loans.
- 7-
The net carrying amount of the portfolio of property acquired or foreclosed at 31 March 2015 was €923.7
million and was covered by net provisions of €947.1 million. Ibercaja Banco is analysing different
alternatives regarding the disposal of these foreclosed assets.
Volatility in interest rates may negatively affect the Group's net interest income and increase the Group's
non-performing loan portfolio.
Changes in market interest rates could affect the interest rates charged on interest-earning assets
differently than the interest rates paid on interest-bearing liabilities. This difference could result in an
increase in interest expense relative to interest income leading to a reduction in the Group's net interest
income. Income from treasury operations is particularly vulnerable to interest rate volatility. Interest rates
are highly sensitive to many factors beyond the Group's control, including increased regulation of the
financial sector, monetary policies, domestic and international economic and political conditions and
other factors. At 31 March 2015, interest-rate sensitive assets totalled €37,531 million, compared
with €37,238 million of interest-rate sensitive liabilities, with an aggregate positive gap of €293 million.
Rising interest rates may also lead to an increase in the Issuer's bad and doubtful debts portfolio if
borrowers cannot refinance in a higher interest rate environment, resulting an increase in defaults on its
loans to customers if borrowers are unable to meet their increased interest expense obligations and reduce
demand for loans and the Issuer's ability to generate loans.
Changes in interest rates may therefore have a material adverse effect on the Group's interest margins as
well as the Issuer's business, financial condition and results of operations.
Portions of the Group's loan portfolio are subject to risks relating to force majeure and any such event
could materially adversely affect its operating results.
The Group's financial and operating performance may be adversely affected by force majeure events,
such as natural disasters, particularly in locations where a significant portion of its loan portfolio is
composed of real estate loans. Natural disasters such as earthquakes and floods may cause widespread
damage which could impair the asset quality of its loan portfolio and could have an adverse impact on the
economy of the affected region.
The Issuer's insurance coverage may not adequately cover its losses.
Due to the nature of the Issuer's operations and the nature of the risks that it faces, there can be no
assurance that the insurance coverage it maintains is adequate. If the Issuer were to suffer a significant
loss for which it is not insured, its business, financial condition and results of operations could be
materially adversely affected.
The Issuer faces increasing competition in its business lines.
The markets in which the Issuer operates are highly competitive. Financial sector reforms have increased
competition among both local and foreign financial institutions, and it believes that this trend will
continue. In addition, the trend towards consolidation in the banking industry has created larger and
stronger banks with which it must now compete, some of which have recently received public capital.
The Issuer also faces competition from non-bank competitors, such as factoring companies, mutual funds,
pension funds, insurance companies, and public debt (as a result of the high yields which are being
currently offered as a consequence of the sovereign debt crisis).
If the Group is unable to provide competitive product and service offerings, it may fail to attract new
customers and/or retain existing customers, experience decreases in its interest, fee and commission
income, and/or lose market share, the occurrence of any of which could have a material adverse effect on
its business, financial condition and results of operations.
The Group is exposed to risks faced by other financial institutions.
The Group routinely transacts with counterparties in the financial services industry, including brokers and
dealers, commercial banks, investment banks, mutual and hedge funds, and other institutional clients.
Defaults by, and even rumours or questions about the solvency of, certain financial institutions and the
financial services industry generally have led to market-wide liquidity problems and could lead to losses
- 8-
or defaults by other institutions. These liquidity concerns have had, and may continue to have, a chilling
effect on inter-institutional financial transactions in general. Many of the routine transactions the Group
enters into expose it to significant credit risk in the event of default by one of the Group's significant
counterparties. Despite the risk control measures the Group have in place, a default by a significant
financial counterparty, or liquidity problems in the financial services industry in general, could have a
material adverse effect on the Group's business, financial condition and results of operations.
The financial problems faced by the Group's customers could adversely affect the Group.
Market turmoil and economic recession, especially in Spain, could materially and adversely affect the
liquidity, businesses and/or financial conditions of the Group's borrowers, which could in turn increase
the Group's non-performing loan ratios, impair the Group's loan and other financial assets and result in
decreased demand for borrowings in general. In the context of the recovery from the recent market
turmoil and economic recession, and with high unemployment coupled with low consumer spending, the
value of assets collateralising the Group's secured loans, including homes and other real estate, could still
decline significantly, which could result in the impairment of the value of the Group's loan assets. In
addition, the Group's customers may further significantly decrease their risk tolerance to non-deposit
investments such as stocks, bonds and mutual funds, which would adversely affect the Group's fee and
commission income. Any of the conditions described above could have a material adverse effect on the
Group's business, financial condition and results of operations.
Liquidity constraints could lead to increased financing costs or changes in the lending practices of the
Issuer.
Ready access to funds is essential to any banking business, including that of the Issuer. The Issuer's
ability to raise funds may be impaired by factors that are not specific to its operations, such as general
market conditions, disruption of the financial markets or negative views about the prospects of the
industries to which the Issuer provides a large proportion of loans, which could in turn generate a
negative view of the Issuer's liquidity among creditors and result in a less favourable credit rating, higher
borrowing costs and poorer access to funds.
The Issuer may be unable to secure additional funding in the international capital markets if conditions in
these markets, or its credit ratings, were to deteriorate. In this regard, it should be noted that the Issuer is
not a publicly-traded entity and therefore has limited access to, and may be unable to obtain financing
from, public capital markets.
Further, customer deposits are a significant source of funding for the Issuer. There can be no assurance
that in the event that the Issuer's depositors withdraw their funds at a rate faster than the rate at which
borrowers repay their loans, it will be able to maintain its current levels of funding without incurring
higher funding costs or having to liquidate certain of the Group's assets. A shortage of funds from retail
deposits could have a material adverse effect on the Group's business, financial condition and results of
operations.
In addition, as sources of liquidity introduced as extraordinary measures in response to the financial crisis
are withdrawn (such as the Spanish treasury, the Instituto Oficial de Crédito and various Spanish public
administrations), expansionary economic policies are removed from the market and the market adjusts
accordingly, there can be no assurance that the Issuer will be able to continue funding its business or
maintain its current levels of funding without incurring higher funding costs or having to liquidate certain
of its assets.
There can be no assurance that, in the event that depositors withdraw their funds at a rate faster than the
rate at which borrowers repay their loans or in the event of a sudden or unexpected shortage of funds in
the banking systems or money markets in which the Issuer operates, the Issuer will be able to meet its
liquidity needs or to do so without incurring higher funding costs or having to liquidate certain of its
assets which could reduce its asset management income and have a material adverse effect on its interest
margins, as well as a material adverse effect on the Issuer's business, financial condition and results of
operations.
- 9-
Risks concerning borrower credit quality and general economic conditions are inherent in the Group's
business.
Risks arising from changes in credit quality and the recoverability of loans and amounts due from
counterparties or borrowers (including, but not limited to, an insolvency proceeding of a counterparty or
debtor) are inherent in a wide range of the Group's businesses. Adverse changes in the credit quality of
the Group's borrowers and counterparties or a general deterioration in Spanish or global economic
conditions, or arising from systemic risks in the financial systems, could reduce the recoverability and
value of the Group's assets and require an increase in the Group's level of allowances for credit losses.
Deterioration in the economies in which the Group operates could reduce the profit margins for the
Group's banking and financial services businesses.
Market risks associated with fluctuations in bond and equity prices and other market factors are inherent
in the Group's business. Protracted market declines can reduce liquidity in the markets, making it harder
to sell assets and leading to material losses.
The performance of financial markets may cause changes in the value of the Group's investment and
trading portfolios. In some of the Group's business, protracted adverse market movements, particularly
asset price decline, can reduce the level of activity in the market or reduce market liquidity. These
developments can lead to material losses if the Group cannot close out deteriorating positions in a timely
way. This may especially be the case for assets of the Group for which there are less liquid markets.
Assets that are not traded on stock exchanges or other public trading markets, such as derivative contracts
between banks, may have values that the Group calculates using models other than publicly quoted prices.
Monitoring the deterioration of prices of assets like these is difficult and could lead to losses that the
Group does not anticipate.
The volatility of world equity markets due to the recent economic uncertainty has had a particularly
strong impact on the financial sector. Continued volatility may affect the value of the Group's investments
in entities in this sector and, depending on their fair value and future recovery expectations could become
a permanent impairment which would be subject to write-offs against the Group's results.
The Group is also exposed to foreign exchange rate risk. The exchange rate risk consists of the potential
losses which may occur as a result of adverse movements in exchange rates in respect of the different
currencies in which the Group operates.
Some of the Group's business is cyclical and the Group's income may decrease when demand for certain
products or services is in a downwards cycle.
The level of income the Group derives from certain of its products and services depends on the strength
of the economies in the regions where the Group operates and market trends prevailing in those regions.
Customer loans and deposits, which collectively account for most of its earnings, are particularly
sensitive to economic conditions. Although the Spanish economy is forecasted to continue to recover
in 2015, if the business environment in Spain does not improve or worsens, the results of operations of
the Group could be materially adversely affected.
Despite the Group's risk management policies, procedures and methods, the Group may nonetheless be
exposed to unidentified or unanticipated risks.
The Group's risk management techniques and strategies may not be fully effective in mitigating the
Group's risk exposure in all economic market environments or against all types of risk, including risks
that the Group fails to identify or anticipate. Some of the Group's qualitative tools and metrics for
managing risk are based upon the Group's use of observed historical market behaviour. The Group applies
statistical and other tools to these observations to arrive at quantifications of its risk exposures. These
qualitative tools and metrics may fail to predict future risk exposures. These risk exposures could, for
example, arise from factors the Group did not anticipate or correctly evaluate in its statistical models.
This would limit the Group's ability to manage its risks. The Group's losses thus could be significantly
greater than the historical measures indicate. In addition, the Group's quantified modelling does not take
all risks into account. The Group's more qualitative approach to managing those risks could prove
insufficient, exposing it to material unanticipated losses. If existing or potential customers believe the
Group's risk management is inadequate, they could take their business elsewhere. This could harm the
Group's reputation as well as its revenues and profits.
- 10-
The Group's business could be affected if its capital is not managed effectively.
Effective management of the Group's capital position is important to its ability to operate its business and
to pursue its business strategy. However, in response to the recent financial crisis, a number of changes to
the regulatory capital framework have been adopted or are being considered. For example, the Capital
Requirements Directive IV ("CRD IV Directive") requires the Issuer to maintain certain capital adequacy
ratios.
As these and other changes are implemented or future changes are considered or adopted that limit the
Group's ability to manage its balance sheet and capital resources effectively or to access funding on
commercially acceptable terms, the Group may experience a material adverse effect on its financial
condition and regulatory capital position.
Debt and equity investors, analysts and other market professionals may also require higher capital buffers
than those required under current or proposed future regulations due to, among other things, the continued
general uncertainty involving the financial services industry and the uncertain global economic
conditions. Any such market perception, or any concern regarding compliance with future capital
adequacy requirements, could increase the Group's borrowing costs, limit its access to capital markets or
result in a downgrade in its credit ratings, which could have a material adverse effect on its business,
financial condition and results of operations.
Compliance with anti-money laundering and anti-terrorism financing rules involves significant cost and
effort.
Group companies are subject to rules and regulations regarding money laundering and the financing of
terrorism. Monitoring compliance with anti-money laundering and anti-terrorism financing rules can put a
significant financial burden on banks and other financial institutions and pose significant technical
problems. Although the Group believes that its current policies and procedures are sufficient to comply
with applicable rules and regulations, it cannot guarantee that its Group-wide anti-money laundering and
anti-terrorism financing policies and procedures completely prevent situations of money laundering or
terrorism financing. Any of such events may have severe consequences, including sanctions, fines and
reputational consequences, which could have a material adverse effect on the Group's financial condition
and results of operations.
Operational risks are inherent in the Group's business.
The Group's businesses depend on the ability to process a large number of transactions efficiently and
accurately. Losses can result from inadequate personnel, inadequate or failed internal control processes
and systems, from external events that interrupt normal business operations or from unforeseeable events
which could lead to losses for the Group. The Group also faces the risk that the design of its controls and
procedures prove to be inadequate or are circumvented, as well as data processing risks, such as
programming errors, systems failure and application design errors.
In addition, any persons that circumvent the security measures could wrongfully use the Group's
confidential information or that of its clients, which could expose it to a risk of loss, regulatory
consequences or litigation and could negatively impact its reputation and brand name.
The banking business involves the routine handling of large amounts of money, creating the risk of theft,
fraud or deception carried out by clients, third-party agents, employees and managers. The employees of
the Group may also commit errors that could subject it to financial claims for negligence and otherwise,
as well as regulatory actions. Despite the risk management measures put in place by the Issuer, there can
be no assurance that funds under its control could lead to inappropriate or illegal manners, which could
expose the Issuer to liability to customers, governmental sanctions, negative publicity, loss of customers
and other negative consequences.
Substantial losses incurred by the Issuer's customers as a result of any security breaches, errors,
omissions, malfunctions, system failures or disaster could subject it to claims from clients for recovery of
such losses. These claims, together with the resulting damage to the Issuer's reputation, could have a
material adverse effect on its business, financial condition and results of operation.
- 11-
The Fund for Orderly Bank Restructuring (FROB) might become a shareholder of the Issuer.
On 12 March 2013, Banco Grupo Cajatres, S.A. ("Caja3") issued contingent convertibles bonds for an
amount of €407 million which were fully subscribed by the Fund for Orderly Bank Restructuring (Fondo
de Restructuración Ordenada Bancaria, the "FROB"). In October 2014, the deed of merger by
absorption of Caja3 into Ibercaja Banco was executed, and Caja3 was integrated in the Issuer (see
"Integration of Ibercaja Banco and Caja3" in "Description of the Issuer" below).
The Issuer will amortise the contingent convertibles bonds in the scheduled dates: 5% in March 2016,
40% in March 2017 and 55% in December 2017. Before these dates, if any of the events that allow the
FROB to call on the conversion of the contingent convertible bonds into shares of the Issuer were to take
place, the FROB might become a shareholder of the Issuer, being able to exercise significant influence in
the management and administration of Ibercaja Banco.
The contingent convertibles bonds rank junior to any creditors of the Issuer (subordinated or not), holders
of preferential participations and/or preferential shares, pari passu with all other issues of convertible
preferential participations or other similar convertible securities, and senior to ordinary shareholders.
The Group relies on recruiting, retaining and developing appropriate senior management and skilled
personnel.
The Group's continued success depends in part on the continued service of key members of its
management team. The ability to continue to attract, train, motivate and retain highly qualified
professionals is a key element of the Group's strategy. The successful implementation of the Group's
growth strategy depends on the availability of skilled management, both at its head office and at each of
its business units. If the Group or one of its business units or other functions fails to staff its operations
appropriately or loses one or more of its key senior executives and fails to replace them in a satisfactory
and timely manner, the Group's business, financial condition and results of operations, including control
and operational risks, may be adversely affected. Likewise, if the Group fails to attract and appropriately
train, motivate and retain qualified professionals, its business may also be affected.
The Group is exposed to risk of loss from legal and regulatory proceedings.
The Group faces various issues that may give rise to risk of loss from legal and regulatory proceedings
arising from its relationship with customers, competitors, shareholders, employees, institutions or other
agents. These issues include dealing with potential conflicts of interest, ethical issues, misselling, legal
and regulatory compliance requirements, and conduct by companies in which the Group holds strategic
investments or joint venture partners, which could increase the number of litigation claims and the
amount of damages asserted against the Group or subject the Group to regulatory enforcement actions,
fines and penalties.
The Supreme Court of Spain issued on 9 May 2013 a decision regarding the legality of "floor" clauses in
mortgage loans to consumers by various financial entities (Issuer not included) which limit any decrease
in variable interest rates on such loans. As at 31 March 2015, the Issuer's outstanding balance of loans
with floor clauses amount to €2,960 million, equivalent to 8.3% of total gross credit.
Credit, market and liquidity risks may have an adverse effect on the Issuer's credit ratings and the cost of
funds. Any reduction in the Issuer's credit rating could increase its cost of funding and adversely affect its
interest margins.
Credit ratings affect the cost and other terms upon which the Issuer is able to obtain funding. Rating
agencies regularly evaluate the Issuer and their ratings of its long-term debt are based on a number of
factors, including its financial strength as well as conditions affecting the financial services industry
generally.
Any downgrade in the Issuer's ratings could increase its borrowing costs, limit its access to capital
markets and adversely affect the ability of the Issuer's business to sell or market its products, engage in
business transactions—particularly longer-term and derivatives transactions—and retain its customers.
This, in turn, could reduce the Issuer's liquidity and have an adverse effect on its financial position and
results of operations.
- 12-
Since the Issuer is a Spanish company with substantial operations in Spain, its credit ratings may be
adversely affected by the assessment by rating agencies of the creditworthiness of the Kingdom of Spain.
Any decline in the Kingdom of Spain's sovereign credit ratings could, in turn, result in a decline in the
Issuer's credit ratings.
As at the date of this Prospectus, the Issuer's rating and outlook are as follows:
Agency
Moody's ..........................................
S&P ................................................
Fitch ...............................................
Long term senior unsecured
B1*
BB
BB+
Short term senior unsecured
NP
B
B
Outlook
Negative
Positive
Positive
* Long term deposit rating
In light of the difficulties in the financial services industry and the financial markets, there can be no
assurance that the rating agencies will maintain their current ratings or outlooks. With regard to the rating
agency that has a negative outlook on the Group, there can be no assurances that such agency will revise
such outlooks upward. The Group's failure to maintain favourable ratings and outlooks could increase the
cost of its funding and adversely affect the Group's interest margins.
Macroeconomic Risks Faced by the Group
The Issuer's business is substantially dependent on the Spanish economy.
As the Issuer's commercial activity is primarily carried on in Spain, its business, financial condition and
results of operations are, and will continue to be, highly dependent on the general economic conditions in
Spain. The concentration of the Group's business activities in Spain increases its exposure to (i) the
current difficult state of the Spanish economy and any potential worsening of that state; and (ii) changes
in Spain's regulatory framework that might have an adverse impact on the Issuer's business, financial
position and operating results.
Given this situation, the Government of Spain, in collaboration with various economic agents, has
approved and implemented a series of structural reforms to promote the recovery of the country's
economy, prominently including the adoption of budget austerity policies, aimed at reducing the fiscal
deficit, the reform of employment laws, measures to reform the financial system and the announced
privatisation of public sector companies. The possible consequence of a failure to meet the objectives of
those measures and non-fulfilment of the projections announced to the market by the Government of
Spain and other institutions for the coming years could trigger a further loss of confidence in the Spanish
economy by international financial operators, with the consequent adverse impact on companies that
conduct a large part of their business in Spain and thus on the Group's business, financial position and
operating results.
In addition, the weakening in the Group's customer creditworthiness could impact its capital adequacy.
The regulatory capital levels the Group is required to maintain are calculated as a percentage of its riskweighted assets ("RWA"), in accordance with the CRD IV (as defined below) package (including Royal
Decree Law 14/2013 (as defined below) that partially implemented the CRD IV in Spain). The RWA
consist of the Group's balance sheet, off-balance sheet and other market and operational risk positions,
measured and risk-weighted according to regulatory criteria, and are driven, among other things, by the
risk profile of the Group's assets, which include its lending portfolio. If a customer's repayment capacity
declines, the Group lowers the customer's rating, which results in an increase in its RWA. In addition,
substantial market volatility, a widening of credit spreads, a change in the regulatory treatment of certain
positions, changes in foreign exchange rates, decreases in collateral ratios as a consequence of the
deterioration of the market value of assets pledged as collateral, or a further deterioration of the economic
environment, among other things, could result in an increase in the Group's RWA, which potentially may
reduce its capital adequacy ratios. If the Group were to experience a reduction in its capital adequacy
ratios, and could not raise further capital, it would have to reduce its lending or investments in other
operations. Any of the foregoing could have a material adverse effect on the Group's business, financial
condition, results of operations and prospects.
- 13-
Continuing unfavourable global economic conditions, and in particular, continuing unfavourable
economic conditions in Spain, including any further deterioration in the European or Spanish financial
systems, could have a material adverse effect on the Group's business, financial condition and results of
operations.
Although the Group operates primarily in Spain, the evolution of the situation in the European Union is
also very important, given its impact on liquidity and conditions of financing.
The continuing crisis in worldwide financial and credit markets has led to a global economic slowdown in
recent years, with many economies around the world showing significant signs of weakness or slow
growth. In Europe, there has been a significant reduction in risk premiums. Nevertheless, uncertainty
regarding the budget deficits and solvency of several countries persists, together with the risk of
contagion to other more stable countries. To a lesser extent than during the height of the financial crisis,
there is also the risk of default on the sovereign debt of certain EU countries and the impact this would
have on the Eurozone countries, including the potential risk that one or more countries may leave the
Eurozone, either voluntarily or involuntarily, which has raised concerns about the ongoing viability of the
euro currency and the European Monetary Union (the "EMU"). These concerns have been further
exacerbated by the rise of Euro-scepticism in certain EU countries, including countries that decided not to
enter the EMU such as the United Kingdom. This growing Euro-scepticism in certain EU countries could
pose additional difficulties for the EU's ability to react to the ongoing economic crisis.
The recent significant reduction in risk premiums and improved access to funding have not entirely
addressed concerns about Spain in the context of the sovereign debt crisis and health of the Spanish
banking sector. The prospect of a renewed contraction of the Spanish economy could lead the Spanish
government to consider requesting financial assistance from the European Central Bank ("ECB"). Any
such financial assistance could impose austerity measures and other restrictions on the Spanish
government, including enhanced requirements directed toward Spanish banking institutions, which could
make it difficult for Spain to generate revenues and such events would raise additional concerns regarding
its ability to service its sovereign debt. Any such restrictions, including additional capital requirements
applicable to Spanish banking institutions, could also materially affect the Group's financial condition.
Furthermore, any such austerity measures could adversely affect the Spanish economy and reduce the
capacity of the Group's Spanish borrowers to repay loans made to them, increasing the Group's nonperforming loans.
Economic conditions remain uncertain in Spain and the European Union and may deteriorate in the
future, which could adversely affect the cost and availability of funding for Spanish and European banks,
including the Group and the quality of the Group's loan portfolio, require the Group to take impairments
on its exposures to the sovereign debt of one or more countries in the Eurozone or otherwise adversely
affect the Group's business, financial condition and results of operations.
The Group is exposed to the sovereign risk.
At 31 March 2015 the carrying value of exposure of the Group to sovereign debt amounted to €17,262.8
million, including €13.086.0 million of "available-for-sale assets", €3,325.2 million of "held-to-maturity
investments", €851.1 million of "loans and receivables" and €0.6 million of "financial assets held for
trading", with Spain accounting for 93.83% of this exposure. Of the total €17,262.8 million, €4,218.3
million come from the insurance company.
In the medium term, the Spanish economy may not be able to recover from the crisis at the same pace as
the other major European countries. This could have a negative impact on the Group's business activity,
financial position and operating results. Moreover, any default on the country's sovereign debt could have
a material adverse effect on the Group.
The Issuer is subject to substantial regulation, and regulatory and governmental oversight. Adverse
regulatory developments or changes in government policy could have a material adverse effect on its
business, results of operations and financial condition.
The financial services industry is among the most highly regulated industries in the world. The Group's
operations are subject to ongoing regulation and associated regulatory risks, including the effects of
changes in laws, regulations, policies and interpretations in Spain and the other markets in which it may
operate. This is particularly the case in the current market environment, which is witnessing increased
- 14-
levels of government and regulatory intervention in the banking sector that is expected to continue for the
foreseeable future. As a result, Ibercaja Banco may further be subject to an increasing incidence or
amount of liability or regulatory sanctions and may be required to make greater expenditures and devote
additional resources to address potential liability. The regulations which most significantly affect the
Group include amongst others, regulations relating to capital requirements or provisions, as described
below. In addition, the Group is subject to substantial regulation relating to other matters such as liquidity.
The Issuer cannot predict if increased liquidity standards, if implemented, could require the Group to
maintain a greater proportion of its assets in highly-liquid but lower-yielding financial instruments, which
would negatively affect its net interest margin. The Group is also subject to other regulations, such as
those related to anti-money laundering, privacy protection and transparency and fairness in customer
relations.
Moreover, the Issuer's regulators, as part of their supervisory function, periodically review the Issuer's
allowance for loan losses. Such regulators may require the Issuer to increase its allowance for loan losses
or to recognise further losses. Any such additional provisions for loan losses, as required by these
regulatory agencies, whose views may differ from those of the Issuer's management, could have an
adverse effect on the Issuer's earnings and financial condition.
Adverse regulatory developments or changes in government policy relating to any of the foregoing or
other matters could have a material adverse effect on the Group's business, results of operations and
financial condition.
Capital requirements.
Increasingly onerous capital requirements constitute one of the Group's main regulatory concerns.
The implementation of Basel III in the European Union is being performed through the CRD IV Directive
and the Capital Requirements Regulation ("CRR") legislative package (together with any implementing
measures, "CRD IV"). As a Spanish financial institution, the Issuer is subject to CRD IV, which is in the
process of being phased in until 1 January 2019. The CRR and the CRD IV Directives have already been
largely implemented in Spain by Royal Decree-law 14/2013 of 29 November on urgent measures
adapting the Spanish Law to the regulation of the European Union regarding the supervision and solvency
of financial institutions ("RD-L 14/2013"), by Law 10/2014, of 26 June, on planning, supervision and
solvency of credit entities ("Law 10/2014") and by the Royal Decree developing Law 10/2014 (Real
Decreto 84/2015, de 13 de febrero, por el que se desarrolla la Ley 10/2014, de 26 de junio, de
ordenación, supervisión y solvencia de entidades de crédito). RD-L 14/2013 has repealed, with effect
from 1 January 2014, any Spanish regulatory solvency requirements that may be incompatible with CRR.
Despite the CRD IV/Basel III framework setting minimum transnational levels of regulatory capital and a
measured phase-in, many national authorities have started a race to the top for capital by gold-plating
both requirements and the associated interpretation calendars.
For example, in the last three years the Bank of Spain (Banco de España) and the European Banking
Authority (the "EBA") have imposed new capital requirements in advance of the entering into force of
CRD IV. These measures have included Bank of Spain Circular 4/2011, which amended Bank of Spain
Circular 3/2008 of 22 May, on the calculation and control of minimum capital requirements and
implemented Capital Requirement Directive III ("CRD III") in Spain. In addition, some of the
requirements of Basel III were already implemented by the Spanish Government in 2011 with Royal
Decree-law 2/2011, of 18 February, on the strengthening of the financial system (as amended by
Law 9/2012, of 14 November, on restructuring and termination of credit entities) ("RD-L 2/2011") which
established a new minimum requirement in terms of principal capital (capital principal) and required
such capital to be greater than 9 per cent. from 1 January 2013. RD-L 14/2013 specifically repealed, with
effect from 1 January 2014, Title I of RD-L 2/2011, which imposed the minimum principal capital
(capital principal) requirement for credit institutions.
Furthermore, following an evaluation of the capital levels of 71 financial institutions throughout Europe
(including the Issuer) based on data available as of 30 September 2011, the EBA issued a
recommendation on 8 December 2011 pursuant to which, on an exceptional and temporary basis,
financial institutions based in the EU should reach a new minimum Core Tier 1 ratio (9 per cent.) by 30
June 2012. This recommendation has been replaced by the EBA recommendation of 22 July 2013 on the
preservation of Core Tier 1 capital during the transition to CRD IV. This new recommendation provides
- 15-
for the maintenance of a nominal floor of capital denominated in the relevant reporting currency of Core
Tier 1 capital corresponding to the amount of capital needed as at 30 June 2012 to meet the requirements
of the above recommendation of 8 December 2011. Competent authorities may waive this requirement for
institutions which maintain a minimum of 7 per cent. of common equity Tier 1 capital under CRD IV
rules applied after the transitional period.
There can be no assurance that the implementation of these new standards will not require the Issuer to
issue additional securities that qualify as regulatory capital, to liquidate assets, to curtail business or to
take any other actions, any of which may have adverse effects on the Issuer's business, financial condition
and results of operations.
During 2014, the ECB conducted, with the help of national supervisors, external advisors, consultants and
other appraisers, a comprehensive assessment of the Group consisting of three elements: (i) a supervisory
risk assessment, which assessed the main risks on the balance sheet including liquidity, funding and
leverage; (ii) an asset quality review, which focused on credit and market risks; the implementation of the
asset quality review exercise resulted in hardly €4.9 million of net provisions, already booked, and (iii) a
stress test to examine the need to strengthen capital or take other corrective measures. The Group
successfully passed the stress tests, both in the adverse scenario with a common equity Tier 1 ratio at 7.88
per cent. and in the base scenario with a common equity Tier 1 ratio at 10.57 per cent., well above the
minimum required (5.5 per cent.). As of 31 March 2015, the Group's common equity Tier 1 phase-in ratio
is 11.5% (and the Group's common equity Tier 1 fully-loaded ratio is 10.3% as of that date). The Issuer is
also subject to the requirement for own funds and eligible liabilities (MREL) pursuant to the Bank
Recovery and Resolution Directive ("RRD") as implemented in Spain.
Tax treatment of deferred tax assets following the implementation of CRD IV.
In addition to introducing new capital requirements, CRD IV provides that deferred tax assets ("DTAs")
that rely on the future profitability of a financial institution must be deducted from its regulatory capital
(specifically its Core Tier 1 Capital or common equity Tier 1 capital) for prudential reasons, as there is
generally no guarantee that DTAs will retain their value in the event of the institution facing difficulties.
This new deduction introduced by CRD IV has a significant impact on Spanish banks due to the
particularly restrictive nature of certain aspects of Spanish tax law. For example, in some EU countries
when a bank reports a loss the tax authorities refund a portion of taxes paid in previous years but in Spain
the bank must earn profits in subsequent years in order for this set-off to take place. Additionally, Spanish
tax law does not recognise as tax-deductible certain amounts recorded as costs in the accounts of a bank,
unlike the tax legislation of other EU countries.
Due to these differences and the greater impact of the requirements of CRD IV with respect to DTAs, the
Spanish regulator implemented certain amendments to the Spanish Law on Corporate Income Tax
(Law 27/2014, of 27 November) through RD-L 14/2013, which also provided for a transitional regime for
DTAs generated before 1 January 2014. These amendments enable certain DTAs to be treated as a direct
claim against the tax authorities if a Spanish bank is unable to reverse the relevant differences within 18
years or if it is liquidated, becomes insolvent or incurs accounting losses. This will, therefore, allow a
Spanish bank not to deduct such DTAs from its regulatory capital. The transitional regime provides for a
period in which only a percentage (which increases yearly) of the applicable DTAs will have to be
deducted.
Even though RD-L 14/2013 has been prepared in accordance with the requirements of CRD IV with
respect to DTAs, there can be no assurance that the tax amendments implemented by RD-L 14/2013 will
not be challenged by the European Commission, that the final interpretation of these amendments will not
change and that Spanish banks will ultimately be allowed to maintain certain DTAs as regulatory capital.
If this regulation is challenged, this may negatively affect the Issuer's regulatory capital and therefore its
ability to pay dividends or require it to issue additional securities that qualify as regulatory capital, to
liquidate assets, to curtail business or to take any other actions, any of which may have a material adverse
effect on the Issuer's business, financial condition and results of operations.
Contributions for assisting in the restructuring of the Spanish banking sector.
Royal Decree-Law 6/2013 of 22 March, on protection for holders of certain savings and investment
products and other financial measures, included a requirement for banks, including the Issuer, to make an
- 16-
exceptional one-off contribution to the Deposit Guarantee Fund (Fondo de Garantía de Depósitos), in
addition to the annual contribution to be made by member institutions, equal to €3.00 per each €1,000 of
deposits held as of 31 December 2012. The purpose of such contribution was for the Deposit Guarantee
Fund to be able to purchase at market prices the unlisted shares of certain Spanish financial institutions
involved in restructuring or resolution processes under Law 9/2012 (as defined below).
Law 11/2015 (as defined below) has established a requirement for investment firms and credit
institutions, including the Issuer, to make contributions, at least annually, to the National Resolution Fund
(Fondo de Resolución Nacional) in addition to the annual contribution to be made to the Deposit
Guarantee Fund (Fondo de Garantía de Depósitos) by member institutions. The total amount of
contributions to be made by all Spanish banking entities must equal one per cent. of the aggregate amount
of all deposits guaranteed by the Deposit Guarantee Fund. The FROB is also entitled to require additional
extraordinary contributions when the ordinary contributions of the banks are not sufficient to fund the
measures set out in Law 11/2015. The contribution of each entity shall be in proportion to the part that
such entity represents over the total aggregated amount of the following concept: total liabilities of the
entity, excluding own resources and deposits guaranteed by the Deposit Guarantee Fund. The contribution
shall be adjusted to the risk profile of each entity according to future developing regulations. The
obligation of the Issuer to make contributions will be borne when the FROB requires the specific ordinary
or extraordinary contribution to be satisfied by the Issuer. The purpose of this contribution is to fund the
FROB so that it can, inter alia, acquire equity instruments of Spanish financial institutions involved in
restructuring or resolution processes under Law 11/2015. Furthermore, Law 11/2015 has also established
an additional annual fee to fund the activities of the FROB as resolution authority.
There can be no assurance that additional funding requirements will not be imposed by the Spanish
authorities for assisting in the restructuring of the Spanish banking sector.
Steps taken towards achieving an EU fiscal and banking union.
The project of achieving a European banking union was launched in the summer of 2012. Its main goal is
to resume progress towards the European single market for financial services by restoring confidence in
the European banking sector and ensuring the proper functioning of monetary policy in the Eurozone.
Banking union is expected to be achieved through new harmonised banking rules (the single rulebook)
and a new institutional framework with stronger systems for both banking supervision and resolution that
will be managed at the European level. Its two main pillars are the Single Supervisory Mechanism (the
"SSM") and the Single Resolution Mechanism ("SRM").
The SSM is intended to help make the banking sector more transparent, unified and safe. The SSM
Regulation was passed in November 2013 with effect from 1 January 2014. On 4 November 2014, the
ECB assumed its new supervisory responsibilities within the SSM, in particular direct supervision of
the 120 largest European banks (including the Issuer). In preparation for this step, between
November 2013 and October 2014 the ECB conducted, together with national supervisors, a
comprehensive assessment of 130 banks, which together hold more than 80 per cent. of Eurozone banking
assets. The exercise consisted of three elements: (i) a supervisory risk assessment, which assessed the
main balance sheet risks including liquidity, funding and leverage; (ii) an asset quality review, which
focused on credit and market risks; and (iii) a stress test to examine the need to strengthen capital or take
other corrective measures. On 26 October 2014, the ECB announced the results of the comprehensive
assessment.
The SSM represents a significant change in the approach to bank supervision at a European and global
level, even if it is not expected to result in any radical change in bank supervisory practices in the short
term. The SSM will result in the direct supervision of more than 120 financial institutions, among them
the Issuer, and indirect supervision of around 3,500 financial institutions. The new supervisor is expected
to be one of the largest in the world in terms of assets under supervision. In the coming years, the SSM is
expected to work to establish a new supervisory culture importing best practices from the various
supervisory authorities that will be part of the SSM. Several steps have already been taken in this regard
such as the recent publication of the Supervisory Guidelines and the creation of the SSM Framework
Regulation. In addition, this new body will represent an extra cost for the financial institutions that will
fund it through payment of supervisory fees.
- 17-
The other main pillar of the EU banking union is the SRM, the main purpose of which is to ensure a
prompt and coherent resolution of failing banks in Europe at minimum cost. Regulation (EU)
No. 806/2014 of the European Parliament and the Council (the "SRM Regulation"), which was passed
on 15 July 2014, and takes legal effect from 1 January 2015, establishes uniform rules and a uniform
procedure for the resolution of credit institutions and certain investment firms in the framework of the
SRM and a Single Resolution Fund. A new Single Resolution Board began operation from 1
January 2015 but it is not expected to fully assume its resolution powers until 1 January 2016. From that
date onwards the Single Resolution Fund should be in place, funded by contributions from European
banks. The Single Resolution Fund is intended to reach a total amount of €55 billion by 2024 and to be
used as a separate backstop only after an 8 per cent. bail-in has already been applied to cover capital
shortfalls (in line with the RRD).
By allowing for the consistent application of EU banking rules through the SSM, the agreed banking
union is intended to help resume momentum towards economic and monetary union. In order to complete
such union a single deposit guarantee scheme is still needed which may require a change to the existing
European treaties. This is the subject of continued negotiation by European leaders to ensure further
progress is made in European fiscal, economic and political integration.
Regulations adopted towards achieving a banking and/or fiscal union in the EU and decisions adopted by
the ECB in its capacity as the Issuer's main supervisory authority may have a material impact on the
Issuer's business, financial condition and results of operations. In particular, the RRD and
Directive 2014/49/EU on deposit guarantee schemes were published in the Official Journal of the EU
on 12 June 2014. The RRD became effective from 1 January 2015 and the bail-in tool must be operational
beginning no later than 1 January 2016. A minimum 8 per cent. bail-in of a bank's total liabilities and own
funds (including senior debt and uncovered deposits) will be required as a precondition for access to any
direct recapitalisation by the European Stability Mechanism ("ESM"), as agreed by the Eurozone
members in June 2014.
In addition, on 29 January 2014, the European Commission released its proposal on the structural reforms
of the European banking sector that will impose new constraints on the structure of European banks. The
proposal aims at ensuring the harmonisation between the divergent national initiatives in Europe. It
includes a prohibition on proprietary trading and a mechanism to potentially require the separation of
trading activities (including market making), complex securitisations and risky derivatives.
Ibercaja Banco recently became subject to the financial supervision of the ECB.
Since 4 November 2014, Ibercaja Banco, along with all other significant financial institutions in the
Eurozone, has become subject to direct supervision by the ECB, which assumed the supervisory functions
previously performed by the Bank of Spain. It is not yet possible to assess the impact of this new
supervisory framework on Ibercaja Banco. While the ECB will implement substantially the same
supervisory framework as the former regulators, the supervisory practices and procedures of the ECB
may prove to be more onerous or costly than those applied to Ibercaja Banco in the past.
Taxation of the financial sector.
On 14 February 2013 the European Commission published a proposal (the "Commission's Proposal")
for a Council Directive for a common financial transaction tax ("FTT") in Belgium, Germany, Estonia,
Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia (the "participating Member
States").
The Commission's Proposal has a very broad scope and could, if introduced, apply to certain dealings in
the Notes (including secondary market transactions) in certain circumstances.
Under the Commission's Proposal the FTT could apply in certain circumstances to persons both within
and outside of the participating Member States. Generally, it would apply to certain dealings in the Notes
where at least one party is a financial institution, and at least one party is established in a participating
Member State. A financial institution may be, or be deemed to be, "established" in a participating
Member State in a broad range of circumstances, including (a) by transacting with a person established in
a participating Member State or (b) where the financial instrument which is subject to the dealings is
issued in a participating Member State.
- 18-
Joint statements issued by participating Member States indicate an intention to implement the FTT by 1
January 2016. However, the FTT proposal remains subject to negotiation between the participating
Member States and the scope of any such tax is uncertain. Additional EU Member States may decide to
participate.
On 4 July 2014, Royal Decree-Law 8/2014, of 4 July was introduced in Spain setting forth a tax rate
of 0.03 per cent. on bank deposits in Spain. Such tax was established in 2013 (but previously with a 0 per
cent. rate) and is payable annually by Spanish banks. There can be no assurance that additional national or
transnational bank levies or financial transaction taxes will not be adopted by the authorities of the
jurisdictions where the Issuer operates. Any such additional levies and taxes could have a material
adverse effect on the Issuer's business, financial condition, results of operations and prospects.
Prospective holders of the Notes are advised to seek their own professional advice in relation to the FTT.
Risks Relating To The Notes
The Notes are complex instruments that may not be suitable for certain investors
The Notes may not be a suitable investment for all investors. Each potential investor in the Notes must
determine the suitability of that investment in light of its own circumstances. In particular, each potential
investor may wish to consider, either on its own or with the help of its financial and other professional
advisers, whether it:
(a)
has sufficient knowledge and experience to make a meaningful evaluation of the Notes, the
merits and risks of investing in the Notes and the information contained or incorporated by
reference in this Prospectus or any applicable supplement;
(b)
has access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its
particular financial situation, an investment in the Notes and the impact the Notes will have on
its overall investment portfolio;
(c)
understands thoroughly the terms of the Notes and is familiar with the behaviour of financial
markets;
(d)
has sufficient financial resources and liquidity to bear all of the risks of an investment in the
Notes, including where Euros (the currency for principal and interest payments) is different from
the potential investor's currency; and
(e)
is able to evaluate possible scenarios for economic, interest rate and other factors that may affect
its investment and its ability to bear the applicable risks.
Legal investment considerations may restrict certain investments. 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 (a) Notes are legal investments for it, (b) Notes can be used as collateral for various types of
borrowing and (c) other restrictions apply to its purchase or pledge of any Notes. Financial institutions
should consult their legal advisors or the appropriate regulators to determine the appropriate treatment of
Notes under any applicable risk-based capital or similar rules.
An investor in the Notes assumes an enhanced risk of loss in the event of the Issuer's insolvency
The Issuer's obligations under the Notes will be unsecured and subordinated and will rank junior in
priority of payment to all unsubordinated obligations of the Issuer. Although the Notes may pay a higher
rate of interest than comparable Notes which are not subordinated, there is an enhanced risk that an
investor in the Notes will lose all or some of his investment should the Issuer become insolvent.
Pursuant to article 92 of the Insolvency Law after payment in full of unsubordinated claims but before
distributions to shareholders as a consequence of their condition of equity holders, the Issuer will meet
subordinated payment claims in the order detailed below and pro rata within each class:
(a)
claims that, having been lodged late, are included in the list of creditors by the insolvency
administrators or that, not having been duly lodged or which have been lodged late are included
- 19-
on that list by subsequent communications or by the Court on resolving on an appeal on the list
of creditors. The following claims shall not be subordinated for this cause and shall be classified
according to their respective nature: (i) those credits arising from article 86.3 of the Insolvency
Law, (ii) those credits whose existence arises from the documentation of the Issuer, (iii) those
arising from an executive title, (iv) those guaranteed by an in rem guarantee registered with a
public registry, (v) those that are in any way recorded in the insolvency proceedings or in any
other judicial proceedings, or (vi) those that require inspection action by the Public
Administrations to be determined;
(b)
claims that, under a contractual arrangement, are subordinated in nature with regard to all the
other claims against the Issuer (including the Notes);
(c)
interest (including accrued and unpaid interest due on the Notes) and overcharge claims of any
kind, including those for late payment, except for those claims with a security in rem, up to the
sum of the respective guarantee;
(d)
claims for fines and other monetary penalties; and
(e)
claims held by any of the persons especially related to the Issuer that are referred to in article 93
of the Insolvency Law, except for those arising from non-financing agreements entered into by
the Issuer and those of its shareholders referred to under articles 93.2.1º and 93.2.3º of the
Insolvency Law and which have the percentage of holding established therein.
Creditors that have converted into equity directly or indirectly all or part of their credits pursuant
to a refinancing agreement adopted in accordance with article 71 bis or the fourth additional
disposition of the Insolvency Law, will not be regarded as persons especially related (personas
especialmente relacionadas) to the Issuer, for the purpose of qualifying the credits held against
the debtor as a result of the refinancing granted by virtue of such agreement;
(f)
claims resulting from a claw-back action estimated by the relevant Court in favour of whom the
ruling has declared a party in bad faith in the clawed-back act as a consequence of the insolvency
claw-back action; and
(g)
claims arising from the contracts with reciprocal obligations referred to in articles 61, 62, 68
and 69 of the Insolvency Law, when the Court finds, following the report by the insolvency
administrators, that the creditor has repeatedly hindered fulfilment of the contract to the
detriment of the insolvency interests.
According to Additional Provision Fourteen of Law 11/2015, of 18 June, on recovery and resolution of
credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperación y resolución de
entidades de crédito y empresas de servicios de inversion) ("Law 11/2015"), in case of insolvency of the
Issuer, claims in respect of principal of subordinated notes qualifying as Tier 2 instruments (such as the
Notes) will rank among the claims of paragraph (b) above: (i) pari passu among themselves and claims in
respect of principal of other Subordinated Notes and claims in respect of principal of any other
contractually subordinated obligations of the Issuer qualifying as Tier 2 instruments, (ii) senior to claims
in respect of principal of any contractually subordinated obligations of the Issuer qualifying as Additional
Tier 1 instruments and (iii) junior to claims in respect of principal of any contractually subordinated
obligations not qualifying as Additional Tier 1 instruments or Tier 2 instruments.
Holders of the Notes by subscribing the Notes are accepting to be subordinated to any subordinated
obligations of the Issuer which by law or by their terms, and to the extent permitted by Spanish law, rank
senior to the Notes and/or to any other subordinated obligations of the Issuer ranking pari passu with the
Notes ("Senior Subordinated Obligations").
Under the Insolvency Law, accrual of interest on the Notes shall be suspended from the date of the
declaration of insolvency of the Issuer.
The Issuer is not prohibited from issuing further debt, which may rank pari passu with or senior to the
Notes
The terms and Conditions of the Notes place no restriction on the amount of debt that the Issuer may issue
that ranks senior to the Notes (including Senior Subordinated Notes), or on the amount of securities it
- 20-
may issue that rank pari passu with the Notes. The issue of any such debt or securities may reduce the
amount recoverable by Noteholders upon liquidation of the Issuer.
The RRD and SRM Regulation are intended to enable a range of actions to be taken in relation to
credit institutions and investment firms considered to be at risk of failing. The taking of any action
under the RRD and SRM Regulation could materially affect the value of any Notes
The RRD and the SRM Regulation provide for the establishment of an EU-wide framework for the
recovery and resolution of credit institutions and investment firms. The regime provided for by the RRD
is, among other things, stated to be needed to provide authorities with a credible set of tools to intervene
sufficiently early and quickly in an unsound or failing institution so as to ensure the continuity of the
institution's critical financial and economic functions while minimising the impact of an institution’s
failure on the economy and financial system. Under the SRM Regulation a centralised power of
resolution is established and entrusted to the Single Resolution Board (the "SRB") and to the national
resolution authorities.
In accordance with the provisions of the SRM Regulation, when applicable, the SRB, the Council of the
European Union (where relevant), and the Commission should replace the national resolution authorities
designated under RRD in respect to all aspects relating to the decision-making process and the national
resolution authorities designated under RRD should continue to carry out activities relating to the
implementation of resolution schemes adopted by the SRB.
The powers provided to the resolution authorities in the RRD and the SRM Regulation include write
down and conversion powers to ensure relevant capital instruments (including Tier 2 capital instruments
such as the Notes) fully absorb losses at the point of non-viability of the issuing institution, as well as a
bail-in tool comprising a more general power for resolution authorities to write down the claims of
unsecured creditors of a failing institution and to convert unsecured debt claims to equity. Accordingly,
the RRD and the SRM Regulation contemplate that resolution authorities may require the permanent
write down in full of such capital instruments (including Tier 2 capital instruments such as the Notes) or
the conversion of them into common equity tier 1 instruments at the point of non-viability (which
common equity tier 1 instruments may also be subject to any application of the bail-in tool) and before
any other resolution action is taken (the "RRD Loss Absorption Requirement").
For the purposes of the RRD Loss Absorption Requirement, the point of non-viability under the RRD and
the SRM Regulation is the point at which the relevant authority determines that the institution meets the
conditions for resolution or will no longer be viable (on a standalone or group basis) unless the relevant
capital instruments (including the Notes) are written down or converted to equity or extraordinary public
support is required by the institution. The determination that an institution is no longer viable may depend
on a number of factors which may be outside of that institution’s control. Furthermore, the determination
that all or part of the liquidation preference or principal amount of any relevant capital instruments (such
as the Notes) will be subject to loss absorption is likely to be inherently unpredictable and may depend on
a number of factors which may also be outside of the institution's control. This determination will be
made by the institution's regulators and there may be many factors, including factors not directly related
to the institution, which could result in such a determination.
The provisions relating to the cooperation between the SRB and the national resolution authorities for the
preparation of the banks' resolution plans have applied since 1 January 2015 and the SRM should be fully
operational from 1 January 2016. See "Steps taken towards achieving an EU fiscal and banking union"
above.
On the basis of the RRD, Member States were required to implement the RRD Loss Absorption
Requirement on or before 1 January 2015 but implement the bail-in tool not later than 1 January 2016.
Spain has partially implemented RRD through Law 11/2015, but certain regulatory developments are still
required. A draft developing regulation of Law 11/2015 (Proyecto de Real Decreto por el que se
desarrolla la Ley de recuperación y resolución de entidades de crédito y empresas de servicios de
inversión) was published on 21 May 2015.
Although Law 11/2015 has repealed Law 9/2012, of 14 November, on credit institution restructuring and
resolution ("Law 9/2012"), which contained the former framework of the restructuring and resolution
process in Spain, the bail-in provisions of Law 9/2012 contained in its Chapter VII will transitorily
remain in force until 31 December 2015 and the bail-in tool under Law 11/2015 will not become into
- 21-
force until 1 January 2016. The restructuring and resolution procedures comprising the Law 9/2012 bailin tool involve the application of loss absorption measures which may include, among others: (i) the
deferment, suspension, elimination or amendment of certain rights, obligations, terms and conditions of
any Notes, (ii) the repurchase of any Notes at a price set by the Bank of Spain or the FROB, (iii) the
exchange of any Notes for capital instruments of the Issuer, (iv) the write down of any interest and/or
principal amount of the Notes, and (v) the redemption of any Notes.
The obligations of the Issuer under the Notes may, therefore, be subject to the write down and conversion
powers under Law 11/2015 and, from 1 January 2016, to the bail-in tool uder such law as well.
Transitorily, until 31 December 2015, the Notes may be subject to the bail-in provisions contained in
Chapter VII of Law 9/2012. In both scenarios, this may result in holders of the Notes losing some or all of
their investment. The exercise of any such power or any suggestion of such exercise could, therefore,
materially adversely affect the value of the Notes.
There can be no assurance that the implementation of the RRD, through Law 11/2015 and its developing
regulations and any actions that may be taken pursuant to the RRD once fully implemented, or
Law 9/2012 would not adversely affect the price or value of a Holder's investment in the Notes and/or the
ability of the Bank to satisfy its obligations under the Notes.
The Notes may not be redeemed prior to maturity at the option of Noteholders, including in the event of
non-payment of principal or interest
Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26th June, 2013 (CRR)
provides that the provisions governing the Notes should not give the Noteholders the right to accelerate
the future scheduled payment of interest or principal, other than in the insolvency or liquidation of the
Issuer. This is reflected in the Terms and Conditions of the Notes.
The obligations of the Issuer with respect to the Notes will be subordinated and unsecured and will rank
junior to all unsubordinated obligations of the Issuer in the event of insolvency of the Issuer. After
payment in full of unsubordinated claims, the Issuer will pay subordinated claims in the order and as
further described in Condition 3 (Status of the Notes) of the Terms and Conditions of the Notes. See "An
investor in the Notes assumes an enhanced risk of loss in the event of the Issuer's insolvency".
The Notes may be redeemed at the Issuer's option or for tax reasons or upon the occurrence of a
Capital Event
Subject as provided in the Conditions, in particular to the approval of the Regulator and the other
conditions as described in Conditions 6.3 (Redemption for tax reasons) and 6.4 (Redemption at the option
of the Issuer (Capital Event)), the Issuer may, at its option, redeem all, but not some only, of the Notes at
any time at their Outstanding Principal Amount plus accrued and unpaid interest, upon the occurrence of
a Capital Event or for tax reasons. In addition, the Issuer may at its option (subject to prior approval of the
Regulator), redeem all, but not some only, of the Notes at their Outstanding Principal Amount plus
accrued and unpaid interest on the Call Date.
The early redemption feature may limit the market value of the Notes and during any period in which the
early redemption features are applicable to the Notes (or are perceived to be applicable), the market value
of the Notes will probably not rise significantly above the Outstanding Principal Amount. In addition,
Noteholders will not receive a make-whole amount or any other compensation in case of early redemption
of the Notes.
If the Issuer redeems the Notes in any of the circumstances mentioned above, there is a risk that the Notes
may be redeemed at times when the redemption proceeds are less than the current market value of the
Notes or when prevailing interest rates may be relatively low. In such circumstances an investor may not
be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as
that of the Notes.
Risk relating to the change in the rate of interest
If the Notes are not redeemed by the Issuer on the Reset Date, the rate of interest will be reset as from
such date. The Reference Rate for the Reset Period will be determined two Business Days before the
relevant Reset Date and as such is not pre-defined at the Closing Date. The Reference Rate may be
- 22-
different from, including lower than, the initial interest rate and may adversely affect the yield of the
Notes.
The terms of the Notes contain very limited covenants
There is no negative pledge in respect of the Notes. In addition, the Notes do not require the Issuer to
comply with financial ratios or otherwise limit its ability or that of its subsidiaries to incur additional debt,
nor do they limit the Issuer's ability to use cash to make investments or acquisitions, or the ability of the
Issuer or its subsidiaries to pay dividends, repurchase shares or otherwise distribute cash to shareholders.
Such actions could potentially affect the Issuer's ability to service its debt obligations, including those of
the Notes.
There is no active trading market for the Notes
The Notes are new securities which may not be widely distributed and for which there is currently no
active trading market. If the Notes are traded after their initial issuance, they may trade at a discount to
their initial offering price, depending upon prevailing interest rates, the market for similar securities,
general economic conditions and the financial condition of the Issuer. Although application has been
made for the Notes to be admitted to listing on AIAF, there is no assurance that such application will be
accepted or that an active trading market will develop. Accordingly, there is no assurance as to the
development or liquidity of any trading market for the Notes.
The trading market for debt securities may be volatile and may be adversely impacted by many events
The market for debt securities issued by banks is influenced by economic and market conditions and, to
varying degrees, interest rates, currency exchange rates and inflation rates in other Western and other
industrialized countries. There can be no assurance that events in Spain, Europe or elsewhere will not
cause market volatility or that such volatility will not adversely affect the price of the Notes or that
economic and market conditions will not have any other adverse effect.
Syndicate of Noteholders' meetings
The Conditions include certain provisions regarding Holders' meetings, which may be held in order to
resolve matters relating to the Noteholders' interests. The Syndicate of Noteholders has authority to
modify (in agreement with the Issuer) the Terms and Conditions of the Notes as provided in Condition 10
(Syndicate of Noteholders, Modification and Waiver) and article 6 of the Regulations (as defined in the
Conditions). Such provisions allow for designated majorities to bind all Noteholders, including
Noteholders who have not participated in or voted at the actual meeting or who have not voted in
accordance with the required majority, to decisions that have been taken at a duly convened and
conducted Noteholders' meeting.
Clearing and settlement
The Notes will be registered with Iberclear. Consequently, no physical Notes will be issued. Clearing and
settlement relating to the Notes, as well as payment of distributions and redemption or adjustment of
principal amounts, will be performed within Iberclear's account-based system. Noteholders (as defined in
"Terms and Conditions of the Notes") are therefore dependent on the functionality of Iberclear's accountbased system.
Title to the Notes will be evidenced by book entries, and each person shown in the Spanish Central
Registry managed by Iberclear and in the registries maintained by the Iberclear Members as being a
holder of the Notes shall be (except as otherwise required by Spanish law) considered the Noteholder of
the principal amount of the Notes recorded therein.
The Issuer will discharge its payment obligation under the Conditions by making payments through
Iberclear. Noteholders must rely on the procedures of Iberclear and its participants to receive payments.
The Issuer has no responsibility or liability for the records relating to, or payments made in respect of,
Noteholders of the Notes according to book entries and registries as described in the previous paragraph.
A summary of clearance and settlement procedures applicable to book-entry Notes in Spain is contained
under "Summary of clearance and settlement procedures applicable to book-entry Notes".
- 23-
Credit Rating
The Notes have been rated "B2" by Moody's, "B" by S&P and "BB" by Fitch. A security 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. Any adverse change in an applicable credit rating could
adversely affect the trading price for the Notes.
Risks relating to the Spanish withholding tax regime
Article 44 of Royal Decree 1065/2007, of 27 July 2007, as amended by Royal Decree 1145/2011, of 29
July 2011 ("Royal Decree 1065/2007"), sets out the reporting obligations applicable to preference shares
and debt instruments issued under Law 10/2014 of 26 June ("Law 10/2014"). The procedures apply to
interest deriving from preferred securities (participaciones preferentes) and debt instruments to which
Law 10/2014 refers, including debt instruments issued at a discount for a period equal to or less than
twelve months.
According to the plain wording of section 4 of article 44 of Royal Decree 1065/2007, of 27 July, income
derived from securities originally registered with Iberclear will be paid by the Issuer net of Spanish
withholding tax (currently, at a rate of 19.5%) if the recipient of the payment is an individual resident in
Spain for tax purposes and subject to Spanish Individual Income Tax ("IIT"). The Issuer will not pay any
additional amounts in respect of any such withholding tax.
On the other hand, interest payments made by the Issuer in respect of the Notes for the benefit of nonSpanish tax resident investors, or for the benefit of Spanish Corporate Income Tax taxpayers, will not be
subject to Spanish withholding tax, provided that the Iberclear Members that have the Notes registered in
their securities account on behalf of third parties, as well as the entities that manage the clearing systems
located outside Spain that have an agreement with Iberclear, if applicable, provide the Issuer, in a timely
manner, with a duly executed and completed statement (a "Payment Statement"), in accordance with
section 4 of article 44 of Royal Decree 1065/2007, with the following information:
(a)
Identification of the Notes.
(b)
Date of payment.
(c)
Total amount of the income paid by the Issuer.
(d)
Amount of the income corresponding to individuals residents in Spain that are IIT taxpayers.
(e)
Amount of the income that must be paid on a gross basis.
If the Iberclear Members fail or for any reason are unable to deliver a duly executed and completed
Payment Statement to the Issuer in a timely manner in respect of a payment of income made by the Issuer
under the Notes, such payment will be made net of Spanish withholding tax, currently at the rate of 19.5%
Should this occur, affected beneficial owners would receive a refund of the amount withheld, with no
need for action on their part, if the Iberclear Members submit a duly executed and completed Payment
Statement to the Issuer no later than the 10th calendar day of the month immediately following the
relevant payment date. In addition, beneficial owners may apply directly to the Spanish tax authorities for
any refund to which they may be entitled, according to the procedures set forth in the Spanish NonResident Income Tax Law.
Prospective investors should note that the Issuer does not accept any responsibility relating to the lack of
delivery of a duly executed and completed Payment Statement by Iberclear Members in connection with
each payment of income under the Notes. Accordingly, the Issuer will not be liable for any damage or
loss suffered by any beneficial owner who would otherwise be entitled to an exemption from Spanish
withholding tax but whose income payments are nonetheless paid net of Spanish withholding tax because
the Payment Statement was not duly delivered to the Issuer. Moreover, the Issuer will not pay any
additional amounts with respect to any such withholding tax.
Holders must seek their own advice to ensure that they comply with all procedures to ensure the correct
tax treatment of their Notes. The Issuer does not assume any responsibility in this regard.
- 24-
U.S. Foreign Account Tax Compliance Withholding
Pursuant to the foreign account tax compliance provisions of the Hiring Incentives to Restore
Employment Act of 2010 ("FATCA"), non-U.S. financial institutions that enter into agreements with the
IRS ("IRS Agreements") or become subject to provisions of local law intended to implement an
intergovernmental agreement ("IGA legislation") entered into pursuant to FATCA, may be required to
withhold at a rate of 30% on all, or a portion of, payments made in respect of any Notes. In order (a) to
obtain an exemption from FATCA withholding on payments it receives and/or (b) to comply with any
applicable laws in its jurisdiction, a financial institution that enters into an IRS Agreement or is subject to
IGA legislation may be required to (i) report certain information on its U.S. account holders to the
government of the United States or another relevant jurisdiction and (ii) withhold 30% from all, or a
portion of, certain payments made to persons that fail to provide the financial institution information and
forms or other documentation that may be necessary for such financial institution to determine whether
such person is compliant with FATCA or otherwise exempt from FATCA withholding.
Under FATCA, withholding generally is required with respect to payments to persons that are not
compliant with FATCA or that do not provide the necessary information or documentation made on or
after (i) 1 July 2014 in respect of certain US source payments, (ii) 1 January 2017, in respect of payments
of gross proceeds (including principal repayments) on certain assets that produce US source interest or
dividends and (iii) 1 January 2017 (at the earliest) in respect of "foreign passthru payments". On 14
May 2013, the United States and Spain have entered into an intergovernmental agreement in order to
facilitate the implementation of FATCA (the "U.S.-Spain IGA"). Pursuant to the U.S.-Spain IGA which
was published in the Spanish Official Gazzette on 1 July 2014, no withholding is generally required by
financial institutions resident in Spain, however, the U.S.-Spain IGA leaves open the possibility that a
financial institution resident in Spain may be required to withhold on foreign passthru payments.
Whilst the Notes are cleared through Iberclear, in all but the most remote circumstances, it is not expected
that FATCA will affect the amount of any payments made under, or in respect of, the Notes by the Issuer
and any paying agent (see "Taxation" - FATCA). However, FATCA may affect payments made to
custodians or intermediaries in the subsequent payment chain leading to the ultimate investor if any such
custodian or intermediary generally is unable to receive payments free of FATCA withholding, or if any
ultimate investor that is a financial institution that is not entitled to receive payments free of withholding
under FATCA, or an ultimate investor that fails to provide its broker (or other custodian or intermediary
from which it receives payment) with any information, forms, other documentation or consents that may
be necessary for the payments to be made free of FATCA withholding.
Investors should choose the custodians or intermediaries with care to ensure that each is compliant with
FATCA or other laws or agreements relating to FATCA and provide each such custodian or intermediary
with any information, forms, other documentation or consents that may be necessary for such custodian or
intermediary to make a payment free of FATCA withholding. Investors should consult their own tax
advisor to obtain a more detailed explanation of FATCA and how FATCA may affect them.
If an amount in respect of FATCA were to be deducted or withheld from interest, principal or other
payments on or with respect to the Notes, the Issuer would have no obligation to pay additional amounts
or otherwise indemnify a holder for any such withholding or deduction by the Issuer or any other party as
a result of the deduction or withholding of such amount. As a result, investors may receive less interest or
principal than expected.
FATCA is particularly complex and its application to the Issuer, the Notes and the holders is subject to
change. Investors should consult its own tax adviser to obtain a more detailed explanation of FATCA and
to learn how FATCA may affect each holder in its particular circumstance.
The Issuer's obligations under the securities are discharged by making payments through Iberclear and the
Issuer has therefore no responsibility for any amount thereafter transmitted through Iberclear and
custodians or intermediaries.
European Union Savings Tax Directive
Under Council Directive 2003/48/EC on the taxation of savings income in the form of interest payments
(the "Directive"), each Member State of the European Union is required to provide to the tax or other
relevant authorities of another Member State details of payments of interest or other similar income made
- 25-
by a person within its jurisdiction to, or collected by such a person for, an individual or certain other types
of person resident in that other Member State; however, for a transitional period, Austria has instead
opted to apply a withholding system in relation to such payments, deducting tax at the rate of 35%, unless
during that period they elect otherwise. The transitional period is to terminate following agreement by
certain non-EU countries to the exchange of information relating to such payments.
A number of non-EU countries, and certain dependent or associated territories of certain Member States,
have agreed to adopt similar measures (either provision of information or transitional withholding) in
relation to payments made by a person within its jurisdiction to, or collected by such a person for, an
individual resident in a Member State. In addition, the Member States have entered into reciprocal
provisions of information arrangements or transitional withholding arrangements with certain of those
dependent or associated territories in relation to payments made by a person in a Member State to, or
collected by such a person for, an individual resident in one of those territories.
The European Council formally adopted a Council Directive amending the Directive on 24 March 2014
(the "Amending Directive"). The Amending Directive broadens the scope of the requirements described
above. Member States have until 1 January 2016 to adopt the national legislation necessary to comply
with the Amending Directive. The changes made under the Amending Directive include extending the
scope of the Directive to payments made to, or collected for, certain other entities and legal arrangements.
They also broaden the definition of "interest payment" to cover income that is equivalent to interest.
The Issuer may be required to maintain a paying agent in an EU Member Sate that would not be obliged
to withhold or deduct tax pursuant to the relevant national legislation implementing, or introduced in
order to conform to, the Directive.
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TERMS AND CONDITIONS OF THE NOTES
The issue of the Euro 500,000,000 Fixed Rate Reset Subordinated Notes due 28 July 2025 (the "Notes",
which expression shall, unless otherwise indicated, include any further notes issued pursuant to
Condition 12 ("Further Issues") and consolidated and forming a single series with the Notes) was (save
in respect of any such further notes to be issued pursuant to Condition 12 ("Further Issues")) authorised
by resolutions of the general shareholders' meeting and the board of directors of Ibercaja Banco S.A. (the
"Issuer" or "Ibercaja Banco"), passed on 10 March 2015. The Issuer will act as paying agent in relation
to the Notes (in such capacity, the "Agent").
The Notes have the benefit of a deed of covenant dated 28 July 2015 (the "Deed of Covenant"). In the
Deed of Covenant, the Issuer has covenanted in favour of each Noteholder (as defined below) that it will
duly perform and comply with the obligations expressed to be undertaken by it in these Conditions.
Copies of the Deed of Covenant are available for inspection during normal business hours at the specified
office of the Agent. A certified copy of the Deed of Covenant may be obtained by any Noteholder from
the Commissioner (as defined below) at its specified office at the expense of such Noteholder.
1.
DEFINITIONS
In these Conditions (except where otherwise defined):
"5-year Mid-Swap Rate" means:
(a)
the rate for euro swaps with a term of five years which appears on the Screen Page as
of 11:00 a.m. (Brussels time) on the Reference Rate Determination Date; or
(b)
if the 5-year Mid-Swap Rate does not appear on the Screen Page at such time on the
Reference Rate Determination Date, the Reset Reference Bank Rate on the Reference
Rate Determination Date;
"5-year Mid-Swap Rate Quotations" means the arithmetic mean of the bid and offered rates for
the annual fixed leg (calculated on a 30/360 day count basis) of a fixed-for-floating euro interest
rate swap transaction which:
(a)
has a term of five years commencing on the Reset Date;
(b)
is in an amount that is representative of a single transaction in the relevant market at the
relevant time with an acknowledged dealer of good credit in the swap market; and
(c)
has a floating leg based on 6-month EURIBOR (calculated on an Actual/360 day count
basis);
"Applicable Capital Adequacy Regulations" means at any time the laws, regulations,
requirements, guidelines and policies relating to capital adequacy then in effect in Spain
including, without limitation to the generality of the foregoing, those regulations, requirements,
guidelines and policies relating to capital adequacy then in effect of the Regulator (whether or
not such requirements, guidelines or policies have the force of law);
"Business Day" means a day (other than a Saturday or Sunday) which is both a day on which
banks and foreign exchange markets are open for business in the place of the specified office of
the Agent and a TARGET Settlement Day;
"Capital Event" means the determination by the Issuer after consultation with the Regulator that
the Outstanding Principal Amount of the Notes is not eligible for inclusion in whole or, to the
extent not prohibited by the Applicable Capital Adequacy Regulations, in part in the Tier 2
Capital of the Group pursuant to Applicable Capital Adequacy Regulations (other than as a result
of any applicable limitation on the amount of such capital as applicable to the Issuer);
"CRD IV" means any or any combination of the CRD IV Directive, the CRR, and any CRD IV
Implementing Measures, where:
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(a)
"CRD IV Directive" means Directive 2013/36/EU of the European Parliament and of
the Council of 26 June 2013;
(b)
"CRD IV Implementing Measures" means any regulatory capital rules implementing
the CRD IV Directive or the CRR which may from time to time be introduced,
including, but not limited to, delegated or implementing acts (regulatory technical
standards) adopted by the European Commission, national laws and regulations, and
regulations and guidelines issued by the Regulator, the European Banking Authority or
any other relevant authority, which are applicable to the Issuer (on a stand alone basis)
or the Group (on a consolidated basis) and which prescribe the requirements to be
fulfilled by financial instruments for inclusion in the regulatory capital of the Issuer (on
a stand alone or consolidated basis); and
(c)
"CRR" means Regulation (EU) No 575/2013 of the European Parliament and of the
Council of 26 June 2013;
"Closing Date" means 28 July 2015;
"Commissioner" means the comisario as this term is defined under the Spanish Corporations
Law (Ley de Sociedades de Capital) of the Syndicate of Noteholders;
"Day Count Fraction" means, in respect of the calculation of an amount for any period of time
(the "Calculation Period"):
(a)
where the Calculation Period is equal to or shorter than the Regular Period during
which it falls, the actual number of days in such Calculation Period divided by the
actual number of days in such Regular Period; and
(b)
where the Calculation Period is longer than one Regular Period, the sum of:
(A)
the actual number of days in such Calculation Period falling in the Regular
Period in which it begins divided by the actual number of days in such Regular
Period; and
(B)
the actual number of days in such Calculation Period falling in the next
Regular Period divided by the actual number of days in such Regular Period;
"€" means euro;
"First Interest Payment Date" has the meaning given to such term in Condition 4.1 ("Interest
and Other Calculations – Interest Rate");
"Group" means the Issuer and its Subsidiaries;
"Initial Period" means the period from (and including) the Closing Date to (but excluding) the
Reset Date;
"Initial Rate of Interest" means 5.000 per cent. per annum;
"Insolvency Law" means Law 22/2003, of 9 July, on Insolvency (Ley Concursal), as amended
and restated;
"Interest Payment Date" means 28 July in each year from (and including) the First Interest
Payment Date;
"Interest Period" means the period beginning on (and including) the Closing Date and ending
on (but excluding) the First Interest Payment and each subsequent period beginning on (and
including) an Interest Payment Date and ending on (but excluding) the next Interest Payment
Date or the Maturity Date, as the case may be;
"Margin" means 4.551 per cent. per annum;
"Maturity Date" means 28 July 2025;
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"Noteholder" has the meaning given in Condition 2.3 ("Title and transfer");
"Original Outstanding Principal Amount" means, in respect of each Note, the principal
amount of such Note as issued on the Closing Date, being €100,000;
"outstanding" means in relation to the Notes all the Notes issued other than:
(a)
those Notes which have been redeemed pursuant to Condition 6 ("Redemption and
Purchase");
(b)
those Notes in respect of which the date for redemption in accordance with the
Conditions has occurred and the redemption moneys (including all interest payable
thereon) have been duly paid (and, where appropriate, notice to that effect has been
given to the Noteholders under Condition 11 ("Notices")) and remain available for
payment of the relevant Notes;
(c)
those Notes which have been purchased pursuant to Condition 6 ("Redemption and
Purchase");
and
(d)
those Notes in respect of which claims have become prescribed under Condition 8
("Prescription"),
provided that for the purposes of attending and voting at any meeting of the Syndicate of
Noteholders, those Notes (if any) which are for the time being held by any person (including but
not limited to, the Issuer or any of its Subsidiaries) for the benefit of the Issuer or any of its
Subsidiaries shall (unless and until ceasing to be so held) be deemed not to remain outstanding;
"Outstanding Principal Amount" means, in respect of a Note, its Original Outstanding
Principal Amount, as adjusted from time to time for any reduction or reinstatement of the
principal amount as required by Applicable Capital Adequacy Regulations and "Outstanding
Principal Amounts" means the sum of the Outstanding Principal Amount of each Note;
"Person" means any individual, company, corporation, firm, partnership, joint venture,
association, organisation, state or agency of a state or other entity, whether or not having
separate legal personality;
"Rate of Interest" means:
(a)
in the case of each Interest Period ending on or before the Reset Date, the Initial Rate of
Interest; or
(b)
in the case of each Interest Period thereafter, the sum of (i) the Reference Rate in
respect of the Reset Period and (ii) the Margin,
all as determined by the Agent (in conjunction with the Issuer, where applicable) in accordance
with Condition 4 ("Interest and Other Calculations");
"Reference Rate" means, in relation to the Reset Period, the 5-year Mid-Swap Rate determined
for the Reset Period by the Agent in accordance with 4 ("Interest and Other Calculations");
"Reference Rate Determination Date" means the day falling two TARGET Settlement Days
prior to the Reset Date;
"Regular Period" means each period from and including a Regular Date falling in any year to
but excluding the next Regular Date, where "Regular Date" means 28 July in each year;
"Regulator" means the European Central Bank or such other or successor authority exercising
primary bank supervisory authority, or any other entity or institution carrying out such duties on
its/their behalf (including the Bank of Spain), in each case with respect to prudential matters in
relation to the Issuer and/or the Group;
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"Relevant Jurisdiction" means Spain or any political subdivision or any authority thereof or
therein having power to tax;
"Reset Date" means 28 July 2020;
"Reset Interest Amount" has the meaning given to such term in Condition 4.5 ("Interest and
Other Calculations - Determination of Reference Rate in relation to Reset Period");
"Reset Period" means the period from (and including) the Reset Date and ending on (but
excluding) the Maturity Date.
"Reset Reference Bank Rate" means the percentage rate determined on the basis of the 5-year
Mid-Swap Rate Quotations provided by the Reset Reference Banks to the Agent at
approximately 11:00 a.m. (Brussels time) on the Reference Rate Determination Date. If at least
three quotations are provided, the Reset Reference Bank Rate will be the arithmetic mean of the
quotations provided, eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the lowest). If only two
quotations are provided, the Reset Reference Bank Rate will be the arithmetic mean of the
quotations provided. If only one quotation is provided, the Reset Reference Bank Rate will be
the quotation provided. If no quotations are provided, the Reset Reference Bank Rate will
be 0.449 per cent. per annum;
"Reset Reference Banks" means five leading swap dealers in the euro interbank market selected
by the Agent in its discretion after consultation with the Issuer;
"RRD" means Directive 2014/59/EU establishing a framework for the recovery and resolution of
credit institutions and investment firms or such other resolution or recovery rules which may
from time to time be applicable to the Issuer;
"Screen Page" means Reuters Screen "ISDAFIX2" or such other page as may replace it on
Reuters or, as the case may be, on such other information service that may replace Reuters, in
each case, as may be nominated by the person providing or sponsoring the information appearing
there for the purpose of displaying rates comparable to the 5-year Mid-Swap Rate;
"Spanish Corporations Law" means the Royal Decree Legislative 1/2010, of 2 July, approving
the consolidated text of the Spanish Corporations Law (Ley de Sociedades de Capital), as
amended and restated;
"Subsidiary" means, in relation to an entity, any entity controlled by that first person entity
where control is determined in accordance with section 3 of the Third Regulation of
Circular 4/2004, of 22 December, of the Bank of Spain (Norma Tercera apartado tercero de la
Circular 4/2004, de 22 de diciembre, del Banco de España), whether any such entity is a
financial institution or not;
"Statutory Loss Absorption Regime" means any statutory regime implemented or directly
effective in Spain which provides any administrative agency or governmental authority
(including, without limitation, the Fondo de Reestructuración Ordenada Bancaria ("FROB"), or
any successor authority) with the powers to implement any loss absorption measures in respect
of capital instruments (such as the Notes), including, but not limited to, Law 9/2012 of 14
November, on restructuring and resolution of credit entities ("Law 9/2012") and Law 11/2015,
of 18 June, on recovery and resolution of credit institutions and investment firms
("Law 11/2015");
"Syndicate of Noteholders" means the sindicato as this term is described under the Spanish
Corporations law (Ley de Sociedades de Capital);
"TARGET Settlement Day" means any day on which the TARGET System is open for the
settlement of payments in euro;
"TARGET System" means the Trans-European Automated Real-Time Gross Settlement
Express Transfer (known as TARGET2) System which was launched on 19 November 2007 or
any successor thereto; and
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"Tier 2 Capital" means capital which is treated from time to time by the Regulator as a
constituent of tier 2 capital under Applicable Capital Adequacy Regulations.
2.
FORM, DENOMINATION AND TITLE
2.1
Form and denomination
The Notes have been issued in uncertificated, dematerialised book-entry form (anotaciones en
cuenta) in euro in an aggregate nominal amount of €500,000,000. The denomination of each
Note is equal to its Original Outstanding Principal Amount.
2.2
Registration, clearing and settlement
The Notes have been registered with the Spanish Sociedad de Gestión de los Sistemas de
Registro, Compensación y Liquidación de Valores, S.A. Unipersonal ("Iberclear") as managing
entity of the central registry of the Spanish clearance and settlement system (the "Spanish
Central Registry").
Holders of a beneficial interest in the Notes who do not have, directly or indirectly through their
custodians, a participating account with Iberclear may participate in the Notes through bridge
accounts maintained by each of Euroclear and Clearstream, Luxembourg with Iberclear.
Iberclear manages the settlement and clearing of the Notes, notwithstanding the Issuer's
commitment to assist, when appropriate, on the clearing and settlement of the Notes through
Euroclear and Clearstream Luxembourg.
The Spanish National Numbering Agency (Agencia Nacional de Codificación de Valores
Mobiliarios) has assigned the following ISIN to identify the Notes: ES0244251007. The
Common Code for the Notes is 126761856.
2.3
Title and transfer
Title to the Notes is evidenced by book entries, and each person shown in the Spanish Central
Registry managed by Iberclear and in the registries maintained by the respective participating
entities (entidades participantes) in Iberclear (the "Iberclear Members") as being a holder of
the Notes shall be (except as otherwise required by Spanish law) considered the holder of the
principal amount of the Notes recorded therein. In these Conditions, "Noteholder" means the
person in whose name such Note is for the time being registered in the Spanish Central Registry
managed by Iberclear or, as the case may be, the relevant Iberclear Member accounting book and
Noteholder shall be construed accordingly.
One or more certificates (each a "Certificate") attesting to the relevant Noteholder's holding of
Notes in the relevant registry will be delivered by the relevant Iberclear Member or, where the
Noteholder is itself an Iberclear Member, by Iberclear (in each case, in accordance with the
requirements of Spanish law and the relevant Iberclear Member's or, as the case may be,
Iberclear's procedures) to such Noteholder upon such Noteholder's request.
The Notes are issued without any restrictions on their transferability. Consequently, the Notes
may be transferred and title to the Notes may pass (subject to Spanish law and to compliance
with all applicable rules, restrictions and requirements of Iberclear or, as the case may be, the
relevant Iberclear Member) upon registration in the relevant registry of each Iberclear Member
and/or Iberclear itself, as applicable. Each Noteholder will be (except as otherwise required by
Spanish law) treated as the legitimate owner (titular legítimo) of the relevant Notes for all
purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any
interest, or any writing on, or the theft or loss of, the Certificate issued in respect of it), and no
person will be liable for so treating the Noteholder.
3.
STATUS OF THE NOTES
(a)
The payment obligations of the Issuer under the Notes whether on account of principal, interest
or otherwise, constitute direct, unconditional and subordinated obligations of the Issuer. Upon
the insolvency of the Issuer, the Notes will (unless they qualify as subordinated claims pursuant
to Articles 92.3º to 92.7º of the Insolvency Law or equivalent legal provisions which replace
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them in the future, and subject to any applicable legal and statutory exceptions) rank pari passu
without preference or priority among themselves and:
(i)
pari passu with all other contractually subordinated obligations of the Issuer (other than
(i) those subordinated obligations which qualify as subordinated claims pursuant to
Articles 92.3 to 92.7 of the Insolvency Law or equivalent legal provisions which replace
them in the future; (ii) other subordinated obligations which by law or by their terms rank
junior to the Notes; and (iii) any Senior Subordinated Obligations (as defined below)); and
(ii) junior to any non-subordinated obligations of the Issuer, any Senior Subordinated
Obligations (as defined below) and any claim of the Issuer, which results subordinated as a
consequence of article 92.1º of the Insolvency Law.
For the purposes of this Condition 3, "Senior Subordinated Obligations" means any
subordinated obligations of the Issuer which by law or by their terms, and to the extent permitted
by Spanish law, rank senior to the Notes and/or to any other subordinated obligations of the
Issuer ranking pari passu with the Notes.
(b)
The Notes are also subject to any Statutory Loss Absorption Regime applicable to subordinated
capital instruments of the Issuer.
4.
INTEREST AND OTHER CALCULATIONS
4.1
Interest Rate
Each Note bears interest on its Outstanding Principal Amount at the relevant Rate of Interest
from (and including) the Closing Date. Interest shall be payable annually in arrear on each
Interest Payment Date, subject in any case as provided in Condition 5 ("Payments"). The first
payment of interest will be made on 28 July 2016 (the "First Interest Payment Date").
4.2
Interest Accrual
Each Note will cease to bear interest from the due date for redemption unless payment of the
Outstanding Principal Amount in respect thereof is improperly withheld or refused, in which
case it will continue to bear interest in accordance with this Condition (as well after as before
judgment) until whichever is the earlier of:
4.3
(a)
the day on which all sums due in respect of such Note up to that day are received by or
on behalf of the relevant Noteholder; and
(b)
the day which is seven days after the Agent has notified the Noteholders in accordance
with Condition 11 ("Notices") that it has received all sums due in respect of the Notes
up to such seventh day (except to the extent that there is any subsequent default in
payment).
Interest to (but excluding) the Reset Date
Unless the Outstanding Principal Amount has been adjusted as described in the definition
thereof, the amount of interest per Note payable on each Interest Payment Date falling on or
before the Reset Date will be €5,000. If the Outstanding Principal Amount has been adjusted as
described in the definition thereof, Condition 4.7 ("Interest and Other Calculations - Calculation
of amount of interest per") will apply.
4.4
Interest from (and including) the Reset Date
The amount of interest payable per Note on each Interest Payment Date falling after the Reset
Date shall be calculated by applying the applicable Rate of Interest to the Outstanding Principal
Amount (rounding the resulting figure to the nearest half a cent (with half a cent being rounded
upwards)).
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4.5
Determination of Reference Rate in relation to Reset Period
The Agent will, as soon as practicable after 11:00 a.m. (Brussels time) on the Reference Rate
Determination Date, determine the Reference Rate for the Reset Period and calculate the amount
of interest payable per Note on each Interest Payment Date falling after the Reset Date (each a
"Reset Interest Amount").
4.6
Publication of Reference Rate and Reset Interest Amount
The Agent will cause the Reference Rate and the Reset Interest Amount determined by it,
together with the Interest Payment Dates falling after the Reset Date, to be notified to each
listing authority, stock exchange and/or quotation system (if any) by which the Notes have then
been admitted to listing, trading and/or quotation as soon as practicable after such determination.
Notice thereof shall also promptly be given to the Noteholders in accordance with Condition 11
(Notices).
4.7
Calculation of amount of interest per Note
Save as specified in Condition 4.3 ("Interest and Other Calculations - Interest to (but excluding)
the Reset Date"), the amount of interest payable in respect of any Note for any period shall be
calculated by:
4.8
(a)
applying the applicable Rate of Interest to the Outstanding Principal Amount;
(b)
multiplying the product thereof by the Day Count Fraction; and
(c)
rounding the resulting figure to the nearest cent (half a cent being rounded upwards).
Notifications etc
All notifications, opinions, determinations, certificates, calculations, quotations and decisions
given, expressed, made or obtained for the purposes of this Condition by the Agent will (in the
absence of manifest error) be binding on the Issuer and the Noteholders and (subject as
aforesaid) no liability to any such Person will attach to the Agent in connection with the exercise
or non-exercise by it of its powers, duties and discretions for such purposes.
5.
PAYMENTS
5.1
Method of payment
Payments of principal and interest in respect of the Notes will be made by transfer to the
registered account of the relevant Noteholder maintained by or on behalf of it with a bank that
processes payments in a city in which banks have access to the TARGET System, details of
which appear in the records of Iberclear or, as the case may be, the relevant Iberclear Member at
close of business on the day immediately preceding the date on which the payment of principal
or interest, as the case may be, falls due. Noteholders must rely on the procedures of Iberclear or,
as the case may be, the relevant Iberclear Member to receive payments under the relevant Notes.
The Issuer and the Agent will have no responsibility or liability for the records relating to
payments made in respect of the Notes.
5.2
Payments subject to fiscal laws
Without prejudice to the application of the provisions of Condition 7 ("Taxation"), payments will
be subject in all cases to any other applicable fiscal or other laws, regulations and directives in
the place of payment or other laws and regulations to which the Issuer and the Agent agree to be
subject and the Issuer will be liable for any taxes or duties of whatever nature imposed or levied
by such laws, regulations, directives or agreements. No commissions or expenses shall be
charged to the Noteholders in respect of such payments.
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5.3
Delay in payment
Noteholders will not be entitled to any interest or other payment for any delay after the due date
in receiving the amount due as a result of the due date not being a business day.
6.
REDEMPTION AND PURCHASE
6.1
Redemption at maturity
Unless previously redeemed or purchased and cancelled as specified below, each Note will be
redeemed by the Issuer at its Outstanding Principal Amount on the Maturity Date.
6.2
Redemption at the option of the Issuer (Issuer Call)
The Issuer may, subject to compliance with the Applicable Capital Adequacy Regulations then
in force and subject to the prior consent of the Regulator, if required, having given not less
than 30 nor more than 60 days' notice to the Noteholders in accordance with Condition 11
("Notices") (which notice shall be irrevocable), redeem all (but not some only) of the Notes then
outstanding on 28 July 2020 (the "Call Date") at their Outstanding Principal Amount together, if
appropriate, with interest accrued to (but excluding) the Call Date.
Article 78(1) of the CRR provides that the competent authorities shall grant permission for an
institution to reduce, repurchase, call or redeem tier 2 instruments provided that either of the
following conditions are met:
6.3
(a)
on or before such reduction, repurchase, call or redemption, the institution replaces the
instruments with own fund instruments of an equal or higher quality on terms that are
sustainable for the income capacity of the institution; or
(b)
the institution has demonstrated to the satisfaction of the competent authorities that the
own funds of the institution would, following such action, exceed the requirements laid
down in Article 92(1) of the CRR and the combined buffer requirement as defined in
point (6) of Article 128 of the CRD IV Directive by a margin that the Relevant
Regulator may consider necessary on the basis of Article 104(3) of the CRD IV
Directive.
Redemption for tax reasons
The Notes may be redeemed at the option of the Issuer in whole, but not in part, only if so
permitted by the Applicable Capital Adequacy Regulations then in force, and subject to the
previous consent of the Regulator, if required, at any time, on giving not less than 30 and not
more than 60 days' notice to the Agent and, in accordance with Condition 11 ("Notices"), the
Noteholders (which notice shall be irrevocable), if:
(a) on the occasion of the next payment due under the Notes, the Issuer has or will become
obliged to pay additional amounts as provided or referred to in Condition 7 ("Taxation") and
such obligation cannot be avoided by the Issuer taking reasonable measures available to it; or
(b) there is a change in the applicable tax treatment of the Notes,
in each case as a result of any change in, or amendment to, the laws or regulations of Spain (as
defined in Condition 7 ("Taxation")) or any change in the application or official interpretation of
such laws or regulations, which change or amendment becomes effective on or after the Closing
Date, provided that no such notice of redemption shall be given earlier than 90 days prior to the
earliest date on which the Issuer would be obliged to pay such additional amounts were a
payment in respect of the Notes then due.
Prior to the publication of any notice of redemption pursuant to this Condition 6.3 ("Redemption
and Purchase - Redemption for tax reasons"), the Issuer shall (i) deliver to the Agent to make
available at its specified office to the Noteholders a certificate signed by two officers of the
Issuer stating that the Issuer is entitled to effect such redemption and setting forth a statement of
facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred
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and (ii) use its best efforts to deliver to the Agent to make available at its specified office to the
Noteholders (A) an opinion of independent legal advisers of recognised standing to the effect
that the Issuer has or will become obliged to pay such additional amounts or regarding the
change in the applicable tax treatment of the Notes, as a result of such change or amendment and
(B) evidence of the Regulator's consent to redemption, if required.
Notes redeemed pursuant to this Condition 6.3 ("Redemption and Purchase - Redemption for tax
reasons") will be redeemed at their Outstanding Principal Amount together (if appropriate) with
interest accrued to (but excluding) the date of redemption.
Article 78(4) of the CRR provides that the competent authorities may permit institutions to
redeem tier 2 instruments before the fifth anniversary of the issue date if the conditions laid
down in paragraphs (a) or (b) of Article 78(1) of the CRR (as described under 6.2) are met and
there is a change in the applicable tax treatment of those instruments which the institution
demonstrates to the satisfaction of the competent authorities is material and was not reasonably
foreseeable at the time of their issuance.
6.4
Redemption at the option of the Issuer (Capital Event)
Upon the occurrence of a Capital Event, the Notes may be redeemed at the option of the Issuer in
whole, but not in part, subject to such redemption being permitted by the Applicable Capital
Adequacy Regulations then in force, and subject to the prior consent of the Regulator if required
pursuant to such regulations, at any time, on giving not less than 30 nor more than 60 days'
notice to the Agent and, in accordance with Condition 11 ("Notices"), the Noteholders (which
notice shall be irrevocable and shall specify the date fixed for redemption).
Notes redeemed pursuant to this Condition 6.4 ("Redemption and Purchase - Redemption at the
option of the Issuer (Capital Event)") will be redeemed at their Outstanding Principal Amount
together (if appropriate) with interest accrued to (but excluding) the date of redemption.
Article 78(4) of the CRR provides that the competent authorities may permit institutions to
redeem tier 2 instruments before the fifth anniversary of the issue date if the conditions laid
down in paragraphs (a) or (b) of Article 78(1) of the CRR (as described under 6.2) are met and
there is a change in the regulatory classification of the instruments that would be likely to result
in their exclusion from own funds or reclassification as a lower quality form of own funds, the
competent authorities consider such change to be sufficiently certain and the institution
demonstrates to the satisfaction of the competent authorities that the regulatory reclassification
of those instruments was not reasonably foreseeable at the time of their issuance.
6.5
Purchases
The Issuer or any Subsidiary of the Issuer may at any time purchase Notes at any price in the
open market or otherwise in compliance with the Applicable Capital Adequacy Regulations in
force at the time of such a purchase and subject to the prior consent of the Regulator, if required.
In accordance with the Applicable Capital Adequacy Regulations, the Issuer or any agent on its
behalf shall have the right at all times to purchase the Notes for market making purposes
provided that: (a) the prior written approval of the Relevant Regulator shall be obtained; and (b)
the total principal amount of the Notes so purchased does not exceed the lower of (x) 10% of the
initial aggregate principal amount of the Notes and such any further notes issued under
Condition 12 ("Further Issues"), or (y) 3% of the Tier 2 Capital of the Issuer from time to time
outstanding calculated in accordance with the Applicable Capital Adequacy Regulations.
All Notes which are purchased by the Issuer pursuant to the first paragraph of this Condition 6.5
("Redemption and Purchase – Purchases") will forthwith be cancelled and therefore cannot be
reissued or resold.
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7.
TAXATION
7.1
Payment without Withholding
All payments of principal and interest in respect of the Notes by or on behalf of the Issuer shall
be made without withholding or deduction for or on account of any present or future taxes or
duties, assessments or governmental charges of whatever nature ("Taxes") imposed or levied by
or on behalf of any Relevant Jurisdiction unless such withholding or deduction of the Taxes is
required by law. In such event, the Issuer will pay such additional amounts as may be necessary
in order that the net amounts received by the Noteholders after such withholding or deduction
shall equal the respective amounts which would have been receivable in respect of the Notes in
the absence of such withholding or deduction; except that no such additional amounts shall be
payable with respect to any Note:
(a)
the holder of which is liable for Taxes in respect of such Note by reason of having some
connection with a Relevant Jurisdiction other than the mere holding of such Note; or
(b)
where such withholding or deduction is imposed on a payment to an individual and is
required to be made pursuant to Council Directive 2003/48/EC on the taxation of
savings income or any law implementing or complying with, or introduced in order to
conform to, such Directive; or
(c)
to, or to a third party on behalf of, a holder in respect of whom the Issuer has not
received such information as may be necessary to allow payments on such Notes to be
made free and clear of withholding tax or deduction on account of any taxes imposed
by Spain, including when the Issuer does not receive such information concerning such
Holder's identity and tax residence as may be required in order to comply with the
procedures that may be implemented to comply with any interpretation of Royal
Decree 1065/2007 eventually made by the Spanish Tax Authorities; or
(d)
where such withholding or deduction is required pursuant to an agreement described in
Section 1471(b) of the U.S. Internal Revenue Code of 1986, as amended (the "Code")
or otherwise imposed pursuant to Sections 1471 through 1474 of the Code (including
any regulations or official interpretations issued, agreements (including, without
limitation, intergovernmental agreements) entered into or non-U.S. laws enacted with
respect thereto); or
(e)
any combination of items (a) through (d) above.
See "Taxation" for a fuller description of certain tax considerations relating to the Notes.
7.2
Additional Amounts
Any reference in these Conditions to any amounts in respect of the Notes shall be deemed also to
refer to any additional amounts which may be payable under this Condition 7.2 ("Taxation Additional Amounts").
8.
PRESCRIPTION
Claims for payment in respect of principal and interest shall be prescribed and become void
unless made within 10 (ten) years (in the case of principal) or 5 (five) years (in the case of
interest) from the appropriate Relevant Date in respect of such payment and thereafter any
principal interest or other sums payable in respect of such Notes shall be forfeited and revert to
the Issuer.
9.
EVENTS OF DEFAULT
If any order is made by any competent court or resolution passed for the winding up or
dissolution of the Issuer (other than for the purpose of an amalgamation, merger or
reconstruction approved by the Syndicate of Noteholders) (an "Event of Default") then, (i) the
Commissioner, acting upon a resolution of the Syndicate of Noteholders, in respect of all Notes
or (ii) unless there has been a resolution to the contrary by the Syndicate of Noteholders (which
- 36-
resolution shall be binding on all Noteholders), any Noteholder in respect of the Notes held by
such Noteholder, nay declare such Notes immediately due and payable whereupon the relevant
Notes shall, when permitted by applicable Spanish law, become immediately due and payable at
their Outstanding Principal Amount, together with accrued interest, without further formality.
10.
SYNDICATE OF NOTEHOLDERS, MODIFICATION AND WAIVER
10.1
Syndicate of Noteholders
Noteholders shall meet in accordance with the regulations governing the Syndicate of
Noteholders (the "Regulations"). The Regulations contain the rules governing the Syndicate of
Noteholders and the rules governing its relationship with the Issuer. See "Regulations of the
Syndicate of Noteholders".
Bondholders, S.L. has been appointed as Commissioner for the Syndicate of Noteholders.
Noteholders shall, by virtue of purchasing and/or holding Notes, be deemed to have agreed to:
(i) the appointment of the Commissioner; and (ii) become a member of the Syndicate of
Noteholders.
In accordance with article 425 of the Spanish Corporations law (Ley de Sociedades de Capital),
the decisions of the Syndicate of Noteholders shall be adopted by absolute majority of the votes
cast. As an exception, any amendment to the terms of the Notes or to the conditions of the
reimbursement of the nominal value will require the favourable voting of two-thirds of the
outstanding Notes.
10.2
Modification and waiver
(a)
The Issuer may, with the consent of the Commissioner, but without the consent of the holders of
the Notes, amend these Conditions insofar as they may apply to the Notes to correct a manifest
error or which amendments are of a formal, minor or technical nature or to comply with
mandatory provisions of law.
(b)
In addition to the above, the Issuer and the Noteholders, the latter with the sanction of a
resolution of the Syndicate of Noteholders, may agree any modification, whether material or not,
to these Conditions and any waiver of any breach or proposed breach of these Conditions.
Any modification, waiver or authorisation in accordance with this Condition 10 ("Syndicate of
Noteholders, Modification and Waiver") shall be binding on the Noteholders and shall be
notified by the Issuer to the Noteholders as soon as practicable thereafter in accordance with
Condition 11 ("Notices").
11.
NOTICES
The Issuer shall ensure that all notices are duly published in a manner which complies with the
rules and regulations of any stock exchange or other relevant authority on which the Notes are
for the time being listed and/or admitted to trading. Any such notice shall be deemed to have
been given on the date of such publication or, if published more than once, on the first date on
which publication is made. If publication as provided above is not practicable, notice will be
given in such other manner, and shall be deemed to have been given on such date, as the Agent
may approve.
So long as the Notes are listed on AIAF, notices to the Noteholders will be published in the
official bulletin of AIAF (Boletín de Cotización de AIAF) and/or by means of a regulatory
announcement (hecho relevante) to the CNMV. Any such notice will be deemed to have been
given on the date of the first publication. In addition, so long as the Notes are represented by
book-entries in Iberclear, all notices to Noteholders shall be made through Iberclear for on
transmission to their respective accountholders.
Notice of a general meeting of the Syndicate of Noteholders must be given in accordance with
the Regulations.
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12.
FURTHER ISSUES
The Issuer may from time to time without the consent of the Noteholders create and issue further
notes, having terms and conditions the same as those of the Notes, or the same except for the
amount and date of the first payment of interest, which may be consolidated and form a single
series with the outstanding Notes.
13.
GOVERNING LAW AND SUBMISSION TO JURISDICTION
13.1
Governing law
The issue of the Notes, including their legal nature (obligaciones u otros valores que reconozcan
o creen deuda), the title and transfer of the Notes as described in Condition 2.3 ("Title and
transfer"), the status of the Notes as described in Condition 3 ("Status of the Notes") and the
provisions of Condition 10 ("Syndicate of Noteholders, Modification and Waiver") relating to the
appointment of the Commissioner and the Syndicate of Noteholders, and any non-contractual
obligations arising out of or in connection with those provisions, are governed by, and shall be
construed in accordance with, Spanish law. The Notes (save as provided above) and any noncontractual obligations arising out of or in connection with the Notes are governed by, and shall
be construed in accordance with, English law. The Notes are issued in accordance with the
formalities prescribed by Spanish law.
Pursuant to Directive 2001/24/EC on the reorganisation and winding up of credit institutions in
EU Member States, Spanish Law 9/2012 and The Credit Institutions (Reorganisation and
Winding up) Regulations 2004 of the United Kingdom, any resolution procedure under
Law 9/2012 is specified to be a "reorganisation measure" for the purposes of
Directive 2001/24/EC and, accordingly, will be effective in the United Kingdom as if it were part
of the general law of insolvency of the United Kingdom.
13.2
Submission to Jurisdiction
(a)
Subject to paragraph (c) below, the English courts have exclusive jurisdiction to settle any
dispute arising out of or in connection with the Notes, including any dispute as to their existence,
validity, interpretation, performance, breach or termination or the consequences of their nullity
and any dispute relating to any non-contractual obligations arising out of or in connection with
the Notes (a "Dispute") and accordingly each of the Issuer and any Noteholders in relation to
any Dispute submits to the exclusive jurisdiction of the English courts.
(b)
For the purposes of this Condition 13.2 ("Governing Law and Submission to Jurisdiction Submission to Jurisdiction"), the Issuer waives any objection to the English courts on the
grounds that they are an inconvenient or inappropriate forum to settle any Dispute.
(c)
This Condition 13.2 ("Governing Law and Submission to Jurisdiction - Submission to
Jurisdiction") is for the benefit of Noteholders only. To the extent allowed by law, the
Noteholders may, in respect of any Dispute or Disputes, take (i) proceedings in any other court
with jurisdiction; and (ii) concurrent proceedings in any number of jurisdictions.
13.3
Appointment of Process Agent
The Issuer appoints Cecabank, S.A. London Branch at 16 Waterloo Place, London, SWIY 4AR
as its agent for service of process in any proceedings before the English courts in relation to any
Dispute, and agrees that, in the event of Cecabank, S.A. London Branch being unable or
unwilling for any reason so to act, it will immediately appoint another person as its agent for
service of process in England in respect of any Dispute. The Issuer agrees that failure by a
process agent to notify it of any process will not invalidate service. Nothing herein shall affect
the right to serve process in any other manner permitted by law.
14.
RIGHTS OF THIRD PARTIES
No rights are conferred on any person under the Contracts (Rights of Third Parties) Act 1999 to
enforce any term of the Notes, but this does not affect any right or remedy of any person which
exists or is available apart from that Act.
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REGULATIONS OF THE SYNDICATE OF NOTEHOLDERS
REGLAMENTO DEL SINDICATO DE OBLIGACIONISTAS / REGULATIONS OF THE
SYNDICATE OF NOTEHOLDERS
The following are the Regulations of the Syndicate of Noteholders referred to in the Terms and
Conditions of the Notes. The Spanish version of the Regulations of the Syndicate of Noteholders is the
legally binding version. The English translation provided below is a translation of the original Spanish
text given for information purposes only.
REGLAMENTO
REGULATIONS
Artículo 1.- Con la denominación "Sindicato de
Obligacionistas de la Emisión Euro 500,000,000
Fixed Rate Reset Subordinated Notes due 28
July 2025" queda constituido un sindicato que
tiene por objeto la defensa de los intereses y
derechos de los titulares de obligaciones
subordinadas emitidas por Ibercaja Banco, S.A.
("Ibercaja"), bajo la denominación "Euro
500,000,000 Fixed Rate Reset Subordinated
Notes due 28 July 2025", en el mes de julio
de 2015, de acuerdo con la legislación vigente (en
adelante, las "Obligaciones Subordinadas" o la
"Emisión", según resulte apropiado).
Article 1.- The "Syndicate of Noteholders of the
Euro 500,000,000 Issue of Fixed Rate Reset
Subordinated Notes due 28 July 2025" is
established as a syndicate whose function is to
defend the interests and rights of the holders of
the subordinated notes issued by Ibercaja
Banco, S.A. ("Ibercaja"), with the name
"Euro 500,000,000 Issue of Fixed Rate Reset
Subordinated Notes due 28 July 2025", in
July 2015, according to the legislation in force
(the "Subordinated Notes" or the "Issue", as
appropriate).
Artículo 2.- El Sindicato subsistirá mientras dure
el empréstito y, terminado este, hasta que queden
cumplidas por Ibercaja sus obligaciones ante los
titulares de las Obligaciones Subordinadas.
Article 2.- The Syndicate will exist for as long
as the borrowing does and, once the latter has
concluded, until Ibercaja has fulfilled its
obligations vis-à-vis the Subordinated Notes.
Artículo 3.- El domicilio del Sindicato se fija en
Zaragoza (España), Plaza Basilio Paraíso, 2.
Article 3.- The address of the Syndicate is Plaza
Basilio Paraíso 2, Zaragoza (Spain).
Artículo 4.- Son Órganos del Sindicato la
Asamblea General de Obligacionistas y el
Comisario.
Article 4.- The Bodies of the Syndicate are the
General Meeting of Noteholders and the
Commissioner.
Artículo 5.- El Comisario será el Presidente del
Sindicato de Obligacionistas y de las Asambleas
Generales, y además de las competencias que
pueda atribuirle la Asamblea General, tendrá la
representación legal del Sindicato y podrá
ejercitar las acciones que a este correspondan y
las que considere oportunas para la defensa
general y particular de los obligacionistas, así
como ejecutar los acuerdos de la Asamblea
General. En todo caso, el Comisario será el
órgano de relación entre Ibercaja y el Sindicato, y
como tal y sin perjuicio de otras facultades que
pueda conferirle la legislación vigente o los
términos y condiciones de las Obligaciones
Subordinadas, podrá asistir con voz y sin voto a
las deliberaciones de la Junta General de Ibercaja,
informar a esta de los acuerdos del Sindicato y
requerir de la misma los informes que, a su juicio
o al de la Asamblea de Obligacionistas, interesen
a estos.
Article 5.- The Commissioner will be the
President of the Syndicate of Noteholders and of
the General Meetings, and in addition to the
responsibilities that the General Meeting may
attribute to him, will be the legal representative
of the Syndicate and can take any action within
his remit and that he considers appropriate for
the defence of the noteholders, in general and
specific terms, and for the execution of the
resolutions of the General Assemblies. In any
event, the Commissioner will liaise between
Ibercaja and the Syndicate and, as such, and
notwithstanding any other powers potentially
conferred upon him by the legislation in force or
the terms and conditions of the Subordinated
Notes, may attend the deliberations of Ibercaja's
General Meeting, with the right to speak but not
to vote, inform the latter of the resolutions of the
Syndicate and request any reports that he or the
Meeting of Noteholders considers to be in the
interest of the latter.
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Artículo 6.- La Asamblea General de
Obligacionistas, debidamente convocada por el
Presidente o por el Órgano de Administración de
Ibercaja y sin perjuicio de otras facultades que
pueda conferirle la legislación vigente o los
términos y condiciones de las Obligaciones
Subordinadas, está facultada para acordar lo
necesario a la mejor defensa de los legítimos
intereses de los obligacionistas, destituir y
nombrar al Comisario, modificar, de acuerdo con
Ibercaja, los términos y condiciones de la
Emisión (ya sean esenciales o no) y ejercer,
cuando proceda, las acciones judiciales
correspondientes y aprobar los gastos ocasionados
por la defensa de los intereses comunes.
Article 6.- The General Meeting of Noteholders,
duly convened by the President or the
Management
Body
of
Ibercaja
and
notwithstanding any other powers potentially
conferred upon him by the legislation in force or
the terms and conditions of the Subordinated
Notes, will be entitled to adopt any decisions
necessary to best defend the legitimate interests
of the noteholders, remove and appoint the
Commissioner, amend, in accordance with
Ibercaja, the terms and conditions of the Issue
(whether these are essential or not), bring legal
action, when appropriate, and approve expenses
incurred in defending shared interests.
Artículo 7.- El régimen de quórums y mayorías
para la constitución y adopción de acuerdos en las
Asambleas Generales de Obligacionistas será el
previsto en la Ley de Sociedades de Capital.
Article 7.- The Spanish Companies Act (Ley de
Sociedades de Capital) regime will be applicable
to the quorums and approval of resolutions in the
General Meetings of Noteholders.
La Asamblea General quedará válidamente
constituida para tratar de cualquier asunto de su
competencia siempre que estén presentes o
debidamente representados los obligacionistas
titulares de la totalidad de las Obligaciones
Subordinadas y los asistentes acepten por
unanimidad la celebración de la Asamblea
General.
The General Meeting will be validly constituted
to transact any business within its remit,
provided that noteholders representing all of the
Subordinated Notes are present or duly
represented and that they unanimously approve
the holding of such meeting.
Salvo previsión en otro sentido en la legislación
vigente, la convocatoria de la Asamblea General
se hará, por lo menos, 15 días antes de la fecha
fijada para su celebración mediante (a) anuncio
que se publicará en la página web del emisor y, si
se estima conveniente, en uno o más periódicos
de difusión nacional o internacional, o (b)
notificación a los obligacionistas de conformidad
con los términos y condiciones de las
Obligaciones Subordinadas.
Unless otherwise indicated in the legislation in
force, the General Meeting will be convened at
least 15 days prior to the date set for the meeting,
by means of: (a) a notice published in the
website of the issuer and, if considered
appropriate, in one or more widely-distributed
national or international newspapers, or (b) a
notice to the noteholders in accordance with the
terms and conditions of the Subordinate Notes.
La Asamblea General de Obligacionistas podrá
reunirse, cuando se considere oportuno, en
cualquier lugar de la ciudad de Zaragoza,
expresándose así en la convocatoria.
The General Meeting of Noteholders may meet,
whenever considered appropriate, at any place
within the city of Zaragoza, specifying the
location when convening the meeting.
Tendrán derecho de asistencia a la Asamblea
General los obligacionistas que lo sean con cinco
días de antelación, por lo menos, a aquél en que
haya de celebrarse la reunión. Los Consejeros de
Ibercaja y el agente de la Emisión tendrán
derecho de asistencia a la Asamblea General
aunque no hubieren sido convocados.
Noteholders who have been so for at least five
business days prior to the date on which the
General Meeting is scheduled, will be entitled to
attend the meeting. The members of the Board of
Directors of Ibercaja and the agent of the Issue
will be entitled to attend the General Meeting
even if they have not been requested to attend.
Todo obligacionista que tenga derecho de
asistencia a la Asamblea General podrá hacerse
representar por medio de otra persona (con
sujeción a lo previsto en la ley). La representación
deberá conferirse por escrito y con carácter
especial para cada Asamblea General.
All noteholders having the right to attend the
General Meetings also have the right to be
represented by another person (subject to
applicable legal provisions). Appointment of a
proxy must be done in writing and specifically
for each meeting.
- 40-
En las reuniones de la Asamblea cada Obligación
Subordinada, presente o representada, dará
derecho a un voto.
In the meetings of the General Meeting, the right
to one vote will be granted for each Subordinate
Note, whether present or represented.
El acta de la sesión podrá ser aprobada por la
propia Asamblea General, acto seguido de
haberse celebrado esta, o, en su defecto, y dentro
del plazo de 15 días, por el Comisario y al menos
un obligacionista designado al efecto por la
Asamblea General. Las certificaciones de las
actas de los acuerdos de la Asamblea General de
Obligacionistas serán expedidas por el Comisario.
The minutes of the meeting may be approved by
the General Meeting itself, immediately after the
meeting has been held or, failing that, within a
term of 15 days, by the Commissioner and at
least one noteholder appointed for such purpose
by the General Meeting. The certificates of the
minutes of the resolutions of the General
Meeting will be issued by the Commissioner.
Artículo 8.- En todo lo no previsto en el presente
Reglamento serán de aplicación la Ley de
Sociedades de Capital, las disposiciones de los
estatutos sociales de Ibercaja que sean de
aplicación, así como las restantes disposiciones
legales vigentes aplicables.
Article 8.- All matters not covered by these
Regulations will be governed by the Spanish
Companies Act, the applicable provisions of the
by-laws of Ibercaja and by any other applicable
legislation.
Para cuantas cuestiones se deriven de este
Reglamento, los obligacionistas, por el solo hecho
de serlo, se someten, de forma exclusiva, con
renuncia expresa a cualquier otro fuero que
pudiera corresponderles, a la jurisdicción de los
Juzgados y Tribunales de la ciudad de Zaragoza.
Regarding any disputes arising from these
Regulations, the noteholders, by virtue of being
so, will submit to the exclusive jurisdiction of
the courts and tribunals of the city of Zaragoza,
expressly waiving any other legal forum to
which they may otherwise be entitled.
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SUMMARY OF CLEARANCE AND SETTLEMENT PROCEDURES APPLICABLE TO BOOKENTRY NOTES
Below is a brief summary of the Spanish clearance and settlement procedures applicable to book–entry
notes such as the Notes.
Notwithstanding that, it should be noted that Law 32/2011, of 4 October which amends Law 24/1988,
of 28 July on the Securities Market (Ley 32/2011, de 4 de octubre, por la que se modifica la Ley 24/1988,
de 28 julio, del Mercado de Valores), provides for certain changes at the date of this Prospectus that are
yet to be implemented in the Spanish clearing, settlement and registry procedures of securities
transactions. These will modify the system and allow for the integration of the post-trading Spanish
systems into the Trans-European Automated Real-Time Gross Settlement Express Transfer System
(second generation) ("TARGET2", together with the first generation TARGET, the "TARGET System")
which is scheduled to be fully implemented in February 2017.
The project to reform Spain's clearing, settlement and registry system and its connection to the TARGET
System (the "Reform") introduces significant new features that affect all classes of securities and all posttrade activities.
The Reform will be implemented in two phases:
(a)
The first phase is expected to take place during 2015 and will involve setting up a new system for
equities to include all the changes envisaged in the Reform, including the creation of a central
clearing counterparty ("CCP") in post-trade whose design must be compatible with the TARGET
System (messages, account structure and definition of operations). Accordingly, the Servicio de
Compensación y Liquidación de Valores platform will be discontinued.
That system will continue to settle within the current timing of T+3 (where "T" represents the
trade date), although that should be reduced to T+2 within a period of 2-3 months since that is the
settlement period in the Regulation (EU) No 909/2014 of the European Parliament and of the
Council of 23 July 2014 on improving securities settlement in the European Union and on central
securities depositories ("CSDs") and amending Directives 98/26/EC and 2014/65/EU and
Regulation (EU) No 236/2012.
The Central de Anotaciones de Deuda Pública ("CADE") platform will continue to operate
unchanged and cash settlements in the new system will be made in the TARGET2-Bank of Spain
cash accounts, as at present.
(b)
The second phase will be implemented to coincide with Iberclear's connection to the TARGET2Securities, scheduled for February 2017. At that time, fixed-income securities will be transferred
to the new system, and CADE will be discontinued.
Equities will also be settled in accordance with the procedures and time periods of the TARGET2Securities, so that the interim settlement procedure used in the first phase will be discontinued.
The second phase will entail unifying the registry and settlement approach for both equities and
fixed-income.
Iberclear
Iberclear is the Spanish central securities depository in charge of both the register of securities held in
book-entry form, and the clearing and settlement of all trades from the Spanish Stock Exchanges, Latibex
(the Latin American stock exchange denominated in Euro), The Book-Entry Public Debt Market, the
Mercado Alternativo Bursatil ("MAB") and AIAF. To achieve this, Iberclear uses two technical
platforms, SCLV (for the Spanish Stock Exchanges, Latibex and the MAB) and CADE (for The BookEntry Public Debt Market and AIAF).
Iberclear is owned by Bolsas y Mercados Españoles, Sociedad Holding de Mercados y Sistemas
Financieros, S.A., a holding company, which holds a 100% interest in each of the Spanish official
secondary markets and settlement systems.
- 42-
Iberclear Securities Registration System
Iberclear and the Iberclear Members have, among others, the function of keeping the book-entry register
of securities traded on the AIAF.
The book-entry register structure is divided into: (i) the Spanish Central Registry managed by Iberclear,
that reflects the aggregate balance of the securities held by each of the Iberclear Members (segregated into
the Iberclear Members' own account and accounts held on behalf of third parties), and (ii) an itemised
individual register managed by each of the Iberclear Members, in which securities are listed under the
security owner's name.
Spanish law considers the legal owner of the securities to be:
(a)
the Iberclear Member appearing in the records of Iberclear as holding the relevant securities in its
own name; or
(b)
the investor appearing in the records of the Iberclear Member as holding the securities.
Iberclear Settlement of securities traded in AIAF
Securities traded in AIAF are private fixed income securities, including corporate bonds (for example,
medium term notes and mortgage backed bonds), represented in the form of either book entries or
certificates.
In the AIAF settlement system, transactions may be settled spot, forward (settlement date more than five
days after the relevant trade date), with a repurchase agreement on a fixed date and double or
simultaneous transactions (two trades in opposite directions with different settlement dates).
The settlement system used for securities admitted to listing on AIAF is the Model 1 delivery versus
payment system, as per the classification of the Bank for International Settlements: that is, it is a
"transaction-to-transaction" cash and securities settlement system with simultaneity in its finality.
Transactions are settled on the business day agreed by participants at the moment of the trade.
Settlement Cycles: The CADE Platform
The process of settling all reported trades with a value date on a specific day ("D"), is carried out in three
phases:
(a)
First settlement cycle,
(b)
Real-time settlement, and
(c)
Session close.
The first cycle includes all transactions reported to CADE up to 18:00 CET of D-1, and these are settled if
sufficient funds and an adequate securities balance are available in the pertinent accounts.
The real-time settlement process is carried out between 07:00 CET and 16:00 CET of the settlement day,
and the system first checks if a sufficient securities balance is available. If it is available, but the buyer of
the securities does not have available funds, the order is rejected and returned to CADE, and placed in a
queue. The process is periodically activated until enough balance is available in the relevant accounts to
settle outstanding orders with finality. If the balance in the seller's securities account is insufficient, the
transaction is placed in a queue. When a credit is lodged in a securities account, the system checks
whether queued orders can be processed.
At the end of the day, the system tries one last time to settle all transactions not settled in the first cycle or
during the process in real time. The settlement cycle at the end of the day takes place at 17:00 CET.
If the seller's securities account has sufficient balance, the system checks - by means of a comparison with
the payment side - if there is also sufficient balance in the buyer's cash account. That is, securities and
cash are not immediately blocked. Once the transfers of securities and cash have been executed, each of
the transactions is considered final.
- 43-
USE OF PROCEEDS
The net proceeds of the issue of the Notes will be used by the Issuer for general corporate purposes.
- 44-
DESCRIPTION OF THE ISSUER
History and Development
Ibercaja Banco was incorporated as a Spanish company with legal status as a public limited company
(sociedad anónima) with the status of a bank. The Issuer is subject to special banking legislation, the
management, supervision and solvency of credit institutions and its regulation (Ley 10/2014, de 26 de
junio, de ordenación, supervisión y solvencia de entidades de crédito and Real Decreto 84/2015, de 13 de
febrero), and to the supervision, control and regulation of the Bank of Spain (Banco de España) and the
ECB under the new system of supervision created by the SSM. Subsidiarily, it is governed by the
Restated Spanish Companies Act (Texto Refundido de la Ley de Sociedades de Capital), approved by
Royal Legislative Decree 1/2010, of 2 July (Real Decreto Legislativo 1/2010, de 2 de julio, por el que se
aprueba el texto refundido de la Ley de Sociedades de Capital). The Issuer's registered office is in
Zaragoza, Spain, at Plaza Basilio Paraiso No. 2, and the telephone number of its registered office
is +34 976767676.
The Issuer's legal and commercial names are Ibercaja Banco, S.A. and Ibercaja, respectively.
The Issuer was registered at the Mercantile Registry Office of Zaragoza, in volume 3,865, book 0,
sheet 1, page No. Z-52186, entry number 1, on 23 September 2011 for an indefinite period. In addition,
the Issuer is registered in the Special Register of the Bank of Spain (Banco de España), under
number 2,085.
Ibercaja Banco and its consolidated subsidiaries engage mainly in retail banking, and conduct most of
their business in Spain. Its corporate objects consist of the performance of all kinds of activities,
operations, acts, contracts and services, associated with banking in general and which it is authorised to
carry out under legislation in effect, including the rendering of investment and auxiliary services.
The Issuer was established as a result of the segregation of the financial activity of Caja de Ahorros y
Monte de Piedad de Zaragoza, Aragón y Rioja and its reorganisation of that activity to a bank. Caja de
Ahorros y Monte de Piedad de Zaragoza, Aragón y Rioja was established by the Real y Excelentísima
Sociedad Económica Aragonesa de Amigos del País under Royal Order of 28 January 1873 (Real Orden
de 28 de enero de 1873), having initiated its activities on 28 May 1876. Ibercaja Banco is also the result
of its integration with Caja3, an entity formed by the merger of Caja de Ahorros de la Inmaculada de
Aragón ("CAI"), Monte de Piedad y Caja General de Ahorros de Badajoz ("Caja Badajoz") and Monte
de Piedad del Círculo Católico de Burgos ("Caja Círculo de Burgos").
Integration of Ibercaja Banco and Caja3
In July 2013, the Issuer achieved the ownership of 100% of the share capital of Caja3, which restructuring
plan approved by the Bank of Spain and the European Commission foresaw to integrate into a larger
financial group. For this purpose, the Issuer carried out a capital increase of € 325.5 million which was
subscribed by the shareholders of Caja3 (CAI, Caja Badajoz and Caja Círculo de Burgos) in exchange for
this entity's entire share capital. The new shareholders (nowadays turned into ordinary foundations)
obtained a joint holding of 12.2% in the share capital of the Issuer, whilst Caja de Ahorros y Monte de
Piedad de Zaragoza, Aragón y Rioja held a stake of 87.8% and became a banking foundation (Fundación
Bancaria Ibercaja) in accordance with Spanish legislation.
In October 2014, the deed of merger by absorption of Caja3 into Ibercaja Banco was executed. Caja3
ceased to exist by dissolution without liquidation, and all its assets were transferred to the Issuer by
means of universal transfer.
Business of Ibercaja Banco
Ibercaja Banco focuses on the retail business. After taking over the business of Caja3, the Group now has
a customer base including households and corporate customers as well as public and private institutions.
The Group has specific channels and differentiated products tailored to meet the requirements of the
different customer segments. With the assistance of specialist units at Ibercaja Banco's financial group
(the "Financial Group"), Ibercaja Banco offers, besides traditional banking services, other products such
as insurance products, investment funds, pension plans, and private banking services. In particular,
Ibercaja Banco targets Small and Medium Enterprises ("SMEs") and personal banking customers.
- 45-
The Issuer's business is divided into the following areas:
(i)
Retail Banking Customer, comprising the "Families" and the "Personal banking" segments;
(ii)
Business and Government Customer, comprising "Corporate banking", "Retailers", "Public
authorities and other customer segments" and "Farming sector" segments; and
(iii)
The Financial Group, comprising "Management of investment companies", "Management of
pension plans", "The insurance business of the Group", "Leasing and renting" and "Private
banking" segments.
Retail Banking Customers
The retail banking customers are the basic pillar of the Group's business. Such customers include
households and personal banking customers. The takeover of Caja3 has consolidated this customer
segment as the major element of the Group's business structure.
Families
Households are the most relevant customer base and the main source of funds managed by the Group.
They are the main users of the Group's lending activity. The branch network has concentrated its efforts
on attracting new customers and consolidating the links with existing customers, developing products
suitable to the needs of every segment according to their income brackets and family circumstances.
Among savings products, low interest rates have led the Group to widen the range of mixed savings
deposits, suitable for customers who seek a higher yield than they get on traditional deposits and, at the
same time, do not wish to bear the risks involved by other investment products.
Distance channels using new technologies (e-banking) are important for the Issuer, present also on social
networks (Twitter), giving preference to its use as well as email and text messages as a way to
communicate offers and promotional deals.
Personal banking
Ibercaja Banco offers a management model based on a personal manager who assists customers in their
financial planning, advises them on their investments, and gives them detailed information on those
products and services that best meet their needs. The Financial Group plays a major role in offering
specific products, as does the private banking area by training personal customer managers and giving
them investment advice.
The Group also offers managed investment funds as a tool to offset falling yields on deposits. Under this
type of arrangement, investors delegate the management of their fund portfolio to experts from the
Financial Group.
The Group also offers investment advisory services. In 2012, the Issuer was among the first in Europe to
have its Advisory Service for Personal Banking customers certified as complying with the
ISO 22222:2010 standard. In 2013, a further step was taken by renewing that certification and extending
its scope to cover the managers of offices with customer portfolios of a certain size. In addition, the
majority of managers assigned to this group of personal banking customers have a solid training
acknowledged by well-known entities such as the European Financial Planning Association ("EFPA").
Business and Government Customers
Corporate banking
Developing the corporate banking area, especially in connection with SMEs, is one of the main strategic
aims of the Group. The largest companies engaged in more complex operations are served by a team of
corporate account managers. These are supported by managers at certain branches having a significant
mass of SMEs customers. The role of this group of employees is to provide solutions to the companies
and give them comprehensive financial advice.
- 46-
The Issuer's corporate service offerings include financing of fixed assets and working capital, treasury
management, insurance, leasing, factoring and hedging of interest rates.
Retailers
The Issuer aims to provide specific products and services to meet retail business requirements. These
include the Point-of-Sale ("PoS") terminals service, offered with various options and rebates.
Ibercaja Banco has entered several cooperation agreements with chambers of commerce, retailer
associations and retailer business organisations in several provinces in Spain, whose members are offered
financial services under attractive terms.
Public authorities and other customer segments
Ibercaja Banco cooperates with public authorities at national and regional levels. This gives the Issuer
access to this source of business and, at the same time, helps other customers in their dealings with the
public authorities.
Ibercaja Banco handles filings for Personal Income Tax returns with the Spanish Tax Agency. At the
regional level, Ibercaja Banco manages taxes levied by the Regional Government of Aragón and
cooperates with different regional authorities such as the Aragón Health Service, the Aragón Employment
Institute and the Office of the Director for Families. In addition, the Issuer has cooperation agreements
with other regional governments such as those of La Rioja, Cataluña, Castilla y León, Castilla la Mancha,
Valencia, Navarra, Galicia and the País Vasco autonomous treasuries.
At the province and local levels Ibercaja Banco has agreements in force to collect taxes for the
governments of Zaragoza, Huesca, Teruel and other provinces, as well as for many local authorities.
These tasks are performed through the comprehensive tax collection service (Servicio de Gestión Integral
de Recaudación) ("GIR"), in which the authorities delegate the task of collecting taxes. The GIR reports
on tax receipts online and in real time.
The Issuer also develops a range of personalised services for private sector groups, including professional
associations, members of the civil service and employees of large companies as well as members of
condominium activities.
Farming sector
The Issuer has a strong presence in primarily farming areas within its traditional territory (the autonomous
regions of Aragón and La Rioja, and the provinces of Guadalajara, Burgos and Badajoz), and thus has a
range of products and services for farmers that has grown gradually over the years under agreements
made with major operators and concerned agencies.
Ibercaja Banco assists farmers engaged in agriculture and livestock breeding by applying for public-sector
aid in the framework of the Common Agricultural Policy, advising them on how to apply for all the aid
they are entitled and offering them advances in some cases.
At a time when the public authorities have reduced the aid provided to farmers in the form of insurance
premium discounts, Ibercaja Banco has marketed farm insurance policies covering the risks of farming,
farm machinery, multi-risk livestock insurance, amongst other.
The Financial Group
The Financial Group was incorporated in 1988 and is wholly owned by the Issuer. Its member companies
are specialised in investment funds, savings and pension plans, bank assurance, asset management and
leasing-renting.
The Financial Group offers a range of products aimed at both retail and corporate customers. These
products are marketed through the Ibercaja Banco branch network to supplement the banking services
offered by the Issuer. The management and marketing of brokerage products has been strengthened as a
result of the integration of Caja3 Group in the Ibercaja Group.
- 47-
Management of investment companies
Ibercaja Gestión S.G.I.I.C., S.A. ("Ibercaja Gestión") is the Financial Group's manager of investment
companies.
The portfolio of Ibercaja Gestión includes a range of funds adapted to particular market circumstances
and investor risk profiles.
In the last months, and due to low interest rates, there has been a slight increase in equity funds, but still
to a low percentage of total, 20%. The bulk still corresponds to fixed income funds, around 50% of total.
The rest is distributed between dynamic funds, target return funds, mixed funds and guaranteed funds.
Ibercaja Gestión offers fund portfolio management agreements. Customers benefit from a diversified
basket of suitable investment funds selected according to the customer's risk profile. Ibercaja Gestión also
manages variable capital investment companies (known as SICAVs, for Sociedades de Inversión de
Capital Variable).
Management of pension plans
Ibercaja Pensión E.G.F.P., S.A. ("Ibercaja Pensión") manages assets, under plans established by
employers or by individual persons.
Ibercaja Pensión offers (i) fixed-income plans; (ii) mixed fixed-and-variable income plans; and (iii)
guaranteed plans account.
Regarding plans established by employers for their employees, these include plans for major groups such
as the employees of Endesa, S.A., Bank of Spain (Banco de España), public authorities of Aragón, and
local authorities of some major cities elsewhere in Spain.
Ibercaja Pensión has entered into an agreement to observe the United Nations Principles for Responsible
Investment ("UNPRI"), the main set of international rules in this field. The purpose of UNPRI is for
savers, in the process of choosing the assets in which to invest, to take into account environmental
protection, social and good corporate governance criteria. UNPRI are also aimed at ensuring that the
investment policies of institutional investors contribute to sustainable economic development. In 2013
Ibercaja Pensión liaised with the control committees of plans to include the principles of action for
sustainable investment in the majority of pension plans established for employees.
The insurance business of the Group
The Financial Group's insurance business is carried on through various companies that operate in the life
and non-life branches.
Ibercaja Vida Compañía de Seguros y Reaseguros, S.A., specialised in bank assurance, focuses on
underwriting savings and investment insurance as well as on risk life insurance products that will be
distributed through the branch network. The company has a range of insurance products including
systematic savings as well as savings and investment insurance, life annuities and temporary annuities,
individual systematic savings plans, insured benefit plans and other products. The Issuer has an exclusive
distribution agreement with Caja de Seguros Reunidos, Compañía de Seguros y Reaseguros, S.A. –
CASER - in the non-life segment, distributing mainly car policies and home owner policies.
Ibercaja Mediación de Seguros, S.A.U., engages in general insurance brokerage. It markets risk insurance
for private individuals and companies, which are distributed through the branch network.
Leasing and renting
Ibercaja Leasing y Financiación, S.A. ("Ibercaja Leasing") specialises in financing businesses through
leasing and renting operations. The company makes available to the Ibercaja Banco branch network
specific products to enable SMEs and professionals to finance investments in fixed assets for themselves
and to use equipment under operating leases. Ibercaja Leasing enters into agreement for vehicles,
machinery, real estate, electronic data processing equipment and furniture.
- 48-
Private banking
Ibercaja Patrimonios S.G.C., S.A. ("Ibercaja Patrimonios") is the portfolio manager company that
handles the private banking business of the Financial Group. Ibercaja Patrimonios offers investment
opportunities to customers with substantial financial assets.
Ibercaja Patrimonios offers the entire customer network an active investment fund portfolio management
service and gives assistance in training as well as providing advisory services on investments to the
personal banking account managers.
The commercial structure is made up of six branch offices situated in Madrid (two offices), Zaragoza,
Logroño, Barcelona and Valencia.
Multi-channel strategy
The Issuer's multi-channel strategy is aimed at bringing services closer to customers so that they can use
them at any place and time. The objective is to integrate the new channels with the traditional ones and
ensure an ongoing and trusting relationship through personal contact. New contents and technological
innovations are regularly being added so that remote banking services can be accessed through different
devices such as tablets and smartphones.
e-Banking
Ibercaja Banco offers its customers access to online services and products through several distance
channels. Customers can operate by Internet through Ibercaja Directo as well as by fixed and mobile
telephones.
Ibercaja Directo is the Group's online banking platform. Different options are provided to each customer
segment, with specific versions for retail and business customers, young people and stores.
The Ibercaja Banco public website (www.ibercaja.es) is another customer service distance channel. It
displays the commercial offers of products and services and has a space for interaction with visitors
where further information is made available through comparative tables as well as simulators, and where
visitors can subscribe to alerts and bulletins. It also has fields for users to leave their comments and for
customers to provide or update their personal data.
Self-service
Ibercaja Banco has an extensive network of self-service terminals that allow customers to carry out usual
transactions such as dispensing cash and providing information on account balances or movements,
paying bills, activating cards, recharging mobile phones and buying tickets.
One of the first steps after taking over Caja3 has been the standardisation of the ATM network, whose
number has increased to 1,543 terminals as at 31 March 2015. The same types of transactions can be
carried out under the same terms at every ATM belonging to the Group.
Bank cards
Ibercaja Banco has 1.680 million cards in circulation and in use as at 31 March 2015 with which
nearly 100 million transactions were carried out in 2014. There are more than one million card holders.
The Group has 19,158 PoS terminals at stores throughout Spain as at 31 March 2015. The terminal is
particularly suitable for self-employed individuals and professionals who are required to deliver services
on the go.
The branch network
The Issuer has an extensive branch network. This is the basic tool, supplemented with alternative
channels, through which the Issuer deals with its customers.
The Group had 1,331 branches as at 31 March 2015. The Group has its main operations in its traditional
territory (the autonomous regions of Aragón and La Rioja, and the provinces of Guadalajara, Burgos and
Badajoz), and has a presence in Madrid, Barcelona, Valencia and Lérida.
- 49-
The breakdown of the commercial network by Autonomous Community as at 31 March 2015 is as
follows: 499 points of sale in Aragón, 191 in Madrid, 128 in Extremadura, 109 in Castilla y León, 110 in
La Rioja, 96 in Cataluña, 68 in Castilla la Mancha, 61 in Valencia, 32 in Andalucía, and 34 in other
autonomous communities. In addition, there are three offices operating in Portugal.
Administrative, Management and Supervisory Bodies
Board of Directors
The table below sets forth, at the date of this Prospectus, the names of the members of the Board of
Directors of the Issuer, the respective dates of their appointment, their positions within the Issuer and
their membership type:
Last appointed
22/09/2011
22/09/2011
24/07/2013
28/01/2015
22/09/2011
24/07/2013
24/07/2013
24/07/2013
24/07/2013
27/01/2014
11/11/2014
Name
Mr. Amado Franco Lahoz
Mr. José Luis Aguirre Loaso
Mr. Francisco Manuel García Peña
Mr. Víctor Iglesias Ruiz
Mr. Jesús Bueno Arrese
Mr. Jesús Solchaga Loitegui
Ms. Gabriela González-Bueno Lillo
Mr. Juan María Pemán Gavín
Mr. Vicente Eduardo Ruiz de Mencía
Mr. Vicente Cóndor López
Mr. Jesús Barreiro Sanz
Title
Chairman
First Vice Chairman
Second First Vice Chairman
CEO
Director
Director
Director
Director
Director
Director
Director and Secretary of the
Board
Type
Shareholder appointed
Shareholder appointed
Shareholder appointed
Executive
Shareholder appointed
Independent
Independent
Shareholder appointed
Shareholder appointed
Independent
Shareholder appointed
The table below sets forth the names of those members of the Board of Directors of the Issuer with
significant activities outside the Issuer as at the date of this Prospectus. As at the date of this Prospectus,
there were no conflicts of interest in relation to members of the Board of Directors of the Issuer between
any duties owed to the Issuer and their private interests and other duties.
Name
Company
Mr. Amado Franco Lahoz .............................................
Caja de Seguros Reunidos, Compañía de Seguros y Reaseguros, S.A. (CASER)
Confederación de Cajas de Ahorro (CECA)
Mr. José Luis Aguirre Loaso .........................................
Cecabank, S.A.
Caja de Seguros Reunidos, Compañía de Seguros y Reaseguros, S.A. (CASER)
Mr. Jesús Bueno Arrese.....
Ibercaja Vida Compañía de Seguros y Reaseguros, S.A
Mr. Jesús Solchaga Loitegui .........................................
Cerro Murrillo, S.A.
Residencial Murrillo, S.A.
Ibercaja Mediación de Seguros, S.A.U.
Mr. Jesús Barreiro Sanz.....
Ibercaja Vida Compañía de Seguros y Reaseguros, S.A.
Position
Chairman
Vice-Chairman
Vice-Chairman
Director
Chairman
Director
Director
Director
Director
The general shareholders' meeting held on 13 April 2015 at first call approved the amendments of the
following articles of the Issuer's Bylaws (estatutos): 3 (Registered office), 20 (Governing bodies), 21
(Distribution of competences), 32 (Information right), 34 (Manner to adopt resolutions), 36 (Adoption of
resolutions), 43 (Subjective conditions of directors), 44 (Meetings of the Board of Directors), 45
(Adoption of resolutions by the Board of Directors), 74 (Titles of the Board of Directors), 49 (Audit and
Compliance Committee), 50 (Appointments and Compensation Committee), 53 (Remuneration of
Directors), 54 (Fiscal year), 55 (Approval of annual account) and the inclusion of new articles 51 and 52.
The purpose of such amendments is to adapt the Issuer's Bylaws (estatutos) to the latest amendments
introduced by Law 31/2014, of 3 December, which amends the Spanish capital companies law to improve
corporate governance and Law 10/2014, of 26 June, on regulation, supervision and solvency of credit
entities. The Regulations of the Board of Directors of the Issuer have been also amended to reflect such
changes.
Executive Committee
The Board of Directors has delegated all of its powers in favour of the Executive Committee, except for
those which cannot be delegated pursuant to the provisions of the Spanish laws or which cannot be
delegated according to the provisions of the Bylaws or the regulation of the Board.
- 50-
At the date of this Prospectus, the Executive Committee was composed of the following seven directors:
Name
Position
Mr. Amado Franco Lahoz ...................................................................................Chairman
Mr. Víctor Iglesias Ruiz .....................................................................................Member
Mr. José Luis Aguirre Loaso ...............................................................................Member
Mr. Jesús Bueno Arrese ......................................................................................Member
Ms. Gabriela González-Bueno Lillo ...................................................................Member
Mr. Juan María Pemán Gavín .............................................................................Member
Mr. Jesús Barreiro Sanz ......................................................................................Secretary
Audit and Compliance Committee
According to the Bylaws of the Issuer, the powers of the Audit and Compliance Committee are to
(i) inform, through its president and/or secretary, in the General Shareholders Meeting about the issues
raised by shareholders on matters within its competence; (ii) monitor the effectiveness of internal control,
internal audit and risk management systems, as well as discussing with the auditors any significant
weaknesses found in the internal control system during the audit; (iii) monitor the preparation and
presentation of regulated financial information; (iv) propose to the Board of Directors, for submission to
the General Shareholders Meeting, the appointment of the auditor or audit firm; (v) establish appropriate
relations with the auditor or audit firm to receive information about any issues that could jeopardise their
independence, or any others related to the auditing process, as well as other communications that could be
foreseen from legal or technical auditing standards, and then submit that information to the Audit and
Compliance Committee for their consideration; and (vi) issue annually, prior to the issuance of the audit
report, a report stating an opinion about the independence of the auditor or the audit firm.
At the date of this Prospectus, the Audit and Compliance Committee was composed of the following five
directors:
Name
Position
Ms. Gabriela González-Bueno Lillo .................................................................Chairman
Mr. Vicente Cóndor López ...............................................................................Member
Mr. Jesús Bueno Arrese ....................................................................................Member
Mr. Juan María Pemán Gavín ...........................................................................Member
Mr. Jesús Barreiro Sanz ....................................................................................Secretary not Member
Appointments Committee
According to the regulation of the Board of Directors, the Appointments Committee is entrusted with
general powers to propose and report to the Board of Directors about any matters regarding appointments
and terminations of Board members.
At the date of this Prospectus, the Appointments Committee was composed of the following three
directors:
Name
Position
Mr. Jesús Solchaga Loitegui ............................................................................Chairman
Mr. Vicente Ruiz de Mencía ............................................................................Member
Mr. Jesús Barreiro Sanz ...................................................................................Secretary
Compensation Committee
According to the regulation of the Board of Directors, the Compensation Committee is entrusted with
general powers to propose and report to the Board of Directors about any matters regarding compensation
of Board members.
- 51-
At the date of this Prospectus, the Compensation Committee was composed of the following three
directors:
Name
Position
Mr. Jesús Solchaga Loitegui ............................................................................Chairman
Mr. Vicente Ruiz de Mencía ............................................................................Member
Mr. Jesús Barreiro Sanz ...................................................................................Secretary
It should be noted that, given the recent resignation of Mr. Manuel Pizarro Moreno as Board director (and
thus, as member of the Appointments Committee and Compensations Committee), the Issuer is currently
considering which independent director should replace him as the missing independent director of the
above Committees.
Large Exposures and Solvency Committee
Notwithstanding other duties assigned by the Board, the Large Exposures and Solvency Committee have
the following basic responsibilities: (i) proposing to the Board of Directors setting limits by type of risk
and business, including credit risk, concentration, such as market risk, liquidity risk, interest rate risk and
currency risk; (ii) reporting, prior to its approval by the Board, the Risk Appetite Framework ("RAF")
and the Risk Appetite Statement ("RAS") of Ibercaja Banco, ensuring that both of them are consistent
with other policies and strategic frameworks of Ibercaja Banco; (iii) analysing and evaluating the risk
management (including tax risk) policies of the Group in terms of risk profile (expected loss) and
profitability, and analysing the Groups exposures by business, customer and sector segments; (iv)
analysing and reviewing the risk oversight systems of the Group; (v) proposing to the Board of Directors,
when deemed appropriate, the measures to mitigate the impact of the risks that have been identified; (vi)
analysing and assessing the level of equity and its forecasts over time, given different scenarios, and
proposing measures it deems appropriate in order to strengthen the solvency of the Company, reporting
on the Capital Adequacy Policy; and (vii) approving the funding plan of Ibercaja Banco and its
amendments.
At the date of this Prospectus, the Large Exposures and Solvency Committee was composed of the
following four directors:
Name
Position
Mr. Vincente Cóndor López........................................................................ Chairman
Mr. Jesús Bueno Arrese ...................................................................................Member
Mr. José Luis Aguirre Loaso ............................................................................Member
Mr. Jesús Barreiro Sanz ...................................................................................Secretary not Member
Strategy Committee
The Strategy Committee focuses on reporting to the Board about the strategic policy of Ibercaja Banco,
ensuring that there is a specific organisation for its implementation. Notwithstanding other duties
assigned by the Board, the Strategy Committee holds the following responsibilities: (i) to inform about
the strategic plan of Ibercaja Banco, monitoring it and reporting to the Board of Directors; (ii) to report
the annual budget of Ibercaja Banco; (iii) to report the strategic direction of the specific and overall goals
of Ibercaja Banco related to the strategic plan and its annual budget; (iv) to report to the Board of
Directors the economic outlook assumptions used to determine the stress scenarios hypotheses that are
used on capital planning; (v) to report the recovery plan; (vi) to report to the Board of Directors on issues
of strategic importance, including those that may affect the shareholder structure or those that may open
new national or international financial markets; (vii) to inform about the outsourcing policy of services
and activities; (viii) to inform about the policy to approve new products while developing new markets,
products or services, and significant changes in those already existing; and (ix) to review and report to the
Board of Directors, on an annual basis, about the adequacy of the operating structures of Ibercaja Banco
to its social mission and strategic policy.
- 52-
At the date of this Prospectus, the Strategy Committee was composed of the following four directors:
Name
Position
Mr. José Luis Aguirre Loaso .............................................................................Chairman
Ms. Gabriela González Bueno Lillo ..................................................................Member
Mr. Francisco Manuel García Peña ...................................................................Member
Mr. Jesús Barreiro Sanz ....................................................................................Secretary not Member
Executive Management
The following table specifies the Executive Management of the Issuer at the date of this Prospectus:
Name
Position
Mr. Francisco Serrano Gill de Albornoz .............................. Deputy General Manager - General Secretary
Ms. María Pilar Segura Bas ................................................. Deputy General Manager – Chief Information and Accounting
Officer
Mr. Luis Miguel Carrasco Miguel ........................................ Deputy General Manager – Chief of Real Estate Assets
Mr. Luis Fernando Allué Escobar ........................................ General Deputy Head – Chief Operations Officer
Mr. José Palma Serrano ...................................................... General Deputy Head – Chief Technology Officer
Ms. Maria Teresa Fernández Fortún .................................... Deputy Head – Chief of Human Resources Officer
Mr. Antonio Martínez Martínez .......................................... Deputy Head - Chief Financial Officer
Ms. María Raquel Martínez Cabañero ................................. Deputy Head – Chief Credit Risk Officer
Mr. José Ignacio Oto Ribate ................................................ Deputy Head - Chief Marketing Officer
Mr. Rodrigo Galán Gallardo ............................................... Deputy Head - Chief of Financial Group
Mr. Ángel Serrano Villavieja .............................................. Deputy Head - Chief Audit and Compliance Officer
The table below sets forth the names of those members of the Executive Management of the Issuer with
significant activities outside the Issuer as at the date of this Prospectus. As at the date of this Prospectus,
there were no conflicts of interest in relation to members of the Executive Management of the Issuer
between any duties owed to the Issuer and their private interests and other duties.
Name
Mr. Francisco Serrano Gill de Albornoz
Ms. María Pilar Segura Bas.................
Mr. Luis Miguel Carrasco Miguel.......
Mr. Luis Fernando Allué Escobar.......
Mr. José Palma Serrano .....................
Ms. Maria Teresa Fernández Fortún ......
Mr. Antonio Martínez Martínez .........
Ms. María Raquel Martínez Cabañero.
Company
Ibercaja Gestión S.G.I.I.C., S.A.
Heraldo de Aragón, S.A.
Ibercaja Gestión S.G.I.I.C., S.A.
Ibercaja Pensión E.G.F.P., S.A.
Gestión de Inmuebles Salduvia, S.A.
Ibercaja Vida Compañía de Seguros y Reaseguros, S.A.U.
Ibercaja Participaciones Empresariales, S.A.
Ibercaja, S.A.
Cajaragón, S.L.
Cerro Murillo, S.A.
Residencial Murillo, S.A.
Inmobinsa, S.A.
Gestión de Inmuebles Salduvia, S.A.
Ibercaja Gestión S.G.I.I.C., S.A.
Ibercaja Leasing y Financiación, S.A. E.F.C.
Ibercaja Pensión E.G.F.P., S.A.
Bodegas Borsao, S.A.
Grandes Vinos y Viñedos, S.A.
Platea Gestión, S.A.
Ibercaja Gestión S.G.I.I.C., S.A.
Radio Huesca, S.A.
Publicaciones y Ediciones del Altoaragón, S.A.
Ibercaja Leasing y Financiación, S.A. E.F.C.
Gestión de Inmuebles Salduvia, S.A.
Chip Audiovisual, S.A.
MasterCajas, S.A.
Sociedad Española de sistemas de Pago, S.A. (Iberpay)
Fundación Aragón Invierte
Zaragoza Logistic Center
Ebrópilos
Fundación Zaragoza Ciudad del Conocimiento
Tipolínea, S.A.
AnexaCapital, S.A.
Capital de Innovación y Crecimiento, S.A., S.C.R. de Régimen Simplificado
Plataforma Logística de Zaragoza, S.A.
- 53-
Position
Chairman
Director
Director
Chairman
Director
Director
Director
Director
Director
Chairman
Chairman
Chairman
Chairman
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Chairman
Chairman
Chairman
Director
Name
Mr. José Ignacio Oto Ribate ...............
Mr. Rodrigo Galán Gallardo ...............
Company
Ibercaja Leasing y Financiación, S.A. E.F.C.
Ibercaja Pensión E.G.F.P., S.A.
Ibercaja Gestión S.G.I.I.C., S.A.
Ibercaja Leasing y Financiación, S.A. E.F.C.
Ibercaja Mediación de Seguros, S.A.U.
Ibercaja Servicios a Distancia IBD, S.L.
Ibercaja Patrimonios S.G.C., S.A.U.
Ibercaja Pensión E.G.F.P., S.A.
Ibercaja Vida Compañía de Seguros y Reaseguros, S.A.U.
Viacajas, S.A.
Euro 6000, S.A.
Caja Badajoz Vida y Pensiones, S.A.
CAI Seguros Generales, S.A.
Ibercaja Gestión S.G.I.I.C., S.A.
Ibercaja Leasing y Financiación, S.A. E.F.C.
Ibercaja Patrimonios S.G.C., S.A.U.
Ibercaja Pensión E.G.F.P., S.A.
Ibercaja Vida Compañía de Seguros y Reaseguros, S.A.U.
Ibercaja Mediación de Seguros, S.A.U.
Position
Chairman
Director
Director
Director
Director
Chairman
Chairman
Director
Director
Director
Director
Administrator
Chairman
Director
Director
Director
Director
Director
Chairman
The business address of each member of the Board of Directors and the other members of the Issuer's
management mentioned above is Plaza Basilio Paraíso, No. 2, Zaragoza (Spain).
Organisational Structure
The following chart summarises the companies making up the Group and the Issuer's ownership of such
companies as at 31 March 2015:
- 54-
Capital Structure
As at the date of this Prospectus, the Issuer's share capital is €2,611,729,998 divided into 2,611,729,998
fully subscribed and paid ordinary shares with a par value of €1 each. All shares are of the same class
with the same rights attached.
Major Shareholders
The Issuer's share capital is owned as follows:
Shareholder
% of shares
Fundación Bancaria Ibercaja ...........................................................................................................................................
Fundación Caja de Ahorros de la Inmaculada de Aragón ...............................................................................................
Fundación Ordinaria Caja Badajoz .................................................................................................................................
Caja Círculo Fundación Bancaria ...................................................................................................................................
87.80%
4.85%
3.90%
3.45%
As of the date of this Prospectus, Fundación Bancaria Ibercaja is the major shareholder of the Issuer with
a shareholding of 87.80%. In accordance with article 43 of Law 26/2013, of 27 December, on savings
banks and banking foundations, Fundación Bancaria Ibercaja has elaborated a protocol on the
management of its participation in the Issuer (Protocolo de Gestión de la Participación Financiera de la
Fundación Bancaria Ibercaja en Ibercaja Banco, S.A.). Such protocol governs the following aspects:
(i) the strategic basic criteria which govern the management of the participation of the Fundación
Bancaria Ibercaja in the Issuer; (ii) the relationship between the Fundación Bancaria Ibercaja and the
governing bodies of the Issuer; (iii) the general criteria applicable to the transactions between the
Fundación Bancaria Ibercaja and the Issuer and mechanisms to avoid potential conflicts of interests;
(iv) the flow of information which allow the Fundación Bancaria Ibercaja and the Issuer to prepare their
respective financial statements and to comply with their reporting obligations; and (v) the principles of a
potential collaboration of the Fundación Bancaria Ibercaja and the Issuer in matters of corporate
responsibility.
As of the date of this Prospectus, the Issuer is not aware of any arrangement which may result in a change
of control in the Issuer.
Litigation
To date, there is not any material or significant actual or pending litigation or other proceedings.
Credit Rating
As at the date of this Prospectus, the Issuer has been assigned long-term deposit rating of B1 (negative
outlook) by Moody's, and long-term debt ratings of BB (positive outlook) by S&P and BB+ (positive
outlook) by Fitch, respectively. The Issuer has also been assigned short-term debt ratings of B by S&P
and B by Fitch, respectively.
Overview Financial Information
The table below includes the consolidated balance sheets of the Issuer as at 31 December 2014 and 2013:
- 55-
31/12/2014
ASSETS
31/12/2013(*)
(thousand Euro)
1.
CASH AND DEPOSITS IN CENTRAL BANKS .....................................................................................
435,089
499,331
2.
FINANCIAL ASSETS HELD FOR TRADING .......................................................................................
2.1.
Deposited at Credit Institutions .......................................................................................................
55,832
36,826
-
-
3.
4.
2.2.
Customer Loans ..............................................................................................................................
-
-
2.3.
Debt securities ................................................................................................................................
959
890
2.4.
Capital Instruments .........................................................................................................................
-
-
2.5.
35,936
Derivatives held for trading ............................................................................................................
54,873
Memorandum item: loaned or pledged .........................................................................................................
-
-
OTHER FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS ..........................
3.1.
Loans and advances to credit institutions ........................................................................................
61,547
68,925
324
-
43
-
3.2.
Loans and advances to customers ...................................................................................................
3.3.
Debt securities ................................................................................................................................
7,780
13,119
3.4.
Other equity instruments .................................................................................................................
53,400
55,806
Memorandum item: loaned or pledged .........................................................................................................
-
-
FINANCIAL ASSETS AVAILABLE FOR SALE ................................................................................... 14,778,280
4.1.
Debt securities ................................................................................................................................ 14,253,973
7,277,141
4.2.
5.
6.
Other equity instruments .................................................................................................................
6,686,936
524,307
590,205
Memorandum item: loaned or pledged ......................................................................................................... 3,571,188
1,670,247
LOANS AND RECEIVABLES .................................................................................................................. 35,632,878
5.1.
Loans and advances to credit institutions ........................................................................................ 1,160,611
38,947,347
5.2.
Loans and advances to customers ................................................................................................... 33,830,111
36,820,105
5.3.
Debt securities ................................................................................................................................
1,367,026
642,156
760,216
Memorandum item: loaned or pledged ......................................................................................................... 4,977,648
6,157,779
HELD TO MATURITY INVESTMENTS ................................................................................................ 6,681,683
11,511,381
Memorandum item: loaned or pledged ......................................................................................................... 4,399,885
7,432,597
7.
ADJUSTMENTS OF FINANCIAL ASSETS DUE TO MACRO HEDGES ..........................................
128,991
40,135
8.
HEDGING DERIVATIVES .......................................................................................................................
496,506
519,043
9.
NON CURRENT ASSETS HELD FOR SALE.........................................................................................
732,625
642,542
10.
INVESTMENTS .........................................................................................................................................
10.1.
Associates .......................................................................................................................................
155,955
207,396
117,480
147,085
Jointly-controlled entities ................................................................................................................
38,475
60,311
11.
PENSION LINKED INSURANCE CONTRACTS ..................................................................................
-
-
12.
REINSURANCE ASSETS..........................................................................................................................
1,564
1,214
13.
TANGIBLE ASSETS.................................................................................................................................. 1,211,567
13.1.
Property, plant and equipment ........................................................................................................ 740,840
1,285,344
10.2.
13.2.
14.
16.
For own use ..................................................................................................................
724,883
860,658
13.1.2.
Assigned under operating lease .....................................................................................
15,957
16,422
13.1.3.
Corresponding to Social Welfare ..................................................................................
Investment property ........................................................................................................................
-
-
470,727
408,264
Memorandum item: Adquired under finance lease ........................................................................................
-
-
INTANGIBLE ASSETS .............................................................................................................................
14.1.
Goodwill .........................................................................................................................................
207,448
196,676
144,934
131,320
62,514
65,356
TAX ASSETS .............................................................................................................................................. 1,464,401
15.1.
Current ............................................................................................................................................
36,907
15.2.
Deferred .......................................................................................................................................... 1,427,494
1,591,495
278,126
324,588
232,615
265,201
14.2.
15.
877,080
13.1.1.
Other intangible assets ....................................................................................................................
OTHER ASSETS ........................................................................................................................................
16.1.
Inventories ..................................................................................................................................
16.2.
Other ...............................................................................................................................................
TOTAL ASSETS ............................................................................................................................................
- 56-
33,433
1,558,062
45,511
59,387
62,322,492
63,149,384
31/12/2014
LIABILITIES
1.
2.
3.
31/12/2013(*)
(thousand Euro)
48,462
27,546
1.1.
Central Banks deposits ...........................................................................................................................
-
-
1.2.
Credit Institutions deposits.....................................................................................................................
-
-
1.3.
Customer Deposits .................................................................................................................................
-
-
1.4.
Marketable debt securities......................................................................................................................
-
-
1.5.
Derivatives held for trading. .................................................................................................................. 48,462
27,546
1.6.
Short Trading securities .........................................................................................................................
-
1.7.
Other Financial Liabilities......................................................................................................................
-
-
OTHER FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS ..........
-
48,800
2.1.
Central Banks deposits ...........................................................................................................................
-
-
2.2.
Credit Institutions deposits. ....................................................................................................................
-
-
2.3.
Customer Deposits. ................................................................................................................................
-
48,800
2.4.
Marketable debt securities......................................................................................................................
-
-
2.5.
Subordinated liabilities ..........................................................................................................................
-
-
2.6.
Other Financial Liabilities......................................................................................................................
FINANCIAL LIABILITIES HELD FOR TRADING .......................................................................
-
-
-
50,824,160
53,081,749
3.1.
Deposits from Central Banks .................................................................................................................
4,848,302
4,855,479
3.2.
Deposits from Credit Institutions. ..........................................................................................................
3,241,613
4,197,762
3.3.
Customer Deposits. ................................................................................................................................
39,868,562
39,991,664
3.4.
Marketable debt securities......................................................................................................................
1,631,249
2,995,125
3.5.
Subordinated liabilities ..........................................................................................................................556,574
567,520
3.6.
Other Financial Liabilities......................................................................................................................677,860
474,199
FINANCIAL LIABILITIES AT AMORTISED COST.....................................................................
4.
ADJUSTMENTS OF FINANCIAL LIABILITIES DUE TO MACRO HEDGES ..........................
6,668
6,474
5.
HEDGING DERIVATIVES ................................................................................................................
604,912
297,464
6.
LIABILITIES ASSOCIATED WITH NON-CURRENT ASSETS ..................................................
-
-
7.
LIABILITIES UNDER INSURANCE CONTRACTS ......................................................................
7,103,517
6,333,643
8.
PROVISIONS .......................................................................................................................................
352,183
261,821
8.1.
Pension funds and obligations of a similar nature ..................................................................................172,755
152,267
8.2.
Provisions for taxes and other legal contingencies ................................................................................. 10,307
5,949
8.3.
Provisions for contingent exposures and commitments.......................................................................... 26,027
22,382
8.4.
Other provisions.....................................................................................................................................143,094
81,223
413,296
442,330
9.
TAX LIABILITIES ..............................................................................................................................
9.1.
Current ................................................................................................................................................... 5,907
6,786
9.2.
Deferred .................................................................................................................................................407,389
435,544
-
-
10.
SOCIAL WELFARE FUND................................................................................................................
11.
OTHER LIABILITIES. .......................................................................................................................
147,698
113,830
12.
TOTAL LIABILITIES ........................................................................................................................
59,500,896
60,613,657
- 57-
31/12/2014
(thousand Euro)
EQUITY
1.
SHAREHOLDERS' FUNDS ....................................................................................................................
2,518,359
2,403,540
1.1.
Capital. .........................................................................................................................................
2,611,730
2,611,730
1.1.1.
Issued .............................................................................................................................
2,611,730
2,611,730
1.1.2.
Less: Capital not required. .............................................................................................
-
-
1.2.
Premium ...................................................................................................................................
-
-
1.3.
Reserves. ..................................................................................................................................
-244,024
-140,506
1.3.1.
Accumulated reserves ..............................................................................................................
-161,037
-81,284
1.3.2.
Reserves in entities measured under the equity method ...........................................................
-82,987
-59,222
Other capital instruments .........................................................................................................
-
-
1.4.1.
Compound financial instruments..............................................................................................
-
-
1.4.2.
Cuotas participativas and associated funds (just Saving Banks). .............................................
-
-
1.4.3.
Other capital instruments .........................................................................................................
-
-
1.4.
2.
3.
31/12/2013(*)
1.5.
Less: Eigenvalues .....................................................................................................................
-
-
1.6.
Profit attributed to the parent entity..........................................................................................
150,653
-67,684
1.7.
Less: Dividends and remuneration. ..........................................................................................
-
VALUATION ADJUSTMENTS. ......................................................................................................
302,710
130,173
2.1.
Available-for-sale financial assets. ...........................................................................................
672,133
240,969
2.2.
Cash flow hedges .....................................................................................................................
-98
-
2.3.
Hedges of net investments in foreign operations. .....................................................................
-
-
2.4.
Exchange differences. ..............................................................................................................
-
-
2.5.
Non-current assets for sale .......................................................................................................
-
-
2.6.
Entities measured under the equity method. .............................................................................
2,467
1,901
2.7.
Other measurement adjustments...............................................................................................
-371,792
-112,697
527
2,014
NON-CONTROLLING INTERESTS ..............................................................................................
3.1.
Value adjustments ....................................................................................................................
55
-
3.2.
Remainder ................................................................................................................................
472
2,014
2,821,596
2,535,727
TOTAL EQUITY.....................................................................................................................................
TOTAL LIABILITIES AND EQUITY ..................................................................................................
MEMORANDUM ITEMS
62,322,492
63,149,384
(thousand Euro)
CONTINGENT EXPOSURES ...............................................................................................................
622,060
725,937
CONTINGENT COMMITMENTS........................................................................................................
2,494,004
3,086,978
- 58-
The table below includes the consolidated income statements of the Issuer for the years ended 31
December 2014 and 2013:
31/12/2014 31/12/2013(*)
(thousand Euro)
1.
2.
3.
A)
4.
5.
6.
7.
8.
Interest and similar income. .........................................................................................................
Interest and similar charges .........................................................................................................
Interest on capital instruments (only applies to Credit Cooperatives) .........................................
9.
10.
Exchange differences (net). ...........................................................................................................
Other operating income. ...............................................................................................................
10.1.
Income from insurance and reinsurance contracts ..............................................................
10.2.
Sales and income from non-financial services. ...................................................................
10.3.
Rest of other operating income ...........................................................................................
11.
Other operating expense ................................................................................................................
11.1
Expenses on insurance and reinsurance contract ................................................................
11.2.
Changes in inventories........................................................................................................
11.3.
Rest of other operating expenses ........................................................................................
B)
12
GROSS INCOME. ........................................................................................................................
Administrative Expenses...............................................................................................................
12.1.
Personnel expense. ............................................................................................................
12.2.
Other administration expenses. ..........................................................................................
13.
14.
15.
Depreciation and amortisation ......................................................................................................
Provisions (net). ..............................................................................................................................
Financial asset impairment losses (net).........................................................................................
15.1.
Loans and receivables .........................................................................................................
15.2.
Other financial instruments not carried at fair value through profit or loss. ........................
C)
16.
INCOME FROM OPERATING ACTIVITIES ...........................................................................
Other asset impairment losses (net................................................................................................
16.1.
Goodwill and other intangible assets .................................................................................
16.2.
Other assets. ......................................................................................................................
17.
18.
19.
Gains(losses) from disposals of assets not classified as non-current available for sale..............
Negative difference in business combinations .............................................................................
Gains(losses) from non-current assets available for sale not classified as discontinued
operations.......................................................................................................................................
PROFIT/(LOSS) BEFORE TAX .................................................................................................
Corporate Income Tax. .................................................................................................................
Compulsory allocation to welfare funds. .....................................................................................
PROFIT/(LOSS) FOR YEAR FROM CONTINUING OPERATIONS.....................................
Profit (loss) from discontinued operations (net) ...........................................................................
PROFIT/(LOSS) FOR THE YEAR ..............................................................................................
F.1) Profit/(loss) attributed to the parent entity. ..........................................................................
F.2) Profit attributed to non-cotrolling interests ..........................................................................
D)
20.
21.
E)
22.
F)
NET INTEREST INCOME. ..........................................................................................................
Return on equity instruments ........................................................................................................
Share of profit/(loss) of equity-accounted entities ........................................................................
Fees and commission income .........................................................................................................
Fees and commission expense ........................................................................................................
Net gains(losses) on financial assets and liabilities .......................................................................
8.1.
Held for trading ..................................................................................................................
8.2.
Other financial instruments at fair value through profit or loss ...........................................
8.3.
Financial instruments not measured at fair value through profit or loss ..............................
8.4.
Other .................................................................................................................................
(*)
1,367,906
668,558
N/A
699,348
11,802
-7,997
332,261
16,906
424,919
2,852
1,500
438,185
-17,618
271
1,177,382
1,112,826
35,332
29,224
1,210,909
1,113,735
97,174
1,410,171
729,448
513,537
215,911
59,487
5,812
357,876
321,554
36,322
257,548
35,764
35,764
26,242
-
1,223,104
630,894
N/A
592,210
8,870
-26,153
280,663
17,423
136,217
3,925
999
130,156
1,137
1,489
1,092,855
1,037,490
32,499
22,866
1,172,842
1,046,420
126,422
895,886
563,229
374,934
188,295
48,606
-42,819
355,796
309,316
46,480
-28,926
38,160
3,260
34,900
10,881
2,635
-32,920
215,106
64,382
150,724
150,724
150,653
71
-70,311
-123,881
-54,327
-69,554
-69,554
-67,684
-1,870
In the 2014 consolidated annual accounts of the Issuer, the financial information as of and for the year
ended 31 December 2013 was restated for comparative purposes as a result of the early adoption in 2014
of IFRIC 21 (Levies). See Note 1.4 to the 2014 consolidated annual accounts of the Issuer. Accordignly,
the 2013 financial information included in this Prospectus differs from that reported in the 2013
consolidated annual accounts of the Issuer.
- 59-
The table below includes the consolidated balance sheet of the Issuer as at 31 March 2015:
31/03/2015(*)
31/12/2014
(thousand Euro)
ASSETS
1.
CASH AND DEPOSITS WITH CENTRAL BANKS.........................................................
396,742
435,089
2.
FINANCIAL ASSETS HELD FOR TRADING .................................................................
62,867
55,832
2.1. Deposited at Credit Institutions .....................................................................................
-
-
2.2. Customer Loans .............................................................................................................
-
-
2.3. Debt securities ...............................................................................................................
742
959
3.
2.4. Capital Instruments ........................................................................................................
-
-
2.5. Derivatives held for trading ...........................................................................................
62,125
54,873
Memorandum item: loaned or pledged ....................................................................................
-
-
OTHER FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS ....
58,935
61,547
3.1. Loans and advances to credit institutions .......................................................................
-
324
3.2. Loans and advances to customers ..................................................................................
-
43
3.3. Debt securities ...............................................................................................................
5,351
7,780
3.4. Other equity instruments................................................................................................
53,584
53,400
Memorandum item: loaned or pledged ....................................................................................
-
-
AVAILABLE-FOR-SALE FINANCIAL ASSETS .............................................................
15,763,097
14,778,280
4.1. Debt securities ...............................................................................................................
15,245,058
14,253,973
4.2. Other equity instruments................................................................................................
518,039
524,307
Memorandum item: loaned or pledged ....................................................................................
-
3,571,188
LOANS AND RECEIVABLES ............................................................................................
37,339,964
35,632,878
5.1. Loans and advances to credit institutions .......................................................................
1,713,957
1,160,611
5.2. Loans and advances to customers ..................................................................................
33,369,839
33,830,111
5.3. Debt securities ...............................................................................................................
2,256,168
642,156
Memorandum item: loaned or pledged ....................................................................................
-
4,977,648
HELD TO MATURITY INVESTMENTS ..........................................................................
4,386,581
6,681,683
Memorandum item: loaned or pledged ....................................................................................
-
4,399,885
7.
ADJUSTMENTS OF FINANCIAL ASSETS DUE TO MACRO HEDGES ....................
150,862
128,991
8.
HEDGING DERIVATIVES .................................................................................................
484,540
496,506
9.
NON CURRENT ASSETS HELD FOR SALE ...................................................................
742,740
732,625
INVESTMENTS....................................................................................................................
154,578
155,955
10.1. Associates ......................................................................................................................
115,697
117,480
10.2. Jointly-controlled entities ..............................................................................................
38,881
38,475
4.
5.
6.
10.
11.
PENSION LINKED INSURANCE CONTRACTS ..............................................................
-
-
12.
REINSURANCE ASSETS ......................................................................................................
889
1,564
13.
TANGIBLE ASSETS ..............................................................................................................
1,199,435
1,211,567
13.1. Property, plant and equipment .........................................................................................
732,994
740,840
13.1.1. For own use ...........................................................................................................
716,888
724,883
13.1.2. Assigned under operating lease .............................................................................
16,106
15,957
14.
15.
16.
13.1.3. Corresponding to Social Welfare ..........................................................................
-
-
13.2. Investment property ..........................................................................................................
466,441
470,727
Memorandum item: Adquired under finance lease ....................................................................
-
-
INTANGIBLE ASSETS..........................................................................................................
205,738
207,448
14.1. Goodwill ...........................................................................................................................
144,934
144,934
14.2. Other intangible assets ......................................................................................................
60,804
62,514
TAX ASSETS ..........................................................................................................................
1,461,386
1,464,401
15.1. Current..............................................................................................................................
34,756
36,907
15.2. Deferred ............................................................................................................................
1,426,630
1,427,494
OTHER ASSETS ....................................................................................................................
284,108
278,126
- 60-
16.1. Inventories ........................................................................................................................
230,633
232,615
16.2. Other.................................................................................................................................
53,475
45,511
TOTAL ASSETS ..............................................................................................................................
62,692,462
62,322,492
31/03/2015(*)
31/12/2014
(thousand Euro)
LIABILITIES
1.
2.
3.
FINANCIAL LIABILITIES HELD FOR TRADING ----------------------------------------------
57,204
48,462
1.1. Central Banks deposits ........................................................................................................
-
-
1.2. Credit Institutions deposits ...................................................................................................
-
-
1.3. Customer Deposits................................................................................................................
-
-
1.4. Marketable debt securities ....................................................................................................
-
-
1.5. Derivatives held for trading ..................................................................................................
57,204
48,462
1.6. Short Trading securities ........................................................................................................
-
-
1.7. Other Financial Liabilities ....................................................................................................
-
-
OTHER FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
-
-
2.1. Central Banks deposits .........................................................................................................
-
-
2.2. Credit Institutions deposits ...................................................................................................
-
-
2.3. Customer Deposits................................................................................................................
-
-
2.4. Marketable debt securities ....................................................................................................
-
-
2.5. Subordinated liabilities .........................................................................................................
-
-
2.6. Other Financial Liabilities ....................................................................................................
-
-
FINANCIAL LIABILITIES AT AMORTISED COST..........................................................
50,854,062
50,824,160
3.1. Deposits from Central Banks ................................................................................................
2,696,594
4,848,302
3.2. Deposits from Credit Institutions ..........................................................................................
4,806,931
3,241,613
3.3. Customer Deposits................................................................................................................
40,515,045
39,868,562
3.4. Marketable debt securities ....................................................................................................
1,557,826
1,631,249
3.5. Subordinated liabilities .........................................................................................................
556,669
556,574
677,860
3.6. Other Financial Liabilities ....................................................................................................
720,997
4.
ADJUSTMENTS OF FINANCIAL LIABILITIES DUE TO MACRO HEDGES ...............
7,542
6,668
5.
HEDGING DERIVATIVES .....................................................................................................
755,011
604,912
6.
LIABILITIES ASSOCIATED WITH NON CURRENT ASSETS ........................................
-
-
7.
LIABILITIES UNDER INSURANCE CONTRACTS ...........................................................
7,200,588
7,103,517
8.
PROVISIONS ............................................................................................................................
363,581
352,183
8.1. Pension funds and obligations of a similar nature .................................................................
171,761
172,755
8.2. Provisions for taxes and other legal contingencies................................................................
10,298
10,307
9.
8.3. Provisions for contingent exposures and commitments ........................................................
25,787
26,027
8.4. Other provisions ...................................................................................................................
155,735
143,094
TAX LIABILITIES ...................................................................................................................
442,595
413,296
9.1. Current..................................................................................................................................
7,488
5,907
9.2. Deferred................................................................................................................................
435,107
407,389
10.
SOCIAL WELFARE FUND ....................................................................................................
-
-
11.
OTHER LIABILITIES .............................................................................................................
70,731
147,698
TOTAL LIABILITIES.......................................................................................................................
59,751,314
59,500,896
- 61-
31/03/2015 (*)
EQUITY
31/12/2014
(thousand Euro)
1. SHAREHOLDERS' FUNDS .....................................................................................................
2,560,807
2,518,359
1.1. Capital ..................................................................................................................................
2,611,730
2,611,730
1.1.1. Issued -----------------------------------------------------------------------------------------------
2,611,730
2,611,730
1.1.2. Less: Capital not required -----------------------------------------------------------------------
-
-
1.2. Premium ---------------------------------------------------------------------------------------------------
-
-
1.3. Reserves ---------------------------------------------------------------------------------------------------
-93,490
-244,024
1.3.1. Accumulated reserves ----------------------------------------------------------------------------
-6,445
-161,037
1.3.2. Reserves in entities measured under the equity method -------------------------------------
-87,045
-82,987
1.4. Other capital instruments --------------------------------------------------------------------------------
-
-
1.4.1. Compound financial instruments ---------------------------------------------------------------
-
-
1.4.2. Cuotas participativas and associated funds (just Saving Banks) ...................................
-
-
1.4.3. Other capital instruments ..............................................................................................
-
-
1.5. Less: Eigenvalues ..................................................................................................................
-
-
1.6. Profit attributed to the parent entity........................................................................................
42,567
150,653
1.7. Less: Dividends and remuneration .........................................................................................
-
2. VALUATION ADJUSTMENTS................................................................................................
379,845
302,710
824,086
672,133
-73
-98
2.3. Hedges of net investments in foreign operations ....................................................................
-
-
2.4. Exchange differences .............................................................................................................
262
-
2.5. Non-current assets for sale ....................................................................................................
-
-
2.1. Aviable-for-sale financial assets ---------------------------------------------------------------------2.2. Cash flow hedges ...................................................................................................................
2.6. Entities measured under the equity method ............................................................................
1,219
2,467
2.7. Other measurement adjustments.............................................................................................
-445,649
-371,792
3. NON-CONTROLLING INTERESTS .......................................................................................
496
527
3.1. Value adjustments ..................................................................................................................
-
55
3.2. Remainder .............................................................................................................................
496
472
TOTAL EQUITY ........................................................................................................................... .
2,941,148
2,821,596
TOTAL LIABILITIES AND EQUITY.......................................................................................... .
62,692,462
62,322,492
MEMORANDUM ITEMS
(thousand Euro)
1. CONTINGENT EXPOSURES ....................................................................................................
606,587
622,060
2. CONTINGENT COMMITMENTS.............................................................................................
2,530,328
2,494,004
- 62-
The table below includes the consolidated income statement of the Issuer for the three-month period
ended 31 March 2015:
31/03/2015 (*) 31/03/2014 (*)
(thousand Euro)
1. Interest and similar income ........................................................................................................................
303,865
355,633
2. Interest and similar charges........................................................................................................................
135,597
179,539
3. Interest on capital instruments (only applies to Credit Cooperatives) ......................................................
N/A
N/A
A) NET INTEREST INCOME .........................................................................................................................
168,268
176,094
4. Return on equity instruments .....................................................................................................................
2,774
2,474
5. Share of profit/(loss) of equity-accounted entities .....................................................................................
-233
-2,553
6. Fees and commsion income .........................................................................................................................
81,033
78,582
7. Fees and commision expense.......................................................................................................................
3,007
4,444
8. Net gains(losses) on financial assets and liabilities ....................................................................................
22,644
11,963
812
8.1.
Held for trading ...............................................................................................................................
16
8.2.
Other financial instruments at fair value through profit or loss .......................................................
601
203
8.3.
Financial instruments not measured at fair value through profit or loss ..........................................
23,571
11,557
8.4.
Other ..............................................................................................................................................
-1,544
-609
9. Exchange differences (net) ..........................................................................................................................
-643
308
10. Other operating income ..............................................................................................................................
247,457
314,689
10.1.
Income from insurance and reinsurance contracts ...........................................................................
235,470
302,446
10.2.
Sales and income from non-financial services .................................................................................
4,177
5,926
10.3.
Rest of other operating income........................................................................................................
7,810
6,317
11. Other operating charges..............................................................................................................................
239,599
315,270
235,291
307,065
11.1
Expenses on insurance and reinsurance contract .............................................................................
11.2.
Changes in inventories ....................................................................................................................
-
-
11.3.
Rest of other operating expenses .....................................................................................................
4,308
8,205
B) GROSS INCOME........................................................................................................................................
278,694
261,843
12 Administrative expenses..............................................................................................................................
129,926
145,445
103,800
12.1.
Personnel expenses..........................................................................................................................
96,469
12.2.
Other administration expenses ........................................................................................................
33,457
41,645
13. Depreciation and amortisation ...................................................................................................................
14,400
13,800
14. Provisions (net) ............................................................................................................................................
12,693
1,284
15. Financial asset impairment losses (net) ......................................................................................................
48,368
38,818
48,258
39,333
15.1.
Loans and receivables .....................................................................................................................
15.2.
Other financial instruments not carried at fair value through profit or loss .....................................
110
-515
C) INCOME FROM OPERATING ACTIVITIES ........................................................................................
73,307
62,496
16. Other asset impairment losses (net) ...........................................................................................................
4,256
3,987
Goodwill and other intangibles .......................................................................................................
-
2,191
Other assets .....................................................................................................................................
4,256
1,796
17. Gains(losses) from disposals of assets not classified as non-current available for sale ...........................
1,539
3,438
18. Negative difference in business combinations............................................................................................
19. Gains(losses) from non-current assets available for sale not classified as discontinued operations ......
-
-
-10,581
-4,788
D) PROFIT/(LOSS) BEFORE TAX................................................................................................................
60,009
57,159
20. Corporate Income Tax ................................................................................................................................
17,455
16,930
21. Compulsory allocation to welfare funds ....................................................................................................
-
40,229
16.1.
16.2.
E) PROFIT/(LOSS) FOR YEAR FROM CONTINUING OPERATIONS ..................................................
42,554
22. Profit (loss) from discontinued operations (net) ........................................................................................
-
-
F) PROFIT/(LOSS) FOR THE YEAR ...........................................................................................................
42,554
40,229
F.1) Profit/(loss) attributed to the parent entity ........................................................................................
42,567
40,163
F.2) Profit attributed to non-cotrolling interests .......................................................................................
-13
66
(*)
Non-audited figures.
- 63-
TAXATION
Taxation in Spain
The following is a general description of certain Spanish tax considerations arising in connection with the
acquisition and holding of the Notes by individuals or entities who are the beneficial owners of the Notes
(the Noteholders and each a Noteholder). It does not purport to be a complete analysis of all tax
considerations relating to the Notes whether in those countries or elsewhere. Prospective purchasers of the
Notes should consult their own tax advisers as to the consequences under the tax laws of the country of
which they are resident for tax purposes and the tax laws of the Kingdom of Spain of acquiring, holding
and disposing of the Notes and receiving payments of interest, principal and/or other amounts under the
Notes.
All the tax consequences described in this section are based on the general assumption that the Notes are
initially registered for clearance and settlement in Iberclear.
This summary is based upon the law as in effect on the date of this Prospectus and is subject to any
change in law that may take effect after such date, including changes with retroactive effect. In particular,
prospective investors or Noteholders are advised to consider the recently enacted tax reform approving
three different Bills regarding the Personal Income Tax ("PIT"), the Non-Resident Income Tax
("NRIT"), the Corporate Income Tax ("CIT") and the Value Added Tax which will affect the taxation of
the Notes as well as the developments of the Law 10/2014, dated 26 June 2014, recently approved.
This information has been prepared in accordance with the following Spanish tax legislation in force at
the date of this Prospectus:
(a)
of general application, Additional Provision One of Law 10/2014, dated 26 June 2014
("Law 10/2014"), which also applies to debt instruments issued by Spanish resident companies
and Spanish public entities having corporate form, as well as Royal Decree 1065/2007, dated 27
July 2007, as amended by Royal Decree 1145/2011, dated 29 July 2011;
(b)
for individuals resident for tax purposes in Spain which are subject to the PIT, Law 35/2006,
dated 28 November 2006, on PIT, as amended by Law 26/2014, of 27 November, and Royal
Decree 439/2007, dated 30 March 2007, enacting the PIT Regulations, as amended by Royal
Decree 633/2015, dated 10 July 2015, along with Law 19/1991, dated 6 June 1991, on Wealth
Tax, as amended, and Law 29/1987, dated 18 December 1987, on Inheritance and Gift Tax
("IGT");
(c)
for legal entities resident for tax purposes in Spain which are subject to the CIT, Law 27/2014,
dated 27 November, on CIT and Royal Decree 634/2015, dated 10 July 2015, promulgating the
CIT Regulations, as amended; and
(d)
for individuals and entities who are not resident for tax purposes in Spain which are subject to the
NRIT, Royal Legislative Decree 5/2004, dated 5 March 2004, promulgating the Consolidated
Text of the NRIT Law, as amended by Law 26/2014, of 27 November, along with Law 19/1991,
dated 6 June 1991, on Wealth Tax, as amended, and Royal Decree 1776/2004, dated 30
July 2004, promulgating the NRIT Regulations, as amended by Royal Decree 633/2015, dated 10
July 2015, and Law 29/1987, dated 18 December 1987, on IGT.
Indirect taxation
Whatever the nature and residence of the Noteholder, the acquisition and transfer of the Notes will be
exempt from indirect taxes in Spain, i.e. exempt from Transfer Tax and Stamp Duty, in accordance with
the Consolidated Text of such tax promulgated by Royal Legislative Decree 1/1993, dated 24
September 1993, and exempt from Value Added Tax, in accordance with Law 37/1992, dated 28
December 1992, regulating such tax.
Direct taxation
The Issuer understands that the Notes should be deemed as financial assets with an explicit yield for
Spanish tax purposes, according to article 91 of the PIT Regulations and article 63 of the CIT
Regulations.
- 64-
Individuals with tax residency in Spain
Personal Income Tax (Impuesto sobre la Renta de las Personas Físicas)
Both interest periodically received and income derived from the transfer, redemption or repayment of the
Notes constitute a return on investment obtained from the transfer of a person's own capital to third
parties in accordance with the provisions of article 25.2 of the PIT Law, and must be included in the
investor's PIT savings taxable base.
The PIT savings taxable base is taxed at the following rates: (i) for taxable income up to €6,000: 19.5%
(19% as from 1 January 2016); (ii) for taxable income from €6,001 to €50,000: 21.5% (21% as from 1
January 2016); and (iii) for any amount in excess of €50,000: 23.5% (23% as from 1 January 2016).
Individual investors subject to PIT will be subject to a withholding on account of PIT at the current rate
of 19.5% (19% as from 1 January 2016 onwards) by the Issuer on interest payments as well as on income
derived from the redemption or repayment of the Notes.
However, income derived from the transfer of the Notes should not be subject to withholding on account
of PIT provided that the Notes are:
(a)
registered in book-entry form (anotaciones en cuenta); and
(b)
traded in a Spanish official secondary market (mercado secundario oficial), such as AIAF.
Notwithstanding the above, a withholding tax at the rate of 19.5% (19% as from 1 January 2016) shall
apply on the part of the transfer price that corresponds to the accrued interest when the transfer of the
Notes takes place within the 30-day period prior to the moment in which such interest is due when the
following requirements are fulfilled:
(a)
the acquirer would be a non-Spanish tax resident or a CIT taxpayer;
(b)
the explicit yield derived from the transfer of the Notes is exempt from withholding tax.
In any event, the individual Noteholder may credit the withholding tax applied by the Issuer against his or
her final PIT liability for the relevant tax year.
Wealth Tax (Impuesto sobre el Patrimonio)
According to Royal Decree-law 13/2011, dated 16 September 2011, as amended, and the Law on the
General State Budget for 2015, in 2015 all Spanish resident individuals are liable for Wealth Tax. This
tax is levied on the net worth of an individual's assets and rights in accordance with the applicable
Spanish regional and State rules. The marginal rates range between 0.2% and 2.5% and some reductions
could apply. Individuals with tax residency in Spain who are under the obligation to pay Wealth Tax must
take into account the amount of the Notes which they hold as at 31 December in each year, when
calculating their Wealth Tax liabilities.
Inheritance and Gift Tax (Impuesto sobre Sucesiones y Donaciones)
Individuals who are resident in Spain for tax purposes who acquire ownership or other rights over any
Notes by inheritance, gift or legacy will be subject to IGT in accordance with the applicable Spanish
regional and state rules. The applicable tax rates range between 7.65% and 81.6% depending on relevant
factors.
Legal entities with tax residency in Spain
Corporate Income Tax (Impuesto sobre Sociedades)
Both interest periodically received and income derived from the transfer, redemption or repayment of the
Notes are subject to CIT (at the current general tax rate of 28% which will be reduced to 25% in
year 2016 onwards) in accordance with the rules for such tax.
No withholding on account of CIT will be imposed on interest payments or on income derived from the
redemption or repayment of the Notes by Spanish CIT taxpayers subject to the fulfilment of the relevant
- 65-
requirements, as described in "Compliance with certain requirements in connection with income
payments" section below.
With regard to income derived from the transfer of the Notes, in accordance with article 61.q) of the CIT
Regulations, there is no obligation to withhold on income obtained by Spanish CIT taxpayers (which
include Spanish tax resident investment funds and Spanish tax resident pension funds) provided that the
Notes are:
(a)
registered in book-entry form (anotaciones en cuenta); and
(b)
negotiated in a Spanish official secondary market (mercado secundario official), such as AIAF or
in the Alternative Fixed-Income Securities Market (Mercado Alternativo de Renta Fija).
Wealth Tax (Impuesto sobre el Patrimonio)
Legal entities resident in Spain for tax purposes that acquire ownership or other rights over the Notes are
not subject to Wealth Tax.
Inheritance and Gift Tax (Impuesto sobre Sucesiones y Donaciones)
Legal entities resident in Spain for tax purposes that acquire ownership or other rights over the Notes by
inheritance, gift or legacy are not subject to IGT but generally must include the market value of the Notes
in their taxable income for CIT purposes.
Individuals and legal entities that are not tax resident in Spain
1.
Investors that are not resident in Spain for tax purposes, acting in respect of the notes through a
permanent establishment in Spain
Non-Resident Income Tax (Impuesto sobre la Renta de no Residentes)
If the Notes form part of the assets affected to a permanent establishment in Spain of a person or legal
entity that is not resident in Spain for tax purposes, the tax rules applicable to income deriving from such
Notes are, generally, the same as those set forth above for Spanish CIT taxpayers. See "Legal entities with
tax residency in Spain – Corporate Income Tax (Impuesto sobre Sociedades)" section above.
Ownership of the Notes by investors who are not resident in Spain for tax purposes will not in itself create
the existence of a permanent establishment in Spain.
Wealth Tax (Impuesto sobre el Patrimonio)
If the Notes form part of the assets affected to a permanent establishment in Spain of a person or legal
entity that is not resident in Spain for tax purposes, Wealth Tax will not become applicable.
Inheritance and Gift Tax (Impuesto sobre Sucesiones y Donaciones)
If the Notes form part of the assets affected to a permanent establishment in Spain of a person or legal
entity that is not resident in Spain for tax purposes, IGT will apply in the same manner as described in
"Legal entities with tax residency in Spain – Inheritance and Gift Tax (Impuesto sobre Sucesiones y
Donaciones)" section above.
2.
Investors that are not resident in Spain for tax purposes, not acting in respect of the Notes
through a permanent establishment in Spain
Non-Resident Income Tax (Impuesto sobre la Renta de no Residentes)
Both interest payments periodically received under the Notes and income derived from the transfer,
redemption or repayment of the Notes, obtained by individuals or entities who are not resident in Spain
for tax purposes and who do not act, with respect to the Notes, through a permanent establishment in
Spain, are exempt from NRIT. No withholding on account of NRIT will be levied on such income subject
to the fulfilment of the relevant requirements, as described in "Compliance with certain requirements in
connection with income payments" section below.
- 66-
Wealth Tax (Impuesto sobre el Patrimonio)
In relation to fiscal year 2015, non-Spanish tax resident individuals holding Notes will be subject to
Wealth Tax to the extent that such Noteholders own Notes (along with other property located in Spain
and rights which could be exercised in Spain) valued at a combined net amount in excess of €700,000 as
of 31 December. Spanish Wealth Tax rates vary between 0.2% and 2.5%. To the extent that income
deriving from the Notes is exempt from NRIT, individuals who do not have tax residency in Spain who
hold such Notes on the last day of the year will be exempt from Wealth Tax. Furthermore, individuals
resident in a country with which Spain has entered into a double tax treaty in relation to Wealth Tax will
generally be exempt from Wealth Tax. If the exemptions outlined do not apply, individuals who are not
tax residents in Spain will be subject to Wealth Tax to the extent that the Notes are located in Spain or the
rights deriving from the Notes can be exercised in Spain.
Inheritance and Gift Tax (Impuesto sobre Sucesiones y Donaciones)
Individuals not resident in Spain for tax purposes who acquire ownership or other rights over the Notes by
inheritance, gift or legacy will be subject to IGT in accordance with the applicable Spanish state rules
(EU individuals not resident in Spain for tax purposes are expected to apply regional rules), unless they
reside in a country for tax purposes with which Spain has entered into a double tax treaty in relation to
IGT. In such case, the provisions of the relevant double tax treaty will apply.
If no double tax treaty in relation to IGT applies, applicable IGT rates would range between 7.65%
and 81.6% , depending on relevant factors.
Non-Spanish tax resident legal entities that acquire ownership or other rights over the Notes by
inheritance, gift or legacy are not subject to IGT. Such acquisitions may be subject to NRIT (as described
above), unless otherwise applicable under the provisions of any applicable double tax treaty entered into
by Spain. In general, double tax treaties provide for the taxation of this type of income in the country of
tax residence of the Noteholder.
Compliance with certain requirements in connection with income payments
Interest payments made by the Issuer in respect of the Notes for the benefit of Spanish CIT taxpayers and
non-Spanish tax resident investors will not be subject to Spanish withholding tax, provided that the
conditions set forth in Additional Provision One of Law 10/2014 are met and the Iberclear Members that
have the Notes registered in their securities account on behalf of third parties, as well as the entities that
manage the clearing systems located outside Spain that have an agreement with Iberclear, if applicable,
provide the Issuer, in a timely manner, with a duly executed and completed statement (a "Payment
Statement"), in accordance with section 4 of article 44 of Royal Decree 1065/2007, dated 27 July 2007,
as amended by Royal Decree 1145/2011, dated 29 July 2011, containing the following information:
1.
Identification of the Notes.
2.
Date of payment.
3.
Total amount of the income paid by the Issuer.
4.
Amount of the income corresponding to individual residents in Spain that are PIT taxpayers.
5.
Amount of the income that must be paid on a gross basis.
If the Iberclear Members fail or for any reason are unable to deliver a duly executed and completed
Payment Statement to the Issuer in a timely manner in respect of a payment of interest made by the Issuer
under the Notes, the Issuer will make the relevant Spanish withholding tax at the applicable rate of 19.5%
(19% as from 1 January 2016 onwards) on such payment of interest and the Issuer will not pay any
additional amounts with respect to any such withholding tax.
If this were to occur, affected Noteholders will receive a refund of the amount withheld, with no need for
action on their part, if the Iberclear Members submit a duly executed and completed Payment Statement
to the Issuer no later than the tenth calendar day of the month immediately following the relevant
payment date. In addition, Noteholders which are not resident in Spain for tax purposes may apply
- 67-
directly to the Spanish tax authorities for any refund to which they may be entitled, according to the
procedures set forth in the Spanish NRIT Law and its Regulations.
Prospective investors should note that the Issuer does not accept any responsibility relating to the lack
of delivery of a duly executed and completed Payment Statement by the Iberclear Members in
connection with each payment of income under the Notes. Accordingly, the Issuer will not be liable for
any damage or loss suffered by any Noteholder who would otherwise be entitled to an exemption from
Spanish withholding tax but whose income payments are nonetheless paid net of Spanish withholding
tax because the Payment Statement was not duly delivered to the Issuer. Moreover, the Issuer will not
pay any additional amounts with respect to any such withholding tax.
EU Savings Tax Directive
Under EC Council Directive 2003/48/EC on the taxation of savings income, each Member State is
required to provide to the tax authorities of another Member State details of payments of interest or other
similar income paid by a person within its jurisdiction to, or collected by such a person for, an individual
resident or certain limited types of entity established in that other Member State; however, for a
transitional period, Austria may instead apply a withholding system in relation to such payments,
deducting tax at rates rising over time to 35%. The transitional period is to terminate at the end of the first
full fiscal year following agreement by certain non-EU countries to the exchange of information relating
to such payments.
A number of non-EU countries have adopted similar measures (either provision of information or
transitional withholding) in relation to payments made by a person within its jurisdiction to, or collected
by such a person for, an individual resident or, certain limited types of entity established in a Member
State. In addition, the Member States have entered into provision of information or transitional
withholding arrangements with certain of those dependent or associated territories in relation to payments
made by a person in a Member State to, or collected by such a person for, an individual resident or certain
limited types of entity established in one of those territories.
The Council of the European Union formally adopted a Council Directive amending the Directive on 24
March 2014 (the "Amending Directive"). The Amending Directive broadens the scope of the
requirements described above. Member States have until 1 January 2016 to adopt the national legislation
necessary to comply with the Amending Directive. The changes made under the Amending Directive
include extending the scope of the Directive to payments made to, or collected for, certain other entities
and legal arrangements. They also broaden the definition of "interest payment" to cover income that is
equivalent to interest.
Investors who are in any doubt as to their position should consult their professional advisers.
However, the European Commission has proposed the repeal of the Savings Directive from 1
January 2017 in the case of Austria and from 1 January 2016 in the case of all other Member States
(subject to on-going requirements to fulfil administrative obligations such as the reporting and exchange
of information relating to, and accounting for withholding taxes on, payments made before those dates).
This is to prevent overlap between the Savings Directive and a new automatic exchange of information
regime to be implemented under Council Directive 2011/16/EU on Administrative Cooperation in the
field of Taxation (as amended by Council Directive 2014/107/EU). The proposal also provides that, if it
proceeds, Member States will not be required to apply the new requirements of the Amending Directive.
The proposed financial transactions tax ("FTT")
On 14 February 2013, the European Commission published a proposal (the "Commission's proposal")
for a Directive for a common FTT in Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria,
Portugal, Slovenia and Slovakia (the "participating Member States").
The Commission's proposal has very broad scope and could, if introduced, apply to certain dealings in
Notes (including secondary' market transactions) in certain circumstances.
Under the Commission's proposal, FTT could apply in certain circumstances to persons both within and
outside of the participating Member States. Generally, it would apply to certain dealings in the Notes
where at least one party is a financial institution, and at least one party is established in a participating
Member State. A financial institution may be, or be deemed to be, "established" in a participating
- 68-
Member State in a broad range of circumstances, including (a) by transacting with a person established in
a participating Member State or (b) where the financial instrument which is subject to the dealings is
issued in a participating Member State.
Joint statements issued by participating Member States indicate an intention to implement the FTT
by 1 January 2016. However, the Commission's proposal remains subject to negotiation between the
participating Member States and the scope of any such tax is uncertain. Additional EU Member States
may decide to participate.
Prospective holders of the Notes are advised to seek their own professional advice in relation to the FTT.
FATCA
Whilst the Notes are cleared through Iberclear, it is expected that FATCA will not affect the amount of
any payments made under, or in respect of, the Notes by the Issuer, given that each of the entities in the
payment chain between the Issuer and the participants in Iberclear is a major financial institution whose
business is dependent on compliance with FATCA and that any alternative approach introduced under an
intergovernmental agreement will be unlikely to affect the Notes.
- 69-
SUBSCRIPTION AND SALE
Barclays Bank PLC ("Structuring Bank"), Banco Bilbao Vizcaya Argentaria, S.A., J.P. Morgan
Securities plc and UBS Limited (together with the Structuring Bank, the "Lead Managers") have, in a
subscription agreement dated 23 July 2015 (the "Subscription Agreement") and made between the
Issuer and the Lead Managers upon the terms and subject to the conditions contained therein, jointly and
severally agreed to subscribe for the Notes. The Issuer has agreed to pay certain commissions to the Lead
Managers and to reimburse the Structuring Bank, on behalf of the Lead Managers, for certain of its
expenses incurred in connection with the management of the issue of the Notes. The Lead Managers are
entitled in certain circumstances to be released and discharged from their obligations under the
Subscription Agreement prior to the closing of the issue of the Notes.
United Kingdom
Each Lead Manager has further represented, warranted and undertaken that:
(a)
it has only communicated or caused to be communicated and will only communicate or cause to
be communicated an invitation or inducement to engage in investment activity (within the
meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the
Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer; and
(b)
it has complied and will comply with all applicable provisions of the FSMA with respect to
anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom.
United States of America
The Notes have not been and will not be registered under the Securities Act and are subject to U.S. tax
law requirements. Subject to certain exceptions, the Notes may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons. Each of the Lead Managers has agreed that,
except as permitted by the Subscription Agreement, it will not offer, sell or deliver the Notes within the
United States or to, or for the account or benefit of, U.S. persons. In addition, until 40 days after
commencement of the offering, an offer or sale of the Notes within the United States by a dealer whether
or not participating in the offering may violate the registration requirements of the Securities Act.
General
Each Lead Manager has agreed that it will (to the best of its knowledge and belief) comply with all
applicable securities laws and regulations in force in any jurisdiction in which it purchases, offers, sells or
delivers Notes or possesses or distributes this Prospectus and will obtain any consent, approval or
permission required by it for the purchase, offer, sale or delivery by it of Notes under the laws and
regulations in force in any jurisdiction to which it is subject or in which it makes such purchases, offers,
sales or deliveries and neither the Issuer nor any of the other Lead Managers shall have any responsibility
therefor.
None of the Issuer and the Lead Managers represents that Notes may at any time lawfully be sold in
compliance with any applicable registration or other requirements in any jurisdiction, or pursuant to any
exemption available thereunder, or assumes any responsibility for facilitating such sale.
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GENERAL INFORMATION
Authorisation
1.
The creation and issue of the Notes has been authorised by a resolution of the general
shareholders' meeting of the Issuer dated 10 March 2015 and of the board of directors of the
Issuer dated 10 March 2015.
Key information. Interest of natural and legal persons involved in the issue
2.
Save for any fees payable to the Lead Managers, so far as the Issuer is aware, no person involved
in the issue of the Notes has an interest material to the offer. The Lead Managers and their
affiliates have engaged, and may in the future engage, in investment banking and/or commercial
banking transactions with, and may perform other services for, the Issuer and its affiliates in the
ordinary course of business.
Legal and Arbitration Proceedings
3.
There are no governmental, legal or arbitration proceedings, (including any such proceedings
which are pending or threatened, of which the Issuer is aware), which may have, or have had
during the 12 months prior to the date of this Prospectus, a significant effect on the financial
position or profitability of the Issuer.
Significant/Material Change
4.1
Since 31 March 2015 there has been no material adverse change in the financial or trading
position of the Issuer.
4.2
In addition to the above, since 31 March 2015 there has been no material change in the financial
or trading position of the Issuer except for the sale of a portfolio of credits not secured with in
rem security to Reeftown Investments, S.L.U. for Euro 210 million, which represented a gross
capital gain of Euro 9.6 million. This portfolio was completely provisioned.
Trend Information
5.1
Since 31 March 2015 there has been no material change in the prospects of the Issuer.
5.2
The section Risk Factors – Risks relating to the Issuer of this Prospectus includes a detailed
description of the factors and uncertainties which could have a material effect on the Issuer's
prospects.
Auditors
6.
The consolidated annual accounts of the Issuer have been audited without qualification for the
years ended 31 December 2014 and 31 December 2013 by PricewaterhouseCoopers
Auditores, S.L., independent accountants. PricewaterhouseCoopers Auditores, S.L. office is in
Paseo de la Constitución 4, 7ª planta 50008 Zaragoza (Spain) and is registered in the Official
Registry for Account Auditors (Registro Oficial de Auditores de Cuentas (ROAC)) with
number S0242.
Documents on Display
7.
Copies of the following documents (together with English translations thereof) may be inspected
during normal business hours at the offices of Ibercaja Banco S.A. at Plaza Basilio Paraiso No. 2,
in Zaragoza (Spain), for 12 months from the date of this Prospectus:
(a)
the Bylaws (estatutos) and the deed of incorporation of the Issuer;
(b)
the Deed of Covenant; and
(c)
the audited consolidated annual accounts of the Issuer for each of the years ended 31
December 2014 and 31 December 2013.
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In addition, the audited consolidated annual accounts of the Issuer for the years ended 31
December 2014 and 31 December 2013 are available at the Issuer's website
(http://www.ibercaja.es/informacionInversores/informes-anuales) and the CNMV's website
(www.cnmv.es). The Bylaws (estatutos) of the Issuer are also available at the Issuer's website
(http://www.ibercaja.es/informacionEntidad/estatutos-y-reglamentos).
Material Contracts
8.
There are no material contracts which could result in any member of the Group being under an
obligation that is material to the Issuer's ability to meet its obligations to holders of the Notes.
Yield
9.
On the basis of the issue price of the Notes of 100 per cent. of their principal amount and on the
assumption that the Notes will be called on the Reset Date, the gross real yield of the Notes
(assuming an inflation rate of 1.000 per cent.) is 4.000 per cent. on an annual basis.).
Notwithstanding the above mentioned assumptions, there is no assurance as to whether or not the
Notes will be actually called on the Reset Date. Therefore the yield realised by subscribers may
be different. If the notes were not called on the Reset Date but were redeemed at maturity,
assuming a rate of Interest of 5.000 per cent. per annum for the Reset Period (and an inflation
rate of 1.000 per cent.), the gross real yield of the Notes would be 4.000 per cent.
Listing of Notes
10.
This Prospectus has been registered with the CNMV in its capacity as competent authority under
the LMV and relevant implementing rules and regulations in Spain. Application will be made for
the Notes to be admitted to trading on AIAF within 30 days of the Closing Date.
Expenses related to the admission to trading
11.
For informative purposes only, an approximate estimate of the expenses payable by Ibercaja
Banco in relation to the admission to trading is as follows:
Type of expense
euro (estimated amount)
Charges and fees of AIAF and Iberclear
25,500
CNMV fees (listing)
50,000
Other (rating agencies, legal advisors, auditor, syndicate of noteholders)
1,000,000
TOTAL
1,075,500
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SIGNATURES
In witness to their knowledge and approval of the contents of this Prospectus drawn up according to
Annexes XI and XIII of Commission Regulation (EC) No. 809/2004 of 29 April 2004, it is hereby signed
by the Chief Executive Officer of Ibercaja Banco, in Zaragoza, this 27th day of July 2015.
___________________________
Mr. Víctor Manuel Iglesias Ruíz
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ISSUER
Ibercaja Banco, S.A.
Plaza Basilio Paraiso No. 2
50008 Zaragoza
Spain
STRUCTURING BANK AND LEAD MANAGER
Barclays Bank PLC
5 The North Colonnade
Canary Wharf
London
E14 4BB
United Kingdom
LEAD MANAGERS
Banco Bilbao Vizcaya Argentaria, S.A.
Calle Sauceda, 28
Edificio Asia
28050 Madrid
Spain
J.P. Morgan Securities plc
25 Bank Street
Canary Wharf
London E14 5JP
United Kingdom
UBS Limited
1 Finsbury Avenue
London EC2M 2PP
United Kingdom
LEGAL ADVISERS
To the Issuer as to English and Spanish law:
Clifford Chance, S.L.
Paseo de la Castellana, 110
28046 Madrid
Spain
To the Lead Managers as to English and Spanish law:
Allen & Overy
Pedro de Valdivia, 10
28006 Madrid
Spain
AUDITORS TO THE ISSUER
PricewaterhouseCoopers Auditores, S.L.
Paseo de la Constitución 4, 7ª planta
50008 Zaragoza
Spain
COMMISSIONER
Bondholders, S.L.
Avenida de Francia 17, A1
Valencia 46023
Spain
www.bondholders.com
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