EUR 3000000000 debt issuance programme, 10 ... - Volksbank AG

2.2 The Compartment Assets
In order to ensure that it will be able to fulfil its obligations under the Conditions, the Issuer will use the
proceeds of the sale of the Securities issued through an individual Compartment to purchase the Main
Compartment Assets of that Compartment, and, if applicable, enter one or more Derivative Agreements.
Whereas the obligation of the Issuer to make payments in respect of the Securities shall be limited to funds
being available to the Issuer originating from the Compartment Assets, the Issuer will seek to ascertain that
all types of Compartment Assets used shall have characteristics that demonstrate capacity to produce funds
to service any payments due and payable on the Securities. If so specified in the Final Terms, the Issuer
will reserve the right to substitute, in its reasonable discretion, Compartment Assets from time to time by
substitute Compartment Assets. Unless otherwise specified in the Final Terms, the level of collateralisation
of the Issuer's obligations under Securities represented by the Compartment Assets of one Compartment
shall be at least 100%.
The Main Compartment Assets may take the form of one or more debt instruments (the “Debt Instrument”
or “Instruments”), one or more equity instruments (the “Equity Instruments”) or one or more fund instruments
(the “Fund Instruments”).
Debt Instruments may take the form of either a senior or subordinated bonds (i.e. "Subordinated Notes",
"Supplementary Capital Notes" or "Subordinated Supplementary Capital Notes") a debenture, a money-market
instrument, a bank deposit (i.e., a receivable due from a bank in respect of a deposit of money, not certificated
by any bearer or registered security) or any other interest bearing or non-interest bearing financial
instrument, or any combination thereof.
Equity Instruments may take the form of either shares, share-like transferable instruments, other instruments
which represent one or more, or may be converted into or swapped for shares or such instruments
which provide for a different method by which shares or other, transferable share-like instruments, could be
acquired or subscribed, or any combination thereof.
Fund Instruments may take the form of fund units each representing a right of co-ownership or similar interest
in respect of a pool of assets.
The Derivative Agreements will provide for the exchange of payments between the Issuer and the Derivative
Counterparty, at such times and in such amounts as provided in each Derivative Agreement. Amounts
payable by each party to the other party will be calculated by reference to a notional amount, and will be
expressed as such notional reference amount, multiplied by a certain rate of interest, index amount or (as
the case may be) asset price, or in absolute terms, whereby payments may, in addition, be conditional upon
the occurrence of certain events agreed in the Derivative Agreement. Each Derivative Agreement will be
designed so as to provide the Issuer with those funds which the Issuer will require to make payments under
the Securities, to the extent that such funds will not be provided to the Issuer through the Main Compartment
Assets, under the terms of such Main Compartment Assets.
The following may serve as examples only, of potential Compartment Assets to be used in respect of a
Series of Securities, whereby in each case, the relevant Conditions would mirror the structure of such Compartment
Assets, provided that each of the following descriptions would be subject to the detailed provisions
contained in the relevant Conditions (for specific features and characteristics of Main Compartment
Assets, see “2.5 – General description of the Main Compartment Assets” and provided further, for the
avoidance of doubt, that the following descriptions are provided by way of example only and Securities
other than those described below may be issued by the Issuer under the Debt Issuance Programme. Derivative
Agreements are described under “2.6 – Description of the Derivative Agreements”):
- Example A – The Compartment Assets are constituted by a Debt Instrument and a Derivative Agreement
entitling the Issuer to receive the increase (if any) in the price of a Reference Asset: By way of example
(and subject to the relevant Final Terms), 90% of the net proceeds of the Issuance of Securities from a
Compartment of the Issuer (after deduction of any costs and expenses payable by such Compartment) might
be used to purchase a Debt Instrument in the form of a bond issued by VBAG or another obligor of the
Debt Instrument (the “Obligor of the Debt Instrument”). Under the terms of the Debt Instrument, the Is-
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