VALLAURIS II CLO PLC - Irish Stock Exchange

Investment Tax Act (the ‘‘Investment Tax Act Reporting Requirements’’) such adverse impact on the
position of the Noteholder could be mitigated. However, the Issuer has made no arrangements to
comply with these Investment Tax Act Reporting Requirements and has no intention of making such
arrangements. Consequently, if the German Tax authorities apply the Investment Tax Act in respect
of any one or more Classes of Notes, any Noteholders Subject to the Investment Tax Act will be
subject to the Investment Tax Act’s adverse lump-sum taxation.
Prospective Noteholders who are German tax residents, investors holding Notes through a
German permanent establishment (or a German permanent representative) and investors presenting
Notes at the office of a German credit institution or financial services institution (each as defined in
the German Banking Act) are, therefore, urged to consult their tax advisers on this matter as to (i)
whether the relevant Notes are within the scope of the Investment Tax Act, and, in particular,
whether the relevant Notes are exempt under the Decree, and (ii) the legal and tax consequences that
may arise from the possible application of the Investment Tax Act to the relevant Notes.
There are other German tax considerations relevant to Noteholders. For further details relating
to the risks outlined above and further German tax considerations, this section should be carefully
read in conjunction with the section entitled ‘‘Tax Considerations-German Taxation’’.
11. Withholding Tax on the Notes
As described in more detail under ‘‘Tax Considerations – 2. Irish Taxation – Withholding Tax’’
below, in general, tax at the standard rate of income tax (currently 20 per cent.) is required to be
withheld from payments of Irish source interest, save where the ‘‘quoted eurobond’’ exemption (or
another exemption) is available (subject to certain circumstances where Irish withholding tax will
nevertheless remain payable as detailed in the above-referenced section of this document). The
requirements of the ‘‘quoted eurobond’’ exemption to apply in respect of an issue of securities are
broadly that such securities (‘‘quoted eurobonds’’) are (1) issued by a body corporate, (2) interest
bearing and (3) quoted on a recognised stock exchange.
It is expected that upon issue of the Notes on the Closing Date, each of the three requirements
of the ‘‘quoted eurobond’’ exemption will be satisfied, since (1) the Issuer is a body corporate, (2) the
Notes are interest bearing and (3) the Notes are expected on issue to be admitted to listing and
trading on the Irish Stock Exchange. However, subsequent changes in the Notes could result in the
‘‘quoted Eurobond’’ exemption no longer being available, and this triggering Irish withholding tax
(subject as discussed in ‘‘Tax Considerations – 2. Irish Taxation – Withholding Tax’’ below). For
example, the ‘‘quoted eurobond’’ exemption would no longer be available if the Notes were no longer
admitted to listing and trading on a recognised stock exchange.
In the event that the ‘‘quoted eurobond’’ exemption was to become no longer available and the
Issuer was consequently required to pay withholding tax on the Notes (subject as discussed in ‘‘Tax
Considerations – 2. Irish Taxation – Withholding Tax’’ below): (1) the Issuer would not be required
to ‘‘gross up’’ any payments made to the Noteholders to compensate for such withholding and the
Issuer would not be obliged to change its jurisdiction of tax residence pursuant to Condition 9
(Taxation), (2) such payment of Irish withholding tax on the Notes in such circumstances would not
be a ‘‘Relevant Tax Event’’ under Condition 7(i) (Redemption at the Option of the Subordinated
Noteholders) and would not be an Event of Default under Condition 10 (Events of Default) in and of
itself. See ‘‘Tax Considerations – 2. Irish Taxation – Withholding Tax’’ below.
12. Book-Entry Interests
As described in more detail in ‘‘Form of the Notes – 1. Initial Issue’’ below, at Closing the
Global Notes will be issued to and held by the Depositary which, in turn, will issue Certificated
Depositary Interests (‘‘CDIs’’) representing such Global Notes to the clearing systems in order to be
held by the ultimate purchasers hereunder. Unless and until Definitive Certificates are issued in
exchange for the Global Notes (which Global Notes are represented by CDIs), holders and beneficial
owners of CDIs will not be considered the legal owners or holders of Notes under the Trust Deed
with regard to payment. After payment to the Depositary in full of all payments due and payable in
respect of the Notes, the Issuer will have no responsibility or liability for the payment of interest,
principal or other amounts to the Common Depositary or to holders or beneficial owners of CDIs.
50