Espírito Santo Investment p.l.c. Banco Espírito Santo de ... - BES

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BESI may redeem the Undated Deeply Subordinated Notes before the fifth anniversary of the issue date thereof and at any time, in whole (but not in part) if: (i) as a result of any change in law or regulations, or any change in the application or official interpretation thereof, the proceeds of the Undated Deeply Subordinated Notes cease to be eligible as Tier 1 Capital (Fundos próprios de base (“original own funds” or “Tier 1 Capital”) for BESI,; or (ii) certain tax events as further described in Condition 7 (Redemption and Purchase) take place, in both cases provided that the prior approval of the Bank of Portugal has been obtained. Any redemption of the Undated Deeply Subordinated Notes will be subject to Condition 7 of the Undated Deeply Subordinated Notes (Redemption and Purchase) and to the prior approval of the Bank of Portugal. Indexed Notes and Dual Currency Notes An Issuer may issue Notes with principal or interest determined by reference to an index or formula, to changes in the prices of securities or commodities, to movements in currency exchange rates or other factors (each, a Relevant Factor). In addition, an Issuer may issue Notes with principal or interest payable in one or more currencies which may be different from the currency in which the Notes are denominated. Potential investors should be aware that: (i) (ii) (iii) (iv) (v) (vi) the market price of such Notes may be volatile; they may receive no interest; payment of principal or interest may occur at a different time or in a different currency than expected; they may lose all or a substantial portion of their principal; a Relevant Factor may be subject to significant fluctuations that may not correlate with changes in interest rates, currencies or other indices; if a Relevant Factor is applied to Notes in conjunction with a multiplier greater than one or contains some other leverage factor, the effect of changes in the Relevant Factor on principal or interest payable likely will be magnified; and (vii) the timing of changes in a Relevant Factor may affect the actual yield to investors, even if the average level is consistent with their expectations. In general, the earlier the change in the Relevant Factor, the greater the effect on yield. The historical experience of an index should not be viewed as an indication of the future performance of such index during the term of any Indexed Notes. Accordingly, each potential investor should consult its own financial and legal advisers about the risk entailed by an investment in any Indexed Notes and the suitability of such Notes in light of its particular circumstances. Credit Linked Notes Country and Regional Risk The price and value of the Reference Obligations (as defined in the applicable Final Terms) may be influenced by the political, financial and economic stability of the country and/or region in which the Reference Entities (as defined in the applicable Final Terms) are incorporated or have their principal place of business or of the country in the currency of which the obligations under the Notes are denominated. In certain cases the price and value of assets originating from countries not ordinarily considered to be emerging markets countries may behave in a manner similar to those of assets originating from emerging markets countries. Emerging Markets The Reference Entities and the Reference Obligations may originate from an emerging markets country. Investing in securities issued by entities in emerging markets countries or in securities, the return of which is linked to such securities, involves certain systemic and other risks and special considerations which include: (i) the prices of emerging markets assets may be subject to sharp and sudden fluctuations and declines; (ii) (iii) emerging markets securities and other assets tend to be relatively illiquid. Trading volume may be lower than in debt of higher grade credits. This may result in wide bid/offer spreads prevailing in adverse market conditions. In addition, the sale or purchase price quoted for the Reference Obligations may vary depending on the size of the holding for which a quotation is sought; and published information in or in respect of emerging markets countries and the issuers of or obligors in respect of emerging markets securities or other assets has been proven on occasions to be materially inaccurate; and 20
(iv) delivery of Reference Obligations which are emerging markets securities or other assets may be subject to restrictions or delays arising under local law. Partly-paid Notes An Issuer may issue Notes where the issue price is payable in more than one instalment. Failure to pay any subsequent instalment could result in an investor losing all of his investment. Variable rate Notes with a multiplier or other leverage factor Notes with variable interest rates can be volatile investments. If they are structured to include multipliers or other leverage factors, or caps or floors, or any combination of those features or other similar related features, their market values may be even more volatile than those for securities that do not include those features. Inverse Floating Rate Notes Inverse Floating Rate Notes have an interest rate equal to a fixed rate minus a rate based upon a reference rate such as LIBOR. The market values of those Notes typically are more volatile than market values of other conventional floating rate debt securities based on the same reference rate (and with otherwise comparable terms). Inverse Floating Rate Notes are more volatile because an increase in the reference rate not only decreases the interest rate of the Notes, but may also reflect an increase in prevailing interest rates, which further adversely affects the market value of these Notes. Fixed/Floating Rate Notes Fixed/Floating Rate Notes may bear interest at a rate that converts from a fixed rate to a floating rate, or from a floating rate to a fixed rate. Where an Issuer has the right to effect such a conversion, this will affect the secondary market and the market value of the Notes since the relevant Issuer may be expected to convert the rate when it is likely to produce a lower overall cost of borrowing. If the relevant Issuer converts from a fixed rate to a floating rate in such circumstances, the spread on the Fixed/Floating Rate Notes may be less favourable than then prevailing spreads on comparable Floating Rate Notes tied to the same reference rate. In addition, the new floating rate at any time may be lower than the rates on other Notes. If the relevant Issuer converts from a floating rate to a fixed rate in such circumstances, the fixed rate may be lower than then prevailing rates on its Notes. BESI may decide not to pay interest on the Undated Deeply Subordinated Notes or be required by the terms of the Undated Deeply Subordinated Notes not to pay such interest. BESI may elect, and in certain circumstances shall be required, not to pay interest falling due on the Undated Deeply Subordinated Notes on any Interest Payment Date. The holder of Undated Deeply Subordinated Notes will only be entitled to receive payments in respect of interest under the Undated Deeply Subordinated Notes on a given Interest Payment Date if the Executive Committee of BESI so decides in its absolute discretion, subject to the provisions in respect of an “Interest Cancellation Event”. Any interest not so paid on any such Interest Payment Date shall be forfeited and shall no longer be due and payable by BESI. See Condition 5 of the Undated Deeply Subordinated Notes (Interest and Interest Cancellation). In addition, in certain circumstances, payment of interest will be suspended automatically upon the occurrence of an Interest Cancellation Event. See Condition 5 of the Undated Deeply Subordinated Notes (Interest and Interest Cancellation). It is possible that in certain circumstances, external authorities may require BESI to suspend payments of interest in circumstances which are not covered by the Terms and Conditions of the Undated Deeply Subordinated Notes. Under the Terms and Conditions of the Undated Deeply Subordinated Notes, in case the Executive Committee of BESI decides not to pay interest on a given Interest Payment Date, or if the conditions specified in Condition 5 (d)(i) of the Undated Deeply Subordinated Notes are not met regarding Distributable Funds, compliance by BESI with the Own Funds Requirements Regulations is not ensured, interest will not accrue and will not become due and payable in respect of such Interest Payment Date. The possibility that no interest payments are made on a given Interest Payment Date may adversely affect the market value of the Undated Deeply Subordinated Notes. The Undated Deeply Subordinated Notes are deeply subordinated obligations and will be subordinated to all BESI's existing and future indebtedness. The Undated Deeply Subordinated Notes are by their terms deeply subordinated in right of payment to all current and future unsubordinated and ordinarily subordinated indebtedness of BESI issued by it. If any judgment is 21
Page 1 and 2: OFFERING CIRCULAR Espírito Santo I
Page 3 and 4: The relevant Issuer may agree with
Page 5 and 6: Notes may only do so (i) in circums
Page 7 and 8: TABLE OF CONTENTS Page Summary of t
Page 9 and 10: Terms of Notes: Taxation: Negative
Page 11 and 12: Status of the Dated Subordinated No
Page 13 and 14: OVERVIEW OF THE PROGRAMME The follo
Page 15 and 16: Fixed Rate Notes: Floating Rate Not
Page 17 and 18: RISK FACTORS Each of ESIP and BESI
Page 19: Emerging Market Risks As at 31 Dece
Page 23 and 24: cease to be eligible as Tier 1 Capi
Page 25 and 26: held through Interbolsa, and (i) if
Page 27 and 28: (iii) (iv) verify the consistency o
Page 29 and 30: GENERAL DESCRIPTION OF THE PROGRAMM
Page 31 and 32: “ANY UNITED STATES PERSON WHO HOL
Page 33 and 34: APPLICABLE FINAL TERMS Set out belo
Page 35 and 36: 1. Issuer: [Espírito Santo Investm
Page 37 and 38: - Relevant Screen Page: 37 (Second
Page 39 and 40: (ii) Optional Redemption Amount(s)
Page 41 and 42: PURPOSE OF FINAL TERMS These Final
Page 43 and 44: net proceeds and total expenses at
Page 45 and 46: APPLICABLE FINAL TERMS Set out belo
Page 47 and 48: 10. Redemption/Payment Basis: [Rede
Page 49 and 50: (N.B. If the Final Redemption Amoun
Page 51 and 52: Furthermore, such Specified Denomin
Page 53 and 54: PART B - OTHER INFORMATION 1. LISTI
Page 55 and 56: 8. OPERATIONAL INFORMATION (i) ISIN
Page 57 and 58: epresentative of the holders of Int
Page 59 and 60: The Interbolsa Notes will be regist
Page 61 and 62: (ii) The claims of the holders of t
Page 63 and 64: (b) with normal market practice and
Page 65 and 66: mutatis mutandis or (ii) in the cas
Page 67 and 68: and, in each case, multiplying such
Page 69 and 70: (vii) Certificates to be Final All
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(c) Payments in respect of Global N
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(v) (vi) in relation to Notes redee
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(i) (ii) (iii) (iv) in the case of
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(ix) (x) (xi) presented for payment
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(ii) (iii) (iv) (v) (vi) there is d
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(i) If default is made in the payme
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and Interbolsa's rules on notices t
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Matters in the discretion of the Ag
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TERMS AND CONDITIONS OF THE UNDATED
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1. Form, Denomination and Title The
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ut upon payment of any tax or other
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(a) Interest on Fixed Rate Notes Ea
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(2) the Following Business Day Conv
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Where the Specified Denomination of
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(except in respect of Interbolsa No
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of such Specified Currency (which,
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(i) (ii) (iii) the Issuer has appoi
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of the Bank of Portugal satisfies a
Page 107 and 108:
any authority thereof or therein ha
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10. Events of Default relating to U
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In connection with the exercise by
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The Issuer has in the Trust Deed ir
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SELECTED FINANCIAL INFORMATION FOR
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SELECTED FINANCIAL INFORMATION FOR
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ESSI, Sociedade Gestora de Particip
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Capital Markets - Equity, Fixed Inc
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BESI is also active in the Brazilia
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Brazil Espírito Santo Investment c
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International operations As a resul
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José Maria Espírito Santo Silva R
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Pedro Manuel de Castro Simões Ferr
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Diogo Luís Ramos de Abreu Félix A
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António Espírito Santo Silva Salg
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Moses Dodo Phillipe Gilles Fernand
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Moses Dodo Executive Board Member,
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For the purposes of this clause 4:
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DESCRIPTION OF THE PORTUGUESE BANKI
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Banking Regulation in Portugal Summ
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TAXATION IRISH TAXATION The followi
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Irish Source Income Holders of Iris
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The Directive has been enacted into
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(ii) authenticated, if the Benefici
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addresses U.S. Holders (as defined
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not have OID if such excess is less
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amount of the redemption price (or
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(iv) in the case of Registered Note
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establish a basis for exemption or
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SUBSCRIPTION AND SALE The Dealers h
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provided that no such offer of Note
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(3) Such Notes, unless the Issuer d
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(6) It agrees that it will give to
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GENERAL INFORMATION Authorisation T
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Auditors for each of the two years
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3. We hereby undertake to provide t
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ANNEX 2 STATEMENT FOR EXEMPTION FRO
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REGISTERED OFFICE OF ESIP Espírito
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To BESI as to Portuguese law Vieira
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