Base Prospectus - Malta Financial Services Authority

than the market prices of other debt securities on which original issue discount or interest accrues
that are not subject to such deferrals and may be more sensitive generally to adverse changes in
the Issuer’s financial condition.
Risks related to Notes generally
Set out below is a brief description of certain risks relating to the Notes generally:
Modification, waivers and substitution
The Terms and Conditions of the Notes contain provisions for calling meetings of Noteholders
to consider matters affecting their interests generally. These provisions permit defined majorities to
bind all Noteholders including Noteholders who did not attend and vote at the relevant meeting and
Noteholders who voted in a manner contrary to the majority.
The Terms and Conditions of the Notes also provide that the Trustee may, without the
consent of Noteholders, agree to (i) any modification of, or to the waiver or authorisation of any
breach or proposed breach of, any of the provisions of Notes or (ii) determine without the consent
of the Noteholders that any Event of Default or potential Event of Default shall not be treated as
such or (iii) the substitution of another company as principal debtor under any Notes in place of
the Issuer, in the circumstances described in Condition 15 of the Notes.
Change of law
The Terms and Conditions of the Notes are based on English law and in respect of Condition
3 and Condition 4(f), Norwegian law in effect as at the date of issue of the relevant Notes. No
assurance can be given as to the impact of any possible judicial decision or change to English
law, Norwegian law or administrative practice after the date of issue of the relevant Notes.
Trading in the clearing systems
In relation to any issue of Notes which have a minimum denomination and are tradeable in
the clearing systems in amounts above such minimum denomination which are smaller than it,
should definitive Notes be required to be issued, a holder who does not have an integral multiple
of the minimum denomination in his account with the relevant clearing system at the relevant time
may not receive all of his entitlement in the form of definitive Notes unless and until such time as
his holding becomes an integral multiple of the minimum denomination.
Risks related to the market generally
Set out below is a brief description of certain market risks, including liquidity risk, exchange
rate risk, interest rate risk and credit risk:
The secondary market generally
Notes may have no established trading market when issued, and one may never develop. If a
market does develop, it may not be liquid. Therefore, investors may not be able to sell their Notes
easily or at prices that will provide them with a yield comparable to similar investments that have a
developed secondary market. This is particularly the case for Notes that are especially sensitive to
interest rate, currency or market risks, are designed for specific investment objectives or strategies
or have been structured to meet the investment requirements of limited categories of investors.
These types of Notes generally would have a more limited secondary market and more price
volatility than conventional debt securities. Illiquidity may have a severely adverse effect on the
market value of Notes.
Exchange rate risks and exchange controls
The Issuer will pay principal and interest on the Notes in the Specified Currency. This
presents certain risks relating to currency conversions if an investor’s financial activities are
denominated principally in a currency or currency unit (the ‘‘Investor’s Currency’’) other than the
Specified Currency. These include the risk that exchange rates may significantly change (including
changes due to devaluation of the Specified Currency or revaluation of the Investor’s Currency)
and the risk that authorities with jurisdiction over the Investor’s Currency may impose or modify
exchange controls. An appreciation in the value of the Investor’s Currency relative to the Specified
Currency would decrease (i) the Investor’s Currency-equivalent yield on the Notes, (ii) the
Investor’s Currency-equivalent value of the principal payable on the Notes and (iii) the Investor’s
Currency-equivalent market value of the Notes.
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