Österreichische Volksbanken-Aktiengesellschaft ... - Volksbank AG

Instalment Notes
The Issuer may issue Notes where the issue price is payable in more than one instalment.
Failure to pay any subsequent instalment could result in the investors risk of losing all or
part of their investment.
Subordinated Notes
Subordinated Notes are unsecured and subordinated obligations. In the event of a bankruptcy
or liquidation of the Issuer, holders of Subordinated Notes would receive payments
on any outstanding Subordinated Notes only after senior Noteholders and other senior creditors
of the Issuer have been paid in full, if and to the extent that there is still cash available
for those payments. In case of Supplementary Capital Notes which have shared in net losses
of the Issuer, the Notes will only be redeemed subject to the pro rata deduction of the net
losses which have accrued since the date of issuance of the Notes. Therefore, Subordinated
Notes generally bear a higher performance risk than senior notes.
Covered Bonds
Payment obligations under Covered Bonds are secured by a special pool of cover assets.
Such cover pool is separated from the assets of the Issuer in insolvency and enforcement
proceedings and may not be used to repay claims of other creditors of the Issuer. However,
there is no absolute certainty that the cover assets will at any time be sufficient to cover the
obligations under the Covered Bonds and/or that substitute cover assets can be timely added
to the cover asset pool.
General risks of Structured Notes
An investment in Notes, the premium, interest and/or principal amount of which is directly
or inversely determined by reference to one or more currencies, commodities, share price,
interest rate or other indices ("Structured Notes"), entails additional significant risks that are
not associated with similar investments in a conventional debt security. These risks include,
among other things, the possibility that:
� the Underlying or basket of Underlyings may be subject to significant changes,
whether due to the composition of the Underlying itself, or because of fluctuations in
value of the indexed assets;
� the resulting interest rate will be less (or may be more) than that payable in the case
of a conventional debt security issued by the Issuer at the same time;
� the repayment of principal can occur at times other than that expected by the investor;
� the holder of a derivative Note could lose all or a substantial portion of the principal
amount of such Note (whether payable at maturity or upon redemption or repayment),
and, if the principal amount is lost, interest may cease to be payable on the derivative
Note;
� the risks of investing in derivative Notes encompasses both risks relating to the Underlying
and risks that are unique to the Notes as such;
� any derivative Note that is indexed to more than one type of Underlying, or on formulas
that encompass the risks associated with more than one type of asset, may carry
levels of risk that are greater than Notes that are indexed to one type of asset only;
� it may not be possible for investors to hedge their exposure to these various risks relating
to derivative Notes; and
� a significant market disruption could mean that the index on which the derivative
Notes are based ceases to exist.
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