African Development Bank

Transcription

1 THIS DOCUMENT IS IMPORTANT AND YOU ARE ADVISED TO CAREFULLY READ AND UNDERSTAND ITS CONTENTS. If you are in any doubt about its contents or the action to be taken, please consult your Stockbroker, Accountant, Banker, Solicitor or any other professional adviser for guidance immediately. FOR INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, PLEASE REFER TO THE SECTION ON "RISK FACTORS" ON PAGES 27 TO 29 HEREOF. SHELF PROSPECTUS African Development Bank N160,000,000,000 Medium Term Note Programme For issues of Notes with maturities of one day or longer, which Programme forms a part of the African Development Bank's Global Debt Issuance Facility The Securities & Exchange Commission (the "SEC"), established pursuant to the Investments and Securities Act (No. 29) 2007 (the "Act"), has cleared and registered this Shelf Prospectus in connection with the medium term note programme by the African Development Bank (the "Bank", in its capacity as issuer) (which programme forms a part of the African Development Bank's global debt issuance facility) (the "Programme"). An application shall be made to the Governing Council of the Nigerian Stock Exchange ("The NSE") for notes (the "Notes") issued under the Programme to be listed on the Daily Official List and admitted to trading on the floor of The NSE. The Bank has been assigned a rating of "AAA" by Standard & Poor s Rating Services, a division of The McGraw Hill Companies, Inc. ("S&P") and "Aaa" by Moody s Investors Services ("Moody s"). As defined by S&P, an "AAA" rating means that the ability of the Bank to meet its financial commitment on its obligations is extremely strong. As defined by Moody s, an "Aaa" rating means that the Bank s ability to meet its financial obligations is judged to be of the highest quality, with minimal credit risk. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating organisation. References in this Shelf Prospectus to Notes being listed (and all related references) shall mean that such Notes have been admitted to listing and trading on The NSE. Unlisted Notes may also be issued pursuant to the Programme. Any pricing supplement (each a "Pricing Supplement") in respect of the issue of any Notes will specify whether such Notes will be listed or unlisted. The Notes will be issued in either uncertificated book-entry form ("Book-Entry Notes") or certificated registered form ("Registered Notes"). Issuing Houses/Bookrunners Stanbic IBTC Capital Limited RC Rand Merchant Bank Nigeria Limited RC Shelf Prospectus dated 10 July

2 This Shelf Prospectus has been cleared and registered by the SEC. It is a civil wrong and a criminal offence under the Act to issue a prospectus which contains false or misleading information. Clearance and registration of this Shelf Prospectus and the Notes (as defined below) which can be issued under the Programme do not relieve the parties of any liability arising under the Act for false and misleading statements contained herein or for any omission of a material fact. This Shelf Prospectus has been issued in compliance with the Rules and Regulations of the SEC and contains particulars in compliance with the requirements of the SEC for the purpose of giving information with regard to the Programme. The Bank represents that it has taken all reasonable care to ensure that the information concerning the Bank contained in this Shelf Prospectus is true and accurate in all material respects on the date of this Shelf Prospectus and that as of the date hereof there are no other material facts in relation to the Bank the omission of which would make misleading any statement herein, whether of fact or of opinion. The Bank accordingly accepts responsibility for the information contained in this document. Except to the extent required under section 85 of the Act, neither of Stanbic IBTC Capital Limited or Rand Merchant Bank Nigeria Limited (the "Issuing Houses/Bookrunners", including any other issuing houses/bookrunners appointed from time to time by the Bank, in their capacities as issuing houses and bookrunners, which capacities shall be read in the context herein used) accept any responsibility for the contents of this Shelf Prospectus or for any other statement, made or purported to be made by the Issuing Houses/Bookrunners or on their behalf in connection with either the Bank or the issue and offering of the Notes. The Issuing Houses/Bookrunners accordingly disclaim all and any liability whether arising in tort or contract or otherwise (save as referred to above) which they might otherwise be subject to in respect of this Shelf Prospectus or any such statement. The Issuing Houses/Bookrunners have not separately verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility is accepted by them as to the accuracy or completeness of the information contained in this Shelf Prospectus or any other information provided by the Bank. No person is authorised to give any information or to make any representation not contained in the Shelf Prospectus or any Pricing Supplement in connection with the offering of the Notes. If any such information or representation is nevertheless given or made by any dealer, broker, seller or other person, it must not be relied upon as having been authorised by the Bank or by any of the Issuing Houses/Bookrunners. The issue of this Shelf Prospectus or any Pricing Supplement and the issue, subscription, offering and sale of the Notes are not a waiver by the Bank or by any of its members, Governors, Directors, Alternates, officers or employees of any of the rights, immunities, privileges or exemptions conferred upon any of them by the Agreement Establishing the African Development Bank (as amended) (the "Agreement"), or by any statute, law or regulation of any member of the Bank or any political subdivision of any member, all of which are hereby expressly reserved. The Bank is, however, amenable to suit in respect of its obligations under the Notes in accordance with the terms and conditions of the Notes. THE NOTES ARE NOT AN OBLIGATION OF ANY GOVERNMENT. The Notes may not be offered, sold or delivered, nor may this Shelf Prospectus, any Pricing Supplement or any other offering material be distributed, in any country or jurisdiction except in circumstances that will result in compliance with all applicable laws and regulations. No action has been or will be taken by the Bank or the Issuing Houses/Bookrunners that would (other than in Nigeria) permit a public offering of the Notes or the circulation or distribution of this Shelf Prospectus, in proof or final form, any Pricing Supplement, or any offering material in relation to the Bank or the Notes in any country or jurisdiction where action for that purpose is required. This Shelf Prospectus (or any Pricing Supplement issued in connection with it) does not constitute an offer of, or an invitation by or on behalf of the Bank or any of the Issuing Houses/Bookrunners to subscribe for or purchase, any of the Notes. In this Shelf Prospectus, unless otherwise specified, references to "N", "NGN" or "Naira" are to the lawful currency of Nigeria, references to "USD" are to United States Dollars and references to "Unit of Account" or "UA" are to the unit of account equivalent to the International Monetary Fund's Special Drawing Right ("SDR") as its reporting currency. The SDR is currently computed daily in USD by the International Monetary Fund. As at 31 December 2012, the rate of UA1.00 = 2

3 USD (the "Conversion Rate") and where amounts in UA have also been presented in U.S. dollars in this Shelf Prospectus, these have been converted at the Conversion Rate. WAIVERS AND EXEMPTIONS - SPECIAL DISPENSATION FOR THE BANK Offers of Notes under the Programme will be made in accordance with certain concessions, forbearances, waivers and exemptions granted by each of the SEC and the Central Bank of Nigeria ("CBN") in favour of the Bank, in recognition of the Bank s supranational status and international developmental functions, and to facilitate the achievement of the Bank s development mandate. These concessions, forbearances, waivers and exemptions are recorded in various correspondence by the Bank with each of the regulatory authorities listed above. Relevant correspondence will be available for inspection by Noteholders at the specified offices of the Issuing and Paying Agent and the Issuing Houses/Bookrunners. The form and contents of this Shelf Prospectus therefore differ in certain material respects from the standard form and information usually required for transactions of this nature in the Nigerian capital market and thus constitutes a special regulatory dispensation for the issue of the Notes by the Bank in Nigeria. DOCUMENTS INCORPORATED BY REFERENCE The following documents shall be deemed to be incorporated by reference in, and to form part of, this Shelf Prospectus: (i) the most recent publicly available information statement (the "Information Statement") of the Bank, beginning with the Information Statement dated 15 August 2013; (ii) the most recently published financial statements and reports of the independent auditors of the Bank contained in the annual reports of the Bank; (iii) any amendment or supplement to the Information Statement or to this Shelf Prospectus; and (iv) with respect to any Notes issued by the Bank, the relevant Pricing Supplement, except that any statement contained in this Shelf Prospectus and any of the documents incorporated by reference in, and forming part of, this Shelf Prospectus shall be deemed to be modified or superseded for the purpose of this Shelf Prospectus to the extent that a statement contained in a document subsequently incorporated by reference in this Shelf Prospectus modifies or supersedes that statement. The Bank will provide, at the specified offices of the Issuing and Paying Agent, free of charge, upon the oral or written request therefor, a copy of this Shelf Prospectus (or any document incorporated by reference in this Shelf Prospectus). Written or oral requests for such documents should be directed to the specified office of the Issuing and Paying Agent. 3

4 TABLE OF CONTENTS SUMMARY OF THE PROGRAMME... 5 AFRICAN DEVELOPMENT BANK... 9 THE BANK'S SELECTED FINANCIAL INFORMATION TERMS AND CONDITIONS OF THE NOTES USE OF PROCEEDS RISK FACTORS SUBSCRIPTION AND SALE CLEARING AND SETTLEMENT OF THE NOTES FORM OF PRICING SUPPLEMENT APPENDIX A: TIMELINE APPENDIX B: PROCEDURE FOR PARTICIPATION AND ALLOCATION APPENDIX C: APPLICATION FORM STATUTORY AND GENERAL INFORMATION

5 SUMMARY OF THE PROGRAMME The following is a brief summary only and should be read, in relation to any series of Notes, in conjunction with the relevant Pricing Supplement and, to the extent applicable, the Terms and Conditions of the Notes set out on pages 13 to 25 hereof. Issuer Issuing Houses/Bookrunners Issuing and Paying Agent Registrar Sponsoring Stockbroker Programme Amount Availability Form of Notes Clearing System Status of Notes African Development Bank. Stanbic IBTC Capital Limited and Rand Merchant Bank Nigeria Limited, and any other Issuing Houses/Bookrunners appointed from time to time by the Bank pursuant to a programme vending agreement dated 10 July 2014 (the "Programme Vending Agreement", which expression includes any further amendment or supplements thereto or restatements thereof), in their capacities as issuing houses and bookrunners, as may be specified in the relevant Pricing Supplement and/or a vending agreement entered into in respect of a particular Series (a "Series Vending Agreement"), which documents shall also designate a lead Issuing House/Bookrunner and/or joint Issuing House(s)/Bookrunner(s) for the purposes of a specific issue under the Programme where there is more than one Issuing House/Bookrunner. The lead Issuing House/Bookrunner and/or joint Issuing House(s)/Bookrunner(s) may vary from issue to issue under the Programme. First Registrars Nigeria Limited or such other agent(s) as may be specified in the relevant Pricing Supplement. First Registrars Nigeria Limited or such other registrar as may be specified in the relevant Pricing Supplement. Stanbic IBTC Stockbrokers Limited or such other sponsoring stockbroker(s) as may be specified in the relevant Pricing Supplement. Notes may be issued and outstanding in an aggregate principal amount not exceeding N160,000,000,000. The Programme will be continuously available and will be uncommitted. The Notes will be issued as Book-Entry Notes or Registered Notes and are transferable as described under "Terms and Conditions of the Notes", the provisions of an agency agreement dated 10 July 2014 (the "Agency Agreement") and, if applicable, the rules and procedures of the Clearing System (as defined below). Book-Entry Notes may not be exchanged for Registered Notes. Book-Entry Notes shall be accepted for clearing through the Central Securities Clearing System Plc (the "Clearing System" or "CSCS"). See "Clearing And Settlement of the Notes". Notes will be direct, unsecured and general obligations of the Bank. The Notes are not the obligations of any government. The Notes will rank pari passu and without any preference one above the other by reason of priority of date of issue, currency of payment or otherwise with all other unsecured obligations of the Bank, present and future, except to the extent that any such obligations are by their terms expressed to be subordinated in right of payment. 5

6 Interest Rates Other Notes Negative Pledge Events of Default Cross Default Currency Issuance in Series Issue Price Maturity of Notes Denominations Early Redemption Redemption Taxation Notes may be interest bearing or non-interest bearing. Interest (if any) may be at a fixed or floating rate and may vary during the lifetime of the relevant Series. Supplemental and other terms applicable to zero coupon notes, partly paid notes and any other type of Notes which the Bank and any Issuing Houses/Bookrunners may agree to issue under the Programme, subject to compliance with all applicable relevant laws, regulations and directives, will be set out in the relevant Pricing Supplement. The Notes will have the benefit of a negative pledge in respect of Relevant Indebtedness as more fully described below under "Terms and Conditions of the Notes". The events of default under the Notes will be as more fully described below under "Terms and Conditions of the Notes". Notes will be issued with the benefit of a cross-default provision, as described below under "Terms and Conditions of the Notes". Notes will be denominated in Naira. Notes will be issued in series (each a "Series"). The Notes of each Series will all be subject to identical terms, whether as to interest or maturity or otherwise, or terms which are identical except that the issue date, the amount of the first payment of interest and/or the denomination thereof may be different. Each Series may comprise one or more tranches ("Tranches" and each, a "Tranche") issued on different issue dates. A Series may only be comprised of Notes which are in either book-entry or registered form. Notes may be issued at par or at a discount or premium to par. Notes may be issued with maturities of one day or longer as may be agreed between the Bank and the relevant Issuing Houses/Bookrunners and as indicated in the applicable Pricing Supplement, subject to such minimum or maximum maturities as may be allowed or required from time to time by the SEC or any laws or regulations applicable to the Bank. Notes will be issued in such denominations as may be agreed between the Bank and the relevant Issuing Houses/Bookrunners and as specified in the relevant Pricing Supplement, subject to compliance with all applicable legal and regulatory requirements, and in accordance with usual market practice. Early redemption will be permitted only to the extent specified in the relevant Notes, as described in the related Pricing Supplement and then only subject to any applicable legal or regulatory limitations. Notes may be redeemable at par or at such other redemption amount as may be specified in the relevant Pricing Supplement. The Notes are currently exempt from tax imposed under the Companies Income Tax Act Cap C21, LFN 2004 (as amended by the Companies Income Tax (Amendment) Act No. 11 of 2007) ("CITA") by virtue of the Companies Income Tax (Exemption of Bonds and Short Term Government Securities) Order 2011 (the "CITA Order"), commencing from 2 January This exemption is for a period of 6

7 10 years from the date of the CITA Order. The proceeds from the disposal of the Notes are currently exempt from tax imposed under the VAT Act by virtue of the Value Added Tax (Exemption of the Proceeds of the Disposal of Government and Corporate Securities) Order 2011 (the "VAT Order"), commencing from 2 January This exemption is for a period of 10 years from the date of the VAT Order. Notwithstanding the CITA Order and the VAT Order, under the Agreement (to which Nigeria is a party), the Bank is exempt from any obligation for the payment, withholding or collection of any tax and accordingly all payments in respect of the Notes made by the Issuing and Paying Agent will be made without deduction for taxes imposed within Nigeria, all as more fully described in "Taxation and Exchange Controls" on pages 30 to 31 below. Ratings Governing Law and Arbitration Listing and Trading Terms and Conditions Pricing Supplements Sale and Transfer The Bank has been assigned a rating of "AAA" by S&P and "Aaa" by Moody s. A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency. The Notes and all agreements thereto will be governed by, and construed in accordance with, Nigerian law. With respect to any disputes arising out of or in connection with the Notes, where such disputes cannot be mutually resolved within ten (10) Business Days, such dispute may be referred to arbitration in accordance with the UNCITRAL Arbitration Rules. Each Series of Notes may be listed and traded on The NSE or they may be unlisted, as specified in the relevant Pricing Supplement. The terms and conditions applicable to each Series (the "Terms and Conditions") will be agreed between the Bank and the relevant Issuing House/Bookrunner or other purchaser at or prior to the time of issuance of such Series, and will be specified in the relevant Pricing Supplement. The Terms and Conditions applicable to each Series will therefore be those set out on pages 13 to 25 hereof as supplemented, modified or replaced by the relevant Pricing Supplement. The commercial terms of each issue of Notes will be set forth in Pricing Supplements which, where applicable, will be annexed to the related Certificates (as defined in the Terms and Conditions of the Notes) and will (i) define the legal terms of the issue, (ii) act as a mechanism for listing the Notes and (iii) set out any other terms which may be applicable to the issue of Notes. Where there is any inconsistency between the terms of a Pricing Supplement and this Shelf Prospectus, the Pricing Supplement will prevail. The sale or transfer of Notes by Noteholders will be subject to the rules of The NSE, the Clearing System, the terms and conditions of the Notes and the provisions of an Agency Agreement. There are currently no other restrictions on the sale or transfer of Notes under Nigerian law. In particular, there are no restrictions on the sale or transfer of Notes by or to non-residents of Nigeria, however, see "Taxation and Exchange Controls" on pages 30 to 31 below for a description of exchange controls applicable to any such non-resident investors. 7

8 Selling Restrictions The Issuing Houses/Bookrunners have undertaken to comply with appropriate US, UK, Nigerian and all other applicable selling restrictions, as more fully described in "Subscription and Sale" below. 8

9 The Bank AFRICAN DEVELOPMENT BANK The Bank is a regional multilateral development institution with membership comprising 53 African states and 24 non-african states from the Americas, Asia, and Europe (the regional members and non-regional members, respectively). The Bank was established in 1963 and operates under the Agreement Establishing the African Development Bank (the "Agreement") signed in Khartoum, Sudan, on 4 August The Bank began operations in 1966 with 29 regional members. The Agreement was amended on 7 May 1982 to permit non-regional countries to be admitted as members. A list of the members showing each member s voting power and the amount of its subscription to the Bank s capital stock is provided in notes to the latest financial statements included in the Information Statement. The Bank s headquarters is located in Abidjan, Côte d Ivoire. However, since February 2003, the Bank has temporarily relocated operations from Abidjan to Tunis, Tunisia. On 30 May 2013, the Bank's Board of Governors approved a roadmap for the Bank's orderly and phased return to its headquarters in Abidjan. The purpose of the Bank is to further the economic development and social progress of its regional members, individually and collectively. To this end, the Bank promotes the investment of public and private capital for development purposes and the orderly growth of foreign trade, primarily by providing loans and technical assistance from its resources for specific projects and programmes that contribute to the economic growth of the region. The Bank s ordinary operations are financed from its ordinary capital resources. The ordinary capital resources include subscribed capital stock, borrowings by the Bank, loan repayments, income from loans and guarantees and other funds and income received by the Bank in its ordinary operations. The capital stock of the Bank is divided into paid-up capital and callable capital. Callable capital is subject to call only as and when required by the Bank to meet obligations incurred on funds borrowed or loans guaranteed. In addition to its ordinary operations, the Bank administers the African Development Fund (the "ADF"), which provides loan financing on concessionary terms to regional member countries that are in the greatest need of such financing. The ADF is legally and financially separate from the Bank, and the Bank is not liable for any obligations of the ADF. The Bank also administers, under separate agreements and arrangements, several other special and trust funds. The resources of these special and trust funds are held, committed and otherwise disposed of entirely separately from the Bank s ordinary capital resources (see the financial statements included in the Information Statement). The Agreement Establishing the Bank The Agreement constitutes the Bank s governing charter and establishes the status, immunities, exemptions and privileges of the Bank, describes its purpose, membership, capital structure and organisation, authorises the kinds of transactions in which it may engage and prescribes limitations on such transactions. The Agreement also contains, among other things, provisions with respect to the admission of additional members, the increase of the authorised capital stock, the terms and conditions under which the Bank may make or guarantee loans, the use of currencies held by it, the withdrawal and suspension of member countries and the suspension and termination of the operations of the Bank. 9

10 THE BANK'S SELECTED FINANCIAL INFORMATION The following tables set forth, for the periods indicated, the Bank's selected historical financial and other information. The following selected financial and other information should be read in conjunction with, and is qualified in its entirety by reference to, the Information Statement dated 15 August 2013 and will be superseded by the Bank's most recent Information Statement incorporated by reference herein. (Amounts expressed in millions of UA) Years Ended 31 December Cash, Investments 7, , , , , Approved Loans less Cancellations: Disbursed and outstanding 11, , , , , Undisbursed(1) 4, , , , , Outstanding Borrowings Total 13, , , , , Senior 12, , , , Subordinated Authorised Capital 66, , , , , Subscribed Capital and Reserves: Paid-up capital 4, , , , , Callable capital 60, , , , , Total callable - non-borrowing members 26, , , , , Total callable - members of the DAC of the OECD 22, , , , , Total Reserves 2, , , , , Special Reserve Cash and Investments as a Percentage of 10

11 Undisbursed portion of approved loans 165.1% 149.7% 161.3% 154.5% 202.5% Outstanding borrowings 55.5% 61.5% 65.3% 73.1% 77.1% Disbursed and Outstanding Loans as a Percentage of Subscribed Capital plus Reserves(2)(3) 16.3% 23.6% 31.4% 31.14% 24.2% Total Outstanding Borrowings as a Percentage of Total callable capital 22.0% 37.91% 55.60% 54.4% 34.6% Callable capital of non-borrowing members 50.2% 65.5% 115.1% 123.3% 78.5% Callable capital of DAC members of OECD 58.6% 72.2% 135.3% 146.5% 93.3% Senior Debt as a Percentage of:(4) Total callable capital 20.8% 34.5% 52.0% 50.6% 30.7% Callable capital of non-borrowing members 47.3% 59.68% 107.6% 114.8% 69.8% Callable capital of DAC members of OECD 55.3% 65.8% 126.5% 136.4% 83.0% Total Reserves as a Percentage of Disbursed and outstanding loans(3) 24.2% 27.1% 31.7% 33.9% 42.4% Total outstanding borrowings 20.1% 19.7% 21.9% 24.1% 36.9% Income before transfers approved by the Board of Governors Weighted Average Interest Rate on: Disbursed and Outstanding Loans for the Year 3.44% 3.57% 3.71% 4.31% 6.19% Weighted Average Cost of: Debt contracted during the year 0.64% 1.15% 0.84% 1.07% 3.00% Outstanding borrowings 1.74% 1.83% 1.93% 2.73% 4.99% 11

12 Average Life of Outstanding Borrowings (Years) Interest coverage ratio(5) (1.25x)(6) 1.91X 1.80X 2.21X 1.99X 1.96x (1) Excludes loans approved but unsigned. (2) Subscribed capital is net of the Cumulative Exchange Adjustment on Subscriptions. (3) Net of the Special Reserve. Disbursed and outstanding loans include irrevocable reimbursement guarantees. (4) For the years presented, it was the Bank s policy to limit its senior debt to 80% of the callable capital of its nonborrowing members and to limit the total of its senior and subordinated debt to 80% of the total callable capital of all its members. Debt ratios were changed in (5) Operating income plus interest expense, divided by interest expense. (6) Indicates the Bank s target ratio. 12

13 TERMS AND CONDITIONS OF THE NOTES The following are the Terms and Conditions of the Notes and other debt obligations issued under the Programme which (subject to completion and amendment) will be applicable to each Series of Notes provided that the relevant Pricing Supplement in relation to any Series of Notes may specify other Terms and Conditions which shall, to the extent so specified or to the extent inconsistent with these Terms and Conditions, replace the following Terms and Conditions for the purposes of such Series of Notes. 1. General Unless otherwise specified in the relevant Pricing Supplement, the notes (the "Notes") issued under the programme (the "Programme") are issued with the benefit of an agency agreement dated 10 July 2014 (the "Agency Agreement", which expression shall include any further amendment or supplements thereto or restatements thereof) and made between the African Development Bank (the "Bank"), First Registrars Nigeria Limited as the issuing and paying agent (the "Issuing and Paying Agent"), First Registrars Nigeria Limited as the registrar (the "Registrar") and First Registrars Nigeria Limited as the Calculation Agent (the "Calculation Agent"), all in their capacities as paying agents (the "Paying Agents" which expression shall include any successor, substitute or additional agents appointed in accordance with Condition 7.4 (Appointment of Agents)). Holders of Book-Entry Notes (as defined below) will have the benefit of a Deed of Covenant dated 10 July 2014 executed by the Bank (the "Deed of Covenant"). Copies of the Agency Agreement, Deed of Covenant and the form of the Notes will be available for inspection at the specified office of the Issuing and Paying Agent. The holders of the Notes are deemed to have notice of all the provisions of the Agency Agreement which will be binding upon them. 2. Definitions Capitalised terms not defined in these Terms and Conditions shall have the meanings set out in the relevant Pricing Supplement. The following definitions shall be applicable (as appropriate) in relation to the Notes: "Benchmark" means the reference rate as defined in the relevant Pricing Supplement "Business Day" means a day (other than a Saturday or Sunday) on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in the Financial Centre, except for the purpose of Condition 7.5 (Currency of Payment), in which case it means a day on which the Federal Reserve Bank of New York is open for business in New York City "Business Day Convention" means, in relation to any date referred to in these Terms and Conditions that is specified to be subject to adjustment in accordance with a Business Day Convention which would otherwise fall on a day that is not a Business Day, either: (A) the Floating Rate Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event (x) such date shall be brought forward to the immediately preceding Business Day and (y) each subsequent such date shall be the last Business Day of the month in which such date would have fallen had it not been subject to adjustment; (B) the Following Business Day Convention, such date shall be postponed to the next day that is a Business Day; (C) the Modified Following Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event such date shall be brought forward to the immediately preceding Business Day; or (D) the Preceding Business Day Convention, such date shall be brought forward to the immediately preceding Business Day "Clearing System" means the Central Securities Clearing Systems Plc "Commitment Form" means the prescribed commitment form to be set out in Appendix C attached to the Pricing Supplement 13

14 "Currency" means Naira "Day Count Fraction" means, in respect of the calculation of an amount of interest on any Note for any period of time (from and including the first day of such period to but excluding the last) (whether or not constituting an Interest Period, the "Calculation Period"): (i) (ii) (iii) if "Actual/Actual" is specified in the relevant Pricing Supplement, the actual number of days in the Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Calculation Period falling in a nonleap year divided by 365) if "Actual/365 (Fixed)" is specified in the relevant Pricing Supplement, the actual number of days in the Calculation Period divided by 365 if "Actual/360" is specified in the relevant Pricing Supplement, the actual number of days in the Calculation Period divided by 360 "designated bank account" means a bank account maintained by or on behalf of a Noteholder with a bank duly licensed by the Central Bank of Nigeria details of which will be set out in the Commitment Form and into which payments in respect of the Notes will be made. Subsequent transferees of Notes and/or Noteholders who wish payments to be made into a new bank account must notify the Issuing and Paying Agent and/or Registrar, as appropriate, no later than the relevant Record Date in respect of any such payment "Effective Date" means, with respect to any Floating Rate Note to be determined on an Interest Determination Date, the date specified as such in the relevant Pricing Supplement or, if none is so specified, the first day of the Interest Accrual Period to which such Interest Determination Date relates "Final Redemption Amount" means the amount specified in the relevant Pricing Supplement "Financial Centre" means Lagos, Nigeria "Fixed Coupon Amount" means any such amount (if any) specified in the relevant Pricing Supplement "Instalment Amount(s)" means the amount(s) (if any) specified in the relevant Pricing Supplement "Instalment Date(s)" means the date(s) (if any) specified in the relevant Pricing Supplement "interest" shall be deemed to include all Interest Amounts and all other amounts payable pursuant to Condition 5 (Interest) or any amendment or supplement to it and shall be deemed to include any additional amounts that may be payable under the Terms and Conditions "Interest Accrual Period" means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the first Interest Period Date and each successive period beginning on (and including) an Interest Period Date and ending on (but excluding) the next succeeding Interest Period Date "Interest Amount" means the amount of interest payable, and in the case of Fixed Rate Notes, means the "Fixed Coupon Amount" "Interest Commencement Date" means the Issue Date or such other date as may be specified in the relevant Pricing Supplement "Interest Determination Date" means, with respect to a Rate of Interest and Interest Accrual Period, the date that is that number of days (if any) specified in the applicable Pricing Supplement prior to the first day of such Interest Accrual Period on which banks and foreign exchange markets settle payments in the Financial Centre "Interest Payment Date(s)" means the date(s) shown in the relevant Pricing Supplement as "Specified Interest Payment Date(s)" or, if no Specified Interest Payment Date(s) is/are specified in the relevant Pricing Supplement, shall mean each date which falls the number of months or other period shown in the relevant Pricing Supplement as the Interest Period after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest Commencement 14

15 Date, and in respect of Floating Rate Notes, shall be subject to adjustment by the Business Day Convention (if any) specified in the relevant Pricing Supplement "Interest Period" means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the first Interest Payment Date and each successive period beginning on (and including) an Interest Payment Date and ending on (but excluding) the next succeeding Interest Payment Date "Interest Period Date" means each Interest Payment Date unless otherwise specified in the relevant Pricing Supplement "Issue Date" means the date specified in the relevant Pricing Supplement "LFN" means the Laws of the Federation of Nigeria "Margin" means the rate per annum (expressed as a percentage) specified in the relevant Pricing Supplement "Noteholders" means, in the case of Book-Entry Notes, those accountholders in the Clearing System entitled to the related Book-Entry Notes, and in the case of Registered Notes, the persons in whose names such Notes are so registered in the Register and "Book-Entry Noteholders" and "Registered Noteholders" shall be construed accordingly "Page" means such page, section, caption, column or other part of a particular information service as may be specified for the purpose of providing a Relevant Rate in the relevant Pricing Supplement, or such other page, section, caption, column or other part as may replace it on that information service or on such other information service, in each case as may be nominated by the person or organisation providing or sponsoring the information appearing there for the purpose of displaying rates or prices comparable to that Relevant Rate "principal" shall be deemed to include any premium payable in respect of the Notes, all Instalment Amounts, Final Redemption Amounts, and all other amounts in the nature of principal payable pursuant to Condition 7 (Payments) or any amendment or supplement to it and shall be deemed to include any additional amounts that may be payable under the Terms and Conditions "Qualified Investors" means investors eligible to participate in any issue of Notes, as defined in the relevant Pricing Supplement "Rate of Interest" means the rate of interest payable from time to time in respect of the Notes and that is either specified or calculated in accordance with the provisions in the relevant Pricing Supplement and in respect of Floating Rate Notes may be determined by Screen Rate Determination or by Reference Bank Determination "Record Date" means the fifteenth Business Day before the due date for any payment in respect of the Notes "Reference Banks" means the institutions specified as such in the relevant Pricing Supplement or, if none, four major banks selected by the Calculation Agent in the interbank market (or, if appropriate, money or swap market) that is most closely connected with the Benchmark "Relevant Date" in respect of any Note means the date on which payment in respect of it first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which payment in full of the amount outstanding is made or (if earlier) the date seven days after that on which notice is duly given to the Noteholders that, upon further presentation of the Note (or relative Certificate) being made in accordance with the Terms and Conditions, such payment will be made, provided that payment is in fact made upon such presentation "Relevant Indebtedness" means any indebtedness which is in the form of, or represented or evidenced by, bonds, notes, debentures, loan stock or other securities which for the time being are, or are intended to be or capable of being, quoted, listed or dealt in or traded on any stock exchange or over-the-counter or other securities market having an original maturity of more than one year from its original date of issue "Relevant Rate" means the Benchmark for a Representative Amount of the C u r r e n c y for a period (if applicable or appropriate to the Benchmark) equal to the Specified Duration commencing on the Effective Date "Relevant Time" means, with respect to any Interest Determination Date, hours in the Financial Centre 15

16 "Representative Amount" means, with respect to any Floating Rate Note to be determined in accordance with a Screen Rate Determination on an Interest Determination Date, the amount specified as such in the relevant Pricing Supplement or, if none is specified, an amount that is representative for a single transaction in the Nigerian market at the time "Specified Denomination(s)" means the denomination or denominations of the Notes as specified in the relevant Pricing Supplement "Specified Duration" means, with respect to any Floating Rate Note to be determined in accordance with a Screen Rate Determination on an Interest Determination Date, the duration specified in the relevant Pricing Supplement or, if none is specified, a period of time equal to the relative Interest Accrual Period, ignoring any adjustment pursuant to these Terms and Conditions "Stock Exchange" means the Nigerian Stock Exchange "Unit" means the Nigerian kobo "U.S. dollars" means United States dollars Form 3.2 Title Form, Title and Transfers The Notes will be issued in either uncertificated book-entry form ("Book-Entry Notes") or in certificated registered form, in the Specified Denomination and issued in series (each a "Series"), and each Series will be the subject of a pricing supplement (each a "Pricing Supplement") prepared by or on behalf of the Bank, the terms set forth in which may supplement or vary any of these Terms and Conditions. A copy of the Pricing Supplement will be lodged with the Stock Exchange in the case of each Series of Notes which is to be listed thereon Book-Entry Notes Each Series of Book-Entry Notes shall be in uncertificated form and created electronically on their Issue Date by or on behalf of the Clearing System and shall be registered with a separate securities identification code with the Clearing System. No global or definitive certificates will be issued in respect of Book-Entry Notes Registered Notes Unless otherwise specified in the relevant Pricing Supplement, Notes issued in certificated registered form ("Registered Notes") will be represented by definitive certificates ("Certificates") and will be in substantially the form (subject to amendment and completion) scheduled in the Agency Agreement. One Certificate representing the aggregate nominal amount of Registered Notes held by the same holder will be issued to such holder, unless more than one Certificate is required by the Clearing System. Each Certificate will be numbered serially with an identifying number, which will be recorded in the register (the "Register") kept by the Registrar Book-Entry Notes Title to Book-Entry Notes will be as set out in the relevant statements issued, or any other notification of holding document, issued by the Clearing System as to the aggregate number of Notes standing to the credit of the securities account of any Noteholder Registered Notes Title to Registered Notes passes by registration in the Register Noteholders The Bank and the Paying Agents shall be entitled to deem and treat, in the case of Book- Entry Notes, the entitled account-holder with the Clearing System and, in the case of Registered Notes, the registered holder of any Registered Note as the absolute owner of the relevant Notes for the purpose of making payments and for all other purposes, whether 16

17 or not such Note is overdue and regardless of any notice of ownership, trust or an interest therein, or in the case of registered Notes any writing thereon (or on the Certificate representing it) or any notice of any previous theft or loss thereof (or of the related Certificate), and all payments on a Note to such holder shall be deemed valid and effectual to discharge the liability of the Bank in respect of such Note to the extent of the sum or sums so paid. 3.3 Transfers Status Book-Entry Notes Book-Entry Notes may be transferred between participating institutions in accordance with procedures implemented by the relevant depositary. Book-Entry Notes may not be exchanged for Registered Notes Registered Notes All transfers of Registered Notes and entries on the Register will be made in accordance with the relevant procedures of the Registrar. A copy of the relevant procedures will be made available by the Registrar to any holder of a Registered Note upon request. The issue of new Registered Notes on transfer will be effected without charge by or on behalf of the Bank or the Registrar, but upon payment by the applicant of (or the giving by the applicant of such indemnity as the Registrar may require in respect of) any applicable tax or other government charges imposed in relation thereto Closed Periods No Noteholder may require the transfer of a Registered Note to be registered (i) during the period of 15 calendar days ending on the due date for redemption of, or payment of any Instalment Amount in respect of, that Note, (ii) after any such Note has been called for redemption or (iii) during the period of seven calendar days ending on (and including) the Record Date. No transfer of a Book-Entry Note will be effected during the period of seven calendar days preceding the Record Date. Status and Negative Pledge The obligations deriving from the Notes will be direct, unsecured and general obligations of the Bank. The Notes are not the obligations of any government. The Notes will rank pari passu and without any preference one above the other by reason of priority of date of issue, currency of payment or otherwise with all other unsecured obligations of the Bank, present and future, except to the extent that any such other obligations are by their terms expressed to be subordinated in right of payment. 4.2 Negative Pledge 5. As long as any of the Notes shall remain outstanding and unpaid but only up to the time all amounts of principal and, where applicable, interest due in respect of the notes have been paid to the Issuing and Paying Agent, the Bank will not cause or permit to be created on any of its present or future property or assets any mortgage, pledge or other lien or charge as security for any Relevant Indebtedness issued, assumed or guaranteed by the Bank, unless the Notes shall be secured by such mortgage, pledge or other lien or charge so as to rank pari passu in point of security and rateably with such Relevant Indebtedness. Interest 5.1 Interest on Fixed Rate Notes Each Fixed Rate Note will bear interest on its outstanding nominal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest being payable in arrear on each Interest Payment Date. If a Fixed Coupon Amount is specified in the relevant Pricing Supplement, the amount of interest payable on each Interest Payment Date will amount to the Fixed Coupon Amount. 5.2 Interest on Floating Rate Notes 17

18 Each Floating Rate Note will bear interest on its outstanding nominal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest being payable in arrear on each Interest Payment Date Rate of Interest for Floating Rate Notes Screen Rate Determination for Floating Rate Notes: The Rate of Interest for each Interest Accrual Period shall be determined by the Calculation Agent at or about the Relevant Time on the Interest Determination Date in respect of such Interest Accrual Period in accordance with the following: (x) (y) (z) If the Primary Source for Floating Rate is a Page, subject as provided below, the Rate of Interest shall be: (I) (II) the Relevant Rate (where such Relevant Rate on a specified Page is a composite quotation or is customarily supplied by one entity); or the arithmetic mean of the Relevant Rates of the persons whose Relevant Rates appear on that Page, in each case appearing on such Page at the Relevant Time on the Interest Determination Date; or if the Primary Source for Floating Rate is Reference Banks or if sub-paragraph (x)(i) applies and no Relevant Rate appears on the Page at the Relevant Time on the Interest Determination Date or if sub-paragraph (x)(ii) applies and fewer than two Relevant Rates appear on the Page at the Relevant Time on the Interest Determination Date, subject as provided below, the Rate of Interest shall be the arithmetic mean of the Relevant Rates that each of the Reference Banks is quoting to leading banks in the Financial Centre at the Relevant Time on the Interest Determination Date, as determined by the Calculation Agent; and if paragraph (y) above applies and the Calculation Agent determines that fewer than two Reference Banks are so quoting Relevant Rates, subject as provided below, the Rate of Interest shall be the arithmetic mean of the rates per annum (expressed as a percentage) that the Calculation Agent determines to be the rates (being the nearest equivalent to the Benchmark) in respect of a Representative Amount of the Currency that at least two out of five leading banks selected by the Calculation Agent in the Financial Centre are quoting at or about the Relevant Time on the date on which such banks would customarily quote such rates for a period commencing on the Effective Date for a period equivalent to the Specified Duration to leading banks carrying on business in the Financial Centre; except that, if fewer than two of such banks are so quoting to leading banks in the Financial Centre, the Rate of Interest shall be the Rate of Interest determined on the previous Interest Determination Date. If any Margin is specified in the relevant Pricing Supplement (either (x) generally, or (y) in relation to one or more Interest Accrual Periods), an adjustment shall be made to all Rates of Interest, in the case of (x), or the Rates of Interest for the specified Interest Accrual Periods, in the case of (y), by adding (if a positive number) or subtracting the absolute value (if a negative number) of such Margin, subject always to the next paragraph. 5.3 Accrual of Interest Interest shall cease to accrue on each Note on the due date for redemption unless payment is improperly withheld or refused, in which event interest shall continue to accrue (as well after as before judgment) at the Rate of Interest in the manner provided in this Condition 5 to the Relevant Date. 5.4 Rounding For the purposes of any calculations required pursuant to these Terms and Conditions (unless otherwise specified), (x) all percentages resulting from such calculations shall be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (with halves being rounded up), (y) all figures shall be rounded to seven significant figures (with 18