KEY TERMS OF THE CONTINGENT CONVERTIBLE SECURITIES 1 ( CCS 1 )

Transcription

1 KEY TERMS OF THE CONTINGENT CONVERTIBLE SECURITIES 1 ( CCS 1 ) The key terms stated herein are subject to any approval of the Central Bank of Cyprus and / or any other competent authorities and may be amended in order to satisfy such approval and / or any guidance provided by the Central Bank of Cyprus and / or any other competent authorities. These summary terms are indicative only, do not purport to be complete and are qualified in their entirety by the more detailed information which will appear in the offering circular for CCS 1. It is highly likely that the Bank s or its Group s Common Equity Tier 1 ratio will remain below 9% as at 30 September In such case, this means that CCS 1, at or after their issuance, will automatically convert into the Bank s ordinary shares, to the extent required, in order to increase the Common Equity Tier 1 ratio to at least 9%. The CCS 1 will be subject to a mandatory conversion first on a pro rata basis before any conversion of Contingent Convertible Securities 2 ( CCS 2 ) (for further details refer to key terms of CCS 2). In the event that all CCS 1 are subject to a mandatory conversion, and the Bank s or its Group s Common Equity Tier 1 remains below 9%, the CCS 2 will be subject to mandatory conversion into ordinary shares on a pro-rata basis. This means that holders of the existing Convertible Tier 1 Securities and the Non-Convertible Securities choosing to participate in the Voluntary Exchange Offers are highly likely to become holders of ordinary shares on or shortly after 30 September Once full conversion has taken place, the summary terms set out below (other than those under the section entitled Mandatory contingent conversion ) will cease to be of relevance. Issuer: Hellenic Bank Public Company Ltd ( Hellenic Bank or the Bank ) Total issue size: Up to 126.4m Securities offered by the Bank for exchange: Contingent Convertible securities ( Contingent Convertible Securities 1 or CCS 1 ) Voluntary exchange offer: CCS 1 will be offered (the CCS 1 Voluntary Exchange Offer ) to all holders of the Non-Cumulative Convertible Perpetual Capital Securities (ISIN CY ), issued by the Bank in accordance with the terms of issue included in the prospectus dated 17 September 2010 (the Convertible Tier 1 Securities ). The CCS 1 Voluntary Exchange Offer will not be extended to any Convertible Tier 1 holders in the United States (including its territories and dependencies, any state of the United States and the district of Columbia), Canada, Australia, South Africa, Japan, or to any country in which, according to the laws of such country, such an offer is illegal or constitutes a breach of any applicable law, rule or regulation or to U.S. Persons (within the meaning of Regulation S of the United States Securities Act of 1933). Exchange ratio: The Convertible Tier 1 Securities will be exchanged into CCS 1 at [100]% of their nominal value. CCS 1 will be issued at [par]. Interest: CCS 1 will carry a maximum fixed interest rate of [11]% per annum.

2 Interest on CCS 1 will be non-cumulative and cancellable at the discretion of Hellenic Bank at all times and any interest payments will be subject to limitations on Additional Tier 1 instrument distributions in accordance with the provisions of the Capital Requirements Directive (as amended, restated or replaced) and any other relevant EC directives and regulations, as implemented in Cyprus, or any other applicable requirements. Mandatory interest cancellation will apply in case of: (i) insufficiency of distributable items; (ii) breach of applicable minimum capital requirements; or (iii) requirement by the Central Bank of Cyprus, as supervisory authority, to cancel an interest payment, if it determines that the financial situation of the Bank requires such a cancellation. Interest cancellation as described above will not constitute an event of default and will not impose any restrictions to the Bank and does not grant the right to the holders of CCS 1 to apply for the liquidation or winding up of the Bank. Status: CCS 1 will be unsecured and subordinated securities, and will qualify as Additional Tier 1 instruments at issuance, in accordance with the provisions of the Capital Requirements Directive (as amended, restated or replaced) and any other relevant EC directives and regulations, as implemented in Cyprus or any other applicable requirements. CCS 1 will rank below any Tier 2 securities, pari passu with any Tier 1 securities and senior to Hellenic Bank s ordinary shares. Maturity: Perpetual. Redemption: CCS1 will be redeemable at the discretion of Hellenic Bank, at the earliest 5 years after their issuance date. The Bank will have the discretion to redeem CCS 1 if they cease to qualify as Additional Tier 1 pursuant to the provisions of the Capital Requirements Directive (as amended, restated or replaced) and any other relevant EC directives and regulations, as implemented in Cyprus, or any other applicable requirements, or cease to be treated as capital eligible to meet higher capital requirements imposed on the Cypriot banking sector as part of the Cyprus economic adjustment programme. Hellenic Bank will also have the discretion to redeem the CCS 1 if interest thereon is no longer tax deductible. Any of the above-described redemptions are subject to the prior approval of the Central Bank of Cyprus as supervisory authority, or any competent authority. Mandatory contingent conversion: Contingent conversion trigger: CCS 1 will convert into ordinary shares on a mandatory basis if any of the following occurs: (a) the Common Equity Tier 1 ratio of the Bank or its Group falls or remains below 9% after [30 Sep. 2013] (as long as Hellenic Bank is required to maintain a Common Equity Tier 1 ratio at or above 9%) (b) the Common Equity Tier 1 ratio of the Bank or its Group falls below 5.125% (c) According to the Central Bank of Cyprus or the relevant competent authority, Hellenic Bank is likely to be subject to State Aid measures or to enter resolution pursuant to the Resolution of Credit and Other Institutions Law ( Περί Εξυγίανσης Πιστωτικών και άλλων Ιδρυµάτων Νόµου (Ν. 17(Ι)/2013) ).

3 The contingent conversion trigger shall be activated (i) after the Convertible Tier 1 Securities have been fully written-down in accordance with the prospectus dated 17 September 2010 and (ii) before any contingent conversion of CCS 2. Conversion amount: The conversion amount is, as applicable, (i) the amount required to restore the Bank s and / or its Group s Common Equity Tier 1 to 5.125% and / or 9% (for the latter, as long as Hellenic Bank is required to maintain a Common Equity Tier 1 ratio at or above 9%) or (ii) the amount required for Hellenic Bank to be deemed viable by the Central Bank of Cyprus or the relevant competent authority, in each case up to the entire principal of CCS 1. Any conversion will be applied pro rata to the outstanding CCS 1. Conversion mechanism: CCS 1 shall convert into newly issued ordinary shares of Hellenic Bank at the Mandatory Conversion Price, (ii) a floor price of [0.10]; and Voluntary conversion: At the option of CCS1 holders, at pre-set periods every year. CCS 1 shall convert into newly issued ordinary shares of Hellenic Bank at the Voluntary Conversion Price, (ii) a floor price of [0.15] ; and Listing: CCS 1 will be listed and traded on the Cyprus Stock Exchange in accordance with the applicable law upon receiving the necessary approvals from the competent authorities. Governing Law: CCS 1 shall be governed by, and construed in accordance with, the laws of the Republic of Cyprus. Note: The term Common Equity Tier 1 has the same meaning as Core Tier 1. This document does not constitute an offer, prospectus or investment advice or recommendation for investment.

4 KEY TERMS OF THE CONTINGENT CONVERTIBLE SECURITIES 2 ( CCS 2 ) The key terms stated herein are subject to any approval of the Central Bank of Cyprus and / or any other competent authorities and may be amended in order to satisfy such approval and / or any guidance provided by the Central Bank of Cyprus and / or any other competent authorities. These summary terms are indicative only, do not purport to be complete and are qualified in their entirety by the more detailed information which will appear in the offering circular for CCS 2. It is highly likely that the Bank s or its Group s Common Equity Tier 1 ratio will remain below 9% as at 30 September In such case, this means that Contingent Convertible Securities 1 ( CCS 1 ) (for further details refer to key terms of CCS 1) and possibly CCS 2, at or after their issuance, will automatically convert into the Bank s ordinary shares, to the extent required, in order to increase the Common Equity Tier 1 ratio to at least 9%. The CCS 1 will be subject to a mandatory conversion first on a pro rata basis before any conversion of CCS 2. In the event that all CCS 1 are subject to a mandatory conversion, and the Bank s or its Group s Common Equity Tier 1 remains below 9%, the CCS 2 will be subject to mandatory conversion into ordinary shares on a pro-rata basis. This means that holders of the Non-Convertible Securities and Convertible Tier 1 Securities choosing to participate in the Voluntary Exchange Offers are highly likely to become holders of ordinary shares on or shortly after 30 September Once full conversion has taken place, the summary terms set out below (other than those under the section entitled Mandatory contingent conversion ) will cease to be of relevance. Issuer: Hellenic Bank Public Company Ltd ( Hellenic Bank or the Bank ) Total issue size: Up to 200m Securities offered by the Bank for exchange: Contingent Convertible securities ( Contingent Convertible Securities 2 or CCS 2 ) Voluntary exchange offer: CCS 2 will be offered (the CCS 2 Voluntary Exchange Offer ) to the holders of the following securities: Bonds due 2016 (ISIN CY ), issued in accordance with the terms of issue of the prospectus dated 11 May 2006; Bonds due 2018 issued on 1 September 2008; Bonds due 2019 (ISIN CY ), issued on 11 March 2009, the issue terms of which are included in the prospectus dated 18 May 2009; and Capital Securities (ISIN CY ), issued on 18 April 2003 the issue terms of which are included in the prospectus dated 7 November 2003 (together the Non-Convertible Securities ). The acceptance of securities tendered via the CCS 2 Voluntary Exchange Offer will be subject to a minimum Non-Convertible Securities holders participation rate of 90% although the Board of Directors will have the absolute discretion to accept the tendered offer at a lower participation rate provided that Hellenic Bank will not require any official sector, including State Aid, measures or enters, resolution pursuant to the Resolution of

5 Credit and Other Institutions Law ( Περί Εξυγίανσης Πιστωτικών και άλλων Ιδρυµάτων Νόµου (Ν. 17(Ι)/2013) ) or any other applicable law. Exchange ratio: The Non-Convertible Securities will be exchanged into CCS 2 at [100]% of their nominal value. CCS 2 will be issued at [par]. Standalone issuance: Subject to the total issue size mentioned above, CCS 2 could also be offered at par to investors for cash on a standalone basis. The acceptance of the subscription orders will be subject to Hellenic Bank not requiring any official sector, including State Aid, measures or entering, resolution pursuant to Περί Εξυγίανσης Πιστωτικών και άλλων Ιδρυµάτων Νόµου (Ν. 17(Ι)/2013) or any other applicable law. The CCS 2 Voluntary Exchange Offer and standalone placement will not be extended to any Non-Convertible Securities holders in the United States (including its territories and dependencies, any state of the United States and the district of Columbia), Canada, Australia, South Africa, Japan, or to any country in which, according to the laws of such country, such an offer is illegal or constitutes a breach of any applicable law, rule or regulation or to U.S. Persons (within the meaning of Regulation S of the United States Securities Act of 1933). Interest: CCS 2 will carry a maximum fixed interest rate of [10]% per annum. Interest on CCS 2 will be non-cumulative and cancellable at the discretion of Hellenic Bank at all times and any interest payments will be subject to limitations on Additional Tier 1 instrument distributions in accordance with the provisions of the Capital Requirements Directive (as amended, restated or replaced) and any other relevant EC directives and regulations, as implemented in Cyprus, or any other applicable requirements. Mandatory interest cancellation will apply in case of: (i) (ii) (iii) insufficiency of distributable items; breach of applicable minimum capital requirements; or requirement by the Central Bank of Cyprus, as supervisory authority, to cancel an interest payment, if it determines that the financial situation of the Bank requires such a cancellation. Interest cancellation as described above will not constitute an event of default and will not impose any restrictions to the Bank and does not grant the right to the holders of CCS 2 to apply for the liquidation or winding up of the Bank. Status: CCS 2 will be unsecured and subordinated securities, and will qualify as Additional Tier 1 instruments at issuance, in accordance with the provisions of the Capital Requirements Directive (as amended, restated or replaced) and any other relevant EC directives and regulations, as implemented in Cyprus or any other applicable requirements. CCS 2 will rank below any Tier 2 securities, pari passu with any Tier 1 securities and senior to Hellenic Bank s ordinary shares. Maturity: Perpetual.

6 Redemption: CCS 2 will be redeemable at the discretion of Hellenic Bank, at the earliest 5 years after their issuance date. The Bank will have the discretion to redeem CCS 2 if they cease to qualify as Additional Tier 1 pursuant to the provisions of the Capital Requirements Directive (as amended, restated or replaced) and any other relevant EC directives and regulations, as implemented in Cyprus, or any other applicable requirements or cease to be treated as capital eligible to meet higher capital requirements imposed on the Cypriot banking sector as part of the Cyprus economic adjustment programme. Hellenic Bank will also have the discretion to redeem CCS 2 if interest thereon is no longer tax deductible. Any of the above-described redemptions is subject to the prior approval of the Central Bank of Cyprus as supervisory authority or any competent authority. Mandatory contingent conversion: Contingent conversion trigger: CCS 2 will convert into ordinary shares on a mandatory basis if any of the following occurs: (a) the Common Equity Tier 1 ratio of the Bank or its Group falls or remains below 9% after [30 Sep. 2013] (as long as Hellenic Bank is required to maintain a Common Equity Tier 1 ratio at or above 9%) (b) the Common Equity Tier 1 ratio of the Bank or its Group falls below 5.125% (c) According to the Central Bank of Cyprus or the relevant competent authority, Hellenic Bank is likely to be subject to State Aid measures or to enter resolution pursuant to Περί Εξυγίανσης Πιστωτικών και άλλων Ιδρυµάτων Νόµου (Ν. 17(Ι)/2013). The contingent conversion trigger shall be activated (i) after the Convertible Tier 1 Securities have been fully written down in accordance with the prospectus dated 17 September 2010 and (ii) after CCS 1 have been converted into equity. Conversion amount: The conversion amount is, as applicable, (i) the amount required to restore the Bank s and / or its Group s Common Equity Tier 1 to 5.125% and / or 9% (for the latter, as long as Hellenic Bank is required to maintain a Common Equity Tier 1 ratio at or above 9%) or (ii) the amount required for Hellenic Bank to be deemed viable by the Central Bank of Cyprus or the relevant competent authority, in each case up to the entire principal of CCS 2. Any conversion will be applied pro rata to the outstanding CCS 2. Conversion mechanism: CCS 2 shall convert into newly issued ordinary shares of Hellenic Bank at the Mandatory Conversion Price, (ii) a floor price of [0.05]; and Voluntary conversion: At the option of the CCS2 holders, at pre-set periods every year.

7 CCS 2 shall convert into newly issued ordinary shares of Hellenic Bank at the Voluntary Conversion Price, (ii) a floor price of [0.15]; and Listing: The CCS 2 will be listed and traded on the Cyprus Stock Exchange in accordance with the applicable law upon receiving the necessary approvals from the competent authorities. Governing Law: CCS 2 shall be governed by, and construed in accordance with, the laws of the Republic of Cyprus. Note: The term Common Equity Tier 1 has the same meaning as Core Tier 1. This document does not constitute an offer, prospectus or investment advice or recommendation for investment.