(ABSA) ABSA PRELIM OFFERING CIRC Page 1 Proof 16

Transcription

1 (ABSA) ABSA PRELIM OFFERING CIRC Page 1 Proof 16 The Issuer accepts responsibility for the information contained in this Offering Circular. To the best of the knowledge and belief of the Issuer (who has taken all reasonable care to ensure that such is the case) the information contained in this Offering Circular is in accordance with the facts and does not omit anything likely to affect the import of such information. The Issuer, having made all reasonable enquiries, confirms that this Offering Circular contains or incorporates all information which is material in the context of the issue and the offering of Notes, that the information contained or incorporated in this Offering Circular is true and accurate in all material respects and is not misleading, that the opinions and the intentions expressed in this Offering Circular are honestly held and that there are no other facts the omission of which would make this Offering Circular or any of such information or expression of any such opinions or intentions misleading in any material respect. Absa Corporate & Merchant Bank, a division of Absa Bank Limited, Merrill Lynch South Africa (Proprietary) Limited (together the Joint Lead Managers ) and aloecap (Proprietary) Limited (the Co-Manager ) (together the Managers, provided that where the Managers give an undertaking, either expressly or by necessary implication in favour of the Issuer, the Managers shall not include Absa Corporate & Merchant Bank, a division of Absa Bank Limited) 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 the Managers as to the accuracy or completeness of the information contained in this Offering Circular or any other information provided by the Issuer. The Managers do not accept any liability in relation to the information contained in this Offering Circular or any other information provided by the Issuer in connection with the Notes. No person has been authorised to give any information or to make any representation not contained in or not consistent with this Offering Circular or any other information supplied in connection with the Notes and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuer or the Managers. Neither this Offering Circular nor any other information supplied in connection with the Notes is intended to provide the basis of any credit or other evaluation, or should be considered as a recommendation by the Issuer or the Managers that any recipient of this Offering Circular or any other information supplied in connection with the Notes should purchase any Notes. Each investor contemplating purchasing any Notes should make its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness, of the Issuer. Neither this Offering Circular nor any other information supplied in connection with the Notes constitutes an offer or invitation by or on behalf of the Issuer or the Managers to any person to subscribe for or to purchase any Notes. The delivery of this Offering Circular does not at any time imply that the information contained herein concerning the Issuer is correct at any time subsequent to the date hereof. This Offering Circular does not constitute an offer to sell or the solicitation of an offer to buy any Notes in any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such jurisdiction. Neither the Issuer nor the Managers represent that this Offering Circular may be lawfully distributed, or that any Notes may be lawfully offered, in compliance with any applicable registration or other requirements in any such jurisdiction, or pursuant to an exemption available thereunder, or assume any responsibility for facilitating any such distribution or offering. In particular, no action has been taken by the Issuer or the Managers which would permit a public offering of any Notes or distribution of this document in any jurisdiction where action for that purpose is required. Accordingly, no Notes may be offered or sold, directly or indirectly, and neither this Offering Circular nor any advertisement or other offering material may be distributed or published in any jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations and the Managers have represented that all offers and the procurement of sales by them will be made on the same terms. The distribution of this Offering Circular and the offer or sale of Notes may be restricted by law in certain jurisdictions. Persons into whose possession this Offering Circular or any Notes come must inform themselves about, and observe, any such restrictions. In particular there are restrictions on the distribution of this Offering Circular and the offer or sale of Notes in the United States, the United Kingdom and the Republic of South Africa. 1

2 (ABSA) ABSA PRELIM OFFERING CIRC Page 2 Proof 16 The Notes have not been and will not be registered under the United States Securities Act of 1933 (the Securities Act ). Notes may not be offered, sold or delivered within the United States or to US persons except in accordance with Regulation S under the Securities Act. In connection with the Issue and distribution of any Notes, Absa Corporate & Merchant Bank, a division of Absa Bank Limited and/or Merrill Lynch South Africa (Proprietary) Limited may over-allot or effect transactions which stabilise or maintain the market price of the Notes at a level which might not otherwise prevail. Such stabilising, if commenced, may be discontinued at any time and shall be carried out in accordance with all applicable laws and regulations. 2

3 (ABSA) ABSA PRELIM OFFERING CIRC Page 3 Proof 16 TABLE OF CONTENTS Page Summary of the Notes 4 Form of the Notes 7 Terms and Conditions of the Notes 8 Use of Proceeds 16 Description of the Issuer 17 Capitalisation of Absa Bank Limited and its subsidiaries 30 Financial Statements of Absa Bank Limited 31 Report of the Independent Auditors 61 South African Taxation 62 Subscription and Sale 64 General Information 65 INCORPORATION OF DOCUMENTS BY REFERENCE The audited annual financial statements of the Issuer for the financial years ended 31 March 2000 and 1999 are hereby incorporated by reference and form part of the Offering Circular. Copies of the audited annual financial statements of the Issuer are available free of charge at the office of the Issuer. 3

4 (ABSA) ABSA PRELIM OFFERING CIRC Page 4 Proof 16 SUMMARY OF THE NOTES The following summary does not purport to be complete and is taken from, and is qualified by, the remainder of this Offering Circular. Amount Blocked Rand The initial issue of Notes will be for a Principal Amount of ZAR1,600,000,000; Blocked Rand may be used for the purchase of Notes, subject to South African Exchange Control Regulations; Calculation Agent The Issuer shall act as calculation agent in respect of the period 22 March 2002 to 22 March An independent calculation agent shall be appointed for the period 23 November 2009 to 22 March 2014; Call Option Central Depository Central Depository Participant Clearing System Co-Manager Currency Denomination of Notes Description Electronic Settlement Form of Notes Governing Law Interest Payment Dates Interest Rate The Issuer will have the option to redeem the Notes at their Principal Amount on 22 March 2009 subject to the prior approval of the Registrar of Banks; The Central Depository Limited, registered as a central securities depository in terms of the Custody and Administration of Securities Act of 1992 (or any successor act thereto); A depositary institution accepted as a participant by the Central Depository in terms of the Custody and Administration of Securities Act, 1992; Universal Exchange Corporation Limited ( UNEXcor ) acting as the approved electronic clearing house, carrying on the role of matching, clearing and facilitation of settlement of all transactions carried out on BESA; aloecap (Proprietary) Limited; South African Rand ( R or ZAR ); Notes will be issued with a minimum denomination of ZAR1,000,000; Absa Bank Limited ZAR1,600,000,000 Subordinated Callable Notes due 22 March 2014; The Notes will be issued, cleared and settled in accordance with the rules of BESA through the UNEXcor electronic settlement system. Euroclear and Cedelbank access BESA through their Central Depository Participant, The Standard Bank of South Africa Limited. The Notes will be cleared by BESA recognised Central Depository Participants who will follow the electronic settlement procedures prescribed by BESA and the Central Depository. Interest and principal payments will be made via electronic funds transfer; The Notes will be issued in registered form as described in Form of the Notes below; The Notes will be governed by, and construed in accordance with, the laws of the Republic of South Africa; Interest is payable (a) in arrear on 22 March and 22 September of each year, provided that the last date for payment shall be 22 March 2009, and (b) quarterly in arrear thereafter on 22 March, 22 June, 22 September and 22 December, with the first quarterly payment commencing on 22 June 2009; 14.25% per annum over the period from and including 22 March 2002 to but excluding 22 March 2009 and at a rate to be determined by the Calculation Agent in accordance with the Terms and Conditions over the period from and including 22 March 2009 to but excluding 22 March 2014, as described under 4

5 (ABSA) ABSA PRELIM OFFERING CIRC Page 5 Proof 16 Terms and Conditions Interest below; Issuer Joint Lead Managers Absa Bank Limited; Absa Corporate & Merchant Bank, a division of Absa Bank Limited and Merrill Lynch South Africa (Proprietary) Limited; Launch Date 18 March 2002; Listing Managers Maturity Date Principal Amount Rating Redemption Amount Application has been made for the Notes to be listed on BESA; Absa Corporate & Merchant Bank, a division of Absa Bank Limited, Merrill Lynch South Africa (Proprietary) Limited and aloecap (Proprietary) Limited, provided that where the Managers give an undertaking, either expressly or by necessary implication in favour of the Issuer, the Managers shall not include Absa Corporate & Merchant Bank, a division of Absa Bank Limited; Unless previously redeemed, purchased or cancelled, the Notes will mature on 22 March 2014; The face value of each Note; The Issuer has a domestic long-term credit rating of AA and a domestic short-term credit rating of Al+ from Fitch Southern Africa (Proprietary) Limited, a wholly-owned subsidiary of Fitch Ratings Limited, London. The Issuer also has domestic credit ratings of AA and A1+ from CA Ratings for long-term and short-term ratings, respectively; per cent; Register The Register maintained by the Transfer Secretary in terms of Condition 10, shall be closed 10 days prior to an Interest Payment Date and 10 days prior to the due date for redemption of the Notes, or such period (which shall not be shorter than 5 days) as the Issuer may decide to determine. The Register will list the Central Depository (or its nominee) and any individual holders of Definitive Notes. In addition, the Central Depository will keep records of the Central Depository Participants with Notes credited to their accounts and the Central Depository Participants will keep an electronic sub-register of Noteholders with a beneficial interest in Notes immobilised at the Central Depository; Selling Restrictions Settlement Agents Stabilisation Stamp Duty There are selling restrictions in relation to the United States, the United Kingdom and the Republic of South Africa; As at the date of this Offering Circular, the BESA recognised Settlement Agents who are also Central Depository Participants are Absa Bank Limited, FirstRand Bank Limited, Nedcor Bank Limited, The Standard Bank of South Africa Limited and the South African Reserve Bank. Euroclear and Cedelbank will settle offshore transfers through their Central Depository Participant, The Standard Bank of South Africa Limited; Stabilisation shall be permitted to be undertaken by Absa Corporate & Merchant Bank, a division of Absa Bank Limited and/or Merrill Lynch South Africa (Proprietary) Limited. Any stabilisation undertaken shall be in accordance with the rules and regulations of BESA, the Subscription Agreement as well as all applicable laws and regulations of the Republic of South Africa; In terms of the South African legislation, stamp duty is not payable on the 5

6 (ABSA) ABSA PRELIM OFFERING CIRC Page 6 Proof 16 transfer of any Notes; Status of Notes Subscription Agreement Taxation Trading The Notes will constitute direct, unsecured and subordinated obligations of the Issuer and will be subordinated to unsecured, unsubordinated claims in a liquidation of the Issuer. The Notes will not be subordinated to any categories of share capital or other subordinated obligations of the Issuer. The Notes rank pari passu among themselves and with all other present and future unsecured and subordinated obligations of the Issuer, save for those that have been accorded preferential rights by law; The Agreement entered into between the Issuer, the Joint Lead Managers and the Co-Manager on 19 March 2002; All payments in respect of the Notes will be made without withholding or deduction for or on account of taxes levied in South Africa, subject to certain exceptions as provided in Condition 7. In the event that withholding tax or such other deduction is required by law, then the Issuer will pay such additional amounts as shall be necessary in order that the net amounts received by the holders of the Notes after such withholding or deduction shall equal the respective amounts of principal and interest which would otherwise have been receivable in respect of the Notes, as the case may be, in the absence of such withholding or deduction; Application has been made to list the notes on BESA (under stock code number: ABO2) and the Notes may be traded by and through members of BESA from 14 March,

7 (ABSA) ABSA PRELIM OFFERING CIRC Page 7 Proof 16 FORM OF THE NOTES The Notes will be offered and sold in reliance on Regulation S and will be sold in off-shore transactions to non-us persons outside the United States. The Notes will initially be represented by a global Note in registered form, without interest coupons ( the Global Note ) which will be deposited and registered in the name of, and for the account of The Central Depository Limited (Reg No. 1991/000941/06), or its nominee, registered as a central securities depository in terms of the Custody and Administration of Securities Act of 1992 (or any successor act thereto) ( the Central Depository ). In the event that an interest in the Global Note is exchanged for Notes in definitive registered form ( Definitive Notes ), such Notes may be exchanged for one another only in accordance with the Terms and Conditions and such procedures as are substantially consistent with the provisions set out by the participants in the clearing system, who are approved by BESA to perform electronic net settlement of both funds and scrip on behalf of market participants ( Central Depository Participants ), BESA and the Central Depository. The Global Note shall be immobilised in the Central Depository and shall be registered in the Register in the name of the Central Depository or its nominee. Owners of beneficial interests in the Global Note will be entitled or required, as the case may be, under the circumstances described under Terms and Conditions of the Notes Transfer and Exchange of Notes and Replacement of Notes, to receive physical delivery of Definitive Notes. Such Definitive Notes will not be issuable in bearer form. Definitive Notes will be registered in the Register in the names of the individual Noteholders. Payments of interest on Definitive Notes and the Global Note will be made on the Interest Payment Dates of each year until the due date for redemption (the Redemption Date ) to the persons shown on the Register at the close of business on the tenth day (whether such is a business day or not) prior to any Interest Payment Date or the Redemption Date. Payments of the principal of, and interest (if any) on, the Global Note will be made to the Central Depository, or its nominee, as the registered holder of the Global Note, who will in turn transfer such funds, via the Central Depository Participants, to the holders of beneficial interests in Notes. The Issuer will not have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Any reference in this section Form of the Notes to the Central Depository shall, whenever the context permits, be deemed to include a reference to any additional or alternate depository approved by the Issuer, BESA and the Managers. For so long as any of the Notes are represented by the Global Note registered in the name of the Central Depository or its nominee, each investor shown in the records of the relevant Central Depository Participants as holder of an interest in a particular nominal amount of such Notes (in which regard any certificate or other document issued by a Central Depository Participant as to the nominal amount of such Notes standing to the account of any person shall be prima facie proof of such interest), shall, in respect of the giving of any notice under Condition 12, or in respect of any Event of Default (as defined under Terms and Conditions below), be entitled to give the notice or make the demand in respect of the nominal amount of Notes credited to the account of any such person and for such purposes shall be deemed to be a Noteholder. Notes which are represented by the Global Note will only be transferable in accordance with the rules and procedures for the time being of the Central Depository, Central Depository Participants and BESA. 7

8 (ABSA) ABSA PRELIM OFFERING CIRC Page 8 Proof 16 TERMS AND CONDITIONS OF THE NOTES The following is the text of the Terms and Conditions of the Notes which (subject to completion and amendment) will be incorporated by reference onto each Note in definitive form and will be attached to the Note in global form. In addition, each Note in definitive form and the Note in global form will be endorsed with the following wording: The Notes are issued in respect of secondary share capital, as defined in section 70 of the Banks Act, 1990 (Act No. 94 of 1990 the Banks Act ). The direct or indirect acquisition of the Notes by a bank as defined in the Banks Act, or by a non-banking subsidiary of that bank, must be regarded as an impairment of the capital of the bank in question, in an amount equal to the book value of the Notes, by the acquiring bank when it calculates its capital adequacy requirements. 1. FORM AND DENOMINATION The notes are subordinated callable, registered notes with a minimum denomination of ZAR1,000,000 (the Notes ). The Principal Amount of the Notes means, in relation to any number of Notes, such number of Notes multiplied by ZAR1,000,000. It is Absa Bank Limited s (the Issuer ) intention to issue Notes for a total amount of ZAR1,600,000,000, provided that nothing contained herein shall preclude the Issuer from, at any time, increasing the size of the issue by issuing further Notes on these Terms and Conditions. The Notes will initially be represented by a Global Note in registered form, without interest coupons (the Global Note ) which will be deposited and registered in the name of, and for the account of The Central Depository Limited (Reg No. 1991/000941/06), its nominee or its successor, registered as a central securities depository in terms of the Custody and Administration of Securities Act of 1992 (or any successor act thereto) ( Central Depository ). Owners of a beneficial interest in the Global Note shall be entitled to exchange such beneficial interest for a Note in definitive registered form ( Definitive Note ). 2. TITLE Subject as set out below, title to the Notes will pass upon registration of transfer in the Register in accordance with these Terms and Conditions. The Issuer and the Transfer Secretary may deem and treat the registered holder of any Note as the absolute owner thereof (whether or not overdue and notwithstanding any notice of ownership or writing thereon or notice of any previous loss or theft thereof) for all purposes but, in the case of any Global Note, without prejudice to the provisions set out in the next succeeding paragraph. For so long as any of the Notes is represented by the Global Note registered in the name of, and held by the Central Depository or its nominee, each person shown in the records of the relevant Central Depository Participants as holder of an interest in a particular nominal amount of such Notes (in which regard any certificate or other document issued by the Central Depository Participant as to the nominal amount of such Notes standing to the account of any person shall be prima facie proof of such interest), shall be treated by the Issuer, the Transfer Secretary and the Central Depository Participants as the holder of such nominal amount of such Notes for all purposes other than with respect to the payment of principal or interest on the Notes, for which purpose the registered holder of the relevant Note shall be treated by the Issuer as the holder of such Notes in accordance with and subject to the terms of the Notes (and the expression Noteholder and related expressions shall be construed accordingly). Should an Event of Default (as defined in Condition 8) occur, then for the purposes of pursuing a remedy or issuing a notice of default (as described in Condition 8) against the Issuer, the Noteholder of an interest in the Global Note shall be deemed to be in the same position as a Noteholder of a Definitive Note whose name was entered into the Register. Notes which are represented by the Global Note, or by a Definitive Note, will be transferable only in accordance with the rules and procedures for the time being of the Central Depository and the Central Depository Participants. Reference to the Central Depository shall, whenever the context so permits be deemed to include a reference to any additional, alternative or successor depository approved by the Issuer and BESA. References to BESA shall include any exchange which operates as a successor exchange to BESA. Transfer Secretary means Mercantile Registrars Limited, or any successor secretary appointed by the Issuer. 8

9 (ABSA) ABSA PRELIM OFFERING CIRC Page 9 Proof STATUS AND SUBORDINATION The Notes constitute direct, unsecured and subordinated obligations of the Issuer. The rights of the Noteholders against the Issuer in respect of the Notes will be subordinated to unsecured, non-preferent, unsubordinated or concurrent claims (together Concurrent Claims ) in a liquidation of the Issuer. Whilst any Concurrent Claims are owing, the Noteholders will not be entitled to a claim in respect of the Notes to the extent that such claim would reduce or diminish any liquidation dividend payable in respect of the Concurrent Claims. The Notes will not be subordinate to any categories of share capital or other subordinated obligations of the Issuer. The Notes rank pari passu among themselves and with all other present and future unsecured and subordinated obligations of the Issuer, save for those that have been accorded preferential rights by law. 4. REDEMPTION AND PURCHASES Final redemption Subject to these Terms and Conditions, the Notes shall be redeemed at their Principal Amount on 22 March Early redemption at the option of the Issuer The Issuer may at its option and subject to the consent of the Registrar of Banks, having given not less than 30 nor more than 60 days notice to Noteholders in accordance with Condition 12 (which notice shall be irrevocable), redeem all Notes, but not some only, at their Principal Amount on 22 March Redemption for tax reasons If the Issuer, immediately prior to the giving of the notice referred to below, is of the reasonable opinion that: (a) as a result of any change in, or amendment to, the laws or regulations of the Republic of South Africa or any political sub-division of, or any authority in, or of, the Republic of South Africa having power to tax, or any change or amendment becomes effective after the date of this Offering Circular, the Issuer is or would be required to pay additional amounts as provided or referred in Condition 7; and (b) the requirement cannot be avoided by the Issuer taking reasonable measures available to it, then the Issuer may at its option and subject to the consent of the Registrar of Banks, having given not less than 30 nor more than 60 days notice to Noteholders in accordance with Condition 12 (which notice shall be irrevocable), redeem all Notes, but not some only, at their Principal Amount (together with interest accrued to the date fixed for such redemption) provided that no notice of redemption shall be given earlier than 90 days before the earliest date on which the Issuer would be required to pay such additional amounts were a payment in respect of the Notes due. Other redemption The redemption of Notes represented by the Global Note shall take place in accordance with the applicable procedures of BESA, the Central Depository and the Central Depository Participants, relating to the redemption of debt securities. In the event that the redeeming Noteholder is the holder of a Definitive Note, then such Noteholder shall, at least 15 days prior to the Redemption Date, deliver the Definitive Note to the Issuer for cancellation. Purchases The Issuer may (subject to the consent of the Registrar of Banks) at any time purchase Notes at any price in the open market or otherwise. Such Notes may be held, resold, or, at the option of the Issuer cancelled. Cancellation All Notes which are redeemed will forthwith be cancelled. All Notes so cancelled and the Notes purchased and cancelled pursuant to the preceding paragraph shall be held by the Issuer and cannot be re-issued or resold. 5. INTEREST The Notes will bear interest from and including 22 March 2002 (the Issue Date ) payable to but excluding the Redemption Date semi-annually in arrear or quarterly, as the case may be (each an Interest Payment Date ). For the purpose of these Terms and Conditions, Interest Period means the three or six month period (as the case may be) commencing on and including the day of any Interest Payment Date and ending on but excluding the following Interest Payment Date, provided that the first Interest Period shall be from and including the Issue Date to but excluding the first Interest Payment Date thereafter, and the last Interest Period shall end on and exclude the Redemption Date. 9

10 (ABSA) ABSA PRELIM OFFERING CIRC Page 10 Proof 16 Interest in respect of each Interest Period shall be payable on the Interest Payment Date and in respect of Interest Payment Dates from and including 22 March 2002 to and including 22 March 2009 will amount to ZAR71,250 per ZAR1,000,000 denomination. In respect of Interest Payment Dates from and including 22 March 2009 to and including 22 March 2014 the amount of interest will be as notified by the Calculation Agent in accordance with this Condition. If interest is required to be calculated for a period of other than a full Interest Period, such interest shall be calculated on the basis of a 365-day year consisting of 12 months of actual days each and, in the case of an incomplete month, the number of days elapsed. Each Note will cease to bear interest from the Redemption Date unless, upon due presentation thereof, payment of principal is improperly withheld or refused. In such event, interest will continue to accrue until the date on which all amounts due in respect of such Note have been paid. Interest Rate The rate of interest applicable to the Notes (the Interest Rate ) shall be 14.25% per annum from and including 22 March 2002 to but excluding 22 March 2009 and at the rate (expressed as a percentage rate per annum) to be determined by the Calculation Agent in respect of the Notes in accordance with the provisions set out below from and including 22 March 2009 to but excluding 22 March The Calculation Agent shall determine the Interest Rate for the period from and including 22 March 2009 to but excluding 22 March 2014 on the day falling twenty-five days prior to 22 March 2009 (the Interest Determination Date ), provided that if the Interest Determination Date is not a Business Day, it shall be postponed to the immediately following Business Day. For the purpose of these Terms and Conditions Business Day means a day which is a day, other than a Saturday or Sunday or public holiday, on which commercial banks and foreign exchange markets settle payments in Johannesburg. Step-up Interest Rate The Interest Rate for each Floating Interest Period shall be a floating rate determined by the Calculation Agent on each Interest Determination Date. Such Interest Rate shall be the sum of (a) 4.645% per annum, and (b) the following rate determined by the Calculation Agent: (i) the average mid-market yield rate per annum for three month ZAR deposits which appears on the Reuters Screen SAFEY page at or about 11:00 Johannesburg time on the Interest Determination Date; or (ii) if such a rate per annum does not appear on the Reuters Screen SAFEY page or the Reuters Screen SAFEY page is unavailable, the rate determined on the basis of the average of the mid-market deposit rates quoted by at least two of The Standard Bank of South Africa Limited, FirstRand Bank Limited, Nedcor Bank Limited, ABSA Bank Limited or Investec Bank Limited (the Reference Banks ) at or about 11:00 Johannesburg time on the Interest Determination Date. The Calculation Agent shall request the principal Johannesburg office of each of the Reference Banks to provide a quotation of its rate in respect of the three month ZAR deposits; or (iii) if on any Interest Determination Date on which sub-paragraph (ii) applies fewer than two such quotations are provided by the Reference Banks, the rate shall be determined by the Calculation Agent acting in good faith and in a commercially reasonable manner, using a representative rate. Calculation of Interest Amount The Calculation Agent will, as soon as practicable after any Interest Determination Date, calculate the amount of interest (the Interest Amount ) payable in respect of the Interest Payment Dates from and including 22 March 2009 to and including 22 March 2014 per ZAR1,000,000 denomination. Publication The Calculation Agent will cause the Interest Rate and the Interest Amount to be notified to all Central Depository Participants the Issuer and BESA (or such other exchange on which the Notes may be listed) as soon as practicable after such determination but in any event not later than 22 March Notice thereof shall also promptly be given to the Noteholders. 10

11 (ABSA) ABSA PRELIM OFFERING CIRC Page 11 Proof 16 Notifications etc All notifications, opinions, determinations, certificates, calculations, quotations and decisions given, expressed, made or obtained for the purpose of this Condition 5, whether by a primary dealer (or any of them) or the Calculation Agent shall (in the absence of wilful default, negligence, bad faith or manifest error) be binding on the Issuer, the Calculation Agent and the Noteholder and (in such absence as aforesaid) no liability to the Noteholders shall attach to the Issuer, the primary dealers or the Calculation Agent in connection with the exercise or non-exercise by them of their powers, duties and discretions hereunder. 6. PAYMENTS The principal and interest on the Notes shall be paid by the Issuer in the currency of the Republic of South Africa. Payment in respect of the Notes shall be made by electronic funds transfer to the account of the Noteholder as set forth in the register of Noteholders (the Register ) maintained by the Issuer, or in the case of joint registered Noteholders, the account of that one of them that is first named in the Register in respect of that Note. If any day for payment of principal or interest in respect of any Note is not a Business Day, the holder shall not be entitled to payment until the next Business Day following such day or to any interest or other sums in respect of postponed payment. Payments will be subject in all cases to any fiscal or other laws and regulations applicable thereto in the place of payment. Payments of interest and of principal on a Definitive Note shall be made to the registered holder of such Note, as shown in the Register on the close of business on the tenth day (whether or not such a day is a Business Day) ( Record Date ) prior to such payment date. In addition to the above, in the case of a final redemption payment, the holder of the Definitive Note shall be required, at least 10 days prior to the payment date, to surrender such Definitive Note at the offices of the Issuer. Payments of interest and principal in respect of the Global Note will be made to the Central Depository, or such other registered holder of the Global Note, as shown in the Register on the close of business on the Record Date preceding an Interest Payment Date or the Redemption Date and the Issuer will be discharged by proper payment to, or to the order of the registered holder of the Global Note in respect of each amount so paid. Each of the persons shown in the records of the Central Depository and the Central Depository Participants, as the case may be, shall look solely to the Central Depository or the Central Depository Participant, as the case may be, for his share of each payment so made by the Issuer to, or to the order of, the registered holder of such Global Note. Payments of interest and principal in respect of the Global Note shall be recorded by the Central Depository or such other registered holder of the Global Note, distinguishing between interest and principal and such record of payment by the registered holder of the Global Note shall be prima facie proof of such payments. 7. TAXATION All payments in respect of the Notes will be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature ( Taxes ) imposed or levied by, or on behalf of, the Republic of South Africa, or any political subdivision of, or any authority in, or of, the Republic of South Africa having power to tax, unless such withholding or deduction of Taxes is required by law. In that event, the Issuer will pay such additional amounts as may be necessary in order that the net amounts received by the Noteholders after the withholding or deduction shall equal the respective amounts which would have been receivable in respect of the Notes in the absence of the withholding or deduction; except that no such additional amounts shall be payable with respect to any Note: (a) by or on behalf of a Noteholder, who is liable for such taxes or duties in respect of such Note by reason of his having some connection with the Republic of South Africa other than the mere holding of such Note or the receipt of principal or interest in respect thereof; or (b) by or on behalf of a Noteholder who would not be liable or subject to the withholding or deduction by making a declaration of non-residence or other similar claim for exemption to the relevant tax authority (the effect of which is not to require the disclosure of the identity of the relevant Noteholder); or (c) more than 30 days after the Relevant Date (as defined below) except to the extent that the holder thereof would have been entitled to an additional amount on presenting the same for payment on such thirtieth day. As used herein, the Relevant Date means the date on which such payment first becomes due, except that, if the full amount of the moneys payable has not been duly received by the Central Depository on or prior to such due date, it means the date on which the full amount of such moneys having been so received, notice to that effect is duly given to the Noteholders in accordance with Condition

12 (ABSA) ABSA PRELIM OFFERING CIRC Page 12 Proof 16 Any reference in these Terms and Conditions to any amounts in respect of the Notes shall be deemed also to refer to any additional amounts which may be payable under these Terms and Conditions or under any undertakings given in addition to, or in substitution for, these Terms and Conditions. 8. EVENTS OF DEFAULT If the Issuer fails to pay any amount due under the Notes on the due date of payment thereof and such failure continues for longer than five days, any holder of a Note may, subject as provided below, at its discretion and without notice, institute such proceedings against the Issuer as it may think fit to enforce the obligations of the Issuer under such Notes, provided that the Issuer shall not be obliged, save in the case of the institution of liquidation, winding-up, administration or curatorship proceedings, to pay any sum or sums sooner than the same would otherwise have been payable by it. In the event that the Issuer is subject to any liquidation, winding-up, administration or curatorship proceedings, whether provisionally or finally, then any holder of Notes may by written notice to the Issuer demand repayment of the Principal Amount of the Notes together with accrued interest to the date of payment, in which event such amounts shall be immediately due and repayable. 9. TRANSFER AND EXCHANGE OF NOTES AND REPLACEMENT OF NOTES Notes which are represented by the Global Note will be exchangeable and transferable only in accordance with the rules and operating procedures for the time being of the Central Depository, Central Depository Participants and BESA, as the case may be (the Applicable Procedures ). Interests in Notes which are in global form and are registered in the name of, and held by, the Central Depository, or its nominee, may, in terms of existing law and facilities, be transferred by way of electronic book entry in the securities accounts of the relevant Central Depository Participants. Such transfers will not be recorded in the Register and the Central Depository, or its nominee, will continue to be reflected as the relevant registered holder of the Notes. Interests in the Global Note will be exchangeable for Definitive Notes if: (a) the Central Depository notifies the Issuer that it is unwilling or unable to continue as depository for the Global Note and a successor depository satisfactory to the Issuer and BESA is not available; or (b) the Central Depository is closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or announces its intention permanently to cease business, and a successor depository satisfactory to the Issuer and BESA is not available; or (c) UNEXcor notifies the Issuer that it is unwilling or unable to continue as clearing system for the BESA and the Central Depository and a successor clearing system satisfactory to the Issuer and BESA is not available; or (d) UNEXcor is closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or announces its intention permanently to cease business, and a successor clearing system satisfactory to the Issuer and BESA is not available; or (e) an Event of Default (as defined in Condition 8) has occurred and is continuing with respect to the Notes; or (f) a written request for one or more Notes in definitive form is made by a holder of a beneficial interest in a registered Global Note; provided that in the case of this (f), such written notice or request, as the case may be, is submitted to the relevant Central Depository Participant, by the beneficial owner not later than 14 days prior to the requested date of such exchange and the Applicable Procedures for obtaining such a Definitive Note from the Issuer are followed, and furthermore, provided that joint Noteholders shall only be entitled to a single certificate in respect of that joint holding. Upon the occurrence of any of the events described in the preceding sentence, the Issuer shall cause the appropriate Definitive Notes to be delivered. If any Note (including the Global Note) is mutilated, defaced, stolen, destroyed or lost it may be replaced at the office of the Transfer Secretary on payment by the claimant of such costs and expenses as may be incurred in connection therewith and indemnity as the Transfer Secretary may reasonably require. Mutilated or defaced Notes must be surrendered before replacements will be issued. Transfers between participants in the Central Depository will be effected in the ordinary way in accordance with the Applicable Procedures. 12

13 (ABSA) ABSA PRELIM OFFERING CIRC Page 13 Proof 16 A Definitive Note may be transferred in whole or in part (in denominations of ZAR1,000,000 or multiples thereof) by the holder or holders surrendering the Definitive Note for registration of the transfer of the Definitive Note (or the relevant part of the Definitive Note) at the specified office of the relevant Central Depository Participant (who will, as soon as practicable, forward such surrendered Definitive Note to the Transfer Secretary and will give to the Transfer Secretary all relevant details to enable it to process the transfer), with the form of transfer thereon duly executed by, or accompanied by a written instrument of transfer (complying with South African legal requirements) in a form satisfactory to the relevant Central Depository Participant, Central Depository, BESA and the Transfer Secretary duly executed by the transferor and the transferee thereof, their attorney or attorneys duly authorised in writing and upon the Central Depository Participant, after due and careful enquiry, being satisfied with the documents of title and the identity of the person making the request and subject to such reasonable regulations as the relevant Central Depository Participant and the Transfer Secretary may prescribe. Transfer shall only be in respect of denominations of ZAR1,000,000 each or a multiple thereof and consequently neither the Issuer nor the Transfer Secretary will recognise any fraction of a denomination of ZAR1,000,000. Subject as provided above, the Central Depository Participant will, within three business days of receipt by it (being for this purpose a day on which banks are open for business in the city where the specified office of the Issuer is located) of the request (or such longer period as may be required to comply with any applicable fiscal or other laws, regulations or Applicable Procedures), authenticate and deliver at its specified office to the transferee or (at the risk of the transferee) send by mail to such address as the transferee may request a new Definitive Note in definitive form of a like aggregate nominal amount to the Definitive Note (or the relevant part of the Definitive Note) transferred. In the case of the transfer of a part only of a Definitive Note, a new Definitive Note in respect of the balance of the Note not transferred will be so authenticated and delivered or (at the risk of the transferor) sent to the transferor. The transferor of a Definitive Note will be deemed to remain the owner thereof until the transferee is registered in the Register as the holder thereof. Exchanges or transfers by a holder of a Definitive Note to a transferee who takes delivery of such Note through the Global Note will be made no later than 60 days after the receipt by the Central Depository Participant of the Definitive Note to be so exchanged or transferred and only in accordance with the Applicable Procedures, and, if applicable, upon receipt by the Central Depository Participant of a written certification from the transferor. The costs and expenses of effecting any exchange or registration of transfer pursuant to the foregoing provisions (except for the expenses of delivery by other than regular mail (if any) and, if the Issuer shall so require, for the payment of a sum sufficient to cover any tax or other governmental charge or insurance charges that may be imposed in relation thereto which will be borne by the Noteholder) will be borne by the Issuer. No transfer will be registered whilst the Register is closed. The executors of or administrators of a deceased Noteholder (not being one of several joint holders) and in the case of the death of one or more of several joint holders the survivor or survivors of such joint holders shall be the only person recognised by the Issuer and the Transfer Secretary as having any title to such Notes. Any person becoming entitled to Notes in consequence of the death or bankruptcy of the holder of such Notes may, upon producing such evidence that he holds the position in respect of which he proposes to act under this paragraph or of his title, require the Issuer and the Transfer Secretary to register such person as the holder of such Notes or, subject to the requirements of this Condition 9, to transfer such Notes. The Issuer shall be entitled to retain any amount payable upon the Notes to which any person is so entitled until such person shall be registered as aforesaid or shall duly transfer the Notes. The joint holders of Notes shall be entitled to one Note only in respect of their joint holding which shall, except where they otherwise direct, be delivered to the joint holder whose name appears first in the register in respect of such joint holding. Where a Noteholder has transferred only part of his holding of Notes represented by a single Definitive Note there shall be delivered to him a Note in respect of the balance of such holding. 10. REGISTER The Register shall be kept at the offices of the Transfer Secretary. The Register shall contain the name, address, and bank account details of the registered Noteholder. The Register shall set out the Principal Amount of the Note issued to such Noteholder and shall show the date of such issue and the date upon which the Noteholder became registered as such. The Register shall show the serial number of Notes issued. The Register shall be open for inspection during 13

14 (ABSA) ABSA PRELIM OFFERING CIRC Page 14 Proof 16 the normal business hours of the Transfer Secretary to any Noteholder or any person authorised in writing by any Noteholder. The Transfer Secretary shall not be obliged to record any transfer while the Register is closed. The Transfer Secretary shall not be bound to enter any trust into the Register or to take notice of any or to accede to any trust executed, whether expressly or implied, to which any Note may be subject. The Register shall be closed during the 10 days preceding each Interest Payment Date and the Redemption Date. The Transfer Secretary shall alter the Register in respect of any change of name, address or bank account number of any of the Noteholders of which it is notified. 11. LISTING An application has been made for the Notes to be listed on BESA under stock code ABO NOTICE All notices regarding the Notes shall be published in (i) a leading English language daily newspaper of general circulation in the Republic of South Africa and (ii) for so long as the Notes are listed on BESA, 2 daily newspapers of general circulation in Johannesburg. Any such notice will be deemed to have been given on the date of the first publication in the newspapers listed in (i) and (ii) above, as the case may be. All notices to the Noteholders will be valid if mailed to their registered addresses appearing on the Register and published, for so long as the Notes are listed on BESA, in 2 daily newspapers of general circulation in Johannesburg. Any such notice shall be deemed to have been given on the fourth day after the day on which it is couriered in a correctly addressed envelope. Any notice to the Issuer shall be deemed to have been received by the Issuer, if delivered to the registered office of the Issuer, on the fourth day after the day on which it is mailed. Other than in the case of Notes listed on BESA until such time as any Definitive Notes are issued, there may, so long as the Global Note is or are held in its or their entirety by the Central Depository, be substituted for such publication in such newspaper the delivery of the relevant notice to the Central Depository, the Central Depository Participants and BESA for communication by them to the holders of the Notes. Any such notice shall be deemed to have been given to the holders of the Notes on the seventh day after the day on which the said notice was given to the Central Depository, the Central Depository Participants and BESA. Notices to be given by any holder of the Notes shall be in writing and given by lodging the same, together with a certified copy of the relevant Note, with the Issuer. Whilst any of the Notes are represented by the Global Note, such notice may be given by any holder of a beneficial interest in the Global Note to the Issuer via the holder s relevant Central Depository Participant, in such manner as the Issuer and the relevant Central Depository Participant may approve for this purpose. 13. AMENDMENT OF THESE TERMS AND CONDITIONS These Terms and Conditions set out all the rights and obligations relating to the Notes and no addition, variation or consensual cancellation shall be of any force or effect unless reduced to writing and signed by or on behalf of the Issuer and the Noteholders. The Issuer may, with the prior sanction of an Extraordinary Resolution of a meeting of Noteholders amend these Terms and Conditions, provided that no such amendment shall be of any force or effect unless the notice of the intention to make such an amendment shall have been given to all Noteholders by notice in terms of Condition 12 above. The expression Extraordinary Resolution when used in the Terms and Conditions means a resolution passed at a meeting of the Noteholders (duly convened) by a majority consisting of not less than 75 per cent of the persons voting thereat upon a show of hands or if a poll be duly demanded then by a majority consisting of not less than 75 per cent of the votes given on such poll. 14