Banco Santander Totta, S.A. (incorporated with limited liability in Portugal)

Transcription

1 FIFTH SUPPLEMENT (dated 23 December 2010) to the BASE PROSPECTUS (dated 4 April 2008) Banco Santander Totta, S.A. (incorporated with limited liability in Portugal) 5,000,000,000 Covered Bonds Programme This fifth Supplement dated 23 December 2010 (the Supplement ) to the Base Prospectus dated 4 April 2008, as supplemented on 30 April 2008, 17 July 2008, 17 July 2009 and 19 July 2010 (the Base Prospectus ), constitutes a supplement to the Base Prospectus for the purposes of Articles 135-C, 142 and 238 of the Portuguese Securities Code prepared in connection with the Covered Bonds Programme (the Programme ) established by Banco Santander Totta, S.A. (the Issuer, fully identified in the Base Prospectus). Terms defined in the Base Prospectus have the same meaning when used in this Supplement. Each of the Issuer, the members of its Board of Directors, the members of its Supervisory Board (see Management and Statutory Bodies) and its Statutory Auditor (see Management and Statutory Bodies) hereby declares that, to the best of its knowledge (each having taken all reasonable care to ensure that such is the case) the information contained in this Fifth Supplement is in accordance with the facts and does not omit anything likely to affect the import of such information. This Supplement is supplemental to, and should be read in conjunction with, the Base Prospectus. To the extent that there is any inconsistency between any statement in this Supplement and any other statement in or incorporated by reference in the Base Prospectus, the statements in this Supplement will prevail. Save as disclosed in this Supplement, no other significant new factor, material mistake or inaccuracy relating to information included in the Base Prospectus has arisen or been noted, as the case may be, since the publication of the Base Prospectus.

2 I. GENERAL AMENDMENTS 1. This Supplement dated 23 December 2010 shall be referred to together with the supplements dated 30 April 2008, 17 July 2008, 17 July 2009 and 19 July 2010, and references to, and the definition of, the Base Prospectus shall be amended accordingly. II. SUMMARY OF THE COVERED BONDS PROGRAMME 2. In the section headed Listing and Admission to Trading a reference to and [ ] 2010 shall be inserted after the reference to July III. RISKS FACTORS 3. In the section headed Regulation the fourth paragraph shall be amended as follows: Portuguese banks are required to maintain a solvency ratio of at least 8.0 per cent.. The solvency ratio is defined as Tier I capital plus Tier II capital divided by riskweighted assets. The Bank of Portugal minimum requirement for Tier I capital is 4 per cent.. The solvency ratio of the Santander Totta Group complies with the Bank of Portugal rules and in accordance with the Basel II regulatory framework and the application of: (i) the internal notations method (advanced by IRB) for calculating the equity requirements in relation to substantial part of the relevant loan portfolio; (ii) the standard method for calculating market risk; and (iii) the basic indicator method for calculating the equity requirements in relation to operational risk, Tier I Capital and Core Capital of BST rose, as of 31 December 2009, to 9.1 per cent. and 7.6 per cent. respectively (to include profit gained in 2009) and as of 30 June 2010, to 9.5 per cent and 7.9 per cent., respectively. This demonstrates the solid and solvent nature of the BST balance sheet. The capital adequacy requirements applicable to BST limit its ability to advance loans to customers and may require it to issue additional equity capital or subordinated debt in the future, which are expensive sources of funds. As far as the required minimum level of own funds is concerned, the Bank of Portugal has generally recommended that, no later than the end of September 2009, credit institutions shall have a minimum Tier 1 capital level of 8 per cent.. Furthermore, in accordance with Law 63-A/2008 of 24 November referring to the reinforcement of financial stability of credit institutions, namely to capitalisation measures through public investment - the Portuguese Government may, by ministerial order, define the level of own funds of credit institutions in such a capitalisation context; BST does not foresee that it will be necessary to recapitalise with the aid of the Portuguese government. IV. DOCUMENTS INCORPORATED BY REFERENCE 4. The following shall be included as the new paragraph (c): 2

3 (c) the unaudited financial statements of the Issuer in respect of the first semester of 2010 ended 30 June 2010;. 5. The previous paragraph (c) shall be referred as the new paragraph (d). V. FINAL TERMS FOR COVERED BONDS 6. In the section headed PART A CONTRACTUAL TERMS the references to 30 April 2008, 17 July 2008, 17 July 2009 [,/and] 19 July 2010 shall be replaced by 30 April 2008, 17 July 2008, 17 July 2009, 19 July 2010 [,/and] 23 December VI. TERMS AND CONDITIONS OF THE COVERED BONDS 7. The definition of Base Prospectus, contained in Condition 18. (Definitions), shall be amended as follows: Base Prospectus means this base prospectus dated 4 April 2008 and supplemented on 30 April 2008, 17 July 2008, 17 July 2009, 19 July 2010 and 23 December 2010, as supplemented from time to time, prepared in connection with the Programme.. 8. The definition of Other assets, contained in Condition 18. (Definitions), shall be amended as follows: Other Assets means all assets other than Mortgage Credits and Hedging Contracts which are included in the Cover Pool as specified in the Register, which comply with the following criteria: (a) (b) (c) deposits with the Bank of Portugal, in cash or in securities eligible for credit transactions in the Eurosystem; current or term account deposits with credit institutions (which are not in a control or group relationship with the Issuer) having a minimum long term rating at least equal to A2 or A or equivalent and a minimum short term rating at least equal to A-1, P-1 or F1 or equivalent; and other assets complying simultaneously with the requisites of low risk and high liquidity as defined by the Bank of Portugal. For the avoidance of doubt, the Other Assets do not include any cash collateral that may be transferred under the Hedging Contracts.. VII. CHARACTERISTICS OF THE COVER POOL 9. In the section headed Other Assets Eligibility Criteria, the first paragraph shall be amended as follows: The following assets may also be included in the Cover Pool as Other Assets: 3

4 (a) deposits with the Bank of Portugal, in cash or in securities eligible for credit transactions in the Eurosystem; (b) current or term account deposits with credit institutions (which are not in a control or group relationship with the Issuer) having a minimum long term rating at least equal to A2 or A or equivalent and a minimum short term rating at least equal to A-1, P-1 or F1 or equivalent; and (c) other assets complying simultaneously with the requisites of low risk and high liquidity as defined by the Bank of Portugal. VIII. RISK FACTORS AND DESCRIPTION OF THE ISSUER 10. In the end of the section Balance sheet, income statement and activity of the Risk Factors chapter and in a new subsection with the heading Overview of the first semester of 2010 included before the section headed Operations of the Description of the Issuer, it shall be added as follows: By the end of the first half of 2010, Santander Totta s net consolidated results amounted to million Euros, compared with million Euros in the first semester That represents a decrease of 7.0%, which is explained by the increase of provisions and impairment in the relevant period, given that the net operating income grew 3.3%. million euro Jun-10 Jun-09 Var. Net Interest Income (without Dividends) % Dividends % Net Interest Income % Net Commissions and Other Income % Commercial Revenue % Gain/Losses on Financial Transactions (1) % Operating Income % Operating Costs (255.4) (254.9) +0.2% Personnel Expenses (2) (147.7) (148.7) -0.7% Other Administrative Expenses (75.5) (75.1) +0.5% Depreciation (32.2) (31.1) +3.5% Net Operating Income % Impairment and Other Provisions (1) (2) (58.3) (30.6) +90.8% Income Before Taxes and MI % Taxes (37.8) (41.9) -9.8% Income after taxes % Minority Interests (4.2) (0.0) >200% Net Income % (*) The figures unclude the following adjustements: (1) reclassification of the gains in reducing of economic exposure to Banco Caixa Geral Totta Angola (28,1 M ) in Jun/09, reclassification of gains from sales of credit (2,9 M ) in Jun/09 and reclassification on the capital gain in the valuation of the stake in Unicre (21,2 M ) in Jun/10, from Gains on financial transactions to impairment and other provisions (2) reclassification of extraordinary costs and compensations for Pension Fund (4,8 M ) in Jun/09, from personnel expenses to other provisions. 4

5 The positive evolution of the operating income and the reinforcement of provisioning have contributed to the evolution of net income results. The operating income showed a growth of 1.9% as a result of the favourable performance of fees and gains on financial transactions, which have increased 18.3% and 88.7%, respectively, netting with the decrease of the net interest income to 10.1%. The increase of 0.2% in operating costs allowed an increase of 3.3% in net operating income. Finally, a significant reinforcement in the endowment of provisions was made when compared against the same period of the preceding year (+90.8%). Net interest income (without dividends) which represents 98.8% of the global amount of net interest income, amounted to million Euros, reflecting a decrease of 10.1% if compared to the first half of Net interest income obtained last year has been exceptionally high, benefiting not only from the time lag between the credits repricing and the fall of Euribor, but also from the results obtained through the hedging of the net interest income s sensitivity which has been reduced since the end of 2009, with the persistence of low interest rates. Net fees and other banking activity s results represented million Euros, against million in the same period of the previous year, reflecting an increase of 18.3%. This is the result of a recovery of the commercial dynamic of investment funds, verifying also a favourable evolution on financial insurances fees and on investment banking fees. The gains on financial transactions were of 47.3 million Euros, an increase of 88.7% against the same period of The growth in fees and gains on financial transactions led to an increase of 1.9% of operating income that went up to million Euros by the end of the first half of 2010 (against million Euros in the same period of the previous year). The Bank s activity during the first half was conditioned by heavy restrictions in the institutional debt and money markets, by reason of the sovereign debt tensions in Portugal and other countries in the Euro Zone. Due to this context of low liquidity, Santander Totta kept a selective credit granting policy, while focusing on attracting and withholding balance resources. 5

6 million euro Jun-10 Jun-09 Var. Business Volume 58,493 56, % Total Gross Loans (includes guarantees) 32,757 32, % Gross Loans (1) 31,062 30, % of which Commercial Banking 26,128 25, % Loans to Corporates 7,653 7, % Small Business 3,083 2, % Corporates 4,570 4, % Loans to Individuals 18,476 18, % of which Mortgage Loans (including securitization) 16,416 16, % Consumer Loans 1,648 1, % Large Corporates 4,179 4, % Customers' Resources 25,736 24, % Commercial Banking 22,661 21, % Individuals and Small Businesses 21,385 20, % Deposits 13,487 12, % Securities issued (clients) 7,898 7, % Corporates 1,276 1, % Large Corporates, Institutionals and Other 3,075 3, % (1) Includes securitization and comercial paper By the end of the first half of 2010, the business volume went up to 58.5 billion Euros, an increase of 3.5 per cent.. This was due to credit going up 2.1 per cent. to a total of 31.1 billion Euros, and resources from clients growing 5.3 per cent. to a total of 25.7 billion Euros. The credit portfolio (including collaterals) increased 2.1 per cent., reaching 32.8 billion Euros. This development was due to an increase of 2.6 per cent. in credit granted to individuals, and 6.7 per cent. in credit granted to the small business segment. The Bank was highly active in boosting the PME Investe lines, with a market share of 16 per cent. (837 million Euros). Concerning the mortgage lending segment, the first half of 2010 maintained the recovery that began in 2009, with an improvement of 22 per cent. against the comparable period of the previous year in what concerns the raising of new mortgage loans. The mortgage credit portfolio went up to 16.4 billion Euros, a growth of 2.4 per cent.. 6

7 Loans to Clients* (billion euro) Other Large Corporates SME/Small Business 2.1% Individuals 32,8 32, Jun-09 Jun-10 * Including securitization and guarantees Consumer lending is still slowing down, evidencing a variation of 4.6 per cent. as compared against the first semester Given the worsening of the economy and the rising unemployment rates, the credit portfolio risk quality indicators in the Portuguese banking system have also been worsening. However, the Bank s indicators in this respect evidence a higher quality than the average of the general banking system. By the end of June, 2010, the ratio of loans in default for more than 90 days was 1.4 per cent. (0.2 per cent. higher as compared against the first semester of 2009), while the coverage ratio of such loans was of per cent. (against per cent. in June 2009). The non performing loans, according to the Bank of Portugal s definition, reached 1.4 per cent. of the total credit portfolio by the end of the first half of 2010, above the 1.2 per cent. recorded on the same date in These should be regarded positive figures considering the current environment. Jun-10 Jun-09 Var. Non Performing Loans Ratio 1.5% 1.3% +0.2 p.p. Non Performing Loans Ratio (+90 days) 1.4% 1.2% +0.2 p.p. Non Performing Loans and Doubtful Loans Ratio 1.4% 1.2% +0.2 p.p. Non Performing Loans Coverage Ratio 107.8% 111.1% -3.4 p.p. Non Performing Loans Coverage Ratio (+90 days) 116.1% 122.7% -6.5 p.p. NPL and Doubtful Loans Coverage Ratio 114.9% 119.8% -4.9 p.p. Client s resources have reached 25.7 billion Euros at the end of the first semester 2010, 5.3 per cent. more than at the same date on the previous year. 7

8 Resources (billion euro) Off Balance Sheet On Balance Sheet 24, , Jun-09 Jun-10 Considering the lack of liquidity in international financing markets, the development of the Bank s client deposits should be highlighted, as it evidencces a growth of 10.3 per cent. in the individual and business segments if compared to June The balance sheet resources (with a weight of 68 per cent. in the total of resources raised from clients) shows a growth of 3.3 per cent., while out of balance sheet resources totalled 8.2 billion Euros, an increase of 9.7 per cent. if compared against the same period of the previous year, and which was mostly based on a growth in insurance and investment funds, signalling that private investors are regaining confidence in the financial system. million euro Jun-10 Jun-09 Var. Customers' Resources 25,736 24, % On-Balance Sheet Resources 17,504 16, % Deposits 16,946 15, % Securities issued % Off-Balance Sheet Resources 8,232 7, % Investment Funds 3,490 2, % Insurance and Other Resources 4,742 4, % 11. In the section headed History of Banco Santander Totta, S.A., the fourth paragraph shall be amended as follows: In May 2010, BSN was incorporated into BST following a merger process that was initiated in 2009 and in August 2010 BST announced its intention of carrying out a merger with Totta-Crédito Especializado, Instituição Financeira de Crédito, S.A., thus concentrating in BST all lending activity currently developed by the merging entities. 8

9 Prior to the merger, BST intends to acquire all the shares of the Totta-Crédito Especializado, Instituição Financeira de Crédito, S.A s share capital which it does not hold but are held by other Santander Totta Group entities. Considering such purpose, it was presented to the Bank of Portugal a preliminary project of the acquisition of the shares and the following merger, in order to receive the relevant report (acordo de princípio) allowing BST to carry out the formal procedures of the merger. Until this date, there is not any answer in respect to such project. IX. PORTUGUESE BANKING SUPERVISION AND REGULATION 12. The section headed Capital Adequacy and Solvency Ratios shall be emended by adding the following at the end of the section: As of 30 June 2010, and as compared against 30 June 2009, BST had the following solvency ratios: million euro Jun-10 Jun-09 Var. Total capital 2,630 2, % Tier I Capital 2,233 1, % Tier II capital % Risk weighted assets 21,525 22, % Core Capital Ratio 7.9% 7.3% +0.6 p.p. Tier I Ratio 9.5% 8.8% +0.7 p.p. Solvency Ratio 11.2% 10.7% +0.5 p.p. X. TAXATION Evidencing the Bank s solidity, by the end of June 2010, the Core Capital and Tier I ratios were 7.9 per cent. and 9.5 per cent., respectively, including therein the retention of generated results (comparable to 7.3 per cent. and 8.8 per cent. at the end of June 2009). Excluding generated results, the Core Capital and Tier I ratios reached 7.4 per cent. and 8.9 per cent., respectively (6.8 per cent. and 8.1 per cent. at the end of June 2009). The solvency ratios are calculated according to the Basel II regulations, by applying the internal ratings based approach (IRB approach) in the calculation of capital adequacy requirements for a substantial part of the credit portfolio. The standard approach was applied to calculating requirements of capital adequacy to cover operational risks. 13. The section headed Covered Bonds not held through a centralized control system shall be amended as follows: 9

10 Interest and other types of investment income obtained on Covered Bonds by a Portuguese resident individual is subject to individual tax. If the payment of interest or other investment income is made available to Portuguese resident individuals, withholding tax applies at a rate of 21.5 per cent., which is the final tax on that income unless the individual elects to include it in his taxable income, subject to tax at progressive rates of up to per cent.(which shall be increased as from 1 January 2011 to 46.5 per cent.). In this case, the tax withheld is deemed a payment on account of the final tax due. In the case of zero coupon Covered Bonds, the difference between the redemption value and the subscription cost is qualified as investment income and is also subject to Portuguese income tax. Capital gains taxation of 20 per cent., applicable to Portuguese resident individuals, will apply on the positive difference between the capital gains and capital losses arising from the transfer of the Covered Bonds. An income tax exemption will apply if such annual positive difference does not exceed 500. Accrued interest qualifies as investment income, rather than as capital gains for tax purposes. Interest and other investment income derived from Covered Bonds and capital gains realised with the transfer of Covered Bonds by legal persons resident for tax purposes in Portugal and by non resident legal persons with a permanent establishment in Portugal to which the income or gains are attributable are included in their taxable income and are subject to a progressive corporate tax rate according to which a 12.5 per cent. tax rate will be applicable on the first 12,500 of taxable income and a 25 per cent. tax rate will be applicable on taxable income exceeding 12,500, which may be subject to a municipal surcharge (derrama) of up to 1.5 per cent. over their taxable profits. Corporate taxpayers with a taxable income of more than 2,000,000 are also subject to State surcharge (derrama estadual) of 2.5 per cent. on the part of it s taxable profits that exceeds 2,000,000. Withholding tax on interest and other investment income at a rate of 21.5 per cent. applies, which is deemed a payment on account of the final tax due. Financial institutions, pension funds, retirement and/or education savings funds, share savings funds, venture capital funds incorporated under the laws in Portugal and some exempt entities are not subject to withholding tax. Interest and other types of investment income obtained by non resident beneficial owners (individuals or legal persons) without a Portuguese permanent establishment to which the income is 10

11 attributable is subject to withholding tax at a rate of 20 per cent 1. (in the case of legal persons) and 21.5 per cent. (in the case of individuals), which is the final tax on that income. Under the tax treaties entered into by Portugal which are in full force and effect on the date of this Base Prospectus, the withholding tax rate may be reduced to 15, 12, 10 or 5 per cent., depending on the applicable treaty and provided that the relevant formalities (including certification of residence by the tax authorities of the beneficial owners of the interest and other investment income) are met. The reduction may apply at source or through the refund of the excess tax. The forms currently applicable for these purposes were approved by Order (Despacho) /2007, of the Portuguese Minister of State and Finance, published in the 2 nd Series of Portuguese official gazette no. 251, of 31 December, which may be available at Capital gains obtained on the transfer of Covered Bonds by individuals not resident in a country, territory or region subject to a clearly more favourable tax regime included in the low tax jurisdictions list approved by Ministerial Order 150/2004, of 13 February (Lista dos países, territórios e regiões com regimes de tributação privilegiada, claramente mais favoráveis) that do not have a permanent establishment in Portugal to which the income is attributable will be exempt from personal income tax.. Capital gains obtained by individuals that are not entitled to said exemption will be subject to taxation at a 20 per cent. flat rate. Accrued interest does not qualify as capital gains for tax purposes. Gains obtained on the disposal of Covered Bonds by a legal person non resident in Portugal for tax purposes and without a permanent establishment in Portugal to which gains are attributable are exempt from Portuguese capital gains taxation, unless the share capital of the beneficial owner is more than 25 per cent. directly or indirectly held by Portuguese resident entities or if the beneficial owner is resident in a country, territory or region subject to a clearly more favourable tax regime included in the low tax jurisdictions list approved by Ministerial Order 150/2004, of 13 February (Lista dos países, territórios e regiões com regimes de tributação privilegiada, claramente mais favoráveis). If the exemption does not apply, the gains will be subject to corporate income tax at a rate of 25 per cent.. Under the tax treaties entered into by Portugal, such gains are usually not subject to Portuguese corporate income tax, but the applicable rules should be confirmed on a case by case basis. The annual positive difference between the capital gains and capital losses deriving from the sale of Covered Bonds or other debt securities by an investment fund created and operating under the Portuguese legislation is not subject to taxation in the 1 From 1 January 2011, the tax rate applicable to legal persons will increase to 21.5, in accordance with the State Budget Law for

12 Portuguese territory except whenever such gain is obtained by a mixed or closedended investment fund. Stamp tax at a rate of 10 per cent. applies to the acquisition through gift or inheritance of Covered Bonds by an individual who is domiciled in Portugal. An exemption applies to transfers in favour of the spouse, de facto spouse, descendants and parents/grandparents. The acquisition of Covered Bonds through gift or inheritance by a Portuguese resident legal person or a non resident acting through a Portuguese permanent establishment is subject to a progressive corporate tax rate according to which a 12.5 per cent. tax rate will be applicable on the first 12,500 of taxable income and a 25 per cent. tax rate will be applicable on taxable income exceeding 12,500, which may be subject to a municipal surcharge (derrama) of up to 1.5 per cent. over their taxable profits. Corporate taxpayers with a taxable income of more than 2,000,000 are also subject to State surcharge (derrama estadual) of 2.5 per cent. on the part of it s taxable profits that exceeds 2,000,000. No stamp tax applies to the acquisition through gift and inheritance of Covered Bonds by an individual who is not domiciled in Portugal. The acquisition of Covered Bonds through gift or inheritance by a non resident legal person is subject to corporate income tax at a rate of 25 per cent.. Under the tax treaties entered into by Portugal, such gains are usually not subject to Portuguese tax, but the applicable rules should be confirmed on a case by case basis. There is no wealth or estate tax in Portugal. XI. GENERAL INFORMATION 14. The section headed Accounts shall be amended as follows: The auditors of the Issuer are Deloitte & Associados - SROC, S.A. ( Auditor ), which is a member of the Portuguese Institute of Statutory Auditors (Ordem dos Revisores Oficiais de Contas), with registered office at Edifício Atrium Saldanha, Praça Duque de Saldanha, 1-6º, Lisbon, Portugal, represented by Maria Augusta Cardador Francisco. The financial statements of the Issuer in respect of the financial years ended 31 December 2008 and 31 December 2009 and in respect of the first semester of 2010 ended 30 June 2010 are incorporated by reference in this Base Prospectus. BST s consolidated financial statements were prepared on a going concern basis, from its books and accounting records maintained in accordance with the accounting principles set forth in the International Financial Reporting Standards (IAS/IFRS) as adopted by the European Union, Regulation (EC) 1606/2002 of July 19 of the 12

13 European Parliament and the Council, implemented into Portugal by Decree-Law 35/2005 of 17 February, and the Bank of Portugal Regulation 1/2005 of 21 February. Where Santander Totta Group companies use different accounting principles, appropriate adjustments were made. The financial statements of the Issuer in respect of the financial years ended 31 December 2008 and 31 December 2009 were audited in accordance with the auditing standards ( Normas Técnicas e Directrizes de Revisão/Auditoria ) issued by the Portuguese Institute of Statutory Auditors ( Ordem dos Revisores Oficiais de Contas ), which require the examination to be planned and performed with the objective of obtaining reasonable assurance about whether the consolidated financial statements are free of material misstatement. The financial statements of the Issuer in respect of the financial years ended 31 December 2008 and 31 December 2009, which are incorporated by reference in this Base Prospectus, were audited by Deloitte & Associados - SROC, S.A., represented by Maria Augusta Cardador Francisco. 15. The section headed Documents Available shall be amended as follows: Copies of the following documents will, when published, be available for inspection at and may be obtained free of charge from the registered offices of the Issuer and from the specified offices of the Paying Agents for the time being: (a) (b) (c) (d) (e) (f) (g) (h) the bylaws (including an English translation thereof) of the Issuer; the audited consolidated financial statements of the Issuer and the auditor s report contained in the Issuer s Annual Report in respect of the financial years ended 31 December 2008 and 31 December 2009 (together with an English translation thereof); the most recently published audited annual consolidated financial statements of the Issuer (together with an English translation thereof); the unaudited financial statements of the Issuer in respect of the first semester of 2010 ended 30 June 2010 (together with an English translation thereof); the Programme Agreement and the Set of Agency Procedures, both dated 4 April 2008 (as amended and restated); the Common Representative Appointment Agreement dated 4 April 2008 (as amended and restated); this Base Prospectus; any future prospectuses, offering circulars, information memoranda and supplements, including Final Terms (except for Final Terms relating to Covered 13

14 Bonds which are not listed on any stock exchange), to this Base Prospectus and any other documents incorporated herein or therein by reference; and (i) in the case of an issue of Covered Bonds subscribed pursuant to a subscription agreement, the subscription agreement (or equivalent document) In the section headed Electronic Copies, the second paragraph shall be amended as follows: XII. DEFINITIONS Copies of items (b), (c) and (d) above may be obtained from the websites of the CMVM and of the Issuer and copies of item (a) above can be obtained from the Issuer s website. 17. The definition of Base Prospectus shall be amended as follows: Base Prospectus means this base prospectus dated 4 April 2008 and supplemented on 30 April 2008, 17 July 2008, 17 July 2009, 19 July 2010 and 23 December 2010, as supplemented from time to time, prepared in connection with the Programme The definition of Other Assets shall be amended as follows: Other Assets means all assets other than Mortgage Credits and Hedging Contracts which are included in the Cover Pool as specified in the Register, which comply with the following criteria: (a) (b) deposits with the Bank of Portugal, in cash or in securities eligible for credit transactions in the Eurosystem; current or term account deposits with credit institutions (which are not in a control or group relationship with the Issuer) having a minimum long term rating at least equal to A2 or A or equivalent and a minimum short term rating at least equal to A-1, P-1 or F1 or equivalent; and (c) other assets complying simultaneously with the requisites of low risk and high liquidity as defined by the Bank of Portugal. For the avoidance of doubt, the Other Assets do not include any cash collateral that may be transferred under the Hedging Contracts.. 14