Delta SPARK Limited (incorporated under the laws of Ireland with limited liability under registered number )

Transcription

1 1,289,499,000 Delta SPARK Limited (incorporated under the laws of Ireland with limited liability under registered number ) On 29 September 2008, Delta SPARK Limited (the "Issuer") will issue 1,289,499, in aggregate principal amount of series floating rate notes due July 2023 (the "Notes"), the principal terms of which are as follows: Principal Amount Issue Price Interest Rate Final Legal Maturity Date 1,289,499, % 1 month EURIBOR % July 2023 Before you purchase any Notes, be sure you understand the structure and the risks. You should consider carefully the risk factors beginning on page 7 of this Prospectus. The Notes will be limited recourse obligations of the Issuer and will be backed by a portfolio of Credit Rights (as defined herein), under which the Spanish National Energy Commission (Comisión Nacional de Energía) ("CNE") shall pay a fixed monthly amount, predetermined on an annual basis, out of the revenues of the Spanish National Electricity System. The Issuer will pay interest and principal on the Notes on the 22nd day of each month (subject to adjustment for non-business days). The first interest payment date will be 22 October The Notes are being offered by this Prospectus. This Prospectus has been approved by the Irish Financial Services Regulatory Authority as competent authority under Directive 2003/71/EC. The Irish Financial Services Regulatory Authority only approves this Prospectus as meeting the requirements imposed under Irish and EU law pursuant to Directive 2003/71/EC. Such approval relates only to the Notes that are to be admitted to trading on the regulated market of the Irish Stock Exchange or other regulated markets for the purposes of Directive 2004/39/EC or that are to be offered to the public in any Member State of the European Economic Area. The Issuer has made application to the Irish Stock Exchange Limited (the "Irish Stock Exchange") for the Notes to be admitted to the official list of the Irish Stock Exchange and to trading on its regulated market. This document constitutes a prospectus for the purposes of Directive 2003/71/EC. The Notes will be issued in bearer form and in the denominations of 50,000 and integral multiples of 1,000 in excess thereof, up to and including 99,000. Each of the Notes will be initially represented by a temporary global bearer note (the "Temporary Global Note"), without Coupons attached, which will be deposited on or about 29 September 2008 (the "Closing Date") with a common safekeeper for Clearstream Banking, société anonyme, Luxembourg ("Clearstream, Luxembourg") and Euroclear Bank S.A./N.V. ("Euroclear") (the "Common Safekeeper"). The Temporary Global Note will be exchangeable for a permanent global bearer note (the "Permanent Global Note"), without Coupons attached, not earlier than 40 days and not later than 180 days after the Closing Date. The Temporary Global Note and the Permanent Global Note will together be referred to as the global notes (the "Global Notes"). Except in certain limited circumstances, the Permanent Global Note will not be exchangeable for definitive bearer Notes (the "Definitive Notes") and no Definitive Notes will be issued with a denomination above 99,000. Joint Arrangers, Joint Bookrunners and Joint Lead Managers DEPFA BANK plc Dexia Capital Markets Co-Managers Banca Infrastrutture Innovazione e Sviluppo S.p.A. DEPFA ACS BANK The date of this Prospectus is 26 September 2008

2 IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS This Prospectus provides information about Delta SPARK Limited and the terms of the Notes to be issued by the Issuer. You should rely only on information provided or referenced in this Prospectus. This Prospectus begins with the following brief introductory sections: Transaction Overview - describes the Credit Rights (as defined herein); Transaction Structure Diagram - illustrates the structure of the underlying transaction of the Notes (the "Transaction") Summary of the Transaction - describes the main terms of the offering of and payments on the Notes, describes the assets of the Issuer and the cash flows in the Transaction; and Risk Factors - describes the most significant risks of investing in the Notes. The other sections of this Prospectus contain more detailed descriptions of the Notes and the structure of the Transaction. Cross-references refer you to more detailed descriptions of a particular topic or related information elsewhere in this Prospectus. The table of contents on page (v) contains references to key topics. This Prospectus has been prepared by the Issuer and may not be copied or used for any purpose other than for your evaluation of an investment in the Notes. The delivery of this Prospectus at any time does not imply that the information in this Prospectus is correct as at any time subsequent to its date. The offering of the Notes may be withdrawn, cancelled or modified at any time, and the Issuer, DEPFA BANK plc and Dexia Capital Markets (the "Joint Arrangers", the "Joint Bookrunners" and the "Joint Lead Managers") reserve the right to reject any commitment to purchase the Notes in whole or in part and to allot to any prospective investor less than the full amount of Notes sought by such investor. The Joint Lead Managers and their affiliates may acquire the Notes for their own account. An index of defined terms is at the end of this Prospectus. Other than as outlined below, the Issuer accepts responsibility for the information contained in this Prospectus. To the best of the knowledge and belief of the Issuer (which has taken all reasonable care to ensure that such is the case) the information contained in this Prospectus is in accordance with the facts and contains no omission likely to affect the import of such information. Dexia Credit Local accepts responsibility for the information in relation to itself contained in the section entitled "The Swap Counterparty". To the best of the knowledge and belief of Dexia Credit Local (which has taken all reasonable care to ensure that such is the case) the information in relation to itself contained in the section entitled "The Swap Counterparty" is in accordance with the facts and contains no omission likely to affect the import of such information. BNP Paribas Securities Services, London Branch accepts responsibility for the information contained in the section entitled "The Account Bank". To the best of the knowledge and belief of BNP Paribas Securities Services, London Branch (which has taken all reasonable care to ensure that such is the case) the information contained in the section entitled "The Account Bank" is in accordance with the facts and contains no omission likely to affect the import of such information. DEPFA BANK plc accepts responsibility for the information contained in the section entitled "The Deposit Account Bank". To the best of the knowledge and belief of DEPFA BANK plc (which has taken all reasonable care to ensure that such is the case) the information contained in the section entitled "The Deposit Account Bank" is in accordance with the facts and contains no omission likely to affect the import of such information. The Notes are limited recourse obligations solely of the Issuer and are not obligations of, are not guaranteed by and are not the responsibility of any other entity. In particular, the Notes are (ii)

3 not the obligations of, are not guaranteed by and are not the responsibility of any of DEPFA ACS BANK and Dexia Bank Belgium SA (the "Sellers"), the Joint Arrangers, the Joint Bookrunners, the Joint Lead Managers, the Co-Managers, the Swap Counterparty, the Account Bank, the Deposit Account Bank, the Paying Agents, the Security Trustee, the Spanish Security Agent or the Trustee. The information contained in this Prospectus with respect to the Swap Counterparty, the Account Bank and the Deposit Account Bank relates to and has been obtained from each of them, respectively. The delivery of this Prospectus will not create any implication that there has been no change in the activity of the Sellers, the Swap Counterparty, the Account Bank or the Deposit Account Bank since the date of this Prospectus or that the information contained or referred to in it is correct as at any time subsequent to its date. The information provided by the Sellers, the Swap Counterparty, the Account Bank and the Deposit Account Bank to the Issuer has been accurately reproduced and, as far as the Issuer is aware, and is able to ascertain from information provided, no facts have been omitted that would render the reproduced information inaccurate or misleading. The Issuer has taken no steps to independently verify this information. No person has been authorised in connection with the issue, offering, subscription or sale of the Notes to give any information or to make any representation not contained in this Prospectus and, if given or made, such information or representation must not be relied upon as having been authorised by or on behalf of the Issuer or the directors of the Issuer. Purchasers of Notes should conduct such independent investigation and analysis regarding the Issuer, the Sellers, the Swap Counterparty, the Receivables and the Notes as they deem appropriate to evaluate the merits and risks of an investment in the Notes. The Sellers, the Joint Arrangers, the Joint Bookrunners, the Joint Lead Managers, the Co-Managers, the Swap Counterparty, the Account Bank, the Deposit Account Bank, the Paying Agents, the Security Trustee, the Spanish Security Agent and the Trustee make no representation, recommendation or warranty, express or implied, regarding the accuracy, adequacy, reasonableness or completeness of the information contained in this Prospectus or in any further information, notice or other document which may at any time be supplied by the Issuer in connection with the Notes and accept no responsibility or liability therefore. None of the Sellers, the Joint Arrangers, the Joint Bookrunners, the Joint Lead Managers, the Co-Managers, the Swap Counterparty, the Account Bank, the Deposit Account Bank, the Paying Agents, the Security Trustee, the Spanish Security Agent or the Trustee will review the financial position or activity of the Issuer while the Notes are outstanding nor will advise any investor or potential investor in the Notes of any information coming to its attention. Nothing in this Prospectus constitutes an offer of securities for sale in the United States or any other jurisdiction where it is unlawful to do so. The Notes have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state of the U.S. or other jurisdiction and the Notes may not be offered or sold within the U.S. or to, or for the account or benefit of, U.S. Persons ("U.S. Persons") (as defined in Regulation S under the Securities Act, "Regulation S"), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws and under circumstances designed to preclude the Issuer from having to register under the United States Investment Company Act of 1940, as amended. No action has been taken by the Issuer, the Joint Arrangers, the Joint Bookrunners, the Joint Lead Managers or the Co-Managers other than as set out in this Prospectus that would permit a public offering of the Notes, or possession or distribution of this Prospectus or any other offering material in any country or jurisdiction where action for that purpose is required. Accordingly, no Notes may be offered or sold, directly or indirectly, and neither this Prospectus (nor any part thereof) nor any information memorandum, offering circular, form of application, advertisement or other offering materials may be issued, distributed or published in any country or jurisdiction except in compliance with applicable laws, orders, rules and regulations, and the Issuer, the Joint Arrangers, the Joint Bookrunners, the Joint Lead Managers and the Co-Managers have represented that all offers and sales by them have been made on such terms. This Prospectus may only be used for the purposes for which it has been published. This Prospectus does not constitute or form part of an offer to sell or the solicitation of an offer to buy any securities other than the securities to which it relates or an offer to sell or the solicitation of any offer to buy any of the securities offered hereby in any circumstances in which such offer, solicitation or sale is not (iii)

4 permitted. The distribution of this Prospectus and the offering and sale of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes are required by the Issuer, the Joint Arrangers, the Joint Bookrunners, the Joint Lead Managers and the Co-Managers and to inform themselves about and to observe any such restrictions. This Prospectus does not constitute, and may not be used for, or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is not permitted to make such offer or solicitation. For a further description of certain restrictions on offerings and sales of the Notes and distribution of this Prospectus you should read "Subscription and Sale". If you are in any doubt about the contents of this Prospectus you should consult your advisers. An investment in the Notes is only suitable for financially sophisticated investors who are capable of evaluating the merits and risks of such investment and who have sufficient resources to be able to bear any losses that may result from such investment. It should be remembered that the price of securities and the income from them may decrease. FORWARD-LOOKING STATEMENTS Any projections, expectations and estimates contained in this Prospectus are not purely historical in nature but are forward-looking statements based upon information and certain assumptions the Issuer considers reasonable, subject to uncertainties as to circumstances and events that have not as yet taken place and are subject to material variation. The Issuer does not have any obligation to update or otherwise revise any forward-looking statements, including statements regarding changes in economic conditions, portfolio or asset pool performance or other circumstances or developments that may arise after the date of this Prospectus. (iv)

5 TABLE OF CONTENTS TRANSACTION OVERVIEW 1 TRANSACTION STRUCTURE DIAGRAM 4 SUMMARY OF THE TRANSACTION 5 RISK FACTORS 11 THE CREDIT RIGHTS RECEIVABLES 22 THE ISSUER 29 THE SWAP COUNTERPARTY 30 THE CASH MANAGER 31 THE ACCOUNT BANK 31 THE DEPOSIT ACCOUNT BANK 31 DESCRIPTION OF THE GLOBAL NOTES 32 TERMS AND CONDITIONS OF THE NOTES 34 Form, denomination and title 35 Status and security 35 Covenants 39 Interest 41 Redemption 42 Payments 44 Taxation 45 Prescription 46 Events of Default 46 Enforcement and non petition; Discretion of Trustee 47 Meetings of Noteholders, modifications, waiver, substitution and exchange 47 Indemnification of the Trustee 49 Replacement of Notes 50 Notices 50 Further Series and issues 50 Governing law and jurisdiction 51 Definitions 51 PRINCIPAL TRANSACTION DOCUMENTS 56 Receivables Sale Agreement 56 Cash Management Agreement 56 Issuer Accounts 58 Security Deed of Charge and Spanish Security Agreement 59 The Swap Agreement 59 MATURITY CONSIDERATIONS 65 USE OF PROCEEDS 65 INVESTOR REPORTS 65 TAXATION 66 SUBSCRIPTION AND SALE 69 Subscription of the Notes 69 Selling Restrictions 69 GENERAL INFORMATION 71 ANNEX 1: INDEX OF DEFINED TERMS 73 (v)

6 TRANSACTION OVERVIEW The electricity sector in Spain is regulated by the Law 54/1997 of 27 December 1997 (as amended by Law 17/2007 of 4 July 2007) (the "LSE"), which distinguishes between "regulated activities" (technical and commercial system operation, transmission and distribution) and liberalised or "non-regulated activities" (retail and generation). The main distinction between regulated and non-regulated activities is that while in the case of non-regulated activities the price of the relevant power purchase agreements are freely agreed by the relevant counterparties, in the case of regulated activities such prices are fixed by the Spanish Government. According to article 16 of the LSE, the remuneration of the transmission activity shall be established by the Spanish Government through a Royal Decree and shall take into account the costs of investment, operation and maintenance of the relevant installations. Article 16 also provides that the remuneration of the distribution activity will be established by the Spanish Government through a Royal Decree and will permit the fixing of the permitted compensation corresponding to each relevant distributor including, inter alia, the costs of investment, operation and maintenance of the relevant installations and such other costs that are necessary for the carrying out of the distribution activity. Until the amendment of the LSE introduced by Law 17/2007, the Spanish Government was entitled to fix certain tariffs calculated to recover all the costs in respect of the supply of electricity, including electricity generation, transmission and distribution to customers (the "Tariff") and a toll in respect of access to the electricity grids (the "Toll"). Additional Provision No. 21 of the LSE provides that the Spanish Government shall also be entitled to fix maximum annual limits in relation to the increase of the tariff as well as the costs that should be covered by such tariff. A tariff deficit arises when the approved Tariffs and Tolls do not sufficiently cover the costs of undertaking the regulated activities (as described above), as established in article 16 of the LSE. The decision of the Spanish Government to limit the amount of the annual tariff originates the deficit (the "Tariff Deficit"). As a consequence of the Tariff Deficit, the power companies carrying out regulated activities have to be compensated by the Spanish Government for the difference between the revenue received and the costs incurred as a result of such regulated activities. Pursuant to Royal Decrees 1634/2006 (the "2006 Decree"), 1767/2007 ("2007 Decree") and Ministerial Order ITC 694/2008 of 7 March 2008 ("Order 694/2008"), the Spanish Government has acknowledged in advance ("ex ante") the existence of Tariff Deficits in relation to the revenue of the regulated activities (i.e. power transmission and distribution). The 2006 Decree and 2007 Decree further provide that tariff deficits acknowledged ex ante by the Spanish Government in the relevant regulations corresponding to the year 2007 and after (the "Ex Ante Tariff Deficits") will be financed through third party resources obtained as a result of an auction organised by the National Energy Commission (the "CNE"), where the successful bidders will be awarded certain credit rights consisting of the right to be paid by the CNE a fixed monthly amount, predetermined on an annual basis, over a period of 15 years, out of the revenues of the Spanish National Electricity System (the "NES"), in accordance with the 2007 Decree and Order 694/2008 (the "Credit Rights"). The CNE is a public body and is a part of the Spanish Public Administration. The CNE was created pursuant to Law 38/1998 of 7 October 1998 (the "LSH") as the regulator of the Spanish energy sectors (electricity and hydrocarbons). Its members are nominated by the Spanish Government through a Royal Decree and its budget is included in the general budget of the Spanish Government. The CNE is assigned to the Ministry of Industry, Tourism and Trade and plays a role in relation to the proposal (for the approval of the Spanish Government) of the Tolls and Tariffs, in relation to the supervision of the energy markets and in relation to the handling of the settlement procedure for the Tolls and Tariffs. These roles are carried out in accordance with the LSH and Royal Decree 2017/1997 of 26 December 1997 (the "1997 Decree"). The CNE has been mandated by the Spanish Government pursuant to the 2006 Decree, the 2007 Decree and Order 694/2008 to handle the public auctions to obtain the financing of the relevant Ex Ante Tariff Deficits, to award the Credit Rights and to make the relevant payments therein. Although the 2006 Decree defined the Credit Rights as the right to receive a determined percentage of the monthly invoicing corresponding to the Tariffs and the Tolls, the 2007 Decree superseded the 2006 Decree by providing that the Credit Rights consist of the right to be paid by the CNE a fixed 1

7 monthly amount, predetermined on an annual basis, over a period of 15 years, out of the revenues of the NES (the "Annuity"). In each calendar year, the CNE will calculate the annual fixed amount required to repay the amounts due under the Credit Rights to the Beneficiaries (as defined below) on a monthly basis (being the base value plus interest therein at a rate of the average EURIBOR 3 months in the November of the previous year plus margin) for 15 years from the date of the auction. The monthly instalment consists of an amount equal to one twelfth (and one sixth and one fifth respectively in the first and last year of the Transaction) of the Annuity, and is not subject to any variation as a result of the increase or decrease of the flows corresponding to any Tolls and Tariffs collected during such period pursuant to the settlement procedure established in the 1997 Decree (the "Settlement Procedure"). The calculation of the Annuity and the relevant monthly instalments to be paid by the CNE is made pursuant to article 10 of Order 694/2008 through a predetermined calculation mechanism that may not be varied or altered by the CNE. For more detail on the calculation of the monthly instalment by the CNE, you should read "The Swap Agreement". In accordance with the Settlement Procedure, invoices corresponding to power consumption (to include relevant Tariff and Tolls) are generally issued by the distributors monthly or bi-monthly in respect of the previous one or two months' consumption. However, certain customers are invoiced less frequently. By no later than the 25th day of each calendar month (M+1), the distributors will provide the CNE with a report on the invoices issued by them in the previous calendar month (Month, M) including details of the fixed costs of the NES as per the Royal Decree 2017/1997 included in such invoices (the "Fixed Costs"). By no later than the 10th day (or, if such day is not a Business Day, the next following Business Day) of the subsequent calendar month (M+2), the distributors will be required to pay to the CNE the Fixed Costs included in invoices reported in the previous calendar month (M+1) and invoiced in the previous calendar month (M). Pursuant to Order 694/2008, the CNE will credit the account designated by each Beneficiary with the relevant monthly instalment they are entitled to. The first payment will be made in the month immediately following the auction out of the relevant monthly settlement. From then onwards, the CNE will pay the relevant monthly instalments out of the relevant monthly settlement. At the end of each year, the CNE will calculate the amount outstanding, to be published by resolution of the General Directorate for Energy Policy and Mines of the Ministry of Industry, Tourism and Trade. The amount will be calculated as the final outstanding amount at the end of the preceding year (including accrued interest), minus the payments made to the Beneficiaries during the year for which the outstanding amount is calculated. During the final year of the 15 year period, the CNE shall make equal monthly payments from January to the month prior to the final repayment date. In the event that there is any outstanding payment, the CNE will pay the outstanding amount in the immediately subsequent settlement. An additional recovery mechanism detailed in the Royal Decrees and Ministerial Orders governing the Credit Rights is designed so that the Credit Rights will be fully recovered in the fifteenth year of the financing of the relevant Ex Ante Tariff Deficit. Pursuant to the 2007 Decree and Order 694/2008, the CNE is mandated by the Spanish Government to make payments to the Beneficiaries irrespective of whether such amounts have been received by the CNE from distributors. Since the Spanish State has given a mandate (Order 694/2008, Additional Provision of the 2007 Decree) to the CNE to organise the auction in order to raise finance for the Ex Ante Tariff Deficit, the Spanish State is ultimately responsible for ensuring that the Beneficiaries of the Credit Rights are repaid. Pursuant to Order 694/2008, the Credit Rights may be assigned by their holders with no restrictions, subject to notice being given to the CNE, which shall register the transferee of the Credit Rights in the Receivables Holders Registry managed by the CNE pursuant to article 6 of Order 694/2008. The registration of the assignment in the Receivables Holders Registry is a condition for the CNE making payments to the subsequent assignees (the "Beneficiaries"), who will then be entitled to receive the relevant predetermined amounts. Order 694/2008 also provides that the successful bidders must deposit in a bank account opened by the CNE the purchase price of the relevant Credit Rights, plus the relevant costs of the auction, with the value date being the third business day following the publication of the results of the auction. 2

8 Pursuant to a Resolution of 10 April 2008, the CNE approved the bidding terms of the auction organised to award the Credit Rights for the purpose of funding the Ex Ante Tariff Deficit acknowledged for year 2007 and for the period between 1 January 2008 and 31 March The Sellers (Dexia Bank Belgium SA via Dexia Spain and DEPFA ACS BANK) participated in the auction held on 12 June 2008 and were awarded Credit Rights for a nominal value of 1,300,000, For more detail on the payment obligations in respect of the Credit Rights, see "Credit Rights Receivables" in this Prospectus. 3

9 TRANSACTION STRUCTURE DIAGRAM The following chart shows the main structural features of the Transaction. CNE Monthly Instalment a(i) Principal component + 1 month EURIBOR plus Margin Comisión Nacional de Energia 2 Delta SPARK Limited Noteholders Issue Proceeds Tolls and Tariffs 1 Interest Component of the CNE Monthly Instalment i(i) 1 month EURIBOR plus Margin, plus towards the purchase price of the Assigned Receivables and Issuer Expenses Security for Noteholders and other Secured Creditors Distributors (power traders from 2009) Dexia Credit Local BNP Paribas Trust Corporation UK Limited Toll 1 Invoices Customers 1 Paid into account held with the Bank of Spain 2 As mandated by the Spanish Government pursuant to the 2006 Decree, the 2007 Decree and Order 694/2008 4

10 SUMMARY OF THE TRANSACTION This summary describes the main terms of the offering of and payments on the Notes, the assets of the Issuer and the cash flows in the Transaction. It does not contain all of the information that you should consider in making your investment decision. To understand fully the terms and conditions of the Notes, you should read this entire Prospectus, especially "Risk Factors" beginning on page 7. TRANSACTION OVERVIEW The Issuer will use the net proceeds from the sale of the Notes to purchase from DEPFA ACS BANK and Dexia Bank Belgium SA a portfolio of Credit Rights. The Issuer will issue the Notes on the Closing Date, and transfer the Notes to the Joint Lead Managers who will sell them to the investors. 1. TRANSACTION PARTIES 1.1 Issuer Delta SPARK Limited, a limited liability company incorporated in Ireland. The Issuer is a multi-issuance vehicle and this is the Issuer's first transaction, Delta SPARK Limited Series Sellers DEPFA ACS BANK and Dexia Bank Belgium SA. 1.3 Joint Arrangers, Joint Bookrunners and Joint Lead Managers in relation to the Notes DEPFA BANK plc ("DEPFA") and Dexia Bank Belgium SA acting under the name "Dexia Capital Markets". 1.4 Trustee, Security Trustee and Spanish Security Agent BNP Paribas Trust Corporation UK Limited. 1.5 Account Bank BNP Paribas Securities Services, London Branch. 1.6 Deposit Account Bank DEPFA BANK plc. 1.7 Principal Paying Agent, Cash Manager and Calculation Agent BNP Paribas Securities Services, Luxembourg Branch, guaranteed by BNP Paribas SA in its capacity as Principal Paying Agent. 1.8 Swap Counterparty Dexia Credit Local. 1.9 Issuer Corporate Service Provider TMF Administration Services Limited Listing Agent McCann FitzGerald Listing Services Limited. 2. CLOSING DATE The Issuer expects to issue the Notes on 29 September CREDIT RIGHTS RECEIVABLES As described in "Transaction Overview" above, credit rights consist of the right to be paid by the CNE a fixed monthly amount, predetermined on an annual basis, over a period of 15 years, out of the revenues of the NES, in accordance with the 2007 Decree and Order 694/2008 (the "Credit Rights"). In June 2008, DEPFA ACS BANK and Dexia Bank Belgium SA (via Dexia Sabadell SA ("Dexia Spain")) purchased 700 million and 600 million of the Credit Rights respectively in an auction organised by the CNE. Dexia Spain subsequently assigned such Credit Rights to Dexia Bank Belgium SA. DEPFA ACS BANK and Dexia Bank Belgium SA's Credit Rights, with an aggregate nominal value of 1,289,499, (the "Assigned Receivables"), were transferred to the Issuer pursuant to the Receivables Sale Agreement on 11 September 2008 and such transfer has been notified to and registered with the CNE. 5

11 For more detailed information about the characteristics of the Assigned Receivables, you should read "The Credit Rights Receivables". 4. CUT-OFF DATE The Issuer will be entitled to collections on the Assigned Receivables applied after 29 September 2008 (the "Cut-off Date"). 5. ISSUER'S ASSETS 6. NOTES The Issuer's assets will include: the Assigned Receivables and collections on the Assigned Receivables applied after the Cut-off Date; rights in the Issuer Accounts; rights and claims under the Transaction Documents; and rights and claims under the Swap Agreement. The Issuer will issue the series ,289,499, floating rate notes due July The Notes are being offered by this Prospectus. 6.1 Form and denomination The Notes will be issued in bearer form and in denominations of 50,000 and multiples of 1,000 in excess thereof, up to and including 99,000. Except in certain limited circumstances, Definitive Notes will not be available, and no Definitive Notes will be issued with a denomination above 99, Status of the Notes The Notes will be constituted by a trust deed dated on or about 29 September 2008 between the Issuer and the Trustee (the "Trust Deed"). The Notes will be secured by a pledge of the Assigned Receivables and the related Ancillary Rights (as defined below) under a pledge dated on or about 29 September 2008 between the Issuer and the Spanish Security Agent (the "Spanish Security Agreement") and by a charge or assignment of all English law governed assets of the Issuer, including the Issuer Accounts under a deed of charge dated on or about 29 September 2008 between the Issuer and the Security Trustee (the "Deed of Charge"). 6.3 Security for the Notes Under the Spanish law governed Spanish Security Agreement and the English law governed Deed of Charge, the Issuer will assign, transfer, pledge and/or charge by way of security all of its assets, including the Assigned Receivables and any related Ancillary Rights and all of its other rights under the Transaction Documents and the English law governed Issuer Accounts in favour of the Security Trustee and the Spanish Security Agent, respectively, to secure its obligations under the Notes. 6.4 Interest Rate The Notes will bear interest at the rate of one month EURIBOR %. 6.5 Interest Payment Dates The Issuer will pay interest and principal on the Notes on the 22nd day of each month (subject to adjustment for non-business Days). The first Interest Payment Date will be 22 October The Notes will accrue interest on an "Actual/360" basis from the preceding Interest Payment Date (or from the Closing Date, for the first period) to, but excluding, the following Interest Payment Date. 6.6 Final Legal Maturity Date The Final Legal Maturity Date of Notes is the Interest Payment Date falling in July For a more detailed description of the payment of interest and principal on each Interest Payment Date you should read "Terms and Conditions of the Notes". 6.7 Priority of Payments On each Interest Payment Date, the Issuer will apply Available Collections from the preceding month to make payments in the order of priority listed below. Available Collections generally 6

12 will include all amounts collected on the Assigned Receivables and all amounts in the Issuer Accounts. On each Interest Payment Date, the Available Collections will be applied to make the following payments in the following order of priority: (a) Issuer Expenses - to pay (i) firstly, pari passu and pro rata, all Issuer Expenses then due and payable or otherwise owing to the Trustee, the Security Trustee and the Spanish Security Agent and (ii) secondly, pari passu and pro rata, all Issuer Expenses then due and payable or otherwise owing to the Rating Agencies, Corporate Services Provider and certain other transaction parties to pay all fees, expenses and indemnities due by the Issuer (other than the Cash Management Fee); (b) (c) (d) (e) (f) Cash Management Fee - to the Cash Manager, to pay the Cash Management Fee; Net swap payment - to the Swap Counterparty, to pay any net swap payments due, except for swap termination payments where the Swap Counterparty is the defaulting party or, upon an Additional Termination Event (as defined in the Swap Agreement), the affected party; Interest - to the Noteholders, to pay interest due on the Notes; Principal - to the Noteholders, to pay principal of the Notes until paid in full; Swap Subordinated Amounts where the Swap Counterparty is the defaulting party or, upon an Additional Termination Event (as defined in the Swap Agreement), the affected party - to the Swap Counterparty, to pay any swap termination payments due; (g) Remaining amounts will remain in the Transaction Account except at the Final Legal Maturity Date, when such proceeds will be retained by the Issuer. For a more detailed description of the Priority of Payments and the allocation of funds on each Interest Payment Date you should read "Description of the Notes" and "Terms and Conditions of the Notes". 6.8 Withholding tax All payments of interest and principal in respect of the Notes will be made without withholding taxes, unless required by law. If withholding is required, the Issuer will not be obliged to make additional payments. 6.9 Events of Default; Acceleration Each of the following will be an Event of Default under the Notes: failure to pay interest due on Notes on each Interest Payment Date and, only where non-payment is caused by a technical or administrative error beyond the control of the Issuer, such failure continues for a period of three Business Days or more; failure to pay the principal amount of the Notes due on each Payment Date, except on 22 June 2023 when no principal payment is payable and, only where non-payment is caused by a technical or administrative error beyond the control of the Issuer, such failure continues for a period of three Business Days or more; breach by the Issuer of any other obligation or its covenants under the Transaction Documents, where in the opinion of the Trustee, such breach is not capable of remedy, such breach continues for a period of 30 days (or such longer period as the Trustee may permit) after written notice by the Trustee to the Issuer requiring the same to be remedied; security granted under the Transaction Documents being terminated or otherwise becoming void or ineffective; or an Insolvency Event (as defined below) occurs in respect of the Issuer. 7

13 Upon an Event of Default, the Notes may be accelerated by the Trustee, if necessary, acting on the instructions of the Noteholders, subject to certain conditions. In addition, whether or not there has been an Event of Default under the Notes, if the CNE fails to make any payment under the Assigned Receivables, the Noteholders may direct the Trustee to sell all or part of the Assigned Receivables as further described in Condition 9 (Events of Default) For a more detailed description of Events of Default, payment default by the CNE and the rights of Noteholders and the priority of payments following an Event of Default, you should read "Description of the Notes" and "Terms and Conditions of the Notes" Limited recourse The Notes will be limited recourse obligations of the Issuer. If the net proceeds of the security under the Spanish law governed Spanish Security Agreement and the English law governed Deed of Charge, after it has been enforced and liquidated and applied in accordance with the order of priority set out in "Summary of the Transaction Structure Priority of Payments Priority Following Acceleration", is not sufficient after payment of all other claims ranking in priority to the Notes, to cover all payments due in respect of the Notes, no other assets of the Issuer will be available for payment of any shortfall. None of the Trustee, the Security Trustee, the Spanish Security Agent, any Noteholder nor any other party to the Transaction Documents may take any further steps against the Issuer to recover any sum still unpaid and any such liability will be discharged and extinguished. In particular, none of them will be entitled at any time to petition or take any other step for the winding-up of the Issuer or the appointment of an examiner thereto. 7. CASH MANAGER BNP Paribas Securities Services, Luxembourg Branch will be the Cash Manager. The Cash Manager is responsible for collecting payments on the Assigned Receivables. The Cash Manager will act as custodian and maintain custody of the Assigned Receivables files. The Cash Manager will, on each Investor Reporting Date, prepare the Investor Report and provide it to the parties. The Investor Report will identify the payments to be made in accordance with the priority of payments described above. The Cash Manager is also responsible for managing the Issuer Accounts and arranging for payments to be made on behalf of the Issuer from such accounts. 8. ISSUER ACCOUNTS 8.1 The Issuer has established the following bank accounts: the Collection Account, held with the Account Bank and secured in favour of the Security Trustee pursuant to the Deed of Charge, into which the CNE Monthly Instalments will be paid and out of which all funds credited thereon will be transferred to the Deposit Account (as defined below) prior to funding the Issuer's payment obligations on each Interest Payment Date based on the Priority of Payments; the Transaction Account, held with the Account Bank and secured in favour of the Security Trustee pursuant to the Deed of Charge, into which amounts received by the Issuer from the Swap Counterparty pursuant to the Swap Agreement and amounts transferred from the Deposit Account will be paid and from which the Issuer will make all payments required to be made by it. On the Closing Date, the Issuer will deposit into the expenses ledger of the Issuer's Transaction Account and the Issuer will fund such deposit in the Transaction Account out of an upfront payment from the Swap Counterparty. On each Interest Payment Date the Issuer will fund the expenses ledger of the Transaction Account from payments made by the Swap Counterparty. The funds credited to the expenses ledger of the 8

14 Transaction Account will be used to pay on-going expenses; the Deposit Account, held with the Deposit Account Bank, into which amounts received by the Issuer from the CNE and credited to the Collection Account may be paid. Such amounts will be credited to the Transaction Account one Business Day prior to each Interest Payment Date. The Deposit Account is not secured for the benefit of the Noteholders. the Issuer Share Capital Proceeds Accounts held with the Account Bank into which the Retained Amount is paid. The Issuer Share Capital Proceeds Account is not charged. For a more detailed description in respect of the above Issuer Accounts, you should read "Issuer Accounts". 9. SWAP AGREEMENT AND SWAP COUNTERPARTY The Issuer will enter into the Swap Agreement with the Swap Counterparty under which the Issuer will pay to the Swap Counterparty on each Interest Payment Date certain amounts calculated by reference to the Interest Component of the CNE Monthly Instalment (as defined herein) that the Issuer receives from the CNE, as determined in accordance with the provisions of the Swap Agreement, and the Swap Counterparty will pay to the Issuer (i) on each Interest Payment Date certain amounts calculated by reference to 1 month EURIBOR on the basis of a notional amount equal to the Notional Outstanding under the Issuer Receiver Leg, (ii) towards the purchase price of the Assigned Receivables and (iii) in respect of the Issuer Expenses on the Closing Date, an amount equal to 3,604,738, and an amount equal to 101,920 on each Interest Payment Date falling in September of each year starting from 22 September 2009 up to and including 22 September If the Swap Agreement is terminated prior to the redemption of the Notes in full a termination payment may be due between the parties in accordance therewith. Dexia Credit Local will be the Swap Counterparty. For a more detailed description of the Swap Agreement, you should read "The Swap Agreement". 10. TAX STATUS OF THE NOTES 11. LISTING You should read "Taxation". Application has been made to the Irish Stock Exchange for the Notes to be admitted to the official list of the Irish Stock Exchange and to trading on its regulated market. For a more detailed description of the features of the Notes you should read "Description of the Notes" and "Terms and Conditions of the Notes". 12. SELLING RESTRICTIONS You should read "Subscription and Sale". 13. CLEARING SYSTEM Clearstream, Luxembourg and Euroclear. 14. CLEARING CODES ISIN: XS Common Code: RATINGS It is a condition to the issuance of the Notes that the Notes receive at least the indicated rating from the two rating agencies listed below: Moody's Aaa Fitch AAA The ratings assigned to the Notes address the timely receipt by any Noteholder of interest and ultimate principal on the Notes. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at 9

15 any time by the assigning rating organisation. Any rating action taken by one rating agency may not necessarily be taken by any other rating agency. 10

16 RISK FACTORS The following is a summary of certain aspects of the issue of the Notes of which prospective investors should be aware, but it is not intended to be exhaustive and prospective investors should read the detailed information set out elsewhere in this Prospectus. The Notes are limited recourse obligations solely of the Issuer and are not obligations of, are not guaranteed by and are not the responsibility of any other entity. In particular, the Notes are not the obligations of, are not guaranteed by and are not the responsibility of any of the Sellers, the Joint Arrangers, the Joint Bookrunners, the Joint Lead Managers, the Co- Managers, the Swap Counterparty, the Account Bank, the Deposit Account Bank, the Paying Agents, the Security Trustee, the Spanish Security Agent or the Trustee. Suitability Prospective investors of the Notes should ensure that they understand the nature of the Notes and the extent of their exposure to the relevant risk. Such prospective investors should also ensure that they have sufficient knowledge, experience and access to professional advisers to make their own legal, tax, accounting and financial evaluation of the merits and risks of investment in the Notes and that they consider the suitability of the Notes as an appropriate investment in light of their own circumstances and financial condition. The assets of the Issuer are limited and are the only source of payment for the Notes The Issuer will not have any assets or sources of funds other than the Assigned Receivables and related property it owns. The source of funds for payments under the Notes will be the receipt by the Issuer of the CNE Monthly Instalments and the receipt of payments from the Swap Counterparty under the Swap Agreement. The Issuer's ability to make full payments of interest and principal on the Notes will also depend on the Cash Manager performing its obligations under the Cash Management Agreement to collect amounts due from the CNE and transfer amounts so collected to the Issuer's Collection Account and on the Swap Counterparty performing its obligations under the Swap Agreement. Enforcement of security Upon enforcement of the security for the Notes, the Spanish Security Agent and the Security Trustee will have recourse to the Issuer's interest in the Assigned Receivables and its other assets, including the Issuer Accounts, to pay amounts owing by the Issuer under the Notes after payment of prior ranking claims. None of the Issuer, the Spanish Security Agent and the Security Trustee will have any recourse against the Sellers other than for any claim of the Issuer against the Sellers for misrepresentation or breach of warranty by the Sellers in respect of the Assigned Receivables under the Receivables Sale Agreement and for breach by the Sellers of their obligations under the Receivables Sale Agreement. Upon enforcement of the security for the Notes, the proceeds of such enforcement may be insufficient, after payment of all other claims ranking in priority to and pari passu with amounts due under the Notes, to pay in full all principal and interest due on the Notes. Non-Petition None of the Noteholders or parties to the Transaction Documents shall be entitled to petition or take any corporate action or other steps or legal proceedings for the winding-up, dissolution, court protection, examinership, reorganisation, liquidation, bankruptcy or 11

17 insolvency of the Issuer or for the appointment of an administrator or manager, administrative receiver, trustee (excluding the Trustee, Security Trustee and the Spanish Security Agent), liquidator, examiner, sequestrator or similar officer in respect of the Issuer or any of its revenues or assets, provided that the Security Trustee and the Spanish Security Agent may prove or lodge a claim in liquidation of the Issuer initiated by another party and provided further that the Security Trustee and the Spanish Security Agent may take proceedings to obtain a declaration or similar judgment or order as to the obligations and liabilities of the Issuer under any of the Security Documents. No investigations Liberalisation of the Spanish electricity sector No investigations, searches or other enquiries have been made by or on behalf of the Issuer, the Trustee, the Security Trustee or the Spanish Security Agent in respect of the Receivables. No representations or warranties have been given by the Issuer in respect of the Receivables. The LSE envisages full liberalisation of the retail power supply functions of the Spanish electricity market from 2009 as described more fully in "The Spanish Electricity Sector Market Liberalisation" below. However, it is expected that the migration of customers to the liberalised market will occur more slowly in practice. Customers currently on the liberalised market do not pay the Tariff. However, power traders (retailers) supplying such customers are liable to pay the Toll. The amounts generated via the Toll are expected to represent a sufficient amount to cover the Tariff Deficit. Spanish legislation has established the principle that some customers will be able to continue to be supplied through a tariff based system and that they will pay a last refuge tariff (tarifa de último recurso) as described more fully in "The Spanish Electricity Sector" below. However, as at the date of this Prospectus, there has been no Spanish legislation detailing the mechanics of how the Last Refuge Tariff will operate or to which customers it will be available. Notwithstanding this, it is expected that further legislation will allow individuals and Small and Medium Enterprises ("SMEs") to continue to pay the Last Refuge Tariff. Spanish legislation has established that the Last Refuge Tariff will be determined so that sufficient revenues will be generated therefrom (when taken together with all other amounts recovered through the system) to cover the costs of the NES and it is expected (although not certain) that the costs of the NES will include the recovery of the Compensation Entitlement (as defined below). However, section 10 of the LSE states that the Last Refuge Tariff shall operate as an upper threshold to the amount chargeable to customers remaining on the tariff-based system. In addition, the Spanish Government has indicated that it will limit the level of the Last Refuge Tariff to ensure that it remains affordable for such customers. From 2010, the Last Refuge Tariff is expected to be available to low tension customers only and from 2011 its availability is expected to be limited to those customers with a contracted power below 50kV. It is therefore likely that the number of customers paying the Last Refuge Tariff will diminish between 2009 and 2012 and the number of customers being supplied through a tariff based system will reduce. Notwithstanding the above, the Credit Rights consist of the right to receive a predetermined amount, on a monthly basis, over a period of 15 years out of the revenues of the NES irrespective of the 12