These Notes will be distributed in the Kingdom of Belgium. The Subscription Period will start on January 14, 2008 and will end on February 15, 2008

Transcription

1 APPLICABLE FINAL TERMS CALYON Issue of Multi Callable Fixed to Index Linked Interest Notes due February 2016 under the 40,000,000,000 Structured Euro Medium Term Note Programme January 7, 2008 These Notes will be distributed in the Kingdom of Belgium. The Subscription Period will start on January 14, 2008 and will end on February 15, 2008 PART A CONTRACTUAL TERMS Terms used herein shall be deemed to be defined as such for the purposes of the Conditions set forth in the Base Prospectus dated 27 September 2007 which constitutes a base prospectus for the purposes of the Prospectus Directive (Directive 2003/71/EC) (the Prospectus Directive). This document constitutes the Final Terms of the Notes described herein for the purposes of Article 5.4 of the Prospectus Directive and must be read in conjunction with the Base Prospectus. Full information on the Issuer, the Guarantor and the offer of the Notes is only available on the basis of the combination of these Final Terms and the Base Prospectus. The Base Prospectus is available for viewing on the Luxembourg Stock Exchange website ( and during normal business hours at the registered office of CALYON and the specified office of the Principal Paying Agent. 1. Issuer: CALYON 2. (a) Series Number: 778 (b) Tranche Number: 1 3. Specified Currency or Currencies: Euro ( EUR ) 4. Status of the Notes: Unsubordinated 5. Aggregate Nominal Amount: (a) Series: To Be Determined at the end of the Subscription Period (b) Tranche: To Be Determined at the end of the Subscription Period 6. Issue Price: per cent. of the Aggregate Nominal Amount 7. (a) Specified Denominations: EUR 1,000 (b) Calculation Amount: EUR 1, (a) Issue Date: February 20, 2008 (b) Interest Commencement Date: Issue Date

2 9. Maturity Date: The earlier of (i) February 20, 2016 and (ii) the Call Optional Redemption Date. 10. Interest Basis: - For each Interest Period from and including the Interest Commencement Date to but excluding February 20, 2010: 6.00 per cent. per annum Fixed Rate (further particulars specified below) 11. Redemption/Payment Basis: Redemption at par - For each Interest Period from and including the Interest Payment Date falling on February 20, 2010 to but excluding the Maturity Date: Index Linked Interest (further particulars specified below) 12. Change of Interest Basis or Redemption/Payment Basis: See paragraph 10 above 13. Put/Call Options: Issuer Call (further particulars specified below) 14. Date Board approval for issuance of Notes obtained: Authorisation given by the Board of Directors of CALYON dated February 28, Method of distribution: Non-syndicated PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE AND/OR REDEMPTION 16. Fixed Rate Note Provisions Applicable for each Interest Period from and including the Interest Commencement Date to but excluding February 20, 2010 (a) Rate(s) of Interest: 6.00 per cent. per annum payable annually in arrear (b) Interest Payment Date(s): February 20, 2009 and February 20, 2010 (c) Fixed Coupon Amount(s): EUR 60 per Calculation Amount (d) Broken Amount(s): (e) Day Count Fraction: 30/360 Interest Amount will be unadjusted (f) Business Day Convention: (g) Additional Business Centre(s): (h) Determination Date(s): 2

3 (i) Other terms relating to the method of calculating interest for Fixed Rate Notes: 17. Floating Rate Note Provisions 18. Zero Coupon Note Provisions 19. Dual Currency Interest Note Provisions 20. Credit Linked Note Provisions 21. Commodity Linked Note Provisions 22. Equity Linked Note Provisions 23. Index Linked Note Provisions: Applicable to interest only (a) Provisions applicable to interest: Applicable for each Interest Period from and including February 20, 2010 to but excluding the Maturity Date. (i) (ii) (iii) Index(ices) and/or formula(s) to be used to determine the Index Linked Interest Rate and/or the Interest Amount: Method of calculation of the Index Linked Interest Rate and/or the Interest Amounts (if different from the method specified in Condition 5(c)): Provisions for determining the Index Linked Interest Rate and/or the Interest Amounts where calculation by reference to the Index(ices) and/or formula is impossible or impracticable (if different from the provisions specified in Condition 10): The Index Linked Interest Rate (expressed as a rate per annum) will be determined by the Calculation Agent in accordance with the following formula: 6.00% Rate Multiplier The Interest Amount payable in respect of each Note on the relevant Interest Payment Date will be obtained by multiplying the Index Linked Interest Rate by the Specified Denomination and the Day Count Fraction. (iv) Specified Interest Payment Dates: Annually on February 20 in each year from and including February 20, 2011 to and including the Maturity Date 3

4 (v) Business Day Convention: (vi) Additional Business Centre(s) (for calculation only): (vii) Minimum Linked Interest Rate: (viii) Maximum Linked Interest Rate: (ix) Rate Multiplier: The Rate Multiplier shall be n/n (as defined in the Conditions) Benchmark (for the purpose of condition 5(b)(iii) Floating Rate Option EURIBOR Designated Maturity 12 months EUR-EURIBOR-Reuters Upper Limit 5.30 per cent. Lower Limit Observation Period Business Days TARGET (x) Day Count Fraction: 30/360 (xi) Name(s) of Sponsor(s): Interest Amount will be unadjusted (xii) Stock Exchange(s) / Related Exchange(s): (xiii) Valuation Date(s): (xiv) Details of any other additional terms or provisions as may be required: (b) Provisions applicable to redemption: 24. Fund Linked Note Provisions: GENERAL PROVISIONS RELATING TO REDEMPTION 25. Issuer Call: Applicable (i) Call Optional Redemption Date(s): The Issuer has the right to call the Notes at par on February 20, 2010 and every Interest Payment Date thereafter until February 20, 2015, all subject to the Notice period. (ii) Call Optional Nominal Amount(s) and method, if any, of calculation of such amount(s): EUR 1,000 per Calculation Amount. 4

5 (iii) If redeemable in part: (A) Minimum Call Nominal Amount: (B) Higher Call Nominal Amount: (iv) Notice period: A minimum of 5 (five) TARGET Business Days prior to the Call Optional Redemption Dates. 26. Investor Put: 27. Final Redemption Amount: EUR 1,000 per Calculation Amount 28. Early Redemption Amount payable on redemption for taxation reasons if applicable, or on Event of Default or on Termination due to Illegality or Force Majeure (if applicable) and/or the method of calculating the same (if required or if different from that set out in Condition 7(g): GENERAL PROVISIONS APPLICABLE TO THE NOTES 29. (i) Form: Bearer Notes: (ii) New Global Note : No Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes only upon an Exchange Event. 30. "Payment Business Day" election in accordance with Condition 6(f) or other special provisions relating to Payment Business Days: 31. Additional Financial Centre(s) or other special provisions relating to Payment Days: 32. Talons for future Coupons or Receipts to be attached to Definitive Notes (and dates on which such Talons mature): 33. Details relating to Partly Paid Notes: amount of each payment comprising the Issue Price and date on which each payment is to be made and consequences of failure to pay, including any right of the Issuer to forfeit the Notes and interest due on late payment: Modified Following Payment Business Day TARGET No 34. Details relating to Instalment Notes: 5

6 (a) Instalment Amounts (b) Instalment Date(s) : 35. Redomination applicable : Redenomination not applicable 36. Condition 12(b) (Gross-up): 37. Illegality and Force Majeure (Condition 23): Applicable 38. Calculation Agent: CALYON 39. Delivery Agent (Equity Linked Notes/Credit Linked Notes): 40. Other terms or special conditions: All notices to the investors shall be validly given if posted on the web site of Deutsche Bank SA, DISTRIBUTION Withholding taxes may apply in the Kingdom of Belgium pursuant to general Belgian income tax legislation and/or pursuant to Belgian legislation implementing the EC Council Directive 2003/48/EC on the taxation of savings income (see more details in Annex A Taxation in Belgium ) The Issuer shall pay no additional amount to cover amounts which would be withheld pursuant to these regulations. 41. (a) If syndicated, names and addresses of Managers: (b) Date of Subscription Agreement: (c) Stabilising Manager(s) (if any): 42. If non-syndicated, name and address of relevant Dealer: CALYON 9, Quai du Président Paul Doumer Paris La Défense Cedex 43. Total commission and concession: 44. U.S. Selling Restrictions: TEFRA D 45. Non exempt Offer: CALYON has appointed Deutsche Bank SA as subdealer for the distribution of the Notes in Belgium 46. Additional selling restrictions: Notes have been registered for public distribution in the territory of the Kingdom of Belgium. Sale of the Notes 6

7 47. Conditions of Offer: Applicable to the public will be restricted to this territory in compliance with any applicable Belgian law without prejudice to the selling restrictions stated in the Prospectus which are particular to specific jurisdictions or otherwise provided for and applicable in other jurisdictions not listed in the Prospectus. CALYON assumes no liability for facilitating such distribution or sale. Investors are deemed to be aware of any applicable regulation regarding the purchase or sale of the Notes in their country of residence. (i) Conditions to which the offer is subject: The Issuer has the right to withdraw the offer of the Notes at any time on or prior to the Offer End Date (as defined below). For the avoidance of doubt, if any application has been made by a potential investor and the Issuer exercises such a right, each such potential investor shall not be entitled to subscribe or otherwise acquire the Notes and any applications will be automatically cancelled. (ii) Total amount of the offer: The final amount of Notes to be issued will be determined at the end of the offer period and will be published on or prior to the Issue Date on the web site of Deutsche Bank SA, (iii) The time period, including any possible amendments, during which the offer will be open and description of the application process: The offer period shall begin on and include January 14, 2008 at 9.00 a.m. Paris time and shall end on February 15, 2008 at 6.00 p.m. Paris time (the Offer End Date ). During the offer period described above, investors can accept the offer during normal Belgium banking hours. The Issuer has the right to end the offer period of the Notes at any time on or prior to the Offer End Date. (iv) Details of the possibility to reduce subscriptions and the manner for refunding excess amount paid by applicants: Deutsche Bank SA (the Distributor ) will act as sole distributor for the placement of the Notes in the Kingdom of Belgium. (v) Details of the minimum and/or maximum amount of application: There is no maximum amount of application. Minimum amount of application is EUR 1,000. 7

8 (vi) (vii) Details of method and time limits for paying up and delivering securities: Manner and date in which results of the offer are to be made public: (viii) Procedure for exercise of any right of preemption, negotiability of subscription rights and treatment of unexercised subscription rights: Custody accounts with Euroclear and or Clearstream participants The final amount of Notes will be published on or prior to the Issue Date on the web site of the Distributor (www. (ix) (x) Categories of potential investors to which the securities are offered: Process for notification to applicants of the amount allotted and indication whether dealing may begin before notification is made: Retail, private and institutional investor There are no pre-identified allotment criteria. All of the Notes requested by the Distributor during the offer period will be assigned until reaching the maximum amount of the offer destined to prospective Noteholders. In the event that during the offer period the requests exceed the amount of the offer destined to prospective Noteholders, equal to up to EUR 100,000,000, the Distributor will proceed to early terminate the offer period and will immediately suspend the acceptance of further requests. Upon the close of the offer period in the event that, notwithstanding the above, more than the maximum amount of the Notes are subscribed, the Distributor will be notified as to the amount of their allotments. In such event, the Distributor will notify potential investors of the amount of the Notes to be assigned. The Distributor will adopt allotment criteria that ensure equal treatment of prospective investors. (xi) Price at which the securities will be offered/method of determining price and process for disclosure. Amount of any expenses and taxes specifically charged to subscriber/purchaser: Securities will be offered to potential investors at EUR 1,000 per Note of EUR 1,000 Specified Denomination. There will be a subscription surcharge of 2% of the nominal amount. (xii) Details of any post-issuance information to be provided and where such information can be obtained: 8

9 (xiii) Name and address of the co-ordinator(s) of the global offer and of single parts of the offer: (xiv) Name and address of any paying agents and depository agents in each country (in addition to the Principal Paying Agent): (xv) Names and addresses of entities agreeing to underwrite the issue on a firm commitment basis, and entities agreeing to place the issue without a firm commitment or under best efforts arrangements: (xvi) When the underwriting agreement has been or will be reached: (xvii) Name and address of entities which have a firm commitment to act as intermediaries in secondary trading: (xviii)placement fee: Deutsche Bank SA Avenue MARNIXLAAN B-1000 Bruxelles Belgium Entity who distribute the Notes on a best effort basis: Deutsche Bank SA Avenue MARNIXLAAN B-1000 Bruxelles Belgium Deutsche Bank SA Avenue MARNIXLAAN B-1000 Bruxelles Belgium The Distributor will earn an amount ranging on average between 0% and 4% of the Issue Price; such range is due to potential changes in the market conditions during the Subscription Period which may influence the price paid for the Notes by the Distributor to the Issuer. Further information on the placement fee may be obtained from the Distributor. OPERATIONAL INFORMATION 48. Branch of Account for the purposes of Condition 6(e): PURPOSE OF FINAL TERMS These Final Terms comprise the final terms required for issue and admission to trading on the Bourse de Luxembourg of the Notes described herein pursuant to the Issuer's 40,000,000,000 Structured Euro Medium Term Note Programme. 9

10 RESPONSIBILITY The Issuer accepts responsibility for the information contained in these Final Terms. Signed on behalf of the Issuer: Duly authorised 10

11 PART B OTHER INFORMATION 1. LISTING AND ADMISSION TO TRADING 2. RATINGS Application has been made by the Issuer (or on its behalf) for the Notes to be admitted to trading on the Bourse de Luxembourg with effect from the Issue Date and to be listed on the Official List of the Luxembourg Stock Exchange. Ratings: The Notes to be issued have not been rated 3. INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE Save for any fees payable to the Dealers, so far as the Issuer is aware, no person involved in the issue of the Notes has an interest material to the offer. 4. NOTIFICATION The Commission de Surveillance du Secteur Financier in Luxembourg has provided the Commission Bancaire, Financière et des Assurances (CBFA) in Belgium, inter alios, with a certificate of approval attesting that the Base Prospectus has been drawn up in accordance with the Prospectus Directive. 5. REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL EXPENSES (i) Reasons for the offer See Use of Proceeds wording in the Base Prospectus (ii) Estimated net proceeds: To be determined (iii) Estimated total expenses: 6. YIELD (Fixed Rate Notes Only) Indication of yield 11

12 7. HISTORIC INTEREST RATES (Floating Rate Notes Only) 8. PERFORMANCE OF INDEX/FORMULA, EXPLANATION OF EFFECT ON VALUE OF INVESTMENT AND ASSOCIATED RISKS AND OTHER INFORMATION CONCERNING THE UNDERLYING (Index-Linked Notes only) Source : Bloomberg The historical performance of the EURIBOR 12 months is not a guarantee of the future performance of the EURIBOR 12 months Exemple 1: (a positive scheme) We will retain as an assumption that Euribor 12 months (E12m) was equal 4.745% as of December,31 st, The 2 first years, the coupon is guaranteed at 6.00% per annum, which is 125 bps higher than the actual one year swap rate. From year 3 to the Maturity Date, the annual coupon paid depends on the stability of the E12m and the fact that it stays lower than 5.30%. The coupon to be paid will be equal to 6.00% per cent. per annum multiplied by the accrued factor depending on the number of days where the condition is verified. If we take a look on the historical data of E12m since 2001 (which in any case can not be taken as a guarantee of the future performance of the E12m) we can see that E12m never reach 5.30%. We can imagine that the increasing rates politic of the ECB is already priced by the forwards of the interest rates curve and that the condition will be totally respected. Of course, the EMTN is 100% capital guaranteed at maturity. 12

13 Year Number of days where the condition is verified Coupon Redemption at maturity date 1 N/A 6% 2 N/A 6% 3 365/365 6% 4 365/365 6% 5 366/366 6% 6 365/365 6% 7 365/365 6% 8 365/365 6% 100% Exemple 2 : (a defensive scheme) We will retain as an assumption that Euribor 12 months (E12m) was equal 4.745% as of December,31 st, The 2 first years, the coupon is guaranteed at 6.00% per annum, which is 125 bps higher than the actual one year swap rate. From year 3 to maturity in the case of a raise of E12m caused by a raise of the ECB rates, and then, a raise cut following the end of that raise politic, we can imagine that, during a year or two, the coupon won t be full, and then E12m will be back under 5.30% and allow the Emtn to give a 6% p.a. coupon. Of course, the EMTN is 100% capital guaranteed at maturity. Year Number of days where the condition is verified Coupon Redemption at maturity date 1 N/A 6% 2 N/A 6% 3 246/ % 4 264/ % 5 366/366 6% 6 365/365 6% 7 365/365 6% 8 365/365 6% 100% The internal rate of return is 5.52% Exemple 3 : (the worst scheme) We will retain as an assumption that Euribor 12 months (E12m) was equal 4.745% as of December,31 st, The 2 first years, the coupon is guaranteed at 6.00% per annum, which is 125 bps higher than the actual one year swap rate. From year 3 to maturity we can imagine an excessive dramatic scenario based on the inflation behaviour, which appear with an important inflation raise and the increase of the interest rate by the ECB. E12m will be higher than 5.30% from the beginning of year 3. This cycle will stay and won t allow E12m to remain under 5.30%. The coupon will be null from year 3. Of course, the EMTN is 100% capital guaranteed at maturity. 13

14 Year Number of days where the condition is verified Coupon Redemption at maturity date 1 N/A 6% 2 N/A 6% 3 0 0% 4 0 0% 5 0 0% 6 0 0% 7 0 0% 8 0 0% 100% The internal rate of return is 2.30% Warning: Potential purchasers of this Note must understand that : - The Notes involve risks of variation in interest rates which depends on the level of the EURIBOR 12 months years - The interest amount received by a Noteholder is linked to the level of the EURIBOR 12 months years - The Notes are capital guaranteed by the Issuer on the Maturity Date. - Financial transactions involve risks of variation in interest rates. In view of these risks you should have the requisite knowledge and experience to assess the characteristics and risks associated with each contemplated financial transaction. Accordingly, when you enter into financial transaction, you will be deemed to understand and accept the terms, conditions and risks associated with it. You will be deemed, to have made your own independent decision to enter into that financial transaction and to declare that such transaction is appropriate or proper for it based upon its own judgement and upon advice from such advisers as it has deemed necessary. You should undertake a detailed analysis of all financial, legal, regulatory, accounting and tax issues rose by this transaction, so as to evaluate the merits and suitability of this transaction and should not rely on the Issuer for such analysis. Potential investors attention is drawn to the fact that the repayment of the principal of the Notes is capital guaranteed (100% of the issue price of each Note) only if the Notes are held until the scheduled maturity date. Holders of Notes willing to sell or redeem Notes prior to the scheduled maturity date are exposed to the fluctuation of the performance of the Notes which depends upon among other things of relevant interest rates, interest rates, interest rate volatility, perceptions of issuer credit quality, time remaining to maturity, CALYON hedging obligations and the costs and losses incurred in connection with discharging such obligations. Therefore, the redemption amount or proceeds of a sale of the Notes realized prior to the scheduled maturity date may be higher or lower than the protected amount, i.e. higher or lower than 100% of the issue price of each Note. 9. PERFORMANCE OF RATE[S] OF EXCHANGE AND EXPLANATION OF EFFECT ON VALUE OF INVESTMENT (DUAL CURRENCY NOTES ONLY) 14

15 10. OPERATIONAL INFORMATION (i) ISIN Code: XS (ii) Common Code: (iii) Any clearing system(s) other than Euroclear Bank S.A./N.V. and Clearstream Banking, société anonyme and the relevant identification number(s): (iv) Delivery: Delivery against payment (v) (vi) Names and addresses of additional Paying Agent(s) (if any): Intended to be held in a manner which would allow Eurosystem eligibility: No 11. TERMS AND CONDITIONS OF THE OFFER Applicable See item 47 above 15

16 ANNEX A TAXATION IN BELGIUM The following summary describes the principal Belgian tax treatment applicable to the holding of the Notes by a Belgian investor following an offer in Belgium. This information is of a general nature and does not purport to be a comprehensive description of all Belgian tax considerations that may be relevant to a decision to acquire, to hold and to dispose of the Notes. In some cases, different rules can be applicable. Furthermore, the tax rules can be amended in the future, possibly implemented with retroactive effect, and the interpretation of the tax rules may change. This summary is based on the Belgian tax legislation, treaties, rules, and administrative interpretations and similar documentation, in force as of the date of the publication of this offer in Belgium, without prejudice to any amendments introduced at a later date, even if implemented with retroactive effect. Each prospective Noteholder should consult a professional adviser with respect to the tax consequences of an investment in the Notes, taking into account the influence of each regional, local or national law. 1 Belgian tax regime regarding the Notes For Belgian income tax purposes, the Notes are to be considered as fixed income securities (article 2, 1, 8 Income Tax Code 1992 ("ITC 92"). 2 Individual private investors Natural persons who are Noteholders and who are Belgian residents for tax purposes, i.e. who are subject to Belgian personal income tax ("Personenbelasting/ Impôt des personnes physiques"), are in Belgium subject to the following tax treatment with respect to the Notes. Other rules can be applicable in special situations, in particular when natural persons resident in Belgium acquire the Notes for professional purposes or when their transactions with respect to the Notes fall outside the scope of the normal management of their own private estate. Any amount paid by the Issuer in excess of the issuance price of the Notes at the maturity date or at early redemption, is taxable as interest. In case of a sale of the Notes during the lifetime of the Notes to a third party (other than the Issuer), an income equal to the pro rata of accrued interest corresponding to the detention period must be declared and income tax at a flat rate of 15% to be increased with communal surcharges will be due if no Belgian withholding tax has been levied on the pro rata of accrued interest corresponding to the detention period. Capital gains realised on the sale of the Notes, except for the pro rata of accrued interest, are in principle tax exempt, unless the gains are realised outside the scope of the normal management of one s own private estate or except if the Notes are sold to the Issuer. In the latter case, the capital gain is taxable as interest. Capital losses are not tax deductible. Payments of interest on the Notes made through a paying agent in Belgium will in principle be subject to a 15% withholding tax in Belgium (calculated on the interest received after deduction of any non-belgian withholding taxes). The Belgian withholding tax constitutes the final income tax for natural persons. This means that they do not have to declare the interest obtained on the Notes in their personal income tax return, provided withholding tax was levied on these interest payments. 16

17 However, if the interest is paid outside Belgium without the intervention of a Belgian paying agent, the interest received (after deduction of any non-belgian withholding tax) must be declared in the personal income tax return and will be taxed at a flat rate of 15% (plus communal surcharges). 3 Tax treatment of Belgian corporations Corporations Noteholders who are Belgian residents for tax purposes, i.e. who are subject to Belgian Corporate Income Tax ("Vennootschapsbelasting/Impôt des sociétés") are in Belgium subject to the following tax treatment with respect to the Notes. Interest derived by Belgian corporate investors on the Notes and capital gains realised on the Notes will be subject to Belgian corporate income tax of 33.99%. Capital losses are deductible. Interest payments on the Notes made through a paying agent in Belgium can under certain circumstances be exempt from withholding tax, provided a certificate is delivered. The withholding tax that has been levied is creditable conform the legal provisions. 4 Other legal entities Legal entities Noteholders who are Belgian residents for tax purposes, i.e. who are subject to Belgian tax on legal entities ("Rechtspersonenbelasting/impôt des personnes morales") are in Belgium subject to the following tax treatment with respect to the Notes. Any amount paid by the Issuer in excess of the issuance price of the Notes at the maturity day or at early redemption is taxable as interest. In case of a sale of the Notes during the lifetime of the Notes to a third party (other than the Issuer), an income equal to the pro rata of accrued interest corresponding to the detention period must be declared and income tax at a flat rate of 15% to be increased with communal surcharges will be due if no Belgian withholding tax has been levied on the pro rata of accrued interest corresponding to the detention period. Capital gains realised on the sale of the Notes whether or not on the maturity date, except for the prorata of accrued interest, are in principle tax exempt, unless the Notes are sold to the Issuer. In the latter case, the capital gain is taxable as interest. Capital losses are not tax deductible. Payments of interest on the Notes made through a paying agent in Belgium will in principle be subject to a 15% withholding tax in Belgium and no further tax on legal entities will be due on the interest. However, if the interest is paid outside Belgium without the intervention of a Belgian paying agent and without the deduction of Belgian withholding tax, the legal entity itself is responsible for the deduction and payment of 15% withholding tax. 5 Tax treatment of non-resident investors Income from the Notes paid through a Belgian credit institution is in principle subject to a withholding tax of 15%, unless the Noteholder is resident in a country with which Belgium has concluded a double taxation agreement and delivers the required affidavit. If the income is not collected through a financial institution or other intermediary established in Belgium, no Belgian withholding tax is due. Non-resident investors can also obtain an exemption of Belgian withholding tax on interest from the Notes if they are the owners or usufructors of the Notes and they deliver an affidavit confirming that they have not allocated the Notes to business activities in Belgium and that they are non-residents, provided the Notes are (i) paid through a Belgian credit institution, stock market company or clearing or settlement institution and (ii) not used by the Issuer for carrying on a business in Belgium.. 17

18 If the Noteholder is a Belgian branch of a foreign company to which the Notes are attributable, the rules applicable to Belgian corporations will apply. Non-resident Noteholders who do not allocate the Notes to a professional activity in Belgium are not subject to Belgian income tax, save, as the case may be, in the form of withholding tax. 6 The EU Savings Directive On 3 June 2003, the Council of the European Union adopted the Council Directive 2003/48/EC regarding the taxation of savings income (hereafter, the "Savings Directive"), which has been implemented in Belgium by the law of 17 May The Savings Directive entered into force on 1 July Under the Directive, Member States are since July 1, 2005 required to provide to the tax authorities of other Member States or the tax authorities of the Netherlands Antilles, Aruba, Guernsey, Jersey, the Isle of Man, Montserrat and the British Virgin Islands (hereafter, the "Dependant and Associated Territories", each a "Dependant and Associated Territory") details of payments of interest and other similar income paid by a paying agent (within the meaning of the Savings Directive) to (or under certain circumstances, to the benefit of) an individual resident in another Member State or resident in a Dependant and Associated Territory, except that Austria, Belgium and Luxembourg are instead required to impose a withholding system for a transitional period unless the beneficiary of the interest payments elects for the exchange of information. The withholding tax rate is initially 15%, increasing steadily to 20% and to 35%. The ending of such transitional period depends on the conclusion of certain other agreements relating to exchange of information with certain other countries. Pursuant to the Savings Directive, Belgian paying agents will as of 1 July 2005 apply a taxation at source on interest payments to individual Noteholders resident in another EU member state than Belgium or resident in a Dependant and Associated Territory. This taxation at source is levied in addition to the applicable Belgian withholding tax. 6.1 Individuals not resident in Belgium A Belgian paying agent will withhold a tax at source ("woonstaatheffing/prélèvement pour l Etat de residence", hereafter "Source Tax") at the rate of 15% on the interest payments made to an individual, beneficial owner of the interest payments and resident in another EU Member State or resident in one of the Associated and Dependant Territories. The rate of the Source Tax will increase to 20% on 1 July 2008 and to 35% on 1 July The Source Tax is levied in addition to the Belgian withholding tax which has been withheld. The Source Tax is levied pro rata to the period of holding of the Notes by the beneficial owner of the interest payments. No Source Tax will be applied if the investor provides the Belgian paying agent with a certificate drawn up in his name by the competent authority of his state of residence for tax purposes. The certificate must at least indicate: (i) name, address and tax or other identification number or, in the absence of the latter, the date and place of birth of the beneficial owner; (ii) name and address of the paying agent; and (iii) the account number of the beneficial owner, or where there is none, the identification of the security. 6.2 Individuals resident in Belgium An individual resident in Belgium will be subject to the provisions of the Savings Directive, if he receives interest payments from a paying agent (within the meaning of the Savings Directive) established in another EU Member State, Switzerland, Liechtenstein, Andorra, Monaco, San Marino, the Netherlands Antilles, Aruba, Guernsey, Jersey, the Isle of Man, Montserrat, the British Virgin Islands, the Cayman Islands, Anguilla or the Turks and Caicos Islands. If the interest received by an individual resident in Belgium has been subject to a Source Tax, such Source Tax does not liberate the Belgian individual from declaring the interest income in the personal income tax 18

19 declaration. The Source Tax will be credited against the personal income tax. If the Source Tax withheld exceeds the personal income tax due, the excessive amount will be reimbursed, provided it amounts to at least EUR Indirect taxes 7.1 Stock exchange tax and tax on repurchase transactions A stock exchange tax will be levied on the purchase and sale in Belgium of the Notes on a secondary market through a professional intermediary. The rate applicable for secondary sales and purchases in Belgium through a professional intermediary is 0.07% with a maximum amount of EUR 500 per transaction and per party. A separate tax is due from each of the seller and the purchaser, both collected by the professional intermediary. A tax on repurchase transactions ("taxe sur les reports") at the rate of per cent (subject to a maximum of EUR 500 per party and per transaction) will be due from each party to any such transaction entered into or settled in Belgium in which a professional intermediary for stock transactions acts for either party. However, the tax on stock exchange transactions and the tax on repurchase transactions referred to above will not be payable by exempt persons acting for their own account, including certain Belgian institutional investors, as defined in Articles and 139 of the code of taxes assimilated to stamp tax ("Code des taxes assimilées au timbre", transformé en Code des Droits et Taxes Divers ) and non-residents acting for their own account provided they deliver an affidavit to the financial intermediary in Belgium confirming their nonresident status. 7.2 Tax on the physical delivery of bearer securities, if any The physical delivery, if any, of Notes in bearer form following their acquisition on the secondary market is subject to a tax on the physical delivery of bearer notes of 0.60% if the delivery is made through the intervention of a professional intermediary. The tax is also applicable on the conversation of registered securities in bearer securities and pursuant to a withdrawal of these securities from open custody. The tax on the delivery of bearer notes is due either on the sums payable by the purchaser, or on the sales value of the notes as estimated by the custodian in the case of a withdrawal from open custody or by the person asking for the conversion of the notes in case of conversion of a registered note in a bearer note. The tax is payable by the issuer, the professional intermediary or the custodian. The physical delivery of bearer notes to recognised Belgian professional intermediaries (such as credit institutions), acting for their own account, is exempt from the above tax. 19