MACIF (a société d'assurance mutuelle established in the Republic of France) 124,400,000 Undated Subordinated Fixed/Floating Rate Notes Issue Price: 100 per cent. of the principal amount of the Notes. This prospectus constitutes a prospectus (the Prospectus) for the purposes of Article 5.3 of Directive 2003/71/EC, as amended (the Prospectus Directive) and the relevant implementing measures in the Grand Duchy of Luxembourg. This Prospectus contains information relating to the issue by Mutuelle Assurance des Commerçants et Industriels de France et des cadres et salariés de l'industrie et du Commerce (MACIF or the Issuer) of 124,400,000 aggregate principal amount of Undated Subordinated Fixed/Floating Rate Notes (the Notes and each a Note) The Notes have no fixed maturity. The obligations of the Issuer under the Notes constitute Undated Subordinated Obligations of the Issuer and shall at all times rank without any preference among themselves (save for certain obligations required to be preferred by French law) and equally and rateably with any other existing or future Undated Subordinated Obligations of the Issuer, in priority to all prêts participatifs granted to, and titres participatifs issued by, the Issuer, but behind all present and future Unsubordinated Obligations and all Dated Subordinated Obligations of the Issuer, as further described in "Terms and Conditions of the Notes Status of the Notes". Each Note will bear interest on its principal amount (i) from (and including) 6 October 2014 (the Issue Date) to (but excluding) 6 October 2024 (the First Call Date), at a fixed rate of 3.916 per cent. per annum payable annually in arrear on 6 October in each year, commencing on 6 October 2015 until (and including) the First Call Date and thereafter the Notes will bear interest (ii) from (and including) the First Call Date at a floating rate equal to 3-month EURIBOR, being the Euro-zone inter-bank offered rate for three-month Euro deposits, plus a margin of 3.80 per cent. per annum payable quarterly in arrear on 6 October,6 January, 6 April and 6 July in each year commencing on 6 January 2025 (subject to adjustment as provided in Condition 5.1, as set out in "Terms and Conditions of the Notes Interest"). Payment of interest on the Notes may at the option of the Issuer be deferred under certain circumstances, as set out in "Terms and Conditions of the Notes Interest Interest Deferral". The Issuer may, at its option,, subject to the prior approval of the Relevant Supervisory Authority (if required at the time), redeem all the Notes, but not some only, on the First Call Date or on any Interest Payment Date thereafter, as further described in "Terms and Conditions of the Notes Redemption and Purchase". The Issuer may also, at its option, subject to the prior approval of the Relevant Supervisory Authority (if required at the time), redeem the Notes upon the occurrence of certain events, including for taxation reasons, regulatory reasons, rating reasons or accounting reasons, as further described in "Terms and Conditions of the Notes Redemption and Purchase". Application has been made to the Commission de Surveillance du Secteur Financier (the CSSF) in its capacity as competent authority under the Luxembourg Act dated 10 July 2005 relating to prospectuses
for securities, as amended (the Luxembourg Law), for the approval of this Prospectus. Application has also been made to the Luxembourg Stock Exchange for the Notes to be listed on the official list of the Luxembourg Stock Exchange and admitted to trading on the regulated market (within the meaning of Directive 2004/39/EC) (the Regulated Market) of the Luxembourg Stock Exchange. The Notes will be issued on the Issue Date in the denomination of 100,000 each and will at all times be represented by book-entries (inscription en compte), in compliance with Articles L.211-3 and R.211-1 of the French Code monétaire et financier, in the books of the Account Holders (as defined in "Terms and Conditions of the Notes Form, Denomination and Title"). No physical documents of title (including certificats représentatifs pursuant to Article R.211-7 of the French Code monétaire et financier) will be issued in respect of the Notes. The Notes will, upon issue, be inscribed in the books of Euroclear France (Euroclear France) which shall credit the accounts of the Account Holders including the depositary bank for Clearstream Banking, société anonyme (Clearstream, Luxembourg) and Euroclear Bank S.A./N.V. (Euroclear). The Notes have been accepted for clearance through Euroclear France, Euroclear and Clearstream, Luxembourg. Pursuant to Article 7(7) of the Luxembourg Law, the CSSF, by approving this Prospectus, assumes no responsibility as to the economical and financial soundness of the Notes to be issued hereunder or the quality or solvency of the Issuer. The Notes have been assigned a rating of Baa1 by Moody's Investors Service (Moody's). The Issuer's long-term senior unsecured debt is rated A2 by Moody's. Moody's is established in the European Union and is registered under Regulation (EC) No. 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies as amended by Regulation (EU) No. 513/2011 and is included in the list of registered credit rating agencies published on the website of the European Securities and Markets Authority (www.esma.europea.eu/page/list-registered-and-certified-cras). A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension, reduction or withdrawal at any time by the rating agency. Prospective investors should have regard to the risk factors described under the section headed "Risk Factors" in this Prospectus, in connection with any investment in the Notes. Structuring Advisor Natixis Joint Lead Managers BNP Paribas Natixis The date of this Prospectus is 2 October 2014. - 2-
This Prospectus is to be read and construed in conjunction with any supplement that may be published before the date of the admission of the Notes on the Regulated Market of the Luxembourg Stock Exchange and with all documents which are deemed to be incorporated herein by reference (see "Documents Incorporated by Reference" below) (together, the Prospectus). Responsibility statement Subject as set out below, the Issuer accepts responsibility for the information contained in this Prospectus and confirms that this document contains all information with respect to the Issuer, the Issuer and its consolidated subsidiaries taken as a whole (the MACIF Group or the Group) and the Notes which is material in the context of the issue and offering of the Notes. The information contained in the Prospectus is, to the best of the Issuer's knowledge, having taken all reasonable care to ensure that such is the case, in accordance with the facts and contains no omission likely to affect its import. The Issuer accepts responsibility accordingly. In connection with the issue and offering of the Notes, no person has been authorised to give any information or to make any representation other than those contained in this Prospectus and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuer or the Joint Lead Managers (as defined in "Subscription and Sale"). Neither the delivery of this Prospectus, nor any sale made in connection with the issue of the Notes, shall, under any circumstances, create any implication that there has been no change in the affairs or the financial position of the Issuer since the date hereof, or that the information in this Prospectus is correct or complete as of any time subsequent to its date, or if different, the date indicated in the document containing the same. This Prospectus does not constitute, and may not be used for the purposes of, an offer or solicitation by anyone to any person to whom it is unlawful to make such offer or solicitation. Neither this Prospectus nor any other information supplied in connection with the Notes is intended to provide the basis of any credit or other evaluation and nor should any of them be considered as a recommendation or a statement of opinion (or a report on either of those things) by the Issuer or the Joint Lead Managers that any recipient of this Prospectus or any other information supplied in connection with the Notes should purchase any Notes. Each investor contemplating purchasing any Notes should make its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness of the Issuer. Neither this Prospectus nor any information supplied in connection with the Notes constitute an offer or invitation on behalf of the Issuer or the Joint Lead Managers to any person to subscribe for or purchase any Notes. No action has been or will be taken by the Issuer, the Joint Lead Managers or any other person that would permit a public offering of the Notes or the distribution of this Prospectus or any other offering material relating to the Notes, in any country or jurisdiction where regulatory action for that purpose is required. The distribution of this Prospectus and the offering of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes are required by the Issuer and the Joint Lead Managers to inform themselves about and to observe any such restrictions. In particular, there are restrictions on the distribution of this Prospectus and the offer or sale of the Notes in the United States, the United Kingdom and France (see "Subscription and Sale"). The Notes have not been and will not be registered under the U.S. Securities Act of 1933 as amended (the Securities Act) or any state securities laws. The Notes are being offered and sold in offshore transactions outside the United States in reliance on Regulation S under the Securities Act (Regulation S) and, except in a transaction exempt from the registration requirements of the Securities Act, may - 3-
not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S). For a description of this and certain further restrictions on offers, sales and transfers of the Notes and the distribution of this Prospectus, see "Subscription and Sale". This Prospectus has not been submitted to the clearance procedures of the Autorité des marchés financiers. To the extent permitted by law, the Joint Lead Managers accept no responsibility whatsoever for the content of this Prospectus or for any other statement in connection with the Issuer. The Joint Lead Managers have not separately verified the information contained in this Prospectus in connection with the Issuer. The Joint Lead Managers do not make any representation, express or implied, and do not accept any responsibility, with respect to the accuracy or completeness of any of the information in this Prospectus in connection with the Issuer. Each potential purchaser of Notes should determine for itself the relevance of the information contained in this Prospectus and its purchase of Notes should be based upon such investigation as it deems necessary. The Joint Lead Managers do not undertake to review the financial condition or affairs of the Issuer during the life of the arrangements contemplated by this Prospectus nor to advise any investor or prospective investor in the Notes of any information coming to the attention of the Joint Lead Managers. Each prospective investor should consult its own advisers as to legal, tax, financial, credit and related aspects of an investment in the Notes. Prospective investors should, in particular, read carefully the section entitled "Risk Factors" set out below before making a decision to invest in the Notes. In connection with the issue of the Notes, Natixis (the Stabilising Manager) (or persons acting on behalf of the Stabilising Manager) may over allot Notes or effect transactions with a view to supporting the market price of the Notes at a level higher than which might otherwise prevail. However, there is no assurance that the Stabilising Manager (or persons acting on behalf of the Stabilising Manager) will undertake stabilisation action. Any stabilisation action may begin on or after the date on which adequate public disclosure of this Prospectus is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the Issue Date of the Notes and 60 days after the date of the allotment of the Notes. Such stabilisation action or overallotment will be carried out in accordance with all applicable laws and regulations. In this Prospectus, unless otherwise specified or the context requires, references to a Member State are references to a Member State of the European Economic Area and references to " ", "Euro", "Euros" and "euro" are to the single currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the Treaty establishing the European Community. - 4-
FORWARD-LOOKING STATEMENTS This Prospectus may contain certain statements that are forward-looking including statements with respect to the Issuer s business strategies, expansion and growth of operations, trends in its business, competitive advantage, and technological and regulatory changes, information on exchange rate risk and generally includes all statements preceded by, followed by or that include the words "believe", "expect", "project", "anticipate", "seek", "estimate" or similar expressions. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. Potential investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. - 5-
TABLE OF CONTENTS RISK FACTORS... 7 DOCUMENTS INCORPORATED BY REFERENCE... 16 TERMS AND CONDITIONS OF THE NOTES... 18 USE OF PROCEEDS... 35 DESCRIPTION OF THE ISSUER... 36 TAXATION... 46 SUBSCRIPTION AND SALE... 50 GENERAL INFORMATION... 52-6-
RISK FACTORS Prior to making an investment decision, prospective investors in the Notes should consider carefully, in the light of the circumstances and their investment objectives, the information contained in this entire Prospectus. Prospective investors in the Notes should nevertheless consider, among other things, the risk factors set out below. The Issuer believes that the factors described below represent the principal risks inherent in investing in the Notes, but the inability of the Issuer to pay principal or interest on or in connection with the Notes may occur for other unknown reasons and the Issuer does not represent that the statements below regarding the risks of holding the Notes are exhaustive. Prospective investors should also read the detailed information set out elsewhere in this Prospectus and reach their own views prior to making any investment decision. Terms defined in "Terms and Conditions of the Notes" below shall have the same meaning where used below. 1. FACTORS THAT MAY AFFECT THE ISSUER'S ABILITY TO FULFIL ITS OBLIGATIONS UNDER THE NOTES The risk factors relating to the Issuer and its activity are set out in (i) on pages 30 to 38 of Chapter 2.9 of the 2013 Annual Financial Report, in the French language and (ii) on pages 215 to 226 of Chapter 5.8 of the Annex to the Issuer s audited consolidated financial statements for the year ended 31 December 2013 contained in 2013 Annual Financial Report, in the French language, and incorporated by reference in this Prospectus (see "Documents Incorporated by Reference" herein). The Issuer expressly advises the prospective investors to carefully consider in full the risk factors set out in the 2013 Annual Financial Report. The Issuer is a member of two mutual insurance groups taking the form of a Société de Groupe d Assurance Mutuelle (SGAM) under which it has committed to a financial solidarity with the members of the relevant SGAM as described under "Description of the Issuer - SOCIÉTÉS DE GROUPE D ASSURANCE MUTUELLE (SGAM)" below. The Issuer's financial position and solvency could be affected should it be requested to participate in such financial solidarity. As from 1 January 2016, a new European regime governing solvency requirements, technical reserves, and other requirements for insurance companies will enter into force, the effect of such regime being, at this stage, uncertain because of the implementing measures which are still being developed. The European Union is in the process of developing and implementing a new regime in relation to solvency requirements and other matters, affecting the financial strength of insurers (Solvency II) within each Member State. It is intended that the new regime for insurers domiciled in the European Union will inter alia apply more risk sensitive standards to capital requirements and will effect a full revision of the insurance industry s solvency framework, prudential regime and supervision mechanisms. The European Parliament and Council of the European Union approved the directive containing the framework principles of Solvency II on 22 April and 10 November 2009, respectively. This directive was amended by the Omnibus II directive dated 16 April 2014 which supplements the Solvency II Directive and introduces transitional measures. At present, it is expected that the regime will become binding on insurers within each Member State from 1 January 2016. The Commission is expected to publish the "level two" implementing measures and "level three" guidance in 2015. While the overall intentions and process for implementing Solvency II are known, the future landscape of EU solvency regulation is still evolving, and the precise interpretation of the rules is still being developed. At this stage, significant uncertainties with respect to some of the implementing measures remain. - 7-
Further, Solvency II may have a pro-cyclical effect on insurers and increase the impact of any existing or future crisis on the Issuer's solvency. 2. FACTORS WHICH ARE MATERIAL FOR THE PURPOSE OF ASSESSING THE MARKET RISKS ASSOCIATED WITH THE NOTES 2.1 Risks related to the Notes generally The Notes may not be a suitable investment for all investors. Each prospective investor in the Notes must determine the suitability of that investment in light of its own circumstances. In particular, each prospective investor should: (a) (b) (c) (d) (e) have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits and risks of investing in the Notes and the information contained or incorporated by reference in this Prospectus or any applicable supplement; have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Notes and the impact the Notes will have on its overall investment portfolio; have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes, including where the currency for principal or interest payments is different from the prospective investor's currency; understand thoroughly the terms of the Notes and be familiar with the behaviour of any relevant financial markets; and be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks. Independent Review and Advice Each prospective investor in the Notes must determine, based on its own independent review and such professional advice as it deems appropriate under the circumstances, that its acquisition of the Notes is fully consistent with its financial needs, objectives and condition, complies and is fully consistent with all investment policies, guidelines and restrictions applicable to it and is a fit, proper and suitable investment for it, notwithstanding the clear and substantial risks inherent in investing in or holding the Notes. Each prospective investor should consult its own advisers as to legal, tax and related aspects of an investment in the Notes. A prospective investor may not rely on the Issuer or the Joint Lead Managers or any of their respective affiliates in connection with its determination as to the legality of its acquisition of the Notes or as to the other matters referred to above. Legality of Purchase Neither the Issuer, the Joint Lead Managers nor any of their respective affiliates has or assumes responsibility for the lawfulness of the acquisition of the Notes by a prospective investor in the Notes, whether under the laws of the jurisdiction of its incorporation or the jurisdiction in which it operates (if different), or for compliance by that prospective investor with any law, regulation or regulatory policy applicable to it. - 8-
Change of law The conditions of the Notes are based on the laws of France in effect as at the date of this Prospectus. No assurance can be given as to the impact of any possible judicial decision or change to the laws of France or administrative practice after the date of this Prospectus. Regulatory and legal investment considerations may restrict certain investments The investments activities of certain investors are subject to laws and regulations, or review or regulation by certain authorities. Each prospective investor in the Notes should consult its legal advisers to determine whether and to what extent (1) the Notes are legal investments for it, (2) the Notes can be used as collateral for various types of borrowing, and (3) other restrictions apply to its purchase or pledge of any Notes. Financial institutions should consult their legal advisers or the appropriate regulators to determine the appropriate treatment of the Notes under any applicable risk-based capital or similar rules. EU Savings Directive Under Council Directive 2003/48/EC on the taxation of savings income, Member States are required to provide to the tax authorities of other Member States details of certain payments of interest or similar income paid or secured by a person established in a Member State to or for the benefit of an individual resident in another Member State or certain limited types of entities established in another Member State. On 24 March 2014, the Council of the European Union adopted a Council Directive amending and broadening the scope of the requirements described above. Member States are required to apply these new requirements from 1 January 2017. The changes will expand the range of payments covered by the Directive, in particular to include additional types of income payable on securities. The Directive will also expand the circumstances in which payments that indirectly benefit an individual resident in a Member State must be reported. This approach will apply to payments made to, or secured for, persons, entities or legal arrangements (including trusts) where certain conditions are satisfied, and may in some cases apply where the person, entity or arrangement is established or effectively managed outside of the European Union. For a transitional period, Luxembourg and Austria are required (unless during that period they elect otherwise) to operate a withholding system in relation to such payments. The changes referred to above will broaden the types of payments subject to withholding in those Member States which still operate a withholding system when they are implemented. In April 2013, the Luxembourg Government announced its intention to abolish the withholding system with effect from 1 January 2015, in favour of automatic information exchange under the Directive. The end of the transitional period is dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries. A number of non-eu countries and territories including Switzerland have adopted similar measures (a withholding system in the case of Switzerland). If a payment were to be made or collected through a Member State which has opted for a withholding system and an amount of, or in respect of, tax were to be withheld from that payment, neither the Issuer nor any Paying Agent (as defined in the Conditions of the Notes) nor any other person would be obliged to pay additional amounts with respect to any Note as a result of the imposition of such withholding tax. - 9-
U.S. Foreign Account Tax Compliance Withholding Sections 1471 through 1477 of the U.S. Internal Revenue Code of 1986 (or FATCA) impose a new reporting regime and, potentially, a 30% withholding tax with respect to (i) certain payments from sources within the United States, (ii) "foreign passthru payments" made to certain non-u.s. financial institutions that do not comply with this new reporting regime, and (iii) payments to certain investors that do not provide identification information with respect to interests issued by a participating non-u.s. financial institution. Whilst the Notes are held by Euroclear France, Euroclear or Clearstream Luxembourg (together, the CSDs), it is not expected that FATCA will affect the amount of any payment received by the CSDs. However, FATCA may affect payments made to custodians or intermediaries in the subsequent payment chain leading to the ultimate investor if any such custodian or intermediary generally is unable to receive payments free of FATCA withholding. It also may affect payment to any ultimate investor that is a financial institution that is not entitled to receive payments free of withholding under FATCA, or an ultimate investor that fails to provide its broker (or other custodian or intermediary from which it receives payment) with any information, forms, other documentation or consents that may be necessary for the payments to be made free of FATCA withholding. Investors should choose the custodians or intermediaries with care (to ensure each is compliant with FATCA or other laws or agreements related to FATCA) and provide each custodian or intermediary with any information, forms, other documentation or consents that may be necessary for such custodian or intermediary to make a payment free of FATCA withholding. The Issuer s obligations under the Notes are discharged once it has paid the CSDs, and the Issuer has therefore no responsibility for any amount thereafter transmitted through the CSDs and custodians or intermediaries. Prospective investors should refer to the section "Taxation U.S. Foreign Account Tax Compliance Act." Taxation Prospective purchasers and sellers of the Notes should be aware that they may be required to pay taxes or documentary charges or duties in accordance with the laws and practices of the country where the Notes are transferred or other jurisdictions. In some jurisdictions, no official statements of the tax authorities or court decisions may be available for financial instruments such as the Notes. Prospective investors are advised not to rely upon the tax summary contained in this Prospectus but to ask for their own tax adviser s advice on their individual taxation with respect to the acquisition, sale and redemption of the Notes. Only these advisors are in a position to duly consider the specific situation of the prospective investor. This investment consideration has to be read in connection with the taxation sections of this Prospectus. The proposed financial transaction tax (the FTT) On 14 February 2013, the European Commission published a proposal (the Commission s Proposal) for a Directive for a common FTT in Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia (the participating Member States). The Commission s Proposal has very broad scope and could, if introduced, apply to certain dealings in the Notes (including secondary market transactions) in certain circumstances. Under the Commission s Proposal the FTT could apply in certain circumstances to persons both within and outside of the participating Member States. Generally, it would apply to certain dealings in the Notes where at least one party is a financial institution, and at least one party is established in a participating Member State. A financial institution may be, or be deemed to be, "established" in a participating Member State in a broad range of circumstances, including (a) by transacting with a person established in a participating Member State or (b) where the financial instrument which is subject to the dealings is issued in a participating Member State. - 10-
A joint statement issued in May 2014 by ten of the eleven participating Member States indicated an intention to implement the FTT progressively, such that it would initially apply to shares and certain derivatives, with this initial implementation occurring by 1 January 2016. The FTT, as initially implemented on this basis, may not apply to dealings in the Notes. The FTT proposal remains subject to negotiation between the participating Member States. It may therefore be altered prior to any implementation. Additional EU Member States may decide to participate. Prospective holders of the Notes are advised to seek their own professional advice in relation to the FTT. Modification and waiver The Terms and Conditions of the Notes contain provisions for calling meetings of Noteholders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Noteholders including Noteholders who did not attend and vote at the relevant meeting and Noteholders who voted in a manner contrary to the majority. French Insolvency Law Under French insolvency law, holders of debt securities (obligations) are automatically grouped into a single assembly of holders (the Assembly) in order to defend their common interests if a safeguard procedure (procédure de sauvegarde), an accelerated preservation procedure (procédure de sauvegarde accélérée), an accelerated financial preservation procedure (procédure de sauvegarde financière accélérée) or a judicial reorganisation procedure (procédure de redressement judiciaire) is opened in France with respect to the Issuer. The Assembly comprises holders of all debt securities issued by the Issuer (including the Notes), regardless of their place of issuance and governing law. The Assembly deliberates on the proposed safeguard plan (projet de plan de sauvegarde), accelerated safeguard plan (projet de plan de sauvegarde accélérée), accelerated financial safeguard plan (projet de plan de sauvegarde financière accélérée) or judicial reorganisation plan (projet de plan de redressement) applicable to the Issuer and may further agree to: increase the liabilities (charges) of holders of debt securities (including the Noteholders) by rescheduling payments which are due and/or partially or totally writing-off debts; establish an unequal treatment between holders of debt securities (including the Noteholders) as appropriate under the circumstances; and/or decide to convert debt securities (including the Notes) into shares or securities that give or may give right to share capital. Decisions of the Assembly will be taken by a two-third majority (calculated as a proportion of the principal amount of the debt securities held by the holders attending such Assembly or be represented thereat). No quorum is required to hold the Assembly. For the avoidance of doubt, the provisions relating to the Representation of the Noteholders described in the Terms and Conditions of the Notes set out in this Prospectus will not be applicable to the extent they conflict with compulsory insolvency law provisions that apply in these circumstances. - 11-
2.2 Risks related to the market generally Set out below is a brief description of the principal market risks, including interest rate risk and credit risk: Interest rate risk during the Fixed Rate Period The Notes bearing interest at a fixed rate, investment in the Notes involves the risk that subsequent changes in market interest rates may adversely affect the value of the Notes. While the nominal interest rate of a fixed interest rate note is fixed during the life of such a note or during a certain period of time, the current interest rate on the capital market (market interest rate) typically changes on a daily basis. As the market interest rate changes, the price of such note changes in the opposite direction. If the market interest rate increases, the price of such note typically falls, until the yield of such note is approximately equal to the market interest rate. If the market interest rate decreases, the price of a fixed rate note typically increases, until the yield of such note is approximately equal to the market interest rate. Noteholders should be aware that movements of the market interest rate can adversely affect the price of the Notes and can lead to losses for the Noteholders if they sell Notes during the period in which the market interest rate exceeds the fixed rate of the Notes. Interest rate risk during the Floating Rate Period Interest on the Notes for each Floating Rate Accrual Period shall be calculated on the basis of three (3) month EURIBOR. This rate is a floating rate and as such is not pre-defined for the lifespan of the Notes; conversely a floating rate allows investors to follow market changes with an instrument reflecting changes in the levels of yields. Higher rates mean a higher interest and lower rates mean a lower interest. Market Value of the Notes The market value of the Notes will be affected by the creditworthiness of the Issuer and a number of additional factors, including market interest and yield rates. The value of the Notes depends on a number of interrelated factors, including economic, financial and political events in France or elsewhere, including factors affecting capital markets generally and the stock exchange on which the Notes are listed. The price at which a holder of Notes will be able to sell the Notes may be at a discount, which could be substantial, from the issue or the purchase price paid by such purchaser. No active secondary market for the Notes The Notes may have no established trading market when issued, and one may never develop. If a market does develop, it may not be very liquid. Therefore, investors may not be able to sell their Notes easily or at prices that will provide them with a yield comparable to similar investments that have a developed secondary market. 2.3 Risks related to the structure of the Notes The Notes are undated subordinated obligations of the Issuer The obligations of the Issuer under the Notes in respect of principal and interest (including Arrears of Interest (as defined in "Terms and Conditions of the Notes Interest")) constitute Undated Subordinated Obligations of the Issuer and rank and shall at all times rank without any preference among themselves (save for certain obligations required to be preferred by French law) and equally and rateably with any other existing or future Undated Subordinated - 12-
Obligations of the Issuer, in priority to all prêts participatifs granted to, and titres participatifs issued by, the Issuer and to deeply subordinated obligations, but behind all present and future Unsubordinated Obligations and all Dated Subordinated Obligations of the Issuer (as all such terms are defined in "Terms and Conditions of the Notes Definitions"). If any judgement is rendered by any competent court declaring the judicial liquidation (liquidation judiciaire) or, following an order of redressement judiciaire, the sale of the whole business (cession totale de l'entreprise) of the Issuer, or if the Issuer is liquidated for any reason, the rights of the Noteholders in respect of principal and interest (including any Arrears of Interest) will be subordinated to the payments of all other creditors of the Issuer ranking in priority to the Noteholders including insurance companies and entities referred to in Article R. 322-132 of the French Code des assurances reinsured by the Issuer, holders of insurance policies issued by such entities and creditors with respect to Unsubordinated Obligations or Dated Subordinated Obligations. In the event of incomplete payment of creditors ranking senior to the holders of the Notes (in the context of voluntary or judicial liquidation of the Issuer, bankruptcy proceedings or any other similar proceedings affecting the Issuer), the obligations of the Issuer in respect of principal and interest (including Arrears of Interest) on the Notes will be terminated. Thus, the Noteholders face a higher performance risk than holders of Dated Subordinated Obligations and Unsubordinated Obligations of the Issuer. There are no events of default under the Notes The Terms and Conditions of the Notes do not provide for events of default allowing acceleration of the Notes if certain events occur. Accordingly, if the Issuer fails to meet any obligations under the Notes, including the payment of any interest, investors will not have the right of acceleration of principal. Upon a payment default, the sole remedy available to Noteholders for recovery of amounts owing in respect of any payment of principal of, or interest on, the Notes will be the institution of proceedings to enforce such payment. Notwithstanding the foregoing, the Issuer will not, by virtue of the institution of any such proceedings, be obliged to pay any sum or sums sooner than the same would otherwise have been payable by it. No limitation on issuing or guaranteeing debt ranking senior or pari passu with the Notes There is no restriction on the amount of debt which the Issuer may issue or guarantee. The Issuer and its subsidiaries and affiliates may incur additional indebtedness or grant guarantees in respect of indebtedness of third parties, including indebtedness or guarantees that rank pari passu or senior to the obligations of the Issuer under the Notes. If the Issuer's financial condition were to deteriorate, the Noteholders could suffer direct and materially adverse consequences, and if the Issuer were liquidated (whether voluntary or not), Noteholders could suffer loss of their entire investment. In addition, the Notes do not contain any "negative pledge" or similar clause, meaning that the Issuer and its subsidiaries and affiliates may pledge its or their assets to secure other obligations without granting similar security in respect of the Notes. Optional interest payment On any Optional Interest Payment Date (as defined in "Terms and Conditions of the Notes Interest"), the Issuer may, at its option, (i) pay all (but not some only) of the interest accrued to that date (but shall not have any obligation to make such payment), or (ii) elect, by giving notice to the Noteholders, to defer payment of all (but not some only) of the interest accrued to that date in respect of the Notes, and any failure to pay shall not constitute a default by the Issuer under the Notes or for any other purpose. - 13-
Any interest not paid on an Optional Interest Payment Date and deferred, so long as the same remains outstanding, constitute Arrears of Interest (as defined in "Terms and Conditions of the Notes Interest Deferral") and shall become due and payable as outlined in Condition 5.6.2. No scheduled redemption The Notes are undated securities in respect of which there is no fixed redemption or maturity date. The Issuer is under no obligation to redeem or repurchase the Notes at any time (except as provided in Condition 6.3.2 and Condition 6.7 of the Notes ("Redemption and Purchase Redemption for Taxation Reasons and Mandatory Redemption")) and, in any event, subject always to the prior approval of the Relevant Supervisory Authority). There will be no redemption at the option of the Noteholders. Therefore, prospective investors should be aware that they may be required to bear the financial risks of an investment in the Notes for an indefinite period and may not recover their investment in the foreseeable future. Early Redemption Risk Subject to the prior approval of the Relevant Supervisory Authority (if required at the time), the Issuer may redeem the Notes in whole, but not in part, on the applicable Interest Payment Date falling on the First Call Date, on 6 October 2024 or on any Interest Payment Date thereafter (as set out in Condition 6.2 of the Notes). Subject to the prior approval of the Relevant Supervisory Authority (if required at the time), the Notes may be redeemed in whole (but not in part), at the option of the Issuer, at any time for certain taxation, regulatory, accounting or rating reasons (as set out in Condition 6.3, Condition 6.4, Condition 6.5 and Condition 6.6 of the Terms and Conditions of the Notes). In particular, upon the occurrence of a Regulatory Event (as defined in Condition 1), there is a risk that the Issuer could decide to exercise its option to redeem the Notes early in accordance with Condition 6.4. Such redemption options will be exercised at the Principal Amount of the Notes together with all interest accrued (if any) (including Arrears of Interest) to the date fixed for redemption. There can be no assurance that, at the relevant time, Noteholders will be able to reinvest the amounts received upon redemption at a rate that will provide the same return as their investment in the Notes. The redemption at the option of the Issuer may affect the market value of the Notes. During any period when the Issuer may elect to redeem the Notes, the market value of the Notes generally will not rise substantially above the price at which they can be redeemed. This may also be true prior to the First Call Date. The Issuer may also be expected to redeem the Notes when its cost of borrowing is lower than the interest rate on the Notes. Exchange and variation If at any time the Issuer determines certain taxation, regulatory, accounting or rating methodology reasons (as set out in Conditions 6.3, 6.4, 6.5 and 6.6) (each a Special Event) has occurred on or after the Issue Date, the Issuer may, as an alternative to an early redemption of the Notes, on any Interest Payment Date, without the consent of the Noteholders and subject to certain conditions, (i) exchange the Notes for new notes replacing the Notes, or (ii) vary the terms of the Notes, so as to cure the relevant Special Event. - 14-
Rating may not reflect all risks The rating assigned to the Notes may not reflect the potential impact of all risks related to structure, market, additional factors discussed above, and other factors that may affect the value of the Notes. In addition, any other rating agencies may assign in the future a lower rating to the Notes which may have a negative impact on the value of the Notes. A rating (or the absence of a rating) is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the relevant rating agency at any time. In addition, a rating agency may change its methodologies for rating securities with features similar to the Notes in the future. If a rating agency were to change its practices for rating such securities in the future and its rating of the Notes were to be subsequently lowered, this may have a negative impact on the trading price of the Notes. - 15-
DOCUMENTS INCORPORATED BY REFERENCE This Prospectus should be read and construed in conjunction with the following documents (excluding any documents incorporated by reference in such documents) which have been previously published or are published simultaneously with this Prospectus and have been delivered to the Commission de surveillance du secteur financier in Luxembourg: (a) (b) (c) the 2012 annual financial report of the Issuer in the French language which includes the audited consolidated financial statements of the Issuer for the year ended 31 December 2012 and the auditors' report thereon (the "2012 Annual Financial Report"); the 2013 annual financial report of the Issuer in the French language which includes the audited consolidated financial statements of the Issuer for the year ended 31 December 2013 and the auditors' report thereon (the "2013 Annual Financial Report"); and the 2014 semi-annual financial report of the Issuer in the French language which includes the unaudited consolidated financial statements of the Issuer for the six-month period ended 30 June 2014 (the "2014 Semi-Annual Financial Report"). Any statement contained in a document which is incorporated by reference herein shall be modified or superseded for the purpose of this Prospectus to the extent that a statement contained herein modifies or supersedes such earlier statement (whether expressly, by implication or otherwise); any statement so modified or superseded shall not, except as so modified or superseded, constitute a part of this Prospectus. This Prospectus and the documents incorporated by reference will be available on the websites of the Issuer (www.macif.fr/web/site/groupe/accueil/groupe/publications) and the Luxembourg Stock Exchange (www.bourse.lu). So long as any of the Notes are outstanding, this Prospectus and the documents incorporated by reference in this Prospectus will also be available during usual business hours on any weekday (except Saturdays, Sundays and public holidays) for inspection and collection at the specified office of the Paying Agent. - 16-
CROSS-REFERENCE TABLE OF DOCUMENTS INCORPORATED BY REFERENCE Annex IX of the European Regulation 809/2004/EC Pages references 2012 Annual Financial Report 2013 Annual Financial Report 3. Risk Factors p. 30 to p. 38 (Chapter 2.9) and p. 215 to 226 (Chapter 5.8 of the Annex to the 2013 consolidate d financial statements) 5.1.1 Principal activities p. 22 to 27 description 11. Financial Information concerning the Issuer s Assets and Liabilities, Financial Position and Profits and Losses Statement of Financial Position 2014 Semi- Annual Financial Report p. 11 (Chapter 1.4) p. 138 and 139 p. 128 and 129 p. 24 and 25 Income statement p. 140 p. 130 p. 26 Accounting policies p. 158 to p. 147 to p. 44 to 63 177 165 Explanatory notes p. 178 to p. 166 to p. 64 to 96 227 214 Auditors report p. 260 and 261 p. 252 and 253 p. 115 and 116 11.5 Legal and p. 10 p. 15 arbitration proceedings Any other information incorporated by reference that is not included in the cross-reference list above is considered to be additional information to be disclosed to investors rather than information required by the relevant Annexes of the EU Prospectus Regulation (Commission Regulation 809/2004). - 17-
TERMS AND CONDITIONS OF THE NOTES The terms and conditions of the Notes will be as follows: The issue outside the Republic of France of 124,400,000 Undated Subordinated Fixed/Floating Rate Notes (the Notes) by Mutuelle Assurance des Commerçants et Industriels de France et des cadres et salariés de l'industrie et du Commerce (MACIF) (the Issuer) was authorised pursuant to a resolution of the Assemblée Générale of the Issuer adopted on 21 and 22 June 2014 and resolutions of the Conseil d'administration (Board of Directors) of the Issuer dated 29 August 2014 and 1 October 2014, previously approved by the Autorité de contrôle prudentiel et de résolution on 20 June 2014 in accordance with Article R.322-79 of the French Code des assurances. The Issuer will enter into a fiscal agency agreement dated 2 October 2014 with BNP Paribas Securities Services as fiscal agent and principal paying agent (the Agency Agreement). The fiscal agent, principal paying agent and paying agent for the time being are referred to in these Conditions as the Fiscal Agent, the Principal Paying Agent and, together with any additional paying agent appointed from time to time, the Paying Agent(s) (which expression shall include the Principal Paying Agent) and the Calculation Agent, respectively. Each such expression shall include the successors from time to time of the relevant persons, in such capacities, under the Agency Agreement, and are collectively referred to as the Agents. References below to Conditions are, unless the context otherwise requires, to the numbered paragraphs contained in the terms and conditions set forth herein. In these Conditions, holder of Notes, holder of any Note or Noteholder means the person whose name appears in the account of the relevant Account Holder as being entitled to such Notes. 1. DEFINITIONS For the purposes of these Conditions: Accounting Event means that an opinion of a recognised accountancy firm of international standing (which may be the Issuer s statutory auditors) has been delivered to the Issuer and the Principal Paying Agent stating that as a result of any change in, or amendment to, the Applicable Accounting Standards the funds raised through the issuance of the Notes must not, or must no longer, be recorded as "equity" in the consolidated financial statements of the Issuer and this cannot be avoided by the Issuer taking such measures it (acting in good faith) deems reasonable and appropriate. Actual/Actual (ICMA) means: (i) (ii) in the case of Notes where the number of days in the relevant period from (and including) the most recent Fixed Rate Interest Payment Date (or, if none, the Issue Date) to (but excluding) the relevant payment date (the Fixed Rate Accrual Period) is equal to or shorter than the Fixed Rate Interest Period during which the Fixed Rate Accrual Period ends, the number of days in such Fixed Rate Accrual Period divided by the number of days in such Fixed Rate Interest Period; or in the case of Notes where the Fixed Rate Accrual Period is longer than the Fixed Rate Interest Period during which the Fixed Rate Accrual Period ends, the sum of: (a) the number of days in such Fixed Rate Accrual Period falling in the Fixed Rate Interest Period in which the Fixed Rate Accrual Period begins divided by the number of days in such Fixed Rate Interest Period; and (b) the number of days in such Fixed Rate Accrual Period falling in the next Fixed Rate Interest Period divided by the number of days in such Fixed Rate Interest Period. Applicable Account Standards means the International Financial Reporting Standards (IFRS), as applicable at the relevant dates and for the relevant periods, or other accounting principles - 18-