MALAYAN BANKING BERHAD Multicurrency Medium Term Note Programme of up to USD5.0 Billion in nominal value Appendix A: Principal Terms and Conditions of the Proposal BACKGROUND INFORMATION (a) Issuer (i) Name Malayan Banking Berhad ( Maybank ) (ii) Address 14th Floor, Menara Maybank 100, Jalan Tun Perak 50050 Kuala Lumpur Malaysia (iii) (iv) Business registration no. Date and place of incorporation 3813-K 31 May 1960, Malaysia (v) Date of listing 17 February 1962 (vi) (vii) (viii) Status (please indicate either residentcontrolled company or nonresident controlled company) Principal activities Board of directors Resident Controlled Company Bumiputera Controlled Public Listed Company Maybank is the holding company and the major operating entity of Maybank and its group of companies. Maybank is principally engaged in the business of banking and finance in all its aspects. The subsidiaries of Maybank are principally engaged in the businesses of banking and finance, Islamic banking, investment banking including stock broking, general and life insurance, general and family takaful, trustee and nominee services, asset management and venture capital. Maybank s board of directors as at 30 March 2012 is as follows: 1. Tan Sri Dato Megat Zaharuddin bin Megat Mohd Nor
2. Dato Mohd Salleh bin Hj Harun 3. Dato Sri Abdul Wahid bin Omar 4. Tan Sri Datuk Dr Hadenan bin A. Jalil 5. Dato Seri Ismail bin Shahudin 6. Dato Dr. Tan Tat Wai 7. Zainal Abidin bin Jamal 8. Alister Maitland 9. Cheah Teik Seng 10. Dato Johan bin Ariffin 11. Datuk Mohaiyani binti Shamsudin (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders Substantial Shareholders (as at 30 March 2012) AmanahRaya Trustees Berhad (B/O: Skim Amanah Saham Bumiputera) No. of ordinary shares held Percentage (%) of shareholding 3,475,957,670 45.50 Citigroup Nominees (Tempatan) Sdn Bhd (B/O: Employees Provident Fund Board) 792,682,570 10.38 Permodalan Nasional Berhad 393,320,265 5.15 (x) Authorised and paid-up capital The authorised and paid up capital of Maybank as at 30 March 2012 are as follows: Authorised Share Capital RM10,000,000,000 comprising 10,000,000,000 ordinary shares of RM1.00 each Issued and Fully Paid Up Share Capital RM7,639,441,583 comprising 7,639,441,583 ordinary shares of RM1.00 each 2
PRINCIPAL TERMS AND CONDITIONS (a) Names of parties involved in the proposed transaction (where applicable) (i) Principal adviser Maybank Investment Bank Berhad ( Maybank IB ) (ii) Lead arranger Maybank IB (iii) Co-arranger Maybank Kim Eng Securities Pte. Ltd. Barclays Bank PLC Nomura International plc (collectively referred to as Arrangers ) (iv) Solicitor Linklaters Singapore Pte Ltd (foreign counsel to the Issuer) Adnan, Sundra & Low (local counsel to the Issuer) Allen & Overy LLP (foreign counsel to the Arrangers) Shearn Delamore & Co. (local counsel to the Arrangers) (v) Financial adviser Not applicable (vi) Technical adviser Not applicable (vii) Trustee Not applicable (viii) Guarantor Not applicable (ix) Valuer Not applicable (x) Facility agent Not applicable (xi) Primary subscriber (under a boughtdeal arrangement) and amount subscribed Not applicable 3
(xii) Underwriter and amount underwritten Not applicable (xiii) Central depository Any one or more of the following: Euroclear Bank S.A./N.V. as operator of the Euroclear system; Clearstream Banking, société anonyme (Clearstream, Luxembourg); Central Depository (Pte) Limited; or a sub-custodian for the Hong Kong Monetary Authority, as operator of the Central Moneymarkets Unit Service, operated by the Hong Kong Monetary Authority; and/ or any other clearing system as specified in the applicable Pricing Supplement. (xiv) Paying agent The Hongkong and Shanghai Banking Corporation Limited (xv) (xvi) Reporting accountant Calculation agent Ernst & Young Not applicable (xvii) Others (please specify) (a) Dealers To be appointed from time to time. (b) Fiscal Agent The Hongkong and Shanghai Banking Corporation Limited (c) Registrar and Transfer Agent The Hongkong and Shanghai Banking Corporation Limited (b) Facility description A multicurrency medium term note programme ( Proposed MTN Programme ) which caters for senior notes ( Senior Notes ) and subordinated notes ( Subordinated Notes ) issues (collectively known as the Notes ). Notes may be issued in bearer or registered form. The Subordinated Notes issued under the Proposed MTN Programme will qualify as Tier 2 capital of the Issuer subject to compliance with the requirements as specified in the Risk Weighted Capital Adequacy 4
Framework and Capital Adequacy Framework for Islamic Banks (General Requirements and Capital Components) published by Bank Negara Malaysia ( BNM ), as amended from time to time. The terms and conditions of the Subordinated Notes may be amended from time to time in order to comply with the regulatory requirements of BNM in accordance with item (v)(iii) of this Principal Terms and Conditions. (c) Issue/ programme size Up to USD5.0 billion (or its equivalent in other currencies calculated as described under General Description of the Programme of the Offering Circular) outstanding at any time. The Issuer may increase the amount of the Proposed MTN Programme in accordance with the terms of the relevant programme agreement. (d) Tenure of issue/ debt programme (or facility) Tenure of the Proposed MTN Programme Perpetual Tenure of the Senior Notes The tenure of the Senior Notes issued under the Proposed MTN Programme shall be determined prior to each issuance. Tenure of the Subordinated Notes The tenure of the Subordinated Notes issued under the Proposed MTN Programme shall be not less than five (5) years from the issue date. Each issuance of Subordinated Notes under the Proposed MTN Programme may have a call option ( Call Option ) (to be determined prior to the relevant issue date). Under the Call Option, if applicable, the Issuer shall have the option to redeem the Subordinated Notes at par, in whole or in part, on the Call Date, subject to the redemption conditions being satisfied. For the avoidance of doubt, the optional redemption of one tranche of the Subordinated Notes shall not trigger the redemption of other tranches of the Subordinated Notes. Call Date is defined as any coupon payment date falling on or after the 5 th year from the issue date of that tranche of Subordinated Notes. 5
(e) Availability period of debt programme (or facility) For the avoidance of doubt, the Notes shall have a maturity of at least one year. The Proposed MTN Programme is available throughout its tenure. (f) Interest/ coupon rate Interest (if any) payable in respect of Notes which are applicable to each tranche of Notes will be determined prior to each issuance and will be set out in the applicable Pricing Supplement. Fixed Rate Notes Fixed interest will be payable on such date or dates as may be agreed between the Issuer and the relevant Dealer and on redemption and will be calculated on the basis of such Day Count Fraction as may be agreed between the Issuer and the Dealer. Floating Rate Notes Floating Rate Notes will bear interest at a rate determined: (a) (b) (c) on the same basis as the floating rate under a notional interest rate swap transaction in the relevant Specified Currency governed by an agreement incorporating the 2006 ISDA Definitions (as published by the International Swaps and Derivatives Association, Inc., and as amended and updated as at the Issue Date of the first Tranche of the Notes of the relevant Series); on the basis of a reference rate appearing on the agreed screen page of a commercial quotation service; or or on such other basis as may be agreed between the Issuer and the relevant Dealer. The margin (if any) relating to such floating rate will be agreed between the Issuer and the relevant Dealer for each series of Floating Rate Notes. Other provisions in relation to Floating Rate Notes and Index Linked Interest Notes: Floating Rate Notes and Index Linked Interest Notes may also have a maximum interest rate, a minimum interest rate or both. 6
(g) (h) (i) (j) Interest/ coupon payment frequency Interest/ coupon payment basis Security/ collateral (if any) Details on utilisation of proceeds by issuer. If proceeds are to be utilised for project or capital expenditure, description of the project or capital expenditure, where applicable Interest on Floating Rate Notes and Index Linked Interest Notes in respect of each Interest Period, as agreed prior to issue by the Issuer and the relevant Dealer, will be payable on such Interest Payment Dates, and will be calculated on the basis of such Day Count Fraction, as may be agreed between the Issuer and the relevant Dealer. Index Linked Notes Payments of principal in respect of Index Linked Redemption Notes or of interest in respect of Index Linked Interest Notes will be calculated by reference to such index and/or formula or to changes in the prices of securities or commodities or to such other factors as the Issuer and the relevant Dealer may agree. Dual Currency Notes Payments (whether in respect of principal or interest and whether at maturity or otherwise) in respect of Dual Currency Notes will be made in such currencies, and based on such rates of exchange, as the Issuer and the relevant Dealer may agree. Zero Coupon Notes Zero Coupon Notes will be offered and sold at a discount to their nominal amount, or offered and sold at their nominal amount and be redeemed at a premium, and will not bear interest. Interest/ coupon payment frequency will be determined prior to each issuance and will be set out in the applicable Pricing Supplement. Interest/ coupon payment basis will be determined prior to each issuance and will be set out in the applicable Pricing Supplement. None Unless otherwise specified in the applicable Pricing Supplement pertaining to the Proposed MTN Programme, the net proceeds from each issue of notes under the Proposed MTN Programme will be applied by the Issuer for its working capital, general banking and other corporate purposes. 7
(k) (l) Sinking fund and designated accounts (if any) Rating * Credit rating assigned (Please specify if this is an indicative rating or if the credit rating is not assigned for the full amount in the case of debt programme, adequate disclosures under paragraph 7.02 of the PDS Guidelines to be made) Not applicable Standard & Poor s Rating Services For the MTN Programme: A- (for Senior Notes) Moody s Investors Services Limited For the MTN Programme: (P)A3 (for Senior Notes) (provisional rating) The rating for the Notes to be issued shall be reflected in the applicable Pricing Supplement. * Name of rating agency Standard & Poor's Ratings Services and Moody s Investors Services Limited (m) Mode of issue Notes may be distributed by way of book building and/or private placement. (n) (o) Selling restriction, including tradability (i.e. tradable or non-tradable) Listing status and types of listing There are restrictions on the offer, sale and transfer of the notes under the Proposed MTN Programme in the United States, the European Economic Area including the United Kingdom, Singapore, Japan, Malaysia and Hong Kong and such other restrictions as may be required in connection with the offering and sale of a particular tranche of notes, see Subscription and Sale of the Offering Circular. Application will be made to the Singapore Exchange Securities Trading Limited ( SGX-ST ) for permission to deal in and quotation for any notes that may be issued pursuant to the Proposed MTN Programme and which are agreed at or prior to the time of issue thereof to be so listed on the SGX-ST. The notes under the Proposed MTN Programme will also be listed on the Labuan International Financial Exchange ( LFX ) and such other or further stock exchange(s) as may be agreed between the Issuer and the relevant dealer in relation to each series of notes to be issued under the Proposed MTN Programme. For so long as any notes under the Proposed MTN Programme are listed on the SGX-ST and the rules of the SGX-ST so require, such notes will be traded on the SGX-ST in a minimum board lot size of S$200,000 (or its equivalent in other currencies). The applicable Pricing Supplement will state whether 8
(p) Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify) or not the relevant notes under the Proposed MTN Programme are to be listed and, if so, on which stock exchange(s). The approval of BNM has been obtained for the establishment of the Proposed MTN Programme on 2 May 2012. The Issuer is allowed to issue Subordinated Notes upon finalisation of the Basel III guidelines to be issued by BNM and prior approval from BNM will be required for each issuance of the Subordinated Notes. (q) Conditions precedent The availability of the first issue of Notes under the Proposed MTN Programme shall be subject to conditions precedent, including but not limited to the following: 1. A conformed copy of each of the following agreements (the Agreements ): (a) (b) (c) (d) programme agreement; agency agreement; deeds of covenant; and master depository services agreement, and confirmation that executed copies of each Agreement have been delivered to the appropriate parties. 2. A certified copy of the constitutional documents of the Issuer. 3. A certified copy of all resolutions and other authorisations required to be passed or given, and evidence of any other action required to be taken, on behalf of the Issuer: (a) (b) (c) to approve its entry into the Agreements, the creation and each subsequent update of the Proposed MTN Programme and the issue of Notes; to authorise appropriate persons to execute each of the Agreements and any Notes and to take any other action in connection therewith; and to authorise appropriate persons to enter into agreements with any Dealer on behalf of the Issuer to issue Notes. 9
4. Certified copies (and certified English translations, where relevant) of any other governmental or other consents, authorisations and approvals required for the Issuer to issue Notes. 5. Legal opinions addressed to each of the Dealers dated on or after the date of this Agreement, in such form and with such content as the Dealers may reasonably require, from: (a) (b) (c) Shearn Delamore & Co., legal advisers to the Dealers as to Malaysian law; Allen & Overy LLP, legal advisers to the Dealers as to English law; and legal advisers approved by the Dealers as to the laws of Hong Kong and Singapore where Notes may be issued through the Issuer s Hong Kong Branch or Singapore Branch under the Proposed MTN Programme. (r) Representations and warranties 6. Comfort letter from Ernst & Young, as independent auditors of the Issuer, in such form and with such content as the Dealers may reasonably request. Including but not limited to the following: (a) that the Issuer has been duly incorporated and the Issuer is validly existing under the laws of Malaysia with full power and authority to own, use and operate its assets (financial or otherwise), to conduct its business as described in the Offering Circular, and is lawfully qualified to do business in the jurisdictions in which it presently conducts business; (b) that the Agreements have been duly authorised, executed and delivered by the Issuer and constitute legal, valid and binding obligations of the Issuer enforceable in accordance with their respective terms subject to the laws of bankruptcy and other laws affecting the rights of creditors generally; (c) that the issue of the Notes have been, or will before the Issue Date be duly authorised by the 10
Issuer and, when duly executed, authenticated, issued (including as applicable through the Issuer's Hong Kong Branch or Singapore Branch) and delivered, and in the case of the Registered Notes, registered in the register maintained for that purpose, in accordance with the Agency Agreement, will constitute legal, valid and binding obligations of the Issuer enforceable in accordance with their respective terms and conform to the descriptions thereof contained in the Offering Circular, subject to the laws of bankruptcy and other laws affecting the rights of creditors generally; (d) that the execution and delivery of the Agreements, the issue of the Notes, the carrying out of the other transactions provided under the Notes and by the Agreements and compliance with their terms and the offering of the Notes in the manner contemplated under the Offering Circular do not and will not infringe any applicable law or regulation of any relevant jurisdiction and are not and will not be contrary to the provisions of the constitutive documents of the Issuer and will not result in any breach of the terms of, or constitute a default under, any instrument or agreement to which the Issuer is a party or by which any of their respective properties is bound except for such conflicts, breaches, defaults or infringements that would not have a Material Adverse Effect; (e) that in any proceedings taken in relation to the Notes or the Agreements, the Issuer is not entitled to claim for it or any of its assets immunity in respect of its obligations under the Agreements or the Notes or from suit, execution, attachment or other legal process (whether through service or notice, attachment prior to judgment or attachment in aid of execution) under any law. The execution of the Agreements constitutes, and the exercise of the Issuer's rights and performance of the Issuer's obligations hereunder will constitute, private and commercial acts of the Issuer done and performed for private and commercial purposes; (f) that to the best of the Issuer s knowledge and belief upon due and careful enquiry, no event has occurred or circumstances arisen and is 11
(s) Events of default (or enforcement event, where applicable) continuing which, had the Notes already been issued, would (whether or not with the giving of notice and/or the lapse of time) constitute an event described as an Event of Default in the terms and conditions; and (g) that none of the Issuer nor its affiliates nor any person acting on its or their behalf (other than the Dealers, their respective affiliates or any person acting on their behalf, as to whom the Issuer makes no representation) has engaged or will engage in any directed selling efforts (as defined in Regulation S under the U.S. Securities Act of 1933) with respect to the Notes. Events of Default relating to Senior Notes If any one or more of the following events (each an Event of Default) shall occur and be continuing: (a) Payment default: default is made in the payment of any principal or interest due in respect of the Senior Notes and the default continues for a period of 7 business days; (b) Other defaults: the Issuer fails to perform or comply with any of its other obligations under the terms and conditions of the Notes and (except in any case where the failure is incapable of remedy, when no such continuation or notice as hereinafter mentioned is required) the failure continues for the period of 30 days next following the service by any Noteholder on the Issuer of notice requiring the same to be remedied; (c) Cross-acceleration: (i) any Indebtedness for Borrowed Money (as defined below) of the Issuer becomes due and repayable or is capable of becoming due and repayable prematurely by reason of an event of default (however described); (ii) the Issuer fails to make any payment in respect of any Indebtedness for Borrowed Money on the due date for payment, or, as the case may be, within any originally applicable grace period; or (iii) default is made by the Issuer in making any payment due under any guarantee and/or indemnity given by it in relation to any Indebtedness for Borrowed Money of any other person; provided that no event described in this subparagraph (c) shall constitute an Event of 12
Default unless the relevant amount of Indebtedness for Borrowed Money or other relative liability due and unpaid, either alone or when aggregated (without duplication) with other amounts of Indebtedness for Borrowed Money and/or other liabilities due and unpaid relative to all (if any) other events specified in (i) to (iii) above, amounts to at least U.S.$50,000,000 (or its equivalent in any other currency); (d) Winding-up of the Issuer: an order is made by any competent court or an effective resolution is passed for the winding-up or dissolution of the Issuer; (e) Insolvency: the Issuer ceases to carry on the whole or a substantial part of its business, save for the purpose of reorganisation on terms previously approved by an extraordinary resolution of the Noteholders, stops or threatens to stop payment of, or is unable to, or admits inability to, pay, its debts (or any class of its debts) as they fall due or is deemed unable to pay its debts pursuant to or for the purposes of any applicable law, or is adjudicated or found bankrupt or insolvent; (f) Security enforced: (i) proceedings are initiated against the Issuer under any applicable liquidation, insolvency, composition, reorganisation or other similar laws, or an application is made (or documents filed with a court) for the appointment of an administrative or other receiver, manager, administrator or other similar official, or an administrative or other receiver, manager, administrator or other similar official is appointed, in relation to the Issuer, the whole or any substantial part of the Issuer's undertaking or assets or, an encumbrancer takes possession of the whole or any substantial part of the Issuer's undertaking or assets or, a distress, execution, attachment, sequestration or other process is levied, enforced upon, sued out or put in force against the whole or any substantial part of the Issuer's undertakings or assets, and (ii) in any such case (other than the appointment of an administrator) unless initiated by the relevant company, is not discharged within 60 days; (g) Illegality: it is or will become unlawful for the 13
Issuer to perform or comply with any one or more of its obligations under any of the Senior Notes; or (h) Analogous events: any event occurs which, under the laws of any relevant jurisdiction, has an analogous effect to any of the events referred to in paragraphs (a) to (f) above, then any holder of a Note may, by written notice to the Issuer at the specified office of the Fiscal Agent, effective upon the date of receipt thereof by the Fiscal Agent, declare any Senior Note held by it to be forthwith due and payable whereupon the same shall become forthwith due and payable at its Early Redemption Amount, together with accrued interest (if any) to the date of repayment, without presentment, demand, protest or other notice of any kind. Indebtedness for Borrowed Money means any indebtedness (whether being principal, premium, interest or other amounts) for or in respect of any notes, bonds, debentures, debenture stock, loan stock or other securities or any borrowed money. Events of Default relating to Subordinated Notes If default is made in the payment of any amount of principal due in respect of the Subordinated Notes (each, an Event of Default) and the default continues for a period of 7 business days, then in order to enforce the obligations of the Issuer, any holder of a Note may institute a Winding-Up Proceeding (as defined below) against the Issuer provided that such Noteholder shall have no right to accelerate payment under such Subordinated Note in the case of such default in the payment of interest on or other amounts owing under such Subordinated Note or a default in the performance of any other obligation of the Issuer in such Subordinated Note or under the Agency Agreement. If an order is made or an effective resolution is passed for the Winding-Up (as defined below) of the Issuer (whether or not an Event of Default has occurred and is continuing) then any holder of a Note, by written notice to the Issuer at the specified office of the Fiscal Agent, effective upon the date of receipt there by the Fiscal Agent, declare any Subordinated Note held by it to be forthwith due and payable whereupon the same 14
shall become forthwith due and payable at its Early Redemption Amount, together with accrued interest to the date of repayment, without presentment, demand, protest or other notice of any kind. Winding-Up shall mean, with respect to the Issuer, a final and effective order or resolution for the bankruptcy, winding-up, liquidation, receivership or similar proceeding in respect of the Issuer (except for the purposes of a consolidation, amalgamation, merger or reorganisation the terms of which have previously been approved by an extraordinary resolution of the Noteholders); and Winding-Up Proceedings shall mean, with respect to the Issuer, (a) a proceedings shall have been instituted or a decree or order shall have been entered in any court or agency or supervisory authority in Malaysia having jurisdiction in respect of the same for the appointment of a receiver or liquidator in any insolvency, rehabilitation, readjustment of debt, marshalling of assets and liabilities, or similar arrangements involving the Issuer or all or substantially all of its property, or for the winding up of or liquidation of its affairs and such proceeding, decree or order shall not have been vacated or shall have remained in force, undischarged or unstayed for a period of 60 days; or (b) the Issuer shall file a petition to take advantage of any insolvency statute. (t) Covenants Including but not limited to the following: (a) (b) (c) The Issuer will comply with all of their respective obligations under the Terms and Conditions of the Notes contained in the Offering Circular. The Issuer shall promptly after becoming aware of the occurrence thereof notify each Dealer of anything which renders untrue or incorrect any of its representations and warranties in the Programme Agreement and will forthwith take such steps as the Dealers may reasonably require to remedy and/or publicise the fact; If, in relation to any issue of Notes, it is agreed between the Issuer and the relevant Dealer or the Lead Manager, as the case may be, to list or admit to trading the Notes on a Stock Exchange, the Issuer undertakes to use its best endeavours to obtain and maintain the listing of 15
the Notes on that Stock Exchange. If any Notes cease to be listed on the relevant Stock Exchange or it should be impractical or unduly burdensome to maintain such listing, the Issuer shall use its best endeavours promptly to list the Notes on a Stock Exchange to be agreed between the Issuer and the relevant Dealer or, as the case may be, the Lead Manager; (d) The Issuer will pay any stamp, issue, registration, documentary or other taxes and duties, interest and penalties, imposed under the laws of Malaysia or other relevant jurisdictions, or any political subdivision thereof, payable on or in connection with the creation, issue, initial offering or sale of the Notes, the execution or delivery of the Agreements, and any goods and services or similar tax imposed under the laws of Malaysia or other relevant jurisdictions and payable in respect of that amount (and references in this Agreement to such amount shall be deemed to include any such taxes so payable in addition to it), save as otherwise may be agreed; (e) The Issuer will at all times ensure that all necessary action is taken and all necessary conditions are fulfilled (including, without limitation, obtaining and, where relevant, maintaining in full force and effect all necessary permissions, consents or approvals of all relevant governmental authorities) so that it may lawfully comply with its obligations under all Notes and the Agreements and, further, so that it may comply with any applicable laws, regulations and guidance from time to time promulgated by any governmental and regulatory authorities relevant in the context of the Agreements and the issue of any Notes; (f) During the period commencing on an Agreement Date and ending on the Issue Date with respect to any Notes which are to be listed, the Issuer will not, without the prior consent of the relevant Dealer or, as the case may be, the Lead Manager, issue or agree to issue any other notes, bonds or other debt securities of whatsoever nature (other than Notes to be issued to the same Dealer) where the notes, 16
bonds or other debt securities would have the same maturity and currency as the Notes to be issued on the relevant Issue Date; (g) (h) The Issuer will, at the same time as it is despatched, furnish the Dealers with a copy of every notice of a meeting of the holders of the Notes (or any of them) that is material in the context of the Proposed MTN Programme and which is despatched at the instigation of the Issuer and will notify the Dealers upon its becoming aware that a meeting of the holders of the Notes (or any of them) has otherwise been convened; and The Issuer will use the net proceeds received by it from the sale of the Notes in the manner specified in the Offering Circular under the section entitled Use of Proceeds" and in section (j) Details on utilisation of proceeds above. (u) Provisions on buy-back and early redemption of bonds Unless previously redeemed or purchased and cancelled as specified below, each Note will be redeemed by the Issuer at its Final Redemption Amount specified in, or determined in the manner specified in, the applicable Pricing Supplement in the relevant specified currency on the maturity date. In addition, if specified in, or determined in the manner specified in, the applicable Pricing Supplement, the Issuer may, at its option, redeem any tranche of Subordinated Notes (in whole only, but not in part) if such Notes will no longer qualify as Tier 2 Capital of the Issuer for the purposes of BNM s capital adequacy requirements under any applicable regulations. Tax Redemption Subject (in the case of Subordinated Notes) to paragraph v(iv) hereto, the Notes may be redeemed at the option of the Issuer in whole, but not in part, at any time (if the Note is neither a Floating Rate Note, an Index Linked Interest Note nor a Dual Currency Interest Note) or on any Interest Payment Date (if this Note is either a Floating Rate Note, an Index Linked Interest Note or a Dual Currency Interest Note) if (a) on the occasion of the next payment due under the Notes, the Issuer has or will become obliged to pay additional amounts as a result of any change in, or 17
amendment to, the laws or regulations of Malaysia, Hong Kong or Singapore, or any change in the application or official interpretation of such laws and regulations, which change or amendment becomes effective on or after the date on which agreement is reached to issue the first tranche of the Notes; and (b) such obligation cannot be avoided by the Issuer taking reasonable measures available to it, and the conditions of the Notes are satisfied provided that in the case of Subordinated Notes, the Issuer has certified that BNM or any successor thereto has consented to such redemption. Investor Call and Put Options Investor call and investor put options are available if specified in the applicable Pricing Supplement. Purchases and Cancellation Subject to the paragraph in relation to Conditions for Purchase in respect of Subordinated Notes set out below, the Issuer or any of its Subsidiaries may at any time purchase Notes (provided that, in the case of Definitive Bearer Notes, all unmatured receipts, coupons and talons appertaining thereto are purchased therewith) at any price in the open market or otherwise. All Notes which are purchased by the Issuer or any of its Subsidiaries (other than those purchased in the ordinary course of business) will forthwith be cancelled and accordingly may not be reissued or resold. For this purpose, the term ordinary course of business includes those activities performed by the Issuer or any related corporation of the Issuer for third parties and excludes those activities performed for the funds of the Issuer or such related corporation. All Notes which are redeemed will forthwith be cancelled (together with all unmatured receipts, coupons and talons attached thereto or surrendered therewith at the time of redemption). Conditions for Purchase in respect of Subordinated Notes The Issuer or any related corporation of the Issuer may at any time purchase, subject to the prior approval of BNM (but which approval shall not be required for a purchase made in the ordinary course of 18
business), the Subordinated Notes in any manner and at any price. The Subordinated Notes purchased by the Issuer or any related corporation of the Issuer shall be deemed not to remain outstanding for the purposes of attending and/or voting at any meeting of the Noteholders of any Series of the Notes and for the purposes of determining the quorum and/or majority required for requisitioning, or voting at, any such meeting as set out in the agency agreement. All Subordinated Notes which are (a) redeemed or (b) purchased by the Issuer or any related corporation of the Issuer (other than in the ordinary course of business) will forthwith, subject to the prior approval of BNM, be cancelled and accordingly may not be reissued or resold. (v) Other principal terms and conditions for the issue (i) (ii) Status of Senior Notes Status of the Subordinated Notes If the Notes are specified as Senior Notes in the applicable Pricing Supplement, the Senior Notes and the relative receipts and coupons constitute direct, unconditional, unsubordinated and (subject to the provisions of the negative pledge) unsecured obligations of the Issuer, ranking pari passu and without any preference among themselves. The payment obligations of the Issuer under the Senior Notes will rank at least equally with all other unsecured and unsubordinated obligations of the Issuer, present and future, save for such exceptions as maybe provided by applicable legislation and subject to negative pledge. If the Notes are specified as Subordinated Notes in the applicable Pricing Supplement, the Subordinated Notes and the relative receipts and coupons constitute direct, unconditional, unsecured and subordinated obligations of the Issuer, ranking pari passu without any preference among themselves. Provisions relating to the terms of the Subordinated Notes will be set out in the applicable Pricing Supplement. The subordination provisions set out in the applicable Pricing Supplement will be effective only upon the occurrence of any Winding-Up Proceeding of the Issuer. On a Winding-Up of the Issuer, there may be no surplus assets available to meet the claims of the Noteholders, receiptholders or couponholders of the Subordinated Notes after the claims of the parties ranking senior to the Noteholders, receiptholders and 19
couponholders of the Subordinated Notes have been satisfied. The terms and conditions of the Subordinated Notes will be subject to applicable legal and regulatory provisions governing the status of capital adequacy and subordinated securities of Malaysian banks. Accordingly, further provisions relating to the terms of any Subordinated Notes issued under this Proposed MTN Programme (which may include any further procedures required by the Fiscal Agent, the Registrar, CDP, Euroclear, Clearstream, Luxembourg or the CMU Service) will, if applicable, be set out in the applicable Pricing Supplement. (iii) Amendments of terms and conditions in relation to the Subordinated Notes for regulatory compliance (iv) Variation instead of Redemption of the Subordinated Notes Subject to regulatory approval, if relevant, the terms and conditions of the Subordinated Notes may be amended from time to time in order to comply with regulatory requirements of BNM, without the prior consent of the Noteholders. The Issuer is allowed to issue Subordinated Notes upon finalisation of the Basel III guidelines to be issued by BNM and prior approval from BNM will be required for each issuance of the Subordinated Notes. The provisions relating to variation instead of redemption of Subordinated Notes shall be specified in the applicable Pricing Supplement. (v) Redemption or Variation of Conditions of Subordinated Notes Any redemption or variation of the terms of Subordinated Notes by the Issuer is subject to the Issuer obtaining the prior written approval of BNM and any other regulatory approvals that may be required, and satisfying any conditions that BNM (and/or any other regulator) may impose at the time of such approval. (vi) Loss Absorption upon a Trigger Event in respect of Subordinated Notes Subordinated Notes shall have provisions relating to Loss Absorption upon a Trigger Event as defined and as set out in the applicable Pricing Supplement. 20