COMBINATION NOTES SUPPLEMENT
EATON VANCE CDO VIII, LTD.
U.S.$2,000,000 Class II Combination Notes Due 2014
Eaton Vance CDO VIII, Ltd., a Cayman Islands exempted limited liability company (the "Issuer"), will issue the U.S.$ 2,000,000 Class II Combination Notes
Due 2014 (the "Combination Notes"). On July 27, 2006, the Issuer issued the (i) the U.S.$ 583,500,000 Class A Senior Secured Floating Rate Notes Due 2022 (the "Class
A Notes"), the U.S.$ 48,000,000 Class B Second Priority Deferrable Floating Rate Notes Due 2022 (the "Class B Notes"), the U.S.$ 23,250,000 Class C Third Priority
Deferrable Floating Rate Notes Due 2022 (the "Class C Notes") and the U.S.$ 33,750,000 Class D Fourth Priority Deferrable Floating Rate Notes Due 2022 (the "Class D
Notes" and, together with the Class A Notes, the Class B Notes and the Class C Notes, the "Senior Notes"), (ii) the U.S.$ 61,500,000 Subordinated Notes Due 2022 (the
"Subordinated Notes") and (iii) the U.S. $5,000,000 Class I Combination Notes Due 2015 (the "Class I Combination Notes"). The Senior Notes, the Subordinated Notes
and the Class I Combination Notes are not being offered hereby (except, in the case of the Subordinated Notes, indirectly through the Combination Notes, to the extent of
the Subordinated Notes comprising the Subordinated Note Collateral). The Combination Notes are payable solely from, and are secured solely by, an account (the
"Combination Note Account"), to which the following assets have been or will be credited: (i) a note issued by the U.S. Treasury (or cash to purchase such note), CUSIP
912833DF4, on which no interest payments will be made and a single scheduled principal payment of $2,000,000 will be due at maturity on February 15, 2014 (the
"Treasury Strip") and (ii) Subordinated Notes (or cash to purchase such Subordinated Notes) with an aggregate initial principal balance of U.S. $606,200 (the
"Subordinated Note Collateral" and, together with the Treasury Strip, the "Combination Note Assets").
An investment in the Combination Notes is equivalent (in part) to an investment in Subordinated Notes. Investors interested in purchasing
Combination Notes should review the Offering Memorandum dated August 3, 2006 relating to the Senior Notes and the Subordinated Notes. See "Risk Factors"
beginning on page 7 of this Supplement and beginning on page 13 of the Offering Memorandum for a description of certain information that should be considered
in connection with an investment in the Combination Notes.
This Combination Note Supplement comprises a prospectus for the purposes of Article 5 of Directive 2003/71/EC (the “Prospectus Directive”).
Application will be made to the Irish Financial Services Regulatory Authority, as competent authority under Directive 2003/71/EC, for the prospectus to be
approved. Such approval relates only to the Combination Notes that are to be admitted to trading on the regulated market of the Irish Stock Exchange or other
regulated markets for the purposes of Directive 93/22/EEC or which are to be offered to the public in any Member State of the European Economic Area.
Application will be made to the Irish Stock Exchange (the "Irish Stock Exchange") for the Combination Notes to be admitted to the Official List and to trading on
its regulated market. There can be no assurance that listing on the Irish Stock Exchange will be granted. No application will be made to list the Combination
Notes on any other stock exchange. This Prospectus is to be read in conjunction with the Offering Memorandum dated August 3, 2006 relating to the Senior Notes
and the Subordinated Notes, which is deemed to be incorporated herein by reference.
(continued on next page)
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Holders of Combination Notes will have recourse for payments on their Combination Notes solely to the Combination Note Account and the Combination Note
Assets credited to such account, and will not have recourse to any other assets of the Issuer. To the extent that the interest, principal and other amounts payable on the
Combination Note Assets is insufficient to pay amounts due on the Combination Notes, the holders of the Combination Notes will have no further claim against the Issuer
for the amount of such shortfall. The Combination Notes do not represent interests in or obligations of, and are not insured or guaranteed by, the Collateral Manager, the
Combination Note Placement Agent, the Collateral Administrator or the Combination Note Trustee or any of their respective affiliates, partners, members, officers or
directors or any other person or entity.
It is a condition of the issuance of the Combination Notes that the Combination Notes be issued with a rating of "Aaa" by Moody’s. The rating of the
Combination Notes address only the ultimate receipt of the Rated Balance (adjusted from time to time as described herein). The rating of the Combination Notes does not
address any other distributions or payments thereon. No rating will apply to the Combination Notes at any time after the Rated Balance is reduced to zero. The
Combination Notes will initially be offered at 100% of their principal amount or at such other prices as may be negotiated at the time of sale.
___________________________________
THE COMBINATION NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THE ISSUER WILL NOT BE REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF
1940, AS AMENDED (THE "1940 ACT"). THE COMBINATION NOTES WILL BE OFFERED ONLY (I) IN THE UNITED STATES OR TO U.S. PERSONS OR U.S.
RESIDENTS IN RELIANCE ON THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS PROVIDED BY SECTION 4(2) OF THE SECURITIES ACT
TO A LIMITED NUMBER OF ACCREDITED INVESTORS (AS DEFINED IN RULE 501(A) OF REGULATION D UNDER THE SECURITIES ACT) WHO ARE
ALSO QUALIFIED PURCHASERS FOR PURPOSES OF SECTION 3(C)(7) OF THE 1940 ACT ("QUALIFIED PURCHASERS") AND (II) IN OFFSHORE
TRANSACTIONS TO PERSONS THAT ARE NEITHER U.S. PERSONS NOR U.S. RESIDENTS IN RELIANCE ON REGULATION S UNDER THE SECURITIES
ACT. THE COMBINATION NOTES ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH UNDER "TRANSFER RESTRICTIONS" IN THIS
SUPPLEMENT.
The Combination Notes are offered by the Issuer through Mizuho International plc (the "Combination Note Placement Agent") pursuant to the Placement
Agency Agreement on a reasonable best efforts basis to prospective purchasers. The Combination Notes will be initially offered at the price specified as the initial offering
price above or at such other prices as may be negotiated at the time of sale. The Issuer and the Combination Note Placement Agent reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected that delivery of the Combination Notes will be made on or about August 17, 2006 (the
"Combination Note Closing Date") against payment therefor in immediately available funds. The Combination Notes sold in offshore transactions to persons that are
neither U.S. persons (as defined in Regulation S) nor U.S. residents (within the meaning of the 1940 Act) in reliance on Regulation S under the Securities Act will be
represented by one or more permanent global notes (the "Regulation S Global Combination Notes"), in each case in definitive, fully registered form without coupons,
deposited with the Combination Note Trustee as custodian for, and registered in the name of a nominee of, DTC, for the respective accounts of the Euroclear System
("Euroclear") and Clearstream Banking, société anonyme ("Clearstream"). The Combination Notes sold in the United States or to U.S. persons or U.S. residents will only
be issued, offered and sold in definitive, fully registered form registered in the name of the beneficial owner thereof (each, a "Definitive Combination Note").
COMBINATION NOTES SUPPLEMENT
Mizuho International plc
The date of this Combination Notes Supplement is August 22, 2006
The Issuer accepts responsibility for the information contained in this document. To the best of the knowledge and belief of the Issuer, the information contained
in this document is in accordance with the facts and does not omit anything likely to materially affect the import of such information.
CNC/616201/1699581/v2
Notice To New Hampshire Residents Only
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN
APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF
THE NEW HAMPSHIRE REVISED STATUTES ("RSA 421-B") WITH THE STATE OF
NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY
REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE
CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE
THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT
MISLEADING.
NEITHER ANY SUCH FACT NOR THE FACT THAT AN
EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A
TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY
WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR
GIVEN APPROVAL TO, ANY PERSON, SECURITY, OR TRANSACTION. IT IS
UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE
PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT
WITH THE PROVISIONS OF THIS PARAGRAPH.
NOTICE TO FLORIDA RESIDENTS
THE COMBINATION NOTES ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION
UNDER SECTION 517.061 OF THE FLORIDA SECURITIES ACT AND HAVE NOT BEEN
REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. ALL FLORIDA RESIDENTS WHO
ARE NOT INSTITUTIONAL INVESTORS DESCRIBED IN SECTION 517.061(7) OF THE FLORIDA
SECURITIES ACT HAVE THE RIGHT TO VOID THEIR PURCHASE OF THE COMBINATION NOTES
WITHOUT PENALTY WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION.
NOTICE TO GEORGIA RESIDENTS
THE COMBINATION NOTES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON
PARAGRAPH (13) OF CODE SECTION 10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973, AND
MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER
SUCH ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT.
United Kingdom
THE COMBINATION NOTE PLACEMENT AGENT HAS AGREED THAT (I) IT HAS NOT
OFFERED OR SOLD AND, PRIOR TO EXPIRATION OF SIX MONTHS FROM THE CLOSING DATE, WILL
NOT OFFER OR SELL ANY COMBINATION NOTES TO PERSONS IN THE UNITED KINGDOM EXCEPT
TO PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING,
MANAGING OR DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF
THEIR BUSINESSES OR OTHERWISE IN CIRCUMSTANCES WHICH HAVE NOT RESULTED AND WILL
NOT RESULT IN AN OFFER TO THE PUBLIC IN THE UNITED KINGDOM WITHIN THE MEANING OF
THE PUBLIC OFFERS OF SECURITIES REGULATIONS 1995, AS AMENDED, (THE "REGULATIONS"), (II)
IT HAS COMPLIED AND WILL COMPLY WITH ALL APPLICABLE PROVISIONS OF THE FINANCIAL
SERVICES AND MARKET ACT 2000 (THE "FSMA") WITH RESPECT TO ANYTHING DONE BY IT IN
RELATION TO ANY COMBINATION NOTES IN, FROM OR OTHERWISE INVOLVING THE UNITED
KINGDOM AND (III) IT HAS ONLY COMMUNICATED OR CAUSE TO BE COMMUNICATED, AND WILL
ONLY COMMUNICATE OR CAUSE TO BE COMMUNICATED, ANY INVITATION OR INDUCEMENT TO
ENGAGE IN INVESTMENT ACTIVITY (WITHIN THE MEANING OF SECTION 21 OF THE FSMA)
ii
RECEIVED BY IT IN CONNECTION WITH THE ISSUE OR SALE OF ANY COMBINATION NOTES IN
CIRCUMSTANCES IN WHICH SECTION 21(1) OF THE FSMA DOES NOT APPLY TO THE ISSUER.
France
Neither this Combination Notes Supplement nor the attached Offering Memorandum has been registered
with the French Commission des Opérations de Bourse and the Combination Notes may not be offered or sold,
directly, or indirectly, to the public in the Republic of France nor may this Combination Notes Supplement, the
Offering Memorandum or any other offering material be distributed to the public in France. Such offers, sales and
distributions may only be made in France to (i) qualified investors (investisseurs qualifiés) and/or (ii) a restricted
group of investors (cercle restreint d’investisseurs) each acting for their own account, all as defined in Article 6 of
ordonnance n 67-833 dated 28 September 1967 (as amended) and décret n°98-880 dated October 1, 1998.
Where the issue of the Combination Notes is effected as an exception to the rules relating to an appel
public á l’épargne in France (public offer rules) by way of an offer to a restricted group of investors, such investors
must provide certification as to their personal, professional or family relationship with a member of the management
of the Issuer. Such certification is not required where the issue of the Combination Notes is effected as an exception
to such rules by way of an offer to qualified investors. Persons into whose possession offering material comes must
inform themselves about and observe any such restrictions. This Combination Notes Supplement, the attached
Offering Memorandum and any other material related to the Combination Notes may not be distributed or caused to
be distributed in the Republic of France other than to investors to whom offers and sales of the Combination Notes
in the Republic of France may be made as described above.
Federal Republic of Germany
The Combination Note Placement Agent has confirmed that it is aware of the fact that no German selling
prospectus (verkaufsprospekt) has been or will be published in respect of the Offering and that it will comply with
the Securities Selling Prospectus Act (the "Act") of the Federal Republic of Germany (WertpapierVerkaufsprospektgestz). In particular the Combination Note Placement Agent has undertaken not to engage in
public offerings (offentliche anbieten) or other selling activities in the Federal Republic of Germany with respect to
any Combination Notes issued under the Offering otherwise than in accordance with the Act and any other act
replacing or supplementing the Act and all other applicable laws and regulations.
Bermuda
UNDER BERMUDA LAW IT IS NOT NECESSARY TO PUBLISH OR FILE A PROSPECTUS IN
RESPECT OF THE OFFERING BY VIRTUE OF SECTION 26 (1A) OF THE COMPANIES ACT 1981 (THE
"COMPANIES ACT"). ACCORDINGLY, NEITHER THIS COMBINATION NOTES SUPPLEMENT NOR
THE ATTACHED OFFERING MEMORANDUM HAS BEEN FILED UNDER THE COMPANIES ACT.
NOTICE TO RESIDENTS OF AUSTRALIA
NO PROSPECTUS, DISCLOSURE DOCUMENT, OFFERING MATERIAL OR ADVERTISEMENT IN
RELATION TO THE COMBINATION NOTES HAS BEEN LODGED WITH THE AUSTRALIAN SECURITIES
AND INVESTMENTS COMMISSION OR THE AUSTRALIAN STOCK EXCHANGE LIMITED.
ACCORDINGLY, A PERSON MAY NOT (A) MAKE, OFFER OR INVITE APPLICATIONS FOR THE ISSUE,
SALE OR PURCHASE OF THE COMBINATION NOTES WITHIN, TO OR FROM AUSTRALIA (INCLUDING
AN OFFER OR INVITATION WHICH IS RECEIVED BY A PERSON IN AUSTRALIA) OR (B) DISTRIBUTE
OR PUBLISH THIS INFORMATION MEMORANDUM OR ANY OTHER PROSPECTUS, DISCLOSURE
DOCUMENT, OFFERING MATERIAL OR ADVERTISEMENT RELATING TO THE COMBINATION NOTES
IN AUSTRALIA, UNLESS (I) THE MINIMUM AGGREGATE CONSIDERATION PAYABLE BY EACH
OFFEREE IS THE U.S. DOLLAR EQUIVALENT OF AT LEAST $500,000 (DISREGARDING MONEYS LENT
BY THE OFFEROR OR ITS ASSOCIATES) OR THE OFFER OTHERWISE DOES NOT REQUIRE
DISCLOSURE TO INVESTORS IN ACCORDANCE WITH PART 6D.2 OF THE CORPORATIONS ACT 2001
(CWLTH) OF AUSTRALIA; AND (II) SUCH ACTION COMPLIES WITH ALL APPLICABLE LAWS AND
REGULATIONS.
iii
NOTICE TO RESIDENTS OF AUSTRIA
THIS COMBINATION NOTES SUPPLEMENT (INCLUDING THE ATTACHED OFFERING
MEMORANDUM) IS CIRCULATED IN AUSTRIA FOR THE SOLE PURPOSE OF PROVIDING
INFORMATION ABOUT THE COMBINATION NOTES TO A LIMITED NUMBER OF SOPHISTICATED
INVESTORS IN AUSTRIA. THIS COMBINATION NOTES SUPPLEMENT (INCLUDING THE ATTACHED
OFFERING MEMORANDUM) IS MADE AVAILABLE ON THE CONDITION THAT IT IS SOLELY FOR THE
USE OF THE RECIPIENT AS A SOPHISTICATED, POTENTIAL AND INDIVIDUALLY SELECTED
INVESTOR AND MAY NOT BE PASSED ON TO ANY OTHER PERSON OR REPRODUCED IN WHOLE OR
IN PART. THIS COMBINATION NOTES SUPPLEMENT (INCLUDING THE ATTACHED OFFERING
MEMORANDUM) DOES NOT CONSTITUTE A PUBLIC OFFERING (ÖFFENTLICHES ANGEBOT) IN
AUSTRIA AND MUST NOT BE USED IN CONJUNCTION WITH A PUBLIC OFFERING PURSUANT TO
THE CAPITAL MARKET ACT (KAPITALMARKTGESETZ) AND/OR THE INVESTMENT FUND ACT
(INVESTMENTFONDSGESETZ) IN AUSTRIA. CONSEQUENTLY, NO PUBLIC OFFERS OR PUBLIC
SALES MUST BE MADE IN AUSTRIA IN RESPECT OF THE COMBINATION NOTES. THE
COMBINATION NOTES ARE NOT REGISTERED IN AUSTRIA. IN CASE THE COMBINATION NOTES
ARE QUALIFIED AS SHARES IN A FOREIGN INVESTMENT FUND WITHIN THE MEANING OF THE
INVESTMENT FUND ACT, THEY MIGHT BE SUBJECT TO A LESS FAVORABLE TAX TREATMENT
THAN SHARES IN INVESTMENT FUNDS ESTABLISHED IN AUSTRIA UNDER THE INVESTMENT FUND
ACT. ALL PROSPECTIVE INVESTORS ARE URGED TO SEEK INDEPENDENT TAX ADVICE. THE
COMBINATION NOTE PLACEMENT AGENT AND ITS AFFILIATES DO NOT GIVE TAX ADVICE.
ANMERKUNG FÜR EINWOHNER VON ÖSTERREICH
DIESER PROSPEKT WIRD IN ÖSTERREICH NUR ZU DEM ZWECK HERAUSGEGEBEN, UM EINER
BESCHRÄNKTEN ANZAHL VON PROFESSIONELLEN MARKTTEILNEHMERN IN ÖSTERREICH
INFORMATIONEN ÜBER DIE ANGEBOTENEN WERTPAPIERE ZU GEBEN. DIESER PROSPEKT WIRD
UNTER DER BEDINGUNG ZUR VERFÜGUNG GESTELLT, DASS DIESER PROSPEKT
AUSSCHLIESSLICH VOM EMPFÄNGER ALS EINEM PROFESSIONELLEN POTENTIELLEN UND
EINZELN AUSGEWÄHLTEN ANLEGER VERWENDET WIRD UND ER DARF NICHT AN EINE ANDERE
PERSON WEITERGEGEBEN ODER TEILWEISE ODER VOLLSTÄNDIG REPRODUZIERT WERDEN.
DIESER PROSPEKT STELLT KEIN ÖFFENTLICHES ANGEBOT IN ÖSTERREICH DAR UND DARF NICHT
IN ZUSAMMENHANG MIT EINEM ÖFFENTLICHEN ANGEBOT IN ÖSTERREICH IM SINNE DES
KAPITALMARKTGESETZES UND/ODER DES INVESTMENTFONDSGESETZES VERWENDET WERDEN.
FOLGLICH DÜRFEN IN ÖSTERREICH KEINE ÖFFENTLICHEN ANGEBOTE ODER VERKÄUFE DER
ANGEBOTENEN WERTPAPIEREN DURCHGEFÜHRT WERDEN. DIE WERTPAPIERE SIND NICHT IN
ÖSTERREICH ZUGELASSEN. SOLLTEN DIE WERTPAPIERE ALS ANTEILE AN EINEM
AUSLÄNDISCHEN INVESTMENTFONDS QUALIFIZIERT WERDEN, KÖNNTEN SIE EINER
UNGÜNSTIGEREN BESTEUERUNG ALS ANTEILE AN IN ÖSTERREICH GEMÄSS DEM
INVESTMENTFONDSGESETZ ERRICHTETEN INVESTMENTFONDS UNTERLIEGEN. ALLE KÜNFTIGEN
ANLEGER WERDEN DAHER AUFGEFORDERT, UNABHÄNGIGE STEUERBERATUNG EINZUHOLEN.
DER ERSTKÄUFER UND DIE MIT IHM VERBUNDENEN UNTERNEHMEN ERTEILEN KEINE
STEUERLICHE BERATUNG.
NOTICE TO RESIDENTS OF BAHRAIN
EACH OF THE ISSUER, THE COLLATERAL MANAGER, AND THE COMBINATION NOTE
PLACEMENT AGENT REPRESENTS AND WARRANTS THAT IT HAS NOT MADE AND WILL NOT
MAKE ANY INVITATION TO THE PUBLIC IN THE STATE OF BAHRAIN TO SUBSCRIBE FOR THE
COMBINATION NOTES AND THAT THE DOCUMENT WILL NOT BE ISSUED, PASSED TO, OR MADE
AVAILABLE TO THE PUBLIC GENERALLY.
iv
NOTICE TO THE PUBLIC OF CAYMAN ISLANDS
NO INVITATION MAY BE MADE TO THE PUBLIC IN THE CAYMAN ISLANDS TO SUBSCRIBE
FOR COMBINATION NOTES OF THE ISSUER, AND THIS DOCUMENT MAY NOT BE ISSUED OR
PASSED TO ANY SUCH PERSON.
NOTICE TO RESIDENTS OF FINLAND
THIS DOCUMENT HAS BEEN PREPARED FOR PRIVATE INFORMATION PURPOSES OF
INTERESTED INVESTORS ONLY. IT MAY NOT BE USED FOR AND SHALL NOT BE DEEMED A
PUBLIC OFFERING OF THE COMBINATION NOTES. THE FINNISH FINANCIAL SUPERVISION
AUTHORITY (RAHOITUSTARKASTUS) HAS NOT APPROVED THIS DOCUMENT AND HAS NOT
AUTHORIZED ANY OFFERING OF THE SUBSCRIPTION OF THE COMBINATION NOTES;
ACCORDINGLY, THE COMBINATION NOTES MAY NOT BE OFFERED OR SOLD IN FINLAND OR TO
RESIDENTS THEREOF EXCEPT AS PERMITTED BY FINNISH LAW. THIS DOCUMENT IS STRICTLY
FOR PRIVATE USE BY ITS HOLDER AND MAY NOT BE PASSED ON TO THIRD PARTIES.
NOTICE TO RESIDENTS OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION
THE COMBINATION NOTES MAY NOT BE OFFERED OR SOLD IN HONG KONG, BY MEANS OF
ANY DOCUMENT OTHER THAN TO PERSONS WHOSE ORDINARY BUSINESS IT IS TO BUY OR SELL
SHARES OR DEBENTURES (WHETHER AS PRINCIPAL OR AGENT) OR IN CIRCUMSTANCES WHICH
DO NOT CONSTITUTE AN OFFER TO THE PUBLIC WITHIN THE MEANING OF THE COMPANIES
ORDINANCE (CAP 32). UNLESS PERMITTED TO DO SO UNDER THE SECURITIES LAWS OF HONG
KONG, YOU MAY NOT ISSUE OR HAVE IN YOUR POSSESSION FOR THE PURPOSES OF ISSUE, AND
WILL NOT ISSUE, OR HAVE IN YOUR POSSESSION FOR THE PURPOSES OF ISSUE, ANY
ADVERTISEMENT, INVITATION OR DOCUMENT RELATING TO THE COMBINATION NOTES OTHER
THAN WITH RESPECT TO COMBINATION NOTES INTENDED TO BE DISPOSED OF TO PERSONS
OUTSIDE OF HONG KONG OR TO BE DISPOSED OF IN HONG KONG ONLY TO PERSONS WHOSE
BUSINESS INVOLVES THE ACQUISITION, DISPOSAL OR HOLDING OF COMBINATION NOTES,
WHETHER AS PRINCIPAL OR AGENT OR IN CIRCUMSTANCES WHICH DO NOT CONSTITUTE AN
OFFER TO THE PUBLIC.
NOTICE TO RESIDENTS OF ISRAEL
THIS DOCUMENT WILL BE DISTRIBUTED TO ISRAELI RESIDENTS ONLY IN A MANNER
THAT WILL NOT CONSTITUTE AN "OFFER TO THE PUBLIC" IN ACCORDANCE WITH SECTIONS 15
AND 15A OF THE SECURITIES LAW 1968. SPECIFICALLY, THIS DOCUMENT MAY ONLY BE
DISTRIBUTED TO INVESTORS OF THE TYPES LISTED IN THE FIRST ADDENDUM OF THE
SECURITIES LAW 1968 AND IN ADDITION TO NOT MORE THAN 35 OTHER INVESTORS RESIDENT IN
ISRAEL DURING ANY GIVEN 12 MONTH PERIOD.
NOTICE TO RESIDENTS OF JAPAN
THE COMBINATION NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES AND EXCHANGE LAW OF JAPAN (THE "SEL"), AND THE COMBINATION NOTES MAY
NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO, OR FOR THE BENEFIT OF,
ANY RESIDENT OF JAPAN (INCLUDING JAPANESE CORPORATIONS) OR TO OTHERS FOR REOFFERING OR RESALE, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO ANY RESIDENT OF JAPAN,
EXCEPT THAT THE OFFER AND SALE OF THE COMBINATION NOTES IN JAPAN MAY BE MADE
ONLY THROUGH PRIVATE PLACEMENT SALE IN JAPAN IN ACCORDANCE WITH AN EXEMPTION
AVAILABLE UNDER THE SEL AND WITH ALL OTHER APPLICABLE LAWS AND REGULATIONS OF
JAPAN. IN THIS CLAUSE, "A RESIDENT/RESIDENTS OF JAPAN" SHALL HAVE THE MEANING AS
DEFINED UNDER THE FOREIGN EXCHANGE AND FOREIGN TRADE LAW OF JAPAN.
v
NOTICE TO RESIDENTS OF KOREA
THE ISSUER IS NOT MAKING ANY REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT
TO THE QUALIFICATION OF THE RECIPIENTS OF THESE MATERIALS FOR THE PURPOSE OF
INVESTING IN THE COMBINATION NOTES UNDER THE LAWS OF KOREA, INCLUDING AND
WITHOUT LIMITATION THE FOREIGN EXCHANGE MANAGEMENT LAW AND REGULATIONS
THEREUNDER. THE COMBINATION NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
AND EXCHANGE LAW OF KOREA AND NONE OF THE COMBINATION NOTES MAY BE OFFERED OR
SOLD OR DELIVERED, DIRECTLY OR INDIRECTLY, IN KOREA OR TO ANY RESIDENT OF KOREA
EXCEPT PURSUANT TO APPLICABLE LAWS AND REGULATIONS OF KOREA.
NOTICE TO RESIDENTS OF SINGAPORE
NEITHER THIS COMBINATION NOTES SUPPLEMENT NOR THE ATTACHED OFFERING
MEMORANDUM HAS BEEN REGISTERED AS A PROSPECTUS WITH THE MONETARY AUTHORITY OF
SINGAPORE. ACCORDINGLY, NONE OF THIS COMBINATION NOTES SUPPLEMENT, THE ATTACHED
OFFERING MEMORANDUM OR ANY OTHER DOCUMENT OR MATERIAL IN CONNECTION WITH THE
OFFER OR SALE, OR INVITATION FOR SUBSCRIPTION OR PURCHASE, OF THE COMBINATION
NOTES MAY BE CIRCULATED OR DISTRIBUTED, NOR MAY THE COMBINATION NOTES BE
OFFERED OR SOLD, OR BE MADE THE SUBJECT OF AN INVITATION FOR SUBSCRIPTION OR
PURCHASE, WHETHER DIRECTLY OR INDIRECTLY, TO PERSONS IN SINGAPORE OTHER THAN (I) TO
AN INSTITUTIONAL INVESTOR UNDER SECTION 274 OF THE SECURITIES AND FUTURES ACT,
CHAPTER 289 OF SINGAPORE (THE "SFA"), (II) TO A RELEVANT PERSON, OR ANY PERSON
PURSUANT TO SECTION 275(1A), AND IN ACCORDANCE WITH THE CONDITIONS, SPECIFIED IN
SECTION 275 OF THE SFA OR (III) OTHERWISE PURSUANT TO, AND IN ACCORDANCE WITH THE
CONDITIONS OF, ANY OTHER APPLICABLE PROVISION OF THE SFA.
WHERE THE COMBINATION NOTES ARE SUBSCRIBED OR PURCHASED UNDER SECTION 275 BY A
RELEVANT PERSON WHICH IS:
(A)
A CORPORATION (WHICH IS NOT AN ACCREDITED INVESTOR) THE SOLE BUSINESS
OF WHICH IS TO HOLD INVESTMENTS AND THE ENTIRE SHARE CAPITAL OF WHICH IS OWNED BY
ONE OR MORE INDIVIDUALS, EACH OF WHOM IS AN ACCREDITED INVESTOR; OR
(B)
A TRUST (WHERE THE TRUSTEE IS NOT AN ACCREDITED INVESTOR) WHOSE SOLE
PURPOSE IS TO HOLD INVESTMENTS AND EACH BENEFICIARY IS AN ACCREDITED INVESTOR,
SHARES, DEBENTURES AND UNITS OF SHARES AND DEBENTURES OF THAT CORPORATION OR
THE BENEFICIARIES’ RIGHTS AND INTEREST IN THAT TRUST SHALL NOT BE TRANSFERABLE FOR
6 MONTHS AFTER THAT CORPORATION OR THAT TRUST HAS ACQUIRED THE COMBINATION
NOTES UNDER SECTION 275 EXCEPT:
(1)
TO AN INSTITUTIONAL INVESTOR UNDER SECTION 274 OF THE SFA OR TO A
RELEVANT PERSON, OR ANY PERSON PURSUANT TO SECTION 275(1A), AND IN
ACCORDANCE WITH THE CONDITIONS, SPECIFIED IN SECTION 275 OF THE SFA;
(2)
WHERE NO CONSIDERATION IS GIVEN FOR THE TRANSFER; OR
(3)
BY OPERATION OF LAW.
NOTICE TO RESIDENTS OF SWITZERLAND
THIS DOCUMENT HAS BEEN PREPARED FOR PRIVATE INFORMATION PURPOSES OF
INTERESTED INVESTORS ONLY. IT MAY NOT BE USED FOR AND SHALL NOT BE DEEMED A
PUBLIC OFFERING OF THE COMBINATION NOTES. NO APPLICATION HAS BEEN MADE UNDER
SWISS LAW TO PUBLICLY MARKET THE COMBINATION NOTES IN OR OUT OF SWITZERLAND.
THEREFORE, NO PUBLIC OFFER OF THE COMBINATION NOTES OR PUBLIC DISTRIBUTION OF THIS
vi
DOCUMENT MAY BE MADE IN OR OUT OF SWITZERLAND. THIS DOCUMENT IS STRICTLY FOR
PRIVATE USE BY ITS HOLDER AND MAY NOT BE PASSED ON TO THIRD PARTIES.
NOTICE TO RESIDENTS OF TAIWAN
THE OFFER OF THE COMBINATION NOTES HAS NOT BEEN AND WILL NOT BE REGISTERED
WITH THE SECURITIES AND FUTURES COMMISSION OF THE REPUBLIC OF CHINA PURSUANT TO
RELEVANT SECURITIES LAWS AND REGULATIONS AND MAY NOT BE OFFERED OR SOLD WITHIN
THE REPUBLIC OF CHINA THROUGH A PUBLIC OFFERING OR IN ANY CIRCUMSTANCE WHICH
CONSTITUTES AN OFFER WITHIN THE MEANING OF THE SECURITIES AND EXCHANGE LAW OF
THE REPUBLIC OF CHINA THAT REQUIRES A REGISTRATION OR APPROVAL OF THE SECURITIES
AND FUTURES COMMISSION OF THE REPUBLIC OF CHINA.
NOTICE TO RESIDENTS OF DENMARK
THE ISSUER AND THE COMBINATION NOTE PLACEMENT AGENT HAVE AGREED THAT
THEY HAVE NOT OFFERED OR SOLD AND WILL NOT OFFER, SELL OR DELIVER ANY
COMBINATION NOTES IN THE KINGDOM OF DENMARK, DIRECTLY OR INDIRECTLY, BY WAY OF
PUBLIC OFFER, UNLESS SUCH OFFER, SALE OR DELIVERY IS, OR WAS, IN COMPLIANCE WITH THE
DANISH ACT No. 1072 OF DECEMBER 20, 1995 ON SECURITIES TRADING, CHAPTER 12 ON
PROSPECTUSES ON FIRST PUBLIC OFFER OF CERTAIN EXECUTIVE SECURITIES AND ANY
EXECUTIVE ORDERS ISSUED IN PURSUANCE THEREOF.
_______________________
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND
RISKS INVOLVED. THESE COMBINATION NOTES HAVE NOT BEEN RECOMMENDED BY ANY
FEDERAL OR STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR
DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
This Combination Notes Supplement is not intended to furnish legal, regulatory, tax, accounting,
investment or other advice to any prospective purchaser of the Combination Notes. This Combination Notes
Supplement should be reviewed by each prospective purchaser and its legal, regulatory, tax, accounting, investment
and other advisors.
INVESTORS WHOSE INVESTMENT AUTHORITY IS SUBJECT TO LEGAL RESTRICTIONS
SHOULD CONSULT THEIR OWN LEGAL ADVISORS TO DETERMINE WHETHER AND TO WHAT
EXTENT THE COMBINATION NOTES CONSTITUTE LEGAL INVESTMENTS FOR THEM.
The Issuer extends to each prospective investor the opportunity to ask questions of, and receive answers
from, the Issuer, the Collateral Manager and the Combination Note Placement Agent concerning the Combination
Notes and the terms and conditions of the offering and listing of the Combination Notes as described herein (the
"Offering") and to obtain any additional information it may consider necessary in making an informed investment
decision and any information in order to verify the accuracy of the information set forth herein, to the extent the
Issuer, the Collateral Manager or the Combination Note Placement Agent possess the same. Requests for such
additional information can be directed to Mizuho International plc, Bracken House, One Friday Street, London
EC4M 9JA, United Kingdom, Attention: Syndication/ABS, Debt Markets.
Notwithstanding anything to the contrary herein, except as necessary to comply with securities laws, each
prospective investor (and each of their respective employees, representatives or other agents) may disclose to any
and all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of the transactions
described herein and all materials of any kind (including opinions or other tax analyses) that are provided to them
relating to such U.S. tax treatment and U.S. tax structure. For this purpose, "tax structure" is limited to any facts
relevant to the U.S. federal income tax treatment of the Offering and does not include information relating to the
vii
identity of the Issuer. Any such disclosure of the tax treatment, tax structure and other tax-related materials shall not
be made for the purpose of offering to sell the Combination Notes offered hereby or soliciting an offer to purchase
any such Combination Notes.
INFORMATION AS TO DISTRIBUTION
This Combination Notes Supplement has been prepared by the Issuer solely for use in connection with the
Offering. The Issuer and the Combination Note Placement Agent reserve the right to reject any offer to purchase the
Combination Notes in whole or in part for any reason, or to sell less than the stated initial principal amount of the
Combination Notes offered hereby. This Combination Notes Supplement is personal to each offeree to whom it has
been delivered by the Issuer, the Combination Note Placement Agent or any affiliate of the foregoing and does not
constitute an offer to any other person or to the public generally to subscribe for or otherwise acquire any
Combination Notes. Distribution of this Combination Notes Supplement to any persons other than the offeree and
those persons, if any, retained to advise such offeree with respect thereto is unauthorized and any disclosure of any
of its contents, without the prior written consent of the Issuer or the Combination Note Placement Agent, is
prohibited. Each prospective purchaser, by accepting delivery of this Combination Notes Supplement, agrees to the
foregoing and to make no photocopies of this Combination Notes Supplement or any documents attached hereto and,
if the offeree does not purchase any Combination Notes or the Offering is terminated, to return this Combination
Notes Supplement and all documents attached hereto to: Mizuho International plc, Bracken House, One Friday
Street, London EC4M 9JA, United Kingdom, Attention: Syndication/ABS, Debt Markets.
AVAILABLE INFORMATION
To permit compliance with Rule 144A under the Securities Act (to the extent in connection with the sale of
the Combination Notes), the Issuer will be required under the Combination Note Indenture (as defined below) to
furnish upon request of a holder of any Combination Note to such holder and a prospective purchaser designated by
such holder the information required to be delivered under Rule 144A(d)(4) under the Securities Act if at the time of
the request the Issuer is not a reporting company under Section 13 or Section 15(d) of the United States Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or exempt from reporting pursuant to Rule 12g3-2(b)
under the Exchange Act. Any information so provided to a holder of Combination Notes will be made available by
the Issuer free of charge at the specified office of the Combination Note Trustee.
FORWARD LOOKING STATEMENTS
Any projections, forecasts and estimates contained herein are forward looking statements and are based
upon certain assumptions. Projections are necessarily speculative in nature, and it can be expected that some or all
of the assumptions underlying the projections will not materialize or will vary significantly from actual results.
Accordingly, the projections are only an estimate. Actual results may vary from the projections, and the variations
may be material.
Some important factors that could cause actual results to differ materially from those in any forward
looking statements include changes in interest rates, currency exchange rates, levels of defaults on the Collateral
Assets and levels of recoveries when defaults occur, market, financial or legal uncertainties, the timing of
acquisitions of the Collateral Assets, mismatches between the timing of accrual and receipt of Interest Proceeds from
the Collateral Assets and the effectiveness of any Interest Rate Hedge Agreements, among others. Consequently,
the inclusion of projections herein should not be regarded as a representation by the Issuer, the Collateral Manager,
the Combination Note Trustee, the Combination Note Placement Agent or any of their respective affiliates or any
other person or entity of the results that will actually be achieved by the Issuer.
None of the Issuer, the Combination Note Placement Agent, the Collateral Manager or their respective
affiliates has any obligation to update or otherwise revise any projections, including any revisions to reflect changes
in economic conditions or other circumstances arising after the date hereof or to reflect the occurrence of
unanticipated events, even if the underlying assumptions do not come to fruition.
viii
Certain persons participating in this Offering (including the Combination Note Placement Agent)
may engage in transactions that stabilize, maintain or otherwise affect the price of the Combination Notes.
Such transactions may include over-allotment and stabilizing and the purchase of Combination Notes to
cover short positions and, if commenced, may be discontinued at any time.
In this Combination Notes Supplement, references to "Dollars", "$", "U.S.$" and "U.S. Dollars" are to
United States dollars.
ix
TABLE OF CONTENTS
PAGE
SUMMARY OF TERMS ..............................................................................................................................................1
RISK FACTORS ...........................................................................................................................................................6
DESCRIPTION OF THE COMBINATION NOTES ...................................................................................................8
GENERAL ......................................................................................................................................................8
STATUS AND SECURITY............................................................................................................................8
PRINCIPAL AND INTEREST.......................................................................................................................8
PAYMENTS ON THE COMBINATION NOTES.........................................................................................9
SALE OF TREASURY STRIP .......................................................................................................................9
REDEMPTION OF THE COMBINATION NOTES ...................................................................................10
DISTRIBUTIONS "IN KIND" .....................................................................................................................11
ACTS OF HOLDERS OF COMBINATION NOTES ..................................................................................12
CANCELLATION ........................................................................................................................................12
EXCHANGE OF COMBINATION NOTES FOR UNDERLYING COMBINATION NOTE
ASSETS ..........................................................................................................................................12
LISTING .......................................................................................................................................................12
USE OF PROCEEDS....................................................................................................................................12
NOTICES......................................................................................................................................................12
FORM, DENOMINATION AND REGISTRATION OF THE COMBINATION NOTES .........................13
ENTITLEMENT TO PAYMENTS ..............................................................................................................14
THE COMBINATION NOTE INDENTURE ..............................................................................................14
RATING OF THE COMBINATION NOTES ............................................................................................................15
MATURITY AND PREPAYMENT CONSIDERATIONS........................................................................................16
CERTAIN INCOME TAX CONSIDERATIONS WITH RESPECT TO THE COMBINATION NOTES ...............16
CERTAIN ERISA AND RELATED CONSIDERATIONS WITH RESPECT TO THE COMBINATION
NOTES..........................................................................................................................................................17
TRANSFER RESTRICTIONS....................................................................................................................................17
DISQUALIFIED TRANSFEREES...............................................................................................................22
LEGAL MATTERS ....................................................................................................................................................23
LISTING AND GENERAL INFORMATION............................................................................................................23
INDEX OF DEFINED TERMS ..................................................................................................................................24
x
SUMMARY OF TERMS
The following summary does not purport to be complete and is qualified in its entirety by reference to the
additional information appearing elsewhere in this Combination Notes Supplement (this "Supplement") and the
related documents referred to herein and therein. The following summary is also qualified in its entirety by
reference to the additional information appearing in the Offering Memorandum relating to the Senior Notes and the
Subordinated Notes attached hereto as Exhibit A (the "Offering Memorandum"). Capitalized terms used but not
otherwise defined in this Supplement have the meanings assigned to those terms in the Offering Memorandum.
Combination Notes Offered:..........................
U.S.$2,000,000 Class II Combination Notes Due 2014 (the
"Combination Notes"). The Combination Notes will be issued
pursuant to an indenture, dated as of August 17, 2006 (the
"Combination Note Indenture"), between the Issuer and
JPMorgan Chase Bank, National Association, as trustee for the
benefit of the holders of the Combination Notes (in such capacity,
the "Combination Note Trustee"). It is expected that delivery of
the Combination Notes will be made on or about August 17, 2006
(the "Combination Note Closing Date") against payment therefor
in immediately available funds.
On July 27, 2006, the Issuer issued the (i) the U.S.$ 583,500,000
Class A Senior Secured Floating Rate Notes Due 2022 (the "Class
A Notes"), the U.S.$ 48,000,000 Class B Second Priority Deferrable
Floating Rate Notes Due 2022 (the "Class B Notes"), the U.S.$
23,250,000 Class C Third Priority Deferrable Floating Rate Notes
Due 2022 (the "Class C Notes") and the U.S.$ 33,750,000 Class D
Fourth Priority Deferrable Floating Rate Notes Due 2022 (the
"Class D Notes" and, together with the Class A Notes, the Class B
Notes and the Class C Notes, the "Senior Notes"), (ii) the U.S.$
61,500,000 Subordinated Notes Due 2022 (the "Subordinated
Notes") and (iii) the U.S. $5,000,000 Class I Combination Notes
Due 2015 (the "Class I Combination Notes"). The Senior Notes,
the Subordinated Notes and the Class I Combination Notes are not
being offered hereby (except, in the case of the Subordinated Notes,
indirectly through the Combination Notes, to the extent of the
Subordinated Notes comprising the Subordinated Note Collateral).
The Issuer has issued the Class I Combination Notes and, as
described more fully in the Offering Memorandum, may from time
to time issue additional classes of Combination Notes (as defined in
the Offering Memorandum). Neither the Class I Combination Notes
nor any such additional classes of Combination Notes (other than
the Class II Combination Notes Due 2014 described above) (i) are
being offered by the Offering Memorandum or by this Supplement,
(ii) constitute Combination Notes within the meaning of this
Supplement or (iii) will have recourse to the Combination Note
Account or the Combination Note Assets described herein. See
"Description of the Notes—Combination Notes" in the Offering
Memorandum.
1
Combination Note Assets ..............................
Status and Security for the Combination
Notes:.............................................................
On or prior to the Combination Note Closing Date, the Combination
Note Trustee will establish an account (the "Combination Note
Account"), to which the following assets have been or will be
credited:
(i)
a note issued by the U.S. Treasury (or cash to purchase
such note), CUSIP 912833DF4, on which no interest
payments will be made and a single scheduled principal
payment of $2,000,000 will be due at maturity on February
15, 2014 (the "Treasury Strip"); and
(ii)
Subordinated Notes (or cash to purchase such Subordinated
Notes) with an aggregate initial principal balance of U.S.
$606,200 (the "Subordinated Note Collateral" and,
together with the Treasury Strip, the "Combination Note
Assets ).
The Combination Notes are limited recourse obligations of the
Issuer. The Combination Notes will be secured solely by the
Combination Note Account, including the Combination Note Assets
from time to time credited thereto or on deposit therein. Holders of
the Combination Notes will not have recourse to any other assets of
the Issuer for payment on their Combination Notes, including,
without limitation, the Assets (as defined in the Offering
Memorandum) or the Deposited Property or Combination Note
Accounts (each, as defined in the Offering Memorandum) relating
to the Class I Combination Notes or any other Combination Notes
(as defined in the Offering Memorandum) that are subsequently
issued (other than the Class II Combination Notes Due 2014 being
offered hereby). Holders of the Combination Notes will be entitled
to payments only to the extent of Available Funds (as defined
below).
The Subordinated Notes (including the Subordinated Note
Collateral) are unsecured, subordinated obligations of the
Issuer. See "Description of the Notes—Status and Security" and
"—Priority of Payments" in the Offering Memorandum.
Principal and Interest: ...................................
The Combination Notes will not bear interest at a stated rate, but
instead will pay interest in the amount of Available Funds applied
for such purpose in the manner described below.
Available Funds will be applied on each Combination Note
Payment Date (1) first, to pay principal of the Combination Notes
until the principal balance of each Combination Note has been
reduced to U.S. $1.00 and (2) second, as to any remaining Available
Funds, to pay interest to the holders of the Combination Notes. The
total amount paid or payable to the holders of Combination Notes
on any Combination Note Payment Date will not exceed the
Available Funds. The amount of principal and interest due on the
Combination Notes with respect to any Combination Note Payment
Date will be limited to the Available Funds that are applied to pay
such amounts in accordance with the preceding sentence.
2
Each holder of Combination Notes will be entitled to receive its
Ratable Share of principal, interest and any other amounts paid on
the Combination Notes on each Combination Note Payment Date.
"Ratable Share" means, with respect to any holder of Combination
Notes and any amount, such holder's pro rata share of such amount,
based on the initial principal balance of such holder's Combination
Note (as of the Combination Note Closing Date) as a percentage of
the total aggregate principal balance of Combination Notes issued
on the Combination Note Closing Date.
Payments on the Combination Notes:............
On each Combination Note Payment Date, the holders of the
Combination Notes will be entitled to receive an aggregate payment
(allocated to principal and interest in the manner described herein)
equal to the sum of the following amounts (with respect to any
Combination Note Payment Date, the "Available Funds"):
(i)
the Subordinated Note Collateral Distribution Amount; and
(ii)
all proceeds of the sale of the Treasury Strip (in whole or
in part) with respect to such Combination Note Payment
Date in the manner described under "Description of the
Combination Notes—Sale of Treasury Strip".
A "Combination Note Payment Date" will be (i) the date that is
three Business Days following each Subordinated Note Payment
Date and (ii) the Combination Note Stated Maturity.
A "Subordinated Note Payment Date" means a Payment Date (as
defined in the Offering Memorandum). As more fully described in
the Offering Memorandum, the Issuer will make payments on the
Subordinated Notes on each Subordinated Note Payment Date,
subject to the availability of funds for such purpose after payment of
amounts due on the Senior Notes and certain other expenses of the
Issuer. See "Description of the Notes—Priority of Payments" in
the Offering Memorandum.
"Subordinated Note Collateral Distribution Amount" means,
with respect to any Combination Note Payment Date, the amount of
all payments and distributions (if any) made on the Subordinated
Note Collateral on the related Subordinated Note Payment Date
(including amounts paid in respect of interest, principal and the
Subordinated Notes Redemption Price, in each case as described in
the Offering Memorandum).
Combination Note Stated Maturity: ..............
The stated maturity of the Combination Notes is the Business Day
following the Subordinated Note Payment Date occurring in
February, 2014 (the "Combination Note Stated Maturity"). If the
Subordinated Notes comprising the Subordinated Note Collateral
remain outstanding at the Combination Note Stated Maturity, each
holder of Combination Notes will receive its Ratable Share of such
Subordinated Notes. See "Description of the Combination Notes—
Redemption of the Combination Notes."
3
Voting Rights: ...............................................
Each holder of Combination Notes will be entitled to direct the
Combination Note Trustee with respect to voting or the taking of
other actions with respect to the Subordinated Notes comprising the
Subordinated Note Collateral. "See Description of the Combination
Notes—Acts of Holders of Combination Notes."
The Offering: .................................................
The Combination Notes are being offered (i) in the United States or
to U.S. persons or U.S. residents in reliance on the exemption from
registration in Section 4(2) of the Securities Act, to persons that are
both (A) accredited investors as defined under Rule 501(a) of
Regulation D under the Securities Act (each, an "Accredited
Investor") and (B) qualified purchasers for purposes of Section
3(c)(7) of the 1940 Act (each, a "Qualified Purchaser") and (ii) in
offshore transactions to persons that are neither U.S. persons nor
U.S. residents in reliance on Regulation S under the Securities Act.
The Combination Notes may be resold only in compliance with the
transfer restrictions described in this Supplement. See "Transfer
Restrictions".
Rating: ...........................................................
It is a condition of the issuance of the Combination Notes that the
Combination Notes be issued with a rating of "Aaa" by Moody’s.
The rating of the Combination Notes address only the ultimate
receipt of the Rated Balance (adjusted from time to time as
described herein). The rating of the Combination Notes does not
address any other distributions or payments thereon. No rating will
apply to the Combination Notes at any time after the Rated Balance
is reduced to zero.
Minimum Denominations:.............................
The Combination Notes will be issued and sold in minimum
denominations of U.S.$250,000 and integral multiples of U.S.$1 in
excess thereof.
Form, Registration and Transfer of
the Combination Notes: .................................
The Combination Notes sold in offshore transactions to non-U.S.
persons in reliance on Regulation S under the Securities Act will be
represented by one or more permanent global notes (the
"Regulation S Global Combination Notes") in definitive, fully
registered form without interest coupons, deposited with the
Combination Note Trustee as custodian for, and registered in the
name of, a nominee of The Depository Trust Company ("DTC") for
the respective accounts of Euroclear Bank, S.A./N.V., as operator of
the Euroclear System ("Euroclear"), and Clearstream Banking,
société anonyme ("Clearstream").
Beneficial interests in a
Regulation S Global Combination Note may be held only through
Euroclear or Clearstream. Beneficial interests in a Regulation S
Global Combination Note may not be held by a "U.S. person" (as
defined in Regulation S under the Securities Act) at any time.
The Combination Notes sold in the United States or to U.S. persons
or U.S. residents will only be issued, offered and sold in definitive,
fully registered form registered in the name of the beneficial owner
thereof (each, a "Definitive Combination Note").
4
Transfers of the Combination Notes are subject to certain
restrictions. See "Description of the Combination Notes—Form,
Denomination and Registration of the Combination Notes" and
"Transfer Restrictions" in this Supplement.
Governing Law:.............................................
The Combination Notes and the Combination Note Indenture will
be governed by, and construed in accordance with, the laws of the
State of New York.
Submission to Jurisdiction:............................
Each of the parties to the Combination Note Indenture will
irrevocably submit to the non-exclusive jurisdiction of any New
York State or federal court sitting in the Borough of Manhattan in
The City of New York in any action or proceeding arising out of or
relating to the Combination Notes or the Combination Note
Indenture.
Listing and Trading: ......................................
Application will be made to the Irish Stock Exchange for the
Combination Notes to be admitted to the Official List and to trading
on its regulated market but there can be no assurance that such
admission will be granted. No application will be made to list the
Combination Notes on any other stock exchange.
Listing Agent and Paying Agent in Ireland: ..
Maples Finance Dublin will serve as Paying Agent in Ireland (in
such capacity, the "Irish Paying Agent" or a "Paying Agent") and
Maples and Calder Listing Services Limited will serve as a listing
agent in Ireland (the "Irish Listing Agent").
Tax Status: .....................................................
See "Certain Income Tax Considerations with Respect to the
Combination Notes" in this Supplement.
ERISA Considerations:..................................
See "Certain ERISA and Related Considerations With Respect to
the Combination Notes" in this Supplement.
5
RISK FACTORS
This Supplement does not provide detailed information with respect to the Subordinated Notes or the Issuer,
any risk factors relating thereto, or any rights or obligations, legal, financial or otherwise, arising under or related to
the Subordinated Notes. Because an investment in the Combination Notes is equivalent (in part) to an investment in
the Subordinated Notes, prospective investors in the Combination Notes should carefully consider the matters set
forth under "Risk Factors" and elsewhere in the Offering Memorandum, all of which will be fully applicable to an
investment in Combination Notes. In addition, prospective investors in the Combination Notes should consider the
following factors in connection with a purchase of the Combination Notes. Capitalized terms used but not otherwise
defined in this Supplement have the meanings assigned to those terms in the Offering Memorandum attached hereto
as Exhibit A.
General. An investment in the Combination Notes involves certain risks. In addition to the risks particular
to Combination Notes described in the following paragraphs, the risk of ownership of the Combination Notes will be
equivalent to (a) with respect to the Treasury Strip, the risks of ownership of the Treasury Strip and (b) with respect
to the Subordinated Note Collateral, the risks of ownership of the Subordinated Notes. As a result, all of the risks of
the Subordinated Notes (or of the risks that are generally applicable to the Senior Notes and the Subordinated Notes)
described under "Risk Factors" in the Offering Memorandum also will be applicable to an investment in the
Combination Notes.
Non-transferability. None of the Combination Note Assets are separately transferable by any holder of
Combination Notes, unless such holder exchanges its Combination Notes for a ratable share of the Combination
Note Assets. See "Description of the Combination Notes—Exchange of Combination Notes for Underlying
Combination Note Assets."
Limited Liquidity and Restrictions on Transfer. There is currently no market for the Combination Notes.
Although Mizuho may make a market in the Combination Notes, they are under no obligation to do so and,
following the commencement of any market-making, may discontinue the same at any time. There can be no
assurance that a secondary market for any of the Combination Notes will develop, or if a secondary market does
develop, that it will provide the holders of the Combination Notes with liquidity of investment or that it will
continue for the life of the Combination Notes. Consequently, an investor in the Combination Notes must be
prepared to hold such Combination Notes until the Combination Note Stated Maturity. In addition, the Combination
Notes are subject to certain transfer restrictions and can only be transferred to certain transferees as described herein
under "Transfer Restrictions". Such restrictions on the transfer of the Combination Notes may further limit the
liquidity of the Combination Notes. See "Transfer Restrictions". Following an exchange of any Combination Note
for the underlying Combination Note Assets in the manner described under "Description of the Combination
Notes—Exchange of Combination Notes for Underlying Combination Note Assets," certain restrictions will apply to
the transfer of the Subordinated Notes received in such exchange. See "Transfer Restrictions" in the Offering
Memorandum.
The Combination Notes are Limited Recourse Obligations. The Combination Notes are limited recourse
obligations of the Issuer. The Combination Notes will be secured solely by the Combination Note Account,
including the Combination Note Assets from time to time credited thereto or on deposit therein. Holders of the
Combination Notes will not have recourse to any other assets of the Issuer for payment on their Combination Notes,
including, without limitation, the Assets, the Deposited Property or Combination Note Accounts (each as defined in
the Offering Memorandum), relating to the Class I Combination Notes or any other Combination Notes (as defined
in the Offering Memorandum) that are subsequently issued (other than the Combination Notes offered under this
Supplement). The Subordinated Notes (including the Subordinated Note Collateral) are unsecured,
subordinated obligations of the Issuer. See "Risk Factors—Subordination," "—The Subordinated Notes are not
Secured Obligations; Investors Must Rely on Available Collections from the Assets and Will Have No Other Source
for Payment" and "—The Senior Notes Notes are Limited Recourse Obligations and the Subordinated Notes are
Nonrecourse Obligations" in each case in the Offering Memorandum. None of the holders of the Senior Notes,
Subordinated Notes or Combination Notes, the Combination Note Trustee, the Collateral Manager, the Combination
Note Placement Agent, the Collateral Administrator or any of their respective affiliates or the Issuer's affiliates or
6
any other person or entity will be obligated to make payments on the Combination Notes. Consequently, holders of
Combination Notes must rely solely on payments on the Combination Note Assets for payments on their
Combination Notes. If distributions on the Combination Note Assets are insufficient to make payments on such
Combination Notes, no other assets will be available for payment of the deficiency, and following realization of the
Combination Note Assets pledged to secure the Combination Notes, the obligations of the Issuer to pay such
deficiency will be extinguished and will not thereafter revive.
Average Life, Prepayment and Yield Considerations. The stated maturity of the Combination Notes is the
Business Day following the Subordinated Note Payment Date occurring in February, 2014 (the "Combination Note
Stated Maturity"). However, the average life of the Combination Notes is expected to be shorter than the number
of years until the Combination Note Stated Maturity. See "Maturity and Prepayment Considerations".
The average life of the Combination Notes will be affected by the timing and amount of payments made on
the Subordinated Note Collateral. The Subordinated Notes comprising the Subordinated Note Collateral are, in turn,
affected by the various factors described (as applicable to the Subordinated Notes) under "Risk Factors—Average
Life, Prepayment and Yield Considerations" in the Offering Memorandum. The average life of the Combination
Notes also will be affected by the timing of the sales of portions of the Treasury Strip, as described under
"Description of the Combination Notes—Sale of Treasury Strip."
Tax Law Considerations. An investor in the Combination Notes will be subject to the same tax-related
risks to which a direct investor in the underlying Combination Note Assets would be subject. See "Risk Factors—
The Issuer—Tax Law Considerations" and "Certain Income Tax Considerations" in the Offering Memorandum and
"Certain Income Tax Considerations with Respect to the Combination Notes" in this Supplement.
Certain Conflicts of Interest. The Combination Note Placement Agent or its affiliates (or one or more
accounts or conduits managed by the Combination Note Placement Agent or its affiliates) may hold Combination
Notes from time to time. Combination Notes held by the Collateral Manager or any of its affiliates will have no
voting rights with respect to any vote on the removal of the Collateral Manager and will be deemed not to be
outstanding in connection with any such vote; provided, however, that Combination Notes held by the Collateral
Manager or any of its affiliates will have voting rights with respect to certain other matters as to which the holders of
the Combination Notes are entitled to vote, including, without limitation, any vote to direct an optional redemption.
See "Risk Factors—The Issuer—Certain Conflicts of Interest," "The Collateral Management Agreement" and
"Description of the Notes—Optional Redemption" in the Offering Memorandum.
Collateral Accumulation. The initial holders of the Combination Notes, by acquisition of their
Combination Notes, will be deemed to have consented to the acquisition of Collateral Assets by the Issuer and to the
procedures for determining the purchase price paid by the Issuer with respect thereto, in each case as described
under "Risk Factors—The Issuer—Collateral Accumulation" in the Offering Memorandum, in respect of Collateral
Assets acquired by the Issuer through the date of this Supplement. Upon request of any initial holder (or prospective
initial holder) of Combination Notes, the Collateral Manager will supply a list of Collateral Assets transferred to the
Issuer under the arrangements described in the aforementioned section of the Offering Memorandum and the prices
paid therefor by the Issuer.
Listing of the Notes. Application will be made for the Combination Notes to be admitted to the official list
of the Irish Stock Exchange. No assurance can be given, however, that such application for listing will be accepted.
Rating Agency Confirmation and Ratings Condition. Rating Agency Confirmation and satisfaction of the
Ratings Condition, wherever described in the Offering Memorandum, will not apply to the rating assigned to the
Combination Notes. Accordingly, amendment may be made to, and other actions may be taken under, the Indenture
under which the Subordinated Notes were issued, without regard to the effect that such amendment or other action
would have on the rating assigned to the Combination Notes.
No Direct Rights Under Indenture. The holders of the Combination Notes will have no direct rights under
the Indenture under which the Subordinated Notes are issued, and will be required to rely on the Combination Note
7
Trustee with respect to any requests, demands, authorizations, directions, notices, consents, waivers or other actions
thereunder. See "Description of the Combination Notes—Acts of Holders of Combination Notes."
ERISA Considerations. Each holder of Combination Notes will be subject to the same risks, and the same
restrictions on ownership, as though such holder were the holder of its ratable share of Subordinated Notes in an
amount equal to the Subordinated Note Collateral. Accordingly, prospective investors in the Combination Notes
should review "Certain ERISA and Related Considerations" in the Offering Memorandum, which is equally
applicable to an investment in the Combination Notes.
DESCRIPTION OF THE COMBINATION NOTES
General
The Issuer will issue U.S.$2,000,000 Class II Combination Notes Due 2014. The Combination Notes will
be issued by the Issuer pursuant to the Combination Note Indenture. The Combination Notes will be payable solely
from, and are secured solely by, the Combination Note Account, to which the following assets have been or will be
credited: (i) a note issued by the U.S. Treasury (or cash to purchase such note), CUSIP 912833DF4, on which no
interest payments will be made and a single scheduled principal payment of U.S.$2,000,000 will be due at maturity
on February 15, 2014 (the "Treasury Strip") and (ii) Subordinated Notes (or cash to purchase such Subordinated
Notes) with an aggregate initial principal balance of U.S.$606,200 (the "Subordinated Note Collateral" and,
together with the Treasury Strip, the "Combination Note Assets"). The aggregate principal amount of
Subordinated Notes included in the Subordinated Note Collateral is included in, and is not in addition to, the
aggregate principal amount of Subordinated Notes issued by the Issuer as described in the Offering Memorandum.
The Subordinated Notes included in the Subordinated Note Collateral (if issued in the form of Definitive
Combination Notes) will be registered in the name of the Combination Note Trustee or its nominee.
Status and Security
The Combination Notes are limited recourse obligations of the Issuer. The Combination Notes will be
secured solely by the Combination Note Account, including the Combination Note Assets from time to time credited
thereto or on deposit therein. Holders of the Combination Notes will not have recourse to any other assets of the
Issuer for payment on their Combination Notes, including, without limitation, the Assets, the Deposited Property or
Combination Note Accounts (each as defined in the Offering Memorandum), relating to the Class I Combination
Notes or any other Combination Notes (as defined in the Offering Memorandum) that are subsequently issued (other
than the Combination Notes offered under this Supplement). Holders of the Combination Notes will be entitled to
payments only to the extent of Available Funds (as defined below). The Subordinated Notes (including the
Subordinated Note Collateral) are unsecured, subordinated obligations of the Issuer. See "Description of the
Notes—Status and Security" and "—Priority of Payments" in the Offering Memorandum.
Principal and Interest
The Combination Notes will not bear interest at a stated rate, but instead will pay interest in the amount of
Available Funds applied for such purpose in the manner described below.
Available Funds will be applied on each Combination Note Payment Date (1) first, to pay principal of the
Combination Notes until the principal balance of each Combination Note has been reduced to U.S. $1.00 and (2)
second, as to any remaining Available Funds, to pay interest to the holders of the Combination Notes. The total
amount paid or payable to the holders of Combination Notes on any Combination Note Payment Date will not
exceed the Available Funds. The amount of principal and interest due on the Combination Notes with respect to any
Combination Note Payment Date will be limited to the Available Funds that are applied to pay such amounts in
accordance with the preceding sentence.
Each holder of Combination Notes will be entitled to receive its Ratable Share of principal, interest and any
other amounts paid on the Combination Notes on each Combination Note Payment Date.
8
"Ratable Share" means, with respect to any holder of Combination Notes and any amount, such holder's
pro rata share of such amount, based on the initial principal balance of such holder's Combination Note (as of the
Combination Note Closing Date) as a percentage of the total aggregate principal balance of Combination Notes
issued on the Combination Note Closing Date.
Payments on the Combination Notes
On each Combination Note Payment Date, the holders of the Combination Notes will be entitled to receive
an aggregate payment (allocated to principal and interest in the manner described herein) equal to the sum of the
following amounts (with respect to any Combination Note Payment Date, the "Available Funds"):
(i)
the Subordinated Note Collateral Distribution Amount; and
(ii)
all proceeds of the sale of the Treasury Strip (in whole or in part) with respect to such
Combination Note Payment Date in the manner described under "—Sale of Treasury Strip" below.
A "Combination Note Payment Date" will be (i) the date that is three Business Days following each
Payment Date (as defined in the Offering Memorandum) and (ii) the Combination Note Stated Maturity.
A "Subordinated Note Payment Date" means a Payment Date (as defined in the Offering Memorandum).
As more fully described in the Offering Memorandum, the Issuer will make payments on the Subordinated Notes on
each Subordinated Note Payment Date, subject to the availability of funds for such purpose after payment of
amounts due on the Senior Notes and certain other expenses of the Issuer. See "Description of the Notes—Priority
of Payments" in the Offering Memorandum.
"Subordinated Note Collateral Distribution Amount" means, with respect to any Combination Note
Payment Date, the amount of all payments and distributions (if any) made on the Subordinated Note Collateral on
the related Subordinated Note Payment Date (including amounts paid in respect of interest, principal and the
Subordinated Notes Redemption Price, in each case as described in the Offering Memorandum).
"Business Day" means any day other than Saturday, Sunday or a day on which banking institutions are
authorized or obligated by law, regulation or executive order to close in New York City or the city of the principal
Corporate Trust Office of the Combination Note Trustee or, in the case of the final payment of principal of a
Combination Note, the place of presentation of such Combination Note. To the extent action is required of the Irish
Paying Agent or the Irish Listing Agent, Dublin, Ireland will be considered in determining "Business Day" for
purposes of determining when such Paying Agent action is required.
Sale of Treasury Strip
Sale of Treasury Strip in Connection With Each Combination Note Payment Date. With respect to each
Combination Note Payment Date, the Combination Note Trustee shall conduct a sale, for settlement, on the Business
Day prior to such Combination Note Payment Date, of a percentage of the Treasury Strip (such percentage with
respect to such Combination Note Payment Date, the "Treasury Strip Liquidation Percentage") equal to (x) the
Treasury Strip Principal Amortization Amount (if any) with respect to such Combination Note Payment Date
divided by (y) the aggregate stated principal amount of the Treasury Strip (or such lesser percentage as will satisfy
the integral multiple requirement for transfers of the Treasury Strip). In the event that a sale of the Treasury Strip
Liquidation Percentage of the Treasury Strip would not satisfy the minimum denomination requirement for transfers
of the Treasury Strip, or the Treasury Strip Liquidation Percentage is equal to zero, the Combination Note Trustee
shall not sell any portion of the Treasury Strip on such Business Day (or, to the extent practicable, shall reduce the
portion sold to the extent necessary and sufficient to comply with such minimum denomination requirement). The
Combination Note Trustee shall pay the proceeds of such Treasury Strip to the holders of the Combination Notes as
a part of Available Funds on the related Combination Note Payment Date.
9
For purposes of any sale of the Treasury Strip contemplated hereunder, the Combination Note Trustee shall
solicit bids from three bidders which shall be the Designated Pricing Agents (provided, that if one or more of the
Designated Pricing Agents are not willing or available to bid on the Treasury Strip, the Collateral Manager shall
select one or more substitute bidders until the Combination Note Trustee has received three bids for the Treasury
Strip), and shall sell the Treasury Strip, or the applicable percentage thereof, to the bidder making the highest bid.
The Combination Note Trustee shall have no liability for any sale of the Treasury Strip conducted in accordance
with the foregoing procedures and any such sale shall be conclusive and binding upon the holders of the
Combination Notes and their successors and assigns.
"Treasury Strip Market Value" means, with respect to any Combination Note Payment Date, the market
price for the Treasury Strip, as determined by the Combination Note Trustee on the third Business Day immediately
preceding such Combination Note Payment Date based on the highest of three quotations obtained from three
bidders, which shall be the Designated Pricing Agents (provided, that if one or more of the foregoing are not willing
or available to bid on the Treasury Strip, the Combination Note Trustee shall select one or more substitute bidders
until the Combination Note Trustee has received three bids), on the Treasury Strip and expressed as a percentage of
the amount payable at maturity on the Treasury Strip.
"Treasury Strip Principal Amortization Amount" means, with respect to any Combination Note
Payment Date, an amount equal to (1) (x) the Subordinated Note Distribution Amount in respect of such
Combination Note Payment Date divided by (y) one minus the Treasury Strip Market Value with respect to such
Combination Note Payment Date plus (2) the Treasury Strip Principal Amortization Shortfall (if any) from the
immediately preceding Combination Note Payment Date.
"Designated Pricing Agents" means Banc of America Securities LLC, Mizuho Securities USA Inc. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Amortization Shortfalls Carry Over to Subsequent Combination Note Payment Dates. In the event that
the percentage of the Treasury Strip sold by the Combination Note Trustee as described above in connection with
any Combination Note Payment Date is less than the Treasury Strip Liquidation Percentage for such Combination
Note Payment Date, the difference expressed in Dollars (with respect to such Combination Note Payment Date, the
"Treasury Strip Principal Amortization Shortfall") will be included in the Treasury Strip Principal Amortization
Amount with respect to the next succeeding Combination Note Payment Date. No interest shall accrue on any
Treasury Strip Principal Amortization Shortfall.
Election to Retain Treasury Strip. Notwithstanding the foregoing, any holder of a Combination Note, by
10 a.m. New York time on the fourth Business Day prior to any Combination Note Payment Date, may instruct the
Combination Note Trustee in writing (provided that receipt of such instruction must be confirmed telephonically by
such holder) not to include any of its pro rata share of the Subordinated Note Collateral Distribution Amounts on
such Combination Note Payment Date or its pro rata share of any Treasury Strip Principal Amortization Shortfall in
the calculation of the Treasury Strip Principal Amortization Amount and to retain (for its sole benefit) the portion of
the Treasury Strip that would otherwise have been sold on such Combination Note Payment Date as provided above
if its pro rata share of such distributions had been included in such calculations. The pro rata share of such
distributions will be added to the following period's pro rata share of such distributions in the calculation of the
Treasury Strip Principal Amortization Amount.
Redemption of the Combination Notes
The Combination Notes will be fully redeemed on the earliest of:
(i)
as to the Combination Notes held by any holder, the date on which such holder makes an election:
(A)
after the Treasury Strip has been fully liquidated in the manner described under "—Sale
of Treasury Strip," above; or
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(B)
as described in "—Exchange of Combination Notes for Underlying Combination Note
Assets";
(ii)
the Combination Note Payment Date following the Redemption Date (as defined in the Offering
Memorandum) or other date on which the Subordinated Notes have been redeemed in whole; and
(iii)
the Combination Note Stated Maturity.
In connection with any redemption of all or a portion of the Combination Notes, each holder of
Combination Notes being redeemed will receive such holder's Ratable Share of all remaining Combination Note
Assets and proceeds thereof on deposit in the Combination Note Account. Such distribution, with respect to any
holder, will be subject to delivery by such holder of such duly completed documentation as is necessary to effect a
transfer of the Combination Note Assets. Transfer of a holder's Ratable Share of Subordinated Notes will be subject
to the limitations described under "—Transfer Restrictions" in the Offering Memorandum, to the extent applicable
to the Subordinated Notes.
In the case of a redemption of the type described in clause (ii), above, each holder of Combination Notes
will be entitled to receive its Ratable Share of any proceeds of the early redemption of the Subordinated Note
Collateral on the Combination Note Payment Date immediately following the applicable Redemption Date with
respect to the Subordinated Notes. For a description of the circumstances under which the Subordinated Notes (and,
thus, the Subordinated Note Collateral) may be subject to early redemption, see "Description of the Notes—Optional
Redemption" and "—Special Redemption" in the Offering Memorandum.
In the event that the Treasury Strip is fully liquidated pursuant to the procedures described under "—Sale of
Treasury Strip" above in connection with any Combination Note Payment Date, the Combination Note Trustee will
notify each holder of Combination Notes of such and, at the request of any holder, will cause such holder's
Combination Notes to be redeemed.
Distributions "in kind" of the Subordinated Note Collateral and the Treasury Strip in connection with a
redemption of the Combination Notes or otherwise will be subject to the limitations described under "—
Distributions 'In Kind'" below.
Distributions "In Kind"
Distribution of the Treasury Strip. If (x) the Combination Note Trustee is notified or is advised by any
holder of a Combination Note that such holder is not permitted under applicable law or otherwise to receive, or
would otherwise be materially and adversely affected if it were to receive, the relevant portion of the Treasury Strip
"in kind" and such holder has not appointed a nominee permitted to hold the relevant portion of the Treasury Strip
on such holder's behalf or its nominee, (y) one or more holders of Combination Notes otherwise fails to satisfy the
conditions to an "in kind" distribution of the remaining portion of the Treasury Strip or (z) the Treasury Strip cannot
(due to the minimum denomination and integral multiple requirements applicable to transfers of the Treasury Strip)
be distributed to one or more relevant holders of Combination Notes "in kind", the Combination Note Trustee shall
sell the related portion of the Treasury Strip and distribute the proceeds thereof ratably to the holder or holders that
would have otherwise been entitled to an "in kind" distribution of such portion of the Treasury Strip.
Distribution of the Subordinated Note Collateral. If, in connection with a redemption of the Subordinated
Notes or otherwise in connection with a distribution "in kind" of the Subordinated Note Collateral, (x) the
Combination Note Trustee is notified or is advised by any holder of a Combination Note that such holder is not
permitted under applicable law or otherwise to receive, or would otherwise be materially and adversely affected if it
were to receive, the relevant portion of the Subordinated Note Collateral "in kind" and such holder has not appointed
a nominee permitted to hold the relevant portion of the Subordinated Note Collateral on such holder's behalf or its
nominee, (y) one or more holders of Combination Notes otherwise fails to satisfy the conditions to an "in kind"
distribution of the remaining portion of the Subordinated Note Collateral or (z) the Subordinated Note Collateral
cannot (due to the minimum denomination and integral multiple requirements applicable to transfers of the
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Subordinated Note Collateral) be distributed to one or more relevant holders of Combination Notes "in kind", the
Combination Note Trustee shall sell the related portion of the Subordinated Note Collateral and distribute the
proceeds thereof ratably to the holder or holders that would have otherwise been entitled to an "in kind" distribution
of such portion of the Subordinated Note Collateral.
Acts of Holders of Combination Notes
The holders of the Combination Notes will not have any right to vote or to give consents under the
Indenture or the Collateral Management Agreement as a separate class of securities. Instead, the holders of the
Combination Notes will be entitled to direct the Combination Note Trustee, for purposes of any requests, demands,
authorizations, directions, notices, consents, waivers or other actions under the Indenture or the Collateral
Management Agreement, with respect to the Subordinated Notes included in the Subordinated Note Collateral. The
rights of the holders of the Subordinated Notes with respect to requests, demands, authorizations, directions, notices,
consents, waivers or other actions are described more fully in the Offering Memorandum.
Cancellation
All Combination Notes that are paid in full or redeemed and surrendered for cancellation will forthwith be
canceled and may not be reissued or resold.
Exchange of Combination Notes for Underlying Combination Note Assets
The Treasury Strip and the Subordinated Note Collateral are not separately transferable while they are
maintained in the Combination Note Account. However, the holder of a Combination Note may elect to exchange
such Combination Note (in whole but not in part) for its Ratable Share of the Combination Note Assets, subject to
the considerations described under "—Distributions 'In Kind,'" upon not less than ten (10) Business Days' notice to
the Combination Note Trustee. Any such exchange will constitute a redemption subject to the procedures described
above under "—Redemption of the Combination Notes." The Combination Note Trustee is not obligated and has no
responsibility to monitor, enforce or otherwise verify an investor's eligibility to hold the Treasury Strip.
A holder of a Treasury Strip and/or Subordinated Notes (including a holder that received such Treasury
Strip or Subordinated Notes upon exchange of a Combination Note) will not have the right to exchange such
Treasury Strip or Subordinated Notes for a Combination Note.
Listing
Application will be made to list the Combination Notes on the Irish Stock Exchange but there can be no
assurance that such application will be approved. The issuance and settlement of the Combination Notes will not be
conditioned on the listing of the Combination Notes on the Irish Stock Exchange.
Maples Finance Dublin will serve as Paying Agent in Ireland (in such capacity, the "Irish Paying Agent"
or a "Paying Agent") and Maples and Calder Listing Services Limited will serve as a listing agent in Ireland (the
"Irish Listing Agent").
Use of Proceeds
The net proceeds of the issuance of the Combination Notes will be used to purchase the Subordinated Note
Collateral and the Treasury Strip.
Notices
Notices to the holders of the Combination Notes will be given by first-class mail, postage prepaid, to the
registered holders of the Combination Notes at their address appearing in the register of holders maintained by the
Combination Note Trustee.
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Form, Denomination and Registration of the Combination Notes
The Combination Notes sold in offshore transactions to non-U.S. persons (as defined in Regulation S under
the Securities Act) in reliance on Regulation S will be represented by one or more permanent global notes (the
"Regulation S Global Combination Notes"), in each case in definitive, fully registered form without interest
coupons. Investors may hold their interest in a Regulation S Global Combination Note directly through Euroclear or
Clearstream, if they are participants in such systems, or indirectly through organizations which are participants in
such systems. Clearstream and Euroclear will hold interests in the Regulation S Global Combination Notes on
behalf of their participants through their respective depositories, which in turn will hold the interests in the
Regulation S Global Combination Notes in customers’ securities accounts in the depositories’ names on the books
of DTC. Beneficial interests in a Regulation S Global Combination Note may be held only through Euroclear or
Clearstream. By acquisition of a beneficial interest in a Regulation S Global Combination Note, the purchaser
thereof will be deemed to represent that, if in the future it determines to transfer such beneficial interest in the form
of a beneficial interest in a Regulation S Global Combination Note, it will transfer such interest only to a non-U.S.
person pursuant to Rule 904 of Regulation S (see "Certain ERISA and Related Considerations").
The Combination Notes that are sold in the United States or to U.S. persons or U.S. residents will only be
issued, offered and sold in definitive, fully registered form registered in the name of the beneficial owner thereof
(each, a "Definitive Combination Note").
The Combination Notes will be subject to certain restrictions on transfer, as set forth herein, in the
Combination Note Indenture, and in the 1940 Act and such Combination Notes will bear the legends regarding the
restrictions set forth under "Transfer Restrictions". The Combination Notes may not be sold or resold in the United
States or to U.S. persons or U.S. residents other than to Accredited Investors who are also Qualified Purchasers who
purchase such Combination Notes for their own account.
A beneficial interest in a Regulation S Global Combination Note may be transferred (i) to a non-U.S.
person pursuant to Rule 904 of Regulation S or (ii) in the form of a Definitive Combination Note to an Accredited
Investor who is also a Qualified Purchaser upon receipt by the Combination Note Trustee of a written certification
from the transferee in the form provided in the Combination Note Indenture to the effect that the transfer is being
made in a transaction meeting the requirements of the exemption from registration provided by Section 4(2) of the
Securities Act to an Accredited Investor who is also a Qualified Purchaser and in accordance with any applicable
securities laws of any state of the United States or any other jurisdiction.
Any beneficial interest in a Regulation S Global Combination Note that is transferred to a person who takes
delivery in the form of a Definitive Combination Note will, upon transfer, cease to be an interest in such Regulation
S Global Combination Note and become an interest in such Definitive Combination Note and, accordingly, will
thereafter be subject to all transfer restrictions and other procedures applicable to a Definitive Combination Note for
as long as it remains in such form. Any beneficial interest in a Definitive Combination Note that is transferred to a
person who takes delivery in the form of a Regulation S Global Combination Note will, upon transfer, cease to be an
interest in such Definitive Combination Note and become an interest in such Regulation S Global Combination Note
and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to a Regulation
S Global Combination Note for as long as it remains in such form.
The Combination Notes will be subject to certain restrictions on transfer set forth therein and will bear the
legends regarding the restrictions set forth under "Transfer Restrictions". Combination Notes may be transferred (i)
in the form of a Definitive Combination Note upon receipt by the Combination Note Trustee of a written
certification from the transferee in the form provided in the Combination Note Indenture to the effect that the either
the transfer is being made in a transaction meeting the requirements of the exemption from registration provided by
Section 4(2) of the Securities Act to an Accredited Investor who is also a Qualified Purchaser and in accordance
with any applicable securities laws of any state of the United States or any other jurisdiction or (ii) in the form of a
Regulation S Global Combination Note if the transfer is being made in an offshore transaction to a non-U.S. person
and in accordance with Regulation S under the Securities Act (subject to certain certification requirements set forth
13
in the Combination Note Indenture in the case of such a transfer from a person holding in the form of a Definitive
Combination Note). See "Certain ERISA and Related Considerations".
No service charge will be made for any registration of transfer or exchange of the Combination Notes, but
the Combination Note Trustee may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The Combination Notes are not issuable in bearer form. See "Settlement and Clearing".
The Combination Notes will be issued and sold in minimum denominations of U.S.$250,000 and integral
multiples of U.S.$1 in excess thereof. Notwithstanding the minimum denomination requirements set forth in the
preceding sentence, the Combination Notes may be transferred or exchanged in such lesser denominations or
amounts if a holder effecting any such transfer or exchange owns less than the minimum denomination as a result of
repayments of principal thereof and such holder is effecting a transfer or exchange of not less than all of the class of
Combination Notes that it owns.
For a summary of the applicable transfer restrictions on the Combination Notes, see "Transfer Restrictions"
herein.
Entitlement to Payments
Payments of principal and interest on the Combination Notes will be made to the person in whose name
such Combination Note is registered on the fifteenth calendar day, whether or not such date is a Business Day, prior
to the applicable Combination Note Payment Date (the "Record Date"). Payments on Definitive Combination
Notes will be made by a U.S. Dollar check drawn on a bank in the United States mailed to such investor or by wire
transfer in immediately available funds to a U.S. Dollar account maintained by such investor, provided that wiring
instructions have been provided to the Combination Note Trustee on or before the related Record Date. Payments
on the Regulation S Global Combination Notes will be made by wire transfer in immediately available funds to a
U.S. Dollar account maintained by DTC or its nominee or, if wire transfer cannot be effected, by a U.S. Dollar
check drawn on a bank in the United States mailed to DTC or its nominee. Except as otherwise set forth in the
Combination Note Indenture, final payments on the Combination Notes will be made only against surrender of the
applicable Note at the office of any Paying Agent appointed under the Combination Note Indenture. None of the
Issuer, the Combination Note Trustee or any other Paying Agent will have any responsibility or liability for any
aspects of the records maintained by DTC or its nominee or any of its participants relating to or for payments made
thereby on account of beneficial interests in a Regulation S Global Combination Note.
The Issuer expects that DTC or its nominee, upon receipt of any payment of principal or interest in respect
of a Regulation S Global Combination Note held by DTC or its nominee, will immediately credit participants’
accounts with payments in amounts proportionate to their respective beneficial interests in such Regulation S Global
Combination Note as shown on the records of DTC or its nominee. The Issuer also expects that payments by
participants to owners of beneficial interests in such Regulation S Global Combination Note held through such
participants will be governed by standing instructions and customary practices, as is now the case with securities
held for the accounts of customers registered in the names of nominees for such customers. Such payments will be
the responsibility of such participants.
For so long as any Combination Notes are listed on the Irish Stock Exchange and the rules of such
exchange shall so require, the Issuer will maintain a Paying Agent with respect to such Combination Notes with an
office located in Dublin, Ireland.
The Combination Note Indenture
No Rights Under Indenture. Except to the extent of their right to direct the Combination Note Trustee in
the manner described above under "—Acts of Holders of Combination Notes," holders of the Combination Notes
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will not have any rights under the Indenture (as defined in the Offering Memorandum) under which the Senior Notes
and the Subordinated Notes are issued.
Default. Failure to pay amounts due on the Combination Notes on the dates on which such amounts are
due will not constitute a default or event of default under the Combination Note Indenture or a right on the part of
the holders of the Combination Notes to exercise any remedies against the Issuer or any other person under the
Combination Note Indenture.
Governing Law. The Combination Notes and the Combination Note Indenture will be governed by the law
of the State of New York.
Petitions for Bankruptcy. Each original purchaser of Combination Notes and each transferee of
Combination Notes in the form of Definitive Combination Notes will be required to covenant in a Subscription
Agreement or transfer certificate, as applicable (and each transferee of Regulation S Global Combination Notes will
be deemed to have covenanted) that it will not cause the filing of a petition in bankruptcy against the Issuer before
one year and one day have elapsed since the payment in full of the Notes or, if longer, the applicable preference
period then in effect plus one day.
Amendments. The Issuer and the Combination Note Trustee, with the consent of the Collateral Manager,
may enter into one or more supplemental indentures to the Combination Note Indenture to add any provisions to, or
change in any manner or eliminate any of the provisions of, the Combination Note Indenture or modify in any
manner the rights of the holders of the Combination Notes under the Combination Note Indenture, with the consent
of each holder of Combination Notes materially and adversely affected thereby; provided, that unless notified in
writing by any holder of Combination Notes that such holder will be materially and adversely affected prior to the
execution of the supplemental indenture, the Combination Note Trustee may conclusively rely on an opinion of
counsel or a certificate of the Collateral Manager as to whether or not any holders of Combination Notes would be
materially and adversely affected by such change (after giving notice of such change to the holders of such
Combination Notes) and such determination will be conclusive and binding on all present and future holders of the
Combination Notes. It will be a condition to any supplemental indenture that Moody's have notified the Issuer and
the Combination Note Trustee in writing that such amendment will not result in a reduction, suspension or
withdrawal of the then current rating of any outstanding Combination Notes rated by Moody's.
RATING OF THE COMBINATION NOTES
It is a condition to issuance of the Combination Notes that the Combination Notes be rated "Aaa" by
Moody's. The rating of the Combination Notes addresses only the ultimate receipt of the Rated Balance (adjusted
from time to time as described herein). The rating of the Combination Notes does not address any other
distributions or payments thereon. No rating will apply to the Combination Notes at any time after the Rated
Balance is reduced to zero.
"Paid Amount" means, with respect to each Combination Note Payment Date, the aggregate amount of all
cash distributions in respect of the Combination Notes paid to the holders thereof on such Combination Note
Payment Date.
"Rated Balance" means an amount equal to (i) on the Combination Note Closing Date, $2,000,000 and (ii)
on each Combination Note Payment Date thereafter, the Rated Balance on the immediately preceding Combination
Note Payment Date (or, if there is no such date, on the Combination Note Closing Date), reduced by the Paid
Amount on such Combination Note Payment Date.
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MATURITY AND PREPAYMENT CONSIDERATIONS
The Combination Note Stated Maturity is the Business Day following the Subordinated Note Payment Date
occurring in February, 2014. The actual maturities of the Combination Notes are expected to occur prior to the
Combination Note Stated Maturity and the average life of the Combination Notes is expected to be less than the
number of years until the Combination Note Stated Maturity. See "Risk Factors—Average Life, Prepayment and
Yield Considerations".
CERTAIN INCOME TAX CONSIDERATIONS WITH RESPECT TO THE COMBINATION NOTES
TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, HOLDERS OF
THE COMBINATION NOTES ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF FEDERAL TAX
ISSUES IN THIS COMBINATION NOTES SUPPLEMENT IS NOT INTENDED OR WRITTEN TO BE RELIED
UPON, AND CANNOT BE RELIED UPON, BY HOLDERS OF THE COMBINATION NOTES FOR THE
PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON SUCH HOLDERS UNDER THE
INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS BEING USED IN CONNECTION WITH THE
PROMOTION OR MARKETING (WITHIN THE MEANING OF CIRCULAR 230) BY THE ISSUER OF THE
TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) HOLDERS OF THE COMBINATION
NOTES SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN
INDEPENDENT TAX ADVISOR.
Although each Combination Note will be evidenced by a single instrument, for U.S. federal income tax
purposes, it is likely that each U.S. holder of Combination Notes will be treated as if it directly owned its Ratable
Share of the Combination Note Assets, including the Treasury Strip (the discount of which is generally required to
be accrued under the original issue discount rules as described below) and the Subordinated Notes comprising the
Subordinated Note Collateral. The Issuer will, and each holder of a Combination Note, by acquiring such
Combination Note or an interest therein, will agree that such holders will be treated as the direct owners of the
Combination Note Assets for U.S. federal income tax purposes. In accordance with such treatment of Combination
Notes, in calculating its tax basis in each of the Combination Note Assets (including the Treasury Strip and the
Subordinated Note Collateral comprising such Combination Note), a U.S. holder will allocate the purchase price
paid for such Combination Note among such assets in proportion to their relative fair market values at the time of
purchase. A similar principle will apply in determining the amount allocable to each Combination Note Asset upon
a sale of a Combination Note. The exchange by a U.S. holder of a Combination Note for such holder's Ratable
Share of the Combination Note Assets should not be a taxable event for U.S. federal income tax purposes. A U.S.
holder of a Combination Note should review the applicable discussion in the Offering Memorandum relating to the
U.S. federal income tax consequences of the purchase, ownership and disposition of the Subordinated Notes.
The Treasury Strip will be treated as having been issued with original issue discount "OID" for U.S.
Federal income tax purposes. OID will accrue on a constant yield to maturity basis and will be includible in the U.S.
holder's gross income without regard to the U.S. holder's regular method of tax accounting or the timing of actual
payments. The amount of OID will equal the excess of the amount payable at maturity on the U.S. holder's interest
in the Treasury Strip over the allocable portion of the purchase price of the related Combination Notes. Accrued
OID will be ordinary income from sources within the United States.
A U.S. holder generally will recognize gain or loss on the sale, redemption or other taxable disposition of
its interest in the Treasury Strip (including sale of a portion of the Treasury Strip as described under "Description of
the Combination Notes—Sale of Treasury Strip") equal to the difference between the amount realized and the U.S.
holder's adjusted tax basis in the Treasury Strip. The adjusted basis of the Treasury Strip generally will equal the
portion of the U.S. holder's purchase price paid for the Combination Notes allocable to the Treasury Strip
(determined in the manner described above) increased by any OID previously included in the U.S. holder's gross
income and reduced by any payments previously received in respect of the Treasury Strip. Gain or loss recognized
on the sale, redemption or other taxable disposition of the Treasury Strip generally will be capital gain or loss from
sources within the United States.
16
See "Certain Income Tax Considerations" in the Offering Memorandum for definitions of certain important
terms used in this section, including "U.S. holder."
CERTAIN ERISA AND RELATED CONSIDERATIONS
WITH RESPECT TO THE COMBINATION NOTES
The Subordinated Note Collateral will be treated as equity for purposes of the Plan Asset Regulation.
Accordingly, the Issuer will treat the Combination Notes and the Subordinated Note Collateral in the same manner
that it treats the Subordinated Notes for purposes of the Plan Asset Regulation. The purchase, holding and transfer
of the Combination Notes therefore will be subject to the same considerations and restrictions (including restrictions
on transfer and any certifications requird to be made in connection with the acquisition thereof) as are set forth with
respect to the Subordinated Notes under "Certain ERISA and Related Considerations" in the Offering Memorandum.
TRANSFER RESTRICTIONS
Because of the following restrictions, purchasers are advised to consult legal counsel prior to making
any offer, resale, pledge or transfer of the Combination Notes.
Each initial purchaser of Combination Notes that purchases such Combination Notes in the initial
placement and each subsequent purchaser of Combination Notes may be required or will be deemed to make each of
the following representations and warranties that is applicable to it as a purchaser of Combination Notes. The Issuer
may also require such purchaser of Combination Notes to enter into a subscription agreement with the Issuer
pursuant to which such purchaser will make the applicable representations and warranties. In the case of subsequent
purchasers of Combination Notes in the form of Definitive Combination Notes, such representations and warranties
will be set forth in a written certification delivered by the purchaser to the Combination Note Trustee in the form
provided in the Combination Note Indenture. (Terms used in this paragraph that are defined in Rule 144A or
Regulation S under the Securities Act, as applicable, are used herein as defined therein):
(1)
It is either (a)(I) an "accredited investor" as defined in Regulation D under the Securities Act
(an "Accredited Investor") who is also a Qualified Purchaser (II) that is aware that the initial sale of the
Combination Notes to it is being made in reliance on the exemption from registration provided by Section 4(2)
of the Securities Act and (III) that is acquiring the Combination Notes for its own account or for one or more
accounts, each of which is an Accredited Investor and a Qualified Purchaser, and as to each of which the
purchaser exercises sole investment discretion, and in a minimum amount of not less than $250,000 for the
purchaser and for each such account, or (b) a non-U.S. person purchasing the Combination Notes in an
"offshore transaction" pursuant to Rule 903 or 904 of Regulation S.
(2)
The purchaser has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of its investment in the Combination Notes, and the purchaser and
any accounts for which it is acting are each able to bear the economic risk of the purchaser’s or its investment.
The purchaser understands that, in the event that at any time the Issuer, the Combination Note Trustee
determines that such purchaser was in breach, at the time given, of any of the representations or agreements set
forth in this paragraph, the Combination Note Trustee may consider the acquisition of the related Combination
Notes void and require that the related Combination Notes be transferred to a person designated by the Issuer.
(3)
The purchaser understands that the Combination Notes are being offered only in transactions
not involving any public offering in the United States within the meaning of the Securities Act. The
Combination Notes have not been and will not be registered under the Securities Act, and, if in the future the
purchaser decides to offer, resell, pledge or otherwise transfer the Combination Notes, such Combination Notes
may be offered, resold, pledged or otherwise transferred only in accordance with the legend on such
Combination Notes described below. The purchaser acknowledges that no representation is made by the Issuer
or the Combination Note Placement Agent as to the availability of any exemption under the Securities Act or
any state securities laws for resale of the Combination Notes.
17
(4)
The purchaser is not purchasing the Combination Notes with a view to the resale, distribution
or other disposition thereof in violation of the Securities Act. The purchaser understands that an investment in
the Combination Notes involves certain risks, including the risk of loss of all or a substantial part of its
investment under certain circumstances. The purchaser has had access to such financial and other information
concerning the Issuer and the Combination Notes as it deemed necessary or appropriate in order to make an
informed investment decision with respect to its purchase of the Combination Notes, including an opportunity
to ask questions of and request information from the Issuer and the Collateral Manager.
(5)
In connection with the purchase of the Combination Notes: (i) none of the Issuer, the
Combination Note Placement Agent, the Collateral Manager, the Collateral Administrator, the Combination
Note Trustee (except to the extent of its capacity as indenture trustee under the Combination Note Indenture),
the Administrator, the Trustee or the Share Trustee is acting as a fiduciary or financial or investment advisor
for the purchaser; (ii) the purchaser is not relying (for purposes of making any investment decision or
otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer, the Combination
Note Placement Agent, the Collateral Manager, the Collateral Administrator, the Combination Note Trustee,
the Administrator, the Share Trustee or the Trustee other than, in the case of the Issuer, in a current offering
memorandum for such Combination Notes and any representations expressly set forth in a written agreement
with such party; (iii) none of the Issuer, the Combination Note Placement Agent, the Collateral Manager, the
Collateral Administrator, the Combination Note Trustee, the Administrator, the Trustee or the Share Trustee
has given to the purchaser (directly or indirectly through any other person) any assurance, guarantee, or
representation whatsoever as to the expected or projected success, profitability, return, performance, result,
effect, consequence, or benefit (including legal, regulatory, tax, financial, accounting or otherwise) of its
purchase; (iv) the purchaser has consulted with its own legal, regulatory, tax, business, investment, financial,
and accounting advisors to the extent it has deemed necessary, and it has made its own investment decisions
(including decisions regarding the suitability of any transaction pursuant to the Combination Note Indenture)
based upon its own judgment and upon any advice from such advisors as it has deemed necessary and not upon
any view expressed by the Issuer, the Combination Note Placement Agent, the Collateral Manager, the
Collateral Administrator, the Combination Note Trustee, the Administrator, the Trustee or the Share Trustee;
and (v) the purchaser is purchasing the Combination Notes with a full understanding of all of the terms,
conditions and risks thereof (economic and otherwise), and it is capable of assuming and willing to assume
(financially and otherwise) those risks.
(6)
The purchaser (or if the purchaser is acquiring Combination Notes for any account, each
such account) was not formed solely for the purpose of investing in the Combination Notes and is not a (i)
partnership, (ii) common trust fund or (iii) special trust, pension fund or retirement plan in which the partners,
beneficiaries or participants, as applicable, may designate the particular investments to be made, and the
purchaser and each such account agrees that it shall not hold such Combination Notes for the benefit of any
other person and shall be the sole beneficial owner thereof for all purposes and that it shall not sell
participation interests in the Combination Notes or enter into any other arrangement pursuant to which any
other person shall be entitled to a beneficial interest in the distributions on the Combination Notes and further
that the Combination Notes purchased directly or indirectly by it constitute an investment of no more than 40%
of the purchaser’s and each such account’s assets. The purchaser understands and agrees that any purported
transfer of the Combination Notes to a purchaser that does not comply with the requirements of this clause (6)
shall be null and void ab initio.
(7)
The purchaser understands and agrees that, in conjunction with any transfer of any
Combination Notes to a transferee taking delivery in the form of a Definitive Combination Note, it will not
transfer or cause the transfer of such Combination Notes without obtaining from the transferee a certificate
substantially in the applicable form provided in the Combination Note Indenture.
(8)
The purchaser understands that the Combination Notes will bear the applicable legends set
forth in clause (9) below. The Combination Notes may not at any time be resold, pledged or transferred other
than (A) in offshore transactions to persons that are neither U.S. Persons nor U.S. residents pursuant to Rule
904 of Regulation S or (B) to Accredited Investors who are also Qualified Purchasers. The purchaser must
18
inform a prospective transferee of the transfer restrictions. Before a Combination Note may be offered, resold,
pledged or otherwise transferred to a holder taking delivery in the form of a Definitive Combination Note, or
any Combination Note in the form of a Definitive Combination Note may be transferred to a person taking
delivery in the form of an interest in a Regulation S Global Combination Note, the transferee will be required
to provide the Combination Note Trustee and the Issuer with a written certification in the form provided in the
Combination Note Indenture as to compliance with the transfer restrictions.
(9)
The Combination Notes will bear a legend to the following effect unless the Issuer
determines otherwise in compliance with the Combination Note Indenture and applicable law:
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE ISSUER HAS NOT
BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER THE UNITED STATES INVESTMENT
COMPANY ACT OF 1940, AS AMENDED (THE "1940 ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS NOTE, AGREES FOR THE BENEFIT OF THE ISSUER THAT SUCH NOTE MAY BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) TO AN ACCREDITED INVESTOR (AS DEFINED
IN REGULATION D UNDER THE SECURITIES ACT), PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF ONE OR MORE ACCREDITED INVESTORS IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OR (2) IN AN OFFSHORE TRANSACTION TO A NONU.S. PERSON (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) COMPLYING WITH
RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, AND, IN THE CASE OF
CLAUSE (1), IN AN AMOUNT OF NOT LESS THAN U.S.$250,000 FOR THE PURCHASER AND EACH
SUCH ACCOUNT AND IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY JURISDICTION. IN THE CASE OF CLAUSE (1)
ABOVE, THE PURCHASER AGREES ALSO THAT IT AND EACH ACCOUNT FOR WHICH SUCH
PURCHASER IS ACTING (X) IS A QUALIFIED PURCHASER WITHIN THE MEANING OF SECTION 3(C)(7)
OF THE 1940 ACT, (Y) WAS NOT FORMED FOR THE PURPOSE OF INVESTING IN THE ISSUER (EXCEPT
WHEN EACH BENEFICIAL OWNER OF THE PURCHASER AND EACH SUCH ACCOUNT IS A
QUALIFIED PURCHASER WITHIN THE MEANING OF SECTION 3(C)(7) OF THE 1940 ACT), AND (Z)
HAS RECEIVED THE NECESSARY CONSENT FROM ITS BENEFICIAL OWNERS WHEN THE
PURCHASER OR SUCH ACCOUNT IS A PRIVATE INVESTMENT COMPANY FORMED BEFORE APRIL
30, 1996, AND IN A TRANSACTION THAT MAY BE EFFECTED WITHOUT LOSS OF ANY APPLICABLE
1940 ACT EXEMPTION. ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE
AND EFFECT, WILL BE VOID AB INITIO AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO
THE TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER,
THE COMBINATION NOTE TRUSTEE OR ANY INTERMEDIARY. EACH TRANSFEROR OF THIS NOTE
WILL PROVIDE NOTICE OF THE TRANSFER RESTRICTIONS SET FORTH HEREIN AND IN THE
COMBINATION NOTE INDENTURE TO ITS TRANSFEREE. IN ADDITION TO THE FOREGOING, THE
ISSUER MAINTAINS THE RIGHT TO RESELL ALL OR ANY PORTION OF THIS NOTE PREVIOUSLY
TRANSFERRED TO NON-PERMITTED HOLDERS (AS DEFINED IN THE COMBINATION NOTE
INDENTURE) IN ACCORDANCE WITH AND SUBJECT TO THE TERMS OF THE COMBINATION NOTE
INDENTURE.
IF THE TRANSFER OF THIS NOTE IS TO BE MADE PURSUANT TO CLAUSE (1) OF THE
PRECEDING PARAGRAPH, THE TRANSFEREE OF THIS NOTE WILL BE REQUIRED TO EXECUTE AND
DELIVER TO THE ISSUER AND THE COMBINATION NOTE TRUSTEE A CERTIFICATE,
SUBSTANTIALLY IN THE FORM OF AN EXHIBIT TO THE COMBINATION NOTE INDENTURE,
STATING THAT, AMONG OTHER THINGS, THE TRANSFEREE IS (1) AN ACCREDITED INVESTOR (AS
DEFINED IN REGULATION D UNDER THE SECURITIES ACT) AND (2) A QUALIFIED PURCHASER
WITHIN THE MEANING OF SECTION 3(C)(7) OF THE 1940 ACT. IF THE TRANSFER OF THIS NOTE IS
TO BE MADE PURSUANT TO CLAUSE (2) OF THE PRECEDING PARAGRAPH, THE TRANSFEREE OF
THIS NOTE WILL BE REQUIRED TO EXECUTE AND DELIVER TO THE ISSUER AND THE
COMBINATION NOTE TRUSTEE A CERTIFICATE, SUBSTANTIALLY IN THE FORM OF AN EXHIBIT TO
THE COMBINATION NOTE INDENTURE, STATING THAT, AMONG OTHER THINGS, THE TRANSFEREE
19
ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION (AS DEFINED IN REGULATION S UNDER
THE SECURITIES ACT) COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT AND IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT). ANY PURPORTED TRANSFER OF THIS NOTE TO A TRANSFEREE THAT DOES NOT
COMPLY WITH THE REQUIREMENTS SET FORTH ABOVE SHALL BE NULL AND VOID AB INITIO
AND WILL VEST IN THE TRANSFEREE NO RIGHTS AGAINST THE COMBINATION NOTE TRUSTEE OR
THE ISSUER.
EACH PURCHASER OF THE COMBINATION NOTES REPRESENTED BY DEFINITIVE NOTES
ACQUIRING SUCH COMBINATION NOTES OR ANY BENEFICIAL INTEREST THEREIN FROM THE
ISSUER, AND EACH SUBSEQUENT PURCHASER OR TRANSFEREE ACQUIRING COMBINATION
NOTES REPRESENTED BY DEFINITIVE NOTES OR ANY BENEFICIAL INTEREST THEREIN WILL BE
REQUIRED TO REPRESENT IN WRITING WITH RESPECT TO EACH DAY IT HOLDS SUCH
COMBINATION NOTES, WHETHER OR NOT (AND WITH RESPECT TO AN INSURANCE COMPANY
GENERAL ACCOUNT, TO WHAT EXTENT) IT IS, OR IS USING THE ASSETS OF, A "BENEFIT PLAN
INVESTOR" OR A "CONTROLLING PERSON," EACH WITHIN THE MEANING OF THE U.S.
DEPARTMENT OF LABOR REGULATIONS SET FORTH AT 29 C.F.R. SECTION 2510.3-101 (THE "PLAN
ASSET REGULATIONS") AND THAT ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH
COMBINATION NOTES WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE") OR A VIOLATION OF ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW
OR REGULATION SUBSTANTIALLY SIMILAR TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE.
EACH PURCHASER AND EACH SUBSEQUENT TRANSFEREE OF COMBINATION NOTES
REPRESENTED BY REGULATION S GLOBAL COMBINATION NOTES WILL BE DEEMED TO
REPRESENT BY ITS PURCHASE AND/OR HOLDING OF SUCH COMBINATION NOTES THAT IT IS NOT
A BENEFIT PLAN INVESTOR OR A CONTROLLING PERSON (EACH WITHIN THE MEANING OF THE
PLAN ASSET REGULATIONS) AND THAT IT IS NOT USING THE ASSETS OF A BENEFIT PLAN
INVESTOR OR A CONTROLLING PERSON (EACH WITHIN THE MEANING OF THE PLAN ASSET
REGULATIONS) TO ACQUIRE AND/OR HOLD SUCH COMBINATION NOTES OR ANY BENEFICIAL
INTEREST THEREIN.
THE FAILURE TO PROVIDE THE ISSUER AND ANY PAYING AGENT, WHENEVER REQUESTED
BY THE ISSUER OR THE COLLATERAL MANAGER ON BEHALF OF THE ISSUER, WITH THE
APPLICABLE U.S. FEDERAL INCOME TAX CERTIFICATIONS (GENERALLY, AN INTERNAL REVENUE
SERVICE FORM W-9 (OR APPLICABLE SUCCESSOR FORM) IN THE CASE OF A PERSON THAT IS A
"UNITED STATES PERSON" WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE CODE OR AN
APPROPRIATE INTERNAL REVENUE SERVICE FORM W-8 (OR APPLICABLE SUCCESSOR FORM) IN
THE CASE OF A PERSON THAT IS NOT A "UNITED STATES PERSON" WITHIN THE MEANING OF
SECTION 7701(A)(30) OF THE CODE) SHALL RESULT IN THE IMPOSITION OF U.S. FEDERAL BACK-UP
WITHHOLDING FROM PAYMENTS TO THE HOLDER IN RESPECT OF THE COMBINATION NOTES
REPRESENTED HEREBY.
In addition, each Combination Note issued in the form of a Regulation S Global Combination Note will
bear the following additional legend:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC" ), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
20
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
(10)
The purchaser will not, at any time, offer to buy or offer to sell the Combination Notes by
any form of general solicitation or advertising, including, but not limited to, any advertisement, article, notice
or other communication published in any newspaper, magazine or similar medium or broadcast over television
or radio or seminar or meeting whose attendees have been invited by general solicitations or advertisings.
(11)
Each purchaser and subsequent transferee understands and agrees that it is intended that no
person will be permitted to acquire Combination Notes represented by Definitive Combination Notes if it is
determined that, after giving effect to such acquisition, participation by Benefit Plan Investors in the
Combination Notes would be "significant" within the meaning of the Plan Asset Regulations. Each purchaser
and subsequent transferee of Combination Notes represented by Definitive Combination Notes will be required
to represent and warrant in writing (i) whether or not (and with respect to an insurance company general
account, to what extent) it is, or is using the assets of, a Benefit Plan Investor or a Controlling Person and (ii) if
the acquirer is, or is using the assets of, a Plan, any entity whose underlying assets include "plan assets" (within
the meaning of the Plan Asset Regulation) of any Plan, or a governmental, church, non-U.S. or other plan
subject to any Similar Law, that the acquisition, holding and disposition of such Combination Notes or any
interest therein will not constitute or result in (x) a prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code except pursuant to an exemption all the conditions of which have been satisfied or (y)
any other violation of any applicable requirement of ERISA, the Code, or any Similar Law. Each purchaser
and subsequent transferee further understands and agrees that any purported transfer of a Combination Note to
a transferee that does not comply with the applicable provisions of the Combination Note Indenture will be null
and void ab initio and will vest in the transferee no rights against the Combination Note Trustee or the Issuer.
Each purchaser and subsequent transferee agrees to indemnify and hold harmless the Issuer, the Combination
Note Trustee, the Collateral Manager, the Combination Note Placement Agent, the Administrator, the Share
Trustee, the Collateral Administrator and their respective affiliates from any cost, damage, or loss incurred by
them as a result of its being or being deemed to be a Benefit Plan Investor or a Controlling Person if it
represented or was deemed to represent otherwise.
(12)
The purchaser of a Combination Note, if not a "United States person" (as defined in Section
7701(a)(30) of the Code), (i) is not a bank (within the meaning of Section 881(c)(3)(A) of the Code) or an
affiliate of a bank, (ii) is a person that is eligible for benefits under an income tax treaty with the United States
that eliminates United States federal income taxation of United States source interest not attributable to a
permanent establishment in the United States, or (iii) agrees that all payments received or to be received by it
from the Issuer are effectively connected with the conduct of a trade or business in the United States and it has
provided an IRS Form W-8ECI to that effect.
It will, upon request, provide the Issuer (or the Combination Note Trustee on behalf of the Issuer) with such
information as the Issuer deems necessary to verify the identity of investors in the Combination Notes and the
source of the payment of subscription monies, or as the Issuer deems necessary to comply with any customer
identification programs required by the Financial Crimes Enforcement Network and/or the SEC or as the Issuer
deems required under any anti-money laundering legislation and regulation of the Cayman Islands. It will not object
to the provision at any time by the Issuer (or the Combination Note Trustee acting in its capacity as Combination
Note Trustee on behalf of the Issuer) of the general information provided by it pursuant to the immediately
preceding sentence or of any additional information requested from the Issuer, in response to a request pursuant to
the provisions of the "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001" (if it is applicable to the Issuer) from any government entity or self-regulatory
organization for information provided by it to the Issuer (or the Combination Note Trustee acting on behalf of the
Issuer). It acknowledges that, in the event of delay or failure by such purchaser to produce any information required
for verification purposes, an application for or transfer of Combination Notes and the subscription monies relating
thereto may be refused.
21
(14)
For U.S. tax purposes, the purchaser agrees to treat (i) the Combination Notes as representing a
direct ownership interest in the Combination Note Assets and (ii) the Subordinated Notes comprising the
Subordinated Note Collateral as equity, and further agrees to take no action inconsistent with such treatment. The
purchaser understands that the Issuer may require certification acceptable to it (i) to permit the Issuer to make
payments to it without, or at a reduced rate of, withholding or (ii) to enable the Issuer to qualify for a reduced rate of
withholding in any jurisdiction from or through which the Issuer receives payments on its assets. The purchaser
agrees to provide any such certification that is requested by the Issuer.
Each initial purchaser of the Combination Notes represented by an interest in a Regulation S Global
Combination Note will further be deemed, in addition to making the representations set forth in clauses (1) through
(14) above, to represent and agree as follows:
(1)
The purchaser is aware that the sale of Combination Notes to it is being made in reliance on the
exemption from registration provided by Regulation S under the Securities Act and understands that the
Combination Notes offered in reliance on Regulation S under the Securities Act will bear the applicable legend set
forth above and be represented by one or more Regulation S Global Combination Notes.
(2)
The purchaser understands that the Issuer may receive a list of participants holding positions in its
Combination Notes from one or more book-entry depositories.
(3)
The purchaser understands that it and each subsequent transferee of a Combination Note who
takes delivery in the form of an interest in a Regulation S Global Combination Note will be deemed by its purchase
and holding of such Combination Note to represent and warrant that, for so long as the purchaser or such subsequent
transferee holds a beneficial interest in such Combination Note, it is not a Benefit Plan Investor or a Controlling
Person and it is not using the assets of a Benefit Plan Investor or a Controlling Person to acquire and/or hold such
Combination Note or any beneficial interest therein. The purchaser and each subsequent transferee understand that
any purported transfer of a Combination Note to a transferee that does not comply with the applicable provisions of
the Combination Note Indenture will be null and void ab initio and will vest in the transferee no rights against the
Combination Note Trustee or the Issuer. The purchaser and each subsequent transferee of a Combination Note who
takes delivery in the form of an interest in a Regulation S Global Combination Note agree to indemnify and hold
harmless the Issuer, the Combination Note Trustee, the Collateral Administrator, the Collateral Manager, the
Combination Note Placement Agent, the Administrator, the Trustee, the Share Trustee, the Collateral Administrator
and their respective affiliates from any cost, damage, or loss incurred by them as a result of the purchaser’s or such
subsequent transferee’s being or being deemed to be a Benefit Plan Investor or a Controlling Person.
Disqualified Transferees
If the Issuer, the Collateral Manager or the Combination Note Placement Agent notify the Combination
Note Trustee in writing that (i) a transfer or attempted or purported transfer of any interest in any Combination Note
was consummated on the basis of an incorrect form or certification from the transferee or purported transferee, (ii) a
transferee failed to deliver to the Combination Note Trustee any form or certificate required to be delivered pursuant
to the Combination Note Indenture or (iii) the holder of any interest in a Combination Note is in breach of any
representation or agreement set forth in any certificate or any deemed representation or agreement of such holder,
the Combination Note Trustee will not register such attempted or purported transfer and if a transfer has been
registered, such transfer shall be absolutely null and void ab initio and shall vest no rights in the purported transferee
(such purported transferee, a "Disqualified Transferee") and the last preceding holder of such interest in such Note
that was not a Disqualified Transferee shall be restored to all rights as a holder thereof retroactively to the date of
transfer of such Combination Note by such holder. After discovery by the Issuer or the Combination Note Trustee
(and notice by the Combination Note Trustee to the Issuer, if it makes the discovery), that a person is a Disqualified
Transferee, the Issuer shall promptly send notice to the Disqualified Transferee demanding that such Disqualified
Transferee transfer its interest to a person that is not a Disqualified Transferee within 30 days of the date of the
notice. In addition, the Issuer may require the Combination Note Trustee to direct, and the Combination Note
Trustee will direct, that the interest in the Note referred to in clause (i), (ii) or (iii) above be transferred to any person
designated by the Issuer, the Collateral Manager or the Combination Note Placement Agent at a price determined by
22
the Issuer, the Collateral Manager or the Combination Note Placement Agent, as applicable, based upon its
estimation of the prevailing price of such interest and each holder, by acceptance of an interest in a Combination
Note, authorizes the Issuer and the Combination Note Trustee to take such action and agrees to cooperate in the
taking of such action in any way reasonably requested by the Issuer or the Combination Note Trustee. The proceeds
of any such sale, net of any commissions, expenses of the Combination Note Trustee or otherwise, and taxes due in
connection with the sale shall be remitted to the Disqualified Transferee. In no case will the Issuer or the
Combination Note Trustee be held responsible for any losses that may be incurred as a result of any required transfer
described in this paragraph.
LEGAL MATTERS
Certain legal matters with respect to the Combination Notes will be passed upon for the Issuer by Skadden,
Arps, Slate, Meagher & Flom LLP, New York, New York. Certain matters with respect to the Cayman Islands
corporate law and tax law will be passed upon for the Issuer by Maples and Calder, George Town, Grand Cayman,
Cayman Islands. Certain legal matters with respect to the Collateral Manager will be passed upon for the Collateral
Manager by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York. The Combination Note Placement
Agent has been advised by Hunton & Williams LLP, New York, New York.
LISTING AND GENERAL INFORMATION
The Combination Notes sold in offshore transactions in reliance on Regulation S under the Securities Act
and represented by the Regulation S Global Combination Notes have been accepted for clearance through
Clearstream and Euroclear under the Common Code 26198399. The ISINs for the Combination Notes represented
by the Regulation S Global Combination Notes and Definitive Combination Notes, respectively, are (i)
USG29245AG57 and (ii) US278287AM91. The CUSIP Numbers for the Combination Notes represented by
Regulation S Global Combination Notes and Definitive Combination Notes, respectively, are (i) G29245 AG 5 and
(ii) 278287 AM 9.
The issuance of the Combination Notes will be authorized by the board of directors of the Issuer on or
about the Closing Date.
The total expenses related to admission to trading of the Combination Notes on the Irish Stock Exchange
are estimated at U.S. $6,597.45.
For the life of this document, copies of the Issuer Charter and the Indenture will be available in electronic
form for inspection at the registered office of the Issuer.
The Issuer is not involved in any governmental, legal or arbitration proceedings which may have, or have
had since incorporation, a significant effect on the Issuer’s financial position, nor, so far as the Issuer is aware, is
any such proceeding involving it pending or threatened.
For further information not specific to the Combination Notes as well as information relating to the Issuer
please see the applicable discussion in the Offering Memorandum under "Listing and General Information."
23
INDEX OF DEFINED TERMS
Following is an index of defined terms used in this Supplement and the page number where each definition
appears.
Irish Paying Agent ...............................................5, 12
Issuer ..........................................................................i
Offering .................................................................. vii
Offering Memorandum..............................................1
OID..........................................................................16
Paid Amount............................................................15
Paying Agent .......................................................5, 12
Plan Asset Regulations ............................................20
Qualified Purchaser ................................................i, 4
Ratable Share.........................................................2, 9
Rated Balance..........................................................15
Record Date .............................................................14
Regulation S Global Combination Notes..........i, 4, 13
Regulations ............................................................... ii
RSA 421-B ............................................................... ii
Securities Act........................................................i, 19
SEL............................................................................v
Senior Notes ...........................................................i, 1
SFA...........................................................................vi
Subordinated Note Collateral .............................i, 2, 8
Subordinated Note Collateral Distribution
Amount ..............................................................3, 9
Subordinated Note Payment Date..........................3, 9
Subordinated Notes.................................................i, 1
Supplement ................................................................1
Treasury Strip .....................................................i, 2, 8
Treasury Strip Liquidation Percentage ......................9
Treasury Strip Market Value ...................................10
Treasury Strip Principal Amortization Amount.......10
Treasury Strip Principal Amortization Shortfall......10
U.S. Dollars ..............................................................ix
U.S.$.........................................................................ix
$ ..............................................................................ix
1940 Act ...............................................................i, 19
Accredited Investor..............................................4, 17
Act ........................................................................... iii
Available Funds.....................................................3, 9
Business Day .............................................................9
Class A Notes .........................................................i, 1
Class B Notes .........................................................i, 1
Class C Notes .........................................................i, 1
Class D Notes .........................................................i, 1
Class I Combination Notes .....................................i, 1
Clearstream.............................................................i, 4
Code.........................................................................20
Combination Note Account ....................................i, 2
Combination Note Assets ...................................i, 2, 8
Combination Note Closing Date.............................i, 1
Combination Note Indenture .....................................1
Combination Note Payment Date ..........................3, 9
Combination Note Placement Agent ..........................i
Combination Note Stated Maturity........................3, 7
Combination Note Trustee.........................................1
Combination Notes .................................................i, 1
Companies Act ........................................................ iii
Definitive Combination Note ...........................i, 4, 13
Designated Pricing Agents ......................................10
Disqualified Transferee ...........................................22
Dollars ......................................................................ix
DTC .....................................................................4, 20
ERISA .....................................................................20
Euroclear.................................................................i, 4
Exchange Act......................................................... viii
FSMA ....................................................................... ii
Irish Listing Agent..............................................5, 12
24
PRINCIPAL AND REGISTERED OFFICE OF ISSUER
Eaton Vance CDO VIII, Ltd.
c/o Maples Finance Limited
P.O. Box 1093GT
Queensgate House, South Church Street
George Town, Grand Cayman
Cayman Islands
COMBINATION NOTE TRUSTEE, PAYING AGENT, COLLATERAL ADMINISTRATOR AND NOTE
REGISTRAR
JPMorgan Chase Bank, National Association
Worldwide Securities Services – Eaton Vance CDO VIII, Ltd.
600 Travis Street, JPMorgan Chase Tower, 50th Floor
Houston, Texas 77002
ADMINISTRATOR
Maples Finance Limited
Ugland House, South Church Street
George Town, Grand Cayman
Cayman Islands
LEGAL ADVISORS
To the Issuer and the Collateral Manager
as to United States law
To the Issuer
as to Cayman Islands law
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Maples and Calder
Ugland House, South Church Street
George Town, Grand Cayman
Cayman Islands
To the Combination Note Trustee
To the Combination Note Placement Agent
Gardere Wynne Sewell LLP
1000 Louisiana
Suite 3400
Houston, Texas 77002-5011
Hunton & Williams LLP
200 Park Avenue
53rd Floor
New York, NY 10166