1 This document constitutes two base prospectuses of Raiffeisenlandesbank Oberösterreich Aktiengesellschaft for the purposes of article 5.4 of the Directive 2003/71 of the European Parliament and of the Council of 4 November 2003, as amended by Directive 2010/73/EU of the European Parliament and of the Council of 24 November 2010, as amended (the "Prospectus Directive"): (i) the base prospectus in respect of non-equity securities ("Non-Equity Securities") within the meaning of Art. 22 No. 6(4) of the Commission Regulation (EC) No. 809/2004 of 29 April 2004, as amended (the "Prospectus Regulation") and (ii) the base prospectus in respect of Collateralised Notes (Fundierte Bankschuldverschreibungen) within the meaning of Art. 22 No. 6(3) of the Commission Regulation (together, the "Debt Issuance Programme Prospectus", or the "Prospectus"). Debt Issuance Programme Prospectus 29 November 2013 Raiffeisenlandesbank Oberösterreich Aktiengesellschaft Debt Issuance Programme (unlimited in size) (the "Programme") Application has been made to list notes issued under this Programme (the "Notes", which expression includes Collateralised Notes unless indicated otherwise) and/ or the Programme on the Official List of the Luxembourg Stock Exchange and to trade Notes on the Regulated Market "Bourse de Luxembourg", which is a regulated market within the meaning of Directive 2004/39/EC and appears on the list of regulated markets issued by the European Commission (the "Regulated Market"), and on the Second Regulated Market at the Vienna Stock Exchange. Application may also be made to trade Notes on the Euro MTF market of the Luxembourg Stock Exchange and the Vienna Stock Exchange. Notes issued under the Programme may not be listed at all. Raiffeisenlandesbank Oberösterreich Aktiengesellschaft has requested the Commission de Surveillance du Secteur Financier (the "CSSF") of the Grand Duchy of Luxembourg ("Luxembourg") in its capacity as competent authority under the Luxembourg law of 10 July 2005 relating to prospectuses for securities (Loi du 10 juillet 2005 relative aux prospectus pour valeurs mobilières), as amended (the "Luxembourg Law"), which implements the Prospectus Directive to provide the competent authorities in the Federal Republic of Germany and the Republic of Austria ("Austria") with a certificate of approval attesting that the Prospectus has been drawn up in accordance with the Luxembourg law which implements the Prospectus Directive into Luxembourg law (each a "Notification"). The Issuer may request the CSSF to provide competent authorities in additional host Member States within the European Economic Area with a Notification. By approving a prospectus, the CSSF shall give no undertaking as to the economic and financial soundness of the operation or the quality or solvency of the issuer. BNP PARIBAS Deutsche Bank Morgan Stanley Raiffeisen Bank International AG Arranger Deutsche Bank Dealers UBS Investment Bank Citigroup DZ BANK AG Raiffeisenlandesbank Oberösterreich The Royal Bank of Scotland This Prospectus and all documents incorporated herein by reference will be published in electronic form on the website of the Luxembourg Stock Exchange (www.bourse.lu) and on the website of Raiffeisenlandesbank Oberösterreich Aktiengesellschaft (www.rlbooe.at). It is valid for a period of 12 months from the date of its approval and replaces the Prospectus dated 21 December Printed copies of this Prospectus are available at the head office of the Issuer during normal business hours.
2 2 RESPONSIBILITY STATEMENT Raiffeisenlandesbank Oberösterreich Aktiengesellschaft (the "Bank", "RLB OÖ" or the "Issuer" and together with its consolidated subsidiaries the "RLB OÖ Group" or the "Group") with its registered office in Linz, Austria, is solely responsible for the information given in this Prospectus and for the information which will be contained in the Final Terms (as defined herein). The Issuer hereby declares that, having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import. NOTICE This Prospectus should be read and understood in conjunction with any supplement thereto and with any document incorporated herein by reference. Full information on the Issuer and any Tranche (as defined below) of Notes is only available on the basis of the combination of the Prospectus and the relevant final terms (the "Final Terms"). The Issuer has confirmed to the Dealers set forth on the cover page (each a "Dealer" and together the "Dealers" which term includes any new dealer appointed from time to time under the Programme) that this Prospectus contains all information which is material in the context of the Programme and the issue and offering of Notes thereunder; that the information contained herein is accurate in all material respects and is not misleading; that any opinions and intentions expressed herein are honestly held; that there are no other facts, the omission of which would make this Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect; and that all reasonable enquiries have been made to ascertain all facts and to verify the accuracy of all statements contained herein. No person has been authorised to give any information which is not contained in or not consistent with this Prospectus or any other information supplied in connection with the Programme and, if given or made, such information must not be relied upon as having been authorised by or on behalf of the Issuer or any of the Dealers. This Prospectus is valid for 12 months after its approval and this Prospectus and any supplement hereto as well as any Final Terms reflect the status as of their respective date. The delivery of this Prospectus or any Final Terms and the offering, sale or delivery of any Notes may not be taken as an implication that the information contained in such documents is accurate and complete subsequent to their respective dates of issue or that there has been no adverse change in the financial condition of the Issuer since such date or that any other information supplied in connection with the Programme is accurate at any time subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same. The Issuer has undertaken with the Dealers to supplement this Prospectus or publish a new Prospectus if and when the information herein should become materially inaccurate or incomplete or in case of a significant new factor, material mistake or inaccuracy relating to the information included in this Prospectus which is capable of affecting the assessment of the Notes and, where approval by the CSSF of any such document is required, upon such approval having been given. To the extent permitted by the laws of any relevant jurisdiction neither the Arranger (as defined herein) nor any Dealer nor any person mentioned in this Prospectus, excluding the Issuer, is responsible for the information contained in this Prospectus or any supplement thereof, or any Final Terms or any other document incorporated herein by reference and, accordingly, and to the extent permitted by the laws of any relevant jurisdiction, none of these persons accepts any responsibility for the accuracy and completeness of the information contained in any of these documents. The distribution of this Prospectus and of any Final Terms and the offering, sale and delivery of Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus or any Final Terms come are required to inform themselves about and observe any such restrictions. For a description of the restrictions applicable in the United States of America, the European Economic Area, the United Kingdom, and Japan see "Selling Restrictions". In particular, the Notes have not been and will not be registered under the United States Securities Act of 1933, as amended, and are subject to tax law requirements of the United States of America; subject to certain exceptions, Notes may not be offered, sold or delivered within the United States of America or to U.S. persons.
3 3 The language of the Prospectus is English. This Prospectus is drawn up in the English language and contains a German translation of the summary. The Terms and Conditions and the form of Final Terms contained in this Prospectus are in both, the English and the German language. The Final Terms will specify for each Tranche of Notes whether the Terms and Conditions for such Tranche of Notes (i) are written in the German language and provided with an English language translation whereby the German text shall be controlling and binding and an English language translation is provided for convenience; or (ii) are written in the English language and provided with a German language translation whereby the English text shall be controlling and binding and an German language translation is provided for convenience; or (iii) are written in the German language only; or (iv) are written in the English language only. This Prospectus may only be used for the purpose for which it has been published. This Prospectus and any Final Terms may not be used for the purpose of an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. This Prospectus and any Final Terms do not constitute an offer or an invitation by or on behalf of the Issuer or the Dealers to any person to subscribe for or to purchase any Notes. In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) named as the stabilising manager(s) (or persons acting on behalf of any stabilising manager(s)) in the applicable Final Terms may overallot Notes or effect transactions with a view to supporting the price of the Notes at a level higher than that which might otherwise prevail. However, there is no assurance that any stabilising manager(s) (or persons acting on behalf of any stabilising manager) will undertake stabilisation action. Any stabilisation action may begin on or after the date on which adequate public disclosure of the terms of the offer of the relevant Tranche of Notes is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date and 60 days after the date of the allotment of the relevant Tranche of Notes. Any stabilisation action or over-allotment must be conducted by the relevant stabilising manager(s) (or person(s) acting on behalf of any stabilising manager(s)) in accordance with all applicable laws and rules. Each Financial Intermediary (as defined on page 59) subsequently reselling or finally placing Notes issued under the Programme is entitled to use the Prospectus as set out in "Consent to the Use of the Prospectus" on page 59. FORWARD-LOOKING STATEMENTS This Prospectus contains certain forward-looking statements. A forward-looking statement is a statement that does not relate to historical facts and events. Forward-looking statements are based on analyses or forecasts of future results and estimates of amounts not yet determinable or foreseeable. These forward-looking statements may be identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will" and similar terms and phrases, including references and assumptions. This applies, in particular, to statements in this Prospectus containing information on future earning capacity, plans and expectations regarding RLB OÖ Group's business and management, its growth and profitability, and general economic and regulatory conditions and other factors that affect it. Forward-looking statements in this Prospectus are based on current estimates and assumptions that the Issuer makes to the best of its present knowledge. These forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results, including RLB OÖ Group's financial condition and results of operations, to differ materially from and be worse than results that have expressly or implicitly been assumed or described in these forward-looking statements. RLB OÖ Group's business is also subject to a number of risks and uncertainties that could cause a forwardlooking statement, estimate or prediction in this Prospectus to become inaccurate. Accordingly, investors are strongly advised to read the section "Risk Factors" in this Prospectus. This section includes more detailed descriptions of factors that might have an impact on RLB OÖ Group's business and the markets in which it operates.
4 4 In light of these risks, uncertainties and assumptions, future events described in this Prospectus may not occur. In addition, neither the Issuer nor the Dealers assume any obligation, except as required by law, to update any forward-looking statement or to conform these forward-looking statements to actual events or developments.
5 5 TABLE OF CONTENTS Summary... 7 Section A Introduction and Warnings... 7 Section B Summary regarding RLB OÖ... 8 Section C The Notes...11 Section D Summary regarding the Risks...14 Section D Risks specific to the Notes...17 Section E Offer...21 German Translation of the Summary...22 Abschnitt A Einleitung und Warnhinweise...22 Abschnitt B Zusammenfassung in Bezug auf RLB OÖ...23 Abschnitt C Die Schuldverschreibungen...26 Abschnitt D Zusammenfassung in Bezug auf die Risiken...30 Abschnitt D Risiken, die den Schuldverschreibungen eigen sind...33 Abschnitt E Angebot...38 Risk Factors...39 Risk Factors regarding the Notes...39 Risk Factors regarding RLB OÖ...48 Consent to the Use of the Prospectus...59 General Description of the Programme...60 Issue Procedures...62 Terms and Conditions of the Notes English Language Version...64 OPTION I Terms and Conditions that apply to Notes with fixed interest rates...65 OPTION II Terms and Conditions that apply to Notes with floating interest rates...82 OPTION III Terms and Conditions that apply to Notes with fixed to floating interest rates OPTION IV Terms and Conditions that apply to zero coupon Notes OPTION V Terms and Conditions that apply to Notes with fixed interest rates of Collateralised Notes OPTION VI Terms and Conditions that apply to Notes with floating interest rates of Collateralised Notes OPTION VII Terms and Conditions that apply to Notes with fixed to floating interest rates of Collateralised Notes OPTION VIII Terms and Conditions that apply to zero coupon Notes of Collateralised Notes Terms and Conditions of the Notes German Language Version (Deutsche Fassung) OPTION I Anleihebedingungen für Schuldverschreibungen mit fester Verzinsung OPTION II Anleihebedingungen für variabel verzinsliche Schuldverschreibungen OPTION III Anleihebedingungen für fest- zu variabel verzinsliche Schuldverschreibungen OPTION IV Anleihebedingungen für Nullkupon-Schuldverschreibungen OPTION V - Anleihebedingungen für Schuldverschreibungen mit fester Verzinsung für Fundierte Bankschuldverschreibungen OPTION VI - Anleihebedingungen für variabel verzinsliche Schuldverschreibungen für Fundierte Bankschuldverschreibungen OPTION VII - Anleihebedingungen für fest zu variabel verzinsliche Schuldverschreibungen für Fundierte Bankschuldverschreibungen OPTION VIII - Anleihebedingungen für Nullkupon-Schuldverschreibungen für Fundierte Bankschuldverschreibungen Form of Final Terms Raiffeisenlandesbank Oberösterreich Aktiengesellschaft Taxation Selling Restrictions...369
6 6 General Information Collateralised Notes Use of Proceeds Listing and Admission to Trading Authorisation Interests of Natural and Legal Persons involved in the Issue/Offer Documents incorporated by Reference Availability of Documents incorporated by Reference / Documents on Display Names and Addresses...377
7 7 SUMMARY Summaries are made up of disclosure requirements known as "Elements". These elements are numbered in Sections A E (A.1 E.7). This summary (the "Summary") contains all the Elements required to be included in a summary for this type of Notes and Issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the Summary because of the type of Notes and Issuer, it is possible that no relevant information can be given regarding the Element. In this case, a short description of the Element is included in the Summary with the mention of "not applicable". [The Summary contains options, characterised by square brackets or typesetting in italics (other than the respective translations of specific legal terms), and placeholders regarding the Notes to be issued under the Programme. The summary of the individual issue of Notes will include the options relevant to this issue of Notes as determined by the applicable Final Terms and will contain the information, which had been left blank, as completed by the applicable Final Terms.] 1 Element Section A Introduction and warnings A.1 Warnings Warning that: this Summary should be read as an introduction to the Prospectus; any decision to invest in the Notes should be based on consideration of the Prospectus as a whole by the investor; where a claim relating to the information contained in the Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating the Prospectus, before the legal proceedings are initiated; and civil liability attaches only to the Issuer which has tabled the Summary including any translation thereof, but only if the Summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus or it does not provide, when read together with the other parts of the Prospectus, key information in order to aid investors when considering whether to invest in the Notes. A.2 Consent to the use of the Prospectus [All credit institutions, which are authorised in the European Union pursuant to the Directive 2006/48/EC, with a head office in one of the Member States, are entitled to issue or sell securities (the "Financial Intermediaries") and are subsequently reselling or finally placing Notes are entitled to use the Prospectus in the Grand Duchy of Luxembourg, the Republic of Austria, the Federal Republic of Germany or such other Member State whose competent authorities have been notified of the approval of the Prospectus in accordance with the Selling Restrictions applicable for the Programme for the subsequent resale or final placement of the relevant Notes during the respective offer period from [ ] to [ ], provided however, that the Prospectus is still valid in accordance with Article 11 of the Luxembourg Law relating to prospectuses for securities (Loi relative aux prospectus pour valeurs 1 To be deleted in the issue-specific Summary.
8 8 mobilières) which implements Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 (as amended by Directive 2010/73/EU of the European Parliament and of the Council of 24 November 2010). The Prospectus may only be delivered to potential investors together with all supplements published before such delivery. Any supplement to the Prospectus is available for viewing in electronic form on the website of the Luxembourg Stock Exchange (www.bourse.lu) and on the website of Raiffeisenlandesbank Oberösterreich Aktiengesellschaft (www.rlbooe.at). When using the Prospectus, each Financial Intermediary must make certain that it complies with all applicable laws and regulations in force in the respective jurisdictions. The Issuer is not liable for acts or omissions of Financial Intermediaries. In the event of an offer being made by a Financial Intermediary the Financial Intermediary shall provide information to investors on the terms and conditions of the Notes at the time of that offer.] [Not applicable. No consent has been given.] Element Section B Summary regarding RLB OÖ B.1 Legal and Commercial Name B.2 Domicile / Legal Form / Legislation / Country of Incorporation B.4b Known Trends affecting the Issuer and the Industries in which it operates B.5 Description of the Group and the Issuer's position within the Group Legal Name: Raiffeisenlandesbank Oberösterreich Aktiengesellschaft Commercial Name: Raiffeisenlandesbank Oberösterreich Europaplatz 1a, A-4020 Linz / joint-stock company / Austria / Austria Known trends affecting the Issuer and the industries in which it operates are the difficult overall macroeconomic environment with decreasing growth rates and the continuing tense situation on the financial and capital markets which have had and may continue to have a negative impact on the Issuer's business activity and results of operations, in particular also on the Issuer's capital costs. Further regulatory changes or enforcement initiatives could affect the financial industry. New governmental or regulatory requirements and changes in levels of adequate capitalisation, liquidity and leverage could lead to increased capital and liquidity requirements or standards. Raiffeisenlandesbank Oberösterreich Aktiengesellschaft is the parent company. On 30 June 2013 the scope of consolidation of the Issuer has encompassed 63 fully consolidated companies. The Raiffeisen Banking Group in Austria has a 3-tier structure: 1. The first tier is formed by independent and locally active Raiffeisen banks and their branches. 2. The second tier consists of eight central provincial banks ("Raiffeisenlandesbanks") owned by the Raiffeisen
9 9 banks of the respective federal province. Raiffeisenlandesbank Oberösterreich Aktiengesellschaft is one of the above mentioned Raiffeisenlandesbanks. 3. Raiffeisen Zentralbank Österreich AG ("RZB") is organised as a joint-stock company. Its shareholders are the Raiffeisenlandesbanks (RLB OÖ: per cent.). RZB holds for its part around 78.5 per cent. in the stock exchange-listed Raiffeisen Bank International AG ("RBI"), which ranks among the leading commercial and investment banks in Austria and is a big player in CEE countries. B.9 Profit Forecast or Not applicable. No profit forecast or estimate are made. estimate B.10 Nature of any Not applicable. The audit report does not include any qualifications in the qualifications. audit report on historical financial information B.12 Selected historical key financial information Source: Annual Report 2012 RLB OÖ, pages 29, 31 in million EUR 31 December December 2012 Total assets 38,326 39,823 Liabilities 35,061 36,345 Equity 3,265 3,478 Net interest income Net profit (excl. minority interests) Source: Semi-Annual Report 2013 RLB OÖ, pages 11, 13 and Semi-Annual Report 2012 RLB OÖ, pages 10, 12 in million EUR 30 June June 2013 Total assets 39,209 38,983 Liabilities 35,785 35,543 Equity 3,424 3,440 Net interest income Net profit for the period (excl. minority interests) No material adverse There has been no material adverse change in the prospects change in the of the Issuer since 31 December 2012, the date of its last prospects of the Issuer audited financial statement. Significant change in the financial and trading position Not applicable. There has been no significant change in the financial and trading position of the Issuer since 30 June B.13 Recent Events RLB OÖ currently uses the credit risk standard approach for the determination of the equity backing. In the near future an adjustment to the "advanced internal rating based approach" ("a-irb-approach") will take place. With agenda item 4 of the ordinary General Meeting of Shareholders held on 13 May 2013 the Management Board was authorised to increase the share capital up to
10 10 B.14 Please see Element B.5 EUR 23,475,672 by issuing up to 164,214 new ordinary voting bearer shares. Further, the Management Board was authorised to exclude the statutory subscription right of the shareholders with the consent of the Supervisory Board. Statement of Not applicable. The Issuer is not dependent on other Dependency companies of the group. B.15 Principal Activities RLB OÖ is a regional bank which is active as a universal bank. The Issuer focuses its activities primarily on its selfdefined domestic market, Austria and Southern Germany. In addition, the Bank assists its customers with export and international financing services. B.16 Controlling Persons RLB OÖ has divided its business into four core business areas: Corporates & Retail Financial Markets Investments Corporate Center 95 Upper Austrian Raiffeisen banks 100% Raiffeisenbankengruppe OÖ Verbund eingetragene Genossenschaft other members 98.82% ordinary shares 50.01% 49.99% RLB Holding registrierte Genossenschaft mit beschränkter Haftung OÖ 1.18% ordinary shares Raiffeisenlandesbank Oberösterreich Aktiengesellschaft Raiffeisenbankengruppe OÖ Verbund eingetragene Genossenschaft holds a direct participation of per cent. in RLB OÖ. Furthermore, RLB Holding registrierte Genossenschaft mit beschränkter Haftung OÖ holds directly 1.18 per cent. in RLB OÖ. In both cases the voting rights correspond to the share of capital. RLB OÖ is indirectly controlled through Raiffeisenbankengruppe OÖ Verbund eingetragene Genossenschaft by the 95 Upper Austrian Raiffeisen banks, whereas none of them holds more than 10 per cent. of the shares. The increase in capital, as mentioned in Element B.13, has not yet been entered in the commercial register, but the figure above already reflects the new structure. B.17 Credit Ratings of the Issuer or its debt securities Long-Term Bank Deposit Rating (EUR)/Long-Term Issuer Rating (EUR): A2 (negative outlook) Senior unsecured foreign currency debt rating: A2 (negative outlook) Short-Term Bank Deposit Rating (EUR): P-1 (Prime-1) Bank Financial Strength Rating: D+ (negative outlook) (Moody's Deutschland GmbH)
11 11 Element C.1 Class and type of the Notes / ISIN Section C The Notes Class and type The Notes are [in the case of Notes other than Collateralised Notes unsecured] [in the case of Collateralised Notes collateralised through the cover assets of the relevant cover pool]. [Fixed Rate Notes] [Floating Rate Notes] [Fixed to Floating Rate Notes] [Zero Coupon Notes] ISIN [ ] C.2 Currency The Notes are issued in [ ] C.5 Restrictions on free Transferability C.8 Rights attached to the Notes (including ranking of the Notes and limitations to those rights) Not applicable. The Notes are freely transferable. [Early redemption of the Notes [The Notes can be redeemed prior to their stated maturity [at the option of the] [Issuer,] [and] [or] [the holders of the Notes].] [The holders of the Notes have no right to redeem the Notes prior to their stated maturity.]] [Early redemption of the Notes upon the occurrence of a Regulatory Event The [Subordinated Capital] [Tier 2] Notes can be redeemed prior to their stated maturity by the Issuer upon the occurrence of a Regulatory Event.] [Early Redemption at the option of the [Issuer] [and] [or] [the holders] at specified redemption amount(s) The Notes can be redeemed at the option of the [Issuer] [and] [or] [the holders] upon giving notice within the specified notice period to [the holders] [or] [the Issuer][, as the case may be,] on a date or dates specified prior to such stated maturity and at the specified redemption amount(s) [together with accrued interest to, but excluding, the relevant redemption date].] Early redemption for taxation reasons [Early Redemption of the Notes for reasons of taxation will be permitted, if as a result of any change in, or amendment to the laws or regulations (including any amendment to, or change in, an official interpretation or application of such laws or regulations), of the Republic of Austria or any political subdivision or taxing authority thereto or therein
12 12 affecting taxation or the obligation to pay duties of any kind, the Issuer will become obligated to pay additional amounts on the Notes.] [The [Subordinated Capital] [Tier 2] Notes can be redeemed prior to their stated maturity by the Issuer for taxation reasons.] [[Collateralised Notes] will not be subject to early redemption for taxation reasons.] Events of Default [The unsubordinated Notes will provide for events of default entitling holders to demand immediate redemption of Notes.] [The [Subordinated Capital Notes] [Tier 2 Notes] will not provide for any Event of Default entitling holders to demand immediate redemption.] [Collateralised Notes will not provide for events of default entitling holders to demand immediate redemption of the Notes.] The Terms and Conditions of the Notes do not provide for a cross-default. [Resolutions of holders In accordance with the German Act on Debt Securities of 2009 (Schuldverschreibungsgesetz "SchVG") the Notes contain provisions pursuant to which holders may agree by resolution to amend the Terms and Conditions (with the consent of the Issuer) and to decide upon certain other matters regarding the Notes. Resolutions of holders properly adopted, either in a meeting of holders or by vote taken without a meeting in accordance with the Terms and Conditions, are binding upon all holders. Resolutions providing for material amendments to the Terms and Conditions require a majority of not less than 75% of the votes cast. Resolutions regarding other amendments are passed by a simple majority of the votes cast.] Status of the Notes [The obligations under the unsubordinated Notes (other than Collateralised Notes) constitute unsecured and unsubordinated obligations of the Issuer ranking pari passu among themselves and pari passu with all other unsecured and unsubordinated obligations of the Issuer except for any obligations preferred by law.] [The obligations under the [Subordinated Capital Notes] [Tier 2 Notes] constitute unsecured and subordinated obligations of the Issuer ranking pari passu among themselves and pari passu with all other subordinated obligations of the Issuer.] [The obligations under the Collateralised Notes constitute unsubordinated obligations of the Issuer ranking pari passu among themselves and pari passu with all other covered obligations of the Issuer existing under Collateralised Notes that are collateralised by the same cover pool of cover
13 13 assets.] Negative pledge The Terms and Conditions of the Notes do not contain a negative pledge provision of the Issuer. C.9 see Element C.8 Interest rate Interest commencement date Interest payment dates Underlying on which interest rate is based [In the case of fixed rate Notes [ ]% per annum [for the period from [ ] to [ ]].] [In the case of floating rate Notes [[ ]% per annum minus] [EURIBOR] [LIBOR for the specified currency] [EUR [ ] Year swap rate ] [difference between the EUR [ ] Year swap rate and the EUR [ ] Year swap rate] [[plus][minus] the margin of [ ]%] [multiplied by a factor of [ ]] for each interest period. [The maximum interest rate is [ ]% per annum.] [The minimum interest rate is [ ]% per annum.]] [In the case of fix to floating rate Notes - [ ]per cent. per annum for the fixed interest rate period, - [[ ]% per annum minus] [EURIBOR] [LIBOR for the specified currency] [the EUR [ ] Year swap rate] [the difference between the EUR [ ] Year swap rate and the EUR [ ] Year swap rate] [multiplied by a factor of [ ]] [[plus][minus] the margin of [ ] per cent per annum] for the floating interest rate period. [The maximum floating interest rate is [ ] per cent. per annum.] [The minimum floating interest rate is [ ] per cent. per annum.]] [In the case of zero coupon Notes Not applicable. No periodic payments of interest.] [The issue date of the Notes.] [ ] [ ] [Not applicable in the case of Zero coupon Notes.] [Not applicable in the case of fixed rate Notes and in the case of Zero coupon Notes. The interest rate is not based on an underlying.] [EURIBOR] [LIBOR for the specified currency] [euro EURIBOR swap rate] [euro EURIBOR swap rates] Maturity date including repayment procedures [ ] Payment of principal in respect of Notes shall be made to the Clearing System or to its order for credit to the accounts of the relevant account holders of the Clearing System. Indication of yield [ ]% per annum [Not applicable in the case of floating rate Notes and in the case of fix to floating rate Notes. No yield is calculated.] Name of representative of the holders [Not applicable. A representative of the Holders is not appointed.] [In accordance with the SchVG the Notes provide that the Holders may by majority resolution appoint a representative
14 14 C.10 see Element C.9 Explanation how the value of the investment is affected in the case the Notes have a derivative component in the interest payment C.11 Admission to trading on a regulated market or equivalent market/ Indication of the market where the Notes will be traded and for which the Prospectus has been published for all Holders (the "Holders' Representative"). The responsibilities and functions assigned to the Holders' Representative appointed by a resolution are determined by the SchVG and by majority resolutions of the Holders.] [[ ] has been designated in the Terms and Conditions of the Notes as representative for all Holders (the "Holders' Representative"). The duties, rights and functions of the Holders' Representative are determined by the relevant provisions of the Terms and Conditions.] [An Austrian court can appoint a trustee (Kurator) for the Collateralised Notes to exercise the rights and represent the interests of Holders on their behalf in which case the ability of Holders to pursue their rights under the Notes individually may be limited.] Not applicable. The interest payment has no derivative component. [Regulated Market of the Luxembourg Stock Exchange.] [Second Regulated Market of the Vienna Stock Exchange.] [Not applicable. The Notes are not admitted to trading on a regulated market.] [C.21 see Element C.11] Element Section D Summary regarding the Risks D.2 Key information on the key risks that are specific to the Issuer An investment in the Notes issued by RLB OÖ, bears the risk that RLB OÖ is not able to fulfil its obligations created by the issuance of the securities on the relevant due date. The business of RLB OÖ is subject to the following risks: Risk that losses could occur due to market price changes (market risk) Risk that customers and other contractual partners may fail to meet their obligations and that the provisions formed by the Issuer are insufficient to cover this risk (loan and default risk) Risk derived from loans to customers in the same branch or companies closely associated with the Issuer, which can have a sizeable negative influence on the business, asset, financial and earnings situation of the Issuer (concentration risk) Risk to the Issuer that contractual partners fail to meet their obligations derived from trading transactions as agreed (counterparty risk) Risk of potential conflicts of interest among members of
15 15 the Issuer's executive bodies due to their activities for companies of the Raiffeisen Bank Group Austria Unexpected losses can occur owing to the inadequacy or failure of internal processes, persons or systems, or due to external events (operational risk) Changes to accounting principles and standards can have an influence on the reporting of the Issuer's business and financial results (risk of a change in accounting principles) In the case of a negative conclusion, ongoing judicial and official proceedings may lead to financial and legal burdens upon the Issuer (ongoing judicial proceedings risk) The risk that outages, interruptions or security deficiencies have a temporary negative effect upon various business areas of the Issuer (IT risk) Risk of the advent of a currently unforeseeable situation or the occurrence of risks, which from a present perspective are incalculable (dependency upon successful risk management) Risks derived from changes in the economic and political environment or financial market downturns The Issuer can be affected directly by the economic difficulties of other large financial institutions (systemic risk) The risk exists that depreciation of the collateral for the hedging of business and real estate loans may exert a major negative influence upon the asset, financial and earnings situation of the Issuer (risk of depreciation of the collateral for the hedging of business and real estate loans) The risk of a change in the taxation framework, especially profit tax Risk of disadvantages to the Issuer as an important sales and contractual partner of the Raiffeisenlandesbank Oberösterreich Aktiengesellschaft Group owing to possible deteriorations in the business development of the Raiffeisenlandesbank Oberösterreich Aktiengesellschaft Group Risk of disadvantages to the Issuer as a member of the Raiffeisen Kundengarantiefond Oberösterreich derived from the insolvency of a member of the Raiffeisen Kundengarantiefond Oberösterreich or recourse to the Raiffeisen Kundengarantiefonds Oberösterreich Risk of insufficient availability of low-cost refinancing possibilities Risk to the Issuer of disadvantages owing to intensive competition or a deterioration in the competitive situation (competitive risk) Risk to the Issuer of an alteration to the regulatory framework (especially in Austria) Risk of the loss of one or more key employees, or the failure to recognize significant banking sector developments and trends in time
16 16 The risk that due to the differing terms of receivables and payables, the Issuer may unable to meet its current or future payment obligations in full or on time The risk that in the case of an unforeseen event, the equity of the Issuer may prove insufficient The required increase in Tier 1 capital can lead to a deterioration in the asset, financial and earnings situation of the Issuer (risk of the requirements to raise additional Tier 1 capital) Legal changes, changes to the regulatory environment, increased regulation in the area of capital and liquidity requirements (especially Basel III), as well as examinations and proceedings of the regulators may have a negative effect upon the business activities of the Issuer (risk of legal changes, regulatory risk) Risk derived from value losses derived from the investment portfolio of the Issuer (investment portfolio risk) Risk in connection with exchange rate fluctuations due to the business activities of the Issuer outside Austria Risk that the Issuer may suffer asset damage in the wake of a monetary devaluation Risk of payment default due to the official measures of a state or the default of state debtors (country risk) Risk of stagnating or falling earnings from commission business Risk that in future the Issuer does not grow or fails to maintain its total asset level Risk that the earnings of the Issuer from trading transactions might fall owing to unfavourable market or economic conditions Risk of the recourse to the liquidity management agreements by banks in the Raiffeisen Bank Group Austria Risk of a major influence on the refinancing costs of the Issuer owing to a possible downgrading (rating change risk) Risk that rating changes could have a negative effect on the Issuer's securities The Issuer s hedging strategies may prove to be ineffective Changes in interest rates are caused by many factors beyond RLB OÖ control, and such changes can have significant adverse effects on its financial results, including net interest income Compliance with anti-money laundering, anti-corruption and anti-terrorism financing rules involves significant costs and efforts and non-compliance may have severe legal and reputational consequence
17 17 Element Section D Risks specific to the Notes D.3 Key information on the key risks that are specific to the Notes Notes may not be a suitable Investment Each potential investor in Notes must determine the suitability of that investment in light of its own circumstances. An illiquid market may restrict the ability of holders to sell their Notes There can be no assurance that a liquid secondary market for the Notes will develop or, if it does develop, that it will continue. In an illiquid market, an investor might not be able to sell his Notes at any time at fair market prices. The possibility to sell the Notes might additionally be restricted by country specific reasons. The holder of Notes is exposed to the risk of an unfavourable development of the market prices of his Notes The holder of Notes is exposed to the risk of an unfavourable development of market prices of its Notes, which materialises if the holder sells the Notes prior to the final maturity of such Notes. [Risk of early redemption at an early redemption amount If the Issuer has the right to early redeem Notes either at an early redemption amount determined by the Issuer itself as a reasonable market price by using equitable discretion or at their principal amount, a holder of such Notes bears the risk that the early redemption amount is lower than the market price and/or the principal amount of the Notes.] [Risk of early redemption A holder of the Notes is exposed to the risk that due to early redemption his investment will have a lower than expected yield. Also, the holder may only be able to reinvest on less favourable conditions as compared to the original investment.] Currency risk A holder of Notes denominated in a foreign currency is exposed to the risk, that changes in currency exchange rates may affect the yield of such Notes. [Fixed Rate Notes A holder of Fixed Rate Notes is exposed to the risk that the price of such Note falls as a result of changes in the market interest rate.] [Floating Rate Notes A holder of Floating Rate Notes is exposed to the risk of fluctuating interest rate levels and uncertain interest income. Fluctuating interest rate levels make it impossible to determine the profitability of Floating Rate Notes in advance. Floating rate Notes may include multipliers, or caps or floors, or any combination of those features. In addition, floating rate Notes may be issued as reverse floating rate Notes. The market value of such structured floating rate Notes tend to be
18 18 more volatile than the market value of conventional floating rate Notes.] [Reverse Floating Rate Notes Typically, the market value of Reverse Floating Rate Notes is more volatile than the market value of other more conventional floating rate notes based on the same reference rate (and with otherwise comparable terms) because an increase in the reference rate not only decreases the interest payable on the Notes, but may also reflect an increase in prevailing interest rates, which may further adversely affect the market value of such Notes.] [Zero Coupon Notes A holder of a Zero Coupon Note is particularly exposed to the risk that the price of such Note falls as a result of changes in the market interest rate. Prices of Zero Coupon Notes are more volatile than prices of Fixed Rate Notes and are likely to respond to a greater degree to market interest rate changes than interest bearing notes with a similar maturity.] [Obligations under subordinated Notes will only be fullfilled after unsubordinated claims of creditors have been satisfied The obligations of the Issuer under subordinated Notes are unsecured and subordinated. In the event of liquidation or bankruptcy of the Issuer, the obligations under the Notes may be satisfied only after non-subordinated claims of creditors have been satisfied so that in any such event no amounts shall be payable in respect of such obligations until the claims of all unsubordinated creditors of the Issuer shall have been satisfied in full.] Legal investment considerations may restrict certain investments The investment activities of certain investors are subject to investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal advisers especially with regard to the fact that the Notes are governed by German and/ or Austrian law to determine whether and to what extent (1) Notes are legal investments for it, (2) Notes can be used as collateral for various types of borrowing and (3) other restrictions apply to its purchase or pledge of any Notes. [Resolutions of holders Since the Terms and Conditions of the Notes provide for resolutions of holders, either to be passed in a meeting of holders or by vote taken without a meeting, a holder is subject to the risk of being outvoted by a majority resolution of the holders. As resolutions properly adopted are binding on all holders, certain rights of such holder against the Issuer under the Terms and Conditions may be amended or reduced or even cancelled.] [Holders Representative Since the Terms and Conditions of the Notes provide for the appointment of a Holders Representative, it is possible that a holder may be deprived of its individual right to pursue and
19 19 enforce his rights under the Terms and Conditions against the Issuer, such right passing to the Holders Representative who is then responsible to claim and enforce the rights of all holders.] U.S. Foreign Account Tax Compliance Withholding The Issuer and other financial institutions through which payments on the Notes are made may be required to withhold U.S. tax at a rate of 30% on all, or a portion of, payments made after 31 December 2016 in respect of (i) any Notes characterized as debt (or which are not otherwise characterized as equity and have a fixed term) for U.S. federal tax purposes that are issued after 1 July 2014 or are materially modified after that date and (ii) any such Notes characterized as equity or which do not have a fixed term for U.S. federal tax purposes, whenever issued, pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code ("FATCA") or similar law implementing an intergovernmental approach to FATCA. [Risks relating to the cover pool Payment claims of holders of Collateralised Notes are collateralised through one of two pools of cover assets and in the event of insolvency or enforcement proceedings there can be no assurance, that the cover assets of the respective cover pool for Collateralised Notes will at all times be sufficient in order to cover the obligations with respect to the Collateralised Notes and/or that replacement values are added in due time to the cover pool. Investors cannot rely that the assets of an asset pool, to which their collateralised notes are not allocated, may be used to satisfy their claims.] [Risks in relation to the Austrian Notes Trustee Act (Kuratorengesetz) A trustee (Kurator) pursuant to the Austrian Notes Trustee Act (Kuratorengesetz) may be appointed by an Austrian court upon the request of any interested party (e.g. a Holder) or upon the initiative of the competent court, for the purposes of representing the common interests of the Holders in matters concerning their collective rights.] [Holders of the Notes are exposed to the risk of a statutory loss participation Any write-off (or transformation) of specific capital instruments of a credit institution by supervisory authorities which are discussed at present does not constitute a default or credit event pursuant to the provisions of the relevant capital instrument. Accordingly, all amounts already written off would be irrevocably lost and the rights of the holders under their capital instruments would be expired regardless of any recovery of the financial situation of the credit institution. Any such legal provisions and/or regulatory actions may have significant influence on the rights of the Noteholders, in particular of subordinated Notes, possibly lead to a loss of the entire invested capital in the Notes and may have a negative impact on the market value of such Notes.] [Statutory loss absorption
20 20 The Notes may be subject to write down or conversion to equity upon the occurrence of a certain trigger event, which may result in Holders losing some or all of their investment in the Notes (Statutory loss absorption).] [Basel III Reforms Basel III Reforms as concerns Loss Absorbency at the Point of Non-Viability may negatively affect the Holders.] [Early redemption at the option of the Holders The Holders have no right to early redeem the Notes prior to their stated maturity.] [Repurchase of the Notes A repurchase of subordinated Notes by the Issuer may not be allowed by law.] Deposit guarantee scheme The Notes are not covered by the statutory deposit guarantee scheme [and are not covered by a voluntary deposit guarantee association]. [Risk of unsecured Notes In case of an insolvency of the Issuer secured creditors (such as, for example, holders of collateralised Notes) will receive payment prior to the holders of unsercured Notes.] [Credit Ratings Credit Ratings of Notes may not adequately reflect all risks of the investment in such Notes and may be suspended, downgraded or withdrawn which could have an adverse effect on the market value and trading price of the Notes.] Changes in governing law The Notes are governed by German or Austrian law, and changes in applicable laws, regulations or regulatory policies may have an adverse effect on the Issuer, the Notes and the holders of Notes. Issuer Risk Holders of Notes are exposed to the risk that the Issuer may become unable to pay its debt when it falls due. In such event a total loss of all capital invested cannot be excluded. Incidental costs Incidental costs related in particular to the purchase and sale of the Notes may have a significant impact on the profit potential of the Notes. [No gross-up Under the European Union Savings Directive, if a payment were to be made or collected through a paying agent in a state which has opted for a withholding system and an amount of, or in respect of tax were to be withheld from that payment, neither the Issuer nor any paying agent nor any other person would be obliged to pay additional amounts with respect to any Notes as a result of the imposition of such withholding tax (No gross-up).]