Depfa Acs Bank

DEPFA ACS BANK (a public unlimited company organized under the laws of Ireland with registration number 354382) U.S.$1,250,000,000 5.125% ASSET COVERED SECURITIES DUE MARCH 16, 2037 This document constitutes a Prospectus (‘‘Prospectus’’) for the purposes of Directive 2003/71/EC of the European Parliament and of the Council of November 4, 2003 (the ‘‘Prospectus Directive’’) and relevant Irish laws for giving information with regard to the issue of asset covered securities (the ‘‘Securities’’)ofDEPFA ACS BANK (the ‘‘Issuer’’). Application has been made to the Irish Financial Services Regulatory Authority, a constituent part of the Central Bank and Financial Services Authority of Ireland (the ‘‘Financial Regulator’’), as Irish competent authority under the Prospectus Directive and relevant Irish laws, for the Prospectus to be approved. Such approval relates only to the Securities which are to be admitted to trading on the regulated market of the Irish Stock Exchange Limited (the ‘‘Irish Stock Exchange’’)orany other regulated market for the purposes of Council Directive 93/22/EEC of May 10, 1993 (‘‘regulated market’’)orwhich are to be offered to the public in a member state of the European Economic Area (‘‘EEA’’). Application has been made to the Irish Stock Exchange for the Securities to be admitted to its Official List and to trading on its regulated market. This document does not constitute a prospectus for the purposes of Section 12(a)(2) of or any other provision of or rule under the U.S. Securities Act of 1933, as amended. THERE ARE CERTAIN RISKS RELATED TO THE SECURITIES WHICH INVESTORS SHOULD ENSURE THEY FULLY UNDERSTAND (SEE RISK FACTORS). For the purposes of part 6 of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the ‘‘Irish Prospectus Regulations’’), the Issuer accepts responsibility for the information contained in this Prospectus. To the best of the knowledge and belief of the Issuer (having taken all reasonable care to ensure that such is the case), such information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information. This declaration is included in this Prospectus in compliance with item 1.2 of annex IX to Commission Regulation (EC) No 809/2004 of April 29, 2004 (the ‘‘EU Prospectus Regulation’’). The Securities, in the aggregate principal amount of U.S.$1,250,000,000, will be issued by the Issuer. The Securities will bear interest from March 15, 2007 at the rate of 5.125 percent per annum, payable semi-annually in arrears on March 16 and September 16 of each year commencing on September 16, 2007 (long first coupon). Principal of and interest on the Securities are payable by the Issuer in U.S. dollars and without deduction of Irish withholding taxes, unless the Issuer shall be obligated by law to make such withholding. See ‘‘Taxation.’’ The Securities will be redeemed at par on the Maturity Date. The Securities are not redeemable at any time prior to the Maturity Date. The Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the ‘‘Securities Act’’), and may not be offered or sold within the United States of America (the ‘‘United States’’ or ‘‘U.S.’’) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the Securities are being offered and sold within the United States only to qualified institutional buyers (as defined in Rule 144A under the Securities Act (‘‘Rule 144A’’)) in compliance with Rule 144A and in a minimum denomination of $100,000 or any amount in excess thereof in integral multiples of $1,000 provided that holdings of less than $100,000 are not permitted. The Securities are also being offered and sold outside the United States in reliance on Regulation S under the Securities Act (‘‘Regulation S’’)inaminimum denomination of $100,000 or any amount in excess thereof in integral multiples of $1,000 provided that holdings of less than $100,000 are not permitted. See ‘‘Underwriting.’’ For a description of certain restrictions on resale or transfer, see ‘‘Transfer Restrictions.’’ PRICE: 98.389%

The Securities will be represented by two permanent global certificates to be delivered on or about March 15, 2007 into the book-entry facilities of Clearstream Banking AG (‘‘Clearstream Frankfurt’’) and The Depository Trust Company (‘‘DTC’’), against payment therefor in U.S. dollars in immediately available funds. The permanent global certificates will not be exchangeable for definitive securities. Securities sold in offshore transactions in reliance on Regulation S will be represented by a permanent global certificate in bearer form, to be held by Clearstream Frankfurt for the accounts of financial institutions that are Clearstream Frankfurt accountholders or for the account of Euroclear Bank S.A./N.V., as operator of the Euroclear System (‘‘Euroclear’’) and Clearstream Banking, socie´te´ anonyme (‘‘Clearstream, Luxembourg’’). Securities sold in reliance on Rule 144A will be represented by a separate permanent global certificate in registered form, to be held by Deutsche Bank Trust Company Americas, as custodian for DTC. Upon approval of this Prospectus by the Financial Regulator, this Prospectus will be filed with the Registrar of Companies in Ireland in accordance with regulation 38(1)(b) of the Irish Prospectus Regulations. Joint Bookrunners Goldman Sachs International Merrill Lynch & Co. Morgan Stanley

Co-Lead Managers Barclays Capital BNP PARIBAS Citigroup Credit Suisse Deutsche Bank Dresdner Kleinwort JPMorgan March 13, 2007 Investors should note that, save as indicated below, all the financial information in or incorporated by reference into this Prospectus is prepared and presented in accordance with International Financial Reporting Standards (‘‘IFRS’’). The financial statements of the Issuer for the year ended December 31, 2004, as incorporated by reference into this Prospectus as set out in ‘‘Information Incorporated by Reference’’, were prepared and presented in accordance with Irish generally accepted accounting principles (‘‘GAAP’’). Significant differences in GAAP reporting may exist among Irish GAAP, U.S. GAAP and IFRS. Details of the transition from Irish GAAP to IFRS were provided in the financial statements for the year ended December 31, 2005. Investors should be aware that such differences might be material in their interpretation of the financial information contained herein or incorporated by reference into this Prospectus if, for example, comparisons are made between the accounts contained herein or incorporated by reference into this Prospectus and accounts which are not presented in Irish GAAP or, as applicable, IFRS. Potential investors should consult their own professional advisers for an understanding of the differences between Irish GAAP and other GAAP reporting and IFRS.

Unless the context otherwise requires, references in this Prospectus to the ‘‘Group’’ are to DEPFA BANK plc, together with its consolidated subsidiaries, including the Issuer and DEPFA Deutsche Pfandbriefbank AG. See ‘‘Prospectus Summary.’’

Notice to New Hampshire Residents 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 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 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.

No person has been authorized to give any information or to make any representation other than those contained in this Prospectus and, if given or made, such information or representation must not be relied upon as having been authorized. This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the Securities or an offer to sell or the solicitation of any offer to buy the Securities in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer since the date hereof or that the information contained herein is correct as of any time subsequent to its date.

The Securities are expected on issue to be rated Aaa by Moody’s Investors Service Ltd (‘‘Moody’s’’) and AAA by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (‘‘S&P’’) and Fitch Ratings Limited (‘‘Fitch Ratings’’). A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating organisation.

The distribution of this Prospectus and the offering and sale of the Securities in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes are required by the Issuer and the Underwriters (as deﬁned in ‘‘Underwriting’’)toinform themselves about and to observe any such restrictions. For a further description of certain restrictions on offering, sales and transfers of the Securities, see ‘‘Underwriting’’ and ‘‘Transfer Restrictions.’’

Notwithstanding anything to the contrary contained herein, a prospective investor (and each employee, representative, or other agent of a prospective investor) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions described in this Prospectus and all materials of any kind that are provided to the prospective investor relating to such tax treatment and tax structure (as such terms are deﬁned in U.S. Treasury Regulation section 1.6011-4). This authorization of tax disclosure is retroactively effective to the commencement of discussions with prospective investors regarding the transactions contemplated herein.

In this Prospectus, references to ‘‘E’’ or ‘‘Euro’’ are to the common currency introduced at the start of the third stage of the European economic and monetary union pursuant to the Treaty establishing the European Community as amended, references to ‘‘U.S.$’’, ‘‘$’’, ‘‘USD’’ and ‘‘U.S. dollars’’ are to United States dollars, references to ‘‘Yen’’ and

ii ‘‘¥’’ are to Japanese Yen, references to ‘‘CHF’’ are to Swiss Francs and references to ‘‘Sterling’’, ‘‘GBP’’ and ‘‘£’’ are to the United Kingdom pounds sterling.

For the purposes of this Prospectus, certain U.S. dollar amounts, certain Swiss Franc amounts, certain Sterling amounts, certain Canadian dollar amounts, certain Japanese Yen amounts and certain Swedish Kroner amounts have been stated in Euro by taking the USD/Euro ECB Fixing Rate, the CHF/Euro Fixing Rate, the GBP/Euro Fixing Rate, the CAD/Euro Fixing Rate, the JPY/Euro Fixing Rate and the SEK/Euro Fixing Rate respectively, each found on Reuters page ‘‘ECB37’’.

INFORMATION INCORPORATED BY REFERENCE

The following information which has been ﬁled with the Irish Stock Exchange and the Financial Regulator is hereby incorporated by reference into this Prospectus:

(a) the ﬁnancial statements of the Issuer for the year ended December 31, 2004 comprising the balance sheet, proﬁt and loss account, accounting policies and explanatory notes together with the directors’ report thereon and the independent auditor’s report to the members of the Issuer dated February 28, 2005 of PricewaterhouseCoopers thereon;

(b) the ﬁnancial statements of the Issuer for the year ended December 31, 2005 comprising the balance sheet, income statement, statement of changes in equity, cash ﬂow statement, accounting policies and explanatory notes together with the directors’ report thereon and the independent auditor’s report to the members of the Issuer dated April 12, 2006 of PricewaterhouseCoopers thereon.

As far as the Issuer is aware and able to ascertain, no facts have been omitted which would render the reproduced information at (a) or (b) above inaccurate or misleading.

The ﬁnancial statements referred to at (a) and (b) above have been reported on by PricewaterhouseCoopers, a member of the Institute of Chartered Accountants in Ireland of George’s Quay, Dublin 2, Ireland as auditors of the Issuer.

iii TABLE OF CONTENTS

Page

PROSPECTUS SUMMARY ...... 1 USE OF PROCEEDS ...... 5 RISK FACTORS...... 6 DESCRIPTION OF THE ISSUER AND THE GROUP...... 7 CHARACTERISTICS OF THE POOL/OVERCOLLATERALIZATION ...... 10 BOARD OF DIRECTORS AND MANAGEMENT OF THE ISSUER...... 13 ASSET LIABILITY MANAGEMENT AT THE GROUP AND ISSUER LEVELS...... 14 THE RISK MANAGEMENT SYSTEM OF THE GROUP AND THE ISSUER ...... 16 SUMMARY BALANCE SHEET REGARDING THE ISSUER...... 22 CHARACTERISTICS OF IRISH ASSET COVERED SECURITIES...... 23 COVER ASSETS POOL ...... 24 THE 2007 BILL: LEGISLATIVE PROPOSALS TO AMEND THE ACT...... 30 RESTRICTIONS ON THE ACTIVITIES OF AN INSTITUTION...... 32 THE COVER-ASSETS MONITOR...... 35 INSOLVENCY OF INSTITUTIONS...... 39 SUPERVISION AND REGULATION ...... 43 REGISTRATION OF INSTITUTIONS/REVOCATION OF REGISTRATION ...... 45 DESCRIPTION OF SECURITIES...... 46 CLEARING AND SETTLEMENT...... 51 GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES ...... 54 TRANSFER RESTRICTIONS ...... 56 CERTAIN ERISA CONSIDERATIONS ...... 58 TAXATION...... 60 UNDERWRITING ...... 64 GENERAL INFORMATION ...... 67 APPENDIX: DEPFA ACS BANK’S UNAUDITED INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 ALONG WITH COMPARATIVE INCOME STATEMENT FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2005 AND UNAUDITED INTERIM BALANCE SHEET AS AT SEPTEMBER 30, 2006 ALONG WITH COMPARATIVE BALANCE SHEET AS AT DECEMBER 31, 2005...... F-2

IN CONNECTION WITH THE ISSUE OF THE SECURITIES, GOLDMAN SACHS INTERNATIONAL, MERRILL LYNCH INTERNATIONAL AND MORGAN STANLEY & CO. INTERNATIONAL LIMITED (THE ‘‘STABILIZING MANAGERS’’) (OR PERSONS ACTING ON BEHALF OF ALL OR ANY OF THE STABILIZING MANAGERS) MAY OVER-ALLOT SECURITIES (PROVIDED THAT THE AGGREGATE PRINCIPAL AMOUNT OF SECURITIES ALLOTTED DOES NOT EXCEED 105 PERCENT OF THE AGGREGATE PRINCIPAL AMOUNT OF THE SECURITIES) OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE SECURITIES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THE STABILIZING MANAGERS (OR PERSONS ACTING ON BEHALF OF ALL OR ANY OF THE STABILIZING MANAGERS) WILL UNDERTAKE STABILIZATION ACTION. ANY STABILIZATION ACTION MAY BEGIN ON OR AFTER THE CLOSING DATE AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE OF THE SECURITIES AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE SECURITIES.

iv PROSPECTUS SUMMARY

This summary must be read as an introduction to this Prospectus and any decision to invest in the Securities should be based on a consideration of the Prospectus as a whole, including the documents incorporated by reference. Following the implementation of the relevant provisions of the Prospectus Directive in each member state of the EEA, civil liability attaches to the person(s) who have responsibility for this summary, including any translation thereof, but only if it is misleading, inaccurate or inconsistent when read together with the other parts of this Prospectus. Where a claim relating to the information contained in this Prospectus is brought before a court in a member state of the EEA, the plaintiff investor might, under the national legislation of the member state where the claim is brought, be required to bear the costs of translating the Prospectus before the legal proceedings are initiated.

Words and expressions not defined in this summary but defined elsewhere in this Prospectus have the same meanings in this summary as elsewhere defined.

The following summary is qualiﬁed in its entirety by the more detailed information appearing elsewhere in this Prospectus.

DEPFA ACS BANK DEPFA ACS BANK (the ‘‘Issuer’’) was incorporated in Ireland on March 13, 2002 as a public limited company under the name of DePfa ACS plc with registration number 354382. It was subsequently re-registered as a public unlimited company under the Irish Companies Acts, 1963 to 2003, changed its name to DEPFA ACS BANK, obtained an Irish banking license under the Irish Central Bank Act, 1971 (as amended) and was registered as a designated public credit institution under the Asset Covered Securities Act, 2001, as amended by the Central Bank and Financial Services Authority of Ireland Acts, 2003 and 2004 (the ‘‘Act’’). It is a wholly- owned subsidiary of DEPFA BANK plc, the largest Irish incorporated bank in terms of consolidated assets and the parent company of the Group, which provides lending and ﬁnancial services to governments and governmental entities, primarily in Europe but also in North America and Asia.

The Issuer’s purpose is to issue Asset Covered Securities (as defined below) for the purpose of financing loans and other credits made to public sector entities. Such loans and other credits may be made directly by the Issuer or may be purchased from DEPFA BANK plc and its affiliates or third parties. The Issuer’s principal executive and registered offices are located at 1 Commons Street, Dublin 1, Ireland. The telephone number of the registered office is +353 (0)1 792 2222.

THE DEPFA BANK GROUP DEPFA BANK plc acts as parent company of the public ﬁnance group, which includes the Issuer as well as DEPFA Deutsche Pfandbriefbank AG and DEPFA Investment Bank Ltd. (the ‘‘Group’’). It holds a universal banking license from the Financial Regulator under the Irish Central Bank Act, 1971 (as amended). DEPFA BANK plc’s shares are listed and traded on the Frankfurt Stock Exchange.

The Group’s ﬁnancing activities by means of European covered bonds have been conducted most recently by two subsidiaries. DEPFA Deutsche Pfandbriefbank AG continues to issue German Pfandbriefe in accordance with the German Pfandbrief Act (Pfandbriefgesetz), and the Issuer continues to issue Asset Covered Securities (as deﬁned below) in accordance with the Act.

The Issuer is an unlimited company. There is no limit on the liability of a then-current member (registered shareholder of record) of an unlimited company to contribute to that company in an insolvent liquidation of the company to the extent that the company’s assets are insufﬁcient to meet its liabilities. In that event, the liquidator of the unlimited company or the court seeks contributions from each of the members. A company’s unlimited status does not confer on the creditors of the company the right to seek payment of the company’s liabilities from the company’s members or to seek contributions for the company from the members in the event of the unlimited company becoming insolvent or otherwise. This right rests with the liquidator or the court on an insolvent winding-up. DEPFA BANK plc is a member of the Issuer at the date of this Prospectus and the other members are all either direct or indirect wholly owned subsidiaries of DEPFA BANK plc. See ‘‘Insolvency of Institutions – Consequences of Issuer’s Status as Unlimited Company’’ for further information.

1 IRISH ASSET COVERED SECURITIES The Act introduced into Irish law a framework for the issuance of asset covered securities. Asset covered securities can only be issued by Irish credit institutions that are registered under the Act and restrict their principal activities to public sector or property financing. Those credit institutions, such as the Issuer, that are registered under the Act and restrict their principal activities to public sector financing, are called designated public credit institutions (‘‘Institutions’’). The Act provides, among other things, for the registration of eligible credit institutions as Institutions, the maintenance by Institutions of a defined pool of prescribed public credit assets and limited classes of other assets, known as a cover assets pool (‘‘Pool’’) and the issuance by Institutions of certain asset covered securities secured by a statutory preference under the Act on the assets (‘‘Cover Assets’’) comprised in the Pool. Asset covered securities issued by Institutions in accordance with the Act are called public credit covered securities (‘‘Asset Covered Securities’’). The Act also makes provision for the inclusion in the Pool as Cover Assets of certain hedging contracts which are called cover assets hedge contracts. The Act also varies the general provisions of Irish insolvency law which would otherwise apply with respect to Cover Assets and Asset Covered Securities on the insolvency of an Institution and replaces them with a special insolvency regime applicable to Institutions.

The Act further provides for the supervision and regulation of Institutions by the Financial Regulator, for the role of the cover-assets monitor (the ‘‘Monitor’’)inrespect of each Institution, for asset/liability management between the Pool and Asset Covered Securities and, in certain circumstances, for the role with respect to an Institution, its Pool and Asset Covered Securities of the National Treasury Management Agency or a manager appointed by the Financial Regulator.

The Securities offered hereby are senior obligations of the Issuer and rank equally with all other Asset Covered Securities which have been or may be issued by the Issuer. See ‘‘Characteristics of Irish Asset Covered Securities’’ for further information.

On February 21, 2007, the Government of Ireland presented legislative proposals to amend the Act under the Asset Covered Securities (Amendment) Bill 2007. For further information, see ‘‘The 2007 Bill: Legislative proposals to amend the Act’’.

2 THIS OFFERING

Issuer DEPFA ACS BANK.

Securities being Offered 5.125 percent Asset Covered Securities due March 16, 2037 in the aggregate principal amount of $1,250,000,000 (the ‘‘Securities’’).

Offer Price 98.389 percent.

Currency U.S. dollars.

Issue Date March 15, 2007.

Use of Proceeds The Issuer expects to use the net proceeds from the sale of the Securities offered hereby to ﬁnance, reﬁnance or make or purchase U.S. dollar- denominated loans and other credits made to public sector entities in accordance with the Act, including the repayment of intra-group indebtedness arising from the acquisition of such loans and credits. See ‘‘Characteristics of Irish Asset Covered Securities.’’

Maturity and Redemption The Securities will mature on March 16, 2037 (the ‘‘Maturity Date’’) and will be redeemed at par on such date. The Securities are not redeemable prior to maturity.

Interest The Securities will bear interest from March 15, 2007 at the rate of 5.125 percent per annum, payable semi-annually in arrears on March 16 and September 16 of each year, commencing on September 16, 2007 (long ﬁrst coupon).

Status The Securities will be direct, unconditional and senior obligations of the Issuer and rank equally with all other Asset Covered Securities issued or to be issued by the Issuer. The Securities will qualify as Asset Covered Securities for the purposes of the Act and be secured by a statutory preference on the Pool.

Listing Application has been made to list the Securities on the Ofﬁcial List of the Irish Stock Exchange and to admit them to trading on the regulated market of the Irish Stock Exchange.

Governing Law The Securities will be governed by, and construed in accordance with, the laws of Ireland.

Selling Restrictions There are restrictions on the offer, sale and delivery of Securities in the United States, the United Kingdom, Japan, Italy and Ireland. The Securities are being offered and sold within the United States only to qualiﬁed institutional buyers in accordance with Rule 144A and outside the United States in offshore transactions to non-U.S. persons in accordance with Regulation S. For a description of these and other selling restrictions, see ‘‘Underwriting.’’

Settlement The Securities will be represented by two permanent global certificates which will not be exchangeable for definitive securities. Securities sold in offshore transactions in reliance on Regulation S will be represented by a permanent global certificate in bearer form to be held by Clearstream Frankfurt for the accounts of financial institutions that are Clearstream Frankfurt Accountholders, including Euroclear and Clearstream, Luxembourg. Securities sold in reliance on Rule 144A will be represented by a separate permanent global certificate in registered form,

3 to be held by Deutsche Bank Trust Company Americas, as custodian for DTC.

It is expected that delivery of the Securities will be made on or about March 15, 2007 through the book-entry facilities of Clearstream Frankfurt (including its accountholders Euroclear and Clearstream, Luxembourg) and DTC, against payment therefor in U.S. dollars in immediately available funds.

Denominations The Securities will be offered and sold outside the United States in reliance on Regulation S in a minimum denomination of $100,000 or any amount in excess thereof in integral multiples of $1,000 provided that holdings of less than $100,000 are not permitted. The Securities will be offered and sold within the United States only to qualiﬁed institutional buyers in compliance with Rule 144A in a minimum denomination of $100,000 or any amount in excess thereof in integral multiples of $1,000 provided that holdings of less than $100,000 are not permitted.

Risk Factors There are certain risks relating to this issue of Securities by the Issuer which investors should ensure they fully understand.

Events of Default None.

Cross Default None.

Guarantor None.

Indicative Yield 5.232 percent payable semi-annually in arrears. The indicative yield is calculated on the date of this Prospectus on the basis of the Offer Price. It is not an indication of future yield.

4 USE OF PROCEEDS

The net proceeds from the sale of the Securities offered hereby (before expenses and accrued interest, but after deducting underwriting fees) are estimated at $1,226,425,000. The Issuer expects to use these proceeds to ﬁnance, reﬁnance or make or purchase U.S. dollar-denominated loans and other credits made to public sector entities in accordance with the Act, including the repayment of intra-group indebtedness arising from the acquisition of such loans and credits. See ‘‘Characteristics of Irish Asset Covered Securities.’’

5 RISK FACTORS

The Issuer believes that the following factors may affect its ability to fulfil its obligations under the Securities or should otherwise be considered for the purpose of assessing the market risks associated with the Securities. Many of these factors are contingencies which may or may not occur and the Issuer is not in a position to express a view on the likelihood of any such contingency occurring. The inability of the Issuer to pay principal or interest in connection with any Securities may occur for other reasons which are as yet unknown and the Issuer does not represent that the statements below regarding the risks of holding any Securities are exhaustive. Prospective investors should also read the detailed information set out elsewhere in this Prospectus and reach their own views prior to making any investment decision. Irish Covered Security Legislation Untested The Act is a recent piece of legislation. The protection afforded to the holders of the Securities by means of a preference on the Cover Assets included in the Issuer’s Pool is based only on the Act. The first issue of Asset Covered Securities was issued by the Issuer during March 2003. Since March 2003 the Issuer has issued E45.087 billion Asset Covered Securities before the date of the Securities offered hereby, and three other issuers have joined the Irish covered bond market. Nevertheless there is still only a limited track record for Asset Covered Securities issued in accordance with the Act or in relation to the operation of the Act with respect to the Issuer or other credit institutions registered under the Act. Legislative Proposals to Amend the Act On February 21, 2007, the Government of Ireland presented to the Irish legislature proposals to amend the Act under the Asset Covered Securities (Amendment) Bill 2007 (the ‘‘2007 Bill’’). The changes to the Act proposed under the 2007 Bill which are applicable to Institutions relate for the most part to changes required to ensure that Asset Covered Securities will qualify as covered bonds for the purposes of the risk weighting and certain other provisions of Directive 2006/48/EC of June 14, 2006 (the ‘‘Recast Codified Banking Directive’’); technical changes which clarify provisions of the Act or facilitate the more flexible operation of requirements of the Act; and certain new features. No assurance can be given by the Issuer that the changes to the Act proposed under the 2007 Bill will be enacted in law, whether those proposals will be amended or whether the changes provided for in the final 2007 Bill, if enacted in law, will have any adverse consequences for the Issuer’s business or the interests of investors in the Securities. However, if the 2007 Bill is enacted in its current form, the Issuer believes that overall the changes to the Act proposed in the 2007 Bill should be advantageous to the Irish covered bond market as a whole. In particular, the Issuer believes that it is in investors’ interests that the Act is amended to ensure that the Asset Covered Securities qualify as covered bonds for the purposes of the Recast Codified Banking Directive. Absence of a Market for the Securities As indicated above, the first issue of Asset Covered Securities, which was by the Issuer, was in March 2003 and accordingly, there is a limited trading history for Asset Covered Securities issued under the Act. No assurance can be given as to the continuation or effectiveness of any market-making activity. In addition, no assurance can be given as to the liquidity of, or the continuation of a trading market for the Securities contemplated by this Prospectus. The transferability of the Securities in the secondary market in a minimum denomination of $100,000 and integral multiples of $1,000 in excess thereof may adversely affect liquidity in the Securities. Other Risks The past performance of the Securities or other Asset Covered Securities issued by the Issuer may not be a reliable guide to future performance of the Securities. The Securities may fall as well as rise in value. Income or gains from Securities may fluctuate in accordance with market conditions and taxation arrangements. Where Securities are denominated in a currency other than the reference currency used by the investor, changes in currency exchange rates may have an adverse effect on the value, price or income of the Securities. It may be difficult for investors in Securities to sell or realise the Securities and/or obtain reliable information about their value or the extent of the risks to which they are exposed (other than as set out in this Prospectus).

6 DESCRIPTION OF THE ISSUER AND THE GROUP

The Issuer is a wholly-owned subsidiary of DEPFA BANK plc, which is the parent company of the DEPFA BANK group of companies comprising DEPFA BANK plc and its consolidated subsidiaries (the ‘‘Group’’). The Group is a specialist provider of financial services to public sector clients. The Group has a presence in the following cities throughout its network of branches, agencies, representative offices and subsidiaries: Amsterdam, Chicago, Copenhagen, Dublin, Frankfurt am Main, Hong Kong, London, Madrid, Milan, New York, Nicosia, Paris, Rome, San Francisco, Tokyo and Warsaw. The Group provides a broad range of products and services to public sector entities, from government budget financing and financing of infrastructure projects, to the placing of public sector assets and advisory services. DEPFA BANK plc is the largest Irish incorporated bank in terms of consolidated assets and the parent company of the Group, which provides loans and financial services to governments and governmental entities, primarily in Europe but also in North America and Asia. DEPFA BANK plc’s shares are listed and traded on the Frankfurt Stock Exchange. The principal subsidiaries of DEPFA BANK plc and their locations are as follows:

DEPFA Deutsche Pfandbriefbank AG, Frankfurt DEPFA Deutsche Pfandbriefbank AG (the ‘‘Pfandbriefbank’’)isawholly owned subsidiary of DEPFA BANK plc. It is governed principally by the German Pfandbrief Act and concentrates purely on public sector lending.

DEPFA Investment Bank Ltd., Nicosia DEPFA Investment Bank Ltd. is responsible for the Group’s public sector business outside the G-7 and the non-G-7 western European countries, as well as for Asia. As such, it is responsible for advisory services and for any ﬁnancing provided to this customer base. The major focus is on sovereign public sector investments in Central and Eastern Europe.

DEPFA ACS BANK, Dublin The Issuer is a public unlimited company wholly owned by DEPFA BANK plc, the primary purpose of which is to provide funding to the Group by issuing Asset Covered Securities in accordance with the Act. The Issuer was incorporated with registered number 354382 in Ireland on March 13, 2002 as a public limited company under the Irish Companies Acts, 1963 to 2001 under the name of DePfa ACS plc. It was subsequently re-registered as a public unlimited company and changed its name to DEPFA ACS BANK. At the date of this Prospectus, the Issuer is operating in accordance with its constitutive documents, its Memorandum and Articles of Association. The Issuer has a banking license issued under the Irish Central Bank Act, 1971 (as amended) and is supervised by the Financial Regulator. It also has the status of a designated public credit institution under the Act which authorizes it to issue Asset Covered Securities in accordance with the Act. The registered office of the Issuer is 1 Commons Street, Dublin 1, Ireland. The telephone number of the registered office is +353 (0)1 792 2222. The authorized share capital of the Issuer at the date of the Prospectus is E1,000,000,000 divided into 1,000,000,000 ordinary shares of E1 each of which 510,000,000 shares are issued. DEPFA BANK plc is the beneficial owner of 100 percent of the issued share capital of the Issuer. In addition, as of the date of this Prospectus the Issuer has outstanding E190,000,000 of upper Tier 2 perpetual subordinated debt and E255,000,000 of lower Tier 2 subordinated term debt. The Issuer is a directly held wholly owned subsidiary of DEPFA BANK plc and as such is under the control of DEPFA BANK plc. At the date of this Prospectus, the Issuer is not aware of any arrangement the operation of which may at a date subsequent to the date of this Prospectus result in a change in control of the Issuer. No specific measures have been put in place by the Issuer to ensure that DEPFA BANK plc’s control of the Issuer is not abused. However, the Issuer and DEPFA BANK plc are both regulated and supervised by the Financial Regulator under the Irish Banking Code (see Supervision and Regulation) and two of the Issuer’s directors are not, at the date of this Prospectus, employees of any member of

7 the Group. However, one of those two Directors is a non-executive director of DEPFA BANK plc (see Board of Directors and Management of the Issuer). The Issuer has no subsidiaries or subsidiary undertakings.

The Business of the Issuer The Issuer was established with the purpose of issuing Asset Covered Securities in order to finance public sector assets. Accordingly, the core activities of the Issuer are the acquisition of public sector assets and the issuance and ongoing administration of Asset Covered Securities, such as the Securities, in accordance with the Act. The issue of Asset Covered Securities provides the Group with another source of long term funding and assists the Group’s liquidity management and improvement of funding costs. The Issuer has acquired from members of the Group, or itself originated, a portfolio of assets with an aggregate outstanding principal amount of approximately E55.62 billion as of January 31, 2007 in connection with the issuance of Asset Covered Securities. When the Issuer first started to issue Asset Covered Securities, asset purchases were primarily made from other members of the Group. However, direct asset origination by the Issuer is becoming increasingly predominant over the refinancing of the existing assets on DEPFA BANK plc’s balance sheet. Set out below is a table of benchmark Asset Covered Securities issued by the Issuer since its establishment including two offerings of benchmark Asset Covered Securities pursuant to the EMTN Programme referred to below:

Issue Issue Amount EUR Issue Maturity ISIN Code Currency (in millions) Equivalent* Coupon Date Date

DE00077963757 ...... EUR 4,000 4,000 3.250% March 6, 2003 April 15, 2008 Increase DE00077963757 ...... EUR 1,000 1,000 3.250% May 2, 2003 April 15, 2008 DE0007009482 ...... EUR 3,500 3,500 3.875% May 30, 2003 July 15, 2013 DE0008026071 ...... USD 1,250 951 3.625% October 29, 2003 October 29, 2008 DE000A0DALH4 ...... EUR 3,000 3,000 4.375% July 21, 2004 January 15, 2015 DE000A0DXH13...... EUR 3,000 3,000 3.250% January 26, 2005 February 15, 2012 DE000A0D24M9...... USD 1,250 951 4.250% May 19, 2005 August 16, 2010 DE000A0GHGN0...... USD 1,000 761 4.875% October 28, 2005 October 28, 2015 DE000A0GPMR2...... EUR 2,000 2,000 3.500% March 16, 2006 March 16, 2011† DE000A0GUFJ3...... USD 1,000 761 5.500% June 28, 2006 June 28, 2011 DE000A0G1RB8 ...... EUR 2,000 2,000 3.875% November 14, 2006 November 14, 2016†

* European Central Bank Currency Exchange Rate as at February 15, 2007. † In contrast to the other benchmark Asset Covered Securities issues, this benchmark Asset Covered Securities issue was not issued as a stand alone issue but off the EMTN Programme referred to below. Effective August 1, 2003, the Issuer joined DEPFA BANK plc as a co-issuer on its euro medium-term note programme (the ‘‘EMTN Programme’’), and since then the Issuer has issued E13.661 billion of Asset Covered Securities pursuant to the EMTN Programme including the above-mentioned benchmark Asset Covered Securities issues with ISIN Codes DE000A0GPMR2 and DE000A0G1RB8. On the Issue Date of the Securities, the Issuer will issue a further E40 million of Asset Covered Securities pursuant to the EMTN Programme. In addition, the Issuer has issued E4.284 billion of registered Asset Covered Securities on a private placement stand alone basis since April 2004. Effective December 17, 2004, the Issuer joined DEPFA BANK plc as a co-issuer on its euro commercial paper and certiﬁcate of deposit programme (the ‘‘ECP Programme’’). As of the date of this Prospectus, the Issuer has not issued any euro commercial paper but has issued E96.85 million of certiﬁcates of deposit pursuant to the ECP Programme. The Issuer’s issuance of Asset Covered Securities is driven by capital market conditions and opportunities. Subject to market conditions, the Issuer expects to issue at least two benchmark issues annually with maturities between three and ten years and intends to issue further Asset Covered Securities under the EMTN Programme and on a private placement stand alone basis. Asset Covered Securities are an important part of the Group’s funding strategy.

8 The selection of assets for acquisition by the Issuer and inclusion in the Pool will largely be determined by the requirements of the Act and the specific characteristics of the Asset Covered Securities to be issued in the future. Once the features of a forthcoming issue have been determined according to market conditions, the composition of the Pool will be determined by the requirements of the Act and influenced by rating quality standards, diversification objectives and asset liability management considerations. See ‘‘Cover Assets Pool – Financial Matching Criteria for the Pool and Asset Covered Securities.’’ The Issuer is an unlimited company. There is no limit on the liability of the then-current members (the registered shareholders of record) of the Issuer, as an unlimited company under Irish law, to contribute to the Issuer in an insolvent liquidation of the Issuer to the extent that the Issuer’s assets are insufficient to meet its liabilities. In that event, the liquidator of the Issuer or the court has the right to seek contribution from each of the members. The Issuer’s unlimited status does not confer on the creditors of the Issuer the right to seek payment of the Issuer’s liabilities from the Issuer’s members or to seek contribution for the Issuer from the members in the event of the Issuer becoming insolvent or otherwise. This right rests with the liquidator of the Issuer or the court on an insolvent winding-up. See ‘‘Insolvency of Institutions’’ for further information.

9 CHARACTERISTICS OF THE POOL/OVERCOLLATERALIZATION

Set forth below is a table showing, as of the date of this Prospectus, the countries (other than assets relating to the European Investment Bank (‘‘EIB’’)) where the public credit assets included in the Pool are located, the number of public credit assets located in those countries, the nominal amount of the public credit assets in Euro and, based on the nominal amount of those assets outstanding, the percentage of public credit assets located in those countries. In relation to the location of public credit assets, see ‘‘Cover Assets Pool – Location Requirements.’’ All the public credit assets included in the Pool at the date of this Prospectus are denominated in Euro, U.S. dollars, Sterling, Swedish Kroner, Swiss francs, Canadian dollars or Japanese Yen. As of the date of this Prospectus, there are a total of 50 cross currency swaps and 254 interest rate swaps in the Pool, each of which constitutes a cover assets hedge contract. See ‘‘Cover Assets Pool – Cover Assets Hedge Contracts.’’

Aggregate Number of Nominal Country/EIB Assets Amount* Percentage

Germany...... 175 12,690.86 25.58% Italy ...... 81 7,155.41 14.43% Spain ...... 146 6,963.41 14.04% USA ...... 154 5,413.79 10.92% Netherlands ...... 173 3,306.01 6.67% France...... 85 2,240.23 4.52% Belgium...... 16 1,629.35 3.29% Austria...... 20 1,513.71 3.05% Greece ...... 10 1,497.02 3.02% Finland ...... 48 1,026.42 2.07% United Kingdom ...... 44 992.03 2.00% Portugal...... 12 955.52 1.93% Canada ...... 23 950.84 1.92% Poland ...... 11 782.90 1.58% Switzerland ...... 7 547.12 1.10% Hungary ...... 11 474.28 0.96% Sweden...... 12 395.59 0.80% Iceland...... 16 312.40 0.63% Ireland ...... 42 280.28 0.57% Malta ...... 2 189.19 0.38% EIB...... 7 149.06 0.30% Denmark...... 3 48.59 0.10% Japan ...... 1 25.35 0.05% Slovenia ...... 1 25.00 0.05% Czech ...... 2 15.22 0.03% Cyprus...... 1 5.84 0.01% TOTAL ...... 1,103 49,585.42 100.00%

*Aggregate Nominal Amount in millions of Euro.

Set forth below is a table showing, as of the date of this Prospectus, the lowest available external credit rating (or, where no external credit rating is available, the Issuer’s internal rating) of the public credit assets included in the Pool and the number of public credit assets having such external or internal rating. The table also shows the nominal outstanding amount of the public credit assets in Euro and, based on the principal amount of those assets outstanding, the percentage of public credit assets having such rating. In determining the external ratings for the public credit assets, the Issuer has used ratings applied by Moody’s, S&P and Fitch Ratings. For further information on the Issuer’s internal rating system, see ‘‘The Risk Management System of the Group and the Issuer – Measurement and Management of the Various Types of Risk – Credit Risk.’’ The number of assets to which the Issuer has applied its own ratings is shown in the Internal Ratings column.

10 Aggregate Internal Number of Nominal External Rating** Ratings Assets Amount* Percentage

Aaa/AAA ...... 8 456 18,521.43 37.35% Aa1/AA+...... 34 95 7,978.22 16.09% Aa2/AA ...... 57 114 4,119.16 8.31% Aa3/AA-...... 64 207 8,604.59 17.35% A1/A+...... 75 126 5,975.58 12.05% A2/A...... 30 52 2,305.02 4.65% A3/A- ...... 19 28 708.45 1.43% Baa1/BBB+ ...... 0 22 1,257.18 2.54% Baa2/BBB ...... 0 3 115.79 0.23% TOTAL 287 1,103 49,585.42 100.00%

*Aggregate Nominal Amount in millions of Euro. **The external ratings are comprised of ratings available from Moody’s, S&P and Fitch Ratings.

The public credit assets described above are those that are contained in the Pool as of the date of this Prospectus. The Pool may also contain substitution assets and cover assets hedge contracts subject to the limitations provided for in the Act. See ‘‘Cover Assets Pool – Substitution Assets, – Restrictions on Inclusion of Substitution Assets in the Pool’’ and ‘‘– Cover Assets Hedge Contracts.’’ The Act permits the composition of the Pool to be dynamic and does not require it to be static. See ‘‘Cover Assets Pool.’’ Accordingly, the composition of public credit assets (and other permitted assets) comprised in the Pool (and the information set forth in the above table) may change from time to time after the date hereof in accordance with the Act. A public credit asset may only be included in or removed from the Pool if the Monitor agrees to its inclusion or removal and it is permitted by the Act. Accordingly, any alterations to the composition of the Pool as described above will require the Monitor’s approval. See ‘‘Cover Assets Pool.’’ As regards the asset/liability requirements of the Act in respect of the Pool and Asset Covered Securities, see ‘‘Cover Assets Pool – Financial Matching Criteria for the Pool and Asset Covered Securities.’’ In relation to Overcollateralization of the Pool with respect to the Securities, see ‘‘The Cover-Assets Monitor – Maintenance of Overcollateralization.’’

The terms and conditions applicable to the Securities require the Issuer to maintain Overcollateralization of the Pool with respect to all of the Issuer’s Asset Covered Securities in issue from time to time at a minimum level of ﬁve percent. An independent entity, AIB International Financial Services Limited (the Monitor appointed in respect of the Issuer), has agreed in the Cover-Assets Monitor Agreement to monitor compliance by the Issuer with its undertaking regarding the level of Overcollateralization. See ‘‘The Cover-Assets Monitor – Maintenance of Overcollateralization.’’ The Monitor is also required by regulations made by the Financial Regulator under the Act to have regard to contractually agreed levels of Overcollateralization and to monitor the relevant Institution’s observance of those levels.

In this context, ‘‘Overcollateralization’’ of the Pool with respect to Asset Covered Securities means the amount by which the prudent market value of the Pool, see ‘‘Cover Assets Pool – Valuation of Assets Held by an Institution,’’ exceeds the total outstanding principal amount of Asset Covered Securities issued by the relevant Institution. See ‘‘Cover Assets Pool – Financial Matching Criteria for the Pool and Asset Covered Securities.’’

Since the Monitor must have regard to contractual undertakings with respect to Overcollateralization when performing its functions under the Act, the Monitor could not agree to the removal or substitution of public credit assets or substitution assets from the Pool if the result of such removal or substitution was that the then required level of Overcollateralization would not be satisﬁed. In addition, the Monitor is required to take reasonable steps to verify compliance by the Issuer with contractual undertakings in respect of Overcollateralization before the issue of any Asset Covered Securities, including the Securities.

The 2007 Bill proposals provide for a minimum mandatory level of ‘‘regulatory overcollateralisation’’ of 3 percent, which refers to the present value of public credit assets and substitution assets in the Pool expressed as apercentage of the present value of the Asset Covered Securities secured on the Pool. Higher collateralisation levels contractually undertaken by Institutions are not under the 2007 Bill proposals to be affected by the new

11 proposed mandatory level of regulatory overcollateralisation. See paragraph 8 under the heading ‘‘The 2007 Bill: Legislative proposals to amend the Act.’’

For further information regarding the Monitor, see ‘‘The Cover-Assets Monitor.’’

12 BOARD OF DIRECTORS AND MANAGEMENT OF THE ISSUER Four of the directors of the Issuer are employees of Group companies. Three directors of the Issuer are non-executive directors one of whom is an employee of the Group. Of the other two non-executive directors, one is on the board of directors of another Group company and the other is not. This close tie between the Group and the directors of the Issuer is aimed at maintaining the Group’s expertise and business franchise at the Issuer. However, the Issuer is independent in its decision-making capability as far as it is appropriate for a wholly-owned subsidiary bank of a banking group. Generally at least four full board meetings of the Issuer are held in Ireland each year while the executives meet on a more regular basis. The Issuer has an audit committee consisting of non-executive directors which meets on an annual basis to receive the report of the internal audit team of the Group on the Issuer. The Issuer continues to increase the number of its employees, though it also relies on intra- group services, particularly from its parent, DEPFA BANK plc. The Board of Directors of DEPFA ACS BANK As of the date of this Prospectus, there are six members of the Board of Directors of the Issuer. Their business addresses and principal outside activities are listed below. Members Principal Outside Activities

Bo Heide-Ottosen Other Directorships/Activities: (chairman and non-executive None director) Business address: 1 Commons Street, Dublin 1, Ireland Maurice O’Connell Offices held within the Group (non-executive director) (non-executive): Business address: DEPFA BANK plc, Member of the Board of Directors 9, Cyress Lawn Other Directorships/Activities: Templeogue Alzheimers Society of Ireland Dublin 6W, Ireland The Abbey Theatre Clann Credo ISEQ Exchange Traded Fund plc Dr. T. P. A. Carey Other Directorships/Activities: (non-executive director) None Business address: 59 Eagle Valley Powerscourt Enniskerry Co. Wicklow Ireland Michael Deeny Offices held within the Group: (managing director) (non-executive) Business address: DEPFA Hold One Limited 1 Commons Street DEPFA Hold Two Limited Dublin 1, Ireland DEPFA Hold Three Limited DEPFA Hold Four Limited DEPFA Ireland Holding Ltd DBE Property Holdings Ltd Other Directorships/Activities: International School of Dublin Limited Brian Farrell Other Directorships/Activities: (executive director) None Business address: 1 Commons Street Dublin 1, Ireland Julia Hoggett Other Directorships/Activities: (executive director) British American Project Limited Business address: 1 Commons Street Dublin 1, Ireland As far as is known to the Issuer, other than as may arise from an individual director’s principal outside activities listed in each case above or, in the case of current employees of the Group, other roles within the Group, no potential conflicts of interest exist between any duties to the Issuer or the Board of Directors of the Issuer and their private interests or other duties in respect of their management roles.

13 ASSET LIABILITY MANAGEMENT AT THE GROUP AND ISSUER LEVELS

General The goal of the Group’s asset liability management is to provide adequate funding to the Group and to manage its exposure to liquidity, interest rate and currency risks. The Issuer complies with the Irish Banking Code which incorporates all the EU Banking Directives and is supervised by the Financial Regulator. See ‘‘Supervision and Regulation.’’ For the Issuer many of these speciﬁc risks are subject to requirements under the Act or regulations or regulatory notices made by the Financial Regulator under the Act. See ‘‘Characteristics of Irish Asset Covered Securities’’, ‘‘Cover Assets Pool’’ and ‘‘The Cover-Assets Monitor.’’ In addition, the Group has implemented various internal risk management policies, which are formulated by the Group’s Asset & Liability Committee and approved by the Issuer’s executive directors (the ‘‘Management Board’’). The Issuer’s asset liability management strategy is implemented by the Issuer’s own Asset & Liability Committee, which meets monthly to set position limits. It reports directly on a monthly basis to the Management Board.

Liquidity Exposure The objective of the Group’s liquidity management is to ensure that sufﬁcient funds are available to meet the Group’s commitments to its customers and counterparties, both in terms of demand for loans and repayment of liabilities and in terms of satisfying the operational liquidity needs of the Group. The Group is assisted in this task by the fact that a substantial portion of both its assets and liabilities are long-term and that it maintains a continuing presence in the European money markets.

As of March 12, 2007, the date as of which the Issuer’s last report to the Financial Regulator was submitted, the Issuer was in compliance with the liquidity requirements set out by the Financial Regulator. A ratio of 29.08 percent was calculated, which is in excess of the minimum requirement of 25 percent. See ‘‘Supervision and Regulation – Irish Banking Code.’’ In addition, the Issuer is in compliance with all provisions of the Act and all regulations thereunder, which include matching requirements for duration and amount of interest payable in the Pool. See ‘‘Cover Assets Pool – Financial Matching Criteria for the Pool and Asset Covered Securities’’ and ‘‘The Cover-Assets Monitor.’’ The Monitor oversees compliance with requirements under or derived from the Act.

Interest Rate Exposure The Issuer makes use of interest rate swaps, options and other hedging instruments to limit interest rate risks involved in the reﬁnancing of speciﬁc assets. The Issuer makes use of derivatives (see ‘‘– Derivatives’’ below) to reduce or limit any interest rate exposure and indeed it will be obliged to do so for assets in the Pool if they would not otherwise meet the matching requirements under the Act. See ‘‘Cover Assets Pool – Financial Matching Criteria for the Pool and Asset Covered Securities.’’

The Issuer hedges a substantial portion of the interest rate risk component in relation to the Securities. Therefore, the Issuer expects not to have exposure to signiﬁcant interest rate risk. The Issuer has internal interest rate limits which are supervised by the Issuer’s risk controlling personnel on a daily basis. Under regulations made under the Act, the Issuer is required to ensure that all positions on the balance sheet of the Issuer (excluding capital) sensitive to changes in interest rates are measured to ensure that any net present value changes arising as a result of changes in interest rates do not exceed ten percent of the Issuer’s total own funds at any time. Sensitivity to interest rate changes are calculated using speciﬁed formulae for net present value changes based on: 100 basis points upward shift in the yield curve; 100 basis points downward shift in the yield curve; and 100 basis points twist in the yield curve. Under regulations made by the Financial Regulator under the Act, the Monitor is required to monitor compliance by the Issuer with these requirements.

In respect of assets in the Pool, the Issuer complies with the interest coverage matching requirements set out in the Act and the provisions applicable to cover assets hedge contracts. See ‘‘Cover Assets Pool.’’

Currency Exposure It is the Issuer’s policy to minimize currency exposure arising out of its lending activities. To the extent practicable, loans in currencies are funded with liabilities in such currencies. In other cases, derivatives are used to reduce the risk of exposure to movements in currency exchange rates.

14 Derivatives The Issuer complies with restrictions on derivative activities under the Act. In respect of assets within the Pool, the Issuer will be in compliance with the currency matching requirements set out in the Act and provisions applicable to cover assets hedge contracts. See ‘‘Cover Assets Pool – Cover Assets Hedge Contracts’’ and ‘‘Restrictions on the Activities of an Institution – Permitted Business Activities – (g) Entering into Certain Hedging Contracts for the Purpose of Hedging Risks Associated with the Foregoing Activities.’’

Derivative instruments are contracts or agreements whose value is derived from interest rates, exchange rates, prices of securities, or ﬁnancial or commodity indices. Derivatives include swaps, futures, forwards and option contracts. Derivatives are generally either negotiated over-the-counter contracts or standardized contracts executed on an exchange. Standardized exchange-traded derivatives include futures and option contracts. Negotiated over-the-counter derivatives include forwards, swaps and option contracts. Over-the-counter derivatives are generally not traded like securities; however, in the normal course of business, with the agreement of the original counterparty, they may be terminated or assigned to another counterparty. The timing of cash receipts and payments related to derivatives is generally determined by contractual agreement.

15 THE RISK MANAGEMENT SYSTEM OF THE GROUP AND THE ISSUER

All risk exposures of the Issuer are reported to the Chief Risk Ofﬁcer, the Asset & Liability Committee and to the Financial Regulator under the Irish banking reporting requirements which apply under the Irish Banking Code. See ‘‘Supervision and Regulation.’’ In addition, the risk limits of all counterparties of the Issuer are ﬁrstly approved by the Group Credit Committee. In this way, risk management of the Issuer is carried out as part of the risk management system of the Group. The ultimate responsibility for the management of the Issuer’s business risk rests with its Board of Directors. On February 13, 2006, a Risk Committee was established at the level of the Group’s Board of Directors. Consisting of executive and non-executive directors of the Board, the Risk Committee is responsible on a global basis for overseeing the Group’s risk policy statement and will make policy recommendations which will be approved by the Board of Directors from time to time. The Risk Committee is further responsible for providing strategic direction in relation to the nature and scale of risk that the Group and the Issuer is permitted to assume to achieve its corporate objectives.

To meet both commercial and regulatory requirements on one hand and the growing need for information on the part of capital market participants on the other, the Group has established a system for identiﬁcation, measurement, early recognition and control of risk. The Issuer is an integral part of these systems.

All risk functions (Credit, Liquidity, Market and Operational Risk) report to the Group’s Chief Risk Officer, a member of the Group’s Executive Committee, who in turn reports to the Group’s Chief Executive Officer and independently to the Group Board’s Risk Committee. The Chief Risk Officer is responsible for the assessment and monitoring of all risk categories of the Group and oversees the work of the Credit Committees and the Asset & Liability Committee.

Measurement and Management of the Various Types of Risk In accordance with Group requirements, the Issuer applies Group policies and procedures to the management of credit risk, market risk, operational risk and liquidity risk. The following is an overview of these policies and procedures.

Credit Risk Credit risk is the risk of impairment and partial or total loss of a receivable due to deterioration of credit quality on the part of a business partner. The relevant receivable may be based on traditional on-balance sheet lending business or off-balance sheet business, that is, counterparty risk arising from derivative ﬁnancial instruments. Whereas in traditional lending business, risk arises from the creditworthiness of the borrower and the value of the collateral, the counterparty risk results from the counterparty’s failure to perform the transaction in accordance with contractual obligations, leading to a loss when executing a substitute transaction in the market at less favorable terms.

Credit Risk Related to the Public Sector Business The Issuer’s business is focused on sovereign and sub-sovereign borrowers and public sector supported specialist entities.

Assessing Credit Risk – Internal Rating System The credit scoring of counterparties is central to the Group’s business, and the Group’s scoring model is continuously reviewed. The Group has a unitary scoring system for its main credit risk pools (for the Issuer these are sovereign, sub-sovereign and ﬁnancial institutions). The Group uses a 22-grade internal rating system similar to the grading system used by the external credit assessment institutions (‘‘ECAIs’’)asdeﬁned under capital adequacy framework issued by the Bank for International Settlements (‘‘BIS’’)inJune 2004, commonly known as Basel II (‘‘Basel II’’). All counterparties across all risk groups are graded in accordance with this system. The Group’s intention is to adopt the Internal Ratings Based Foundation Approach under Basel II, and in this regard the Group has established a credit ratings analytics team, which is responsible for developing scoring models that are individually tailored by country and exposure type, to help estimate credit scores and determine probability of default for all Group credit exposures. The steps to assign and test the robustness of the internal ratings involve:

16 s Grading individual counterparties through the analysis of balance sheet strength, the historic and budgeted relationship of direct tax and central allocation (grant) revenues with expenses, the relationship of debt to operating surpluses, indebtedness per capita, political stability, the structure of any guarantees, and the capacity to repay and degree of contingent liabilities.

s Analyzing the sub-sovereign legal framework including the delegation of powers from the sovereign and ﬁnancial and regulatory support of its activities.

s Mapping of internally derived ratings against the ECAI ratings for externally-rated borrowers.

All counterparties must have pre-approval limits in place as a prerequisite to conducting transactions with the Group. In terms of numbers of clients, a majority of borrowing or issuing counterparties have external ratings (all are rated internally). The Issuer’s clients and counterparties which have external ratings account for 85.56 percent of on-balance sheet interest earning assets. As of January 31, 2007, 32.03 percent of the Issuer’s on- balance sheet interest earning assets relates to counterparties with an external rating of AAA, 24.27 percent of that portfolio relates to assets with an external rating of AA, 24.14 percent of the portfolio is single-A rated externally, while 5.12 percent of the portfolio relates to assets with an external rating of BBB1 to B3. Of the 14.44 percent assets unrated externally, 40.77 percent are sovereign guaranteed, 49.54 percent are direct obligations of or guaranteed by public sector entities and 2.78 percent are obligations of ﬁnancial institutions and 6.91 percent are obligations of corporations. In this analysis, the rating is taken as the lowest awarded by the three major ECAIs.

The Credit Approval Process The Group operates an independent credit approval which includes assessments by and formal limit recommendations from credit analysts not involved in the business areas.

The credit process centres on an independent Credit Committee which presides over three counterparty risk pools (sovereign, sub-sovereign and ﬁnancial institutions), and which is provided with both rating and limit recommendations from dedicated independent risk teams.

Reviews are conducted at least annually and may lead to revised ratings. Limits are set by the Credit Committee whose voting members consist of senior risk ofﬁcers, senior management and a member of the Board of Directors.

The allocation of an internal rating determines both the pricing and the potential exposure amount. The Credit Committee is empowered to set limits up to prudent levels taking into account large exposure parameters. The Credit Committee sets pre-approval limits for all the public ﬁnance subsidiaries of the Group, including the Issuer.

Limit Monitoring The monitoring of country limits or country exposures is carried out on a daily basis by a dedicated Group team based in Dublin. Limit monitoring is performed on both a Group-wide basis as well as by the Issuer.

These exposure reports are made available to Management and all Business Teams of the Group.

Sovereign Risks For banks, country risks arise when extending loans to customers domiciled in a country other than the country of the banks granting the loans. Such risks materialize whenever the country in which the borrower is domiciled issues a general moratorium or introduces exchange rate controls.

To assess and monitor country risks, the Group has established a Country Risk Committee which rates individual countries and determines country limits. Reviews of sovereign risks conducted at least annually with detailed reports on the social, political and economic situation of all countries are presented to the Credit Committee for approval. All countries relevant to the Group’s business (primarily in connection with international public ﬁnance business) are rated in accordance with Group internal rating grades that serve as a basis for the determination of Euro-denominated country limits. All decisions with regard to credit ratings and limit levels are recommended by the Country Risk Committee to the Credit Committee.

17 The Country Risk Committee updates the credit rating of all countries on a timely basis. The country assessments are primarily carried out using all available economic data, in-house country analyses and publications by international rating agencies. The utilization of country limits is monitored by the credit monitoring group on a Group-wide level.

As its own rating is of paramount importance to the Issuer, it continues to be very risk-conscious, selective and ﬂexible when selecting country risk in connection with public sector business. The Group has developed a country rating system to prepare for implementation of Basel II. In addition, the current decision- making and monitoring system for country limits/credit quality classiﬁcation (supported by additional IT systems) is continuously being updated to respond to external changes.

Sub-Sovereign Risk The Group Credit Risk Unit, a specialized team based in Dublin, carries out sub-sovereign risk analysis. This team is independent from business origination/relationship management and is responsible for assessing and rating (in accordance with the Group internal grading system) the credit risk for sub-sovereign entities.

The unit assesses the distinct characteristics of the country in which the sub-sovereign is located, especially those characteristics related to inter-governmental arrangements. The unit also assesses political, demographic, economic, ﬁscal and ﬁnancial factors.

Credit Risk Related to Financial Institutions Within the Group, counterparty risk from ﬁnancial institutions arises from securities transactions, money market transactions and interest rate derivatives entered into with bank counterparties.

The extent of credit risk associated with these transactions depends on the structure of the relevant transaction. Whereas the credit exposure of balance-sheet instruments is determined by their current book or market value, the credit risk of derivative ﬁnancial instruments corresponds to the ‘‘potential cost’’ resulting from the replacement of an equivalent position in the event of potential counterparty default.

To monitor the counterparty risk arising from ﬁnancial institutions, the Group has a Group-wide counterparty limit system that directly accesses the front-ofﬁce system used by the Treasury division (‘‘Treasury’’), providing real-time information on limits and limit utilization. The credit exposure resulting from these transactions is calculated on a mark-to-market basis, taking into consideration the regulatory add-ons.

The approval process applied is the same as for sub-sovereign counterparties. In addition, all ﬁnancial institutions are rated internally.

Furthermore, any existing netting master agreements and collateral agreements with business partners are taken into account to adequately map the counterparty risk. These agreements are used to reduce both the capital cover required and the utilization of bank-internal counterparty limits.

The monitoring of limit compliance is ensured by the Group Credit Risk Unit. Any transgressions are reported to the Chief Risk Ofﬁcer, Executive Committee and Treasury. The timely adjustment of limit transgressions is ensured by means of an escalation procedure.

Within the Group, the ﬁnancial institutions business is geared towards high credit-quality counterparties.

Market Risk Market risk refers to the risk of potential loss arising from changes in interest rates, foreign currency exchange rates, equity prices, price or rate volatilities and other relevant market rates and prices such as commodity prices. The Group deﬁnes its market risk as the potential for changes to fair value of ﬁnancial instruments as a result of rate, price and volatility movements.

The Group’s market risk policies and procedures follow three core principles:

s Policy framework for all key market risk activities approved by the Group’s Board of Directors.

18 s Market risk management is centralized in the Asset & Liability Committee and the Treasury and product units, managed by specialized personnel and monitored using appropriate systems and controls.

s The market risk control function measures and monitors the risks independently of the risk-taking units.

The Group policies and procedures are applied to the Issuer.

The market risk control function has sub-categorized market risk into risk factors. The relevant risk factors for the Issuer are interest rate, credit spread and foreign exchange risk. Due to its focus on the issuance of Asset Covered Securities, the Issuer is not generally exposed to equity or commodity risk. With regard to foreign exchange risk, the Group has a policy that Treasury must match all foreign currency assets with liabilities in the same currency or swap out the foreign exchange exposure. Hence, the primary risk factor for the Issuer is interest rate and credit spread risk.

For the quantification and control of market risk, the Issuer determines the daily value at risk (‘‘VaR’’) figures in accordance with industry-wide practice using the variance/co-variance methodology for its banking books. The VaR monitoring is based on a comprehensive set of risk factors, used on a consolidated basis across the Group as well as on an individual basis by legal entity, portfolio and desk level. This statistical methodology uses a ten-day holding period with a 99 percent confidence interval to estimate the loss potential of the portfolio. The statistical parameters of this model, correlation and volatility, are estimated from a 250-day trading history. The ten-day holding period was selected to give a conservative VaR measure in relation to hedging the risk of the portfolio’s positions. Senior management recognizes that variance/co-variance VaR has certain inherent limitations. The past may not always provide a reliable indicator of future market movements, and the statistical assumptions employed may understate the probability of very large market moves. For this reason, additional management tools such as sensitivity measures and stress testing are used to supplement VaR, and in 2006, historical simulation VaR was introduced for Group trading portfolios (the Issuer does not have a trading portfolio) to supplement variance/co-variance VaR.

The Issuer includes all its business activities in its VaR calculation. This means that the VaR ascertained is based on the risk position of the entire portfolio. This facilitates the consistent daily assessment of risks assumed within the Issuer.

The Risk Controlling department calculates the necessary volatilities and correlations required for the calculation of VaR. A full back testing program has been implemented to ensure the quality of the statistical process employed for risk management. Back testing entails comparing proﬁts and losses incurred during the holding period with the upper limit for losses being forecast by the VaR model at the beginning of the holding period. Within a review period of one year (250 trading days), no more than three transgressions of this upper limit for losses would be expected. Furthermore, the VaR calculations are complemented by stress testing scenarios to quantify the impact of extreme market movements. In addition, the regulations under the Act provide that any net present value changes arising must not exceed ten percent of the Issuer’s total own funds at any time as outlined above under ‘‘Asset Liability Management at the Group and Issuer Levels—Interest Rate Exposure.’’

Senior management is informed on a daily basis of the limit levels and their utilization for the Issuer. In addition to the VaR breakdown by risk factors (currency, interest rate per currency and maturities), the basis point sensitivity is reported. This provides important information for all maturity ranges on how the positions react to interest rate changes.

Moreover, the daily sensitivity report supplies vital information on the ﬁxed interest rate terms of all positions held by the Issuer. In addition to the analysis of net lending and net borrowing positions in the relevant maturity ranges, this data permits analyses of risk and income development. On the basis of assumptions, potential losses arising from extreme or possible market movements (for example due to changes in yield curves or due to planned new business transactions) may therefore be quantiﬁed beforehand.

The market risk control department of DEPFA BANK plc has been using a platform to ensure independent measurement and monitoring of risks, including reporting of VaR on a Group-wide basis capturing all members of the Group. The total VaR is used as a management tool both on a Group-wide basis and for the

19 main Group members. Limits are determined for the Group and Group members with reference to regulatory core capital. The Issuer also calculates the interest rate stress tests as required by the Act. In addition, duration tests as prescribed by the Financial Regulator are applied to the Pool. The market risk control department of the Group reports to the Group’s Chief Risk Ofﬁcer, who, in turn, is a member of the Group’s Executive Committee.

Liquidity Risk Liquidity risk is defined as the risk of being unable to fulfill current or future payment obligations in full on or at the due date. The objective of the Group and the Issuer is to minimize liquidity risks. Less liquid assets (such as loans rather than bonds) are refinanced long-term through Asset Covered Securities. More fungible assets are refinanced outside the Pool by deposits, certificates of deposit, repos and central bank refinancing transactions. The general control of liquidity exposure is regulated by the Financial Regulator and the general rule applied for Irish licensed banks is that they must hold a minimum ratio of liquid assets to total borrowings of 25 percent. In addition, the Act provides financial matching requirements for the Pool with respect to Asset Covered Securities. See ‘‘Cover Assets Pool – Financial Matching Criteria for the Pool and Asset Covered Securities.’’ The Issuer may also make use of hedge contracts (including cover assets hedge contracts) as a form of liquidity facility. The Issuer has agreed to Overcollateralization of the Pool with respect to all of the Issuer’s Asset Covered Securities in issue from time to time at a minimum level of five percent. Regarding Overcollateralization, see ‘‘Characteristics of the Pool/Overcollateralization’’ and ‘‘The Cover-Assets Monitor – Maintenance of Overcollateralization.’’ The Issuer is also obliged to ensure that the interest payable in a given period of twelve months in respect of the issued Asset Covered Securities is not greater than the total amount of interest receivable on the Pool after taking into account cover assets hedge contracts.

Assets held outside the Pool prior to future Asset Covered Securities issuances either pay a floating rate return or are swapped to a floating return through the use of derivative transactions. These assets are in turn primarily financed through inter-company loans.

Operational Risk The Group has adopted the BIS definition of operational risk. It is ‘‘the risk of losses resulting from inadequate or failed internal processes, people and systems or from external events’’. The Issuer applies Group policies and procedures in relation to the management of operational risk. The objective of the operational risk framework of the Group and the Issuer is to minimize operational risk by: documentation of all relevant policies, procedures and processes and keeping them under constant supervision; identification, assessment and mitigation of operational risks assisted by risk control self assessments, risk event reporting and analysis of key risk indicators, employing suitably qualified and experienced personnel; annual appraisal process and regular review of goals and objectives; application of a robust and reliable system environment; maintaining and further developing business continuity plans and procedures and sound control systems. All major system components, such as computer hardware, communication links or trading sites, are duplicated, synchronized and hosted in different locations. This is an integral part of the Group’s business continuity plan, protecting the Group, and the Issuer, from an externally caused major disaster.

The Group’s control system relies on strict organizational independence of the monitoring and control functions, detailed segregation of functions and duties and the application of the four-eyes principle to all relevant actions and decision processes. The risk monitoring functions for credit, market and operational risk and the Compliance and Internal Audit functions are the major pillars of the Group’s control system. The Group is actively implementing changes to systems and procedures necessary to meet its and the Issuer’s obligations under Basel II in a timely manner.

The Group Internal Audit function, located in both Dublin and Frankfurt, is an independent unit established to audit and evaluate all Group activities and to add value and improve operations and procedures. Group Internal Audit reports directly to the Group Audit Committee.

Group Internal Audit supports the organizational units of the Group to accomplish their objectives by bringing a systematic disciplined approach to the evaluation of the effectiveness of risk management, internal control, procedures and governance processes.

20 The Issuer’s compliance officers, in addition to compliance officers located in each of the Group’s legal entities, report directly to the Group compliance officer located in Dublin. The compliance function oversees the adherence to the principles set out by the Financial Regulator and any other relevant regulatory authorities.

Hedging The Issuer’s policy is to hedge the following exposures:

s Interest rate risk – using interest rate swaps.

s Currency exposures – using cross-currency swaps and forward foreign exchange.

The following table provides examples of certain activities undertaken by the Issuer, the related risks associated with such activities and the types of derivatives used in managing such risks. Such risks may also be managed by using on-balance sheet instruments as part of an integrated approach to risk management.

Activity: Risk: Type of hedge: Fixed rate lending/borrowing Sensitivity to increases/ Pay/receive ﬁxed interest rate decreases in interest rates swaps Investment in foreign currency assets/ Sensitivity to strengthening/ Cross-currency swaps liabilities weakening of Euro against Foreign exchange swaps other currencies Foreign currency funding

21 SUMMARY BALANCE SHEET REGARDING THE ISSUER

The summary balance sheet set forth below for DEPFA ACS BANK as at September 30, 2006 is unaudited and derived from the Issuer’s unaudited interim balance sheet for the nine months ended September 30, 2006 prepared in accordance with IFRS and is included as an Appendix to this Prospectus.

The summary balance sheet set forth below for the Issuer as at December 31, 2005 is derived from the Issuer’s related ﬁnancial statements for the year ended December 31, 2005 incorporated by reference into this Prospectus, which have been audited by PricewaterhouseCoopers, independent auditors, and should be read in conjunction therewith. Balance Sheet As at As at September 30, December 31, 2006 2005 (E millions)

Assets Cash and balances with central banks ...... 17 9 Loans and advances to banks ...... 15,194 13,906 Derivative ﬁnancial instruments ...... 832 1,378 Loans and advances to customers ...... 49,338 39,019 Investment securities – available-for-sale ...... 3,778 3,998 Other assets ...... 6 5 Total assets...... 69,165 58,315 Liabilities Deposits from banks ...... 23,833 18,147 Derivative ﬁnancial instruments ...... 2,230 2,774 Debt securities in issue ...... 42,117 36,519 Other borrowed funds ...... 389 256 Other liabilities...... 2 16 Current tax liabilities ...... 5 1 Deferred tax liabilities ...... 6 2 Total liabilities ...... 68,582 57,715 Equity Equity attributable to equity holders of the company Share capital...... 510 510 Retained earnings...... 48 71 Other reserves...... 25 19 Total equity ...... 583 600 Total equity and liabilities ...... 69,165 58,315

22 CHARACTERISTICS OF IRISH ASSET COVERED SECURITIES

Overview of the Asset Covered Securities Act, 2001 The Asset Covered Securities Act, 2001 of Ireland, as amended by the Central Bank and Financial Services Authority of Ireland Acts, 2003 and 2004 (the ‘‘Act’’) introduced into Irish law a framework for the issuance of asset covered securities. These asset covered securities can only be issued by Irish credit institutions who are registered under the Act and restrict their principal activities to public sector or property financing. Those credit institutions such as the Issuer who are registered under the Act and restrict their principal activities to public sector financing are called designated public credit institutions (‘‘Institutions’’). The Act provides, among other things, for the registration of eligible credit institutions as Institutions, the maintenance by Institutions of a defined pool of prescribed public credit assets and limited classes of other assets, known as a cover assets pool (‘‘Pool’’) and the issuance by Institutions of certain asset covered securities secured by a statutory preference under the Act on the assets (‘‘Cover Assets’’) comprised in the Pool. Asset covered securities issued by Institutions in accordance with the Act are called public credit covered securities (‘‘Asset Covered Securities’’). The Act also makes provision for the inclusion in the Pool of certain hedging contracts which are called cover assets hedge contracts. The Act also varies the general provisions of Irish insolvency law which would otherwise apply with respect to Cover Assets and Asset Covered Securities on the insolvency of an Institution. See ‘‘Insolvency of Institutions.’’

The Act further provides for the supervision and regulation of Institutions by the Financial Regulator, for the role of the cover-assets monitor (the ‘‘Monitor’’)inrespect of each Institution and the Pool maintained by it, for restrictions on the types and status of Cover Assets which may be included in the Pool (including duration restrictions), for asset/liability management between the Pool and Asset Covered Securities, and, in certain circumstances, for the role with respect to an Institution, its Pool and Asset Covered Securities of the National Treasury Management Agency or a manager appointed by the Financial Regulator.

On February 21, 2007, the Government of Ireland presented legislative proposals to amend the Act under the Asset Covered Securities (Amendment) Bill 2007 (the ‘‘2007 Bill’’). For further information about the 2007 Bill, see ‘‘The 2007 Bill: Legislative proposals to amend the Act’’.

The Securities will qualify as Asset Covered Securities for the purposes of the Act. The Securities are senior obligations of the Issuer and rank equally with all other Asset Covered Securities which have been or may be issued by the Issuer. In the event of an insolvency of an Institution, the holders of Asset Covered Securities issued by an Institution together with limited categories of other preferred creditors have recourse under the Act to Cover Assets comprised in the Pool in priority to other creditors (whether secured or unsecured) of the Institution who are not preferred under the Act. See ‘‘Characteristics of Irish Asset Covered Securities’’ and ‘‘Insolvency of Institutions’’ for further information.

A more detailed examination of the Act and regulations made under the Act (without, save as indicated below in this paragraph, reference to changes proposed in the 2007 Bill) are set out below under the headings ‘‘Cover Assets Pool’’, ‘‘Restrictions on the Activities of an Institution’’, ‘‘The Cover-Assets Monitor’’, ‘‘Insolvency of Institutions’’, ‘‘Supervision and Regulation’’ and ‘‘Registration of Institutions/Revocation of Registration.’’ References under those headings or under the heading ‘‘The 2007 Bill: Legislative proposals to amend the Act’’ to proposals to amend the Act under the 2007 Bill are only to changes which are applicable to Institutions and which the Issuer considers at the date of this Prospectus most relevant to highlight. Accordingly, the description of the 2007 Bill under those headings does not contain a comprehensive or full description of all the proposals under the 2007 Bill to amend the Act.

23 COVER ASSETS POOL

Institutions Required to Maintain Cover Assets Pool An Institution may only issue Asset Covered Securities if it maintains the Pool in compliance with the Act. A public credit asset, substitution asset or cover assets hedge contract forms part of the Pool only if its inclusion has been approved by the Monitor. In general, where an Institution becomes aware that it has contravened the requirements of the Act relating to the Pool that it is required to maintain, the Institution in question must take all possible steps to prevent the contravention from continuing or being repeated. Until those steps have been taken, the Institution may not issue further Asset Covered Securities. As soon as practicable after the Monitor appointed in respect of an Institution has become aware, or has formed a reasonable suspicion, that the Institution has contravened or failed to comply with a provision of the Act that relates to the responsibilities of a Monitor, the Monitor is required to provide the Financial Regulator with a written report of the matter. See ‘‘The Cover-Assets Monitor – Duties of the Monitor before an Institution issues Asset Covered Securities’’ and ‘‘The Cover-Assets Monitor – Duty of the Monitor to Inform the Authorities of Certain Matters.’’ The Act empowers the Financial Regulator to apply to the Irish High Court for an order prohibiting a person (including an Institution) whom it ﬁnds to be contravening or to have repeatedly contravened a provision of the Act or a regulatory notice or a regulation made under the Act from continuing or repeating the contravention. The Irish High Court may also, on an application from the Financial Regulator, make an order requiring a person (including an Institution) to comply with a provision of the Act or a regulatory notice or a regulation made under the Act if it ﬁnds that such person has failed or is failing to comply with the provision after being requested by the Financial Regulator so to comply.

Categories of Assets that May be Included in the Pool A Pool maintained by an Institution may include only certain public credit assets, substitution assets and cover assets hedge contracts as described below.

Public Credit Assets A‘‘public credit asset’’ is defined as property or an asset held by an Institution that comprises one or more public credits. The Act defines ‘‘public credit’’ as any kind of financial obligation in respect of money borrowed or raised, where the person who has the obligation is: (a) Ireland, any other EEA country, Canada, Japan, the Swiss Confederation, the United States of America, or a country specified in an order made by the Minister for Finance; (b) a country, other than a country to which paragraph (a) relates, that is a full member of the Organization for Economic Co-operation and Development, but only if it has not rescheduled its external debt during the immediately preceding five years; (c) any governmental or public entity with tax-raising powers within one of the foregoing countries; (d) any other governmental or public entity established within one of the foregoing countries whose financial obligations have a capital adequacy risk weighting of 20 percent or less for the purposes of the EU Codified Banking Directive referred to above; (e) the European Communities (or any of them) or the European Investment Bank; (f) any other entity established in a country to which paragraph (a) or (b) relates that is prescribed by regulations made by the Financial Regulator (as of the date of this Prospectus, no such regulations have been made by the Financial Regulator). For the above purposes, a ‘‘financial obligation’’ includes a financial obligation that is in the form of a security that represents other public credit that is securitized as well as one that is not, and an obligation given as a surety or guarantee.

24 In relation to proposals under the 2007 Bill to change which assets are eligible as public credit assets (including for the purposes of inclusion in the Pool), see paragraphs 1, 2, 3 and 4 under the heading ‘‘The 2007 Bill: Legislative proposals to amend the Act.’’

Substitution Assets The Act deﬁnes ‘‘substitution assets’’ as:

(a) deposits with an eligible ﬁnancial institution (see below); (b) Tier 1 assets for the purposes of the European System of Central Banks’ monetary policy operations; and

(c) any asset designated a substitution asset in an order made by the Minister for Finance (as at the date of this Prospectus no assets have been so designated by Ministerial order). For the purposes of (a) above, the Financial Regulator’s regulations provide that the following ﬁnancial institutions are eligible ﬁnancial institutions: (a) (i) Any credit institution which is authorized in Ireland or any other EEA country, or

(ii) A bank which is authorized to receive deposits or other repayable funds from the public and is located in Canada, Japan, the Swiss Confederation, the United States of America, and (b) which is rated by:

(i) Moody’s Investor Services* at A1 or higher in respect of its long term debt, or P-1 in respect of its short term debt (the ‘‘Moody’s rating’’), or

(ii) Standard & Poor’s Corporation** at a rating equivalent to the Moody’s rating, or (iii) Fitch Investors Services L.P.*** at a rating equivalent to the Moody’s rating, or a rating agency acceptable to the Financial Regulator for this purpose at a rating equivalent to the Moody’s rating.

In relation to proposals under the 2007 Bill to, among other things, impose additional creditworthiness requirements as to which substitution assets may be included in the Pool, see paragraph 9 under the heading ‘‘The 2007 Bill: Legislative proposals to amend the Act.’’

Location Requirements Under the Act, a public credit asset or a substitution asset (other than a deposit) is located in the country in which the entity which qualiﬁes the asset as a public credit asset or, as applicable, a substitution asset, is formed or established. A substitution asset which is a deposit is situated in the country in which the place of business of the ﬁnancial institution that is holding the deposit is located.

The public credit assets and substitution assets comprised in the Pool may be located within any EEA country or be ﬁnancial obligations of the European Communities (or any of them) or the European Investment Bank.

* The rating agency is printed as it is referenced in the Financial Regulator’s regulations; the relevant rating agency is currently referred to as Moody’s Investors Service. ** The rating agency is printed as it is referenced in the Financial Regulator’s regulations; the relevant rating agency is currently referred to as Standard and Poor’s, a division of The McGraw-Hill Companies, Inc. *** The rating agency is printed as it is referenced in the Financial Regulator’s regulations; the relevant rating agency is currently referred to as Fitch Ratings.

25 An Institution may not include in the Pool maintained by that Institution a public credit asset or a substitution asset that is located within one or more category A countries if, after the inclusion of the asset in the Pool, the total prudent market value of all public credit assets and substitution assets comprised in the Pool located in all such countries would exceed 15 percent (or such other percentage as may be speciﬁed in regulations made by the Financial Regulator (although, at the date of the Prospectus, no relevant regulations have been made)) of the total prudent market value of all public credit assets and substitution assets that are then included in the Pool.

In relation to proposals under the 2007 Bill to, among other things, remove the 15% limitation referred to in the previous paragraph, see paragraph 3 under the heading ‘‘The 2007 Bill: Legislative proposals to amend the Act.’’

An Institution may include in the Pool maintained by the Institution public credit assets or substitution assets that are located within a category B country (as to which see below) only if the country has been designated pursuant to an order made by the Minister for Finance of Ireland and the Institution complies with any restrictions speciﬁed in such order. As of the date of this Prospectus, no such Ministerial order has been made.

A‘‘category A country’’ is defined in the Act as Canada, Japan, the Swiss Confederation, the United States of America, or a country specified in an order made by the Minister for Finance. There are currently no other countries specified by Ministerial order for that purpose.

A‘‘category B country’’ is deﬁned in the Act as a country, other than a category A or EEA country, that is a full member of the Organization for Economic Co-operation and Development, but only if it has not rescheduled its external debt during the immediately preceding ﬁve years.

Non-Performing Assets Non-performing assets may not be included in the Pool. ‘‘Non-performing’’ is deﬁned in the context of an Institution to mean that the relevant asset is in the course of being foreclosed or otherwise enforced or that one or more payments of principal or interest payable on the related credit are in arrears for ten days or more under the terms of the security documents that govern that credit.

Financial Matching Criteria for the Pool and Asset Covered Securities The Act sets out certain ﬁnancial matching requirements which must be met by an Institution in respect of its Pool and Asset Covered Securities. These criteria are that:

(a) the Pool maintained by an Institution has a duration (see below) of not less than the Asset Covered Securities;

(b) the prudent market value of the Pool is greater than the total of the principal amount of those Asset Covered Securities;

(c) the total amount of interest payable in a given period of 12 months in respect of the Pool is during that 12 month period not less than the total amount of interest payable in respect of that period on those Asset Covered Securities; and

(d) the currency in which each public credit asset and each substitution asset included in the Pool is denominated is the same as the currency in which those Asset Covered Securities are denominated, after taking into account, in the case of paragraphs (b), (c) and (d) above, the effect of any cover assets hedge contract (see ‘‘– Cover Assets Hedge Contracts’’ below) that the Institution has entered into in relation to the Pool and those Asset Covered Securities.

Meaning of ‘‘Duration’’ of the Pool and Asset Covered Securities ‘‘Duration’’ means, in relation to the Pool and Asset Covered Securities:

26 (a) if interest payable in respect of a public credit asset or a substitution asset included in the Pool, or in respect of the Asset Covered Securities, is variable, a discounted weighted average term to maturity of the relevant principal amount of the Pool or Asset Covered Securities; or

(b) if interest payable in respect of a public credit asset or a substitution asset included in the Pool, or in respect of the Asset Covered Securities, is ﬁxed, a discounted weighted average term to maturity of the relevant principal and interest payable but unpaid in respect of the Pool or Asset Covered Securities, determined in accordance with a formula or criteria speciﬁed in a regulatory notice made by the Financial Regulator under the Act, using appropriate zero coupon interest rates and taking into account the effect of any relevant cover assets hedge contract entered into by the Institution in relation to the Pool and those Asset Covered Securities.

In relation to proposals under the 2007 Bill to change the deﬁnition of duration to a weighted average term to maturity basis, see paragraph 7 under the heading ‘‘The 2007 Bill: Legislative proposals to amend the Act.’’

The Financial Regulator published the Asset Covered Securities Act, 2001 Regulatory Notice (Section 47(10)) on August 13, 2002. Paragraph 3 of that notice states that the weighted average duration of the Pool of an Institution must not be more than 3 years greater than the weighted average duration of the Asset Covered Securities issued by that Institution. Formulae for the purposes of determining the ‘‘duration’’ of public credit assets, cover assets hedge contracts, Asset Covered Securities and Pools are set forth in the Schedule to that notice.

Valuation of Assets Held by an Institution The prudent market value of a public credit asset included in the Pool maintained by an Institution is an amount denominated in the currency in which the related public credit is denominated, equal to 100 percent (or such other percentage as may be speciﬁed by regulations made by the Financial Regulator (although, as of the date of this Prospectus, no relevant regulations have been made)) of the principal or nominal amount of that public credit that is outstanding on the date that the asset is included in the Pool.

The Financial Regulator may specify, by regulatory notice, further requirements in relation to the valuation basis and methodology, time of valuation and any other matter that it considers relevant for determining the prudent market value of public credit assets for the purposes of the Act. The Act also empowers the Financial Regulator to specify, by regulatory notice, requirements in relation to the valuation basis and methodology, time of valuation and any other matter that it considers relevant for determining the prudent market value of substitution assets, Tier 2 assets, credit transaction assets, or the total assets held by an Institution for the purposes of the Act.

The Financial Regulator published the Asset Covered Securities Act, 2001 Regulatory Notice (Section 56(3) and Section 56(5)) on August 13, 2002. In that notice, the Financial Regulator speciﬁed requirements in relation to the valuation basis and methodology and time of valuation of substitution assets, Tier 1 assets, Tier 2 assets, credit transaction assets and total assets.

Restrictions on Replacement of Underlying Assets Included in the Pool A public credit asset or substitution asset may replace an underlying asset (deﬁned in relation to a Pool as a public credit asset or substitution asset that is then included in the Pool) only if the replacement has been approved by the Monitor.

An Institution is required to replace an underlying asset with a public credit asset or substitution asset if the underlying asset contravenes or fails to comply with a provision of the Act, the regulations made by the Financial Regulator under the Act or a requirement of the Financial Regulator or the Monitor made under the Act.

Subject to obtaining the consent of its Monitor, an Institution is permitted in any other case to replace an underlying asset with a public credit asset or substitution asset, provided that the replacement is not prohibited by

27 a provision of the Act, the regulations made by the Financial Regulator under the Act or a requirement of the Financial Regulator.

In general, an Institution may not replace an underlying asset with a public credit asset or a substitution asset if the asset would not have been eligible for initial inclusion in the Pool.

Restrictions on Inclusion of Substitution Assets in the Pool The total prudent market value of all substitution assets included in the Pool may not exceed 20 percent of the total prudent market value of all cover assets in the Pool, or such other percentage as the Minister for Finance may prescribe. The Financial Regulator may, however, suspend the above ratio requirement if it is satisﬁed that to do so would facilitate the discharge of secured claims (that is, claims in respect of which the rights of a preferred creditor are secured under Part 7 of the Act – see ‘‘Insolvency of Institutions’’ below) against the Institution.

The Financial Regulator has prescribed by regulation the following kinds of substitution assets that may be included in a Pool:

(a) Tier 1 assets having a maximum term to maturity of three months from the date upon which they are approved by the Monitor for inclusion in the Pool and entered into the register of public credit covered securities business; and

(b) deposits with eligible ﬁnancial institutions in each case having a maximum term of deposit of three months from the date upon which they are approved by the Monitor for inclusion in the Pool and entered into the register of public credit covered securities business.

Use of Realized Proceeds of Cover Assets Money received by an Institution as the proceeds of realizing a Cover Asset forms part of the Pool until (i) it is used to create or acquire permitted public credit assets or substitution assets for inclusion in the Pool, (ii) it is used to discharge secured claims under the Act (see ‘‘Insolvency of Institutions’’ below), (iii) it is released from the Pool as an underlying asset and is replaced by other public credit assets or substitution assets, or (iv) it is released from the Pool in accordance with the Act.

Release of Underlying Assets from the Pool An Institution may, with the prior consent of the Monitor, release underlying assets from the Pool if the assets are not required to be included in the Pool to secure secured claims.

Register of Public Credit Covered Securities Business An asset is, except as indicated under ‘‘– Use of Realized Proceeds of Cover Assets’’ above, included in, or removed from, a Pool when the appropriate particulars are recorded in the register of public credit covered securities business maintained by the Institution (the ‘‘Register’’).

An Institution is required to establish and keep a Register in respect of:

(a) the Asset Covered Securities it has issued;

(b) the cover assets hedge contracts (see ‘‘– Cover Asset Hedge Contracts’’ below) that it has entered into; and

(c) the public credit assets and substitution assets that it holds as security for those Asset Covered Securities and contracts.

An Institution is required at all times to provide access to the Register to the Financial Regulator and the Monitor appointed in respect of such Institution, and to permit each such person to take copies of the Register or any entry in the Register at such Institution’s expense.

28 Cover Assets Hedge Contracts An Institution is permitted under the Act to enter into certain hedging contracts related to its permitted activities including the maintenance of its Pool and the issuance of Asset Covered Securities. Those contracts that relate only to certain Cover Assets and Asset Covered Securities and are comprised in the Pool are called ‘‘cover assets hedge contracts.’’ A cover assets hedge contract entered into by an Institution may relate only to:

(a) Asset Covered Securities issued by the Institution; and (b) public credit assets or substitution assets that are included in the Pool maintained by that Institution. A cover assets hedge contract must state, among other things, that it is a cover assets hedge contract entered into in accordance with the Act, and a cover assets hedge contract must comply with the requirements (if any) speciﬁed in any relevant regulatory notice published by the Financial Regulator. As of the date of this Prospectus, the Financial Regulator has not published a regulatory notice specifying any such requirements. As soon as practicable after entering into a cover assets hedge contract, an Institution is required to ensure that particulars of the contract are entered into the Register. An Institution must remove from its Register a cover assets hedge contract if the contract has been discharged or the counterparty has so agreed.

The 2007 Bill proposes to recognise collateral posted by a counterparty under a cover assets hedge contract as a separate asset class and to provide for a register of such collateral, see paragraph 5 under the heading ‘‘The 2007 Bill: Legislative proposals to amend the Act.’’

Financial Statements of an Institution An Institution must include in its annual ﬁnancial statements the names of the countries in which the public credit assets included in its Pool are located and the number and percentage of those assets located in those countries as of the date to which the ﬁnancial statements are made up. An Institution must also include such other information as may be prescribed by the regulations made by the Financial Regulator. As of the date of this Prospectus, no such regulations have been made by the Financial Regulator.

29 THE 2007 BILL: LEGISLATIVE PROPOSALS TO AMEND THE ACT

On 21 February 2007, the Government of Ireland presented to the Irish legislature proposals to amend the Act under the Asset Covered Securities (Amendment) Bill 2007 (the ‘‘2007 Bill’’). The Recast Codiﬁed Banking Directive contains requirements which covered bonds such as the Securities must meet in order to be recognised as covered bonds for the purposes risk weighting and certain other purposes of the Recast Codiﬁed Banking Directive. The Issuer understands from Irish Government publications relating to the Bill and from the terms of the 2007 Bill, that the 2007 Bill is intended to give effect to these requirements in Irish law.

The changes to the Act proposed under the 2007 Bill and which are relevant to Institutions can for the most part be categorised into three main types as follows:

(a) Changes required to ensure that Asset Covered Securities will qualify as covered bonds for the purposes of the Recast Codiﬁed Banking Directive.

(b) Technical changes which clarify provisions of the Act or facilitate the more ﬂexible operation of requirements of the Act.

The changes to the Act proposed under the 2007 Bill which are applicable to Institutions and the Issuer considers most relevant to highlight, are summarised below:

1. Financial obligations of Australia and New Zealand and multi-lateral development banks and international organisations which qualify as such for the purposes of the Recast Codiﬁed Banking Directive are proposed to be capable of being included in the Pool.

2. The risk weighting and tax raising criteria for eligibility of public credit assets under the Act are proposed to be removed and a definition of public sector entity is proposed to be introduced to meet the covered bond definition requirements of the Recast Codified Banking Directive.

3. The criteria under the Act that determines which public credit assets may be included in the Pool are proposed under the 2007 Bill to be amended as follows:

(i) the current restriction which limits the aggregate prudent market value of public credit assets or substitution assets located in countries outside of the EEA (‘‘Non EEA public credit assets’’)inthe Pool to 15% of the aggregate prudent market value of all public credit assets and substitution assets comprised in the Pool, is proposed to be removed;

(ii) public credit assets constituting claims against a multilateral development bank or an international organisation or Non EEA public credit assets comprising claims against a central government or central bank, are proposed to have to meet creditworthiness standards speciﬁed by the Financial Regulator by regulatory notice. Under the Recast Codiﬁed Banking Directive, the applicable credit worthiness criteria would be Step 1 for Basel II purposes. If the Bill is enacted in law, the Issuer expects the Financial Regulator to adopt that criteria;

(iii) Non EEA public credit assets the obligor under which is a public sector entity, regional government or local authority are proposed to have to meet creditworthiness criteria (which the Issuer expects to be Step 1 for Basel II purposes as set out in sub-paragraph (ii) above) and risk weighting standards speciﬁed by the Financial Regulator by regulatory notice. Under the Recast Codiﬁed Banking Directive, the applicable risk weighting standards would be as exposures to credit/investment institutions or central governments and central banks. If the 2007 Bill is enacted in law, the Issuer expects the Financial Regulator to adopt those criteria and standards;

(iv) public credit assets referred to at sub-paragraphs (ii) or (iii) above which do not meet the restrictions referred to at sub-paragraphs (ii) or, as applicable (iii) above, may under the 2007 Bill’s proposals still be included in the Pool where:

30 (A) such assets comply with creditworthiness criteria and risk weighting standards which may be speciﬁed in a regulatory notice by the Financial Regulator. Under the Recast Codiﬁed Banking Directive, the applicable creditworthiness criteria would be Step 2 for Basel II purposes and in the case of public credit assets of the kind referred to at sub-paragraph (iii) above, the risk weighting standards referred to in that sub-paragraph. If the 2007 Bill is enacted in law, the Issuer expects the Financial Regulator to adopt those criteria and standards; and

(B) the total aggregate nominal or principal amount of all such assets comprised in the Pool does not at any time exceed 20% of the aggregate nominal or principal amount of outstanding Asset Covered Securities issued by the Institution.

4. Assets which comprise public credit assets in part may under the 2007 Bill’s proposals be treated as public credit assets under the Act but, in the case of ﬁnancial matching requirements and contractual or mandatory regulatory overcollateralisation (as to which see sub-paragraph 8 below) of relevant Cover Assets with respect to Asset Covered Securities, only to the extent that the asset comprises public credit.

5. The 2007 Bill proposes to recognise pool hedge collateral as a distinct class of assets that can be held by an Institution separate from other such classes such as public credit assets or substitution assets. Pool hedge collateral under the 2007 Bill’s proposals is collateral posted with an Institution by a counterparty under a cover assets hedge contract. Maintenance of a register of pool hedge collateral by Institutions will be required under the 2007 Bill’s proposals. Pool hedge collateral under the 2007 Bill proposals will not form part of the Pool for the purposes of ﬁnancial matching or contractual or mandatory regulatory overcollateralisation (as to which see sub-paragraph 8 below) of Cover Assets with respect to Asset Covered Securities, but will be protected as Cover Assets in certain events such as insolvency of Institutions.

6. The limit on the level of Asset Covered Securities issued by an Institution at any time to ﬁfty times the Institution’s level of own funds (regulatory capital) is proposed to be removed under the 2007 Bill.

7. The deﬁnition of duration under the Act is proposed to be amended under the 2007 Bill so that it applies on the basis of a weighted average term to maturity (rather than a discounted weighted average term to maturity as applies under the Act) of the principal amount of the public credit assets and substitution assets comprised in the Pool or, as applicable, Asset Covered Securities.

8. A minimum mandatory level of regulatory overcollateralisation of 3% of relevant Cover Assets with respect to Asset Covered Securities secured on the Pool will under the 2007 Bill’s proposals be required as determined by reference to the present value of public credit assets and substitution assets comprised in the Pool expressed as a percentage of the present value of Asset Covered Securities secured on the Pool. Higher overcollateralisation levels undertaken by Institutions in contractual arrangements will not be affected under the 2007 Bill’s proposals.

9. The inclusion of substitution assets in the Pool will under the 2007 Bill’s proposals be restricted to substitution assets which meet creditworthiness criteria specified in a regulatory notice by the Financial Regulator and by restricting the total prudent market value of all substitution assets comprised in the Pool at anytime to 15% of the aggregate nominal or principal amount of outstanding Asset Covered Securities secured on the Cover Assets Pool. Under the Recast Codified Banking Directive, the applicable criteria is Step 1 or, where the maturity of the substitution asset does not exceed 100 days, Step 2 for Basel II purposes. If the Bill is enacted in law, the Issuer expects the Financial Regulator to adopt those criteria. The Act currently limits the aggregate prudent market value of substitution assets in the Pool to 20% of the aggregate prudent market value of all public credit assets and substitution assets comprised in the Pool. This proposed change is to meet the definition of covered bond set out in the Recast Codified Banking Directive.

31 RESTRICTIONS ON THE ACTIVITIES OF AN INSTITUTION

An Institution may not carry on a business activity other than a permitted business activity (see below), although entities which hold dual-designation (relating to both public credit and mortgage credit activities) may carry out the permitted activities in respect of both those designations.

Permitted Business Activities in which an Institution may Engage The permitted business activities in which an Institution may engage (subject to the restrictions described below) are:

(a) providing public credit and dealing in and holding public credit assets;

(b) dealing in and holding substitution assets;

(d) dealing in and holding credit transaction assets;

(e) dealing in and holding Tier 2 assets;

(f) engaging in activities connected with ﬁnancing or reﬁnancing the foregoing classes of assets;

(g) entering into certain hedging contracts for the purpose of hedging risks associated with the foregoing activities; and

(h) engaging in activities that are incidental or ancillary to the foregoing activities.

Categories (a) and (b) are discussed above – see ‘‘Cover Assets Pool.’’ An explanation of certain of the categories of permitted business activities is set out below.

Permitted Business Activities – (d) Dealing in and Holding Credit Transaction Assets The Act deﬁnes a ‘‘credit transaction asset’’ as an asset derived from having engaged in a credit transaction. A ‘‘credit transaction’’ is deﬁned as:

(a) placing a deposit with a ﬁnancial institution which has been designated as eligible for such purposes by order made by the Financial Regulator (see below);

(b) dealing with or holding a ﬁnancial asset; or

(c) any other kind of transaction designated as such by the Minister for Finance by order. At the date of this Prospectus no relevant order has been made.

A‘‘ﬁnancial asset’’ is deﬁned to include shares, gilts, bonds, derivatives and debt portfolios.

Regarding paragraph (a) above, the Financial Regulator has designated by order the following ﬁnancial institutions as eligible ﬁnancial institutions:

(a) (i) any credit institution which is authorized within Ireland or any other EEA country, or

(ii) a bank which is authorized to receive deposits or other repayable funds from the public and is located in Canada, Japan, the Swiss Confederation, the United States of America, and

(b) which is rated by:

(i) Moody’s Investor Service at A1 or higher in respect of its long term debt, or P-1 in respect of its short term debt (the ‘‘Moody’s rating’’), or

(ii) Standard & Poor’s Corporation at a rating equivalent to the Moody’s rating, or

32 (iii) Fitch Investors Services L.P. at a rating equivalent to the Moody’s rating, or a rating agency acceptable to the Authority for this purpose at a rating equivalent to the Moody’s rating.

Permitted Business Activities – (e) Dealing in and Holding Tier 2 Assets A Tier 2 asset is deﬁned as an asset which qualiﬁes as a Tier 2 asset for the purposes of the European System of Central Banks’ monetary policy operations.

Permitted Business Activities – (f) Engaging in Activities Connected with Financing or Refinancing the Foregoing Classes of Assets The activities referred to in relation to the financing or re-financing of an Institution’s assets include (but are not limited to):

(a) taking deposits or other repayable funds from the public; and

(b) issuing Asset Covered Securities (see further below).

Permitted Business Activities – (g) Entering into Certain Hedging Contracts for the Purpose of Hedging Risks Associated with the Foregoing Activities An Institution may enter into one or more contracts (‘‘Hedging Contracts’’) the purpose or effect of which is to reduce or minimize the risk of ﬁnancial loss or exposure liable to arise from:

(a) ﬂuctuations in interest rates or currency exchange rates;

(b) credit risks; or

The Financial Regulator may, by regulatory notice, specify requirements as to:

(a) the kind of Hedging Contracts; and

(b) the terms and conditions under which Hedging Contracts, or any class of those contracts, may be entered into.

As at the date of this Prospectus, no such regulatory notice has been published by the Financial Regulator.

Special provision is made for Hedging Contracts which relate to the Pool maintained, and Covered Securities issued, by an Institution. Those Hedging Contracts when recorded in the Register are referred to in the Act as ‘‘cover assets hedge contracts.’’ The provisions of the Act relating to those contracts are described further under the headings ‘‘Cover Assets Pool – Cover Assets Hedge Contracts’’ and ‘‘Insolvency of Institutions.’’

General Restrictions on Certain Types of Permitted Business Activities The Act speciﬁes limitations on the level of public credit assets or substitution assets held by an Institution in the course of its general business activities which may be located in category B countries. The total prudent market value of public credit assets or substitution assets located in category B countries held by the Institution, expressed as a percentage of the total prudent market value of all the public credit assets and substitution assets held by the Institution, may not exceed ten percent (or such other percentage as may be speciﬁed by an order of the Minister for Finance) of the total prudent market value of all of the public credit assets and substitution assets held by the Institution.

An Institution is required to ensure that the total value of the credit transaction assets and Tier 2 assets that it holds, expressed as a percentage of the total value of all of the Institution’s assets, does not at any time exceed ten percent (or such other percentage as may be speciﬁed by an order of the Minister for Finance (although, as at the date of this Prospectus, no relevant order has been made)) of the total value of all of the Institution’s assets. In relation to valuations of assets of an Institution, see ‘‘Cover Assets Pool – Valuation of Assets Held by an Institution.’’

33 The Financial Regulator, by giving notice in writing to an Institution, may impose on an Institution or on any class of Institutions, requirements or restrictions as to the kinds of credit transaction assets or Tier 2 assets that the Institution or class of Institutions may hold.

An Institution may not issue further Asset Covered Securities if the total of the principal amounts of all such Asset Covered Securities currently issued by the Institution would, after the issue of those further Asset Covered Securities, exceed a multiple of 50 (or such other multiple as the Minister for Finance may specify by order) times the Institution’s own funds (as determined in accordance with the EU Codiﬁed Banking Directive). Under the 2007 Bill it is proposed to remove the 50 times own funds limitation referred to above. See paragraph 6 under the heading ‘‘The 2007 Bill: Legislative proposals to amend the Act.’’

34 THE COVER-ASSETS MONITOR

Appointment of a Cover-Assets Monitor The Act requires every Institution to appoint a qualiﬁed person (see ‘‘– Qualiﬁcations of a Monitor’’) to be a cover-assets monitor (a ‘‘Monitor’’)inrespect of the Institution. An appointment of a Monitor by an Institution does not take effect until it is approved in writing by the Financial Regulator. The Institution is responsible for paying any remuneration or other money payable to its Monitor in connection with the Monitor’s responsibilities in respect of the Institution.

Monitor in Respect of the Issuer The Monitor appointed in respect of the Issuer at the date of this Prospectus is AIB International Financial Services Limited, an afﬁliate of Allied Irish Banks plc of Dublin, Ireland. The Financial Regulator has approved the appointment of AIB International Financial Services Limited as Monitor in respect of the Issuer. The terms on which AIB International Financial Services Limited has been appointed and acts as Monitor in respect of the Issuer are set out in an agreement entered into between AIB International Financial Services Limited and the Issuer (the ‘‘Cover-Assets Monitor Agreement’’). The Cover-Assets Monitor Agreement reﬂects the requirements of the Act in relation to the appointment of a Monitor in respect of an Institution and provides for certain matters, such as Overcollateralization (see ‘‘– Maintenance of Overcollateralization’’), the payment of agreed fees and expenses by the Issuer to AIB International Financial Services Limited, the resignation of AIB International Financial Services Limited as Monitor in respect of the Issuer (see ‘‘– Resignation of a Monitor’’) and the replacement by the Issuer of AIB International Financial Services Limited as its Monitor.

AIB International Financial Services Limited AIB International Financial Services Limited (‘‘AIBIFS’’) was established in 1988 and is a wholly owned subsidiary of AIB Capital Markets plc, which in turn, is a wholly-owned subsidiary of Allied Irish Banks plc. AIBIFS is authorized and regulated by the Financial Regulator under the Irish Investment Intermediaries Act, 1995 and operates subject to AIB corporate group regulatory requirements and AIB banking group policies in terms of regulatory reporting, operational risk and best business practice. AIBIFS is involved in the provision of outsourced ﬁnancial and related services for a global client base. AIBIFS administers transactions in Luxembourg, Hungary, the United Kingdom, Switzerland and Ireland.

Maintenance of Overcollateralization The terms and conditions applicable to the Securities require the Issuer to maintain Overcollateralization of the Pool with respect to all of the Issuer’s Asset Covered Securities in issue from time to time at a minimum level of ﬁve percent. AIBIFS has agreed in the Cover-Assets Monitor Agreement to monitor compliance by the Issuer with its undertaking regarding the level of Overcollateralization. AIBIFS, in its capacity as Monitor, is also required by the regulations made by the Financial Regulator under the Act to have regard to contractually agreed levels of Overcollateralization and to monitor the relevant Institution’s observance of these levels.

In this context, ‘‘Overcollateralization’’ of the Pool with respect to Asset Covered Securities means the amount by which the prudent market value of the Pool (see ‘‘Cover Assets Pool – Valuation of Assets Held by an Institution’’) exceeds the total outstanding principal amount of Asset Covered Securities. See ‘‘Cover Assets Pool – Financial Matching Criteria for the Pool and Asset Covered Securities.’’

Since the Monitor must have regard to contractual undertakings with respect to Overcollateralization when performing its functions under the Act, the Monitor could not agree to the removal or substitution of public credit or substitution assets in the Pool if the result of such removal or substitution was that the then current level of Overcollateralization would not be satisﬁed. In addition, the Monitor is required to take reasonable steps to verify compliance by the Issuer with contractual undertakings in respect of Overcollateralization before the issue of any Asset Covered Securities, including the Securities.

Qualifications of a Monitor The Financial Regulator has specified in a regulatory notice that the qualifications for an appointment as a Monitor in respect of an Institution are:

35 (a) a Monitor must be a body corporate or partnership, comprising personnel and partners respectively who are members of a professional representative body. The Monitor must demonstrate to the satisfaction of the Financial Regulator that it is experienced and competent in the following areas:

(i) ﬁnancial risk management techniques;

(ii) regulatory compliance reporting; and

(iii) capital markets, derivatives, public credit business and mortgage credit business as applicable;

(b) a Monitor must demonstrate that it has sufficient resources at its disposal, and its personnel or partners must have sufficient academic or professional qualifications and experience in the financial services industry to satisfy firstly the Institution and secondly the Financial Regulator, that it is capable of fulfilling this role;

(d) the books and records of a Monitor must be held in Ireland;

(e) a Monitor must not be an afﬁliate of the Institution or of any afﬁliate of the Institution;

(f) a Monitor or any of its affiliates must not be engaged as auditor or legal advisor to the Institution or any of its affiliates or (except where it is established to the satisfaction of the Financial Regulator that it will not create any relevant conflict of interest) provide other services to the Institution or any affiliate of the Institution;

(g) a Monitor must not hold any shares or similar interest in the Institution or in any afﬁliate of the Institution; and

(h) except as permitted by the Act, the regulations and any regulatory notices or orders made under the Act, a Monitor must not be involved in any decision-making function or directional activity of the Institution or any of its affiliates, which could unduly influence the judgement of management of the Institution or its affiliates.

Duties of the Monitor before an Institution issues Asset Covered Securities Before an Institution issues Asset Covered Securities or enters into a cover assets hedge contract, the Monitor must take reasonable steps to verify:

(a) that the Institution will be in compliance with the ﬁnancial matching requirements of the Act with respect to the Pool and Asset Covered Securities and will not be in contravention of the requirements in respect of location of Cover Assets or of the restrictions on the inclusion of substitution assets in the Pool as a result of issuing the Asset Covered Securities or entering into the hedge contract;

(b) that the Institution will comply with the requirements of the Act with respect to keeping its Register; and

(c) such other matters relating to the business of Institutions as may be prescribed by regulations made by the Financial Regulator.

In relation to (c) above and matters in respect of which regulations have been made by the Financial Regulator, see ‘‘Maintenance of Overcollateralization.’’

Continuing Duties of the Monitor The Monitor is responsible for monitoring the Institution’s compliance with the provisions of the Act relating to ﬁnancial matching criteria for the Pool and Asset Covered Securities, replacement of Cover Assets in

36 the Pool, inclusion of substitution assets in the Pool, maintenance of the Institution’s Register and such other matters as may be prescribed by regulations made by the Financial Regulator.

Under regulations adopted by the Financial Regulator, the Monitor is also responsible for monitoring the Institution’s compliance with regulations regarding sensitivity to interest rate changes and with any contractual undertakings given by the Institution to maintain a level of Overcollateralization of Cover Assets as against Asset Covered Securities.

Duty of the Monitor to Inform the Financial Regulator of Certain Matters As soon as practicable after the Monitor has become aware, or has formed a reasonable suspicion, that the Institution in respect of which it has been appointed has contravened or failed to comply with a provision of the Act (which includes regulations made by the Financial Regulator under the Act) that relates to the responsibilities of the Monitor, the Monitor is required to provide the Financial Regulator with a written report of the matter. The Monitor is also required to provide the Financial Regulator with reports and information as requested from time to time by the Financial Regulator regarding the Institution’s compliance or non-compliance with the provisions of the Act that relate to the responsibilities of the Monitor.

Power of the Monitor to Enter an Institution’s Business Premises/Obtain Information from an Institution A Monitor may, upon giving the Institution in respect of which it has been appointed reasonable notice, enter at any reasonable time during ordinary business hours any place at which the Institution carries on its business for the purpose of carrying out the Monitor’s responsibilities in relation to the Institution.

A Monitor may also, by notice in writing to the relevant Institution, require it to give to the Monitor, within such period as may be speciﬁed in the notice, any speciﬁed information or record that relates to the responsibilities of the Monitor in respect of the Institution, but only if the information or record is in the possession or under the control of the Institution.

Duties of an Institution to Inform its Monitor of Certain Matters An Institution is required to keep its Monitor informed of the following matters:

(a) particulars of payments received by the Institution in respect of Cover Assets included in the relevant Pool, and at such times or intervals, as the Monitor requires;

(b) any failure of any person who has a ﬁnancial obligation in respect of those assets which are public credit assets or substitution assets to perform the obligation within 10 days (or such other period as may be speciﬁed in a regulatory notice published by the Financial Regulator) after it was due to be performed; and

(c) any proceedings brought in relation to those Cover Assets against any such person by or on behalf of the Institution.

An Institution that, without reasonable excuse, fails to provide its Monitor with the above information commits an offence and is liable on summary conviction to a ﬁne not exceeding E1,000.

Priority of a Monitor on an Insolvency of the Institution The Monitor of an Institution, along with any manager that has been appointed to the Institution, constitute ‘‘super-preferred’’ creditors of the Institution. The claims of super-preferred creditors rank ahead of those of any other preferred creditors (including holders of Asset Covered Securities). For a description of the priority afforded to the claims of preferred creditors of an Institution on the insolvency of such Institution, see ‘‘Insolvency of Institutions’’ below.

Termination of Appointment of a Monitor by an Institution An Institution may terminate the appointment of its Monitor only with the written consent of the Financial Regulator. The Financial Regulator may direct an Institution to terminate the appointment of its Monitor and to appoint another qualiﬁed person in place of that Monitor. The notice issued by the Financial Regulator making that direction must specify the Financial Regulator’s reasons.

37 Resignation of a Monitor A Monitor may resign by giving at least 30 days’ notice in writing to the Financial Regulator (unless the Financial Regulator agrees to a shorter notice period) and must include in such notice a statement of the reasons for its resignation. In the Cover-Assets Monitor Agreement, AIBIFS has agreed that it will not resign as Monitor in respect of the Issuer unless another entity has agreed to act as Monitor in respect of the Issuer and the Financial Regulator has approved the appointment of such other entity as Monitor in respect of the Issuer in place of AIBIFS; provided that if a replacement Monitor has not been appointed within six months of AIBIFS having given notice of its intention to resign as Monitor, then AIBIFS shall be entitled to resign as Monitor notwithstanding that no replacement Monitor has been appointed.

Effect of the Insolvency of an Institution on the Appointment of its Monitor The fact that an Institution, or its parent entity or any company related to the Institution, has become insolvent or potentially insolvent (within the meaning of the Act) does not affect the appointment of the Monitor appointed in respect of it and the claims and rights of the Monitor in so far as those claims or rights relate to the appointment or arise under the Act.

The obligations of the Institution towards the Monitor continue to have effect in relation to the Institution, and be enforceable, despite the Institution, or its parent entity or a company related to the Institution, becoming subject to an insolvency process.

Limitation on the Civil Liability of a Monitor The Monitor, ofﬁcers and employees of the Monitor, and persons acting under the direction of the Monitor are not liable in any civil proceedings for any act done, or omitted to be done, by the person for the purposes of, or in connection with, performing or exercising any function or power imposed or conferred on the Monitor by or under the Act if the act was done, or was omitted, in good faith for the purposes of the Act.

38 INSOLVENCY OF INSTITUTIONS

With respect to Institutions, Part 7 of the Act supersedes the usual provisions of law that address insolvency of Irish companies and banks. Certain insolvency provisions relating to fraud continue to have effect, in addition to any enactment or rule of law that would render the security or contract void or unenforceable on the grounds of fraud or misrepresentation.

Effect of Insolvency or Potential Insolvency on Certain Obligations The fact that an Institution or its parent entity or any company related to the Institution has become insolvent or potentially insolvent does not affect:

(a) the claims and rights of holders of Asset Covered Securities issued by the Institution;

(b) the claims and rights of a person (other than the holder of an Asset Covered Security issued by the Institution) who has rights under or in respect of any such Asset Covered Security by virtue of any legal relationship with the holder;

(c) the claims and rights that the other contracting party has under any cover assets hedge contract entered into by the Institution;

(d) the appointment of a Monitor and the relevant claims and rights of such Monitor in so far as those claims and rights relate to the appointment or arise under the Act. For a description of the role of a Monitor, see ‘‘The Cover-Assets Monitor’’;

(e) the appointment of a manager in respect of the Institution and the relevant claims and rights of such manager in so far as those claims and rights relate to the appointment or arise under the Act. For a description of the circumstances in which a manager may be appointed to an Institution, see ‘‘– Power of the Financial Regulator to Appoint the NTMA or a Recommended Person as Manager of an Institution’’; or

(f) the functions of the National Treasury Management Agency under Part 6 of the Act and the relevant claims and rights of the National Treasury Management Agency in so far as those claims and rights relate to those functions. See ‘‘– Power of the Financial Regulator to Appoint the NTMA or a Recommended Person as Manager of an Institution.’’

Treatment of Overcollateralization Undertakings Where an Institution enters into a contractual undertaking with the Monitor appointed to it that it will maintain speciﬁed levels of Overcollateralization, then:

(a) prior to the occurrence of an insolvency process with respect to the Institution, the Monitor cannot agree to the removal from the Pool of public credit assets or substitution assets that represent Overcollateralization if that removal would result in speciﬁed Overcollateralization levels being breached; and

(b) on the occurrence of an insolvency process with respect to the Institution, the Monitor cannot agree to the removal from the Pool of public credit assets or substitution assets that represent Overcollateralization (so as to make them available to creditors of the Institution other than preferred creditors) prior to all claims of preferred creditors secured by Part 7 of the Act being satisﬁed in full (see ‘‘– Preferred and Super-Preferred Creditors’’)ifthat removal would result in the speciﬁed Overcollateralization levels being breached.

Regarding the meaning of ‘‘Overcollateralization’’ for the above purposes, see ‘‘The Cover-Assets Monitor Maintenance of Overcollateralization.’’

Preferred and Super-Preferred Creditors Where an Institution, or its parent entity or any company related to the Institution becomes subject to an insolvency process, preferred creditors are, for the purpose of satisfying their claims and rights under Part 7 of the

39 Act, entitled to have recourse to the Cover Assets that are included in the Pool maintained by the Institution ahead of members of, and contributors to, the Institution and all other creditors of the Institution, its parent entity or company related to the Institution. This provision applies irrespective of whether the claims of creditors other than preferred creditors are preferred under any other enactment or any rule of law and whether those claims are secured or unsecured. However, with regard to the possible recognition of creditors’ rights of set-off against Cover Assets in certain circumstances, see below under ‘‘Recent Developments in European and Irish Insolvency Law.’’

‘‘Preferred creditors’’ are deﬁned in the Act as all or any of the following persons:

(a) the holder of outstanding Asset Covered Securities issued by the Institution;

(b) a person (other than the holder) who has rights under or in respect of any such Asset Covered Security by virtue of any legal relationship with the holder;

(c) a person with whom the Institution has entered into a cover assets hedge contract, but only if the person is in compliance with the ﬁnancial obligations imposed under the contract; and

(d) a person who is a super-preferred creditor in relation to the Institution.

The claims of a super-preferred creditors rank ahead of those of the other preferred creditors. ‘‘Super- preferred creditors’’ are deﬁned in respect of an Institution as a Monitor or manager appointed in respect of that Institution.

The claims of the super-preferred creditors and the other preferred creditors have effect irrespective of when the security, contract or appointment of the Monitor or manager giving rise to a claim was issued or made, of when a claim of a preferred creditor arose and of the terms of that security, contract or appointment.

Power of the Financial Regulator to Appoint the NTMA or a Recommended Person as Manager of an Institution The Financial Regulator may appoint the National Treasury Management Agency (the ‘‘NTMA’’) or a person recommended by the NTMA as manager of an Institution in the event of the insolvency or potential insolvency of an Institution or to safeguard the interests of holders of Asset Covered Securities, persons who have rights under cover asset hedge contracts or other creditors of the Institution.

In the event that an Institution or its parent or a related company becomes subject to an insolvency process, the obligation of the Institution to appoint a Monitor, and the powers of the Financial Regulator and the NTMA with respect to the appointment of a manager, continue to have effect until the claims of all preferred creditors have been fully satisﬁed and the functions of each relevant Monitor and manager appointed in respect of the Institution have been fully discharged.

Status of Cover Assets Cover Assets that are included in the Pool are excluded from forming part of the assets of an Institution, its parent or a related company, for the purposes of any insolvency process until the claims secured by Part 7 of the Act are fully discharged.

Cover Assets that are included in the Pool are not liable to attachment, sequestration or other form of seizure, or to set-off by any persons, that would otherwise be permitted by law so long as claims secured under Part 7 of the Act remain unsatisﬁed. However, with regard to the possible recognition of creditors’ rights of set- off against Cover Assets in certain circumstances, see below under ‘‘Recent Developments in European and Irish Insolvency Law.’’

The Act provides that an Institution may not create a security interest in respect of any Cover Assets in the Pool if Asset Covered Securities are outstanding or if a cover assets hedge contract is in existence and if such security interest would, but for Part 7 of the Act, adversely affect the priority conferred by Part 7 of the Act on preferred creditors. If an Institution creates any such security interest, the interest is void and any money secured by it is repayable immediately. If a Cover Asset included in a Pool is subject to a security interest which would contravene this requirement, the relevant Institution is required to replace such Cover Asset.

40 To the extent that the claims of all preferred creditors are not fully satisﬁed from the proceeds of the disposal of the Cover Assets included in the Pool maintained by the relevant Institution, such creditors become unsecured creditors in the insolvency process relating to the Institution, the claims of the super-preferred creditors ranking above those of the other preferred creditors in this regard.

Dissolution of an Institution An Institution may not be dissolved under an insolvency process until the claims and rights of all preferred creditors have been fully satisﬁed. However, if the Irish High Court is satisﬁed that the Institution has no assets capable of meeting the claims and rights of those creditors, it may make an order dissolving the Institution.

Developments in European and Irish Insolvency Law Directive 2001/24/EC of the European Parliament and the Council of April 4, 2001 on the reorganisation and winding up of credit institutions (the ‘‘Directive’’) was required to be implemented into the national law of the member states of the European Community on May 5, 2004. It was implemented in Ireland by the European Communities (Reorganisation and Winding-up of Credit Institutions) Regulations 2004 (the ‘‘2004 Regulations’’)with effect from May 5, 2004.

The purpose of the Directive is to create uniﬁed proceedings for EU credit institutions that are subject to the imposition of reorganisation measures or the commencement of winding-up proceedings (as such terms are deﬁned in the Directive and the 2004 Regulations). The Directive provides that, with some exceptions and exclusions, the application of reorganisation measures to, or the winding-up of, a credit institution (including in respect of its branches in other Member States) will be effected in accordance with the national law of its ‘‘home’’ Member State (the Member State in which it has been authorised as a credit institution). It also provides that only the administrative or judicial authorities in that home Member State can authorise the implementation of reorganisation measures or the opening of winding up proceedings in respect of the credit institution, including branches in other Member States.

To this end, the 2004 Regulations provide, among other things, that the ‘‘relevant applicable enactment’’ applies to and in relation to a reorganisation measure imposed, or to be imposed, in respect of an ‘‘authorised credit institution’’ (except as otherwise provided by the 2004 Regulations) and also applies to proceedings to wind up an ‘‘authorised credit institution’’.

An ‘‘authorised credit institution’’ is deﬁned in the 2004 Regulations as including the holder of a licence under section 9 of the Irish Central Bank Act 1971, as amended, which would include an Institution. The term ‘‘relevant applicable enactment’’ would in the context of an Institution include the Act. Therefore, the 2004 Regulations conﬁrm, subject as described below, that the Act will apply to any reorganisation measure imposed or to be imposed, or any proceedings to wind up, an Institution.

Reﬂecting the provisions of the Directive, the 2004 Regulations provide that reorganisation measures or winding-up proceedings in respect of an Irish authorised credit institution (which would include an Institution such as the Issuer) should not affect certain set-off rights of its creditors where such set-off is permitted by the law that applies to the institution’s claims. To the extent that such law is Irish law, a creditor of an Irish authorised credit institution which is subject to reorganisation measures or winding-up proceedings could only assert a right of set-off to the extent that Irish law would otherwise permit. With regard to the prohibition under the Act of set-off against Cover Assets comprised in the Pool maintained by an Institution, see Status of Cover Assets above. However, to the extent that the law that applies to any claim of a relevant credit institution, within the meaning of the 2004 Regulations, is a law other than Irish law, the 2004 Regulations, together with that law, may operate to displace provisions of Irish law prohibiting the exercise of a right of set-off by a creditor against the relevant credit institution, including, in the context of Cover Assets comprised in a Pool maintained by an Institution, the provisions of the Act referred to above.

It should be noted in this regard that neither the 2004 Regulations nor the Directive provide any guidance on the meaning of the term ‘‘the law applicable to the institution’s claim’’ and so, in the absence of any Irish or EU judicial authority on the point, it is not possible to conﬁrm, for example, whether this would comprise the governing law of the claim or, if different, the lex situs of the claim.

41 Consequences of Issuer’s Status as Unlimited Company The Issuer is an unlimited company. There is no limit on the liability of a then-current member (the registered shareholder of record) of an unlimited company to contribute to that company in an insolvent liquidation of the company to the extent that the company’s assets are insufﬁcient to meet its liabilities. In that event, the liquidator of the unlimited company or the court seeks the contributions from each of the members. A company’s unlimited status does not confer on the creditors of the company the right to seek payment of the company’s liabilities from the company’s members or to seek contributions for the company from the members in the event of the unlimited company becoming insolvent or otherwise. This right rests with the liquidator or the court on an insolvent winding-up. If the persons who are the members of an unlimited company at the date of commencement of the winding-up cannot contribute sufﬁciently to the assets of the company, the liquidator or the court may have recourse to persons who were members within one year before the winding-up commenced, although these former members will only be liable to contribute in respect of liabilities contracted by the company while they were members.

At the date of this Prospectus, DEPFA BANK plc is a member of the Issuer and the other members are all either direct or indirect wholly owned subsidiaries of DEPFA BANK plc. DEPFA BANK plc beneﬁcially owns the entire issued share capital of the Issuer. The Issuer is thus a wholly-owned subsidiary of DEPFA BANK plc. The Issuer’s liabilities under the Securities will be contracted by the Issuer on the date when the Securities are issued and their issue price is paid up in full. Although DEPFA BANK plc is not a guarantor of the Securities, the members of the Issuer on the date on which the Securities are issued and the issue price is paid up in full will be liable to contribute in respect of the Issuer’s liabilities in respect of the Securities on an insolvent winding-up of the Issuer (if the Issuer does not have sufﬁcient resources to discharge its liabilities in respect of the Securities in full) if they are still members of the Issuer at the date of the commencement of such winding-up, or if they were members of the Issuer within one year before such winding-up commenced.

42 SUPERVISION AND REGULATION

Introduction The Financial Regulator as part of the Central Bank and Financial Services Authority of Ireland is primarily responsible for the supervision and regulation of Institutions such as the Issuer.

Regulation of Institutions under Banking Legislation other than the Act Institutions are subject to regulation under Irish legislation and regulations relevant to all banking activities other than the activities regulated by the Act (such legislation and regulations being referred to herein as the ‘‘Irish Banking Code’’)inaddition to regulation under the Act in respect of the activities regulated thereby. See ‘‘– Irish Banking Code.’’

General Functions of the Financial Regulator The Act provides that the functions of the Financial Regulator are as follows:

(a) to designate credit institutions for the purposes of the Act;

(b) to administer the system of supervision and regulation of designated credit institutions in accordance with the Act in order to promote the maintenance of the proper and orderly regulation and supervision of those institutions; and

In addition, the Financial Regulator is given a general power to do all things necessary or expedient to be done for or in connection with, or incidental to, the performance of its functions.

Irish Banking Code As an Irish incorporated credit institution authorized by the Financial Regulator under the Irish Banking Code, an Institution is subject to the regulatory and supervision requirements of the Irish Banking Code as well as those under the Act. Banking activities in Ireland are regulated and supervised by the Financial Regulator. The Irish Banking Code consists primarily of the Central Bank Acts, 1942 to 2001, the Central Bank and Financial Services Authority of Ireland Acts 2003 and 2004, regulations made by the Irish Minister for Finance under the European Communities Act, 1972, and regulatory notices issued by the Financial Regulator. These ministerial regulations and regulatory notices implement EU directives relating to banking regulation, including the First and Second Banking Co-ordination Directives, the Deposit Guarantee Scheme Directive, the Large Exposures Directive, the Capital Adequacy Directive, the Own Funds Directive, the Solvency Ratio Directive, the Consolidated Supervision Directive and the Post BCCI Directive. Most of the above EU directives were consolidated and in some cases amended under the Recast Codified Banking Directive. At the end of 2006 the Recast Codified Banking Directive was implemented to the extent required under Irish law under the European Communities (Capital Adequacy of Credit Institutions) Regulations 2006. To the extent that areas of banking activity are the subject of EU directives, the provisions of Irish banking law reflect the requirements of those directives.

The Bank of International Settlements 1988 Accord (Basel 1) capital adequacy standards as adopted at EU level under the EU Own Funds/Solvency Ratio Directives form part of Irish banking law. Regulatory capital which is required to be held by an Irish bank to cover credit risks comprises Tier 1 (original own funds) and Tier 2 (additional own funds) capital. In the case of certain risks associated with an Irish bank’s trading book and foreign currency exchange risk, regulatory capital also includes Tier 3 (supplementary own funds) capital. The Recast Codified Banking Directive introduced Basel II capital adequacy standards as adopted in the EU. Pending full application of the Recast Codified Banking Directive capital adequacy standards, a minimum solvency ratio of eight percent applies to Irish licensed banks such as the Issuer. Under the Recast Codified Banking Directive capital adequacy standards, that ratio will continue to apply with respect to credit risk and dilution risk of all business activities, subject to certain exceptions. The Recast Codified Banking Directive also imposes regulatory capital requirements for trading book business, position risk, settlement and counterparty risk, large expenses, foreign exchange risk and operational risk.

43 As at the date of this Prospectus, liquidity requirements for EU credit institutions are not the subject matter of EU directives. In Ireland, the Financial Regulator, as a general rule, requires Irish licensed banks to hold a minimum ratio of liquid assets to total borrowings of 25 percent.

Changes to the Financial Regulator Under the Central Bank and Financial Services Authority of Ireland Act, 2003 (the ‘‘CBFSAIA’’), which came into force on May 1, 2003, regulation of banking activities (including those which are the subject of the Act), which was formerly carried on by the Central Bank of Ireland, was transferred to the new Irish Financial Services Regulatory Authority, which forms part of a single ﬁnancial regulatory and monetary authority, the Central Bank and Financial Services Authority of Ireland.

Relationship between Act and Irish Banking Code As regards the relationship between the Financial Regulator’s powers and functions under the Irish Banking Code and those under the Act, the Act provides that the Financial Regulator has, in relation to Institutions and other persons to whom the Act relates, the functions imposed and powers conferred on the Financial Regulator by or under the Irish Banking Code in relation to credit institutions within the scope of the Irish Banking Code, except as required or provided by the Act and subject to such modiﬁcations to those functions and powers as are necessary in order to adopt those functions and powers for the purposes of the Act.

Limitation on the Civil Liability of the Financial Regulator/Irish State The Financial Regulator, members and employees of the Financial Regulator, and persons acting under the direction of the Financial Regulator, are not liable in any civil proceedings for any act done, or omitted to be done, by the person for the purposes of, or in connection with, performing or exercising any function or power imposed or conferred on the Financial Regulator by or under the Act if the act was done, or was omitted, in good faith for the purposes of the Act.

The CBFSAIA further provides that the Financial Regulator is not liable for damages for anything done or omitted in the performance or purported performance or exercise of any of its functions or powers, unless it is proved that the act or omission was in bad faith. The fact that the Financial Regulator has authorised or revoked the authorisation, or regulates the activities, of a person (including an Institution), under any of its functions (including its functions under the Act) is not a warranty by the Financial Regulator as to the person’s solvency or performance. Neither the Irish State nor the Financial Regulator is liable for losses incurred because of the insolvency, default or performance of such a person.

44 REGISTRATION OF INSTITUTIONS/REVOCATION OF REGISTRATION

Registration of Institutions A person may not, among other things, purport to issue Asset Covered Securities in accordance with the Act unless the person is registered as an Institution under the Act. A person is eligible for registration under the Act only if it is a credit institution incorporated or formed in Ireland that holds an authorization issued by the Financial Regulator authorizing it to carry on business as a credit institution. The Financial Regulator may register an applicant as an Institution only if it is satisﬁed that the applicant: (a) is or will be able to carry out, in a proper manner, the responsibilities that an Institution is required by the Act to carry out; and (b) complies with, or will be able to comply with, such requirements (if any) relating to Institutions as are prescribed by the regulations made and regulatory notices published by the Financial Regulator under the Act. The Financial Regulator may impose conditions speciﬁc to the applicant with respect to the orderly and proper regulation of the applicant’s business which it considers appropriate. The Financial Regulator has not imposed any such conditions on the Issuer. The Financial Regulator may from time to time vary a condition of an Institution’s registration or impose on the Institution a new condition, but only after giving to the Institution concerned notice in writing of its intention to do so and after giving the Institution an opportunity to make written representations to the Financial Regulator in relation to the proposed variation or proposed new condition.

Revocation of Registration as an Institution At the request of the Institution, the Financial Regulator may revoke its registration under the Act, but only if it is of the opinion that the Institution has fully satisfied all claims and liabilities that are secured in respect of the Institution as provided by Part 7 of the Act. See ‘‘Insolvency of Institutions.’’ The Financial Regulator may, with the consent of the Minister for Finance, revoke the registration of an Institution in circumstances where the revocation is not requested by the Institution. These circumstances arise when the Financial Regulator is satisfied on reasonable grounds that, among other things, the Institution’s registration was obtained by means of a false or misleading representation, the Institution is not in compliance with a provision of the Act or a regulatory notice published by the Financial Regulator, the Institution has become subject to an insolvency process within the meaning of the Act, the Institution no longer has sufficient ‘‘own funds’’ (as referred to in the EU Codified Banking Directive), the Cover Assets comprised in a Pool maintained by the Institution do not comply with relevant provisions of the Act or the Institution or any of its officers is convicted of certain criminal offences. A registration may also be revoked where the Institution has come under the control of any other entity that is not supervised by the Financial Regulator to such an extent that the Institution can no longer be supervised to the satisfaction of the Financial Regulator. In the case of an Institution whose registration has been revoked, but which is not being wound up, the Institution is required to continue to carry out the financial obligations of the Institution that are secured under Part 7 of the Act (see ‘‘Insolvency of Institutions’’) until all those obligations have been fully discharged to the satisfaction of the Financial Regulator.

Direction of the Financial Regulator Requiring an Institution to Suspend its Business If the Financial Regulator reasonably believes that there may be grounds for revoking the registration of an Institution, it may, subject to Part 7 of the Act (see ‘‘Insolvency of Institutions’’), prohibit the Institution from engaging in the certain business activities except with the permission of the Financial Regulator.

Position of a Liquidator In the case of an Institution whose registration is revoked and that is being wound up, the Act provides that, except as otherwise provided by the Act, the liquidator of the Institution has a duty to ensure that the Institution performs the obligations of an Institution under the Act.

45 DESCRIPTION OF SECURITIES

General The Securities are public credit covered securities within the meaning of the Irish Asset Covered Securities Act, 2001. The Securities will be issued on March 15, 2007 (the ‘‘Issue Date’’)inanaggregate principal amount of $1,250,000,000 in a minimum denomination of $100,000 or any amount in excess thereof in integral multiples of $1,000 provided that holdings of less than $100,000 are not permitted. The Securities will rank equally among themselves and among all other Asset Covered Securities of the Issuer issued and outstanding from time to time.

Certification and Custody The Securities will be represented by two permanent global certificates without interest coupons. Temporary global certificates will not be issued. One permanent global certificate will be held in custody by Clearstream Frankfurt until all obligations of the Issuer under the Securities have been satisfied (the ‘‘Clearstream Frankfurt Global Certificate’’). The Clearstream Frankfurt Global Certificate will be issued in bearer form and will represent the Securities held in custody for financial institutions that are accountholders in Clearstream Frankfurt, including such Securities which are held through Euroclear and Clearstream, Luxembourg. The other permanent global certificate will be held in custody by Deutsche Bank Trust Company Americas, or any successor, as custodian for DTC until all obligations of the Issuer under the Securities have been satisfied (the ‘‘DTC Global Certificate’’). The DTC Global Certificate will be issued in registered form in the name of Cede & Co., as nominee of DTC, and will represent the Securities kept in custody for financial institutions that are participants in DTC. Together, the aggregate principal amount of the Securities represented by the Clearstream Frankfurt Global Certificate and the DTC Global Certificate, will equal the aggregate principal amount of the Securities outstanding at any time. The aggregate principal amount of the Securities represented by the Clearstream Frankfurt Global Certificate and the DTC Global Certificate is evidenced by the register (the ‘‘Securities Register’’) maintained for that purpose by the Registrar (as defined under ‘‘– Registrar and Paying Agents’’). Definitive certificates representing individual Securities and interest coupons will not be issued even in the event of a permanent or prolonged failure of Clearstream Frankfurt or DTC. Copies of the Clearstream Frankfurt Global Certificate and the DTC Global Certificate will be available free of charge at each of the Paying Agents (as defined under ‘‘– Registrar and Paying Agents’’).

Transfer Transfers of Securities shall require appropriate entries in securities accounts: (a) transfers of Securities between Clearstream Frankfurt Accountholders (as defined under ‘‘Clearing and Settlement Certification and Custody’’)onthe one hand and DTC Participants (as defined under ‘‘Clearing and Settlement Certification and Custody’’)onthe other hand shall be recorded on the Securities Register and shall be effected by an increase or a reduction in the aggregate principal amount of Securities represented by the DTC Global Certificate and a corresponding reduction or increase in the aggregate principal amount of Securities represented by the Clearstream Frankfurt Global Certificate; (b) transfers of Securities between Clearstream Frankfurt Accountholders shall be effected in accordance with procedures established for this purpose by Clearstream Frankfurt; (c) transfers of Securities between DTC Participants shall be effected in accordance with procedures established for this purpose by DTC; (d) transfers of Securities between Euroclear Participants (as defined under ‘‘Clearing and Settlement – Certification and Custody’’), between Clearstream Participants (as defined under ‘‘Clearing and Settlement – Certification and Custody’’) and between Euroclear Participants on the one hand and Clearstream Participants on the other hand shall be effected in accordance with procedures established for these purposes by Euroclear and Clearstream, Luxembourg, respectively; and (e) transfers of Securities between Euroclear or Clearstream Participants on the one hand and Clearstream Frankfurt Accountholders on the other hand shall be effected in accordance with the procedures established for this purpose by Euroclear or Clearstream, Luxembourg and Clearstream Frankfurt. Transfers of Securities or exchanges of Securities (as referred to below under ‘‘– Exchange’’) may not be effected during the period commencing on the Record Date as defined under ‘‘– Record Date’’ and ending on the

46 related payment date (both dates inclusive). For a discussion of certain other restrictions on the transfer of Securities, see ‘‘Transfer Restrictions.’’

Exchange Exchanges of the Securities represented by the DTC Global Certificate for Securities represented by the Clearstream Frankfurt Global Certificate (and vice versa) will be recorded on the Securities Register and will be effected by an increase or a reduction in the aggregate principal amount of Securities represented by the Clearstream Frankfurt Global Certificate by the aggregate principal amount of Securities so exchanged and a corresponding reduction or increase in the aggregate principal amount of Securities represented by the DTC Global Certificate. For a discussion of certain other restrictions on the transfer of Securities, see ‘‘Transfer Restrictions.’’

Interest The Securities will bear interest on the principal amount thereof from (and including) March 15, 2007 at the rate of 5.125 percent per annum to (but excluding) the Maturity Date. Interest shall be payable semi-annually in arrears on March 16 and September 16 of each year commencing on September 16, 2007 (long ﬁrst coupon). Interest will be computed on the basis of twelve 30-day months divided by 360.

Maturity and Redemption The Securities will mature on March 16, 2037 (the ‘‘Maturity Date’’) and will be redeemed at par on such date. The Securities are not subject to redemption prior to the Maturity Date.

Purchase by the Issuer The Issuer may at any time purchase Securities in the open market or otherwise and at any price. Securities so purchased may be held or resold or surrendered for cancellation.

Status The Securities are direct, unconditional and senior obligations of the Issuer and rank equally with all other Asset Covered Securities issued or to be issued by the Issuer. The Securities beneﬁt from various provisions of the Irish Asset Covered Securities Act, 2001 (as amended) and the regulations and regulatory notices promulgated thereunder. The Securities are recourse obligations of the Issuer, and no separate vehicle has been established for their issuance.

Taxes All payments of principal and interest in respect of the Securities will be made by the Issuer to Clearstream Frankfurt and the registered holder of the DTC Global Certiﬁcate without deduction or withholding for or on account of any present or future taxes or other duties of whatever nature levied by the Republic of Ireland or any province, municipality or other political subdivision or taxing authority thereof or therein, unless the Issuer shall be obligated by law to make such deduction or withholding. There will be no ‘‘gross-up’’ provision in the Securities requiring additional payments to be made in respect thereof in the event any such deduction or withholding is imposed.

Registrar and Paying Agents Pursuant to a master agency agreement (the ‘‘Master Agency Agreement’’) entered into on March 5, 2003 between the Issuer, Deutsche Bank Aktiengesellschaft and DEPFA BANK plc, the Issuer has agreed with Deutsche Bank Aktiengesellschaft and DEPFA BANK plc upon a framework for the appointment of Deutsche Bank Aktiengesellschaft and/or DEPFA BANK plc and/or their respective afﬁliates to provide certain agency and related services to the Issuer in connection with the issue by the Issuer of Asset Covered Securities. Pursuant to a schedule to the Master Agency Agreement to be executed by the Issuer, Deutsche Bank Aktiengesellschaft, DEPFA BANK plc and Deutsche Bank Trust Company Americas on March 15, 2007 (the ‘‘Schedule’’), the Issuer will appoint Deutsche Bank Aktiengesellschaft as registrar (the ‘‘Registrar’’), as principal paying agent (in such capacity, the ‘‘Principal Paying Agent’’), Deutsche Bank Trust Company Americas as New York

47 paying agent (the ‘‘New York Paying Agent’’) and DEPFA BANK plc as Irish listing agent and Irish paying agent (in such latter capacity, the ‘‘Irish Paying Agent’’ and, together with the Principal Paying Agent and the New York Paying Agent, the ‘‘Paying Agents’’)inrespect of the Securities. The Issuer will procure that for as long as any Securities shall be outstanding there shall always be a Paying Agent in Frankfurt and in New York and a Registrar to perform the functions assigned to any of them. For so long as the Securities are listed on the Irish Stock Exchange Limited, the Issuer will ensure that there shall always be a Paying Agent in Ireland to perform the functions assigned to the Irish Paying Agent. The Issuer may at any time, by giving not less than 30 days’ notice by publication in the manner set forth under ‘‘Notices,’’ replace the Registrar or any Paying Agent by one or more other banks or other ﬁnancial institutions which assume such functions.

Payments Payments of principal of, and interest on, the Securities will be made by the Issuer in U.S. dollars on the relevant payment date (see ‘‘– Payment Date and Due Date’’)toClearstream Frankfurt and to the DTC Participants of record of the DTC Global Certificate. The amount of payments to Clearstream Frankfurt and to the DTC Participants of record of the DTC Global Certificate, respectively, will correspond to the aggregate principal amount of Securities represented by the Clearstream Frankfurt Global Certificate and the DTC Global Certificate, as established by the Registrar at the close of business on the relevant Record Date. See ‘‘– Record Date’’. Payments of principal will be made upon surrender of the Clearstream Frankfurt Global Certificate and the DTC Global Certificate, as the case may be, to the relevant Paying Agent. All payments made by the Issuer to Clearstream Frankfurt and to, or to the order of, the DTC Participants of record of the DTC Global Certificate, respectively, shall discharge the liability of the Issuer under the Securities, to the extent of the sums so paid. Any Clearstream Frankfurt Accountholder will receive payments of principal and interest in respect of the Securities in U.S. dollars, unless such Clearstream Frankfurt Accountholder elects to receive payments in Euro in accordance with the procedures established for this purpose by Clearstream Frankfurt. To the extent that Clearstream Frankfurt Accountholders shall have made such election in respect of any payment of principal or interest, the aggregate amount designated for such Clearstream Frankfurt Accountholders in respect of any such payment will be converted into Euro by Clearstream Frankfurt at the applicable market rate and will be credited to the account of such Clearstream Frankfurt Accountholder for value two days after the payment date. Any person holding Securities through DTC (a ‘‘DTC Accountholder’’) shall receive payments of principal and interest in respect of the Securities in U.S. dollars.

Prescription To the extent permitted by applicable law, the Securities will become void unless presented for payment within a period of twelve years from the Relevant Date (as deﬁned below). Any monies paid by the Issuer to a Paying Agent for the payment of principal or interest with respect to the Securities and remaining unclaimed when the Securities become void shall be paid to the Issuer and all liability of the Issuer with respect thereto shall thereupon cease. The ‘‘Relevant Date’’ shall mean: (A) the date on which a payment in respect of a Security ﬁrst becomes due, or (B) if the full amount of the monies payable in respect of the Securities due on or before that date has not been received by the Paying Agents on or prior to such due date, the date on which notice that the full amount of such monies has been received is duly given to the holders of Securities in accordance with the provisions under the heading ‘‘Notices’’ below.

Record Date The record date (the ‘‘Record Date’’) for purposes of payment of principal and interest (see ‘‘Payments’’ above) will be, in respect of each such payment, the earlier of the following dates: (a) the date determined in accordance with the conventions observed by Clearstream Frankfurt from time to time for the entitlement of Clearstream Frankfurt Accountholders to payments in respect of debt securities denominated in U.S. dollars and represented by permanent global certiﬁcates, and (b) the tenth New York Business Day (as deﬁned under ‘‘– Business Days’’ below) preceding the relevant due date. The Record Date applies solely to the determination by

48 the Paying Agents of the amounts of principal and interest which are to be paid to Clearstream Frankfurt or to the registered holder of the DTC Global Certiﬁcate.

For information as to the rules that may from time to time be applicable to the further distribution of such payments by DTC or Clearstream Frankfurt to the DTC Participants or Clearstream Frankfurt Accountholders, holders of Securities are advised to consult the internal procedures of the clearing system involved.

Business Days If any due date for payment by the Issuer of principal or interest in respect of any Security is not a TARGET Business Day, Frankfurt Business Day, Dublin Business Day and a New York Business Day, such payment will not be made until the next succeeding day that is a TARGET Business Day, Frankfurt Business Day, Dublin Business Day and a New York Business Day, and no further interest shall be paid in respect of the delay in such payment.

A‘‘TARGET Business Day’’ means a day on which the Trans-European Automated Real Time Gross Settlement Express Transfer (‘‘TARGET’’) system is operating. A ‘‘Frankfurt Business Day’’ shall be any day on which credit institutions are open for business in Frankfurt am Main, a ‘‘Dublin Business Day’’ shall be any day on which credit institutions are open for business in Dublin and a ‘‘New York Business Day’’ shall be any day on which banking institutions in New York City are not obligated and not authorized to close.

Payment Date and Due Date For the purposes hereof ‘‘payment date’’ means the day on which the payment is actually to be made, where applicable as adjusted in accordance with ‘‘Business Days,’’ above, and ‘‘due date’’ means the payment date provided for herein, without taking account of any such adjustment.

Overcollateralization The terms and conditions applicable to the Securities require the Issuer to maintain Overcollateralization of the Pool with respect to the Securities at a minimum level of ﬁve percent.

Further Issues The Issuer reserves the right, from time to time without the consent of the Securities holders to issue additional Securities, on terms identical in all respects to those set forth herein save for the principal amount, the date of issue and the date of the ﬁrst payment of interest thereon, so that such additional Securities shall be consolidated with, form a single issue with, and increase the aggregate principal amount of, the Securities. Pursuant to the Act, however, the aggregate principal amount of all asset covered securities of any designated credit institution outstanding may not exceed 50 times that Institution’s own funds.

Notices All notices regarding the Securities will be published in the following journals: (a) a leading daily newspaper printed in the German language and of general circulation in Germany; (b) a leading daily newspaper printed in the English language and of general circulation in New York; (c) a leading daily newspaper printed in the English language and of general circulation in London; and (d) a leading daily newspaper printed in the English language and of general circulation in Ireland. It is expected that such notices under (a), (b), (c) and (d) will normally be published in the Bo¨rsen-Zeitung, The Wall Street Journal, the Financial Times and The Irish Times, respectively. Any notice will become effective for all purposes on the date of its publication in the journals referred to in (a) and (d) above.

For so long as the Securities are listed on a stock exchange and the rules of such exchange so permit, there may be substituted for such publication in such newspapers the delivery of the relevant notice to the applicable clearing system for communication by it to the holders of Securities. Any such notice will be deemed to have been given to all persons holding an ownership interest in the Securities on the seventh day after the date of delivery of the relevant notice to the respective clearing systems.

49 Governing Law The Securities will be governed by, and construed in accordance with, the laws of Ireland. Transfers and pledges of Securities to be held through DTC and executed between DTC Participants will be governed by the laws of the State of New York (without giving effect to the conﬂicts of law rules of the State of New York).

Jurisdiction Any action or other legal proceedings arising out of or in connection with the Securities may be brought in the High Court of Ireland. The Issuer will submit in the Securities to the exclusive jurisdiction of that court.

Enforcement Any Securities holder may in any proceedings against the Issuer, or to which the Securities holder and the Issuer are parties, protect and enforce in its own name its rights arising under its Securities on the basis of (a) a certificate issued by its Custodian (as defined below) (i) stating the full name and address of the Securities holder, (ii) specifying an aggregate principal amount of Securities credited on the date of such statement to such Securities holder’s securities account maintained with such Custodian, and (iii) confirming that the Custodian has given a written notice to Clearstream Frankfurt or DTC, as the case may be, and the Registrar containing the information pursuant to (i) and (ii) and bearing acknowledgments of Clearstream Frankfurt or DTC and the relevant Clearstream Frankfurt Accountholder or DTC Participant and (b) a copy of the Clearstream Frankfurt Global Certificate or the DTC Global Certificate certified as being a true copy by a duly authorized officer of Clearstream Frankfurt or DTC, as the case may be, or the Registrar. For purposes of the foregoing, ‘‘Custodian’’ means any bank or other financial institution of recognized standing authorized to engage in securities custody business with which the Securities holder maintains a securities account in respect of any Securities and includes Clearstream Frankfurt, DTC, Clearstream, Luxembourg and Euroclear.

50 CLEARING AND SETTLEMENT

CERTIFICATION AND CUSTODY Clearing and settlement arrangements, including the existing links between Clearstream Frankfurt, Euroclear and Clearstream, Luxembourg and an especially created link between these systems and DTC, will provide investors access to four major clearing systems. At initial settlement, the Securities will be represented by two permanent global certificates, which will not be exchangeable for definitive certificates representing individual Securities. The Clearstream Frankfurt Global Certificate, to be held in Clearstream Frankfurt, will be issued in bearer form. The Clearstream Frankfurt Global Certificate will represent the Securities held by investors electing to hold Securities through financial institutions that are accountholders in Clearstream Frankfurt (‘‘Clearstream Frankfurt Accountholders’’). Each of Euroclear and Clearstream, Luxembourg are Clearstream Frankfurt Accountholders, thus Securities held by investors electing to hold Securities through financial institutions that are participants in Euroclear and Clearstream, Luxembourg (‘‘Euroclear and Clearstream, Luxembourg Participants’’) are included in the Clearstream Frankfurt Global Certificate. The DTC Global Certificate, to be held by Deutsche Bank Trust Company Americas, as custodian for DTC, will be issued in registered form in the name of DTC’s nominee, Cede & Co. The DTC Global Certificate will represent the Securities held by investors electing to hold Securities through financial institutions that are participants in DTC (‘‘DTC Participants’’).

Together, the Securities represented by the Clearstream Frankfurt Global Certificate and the DTC Global Certificate will equal the total aggregate principal amount of the Securities outstanding at any time. When subsequent secondary market sales settle between the Clearstream Frankfurt and DTC clearing systems, such sales shall be recorded in the Securities Register and shall be reflected by respective increases and decreases in the Clearstream Frankfurt Global Certificate and the DTC Global Certificate. For a discussion of certain restrictions on the transfer of Securities, see ‘‘Transfer Restrictions.’’

The Registrar provides the link between Clearstream Frankfurt and DTC.

Owners of legal co-ownership interests in the Clearstream Frankfurt Global Certificate or of beneficial interests in the DTC Global Certificate will not be entitled to have Securities registered in their names, and will not receive or be entitled to receive physical delivery of definitive certificates representing individual Securities.

PAYMENTS Principal and interest payments on the Securities will be made in U.S. dollars by the Issuer through the relevant Paying Agent to, or to the order of, the DTC Participants of record of the DTC Global Certificate and to Clearstream Frankfurt. All payments duly made by the Issuer to Clearstream Frankfurt and to, or to the order of, the DTC Participants of record of the DTC Global Certificate, shall discharge the liability of the Issuer under the Securities to the extent of the sum or sums so paid. Therefore, after such payments have been duly made, neither the Issuer nor any Paying Agent has any direct responsibility or liability for the payment of principal or interest on the Securities to owners of beneficial interests in the DTC Global Certificate or the Clearstream Frankfurt Global Certificate, as the case may be.

Payments by DTC Participants and Indirect DTC Participants (as defined under ‘‘– The Clearing Systems – DTC’’)toowners of beneficial interests in the DTC Global Certificate will be governed by standing instructions and customary practices, as is now the case with securities held in the accounts of customers or registered in ‘‘street name,’’ and will be the responsibility of the DTC Participants or Indirect DTC Participants. Neither the Issuer nor any Paying Agent will have any responsibility or liability for any aspect of the records of DTC relating to, or payments made by, DTC on account of beneficial interests in the DTC Global Certificate or for maintaining, supervising or reviewing any records of DTC relating to such beneficial interests. Substantially similar principles will apply with regard to the Clearstream Frankfurt Global Certificate and payments to holders of interest therein.

THE CLEARING SYSTEMS Clearstream Frankfurt Clearstream Frankfurt is incorporated under the laws of Germany and acts as a specialized depositary and clearing organization. Clearstream Frankfurt is an indirect wholly-owned subsidiary of Deutsche Bo¨rse AG and

51 is subject to regulation and supervision by the German Federal Financial Supervisory Authority (Bundesanstalt fu¨r Finanzdienstleistungsaufsicht)(‘‘BAFin’’). Deutsche Bo¨rse AG is a publicly traded company. It operates the Frankfurt Stock Exchange among other activities. Its largest shareholders include banks, insurance companies and a holding company representing the German stock exchanges other than the Frankfurt Stock Exchange.

Clearstream Frankfurt holds securities for its accountholders and facilitates the clearance and settlement of securities transactions between its Clearstream Frankfurt Accountholders through electronic book-entry changes in securities accounts with simultaneous payment in Euro in same-day funds. Thus the need for physical delivery of certiﬁcates is eliminated.

Clearstream Frankfurt provides to the Clearstream Frankfurt Accountholders, among other things, services for safekeeping, administration, clearance and settlement of domestic German and internationally traded securities and securities lending and borrowing. Clearstream Frankfurt Accountholders are banking institutions located in Germany, including German branches of non-German ﬁnancial institutions, and securities brokers or dealers admitted to a German Stock exchange that meet certain additional requirements. Indirect access to Clearstream Frankfurt is available to others such as underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and others, including individuals, that clear through or maintain custodial relationships with Clearstream Frankfurt Accountholders either directly or indirectly.

The address of Clearstream Frankfurt is Neue Bo¨rsenstrasse 1, D-60487 Frankfurt am Main, Germany.

DTC DTC is a limited-purpose trust company organized under the New York Banking Law, a ‘‘banking organization’’ within the meaning of the New York Banking Law, a member of the Federal Reserve System, a ‘‘clearing corporation’’ within the meaning of the New York Uniform Commercial Code and a ‘‘clearing agency’’ registered pursuant to the provisions of Section 17A of the U.S. Securities Exchange Act of 1934, as amended. DTC was created to hold securities for DTC Participants and to facilitate the clearance and settlement of securities transactions between DTC Participants through electronic computerized book-entry changes in accounts of DTC Participants, thereby eliminating the need for physical movement of securities certiﬁcates. DTC Participants include certain of the U.S. depositaries, securities brokers and dealers, banks, trust companies and clearing corporations and certain other organizations. Indirect access to the DTC system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (‘‘Indirect DTC Participants’’). Persons who are not DTC Participants may beneﬁcially own securities held by DTC only through DTC Participants or Indirect DTC Participants.

Transfers of beneﬁcial interests in the Securities in DTC may be made only through a DTC Participant. In addition, beneﬁcial owners of the Securities in DTC will receive all distributions of principal of and interest on the Securities from the Paying Agent through a DTC Participant. Distributions in the United States will be subject to tax reporting in accordance with relevant United States tax and law regulations. See ‘‘Taxation – United States.’’

Because DTC can only act on behalf of DTC Participants, who in turn act on behalf of Indirect DTC Participants, and because beneﬁcial owners will hold interests in the Securities through DTC Participants or Indirect DTC Participants, the ability of such beneﬁcial owners to pledge Securities to persons or entities that do not participate in DTC, or otherwise take actions with respect to such Securities, may be limited.

The established procedures of DTC provide that (i) upon issuance of the Securities by the Issuer, DTC will credit the accounts of DTC Participants designated by the Underwriters with the principal amount of the Securities purchased by the Underwriters, and (ii) ownership of interests in the DTC Global Certificate will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC, the DTC Participants and the Indirect DTC participants. The laws of some jurisdictions require that certain persons take physical delivery in definitive form of securities which they own. Consequently, the ability to transfer beneficial interests in the DTC Global Certificate to holders in such jurisdictions is limited.

The address of DTC is 55 Water St., 49th Floor, New York, NY 10041-0099, U.S.A.

52 The address of Deutsche Bank Trust Company Americas is C/o Deutsche Bank National Trust Company, Trust & Securities Services, 25 DeForest Avenue, 2nd Floor, Summit, NJ 07901, USA.

Clearstream, Luxembourg Clearstream, Luxembourg was incorporated as a limited liability company under Luxembourg law. Clearstream, Luxembourg is an indirect wholly-owned subsidiary of Deutsche Bo¨rse AG. Clearstream, Luxembourg holds securities for its customers and facilitates the clearance and settlement of securities transactions between Clearstream, Luxembourg customers through electronic book-entry changes in accounts of Clearstream, Luxembourg customers, thus eliminating the need for physical movement of certificates. Clearstream, Luxembourg provides to its customers, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities, securities lending and borrowing and collateral management. Clearstream, Luxembourg interfaces with domestic markets in a number of countries through established depositary and custodial relationships. Clearstream, Luxembourg has established an electronic bridge with Euroclear, the operator of the Euroclear System, to facilitate settlement of trades between Clearstream, Luxembourg and Euroclear. As a registered bank in Luxembourg, Clearstream, Luxembourg is subject to regulation by the Luxembourg Commission for the Supervision of the Financial Sector. Clearstream, Luxembourg customers are world-wide financial institutions, including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations. In the United States, Clearstream, Luxembourg customers are limited to securities brokers and dealers and banks, and may include the initial purchasers of the notes. Other institutions that maintain a custodial relationship with a Clearstream, Luxembourg customer may obtain indirect access to Clearstream, Luxembourg. Clearstream, Luxembourg is an indirect participant in DTC. Distributions with respect to the Securities held beneficially through Clearstream, Luxembourg will be credited to cash accounts of Clearstream, Luxembourg customers in accordance with its rules and procedures, to the extent received by Clearstream, Luxembourg. The address of Clearstream, Luxembourg is 42 Avenue J.F. Kennedy, 1855 Luxembourg, Luxembourg.

Euroclear Euroclear was created in 1968 to hold securities for Euroclear participants (as defined below) and to clear and settle transactions between Euroclear participants through electronic book-entry changes in accounts of such participants or other securities intermediaries. Euroclear includes various other services, including securities lending and borrowing and interfaces with domestic markets in several countries. Euroclear participants include banks, securities brokers and dealers and other professional intermediaries and may include the Underwriters (‘‘Euroclear participants’’). Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly. Euroclear is a Belgian bank regulated and examined by the Belgian Banking Commission. Securities clearance accounts and cash accounts with Euroclear are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, and applicable Belgian law (collectively, the ‘‘Euroclear terms and conditions’’). Euroclear terms and conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear and receipts of payment with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. Euroclear acts under the Euroclear terms and conditions only on behalf of Euroclear participants and has no record of or relationship with persons holding through Euroclear participants. Distributions with respect to the Securities held beneficially through Euroclear will be credited to the cash accounts with Euroclear participants in accordance with the Euroclear terms and conditions, to the extent received by Euroclear. The address of Euroclear is 1 Boulevard Du Roi Albert II, 1210 Brussels, Belgium.

53 GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES

Primary Market The Clearstream Frankfurt Global Certiﬁcate and the DTC Global Certiﬁcate will be delivered at initial settlement to Clearstream Frankfurt and Deutsche Bank Trust Company Americas (as custodian for DTC), respectively. Customary settlement procedures will be followed for participants of each system at initial settlement.

The Securities will be credited to the securities accounts of Clearstream Frankfurt Accountholders, including Euroclear or Clearstream, Luxembourg, on the settlement date against payment in U.S. dollars in same- day funds.

Primary market purchasers which are DTC Participants can have their securities accounts with DTC credited with Securities (i) ‘‘free of payment’’ if they have arranged for payment in Euro outside DTC or (ii) against payment in U.S. dollars in same-day funds on the settlement date through DTC’s Same Day Funds Settlement system.

Secondary Market The following paragraphs set forth the procedures governing settlement of secondary market sales of securities such as the Securities in effect on the date hereof.

Secondary market sales of Securities for settlement within each clearing system and between Euroclear and Clearstream, Luxembourg Participants. These trades will be settled in accordance with the rules and procedures established by the applicable system. Sales to be settled within Euroclear or Clearstream, Luxembourg and between Euroclear and Clearstream, Luxembourg will normally settle on a three-day basis unless parties specify a different period (which may be as short as two days). DTC is a U.S. dollar-based system but sales may be settled in other currencies on a free-delivery basis. Sales to be settled within DTC denominated in U.S. dollars can settle on a same-day basis.

Secondary market sales between Clearstream Frankfurt Accountholders and Euroclear or Clearstream, Luxembourg Participants. These trades normally settle on a three-day basis (unless parties specify a different period, which may be as short as two days). Such trades will be settled in Euro.

Secondary market sales from a DTC Participant to a Clearstream Frankfurt Accountholder or a Euroclear or Clearstream, Luxembourg Participant. Two days prior to settlement, a DTC Participant selling Securities to a Clearstream Frankfurt Accountholder or a Euroclear or Clearstream, Luxembourg Participant will notify Deutsche Bank Trust Company Americas (as custodian for DTC) of the settlement instructions and will deliver the Securities to the Registrar by means of DTC’s Deliver Order procedures. Deutsche Bank Trust Company Americas will send the settlement instructions to the Registrar. One day prior to settlement, the Registrar will enter delivery-versus-payment instructions into Clearstream Frankfurt for settlement through its Clearstream Frankfurt transfer account; the Euroclear or Clearstream, Luxembourg Participant will instruct its clearing system to transmit receipt-versus-payment instructions to Clearstream Frankfurt, and the Clearstream Frankfurt Accountholder will transmit such instructions directly to Clearstream Frankfurt, with Deutsche Bank Trust Company Americas as counterparty. On the settlement date, the DTC Participant will input a Deposit/ Withdrawal at Custodian (‘‘DWAC’’) transaction to remove the Securities to be sold from its DTC securities account; matched and pre-checked trades are settled versus payment, and the Clearstream Frankfurt Accountholder’s or Euroclear or Clearstream, Luxembourg Participant’s securities account is credited not later than the next day for the value settlement date, and the Registrar causes the DTC Participant’s pre-specified account at the Registrar to be credited for same day value. The Registrar, upon receipt of such Securities, will (i) decrease the quantity of the Securities evidenced by the DTC Global Certificate and (ii) increase the quantity of the Securities evidenced by the Clearstream Frankfurt Global Certificate.

Secondary market sales from a Clearstream Frankfurt Accountholder or a Euroclear or Clearstream, Luxembourg Participant to a DTC Participant. Two days prior to settlement, a DTC Participant will send Deutsche Bank Trust Company Americas the details of the transaction for transmittal to the Registrar and instruct its bank to fund the Registrar’s Euro account one day prior to settlement.

54 A Euroclear or Clearstream, Luxembourg Participant will instruct its clearing system no later than one day prior to settlement to transmit delivery-versus-payment instructions to Clearstream Frankfurt, and a Clearstream Frankfurt Accountholder will transmit one day prior to settlement such instructions directly to Clearstream Frankfurt, naming the Registrar as counterparty with further credit to DTC. At the same time (that is, one day prior to settlement), the Registrar will transmit settlement instructions to Clearstream Frankfurt.

On the settlement day, upon settlement of the trade in Clearstream Frankfurt, the Registrar will so inform Deutsche Bank Trust Company Americas of such settlement; the DTC Participant will initiate a DWAC deposit transaction for the Registrar to approve, resulting in a deposit of the Securities in the DTC Participant’s securities account for same day value. The Clearstream Frankfurt Accountholder or a Euroclear or Clearstream, Luxembourg participant’s accounts are credited with the sales proceeds for same day value. The Registrar will (i) decrease the quantity of the Securities evidenced by the Clearstream Frankfurt Global Certiﬁcate and (ii) increase the quantity of the Securities evidenced by the DTC Global Certiﬁcate.

Clearstream Frankfurt Global Certiﬁcate The Securities represented by the Clearstream Frankfurt Global Certiﬁcate have been accepted for clearance through Euroclear and Clearstream, Luxembourg under the following numbers:

Common Code: 029160066

International Securities Identiﬁcation Number (‘‘ISIN’’): DE000A0LPMX0

Wertpapier-Kenn-Nummer (‘‘WKN’’): A0LPMX

DTC Global Certiﬁcate The Securities represented by the DTC Global Certiﬁcate have been accepted for clearance by DTC under the following numbers:

CUSIP Number: 249575AN1

Common Code: 029203024

ISIN: US249575AN19

WKN: A0LPQG

55 TRANSFER RESTRICTIONS

Unless the Issuer determines otherwise in compliance with applicable law, the DTC Global Certiﬁcate will bear a restrictive legend and the Securities represented by the DTC Global Certiﬁcate or any interest therein may not be transferred otherwise than in accordance with the transfer restrictions set forth in such legend.

The restrictive legend will be to the following effect:

‘‘THE SECURITIES IN RESPECT OF WHICH THIS CERTIFICATE IS ISSUED HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES ACT’’) OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THE SECURITIES IN RESPECT OF WHICH THIS CERTIFICATE IS ISSUED, AGREES FOR THE BENEFIT OF THE ISSUER THAT SUCH SECURITIES MAY BE RESOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO GOLDMAN SACHS INTERNATIONAL, MERRILL LYNCH INTERNATIONAL, MORGAN STANLEY & CO. INTERNATIONAL LIMITED, BARCLAYS BANK PLC, BNP PARIBAS, CITIGROUP GLOBAL MARKETS LIMITED, CREDIT SUISSE SECURITIES (EUROPE) LIMITED, DEUTSCHE BANK AG, LONDON BRANCH, DRESDNER BANK AG LONDON BRANCH, J.P. MORGAN SECURITIES LTD. OR ANY OF THEIR AFFILIATES, (2) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO AN INSTITUTIONAL INVESTOR THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, WHOM THE SELLER HAS INFORMED, IN EACH CASE, THAT THE RESALE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (4) PURSUANT TO ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN THE CASE OF CLAUSE (4), TO THE RECEIPT BY THE ISSUER AND THE REGISTRAR OF AN OPINION OF COUNSEL OR SUCH OTHER EVIDENCE WHICH THEY MAY REASONABLY REQUIRE THAT SUCH RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT.’’

Prior to the date which is two years after the later of the original issue date of the DTC Global Certificate and the last date on which the Issuer or any affiliate of the Issuer was the beneficial owner of an interest in the DTC Global Certificate, interests in the DTC Global Certificate may be transferred to a person who takes delivery in the form of an interest in the Clearstream Frankfurt Global Certificate only if the Registrar receives a written certificate from the transferor (in the form provided) to the effect that such transfer is being made in accordance with Regulation S under the Securities Act.

Each purchaser of an interest in the DTC Global Certiﬁcate pursuant to Rule 144A will be deemed to have represented and agreed as follows:

1. It is a qualified institutional buyer within the meaning of Rule 144A and it is acquiring such interest for its own account or for the account of a qualified institutional buyer; it is aware, and each beneficial owner of such interest has been advised, that the sale of such interest to it is being made in reliance on Rule 144A.

2. It understands that the Securities have not been and will not be registered under the Securities Act and may not be transferred or sold in the United States except as permitted below.

3. It agrees that if it should sell or transfer the Securities it will do so only in compliance with the Securities Act and other applicable laws and only (i) to Goldman Sachs International, Merrill Lynch International, Morgan Stanley & Co. International Limited, Barclays Bank PLC, BNP PARIBAS, Citigroup Global Markets Limited, Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, London Branch, Dresdner Bank AG London Branch, J.P. Morgan Securities Ltd. or any of their affiliates, (ii) pursuant to Rule 144A under the Securities Act to an institutional investor that the holder reasonably believes is a qualified institutional buyer within the meaning of Rule 144A purchasing for its own account or for the account of a qualified institutional buyer whom the holder has informed, in each case, that the resale or transfer is being made in reliance on

56 Rule 144A, (iii) in an offshore transaction in accordance with Rule 903 or 904 of Regulation S under the Securities Act; or (iv) pursuant to any other exemption from the registration requirements of the Securities Act, subject, in the case of clause (iv), to the receipt by the Issuer and the Registrar of an opinion of counsel or such other evidence which they may reasonably require that such sale or transfer is in compliance with the Securities Act.

4. It understands that, unless the Issuer determines otherwise in accordance with applicable law, certiﬁcates in respect of the Securities will bear the legend set forth above.

5. It acknowledges that the Issuer, the Registrar, the Underwriters and their afﬁliates and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements. If it is acquiring any Securities for the account of one or more qualiﬁed institutional buyers, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account.

57 CERTAIN ERISA CONSIDERATIONS

General The U.S. Employee Retirement Income Security Act of 1974, as amended (‘‘ERISA’’), imposes certain requirements on employee benefit plans subject to Title I of ERISA and on entities that are deemed to hold the assets of such plans (‘‘ERISA Plans’’), and on those persons who are fiduciaries with respect to ERISA Plans. Investments by ERISA Plans are subject to ERISA’s general fiduciary requirements, including, but not limited to, the requirement of investment prudence and diversification and the requirement than an ERISA Plan’s investments be made in accordance with the documents governing the ERISA Plan.

Section 406 of ERISA and Section 4975 of the Code (as defined in the section entitled ‘‘Taxation – United States’’) prohibit certain transactions involving the assets of an ERISA Plan (as well as those plans that are not subject to ERISA but which are subject to Section 4975 of the Code, such as individual retirement accounts (together with ERISA Plans, ‘‘Plans’’)) and certain persons (referred to as ‘‘parties in interest’’ or ‘‘disqualified persons’’) having certain relationships to such Plans, unless a statutory or administrative exemption is applicable to the transaction. A party in interest or disqualified person who engages in a prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code.

Any Plan fiduciary that proposes to cause a Plan to purchase the Securities should consult with its counsel regarding the applicability of the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Code to such an investment, and to confirm that such purchase and holding will not constitute or result in a non-exempt prohibited transaction or any other violation of an applicable requirement of ERISA or the Code.

Governmental plans and certain church plans and other plans, while not subject to the ﬁduciary responsibility provisions of ERISA or the prohibited transaction provisions of ERISA and Section 4975 of the Code, may nevertheless be subject to other federal, state or local laws or regulations that are substantially similar to the foregoing provisions of ERISA and the Code (‘‘Similar Law’’). Fiduciaries of any such plans should consult with their counsel before purchasing the Securities to determine the need for and the availability, if necessary, of any exemptive relief under any Similar Law.

Prohibited Transaction Exemptions The fiduciary of a Plan that proposes to purchase and hold Securities should consider, among other things, whether such purchase and holding may involve (i) the direct or indirect extension of credit to a party in interest or a disqualified person, (ii) the sale or exchange of any property between a Plan and a party in interest or a disqualified person, or (iii) the transfer to, or use by or for the benefit of, a party in interest or a disqualified person, of any Plan assets. Such parties in interest or disqualified persons could include, without limitation, the Issuer, the Underwriters or certain of their affiliates. Depending on the satisfaction of certain conditions which may include the identity of the Plan fiduciary making the decision to acquire or hold Securities on behalf of a Plan, Prohibited Transaction Class Exemption (‘‘PTCE’’) 84-14 (relating to transactions effected by a ‘‘qualified professional asset manager’’), PTCE 90-1 (relating to investments by insurance company pooled separate accounts), PCTE 91-38 (relating to investments by bank collective investment funds), PTCE 95-60 (relating to investments by an insurance company general account), or PTCE 96-23 (relating to transactions directed by an in-house asset manager) (collectively, the ‘‘Class Exemptions’’) could provide an exemption from the prohibited transaction provisions of ERISA and Section 4975 of the Code. However, there can be no assurance that any of these Class Exemptions or any other exemption will be available with respect to any particular transaction involving the Securities.

Therefore, each person who acquires or accepts Securities or an interest therein will be deemed by such acquisition or acceptance to have represented and warranted that either: (i) no assets of a Plan, governmental plan, church plan or other employee beneﬁt plan subject to similar law have been used to acquire or hold such Securities or an interest therein or (ii) the purchase and holding of such Securities or an interest therein by such person are exempt from the prohibited transaction restrictions of ERISA and the Code, or any provisions of Similar Law, as applicable, pursuant to one or more statutory or administrative exemptions.

58 Special Considerations Applicable to Insurance Company General Accounts Any insurance company proposing to invest assets of its general account in the Securities should consider the implications of the United States Supreme Court’s decision in John Hancock Mutual Life Insurance Co. v. Harris Trust and Savings Bank,510 U.S. 86, 114 S.Ct. 517 (1993), which in certain circumstances treats such general account assets as assets of a Plan that owns a policy or other contract with such insurance company, as well as the effect of Section 401(c) of ERISA as interpreted by regulations issued by the United States Department of Labor in January 2000.

EACH PLAN FIDUCIARY (AND EACH FIDUCIARY FOR A GOVERNMENTAL PLAN OR CHURCH PLAN SUBJECT TO SIMILAR LAW) SHOULD CONSULT WITH ITS LEGAL ADVISOR CONCERNING THE POTENTIAL CONSEQUENCES TO THE PLAN UNDER ERISA, THE CODE OR SUCH SIMILAR LAWS OF AN INVESTMENT IN THE SECURITIES.

Circular 230 Any discussion of U.S. federal tax matters set forth in this Prospectus was written in connection with the promotion and marketing by the Issuer of the Securities. Such discussion was not intended or written to be legal or tax advice to any person and was not intended or written to be used, and it cannot be used, by any person for the purpose of avoiding any U.S. federal tax penalties that may be imposed on such person. Each investor should seek advice based on its particular circumstances from an independent tax advisor.

59 TAXATION

Ireland The following summary of the anticipated tax treatment in Ireland in relation to the payment of interest on the Securities is based on Irish taxation law and the practices of the Irish Revenue Commissioners (the Irish tax authorities) as in force at the date of this Prospectus. It does not purport to be, and is not, a complete description of all of the tax considerations that may be relevant to a decision to subscribe for, buy, hold, sell, redeem or dispose of the Securities. The summary relates only to the position of persons who are the absolute beneﬁcial owners of the Securities and the interest payable on them (‘‘holders of Securities’’). Prospective investors should consult their own professional advisers on the implications of subscribing for, buying, holding, selling, redeeming or disposing of Securities and the receipt of interest on the Securities under the laws of the jurisdictions in which they may be liable to taxation.

Withholding Tax There are two types of withholding tax which potentially apply to payments of interest on the Securities: ﬁrstly, the withholding tax on ‘‘yearly interest’’ and ‘‘annual payments’’ and, secondly, the Deposit Interest Retention Tax (‘‘DIRT’’).

The withholding tax on ‘‘yearly interest’’ and ‘‘annual payments’’ does not apply to interest payments on the Securities because such payments are made in the ordinary course of a banking business. This would no longer be the case if the Issuer at any time ceased to be the holder of a banking licence under section 9 of the Central Bank Act, 1971 (as amended), to be a designated credit institution under the Asset Covered Securities Act, 2001 (as amended) or to carry on business in Ireland.

The withholding tax on ‘‘yearly interest’’ and ‘‘annual payments’’ does not apply to original issue discount, if any.

No withholding for or on account of DIRT is required to be made on interest or other payments on the Securities for so long as they continue to be listed on a stock exchange.

Encashment Tax Interest on any Security that is listed on a recognised stock exchange (the Irish Stock Exchange is such an exchange) and is paid to or realised by an agent in Ireland on behalf of a holder of the relevant Security will be subject to a withholding in respect of Irish income tax at the standard rate of income tax (at the date of this Prospectus being 20 percent) unless the beneﬁcial owner of the relevant Security that is entitled to interest is not resident for tax purposes in Ireland and makes a declaration in the required form.

Liability of Holders of Securities to Irish Income Tax In general, persons (including legal entities) who are resident or ordinarily resident for tax purposes in Ireland are liable to Irish tax (whether income tax, or as applicable, corporation tax) on their world-wide income.

For so long as the Securities are held in a recognised clearing system (Clearstream Frankfurt, Clearstream, Luxembourg, Euroclear and DTC are recognised clearing systems for this purpose), a person (whether or not a company) who is not resident in Ireland will not be chargeable to income tax in respect of interest paid on the Securities if the person is resident in a Member State of the European Union or in a jurisdiction with which Ireland has a double taxation treaty.

Capital Gains Tax As the Securities will be listed on a stock exchange, a holder of Securities will not be subject to Irish tax on capital gains in respect of the Securities unless that holder of Securities is either resident or ordinarily resident for tax purposes in Ireland or that holder has an enterprise, or an interest in an enterprise, which carries on business in Ireland through a branch or agency, or a permanent establishment, to which or to whom the Securities are attributable.

If the Securities cease at any time to be listed on a stock exchange, then an exemption from Irish capital gains tax in respect of the Securities will continue to apply to the holders of Securities who are exempt in the

60 circumstances referred to in the paragraph immediately above provided that the Securities do not derive their value, or the greater part of their value, from Irish land or certain Irish mineral rights.

Capital Acquisitions Tax If the Securities are comprised in a gift or inheritance taken from an Irish resident or ordinarily resident disponer or if the disponer’s successor is resident or ordinarily resident for tax purposes in Ireland, the disponer’s successor may be liable for Irish capital acquisitions tax.

It is possible that the Securities may be regarded for tax purposes as property situated in Ireland. Accordingly, if the Securities are comprised in a gift or inheritance, the disponer’s successor may be liable to Irish capital acquisitions tax, even though the disponer may not be domiciled, resident or ordinarily resident for tax purposes in Ireland. Bearer securities would be regarded as property situated in Ireland if they were ever to be physically kept or located in Ireland. Registered securities are not regarded as situated in Ireland if the principal register of the shares is maintained outside of Ireland. As of the date of this Prospectus, the principal register for any registered securities is maintained outside of Ireland.

A person who is not domiciled in Ireland for tax purposes is not treated for the purposes of the Irish capital acquisitions tax code as resident or ordinarily resident in Ireland unless that person has been resident for tax purposes in Ireland for the previous ﬁve consecutive years of assessment.

The standard rate of capital acquisitions tax is 20 percent. No tax applies on a gift or inheritance from a spouse.

Stamp Duty No Irish stamp duty is payable on the issue or transfer of the Securities.

United States General The following discussion is a summary of certain U.S. federal income tax consequences of the purchase, ownership and disposition of the Securities to U.S. Holders. As used herein, the term ‘‘U.S. Holder’’ means a beneﬁcial owner of Securities that is for U.S. federal income tax purposes (i) a citizen or resident of the United States, (ii) a corporation or entity treated as a corporation for U.S. federal income tax purposes organized in or under the laws of the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust if a court within the United States is able to exercise primary supervision over its administration and one or more ‘‘United States persons’’ have the authority to control all of its substantial decisions or a trust that has made a valid election under U.S. Treasury regulations to be treated as a domestic trust. In the case of a holder of Securities that is a partnership for U.S. federal income tax purposes, each partner will take into account its allocable share of the income or loss from the Securities and will take such income or loss into account under the rules of taxation applicable to such partner, taking into account the activities of the partnership and the partner.

This summary is limited to U.S. Holders that acquire the Securities at their original issuance and that will hold the Securities as capital assets. This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the ‘‘Code’’), and on U.S. Treasury regulations promulgated thereunder, as well as judicial and administrative interpretations thereof. All of the foregoing are subject to change, which change could apply retroactively and could affect the tax consequences described below. There may be other tax considerations not addressed in this summary that are applicable to particular U.S. Holders, such as banks, insurance companies, ﬁnancial institutions, dealers in securities or currencies, tax-exempt entities, persons that will hold the Securities as a position in a ‘‘straddle’’ or as part of a ‘‘hedging’’, ‘‘integrated’’ or ‘‘conversion’’ transaction for tax purposes, persons that have a ‘‘functional currency’’ other than the U.S. dollar or holders of 10 percent or more, by voting power or value, of the shares of the Issuer. Prospective investors should consult their tax advisers regarding the speciﬁc U.S. federal tax consequences of purchasing, holding, and disposing of the Securities, as well as the effects of state, local and foreign tax law and any proposed tax law changes.

61 Payments of Interest Interest on the Securities generally will be includible in income by a U.S. Holder as ordinary interest income at the time such interest is accrued or received (in accordance with the U.S. Holder’s regular method of tax accounting).

Interest income earned by a U.S. Holder with respect to a Security will constitute foreign source income for U.S. federal income tax purposes, which may be relevant to a U.S. Holder in calculating such holder’s foreign tax credit limitation. The limitation on foreign taxes eligible for credit is calculated separately with respect to speciﬁc classes of income. For this purpose, interest paid on the Securities in taxable years beginning on or before December 31, 2006 will generally constitute ‘‘passive income’’ or, in the case of certain U.S. Holders, ‘‘ﬁnancial services income.’’ Interest paid on the Securities in taxable years beginning after December 31, 2006 will generally constitute ‘‘passive income’’ or, in the case of certain U.S. Holders, ‘‘general category income.’’

Disposition of the Securities Upon the sale, exchange or retirement of a Security, a U.S. Holder generally will recognize taxable gain or loss equal to the difference between the amount realized on the sale, exchange or retirement and such U.S. holder’s adjusted tax basis in the Security. Except to the extent attributable to accrued but unpaid interest, gain or loss recognized on the sale, exchange or retirement of a Security will be capital gain or loss and will be long-term capital gain or loss if the Security was held for more than one year. The ability to deduct capital losses may be subject to limitations.

Tax Reporting and Backup Withholding Generally, tax reporting and backup withholding of U.S. federal income tax may apply to payments made by a paying agent in the United States, such as the New York Paying Agent, to registered owners of the Securities, or to proceeds from the sale by such owners of the Securities, if such owner is not an ‘‘exempt recipient’’ and fails to provide certain identifying information (such as the owner’s taxpayer identification number) in the required manner, or the IRS otherwise directs the paying agent to withhold. Generally, individuals are not exempt recipients, but corporations and certain other entities generally are exempt recipients. Compliance with certain identification procedures would also establish an exemption from backup withholding for those non- U.S. owners that are not exempt recipients when they receive payments from a paying agent in the United States. Any amounts withheld under the backup withholding rules from payments to a beneficial owner would be allowed as a refund or a credit against such beneficial owner’s U.S. federal income tax provided the required information is furnished to the IRS.

European Union Savings Tax Directive Under the European Union Council Directive 2003/48/EC on the taxation of savings income, each Member State of the European Union is required to provide to the tax authorities of another Member State details of payments of interest (or similar income) paid by a person within its jurisdiction to an individual resident in that other Member State. However, for a transitional period, Belgium, Luxembourg and Austria are instead required (unless during that period they elect otherwise) to operate a withholding system in relation to such payments (the ending of such transitional period being dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries) unless the beneﬁciary opts for the exchange of information. A number of non-European Union countries and territories, including Switzerland, have agreed to adopt similar measures (a withholding system in the case of Switzerland).

The Directive has been enacted into Irish legislation. Since January 1, 2004, where any person in the course of a business or profession carried on in Ireland, which would include the Irish Paying Agent, makes an interest payment to, or secures an interest payment for the immediate beneﬁt of, the beneﬁcial owner of that

62 interest, where that beneficial owner is an individual, that person must, in accordance with the methods prescribed in the legislation, establish the identity and residence of that beneficial owner. Where such a person makes such a payment to a ‘‘residual entity’’ then that interest payment is a ‘‘deemed interest payment’’ of the ‘‘residual entity’’ for the purpose of this legislation. A ‘‘residual entity,’’ in relation to ‘‘deemed interest payments,’’ must, in accordance with the methods prescribed in the legislation, establish the identity and residence of the beneficial owners of the interest payments received that are comprised in the ‘‘deemed interest payments.’’

‘‘Residual entity’’ means a person or undertaking established in Ireland or in another Member State or in an ‘‘associated territory’’ to which an interest payment is made for the benefit of a beneficial owner that is an individual, unless that person or undertaking is within the charge to corporation tax or a tax corresponding to corporation tax, or it has, in the prescribed format for the purposes of this legislation, elected to be treated in the same manner as an undertaking for collective investment in transferable securities within the meaning of the UCITS Directive 85/611/EEC, or it is such an entity or it is an equivalent entity established in an ‘‘associated territory,’’ or it is a legal person (not being an individual) other than certain Finnish or Swedish legal persons that are excluded from the exemption from this definition in the Directive.

Procedures relating to the reporting of details of payments of interest (or similar income) made by any person in the course of a business or profession carried on in Ireland, which would include the Irish Paying Agent, to beneﬁcial owners that are individuals or to residual entities resident in another Member State or an ‘‘associated territory’’ and procedures relating to the reporting of details of deemed interest payments made by residual entities where the beneﬁcial owner is an individual resident in another Member State or an ‘‘associated territory,’’ have applied since July 1, 2005. For the purposes of these paragraphs ‘‘associated territory’’ means Andorra, Liechtenstein, Monaco, San Marino, the Swiss Confederation, Aruba, Netherlands Antilles, Jersey, Gibraltar, Guernsey, Isle of Man, Anguilla, British Virgin Islands, Cayman Islands, Montserrat and Turks and Caicos Islands.

63 UNDERWRITING

Pursuant to an Underwriting Agreement dated March 13, 2007 (the ‘‘Underwriting Agreement’’), the underwriters listed below (each, an Underwriter and together, the ‘‘Underwriters’’)have severally agreed with the Issuer, subject to the satisfaction of certain conditions, to subscribe for the Securities.

Each Underwriter has agreed to subscribe for the Securities in the aggregate principal amount set forth opposite its name:

Underwriter Principal Amount Goldman Sachs International (financial institution) Peterborough Court, 133 Fleet Street, London EC4A 2BB, United Kingdom...... $393,333,334 Merrill Lynch International (financial institution) Merrill Lynch Financial Centre, 2 King Edward Street, London EC1A 1HQ, United Kingdom ...... $393,333,333 Morgan Stanley & Co. International Limited (financial institution) 25 Cabot Square, Canary Wharf, London E14 4QA, United Kingdom ...... $393,333,333 Barclays Bank PLC (financial institution) 5 The North Colonnade, Canary Wharf, London E14 4BB, United Kingdom ...... $10,000,000 BNP PARIBAS (financial institution) 10 Harewood Avenue, London NW1 6AA, United Kingdom ...... $10,000,000 Citigroup Global Markets Limited (financial institution) Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, United Kingdom ...... $10,000,000 Credit Suisse Securities (Europe) Limited (financial institution) One Cabot Square, London E14 4QJ, United Kingdom ...... $10,000,000 Deutsche Bank AG, London Branch (financial institution) Winchester House, 1 Great Winchester Street, London EC2N 2DB, United Kingdom ...... $10,000,000 Dresdner Bank AG London Branch (financial institution) Riverbank House, 2 Swan Lane, London EC4R 3UX, United Kingdom...... $10,000,000 J.P. Morgan Securities Ltd. (financial institution) 125 London Wall, London EC2Y 5AJ, United Kingdom...... $10,000,000

Total $1,250,000,000

The Issuer will pay the Underwriters an aggregate amount equal to 0.275 percent of the initial principal amount of the Securities as a combined management and underwriting fee and selling concession. The Underwriting Agreement entitles the Underwriters and the Issuer to terminate the issue of the Securities in certain circumstances prior to payment to the Issuer. The Issuer has agreed to indemnify the Underwriters against certain liabilities in connection with the offer and sale of the Securities and to reimburse the Underwriters for certain of their expenses.

United States The Securities have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or beneﬁt of, U.S. persons except in certain transactions exempt from the registration requirements of the Securities Act. Accordingly, the Securities are being offered and sold only (i) outside the United States in reliance on Regulation S and (ii) within the United States to qualiﬁed institutional buyers in accordance with Rule 144A.

In addition, until 40 days after the commencement of the offering of the Securities, an offer or sale of the Securities within the United States by any dealer (whether or not participating in the offering of the Securities) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A under the Securities Act.

The Underwriting Agreement also provides that Goldman Sachs International, Merrill Lynch International, Morgan Stanley & Co. International Limited and certain of the other Underwriters speciﬁed

64 herein, through their respective afﬁliates, propose to resell a portion of the Securities to persons reasonably believed to be qualiﬁed institutional buyers pursuant to Rule 144A under the Securities Act.

United Kingdom Each Underwriter has represented, warranted and agreed that: (i) it has only communicated or caused 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 Financial Services and Market Act 2000 (the ‘‘FSMA’’)) received by it in connection with the issue or sale of any Securities in circumstances in which Section 21(1) of the FSMA would not, if the Issuer was not an authorized person, apply to the Issuer; and (ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom.

Japan The Securities have not and will not be registered under the Securities and Exchange Law of Japan and accordingly, each Underwriter has represented, warranted and agreed that it will not offer or sell any Securities, directly or indirectly, in Japan or to, or for the beneﬁt of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan) or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

Italy The offering of the Securities has not been registered pursuant to Italian securities legislation and, accordingly, each Underwriter has represented, warranted to and agreed with the Company that, save as set out below, it has not offered or sold, and will not offer or sell, any Securities in the Republic of Italy in a solicitation to the public and that sales of the Securities in the Republic of Italy shall be effected in accordance with all Italian securities, tax and exchange control and other applicable laws and regulation.

Accordingly, each Underwriter has represented, warranted to and agreed with the Company that it will not offer, sell or deliver any Securities or distribute copies of the Prospectus and any other document relating to the Securities in the Republic of Italy except: (1) to ‘‘Professional Investors’’,asdefined in Article 31.2 of CONSOB Regulation No. 11522 of 1 July 1998, as amended (‘‘Regulation No. 11522’’), pursuant to Article 30.2 and 100 of Legislative Decree No. 58 of 24 February 1998, as amended (‘‘Decree No. 58’’); (2) that it may offer, sell or deliver Securities or distribute copies of any prospectus relating to such Securities in a solicitation to the public in the period commencing on the date of publication of such prospectus, provided that such prospectus has been approved in accordance with the European Directive 2003/71/CE, as implemented in Italy under Decree No. 58 and CONSOB Regulation No. 11971 of 14 May 1999, as amended (‘‘Regulation No. 11971’’), and ending on the date which is 12 months after the date of publication of such prospectus; and (3) in any other circumstances where an express exemption from compliance with the solicitation restrictions applies, as provided under Decree No. 58 or Regulation No. 11971. Any such offer, sale or delivery of the Securities or distribution of copies of the Prospectus or any other document relating to the Securities in the Republic of Italy must be: (a) made by investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with Legislative Decree No. 385 of 1 September 1993 as amended, Decree No. 58, Regulation No. 11522 and any other applicable laws and regulations; and (b) in compliance with any other applicable notification requirement or limitation which may be imposed by CONSOB or the Bank of Italy.

Ireland Each Underwriter has agreed that:

65 (i) it will not underwrite or place Securities in or involving Ireland otherwise than in conformity with the provisions of the Investment Intermediaries Acts, 1995 to 2000 of Ireland, as amended, including, without limitation, Sections 9 and 23 (including advertising restrictions made thereunder) thereof and the codes of conduct made under Section 37 thereof or, in the case of a credit institution exercising its rights under the Banking Consolidation Directive (2006/48/EC of June 14, 2006) in conformity with the codes of conduct or practice made under Section 117(1) of the Central Bank Act, 1989, of Ireland, as amended; and (ii) in connection with the offer or sale of Securities, it has only issued or passed on, and will only issue and pass on, in Ireland, any document received by it in connection with the issue of such Securities to persons who are persons to whom the document may otherwise lawfully be issued or passed on and in conformity with the Market Abuse (Directive 2003/6/EC) Regulations 2006 of Ireland and the Market Abuse Rules made by the Financial Regulator thereunder.

General Save for the Issuer having obtained the approval of this Prospectus by the Financial Regulator in its capacity as the Irish competent authority for the purposes of the Prospectus Directive and relevant Irish laws, no action has been or will be taken in any country or jurisdiction by the Issuer or any Underwriter that would, or is intended to, permit a public offering of the Securities, or possession or distribution of this Prospectus or any other offering material, in any country or jurisdiction where action for that purpose is required. Persons into whose hands this Prospectus comes are required by the Issuer and each of the Underwriters to comply with all applicable laws and regulations in each country or jurisdiction in which they purchase, offer, sell or deliver Securities or have in their possession, distribute or publish this Prospectus or any other offering material relating to the Securities, in all cases at their own expense.

66 GENERAL INFORMATION

1. Certain financial information relating to the financial period ended December 31, 2005 as contained in this Prospectus does not constitute or contain accounts a copy of which is required to be annexed to the Issuer’s annual return. The accounts for the Issuer for the financial period ended December 31, 2005 so required to be annexed have been so annexed and are incorporated by reference in this Prospectus. The auditors of the Issuer have made a report under section 193 of the Companies Act, 1990 in respect of those accounts without any qualifications as to any matter mentioned in section 193. 2. The financial statements of the Issuer for the year ended December 31, 2005, which are hereby incorporated by reference into this Prospectus, have been prepared in accordance with IFRS, and the financial statements of the Issuer for the year ended December 31, 2004, which are hereby incorporated by reference into this Prospectus, have been prepared in accordance with accounting standards generally accepted in Ireland, each as applicable for the Irish Companies Acts 1963 to 2005 and the Act. Those financial statements which are incorporated by reference into this Prospectus have been audited by PricewaterhouseCoopers a member of the Institute of Chartered Accountants in Ireland.

3. A duly authorized committee of the Board of Directors of the Issuer authorized the creation and issue of the Securities on March 12, 2007. 4. For the life of this Prospectus, copies of the following documents may be inspected by physical means at the registered office of the Issuer and at the office of the Irish Paying Agent: (a) the Memorandum and Articles of Association of the Issuer; (b) the Issuer’s financial statements for the two years ended December 31, 2005 and 2004 as incorporated by reference into this Prospectus and the independent auditor’s reports on those financial statements as incorporated by reference into this Prospectus; (c) the Issuer’s unaudited interim balance sheet and profit and loss accounts for the nine months ended September 30, 2006 as set out in the Appendix to this Prospectus; and (d) the Act.

5. No governmental, legal or arbitration proceedings which may have or have had a signiﬁcant effect on the Issuer’s ﬁnancial position have been held against the Issuer in the 12 months preceding the date of this Prospectus and the Issuer is not aware of any such proceedings which are pending or threatened.

6. Copies of the most recently published audited annual financial statements of the Issuer, the first of which relates to the financial year ending December 31, 2005, will be available at the registered office of the Issuer, currently 1 Commons Street, Dublin 1, Ireland and at the offices of the Irish Paying Agent. 7. The Securities represented by the Clearstream Frankfurt Global Certificate have been accepted for clearance through Euroclear and Clearstream, Luxembourg under the following numbers: Common Code: 029160066 International Securities Identification Number (‘‘ISIN’’): DE000A0LPMX0 Wertpapier-Kenn-Nummer (‘‘WKN’’): A0LPMX

8. The Securities represented by the DTC Global Certificate have been accepted for clearance by DTC under the following numbers: CUSIP Number: 249575AN1 Common Code: 029203024 ISIN: US249575AN19 WKN: A0LPQG 9. Other than as stated in this Prospectus, there has been no material adverse change in the prospects of the Issuer since December 31, 2005. Other than as stated in this Prospectus, there has been no significant change in the financial or trading position of the Issuer which has occurred since December 31, 2005. 10. Group accounts of the Issuer for the purposes of the European Communities (Credit Institutions: Accounts) Regulations, 1992 of Ireland in respect of the financial year ended December 31, 2005 have not been prepared because the Issuer is not required to prepare group accounts.

11. No website referred to in this Prospectus forms part of this Prospectus.

67 12. There are no material contracts that having been entered into outside the ordinary course of the business of the Issuer which could result in any group member being under an obligation or entitlement that is material to the ability of the Issuer to meet its obligations to holders of the Securities.

13. There is no provision for representation of holders of Securities. 14. The listing of Securities on the Ofﬁcial List of the Irish Stock Exchange and their admission to trading on the regulated market of the Irish Stock Exchange is expected to take place on or about the Issue Date. 15. The estimated total expenses relating to the admission to trading of the Securities on the Irish Stock Exchange is E50,000.

16. Save as otherwise stated in this Prospectus, so far as the Issuer is aware, no person involved in the offer of Securities has an interest material to the offer. 17. Information on the Group (other than the Issuer) has been obtained by the Issuer from DEPFA BANK plc. Such information has been accurately reproduced and as far as the Issuer is aware and is able to ascertain from information published by DEPFA BANK plc, no facts have been omitted which would render the relevant information in this Prospectus inaccurate or misleading. 18. Information on Clearstream Frankfurt, Clearstream, Luxembourg, DTC and Euroclear has been obtained by the Issuer from information published by the relevant clearing systems. Such information has been accurately reproduced and as far as the Issuer is aware and is able to ascertain from information published by those clearing systems, no facts have been omitted which would render the relevant information in this Prospectus inaccurate or misleading.

68 APPENDIX INDEX TO THE FINANCIAL INFORMATION OF DEPFA ACS BANK

DEPFA ACS BANK UNAUDITED INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 ALONG WITH COMPARATIVE INCOME STATEMENT FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2005 ...... F-2 UNAUDITED INTERIM BALANCE SHEET AS AT SEPTEMBER 30, 2006 ALONG WITH COMPARATIVE BALANCE SHEET AS AT DECEMBER 31, 2005...... F-3

F-1 Income statement

As at As at September 30, December 31, 2006 2005 (E millions)

NOTE 1 NOTE 2 Interest and similar income ...... 1,725 1,608 Interest expense and similar charges...... (1,668) (1,552) Net interest income ...... 57 56 Net fee and commission expense ...... — — Net trading income...... (3) 7 Gains less losses from financial assets...... 7 26 Other operating income ...... 3 1 Total Operating income...... 64 90 Operating expenses ...... (9) (9) Operating profit...... 55 81 Taxation...... (7) (8) Profit for the period...... 48 73

Note 1: The income statement set out above for DEPFA ACS BANK as at September 30, 2006 is unaudited and derived from the Issuer’s unaudited interim income statement for the nine months ended September 30, 2006. Note 2: The income statement set out above for DEPFA ACS BANK as at December 31, 2005 is derived from the Issuer’s related financial statements for the year ended December 31, 2005 incorporated by reference into this Prospectus, which have been audited by PricewaterhouseCoopers, independent auditors, and should be read in conjunction therewith.

F-2 Balance sheet

As at As at September 30, December 31, 2006 2005 (E millions)

NOTE 1 NOTE 2 ASSETS Cash and balances with central banks ...... 17 9 Loans and advances to banks ...... 15,194 13,906 Derivative ﬁnancial instruments ...... 832 1,378 Loans and advances to customers ...... 49,338 39,019 Investment securities – available-for-sale ...... 3,778 3,998 Other assets ...... 6 5 Total assets...... 69,165 58,315 LIABILITIES Deposits from banks ...... 23,833 18,147 Derivative ﬁnancial instruments ...... 2,230 2,774 Debt securities in issue ...... 42,117 36,519 Other borrowed funds ...... 389 256 Other liabilities...... 2 16 Current tax liabilities ...... 5 1 Deferred tax liabilities ...... 6 2 Total liabilities...... 68,582 57,715 EQUITY Equity attributable to equity holders of the company Share capital...... 510 510 Retained earnings...... 48 71 Other reserves...... 25 19 Total equity...... 583 600 Total equity and liabilities...... 69,165 58,315

Note 1: The summary balance sheet set out above for DEPFA ACS BANK as at September 30, 2006 is unaudited and derived from the Issuer’s unaudited interim balance sheet for the nine months ended September 30, 2006. Note 2: The summary balance sheet set out above for DEPFA ACS BANK as at December 31, 2005 is derived from the Issuer’s related financial statements for the year ended December 31, 2005 incorporated by reference into this Prospectus, which have been audited by PricewaterhouseCoopers, independent auditors, and should be read in conjunction therewith.

F-3 (This page has intentionally been left blank) PRINCIPAL EXECUTIVE OFFICE OF THE ISSUER DEPFA ACS BANK 1 Commons Street Dublin 1 Ireland COVER-ASSETS MONITOR AIB International Financial Services Limited AIB International Centre International Financial Services Centre Dublin 1 Ireland REGISTRAR Deutsche Bank Aktiengesellschaft Grosse Gallusstrasse 10-14 D-60272 Frankfurt am Main Germany

IRISH LISTING AGENT IRISH PAYING AGENT DEPFA BANK plc DEPFA BANK plc 1 Commons Street 1 Commons Street Dublin 1 Dublin 1 Ireland Ireland

NEW YORK PAYING AGENT PRINCIPAL PAYING AGENT Deutsche Bank Trust Company Americas Deutsche Bank Aktiengesellschaft C/o Deutsche Bank National Trust Company Grosse Gallusstrasse 10-14 Trust & Securities Services D-60272 Frankfurt am Main 25 DeForest Avenue, 2nd Floor Germany Summit, NJ 07901 U.S.A.

LEGAL ADVISORS TO THE ISSUER As to Irish Law As to United States Law McCann FitzGerald Sidley Austin LLP Riverside One 787 Seventh Avenue Sir John Rogerson’s Quay New York, New York 10019 Dublin 2 U.S.A. Ireland

LEGAL ADVISORS TO THE UNDERWRITERS As to United States Law Clifford Chance Limited Liability Partnership 10 Upper Bank Street London, E14 5JJ United Kingdom

AUDITORS TO THE ISSUER PricewaterhouseCoopers George’s Quay Dublin 2 Ireland