Base Prospectus dated 16 June 2015
THIS DOCUMENT IS A FREE TRANSLATION OF THE FRENCH LANGUAGE "PROSPECTUS DE BASE" DATED 16 JUNE 2015 PREPARED BY THE COMMUNAUTE URBAINE MARSEILLE PROVENCE METROPOLE. IN THE EVENT OF ANY AMBIGUITY OR CONFLICT BETWEEN CORRESPONDING STATEMENTS OR OTHER ITEMS CONTAINED IN THESE DOCUMENTS, THE RELEVANT STATEMENTS OR ITEMS OF THE FRENCH LANGUAGE "PROSPECTUS DE BASE" SHALL PREVAIL.
Communauté Urbaine Marseille Provence Métropole
Euro Medium Term Note Programme
of a maximum amount of Euro 400,000,000
The Communauté Urbaine Marseille Provence Métropole (the Issuer or the Communauté Urbaine Marseille Métropole or MPM) may, at any time, under the Euro Medium Term Note Programme (the Programme) which is subject to the present base prospectus (the Base Prospectus) and in compliance with applicable legislations, regulations and directives, issue debt notes (the Notes). The aggregate nominal amount of Notes outstanding shall not, at any time, exceed Euro 400,000,000. Application may, under certain circumstances be made for Notes to be admitted to trading on Euronext Paris (Euronext Paris). Euronext Paris is a regulated market as defined in Directive 2004/39/EC dated 21 April 2004 as amended (a Regulated Market). Notes may also be admitted to trading on another Regulated Market of a member State of the European Economic Area (EEA) or on a non-regulated market or not admitted to trading on any market. The final terms prepared for an issue of Notes (the Final Terms), based on the form set out in the Base Prospectus, shall specify whether or not such Notes shall be admitted to trading on a regulated market and shall list, if applicable, the relevant Regulated Market(s). The Notes admitted to trading on a Regulated Market shall have a nominal amount, specified in the Final Terms, greater or equal to euro 100,000 or any other greater amount which could be authorised or requested by any relevant competent authority or any applicable legislation or regulation. This Base Prospectus has been submitted for the approval of the Autorité des Marchés Financiers (AMF) which has granted it visa No. 15-277 on 16 June 2015. The Notes may be issued in dematerialised form (Dematerialised Notes) or materialised form (Materialised Notes), as more fully described in the Base Prospectus. Dematerialised Notes will be entered in an account in accordance with articles L. 211-3 et seq. of the French Code monétaire et financier. No physical document of title shall be issued in respect of Dematerialised Notes. Dematerialised Notes may be issued, at the option of the Issuer, either (a) in bearer form, inscribed on their date of issue in the books of Euroclear France (acting as central depositary), which shall credit the accounts of the Account Holders (as defined in "Terms and Conditions of the Notes - Form, denomination, and title") including Euroclear Bank S.A./N.V. (Euroclear) and the depositary bank for Clearstream Banking, société anonyme (Clearstream, Luxembourg) or (b) in registered form and, in such case, at the option of the relevant Noteholder (as defined in "Terms and Conditions of the Notes - Form, denomination and title"), either in pure registered form (au nominatif pur), in which case they shall be entered in an account maintained by the Issuer or any registration agent (as specified in the applicable Final Terms) on behalf of the Issuer, or in administered registered form (au nominatif administré), in which case they shall be entered in the accounts of the Account Holder nominated by the relevant Noteholder. Materialised Notes shall be issued in bearer form only and may only be issued outside France. A temporary global certificate in bearer form without interest coupons attached (Temporary Global Certificate) shall be issued initially in respect of the Materialised Notes. Such Temporary Global Certificate shall subsequently be exchanged for Materialised Notes represented by physical notes (Physical Notes) together with, if applicable, interest coupons, on a date falling at the earliest approximately 40 calendar days after the issue date of the Notes (unless postponed, as described in the section "Temporary Global Certificates in respect of Materialised Notes") upon certification that the Notes are not being held by U.S. Persons in accordance with U.S. Treasury regulations, as more fully described in the Base Prospectus. The Temporary Global Certificates shall be deposited (a) in the case of a Tranche (as defined in the section "General Description of the Programme") intended to be cleared through Euroclear and/or Clearstream, Luxembourg, on the issue date with a common depositary on behalf of Euroclear and Clearstream, Luxembourg, or (b) in the case of a Tranche intended to be cleared through a clearing system other than, or in addition to, Euroclear and/or Clearstream, Luxembourg or delivered outside any clearing system, in the manner agreed between the Issuer and the relevant Dealer (as defined below). The Issuer has been attributed an A+ rating, stable outlook by Fitch France S.A.S. (Fitch). The Programme has been attributed a A+ rating by Fitch. Notes issued under the Programme may or may not be attributed a rating. The rating attributed to the Notes, if any, shall be specified in the applicable Final Terms. The rating of the Notes may not necessarily be the same as that of the Programme. A rating is not a recommendation to buy, sell or hold Notes and may be suspended, amended or withdrawn at any time by the relevant rating agency. On the date of the Base Prospectus, Fitch is a rating agency established in the European Union and registered in accordance with Regulation (EC) No. 1060/2009 of the European Parliament and Council of 16 September 2009 relating to credit rating agencies as amended (the ANC Regulation) and is included on the list of rating agencies published on the European Financial Markets Authority website (www.esma.europa.eu/page/List-registered-and-certified-CRAs) in accordance with the ANC Regulation.
0013112-0000246 PA:15005400.8
Investors should be aware of the risks described in the section "Risk factors" before making any decision to invest in Notes issued under this Programme. The Base Prospectus, any supplement thereto and, so long as any Notes are admitted to trading on a Regulated Market in accordance with directive 2003/71/CE as amended (the Prospectus Directive), the applicable Final Terms shall be published on the websites of (a) the AMF (www.amf- france.org) and (b) the Issuer (http://www.marseille-provence.fr/index.php/institution/les-finances/emissions-obligataires) and shall be available for inspection and obtaining copies, free of charge, during normal office hours, on any day (except on Saturdays, Sundays and public holidays) at the specified offices of the Fiscal Agent or the Paying Agent(s).
Arranger
HSBC
Dealers
BARCLAYS HSBC
SOCIETE GENERALE CORPORATE & INVESTMENT NATIXIS BANKING
0013112-0000246 PA:15005400.8 2
This Base Prospectus (together with any supplement thereto) constitutes a base prospectus for the purposes of Article 5.4 of Prospectus Directive containing all relevant information on the Issuer to enable investors to make an informed assessment of the assets, business, financial position, results and prospects of the Issuer as well as of the rights attached to the Notes. Each Tranche (as defined in "General Description of the Programme") of Notes shall be issued in accordance with the provisions set forth in the "Terms and Conditions of the Notes" of this Base Prospectus, as completed by the provisions of the applicable Final Terms agreed between the Issuer and the relevant Dealers (as defined in "General Description of the Programme") at the time of issue of such Tranche. The Base Prospectus (together with any supplement thereto) combined with the Final Terms shall constitute a prospectus for the purposes of Article 5.1 of the Prospectus Directive.
The Issuer, having taken all reasonable care to ensure that such is the case, confirms that the information contained in this Base Prospectus is, to its knowledge, in accordance with the facts and contains no omission likely to affect its import. The Issuer accepts responsibility for the information contained in it.
In connection with the issue or sale of any Notes, no person has been authorised to provide any information or make any representation other than as set forth in this Base Prospectus. Otherwise, no such information or representation may be treated as having been authorised by the Issuer, the Arranger or any of the Dealers. Neither the delivery of this Base Prospectus nor any sale made on the basis of this document shall imply that there has been no adverse change in the situation, in particular the financial situation, of the Issuer since the date of this document or since the date of the most recent supplement to this prospectus, or that any other information provided in connection with this Programme is accurate on any date subsequent to the date on which it was provided or, if different, the date indicated on the document containing such information.
The distribution of this Base Prospectus and the offering or sale of any Notes may be restricted by law in certain countries. Neither the Issuer nor the Dealers give any warranty that this Base Prospectus shall be distributed in accordance with the law, or that the Notes shall be offered in accordance with the law, in compliance with any applicable registration or any other requirement in any jurisdiction or pursuant to any available exemption and they shall not be held liable for having facilitated any such distribution or offering. In particular, neither the Issuer nor the Dealers have taken any action with a view to distributing this Base Prospectus in any jurisdiction where action for such purpose is required. Accordingly, Notes may not be offered or sold, directly or indirectly, and neither this Base Prospectus nor any other material offering may be distributed or published in any jurisdiction, except in compliance with all applicable laws and regulations. Persons into whose possession this Base Prospectus or any Notes may fall must inform themselves about and comply with such restrictions concerning the distribution of this Base Prospectus and the offering and sale of Notes. In particular, there are restrictions on the distribution of this Base Prospectus and the offering and sale of Notes in the United States of America, Japan and the European Economic Area (notably in France, Italy and the United Kingdom).
The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the US Securities Act) or with any securities regulatory authority in any state or other jurisdiction of the United States of America and the Notes may include Materialised Notes in bearer form subject to US tax law requirements. Subject to certain exceptions, Notes may not be offered, sold or, in the case of Materialised Notes in bearer form, delivered in the United States of America or, in the case of certain Materialised Notes in bearer form, to U.S. Persons, as defined in the U.S. Internal Revenue Code of 1986, as amended (U.S. Internal Revenue Code of 1986) and regulations thereunder. Notes shall be offered and sold outside the United States of America in accordance with Regulation S of the US Securities Act (Regulation S).
0013112-0000246 PA:15005400.8 3
The section "Subscription and Sale" of this Base Prospectus contains a description of certain restrictions applicable to the offering, sale and transfer of Notes and distribution of this Base Prospectus.
This Base Prospectus constitutes neither an invitation nor an offer by or on behalf of the Issuer, the Dealers or the Arranger to subscribe for or purchase Notes.
Neither the Dealers nor the Issuer makes any representation to any prospective investor in the Notes as to the lawfulness of their investment under applicable laws. Any prospective investor in the Notes must be capable of assuming the economic risks that its investment in the Notes implies for an unlimited period of time.
Neither the Arranger nor any of the Dealers has verified the information contained in this Base Prospectus. Neither the Arranger nor any of the Dealers makes any express or implied representation, or accepts any liability, as to the accuracy or completeness of any information contained in this Base Prospectus. The Base Prospectus is not intended to provide the basis of any credit or other evaluation and must not be treated as a recommendation by the Issuer, the Arranger or any of the Dealers to any recipients of this Base Prospectus to buy Notes. Each prospective investor in Notes must make his own assessment of the relevance of the information contained in this Base Prospectus and his decision to purchase Notes must be based on such research as he considers necessary. Neither the Arranger nor any of the Dealers undertake to review the financial situation or the overall situation of the Issuer during the life of this Base Prospectus, nor undertake to pass on to any investor or prospective investor any information of which they become aware.
In connection with the issue of each Tranche, one of the Dealers may act as stabilisation manager (the "Stabilisation Manager"). The entity acting as Stabilisation Manager shall be specified in the applicable Final Terms. For the purposes of an issue, the Stabilisation Manager (or any person acting on behalf of the Stabilisation Manager) may over-allot Notes or take action with a view to supporting the market price of the Notes at a level higher than that which might otherwise prevail in the absence of such action. However, there is no assurance that the Stabilisation Manager (or any person acting on behalf of the Stabilisation Manager) will undertake such Stabilisation Measures. Such Stabilisation Measures may only commence after the date on which the final terms of the issue of the relevant Tranche have been made public and, once commenced, may be terminated at any time and must end no later than the earlier of the following two dates: (a) 30 calendar days after the issue date of the relevant Tranche and (b) 60 calendar days after the date of allotment of the Notes of the relevant Tranche. Any Stabilisation Measures taken must comply with all applicable laws and regulations.
In this Base Prospectus, unless otherwise provided or the context requires otherwise, any reference to "€", "Euro", "EUR" and "euro" refers to the lawful currency in the Member States of the European Union that have adopted the single currency introduced in accordance with the Treaty establishing the European Economic Community.
0013112-0000246 PA:15005400.8 4
TABLE OF CONTENTS
Page
General Description of the Programme ...... 6 Risk Factors ...... 11 Supplement to the Base Prospectus ...... 24 Terms and Conditions of the Notes ...... 25 Temporary Global Certificates in respect of Materialised Notes ...... 52 Description of the Issuer ...... 54 Taxation ...... 97 Subscription and Sale ...... 100 Form of Final Terms ...... 103 General Information ...... 114 Responsibility for the Base Prospectus ...... 116
0013112-0000246 PA:15005400.8 5
GENERAL DESCRIPTION OF THE PROGRAMME
The following general description must be read with all the information setup in this Base Prospectus. The Notes shall be issued pursuant to the terms agreed between the Issuer and the relevant Dealer(s) and shall be governed by the Terms and Conditions specified in pages 25 to 51 of the Base Prospectus.
Terms and expressions defined in the section "Terms and Conditions of the Notes" hereafter shall have the same meaning in this general description of the programme.
Issuer: Communauté Urbaine Marseille Provence Métropole Description of the Euro Medium Term Note Programme (the Programme). Programme: The Notes will constitute obligations pursuant French Law. Arranger: HSBC FRANCE Dealers: BARCLAYS BANK PLC HSBC FRANCE NATIXIS SOCIÉTÉ GÉNÉRALE The Issuer may, at any time, revoke any Dealer under the Programme, or appoint supplement Dealers either for one or several Tranches, or for the Programme as a whole. Any reference made in this Base Prospectus to the Permanent Dealers refers to persons named above as Dealers and to any other person who would have been appointed as a Dealer for the Programme as a whole (and who would have not been revoked) and any reference made to Dealers refers to any Permanent Dealer and any other person named as Dealer for one or several Tranches. Fiscal Agent and Principal BNP Paribas Securities Services Paying Agent: Calculation Agent: Unless otherwise stipulated in the applicable Final Terms, BNP Paribas Securities Services. Maximum Amount of the The aggregate nominal amount of the Notes outstanding shall not, at any Programme: time, exceed euros 400,000,000. Issuance method: The Notes shall be issued under syndicated or non-syndicated issues. The Notes shall be issued by series (each a Series), at same or different issue dates, and shall be governed (except for the first interest payment) by identical terms, the Notes of each Series being fungible amongst themselves. Each Series may be issued by tranches (each a Tranche), having same or different issue dates. The specific terms of each Tranche (which shall be supplemented, if necessary, on the basis of additional terms and shall be identical to the terms of the other Tranches of the same Series (with the exception of the issue date, issue price, first interest payment and nominal amount of the Tranche)) shall be set up in the applicable final terms (the Final Terms) supplementing this Base Prospectus.
0013112-0000246 PA:15005400.8 6
Maturities: Subject to compliance with all applicable legislations, regulations and directives, the Notes shall have a minimum maturity of one month and a maximum maturity of 30 years from the initial issue date as specified in the applicable Final Terms. Currencies: Notes shall be issued in euros. Denomination(s): The Notes shall have the denomination(s) specified in the applicable Final Terms (the Specified Denomination(s)). The Dematerialised Notes shall be issued in one Specified Denomination only. Notes admitted to trading on a regulated market shall have a unique denomination greater than or equal to euros 100,000 or to any other greater amount which could be authorised or required by the relevant competent authority or by any legislation or regulation applicable to the Specified Currency. Status of the Notes and The Notes and, if any, related Receipts and Coupons constitute direct, negative pledge: unconditional, non-subordinated and (subject to the following paragraph) non-guaranteed obligations of the Issuer which rank pari passu amongst themselves and (subject to mandatory exceptions under French Law) pari passu with any other present or future, non-subordinated and non- guaranteed obligation of the Issuer. As long as the Notes or, if any, Receipts or Coupons linked to the Notes will remain outstanding (as defined in the Terms), the Issuer will not grant or permit to subsist any mortgage, pledge, lien or any other security interest upon any of its assets or revenues, present or future, in order to secure any present or future indebtedness, represented by bonds, securities or other negotiable instruments admitted to trading with a maturity greater than a year and which are (or are able to be) admitted to trading on any market, unless the obligations of the Issuer under the Notes and, if any, Receipts and Coupons, do not benefit from an equivalent and pari passu security interest. Events of Default: The terms and conditions of the Notes set up events of default, as described further in paragraph "Terms and Conditions of the Notes – Events of default". Redemption Amount: Unless events of default or redemption and cancellation, the Notes shall be redeemed at the Maturity Date specified in the applicable Final Terms and at the Final Redemption Amount. Optional Redemption: The Final Terms prepared for each issue of Notes will indicate if whether or not they may be redeemed at the option of the Issuer (as a whole or in part) and/or at the option of the Noteholders before their expected maturity date, and if they may be, the terms applicable to such redemption. Anticipated Redemption: Subject to provisions of paragraph "Optional Redemption" above, the Notes shall only be redeemed with anticipation at the option of the Issuer for tax reasons. Withholding tax: All payments of principal, interest or other amounts linked to the Notes, Receipts or Coupons by or on behalf of the Issuer shall be made without any withholding or deduction for any taxes or duties of whatever nature imposed, levied or collected by or on behalf of France or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law.
0013112-0000246 PA:15005400.8 7
If French law should require that payments of principal or interest in respect of any Note, Receipt or Coupon be subject to withholding or deduction with respect to any taxes or duties whatsoever, present or future, the Issuer will, to the fullest extent then permitted by law, pay such additional amounts as may be necessary in order that the holders of Notes, Receipts and Coupons receive the full amount that would have been payable in the absence of such withholding or deduction; subject to certain exceptions described further in section "Terms and Conditions of the Notes - Taxation" of this Base Prospectus. Interests Periods and Rates: For each Series, the duration of interest periods of the Notes, the applicable interest rate and its calculation method may vary or stay the same, as the case may be. The Notes may have a maximum interest rate, a minimum interest rate or both at the same time. The Notes may bear interest at different rates during the same interest period through the use of sub- interest periods (defined in the Terms and Conditions as Accrual Interest Periods). All this information will figure in the applicable Final Terms. Fixed Rate Notes: Fixed interests will be payable in arrear at the date(s) for each period indicated in the applicable Final Terms. Floating Rate Notes: Floating Rate Notes will bear interest at the determined rate for each Series as follows: (a) on the same basis than the floating rate indicated in the relevant applicable Final Terms to a notional interest rate exchange transaction in the relevant Specified Currency, pursuant to the Fédération Bancaire Française (the FBF) Master Agreement dated June 2013 relating to transactions on forward financial instruments supplemented by the Technical Schedules published by the FBF; or (b) by reference to EURIBOR (or TIBEUR in French), to EONIA (or TEMPE in French), or to TEC10; in each case, as adjusted according to margins eventually applicable and paid at the dates indicated in the applicable Final Terms. Zero Coupon Notes: Zero Coupon Notes may be issued at par or below the par and will not pay interests.
Form of the Notes: The Notes may be issued either in dematerialised form (Dematerialised Notes) or in materialised form (Materialised Notes). Dematerialised Notes may be, at the option of the Issuer, issued in bearer form (au porteur) or in registered form (au nominatif) and, in such case, at the option of the relevant Noteholder, either in fully registered form (au nominatif pur) or in administered registered form (au nominatif administré). No document materialising the title of the Notes will be issued. Materialised Notes will only be in bearer form. A Temporary Global Certificate in respect of each Tranche of Materialised Notes will be initially issued. Materialised Notes may only be issued outside France.
0013112-0000246 PA:15005400.8 8
Governing Law: French law. Any dispute relating to the Notes, Receipts, Coupons or Talons shall be submitted to the competent court under jurisdiction of the Paris Court of Appeal (subject to mandatory provisions related to territorial jurisdiction of French courts). No attachment proceedings under private law can be taken and no seize proceedings can be implemented against the assets or properties of the Issuer as a legal person governed by public law. Clearing systems: Euroclear France as a central depositary in relation to the Dematerialised Notes and, in relation to the Materialised Notes, Clearstream Luxembourg and Euroclear or any other clearing system that may be agreed between the Issuer, the Fiscal Agent and the relevant Dealer. Notes admitted to trading on Euronext Paris will be cleared by Euroclear France. Initial Delivery of The accounting letter (lettre comptable) relating to each Tranche of Dematerialised Notes: Dematerialised Notes shall be delivered to Euroclear France, acting as central depositary, one Paris business day before the issue date of such Tranche. Initial Delivery of At least at the issue date of each Tranche of Dematerialised Notes, the Materialised Notes: Temporary Global Certificate relating to such Tranche shall be delivered to a common depositary for Euroclear and Clearstream Luxembourg, or to any other clearing system, or may be delivered outside any clearing system provided that the method of such delivery has been agreed in advance by the Issuer, the Fiscal Agent and the relevant Dealer(s). Issue Price: The Notes may be issued at their nominal amount or at a discount or premium to their nominal amount. Admission to Trading: On Euronext Paris and/or on any other Regulated Market of the European Economic Area (EEA) and/or on a non-regulated market which may be
indicated on the applicable Final Terms. The applicable Final Terms may specify that a Series of Notes shall not be admitted to trading. Rating: The Programme has been granted an A+ rating by Fitch France SAS. (Fitch). Notes issued under the Programme may be rated or not. The rating of the Notes, if any, shall be specified in the applicable Final Terms. The rating of the Notes may not necessarily be the same as that of the Programme. A rating is not a recommendation to buy, sell or hold Notes and may be suspended, amended or withdrawn at any time by the relevant rating agency. At the date of the Base Prospectus, Fitch is established in the European Union and registered pursuant to Regulation (EC) No. 1060/2009 of the European Parliament and the Council dated 16 September 2006 on credit rating agencies, as amended (the ANC Regulation) and is included on the list of registered credit rating agencies published by the European Securities and Markets Authority on its website (www.esma.europa.eu/page/List-registered-and-certified-CRAs) in accordance with the CRA Regulation. Selling restrictions: There are restrictions relating to the sale of Notes and the distribution of the offering materials in different jurisdictions. The Issuer is Category 1 for the purposes of Regulation S under the United States Securities Act of 1933, as amended.
0013112-0000246 PA:15005400.8 9
Materialised Notes shall be issued pursuant to Section (U.S. Treas. Reg.) §1.163-5(c)(2)(i)(D) of the U.S. Treasury Regulations (D Rules) unless (a) the applicable Final Terms provide that such Materialised Notes are issued pursuant to Section (U.S. Treas. Reg.) §1.163-5(c)(2)(i)(C) of the U.S. Treasury regulations (C Rules), or (b) the Materialised Notes are not issued pursuant to C Rules or D Rules, but under such conditions that these Materialised Notes shall not constitute "registration required obligations" by the United States Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), in such case the applicable Final Terms shall indicate that the transaction is outside the scope of the TEFRA rules. The TEFRA rules do not apply to Dematerialised Notes.
0013112-0000246 PA:15005400.8 10
RISK FACTORS
The Issuer believes that the risk factors described below are material to any decision whether or not to invest in the Notes and/or may affect its ability to fulfil its obligations to investors under the Notes. Those risks are unpredictable and the Issuer cannot comment on their potential occurrence.
The Issuer believes that the risk factors described below represent the main risks associated with Notes issued under the Programme, but they are not however exhaustive. The risks described below are not the only risks to which an investor in the Notes is exposed. Other risks and uncertainties, unknown to the Issuer at today's date or which it does not consider as at the date of this Base Prospectus to be material, may have a material impact on the risks associated with an investment in the Notes. Prospective investors should also read the detailed information appearing elsewhere in this Base Prospectus and form their own opinion before taking any investment decision. In particular, investors must make their own assessment of the risks associated with the Notes before investing in the Notes and must seek advice from their own tax, financial and legal advisers on the risks associated with an investment in a given Series of Notes and the suitability of an investment in the Notes in light of their own specific circumstances.
The Issuer believes that the Notes should only be purchased by investors who are (or act on the advice of) financial institutions or other professional investors who are able to assess the specific risks associated with an investment in the Notes.
Any reference below to an Article refers to the corresponding article number in the "Terms and Conditions of the Notes" section.
1. RISKS ASSOCIATED WITH THE ISSUER
The Issuer, an inter-communal cooperation public establishment (établissement public de coopération intercommunale), is not exposed to the legal risks associated with private law enforcement procedures, and its property and assets are not subject to seizure or attachment. Accordingly, and like all public law legal entities, the insolvency procedures set forth in the French Commercial Code do not apply to the Issuer.
1.1 Property and asset risks
The property and assets risks associated with the Issuer concern all of the damages, accidents, destruction and physical losses that may affect all or any of its moveable or real property, in particular as a result of a natural disaster, fire, vandalism, and so forth.
To cover such risks, local authorities and their groupings subscribe to appropriate insurance policies. Concerning the specific risks against which they are not under any obligation to have insurance cover, they may decide not to subscribe to insurance but rather handle any damages that might occur on their own.
1.2 Potential legal ratio warning factors
The ratios of law n° 92-125 of 6 February 1992 on the territorial administration of the French Republic (called the "ATR Law") provide the means of analysing the financial situation of a local community They are presented in a consolidated manner for each issuer, between the main budget and the ancillary budgets, in thousands of euros.
In practice, these ratios have mandatory legal force, but they also are warning factors for potential investors, when the level of expenditure (or revenue) reached is higher (or lower) than the national average for the relevant layer.
0013112-0000246 PA:15005400.8 11
Presentation of ratios (Source: the ratios come from the ATR Law n° 92-125 of 6 February 1992)
Ratio Measurement Actual Operating Expenditure per Inhabitant Measures the level of service rendered. Tax revenue per Inhabitant Measures the level of revenue per taxpayer, corresponding to the direct taxation divided by population. Actual Operating Revenue per Inhabitant (in Measures the financial resources of the local €) authority. Actual operating revenue excludes any surplus carried over from the previous financial year. Gross Equipment Expenditure per Inhabitant Measures spending on equipment. (in €) Outstanding Debt per Inhabitant (in €) Measures the level of indebtedness. This refers to the outstanding principal amount as at 31 December of the relevant financial year. Global Operating Endowment per Inhabitant Measures the main State endowment paid to (in €) local authorities. The ratio of Payroll Expenditure to Actual Relative measurement of payroll costs. This is an Operating Expenditure (as %) irreducible expenditure item, irrespective of the local authority's population. Tax revenue potential coefficient Measures the relative level of the tax burden borne by taxpayers. The ratio of Actual Operating Expenditure Measures the relative capacity to generate self- (including debt repayment) to Actual financing resources once mandatory expenses Operating Revenue (as %) have been paid. The ratio of Gross Equipment Expenditure to Measures the relative weight of investment in the Actual Operating Revenue (as %) budget. The ratio of Outstanding Debt to Actual Measures overall indebtedness, in other words Operating Revenue (as %) the debt burden relative to wealth.
(a) Thelegal ratios of Communauté Urbaine Marseille Provence Métropole
Data issued by the administrative accounts AA 2011, AA 2012 and AA 2013 are ratios calculated for the entire Community area of the Issuer.
In € / Main Budget Data AA* 2011 AA 2012 AA 2013 National Average for the tier, year 2012 Actual operating expenditure per inhabitant 499 542 524 831 Tax revenue per inhabitant 296 307 321 390 Actual operating revenue per inhabitant 564 577 584 870 Gross equipment expenditure inhabitant 140 188 198 298 Outstanding debt per inhabitant 781 817 905 843 Global operating endowment per inhabitant 183 182 181 232 Share of payroll expenditure in actual operating 18.17 17.21 17.82 22 expenditure (as %) Tax revenue potential coefficient 0.94 0.94 0.94 0.74
0013112-0000246 PA:15005400.8 12
In € / Main Budget Data Share of actual operating expenditure (including 88.57 101.8 97.59 104 debt repayment) in actual operating revenue (as %) Share of gross equipment expenditure in actual 24.78 32.61 33.90 34 operating revenue (as %) Share of outstanding debt in actual operating 127 142 150 96 revenue (as %)
*AA: The Administrative Account forms the management report of the Communauté Urbaine Marseille Provence Métropole (instructing party) for the past year. It sets out the cumulative funding credits, in both expenditure and revenue, voted by the Community Council, the expenditure and revenue realised by the instructing party during the past year, including those committed but not yet paid or received, and records the accounting results.
Data derived from the 2014 primary budget/supplemental budget and the 2015 primary budget constitute forecast data for 2014 and 2015. The legal ratios are presented on a consolidated basis (main budget and ancillary budgets):
In € / Data: Principal Budget PB+SB 2014 PB 2015 National Average for the tier, year 2013 Actual operating expenditure per inhabitant 573 570.44 777 Tax revenue per inhabitant 353 360.02 449 Actual operating revenue per inhabitant 621 623.62 964 Gross equipment expenditure inhabitant 238 244.86 217 Outstanding debt per inhabitant 903 929.89 749 Global operating endowment per inhabitant 175 163.90 224 Share of payroll expenditure in actual operating 17.09 17.42 25.3 expenditure (as %) Tax revenue potential coefficient n/a n/a 1.05 Share of actual operating expenditure (including 100.46 100.30 87.2 debt repayment) in actual operating revenue (as %) Share of total equipment expenditure in actual 38.29 39.26 22.6 operating revenue (as %) Share of outstanding debt in actual operating 145.29 149.11 77.7 revenue (as %)
*PB: The Primary Budget is a financial forecast document which records forecast revenue and expenditure for the year. It is prepared before the beginning of the financial year and includes an Operating section and an Investment section.
Data below represent the MPM’s legal Debt ratios on a consolidated basis (main budget and ancillary budgets).
In € / Consolidated data: Principal Budget and Ancillary Budgets 2011 National 2012 National Average for Average for the Tier 2011 the Tier 2012
Outstanding debt per inhabitant 1 402.92 1 127.39 1 406.73 1 256.09 Share of outstanding debt in actual operating 165.41 120.49 161.38 127.04 revenue (as %)
0013112-0000246 PA:15005400.8 13
In € / Consolidated data: Principal Budget and Ancillary Budgets 2013 National 2014 National Average for Average for the Tier 2013 the Tier 2014
Outstanding debt per inhabitant 1 499.43 1 293.95 1 533.07* Not available Share of outstanding debt in actual operating 158.75 124.00 162.32* Not available revenue (as %)
*Forecast data
1.3 Risks related to the Issuer’s tax potential
Tax potential is an indicator used to compare the potential tax wealth of local authorities relative to each other. It is calculated with the following four taxation items: the property tax, the real estate tax on developedland/built properties, the real estate tax on undeveloped land and the taxes replacing the former professional tax ("TP"). The tax potential is calculated by multiplying the gross bases for year N-1 by the national average rate.
2011 2012 2013 The tax potential for the 2012 financial year is derived from the 2012 global operating endowment notification. The method of calculation was changed as part of the 2011 tax reforms. By way of comparison, the Communauté Urbaine Marseille Provence Métropole’s tax potential is compared to the national average in the table below (amounts are expressed in Euros): Communauté Urbaine MPM 430 535 916 441 113 845 456 259 292 Tax potential National averages for the layer 565 120 000 Not available Not available
1.4 Financial risks associated with the Issuer's borrowings
A significant part of the Issuer's debt consists in a variable rate loans, the cost of which cannot be determined in advance. Indeed, a deterioration of the current market conditions could increase the cost of the Issuer’s debt.
However, the legal framework of the loans of the local authorities limits the risk of the Issuer insolvency.
Article 2 of law n° 82-213 of 2 March 1982, concerning the rights and freedoms of communes, départements and régions, abolished all State supervision over local authority actions. These changes led to the recognition of the wide freedom of local communities in financial matters and to the liberalisation and normalisation of the rules governing the local communities's loans. Henceforth,
0013112-0000246 PA:15005400.8 14
local authorities are free to use bond issues and their relationship with theirs investors is, in principle, governed by private law.
This freedom is subject to the following principles: Borrowings must only be used to finance capital expenditure; and the repayment of capital must be covered by own funds.
Furthermore, the law n° 2013-672 of 26 July 2013 on the separation and regulation of banking activities complements these principles as follows: for borrowings denominated in foreign currencies, the foreign exchange risk must be fully hedged by a (euro) currency swap agreement when the loan is signed, for the full amount and entire duration of the loan; where variable interest rates apply, indices and index spreads permitted for indexation clauses are set by decree of the Conseil d’Etat and the indexation formulas must satisfy simplicity and foreseeability criteria concerning the financial costs weighing on local authorities under such instruments.
Finally, the recent decree n° 2014-984 of 28 August 2014,adopted pursuant to the above-mentioned law dated 26 July 2013, sets forth the conditions under which local authorities may subscribe for loans with banking institutions and sign financial contracts, to limit high-risk borrowings. This decree entered into force on 1 October 2014.
Debt service (repayment of principal and interest) constitutes a mandatory expense and must therefore be registered in the Issuer's budget.
If the Issuer fails to satisfy thislegal requirement, its creditors may rely on the so-called automatic budget entry and payment execution procedures (article 1 – II of the codified law n°80-539 dated 16 July 1980 concerning administrative law coercive measures and the execution of judgements by public law legal entities as supplemented in articles L.1612-15 and L.1612-16 of the General Local Authorities Code). Under these provisions, once a final and non-appealable court decision has ordered a local authority, such as the Issuer, to pay a sum of money fixed by the decision itself, payment of such amount must be authorised within a period of two months from the date of notification of the judicial decision. Failing execution of payment within such period, the State representative in the Département (the Préfet) shall execute such payment ex officio ("mandatement d'office").
When credits are not sufficient to cover any of the Communauté Urbaine Marseille Provence Métropole’s mandatory expenses, the Préfet has the power to issue a formal notice to create the necessary funds; if the community council has not generated or created such funds within the period set in the formal notice, the Préfet enters the amount due ex officio in the Issuer’s budget by generating the necessary funds, either by cancelling or reducing other expenditure, or by creating the required funds.
In this regard, any failure on the part of the Préfet in implementing this procedure may result in the State being liable, potentially, for the full amount of the unpaid expenditure (cf. Conseil d’Etat, 18 November 2005, Société Fermière de Campoloro, req. n° 271898; Conseil d’Etat, 29 October 2010, Ministry for Food, Agriculture and Fisheries, req. n° 338001).
Furthermore, under the terms of article L.1612-15 of the General Local Authorities Code, this procedure may be initiated by the regional audit office (Chambre Régionale des Comptes) upon request either by the Préfet, or by the Issuer’s public auditor, or by any person with standing, for the purpose of determining, within a period of one month from the date of the request, that a mandatory
0013112-0000246 PA:15005400.8 15
expense has not been entered in the Issuer’s budget or has been entered but in an insufficient amount and to issue a formal notice to the Issuer to rectify its budget.
If, within the one-month period, such formal notice has not been complied with, the Chambre Régionale des Comptes requests the Préfet to enter such expense in the budget and proposes, if necessary, either that the funds are created or that non-mandatory expenses are reduced to cover the mandatory expense.
The principle of immunity from seizure or attachment of French local authority property (set forth in article L. 2311-1 of the General public entity property Code) protects the Issuer from the effect of general law enforcement measures, such as seizure of property.
The mandatory nature of debt repayment (capital and interest) is therefore a legal protection for lenders.
However, legal, economic, political or social imperatives or developments, which are difficult to foresee, may result in the Issuer voting unforeseen or additional budgetary expenditure, the corresponding revenue for which has to be generated either by use of revenue not specified in the primary budget, or by cancelling previously voted expenditure. These are voted by means of modificatory budgetary decisions which may be made during the course of the year.
These imperatives or developments may have an impact on the timeframe for implementation, or voting, of such modificatory budgetary decisions, and on the triggering by Noteholders of certain events of default as provided in paragraph 8 "Events of Default" of the Terms and Conditions of the Notes.
1.5 Risk of change in the Issuer’s sources of funds
The State administers the local tax of the territorial authorities, determines their base and then, using this base and the rates voted by the local authority or the EPCI, notifies the community what amount it will receive. The State guarantees that the local authority or the EPCI will receive the full amount of the notified tax receipts, regardless of the amount in fact collected. Furthermore, the State advances each month one twelfth of the amount of the taxes voted.
In terms of resources, the Issuer is exposed to any changes in its legal and regulatory environment.
The Issuer’s level of funding is, also, but not to a critical extent, dependent on the revenue paid by the State. The law n° 2014-1653 of 29 December 2014 on the planning of the public finances for the years 2014 to 2019 provides a decrease in all financial support paid annually by the State to local authorities.
Against this background, the planned decrease in the level of endowments paid by the State is likely to affect unfavourably the Issuer's operating revenue. Since budgetary balance has to be respected, the Issuer might either be required to adjust its expenses or to increase its other resources.
1.6 Historical information risk
The information contained in this Base Prospectus concern the past and current financial situation of the Issuer, and the rules of operation currently applicable to Issuer. These informations are provided for informational purposes only. No assurance can be given that future financial years will produce similar and/or comparable data, or that the operating rules and procedures currently applicable to the Issuer will remain unchanged.
0013112-0000246 PA:15005400.8 16
1.7 Potential conflicts of interest
All or some of the Dealers and their subsidiaries have engaged, and/or may in the future be engaged, in investment banking, commercial banking and other commercial and financial advisory activities with the Issuer. They have or may (i) engage in investment banking activities, dealing or hedging activities, including in activities which may include brokering, financing transactions or entering into derivative instruments (ii) act as underwriters in connection with offerings of notes issued by the Issuer or (iii) act as financial advisers to the Issuer. In connection with these activities, certain Dealers may hold or may have held securities issued by the Issuer. They may also have received or will receive the usual fees and commissions for such transactions.
Potential conflicts of interest may arise between the Calculation Agent, if any, for a particular Tranche of Notes and the Noteholders, including in respect of certain discretionary decisions or judgements that the Calculation Agent may be required to make under the Terms and Conditions of the Notes, which may have an impact on the amount received upon redemption of the Notes.
2. RISKS RELATING TO THE NOTES
2.1 General Market Risks
The debt instruments market may be volatile and be adversely affected by certain events
The securities market is affected by economic and market conditions and, to varying degrees, by interest rates, exchange rates and inflation in other European and industrialised countries. No assurance can be given that events in France, Europe or elsewhere will not cause market volatility or that such market volatility will not adversely affect the value of the Notes or that economic and market conditions will not have other adverse effects.
An active market in the Notes may not develop or be sustained
No assurance can be given that an active market in the Notes will develop or that, if such market does develop, that it will be sustained or offer sufficient liquidity. If an active market in the Notes does not develop or is not sustained, the market value or price and liquidity of the Notes may be adversely affected. Therefore, investors may not be in a position to easily sell their Notes or to sell them at a price offering a return comparable to similar products for which an active market has developed.
The Issuer has the right to purchase Notes, on the terms set forth in Article 5.7, and the Issuer may issue new Notes, on the terms set forth in Article 13. Such actions may favourably or adversely affect the value of the Notes. If additional or competing products are brought on to the markets, this may adversely affect the value of the Notes.
Exchange rate and exchange control risks
The Issuer pays the principal and interest on the Notes in euros (the Specified Currency). This presents certain currency conversion risks if the investor's financial activities are principally conducted in a different currency or monetary unit (the Investor's Currency) than the Specified Currency. Such risks include the risk that exchange rates may fluctuate significantly (including fluctuations due to devaluation of the Specified Currency or revaluation of the Investor's Currency) and the risk that the authorities with jurisdiction over the Investor's Currency may impose or modify exchange controls. An increase in the value of the Investor's Currency compared to the Specified Currency would reduce (i) the equivalent yield of the Notes in the Investor's Currency, (ii) the equivalent value in the Investor's Currency of the principal payable on the Notes and (iii) the equivalent market value in the Investor's Currency of the Notes.
0013112-0000246 PA:15005400.8 17
The Government and the monetary authorities may impose (as has happened in the past) exchange control measures that may adversely affect exchange rates. Accordingly, investors may receive payment of an amount of principal or interest less than expected, or receive neither interest nor principal.
Risks related to rating
The Programme has been rated A+ by Fitch. Independent credit rating agencies may assign a rating to Notes issued under this Programme. Such rating does not reflect the potential impact of the risk factors described in this section and all other risk factors that may affect the value of the Notes issued under this Programme. A rating does not constitute a recommendation to buy, sell or hold Notes and may be revised or withdrawn at any time by the rating agency.
2.2 General risks related to the Notes
The Notes may not be an appropriate investment for all investors
An investment in the Notes may not be appropriate for all investors. Such instruments may be acquired as a way to reduce risk or enhance yield with an understood, measured and appropriate additional risk to their overall investment portfolio. A prospective investor should not invest in Notes which are complex financial instruments unless it has the expertise (either alone or with the assistance of its financial adviser) to evaluate how the Notes will perform under changing conditions, the resulting effects on the value of the Notes and the impact this investment will have on the prospective investor's overall investment portfolio.
Each prospective investor must determine, based on his own assessment and with the assistance of any adviser he may consider appropriate in the circumstances, the suitability of an investment in the Notes in light of his personal circumstances. In particular, each prospective investor should:
(a) have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits and risks of investing in the relevant Notes and the information contained in this Base Prospectus or any applicable supplement and in the applicable Final Terms;
(b) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation and attitude to risk, an investment in the relevant Notes and the impact such the Notes might have on its overall investment portfolio;
(c) have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes;
(d) understand thoroughly the terms and conditions of the Notes and be familiar with the behaviour of any relevant reference rates and financial markets;
(e) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the relevant risks; and
(f) ensure that an investment in the Notes meets the regulations or the applicable law, notably in prudential matters.
The Notes may be redeemed prior to maturity
If, at the time of redemption of principal or payment of interest, the Issuer is obliged to pay Additional Amounts in accordance with Article 7.2, it may reimburse the Notes in full at the Early
0013112-0000246 PA:15005400.8 18
Redemption Amount together with, unless provided otherwise in the applicable Final Terms, all interest accrued until the relevant redemption date.
Similarly, if it becomes unlawful for the Issuer to fulfil or comply with its obligations under the Notes, the Issuer may, in accordance with Article 5.9, redeem the Notes, in full but not in part only, at the Early Redemption Amount together with all interest accrued until the relevant redemption date.
Any early redemption option available to the Issuer, specified in the Final Terms of an issue of Notes may result in the Noteholders receiving a return considerably below their expectations.
The Final Terms of an issue of Notes may include an early redemption option for the Issuer. In such case, the yield at the time of redemption may be lower than expected and the value of the amount redeemed may be less than the purchase price of the Notes paid by the Noteholder. Consequently, part of the capital invested by Noteholders in the Notes may be lost, resulting in the Noteholder receiving less than the full amount of capital invested. Furthermore, in the event of early redemption, investors who decide to reinvest the funds they receive may only be able to reinvest in securities that offer lower returns than the redeemed Notes.
Risks related to the optional redemption by the Issuer
The market value of the Notes may be affected by the optional redemption of the Notes at the option of the Issuer. During the periods where the Issuer can exercise such redemptions, in general, this market value does not substantially increase above the price at which the Notes may be redeemed. This can also be the case before any redemption period.
It can be expected that the Issuer would redeem the Notes when its borrowing costs are lower than the interest rate of the Notes. In such case, an investor will not, generally, reinvest the proceeds of the redemption at an actual interest rate as high as the interest rate of the redeemed Notes and may only be able to invest in Notes that offer a significantly lower yield. Prospective investors must also take into account the risk linked to the reinvestment in the light of other available investments at the time of the investment.
Amendment of the Terms and Conditions of the Notes
Noteholders will be grouped for the defence of their common interests in a Masse (as defined in Article 10 of the Terms and Conditions of the Notes "Representation of Noteholders") and may hold general meetings of Noteholders. The Terms and Conditions of the Notes provide that in certain cases Noteholders, not present or represented at a general meeting, may be bound by resolutions voted by Noteholders who were present or represented, even if they disagree with the decision.
The general meeting of Noteholders may, subject to the provisions of Article 10 of the Terms and Conditions of the Notes "Representation of Noteholders", deliberate on any proposal relating to the modification of the Terms and Conditions of the Notes, notably on any proposal, whether for arbitration or settlement, relating to rights that are in dispute or the subject of judicial decision.
Change of law
The Terms and Conditions of the Notes are governed by French law as of the date of this Base Prospectus. No assurance can be given as to the consequences of any judicial decision or any change of French law or regulation subsequent to the date of this Base Prospectus.
0013112-0000246 PA:15005400.8 19
Taxation
Prospective purchasers and sellers of the Notes should be aware that they may be required to pay taxes or documentary charges or duties in accordance with the laws and practices of the country where the Notes are transferred or in other jurisdictions. In some jurisdictions, no official statements of the tax authorities or court decisions on the tax treatment of securities such as the Notes are available.
Prospective investors are advised not to rely upon the tax summary contained in this Base Prospectus but to ask for their own tax adviser's advice based on their individual situation with respect to the acquisition, holding, proceeds, sale and redemption of the Notes. Only these advisors are in a position to duly consider the specific situation of a prospective investor.
These considerations relating to investment in the Notes should be read in connection with the "Taxation" section of this Base Prospectus.
European Directive on the taxation of savings income
Pursuant to the Council Directive 2003/48/EC on the taxation of savings income (the Savings Directive) Member States are obliged to provide to the tax authorities of other Member States detailed information on payments of interest or similar income made or attributed by any person established in a Member State to or for the benefit of a natural person resident in another Member State or to certain limited types of entity established in another Member State.
During a transitional period, Austria is required (unless during such period it decides otherwise) to apply a withholding tax system concerning such payments. The ending of this transitional period depends on the signing of certain other accords relating to the exchange of information with certain other countries. Several countries and territories outside the European Union, including Switzerland, have adopted similar measures (a withholding tax system in the case of Switzerland).
On 24 March 2014, the Council of the European Union adopted a directive (the Amending Directive) amending and widening the scope of the obligations described above. The Amending Directive imposes to Member States to apply these new obligations as from 1 January 2017 and, if they were taking effects, the amendments would widen the scope of payments covered by the Savings Directive, in particular by including certain additional types of income derived from securities. The Amending Directive would also widen the circumstances under which payments, which indirectly benefit a physical person resident in a Member State must be disclosed or subject to withholding taxes. This approach could apply to payments made or attributed for the benefit of, or by, persons, entities or legal structures (including trusts), where certain conditions are met, and may, in certain circumstances, apply where the person, entity or structure is established or effectively managed outside the European Union.
However, the European Commission has proposed the abolition of the Savings Directive as from the 1st January 2017 for Austria, and as from the 1st January 2016 for the other Member States (providing that they continue to comply with certain administrative obligations such as communication and exchange of information relating to payments made before those dates and the related withholding taxes). This provision has as object to prevent any redundancy between the Savings Directive and the new regime of automatic exchange of information that should be implemented in application of the Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation (as amended by the Council Directive 2014/107/EU). The proposal provides that, if it is implemented, Member States will not be required to apply new obligations provided by the Amending Directive.
If a payment in respect of the Notes is made or collected by a Member State which has opted for the withholding tax system and if such payment is subject to any levy or withholding by virtue of any
0013112-0000246 PA:15005400.8 20
tax or duty, present or future, neither the Issuer, nor any paying agent, nor any other person shall be obliged to pay any additional amounts in respect of the Notes as a result of the imposition of such tax or withholding. The Issuer must appoint and maintain a Paying Agent in a Member State in which it is not obliged to make such withholding.
Proposals of a European financial transactions tax (FTT)
On 14 February 2013, the European Commission published a proposal (the Commission Proposal) for a Directive for a common FTT in Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia (the participating Member States).
The Commission Proposal has very broad scope and could, if introduced, apply to certain dealings in the Notes (including secondary market transactions) in certain circumstances. The issuance and subscription of Notes should, however, be exempt.
Under the Commission Proposal, the FTT could apply in certain circumstances to persons both within and outside of the participating Member States. Generally, it would apply to certain dealings in the Notes where at least one party is a financial institution, and at least one party is established in a participating Member State. A financial institution may be, or be deemed to be, "established" in a participating Member State in a broad range of circumstances, including (a) by transacting with a person established in a participating Member State or (b) where the financial instrument which is subject to the dealings is issued in a participating Member State.
A joint declaration published in May 2014 by ten of the eleven participating Member States has expressed an intention to implement the FTT gradually, so that it shall initially apply to shares and certain derivative products, such initial implementation taking place on 1 January 2016 at the latest. The FTT, as initially implemented on this basis, may not apply to certain dealings in the Notes.
The FTT proposal is the subject of negotiation between the participating Member States. It may therefore be altered prior to any implementation. Additional EU Member States may decide to participate.
Prospective holders of the Notes are advised to seek their own professional advice in relation to the FTT.
Loss of investment in the Notes
The Issuer reserves the right to purchase Notes, at any price, on the stock exchange or otherwise, in accordance with applicable regulations. Although this does not impact on the normal schedule for redemption of the Notes remaining outstanding, it would however reduce the yield of the Notes redeemed early. Similarly, in the event of change of the taxation rules applicable to the Notes, the Issuer may be obliged to redeem the Notes in full at the Anticipated Redemption Amount as defined in the applicable Final Terms. Any early redemption of the Notes may result in the Noteholders receiving a yield significantly below their expectations.
Also there is a risk that the Notes will not be redeemed on their maturity date if the Issuer is no longer solvent. The non-redemption or partial redemption of the Notes would de facto result in a total or partial loss of investment in the Notes.
Finally, any sale of a Note on the market may occur at a price below the purchase price and cause a capital loss. Under this operation, the Investor does not benefit from any protection or guarantee of the invested capital. The initial invested capital is exposed to the market risks and may thus not be returned in case of adverse stock exchange evolution. Investors may lose all or part of their investment value, depending on the case.
0013112-0000246 PA:15005400.8 21
Verification of legality
The Préfet of the Department Bouches-du-Rhône has two months as from the date of the reception to the préfecture of any resolution or decision of the Communauté Urbaine Marseille Provence Métropole, and of some contracts entered into by it to verify their legality and, if he considers them to be illegal, to refer them to the relevant administrative tribunal and, if appropriate, seek an order for those of them which constitue administrative acts (actes administratifs) to be suspended. The relevant administrative tribunal may then, if it considers the referred acts to be illegal, order their suspension or annul them in whole or in part.
Third party action
A third party, having legal standing, may bring an action for abuse of authority before the administrative courts against any resolution of the Communauté Urbaine Marseille Provence Métropole and/or any decision to sign contracts issued by it, other than a resolution or decision which is not intrensecally connected to an administrative contract, within a period of two months as from the date of its publication and, if appropriate, seek an order for the suspension of their performance. This two months period can be extended if the action for abuse of authority brought against a resolution has been preceeded by an administrative redress, if such action is brought by a non resident or in some other circumstances. In addition, if such resolution or decision to sign are not published in an appropriate manner, such right of action shall be brought by any third party for an unlimited period.
In case of an action for abuse of authority brought against a resolution or decision to sign, other than a resolution or decision which is not intrinsically connected to an administrative contract, the competent administrative judge may then, if he consideres that such administrative acte is illegal, annul it totally or in part, which may lead to the illegality of the agreements entered into on the basis of the aforementioned administrative act.
In case a contract entered into by the Communauté Urbaine Marseille Provence Métropole was to be considered as an administrative contract, a third party having a legal standing may bring a full remedy action (recours de pleine jurisdiction) to the administrative courts against such contract or some of its non regulatory provisions which are not intrinsically connected to such contract, and as the case may be, seek an order for it to be suspended. Such action shall be brought in a two months period as from the date of the appropriate publications. Moreover, if the administrative contract has not been duly published, actions can be brought by a third party, having a legal standing, for an unlimited period.
If the competent judge points out the existence of any defects rendering the contract void, he can decide to terminate or annul the contract, after having evaluated the importance of such defects and of their consequences and after having taken in mind the nature of the defects.
2.3 Risks related to a specific issue of Notes
Floating Rate Notes
A key difference between Floating Rate Notes and Fixed Rate Notes is that interest payments on Floating Rate Notes cannot be predicted. Due to fluctuations in interest payments, investors cannot determine the actual yield on the Floating Rate Notes at the time of purchase, and therefore their investment returns cannot be compared to investments with longer fixed interest periods. If the terms and conditions of the Notes specify frequent interest payment dates, investors are exposed to reinvestment risk if market interest rates fall. In such case, investors will only be able to reinvest their interest income at a potentially lower prevailing interest rate.
0013112-0000246 PA:15005400.8 22
Accordingly, the market value of Floating Rate Notes may be volatile if changes, in particular short term changes, on the interest rate market applicable to the relevant rate cannot be applied to the interest rate of such Notes until the next periodic adjustment of the relevant rate.
Fixed Rate Notes
It cannot be ruled out that the value of Fixed Rate Notes may be adversely affected by future fluctuations on the interest rate markets.
Fixed to Floating/Floating to Fixed Rate Notes
Fixed/Floating Rate Notes may bear interest at a fixed rate which the Issuer may elect to convert into a floating rate or at a floating rate which the Issuer may elect to convert into a fixed rate. The existence of this Issuer conversion option may affect the secondary market in, or the market value of, the Notes to the extent that the Issuer may elect to convert the rate when this will enable it to reduce its overall borrowing costs. If the Issuer converts a fixed-rate into a floating rate, the rate spread on Fixed/Floating Rate Notes may be less favourable than spreads on Floating Rate Notes with the same benchmark rate. Furthermore, the new floating rate may be lower at any time than the interest rate on its other Notes. If the Issuer converts a floating rate into a fixed rate, the fixed rate may be lower than the rates on its other Notes.
Zero Coupon Notes and other Notes issued below par or with an issue premium
The market value of Zero Coupon Notes and other securities issued below par or with an issue premium tends to be more sensitive to fluctuation due to variations in interest rates than typical interest-bearing securities. Generally, the longer the maturity of the Notes, the more the price volatility of such Notes resembles that of typical interest-bearing securities of similar maturity.
0013112-0000246 PA:15005400.8 23
SUPPLEMENT TO THE BASE PROSPECTUS
Any new material fact or any material error or inaccuracy concerning the information contained in the Base Prospectus, which may have a substantial impact on any assessment of the Notes and which occurs or becomes apparent between the AMF visa and the beginning of the negotiation on a regulated market if this event occurs later, must be mentioned in a supplement to this Base Prospectus, in accordance with article 212-25 of the AMF General Regulations. The Issuer undertakes to submit the abovementioned supplement to the Base Prospectus for approval at the AMF and to give to each Dealer and to the AMF at least one copy of this supplement.
Any Base Prospectus supplement shall be published on the websites of (a) the AMF (www.amf-france.org), (b) the Issuer (http://www.marseille-provence.fr/index.php/institution/les-finances/emissions-obligataires) and (c) shall be available for inspection and obtaining copies, free of charge, during normal office hours, on any day of the week (except Saturdays, Sundays and public holidays) at the specified offices of the Fiscal Agent or the Paying Agent(s).
0013112-0000246 PA:15005400.8 24
TERMS AND CONDITIONS OF THE NOTES
The following is the text of the terms and conditions that, subject to completion in accordance with the provisions of the applicable Final Terms, shall apply to the Notes (the Terms and Conditions). In the case of Dematerialised Notes, the text of the terms and conditions of the Notes shall not appear on the reverse side of the Physical Notes evidencing title thereto, but shall be constituted by the following text as completed by the provisions of the applicable Final Terms. In the case of Materialised Notes, either (i) the full text of these terms and conditions together with the relevant provisions of the applicable Final Terms (as the same may be simplified by deletion of non-applicable terms) or (ii) the complete text of the terms and conditions, shall appear on the reverse side of the Physical Notes. All terms beginning with a capital letter and not defined in these Terms and Conditions shall have the meaning given to them in the applicable Final Terms. References made in the Terms and Conditions to the Notes refer to the Notes of a single Series and not to all Notes as may be issued under the Programme. The Notes constitute bonds (obligations) as defined under French law.
The Notes are issued by the Communauté Urbaine Marseille Provence Métropole (the Issuer or the Communauté Urbaine Marseille Provence Métropole) in series (each a Series), on the same issue date or on different dates. The terms and conditions of the Notes of any Series shall (with the exception of the issue date, the issue price, the nominal amount and the first interest payment) be identical, the Notes of each Series being fungible. Each Series may be issued in tranches (each a Tranche), on the same issue date or on different issue dates. The Notes shall be issued in accordance with the Terms and Conditions of this Base Prospectus, as supplemented by the provisions of the relevant final terms (the Final Terms) relating to the specific terms of each Tranche (including the issue date, the issue price, the first interest payment and the nominal amount of the Tranche), shall be set forth in the final terms (the Final Terms) supplementing this Base Prospectus. A fiscal agency agreement (as amended and supplemented, the Fiscal Agency Agreement) relating to the Notes was entered into on 16 June 2015 between the Issuer, BNP Paribas Securities Services as fiscal agent and principal paying agent and the other agents appointed therein. The fiscal agent, the paying agents and the calculation agent(s) for the time being (where relevant) are referred to below respectively as the Fiscal Agent, the Paying Agents (such term including the Fiscal Agent) and the Calculation Agent(s). Holders of interest coupons (Coupons) relating to interest-bearing Materialised Notes and, if applicable to such Notes, talons for additional Coupons (Talons) and the holders of receipts for instalments of principal paid on Materialised Notes (Receipts) are referred to respectively as Couponholders and Receipt Holders.
The term "day" in these Terms refers to a calendar day, unless specified otherwise.
Any reference below to Article refers to the numbered articles below, unless the context requires otherwise.
1. FORM, DENOMINATION AND TITLE
1.1 Form
The Notes may be issued either in dematerialised form (Dematerialised Notes) or in materialised form (Materialised Notes), as specified in the applicable Final Terms.
(a) Title to Dematerialised Notes is evidenced by entry in an account, in accordance with articles L. 211-3 et seq. of the French Code monétaire et financier. No physical document of title (including certificates of title in accordance with article R. 211-7 of the French Code monétaire et financier) shall be issued in respect of Dematerialised Notes.
Dematerialised Notes (as defined in articles L. 211-3 et seq. of the French Code monétaire et financier) are issued, at the option of the Issuer, either in bearer form, inscribed in the books of Euroclear France (acting as central depositary) which shall credit the accounts of the Account Holders, or in registered form, and in such case either, at the option of the relevant Noteholder, in administered registered form (au nominatif administré), entered in the accounts of an Account Holder nominated by the relevant holder of the Notes, or in pure
0013112-0000246 PA:15005400.8 25
registered form (au nominatif pur), entered in an account maintained by the Issuer or any registration agent (specified in the applicable Final Terms) acting on behalf of the Issuer (the Registration Agent).
(b) In these Terms, Account Holder means any intermediary authorised to hold securities accounts, directly or indirectly, with Euroclear France and includes Euroclear Bank S.A./N.V., as operator of the Euroclear system (Euroclear) and Clearstream Banking, société anonyme (Clearstream, Luxembourg).
(c) Materialised Notes are issued in bearer form only. Materialised Notes represented by physical notes (Physical Notes) are numbered in series and issued with Coupons (and, if applicable, with a Talon) attached, except in the case of Zero Coupon Notes in respect of which references to interest (except in relation to interest due after the Maturity Date), Coupons and Receipts in these Terms shall not apply. Instalment Notes are issued with one or more Receipts attached.
(d) In accordance with articles L.211-3 et seq. of the French Code monétaire et financier, financial securities (such as Notes which constitute obligations as defined under French law) in materialised form and governed by French law must be issued outside France.
The Notes may be Fixed Rate Notes, Floating Rate Notes, Fixed to Floating/Floating to Fixed Rate Notes, Instalment Notes and Zero Coupon Notes.
1.2 Denomination
The Notes shall be issued in the specified denomination(s) specified in the applicable Final Terms (the Specified Denomination(s)). Dematerialised Notes must be issued in one single Specified Denomination. Notes admitted to trading on a Regulated Market under circumstances that require the publication of a prospectus pursuant Directive 2003/71/CE of the European Parliament and Council dated 4 November 2010, since this directive have been implemented in a Member State of the European Economic Area (the Prospectus Directive) shall have a minimum specified denomination greater than or equal to euros 100,000 or to any other greater amount which could be allowed or required by any relevant competent authority or any law or regulation applicable to the Specified Currency.
1.3 Title
(a) Title to Dematerialised Notes in bearer form and in administered registered form (au nominatif administré) passes, and such Notes may only be transferred, by registration of the transfer in the books of the Account Holders. Title to Dematerialised Notes in pure registered form (au nominatif pur) passes, and such Notes may only be transferred, by registration of the transfer in the books held by the Issuer or the Registration Agent.
(b) Title to Physical Notes with, if applicable, Receipts, Coupons and/or a Talon attached at issue, is transferred by hand-to-hand delivery.
(c) Except as ordered by a court of competent jurisdiction or as required by law, the holder (as defined below under paragraph (d)) of any Note, Coupon, Receipt or Talon shall be deemed to be and may be treated as its absolute owner for all purposes, whether or not it is overdue and regardless of any notice of ownership, or any right over or interest in such Note, Coupon, Receipt or Talon, any writing on it or its theft or loss and no person shall be liable for so treating the holder.
0013112-0000246 PA:15005400.8 26
(d) In these Terms:
Noteholder or, as appropriate, holder of a Note means (i) in the case of Dematerialised Notes, the person whose name is recorded in the books of the relevant Account Holder, the Issuer or the Registration Agent (as applicable) as being the owner of such Notes, and (ii) in the case of Physical Notes, any holder of any Physical Note and the related Coupons, Receipts or Talons.
Outstanding means, in respect of Notes of any Series, all of the Notes in issue other than (i) those that have been redeemed in accordance with these Terms, (ii) those in respect of which the redemption date has passed and the redemption amount (including interest accrued on such Notes up to the redemption date and all interest payable after such date) has been duly paid in accordance with the provisions of Article 6, (iii) those that are no longer valid or in respect of which the limitation period has expired, (iv) those that have been repurchased and cancelled in accordance with Article 5.8, (v) those that have been repurchased and retained in accordance with Article 5.7, (vi) in the case of Physical Notes, (A) all damaged or defaced Physical Notes that have been exchanged for replacement Physical Notes, (B) (for the sole purpose of determining the number of Physical Notes outstanding and without prejudice to their status for any other purpose) any allegedly lost, stolen or destroyed Physical Notes for which replacement Physical Notes have been issued and (C) any Temporary Global Certificate to the extent that it has been exchanged for one or more Physical Notes in accordance with its terms.
Terms beginning with a capital letter shall have the meaning given to them in the applicable Final Terms. Where no definition is given, such term does not apply to the Notes.
2. CONVERSION AND EXCHANGE OF NOTES
2.1 Dematerialised Notes
(a) Dematerialised Notes issued in bearer form cannot be converted into Dematerialised Notes in registered form, whether in pure registered form (au nominatif pur) or in administered registered form (au nominatif administré).
(b) Dematerialised Notes issued in registered form cannot be converted into Dematerialised Notes in bearer form.
(c) Dematerialised Notes issued in pure registered form (au nominatif pur) may, at the option of the Noteholder, be converted into Notes in administered registered form (au nominatif administré), and vice versa. Such option must be exercised by the Noteholder in accordance with article R.211-4 of the French Code monétaire et financier. Any costs relating to such conversion shall be borne by the relevant Noteholder.
2.2 Materialised Notes
Materialised Notes of a Specified Denomination cannot be exchanged for Materialised Notes of another Specified Denomination.
3. STATUS AND NEGATIVE PLEDGE
The Notes and, if applicable, related Receipts and Coupons, constitute direct, unconditional, unsubordinated and (subject to the paragraph below) unsecured obligations of the Issuer ranking (subject to mandatory exceptions imposed by law) equally between themselves and equally and rateably with all other present or future unsecured and unsubordinated obligations of the Issuer.
0013112-0000246 PA:15005400.8 27
As long as the Notes or, if any, Receipts and Coupons attached to the Notes remain outstanding (as defined in Article 1.3(d) above), the Issuer shall not grant or permit to subsist any mortgage, pledge, lien or other form of security interest upon any assets or revenues, present or future, to secure any Indebtedness (as defined below) subscribe by the Issuer, unless the obligations of the Issuer under the Notes and, if any, the Coupons and Receipts benefit from equivalent and equal ranking security.
For the purpose of this Article, Indebtedness means any borrowing, present or future, represented by bonds, securities or other negotiable instruments (including, securities which are, or have been, initially distributed on a private placement basis) with a maturity greater than one year and which are (or may be) admitted to trading on any market.
4. CALCULATION OF INTEREST AND OTHER CALCULATIONS
4.1 Definitions
In these Terms, unless the context requires otherwise, the terms defined below shall have the following meaning:
Reference Banks (Banques de Référence) means the institutions specified in the applicable Final Terms or, if none is specified, four prime banks selected by the Calculation Agent on the interbank market (or if necessary, on the money market, the swaps market) with the closest connection to the Benchmark (which, if the relevant Benchmark is EURIBOR (TIBEUR in French) or EONIA (TEMPE in French) shall be the Euro-zone.
Interest Period Commencement Date (Date de Début de Période d'Intérêts) means the Issue Date of the Notes or any other date referred to in the applicable Final Terms.
Coupon Determination Date (Date de Détermination du Coupon) means, in respect of an Interest Rate and an Interest Accrual Period, the date specified as such in the applicable Final Terms or, if no date is specified the day falling two TARGET Business Days before the first day of such Interest Accrual Period.
Issue Date (Date d'Emission) means, in respect of a Tranche, the settlement date of the Notes.
Interest Payment Date (Date de Paiement du Coupon) means the date(s) referred to in the applicable Final Terms.
Interest Accrual Period Date (Date de Période d'Intérêts Courus) means each Interest Payment Date unless provided otherwise in the applicable Final Terms.
Relevant Date (Date de Référence) means in respect of any Note, Receipt or Coupon, the date on which the amount payable under such Note, Receipt or Coupon becomes due and payable or (if any due and payable amount is not paid or not paid in time without any justification) the date on which the outstanding amount is paid in full or (in the case of Materialised Notes, if such date falls earlier) the day falling seven calendar days after the date on which the holders of such Materialised Notes have been notified that, upon further presentation of such Materialised Note, Receipt or Coupon being made in accordance with the Terms, such payment will be made, provided however that the payment is in fact made on such presentation.
Effective Date (Date de Valeur) means, in respect of a Floating Rate to be determined on any Coupon Determination Date, the date specified in the applicable Final Terms, or, if no date is specified, the first day of the Interest Accrual Period to which such Coupon Determination Date relates.
0013112-0000246 PA:15005400.8 28
FBF Definitions (Définitions FBF) means the definitions referred to in the FBF Master Agreement of June 2013 relating to transactions on forward financial instruments, as supplemented by the Technical Schedules, as published by the Fédération Bancaire Française (together the FBF Master Agreement) as amended, as the case may be, at the Issue Date.
Specified Currency (Devise Prévue) means, euro.
Specified Duration (Durée Prévue) means, with respect to any Floating Rate to be determined by Screen Rate Determination on any Coupon Determination Date, the period specified in the applicable Final Terms, or if no period is specified, a period equal to the Interest Accrual Period, ignoring any adjustment pursuant to Article 4.3(b).
Relevant Time (Heure de Référence) means, with respect to any Coupon Determination Date, the local time in the Relevant Financial Centre specified in the applicable Final Terms or, if no time is specified, the local time in the Relevant Financial Centre at which it is customary to determine bid and offered rates in respect of deposits in the Specified Currency on the interbank market in the Relevant Financial Centre. Local time means, with respect to Europe and the Euro-zone as a Relevant Financial Centre, 11.00 a.m. (Brussels time).
Business Day (Jour Ouvré) means:
(a) in the case of euro, a day on which the Trans-European automated real-time gross settlement express transfer system (TARGET 2) (TARGET), or any system that replaces such system, is operating (a TARGET Business Day); and/or
(b) in the case of a Specified Currency and/or one or more business centre(s) specified in the applicable Final Terms (the Business Centre(s)), a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments in the currency of the Business Centre(s) or, if no currency is specified, generally in each of the specified Business Centres.
Margin (Marge) means, for any Interest Accrual Period, the percentage or the number for the relevant Interest Accrual Period, as indicated in the relevant Final Terms, being specified that it shall be positive, negative or zero.
Day Count Fraction (Méthode de Décompte des Jours) means, in respect of the calculation of an amount of coupon on any Note for any period of time (from (and including) the first day of such period to (but excluding) the last day in such period) (whether or not constituting an Interest Period, the Calculation Period):
(a) if Actual/365 or Actual/365-FBF is specified in the applicable Final Terms, it is the actual number of days in the Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in a leap year, the sum of (i) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (ii) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365);
(b) if Actual/Actual-ICMA is specified in the applicable Final Terms:
(i) if the Calculation Period is equal to or shorter than the Determination Period during which it falls, the number of days in the Calculation Period divided by the product of (A) the number of days in such Determination Period and (B) the number of Determination Periods that would normally end in one year; and
0013112-0000246 PA:15005400.8 29
(ii) if the Calculation Period is longer than the Determination Period, the sum:
(A) of the number of days in such Calculation Period falling in the Determination Period during which it begins, divided by the product (I) of the number of days in such Determination Period and (II) the number of Determination Periods that would normally end in one year; and
(B) the number of days in such Calculation Period falling in the following Determination Period, divided by the product (I) of the number of days in such Determination Period and (II) the number of Determination Periods that would normally end in one year,
in each case, Determination Period means the period beginning on a Coupon Determination Date (included) in any year and ending on the next Coupon Determination Date (excluded) and Coupon Determination Date means the date specified in the applicable Final Terms, or if no date is specified, the Interest Payment Date;
(c) if Actual/Actual - FBF is specified in the applicable Final Terms, the fraction of which the numerator is the actual number of days during such period and the denominator is 365 (or 366 if 29th February is included in the Calculation Period). If the Calculation Period is longer than one year, the basis shall be determined as follows:
(i) the number of complete years shall be counted back from the last day of the Calculation Period;
(ii) this number is increased by the fraction for the relevant period calculated as provided in the first paragraph of this definition;
(d) if Actual/365 (Fixed) is specified in the applicable Final Terms, the actual number of days in the Calculation Period divided by 365;
(e) if Actual/360 is specified in the applicable Final Terms, the actual number of days in the Calculation Period divided by 360;
(f) if 30/360, 360/360 or Bond Basis is specified in the applicable Final Terms, the number of days in the Calculation Period divided by 360 (i.e. the number of days to be calculated based on a 360 day year of 12 months of 30 days each (unless (i) the last day of the Calculation Period is the thirty-first day of a month and the first day of the Calculation Period is a day other than the thirtieth or thirty-first day of a month, in which case the month in which the last day falls shall not be reduced to a thirty day month or (ii) the last day of the Calculation Period is the last day of the month of February, in which case the month of February shall not be extended to a thirty day month));
(g) if 30/360 - FBF or Actual 30A/360 (American Bond Basis) is specified in the applicable Final Terms, then, in respect of each Calculation Period, the fraction of which the denominator is 360 and the numerator is the number of days calculated in the same manner as the 30E/360 – FBF basis, except in the following case:
where the last day of the Calculation Period is the 31st and the first is neither a 30th nor a 31st, the last month of the Calculation Period shall be deemed to be a month of 31 days.
0013112-0000246 PA:15005400.8 30
The fraction is:
if dd2 31and dd1 30,31,
then:
1 yy2 yy1 360 mm2 mm1 30 dd2 dd1 360
or:
1 yy2 yy1 360 mm2 mm1 30 Mindd2,30 Mindd1,30 360
where:
D1(dd1, mm1, yy1) is the commencement date of the period
D2(dd1, mm2, yy2 ) is the end date of the period;
(h) if 30E/360 or Euro Bond Basis is specified in the applicable Final Terms, the number of days in the Calculation Period divided by 360 (the number of days to be calculated based on a 360 day year of 12 months of 30 days each, ignoring the date on which the first or last day of the Calculation Period falls, unless, in the case of a Calculation Period ending on the Maturity Date, the Maturity Date is the last day of the month of February, in which case the month of February shall not be extended to a thirty day month); and
(i) if 30E/360 – FBF is specified in the applicable Final Terms, then, in respect of each Calculation Period, the fraction of which the denominator is 360 and the numerator is the number of days in such period, calculated on the basis of a year of 12 months of 30 days, except in the following case:
If the last day of the Calculation Period is the last day of the month of February, the number of days in such month is the exact number of days.
Using the same defined terms as used for 30/360 - FBF, the fraction is:
1 yy2 yy1 360 mm2 mm1 30 Mindd2,30 Mindd1,30 360
Coupon Amount (Montant de Coupon) means the amount of interest due and, in the case of Fixed Rate Notes, the Fixed Coupon Amount or the Broken Amount, (as defined under Article 4.2), as the case may be, as specified in the applicable Final Terms.
Representative Amount (Montant Donné) means, with respect to any Floating Rate to be determined in accordance with a Screen Rate Determination on a Coupon Determination Date, the amount specified as such on that date in the applicable Final Terms or, if none is specified, an amount that is representative for a single transaction in the relevant market at the time.
Screen Page (Page Ecran) means any page, section, heading, column or any other part of a document supplied by any information service (including without limitation Reuters (Reuters)) as may be nominated to provide a Relevant Rate or any other page, section, heading, column or any other part of a document of such information service or any other information service as may replace
0013112-0000246 PA:15005400.8 31
it, in each case as nominated by the entity or organisation providing or responsible for the dissemination of the information appearing on such service to indicate rates or prices comparable to the Relevant Rate, as specified in the Final Terms.
Interest Period (Période d'Intérêts) means the period beginning on (and including) the Interest Period Commencement Date and ending on (but excluding) the first Interest Payment Date as well as each subsequent period beginning on (and including) an Interest Payment Date and ending on (but excluding) the following Interest Payment Date.
Interest Accrual Period (Période d'Intérêts Courus) means the period beginning on (and including) the Interest Period Commencement Date and ending on (but excluding) the first Interest Accrual Period Date as well as each subsequent period beginning on (and including) an Interest Accrual Period Date and ending on (but excluding) the following Interest Accrual Period Date.
Relevant Financial Centre (Place Financière de Référence) means, in respect of a Floating Rate to be determined in accordance with a Screen Rate Determination on a Coupon Determination Date, such financial centre as may be specified in the applicable Final Terms or, if none is so specified, the financial centre with which the relevant Benchmark is most closely connected (which, in the case of EURIBOR (TIBEUR in French) or EONIA (TEMPE in French), shall be the Euro-zone or, failing which, Paris.
Benchmark (Référence de Marché) means the relevant rate (EURIBOR (or TIBEUR in French), EONIA (or TEMPE in French) or TEC10) as specified in the applicable Final Terms.
Interest Rate (Taux d'Intérêt) means the interest rate payable on the Notes and which is either specified or calculated in accordance with the provisions of these Terms, as supplemented by the applicable Final Terms.
Relevant Rate (Taux de Référence) means the Benchmark for a Representative Amount in the Specified Currency for a period equal to the Specified Duration commencing on the Effective Date (if such period is applicable to or compatible with the Benchmark).
Euro-zone (Zone Euro) means the region occupied by the Member states of the European Union that have adopted the single currency in accordance with the Treaty.
4.2 Interest on Fixed Rate Notes
Each Fixed Rate Note bears interest calculated on its outstanding nominal amount, as from the Interest Period Commencement Date, at an annual rate (expressed as a percentage) equal to the Interest Rate, payable annually, six-monthly, quarterly or monthly in arrears on each Interest Payment Date.
If a fixed coupon amount (Fixed Coupon Amount) or broken amount (Broken Amount) is specified in the applicable Final Terms, the Coupon Amount payable on each Interest Payment Date shall be equal to the Fixed Coupon Amount or, if applicable, the Broken Amount as specified, it shall be payable on the Interest Payment Date(s) specified in the applicable Final Terms.
4.3 Interest on Floating Rate Notes
(a) Interest Payment Dates
Each Floating Rate Note shall bear interest calculated on its unredeemed nominal amount, as from the Interest Period Commencement Date, at an annual rate (expressed as a percentage) equal to the Interest Rate, payable annually, six-monthly, quarterly or monthly in arrears on each Interest Payment Date. Such Interest Payment Date(s) shall be specified in the
0013112-0000246 PA:15005400.8 32
applicable Final Terms or, if no Interest Payment Date(s) is/are specified in the applicable Final Terms, Interest Payment Date shall mean each date falling at the end of such number of months or at the end of such other period as is specified in the applicable Final Terms as being the Interest Period, falling after the preceding Interest Payment Date and, in the case of the first Interest Payment Date, after the Interest Period Commencement Date.
(b) Business Day Convention
If any date referred to in these Terms, that is specified to be subject to adjustment in accordance with a Business Day Convention, would otherwise fall on a day that is not a Business Day, then, if the applicable Business Day Convention is (i) the Floating Rate Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event (x) such date shall be brought forward to the immediately preceding Business Day and (y) each such subsequent date shall be the last Business Day of the month in which such date would have fallen had it not been subject to adjustment, (ii) the Following Business Day Convention, such date shall be postponed to the next day that is a Business Day, (iii) the Modified Following Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event such date shall be brought forward to the immediately preceding Business Day or (iv) the Preceding Business Day Convention, such date shall be brought forward to the immediately preceding Business Day. Notwithstanding the above, if the applicable Final Terms specify that the Business Day Convention shall be applied on a "non-adjusted" basis, the Coupon Amount payable on any date shall not be affected by application of the relevant Business Day Convention.
(c) Interest Rate for Floating Rate Notes
The Interest Rate applicable to Floating Rate Notes for each Interest Accrual Period shall be determined in compliance with the provisions below relating to either FBF Determination or Screen Rate Determination shall apply, as specified in the applicable Final Terms.
(i) FBF Determination for Floating Rate Notes
Where FBF Determination is specified in the applicable Final Terms as being the method applicable for the determination of the Interest Rate, the Interest Rate applicable to each Interest Accrual Period shall be determined by the Agent as being a rate equal to the relevant FBF Rate plus or minus, as the case may be (as specified in the applicable Final Terms), the Margin. For the purposes of this sub-paragraph (i), "FBF Rate" in respect of an Interest Accrual Period means a rate equal to the Floating Rate as determined by the Agent for a swap transaction entered into pursuant to an FBF Master Agreement supplemented by the Interest Rate or Currency Swaps Technical Schedule under the terms of which:
(A) the relevant Floating Rate is as specified in the applicable Final Terms; and
(B) the Floating Rate Determination Date is as specified in the applicable Final Terms.
For the purposes of this sub-paragraph (i), "Floating Rate", "Agent", and "Floating Rate Determination Date" shall have the meanings given thereto in the FBF Definitions.
Except if otherwise provided in the applicable Final Terms, the Minimum Interest Rate shall be deemed to be zero.
0013112-0000246 PA:15005400.8 33
If the paragraph "Floating Rate", in the applicable Final Terms, provides that the interest rate in respect of an Interest Period shall be determined by linear interpolation, the Interest Rate applicable to this Interest Period shall be evaluated by the Calculation Agent through a linear interpolation between two (2) interest rates based on the relevant Floating Rate, the first one corresponding to a maturity immediately inferior to the relevant Interest Period and the second one corresponding to a maturity immediately superior to the same relevant Interest Period.
(ii) Screen Rate Determination for Floating Rate Notes
Where Screen Rate Determination is specified in the applicable Final Terms as being the method applicable for the determination of the Interest Rate, the Interest Rate for each Interest Accrual Period shall be determined by the Calculation Agent at (or about) the Relevant Time on the Coupon Determination Date relating to such Interest Accrual Period as specified below:
(A) if the primary source for the Floating Rate is a Screen Page, subject as provided below, the Interest Rate shall be:
I. the Relevant Rate (where such Relevant Rate on such Screen Page is a composite quotation or is customarily supplied by one entity); or
II. the arithmetic mean of the Relevant Rates of the entities whose Relevant Rates appear on that Screen Page;
in each case as published on such Screen Page, at the Relevant Time on the Coupon Determination Date as indicated in the applicable Final Terms, decreased or increased, if appropriate (as indicated in the relevant Final Terms), by the Margin;
(B) if the primary source for the Floating Rate is Reference Banks or if sub- paragraph (A)(I) above applies and no Relevant Rate appears on the Screen Page at the Relevant Time on the Coupon Determination Date or if sub- paragraph (A)(II) above applies and fewer than two Relevant Rates appear on the Screen Page at the Relevant Time on the Coupon Determination Date, the Interest Rate, subject as provided below, shall be equal to the arithmetic mean of the Relevant Rates that each of the Reference Banks is quoting to leading banks in the Relevant Financial Centre at the Relevant Time on the Coupon Determination Date, as determined by the Calculation Agent, decreased or increased, if appropriate (as indicated in the relevant Final Terms), by the Margin;
(C) if paragraph (B) above applies and the Calculation Agent determines that fewer than two Reference Banks are so quoting Relevant Rates, the Interest Rate shall, subject as provided below, be the arithmetic mean of the rates per annum (expressed as a percentage) that the Calculation Agent determines to be the rates (being the nearest equivalent to the Benchmark) in respect of a Representative Amount of the Specified Currency that at least two out of five leading banks selected by the Calculation Agent in the Euro- zone as selected by the Calculation Agent, (the Principal Financial Centre) are quoting at or about the Relevant Time on the date on which such banks would customarily quote such rates for a period beginning on the Effective Date for a period equivalent to the Specified Duration (I) to
0013112-0000246 PA:15005400.8 34
leading banks carrying on business in Europe, or (if the Calculation Agent determines that fewer than two of such banks are so quoting to leading banks in Europe) (II) to leading banks carrying on business in the Principal Financial Centre; except that, if fewer than two of such banks are so quoting to leading banks in the Principal Financial Centre, the Interest Rate shall be the Interest Rate determined on the previous Coupon Determination Date (after readjustment for any difference between any Margin, Rate Multiplier or Maximum or Minimum Interest Rate applicable to the preceding Interest Accrual Period and to the relevant Interest Accrual Period).
If the paragraph "Benchmark" in the applicable Final Terms provides that the interest rate in respect of an Interst Period shall be determined by linear interpolation, the Calculation Agent shall calculate the interest rate applicable to the relavant Interest Period, by linear interpolation between two (2) interest rates based on the relevant Benchmark, the first one corresponding to a maturity immediately inferior to the duration of the relevant Interest Period, and the second one corresponding to a maturity immediately superior to the same relevant Interest Period;
(D) When a Screen Rate Determination is indicated in the relevant Final Terms as the method used to determine the Interest Rate and that the Relevant Rate relating to Floating Rate Notes is specified as the TEC10, the Interest Rate for each Interest Accrual Period, subject to the provisions as set forth above, shall be determined by the Calculation Agent, based on the following formulae:
TEC10 + Marge.
"TEC10" refers to the free valuation (expressed as a percentage per year) for the EUR-TEC10-CNO calculated by the French Bond Association (Comité de Normalisation Obligataire - "CNO"), listed on the relevant Screen Page which is the row "TEC10" on the Reuters Screen Page CNOTEC10 or any successor page, at 10 a.m. Paris Time, on the relevant Coupon Determination Date; and
(E) If, during any Coupon Determination Date, the TEC10 does not display on the Reuters Screen Page CNOTEC or any successor page, (i) the Calculation Agent shall determine it on the basis of the mid-market exchange rate for each of the two French Treasury Bills (Obligation Assimilable du Trésor – "OAT") references which would have been used by the CNO for calculation of the applicable rate, in each case assessed by five Primary dealers (which are the market counterparties of choice for the Agency France Trésor and the Caisse de la dette publique for most of their activities on the markets, and which have the responsibility to participate in auctions, to invest Treasury issues and to maintain the liquidity of the secondary market), around 10 a.m. Paris Time, at the relevant Coupon Determination Date; (ii) the Calculation Agent shall ask to each Primary dealer to provide the price yield valuation; and (iii) the TEC10 shall be the yield to call of the arithmetic mean of such prices, which is determined by the Calculation Agent after elimination of both the highest and the lowest estimate. The yield to call as mentioned earlier shall be determined by the Calculation Agent in accordance with the formulae that has been used by the CNO to determine the relevant rate.
0013112-0000246 PA:15005400.8 35
For information purposes, the EUR-TEC10-CNO, established in 1996, is the performance percentage (which is rounded to the nearest cent and 0,005 per cent being rounded up to the 100th above) of an OAT notional to 10 years corresponding to the linear interpolation between yield to maturity of the two existing OAT (the "Reference OAT") whose periods until maturity are the closest in duration of the notional OAT to 10 years, the duration of a Reference OAT being under 10 years and the duration of the other Reference OAT being 10 years or more.
4.4 Fixed Interest Rate/Floating Interest Rate of the Notes
Each Fixed Interest Rate/Floating Interest Rate Notes bears interest at a rate (i) that the Issuer may decide to convert at the date specified in the applicable Final Terms from a Fixed Rate to a Floating Rate or (ii) which shall be automatically converted from a Fixed Rate to a Floating Rate at the date specified in the applicable Final Terms.
4.5 Zero Coupon Notes
Where a Zero Coupon Note is redeemable prior to its Maturity Date by exercise of an Option of Redemption of the Issuer or, if so specified in the applicable Final Terms, pursuant to Article 5.5 or in any other manner, and such Note is not redeemed on the due date, the amount due and payable prior to the Maturity Date shall be the Early Redemption Amount. As from the Maturity Date, the overdue principal of such Note shall bear interest at a rate per annum (expressed as a percentage) equal to the Amortisation Yield (as defined in Article 5.5(a)(ii)).
4.6 Accrual of interest
Interest shall cease to accrue on each Note on the due date for redemption unless (a) on such due date, in the case of Dematerialised Notes or (b) upon due presentation, in the case of Materialised Notes, repayment of principal is improperly withheld or refused; in which event interest shall continue to accrue (after as well as before judgment) at the Interest Rate in the manner provided in Article 4 up to the Relevant Date.
4.7 Margin, Rate Multipliers, Interest Rate, Instalment Amount, Minimum and Maximum Redemption Amounts and Rounding
(a) If a Margin or Rate Multiplier is specified in the applicable Final Terms (either (x) generally or (y) in relation to one or more Interest Accrual Periods), an adjustment shall be made to all Interest Rates, in the case of (x), or the Interest Rates applicable to the relevant Interest Accrual Periods, in the case of (y), calculated in accordance with paragraph (c) above by adding (if a positive number) or subtracting (if a negative number) the absolute value of such Margin or by multiplying the Interest Rate by such Rate Multiplier, subject always to the provisions of the following paragraph.
(b) If any Minimum or Maximum Interest Rate, Instalment Amount or Redemption Amount is specified in the applicable Final Terms, then any Interest Rate, Instalment Amount or Redemption Amount shall be subject to such maximum or minimum, as the case may be.
(c) For the purposes of any calculations required pursuant to these Terms (unless otherwise specified), (i) if FBF Determination is specified in the applicable Final Terms, all percentages resulting from such calculations shall be rounded, if necessary, to the nearest ten thousandth of a percentage point (with halves being rounded up) (ii) all percentages resulting from such calculations shall be rounded, if necessary, to the nearest fifth decimal place (with halves being rounded up), and (iii) all figures shall be rounded to seven significant figures (with halves being rounded up).
0013112-0000246 PA:15005400.8 36
4.8 Calculations
The amount of interest payable in respect of any Note for any period shall be calculated by multiplying the product of the Interest Rate and the outstanding nominal amount of such Note by the Day Count Fraction, unless a Coupon Amount (or a formula for its calculation) is specified in respect of such period, in which case the amount of interest payable in respect of such Note for such period shall be equal to such Coupon Amount (or be calculated in accordance with such formula). Where any Interest Period comprises two or more Interest Accrual Periods, the amount of interest payable in respect of such Interest Period shall be the sum of the amounts of interest payable in respect of each of those Interest Accrual Periods.
4.9 Determination and publication of Interest Rates, Coupon Amounts, Final Redemption Amounts, Early Redemption Amounts, Optional Redemption Amounts and Instalment Amounts
As soon as practicable after the relevant time on such date as the Calculation Agent may be required to calculate any rate or amount, obtain any quotation or make any determination or calculation, it shall determine such rate and calculate the Coupon Amounts in respect of each Specified Denomination of the Notes for the relevant Interest Accrual Period. It shall also calculate the Final Redemption Amount, Early Redemption Amount, Optional Redemption Amount or Instalment Amount, obtain such quotation or make such determination or calculation, as the case may be. It shall then cause the Interest Rate and the Coupon Amounts for each Interest Period and the relevant Interest Payment Date and, if required, the Final Redemption Amount, Early Redemption Amount or any Optional Redemption Amount or any other Instalment Amount to be notified to the Fiscal Agent, the Issuer, each of the Paying Agents and any other Calculation Agent appointed in respect of the Notes that is to make a further calculation upon receipt of such information. If the Notes are admitted to trading on a regulated market and the rules of such market so require, it shall also notify such information to such market and/or the Noteholders as soon as possible after their determination but in no event later than (i) the commencement of the relevant Interest Period, if determined prior to such time, in the case of notification to such market of an Interest Rate and Coupon Amount, or (ii) in all other cases, no later than the fourth Business Day after such determination. Where any Interest Payment Date or Interest Accrual Period Date is subject to adjustment pursuant to Article 4.3(b), the Coupon Amounts and the Interest Payment Date so published may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without notice in the event of an extension or shortening of the Interest Period. The determination of any rate or amount, the obtaining of each quotation and the making of each determination or calculation by the Calculation Agent(s) shall (in the absence of manifest error) be final and binding upon all parties.
4.10 Calculation Agent and Reference Banks
The Issuer shall procure that there shall at all times be four Reference Banks (or such other number as may be required) with at least one office in the Relevant Financial Centre and one or more Calculation Agents if so specified in the applicable Final Terms and for so long as any Note is outstanding (as defined in Article 1.3(c) above). If any Reference Bank (acting through its relevant office) is unable or unwilling to continue to act as a Reference Bank, then the Issuer shall appoint another Reference Bank with an office in the Relevant Financial Centre to act as such in its place. Where more than one Calculation Agent is appointed in respect of the Notes, references in these Terms to the Calculation Agent shall be construed as a reference to each Calculation Agent performing its respective duties under these Terms. If the Calculation Agent is unable or unwilling to act as such or if the Calculation Agent fails duly to establish the Interest Rate for an Interest Period or Interest Accrual Period or to calculate any Coupon Amount, Instalment Amount, Final Redemption Amount, Optional Redemption Amount or Early Redemption Amount, as the case may be, or to comply with any other requirement, the Issuer shall appoint a leading bank or investment bank operating in the interbank market (or, if appropriate, money market, swaps market or over-the-
0013112-0000246 PA:15005400.8 37
counter index options market) that is most closely connected with the calculation or determination to be made by the Calculation Agent (acting through its principal Paris office or any other office actively involved in such market) to act as such in its place. The Calculation Agent may not resign its duties without a successor having been appointed in the manner described above.
5. REDEMPTION, PURCHASE AND OPTIONS
5.1 Redemption at maturity
Unless previously redeemed, purchased and cancelled as provided below, each Note shall be finally redeemed on the Maturity Date specified in the applicable Final Terms at its Final Redemption Amount (which, unless provided otherwise, is equal to its nominal amount (except for Zero Coupon Notes)) as specified in the applicable Final Terms or, in the case of Notes to which Condition 5.2 below applies, to its last Instalment Amount.
5.2 Redemption by Instalments
Unless previously redeemed, purchased or cancelled as provided in this Article 5 or the relevant Instalment Date (being one of the dates so specified in the applicable Final Terms) is extended pursuant to any Issuer's or Noteholder's option in accordance with Condition 5.3 or 5.4, each Note that provides for Instalment Dates and Instalment Amounts shall be partially redeemed on each Instalment Date at the related Instalment Amount specified in the applicable Final Terms. The outstanding principal amount of each such Note shall be reduced by the Instalment Amount (or, if such Instalment Amount is calculated by reference to a proportion of the principal amount of such Note, such proportion) for all purposes with effect from the related Instalment Date, unless payment of the Instalment Amount is improperly withheld or refused (i) in the case of Dematerialised Notes, on the scheduled payment date or (ii) in the case of Materialised Notes, on presentation of the related Receipt, in which case, such amount shall remain outstanding until the Relevant Date relating to such Instalment Amount.
5.3 Redemption at the option of the Issuer
If Issuer Call is specified in the applicable Final Terms, the Issuer may, subject to compliance by the Issuer with all applicable laws, regulations and directives, and on giving not less than 15 and not more than 30 calendar days' irrevocable notice to the Noteholders in accordance with Article 14 (or any other notice specified in the applicable Final Terms), redeem all or, if so provided, some of the Notes, as the case may be, on any Option Redemption Date, as the case may be. Any such redemption of Notes shall be at their Optional Redemption Amount, specified in the applicable Final Terms, together with interest accrued to the date fixed for redemption. Any such redemption or exercise must relate to Notes of a nominal amount at least equal to the minimum nominal amount to be redeemed as specified in the applicable Final Terms and no greater than the maximum nominal amount to be redeemed as specified in the applicable Final Terms.
All Notes in respect of which any such notice is given shall be redeemed on the date specified in such notice in accordance with this Article.
In the case of a partial redemption by the Issuer in respect of Materialised Notes, the notice to holders of such Materialised Notes must also indicate the number of Physical Notes to be redeemed or in respect of which such option has been exercised. The Notes must have been selected in such manner as is fair and objective in the circumstances, taking account of prevailing market practices and in accordance with all applicable stock market laws and regulations.
In the case of a partial redemption or partial exercise of an Issuer's option in respect of Dematerialised Notes of any one Series, the redemption may be made, at the option of the Issuer either (a) by reducing the nominal amount of such Dematerialised Notes pro rata the nominal amount
0013112-0000246 PA:15005400.8 38
redeemed, or (b) by redemption in full of some only of the Dematerialised Notes, in which case the selection of Dematerialised Notes to be redeemed in full shall take place in accordance with article R.213-16 of the French Code monétaire et financier, the provisions of the applicable Final Terms and with all applicable stock market laws and regulations.
5.4 Redemption at the option of the Noteholders
If Investor Put is specified in the applicable Final Terms, the Issuer shall, at the request of the holder of any such Note and upon giving not less than 15 and not more than 30 calendar days' irrevocable notice (or any other notice specified in the applicable Final Terms) to the Issuer, redeem such Note on the Optional Redemption Date(s) at its Optional Redemption Amount, specified in the applicable Final Terms, together with interest accrued to the date fixed for redemption. In order to exercise such option, the Noteholder must deposit with a Paying Agent at its specified office by the required deadline a duly completed option exercise notice (the Exercise Notice) in the form obtainable during normal office hours from the Paying Agent or Registration Agent, as the case may be. In the case of Materialised Notes, the relevant Notes (together with all unmatured Receipts and Coupons and unexchanged Talons) must be attached to the Exercise Notice. In the case of Dematerialised Notes, the Noteholder shall transfer, or cause to be transferred, the Dematerialised Notes to be redeemed to the account of the Paying Agent, as specified in the Exercise Notice. No option that has been exercised or, if relevant, no Note that has been deposited or transferred may be withdrawn without the prior written consent of the Issuer.
5.5 Early redemption
(a) Zero Coupon Notes
(i) The Early Redemption Amount payable in respect of any Zero Coupon Note shall, upon redemption of such Note pursuant to Article 5.6 or 5.9 or upon it becoming due and payable as provided in Article 8, be the Amortised Face Amount (calculated as provided below) of such Note.
(ii) Subject to the provisions of sub-paragraph (iii) below, the Amortised Face Amount of any such Zero Coupon Note shall be the scheduled Final Redemption Amount of such Note on the Maturity Date discounted at a rate per annum (expressed as a percentage) equal to the Amortisation Yield (which, if there is no indication of a rate in the applicable Final Terms, shall be such rate as would result in an Amortised Face Amount equal to the issue price of the Notes if discounted back to their issue price on the Issue Date) compounded annually.
(iii) If the Early Redemption Amount payable in respect of each Note upon its redemption pursuant to Article 5.6 or 5.9 or upon it becoming due and payable in accordance with Article 8, is not paid when due, the Early Redemption Amount due and payable in respect of such Note shall be the Amortised Face Amount of such Note, as defined in sub-paragraph (ii) above, except that such sub-paragraph shall have effect as if the reference therein to the date on which such Note becomes due and payable were a reference to the Relevant Date. The calculation of the Amortised Face Amount in accordance with this sub-paragraph shall continue to be made (as well after as before any judgment) until the Relevant Date, unless the Relevant Date falls on or after the Maturity Date, in which case the amount due and payable shall be the scheduled Final Redemption Amount of such Note on the Maturity Date, together with any interest that may accrue in accordance with Article 4.4. Where such calculation is to be made for a period of less than one (1) year, it shall be made on the basis of one of the Day Count Fractions mentioned at Article 4.1 and specified in the applicable Final Terms.
0013112-0000246 PA:15005400.8 39
(b) Other Securities
The Early Redemption Amount due for any other securities, upon its redemption pursuant to Article 5.6 or 5.9 or upon it becoming due and payable pursuant to Article 8, shall be equal to the Final Redemption Amount plus all accrued interests until the date of redemption specified in the applicable Final Terms.
5.6 Redemption for tax reasons
(a) If, at the time of any redemption of principal or payment of interest, the Issuer is obliged to pay additional amounts in accordance with Article 7.2 below, by reason of any change in or amendment to the laws and regulations in France, or any change in the official application or interpretation thereof, made after the Issue Date, unless such relevant obligations to make additional payments can be avoided by reasonable measures taken by the Issuer, to the Issuer may (having given notice to the Noteholders in accordance with Article 14, at the earliest 45 calendar days and at the latest 30 calendar days prior to such payment (which notice shall be irrevocable)) redeem, on any Interest Payment Date or, if specified in the applicable Final Terms, at any time, all but not some only of the Notes at the Early Redemption Amount together with, all interest accrued until the date fixed for redemption, provided that the due date for redemption of which notice hereunder shall be given shall not be earlier than the latest practicable date on which the Issuer could make a payment of principal and/or interest without withholding for French taxes.
(b) If, on the occasion of the next redemption of principal or payment of interest in respect of the Notes, Receipts or Coupons, the Issuer would be prevented by French law from making payment of the full amount then due and payable to the Noteholders, notwithstanding the undertaking to pay additional amounts in accordance with Article 7.2 below, the Issuer shall forthwith give notice of such fact to the Fiscal Agent. The Issuer shall, having given seven calendar days' notice to the Noteholders in accordance with Article 14, redeem all, and not some only, of the Notes then outstanding at their Early Redemption Amount, together with all interest accrued up to the date fixed for redemption, on (i) the latest practicable Interest Payment Date on which the Issuer could make payment of the full amount due and payable on the Notes, Receipts or Coupons, provided that if the notice referred to above would expire after such Interest Payment Date, the date for redemption to the Noteholders shall be the later of (A) the latest practicable date on which the Issuer could make payment of the full amount then due and payable on the Notes, Receipts or Coupons and (B) 14 calendar days after giving notice to the Fiscal Agent or (ii) if so specified in the applicable Final Terms, at any time, provided that the due date for redemption of which notice hereunder is given shall be the latest practicable date on which the Issuer could make payment of the full amount due and payable in respect of the Notes and, if relevant, any Receipts or Coupons or, if that date is passed, as soon as practicable thereafter.
5.7 Purchases
The Issuer may at any time purchase Notes on the stock market or otherwise (including pursuant to a public offer) at any price (provided however that, in the case of Materialised Notes, all unmatured Receipts or Coupons, and all unexchanged Talons relating thereto, are attached to or surrendered with such Materialised Notes), in accordance with applicable laws and regulations.
Notes purchased by or on behalf of the Issuer may, at the option of the Issuer, be retained in accordance with Articles L. 213-1-A and D. 213-1-A of the French Code monétaire et financier, to provide liquidity for the Notes, or cancelled in accordance with Article 5.8.
0013112-0000246 PA:15005400.8 40
5.8 Cancellation
Notes purchased for cancellation in accordance with Article 5.7 above shall be cancelled, in the case of Dematerialised Notes, by transfer to an account pursuant to the rules and procedures of Euroclear France, and in the case of Materialised Notes, by delivery to the Fiscal Agent of the relevant Temporary Global Certificate or the Physical Notes in question, together with all unmatured Receipts and Coupons and all unexchanged Talons attached to such Notes, if relevant, and in each case, if so transferred and surrendered, all such Notes shall, together with all Notes redeemed by the Issuer, be cancelled forthwith (together with, in the case of Dematerialised Notes, all rights in respect of payment of interest and other amounts in respect of such Dematerialised Notes and, in the case of Materialised Notes, all unmatured Receipts and Coupons and all unexchanged Talons attached thereto or surrendered therewith). Any Notes so cancelled or, as the case may be, transferred or surrendered for cancellation may not be re-issued or re-sold and the obligations of the Issuer in respect of any such Notes shall be discharged.
5.9 Illegality
If, by virtue of the introduction of any new law or regulation in France, any change of law or other mandatory provision or any change in the interpretation thereof by any court or administrative authority, which takes effect after the Issue Date, it becomes unlawful for the Issuer to perform or comply with its obligations under the Notes, the Issuer shall have the right, having given notice to the Noteholders in accordance with Article 14, at the earliest 45 calendar days and at the latest 30 calendar days prior to such payment (which notice shall be irrevocable), redeem all and not some only of the Notes at the Early Redemption Amount together with all interest accrued up to the date fixed for redemption.
6. PAYMENTS AND TALONS
6.1 Dematerialised Notes
Any Payment of principal or interest in respect of Dematerialised Notes shall be made (a) in the case of Dematerialised Notes in bearer form or in administered registered form (au nominatif administré), by transfer to an account denominated in the Specified Currency held with the Account Holders for the benefit of the Noteholders, and (b) in the case of Dematerialised Notes in pure registered form (au nominatif pur), by transfer to an account denominated in the Specified Currency, held with a Bank (as defined below) specified by the relevant Noteholder. The Issuer's payment obligations shall be discharged upon such payments being duly made to such Account Holders or such Bank.
6.2 Physical Notes
(a) Method of payment
Subject as provided below, any payment in a Specified Currency shall be made by credit or transfer to an account denominated in the Specified Currency or to which the Specified Currency may be credited or transferred held by the beneficiary or, at the option of the beneficiary, by cheque denominated in the Specified Currency drawn on a bank located in the principal financial centre of the country of the Specified Currency (which shall be a country within the Euro-zone).
(b) Presentation and surrender of Physical Notes, Receipts and Coupons
Any payment of principal in respect of Physical Notes, shall (subject as provided below) be made in the manner described in paragraph (a) above solely upon presentation and surrender (or, in the case of a partial payment of an outstanding amount, upon endorsement) of the relevant Notes and any payment of interest in respect of Physical Notes shall (subject as
0013112-0000246 PA:15005400.8 41
provided below) be made in the manner described above solely upon presentation and surrender (or, in the case of a partial payment of an outstanding amount, upon endorsement) of the relevant Coupons, in each case at the specified office of any Paying Agent located outside the United States of America (such term meaning for the purposes hereof the United States of America (including the States and District of Columbia, their territories, possessions and other places under its jurisdiction)).
Any instalment of principal in respect of Physical Notes, other than the last instalment, shall, where relevant, (subject as provided below) be made in the manner described in paragraph (a) above upon presentation and surrender (or, in the case of a partial payment of an outstanding amount, upon endorsement) of the related Receipt in accordance with the preceding paragraph. Payment of the last instalment shall be made in the manner described in paragraph (a) above solely upon presentation and surrender (or, in the case of a partial payment of an outstanding amount, upon endorsement) of the related Note, in accordance with the preceding paragraph. Each Receipt must be presented for payment of the relevant Instalment together with the related Physical Note. Any Receipt presented for payment without the related Physical Note shall render the Issuer's obligations null and void.
Unmatured Receipts relating to Physical Notes (whether or not attached thereto) shall become void and no payment shall be made in respect thereof on the date on which such Physical Notes mature.
Fixed Rate Notes represented by Physical Notes must be surrendered for payment together with all unmatured Coupons appertaining thereto (such expression including, for the purposes hereof, Coupons to be issued in exchange for matured Talons), failing which the amount of any missing unmatured Coupon (or, in the case of a partial payment, that proportion of the amount of such missing unmatured Coupon that the sum of principal so paid bears to the total principal due) shall be deducted from the amount due. Any amount of principal so deducted shall be paid in the manner described above against surrender of the missing Coupon before the 1st January of the fourth year following the due date for payment of such amount, and not under any circumstances thereafter.
Where a Fixed Rate Note represented by a Physical Note becomes due prior to its Maturity Date, unmatured Talons appertaining thereto become void and no further Coupons shall be delivered.
Where a Floating Rate Note represented by a Physical Note becomes due prior to its Maturity Date, unmatured Coupons and Talons (if any) appertaining thereto (whether or not attached) become void and no payment shall be made or, if relevant, no further Coupons shall be delivered in respect thereof.
If a Physical Note is redeemed on a date that is not an Interest Payment Date, the interest (if any) accrued on such Note since the previous Interest Payment Date (included) or, as the case may be, the Interest Period Commencement Date (included) shall be paid only against presentation and surrender (if relevant) of the related Physical Note.
6.3 Payments subject to fiscal laws
All payments are subject to any applicable fiscal or other laws, regulations and directives, but without prejudice to the provisions of Article 7. No commission or expenses shall be charged to the Noteholders or Couponholders in respect of such payments.
0013112-0000246 PA:15005400.8 42
6.4 Appointment of Agents
The Fiscal Agent, the Paying Agents, the Calculation Agent and the Registration Agent initially appointed by the Issuer and their respective specified offices are listed at the end of this Base Prospectus for the Programme. The Fiscal Agent, the Paying Agents and the Registration Agent act solely as agents, and the Calculation Agents solely as independent experts, of the Issuer and under no circumstances do any of them assume any obligation or relationship of agency for or with any Noteholder or Couponholder. The Issuer reserves the right at any time to vary or terminate the appointment of the Fiscal Agent, any Paying Agent, Calculation Agent or Registration Agent and to appoint any other Fiscal Agent, Paying Agent(s), Calculation Agent(s) or Registration Agent(s) or any additional Paying Agent(s), Calculation Agent(s) or Registration Agent(s), provided that the Issuer shall at all times maintain (a) a Fiscal Agent, (b) one or more Calculation Agents, where the Terms so require, (c) a Paying Agent with specified offices in at least two major European cities (providing fiscal agency services in respect of the Notes in France so long as any Notes are admitted to trading on Euronext Paris and applicable market regulations so require), (d) in the case of Materialised Notes, a Paying Agent with an office in a Member State of the EU that is not obliged to withhold or deduct tax pursuant to the Council Directive 2003/48/CE or any other EU directive implementing the conclusions of the ECOFIN Council resolutions of 26 and 27 November 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to such directive (which Paying Agent may be one of those referred to in (c) above), (e) in the case of Dematerialised Notes in pure registered form (au nominatif pur), a Registration Agent and (f) any other agent that may be required under the rules of any regulated market on which the Notes may be admitted to trading.
Notice of any such change or of any change of any specified office shall promptly be given to the Noteholders in accordance with Article 14.
6.5 Talons
On or after the Interest Payment Date for the final Coupon forming part of a Coupon sheet issued in respect of any Materialised Note, the Talon forming part of such Coupon sheet may be surrendered at the specified office of the Fiscal Agent in exchange for a further Coupon sheet (and if necessary another Talon for a further Coupon sheet) (but excluding any Coupons that may have become void pursuant to Article 9).
6.6 Business Days for payment
If any date for payment in respect of any Note or Coupon is not a business day (as defined below), the Noteholder or Couponholder shall not be entitled to payment until the next following business day, nor to any other sum in respect of such postponed payment. In this paragraph, "business day" means a day (other than a Saturday or Sunday) (a) (i) in the case of Dematerialised Notes, on which Euroclear France is operating, or (ii) in the case of Materialised Notes, on which banks and foreign exchange markets are open for business in the relevant place of presentation of the note for payment, and (b) on which banks and foreign exchange markets are open for business in the countries specified as "Financial Centres" in the applicable Final Terms and (c) which is a TARGET Business Day.
6.7 Bank
For the purposes of this Article 6, Bank means a bank established in a city in which banks have access to the TARGET system.
0013112-0000246 PA:15005400.8 43
7. TAXATION
7.1 Withholding
All payments of principal, interest or other amounts by or on behalf of the Issuer in respect of the Notes, Receipts and Coupons shall be made free and clear of, and without withholding or deduction for, any taxes or duties of whatever nature imposed, levied or collected by or on behalf of France or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law.
7.2 Additional Amounts
If French law should require that payments of principal or interest in respect of any Note, Receipt or Coupon be subject to withholding or deduction with respect to any taxes or duties whatsoever, present or future, the Issuer will, to the fullest extent then permitted by law, pay such additional amounts as may be necessary in order that the holders of Notes, Receipts and Coupons receive the full amount that would have been payable in the absence of such withholding or deduction; except that no such additional amounts shall be payable with respect to any Note, Receipt or Coupon in the following cases:
(a) Other connection: the holder of Notes, Receipts or Coupons, or any third party acting on his behalf, is liable to such tax or duty in France by reason of having some connection with France other than the mere holding of the Notes, Receipts or Coupons; or
(b) More than 30 calendar days have passed since the Relevant Date: in the case of Materialised Notes, more than 30 calendar days have passed since the Relevant Date, except where the holder of Notes, Receipts or Coupons would have been entitled to an additional amount on presentation of the same for payment on the last day of such 30 calendar days period, in that case, the Issuer will have to increase its payments to an amount equal to what it would have to pay if the Notes, Receipts or Coupons would have been presented the last day of such 30 calendar days period; or
(c) European Directive on the taxation of savings income: when such withholding or deduction is imposed on a payment made in accordance with the Council directive 2003/48/EC (as amended by the Council directive 2014/48/EU) or any other European Union directive implementing the conclusions of the ECOFIN Council resolutions of 26 and 27 November 2000 on the taxation of savings income or any further ECOFIN Council resolution on the taxation of the savings income, or any law implementing or complying with, or introduced in order to conform to, such directive; or
(d) Payment by another Paying Agent: in the case of Materialised Notes presented for payment, where such withholding or deduction is made by or on behalf of a holder who could have avoided such withholding or deduction by presenting the relevant Note, Receipt or Coupon to a Paying Agent in another Member State of the European Union.
References in these Terms to (i) "principal" shall be deemed to include any premium payable in respect of the Notes, Final Redemption Amounts, Instalment Amounts, Early Redemption Amounts, Optional Redemption Amounts and all other amounts in the nature of principal payable pursuant to Article 5 as completed by the Final Terms, (ii) "interest" shall be deemed to include all Coupon Amounts and all other amounts payable pursuant to Article 4 as completed by the Final Terms and (iii) "principal" and/or "interest" shall be deemed to include any additional amounts that may be payable under this Article.
0013112-0000246 PA:15005400.8 44
7.3 Provision of Information
Each Noteholder shall be responsible to provide on time to the Paying Agent any information which may be required by the latter in order to comply with the identification and reporting obligations imposed to it by the Council Directive 2003/48/EC on taxation of savings income (as amended by the Council Directive 2014/48/EC) or any other EU directive which implements the conclusions of the ECOFIN Council resolutions of 26 and 27 November 2000 on the taxation of savings income or any further ECOFIN Council resolution on the taxation of the savings income, or any law implementing or complying with, or introduced in order to conform to, such directive.
8. EVENTS OF DEFAULT
If any of the following events occurs (each an Event of Default), (i) the Representative (as defined in Article 10) on its own initiative or upon request of any holder of Notes may, upon simple written notice addressed on behalf of the Masse (as defined in Article 10) to the Fiscal Agent with copy addressed to the Issuer, before the considered default has been cured, make the redemption immediately and automatically due and payable of all the Notes of the considered Series (and not a part only); or (ii) if there is no Representative, any holder of Notes may, on simple written notice addressed to the Fiscal Agent with copy addressed to the Issuer, before the considered default has been cured, make the redemption immediately and automatically due and payable of the Notes held by the author of the notice, immediately and automatically due and payable, at their Early Redemption Amount with interest accrued to the date of repayment, without the necessity for any prior formal demand:
(a) if the Issuer defaults in any payment at its due date of any amount in principal or interest payment due under any Notes, Receipt or Coupon (including payment of any gross up provided by Article 7.2 "Taxation" above) unless it has been remedied to that default of payment within fifteen (15) calendar days following the due date of this payment;
(b) if the Issuer fails to perform any other provision of this terms and conditions of the Notes if it has not been remedied within thirty (30) calendar days following on the receipt by the Issuer of a written notice of this failure by registered letter with an acknowledgement of receipt;
(c) if the Issuer is not able to face its mandatory expenses as specified in Articles L.2321-1 et seq. of the General Local Authorities Code or make a written statement recognising such inability;
(d) failure to pay on the maturity date, or as the case may be, upon the expiration of any applicable grace period, a sum exceeding ten million euros (Euro 10,000,000) (or its equivalent in any other currency) in relation with any amount due in respect with any actual or future indebtedness of the Issuer resulting from a bank loan or notes, other than the Notes, Receipts and Coupons, or the enforcement of a real security related to one of the aforementioned indebtednesses, for an amount exceeding ten million euros (Euro 10,000,000) (or its equivalent in any other currency) or the failure to pay a sum exceeding ten million euros (Euro 10,000,000) in relation with any sum due upon a guarantee granted by the Issuer in relation to one or more bank loans or notes entered into or issued by a third party;
(e) if the legal status or regime of the Issuer is amended, including as a result of a legislative or regulation amending, as far as in each case, such modification reduces the rights of the Noteholders against the Issuer or makes more difficult or more expensive actions of the Noteholders against the Issuer, provided that the territorial reform, as contemplated by the law project on the Republic’s new territorial organisation, in its version adopted by the Senat
0013112-0000246 PA:15005400.8 45
in the second reading on 2 June 2015, does not constitute per sae an event likely to be considered as an Event of Default.
Provided as well, that any of the events specified in paragraphs (a), (b) or (d) above, will not constitue an Event of Default, if the Issuer notifies to the Fiscal Agent before the expiration of the considered deadline (if such deadline is set out) that a laps of time is needed in order to adopt a resolution authorising the unforeseen or additional budgetary expenses payment. The Issuer shall indicate to the Fiscal Agent the date on which such resolution will become enforceable. The Fiscal Agent shall transfer immediately to the Noteholders any notification it has received from the Issuer in respect with this paragraph and in compliance with the provisions of Article 14 (Notices). In case the additional budgetary resolution has not been adopted and has not become enforceable upon the expiration of a four (4) months period after the notification made to the Noteholders, the events set out in paragraphs (a), (b) and (d) above and not cured at the end of the four (4) month delay will constitute an Event of Default.
9. PRESCRIPTION
All claims against the Issuer in relation to the Notes, Receipts and Coupons (except for Talons) shall lapse after four years from the 1st of January of the year following their respective due dates (pursuant to the Law n°68-1250 of 31 December 1968).
10. REPRESENTATION OF NOTEHOLDERS
In respect of the representation of Noteholders, the following paragraphs shall apply:
(a) If the applicable Final Terms specify "Full Masse", the Noteholders shall, in respect of all Tranches of a single Series, be grouped together automatically for the defence of their common interests in a masse (the Masse) and the provisions of the French Code de commerce, relating to the Masse shall apply.
The names and addresses of the initial Representative of the Masse and its alternate representative shall be specified in the applicable Final Terms. The Representative appointed in respect of the first Tranche of any Series of Notes shall be the Representative of the single Masse of all Tranches of such Series.
The Representative shall receive the remuneration in connection with its functions and duties, if such remuneration is provided, at the date(s) specified in the Final Terms, and to the extend specified therein. The Representative’s expenses and disboursements may as well be limited by the Final Terms.
In case of death, resignation or dismissal of the Representative, he shall be replaced by the alternate Representative. In case of death, resignation or dismissal of the alternate Representative, he shall be replaced by another alternate representative appointed by the general meeting of the Noteholders (the General Meeting).
(b) If the applicable Final Terms specify "Contractual Masse", the Noteholders shall be automatically grouped, in respect of all Tranches of a single Series, for the defence of their common interests in a Masse. The Masse shall be governed by the provisions of the Code de commerce, except articles L. 228-48, L. 228-59, L. 228-71, R. 228-63, R. 228-67 and R. 228-69, and subject to the following provisions:
0013112-0000246 PA:15005400.8 46
(i) Legal personality
The Masse will be a separate legal entity, acting in part through a representative (the Representative) and in part through a Noteholders' general meeting (the Noteholders' General Meeting).
The Masse alone, to the exclusion of all individual Noteholders, shall exercise the common rights, actions and benefits which may accrue now or in the future under or with respect to the Notes.
(ii) Representative
The person acting as Representative may be of any nationality. However, the following persons may not be chosen as Representative:
(A) the Issuer, the members of its Municipality Council (Conseil communautaire), its employees and their ascendants, descendants and spouses; or
(B) entities guaranteeing all or part of the obligations of the Issuer, their respective general managers, managing directors, members of their Board of Directors, Executive Board or Supervisory Board, their statutory auditors, employees or any of their ascendants, descendants and spouses respectively; or
(C) any persons prohibited from exercising the profession of banker, or who are disqualified from acting as director, administrator or manager of a company in whatever capacity.
The names and addresses of the incumbent Representative of the Masse and his alternate shall be set forth in the applicable Final Terms. The Representative appointed for the first Tranche of a Series of Notes shall be the sole Representative of the Masse for all Tranches of such Series.
The Representative shall receive remuneration for the performance of his functions and duties, if so provided, on such date or dates as may be specified in the applicable Final Terms to the extend specified therein. The Representative’s expenses and disboursements may as well be limited by the Final Terms.
In the event of death, resignation or dismissal of a Representative, the alternate Representative shall replace him. In the event of death, resignation or dismissal of the alternate Representative, the Noteholders' General Meeting shall appoint another alternate Representative to replace him.
All interested parties may at any time obtain the names and addresses of the initial Representative and his alternate at the principal office of the Issuer and the specified office of any of the Paying Agents.
(iii) Powers of the Representative
The Representative shall (in the absence of any decision to the contrary of the Noteholders' General Meeting), have the power to take any management action necessary for the defence of the common interests of the Noteholders.
0013112-0000246 PA:15005400.8 47
All legal proceedings brought against or by the Noteholders must be brought by or against the Representative.
The Representative may not interfere in the management of the Issuer's affairs.
(iv) General Meeting
Noteholders' General Meetings may be held at any time, on convocation either by the Issuer or the Representative. One or more Noteholders, holding together at least one-thirtieth of the nominal amount of the Notes outstanding may request the Issuer or the Representative to convene a General Meeting. If such General Meeting has not been convened within two months from such demand, such Noteholders may instruct one of themselves to petition the competent courts of Paris to appoint an agent to convene the meeting.
Notice of the date, hour, place and agenda of the General Meeting shall be published as provided in Article 14.
Each Noteholder has the right to participate in General Meetings in person, by proxy or by postal ballot. Each Note carries one vote or, in the case of Notes issued with several Specified Denominations, one vote in respect of each multiple of the smallest Specified Denomination comprised in the principal amount of the Specified Denomination of such Note.
(v) Powers of the General Meeting
The General Meeting has power to consider proposals for the dismissal and replacement of the Representative and his alternate. It may also vote on any other matter concerning the common rights, actions and benefits attached to or accruing with respect to the Notes, now or in the future, including authorising the Representative to act at law whether as plaintiff or defendant.
The General Meeting may also consider any proposal relating to modification of the Terms, including any proposal for arbitration or settlement, relating to rights that are in dispute or the subject of judicial decision; the General Meeting may not, however, increase the obligations of the Noteholders or breach in any manner the principle of equality between Noteholders.
General Meetings may only deliberate validly on first convocation if the Noteholders present or represented hold at least one fifth of the nominal amount of Notes then outstanding. On second convocation no quorum is required. Decisions at General Meetings shall be valid if taken by a majority of two thirds of the votes cast by the Noteholders present or represented at such meeting.
Pursuant article R. 228-71 of the Code de commerce, the right of each Noteholder to participate in General Meetings will be evidenced, by the entities, of the Notes in the securities account of the Relevant Holder on the second business day prior to the relevant General Meeting as of 0:00, Paris time.
Resolutions adopted by General Meetings shall be published in accordance with the provisions of Article 14.
0013112-0000246 PA:15005400.8 48
(vi) Information for Noteholders
Each Noteholder or its representative shall have the right, throughout the fifteen calendar day period preceding the holding of each General Meeting, to consult or make copies of the text of the resolutions to be proposed and of the reports to be presented at the General Meeting. Such documents will be available for inspection at the principal office of the Issuer, at the specified offices of the Paying Agents and at any other place specified in the notice of such meeting.
(vii) Expenses
The Issuer shall pay, upon presentation of duly documented evidence, and subject to the limitations set out in the Final Terms, if any, all expenses incurred in connection with the conduct of the affairs of the Masse, including all expenses relating to notices and the holding of General Meetings and, more generally, all administrative expenses voted by the Noteholders' General Meeting, provided however that no expenses may be imputed against any interest payable on the Notes.
(viii) Single Masse
The holders of Notes of the same Series, (including Noteholders of any other Tranche consolidated in accordance with Article 13) and the holders of the Notes of any series that have been consolidated with another Series in accordance with Article 1, shall be grouped together for the defence of their common interests into a single Masse. The Representative appointed for the first Tranche of a Series of Notes shall be the Representative of the single Masse of the Series.
For the avoidance of doubt in this Article 10, the term "outstanding" shall not include the Notes repurchased by the Issuer, pursuant to Article L. 213-1 A of the French Code de commerce that are held by it and not cancelled.
11. AMENDMENTS
These Terms may be amended or modified by a supplement to the Base Prospectus.
The parties to the Fiscal Agency Agreement may, without the consent of the Noteholders or Couponholders, amend or waive any provisions thereof with a view to remedying any ambiguity or rectifying, correcting or completing any defective provision of the Fiscal Agency Agreement, or in any other manner that the parties to the Fiscal Agency Agreement may consider necessary or desirable but only to the extent that, in the reasonable opinion of the parties, the interests of the Noteholders or Couponholders are not prejudiced.
12. REPLACEMENT OF PHYSICAL NOTES, COUPONS, RECEIPTS AND TALONS
In the case of Materialised Notes, any Physical Note, Receipt, Coupon or Talon that has been lost, stolen, defaced or destroyed in whole or in part, may be replaced, in compliance with applicable laws and stock market rules and regulations at the offices of the Fiscal Agent or any other Paying Agent, if any, appointed by the Issuer for such purpose and whose appointment shall be notified to the Noteholders. Such replacement shall be made against payment by the claimant of any fees and expenses incurred in connection therewith and subject to such terms as to proof, security or indemnity (which may provide, inter alia, that in the event that the Physical Note, Receipt, Coupon or Talon allegedly lost, stolen or destroyed is subsequently presented for payment or, as the case may be, for exchange for further Coupons, the Issuer shall be paid, at its request, the amount payable by the Issuer in respect of such Physical Notes, Coupons or further Coupons). Partially destroyed or
0013112-0000246 PA:15005400.8 49
defaced Materialised Notes, Receipts, Coupons or Talons must be surrendered before replacements will be issued.
13. CONSOLIDATED ISSUES
The Issuer shall be entitled, without the consent of the holders of any Notes, Receipts or Coupons, to create and issue further notes to be consolidated with the Notes to form a single Series, provided that such Notes and the further notes confer on their holders rights that are identical in all respects (or identical in all respects other than the issue date, issue price and the first interest payment) and that the terms of such Notes provide for consolidation and references to "Notes" in these Terms shall be interpreted accordingly.
14. NOTICES
14.1 Notices addressed by the Issuer to the holders of Dematerialised Notes in registered form shall be valid either (a) if they are posted to their respective addresses, in which case they shall be deemed to have been delivered on the fourth Business Day after posting or (b) at the option of the Issuer, if they are published on the website of any relevant regulatory authority, in one of the leading economic and financial daily newspapers with general circulation in Europe (which is expected to be the Financial Times). So long as the Notes are admitted to trading on any regulated market and the applicable rules of such market so require, notices shall not be deemed to be valid unless published in an economic and financial daily newspaper with general circulation in the city(ies) in which the Notes are admitted to trading, which in the case of Euronext Paris is expected to be Les Echos and in any other manner required, as the case may be, under the applicable rules of such market.
14.2 Notices addressed to Noteholders of Materialised Notes and Dematerialised Notes in bearer form shall be valid if published in a leading economic and financial daily newspaper with general circulation in Europe (which is expected to be the Financial Times) and, so long as the Notes are admitted to trading on any regulated market and the applicable rules of such market so require, notices shall also be published in an economic and financial daily newspaper with general circulation in the city(ies) in which the Notes are admitted to trading, which in the case of Euronext Paris is expected to be Les Echos and in any other manner required, as the case may be, under the applicable rules of such market.
14.3 If any such publication is not practicable, the notice shall be validly given if published in a leading economic and financial newspaper with general circulation in Europe, provided however that, so long as the Notes are admitted to trading on any regulated market, notices must be published in any other manner required, as the case may be, under the applicable rules of such regulated market. Noteholders shall be deemed to have had notice of the contents of any notice on the date of publication, or if the notice was published more than once or on different dates, on the date of the first publication as described above. Coupon holders shall be deemed, in all circumstances, to have had notice of the contents of any notice addressed to Noteholders of Materialised Notes in accordance with this Article.
14.4 Notices addressed to holders of Dematerialised Notes (whether in registered or bearer form) in accordance with these Terms may be delivered to Euroclear France, Euroclear, Clearstream, Luxembourg or any other clearing system through which the Notes are then cleared, instead of posting or publishing the notice as provided in Articles 14.1, 14.2 and 14.3 above, provided however that so long as the Notes are admitted to trading on any regulated market and the applicable rules of such market so require, notices shall also be published in an economic and financial daily newspaper with general circulation in the city(ies) in which the Notes are admitted to trading, which in the case of Euronext Paris is expected to be Les Echos and in any other manner required, as the case may be, under the applicable rules of such market.
0013112-0000246 PA:15005400.8 50
15. GOVERNING LAW, LANGUAGE AND JURISDICTION
15.1 Droit applicable
The Notes, Receipts, Coupons and Talons are governed by and shall be interpreted in accordance with French law.
15.2 Language
This Base Prospectus has been drafted in the French language. A free translation in English may be available, however only the French version in respect of which the AMF has granted visa may be relied upon as the authentic and binding version.
15.3 Jurisdiction
Any dispute in relation to the Notes, Receipts, Coupons or Talons shall be submitted to the courts within the jurisdiction of the Paris Court of Appeal (subject to mandatory provisions related to territorial jurisdiction of French courts). No private law enforcement measures may be instigated and no seizure or attachment proceedings may be brought against the assets or property of the Issuer as a legal entity governed by public law.
0013112-0000246 PA:15005400.8 51
TEMPORARY GLOBAL CERTIFICATES IN RESPECT OF MATERIALISED NOTES
1. TEMPORARY GLOBAL CERTIFICATES
A Temporary Global Certificate in respect of Materialised Notes, without interest coupons, will initially be issued (a Temporary Global Certificate) for each Tranche of Materialised Notes, and shall be deposited at the latest by the issue date of such Tranche with a common depositary (the Common Depositary) for Euroclear Bank S.A./N.V., as operator of the Euroclear system (Euroclear) and Clearstream banking, société anonyme (Clearstream, Luxembourg). Following deposit of such Temporary Global Certificate with a Common Depositary, Euroclear or Clearstream, Luxembourg shall credit each subscriber with an amount in principal of Notes equal to the nominal amount so subscribed and paid for.
The Common Depositary may also credit the accounts of subscribers of a nominal amount of Notes (if so specified in the applicable Final Terms) in other clearing systems through accounts held directly or indirectly by such other clearing systems with Euroclear and Clearstream, Luxembourg. Conversely, a nominal amount of Notes initially deposited with any other clearing system may, in the same manner, be credited to the accounts of subscribers held with Euroclear, Clearstream, Luxembourg or other clearing systems.
2. EXCHANGE
Each Temporary Global Certificate in respect of Materialised Notes shall be exchangeable, free of charge to the bearer, at the earliest on the Exchange Date (as defined below):
(a) if the applicable Final Terms specify that the Temporary Global Certificate is issued in compliance with the C Rules or in a transaction to which the TEFRA rules do not apply (see the section "General Description of the Programme – Selling Restrictions"), in whole but not in part, for Physical Notes; and
(b) in all other cases, in whole but not in part, after certification, to the extent required under section § 1.163-5(c)(2)(i)(D)(4)(ii) of the US Treasury regulations, that the Notes are not held by US persons, for Physical Notes.
3. REMISE DE TITRES PHYSIQUES
On or after the Exchange Date, the holder of a Temporary Global Certificate may surrender such Temporary Global Certificate to or to the order of the Fiscal Agent. The Issuer shall, in exchange for any Temporary Global Certificate, deliver or procure the delivery of an equal aggregate nominal amount of duly signed and authenticated Physical Notes. For the purposes of this Base Prospectus, Physical Notes means, in respect of a Temporary Global Certificate, the Physical Notes for which the Temporary Global Certificate may be exchanged (having, if appropriate, attached to them all Coupons and Receipts in respect of interest or Instalment Amounts that have not already been paid on the Temporary Global Certificate and a Talon). Physical Notes will be security printed in accordance with any applicable legal and stock exchange requirements.
Exchange Date means, in relation to a Temporary Global Certificate, the day falling no earlier than 40 calendar days after its issue date, provided however that, in the case of a further issue of Materialised Notes, to be consolidated with such previously mentioned Materialised Notes, issued prior to such day in accordance with Article 13, the Exchange Date may, at the option of the Issuer, be postponed until a date falling at least 40 calendar days after the issue date of such further Materialised Notes.
0013112-0000246 PA:15005400.8 52
In the case of Materialised Notes with a minimum maturity of more than 365 calendar days (to which the TEFRA C Rules do not apply), the Temporary Global Certificate must include the following legend:
ANY UNITED STATES PERSON (AS DEFINED IN THE INTERNAL REVENUE CODE OF 1986) WHO HOLDS THIS NOTE WILL BE SUBJECT TO RESTRICTIONS UNDER UNITED STATES FEDERAL INCOME TAX LAWS, INCLUDING THOSE PROVIDED UNDER SECTIONS 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
0013112-0000246 PA:15005400.8 53
DESCRIPTION OF THE ISSUER
1. MARSEILLE PROVENCE METROPOLE: ACTION AND INNOVATION
1.1 Eighteen communes, diversity and collective achievements
Established on 7 July 2000, the Communauté Urbaine Marseille Provence Métropole (MPM) is the culmination of almost fifteen years of inter-communal cooperation.
From the Mediterranean coastline to the Chaîne de l’Etoile, Marseille Provence Métropole brings together 18 communes with diverse challenges and geography. This diversity forms its core identity and wealth.
MPM galvanises its resources towards developing transport and communications networks fit for today’s requirements, providing salubrious accommodation through social housing construction grants and also urban planning and development. From treatment and management of waste water, habours to logistics and waste management, the MPM’s perspective is to meet the needs of the community.
The Communauté Urbaine Marseille Provence Métropole continues to undertake new projects and pursues innovative and active plans to achieve its goals.
For 2015, MPM has allocated 345 million euros towards investment in modernising the Community’s roads network and extending the high delivered service of subway, tramway and bus transport networks. Particular attention will also be paid to the construction of retention basins to improve the quality of bathing water and to develop the costal planning.
From 1st January 2016 onwards, MPM will cease to exist and become an integral part of Aix- Marseille-Provence, the new metropolis created by law n° 2014-58 of 27 January 2014 on the modernisation of local authority public action and affirmation of metropolis (the so-called "MAPTAM" law). It will become a member of an even larger community, covering a wide area with expanding community ambitions (cf. §2.4).
The MAPTAM law introduces significant changes to the way local authorities are run and redefines the role of metropolises in this transition. The Aix-Marseille-Provence metropolis will be a new inter-communal cooperation public establishment (EPCI) with autonomous taxation powers formed by the regrouping of all communes that belong to the Communauté Urbaine Marseille Provence Métropole, the Pays d'Aix-en-Provence agglomeration community, the Salon Etang de Berre Durance agglomeration community, the Pays d'Aubagne et de l'Etoile agglomeration community, the Ouest Provence new agglomeration syndicate and the Pays de Martigues agglomeration community.
From the date of its creation, the new Aix-Marseille-Provence metropolis will be endowed with all of the powers that had previously been transferred, by their member communes, to the merged EPCI. Furthermore, where such powers have not already been transferred to such EPCI, metropolises shall automatically be invested with powers in economic, social and cultural planning and development area, development of the metropolitan area, local housing policy and town planning, the management of community interest services and the protection and enhancement of the environment and living standards policy.
The Aix-Marseille-Provence metropolis, whose head office will be based in Marseille, will be governed by a Metropolis Council, chaired by the Metropolis Council President. The metropolis will be divided into areas, each with its own local council. These local councils may be granted delegations of authority by the metropolis on certain matters.
0013112-0000246 PA:15005400.8 54
Pursuant to the combined provisions of articles L. 5218-1, L. 5217-4 and L. 5211-41 of the CGCT, the replacement of MPM by the Métropole d'Aix-Marseille-Provence will involve the transfer of all property, rights and obligations of MPM to the Metropolis, and also substitution of the new entity in all of MPM’s acts and deliberations.
Source: www.aixmarseilleprovencemetropole.fr Boundaries of the Métropole Aix-Marseille-Provence 93 Communes 3173 km2 1,833,090 inhabitants 735,500 jobs
Ahead of its formation, the Aix-Marseille-Provence metropolis is defining its objectives and putting forward a policy of unification through the realisation of seven programmes. Four main guiding principles underpin these ambitious projects planned for the beginnings of the new metropolis.
1.2 Aix-Marseille-Provence: a promising arbitrage between development and sustainability
The major and imminent challenges of the future metropolis centre around the problematic issues of transport and mobility as a whole (a) and the harbour and logistics systems (b). These guiding principles dovetail with its perspective of sustainability through the redefinition of the "city-nature" coupling (c) and energy transition (d).
(a) The mobility and accessibility programme
The purpose of the "mobility and accessibility" programme is to lay the ground work for the future metropolis to tackle the problem of mobility by promoting new alternatives to "nothing but automobiles". The idea is both to form a common vision of the problem of transport in the metropolis and its various solutions, to bring to fruition the already existing answers, but above all, to unite all stakeholders in moving towards a transport system for the future development of the metropolis.
This programme brings together several issues linked to urban transport, such as access to mobility and infrastructure, their logistics and complementarity. The challenge of the new
0013112-0000246 PA:15005400.8 55
dynamic of the metropolitan mobility is to align itself with the promotion of sustainable development respectful of the urban and natural environment.
According to the survey "Metropolis on the march: programmes of the Aix-Marseille- Provence project" carried out by the Inter-ministerial mission for the Aix-Marseille- Provence metropolis project, the mobility of Aix-Marseille area inhabitants is characterised by reliance on automobile transport at a level of almost 50% above the national average. Problems associated with this include consequences for public health, overconsumption of energy and road safety.
Car journeys in the zone have increased by 20% in the last 10 years, due to the decline of the main centres of employment located in the largest cities such as Aix, Marseille, Aubagne and Salon-de-Provence. The new transport system should provide a solution to these various difficulties and guarantee an unified, connected and fluid future metropolis.
To answer these complex issues, the "mobility and accessibility" programme is centred around three main pillars. First of all, the existing infrastructure service level has to be adapted and coordinated. Connectivity within the future metropolis urban area will be boosted by investment to address infrastructure that is lacking or inadequate. In parallel, particular attention will be paid to the efficient organisation of public transport and developing new transport alternatives such as car-pooling, car-sharing, inter-company platforms and initiatives.
Rapid highway design will be reviewed to further the development of public transport, and other alternatives to the private automobile as a method of travel such aselectric powered mobility.
Attention will also be focused on reorganising the three most congested highway routes: Aix-Marseille, Marseille-Vitrolles and Aubagne-Marseille which are expected to witness an increase of traffic between 15% and 30% by 2040. These three corridors will form the central interconnection network of the new metropolis, to which additional branches will be connected.
At the same time, the strategic layout of the Saint-Charles railway station in Marseille will be remodelled: an important part of this will be the creation of a second underground station with four new platforms for the future Mediterranean High Speed Railway Line. The new station will be able to accommodate almost twice the number of passengers per year by 2025-2030 compared to the current level. Thanks to this project, east-west communications from the metropolis will get a tenfold increase and journey times will be reduced by half.
The Aix-Marseille-Provence Metropolitan Transport White Book,published in 2014 by the Inter-ministerial mission for the Aix-Marseille-Provence metropolis project, sets out ways of accessing funding in addition to the global operating endowments provided to EPCI.Thus, the fact that EPCI are being integrated into the metropolis will have a positive impact on the authority's contribution to the national inter-communal and communal resources equalisation fund (Fonds National de Péréquation des Ressources Intercommunales et Communales or FPIC). This phenomenon, backed by an unchanging tax integration coefficient, will contribute towards generating a positive balance of around EUR20 million per year. Efficient and organised transport services to activity zones will directly benefit companies and the economic development of the metropolis. A second complementary measure referred to in the White Book will be an increase in the Transport Payment maximum rate – reaching 1.8% for the future metropolis – which will provide additional revenue of around thirty five million euros by 2020.
0013112-0000246 PA:15005400.8 56
Consistent with the metropolis’ new imperative of reducing reliance on automobiles to the benefit of effective public transport, the reallocation of resources from parking fines will generate a surplus which will be available for investment in mobility.
Benefiting from a consistent level of tourism, the metropolis also plans to use the funds generated by the introduction of a tourist tax. The income derived and reallocated to the new metropolitan transport structure should reach nineteen million euros per year.
Above and beyond directly mobilising the necessary funds for investment in mobility in the metropolis, methods of delegation such as concession agreements or partnership contracts remain an effective way of contributing to the realisation of numerous targeted projects forming part of the "mobility and accessibility" programme.
(b) Harbours and logistics systems programme
In addition to personal mobility, it is also the circulation of goods – based upon sustainability – that the metropolis will have to manage.
From significant levels of port activity, managing urban logistics and adapting national modal shift strategies, the Aix-Marseille-Provence metropolis has the foundations for extending its international influence.
The port of Marseille and its highly developed international activity makes Aix-Marseille- Provence a port and maritime metropolis of scale and ambition. According to the survey "Metropolis on the march: programmes of the Aix-Marseille-Provence project" carried out by the Inter-ministerial mission for the Aix-Marseille-Provence metropolis project (Vol. 2, p. 54), its transport and warehousing business generates more than 56,000 jobs, of which 70% in the goods and merchandise sector. According to INSEE, 8.7% of strategic jobs in the metropolis are in transport logistics, the highest level in France. Port activity generates, for its part, more than 43,000 jobs of which 55% in logistics and port trades.
In terms of logistics, there are six major platforms including those at Salon-de-Provence, Miramas, Fos-sur-Mer and Port-Saint-Louis-du-Rhône, added to which are the urban logistics supply platforms such as Les Milles, Rognac and Vitrolles. In order to align with the other large-scale work projects of the future metropolis, modal share will have to be further developed in all the logistics areas of the metropolis.
The logic of undertaking such a project is clearly reflected by its capacity to generate a significant proportion of the employment in the metropolis.
By virtue of its geographical location, structure and history, the Aix-Marseille-Provence metropolitan area provides a quadri-modal logistics model utilising numerous means of communication including maritime, railway, highway and waterways. An efficient inter- connection of logistical chains in the metropolis, coupled with containerisation, will propulse the metropolis’ port dynamics towards that of a true international interconnection platform and increase its role as an interface. The significant added value of the new platform will make businesses more competitive and the region more attractive to investors.
The combined transport project in the Mourepiane disctrict in Marseille fits into this perspective. Combined transport, mobilising different types of freight, will open up a number of locations, whilst optimising goods transportation throughout the metropolitan zone. By mutualising maritime and inland rail traffic and contributing to the development of rail services in the Eastern part of the Marseille agglomeration, this project forms the corner stone of urban transformation in the zone. An anticipated similar project on the west side of the agglomeration will optimise transport services throughout the metropolitan area.
0013112-0000246 PA:15005400.8 57
In parallel with these developments, the future metropolis plans to create a zone for industry and ports (Z.I.P.) in Fos-sur-Mer, which will rely on all of the existing types of networks such as roads, sea and rivers, railways, ducts and pipelines, gas pipelines or high voltage electricity lines. Complementing the dynamic port of Marseille, the Z.I.P. in Fos-sur-Mer will form the international economic zone of the area, the epicentre of industrial, energy and logistics synergies as part of an essential protected environment.
(c) City-nature programme
The "city-nature" programme is an example of the innovative programmes of the future metropolis. The objective of this programme is to bring about new methods of urban development, consistent with its natural resources and the challenges of growth.
According to the report "Metropolis on the march: programmes of the Aix-Marseille- Provence project" mentioned above (Vol. 2, p. 22), the Aix-Marseille metropolitan area is half as dense as any other OECD metropolis. The dispersed and diffuse nature of the zone can be explained in part by the natural barriers defining it. Indeed, the Etang de Berre and the mountain ranges – the Nerthe, Garlaban, Sainte-Victoire, Sainte-Baume and the Calanques – are such that development must be focused in the valleys.
The high density of the urban centres gradually gives way to small and medium-sized communes. At the same time, peri-urbanisation is characterised by the multiplicity of hinterland and housing estates and an increase in daily traffic flow throughout the metropolis.
This expansion is taking place to the detriment of agricultural land - nearly 1000 hectares disappears each year in the Boûches-du-Rhône. This observation highlights the growing difficulties faced by high potential agriculture, which indeed accounts for 40% of agricultural activity in the département. The swallowing-up of cultivable land contributes to the uniformisation of the landscape and jeopardises the region’s strong identity marker.
The metropolitan territory is made up of developed centres, such as Marseille, Aix, Vitrolles, Martigues, Aubagne and the surroundings of Etang de Berre, but the territory as a whole lacks any concrete definition, consistency or unification.
The foremost aim of this "city-nature" programme is to develop a long-term understanding of the metropolitan region and to redefine the fundamental role of its undeveloped spacesby structuring it.
This project will also bring to the forefront and materialise the challenges of environmental management of spaces such as the Endangered Natural Spaces, Natural Reserves or the National Parks.
With a view to natural unification of the metropolitan area, the Regional Ecological Coherence Plan plans to incorporate "green and blue grids" at metropolitan level. This new interconnectivity, durable and clear for all, will form a true spatial model for the new structure.
For a dynamic launch of the "city-nature" programme and to promote cooperation from the outset between all stakeholders in the metropolis, itself an element of sustainability, a partnership with the GR2013 – the Ecole Normale Supérieure du Paysage et de l’Architecture de Marseille, the Institut d’Etudes Politiques and the Institut d’Urbanisme et d’Aménagement Régional d’Aix-en-Provence – facilitates joint productions of artistic representations and the sharing of collective know-how in the metropolis.
0013112-0000246 PA:15005400.8 58
This programme fits in with the objective of sustainably structuring the future metropolis by promoting a region which combines activity centres and protected natural spaces, which will encourage the growth of tourism while dynamising the metropolitan urban centre and the mobility mechanism.
(d) Energy Transition programme
Energy transition is a major issue for the contemporary society and for its territory.tackling this issue head on, is to take initiatives and be innovative, contemporary and pragmatic.
The new metropolis of Aix-Marseille-Provence has opted for an energy model of sustainable efficiency.
Indeed it has the required capacity to combine economic ambitions with environmental demands and can rely on advances made by the region in this area, thanks in particular to the Regional Climate Air Energy Plan (SRCAE) guidelines.
The "energy transition" programme’s relevance is based on European major policy objectives, such as the European Union "20-20-20" target, i.e. - 20% green house gas emissions, +20% renewable energies and +20% energy efficiency. The aim of the metropolis, through this project, is to remodel energy’s image and move towards a rational, collective conception.
Unparalleled in its renewable energy production resources – sea, wind, sun – energy transition would be a springboard towards multiple resources for the future metropolis. Wind farms, ground and water source heat pumps, solar energy, electrical mobility are some of the promising economic prospects that the metropolis intends to develop.
Helping it to face these challenges, the metropolis benefits from diverse local structures such as the regional climate energy plans, the Local Energy Agency and also the forthcoming Regional Agency.
The metropolis will also have to tackle renovation of the housing stock the cost of which will be significant. Aix-Marseille-Provence will put in place the required technical and financial resources to free up investment, manage projects, collect and redistribute the economic benefit derived from new energy production. The metropolis aims to be the centre for a true energy public service.
Three social-oriented projects complement these fundamental programmes.
1.3 Aix-Marseille-Provence: centre for innovation and vector of social cohesion
The future metropolis is already drawing up a new social model promoting and encouraging cohesion and participation (a) through innovation (b) and the dynamism of youth (c).
(a) Social and regional cohesion programme
The prime objective of the "social and regional cohesion" programme is to put human relations, social and regional equality back at the heart of metropolitan concerns.With the opening up of disadvantaged districts and support for the life paths and careers of everyone, the programme is aimed to reintegrate individuals in financial needs to the societyand reduce inequalities.
According to the OECD report published in 2013 (Towards a more inclusive growth in the Aix-Marseille Metropolis: an international perspective, p. 11), the Aix-Marseille-Provence
0013112-0000246 PA:15005400.8 59
metropolitan area is more threatened from within due to its high level of inequalities – placing the area amongst the most inegalitarian metropolises in France – than by competition in other domains from other metropolises.
Areas of widespread poverty with growing levels of unemployment sit side by side with prosperous neighbourhoods. The region is one where the population’s dependency on the distribution of welfare benefits from the Caisse d’Allocations Familiales is almost 30% higher than the average in other metropolitan areas.
The wealth divide between areas is long-standing but the gap is widening as the polarisation of activity zones increases.
This programme is a continuation of the policy of opening up local areas thanks to sustainable and unificatory transport system. In order to associate the disadvantaged areas with the construction of the young metropolis, the State and the decentralised authorities will adapt their actions in accordance with local priorities. The aim of the metropolis is to ensure urban and social development, promote a sustainable model for social cohesion reduce inequalities and involve everyone in its construction.
This model is based on three main pillars.
The first priority is to ensure and improve access of the disadvantaged to the systems designed to support them. Help in providing access to housing and employment and a widening of training opportunities will be the two central components of these ambitions.
Then, setting new geographical priorities – targeted public intervention designed to help disadvantaged districts as part of a specific action plan – will be of prime importance in strengthening this new cohesion. For this purpose, the metropolis is planning to adopt an outward looking perspective, not focusing on zoning local areas but widening it further towards that which unites them.
Finally, Aix-Marseille-Provence will support an approach of common integration and construction, with everyone being involved in boosting the dynamics of the metropolis and the fairness of its development.
Aware of the scale of its ambitions, the young metropolis is already putting initiatives in place to launch its projects. The foundation of a Metropolitan Districts Fund reflects the desire to encourage citizens to participate in the new metropolitan area. This fund, which receives funds from the public and private sectors, will enable the financing of 50 to 100 business or activity creation projects launched by young people from today’s disadvantaged districts. The establishment of this fund is a joint proposal of local, national and European entities including the Public Investment Bank (BPI) France and the Caisse des Dépôts et Consignations.
Adopting a long-term outlook involves in particular reducing the isolation and associated problems of Marseille’s northern neighbourhoods; transforming this delicate zone into a true interface at the heart of the metropolis will contribute greatly to the dynamism of the metropolis during its construction. Finally, reducing insecurity in the town centre of Marseille and rethinking its role in future metropolitan urban exchanges will support sustainable connectivity in Aix-Marseille-Provence.
0013112-0000246 PA:15005400.8 60
(b) Cultivating innovation programme
In keeping with the "social and regional cohesion" programme, the "cultivating innovation" programme supports innovation, an essential factor in constructing the young metropolis.
Catalyst for creativity and progress, innovation manifests itself in several complementary ways, such as research, testing and sustainable technology.
With France's leading university in terms of student numbers and the cross-border outreach of seven competitiveness hubs - Cadarache for energy, Luminy for life sciences, Vitrolles and Marignane for aeronautics, Château-Gombert for engineering sciences, Rousset for microelectronics, Arbois for the green economy – the metropolis boasts a huge capacity for innovation.
According to the above-mentioned OECD report (Towards a more inclusive growth in the Aix-Marseille Metropolis: an international perspective, 2013), Aix-Marseille-Provence’s position is particularly improving compared to other European metropolises in research activities. Paradoxically, expenditure on innovation – research and development, technology – appears to be rather low compared to other French urban areas.
Strengthened by these advantages, the future metropolis will increase its capacity for innovation, an indispensable factor in meeting the needs of today and tomorrow and facing global challenges.
Such innovation is not, however, limited simply to technological aspects but also has a corporate, urban, environmental, cultural and societal dimension.
The future metropolis also benefits from the support of the regional council, through its Regional Strategy for Innovation, of the State’s Investment for the Future Programmes and also of BPI’s reconquest plans to map out France’s industrial future. In parallel, the European Union has adopted its "Horizon 2020" programme,which it sets out its priorities in innovation.
At its level, the future metropolis of Aix-Marseille-Provence will consolidate its innovation policy in line with its new social cohesion imperatives.
(c) Youth potential programme
Actors in the metropolitan life of tomorrow and vectors for new skills and dynamism, the youth are an indispensable asset for the future metropolis. Like most other metropolises, the metropolis has a population younger than the national average.
Still extremely unequal in training access and higher education, Aix-Marseille-Provence must transform its model and give its youth the keys to success.A solution to youth unemployment must be found and the right of access to housing guaranteed. The viability of the "youth potential" programme also rests on improving access to training.
Giving back to young people the power to construct the metropolis requires dialogue, sharing of ideas and knowledge, interaction and communication. Numerous places for interaction may be established for this purpose.
Developing the influence of the youth in the expansion of the metropolis will also take place through international partnerships and youth interaction in Europe and worldwide.These multi-cultural exchanges may take place at different levels, from secondary to higher education and in research.
0013112-0000246 PA:15005400.8 61
A "youth international springboard" project has already been proposed, the product of a collaboration between Aix-Marseille-University, the Kedge Business School, the engineering colleges, the regional University for professions and other actors in education.
In parallel, the establishment of a business creation fund for young people from disadvantaged neighbourhoods ("social and regional cohesion" programme), training for metropolitan professions of the future ("cultivating innovation" programme and "ports and logistics systems" programme) and flexible mobility will increase youth participation.
It is therefore a metropolis of consensus, inclusive and sustainable, that is emerging, with multiple aspirations and with the dynamism and the necessary resources to bring them to reality. The Communauté Urbaine Marseille Provence Métropole will be a major player in its construction and is already focusing on the foundations of the metropolitan society of tomorrow.
1.4 Use of funds by MPM
The funds received are to be used to finance the Issuer's investments. The following have been financed: major amenities and infrastructure (excluding specific projects): restoration of work of art, U 430 (pathway located in Marseille 10th and 11th), U424 (overall development plan pathway in Saint Loup between avenue Mireille Lauze and the boulevard de Pont de Vivaux); economic development initiatives dedicated to the business creation centre, Euroméditerranée, and Technocentre Henri Fabre; specific major amenities projects: laying of tramway, BHNS and metro lines; renovation of rolling stock, ticket distribution systems; collection and treatment of wastewater; works in the Jules Guesdes basin; and finally modernisation works in the leisure port.
2. THE ISSUER’S POSITION IN THE NATIONAL GOVERNMENTAL FRAMEWORK
2.1 Head office, legal form and address
Geographical location Legal Date of Address Telephone form establishment Mainland France Les Docks - Atrium 10.7 – Provence-Alpes-Côte EPCI 2000 PB 48014 04 91 99 99 00 d'Azur Région Boûches-du-Rhône 13567 Marseille Cedex 02 Département
2.2 General background on local authorities and Etablissements Publics de Coopération Intercommunale
The Issuer is an inter-communal cooperation public establishment (EPCI), having separate legal personality and legally enshrined financial autonomy.
0013112-0000246 PA:15005400.8 62
EPCI are groupings of communes. As at 1st January 2015, there are 2,133 EPCI with autonomous powers of taxation. Such EPCI include urban communities, established by the law n° 66-1069 of 31 December 1966, and agglomeration communities, established by the law n° 99-586 of 12 July 1999, the so-called "Chevènement" law. The distinction between these two groupings is essentially a matter of population thresholds.
An urban community is a grouping of several communes in a contiguous and continuous zone forming, on the date of its creation, a body of more than 450,000 residents whereas an agglomeration community encompasses several communes forming, on the date of its creation, a body of more than 50,000 residents in a contiguous and continuous zone around one or more central communes of more than 15,000 inhabitants.
A number of decentralisation laws have increased the role and powers of local authorities. The latest, the law no. 2010-1563 of 16 December 2010, for the reform of local authorities aims to simplify local authority structures (communes, inter-communal structures, départements, régions), to reduce the number of local authority level and to clarify their powers and financing.
2.3 Specific features of the Issuer
(a) EPCI
The intercommunal principle enables communes to group together to jointly manage amenities or public services and/or develop economic, land or urban development projects on the scale of an area larger than that of a single commune. Communes transfer mandatory powers, as well as optional powers, to these groupings. This transfer of powers endows EPCIs with the powers to take decisions and exercise executive powers that were previously held by the communes.
There are two forms of intercommunal cooperation: the federative form which is financed by the four "local" taxes (EPCI with autonomous taxation powers): the territorial economic contribution, the residence tax, the tax on developed land and the tax on undeveloped land. This federative form encompasses communities of communes, the "new agglomeration syndicates" ("SAN") and urban communities, and in addition agglomeration communities created by the law no. 99-586 of 12 July 1999 on the strengthening and simplification of intercommunal cooperation and metropolises, introduced by the local authority reform law no. 2010-1563 of 16 December 2010. the associative form which is financed by budgetary and/or tax-based contributions of the member communes (EPCI without specific taxation powers). This includes single-purpose syndicates ("SIVU"), multi-purpose syndicates ("SIVOM") and mixed syndicates.
The law n° 99-586 of 12 July 1999 on the strengthening and simplification of intercommunal cooperation fundamentally changed the intercommunal system as an extension of the founding laws of decentralisation. It also rationalises intercommunal structures by uniting communities in a territorial grid that excludes any form of supervision by one community over another.
It provides all communes with effective instruments for integrated exercise of their powers, the implementation of which is essential to ensure balanced development at local authority level: by establishing a new intercommunal status with autonomous powers of taxation based on three structures (instead of the previous five): the community of communes, the agglomeration community and the urban community, to make the urban environment easier to recognise and give new life to the rural environment; by increasing financial solidarity;
0013112-0000246 PA:15005400.8 63
by establishing unified operating rules out of a desire for transparency.
The law no. 2004-809 of 13 August 2004 on local freedoms and responsibilities introduced provisions aimed at increasing intercommunal cooperation and simplifying its operation.
This law authorises EPCIs to enter into agreements by which they exercise some of the powers of départements and régions. Their role in housing policy is also strengthened, with the powers to manage, by delegation from the State, financial help towards home ownership. Lastly, internal organisation arrangements, chiefly the provision of services, and financial relations of EPCIs with their member communes, have been relaxed.
The law no. 2010-1563 of 16 December 2010 drastically extended intercommunality. Efforts in this area had been made to include the last remaining isolated communes, to rationalise the scope of the existing EPCIs, and abolish obsolete intercommunal syndicates. With a view to increase the competitiveness of the major agglomerations, départements or régions may merge. Furthermore, the metropolis, a new category of EPCI for urban zones with more than 500,000 inhabitants (except Ile- de-France), was established.
The ambition to establish metropolises and Euro-metropolises was confirmed by the adoption on 19 December 2013 of a draft law for the modernisation of regional public action and affirmation of metropolises, sponsored by the minister for the reform of the State and decentralisation of the civil service.
(b) Characteristics of urban communities
The 16 urban communties and metropolis (Nice Métropole) in France constitute the oldest and most integrated forms of urban cooperation and one of the best adapted forms of management that exist, both as regards the combined powers of these entities and the scale of investments they can commit.
Marseille Provence Métropole is one of such urban communities.
An urban community is an EPCI grouping together several communes in a contiguous and continuous zone forming, on the date of its creation, a body of more than 450,000 residents. Prior to the adoption of the local authority reform law no. 2010-1563 of 16 December 2010, this threshold was 500,000 residents. The Issuer was created before this law was passed.
The Marseille Urban Community was created after the law no. 99-586 of 12 July 1999 on intercommunal cooperation, and was created ex-nihilo.
The purpose of an urban community is to bring communes together in a space of solidarity with a view to developing a joint programme for planning and developing the zone.
An urban community is created by prefectoral decision at the instigation of one or more municipal councillors or at the Prefect's initiative following an opinion from the departmental commission on intercommunal cooperation.
Its powers are transferred to it by the member communes, which establish the dividing lines between the community and communal powers in each area at the time of creation of the urban community.
An urban community is run by a community council (the deliberative body) composed of elected officials from the member communes, and by a president (the executive) elected by the council from among its members. Following the local authority reform law no. 2010-1563 of 16 December 2010, community councillors in communes with more than 3,500 residents were elected by direct universal suffrage in the 2014 municipal elections. The elected officials of small communes will, however, continue to be elected by the municipal council.
0013112-0000246 PA:15005400.8 64
(c) Mandatory powers of urban communities
An urban community does not exercise optional powers. Under articles L.5215-20 and L.5215-20-1 of the French general local authorities Code (CGCT), an urban community exercises mandatory powers in matters of:
economic, social and cultural planning and development of the community space: creation, development, maintenance and management of industrial, commercial, tertiary, artisanal, tourist, port and airport activity zones; promotion of tourism, including establishing tourist information offices; economic development measures; construction or development, maintenance, management and operation of amenities, amenities networks or cultural, socio-cultural, socio-educational, sports establishments, when of community interest; middle and high schools under the terms of Section I of Book II and Chapter I of Section II of Book IV, as well as article L. 521-3 of the French Education Code; programme of support and assistance for higher education and research establishments and research programmes;
development of the community space: regional coherence scheme and sectoral scheme, local urban development plans and documents; creation and realisation of community interest joint development zones, and on the advice of the municipal councillors, setting aside of community interest real estate reserves; organising mobility within the meaning of articles L. 1231-1, L. 1231-8 and L. 1231-14 to L. 1231-16 of the French Transport Code, subject as provided in article L. 3421-2 of such code; creation, development and maintenance of roads; traffic signals; car parking facilities; urban public transport plan; decriminalising parking; consideration of an overall development plan and determination of sectors for development, within the meaning of the French urban planning Code;
social equilibrium of housing within the community zone: local housing programme; community interest housing policy, financial assistance for community interest social housing, initiatives to promote community interest social housing, action to promote housing for the disadvantaged through community interest initiatives; plans of action to improve housing, renovation or demolition of squalid housing when in the community interest;
town planning in the community: contractual structures for urban development, local development and economic and social integration; local anti-social behaviour prevention measures;
Management of collective interest services: Sewage, sanitation and water;
0013112-0000246 PA:15005400.8 65
rain water; construction and extension of cemeteries, crematoriums and funerary sites; slaughterhouses, slaughterhouse markets and markets of national interest; fire and emergency services; contribution towards energy transition; management of urban heating or cooling networks; concessions for public distribution of gas and electricity; creation and maintenance of electric vehicle infrastructure;
environmental protection and enhancement and living standards policy: collection and treatment of household and similar waste; combating air pollution; combating noise pollution; support for measures to control demand for energy; management of the aquatic environment and flood prevention; and management of travelling community welcome centres.
2.4 Transformation of the Issuer under local authority reforms
(a) Background to local authority reform
France’s development has beendeeply affected by a rapid accelerating globalisation and the expansion of the European Union. But the country itself is also changing: the French population has grown by 10 million in 30 years and the former dividing line between city and countryside is less and less evident, with three quarters of the population now concentrated within 20% of the land mass.
The status of Metropolis, established on 16 December 2010 and reinforced by the law of 27 January 2014, is an essential link in the ambitious local authority reforms, sponsored by the head of State.
To give more power to local authorities, the status of Metropolis was established by the law of 16 December 2010 which affirmed the role of the major agglomerations as vectors for growth and the attractiveness of the region.
The law of 27 January 2014 for the modernisation of local authority public action and affirmation of metropolises (MAPTAM) reinforces their role and defines their status bringing a new clarity to the exercise of powers at local level. The main provisions of the law relate to affirmation of metropolises governed by the general law and metropolises with a particular legal status in the case of Paris, Lyon and Aix-Marseille-Provence.
As of 1 January 2015, an initial stage was reached with the new map of France which includes 10 new metropolises: Rennes, Bordeaux, Toulouse, Nantes, Brest, Lille, Rouen, Grenoble, Strasbourg and Montpellier, joining Nice, an already existing metropolis whose legal status is due to change.
Also created on 1 January 15, the Metropolis of Lyon is a fully fledged local authority with a specific legal status. The metropolises of Aix-Marseille-Provence and Grand Paris, will come into existence on 1 January 2016.
0013112-0000246 PA:15005400.8 66
(b) What is a metropolis?
Pursuant to article L.5217-1 of the general local authorities code (CGCT), a metropolis is an inter- communal cooperation public establishment (EPCI) bringing together several communes "in a contiguous and continuous zone" which join together to form "a space of solidarity for jointly defining and conducting a project for economic, ecological, educational, cultural and social planning and development within their geographical zone to improve its competitiveness and cohesion".
The purpose of the metropolis is to enhance the economic functions of the area and its transport networks and to develop its university, research and innovation resources. It also promotes the region internationally.
Formed on a voluntary basis, the status of metropolis is available to local authorities of more than 400,000 inhabitants in an urban area of more than 650,000 inhabitants.
Each agglomeration community may, upon reaching this threshold, apply to become a metropolis: for example, Brest and Montpellier are now candidates. The decision is then made by decree. Upon its creation, a metropolis is automatically substituted in place of all existing inter-communal entities in the zone in accordance with article L. 5211-41 of the CGCT which provides that: "all assets, rights and obligations of the transformed inter-communal cooperation public establishment are transferred to the new public establishment which is substituted automatically in place of the former establishment with respect to all of such establishment's decisions and acts as from the date of the document which gave effect to such transformation".
(c) Which powers are transferred to the metropolis?
A metropolis exercises certain powers by operation of law, within its geographical boundaries: in matters of economic, social and cultural planning and development: creation, development and management of industrial, commercial, tertiary, artisanal, tourist, port and airport activity zones; economic development measures; construction, development, maintenance and operation of cultural, socio-cultural, socio-educational and sports amenities of metropolitan interest. in matters of metropolitan zone development: regional coherence scheme and sectoral scheme; organising public transport; creation, development and maintenance of roads; traffic signals; bus shelters; car parking facilities and urban public transport plan. in matters of local housing policy: local housing programme; housing policy; financial assistance for social housing; initiatives to promote social housing; initiatives to promote housing for the disadvantaged; improvement of housing/real estate stock, renovation or demolition of squalid housing. in matters of town planning: preparing diagnostics for the zone and establishing guidelines for the town planning contract; implementation and coordination of contractual measures for urban development, local development and social and economic integration and local measures for the prevention of anti-social behaviour. in matters of management of collective interest services: Sewage, sanitation and water; fire and emergency services, under and in accordance with Chapter IV of Section II of Book IV of part I of the general local authorities Code. in matters of environmental protection and enhancement and living standards policy: management of household and similar waste; combating air and noise pollution; contribution towards energy transition; support for measures to control demand for energy; creation, development, maintenance and management of urban heating or cooling networks.
0013112-0000246 PA:15005400.8 67
Also, the State, régions and départements may, by agreement, delegate certain of their powers to metropolises.
Metropolises on national borders may join cross-border cooperation organisations. The status of Lille as a European metropolis may thus be extended beyond its national borders.
Each metropolis may, within its geographical area, establish metropolitan councils, with an operating and investment budget funded by metropolitan operating endowments.
A metropolis may, by signing an agreement with the State, also exercise full powers in matters of housing: financial help towards home ownership, prefectoral social housing reservation quota (in whole or in part), guaranteed right to decent and independent housing ("DALO"), implementation of procedures for requisitioning and managing emergency accommodation. The State may also confer ownership and management of major amenities and infrastructure.
(d) Aix-Marseille-Provence
The metropolis of Aix-Marseille-Provence will come into existence on 1st January 2016. It will replace the Communauté Urbaine Marseille Provence Métropole, the agglomeration community of Pays d'Aix-en-Provence, the agglomeration community of Salon Etang de Berre Durance, the agglomeration community of Pays d'Aubagne et de l'Etoile, the new agglomeration syndicate of Ouest Provence and the agglomeration community of Pays de Martigues. It will boost economic development, provide coordinated public transport services and implement a joined-up housing policy.
3. GENERAL DESCRIPTION OF THE ISSUER’S POLITICAL AND GOVERNMENTAL SYSTEM
3.1 General description of the political and governmental system of local authorities
All local authorities consist of: a deliberative body elected by direct universal suffrage (municipal, general or regional council). For EPCIs, since the beginning of 2014, the members of their deliberative body are also elected by direct universal suffrage; an executive body elected from among the members of the deliberative assembly (mayor and his assistants, general and regional council presidents, presidents of urban communities, agglomeration communities and mixed syndicates).
3.2 Specific features of the Issuer - EPCI with autonomous taxation powers
The executive: the president of the Community
The president is the executive organ of the community. He is elected by the community council by secret ballot, from among the commune delegates. He prepares and ensures that the community council's deliberations are executed.
The president orders expenditure to be made and revenue to be collected and directs services.
Under the terms of article L.5211-10 of the CGTC, various powers of the community council may be delegated to the president.
The president may, by decision, under his supervision and responsibility, delegate some of his functions to vice-presidents or other members of the bureau.
0013112-0000246 PA:15005400.8 68
The deliberative body: the community council
The community is run by a deliberative body, the community council, which forms its administration.
Seats are distributed proportionally among the communes, adjusted to ensure that all communes are represented and to balance the geographical representation of the urban community. Thus, the number of elected officials per commune varies depending on the size of the member communes.
Community councillors can join together to form political groups. To form a group, a minimum of five elected officials is required.
A community council is comparable to a municipal council. The president equates to the mayor; the vice-presidents to the assistant mayors and the community councillors equate to the municipal councillors. The maximum term of office is six years, like the municipal councillors.
By its deliberations, the community council decides matters that fall within the powers of the urban community. All deliberations adopted by majority vote of the community council are subject to control of their legality by the Prefect. At each meeting of the deliberative body, the president reports on the bureau's work and on the powers exercised by delegation from the deliberative body. The council must meet at least once per quarter on convocation by the president.
The community council can delegate part of its powers to the president and to the bureau.
Other bodies: The bureau
The President is assisted in his work by a bureau, or community bureau.
The community council elects the bureau. The bureau’s members include the president, one or more vice-presidents (which may not exceed 20% in number of the council’s members) and one or more other members.
The bureau members are elected from among council members in accordance with the rules governing the election of mayors and municipal assistants. A fresh election of bureau members must take place whenever a new president is elected.
The bureau approves all decisions concerning the effective running of the administration and defines the work to be performed by committees. As provided in article L. 5211-10 of the CGTC, the community council may delegate power to the bureau to take decisions in its place.
The law no. 99-586 of 12 July 1999 introduced an option to delegate certain community council powers to the bureau to facilitate and streamline the decision-making process while maintaining the community council as the principal deliberative body. Committees
Committees perform a consultative role. They are chaired by a vice-president and comprise members of the community council. The president of the community council is automatically a member of all committees by virtue of his office.
0013112-0000246 PA:15005400.8 69
4. RECENT EVENTS MATERIAL TO ASSESSING THE ISSUER’S SOLVENCY
As of today’s date, there are no recent material events likely to affect the Issuer’s solvency.
5. THE ECONOMY OF THE ISSUER
5.1 Issuer’s economic structure
The Issuer's action areas flow from the powers delegated to it, in particular with respect to urban planning and development, economic action, transport, sewage and water, household waste, social welfare, professional training, education, fire and emergency services.
Presentation of the budget by function, provides an accounting analysis of each relevant area.The budget is therefore split into 10 separate functions corresponding to the community's main areas of action (urban planning and development, security etc.).
Example: Function " 2. Education-training" includes the sub-function "21. Primary education" which covers three headings including "211. Nurseries" and "212. Primary Schools".
All expenditure and revenue is then allocated between these functions to enable any changes to be tracked.
It should be noted that sub-function "01. Non-allocatable transactions" includes all expenditure and all revenue that cannot be classified under functions 1 to 9. This includes all transactions relating to debt, most operating revenue items, such as taxes, duties and endowments, as well as amortisations and provisions.
In some cases, the figures appearing in this sub-function may be substantial. This may be explained by the fact that the Issuer has not been able to allocate payroll expenditure items between the various available functions, and has therefore entered this type of expenditure in non-allocatable transactions.
Level of investment and operating expenditure for each of the Issuer’s areas of authority
Details of the level of investment and operating expenditure for each of the Issuer’s areas of authority are set forth below (in €). Where main budget and ancillary budget data has been consolidated, this is specified where relevant.
The data set forth below traces the most recent financial information per budget, on a consolidated basis if relevant, unless specified otherwise. The Issuer’s main budget and ancillary budget "Waste Collection and Treatment" are presented by function solely due to consolidation being impossible or due to lack of data relating to some ancillary budgets.
0013112-0000246 PA:15005400.8 70
Operating expenditure by function in the main Budget only
Operating expenditure by function (in millions of euros)
AA 2011 AA 2012 AA 2013 PB+SB 2014 PB 2015
Actual operating 573.608 603.607 588.408 603.045 601.064 expenditure
Function 01 non- 259.394 271.180 269.503 237.617 239.947 allocatable
Function 0 general 122.721 122.802 126.269 136.189 133.476 services
Function 1 public health 16.361 17.367 17.899 18.184 18.442 and safety
Function 2 education- 0.251 0.257 - - - training
Function 3 culture – - - -
Function 4 sport and – - - - youth
Function 5 social and – - - - health initiatives
Function 6 family – - - -
Function 7 housing – - - -
Function 8 urban 164.678 180.571 165.271 201.404 200.445 development and services, environment
Function 9 economic 10.201 11.428 9.463 9.650 8.752 action
0013112-0000246 PA:15005400.8 71
Investment expenditure by function in the main Budget only
Investment expenditure by function (in millions of euros)
AA 2011 AA 2012 AA 2013 PB+SB PB 2015 2014
Actual investment 322.860 373.356 338.376 360.727 336.116 expenditure
Function 01 non allocatable 127.092 133.873 125.157 102.664 74.640
Function 0 general services 12.356 12.862 6.129 7.035 6.880
Function 1 public health and – - - - - safety
Function 2 education – training – - - - -
Function 3 culture – - - - -
Function 4 sport and youth – - - - -
Function 5 social and health – - - - - initiatives
Function 6 family – - - - -
Function 7 housing – - - 0.076 0.062
Function 8 urban development 159.079 207.127 195.265 232.408 225.280 and services, environment
Function 9 economic action 24.332 19.493 11.824 18.541 29.253
0013112-0000246 PA:15005400.8 72
5.2 Communauté Urbaine Marseille Provence Métropole business sectors
Change Number of businesses per sector 01/01/2010 01/01/2011 01/01/2012 01/01/2013* 2010/2013
A Agriculture, forestry, fishing 513.00 557.00 587.00 608.00 19%
B Extraction industries 11.00 10.00 11.00 11.00 -
C Manufacturing industry 3 286.00 3 438.00 3 489.00 3 640.00 11%
D Production and distribution of electricity, gas, steam andconditioned air … 89.00 123.00 135.00 164.00 84%
E Production and distribution of water, sewage, waste management and depollution 97.00 99.00 113.00 121.00 25%
F Construction 7 715.00 8 706.00 9 311.00 10 042.00 30%
G Commerce; auto repair 14 456.00 15 385.00 15 949.00 16 544.00 14%
H Transport - warehousing 2 126.00 2 191.00 2 221.00 2 301.00 8%
I Hotel and catering 4 389.00 4 526.00 4 691.00 4 859.00 11%
J Information and communication 2 292.00 2 658.00 2 858.00 3 071.00 34%
K Finance and insurance 2 065.00 2 233.00 2 343.00 2 460.00 19%
L Real estate 2 646.00 2 940.00 3 140.00 3 257.00 23%
M Specialist, scientific and technical activities 9 177.00 10 486.00 11 219.00 11 889.00 30%
N Administrative and support services 3 431.00 3 742.00 3 987.00 4 260.00 24%
O Public administration 124.00 109.00 109.00 110.00 11%
P Education 2 358.00 2 854.00 3 173.00 3 467.00 47%
Q Human health and social action 11 566.00 11 853.00 12 230.00 12 578.00 9%
R Arts, entertainment and recreation 4 204.00 4 442.00 4 568.00 4 739.00 13%
S Other services 7 592.00 8 354.00 8 629.00 8 935.00 18%
U Extra territorial activities 32.00 33.00 34.00 34.00 6%
TOTAL 78 169,00 84 739.00 88 797.00 93 090.00 19%
Source: SIREN INSEE data files
* 2014 data not yet known
0013112-0000246 PA:15005400.8 73
6. PUBLIC FINANCES
6.1 Taxation and budgetary system
(a) Taxation system
(i) Presentation of the Issuer Marseille Provence Métropole’s taxation powers
Local authorities cannot create new taxes to increase their budgets. However, since the law no. 80-10 of 10 January 1980, they do have the freedom to decide the rates to apply for the four direct taxes (residence tax, tax on developed land, tax on undeveloped land, and the professional tax, or "TP"). But this law heavily restricts this freedom to avoid inequality of treatment between taxpayers and a too sharp growth in the tax burden.
The Communauté Urbaine Marseille Provence Métropole’s direct taxation powers today include "household" taxes,"economic" taxes and Household Waste Collection Tax.
The abolition of the professional tax and its replacement by the territorial economic contribution was matched on 1st January 2011 by a significant change concerning the sources of local authority funding. In 2011, local authority tax reforms resulted, for local authorities, not only in the introduction of new economic taxes which replaced the professional tax, but also in the redistribution of household taxes between the various local authority levels.
The tax revenues of local authorities, with autonomous powers of taxation, comprise direct and indirect taxes. Urban communities, however, only have direct taxation powers.
"Household" taxes include: Residential tax (taxe d'habitation (TH)): paid by private owners, tenants or non-paying occupants of a residence. The tax base is calculated from a land registry assessment of the relevant premises.This tax revenue is a earmarked solely for communes; Tax on developed land (taxe sur le foncier bâti (TFB)):paid by legal owners, beneficial owners or fiduciaries of a building. The tax base is equal to 50% of theland registry rental value.This tax revenue is earmarked for all local authorities, except regions; Tax on undeveloped land (taxe sur le foncier non bâti (TFNB)): undeveloped land of all types located in France is liable to property tax. This tax is payable on land, of whatever kind, including that occupied by railways,quarries, mines and peat bogs, ponds, saltworks and salt pans, agricultural greenhouses … To compensate for the abolition of département’s and région’s shares of the tax on undeveloped land, a supplemental property tax on undeveloped land has been collected since 2011. The revenue from these taxes goes to local authorities (communes and inter- communal cooperation public establishments). It is used to partially finance their budget.
"Economic" taxation includes: the territorial economic contribution ("CET"), which replaced the professional tax ("TP") on revenue generating investments in 2010. This is a
0013112-0000246 PA:15005400.8 74
local tax on businesses which benefits all business sectors in France. The CET comprises: . a real property contribution by companies (CFE), the base of which corresponds to that of the former real property component of the TP, and the rate of which is still voted by elected officials under capping and liaison rules. This revenue goes to communes and groupings with autonomous powers of taxation; . and the contribution on the added value of companies (CVAE), which is calculated at a uniform rate of 1.5% on the added value generated by companies with a turnover of more than €152,500.
The sum of the two components "CFE+CVAE" is capped at 3% of the added value generated by the company.
The minimum CFE base was reformed by article 76 of the 2014 finance law which amended article 1647 D of the general tax code (CGI). Taxpayers with turnover of less than or equal to €10,000 and €32,600 henceforth benefit from a levelling of their tax base, which now stands at €500 and €1000 respectively. Alongside this levelling, the self-employed (auto- entrepreneurs) are now also liable to pay the CFE, which is designed to off- set the loss incurred; the transport payment (VT) paid to urban transport organising authorities (AOTU). MPM implemented the VT as from 1st January 2001 to ensure long-term funding for urban public transport. It is paid by companies and any organisation, public or private, employing more than 9 employees within the relevant AOTU’s jurisdiction; fixed tax on utilities companies (IFER) which is calculated by reference to a scale depending on the power or size of the taxable installation. These taxes are distributed between the various local authority levels; tax on commercial premises (TASCOM) which is payable by all retail stores with an annual turnover equal to or greater than €460,000 and more than 400 m² of retail space or forming part of a network with a surface area of more than 4000 m². The rate per m² varies between €5.74 and €34.12 and depends on the turnover per m² of the business; the levy on betting revenue (horse race betting) in respect of which the law of 12 May 2010 on betting industry competition and regulation introduced a levy on horse race betting. 15% of the revenue from this levy is allocated to EPCI as from 2014.
Household Waste Collection Tax (TEOM):
The public waste collection and treatment service is financed essentially by the household waste collection tax (TEOM). The TEOM has since 2011 been the MPM’s primary source of tax revenue. This has been one of the side effects of the TP reform which, by abolishing what was easily the primary source of tax revenue of urban communities, and replacing the old TP revenue with myriad sources of revenue (CET (CFE+CVAE), IFER, TASCOM, recovery of the departmental share of the residence tax (TH) etc.), has fundamentally changed MPM’s tax revenue structure.
0013112-0000246 PA:15005400.8 75
(ii) Changes in the Issuer’s sources of tax revenue
PRINCIPAL TAX REVENUES OF COMMUNAUTE URBAINE DE MARSEILLE IN MILLIONS OF EUROS AA 2011 AA 2012 AA 2013 PB+SB 2014 PB 2015 Household Waste Collection Tax 165.13 170.55 180.226 182.459 189.408 Transport Payment 144.43 150.83 170.221 167.728 166.738 Residence Tax (TH) 139.52 144.82 149.761 164.369 166.229 CFE 84.648 90.752 95.248 91.023 96.935 CVAE 45.866 52.968 55.795 56.346 55.178 Tax on developed land 18.941 17.505 20.399 42.98 44.129 TASCOM* 7.201 7.766 7.983 8.173 8.369 IFER 2.932 3.549 3.453 3.440 3.774 Additional tax on undeveloped land 0.656 0.655 0.66 0.625 0.598 Horse race betting levy 0 0 0 0.459 0.459 Tax on undeveloped land 0.73 0.142 0.139 0.137 0.130 TOTAL 610.05 639.54 183.677 717.739 731.992 Source: Issuer’s Budget *TASCOM: Tax on Commercial Premises
Changes in taxation of households:
The growth in revenue from the taxation of "households" recorded in 2012 (+5.4 M€, or +3.4% compared to 2011), derives as to 88% from the residence tax (taxe d'habitation), and results solely from the dynamics of its assessment basis, the rates having not changed since 2008.
In 2014, the growth in revenue from the taxation of "households" (+38.59 M€, or +22.77% compared to 2013), derives from the tax on developed land and the residence tax and is the result of an increase in rates and the dynamics of the basis of assessment. Against a very unfavourable economic background, MPM has increased the chargeable rates of the tax on developed land (+2 points) and of the residence tax (+1 point).
The anticipated growth in revenue from the taxation of "households" for 2015 (+1.43%) derives from the dynamics of the basis of assessment, the 2014 rates being maintained for 2015, i.e.: -13.34% for the residence tax; -3.88% for the tax on developed land; -3.71% for the tax on undeveloped land.
Changes in economic taxation:
So-called "economic" taxation has not changed between 2013 and 2014. This trend hides a wide spread between the increase in the transport payment (VT) which has continued the upwards trajectory observed in 2012 and 2013, and the sharp drop in the territorial economic contribution (CET) of 4.661 M€. The main reason for this fall is the reform of the CET, introduced under the rectificatory finance law of 2013 and the 2014 finance law, and to a lesser extent the weak dynamics of its basis of assessment.
This reform, which involves applying a new minimum base scale for the real property contribution by companies (CFE), brought about, between 2013 and 2014, a fall in revenue of -4.212 M€ while changing the manner of the CVAE distribution led to a fall in revenue of around 1 M€, compensated partly by the "natural" increase in revenue (hence a final loss of CVAE revenue of 0.449 M€).
0013112-0000246 PA:15005400.8 76
The year 2015 will be characterised by a renewed increase in CFE, the 2015 finance act having set the annual rental value revision, which takes into account inflation, including rent increases, at 0.9%. The tax's increase is estimated at around 6.5% for 2015, and based on that assumption, CFE revenue for 2015 is estimated at 96.94 M€.
As regards the CVAE, based on the forecasts provided by the Government and a decrease in value added, the amount of CVAE for 2015 is estimated at 55.18 M€, a fall of 2.1%.
Revenue from TASCOM and IFER increased between 2014 and 2015. MPM should therefore receive an amount of IFER equal to 3.774 M€, which is an increase of 9.7% between 2014 and 2015, derived from electric transformers, radio-electric stations, solar and hydraulic electricity generating stations.
Anticipated TASCOM revenue in 2015 is of 8.369 M€, which is an increase of 2.4% between 2014 and 2015.
As regards the transport payment (VT), the amount in 2013, of 170 M€ (5 M€ more than budgeted for that year), includes extraordinary revenue of 11.9 M€, and the effects of an annual increase of 5% in the tax base (thus confirming its dynamism and the trend that began in 2012). This explains, after adjustment for extraordinary revenue, the estimated figure for VT in 2014 of 166.2 M€.
In 2014, new arrangements were introduced concerning the payment of the VT, which entered into force on 1 July 2014: these payments are now centralised through the ACOSS, meaning that MPM will now receive a half-month of supplemental income (6.8 M€) for 2014.
Reductions in headcount should have the effect of slowing down the increase in the assessment basis compared to the dynamics of previous budgetary years. It is estimated that this income will increase by 2.5% in 2015, producing a total income of 166.738 M€.
As regards the levy on betting revenue (horserace betting), this is assessed on the amount of bets placed on races organised at public racecourses located within the intercommunal boundaries, at a rate of 5.7%. This should bring the urban community a revenue of around €459,000 in 2015.
Changes in TEOM:
The 2004 and 2005 finance laws required steps to harmonise the TEOM rates and to achieve, at the latest by 2015, a zonal rate consistent with the service provided. The principle of TEOM zoning was introduced by a decision of 2 October 2009, and renewed by decisions of 28 March 2011 and 13 February 2012. This provides that by 2014, MPM will continue to bring rates into line and ultimately define homogenous areas in terms of service and rates.A step towards harmonisation of rates was realised in 2013 with the establishment of five "pivotal" rates (8%, 10%, 11.5%, 12.1% and 18.1%).
On 9 October 2014, the community council adopted the final stage in TEOM harmonisation.
Accordingly, three zones have been created in 2015 with the corresponding service provision and TEOM rate: Zone A (Marseille):tax rate of 18.1%; Zone B (Sausset-les-pins Carnoux-en-Provence, Marignane and Roquefort-la- Bédoule): tax rate of 11.5%;
0013112-0000246 PA:15005400.8 77
Zone C (the 13 remaining communes): tax rate of 9.5%.
TEOM revenue should reach the estimated amount of 189.4 M€ which is an increase of 3.8% compared to the revenue budgeted in 2014.
(iii) MPM’s other sources of tax revenue
OTHER SOURCES OF TAX REVENUE OF COMMUNAUTE URBAINE DE MARSEILLE IN MILLIONS OF EUROS "Additional" taxes and equivalent AA 2011 AA 2012 AA 2013 PB+SB 2014 PB 2015 Compensation endowment 96.558 95.157 93.412 92.421 91.381 Intercommunality endowment 95.805 95.782 96.095 91.714 81.317 FNGIR* 17.103 18.935 19.038 21.038 19.038 FPIC** 0 2.342 4.320 6.727 8.873 Additional rolls 12.680 6.085 5.231 4.000 4.000 Development tax 0 0 0.628 7.405 5.000 Local amenities tax 5.753 8.690 5.276 3.800 0 Compensation allocation 0.444 0.447 0.447 0.447 0.447 Participation for non-creation of parking areas 0.710 0.234 0.500 0 0 TOTAL 229.056 227.675 224.447 220.220 210.056 * FNGIR: National individual resources guarantee fund ** FPIC: Intercommunal and Communal equalisation fund
Additional rolls:
Each year, the taxation authorities issue additional rolls that correct omissions or individual anomalies in the general roll of local taxes. These adjustments make it possible to collect additional tax revenue of up to 4 M€ anticipated in 2015 on the basis achieved in 2014.
Endowments:
Financial support of the State has decreased by 15.17 M€ (-6.59%) overall. This change can be explained principally by the following two factors: a decrease in the components that serve as variables in adjusting the standard budgetary envelope (compensation endowment and the single specific professional tax compensatory endowment); and the decrease in the intercommunality endowment, which forms part of the trust and responsibility pact signed between the Government and local authorities on 16 July 2013 which called for the participation of local authorities in restoring the public finances.
Equalisation funds:
The communal block equalisation fund (FPIC), established in 2012 has continued to ramp up as initially anticipated. It will reach 780 M€ in 2015 (+37% compared to 2014), and represent 2% of local authority tax revenue in 2016, an amount of around €1 billion. The FPIC is financed by a levy on the tax revenues of communal block entities which have an aggregate financial potential per inhabitant of greater than 90% of the average aggregate financial potential per inhabitant.
0013112-0000246 PA:15005400.8 78
(b) Budgetary system
(i) Review of the main public finance budgetary principles
The French general local authorities Code (CGCT), together with the accounting classifications applicable to local authorities, set forth the budgetary and accounting principles:
These principles are as follows: The annuality principle requires that the budget is set for a period of 12 months from 1st January to 31st December and that each local authority adopts its budget for the following year prior to 1st January. The law permits a grace period up to 15th April of the year to which the budget applies, or in local assembly election years, 30th April. However, order n° 2005-1027 of 26 August 2005 on the simplification and adaptation of budgetary and accounting rules applicable to local authorities greatly relaxes this principle by extending multi-year mechanisms. The balanced budget principle: this principle means that,based on a fair assessment of revenue and expenditure, revenue must be equal to expenditure, in both the operating (ordinary activities) and investment sections. The principle of unity requires that all revenue and expenditure items appear in a single budgetary document, the community's general budget. However, other budgets, so-called "ancillary" budgets, may supplement the general budget to record the activities of some services. The universality principle implies that all revenue and expenditure operations shall be specified in full and without modification in the budget. This is in addition to the requirement of truth and accuracy of budgetary documents under which expenditure is financed by revenue without distinction. The principle of speciality of expenditure under which an expenditure item is authorised for a particular service and purpose only. Accordingly, funds are allocated to a service, or group of services, and are specialised by chapter grouping together expenditure according to type or purpose.
The principles under which local authority budgets have been prepared are subject to control by the Prefect, in collaboration with the regional audit office (Chambre Régionale des Comptes or CRC).
(ii) Budgetary and accounting instructions
The budgetary and accounting instructions applicable to local authorities and in particular EPCI, differ depending on the relevant local authority. They have all recently been reformed to bring them into line with the general chart of accounts (plan comptable général) of 1982 by applying some of the main principles applicable to companies generally. It is an accrual basis double-entry (corresponding uses and sources of funds) accounting system kept by a Trésor accountant.
(iii) The budgetary framework of local authorities and EPCI with autonomous taxation powers
Local authorities and EPCI have, as legal entities, their own assets and budget. To implement its multiple powers, each local authority and EPCI is legally recognised with financial autonomy.
0013112-0000246 PA:15005400.8 79
This financial autonomy is reflected by the annual voting of its primary budgets ("PB") which specify and authorise revenue and expenditure. Recorded transactions are then entered in the administrative accounts ("AA") voted by the authority. Budgets are prepared by the authority's executive branch.
The budget is a document that specifies and authorises revenue and expenditure. During the course of a year, supplemental budgets ("SB") or rectificatory budgets may be necessary to adjust expenditure and revenue to their actual execution. The form of supplemental budgets is identical to that of the primary budget; in other words including two sections. Funding credits are presented by chapter and item. It thus replicates the primary budget. Although not mandatory since 1982, it is generally adopted around the month of October. The data for the PB 2014, SB 2014 and PB 2015 has been incorporated throughout the prospectus to provide a better overview of the Issuer’s situation in 2014.
The budgets of all local authorities are structured in two sections: the operating section and the investment section:
The operating section includes:
all expenditure necessary for the operation of the authority (general expenditure, payroll, day-to-day management, debt interest, amortization expense, provisions); and
all revenue receivable by the authority, from expenditure transfers, provision of services, Government endowments, taxes and duties, and, if any, reversals of amortisation expense and provisions that the authority has been able to make.
The investment section includes:
in expenditure:repayment of debt and the authority’s equipment expenditure (works in progress, transactions for third parties...); and
in revenue: borrowings,Government endowments and subsidies.
(c) Local financing rules
The CGCT imposes financial constraints on local authorities and EPCI by prohibiting them from borrowing to repay principal on debt.
This restriction, set forth in article L 1612-4 of the CGCT, provides as follows: "The budget of the local authority is in true balance when the operating and investment sections voted are in balance, revenue and expenditure having been assessed truthfully, and when the transfer of revenue from the operating section to the investment section, added to the revenue specific to this section, and excluding revenue from borrowings and allocations to amortisation expense and provisions, provides sufficient funds to cover the repayment of annual loan principal instalments falling due during the year".
6.2 Issuer’s public debt
The following definitions are used in this section: Consolidated debt = Main budget debt + Issuer's ancillary budget(s) debt; Guaranteed consolidated debt = part of Consolidated debt in respect of which the Issuer guarantees the obligations of the entity that incurred the debt in the event of default;
0013112-0000246 PA:15005400.8 80
Annuities = Debt interest payments + repayment of principal on the debt; Total annuities relating to social housing or the "SDIS" (Departmental Fire and Emergency Service) = Part of total annuities relating to guarantees granted to satellite entities in connection with loans granted for the construction of social housing; Contractual debt = the debt of member communes transferred to the Issuer upon creation of the urban community; Debt currency = €.
(a) Historical consolidated debt of the Issuer (all budgets combined)
Historical consolidated debt of the Issuer in millions of euros 2002 300.36 2003 312.59 2004 488.02 2005 828.54 2006 1 123.00 2007 1 262.94 2008 1 386.51 2009 1 448.94 2010 1 466.57 2011 1 373.62 2012 1 474.53 2013 1 534.50 2014 1 544.80 2015 1 600.31
Changes in outstanding debt 1600
1400
) 1200 € 1000 800 600
Outstanding(K 400 200 0 2002 2004 2006 2008 2010 2012 2014 Year
MPM’s outstanding debt is estimated at 1.6 billion euros in 2014. Two main factors explain this increase: first, the realisation of major investment projects within the community's boundaries which have required it to incur indebtedness. Investments (249 M€ on average over the period 2011-2013) were financed essentially (64%) through borrowing. The second explanatory factor is the low level of financial contribution by external sources (Government, département, région).
0013112-0000246 PA:15005400.8 81
(b) Consolidated debt annuities
Consolidated debt annuities in millions of euros
Consolidated debt Direct debt annuity Contractual debt Total debt annuity annuities AA 2011 103.074 14.41 117.485 AA 2012 127.166 11.371 138.538 AA 2013 132.994 9.816 142.810 PB + SB 2014 129.369 8.078 137.447 PB 2015 142.158 4.004 146.162
(c) Guaranteed consolidated debt*
Guaranteed consolidated debt in millions of euros*
Interest Principal Annuity AA 2011 0.367 2.587 2.955 AA 2012 0.092 1.833 1.925 AA 2013 1.759 1.199 2.958 PB + SB 2014 1.710 1.248 2.958 PB 2015 1.262 1.688 2.95 *The Communauté Urbaine Marseille Provence Métropole has no social housing debt as at 1st January 2015.
(d) Additional consolidated debt indicator
The average rate is calculated on the basis of the following rates: variable rate loans = the daily rate on the data extraction date; for loans at a post-fixed rate (or other rates not known on the relevant date) = the anticipated daily rate; and for fixed rate loans = the fixed rate, each such rate being calculated on an actual/actual (i.e. 365/365) basis.
Average life (AL): This refers to the average rate of repayment of a loan (expressed in years). The average life is the time necessary to repay half of the outstanding principal amount of the debt, through amortisation. AL = sum of (Pi x i) / sum of Pi where: Pi represents the principal amortised in i-th year;
Residual life (expressed in years) is the time remaining before repayment in full of a debt or loan;
Debt repayment capacity (DRC) is the main solvency ratio. It measures the following ratio: Outstanding debt / Gross savings. The debt repayment capacity (expressed in years) means the time necessary to repay outstanding debt in full using the entire amount of all savings generated;
0013112-0000246 PA:15005400.8 82
Debts with Debt Average Average rate Average residual life of repayment Main Budget residual life (%) life(years) < 1 year (in capacity (in (years) euros) years) AA 2011 3.59 10.33 19.83 75 477 297 11.23 AA 2012 3.21 10.5 18.1 73 073 16.72 AA 2013 3.3 10.41 18 152 858.71 21.02 PB+SB 2014 3.23 10.5 18 1 633 669.37 16.17 PB 2015 2.73 10.25 17 6 537 589.65 15
(e) Outstanding debt per budget of the Issuer
Outstanding debt per budget at 31/12 (in millions of euros) Outstanding debt 2011 2012 2013 2014 2015 Main budget 819.537 858.367 950.24 950.16 979.80 Waste collection and treatment budget 62.225 66.686 69.6 69.58 76.55 Transport budget 312.438 363.572 324.92 335.415 355.85 Sewage and sanitation budget 150.821 147.206 152.49 152.49 145.89 Water budget 21.69 18.862 8.59 8.57 6.90 Ports budget 6.902 8.512 11.09 11.08 12.39 Development operations budget 0 11.319 17.62 17.62 22.90 Total 1 373.61 1 474.53 1 534.54 1 544.92 1 600.28
0013112-0000246 PA:15005400.8 83
Distribution of borrowing per budget in 2015 1% 1% 1% Principal budget
9% Waste collection and treatment budget Transport budget
22% Sewage and sanitation budget
Water budget 61%
5% Ports budget
Development operations budget
The main budget and the ancillary Waste Collection and Treatment, Ports and Development Operations budgets have outstanding debts that fluctuate with the level of investments made.
In contrast, there has been a decrease in outstanding debt under the Water budget in particular between 2012 and 2013. This decrease can be explained by the transfer of a loan in an amount of 7.50 M€ to the "Sewage and Sanitation" ancillary budget on 31/12/2013. The decrease in outstanding debt under the Transport ancillary budget between 2012 and 2013 is due to the transfer of a loan to the RTM in connection with an assets and liabilities exchange under the new public service obligations contract that entered into force on 1 January 2011. The principal amount of the loan transferred on 31/12/2012 was 43.035 M€.
0013112-0000246 PA:15005400.8 84
(f) Gissler Charter
The process of preparation of the "Best Practices Framework" as requested by the Government was completed on 7 December 2009 with the signing of a best practices Charter (the "Gissler Charter") between: the four partner banks (foreign banks -Depfa, RBS… - that had sold structured products did not sign the Charter); the associations of elected officials representing the communes and groupings of communes (neither the Association des Départements de France – ADF –, nor the Association des Régions de France – ARF – have as yet wished to become signatories).
Contents of the Charter
The Charter contains six commitments (four by the banks and two by the local authorities). The aim of the first two commitments is to set limits in terms of "product" risk. The signatory banks agree not to offer local authorities products based on certain high risk indices (for example, exclusion of financial products linked to certain indices, such as indices relating to commodities, equities, currencies, etc.) and snowball-type products. The aim of the third commitment is to promote clearer presentation and comparability of products offered by requiring banks to present their products in a common classification matrix (including rankings of risk by reference to the underlying indices and of product structure by level of complexity). The fourth commitment is to define the formal content of commercial offers.
The signatory banks, while recognising that local authorities are not financial professionals, undertake to provide commercial information that is as clear as possible together with analysis on product structures and underlying indices, stress scenarios, and valuations of derivative products as at 31 December in year N-1 during the first quarter of year N.
The fifth and six commitments are undertakings on the part of local authorities: their aim is to improve the information provided by the executive branch of the deliberative assembly and to ensure greater transparency, as regards the elected officials, of decisions taken by the executive (with, in particular, a presentation by the executive of an annual report on the local authority's debt management policy).
With the benefit of the table presented below, it can be seen that 94.74% of the Communauté Urbaine Marseille Provence Métropole’s outstanding debt falls within category A1 of the Gissler scale, which is the lowest risk debt category: fixed rate, simple variable rate in particular, all denominated in €. Conversely, 1.85% of the Communauté Urbaine Marseille Provence Métropole’s outstanding debt falls outside the Charter, and concerns one single loan agreement indexed to the EUR/CHF exchange rate, the outstanding principal amount of which as at 01/01/2015 amounts to 25 336 444.55 €.
0013112-0000246 PA:15005400.8 85
IV-APPENDICES IV BALANCE SHEET ITEMS – STATUS OF DEBT as at 1st January 2015 (PB 2015) A1.4 DISTRIBUTION OF CONSOLIDATED OUTSTANDING DEBT (BY TYPE) (i.e. all budgets combined)
Structures (2) (4) French or Non-Eurozone (3) (5) (1) Eurozone indices and index (6) Euro-zone Non Euro- Underlying indices Euro inflation indices spreads one of Other index zone index indices or spreads which indices is a indices spreads spreads between such non Euro-zone indices index (A) Plain vanilla fixed rate; plain Number of 172 1 - - - - vanilla floating rate; Fixed-for- products floating rate swap or vice versa. % of 94.86% 1.66 % - - - - Structured-for-fixed / floating rate indebted- swap (one-way). Plain vanilla floating ness rate with cap / tunnel Amount in 1 517 990 26 642 394.80€ - - - - 697.62 € euros (B) Plain vanilla barrier. No leverage Number of - 1 - - - - products % of - 1.90% - - - - indebted- ness Amount in - 30 344 827.62 € - - - - euros (C) Swaption Number of - - - - - products % of - - - - - indebted- ness Amount in - - - - - euros (D) Multiplier up to 3; multiplier up Number of ------to 5 capped products % of ------indebted- ness Amount in ------euros (E) Multiplier up to 5 Number of ------products % of ------indebted- ness Amount in ------euros (F) Other types of structure Number of - - - - - 1 products % of - - - - - 1.58% indebted- ness Amount in - - - - - 25 336 euros 444.55
0013112-0000246 PA:15005400.8 86
Typology of Debt in 2015
2% 2% 1%
A1 A2 B2 other indices 95%
(g) Changes in structure of consolidated debt
Structured rate loans are loans whose interest-rate is defined by reference to a formula that may include an option mechanism. This type of loan may include a hedging arrangement, involving the payment of a premium or rate surcharge or discount, in consideration of acceptance by the local authority of a risk of loss as a result of index level fluctuations. Structured loans such as spread products, simple or knock-out barrier products are examples of this.
The structured loans figuring in the diagrams below in the column "structured rate" form a generic category that includes all types of structured products, including fixed rate products which involve less risk.
Distribution of outstanding Debt of Communauté
1,000.00 Urbaine de Marseille 900.00 800.00
700.00
) 31/12/2011 € 600.00 31/12/2012 500.00 31/12/2013
400.00 Volume(M 300.00 200.00 100.00 - Fixed Rate Variable Rate Off-Charter Loans Type of rate
0013112-0000246 PA:15005400.8 87
Distribution of outstanding Debt of Communauté Urbaine de Marseille 1,000.00 900.00
800.00
) 700.00 € 600.00 500.00 PB 2014 400.00
Volume(M 300.00 PB 2015 200.00 100.00 - Fixed Rate Variable Rate Off-Charter Loans Type of rate
6.3 Issuer’s financial situation and resources
Article 26 of the organic finance law n° 2001-692 of 1st August 2001 (LOLF) provides that "unless expressly provided otherwise in a finance law, local authorities and their public establishments are obliged to deposit all of their available funds with the Trésor".
The purpose of active treasury management is to decrease the opportunity cost resulting from the inability to invest in available funds. For this purpose, the balance on the Trésor account must be as low as possible. To face their financing needs, local authorities use credit lines they use gradually during their expenditures.
Once drawn upon, the credit line will top up the Trésor current account to cover the day’s expenditure. In practice this policy requires a close collaboration between the instructing party and the public auditor. The public auditor determines each day's anticipated deposits and disbursements.Any gap between revenue and expenditure is covered by drawdown or repayment, as the case may be, of the credit line.
Due to the lack of daily data on operation of the credit line, it is not possible to give a complete assessment of the impact of active treasury management.
6.4 The Issuer’s budget
For an overview of the Issuer's financial situation, the following are presented for each of them: expenditure and revenue for the investment and operating sections (for the administrative accounts and primary budgets); self-financing; and year-end results.
These accounting items are presented on a consolidated (main and ancillary budget) basis by reference to the administrative accounts voted by the Issuer (excluding double flows), for the financial years 2011 and 2012, and on the primary budget and any supplemental budget for 2013 and 2014.
0013112-0000246 PA:15005400.8 88
Remarks: The accounting classifications applicable to urban communities describe transactions between the investment and operating sections which do not constitute actual disbursements.These transactions, known as "for-order transactions", are ignored for the purposes of financial analysis. The total excluding for-order transactions is clearly indicated in the ‘Balance’ table below. Data is presented in Euros, unless specified otherwise.
0013112-0000246 PA:15005400.8 89
Budget Balance of the Communauté Urbaine Marseille Provence Métropole
Communauté Urbaine Expenditure:
Consolidated Data 2011, 2012, 2013, 2014 and 2015 in millions of euros
Investment Expenditure AA 2011 AA 2012 AA2013 PB+SB 2014 PB 2015 Equipment expenditure (20 + 204 + 21 to 23) 209.89 262.62 275.87 394.11 336.46 16 - Loan repayments (excluding lines 165 and 16449) 75.64 87.2 98.04 91.92 95.12 Other financial expenditure (10 + 165 + 13 + 27) ex Credit Line 0.63 0.15 0.82 5.46 4.25 45 – Transactions for third parties 4.43 11.02 22.82 5.93 3.09 Actual investment expenditure - (1) 290.59 360.99 397.55 497.42 436.21 Total for-order expenditure (excl. asset transactions) - (2) 4.81 126.27 27.01 17.95 22.38 040- Transfers between sections 4.81 126.27 27.01 17.95 22.38 Prior deficit carried forward - (3) 161.08 16.22 0 36.57 0 Investment Expenditure Overall Total (1)+(2)+(3) 456.48 503.48 424.56 551.94 458.6
Operating Expenditure AA 2011 AA 2012 AA2013 PB+SB 2014 PB 2015 Management expenditure 926.89 965.69 996.42 1 037.64 1 036.17 011 – General expenses 510.21 540.91 563.85 593.39 592.56 012 – Payroll and similar expenses 170.26 175.4 180.91 188.35 190.59 014 – Income mitigation 209.72 210.51 210.8 212.51 210.09 65 – Other ordinary management expenses 36.7 38.87 40.86 43.39 42.93 Financial expenditure 47.9 69.99 50.37 59.69 60.81 66 – Finance costs 42.07 51.34 43.95 47.47 52.43 67 – Extraordinary expenses 5.83 18.65 6.42 12.22 8.38 Actual operating expenditure (1) 974.79 1035.68 1 046.79 1 097.33 1 096.98 Total for-order expenditure (2) 67.07 77.71 99.29 200.14 134.75 042 – For-order transactions between sections 67.07 77.52 99.29 108.83 111.39 023 – Transfer to investment section 0 0 0 91.31 23.36 043 – For-order transactions within the section 0 0.19 0 0 0 Operating Expenditure Overall Total (1)+(2) 1041.86 1113.37 1 146.57 1 298.18 1 231.73
The budget consolidation shown above, includes the main budget and the ancillary budgets "Waste Collection and Treatment", "Transport", "Sewage and Sanitation", "Water", "Leisure Ports" and "Crematorium and funerary services". The following are excluded:
the "market of national interest (MIN)" ancillary budget: the site returned temporarily to direct management on the expiry of the previous lease contract in August 2012 and the aim of current analysis is to set out a development programme and define the scope of the future contract. This new contract will ensure the ancillary "MIN" budget is in balance; and
the "Development Operations" ancillary budget, which records in the inventory account the financial movements linked to development activities carried out by MPM.
0013112-0000246 PA:15005400.8 90
Communauté Urbaine Revenue:
Consolidated data 2011, 2012, 2013, 2014 and 2015 in millions of euros
Investment Revenue AA 2011 AA 2012 AA 2013 PB+SB 2014 PB 2015 Equipment revenue (1) 154.43 228.81 248.57 260.35 311.34 13 – Investment subsidies 38.95 47.75 62.86 93.64 95.42 16 – Borrowings and debt (excl. lines 165 and 16449) 115.36 179.78 185.05 166.71 215.92* 20 + 23 Intangible fixed assets + current assets 0.12 1.28 0.66 0 0.84 Financial revenue (2) 2.91 8.48 9.41 11.57 2.17 45 – Transactions on behalf of third parties 2.91 8.48 9.41 11.57 2.17 Other financial revenue (ex credit line transactions) (3) 193.44 65.43 84.63 79.16 39.81 1068 – Capitalised operating surplus 129.86 26.62 52.95 36.66 0 Other financial revenue (FCTVA, TLE…) 63.58 38.81 31.68 42.5 39.81 Actual investment revenue 350.78 302.72 342.61 351.08 353.32 For-order revenue 67.07 77.52 99.29 108.84 111.39 040 – For-order transactions between sections 67.07 77.52 99.29 108.84 111.39 Investment Revenue Overall Total 417.85 380.24 441.9 459.92 464.71 *incl. 26 M€ of unrealised expenditure for 2014 in the transport ancillary budget.
Operating Revenue AA 2011 AA 2012 AA2013 PB+SB 2014 PB 2015 Management revenue 1 074.82 1 105.64 1 158.54 1 170.81 1 198.75 013 – Expense mitigation 3.4 2.95 3.1 3.02 2.99 70 – Revenue from services, land and sales 183.44 189.3 199.6 173.01 201.66 73 – Taxes and duties 638.05 670.42 713.61 751.14 765.5 74 - Endowments, participations and subsidies 232.58 229.61 230.67 225.05 210.16 75 – Other ordinary management revenue 17.35 13.36 11.56 18.59 18.44 Financial and extraordinary income 15.76 12.17 14.11 16.81 4.52 76 – Financial income 1.35 1.92 0.1 0.08 0 77 – Extraordinary income 14.41 10.25 14.01 16.73 4.52 Actual operating revenue (1) 1 090.58 1 117.81 1 172.65 1 187.62 1 203.27 Total for-order revenue (2) 4.81 16.99 27.02 17.96 22.38 042 – For-order transactions between sections 4.81 16.99 27.02 17.96 22.38 002 - Result carried forward (Item only for Primary 0 0 0 93.03 6.53 Budget) (3) Operating Revenue Overall Total (1)+(2)+(3) 1 095.39 1 134.80 1 199.67 1 298.61 1 232.18
As for expenditure, the same consolidation method is used to restate operating and investment revenue.
0013112-0000246 PA:15005400.8 91
BUDGETARY DATA AA 2011, AA 2012 AND AA 2013 IN MILLIONS OF EUROS
AA 2011 AA 2012 AA 2013 Expenditure Revenue Expenditure Revenue Expenditure Revenue Main Budget 809.71 926.56 751.20 822.39 813.75 903.02 Operating 458.32 583.19 477.29 605.59 532.51 613.16 Investment 351.39 343.38 273.91 216.80 281.24 289.86 Waste Collection and Treatment 195.09 188.44 225.37 217.07 199.12 219.83 Budget Operating 180.01 182.88 199.96 191.66 182.62 209.54 Investment 15.08 6.88 25.41 25.41 16.50 10.29 Transport Budget 401.07 270.77 401.07 310.02 404.36 394.46 Operating 350.23 257.57 376.95 267.46 353.94 366.54 Investment 50.84 13.20 52.45 87.52 50.42 27.92 Sewage and Sanitation Budget 29.77 67.11 58.53 66.58 51.59 63.92 Operating 29.77 42.31 32.42 37.58 25.30 41.88 Investment . 24.81 26.11 29.00 26.29 22.05 Water Budget 28.38 45.79 30.35 37.61 27.42 23.61 Operating 14.95 20.57 16.94 22.65 7.29 20.45 Investment 13.43 25.22 13.41 14.96 20.13 3.17 Ports Budget 10.23 11.67 11.53 12.51 10.18 9.88 Operating 7.45 7.46 7.97 7.19 7.56 7.07 Investment 2.78 4.21 3.56 5.32 2.62 2.81 Market of National Interest 0.40 0.38 0.75 0.82 1.10 1.04 Budget Operating 0.40 0.31 0.75 0.75 1.00 1.03 Investment - 0.07 0.00 0.07 0.09 0.02 Crematorium Budget 2.46 1.51 2.90 3.78 1.36 3.39 Operating 1.31 1.36 1.35 2.57 0.93 1.91 Investment 1.15 0.14 1.56 1.21 0.43 1.48 Development Budget 23.60 14.42 24.64 33.89 7.69 24.84 Operating 12.89 12.24 13.33 13.34 6.98 17.83 Investment 10.71 2.19 11.30 20.55 0.71 7.01
0013112-0000246 PA:15005400.8 92
BUDGETARY DATA PB+SB 2014 AND PB 2015 IN MILLIONS OF EUROS
PB+SB 2014 PB 2015 Expenditure Revenue Expenditure Revenue Main Budget 946.78 889.98 937.18 937.18 Operating 603.05 653.88 601.06 657.09 Investment 343.74 236.10 336.12 280.09 Waste Collection and Treatment Budget 241.10 235.21 230.13 230.13 Operating 212.26 215.03 211.38 220.01 Investment 28.84 20.18 18.74 10.12 Transport Budget 492.21 497.17 500.67 500.67 Operating 376.24 396.51 383.19 398.96 Investment 115.97 100.65 117.48 101.71 Sewage and Sanitation Budget 41.30 39.42 36.40 29.08 Operating 15.75 21.90 15.16 20.29 Investment 25.55 17.52 21.24 8.79 Water Budget 30.86 33.74 30.08 30.08 Operating 11.71 25.64 10.76 29.98 Investment 19.15 8.10 19.32 0.10 Ports Budget 12.30 12.57 12.25 12.25 Operating 8.46 8.69 8.99 9.60 Investment 3.84 3.88 3.26 2.65 Market of National Interest Budget 1.98 1.96 1.37 1.37 Operating 1.62 1.89 1.28 1.37 Investment 0.36 0.07 0.09 0 Crematorium Budget 1.87 1.75 1.54 1.54 Operating 1.23 1.50 1.07 1.54 Investment 0.63 0.25 0.47 0 Development Budget 20.52 20.73 27.42 27.42 Operating 19.81 0.21 26.70 - Investment 0.71 20.52 0.72 27.42
6.5 Audit and control procedures applicable to the Issuer’s accounts
The law n° 82-213 of 2 March 1982 abolished all upstream control of acts of local authorities. The budgets voted by local authorities are henceforth automatically effective and enforceable upon publication and notification to the Prefect, the representative of the State in the département.
Budgetary acts of local authorities are subject to two ex post facto control mechanisms: as administrative acts, they are subject to control of legality under the general law; as budgetary acts, they are subject to special budgetary, jurisdictional and management control procedures conducted by the regional audit offices (chambres régionales des comptes).
(a) Laws applicable to the Issuer
The legislative and regulatory framework applicable to the Issuer is set out in: the CGCT; the Public Accounting General Rules (RGCP 1962); the Finance Laws;
0013112-0000246 PA:15005400.8 93
applicable accounting instructions: . M14: accounts of communes and EPCI; . M4: accounts of Local Industrial and Commercial Public Services (SPIC). This comprises several separate classifications, including M43 which sets the framework for SMTC (accounts of local urban public transport services). The codifying instruction n°11-022-M0 of 16 December 2011 on the collection of revenue of local authorities and local public institutions.
(b) Control by the Public Auditor
The public auditor executes financial transactions and keeps management accounts in which all of the local authority's revenue and expenditure are recorded.
He verifies that expenditure is recorded in the correct budgetary chapter and that the source of all revenue is legal. He has no power to verify appropriateness. Indeed he may not judge the appropriateness of political choices made by local authorities since they are administratively autonomous. Otherwise, the instructing party (ordonnateur) may "require" the public auditor, in other words oblige him to make a payment.
If the public auditor uncovers an unlawful act, he rejects the payment decided by the instructing party.
Public auditors are personally and financially liable for payments that they make. If a problem arises, the Finance Minister can issue a reversal order that forces the public auditor to pay the relevant sum immediately out of his own pocket.
These provisions from chapter VII of the single section in book VI of part one of the CGCT concerning the public auditor, apply to EPCI.
(c) Prefect’s control of legality
Article L. 2131-6 of the CGCT1 provides that the Prefect shall refer to the administrative Tribunal acts which it considers to be unlawful within two months of their notification to the Préfecture. Control of legality relates to the manner of preparation, adoption or presentation of budgetary and ancillary documents.
The provisions of the CGCT relating to control of legality and the enforceability of acts of communes, départements and régions also apply to EPCI in accordance with article L. 5211-3 of the CGCT.
(d) The role of the regional audit office (Chambre Régionale des Comptes)
The law n° 82-213 of 2 March 1982 established regional audit offices (chambres régionales des comptes or "CRC"), run by magistrates appointed for life: this is the quid pro quo of the abolition of State supervision of local authority acts which previously involved upstream control of their acts. The powers of the CRC are defined by law and have been codified under articles L.211-1 et seq. of the French financial jurisdictions Code.
The powers of the CRC extend to all local authorities within its geographical jurisdiction, whether communes, départements or régions, and also to their public establishments (including EPCI).
1 This article applies to communes. Similar provisions apply to départements (article L.3132-1 of the CGCT) and régions (article L.4142-1 of the CGCT).
0013112-0000246 PA:15005400.8 94
CRC are invested with triple powers of control. First, budgetary control, which replaced that exercised by the Prefect prior to the law n° 82-213 of 2 March 1982. Secondly, jurisdictional control whose purpose is to ensure the regularity of transactions actioned by the public auditor. Thirdly, management control the purpose of which is to control the regularity of a commune's revenue and expenditure.
Budgetary control
Pursuant to articles L. 1612-2 et seq. of the CGCT, the CRC controls the primary budget, amending decisions and the administrative account.
The CRC may act in four situations: where the primary budget is adopted out of time (after 31 March, except in deliberative assembly election years, where the period is extended to 15 April), after a 15 calendar day period for transmission, the Prefect must instruct the CRC which shall formulate its proposals within one month; if the approved budget is not in true balance (revenue not equal to expenditure), three monthly periods are triggered: one month for the Prefect to instruct the CRC, one month for the CRC to formulate its proposals, a third month for the deliberative asssembly of the local authority to rectify the situation, failing which the Prefect settles the budget itself; if a mandatory expense is not entered in the budget, the same time periods apply but the CRC, which may also be instructed by the public auditor, issues a formal notice to the local authority in question; and lastly, when execution of the budget is in deficit (where the sum of the results of the two sections of the administrative account is negative) by more than 5% or 10% of operating section revenue, depending on the size of the local authority, the CRC proposes restorative measures within a period of one month from the date of its instruction. Furthermore, it approves the primary budget for the following financial year.
Jurisdictional control
The CRC controls all accounts of the public auditors of local authorities and their public establishments. This jurisdictional control was the original purpose of the CRC. The purpose is to control the regularity of transactions carried out by public auditors. It involves verifying not only that the accounts are regular, but above all that the public auditor has properly carried out all of the controls that it is obliged to perform. Conversely, the law n° 2001-1248 of 21 December 2001 on CRCs and the public accounts court (Cour des Comptes) prohibits any control of appropriateness. The CRC by its judgements determines and recognises the accuracy of the accounts, whether or not irregularities have been found.
Management control
CRCs also have a duty to control the management of local authorities. The purpose of this control is to verify the regularity and quality of their management.It concerns not only the financial equilibrium of management operations and the methods chosen for their implementation, but also the results achieved by reference to such methods and the results of measures undertaken. CRCs judge the regularity of management operations and the financial soundness of the methods used, and not the appropriateness of the actions taken by local authorities. CRCs aim above all to help and encourage local authorities to comply with the law toavoid any penalties.
0013112-0000246 PA:15005400.8 95
Impact of CRC observation letters
Observation letters raise three major areas of consideration: balanced use of public finances; controlled management of public services; and compliance with the broad principles of the civil service.
This function may however not be fit for purpose because CRCs issue their final observation letters two to five years after the budgetary year-end. These letters are available to any citizen requesting a copy.
New forms of control
The way CRC’s operate has changed.
The law n° 88-13 of 5 January 1988 on improving decentralisation imposed a preliminary interview between the reporting magistrate and the head of the local authority at the time of the control, but also with those responsible of the control during the period indicated. These provisions are aimed at improving external controls (consistent practices throughout the country, confidentiality).
CRCs pay particular attention to the verification of the public policy effectiveness. While it is not their role to form opinions on the local authorities's decisions, they ensure that these authorities have implemented an organised structure with clear objectives, providing services aand a system of monitoring and control using management dashboards to evaluate the measures implemented.
7. DISPUTES
During the normal course of its activities, the Issuer is involved in a number of judicial, governmental, arbitration and administrative proceedings. Such disputes are not material, regarding the Issuer’s budget, and are usual for all entities employing staff or owning assets. The issues raised by disputes in which the Communauté Urbaine is currently involved do not require any particular comment.
0013112-0000246 PA:15005400.8 96
TAXATION
The following is a limited presentation of certain tax considerations concerning withholding tax applicable in France and in European Union to payments in respect of Notes made to any Noteholder.
Prospective investors' attention is drawn to the fact that the comments below are simply a summary of the applicable tax regime, based on French and European tax laws currently in force, and are subject to modification. Such summary is provided by way of general information and does not purport to be a comprehensive analysis of all tax considerations that may be relevant to holders of Notes. It is therefore recommended that prospective investors should consult with their usual tax adviser to examine their individual circumstances in detail.
1. EUROPEAN UNION DIRECTIVE ON THE TAXATION OF SAVINGS INCOME
Pursuant to the Council Directive 2003/48/EC on the taxation of savings income (the Savings Directive) Member States are obliged to provide to the tax authorities of other Member States detailed information on payments of interest or similar income made or attributed by any person established in a Member State to or for the benefit of a natural person resident in another Member State or to certain limited types of entity established in another Member State.
During a transitional period, Austria is obliged (unless during such period it decides otherwise) to apply a withholding tax system concerning such payments. The ending of this transitional period depends on the signing of certain other accords relating to the exchange of information with certain other countries. Several countries and territories outside the European Union, including Switzerland, have adopted similar measures (a withholding tax system in the case of Switzerland).
On 24 March 2014, the Council of the European Union adopted a directive (the Amending Directive) amending and widening the scope of the obligations described above. The Amending Directive imposes to Member States to apply these new obligations as from 1 January 2017 and, if they were taking effects, the amendments would widen the scope of payments covered by the Savings Directive, in particular by including certain additional types of income derived from securities. The Amending Directive would also widen the circumstances under which payments which indirectly benefit a physical person resident in a Member State must be disclosed or subject to withholding taxes. This approach could apply to payments made or attributed for the benefit of, or by, persons, entities or legal structures (including trusts), where certain conditions are met, and may, in certain circumstances, apply where the person, entity or structure is established or effectively managed outside the European Union.
However, the European Commission has proposed the abolition of the Savings Directive as from the 1st January 2017 for Austria, and as from the 1st January 2016 for the other Member States (providing that they continue to comply with certain administrative obligations such as communication and exchange of information relating to payments made before those dates and the related withholding taxes). This provision has as object to prevent any redundancy between the Savings Directive and the new regime of automatic exchange of information, that should be implemented in application of the Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation (as amended by the Council Directive 2014/107/EU). The proposal provides that, if it is implemented, Member States will not be required to apply new obligations provided by the Amending Directive.
0013112-0000246 PA:15005400.8 97
2. FRANCE
2.1 Implementation of the Savings Directive in France
The Savings Directive was transposed into French law under article 242 ter of the French Code général des impôts and articles 49 I ter to 49 I sexies of Annex III to the Code général des impôts. Article 242 ter of the Code général des impôts requires paying agents located in France to provide to the French tax authorities certain information in relation to interest paid to beneficial owners domiciled in another Member State and in particular the identity and address of the beneficial owner of such interest and a detailed list of the interests paid to such beneficial owners.
2.2 Withholding tax in France
The payments of interest and other revenues made by the Issuer with respect to Notes are not subject to the withholding tax set out under article 125 A III of the French Code général des impôts, unless such payments are made outside France in a non-cooperative State or territory within the meaning of article 238-0 A of the Code général des impôts (a Non-Cooperative State). If such payments under the Notes are made in a Non-Cooperative State, a 75% withholding tax will be applicable (subject to certain exceptions and to the more favourable provisions of any applicable double taxation treaty) by virtue of article 125 A III of the Code général des impôts.
Notwithstanding the foregoing, the 75% withholding shall not apply in respect of an issue of Notes if the Issuer can prove that the principal purpose and effect of such issue of Notes was not that of allowing the payments of interest or other revenues to be made in a Non-Cooperative State (the Exception).
Pursuant to the Bulletin Officiel des Finances Publiques – Impôts BOI-INT-DG-20-50-20140211, BOI-RPPM-RCM-30-10-20-40-20140211 and BOI-IR-DOMIC-10-20-20-60-20150320, an issue of Notes will benefit from the Exception without the Issuer having to provide any proof of the purpose and effect of such issue of Notes, if such Notes are:
(a) offered by means of a public offer of financial securities within the meaning of article L.411- 1 of the French Code monétaire et financier or pursuant to an equivalent offer in a State other than a Non-Cooperative State. For this purpose, an "equivalent offer" means any offer requiring the registration or filing of an offer document with a foreign securities market authority; or
(b) admitted to trading on a regulated market or on a French or foreign multilateral securities trading system provided that such market or system is not located in a Non-Cooperative State, and the operation of such market is carried out by a market operator or an investment services provider, or by such other similar foreign entity, provided further that such market operator, investment services provider or entity is not located in a Non-Cooperative State; or
(c) admitted, at the time of their issue, to the clearing operations of a central depositary or of a securities clearing and delivery and payments systems operator within the meaning of article L.561-2 of the French Code monétaire et financier, or of one or more similar foreign depositaries or operators provided that such depositary or operator is not located in a Non- Cooperative State.
0013112-0000246 PA:15005400.8 98
Pursuant to article 125 A of the General Tax Code, subject to certain limited exceptions, interest and assimilated revenues received by individuals who are fiscally domiciled (domiciliés fiscalement) in France are subject to a 24% withholding tax, which is deductible from their personal income tax liability in respect of the year in which the payment has been made. Social contributions (CSG, CRDS and other related contributions) are also levied by way of withholding tax at an aggregate rate of 15.5% on interests and assimilated revenues paid to individuals who are fiscally domiciled (domiciliés fiscalement) in France.
0013112-0000246 PA:15005400.8 99
SUBSCRIPTION AND SALE
Subject to the terms and conditions contained in a French language dealer agreement dated 16 June 2015 entered into between the Issuer, the Permanent Dealers and the Arranger (the Dealer Agreement), the Notes will be offered by the Issuer to the Permanent Dealers. However, the Issuer reserves the right to sell Notes directly on its own behalf to Dealers that are not Permanent Dealers. The Notes may be resold at prevailing market prices, or at prices related thereto, at the time of such resale, as determined by the relevant Dealer. The Notes may also be sold by the Issuer through the Dealers, acting as agents of the Issuer. The Dealer Agreement also provides for Notes to be issued in syndicated Tranches that are jointly and severally underwritten by two or more Dealers.
The Issuer will pay each relevant Dealer a commission as agreed between themselves in respect of Notes subscribed by such Dealer. If appropriate, the commissions in respect of an issue of Notes on a syndicated basis will be specified in the applicable Final Terms. The Issuer has agreed to reimburse the Arranger for the expenses incurred by them in connection with the establishement of the Programme and the Dealers for certain expenses in relation to their role under this Programme.
The Issuer has agreed to indemnify the Dealers against certain types of liability it may incur in connection with the offer and sale of Notes. The Dealer Agreement entitles the Dealers, under certain circumstances, to terminate any agreement they may enter into for the subscription of Notes prior to payment for such Notes being made to the Issuer.
1. GENERAL
These selling restrictions may be amended by mutual agreement between the Issuer and the Dealers in particular following any change to any applicable law, regulation or directive. Any such amendments shall be set out in a supplement to this Base Prospectus.
Each Dealer has undertaken to comply, to the fullest extent of the information in its possession, with all relevant laws, regulations and directives in each country in which it buys, offers, sells or delivers Notes or in which it holds or distributes the Base Prospectus, any other offer document or any Final Terms and neither the Issuer nor any of the Dealers shall incur any liability in respect thereof.
2. UNITED STATES OF AMERICA
The Notes have not and will not be registered pursuant to the US Securities Act. Subject to certain exceptions, Notes may not be offered or sold or, in the case of Materialised Notes, delivered in the territory of the United States of America. Each Dealer has undertaken and each new Dealer will be required to undertake, not to offer or sell any Note, or in the case of bearer Materialised Notes, to deliver such Notes in the territory of the United States of America except in compliance with the Dealer Agreement. The Notes will be offered and sold outside the United States in compliance with Regulation S.
Bearer Materialised Notes with a maturity of greater than one year are subject to US tax rules and may not be offered, sold or delivered in the territory of the United States of America or any of its possessions or to U.S. Persons, with the exception of certain transactions which are permitted under US tax laws. Terms used in this paragraph shall have the meaning given to them in the U.S. Internal Revenue Code of 1986 and regulations made thereunder.
In addition, the offering or sale by any Dealer (whether or not participating in the offering) of any identifiable tranche of Notes within the United States of America within the first forty (40) calendar days after the commencement of the offering, may violate the registration requirements under the US Securities Act.
0013112-0000246 PA:15005400.8 100
3. UNITED KINGDOM
Each Dealer has represented and agreed and each new Dealer will be required to represent and agree that:
(a) in relation to any Notes having a maturity of less than one year, (i) it is a person whose ordinary activities involve acquiring, holding, managing or selling financial products (as principal or agent) for the purposes of its business and (ii) it has not offered or sold and will not offer or sell any Notes to persons in the United Kingdom, other than to persons whose ordinary activities involve acquiring, holding, managing or selling financial products (as principal or agent) for the purposes of their business or to persons who may reasonably be expected to acquire, hold, manage or sell financial products (as principal or agent) for the purposes of their business, where the issue of the Notes would otherwise constitute a violation of Section 19 of the Financial Services and Markets Act 2000 (the FSMA);
(b) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any Notes in circumstances in which Section 21(1) of the FSMA does not and will not apply to the Issuer; and
(c) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Notes in, from or otherwise involving the United Kingdom.
4. ITALY
This Base Prospectus has not been and shall not be published in the Republic of Italy in connection with the offering of Notes. The offering of Notes has not been registered with the Commissione Nazionale per le Società e la Borsa (the Consob) in the Republic of Italy in accordance with the Legislative Decree No. 58 of 24 February 1998 as amended (the Financial Services Law) and the Consob regulation No. 11971 of 14 May 1999 as amended (the Issuer Regulation) and, accordingly, the Notes may not be and shall not be, offered, sold or delivered, directly or indirectly, in the Republic of Italy in connection with an offer to the public, and no copy of this Base Prospectus, the applicable Final Terms or any other document relating to the Notes may be, nor shall be, distributed in the Republic of Italy, except (a) to qualified investors (investitori qualificati), as defined in article 100 of the Financial Services Law and article 34-ter, paragraph 1(b) of the Issuer Regulation, or (b) pursuant to any other public offer exemption in accordance with article 100 of the Financial Services Law and regulations made thereunder, including article 34-ter, first paragraph, of the Issuer Regulation.
Any offer, sale or delivery of Notes and any distribution of this Base Prospectus, the applicable Final Terms or any other document relating to the Notes in the Republic of Italy in accordance with paragraphs (a) and (b) above must and shall be made in compliance with applicable Italian laws, in particular those relating to securities, taxation and trade and all other applicable laws and regulations and more specifically:
(a) must and shall be made by an investment firm, bank or financial intermediary authorised to conduct such activities in the Republic of Italy in accordance with the Financial Services Law, Consob regulation No. 16190 of 29 October 2007 (as amended) and Legislative Decree No. 385 of 1st September 1993 as amended; and
(b) must and shall be made in accordance with all laws and regulations or requirements and restrictions imposed by the Consob, the Bank of Italy and/or any other Italian authority.
0013112-0000246 PA:15005400.8 101
It is the sole responsibility of Investors who subscribe for an offering of Notes to ensure that the Notes subscribed in connection with the offer have been offered and sold in accordance with applicable Italian laws and regulations. No person residing or located in the Republic of Italy, other than original addressees of this Base Prospectus, may rely on this Base Prospectus, the applicable Final Terms or any other document relating to the Notes.
5. FRANCE
Each of the Dealers and the Issuer has represented and agreed that in connection with their initial placement, it has not offered or sold and will not offer or sell, directly or indirectly, Notes to the public in France; it has not distributed or caused to be distributed and will not distribute or cause to be distributed to the public in France, the Base Prospectus, the applicable Final Terms or any other offering material relating to the Notes and such offers, sales and placements of Notes in France will be made only to (i) providers of portfolio management-related investment services for the account of third parties (prestataires de services d'investissement relatifs à la gestion de portefeuille pour le compte de tiers), and/or (ii) qualified investors (investisseurs qualifiés) acting for their own account and/or (iii) a restricted circle of investors (cercle restreint d'investisseurs), all as defined in and in accordance with, articles L.411-1, L.411-2, D.411-1 and D.411-4 of the French Code monétaire et financier.
0013112-0000246 PA:15005400.8 102
FORM OF FINAL TERMS
Set out below is the Form of Final Terms which will be completed for each Tranche of Notes:
Final Terms dated []
COMMUNAUTE URBAINE MARSEILLE PROVENCE METROPOLE
€400,000,000
Euro Medium Term Note Programme
SERIES No: []
TRANCHE No: []
[Brief description and aggregate nominal amount of Notes]
Issue Price: [] %
[Name(s) of Dealer(s)]
0013112-0000246 PA:15005400.8 103
PART A
CONTRACTUAL TERMS
This document constitutes the Final Terms in respect of the issue of notes described below (the Notes) and contains the final terms of the Notes. These Final Terms complete the base prospectus dated 16 June 2015 (in respect of which the Autorité des marchés financiers (the AMF) has granted visa No. 15-277 dated 16 June 2015) [and the supplement[s] to the base prospectus dated [] (in respect of which the AMF has granted visa No. [] dated [])], relating to the 400,000,000 Euro Medium Term Note Programme of the Issuer which [together] constitute[s] a base prospectus (the Base Prospectus) for the purposes of article 5.4 of Directive 2003/71/EC of the European Parliament and Council dated 4 November 2003, as amended (the Prospectus Directive) and must be read in conjunction therewith. Terms used below shall have the meaning given to them in the Base Prospectus. The Notes shall be issued in accordance with the provisions of these Final Terms together with the Base Prospectus. The Issuer accepts responsibility for the information contained in these Final Terms which, together with the Base Prospectus, contain all material information in connection with the issue of Notes. Full information on the Issuer and the offer of Notes is available solely on the basis of these Final Terms and the Base Prospectus which together constitute the Prospectus. The Final Terms and the Base Prospectus are available on the websites of (a) the AMF (www.amf-france.org) and (b) the Issuer (http://www.marseille-provence.fr/index.php/institution/les-finances/emissions-obligaraires), [and] during normal business hours at the registered office of the Issuer and the specified offices of the Paying Agent(s) from which copies may be obtained. [The Base Prospectus is also available [on/at] [].]2
[The following language applies if the first Tranche of an issue which is being increased was issued under a prospectus or base prospectus with an earlier date.]
Terms used below shall be deemed to have been defined for the purposes of the Conditions of the Notes included in the base prospectus dated [initial date] in respect of which the Autorité des marchés financiers (AMF) has granted its visa under n° [] dated [] [and in the supplemental base prospectus dated [] in respect of which the AMF has granted its visa under n° [] dated []] ([together,] the Initial Base Prospectus) which [together] constitute] a base prospectus as defined in Directive 2003/71/EC of the European Parliament and Council dated 4 November 2003, as amended (the Prospectus Directive). This document constitutes the Final Terms in respect of the issue of Notes described below for the purposes of article 5.4 of the Prospectus Directive and must be read in conjunction with the base prospectus dated 16 June 2015 (in respect of which the AMF has granted visa n°15-277 dated 16 June 2015) [and the supplemental Base Prospectus dated [] (in respect of which the AMF has granted visa n° [] dated [])] ([together,] the Current Base Prospectus), other than the Conditions extracted from the Initial Base Prospectus and incorporated by reference into the Current Base Prospectus. Full information on the Issuer and the offer of the Notes is available solely on the combined basis of these Final Terms, the Initial Base Prospectus and the Current Base Prospectus. The Final Terms, the Initial Base Prospectus and the Current Base Prospectus are available on the websites of (a) the AMF (www.amf-france.org) and (b) the Issuer (http://www. marseille-provence.fr/index.php/institution/les-finances/emissions-obligaraires), [and] during normal business hours, at the registered office of the Issuer and the specified offices of the Paying Agent(s) from whom copies may be obtained. [Furthermore, the Final Terms, the Initial Base Prospectus and the Current Base Prospectus are available [on/at] [].]3]
[Include whichever of the following apply or specify as "Not Applicable" (N/A). Note that the numbering should remain as set out below, even if "Not Applicable" is indicated for individual paragraphs or sub-paragraphs. Italics denote directions for completing the Final Terms.]
2 If the Notes are admitted to trading on a Regulated Market other than Euronext Paris. 3 If the Notes are admitted to trading on a Regulated Market other than Euronext Paris.
0013112-0000246 PA:15005400.8 104
1. Issuer: Communauté Urbaine Marseille Provence Métropole 2. (a) Series: [] (b) Tranche: [] (c) Date on which the Notes will be [The Notes shall be consolidated (assimilable) and consolidated and form a single form a single Series with [describe the relevant Series: Series] issued by the Issuer on [insert the relevant date] (the "Existing Titles") as of [insert the relevant date]. Once the Notes are admitted to trading, they shall be fully fungible with the Existing Notes, and shall form a single Series.] [Not Applicable] 3. Specified Currency: Euro (€) 4. Aggregate Nominal Amount: [] (a) Series: [] [(b) Tranche: []] 5. Issue Price: [] % of the Aggregate Nominal Amount [plus accrued interest since [insert the date](in case of fungible issues or first broken coupon, if any) 6. Specified Denomination(s): [] (only one Denomination for Dematerialised Notes) 7. (a) Issue Date: [] (b) Interest Period Commencement [] [Specify / Issue Date / Not Applicable] Date: 8. Maturity Date: [Specify the date or (for the Floating Rate Notes) the Coupon Payment Date of the relevant month and year or the nearest date from the Coupon Payment Date of the relevant month and year] 9. Interest Basis: [Fixed Rate of [] %] [EURIBOR or EONIA][TEC10] +/-[] % of the Floating Rate] [Zero Coupon Note] (other details indicated below) 10. Redemption/Payment Basis: Subject to repurchase and cancellation or anticipated redemption, the Notes will be redeemed at the Maturity Date at [100] % of their nominal amount. [Redemption by Instalments] 11. Change of Interest Basis: [Applicable (for the Fixed/Floating Rate Notes)/Not Applicable] (If applicable, specify details related to the conversion of the Fixed/Floating Rate interest under Article 4.4) 12. Redemption at the option of the [Redemption at the option of the Issuer/Noteholders: Issuer]/[Redemption at the option of the Noteholders][Not applicable] [(other details indicated below)]
0013112-0000246 PA:15005400.8 105
13. (a) Status of the Notes: Senior (b) Authorisation date for the issue of [] the Notes: 14. Distribution Method: [Syndicated/Non-syndicated] PROVISIONS RELATED TO INTERESTS (IF ANY) TO BE PAID 15. Provisions related to the Fixed Rate Notes: [Applicable/Not Applicable] (If this paragraph is not applicable, delete other sub-paragraphs) (a) Interest Rate: [] % per year [payable [annually/half- yearly/quarterly/monthly] at maturity] (b) Coupon Payment Date(s): [] in each year [adjusted in accordance with [specify Business Day Convention and any relevant Business Centre(s) for the "Business Day" definition]/not adjusted (c) Fixed Coupon Amount[(s)]: [] per Specified Denomination of [] (d) Broken Amount[(s)]: [Include information relating to the initial or final Broken Amount which are different to the Fixed Coupon Amount(s) and Interest Payment Date(s) to which they relate][Not Applicable] (e) Day Count Fraction (Article 4.1): [Actual/365 / Actual/365-FBF / Actual/Actual- [ICMA/FBF] / Actual/365 (Fixed) / Actual/360 / 30/360 / 360/360 / Bond Basis / 30/360 FBF / Actual 30A/360 (American Bond Basis).] (f) Determination Date(s) (Article 4.1): [] in each year (specify the regular Coupon payment dates, excluding the Issue Date and the Maturity Date in the case of a first or last long or short Coupon.[Not Applicable] N.B.: only applicable where the Day Count Fraction is Actual/Actual (ICMA) Basis). 16. Provisions relating to Floating Rate Notes: [Applicable/Not Applicable] (If this paragraph is not applicable, delete other sub-paragraphs). (a) Interest Period(s)/ Interest Accrual [] Period Date: (b) Coupon Payment Date(s): [] (c) First Coupon Payment Date: [] (d) Business Day Convention: [Floating Rate Business Day Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention] /[Not adjusted] (e) Business Center(s) (Article 4.1): [] (f) Manner in which the Interest Rate[s] is/[are] to be determined: [Screen Rate Determination/FBF Determination]
0013112-0000246 PA:15005400.8 106
(g) Party responsible for calculating the [][Not Applicable] Interest Rate(s) and Coupon Amount(s) (if other than the Calculation Agent): (h) Screen Rate Determination (Article [Applicable/Not Applicable] 4.3(ii)): (If this sub-paragraph is not applicable, delete the remaining sub-paragraphs) Relevant Rate: [] Screen Page: [] Relevant Time: [] Coupon Determination [[] [TARGET] Business Days in [specify the city] Date: for [specify the currency] before [the first day of each Interest Period/each Interest Payment Date]] Primary source for the [Specify the relevant Screen Page or "Reference Floating Rate: Banks"] Reference Banks (if the [Specify four entities/ Not Applicable] primary source is "Reference Banks"): Relevant Financial Centre: [The financial centre most closely connected with the Benchmark– specify, if other than Paris] Benchmark: [EONIA, EURIBOR, TEC10] (If the Interest Rate is determined through a linear interpolation in respect with the [first/last] [long/short] Interest Period, insert the relevant interest period(s) and the two applicable interest rates used for the aforementioned determination) Representative Amount: [Specify if quotations published on a Screen Page or offered by Reference Banks must be given for a transaction of a specific amount] Effective Date: [Specify if quotations are not to be obtained with effect from commencement of Interest Period] Specified Duration: [Specify period for quotation if other than duration of Interest Period] (i) FBF Determination (Article 4.3(c)) [Applicable/Not Applicable] (If this sub-paragraph is not applicable, delete the remaining sub-paragraphs) Floating Rate: [] (If the Interest Rate is determined through a linear interpolation in respect with the [first/last] [long/short] Interest Period, insert the relevant interest period(s) and the two applicable interest rates used for the aforementioned determination) Determination Date for [] Floating Rate:
0013112-0000246 PA:15005400.8 107
FBF Definitions: [] (j) Margin(s): [+/-] [] % per annum/ Not Applicable] (k) Minimum Interest Rate: [] % per annum/ Not Applicable] (l) Maximum Interest Rate: [] % per annum/ Not Applicable] (m) Day Count Fraction (Article 4.1): [] (n) Rate Multiplier: [] 17. Provisions relating to Zero Coupon Notes: [Applicable/Not Applicable] (If this paragraph is not applicable, delete the remaining sub-paragraphs) (a) Amortisation Yield: []% per annum (b) Day Count Fraction: [] (c) Reference Price: []
PROVISIONS RELATING TO REDEMPTION 18. Issuer Call: [Applicable/Not Applicable] (If this paragraph is not applicable, delete the remaining sub-paragraphs) (a) Optional Redemption Date(s): [] (b) Optional Redemption Amount(s) for [] per Note [of Specified Denomination []] each Note: (c) If redeemable in part: (i) Minimum redemption [] amount: (ii) Maximum redemption [] amount: (d) Notice period: [] 19. Noteholder Put: [Applicable/Not Applicable] (If this paragraph is not applicable, delete the remaining sub-paragraphs) (a) Optional Redemption Date(s): [] (b) Optional Redemption Amount(s) for [] per Note [of Specified Denomination []] each Note: (c) Notice period (Article 5.3): [] 20. Final Redemption Amount for each Note: [[] per Note [of Specified Denomination of []]] 21. Instalment Amount [Applicable/Not Applicable] (If this sub-paragraph is not applicable, delete the remaining sub-paragraphs) (a) Instalment Date(s): [] (b) Instalment Amount(s) for each Note: []
0013112-0000246 PA:15005400.8 108
22. Early Redemption Amount (a) Early Redemption Amount(s) for [Pursuant to the Terms]/[] per Note [of each Note paid on redemption for Specified Denomination []] tax reasons (Article 5.6), for illegality (Article 5.9) or on Event of Default (Article 8): (b) Redemption for tax reasons on dates [Yes/No] other than Interest Payment Dates (Article 5.6): (c) Unmatured Coupons to be cancelled [Yes/No/Not Applicable] on early redemption (Materialised Notes only (Article 6.2(b)): GENERAL PROVISIONS APPLICABLE TO THE NOTES 23. Form of the Notes: [Dematerialised Notes/Materialised Notes] (Materialised Notes are issued in bearer form only) (Delete as appropriate) (a) Form of Dematerialised Notes: [In bearer form/ registered form/Not Applicable] (b) Registration Agent: [Not Applicable/if applicable name and information] (N.B. a Registration Agent may be appointed in respect of Dematerialised Notes in pure registered form (au nominatif pur) only). (c) Temporary Global Certificate: [Not Applicable/Temporary Global Certificate exchangeable for Physical Notes on [] (the Exchange Date), 40 calendar days after the issue date, unless postponed, as specified in the Temporary Global Certificate.] 24. Financial Centre(s) (Article 6.6): [Not Applicable/Specify]. (N.B. this relates to the date and place for payment and not the Interest Payment Dates referred to in paragraphs 15(ii) and 16(i).) 25. Talons for future Coupons or Receipts to be [Yes/No/Not Applicable]. (If yes, specify) (Only attached to Physical Notes: applicable to Materialised Notes.)
0013112-0000246 PA:15005400.8 109
26. Masse (Article 10): [Full Masse] /[Contractual Masse] is applicable. Note that (i) in respect of any Tranche of Notes issued outside France, the Issuer shall apply Article 10.1 (b) (Contractual Masse) and (ii) in respect of any Tranche of Notes issued inside France, Article 10.1 (a) (Full Masse) shall apply. (Specify details relating to the initial and alternate Representatives and their remuneration) Name and contact details of the initial Representative are: [] Name and contact details of the alternate Representative are: [] The Representative of the Masse [shall receive a remuneration [of/not exceeding] €[] per year with respect to its functions/shall not receive compensation with respect to its functions] [The Representative’s expenses and disboursements will be limited to € []]
PURPOSE OF THE FINAL TERMS
These Final Terms comprise the final terms required for issue [and] [admission to trading of the Notes on [Euronext Paris/other (specify)]] described herein pursuant to the €400,000,000 Euro Medium Term Note Programme of the Communauté Urbaine Marseille Provence Métropole.]
RESPONSIBILITY
The Issuer accepts responsibility for the information contained in these Final Terms. [(Relevant third party information) has been extracted from (specify source). The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware and is able to ascertain from information published by (specify source), no facts have been omitted which would render the reproduced information inaccurate or misleading.]4
Signed on behalf of the Issuer:
By: ......
Duly authorised
4 To be included if information is provided by a third party.
0013112-0000246 PA:15005400.8 110
PART B
OTHER INFORMATION
1. ADMISSION TO TRADING
(a) Admission to trading: [An application for admission of the Notes to trading on [Euronext Paris/other (specify)] as from [] has been made.]
[An application for admission of the Notes to trading on [Euronext Paris/other (specify)] as from [] shall be made by the Issuer (or on its behalf).]
[Not Applicable]
(in the case of fungible issues, specify that the original Notes have already been admitted to trading.)
(b) Total estimated costs relating to [[]/Not Applicable] admission to trading:
2. RATINGS
Ratings: The Programme has been assigned an A+ rating by Fitch France SAS (Fitch).
Fitch is established in the European Union and is registered in accordance with Regulation (EC) No. 1060/2009 relating to credit rating agencies as amended (the CRA Regulation). Fitch is included on the list of rating agencies published by the European Financial Markets Authority on its website (www.esma.europa.eu/page/List-registered-and- certified-CRAs) in accordance with the CRA Regulation.
Notes to be issued [have not been assigned any rating][have been assigned the following rating: [Fitch: []] [[Other]: []]
(The rating assigned to the Notes issued under the Programme must be specified above or, if an issue of Notes has been assigned a specific rating, such specific rating should be specified above.)
3. [NOTIFICATION
[The Autorité des marchés financiers has been requested to provide/The Autorité des marchés financiers has provided (use the first alternative for Notes issued contemporaneously with the udpating of the Programme and the second alternative for subsequent issues)] to (insert the name of the relevant authority in the host Member State) [a] certificate[s] of approval certifying that the prospectus and the supplement[s] [has]/[have] been prepared] in accordance with the Prospectus Directive.]
0013112-0000246 PA:15005400.8 111
4. [INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE
The purpose of this section is to describe any interest, including any conflict of interest that may have a material impact on the issue of Notes, identifying each person concerned and the nature of such interest. This may be satisfied by inserting the following statement:
["Except commissions related to the issue of Notes paid to the Dealer(s), to the knowledge of the Issuer, no other person involved in the issue of Notes has any interest material to it. The dealer(s) and its/their affiliate(s) have engaged and may engage in investment banking and/or commercial banking transactions with the Issuer, and may perform other services for it in the ordinary course of business."]]
5. REASONS FOR THE OFFER AND USE OF PROCEEDS
[Reasons for the Offer: []
6. [FIXED RATE NOTES ONLY - YIELD
Yield: [] The yield is calculated at the Issue Date on the basis of the Issue Price. It is not an indication of future yield.]
7. [FLOATING RATE NOTES ONLY – HISTORICAL INTEREST RATES
Details of historical interest rates [EURIBOR, EONIA] achieved [Reuters].
8. DISTRIBUTION
If it is syndicated, names of the [Not applicable/give names] Placement Syndicate Members: (if this paragraph is not applicable, please delete the following subsections) (a) Members responsible for the [Not applicable/give names] Regularisation Transactions (if any):
(b) Date of the underwriting [] agreement: If it is not syndicated, names of the [Not applicable/give name] Dealer: Sale restrictions – United States of [Regulation S Compliance Category 1: Rules TEFRA C / America: Rules TEFRA D / Not applicable] (Rules TEFRA are not applicable to the Dematerialised Notes)
9. OPERATIONAL INFORMATION
(a) ISIN Code: []
(b) Common Code: []
(c) Depositary:
(i) Euroclear France acting as Central Depositary: [Yes/No]
0013112-0000246 PA:15005400.8 112
(ii) Common Depositary for Euroclear and Clearstream, Luxembourg: [Yes/No]
(d) Any clearing system other than Euroclear France, Euroclear and Clearstream, Luxembourg and the relevant identification numbers: [Not Applicable/give name(s) and number(s)]
(e) Delivery: Delivery [against/free of payment]
(f) Names and addresses of initial Paying Agents appointed for the Notes: []
(g) Names and addresses of additional Paying Agents appointed for the Notes: [[]/ Not Applicable]
0013112-0000246 PA:15005400.8 113
GENERAL INFORMATION
1. The Issuer has obtained all consents, approvals and authorisations necessary in France in connection with the establishment of the Programme. Any issue of Notes shall be authorised by a resolution of the Municipality Council (Conseil communautaire) of the Issuer. Pursuant to report examined during the Council meeting dated 19 February 2015, the Municipality Council of the Issuer authorised its Président on 19 February 2015 to raise financing of any nature, subject to compliance with certain conditions (in particular with respect to applicable rate or term), denominated in euros, notably bonds issue including under an EMTN programme until the end of his term (which comes to an end at the latest on 1st January 2016, the date on which Métropole Aix-Marseille will replace MPM) and until the opening of the election campaign for the general renewal of local authorities, subject to the authorised limits set forth in the budget and to enter into necessary acts, contracts and amendments in that respect.
2. There has been no material change to the financial situation of the Issuer since 31 December 2014.
3. There has been no material adverse change in the prospects of the Issuer since 31 December 2014.
4. This Base Prospectus and any eventual supplement of such Base Prospectus will be published on the websites of (a) the AMF (www.amf-france.org), (b) the Issuer (http://www.marseille- provence.fr/index.php/institution/les-finances/emissions-obligataires) and (c) any other relevant regulatory authority and shall be available for inspection and obtaining copies, free of charge, during normal office hours, at any day of the week (except Saturdays, Sundays and public holidays) at the office of the Fiscal Agent or the Paying Agents. So long as any Notes are admitted to trading on a regulated market in the EEA or offered to the public in a Member State other than France, in each case in accordance with the Prospectus Directive, the applicable Final Terms shall be published on the websites of (i) the AMF (www.amf-france.org) and (ii) the Issuer (http://www.marseille- provence.fr/index.php/institution/les-finances/emissions-obligataires).
5. Save as disclosed on pages 98 and 99 of the Description of the Issuer, the Issuer is not involved in, nor are there any governmental, legal or arbitration proceedings pending or threatened, of which the Issuer is aware, which may have or have had a material effect on the financial position of the Issuer during the twelve months prior to the date of this Base Prospectus.
6. An application for acceptance of the Notes for clearance through Euroclear France (66, rue de la Victoire – 75009 Paris – France), Euroclear (boulevard du Roi Albert II – 1210 Bruxelles – Belgique) and Clearstream, Luxembourg (42 avenue JF Kennedy – 1885 Luxembourg – Grand- Duché de Luxembourg) may be made. The Common Code and ISIN number (International Securities Identification Number) or the identification number of any other relevant clearing system for each Series of Notes shall be specified in the applicable Final Terms.
7. So long as any Notes issued under this Base Prospectus remain outstanding, copies of the following documents shall be available, upon publication, free of charge, during normal office hours, at any days of the week (except Saturdays, Sundays and public holidays) at the specified offices of the Fiscal Agent and the Paying Agent(s):
(a) the Fiscal Agency Agreement (which includes the form of accounting letter (lettre comptable), the Temporary Global Certificates, Physical Notes, Coupons, Receipts and Talons);
(b) the two most recent initial budgets (as amended, if applicable, by any supplemental budget) and the published administrative accounts of the Issuer;
0013112-0000246 PA:15005400.8 114
(c) all Final Terms relating to any Notes admitted to trading on Euronext Paris or any other regulated market of the EEA;
(d) a copy of this Base Prospectus and any supplement to this Base Prospectus or any new base prospectus; and
(e) all reports, correspondence and other documents, appraisals and statements issued by any expert at the request of the Issuer, any extracts of which, or references to which, are contained in this Base Prospectus relating to any issue of Notes.
8. The price and the amount of the Notes issued within the Programme shall be determined by the Issuer and each relevant Dealer at the time of the issue in accordance with the market conditions.
9. For any Tranche of Fixed Rate Notes, an indication of the yield in respect of such Notes shall be specified in the applicable Final Terms. The yield is calculated at the Issue Date of the Notes on the basis of the Issue Price. The specified yield shall be calculated as the yield to maturity as at the issue date of the notes and shall not be an indication of future yield.
0013112-0000246 PA:15005400.8 115
RESPONSIBILITY FOR THE BASE PROSPECTUS
Person assuming responsibility for this Base Prospectus
In the name of the Issuer
I confirm, having taken all reasonable care to ensure that such is the case, that the information contained in this Base Prospectus is, to my knowledge, in accordance with the facts and contains no omission likely to affect its import.
Marseille, 16 June 2015
COMMUNAUTE URBAINE MARSEILLE PROVENCE METROPOLE
Les Docks, Atrium 10.7 10, place de la Joliette BP 48014 13567 Marseille Cedex 02 France
Represented by: Guy Teissier
President of the Municipality Council of the Communauté Urbaine Marseille Provence Métropole
In accordance with Articles L. 412-1 and L. 621-8 of the French Code monétaire et financier and with its Réglement Général, the Autorité des marchés financiers has granted to this Base Prospectus the visa No. 15- 277 dated 16 June 2015. This prospectus was prepared by the Issuer and its signatories assume responsibility for it.
In accordance with Article L. 621-8-1-I of the French Code monétaire et financier, the visa was granted following an examination by the AMF of "whether the document is complete and comprehensible, and whether the information it contains is coherent". It does not imply that the AMF considers the transaction appropriate nor that it has verified the accounting and financial data set out in it.
In accordance with article 212-32 of the Réglement Général of the AMF, the final terms of any issue or admission to trading of Notes on the basis of this base prospectus must be published.
0013112-0000246 PA:15005400.8 116
Issuer
Communauté Urbaine Marseille Provence Métropole
Arranger
HSBC FRANCE 103, avenue des Champs Elysées 75008 Paris France
Dealers
BARCLAYS BANK PLC HSBC FRANCE 5 the North Colonnade 103 avenue des Champs-Elysées Canary Wharf 75008 Paris London E14 4BB France United Kingdom
NATIXIS SOCIÉTÉ GÉNÉRALE 30, avenue Pierre Mendès-France 29 Boulevard Haussmann 75013 Paris 75009 Paris France France
Fiscal Agent, Principal Paying Agent and Calculation Agent BNP Paribas Securities Services Les Grands Moulins de Pantin 9, rue du Débarcadère 93500 Pantin France
Legal advisers To the Issuer To the Dealers Wragge Lawrence Graham & Co Allen & Overy LLP AARPI 38, avenue de l’Opéra 52, avenue Hoche 75002 Paris 75008 Paris France France
0013112-0000246 PA:15005400.8 117