205649-4-6-V1.0 70-40642620
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REPUBLIC OF CROATIA €1,250,000,000 3.00 per cent. Notes due 2027 Issue price: 98.32 per cent. The issue price of the €1,250,000,000 3.00 per cent. Fixed Rate Notes due 2027 (the "Notes") issued by the Republic of Croatia (the "Issuer", the "Republic" or "Croatia"), will be 98.32 per cent. of their principal amount. The Notes will mature on 20 March 2027 at their principal amount. The Notes will be in registered form in denominations of €100,000 and integral multiples of €1,000 in excess thereof. Interest on the Notes will accrue at the rate of 3.00 per cent. per annum from and including 20 March 2017 and will be payable in Euro annually in arrear on 20 March in each year, commencing on 20 March 2018. Payments on the Notes will be made without withholding or deduction for or on account of taxes imposed by the Issuer except to the extent described under "Terms and Conditions of the Notes — Taxation". This Offering Circular neither constitutes a prospectus pursuant to Part II of the Luxembourg law on prospectuses for securities (loi relative aux prospectus pour valeurs mobiliéres) dated 10 July 2005 (the "Luxembourg Act") which implements Directive 2003/71/EC as amended (which includes the amendments made by Directive 2010/73/EU to the extent that such amendments have been implemented in a relevant Member State of the European Economic Area) (the "Prospectus Directive") nor a simplified prospectus pursuant to Part III of the Luxembourg Act. Accordingly, this Offering Circular does not purport to meet the format and the disclosure requirements of the Prospectus Directive and Commission Regulation (EC) No. 809/2004 implementing the Prospectus Directive, and it has not been, and will not be, submitted for approval to any competent authority within the meaning of the Prospectus Directive and in particular the Supervisory Commission of the Financial Sector (Commission de Surveillance du Secteur Financier), in its capacity as competent authority under the Luxembourg Act. The Issuer is rated Ba2 (stable outlook) by Moody's Investors Service, Inc. ("Moody's"), BB (stable outlook) by Standard & Poor's Credit Market Services Europe Ltd. ("S&P"), and the Issuer has a long term foreign currency issuer default rating of BB (stable outlook) by Fitch Ratings Ltd. ("Fitch"). The Notes will be rated Ba2 by Moody's, BB by S&P, and BB by Fitch. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating organisation. As at the date of this Offering Circular, S&P and Fitch are established in the European Union and is registered under Regulation (EU) No 1060/2009 (as amended) (the "CRA Regulation"). Moody's is not established in the EEA but the rating it has given to the Notes is endorsed by Moody's Investors Service, Ltd, which is established in the EEA and registered under the CRA Regulation. As such, each of the rating agencies is included in the list of credit rating agencies published by the European Securities and Markets Authority ("ESMA") on its website in accordance with such Regulation. In general, European regulated investors are restricted under the CRA Regulation from using credit ratings for regulatory purposes, unless such ratings are issued by a credit rating agency established in the EU and registered under the CRA Regulation (and such registration has not been withdrawn or suspended), subject to transitional provisions that apply in certain circumstances whilst the registration application is pending. Such general restriction will also apply in the case of credit ratings issued by non EU credit rating agencies, unless the relevant credit ratings are endorsed by an EU registered credit rating agency or the relevant non EU rating agency is certified in accordance with the CRA Regulation (and such endorsement action or certification, as the case may be, has not been withdrawn or suspended). The list of registered and certified rating agencies published by ESMA on its website in accordance with the CRA Regulation is not conclusive evidence of the status of the relevant rating agency included in such list, as there may be delays between certain supervisory measures being taken against a relevant rating agency and the publication of the updated ESMA list. Certain information with respect to the credit rating agencies and ratings is set out in the sections entitled "There can be no assurance that Croatia's credit ratings will not change" and "Credit Ratings may not reflect all risks" of this Offering Circular. The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or any state securities law, and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Notes will initially be represented by a global certificate (the "Global Certificate"), in registered form, without interest coupons attached and will be registered in the name of a nominee of a common depositary for Clearstream Banking, société anonyme ("Clearstream, Luxembourg") and Euroclear Bank SA/NV ("Euroclear"), on or about 20 March 2017 (the "Closing Date"). An investment in the Notes involves certain risks. See "Risk Factors" for a discussion of certain factors that should be considered in connection with an investment in the Notes. Joint Lead Managers CITIGROUP HSBC MORGAN STANLEY ZAGREBAČKA BANKA 16 March 2017 205649-4-6-v1.0 - i- 70-40642620 THE REPUBLIC OF CROATIA 205649-4-6-v1.0 - ii- 70-40642620 The Issuer accepts responsibility for the information contained in this Offering Circular. To the best of the knowledge of the Issuer (having taken all reasonable care to ensure that such is the case) the information contained in this Offering Circular is in accordance with the facts and does not omit anything likely to affect the import of such information. The Issuer, having made all reasonable enquiries, confirms that this Offering Circular contains all information with respect to the Issuer and the Notes which is material in the context of the issue and offering of the Notes, that the information contained in this Offering Circular is true and accurate in every material respect and is not misleading, that the opinions and intentions expressed in this Offering Circular are honestly held and that there are no other facts the omission of which makes misleading any statement herein, whether of fact or opinion. No person has been authorised in connection with the offering of the Notes to give any information or make any representation regarding the Issuer or the Notes other than as contained in this Offering Circular. Any such representation or information should not be relied upon as having been authorised by the Issuer or any agency thereof or the Joint Lead Managers (as defined under "Subscription and Sale"). Neither the delivery of this Offering Circular nor any sales made in connection with the issue of the Notes shall, under any circumstances, constitute a representation that there has been no change in the affairs of the Issuer since the date hereof. The Joint Lead Managers make no representation or warranty, express or implied, as to the accuracy or completeness of the information in this Offering Circular. Each person receiving this Offering Circular acknowledges that such person has not relied on any Joint Lead Manager or any person affiliated with any Joint Lead Manager in connection with its investigation of the accuracy of such information or its investment decision. Each person contemplating making an investment in the Notes must make its own investigation and analysis of the creditworthiness of the Issuer and its own determination of the suitability of any such investment, with particular reference to its own investment objectives and experience, and any other factors which may be relevant to it in connection with such investment. This Offering Circular does not constitute an offer of, or an invitation by or on behalf of the Issuer or any agency thereof or any Joint Lead Manager to subscribe or purchase, any of the Notes. The distribution of this Offering Circular and the offering of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Offering Circular comes are required by the Joint Lead Managers to inform themselves about and to observe any such restrictions. For a description of certain further restrictions on offers and sales of Notes and distribution of this Offering Circular, see "Subscription and Sale". In this Offering Circular, all references to "HRK" and "kuna" are to the lawful currency for the time being of the Issuer, all references to "€", "EUR", "euro" and "Euro" are to the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty on the Functioning of the European Union, all references to "U.S. dollars", "US$" and "U.S.$" are to the lawful currency for the time being of the United States of America and all references to "CHF" or "Swiss franc" are to Swiss Francs. Certain amounts which appear in this Offering Circular have been subject to rounding adjustments; accordingly, figures shown as totals may not be an arithmetic aggregation of the figures which precede them. IN CONNECTION WITH THE ISSUE OF THE NOTES, CITIGROUP GLOBAL MARKETS LIMITED AS STABILISATION MANAGER (THE "STABILISATION MANAGER") (OR PERSONS ACTING ON BEHALF OF THE STABILISATION MANAGER) MAY OVER- ALLOT NOTES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE NOTES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL.