Algarve International B.V. Xl Capital Assurance Inc

http://www.oblible.com OFFERING CIRCULAR ALGARVE INTERNATIONAL B.V. (A private limited liability company (“beslotrii r~eririootsdicipmet bepcrkte cieins~~i.cilielijklici~”) zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBAincorporated in The NetherlandszyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA and having its corporatezyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA seat in Amsterdam) zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA Euro 126,500,000 6.4 per cent. Guaranteed Bonds due 2027 unconditionally and irrevocably guaranteed as to scheduled payments of principal and interest pursuant to a financial guaranty issued by XL CAPITAL ASSURANCE INC. (Incorporated with limited liability in New York) Issue Price: 100 per cent. The Euro 126,500,000 6.4 per cent. Guaranteed Bonds due 2027 (the “Bonds“) of Algarve International B.V. (the “Issuer”) were issued on 5 July. 2001, (the “Issue Date”) pursuant to the bond trust deed dated 2 July. 2001 (the -’Bond Trust Deed”) between the Issuer, EUROSCUT ~ Sociedade Concessionaria d;i Scut do AlFarve. S.A. (“Euroscut” or the “Company”). XL Capital Assurance Inc. (“XLCA” or the “Guarantor”), Citibank. N.A. as security trustee (the “Security Trustee”) and Citibank, N.A. as bond trustee (the “Bond Trustee”. which expression includes the trustee or trustees for the time being of the Bond Trust Deed). The issue price of the Bonds was 100 per cent. The Bonds ;ire unconditionally and irrevocably guaranteed as to scheduled payments of principal and interest in respect of the Bonds and as to certain additional amounts in respect of withholding taxes of The Netherlands in respect of the Bonds pursuant to a financial guaranty (the “Bond Financial Guaranty”) issued by XLCA and as set out in “Bond Financial Guaranty“ below. Interest on the Bonds will be payable annually in arrear on 15 December in each year. The first payment will be made on 15 December, 2001 in respect of the period from and including the Issue Date (as defined below) to. but excluding. zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA 15 December. 2001. Payments in respect ofthe Bonds will be made free and clear of, and without withholding or deduction for or on account of, withholding taxes ofThe Netherlands as described in “Terms and Conditions of the Bonds-Taxation’’ below. Unless previously redeemed or purchased and cancelled, the Bonds will mature on IS June, 2027. The Bonds may bc redeemed by the Issuer in whole (but not in part). at their principal amount together withzyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA accrued interest in the event of certain changes relating to taxation in The Netherlands or loan interest relief under the double-tax treaty between The Netherlands and Portugal as set out under “Terms and Conditions of the Bonds - Redemption and Purchase - Llnscheduled redemption for tau reasons” bek~. Application has been made to list the Bonds 011 the Luxembourz Stock Exchange. The obligations of the Issuer under the Bonds ;ire secured in favour of the Security Trustee as described in “The Financing of the Project - Security Agreements” below. The Bonds have been rated AAA by Standard & Poor’s Ratings Services. a division of The McGraw-Hill Companies. Inc. (“S&P“).This rating is based solely upon the financial strength rating of XLCA. A credit rating is not a recommendation to buy. sell or hold securities and may be subject to revision. suspension or withdrawal at any time. The Bonds are represented by a permanent global bond in bearer Uorm. without coupons. which has been deposited with 3 common depositary for Euroclear Bank S.A./N.V.. as operator of the Euroclear System (“Euroclear”) and Clearstream Banking. societe anonyme, Luxembourg (“Clearstream, Luxembourg”). The permanent global bond will be exchangeable fnr definitive Bonds in bearer form, with coupons for principal and interest attached. only in the limited circumstances described in “Summary of Provisions relating to the Bonds while in Global Form” on page 75 below. Particular attention is drawn to the section entitled “Risk Factors” on pages 57 to 62 of this Offering Circular. SANTANDER CENTRAL HISPANO HYPOVEREINSBANK INVESTMENT 18 September, 2001 http://www.oblible.com Each of the Issuer and Euroscut accepts responsibility for the information (other than the XLCA Information. as defined below) contained in this Offering Circular. To the best of the knowledge and belief of the Issuer and Euroscut (each of which has taken all reasonable care to ensure that such is the case), such information is in accordance with the facts and does not omit anything likely to affect the import of such information. Although the Issuer and Euroscut believe that projections contained in this Offering Circular are reasonable, neither the lssuer nor Euroscut can give any assurance that such projections will prove to have been correct. Important factors that could cause actual results to differ materially from such projections are disclosed in this Offering Circular, including, without limitation, under “Risk Factors” on page 57, and any projections are expressly qualified in their entirety accordingly. zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA XLCA accepts responsibility for the information contained in the sections of this Offering Circular entitled “Bond Financial Guaranty”, “Description of XLCA” and “Financial Statements of XLCA” and in paragraphs l(c), 4(c), 5(b) and 7(b) of the section entitled “General Information” (together, the “XLCA Information”). To the best of the knowledge and belief of XLCA (which has taken all reasonable care to ensure that such is the case), the XLCA Information is in accordance with the facts and does not omit anything likely to affect the import of the XLCA Information. XLCA accepts no responsibility for any other information contained in this Offering Circular. Save for the XLCA Information, XLCA has not separately verified the information contained herein. No representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by XLCA as to the accuracy or completeness of any information contained in this Offering Circular (other than the XLCA Information) or any other information supplied in connection with the Bonds or their distribution. No person is or has been authorised to give any information or to make any representation other than the information or the representations contained in this Offering Circular in connection with the Issuer. Euroscut or XLCA, in connection with the issue or sale of the Bonds and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuer, Euroscut, XLCA, Banco Santander Central Hispano, S.A. and Bayerische Hypo-und Vereinsbank AG 1“HypoVereinsbank”) (together the “Lead Managers”), the Bond Trustee or the Security Trustee. Neither the delivery of this Offering Circular nor any offering, sale or delivery made in connection herewith shall, under any circumstances, constitute a representation or create any implication that there has been no change in the financial situation or the affairs of either of the Issuer, Euroscut or XLCA since the date hereof or, as the case may be, the date upon which this document has been most recently amended or supplemented or that there has been no adverse change in the financial position of the Issuer, Euroscut or XLCA since the date hereof. Unless otherwise indicated herein, all information in this Offering Circular is given as of the date of this Offering Circular. None of the Lead Managers, the Bond Trustee or the Security Trustee have separately verified the information contained in this Offering Circular. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by the Lead Managers, the Bond Trustee or the Security Trustee as to the accuracy or completeness of the information contained in this Offering Circular or any other information supplied in connection with the Bonds or their distribution. The statements made in this paragraph are without prejudice to the respective responsibilities of the Issuer. Euroscut and XLCA. Each person receiving this Offering Circular acknowledges that such person has not relied on the Lead Managers, the Bond Trustee or the Security Trustee nor on any person affiliated with any of them in connection with its investigation of the accuracy of such information or its investment decision. Each person contemplating making an investment in the Bonds must make its own investigation and analysis of the creditworthiness of the Issuer, Euroscut and XLCA 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. A prospective investor who is in any doubt whatsoever as to the risks involved in investing in the Bonds should consult independent professional advisers. The Bonds have not been and will not be registered under the United States Securities Act of 1933 (as amended) (the “Securities Act”) and arc subject to United States tax law requirements. The Bonds 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 Bonds are being offered outside the United States in accordance with Regulation S under the Securities Act. See “Subscription

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