Security Cover

OFFERING CIRCULAR 15 JULY 2004 US$200,000,000 8.625 per cent. Puttable Loan Participation Notes due 2011 issued by, but without recourse to, Bayerische Hypo- und Vereinsbank AG, for the sole purpose of funding a US$200,000,000 loan to The City of Kyiv acting through the Kyiv City Council Issue Price: 100 per cent. Bayerische Hypo- und Vereinsbank AG (the ‘‘Bank’’ or the ‘‘Issuer’’) is issuing the US$200,000,000 8.625 per cent. Puttable Loan Participation Notes due 2011 (the ‘‘Notes’’) for the purpose of financing a seven-year loan (the ‘‘Loan’’) to The City of Kyiv (the ‘‘City’’ or ‘‘Kyiv’’) acting through the Kyiv City Council (the ‘‘Borrower’’), pursuant to a loan agreement dated 15 July 2004 (the ‘‘Loan Agreement’’) between the Borrower and the Bank as lender. The Notes will be issued on or about 22 July 2004 and constituted by a Trust Deed dated on or about 22 July 2004 (the ‘‘Trust Deed’’) between the Bank and Deutsche Trustee Company Limited (the ‘‘Trustee’’). NOTEHOLDERS WILL HAVE A RIGHT (THE ‘‘PUT OPTION’’) TO REQUIRE THE ISSUER TO REDEEM THEIR NOTES AT PAR ON 15 JULY 2007. SEE ‘‘TERMS AND CONDITIONS OF THE NOTES – REDEMPTION AT THE OPTION OF NOTEHOLDERS.’’ SEE ‘‘RISK FACTORS’’ FOR A DISCUSSION OF CERTAIN FACTORS TO BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE NOTES. In each case where amounts of principal, interest and additional amounts (if any) are stated to be payable in respect of the Notes, the obligation of the Bank to make any such payment shall constitute an obligation only to pay to the Noteholders, on each date upon which such amounts of principal, interest and additional amounts (if any) are due in respect of the Notes, all principal, interest and additional amounts (if any) actually received by or for the account of the Bank pursuant to the Loan Agreement. The Bank will have no other financial obligation under the Notes. Save as otherwise expressly provided herein and in the Trust Deed, no proprietary or other direct interest in the Bank’s rights under or in respect of the Loan Agreement or the Loan exists for the benefit of the Noteholders. Subject to the terms of the Trust Deed, no Noteholder will have any entitlement to enforce any of the provisions in the Loan Agreement or have direct recourse to the Borrower except through action by the Trustee under the Security Interests, as defined in the Terms and Conditions of the Notes. Noteholders will be deemed to have accepted and agreed that they will be relying solely on the credit and financial standing of the City in respect of the servicing of the Notes. Application has been made to list the Notes on the Luxembourg Stock Exchange. The Notes and the Loan have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the ‘‘Securities Act’’) or with any securities regulatory authority of any State or other jurisdiction of the United States. The Notes may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Notes are being offered and sold outside the United States to non-U.S. persons in reliance on Regulation S (‘‘Regulation S’’) under the Securities Act (the ‘‘Regulation S Notes’’) and within the United States to qualified institutional buyers (‘‘QIBs’’), as defined in Rule 144A (‘‘Rule 144A’’) under the Securities Act, in reliance on the exemption from registration under the Securities Act provided by Rule 144A (the ‘‘Rule 144A Notes’’). Prospective purchasers are hereby notified that sellers of the Notes may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. The Notes have not been approved or disapproved by the U.S. Securities and Exchange Commission, any State securities commission in the United States or any other U.S. regulatory authority nor have any of the foregoing authorities passed upon or endorsed the merits of the Notes or the accuracy or adequacy of this Offering Circular. Any representation to the contrary is a criminal offence in the United States. Deutsche Bank Securities Morgan Stanley Commercial Bank Khreschatyk HVB Corporates & Markets Parex Bank The Bank has not authorised any offer of Notes to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995, as amended (the ‘‘POS Regulations’’). Notes may not lawfully be offered or sold to persons in the United Kingdom except in circumstances which do not result in an offer to the public in the United Kingdom within the meaning of the POS Regulations or otherwise in compliance with all applicable provisions of the POS Regulations. The City accepts responsibility for the accuracy and completeness of the information contained in this Offering Circular, other than as provided herein. To the best of the City’s knowledge and belief (and the City has taken all reasonable care to ensure that such is the case), the information set forth in the Offering Circular is true and accurate in all material respects and is not misleading in any material respect; the opinions, predictions and intentions expressed in this Offering Circular are honestly held; and this Offering Circular does not omit to state any material fact necessary to make such information, opinions, predictions or intentions not misleading in any material respect. The Bank accepts responsibility for information in respect of itself. Information under the heading ‘‘Ukraine’’ has been extracted from the offering circular dated 2 March 2004 for the issuance of Ukraine sovereign debt securities, which was prepared by the Cabinet of Ministers of Ukraine, represented by the Ministry of Finance, for and on behalf of Ukraine, and was not prepared in connection with the preparation of this Offering Circular. The City has not independently verified this information, and it is therefore subject to uncertainty as to its completeness and reliability. The City only accepts responsibility for the correct extraction and reproduction of the information under such heading. None of the managers named under ‘‘Subscription and Sale’’ (the ‘‘Managers’’), the Trustee or, except as specifically stated otherwise herein, the Bank makes any representation or warranty, express or implied, as to the accuracy of completeness of the information in this document. Each person receiving this document acknowledges that such person has not relied on the Managers, the Trustee or, except as specifically stated otherwise herein, the Bank or any person affiliated with the Managers, the Trustee or the Bank, 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 investigations and analysis of the creditworthiness of the City and its own determination of the suitability of any other factors that may be relevant to it in connection with such investment. No person is authorised to provide any information or to make any representation not contained in this document. Any such representation or information should not be relied upon as having been authorised by the City, the Bank, the Trustee or the Managers. Neither the delivery of this document nor the offering, sale or delivery of any Note shall in any circumstances create any implication that there has been no adverse change, or any event reasonably likely to involve an adverse change, in the condition (financial or otherwise) of the City or the Bank since the date of this document. The distribution of this document and the offering, sale and delivery of Notes in certain jurisdictions may be restricted by law. Persons into whose possession this document comes are required by the Managers to inform themselves about and to observe any such restrictions. For a description of certain restrictions on offers, sales and deliveries of Notes and on distribution of this document and other offering material relating to the Notes, see ‘‘Subscription and Sale’’. In this document, all references to ‘‘hryvnia’’ and ‘‘UAH’’ are to the lawful currency for the time being of Ukraine, all references to ‘‘dollars’’, ‘‘U.S. dollars’’, ‘‘USD’’ and ‘‘ US$’’ are to the lawful currency for the time being of the United States of America and all references to ‘‘EURO’’, ‘‘Euro’’, ‘‘euros’’ or ‘‘A’’ are to the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty establishing the European Community, as amended. Translations of amounts from hryvnia to dollars are solely for the convenience of the reader and are made at various exchange rates. No representation is made that the hryvnia or dollar amounts referred to herein could have been converted into dollars or hryvnia, as the case may be, at any particular exchange rate or at all. The National Bank of Ukraine’s hryvnia/dollar exchange rate as reported on 15 July 2004 was UAH 5.32 to the dollar. The Notes are not guaranteed by, and do not constitute the obligation of, the country of Ukraine (‘‘Ukraine’’ or the ‘‘State’’), either directly or acting through the Ministry of Finance of Ukraine, nor does Ukraine have any responsibility to facilitate enforcement in the event of a default on the Notes. The information about Ukraine under the caption ‘‘Ukraine’’ and contained elsewhere in this Offering Circular is accordingly provided solely for informational purposes. i The Notes will be in registered form. The Notes may be held and transferred and will be offered and sold in the principal amount of US$2,000 and integral multiples of US$1,000 in excess thereof, except that Rule 144A Notes will not be held, transferred, offered or sold in amounts less than US$100,000 and integral multiples of US$1,000 in excess thereof.

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