FMS WERTMANAGEMENT $2,000,000,000 1.00% NOTES DUE 2017 FMS Wertmanagement (“FMS-WM”) will pay interest on the notes on May 21 and November 21 of each year. Interest will accrue on the notes from and including November 21, 2012, and the first interest payment date will be May 21, 2013. FMS-WM may not redeem the notes prior to their maturity on November 21, 2017. There is no sinking fund for these notes. FMS-WM intends to apply for the notes to be admitted to the Euro MTF Market of the Luxembourg Stock Exchange. FMS is wholly owned by the German Financial Market Stabilization Fund known as SoFFin, which is obligated to provide FMS with liquidity support and to compensate it for losses. The Federal Republic of Germany (the “Federal Republic”) is directly liable for all of SoFFin’s obligations. Accordingly, FMS’s obligations, including the notes offered hereby, are effectively backed by the full faith and credit of the Federal Republic. See “Responsibility of the Federal Republic for FMS-WM.” PRICE 99.981% AND ACCRUED INTEREST Underwriting Price to Discounts Proceeds to Public(1) And Commissions(2) FMS-WM(1) (3) Per note .................................... 99.981% 0.125% 99.856% Total ...................................... $1,999,620,000 $2,500,000 $1,997,120,000 (1) Plus accrued interest, if any, from November 21, 2012. (2) FMS-WM has agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. (3) Before deducting expenses related to the offering. Neither the Securities and Exchange Commission, any state securities commission, the Luxembourg Stock Exchange or any foreign governmental agencies has approved or disapproved of these securities or determined whether this prospectus is accurate and complete. Any representation to the contrary is a criminal offense. The underwriters named in this prospectus expect to deliver the notes to purchasers in book-entry form only through The Depository Trust Company and through facilities of other clearing systems that participate in the Depository Trust Company, including Clearstream Banking, société anonyme, Luxembourg, and Euroclear Bank SA/NV, on November 21, 2012. Citigroup Deutsche Bank Goldman Sachs International HSBC The date of this prospectus is November 14, 2012 Table of Contents Page ADDITIONAL INFORMATION ........................................................... 4 PROSPECTUS SUMMARY .............................................................. 5 RECENT DEVELOPMENTS ............................................................. 10 FMS-WM ......................................................................... 10 The Federal Republic of Germany ...................................................... 10 USE OF PROCEEDS .................................................................... 15 PRESENTATION OF FINANCIAL INFORMATION .......................................... 15 EXCHANGE RATE INFORMATION ...................................................... 15 CAPITALIZATION AND INDEBTEDNESS ................................................. 16 FMS-WM ............................................................................. 17 Overview .......................................................................... 17 Creation and Legal Status ............................................................. 17 Relationship with the Federal Republic of Germany ........................................ 18 Business and Operations .............................................................. 20 SELECTED FINANCIAL INFORMATION .................................................. 28 ECONOMIC CONDITIONS AND MARKET DEVELOPMENTS ................................ 30 Economic Developments in Key Regions ................................................ 30 Real Estate Markets ................................................................. 30 Infrastructure Markets ............................................................... 31 Financial Institutions and Covered Bonds ................................................ 31 Public Sector ....................................................................... 31 ABS Markets ...................................................................... 32 FINANCIAL REPORT – NET ASSETS, FINANCIAL POSITION AND RESULTS OF OPERATIONS ....................................................................... 33 Net Assets ......................................................................... 33 Financial Position ................................................................... 35 Results of Operations ................................................................ 36 Overall Appraisal ................................................................... 38 RISK REPORT ......................................................................... 39 Basics of Risk Management ........................................................... 39 Organizational Structure of Risk Management ............................................ 40 Principles of Risk Management ........................................................ 41 Counterparty Default Risks ........................................................... 41 Watchlist and Problem Assets ......................................................... 48 Market Risks ....................................................................... 49 Liquidity Risks ..................................................................... 51 Operational Risks ................................................................... 54 Other Risks ........................................................................ 56 Assessment of the Overall Exposure and Outlook .......................................... 57 INTERNAL CONTROL / RISK MANAGEMENT SYSTEM RELEVANT TO THE FINANCIAL REPORTING PROCESS (ICS/RMS) ..................................................... 59 MANAGEMENT AND EMPLOYEES ...................................................... 61 Supervisory Board .................................................................. 61 Executive Board .................................................................... 61 Management Board .................................................................. 62 Employees ......................................................................... 63 DEBT RECORD ........................................................................ 64 DESCRIPTION OF NOTES .............................................................. 64 General ........................................................................... 64 Interest ........................................................................... 64 Fiscal Agent ....................................................................... 64 Payment of Principal and Interest ....................................................... 64 Redemption ........................................................................ 65 No Payment of Additional Amounts .................................................... 65 Ranking ........................................................................... 65 Negative Pledge .................................................................... 65 Events of Default ................................................................... 65 Notice ............................................................................ 66 Amendments (Collective Action Clause) ................................................ 66 Page Jurisdiction ........................................................................ 67 Governing Law ..................................................................... 67 Further Issues ...................................................................... 67 Repurchase ........................................................................ 67 Notices ........................................................................... 67 CLEARING AND SETTLEMENT ......................................................... 68 Certification and Custody ............................................................. 68 Payments .......................................................................... 68 Transfers .......................................................................... 68 The Clearing Systems ................................................................ 69 Global Clearing and Settlement Procedures ............................................... 71 RESPONSIBILITY OF THE FEDERAL REPUBLIC FOR FMS-WM ............................. 73 SoFFin’s Liquidity Support and Loss Compensation Obligations .............................. 73 The Federal Republic’s Liability for SoFFin’s Obligations ................................... 73 TAXATION ........................................................................... 74 United States Taxation ............................................................... 74 German Taxation ................................................................... 77 UNDERWRITING ...................................................................... 80 Settlement ........................................................................ 80 Other Relationships ................................................................. 80 Selling Restrictions .................................................................. 81 LEGAL MATTERS ..................................................................... 82 AUTHORIZED REPRESENTATIVE ....................................................... 83 INDEPENDENT AUDITORS ............................................................