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SINGAPORE, 24 June 2024-- BondbloX Bond Exchange (BBX), the world’s first fractional bond exchange, has announced it has integrated with ICE Bonds to offer access to U.S. corporate, municipal and treasury bond liquidity during ICE Bonds’ extended trading hours, which allows for trading in USD liquidity during U.S., European and Asian hours. ICE Bonds offers fixed income trading for institutional investors, wealth management and investment firms seeking access to U.S. bond liquidity.Through its relationship with ICE Bonds, BondbloX now provides individual investors the ability to buy, track and trade US bond liquidity at the touch of a button through the BondbloX platform. U.S. liquidity will be available to trade on the BondbloX platform from 1 p.m. Singapore time Monday through Friday.&nbsp;“As we continue to help drive trading strategies and real-time investment decision-making for individual investors across the globe, we’re excited to work with ICE Bonds to provide greater transparency and deeper USD liquidity across fixed income markets on our platform,” said Rahul Banerjee, CEO of BondbloX. “We launched the BondbloX platform for individual investors last year to simplify the buying, tracking and trading of bonds, and by working with ICE Bonds, we’re expanding our offering to offer deeper access to USD bond liquidity.”The BondbloX platform, inaugurated in October 2020 for institutional offering, uses an exchange model for all-to-all order matching contrasting with the over-the-counter model that currently exists with dealers servicing individual investors over the telephone. The BondbloX platform subsequently extended its global service offering to eligible individual investors with its launch of Asia’s First Bond Trading Platform for Individual Investors in October 2023.&nbsp; By working with ICE Bonds, investors on the BondbloX platform now have access to US treasury and US corporate bond liquidity during U.S., European and Asian trading hours.“We are delighted to have BondbloX be the first platform to offer their customers access to our expanded liquidity network,” said Pete Borstelmann, President, ICE Bonds. “By extending the trading hours of our platform, we’re not only broadening the depth and breadth of our network, but also enhancing the value of the liquidity within it.&nbsp; This underscores our commitment to providing our clients with greater accessibility and enriched trading opportunities.”ICE Bonds is a part of Intercontinental Exchange (NYSE: ICE), a leading global provider of technology and data.&nbsp;About Intercontinental Exchange<a href="https://www.ice.com/">Intercontinental Exchange, Inc.&nbsp;</a>(NYSE: ICE) is a Fortune 500 company that designs, builds, and operates digital networks that connect people to opportunity. We provide financial technology and data services across major asset classes helping our customers access mission-critical workflow tools that increase transparency and efficiency. ICE’s futures, equity, and options&nbsp;<a href="https://www.theice.com/about/exchanges-clearing">exchanges&nbsp;</a>-- including the&nbsp;<a href="https://www.nyse.com/">New York Stock Exchange&nbsp;</a>-- and&nbsp;<a href="https://www.theice.com/solutions/clearing">clearing houses&nbsp;</a>help people invest, raise capital and manage risk. We offer some of the world’s largest markets to trade and clear energy and environmental products. Our fixed income,&nbsp;<a href="https://www.theice.com/about/fixed-income-data">data services&nbsp;</a>and execution capabilities provide information, analytics and platforms that help our customers streamline processes and capitalize on opportunities. At&nbsp;<a href="https://www.theice.com/about/mortgage-technology">ICE Mortgage Technology&nbsp;</a>, we are transforming U.S. housing finance, from initial consumer engagement through loan production, closing, registration and the long-term servicing relationship. Together, ICE transforms, streamlines, and automates industries to connect our customers to opportunity.Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located&nbsp;<a href="http://www.intercontinentalexchange.com/terms-of-use">here&nbsp;</a>. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 8, 2024.&nbsp;About ICE BondsTrading and execution services are offered through ICE Bonds Securities Corporation or ICE Bonds, member&nbsp;<a href="https://www.finra.org/">FINRA</a>, MSRB and <a href="https://www.sipc.org/">SIPC</a>. The information found herein, has been prepared solely for informational purposes and should not be considered investment advice, is neither an offer to sell nor a solicitation of an offer to buy any financial product(s), is intended for institutional customers only and is not intended for retail customer use.&nbsp;About BondbloXFounded in 2016, The BondbloX Bond Exchange is the world’s first fractional bond exchange. It works towards one vision - provide easy access to bonds for all investors.&nbsp;It is regulated as a Recognized Market Operator by the Monetary Authority of Singapore and is backed by Citi, MassMutual Ventures as investors. Additional information may be found at&nbsp;<a href="https://bondblox.com/">https://bondblox.com/</a>

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BondbloX Bond Exchange (BBX), the world’s first fractional bond exchange, has announced it has integrated with ICE Bonds to offer access to U.S. corporate, municipal and treasury bond liquidity during ICE Bonds’ extended trading hours, which allows for trading in USD liquidity during U.S., European and Asian hours. 

BondbloX to Offer Access to U.S. Corporate, Municipal and Treasury Bond Liquidity with Integration to ICE Bonds

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BondbloX has successfully obtained a SOC 2 Type II accreditation, showcasing our commitment to the highest standards of data security and compliance. This achievement reflects our dedication to safeguarding your trust and ensuring the confidentiality and integrity of your data.The EY team has played a crucial role in evaluating and enhancing our security posture, ensuring alignment with industry standards and best practices. Their comprehensive gap assessment has provided valuable insights into areas of improvement, and their dedication to completing the SOC 2 report reflects our commitment to maintaining a secure and reliable environment for our stakeholders. &nbsp;

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BondbloX has successfully obtained a SOC 2 Type II accreditation, showcasing our commitment to the highest standards of data security and compliance.

BondbloX Obtains SOC 2 Type II Accreditation

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Singapore, 9 November 2023&nbsp;– Singapore-based Fintech&nbsp;<a href="https://bondblox.com/">BondEvalue Pte. Ltd</a>. has added new investor Beacon Venture Capital, the corporate venture arm of Thailand’s Kasikornbank, to its cap table as part of a US$6m Series B round. Beacon Venture Capital joins existing shareholders MassMutual Ventures and Citigroup who also participated in the round.&nbsp;Other investors include existing shareholders Potato Productions, a company helmed by entrepreneur Lee Han Shih, and Octava, a Singapore-based family office.&nbsp;The latest round follows a Series A raise of US$6m in 2021. This additional funding will allow the Company to scale BondbloX Bond Exchange (BBX), its digital exchange for trading fractional and full-size bonds, as well as grow its international expansion to Gujarat International Finance Tec-City (GIFT City) in India, which recently went live.&nbsp;Powered by distributed ledger technology, BondbloX enables investors to buy and sell bonds in denominations of US$1,000 instead of the usual US$200,000, and through a public exchange where prices are highly transparent.&nbsp;BBX has seen strong interest from global clients since launching the platform to individual investors last month. BBX also has future plans to list US Bonds (Treasuries as well as Corporate Bonds) on the platform.This announcement follows the announcement made last month that Citi is the first digital custodian participant of BondbloX Bond Exchange (BBX) for the institutional market. The partnership will allow Citi’s clients that meet certain criteria to become BBX participants and begin trading bonds (both fractionalised and full-sized) almost immediately.&nbsp;“We are immensely honoured to welcome Beacon VC to our Series B round, as well as other new and existing shareholders including Citi and MassMutual Ventures,” said Dr. Rahul Banerjee, Co-Founder and CEO. “The bond market is broken globally, and BondbloX is on a mission to allow individual investors the same access to the market that institutional firms enjoy. We look forward to working together with Beacon VC and other investors to redefine Bond investing” he added.&nbsp;In joining the recent round Thanapong Na Ranong, Managing Director of Beacon VC, said, “BondbloX is truly innovating Bond investing and disrupting an asset class which has lagged in digitization. The use of distributed ledger technology coupled with traditional financial custodians excites us and has great potential to re-shape the bond market for all.”Henry Salmon, Head of Investments, Securities Services, Citi, said:&nbsp;“The digitization of markets, assets and processes is an accelerating industry trend and a key investment theme for Citi. We are delighted to continue our investment in BondbloX. I believe their embrace of new technology and the innovation in the bond market has delivered a unique value proposition.”&nbsp;About Beacon Venture CapitalBeacon VC&nbsp;is a wholly-owned corporate venture capital fund of Kasikornbank PLC (SET: KBANK), a leading commercial bank in Thailand with the highest mobile penetration and largest SME base. Beacon VC focuses on strategic investments in early to growth-stage technology startups covering financial technology (fintech), consumer internet, and enterprise technology. Beacon VC has also recently launched an impact investment mandate, to invest in digital technologies which create a positive impact on the environment and society.&nbsp;Media Contacts:Cognito, for BondbloX:&nbsp;bondblox@cognitomedia.com

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BondbloX raises US$6 million in Series B funding round - Beacon VC, the corporate venture arm of Thailand’s Kasikornbank, joins as new investor

BondbloX raises US$6 million in Series B funding round

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<ul><li>The platform launched in Asia, but is accessible to individual investors across the globe,&nbsp;</li><li>It aims to democratize access to the global bond markets via a fractional investment model</li></ul>SINGAPORE, 25 October 2023:&nbsp;<a href="https://bondblox.com/">BondbloX</a> Bond Exchange (BBX), the world’s first fractional bond exchange, has today announced that its unified platform to track and trade bonds will be available for individual investors globally<a href="#_ftn1">[1]</a>. The launch of the platform offering, which follows the exchange’s success with its institutional offering, allows BondbloX to redefine the way that individual investors access bonds.Through the BondbloX platform, individual investors will be able to buy, track and trade bonds at the touch of a button through the integrated app. BondbloX uses an exchange model for all-to-all order matching contrasting with the over-the-counter model that currently exists with phone dealers servicing individual investors. This allows individual investors to access transparent inter-bank bond pricing with no hidden spreads. The platform currently offers a wide selection of USD and SGD denominated corporate and sovereign bonds and will soon enable trading of US treasuries and US corporate bonds.Through BondbloX, individual investors will have access to:&nbsp;<ul><li>A transparent fee structure of 0.20% per trade and 0.20% p.a. of bond holdings</li><li>A wide selection of 70+ fractional USD and SGD bonds with a minimum denomination of just $1,000</li><li>A wider selection of 10,000+ full-sized bonds of $200,000 / S$250,000</li><li>Digital access to the platform from their smartphone.</li></ul>Rahul Banerjee, CEO and Co-Founder of BondbloX commented: “Bonds are becoming an increasingly attractive asset class in the face of market volatility, with the opportunity for stability and higher returns. However, they remain unattainable for many investors due to the complexity of buying, tracking and trading this asset class, and we know that many individual investors simply don’t know where to begin when it comes to the world’s bond markets. The launch of BondbloX’s offering to individual investors is designed to solve this issue.&nbsp;“We want to simplify access to bonds, giving a new audience the opportunity to diversify their portfolios and lock in these higher yields. We’re excited to be able to reach individual investors not only in Asia, but across the world, and democratise access to this exciting asset class through fractional investing,”&nbsp;he added.BondbloX has been active within the institutional market since 2016 and is backed by Citi and MassMutual Ventures. The exchange is also regulated as a Recognised Market Operator (RMO) by the Monetary Authority of Singapore (MAS).&nbsp;This announcement follows the&nbsp;<a href="https://bondblox.com/announcements/citi-to-become-first-digital-custodian-on-bondblox-bond-exchange">news last month</a> that saw Citi revealed as the first digital custodian participant of&nbsp;<a href="https://bondblox.com/">BondbloX Bond Exchange (BBX) for the institutional market.</a> The partnership will allow certain Citi clients to become BBX participants and begin trading bonds (both fractionalised and full-sized) almost immediately.&nbsp;Individual investors can sign up to trade bonds on BondbloX by&nbsp;<a href="https://onelink.to/tzzxev">clicking here</a>.<a href="#_ftnref1">[1]</a> subject to any local specific requirements

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BondbloX Bond Exchange (BBX), the world’s first fractional bond exchange, has today announced that its unified platform to track and trade bonds will be available for individual investors globally.

BondbloX Launches Asia’s First Bond Trading Platform for Individual Investors

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<h4>Introduction</h4>Fractionalization has captured the imagination of the investing public. The promise is simple - everyone can buy anything. Fractional assets like stock or BondbloX allow anyone to buy a slice of an Apple share even if they don’t have or want to spend the $147 odd that it is currently trading at, or a fraction of the HSBC 6% bond, that is currently available at a minimum investment size (denomination) of $200,000. Fractionalization powers compossibility, which is the ability to create or compose a customized portfolio for each investor. Let’s say that a wealthy investor currently wishes to invest $1 million in Asian bonds. With the $200,000 minimum denomination, their portfolio can only have five bonds, which would make it concentrated. The other option is to put the money in a fund but then you lose the customization. If a private bank or an independent financial advisor wishes to do both diversification and customization, then you need fractionalization. The other big trend being observed is the rise of self-directed investors who trade on online brokerages, which are attracting millions of first-time investors. Many of them like to dip their toes first (invest smaller amounts) and therefore tend to like fractional assets.<h4>How was it done in the past and what are the risks</h4>Fractionalization per se is not new. Pass-through notes have existed for decades. These involve the creation of a special purpose vehicle (SPV) which acquires the assets and then issues the fractional notes. The main disadvantage is that these SPVs are quite often located in offshore tax havens and in the days of the Panama or Pandora papers, keep coming up for scrutiny for their lack of transparency. Less inflammatory but equally worrisome is that they often have many layers of accountants, fund administrators etc. that need to work together to achieve the desired outcome. Such structures typically have a sponsor and only the sponsor makes markets or otherwise sell these notes. This makes them even more illiquid.A broker can also do a simple fractionalization wherein it buys on its balance sheet and sells the pay-off to its clients. The on-balance sheet exposes the buyer to default risk of the broker. Unlike during the Lehman Brothers default saga , buyers generally understand this risk in a much better way today.The modern method of doing fractionalization is with the use of Distributed Ledger Technology (DLT). This method is used by BondbloX and results in the creation of Bond Depository Receipts (BDR). The original full-sized bonds are kept (lock-boxed) with a designated custodian and then the notes are issued by an exchange (un-sponsored) or by the original issuer for raising new money (sponsored). This structure has been in use for many years across the equity markets. In the USA, this structure is called an American Depository Receipt (ADR) (<a href="https://www.sec.gov/investor/alerts/adr-bulletin.pdf">SEC, 2012</a>). While the focus of ADR was to change the currency of the issuance, it also had a fractionalization / aggregation feature to get a meaningful nominal share price.Legally, this structure has been around for a long time. DLT further increases its transparency and reduces both the time and cost for the issuance of the depository receipt. In the new international financial services centre (IFSC) at Gift City, India’s NSE plans to use the un-sponsored DR structure to create liquidity in US stocks for Indian retail investors (<a href="https://www.business-standard.com/article/markets/nse-to-start-trading-in-us-stocks-at-gift-city-list-of-scrips-not-yet-out-121080901677_1.html">Business Standard, 2021</a>).Another major benefit of fractionalization of assets such as bonds with high minimum denominations is the ability for the investor to now create a diversified portfolio with a much lower capital. A minimum trading lot of $1,000 can help an investor build a reasonably well-diversified portfolio with as little as $10,000 and a very well-diversified portfolio with $50,000. This kind of diversification significantly reduces the concentration risk in a portfolio especially with bonds where more focus tends to be on the return OF principal rather than return ON principal. It also improves access to markets that are traditionally not available for all investor types, thereby furthering the democratising of financial markets.Investors with some risk appetite can set-aside small amounts to invest in BondbloX trading at discounts. This should generate a decent capital upside apart from a rich return by way of coupon payment. There are always such opportunities in the fixed income market. Fractionalization allows investors to take smaller bets which they would otherwise not.Four Tests For Perfect Fractionalization• Uniform claim: The claim under the fractional assets should be as per the formula Fractional claim = Value of Asset / Number of fractions. The only thing in the asset that can’t be fractionalized is the voting rights. These rights should then not be sold away.• Bare trusts should be used to convey the rights from the original asset to the fraction• Every entity in the fractionalizing process such as the custodian banks and the issuing exchange should be a regulated financial institution. The entire process should be in the public domain and the entities involved should not take principal positions in the assets, so that there is no conflict of interest.• Dual Fungibility should exist between the original assets and the fractional assets. While this dual fungibility is a must, it is also ideal that the fungibility happens without economic friction i.e. at zero cost and zero time.Lastly, I leave you with a conundrum, it holds to common wisdom that all told, the fractional asset will be more expensive than the full asset. For example, a piece of sashimi is more expensive per gram than buying the full Tuna. However, financial assets can sometimes behave counter-intuitively if the fractions bring in a new source of demand. This was the original reason of the ADRs. Other reasons or circumstances which may create this is if the demand goes up after fractionalization. Most CFOs with the notable exception of the Berkshire Hathaway shares (currently at $427,700 apiece), keep doing splits to keep the nominal price in balance. In the bond market with the lack of dealer inventory (where buyers can’t buy and sellers can’t sell), the increase in the number of investors are likely to provide a strong improvement in the market efficiency.To conclude, DLT and the depository receipt structure follow a transparent and market-based mechanism to fractionalize assets. Dual fungibility ensures that the additional liquidity is additive and complements extant liquidity. Let everyone buy anything!<h4>References</h4>Modak, Samie (2021, August 10). NSE to start trading in US stocks at Gift City, list of scrips not yet out. Business Standard. Retrieved October 15, 2021, from <a href="https://www.business-standard.com/article/markets/nse-to-start-trading-in-us-stocks-at-gift-city-list-of-scrips-not-yet-out-121080901677_1.html">https://www.business-standard.com/article/markets/nse-to-start-trading-in-us-stocks-at-gift-city-list-of-scrips-not-yet-out-121080901677_1.html</a>OECD (2020). The Tokenisation of Assets and Potential Implications for Financial Markets, OECD Blockchain Policy Series. Retrieved October 15, 2021, from <a href="https://www.oecd.org/finance/The-Tokenisation-of-Assets-and-Potential-Implications-for-Financial-Markets.pdf">https://www.oecd.org/finance/The-Tokenisation-of-Assets-and-Potential-Implications-for-Financial-Markets.pdf</a>SEC (2012, August). American Depository Receipts, SEC Investor Bulletin. Retrieved October 15, 2021, from <a href="https://www.sec.gov/investor/alerts/adr-bulletin.pdf">https://www.sec.gov/investor/alerts/adr-bulletin.pdf</a>Woo. G., &amp; Thiel, S. (2020, December 1). Fractionalizing the future of asset ownership, securely. Nasdaq. Retrieved October 15, 2021, from <a href="https://www.nasdaq.com/articles/fractionalizing-the-future-of-asset-ownership-securely-2020-12-01">https://www.nasdaq.com/articles/fractionalizing-the-future-of-asset-ownership-securely-2020-12-01</a>.

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Fractionalization has captured the imagination of the investing public. The promise is simple - everyone can buy anything. The BondbloX Bond Exchange is the world’s first fractional bond exchange, allowing investors to buy and sell bonds in denominations of SGD/US$1,000 000 instead of the usual SGD 250,000/US$200,000, providing significant diversification opportunities. The article elaborates on the advantages fractionalization brings and how bonds are fractionalized using distributed ledger technology at the BondbloX Bond Exchange.

Honey, I shrunk the bonds! But you can funge them back again!

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<h4>What is BondbloX?</h4>BondbloX represents fractional bonds traded on the BondbloX exchange, and contains fractional interests in the Underlying Bond.Conceptually, BondbloX works exactly like American Depositary Receipts (ADRs) or Global Depository Receipts (GDRs) where an issuer, in this case, BondEvalue Pte. Ltd (a Recognized Market Operator under the Monetary Authority of Singapore), re-lists the original bond (Underlying Bond) onto an exchange in a smaller minimum denomination, thereby allowing it to be traded in fractional sizes.The BondbloX created works using simple pass-through mechanics where the beneficial entitlements to the Underlying Bonds are conferred to the BondbloX holder, based on the fractional size held.<h4>BondbloX Exchange</h4>Structurally, BondbloX exchange works entirely different from traditional bond markets, as it uses an exchange model for all-to-all order matching. This contrasts the over-the-counter model that currently exists with phone dealers servicing individual investors.Settlement also happens instantaneously on blockchain and participants on the blockchain do not face the usual T+2 or T+3 settlement cycles when trading BondbloX.By changing the order flows, order matching processes and allowing BondbloX to trade electronically on an exchange model, we have a great efficiency advantage over the current human-dependent over-the-counter model. All these cost savings translate into better prices and lower fees.<h4>Converting Bonds to BondbloX (and back to bonds)</h4>The BondbloX Exchange, like any other exchange, lists eligible instruments that can be traded on it. The curation of the bond universe is jointly performed by the exchange, its members and market makers, to carefully bring diversification opportunities to investors in terms of industry, tenor, ratings, and also a decent yield pick-up.For any listed BondbloX, investors may deposit with the exchange the Underlying Bond. This will be custodised and safeguarded by one of our Designated Custodians, Citibank N.A., or The Northern Trust Company. Once deposited, the equivalent holdings will be converted to BondbloX and credited to the sender’s BondbloX account, making it available to trade.BondbloX is also dual-fungible, i.e. conversion back to the Underlying Bond is also possible. Investors holding sufficient BondbloX holdings meeting the minimum denomination may choose to convert their BondbloX into Underlying Bonds and have it sent back to their own custodians.<h4>Record of Ownership of BondbloX</h4>Ownership of BondbloX is recorded on blockchain and the blockchain is maintained by multiple parties (including our Designated Custodians) each deploying nodes to run consensus that together share the same data.&nbsp;The debentures register maintained on blockchain provides the definitive record of BondbloX ownership. Blockchain maintains data in an immutable fashion where every transaction is recorded and cannot be altered without other parties knowing.

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An overview of what is BondbloX, how the BondbloX Bond exchange works, how bonds are converted to BondbloX and how the record of ownership of BondbloX is done. 

How it Works

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This article was originally published on&nbsp;<a href="https://www.hyperledger.org/learn/publications/bondevalue-case-study">Hyperledger</a>.As many industries struggled to find their footing amid the aggressive headwinds caused by the COVID-19 pandemic, the global bond market has managed to thrive.With near-zero interest rates implemented worldwide to ease the financial burdens caused by the coronavirus, the demand for bonds soared with global bond issuances increasing 16% in 2020, according to <a href="https://www.spglobal.com/ratings/en/research/articles/201026-credit-trends-global-financing-conditions-bond-issuance-is-expected-to-finish-2020-up-16-and-decline-in-20-11708610#:~:text=Global%20new%20bond%20issuance%20through,the%20same%20period%20in%202019.">S&amp;P Global</a>. By the third quarter of 2020, the <a href="https://www.icmagroup.org/Regulatory-Policy-and-Market-Practice/Secondary-Markets/bond-market-size/">International Capital Market Association</a> valued the international bond market at a whopping $128.3 trillion.But for those interested in investing in international bonds, the bond markets in Asia and Europe are particularly hard to break into for two reasons: high investment thresholds and lack of electronic infrastructure.In the international bond markets, the minimum investment is $200,000. “This makes it inaccessible for even fairly wealthy people,” says Rajaram Kannan, co-founder and CTO of <a href="https://bondevalue.com/">BondEvalue</a>, a Singapore-based fintech company that focuses on Asian bond markets. Typically, only those who have $5 million or above can afford to diversify their portfolio, and they pour about one-third of their wealth into bonds.But there are roughly 500 million people who are categorized as “HENRY”-s, or high earners not rich yet, who have assets that range from $100,000 to $1 million. This new class of investors is eager to expand their portfolio, yet they find the bond market impenetrable because of the high barrier to entry. “As a result, the liquidity in the bond markets is not even comparable to where the other capital markets are,” says Kannan. “The opportunity for growth is immense.”Even when investors have the means to invest in the bond market, managing bonds can also be a challenge. “One of the pain points in the bond markets is that the trading still happens over phone calls,” explains Kannan. “If you’re a bond investor who wants to buy or sell bonds, you have to call up your relationship manager in your bank or brokerage and go from there. The workflows are not entirely electronic.” Another pain point in the bond market is the extra costs that accrue because of the number of intermediaries involved between the end investor and the actual market. Everyone takes their cut.Until now! The team at BondEvalue recognized the need to upend the global bond market and create a modern infrastructure that makes managing bonds faster, more accessible, and more technologically advanced.“At BondEvalue, our vision was a solution where investors can actually trade bonds on the go from a brokerage app just like they can trade in equity,” says Kannan.In November 2019, BondEvalue launched the <a href="https://www.bondblox.com/">BondbloX Bond Exchange</a>, replacing the traditional over-the-counter trading experience with the world’s first fully regulated blockchain-based bond exchange that allows consumers to instantaneously and transparently trade bonds in smaller denominations of $1,000 each.Fully licensed and <a href="https://thefintechtimes.com/bondevalue-approved-by-monetary-authority-of-singapore-to-operate-blockchain-based-bond-exchange/">regulated by the Monetary Authority of Singapore</a> as a Recognized Market Operator, the BondbloX Bond Exchange operates under a strategic partnership with <a href="https://www.northerntrust.com/united-states/pr/2019/northern-trust-bondevalue-fractionalised-bond-ownership-blockchain">Northern Trust</a>, which is the global custodian partner for the exchange. Together they deliver integrated asset servicing and digital ownership of fractionalized fixed income bonds on a permissioned blockchain network. And from the beginning, the BondbloX Bond Exchange has attracted powerful players in the financial sphere who have signed on as launch partners such as <a href="https://bondevalue.com/news/the-bondblox-bond-exchange-goes-live/">UOB Kay Hian</a>, one of the largest brokerage firms in Singapore.“Asian bonds remain attractive to local and regional investors despite the global uncertainty and market downturn, and we are confident that this partnership will provide customers access to new sources of returns and opportunities to build a more diversified portfolio,” says Wilhem Lee, Senior Executive Director at UOB Kay Hian.“We believe BondbloX will be an industry game changer,” says BondEvalue founder and CEO Rahul Banerjee. “Once investors have experienced BondbloX, they will take to online bond trading with the same fervor they do for equity trading.”<h4>Powering the “Beast” with Hyperledger Sawtooth</h4>“Exchanges are like big tech animals,” says Kannan. “They are beasts.”The BondEvalue team realized the only way to feed this beast and build an innovative, groundbreaking global bond exchange would be to deploy <a href="https://www.hyperledger.org/use/sawtooth">Hyperledger Sawtooth</a>, the open-source blockchain framework hosted by the <a href="https://www.linuxfoundation.org/">Linux Foundation</a>. As a modular and flexible architecture, Hyperledger Sawtooth allows developers to separate the core system from the application domain so smart contracts can specify the business rules for applications without needing to know the underlying design of the core system.“We are in the space where we need to own and build our own tech,” says Kannan. “And we have to give credit to the Hyperledger community and to the Linux Foundation for creating this framework and making our solution possible.”Thanks to Sawtooth’s model, which uses a single node type, “the deployment is fairly simple. Even if somebody doesn’t host a node, it’s quite easy for anyone to sign and submit their transactions,” says Kannan. “If a bank already has a trading app and wants to connect to the BondbloX Bond Exchange, it is relatively easy using contemporary REST or Websocket APIs.”Sawtooth also has rich support for standard and custom events, which helped to develop the distributed apps using an event-driven framework. Further, the permissioning framework was a great fit for creating a broad but closed network of approved participants.Finally, the Practical Byzantine Fault Tolerance is “the perfect consensus” for the BondbloX Bond Exchange. “The reason for using blockchain is to create a trusted network, and we wanted the right protocol that allows for that,” says Kannan.A Sawtooth PBFT network is permissioned and only an administrator can add or remove nodes. This Hyperledger solution also offers a non-forking ledger consensus, which was a key factor in building the exchange. “We can’t tell people that their trade succeeded and then come back after 10 confirmations and say, ‘Oops, sorry, it didn’t work,'” says Kannan. “We needed a framework where when it’s committed, it’s done.”As the BondbloX exchange continues to evolve, the team at BondEvalue remains committed to developing Sawtooth along with Hyperledger’s open source community. “We are looking at how we can contribute back. We have, in fact, made a couple of contributions that are in the process of being assessed by the community,” says Kannan. “We want to add value to the project.”<h4>How it Works: Lower Minimums, Higher Liquidity</h4>The building blocks of the BondbloX Bond Exchange are the BondbloX themselves.Using depository receipts as a model, traditional bonds are brought into the BondbloX Bond Exchange through designated market makers, member participants, or their end individual clients from the secondary market. A designated custodian on the exchange (in this case, Northern Trust) confirms receipt of the underlying bond into the blockchain, which then triggers the bond to be divided into fractionalized BondbloX worth $1,000 each and backed one-to-one on the blockchain.“When a $200,000 bond comes in, the member receives $200,000 in BondbloX which is fractionalized into 200 BondbloX of $1,000 each and can be traded on the BondbloX Bond Exchange,” explains Kannan.With the blockchain infrastructure, settlement on the BondbloX Bond Exchange is nearly instantaneous, occurring on a T+0 basis. So instead of waiting for the normal two-day settlement cycle for traditional bond transactions, BondbloX trades are final within seconds, reducing counterparty settlement risks for investors.However, members who trade in BondbloX are not necessarily locked into the exchange. If a better opportunity in the secondary market arises, the BondbloX are “dual fungible.” Members can request via the custodian to withdraw the BondbloX from the exchange and deliver an OTC bond to a desired venue, which in turn reduces the quantity of BondbloX available to trade on the exchange. “It’s important that members feel that they’re able to take whatever investment opportunities are available to them,” says Kannan.Ultimately, BondEvalue is confident that the best opportunity is to stay within the BondbloX Bond Exchange. “We believe as an exchange, because you’re able to sell at lower minimums, you’ll actually have a much more liquid market that more investors will be capable of investing and buying in,” says Kannan.<h4>Collaboration and Configuration</h4>On the backend, “our governance model is collaborative,” says Kannan.But there are strict rules of engagement for partners who are hosting nodes on the network. While BondEvalue is responsible for most of the work behind updating the nodes with new software, the governing council meets regularly to review upcoming releases and determine a date that is mutually beneficial so that all members can prepare for the updates.“The main challenge is that each release has to be synchronized. Since we use all the nodes, they need to have the exact same software and the exact same version of the transaction process for the system to work as designed,” says Kannan. “If a partner hosting a node doesn’t upgrade, then they will go off chain.”For the frontend, the BondbloX Bond Exchange is a cloud-native application hosted on AWS and accessible via distributed apps on the web. “Because of the event-driven framework that Sawtooth supports, we were able to create a completely asynchronous cloud-native environment that provides the same experience for investors and members that they are accustomed to when trading other exchange-based securities,” says Kannan.To do so, the BondbloX app leverages IoT technology. “We integrated an IoT core solution so that we treat your browser like an IoT device that can deliver real-time notifications,” says Kannan.To avoid committing personally identifiable information on the blockchain, the team also implemented an external database so that personalized user and client information sit outside the network while a pseudo-anonymized identifier is leveraged on the exchange.“Within the blockchain, we had to make it really efficient for the transactions we process or the smart contracts we run, but outside the chain we can query in a really rich format” says Kannan. “So, you’re known by an anonymized ID in the blockchain. But then we merge that data with your real identity in the external database, and that information shows up in our app, which delivers a first-class user experience.”The BondbloX exchange is regulated by the Monetary Authority of Singapore (MAS). After less than a year in the MAS regulatory sandbox — a construct in Singapore where fintech companies test their innovative financial service solutions in the marketplace but under regulatory scrutiny — BondEvalue’s blockchain-based bond exchange graduated after successfully concluding the proof of technology and business model in October 2020.“BondbloX is the latest example of a groundbreaking application of blockchain technology in the capital markets enabled by experimentation in the MAS regulatory sandbox,” says Sopnendu Mohanty, chief fintech officer of the Monetary Authority of Singapore. “We are excited to see productionalization of blockchain in the bond trading market and look forward to great adoption in transforming financial services.”&nbsp;<img src="/uploads/Fractionalising_bonds_on_blockchain_diagram_f7f2f95a0e.jpg" alt=""><h4>The Future of Financial Inclusion</h4>When the BondEvalue team first introduced the BondbloX Bond Exchange, troubleshooting was at the forefront of their concerns.“My biggest worry was what if, what if, what if …” says Kannan. “Today we have gone through all the scenarios and we know what to do if there are issues. We know what those issues are, and we know that they’re not going to bring us down.”So, what’s next? Scaling the BondbloX exchange.BondEvalue continues to engage more member participants such as Taurus Wealth Advisors, the leading fee-based, multi-family wealth management firm in Singapore, and Amstel, an institutional fixed-income broker with operations across Asia and Europe. BondEvalue is also expanding its footprint with a joint venture partnership in Mexico. The company’s goal is to empower a more diverse pool of investors and introduce them to institutional-grade opportunities in the bond market through its cutting-edge blockchain solution.“We are excited to be working with BondEvalue to support a blockchain application that will broaden financial inclusion by opening up institutional bond markets to more investor types,” says Justin Chapman, global head of Market Advocacy &amp; Innovation Research at Northern Trust.“Our vision is to have over 25 million people in Asia invest in bonds in the next five years, from 500,000 individuals currently,” says Banerjee. “This is no small ambition, but we are hopeful as we have seen millions of people forced by COVID-19 lockdowns going online in the last six months for their everyday transactions.”With the continued expansion of the BondbloX Bond Exchange, says Banerjee, “our vision of extending bond trading from Wall Street to Main Street is becoming a reality.”&nbsp;<img src="/uploads/BIFT_and_Hyperledger_Sawtooth_diagram_aa786ba3f5.jpg" alt=""><h4>About Hyperledger</h4>Hyperledger is an open source collaborative effort created to advance cross-industry blockchain technologies. It is a global collaboration including leaders in finance, banking, Internet of Things, supply chains, manufacturing and Technology. The Linux Foundation hosts Hyperledger under the foundation. To learn more, visit <a href="https://www.hyperledger.org">https://www.hyperledger.org</a>&nbsp;

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How BondEvalue Launched the World’s First Fractional Bond Exchange with Hyperledger Sawtooth

use-of-dlt-hyperledger-sawtooth

The Issuer may elect, in its sole discretion, to cancel all or part of any payment of interest in respect of the Notes (including, for the avoidance of doubt, any related Additional Amounts) which is otherwise scheduled to be paid on an Interest Payment Date. In addition, payments of interest in respect of the Notes must not be in made in certain other circumstances as provided in Condition 5(j) (Interest – Cancellation of interest; prohibited interest). Interest payments in respect of the Notes will be non-cumulative. Accordingly, if any payment of interest (or part thereof) is not made in respect of the Notes then the right of the Holders to receive the relevant interest payment (or part thereof) will be extinguished (and shall not accumulate) and the Issuer will have no obligation to pay such interest payment (or part thereof), whether or not future interest payments on the Notes are paid. The cancellation or non-payment of any interest will not constitute a default for any purpose (including, without limitation, Condition 11 (Events of Default) on the part of the Issuer or entitle any action to be taken by Holders and Holders shall have no right thereto whether in a winding-up, dissolution or liquidation of the Issuer or otherwise, nor any right to demand payment from the Guarantor under the terms of the Guarantee. &nbsp;

Discretionary Interest Payments:

Following the occurrence of a Trigger Event or Viability Event, a Contingent Write-down will occur and the full principal amount of the Notes will automatically and permanently be written-down to zero on the Write-down Date. If the Issuer has given a Write-down Notice in accordance with this Condition 7, then on the relevant Write-down Date,<ul><li>(i) the full principal amount of, and any accrued and unpaid interest (whether or not due and payable) on, each Note will automatically be written down to zero, the Notes will be cancelled and all references to the principal amount of the Notes in these Terms and Conditions will be construed accordingly;</li><li>(ii) the Holders will be automatically deemed to have irrevocably waived their right to receive, and will no longer have any rights against the Issuer with respect to, repayment of the aggregate principal amount of, and payment of any accrued and unpaid interest on, the Notes written down pursuant to subclause (i) of this clause (d) (bedingter Forderungsverzicht); and</li><li>(iii) all rights of any Holder for payment of any amounts under or in respect of the Notes (including, without limitation, any amounts arising as a result of, or due and payable upon the occurrence of, an Event of Default) will become null and void, irrespective of whether such amounts have become due and payable prior to the relevant Write-down Notice Date or the Write-down Date.</li></ul>

Contingent Write-down:

Payments of interest will be made at the sole discretion of the Issuer and will be subject to mandatory cancellation if the Issuer does not have sufficient distributable profits, would not be in compliance with its minimum regulatory capital adequacy requirements or the Swiss Financial Market Supervisory Authority FINMA prohibits the Issuer from making such payment.

Discretionary Interest Payment:

If a Contingency Event, or prior to a Statutory Loss Absorption Date (if any), a Viability Event occurs, the full principal amount of the notes will be mandatorily and permanently written down. The notes are not convertible into shares of the Issuer upon the occurrence of a Contingency Event or a Viability Event or at the option of the Holders at any time. See “Terms and Conditions of the Notes—Condition 7 “Write-down”” in the Information Memorandum for the definitions of Contingency Event, Statutory Loss Absorption Date and Viability Event.<ul><li>CET1 Write-down Trigger - 7.00%, based on Credit Suisse Group AG consolidated CET1 ratio.</li></ul>

Write-down:

The Issuer may elect at its full discretion to cancel and in certain circumstances will be required not to pay (in each case, in whole or in part) the Interest Amount otherwise scheduled to be paid on any Interest Payment Date. See Condition 6.10 (Cancellation of Interest Amounts).

Cancellation of Interest Amounts:

The Current Principal Amount of the Notes will be written down if the Issuer’s Common Equity Tier 1 capital ratio falls below 5.125% (on a consolidated basis). Following such reduction, the Current Principal Amount may, at the Issuer’s full discretion, be written back up if certain conditions are met. See Condition 7 (Loss Absorption and Return to Financial Health). For the purposes of this provision, Common Equity Tier 1 capital ratio means the Common Equity Tier 1 capital of the Group expressed as a percentage of its total risk exposure amount (as calculated in accordance with the Relevant Rules (as defined in Condition 2 (Definitions and Interpretation)) and using the definition of the prudential scope of consolidation as defined in the Relevant Rules) or such other meaning given to it (or any equivalent or successor term) in the Relevant Rules.

Write-down and Write-up:

The Distribution Rate applicable to the Perpetual Securities shall be:<ul><li>(i) in respect of the period from and including the Distribution Commencement Date to but excluding the First Reset Date, 4.38 per cent. per annum payable semi-annually in arrear; and</li><li>(ii) in respect of the period from and including the First Reset Date, the Reset Distribution Rate payable semi-annually in arrear.<ul><li>First Reset Date: 17 January 2028</li><li>Reset Date(s): The First Reset Date and each date falling every 10 years after the First Reset Date</li><li>Reset Distribution Rate: Prevailing 10-Year SGD Swap Offer Rate with respect to the relevant Reset Date plus the Initial Spread plus the Step-Up Margin, payable semi-annually in arrear</li><li>Initial Spread: 2.187 per cent.</li><li>Step-Up Margin: 1.00 per cent. per annum</li></ul></li><li>In the event that a Change of Control Event (as defined in Condition 5(h) has occurred, so long as the Issuer has not already redeemed the Perpetual Securities in accordance with Condition 5(h), the then prevailing Distribution Rate shall be increased by the Change of Control Event Margin with effect from (and including) the Distribution Payment Date immediately following the date on which the Change of Control Event occurred (or, if the Change of Control Event occurs on or after the date which is two business days prior to the immediately following Distribution Payment Date, the next following Distribution Payment Date).<ul><li>Change of Control Event Margin: 1.00 per cent. per annum</li></ul></li></ul>

Change of Distribution Rate:

The Perpetual Securities may be redeemed at the option of the Issuer in whole, but not in part, on any Distribution Payment Date or, if so specified hereon, at any time on giving not less than 30 nor more than 60 days’ notice to the Perpetual Securityholders (which notice shall be irrevocable), at their Redemption Amount, (together with distribution (including any Arrears of Distribution and any Additional Distribution Amount) accrued to (but excluding) the date fixed for redemption), following the occurrence of a Change of Control Event (as defined in the applicable Pricing Supplement), where,A “Change of Control Event” occurs when:<ul><li>(i) a person or persons acting in concert acquires or acquire Control of the Issuer or the Guarantor, if such person or persons does not have or do not have, and would not be deemed to have, Control of the Issuer or the Guarantor on the Issue Date; or</li><li>(ii) the Issuer or the Guarantor consolidates with or merges into or sells or transfers all or substantially all of the Issuer’s or, as the case may be, the Guarantor’s assets to any other person, unless the consolidation, merger, sale or transfer will not result in the other person or persons acquiring Control over the Issuer, the Guarantor, or as the case may be, the successor entity.&nbsp;</li><li>“Control” means, in relation to an entity (a) ownership or control of more than 50 per cent. of the voting rights of the issued share capital of such entity or (b) the right to appoint and/or remove all or the majority of the members of such entity’s board of directors or other governing body, whether obtained directly or indirectly, and whether obtained by ownership of share capital, the possession of voting rights, contract or otherwise.</li></ul>

Redemption upon a Change of Control:

Optional Payment, Dividend Stopper, Dividend Pusher, Cumulative Deferral and Additional Distribution are applicable

Distribution Discretion:

Optional Payment, Dividend Pusher, Dividend Stopper, Cumulative Deferral and Additional Distribution are applicable.

Distribution Discretions:

Distribution Deferral, Non-cumulative Deferral, Optional Payment and Dividend Stopper are applicable.

Distribution Deferral, Non-cumulative Deferral, Optional Distribution and Dividend Stopper are applicable.

For the purposes of Condition 6(e)(ii): “Change of Control Event” means:<ul><li>(a) any Person or Person or Persons (acting together with its related corporations) (other than Permitted Holders) acquires or acquire Control of the Issuer, if such Person or Persons does not or do not have, and would not be deemed to have, Control over the Issuer on the Issue Date; or</li><li>(b) the Issuer consolidates with or merges into or sells or transfers all or substantially all of the Issuer's assets to any other Person or Persons (acting together with its related corporations) (other than Permitted Holders), unless the consolidation, merger, sale or transfer will not result in such other Person or Persons acquiring Control over the Issuer or the successor entity;</li></ul>

Redemption upon Change of Control Event:

Optional Payment, Dividend Stopper, Non-cumulative Deferral are applicable.

Distribution Stopper is applicable.

<ul><li>(i) In instances where “Write Down” is specified as the Loss Absorption Measure in the relevant Pricing Supplement for any Perpetual Capital Securities, if a Loss Absorption Event occurs the Issuer shall, upon the issue of a Write Down Notice, irrevocably and without the need for the consent of the Trustee or the holders of any Perpetual Capital Securities:<ul><li>(A) cancel any accrued but unpaid Distributions (up to the relevant Loss Absorption Measure Effective Date); and</li><li>(B) if the cancellations of Distributions in accordance with Condition 7(a)(i)(A) above, together with the cancellation of interest, dividend and/or distribution on any other Loss Absorbing Instruments on or before the relevant Loss Absorption Measure Effective Date, is in aggregate insufficient to result in the relevant Loss Absorption Event no longer continuing, irrevocably (without requiring the consent of the Securityholders) procure that the Registrar shall reduce the Prevailing Principal Amount, in respect of each Perpetual Capital Security (in whole or in part) by an amount equal to the relevant Write Down Amount (a “Write Down”, and “Written Down” shall be construed accordingly).</li><li>Concurrently with the giving of the Loss Absorption Event Notice, the Issuer shall procure, unless otherwise directed by the MAS, that a similar notice be given in respect of other Loss Absorbing Instruments (in accordance with their terms).</li><li>In addition, concurrent with the giving of the Write Down Notice, the Issuer shall also procure, unless otherwise directed by the MAS, that (i) a similar notice be given in respect of other Loss Absorbing Instruments (in accordance with their terms) and (ii) any accrued (and unpaid) distributions in respect of such Loss Absorbing Instruments are cancelled and (if required) the prevailing principal amount of each class of Loss Absorbing Instruments outstanding (if any) is written down or converted into Shares or any other securities which qualify as Common Equity Tier 1 Capital (as the case may be) by a corresponding proportion as soon as reasonably practicable following the giving of such Write Down Notice.</li><li>Once any principal or Distributions under a Perpetual Capital Security has been Written Down, it will be extinguished and will not be restored in any circumstances, including where the relevant Loss Absorption Event ceases to continue. No Securityholder may exercise, claim or plead any right to any Write Down Amount, and each Securityholder shall be deemed to have waived all such rights to such Write Down Amount.</li></ul></li><li>(ii) If a Loss Absorption Event Notice has been given in respect of any Perpetual Capital Securities in accordance with this Condition 7(a), transfers of any such Perpetual Capital Securities that are the subject of such notice shall not be permitted during the Suspension Period. From the date on which a Loss Absorption Event Notice in respect of any Perpetual Capital Securities in accordance with this Condition 7(a) is issued by the Issuer to the end of the Suspension Period, the Trustee and the Registrar shall not register any attempted transfer of any Perpetual Capital Securities. As a result, such an attempted transfer will not be effective.</li><li>(iii) Any reference in these Conditions to principal in respect of the Perpetual Capital Securities shall refer to the principal amount of the Perpetual Capital Security(ies), reduced by any applicable Write Down(s).</li><li>Any Write Down of Perpetual Capital Securities is subject to the availability of procedures to effect the Write Down in the relevant clearing systems. For the avoidance of doubt, however, any Write Down of any Perpetual Capital Securities under this Condition 7 will be effective upon the date that the Issuer specifies in the Loss Absorption Event Notice (or as may otherwise be notified in writing to the Securityholders, the Trustee and Issuing and Paying Agent by the Issuer) notwithstanding any inability to operationally effect any such Write Down in the relevant clearing system(s).</li></ul>

Write-down on a Loss Absorption Event:

We may redeem the notes in whole at any time, or in part from time to time at our option by paying the greater of (1) the principal amount of the notes to be redeemed and (2) the applicable make-whole amount, in each case plus accrued and unpaid interest, if any, up to but excluding the redemption date. See “Description of Notes—Redemption, Exchange and Purchase—Redemption at the Option of the Company.”

Optional Redemption:

Upon the occurrence of certain change of control events, ArcelorMittal may be required to make an offer to purchase all or a portion of each holder’s notes at a purchase price equal to 101% of the principal amount tendered, plus accrued and unpaid interest, if any, up to but excluding the date of purchase. See “Description of Notes—Redemption, Exchange and Purchase—Offer to Purchase upon a Change of Control.”

Change of Control Event:

The indenture relating to the notes contains restrictions on ArcelorMittal’s ability to pledge assets, to merge or engage in similar transactions. For a more complete description see “Description of Senior Debt Securities—Consolidation, Merger, Conveyance or Transfer” in the accompanying prospectus and “Description of Notes—Covenants—Negative Pledge” herein.

Covenants:

We may redeem the Fixed Rate Notes, in whole or in part, from time to time as follows: (i) prior to the Par Call Date (as set forth below),at a redemption price equal to the greater of (A) 100% of the principal amount of the Fixed Rate Notes to be redeemed, and (B) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Fixed Rate Notes to be redeemed (not including any portion of such payments of interest accrued as of the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate plus the Make-Whole Spread (as set forth below) and (ii) on or after the Par Call Date, at a redemption price equal to 100%of the principal amount of the Fixed Rate Notes to be redeemed, plus, in each case, accrued interest thereon to but excluding the date of redemption.

The Indenture contains covenants restricting our ability to enter into sale and leaseback transactions, pledge our assets to secure certain borrowings and create or incur liens on our property. These restrictive covenants are described in the attached prospectus under the heading “Description of Debt Securities — Covenants”.

Each series of notes will be subject to the defeasance and covenant defeasance provisions in the Indenture described under “Description of Debt Securities — Satisfaction, Discharge and Defeasance” in the attached prospectus.

Defeasance:

Interest which accrues during an Interest Period will be due and payable on the relevant Interest Payment Date, unless BP Capital U.K. elects to defer the relevant payment of interest (in whole or in part). BP Capital U.K. may, at its discretion, elect to defer any payment of interest (in whole or in part) (a “Deferred Interest Payment”) which is otherwise scheduled to be paid on an Interest Payment Date. If BP Capital U.K. elects not to make all or part of any payment of interest on an Interest Payment Date, then it will not have any obligation to pay such interest on the relevant Interest Payment Date.Arrears of Interest:Any Deferred Interest Payment shall itself bear interest (such further interest together with the Deferred Interest Payment, being “Arrears of Interest”), at the Interest Rate prevailing from time to time, from (and including) the date on which (but for such deferral) the Deferred Interest Payment would otherwise have been due to be made to (but excluding) the date on which the Deferred Interest Payment is paid, and interest will be added to such Deferred Interest Payment (and thereafter accumulate additional interest at the Interest Rate prevailing from time to time accordingly) on each Interest Payment Date.&nbsp;Non-payment of Arrears of Interest shall not constitute a default by BP Capital U.K. or BP under the Notes or for any other purpose, unless such payment of Arrears of Interest becomes due and payable in accordance with “—Optional Settlement of Arrears of Interest” or “—Mandatory Payment of Arrears of Interest” as described below or otherwise in accordance with the terms of the Notes.

Optional Interest Deferral

Upon the occurrence of a Trigger Event, each outstanding Note will automatically and immediately be converted, on a full and permanent basis, without the consent of the holders thereof, into that number of fully-paid Common Shares determined by dividing (a)the product of the Multiplier multiplied by the Note Value, by (b) the Conversion Price. See “Description of the Notes—NVCC Automatic Conversion.”<ul><li>“Conversion Price” means, in respect of each Note, the greater of (i) the Floor Price, and(ii) the Current Market Price.</li><li>“Floor Price” means the U.S. dollar equivalent of $5.00 converted into U.S. dollars at the Prevailing Rate on the day immediately prior to the date on which the Trigger Event occurs, subject to adjustment in the event of (i) the issuance of Common Shares or securities exchangeable for or convertible into Common Shares to all holders of Common Shares as a stock dividend, (ii) the subdivision, redivision or change of the Common Shares into a greater number of Common Shares, or (iii) the reduction, combination or consolidation of the Common Shares into a lesser number of Common Shares. The adjustment shall be calculated to the nearest one- tenth of one cent provided that no adjustment of the Floor Price shall be required unless such adjustment would require a increase or decrease of at least 1% of the Floor Price then in effect; provided, however, that in such case any adjustment that would otherwise be required to be made will be carried forward and will be made at the time of and together with the next subsequent adjustment which, together with any adjustments so carried forward, will amount to at least 1% of the Floor Price.</li><li>“Multiplier” means 1.5.</li><li>“Note Value” means, in respect of each Note, US$1,000 plus accrued and unpaid interest of such Note as at the date of the Trigger Event.</li></ul>

NVCC Automatic Conversion:

Interest Payments Discretionary and Restriction on Interest Payments are applicable. See also “Description of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities—Interest Cancellation—Agreement to Interest Cancellation” and “—Notice of Interest Cancellation” in the Prospectus Supplement for further details.&nbsp;

Interest Payments

The terms of the Notes provide that interest will be due and payable on an Interest Payment Date only if it is not cancelled or deemed to have been cancelled, and we have the sole and absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable on any Interest Payment Date. We will also be restricted from making interest payments in the circumstances described below. As a result, you may not receive any interest on any Interest Payment Date or at any other times, and you will have no claims whatsoever in respect of that cancelled or deemed cancelled interest.

Cancellation of Interest Payments:

We have the right, in our sole discretion, to cancel all or part of any payment of interest, including (but not limited to) if such cancellation is necessary to prevent our Common Equity Tier 1 capital ratio pursuant to Article 92 (1) (a) CRR or any successor provision, determined on a consolidated basis (which we refer to as our “Common Equity Tier 1 Capital Ratio”) from falling below 5.125 per cent. or to meet a requirement imposed by law or our competent supervisory authority. If we make use of such right, we will give notice to the holders in accordance with the Capital Securities Indenture without undue delay, but no later than on the relevant Interest Payment Date.

Discretionary Cancellation of Interest Payments:

Payment of interest on the Notes for the relevant Interest Period will be cancelled (without prejudice to the exercise of our sole discretion pursuant to the terms described herein):<ul><li>to the extent that such payment of interest together with any additional kind of payment of dividends or interest (which we refer to as a “Distribution”) that are simultaneously planned or made or that have been made by us on the other capital instruments which, according to the CRR, qualify as common equity Tier 1 capital or Additional Tier 1 capital (which we refer to as “Tier 1 Instruments”) in our then current financial year would exceed the Available Distributable Items, provided that, for such purpose, the Available Distributable Items will be increased by an amount equal to what has been accounted for as expenses for Distributions in respect of Tier 1 Instruments (including payments of interest on the Notes) in the determination of the profit (Gewinn) on which the Available Distributable Items are based; or</li><li>if and to the extent that our competent supervisory authority orders that all or part of the relevant payment of interest be cancelled or another prohibition of Distributions is imposed by law or an authority.</li></ul>

Mandatory Cancellation of Interest Payments:

Upon the occurrence of a Trigger Event (as defined below), the redemption amount and the nominal amount of the Notes will be reduced by the amount of the relevant write-down (as further described below). Accordingly, under the terms of the Notes, upon the occurrence of a Trigger Event leading to a write-down in the principal amount of the Notes, you could lose all or part of the value of your investment in the Notes. A regulatory write-down will not constitute a default or an event of default under the Notes or the Capital Securities Indenture or give rise to any right to accelerate the repayment of any principal on the Notes.&nbsp;<ul><li>A “Trigger Event” will occur if, at any time, our Common Equity Tier 1 Capital Ratio falls below the 5.125 per cent.&nbsp;</li><li>Upon the occurrence of a Trigger Event, a write-down will be effected pro rata with all other Additional Tier 1 instruments within the meaning of the CRR (Additional Tier 1 capital), the terms of which provide for a write-down (whether permanent or temporary) upon the occurrence of the Trigger Event. For such purpose, the total amount of the write-downs to be allocated pro rata will be equal to the amount required to restore fully our Common Equity Tier 1 Capital Ratio to 5.125 per cent. but will not exceed the sum of the nominal amounts of the relevant instruments outstanding at the time of occurrence of the Trigger Event. The sum of the write-downs to be effected with respect to the Notes will be limited to the outstanding aggregate nominal amount of the Notes at the time of occurrence of the relevant Trigger Event.</li></ul>

After a write-down has been effected, the nominal amount and the redemption amount of each Note, unless previously redeemed or repurchased and cancelled, may be written up in accordance with the following provisions in each of our financial years, subsequent to the occurrence of such write-down, until the full initial nominal amount has been reached, to the extent that a corresponding annual profit (Jahresüberschuss, calculated in accordance with German law and accounting principles) is recorded, and the write-up will not give rise to or increase an annual loss (Jahresfehlbetrag, calculated in accordance with German law and accounting principles). The write-up will occur with effect as of (and including) the Interest Payment Date immediately following our financial year for which the above-mentioned annual profit (Jahresüberschuss) was determined. The write-up will be effected pari passu with write-ups of other Additional Tier 1 instruments within the meaning of the CRR, unless this would cause us to be in breach of any of our contractual obligations that we have assumed, or with any statutory or regulatory obligations. Subject to the conditions described in “Description of the Notes—Write-downs and Write-ups of the Principal Amount of the Notes—Write-ups of the Principal Amount of the Notes,” which may limit the extent of any write-up, it will be at our discretion to effect a write-up. In particular, we may effect a write-up only in part or effect no write-up at all, even if a corresponding annual profit is recorded and the conditions described in “Description of the Notes—Write-downs and Write-ups of the Principal Amount of the Notes—Write-ups of the Principal Amount of the Notes” are fulfilled.

Write-up:

Embraer Finance may, at its option, redeem the notes, in whole or in part, at any time, by paying the greater of (i) 100% of the principal amount of the notes plus accrued interest and additional amounts, if any, to the date of redemption and (ii) the applicable “make-whole” amount, as described under “Description of the Notes — Redemption and Repurchase — Optional Redemption With Make-Whole Amount.”&nbsp;

The indenture governing the notes will contain restrictive covenants that, among other things, limit Embraer’s ability to:<ul><li>incur liens; and</li><li>consolidate, merge or transfer assets.</li></ul>These covenants are subject to important exceptions. See “Description of Debt Securities—Certain Covenants of Embraer.”

Covenants of Embraer:

The indenture governing the notes will contain restrictive covenants that, among other things, limit Embraer Finance’s ability to:<ul><li>incur liens;</li><li>consolidate, merger or transfer assets; and</li><li>engage in certain activities and transactions.</li></ul>These covenants are subject to important exceptions. See “Description of the Notes—Covenants—Additional Limitation on Embraer Finance.”

Covenants of Embraer Finance:

We will have sole and absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable on any interest payment date.

Distribution Interest Payments:

A “Capital Adequacy Trigger Event” will occur if the end-point CET1 Ratio as of any Quarterly Financial Period End Date or Extraordinary Calculation Date, as the case may be, is less than 7.0% on such date.&nbsp;<ul><li>Automatic Conversion upon a Capital Adequacy Trigger Event: If a Capital Adequacy Trigger Event occurs, then an Automatic Conversion will occur without delay (but no later than one month following either (i) the Ordinary Reporting Date, if a Capital Adequacy Trigger Event has occurred as of a Quarterly Financial Period End Date, or (ii) the Extraordinary Calculation Date, if a Capital Adequacy Trigger Event has occurred as of such date), as described under “Description of the Securities—Automatic Conversion Upon Capital Adequacy Trigger Event—Procedure—Automatic Conversion Procedure,” at which point all of our obligations under the Securities will be irrevocably and automatically released in consideration of our issuance of the Conversion Shares to the Conversion Shares Depository (or to the relevant recipient in accordance with the terms of the Securities) on the date on which the Automatic Conversion will take place, or has taken place, as applicable (such date, the “Conversion Date”), and under no circumstances will such released obligations be reinstated.</li><li>After a Capital Adequacy Trigger Event, subject to the conditions described under “Description of the Securities—Automatic Conversion Upon Capital Adequacy Trigger Event—Procedure,” we expect the Conversion Shares Depository to deliver to the securityholders on the Settlement Date either (i) Conversion Shares or (ii) if we elect, in our sole and absolute discretion, that a Conversion Shares Offer be made, the Conversion Shares Offer Consideration.&nbsp;</li><li>The Securities will not be convertible into Conversion Shares at the option of the securityholders at any time.</li></ul>&nbsp;

Capital Adequacy Trigger Event:

<ul><li>Prior to September 15, 2029 (three months before maturity) with respect to the Notes (the “Early Call Date”), we will have the option to redeem the Notes, in whole or in part at anytime, at a redemption price equal to the greater of: (1) 100% of the principal amount of the applicable Notes being redeemed; and (2) the sum of the present values of the remaining scheduled payments of principal and interest that would be due if the Notes matured on the Early Call Date but for the redemption (exclusive of interest accrued to the date of redemption) discounted to the redemption date, calculated on a semi-annual basis (assuming a 360-day year of twelve 30-day months), at the Treasury Rate (as defined herein), plus 50 basis points, together with accrued and unpaid interest thereon to the date of redemption.</li><li>At any time on or after the Early Call Date, we may redeem the Notes in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes being redeemed, together with accrued and unpaid interest thereon to the date of redemption.</li><li>See “Description of the Notes – Optional Redemption.”</li></ul>

Upon the occurrence of a Change of Control Triggering Event, which occurs only if a Change of Control and a Ratings Decline (as such terms are defined in the Indenture) both occur, we are required to offer to purchase all outstanding Notes at 101% of their principal amount plus accrued and unpaid interest to the date of purchase. See “Description of Debt Securities – Certain Covenants – Change of Control” in the accompanying prospectus.

Change of Control Offer:

The Indenture will, among other things, restrict our ability and the ability of certain of our subsidiaries to:<ul><li>incur liens;</li><li>enter into sale/leaseback transactions;</li><li>in the case of certain of our subsidiaries, incur indebtedness without guaranteeing the Notes;</li><li>enter into or conduct transactions with unrestricted subsidiaries; and</li><li>amalgamate or consolidate with, or merge with or into, or transfer all or substantially all of our assets or those of certain of our subsidiaries to any person.</li></ul>These covenants are subject to important qualifications and limitations. For more details, see the section “Description of Debt Securities – Certain Covenants” in the accompanying prospectus.

PGF may redeem the Notes, in whole or in part, at any time or from time to time prior to October 3, 2030 (the date that is three months prior the scheduled maturity of the 2031 Notes) and December 3, 2049 (the date that is six months prior the scheduled maturity of the 2050 Notes), as applicable, by paying the greater of the principal amount of the Notes to be redeemed and the applicable “make-whole” amount, plus, in each case, accrued and unpaid interest, as described under “Description of the Notes—Optional Redemption— Optional Redemption With ‘Make-Whole’ Amount for the Notes.”Beginning on October 3, 2030 with respect to the 2031 Notes and December 3, 2049 with respect to the 2050 Notes, as applicable, PGF may redeem, in whole or in part, the Notes at a price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, as described under “Description of the Notes—Optional Redemption —Optional Redemption at Par.”

Optional Redemption

The terms of the indenture will require PGF, among other things, to:&nbsp;<ul><li>pay all amounts owed by it under the indenture and the Notes when such amounts are due;</li><li>maintain an office or agent for the purpose of service of process and a paying agent, in each case in the United States;</li><li>ensure that the Notes continue to be senior obligations of PGF;</li><li>use proceeds from the issuance of the Notes for specified purposes; and</li><li>replace the trustee upon any resignation or removal of the trustee.</li></ul>In addition, the terms of the indenture will restrict the ability of PGF and its subsidiaries, among other things, to:<ul><li>undertake certain mergers, consolidations or similar transactions; and</li><li>create certain liens on its assets or pledge its assets.&nbsp;</li></ul>PGF’s covenants are subject to a number of important qualifications and exceptions. See “Description of the Notes—Covenants.”

Covenants

The issuer may at its option redeem the 2028 new securities, in whole or in part, at any time or from time to time prior to their maturity, at a redemption price equal to the principal amount thereof, plus the Make-Whole Amount (as defined under “Description of the New Securities—Redemption of the New Securities at the Option of the Issuer”), plus accrued interest on the principal amount of the applicable series of the securities to the date of redemption.

Negative Pledge None of the issuer or the guarantors or their respective subsidiaries will create security interests in our crude oil or crude oil receivables to secure any public external indebtedness. However, the issuer may enter into up to U.S. $4 billion of receivables financings and similar transactions in any year and up to U.S. $12 billion of receivables financings and similar transactions in the aggregate. For details see “Description of the New Securities - Negative Pledge”.

Each series of notes will be redeemable at our option or at the option of Rio Tinto plc and Rio Tinto Limited, in whole or in part, at any time. See “Description of Guaranteed Notes — Optional Make-Whole Redemption” beginning on page S-23 of this prospectus supplement. Upon redemption, we will pay a redemption price equal to the greater of (i) 100% of the principal amount of the notes to be redeemed and (ii) as certified to the trustee by us or Rio Tinto, the sum of the present values of the remaining scheduled payments of principal and interest on the relevant series of notes (excluding any interest accrued as of the date of redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in this prospectus supplement) plus a spread of 25 basis points in the case of the 2016 notes, 30 basis points in the case of the 2021 notes and 20 basis points in the case of the 2040 notes, together with accrued interest on the principal amount of the notes to be redeemed to the date of redemption. The “Comparable Treasury Issue” for purposes of the definition contained in “Description of Guaranteed Notes —Optional Make-Whole Redemption” will be the U.S. Treasury security selected by the quotation agents as having a maturity comparable to the remaining term of the notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the notes to be redeemed.

We, Rio Tinto plc or Rio Tinto Limited can be legally released from compliance with certain covenants, including those described under “— Restrictive Covenants” and any that may be described in the applicable prospectus supplement and including the related Events of Default if we, Rio Tinto plc or Rio Tinto Limited, as the case may be, take all the steps described above under “—Defeasance and Discharge” except that the opinion of counsel does not have to refer to a change in U.S. federal income tax laws or a ruling from the U.S. Internal Revenue Service.

Covenant Defeasance:

<ul><li>By purchasing the Subordinated Notes, each holder (including each beneficial holder) of the Subordinated Notes acknowledges, agrees to be bound by and consents to the exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the cancellation of all, or a portion, of the principal amount of, or interest on, the Subordinated Notes and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Subordinated Notes into shares or other securities or other obligations of RBSGor another person, which U.K. bail-in power may be exercised by means of variation of the terms of the Subordinated Notes solely to give effect to the above. With respect to (i) and (ii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at the Maturity Date), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each holder of the Subordinated Notes further acknowledges and agrees that the rights of the holders under the Subordinated Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority expressed to implement such a cancellation or conversion.</li><li>For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to us or other members of the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive or regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and/or within the context of a U.K. resolution regime by way of amendment to the Banking Act 2009 or otherwise, pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).</li></ul>

Agreement with Respect to the Exercise of U.K. Bail-in Power:

No repayment of the principal amount of the Subordinated Notes or payment of interest on the Subordinated Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. resolution authority unless, at the time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by us under the laws and regulations of the United Kingdom and the European Union applicable to us or other members of the Group.

Repayment of Principal and Payment of Interest After Exercise of U.K. Bail-in Power:

Teva Finance may redeem the notes of any series, in whole or in part, at any time or from time to time, on at least 20 days’, but not more than 60 days’, prior notice. The notes of each series will be redeemable at a redemption price equal to the greater of (1) 100% of the principal amount of the notes to be redeemed and (2) the sum of the present values of the Remaining Scheduled Payments (as defined under “Description of the Notes and the Guarantees—Optional Redemption by the Issuer”) discounted, on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), at a rate equal to the sum of the Treasury Rate (as defined in “Description of the Notes and the Guarantees—Optional Redemption by the Issuer”) plus 25 basis points, in the case of the 2026 notes, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

If the closing of the Actavis Generics acquisition does not occur on or prior to October 26, 2016, or if the Master Purchase Agreement is terminated at any time prior thereto, the notes will be subject to a special mandatory redemption at a redemption price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest, if any, from the date of initial issuance of the notes up to, but not including, the special redemption date. See “Description of the Notes and the Guarantees—Special Mandatory Redemption.”

Special Mandatory Redemption

Limitations on Secured Debt.&nbsp;If Teva or any of its subsidiaries creates, incurs, assumes or suffers to exist any lien on any of its property (including a subsidiary’s stock or debt) to secure other debt, Teva will secure the notes on the same basis for so long as such other debt is so secured, unless, after giving effect to such lien, the aggregate amount of the secured debt then outstanding (not including debt secured by liens permitted below) plus the value of all sale and leaseback transactions described in paragraph (3) of “—Limitations on Sales and Leasebacks” below would not exceed 10% of Teva’s consolidated net worth. The restrictions do not apply to the following liens:<ul><li>liens existing as of the date when Teva Finance first issues notes pursuant to the indenture;</li><li>liens on property created prior to, at the time of or within 120 days after the date of acquisition, completion of construction or completion of improvement of such property to secure all or part of the cost of acquiring, constructing or improving all or any part of such property;</li><li>landlord’s, material men’s, carriers’, workmen’s, repairmen’s or other like liens arising in the ordinary course of business in respect of obligations which are not overdue or which are being contested in good faith in appropriate proceedings;</li><li>liens existing on any property of a corporation or other entity at the time it became or becomes a subsidiary of Teva (provided that the lien has not been created or assumed in contemplation of that corporation or other entity becoming a subsidiary of Teva);</li><li>liens securing debt owing by a subsidiary to Teva or to one or more of its subsidiaries;</li><li>liens in favor of any governmental authority of any jurisdiction securing the obligation of Teva or any of its subsidiaries pursuant to any contract or payment owed to that entity pursuant to applicable laws, regulations or statutes; and</li><li>any extension, renewal, substitution or replacement of the foregoing, provided that the principal amount is not increased and that such lien is not extended to other property.</li></ul>Limitations on Sales and Leasebacks.&nbsp;Teva will not, and will not permit any subsidiary to, enter into any sale and leaseback transaction covering any property after the date when Teva Finance first issues notes pursuant to the indenture unless:1. the sale and leaseback transaction:<ul><li>involves a lease for a period, including renewals, of not more than five years;</li><li>occurs within 270 days after the date of acquisition, completion of construction or completion of improvement of such property; or&nbsp;</li><li>is with Teva or one of its subsidiaries; or&nbsp;</li></ul>2. Teva or any subsidiary, within 270 days after the sale and leaseback transaction shall have occurred, applies or causes to be applied an amount equal to the value of the property so sold and leased back at the time of entering into such arrangement to the prepayment, repayment, redemption, reduction or retirement of any indebtedness of Teva or any subsidiary that is not subordinated to the notes and that has a stated maturity of more than twelve months; or3. Teva or any subsidiary would be entitled pursuant to the exceptions under “—Limitations on Secured Debt” above to create, incur, issue or assume indebtedness secured by a lien in the property without equally and ratably securing the notes.&nbsp;Certain Other CovenantsThe indenture will contain certain other covenants regarding, among other matters, corporate existence and reports to holders of notes.

<ul><li>Prior to the par call date set forth below, Vale Overseas may, at its option, redeem the notes, in whole at any time or in part from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes to be redeemed and (ii) a "make-whole" amount described under "Description of the Notes—Optional Redemption" in this prospectus supplement plus, in either case, accrued and unpaid interest on such notes to the date of redemption. On or after the par call date, Vale Overseas may, at its option, redeem the outstanding notes, in whole at any time or in part from time to time, at par plus accrued and unpaid interest thereon to the redemption date. &nbsp;</li><li>The par call date is April 8, 2030 (the date that is three months prior to the stated maturity of the notes).</li></ul>

The amended and restated indenture governing the notes contains restrictive covenants that, among other things and subject to certain exceptions, limit Vale Overseas' ability to merge or transfer substantially all of its assets and Vale's ability to merge or transfer substantially all of its mining properties or assets and to incur liens. For a more complete description of Vale and Vale Overseas' covenants, see "Description of the Notes—Covenants" in this prospectus supplement and "Description of the Debt Securities—Certain Covenants" in the accompanying prospectus.

The notes are subject, upon the occurrence of a Non-Viability Trigger Event, to Conversion or possible Write-off (each as defined in Section 4 under "Description of the Subordinated Debt Securities—Additional Provisions" in the accompanying prospectus), as more fully described in the accompanying prospectus. If Conversion of the notes (or a percentage of the Outstanding Principal Amount of the notes) does not occur for any reason within five ASX Business Days after the Non-Viability Trigger Event Date (each as defined in Section 4 under "Description of the Subordinated Debt Securities—Additional Provisions" in the accompanying prospectus), the notes (or a percentage of the Outstanding Principal Amount of the notes to be Converted) will be Written-off and the holders' rights in relation to the notes (including with respect to payments of interest or accrued interest, and the repayment of Outstanding Principal Amount and, in the case of Conversion, the receipt of Ordinary Shares issued in respect of such notes) will be immediately and irrevocably written-off and terminated with effect on and from the Non-Viability Trigger Event Date, as described under "Description of the Subordinated Debt Securities—Additional Provisions" in the accompanying prospectus.

Conversion or Write-off Upon Occurrence of a Non-Viability Trigger Event

Yield calculation provided does not take into consideration of the forward yield curve after coupon reset.

Additional Info

On or after April 15, 2022, the Corporation may, at its option, on one or more occasions, redeem all or any portion of the Securities, after giving the required notice thereof in accordance with Section 10.02 – Election to Redeem; Notice to Trustee and Section 10.04 – 79 Notice of Redemption, at the Redemption Prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, if any, to but excluding the Redemption Date, if redeemed during the 12-month period commencing on April 15 of the years indicated below, subject to the right of Holders of record on a Regular Record Date to receive interest due on the respective Interest Payment Date:&nbsp;<ul><li>2022 - 103.93750%</li><li>2023 - 101.96875%</li><li>2024 and thereafter - 100.00000%</li></ul>

Section 11.01 Corporation’s Option to Effect Legal Defeasance or Covenant DefeasanceThe Corporation may at any time, at its option, by Board Resolution, elect to have either Section 11.02 – Legal Defeasance or Section 11.03 – Covenant Defeasance applied to the Outstanding Securities upon compliance with the applicable conditions set forth in this Article Eleven.Section 11.02 Legal DefeasanceAt the option of the Corporation and at any time, the Corporation may elect to be discharged from any and all obligations with respect to the Securities (“Legal Defeasance”) and cure all then-existing Events of Default, except for the following rights, obligations, powers, trusts, duties and immunities which shall survive until otherwise terminated or discharged hereunder: (i) the rights of the Holders the Securities to receive, solely out of the trust created pursuant to Section 11.04 – Conditions to Legal Defeasance or Covenant Defeasance, payments in respect of the principal of, and any premium, Additional Amounts and interest on, the Securities when and as such payments shall become due; (ii) the Corporation’s obligations with respect to the Securities under Section 3.04 – Temporary Securities, Section 3.05 – Registrar, Transfer Agent and Paying Agent, Section 3.06 – Registration, Transfer and Exchange and Section 3.09 – Mutilated, Defaced, Destroyed, Lost or Wrongfully Taken Securities; (iii) the rights, powers, trusts, duties and immunities of the Trustees hereunder (including, without limitation, Section 6.03 – Protection of Trustees); (iv) the rights and obligations under this Article Eleven; and (v) the rights and obligations described in the last paragraph of Section 4.01 – Satisfaction and Discharge of Indenture. The Trustees, at the expense of the Corporation, shall execute proper instruments acknowledging any Legal Defeasance. Subject to compliance with this Article Eleven, the Corporation may exercise its option with respect to Legal Defeasance under this Section 11.02 notwithstanding the prior exercise of its option with respect to Covenant Defeasance under Section 11.03 – Covenant Defeasance with respect to the Securities.Section 11.03 Covenant DefeasanceUpon the Corporation’s exercise of the option provided in Section 11.01 – Corporation’s Option to Effect Legal Defeasance or Covenant Defeasance to obtain a Covenant Defeasance with respect to the Securities, the Corporation shall be released from its obligations under Section 9.02  Negative Pledge and Subsidiary Guarantees, clause (c) of Section 9.03 – 81 Reporting; Certificates of Compliance, Section 9.04 – Offer to Purchase Securities Upon a Change of Control, Section 9.06 – Maintenance of Corporate Existence and Section 9.07 – Disposition as a Whole with respect to the Securities on and after the date that the applicable conditions set forth in Section 11.04 – Conditions to Legal Defeasance or Covenant Defeasance shall be satisfied. The term “Covenant Defeasance” means that, with respect to the Securities, the Corporation may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any of Section 9.02 – Negative Pledge and Subsidiary Guarantees, clause (c) of Section 9.03  Reporting; Certificates of Compliance, Section 9.04 – Offer to Purchase Securities Upon a Change of Control, Section 9.06 – Maintenance of Corporate Existence and Section 9.07 – Disposition as a Whole, whether directly or indirectly by reason of any reference elsewhere herein to such Section or Article or by reason of any reference in such Section or Article to any other provision herein or in any other document, and such omission to comply shall not constitute an Event of Default under Section 5.01 – Event of Default with respect to the Securities; but the remaining provisions of this Indenture and the other terms of the Securities shall be unaffected thereby.

Legal Defeasance And Covenant Defeasance

The Issuer may elect at its full discretion to cancel (in whole or in part) the Interest Amount otherwise scheduled to be paid on an Interest Payment Date notwithstanding it has Distributable Items or the Maximum Distributable Amount is greater than zero. See Condition 5.9 (Cancellation of Interest Amounts).

Cancellation of Interest

The Indenture will contain covenants that restrict the ability of the Issuer, the Guarantors and the Issuer’s Subsidiaries (as defined in “Description of the Notes”) to:&nbsp;<ul><li>create liens;</li><li>transfer or sell all or substantially all of its assets; and</li><li>merge or consolidate.</li></ul>For a more detailed description of these covenants, please see “Description of the Notes—Certain Covenants”. These covenants are subject to a number of important qualifications and exceptions.

Upon the occurrence of a Change of Control Repurchase Event (as defined in “Description of the Notes”), each holder of the Notes may require the Issuer to repurchase such holder’s Notes, in whole or in part, at a purchase price equal to 101% of the principal amount thereof plus accrued but unpaid interest to the purchase date, as described under “Description of the Notes— Change of Control”.

Change of Control Repurchase Event

If the Company does not make an Interest Payment or part thereof on the relevant Interest Payment Date, such non-payment shall evidence:<ul><li>(i) the non-payment and cancellation of such Interest Payment (or relevant part thereof) by reason of it not being due in accordance with the provisions described under “Solvency Condition” below;</li><li>(ii) the cancellation of such Interest Payment (or relevant part thereof) in accordance with the provisions described under “Restrictions on Interest Payments” below;</li><li>(iii) the cancellation of such Interest Payment (or relevant part thereof) in accordance with Condition 7(c); or as appropriate;</li><li>(iv) the Company’s exercise of its discretion otherwise to cancel such Interest Payment (or relevant part thereof) as described under “Interest Payments Discretionary” below,</li></ul>and accordingly such interest shall not in any such case be due and payable.

Interest on the Securities is due and payable only at the sole and absolute discretion of the Company, subject to the additional restrictions set out in the Terms and Conditions. Accordingly, the Company may at any time elect to cancel any Interest Payment (or part thereof) which would otherwise be payable on any Interest Payment Date.

Interest Payments Discretionary:

If the Conversion Trigger Event occurs, each Security shall be automatically and irrevocably discharged and satisfied by its Conversion into Ordinary Shares, credited as fully paid, and the issuance of such Ordinary Shares to the Conversion Shares Depositary to be held on trust for the Securityholders. The Conversion shall occur without delay upon the occurrence of a Conversion Trigger Event.<ul><li>The Conversion Trigger Event shall occur if at any time the CET1 Ratio is less than 7.00 per cent. The CET1 Ratio is calculated on a consolidated and fully loaded basis.</li><li>The Trust Deed provides that if the Trustee, in the exercise of its functions, requires to be satisfied as to any fact (including, without limitation, as to whether a Conversion Trigger Event has occurred), it may call for and accept as sufficient evidence of that fact a certificate signed by two Authorised Signatories of the Company as to that fact.</li><li>Conversion Price: The Conversion Price per Ordinary Share in respect of the Securities is U.S.$6.353 subject to certain anti-dilution adjustments as described in the Terms and Conditions. As at 5 January 2021, the Conversion Price was equivalent to a price of £4.661, translated into U.S. Dollars at an exchange rate of £1 = U.S.$1.363.</li></ul>

Conversion Trigger Event:

<ul><li>At any time and from time to time prior to 11 September 2024, the Bonds may be redeemed, in whole or in part, at the option of the Issuer on giving not less than 30 nor more than 60 calendar days’ written notice to the Trustee and the Bondholders, at a redemption price equal to 100% of the principal amount of the Bonds being redeemed plus the Applicable Premium, plus accrued and unpaid interest, if any, to (but excluding) the redemption date. None of the Agents or the Trustee have any responsibility with respect to the calculation or verification of the Applicable Premium.</li><li>At any time and from time to time on or after 11 September 2024, the Bonds may be redeemed, in whole or in part, at the option of the Issuer on giving not less than 30 nor more than 60 calendar days’ written notice to the Trustee and the Bondholders, at their principal amount plus accrued and unpaid interest, if any, to (but excluding) the redemption date.&nbsp;</li></ul>See the section entitled “Terms and Conditions of the Bonds — Redemption and Purchase”.

Upon the occurrence of a Change of Control Triggering Event, the Issuer must make an offer to purchase all of the Bonds outstanding at a purchase price equal to 101% of their principal amount plus accrued and unpaid interest, if any, to (but excluding) the purchase date.

Change of Control Triggering Event:

The bond consists of the following covenants:&nbsp;<ul><li>Negative pledge</li><li>Dividend restriction</li><li>Limitation on Borrowings</li><li>Limitation on distribution of Net Proceeds of Asset Sales</li><li>Material Subsidiaries</li><li>Limitation on Issuer’s activities</li><li>Additional limitations relating to Subsidiary Guarantors</li><li>Limitation on dividends and other restricted payments and on asset sales</li><li>Covenant suspension</li></ul>For details, see “Terms and Conditions of the Bonds - Covenants”.&nbsp;

<ul><li>Before February 11, 2023, the Company may redeem the notes, in whole or in part, at a redemption price equal to 100% of the principal amount of each note to be redeemed plus a make-whole premium described in “Description of Notes—Optional Redemption—Optional Redemption with a Make-Whole Premium.”</li><li>At any time on or after February 11, 2023, the Company may redeem the notes, in whole or in part, at the redemption prices specified under “Description of Notes—Optional Redemption.”</li><li>In addition, at any time prior to February 11, 2023, the Company may redeem up to 35% of the notes with the net cash proceeds from specified equity offerings at a redemption price equal to 104.375% of the principal amount of each note to be redeemed, plus accrued and unpaid interest, if any, to the date of redemption.</li></ul>

Upon the occurrence of a Change of Control Triggering Event (as defined in “Description of Notes—Change of Control Triggering Event” and “—Certain Definitions”), the Company will be required to make an offer to purchase the notes at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the date of purchase. See “Description of Notes—Change of Control Triggering Event” and “—Certain Definitions.”

The indenture governing the notes will, among other things, limit the issuer's ability to:<ul><li>incur additional indebtedness;</li><li>make dividend payments or other restricted payments;</li><li>sell assets;</li><li>enter into sale and leaseback transactions;</li><li>designate unrestricted subsidiaries and non-guarantor restricted subsidiaries;</li><li>create or assume indebtedness for borrowed money that is secured by a lien; and</li><li>engage in mergers, consolidations and transfers of substantially all of the issuer's assets.</li></ul>However, these covenants are subject to a number of significant exceptions. For details, see “Description of Notes—Covenants.”

<ul><li>Prior to the Par Call Date, the Issuer shall have the right at its option to redeem the Notes, in whole or in part, at any time or from time to time prior to their maturity, on at least 10 days, but not more than 60 days, prior notice delivered to the registered address of each Holder of Notes, at a Redemption Price equal to the greater of (i) 100% of the principal amount of such Notes and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed to the Par Call Date (exclusive of interest accrued to the Redemption Date), discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus 50 basis points for the Notes, plus, in each case, accrued and unpaid interest thereon to the Redemption Date.</li><li>At any time and from time to time on or after October 1, 2027 (the date that is six months prior to the maturity date of the Notes) (the “Par Call Date”), the Issuer may redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest to the Redemption Date.</li></ul>

The indenture governing the notes includes the below covenants, among other things:<ul><li>Limitation on Liens</li><li>Limitation on Sales and Leasebacks</li></ul>For details, see “Article Four — Covenants”.

<ul><li>The Issuer may, at its full discretion and as it deems fit, elect at any time to cancel (in whole or in part) interest otherwise scheduled to be paid in respect of a Series of Additional Tier 1 Notes.&nbsp;</li><li>Interest on the Additional Tier 1 Notes will be non-cumulative and any cancellation of interest on Additional Tier 1 Notes in accordance with Condition 2.3 will not constitute an event of default in respect of the Additional Tier 1 Notes.&nbsp;</li><li>In the event of any cancellation of interest on Additional Tier 1 Notes, the Issuer will face certain restrictions on its ability to make payments in respect of securities ranking junior to, or pari passu with, such Additional Tier 1 Notes, as set out in Condition 2.3(c).</li></ul>

In the event of a PONV Trigger Event, Subordinated Notes will be subject to interest cancellation and Write-Down (as defined in Condition 7.1(c)). Any nominal amount Written-Down due to the occurrence of a PONV Trigger Event will not be restored in any circumstances. Further, Additional Tier 1 Notes will also be subject to interest cancellation and Write-Down upon the occurrence of a CET1 Trigger Event, with any Reinstatement (as defined in Condition 7.2(b)) being at the Issuer’s option and subject to regulation. See Condition 7 and “Risk Factors — Risks Relating to the Subordinated Notes” for further details.

ReNew Wind Energy (AP 2) Private Limited, Ostro Jaisalmer Private Limited, Ostro Urja Wind Private Limited, Ostro Madhya Wind Private Limited, Badoni Power Private Limited, AVP Powerinfra Private Limited, Prathamesh Solarfarms Limited, Ostro Anantapur Private Limited, Ostro Mahawind Power Private Limited and ReNew Wind Energy Delhi Private Limited, each a company with limited liability incorporated under the laws of India (each, a “Co-Issuer,” and collectively, the “Co-Issuers”) and each a subsidiary of ReNew Power Private Limited (the “Company” or the “Parent Guarantor”), are the offering the Notes.

Co-Issuers

Subject to certain exceptions and as more fully described herein, the Notes may be redeemed, at the option of the Co-Issuers or the Parent Guarantor, in whole but not in part, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to (but not including) the applicable redemption date, upon the occurrence of certain changes in applicable tax law and subject to certain conditions. See “Description of the Notes – Redemption for Taxation Reasons.”

Redemption for Taxation Reasons

Not later than 30 days following a Change of Control Triggering Event, the Co-Issuers will make an offer to purchase all outstanding Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to (but not including) the applicable Offer to Purchase Date. See “Description of the Notes – Repurchase of Notes Upon a Change of Control Triggering Event.”

Repurchase of Notes Upon a Change of Control Triggering Event

The Indenture will contain certain covenants that, among other things, limit the Restricted Group’s ability to:<ul><li>incur or guarantee additional indebtedness;</li><li>issue disqualified or preferred stock;</li><li>declare dividends on capital stock or purchase or redeem capital stock;</li><li>make investments or other specified restricted payments;</li><li>have subsidiaries;</li><li>sell assets;</li><li>enter into sale and leaseback transactions;</li><li>enter into transactions with shareholders or affiliates; and</li><li>effect a consolidation or merger.</li></ul>These covenants will be subject to a number of important limitations and exceptions. See “Description of the Notes—Certain Covenants.”

No Holder may require the transfer of any Capital Security (or part thereof) during the period of 15 days ending on (and including) the due date for any payment of principal of that Capital Security or seven days ending on (and including) any Record Date in respect of a Coupon Payment Date.

Closed Periods:

The Issuer may elect, subject as provided below, to defer any Coupon Payment otherwise scheduled to be paid on a Coupon Payment Date by giving notice of such election to the Holders (in accordance with Condition 15), the Trustee and the Principal Paying Agent not less than 20 Business Days prior to the relevant Coupon Payment Date. The Issuer may not exercise its rights under this Condition 4 to defer Coupon Payments if a Capital Disqualification Event has occurred (and the Issuer has notified the FSA of such occurrence), unless a Capital Breach Event has also occurred and is continuing.The Issuer may (except where Condition 3 applies) at any time satisfy any Deferred Coupon Payment by operation of the procedures set out in Condition 6 and, subject to Condition 8(e), shall only be obliged to do so upon the occurrence of the first of the following to occur: (i) redemption of the Capital Securities in accordance with Condition 7(b); (ii) redemption, substitution or variation of the terms of the Capital Securities in accordance with Condition 7(c); (iii) redemption, substitution or variation of the terms of the Capital Securities in accordance with Condition 7(d); and (iv) in relation to any Deferred Coupon Payment relating to any particular Coupon Payment Date, within three months following such Coupon Payment Date, but in any such case, subject to, and only by the operation of the procedures set out in, Condition 6.

Coupon Deferral:

If a Change of Control Triggering Event (as defined below) occurs with respect to the Company, each Noteholder shall have the right at such Noteholder ’s option and subject to ECB Directions, to require the Company to redeem such Noteholder ’s Note in whole or in part at 101.0 per cent. of their principal amount plus accrued and unpaid interest, if any, to and including the date of purchase, in accordance with the Conditions. See Condition 6.3.

Redemption for a Change of Control Triggering Event:

The Company has agreed in the Trust Deed constituting the Notes and the Conditions related thereto to observe certain covenants, including, among other things, limitation on indebtedness, negative pledge, limitation on restricted payments, limitation on asset sales, limitation on affiliate transactions, consolidation and merger and reporting covenants. For details see Condition 4.

Convenants:

If a Reference Security Default Event occurs and is continuing, the Issuer may redeem the Securities (in whole but not in part) at any time at the Redemption Price, on the giving of not less than 30 and not more than 60 calendar days’ irrevocable notice of redemption to Securityholders in accordance with Condition 12.1 (Notices to Securityholders).&nbsp;“Reference Security Default Event” means an event of default occurs pursuant to&nbsp;(i) clause (b) of the Events of Default of the Issuer’s outstanding P=7,000,000,000 4.5219% p.a. PHP-denominated bonds due October 27, 2023 (Bloomberg identifier: A0291289) (the “Initial Referenced Senior Notes”), or&nbsp;(ii) similar condition of any other foreign currency or PHP-denominated debt security with an international tranche issued under Regulation S of the U.S. Securities Act and outstanding after the Issue Date, which debt security has the latest occurring scheduled maturity date (the “Superseding Referenced Senior Notes”), as a result of the Issuer’s default in, non-compliance with or non-performance of the covenants of the Issuer under the Initial Referenced Senior Notes or similar covenants of the Superseding Referenced Senior Notes, as the case may be, as respectively amended from time to time.

Early Redemption due to a Reference Security Default Event

If a Non-Payment Event occurs, the Issuer shall not pay the corresponding Interest Payment Amount and the Issuer shall not have any obligation to make any subsequent payment in respect of any unpaid Interest Payment Amount as more particularly described in Condition 6 (Interest Cancellation). In such circumstances, interest will not be cumulative and any interest which is not paid will not accumulate or compound and holders of the Capital Securities will have no right to receive such interest at any time, even if interest is paid in the future.

If a Non-Viability Event occurs, a Write-down will take place in accordance with Condition 10.2 (Write-Down at the Point of Non-Viability – Non-Viability Notice). "Write-down" means:<ul><li>(i) the holders' rights under the Capital Securities shall automatically be deemed to be irrevocably, unconditionally and permanently written-down in a proportion corresponding to the relevant Write-down Amount;&nbsp;</li><li>(ii) in the case of the Write-down Amount corresponding to the full Prevailing Principal Amount of the Capital Securities then outstanding, the Capital Securities shall be cancelled; and</li><li>(iii) all rights of any holder for payment or any amounts under or in respect of the Capital Securities, in a proportion corresponding to the relevant Write-down Amount (and any corresponding Interest Payment Amounts), shall be cancelled and not restored under any circumstances, irrespective of whether such amounts have become due and payable prior to the date of the Non-Viability Notice or the Non-Viability Event Writedown Date.</li></ul>

Write-down at the point of Non-Viability:

<ul><li>(i) Optional Redemption Date(s): 16 December 2021;&nbsp;</li><li>(ii) Optional Redemption Amount and method, if any, of calculation of such amount(s): U.S.$1,000 per Calculation Amount;</li><li>(iii) Notice period (if other than as set out in the Conditions): as specified in Condition 6(f).</li></ul>

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