BANCO MARE NOSTRUM
Tier 2 Investor Presentation
October 2016
1
1. Executive Summary
2. Business Profile
3. 1H Results
4. Commercial Activity
5. Asset Quality / Risk Management
6. Liquidity & Solvency
7. Transaction Overview
2
Executive Summary
Key Highlights of the Proposed Tier 2 Transaction
The Proposed
Transaction
Rationale
Key Investors
Highlights
Inaugural public CRD IV-compliant dated Tier 2 instrument issued by BMN
EUR €175mn 10NC5 Tier 2
Expected rating of BB- by Fitch
Optional Redemption at par upon the occurrence of a Capital Event, Tax call
Issuance under standalone CNMV documentation
Issuance expected to be fully MREL eligible
Increase Total Capital to comply with future SREP overall capital requirements, Pillar 1, Pillar 2 R and
combined buffer
Start building bail-inable securities towards MREL ratio
Leading regional franchise
Strong cost control post restructuring
Positioned for growth
Clean and solid bank
Recurrent income generation
Solid capital position
3
Capital ratios – Tier 2 issuance
BMN has received the draft of the SREP decision for 2017 which requires BMN to maintain a Overall Capital Requirement of
11.75%, including the minimum capital ratio under Pillar 1 (8.00%), the Pillar 2 Requirement (2.50%) and the capital
conservation buffer (CCB) (1.25% in 2017).
BMN will use, subject to internal approval, models and internal methodologies in order to calculate certain provisions related to
Circular 4/2016 of the Bank of Spain. Overall effect based on the preliminary outcome of its models and internal methodologies
would have a negative impact on CET1 of around 20 basis points.
Solvency (Post-issuance)
(%)
12.40
11.40
CET 1
Phased in
11.40
1.00
2.50
11.75
1.25
CCB
2.50
P2R
2.00
Tier 2
1.50
AT1
P1
4.50
Jun 16
Proposed Tier 2
transaction
CET 1
SREP draft 2017 (OCR)
Source: BMN management Information
4
1. Executive Summary
2. Business Profile / About BMN
3. 1H Results
4. Commercial Activity
5. Asset Quality / Risk Management
6. Liquidity & Solvency
7. Transaction Overview
5
BMN is a leading regional franchise
Retail branch network – 682 branches
14
5
BMN key figures – Jun 16
162
Assets
€40.6bn
o/w loans
€22.4bn
Customer deposits
€22.8bn
RWAs
€18.1bn
22
2
> 20 Branches
8
7
3
13
56
46
154
BMN’s
Shareholder structure
169
19
1
1
15.5%
10 – 20 Branches
< 10 Branches
19.5%
Branch market
share
Mar 16
Deposits
market share
Loans market
share
Mar 16(1)
Mar 16 (1)
Granada
25.0%
34.2%
20.5%
1
Murcia
18.8%
30.4%
18.8%
1
Balearic Islands
18.2%
22.9%
15.1%
2
Province
Ranking
market
65.0%
(2)
Founding Cajas
(1)
€2,223mn
Total number of shares
1,613,653,104
Book Value per share
1.38eur/share
Intangible assets
Source:
FROB
Current shareholder composition – Jun 16
Shareholders'equity
BMN Franchise and market shares preserved during the crisis
(3)
Others
€124mn
Branch, deposits and loans market share: BMN management information (Mar 16), sector “Boletín Estadístico” Bank of Spain (Mar 16)
Ranking market: consolidated annual accounts (Dec 14)
Figures excluding non residents & public sector
(2)
Cajamurcia, Caja Granada, Caixa Penedès and Sa Nostra
(3)
Including treasury shares
6
Key BMN Highlights
A banking group focused on retail and SME clients, with strong market share in some of the most dense and dynamic
provinces in Spain, which are expected to benefit earlier from the Spanish economic recovery
Leading Regional Franchise
1
3
Leading retail bank in highly dynamic
regions: Murcia, Granada and Balearic
Islands
Dominant market shares (ranging from
23% to 34%)
Strong regional brands:Not impacted
from retail burden sharing and operating
restructuring on client franchise
Positioned for Growth
Deleveraging completed: LTD ratio of
96.9% in 2Q16
Dominant position in regions that are
expected to grow above average
Recurrent revenues: expanding B/S on
existing SME’s and individuals
Clean and Solid bank
B/S: 68% low risk mortgages and 26% on
SME’s (o/w 53% collateralized)
CET1 Fully Loaded of 11.2%, +0.9pp YoY.
CET1 FL 11.3% including AFS unrealized
sovereign exposure capital gains.
Recurrent Income Generation
Resilient NII and normalized cost of risk
will increase ROE despite low interest rate
environment.
2
Strong Cost Control Post
Restructuring
BMN is still one of the most efficient entities in
Spain, with 0.94% over ATA’s
C/I ratio at 49.4%
7
BMN has successfully adapted to changing conditions following a deep
restructuring process
BMN’s creation
Jun 2010: BMN creation
Deep restructuring effort (completed)
Jan 2011: Caja’s
businesses and assets
transferred to BMN
Feb 2013:
FROB Prefs conversion into
shares
Mandatory Convertible Bonds
conversion into shares
New phase
May 2013: Catalonia &
Aragon Business sold
(€9.8bn assets & €9.6bn
liabilities transferred)
100% of the restructuring
plan targets for 2014
already achieved
Feb 2013: Real estate assets
sold to SAREB (€5.8bn net
assets transferred)
2010
Dec 2010: FROB
subscribes contingent
convertible prefs
(€915m)
2011
Nov 2011:
Mandatory
convertible bonds
(€242m) subscribed
by professional
investors
2012
2013
Dec 2012: Restructuring
Plan Approval
2014-15
201617
Jun 2013: Non-Retail
Burden sharing
execution (€309m
core capital
conversion)
Mar 2013: FROB
subscribes €730m equity
Source: BMN management Information
8
Strong cost control following restructuring
850
Evolution of BMN’s
Branches
Operating cost over ATA
(Jun 16; %)
800
Peer 1
750
700
BMN
795
732
650
600
4.200
682
2014
2015
Jun 16
Evolution of BMN’s
workforce (FTE)
4.000
3.800
3.600
1.03
Peer 5
1.04
Peer 7
1.07
Peer 10
1.09
Peer 9
1.11
Peer 8
4,102
3,904
2014
2015
Jun 16
0.94
Peer 6
Peer 3
4,171
0.77
Peer 4
Peer 2
1.15
1.22
BMN cost to income
ratio ex – NTI (1) 65.34%
1.30
1.35
• Restructuring effort and network evolution model
• Process of optimization of the branch network of the Bank
• Initiatives to improve multichannel activities to increase the number of transactions through alternative channels
• Recoveries activity outsourcing (Lindorff)
• Head Quarters Relocation: relocation of HQ structures (initially located in Madrid, to Murcia and Granada)
• General cost optimization
Source:
(1)
Branches and workforce: BMN management information. Operating cost over ATA: consolidated financial statements (Jun 16)
Cost to income ratio calculated as general expenses and depreciation over gross margin net of NTI
Peers (sorted alphabetically) Abanca, Banco Popular, Banco Sabadell, Bankia, Bankinter, Caixabank, Ibercaja Banco, Kutxabank, Liberbank, Unicaja Banco
9
1. Executive Summary
2. Business Profile
3. 1H Results
4. Commercial Activity
5. Asset Quality / Risk Management
6. Liquidity & Solvency
7. Transaction Overview
10
Key 1H16 results highlights
Underlying core business resilient in spite of interest rate environment
Commercial activity
Recurrent business resilience
Asset Quality
Capital strength
Mutual funds rise 45% YoY
New lending expands 14% in 1H16. New lending rates (2.70%) well above back book (2.30%)
NII grows 1.3% QoQ, in spite of lower income from ALCO portfolio and SAREB repricing at the end of
February
Strong commercial activity leads net fees increase, 5.7% YoY
Good performance in the cost base
Negative Net NPL entries: -€165mn in 2Q16
NPL ratio continues to decline to 10.8%
Real Estate exposure down to 3% of gross credit
Foreclosed assets decrease 5% QoQ
CET1 Fully Loaded at 11.3% (11.2% excluding AFS unrealized sovereign exposure capital gains).
CET1 Phased-In at 11.4%
11
Summary P&L
1
2
€mn
2014
2015
YoY
1H15
1H16
YoY
Net interest income
563
464
-17.6%
250
199
-20.2%
Dividends
15
20
33.3%
10
3
-67.4%
Net fees and
commissions
216
197
-8.8%
101
107
5.7%
Net trading income
450
343
24.0%
152
94
-37.8%
Other
-28
-20
28.7%
6
-17
-360.6%
-1,216
1,004
-17.4%
518
387
-25.4%
-418
-417
-0.2%
-204
-191
-6.5%
798
588
-26.4%
314
196
-37.7%
-580
-489(*)
-15.6%
-215
-125
-41.7%
-74
-84
13.5%
-49
-35
-
143
15
-89.5%
50
35
-29.5%
Taxes
-41
50
-
-8
-4
-55.3%
Net income
102
64
-37.3%
42
32
-24.5%
34.4%
41.5%
39.4%
49.4%
Gross income
3
General and
administrative expenses
Pre provision profits
(PPP)
Provisions and
Impairment losses
Other results
Net operating income
Cost to income (1)
Source:
(1)
(*)
Consolidated annual accounts as of Dec 14 and 15 and consolidated financial statements for the rest
Cost to income ratio calculated as general expenses and amortizations over gross margin
Includes €52mn of collectively calculated provisions in 4T15
12
1
Net Interest Income has shown resilience in spite of FI portfolio reduction
Customer spread broadly stable thanks to prudent liability margin management
Customer spread evolution %
2.80
2.68
2.22
2.56
2.15
0.58
(€mn)
2.44
2.10
4.8%
2.30
2.10
41
2.03
22
262
250
0.53
2Q15
NII YoY Evolution
0.46
3Q15
Customer funds
4Q15
Loans yield
199
0.34
0.27
1Q16
2Q16
Customer spread
NII quarterly Evolution
(€mn)
1H15
1H16
Lower SAREB Lower Other
Contribution
FI
Contribution
Pro-forma
1H16
NII quarterly variation breakdown (€mn)
-18.2%
8
123
+1.3%
105
110
99
100
-7
ALCO Sale & SAREB repricing
2Q15
3Q15
4Q15
1Q16
Rest
2Q16
Source: BMN management Information
13
1
Net Interest Income: Cost of term deposits evolution
Cost of deposits improved 53bp YoY due to reduction in the front book of the term deposits. There remains room for further
improvement as a results of to changes in the business mix: lower term deposits and higher current accounts
Term deposits maturities profile
Term deposits costs evolution (%)
0.77%
0.47%
0.34%
0.97
0.46%
0.84
0.28%
3,737
0.77
0.65
0.55
2,497
0.46
1,452
0.41
0.44
0.34
1,305
0.26
446
2Q16
3Q16
4Q16
Volume of maturities €mn
1Q17
>1Y
Cost of maturities
2Q15
3Q15
Back book
4Q15
1Q16
2Q16
New production
BMN’s deposits mix continues to evolve with term deposits
declining to 44% of customer deposits
Source: BMN management Information
14
Expected impact of removing floor clauses
Based on the outstanding balance at Jun 16 (€mn)
4
199
45
28
Retroactive to the
starting date of the
relevant loan
Reimbursement is
retroactive to 9 May
2013 only
195
35
Provisions
On 13 July 2016 the European Court of Justice'
s Advocate
General issued a written, non-binding opinion in which he
concluded that Spanish banks should not be forced to
reimburse consumers for years of excess mortgage charges
imposed before the 2013 ruling by the Spanish Supreme Court
NII 1H16
E Impact of floors
E NII exfloor 1H16
Limited impact on NII of 2%
Source: BMN management Information
15
2
Net Fee evolution with stable trend
Fee and commission stability over past years despite declining business volumes
Net Fees evolution
(€mn)
-0.5%
+5.2%
55
45
2Q15
3Q15
52
52
55
4Q15
1Q16
2Q16
Fees breakdown
(€mn)
1H15
9M15
2015
Fees received
118
168
225
55
116
Fees paid
17
23
28
3
10
Net fees
101
145
197
52
107
Source:
1Q16
1H16
Consolidated annual accounts as of Dec 15, consolidated financial statements
(Jun 15 and Jun 16) and BMN management information for the rest
16
3
New commercial structure and cost optimization bearing fruits…
Second quarter of significant reduction in general expenses to maintain profitability
General expenses evolution
(€mn)
Jun 16
Resulting in a highly efficient platform
Operating expenses
(% on Average Total Assets)
-6.5%
1.30
1.45
0.09
1.15
204
191
0.94
15
17
57
45
0.77
0.09
0.07
0.22
1.03
1.04
0.09
0.08
0.10
0.28
0.38
0.37
0.56
0.59
Peer 6
Peer 5
0.19
0.36
0.57
0.24
133
130
0.64
0.46
1H15
Personnel Expenses
1H16
G&A
Depreciation
Peer 1
BMN
Personnel Expenses
G&A
0.76
0.75
Peer 3
Peer 4
0.68
Peer 2
Depreciation
Source: BMN management information and consolidated financial statements (Jun 16)
Note: Peer group includes Bankia, Bankinter, Caixabank, Liberbank, Popular and Sabadell
17
1. Executive Summary
2. Business Profile
3. 1H Results
4. Commercial Activity
5. Asset Quality / Risk Management
6. Liquidity & Solvency
7. Transaction Overview
18
Deleveraging still taking place, although at slower pace
Jun 15
Dec 15
Jun 16
YtD
YoY
TOTAL ASSETS
43,745
40,794
40,644
-0.4%
-7.1%
Loans to customers
23,364
22,273
22,418
0.7%
-4.0%
Customer deposits
23,652
22,734
22,763
0.1%
-3.8%
Wholesale funding
13,262
12,250
11,171
-8.8%
-15.8%
LTD (*)
96.3%
95.9%
96.9%
(€mn)
(*) (Loans to customers – ICO loans) / Customer Deposits
Source: BMN management Information
19
Loan portfolio structure focused on low risk mortgages to individuals and on
SME’s in our home regions
Loan Portfolio
(gross exposure, €mn)
Real Estate Breakdown (€mn)
Others
3%
Total Exposure:
22,960
26%
67
525
122
729
Land
SMEs & Corporates Loan Portfolio Breakdown
SME'
s&
Corporates
secured
215
47%
5,952
Buildings
53%
SME'
s&
Corporates
unsecured
448
1,306
Individuals Loan Portfolio Breakdown
68%
8%
14,326
Individuals
mortgages
92%
Real Estate exposure
Individual mortgages and secured SME
X%
Individuals
unsecured
Individuals
Consumer
SMEs & corporates
Real estate
Other construction
Public sector
3%
76%
Percentage of total exposures
Source: BMN management Information
20
1H16 new lending stable with new rates over back book levels
New lending expands at 14% in 2016, SME’s and corporates take c.60% of total, with rates c.2.27%
Jun 16 New lending
(€mn)
New Lending New lending
1H15
1H16
Quarterly New lending breakdown
(€mn)
% Var
New rates
Consumer
Individual others
290
185
415
208
43.0
12.4
2.37%
6.24%
790
186
647
180
851
1,003
17.9
240
713
Public Sector
Total
24
158
1,508
95
1,720
-40.2
14.1
36%
35%
60%
-20%
4%
87
86
449
33
363
17
2Q15
31
605
398
0.77%
2.70%
+24%
162
2.27%
-
100%
121
95
533
Other
+27%
175
112
SME & Corporates
Weight
1,007
928
Individual
mortgages
YoY
5
3Q15
Public Sector
SME & Corporate
Individual mortgagaes
60
55
54
40
4Q15
1Q16
2Q16
Other
Individual others
Compared to 2.30% on the backbook
Source: BMN management Information
21
Mutual funds positive trends accelerate in 2Q16
Investment funds
(AuM; €mn) (1)
Pension funds
(AuM; €mn)
1,414
1,313
974
1,004
1H15
2015
1H16
1H15
1,285
1,240
2015
1H16
(1)
Includes SICAV
Source: BMN management Information
22
1. Executive Summary
2. Business Profile
3. 1H Results
4. Commercial Activity
5. Asset Quality / Risk Management
6. Liquidity & Solvency
7. Transaction Overview
23
Strong effort in NPL reduction
NPL ratio falls c.100bp during the quarter and coverage stabilizes. The cost of risk is reduced by half
Non Performing Loans
(Gross exposure)
NPL Ratio (%)
Gross
NPL
Credit
€mn
13.8
11.9
10.8
2015
NPL % Cover.%
1,006
7.0
28.5
14,615
7.0
28.5
Individual other
1,306
56
4.3
83.1
1,086
5.4
80.8
SMEs & Corp secured
3,126
691
22.1
31.2
3,187
23.1
29.9
SMEs & Corp unsecured
2,825
245
8.7
97.9
2,613
11.0
104.5
Real Estate
729
481
65.9
43.7
884
67.3
42.6
Other Construction
122
54
44.4
35.3
123
43.0
40.9
Public Sector
525
8
1.6
530
1.8
22,960
2,542
TOTAL
2014
NPL %
Dec 15
14,326
Individual mortgages
(1)
Gross
Credit
Cover.% €mn
Jun 16
23,038
1H16
NPL Coverage (%)
Cost of Risk (2)
2.4%
2.1%
41.5
1.1%
40.5
2014
40.5
2015
1H16
2014
2015
1H16
Source: BMN management information
(1) Including repos and other financial institutions assets (€487mn)
(2) CoR calculated as annualized provisions over net loans and repossessed assets
24
Net NPL entries evolution: improvement continues
BMN has been able to maintain NPL reduction consistently
Net NPL entries evolution
(€mn)
400
€mn
200
0
-96
-200
-400
-600
-61
-165
-168
2Q15
3Q15
4Q15
1Q16
2Q16
Gross NPL entries
260
211
336
198
161
Recoveries
-320
-250
-242
-75
-137
Write-Offs and others
-204
-57
-262
-184
-188
Net NPL Entries
-264
-96
-168
-61
-165
-264
2Q15
Gross NPL Entries
3Q15
Recoveries
4Q15
1Q16
Write-offs and Others
2Q16
Net NPL Entries
• Specialized Recovery Centers in each territory fully dedicated to friendly repay agreements up to 120 days of delinquency
• Lindorff outsourcing agreement:
• Friendly recovery repay agreements: By phone and physical managed by 70 agents
• Litigation: In delinquency for over 91 days (both secured and unsecured)
• Aktua outsourcing agreement:
• Litigation: In delinquency for over 120 days
• Servicing and sale of Real Estate Assets
Source: BMN management Information
25
RE loan exposure is limited to 3.2% of total gross exposure
Real Estate NPL coverage
Jun 16 (€mn)
Gross credit
Others
72.2%
31
215
Land
Buildings under
construction
NPL
67
52.2%
153
63
37.9%
36
Finished
buildings
Total RE loans:
€729mn
385
261
36.2%
43.7%
Total Provisions:
€210mn
Source: BMN management Information
26
RE Foreclosed assets exposure is limited to 2.7% of total assets due to BMN’s
transfer of assets to SAREB and ongoing active management
Foreclosed assets and coverage
Jun 2016 (net value, €mn)
159
Others
Coverage of Foreclosed assets vs gross assets
20.2%
25%
32.3%
179
Land
24%
Buildings under
construction
Finished
buildings
21
45.4%
24%
688
Total Foreclosed:
€1,047mn
23.2%
2014
25.1%
2015
1H16
Total Provisions:
€351mn
Source: BMN management Information
27
Foreclosed assets sales
Foreclosed asset sales
(€mn)
2015
NBV vs sale price 2016
(€mn)
2016
21
11
6
3
Jan
15
13
11
9
Feb
Mar
Foreclosed assets
72
NBV
Sale price
12
7
5
5
71
Apr
May
Jun
Jun 15
Dec 15
Jun 16
YtD
YoY
1,010
1,076
1,047
-2.7%
3.7%
Source: BMN management Information
28
1. Executive Summary
2. Business Profile
3. 1H Results
4. Commercial Activity
5. Asset Quality / Risk Management
6. Liquidity & Solvency
7. Transaction Overview
29
Comfortable liquidity position
Sound liquidity position with commercial activity fully funded by retail deposits
Balance sheet breakdown (€mn)
(as of Jun 16)
Wholesale Assets
Retained Covered Bonds
Net Loans
Other assets
40,644
40,644
11,618
11,171
785
785
22,418
22,763
5,823
Retained Covered bonds
Customer Deposits
507
3,195
2,223
Assets
Wholesale Funding
ICO
Other liabilities
Equity
Liabilities and Equity
Source: BMN management Information
30
Comfortable liquidity position
Wholesale assets funded with wholesale liabilities. 48% of fixed income portfolio composed of variable rate instruments well
positioned for rate increases going forward
Wholesale assets
breakdown 2Q16 (€mn)
Wholesale liabilities
breakdown 2Q16 (€mn)
11,618
432
602
98
11,171
Cash and deposits
Repos
Subsidiaries
395
RMBS
1,931
Repos
30
5,451
1Q16: 4,938€mn
5,035
SAREB Bond
4,232
ALCO
Fixed Income
portfolio
4,582
IRR
Wholesale Assets
Duration
Rates
Senior unsecured
ECB
1Q16: 4,232€mn
Covered Bonds
1.2%
2.49yr
48% variable
Wholesale Liabilities
Source: BMN management Information
31
Comfortable liquidity position
Comfortable maturity profile. Total disposable liquid assets amount to 13% of total assets and the trend towards normalization
continues
Wholesale Funding Maturities
(ex-repo and ECB, as of Jun 16) €mn
3.29%
2.26%
3,500
2.16%
1.56%
3,000
2,500
2,000
3,037
1,500
1,000
,500
900
195
,000
2016
2017
Unsecured bond
RMBS
400
392
2018
>2019
30
Covered bond
Liquidity Ratios
Liquidity Buffer in Cash Terms
€mn
1H15
Total liquid assets (ex repo) 11,558
ECB TLTRO
4,573
Unencumbered liquid assets 6,984
% over total assets
16%
2015
1H16
10,463
4,232
9,346
4,232
6,232
15%
5,115
13%
1H16
LCR
NSFR
340%
102%
Source: BMN management Information
32
RWAs and quarterly results improve capital ratios
Capital ratio improving thanks to annual profits and RWAs. Additional room for improvement as IRB models are set up
CET1 Phased In
(%)
CET1 Fully Loaded (1)
(%)
+1.1 p.p.
11.3
+0.9 p.p.
11.4
11.3
11.1
11.0
10.7
10.6
10.3
2Q15
11.1
11.1
11.3
11.2
10.9
10.6
10.3
3Q15
4Q15
1Q16
2Q16
2Q15
3Q15
4Q15
1Q16
2Q16
CET1 FL
CET1 FL including AFS unrealized sovereign exposure capital gains
Capital
€mn
2,054
2,063
2,042
2,052
2,057
2,057
2,039
2,012
2,020
2,028
RWAs
€mn
20,014
19,320
18,420
18,206
18,083
20,014
19,320
18,420
18,206
18,083
Room for improvement: RWAs density of 77.1%(2)
Leverage Ratio (Phased In) 2Q16: 5.08%
Source:
(1)
(2)
BMN management Information
2Q15 includes €72mn, 3Q15 includes €82mn of capital gains, 4Q15 includes €38mn of capital
gains, 1Q16 includes €20mn of capital gains and 2Q16 includes €2mn of capital gains
RWAs density calculated as RWAs over Net Loans and Net Foreclosed Assets
33
1. Executive Summary
2. Business Profile
3. 1H Results
4. Commercial Activity
5. Asset Quality / Risk Management
6. Liquidity & Solvency
7. Transaction Overview
34
Termsheet
Issuer
Banco Mare Nostrum S.A (“BMN” or the “Issuer”)
Issue Date
[•] 2016
Long Term Rating
BB (stable) by Fitch
Expected Security Rating
BB- by Fitch
Ranking
Direct, unsecured and subordinated obligations of the Issuer intended to qualify as Tier 2 Capital
Coupon Payment
• [Fixed [•]% p.a., interest paid annually]
• [Fixed [•]% p.a., until First Call Date and Reset in year 5 to the Initial Margin + 5yr € mid-swap (no step-up). Initial
Margin: [•]%]
Maturity
[•]
[Issuer Call Date]
[[•]]
Regulatory Call
• At par upon occurrence of a Capital Event
• Capital Event: Whole or partial loss of regulatory capital treatment as Tier 2 capital, subject to regulatory approval
Tax Call
At par following imposition of additional amounts to be paid by the Issuer or loss of tax deductibility, subject to
regulatory approval
[Optional Redemption]
[The Issuer may elect in its sole discretion to redeem on [•] 2021 all, but not some only, of the Notes, subject to prior
regulatory approval and at par, together with any accrued and unpaid interest thereon]
Principal Loss Absorption
• No contractual loss absorption by way of conversion into equity or principal write-down
• Loss absorption through implementation of statutory point of non-viability (see Risk Factors)
Listing
AIAF Mercado de Renta Fija
Documentation
Banco Mare Nostrum, S.A. €[•] Prospectus
Denominations
€100k
Distribution
Qualified investors / Reg S
Governing Law
English law except conditions 2.3 (Title and transfer) and 3 (Status of the notes), which are governed by Spanish law
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DISCLAIMER
THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL AND ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN OR ANY JURISDICTION WHERE SUCH DISTRIBUTION IS UNLAWFUL.
This presentation has been prepared by Banco Mare Nostrum, S.A. (the "Issuer" or "BMN") solely for your information and for use at a roadshow presentation in connection with the proposed
issuance of Fixed Rate Reset Subordinated Notes (the "Notes"). For the purposes of this notice, "presentation" means this document, any oral presentation, any question and answer session
and any written or oral material discussed or distributed during the roadshow presentation meeting.
This presentation may not be copied, distributed, reproduced or passed on, directly or indirectly, in whole or in part, or disclosed by any recipient, to any other person (whether within or outside
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s organisation or firm) or published in whole or in part, for any purpose or under any circumstances. The presentation has not been independently verified and no representation or
warranty, express or implied, is made or given by or on behalf of BMN, Deutsche Bank, AG or any of their respective parent or subsidiary undertakings, or the subsidiary undertakings of any
such parent undertakings, or any of such person'
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or fairness of the information or opinions contained in this presentation and no responsibility or liability is assumed by any such persons for any such information or opinions or for any errors or
omissions. All information presented or contained in this presentation is subject to verification, correction, completion and change without notice. In giving this presentation, none of BMN,
Deutsche Bank, AG or any of their respective parent or subsidiary undertakings, or the subsidiary undertakings of any such parent undertakings, or any of such person'
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officers, employees, agents, affiliates or advisers, undertakes any obligation to amend, correct or update this presentation or to provide the recipient with access to any additional information that
may arise in connection with it.
This presentation does not constitute or form part of, and should not be construed as, any offer, invitation or recommendation to purchase, sell or subscribe for any securities in any jurisdiction
and neither the issue of the information nor anything contained herein shall form the basis of or be relied upon in connection with, or act as an inducement to enter into, any investment activity.
This presentation is an advertisement and does not purport to contain all of the information that may be required to evaluate any investment in the Issuer or the Notes and should not be relied
upon to form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation is intended to present background information on
BMN, its business and the industry in which it operates and is not intended to provide complete disclosure upon which an investment decision could be made. Any investment decision should be
made solely on the basis of an approved prospectus (together with any supplementary prospectus, if relevant) in relation to the proposed issuance of the Notes. The merit and suitability of an
investment in the Notes should be independently evaluated and any person considering such an investment is advised to obtain independent advice as to the legal, tax, accounting, financial,
credit and other related advice prior to making an investment.
This presentation is, and the offer of the Notes when made will be, only addressed to and directed at persons in member states of the European Economic Area ("EEA") who are qualified
investors within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC as amended, including by Directive 2010/73/EC) ("Qualified Investors"). In addition, in the
United Kingdom, this presentation is addressed to and directed only at, Qualified Investors who (i) are persons who have professional experience in matters relating to investments falling within
Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), (ii) are persons who are high net worth entities falling within Article
49(2)(a) to (d) of the Order, or (iii) are other persons to whom this presentation may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons").
This presentation must not be acted on or relied on (i) in the United Kingdom, by persons who are not relevant persons, and (ii) in any member state of the EEA other than the United Kingdom,
by persons who are not Qualified Investors. Any investment or investment activity to which this presentation relates is available only to relevant persons in the United Kingdom and Qualified
Investors in any member state of the EEA other than the United Kingdom, and will be engaged in only with such persons.
This presentation and the information contained herein is not intended for publication or distribution in, and does not constitute an offer of securities in, the United States or to any
U.S. person (as defined in Regulation S under the U.S. Securities Act of 1933 (the "Securities Act"), as amended, Canada, Australia, Japan or any other jurisdiction where such
distribution or offer is unlawful. BMN has not registered and does not intend to register the offering in the United States or to conduct a public offering of any securities in the
United States. Securities may not be offered or sold within the United States without registration, except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. Subject to certain limited exceptions, neither this presentation nor any copy of it may be taken, transmitted or distributed, directly or
indirectly, into the United States, its territories or possessions. Any failure to comply with the foregoing restrictions may constitute a violation of U.S. securities laws.
36
To the extent available, the industry, market and competitive position data contained in this presentation has come from official or third party sources. Third party industry publications, studies
and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the accuracy or completeness of such data.
While BMN believes that each of these publications, studies and surveys has been prepared by a reputable source, it has not independently verified the data contained therein. In addition,
certain of the industry, market and competitive position data contained in this presentation come from BMN'
s own internal research and estimates based on the knowledge and experience of its
management in the market in which BMN operates. While BMN believes that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions,
have not been verified by any independent source for accuracy or completeness and are subject to change without notice. Accordingly, undue reliance should not be placed on any of the
industry, market or competitive position data contained in this presentation.
This presentation includes forward looking statements. The words "expect", "anticipate", "intends", "plan", "estimate", "aim", "forecast", "project" and similar expressions (or their negative) identify
certain of these forward looking statements. These forward looking statements are statements regarding BMN'
s intentions, beliefs or current expectations concerning, among other things, results
of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which it operates. The forward looking statements in this presentation are based on numerous
assumptions regarding BMN'
s present and future business strategies and the environment in which it will operate in the future. Forward looking statements involve inherent known and unknown
risks, uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or
achievements of BMN to be materially different from those expressed or implied by such forward looking statements. Many of these risks and uncertainties relate to factors that are beyond
BMN'
s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of regulators and other factors such
as the BMN'
s ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which it operates or in economic or technological trends
or conditions. Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance.
Each of BMN and Deutsche Bank, AG expressly disclaims any obligation or undertaking to release any updates or revisions to these forward looking statements to reflect any change in BMN'
s
expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based after the date of this presentation or to update or to keep current any
other information contained in this presentation. Accordingly, undue reliance should not be placed on the forward looking statements, which speak only as of the date of this presentation.
By attending the meeting where this presentation is made or by accepting a copy of this presentation, you agree to be bound by the foregoing limitations and to maintain absolute
confidentiality regarding the information disclosed in this presentation.
BMN
Investor Relations Area
Paseo de Recoletos, 17 – 4th floor
28004 Madrid (SPAIN)
Isabel Alonso
Head of Investor Relations
[email protected]
+34 91 308 94 47
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