PROSPECTUS
1,500,000 Trust Preferred Securities
ING CAPITAL FUNDING TRUST III
8.439% Noncumulative Guaranteed Trust Preferred Securities
(Liquidation Amount U.S. $1,000 per Trust Preferred Security)
guaranteed to the extent described in this prospectus by
ING
GROUP
ING Groep N.V.
(Amsterdam, the Netherlands)
The trust preferred securities Ì
‚ pay semi-annual distributions of $84.39 per year per trust preferred security up to and including the dividend
payment date in December 2010, and then quarterly distributions at a Öoating rate equal to 3.60% per annum
above 3-month LIBOR, unless ING LLC III does not pay dividends on its company preferred securities,
which are the principal asset of ING Trust III, and the Guarantor is not required to make payments under its
subordinated guarantees.
‚ are guaranteed on a subordinated basis by ING Groep N.V. as described in this prospectus.
‚ have a liquidation amount of $1,000 per security.
‚ may be redeemed on any dividend payment date on or after December 31, 2010 or at other times for the
reasons described in this prospectus under ""Description of the Trust Securities''.
We are Ì
‚ The Guarantor, ING Groep N.V., a holding company incorporated in the Netherlands, who will guarantee you
receive your distributions on a subordinated basis as described in this prospectus;
‚ ING LLC III, ING Capital Funding III LLC, which will use the proceeds from the sale of its company
preferred securities to purchase subordinated notes of the Guarantor; and
‚ ING Trust III, ING Capital Funding Trust III, which will use the proceeds from the sale of its trust preferred
securities to purchase the company preferred securities.
Application has been made to list the trust preferred securities on the Luxembourg Stock Exchange.
Investing in the trust preferred securities involves risks, including the risks described in the
""Risk Factors'' section beginning on page 11 of this prospectus.
Per Security
Public oÅering price(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Underwriting commissions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Proceeds, before expenses, to ING Trust IIIÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
$1,000
(2)
$1,000
Total
$1,500,000,000
(2)
$1,500,000,000
(1) Plus accrued dividends, if any, from the date the trust preferred securities are issued.
(2) ING Trust III will pay the underwriters compensation of $10.00 per trust preferred security.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved
of these securities or determined whether this prospectus is truthful or complete. Any representation to the contrary is
a criminal oÅense.
We expect that the trust preferred securities will be ready for delivery in book-entry form through The Depository
Trust Company on or about December 15, 2000.
Goldman, Sachs & Co.
Lehman Brothers
ING Barings
Morgan Stanley Dean Witter
Merrill Lynch & Co.
Salomon Smith Barney
The date of this prospectus is December 12, 2000.
TABLE OF CONTENTS
Summary Information Ì Q&A ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Risk Factors ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Forward-Looking Statements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Where You Can Find More Information ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Incorporation of Information the Guarantor Files with the SEC ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Presentation of Financial Information ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Summary Selected Financial DataÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
ING Groep N.V. ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
ING Capital Funding Trust III ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
ING Capital Funding III LLC ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Ratios of Earnings to Fixed Charges and Preferred Stock Dividend RequirementsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Use of Proceeds ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Capitalization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Transactions Constituting the Formation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Description of the Trust Securities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Description of the Company Securities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Description of the Guarantees ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Description of the Initial Subordinated Notes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Taxation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
ERISA Considerations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
UnderwritingÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Validity of the SecuritiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Experts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
General Information ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
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You should rely only on the information contained or incorporated by reference in this prospectus. We
have not, and the underwriters have not, authorized any other person to provide you with diÅerent
information. If anyone provides you with diÅerent or inconsistent information, you should not rely on it.
We are not, and the underwriters are not, making an oÅer to sell these securities in any jurisdiction where
applicable law prohibits the oÅer or sale. You should assume that the information appearing in this
prospectus, as well as information we previously Ñled with the Securities and Exchange Commission and
incorporated by reference, is accurate as of the date on the front cover of this prospectus only. Our
business, Ñnancial condition, results of operations and prospects may have changed since that date. We
have taken all reasonable care to ensure that the statements we have made in this prospectus are true and
accurate in all material respects and that we have not omitted any material facts that make any of the
statements we have made in this prospectus misleading. We therefore accept responsibility for the
information contained in this prospectus.
IN CONNECTION WITH THE ISSUANCE OF THE TRUST PREFERRED SECURITIES,
THE UNDERWRITERS MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN
OR OTHERWISE AFFECT THE PRICE OF THE TRUST PREFERRED SECURITIES. SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT THE OFFERING, CREATING A SYNDICATE SHORT POSITION. IN ADDITION, THE UNDERWRITERS MAY BID FOR AND
PURCHASE TRUST PREFERRED SECURITIES IN THE OPEN MARKET TO COVER
SYNDICATE SHORTS OR TO STABILIZE THE PRICE OF THE TRUST PREFERRED
SECURITIES ABOVE INDEPENDENT MARKET LEVELS. THE UNDERWRITERS ARE NOT
REQUIRED TO ENGAGE IN THESE ACTIVITIES, AND MAY END ANY OF THESE
ACTIVITIES AT ANY TIME.
1
SUMMARY INFORMATION Ì Q&A
This summary includes questions and answers
that highlight selected information from this prospectus to help you understand the 8.439%
Noncumulative Guaranteed Trust Preferred Securities. However, this summary does not contain all
the information that may be important to you.
You should read the entire prospectus, including
the Ñnancial data and related notes of the Guarantor and its consolidated subsidiaries, which we are
incorporating by reference, before making an
investment decision. You should pay special attention to the ""Risk Factors'' section to determine
whether an investment in the trust preferred
securities is appropriate for you.
What are the trust preferred securities?
The trust preferred securities represent preferred ownership interests in the assets of ING
Trust III. Each trust preferred security will entitle
you to receive your proportionate share of payments made by ING LLC III on the company
preferred securities. We expect these payments to
cause you to receive noncumulative semi-annual
distributions at an annual rate of 8.439% of the
$1,000 liquidation amount of each trust preferred
security you own (i.e., $84.39 per year for each
trust preferred security) through December 31,
2010, and then quarterly distributions at a Öoating
rate equal to 3.60% per annum above 3-month
LIBOR, and, if ING LLC III is liquidated, the
liquidation amount of $1,000 for each trust preferred security you own.
In this prospectus:
‚ when we refer to ""ING'', ""ING Group''
and ""the Group'', we mean the Guarantor
and its consolidated subsidiaries.
Distributions on the trust preferred securities
and dividends on the company preferred securities
will be paid on the last Business Day in June and
December, commencing in June 2001 and ending
in December 2010, and thereafter will be paid on
the last Business Day in March, June, September
and December, commencing in March 2011.
‚ when we refer to the ""trust preferred
securities'', we mean the 8.439%
Noncumulative Guaranteed Trust Preferred
Securities being issued by ING Trust III
and oÅered by this prospectus.
The Guarantor will guarantee that you receive distributions, on a subordinated basis as
described below under ""Description of the Trust
Securities'', if the Guarantor declares or pays
dividends on its ordinary shares or its preferred
shares or if a subsidiary of the Guarantor has
declared or paid dividends on its preferred shares
that are guaranteed by the Guarantor. The Guarantor will also guarantee on a subordinated basis
that you receive the redemption price and distributions that are due upon liquidation of ING
Trust III.
‚ when we refer to the ""trust common
securities'', we mean the common beneÑcial ownership interests being issued by
ING Trust III to ING LLC III.
‚ when we refer to the ""trust securities'', we
mean the trust preferred securities and the
trust common securities, taken together.
‚ when we refer to the ""company preferred
securities'', we mean the 8.439%
Noncumulative Guaranteed Company Preferred Securities being issued by ING
LLC III to ING Trust III in connection
with the oÅering by ING Trust III of the
trust preferred securities.
The dividends that ING LLC III pays on the
company preferred securities and the Guarantor's
subordinated guarantee of those dividends are
ING Trust III's only sources of funds to pay
distributions on the trust preferred securities to
you. You also will beneÑt from the Guarantor's
subordinated guarantee of the trust preferred
securities.
‚ when we refer to the ""company common
securities'', we mean the common limited
liability company interests being issued by
ING LLC III.
Who is ING Trust III?
‚ when we refer to the ""company securities'',
we mean the company preferred securities
and the company common securities, taken
together.
ING Trust III is a Delaware business trust
that we formed to issue the trust preferred
securities. ING LLC III will own all of the
2
common securities of ING Trust III. The only
assets of ING Trust III will be the company
preferred securities and the subordinated guarantee of the company preferred securities that the
Guarantor issues.
‚ the trust common securities.
ING LLC III's principal executive oÇce is
the same as ING Trust III's.
What are the subordinated notes?
ING Trust III's principal executive oÇces
are located at c/o ING (U.S.) Financial Services,
Inc., 55 East 52nd Street, Park Avenue Plaza,
New York, New York 10055. Its telephone
number is 212-409-1000.
The subordinated notes that ING LLC III
will initially hold will be Ñxed income securities of
the Guarantor that will rank:
‚ junior to substantially all of the Guarantor's
other obligations, but
What are the company preferred securities?
‚ senior to the subordinated guarantees, the
contingent guarantee and the Guarantor's
guarantee of preferred shares of its subsidiaries that rank equal to the subordinated
guarantees, including the guarantees of the
trust securities that ING Capital Funding
Trust I and ING Capital Funding Trust II
issued and the company preferred securities
that ING Capital Funding I LLC and
ING Capital Funding II LLC issued. We
refer to these equally ranking guarantees as
""parity guarantees.''
The 8.439% Noncumulative Guaranteed
Company Preferred Securities of ING LLC III
are preferred limited liability company interests in
ING LLC III. The company preferred securities
will have substantially the same terms as the trust
preferred securities. The company preferred securities have priority over the common securities of
ING LLC III with respect to the payment of
dividends and upon liquidation, except in the
circumstances described in this prospectus under
""Description of the Company Securities'' when
ING LLC III may pay dividends on the company
common securities even though it may not pay
full dividends on the company preferred securities.
The payments that ING LLC III receives on the
Guarantor's subordinated notes and under the
Guarantor's contingent guarantee are
ING LLC III's only sources of funds to pay
dividends or the liquidation distribution on the
company preferred securities.
If the Guarantor makes all of the payments it
is required to make to ING LLC III under the
initial subordinated notes, the aggregate interest
payments on the initial subordinated notes will be
suÇcient for ING LLC III to make the aggregate
dividend payments on the company preferred
securities.
When the initial subordinated notes mature
or are redeemed, ING LLC III may invest in new
subordinated notes or other subordinated securities
issued by the Guarantor or a subsidiary of the
Guarantor that is located outside the United
States. We refer to the initial subordinated notes
and any replacement assets as the ""subordinated
notes.''
Who is ING LLC III?
ING LLC III is a Delaware limited liability
company that the Guarantor formed to issue the
company securities. The Guarantor will own all of
the company common securities. The only assets
of ING LLC III will be:
‚ the initial subordinated notes that the
Guarantor issues or, in the future, new
subordinated notes or other subordinated
securities issued by the Guarantor or a
non-U.S. subsidiary of the Guarantor purchased with the proceeds from the redemption or repayment at maturity of the initial
subordinated notes or other subordinated
securities;
Who is the Guarantor?
The Guarantor is ING Groep N.V., a holding
company incorporated in 1991 under the laws of
the Netherlands, with its corporate seat and
headquarters in Amsterdam, the Netherlands.
Through the Guarantor's various subsidiary operations, the Group oÅers a comprehensive range of
life and non-life insurance, commercial and investment banking, asset management and related
products and services. The Group operates in 60
‚ the contingent guarantee that the Guarantor issues; and
3
countries worldwide and is one of the world's
largest integrated Ñnancial service providers.
nor the Guarantor will pay amounts equal to full
dividends to ING Trust III, or may pay amounts
equal to only a partial dividend. In those circumstances, you will receive no distribution, or only a
partial distribution, on your trust preferred securities. Missed distributions will not accumulate from
period to period.
In 1999, the Group's total operational income
was EUR 44,033 million and its operational net
proÑts were EUR 3,229 million. For the nine
months ended September 30, 2000, the Group's
total operational income was EUR 36,953 million
and its operational net proÑts were EUR 3,047
million.
How and when will ING Trust III pay for
distributions on the trust preferred securities?
The Guarantor's principal executive oÇces
are located at Strawinskylaan 2631, P.O. Box 810,
1000 AV Amsterdam, the Netherlands. Its telephone number is 011-31-20-541-54-11.
ING Trust III will pay distributions out of
any dividends it receives on the company preferred
securities or payments with respect to dividends
under the contingent guarantee from ING
LLC III or payments under the subordinated
guarantee of the company preferred securities
from the Guarantor, as described below. ING
Trust III generally will pay distributions on the
same date that it receives the corresponding
dividends from ING LLC III or the corresponding payments with respect to dividends under the
subordinated guarantee of the company preferred
securities.
Are there any recent developments about the
Group you should know about?
On July 20, 2000, the Group announced that
it had entered into a deÑnitive agreement to
acquire the Ñnancial services and international
businesses of Aetna Inc. See ""ING Groep N.V.
Ì Recent Developments''.
On September 1, 2000, the Group announced
that it had completed its acquisition of ReliaStar
Financial Corp., a leading U.S. life insurer and
provider of integrated Ñnancial services. See ""ING
Groep N.V. Ì Recent Developments''.
When will ING LLC III pay dividends on the
company preferred securities?
ING LLC III expects to pay semi-annual
noncumulative dividends at an annual rate of
8.439% of the $1,000 liquidation amount of each
company preferred security (i.e., $84.39 per year
for each company preferred security) through the
dividend payment date in December 2010, and
then expects to pay quarterly dividends at 3.60%
per annum above 3-month LIBOR. Dividends on
the company preferred securities will be paid on
the last Business Day in June and December,
commencing in June 2001 and ending in December 2010, and thereafter will be paid on the last
Business Day in March, June, September and
December, commencing in March 2011. However,
ING LLC III will pay dividends only if the board
of directors of ING LLC III declares them out of
legally available funds. The Guarantor will control
the board of directors.
On November 19, 2000, the Group announced its Ñrst nine months' results. See ""ING
Groep N.V. Ì Recent Developments'' for a discussion of the Ñrst nine months' results.
On November 19, 2000, the Group announced it had begun the process of reviewing the
future positioning of its investment banking activities. See ""ING Groep N.V. Ì Recent
Developments''.
What distributions will you receive on the trust
preferred securities?
You will generally receive semi-annual distributions at an annual rate of 8.439% of the $1,000
liquidation amount of each trust preferred security
that you own (i.e., $84.39 per year for each trust
preferred security) through the dividend payment
date in December 2010, and then you will receive
quarterly distributions at 3.60% per annum above
3-month LIBOR. However, in the circumstances
described in response to the question ""When will
ING LLC III pay dividends on the company
preferred securities?'' below, neither ING LLC III
ING LLC III is not permitted to declare
dividends on the company preferred securities if:
‚ applicable Netherlands regulations prohibit
the Guarantor from making dividend or other
payments on its preferred shares; or
4
‚ for the most recent dividend period, both:
tees and contingent guarantee the Guarantor will
pay an amount with respect to dividends on the
company preferred securities on any date, whether
or not a regularly scheduled dividend payment
date, on which the Guarantor or any of its
subsidiaries pays a dividend or other payment on
any parity securities. Missed dividends will not
accumulate from period to period.
‚ the Guarantor has not made or declared
any dividend or other payment on its most
senior preferred shares or under its guarantees of preferred shares of its subsidiaries
that rank equal to the subordinated guarantees; and
‚ no subsidiary of the Guarantor has made or
declared any dividend or other payment on
its preferred shares that the Guarantor
guarantees under a guarantee that ranks
equal to the contingent guarantee and
subordinated guarantees.
What are the subordinated guarantees and the
contingent guarantee?
The Guarantor will provide irrevocable and
unconditional guarantees, on a subordinated basis,
of the full payment of amounts equal to:
‚ any dividends on the company preferred
securities, and the corresponding payment by
ING Trust III as a distribution on its trust
securities, that ING LLC III declared or that
the Guarantor must pay as described above;
However, even if ING LLC III does not, or
cannot, declare dividends on the company preferred securities, the Guarantor will pay an
amount equal to full dividends on the company
preferred securities under the subordinated guarantees and the contingent guarantee described
below if:
‚ the distribution due on the company preferred
securities upon ING LLC III's liquidation
and the distribution due on the trust securities upon ING Trust III's liquidation;
‚ the Guarantor declares or makes a dividend
or other payment on its ordinary shares or its
other shares that rank junior to its most
senior preferred shares; or
‚ the redemption price of the company preferred securities and the trust securities; and
‚ any additional amounts that ING LLC III or
ING Trust III must pay for taxes withheld
from these payments.
‚ the Guarantor or any of its subsidiaries
redeems, repurchases or otherwise acquires
any of its ordinary shares or any parity
securities, except in the ordinary course of
business, in connection with employee beneÑt
plans or as a result of certain reclassiÑcations,
exchanges or conversions of shares.
When we refer to ""ordinary shares'', we mean
the ordinary shares of the Guarantor and any
other shares that rank junior to the most senior
preferred shares of the Guarantor. When we refer
to ""parity securities'', we mean the most senior
preferred shares of the Guarantor, together with
any preferred shares of a subsidiary of the
Guarantor that the Guarantor guarantees and
those guarantees. The trust securities issued by
ING Capital Funding Trust I and ING Capital
Funding Trust II and the company securities
issued by ING Capital Funding I LLC and ING
Capital Funding II LLC are parity securities.
In addition, the Guarantor will provide a
contingent guarantee to ING LLC III. Under the
contingent guarantee, the Guarantor guarantees
that it will pay to ING LLC III all amounts due
under the subordinated guarantees, with interest,
to the extent that a claim remains unpaid for
180 days. ING LLC III will distribute any
amounts the Guarantor pays under the contingent
guarantee to the holders of the company preferred
securities, unless they have already been paid
under the subordinated guarantee of the company
preferred securities. If ING Trust III receives any
payment on the company preferred securities from
the proceeds of the contingent guarantee, it will
distribute that payment equally among holders of
the trust securities, unless they have already
received payments under the subordinated guarantee of the trust securities.
Similarly, even if ING LLC III does not, or
cannot, declare dividends on the company preferred securities, under the subordinated guaran-
We intend the subordinated guarantees and
the contingent guarantee, together with the company preferred securities and the trust preferred
5
securities, to provide you with rights to distributions on trust preferred securities, and on liquidation of ING Trust III, substantially equal to those
of holders of the most senior preferred shares of
ING Groep N.V. However, the subordinated
guarantees cover payment of dividends or distributions only if, and to the extent, described above.
The Guarantor may choose to make payments
under its guarantees even if ING Trust III cannot
or need not pay them.
subordinated notes imposes, or from which any
payment thereon is made, ING Trust III, ING
LLC III and the Guarantor will pay additional
amounts so that you will receive the full payment
as though ING Trust III, ING LLC III and the
Guarantor had not withheld any amounts. However, ING Trust III, the Guarantor and ING
LLC III will not pay any additional amounts
where you must pay taxes:
‚ because you are connected, other than as a
holder of the trust preferred securities, to the
Netherlands, Belgium, Germany, France or
Switzerland if it is the jurisdiction that
imposes taxes on you; or
The Guarantor will satisfy all its other liabilities, including obligations under the subordinated
notes, except its obligations under parity guarantees, before it satisÑes its obligations under the
subordinated guarantees and the contingent guarantee. The Guarantor's guarantees of the trust
securities that ING Capital Funding Trust I and
ING Capital Funding Trust II issued and the
company securities that ING Capital Funding I
LLC and ING Capital Funding II LLC issued
are parity guarantees.
‚ because you have not Ñled an appropriate
declaration stating that you are not a resident
of and do not have a connection with the
Netherlands, Belgium, Germany, France or
Switzerland if it is the jurisdiction that
imposes the taxes on you, or a similar claim
for exemption, if we have given you the
opportunity to do so.
What rights do you have if you do not receive
distributions on the trust preferred securities?
Do you have voting rights?
Generally, if ING Trust III does not have
suÇcient funds to pay distributions, and the
Guarantor does not make any payments under the
subordinated guarantees or contingent guarantee,
you will receive a nonpayment notice. Missed
distributions will not accrue. However, the guarantee trustee will have the right to enforce the terms
of the subordinated guarantees if the Guarantor
defaults in a payment or any other obligation
under the subordinated guarantees.
You will have no voting rights, except that
the holders of a majority of the trust preferred
securities may vote to direct the property trustee
in exercising any of its rights as the holder of the
company preferred securities, including:
‚ electing two independent directors to the
board of directors of ING LLC III if ING
LLC III does not pay dividends for any two
consecutive Dividend Periods or any three
Dividend Periods through December 31,
2010, or for four consecutive Dividend Periods or any six Dividend Periods thereafter;
and
If the property trustee or the guarantee
trustee fails to enforce its rights under the
company preferred securities, the subordinated
guarantees or the contingent guarantee after you
have made a written request, you may directly sue
ING LLC III or the Guarantor to enforce those
rights.
‚ electing one independent director to the board
of directors of ING LLC III if the Guarantor
fails to make a payment within ten days after
a claim is made on either of the subordinated
guarantees. We refer to this independent
director as the guarantee independent
director.
In addition, you will have the limited voting
rights described below in response to the question
""Do you have voting rights?''
In addition, you will have the right to vote on
certain amendments to the terms of the trust
preferred securities, the company preferred securities, the subordinated guarantees or the contingent
guarantee. However, some amendments to these
agreements do not require any approval from you.
What about withholding taxes?
If ING Trust III, the Guarantor or ING
LLC III must withhold taxes from any payment
to satisfy taxes that the Netherlands or the
jurisdiction of residence of the issuer of any
6
How will ING Trust III be managed?
ING LLC III may choose to redeem the
company preferred securities:
ING Trust III will initially have Ñve trustees:
‚ in whole or in part on any dividend payment
date on or after December 31, 2010;
‚ three regular trustees appointed by ING
LLC III,
‚ in whole, but not in part, at any time there is
a change in law that results in any of the
special events discussed in this prospectus
under ""Description of the Company
Securities'' relating to ING LLC III's tax
status or the payment of additional amounts;
or
‚ a property trustee, which will be The Bank of
New York, and
‚ a Delaware trustee, which will be The Bank
of New York (Delaware), an aÇliate of the
Property Trustee.
The Bank of New York will also act as
guarantee trustee under the subordinated guarantees and the contingent guarantee. The property
trustee will hold the company preferred securities
and the guarantee trustee will hold the subordinated guarantees and contingent guarantee for
your beneÑt.
‚ in whole, but not in part, at any time if tax is
imposed in the United States or the Netherlands on ING LLC III or ING Trust III.
The cash redemption price will be $1,000 per
security, plus accrued and unpaid dividends for
the current period and additional amounts (if
applicable). This amount is referred to as the
redemption price.
See the section titled ""ING Capital Funding
Trust III'' below for a more complete description
of the trustees.
ING LLC III may also choose to redeem the
company preferred securities for an amount equal
to the greater of the redemption price or the make
whole amount (as described under ""Description of
the Company Securities''), at any time in whole,
but not in part, if:
How will the board of directors manage ING
LLC III?
The board of directors of ING LLC III will
conduct the business and aÅairs of ING LLC III.
The board of directors will initially have four
directors, all appointed by the Guarantor.
‚ any of the special events described under
""Description of the Company Securities''
relating to the tax consequences of the initial
subordinated notes or other successor subordinated securities of the Guarantor occurs; or
The holders of a majority of the trust
preferred securities may direct ING Trust III to
elect independent directors to serve on the board
of directors under the circumstances described
above.
‚ a change in law relating to the status of ING
Trust III or ING LLC III as an investment
company under the Investment Company Act
of 1940, as amended, occurs.
In addition, ING (U.S.) Financial Services,
Inc., a U.S. subsidiary of the Guarantor, will
manage the day-to-day operations of ING
Trust III and ING LLC III by performing
administrative, secretarial and record-keeping services for ING Trust III and ING LLC III and
will pay all operating costs and expenses of ING
Trust III and ING LLC III.
What happens if ING Trust III dissolves?
If ING Trust III dissolves, you will also be
entitled to receive one company preferred security
for each trust preferred security you own.
The trust preferred securities will generally
rank equal to the trust common securities if ING
Trust III dissolves. However, if the Guarantor
defaults under the subordinated guarantees, the
contingent guarantee or the subordinated notes,
the trust preferred securities will rank senior to
the trust common securities upon the dissolution
of ING Trust III, and you will be entitled to
receive your distribution upon liquidation before
Can ING Trust III redeem trust preferred securities for cash?
ING Trust III will redeem the trust securities for a cash redemption price if and to the
extent ING LLC III redeems the company
preferred securities.
7
ING LLC III, as the holder of the trust common
securities, receives any distribution.
upon redemption or in a liquidation of the
Guarantor;
‚ either ING LLC III, the Guarantor or one of
the Guarantor's subsidiaries will at all times
hold 100% of the trust common securities and
company common securities;
What happens if ING LLC III dissolves?
Generally, the holder of company preferred
securities is entitled to $1,000 per company
preferred security, plus accrued and unpaid dividends, out of the assets of ING LLC III.
However, if ING LLC III dissolves at a time
when the Guarantor is subject to a bankruptcy,
insolvency or similar proceeding, holders of company preferred securities will only have the right
to receive substantially the same amount, at
approximately the same time, that they would
have received had they instead owned the most
senior preferred shares of the Guarantor with a
liquidation amount of $1,000 that bear noncumulative dividends at the same rate as the company
preferred securities. As long as the company
preferred securities remain outstanding, ING
LLC III may dissolve only if the Guarantor
dissolves.
‚ the Guarantor will not permit liquidation of
ING LLC III unless it is itself in liquidation
and the Guarantor has paid all claims under
the subordinated guarantees and the contingent guarantee in full; and
‚ ING LLC III will not permit liquidation of
ING Trust III unless either it is itself in
liquidation or certain special events relating to
ING Trust III's tax status or exemption
under the Investment Company Act have
occurred.
Are the trust preferred securities and the company preferred securities rated?
What other obligations will the Guarantor have?
It is anticipated that Standard & Poor's
Rating Services will rate both the trust preferred
securities and the company preferred securities
""A'' and Moody's Investors Service, Inc. will rate
both the trust preferred securities and the company preferred securities ""aa3''.
The Guarantor and ING LLC III will agree
that:
‚ the Guarantor will not assign its obligations
under the subordinated guarantees or the
contingent guarantee;
What are the risks associated with your
investment?
‚ the Guarantor will not issue any preferred
shares, or guarantees of its subsidiaries' preferred shares that rank senior to the subordinated guarantees or the contingent guarantee
Please consider carefully the ""Risk Factors''
section beginning on page 11 of this prospectus.
8
What is the Guarantor's ability to generate earnings to pay Ñxed charges?
The following table sets forth the Guarantor's ratios of earnings to Ñxed charges and ratios of earnings
to combined Ñxed charges and preferred stock dividend requirements for the periods indicated:
Earnings to Fixed Charges:
Including Interest on DepositsÏÏÏÏÏÏÏÏÏÏÏÏÏ
Earnings to Combined Fixed Charges and
Preferred Stock Dividend:
Including Interest on DepositsÏÏÏÏÏÏÏÏÏÏÏÏÏ
1995
Year Ended December 31,
1996
1997
1998
1999
Six Months
Ended June 30,
1999
2000
1.29
1.33
1.39
1.25
1.45
1.61
1.71
1.29
1.32
1.39
1.25
1.45
1.61
1.70
Transactions in Connection with this OÅering
The oÅering will consist of the following series of transactions, which will occur substantially
simultaneously.
‚ ING Trust III will issue the trust common securities to ING LLC III. ING Trust III will publicly
oÅer the trust preferred securities to investors. ING Trust III will use the proceeds from the
oÅering and sale of the trust securities to purchase all of the company preferred securities from
ING LLC III.
‚ ING LLC III will issue all of the company common securities to the Guarantor. ING LLC III
will use the proceeds from the issuance of the company securities to purchase the initial
subordinated notes from the Guarantor and the trust common securities from ING Trust III. The
Guarantor will use the proceeds from the issuance of the initial subordinated notes in its banking
operations.
‚ The Guarantor will issue the subordinated guarantees and the contingent guarantee.
‚ The Guarantor, as the holder of 100% of the issued and outstanding company common securities,
will elect the initial members of the board of directors of ING LLC III, which will consist of at
least four directors. ING Financial Services will enter into a services agreement with ING LLC III
and ING Trust III under which it will perform services for ING LLC III and ING Trust III.
9
The following diagram outlines the relationship among the Guarantor, ING LLC III, ING Trust III
and you as holders of trust preferred securities after the completion of this oÅering:
ING Groep N.V.
subordinated
guarantee of
the company
preferred
securities
contingent
guarantee
subordinated
notes
company
common
securities
proceeds
from the
issuance of
the company
securities
trust common securities
ING Capital
Funding III LLC
subordinated
guarantee of
the trust preferred
securities
company preferred securities
proceeds from the issuance
of the trust securities
10
trust preferred
securities
ING Capital
Funding Trust III
aggregate
offering price
trust preferred
securityholders
RISK FACTORS
Your investment in the trust preferred securities will involve a degree of risk, including those risks
which are described in this section. You should carefully consider the following discussion of risks before
deciding whether an investment in the trust preferred securities is suitable for you.
If the Group's Financial Condition Were to Deteriorate, You Could Lose All or a Part of Your
Investment
If the Group's Ñnancial condition were to deteriorate, we could suspend dividends, distributions or
other payments under the trust preferred securities, company preferred securities, subordinated guarantees
and contingent guarantee and you would not receive any dividends or other payments. The Group does not
expect any net losses for 2000, but you should not assume that unfavorable market or other conditions or
events will not harm its activities. If the Group liquidates, dissolves or winds up, you could lose all or a
part of your investment.
If ING LLC III Does Not Pay Dividends on Its Securities and the Guarantor Need Not Make Guarantee
Payments on the Guarantees, You Will Not Receive Any Distributions on the Trust Preferred Securities
ING Trust III is not obligated to pay distributions to you unless ING LLC III pays dividends on the
company preferred securities or the Guarantor makes payments under the subordinated guarantee of those
securities that enable ING LLC III to do so. ING LLC III does not have to declare or pay dividends on
the company preferred securities, and ING LLC III will pay dividends on the company preferred
securities only if its board of directors declares them. The Guarantor does not have to make any payment
under the subordinated guarantees or the contingent guarantee with respect to dividends on the company
preferred securities or distributions on the trust preferred securities unless:
‚ ING LLC III has declared, or is deemed to have declared, dividends out of funds legally available
for their payment, but has not made such payment; or
‚ the Guarantor or any of its subsidiaries declares or makes a payment on, or redeems or acquires,
any ordinary shares or parity securities, in which case the Guarantor will authorize dividends and,
for the purposes of the subordinated guarantees and the contingent guarantee, they will be deemed
declared on the company preferred securities.
These are the circumstances under which dividends on the company preferred securities are
authorized and, accordingly, if not paid by ING LLC III must be paid by the Guarantor under the
subordinated guarantees or the contingent guarantee.
If on any dividend payment date dividends on the company preferred securities are not authorized or
only partial dividends on the company preferred securities are authorized, then, once dividends up to the
amount authorized are paid on the company preferred securities, the dividend preference will shift from
the company preferred securities to the company common securities and ING LLC III may apply
available funds to pay dividends on the company common securities even if it is not paying dividends on
the company preferred securities.
The Guarantor has no obligation to continue to pay dividends on its ordinary shares and preferred
shares even though it has regularly done so in the past.
Because Distributions Are Not Cumulative, You Will Not Be Entitled to Recover Missed Distributions
Distributions on the trust preferred securities and dividends on the company preferred securities are
not cumulative. If the board of directors of ING LLC III does not declare dividends on the company
preferred securities or the Guarantor does not have to pay under the subordinated guarantees and
contingent guarantee for any dividend period, and the Guarantor does not make a discretionary payment
under the subordinated guarantees, ING Trust III will not pay any distributions for that period. You are
not entitled to recover those missed distributions even if ING LLC III later declares dividends or if
ING Trust III has funds available later.
11
Because You Will Not Control the Administration of ING Trust III and Only Have Limited Voting
Rights, You Will Have No Control Over ING Trust III
The Guarantor will own all the company common securities and will generally have the right to elect
all the members of the board of directors of ING LLC III. ING LLC III will, in turn, own all the trust
common securities and will have the right to appoint all the regular trustees of ING Trust III. A
U.S. subsidiary of the Guarantor will perform services for ING LLC III and ING Trust III. In addition,
the Guarantor will issue the initial subordinated notes.
Except as described in the section in this prospectus called ""Description of the Company
Securities Ì Company Preferred Securities Ì Voting Rights'' below, you will not have any voting rights
with respect to the company preferred securities and cannot vote to elect directors of ING LLC III.
Except as described in the section in this prospectus called ""Description of the Trust Securities Ì
Voting Rights'' below, you will not have any voting rights with respect to the trust preferred securities, and
you cannot vote to appoint, change or to increase or decrease the number of trustees of ING Trust III.
Because the Guarantor's Interests May ConÖict With Your Interests, Its Decisions Could AÅect Whether
You Receive Distributions
In some situations, the Guarantor's interests may conÖict with your interests. For example, the
Guarantor may face conÖicts of interest in allocating its personnel among the Guarantor, ING LLC III
and ING Trust III, or in determining whether to declare a dividend on its own securities, or to defer
interest payments on the subordinated notes. The Guarantor's decision whether to pay dividends on its own
shares may aÅect whether ING LLC III authorizes or declares dividends on the company preferred
securities and as a result, whether you can receive those dividends.
We May Redeem the Company Preferred Securities or Dissolve ING Trust III Upon the Occurrence of
SpeciÑed Tax or Investment Company Events
ING LLC III's tax status or ING LLC III's exemption under the Investment Company Act may
change. If a tax event or an investment company event as described in the section of this prospectus called
""Description of Company Securities'' occurs, then ING LLC III may redeem all the company preferred
securities for cash and ING Trust III will use the cash it receives to redeem the trust preferred securities
from you.
Also, if a tax is imposed in the United States or the Netherlands on ING Trust III or if an
Investment Company Event occurs with respect to ING Trust III, then we may dissolve ING Trust III, in
which case you will receive one company preferred security for each trust preferred security you own. The
company preferred securities may trade at a lower price than the trust preferred securities and may not be
listed on a stock exchange.
If We Dissolve ING Trust III, You May Not Get the Expected Liquidation Amount
If ING Trust III liquidates when the Guarantor is insolvent, you may not receive the full $1,000
liquidation amount of each of your trust preferred securities.
Because You Have a Limited Right to Receive Distributions From the Guarantor, You May Not Receive
All Distributions That Are Due
You have the right to payment with respect to distributions or dividends under the subordinated
guarantees and the contingent guarantee only if:
‚ ING Trust III has legally available funds for making distributions;
‚ ING LLC III's board of directors has actually declared dividends on the company preferred
securities; or
‚ ING LLC III's board of directors is authorized to declare dividends on the company preferred
securities and, accordingly, they are deemed declared.
12
The subordinated guarantees and contingent guarantee do not cover payment of dividends to you if
ING LLC III's board of directors has not declared dividends and if dividends are not authorized on the
company preferred securities.
Because the Guarantor's Obligations Under the Subordinated Guarantees and the Contingent Guarantee
Will Be Deeply Subordinated, the Guarantor Will Pay Its Other Debt Obligations Before It Pays You
The Guarantor's obligations under the subordinated guarantees and the contingent guarantee are
unsecured and rank subordinate to and junior in right of payment to all its other liabilities, except its
obligations under parity guarantees. This means that if the Guarantor fails to pay any liability that is senior
to the subordinated guarantees or the contingent guarantee, it may not make payments on the subordinated
guarantees or the contingent guarantee. As of September 30, 2000, the Guarantor had EUR 418.9 billion
of other debt obligations that are senior to the Guarantor's obligations under the subordinated guarantees
and the contingent guarantee. Also, if the Guarantor is bankrupt or liquidates or dissolves, the Guarantor
or its trustee will use assets of the Guarantor to pay obligations on all liabilities ranking senior to the
subordinated guarantees and the contingent guarantee before making payments on the subordinated
guarantees, the contingent guarantee and parity guarantees. Parity guarantees will share equally in
payments with the subordinated guarantees and the contingent guarantee if the Guarantor does not have
suÇcient funds to make full payments on all of them.
The Guarantor Can Issue Additional Debt Which It Would Pay Before Making Payments on the
Guarantees
The subordinated guarantees and the contingent guarantee do not prohibit the Guarantor from
incurring any debt and the Guarantor may incur additional debt (including secured debt) that is senior or
equal to the subordinated guarantees or the contingent guarantee at any time without your approval. The
Guarantor's obligations under the subordinated guarantees and the contingent guarantee rank subordinate
to substantially all of its other obligations, including indebtedness for money borrowed, and from a
Ñnancial point of view eÅectively rank equivalent to the most senior preferred shares of the Guarantor.
Because the Trust Preferred Securities Are a New Issue, There Is No Assurance That a Trading Market
Will Exist or That It Will Be Liquid
The trust preferred securities are a new issue of securities and have no established trading market.
Although application has been made to list the trust preferred securities on the Luxembourg Stock
Exchange, you cannot assume that an active trading market will develop. Even if an active trading market
does develop, no one, including the underwriters, is required to maintain its liquidity. There may be a
limited number of buyers and the market prices may be uncertain when you decide to sell your trust
preferred securities. The liquidity and market prices for the trust preferred securities will vary depending
on changes in market and economic and Ñnancial conditions of, and prospects for, the Group and other
factors beyond the Group's or any underwriter's control. Accordingly, there is no assurance that a trading
market for the trust preferred securities will exist and no assurance as to the liquidity of any trading
market.
13
FORWARD-LOOKING STATEMENTS
Some of the information contained or incorporated by reference in this prospectus constitutes
""forward-looking statements.'' Although we have based these forward-looking statements on our
expectations and projections about future events, it is possible that actual results may diÅer materially
from our expectations. While we may make forward-looking statements in other parts of this prospectus,
these types of statements are particularly likely to appear in the section called ""ING Groep N.V.''. In
many cases, we include a discussion of the factors that are most likely to cause forward-looking statements
to diÅer from actual results together with the forward-looking statements themselves. Other factors that
could cause actual results to diÅer from our expectations include:
‚ changes in general economic conditions, particularly in the Netherlands;
‚ changes in performance of Ñnancial markets, including emerging markets;
‚ the frequency and severity of insured loss events;
‚ changes aÅecting mortality and morbidity levels and trends;
‚ changes aÅecting persistency levels;
‚ changes aÅecting interest rate levels;
‚ changes aÅecting currency exchange rates, including the euro Ì U.S. dollar exchange rate;
‚ increasing levels of competition in the Netherlands and emerging markets;
‚ changes in laws and regulations, including monetary convergence and the European Monetary
Union;
‚ regulatory changes relating to banking or insurance industries;
‚ changes in the policies of central banks and/or foreign governments; and
‚ general competitive factors, in each case on a global, regional and/or national basis.
In light of these factors and the other factors described in this prospectus, the forward-looking events
discussed in this prospectus might not occur at all or may occur diÅerently than as described. We
undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of
new information or future events or for any other reason.
WHERE YOU CAN FIND MORE INFORMATION
The Guarantor Ñles reports and other information with the Securities and Exchange Commission. You
may also read and copy any document the Guarantor Ñles at the SEC's public reference room at 450 Fifth
Street, N.W., in Washington, D.C. 20549, or at the public reference rooms in New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for more information about the public reference
rooms and their copy charges. You may also inspect our SEC reports and other information at the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
We have Ñled a registration statement on Form F-3 under the Securities Act of 1933 with the SEC
covering the trust preferred securities, the company preferred securities, the subordinated guarantees and
the contingent guarantee. For further information on the trust preferred securities, the company preferred
securities, the subordinated guarantees, the contingent guarantee, ING Trust III, ING LLC III or ING
Groep N.V., you should review our registration statement and its exhibits. This prospectus summarizes
material provisions of the contracts and other documents that we refer you to. Since this prospectus may
not contain all the information that you may Ñnd important, you should review the full text of these
documents. We have included copies of these documents as exhibits to our registration statement.
14
INCORPORATION OF INFORMATION THE GUARANTOR FILES WITH THE SEC
The SEC allows us to ""incorporate by reference'' the information the Guarantor Ñles with them,
which means:
‚ incorporated documents are considered part of this prospectus;
‚ we can disclose important information to you by referring you to those documents; and
‚ information that we Ñle with the SEC will automatically be considered to update and supersede this
prospectus.
We incorporate by reference the documents listed below, which the Guarantor Ñled with the SEC
under the Securities Exchange Act of 1934, as amended:
‚ Annual Report on Form 20-F for the year ended December 31, 1999; and
‚ Current Reports on Form 6-K Ñled February 14, 2000, February 16, 2000, March 6, 2000,
March 17, 2000, March 24, 2000, April 12, 2000, May 1, 2000, May 26, 2000, June 7, 2000,
June 20, 2000, June 22, 2000, July 20, 2000, July 31, 2000, August 29, 2000, September 7, 2000,
September 14, 2000, September 20, 2000, November 20, 2000, November 22 and December 4,
2000.
We also incorporate by reference all reports we Ñle under Section 13(a) or (c) or Section 15 of the
Exchange Act, including any report on Form 6-K which speciÑcally states it is incorporated by reference,
after the date of this prospectus but before the end of the trust preferred securities oÅering.
You may request a copy of any Ñlings that we refer to above, excluding exhibits, other than those that
we speciÑcally incorporate by reference into the documents you request, at no cost, by contacting the
Guarantor at the following address: ING Groep N.V., Attention: Investor Relations, Strawinskylaan 2631,
P.O. Box 810, 1000 AV Amsterdam, the Netherlands, Telephone: 011-31-20-541-54-11. You may also
obtain a copy of any documents that we incorporate by reference in this prospectus, at no cost, at the
oÇce of the Luxembourg listing agent.
PRESENTATION OF FINANCIAL INFORMATION
Except as otherwise noted, we present the Ñnancial statement amounts in this prospectus and in the
Annual Report in accordance with generally accepted accounting principles in the Netherlands, which
diÅer in certain signiÑcant respects from generally accepted accounting principles in the United States.
Please refer to Note 6 of the Notes to the Consolidated Financial Statements that is contained in the
Annual Report and that we incorporate by reference into this prospectus for a description of the signiÑcant
diÅerences between Dutch GAAP and U.S. GAAP and a reconciliation of certain income statement and
balance sheet items to U.S. GAAP.
We have derived the Ñnancial data in this prospectus presenting year end Ñgures from audited
Ñnancial statements of the Group. We have derived all Ñnancial data in this prospectus presenting interim
Ñgures from unaudited Ñnancial statements. Also, operational result excludes non-operational items. You
can Ñnd an explanation on, and a breakdown of, non-operational items in the Form 6-K Ñled on
September 20, 2000.
The Group presents its Consolidated Financial Statements in euros. Solely for your convenience, this
prospectus contains translations of euro amounts into U.S. dollars at speciÑed rates. You should not regard
these translations as representations that the translated amounts actually represent those dollar or euro
amounts, or that we could convert into U.S. dollars or euros at the rates indicated or at any other rate.
Therefore, unless we state otherwise, we have made these translations of euros into U.S. dollars at the rate
of $0.8570 to EUR 1.00, which was the noon buying rate in New York City for cable transfers in euros as
the Federal Reserve Bank of New York certiÑed for customs purposes (the ""Noon Buying Rate'') on
November 15, 2000.
15
Since the euro did not exist prior to January 1, 1999, we cannot present formal exchange rates
between the euro and the U.S. dollar for the periods shown in the Group's consolidated Ñnancial
statements and in the other Ñnancial information discussed in this Prospectus and the Annual Report. Our
functional currency during those periods was the Dutch guilder. All Dutch guilder amounts appearing in or
derived from ING's Consolidated Financial Statements have been translated into euros at the oÇcial Ñxed
conversion rate of EUR 1.00 • NLG 2.20371. Please refer to the tables below to ascertain how the trends
in our Ñnancial results might have appeared had we expressed them in U.S. dollars.
The table below shows the period end, average, high and low Noon Buying Rates for U.S. dollars per
euro for the periods and dates indicated:
Calendar Period
Period End(1)
1995(4) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
1996(4) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
1997(4) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
1998(4) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
1999 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
2000 (through November 15, 2000)(2)(3) ÏÏÏÏÏÏÏ
1.3743
1.2760
1.0867
1.1741
1.0070
0.8570
Average Rate(2)
High
(Value of U.S. $ per euro)
1.3798
1.3048
1.1252
1.1113
1.0666
0.9179
1.4506
1.3709
1.2738
1.2147
1.1812
1.0335
Low
1.2597
1.2550
1.0406
1.0549
1.0016
0.8270
(1) The Noon Buying Rate at such dates diÅered from rates used in the preparation of ING's
Consolidated Financial Statements as of such date. See Note 1.6.1.4 of Notes to the Consolidated
Financial Statements in the Annual Report.
(2) The average of the Noon Buying Rates on the last business day of each month during the relevant
period, except for the month of November, 2000 where we used November 15, 2000 in place of the
last day of the month.
(3) The Noon Buying Rate on November 15, 2000 was $0.8570 per EUR 1.00.
(4) Amounts prior to January 1, 1999 are the Noon Buying Rate for the Dutch Guilders, converted into
euros at the Ñxed translation rate of EUR 1.00 • NLG 2.20371.
Certain amounts set forth in this prospectus may not sum due to rounding.
Unless otherwise indicated, the terms ""gross premiums,'' ""gross premiums written'' and ""gross written
premiums'' include premiums (whether or not earned) for insurance policies that we wrote during a
speciÑed period, without any deduction for premiums ceded, and the terms ""net premiums,'' ""net
premiums written'' and ""net written premiums'' include premiums (whether or not earned) for insurance
policies that we wrote during a speciÑed period, after deduction for premiums ceded.
16
SUMMARY SELECTED FINANCIAL DATA
We have derived the summary selected consolidated Ñnancial data for the years ended 1995 through
1999 set forth below from the Group's audited Consolidated Financial Statements and the related Notes.
The Ñnancial statements for the Ñve Ñscal years ended December 31, 1999 have been audited by Ernst &
Young Accountants, independent auditors, except for the Ñnancial statements of ING Bank N.V., a direct
wholly-owned subsidiary of the Group, which were audited by KPMG Accountants N.V. and whose
report, only insofar as it relates to the 1999 and 1998 Consolidated Financial Statements, is based in part
upon the reports of other auditors.
You should not rely solely on the information below, but you should read it in conjunction with the
Group's Consolidated Financial Statements and the related Notes contained in the Annual Report, and
other Ñnancial information that we include elsewhere in the Annual Report and in this prospectus.
Please see ""Presentation of Financial Information'' above for a discussion of important considerations
relating to the presentation of this Ñnancial data.
Six Months Ended
Year Ended December 31,
June 30,
1995
1996
1997
1998
1999
1999
1999
2000
2000
EUR(9) EUR(9) EUR(8)
EUR
EUR USD(1) EUR
EUR USD(1)
(restated)
(in millions, except amounts per share and ratios)
Dutch GAAP Consolidated Income
Statement Data
Operational income from insurance
operations:
Gross premiums written:
Life ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Non-life ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
6,736
3,025
7,776
3,261
10,810
3,535
16,863 18,902
3,585 3,510
16,199
3,008
8,582 11,198
1,892 2,242
9,597
1,921
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Investment income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Commission and other income ÏÏÏÏÏ
9,761
4,359
165
11,037
5,025
214
14,345
6,544
274
20,448 22,412
7,830 11,209
457
548
19,207
9,606
470
10,474 13,440
5,200 4,589
234
475
11,518
3,933
407
14,285
16,276
21,163
28,735 34,169
29,283
15,908 18,504
15,858
8,336
5,496
9,191
5,901
10,641
7,125
18,649 18,559
13,448 12,907
15,905
11,061
8,980 11,736
6,126 8,857
10,058
7,591
Net interest result ÏÏÏÏÏÏÏÏÏÏÏÏÏ
Commission ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Other income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
2,840
899
689
3,290
1,201
825
3,516
1,645
1,145
Total income from banking
operations ÏÏÏÏÏÏÏÏÏÏÏÏ
Total income(2)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
4,428
18,697
5,316
21,578
Operational expenditure from
insurance operations:
Life ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Non-life ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Insurance operations Ì
general(3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
9,453
3,164
Total income from
insurance operations ÏÏÏÏ
Operational income from banking
operations:
Interest incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Interest expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Total operational expenditure from
insurance operations ÏÏÏÏÏÏÏÏÏÏÏÏ
Total operational expenditure from
banking operations(4) ÏÏÏÏÏÏÏÏÏÏ
Total expenditure(2)ÏÏÏÏÏÏÏÏÏÏÏÏÏ
5,201
2,323
891
5,652
2,856
1,368
4,844
2,448
1,172
6,306
27,451
8,415 9,876
37,134 44,033
11,030
3,378
15,170
3,617
21,820 26,849
3,813 3,736
712
734
688
13,329
15,142
3,633
16,946
4,349
19,476
2,879
1,886
1,052
2,467
1,616
902
8,464
37,736
4,729 5,817
20,632 24,314
4,985
20,837
23,009
3,202
12,290 14,032
2,005 2,323
12,025
1,991
1,184
1,015
19,475
26,670 31,769
5,030
24,487
7,610 7,895
34,265 39,652
17
1,037
2,854
1,325
550
443
635
544
27,226
14,738 16,990
14,560
6,766
33,982
3,725 4,364
18,458 21,347
3,740
18,294
Six Months Ended
Year Ended December 31,
June 30,
1995
1996
1997
1998
1999
1999
1999
2000
2000
EUR(9) EUR(9) EUR(8)
EUR
EUR USD(1) EUR
EUR USD(1)
(restated)
(in millions, except amounts per share and ratios)
Operational result before taxation
from insurance operations:
Life ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Non-life ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Insurance operations Ì general(3)
498
154
304
548
198
388
652
300
736
1,075
154
836
1,256
182
962
1,076
156
825
586
82
502
768
125
621
658
107
533
956
1,134
1,688
2,065
2,400
2,057
1,170
1,514
1,298
795
968
1,276
804
1,981
1,698
1,004
1,453
1,245
Operational result before taxation
and dividend on own shares ÏÏÏÏÏ
Dividend on own sharesÏÏÏÏÏÏÏÏÏÏÏ
1,751
(27)
2,102
(33)
2,964
(44)
2,869
4,381
3,755
2,174
2,967
2,543
Operational result before taxation ÏÏ
TaxationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Third-party interestsÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
1,724
516
6
2,069
546
16
2,920
705
35
2,869
719
47
4,381
1,059
93
3,755
908
80
2,174
517
38
2,967
834
62
2,543
715
53
Operational net proÑtÏÏÏÏÏÏÏÏÏÏÏÏÏ
Non-operational items after taxation
Net proÑt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Dividend on preference shares of
ING Groep N.V. ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
1,202
1,507
1,202
1,507
2,180
26
2,206
2,103
566
2,669
3,229
1,693
4,922
2,767
1,451
4,218
1,619
1,693
3,312
2,071
3,413
5,484
1,775
2,925
4,700
21
21
21
21
21
18
10
10
9
1,181
546
635
1,486
708
778
2,185
867
1,318
2,648
1,178
1,470
4,901
1,573
3,328
4,200
1,348
2,852
3,302
5,474
4,691
1.74
1.74
2.07
2.07
2.79
2.83
2.23
2.84
3.35
5.12
2.87
4.39
1.69
3.46
2.16
5.74
1.85
4.92
1.69
0.75
43.2%
1.99
0.91
43.9%
2.75
1.04
36.9%
2.79
5.04
1.25
1.63
43.9% 44.4%
4.32
1.40
44.4%
3.41
0.63
5.66
0.82
4.85
0.70
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Operational result before taxation
from banking operations ÏÏÏÏÏÏÏÏ
Net proÑt after deducting dividend
on preference shares of ING
Groep N.V. ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Dividend on ordinary shares ÏÏÏÏÏÏÏ
Addition to shareholders' equity ÏÏÏÏ
Operational net proÑt per ordinary
share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Net proÑt per ordinary share(5) ÏÏÏ
Net proÑt per ordinary share and
ordinary share equivalent(5)ÏÏÏÏÏ
Dividend per ordinary share ÏÏÏÏÏÏÏ
Dividend pay-out ratio ÏÏÏÏÏÏÏÏÏÏÏÏ
U.S. GAAP Consolidated Income
Statement Data
Net proÑt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Net proÑt per ordinary share and
ordinary share equivalent(5)ÏÏÏÏÏ
1,455
2,121
2,447
2,347
3,790
3,248
2,887
4,804
4,117
2.06
2.81
3.05
2.45
3.88
3.33
2.97
4.96
4.25
18
Six Months Ended
Year Ended December 31,
June 30,
1995
1996
1997
1998
1999
1999
1999
2000
2000
EUR(9) EUR(9) EUR(8)
EUR
EUR USD(1) EUR
EUR USD(1)
(restated)
(in billions, except amounts per share and ratios)
Dutch GAAP Consolidated Balance
Sheet Data
Total assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Investments:
InsuranceÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Banking ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Eliminations(6) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
179.8
220.7(7) 281.5
492.8
422.3
445.4
555.4
476.0
109.7 137.5
41.2
59.5
(1.1) (1.2)
117.8
51.0
(1.0)
124.5 139.4
43.7
54.6
(1.0) (2.0)
119.5
46.7
(1.7)
149.8
153.7
195.8
201.8
167.8
172.9
167.2
171.6
192.0
239.6
164.5
205.3
58.6
12.8
(1.6)
69.0
18.8
(2.3)
Total investments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Lending ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Insurance provisions:
Life ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Non-life ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
69.8
75.6
85.5
110.9
92.8(7) 113.8
44.1
4.4
50.2
4.9
70.2
5.3
79.4
5.2
101.0
6.5
86.5
5.6
90.5
5.9
106.6
6.9
91.4
5.9
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Funds entrusted to and debt
securities of the banking
operations:
Savings accounts of the banking
operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Other deposits and bank funds ÏÏÏ
Debt securities of the banking
operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
48.5
55.1
75.5
84.6
107.5
92.1
96.4
113.5
97.3
26.2
43.8
30.3
50.0
30.1
57.0
42.5
86.6
47.0
111.9
40.3
95.9
45.5
98.8
49.1
138.4
42.1
118.6
10.0
12.7
22.7
35.7
65.9
56.5
38.3
63.8
54.7
80.0
23.6
10.8
93.0
109.8
32.9
43.0
16.1(7) 21.9
164.8
76.0
29.1
224.8
75.3
34.6
192.7
64.5
29.7
182.6
87.9
31.8
251.3
96.8
34.2
215.4
83.0
29.3
15.12
21.25(7) 26.59
30.42
35.81
30.69
32.83
35.55
30.47
14.71
20.43(7) 25.87
29.85
35.29
30.24
32.36
35.07
30.05
187.5
13.0
230.4
18.9
295.3
26.5
417.4
37.2
509.7
40.4
436.8
34.6
38.2
39.2
33.6
17.77
24.18
31.31
38.29
41.29
35.39
38.89
40.19
34.44
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Due to banksÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Shareholders' equityÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Shareholders' equity per ordinary
share(5) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Shareholders' equity per ordinary
share and ordinary share
equivalent(5) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
U.S. GAAP Consolidated Balance
Sheet Data
Total assets ÏÏÏÏÏÏÏÏÏÏÏÏÏ
Shareholders' equityÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Shareholders' equity per ordinary
share and ordinary share
equivalent(5) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
94.8
17.8
(1.7)
394.9
(1) For your convenience, we have translated euro amounts into U.S. dollars at the exchange rate of
$0.8570 to EUR 1.00, the Noon Buying Rate in New York City on November 15, 2000 for cable
transfers in euros as the Federal Reserve Bank of New York certiÑed for customs purposes.
(2) After elimination of certain intercompany transactions between the insurance operations and the
banking operations. See Note 1.2. of the Notes to the Consolidated Financial Statements in the
Annual Report.
(3) Insurance operations Ì general includes the results of insurance holding companies and non-insurance
companies within ING Verzekeringen N.V. and its consolidated subsidiaries, as well as income from
investments that we allocate to the capital and surplus of the Group's insurance companies. See
Note 3.6.4. of the Notes to the Consolidated Financial Statements in the Annual Report.
19
(4) Includes all non-interest expenditures, including additions to the Provision for loan losses. See
""Management's Discussion and Analysis of Financial Condition and Results of Operations Ì
Liquidity and Capital Resources'' in the Annual Report.
(5) We have calculated net proÑt per share amounts based on the weighted average number of ordinary
shares outstanding and we have calculated shareholder's equity per share amounts based on the
number of ordinary shares outstanding at the end of the respective periods. For purposes of this
calculation, Guarantor shares that Group companies held were deducted from the applicable number
of outstanding ordinary shares. We present all amounts after giving eÅect to all stock dividends and
retroactive application of the Guarantor's 2.5 for 1 stock split, which was eÅective June 3, 1996.
(6) Consisting of investments in banking operations that Group insurance companies held, investments in
insurance operations that Group banking companies held, and Guarantor shares that Group insurance
companies held.
(7) With eÅect from the 1997 Ñnancial year, we have included a part of the hidden reserve in the new
Fund for general banking risk, the remainder we added to shareholders' equity. In the balance sheet
for 1996, we have restated the comparative Ñgures accordingly.
(8) For an explanation about restating the 1997 published Ñgures, see Note 1.3. of the Notes to the
Consolidated Financial Statements in the Annual Report.
(9) We have not restated the 1996 and 1995 Ñgures as it is not practicable to obtain the information.
20
ING GROEP N.V.
General
The Group operates in 60 countries worldwide, and is one of the world's largest integrated Ñnancial
service providers, oÅering a comprehensive range of life and non-life insurance, commercial and investment
banking, asset management and related products and services. The Group is the market leader in
integrated Ñnancial services in the Benelux countries and has considerable market positions in the rest of
Western, Central and Eastern Europe, North America, South America, Africa, Asia and Australia. In
1999, ING had gross written premiums of EUR 22,412 million, making it the largest insurer in the
Netherlands. Management believes that at December 31, 1997, ING was the 17th largest insurer in
Europe, based on gross written premiums. Also, at the end of 1999, ING Bank had tier one capital of
EUR 14 billion, making it the third largest bank in the Netherlands. When we refer to ""ING Bank'', we
mean ING Bank N.V., together with its consolidated subsidiaries. When we refer to the ""Bank'', we mean
ING Bank N.V. Management believes that at December 31, 1998, ING Bank was the 11th largest bank
in Europe and the 26th largest bank in the world based on tier one capital. The Group markets its
products and services under a variety of well-recognized and strong brand names, including NationaleNederlanden, ING Bank, ING Barings and ING Direct worldwide, Postbank in the Netherlands, Bank
Brussel Lambert (""BBL'') in Belgium, BHF-BANK in Germany and Mercantile Mutual in Australia. At
the same time, the Group's subsidiaries Ì particularly outside the Benelux countries Ì now increasingly
choose to include the letters "ING' and the orange lion in their name and logo. Virtually all ING
companies in North America have adjusted their name and logo during the past year (e.g., ING Halifax,
ING Commerce Group and ING Belair in Canada; and ING Security Life, ING Life of Georgia, ING
Equitable and ING Furman Selz in the U.S.) in this manner. For the year ended December 31, 1999, the
Group's total income was EUR 45,726 million and its net proÑt was EUR 4,922 million. ING had
consolidated total assets of EUR 492.8 billion at December 31, 1999.
The Group's home market is the Benelux countries, where the Group is the market leader in
integrated Ñnancial services. In the Netherlands, the Group is the largest life and pension insurer and the
second largest non-life insurer, based on gross premiums written in 1997. ING Bank has the leading
position in the Dutch payments transfer system. The Group, through its banking and insurance operations,
has a Ñnancial relationship with approximately 75% of households in the Netherlands. In Belgium, the
Group is the third largest bank in terms of tier one capital as of December 31, 1998 and the sixth largest
insurer in terms of gross premiums written in 1997.
The following table sets forth the Group's consolidated income by geographic area for the years
indicated:
Year Ended December 31,
1997 (restated)(1)
1998
(EUR millions)
The Netherlands ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
BelgiumÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Rest of Europe ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
North AmericaÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
South America ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Asia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Australia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Income between geographic areas ÏÏÏÏÏÏÏÏÏÏÏÏ
13,343
778
2,129
7,350
376
1,374
2,166
159
27,675
(144)
27,531
14,876
3,268
2,246
13,360
445
1,386
2,484
183
38,248
(177)
38,071
1999
18,266
3,255
3,686
14,832
567
1,747
3,406
153
45,912
(186)
45,726
(1) See Note 1.3 of the Notes to the Consolidated Financial Statements in the Annual Report for a
discussion of the restatement of 1997 results.
21
Outside the Benelux countries, the Group's international insurance operations concentrate primarily on
servicing individuals and small and medium-sized enterprises in regional and national markets. The Group
currently has insurance activities in 26 countries outside the Benelux countries. The Group occupies a
prominent position in life insurance in several developed markets (including the U.S. and Australia) and
has successfully established greenÑeld life insurance operations as a key to its strategy for international
expansion in emerging markets in Central Europe and Asia. ING's international market position in nonlife insurance is particularly prominent in Canada where it has a number two position. The international
banking operations of the Group outside the Benelux countries consist of a prominent network of over
350 oÇces in approximately 60 countries dedicated to the delivery of banking products and services in the
Ñeld of corporate and investment banking, private banking and commercial banking. Particularly in the
emerging markets, ING's corporate and investment banking operations have gained a prominent
reputation. Moreover, ING has a signiÑcant presence in international trade and commodity Ñnance.
ING has an active expansion strategy and in recent years has rapidly expanded its asset management
activities, most notably as a result of the acquisition of the principal assets and liabilities of the U.K.
merchant bank Barings in March 1995 and the acquisition of Furman Selz in August 1997. Subsequently,
ING has signiÑcantly expanded its U.S. life insurance and annuity businesses through the acquisition of
Equitable of Iowa in October 1997, the acquisition of ReliaStar on September 1, 2000 and the proposed
acquisition of Aetna Financial Services and Aetna International, anticipated to close by mid-December,
2000. ING is currently in the process of reviewing the future positioning of its investment banking
activities. See ""Ì Recent Developments Ì Review of Investment Banking Activities''. Due to the
acquisition of BBL in January 1998, ING has access to the second home market in Belgium and a
strengthened position in Europe. Furthermore, due to its equity investment in Allgemeine Deutsche
Direktbank in March 1998 and the acquisition of substantially all of the outstanding shares of BHFBANK in the fall of 1999, ING has access to the important German market. In 1999, the Group
increased its stake in the French bank Crπedit Commercial de France to more than 19%, but withdrew its
oÅer of EUR 137.50 per share for the remaining shares of Crπedit Commercial because of a lack of support
by the Crπedit Commercial Board of Directors. On April 1, 2000, HSBC made an oÅer, which was
accepted by the Crπedit Commercial Board, of EUR 150 or 13 HSBC shares per share on all outstanding
shares of Crπedit Commercial. As of September 30, 2000, ING sold its shares pursuant to HSBC's oÅer.
The following table shows the relative contributions of the Group's insurance and banking operations
to the consolidated result before taxation in 1997 restated compared to 1998 and 1999:
1997 (restated)
Year Ended December 31,
1998
(EUR millions)
1999
Insurance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Banking ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
1,643
1,356
55%
45%
2,428
1,076
69%
31%
3,632
2,442
60%
40%
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
2,999
100%
3,504
100%
6,074
100%
Insurance Operations
The Group oÅers a comprehensive range of life and non-life insurance products in the Netherlands,
the United States, Canada, Australia and Belgium. ING Insurance also primarily oÅers a range of life
insurance products through greenÑeld operations in Europe, including a number of Central and Eastern
European countries, Asia and Latin America. When we refer to ""ING Insurance'', we mean ING
Verzekeringen N.V., ING Groep N.V.'s primary insurance subsidiary, together with its consolidated
subsidiaries. Life insurance products include retirement products and life products for individuals and
groups. In the Group's mature markets, ING oÅers a broad range of those products with an increasing
emphasis on savings products. In ING's insurance greenÑeld operations, the product range is generally
more limited with an orientation towards individual life coverages. All of these products are tailored to the
local markets. In the non-life sector, the Group's insurance products principally include Ñre, automobile,
accident and health as well as workmen's compensation, transport and aviation and third-party liability. In
1999, total income from insurance operations was EUR 35,401 million (EUR 22,412 million in gross
22
premiums written and EUR 12,989 million in investment and other income) with life insurance accounting
for EUR 18,902 million of gross premiums written and non-life insurance accounting for EUR 3,510
million of gross premiums written. In 1999, the result before taxation from insurance operations was
EUR 3,632 million.
Banking Operations
The Group's banking operations principally include the commercial banking operations that the Group
conducts in the Netherlands through the branch network of ING Bank Nederland and through the direct
marketing channel that Postbank utilizes, commercial banking operations in Belgium and internationally
that the Group conducts through BBL, and international corporate and investment banking operations,
including ING Barings. In 1999, total income from banking operations was EUR 10,337 million and the
result before taxation was EUR 2,442 million.
Domestic Banking Operations
The Group's domestic banking operations provide a wide array of banking products and services to
individual and corporate customers in the Netherlands. Individual products include consumer loans,
mortgage loans, funds transfer, electronic banking, personal Ñnancial services, credit and debit cards and
savings and other deposit accounts. Products and services that the Group provides to corporate customers
include corporate loans, cash management, funds transfer and payment systems, foreign exchange and
leasing.
International Banking
The Group's international corporate banking activities specialize in emerging market activities and
provide a full range of corporate banking products and services. ING Barings principally conducts
investment banking activities, which consists of the investment banking activities that ING Bank and
Barings previously conducted. ING Barings also specializes in emerging markets with its activities
including, among others, equity research, underwriting, advisory services (principally cross-border mergers
and acquisitions) and trading and sales of emerging market debt and other Ñnancial products.
The Group also conducts retail banking operations in Australia, Belgium, Canada, Greece, Hungary,
Italy and Poland. The most signiÑcant of these operations are in Australia, Poland and Belgium. The
Group's most recent acquisitions of retail banks in Poland (1994), Belgium (1998) and Germany (1999)
are part of the Group's strategy to provide integrated Ñnancial services in these markets and utilize bancassurance for distribution of insurance products.
Asset Management
ING Asset Management, with over EUR 325 billion in assets under management at December 31,
1999 and an average of 3,858 employees (based on full-time equivalents), is comprised of the following
eight business units:
ING Investment Management
Baring Asset Management
ING Baring Private Bank
ING Real Estate
ING Trust
Parcom Ventures
Baring Private Equity Partners
ING Furman Selz Asset Management
ING Asset Management covers investment management and account management for institutional
investors, international banking services for high net-worth individuals, ING's real estate and equity
investment activities, the management of ING's own label and third-party investment funds and asset
management on behalf of the ING insurance companies.
23
The following sets forth information about ING Asset Management's assets under management for
the periods indicated. In line with international conventions, assets under management currently also
include advisory assets under management.
Year Ended December 31,
1997
1998
1999
(EUR billions)
Own Funds ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Third-Party Funds ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
84
90
94
159
108
237
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
174
253
345
Of which:
ING Asset Management ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Other ING subsidiaries ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
158
16
234
19
325
20
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
174
253
345
Strategy
The Group has a number of characteristics that set it apart from its competitors in the Netherlands
and abroad and that contribute generally to the strength of the Group. The Group has stable earnings and
cash Öow, enabling it to Ñnance its international expansion due to its strong market positions in insurance
and banking in its home market, the Benelux. Key to the Group's strategy is the concept of integrated
Ñnancial services and the access to multiple distribution channels. This enables the Group to sustain and
even grow its market position in its home markets, which are marked by Ñerce competition. Additionally,
the Group's strategy is characterized by its life insurance greenÑeld strategy, which enabled the Group and
its predecessors over the last 20 years to successfully start-up life operations in Southern and Central
Europe, the Far East and Latin America. Furthermore, the Group is distinguished by its acknowledged
position as an emerging market specialist, with the Group's acquisition of the principal assets and liabilities
of Barings in 1995 enhancing its strength in emerging markets.
Strategic Objectives
At the time ING Groep N.V. was formed in 1991, the Group's stated strategic objectives were: to
become the market leader in providing integrated Ñnancial services in its home market of the Netherlands,
including maintaining its leading position in the life and non-life insurance markets and expanding its
banking operations; to expand its presence in Europe; to expand its international banking operations and
strengthen its position as one of the leading providers of Ñnancial services in emerging markets; and to
enhance the Group's performance in its other existing mature markets of North America and Australia
and its existing greenÑeld operations. These strategic objectives were to be realized within the overall
context of enhancing shareholder value through the achievement of stated objectives relating to annual
earnings growth and returns on equity with an increasing emphasis on cost control.
In the nine-year period that the Group has existed as a bancassurance provider, it has reÑned its
overall strategic priorities of maintaining its competitive position and achieving its growth and return on
equity objectives. The Group adheres to the following six strategic objectives:
‚ In Europe, to reinforce its leading position in the Benelux countries, build on the strong positions in
Germany and Poland and further develop activities in other markets to progressively build a strong
pan-European presence as an integrated Ñnancial services provider;
‚ In the Americas and Asia/PaciÑc, to build and expand well-developed platforms for integrated
Ñnancial services in the United States, Canada, Australia and Japan and to build critical mass in
certain product and market segments in other selected countries;
24
‚ To build ING Direct as a leading global brand for direct marketing of Ñnancial services and to
actively create opportunities for e-business, using the Internet;
‚ To become a global client-focused corporate and investment bank, servicing selected customer
segments;
‚ To gain a top ten position in selected asset management market segments in selected countries; and
‚ To achieve greater synergies amongst the Group's business units to become a low-cost provider and
to enhance the quality of the internal organization and client service level.
Financial Objectives
The Group is committed to the following three Ñnancial objectives beginning in 2001:
‚ Operational net return on shareholders' equity of at least 18% (previously at least 12%).
‚ At least 12% (previously at least 10%) organic growth in operational net proÑt per share, which is
consistent with a doubling of operational net proÑt per share within six years.
‚ Higher income growth than expense growth, to be worked out per business unit into lower eÇciency
ratios (banks) and expense ratios (insurers).
Net proÑt per share grew at annual rates of 9.0%, 10.1%, 19.0%, 36.7%, 0.4% and 80.3%, from 1994
up to and including 1999. The objective for the return on equity (consolidated net proÑt, as a percentage
of average consolidated shareholders' equity, on a Dutch GAAP basis) through 1997 amounted in 1994,
1995, 1996 and 1997 (published) to 10.6%, 11.6%, 11.5% and 10.1%, respectively. Starting with the year
1998, the Group raised the objective for the return on equity to 12%. The actual return on equity, based
on operational results, amounted to 8.3% and 10.3% for 1998 and 1999, respectively. The return on equity
was below the target of 12%, mainly due to a large solvency surplus of the insurance operations as a result
of the strong performance of the equity portfolio in previous years. In interpreting the return on equity
ratios, you should note that in the Consolidated Financial Statements prepared in accordance with Dutch
GAAP, certain material changes in shareholders' equity are not reÖected in the proÑt and loss account.
See ""Presentation of Financial Information'' above. There can be no assurance that the Group will
continue to meet or exceed its Ñnancial objectives. In addition to measuring ING's Ñnancial performance
on the basis of the objectives described above, the Group utilizes its net proÑt and return on equity targets
when considering investments such as acquisitions and the establishment of greenÑeld operations. Although
management believes that the Group should apply such criteria when considering such investments,
management also believes that competitive considerations and long-term goals, including long-term
proÑtability, are also important considerations.
The Group's legal (as well as Ñnancial and tax reporting) structure is distinct from its management
structure. While for regulatory, Ñnancial reporting and tax purposes the Group functions on a legal entity
basis, in order to better integrate the various Ñnancial products and services that the Group provides, the
Group established four Executive Centers Ì ING Nederland, ING Financial Services International, ING
Corporate & Investment Banking and ING Asset Management Ì under the Executive Board of ING
Group. Following the acquisition of BBL in January 1998, the Group added a Ñfth Executive Center Ì
ING Belgi e/Belgique Ì to the existing four Executive Centers. In order to foster co-operation and
synergy, as of January 1, 2000, ING has adjusted its management structure in such a way that all
European business units are combined within one Executive Center with their activities grouped by client
segments as well as by geographical region. In addition, the insurance operations in the Americas have also
been brought together within one Executive Center, as have the operations in the Asia/PaciÑc region.
Asset management and corporate & investment banking are global business lines and will remain within
global Executive Centers. An Executive Committee heads each Executive Center, most members of which
are either members of the Executive Board or chief general managers of business units belonging to that
Executive center. See ""Ì Recent Developments Ì Review of Investment Banking Activities''.
The Internet is fundamentally transforming the Ñnancial services landscape, enabling the Group to
provide more convenience for its customers. To this end, the Group has established the e-Business Center,
25
reporting directly to the Executive Board, to actively promote, co-ordinate and facilitate e-business
initiatives and synergy. The Group will continue to capitalize upon the multi-channel strategy for
distribution and to pursue new business opportunities that add value for its customers.
The Executive Board (supported by corporate staÅ departments responsible for strategy,
communications, Ñnance, risk control, controlling, actuarial, accounting, tax, legal aÅairs and compliance)
determines the Group's corporate strategy, prescribes solvency ratios and reserving levels, allocates
resources, sets Ñnancial performance targets and risk proÑles for the management centers, appoints senior
management, manages the Group's corporate image, establishes information technology strategy and
monitors the realization of the objectives established for the Group. The Supervisory Board must approve
certain actions of the Executive Board, including the issuance or cancellation of shares, major acquisitions,
the declaration of interim dividends, major capital expenditures and matters concerning substantial changes
in employee relations. The Executive Committees formulate the strategic, commercial and Ñnancial policy
for the management centers in conformity with the strategy and performance targets set by the Executive
Board. Each Executive Committee is responsible for the preparation of the annual budget of its
management center. The Executive Board also approves and monitors this budget. Each Executive
Committee also approves the strategy, commercial policy and the annual budgets of the business units in
its Executive Center and monitors the realization of the policies and budgets of that Executive Center and
its business units.
Enforcement of Civil Liabilities Against Foreign Persons
The Guarantor is incorporated under the laws of the Netherlands, and all of the members of its
Supervisory Board and Executive Board and some of the experts named in this prospectus are persons who
are not residents of the United States. Most of the assets of the Group and those non-resident persons are
located outside the United States. As a result, you may not be able to serve process on those persons
within the United States or to enforce judgments against them in United States courts.
Investors also may not be able to enforce judgments of United States courts under the U.S. federal
securities laws in courts outside the United States, including the Netherlands. De Brauw Blackstone
Westbroek N.V., Dutch legal counsel for the Group, has advised the Group that the United States and the
Netherlands do not currently have a treaty providing for the reciprocal recognition and enforcement of
judgments (other than arbitration awards) in civil and commercial matters. Therefore, investors would not
be able to enforce in the Netherlands a Ñnal judgment for the payment of money rendered by any U.S.
federal or state court based on civil liability, even if the judgment is not based only on the U.S. federal
securities laws. However, if a claimant brings a new suit in a competent court in the Netherlands, the
claimant may submit to the Dutch court the Ñnal judgment that the United States court has rendered. If
the Dutch court Ñnds that the U.S. federal or state court based its jurisdiction on grounds that are
internationally acceptable and that the United States court observed proper legal procedures, the Dutch
court would, in principle, give binding eÅect to the Ñnal judgment rendered in the United States unless the
judgment contravenes Dutch public policy.
Recent Developments
Review of Investment Banking Activities
On November 19, 2000, ING announced that accelerating consolidation in the investment banking
market combined with a rapid increase in remuneration in the industry are prompting ING to reassess the
scope, breadth and organization of its investment banking activities. Given its current limited market
positions in investment banking in the United States, ING is reviewing, and has engaged Goldman, Sachs
& Co. to assist it in exploring, the options for its investment banking activities in the U.S. market. ING
also stated that the European activities of ING Barings will be integrated into the ING Europe
management center, and that ING's emerging markets franchise in Asia, Central Europe and Latin
America will be continued.
26
This review process will result in a signiÑcant restructuring of ING's current investment banking
activities. ING does not believe that any transactions arising out of the review process will have a material
impact on the Group's Ñnancial position or operational net proÑt, although it is possible that any related
costs or charges could impact the Group's net non-operational proÑt in a particular quarterly period.
Accordingly, there can be no assurances as to the nature, scope or timing of any such restructuring, or of
any costs or charges that might be incurred in connection therewith, or as to the impact thereof on the
ratings of ING Group or the trust preferred securities.
On December 4, 2000, ING announced the resignation of David Robins, a member of the ING
Group Executive Board and Chairman and Chief Executive OÇcer of ING Barings, and Malcolm
Le May, Deputy Chief Executive and global head of Corporate & Institutional Finance in ING Barings.
Transitional leadership for ING Corporate & Investment Banking will be provided by Michel Tilmant,
Vice-Chairman of the ING Group Executive Board, and Hessel Lindenbergh, member of the ING Group
Executive Board.
Aetna Acquisition
On July 20, 2000, the Group announced that it had entered into a deÑnitive agreement with Aetna
Inc. to acquire Aetna Financial Services and Aetna International. Aetna Healthcare and Aetna's large case
pensions businesses are not part of this transaction. The total value of the transaction is $7.7 billion. This
Ñgure includes $2.7 billion of outstanding debt that will be assumed by ING. The transaction is expected
to close by mid-December 2000.
ReliaStar Acquisition
On September 1, 2000, the Group announced that it had completed its acquisition of ReliaStar
Financial Corp., a leading U.S. life insurer and provider of integrated Ñnancial services. With this
acquisition, the Group advances its stated strategy of substantially expanding its presence in the U.S. The
Group paid $54 per share for ReliaStar. The transaction had a total value of approximately $6.1 billion.
Financing of Acquisitions
To Ñnance the acquisitions of ReliaStar, Aetna Financial Services and Aetna International, ING sold
equity investments totaling approximately EUR 8.4 billion. The net proÑt from these sales amounted to
EUR 6.5 billion and is accounted for as non-operational, non-distributable proÑt.
Results for the First Nine Months of 2000
On November 19, 2000, the Group announced its results for the Ñrst nine months of 2000. Compared
with the Ñrst nine months of 1999, the operational result before taxation of the Group increased by 37.1%
to EUR 4,461 million. The operational result before taxation from the Group's insurance operations in the
Ñrst nine months of 2000 rose by 32.1% to EUR 2,328 million. The operational result before taxation from
the Group's banking operations in the Ñrst nine months of 2000 rose by 43.1% to EUR 2,133 million.
The operational tax burden increased from 23.6% for the Ñrst nine months of 1999 to 29.2% for the
Ñrst nine months of 2000.
In the Ñrst nine months of 2000, operational net proÑt increased by 26.2% to EUR 3,047 million
compared with the Ñrst nine months of 1999. Net proÑt including non-operational items increased by
162.9% to EUR 10,798 million. Distributable net proÑt (including EUR 834 million from the sale of the
participation in CCF) amounted to EUR 3,940 million compared with EUR 2,723 million for the Ñrst
nine months of 1999.
Operational net proÑt from banking operations rose by 38.9% to EUR 1,357 million. We attribute this
largely to the strong increase in commission income and improved results from Ñnancial transactions on
the one hand, and a decrease of 37.5% in the addition to the provision for loan losses to EUR 300 million,
on the other. Total net proÑt from the banking operations increased by 78.5% to EUR 2,567 million.
27
Operational net proÑt from insurance operations rose by 17.5% to EUR 1,690 million, which we
attribute to strong performance by all major activities (Life, Non-life and General). The Group included
in the operational result net realized operational capital gains amounting to EUR 455 million, compared
with EUR 412 million for the Ñrst nine months of 1999. Total net proÑts from insurance operations
increased by 208.3% to EUR 8,231 million.
Currency exchange rates increased net proÑt by EUR 54 million (insurance operations Ì
EUR 43 million, banking operations Ì EUR 11 million), primarily as a result of the appreciation of the
U.S. dollar versus the euro.
Compared with the end of 1999, total assets rose by 24.3% to EUR 612.5 billion. Growth in bank
lending in particular contributed to this increase. Shareholders' equity decreased by EUR 3 billion (8.5%)
to EUR 31.6 billion. Retained operational net proÑt of EUR 3.0 billion did not outweigh the write-oÅ of
goodwill of EUR (4.7) billion, which includes a preliminary amount of EUR 3.8 billion with respect to
ReliaStar. Shareholders' equity per share decreased by 8.6% from EUR 35.81 at the end of 1999 to
EUR 32.73 at the end of September 2000.
The operational net return on equity of ING Group rose from 10.3% for the full year 1999 to 12.0%
(on an annual basis) for the Ñrst nine months of 2000. The return on equity from the insurance operations
was 9.1%, as compared to 8.5% in 1999, and from the banking operations was 12.9%, as compared to
11.4% in 1999.
Compared with the end of 1999, assets under management rose by 20.9% to EUR 417.5 billion.
Assets managed for third parties rose by 23.0% to EUR 292.0 billion, of which the volume of mutual
funds under management increased by 35.9% to EUR 156.5 billion.
The operational net proÑt per ordinary share for the Ñrst nine months of 2000 was EUR 3.18, an
increase of 26.6% compared with the operational net proÑt per ordinary share for the Ñrst nine months of
1999 (EUR 2.51). The net proÑt per ordinary share for the Ñrst nine months of 2000 was EUR 11.32, an
increase of 164.5% compared with the net proÑt per ordinary share for the Ñrst nine months of 1999
(EUR 4.28).
Executive Board Appointments
On May 2, 2000, the Supervisory Board made the following appointments to the Executive Board of
ING Group:
The Supervisory Board appointed Ewald Kist Chairman of the Executive Board of the Group. He
succeeded Godfried van der Lugt, who retired on June 1, 2000, as planned. Ewald Kist was previously
Vice-Chairman of the Executive Board of the Group, Chairman of the Executive Committee ING
Nederland and Chairman of the statutory general management of ING Verzekeringen (Insurance) N.V.
The Supervisory Board of ING Group intends to appoint Godfried van der Lugt as a member of the
Supervisory Board after the next annual meeting of shareholders.
The Supervisory Board appointed Michel Tilmant to succeed Ewald Kist as Vice-Chairman of the
Executive Board of the Group. In addition, Michel Tilmant took over the chairmanship of the statutory
general management of ING Bank N.V. from Godfried van der Lugt as of January 1, 2000.
The Supervisory Board appointed Fred Hubbell as a member of the Executive Board of the Group as
of May 2, 2000, the date of the General Meeting of Shareholders of the Group. Fred Hubbell became the
Chairman of the Executive Committee ING Financial Services International as of October 1, 1999. He
now serves as a member of this Executive Committee.
28
ING CAPITAL FUNDING TRUST III
ING Trust III is a statutory business trust that ING LLC III and The Bank of New York
(Delaware) formed under the Delaware Business Trust Act, as amended. ING LLC III and The Bank of
New York (Delaware) formed ING Trust III on October 23, 2000 by executing a trust agreement and by
Ñling a certiÑcate of trust with the Secretary of State of the State of Delaware. We will amend and restate
the trust agreement in its entirety. We refer to the amended and restated trust agreement as the
Declaration, a form of which we Ñled as an exhibit to the Registration Statement of which this prospectus
is a part. We will qualify the Declaration as an indenture under the Trust Indenture Act of 1939, as
amended. Upon the completion of this oÅering, ING LLC III will hold all of the trust common securities,
which will have an aggregate liquidation amount equal to $1,000, and the purchasers of the trust preferred
securities pursuant to this oÅering will own all the trust preferred securities. See ""Description of the Trust
Securities.'' ING Trust III will use all the proceeds derived from the issuance of the trust preferred
securities and the trust common securities to purchase the company preferred securities from ING
LLC III. The company preferred securities and the Guarantor's subordinated guarantee of the company
preferred securities will be the only assets of ING Trust III.
ING Trust III exists solely to:
‚ issue the trust securities;
‚ invest the gross proceeds of the trust securities in the company preferred securities; and
‚ engage in any related or incidental activities.
The Declaration does not permit ING Trust III to acquire any assets other than the company
preferred securities and the Guarantor's subordinated guarantee of those securities, to issue any securities
other than the trust securities or to incur any indebtedness. The total pro forma capitalization of ING
Trust III in accordance with Dutch GAAP, as adjusted to give eÅect to this oÅering (based on expected
proceeds of $1,500,000,000 before deduction of expenses) and the use of the proceeds from this oÅering, is
$1,500,001,000. Upon consummation of the oÅering, the authorized and issued capital of ING Trust III
will consist of one trust common security, liquidation amount $1,000 per trust common security, and
1,500,000 trust preferred securities, liquidation amount $1,000 per trust preferred security. ING Trust III
will have no outstanding debt after giving eÅect to this oÅering and the use of the proceeds from this
oÅering.
Under the Declaration, ING Trust III will initially have Ñve trustees. Three of the trustees, the
regular trustees, will be employees or oÇcers of, or aÇliated with, the Guarantor. The fourth trustee, the
property trustee, will be a Ñnancial institution that is unaÇliated with the Guarantor. The property trustee
will act as indenture trustee for purposes of compliance with the provisions of the Trust Indenture Act.
The Ñfth trustee, the Delaware trustee, will be an entity that maintains its principal place of business in
the State of Delaware. The Bank of New York will act as property trustee, and The Bank of New York
(Delaware), a Delaware corporation, will act as Delaware trustee, until the holder of the trust common
securities removes or replaces them. The Bank of New York will also act as the guarantee trustee, the
trustee under the subordinated guarantees and the contingent guarantee. The holder of a majority of the
trust common securities, initially ING LLC III, will have the right to appoint, remove or replace any of
the trustees and to increase or decrease the number of trustees, so long as at least one trustee is the
Delaware trustee, at least one trustee is the property trustee and at least one trustee is a regular trustee.
The property trustee will hold title to the company preferred securities for the beneÑt of the holders
of the trust securities, and the property trustee will have the power to exercise all rights, powers and
privileges relating to the company preferred securities as the holder of the company preferred securities.
The property trustee will also maintain exclusive control of an account to hold all payments received in
respect of the company preferred securities for the beneÑt of the holders of the trust securities. The
guarantee trustee will hold the subordinated guarantees for the beneÑt of the holders of the trust securities
and the company preferred securities and the contingent guarantee for the beneÑt of the ING LLC III.
29
The Guarantor and ING LLC III will agree that, as long as the trust preferred securities remain
outstanding:
‚ ING LLC III or the Guarantor or one or more of its subsidiaries, the qualiÑed subsidiaries, that
are ""compan®ies© controlled by the parent company'' within the meaning of Rule 3a-5, as
amended, under the Investment Company Act, will hold 100% of the trust common securities;
‚ the Guarantor and ING LLC III will cause ING Trust III to remain a statutory business trust and
not to voluntarily dissolve, wind up, liquidate or be terminated, except as permitted by the
Declaration; and
‚ the Guarantor and ING LLC III will use their commercially reasonable eÅorts to ensure that
United States federal income tax law will not classify ING Trust III as other than a grantor trust.
The rights of the holders of the trust preferred securities, including economic rights, rights to
information and voting rights, are as set forth in the Declaration and the Delaware Business Trust Act. See
""Description of the Trust Securities.'' The Declaration and the subordinated guarantees also incorporate by
reference the terms of the Trust Indenture Act.
ING (U.S.) Financial Services, Inc., a U.S. subsidiary of the Guarantor which we refer to as ING
Financial Services, ING Trust III and ING LLC III will enter into a services agreement under which
ING Financial Services will manage the day-to-day activities of ING Trust III and ING LLC III by,
among other things, providing legal, accounting, tax and other general support services to ING Trust III
and ING LLC III, causing ING Trust III and ING LLC III to comply with all applicable U.S. and
Dutch local, state and federal laws, and providing administrative, record-keeping and secretarial services
for ING LLC III and ING Trust III. Under the services agreement, ING Financial Services will pay all
operating expenses of ING LLC III and ING Trust III, including any taxes, duties, assessments or
governmental charges of any nature (other than withholding taxes) imposed by the United States or any
other domestic taxing authority upon ING LLC III or ING Trust III, the fees and expenses of the
trustees of ING Trust III and all other obligations of ING LLC III and ING Trust III, except their
obligations with respect to the trust securities or the company securities.
The principal executive oÇces of ING Trust III are located at c/o ING (U.S.) Financial Services,
Inc., 55 East 52nd Street, Park Avenue Plaza, New York, New York 10055, and its telephone number is
212-409-1000.
30
ING CAPITAL FUNDING III LLC
The Company is a limited liability company that the Guarantor formed under the Delaware Limited
Liability Company Act, as amended, on October 2, 2000 pursuant to an initial limited liability company
agreement and by Ñling of a certiÑcate of formation with the Secretary of State of the State of Delaware.
We will amend and restate the initial limited liability company agreement in its entirety substantially in
the form of the LLC Agreement that we Ñled as an exhibit to the registration statement of which this
prospectus is a part. Upon the completion of this oÅering, the Guarantor will hold all of the company
common securities and the property trustee, for the beneÑt of ING Trust III, will hold all of the company
preferred securities. ING LLC III will use all the proceeds derived from the issuance of the company
preferred securities and the company common securities to purchase the initial subordinated notes from
the Guarantor. The subordinated notes, the trust common securities and ING LLC III's rights under the
contingent guarantee will be the only assets of ING LLC III.
ING LLC III exists solely to:
‚ issue the company securities;
‚ invest the proceeds of the company securities in the initial subordinated notes;
‚ reinvest the proceeds from the initial subordinated notes from time to time in other subordinated
securities of the Guarantor or a subsidiary of the Guarantor, so long as any such reinvestment will
not result in ING LLC III being required to register as an investment company under the
Investment Company Act or cause any withholding taxes to be imposed by the United States or
any taxing authority thereof or therein with respect to payments by ING LLC III or ING
Trust III;
‚ enter into and enforce the contingent guarantee for the beneÑt of the holders of the company
preferred securities; and
‚ engage in any related or incidental activities.
The total pro forma capitalization of ING LLC III in accordance with Dutch GAAP, as adjusted to
give eÅect to this oÅering, which we base on expected proceeds of $1,500,000,000 before we deduct for
expenses, and our use of the proceeds from this oÅering, is $1,500,002,000. Upon consummation of the
oÅering, the authorized and issued capital of ING LLC III will consist of one company common security
and 1,500,001 company preferred securities, liquidation amount $1,000 per company preferred security.
ING LLC III will have no outstanding debt after giving eÅect to this oÅering and the use of the proceeds
from this oÅering. The LLC Agreement does not permit ING LLC III to issue any securities, other than
the company securities.
The Guarantor has agreed that, as long as the company preferred securities remain outstanding:
‚ the Guarantor or one or more qualiÑed subsidiaries will hold 100% of the company common
securities;
‚ the Guarantor will cause ING LLC III to remain a limited liability company and, to the full extent
that the law permits, not to voluntarily dissolve, liquidate, wind up or terminate, except as the LLC
Agreement permits; and
‚ the Guarantor will use its commercially reasonable eÅorts to ensure that ING LLC III will not be
an association or a publicly traded partnership taxable as a corporation for United States federal
income tax purposes.
31
The Guarantor may transfer the company common securities to a qualiÑed subsidiary and a qualiÑed
subsidiary may transfer the company common securities to the Guarantor or to another qualiÑed subsidiary
if it receives an opinion of a nationally recognized U.S. law Ñrm experienced in these matters to the eÅect
that:
‚ ING LLC III will continue to be treated as a partnership for United States federal income tax
purposes, and the transfer will not cause ING LLC III to be classiÑed as an association or publicly
traded partnership taxable as a corporation for United States federal income tax purposes;
‚ the transfer will not cause ING LLC III or ING Trust III to be required to register as an
investment company under the Investment Company Act; and
‚ the transfer will not adversely aÅect the limited liability of the holders of the company preferred
securities.
The rights of the holders of the company preferred securities, including economic rights, rights to
information and voting rights, are set forth in the LLC Agreement and the LLC Act. See ""Description of
the Company Securities Ì Company Preferred Securities''.
The board of directors, which will consist initially of four members, will conduct ING LLC III's
business and aÅairs. If, for any two consecutive Dividend Periods or any three Dividend Periods through
December 31, 2010, or for four consecutive Dividend Periods or any six Dividend Periods thereafter,
neither ING LLC III nor the Guarantor have paid dividends in full, whether declared or deemed to have
been declared, on the company preferred securities, the holder(s) of the company preferred securities, who
is initially the property trustee, acting on behalf of ING Trust III, will have the right to appoint two
independent members of the board of directors. In addition, if the Guarantor does not pay a claim under
the subordinated guarantees within ten days after the guarantee trustee or a holder of trust preferred
securities makes a claim, the holder(s) of the company preferred securities will have the right to elect a
single independent director of ING LLC III. We are calling that independent director the guarantee
independent director. The guarantee independent director will enforce the claim of ING LLC III under
the contingent guarantee for the beneÑt of the holders of the company preferred securities if the Guarantor
does not pay the claim under the subordinated guarantee for 180 days. ING LLC III will then distribute
the amounts paid by the Guarantor under the contingent guarantee to the holders of the company
preferred securities. Any independent director appointed as we provide above must vacate oÇce when
ING LLC III, or the Guarantor under the subordinated guarantees, pays all dividends regularly in full on
the company preferred securities for one calendar year and all other amounts due under the subordinated
guarantees or the contingent guarantees have been paid.
The LLC Agreement will provide that as long as any company preferred securities are outstanding,
certain amendments of the LLC Agreement, including any provisions with respect to the guarantee
independent director, enforcement of the contingent guarantee, the treatment of payments received by
ING LLC III under the contingent guarantee and the dividends, require the unanimous approval of all of
the holders of the company preferred securities.
All oÇcers and employees of ING LLC III may also be oÇcers or employees of one or more
aÇliates of the Guarantor.
ING LLC III and ING Trust III will enter into the services agreement with ING Financial Services
as described above under ""ING Capital Funding Trust III'' and below under ""Transactions Constituting
the Formation''.
The principal executive oÇces of ING LLC III are located at c/o ING (U.S.) Financial Services,
Inc., 55 East 52nd Street, Park Avenue Plaza, New York, New York 10055, and its telephone number is
212-409-1000.
32
RATIOS OF EARNINGS TO FIXED CHARGES AND
PREFERRED STOCK DIVIDEND REQUIREMENTS
The following table sets forth the Guarantor's ratios of earnings to Ñxed charges and ratios of earnings
to combined Ñxed charges and preferred stock dividend requirements for the periods indicated:
Earnings to Fixed Charges:
Including Interest on DepositsÏÏÏÏÏÏÏÏÏÏÏ
Earnings to Combined Fixed Charges and
Preferred Stock Dividend:
Including Interest on DepositsÏÏÏÏÏÏÏÏÏÏÏ
1995
Year Ended December 31,
1996
1997
1998
1999
Six Months
Ended
June 30,
1999
2000
1.29
1.33
1.39
1.25
1.45
1.61
1.71
1.29
1.32
1.39
1.25
1.45
1.61
1.70
33
USE OF PROCEEDS
ING Trust III will use the net proceeds of approximately $1,500,001,000 from the sale of the trust
preferred securities and the trust common securities to purchase the company preferred securities from
ING LLC III. ING LLC III will use the proceeds from the sale of the company preferred securities and
the company common securities to purchase the initial subordinated notes from the Guarantor and the
trust common securities from ING Trust III. The Guarantor will use the proceeds from the sale of the
initial subordinated notes in its banking operations.
CAPITALIZATION
The following table sets forth the capitalization of the Group in accordance with Dutch GAAP on
June 30, 2000, both actual and as adjusted to give eÅect to this oÅering (based upon expected proceeds of
this oÅering of $1.5 billion) and the use of the proceeds from this oÅering. See ""Summary Selected
Financial Data''. Please see ""Presentation of Financial Information'' above for a discussion of important
considerations relating to the presentation of this Ñnancial data. Since June 30, 2000 Shareholder's equity
decreased EUR 2.6 billion reÖecting, in part, the write-oÅ of goodwill in connection with the acquisition of
ReliaStar. See ""ING Groep N.V. Ì Recent Developments Ì Results for the Ñrst nine months of 2000''.
There has not been a material adverse change in the indebtedness of the Group since June 30, 2000.
At June 30, 2000
Actual
EUR
USD(1)
(in millions)
As Adjusted
EUR
USD(1)
(in millions)
Short-term debt(2) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Long-term debt(2) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Subordinated loansÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Minority interests ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Preference shares of Group companies ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Shareholders' equity
Preference shares (nominal value NLG 2.50;
authorized 300,000,000; issued 87,080,450)(3)(4) ÏÏ
Ordinary shares (nominal value NLG 1.00; authorized
1,500,000,000; issued 977,474,748)(4) ÏÏÏÏÏÏÏÏÏÏÏÏ
Other surplus reserves ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
321,365
68,890
485
1,072
783
275,410
59,039
416
919
671
321,365
68,890
485
1,072
2,533
275,410
59,039
416
919
2,171
99
85
99
85
444
33,671
381
28,856
444
33,671
381
28,856
Total shareholders' equity ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Total capitalization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
34,214
105,444
29,322
90,367
34,214
107,194
29,322
91,867
(1) For your convenience, we have translated euro amounts into U.S. dollars at the Noon Buying Rate on
November 15, 2000 at the exchange rate of $0.8570 to EUR 1.00.
(2) Short-term debt and long-term debt include savings accounts, time deposits and other customer credit
balances, certiÑcates of deposit, debentures and other non-subordinated debt securities, securities sold
subject to repurchase agreements, non-subordinated interbank debt, and other borrowings.
(3) ING Groep N.V. also has authorized 900,000,000 Cumulative Preference Shares (nominal value
NLG 2.50) of which there were none outstanding as of June 30, 2000.
(4) As of October 17, 2000, the nominal value of the Preference Shares, Cumulative Preference Shares
and the Ordinary Shares has been changed into EUR 1.20, EUR 1.20 and EUR 0.48, respectively.
34
TRANSACTIONS CONSTITUTING THE FORMATION
The Formation
The oÅering will consist of the following series of transactions, which will occur substantially
simultaneously.
‚ ING Trust III will issue the trust common securities to ING LLC III. ING Trust III will publicly
oÅer the trust preferred securities to investors. ING Trust III will use the proceeds from the
oÅering and sale of the trust securities to purchase all of the company preferred securities from
ING LLC III.
‚ ING LLC III will issue all of the company common securities to the Guarantor. ING LLC III
will use the proceeds from the issuance of the company securities to purchase the initial
subordinated notes from the Guarantor. The Guarantor will use the proceeds from the issuance of
the initial subordinated notes in its banking operations.
‚ The Guarantor will issue the subordinated guarantees and the contingent guarantee.
‚ The Guarantor, as the holder of 100% of the issued and outstanding company common securities,
will elect the initial members of the board of directors of ING LLC III, which will consist of at
least four directors. ING Financial Services will enter into the services agreement with ING
LLC III and ING Trust III.
BeneÑts to the Guarantor
In connection with the oÅering, the Guarantor will receive $1,500,000,000 at the consummation of the
oÅering resulting indirectly from the sale of the trust preferred securities, which the Guarantor intends to
use in its banking operations.
35
DESCRIPTION OF THE TRUST SECURITIES
ING Trust III will issue the trust securities under the terms of the Declaration. We will qualify the
Declaration as an indenture under the Trust Indenture Act. The property trustee will act as trustee for the
trust preferred securities under the Declaration for purposes of compliance with the provisions of the Trust
Indenture Act. The terms of the trust securities will include both those stated in the Declaration and the
Delaware Business Trust Act and those made part of the Declaration by the Trust Indenture Act. The
following summary of the material terms and provisions of the trust securities does not purport to be
complete and is subject to, and qualiÑed in its entirety by reference to, the Declaration, the Delaware
Business Trust Act and the Trust Indenture Act. We have Ñled a copy of the Declaration as an exhibit to
the Registration Statement of which this prospectus is a part.
General
ING Trust III will issue the trust securities only in fully registered form without coupons. Initially,
ING Trust III will issue all of the trust preferred securities to a nominee of DTC, acting as securities
depositary, and the trust preferred securities will be held by investors in book-entry form. See ""Ì BookEntry Only Issuance.'' The trust common securities will initially be issued in deÑnitive registered form to
ING LLC III.
The Declaration authorizes the regular trustees of ING Trust III to issue the trust securities, which
represent ownership interests in the assets of ING Trust III. The property trustee will hold the company
preferred securities for the beneÑt of the holders of the trust securities. The Guarantor will guarantee the
payment of distributions and payments upon redemption of the trust preferred securities or liquidation of
ING Trust III to the extent described under ""Description of the Guarantees Ì The Subordinated
Guarantees'' below. The guarantee trustee will hold the subordinated guarantee of the trust securities for
the beneÑt of the holders of the trust securities.
When issued by ING Trust III, the trust preferred securities will be validly issued, fully paid and
non-assessable. The trust preferred securities will not be convertible into any other securities issued by
ING Trust III and will not be subject to any sinking fund or other obligation of ING Trust III for their
repurchase or retirement.
Distributions
ING Trust III will make distributions on the trust securities on the same date that it receives the
corresponding dividends on the company preferred securities or the corresponding payments with respect to
dividends under the subordinated guarantee of the company preferred securities. Accordingly, ING
Trust III will make distributions on the trust securities semi-annually in arrears on the Dividend Dates for
the company preferred securities until December 31, 2010, and quarterly in arrears on the Dividend Dates
thereafter, if it receives dividends on the company preferred securities on those Dividend Dates or
payments from the Guarantor under the subordinated guarantee of the company preferred securities. The
Dividend Dates will be the last day of June and December of each year, commencing June 30, 2001,
through December 31, 2010, and thereafter will be the last day of March, June, September and December
of each year. The Ñrst payment period will begin on the date of original issuance of the trust securities and
terminate on June 29, 2001. Each subsequent payment period will begin on a Dividend Date and end on
the day that precedes the next Dividend Date. Dividends on the company preferred securities received by
ING Trust III after 10:00 a.m., New York time, on a Business Day will be deemed to have been received
on the next Business Day. ING Trust III will also distribute any payments that it receives from ING
LLC III when ING LLC III distributes the proceeds of any payment it receives from the Guarantor
under the contingent guarantee. Whenever ING Trust III receives a payment from ING LLC III or the
Guarantor, ING Trust III will distribute those amounts to the holders of the trust securities in proportion
to the number of trust securities held by them, except to the extent that the trust common securities are
subordinated as described under ""Ì Subordination of Trust Common Securities'' below.
36
Prior to December 31, 2010, if ING LLC III pays full semi-annual dividends on the company
preferred securities, ING Trust III will make distributions at a rate per annum of 8.439% of the
liquidation preference of $1,000 per trust security, which is equivalent to $84.39 per annum per trust
security. The amount of distributions that will be payable for each full semi-annual period will be
computed by dividing the rate per annum by two. For the Ñrst payment period, if ING Trust III receives a
corresponding payment from ING LLC III or the Guarantor, the amount of distributions that will be
payable on the trust securities will accrue from the date of original issuance of the trust preferred
securities through June 29, 2001 and will be payable on June 30, 2001. After December 31, 2010, if ING
LLC III pays full quarterly dividends on the company preferred securities, ING Trust III will make
distributions at a Öoating rate of 3.60% per annum above three-month LIBOR for U.S. dollars for the
relevant distribution period. For these purposes, ""three-month LIBOR'' has the meaning set forth under
""Description of the Company Securities Ì Company Preferred Securities Ì Dividends''. All percentages
resulting from any calculations on the trust preferred securities will be rounded, if necessary, to the nearest
one hundred-thousandth of a percentage point, with Ñve one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and all dollar
amounts used in or resulting from such calculation will be rounded to the nearest cent (with one-half cent
being rounded upward).
If at any time on or prior to December 31, 2010 ING Trust III must pay distributions for less than a
full dividend period, the distributions for that dividend period will be computed on the number of days
elapsed on the basis of a 360-day year of twelve 30-day months. After December 31, 2010, Distributions
will be computed on the basis of the actual number of days elapsed divided by 360. These distributions
will not be cumulative, and if ING Trust III does not make a distribution in any dividend period, it will
have no obligation to make up the missed distribution in any future dividend period.
ING Trust III's only sources of funds will be the payments received by ING Trust III from
ING LLC III under the company preferred securities or from the Guarantor under the subordinated
guarantee of the company preferred securities. ING LLC III will pay dividends on the company preferred
securities if, as and when declared by the board of directors. See ""Description of the Company
Securities Ì Company Preferred Securities Ì Dividends.'' If ING Trust III does not make a full
distribution on the trust securities for any period, the regular trustees will give notice of nonpayment in the
manner indicated under "" Ì Notices'' below.
Distributions will be made through the property trustee, who will hold all amounts received in respect of
the company preferred securities in the property account for the benefit of the holders of the trust securities.
As long as the trust preferred securities are in book-entry form, ING Trust III will make distributions on the
trust preferred securities to DTC, which will credit the relevant accounts on the payment date. If the trust
preferred securities are no longer held in book-entry form, ING Trust III will make distributions directly to
the holders of the trust preferred securities listed in ING Trust III's records on the fifteenth day of the
month of the relevant payment date. Subject to any applicable laws and regulations, all payments will be
made as described under ""Ì Book-Entry Only Issuance'' and ""Ì Payments'' below.
If any distribution would be payable on a day that is not a Business Day, that distribution will instead
be paid on the next Business Day, except that if that Business Day falls in the next calendar month, that
distribution will be paid on the preceding Business Day. No interest or other payment will be due as a
result of any such delay. A ""Business Day'' means any day on which commercial and foreign exchange
markets settle payments in London, Amsterdam, Luxembourg and New York City.
Payment of Additional Amounts
ING Trust III will make all payments under the trust securities without withholding or deducting for
any present or future taxes, duties, assessments or governmental charges imposed or levied by the
Netherlands or the jurisdiction of residence of the issuer of any subordinated notes held by ING LLC III
or any authority of any of those jurisdictions that has the power to tax. However, if ING Trust III is
required by law to withhold or deduct for present or future taxes, duties, assessments or governmental
charges, ING Trust III will agree to pay such additional amounts as may be necessary to cause the net
37
amounts received by the holders of the trust securities, after the withholding or deduction, to be the same
as the holders would have received if there had been no withholding or deduction. However, ING Trust
III will not be required to pay additional amounts to a holder of trust securities (or to a third party on the
holder's behalf) if the jurisdiction of residence of the issuer of any subordinated notes held by ING LLC
III is the Netherlands, Belgium, Germany, France or Switzerland:
‚ to the extent that the present or future taxes, duties, assessments or governmental charges are
imposed or levied because that holder (or the beneÑcial owner of those trust securities) has some
connection with that jurisdiction, other than being a holder (or beneÑcial owner) of those trust
securities; or
‚ to the extent that the present or future taxes, duties, assessments or governmental charges are
imposed or levied because that holder, or beneÑcial owner, has not made a declaration of nonresidence in, or other lack of connection with, that jurisdiction or any similar claim for exemption,
if the Guarantor or its agent has given the beneÑcial owner of those trust securities or its nominee
at least 60 days' prior written notice of an opportunity to make the declaration or claim.
All the references that we make in this prospectus to distributions or payments upon redemption of
trust securities or liquidation of ING Trust III include all applicable additional amounts.
Right to Enforce the Company Preferred Securities
The property trustee, as the holder of the company preferred securities, will have the right to exercise
all rights under the company preferred securities for the beneÑt of the holders of the trust securities, and
the holders of the trust securities will have the right to direct the property trustee in carrying out this right
as described under ""Ì Voting Rights'' below.
If the property trustee does not enforce its rights under the company preferred securities after a
holder of trust preferred securities has made a written request, that holder may directly institute a legal
proceeding against ING LLC III to enforce these rights. The holder will not be required to institute any
legal proceeding against the property trustee, ING Trust III or any other entity before instituting a
proceeding against ING LLC III.
Both the Guarantor and ING Trust III are required to Ñle an oÇcer's certiÑcate with the property
trustee each year stating whether it is complying with all its obligations under the Declaration.
Redemption
If ING LLC III redeems any company preferred securities, ING Trust III will simultaneously apply
the proceeds from that redemption to redeem the same number of trust securities. Except as described
under ""Ì Subordination of Trust Common Securities'' below, the price at which the company preferred
securities will be redeemed, the redemption price, will be applied proportionately to the trust preferred
securities and the trust common securities. ING LLC III may redeem the company preferred securities
under the circumstances described under the heading ""Description of the Company Securities Ì
Redemption of Company Preferred Securities.'' ING Trust III will give the holders of the trust securities
30 to 60 days' prior notice of any redemption of trust securities. Any trust securities that are redeemed will
be canceled.
Any redemption notice given by ING Trust III will be irrevocable. If ING Trust III gives a
redemption notice, and if ING LLC III or the Guarantor has paid to the property trustee a suÇcient
amount of cash for that redemption, then, by 9:00 a.m., New York time, on the redemption date, the
property trustee will irrevocably deposit with DTC funds suÇcient to pay the redemption price and give
DTC irrevocable instructions to pay the redemption price to the holders of the trust preferred securities to
be redeemed. See ""Ì Book-Entry Only Issuance'' below. Upon this deposit, all rights of holders of the
trust preferred securities called for redemption will cease, except their right to receive the redemption
price, without interest. If any date Ñxed for redemption of trust preferred securities is not a Business Day,
then the redemption price will instead be paid on the next Business Day, except that if that Business Day
38
falls in the next calendar month, the redemption price will be paid on the preceding Business Day. No
interest or other payment will be due as a result of any such delay.
If only some of the outstanding trust preferred securities are to be redeemed, the trust preferred
securities to be redeemed will be selected in accordance with DTC's procedures. See ""Ì Book-Entry Only
Issuance Ì DTC's Procedures for Notices, Voting and Payments.'' If the trust preferred securities do not
remain in book-entry form and only some of the outstanding trust preferred securities are to be redeemed,
the trust preferred securities will be redeemed proportionately or selected for redemption pursuant to the
rules of any securities exchange on which the trust preferred securities are listed at that time.
If ING Trust III improperly withholds the redemption price of any trust securities and the Guarantor
does not pay the redemption price under the subordinated guarantee of the trust preferred securities,
distributions on those trust securities will continue to accumulate, subject to the limitations described
under ""Ì Distributions,'' until the redemption price is actually paid.
Purchases of Trust Preferred Securities
Subject to applicable law, including United States federal securities laws, the Guarantor or its
subsidiaries may purchase outstanding trust preferred securities at any time by tender, in the open market
or by private agreement. If purchases are made by tender, the tender must be available to all holders of
trust preferred securities.
Dissolution of ING Trust III and Distribution of the Company Preferred Securities
If ING Trust III is liquidated, dissolved, terminated or wound up, whether voluntarily or
involuntarily, then after any creditors of ING Trust III have been paid, the remaining company preferred
securities will be distributed proportionately to the holders of the trust preferred securities and the trust
common securities. The right of the holders of the trust common securities to receive these company
preferred securities will be subordinated in the circumstances described below under ""Ì Subordination of
Trust Common Securities.''
ING Trust III will dissolve:
‚ upon the bankruptcy of the Guarantor;
‚ upon the dissolution of ING LLC III;
‚ after ING Trust III has obtained the consent of at least a majority of the outstanding trust
securities, voting together as a single class;
‚ if a tax is imposed in the United States or the Netherlands on ING Trust III;
‚ following an Investment Company Event with respect to ING Trust III;
‚ upon the entry of a decree of judicial dissolution of ING LLC III or ING Trust III; or
‚ upon the redemption of all of the trust securities.
If a tax is imposed in the United States or the Netherlands on ING Trust III or an Investment
Company Event with respect to ING Trust III occurs, the regular trustees may dissolve ING Trust III at
any time if the event is continuing at that time. If ING Trust III can eliminate such tax or the
Investment Company Event by taking some ministerial action, such as Ñling a form or making an election,
or by taking some other similar reasonable measures that in the sole judgment of ING LLC III has, or
will cause, no adverse eÅect on ING LLC III, ING Trust III, the Group or the holders of the trust
securities and will involve no material costs, the regular trustees must take that action instead of dissolving
ING Trust III. The regular trustees will give 30 to 60 days' prior notice of dissolution to the holders. If
the trust preferred securities remain in book-entry form, the regular trustees will also consult with Morgan
Guaranty Trust Company of New York, as the operator of the Euroclear System, and Clearstream
Banking, societ
π eπ anonyme, Luxembourg 30 to 60 days before the dissolution occurs.
39
If the regular trustees do not dissolve ING Trust III in the circumstances discussed above, the trust
preferred securities will remain outstanding and ING Financial Services will pay all expenses payable by
ING Trust III as a result of the imposition of such tax or the Investment Company Event.
On the date Ñxed for distribution, upon the dissolution of ING Trust III:
‚ the trust securities will no longer be deemed to be outstanding; and
‚ any certiÑcates that previously represented trust securities will instead represent the applicable
number of company preferred securities until those certiÑcates are presented to ING LLC III or its
agent for transfer or reissuance.
If the company preferred securities are distributed to the holders of the trust preferred securities, the
Guarantor will use its commercially reasonable eÅorts to cause the company preferred securities to be
listed on the Luxembourg Stock Exchange or on any other national securities exchange or similar
organization on which the trust preferred securities were listed or quoted before that distribution. See
""Risk Factors Ì We May Redeem the Company Preferred Securities or Dissolve ING Trust III Upon the
Occurrence of SpeciÑed Tax or Investment Company Events'' and ""Risk Factors Ì Because the Trust
Preferred Securities Are a New Issue, There Is No Assurance That a Trading Market Will Exist or That
It Will Be Liquid'' above.
Subordination of Trust Common Securities
Payment of distributions and amounts payable on redemption of the trust securities or dissolution of
ING Trust III will be made proportionately on the trust preferred securities and trust common securities,
based on the liquidation preference of the trust securities, except that if an event of default occurs under
the subordinated notes or the subordinated guarantee of the company preferred securities, the holders of
the trust preferred securities will have a preference over the holders of the trust common securities with
respect to those payments, for as long as the event of default continues.
If no distributions are paid on the trust securities for twelve consecutive months or a total of eighteen
months, or no dividends are paid on the company preferred securities for twelve consecutive months or a
total of eighteen months, or the Guarantor defaults under either of the subordinated guarantees or the
contingent guarantee, the holder of the trust common securities will be deemed to have waived any rights
that it may have with respect to that default until all defaults relating to the trust preferred securities have
been waived or cured. Until all defaults relating to the trust preferred securities have been cured or
waived, the property trustee must act solely on behalf of the holders of the trust preferred securities, and
only the holders of the trust preferred securities will have the right to direct the property trustee with
respect to its eÅorts to cure the default or any other matters under the Declaration.
Voting Rights
The holders of the trust preferred securities will have no voting rights, except as described in this
Section, under ""Description of the Guarantees'', under the Delaware Business Trust Act and the Trust
Indenture Act or as otherwise required by law.
The holders of a majority of the trust preferred securities will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the property trustee under the
Declaration, and to direct the exercise of any trust or power conferred upon the property trustee under the
Declaration. This right will include the right to direct the property trustee, as the holder of the company
preferred securities, to (a) exercise the remedies available to it under the LLC Agreement as the holder of
the company preferred securities, and (b) consent or refuse to consent to any amendment, modiÑcation or
termination of the LLC Agreement or the company preferred securities, where that consent is required or
requested. However, if a consent or action under the LLC Agreement would require the consent of the
holders of more than a majority of the company preferred securities, only the holders of the percentage of
the aggregate number of the trust securities outstanding that is at least equal to the percentage of the
company preferred securities required under the LLC Agreement may direct the property trustee to give
that consent or take that action on behalf of ING Trust III. See ""Description of the Company
40
Securities Ì Company Preferred Securities Ì Voting Rights'' below. However, except with respect to
directing the time, method and place of conducting a proceeding for a remedy as described above, the
property trustee will be under no obligation to take any of the actions described above unless the property
trustee has obtained an opinion of independent tax counsel to the eÅect that as a result of that action,
ING Trust III will not fail to be classiÑed as a grantor trust for United States federal income tax purposes
and that after that action each holder of trust securities will continue to be treated as owning an undivided
beneÑcial ownership interest in the company preferred securities and the subordinated guarantee of the
company preferred securities.
If the holders of the trust preferred securities are required to give any approval or direction, they may
do so at a separate meeting of trust preferred securities holders convened for that purpose, at a meeting of
all of the holders of trust securities, or pursuant to a written consent. The regular trustees will give notice
of any meeting at which holders of trust preferred securities are entitled to vote, or of any matter upon
which action by written consent of those holders is to be taken, by mail to each holder of record of trust
preferred securities and as described under ""General Information Ì Notices'' below. Each notice will
provide the following information:
‚ the date of the meeting or the date by which the action is to be taken;
‚ a description of any resolution proposed for adoption at that meeting on which those holders are
entitled to vote or for which written consent is sought; and
‚ instructions for the delivery of proxies or consents.
No vote or consent of the holders of trust preferred securities will be required for ING Trust III to
redeem and cancel trust preferred securities or distribute company preferred securities in accordance with
the Declaration.
The procedures by which holders of trust preferred securities represented by the global certiÑcates
may exercise their voting rights are described below under ""Ì Book-Entry Only Issuance Ì DTC's
Procedures for Notices, Voting and Payments.''
Even if holders of trust preferred securities are entitled to vote or consent under any of the
circumstances described above, any of the trust preferred securities that are beneÑcially owned at that time
by the Guarantor or any of its subsidiaries or aÇliates will not be entitled to vote or consent and will be
treated, for this purpose, as if their trust preferred securities were not outstanding, except for trust
preferred securities purchased or acquired by the Guarantor or its aÇliates in transactions eÅected by or
for the account of customers of the Guarantor or any of its aÇliates or in connection with the distribution
or trading of or market making in connection with those trust preferred securities. However, persons (other
than aÇliates of the Guarantor) to whom the Guarantor or any of its aÇliates have pledged trust preferred
securities may vote or consent with respect to those pledged trust preferred securities to the extent
permitted by the terms of the pledge.
Holders of the trust preferred securities will have no right to appoint or remove the regular trustees,
who may be appointed, removed or replaced solely by ING LLC III, as the holder of all of the trust
common securities.
Merger, Consolidation or Amalgamation of ING Trust III
ING Trust III may not merge with, or transfer or lease its properties substantially as an entirety to,
any corporation or other entity except as described below.
ING Trust III may, without the consent of the holders of the trust securities, the property trustee or
the Delaware trustee, merge with a trust organized under the laws of any state of the United States, so
long as all of the following conditions are satisÑed:
‚ if ING Trust III is not the survivor, the successor entity either: (x) expressly assumes all of the
obligations of ING Trust III under the trust securities, or (y) substitutes for the trust preferred
securities other securities having substantially the same terms as the trust preferred securities, so
41
long as the successor trust preferred securities rank the same as the trust preferred securities in
liquidation and with respect to distributions and other payments;
‚ ING LLC III expressly acknowledges a trustee of the successor entity that possesses the same
powers and duties as the property trustee as the holder of the company preferred securities;
‚ the trust preferred securities or any successor trust preferred securities are listed, or any successor
trust preferred securities will be listed upon notice of issuance, on any national securities exchange
or other organization on which the trust preferred securities are then listed or quoted;
‚ the merger does not cause the trust preferred securities or any successor trust preferred securities to
be downgraded by any nationally recognized statistical rating organization;
‚ the merger does not adversely aÅect the rights, preferences and privileges of the holders of the trust
preferred securities or any successor trust preferred securities in any material respect;
‚ the successor entity has a purpose substantially identical to that of ING Trust III;
‚ the Guarantor guarantees the obligations of the successor entity under the successor trust preferred
securities to the same extent as provided by the subordinated guarantee of the trust preferred
securities; and
‚ before the merger, the Guarantor shall have received an opinion of a nationally recognized law Ñrm
experienced in these matters to the eÅect that: (a) the merger will not adversely aÅect the rights,
preferences and privileges of the holders of the trust preferred securities or any successor trust
preferred securities in any material respect, (b) after the merger, neither ING Trust III nor the
successor entity will be required to register under the Investment Company Act, (c) after the
merger, ING Trust III or the successor entity will be classiÑed as a grantor trust for United States
federal income tax purposes, and (d) after the merger, ING LLC III will not be classiÑed as an
association or a publicly traded partnership taxable as a corporation for United States federal
income tax purposes.
Amendment of the Declaration
The Guarantor and the trustees may amend the Declaration without the consent of any of the holders
of the trust securities to:
‚ cure any ambiguity;
‚ correct or supplement any provision in the Declaration that may be defective or inconsistent with
any other provision of the Declaration;
‚ add to the covenants, restrictions or obligations of the Guarantor;
‚ conform to any change in the Investment Company Act, the Trust Indenture Act or the regulations
of the SEC under either statute; and
‚ modify, eliminate and add to any provision of the Declaration to the extent the Guarantor or the
trustees consider necessary or desirable so long as the amendment will not have a material adverse
eÅect on the rights, preferences or privileges of the holders of the trust securities.
However, if any proposal would (a) materially adversely aÅect the powers, preferences or special
rights of the trust securities, or (b) result in ING Trust III being liquidated, dissolved, terminated or
wound up, whether voluntarily or involuntarily, other than pursuant to the terms of the Declaration, then
the proposal will not be eÅective unless it is approved by the holders of at least a majority of the
outstanding trust securities, voting together as a single class. If any proposal would adversely aÅect only
the trust preferred securities or only the trust common securities, then only the aÅected class will be
entitled to vote on the proposal, and the proposal will not be eÅective unless it is approved by the holders
of a majority of that class of trust securities.
42
No amendment may be made to the Declaration without the consent of the Guarantor, the trustees
and all the holders of the trust securities if the amendment would:
‚ cause ING Trust III to fail to be classiÑed as a grantor trust for United States federal income tax
purposes;
‚ cause ING LLC III to be classiÑed as an association or publicly traded partnership taxable as a
corporation for those purposes;
‚ reduce or otherwise adversely aÅect the powers of the property trustee;
‚ cause ING Trust III or ING LLC III to be required to register under the Investment Company
Act; or
‚ permit the proceeds of any payment under the contingent guarantee to be distributed to anyone
other than the holders of the trust securities to the extent that any claims of those holders under
the subordinated guarantee of the trust securities have not been paid in full pursuant to the terms
of that subordinated guarantee and the contingent guarantee.
Book-Entry Only Issuance
DTC, Clearstream Banking and Euroclear
The trust preferred securities will initially be issued to investors only in book-entry form. One or more
fully-registered global trust preferred securities certiÑcates, representing the total aggregate number of trust
preferred securities, will be issued and registered in the name of Cede & Co., acting as nominee for the
Depository Trust Company, also known as DTC, or such other name as may be requested by an
authorized representative of DTC. DTC will act as securities depositary for the trust preferred securities.
The global certiÑcates will initially be deposited with The Bank of New York, acting as custodian for
DTC.
Persons that acquire beneÑcial ownership interests in the global certiÑcates will hold their interests
through DTC in the United States or Clearstream Banking or Euroclear in Europe, if they are participants
of those systems, or indirectly through organizations that are participants in those systems. Clearstream
Banking and Euroclear will hold omnibus positions on behalf of their participants through customers'
securities accounts in Clearstream Banking's and Euroclear's names on the books of their respective
depositaries, which in turn will hold those positions in customers' securities accounts in the depositaries'
names on the books of DTC. Unless and until certiÑcated securities are issued, the only ""holder'' of the
trust preferred securities will be Cede & Co., as nominee of DTC, or the nominee of a successor
depositary. BeneÑcial owners will be permitted to exercise their rights only indirectly through DTC,
Clearstream Banking, Euroclear and their participants.
DTC is a limited-purpose trust company organized under the New York Banking Law, a ""banking
organization'' within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a ""clearing corporation'' within the meaning of the New York Uniform Commercial Code, and a
""clearing agency'' registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds
securities that its participants deposit with DTC. DTC also facilitates the settlement among its participants
of securities transactions, such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in its participants' accounts, eliminating the need for physical movement
of securities certiÑcates. Participants in DTC include Clearstream Banking and Euroclear, securities
brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is
owned by a number of its participants and by the New York Stock Exchange, the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc., which we will refer to as NASD.
Access to the DTC system is also available to others such as securities brokers and dealers, banks and
trust companies that clear through or maintain a custodial relationship with a DTC participant, either
directly or indirectly. The rules applicable to DTC and its participants are on Ñle with the SEC. In March
1999, DTC announced plans to merge with the National Securities Clearing Corporation, subject to
43
regulatory approvals. Upon consummation of the merger, DTC is expected to be managed as a separate
operating subsidiary.
Clearstream Banking is incorporated under the laws of Luxembourg as a professional depositary.
Clearstream Banking holds securities for its participating organizations and facilitates the clearance and
settlement of securities transactions between its participants through electronic book-entry changes in
accounts of its participants, eliminating the need for physical movement of certiÑcates. Transactions may
be settled in Clearstream Banking in any of 28 currencies, including United States dollars. Clearstream
Banking provides to its participants, among other things, services for safekeeping, administration, clearance
and settlement of internationally traded securities and securities lending and borrowing. Clearstream
Banking interfaces with domestic markets in several countries. As a professional depositary, Clearstream
Banking is subject to regulation by the Luxembourg Monetary Institute. Clearstream Banking participants
are recognized Ñnancial institutions around the world, including securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. Indirect access to Clearstream Banking is
also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain
a custodial relationship with a Clearstream Banking participant, either directly or indirectly. Cedel
International, the parent of Cedelbank and Deutsche Bourse Clearing, a unit of the German stock
exchange, merged to form Clearstream Banking, a pan-European clearance and settlement system.
Euroclear was created in 1968 to hold securities for its participants and to clear and settle transactions
between its participants through simultaneous electronic book-entry delivery against payment, eliminating
the need for physical movement of certiÑcates and any risk from lack of simultaneous transfers of
securities and cash. Transactions may be settled in any of 32 currencies, including United States dollars.
Euroclear includes various other services, including securities lending and borrowing, and interfaces with
domestic markets in several countries generally similar to the arrangements for cross-market transfers with
DTC described in this prospectus. Euroclear is operated by the Brussels, Belgium oÇce of Morgan
Guaranty Trust Company of New York, the Euroclear Operator, under contract with Euroclear Clearance
Systems S.C., a Belgian cooperative corporation, which we refer to as the cooperative. All operations are
conducted by the Euroclear Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the cooperative. The cooperative establishes policy
for Euroclear on behalf of Euroclear participants. Euroclear participants include banks, including central
banks, securities brokers and dealers and other professional Ñnancial intermediaries. Indirect access to
Euroclear is also available to other Ñrms that clear through or maintain a custodial relationship with a
Euroclear participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York trust company that is a member bank
of the Federal Reserve System. As such, it is regulated and examined by the Federal Reserve and the
New York State Banking Department, as well as the Belgian Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms
and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System,
collectively, the Euroclear Terms and Conditions, and applicable Belgian law. The Euroclear Terms and
Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from
Euroclear, and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are
held on a fungible basis without attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Euroclear Terms and Conditions only on behalf of Euroclear
participants, and has no record of or relationship with persons holding through Euroclear participants.
Purchases of trust preferred securities within the DTC system must be made by or through DTC
participants, which will receive a credit for the trust preferred securities on DTC's records and on the
records of Clearstream Banking or Euroclear, if applicable. The ownership interest of each actual
purchaser of trust preferred securities, a beneÑcial owner of an interest in a global certiÑcate, is in turn to
be recorded on the DTC participants' and indirect participants' records. BeneÑcial owners of interests in a
global certiÑcate will not receive written conÑrmation from DTC of their purchases, but beneÑcial owners
of an interest in a global certiÑcate are expected to receive written conÑrmations providing details of the
44
transactions, as well as periodic statements of their holdings, from the DTC participants or indirect
participants through which the beneÑcial owners of an interest in a global certiÑcate purchased trust
preferred securities. Transfers of ownership interests in the trust preferred securities are to be accomplished
by entries made on the books of DTC participants and indirect participants acting on behalf of beneÑcial
owners of an interest in a global certiÑcate. BeneÑcial owners of interests in a global certiÑcate will not
receive certiÑcates representing their ownership interests in trust preferred securities, unless use of the
book-entry system for the trust preferred securities is discontinued.
Transfers Among DTC, Clearstream Banking and Euroclear
Transfers between DTC participants will occur in accordance with DTC rules. Transfers between
Clearstream Banking and Euroclear participants will occur in accordance with their respective rules and
operating procedures.
Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand,
and directly or indirectly through Clearstream Banking or Euroclear participants, on the other, will be
eÅected in DTC in accordance with DTC rules on behalf of the relevant European international clearing
system by the relevant European Depositary; however, those cross-market transactions will require delivery
of instructions to the relevant European international clearing system by the counterparty in that system in
accordance with its rules and procedures and within its established deadlines, European time. The relevant
European international clearing system will, if the transaction meets its settlement requirements, deliver
instructions to the relevant European Depositary to take action to eÅect Ñnal settlement on its behalf by
delivering or receiving securities in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Clearstream Banking and Euroclear
participants may not deliver instructions directly to the European Depositaries.
Because of time zone diÅerences, credits of securities received in Clearstream Banking or Euroclear
as a result of a transaction with a person that does not hold the trust preferred securities through
Clearstream Banking or Euroclear will be made during subsequent securities settlement processing and
dated the business day following the DTC settlement date. Those credits or any transactions in those
securities settled during that processing will be reported to the relevant Euroclear or Clearstream Banking
participants on that business day. Cash received in Clearstream Banking or Euroclear as a result of sales of
securities by or through a Clearstream Banking or Euroclear participant to a DTC participant will be
received with value on the DTC settlement date, but will be available in the relevant Clearstream Banking
or Euroclear cash account only as of the business day following settlement in DTC. For information with
respect to tax documentation procedures, see ""Taxation Ì Material United States Federal Income Tax
Consequences Ì Information Reporting and Backup Withholding Tax.''
Limitations on Responsibilities
DTC, Clearstream Banking and Euroclear have no knowledge of the actual beneÑcial owners of
interests in a global certiÑcate of the trust preferred securities. DTC's records reÖect only the identity of
the DTC participants, including Clearstream Banking and Euroclear, to whose accounts those trust
preferred securities are credited, which may or may not be the beneÑcial owners of interests in a global
certiÑcate. Similarly, the records of Clearstream Banking and Euroclear reÖect only the identity of the
Clearstream Banking or Euroclear participants to whose accounts those trust preferred securities are
credited, which also may or may not be the beneÑcial owners of interests in a global certiÑcate. DTC,
Clearstream Banking and Euroclear participants and indirect participants will remain responsible for
keeping account of their holdings on behalf of their customers.
DTC's Procedures for Notices, Voting and Payments
So long as DTC, or its nominee, is the registered owner or holder of a global certiÑcate, DTC or that
nominee, as the case may be, will be considered the sole owner or holder of the trust preferred securities
represented by the global certiÑcate for all purposes under the Declaration and the trust preferred
45
securities. No beneÑcial owner of an interest in a global certiÑcate will be able to transfer that interest
except in accordance with DTC's applicable procedures, in addition to those provided for under the
Declaration.
DTC has advised the Guarantor that it will take any action permitted to be taken by a holder of trust
preferred securities, including the presentation of trust preferred securities for exchange as described below,
only at the direction of one or more of its participants to whose account the DTC interests in the global
certiÑcates are credited and only in respect of that portion of the aggregate liquidation amount of trust
preferred securities as to which that participant or participants has or have given the direction.
Conveyance of notices and other communications by DTC to its participants, by those participants to
its indirect participants, and by participants and indirect participants to beneÑcial owners of interests in a
global certiÑcate will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in eÅect from time to time.
The regular trustees will send redemption notices in respect of the trust preferred securities held in
book-entry form to Cede & Co., and will also give those notices in the manner indicated under ""General
Information Ì Notices.'' If less than all of the trust preferred securities are being redeemed, DTC will
determine the amount of the interest of each DTC participant to be redeemed in accordance with its
procedures.
Although voting with respect to the trust preferred securities is limited, in those cases where a vote is
required, neither DTC nor Cede & Co., or such other nominee as may be requested by an authorized
representative of DTC, will itself consent or vote with respect to trust preferred securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to ING Trust III as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights of those participants to whose
accounts the trust preferred securities are allocated on the record date identiÑed in a listing attached to the
Omnibus Proxy.
Dividends on the trust preferred securities held in book-entry form will be made to DTC in
immediately available funds. DTC's practice is to credit its participants' accounts on the relevant payment
date in accordance with their respective holdings shown on DTC's records upon DTC's receipt of funds
and corresponding detail information from ING Trust III or the Guarantor on the payment date.
Payments by DTC's participants and indirect participants to beneÑcial owners of interests in a global
certiÑcate will be governed by standing instructions and customary practices, and will be the responsibility
of those participants and indirect participants and not of DTC, ING Trust III or the Guarantor, subject to
any statutory or regulatory requirements that may be in eÅect from time to time. Payment of any
dividends or other amounts to DTC is the responsibility of ING Trust III, disbursement of those payments
to participants is the responsibility of DTC, and disbursement of those payments to the beneÑcial owner of
an interest in a global certiÑcate is the responsibility of participants and indirect participants.
Except as described in this prospectus, a beneÑcial owner of an interest in a global certiÑcate will not
be entitled to receive physical delivery of trust preferred securities. Accordingly, each beneÑcial owner of
an interest in a global certiÑcate must rely on the procedures of DTC to exercise any rights under the trust
preferred securities.
Termination of and Changes to Depositary Arrangements
A global certiÑcate is exchangeable for trust preferred securities in registered certiÑcated form if:
‚ DTC (a) notiÑes ING Trust III that it is unwilling or unable to continue as depositary for the
global certiÑcates and ING Trust III does not appoint a successor depositary, or (b) has ceased to
be a clearing agency registered under the Securities Exchange Act of 1934; or
‚ an Event of Default, or any event that after notice or lapse of time or both would be an Event of
Default, has occurred and is continuing under the subordinated guarantees. DeÑnitive trust
preferred securities delivered in exchange for beneÑcial interests in any global certiÑcate will be
46
registered in the names, and issued in the denominations, requested by or on behalf of the
depositary, in accordance with its customary procedures, and will bear a legend related to the
acceptance of the subordinated guarantees by the holder. In each of the above circumstances, the
Guarantor will also appoint a paying agent with respect to the trust preferred securities.
Although DTC, Clearstream Banking and Euroclear have agreed to the foregoing procedures in order
to facilitate transfers of interests in the global certiÑcates among participants, none of them is under any
obligation to perform or continue to perform those procedures, and those procedures may be discontinued
at any time. Neither the Guarantor nor ING Trust III will have any responsibility for the performance by
DTC, Clearstream Banking, Euroclear or their participants or indirect participants under the rules and
procedures governing them. DTC, Clearstream Banking and Euroclear may discontinue providing their
services as securities depositary with respect to the trust preferred securities at any time by giving notice to
ING Trust III. Under those circumstances, deÑnitive trust preferred security certiÑcates would be
delivered as described below.
The information in this section concerning DTC and DTC's book-entry system has been obtained
from sources that ING Trust III and the Guarantor believe to be reliable, but neither ING Trust III nor
the Guarantor takes responsibility for the accuracy of this information.
Limitations on Rights Resulting from Book-Entry Form
The laws of some jurisdictions require that certain purchasers of securities take physical delivery of
securities in deÑnitive form. These laws may impair the ability to transfer beneÑcial interests in the global
trust preferred securities as represented by a global certiÑcate.
Transfer and Issue of DeÑnitive Trust Preferred Securities
If deÑnitive trust preferred securities are issued in the limited circumstances described above, those
trust preferred securities may be transferred in whole or in part in denominations of any whole number of
trust preferred securities upon surrender of the deÑnitive trust preferred securities certiÑcates together with
the form of transfer endorsed on it, duly completed and executed at the speciÑed oÇce of a transfer agent.
If only part of a trust preferred securities certiÑcate is transferred, a new trust preferred securities
certiÑcate representing the balance not transferred will be issued to the transferor within three Business
Days after the property trustee receives the certiÑcate. The new certiÑcate representing the balance will be
delivered to the transferor by uninsured post at the risk of the transferor, to the address of the transferor
appearing in the records of ING Trust III. The new certiÑcate representing the trust preferred securities
that were transferred will be sent to the transferee within three Business Days after the property trustee
receives the certiÑcate transferred, by uninsured post at the risk of the holder entitled to the trust preferred
securities represented by the certiÑcate, to the address speciÑed in the form of transfer.
Registration of transfers of trust preferred securities will be eÅected without charge by or on behalf of
ING Trust III, but the transferor will be required to pay any tax or other governmental charges that may
be imposed in relation to the transfer, together with any indemnity as ING Trust III or the Guarantor
may require.
ING Trust III will not be required to register the transfer of trust preferred securities after the trust
preferred securities have been called for redemption.
Registrar, Transfer Agent and Paying Agent
The property trustee will act as registrar, transfer agent and paying agent for the trust preferred
securities. As long as the trust preferred securities are listed on the Luxembourg Stock Exchange, ING
Trust III will also maintain a transfer agent and paying agent in Luxembourg. The initial Luxembourg
transfer agent and paying agent will be Crπedit Europπeen S.A.
47
Payments
As long as the trust preferred securities are in book-entry form, payments on the trust preferred
securities will be made to Cede & Co., or such other nominee as may be requested by an authorized
representative of DTC, which will credit the relevant accounts at DTC on the scheduled payment dates.
The payments will be distributed to participants, indirect participants and beneÑcial owners as described
under ""Ì Book-Entry Only Issuance Ì DTC's Procedures for Notices, Voting and Payments'' above.
If deÑnitive trust preferred securities are issued in the limited circumstances described above,
payments on such trust preferred securities will be made by check mailed to the address of the holder
entitled to receive the payment as the address appears on ING Trust III's register.
ING Trust III will maintain a paying agent with respect to the trust securities which will initially be
The Bank of New York. The paying agent will be permitted to resign as paying agent upon 30 days'
written notice to the regular trustees. If The Bank of New York resigns as paying agent, the regular
trustees will appoint another bank or trust company to act as paying agent. As long as the trust preferred
securities are listed on the Luxembourg Stock Exchange, ING Trust III will also maintain a paying agent
in Luxembourg. The initial Luxembourg paying agent will be Crπedit Europπeen S.A.
Notices
All notices or communications to a holder of trust preferred securities will be mailed by Ñrst-class
mail, postage prepaid, to the holder's address appearing in ING Trust III's records. In addition, as long as
the trust preferred securities are listed on the Luxembourg Stock Exchange and it is required by the rules
of the Luxembourg Stock Exchange, all notices regarding the trust preferred securities will be published in
English in one leading newspaper with circulation in Luxembourg. If publication in a newspaper in
Luxembourg is not practicable, then the notice may instead be published in another leading English
language daily newspaper with general circulation in Europe, which newspaper is published on each
business day in morning editions, whether or not it is also published in Saturday, Sunday or holiday
editions. It is expected that notices will normally be published in the Luxemburger Wort in Luxembourg.
Information Concerning the Property Trustee
The property trustee, before the occurrence of a default with respect to the trust securities, will be
required to perform only the duties speciÑcally listed in the Declaration. After a default occurs, the
property trustee must exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own aÅairs. Subject to this requirement, the property trustee is under no obligation
to exercise any of the powers vested in it by the Declaration at the request of any holder of trust preferred
securities, unless the holder oÅers the property trustee reasonable indemnity against the costs, expenses
and liabilities that might be incurred by the property trustee in exercising those powers. The holders of
trust preferred securities will not be required to oÅer any indemnity if the holders, by exercising their
rights, direct the property trustee to exercise remedies available to it under the LLC Agreement as holder
of the company preferred securities.
Governing Law
The Declaration and the trust securities will be governed by Delaware law.
Miscellaneous
The regular trustees are authorized and directed to conduct the aÅairs of and to operate ING
Trust III in such a way that ING Trust III will not be required to register under the Investment Company
Act or be characterized as other than a grantor trust for United States federal income tax purposes. In this
connection, the regular trustees are authorized to take any action, not inconsistent with applicable law, the
certiÑcate of trust or the Declaration, that the regular trustees determine in their discretion to be necessary
or desirable for those purposes so long as that action does not adversely aÅect the interests of the holders
of the trust preferred securities.
48
DESCRIPTION OF THE COMPANY SECURITIES
ING LLC III will issue the company securities under the terms of the amended and restated limited
liability company agreement, which we refer to as the LLC Agreement. The following summary of the
material terms and provisions of the company securities does not purport to be complete and is subject to,
and qualiÑed in its entirety by reference to, the LLC Agreement and the Delaware Limited Liability
Company Act. We have Ñled a copy of the LLC Agreement as an exhibit to the Registration Statement of
which this prospectus is a part.
Company Common Securities
Except as described under ""Ì Company Preferred Securities Ì Voting Rights'' below, all voting
rights are vested in the company common securities. Each company common security is entitled to one
vote. All of the company common securities will initially be held by the Guarantor, and as long as the
company preferred securities remain outstanding, all of the company common securities will be held by the
Guarantor or one or more qualiÑed subsidiaries. See ""ING Capital Funding III LLC'' above.
ING LLC III may declare or pay dividends on the company common securities only if all dividends
on the company preferred securities, if any, in respect of the relevant Dividend Period have been declared
and paid to the full extent authorized under the LLC Agreement, which may be no dividends or dividends
that are less than full dividends at the speciÑed rate as described below under ""Company Preferred
Securities Ì Authorized Dividends''. If on any dividend payment date no dividends on the company
preferred securities are authorized or the amount of authorized dividends is less than full dividends, then,
once ING LLC III has paid the authorized dividends on the company preferred securities, the dividend
preference will shift from the company preferred securities to the company common securities and ING
LLC III may apply any remaining available funds to pay dividends on the company common securities.
If ING LLC III is dissolved, liquidated, terminated or wound up, whether voluntarily or involuntarily,
then after all debts and liabilities of ING LLC III have been paid and the full preferential amounts to
which the holders of the company preferred securities are entitled have been paid or set aside for those
holders, the holders of company common securities will be entitled to share proportionately in any
remaining assets of ING LLC III.
Company Preferred Securities
General
The company preferred securities will rank senior to the company common securities with respect to
the payment of dividends and upon liquidation, dissolution, termination or winding up of ING LLC III,
except that if ING LLC III has paid dividends on the company preferred securities on a Dividend Date
(as deÑned below) to the full extent authorized under the LLC Agreement, ING LLC III may pay
dividends on the company common securities even if full dividends at the speciÑed rate have not been paid
on the company preferred securities. Notwithstanding the foregoing, no dividends may be paid on the
company common securities out of proceeds under the contingent guarantee. The LLC Agreement
prohibits ING LLC III from incurring any indebtedness or issuing any debt securities or any equity
securities ranking senior to the company preferred securities as to dividend rights or upon dissolution,
liquidation, termination or winding up of ING LLC III.
When issued, the company preferred securities will be validly issued, fully paid and non-assessable.
The holders of the company preferred securities will have no preemptive rights with respect to any other
securities of ING LLC III. The company preferred securities will not be convertible into any other
securities issued by ING LLC III and will not be subject to any sinking fund or other obligation of ING
LLC III for their repurchase or retirement.
49
Dividends
ING LLC III will pay dividends on the company preferred securities, when, as and if declared by its
board of directors, so long as such dividends are authorized as described below under ""Ì Authorized
Dividends'', semi-annually in arrears on the last day of each December and June, commencing June 30,
2001 through December 31, 2010, and quarterly in arrears on the last day of each March, June,
September and December thereafter, each a Dividend Date. The period beginning on the original issue
date of the trust preferred securities and continuing to, but not including, June 30, 2001 or beginning on a
Dividend Date and ending on the day that precedes the next succeeding Dividend Date is referred to as a
""Dividend Period.'' Dividends payable for the Ñrst Dividend Period will accrue from the date of original
issuance of the company preferred securities through June 29, 2001 and will be payable on June 30, 2001.
Prior to December 31, 2010, the dividend rate will be Ñxed at a rate per annum of 8.439% of the
liquidation preference of $1,000 per company preferred security, which is equivalent to $84.39 per year per
company preferred security. The amount of dividends that will be payable for each full Dividend Period
will be computed by dividing the rate per annum by two. If ING LLC III must pay dividends for less
than a full Dividend Period, the dividend for that Dividend Period will be computed on the number of
days elapsed on the basis of a 360-day year of twelve 30-day months.
After December 31, 2010, ING LLC III will pay dividends at a Öoating rate of 3.60% per annum
above three-month LIBOR. The amount of dividends that will be paid for each full or partial Dividend
Period will be computed on the basis of the actual number of days in such period divided by 360.
Dividends will not be cumulative, and if no dividend is paid for any Dividend Period, ING LLC III will
have no obligation to make up the missed dividend in any future Dividend Period. As used in this
prospectus, ""three-month LIBOR'' means a rate determined on the basis of the oÅered rates for threemonth U.S. dollar deposits commencing on the Ñrst day of the relevant quarterly period, which appears on
page 3750 of Bridge Telerate as of approximately 11:00 a.m., London time, on the determination date. If
such rate does not appear on Telerate Page 3750, three-month LIBOR will be determined on the basis of
the rates that three-month U.S. dollar deposits, commencing on the Ñrst day of the relevant quarterly
period and in a principal amount of not less than $1,000,000, are oÅered to prime banks in the London
interbank market by four major banks in the London interbank market selected by the calculation agent,
after consultation with the Guarantor, at approximately 11:00 a.m., London time, on that determination
date.
The calculation agent will request the principal London oÇce of each of such banks to provide a
quotation at its rate. If at least two such quotations are provided, three-month LIBOR with respect to that
determination date will be the arithmetic mean of such quotations. If fewer than two quotations are
provided, three-month LIBOR with respect to that determination date will be the arithmetic mean of the
rates quoted by three major money center banks in New York City selected by the calculation agent, after
consultation with ING LLC III, at approximately 11:00 a.m., New York City time, on the relevant
determination date for loans in U.S. dollars to leading European banks for a three-month period
commencing on the Ñrst day of the relevant quarterly period and in a principal amount of not less than
$1,000,000. However, if the banks selected by the calculation agent to provide quotations are not quoting
as described in this paragraph, three-month LIBOR for the applicable period will be the same as threemonth LIBOR as determined on the previous quarterly period.
As used in this prospectus:
""calculation agent'' means ING Bank N.V.
""determination date'' for a Dividend Period or distribution period (as applicable) means two London
banking days prior to the Ñrst day of the relevant quarterly Dividend Period or distribution period (as
applicable).
""London banking day'' means a day on which dealings in deposits in U.S. dollars are transacted in
the London interbank market.
""Telerate Page 3750'' means the display designated as ""Page 3750'' on the Bridge/Telerate Service
(or such other page as may replace Page 3750) on that service or such other service or services as
50
may be nominated by the British Bankers' Association as the information vendor for the purpose of
displaying London interbank oÅered rates for U.S. dollar deposits.
All percentages resulting from any calculations on the company preferred securities will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point, with Ñve one-millionths of a
percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or
.0987655)), and all dollar amounts used in or resulting from such calculation will be rounded to the
nearest cent (with one-half cent being rounded upward).
As long as either (i) the company preferred securities are in book-entry form or (ii) the company
preferred securities are held by ING Trust III and the trust preferred securities remain in book-entry
form, ING LLC III will pay dividends to the holders of the company preferred securities listed in
ING LLC III's records on the Business Day before the relevant Dividend Date. If neither the trust
preferred securities nor the company preferred securities are in book-entry form, ING LLC III will pay
dividends to the holders of the company preferred securities listed in ING LLC III's records on the
Ñfteenth day of the month of the relevant Dividend Date. Subject to any applicable laws and regulations,
all payments will be made as described under ""Description of the Trust Securities Ì Book-Entry Only
Issuance'' and ""Description of the Trust Securities Ì Payments'' above.
If any dividends would be payable on the company preferred securities on a day that is not a Business
Day, those dividends will instead be paid on the next Business Day, except that if that Business Day falls
in the next calendar month, those dividends will be paid on the preceding Business Day. No interest or
other payment will be due as a result of any such delay.
In addition, under the Delaware Limited Liability Company Act, ING LLC III may pay dividends
only out of legally available funds. As a result, as a matter of Delaware law, ING LLC III would not be
permitted to pay a dividend if, after paying the dividend, ING LLC III's liabilities to parties other than
the holders of the company securities would exceed the fair value of its assets.
Even if ING LLC III is not permitted to declare dividends for any Dividend Date, the Guarantor
may be required to make a payment in lieu of those dividends under the subordinated guarantees and the
contingent guarantee. See ""Description of the Guarantees''.
Except as described in this subsection, holders of the company preferred securities will have no right
to participate in the proÑts of ING LLC III.
Authorized Dividends
The LLC Agreement will not authorize the declaration of dividends on the company preferred
securities on any Dividend Date to the extent that:
‚ under applicable Netherlands regulations, the Guarantor would be limited in making dividend or
other payments on senior preferred or preference shares issued by it; or
‚ (x) the Guarantor has not made or declared any dividend or other payment for the most recent
dividend period for which the determination has been made on the parity preferred shares or under
the parity guarantees, and (y) no subsidiary of the Guarantor has either made or declared any
dividend or other payment for the most recent dividend period for which the determination has
been made on any parity securities issued by such subsidiary.
Notwithstanding the foregoing, dividends on the company preferred securities will be authorized for
payment in full on:
‚ the two consecutive Dividend Dates contemporaneous with and/or immediately following the date
on which (a) the Guarantor declares or makes a dividend or other payment on any ordinary shares
that pay dividends annually, or (b) the Guarantor or any of its subsidiaries redeems, repurchases or
otherwise acquires any ordinary shares or any parity securities (other than (1) by conversion into or
in exchange for ordinary shares, (2) in connection with transactions eÅected by or for the account
51
of customers of the Guarantor or any of its subsidiaries or in connection with the distribution,
trading or market making in respect of those securities, (3) in connection with the satisfaction by
the Guarantor or any of its subsidiaries of its obligations under any employee beneÑt plans or
similar arrangements with or for the beneÑt of employees, oÇcers, directors or consultants, (4) as a
result of a reclassiÑcation of the capital stock of the Guarantor or any of its subsidiaries or the
exchange or conversion of one class or series of capital stock for another class or series of capital
stock, or (5) the purchase of fractional interests in shares of the capital stock of the Guarantor or
any of its subsidiaries pursuant to the conversion or exchange provisions of that capital stock or the
security being converted or exchanged) for any consideration, or any moneys are paid to or made
available for a sinking fund or for redemption of any of the ordinary shares or any parity securities;
and
‚ the next Dividend Date that is either contemporaneous with or immediately following the date on
which a dividend or other payment is declared or made on any ordinary shares that pay dividends
semi-annually or more frequently.
Also, notwithstanding the foregoing, if (x) the Guarantor or any of its subsidiaries pays any dividends
or makes any other payment or distribution on any parity securities on any date, and (y) during the
relevant period (as deÑned below) ending on and including that date there occurred a Dividend Date as to
which ING LLC III paid no dividends or less than full dividends on the company preferred securities,
then on that date ING LLC III will be required to pay a special dividend on the company preferred
securities. The special dividend will be payable on that date whether or not that date is otherwise a
Dividend Date and, if it is a Dividend Date, will be in addition to any other dividends required to be paid
on that Dividend Date. The special dividend will be in an amount that, when taken together with
dividends previously paid on the company preferred securities during the relevant period, represents the
same proportion of full dividends on the company preferred securities for all Dividend Dates during the
relevant period that the dividend on parity securities paid during that relevant period bears to full dividends
on such parity securities for that relevant period.
The ""relevant period'' means (i) in the case of parity securities that pay dividends less frequently
than semi-annually, one year, and (ii) in the case of parity securities that pay dividends semi-annually or
more frequently than semi-annually, six months (in each case ending on or including the date on which
the related dividend on a parity security is paid but not including the corresponding day in the month that
is twelve or six months prior thereto).
Payment of Additional Amounts
ING LLC III will make all payments under the company preferred securities without withholding or
deducting for any present or future taxes, duties, assessments or governmental charges imposed or levied
by the Netherlands or the jurisdiction of residence of the issuer of any subordinated notes held by
ING LLC III or from which any payment thereon is made or any authority of any of those jurisdictions
that has the power to tax, unless ING LLC III is required by law to withhold or deduct for present or
future taxes, duties, assessments or governmental charges. If ING LLC III or ING Trust III is required
to withhold or deduct any portion of a payment, ING LLC III will pay additional amounts in order to
cause the net amounts received by the holders of the trust securities to be the same as the holders would
have received in the absence of the withholding or deduction, subject to the same limitations on additional
amounts payable by ING Trust III as described above under ""Description of the Trust Securities Ì
Payment of Additional Amounts.''
Voting Rights
Except as described below, the holders of the company preferred securities will have no voting rights.
The holders of the company preferred securities will have the right to elect two independent directors
to the board of directors or the Guarantee Independent Director as described under ""ING Capital
Funding III LLC'' above.
52
In addition, the holders of the company preferred securities will be permitted to vote to approve or
reject amendments to the LLC Agreement under circumstances substantially similar to those described
under ""Description of the Trust Securities Ì Amendment of the Declaration'' above.
No vote of the holders of the company preferred securities will be required for ING LLC III to
redeem and cancel the company preferred securities in accordance with the LLC Agreement. See
""Ì Redemption of Company Preferred Securities'' below.
Even if holders of company preferred securities are entitled to vote or consent under any of the
circumstances described above, any of the company preferred securities that are beneÑcially owned at that
time by the Guarantor or any of its subsidiaries or aÇliates, other than ING Trust III, will not be entitled
to vote or consent and will be treated, for this purpose, as if those company preferred securities were not
outstanding, except under the circumstances described with respect to the trust securities under
""Description of the Trust Securities Ì Voting Rights'' above.
Redemption of Company Preferred Securities
Redemption at ING LLC III's Option
ING LLC III may redeem the company preferred securities at its option, in whole or in part, on any
Dividend Date occurring on or after December 31, 2010 at a redemption price equal to the liquidation
preference of $1,000 per company preferred security, plus accrued dividends for the Ñnal Dividend Period
through the date Ñxed for redemption and any additional amounts.
ING LLC III will also have the right to redeem the company preferred securities at any time, in
whole but not in part, at the redemption price speciÑed above for optional redemptions, if a Par Tax Event
occurs.
In addition, ING LLC III may redeem the company preferred securities at any time, in whole but
not in part, at a redemption price equal to the greater of (i) the redemption price speciÑed above for
optional redemption and (ii) the Make Whole Amount, if:
‚ a Make Whole Tax Event occurs and is continuing; or
‚ an Investment Company Event occurs and is continuing.
A ""Par Tax Event'' means ING LLC III or the Guarantor has received an opinion of a nationally
recognized law Ñrm or other tax adviser in the United States, the Netherlands or the jurisdiction of the
issuer of any successor securities to the initial subordinated notes, as appropriate, experienced in these
matters, to the eÅect that:
‚ as a result of a change in law, judicial decision or interpretation, the Guarantor is required to pay
additional amounts with respect to taxes withheld on distributions on the company preferred
securities, the trust preferred securities, the subordinated guarantees or the contingent guarantee;
‚ as a result of a change in law, judicial decision or interpretation, Guarantor is required to pay
additional amounts on the initial subordinated notes or any successor securities issued by the
Guarantor (or any subsidiary of Guarantor issuing any successor subordinated securities is required
to pay additional amounts on the successor subordinated securities); or
‚ tax is imposed in the United States or the Netherlands on ING LLC III or on ING Trust III.
A ""Make Whole Tax Event'' means that ING LLC III or the Guarantor has received an opinion of a
nationally recognized law Ñrm or other tax adviser in the United States, the Netherlands or the jurisdiction
of the issuer of any successor securities to the initial subordinated notes, as appropriate, experienced in
these matters, to the eÅect that:
‚ the Guarantor is not able to deduct for tax purposes payments made on the initial subordinated
notes or any successor subordinated securities issued by the Guarantor (or any subsidiary of
Guarantor issuing the successor subordinated securities is not able to deduct for tax purposes
payments made on such successor subordinated securities); or
53
‚ the Guarantor otherwise suÅers adverse tax consequences which it cannot reasonably avoid in
connection with the initial subordinated notes or successor subordinated securities or in connection
with the company preferred securities or the trust preferred securities.
An ""Investment Company Event'' means that ING LLC III or the Guarantor has received an opinion
of a nationally recognized U.S. law Ñrm experienced in these matters to the eÅect that there is more than
an insubstantial risk that ING Trust III or ING LLC III is or will be considered an ""investment
company'' within the meaning of the Investment Company Act as a result of:
‚ any judicial decision, any pronouncement or interpretation, however it is made known, or the
adoption or amendment of any law, rule or regulation, or any notice or announcement, including
any notice or announcement of intent to adopt the rule or regulation, by any U.S. legislative body,
court, governmental agency or regulatory authority; or
‚ any change after the date of this prospectus in the laws of the Netherlands relating to the
enforceability of the subordinated guarantees or the contingent guarantee as conÑrmed in an opinion
of a nationally recognized Dutch law Ñrm experienced in these matters.
""Make Whole Amount'' as applied to a redemption of the company preferred securities means the
sum of (i) as determined by a quotation agent (as deÑned below), the sum of the present value of the
liquidation amount of the company preferred securities together with the present values of scheduled
payments of dividends accrued from the date of redemption to the Dividend Date in December, 2010 (the
""remaining life''), in each case discounted to the date of redemption on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the adjusted treasury rate, (ii) accrued dividends for
the Ñnal Dividend Period through the date Ñxed for redemption and (iii) any additional amounts.
For purposes of determining the Make Whole Amount:
""adjusted treasury rate'' means, with respect to any date prior to December 15, 2001, the treasury
rate plus 50% of the initial credit spread and, with respect to any redemption date after December 15,
2001, the treasury rate plus 0.75%.
""comparable treasury issue'' means with respect to any redemption date the United States Treasury
security selected by the quotation agent as having a maturity comparable to the remaining life that
would be utilized, at the time of selection and in accordance with customary Ñnancial practice, in
pricing new issues of corporate debt securities of comparable maturity to the remaining life. If no
United States Treasury security has a maturity that is within a period from three months before to
three months after the interest payment date and dividend payment date on December 31, 2010, the
two most closely corresponding United States Treasury securities will be used as the comparable
treasury issue, and the treasury rate will be interpolated or extrapolated on a straight-line basis,
rounding to the nearest month using such securities.
""comparable treasury price'' means (A) the average of Ñve reference treasury dealer quotations for
such redemption date, after excluding the highest and lowest of such reference treasury dealer
quotations, or (B) if the quotation agent obtains fewer than Ñve such reference treasury dealer
quotations, the average of all such quotations.
""quotation agent'' means Morgan Stanley & Co. Incorporated and its successors, except that if
Morgan Stanley & Co. Incorporated ceases to be a primary U.S. Government securities dealer in
New York City (a ""primary treasury dealer''), ING LLC III will designate another primary treasury
dealer after consultation with the Guarantor.
""reference treasury dealer'' means (i) the quotation agent and (ii) any other primary treasury dealer
selected by the quotation agent after consultation with ING LLC III.
""reference treasury dealer quotations'' means, with respect to each reference treasury dealer and any
redemption date, the average, as determined by the quotation agent, of the bid and asked prices for
the comparable treasury issue (expressed in each case as a percentage of its principal amount) quoted
in writing to the quotation agent by such reference treasury dealer at 5:00 p.m., New York City time,
on the third business day preceding such redemption date.
54
""treasury rate'' means (i) the yield, under the heading which represents the average for the week
immediately prior to the redemption date, appearing in the most recently published statistical release
designated ""H.15(519)'' or any successor publication which is published weekly by the Federal
Reserve and which establishes yields on actively traded United States Treasury securities adjusted to
constant maturity under the caption ""Treasury Constant Maturities,'' for the maturity corresponding
to the remaining life (or, if no maturity is within three months before or after the remaining life,
yields for the two published maturities most closely corresponding to the remaining life will be
determined and the treasury rate will be interpolated or extrapolated from such yields on a straightline basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the comparable treasury issue,
calculated using a price for the comparable treasury issue (expressed as a percentage of its principal
amount) equal to the comparable treasury price for such redemption date. The treasury rate will be
calculated on the third business day preceding the redemption date.
ING LLC III must give 30 to 60 days' notice of redemption to the holders of the company preferred
securities. Any notice of redemption will be irrevocable. If the redemption price in respect of any company
preferred securities is improperly withheld or refused and is not paid by either ING LLC III or the
Guarantor under the subordinated guarantees, dividends on those company preferred securities will
continue to be payable, subject to the third paragraph under ""Description of the Company
Securities Ì Company Preferred Securities Ì Dividends,'' until the redemption price is actually paid.
Repurchases of Company Preferred Securities
Subject to applicable law, ING LLC III, the Guarantor or any of the Guarantor's aÇliates may at
any time or from time to time purchase outstanding company preferred securities by tender in the open
market or by private agreement. If purchases are made by tender, the tender must be available to all
holders of company preferred securities.
Rights Upon Liquidation
If ING LLC III is liquidated, dissolved, terminated or wound up, whether voluntarily or involuntarily,
holders of the company preferred securities outstanding at that time will, subject to the limitations
described in this prospectus, be entitled to receive a distribution upon liquidation in an amount equal to
the distribution that those holders would have received in a dissolution of the Guarantor if they had held
the Guarantor's most senior preferred shares, having the same liquidation preference as the company
preferred securities, instead of the company preferred securities. This liquidation distribution to holders of
company preferred securities will be paid after payments are made to any creditors but before any
distribution of assets is made to holders of company common securities. The holders of company common
securities will receive any remaining assets of ING LLC III after this liquidation distribution to the
holders of company preferred securities.
The LLC Agreement will provide that, if the Guarantor is liquidated, dissolved, terminated or wound
up, whether voluntarily or involuntarily, the board of directors of ING LLC III will be obligated to
commence proceedings to liquidate ING LLC III under the Delaware Limited Liability Company Act.
However, ING LLC III generally will not be dissolved until all claims under the subordinated guarantees
and the contingent guarantee have been paid in full and the proceeds of any payment under the contingent
guarantee have been distributed to the holders of the company preferred securities. The Guarantor will
agree that as long as any of the company preferred securities are outstanding, the Guarantor will not
permit, or take any action to cause, the liquidation, dissolution, termination or winding up of
ING LLC III unless the Guarantor is itself in liquidation. See ""Description of the Guarantees Ì Certain
Covenants of the Guarantor and ING LLC III Ì Maintenance of Ownership and Existence of
ING LLC III and ING Trust III.''
55
Merger, Consolidation or Amalgamation of ING LLC III
ING LLC III may not merge with, or transfer or lease its assets substantially or in the entirety to,
any corporation or other entity except as described below.
ING LLC III may, without the consent of the holders of the company preferred securities, merge
with a limited partnership, limited liability company or trust organized under the laws of any state of the
United States of America, so long as all of the following conditions are satisÑed:
‚ if ING LLC III is not the survivor, the successor entity either (x) expressly assumes all of the
obligations of ING LLC III under the company preferred securities, or (y) substitutes for the
company preferred securities other securities having substantially the same terms as the company
preferred securities, so long as the successor entity's preferred securities rank the same as the
company preferred securities in liquidation and with respect to distributions and participation in the
proÑts of the successor entity;
‚ the Guarantor expressly acknowledges the successor entity as the holder of the subordinated notes;
‚ the company preferred securities or any successor entity's preferred securities are listed, or any
successor entity's preferred securities will be listed upon notice of issuance, on any national
securities exchange or other organization on which the company preferred securities, if so listed, are
then listed or quoted;
‚ the merger does not cause the trust preferred securities, or, if ING Trust III has been liquidated,
the company preferred securities or any successor entity's preferred securities, to be downgraded by
any nationally recognized statistical rating organization;
‚ the merger does not adversely aÅect the powers, preferences and other special rights of the holders
of the trust preferred securities or company preferred securities or any successor entity's preferred
securities in any material respect;
‚ the successor entity has a purpose substantially identical to that of ING LLC III;
‚ the Guarantor guarantees the obligations of the successor entity under the successor entity's
preferred securities, and to the extent provided by the subordinated guarantee of the company
preferred securities and the contingent guarantee; and
‚ before the merger, ING LLC III has received an opinion of a nationally recognized U.S. law Ñrm
experienced in these matters to the eÅect that (a) the successor entity will be treated as a
partnership, and will not be classiÑed as an association or a publicly traded partnership taxable as a
corporation, for United States federal income tax purposes, (b) the merger will not cause ING
Trust III to be classiÑed as other than a grantor trust for United States federal income tax
purposes, (c) after the merger, the successor entity will not be required to register under the
Investment Company Act, and (d) the merger will not adversely aÅect the limited liability of the
holders of the company preferred securities.
Book-Entry and Settlement
If the company preferred securities are distributed to holders of trust preferred securities in connection
with ING Trust III's liquidation, dissolution, termination or winding up, whether voluntary or involuntary,
the company preferred securities will be issued in the form of one or more global certiÑcates registered in
the name of DTC as the depositary, or its nominee, on terms substantially identical to those then
applicable to the trust preferred securities. For a description of DTC, Clearstream Banking, Euroclear and
the speciÑc terms of the depositary arrangement as initially in eÅect, see ""Description of the Trust
Securities Ì Book-Entry Only Issuance.'' As of the date of this prospectus, that description of DTC's
book-entry system and DTC's practices (including practices of Clearstream Banking and Euroclear) as
they relate to purchases, transfers, notices and payments with respect to the trust preferred securities
would apply in all material respects to any company preferred securities represented by one or more global
securities.
56
Registrar, Transfer Agent and Paying Agent
The Bank of New York will act as registrar, transfer agent and paying agent for the company
preferred securities.
Registration of transfers of company preferred securities will be eÅected without charge by or on
behalf of ING LLC III, but upon payment, with the giving of such indemnity as the transfer agent may
require, in respect of any tax or other governmental charges that may be imposed in relation to it.
The transfer agent will not be required to register or cause to be registered the transfer of company
preferred securities after those company preferred securities have been called for redemption.
Governing Law
The LLC Agreement and the company securities will be governed by Delaware law.
Miscellaneous
The board of directors is authorized and directed to conduct the aÅairs of ING LLC III in such a
way that:
‚ ING LLC III will not be required to register under the Investment Company Act; and
‚ ING LLC III will not be treated as an association or as a ""publicly traded partnership'' within
the meaning of Section 7704 of the Internal Revenue Code, taxable as a corporation for United States
federal income tax purposes.
In this connection, the board of directors is authorized to take any action, not inconsistent with
applicable law or the LLC Agreement, that the board of directors determines in its discretion to be
necessary or desirable for those purposes, so long as the action does not adversely aÅect the interests of the
holders of the company preferred securities. Any amendment of the LLC Agreement relating to dividends,
the contingent guarantee or the distribution of the proceeds of any payment under the contingent
guarantee will require consent of each holder of the company preferred securities.
57
DESCRIPTION OF THE GUARANTEES
Set forth below is a summary of:
‚ the subordinated guarantees that will be executed and delivered by the Guarantor for the beneÑt of
the holders from time to time of the company preferred securities and the trust securities; and
‚ the contingent guarantee that will be executed and delivered by the Guarantor and ING LLC III.
The subordinated guarantees will be qualiÑed as indentures under the Trust Indenture Act. The
contingent guarantee will not be qualiÑed under the Trust Indenture Act, but will incorporate its terms by
reference. The Bank of New York will act as the guarantee trustee under the subordinated guarantees for
purposes of compliance with the provisions of the Trust Indenture Act, and will also serve as guarantee
trustee under the contingent guarantee. The terms of the subordinated guarantees will be those set forth in
the subordinated guarantees and those made a part of the subordinated guarantees by the Trust Indenture
Act. The terms of the contingent guarantee will be those set forth in the contingent guarantee and those
made a part of the contingent guarantee by the Trust Indenture Act. The following summary of the
material terms and provisions of the subordinated guarantees and the contingent guarantee does not
purport to be complete and is subject to, and qualiÑed in its entirety by reference to, the subordinated
guarantees, the contingent guarantee and the Trust Indenture Act. We have Ñled copies of the
subordinated guarantees and the contingent guarantee as exhibits to the Registration Statement of which
this prospectus is a part.
The Subordinated Guarantees
The Guarantor will irrevocably and unconditionally agree in the subordinated guarantees to make in
full, on a subordinated basis, to the holders of trust securities and the holders of company preferred
securities the payments described below, as and when due without duplication of amounts previously paid
to the holders, regardless of any defense, right of set-oÅ or counterclaim that ING LLC III or ING
Trust III may have. The Guarantor's obligations under the subordinated guarantees are several and
independent of the obligations of ING LLC III with respect to the company preferred securities or the
obligations of ING Trust III with respect to the trust securities.
The Guarantor will be liable as principal and sole obligor under the subordinated guarantees to make
the following payments, without duplication:
‚ any accumulated but unpaid distributions on the trust securities properly payable out of legally
available funds that ING Trust III would make if dividends were paid by ING LLC III to ING
Trust III on the company preferred securities to the full extent authorized;
‚ any accumulated but unpaid dividends on the company preferred securities that are authorized and
deemed declared, whether or not actually declared;
‚ the redemption price payable with respect to any trust securities called for redemption by ING
Trust III;
‚ the redemption price payable with respect to any company preferred securities called for redemption
by ING LLC III;
‚ the liquidation distribution on each trust security payable upon liquidation of ING Trust III;
‚ the liquidation distribution on each company preferred security payable upon liquidation of ING
LLC III;
‚ any additional amounts payable by ING Trust III as described under ""Description of the Trust
Securities Ì Payment of Additional Amounts''; and
‚ any additional amounts payable by ING LLC III as described under ""Description of the Company
Securities Ì Company Preferred Securities Ì Payment of Additional Amounts''.
58
The Guarantor may be required to make a payment in respect of dividends on a Dividend Date, even
if ING LLC III is prohibited from declaring or paying dividends on that Dividend Date.
If ING LLC III for any reason does not actually declare dividends on any Dividend Date to the full
extent authorized, as described under ""Description of the Company Securities Ì Company Preferred
Securities Ì Authorized Dividends'', then under the terms of the subordinated guarantees and the
contingent guarantee, those dividends will nevertheless be deemed declared on that Dividend Date, to the
full extent authorized under the terms of the LLC Agreement. As a result, the Guarantor will be required
to pay those dividends under the subordinated guarantees and the contingent guarantee, even if ING
LLC III is not required to pay them.
The Guarantor will also be required to pay interest accrued on these amounts from the date a claim is
made under the subordinated guarantees until the payment is made or oÅered to the holders, subject to
the limitations set forth in the subordinated guarantees.
The subordinated guarantees, together with the contingent guarantee, the company preferred securities
and the trust securities, are intended to provide the holders of the trust securities and company preferred
securities, as nearly as possible, with rights to distributions and on liquidation equivalent to those to which
the holders of those securities would be entitled if they held the most senior preferred shares of the
Guarantor.
The Contingent Guarantee
The Guarantor will also enter into the contingent guarantee with ING LLC III. Under the terms of
the contingent guarantee, the Guarantor will pay to ING LLC III any amounts due under the company
preferred securities, to the extent that any such amounts have been claimed under the subordinated
guarantees but remain unpaid, plus interest accrued thereon since the date of the claim under the
subordinated guarantees. If the guarantee trustee or a holder of company preferred securities or trust
securities makes a claim under the subordinated guarantees and the claim remains unpaid for ten days or
more, the holder of the company preferred securities may elect the guarantee independent director. If the
claims under the subordinated guarantees remain unpaid for 180 days or more, the guarantee independent
director will enforce ING LLC III's claim under the contingent guarantee, without prejudice to the claims
of the guarantee trustee or the holders of the company preferred securities or trust securities under the
subordinated guarantees. Under the LLC Agreement, ING LLC III will distribute the amount paid by the
Guarantor under the contingent guarantee to the holders of the company preferred securities
proportionately, except to the extent that those holders or any holders of the trust securities received
payments under the company preferred securities, the trust securities or the subordinated guarantees.
Under the Declaration, the property trustee will distribute the proceeds of that distribution to the holders
of the trust securities proportionately, except to the extent that those holders received payment under the
trust securities or the subordinated guarantees. The duties and rights of the guarantee independent director
will be limited under the terms of the LLC Agreement to the enforcement of the contingent guarantee
and causing the proceeds of any payment under the contingent guarantee to be distributed to the holders
of the company preferred securities.
Other Provisions
Subject to applicable law, the Guarantor's obligations under the subordinated guarantees and the
contingent guarantee constitute unsecured obligations of the Guarantor and will rank:
‚ subordinate and junior to indebtedness of the Guarantor, including the subordinated notes, other
than any guarantee expressed to rank equally with the subordinated guarantees or the contingent
guarantee;
‚ equally with each other and with the Guarantor's guarantees of preferred shares of its subsidiaries,
including ING Capital Funding Trust I, ING Capital Funding Trust II, ING Capital Funding I
LLC and ING Capital Funding II LLC, that rank equal to the subordinated guarantees and, from
59
a Ñnancial point of view, eÅectively, with the rights to liquidation proceeds of the Guarantor's most
senior preferred shares; and
‚ senior to the rights to liquidation proceeds of the Guarantor's ordinary shares.
The Guarantor will not be obligated to make any payment in respect of dividends under the
subordinated guarantees to the extent that those dividends are not authorized and deemed declared.
However, the Guarantor will be permitted to make payments on the company preferred securities under
the subordinated guarantees in its discretion, even if ING LLC III is not permitted to declare the relevant
dividends.
The Guarantor will make all payments under the subordinated guarantees and the contingent
guarantee without withholding or deducting for, or on account of, any present or future tax, duties,
assessments or governmental charges imposed or levied by the Netherlands or the jurisdiction of residence
of the issuer of any subordinated notes held by ING LLC III or from which any payment thereon is made
or any authority of any of those jurisdictions that has the power to tax, unless the Guarantor is required by
law to withhold or deduct the present or future tax, duties, assessments or governmental charges. If the
Guarantor is required to withhold or deduct any portion of a payment, the Guarantor will pay additional
amounts in order to cause the net amounts received by the holders of the trust preferred securities and
company preferred securities to be the same as the holders would have received in the absence of the
withholding or deduction, subject to the same limitations on additional amounts payable by ING Trust III
as described under ""Description of the Trust Securities Ì Payment of Additional Amounts'' above.
The guarantee trustee, on behalf of the holders of the company preferred securities and the trust
securities, may enforce the subordinated guarantees directly against the Guarantor if the Guarantor
defaults under either subordinated guarantee. If the guarantee trustee fails to enforce its rights under the
subordinated guarantees after a holder of the company preferred securities or the trust securities has made
a written request, the holder may directly institute a lawsuit against the Guarantor to enforce the
guarantee trustee's rights under the applicable subordinated guarantee without Ñrst initiating any legal
proceeding against the guarantee trustee, ING LLC III, ING Trust III or any other entity.
Certain Covenants of the Guarantor and ING LLC III
Issuance and Guarantee of Preference Shares
The Guarantor will not issue any preferred or preference shares with liquidation rights ranking senior
to its obligations under the subordinated guarantees or the contingent guarantee or give any guarantee in
respect of any of its preferred shares or preferred shares issued by any of its subsidiaries if the guarantee
would rank senior to the subordinated guarantees or the contingent guarantee unless the subordinated
guarantees and the contingent guarantee are amended to give the holders of the company preferred
securities and the trust securities the same rights and entitlements as are contained in or attached to the
other guarantees so that the subordinated guarantees and the contingent guarantee rank equally with those
guarantees and, from a Ñnancial point of view, eÅectively, with those preferred shares. Except to the extent
described above, neither the subordinated guarantees nor the contingent guarantee limits the incurrence or
issuance of other secured or unsecured debt or other obligations of the Guarantor.
Payment of Dividends
The Guarantor will agree in the subordinated guarantees and the contingent guarantee that if any
amount required to be paid under the subordinated guarantees and the contingent guarantee in respect of
any dividends on the trust securities or company preferred securities payable in respect of the most recent
Dividend Period has not been paid, the Guarantor will pay that amount before paying any dividend or
other payment on the ordinary shares, except dividends in the form of the ordinary shares.
60
Maintenance of Ownership and Existence of ING LLC III and ING Trust III
As long as any trust securities or company preferred securities remain outstanding, all of the company
common securities will be held by the Guarantor or one or more qualiÑed subsidiaries and all of the trust
common securities will be held by ING LLC III or by the Guarantor or one or more qualiÑed
subsidiaries. The Guarantor and ING LLC III will agree that:
‚ as long as any of the company preferred securities are outstanding, the Guarantor will not permit,
or take any action to cause, the liquidation, dissolution, termination or winding up of ING LLC III
unless the Guarantor is itself in liquidation; and
‚ as long as any of the trust preferred securities are outstanding, the Guarantor will not permit ING
LLC III to take, or take any action to cause, a liquidation, dissolution, termination or winding up,
whether voluntary or involuntary, of ING Trust III, unless a tax is imposed in the United States or
the Netherlands on ING Trust III or an Investment Company Event with respect to ING Trust III
occurs or the Guarantor is itself in liquidation.
See also ""ING Capital Funding Trust III'' and ""ING Capital Funding III LLC'' for certain
additional covenants to be made by the Guarantor.
No Assignment
The Guarantor may not assign its obligations under the subordinated guarantees or the contingent
guarantee, except in the case of merger, consolidation or sale of substantially all of its assets where the
Guarantor is not the surviving entity.
Termination
The subordinated guarantees and the contingent guarantee will terminate and be of no further force
and eÅect from the earlier of:
‚ the payment of the redemption price for all trust securities or purchase and cancellation of all trust
securities;
‚ if the trust securities are no longer outstanding but the requirements set out in the Ñrst bullet point
of this paragraph are not satisÑed, the payment of the redemption price for all company preferred
securities or purchase and cancellation of all company preferred securities;
‚ full payment of the liquidation distribution plus additional amounts thereon, if any, on all trust
securities; or
‚ if the trust preferred securities are no longer outstanding but the requirements set out in the Ñrst
bullet point of this paragraph are not satisÑed, full payment of the liquidation distribution plus
additional amounts thereon, if any, on all company preferred securities. However, the subordinated
guarantees and the contingent guarantee will continue to be eÅective or will be reinstated, as the
case may be, if the holder is required to return any payment made under the company preferred
securities, the trust preferred securities, the subordinated guarantees or the contingent guarantee.
Amendments
Any changes to the provisions of the subordinated guarantees that establish the amount and timing of
the payments under the subordinated guarantees and the circumstances under which dividends are deemed
to have been declared must be approved by each holder of the company preferred securities and the trust
securities. Any other provision of the subordinated guarantees may be modiÑed only with the prior
approval of the holders of both not less than two-thirds of the company preferred securities and not less
than two-thirds of the trust preferred securities.
Similarly, any changes to the provisions of the contingent guarantee that establish the amount and
timing of the payments under the contingent guarantee and the circumstances under which dividends are
61
deemed to have been declared must be approved by each holder of the company preferred securities. ING
LLC III may not consent to any other amendment to the contingent guarantee unless it is instructed to do
so by the holders of not less than two-thirds of the company preferred securities.
However, both the subordinated guarantees and the contingent guarantee may be amended without
the consent of the holders of the trust securities or company preferred securities to make any of the
changes required under ""Ì Certain Covenants of the Guarantor and ING LLC III Ì Issuance and
Guarantee of Preference Shares'' above or to:
‚ cure any ambiguity;
‚ correct or supplement any provision that may be defective or inconsistent with any other provision;
‚ add to the covenants, restrictions or obligations of the Guarantor;
‚ conform to any change in the Investment Company Act, the Trust Indenture Act or the rules or
regulations of either statute; or
‚ modify, eliminate or add to any provision to such extent as may be necessary or desirable, so long
as no such amendment will have a material adverse eÅect on the rights, preferences or privileges of
the holders of the trust securities or company preferred securities.
Any company preferred securities or trust securities that are beneÑcially owned at that time by the
Guarantor or any of its subsidiaries or aÇliates, other than company preferred securities that are held by
ING Trust III, will not be entitled to vote or consent and will be treated, for this purpose, as if those
securities were not outstanding, except under the circumstances described under ""Description of the Trust
Securities Ì Voting Rights'' and ""Description of the Company Securities Ì Company Preferred
Securities Ì Voting Rights'' above.
If the subordinated guarantees or the contingent guarantee are amended, the regular trustees will give
notice of the amendment in the manner indicated under ""General Information Ì Notices''. A copy of the
amended subordinated guarantees or contingent guarantee will be made available to holders as indicated in
""General Information Ì Available Documents''.
Information Concerning the Guarantee Trustee
The guarantee trustee is required to perform only those duties that are speciÑcally set forth in the
subordinated guarantees and the contingent guarantee, except when a default has occurred and is
continuing with respect to the subordinated guarantees. After a default, the guarantee trustee must exercise
the same degree of care a prudent person would exercise under the circumstances in the conduct of his or
her own aÅairs. Subject to these requirements, the guarantee trustee is under no obligation to exercise any
of the powers vested in it by the subordinated guarantees and the contingent guarantee at the request of
any holder of the company preferred securities or any holder of the trust securities, as the case may be,
unless the holder oÅers the guarantee trustee reasonable indemnity against the costs, expenses and
liabilities that might be incurred by exercising those powers.
Governing Law; Jurisdiction
The laws of the Netherlands will govern the subordinated guarantees and the contingent guarantee,
except that New York law will govern all provisions that are required to be incorporated into the
subordinated guarantees by the Trust Indenture Act, including all the rights and duties of the guarantee
trustee towards the holders of the company preferred securities and the trust securities. The subordinated
guarantees and the contingent guarantee will require that any claim or proceeding brought by a holder to
enforce the obligations of the Guarantor be exclusively brought in a court of competent jurisdiction in the
Netherlands.
62
DESCRIPTION OF THE INITIAL SUBORDINATED NOTES
The following summary sets forth the material terms and provisions of the initial subordinated notes
and is qualiÑed in its entirety by reference to the terms and provisions of the initial subordinated notes, a
form of which we have Ñled as an exhibit to the Registration Statement of which this prospectus is a part.
General
ING LLC III will use all of the proceeds from the issuance of the company preferred securities and
company common securities to purchase the initial subordinated notes from the Guarantor. The aggregate
principal amount of the purchased initial subordinated notes will be such that the aggregate interest
income paid on the initial subordinated notes on any interest payment date will be suÇcient to make the
aggregate dividend payments on the company preferred securities on a corresponding Dividend Date. ING
LLC III will purchase the initial subordinated notes contemporaneously with its issuance of the company
preferred securities.
The initial subordinated notes will consist of one or more Ñxed income instruments issued by the
Guarantor. Each initial subordinated note will mature on December 31, 2030 and will be renewable at the
discretion of the board of directors or at the direction of the Guarantor at then-prevailing market rates. On
or prior to December 31, 2010, each initial subordinated note will provide for interest payable on the last
day of June and December of each year, commencing June 30, 2001, at a rate of 8.439% per annum. The
amount of interest that will be payable for each full interest period will be computed by dividing the rate
per annum by two. If the Guarantor must pay interest for less than a full interest period, the interest for
that interest period will be computed on the actual number of days elapsed on the basis of a 360-day year
of twelve 30-day months. After December 31, 2010, each initial subordinated note will provide for interest
payable on the last day of March, June, September and December of each year at a Öoating rate of 3.60%
per annum above the three-month LIBOR for U.S. dollars. The amount of interest that will be payable for
each full or partial interest period will be computed on the basis of the actual number of days elapsed
divided by 360.
The initial subordinated notes will be general unsecured debt obligations of the Guarantor and will
rank:
‚ subordinate and junior to all senior indebtedness of the Guarantor;
‚ equally with other obligations similarly subordinated of the Guarantor; and
‚ senior to the subordinated guarantees, the contingent guarantee and the Guarantor's guarantees of
preferred shares of its subsidiaries that rank equal to the subordinated guarantees.
The initial subordinated notes will provide for acceleration if the Guarantor fails to make a payment
when due. The board of directors will make decisions with respect to enforcement of the initial
subordinated notes and actions to be taken by ING LLC III upon a default by the Guarantor thereunder.
The initial subordinated notes also will contain customary events of default, including defaults in payments
on those securities when due, defaults in the performance by the Guarantor of its other obligations under
the initial subordinated notes and certain bankruptcy, insolvency or reorganization events, subject to
customary exceptions and grace periods.
As long as the company preferred securities are not being redeemed as a result of the occurrence of
a Make Whole Tax Event or an Investment Company Event, the Guarantor may redeem the initial
subordinated notes at any time, in whole or in part, at 100% of their principal amount plus interest accrued
but unpaid to the date Ñxed for redemption and any additional amounts. If the company preferred
securities are being redeemed as a result of the occurrence of a Make Whole Tax Event or an Investment
Company Event, the Guarantor may redeem the initial subordinated notes, in whole, but not in part, at a
price equal to the greater of (i) 100% of the principal amount of the initial subordinated notes, plus
accrued interest and any additional amounts; and (ii) the Make Whole Amount (as described above).
63
Under the terms of the LLC Agreement, upon a prior notice to, and after consultation with,
Euroclear and Clearstream Banking, ING LLC III may, at the request of the Guarantor, or at the
discretion of the board of directors, reinvest the proceeds from the initial subordinated notes from time to
time in successor subordinated notes or other subordinated securities of the Guarantor or a subsidiary of
the Guarantor, so long as any such reinvestment will not result in ING LLC III being required to register
as an investment company under the Investment Company Act or cause any withholding taxes to be
imposed by the United States or any taxing authority thereof or therein with respect to payments by ING
LLC III or ING Trust III. The Guarantor will agree to cause the issuer of successor subordinated
securities, if the issuer is not the Guarantor, and ING LLC III to use their best eÅorts to maintain the
eligibility of the trust preferred securities for clearance through Euroclear and Clearstream Banking, except
that ING LLC III will not be required to take any action that would violate any provision of the LLC
Agreement.
TAXATION
The following describes the material United States federal income and the Netherlands tax
consequences of the purchase of trust preferred securities and the ownership and disposition of trust
preferred securities and company preferred securities. This discussion is the opinion of Sullivan &
Cromwell insofar as it relates to matters of United States federal income tax law and the opinion of
KPMG Meijburg & Co. insofar as it relates to matters of Dutch tax law. This discussion addresses only
the tax consequences to a person that acquires trust preferred securities on their original issue at their
original oÅering price and that holds the trust preferred securities, and any company preferred securities
received in exchange for the trust preferred securities, as capital assets. It does not address all tax
consequences that may be applicable to a beneÑcial owner of trust preferred securities, nor does it address
the tax consequences to;
‚ persons that may be subject to special treatment under United States federal income tax law, such
as tax exempt entities, certain insurance companies, broker-dealers, traders in securities that elect to
mark to market, persons liable for alternative minimum tax or persons that actually or constructively
own 10% or more of the voting stock of the Guarantor;
‚ persons that will hold trust preferred securities or company preferred securities as part of a larger
transaction, such as a ""straddle'' or a ""hedging'' or ""conversion'' transaction; or
‚ persons whose functional currency is not the United States dollar.
This discussion is based upon the Internal Revenue Code of 1986, as amended, Treasury regulations,
Internal Revenue Service rulings and pronouncements and judicial decisions as of the date hereof, all of
which are subject to change, possibly with retroactive eÅect.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX
ADVISORS AS TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF TRUST PREFERRED SECURITIES OR
COMPANY PREFERRED SECURITIES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL
OR FOREIGN TAX LAWS.
Material United States Federal Income Tax Consequences
ClassiÑcation of ING Trust III and ING LLC III
Under current law, and assuming compliance with the terms of the Declaration, ING Trust III will
be treated as a grantor trust and not as a partnership or an association taxable as a corporation for United
States federal income tax purposes. As a result, each beneÑcial owner of trust preferred securities will be
considered the beneÑcial owner of a proportionate portion of the company preferred securities held by
ING Trust III.
64
Under current law, and assuming compliance with the LLC Agreement, ING LLC III will be treated
as a partnership for United States federal income tax purposes. A partnership is not a taxable entity and
incurs no United States federal income tax liability. Instead, each partner is required to take into account
its allocable share of items of income, gain, loss and deduction of the partnership in computing its United
States federal income tax liability, regardless of whether distributions are made to the partner. This income
generally will be treated as if it were realized by the partner directly from the same source from which it
was realized by ING LLC III.
United States Holders
A beneÑcial owner of trust preferred securities is a United States Holder if it is:
‚ an individual citizen or resident of the United States;
‚ a corporation organized in or under the laws of the United States or any state thereof or the
District of Columbia;
‚ an estate the income of which is subject to United States federal income tax regardless of source;
or
‚ a trust if a United States court is able to exercise primary supervision over administration of the
trust and one or more United States persons have authority to control all substantial decisions of
the trust.
Income from Trust Preferred Securities
Under the LLC Agreement, upon the declaration, or deemed declaration, of dividends on the
company preferred securities, a like amount of ordinary income of ING LLC III will be allocated to
holders of the company preferred securities. Regardless of when dividends on the trust preferred securities
are actually paid, income allocated to the holders of the company preferred securities will be includable as
ordinary income by a United States Holder for its taxable year that includes December 31 of the calendar
year in which it is allocated, except that if the United States Holder disposes of its entire holding of trust
preferred securities and company preferred securities, the amount allocated for the calendar year of that
disposition will be includable for the United States Holder's taxable year that includes the date of that
disposition.
ING Trust III will distribute, on a semi-annual basis, an amount of cash equal to all of the income
that is allocated to it as holder of the company preferred securities. As a consequence, a United States
Holder will not recognize income in respect of trust preferred securities without receiving the
corresponding cash distribution, unless the United States Holder sells or otherwise disposes of those trust
preferred securities between the declaration date of dividends on the company preferred securities and the
corresponding record date for dividends on the trust preferred securities. In the case of a sale between
those dates, a United States Holder will recognize ordinary income in an amount equal to the dividends on
the company preferred securities, which would increase the United States Holder's basis in the trust
preferred securities and reduce the gain, or increase the loss, recognized on the sale or other disposition.
A United States Holder's allocated share of ING LLC III's income from the initial subordinated
notes will be foreign source income for purposes of determining the limitation on any allowable foreign tax
credit. The overall limitation on foreign taxes eligible for credit is calculated separately with respect to
speciÑc classes of income. For this purpose, a United States Holder's allocated share of ING LLC III's
income from the initial subordinated notes generally will constitute ""passive income'' or, in the case of
certain United States Holders, ""Ñnancial services income.'' If, with respect to any distribution to a United
States Holder, additional amounts are paid by ING LLC III, ING Trust III or the Guarantor, in any
such case as a result of withholding taxes imposed by the Netherlands or the jurisdiction of residence of
the issuer of any subordinated notes held by ING LLC III, those additional amounts will be taxable to the
United States Holder as foreign source income. However, withholding taxes in the amount of those
additional amounts will generally be treated as foreign income taxes eligible for credit against that United
65
States Holder's United States federal income tax liability, subject to generally applicable limitations and
conditions or, at the election of that United States Holder, for deduction in computing the United States
Holder's taxable income.
No portion of the income derived by a United States Holder from the trust preferred securities will be
eligible for the dividends-received deduction generally available to United States corporations in respect of
dividends received from other United States corporations.
The Guarantor believes that it is not a ""passive foreign investment company'', a PFIC, for United
States tax purposes, but this conclusion is a factual determination made annually and thus may be subject
to change. A United States Holder might be subject to special rules with respect to certain amounts
earned by ING LLC III with respect to the initial subordinated notes if the Guarantor were treated as a
PFIC for United States federal tax purposes.
Receipt of Company Preferred Securities Upon Liquidation of ING Trust III
Under certain circumstances, company preferred securities may be distributed to trust preferred
securityholders in exchange for their trust preferred securities and in liquidation of ING Trust III. Unless
the liquidation of ING Trust III occurs as a result of ING Trust III being subject to United States
federal income taxes, such a distribution to a United States Holder would be treated, for United States
federal income tax purposes, as a nontaxable event. Each United States Holder would receive an aggregate
tax basis in the company preferred securities equal to the United States Holder's aggregate tax basis in its
trust preferred securities and the United States Holder's holding period in the company preferred securities
received would include the period during which the trust preferred securities were held by the United
States Holder. If, however, the liquidation of ING Trust III were to occur because ING Trust III is
subject to United States federal income taxes, the distribution of company preferred securities to United
States Holders by ING Trust III would likely be a taxable event to each United States Holder, and a
United States Holder would recognize gain or loss as if the United States Holder had exchanged its trust
preferred securities for the company preferred securities it received. The gain or loss would be equal to the
diÅerence between the United States Holder's aggregate tax basis in its trust preferred securities
surrendered in the exchange and the aggregate fair market value of the company preferred securities
received in the exchange. If the company preferred securities are distributed to the holders of trust
preferred securities in liquidation of ING Trust III, U.S. tax information will be provided to beneÑcial
owners of trust preferred securities and to the Internal Revenue Service on Schedules K-1, rather than in
the manner described below under ""Ì Information Reporting and Backup Withholding Tax''.
Disposition of Trust Preferred Securities or Company Preferred Securities
A United States Holder will recognize gain or loss on a sale, exchange or other taxable disposition of
trust preferred securities or company preferred securities in an amount equal to the diÅerence between the
United States Holder's adjusted tax basis and the amount realized on the disposition. A United States
Holder's adjusted tax basis in trust preferred securities generally will equal the amount paid for the trust
preferred securities, increased by the amount of income allocated to the United States Holder and reduced
by the amount of any cash, and the fair market value of any other property, distributed to the United
States Holder. Any gain or loss so recognized generally will be capital gain or loss, will be long-term
capital gain or loss if the United States Holder's holding period is more than one year and will be U.S.
source income or loss for purposes of determining the limitation on any allowable foreign tax credit. In the
case of a non-corporate United States Holder, long-term capital gains are generally subject to tax at
preferential rates.
The trust preferred securities may trade at a price that does not fully reÖect the value of income that
may have been allocated to a United States Holder with respect to the United States Holder's trust
preferred securities. A United States Holder that disposes of trust preferred securities between the
declaration date of dividends on the company preferred securities and the corresponding record date for
dividends on the trust preferred securities will be required to include as ordinary income an amount equal
66
to dividends on the company preferred securities and to add the amount of that income to its adjusted tax
basis in the trust preferred securities. Accordingly, such a United States Holder will recognize a capital
loss to the extent that the selling price is less than the United States Holder's adjusted tax basis. Subject
to certain limited exceptions, capital losses cannot be applied to oÅset ordinary income for United States
federal income tax purposes.
Non-United States Holders
ING LLC III intends to operate so that it will not be engaged in a trade or business within the
United States for United States federal income tax purposes. Moreover, ING LLC III intends to invest in
securities the income from which will be either generally exempt from United States federal withholding
tax or exempt from United States federal withholding tax to the extent allocable to a Non-United States
Holder, which is a Preferred Securityholder that is not a United States person for United States federal
income tax purposes and is not otherwise subject to United States federal income tax on a net income
basis.
A Non-United States Holder will not be subject to United States federal income or withholding tax
on any allocated share of ING LLC III's income or gain, or any gain realized on the sale or exchange of
trust preferred securities, unless in the case of gains the Non-United States Holder is an individual who
was present in the United States for 183 days or more in the taxable year in which the gain is realized and
certain other conditions are met.
Information Reporting and Backup Withholding Tax
The amount of income paid or accrued on the trust preferred securities generally will be reported to
United States Holders on Internal Revenue Service Form 1099. ""Backup'' withholding at a rate of 31%
will apply to payments made within the United States to a beneÑcial owner of trust preferred securities,
other than a corporation or another exempt United States Holder, unless the beneÑcial owner of trust
preferred securities certiÑes as to its non-United States status or furnishes its taxpayer identiÑcation
number in the manner prescribed in applicable Treasury regulations, certiÑes that the number is correct,
certiÑes as to no loss of exemption from backup withholding and meets certain other conditions.
Payment of the proceeds from the disposition of trust preferred securities within the United States is
subject to information reporting and backup withholding unless the beneÑcial owner of trust preferred
securities certiÑes its non-United States status or otherwise establishes an exemption.
Payments of the proceeds from the disposition of trust preferred securities will not be subject to
information reporting or backup withholding if made to or through a foreign oÇce of a broker, except that
information reporting may apply, unless the beneÑcial owner of trust preferred securities certiÑes its nonUnited States status or otherwise establishes an exemption, if the broker is:
‚ a United States person;
‚ a controlled foreign corporation for United States tax purposes;
‚ a foreign person 50% or more of whose gross income is eÅectively connected with a United States
trade or business for a speciÑed three-year period; or
‚ with respect to payments made after December 31, 2000, a foreign partnership, if at any time
during its tax year, one or more of its partners are United States persons, as deÑned in United
States Treasury regulations, who in the aggregate hold more than 50% of the income or capital
interest in the partnership or if, at any time during its tax year, the foreign partnership is engaged
in a United States trade or business.
Any amounts withheld from a beneÑcial owner of trust preferred securities under the backup
withholding rules will be allowed as a refund or as a credit against the beneÑcial owner's United States
federal income tax liability, so long as the required information is furnished to the Internal Revenue
Service.
67
Netherlands Taxation
The following is a general summary of the Netherlands taxes applicable as at the date hereof in
relation to payments made under the trust preferred securities. It is not exhaustive and Holders who are in
doubt as to their tax position should consult their professional advisers.
In the following, it is assumed that ING LLC III and ING Trust III are not resident in the
Netherlands for Dutch tax purposes.
No Dutch withholding tax is payable in respect of:
‚ interest payments by the Guarantor on the initial subordinated notes; and
‚ dividend payments by ING LLC III on the company preferred securities.
ING Trust III will not be required to deduct or withhold any Dutch taxes, levies, imports or other
charges from any payment by ING Trust III due or to become due in respect of the trust preferred
securities.
A Holder of a trust preferred security will not be subject to Netherlands taxes on income from or
gains on the disposition of the trust preferred security unless:
‚ the Holder is, or is deemed to be, a resident of the Netherlands;
‚ the Holder owns an enterprise or part of an enterprise which is carried on through a permanent
establishment or permanent representative in the Netherlands to which or to whom the trust
preferred security is attributable; or
‚ in the event that the ING LLC III and/or ING Trust III would be considered a transparent entity
for Dutch tax purposes, if the Holder has a substantial interest or deemed substantial interest in the
share capital of the Guarantor and such an interest does not belong to the business assets of an
enterprise.
A Holder of a trust preferred security will not be subject to Netherlands net wealth tax.
A Holder of a trust preferred security will not be subject to taxation under the Income Tax Act 2001
(eÅective January 1, 2001), unless:
‚ the Holder is an individual and is, or is deemed to be, resident in the Netherlands; or
‚ such a trust preferred security is attributed to an enterprise or part thereof which is carried on
through a permanent establishment or a permanent representative in the Netherlands.
No gift, estate or inheritance taxes will arise in the Netherlands on the transfer of a trust preferred
security by way of gift, or on the death of a Holder, unless:
‚ the Holder is, or is deemed to be, a resident of the Netherlands;
‚ the transfer is considered an inheritance or a gift made by or on behalf of a person who, at the time
of the gift or death, is, or is deemed to be, a resident of the Netherlands;
‚ the donor or deceased owns an enterprise or part of an enterprise, which is carried on through a
permanent establishment or permanent representative in the Netherlands, to which or to whom the
trust preferred security is attributable; or
‚ the donor or the deceased has an interest, other than as a shareholder, in an enterprise or part of an
enterprise, which is carried on through a permanent establishment or permanent representative in
the Netherlands, to which or to whom the trust preferred security is attributable.
A Holder of a trust preferred security will not become, or deemed to be, resident in the Netherlands
by sole reason of holding such a trust preferred security.
68
ERISA CONSIDERATIONS
A Ñduciary of a pension, proÑt-sharing or other employee beneÑt plan subject to the Employee
Retirement Income Security Act of 1974, as amended, which we refer to as ERISA, should consider the
Ñduciary standards of ERISA in the context of the plan's particular circumstances before authorizing an
investment in the trust preferred securities. Among other factors, the Ñduciary should consider whether the
investment would satisfy the prudence and diversiÑcation requirements of ERISA and would be consistent
with the documents and instruments governing the plan.
Section 406 of ERISA and Section 4975 of the Internal Revenue Code prohibit an employee beneÑt
plan, as well as individual retirement accounts and Keogh plans subject to Section 4975 of the Internal
Revenue Code, from engaging in certain transactions involving ""plan assets'' with persons who are ""parties
in interest'' under ERISA or ""disqualiÑed persons'' under the Internal Revenue Code with respect to the
plan. A violation of these ""prohibited transaction'' rules may result in excise tax or other liabilities under
ERISA and Section 4975 of the Code for such persons, unless exemptive relief is available under an
applicable statutory or administrative exemption. Therefore, a Ñduciary of an employee beneÑt plan should
also consider whether an investment in the trust preferred securities might constitute or give rise to a
prohibited transaction under ERISA and the Internal Revenue Code. Employee beneÑt plans which are
governmental plans (as deÑned in Section 3(32) of ERISA), certain church plans (as deÑned in
Section 3(33) of ERISA), and foreign plans (as described in Section 4(b)(4) of ERISA) generally are
not subject to the requirements of ERISA or Section 4975 of the Code.
The Guarantor and certain of its subsidiaries could be a party in interest or disqualiÑed person with
respect to an employee beneÑt plan. Prohibited transactions within the meaning of ERISA or the Code
would arise, for example, if the notes are acquired by or with the assets of a U.S. pension or other
employee beneÑt plan with respect to which the Guarantor or any of its aÇliates is a service provider,
unless the notes are acquired pursuant to one of the following prohibited transactions class exemptions
issued by the U.S. Department of Labor:
‚ Prohibited Transaction Exemption 95-60 (for certain transactions involving insurance company
general accounts);
‚ Prohibited Transaction Exemption 91-38 (for certain transactions involving bank investment funds);
‚ Prohibited Transaction Exemption 90-1 (for certain transactions involving insurance company
separate accounts); and
‚ Prohibited Transaction Exemption 84-14 (for certain transactions determined by independent
qualiÑed asset managers).
A purchaser or holder of trust preferred securities or any interest therein will be deemed to have
represented by its purchase and holding thereof that it either (a) is not an employee beneÑt plan and is
not purchasing such securities on behalf of or with ""plan assets'' of any employee beneÑt plan or (b) is
eligible for the exemptive relief available under Prohibited Transaction Exemption 96-23, 95-60, 91-38,
90-1 or 84-14 with respect to such purchase and holding.
Due to the complexity of these rules and the penalties imposed upon persons involved in non-exempt
prohibited transactions, it is particularly important that fiduciaries or other persons considering the
purchase of trust preferred securities on behalf of or with ""plan assets'' of any employee beneÑt plan
consult with their counsel regarding the consequences under ERISA and the Internal Revenue Code of
the acquisition of trust preferred securities and the availability of exemptive relief under Prohibited
Transaction Exemption 96-23, 95-60, 91-38, 90-1 or 84-14.
69
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting Agreement, dated December 12,
2000, ING Trust III has agreed to sell to each of the underwriters named below, and each of the
underwriters, for whom Goldman, Sachs & Co., ING Barings LLC and Morgan Stanley & Co.
Incorporated are acting as representatives, has severally agreed to purchase the number of trust preferred
securities set forth opposite its name below. In the Underwriting Agreement, the several underwriters have
agreed, subject to the terms and conditions set forth in the Underwriting Agreement, to purchase all the
trust preferred securities oÅered hereby if any of the trust preferred securities are purchased. If an
underwriter defaults, the Underwriting Agreement provides that, in certain circumstances, the purchase
commitments of the non-defaulting underwriters may be increased or the Underwriting Agreement may be
terminated.
Number of Trust
Preferred Securities
Underwriters
Goldman, Sachs & Co. ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Morgan Stanley & Co. Incorporated ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
ING Barings LLC ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Lehman Brothers Inc. ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Merrill Lynch, Pierce, Fenner & Smith Incorporated ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Salomon Smith Barney Inc. ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
577,500
577,500
255,000
30,000
30,000
30,000
1,500,000
The underwriters propose initially to oÅer the trust preferred securities to the public at the initial
public oÅering price set forth on the cover page of this prospectus, and to certain dealers at that price less
a concession not in excess of $6.00 per trust preferred security. The underwriters may allow, and those
dealers may reallow, a concession not in excess of $2.50 per trust preferred security to certain other
dealers. After the trust preferred securities are released for sale to the public, the oÅering price and other
selling terms may from time to time be varied by the representatives.
The Underwriting Agreement provides that ING Trust III will pay as compensation to the
underwriters an amount in immediately available funds of $10.00 per trust preferred security, or
$15,000,000 in the aggregate, for the accounts of the several underwriters. The underwriters have agreed to
bear or to reimburse the Guarantor, ING Trust III or ING LLC III for certain expenses of issuing and
distributing the trust preferred securities.
During a period of 30 days from the date of the prospectus, neither ING Trust III nor ING LLC III
nor any other subsidiary of the Guarantor that is similar to ING Trust III or ING LLC III will, without
the prior written consent of the representatives, directly or indirectly, sell, oÅer to sell, grant any option for
sale of, or otherwise dispose of, any trust preferred securities or any company preferred securities or any
security convertible into or exchangeable into or exercisable for trust preferred securities or company
preferred securities.
Application has been made to list the trust preferred securities on the Luxembourg Stock Exchange.
In connection with that application, a legal notice relating to the issue of the trust preferred securities and
a copy of the Declaration will be deposited with the Registrar of the District Court of Luxembourg
(GreÇer en Chef du Tribunal d'Arrondissement afi Luxembourg), where those documents may be
examined and copies obtained.
Each underwriter has agreed that:
‚ it has not oÅered or sold and before the date six months after the date of issue of the trust
preferred securities will not oÅer or sell any trust preferred securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments, as principal or agent, for the purposes of their businesses or otherwise
in circumstances that have not resulted and will not result in an oÅer to the public in the United
Kingdom within the meaning of the Public OÅers of Securities Regulations 1995;
‚ it has complied and will comply with all the applicable provisions of the Financial Services Act
1986 with respect to anything done by it in relation to the trust preferred securities in, from or
otherwise involving the United Kingdom;
70
‚ it has only issued or passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the trust preferred securities to a person who is of a
kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996, or is a person to whom the document may otherwise lawfully be issued
or passed on; and
‚ as long as this prospectus has not been (i) approved in writing within a period of six months
following the date of this oÅering by the appropriate Luxembourg authority within the meaning of
section 20 or 21 of EC Directive 89-298 EEC of 17 April 1989 pursuant to and in accordance with
section 3 of the Securities Market Decree 1995 (Besluit toezicht eÅectenverkeer 1995) and (ii) Ñled
(together with such approval) with the Netherlands Securities Board (Stichting Toezicht
EÅectenverkeer) and made generally available in the Netherlands, any trust preferred securities
(including, for the purpose of this paragraph, the subordinated guarantees) in the Netherlands as
part of their initial distribution, shall be oÅered or sold exclusively to individuals or legal entities
situated in the Netherlands who or which trade or invest in securities in the conduct of a business
or profession (banks, securities Ñrms, insurance companies, pension funds, investment institutions,
central governments, large international and supranational organizations, other institutional investors
and other parties, including treasury departments of commercial enterprises, which are regularly
active in the Ñnancial markets in a professional manner), in which case it must be made clear both
upon making the oÅer and in any documents or advertisements in which a forthcoming oÅering of
trust preferred securities is publicly announced that such oÅer is exclusively made to the said
individuals or legal entities and a copy of this prospectus must be submitted to the Netherlands
Securities Board before the oÅering date.
Before the oÅering, there has been no public market for the trust preferred securities. In order to
meet one of the requirements for listing the trust preferred securities on the New York Stock Exchange,
the underwriters will undertake to sell lots of 100 or more trust preferred securities to a minimum of 400
beneÑcial holders.
Pursuant to Rule 2810 of the NASD, no NASD member will execute transactions in any
discretionary account without the prior speciÑc written approval of the customer.
ING Trust III, ING LLC III and the Guarantor have agreed to indemnify the underwriters against,
or contribute to payments that the underwriters may be required to make in respect of, certain liabilities,
including liabilities under the Securities Act of 1933.
The underwriters and/or their aÇliates have provided investment banking, commercial banking and
Ñnancial advisory services to the Guarantor or its aÇliates in the past, for which they have received
customary compensation and expense reimbursement, and may do so again in the future.
VALIDITY OF THE SECURITIES
The validity of the trust preferred securities and the company preferred securities will be passed upon
for ING Trust III, ING LLC III and the Guarantor by Richards, Layton & Finger, P.A., Wilmington,
Delaware. The validity of the subordinated guarantees and the contingent guarantee, to the extent
governed by Dutch law, will be passed upon for the Guarantor by De Brauw Blackstone Westbroek N.V.,
Amsterdam, the Netherlands. Certain Dutch tax matters will be passed upon for the Guarantor by KPMG
Meijburg & Co., Amsterdam, the Netherlands. Certain legal matters will be passed upon for the
Guarantor by Sullivan & Cromwell, New York, New York. Certain legal matters will be passed upon on
behalf of the underwriters by Davis Polk & Wardwell, New York, New York.
EXPERTS
The Consolidated Financial Statements of the Group for each of the Ñve years ended December 31,
1999 incorporated by reference into this prospectus and the Registration Statement have been audited by
Ernst & Young Accountants, independent auditors, as set forth in their report thereon incorporated by
reference herein which is based in part on the report of KPMG Accountants N.V., independent auditors,
that is incorporated by reference herein, which, only insofar as it relates to 1999 and 1998, is based upon
71
the report of other auditors. The Ñnancial statements referred to above are included in reliance upon such
reports given on the authority of such Ñrms as experts in auditing and accounting.
GENERAL INFORMATION
Listing
Application has been made to list the trust preferred securities on the Luxembourg Stock Exchange.
If approved for listing on the Luxembourg Stock Exchange, the trust preferred securities will be considered
debt securities for the purposes of the Luxembourg Stock Exchange rules and regulations and will appear
in the OÇcial Price List of the Luxembourg Stock Exchange under the heading ""Emprunts Ordinaires.''
The LLC Agreement and CertiÑcate of Formation of ING LLC III, the Declaration and CertiÑcate of
Trust of ING Trust III and the legal notice relating to the issue of the Trust Preferred Securities will be
deposited before listing with the Registrar of the District Court in Luxembourg (GreÇer en Chef du
Tribunal d'Arrondissement afi Luxembourg), where these documents are available for inspection and where
copies of these documents can be obtained upon request. As long as the trust preferred securities are listed
on the Luxembourg Stock Exchange, an agent for making payments on, and transfers of, trust preferred
securities will be maintained in Luxembourg.
Consents
ING Trust III has obtained all necessary consents, approvals and authorizations in connection with
the issue of the trust preferred securities. The issue of the trust preferred securities was authorized on
November 22, 2000. The issue of the subordinated guarantees and the contingent guarantee was authorized
by the Guarantor on November 21, 2000.
No Material Change
Except as disclosed in this prospectus, there has been no material adverse change in the Ñnancial
position or prospects of the Guarantor since June 30, 2000 and no material adverse change in the Ñnancial
position of ING Trust III or ING LLC III since their creation and formation on October 23, 2000 and
October 2, 2000, respectively.
Litigation
Group companies are involved in litigation and arbitration proceedings in the Netherlands and in a
number of foreign jurisdictions, including the United States, involving claims by and against them which
arise in the ordinary course of their businesses, including in connection with their activities as insurers,
lenders, employers, investors and taxpayers. In some of these proceedings, very large or indeterminate
amounts are sought, including punitive and other damages. While it is not feasible to predict or determine
the ultimate outcome of all pending or threatened legal and regulatory proceedings, management does not
believe that their outcome will have a material adverse eÅect on the Group's Ñnancial position or result of
operations.
As of the date of this prospectus, ING Trust III and ING LLC III are not involved in any litigation
or arbitration proceedings in the United States.
Auditors
The Consolidated Financial Statements of the Guarantor for each of the Ñve years ended
December 31, 1999 have been prepared in accordance with Dutch GAAP as implemented in the
Netherlands and have been audited by Ernst & Young Accountants, as set forth in their report thereon
incorporated by reference herein which is based in part on the report of KPMG Accountants N.V. that is
incorporated by reference herein, which, only insofar as it relates to 1999 and 1998, is based upon the
report of other auditors.
Available Documents
Copies of the following documents may be obtained free of charge at the speciÑed oÇce of the paying
and transfer agent in Luxembourg:
‚ the Articles of Association of the Guarantor;
72
‚ the LLC Agreement and CertiÑcate of Formation of ING LLC III;
‚ the Declaration and CertiÑcate of Trust of ING Trust III;
‚ the Underwriting Agreement;
‚ the form of initial subordinated notes;
‚ the subordinated guarantees and the contingent guarantee; and
‚ the services agreement.
In addition, copies of the most recent Consolidated Financial Statements of the Guarantor on
Form 20-F for the preceding Ñnancial year, and any interim quarterly Ñnancial statements published by the
Guarantor on Form 6-K, will be available at no cost at the speciÑed oÇce of the paying and transfer agent
in Luxembourg for as long as the trust preferred securities are listed on the Luxembourg Stock Exchange.
Clearing Systems and Settlement
The trust preferred securities have been accepted for clearance through the facilities of Euroclear and
Clearstream Banking. The ISIN number for the trust preferred securities is US44978NAA37, the CUSIP
number is 44978N AA3 and the Common Code is 012185316.
Settlement instructions relating to transfer of the trust preferred securities within Euroclear and
Clearstream Banking should be expressed in the aggregate liquidation amount to be transferred (e.g.,
$10,000,000) rather than units (e.g., 400,000 units).
Notices
All notices will be deemed to have been given upon:
‚ the mailing by Ñrst class mail, postage prepaid, of those notices to holders of the trust preferred
securities at their registered addresses as recorded in the register of holders of trust preferred
securities; and
‚ so long as the trust preferred securities are listed on the Luxembourg Stock Exchange and it is
required by the rules of the Luxembourg Stock Exchange, publication of the notice to the holders
of the trust preferred securities in English in a leading newspaper having general circulation in
Luxembourg, which is expected to be the Luxemburger Wort, or, if publication in that type of
newspaper is not practicable, in one other leading English-language daily newspaper with general
circulation in Europe that is published on each business day in morning editions, whether or not it
is published in Saturday, Sunday or holiday editions.
73
PRINCIPAL EXECUTIVE OFFICE OF THE GUARANTOR
ING Groep N.V.
Strawinskylaan 2631
P.O. Box 810
1000 AV Amsterdam
The Netherlands
PRINCIPAL EXECUTIVE OFFICE OF ING LLC III
ING Capital Funding III LLC
c/o ING (U.S.) Financial Services, Inc.
55 Park Avenue Plaza
New York, New York 10055
U.S.A.
PRINCIPAL EXECUTIVE OFFICE OF ING TRUST III
ING Capital Funding Trust III
c/o ING (U.S.) Financial Services, Inc.
55 Park Avenue Plaza
New York, New York 10055
U.S.A.
LEGAL ADVISORS TO THE REGISTRANTS
As to U.S. federal and New York law:
As to Dutch civil and corporate law:
Sullivan & Cromwell
De Brauw Blackstone Westbroek N.V.
125 Broad Street
Tripolis 300
New York, New York 10004
Burgerweeshuispad 301
U.S.A.
1076 HR Amsterdam
The Netherlands
As to Delaware law:
As to Dutch tax law:
Richards, Layton & Finger, P.A.
KPMG Meijburg & Co.
One Rodney Square
P.O. Box 74600
P.O. Box 551
1070 DE Amsterdam
Wilmington, Delaware 19899
The Netherlands
U.S.A.
LEGAL ADVISOR TO THE UNDERWRITERS
As to U.S. federal and New York law:
Davis Polk & Wardwell
99 Gresham Street
London EC2V 7NG
Great Britain
AUDITORS
Ernst & Young Accountants
Drentestraat 20
P.O. Box 7883
1008 AB Amsterdam
The Netherlands
PROPERTY TRUSTEE, PRINCIPAL PAYING AGENT, TRANSFER AGENT AND REGISTRAR
The Bank of New York
One Wall Street
New York, New York 10286
U.S.A.
LUXEMBOURG LISTING AGENT, PAYING AGENT AND TRANSFER AGENT
Crπedit Europπeen S.A. Luxembourg
52, Route D'Esch
L-2965 Luxembourg
Luxembourg
Through and including January 6, 2000 (the 25th day after the date of this prospectus), all dealers
eÅecting transactions in these securities, whether or not participating in this oÅering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
1,500,000 Trust Preferred Securities
ING CAPITAL FUNDING TRUST III
8.439% Noncumulative Guaranteed Trust Preferred Securities
(Liquidation Amount U.S. $1,000 per Trust Preferred Security)
guaranteed to the extent described in this prospectus by
ING
GROUP
ING Groep N.V.
PROSPECTUS
Goldman, Sachs & Co.
Lehman Brothers
ING Barings
Morgan Stanley Dean Witter
Merrill Lynch & Co.
Salomon Smith Barney
December 12, 2000