Description
of Notes
This
section describes the general terms and provisions of the notes. The particular terms of the notes sold under any pricing supplement
will be described in that pricing supplement and any applicable product supplement. Unless the applicable pricing supplement or
any applicable product supplement specifies otherwise, the terms and conditions stated herein will apply to each note.
Unless
otherwise specified in the applicable pricing supplement, the notes will be issued as a series under an indenture dated as of
April 25, 2018 among us, as issuer, Wells Fargo & Company, as guarantor, and Citibank, N.A., as trustee, referred to herein
as the “indenture.” We have summarized the material terms and provisions of the indenture herein and in the
accompanying prospectus. We have also filed the indenture as an exhibit to the registration statement of which the accompanying
prospectus is a part. You should read the indenture for additional information before you buy any notes. The summary that follows
includes references to section numbers of the indenture so that you can more easily locate these provisions.
General
The
notes will be our direct unsecured obligations and will rank equally with all of our other unsecured unsubordinated debt. Payment
on the notes is fully and unconditionally guaranteed by the Guarantor, Wells Fargo & Company, as provided in the indenture
(the “guarantee”).
The
indenture does not limit the amount of debt securities that we may issue. References herein to “debt securities”
or to a “debt security” refer to the debt securities we may issue from time to time under the indenture. Debt
securities issued under the indenture will be issued as part of a series that has been established by us under the indenture.
(Section 301) The notes will constitute one series of debt securities under the indenture.
The
assets of the Guarantor consist primarily of equity in its subsidiaries, and the Guarantor is a separate and distinct legal entity
from its subsidiaries. As a result, the Guarantor’s ability to address claims of holders of the notes against the Guarantor
under the guarantee depends on its receipt of dividends, loan payments and other funds from its subsidiaries. Various federal
and state statutes and regulations limit the amount of dividends that banking and other subsidiaries may pay to the Guarantor
without regulatory approval. In addition, if any of the Guarantor’s subsidiaries becomes insolvent, the direct creditors
of that subsidiary will have a prior claim on its assets. The rights of the Guarantor and the rights of its creditors, including
your rights under the guarantee, will be subject to that prior claim unless the Guarantor is also a direct creditor of that subsidiary.
This subordination of creditors of a parent company to prior claims of creditors of its subsidiaries is commonly referred to as
structural subordination.
Holders
of our notes are our direct creditors, as well as direct creditors of the Guarantor under the related guarantee. As a finance
subsidiary, we have no independent operations beyond the issuance and administration of our securities and will have no independent
assets available for distributions to holders of the notes if they make claims in respect of the notes in a bankruptcy, resolution
or similar proceeding. Accordingly, any recoveries by such holders will be limited to those available under the related guarantee
by the Guarantor and that guarantee will rank pari passu with all other unsecured, unsubordinated obligations
of the Guarantor. Holders of the notes should accordingly assume that in any such proceedings they would not have any priority
over and should be treated pari passu with the claims of other unsecured, unsubordinated creditors of the Guarantor,
including holders of debt securities issued by the Guarantor.
We
may, from time to time, without the consent of the holders of the notes, issue additional notes having the same terms as previously
issued notes (other than the issue date, the date, if any, that interest begins to accrue and the price to public, which may vary)
that will form a single issue with the previously issued notes.
Unless
any applicable product supplement or the applicable pricing supplement states otherwise:
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we
will issue the notes at 100% of their principal or face amount;
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holders
will not be able to elect to have the notes repaid before their stated maturity;
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holders
will not be able to elect to renew the notes beyond their stated maturity;
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we
will not be able to redeem the notes before their stated maturity;
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we
will not be able to elect to extend the maturity of the notes beyond their stated maturity;
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we
will issue the notes in U.S. dollars and amounts payable with respect to the notes will
be made in U.S. dollars;
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we
will issue the notes in fully registered form and in authorized denominations, which
will be $1,000 or any amount in excess of $1,000 which is an integral multiple of $1,000,
and each owner of a beneficial interest in a note will be required to hold such beneficial
interest in an authorized denomination;
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we
will issue the notes as global securities registered in the name of a depositary ( “global
securities” are debt securities that we issue in accordance with the indenture
to represent all or part of a series of debt securities and a “depositary”
is the depositary for the global securities issued under the indenture and, unless provided
otherwise in the applicable pricing supplement, means The Depository Trust Company ( “DTC”));
and
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we
will not list the notes on any securities exchange or automated quotation system.
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Any
applicable product supplement or the applicable pricing supplement relating to each note will describe the following terms:
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if
the note is being issued at a price other than 100% of its principal or face amount,
its issue price;
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the
principal or face amount of the note;
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the
date on which the note will be issued;
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the
date on which the note will mature;
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if
the amount payable on the note will be determined by reference to one or more equity-,
commodity- or currency-based indices, exchange traded funds, securities, commodities,
currencies, statistical measures of economic or financial performance, or a basket comprised
of any of the foregoing, or any other measure (referred to herein as a “market
measure”), the method by which the amount payable will be determined and information
about such market measure or measures;
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if
the note will bear interest at a fixed or floating rate or at a rate determined by reference
to a market measure:
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the
interest rate on the note or the method by which the interest rate may be determined;
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the
date from which interest will accrue;
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the
interest payment dates for the note; and
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the
first interest payment date;
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the
identity of the calculation agent for the note (the “calculation agent”)
if other than Wells Fargo Securities, LLC, one of our affiliates;
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the
identity of the security registrar and paying agent for the note if other than Wells
Fargo Bank, N.A., one of our affiliates ( “Wells Fargo Bank”);
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any
special tax implications of the note;
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if
the note may be redeemed at our option or repaid at a holder’s option, the provisions
relating to redemption of the note or repayment of the note;
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if
the note may be extended at our option or renewed at a holder’s option, the provisions
relating to extension of the note or renewal of the note; and
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any
other terms of the note not inconsistent with the provisions of the indenture.
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When
we use the term “holder” in this prospectus supplement with respect to a registered debt security, we mean
the person in whose name such debt security is registered in the security register. (Section 101)
Exchange
and Transfer
Any
debt securities of a series can be exchanged for other debt securities of that series so long as the other debt securities are
denominated in authorized denominations and have the same aggregate principal or face amount and same terms as the debt securities
that were surrendered for exchange. The notes may be presented for registration of transfer, duly endorsed or accompanied by a
satisfactory written instrument of transfer, at the office or agency maintained by us for that purpose in Minneapolis, Minnesota
or any other place of payment. However, holders of global securities may transfer and exchange global securities only in the manner
and to the extent set forth under “Book-Entry, Delivery and Form” in the accompanying prospectus. There will be no
service charge for any registration of transfer or exchange of the notes, but we may require holders to pay any tax or other governmental
charge payable in connection with a transfer or exchange of the notes. (Sections 305, 1002) If the applicable pricing supplement
or any applicable product supplement refers to any office or agency, in addition to the security registrar, initially designated
by us where holders can surrender the notes for registration of transfer or exchange, we may at any time rescind the designation
of any such office or agency or approve a change in the location. However, we will be required to maintain an office or agency
in each place of payment for that series. (Section 1002)
We
will not be required to:
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register
the transfer of or exchange notes to be redeemed for a period of 15 calendar days preceding
the mailing of the relevant notice of redemption; or
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register
the transfer of or exchange any registered note selected for redemption, in whole or
in part, except the unredeemed or unpaid portion of that registered note being redeemed
in part. (Section 305)
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Interest
and Principal Payments
Payments.
Holders may present notes for payment of principal, premium, if any, and interest, if any, register the transfer of the notes
and exchange the notes at the agency in Minneapolis, Minnesota maintained by us for that purpose. On the date of this prospectus
supplement, the paying agent for the debt securities issued under the indenture is Wells Fargo Bank, acting through its corporate
trust office at 600 South 4th Street, Minneapolis, MN 55415. We refer to Wells Fargo Bank, acting in this capacity
for the notes, as the “paying agent.”
When
we refer to the payment of “principal” in this prospectus supplement in the context of the amount payable at stated
maturity or earlier redemption or repayment of a note whose payment is linked to the performance of a market measure, we are referring
to the amount payable on such note at stated maturity or earlier redemption or repayment, as specified in the applicable pricing
supplement, other than any interest payable at such time. Such amount may be greater than, equal to or less than the stated principal
or face amount of such note at issuance.
Recipients
of Payments. The paying agent will pay interest, if any, to the person in whose name the note is registered at the close of
business on the applicable record date. Unless otherwise specified in the applicable pricing supplement, the “record
date” for any interest payment date is (a) in the case of book-entry notes, the date one business day prior to
that interest payment date and (b) in the case of certificated notes, the date 15 calendar days prior to that interest payment
date, whether or not that day is a business day. However, upon maturity, redemption or repayment, the paying agent will pay any
interest due to the person to whom it pays the principal of the note. The paying agent will make the payment on the date of maturity,
redemption or repayment, whether or not that date is an
interest payment date. The paying agent will make the initial interest
payment on a note on the first interest payment date falling at least 15 calendar days after the date of issuance. An “interest
payment date” for any note means a date on which, under the terms of that note, regularly scheduled interest is payable.
Book-Entry
Notes. The paying agent will make payments of principal, premium, if any, and interest, if any, to the account of DTC or other
depositary specified in the applicable pricing supplement or any applicable product supplement, as holder of book-entry notes,
by wire transfer of immediately available funds. We expect that the depositary, upon receipt of any payment, will immediately
credit its participants’ accounts in amounts proportionate to their respective beneficial interests in the book-entry notes
as shown on the records of the depositary. We also expect that payments by the depositary’s participants to owners of beneficial
interests in the book-entry notes will be governed by standing customer instructions and customary practices and will be the responsibility
of those participants.
Certificated
Notes. Except as indicated below for payments of interest at maturity, redemption or repayment, the paying agent will make
U.S. dollar payments of interest either:
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by
check mailed to the address of the person entitled to payment as shown on the security
register; or
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by
wire transfer to an account designated by a holder, if the holder has given written notice
not later than 10 calendar days prior to the applicable interest payment date. (Section 307)
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U.S.
dollar payments of principal, premium, if any, and interest, if any, upon maturity, redemption or repayment on a note will be
made in immediately available funds against presentation and surrender of the note at the office of the paying agent.
Unavailability
of Foreign Currency. If the applicable pricing supplement specifies a currency other than U.S. dollars, the relevant specified
currency may not be available to us for making payments of principal of, premium, if any, or interest, if any, on any note. This
could occur due to the imposition of exchange controls or other circumstances beyond our control or if the specified currency
is no longer used by the government of the country issuing that currency or by public institutions within the international banking
community for the settlement of transactions. If the specified currency is unavailable, we may satisfy our obligations to holders
of the notes by making those payments on the date of payment in U.S. dollars on the basis of the noon dollar buying rate in New
York, New York for cable transfers of the currency or currencies in which a payment on any note was to be made, published by the
Federal Reserve Bank of New York, which we refer to as the “market exchange rate.” If that rate of exchange
is not then available or is not published for a particular payment currency, the market exchange rate will be based on the highest
bid quotation in New York, New York received by the exchange rate agent at approximately 11:00 a.m., New York City time,
on the second business day preceding the applicable payment date from three recognized foreign exchange dealers for the purchase
by the quoting dealer:
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of
the specified currency for U.S. dollars for settlement on the payment date;
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in
the aggregate amount of the specified currency payable to those holders or beneficial
owners of notes; and
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at
which the applicable dealer commits to execute a contract.
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One
of the dealers providing quotations may be the exchange rate agent appointed by us unless the exchange rate agent is our affiliate.
If those bid quotations are not available, the exchange rate agent will determine the market exchange rate at its sole discretion.
These
provisions do not apply if a specified currency is unavailable because it has been replaced by the euro. Unless otherwise specified
in the applicable pricing supplement, if the euro has been substituted for a specified currency, the notes will be redenominated
in euros on a date determined by us, with a principal amount for each note equal to the principal amount of that note in the specified
currency, converted into euros at the established rate (as defined below); provided that, if we determine after consultation with
the paying agent that the then-current market
practice in respect of redenomination into euros of internationally offered securities
is different from the provisions specified above, such provisions will be deemed to be amended so as to comply with such market
practice and we will promptly notify the trustee and the paying agent of such deemed amendment. The “established rate”
means the rate for the conversion of the specified currency (including compliance with rules relating to rounding in accordance
with applicable European Union regulations) into euros established by the Council of European Union pursuant to the Treaty establishing
the European Communities, as amended by the Treaty on European Union. We will give 30 days’ notice of the redenomination
date to the paying agent and the trustee.
Any
payment made in U.S. dollars or in euros as described above where the required payment is in an unavailable specified currency
will not constitute an event of default under the indenture.
Certain
Definitions. Unless otherwise specified in the applicable pricing supplement or any applicable product supplement, the following
are definitions of certain terms we use in this prospectus supplement when discussing principal and interest payments on the notes:
A
“business day” means any day, other than a Saturday or Sunday, (i) that is neither a legal holiday nor
a day on which banking institutions are authorized or required by law or regulation to close (a) in New York, New York,
(b) for notes denominated in a specified currency other than U.S. dollars, euros or Australian dollars, in the principal
financial center of the country of the specified currency, or (c) for notes denominated in Australian dollars, in Sydney,
Australia, and (ii) for notes denominated in euros, that is also a TARGET Settlement Day.
“Euro
LIBOR notes” means LIBOR notes for which the index currency is euros.
“London
banking day” means any day on which commercial banks and foreign exchange markets settle payments in London.
“TARGET
Settlement Day” means any day on which the Trans-European Automated Realtime Gross Settlement Express Transfer System
is open.
“U.S.
government securities business day” means any day except for a Saturday, Sunday or a day on which the Securities Industry
and Financial Markets Association recommends that the fixed income department of its members be closed for the entire day for
purposes of trading in U.S. government securities.
References
in this prospectus supplement to “U.S. dollar,” or “U.S.$” or “$” are
to the currency of the United States of America. References in this prospectus supplement to “euro” or “euros”
are to the single currency introduced at the commencement of the third stage of the European Economic and Monetary Union pursuant
to the Treaty establishing the European Community, as amended. References in this prospectus supplement to “£,”
“pounds sterling” or “sterling” are to the currency of the United Kingdom.
Fixed
Rate Notes
We
may issue notes that bear interest at a fixed rate ( “fixed rate notes”). Each fixed rate note will bear interest
from the date of issuance at the annual rate specified in the applicable pricing supplement until the principal is paid or made
available for payment. Unless otherwise specified in the applicable pricing supplement or any applicable product supplement, the
following provisions will apply to fixed rate notes offered pursuant to this prospectus supplement.
How
Interest Is Calculated. Interest on fixed rate notes will be computed on the basis of a 360-day year of twelve 30-day months.
How
Interest Accrues. Interest on fixed rate notes will accrue from and including the most recent interest payment date to which
interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from and including the issue
date or any other date specified in the applicable pricing supplement on which interest begins to accrue. Interest will accrue
to but excluding the next interest payment date or, if earlier, the date on
which the principal has been paid or duly made available
for payment, except as described below under “—If A Payment Date Is Not A Business Day.”
When
Interest Is Paid. Payments of interest on fixed rate notes will be made on the interest payment dates specified in the applicable
pricing supplement. However, unless otherwise specified in the applicable pricing supplement or any applicable product supplement,
if the first interest payment date is less than 15 calendar days after the issue date, interest will not be paid on the first
interest payment date, but will be paid on the second interest payment date.
Amount
Of Interest Payable. Interest payments for fixed rate notes will include accrued interest from and including the issue date
or from and including the last interest payment date in respect of which interest has been paid or provided for, as the case may
be, to but excluding the relevant interest payment date or date of maturity or earlier redemption or repayment, as the case may
be.
If
A Payment Date Is Not A Business Day. If any scheduled interest payment date is not a business day, we will pay interest on
the next business day, but interest on that payment will not accrue during the period from and after the scheduled interest payment
date. If the scheduled maturity date or date of redemption or repayment is not a business day, we may pay interest, if any, and
principal and premium, if any, on the next business day, but interest on that payment will not accrue during the period from and
after the scheduled maturity date or date of redemption or repayment.
Floating
Rate Notes
We
may issue notes that bear interest at a floating rate determined by reference to a base rate as discussed below ( “floating
rate notes”). Unless otherwise specified in the applicable pricing supplement or any applicable product supplement,
the following provisions will apply to floating rate notes offered pursuant to this prospectus supplement.
Each
floating rate note will mature on the date specified in the applicable pricing supplement.
Each
floating rate note will bear interest at a floating rate determined by reference to an interest rate or interest rate formula,
which we refer to as the “base rate.” The base rate may be one or more of the following:
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the
commercial paper rate;
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the
federal funds rate;
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the
federal funds (open) rate;
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any
other rate or interest rate formula specified in the applicable pricing supplement or
any applicable product supplement.
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Formula
For Interest Rates. The interest rate on each floating rate note will be calculated by reference to:
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the
specified base rate based on the index maturity, if applicable;
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plus
or minus the spread, if any; and/or
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multiplied
by the spread multiplier, if any.
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For
any floating rate note, if applicable, “index maturity” means the period of maturity of the instrument or obligation
from which the base rate is calculated and will be specified in the applicable pricing supplement. The “spread”
is the number of basis points (one one-hundredth of a percentage point) specified in the applicable pricing supplement to be added
to or subtracted from the base rate for a floating rate note. The “spread multiplier” is the percentage that
may be specified in the applicable pricing supplement to be applied to the base rate for a floating rate note. The interest rate
on any inverse floating rate note will also be calculated by reference to a fixed rate.
Limitations
On Interest Rate. A floating rate note may also have either or both of the following limitations on the interest rate:
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a
maximum limitation, or ceiling, on the rate of interest which may accrue during any interest
reset period, which we refer to as the “maximum interest rate”; and/or
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a
minimum limitation, or floor, on the rate of interest that may accrue during any interest
reset period, which we refer to as the “minimum interest rate.”
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Any
applicable maximum interest rate or minimum interest rate will be set forth in the applicable pricing supplement.
How
Floating Interest Rates Are Reset. The interest rate in effect from the issue date to the first interest reset date for a
floating rate note will be the initial interest rate specified in the applicable pricing supplement. We refer to this rate as
the “initial interest rate.” The interest rate on each floating rate note may be reset daily, weekly, monthly,
quarterly, semi-annually or annually. This period is the “interest reset period” and the first day of each
interest reset period is the “interest reset date.” The “interest determination date” for
any interest reset date is the day the calculation agent will refer to when determining the new interest rate at which a floating
rate will reset, and unless otherwise specified in the applicable pricing supplement or any applicable product supplement, is
applicable as follows:
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for
federal funds rate notes, federal funds (open) rate notes and prime rate notes, the interest
determination date will be on the business day prior to the interest reset date;
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for
commercial paper rate notes and CMT rate notes, the interest determination date will
be the second business day prior to the interest reset date;
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for
CMS rate notes, the interest determination date will be the second U.S. government securities
business day prior to the interest reset date;
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for
CPI rate notes, the interest determination date will be the interest reset date;
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for
EURIBOR notes or Euro LIBOR notes, the interest determination date will be the second
TARGET Settlement Day prior to the interest reset date;
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for
LIBOR notes (other than Euro LIBOR notes), the interest determination date will be the
second London banking day prior to the interest reset date, except that the interest
determination date pertaining to the interest reset date for a LIBOR note for which the
index currency is pounds sterling will be the interest reset date;
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for
Treasury rate notes, the interest determination date will be the day of the week in which
the interest reset date falls on which Treasury bills would normally be auctioned. Treasury
bills are normally sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is normally held on the following Tuesday, except
that the auction may be held on the preceding Friday; provided, however, that if an auction
is held on the Friday of the week preceding the interest reset date, the interest determination
date will be that preceding Friday; and provided, further, that if Treasury bills are
sold at an auction that falls on a day that is an interest reset date, that interest
reset date will be the following business day; and
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for
notes with two or more base rates, the interest determination date will be the latest
business day that is at least two business days before the applicable interest reset
date on which each base rate is determinable.
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The
interest reset dates will be specified in the applicable pricing supplement. If an interest reset date for any floating rate note
falls on a day that is not business day, it will be postponed to the following business day, except that, in the case of a EURIBOR
note or a LIBOR note, if that business day is in the next calendar month, the interest reset date will be the immediately preceding
business day, unless otherwise specified in the applicable pricing supplement or any applicable product supplement.
In
the detailed descriptions of the various base rates which follow, the “calculation date” pertaining to an interest
determination date means the earlier of (i) the tenth calendar day after that interest determination date or, if that day
is not a business day, the next business day, or (ii) the business day immediately preceding the applicable interest payment
date or maturity date or, for any principal amount to be redeemed or repaid, any redemption or repayment date.
The
interest rate in effect for the 10 calendar days immediately prior to maturity, redemption or repayment will be the one in effect
on the tenth calendar day preceding the maturity, redemption or repayment date.
How
Interest Is Calculated. Interest on floating rate notes will accrue from and including the most recent interest payment date
to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from and including
the issue date or any other date specified in the applicable pricing supplement on which interest begins to accrue. Interest will
accrue to but excluding the next interest payment date or, if earlier, the date on which the principal has been paid or duly made
available for payment, except as described below under “—If A Payment Date Is Not A Business Day.”
Unless
otherwise specified in the applicable pricing supplement, the calculation agent for any issue of floating rate notes will be Wells
Fargo Securities, LLC. We may appoint a successor calculation agent with the written consent of the paying agent, which consent
shall not be unreasonably withheld. Upon the request of the holder of any floating rate note, the calculation agent will provide
the interest rate then in effect and, if determined, the interest rate that will become effective on the next interest reset date
for the floating rate note. The calculation agent will notify the paying agent of each determination of the interest rate applicable
to any floating rate note promptly after the determination is made.
For
a floating rate note, accrued interest will be calculated by multiplying the principal amount of the floating rate note by an
accrued interest factor. This accrued interest factor will be computed by adding the interest factors calculated for each day
in the period for which interest is being paid. Unless otherwise specified in the applicable pricing supplement or any applicable
product supplement, the interest factor for each day is computed by dividing the interest rate applicable to that day:
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by
360, in the case of commercial paper rate notes, CMS rate notes, EURIBOR notes, federal
funds rate notes, federal funds (open) rate notes, LIBOR notes, except for LIBOR notes
denominated in pounds sterling, and prime rate notes;
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by
365 (or 366 if the last day of the interest period falls in a leap year), in the case
of LIBOR notes denominated in pounds sterling; or
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by
the actual number of days in the year, in the case of Treasury rate notes, CMT rate notes
and CPI rate notes.
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For
these calculations, the interest rate in effect on any interest reset date will be the applicable rate as reset on that date.
The interest rate applicable to any other day is the interest rate from the immediately preceding interest reset date or, if none,
the initial interest rate.
All
percentages used in or resulting from any calculation of the rate of interest on a floating rate note will be rounded, if necessary,
to the nearest one hundred-thousandth of a percentage point, with 0.000005% rounded up to 0.00001%, and all U.S. dollar amounts
used in or resulting from these calculations on floating rate notes will be rounded to the nearest cent, with one-half cent rounded
upward. All Japanese Yen amounts used in or resulting from these calculations will be rounded downward to the next lower whole
Japanese Yen amount. All amounts denominated in any other currency used in or resulting from these calculations will be rounded
to the nearest two decimal places in that currency, with 0.005 rounded up to 0.01.
When
Interest Is Paid. We will pay interest on floating rate notes on the interest payment dates specified in the applicable pricing
supplement. However, unless otherwise specified in the applicable pricing supplement or any applicable product supplement, if
the first interest payment date is less than 15 calendar days after the issue date, interest will not be paid on the first interest
payment date, but will be paid on the second interest payment date.
If
A Payment Date Is Not A Business Day. If any interest payment date, other than the maturity date or any earlier redemption
or repayment date, for any floating rate note falls on a day that is not a business day, it will be postponed to the following
business day, except that, in the case of a EURIBOR note or a LIBOR note, if that business day would fall in the next calendar
month, the interest payment date will be the immediately preceding business day unless otherwise specified in the applicable pricing
supplement or any applicable product supplement. If the maturity date or any earlier redemption or repayment date of a floating
rate note falls on a day that is not a business day, the payment of principal, premium, if any, and interest, if any, will be
made on the next business day, but interest on that payment will not accrue during the period from and after the maturity, redemption
or repayment date, as the case may be.
Base
Rates.
Commercial
Paper Rate Notes. Commercial paper rate notes will bear interest at the interest rates specified in the applicable pricing
supplement. Those interest rates will be based on the commercial paper rate and any spread and/or spread multiplier and will be
subject to the minimum interest rate and the maximum interest rate, if any.
The
“commercial paper rate” means, for any interest determination date, the money market yield, calculated as described
below, of the rate on that date for U.S. dollar commercial paper having the index maturity specified in the applicable pricing
supplement, as that rate is published in the daily update of “Selected Interest Rates (Daily) H.15,” available through
the website of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov/releases/h15/update, or any
successor site or publication (the “H.15 Daily Update”), under the heading “Commercial Paper—Nonfinancial”
or “Commercial Paper Financial,” as specified in the applicable pricing supplement.
The
following procedures will be followed if the commercial paper rate cannot be determined as described above:
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If
by 5:00 p.m., New York City time, on that calculation date the above rate is not yet
published in the H.15 Daily Update, or other recognized electronic source used for the
purpose of displaying the applicable rate, then the calculation agent will determine
the commercial paper rate to be the money market yield of the arithmetic mean of the
offered rates as of 11:00 a.m., New York City time, on that interest determination date
of three leading dealers of U.S. dollar commercial paper in New York, New York, which
may include the agents for the notes or their affiliates, selected by the calculation
agent, after consultation with us, for commercial paper of the index maturity specified
in the applicable pricing supplement, placed for an industrial issuer whose bond rating
is “Aa,” or the equivalent, from a nationally recognized statistical rating
agency.
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If
the dealers selected by the calculation agent are not quoting as set forth above, the
commercial paper rate for the interest determination date will remain the commercial
paper rate for the immediately preceding interest reset period, or, if none, the rate
of interest payable will be the initial interest rate.
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The
“money market yield” will be a yield calculated in accordance with the following formula:
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money market yield =
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D
× 360
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x 100
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360 – (D × M)
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where
“D” refers to the applicable per year rate for commercial paper quoted on a bank discount basis and expressed
as a decimal and “M” refers to the actual number of days in the interest period for which interest is being
calculated.
EURIBOR
Notes. EURIBOR notes will bear interest at the interest rates specified in the applicable pricing supplement. That interest
rate will be based on EURIBOR and any spread and/or spread multiplier and will be subject to the minimum interest rate and the
maximum interest rate, if any.
“EURIBOR”
means, for any interest determination date, the rate for deposits in euros as sponsored, calculated and published jointly by the
European Banking Federation and ACI – The Financial Market Association, or any company established by the joint sponsors
for purposes of compiling and publishing those rates, for the index maturity specified in the applicable pricing supplement as
that rate appears on the display on Thomson Reuters Eikon service ( “Reuters”), or any successor service, on
page EURIBOR01 or any other page as may replace page EURIBOR01 on that service, which is commonly referred to as “Reuters
Page EURIBOR01,” as of 11:00 a.m., Brussels time.
The
following procedures will be followed if EURIBOR cannot be determined as described above:
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If
the above rate does not appear on Reuters Page EURIBOR01 on an interest determination
date at approximately 11:00 a.m., Brussels time, the calculation agent will request
the principal Euro-Zone office of each of four major banks in the Euro-Zone interbank
market, as selected by the calculation agent, after consultation with us, to provide
the calculation agent with its offered rate for deposits in euros, at approximately 11:00 a.m.,
Brussels time, on the interest determination date, to prime banks in the Euro- Zone interbank
market for the index maturity specified in the applicable pricing supplement commencing
on the applicable interest reset date, and in a principal amount not less than the equivalent
of €1 million that is representative of a single transaction in euros, in that
market at that time. If at least two quotations are provided, EURIBOR will be the arithmetic
mean of those quotations.
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If
fewer than two quotations are provided, then the calculation agent, after consultation
with us will select four major banks in the Euro-Zone interbank market to provide a quotation
of the rate offered by them, at approximately 11:00 a.m., Brussels time, on the
applicable interest determination date for loans in euros to leading European banks for
a period of time equivalent to the index maturity specified in the applicable pricing
supplement commencing on that interest reset date in a principal amount not less than
the equivalent of €1 million. EURIBOR will be the arithmetic mean of those
quotations.
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If
at least three quotations are not provided, EURIBOR for that interest determination date
will remain EURIBOR for the immediately preceding interest reset period, or, if none,
the rate of interest payable will be the initial interest rate.
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“Euro-Zone”
means the region comprising member states of the European Union that have adopted the single currency in accordance with the relevant
treaty of the European Union, as amended.
Federal
Funds Rate Notes. Federal funds rate notes will bear interest at the interest rates specified in the applicable pricing supplement.
Those interest rates will be based on the federal funds rate and any spread and/or spread multiplier and will be subject to the
minimum interest rate and the maximum interest rate, if any.
The
“federal funds rate” means, for any interest determination date, the rate on that date for U.S. dollar federal
funds as published in the H.15 Daily Update under the heading “Federal Funds (Effective)” as displayed on Reuters,
or any successor service, on page FEDFUNDS1 or any other page as may replace the applicable page on that service, which is commonly
referred to as “Reuters Page FEDFUNDS1.”
The
following procedures will be followed if the federal funds rate cannot be determined as described above:
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If
the above rate is not yet published in the H.15 Daily Update, or other recognized electronic
source used for the purpose of displaying the applicable rate, by 5:00 p.m., New York
City time, on the calculation date, the calculation agent will determine the federal
funds rate to be the arithmetic mean of the rates for the last transaction in overnight
U.S. dollar federal funds prior to 9:00 a.m., New York City time, on the business
day following that interest determination date, by each of three leading brokers of U.S.
dollar federal funds transactions in New York, New York, which may include the agents
for the notes or their affiliates, selected by the calculation agent, after consultation
with us.
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If
fewer than three brokers selected by the calculation agent are not quoting as set forth
above, the federal funds rate for that interest determination date will remain the federal
funds rate for the immediately preceding interest reset period, or, if none, the rate
of interest payable will be the initial interest rate.
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Federal
Funds (Open) Rate Notes. Federal funds (open) rate notes will bear interest at the interest rates specified in the applicable
pricing supplement. Those interest rates will be based on the federal funds (open) rate and any spread and/or spread multiplier
and will be subject to the minimum interest rate and the maximum interest rate, if any.
The
“federal funds (open) rate” means, for any interest determination date, the federal funds rate on that date
set forth opposite the caption “Open” as displayed on Reuters, or any successor service, on page 5 or any other page
as may replace the applicable page on that service, which is commonly referred to as “Reuters Page 5.”
The
following procedures will be followed if the federal funds (open) rate cannot be determined as described above:
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If
the above rate is not published by 5:00 p.m., New York City time, on the calculation
date, the federal funds (open) rate will be the rate on that interest determination date
displayed on FFPREBON Index Page on Bloomberg L.P. ( “Bloomberg”),
which is the Fed Funds Opening Rate as reported by Prebon Yamane, or any successor service,
on Bloomberg.
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If
the above rate is not displayed on the FFPREBON Index Page on Bloomberg, or other recognized
electronic source used for the purpose of displaying the applicable rate, by 5:00 p.m.,
New York City time, on the calculation date, the calculation agent will determine the
federal funds (open) rate to be the arithmetic mean of the rates for the last transaction
in overnight U.S. dollar federal funds prior to 9:00 a.m., New York City time, on that
interest determination date, by each of three leading brokers of U.S. dollar federal
funds transactions in New York, New York, which may include the agents for the notes
and their affiliates, selected by the calculation agent, after consultation with us.
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If
fewer than three brokers selected by the calculation agent are not quoting as set forth
above, the federal funds (open) rate for that interest determination date will remain
the federal funds (open) rate for the immediately preceding interest reset period, or,
if none, the rate of interest payable will be the initial interest rate.
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LIBOR
Notes. LIBOR notes will bear interest at the interest rates specified in the applicable pricing supplement. That interest
rate will be based on London Interbank Offered Rate, which is commonly referred to as “LIBOR,” and any spread
and/or spread multiplier and will be subject to the minimum interest rate and the
maximum interest rate, if any. The terms and
provisions relating to the determination of LIBOR will be set forth in the applicable pricing supplement or any applicable product
supplement.
Prime
Rate Notes. Prime rate notes will bear interest at the interest rates specified in the applicable pricing supplement. That
interest rate will be based on the prime rate and any spread and/or spread multiplier, and will be subject to the minimum interest
rate and the maximum interest rate, if any.
The
“prime rate” means, for any interest determination date, the rate on that date as published in the H.15 Daily
Update, under the heading “Bank Prime Loan.”
The
following procedures will be followed if the prime rate cannot be determined as described above:
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If
the above rate is not published in the H.15 Daily Update by 5:00 p.m., New York
City time, on the calculation date, then the calculation agent will determine the prime
rate to be the arithmetic mean of the rates of interest publicly announced by each bank
that appears on the Reuters Screen USPRIME 1 Page, as defined below, as that bank’s
prime rate or base lending rate as in effect as of 11:00 a.m., New York City time,
for that interest determination date.
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•
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If
fewer than four rates for that interest determination date appear on the Reuters Screen
USPRIME 1 Page by 5:00 p.m., New York City time, on the calculation date, the
calculation agent will determine the prime rate to be the arithmetic mean of the prime
rates quoted or base lending rates furnished in New York City by three substitute major
banks or trust companies (all organized under the laws of the United States or any of
its states and having total equity capital of at least $500,000,000), selected by the
calculation agent, after consultation with us.
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If
the banks selected by the calculation agent are not quoting as set forth above, the prime
rate for that interest determination date will remain the prime rate for the immediately
preceding interest reset period, or, if none, the rate of interest payable will be the
initial interest rate.
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“Reuters
Screen USPRIME 1 Page” means the display designated as page “USPRIME 1” on the Reuters Monitor Money Rate
Service, or any successor service, or any other page as may replace the USPRIME 1 Page on that service for the purpose of displaying
prime rates or base lending rates of major U.S. banks.
Treasury
Rate Notes. Treasury rate notes will bear interest at the interest rates specified in the applicable pricing supplement. That
interest rate will be based on the Treasury rate and any spread and/ or spread multiplier and will be subject to the minimum interest
rate and the maximum interest rate, if any.
The
“Treasury rate” means:
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the
rate from the auction held on the applicable interest determination date, which we refer
to as the “auction,” of direct obligations of the United States, which
are commonly referred to as “Treasury Bills,” having the index maturity
specified in the applicable pricing supplement as that rate appears under the caption
“INVEST RATE” on the display on Reuters, or any successor service, on page
USAUCTION 10 or any other page as may replace page USAUCTION 10 on that service, which
we refer to as “Reuters Page USAUCTION 10,” or page USAUCTION 11 or
any other page as may replace page USAUCTION 11 on that service, which we refer to as
“Reuters Page USAUCTION 11”; or
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if
the rate described in the first bullet point is not published by 5:00 p.m., New
York City time, on the calculation date, the bond equivalent yield of the rate for the
applicable Treasury Bills as published in the H.15 Daily Update, or other recognized
electronic source used for the purpose of displaying the applicable rate, under the caption
“U.S. Government Securities/Treasury Bills/Auction High”; or
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if
the rate described in the second bullet point is not published by 5:00 p.m., New
York City time, on the related calculation date, the bond equivalent yield of the auction
rate of the applicable Treasury Bills, announced by the United States Department of the
Treasury; or
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if
the rate referred to in the third bullet point is not so published by 5:00 p.m.,
New York City time, on the related calculation date, the rate on the applicable interest
determination date of the applicable Treasury Bills as published in H.15 Daily Update,
or other recognized electronic source used for the purpose of displaying the applicable
rate, under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”;
or
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•
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if
the rate referred to in the fourth bullet point is not so published by 5:00 p.m.,
New York City time, on the related calculation date, the rate on the applicable interest
determination date calculated by the calculation agent as the bond equivalent yield of
the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m.,
New York City time, on the applicable interest determination date, of three primary U.S.
government securities dealers, which may include the agents for the notes or their affiliates,
selected by the calculation agent after consultation with us, for the issue of Treasury
Bills with a remaining maturity closest to the index maturity specified in the applicable
pricing supplement; or
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if
the dealers selected by the calculation agent are not quoting as set forth above, the
Treasury rate for that interest determination date will remain the Treasury rate for
the immediately preceding interest reset period, or, if none, the rate of interest payable
will be the initial interest rate.
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The
“bond equivalent yield” means a yield calculated in accordance with the following formula and expressed as
a percentage:
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bond equivalent yield =
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D × N
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x 100
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360 – (D × M)
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where
“D” refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis, “N”
refers to 365 or 366, as the case may be, and “M” refers to the actual number of days in the interest period
for which interest is being calculated.
CMS
Rate Notes. CMS rate notes will bear interest at the interest rates specified in the applicable pricing supplement. That interest
rate will be based on the CMS rate and any spread and/or spread multiplier and will be subject to the minimum interest rate and
the maximum interest rate, if any.
ICE
Benchmark Administration Limited is the benchmark administrator of the CMS rate, and the official name of the CMS rate is the
“ICE Swap Rate.” The terms and provisions relating to the determination of the CMS rate will be set forth in
the applicable pricing supplement or any applicable product supplement.
CMT
Rate Notes. CMT rate notes will bear interest at the interest rates specified in the applicable pricing supplement. That interest
rate will be based on the CMT rate and any spread and/or spread multiplier and will be subject to the minimum interest rate and
the maximum interest rate, if any.
The
“CMT rate” means, for any interest determination date, the rate published by the Board of Governors of the
Federal Reserve System, or its successor, on its website or in another recognized electronic source, as the yield is displayed
for Treasury securities at “constant maturity” under the column for the Designated CMT Maturity Index, as defined
below, for:
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the
rate on that interest determination date, if the Designated CMT Reuters Page is FRBCMT;
and
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•
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the
week or the month, as applicable, ended immediately preceding the week in which the related
interest determination date occurs, if the Designated CMT Reuters Page is FEDCMT.
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The
following procedures will be followed if the CMT rate cannot be determined as described above:
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If
the above rate is no longer displayed on the relevant page, or if not published by 5:00 p.m.,
New York City time, on the related calculation date, then the CMT rate will be the
Treasury Constant Maturity rate for the Designated CMT Maturity Index or other U.S. Treasury
rate for the Designated CMT Maturity Index on the interest determination date as may
then be published by either the Board of Governors of the Federal Reserve System or the
United States Department of the Treasury that the calculation agent determines to be
comparable to the rate formerly displayed on the Designated CMT Reuters Page and published
on the website of the Board of Governors of the Federal Reserve System or in another
recognized electronic source.
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If
the information described in the first bullet point is not provided by 5:00 p.m.,
New York City time, on the related calculation date, then the calculation agent
will determine the CMT rate to be a yield to maturity, based on the arithmetic mean of
the secondary market closing offer side prices as of approximately 3:30 p.m., New York
City time, on the interest determination date, reported, according to their written records,
by three leading primary U.S. government securities dealers, which we refer to as a “reference
dealer,” in New York, New York, which may include the agents for
the notes or their affiliates, selected by the calculation agent as described in the
following sentence. The calculation agent will select five reference dealers, after consultation
with us, and will eliminate the highest quotation or, in the event of equality, one of
the highest, and the lowest quotation or, in the event of equality, one of the lowest,
for the most recently issued direct noncallable fixed rate obligations of the United
States, which are commonly referred to as “Treasury notes,” with an
original maturity of approximately the Designated CMT Maturity Index, a remaining term
to maturity of no more than 1 year shorter than that Designated CMT Maturity Index and
in a principal amount that is representative for a single transaction in the securities
in that market at that time. If two Treasury notes with an original maturity as described
above have remaining terms to maturity equally close to the Designated CMT Maturity Index,
the quotes for the Treasury note with the shorter remaining term to maturity will be
used.
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If
the calculation agent cannot obtain three Treasury notes quotations as described in the
immediately preceding bullet point, the calculation agent will determine the CMT rate
to be a yield to maturity based on the arithmetic mean of the secondary market offer
side prices as of approximately 3:30 p.m., New York City time, on the interest determination
date of three reference dealers in New York, New York, selected using the same method
described in the immediately preceding bullet point, for Treasury notes with an original
maturity equal to the number of years closest to but not less than the Designated CMT
Maturity Index and a remaining term to maturity closest to the Designated CMT Maturity
Index and in a principal amount that is representative for a single transaction in the
notes in that market at that time.
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If
three or four, and not five, of the reference dealers are quoting as described above,
then the CMT rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of those quotes will be eliminated.
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If
fewer than three reference dealers selected by the calculation agent are quoting as described
above, the CMT rate for that interest determination date will remain the CMT rate for
the immediately preceding interest reset period, or, if none, the rate of interest payable
will be the initial interest rate.
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“Designated
CMT Reuters Page” means the display on Reuters, or any successor service, on the page designated in the applicable pricing
supplement or any other page as may replace that page on that service for the purpose of displaying Treasury Constant Maturities
as published by the Board of Governors of the Federal Reserve System, or its successor, on its website or in another recognized
electronic source. If no page is specified in the applicable pricing supplement, the Designated CMT Reuters Page will be FEDCMT,
for the most recent week.
“Designated
CMT Maturity Index” means the original period to maturity of the U.S. Treasury securities, which is either 1, 2, 3,
5, 7, 10, 20 or 30 years, as specified in the applicable pricing supplement, for which the CMT
rate will be calculated. If
no maturity is specified in the applicable pricing supplement, the Designated CMT Maturity Index will be two years.
CPI
Rate Notes. CPI rate notes will bear interest at the interest rates specified in the applicable pricing supplement. That interest
rate will be based on the CPI rate and any spread and/or spread multiplier and will be subject to the minimum interest rate and
the maximum interest rate, if any.
The
“CPI rate” means, for any interest determination date, the year-over-year percentage change in the CPI (as
defined below), calculated as follows:
Ref
CPIt – Ref CPIt-12
Ref
CPIt-12
where,
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the “Ref
CPIt” is the level of the CPI for the third calendar month prior to
the calendar month of such interest determination date (the “reference month”)
and
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the
“Ref CPIt-12” is the level of the CPI for the twelfth calendar
month prior to such reference month.
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For
example, with respect to an interest determination date in December 2016, the Ref CPIt is the level of the CPI for September
2016 and the Ref CPIt-12 is the level of the CPI for September 2015.
If
by 3:00 p.m., New York City time, on any interest determination date the CPI is not published on Bloomberg screen CPURNSA for
any relevant month, but has otherwise been published by the Bureau of Labor Statistics of the U.S. Department of Labor (the “BLS”),
the calculation agent will determine the CPI as reported by the BLS for such month using such other source as appears on its face
to accurately set forth the CPI as reported by the BLS, as determined by the calculation agent.
In
calculating Ref CPIt and Ref CPIt-12, the calculation agent will use the most recently available value of the CPI
determined as described above on the applicable interest determination date, even if such value has been adjusted from a prior
reported value for the relevant month. However, if a value of Ref CPIt and Ref CPIt-12 used by the calculation agent
on any interest determination date to determine the interest rate on the notes (an “original CPI level”) is
subsequently revised by the BLS, the calculation agent will continue to use the original CPI level, and the interest rate determined
on such interest determination date will not be revised.
If
the CPI is rebased to a different year or period and the 1982-1984 CPI is no longer used, the base reference period for the notes
will continue to be the 1982-1984 reference period as long as the 1982-1984 CPI continues to be published.
If,
while the notes are outstanding, the CPI is discontinued or substantially altered, as determined by the calculation agent in its
sole discretion, the calculation agent will determine the interest rate on the notes by reference to the applicable substitute
index that is chosen by the Secretary of the Treasury for the Department of the Treasury’s Inflation-Linked Treasuries as
described at 62 Federal Register 846-874 (January 6, 1997) or, if no such securities are outstanding, the substitute index will
be determined by the calculation agent in accordance with general market practice at the time; provided that the procedure for
determining the resulting interest rate is administratively acceptable to the calculation agent.
The
“Consumer Price Index” or “CPI” means the All Items Consumer Price Index for All Urban Consumers
(CPI-U) U.S. City Average before seasonal adjustment published by the BLS (Bloomberg: CPURNSA). The BLS makes certain information
regarding the CPI data publicly available. This material may be accessed electronically by means of the BLS’s website at
http://www.bls.gov/cpi/. No information contained on the BLS website is incorporated by reference into this prospectus supplement.
According
to the publicly available information provided by the BLS, the CPI is a measure of the average change over time in the prices
paid by urban consumers for a market basket of goods and services, including food and beverages, housing, apparel, transportation,
medical care, recreation, education and communication, and other goods and services. User fees (such as water and sewer charges,
auto registration fees, and vehicle tolls) and taxes (such as sales and excise taxes) that are directly associated with the prices
of specific goods and services are also included in the CPI. Taxes that are not directly associated with the purchase of consumer
goods and services (such as income and social security taxes) and investment items such as stocks, bonds, real estate and life
insurance are not included. The CPI includes expenditures of almost all residents of urban or metropolitan areas, including professionals,
the self-employed, the poor, the unemployed and retired persons, urban wage earners and clerical workers. The CPI does not include
the spending patterns of persons living in rural nonmetropolitan areas, farm families, persons in the armed forces, and those
in institutions (such as prisons and mental hospitals). In calculating the CPI, price changes for the various items are averaged
together with weights that represent their significance in the spending of urban households in the United States.
The
contents of the market basket of goods and services and the weights assigned to the various items are updated periodically to
take into account changes in consumer expenditure patterns. The CPI is expressed in relative terms based on a reference period
for which the level is set at 100 (currently the base reference period used by the BLS is 1982–1984). For example, because
the CPI level for the 1982–1984 reference period is 100, an increase of 16.5 percent from that period would be shown as
116.5.
All
information contained in this prospectus supplement regarding the CPI is derived from publicly available information published
by the BLS or other publicly available sources. Such information reflects the policies of the BLS as stated in such sources, and
such policies are subject to change by the BLS. We have not independently verified any information relating to the CPI. The BLS
is under no obligation to continue to publish the CPI and may discontinue publication of the CPI at any time. The consequences
of the BLS discontinuing the CPI are described above.
Redemption
and Repayment
Optional
Redemption By Us. If applicable, the pricing supplement or any applicable product supplement will indicate the terms of our
option to redeem the notes offered thereby. We will mail by first class mail, postage prepaid, a notice of redemption to each
holder or, in the case of global securities, we will provide such notice to the depositary, as holder of the global securities,
pursuant to the applicable procedures of the depositary, at least five days and not more than 30 days prior to the date
fixed for redemption, or within the redemption notice period designated in the applicable pricing supplement or any applicable
product supplement, to the address of each holder as that address appears upon the books maintained by the security registrar.
The notes will not be subject to any sinking fund.
A
partial redemption of the notes may be effected by such method as the trustee shall deem fair and appropriate and may provide
for the selection for redemption of a portion of the principal amount of notes held by a holder equal to an authorized denomination.
If we redeem less than all of the notes and the notes are then held in book-entry form, the redemption will be made in accordance
with the depositary’s customary procedures. We have been advised that it is DTC’s practice to determine by lottery
the amount of each participant in the notes to be redeemed.
Unless
we default in the payment of the redemption price, on and after the redemption date interest will cease to accrue on the notes
called for redemption.
Repayment
At Option Of Holder. If applicable, the pricing supplement or any applicable product supplement will indicate that the holder
has the option to have us repay the notes offered thereby on a date or dates specified prior to their stated maturity date. Unless
otherwise specified in the applicable pricing supplement or any applicable product supplement, the repayment price will be equal
to 100% of the principal amount of the note, together with accrued interest, if any, to the date of repayment.
For
us to repay a note, the paying agent must receive at least 30 days but not more than 45 days prior to the repayment date:
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the
note with the form entitled “Option to Elect Repayment” on the reverse of
the note duly completed; or
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•
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a
telegram, telex, facsimile transmission or a letter from a member of a national securities
exchange, or FINRA or a commercial bank or trust company in the United States setting
forth the name of the holder of the note, the principal amount of the note, the principal
amount of the note to be repaid, the certificate number or a description of the tenor
and terms of the note, a statement that the option to elect repayment is being exercised
and a guarantee that the note to be repaid, together with the duly completed form entitled
“Option to Elect Repayment” on the reverse of the note, will be received
by the paying agent not later than the fifth business day after the date of the telegram,
telex, facsimile transmission or letter. However, the telegram, telex, facsimile transmission
or letter will only be effective if that note and form duly completed are received by
the paying agent by the fifth business day after the date of that telegram, telex, facsimile
transmission or letter.
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Exercise
of the repayment option by the holder of a note will be irrevocable. The holder may exercise the repayment option for less than
the entire principal amount of the note but, in that event, the principal amount of the note remaining outstanding after repayment
must be an authorized denomination.
Special
Requirements For Optional Repayment Of Global Securities. If a note is represented by a global security, the depositary or
the depositary’s nominee will be the holder of the note and therefore will be the only entity that can exercise a right
to repayment. In order to ensure that the depositary’s nominee will timely exercise a right to repayment of a particular
note, the beneficial owner of the note must instruct the broker or other direct or indirect participant through which it holds
an interest in the note to notify the depositary of its desire to exercise a right to repayment. Different firms have different
cut-off times for accepting instructions from their customers and, accordingly, each beneficial owner should consult the broker
or other direct or indirect participant through which it holds an interest in a note in order to ascertain the cut-off time by
which an instruction must be given in order for timely notice to be delivered to the depositary.
Open
Market Purchases. We may purchase notes at any price in the open market or otherwise. Notes so purchased by us may, at our
discretion, be held or resold or surrendered to the trustee for cancellation.
Wells
Fargo & Company Guarantee
As
described in the accompanying prospectus, the Guarantor will fully and unconditionally guarantee, on an unsecured basis, the full
and punctual payment of the principal of, interest on, and all other amounts payable under the notes when the same becomes due
and payable, whether at maturity or upon redemption, repayment at the option of the holders of the applicable notes, upon acceleration
or otherwise. If for any reason we do not make any required payment in respect of the notes when due, the Guarantor will on demand
pay the unpaid amount at the same place and in the same manner that applies to payments made by us under the indenture. The guarantee
is of payment and not of collection. (Section 1601)
Holders
of the notes are our direct creditors, as well as direct creditors of the Guarantor under the guarantee. As a finance subsidiary,
we have no independent operations beyond the issuance and administration of our securities and will have no independent assets
available for distributions to holders of the notes if they make claims in respect of the notes in a bankruptcy, resolution or
similar proceeding. Accordingly, any recoveries by such holders will be limited to those available under the related guarantee
by the Guarantor and that guarantee will rank pari passu with all other unsecured, unsubordinated obligations
of the Guarantor. Holders of the notes should accordingly assume that in any such proceedings they would not have any priority
over and should be treated pari passu with the claims of other unsecured, unsubordinated creditors of the Guarantor,
including holders of debt securities issued by the Guarantor.
Benefit
Plan Investor Considerations
Each
fiduciary of a pension, profit-sharing or other employee benefit plan to which Title I of the Employee Retirement Income
Security Act of 1974, as amended, ( “ERISA”) applies (a “Plan”), should consider the fiduciary
standards of ERISA in the context of the Plan’s particular circumstances before authorizing an investment in the notes.
Accordingly, among other factors, the fiduciary should consider whether the investment would satisfy the prudence and diversification
requirements of ERISA and would be consistent with the documents and instruments governing the Plan. When we use the term “holder”
in this section, we are referring to a beneficial owner of the notes and not the record holder.
Section 406
of ERISA and Section 4975 of the Code prohibit Plans, as well as individual retirement accounts, Keogh plans and other arrangements
to which Section 4975 of the Code applies (also “Plans”), from engaging in specified transactions involving
“plan assets” with persons who are “parties in interest” under ERISA or “disqualified persons”
under the Code (collectively, “Parties in Interest”) with respect to such Plans. A violation of those “prohibited
transaction” rules may result in an excise tax or other liabilities under ERISA and/or Section 4975 of the Code for
such persons, unless statutory or administrative exemptive relief is available. Therefore, a fiduciary of a Plan should also consider
whether an investment in the notes might constitute or give rise to a prohibited transaction under ERISA and the Code.
Employee
benefit plans that are governmental plans, as defined in Section 3(32) of ERISA, certain church plans, as defined in Section 3(33)
of ERISA, and foreign plans, as described in Section 4(b)(4) of ERISA (collectively, “Non-ERISA Arrangements”),
are not subject to the requirements of ERISA, or Section 4975 of the Code, but may be subject to similar rules under other
applicable laws or regulations ( “Similar Laws”).
We
and our affiliates may each be considered a Party in Interest with respect to many Plans. Special caution should be exercised,
therefore, before the notes are purchased by a Plan. In particular, the fiduciary of the Plan should consider whether statutory
or administrative exemptive relief is available. The U.S. Department of Labor has issued five prohibited transaction class exemptions
( “PTCEs”) that may provide exemptive relief for direct or indirect prohibited transactions resulting from the
purchase or holding of the notes. Those class exemptions are:
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•
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PTCE
96-23, for specified transactions determined by in-house asset managers;
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•
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PTCE
95-60, for specified transactions involving insurance company general accounts;
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•
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PTCE
91-38, for specified transactions involving bank collective investment funds;
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•
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PTCE
90-1, for specified transactions involving insurance company separate accounts; and
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•
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PTCE
84-14, for specified transactions determined by independent qualified professional asset
managers.
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In
addition, Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code provide an exemption for transactions between
a Plan and a person who is a Party in Interest (other than a fiduciary who has or exercises any discretionary authority or control
with respect to investment of the plan assets involved in the transaction or renders investment advice with respect thereto) solely
by reason of providing services to the Plan (or by reason of a relationship to such a service provider), if in connection with
the transaction the Plan receives no less, and pays no more, than “adequate consideration” (within the meaning of
Section 408(b)(17) of ERISA).
The
foregoing list of exemptions is not exhaustive, and there can be no assurance that any of them will be available with respect
to transactions involving the notes. Other statutory or administrative class exemptions may be applicable. In addition, a purchaser
or holder may obtain an individual administrative exemption.
Any
purchaser or holder of the notes or any interest in the notes will be deemed to have represented by its purchase and holding that
either:
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•
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no
portion of the assets used by such purchaser or holder to acquire or purchase the notes
constitutes assets of any Plan or Non-ERISA Arrangement; or
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•
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the
purchase, holding and subsequent disposition of the notes by such purchaser or holder
will not constitute or result in a non-exempt prohibited transaction under Section 406
of ERISA or Section 4975 of the Code or a violation under any Similar Law.
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Due
to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions,
it is particularly important that fiduciaries or other persons considering purchasing the notes on behalf of or with “plan
assets” of any Plan consult with their counsel regarding the potential consequences under ERISA, the Code, and any applicable
Similar Law, of the acquisition of the notes and the availability of exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1 or
84-14 or another applicable statutory or administrative exemption.
The
notes are contractual financial instruments. The financial exposure provided by the notes is not a substitute or proxy for, and
is not intended as a substitute or proxy for, individualized investment management or advice for the benefit of any purchaser
or holder of the notes. The notes have not been designed and will not be administered in a manner intended to reflect the individualized
needs and objectives of any purchaser or holder of the notes.
Purchasers
of the notes have the exclusive responsibility for ensuring that their purchase, holding and subsequent disposition of the notes
does not violate the fiduciary or prohibited transaction rules of ERISA, the Code or any Similar Law. Nothing in this prospectus
supplement is, or should be construed as, a representation or advice as to whether an investment in the notes would be appropriate
for, or would meet any or all of the relevant legal requirements with respect to investments by, Plans or Non-ERISA Arrangements
generally or any particular Plan or Non-ERISA Arrangement.
SUPPLEMENTAL
Plan of Distribution (Conflicts of Interest)
We
are offering the notes fully and unconditionally guaranteed by the Guarantor on a continuing basis through Wells Fargo Securities,
LLC and through any additional agents named in the applicable pricing supplement (individually an “agent” and
collectively the “agents”) who have agreed to use their reasonable efforts to solicit purchases of the notes.
We will have the sole right to accept offers to purchase the notes, and we may reject any offer in whole or in part. Each agent
may reject, in whole or in part, any offer it solicited to purchase notes. We will pay an agent, in connection with sales of these
notes resulting from a solicitation that such agent made or an offer to purchase that such agent received, a commission in an
amount agreed upon at the time of sale. Such commission will be set forth in the applicable pricing supplement. The discount or
commission that may be received by any member of FINRA for any sales of securities pursuant to the accompanying prospectus, together
with the reimbursement of any counsel fees by us, will not exceed 8.00% of the initial gross proceeds from the sale of any notes
being sold. Any agreements that we enter into with agents will contain, to the extent required, contractual provisions required
to comply with the “Restrictions on Qualified Financial Contracts of Systemically Important U.S. Banking Organizations and
the U.S. Operations of Systemically Important Foreign Banking Organizations; Revisions to the Definition of Qualifying Master
Netting Agreement and Related Definitions” as issued by the Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation and the Office of the Comptroller of the Currency and other applicable law.
We
may also sell the notes to an agent as principal for its own account at a discount to be agreed upon at the time of sale. Such
discount will be set forth in the applicable pricing supplement. That agent may resell the notes to investors and other purchasers
at a fixed offering price or at prevailing market prices, or prices related thereto at the time of resale or otherwise, as that
agent determines and as we will specify in the applicable pricing supplement. Unless the applicable pricing supplement states
otherwise, any notes sold to agents as principal will be purchased at a price equal to 100% of the principal amount less the agreed
upon discount. An agent may offer the notes it has purchased as principal to other dealers. The agent may sell the notes to any
dealer at a discount and, unless otherwise specified in the applicable pricing supplement, the discount allowed to any other dealer
will not be in excess of the discount that the agent will receive from us. After the initial public offering of notes that an
agent is to resell on a fixed public offering price basis, the agent may change the public offering price and discount.
We
may arrange for notes to be sold through agents or may sell notes directly to investors on our own behalf or through an affiliate.
No commissions will be paid on notes sold directly by us. We may accept offers to purchase notes through additional agents and
may appoint additional agents to solicit offers to purchase notes. Any other agents will be named in the applicable pricing supplement.
Wells
Fargo Securities, LLC, an affiliate of Wells Fargo Finance LLC and one of the Guarantor’s wholly-owned subsidiaries, will
comply with Rule 5121 of the Conduct Rules of FINRA in connection with each placement of the notes in which it participates.
If Wells Fargo Securities, LLC or one of the Guarantor’s other wholly-owned subsidiaries or affiliated entities participates
in a sale of the notes, such subsidiary or entity will not confirm sales to accounts over which they exercise discretionary authority
without the prior specific written approval of the customer in accordance with Rule 5121.
Wells
Fargo Securities, LLC, Wells Fargo Advisors (the trade name of the retail brokerage business of Wells Fargo Clearing Services,
LLC and Wells Fargo Advisors Financial Network, LLC) or another of our affiliates may use the applicable pricing supplement, this
prospectus supplement and any applicable product supplement and the accompanying prospectus for offers and sales related to market-making
transactions in the notes. Such entities may act as principal or agent in these transactions, and the sales will be made at prices
related to prevailing market prices at the time of sale.
Each
of the agents may be deemed to be an “underwriter” within the meaning of the Securities Act of 1933, as amended (the
“Securities Act”). We and the Guarantor and the agents have agreed to indemnify each other against certain
liabilities, including liabilities under the Securities Act, or to contribute to payments made in respect of those liabilities.
We and the Guarantor have also agreed to reimburse the agents for specified expenses.
We
estimate that we will spend approximately $4,999,170 for legal fees, printing fees, trustee fees, CUSIP fees, rating agency fees and other expenses allocable to the offering, including,
for notes linked to an index, a licensing fee payable to the sponsor of the index.
The
original public offering price of an offering of notes will include the agent discount or commission indicated in the applicable
pricing supplement, the offering expenses described in the preceding paragraph associated with that offering, the projected profit
our hedge counterparty expects to realize in consideration for assuming the risks inherent in hedging our obligations under the
notes and any other costs identified in the applicable pricing supplement. We expect to hedge our obligations under the notes
through affiliated or unaffiliated counterparties. Because hedging our obligations entails risk and may be influenced by market
forces beyond our or our counterparty’s control, such hedging may result in a profit that is more or less than expected,
or could result in a loss. The discount or commission, offering expenses, projected profit of our hedge counterparty and any other
costs identified in the applicable pricing supplement reduce the economic terms of the notes. In addition, the fact that the original
offering price includes these items is expected to adversely affect the secondary market prices of the notes. These secondary
market prices are also likely to be reduced by the cost of unwinding the related hedging transaction.
When
we issue the notes offered by this prospectus supplement, except for notes issued upon a reopening of an existing tranche or series
of debt securities, they will be new securities without an established trading market. Unless otherwise provided in the applicable
pricing supplement, we do not intend to apply for the listing of the notes on any national securities exchange or automated quotation
system. An agent may make a market for the notes, as applicable laws and regulations permit, but is not obligated to do so and
may discontinue making a market in any or all of the notes at any time without notice. No assurance can be given as to the liquidity
of any trading market for these notes.
When
an agent acts as principal for its own account, to facilitate the offering of the notes, the agent may engage in transactions
that stabilize, maintain or otherwise affect the price of the notes. Specifically, the agent may overallot in connection with
any offering of the notes, creating a short position in the notes for its own account. In addition, to cover overallotments or
to stabilize the price of the notes, the agent may bid for, and purchase, the notes in the open market. Finally, in any offering
of the notes by an agent through dealers, the agent may reclaim selling concessions allowed to a dealer for distributing the notes
in the offering if the agent repurchases previously distributed notes in stabilization transactions or otherwise. Any of these
activities may stabilize or maintain the market price of the notes above independent market levels. The agents are not required
to engage in these activities, and may end any of these activities at any time.
Purchasers
of our securities may be required to pay stamp taxes and other charges in accordance with the laws and practices of the country
of purchase in addition to the original public offering price disclosed in the applicable pricing supplement.
Agents
and their affiliates may be customers of, engage in transactions with, or perform services, including investment and/or commercial
banking services, for us or our affiliates in the ordinary course of their businesses. In connection with the distribution of
the notes offered under this prospectus supplement, we may enter into swap or other hedging transactions with, or arranged by,
agents or their affiliates. These agents or their affiliates may receive compensation, trading gain or other benefits from these
transactions.
Each
agent will agree that it will, to the best of its knowledge and belief, comply with all applicable securities laws and regulations
in force in any jurisdiction in which it purchases, offers, sells or delivers our notes or possesses or distributes this prospectus
supplement or any other offering material and will obtain any required consent, approval or permission for its purchase, offer,
sale or delivery of such notes under the laws and regulations in force in any jurisdiction to which it is subject or in which
it makes purchases, offers, sales or deliveries. Neither we nor the Guarantor will have any responsibility for an agent’s
compliance with applicable securities laws.
The
notes and the related offer to purchase the notes and the sale of the notes under the terms provided in this prospectus supplement
and accompanying supplements do not constitute a public offering in any non-U.S. jurisdiction, and are being made available only
to individually identified investors pursuant to a private offering as permitted in the relevant jurisdiction. The notes are not,
and will not be, registered with any securities exchange or
registry located outside of the United States and have not been registered
with any non-U.S. securities or banking regulatory authority. The contents of this document have not been reviewed or approved
by any non-U.S. securities or banking regulatory authority. Any person who wishes to acquire the notes from outside the United
States should seek the advice or legal counsel as to the relevant requirements to acquire these notes.
Notice
to Prospective Investors in Argentina
The
notes are not and will not be marketed in Argentina by means of a public offering, as such term is defined under Section 2 of
Law Number 26,831, as amended. No application has been or will be made with the Argentine Comisión Nacional de Valores,
the Argentine securities governmental authority, to offer the notes in Argentina. The contents of this document have not been
reviewed by the Argentine Comisión Nacional de Valores.
Notice
to Prospective Investors in Brazil
The
notes have not been and will not be issued nor publicly placed, distributed, offered or negotiated in the Brazilian capital markets
and, as a result, have not been and will not be registered with the Comissão de Valores Mobiliáros ( “CVM”).
Any public offering or distribution, as defined under Brazilian laws and regulations, of the notes in Brazil is not legal without
prior registration under Law 6,385/76, and CVM applicable regulation. Documents relating to the offering of the notes, as well
as information contained therein, may not be supplied to the public in Brazil (as the offering of the notes is not a public offering
of notes in Brazil), nor be used in connection with any offer for subscription or sale of the notes to the public in Brazil. Persons
wishing to offer or acquire the notes within Brazil should consult with their own counsel as to the applicability of registration
requirements or any exemption therefrom.
Notice
to Prospective Investors in British Virgin Islands
The
notes have not been, and will not be, registered under the laws and regulations of the British Virgin Islands, nor has any regulatory
authority in the British Virgin Islands passed comment upon or approved the accuracy or adequacy of this document. This document
shall not constitute an offer, invitation or solicitation to any member of the public in the British Virgin Islands for the purposes
of the Securities and Investment Business Act, 2010, of the British Virgin Islands.
Notice
to Prospective Investors in Chile
Neither
the issuer nor the notes have been registered with the Comisión Para el Mercado Financiero pursuant to Law No. 18.045,
the Ley de Mercado de Valores and regulations thereunder, so they cannot be publicly offered in Chile. This document does not
constitute an offer of, or an invitation to subscribe for or purchase, the notes in the republic of Chile, other than to individually
identified buyers pursuant to a private offering within the meaning of Article 4 of the Ley de Mercado de Valores (an offer that
is not addressed to the public at large or to a certain sector or specific group of the public).
Prohibition
of Sales to European Economic Area and United Kingdom Retail Investors
Any
notes which are the subject of the offering contemplated by this prospectus supplement and the accompanying prospectus may not
be offered, sold or otherwise made available to any retail investor in the European Economic Area ( “EEA”) or
the United Kingdom. Consequently no key information document required by Regulation (EU) No 1286/2014 (the “PRIIPs
Regulation”) for offering or selling the notes or otherwise making them available to retail investors in the EEA or
the United Kingdom has been prepared and therefore offering or selling the notes or otherwise making them available to any retail
investor in the EEA or the United Kingdom may be unlawful under the PRIIPs Regulation. For the purposes of this provision:
(a) the
expression “retail investor” means a person who is one (or more) of the following:
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(i)
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a
retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended,
“MiFID II”); or
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(ii)
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a
customer within the meaning of Directive (EU) 2016/97 (the “Insurance Distribution
Directive”), where that customer would not qualify as a professional client
as defined in point (10) of Article 4(1) of MiFID II; or
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(iii)
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not
a qualified investor as defined in Regulation (3)(e) (EU) 2017/1129 (as amended, the
“Prospectus Regulation”); and
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(b)
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the
expression an “offer” includes the communication in any form and by
any means of sufficient information on the terms of the offer and the notes to be offered
so as to enable an investor to decide to purchase or subscribe for the notes.
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Notice
to Prospective Investors in the United Kingdom
Each
agent will represent and agree, with respect to the notes offered and sold by it, that:
(a)
in relation to any notes having a maturity of less than one year:
(i)
it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of its business, and;
(ii)
it has not offered or sold and will not offer or sell any notes other than to persons:
(A) whose
ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes
of their businesses; or
(B)
who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for purposes of their
businesses,
where the issue of notes would otherwise constitute a contravention of Section 19 of the Financial
Services and Markets Act 2000 (as amended) (the “FSMA”) by us;
(b) it
and each of its affiliates has only communicated, or caused to be communicated, and will only communicate, or cause to be communicated,
any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by
it in connection with the issue or sale of any notes in circumstances in which Section 21(1) of the FSMA does not apply to
us; and
(c) it
and each of its affiliates has complied, and will comply, with all applicable provisions of the FSMA with respect to anything
done by it in relation to such notes in, from or otherwise involving the United Kingdom.
Notice
to Prospective Investors in Mexico
The
notes have not been registered with the National Registry of Securities maintained by the Mexican National Banking and Securities
Commission and may not be offered or sold publicly in Mexico. This prospectus supplement and the accompanying prospectus may not
be publicly distributed in Mexico. The notes may only be offered in a private offering pursuant to Article 8 of the Securities
Market Law.
Notice
to Prospective Investors in Panama
The
notes have not been and will not be registered with the Superintendency of Securities Market of the Republic of Panama under Decree
Law N°1 of July 8, 1999 (the “Panamanian Securities Act”) and may not be publicly offered or sold within
Panama, except in certain limited transactions exempt from the registration requirements of the Panamanian Securities Act, including
the private placement rule based on number 2 of Article 83 of Law Decree 1 of July 8, 1999 (or number 2 of Article 129 of the
Unified Text of Law Decree 1 of July 8, 1999). The notes do not benefit from the tax incentives provided by the Panamanian Securities
Act and are not subject to regulation or supervision by the Superintendency of Securities Market of the Republic of Panama.
Notice
to Prospective Investors in Paraguay
The
sale of the notes qualifies as a private placement pursuant to Law No. 5810/17 “Stock Market”. The notes must not
be offered or sold to the public in Paraguay, except under circumstances which do not constitute a public offering in accordance
with Paraguayan regulations. The notes are not and will not be registered before the Paraguayan securities supervisory body Comisión
Nacional de Valores ( “CNV”) the Paraguayan private stock exchange Bolsa de Valores y Productos de Asunción
( “BVPASA”). The issuer is also not registered before the CNV or the BVPASA.
In
no case may notes not registered before the CNV be offered to the general public via mass media such as press, radio, television,
or internet when such media are publicly accessible in the Republic of Paraguay, regardless of the location from where they are
issued.
The
privately placed notes are not registered with the National Securities Commission, and therefore do not have tax benefits and
are not negotiable through the BVPASA. Privately placed notes may have less liquidity, making it difficult to sell such notes
in the secondary market, which could also affect the sale price. Private securities of issuers not registered before the CNV may
not have periodic financial information or audited financial statements, which could generate greater risk to the investor due
to the asymmetry of information. It is the responsibility of the investor to ascertain and assess the risk assumed in the acquisition
of the notes.
Notice
to Prospective Investors in Peru
The
notes have not been and will not be registered with the Capital Markets Public Registry of the Capital Markets Superintendence
( “SMV”) nor the Lima Stock Exchange Registry ( “RBVL”) for their public offering in Peru
under the Peruvian Capital Markets Law (Law No. 861/ Supreme Decree No. 093-2002) and the decrees and regulations thereunder.
Consequently, the notes may not be offered or sold, directly or indirectly, nor may this prospectus supplement or any other offering
material relating to the notes be distributed or caused to be distributed in Peru to the general public. The notes may only be
offered in a private offering under Peruvian regulation and without using mass marketing, which is defined as a marketing strategy
utilizing mass distribution and mass media to offer, negotiate or distribute notes to the whole market. Mass media includes newspapers,
magazines, radio, television, mail, meetings, social networks, Internet servers located in Peru, and other media or technology
platforms.
Notice
to Prospective Investors in Taiwan
The
notes may be made available outside Taiwan for purchase by Taiwan residents outside Taiwan but may not be offered or sold in Taiwan.
Notice
to Prospective Investors in Uruguay
The
sale of the notes qualifies as a private placement pursuant to section 2 of Uruguayan law 18,627. The notes must not be offered
or sold to the public in Uruguay, except in circumstances which do not constitute a public offering or distribution under Uruguayan
laws and regulations. The notes are not and will not be registered with the Financial Services Superintendency of the Central
Bank of Uruguay.