Borealis AG (an Austrian stock corporation with its seat in Vienna, registered with the Austrian companies register under FN 269858 a)

Public Offering of up to EUR 200,000,000 Senior Fixed Rate Notes 2012-2019 Borealis AG ("Borealis" or the "Issuer") intends to issue up to EUR 200,000,000 senior fixed rate Notes with a denomination of EUR 1,000 each (the "Notes") on 2 July 2012 (the "Issue Date") and to offer the Notes between 25 June 2012 and 27 June 2012 to the public in Austria and Luxembourg (the "Offering"). The Issuer and the Joint-Lead Managers may shorten or extend the subscription period at their own discretion. This prospectus (the "Prospectus") relates to the Offering. The issue price of the Notes is not fixed yet and will be in a range between 98% and 102% of their nominal amount. The interest period of the Notes begins on the Issue Date (including). The Notes bear a coupon at a rate per annum which will be fixed in accordance with a book building procedure involving institutional investors on or around 20 and 21 June 2012 (see "Subscription and Sale"). Accrued interest is payable each year in arrear on 2 July, starting on 2 July 2013. The Notes will be redeemed on 2 July 2019 to the extent they have not previously been redeemed or purchased. The Notes constitute direct, unconditional, unsecured and unsubordinated obligations of the Issuer ranking pari passu among themselves and pari passu with all other unsecured and unsubordinated obligations of the Issuer, save for such obligations as may be preferred by mandatory provisions of law. Application will be made to the Vienna Stock Exchange for the Notes to be admitted to the Second Regulated Market (Geregelter Freiverkehr). The Notes are governed by Austrian law. The Prospectus has been approved by the Commission de Surveillance du Secteur Financier (the "CSSF") of the Grand-Duchy of Luxembourg ("Luxembourg") in its capacity as competent authority under the Luxembourg Act dated 10 July 2005 on prospectuses for securities (loi relative aux prospectus pour valeurs mobilières) (the "Luxembourg Act") for the approval of this Prospectus. According to article 7.7 of the Luxembourg Law on prospectuses for securities the CSSF assumes no responsibility as to the economic and financial soundness of the transaction and the quality or solvency of the Issuer. The Issuer has requested the CSSF to provide the competent authority in Austria with a certificate of approval attesting that this Prospectus has been drawn up in accordance with Article 5.3 of Directive 2003/71/EC of the European Parliament and the Council of 4 November 2003 (the "Prospectus Directive"). Prospective investors should be aware that an investment in the Notes involves risks and that, if certain risks, in particular those described in the chapter "Risk Factors" materialise, the investors may lose all or a very substantial part of their investment. A prospective investor should conduct its own thorough analysis (including its own accounting, legal and tax analysis) prior to deciding whether to invest in the Notes as any evaluation of the suitability for an investor of an investment in the Notes depends upon a prospective investor's particular financial and other circumstances. This Prospectus does not constitute an offer to sell, or the solicitation of an offer to buy Notes in any jurisdiction where such offer or solicitation is unlawful. In particular, the Notes have not been and will not be registered under the United States Securities Act of 1933 (the "Securities Act"). This Prospectus constitutes a prospectus for the purpose of Article 5.3 of the Prospectus Directive and relevant implementing legislation in Luxembourg. ISIN: AT0000A0VL70

JOINT-LEAD MANAGERS

Erste Group Bank AG Prospectus dated 14 June 2012

UniCredit Bank Austria AG

RESPONSIBILITY STATEMENT Borealis, with its seat in Vienna and its business address at Wagramerstraße 17-19, 1220 Vienna, Austria, registered with the Austrian companies register under registration number FN 269858 a, assumes responsibility for the information contained in this Prospectus and hereby declares that, having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import.

NOTICE This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the Notes offered hereby and does not constitute an offer to sell or a solicitation of an offer to buy any Notes offered hereby to any person in any jurisdiction in which it is unlawful to make any such offer or solicitation to such person. Neither the delivery of this Prospectus nor any sale made in connection herewith shall, under any circumstances, create an implication that there has been no change in the affairs of Borealis or its affiliated companies (together the "Borealis Group" or the "Group") since the date hereof or that there has been no adverse change in the financial position of Borealis and the Borealis Group since the date hereof or that any other information supplied in connection with the Offering is correct as of any date subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same. Any material new circumstances or any material incorrectness or inaccuracy as to the statements contained in the Prospectus that could influence the assessment of the Notes issued in the Offering and that occur or are determined between the approval of the Prospectus by the CSSF and the final end of the public offer, or if earlier, the admission to trading on a regulated market of Notes under the Prospectus will be included and published in a supplement to the Prospectus in accordance with the Prospectus Directive and relevant implementing legislation in Luxembourg. This Prospectus has been prepared by the Issuer in connection with the Offering solely for the purpose of enabling prospective investors to consider the purchase of the Notes. Reproduction and distribution of this Prospectus or disclosure or use of the information contained herein for any purpose other than considering an investment in the Notes is prohibited. The information contained in this Prospectus has been provided by Borealis and other sources identified herein. No person has been authorised to give any information or to make any representation not contained in this Prospectus in connection with the Offering and, if given or made, any such information or representation should not be relied upon as having been authorised by Borealis. The contents of this Prospectus are not to be construed as legal, business or tax advice. Each prospective investor should consult its own lawyer, financial adviser or tax adviser for legal, financial or tax advice. This document comprises a Prospectus for the public offering of the Notes, issued by Borealis and for the admission to listing of the Notes on the Second Regulated Market (Geregelter Freiverkehr) of the Vienna Stock Exchange. This document has been prepared in accordance with annexes IV and V of Commission Regulation (EC) No 809/2004 of 29 April 2004, as amended. The Notes offered hereby have not been and will not be registered under the Securities Act or with any authority of any state of the US, or the applicable securities laws of Australia, Canada, Japan, and

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the United Kingdom, and may not be offered or sold in the US or to, or for the account of, any US persons or to any person resident in Australia, Canada, Japan, the United Kingdom and the US. The most recent financial information contained in this Prospectus are the internal unaudited consolidated Q1 figures from the Issuer. In this Prospectus, unless otherwise specified or unless the context otherwise requires, references to "EUR", "Euro" and "€" are references to the currency introduced at the third stage of European economic and monetary union pursuant to the Treaty establishing the European Community (as amended from time to time).

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TABLE OF CONTENTS RESPONSIBILITY STATEMENT .........................................................................................................2 NOTICE ...................................................................................................................................................2 GENERAL INFORMATION...................................................................................................................7 FORWARD-LOOKING STATEMENTS....................................................................................... 7 DOCUMENTS INCORPORATED BY REFERENCE ................................................................ 7 SUPPLEMENT TO THE PROSPECTUS ................................................................................... 8 SOURCES OF INFORMATION ................................................................................................... 9 SUMMARY OF THE PROSPECTUS ................................................................................................10 1. THE BOREALIS GROUP......................................................................................................10 2. SUMMARY OF THE OFFERING.........................................................................................10 3. SUMMARY OF RISK FACTORS .........................................................................................17 4. SELECTED FINANCIAL INFORMATION OF THE ISSUER ...........................................20 GERMAN TRANSLATION OF SUMMARY ......................................................................................21 1. DIE BOREALIS GRUPPE .....................................................................................................21 2. ZUSAMMENFASSUNG DES ANGEBOTS ........................................................................22 3. ZUSAMMENFASSUNG DER RISIKOFAKTOREN...........................................................29 4. AUSGEWÄHLTE FINANZINFORMATIONEN DER EMITTENTIN.................................32 RISK FACTORS ...................................................................................................................................34 1. RISKS REGARDING THE ISSUER, THE GROUP AND ITS BUSINESS ACTIVITIES ..................................................................................................................................................34 2. RISKS REGARDING THE NOTES .....................................................................................40 TERMS AND CONDITIONS OF THE NOTES.................................................................................47 USE OF PROCEEDS ..........................................................................................................................64 BOREALIS AG ......................................................................................................................................65 1. GENERAL ...............................................................................................................................65 2. HISTORY AND DEVELOPMENT ........................................................................................65 2. CORPORATE PURPOSE ....................................................................................................67 3. SHARE CAPITAL ...................................................................................................................67 4. CORPORATE GOVERNANCE ............................................................................................67 5. SHAREHOLDERS .................................................................................................................67 6. DEPENDENCY WITHIN THE GROUP ...............................................................................69 7. ORGANISATIONAL STRUCTURE .....................................................................................69 8. LEGAL PROCEEDINGS .......................................................................................................74 9. INVESTMENTS ......................................................................................................................74 10. MATERIAL CONTRACTS ....................................................................................................74 BUSINESS OVERVIEW ......................................................................................................................75

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1. GENERAL ...............................................................................................................................75 2. MAIN ACTIVITY .....................................................................................................................75 3. NEW PRODUCTS AND ACTIVITIES .................................................................................77 MARKETS AND SECTOR ENVIRONMENT ....................................................................................78 1. GENERAL ...............................................................................................................................78 2. POLYOLEFINS.......................................................................................................................78 3. BASE CHEMICALS ...............................................................................................................79 MANAGEMENT AND SUPERVISORY BOARD .............................................................................80 1. MANAGEMENT BOARD ......................................................................................................80 2. SUPERVISORY BOARD ......................................................................................................81 3. ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES CONFLICTS OF INTERESTS ............................................................................................................................84 SELECTED FINANCIAL INFORMATION .........................................................................................85 1.1 KEY FIGURES .......................................................................................................................85 1.2 RECENT EVENTS .................................................................................................................85 1.3 PROFIT FORECASTS OR ESTIMATES............................................................................85 1.4 SIGNIFICANT CHANGES, MATERIAL ADVERSE CHANGES, TRENDS ...................86 TAXATION.............................................................................................................................................87 1. AUSTRIA .................................................................................................................................87 2. LUXEMBOURG ......................................................................................................................90 SUBSCRIPTION AND SALE ..............................................................................................................92 1. SUBSCRIPTION PERIOD ....................................................................................................92 2. ISSUE PRICE AND ITS DETERMINATION ......................................................................92 3. CONDITIONS TO WHICH THE OFFER IS SUBJECT ....................................................92 4. AGGREGATE NOMINAL AMOUNT OF THE OFFER .....................................................92 5. SALE TO RETAIL INVESTORS ..........................................................................................93 6. MINIMUM AND MAXIMUM SUBSCRIPTION AMOUNT .................................................93 7. FORM, CENTRAL SECURITIES DEPOSITARY ..............................................................93 8. PLACEMENT AND UNDERWRITING ................................................................................93 9. PUBLICATION OF INFORMATION WHICH IS RELEVANT FOR THE OFFER ..........93 10. DELIVERY OF NOTES .........................................................................................................94 SELLING RESTRICTIONS .................................................................................................................95 1. GENERAL ...............................................................................................................................95 2. EUROPEAN ECONOMIC AREA .........................................................................................95 3. NOTICE TO INVESTORS IN CANADA ..............................................................................96 4. NOTICE TO INVESTORS IN JAPAN .................................................................................96 5. NOTICE TO INVESTORS IN THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND .........................................................................................................96

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6. NOTICE TO INVESTORS IN THE UNITED STATES OF AMERICA AND ITS TERRITORIES .......................................................................................................................97 GENERAL INFORMATION.................................................................................................................98 1. LISTING AND ADMISSION TO TRADING ........................................................................98 2. STATUTORY AUDITORS ....................................................................................................98 3. AUTHORISATION .................................................................................................................98 4. CLEARING AND SETTLEMENT .........................................................................................98 5. RATINGS ................................................................................................................................98 6. YIELD .......................................................................................................................................98 7. REPRESENTATION OF NOTEHOLDERS ........................................................................98 8. DOCUMENTS ON DISPLAY................................................................................................99 9. OTHER ....................................................................................................................................99 10. INTEREST OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE/OFFER ........................................................................................................................99 GLOSSARY AND LIST OF ABBREVIATIONS AND DEFINITIONS ..........................................100

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GENERAL INFORMATION FORWARD-LOOKING STATEMENTS This Prospectus contains statements under the captions "Prospectus Summary", "Risk Factors" and elsewhere that are, or may be deemed to be, "forward-looking statements". In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the words "believes", "estimates", "anticipates", "expects", "intends", "targets", "may", "will", "plans", "continue" or "should" or, in each case, their negative or other variations or comparable terminology or by discussions of strategies, plans, objectives, goals, future events or intentions. The forward-looking statements contained in this Prospectus include certain "targets". These targets reflect goals that Issuer is aiming to achieve and do not constitute forecasts. The forward-looking statements contained in this Prospectus include all matters that are not historical facts and include statements regarding the Issuer's intentions, beliefs or current expectations concerning, among other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and dividend policy and the industries and markets in which the Issuer operates. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events, and depend on circumstances, that may or may not occur in the future. Forwardlooking statements are not guarantees of future performance. Prospective investors should not place undue reliance on these forward-looking statements. Many factors could cause the actual results, performance or achievements of the Issuer to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Some of these factors are discussed in more detail under "Risk Factors" and elsewhere. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Prospectus as anticipated, believed, estimated or expected. The Issuer does not intend, and does not assume any obligation, to update forward-looking statements set forth in this Prospectus.

DOCUMENTS INCORPORATED BY REFERENCE This Prospectus should be read and construed in conjunction with the following documents which are hereby incorporated into the Prospectus: Document / Heading

Annual Report 2010 containing the English translation of the audited consolidated financial statements for the year 2010 English translation of the report of the auditors English translation of the consolidated income statement English translation of the consolidated statement of comprehensive income English translation of the consolidated balance sheet English translation of the consolidated statement of changes in

Page reference in the relevant financial report

58-59 62 63 64-65 66

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Document / Heading equity English translation of the consolidated cash flow English translation of the notes

Annual Report 2011 containing the English translation of the audited consolidated financial statements for the year 2011 English translation of the report of the auditors English translation of the consolidated income statement English translation of the consolidated statement of comprehensive income English translation of the consolidated balance sheet English translation of the consolidated statement of changes in equity English translation of the consolidated cash flow English translation of the notes

Page reference in the relevant financial report 67 68-110

62-63 66 67 68-69 70 71 72-114

For the avoidance of doubt, such parts of the annual report of the Issuers for the financial years 2010 and 2011, respectively, which are not explicitly listed in the table above, are not incorporated by reference into this Prospectus. Any information not listed above, but included in the documents incorporated by reference is given for information purposes only. The above documents shall be deemed to be incorporated in, and form part of, this Prospectus, save that any statement contained in such a document shall be deemed to be modified or superseded by the Issuer for the purpose of this Prospectus to the extent that a statement contained in this Prospectus modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. Any document incorporated by reference into this Prospectus will be available for inspection at the specified office of the Issuer, Wagramerstraße 17-19, 1220 Vienna, Austria, during normal business hours, as long as the Notes are outstanding and in electronic form on the website of the Issuer under "www.borealisgroup.com" as well as on the website of the Luxembourg Stock Exchange under "www.bourse.lu".

SUPPLEMENT TO THE PROSPECTUS The Issuer is obliged by the provisions of the Prospectus Directive and relevant implementing legislation in Luxembourg, to prepare a supplement to this Prospectus and supply to the CSSF such number of copies of such supplement and publish such supplement as may be requested and relevant applicable legislation requires if at any time during the duration of the Offering there is a significant new factor, material mistake or inaccuracy relating to information contained in this Prospectus which is capable of affecting the assessment of any Notes and which arises or is noted between the time when the Prospectus is approved and the final closing of the Notes to the public or, as the case may be, the time when trading on a regulated market begins.

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SOURCES OF INFORMATION The financial figures contained in this Prospectus have been – if not mentioned otherwise – derived from the audited consolidated annual financial statements for the business years ending 31 December 2010 and 31 December 2011. The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware, no facts have been omitted which would render the reproduced information inaccurate or misleading. Information in this Prospectus which has been sourced from third parties has been accurately reproduced and, as far as the Issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

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SUMMARY OF THE PROSPECTUS The following summary should be read as an overview of this Prospectus, and any decision to invest in the Notes should be based on consideration of the Prospectus as a whole, including the documents incorporated by reference and the risks of investing in the Notes as set out in "Risk Factors". This summary is not complete and does not contain all the information that investors should consider in connection with any decision relating to the Notes. Where a claim relating to the information contained in this Prospectus is brought before a court in a member state of the EU, the plaintiff may, under the national legislation of the state where the claim is brought, be required to bear the costs of translating this Prospectus before the legal proceedings are initiated. In the event that such legal proceedings are initiated before a court in Austria, a German translation of the Prospectus may be required, and the costs thereof will have to be borne initially by the plaintiff investor, who will be reimbursed for such costs, or parts thereof, by the other party or parties to the proceedings only if the plaintiff investor is successful in such proceedings. Persons, who have submitted the summary including any translation thereof and applied for its notification, can be made liable, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus. Terms not defined in this summary have the same meaning as in the terms and conditions of the Notes (the "Terms and Conditions of the Notes").

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THE BOREALIS GROUP Borealis AG is a stock corporation (Aktiengesellschaft) incorporated and existing under Austrian law and has its business address at Wagramerstraße 17-19, 1220 Vienna, Austria. Its telephone number is +43 (0) 1 224 00-0. At 31 December 2011, the Issuer's share capital (Grundkapital) amounts to EUR 300,000 and is divided into 300,000 no-par value registered shares (nennbetragslose Namensaktien). The share capital of the Issuer is fully paid-in. At 31 December 2011 the shareholders of the Issuer are International Petroleum Investment Company of Abu Dhabi with a direct and indirect (via IPIC Beta Holdings GmbH) participation of 64 per cent in total and OMV Aktiengesellschaft with a direct and indirect (via OMV Refining & Marketing GmbH) participation of 36 per cent in total. Borealis is organized in two business divisions, polyolefins and base chemicals. Borealis provides plastic materials and solutions to the infrastructure, advanced packaging and automotive markets across Europe, the Middle East and Asia. Borealis' production facilities, innovation and service centres work with customers in more than 120 countries.

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SUMMARY OF THE OFFERING Description

Public Offering of up to EUR200,000,000 Senior Fixed Rate Notes 2012-2019

Issuer

Borealis AG

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Joint Lead Managers

Erste Group Bank AG, UniCredit Bank Austria AG

Paying Agent

Erste Group Bank AG (the "Paying Agent")

Aggregate Nominal Amount

Up to EUR 200,000,000. The final aggregate nominal amount of the issue of Notes will be determined by the Issuer in agreement with the Joint-Lead Managers within a book-building procedure which is expected to take place on or around 20 and 21 June 2012. Information on the aggregate nominal amount will be filed with the CSSF and published on the website of the Luxembourg stock exchange and on the website of the Issuer (www.borealisgroup.com).

Denomination

The Notes are issued in a nominal amount of EUR 1,000 (the "Nominal Amount") each.

Issue Date

The Notes are expected to be issued on or around 2 July 2012 (the "Issue Date").

Issue Price

The issue price (the "Issue Price") is currently not fixed and is expected to be between 98 per cent and 102 per cent of the Nominal Amount. The Issue Price may be calculated by adding the selling commission for private investors of 1.5 per cent to the price for institutional investors (the "Re-offer Price") which will be determined on the basis of the interest rate, the maturity, the yield and the demand of institutional investors in the course of a book-building procedure on or around 20 and 21 June 2012. The Issue Price will be published prior to the beginning of the Subscription Period. The Syndicate Banks are entitled to give discounts to customers.

Redemption Amount

100 per cent of the Nominal Amount

Form

The Notes are entirely represented by a global changeable security pursuant to Sec 24 lit b of the Austrian Depository Act (the "Global Note") without interest coupons. The Global Note is signed manually by authorised signatories of the Issuer and shall be authenticated by or on behalf of the Paying Agent. Claims for the delivery of definitive

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Notes and interest coupons are excluded. The Global Note will be deposited with Oesterreichische Kontrollbank Aktiengesellschaft as central securities depositary (the "Central Securities Depositary") until all obligations of the Issuer under the Notes have been satisfied. The holders of Notes will receive co-ownership participations or rights in the Global Note that are transferable in accordance with the general business conditions of the Central Securities Depositary and outside of the Republic of Austria in accordance with the provisions of Clearstream Banking, société anonyme, Luxemburg ("CBL") and/or Euroclear Bank S.A./N.V., Brussels, Belgium ("Euroclear") (CBL and Euroclear together the "Clearing System").

Status of the Notes

The Notes constitute direct, unconditional, unsubordinated and (subject to the provisions of § 3 of the Terms and Conditions) unsecured obligations of the Issuer and rank pari passu without any preference among themselves and at least pari passu with all other unsubordinated and unsecured obligations of the Issuer, present or future, save for obligations which are preferred by applicable mandatory law.

Interest

Each Note shall bear interest on its then outstanding nominal amount at the Interest Rate as from (and including) the Issue Date. Interest is payable annually in arrear on 2 July of each year (each an "Interest Payment Date") commencing on 2 July 2013. The interest rate (the "Interest Rate") is currently not fixed and will be determined in the course of a book-building procedure on or around 20 and 21 June 2012.The Interest Rate will be published prior to the beginning of the Subscription Period.

Redemption

The Notes will be redeemed at their Nominal Amount on 2 July 2019 (the "Redemption Date") to the extent they have not previously been redeemed or purchased and cancelled partially or fully.

Issuer Call Right and Early Redemption due to a Tax Event.

If as a result of a change of, or a supplement to, the tax laws applicable by or in the Republic of Austria or a change in, or supplement to, their official interpretation, the Issuer

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at the time of the next following Interest Payment Date would be required to pay Additional Amounts as defined in § 7(1) of the Terms and Conditions) and the Issuer cannot avoid such obligation by measures reasonable for the Issuer, the Issuer will be entitled to redeem all (but not parts of the) Notes at par plus accrued interest until the date of redemption, if any. Such early redemption must however not (i) occur with effect earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such Additional Amounts, if at that time a payment in respect of the Notes would be then due, or (ii) occur, if at the time when the redemption is effected, the obligation to pay or to deduct or withhold Additional Amounts ceases to be in force. Such early redemption shall be notified by the Issuer with at least 30 days' notice to the Paying Agent by registered letter, provided that such redemption shall be effective on the date of delivery of the redemption notice to the Paying Agent if the redemption is made public to the Noteholders pursuant to § 13 of the Terms and Conditions. It shall be irrevocable, shall state the date fixed for the repayment and shall contain a summary explanation setting out the circumstances constituting the Issuer's repayment right.

Negative Pledge

During the term of the Notes but no longer than until all amounts in respect of interest and principal for the Notes have been provided to the Paying Agent that has been appointed pursuant to § 10 of the Terms and Conditions, the Issuer undertakes: (a)

for other Capital Market Indebtedness (as defined below) as well as for guarantee obligations or liabilities for other Capital Market Indebtedness (i) not to create any Security (as defined below), and (ii) not to cause third parties to create any Security, or assume any Liability, to secure Capital Market Indebtedness of the Issuer or its Subsidiaries or guarantee obligations or liabilities for other Capital Market Indebtedness of the Issuer or its Subsidiaries, unless the Noteholders at the same time and in the same rank participate in such Security or Liability or

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in any other security or liability, which has been recognised as at least equal security or liability, as the case may be, by an internationally recognised public accountant that is independent from an existing auditor of the Issuer or any of its Subsidiaries; and (b)

to procure that its Subsidiaries in relation to other Capital Market Indebtedness as well as to guarantee obligations or liabilities for other Capital Market Indebtedness (i) do not create any Security or assume any Liability, and (ii) cause third parties to not create any Security, or assume any Liability, to secure Capital Market Indebtedness of the Issuer or its Subsidiaries or guarantee obligations or liabilities for other Capital Market Indebtedness of the Issuer or its Subsidiaries, unless the Noteholders at the same time and in the same rank participate in such Security or Liability or in any other security or liability, which has been recognised as at least equal security or liability, as the case may be, by an internationally recognised public accountant that is independent from an existing auditor of the Issuer or any of its Subsidiaries. "Capital Market Indebtedness" shall mean any present or future obligation of the Issuer and/or the Subsidiaries to pay money (including obligations under guarantees or other liability arrangements) from bonds, notes or other similar debt instruments, as well as loan deeds (Schuldscheindarlehen), regardless of whether they are admitted to trading on a stock exchange or a regulated market, or whether they are included in a multilateral trading facility. "Security" means mortgages, pledges, retention rights or other encumbrances and security rights over the existing or future assets or income of the Issuer and/or the Subsidiaries. "Liabilities" means guarantees, sureties and other

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assumptions of, and accessions to, liability. "Subsidiary" means any corporation or partnership, in which the Issuer, directly or indirectly, holds more than 50 per cent of the capital and/or the voting rights or which are otherwise directly or indirectly under the controlling influence of the Issuer and/or its Subsidiaries within the meaning of this provision.

No ordinary termination

Noteholders shall have no right of ordinary termination. This shall not affect the Noteholders' extraordinary termination rights for cause, in particular upon occurrence of the events described in § 8 (2) of the Terms and Conditions.

Extraordinary Termination - Events of Default

Each Noteholder shall be entitled to terminate the Notes for cause and to demand their immediate redemption at their Nominal Amount together with interest accrued until the date of redemption (exclusive). In particular, a good cause for termination shall be deemed to have occurred if any of the Event of Defaults as described in § 8 (2) of the Terms and Conditions occurs: Expiry of termination right. The right to declare Notes due shall lapse if the Event of Default has been cured before the right is validly exercised. No event or circumstance other than an event specified in § 8 (2) of the Terms and Conditions shall entitle Noteholders to declare their Notes due and payable prior to their stated maturity, save as expressly provided for in these Terms and Conditions and subject to applicable mandatory law.

Change of Control

Each Noteholder is entitled to terminate the Notes for cause and to demand their immediate redemption at their Nominal Amount together with interest accrued until the date of redemption (exclusive) if a Change of Control (as defined below) occurs, except where an internationally recognised rating agency assigns to the Issuer within 60 days after such Change of Control a rating of at least "BBB" in relation to its long-term senior bonds. The Issuer shall publish a Change of Control and the assignment of a rating, if any, without delay pursuant to § 13 of the Terms and Conditions. A termination in accordance with this subpara (i) shall only be effective where the respective Default Notice pursuant to para (3) is made within 30 days after

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the expiry of the initial 60 days' period; a "Change of Control Event" shall be deemed to have occurred, if at any time a person or several persons acting in concert or third parties or parties acting for such person(s) (other than OMV Aktiengesellschaft and/or International Petroleum Investment Company of Abu Dhabi and/or any of their wholly owned subsidiaries), directly or indirectly acquire (i) more than 50 per cent of the voting rights connected with the shares of the Issuer, or (ii) the right to determine the majority of the members of the management board (Vorstand) and/or the shareholders' representatives in the supervisory board (Aufsichtsrat).

Cross-Default

Each Noteholder is entitled to terminate the Notes for cause and to demand their immediate redemption at their Nominal Amount together with interest accrued until the date of redemption (exclusive) if a Change of Control (as defined below) occurs, i.e. an obligation exceeding EUR 30,000,000 (or the equivalent thereof in any other currency) of the Issuer or a Material Subsidiary (as defined in the Terms and Conditions) which has been finally established by an (arbitration) court or a public authority is not fulfilled, and such failure continues for more than four weeks after the Paying Agent has been notified thereof by a Noteholder.

Taxation

All payments of principal and interest in respect of the Notes will be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature ("Taxes") imposed, levied, collected, withheld or assessed by the Republic of Austria or any political subdivision or any authority of or in the Republic of Austria that has power to tax, unless the Issuer is compelled by a law or other regulation to make such withholding or deduction. In that event, the Issuer will pay, subject to the exemptions of § 7 (2) of the Terms and Conditions, such additional amounts as will result in receipt by the Noteholders of the same amounts as they would have received if no such withholding or deduction had been required.

Governing law

The Notes are governed by the laws of the Republic of Austria.

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3.

Place of Jurisdiction

For all disputes which may arise out or in connection with the Notes, the commercial court competent for Vienna, Inner City, shall have exclusive jurisdiction. The submission to the jurisdiction of the courts of Vienna shall not (and shall not be construed so as to) limit the right of any Noteholder (in particular consumers) to take proceedings in any other court of competent jurisdiction , nor shall the taking up of proceedings in any one or more jurisdictions preclude the taking up of proceedings in any other jurisdiction (whether concurrently or not) if and to the extent permitted by law.

Place of Jurisdiction in relation to Consumers

In relation to any dispute of a consumer with the Issuer out of or in connection with the Notes (including disputes in connection with non-contractual obligations arising out of or in connection with the Notes) the court being competent in said matters and for such territory located either at the place of residence of the consumer or at the place of the Issuer's domicile or any other court being competent due to a statutory provision shall at the consumer's choice have jurisdiction.

Place of Performance

Place of performance shall be Vienna, Republic of Austria.

Listing

It is intended to apply for the admission to trading of the Notes on the Second Regulated Market of the Vienna Stock Exchange.

International Securities Identification Number (ISIN)

AT0000A0VL70

SUMMARY OF RISK FACTORS The Noteholders are subject to a number of risks which – in case they materialise – could have a material adverse effect on the Issuer's business, results of operations and financial condition and the value of the Notes. Each of the risks highlighted below should be carefully considered together with the other information contained in this Prospectus, prior to any investment decision. Prospective investors should note that the risks described below are not the only risks relating to the Issuer and its business and to the Bond. The Issuer has described only those risks that it considers to be material and of which it is currently aware. The risks are described in detail under the caption "Risk Factors" (page 34 et seq). The risks are, inter alia, the following:

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Risks regarding the Issuer and its business activities: Markets and general business risks -

The Borealis Group is subject to competition in all markets where it is active

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The Borealis Group is subject to risks in the petrochemical industry, such as its cyclicality and volatility

-

Borealis Group is subject to market risks in connection with its dependency on the supply market (commodity risk)

-

Borealis Group depends on demand from plastic and melamine processing industries and from agriculture

-

Borealis Group may not be able to continue its business strategy

-

The Issuer and the Group are subject to the risk of loss of key personnel

-

Borealis Group may be exposed to trade receivables credit risk

-

Borealis Group's customers' purchases of products and services could be adversely affected by a global economic downturn or a substantial slowdown in economic growth, which could lead to recessions in the Issuer's industry and could have a negative impact on the operating results and financial condition of Borealis Group

-

Borealis Group may be subject to higher capital costs due to the capital requirements for banks

-

Borealis Group is subject to force majeure risks or the risk of acts of sabotage

-

Borealis Group is exposed to environmental risks

-

Borealis Group is subject to risks associated with extensive environmental and health and safety laws and regulations which result in costs relating to compliance and remediation that may adversely affect its business, prospects and/or results of operations

-

Borealis Group is subject to the risk of property damage

-

Borealis Group is subject to risks related to product liability and claims

-

Borealis Group is subject to the risk of adversely changing legislative environments in all markets where it is active (regulatory risk)

-

Borealis Group may experience operational and/or technological problems which may delay or hinder daily activities or progress of ongoing and planned projects

-

Borealis Group could be subject to crime, corruption and money laundering in the countries where the Issuer operates which may adversely affect the Group's ability to conduct its business.

-

Borealis Group is exposed to risks relating to disputes and litigation

Counterparty risk -

Borealis Group is subject to counterparty risks in connection with its dependency on the supply market

18

-

Borealis Group is subject to risks in connection with its exposure to subcontractors and contractual partners

-

The Issuer is subject to risks in connection with its dependency on its shareholders and joint venture partners

-

Borealis Group is exposed to liquidity risks

-

The Issuer is subject to risks in connection with guarantees it has issued

Financial risks -

Borealis Group is subject to risks in connection with financial and other covenants under certain credit facilities

-

Borealis Group is subject to currency risk

-

Borealis Group is subject to interest rate risks

Risks regarding the Notes: -

There is a risk of partial or total failure of the Issuer to make interest and/or redemption payments that the Issuer is obliged to make under the Notes (Credit Risk)

-

There is a risk of structural subordination

-

Investors in the Notes assume the risk that the credit spread of the Issuer widens and that as a consequence the price of the Notes falls (Credit Spread Risk)

-

The investors face a risk in case of an early redemption and in case of reinvestment (Risk of Early Redemption/Reinvestment Risk)

-

The Issuer may incur additional indebtedness ranking pari passu with the Notes

-

Fixed rate securities are exposed to specific market risks (Market Price Risk)

-

There is a risk of inflation

-

The holders of the Notes receive payments on the Notes in EUR and may be subject to currency risk if Noteholders are not located in the Euro-zone

-

There is a risk that an active trading market for the Notes may not develop

-

There is a risk that the markets on which the Notes are traded, could be illiquid (Liquidity Risk)

-

There is a risk that trading in the Notes will be suspended, interrupted or terminated

-

If a loan or credit is used to finance the acquisition of the Notes, the loan may significantly increase the risk of a loss

-

There is a risk that incidental costs related in particular to the purchase and sale of the Notes may significantly or completely reduce the profit potential of the Notes

-

Investors have to rely on the functionality of the relevant clearing system

-

Legality of Purchase

-

The tax impact of an investment in the Notes should be carefully considered

19

4.

-

An Austrian court can appoint a trustee (Kurator) for the Notes to exercise the rights and represent the interests of holders of the Notes on their behalf

-

Changes in applicable laws, regulations or regulatory policies may have an adverse effect on the Issuer, the Notes and the investors

-

Changes in the EU Savings Directive could negatively affect investors

SELECTED FINANCIAL INFORMATION OF THE ISSUER The financial data provided below has been published in the Issuer's press release on the Q1 figures dated 11 May 2012: Key figures in EUR million (unaudited, rounded)

Q1 2012

Q1 2011

Net Sales

1,882

1,859

Net profit

140

174

(186)

(195)

40%

43%

Reduction / (increase) in net interest-bearing debt Gearing

(1)

Source: Accounting system of the Issuer for first quarter of the business year 2012 (1)

Gearing is calculated as current and non-current loans borrowings minus cash and cash equivalents divided by total equity.

The financial data provided below has been derived from the Issuer's audited consolidated annual financial statements for the business years ended 31 December 2011 and 31 December 2010: Key figures in EUR million (rounded) Net Sales Net profit for the year

Financial year 2011

Financial year 2010

7,096

6,269

507

333

EBITDA

(1)

569

610

Gearing

(2)

35%

37%

6,128

5,630

Total Assets

Source: Audited consolidated annual financial statements of the Issuer for the business years ended 31 December 2010 and 31 December 2011 (1)

EBITDA is calculated as operating profit plus depreciation and amortisation.

(2)

Gearing is calculated as current and non-current loans borrowings minus cash and cash equivalents divided by total equity.

20

German Translation of Summary Die folgende Zusammenfassung sollte nur als Einleitung zum Prospekt verstanden werden und jede Kaufentscheidung sollte auf dem Prospekt als Ganzes, einschließlich der durch Verweis einbezogenen Dokumente und der Risikofaktoren (beschrieben in der Rubrik "Risk Factors"), beruhen. Diese Zusammenfassung ist nicht vollständig und enthält nicht alle Informationen, welche Anleger benötigen, um eine Kaufentscheidung zu treffen. Für den Fall, dass vor Gericht Ansprüche aufgrund der in diesem Prospekt enthaltenen Informationen geltend gemacht werden, könnte der als Kläger auftretende Anleger in Anwendung der einzelstaatlichen Rechtsvorschriften der EWR-Vertragsstaaten die Kosten für die Übersetzung des Prospekts vor Prozessbeginn zu tragen haben. Für den Fall, dass Ansprüche vor einem österreichischen Gericht geltend gemacht werden, könnte es sein, dass eine deutsche Übersetzung dieses Prospektes notwendig ist und die damit verbundenen Kosten vom als Kläger auftretenden Anleger zu tragen sind. Der als Kläger auftretende Anleger könnte nur bei erfolgreicher Durchsetzung seiner Ansprüche den Ersatz von Übersetzungskosten ganz oder teilweise geltend machen. Diejenigen Personen, die die Zusammenfassung einschließlich einer Übersetzung davon vorgelegt und deren Meldung beantragt haben, können haftbar gemacht werden, jedoch nur für den Fall, dass die Zusammenfassung irreführend, unrichtig oder widersprüchlich ist, wenn sie zusammen mit den anderen Teilen des Prospekts gelesen wird. Worte und Ausdrücke, die in den Anleihebedingungen definiert sind, haben in diesem Abschnitt dieselbe Bedeutung.

1.

DIE BOREALIS GRUPPE Borealis AG ("Borealis" oder die "Emittentin" und zusammen mit ihren konsolidierten Tochterunternehmen, die "Borealis Gruppe" oder die "Gruppe") mit Sitz in Wien und der Geschäftsanschrift Wagramerstraße 17-19, 1220 Wien, eingetragen im Firmenbuch unter der FN 269858 a, ist eine nach österreichischem Recht eingetragene Aktiengesellschaft. Ihre Telefonnummer ist +43 (0) 1 224 00-0. Das Grundkapital der Emittentin beträgt am 31.12.2011 EUR 300.000 und setzt sich aus 300.000 nennwertlosen Stückaktien (Namensaktien) zusammen. Das Grundkapital ist zur Gänze einbezahlt. Die Aktionäre der Emittentin sind am 31.12.2011 die International Petroleum Investment Company aus Abu Dhabi mit einer direkten und indirekten (via IPIC Beta Holdings GmbH) Beteiligung von insgesamt 64 %, und die OMV Aktiengesellschaft mit einer direkten und indirekten (via OMV Refining & Marketing GmbH) Beteiligung von insgesamt 36 %. Borealis ist in zwei Geschäftsbereiche (Segmente) untergliedert: Polyolefine und Basischemikalien: Borealis stellt Kunststofflösungen für die Märkte Infrastruktur, anspruchsvolle Verpackungen und Automobile in Europa, dem Mittleren Osten und Asien her. Mit ihren Produktionsstätten, Innovationszentren und Servicezentren bedient die Emittentin Kunden in mehr als 120 Ländern.

21

2.

ZUSAMMENFASSUNG DES ANGEBOTS Beschreibung

Öffentliches Angebot von bis zu EUR 200.000.000 fixverzinslichen Teilschuldverschreibungen

Emittentin

Borealis AG

Joint Lead Managers

Erste Group Bank AG, UniCredit Bank Austria AG

Zahlstelle

Erste Group Bank AG (die "Zahlstelle")

Gesamtnennbetrag

Bis zu EUR 200.000.000. Der endgültige Gesamtnennbetrag der Teilschuldverschreibungen wird von der Emittentin in Abstimmung mit den Joint-Lead Managern im Rahmen eines Bookbuilding Verfahrens festgestellt, das voraussichtlich am oder um den 20 und den 21 Juni 2012 stattfinden wird. Angaben zum Gesamtnennbetrag werden bei der CSSF eingereicht und auf der Internetseite der Luxemburger Börse und jener der Emittentin (www.borealisgroup.com) veröffentlicht.

Stückelung

Die Teilschuldverschreibungen werden in Nennbeträgen von je EUR 1.000 (der "Nennbetrag") ausgegeben.

Begebungstag

Die Teilschuldverschreibungen werden voraussichtlich am oder um den 2.7.2012 (der "Begebungstag") begeben.

Emissionskurs

Der Emissionskurs der Teilschuldverschreibungen (der "Emissionskurs") steht zur Zeit noch nicht fest und wird voraussichtlich zwischen 98% und 102% des Nennbetrags betragen. Der Emissionskurs kann durch Addition der Verkaufsprovision für Privatkunden von 1,5% zum Preis für institutionelle Kunden (der "Re-offer Kurs"), der aufgrund des Zinssatzes, der Laufzeit, der Rendite und der Nachfrage institutioneller Investoren im Zuge eines Bookbuilding Verfahrens voraussichtlich am oder um den 20 und den 21 Juni 2012 ermittelt wird, berechnet werden. Der Emissionskurs wird vor Beginn der Zeichnungsfrist veröffentlicht. Die Syndikatsbanken können Kunden Abschläge auf den Emissionskurs gewähren.

22

Rückzahlungsbetrag

100% des Nennbetrags.

Verbriefung

Die Teilschuldverschreibungen sind zur Gänze durch eine veränderbare Sammelurkunde gemäß § 24 lit b Depotgesetz (die "Sammelurkunde") verbrieft. Die Sammelurkunde trägt die eigenhändigen Unterschriften ordnungsgemäß bevollmächtigter Vertreter der Emittentin und ist von der Zahlstelle oder in deren Namen mit einer Kontrollunterschrift versehen. Der Anspruch auf Ausfolgung effektiver Stücke der Teilschuldverschreibungen und Zinsscheine ist ausgeschlossen. Die Sammelurkunde wird bei der Oesterreichischen Kontrollbank Aktiengesellschaft als Wertpapiersammelbank (die "Wertpapiersammelbank") verwahrt, bis sämtliche Verbindlichkeiten der Emittentin aus den Teilschuldverschreibungen erfüllt sind. Den Anleihegläubigern stehen Miteigentumsanteile oder rechte an der Sammelurkunde zu, die gemäß den allgemeinen Geschäftsbedingungen der Wertpapiersammelbank und außerhalb der Republik Österreich gemäß den Vorschriften der Clearstream Banking, société anonyme, Luxemburg ("CBL") und/oder Euroclear Bank S.A./N.V., Brüssel, Belgien ("Euroclear") (CBL und Euroclear zusammen das "Clearingsystem") übertragen werden können.

Status der Teilschuldverschreibungen

Die Teilschuldverschreibungen begründen unmittelbare, unbedingte, nicht nachrangige und (vorbehaltlich der Bestimmungen des § 3 der Anleihebedingungen) nicht besicherte Verbindlichkeiten der Emittentin und stehen im gleichen Rang untereinander und mindestens im gleichen Rang mit allen anderen gegenwärtigen und zukünftigen nicht nachrangigen und nicht besicherten Verbindlichkeiten der Emittentin, mit Ausnahme von Verbindlichkeiten, die nach geltendem zwingendem Recht vorrangig sind.

Verzinsung

Der jeweils ausstehende Nennbetrag der Teilschuldverschreibungen wird ab und einschließlich dem 2.7.2012 (der "Ausgabetag") mit dem Zinssatz jährlich verzinst. Die Zinsen sind jährlich nachträglich am 2.7. jeden Jahres (jeweils ein "Zinszahlungstag"), beginnend mit dem 2.7.2013, zahlbar. Der Zinssatz (der "Zinssatz")

23

steht noch nicht fest und wird im Rahmen eines Bookbuilding Verfahrens voraussichtlich am oder um den 20 und den 21 Juni 2012 festgelegt. Der Zinssatz wird vor Beginn der Zeichnungsfrist veröffentlich.

Rückzahlung

Die Teilschuldverschreibungen werden am 2.7.2019 (der "Rückzahlungstag") zum Nennbetrag zurückgezahlt, soweit sie nicht vorher ganz oder teilweise zurückgezahlt oder gekauft und entwertet worden sind.

Kündigungsrecht der Emittentin und vorzeitige Rückzahlung aus einem Steuerereignis

Falls die Emittentin als Folge einer Änderung oder Ergänzung der steuerrechtlichen Vorschriften von oder in der Republik Österreich oder als Folge einer Änderung oder Ergänzung der Anwendung oder der offiziellen Auslegung dieser Vorschriften am nächstfolgenden Zinszahlungstag zur Zahlung von zusätzlichen Beträgen (wie in § 7(1) der Anleihebedingungen definiert) verpflichtet ist und die Emittentin diese Verpflichtung nicht durch ihr zumutbare Maßnahmen vermeiden kann, ist die Emittentin berechtigt, die Teilschuldverschreibungen insgesamt, jedoch nicht teilweise, vorzeitig zu kündigen und zum Nennwert zuzüglich allfälliger bis zum für die Rückzahlung festgesetzten Tag aufgelaufener Zinsen zurückzuzahlen. Eine solche vorzeitige Kündigung darf allerdings nicht (i) mit Wirkung früher als 90 Tage vor dem frühest möglichen Termin erfolgen, an dem die Emittentin verpflichtet wäre, solche zusätzlichen Beträge zu zahlen, falls eine Zahlung auf die Teilschuldverschreibungen dann fällig sein würde, oder (ii) erfolgen, wenn zu dem Zeitpunkt, zu dem die Kündigung erfolgt, die Verpflichtung zur Zahlung von zusätzlichen Beträgen oder zum Einbehalt oder Abzug nicht mehr wirksam ist. Eine solche vorzeitige Kündigung ist durch die Emittentin mit einer Kündigungsfrist von mindestens 30 Tagen gegenüber der Zahlstelle mittels eingeschriebenem Brief mitzuteilen, wobei eine solche Kündigung zum Zeitpunkt des Zugangs der Kündigung bei der Zahlstelle wirksam wird, sofern die Kündigung gegenüber den Anleihegläubigern gemäß § 13 bekannt gemacht wird. Sie ist unwiderruflich, muss den für die Rückzahlung festgelegten Termin nennen und eine zusammenfassende Erklärung enthalten, welche die das Rückzahlungsrecht der Emittentin begründenden Umstände darlegt.

24

Negativerklärung

Die Emittentin verpflichtet sich für die Laufzeit der gegenständlichen Anleihe, längstens jedoch bis zu dem Zeitpunkt, an dem alle Beträge an Kapital und Zinsen für die Teilschuldverschreibungen der gemäß § 10 bestellten Zahlstelle vollständig zur Verfügung gestellt worden sind: (a)

für andere Kapitalmarktverbindlichkeiten (wie nachstehend definiert) sowie für Verbindlichkeiten unter Garantien oder Haftungen für andere Kapitalmarktverbindlichkeiten (i) keine Sicherheiten (wie nachstehend definiert) zu bestellen, und (ii) Dritte zu veranlassen, zur Besicherung der von der Emittentin oder ihren Tochtergesellschaften aufgenommenen Kapitalmarktverbindlichkeiten und Verbindlichkeiten der Emittentin oder ihrer Tochtergesellschaften unter Garantien oder Haftungen für Kapitalmarktverbindlichkeiten keine Sicherheiten zu bestellen oder Haftungen zu übernehmen, ohne jeweils sicherzustellen, dass die Anleihegläubiger zur gleichen Zeit und im gleichen Rang an solchen Sicherheiten oder Haftungen oder an anderen Sicherheiten oder Haftungen, die von einem vom bestehenden Abschlussprüfer der Emittentin oder ihrer Tochterunternehmen unabhängigen, international anerkannten Wirtschaftsprüfer als zumindest gleichwertige Sicherheit oder Haftung anerkannt werden, teilnehmen; und

(b)

dafür Sorge zu tragen, dass ihre Tochtergesellschaften für andere Kapitalmarktverbindlichkeiten sowie für Verbindlichkeiten unter Garantien oder Haftungen für andere Kapitalmarktverbindlichkeiten (i) keine Sicherheiten bestellen oder Haftungen übernehmen, und (ii) Dritte zu veranlassen, zur Besicherung der von der Emittentin oder ihren Tochtergesellschaften aufgenommenen Kapitalmarktverbindlichkeiten und den Verbindlichkeiten der Emittentin oder ihrer Tochtergesellschaften unter Garantien oder

25

Haftungen für Kapitalmarktverbindlichkeiten keine Sicherheiten zu bestellen oder Haftungen zu übernehmen, ohne jeweils unverzüglich sicherzustellen, dass die Anleihegläubiger zur gleichen Zeit und im gleichen Rang an solchen Sicherheiten oder Haftungen oder an anderen Sicherheiten oder Haftungen, die von einem vom bestehenden Abschlussprüfer der Emittentin oder ihrer Tochterunternehmen unabhängigen, international anerkannten Wirtschaftsprüfer als zumindest gleichwertige Sicherheit oder Haftung anerkannt werden, teilnehmen. "Kapitalmarktverbindlichkeiten" sind gegenwärtige oder zukünftige Verpflichtungen der Emittentin und/oder der Tochtergesellschaften zur Leistung von Geldern (einschließlich Verpflichtungen aus Garantien oder anderen Haftungsvereinbarungen) aus Anleihen, Teilschuldverschreibungen oder anderen ähnlichen Schuldinstrumenten, sowie Schuldscheindarlehen, unabhängig davon, ob sie an einer Wertpapierbörse oder an einem geregelten Markt zum Handel zugelassen oder in ein multilaterales Handelssystem einbezogen sind. "Sicherheiten" sind Hypotheken, Pfandrechte, Zurückbehaltungsrechte oder sonstige Belastungen und Sicherungsrechte an den gegenwärtigen oder zukünftigen Vermögenswerten oder Einkünften der Emittentin und/oder der Tochtergesellschaften. "Haftungen" sind Garantien, Bürgschaften und sonstige Haftungsübernahmen und -beitritte. "Tochtergesellschaft" ist jede Kapital- oder Personengesellschaft, an der die Emittentin mittelbar oder unmittelbar mehr als 50% des Kapitals und/oder der stimmberechtigten Anteile hält oder die sonst unmittelbar oder mittelbar unter dem beherrschenden Einfluss der Emittentin und/oder ihrer Tochtergesellschaften im Sinne dieser Bestimmung steht.

Kein ordentliches

Ein ordentliches Kündigungsrecht der Anleihegläubiger besteht nicht. Ein Recht zur außerordentlichen Kündigung

26

Kündigungsrecht

der Anleihegläubiger aus wichtigem Grund, insbesondere bei Eintritt der in § 8 (2) der Anleihebedingungen beschriebenen Ereignisse, bleibt hierdurch unberührt.

Außerordentliche Kündigung Kündigungsgründe

Jeder Anleihegläubiger ist berechtigt, seine Teilschuldverschreibungen aus wichtigem Grund zu kündigen und deren sofortige Rückzahlung zum Nennbetrag, zuzüglich bis zum Tag der Rückzahlung (ausschließlich) aufgelaufener Zinsen zu verlangen. Ein wichtiger Grund ist insbesondere dann gegeben, wenn einer der in § 8 (2) der Anleihebedingungen beschriebenen Kündigungsgründe vorliegt. Erlöschen des Kündigungsrechts. Das Kündigungsrecht erlischt, falls der Kündigungsgrund vor Ausübung des Rechts geheilt wurde. Vorbehaltlich anwendbaren zwingenden Rechts berechtigen andere Ereignisse oder Umstände, die keines der in § 8 (2) der Anleihebedingungen genannten Ereignisse darstellen, den Anleihegläubiger nicht dazu, seine Teilschuldverschreibungen vorzeitig zur Rückzahlung fällig zu stellen, es sei denn, dies ist ausdrücklich in diesen Anleihebedingungen bestimmt.

Kontrollwechsel

Jeder Anleihegläubiger ist berechtigt, seine Teilschuldverschreibungen aus wichtigem Grund zu kündigen und deren sofortige Rückzahlung zum Nennbetrag, zuzüglich bis zum Tag der Rückzahlung (ausschließlich) aufgelaufener Zinsen zu verlangen, wenn ein Kontrollwechsel (wie unten definiert) erfolgt, es sei denn, eine international anerkannte Ratingagentur erteilt der Emittentin innerhalb von 60 Tagen nach einem derartigen Kontrollwechsel ein Rating von zumindest "BBB" in Bezug auf deren langfristige, nicht-nachrangige Anleihen. Die Emittentin wird einen Kontrollwechsel und die Erteilung eines allfälligen Ratings unverzüglich gemäß § 13 der Anleihebedingungen bekannt machen. Eine Kündigung nach diesem Unterabsatz (i) ist nur gültig, wenn die entsprechende Kündigungserklärung innerhalb von 30 Tagen nach Ablauf der ursprünglichen 60 Tage Frist erfolgt; Als "Kontrollwechsel" gilt, wenn eine oder mehrere gemeinsam vorgehende Personen oder eine Drittperson oder -personen, die für eine solche Person oder Personen handeln (ausgenommen OMV Aktiengesellschaft und/oder International Petroleum Investment Company of Abu Dhabi und/oder ihre alleinigen Tochtergesellschaften), zu

27

irgendeiner Zeit direkt oder indirekt (i) mehr als 50% der mit den Aktien der Emittentin verbundenen Stimmrechte oder (ii) das Recht, die Mehrzahl der Mitglieder des Vorstands und/oder der Gesellschaftervertreter im Aufsichtsrat zu bestimmen, erworben haben.

Drittverzug

Jeder Anleihegläubiger ist berechtigt, seine Teilschuldverschreibungen aus wichtigem Grund zu kündigen und deren sofortige Rückzahlung zum Nennbetrag, zuzüglich bis zum Tag der Rückzahlung (ausschließlich) aufgelaufener Zinsen zu verlangen, wenn eine von einem (Schieds-) Gericht oder einer Verwaltungsbehörde rechtskräftig festgestellte Schuld der Emittentin oder einer Wesentlichen Tochtergesellschaft (wie in den Anleihebedingungen definiert) mit einem EUR 30,000.000 (oder den Gegenwert in einer anderen Währung) übersteigenden Betrag nicht erfüllt wird und diese Nichterfüllung länger als vier Wochen fortdauert, nachdem die Zahlstelle hierüber von einem Anleihegläubiger eine Benachrichtigung erhalten hat.

Steuern

Sämtliche Zahlungen von Kapital und Zinsen in Bezug auf die Teilschuldverschreibungen werden ohne Einbehalt oder Abzug von Steuern, Abgaben, Festsetzungen oder behördlichen Gebühren jedweder Art (die "Steuern") geleistet, die von der Republik Österreich oder einer ihrer Gebietskörperschaften oder Behörden mit der Befugnis zur Erhebung von Steuern auferlegt, erhoben, eingezogen, einbehalten oder festgesetzt werden, es sei denn, ein solcher Einbehalt oder Abzug ist gesetzlich vorgeschrieben. In einem solchen Falle wird die Emittentin, vorbehaltlich der Bestimmungen des § 7 (2) der Anleihebedingungen solche zusätzlichen Beträge zahlen, sodass die Anleihegläubiger die Beträge erhalten, die sie ohne Einbehalt oder Abzug erhalten hätten.

Anwendbares Recht

Die Teilschuldverschreibungen österreichischem Recht.

Gerichtsstand

Für sämtliche Rechtsstreitigkeiten, die aus oder im Zusammenhang mit den Teilschuldverschreibungen entstehen, ist das in Handelssachen zuständige Gericht für Wien, Innere Stadt, ausschließlich zuständig. Die Gerichtsstandsvereinbarung beschränkt nicht das Recht der Anleihegläubiger (insbesondere Konsumenten),

unterliegen

28

Verfahren vor einem anderen gesetzlich zuständigen Gericht anzustrengen. Ebenso wenig schließt die Einleitung von Verfahren an einem oder mehreren Gerichtsständen die Einleitung von Verfahren an einem anderen Gerichtsstand aus (gleichgültig, ob diese gleichzeitig geführt werden oder nicht), falls und soweit dies rechtlich zulässig ist.

3.

Verbrauchergerichtsstände

Für alle Rechtsstreitigkeiten eines Verbrauchers aus oder im Zusammenhang mit den Teilschuldverschreibungen (einschließlich allfälliger Streitigkeiten im Zusammenhang mit außervertraglichen Schuldverhältnissen, die sich aus oder im Zusammenhang mit den Teilschuldverschreibungen ergeben) gegen die Emittentin ist nach Wahl des Verbrauchers das sachlich und örtlich zuständige Gericht am Wohnsitz des Verbrauchers oder am Sitz des Emittenten oder ein sonstiges, aufgrund der gesetzlichen Bestimmungen zuständiges Gericht zuständig.

Erfüllungsort

Erfüllungsort ist Wien, Republik Österreich.

Börsenotierung

Es ist beabsichtigt, die Zulassung der Teilschuldverschreibungen zum Handel im Geregelten Freiverkehr an der Wiener Börse zu beantragen.

International Securities Identification Number (ISIN)

AT0000A0VL70

ZUSAMMENFASSUNG DER RISIKOFAKTOREN Die Anleihegläubiger unterliegen einer Reihe von Risiken, die im Falle ihres Eintretens einen wesentlichen nachteiligen Einfluss auf die Geschäftstätigkeit, die Finanz-, Vermögens und Ertragslage der Emittentin und den Wert der Teilschuldverschreibungen haben können. Vor dem Treffen einer Kaufentscheidung sollte jedes der unten beschriebenen Risiken gemeinsam mit den im Prospekt enthaltenen Informationen berücksichtigt werden. Potentielle Investoren sollten beachten, dass die unten beschriebenen Risiken nicht die einzigen Risiken in Bezug auf die Emittentin, die Geschäftstätigkeit der Emittentin und die Teilschuldverschreibungen sind. Die Emittentin hat nur jene Risiken angeführt, die ihr bekannt sind und die sie als wesentlich betrachtet. Die Risiken sind genauer unter der Rubrik "Risk Factors" beschrieben (ab Seite 34). Es handelt sich dabei insbesondere um die folgenden Risiken:

29

3.1

Risiken in Bezug auf die Emittentin und ihrer Geschäftstätigkeit:

3.1.1.

Marktrisiken und generelle Geschäftsrisiken -

Die Borealis Gruppe ist in allen Märkten, in denen sie tätig ist, Wettbewerbsrisiken ausgesetzt

-

Die Borealis Gruppe ist den Risiken der petrochemischen Industrie ausgesetzt (zB der Zyklizität und der Volatilität )

-

Die Borealis Gruppe ist Marktrisiken in Verbindung mit ihrer Abhängigkeit vom Beschaffungsmarkt ausgesetzt (Rohstoffrisiko)

-

Die Borealis Gruppe ist von der Nachfrage der plastik- und melaminverarbeitenden Industrie und vom Agrarsektor abhängig

-

Die Borealis Gruppe ist vielleicht nicht dazu im Stande, ihre geschäftliche Strategie weiterzuführen

-

Die Emittentin und die Borealis Gruppe sind dem Risiko, Schlüsselarbeitskräfte zu verlieren, ausgesetzt

-

Die Borealis Gruppe ist dem Ausfallsrisiko von Handelsforderungen ausgesetzt

-

Ein wirtschaftlicher Abschwung oder eine wesentliche Verlangsamung des Wirtschaftswachstums könnte den Verkauf von Produkten und Dienstleistungen an Kunden der Borealis Gruppe nachteilig beeinflussen und zu einem wirtschaftlichen Abschwung im Geschäftsbereich der Emittentin führen, was eine negative Auswirkung auf das Betriebsergebnis und die Finanzlager der Borealis Gruppe haben könnte

-

Die Eigenmittelanforderungen für Banken könnten zu höheren Kapitalkosten für die Borealis Gruppe führen

-

Die Borealis Gruppe ist dem Risiko höherer Gewalt und von Sabotageakten ausgesetzt

-

Die Borealis Gruppe ist Umweltrisiken ausgesetzt

-

Die Borealis Gruppe ist Risiken in Verbindung mit umfangreichen Umwelt- und Sicherheitsbestimmungen ausgesetzt, welche Kosten zur Einhaltung und Sanierung verursachen, die die Aussichten, die Geschäftslage und/oder Geschäftsergebnisse der Borealis Gruppe nachteilig beeinflussen können

-

Die Borealis Gruppe ist den Risiken von Sachschäden ausgesetzt

-

Die Borealis Gruppe ist Risiken in Verbindung mit Produkthaftung und Klagen ausgesetzt

-

Die Borealis Gruppe ist dem Risiko nachteiliger Entwicklungen der rechtlichen Rahmenbedingungen ausgesetzt (regulatorisches Risiko)

-

Der Borealis Gruppe können operative und/oder technologische Probleme widerfahren, welche die täglichen Aktivitäten oder den Fortschritt von laufenden und geplanten Projekten verhindern oder verzögern können

-

Kriminalität, Korruption und Geldwäsche in den Ländern, in denen die Borealis Gruppe operiert, könnten die Fähigkeit der Borealis Gruppe, ihrem Geschäft nachzugehen, wesentlich erschweren

30

-

3.1.2

3.2.3

3.2.4

Die Borealis Gruppe ist den Risiken in Verbindung mit Rechtsstreitigkeiten und Gerichtsverfahren ausgesetzt

Risiken im Hinblick auf Geschäftspartner -

Die Borealis Gruppe ist in Verbindung mit ihrer Abhängigkeit von Rohstoffen in Bezug auf ihre Geschäftspartner Risiken ausgesetzt

-

Die Borealis Gruppe ist Risiken in Verbindung mit ihren Subunternehmern und Vertragspartnern ausgesetzt

-

Die Emittentin ist Risiken in Verbindung mit ihrer Abhängigkeit von ihren Aktionären und Joint Venture Partnern ausgesetzt

-

Die Borealis Gruppe ist einem Liquiditätsrisiko ausgesetzt

-

Die Emittentin ist Risiken in Zusammenhang mit Garantien ausgesetzt, die sie gewährt hat

Finanzielle Risiken -

Die Borealis Gruppe ist Risiken in Verbindung mit finanziellen oder anderen Vereinbarungen unter bestimmten Kreditfazilitäten ausgesetzt

-

Die Borealis Gruppe ist einem Währungsrisiko ausgesetzt

-

Die Borealis Gruppe ist Risiken der Zinsänderung ausgesetzt

Risiken in Bezug auf die Teilschuldverschreibungen -

Es besteht das Risiko, dass es der Emittentin gänzlich oder teilweise unmöglich wird, Zinsoder Kapitalzahlungen auf die Teilschuldverschreibungen zu leisten (Kreditrisiko)

-

Es besteht das Risiko struktureller Nachrangigkeit

-

Die Anleihegläubiger sind dem Risiko ausgesetzt, dass sich der Wert der Teilschuldverschreibungen als Ergebnis einer Änderung des Kreditaufschlages der Emittentin ändert (Credit Spread Risiko)

-

Anleihegläubiger sind im Falle einer frühzeitigen Rückzahlung und im Falle einer Wiederanlage Risiken ausgesetzt (Risiko vorzeitiger Rückzahlung/ Reinvestitionsrisiko)

-

Die Emittentin ist berechtigt, weitere Verbindlichkeiten einzugehen, die im gleichen Rang wie die Teilschuldverschreibungen stehen

-

Fix verzinste Wertpapiere sind bestimmten Marktrisiken ausgesetzt (Marktpreisrisiko)

-

Es besteht ein Inflationsrisiko

-

Anleihegläubiger erhalten Zahlungen auf die Teilschuldverschreibungen in EUR und sind dem Fremdwährungsrisiko ausgesetzt, sofern sie nicht im Euro-Raum ansässig sind

-

Es besteht das Risiko, dass Teilschuldverschreibungen entwickelt

-

Es besteht das Risiko, dass die Märkte, auf denen die Teilschuldverschreibungen gehandelt werden, nicht liquide sind (Liquiditätsrisiko)

-

Es besteht das Risiko, dass der Handel mit den Teilschuldverschreibungen ausgesetzt, unterbrochen oder eingestellt wird

sich

kein

aktiver

Handelsmarkt

für

die

31

4.

-

Wird ein Darlehen oder Kredit zur Finanzierung des Kaufs der Teilschuldverschreibungen verwendet, kann dies das Risiko eines Verlustes signifikant erhöhen

-

Nebenkosten in Verbindung mit dem Kauf und Verkauf von Teilschuldverschreibungen können das Gewinnpotential der Teilschuldverschreibungen signifikant oder vollständig vermindern

-

Anleihegläubiger sind vom Funktionieren des jeweiligen Clearingsystems abhängig

-

Es besteht das Risiko der Unrechtmäßigkeit des Erwerbs der Teilschuldverschreibungen

-

Die steuerlichen Auswirken auf ein Investment in die Teilschuldverschreibungen sollten sorgsam berücksichtigt werden

-

Ein österreichisches Gericht kann einen Kurator für die Teilschuldverschreibungen bestellen, der die Rechte der Anleihegläubiger in deren Namen ausübt und diese vertritt

-

Veränderungen des anwendbaren Rechts oder Regelungen oder behördlicher Ordnungspolitik können nachteilige Auswirkungen auf die Emittentin, die Teilschuldverschreibungen und die Anleihegläubiger haben

-

Änderungen der EU-Quellensteuer-Richtlinie könnten nachteilige Auswirkungen auf die Anleger haben

AUSGEWÄHLTE FINANZINFORMATIONEN DER EMITTENTIN Die folgenden Finanzinformationen wurden in einer Presseaussendung der Emittentin vom 11.5.2012 zu den Quartalszahlen veröffentlicht: Kennzahlen in EUR Millionen (ungeprüft, gerundet) Umsatzerlöse Nettogewinn (-verlust) nach Steuern Rückgang (Anstieg) der verzinslichen Nettoverschuldung Verschuldungsquote (1) Gearing

Q1 2012

Q1 2011

1.882

1.859

140

174

(186)

(195)

40%

43%

Quelle: Rechnungswesen der Emittentin für das 1. Quartal 2012 (1)

Der Verschuldungsgrad errechnet sich aus dem Verhältnis von kurz- und langfristigen Finanzverbindlichkeiten abzüglich Zahlungsmittel und Zahlungsmitteläquivalente geteilt durch das Eigenkapital.

Die folgenden Finanzinformationen wurden den geprüften Konzernabschlüssen der Emittentin zum 31 Dezember 2011 und 31 Dezember 2010 entnommen: Kennzahlen in EUR Millionen (gerundet) Umsatzerlöse

Geschäftsjahr 2011

Geschäftsjahr 2010

7.096

6.269

32

Ergebnis nach Steuern

507

333

(1)

569

610

Verschuldungsgrad

35%

37%

6,128

5,630

EBITDA

Gesamtvermögen

Quelle: Geprüfte Konzernabschlüsse der Emittentin zum 31 Dezember 2010 und 31 Dezember 2011 (1)

Das EBITDA ergibt sich aus dem Betriebsergebnis zuzüglich Abschreibungen.

(2)

Der Verschuldungsgrad errechnet sich aus dem Verhältnis von kurz- und langfristigen Finanzverbindlichkeiten abzüglich Zahlungsmittel und Zahlungsmitteläquivalente geteilt durch das Eigenkapital.

33

RISK FACTORS Prospective investors should consider carefully the risks set forth below and the other information contained in the Prospectus, any supplements thereto and any documents incorporated by reference. The following description of risk factors is limited to the most essential risk factors which in the Issuer's current view could have a material adverse effect on the Issuer's businesses, operations, financial condition or prospects which, in turn, could have a material adverse effect on the ability of the Issuer to fulfil its obligations towards the investors with respect to the Notes. In addition, each of the risks highlighted below could adversely affect the market value and trading price of the Notes or the rights of investors under the Notes and, as a result, investors could lose some or all of their investments in the Notes. Prospective investors should therefore, consider two main categories of risk: (i) risks relating to the Issuer, and (ii) risks relating to the Notes. Prospective investors should note that the risks described below are not the only risks faced by the Issuer or associated with the Notes. The Issuer has described only those risks that it considers to be material and of which it is aware. There may be additional risks that the Issuer currently considers not to be material or of which it is not currently aware, and any of these risks could have the effects set forth above. Moreover, prospective investors should be aware that the events described in the risk factors may occur simultaneously, which could compound their negative effects. If one or several of the risk factors below were to materialise, this might have considerable adverse effects on the profit, business and financial position of the Issuer and the profit potential of the Notes. Prior to deciding whether to invest in any Notes issued under this Prospectus, a prospective investor should conduct its own thorough analysis (including its own accounting, legal and tax analysis) since any evaluation of the suitability for an investor of an investment in Notes issued under this Prospectus depends upon the prospective investor's particular financial and other circumstances, as well as on the terms of the Notes. If an investor does not have experience in financial, business and investment matters sufficient to permit it to make such a determination, the investor should consult with its financial adviser prior to making a decision with respect to the suitability of any investment in the Notes. Words and expressions defined in "Terms and Conditions of the Notes" shall have the same meanings in this section. If not stated otherwise in the context of the risk factors set out below, all references to the Issuer made hereinafter also include other companies of the Borealis Group and the Borealis Group as a whole.

1.

RISKS REGARDING THE ISSUER, THE GROUP AND ITS BUSINESS ACTIVITIES

1.1

MARKETS AND GENERAL BUSINESS RISKS

1.1.1

The Borealis Group is subject to competition in all markets where it is active The Borealis Group operates in a variety of local and international markets, with many factors affecting the competitive environment which the Group faces in these markets. These factors include the number of competitors operating in a specific market, the pricing policies of such competitors, their market penetration, the pre-existing relationships with customers or customers' prior experience with specific contractors, the total production capacity serving the

34

market, up-to-date technology in terms of production methods and equipment, market entry barriers, and the proximity of natural resources, as well as general economic conditions and demand within the market. Each of these factors or a combination thereof has a bearing on the competitive environment in the markets in which the Borealis Group operates and could have a material adverse impact on the demand for its products and services and on its market share. 1.1.2

The Borealis Group is subject to risks in the petrochemical industry, such as its cyclicality and volatility The Borealis Group is subject to special risks associated with the petrochemical industry. For example prices of petrochemical products have been cyclical as a result of shifts in European and worldwide production capacity and demand patterns. The petrochemical industry historically has experienced alternating periods of tight supply, causing prices and margins to increase, followed by periods of substantial additions to capacity, resulting in excess supply and declining prices and margins. This could have a material adverse effect on Borealis Group's business, results of operations and financial condition.

1.1.3

Borealis Group is subject to market risks in connection with its dependency on the supply market (commodity risk) The Borealis Group depends on the supply market to secure raw materials. The cost of such materials as well as any increases of the costs thereof can usually be passed on to the customers. However, should the Issuer not be in a position to pass higher raw material costs on to customers, the Issuer may be forced to bear these increased costs and this could have a material adverse effect on the Group's business, results of operations and financial condition.

1.1.4

Borealis Group depends on demand from plastic and melamine processing industries and from agriculture The products of Borealis Group are sold to customers of numerous industries which use the Issuer's products to manufacture their products, as well as to agriculture. Borealis Group is therefore dependent on the demand for products by its customers. The customers of Borealis Group could cease or decrease their production for a number of reasons (e.g. because of lower demand for their products), or the customers of Borealis Group could substitute the products of the Borealis Group with materials other than plastic or melamine. All this could result in lower demand for Borealis Group's products, which could result in a material adverse effect on the Group's business, results of operations and financial condition.

1.1.5

Borealis Group may not be able to continue its business strategy Borealis Group bases its business model and competitive advantage to a substantial extent on the continuing innovation of its products. Should the Issuer or the members of the Borealis Group not be able to continue their business strategy, or should competitors invent better or more cost effective products, or should the Issuer fail to implement (or timely implement) its technological innovations, this could have a material adverse effect on the Issuer's business, results of operations and financial condition.

35

1.1.6

The Issuer and the Group are subject to the risk of loss of key personnel As it is the case with most enterprises using advanced technology and R&D, a key factor in the successful economic development of Borealis Group is the technical know how as well as market knowledge of its skilled management and key personnel. The loss of key personnel of the issuer and/or the Group could have a material adverse effect on the Borealis Group's business, results of operations and financial condition. This negative influence could only be compensated if within appropriate time the Issuer could hire under equivalent conditions equally qualified key personnel.

1.1.7

Borealis Group may be exposed to trade receivables credit risk Borealis Group is subject to trade receivables credit risk as the financial situation of its customers might deteriorate and could prevent them from paying the amounts owed to the Issuer on the due date. This could materially negatively impact the financial situation of Borealis Group.

1.1.8

Borealis Group 's customers' purchases of products and services could be adversely affected by a global economic downturn or a substantial slowdown in economic growth, which could lead to recessions in the Issuer's industry and could have a negative impact on the operating results and financial condition of Borealis Group The economic and political environment (e.g. unemployment, inflation, inclination to invest, and economic growth) in the countries where Borealis Group is active or has operations as well as the development of the world economy have a fundamental influence on the demand for the services and products developed and offered by Borealis Group. Although the world economy in the years 2010 and 2011 has improved again, the overall global economic outlook remains uncertain. The general economic conditions and economic prospects have been adversely affected in recent years mainly due to the concern that some Member States of the European Union and other countries, where the Borealis Group is active or has operations, can no longer afford debt servicing in terms of their debt. Several international efforts to resolve the debt crisis could not eliminate these concerns and the continuing uncertainty could affect the global markets negatively. If the economies in countries where Borealis Group is active resume the deterioration experienced in the past, or if growth remains at low levels, the level of demand by Borealis Group's customers for its products and services may weaken. Economic downturns may lead to recessions in the Issuer's industry, either in individual markets or globally. This could, in turn, negatively impact the Issuer's revenue development, including in the future growth areas on which it plans to focus, and jeopardise the attainment of Borealis Group's growth targets.

1.1.9

Borealis Group may be subject to higher capital costs due to the capital requirements for banks Due to the rules of the Basel III Accord (International Convergence of Capital Measurement and Capital Standards by the Basel Committee on Banking Supervision), banks will be required to monitor their capital adequacy requirements more closely and to a great extent either raise additional own funds or limit their loan exposures, which in turn would result in

36

higher costs of capital for the Issuer because of higher interest rate payments or nonavailability of loans. This could have a negative impact on the financing costs of Borealis Group. 1.1.10 Borealis Group is subject to force majeure risks or the risk of acts of sabotage Events of force majeure (including technical breakdowns, fire, earthquakes or other natural disasters, as well as wars, conflicts, civil unrest etc.) or acts of sabotage may have a material adverse effect on the Group's capability to operate its business or fulfil its obligations. This may have a material adverse effect on Borealis Group's business, results of operations and financial condition. 1.1.11 Borealis Group is exposed to environmental risks Given the range and complexity of the daily operations undertaken by the Group, the potential environmental risks faced by the Issuer cover a wide spectrum. These risks include major process safety incidents, failure to comply with approved policies, effects of natural disasters and pandemics, and exposure to general operational hazards. The consequences of such risk events can be injuries, loss of life, environmental harm and disruption to business activities and can have an adverse impact on the Group's business, prospects, financial condition and/or results of operations. 1.1.12 Borealis Group is subject to risks associated with extensive environmental and health and safety laws and regulations which result in costs relating to compliance and remediation that may adversely affect its business, prospects and/or results of operations Borealis Group's activities are subject to an increasing number of stringent environmental protection laws and health and safety regulations in markets in which the Group operates. Therewith associated increasing costs (as far as the Issuer is not able to pass these on to the customers), may have a material adverse effect on the Borealis Group's business, results of operations and financial condition. Violations may result in substantial fines or penalties as well as other civil and/or criminal sanctions. 1.1.13 Borealis Group is subject to the risk of property damage The chemical business involves significant hazards. Borealis Group's operations are subject to risks generally relating to the petrochemical business that can result in personal injuries, loss of life and property and environmental damage. In certain circumstances Borealis Group's insurances may not cover or be adequate to cover the consequences of such events, or insurance coverage may not be available. Moreover, there can be no assurance that Borealis Group will be able to maintain adequate insurance in the future at rates that it considers acceptable. The occurrence of any risk that is not fully covered by insurance could have a material adverse effect on the Group's business, prospects, financial condition and/or results of operations.

37

1.1.14 Borealis Group is subject to risks related to product liability and claims The products of Borealis Group are in many cases used by other manufacturers for the production of their goods. If the products of Borealis Group are defective or not in line with the required specifications, the goods produced by the Group's customers could be defective or otherwise negatively affected, which could expose Borealis Group to liability vis-à-vis its customers and end-consumers. Such claims resulting from the delivery by the Issuer of defect products or products that are not compliant with agreed specifications or norms could materially negatively impact the Group’s business, results of operations and financial condition. 1.1.15 Borealis Group is subject to the risk of adversely changing legislative environments in all markets where it is active (regulatory risk) The legislation as well as the judicial and administrative practice in the jurisdictions where the Group is active might change adversely in respect of Borealis Group. The activities of Borealis Group are subject to national and international laws and regulations. Both the legislation and judicial and administrative practices in these jurisdictions are subject to change in ways that could adversely affect the Group. 1.1.16 Borealis Group may experience operational and/or technological problems which may delay or hinder daily activities or progress of ongoing and planned projects Borealis Group may experience operational and/or technological problems, both of its own and of its contractual partners, which may delay or hinder the progress of ongoing and/or planned projects and investments and could have an adverse impact on the Group's business, prospects, financial condition and/or results of operations. 1.1.17 Borealis Group could be subject to crime, corruption and money laundering in the countries where the Issuer operates which may adversely affect the Group's ability to conduct its business Organised crime, including extortion and fraud, poses a risk to businesses in certain countries where the Group operates. Certain countries where Borealis Group operates still face considerable weaknesses in the fight against corruption and organized crime. Property and employees may become targets of theft, violence or extortion. Threats or incidents of crime may force the Group to cease or alter certain activities or to liquidate certain investments, which may cause losses or have other negative impacts on Borealis Group. In certain countries where the Group is operating there is the risk of higher levels of corruption, including the bribing of officials for the purpose of initiating and/or avoiding investigations by government agencies and other purposes. Allegedly, there have also been instances in which government officials have engaged in selective investigations and prosecutions to further the interest of the government and individual officials. Furthermore, in certain countries where the Group operates, there have been allegations that many members of the media allegedly regularly publish biased articles in return for payment. The Group's operations could be adversely affected by illegal activities, corruption or claims implicating the Group in illegal activities. Corruption and theft may also arise within the Issuer; for example, through products being stolen. Such activities may cause losses or have other negative impacts on Borealis Group.

38

1.1.18 Borealis Group is exposed to risks relating to disputes and litigation Borealis Group is subject to numerous risks relating to legal and regulatory proceedings in which a company of the Borealis Group is currently a party or that could develop in the future. The Issuer cannot guarantee that the ultimate outcome of such legal proceedings and any consequential legal proceedings thereafter will not have a material adverse effect on the Group's business, results of operations and financial condition. 1.2

COUNTERPARTY RISKS

1.2.1

Borealis Group is subject to counterparty risks in connection with its dependency on the supply market The Group depends on the supply market to secure raw materials such as naphtha, propane, butane, ethylene, propylene and natural gas. Should logistical or financial problems prevent suppliers from delivering these raw materials, this could have a material adverse effect on the Group’s business, results of operations and financial condition.

1.2.2

Borealis Group is subject to risks in connection with its exposure to subcontractors and contractual partners The Group often needs to cooperate with subcontractors and contractual partners. Borealis Group is subject to the risk that some subcontractors and/or contractual partners render their services inadequately or not in a timely manner. Subcontractors and/or contractual partners may become insolvent during their engagement. In that case Borealis Group could lose customers or the further growth of the Issuer could be impaired. This could have a material adverse effect on the Group's business, results of operations and financial condition.

1.2.3

The Issuer is subject to risks in connection with its dependency on its shareholders and joint venture partners Some shareholders and joint venture partners supply the Issuer with chemicals and materials necessary for the Issuer's production. In case these shareholders and joint venture partners cease to supply the Issuer, the Issuer may be forced to look for supply possibilities elsewhere. There can be no assurance that in such circumstances the Issuer will be able to cover its needs at all, or at the same or adequate costs. This could have a material adverse effect on the Issuer's business, results of operations and financial condition.

1.2.4

Borealis Group is exposed to liquidity risks The Group is, as most business enterprises, exposed to the risk that it will not be able to meet its financial obligations as they fall due. This could have a material adverse effect on the assets, financial position and earnings of the Group.

1.2.5

The Issuer is subject to risks in connection with guarantees it has issued The Issuer has in the past issued guarantees for related companies. Should these companies not fulfil their obligations, the obligations under the guarantees would have to be fulfilled by the

39

Issuer. This could have a material adverse effect on the Issuer's business and financial condition. 1.3

FINANCIAL RISKS

1.3.1

Borealis Group is subject to risks in connection with financial and other covenants under certain credit facilities Members of Borealis Group are party to several credit facility agreements that restrict its ability to engage in certain activities, including their ability (subject to certain exceptions) to incur liens or encumbrances, incur additional indebtedness or guarantee obligations in excess of certain thresholds, dispose of a material portion of assets, effect material acquisitions, engage in a merger with a third party or pledge accounts receivable. If the respective members of Borealis Group fail to meet the terms of these covenants or of any other restrictions contained in the credit facility agreements, an event of default could occur, which could result in the acceleration of some or all of the Borealis Group's outstanding indebtedness causing it to become immediately due and payable. If such acceleration occurs, Borealis Group may not be able to repay such indebtedness on a timely basis which could have a material adverse effect on its business operations and, in the worst case, lead to its insolvency.

1.3.2

Borealis Group is subject to currency risk The Issuer and other members of Borealis Group finance their equipment, investments as well as expansions partly in currencies other than EUR, which is in line with the Group's internationally orientated business operations. Usually, F/X rates change in time, which could have a material adverse effect on the Group's business, results of operations and financial condition.

1.3.3

Borealis Group is subject to interest rate risks The expansion of the Group's business activities in the ordinary course of its business requires additional debt financing of assets, resources, investments and acquisitions. The composition of the debt financing structure varies significantly during the course of a business year of the Group. An increase of the interest rate level may therefore have a material adverse effect on the Group's business, results of operations and financial condition.

2.

RISKS REGARDING THE NOTES The following is a disclosure of risk factors that are material to the Notes in order to assess the market risk associated with these Notes. Prospective investors should consider these risk factors before deciding to purchase the Notes. The following statements are not exhaustive. Prospective investors should consider all information provided in this Prospectus, the documents incorporated by reference, any supplement thereto and consult with their own professional advisers (including their financial, accounting, legal and tax advisers) if they consider it necessary. In addition, investors should be aware that the risks described may combine and, thus, intensify one another. The purchase of the Notes may involve substantial risks and may only be suitable for investors who have the knowledge and experience in financial and business matters necessary to

40

enable them to evaluate such risks and the merits of an investment in the Notes. An investment in the Notes is only suitable for investors who: 

have the requisite knowledge and experience in financial and business matters to evaluate the merits and risks of an investment in the Notes and the information contained or incorporated by reference in the Prospectus or any applicable supplement;



have access to, and knowledge of, appropriate analytical tools to evaluate such merits and risks in the context of the investor's particular financial situation and to evaluate the impact the Notes will have on their overall investment portfolio;



have sufficient financial resources and liquidity to bear all risks of an investment in the Notes, including where the currency for principal or interest payments is different from the potential investor’s currency;



understand thoroughly the terms of the Notes;



be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks; and



recognise that it may not be possible to dispose of the Notes for a substantial period of time, if at all before maturity.

The Notes may be subject in particular to the following risks: 2.1

There is a risk of partial or total failure of the Issuer to make interest and/or redemption payments that the Issuer is obliged to make under the Notes (Credit Risk) Investors are subject to the risk of a partial or total failure of the Issuer to make interest and/or redemption payments that the Issuer is obliged to make under the Notes. The worse the creditworthiness of the Issuer, the higher the risk of loss (see also "Risks regarding the Issuer and its business activities" above). A materialisation of the credit risk may result in partial or total failure of the Issuer to make interest and/or redemption payments on the Notes.

2.2

There is a risk of structural subordination Investors should be aware that the Issuer is subject to stricter rules (e.g. with respect to events of default) under other financial instruments than the Notes. This may e.g. lead to situation where the Issuer's creditors under such other financial instruments under certain circumstances, contrary to the Noteholders, are entitled to terminate the respective contracts for cause and ask for immediate repayment or that third creditors of the Issuer receive security in the Issuer's or its subsidiaries' assets in the liquidation proceeds of which the Noteholders do not participate. In such case the Noteholders are exposed to the risk that the Issuer will not have sufficient funds to service the Notes upon having (partly) satisfied the other creditors' claims. Investors would suffer a total loss. Prospective investors should bear in mind that the Notes have a longer tenor than other financial instruments of the issuer. Thus, due to the longer tenor claims of Noteholders rank

41

junior to the other creditors' claims since the claims of the Noteholders in case of ordinary redemption are to be redeemed later than the claims of creditors under other financial instruments. 2.3

Investors in the Notes assume the risk that the credit spread of the Issuer widens and that as a consequence the price of the Notes falls (Credit Spread Risk) A credit spread is the margin payable by the Issuer to the holder of a Bond as a premium for the assumed credit risk. Credit spreads are offered and sold as premiums on current risk-free interest rates or as discounts on the price. Factors influencing the credit spread include, among other things, the creditworthiness of the Issuer, probability of default, recovery rate, the remaining term to maturity of the Notes, etc. The liquidity situation, the general level of interest rates, overall economic developments, and the currency, in which the relevant obligation is denominated may also have a positive or negative effect. Investors are exposed to the risk that the credit spread of the Issuer widens resulting in a decrease in the price of the Notes.

2.4

The investors face a risk in case of an early redemption and in case of reinvestment (Risk of Early Redemption/Reinvestment Risk) In the event that the Notes are redeemed or being sold, an investor may be subject to the risk that he may not find any reinvestment opportunities at better or at least the same conditions. The same applies to the reinvestment of coupon payments derived from the investment. This could result in a material adverse effect for investors.

2.5

The Issuer may incur additional indebtedness ranking pari passu with the Notes The Issuer has not entered into any restrictive covenants in connection with the issuance of the Notes regarding its respective ability to incur additional indebtedness ranking pari passu with the obligations under or in connection with the Notes. Incurring any additional indebtedness may increase the likelihood of a deferral of coupon payments under the Notes and/or may reduce the amount recoverable by Noteholders in the event of insolvency or liquidation of the Issuer.

2.6

Fixed rate securities are exposed to specific market risks (Market Price Risk) A holder of a note with a fixed interest rate is exposed to the risk that the price of such Bond falls as a result of changes in the market interest rate. While the nominal interest rate of a Bond with a fixed coupon is fixed during the life of such Bond, the current interest rate on the capital market (market interest rate) typically changes continuously. As the market interest rate changes, the price of such notes changes in the opposite direction. If the market interest rate increases, the price of such Bond typically falls, until the yield of such Bond is approximately equal to the market interest rate. If the market interest rate falls, the price of a Bond with a fixed interest rate typically increases, until the yield of such Bond is approximately equal to the market interest rate. Noteholders should be aware that movements of the market interest rate can adversely affect the price of the Notes and can lead to losses for the Noteholders if they

42

sell Notes. 2.7

There is a risk of inflation The inflation risk is the risk of future money depreciation. The real yield from an investment is reduced by inflation. The lower the rate of inflation, the higher the real yield on the Notes. If the inflation rate is equal to or higher than the nominal yield, the real yield is zero or even negative.

2.8

The holders of the Notes receive payments on the Notes in EUR and may be subject to currency risk Because the Notes are denominated in EUR and also the interest payable on the Notes is calculated and paid out in EUR, investors, who have an income or assets in a currency other than EUR or who do not require the proceeds from the Notes in EUR, may be subject to a currency risk, since they are exposed to changes in currency exchange rates, which can reduce the yield on the Notes. Such changes in currency exchange rates generally depend on factors over which the Issuer and the holders of the Notes have no control, such as macroeconomic factors, speculative transactions and interventions by central banks and governments and the supply of and demand for the relevant currencies. In recent years, rates of exchange for certain currencies have been highly volatile, and such volatility may be expected to continue in the future. Fluctuations in any particular exchange rate that have occurred in the past are not necessarily indicative, however, of fluctuations in the rate that may occur during the term of the Notes. Furthermore, there is a risk that authorities with jurisdiction over the currency, in which an investor’s financial activities are denominated principally, may impose or modify exchange controls. Such exchange controls could adversely affect an applicable exchange rate. As a result, investors may receive less interest or principal than expected, or no interest or principal.

2.9

There is a risk that an active trading market for the Notes may not develop The Issuer has applied for admission to listing of the Notes on the Second Regulated Market (Geregelter Freiverkehr) of the Vienna Stock Exchange. Although the Issuer expects to be granted admission to listing for the Notes, the Issuer cannot guarantee that such admission will indeed be granted. It cannot be guaranteed that the stock exchange prices at which the Notes will be quoted will not be below par. Negative consequences on the stock exchange price of the Notes may be caused in particular by an unsatisfactory business development of the Issuer, a worsened financial condition of the Issuer, a deterioration of the industry the Issuer is active in or the economy as a whole, an increase of interest rates as well as a general decline of the securities markets. The securities markets have seen material stock exchange price and trading volume fluctuations during the past years. Such fluctuations could result in a material adverse effect for investors.

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2.10

There is a risk that the markets on which the Notes are traded, could be illiquid (Liquidity Risk) Although the Issuer has applied for admission to listing of the Notes on the Second Regulated Market (Geregelter Freiverkehr) of the Vienna Stock Exchange, it cannot be guaranteed that active trading in the Notes will develop and that the market for the Notes will be liquid. Illiquid markets can result in a situation where investors may be forced to sell their securities below a fair market price, the price at which they have bought such securities or a price which is appropriate for such securities. This could result in a material adverse effect for investors.

2.11

There is a risk that trading in the Notes will be suspended, interrupted or terminated The listing of the Notes may be suspended or interrupted by the respective stock exchange or a competent regulatory authority upon the occurrence of a number of reasons, including violation of price limits, breach of statutory provisions, occurrence of operational problems of the stock exchange or generally if deemed required in order to secure a functioning market or to safeguard the interests of investors. Furthermore, trading in the Notes may be terminated, either upon decision of the stock exchange, a regulatory authority or upon application by the Issuer. Investors should note that the Issuer has no influence on trading suspension or interruptions (other than where trading in the Notes is terminated upon the Issuer's decision) and that investors in any event must bear the risks connected therewith. In particular, investors may not be able to sell their Notes where trading is suspended, interrupted or terminated, and the stock exchange quotations of such Notes may not adequately reflect the price of such Notes. Finally, even if trading in the Notes is suspended, interrupted or terminated, investors should note that such measures may neither be sufficient nor adequate nor in time to prevent price disruptions or to safeguard the investors' interests; for example, where trading in the Notes is suspended after price-sensitive information relating to the Notes has been published, the price of the Notes may already have been adversely affected. All these risks would, if they materialise, have a material adverse effect on the investors.

2.12

If a loan or credit is used to finance the acquisition of the Notes, the loan may significantly increase the risk of a loss If a loan is used to finance the acquisition of the Notes by an investor and the Notes subsequently go into default, or if the trading price diminishes significantly, the investor may not only have to face a potential loss on its investment, but it will also have to repay the loan and pay interest thereon. A loan may significantly increase the risk of a loss. Investors should not assume that they will be able to repay the loan or pay interest thereon from the profits of a transaction. Instead, investors should assess their financial situation prior to an investment, as to whether they are able to pay interest on the loan, repay the loan on demand, and that they may suffer losses instead of realising gains.

2.13

There is a risk that incidental costs related in particular to the purchase and sale of the Notes may significantly or completely reduce the profit potential of the Notes When Notes are purchased or sold, several types of incidental costs (including transaction fees and commissions) are incurred in addition to the purchase or sale price of the security.

44

These incidental costs may significantly reduce or eliminate any profit from holding the Notes. Credit institutions as a rule charge commissions which are either fixed minimum commissions or pro-rata commissions, depending on the order value. To the extent that additional domestic or foreign - parties are involved in the execution of an order, including but not limited to domestic dealers or brokers in foreign markets, investors may also be charged for the brokerage fees, commissions and other fees and expenses of such parties (third party costs). In addition to such costs directly related to the purchase of securities (direct costs), investors must also take into account any follow-up costs (such as custody fees). Investors should inform themselves about any additional costs incurred in connection with the purchase, custody or sale of the Notes before investing in the Notes. 2.14

Investors have to rely on the functionality of the relevant clearing system The Notes are purchased and sold through different clearing systems, such as Clearstream Banking AG, Clearstream Banking S.A., Euroclear Bank S.A./N.V. or Oesterreichische Kontrollbank Aktiengesellschaft. The Issuer does not assume any responsibility as to whether the Notes are actually transferred to the securities portfolio of the relevant investor. Investors have to rely on the functionality of the relevant clearing system.

2.15

Legality of Purchase The Issuer has not or does not assume responsibility for the lawfulness of the acquisition of the Notes by a prospective purchaser of the Notes, whether under the laws of the jurisdiction of its incorporation or the jurisdiction in which it operates (if different) or for compliance by that prospective purchaser with any laws, regulation or regulatory policy applicable to it. A prospective purchaser may not rely on the Issuer in connection with its determination as to the legality of its acquisition of the Notes.

2.16

The tax impact of an investment in the Notes should be carefully considered Interest payments on Notes, or profits realised by an investor upon the sale or repayment of Notes, may be subject to taxation in its home jurisdiction or in other jurisdictions in which it is required to pay taxes. The tax impact on investors generally in Austria and Luxembourg is described under "Taxation"; however, the tax impact on an individual investor may differ from the situation described for investors generally. Prospective investors, therefore, should contact their own tax advisers for advice on the tax impact of an investment in the Notes. Furthermore, the applicable tax regime may change to the disadvantage of the investors in the future.

2.17

An Austrian court can appoint a trustee (Kurator) for the Notes to exercise the rights and represent the interests of holders of the Notes on their behalf 1

Pursuant to the Austrian Notes Trustee Act (Kuratorengesetz ), a trustee (Kurator) can be

1

Gesetz betreffend die gemeinsame Vertretung der Rechte der Besitzer von auf den Inhaber lautenden oder durch Indossament übertragbaren Teilschuldverschreibungen und die bücherliche Behandlung der für solche Teilschuldverschreibungen eingeräumten Hypothekarrechte (RGBl 49/1874 of 24 April 1874).

45

appointed by an Austrian court, upon the request of any interested party (e.g., a holder of Notes) or upon the initiative of the competent court, for the purposes of representing the common interests of the holders of the Notes in matters concerning their collective rights. In particular, this may occur if insolvency proceedings are initiated against the Issuer, in connection with any amendments to the terms and conditions of the Notes or changes relating to the Issuer, or under other similar circumstances. If a trustee is appointed, it will exercise the collective rights and represent the interests of the holders of the Notes and will be entitled to make statements on their behalf which shall be binding on all holders of the Notes. Where a trustee represents the interests and exercises the rights of the holders of the Notes, this may conflict with or otherwise adversely affect the interests of individual or all holders of the Notes. 2.18

Changes in applicable laws, regulations or regulatory policies may have an adverse effect on the Issuer, the Notes and the investors The terms and conditions of the Notes will be governed by Austrian law in effect as at the date of this Prospectus. No assurance can be given as to the impact of any possible judicial decision or change to Austrian law (or law applicable in Austria), or administrative practice after the date of this Prospectus.

2.19

Changes in the EU Savings Directive could negatively affect investors The EU adopted the Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments ("EU Savings Directive"), which obliges each EU Member State to provide to the tax authorities of other Member States details of payments of interest and other similar income paid by a person within its jurisdiction to an individual resident in another Member State or to certain limited types of entities established in that other Member State, except that Austria and Luxembourg (and originally also Belgium) have instead imposed a withholding system for a transitional period (the ending of such transitional period being dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries) unless during such period they elect otherwise. A number of other non-EU countries and territories, including Switzerland, have agreed to adopt similar measures (a withholding system in the case of Switzerland). On 13 November 2008, the European Commission published a proposal for amendments to the EU Savings Directive, which included a number of suggested changes, which if implemented, would broaden the scope of the Directive described above. The European Parliament approved an amended version of this proposal on 24 April 2009. Investors who are in any doubt as to their position should consult their professional advisers. Changes in the EU Savings Directive could materially adversely affect the taxation effects for investors in the Notes.

20.

No Advice This Prospectus does not alter each individual investor's need to seek the advice of a bank, a financial, investment or tax adviser and/or a lawyer.

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TERMS AND CONDITIONS OF THE NOTES These terms and conditions of the bonds (the "Terms and Conditions") are written in the German language and contain an English translation. The German text shall be the legally binding version. The English translation is provided for convenience only. References in these Terms and Conditions to §§ are references to §§ of these Terms and Conditions if not indicated otherwise.

Diese Anleihebedingungen (die "Anleihebedingungen") sind in deutscher Sprache abgefasst und mit einer Übersetzung in die englische Sprache versehen. Der deutsche Wortlaut ist rechtsverbindlich. Die englische Übersetzung dient nur zur Information. In diesen Anleihebedingungen enthaltene Bezugnahmen auf §§ beziehen sich auf §§ dieser Anleihebedingungen, wenn sich aus dem Zusammenhang nichts anderes ergibt.

Terms and Conditions of the up to EUR 200,000,000 Fixed Rate Notes of Borealis AG

Anleihebedingungen der bis zu EUR 200.000.000 fixverzinslichen Teilschuldverschreibungen der Borealis AG

§1 Nominal Amount and Denomination, Form, Transferability

§1 Nennbetrag und Stückelung, Verbriefung, Übertragbarkeit

(1) Nominal Amount and Denomination. This issue of Fixed Rate Notes by Borealis AG, registered in the Austrian Companies Register under FN 269858 a, with its seat in Vienna and the business address in 1220 Vienna, Austria, Wagramerstraße 17-19 (the "Issuer") in the aggregate nominal amount of up to EUR 200,000,000 (in words: up to Euro one hundred million) is divided into up to 200,000 notes payable to the bearer and ranking pari passu among themselves, with a nominal amount (the "Nominal Amount") of EUR 1,000 each (the "Notes"; this term includes any further Notes issued pursuant to § 11 that form a single series with the Notes).

(1) Nennbetrag und Stückelung. Diese Emission von fixverzinslichen Teilschuldverschreibungen der Borealis AG, Firmenbuchnummer FN 269858 a, mit Sitz in Wien und der Geschäftsanschrift in 1220 Wien, Österreich, Wagramerstraße 17-19 (die "Emittentin") im Gesamtnennbetrag von bis zu EUR 200.000.000 (in Worten: bis zu Euro zweihundert Millionen) ist eingeteilt in bis zu 200.000 an den Inhaber zahlbare und untereinander gleichrangige Teilschuldverschreibungen mit einem Nennbetrag (der "Nennbetrag") von jeweils EUR 1.000 (die "Teilschuldverschreibungen"; dieser Begriff umfasst sämtliche weiteren Teilschuldverschreibungen, die gemäß § 11 begeben werden und eine einheitliche Serie mit den Teilschuldverschreibungen bilden).

(2) Form. The Notes are entirely represented by a global changeable security pursuant to Sec 24 lit b of the Austrian Depository Act (the "Global Note") without interest coupons. The Global Note shall be signed manually by authorised signatories of the

(2) Verbriefung. Die Teilschuldverschreibungen sind zur Gänze durch eine veränderbare Sammelurkunde gemäß § 24 lit b Depotgesetz (die "Sammelurkunde") verbrieft. Die Sammelurkunde trägt die eigenhändigen Unterschriften

47

Issuer and shall be authenticated by or on behalf of the Paying Agent as appointed pursuant to § 10. Claims for the delivery of definitive Notes and interest coupons shall be excluded.

ordnungsgemäß bevollmächtigter Vertreter der Emittentin und ist von der gemäß § 10 bestellten Zahlstelle oder in deren Namen mit einer Kontrollunterschrift versehen. Der Anspruch auf Ausfolgung effektiver Stücke der Teilschuldverschreibungen und Zinsscheine ist ausgeschlossen.

(3) Central Securities Depositary. The Global Note will be deposited with Oesterreichische Kontrollbank Aktiengesellschaft as central securities depositary (the "Central Securities Depositary") until all obligations of the Issuer under the Notes have been satisfied.

(3) Wertpapiersammelbank. Die Sammelurkunde wird bei der Oesterreichischen Kontrollbank Aktiengesellschaft als Wertpapiersammelbank (die "Wertpapiersammelbank") verwahrt, bis sämtliche Verbindlichkeiten der Emittentin aus den Teilschuldverschreibungen erfüllt sind.

(4) Transferability. The holders of Notes will receive co-ownership participations or rights in the Global Note that are transferable in accordance with the general business conditions of the Central Securities Depositary and outside of the Republic of Austria in accordance with the provisions of Clearstream Banking, société anonyme, Luxemburg ("CBL") and/or Euroclear Bank S.A./N.V., Brussels, Belgium ("Euroclear") (CBL and Euroclear together the "Clearing System").

(4) Übertragbarkeit. Den Anleihegläubigern stehen Miteigentumsanteile oder -rechte an der Sammelurkunde zu, die gemäß den allgemeinen Geschäftsbedingungen der Wertpapiersammelbank und außerhalb der Republik Österreich gemäß den Vorschriften der Clearstream Banking, société anonyme, Luxemburg ("CBL") und/oder Euroclear Bank S.A./N.V., Brüssel, Belgien ("Euroclear") (CBL und Euroclear zusammen das "Clearingsystem") übertragen werden können.

(5) ISIN. The International Identification Number (ISIN) AT0000A0VL70.

Securities shall be

(5) ISIN. Die Wertpapierkennummer ("International Securities Identification Number" oder "ISIN") lautet AT0000A0VL70.

(6) Noteholder. The term "Noteholder" means each holder of a co-ownership participation in the Notes represented by the Global Note.

(6) Anleihegläubiger. Der Begriff "Anleihegläubiger" bezeichnet jeden Inhaber eines Miteigentumsanteils an den durch die Sammelurkunde verbrieften Teilschuldverschreibungen.

§2 Status of the Notes

§2 Status der Teilschuldverschreibungen

The Notes constitute direct, unconditional, unsubordinated and (subject to the provisions of § 3) unsecured obligations of the Issuer and rank pari passu without any preference among themselves and at least pari passu with all other unsubordinated and unsecured obligations of the Issuer, present or future, save for obligations which are preferred by applicable mandatory law.

Die Teilschuldverschreibungen begründen unmittelbare, unbedingte, nicht nachrangige und (vorbehaltlich der Bestimmungen des § 3) nicht besicherte Verbindlichkeiten der Emittentin und stehen im gleichen Rang untereinander und mindestens im gleichen Rang mit allen anderen gegenwärtigen und zukünftigen nicht nachrangigen und nicht besicherten Verbindlichkeiten der Emittentin, mit Ausnahme von Verbindlichkeiten, die nach geltendem zwingendem Recht

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vorrangig sind. §3 Negative Pledge

§3 Negativerklärung

(1) Negative Pledge. During the term of the Notes but no longer than until all amounts in respect of interest and principal for the Notes have been provided to the Paying Agent that has been appointed pursuant to § 10, the Issuer undertakes:

(1) Negativerklärung. Die Emittentin verpflichtet sich für die Laufzeit der gegenständlichen Anleihe, längstens jedoch bis zu dem Zeitpunkt, an dem alle Beträge an Kapital und Zinsen für die Teilschuldverschreibungen der gemäß § 10 bestellten Zahlstelle vollständig zur Verfügung gestellt worden sind:

(a) for other Capital Market Indebtedness (as defined below) as well as for guarantee obligations or liabilities for other Capital Market Indebtedness

(a) für andere Kapitalmarktverbindlichkeiten (wie nachstehend definiert) sowie für Verbindlichkeiten unter Garantien oder Haftungen für andere Kapitalmarktverbindlichkeiten

(i)

not to create any Security (as defined below), and

(i)

keine Sicherheiten (wie nachstehend definiert) zu bestellen, und

(ii)

not to cause third parties to create any Security, or assume any Liability, to secure Capital Market Indebtedness of the Issuer or its Subsidiaries or guarantee obligations or liabilities for other Capital Market Indebtedness of the Issuer or its Subsidiaries,

(ii)

Dritte zu veranlassen, zur Besicherung der von der Emittentin oder ihren Tochtergesellschaften aufgenommenen Kapitalmarktverbindlichkeiten und Verbindlichkeiten der Emittentin oder ihrer Tochtergesellschaften unter Garantien oder Haftungen für Kapitalmarktverbindlichkeiten keine Sicherheiten zu bestellen oder Haftungen zu übernehmen,

unless the Noteholders at the same time and in the same rank participate in such Security or Liability or in any other security or liability, which has been recognised as at least equal security or liability, as the case may be, by an internationally recognised public accountant that is independent from an existing auditor of the Issuer or any of its Subsidiaries; and

ohne jeweils sicherzustellen, dass die Anleihegläubiger zur gleichen Zeit und im gleichen Rang an solchen Sicherheiten oder Haftungen oder an anderen Sicherheiten oder Haftungen, die von einem vom bestehenden Abschlussprüfer der Emittentin oder ihrer Tochterunternehmen unabhängigen, international anerkannten Wirtschaftsprüfer als zumindest gleichwertige Sicherheit oder Haftung anerkannt werden, teilnehmen; und

(b) to procure that its Subsidiaries in relation to other Capital Market Indebtedness as well as to guarantee obligations or liabilities for other Capital Market Indebtedness

(b) dafür Sorge zu tragen, dass ihre Tochtergesellschaften für andere Kapitalmarktverbindlichkeiten sowie für Verbindlichkeiten unter Garantien oder Haftungen für andere Kapitalmarktverbindlichkeiten

(i)

do not create any Security or assume

(i)

keine

Sicherheiten

bestellen

oder

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any Liability, and (ii)

cause third parties to not create any Security, or assume any Liability, to secure Capital Market Indebtedness of the Issuer or its Subsidiaries or guarantee obligations or liabilities for other Capital Market Indebtedness of the Issuer or its Subsidiaries,

Haftungen übernehmen, und (ii)

Dritte veranlassen, zur Besicherung der von der Emittentin oder ihren Tochtergesellschaften aufgenommenen Kapitalmarktverbindlichkeiten und den Verbindlichkeiten der Emittentin oder ihrer Tochtergesellschaften unter Garantien oder Haftungen für Kapitalmarktverbindlichkeiten keine Sicherheiten zu bestellen oder Haftungen zu übernehmen,

unless the Noteholders at the same time and in the same rank participate in such Security or Liability or in any other security or liability, which has been recognised as at least equal security or liability, as the case may be, by an internationally recognised public accountant that is independent from an existing auditor of the Issuer or any of its Subsidiaries.

ohne jeweils unverzüglich sicherzustellen, dass die Anleihegläubiger zur gleichen Zeit und im gleichen Rang an solchen Sicherheiten oder Haftungen oder an anderen Sicherheiten oder Haftungen, die von einem vom bestehenden Abschlussprüfer der Emittentin oder ihrer Tochterunternehmen unabhängigen, international anerkannten Wirtschaftsprüfer als zumindest gleichwertige Sicherheit oder Haftung anerkannt werden, teilnehmen.

"Capital Market Indebtedness" shall mean any present or future obligation of the Issuer and/or the Subsidiaries to pay money (including obligations under guarantees or other liability arrangements) from bonds, notes or other similar debt instruments, as well as loan deeds (Schuldscheindarlehen), regardless of whether they are admitted to trading on a stock exchange or a regulated market, or whether they are included in a multilateral trading facility.

"Kapitalmarktverbindlichkeiten" sind gegenwärtige oder zukünftige Verpflichtungen der Emittentin und/oder der Tochtergesellschaften zur Leistung von Geldern (einschließlich Verpflichtungen aus Garantien oder anderen Haftungsvereinbarungen) aus Anleihen, Teilschuldverschreibungen oder anderen ähnlichen Schuldinstrumenten, sowie Schuldscheindarlehen, unabhängig davon, ob sie an einer Wertpapierbörse oder an einem geregelten Markt zum Handel zugelassen oder in ein multilaterales Handelssystem einbezogen sind.

"Security" means mortgages, pledges, retention rights or other encumbrances and security rights over the existing or future assets or income of the Issuer and/or the Subsidiaries.

"Sicherheiten" sind Hypotheken, Pfandrechte, Zurückbehaltungsrechte oder sonstige Belastungen und Sicherungsrechte an den gegenwärtigen oder zukünftigen Vermögenswerten oder Einkünften der Emittentin und/oder der Tochtergesellschaften.

"Liabilities" means guarantees, sureties and other assumptions of, and accessions to, liability.

"Haftungen" sind Garantien, Bürgschaften und sonstige Haftungsübernahmen und beitritte.

"Subsidiary" means any corporation or partnership, in which the Issuer, directly or indirectly, holds more than 50 per cent. of

"Tochtergesellschaft" ist jede Kapital- oder Personengesellschaft, an der die Emittentin mittelbar oder unmittelbar mehr als 50% des

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the capital and/or the voting rights or which are otherwise directly or indirectly under the controlling influence of the Issuer and/or its Subsidiaries within the meaning of this provision.

Kapitals und/oder der stimmberechtigten Anteile hält oder die sonst unmittelbar oder mittelbar unter dem beherrschenden Einfluss der Emittentin und/oder ihrer Tochtergesellschaften im Sinne dieser Bestimmung steht.

§4 Interest

§4 Verzinsung

(1) Interest Period. Each Note shall bear interest on its then outstanding nominal amount at a rate of [Interest rate to be inserted upon Pricing pursuant to the Pricing Notice] per cent. per annum as from (and including) 2 July 2012 (the "Issue Date"). Interest is payable annually in arrear on 2 July of each year (each an "Interest Payment Date") commencing on 2 July 2013.

(1) Zinsperiode. Der jeweils ausstehende Nennbetrag der Teilschuldverschreibungen wird ab und einschließlich dem 2.7.2012 (der "Ausgabetag") mit [Der Zinssatz wird nach der Preisfestsetzung gemäß dem Preisblatt eingefügt] % jährlich verzinst. Die Zinsen sind jährlich nachträglich am 2.7. jeden Jahres (jeweils ein "Zinszahlungstag"), beginnend mit dem 2.7.2013, zahlbar.

(2) Cessation of interest payments. The Notes shall cease to bear interest from the end of the day which precedes the Redemption Date (as defined in § 5). If the Issuer fails to redeem the Notes when due, the obligation to pay interest on the outstanding nominal amount shall continue to accrue beyond the due date until (but excluding) the date of actual redemption of the Notes.

(2) Ende des Zinslaufs. Der Zinslauf der Teilschuldverschreibungen endet mit Ablauf des Tages, der dem Rückzahlungstag (wie in § 5 definiert) vorausgeht. Sollte die Emittentin die Teilschuldverschreibungen bei Fälligkeit nicht einlösen, endet die Verpflichtung zur Zahlung von Zinsen auf den ausstehenden Nennbetrag nicht am Rückzahlungstag, sondern erst mit (jedoch ausschließlich) dem Tag der tatsächlichen Rückzahlung der Teilschuldverschreibungen.

(3) Calculation of interest. Where interest is to be calculated in respect of a period which is shorter than an Interest Period (as defined below), the interest will be calculated on the basis of the actual number of days elapsed in the period from (and including) the most recent Interest Payment Date (or, if none, the Issue Date), divided by the number of days in the Interest Period in which the relevant period falls (including the first such day but excluding the last) ("actual/actual", according to ICMA).

(3) Zinsberechnung. Sind Zinsen im Hinblick auf einen Zeitraum zu berechnen, der kürzer als eine Zinsperiode (wie nachstehend definiert) ist, so werden sie auf der Grundlage der tatsächlichen Anzahl der im jeweiligen Zeitraum ab (und einschließlich) dem unmittelbar vorhergehenden Zinszahlungstag (oder, falls es einen solchen nicht gibt, ab dem Ausgabetag) verstrichenen Tage, dividiert durch die Anzahl der Tage in der Zinsperiode, in die der jeweilige Zeitraum fällt (einschließlich des ersten solchen Tages, jedoch ausschließlich des letzten), berechnet ("actual/actual", gemäß ICMA-Regelung).

"Interest Period" means the period from the Issue Date (inclusive) up to the first Interest Payment Date (exclusive) and thereafter from any Interest Payment Date (inclusive) up to the next following Interest Payment

"Zinsperiode" bezeichnet den Zeitraum ab dem Ausgabetag (einschließlich) bis zum ersten Zinszahlungstag (ausschließlich) und danach ab jedem Zinszahlungstag (einschließlich) bis zum nächstfolgenden

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Date (exclusive). §5 Maturity and Redemption

Zinszahlungstag (ausschließlich). §5 Fälligkeit und Rückzahlung

(1) Maturity. The Notes will be redeemed at their Nominal Amount on 2 July 2019 (the "Redemption Date") to the extent they have not previously been redeemed or purchased and cancelled partially or fully.

(1) Fälligkeit. Die Teilschuldverschreibungen werden am 2.7.2019 (der "Rückzahlungstag") zum Nennbetrag zurückgezahlt, soweit sie nicht vorher ganz oder teilweise zurückgezahlt oder gekauft und entwertet worden sind.

(2) Issuer Call Right and Early Redemption due to a Tax Event. If as a result of a change of, or a supplement to, the tax laws applicable by or in the Republic of Austria or a change in, or supplement to, their official interpretation, the Issuer at the time of the next following Interest Payment Date would be required to pay Additional Amounts as defined in § 7(1) and the Issuer can not avoid such obligation by measures reasonable for the Issuer, the Issuer will be entitled to redeem all (but not parts of the) Notes at par plus accrued interest until the date of redemption, if any.

(2) Kündigungsrecht der Emittentin und vorzeitige Rückzahlung aus einem Steuerereignis. Falls die Emittentin als Folge einer Änderung oder Ergänzung der steuerrechtlichen Vorschriften von oder in der Republik Österreich oder als Folge einer Änderung oder Ergänzung der Anwendung oder der offiziellen Auslegung dieser Vorschriften am nächstfolgenden Zinszahlungstag zur Zahlung von zusätzlichen Beträgen (wie in § 7(1) definiert) verpflichtet ist und die Emittentin diese Verpflichtung nicht durch ihr zumutbare Maßnahmen vermeiden kann, ist die Emittentin berechtigt, die Teilschuldverschreibungen insgesamt, jedoch nicht teilweise, vorzeitig zu kündigen und zum Nennwert zuzüglich allfälliger bis zum für die Rückzahlung festgesetzten Tag aufgelaufener Zinsen zurückzuzahlen.

Such early redemption must however not (i) occur with effect earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such Additional Amounts, if at that time a payment in respect of the Notes would be then due, or (ii) occur, if at the time when the redemption is effected, the obligation to pay or to deduct or withhold Additional Amounts ceases to be in force.

Eine solche vorzeitige Kündigung darf allerdings nicht (i) mit Wirkung früher als 90 Tage vor dem frühest möglichen Termin erfolgen, an dem die Emittentin verpflichtet wäre, solche zusätzlichen Beträge zu zahlen, falls eine Zahlung auf die Teilschuldverschreibungen dann fällig sein würde, oder (ii) erfolgen, wenn zu dem Zeitpunkt, zu dem die Kündigung erfolgt, die Verpflichtung zur Zahlung von zusätzlichen Beträgen oder zum Einbehalt oder Abzug nicht mehr wirksam ist.

Such early redemption shall be notified by the Issuer with at least 30 days' notice to the Paying Agent by registered letter, provided that such redemption shall be effective on the date of delivery of the redemption notice to the Paying Agent if the redemption is made public to the Noteholders pursuant to § 13. It shall be irrevocable, shall state the date fixed for the repayment and shall

Eine solche vorzeitige Kündigung ist durch die Emittentin mit einer Kündigungsfrist von mindestens 30 Tagen gegenüber der Zahlstelle mittels eingeschriebenem Brief mitzuteilen, wobei eine solche Kündigung zum Zeitpunkt des Zugangs der Kündigung bei der Zahlstelle wirksam wird, sofern die Kündigung gegenüber den Anleihegläubigern gemäß § 13 bekannt

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contain a summary explanation setting out the circumstances constituting the Issuer's repayment right.

gemacht wird. Sie ist unwiderruflich, muss den für die Rückzahlung festgelegten Termin nennen und eine zusammenfassende Erklärung enthalten, welche die das Rückzahlungsrecht der Emittentin begründenden Umstände darlegt.

(3) Early Repayment. Except for the provision contained above and in § 8(1), the Issuer shall not be entitled to repay the Notes prior to the Redemption Date.

(3) Vorzeitige Rückzahlung. Mit Ausnahme der obigen Bestimmungen und des § 8(1) ist die Emittentin nicht berechtigt, die Teilschuldverschreibungen vor dem Rückzahlungstag zurückzuzahlen.

§6 Payments

§6 Zahlungen

(1) Payment of Principal and Interest. The Issuer undertakes to pay, as and when due, principal and interest payable on the Notes in euro. Such payments shall, subject to applicable fiscal and other laws and regulations, be made to the Paying Agent for on-payment to the Clearing System or to its order for credit to the respective account holders.

(1) Zahlung von Kapital und Zinsen. Die Emittentin verpflichtet sich, Kapital und Zinsen bei Fälligkeit in Euro zu bezahlen. Derartige Zahlungen erfolgen, vorbehaltlich geltender steuerrechtlicher und sonstiger gesetzlicher Regelungen und Vorschriften, an die Zahlstelle zur Weiterleitung an das Clearingsystem oder an dessen Order zur Gutschrift für die jeweiligen Kontoinhaber.

(2) Due Date not a Business Day. If the due date for any payment of principal and/or interest is not a Business Day, payment shall be made on the next following Business Day; Noteholders shall have no right to claim payment of interest or other indemnity in respect of such delay in payment.

(2) Fälligkeitstag kein Geschäftstag. Falls ein Fälligkeitstag für die Zahlung von Kapital und/oder Zinsen kein Geschäftstag ist, erfolgt die Zahlung erst am nächstfolgenden Geschäftstag; Anleihegläubiger sind nicht berechtigt, eine Zinszahlung oder eine andere Entschädigung wegen eines solchen Zahlungsaufschubs zu verlangen.

"Business Day" means a day (other than a Saturday or Sunday) on which the TransEuropean Automated Real-Time Gross Settlement Express Transfer (TARGET2) System and the Clearing Systems settle payments in euro.

"Geschäftstag" ist ein Tag (außer einem Samstag oder Sonntag), an dem das TransEuropean Automated Real-Time Gross Settlement Express Transfer (TARGET2) System und die Clearingsysteme Zahlungen in Euro abwickeln.

§7 Taxation

§7 Steuern

(1) Taxes. All payments of principal and interest in respect of the Notes will be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature ("Taxes") imposed, levied, collected, withheld or assessed by the Republic of Austria or any political subdivision or any authority of or in the Republic of Austria that has power to tax,

(1) Steuern. Sämtliche Zahlungen von Kapital und Zinsen in Bezug auf die Teilschuldverschreibungen werden ohne Einbehalt oder Abzug von Steuern, Abgaben, Festsetzungen oder behördlichen Gebühren jedweder Art (die "Steuern") geleistet, die von der Republik Österreich oder einer ihrer Gebietskörperschaften oder Behörden mit der Befugnis zur Erhebung von Steuern auferlegt, erhoben, eingezogen,

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unless the Issuer is compelled by a law or other regulation to make such withholding or deduction. In that event, the Issuer will pay, subject to the provisions of this § 7, such additional amounts (the "Additional Amounts") as will result in receipt by the Noteholders of the same amounts as they would have received if no such withholding or deduction had been required.

einbehalten oder festgesetzt werden, es sei denn, ein solcher Einbehalt oder Abzug ist gesetzlich vorgeschrieben. In einem solchen Falle wird die Emittentin, vorbehaltlich der Bestimmungen dieses § 7 solche zusätzlichen Beträge (die "Zusätzlichen Beträge") zahlen, sodass die Anleihegläubiger die Beträge erhalten, die sie ohne Einbehalt oder Abzug erhalten hätten.

(2) Exception. However, no such Additional Amounts shall be payable with respect to such Taxes

(2) Ausnahme. Solche Zusätzlichen Beträge sind jedoch nicht zahlbar wegen solcher Steuern

(i) to which a Noteholder is subject to because of a nexus to the Republic of Austria other than the mere fact of being the holder of the relevant Notes; or

(i) denen ein Anleihegläubiger wegen einer anderen Beziehung zur Republik Österreich unterliegt als der bloßen Tatsache, dass er der Inhaber der betreffenden Teilschuldverschreibungen ist; oder

(ii) in respect of which such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to (a) European Council Directive 2003/48/EC or any other European Union Directive implementing the conclusions of the ECOFlN Council meeting of 26-27 November 2000 on the taxation of savings income, or the EUSource Tax Act (EU Quellensteuergesetz, BGBl I 2004/33), or, (b) any international treaty or understanding relating to such taxation and to which the Republic of Austria or the European Union is a party, or (c) any law implementing or complying with, or introduced in order to conform to, such Directive, Regulation, treaty or understanding; or

(ii) deren Einbehalt oder Abzug auf eine Zahlung an eine natürliche Person erfolgt und zwar auf der Grundlage der (i) Richtlinie 2003/48/EG der Europäischen Union oder einer anderen Richtlinie der Europäischen Union zur Besteuerung privater Zinserträge, die die Beschlüsse der ECOFIN-Versammlung vom 26. bis 27. November 2000 umsetzt oder des EU Quellensteuergesetzes (BGBl I 2004/33) oder (ii) ein internationaler Vertrag oder ein Abkommen betreffend solch einer Besteuerung und zu welcher die Republik Österreich oder die Europäische Union ein Vertragspartner ist oder (iii) aufgrund eines Gesetzes, das in Umsetzung oder Entsprechung einer solchen Richtlinie, Verordnung, Vertrag oder Abkommen erlassen wurde; oder

(iii) which the Noteholder would not be subject to if he had presented his Notes for payment within 30 days from the due date for payment, or, if the necessary funds have not been provided to the Paying Agent when due, from the date on which such funds have been provided to the Paying Agent, and a notice to that effect has been published in accordance with § 13; or

(iii) denen der Anleihegläubiger nicht unterläge, wenn dieser seine Teilschuldverschreibungen binnen 30 Tagen nach Fälligkeit bzw., falls die notwendigen Beträge der Zahlstelle bei Fälligkeit nicht zur Verfügung gestellt worden sind, ab dem Tag, an dem diese Mittel der Zahlstelle zur Verfügung gestellt worden sind und dies gemäß § 13 bekannt gemacht wurde, zur

54

Zahlung vorgelegt hätte; oder (iv) which are withheld or deducted by a Paying Agent if payment could have been made by another Paying Agent in a Member State of the European Union without such deduction or withholding; or

(iv) die von einer Zahlstelle einbehalten oder abgezogen werden, wenn die Zahlung von einer anderen Zahlstelle in einem Mitgliedsstaat der Europäischen Union ohne den Einbehalt oder Abzug hätte vorgenommen werden können; oder

(v) which are withheld by a securities custodian or a person acting as collection agent for the Noteholder or which are levied otherwise than by the Issuer making a withholding or deduction from any amounts of principal or interest payable by it; or

(v) die von einer Depotbank oder einer als Inkassobeauftragten des Anleihegläubigers handelnden Person oder auf andere Weise zu entrichten sind als dadurch, dass die Emittentin aus den von ihr zu leistenden Zahlungen von Kapital oder Zinsen einen Abzug oder Einbehalt vornimmt.

(vi) which are withheld or deducted by a paying or custodian agent (auszahlende oder depotführende Stelle) (in terms of Sec 95 EStG or a corresponding subsequent provision) located within the Republic of Austria – Austrian withholding tax (Kapitalertragsteuer) shall therefore in no case be a tax which requires the Issuer to pay Additional Amounts; or

(vi) die von einer in der Republik Österreich befindlichen auszahlenden oder depotführenden Stelle (im Sinne des § 95 EStG idgF oder einer allfälligen entsprechenden Nachfolgebestimmung) einbehalten oder abgezogen werden – die österreichische Kapitalertragsteuer ist daher keinesfalls eine Steuer, für die seitens der Emittentin Zusätzliche Beträge zu bezahlen sind; oder

(vii) which could be reclaimed pursuant to a double taxation treaty or the fiscal laws of Austria or be dischargeable at the source due to community law (EU) provisions.

(vii)

(3) Any reference in these Terms and Conditions to principal or interest will be deemed to include any Additional Amounts in respect of principal or interest (as the case may be) which are payable under this § 7. §8 No Ordinary Termination. Events of Default and Repayment (1) No ordinary termination. Noteholders shall have no right of ordinary termination. This shall not affect the Noteholders' extraordinary termination rights for cause, in particular upon occurrence of the events described in § 8 (2).

die aufgrund eines Doppelbesteuerungsabkommens oder gemäß den Steuergesetzen der Republik Österreich rückerstattbar wären oder aufgrund gemeinschaftsrechtlicher Bestimmungen (EU) an der Quelle entlastbar wären.

(3) Eine Bezugnahme in diesen Anleihebedingungen auf Kapital oder Zinsen schließt jegliche Zusätzlichen Beträge im Hinblick auf Kapital bzw. Zinsen ein, die gemäß diesem § 7 zahlbar sind. §8 Kein ordentliches Kündigungsrecht. Kündigungsgründe und Rückzahlung

(1) Kein ordentliches Kündigungsrecht. Ein ordentliches Kündigungsrecht der Anleihegläubiger besteht nicht. Ein Recht zur außerordentlichen Kündigung der Anleihegläubiger aus wichtigem Grund, insbesondere bei Eintritt der in § 8 (2) beschriebenen Ereignisse, bleibt hierdurch

55

unberührt. (2) Extraordinary Termination - Events of Default. Each Noteholder shall be entitled to terminate the Notes for cause and to demand their immediate redemption at their Nominal Amount together with interest accrued until the date of redemption (exclusive). In particular, a good cause for termination shall be deemed to have occurred if any of the following events (each an "Event of Default") occurs:

(2) Außerordentliche Kündigung Kündigungsgründe. Jeder Anleihegläubiger ist berechtigt, seine Teilschuldverschreibungen aus wichtigem Grund zu kündigen und deren sofortige Rückzahlung zum Nennbetrag, zuzüglich bis zum Tag der Rückzahlung (ausschließlich) aufgelaufener Zinsen zu verlangen. Ein wichtiger Grund ist insbesondere dann gegeben, wenn einer der folgenden Kündigungsgründe vorliegt (jeweils ein "Kündigungsgrund"):

(a) Non-Payment: the Issuer fails to pay any principal or interest or any other amounts due pursuant to § 7 on any of the Notes when due and such failure continues for a period of 7 Business Days (as defined in § 6(2)) after the relevant due date; or

(a) Nichtzahlung: die Emittentin versäumt es, Kapital oder Zinsen oder sonstige nach § 7 auf die Teilschuldverschreibungen zahlbare Beträge innerhalb von 7 Geschäftstagen (wie in § 6(2) definiert) nach dem betreffenden Fälligkeitsdatum zu zahlen; oder

(b) Breach of Negative Pledge: the Issuer does not comply with its obligations under § 3; or

(b) Verletzung der Negativverpflichtungen: die Emittentin gegen eine ihrer Verpflichtungen gemäß § 3 verstößt; oder; oder

(c) Breach of Other Obligations: the Issuer does not or not entirely perform or comply with any one or more of its other obligations under the Notes and such default is not remedied within 15 Business Days after the Paying Agent has received notice thereof from a Noteholder; or

(c) Verletzung anderer Verpflichtungen: die Emittentin erfüllt eine oder mehrere ihrer anderen Verpflichtungen aus den Teilschuldverschreibungen nicht ordnungsgemäß oder nicht zur Gänze und dieser Zustand wird nicht innerhalb von 15 Geschäftstagen, nachdem die Zahlstelle eine diesbezügliche Mitteilung durch den Anleihegläubiger erhalten hat, behoben; oder

(d) Cross-Default: an obligation exceeding EUR 30,000,000 (or the equivalent thereof in any other currency) of the Issuer or a Material Subsidiary which has been finally established by an (arbitration) court or a public authority is not fulfilled, and such failure continues for more than four weeks after the Paying Agent has been notified thereof by a Noteholder; or

(d) Drittverzug: eine von einem (Schieds-) Gericht oder einer Verwaltungsbehörde rechtskräftig festgestellte Schuld der Emittentin oder einer Wesentlichen Tochtergesellschaft mit einem EUR 30,000.000 (oder den Gegenwert in einer anderen Währung) übersteigenden Betrag wird nicht erfüllt und diese Nichterfüllung dauert länger als vier Wochen fort, nachdem die Zahlstelle hierüber von einem Anleihegläubiger eine Benachrichtigung erhalten hat; oder

(e) Enforcement of Security: a security created to secure an obligation of the Issuer is enforced by a contractual party with the consent of the Issuer, resulting in a material

(e) Verwertung von Sicherheiten: eine für eine Verbindlichkeit der Emittentin bestellte Sicherheit von einer Vertragspartei unter Zustimmung der Emittentin verwertet wird

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impairment of the Issuer's ability to service its obligations under the Notes; or

(f)

Suspension of Payments: the Issuer or any of its Material Subsidiaries suspends its payments generally or announces its inability to meet its financial obligations, or offers its creditors a general arrangement to pay its debts; or

und es dadurch zu einer wesentlichen Beeinträchtigung der Fähigkeit der Emittentin kommt, ihre Verbindlichkeiten aus den Teilschuldverschreibungen zu bedienen; oder (f)

Einstellung von Zahlungen: die Emittentin oder eine ihrer Wesentlichen Tochtergesellschaften stellt ihre Zahlungen allgemein ein oder gibt ihre Unfähigkeit bekannt, ihre finanziellen Verpflichtungen zu erfüllen oder bietet ihren Gläubigern eine allgemeine Regelung zur Bezahlung ihrer Schulden an; oder

(g) Insolvency: any court institutes insolvency proceedings over the assets of the Issuer or any of its Material Subsidiaries, or the Issuer or any of its Material Subsidiaries applies for the opening of such proceedings, or an application for the opening of such insolvency proceedings has been rejected for lack of assets; or

(g) Insolvenz: ein Gericht ein Insolvenzverfahren über das Vermögen der Emittentin oder einer ihrer Wesentlichen Tochtergesellschaften eröffnet oder die Emittentin oder eine ihrer Wesentlichen Tochtergesellschaften beantragt die Einleitung eines solchen Verfahrens, oder ein solches Insolvenzverfahren mangels kostendeckenden Vermögens abgewiesen wird; oder

(h) Liquidation: the Issuer or any of its Material Subsidiaries is liquidated (except in connection with a merger or other form of combination with another company or in connection with another reorganisation (within the meaning of the Austrian Reorganisation Tax Act (Umgündungssteuergesetz), provided such other or new company or, as the case may be, companies assumes all liabilities under the Notes and the credit worthiness of such company is equal or higher than the Issuer's; or

(h) Liquidation: die Emittentin oder eine ihrer Wesentlichen Tochtergesellschaften wird liquidiert (es sei denn, dies geschieht im Zusammenhang mit einer Verschmelzung, einer anderen Form des Zusammenschlusses mit einer anderen Gesellschaft oder im Zusammenhang mit einer anderen Umgründung (im Sinne des österreichischen Umgründungssteuergesetzes), sofern die andere oder neue Gesellschaft oder gegebenenfalls die anderen oder neuen Gesellschaften sämtliche Verpflichtungen aus diesen Teilschuldverschreibungen übernimmt und die Kreditwürdigkeit dieser Gesellschaft gleich oder höher als die der Emittentin ist; oder

(i)

Cessation of Business Operations: the Issuer or any of its Material Subsidiaries ceases or threatens to cease to carry on the whole or substantially the whole of its business operations; or

(i)

Einstellung der Geschäftstätigkeit: die Emittentin oder eine ihrer Wesentlichen Tochtergesellschaften stellt ihren gesamten oder ihren nahezu gesamten Geschäftsbetrieb ein oder droht, dies zu tun; oder

(j)

Change of Control. a Change of Control (as defined below) occurs, except where an internationally recognised rating agency assigns to the Issuer within 60 days after

(j)

Kontrollwechsel: ein Kontrollwechsel (wie unten definiert) erfolgt, es sei denn, eine international anerkannte Ratingagentur erteilt der Emittentin innerhalb von 60 Tagen

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such Change of Control a rating of at least "BBB" in relation to its long-term senior bonds. The Issuer shall publish a Change of Control and the assignment of a rating, if any, without delay pursuant to § 13. A termination in accordance with this sub-para (i) shall only be effective where the respective Default Notice pursuant to para (3) is made within 30 days after the expiry of the initial 60 days' period;

nach einem derartigen Kontrollwechsel ein Rating von zumindest "BBB" in Bezug auf deren langfristige, nicht-nachrangige Anleihen. Die Emittentin wird einen Kontrollwechsel und die Erteilung eines allfälligen Ratings unverzüglich gemäß § 13 bekannt machen. Eine Kündigung nach diesem Unterabsatz (i) ist nur gültig, wenn die entsprechende Kündigungserklärung gemäß Absatz 3 innerhalb von 30 Tagen nach Ablauf der ursprünglichen 60 Tage Frist erfolgt;

whereas:

wobei:

"Material Subsidiary" within this § 8 means a Subsidiary of the Issuer

"Wesentliche Tochtergesellschaft" im Sinne dieses §8 meint eine Tochtergesellschaft der Emittentin,

(i) the value of whose total assets or turnover on a consolidated basis equals or exceeds 10 per cent. of the aggregate total assets or turnover of the Issuer on a consolidated basis; or

(i) deren gesamte Vermögenswerte oder Umsätze auf konsolidierter Basis wertmäßig 10% oder mehr der gemeinsamen gesamten Vermögenswerte oder Umsätze der Emittentin auf konsolidierter Basis entsprechen; oder

(ii) whose earnings before income and taxes (EBIT) on a consolidated basis equals or exceeds 10 per cent. of the aggregate net operating income of the Issuer on a consolidated basis; and

(ii) deren EBIT auf konsolidierter Basis 10% oder mehr des gesamten Nettobetriebsergebnisses der Emittentin auf konsolidierter Basis entspricht; und

a report by the Issuer’s auditor that in his opinion on the basis of the most recent audited consolidated financial statements a Subsidiary of the Issuer is or is not or was or was not a Material Subsidiary shall, in the absence of manifest error, be conclusive and binding on all parties;

ein Bericht des Abschlussprüfers der Emittentin, dass nach seiner Auffassung auf Basis des letzten geprüften konsolidierten Jahresabschlusses der Emittentin eine Tochtergesellschaft der Emittentin eine Wesentliche Tochtergesellschaft ist oder nicht ist oder war oder nicht war, soll (sofern kein offensichtlicher Fehler vorliegt) für alle Parteien endgültig und bindend sein;

a "Change of Control Event" within the meaning of this § 8 shall be deemed to have occurred, if at any time a person or several persons acting in concert or third parties or parties acting for such person(s) (other than OMV Aktiengesellschaft and/or International Petroleum Investment Company of Abu Dhabi and/or any of their wholly owned subsidiaries), directly or indirectly acquire (i) more than 50 per cent. of the voting rights connected with the shares of the Issuer, or (ii) the right to determine the majority of the

Als "Kontrollwechsel" im Sinne dieses § 8 gilt, wenn eine oder mehrere gemeinsam vorgehende Personen oder eine Drittperson oder -personen, die für eine solche Person oder Personen handeln (ausgenommen OMV Aktiengesellschaft und/oder International Petroleum Investment Company of Abu Dhabi und/oder ihre alleinigen Tochtergesellschaften), zu irgendeiner Zeit direkt oder indirekt (i) mehr als 50% der mit den Aktien der Emittentin verbundenen Stimmrechte oder (ii) das

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members of the management board (Vorstand) and/or the shareholders' representatives in the supervisory board (Aufsichtsrat).

Recht, die Mehrzahl der Mitglieder des Vorstands und/oder der Gesellschaftervertreter im Aufsichtsrat zu bestimmen, erworben haben.

(3) Expiry of termination right. The right to declare Notes due shall lapse if the Event of Default has been cured before the right is validly exercised. No event or circumstance other than an event specified in § 8(2) shall entitle Noteholders to declare their Notes due and payable prior to their stated maturity, save as expressly provided for in these Terms and Conditions and subject to applicable mandatory law.

(3) Erlöschen des Kündigungsrechts. Das Kündigungsrecht erlischt, falls der Kündigungsgrund vor Ausübung des Rechts geheilt wurde. Vorbehaltlich anwendbaren zwingenden Rechts berechtigen andere Ereignisse oder Umstände, die keines der in § 8(2) genannten Ereignisse darstellen, den Anleihegläubiger nicht dazu, seine Teilschuldverschreibungen vorzeitig zur Rückzahlung fällig zu stellen, es sei denn, dies ist ausdrücklich in diesen Anleihebedingungen bestimmt.

(4) Termination Notice. Any termination in accordance with § 8(2) shall be made by means of mail to the Paying Agent. Notices shall become effective with delivery to the Paying Agent. The notice shall contain evidence that the respective Noteholder at the time of such notice is the holder of the relevant Notes. Such evidence may be provided by means of a certificate of the Noteholder’s depository bank or by other appropriate means.

(4) Kündigungserklärung. Eine Kündigung nach § 8(2) ist schriftlich in deutscher Sprache per Brief an die Zahlstelle zu übermitteln. Mitteilungen werden mit Zugang an die Zahlstelle wirksam. Der Mitteilung ist ein Nachweis darüber beizufügen, dass der betreffende Anleihegläubiger zum Zeitpunkt der Mitteilung Inhaber der betreffenden Teilschuldverschreibungen ist. Der Nachweis kann durch eine Bescheinigung der Depotbank oder auf andere geeignete Weise erbracht werden.

§9 Prescription Period

§9 Verjährung

The limitation period for claims in respect of principal of the Notes shall be thirty years, and in respect of interest three years respectively, in each case after due date.

Die Verjährungsfrist aus Ansprüchen auf das Kapital beträgt dreißig Jahre und aus Ansprüchen auf Zinsen drei Jahre, jeweils ab Fälligkeit.

§ 10 Paying Agent

§ 10 Zahlstelle

(1) Paying Agent. Erste Group Bank AG with its business address at Graben 21, 1010 Vienna, Austria shall be the initial paying agent (the "Paying Agent").

(1) Zahlstelle. Die Erste Group Bank AG mit der Geschäftsanschrift Graben 21, 1010 Wien, Österreich ist die anfängliche Zahlstelle (die "Zahlstelle").

(2) Status of the Paying Agent. The Paying Agent acts solely as agent of the Issuer and does not assume any obligations towards or relationship of contract, agency or trust for or with any of the Noteholders.

(2) Rechtsverhältnisse der Zahlstelle. Die Zahlstelle handelt ausschließlich als Beauftragte der Emittentin und übernimmt keine Verpflichtungen gegenüber den Anleihegläubigern; es wird kein Vertrags-, Auftrags- oder Treuhandverhältnis zwischen ihr und den Anleihegläubigern begründet.

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(3) Variation or Termination of Appointment. The Issuer reserves the right at any time to vary or terminate the appointment of any Paying Agent and to appoint successor or additional paying agents. Notice of any change in the paying agents or in the specified office of any Paying Agent will promptly be given to the Noteholders pursuant to § 13. The Issuer will procure that there will at all times be a Paying Agent. The Issuer will also procure that, so long as the Notes are listed on a stock exchange, there will at all times be a paying agent with a specified office in such city as may be required by the rules of the relevant stock exchange and appoint a potential successor or a potential additional paying agent in accordance with such rules, such potential successor or potential additional paying agent being a credit institution within Austria.

§ 11 Further Issues of Notes, Repurchase, Cancellation

(3) Änderung oder Beendigung der Bestellung. Die Emittentin behält sich das Recht vor, jederzeit die Benennung der Zahlstelle zu verändern oder zu beenden und Nachfolger bzw. zusätzliche Zahlstellen zu ernennen. Den Anleihegläubigern werden Änderungen in Bezug auf die Zahlstelle oder dessen angegebene Geschäftsstelle umgehend gemäß § 13 bekanntgemacht. Die Emittentin wird dafür sorgen, dass stets eine Zahlstelle ernannt ist. Die Emittentin wird ferner dafür sorgen, dass, so lange die Teilschuldverschreibungen an einer Wertpapierbörse notiert sind und die Regularien dieser Börse dies verlangen, eine Zahlstelle mit einer benannten Geschäftsstelle an dem von der betreffenden Börse vorgeschriebenen Ort ernannt ist und einen eventuellen Nachfolger bzw. eine eventuelle zusätzliche Zahlstelle in Übereinstimmung mit diesen Regularien zu ernennen, wobei es sich bei einem eventuellen Nachfolger bzw. einer eventuellen zusätzlichen Zahlstelle um ein Kreditinstitut mit Sitz innerhalb der Republik Österreich handeln wird. § 11 Begebung weiterer Teilschuldverschreibungen, Ankauf, Entwertung

(1) Further Issues of Notes. The Issuer may apart from issues of bonds that do not form a single series with the Notes - at any time without the consent of the Noteholders issue further bonds which have the same Terms and Conditions as these Notes in all respects (if applicable, except for the issue date, the start of the interest accrual and the issue price) so that they form a single bond with these Notes. The Issuer shall be free to issue further bonds.

(1) Begebung weiterer Teilschuldverschreibungen. Die Emittentin ist neben der Emission weiterer Teilschuldverschreibungen, die mit diesen Teilschuldverschreibungen keine einheitliche Serie bilden - berechtigt, jederzeit ohne Zustimmung der Anleihegläubiger weitere Teilschuldverschreibungen mit gleicher Ausstattung (gegebenenfalls mit Ausnahme des Tages der Emission, des Verzinsungsbeginns und des Ausgabepreises) in der Weise zu emittieren, dass sie mit diesen Teilschuldverschreibungen eine einheitliche Schuldverschreibung bilden. In der Begebung weiterer Anleihen ist die Emittentin frei.

(2) Repurchase. The Issuer may at any time purchase Notes in the open market or otherwise and at any price. Notes so acquired may at the discretion of the Issuer be held, sold or submitted to the Paying

(2) Rückkauf. Die Emittentin ist berechtigt, Teilschuldverschreibungen im Markt oder anderweitig zu jedem beliebigen Preis zu kaufen. Die von der Emittentin erworbenen Teilschuldverschreibungen können nach

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Agent in order to be cancelled.

(3) All Notes completely repaid must be cancelled without delay and cannot be reissued or sold again.

Wahl der Emittentin von ihr gehalten, weiterverkauft oder bei der Zahlstelle zwecks Entwertung eingereicht werden. (3) Sämtliche vollständig zurückgezahlten Teilschuldverschreibungen sind unverzüglich zu entwerten und können nicht wieder emittiert oder wieder verkauft werden.

§ 12 Listing

§ 12 Börsenotierung

It is intended to apply for the admission to trading of the Notes on the Second Regulated Market of the Vienna Stock Exchange.

Es ist beabsichtigt, die Zulassung der Teilschuldverschreibungen zum Handel im Geregelten Freiverkehr an der Wiener Börse zu beantragen.

§ 13 Notices

§ 13 Mitteilungen

(1) Notices. All notices concerning the Notes to the Noteholders shall be published in the Amtsblatt zur Wiener Zeitung or, if it ceases to be published, in another newspaper with circulation in whole Austrian or any other media permissible by law. Each such notice shall be deemed to have been validly given on the fifth day following the date of publication.

(1) Mitteilungen. Alle die Teilschuldverschreibungen betreffenden Mitteilungen an die Anleihegläubiger sind im Amtsblatt zur Wiener Zeitung oder, falls diese ihr Erscheinen einstellt, in einer anderen Tageszeitung mit Verbreitung in ganz Österreich oder jedem anderen aufgrund gesetzlicher Bestimmungen zulässigen Medium zu veröffentlichen. Jede derartige Mitteilung gilt mit dem fünften Tag nach der Veröffentlichung als wirksam erfolgt.

(2) Notice via electronic means. If the Notes are admitted for trading on any stock exchange, notices to the Noteholders will be valid if published through electronic means having general circulation within the European Union and in the jurisdiction of the respective stock exchange on which the Notes may be listed from time to time, for so long as the Notes are listed on the respective exchange and the rules of any such exchange so require. Any such notice shall be deemed to have been given on the date of the first publication or, when required to be published by more than one electronic means, on the fifth day following the date on which the notice has first been published by all required electronic means.

(2) Mitteilungen in elektronischer Form. Falls die Teilschuldverschreibungen zum Handel an einer Börse zugelassen werden, gelten sämtliche Mitteilungen an die Anleihegläubiger als ordnungsgemäß bekannt gemacht, wenn sie durch elektronische Mitteilungsformen mit Verbreitung innerhalb der Europäischen Union und dem Staat der jeweiligen Wertpapierbörse, an der Teilschuldverschreibungen notiert sind, durch elektronische Veröffentlichung veröffentlicht werden, solange diese Notierung fortdauert und die Regeln der jeweiligen Börse dies erfordern. Jede Mitteilung gilt mit dem fünften Tag nach der ersten Veröffentlichung als bekannt gemacht; falls eine Veröffentlichung in mehr als einer elektronischen Mitteilungsform vorgeschrieben ist, ist der Tag maßgeblich, an dem die Bekanntmachung erstmals in allen erforderlichen elektronischen

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Mitteilungsformen erfolgt ist. (3) Notice via the Clearing System. Notices to Noteholders may (subject to applicable stock exchange rules and requirements), so long as any Global Note representing the Notes is held on behalf of the Clearing System, be given in lieu of publication by electronic means pursuant to § 13(2) by delivery of the relevant notice to the Clearing System for communication to the Noteholders.

§ 14 Governing Law and Jurisdiction

(3) Mitteilungen über das Clearingsystem. Mitteilungen an die Anleihegläubiger können anstelle der Veröffentlichung durch elektronische Mitteilungsform nach Maßgabe des §13(2), (vorbehaltlich anwendbarer Börsenvorschriften bzw. –regeln) solange eine die Teilschuldverschreibungen verbriefende Sammelurkunde durch das Clearingsystem gehalten wird, durch Abgabe der entsprechenden Bekanntmachung an das Clearingsystem zur Weiterleitung an die Anleihegläubiger ersetzt werden. § 14 Anwendbares Recht und Gerichtsstand

(1) Governing law. The Notes are governed by the laws of the Republic of Austria.

(1) Anwendbares Recht. Teilschuldverschreibungen österreichischem Recht.

Die unterliegen

(2) Place of Jurisdiction. For all disputes which may arise out or in connection with the Notes, the commercial court competent for Vienna, Inner City, shall have exclusive jurisdiction. The submission to the jurisdiction of the courts of Vienna shall not (and shall not be construed so as to) limit the right of any Noteholder (in particular consumers) to take proceedings in any other court of competent jurisdiction , nor shall the taking up of proceedings in any one or more jurisdictions preclude the taking up of proceedings in any other jurisdiction (whether concurrently or not) if and to the extent permitted by law.

(2) Gerichtsstand. Für sämtliche Rechtsstreitigkeiten, die aus oder im Zusammenhang mit den Teilschuldverschreibungen entstehen, ist das in Handelssachen zuständige Gericht für Wien, Innere Stadt, ausschließlich zuständig. Die Gerichtsstandsvereinbarung beschränkt nicht das Recht der Anleihegläubiger (insbesondere Konsumenten), Verfahren vor einem anderen gesetzlich zuständigen Gericht anzustrengen. Ebenso wenig schließt die Einleitung von Verfahren an einem oder mehreren Gerichtsständen die Einleitung von Verfahren an einem anderen Gerichtsstand aus (gleichgültig, ob diese gleichzeitig geführt werden oder nicht), falls und soweit dies rechtlich zulässig ist.

(2) Place of Jurisdiction in relation to Consumers. In relation to any dispute of a consumer with the Issuer out of or in connection with the Notes (including disputes in connection with non-contractual obligations arising out of or in connection with the Notes) the court being competent in said matters and for such territory located either at the place of residence of the consumer or at the place of the Issuer's domicile or any other court being competent due to a statutory provision shall at the consumer's choice have jurisdiction.

(2) Verbrauchergerichtsstände. Für alle Rechtsstreitigkeiten eines Verbrauchers aus oder im Zusammenhang mit den Teilschuldverschreibungen (einschließlich allfälliger Streitigkeiten im Zusammenhang mit außervertraglichen Schuldverhältnissen, die sich aus oder im Zusammenhang mit den Teilschuldverschreibungen ergeben) gegen den Emittenten ist nach Wahl des Verbrauchers das sachlich und örtlich zuständige Gericht am Wohnsitz des Verbrauchers oder am Sitz des Emittenten oder ein sonstiges, aufgrund der gesetzlichen Bestimmungen zuständiges

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Gericht zuständig. (3) Place of Performance. Place of performance shall be Vienna, Republic of Austria.

§ 15 Language These Terms and Conditions are drawn up in the German language and provided with an English language translation. The German version shall be the only legally binding version. The English translation is for convenience only.

(3) Erfüllungsort. Erfüllungsort Republik Österreich.

ist

Wien,

§ 15 Sprache Diese Anleihebedingungen sind in deutscher Sprache abgefasst und mit einer Übersetzung in die englische Sprache versehen. Der deutsche Wortlaut ist allein rechtsverbindlich. Die englische Übersetzung ist unverbindlich.

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USE OF PROCEEDS The Issuer intends to use the net proceeds of the issue of the Notes for general corporate purposes, including the strengthening of its financial position and to expand its funding options. In particular, the proceeds are intended to be used for refinancing bank debt, the restructuring of the existing debt portfolio, terming out Borealis' debt and optimising the overall finance structure is part of this initiative.

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BOREALIS AG 1.

GENERAL The legal name of the Issuer is Borealis AG. The Issuer's commercial name is "Borealis AG" or "Borealis". The Issuer is registered with the Austrian companies register under FN 269858 a. The competent court for registration is the commercial court Vienna (Handelsgericht Wien). The Issuer was initially registered with the Companies Register on 5 November 2005. It has been established for an indefinite period of time. The Issuer is a stock corporation (Aktiengesellschaft) incorporated and existing under Austrian law and has its business address at Wagramerstraße 17-19, 1220 Vienna, Austria. Its telephone number is +43 (0) 1 224 00-0.

2.

HISTORY AND DEVELOPMENT 1994 Borealis was formed in 1994 by the merger of the petrochemical and polyolefins businesses of Neste and Statoil. The head office opens, located in Lyngby, Denmark. 1995 In October, the first Borstar® polyethylene ("PE") plant starts up in Porvoo (Finland). 1997 Neste sells its 50 per cent shareholding in Borealis equally to OMV Aktiengesellschaft ("OMV") and to the International Petroleum Investment Company ("IPIC") of Abu Dhabi. Statoil retains a 50 per cent share. 1998 The Abu Dhabi National Oil Company (ANDOC) and Borealis agree to build and operate a petrochemical complex in Abu Dhabi and to establish a marketing company in Singapore. The joint venture is named Borouge ("Borouge"). 2000 Start-up of Borealis’ first Borstar® polypropylene ("PP") plant at Schwechat, Austria. 2001 Borouge starts up a new petrochemical complex in Ruwais, UAE. It consists of a 600,000 tons per year ethylene cracker and two Borstar® PE plants with a combined production capacity of 450,000 tons per year. 2002 The first third-party licence for Borealis’ Borstar® technology begins production at the Shanghai Petrochemical Company in China. 2004

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The company reduces its European footprint from seven sites (in 2001) to four operational hubs: Scandinavia (Norway and Sweden), Belgium, Central Europe (Austria and Germany) and Finland. 2005 IPIC and OMV agree to purchase Statoil’s 50 per cent shareholding in Borealis. The new Borealis ownership is 65 per cent IPIC (directly/indirectly) and 35 per cent OMV (directly/indirectly). 2006 Borealis moves its head office from Copenhagen, Denmark, to Vienna, Austria. Borouge and Borealis announce the establishment of an innovation centre in the United Arab Emirates (UAE). 2007 AMI group, a manufacturer in the area of melamine and fertilizers, is integrated into the Borealis group by way of contribution by the shareholders OMV and IPIC. Accordingly, the shareholder structure of Borealis changes, so that IPIC holds 64 per cent and OMV holds 36 per cent of Borealis' shares. Borealis' changes its legal form: It is converted from a limited liability company (GmbH) into a stock corporation and its new firm name is Borealis AG. 2009 Borealis inaugurates its international innovation headquarters in Linz, Austria. 2010 Borouge 2 starts up. The expansion triples Borouge's total manufacturing capacity to 2 million tonnes of PE and PP per year. Borealis completes its major investment in LDPE plant in Stenungsund, Sweden. In June 2010, Borealis inaugurates an over EUR 400 million investment in a new LDPE plant to meet the growing demand of the worldwide wire and cable market. 2011 Borouge 2, the plant expansion project in Ruwais, Abu Dhabi has reached full performance levels with start-up in record time. Borealis starts construction of catalyst plant in Linz, Austria. 2012 Expansion of Base Chemicals business. Borealis acquires the fertilizer producer PEC-Rhin in Ottmarsheim, France.

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2.

CORPORATE PURPOSE According to § 3 of the Issuer's articles of association, the corporate purpose of the Issuer comprises, the development, the manufacture, distribution, marketing and sale of chemical products and plastic materials, directly and indirectly, and granting and acquisition of related licenses, to hold shares in companies, directly or indirectly, in particular in companies operating in the chemical and plastic field, as well as to manage and provide services to such companies. The Issuer is entitled to carry out all business activities which are considered necessary or useful to achieve its objects as set out above, in particular the opening of national and foreign branch offices and subsidiaries, purchase and sale of real estate, conclusion of leasing contracts, and the acquisition of investments in other companies doing business in related areas. According to § 3 of the Issuer's articles of association, the Issuer is not entitled to do business as a bank and to provide financial services.

3.

SHARE CAPITAL The Issuer's share capital (Grundkapital) amounts to EUR 300,000 and is divided into 300,000 no-par value registered shares (nennbetragslose Namensaktien). The share capital of the Issuer is fully paid-in.

4.

CORPORATE GOVERNANCE The Issuer's shares are not listed or admitted to trading on a regulated market, the Austrian Corporate Governance Code is not applicable to the Issuer.

5.

SHAREHOLDERS As of 31 December 2011 the Issuer has the following two shareholders: International Petroleum Investment Company (IPIC) of Abu Dhabi with a direct (3 per cent) and indirect (61 per cent via IPIC Beta Holdings GmbH) participation of in total 64 per cent, and OMV Aktiengesellschaft with a direct (3 per cent) and indirect (33 per cent via OMV Refining & Marketing GmbH) participation of in total 36 per cent The Issuer's shareholder structure can be depicted as follows: International Petroleum Investment Company

24.9% (directly) 64% (directly and indirectly)

OMV Aktiengesellschaft

36% (directly and indirectly)

Borealis AG

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IPIC holds a direct ownership of 24.9 per cent of all voting rights of OMV, and is a member of a shareholders' syndicate with Österreichische Industrieholding AG (ÖIAG, the Austrian Republic's investment and privatization agency), which controls in aggregate 56.4 per cent of the voting rights in OMV. Mr Khadem Al Qubaisi is the chairman of the supervisory board of the Issuer, and Mr David Charles Davies, deputy chairman of the executive board of OMV acts as the vice chairman of the supervisory board of the Issuer. 5.1

INTERNATIONAL PETROLEUM INVESTMENT COMPANY IPIC was established by the Government of the Emirate of Abu Dhabi (the “Government”) rated AA/Aa3 (S&P and Moody’s) pursuant to an Emiri Decree in 1984 with a mandate to invest globally in energy and energy related industries. The Government owns 100% of IPIC and appoints all the members of IPIC's board of directors. IPIC is a long term strategic investor and it currently holds more than 15 investments spanning across 5 continents. IPIC also undertakes certain projects which are of a strategic nature to the Government such as the Abu Dhabi Crude Oil Pipeline which is a strategic project to bypass the congested Strait of Hormuz by providing an overground link between Abu Dhabi’s key onshore oil fields and a deep-water port located at Fujairah (in the U.A.E.) on the Indian Ocean. Certain of IPIC’s key investments include:

5.2



Borealis AG, Austria – 64% stake



Compañía Española de Petróleos, S.A., Spain – wholly owned



Nova Chemicals Corp, Canada – wholly owned



Aabar Investments P.J.S., UAE – 95.47% stake (as at 31st of March, 2012)



OMV Aktiengesellschaft, Austria – 24.9% stake



Cosmo Oil Co, Ltd, Japan – 20.8% stake



Energias de Portugal, S.A.,Portugal – 4.1% stake

OMV AKTIENGESELLSCHAFT With group sales of EUR 34.053 billion, a work force of approximately 29,800 employees in 2011, as well as market capitalization of approximately EUR 8 billion, OMV is one of Austria’s largest listed industrial companies. The two major shareholders are ÖIAG (Austrian State Holding Company) with a 31.5% stake and IPIC with 24.9% stake. There is, furthermore, a consortium agreement between ÖIAG and IPIC providing for block voting and certain restrictions on transfers of shareholdings. In 2011, OMV generated EBIT of EUR 2.473 billion through three primary business segments: Refining and Marketing ("R&M"), Exploration and Production and Gas and Power. OMV is rated A3 (stable) and A- (stable) by Moody’s and Fitch, respectively. As the leading oil and gas group in Central Europe, OMV is active in Refining and Marketing (R&M) in 13 countries through the operation of 4 refineries in Austria, Germany and Romania, as well as the 45% shareholding in Germany’s Bayernoil refineries. OMV holds stakes in integrated chemical and petrochemical plants:

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

Borealis AG, 36% owned



Petrom SA, 51% owned



EconGas GmbH, 50% owned



BAYERNOIL refining network, 45% owned



Turkish company Petrol Ofisi, 97% owned

With the acquisition of a majority stake in the Romanian company Petrom, OMV has become the largest oil and gas group in Central Europe. OMV now has 4,550 filling stations in 13 countries. The market share of the group in the R&M business segment in the Danube Region is now 20%. OMV further strengthened its leading position in the European growth belt through the acquisition of Petrol Ofisi in 2006, Turkey’s leading company in the refining and marketing business.

6.

DEPENDENCY WITHIN THE GROUP A key element of the business strategy of the Issuer is to strengthen the competitiveness of its business through long-term feedstock integration with the Issuer's owners and strategic partners. As an integrated polyolefin manufacturer, Borealis' relationship with its shareholders is aimed at ensuring the supply of hydrocarbon feedstocks for the Issuer’s crackers, and olefins for Borealis’ PE and PP plants. The Issuer has concluded a number of contracts with its shareholders (including affiliates of its shareholders) ordinary course of business, all of which are at arm' length terms. In 2003, IPIC and OMV together with Staoil provided subordinated shareholder funds in an amount of EUR 103 million to support the Issuer during a challenging point in the operating cycle, which was fully repaid in 2011.

7.

ORGANISATIONAL STRUCTURE

7.1

SUBSIDIARIES The Issuer has two shareholders (see above "Shareholders") and various subsidiaries. The following diagram shows major participations in significant subsidiaries within the Borealis Group as of 31 December 2011: Company name

Country, City

Percentage of shares owned

Borealis A/S

Denmark, Copenhagen

100

Borealis Sverige AB

Sweden, Stenungsund

100

Borealis AB

Sweden, Stenungsund

100

Etenförsörjning i Stenungsund AB

Sweden, Stenungsund

80

KB Munkeröd 1:72

Sweden, Stenungsund

100

Borealis Group Services AS

Norway, Bamble

100

Borealis Polymers Oy

Finland, Porvoo

100

Borealis Technology Oy

Finland, Porvoo

100

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Company name

Country, City

Percentage of shares owned

Borealis Financial Services N.V.

Belgium, Mechelen

100

Borealis Polymers N.V.

Belgium, Beringen

100

Borealis Kallo N.V.

Belgium, Kallo

100

Borealis Antwerpen Compounding N.V.

Belgium, Zwijndrecht

100

Borealis Brasil S.A.

Brazil, Itatiba

80

Borealis Poliolefinas da América do Sul Ltda

Brazil, Itatiba

100

Borealis UK Ltd

UK, Manchester

100

Borealis Funding Company Ltd

Isle of Man, Ramsey

100

Borealis Insurance A/S

Denmark, Copenhagen

100

Borealis France S.A.S

France, Suressnes

100

Poliolefinas Borealis Espana S.A.

Spain, Barcelona

100

Borealis s.r.o.

Czech Rep., Prague

100

Borealis Polska Sp Z.o.o.

Poland, Warschau

100

Borealis Portugal SGPS S.A.

Portugal, Sines

100

Borealis Polymere GmbH

Germany, Burghausen

100

Borealis Polyolefine GmbH

Austria, Schwechat

100

Borealis Feuerwehr GmbH

Austria, Schwechat

100

Borealis Plasticos S.A. de C.V

Mexico, Mexico

100

Borealis Asia Ltd

Hong Kong, Hong Kong

100

Borealis Italia S.p.A.

Italy, Monza

100

Borealis Compounds Inc.

US, Rockport

100

Borealis Agrolinz Melamine GmbH

Austria, Linz

100

Borealis Agrolinz Melamine Deutschland

Germany, Wittenberg

100

Singapore, Singapore

100

LINZER AGRO TRADE GmbH

Austria, Linz

100

LINZER AGRO TRADE Hungary Kft.

Hungary, Budapest

100

LINZER AGRO TRADE Bulgaria EOOD

Bulgaria, Sofia

100

LINZER AGRO TRADE d.o.o. za trgovinu

Croatia, Klisa

100

LINZER AGRO TRADE Czech Republic

Czech Rep., Budweis

100

GmbH Borealis Melamine International Asia Pacific Pte.Ltd.

spol. s.r.o.

70

Company name

Country, City

Percentage of shares owned

LINZER AGRO TRADE ROMANIA S.R.L

Romania, Bucharest

100

LINZER AGRO TRADE d.o.o.

Serbia, Belgrade

100

LINZER AGRO TRADE Slovakia s.r.o.

Slovakia, Chotin

100

Source: Audited consolidated financial statements as of 31 December 2011

7.2

PRODUCTION SITES The Borealis Group has production sites worldwide (the following figures relate to the business year 2011 and are based on information provided by the Issuer): Austria: Has a production site in Schwechat (close to Vienna). The Innovation Centre Headquarters is in Linz. The Schwechat facility produces one million tonnes of polyolefins for the automotive, infrastructure, and advanced packaging industries mainly in Germany, Austria, Switzerland, and Italy. Ethylene and propylene are supplied via a pipeline from OMV. Linz is an innovation centre and is used for research and development of new products and technologies. Linz is also a production site for melamine and plant nutrients. Capacity

Kilotons per annum

PP

435

PE

480

Compound

105

Fertilizer

1200

Malamine

52

Borealis employs a total of 1,661 people in Austria. Belgium: Has three production locations. Beringen has two PP plants. These plants are located directly on a major transportation pipeline for incoming feedstocks. The facility located in Kallo has a propylene dehydrogenation unit and a PP plant. Borealis operates a compounding plant in Antwerp. The main application areas include wire and cable, film, fibre and moulding. Borealis holds a share (33 per cent) in Special Polymers Antwerp, a JV with DuPont for PE production. Capacity

Kilotons per annum

PP

685

PE

40

Propylene

480

Compound

137

A total of 838 persons are employed in Belgium.

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Brazil: Has two compounding facilities in Itatiba and Triunfo. Both sites produce PP compounds. Products manufactured here are supplied to the dashboards, panels, doors, trims, dishwashers, and refrigerator moulders. Capacity of Itatiba: Capacity PP Compounds

Kilotons per annum 25

Capacity of Triunfo: Capacity PP Compounds

Kilotons per annum 35

Borealis employs a total of 133 people in Brazil. Finland: Has six production units, in a fully integrated petrochemical facility. Feedstock for PE and PP is produced by a cracker. Main polymer and compound applications include extrusion coating, for steel pipes, packaging, pipe and some wire and cable. Finland is the only location where Borealis produces phenol. Capacity

Kilotons per annum

Ethylene

390

Propylene

240

Phenol

185

PE

390

PP

220

Compounds

42

A total of 870 persons are employed in Finland. France:. Borealis has recently acquired an ammonia and plant nutrients production facility in Ottmarsheim. Capacity

Kilotons per annum

Ammonia

255

Nitric Acid

330

AN/CAN

360

A total of 180 persons are employed in France. Germany: Has two PP plants and one high-density polyethylene ("HDPE") plant. At the end of 2007, Borealis completed an investment of EUR 200 million in a Borstar® PP plant. The

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expansion increased the site's capacity by 80% to 755,000 tonnes per year. Main applications include infrastructure and advanced packaging. In addition a melamine plant is located in Piesteritz. Capacity

Kilotons per annum

PP

580

HDPE

175

Melamine

87

A total of 305 persons are employed in Germany. Italy: Has a production facility for PP compounds for automotive and appliance markets as well as a customer service centre. Capacity PP Compounds

Kilotons per annum 30

A total of 69 persons are employed in Italy. Sweden: Borealis is the only PE producer in Sweden with a cracker facility using naphtha, propane, ethane and butane as feedstocks. The cracker has capacity of 632,000 tonnes per year of ethylene and 218,000 tonnes per year of propylene. Feedstock is received via the ship. Main polymer applications include pipe and wire & cable. An innovation centre focuses on polymer design, scientific services and research and development. In 2007 Borealis invested EUR 370 million into a new 350,000 tonnes per year low-density polyethylene plant to supply the growing pipe and wire and cable market. Capacity

Kilotons per annum

Ethylene

632

Propylene

218

PE

915

A total of 937 persons are employed in Sweden. United States of America: Has a standalone facility dedicated to PE compound production, specialising in medium and high voltage insulations and semi-conductive cable grades. In 2007, Borealis upgraded capacity of its semi-con facilities to support growing demand for its semi-conductive cable grades. Capacity PE Compounds

Kilotons per annum 65

United Arab Emirates / Asia has the production sites of the Borouge Joint Venture with a capacity of 2 million tonnes per year, with Borouge 1 and 2 already fully operating and Borouge 3 expected to go live end 2013.

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For information on the planned expansion, see "Investments", below.

8.

LEGAL PROCEEDINGS The Issuer has no information on any governmental, legal or arbitration proceedings, nor is the Issuer aware of any such proceedings which are pending or threatening, during a period covering the previous 12 months which may have, or have had in the recent past, significant effects on the Issuer and/or the Borealis Group's financial position or profitability.

9.

INVESTMENTS In January 2012, Borealis completed the acquisition of the French fertilizer producer PECRhin. This acquisition complements Borealis’ existing fertilizer business and is targeted to enable the Borealis to further grow in Central and Eastern Europe. Borealis finances its operations and investments through a variety of funding arrangements. At the end of 2011, the group has committed unutilised credit lines available of EUR 1,108 million, including a 1,000 million syndicated credit facility. In addition, the group has committed financings that include financing arrangements with commercial banks and special institutions (EIB, OeKB, etc), a private placement of notes in the US, an Austrian Bond, A German Private Placement (Schuldschein), specific investment financings, and a trade receivables securitisation programme.

10.

MATERIAL CONTRACTS The Issuer has not entered into any material contracts that are not entered into in the ordinary course of business, which could result in any group member being under an obligation or entitlement that is material to the Issuer's ability to meet its obligation to the Noteholders in respect of the Notes. Some preliminary commitments, which are still subject to formal approval of one or more management bodies have been made which might eventually lead to future investments. These are not expected to materially impact the Issuer’s ability to meet its obligation to the Noteholders in respect of the Notes. The Issuer is not aware of any arrangements, the operation of which may at a subsequent date result in a change in control of the Issuer.

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BUSINESS OVERVIEW 1.

GENERAL Borealis is organized into two business divisions, polyolefins and base chemicals. With more than 40 years of experience in polyolefins and using the Issuer’s Borstar® technology, Borealis provides plastic materials and solutions to the infrastructure, advanced packaging and automotive markets across Europe, the Middle East and Asia. The Issuer’s production facilities, innovation and service centres work with customers in more than 120 countries to provide materials that make an essential contribution to society and sustainable development. As an integrated polyolefins company, Borealis ensures a secure, cost-efficient supply of hydrocarbon feedstocks for our crackers, and olefins for the Issuer’s PE and PP plants. Borealis purchases feedstocks from the oil and gas industries and converts these into ethylene and propylene through its olefin units.

2.

MAIN ACTIVITY

2.1

POLYOLEFINS The polyolefins business segment provides PE and PP to a diverse range of industries. The Issuer focuses on generating value-added solutions for the following strategic areas: Infrastructure Pipe Systems. Borealis is the leading global provider of advanced polyolefin plastics solutions for the pipe industry. The product and service portfolio of Borealis covers water and gas distribution, waste and sewage disposal, chemical and industrial projects, in-house plumbing and heating, as well as oil and gas exploration and transport. Borealis’ leverages its renowned technical & application competence, plants proximate to customers and most critically the utilisation of the Borstar® technology, the Issuer’s proprietary process and catalyst technology that offers simultaneous improvements in conversion economics and in key environmental aspects (such as source reduction and recyclability). Borealis and Borouge started an initiative called "Water for the World" in the year 2007; through this program, Borealis contributes to addressing the global water challenge. Energy and Communication Cables. As a leading provider of polyolefin compounds for the global wire and cable industry, Borealis' solutions are widely used in low, medium and highvoltage energy transmission and distribution cables, in data and communication cables, and in building and automotive wires. Borealis focuses on developing improved cable production technology and innovative installation techniques as a direct response to the needs of the customers across the value chain. Borealis offers a complete range of high performance products which provide lower costs with higher productivity, enhanced performance for longer cable life, consistently clean materials, the most resilient protection for demanding cable applications and consistent expansion for enhanced electrical properties. Mobility

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Borealis supplies a wide range of plastics solutions to the automotive industry that are used for dashboards, door side claddings, front ends, air vent systems, bumpers and under-body shieldings. These solutions are pioneering developments in areas including zero gap applications for bumpers, off-line painted body panels and scratch resistant materials for car interiors and exteriors. The trend of lightweight cars has increased and Borealis contributes by virtue of sourcing lightweight materials for automotive body panels, which have a positive impact on environment and bring advantages in production. The next step will be the development of body panels based on Borstar®. Advanced Packaging The superior properties and flexibility of Borealis polyolefins make them the advanced packaging material of choice for applications as diverse as healthcare, courier bags, food packaging, flexible and rigid transport packaging, bottles, crates, boxes, trays, large containers and pallets. 2.2

BASE CHEMICALS The Base Chemicals Group is comprised of the following Business Units: Feedstocks and Olefins. As an integrated polyolefins company, Borealis aims at ensuring a secure, cost-efficient supply of hydrocarbon feedstocks for its crackers, which convert these into ethylene and propylene through its olefin units for the PE and PP plants. Borealis owns crackers in Finland, Sweden and Abu Dhabi (Borouge) that produce both ethylene and propylene, while propylene is also produced in a propane dehydrogenation plant in Belgium and an olefins conversion unit in Abu Dhabi. Besides purchasing from the spot market, the balance of feedstock and olefins required for Borealis' plants and those of its joint ventures are sourced from its owners or joint venture partners. A range of co-products from the steam cracking process such as pygas and butadiene are also sold to external markets. Borealis has a competitive advantage with its steam crackers, as they have been designed with flexibility to utilise feedstocks other than naphtha, most notably ethane and propane. This means Borealis can take advantage of favourable price differentials to generate a cost advantage, which are often passed on to the end consumer. In addition to the advantage of flexible feed cracking, Borealis has a series of underground storage "caverns" at Borealis' Swedish facility, which allows Borealis to further leverage any feedstock price arbitrage within the market. Melamine and Fertilizer. Borealis is a leading provider of plant nutrients in the Danube Region. Based on the infrastructure in Linz, a production facility fully integrated into a large industrial complex, and the recently acquired ammonia and plant nutrient production facilities in Ottmarsheim Borealis’ competitive advantage is its location on the Danube, providing a cost effective distribution channel up river into Germany as well as France and down river into Eastern Europe, where Borealis enjoys substantial brand recognition and market position through its brand "Linzer Ware". Phenol & Aromatics. Phenol and cumene as well as acetone are produced in Finland and are sold mainly to the adhesive, fibre, epoxy resin and polycarbonate industries in northern Europe. Phenol is used in adhesives, construction materials, carpets, CDs, DVDs, mobile phones and household appliances. Borealis is the leading phenol producer in the Nordic and

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Baltic regions. Acetone is commonly used in solvents for paints, acrylics, fibres and pharmaceuticals. Cumene is a feedstock for other chemical processes.

3.

NEW PRODUCTS AND ACTIVITIES

3.1

INNOVATION Borealis’ strong market position has largely been achieved through its leading-edge Borstar® technology and its continuous investment in research and development. Approximately 30% per cent of Borealis’ research and development budget is dedicated to reaching beyond the customers' current challenges to deliver tomorrow’s solutions. Borealis’ polymer research and product development focuses on high-performance, cost-effective, differentiated polymers. Approximately 10% of Borealis' workforce is allocated to the innovation. The Technology organization is located at three sites at three Innovation Centers in Austria, Finland and Sweden, which serves to reduce the time to market for new products.

3.2

BORSTAR® TECHNOLOGY The Borstar® technology is built on process and catalyst technology development. The Borstar® PE and PP capacity expansion in both Europe and the Middle East are a core aspect of the Borealis and Borouge strategy. The most significant growth plan entails an increase of Borouge production capacity in Abu Dhabi to 4.5 million tonnes of Borstar® polyolefins per year. Slated for completion around 2014, the project will introduce Borstar® PP to the complex. The mission to be a leading supplier of innovative value-creating plastics solutions for PE and PP rests largely on three key competences that Borealis continues to develop and invest in heavily. These principles comprise the Borstar® innovation platform, which consists of:  Multimodal PE and PP polymerisation processes,  Several tools enabling innovative molecular design,  Post reactor polymer modification The latter includes selective cross linking: a process that significantly extends key PE properties to enable its use in some extremely demanding applications that are at the heart of infrastructure in modern society. In parallel to these different steps of product design, intellectual protection for the different levels is also sought as indicated in the following figure.

Catalyst

Process

Polymer

Conversion Application

77

MARKETS AND SECTOR ENVIRONMENT 1.

GENERAL While Europe has historically been Borealis’ core market, the Issuer today acts more global with production facilities, innovation centres and service centres serving customers in more than 120 countries. Polyolefins and associated products represented in 2011 approximately 67 per cent of Borealis' sales while base chemicals and associated products generated approximately 32 per cent of sales (source: Annual Report 2011). Borealis’ most important geographic markets in terms of 2011 based on revenue contribution were Europe (84 per cent of revenues in 2011), the Middle East & Asia (7 per cent of revenues in 2011) and the United States (3 per cent of revenues in 2011). The following chart shows a breakdown of Borealis’ revenues in 2011. 2011A Revenue by Geography: € 7,096 mm Middle East & Asia 7%

Other regions 6%

USA 3% Non EU countries in Europe 10%

2011A Revenue by Segment: € 7,096 mm

Base Chemicals 32%

Nonallocated 1%

EU countries 74%

Polyolefins 67%

Source: Audited consolidated financial statements as of 31 December 2011 – Note 1 – Segment Reporting

Sales into the Middle East, India, China/Asia and Australia are handled through the Borouge sales and markets joint venture, which is based in Singapore.

2.

POLYOLEFINS With an installed capacity of approximately 4,000 kilotons per annum, Borealis is the second largest producer of polyolefins in Europe and a top ten producer globally. The chart below 2 shows Borealis’ polyolefin capacity in kilotons per annum in 2011 :

2

Includes the acquisition of Qattor in Brazil and Sunoco PP in the US by Braskem

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World

0

2

4

6

8

10

Europe

0

LyondellBasell

LyondellBasell

SINOPEC

Borealis

ExxonMobil

Ineos

Dow

SABIC

SABIC

Dow

Braskem

Total

CNPC

Polimeri

Borealis*

ExxonMobil

Total

Repsol

Ineos

TVK

2

4

6

8

10

Source: CMAI

Borealis has exposure to both countercyclical end markets (e.g. utilities, energy, health care and consumer) and non-discretionary (e.g. food packaging) and the more cyclical sectors like automotive and construction.

3.

BASE CHEMICALS

3.1

MELAMINE AND PLANT NUTRIENTS Borealis is the European leader in the Melamine business with 25 per cent market share. It also licenses its global leading high pressure Melamine process technology to the market. Melamine is mainly used in the wood working industry (for laminate flooring, particleboards for furniture, etc.). 75 per cent of the world melamine demand is used in the wood working industry for the production of laminates (laminate floorings, cabinets, kitchencountertops, etc.) and for wood adhesives to produce different sort of boards (MDF boards, plywood, particleboards, etc.). As a region, Europe is the largest melamine market accounting for 39 per cent of the world consumption in 2007 (source: CEH Market Research Report May 2008 - SRI Consulting). Fertilizer business relies significantly on logistics. The location of the production facilities in Linz on the Danube and Ottmarsheim on the Rhine provides a distribution channel up river to Germany and Benelux and down river into Eastern Europe. The issuer has built a strong market position via its own distribution network LINZER AGRO TRADE GmbH.

3.2

PHENOL AND AROMATICS Borealis is the only producer in the Nordic and Baltic regions and, thus, the leading phenol producer in the region (source: IHS). Phenol is a product which is costly to transport and as such tends to be a regional business. Consequently, due to shipping costs, Borealis has a market share in the region well in excess of competitors. Similarly, Borealis usually does not ship its products further south than Rotterdam.

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MANAGEMENT AND SUPERVISORY BOARD The Issuer's management and supervisory bodies comprise the management board and the supervisory board as foreseen by the Austrian Stock Corporation Act (Aktiengesetz).

1.

MANAGEMENT BOARD The management board of Borealis consists of the CEO, the CFO and such other executive directors as appointed by the supervisory board. The appointment and the revocation of the executive directors are effected by way of a resolution of the supervisory board. The Issuer is represented by two members of the management board acting jointly or by one member of the management board together with a holder of statutory signing authority (Prokurist). The management board of the Issuer consists of the following five persons who can be reached at the business address of the Issuer at Wagramerstraße 17-19, 1220 Vienna, Austria. Name

Responsibility

Mark Garrett

Chief executive officer

Daniel James Shook

Chief financial officer

Herbert Willerth

Deputy chief executive; executive vice president, operations

Gerd Löbbert

Executive vice president, polyolefins

Markku Korvenranta

Executive vice president, base chemicals

Appointed until

30 June 2015

31 December 2015

30 June 2014

31 December 2014

31 October 2015

Source: Extract from the Austrian Companies Register dated 12 June 2012 and information provided by the members of the management board.

The table below indicates principal activities performed by the members of the management board outside the Issuer: Name

Mark Garrett

Principal activities outside the Issuer



Member of the board of directors of Nova

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Name

Principal activities outside the Issuer Chemicals, Corp 

Vice chairman of the board of directors of Abu Dhabi Polymers Company Limited



Member of the Tacaamol Project Committee



Managing Director of Aabar Automotives GmbH and Aabar Europe Holdings GmbH



Managing Director of Nova Chemicals Holding GmbH

Gerd Löbbert

None

Daniel James Shook

None

Herbert Willerth



Board member of The Federation of Austrian Industries – Lower Austria



Management Board Member Abu Dhabi Polymers Company Limited



President of GFKT Gesellschaft zur Förderung von Kunststofftechnik



Management Board Member of Borouge Pte Ltd



Management Board Member of Abu Dhabi Polymers Company Ltd

Markku Korvenranta

Source: Information provided by the members of the management board

2.

SUPERVISORY BOARD The members of the supervisory board can be reached at Borealis' business address at Wagramerstraße 17-19, A-1220 Vienna. The supervisory board comprises the following five persons:

Name

Principal activities outside the Issuer

Appointed as of

Khadem Al Qubaisi

Board Member and Managing Director of International Petroleum Investment

21 February 2012

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Name

Principal activities outside the Issuer

Appointed as of

Company Chairman of Aabar Investments PJS Chairman of Aabar Properties Chairman of NOVA Chemicals Corporation Chairman of Compañía Española de Petróleos SA Chairman of the Abu Dhabi National Takaful Co. PSC Chairman of Arabtec Holdings P.J.S.C Chairman of First Energy Bank Vice Chairman of Unicredit SpA. Board Member of Abu Dhabi National Chemicals Company P.J.S.C. (ChemaWEyaat) Board Member of Emirates Investment Authority

David Charles Davies

Deputy CEO and chief financial officer of OMV Aktiengesellschaft

21 February 2012

Member of supervisory board of Wiener Börse AG Deputy Chairman of the Supervisory Board, Petrom S.A., Bucharest Deputy Chairman of the Supervisory Board, Petrol Ofisi A.S., Istanbul

Mohamed Al Mehairi

Vice Chairman Pak-Arab Refinery Ltd.

21 February 2012

Board Member of NOVA Chemicals Corporation Board Member of Aabar Investments PJS

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Name

Principal activities outside the Issuer

Appointed as of

Mohamed Abdulla Al-Azdi CEO, Abu Dhabi National Chemicals Company (ChemaWEyaat)

21 February 2012

Manfred Leitner

21 February 2012

Member of the Supervisory Board, Petrom S.A., Bucharest Member of the Supervisory Board, Petrol Ofisi A.S., Istanbul Chairman of the Supervisory Board, Erdöl Lagergesellschaft m.b.H, Lannach Chairman of the Supervisory Board, OMV Supply & Trading AG, Zug Director of OMV Trading Services ltd, London OMV Shareholder Representative, Bratislava Schwechat Pipeline GmbH, Vienna

Source: Extract from the Austrian Companies Register dated 12 June 2012 and information provided by the Issuer -- According to information provided by the Issuer, the composition of the supervisory board of the Issuer changed as of 21 February 2012. Mr Mohamed Al Khaja has been replaced by Mr Mohamed Abdulla Al-Azdi on 3 August 2010 and Mr Gerhard Roiss by Mr Manfred Leitner on 21 February 2012.

Each member of the supervisory board of the Issuer is appointed until the end of the shareholders' meeting that resolves the discharge from liability for the fourth financial year after the appointment of the respective member of the supervisory board of the Issuer. Audit committee The audit committee of the Issuer is appointed by the supervisory board and consists of three supervisory board members. The Borealis audit committee operates based on an audit committee charter approved by the audit committee, which lines out the meeting practises and responsibilities of the audit committee. The aim of the audit committee is to minimise financial, operational and compliance risks, and enhance the quality of financial reporting. The audit committee monitors: -

The financial reporting process;

-

the effectiveness of the Issuer's internal control, internal audit, and risk management systems;

83

-

the statutory audit of the annual and consolidated accounts; and

-

the independence of the statutory auditor or audit firm and the provision of additional services.

Further, the audit committee reviews together with the statutory auditor key matters arising from the statutory audit and any material weaknesses in internal control in relation to the financial reporting process. The audit committee consists of the following persons: Name

Position

Mohamed Abdulla Al-Azdi

Chairman

David Davies

Vice-Chairman

Mohamed Al Mehairi

Member

Source: Minutes of meetings of the supervisory board dated 26 February 2008 and 29 September 2009 and information provided by the Issuer

3.

ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES CONFLICTS OF INTERESTS Save than as disclosed in this Prospectus, there are no potential conflicts of interests between any duties to the Issuer of the members of the administrative, management, and supervisory bodies and their private interests and/or other duties.

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SELECTED FINANCIAL INFORMATION 1.1

KEY FIGURES The financial data provided below has been published in the Issuer's press release on the Q1 figures dated 11 May 2012: Key figures in EUR million (unaudited, rounded)

Q1 2012

Q1 2011

Net Sales

1,882

1,859

Net profit

140

174

(186)

(195)

40%

43%

Reduction / (increase) in net interest-bearing debt Gearing

(1)

Source: Accounting system of the Issuer for first quarter of the business year 2012 (1)

Gearing is calculated as current and non-current loans borrowings minus cash and cash equivalents divided by total equity.

The financial data provided below has been derived from the Issuer's audited consolidated financial statements for the business years ended 31 December 2011 and 31 December 2010, which were prepared in accordance with IFRS. Key figures in EUR million (rounded)

Financial year 2011

Financial year 2010

7,096

6,269

507

333

Net Sales Net profit of the year EBITDA

(1)

569

610

Gearing

(2)

35%

37%

6,128

5,630

Total Assets (1) (2)

1.2

EBITDA is calculated as operating profit plus depreciation and amortisation. Gearing is calculated as current and non-current loans borrowings minus cash and cash equivalents divided by total equity.

RECENT EVENTS Since 31 December 2011, there are no recent events particular to the Issuer which are relevant to a material extent to the evaluation of the Issuer’s solvency.

1.3

PROFIT FORECASTS OR ESTIMATES The Issuer does not provide any profit forecasts or estimates in connection with the Offering.

85

1.4

SIGNIFICANT CHANGES, MATERIAL ADVERSE CHANGES, TRENDS There has been no significant change in the financial or trading position of the Issuer or the Borealis Group since 31 December 2011, no material adverse changes in the Issuer's prospects since 31 December 2011 and the Issuer is not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the Issuer's prospects for at least the current financial year.

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TAXATION 1.

AUSTRIA This section on taxation contains a brief summary of the Issuer's understanding with regard to certain important principles which are of significance in connection with the purchase, holding or sale of the Notes in the Republic of Austria. This summary does not purport to exhaustively describe all possible tax aspects and does not deal with specific situations which may be of relevance for certain potential investors. The following comments are rather of a general nature and included herein solely for information purposes. These comments are not intended to be, nor should they be construed to be, legal or tax advice. This summary furthermore, only refers to investors which are subject to unlimited (corporate) income tax liability in Austria. It is based on the currently valid tax legislation, case law and regulations of the tax authorities, as well as their respective interpretation, all of which may be amended from time to time. Such amendments may possibly also be effected with retroactive effect and may negatively impact on the tax consequences described. It is recommended that potential purchasers of the Notes consult with their legal and tax adviser as to the tax consequences of the purchase, holding or sale of the Notes. Tax risks resulting from the Notes shall in any case be borne by the purchaser. For the purposes of the following it is assumed that the Notes are legally and factually offered to an indefinite number of persons. General remarks Individuals having a permanent domicile (Wohnsitz) and/or their habitual abode (gewöhnlicher Aufenthalt) in Austria are subject to income tax (Einkommensteuer) in Austria on their worldwide income (unlimited income tax liability; unbeschränkte Einkommensteuerpflicht). Individuals having neither a permanent domicile nor their habitual abode in Austria are subject to income tax only on income from certain Austrian sources (limited income tax liability; beschränkte Einkommensteuerpflicht). Corporations having their place of effective management (Ort der Geschäftsleitung) and/or their legal seat (Sitz) in Austria are subject to corporate income tax (Körperschaftsteuer) in Austria on their worldwide income (unlimited corporate income tax liability; unbeschränkte Körperschaftsteuerpflicht). Corporations having neither their place of effective management nor their legal seat in Austria are subject to corporate income tax only on income from certain Austrian sources (limited corporate income tax liability; beschränkte Körperschaftsteuerpflicht). Both in case of unlimited and limited (corporate) income tax liability, Austria's right to tax may be restricted by double taxation treaties. Income taxation of the Notes With the passing of the Budget Accompanying Act of 2011 (Budgetbegleitgesetz 2011), the Austrian legislator intended to comprehensively realign the taxation of financial instruments, in particular with regard to capital gains. Pursuant to the newly worded sec. 27(1) of the Austrian Income Tax Act, the term investment income (Einkünfte aus Kapitalvermögen) comprises: 

income from the letting of capital (Einkünfte aus der Überlassung von Kapital) pursuant to sec. 27(2) of the Austrian Income Tax Act, including dividends and interest;



income from realised increases in value (Einkünfte aus realisierten Wertsteigerungen) pursuant to sec. 27(3) of the Austrian Income Tax Act, including gains from the sale, redemption and other realisation of assets that lead to income from the letting of capital, zero coupon bonds and also broken-period interest; and

87



income from derivatives (Einkünfte aus Derivaten) pursuant to sec. 27(4) of the Austrian Income Tax Act, including cash settlements, option premiums received and income from the sale or other realisation of forward contracts like options, futures and swaps and other derivatives such as index certificates.

Also the withdrawal of the Notes from a bank deposit (Depotentnahme) and circumstances leading to Austria's loss of taxation right regarding the Notes vis-à-vis other countries, e.g., a relocation from Austria (Wegzug), are in general deemed to constitute a sale (cf. sec. 27(6)(1) of the Austrian Income Tax Act). Individuals subject to unlimited income tax liability in Austria holding the Notes as a nonbusiness asset are subject to income tax on all resulting investment income pursuant to sec. 27(1) of the Austrian Income Tax Act. In case of investment income with an Austrian nexus (inländische Einkünfte aus Kapitalvermögen), basically meaning income that is paid by an Austrian paying agent (auszahlende Stelle) or an Austrian custodian agent (depotführende Stelle), the income is subject to a withholding tax of 25 per cent; no additional income tax is levied over and above the amount of tax withheld (final taxation pursuant to sec. 97(1) of the Austrian Income Tax Act). In case of investment income without an Austrian nexus, the income must be included in the income tax return and is subject to a flat income tax rate of 25 per cent In both cases, upon application, the option exists to tax all income subject to the tax rate of 25 per cent at the lower progressive income tax rate (option to regular taxation pursuant to sec. 27a(5) of the Austrian Income Tax Act). Pursuant to sec. 27(8) of the Austrian Income Tax Act, losses from investment income may not be offset with other types of income. Negative income subject to the flat tax rate of 25 per cent may not be offset with income subject to the progressive income tax rate (this equally applies in case of an exercise of the option to regular taxation). Further, an offsetting of losses from realised increases in value and from derivatives with (i) interest and other claims against credit institutions and (ii) income from Austrian or foreign private law foundations and comparable legal estates (privatrechtliche Stiftungen und damit vergleichbare Vermögensmassen) is not permissible. Individuals subject to unlimited income tax liability in Austria holding the Notes as a business asset are subject to income tax on all resulting investment income pursuant to sec. 27(1) of the Austrian Income Tax Act. In case of investment income with an Austrian nexus (as described above) the income is subject to a withholding tax of 25 per cent While this withholding tax has the effect of final taxation for income from the letting of capital, income from realised increases in value and income from derivatives must on the other hand be included in the income tax return (nevertheless flat income tax rate of 25 per cent). In case of investment income without an Austrian nexus, the income must always be included in the income tax return (flat income tax rate of 25 per cent). In both cases upon application the option exists to tax all income subject to the tax rate of 25 per cent at the lower progressive income tax rate (option to regular taxation pursuant to sec. 27a(5) of the Austrian Income Tax Act). Pursuant to sec. 6(2)(c) of the Austrian Income Tax Act, depreciations to the lower fair market value and losses from the sale, redemption and other realisation of financial assets and derivatives in the sense of sec. 27(3) and (4) of the Austrian Income Tax Act, which are subject to the special tax rate of 25 per cent, are primarily to be offset against income from realised increases in value of such financial assets and derivatives and with appreciations in value of such assets; only half of the remaining negative difference may be offset against other types of income (and carried forward). Corporations subject to unlimited corporate income tax liability in Austria are subject to corporate income tax on interest from the Notes at a rate of 25 per cent In case of investment income with an Austrian nexus (as described above) the income is subject to a withholding tax of 25 per cent, which can be credited against the corporate income tax liability. However, under the conditions set forth in sec. 94(5) of the Austrian Income Tax Act no withholding tax is levied in the first place. Income from the sale of the Notes is subject to corporate income tax of 25 per cent Losses from the sale of the Notes can be offset against other income (and carried forward).

88

Private foundations pursuant to the Austrian Private Foundations Act fulfilling the prerequisites contained in sec. 13(3) and (6) of the Austrian Corporate Income Tax Act and holding the Notes as a non-business asset are subject to interim taxation at a rate of 25 per cent on interest income, income from realised increases in value and income from derivatives. In case of investment income with an Austrian nexus (as described above) the income is subject to a withholding tax of 25 per cent, which can be credited against the tax falling due. Under the conditions set forth in sec. 94(12) of the Austrian Income Tax Act no withholding tax is levied. As of 1 January 2013, pursuant to sec. 93(6) of the Austrian Income Tax Act, the Austrian custodian agent will be obliged to automatically offset negative investment income against positive investment income, taking into account all of a taxpayer's bank deposits with the custodian agent (for the period from 1 April 2012 to 31 December 2012 grandfathering provisions exist). If negative and at the same time or later positive income is earned, then the negative income is to be offset against the positive income. If positive and later negative income is earned, then the withholding tax on the positive income is to be refunded, with such refund being limited with 25 per cent of the negative income. In certain cases, the offsetting is not permissible. The custodian agent has to issue a written confirmation on the offsetting of losses for each bank deposit. EU withholding tax Sec. 1 of the Austrian EU Withholding Tax Act (EU-Quellensteuergesetz) – which transforms into national law the provisions of Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments – provides that interest payments paid or credited by an Austrian paying agent to a beneficial owner who is an individual resident in another Member State (or in certain dependent or associated territories) are subject to a withholding tax of 35 per cent if no exception from such withholding applies. Sec. 10 of the Austrian EU Withholding Tax Act provides for an exemption from withholding tax where the beneficial owner presents to the paying agent a certificate drawn up in his/her name by the competent authority of his/her Member State of residence for tax purposes, indicating the name, address and tax or other identification number or, failing such, the date and place of birth of the beneficial owner, the name and address of the paying agent, and the account number of the beneficial owner or, where there is none, the identification of the security; such certificate shall be valid for a period not exceeding three years. Austrian inheritance and gift tax Austria does not levy an inheritance and gift tax anymore. However, it should be noted that certain gratuitous transfers of assets to (Austrian or foreign) private law foundations and comparable legal estates (privatrechtliche Stiftungen und damit vergleichbare Vermögensmassen) are subject to foundation tax (Stiftungseingangssteuer) pursuant to the Austrian Foundation Tax Act (Stiftungseingangssteuergesetz). Such tax is triggered if the transferor and/or the transferee at the time of transfer have a domicile, their habitual abode, their legal seat or their place of effective management in Austria. Certain exemptions apply in case of a transfer mortis causa, in particular for bank deposits, publicly placed bonds and portfolio shares (i.e., less than 1 per cent). The tax basis is the fair market value of the assets transferred minus any debts, calculated at the time of transfer. The tax rate is in general 2.5 per cent, with a higher rate of 25 per cent applying in special cases. In addition, a special notification obligation exists for gifts of money, receivables, shares in corporations, participations in partnerships, businesses, movable tangible assets and intangibles. The notification obligation applies if the donor and/or the donee have a domicile, their habitual abode, their legal seat or their place of effective management in Austria. Not all gifts are covered by the notification obligation: In case of gifts to certain related parties, a threshold of EUR 50,000 per year applies; in all other cases, a notification is obligatory if the value of gifts made exceeds an amount of EUR 15,000 during a period of five years. Furthermore, gratuitous transfers to foundations falling under the Austrian Foundation Tax Act

89

described above are also exempt from the notification obligation. Intentional violation of the notification obligation may lead to the levying of fines of up to 10 per cent of the fair market value of the assets transferred. Further, it should be noted that gratuitous transfers of the Notes can trigger income tax on the level of the transferor pursuant to sec. 27(6)(1) of the Austrian Income Tax Act (see above).

2.

LUXEMBOURG The following summary is of a general nature only and is based on the laws presently in force in Luxembourg, though it is not intended to be, nor should it be construed to be, legal or tax advice. The information contained within this section is limited to Luxembourg withholding tax issues and prospective investors in the Notes should therefore consult their own professional advisers as to the effects of state, local or foreign laws, including Luxembourg tax law, to which they may be subject. Please be aware that the residence concept used under the respective headings below applies for Luxembourg income tax assessment purposes only. Any reference in the present section to a withholding tax or a tax of a similar nature refers to Luxembourg tax law and/or concepts only. Withholding Tax (i) Non-resident holders of Notes Under Luxembourg general tax laws currently in force and subject to the laws of 21 June 2005, as amended (the Laws), there is no withholding tax on payments of principal, premium or interest made to non-resident holders of Notes, nor on accrued but unpaid interest in respect of the Notes, nor is any Luxembourg withholding tax payable upon redemption or repurchase of the Notes held by non-resident holders of Notes. Under the Laws implementing the Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments and ratifying the treaties entered into by Luxembourg and certain dependent and associated territories of EU Member States (the Territories), payments of interest or similar income made or ascribed by a paying agent established in Luxembourg to or for the immediate benefit of an individual beneficial owner or a residual entity, as defined by the Laws, which is resident of, or established in, an EU Member State (other than Luxembourg) or one of the Territories will be subject to a withholding tax unless the relevant recipient has adequately instructed the relevant paying agent to provide details of the relevant payments of interest or similar income to the fiscal authorities of his/her/its country of residence or establishment, or, in the case of an individual beneficial owner, has provided a tax certificate issued by the fiscal authorities of his/her country of residence in the required format to the relevant paying agent. Responsibility for the withholding of the tax will be assumed by the Luxembourg paying agent. Payments of interest under the Notes coming within the scope of the Laws will be subject to a withholding tax at a rate of 35%. (ii) Resident holders of Notes Under Luxembourg general tax laws currently in force and subject to the law of 23 December 2005, as amended (the Law), there is no withholding tax on payments of principal, premium or interest made to Luxembourg resident holders of Notes, nor on accrued but unpaid interest in respect of Notes, nor is any Luxembourg withholding tax payable upon redemption or repurchase of Notes held by Luxembourg resident holders of Notes. Under the Law, payments of interest or similar income made or ascribed by a paying agent established in Luxembourg to or for the benefit of an individual beneficial owner who is resident of Luxembourg will be subject to a withholding tax of 10%. Such withholding tax will

90

be in full discharge of income tax if the beneficial owner is an individual acting in the course of the management of his/her private wealth. Responsibility for the withholding of the tax will be assumed by the Luxembourg paying agent. Payment of interest under the Notes coming within the scope of the law will be subject to a withholding tax at a rate of 10%.

91

SUBSCRIPTION AND SALE 1.

SUBSCRIPTION PERIOD The Notes will be offered to private and institutional investors in Austria and Luxembourg, and under reliance on exemptions from the prospectus requirement to institutional investors outside of Austria and Luxembourg (the "Offer"). The Public Offer will start on 25 June 2012 and end on 27 June 2012 (the "Subscription Period"), or such earlier date as the Issuer may determine in agreement with the Joint-Lead Managers. The Joint-Lead Managers and the other Syndicate Banks (together, the "Managers") are entitled to reduce or decline subscriptions and to close the subscription period early.

2.

ISSUE PRICE AND ITS DETERMINATION The issue price (the "Issue Price") is currently not fixed and is expected to be between 98 per cent and 102 per cent of the nominal amount. The Issue Price may be calculated by adding the selling commission for private investors of 1.5 percentage points to the price for institutional investors (the "Re-offer Price") which will be determined on the basis of interest rates, maturity, yield and demand by institutional investors in the course of a book-building procedure on or around 20 and 21 June 2012.The Issue Price will be published prior to the beginning of the Subscription Period (see "PUBLICATION OF INFORMATION WHICH IS RELEVANT FOR THE OFFER" below). The Managers are entitled to give discounts to customers. The book building procedure serves the purpose of recording the demand of institutional investors, like financial institutions, insurance companies and funds, by the Joint-Lead Managers. In the course of the book building procedure, the Joint-Lead Managers will accept within a limited period of time binding orders from institutional investors. The Issuer and the Joint-Lead Managers will decide upon the allocation of the Notes to institutional investors. Subsequently, the Joint-Lead Managers determine in consultation with the Issuer the Issue Price at which the Notes are issued as well as the coupon applicable to the Notes.

3.

CONDITIONS TO WHICH THE OFFER IS SUBJECT The Offer is subject to the condition as set out in the Subscription Agreement that Managers may terminate the Subscription Agreement in case of the occurrence of certain events, e.g. if a change in the national or international, financial, political, legal or fiscal conditions or force majeure occurred which could materially affect the market price of the Notes.

4.

AGGREGATE NOMINAL AMOUNT OF THE OFFER The aggregate nominal amount of the issue of Notes will be determined by the Issuer in agreement with the Joint-Lead Managers within the book-building procedure which is expected to take place on or around 20 and 21 June 2012. The allotment of Notes to institutional investors and the Syndicate Banks will be effected by the Joint-Lead Managers upon consultation with the Issuer. Thereafter, information on the aggregate nominal amount (together with the issue price, coupon, yield, net proceeds and the Syndicate Banks) will be filed with the CSSF and published on the website of the Luxembourg stock exchange and on the website of the Issuer (www.borealisgroup.com).

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5.

SALE TO RETAIL INVESTORS The sale of Notes to retail investors at the Issue Price takes place during the Subscription Period. Interested investors which intend to subscribe for Notes in Austria and/or Luxemburg may apply for subscription upon the start of the subscription period at their respective depository bank in Austria and/or Luxemburg, i.e. the bank in Austria and/or Luxemburg where the interested investor has his securities account. The Issuer, the Managers and certain further banks participating in the distribution of the Notes reserve the right to shorten or refuse subscriptions. In case of a reduction of subscriptions the access amounts paid by applicants will be refunded by the depository banks of the respective investors. When all Notes have been subscribed for, generally no further subscriptions will be accepted. The subscribers will be informed on the number of Notes allotted to them via their security custodians. Noteholders are free to dispose of their Notes in accordance with the rules of the Clearing Systems. There are no pre-emption rights.

6.

MINIMUM AND MAXIMUM SUBSCRIPTION AMOUNT The minimum subscription amount corresponds to the minimum denomination of the Notes which is EUR 1,000. No maximum subscription amount has been set.

7.

FORM, CENTRAL SECURITIES DEPOSITARY The Notes will be represented in whole by a changeable global bearer note (veränderbare Sammelurkunde) pursuant to § 24 lit b of the Austrian Depository Act (Depotgesetz) (as amended) which bears the signatures of authorised representatives of the Issuer. The global Note representing the Notes will be deposited with the Oesterreichische Kontrollbank Aktiengesellschaft, Am Hof 4, 1010 Vienna, Austria, in its function as Central Securities Depository. The Noteholders are entitled to joint ownership interests in the global note representing the Notes in accordance with Austrian law.

8.

PLACEMENT AND UNDERWRITING Pursuant to a subscription agreement (Übernahmevertrag) to be entered into on or about 26 June 2012 (the "Subscription Agreement") between the Issuer and the Managers, the Managers will agree, subject to certain conditions, to subscribe the total aggregate nominal amount of the Notes of up to EUR 200,000,000. The management commission will be 0.35 per cent of the aggregate nominal amount. The Issuer has agreed to reimburse the Managers for certain expenses incurred in connection with the issue of the Notes. The total expenses of the Offer (including the management commission and ancillary expenses, e.g. costs for marketing, legal advice and listing) are estimated to be not more than 0.5% of the aggregate nominal amount of the Notes. The net total proceeds of the Offer will amount to the aggregate nominal amount of the Notes issued, multiplied by the Issue Price (as defined above) total expenses of the Offer.

9.

PUBLICATION OF INFORMATION WHICH IS RELEVANT FOR THE OFFER Certain information (e.g. the Syndicate Banks, the aggregate nominal amount, the Issue Price, coupon, yield and net proceeds) which is expected to be available at 21 June 2012, i.e. after the approval and publication of this Prospectus, will prior to the commencement of the Subscription Period be filed with the CSSF and published on the websites of the Luxembourg

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Stock Exchange (www.bourse.lu) and the Issuer (www.borealisgroup.com) by the Issuer. To the extent legally required certain information will be published in the Luxemburger Wort.

10.

DELIVERY OF NOTES The Notes will be delivered to such investors which have transferred the amount necessary for the subscription of Notes to the depository bank at the issue date. The depository bank will book the respective amount of Notes on the investor's securities account. The issue date is 2 July 2012. The delivery of definitive notes is excluded.

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SELLING RESTRICTIONS 1.

GENERAL In addition to the selling restrictions below, the distribution of this Prospectus and the offer of the Notes in certain jurisdictions may be restricted by law, and therefore, persons into whose possession this Prospectus comes should inform themselves about and observe any such restrictions, including those in the paragraphs that follow. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdictions.

2.

EUROPEAN ECONOMIC AREA In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), each Manager has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the "Relevant Implementation Date") it has not made and will not make an offer of Notes to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Notes which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Notes to the public in that Relevant Member State at any time: (a)

to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

(b)

to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than EUR 43,000,000 and (3) an annual net turnover of more than EUR 50,000,000, as shown in its last annual or consolidated accounts; or

(c)

in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of Notes to the public” in relation to any Notes in any Relevant Member State means 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 the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

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3.

NOTICE TO INVESTORS IN CANADA This Prospectus is not, and under no circumstances is to be construed as, a prospectus, an advertisement or a public offering of the Notes described herein in any province or territory of Canada. No securities commission or similar authority in Canada has reviewed or in any way passed any decision upon this document or the merits of the Notes described herein, and any representation to the contrary is an offence.

4.

NOTICE TO INVESTORS IN JAPAN The Notes have not been and will not be registered under the Securities and Exchange Law of Japan (the "Securities and Exchange Law"). The Issuer has not offered or sold and will not offer or sell any Notes, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan) or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

5.

NOTICE TO INVESTORS IN THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND Each Manager has represented and agreed that: 

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 the Notes other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or as agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the issue of the Notes would otherwise constitute a contravention of Section 19 of the FSMA by the Issuer:



it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 (1) of the FSMA) received by it in connection with the issue or sale of the Notes in circumstances in which Section 21 (1) of the FSMA does not apply to the Issuer; and



it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom.

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6.

NOTICE TO INVESTORS IN THE UNITED STATES OF AMERICA AND ITS TERRITORIES The Notes have not been and will not be registered under the Securities Act and may not be offered, or sold within the United States of America or to, or for the account and benefit of, U. S. persons except in accordance with Regulation S under the Securities Act. Each Manager has represented and agreed that it has offered and sold the Notes, and will offer and sell the Notes (i) as part of its distribution at any time and (ii) otherwise until 40 days after the completion of the distribution of all the Notes only in accordance with Rule 903 of the Regulation S under the Securities Act. Neither the Manager, its affiliates nor any persons acting on its or their behalf have engaged or will engage in any directed selling efforts with respect to the Notes, and it and they have complied and will comply with the offering restrictions requirements of Regulation S under the Securities Act. Each Manager has also agreed that at or prior to confirmation of sale of Notes, it will have sent to each distributor, dealer, or person receiving a selling concession, fee or other remuneration that purchases Notes from it during the restricted period a confirmation or notice to substantially the following effect: "The Notes covered hereby have not been registered under the U. S. Securities Act of 1933, as amended (the Securities Act) and may not be offered or sold within the United States of America or to, or for the account or benefit of, U. S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the completion of the distribution of the Notes as determined and certified by each Manager, except in either case in accordance with Regulation S under the Securities Act. Terms used above have the meaning given to them in Regulation S under the Securities Act." Terms used in the preceding paragraphs have the meaning given to them in Regulation S under the Securities Act.

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GENERAL INFORMATION 1.

LISTING AND ADMISSION TO TRADING The Issuer may apply for admission to listing of the Notes on the Second Regulated Market (Geregelter Freiverkehr) of the Vienna Stock Exchange. Although the Issuer expects to be granted admission to listing for the Notes, the Issuer cannot guarantee that such admission will indeed be granted. The first day of listing for the Notes is expected to be on or about 2 July 2012. Other senior unsecured notes (ISIN: AT0000A0H0V3) of the Issuer are listed in the Second Regulated Market (Geregelter Freiverkehr) of the Vienna Stock Exchange.

2.

STATUTORY AUDITORS The German language consolidated financial statements incorporated in an English translation version by reference hereto have been audited by Ernst&Young Wirtschaftsprüfungsgesellschaft m.b.H., Wagramer Straße 19, 1220 Wien, Austria (Telephone: +43 (1) 211 70-0) ("E&Y"), as indicated in the audit opinion with respect thereto. E&Y has rendered unqualified audit reports on the consolidated financial statements of the Issuer for the years ended 31 December 2010 and 31 December 2011 on 17 February 2011 and 16 February 2012. E&Y is a member of the Austrian Chamber of Chartered Accountants (Kammer der Wirtschaftstreuhänder Österreich, with its address at Schönbrunnerstraße 222228, 1120 Vienna, Austria). No auditors have resigned, been removed or not been reappointed during the period covered by the historical financial information.

3.

AUTHORISATION The Issuer has obtained all necessary consents, approvals and authorisations in Austria in connection with the issue of the Notes. The Notes will be issued in accordance with a resolution of the supervisory board of the Issuer passed on 19 March 2012.

4.

CLEARING AND SETTLEMENT The Notes are intended to be delivered to and deposited with Oesterreichische Kontrollbank Aktiengesellschaft, Am Hof 4, 1010 Vienna, Austria, to be cleared by either Euroclear Bank S.A./N.V., 1. Boulevard du Roi Albert II, 1210 Brussels, Belgium, or Clearstream Banking société anonyme, Luxembourg, 42 Avenue JF Kennedy, 1855 Luxembourg, Luxembourg.

5.

RATINGS Neither the Issuer nor the Notes are rated.

6.

YIELD The yield of the Notes will be published as soon as it has been determined in accordance with article 10 of the Luxembourg Law on Prospectuses dated 10 July 2005. The calculation of the yield is based on actual/actual (pursuant to the calculation method defined by ICMA).

7.

REPRESENTATION OF NOTEHOLDERS The Terms and Conditions of the Notes contain no provisions on the representation of the Noteholders. In certain cases, a joint representative (Kurator) may be appointed to represent

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the Noteholders before the Austrian courts in accordance with the Austrian Curator Act (Kuratorengesetz) (e.g. if rights of the Noteholders are likely to be affected due to a lack of common representation).

8.

DOCUMENTS ON DISPLAY During the validity of this Prospectus, copies of this Prospectus, any supplement thereto, if any, and any document incorporated by reference into this Prospectus, will be published by making them available to the public in printed form, free of charge, at the registered office of the Issuer, Wagramerstraße 17-19, 1220 Vienna, Austria, and in electronic form on the website of the Luxembourg Stock Exchange under "www.bourse.lu". The Issuer's articles of association can be inspected at the registered office of the Issuer, Wagramerstraße 17-19, 1220 Vienna, Austria, during usual business hours.

9.

OTHER This Prospectus includes neither a statement nor a report from a third party as an expert.

10.

INTEREST OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE/OFFER The Managers participate in the issue of Notes in the regular course of their business as credit institutions in order to generate commissions turnover. The Managers and/or their subsidiaries may from time to time in the ordinary course of their business, severally or jointly have further business relationships with the Issuer, e.g. with respect to investment advice or financial transactions, and may keep such business relationships. Furthermore, there may exist finance agreements among the Issuer and one or more of the Managers. The Issuer may in the course of its ordinary funding activities use the net proceeds of the issue of Notes for the partial or entire redemption of such existing financings with the Managers. In the view of the Issuer, there are no further possible conflicts of interest.

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GLOSSARY AND LIST OF ABBREVIATIONS AND DEFINITIONS For ease of reference, the glossary below sets out certain abbreviations and meanings of certain technical terms used in the Prospectus. Readers of the Prospectus should always have regard to the full description of a term contained in the Prospectus. Acetone

Acetone is a colourless, flammable liquid with a melting point of −95.4 °C and boiling point of 56.53 °C. It has a relative density of 0.819 (at 0 °C). It is readily soluble in water, ethanol, ether, etc., and serves as an important solvent but has also other major uses like acrylics.

BAM

Borealis Agrolinz Melamine GmbH

Base Chemicals

Base Chemicals is a business group in Borealis which comprises feedstocks and olefins, phenol and aromatics, melamine and plant nutrients.

Borouge

A joint venture between the Abu Dhabi National Oil Company and the Issuer. It was established in 1998 and employs approximately 1,600 people, has customers in 50 countries and its headquarters are in Abu Dhabi, UAE and Singapore. Borouge is a provider of plastics solutions.

Borstar®

Borealis' proprietary polymerisation technology for the manufacture of LLDPE/HDPE and PP. A central feature is the combination of bulk loop and gas phase reactors.

Butadiene

Butadiene is a colourless gaseous hydrocarbon which can have two forms: 1, 2 butadiene and 1, 3 butadiene. The latter is used in the manufacture of synthetic rubber and latex paints.

CD

Compact disc

CMAI

Chemical Markets Associates, Inc

Cracker

Petrochemical unit for converting naphtha (raw-oil distillate fraction) into lower boiling liquid hydrocarbons as well as polymerisation monomers (ethylene, propylene)

CSSF

Luxembourg Financial Sector Supervisory Commission (Commission de Surveillance du Secteur Financier)

Cumene

A common name for isopropylbenzene, an organic compound that is an aromatic hydrocarbon. It is a combustible colourless liquid that has a boiling point of 152 °C. Nearly all cumene is used to produce phenol and acetone.

DVD

Digital Versatile Disc

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EIB

European Investment Bank

EUR

Euro

HDPE

High density polyethylene. Coming from a low pressure process based on special catalysts (Ti- or Cr-based), HDPE has a linear polymeric chain, combined with a higher density and melting point. To fit special applications, the molar mass distribution can be adjusted in a wide range by means of catalysts or polymerisation technology. New applications are opened for HDPE as well as other low pressure PEs by applying metallocene (single-site) catalysts, which allow the production of very narrow molar mass distributions and the better distribution of comonomers.

IFRS

International Financial Reporting Standards as adopted by the European Union

IPIC

International Petroleum Investment Company of Abu Dhabi

LDPE

Low-density polyethylene. A product from a high-pressure polymerisation process, LDPE is characterised by its highly branched chain structure. As a result of this, density and crystallinity are reduced while the processability in a variety of conversion technologies is greatly facilitated. The addition of special comonomers can further expand the property range of these grades.

Melamine

Melamine is primarily used to produce melamine resin, which when combined with formaldehyde produces a very durable, thermoset plastic. This plastic is often used in kitchen utensils, plates or laminates.

multimodal

Multimodal polymer includes more than one molecular weight fraction.

Naphtha

In a refinery, oil and gas is separated into different products (fractions) by distillation, mainly into transport fuels. Naphtha, the light fraction from oil, is the major petrochemical feedstock for the downstream creation of polymers.

OeKB

Oesterreichische Kontrollbank Aktiengesellschaft

Olefin

Olefin is mono-unsaturated hydrocarbon like ethylene and propylene.

PE

Polyethylene. Polyethylenes (or polythenes) are thermoplastic polymers consisting mainly of ethylene (C2H4), which is divided according to their density, melting point and molecular structure.

Phenol

Phenol is a white crystalline. It is solid at room temperature and typically has a sweet odour. It is a toxic aromatic compound with a chemical formula C6H5OH. It can be stored and transported in liquid form at the

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temperature of about 55 °C. The crystallisation point is 41 °C. Polyolefin

Polyolefin is a type of polymer built up from olefinic monomers.

PP

Polypropylene. Polypropylenes are thermoplastic polymers consisting mainly of propylene (C3H6), come from a low pressure process based on catalysts and have generally a linear polymer chain.

Pygas

Pygas is the common expression for ‘pyrolysis gasoline’. It is a naphtharange product and produced as a by-product in ethylene plants when naphtha is used as feedstock.

R&D

Research and development

Sirius

The Sirius catalyst is a technology producing the catalyst in a liquid phase without any external carrier resulting in pure products but above all unlimited flexibility in catalyst preparation.

Syndicate Banks

Means the banks which will be parties to the Subscription Agreement other than the Joint-Lead Managers and information on which is expected to be available at 21 June 2012, i.e. after the approval and publication of this Prospectus and will prior to the commencement of the Subscription Period be filed with the CSSF and published on the websites of the Luxembourg Stock Exchange (www.bourse.lu) and the Issuer (www.borealisgroup.com) by the Issuer

UAE

United Arab Emirates

U.S.

United States of America

W&C

wire and cable

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ISSUER Borealis AG Wagramerstraße 17-19 1220 Vienna Austria

JOINT-LEAD MANAGERS UniCredit Bank Austria AG

Erste Group Bank AG

Schottengasse 6

Graben 21

A-1010 Vienna

1010 Vienna

Austria

Austria

PAYING AGENT Erste Group Bank AG Graben 21 1010 Vienna Austria

COUNSEL TO THE JOINT-LEAD MANAGERS WOLF THEISS Rechtsanwälte GmbH Schubertring 6 1010 Vienna Austria

AUDITOR Ernst& Young Wirtschaftsprüfungsgesellschaft m.b.H Wagramer Straße 19 1220 Vienna Austria

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