Swiss Guarantees And Securities

Generally, interest paid on loans are not subject to Swiss Withholding Tax ('WHT'). Interest on bonds and bank interest, however, are subject to 35% Swiss WHT.

A Swiss borrower / issuer

• Generally, interest paid on loans is not subject to 35% WHT. Nevertheless interest paid on bonds, 'customer balances' or bank interest are subject to 35% Swiss WHT.
• Due to the practice of the Swiss Federal Tax Authority ('SFTA'), a loan to a borrowing Swiss entity qualifies as bond (under the so-called '10/20 non-bank rules'), if:

1. The total indebtedness under a credit facility amounts to at least CHF 500'000 and the aggregate number of non-bank lenders (including sub-participations) exceeds 10 under a facility agreement with identical terms ('Anleihensobligation'), or