Communication from the Ministry of Finance No 151 / 2012 Coll.

The Ministry of Finance issues government bonds in accordance with the provisions of Section 25 of Act No. 190 / 2004 Coll., on Bonds, as amended, (hereinafter referred to as "the bond law") and determines the emission conditions of the Anti-inflation savings bond of the Czech Republic, 2012-2019, CPI%:

1. Basic characteristics of bonds:

Issuing: Czech Republic - Ministry of Finance

Name: Anti-inflation sovereign bond of the Czech Republic, 2012- 2019, CPI%

Short name: SSD-I CR, CPI%, 19

Issuing serial number: 70.

Nominal value: 1, - CZK (in words: one crown Czech)

Emission rate: 100% of nominal value

Form of the bond: bearer security

Debt form: book-entry security

Currency in which bonds are denominated: Czech crown (CZK)

Start date of issue deadline: 10.5.2012

End date of the emission deadline: 12. 12. 2018

Issuing date: 12.6.2012

Date of due date: 12.6.2019

Interest income: floating rate coupon

Taxation of interest income: according to Czech legislation

ISIN: CZ0001003586

2. The bonds are issued pursuant to the provisions of Section 25 (2) of the bond law on the basis of the special laws on the government bond programme, which allow the issue of government bonds.

3. The bonds belong to the bearer, are issued in a book-entry form and are recorded in a separate register, which is kept under the provisions of § 35 (1) (d) of Act No. 218 / 2000 Coll., on the Budget Rules, as amended, by the Ministry of Finance (hereinafter referred to as the Ministry's Register).

4. Bonds may only be subscribed by a natural person or a civil association of natural persons.

5. The Ministry of Finance, as an issuer, does not intend to apply for the admission of bonds to trading on a European regulated market or on a multilateral trading venue located in a Member State of the European Union. The trading of bonds at those transfer points is excluded.

6. The total nominal value of the bond issue is CZK 10 000 000 000 (in words: CZK 10 billion). In accordance with Section 11 of the bond law, bonds may be issued in less than or greater than the expected nominal value of the bond issue. The possible scope of the volume increase is CZK 100 000 000 (in words: 100 billion Czech crowns).

7. The issue of bonds may be issued in successive instalments (tranches) within the emission period.

8. The bonds will be offered by the issuer for subscription in the Czech Republic in the form of a public tender, with the exception of the bonds referred to in point 12. The activities related to the subscription of bonds are provided by the Ministry of Finance and the persons entrusted with such activities ("distributors'). The list of distributors shall be published on the website of the Ministry of Finance and other means enabling remote access.

9. The subscribers referred to in point 4 of these emission conditions shall submit an application for the subscription of bonds to the relevant tranche via a distributor. One subscriber may subscribe through one application for a bond subscription of at least 1 000 units (in words: one thousand). The subscribers shall, when applying for a bond subscription to the distributor, demonstrate in a credible manner that they belong to the persons referred to in point 4 of these emission conditions. The bond subscription price is the total nominal value of the underwriting bonds multiplied by their issue rate. The subscriber shall be obliged to pay the price of the bond subscription within five working days of the date of completion of the subscription of the relevant tranche. At the moment of payment of the subscription price by the subscriber to the distributor's account, the application for the subscription of bonds becomes valid, binding and cannot be cancelled by the subscriber. From the date of payment of the bond subscription price to the date of issue of the relevant tranche, this amount shall not be remunerated. After the date of completion of the subscription of the relevant bond tranche, applications for subscription of the relevant bond tranche by distributors will no longer be accepted. In the event of the expected nominal value of the issue of bonds as referred to in point 6 of these terms of issue being reached or exceeded, the Ministry of Finance may decide to reduce the number of units of subscribed bonds according to applications for subscription of bonds submitted until the date on which the subscription of the relevant tranche of bonds ends. The unsatisfied or partially satisfied subscribers shall be reimbursed the price paid by them for the subscription of bonds which have not been subscribed, without undue delay, by a cash transfer to the payment account from which the funds were placed in the distributor's account or in the payment account indicated in the application for the subscription of bonds in the event of payment of the price of the subscription of bonds in cash. This amount shall not be remunerated from the date of payment of the underwriting price to the date of repayment of the underwritten price.

10. One subscriber may submit, through the distributors, a claim for bond subscription for each tranche in accordance with points 11 and 13 of these terms and conditions in a total number of units of not more than 5 000 000 (in words: five million) for each tranche.

11. The subscription of the first tranche of bonds shall be terminated on 31 May 2012 or on a date to be determined by the issuer, whichever date is earlier.

12. The issue of further tranches of bonds shall take the form of a reinvestment of the interest income of bonds issued in previous tranches under point 15 of these emission conditions, with the exception of the last interest income, at the date of the reinvestment of interest income.

13. The issuer may decide to subscribe to any further tranches of bonds in addition to the tranches referred to in points 11 and 12 of these emission conditions and to determine the date of commencement and the date of termination of the bond subscription of the relevant additional tranche. Notice of further tranches, if any, shall be published on the Ministry of Finance's website and other means of remote access.

14. The transferability of bonds in the Ministry's register shall begin with the date on which the bonds are credited to the accounts of the first acquirer. An application for the transfer of bonds shall be submitted via a distributor. Bonds are transferred without cash settlement. Bonds may only be transferred to the persons referred to in point 4 of these emission conditions. The person to whom the bonds are transferred shall, when submitting the request for the transfer of the bonds to the distributor, demonstrate in a credible manner that they belong to the persons referred to in point 4 of these emission conditions. The last day of bond transfers in the Ministry's register is 10 May 2019.

15. Bonds shall be remunerated at a floating interest rate. The interest income (coupon) for six months (p., per semestre) for the yield period ending on 12 June shall be determined as a percentage change in the consumer price index (cost of living) for the month of April of the year concerned against the consumer price index (cost of living) for the month of October of the previous year, to the extent of six decimal places; The interest income thus determined shall be rounded to five decimal places. The interest rate yield (coupon) for six months (p., per semestre) for the yield period ending on 12.12 December shall be fixed as a percentage change in the consumer price index (cost of living) for the month of October of the year concerned against the consumer price index (cost of living) for the month of April of the same year, to the extent of six decimal places; The interest income thus determined shall be rounded to five decimal places. The minimum interest income for each yield period shall be 0%. Interest income for the relevant yield period and its calculation shall be published on the website of the Ministry of Finance no later than 20.5 and on the date of 20.11 of the relevant year. Interest income shall be reinvested, on the date of 12.6. and on the date of 12.12, starting on 12.12.2012, except for the last interest income paid to the bond holder with the nominal value at the maturity date of the bonds, unless the bond holder applies for the reinvestment of the last interest income and the nominal value of the bonds according to point 24 of these emission conditions. If the bond holder applies for early repayment under point 21 of these terms of issue, the amount of the interest income in question for the yield period which ends closely before or equal to the relevant early repayment date shall not be reinvested but paid to the bond owner under point 21 of these terms of issue. The reinvestment of interest income shall mean that at the date of reinvestment of the interest income, bonds of the same issue at the total nominal value corresponding to the amount of interest income on all the bearer's bonds of the same issue for the relevant yield period are credited to the property account of the holder of the bond. If the date of reinvestment of interest income is not a working day, the relevant bonds shall be credited to the owner's property account on the first following working day. For the purposes of reinvestment, the total amount of interest income on all the owner's bonds for the relevant period shall be rounded up to the full crown. The reinvestment of interest income increases the number of bearer bonds and the volume of the issue. The total amount of the last interest income on all the owner's bonds paid to the owner if the bond owner does not submit an application for reinvestment of the last interest income pursuant to point 24 of these emission conditions shall be rounded to the nearest cent.

16. The yield period shall be set at six months, from 12 June to 12 December of the year in question and from 12 December of the year in question to 12 June of the following year. The first period of return for the reinvestment of interest income is from 12.6.2012 to 12.12.2012. The second period of return for the reinvestment of interest income is from 12.12.2012 to 12.6.2013.

17. The consumer price index (cost of living) is published monthly by the Czech Statistical Office on its website according to the publication calendar. If the consumer price index (cost of living) for the month of April and October of the relevant year is not published by the Czech Statistical Office at all, or if it is published in the relevant year after 20.5 or 20.11, the last known consumer price index (cost of living) published by the Czech Statistical Office and the relevant consumer price index (cost of living) of the month preceding that month shall be used for determining the interest income for the relevant yield period according to point 15 of these emission conditions.

18. The interest income referred to in point 15 of these emission conditions shall always be received by the person who owns the bonds at 12.11, starting in 2012 and on 12.5, starting in 2013. Interest income in the form of reinvestment for the first period of return from the date of issue until 12 December 2012 shall be received by the person who holds the bonds on 12 November 2012.

19. The separation of the interest income right of the bond from the bond is excluded.

20. The Ministry of Finance as an issuer shall not be entitled to early repayment of bonds issued before the due date, unless it applies for early repayment by the holder of the bonds under point 21 of these emission conditions. The Ministry of Finance is entitled to acquire bonds into its assets within the meaning of Article 15 (4) of the bond law.

21. A bond holder shall have the right to apply to the Ministry of Finance as an issuer through a distributor for early repayment of all or part of the bonds it owns according to the following timetable:

The nominal value of the bonds and the relevant interest income for the period from the date of commencement to the date of expiry of the relevant yield period shall be paid to the person who holds the bonds on the first working day following the relevant date of the last possible application for early repayment. An application for early repayment shall be submitted by the bond holder through a distributor. As from the time of the application for early repayment, bonds in the number of units in which the application for early repayment was submitted cannot be transferred to other beneficiaries. At one early repayment date, one bond-holder may apply for early repayment of at least 1 000 units (in words: 1 000) on one early repayment application. At one early repayment date, one bond owner may apply for the early repayment of 100% of the bonds held by him to 500 000 units (in words: five hundred thousand), including a maximum of 50% of the bonds held by him to over 500 000 units (in words: five hundred thousand). Bonds by early repayment shall cease at the same time as the owner's right to interest income. The amount corresponding to the nominal value of the owner's bonds and the respective interest income shall be paid to the owner on early repayment by an uncash transfer to a payment account held in domestic currency in the home country, which the holder of the bond is obliged to disclose when the bond is subscribed, transferred or transferred. Any change to the payment account shall be notified by the bond holder through the distributor. The total amount of the relevant interest income on the number of bonds that the bond holder has applied for early repayment paid to the owner for the period from the date of commencement to the date of expiry of the relevant yield period shall be rounded to the nearest cent.

22. The issuer declares that, at the maturity date, each bondholder is owed the nominal value of the bonds it owns. The bonds shall be repaid at the nominal value as of 12.6.2019, unless the bond owner applies for the reinvestment of the last interest income and the nominal value of those bonds in accordance with point 24 of these emission conditions. This date concludes the interest on bonds. The nominal value of all the owner's bonds, together with the last interest income, will be paid to the person who owns the bonds on 12 May 2019. If the date of repayment of the nominal value of the bonds and the payment of the last interest income per day which is not a working day, the payment shall be made on the first following working day without entitlement to interest income for such deferral.

23. The issuer undertakes to repay the nominal value of the bonds together with the last interest income on the holders of the bonds under these emission conditions. The paying place is the Czech National Bank. The nominal value of the bonds, together with the last interest income, shall be paid by means of an uncash transfer to a payment account held in domestic currency by the holder of the bonds, which shall not be required to submit an application for reinvestment of the last interest income and the nominal value of those bonds in accordance with point 24 of these emission conditions. Any change to the payment account shall be notified by the bond holder through the distributor.

24. The bond owner is entitled to request the Ministry of Finance as an issuer through the distributor to reinvest the last interest income and the nominal value of all or part of the bonds it owns of this issue. In such a case, their last interest income and nominal value or part thereof shall not be paid to the bond-holder by cash transfer to the payment account in accordance with point 23 of these emission conditions, but shall be reinvested at the desired amount in bonds previously determined by the issuer. The notification of the date from which the request for reinvestment of the last interest income and the nominal value of the bonds can be submitted and the bonds in which the last interest income and the nominal value of the bonds can be reinvested shall be published in good time on the website of the Ministry of Finance and other means enabling remote access. The reinvestment of the last interest income and the nominal value of all or part of the bonds held by it shall be requested by the bond holder by means of a request for reinvestment of the last interest income and the nominal value of the bonds via the distributor. The total amount of the interest income on the owner's bonds in the number of units in which the application for reinvestment of the last interest income and the nominal value of the bonds has been submitted shall be rounded upwards for the purpose of reinvestment of the last interest income and the nominal value of the bonds for the whole crown. The last day for the submission of an application for reinvestment of the last interest income and the nominal value of the bonds is 9.5.2019.

25. The valid assessment of the financial capacity (rating) of the long-term Crown liabilities at the date of determination of these emission conditions by Standard & Poor's is at AA, Moody's at A1 and Fitch Rating at AA-.

26. Bonds are direct, unconditional and unsubordinated liabilities of the Czech Republic, which are at the same level with all other existing and future direct, unconditional and unsubordinated liabilities of the Czech Republic.

27. All rights attached to bonds and coupons issued to them under the provisions of Section 42 of the bond law shall be limited by a period of 10 years from the date on which they could be applied for the first time.

28. These emission conditions are announced in the Collection of Laws. The notice to the public concerning these bonds shall be published on the website of the Ministry of Finance and other means of remote access.

29. The operating rules for the separate registration of government bonds maintained by the Ministry of Finance are binding on all bondholders and are published on the Ministry of Finance's website.

30. The Ministry of Finance reserves the right to conduct all acts relating to the management of the Ministry's records, the subscription of bonds, the early repayment of bonds, the reinvestment of the last interest income and the nominal value of the bonds, the entries in the Ministry's records, changes in data and other related activities as defined by the Operational Code of the State Bond Separate Record maintained by the Ministry of Finance.

31. These emission conditions may be translated into foreign languages. If there is a conflict between different language versions of the emission conditions, the Czech version decides.