Exhibit 2(b).2  INFORMATION
MEMORANDUM  TRANSCO
HOLDINGS plc (incorporated with limited
liability in England and Wales on 27 November 1998)  TRANSCO
plc (incorporated with limited
liability in England and Wales on 1 April 1986)  Euro 7,000,000,000  Euro Medium Term Note
Programme  Under
the Euro Medium Term Note Programme (the Programme) described in this
information memorandum (the Information Memorandum), Transco Holdings plc (Transco
Holdings) and Transco plc (Transco) (each, an Issuer and together, the Issuers)
subject to compliance with all relevant laws, regulations and directives, may
from time to time issue debt instruments (the Instruments) denominated in any
currency agreed between the relevant Issuer, the Trustee and the relevant Dealer
(as defined below). The aggregate nominal amount of Instruments outstanding
will not at any time exceed euro 7,000,000,000 (or the equivalent in other
currencies). The Instruments will only be issued in bearer form.  Applications
have been made to admit Instruments issued under the Programme during the
period of twelve months after the date hereof to listing on the Official List
of the Financial Services Authority (in its capacity as competent authority for
the purposes of Part VI of the Financial Services and Markets Act 2000 (the FSMA)
(the UK Listing Authority)) and to trading on the London Stock Exchange plc
(the London Stock Exchange). The Programme also permits Instruments to be
issued on an unlisted basis or to be admitted to listing, trading and/or
quotation by such other or further listing authorities, stock exchanges and/ or
quotation systems as may be agreed with the relevant Issuer. The relevant
Pricing Supplement (as defined on page 7) in respect of the issue of any
Instruments will specify whether or not such Instruments will be listed on the
Official List and admitted to trading on the London Stock Exchanges market for
listed securities (or any other stock exchange).  Each
Series (as defined on page 7) of Instruments will be represented on issue by a
temporary global instrument in bearer form (each a temporary Global Instrument)
or a permanent global instrument (each a permanent Global Instrument). Global
Instruments (being together, temporary Global Instruments and permanent Global
Instruments) may be deposited on the issue date with a common depositary on
behalf of Euroclear Bank S.A./N.V. as operator of the Euroclear System (Euroclear)
and Clearstream Banking, socie¤te¤ anonyme (Clearstream, Luxembourg). The
provisions governing the exchange of interests in Global Instruments for other
Global Instruments and definitive Instruments are described in Summary of
Provisions Relating to the Instruments while in Global Form.  This
Information Memorandum replaces, and is produced in substitution for, the
Information Memorandum dated 23 July 2003.  Arranger for the Programme HSBC  The Dealers  BARCLAYS CAPITAL
  
  CREDIT SUISSE FIRST BOSTONDEUTSCHE BANK
  
  HSBCJPMORGAN
  
  MIZUHO INTERNATIONAL PLC
  THE ROYAL BANK OF SCOTLAND  The date of this Information Memorandum is 23 July 2004


This
Information Memorandum comprises listing particulars issued in compliance with
the listing rules (the Listing Rules) made under Section 74 of the FSMA, for
the purpose of giving information with regard to (i) Transco Holdings and each
of its subsidiary undertakings (together, the Transco Holdings Group) and the
issue by Transco Holdings of Instruments during the period of 12 months after
the date of this Information Memorandum (the Transco Holdings Listing
Particulars) and (ii) (with the exception of the information relating to
Transco Holdings and the Transco Holdings Group contained in the sections
entitled Transco Holdings plc on pages 32 to 34, Capitalisation and
Indebtedness of the Transco Holdings Group on page 35 and General Information
on pages 52 to 53) Transco and each of its subsidiary undertakings (together,
the Transco Group) and the issue of Instruments by Transco during the period
of 12 months after the date of this Information Memorandum (the Transco
Listing Particulars). Accordingly, Transco Holdings accepts responsibility for
the information contained in the Transco Holdings Listing Particulars and
Transco accepts responsibility for the information contained in the Transco Listing
Particulars.  To
the best of the knowledge and belief of each of the Issuers (each of which has
taken all reasonable care to ensure that such is the case), the information
contained in its listing particulars is in accordance with the facts and does
not omit anything likely to affect the import of such information. Copies of
this document have been delivered for registration to the Registrar of
Companies in England and Wales in accordance with Section 83 of FSMA.  This
Information Memorandum should be read and construed together with any
amendments or supplements hereto and with any other documents incorporated by
reference herein and, in relation to any Tranche (as defined herein) of
Instruments, should be read and construed together with the relevant Pricing
Supplement (as defined herein).  No
person has been authorised to give any information or to make any
representation other than those contained in this Information Memorandum in
connection with the issue or sale of the Instruments and, if given or made,
such information or representation must not be relied upon as having been
authorised by either of the Issuers or any of the Dealers or the Arranger (as
defined in Summary of the Programme).  Neither
the delivery of this Information Memorandum or any Pricing Supplement nor the
offering, sale or delivery of any Instrument shall, under any circumstances,
create any implication that the information contained in this Information
Memorandum is true subsequent to the date hereof, that there has been no change
(or any event reasonably likely to involve a change) in the affairs of either
of the Issuers since the date of this Information Memorandum or the date upon
which this Information Memorandum has been most recently amended or
supplemented or that there has been no adverse change (or any event reasonably
likely to involve any adverse change) in the financial position of either of
the Issuers since the date of this Information Memorandum or the date upon
which this Information Memorandum has been most recently amended or
supplemented or that any other information supplied in connection with the
Programme is correct as of any time subsequent to the date on which it is
supplied or, if different, the date indicated in the document containing the
same. Investors should review, inter alia, the most recently published
consolidated audited Annual Reports and Accounts of the relevant Issuer when
deciding whether or not to purchase any of the Instruments. Such documents do
not form part of the listing particulars.  The
distribution of this Information Memorandum and the offering, distribution or
sale of the Instruments in certain jurisdictions may be restricted by law.
Persons into whose possession this Information Memorandum or any Pricing
Supplement comes are required by the Issuers, the Dealers and the Arranger to
inform themselves about and to observe any such restriction. The Instruments
have not been and will not be registered under the United States Securities Act
of 1933, as amended and will be in bearer form and subject to U.S. tax law
requirements. Subject to certain exceptions, Instruments may not be offered,
sold or delivered within the United States or to U.S. persons. For a
description of certain restrictions on offers and sales of Instruments and on distribution
of this Information Memorandum or any Pricing Supplement, see Plan of
Distribution.  Neither
this Information Memorandum nor any Pricing Supplement constitutes an offer of,
or an invitation by or on behalf of either of the Issuers or the Dealers to
subscribe for, or purchase, any Instruments.  The Dealers and the Arranger have not independently verified the
information contained in this Information Memorandum. None of the Dealers or
the Arranger makes any representation, express or implied, or accepts any
responsibility, with respect to the accuracy or completeness of any of the
information in this Information Memorandum. Neither this Information Memorandum
nor any other financial statements are intended to provide the basis of any
credit or other evaluation and should not be considered as a recommendation by
either of the Issuers, the Arranger or the Dealers that any recipient of this
Information Memorandum or any other financial statements should purchase the
Instruments. Each potential purchaser of


Instruments
should determine for itself the relevance of the information contained in this
Information Memorandum and its purchase of Instruments should be based upon
such investigation as it deems necessary. None of the Dealers or the Arranger
undertakes to review the financial condition or affairs of either of the
Issuers during the life of the arrangements contemplated by this Information
Memorandum or to advise any investor or potential investor in the Instruments
of any information coming to the attention of any of the Dealers or the
Arranger.  In
this Information Memorandum, unless otherwise specified or the context
otherwise requires, references to euro are to the currency of those member
states of the European Union which are participating in European Economic and
Monetary Union pursuant to the Treaty establishing the European Community, as
amended, to Japanese yen are to the lawful currency of Japan, to £ and Sterling
are to the lawful currency of the United Kingdom, to U.S.$ and U.S. dollars
are to the lawful currency of the United States of America, to C$, Cdn $
and Canadian dollars are to the lawful currency of Canada, to Aus $ and Australian
dollars are to the lawful currency of Australia, to New Zealand dollars are
to the lawful currency of New Zealand, to Swedish krona are to the lawful
currency of Sweden, to Danish krone are to the lawful currency of Denmark, to
Hong Kong dollars are to the lawful currency of Hong Kong and to Sw Fr and Swiss
francs are to the lawful currency of Switzerland.  In connection with the issue of any Tranche of Instruments under the
Programme, the Dealer (if any) which is specified in the relevant Pricing
Supplement as the Stabilising Manager (or any person acting for the Stabilising
Manager) may over-allot or effect transactions with a view to supporting the
market price of the Instruments at a level higher than that which might
otherwise prevail for a limited period. However, there may be no obligation on
the Stabilising Manager (or any agent of the Stabilising Manager) to do this.
Such stabilising, if commenced, may be discontinued at any time, and must be
brought to an end after a limited period. Such stabilising shall be in
compliance with all applicable laws, regulations and rules.


CONTENTS  Documents
  Incorporated by ReferenceSupplementary Listing
  ParticularsSummary of the ProgrammeTerms and
  Conditions of the InstrumentsSummary
  of Provisions relating to the Instruments while in Global FormUse of ProceedsTransco Holdings plcCapitalisation and Indebtedness of the
  Transco Holdings GroupTransco
  plcCapitalisation
  and Indebtedness of the Transco GroupUnited
  Kingdom TaxationPlan of DistributionForm of Pricing SupplementGeneral Information


DOCUMENTS
INCORPORATED BY REFERENCE  This
Information Memorandum should be read and construed in conjunction with each
relevant Pricing Supplement, the most recently published consolidated audited
Annual Reports and Accounts of the relevant Issuer and any consolidated interim
accounts (whether audited or unaudited) of each of the Issuers published
subsequently to such annual accounts which shall be deemed to be incorporated
in, and to form part of, this Information Memorandum and which shall be deemed
to modify or supersede the contents of this Information Memorandum to the
extent that a statement contained in any such document is inconsistent with
such contents; provided, however, that no such document incorporated by
reference or modifying or superseding statement shall form part of the listing
particulars as contained in this Information Memorandum issued in compliance
with the Listing Rules.  Any
reference in this Information Memorandum to listing particulars means this
Information Memorandum excluding all information incorporated by reference. The
Issuers have confirmed that any information incorporated by reference,
including any such information to which readers of this Information Memorandum
are expressly referred, has not been and does not need to be included in the
listing particulars to satisfy the requirements of the FSMA or the Listing
Rules. The Issuers believe that none of the information incorporated herein by
reference conflicts in any material respect with the information included in
the listing particulars.  The
Issuers will, at the specified offices of the Paying Agents (as set out under Summary
of the Programme on page 7), provide, free of charge, upon an oral or written
request, a copy of any or all of the documents which, or portions of which, are
deemed to be incorporated by reference into this Information Memorandum.
Written or telephone requests for such documents should be directed to the
specified office of any Paying Agent.


SUPPLEMENTARY
LISTING PARTICULARS  If
at any time either of the Issuers shall be required to prepare supplementary
listing particulars pursuant to Section 81 of the FSMA, such Issuer will
prepare and make available an appropriate amendment or supplement to this
Information Memorandum or a further Information Memorandum which, in respect of
any subsequent issue of Instruments to be admitted to the Official List of the
UK Listing Authority, shall constitute supplementary listing particulars as
required by the UK Listing Authority and Section 81 of the FSMA.


SUMMARY OF THE PROGRAMME  The
following summary is qualified in its entirety by the remainder of this
Information Memorandum.  Issuers:
  
  Transco
  Holdings plc (registered number 3675375).Transco
  plc (registered number 2006000).Description:
  
  Euro
  Medium Term Note Programme.Size:
  
  Up
  to euro 7,000,000,000 (or the equivalent in other currencies at the date of
  issue) aggregate nominal amount of Instruments outstanding at any one time.Arranger:
  
  HSBC
  Bank plc.Principal
  Dealers:
  
  Barclays
  Bank PLC
  Credit Suisse First Boston (Europe) Limited
  Deutsche Bank AG London
  HSBC Bank plc
  J.P. Morgan Securities Ltd.
  Mizuho International plc
  The Royal Bank of Scotland plcThe
  Issuers may from time to time terminate the appointment of any dealer under
  the Programme or appoint additional dealers either in respect of one or more
  Tranches or in respect of the whole Programme. References in this Information
  Memorandum to Permanent Dealers are to the persons listed above as Dealers
  and to such additional persons that are appointed as dealers in respect of
  the whole Programme (and whose appointment has not been terminated) and to Dealers
  are to all Permanent Dealers and all persons appointed as a dealer in respect
  of one or more Tranches.Trustee:
  
  The
  Law Debenture Trust Corporation p.l.c.Issuing
  and Paying Agent:
  
  JPMorgan
  Chase Bank.Other
  Paying Agents:
  
  ING
  Belgium SA/NV, Kredietbank S.A.
  Luxembourgeoise and Cre¤dit Agricole Investor Services Corporate Trust.Method
  of Issue:
  
  The
  Instruments will be issued on a syndicated or non-syndicated basis. The
  Instruments will be issued in series (each a Series) having one or more
  issue dates and on terms otherwise identical (or identical other than in
  respect of the first payment of interest), the Instruments of each Series
  being intended to be interchangeable with all other Instruments of that
  Series. Each Series may be issued in tranches (each a Tranche) on the same
  or different issue dates. The specific terms of each Tranche (which will be
  supplemented, where necessary, with supplemental terms and conditions and,
  save in respect of the issue date, issue price, first payment of interest and
  nominal amount of the Tranche, will be identical to the terms of other
  Tranches of the same Series) will be set out in a pricing supplement to this
  Information Memorandum (a Pricing Supplement).Issue
  Price:
  
  Instruments
  may be issued at their nominal amount or at a discount or premium to their
  nominal amount. Partly Paid Instruments may be issued, the issue price of
  which will be payable in two or more instalments.Form
  of Instruments:
  
  The
  Instruments may be issued in bearer form only. Each Tranche of Instruments
  will be represented on issue by a temporary Global Instrument if (i)
  definitive Instruments are to be made available to Instrumentholders
  following the expiry of 40 days after their issue date or (ii) such
  Instruments have an initial maturity of more than one year and are being
  issued in compliance with the D Rules (as


defined
  in Summary of the Programme ö Selling Restrictions), otherwise such Tranche
  will be represented by a permanent Global Instrument. Any permanent Global
  Instrument shall only be exchanged for Instruments in definitive form in the
  limited circumstances set out in the permanent Global Instrument.Clearing
  Systems:
  
  Clearstream,
  Luxembourg, Euroclear and, in relation to any Tranche, such other clearing
  system as may be agreed between the relevant Issuer, the Issuing and Paying
  Agent, the Trustee and the relevant Dealer.Initial
  Delivery of Instruments:
  
  On
  or before the issue date for each Tranche, the Global Instrument representing
  Instruments may be deposited with a common depositary for Euroclear and
  Clearstream, Luxembourg. Global Instruments may also be deposited with any
  other clearing system or may be delivered outside any clearing system
  provided that the method of such delivery has been agreed in advance by the
  relevant Issuer, the Issuing and Paying Agent, the Trustee and the relevant
  Dealer.Currencies:
  
  Subject
  to compliance with all relevant laws, regulations and directives, Instruments
  may be issued in U.S. dollars, Australian dollars, Canadian dollars, Danish
  krone, euro, Hong Kong dollars, New Zealand dollars, Sterling, Swedish krona,
  Swiss francs or Japanese yen or in other currencies if the relevant Issuer
  and the relevant Dealers so agree. Instruments may, subject to compliance as
  above, be issued as dual currency Instruments.Maturities:
  
  Subject
  to compliance with all relevant laws, regulations and directives, any
  maturity from one month to perpetuity.Any
  Instruments having a maturity of less than one year from their date of issue
  must (a) have a minimum redemption value of £100,000 (or its equivalent in
  other currencies) and be issued only to persons whose ordinary activities
  involve them in acquiring, holding, managing or disposing of investments (as
  principal or agent) for the purposes of their businesses; or who it is
  reasonable to expect will acquire, hold, manage or dispose of investments (as
  principal or agent) for the purposes of their businesses or (b) be issued in
  other circumstances which do not constitute a contravention of Section 19 of
  the FSMA by the relevant Issuer.Denominations:
  
  Definitive
  Instruments will be in such denominations as may be specified in the relevant
  Pricing Supplement.Fixed
  Rate Instruments:
  
  Fixed
  interest will be payable in arrear on the date or dates in each year
  specified in the relevant Pricing Supplement and at maturity.Floating
  Rate Instruments:
  
  Floating
  Rate Instruments will bear interest set separately for each Series as
  follows:(a)
  on the same basis as the floating rate under a notional interest rate swap
  transaction in the relevant Specified Currency governed by an agreement
  incorporating the 2000 ISDA Definitions published by the International Swaps
  and Derivatives Association, Inc. or(b)
  by reference to LIBOR, LIBID, LIMEAN or EURIBOR (or such other benchmark as
  may be specified in the relevant Pricing Supplement) as adjusted for any
  applicable margin. Interest periods will be selected by the relevant Issuer
  prior to issue and specified in the relevant Pricing Supplement. Floating
  Rate Instruments may also have a maximum interest rate, a minimum interest
  rate, or


both.Zero
  Coupon Instruments:
  
  Zero
  Coupon Instruments may be issued at their nominal amount or at a discount to
  it and will not bear interest.Dual
  Currency Instruments:
  
  Payments
  (whether in respect of principal or interest and whether at maturity or
  otherwise) in respect of Dual Currency Instruments will be made in such
  currencies, and based on such rates of exchange as may be specified in the
  relevant Pricing Supplement.Index
  Linked Instruments:
  
  Payments
  of principal in respect of Index Linked Redemption Instruments or of interest
  in respect of Index Linked Interest Instruments will be calculated by
  reference to such index and/or formula as may be specified in the relevant
  Pricing Supplement.Interest
  Periods and Rates of Interest:
  
  The
  length of the interest periods for the Instruments and the applicable
  interest rate or its method of calculation may differ from time to time or be
  constant for any Series. Instruments may have a maximum interest rate, a
  minimum interest rate, or both. The use of interest accrual periods permits
  the Instruments to bear interest at different rates in the same interest
  period. All such information will be set out in the relevant Pricing
  Supplement.Redemption:
  
  The
  relevant Pricing Supplement will specify the basis for calculating the
  redemption amounts payable, which may be by reference to a stock index or
  formula or as otherwise provided in the relevant Pricing Supplement.Redemption
  by Instalments:
  
  The
  Pricing Supplement issued in respect of each issue of Instruments that are
  redeemable in two or more instalments will set out the dates on which, and
  the amounts in which, such Instruments may be redeemed.Other
  Instruments:
  
  Terms
  applicable to high interest Instruments, low interest Instruments, step-up
  Instruments, step-down Instruments, dual currency Instruments, reverse dual
  currency Instruments, optional dual currency Instruments, partly-paid
  Instruments and any other type of Instrument that the relevant Issuer, the
  Trustee and any Dealer or Dealers may agree to issue under the Programme,
  subject to compliance with all relevant laws, regulations and directives,
  will be set out in the relevant Pricing Supplement.Optional
  Redemption:
  
  The
  Pricing Supplement issued in respect of each issue of Instruments will state
  whether such Instruments may be redeemed prior to their stated maturity at
  the option of the relevant Issuer (either in whole or in part) and/or the
  holders, and if so the terms applicable to such redemption.Status
  of Instruments:
  
  The
  Instruments will constitute unsubordinated and unsecured obligations of the
  relevant Issuer all as described in Terms and Conditions of the Instruments
  ö Status.Negative
  Pledge:
  
  Neither
  of the Issuers will give any negative pledge in respect of the Programme.Cross
  Default:
  
  The
  events of default in respect of Instruments in any Series will not contain
  any cross default provision in respect of any other indebtedness of the
  relevant Issuer whether with respect to Instruments in any other Series or
  otherwise.Events
  of Default:
  
  The
  events of default under the Instruments are as specified below under Terms
  and Conditions of the Instruments ö Events of Default.Early
  Redemption:
  
  Except
  as provided in Optional Redemption above and subject always to the
  Regulations and any other laws, regulations and directives applicable to the
  relevant


currency
  in which such Instruments are denominated, Instruments will be redeemable at
  the option of the relevant Issuer prior to maturity only for tax reasons. See
  Terms and Conditions of the Instruments ö Redemption, Purchase and Options.Withholding
  Tax:
  
  All
  payments of principal and interest in respect of the Instruments will be made
  free and clear of withholding taxes of the United Kingdom subject to
  customary exceptions, all as described in Terms and Conditions of the
  Instruments ö Taxation.Governing
  Law:
  
  English.Listing:
  
  Each
  Series may be admitted to the Official List of the UK Listing Authority and
  admitted to trading on the London Stock Exchange and/or admitted to listing,
  trading and/or quotation by any other listing authority, stock exchange
  and/or quotation system as may be agreed between the relevant Issuer and the
  relevant Dealer and specified in the relevant Pricing Supplement or may be
  unlisted.Selling
  Restrictions:
  
  United
  States, United Kingdom and Japan. See Plan of Distribution.Each
  of the Issuers is Category 2 for the purposes of Regulation S under the
  Securities Act.The
  Instruments will be issued in compliance with U.S. Treas. Reg.
  1.163-5(c)(2)(i)(D) (the D Rules) unless (i) the relevant Pricing
  Supplement states that Instruments are issued in compliance with U.S. Treas.
  Reg. 1.163-5(c)(2)(i)(C) (the C Rules) or (ii) the Instruments are issued
  other than in compliance with the D Rules or the C Rules but in circumstances
  in which the Instruments will not constitute registration required
  obligations under the United States Tax Equity and Fiscal Responsibility Act
  of 1982 (TEFRA), which circumstances will be referred to in the relevant
  Pricing Supplement as a transaction to which TEFRA is not applicable.Terms
  and Conditions:
  
  The
  Terms and Conditions applicable to each Series will be as agreed between the
  relevant Issuer, the Trustee and the relevant Dealer or other purchaser at or
  prior to the time of issuance of such Series and will be specified in the
  relevant Pricing Supplement. The Terms and Conditions applicable to each
  Series will therefore be those as set out on pages 11 to 26 (inclusive) of
  the Information Memorandum as supplemented, modified or replaced by the relevant
  Pricing Supplement.


TERMS
AND CONDITIONS OF THE INSTRUMENTS  The following is the text of the terms and conditions which, subject to
completion and amendment and as supplemented or varied in accordance with the
provisions of the relevant Pricing Supplement, will be endorsed on the
Instruments in definitive form (if any) issued in exchange for the Global
Instrument(s) representing each Series. Either (i) the full text of these terms
and conditions together with the relevant provisions of the Pricing Supplement
or (ii) these terms and conditions as so completed, amended, supplemented or
varied (and subject to simplification by the deletion of non-applicable
provisions), shall be endorsed on such Instruments. All capitalised terms which
are not defined in these Conditions will have the meanings given to them in the
Trust Deed or the relevant Pricing Supplement. Those definitions will be
endorsed on the definitive Instruments. References in the Conditions to Instruments
are to the Instruments of one Series only, not to all Instruments that may be
issued under the Programme.  The
Instruments are constituted by an Amended and Restated Trust Deed (as amended
or supplemented as at the date of issue of the Instruments (the Issue Date),
the Trust Deed) dated 23 July 2004 between Transco Holdings plc and Transco
plc (each, an Issuer and together, the Issuers) and The Law Debenture Trust
Corporation p.l.c. (the Trustee, which expression shall include all persons
for the time being the trustee or trustees under the Trust Deed) as trustee for
the Instrumentholders (as defined below). These terms and conditions include
summaries of, and are subject to, the detailed provisions of the Trust Deed,
which includes the form of the Definitive Instruments, Receipts, Coupons and
Talons referred to below. An Amended and Restated Agency Agreement (as amended
or supplemented as at the Issue Date, the Agency Agreement) dated 23 July
2004 has been entered into in relation to the Instruments between the Issuers,
the Trustee, JPMorgan Chase Bank as initial issuing and paying agent and the
other agents named in it. The issuing and paying agent, the paying agents and
the calculation agent(s) for the time being (if any) are referred to below
respectively as the Issuing and Paying Agent, the Paying Agents (which
expression shall include the Issuing and Paying Agent) and the Calculation
Agent(s). Copies of the Trust Deed and the Agency Agreement are available for
inspection during usual business hours at the registered office of the Trustee
(presently at Fifth Floor, 100 Wood Street, London EC2V 7EX) and at the
specified offices of the Paying Agents.  The
Instrumentholders, the holders of the interest coupons (the Coupons)
appertaining to interest bearing Instruments and, where applicable in the case
of such Instruments, talons for further Coupons (the Talons) (the Couponholders)
and the holders of the receipts for the payment of instalments of principal
(the Receipts) relating to Instruments of which the principal is payable in
instalments are entitled to the benefit of, are bound by, and are deemed to
have notice of, all the provisions of the Trust Deed and are deemed to have
notice of those provisions of the Agency Agreement applicable to them.  1.
FORM, DENOMINATION AND TITLE  The
Instruments are issued in bearer form in the Specified Denomination(s) shown on
this Instrument and are serially numbered. Instruments of one Specified
Denomination are not exchangeable for Instruments of another Specified
Denomination.  This
Instrument is a Fixed Rate Instrument, a Floating Rate Instrument, a Zero
Coupon Instrument, a Perpetual Instrument, an Index Linked Interest Instrument,
an Index Linked Redemption Instrument, an Instalment Instrument, a Dual
Currency Instrument or a Partly Paid Instrument, a combination of any of the
preceding or any other kind of Instrument, depending upon the Interest and
Redemption/Payment Basis shown on this Instrument.  Instruments
are issued with Coupons (and, where appropriate, a Talon) attached, save in the
case of Zero Coupon Instruments in which case references to interest (other
than in relation to interest due after the Maturity Date), Coupons and Talons
in these Conditions are not applicable. Instalment Instruments are issued with
one or more Receipts attached. Title to the Instruments and the Receipts,
Coupons and Talons shall pass by delivery and except as ordered by a court of
competent jurisdiction or as required by law, the Issuer and the Paying Agents
shall be entitled to treat the bearer of any Instrument, Receipt, Coupon or
Talon as the absolute owner of that Instrument, Receipt, Coupon or Talon, as
the case may be, and shall not be required to obtain any proof of ownership or
as to the identity of the bearer.  In
these Conditions, Instrumentholder means the bearer of any Instrument and the
Receipts relating to it, holder (in relation to an Instrument, Receipt,
Coupon or Talon) means the bearer of any Instrument, Receipt, Coupon or Talon
and capitalised terms have the meanings given to them on this Instrument, the
absence of any such meaning indicating that such term is not applicable to this
Instrument.


2.
STATUS  The
Instruments and the Receipts and Coupons relating to them constitute direct,
unconditional and unsecured obligations of the Issuer and rank pari passu
without any preference or priority among themselves. The payment obligations of
the Issuer under the Instruments, Receipts and Coupons shall, subject to such
exceptions as are from time to time applicable under the laws of England, rank
equally with all other present and future unsecured obligations (other than
subordinated obligations, if any) of the Issuer.  3.
INTEREST  3.1
Interest on Fixed Rate Instruments  Each
Fixed Rate Instrument bears interest on its outstanding nominal amount from the
Interest Commencement Date at the rate per annum (expressed as a percentage)
equal to the Rate of Interest, payable in arrear on each Interest Payment Date.  If
a Fixed Coupon Amount or a Broken Amount is specified on this Instrument, the
amount of interest payable on each Interest Payment Date will amount to the
Fixed Coupon Amount, or, if applicable, the Broken Amount so specified and in
the case of a Broken Amount will be payable on the particular Interest Payment
Date(s) specified on this Instrument.  3.2
Interest on Floating Rate Instruments and Index Linked Interest Instruments  3.2.1
Interest Payment Dates: Each Floating Rate Instrument and Index Linked Interest
Instrument bears interest on its outstanding nominal amount from the Interest
Commencement Date at the rate per annum (expressed as a percentage) equal to
the Rate of Interest, such interest being payable in arrear on each Interest
Payment Date. Such Interest Payment Date(s) is/are either shown on this Instrument
as Specified Interest Payment Dates or, if no Specified Interest Payment
Date(s) is/are shown on this Instrument, Interest Payment Date shall mean each
date which falls the number of months or other period shown on this Instrument
as the Specified Period after the preceding Interest Payment Date or, in the
case of the first Interest Payment Date, after the Interest Commencement Date.  3.2.2
Business Day Convention: If any date which is specified to be subject to
adjustment in accordance with a Business Day Convention would otherwise fall on
a day which is not a Business Day, then, if the Business Day Convention
specified is (A) the Floating Rate Convention, such date shall be postponed to
the next day which is a Business Day unless it would then fall into the next
calendar month, in which event (x) such date shall be brought forward to the
immediately preceding Business Day and (y) each subsequent such date shall be
the last Business Day of the month in which such date would have fallen had it
not been subject to adjustment, (B) the Following Business Day Convention, such
date shall be postponed to the next day which is a Business Day, (C) the
Modified Following Business Day Convention, such date shall be postponed to the
next day which is a Business Day unless it would then fall into the next
calendar month, in that event such date shall be brought forward to the
immediately preceding Business Day or (D) the Preceding Business Day
Convention, such date shall be brought forward to the immediately preceding Business
Day.  3.2.3
Rate of Interest for Floating Rate Instruments: The Rate of Interest in respect
of Floating Rate Instruments for each Interest Accrual Period shall be
determined in the manner specified on this Instrument and the provisions below
relating to either ISDA Determination or Screen Rate Determination shall apply,
depending upon which is specified on this Instrument.  (A)
ISDA Determination for Floating Rate Instruments  Where
ISDA Determination is specified on this Instrument as the manner in which the
Rate of Interest is to be determined, the Rate of Interest for each Interest
Accrual Period shall be determined by the Calculation Agent as a rate equal to
the relevant ISDA Rate. For the purposes of this sub-paragraph (A), ISDA Rate
for an Interest Accrual Period means a rate equal to the Floating Rate which
would be determined by the Calculation Agent under a Swap Transaction under the
terms of an agreement incorporating the ISDA Definitions and under which:  (a)
the Floating Rate Option is as specified on this Instrument;  (b)
the Designated Maturity is a period specified on this Instrument; and


(c)
the relevant Reset Date is the first day of that Interest Accrual Period unless
otherwise specified on this Instrument.  For
the purposes of this sub-paragraph (A), Floating Rate, Calculation Agent, Floating
Rate Option, Designated Maturity, Reset Date and Swap Transaction have
the meanings given to those terms in the ISDA Definitions.  (B)
Screen Rate Determination for Floating Rate Instruments  Where
Screen Rate Determination is specified on this Instrument as the manner in
which the Rate of Interest is to be determined, the Rate of Interest for each
Interest Accrual Period shall be determined by the Calculation Agent at or
about the Relevant Time on the Interest Determination Date in respect of such
Interest Accrual Period in accordance with the following:  (x)
if the Primary Source for Floating Rate is a Page, subject as provided below,
the Rate of Interest shall be:  (a)
the Relevant Rate (where such Relevant Rate on such Page is a composite
quotation or is customarily supplied by one entity); or  (b)
the arithmetic mean of the Relevant Rates of the persons whose Relevant Rates
appear on that Page,  in
each case appearing on such Page at the Relevant Time on the Interest
Determination Date;  (y)
if the Primary Source for the Floating Rate is Reference Banks or if sub-
paragraph (x)(a) applies and no Relevant Rate appears on the Page at the
Relevant Time on the Interest Determination Date or if sub-paragraph (x)(b)
above applies and fewer than two Relevant Rates appear on the Page at the
Relevant Time on the Interest Determination Date, subject as provided below,
the Rate of Interest shall be the arithmetic mean of the Relevant Rates that
each of the Reference Banks is quoting to leading banks in the Relevant
Financial Centre at the Relevant Time on the Interest Determination Date, as
determined by the Calculation Agent; and  (z)
if paragraph (y) above applies and the Calculation Agent determines that fewer
than two Reference Banks are so quoting Relevant Rates, subject as provided
below, the Rate of Interest shall be the arithmetic mean of the rates per annum
(expressed as a percentage) that the Calculation Agent determines to be the
rates (being the nearest equivalent to the Benchmark) in respect of a
Representative Amount of the Specified Currency that at least two out of five
leading banks selected by the Calculation Agent in the principal financial
centre of the country of the Specified Currency or, if the Specified Currency
is euro in those member states of the European Union which are participating in
European economic and monetary union as selected by the Calculation Agent (the Principal
Financial Centre) are quoting at or about the Relevant Time on the date on
which such banks would customarily quote such rates for a period commencing on
the Effective Date for a period equivalent to the Specified Duration (I) to
leading banks carrying on business in Europe, or (if the Calculation Agent
determines that fewer than two of such banks are so quoting to leading banks in
Europe) (II) to leading banks carrying on business in the Principal Financial
Centre; except that, if fewer than two of such banks are so quoting to leading
banks in the Principal Financial Centre, the Rate of Interest shall be the Rate
of Interest determined on the previous Interest Determination Date (after
readjustment for any difference between any Margin, Rate Multiplier or Maximum
or Minimum Rate of Interest applicable to the preceding Interest Accrual Period
and to the relevant Interest Accrual Period).  3.2.4
Rate of Interest for Index Linked Interest Instruments: The Rate of Interest in
respect of Index Linked Interest Instruments for each Interest Accrual Period
shall be determined in the manner specified on this Instrument and interest
will accrue by reference to an Index or Formula as specified on this
Instrument.  (a)
Zero Coupon Instruments: Where an Instrument, the Interest Basis of which is
specified to be Zero Coupon, is repayable prior to the Maturity Date and is not
paid when due, the amount due and payable prior to the Maturity Date shall be
the Early Redemption Amount of such Instrument. As from the Maturity Date, the
Rate of Interest for any overdue principal of such an Instrument shall be a
rate per annum (expressed as a percentage) equal to the Amortisation Yield (as
defined in Condition 4(d)(i)(B)).  (b)
Dual Currency Instruments: In the case of Dual Currency Instruments, if the
rate or amount of interest falls to be determined by reference to a Rate of
Exchange or a method of calculating a Rate of Exchange, the rate or amount of
interest payable shall be determined in the manner specified on this
Instrument.


(c)
Partly Paid Instruments: In the case of Partly Paid Instruments (other than
Partly Paid Instruments which are Zero Coupon Instruments), interest will
accrue as previously stated on the paid-up nominal amount of such Instruments
and otherwise as specified on this Instrument.  (d)
Accrual of Interest: Interest shall cease to accrue on each Instrument on the
due date for redemption unless, upon due presentation, payment is improperly
withheld or refused, in which event interest shall continue to accrue (as well
after as before judgment) at the Rate of Interest in the manner provided in
this Condition 3 to the Relevant Date (as defined in Condition 6).  (e)
Margin, Maximum/Minimum Rates of Interest, Instalment Amounts and Redemption
Amounts, Rate Multipliers and Rounding:  (i)
If any Margin or Rate Multiplier is specified on this Instrument (either (x)
generally, or (y) in relation to one or more Interest Accrual Periods), an
adjustment shall be made to all Rates of Interest, in the case of (x), or the
Rates of Interest for the specified Interest Accrual Periods, in the case of
(y), calculated in accordance with Condition 3.2 above, by adding (if a
positive number) or subtracting (if a negative number) the absolute value of
such Margin or multiplying by such Rate Multiplier, subject always to the next
paragraph.  (ii)
If any Maximum or Minimum Rate of Interest, Instalment Amount or Redemption
Amount is specified on this Instrument, then any Rate of Interest, Instalment
Amount or Redemption Amount shall be subject to such maximum or minimum, as the
case may be.  (iii)
For the purposes of any calculations required pursuant to these Conditions
(unless otherwise specified), (x) all percentages resulting from such
calculations shall be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point (with halves being rounded up), (y)
all figures shall be rounded to seven significant figures (with halves being
rounded up) and (z) all currency amounts that fall due and payable shall be
rounded to the nearest unit of such currency (with halves being rounded up),
save in the case of yen, which shall be rounded down to the nearest yen. For
these purposes unit means the lowest amount of such currency which is
available as legal tender in the country of such currency.  (f)
Calculations: The amount of interest payable in respect of any Instrument for
any period shall be calculated by multiplying the product of the Rate of
Interest and the outstanding nominal amount of such Instrument by the Day Count
Fraction, unless an Interest Amount (or a formula for its calculation) is
specified in respect of such period, in which case the amount of interest
payable in respect of such Instrument for such period shall equal such Interest
Amount (or be calculated in accordance with such formula). Where any Interest
Period comprises two or more Interest Accrual Periods, the amount of interest
payable in respect of such Interest Period shall be the sum of the amounts of
interest payable in respect of each of those Interest Accrual Periods.  (g) Determination and Publication of Rates of Interest, Interest
Amounts, Final Redemption Amounts, Early Redemption Amounts, Optional
Redemption Amounts and Instalment Amounts: As soon as practicable after the
Relevant Time on each Interest Determination Date or such other time on such
date as the Calculation Agent may be required to calculate any rate or amount,
obtain any quotation or make any determination or calculation, it shall
determine such rate and calculate the Interest Amounts in respect of each
Specified Denomination of the Instruments for the relevant Interest Accrual
Period, calculate the Redemption Amount or Instalment Amount, obtain such quote
or make such determination or calculation, as the case may be, and cause the
Rate of Interest and the Interest Amounts for each Interest Period and the
relevant Interest Payment Date and, if required to be calculated, the Final
Redemption Amount, Early Redemption Amount, Optional Redemption Amount or any
Instalment Amount to be notified to the Trustee, the Issuer, each of the Paying
Agents, the Instrumentholders, any other Calculation Agent appointed in respect
of the Instruments that is to make a further calculation upon receipt of such
information and, if the Instruments are listed on a stock exchange and the
rules of such exchange so require, such exchange as soon as possible after
their determination but in no event later than (i) the commencement of the
relevant Interest Period, if determined prior to such time, in the case of
notification to such exchange of a Rate of Interest and Interest Amount, or
(ii) in all other cases, the fourth Business Day after such determination.
Where any Interest Payment Date or Interest Period Date is subject to
adjustment pursuant to Condition 3.2.2, the Interest Amounts and the Interest Payment
Date so published may subsequently be amended (or appropriate alternative
arrangements made with the consent of the Trustee by way of adjustment) without
notice in the event of an extension or shortening of the Interest Period. If
the Instruments become due and payable under Condition 8, the accrued interest
and the Rate of Interest payable in respect of the Instruments shall
nevertheless continue to be calculated as previously in accordance


with
this Condition but no publication of the Rate of Interest or the Interest
Amount so calculated need be made unless the Trustee otherwise requires. The
determination of any rate or amount, the obtaining of each quotation and the
making of each determination or calculation by the Calculation Agent(s) shall
(in the absence of manifest error) be final and binding upon all parties.  (h)
Determination or Calculation by Trustee: If the Calculation Agent does not at
any time for any reason determine or calculate the Rate of Interest for an
Interest Period or any Interest Amount, Instalment Amount, Final Redemption
Amount, Early Redemption Amount or Optional Redemption Amount the Trustee shall
do so (or shall appoint an agent on its behalf to do so) and such determination
or calculation shall be deemed to have been made by the Calculation Agent. In
doing so, the Trustee shall apply the preceding provisions of this Condition,
with any necessary consequential amendments, to the extent that, in its
opinion, it can do so, and, in all other respects it shall do so in such manner
as it shall deem fair and reasonable in all the circumstances.  (i)
Definitions: In these Conditions, unless the context otherwise requires, the
following defined terms shall have the meanings set out below:  Business
Day means:  (i)
in the case of a currency other than euro, a day (other than a Saturday or
Sunday) on which commercial banks and foreign exchange markets settle payments
in the principal financial centre for such currency and/or  (ii)
in the case of euro, a day on which the TARGET System is operating (a TARGET
Business Day) and/or  (iii)
in the case of a currency and/or one or more Additional Business Centres as
specified on this Instrument, a day (other than a Saturday or a Sunday) on
which commercial banks and foreign exchange markets settle payments in such
currency or, if no currency is indicated, generally in each of the Additional
Business Centres.  Day
Count Fraction means, in respect of the calculation of an amount of interest
on any Instrument for any period of time (from and including the first day of
such period to but excluding the last) (whether or not constituting an Interest
Period, the Calculation Period):  (i)
if Actual/365 or Actual/Actual-ISDA is specified on this Instrument, the
actual number of days in the Calculation Period divided by 365 (or, if any
portion of that Calculation Period falls in a leap year, the sum of (A) the
actual number of  days
in that portion of the Calculation Period falling in a leap year divided by 366
and (B) the actual number of days in that portion of the Calculation Period
falling in a non-leap year divided by 365);  (ii)
if Actual/365 (Fixed) is specified on this Instrument, the actual number of
days in the Calculation Period divided by 365;  (iii)
if Actual/360 is specified on this Instrument, the actual number of days in
the Calculation Period divided by 360;  (iv)
if 30/360, 360/360 or Bond Basis is specified on this Instrument, the
number of days in the Calculation Period divided by 360 (the number of days to
be calculated on the basis of a year of 360 days with 12 30-day months (unless
(a) the last day of the Calculation Period is the 31st day of a month but the
first day of the Calculation Period is a day other than the 30th or 31st day of
a month, in which case the month that includes that last day shall not be
considered to be shortened to a 30-day month, or (b) the last day of the
Calculation Period is the last day of the month of February, in which case the
month of February shall not be considered to be lengthened to a 30-day month);  (v)
if 30E/360 or Eurobond Basis is specified on this Instrument, the number of
days in the Calculation Period divided by 360 (the number of days to be
calculated on the basis of a year of 360 days with 12 30-day months, without
regard to the date of the first day or last day of the Calculation Period
unless, in the case of a Calculation Period ending on the Maturity Date, the
Maturity Date is the last day of the month of February, in which case the month
of February shall not be considered to be lengthened to a 30-day month); and  (vi)
if Actual/Actual-ISMA is specified on this Instrument,


(a)
if the Calculation Period is equal to or shorter than the Determination Period
during which it falls, the actual number of days in the Calculation Period
divided by the product of (x) the actual number of days in such Determination
Period and (y) the number of Determination Periods in any year; and  (b)
if the Calculation Period is longer than one Determination Period, the sum of:  (x)
the actual number of days in such Calculation Period falling in the
Determination Period in which it begins divided by the product of (1) the
actual number of days in such Determination Period and (2) the number of
Determination Periods in any year; and  (y)
the actual number of days in such Calculation Period falling in the next
Determination Period divided by the product of (1) the actual number of days in
such Determination Period and (2) the number of Determination Periods in any
year,  where:  Determination
Period means the period from and including a Determination Date in any year to
but excluding the next Determination Date; and  Determination
Date means the date specified as such on this Instrument or, if none is so
specified, the Interest Payment Date.  Effective
Date means, with respect to any Floating Rate to be determined on an Interest
Determination Date, the date specified as such on this Instrument or, if none
is so specified, the first day of the Interest Accrual Period to which such Interest
Determination Date relates.  Euro-zone
means the region comprising of member states of the European Union that adopt
the single currency in accordance with the Treaty establishing the European
Community as amended.  Interest
Accrual Period means the period beginning on (and including) the Interest
Commencement Date and ending on (but excluding) the first Interest Period Date
and each successive period beginning on (and including) an Interest Period Date
and ending on (but excluding) the next succeeding Interest Period Date.  Interest
Amount means the amount of interest payable, and in the case of Fixed Rate
Instruments, means the Fixed Coupon Amount or Broken Amount, as the case may
be.  Interest
Commencement Date means the Issue Date or such other date as may be specified
on this Instrument.  Interest
Determination Date means, with respect to a Rate of Interest and Interest
Accrual Period, the date specified as such on this Instrument or, if none is so
specified, (i) the first day of such Interest Accrual Period if the Specified
Currency is Sterling or (ii) the day falling two Business Days in London prior
to the first day of such Interest Accrual Period if the Specified Currency is
neither Sterling nor euro or (iii) the day falling two TARGET Business Days
prior to the first day of such Interest Accrual Period if the Specified
Currency is euro.  Interest
Payment Date means the date or dates specified as such in, or determined in
accordance with the provisions of, the relevant Pricing Supplement and, if a
Business Day Convention is specified in the relevant Pricing Supplement, as the
same may be adjusted in accordance with the relevant Business Day Convention.  Interest
Period means the period beginning on (and including) the Interest Commencement
Date and ending on (but excluding) the first Interest Payment Date and each
successive period beginning on (and including) an Interest Payment Date and
ending on (but excluding) the next succeeding Interest Payment Date.  Interest
Period Date means each Interest Payment Date unless otherwise specified on
this Instrument.  ISDA
Definitions means the 2000 ISDA Definitions as published by the International
Swaps and Derivatives Association, Inc., unless otherwise specified on this
Instrument.


Page
means such page, section, caption, column or other part of a particular
information service (including, but not limited to, the Reuter Money 3000
Service (Reuters) and the Moneyline Telerate Service (Telerate)) as may be
specified for the purpose of providing a Relevant Rate, or such other page,
section, caption, column or other part as may replace it on that information
service or on such other information service, in each case as may be nominated
by the person or organisation providing or sponsoring the information appearing
there for the purpose of displaying rates or prices comparable to that Relevant
Rate.  Rate
of Interest means the rate of interest payable from time to time in respect of
this Instrument and that is either specified or calculated in accordance with
the provisions on this Instrument.  Redemption
Amount means, as appropriate, the Final Redemption Amount, the Early
Redemption Amount (Tax), the Optional Redemption Amount (Call), the Optional
Redemption Amount (Put), the Early Termination Amount or such other amount in
the nature of a redemption amount as may be specified in, or determined in
accordance with the provisions of, the relevant Pricing Supplement.  Reference
Banks means the institutions specified as such in this Instrument or, if none,
four major banks selected by the Calculation Agent in the interbank market (or,
if appropriate, money, swap or over-the-counter index options market) that is
most closely connected with the Benchmark (which, if EURIBOR is the relevant
Benchmark, shall be Europe).  Relevant
Financial Centre means, with respect to any Floating Rate to be determined in
accordance with a Screen Rate Determination on an Interest Determination Date,
the financial centre as may be specified as such on this Instrument or, if none
is so specified, the financial centre with which the relevant Benchmark is most
closely connected (which, in the case of EURIBOR, shall be Europe) or, if none
is so connected, London.  Relevant
Rate means the Benchmark for a Representative Amount of the Specified Currency
for a period (if applicable or appropriate to the Benchmark) equal to the
Specified Duration commencing on the Effective Date.  Relevant
Time means, with respect to any Interest Determination Date, the local time in
the Relevant Financial Centre specified on this Instrument or, if no time is
specified, the local time in the Relevant Financial Centre at which it is
customary to determine bid and offered rates in respect of deposits in the
Specified Currency in the interbank market in the Relevant Financial Centre or,
if no such customary local time exists, 11.00 hours in the Relevant Financial
Centre and, for the purpose of this definition, local time means, with
respect to Europe as a Relevant Financial Centre, Brussels time.  Representative
Amount means, with respect to any Floating Rate to be determined in accordance
with a Screen Rate Determination on an Interest Determination Date, the amount
specified as such in this Instrument or, if none is specified, an amount that
is representative for a single transaction in the relevant market at the time.  Specified
Currency means the currency specified as such on this Instrument or, if none
is specified, the currency in which the Instruments are denominated.  Specified
Duration means, with respect to any Floating Rate to be determined in
accordance with a Screen Rate Determination on an Interest Determination Date,
the duration specified in this Instrument or, if none is specified, a period of
time equal to the relevant Interest Accrual Period, ignoring any adjustment
pursuant to Condition 3.2.2.  TARGET
System means the Trans-European Automated Real-Time Gross Settlement Express
Transfer (TARGET) System or any successor to it.  (j)
Calculation Agent and Reference Banks: The Issuer shall procure that there
shall at all times be four Reference Banks (or such other number as may be
required) with offices in the Relevant Financial Centre and one or more
Calculation Agents if provision is made for them in this Instrument and for so
long as any Instrument is outstanding (as defined in the Trust Deed). If any
Reference Bank (acting through its relevant office) is unable or unwilling to
continue to act as a Reference Bank, then the Issuer shall (with the prior
approval of the Trustee) appoint another Reference Bank with an office in the
Relevant Financial Centre to act as such in its place. Where more than one
Calculation Agent is appointed in respect of the Instruments, references in
these Conditions to the Calculation Agent shall be construed as each
Calculation Agent performing its respective duties under the Conditions. If the
Calculation Agent is unable or unwilling to act as such or if the Calculation
Agent fails duly to establish the Rate of Interest for an Interest Period or


Interest
Accrual Period or to calculate any Interest Amount, Instalment Amount, Final
Redemption Amount, Early Redemption Amount or Optional Redemption Amount, as
the case may be, or to comply with any other requirement, the Issuer shall (with
the prior approval of the Trustee) appoint a leading bank or investment banking
firm engaged in the interbank market (or, if appropriate, money, swap or
over-the- counter index options market) which is most closely connected with
the calculation or determination to be made by the Calculation Agent (acting
through its principal London office or any other office actively involved in
such market) to act as such in its place. The Calculation Agent may not resign
its duties without a successor having been appointed as specified in this
paragraph.  4.
REDEMPTION, PURCHASE AND OPTIONS  (a)
Final Redemption: Unless previously redeemed, purchased and cancelled as
provided below this Instrument will be redeemed at its Final Redemption Amount
(which, unless otherwise provided, is its nominal amount) on the Maturity Date
specified on this Instrument provided, however, that if the Instrument is a
Perpetual Instrument it will only be redeemable and repayable in accordance
with the following provisions of this Condition 4.  (b) Redemption for Taxation Reasons: If, on the occasion of the next
payment in respect of the Instruments the Issuer satisfies the Trustee
immediately before the giving of the notice referred to below that it would be
unable to make such payment without having to pay additional amounts as
described in Condition 6, and such requirement to pay such additional amounts
arises by reason of a change in the laws of the United Kingdom or any political
sub-division of the United Kingdom or taxing authority in the United Kingdom or
any political sub-division of the United Kingdom or in the interpretation or
application of the laws of the United Kingdom or any political sub-division of
the United Kingdom or in any applicable double taxation treaty or convention, which
change becomes effective on or after the date on which agreement is reached to
issue the first Tranche of the Instruments, and such requirement cannot be
avoided by the Issuer taking reasonable measures (such measures not involving
any material additional payments by, or expense for, the Issuer), the Issuer
may, at its option, on any Interest Payment Date or, if so specified on this
Instrument, at any time, having given not less than 30 nor more than 45 days
notice to the Instrumentholders in accordance with Condition 13, redeem all,
but not some only, of the Instruments at their Early Redemption Amount together
with interest accrued to the date of redemption provided that the date fixed
for redemption shall not be earlier than 90 days prior to the earliest date on
which the Issuer would be obliged to pay such additional amounts or make such
withholding or deduction, as the case may be, were a payment in respect of the
Instruments then due. Prior to the publication of any notice of redemption
pursuant to this Condition 4(b), the Issuer shall deliver to the Trustee a
certificate signed by two Directors of the Issuer stating that the requirement
referred to above cannot be avoided by the Issuer taking reasonable measures
available to it and the Trustee shall be entitled to accept such certificate as
sufficient evidence of the satisfaction of the condition precedent set out
above in which event it shall be conclusive and binding on Instrumentholders
and Couponholders.  (c)
Purchases: The Issuer and any of its subsidiary undertakings may at any time
purchase Instruments (provided that all unmatured Receipts and Coupons and
unexchanged Talons appertaining to them are attached or surrendered with them)
in the open market or otherwise at any price.  (d)
Early Redemption:  (i)
Zero Coupon Instruments:  (A)
The Early Redemption Amount payable in respect of any Zero Coupon Instrument,
the Early Redemption Amount of which is not linked to an index and/or a
formula, upon redemption of such Instrument pursuant to Condition 4(b) or upon
it becoming due and payable as provided in Condition 8 shall be the Amortised
Face Amount (calculated as provided below) of such Instrument unless otherwise
specified on this Instrument.  (B)
Subject to the provisions of sub-paragraph (C) below, the Amortised Face Amount
of any such Instrument shall be the scheduled Final Redemption Amount of such
Instrument on the Maturity Date discounted at a rate per annum (expressed as a
percentage) equal to the Amortisation Yield (which, if none is shown on this
Instrument, shall be such rate as would produce an Amortised Face Amount equal
to the issue price of the Instruments if they were discounted back to their
issue price on the Issue Date) compounded annually.  (C)
If the Early Redemption Amount payable in respect of any such Instrument upon
its redemption pursuant to Condition 4(b) or, if applicable, Condition 4(e) or
(f) or upon it becoming due and payable as provided in Condition 8, is not paid
when due, the Early Redemption Amount due and payable in respect of such
Instrument shall be the


Amortised
Face Amount of such Instrument as defined in sub-paragraph (B) above, except
that such sub-paragraph shall have effect as though the reference in that sub-
paragraph to the date on which the Instrument becomes due and payable was
replaced by a reference to the Relevant Date as defined in Condition 6. The
calculation of the Amortised Face Amount in accordance with this sub-paragraph
shall continue to be made (as well after as before judgment) until the Relevant
Date, unless the Relevant Date falls on or after the Maturity Date, in which
case the amount due and payable shall be the scheduled Final Redemption Amount
of such Instrument on the Maturity Date together with any interest that may
accrue in accordance with Condition 3.2.  Where
such calculation is to be made for a period of less than one year, it shall be
made on the basis of the Day Count Fraction shown on this Instrument.  (ii)
Other Instruments: The Early Redemption Amount payable in respect of any
Instrument (other than Instruments described in (i) above), upon redemption of
such Instrument pursuant to Condition 4(c) or upon it becoming due and payable
as provided in Condition 8, shall be the Final Redemption Amount unless
otherwise specified on this Instrument.  (e)
Redemption at the Option of the Issuer and Exercise of Issuers Options: If
Call Option is specified on this Instrument, the Issuer may, on giving not less
than 15 nor more than 30 days irrevocable notice to the Instrumentholders (or
such other notice period as may be specified on this Instrument), redeem, or
exercise any Issuers option in relation to, all or, if so provided, some of
such Instruments on any Optional Redemption Date or Option Exercise Date, as
the case may be. Any such redemption of Instruments shall be at their Optional
Redemption Amount together with interest accrued to the date fixed for
redemption. Any such redemption or exercise must relate to Instruments of a
nominal amount at least equal to the minimum nominal amount to be redeemed
specified hereon and no greater than the maximum nominal amount to be redeemed
specified on this Instrument.  All
Instruments in respect of which any such notice is given shall be redeemed, or
the Issuers option shall be exercised, on the date specified in such notice in
accordance with this Condition.  In
the case of a partial redemption or a partial exercise of an Issuers option,
the notice to Instrumentholders shall also contain the serial numbers of the
Instruments to be redeemed, which shall have been drawn in such place as the
Trustee may approve and in such manner as it deems appropriate, subject to
compliance with any applicable laws, listing authority and stock exchange
requirements.  (f)
Redemption at the Option of Instrumentholders and Exercise of Instrumentholders
Options: If Put Option is specified on this Instrument, the Issuer shall, at
the option of the holder of any such Instrument, upon the holder of such
Instrument giving not less than 15 nor more than 30 days notice to the Issuer
(or such other notice period as may be specified on this Instrument) redeem
such Instrument on the Optional Redemption Date(s) at its Optional Redemption
Amount together with interest accrued to the date fixed for redemption.  To
exercise such option or any other Instrumentholders option which may be set
out on this Instrument (which must be exercised on an Option Exercise Date) the
holder must deposit such Instrument with any Paying Agent at its specified
office, together with a duly completed option exercise notice (Exercise Notice)
in the form obtainable from any Paying Agent within the Instrumentholders
Option Period. No Instrument so deposited and option exercised may be withdrawn
(except as provided in the Agency Agreement) without the prior consent of the
Issuer.  (g)
Partly Paid Instruments: Partly Paid Instruments will be redeemed, whether at
maturity, early redemption or otherwise, in accordance with the provisions of
this Condition and the provisions specified on this Instrument.  (h)
Redemption by Instalments: Unless previously redeemed, purchased and cancelled
as provided in this Condition 4, each Instrument which provides for Instalment
Dates and Instalment Amounts will be partially redeemed on each Instalment Date
at the Instalment Amount specified on it. The outstanding nominal amount of
each such Instrument shall be reduced by the Instalment Amount (or, if such
Instalment Amount is calculated by reference to a proportion of the nominal
amount of such Instrument, such proportion) for all purposes with effect from
the related Instalment Date, unless payment of the Instalment Amount is
improperly withheld or refused on presentation of the related Receipt, in which
case, such amount shall remain outstanding until the Relevant Date relating to
such Instalment Amount.  (i)
Cancellation: All Instruments redeemed by the Issuer will be cancelled
forthwith (together with all unmatured Receipts and Coupons and unexchanged
Talons attached to them or surrendered with them) and may not be reissued or
resold and the obligations of the Issuer in respect of any such Instruments
shall be discharged.


5.
PAYMENTS AND TALONS  (a) Payments: Payments of principal and interest in respect of
Instruments will, subject as mentioned below, be made against presentation and
surrender of the relevant Receipts (in the case of payments of Instalment
Amounts other than on the due date for redemption and provided that the Receipt
is presented for payment together with its relative Instrument), Instruments
(in the case of all other payments of principal and, in the case of interest,
as specified in Condition 5(e)(vi)) or Coupons (in the case of interest, save
as specified in Condition 5(e)(vi)), as the case may be, at the specified
office of any Paying Agent outside the United States by a cheque payable in the
currency in which such payment is due drawn on, or, at the option of the
holder, by transfer to an account denominated in that currency with, a bank in
the principal financial centre for that currency;  provided that in the case of euro, the transfer shall be in a city in
which banks have access to the TARGET System.  (b)
Payments in the United States: Notwithstanding the above, if any Instruments
are denominated in U.S. dollars, payments in respect of them may be made at the
specified office of any Paying Agent in New York City in the same manner as
specified above if (i) the Issuer shall have appointed Paying Agents with
specified offices outside the United States with the reasonable expectation that
such Paying Agents would be able to make payment of the amounts on the
Instruments in the manner provided above when due, (ii) payment in full of such
amounts at all such offices is illegal or effectively precluded by exchange
controls or other similar restrictions on payment or receipt of such amounts
and (iii) such payment is then permitted by United States law, without
involving, in the opinion of the Issuer, any adverse tax consequence to the
Issuer.  (c)
Payments subject to Fiscal Laws etc.: All payments are subject in all cases to
any applicable fiscal or other laws, regulations and directives, but without
prejudice to the provisions of Condition 6. No commission or expenses shall be
charged to the Instrumentholders or Couponholders in respect of such payments.  (d)
Appointment of Agents: The Issuing and Paying Agent, the Paying Agents and the
Calculation Agent initially appointed by the Issuer and their respective
specified offices are listed below. The Issuing and Paying Agent, the Paying
Agents and the Calculation Agent act solely as agents of the Issuer and do not
assume any obligation or relationship of agency or trust for or with any
holder. The Issuer reserves the right at any time with the approval of the
Trustee to vary or terminate the appointment of the Issuing and Paying Agent,
any other Paying Agent or the Calculation Agent and to appoint additional or
other Paying Agents, provided that the Issuer shall at all times maintain (i)
an Issuing and Paying Agent, (ii) a Paying Agent having a specified office in a
continental European city, (iii) a Calculation Agent where the Conditions so
require one, (iv) so long as the Instruments are listed on the official list of
the Financial Services Authority in its capacity as competent authority under
the Financial Services and Markets Act 2000 and admitted to trading on the
London Stock Exchanges market for listed securities, a Paying Agent having a
specified office in London and (v) to the extent that the Issuer is able to do
so, a Paying Agent with a specified office in a European Union member state
that will not be obliged to withhold or deduct tax pursuant to European Council
Directive 2003/48/EC or any other European Union Directive implementing the
conclusions of the ECOFIN Council meeting of 26-27 November 2000 on the
taxation of savings income or any law implementing or complying with, or
introduced in order to conform to, such Directive. As used in these Conditions,
the terms Issuing and Paying Agent, Calculation Agent, and Paying Agent
include any additional or replacement Issuing and Paying Agent, Calculation
Agent or Paying Agent appointed under this Condition.  In
addition, the Issuer shall forthwith appoint a Paying Agent in New York City in
respect of any Instruments denominated in U.S. dollars in the circumstances
described in paragraph (b) above.  Notice
of any such change or any change of any specified office shall promptly be
given to the Instrumentholders in accordance with Condition 13.  (e)
Unmatured Coupons and Receipts and unexchanged Talons:  (i)
Unless the Instruments provide that the relevant Coupons are to become void
upon the due date for redemption of those Instruments, Instruments should be
surrendered for payment together with all unmatured Coupons (if any)
appertaining to them, failing which an amount equal to the face value of each
missing unmatured Coupon (or, in the case of payment not being made in full,
that proportion of the amount of such missing unmatured Coupon that the sum of
principal so paid bears to the total principal due) will be deducted from the
Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount,
as the case may be, due for payment. Any amount so deducted shall be paid in
the manner mentioned above against surrender of such missing Coupon within a
period of 10 years


from
the Relevant Date for the payment of such principal (whether or not such Coupon
has become void pursuant to Condition 7).  (ii)
If the relevant Instruments so provide, upon the due date for redemption of any
Instrument, unmatured Coupons relating to such Instrument (whether or not
attached) shall become void and no payment shall be made in respect of them.  (iii)
Upon the due date for redemption of any Instrument, any unexchanged Talon
relating to such Instrument (whether or not attached) shall become void and no
Coupon shall be delivered in respect of such Talon.  (iv)
Upon the due date for redemption of any Instrument which is redeemable in
instalments, all Receipts relating to such Instrument having an Instalment Date
falling on or after such due date (whether or not attached) shall become void
and no payment shall be made in respect of them.  (v)
Where any Instrument which provides that the relevant Coupons are to become
void upon the due date for redemption of those Instruments is presented for
redemption without all unmatured Coupons and any unexchanged Talon relating to
it, and where any Instrument is presented for redemption without any
unexchanged Talon relating to it, redemption shall be made only against the
provision of such indemnity as the Issuer may require.  (vi)
If the due date for redemption of any Instrument is not a due date for payment
of interest, interest accrued from the preceding due date for payment of
interest or the Interest Commencement Date, as the case may be, shall only be
payable against presentation (and surrender if appropriate) of the relevant
Instrument. Interest accrued on an Instrument that only bears interest after
its Maturity Date shall be payable on redemption of that Instrument against
presentation of that Instrument.  (f)
Non-business Days: If any date for payment in respect of any Instrument,
Receipt or Coupon is not a business day, the holder shall not be entitled to
payment until the next following business day nor to any interest or other sum
in respect of such postponed payment. In this paragraph, business day means a
day (other than a Saturday or a Sunday) on which banks and foreign exchange
markets are open for business in the relevant place of presentation, in such
jurisdictions as shall be specified as Financial Centres on the Instrument
and:  (i)
(in the case of a payment in a currency other than euro) where payment is to be
made by transfer to an account maintained with a bank in the relevant currency,
on which foreign exchange transactions may be carried on in the relevant
currency in the principal financial centre of the country of such currency or  (ii)
(in the case of a payment in euro), which is a TARGET Business Day.  (g)
Talons: On or after the Interest Payment Date for the final Coupon forming part
of a Coupon sheet issued in respect of any Instrument, the Talon forming part
of such Coupon sheet may be surrendered at the specified office of the Issuing
and Paying Agent in exchange for a further Coupon sheet (but excluding any
Coupons which may have become void pursuant to Condition 7).  6.
TAXATION  All
payments of principal and interest by or on behalf of the Issuer in respect of
the Instruments, the Receipts and the Coupons will be made without withholding
or deduction for or on account of, any present or future taxes or duties of
whatever nature imposed or levied by or on behalf of the United Kingdom or any
political sub-division of the United Kingdom or any authority in or of the
United Kingdom having power to tax, unless such withholding or deduction is
compelled by law. In that event, the Issuer will pay such additional amounts of
principal and interest as will result in the payment to the Instrumentholders,
Receiptholders or, as the case may be, the Couponholders of the amounts which
would otherwise have been receivable in respect of the Instruments, Receipts or
Coupons had no withholding or deduction been made, except that no such
additional amounts shall be payable in respect of any Instrument, Receipt or
Coupon presented for payment:  (a)
by or on behalf of, a person who is liable to such taxes or duties in respect
of such Instrument, Receipt or Coupon by reason of his having some connection
with the United Kingdom other than the mere holding of such Instrument, Receipt
or Coupon; or


(b)
in the United Kingdom;  (c)
by or on behalf of a person who would not be liable or subject to such
deduction or withholding by making a declaration of non-residence or other
claim for exemption to a tax authority;  (d)
more than 30 days after the Relevant Date except to the extent that the holder
would have been entitled to such additional amounts on presenting the same for
payment on such thirtieth day; or  (e)
where such withholding or deduction is imposed on a payment to an individual
and is required to be made pursuant to European Council Directive 2003/48/EC or
any other European Union Directive implementing the conclusions of the ECOFIN
Council meeting of 26-27 November 2000 on the taxation of savings income or any
law implementing or complying with, or introduced in order to conform to, such
Directive; or  (f)
by or on behalf of a holder who would have been able to avoid such withholding
or deduction (i) by presenting the relevant Instrument, Receipt or Coupon to
another Paying Agent in a member state of the European Union; or (ii) by
satisfying any statutory or procedural requirements (including, without
limitation, the provision of information).  As
used in these Conditions, Relevant Date in respect of any Instrument, Receipt
or Coupon means the date on which payment in respect of it first becomes due or
(if any amount of the money payable is improperly withheld or refused) the date
on which payment in full of the amount outstanding is made or (if earlier) the
date on which notice is duly given to the Instrumentholders in accordance with
Condition 13 that, upon further presentation of the Instrument, Receipt or
Coupon being made in accordance with the Conditions, such payment will be made,
provided that payment is in fact made upon such presentation. References in
these Conditions to (i) principal shall be deemed to include any premium
payable in respect of the Instruments, all Instalment Amounts, Final Redemption
Amounts, Early Redemption Amounts, Optional Redemption Amounts, Amortised Face
Amounts and all other amounts in the nature of principal payable pursuant to
Condition 4 or any amendment or supplement to it, (ii) interest shall be
deemed to include all Interest Amounts and all other amounts payable pursuant
to Condition 3 or any amendment or supplement to it and (iii) principal
and/or interest shall be deemed to include any additional amounts which may
be payable under this Condition or any undertaking given in addition to or in
substitution for it under the Trust Deed.  7.
PRESCRIPTION  Instruments,
Receipts and Coupons (which, for this purpose, shall not include Talons) shall
be prescribed and become void unless presented for payment within 10 years (in
the case of principal) or five years (in the case of interest) from the
appropriate Relevant Date in respect of them.  8.
EVENTS OF DEFAULT  If
any of the following events (Events of Default) occurs and is continuing, the
Trustee at its discretion may, and if so requested by the holders of at least
one-quarter in nominal amount of the Instruments then outstanding or if so
directed by an Extraordinary Resolution shall, give notice to the Issuer at its
registered office that the Instruments are, and they shall accordingly
immediately become due and repayable at their Redemption Amount together with
accrued interest (if any) to the date of payment:  (a)
Non-Payment: there is default for more than 30 days in the payment of any
principal or interest due in respect of the Instruments; or  (b)
Breach of Other Obligations: there is default in the performance or observance
by the Issuer of any other obligation or provision under the Trust Deed or the
Instruments (other than any obligation for the payment of any principal or
interest in respect of the Instruments) which default is incapable of remedy
or, if in the opinion of the Trustee capable of remedy, is not remedied within
90 days after notice of such default shall have been given to the Issuer by the
Trustee; or  (c)
Enforcement Proceedings: a resolution is passed, or a final order of a court in
the United Kingdom is made and, where possible, not discharged or stayed within
a period of 90 days, that the Issuer be wound up or dissolved; or  (d)
Winding-up: attachment is made of the whole or substantially the whole of the
assets or undertaking of the Issuer and such attachment is not released or
cancelled within 90 days or an encumbrancer takes possession or an


administrative
or other receiver or similar officer is appointed of the whole or substantially
the whole of the assets or undertaking of the Issuer or an administration or
similar order is made in relation to the Issuer and such taking of possession,
appointment or order is not released, discharged or cancelled within 90 days;
or  (e)
Insolvency: the Issuer ceases to carry on all or substantially all of its
business or is unable to pay its debts within the meaning of Section 123(1)(e)
or Section 123(2) of the Insolvency Act 1986; or  (f)
Bankruptcy: the Issuer is adjudged bankrupt or insolvent by a court of
competent jurisdiction in its country of incorporation.  provided
that in the case of [paragraphs (b) to (f)]1 [paragraph (b)]2
the Trustee shall have certified that in its opinion such event is materially
prejudicial to the interests of the Instrumentholders.  Any
such notice by the Trustee to the Issuer shall specify the serial number(s) of
the Instrument(s) concerned.  9.
ENFORCEMENT  The
Trustee may, at its discretion and without further notice, institute such
proceedings against the Issuer as it may think fit to enforce any obligation,
condition or provision binding on the Issuer under the Instruments or under the
Trust Deed, but shall not be bound to do so unless:  (a)
it has been so directed by an Extraordinary Resolution or in writing by the
holders of at least one- quarter of the principal amount of the Instruments
outstanding; and  (b)
it has been indemnified to its satisfaction.  No
Instrumentholder, Receiptholder or Couponholder shall be entitled to institute
proceedings directly against the Issuer unless the Trustee, having become bound
to proceed as specified above, fails to do so within a reasonable time and such
failure is continuing.  10.
MEETINGS OF INSTRUMENTHOLDERS, MODIFICATIONS AND SUBSTITUTION  (a)
Meetings of Instrumentholders: The Trust Deed contains provisions for convening
meetings of Instrumentholders to consider any matter affecting their interests,
including the sanctioning by Extraordinary Resolution (as defined in the Trust
Deed) of a modification of any of these Conditions or any provisions of the
Trust Deed. An Extraordinary Resolution duly passed at any such meeting shall
be binding on Instrumentholders (whether or not they were present at the
meeting at which such resolution was passed) and on all Couponholders, except
that any Extraordinary Resolution proposed, inter alia, (i) to amend the dates
of maturity or redemption of the Instruments, any Instalment Date or any date
for payment of interest on the Instruments, (ii) to reduce or cancel the
nominal amount of, or any Instalment Amount of, or any premium payable on
redemption of, the Instruments, (iii) to reduce the rate or rates of interest
in respect of the Instruments or to vary the method or basis of calculating the
rate or rates or amount of interest or the basis for calculating any Interest
Amount in respect of the Instruments, (iv) if a Minimum and/or a Maximum Rate
of Interest is shown on the face of the Instrument, to reduce any such Minimum
and/or Maximum Rate of Interest, (v) to vary any method of calculating the
Final Redemption Amount, the Early Redemption Amount or the Optional Redemption
Amount, (vi) to take any steps that as specified in this Instrument may only be
taken following approval by an Extraordinary Resolution to which the special
quorum provisions apply, and (vii) to modify the provisions concerning the
quorum required at any meeting of Instrumentholders or the majority required to
pass the Extraordinary Resolution will only be binding if passed at a meeting
of the Instrumentholders (or at any adjournment of that meeting) at which a
special quorum (as defined in the Trust Deed) is present. A resolution in
writing signed by the holders of not less than 95 per cent. in nominal amount
of the Instruments will be binding on all Instrumentholders and Couponholders.
The Issuer may convene a meeting of Instrumentholders jointly with the holders
of all other instruments issued pursuant to the Agency Agreement and not
forming a single series with the Instruments to which meeting the provisions
referred to above apply as if all such instruments formed part of the same
series, provided that the proposals to be considered at such meeting affect the
rights of the holders of the instruments of each series attending the meeting
in identical respects (save insofar as the Conditions applicable to each such
series are not identical).


(b)
Modification of the Trust Deed: The Trustee may agree, without the consent of
the Instrumentholders or Couponholders, to (i) any modification of any of the
provisions of the Trust Deed that is of a formal, minor or technical nature or
is made to correct a manifest error, and (ii) any other modification (except as
mentioned in the Trust Deed), and any waiver or authorisation of any breach or
proposed breach, of any of the provisions of the Trust Deed that is in the
opinion of the Trustee not materially prejudicial to the interests of the
Instrumentholders. Any such modification, authorisation or waiver shall be
binding on the Instrumentholders and the Couponholders and, if the Trustee so
requires, such modification shall be notified to the Instrumentholders as soon
as practicable.  (c) Substitution: The Trust Deed contains provisions permitting the
Trustee to agree, subject to such amendment of the Trust Deed and such other
conditions as the Trustee may require, but without the consent of the
Instrumentholders or the Couponholders, to the substitution of any other
company in place of the Issuer or of any previous substituted company, as
principal debtor under the Trust Deed and the Instruments. In the case of such
a substitution the Trustee may agree, without the consent of the
Instrumentholders or the Couponholders, to a change of the law governing the
Instruments, the Receipts, the Coupons, the Talons and/or the Trust Deed provided
that such change would not in the opinion of the Trustee be materially
prejudicial to the interests of the Instrumentholders.  (d)
Entitlement of the Trustee: In connection with the exercise of its functions
(including but not limited to those referred to in this Condition) the Trustee
shall have regard to the interests of the Instrumentholders as a class and
shall not have regard to the consequences of such exercise for individual
Instrumentholders or Couponholders and the Trustee shall not be entitled to
require, nor shall any Instrumentholder or Couponholder be entitled to claim,
from the Issuer any indemnification or payment in respect of any tax
consequence of any such exercise upon individual Instrumentholders or
Couponholders.  11.
REPLACEMENT OF INSTRUMENTS, RECEIPTS, COUPONS AND TALONS  If
an Instrument, Receipt, Coupon or Talon is lost, stolen, mutilated, defaced or
destroyed, it may be replaced, subject to applicable laws, listing authority
and stock exchange regulations, at the specified office of such other Paying
Agent as may from time to time be designated by the Issuer for the purpose and
notice of whose designation is given to Instrumentholders in accordance with
Condition 13 on payment by the claimant of the fees and costs incurred in connection
with that replacement and on such terms as to evidence, security and indemnity
(which may provide, inter alia, that if the allegedly lost, stolen or destroyed
Instrument, Receipt, Coupon or Talon is subsequently presented for payment or,
as the case may be, for exchange for further Coupons, there shall be paid to
the Issuer on demand the amount payable by the Issuer in respect of such
Instruments, Receipts, Coupons or further Coupons) and otherwise as the Issuer
may require. Mutilated or defaced Instruments, Receipts, Coupons or Talons must
be surrendered before replacements will be issued.  12.
FURTHER ISSUES  The
Issuer may from time to time without the consent of the Instrumentholders or
Couponholders create and issue further instruments having the same terms and
conditions as the Instruments and so that such further issue shall be
consolidated and form a single series with such Instruments. References in
these Conditions to the Instruments include (unless the context requires
otherwise) any other instruments issued pursuant to this Condition and forming
a single series with the Instruments. Any such further instruments forming a
single series with Instruments constituted by the Trust Deed or any deed
supplemental to it shall, and any other instruments may (with the consent of
the Trustee), be constituted by the Trust Deed.  The
Trust Deed contains provisions for convening a single meeting of the
Instrumentholders and the holders of instruments of other series if the Trustee
so decides.  13.
NOTICES  All
notices to the Instrumentholders will be valid if published in a daily English
language newspaper of general circulation in the United Kingdom (which is
expected to be the Financial Times). If in the opinion of the Trustee any such
publication is not practicable, notice shall be validly given if published in
another leading daily English language newspaper with general circulation in
Europe. Any such notice shall be deemed to have been given on the date of such
publication or, if published more than once or on different dates, on the first
date on which publication is made, as provided above.


Couponholders
shall be deemed for all purposes to have notice of the contents of any notice
given to the holders of Instruments in accordance with this Condition.  14.
INDEMNIFICATION OF TRUSTEE  The Trust Deed contains provisions for the indemnification of the
Trustee and for its relief from responsibility, including provisions relieving
it from any obligation to take proceedings to enforce repayment unless indemnified
to its satisfaction. The Trustee is entitled to enter into business
transactions with the Issuer or any of its subsidiary undertakings, parent
undertakings, joint ventures or associated undertakings without accounting for
any profit resulting from these transactions and to act as trustee for the
holders of any other securities by the Issuer or any of its subsidiary
undertakings, parent undertakings, joint ventures or associated undertakings.  15.
CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999  No
person shall have any right to enforce any term or condition of the Instruments
under the Contracts (Rights of Third Parties) Act 1999.  16.
GOVERNING LAW AND JURISDICTION  (a)
The Instruments and all matters arising from or connected with the Instruments
are governed by, and shall be construed in accordance with, English law.  (b)
The courts of England have exclusive jurisdiction to settle any dispute (a Dispute),
arising from or connected with the Instruments.  (c)
The Issuer agrees that the courts of England are the most appropriate and
convenient courts to settle any Dispute and, accordingly, that it will not
argue to the contrary.  (d)
Nothing in this Condition 16 prevents the Trustee or any Instrumentholder from
taking proceedings relating to a Dispute (Proceedings) in any other courts
with jurisdiction. To the extent allowed by law, the Trustee or
Instrumentholders may take concurrent Proceedings in any number of
jurisdictions.


SUMMARY
OF PROVISIONS RELATING TO THE INSTRUMENTS WHILE IN GLOBAL FORM  INITIAL ISSUE OF INSTRUMENTS  Upon the initial deposit of a Global Instrument with
a common depositary for Euroclear and Clearstream, Luxembourg (the Common
Depositary), Euroclear or Clearstream, Luxembourg will credit each subscriber
with a nominal amount of Instruments equal to the nominal amount of those
Instruments for which it has subscribed and paid.  Instruments which are initially deposited with the
Common Depositary may also be credited to the accounts of subscribers with (if
indicated in the relevant Pricing Supplement) other clearing systems through
direct or indirect accounts with Euroclear and Clearstream, Luxembourg held by
such other clearing systems. Conversely, Instruments that are initially
deposited with another clearing system may similarly be credited to the
accounts of subscribers with Euroclear, Clearstream, Luxembourg or other
clearing systems.  RELATIONSHIP OF ACCOUNTHOLDERS WITH CLEARING SYSTEMS  Each of the persons shown in the records of
Euroclear, Clearstream, Luxembourg or any other clearing system as the holder
of an Instrument represented by a Global Instrument must look solely to
Euroclear, Clearstream, Luxembourg or such clearing system (as the case may be)
for his share of each payment made by the relevant Issuer to the bearer of such
Global Instrument and in relation to all other rights arising under the Global
Instruments, subject to and in accordance with the respective rules and
procedures of Euroclear, Clearstream, Luxembourg or such clearing system (as
the case may be). Such persons shall have no claim directly against the
relevant Issuer in respect of payments due on the Instruments for so long as
the Instruments are represented by such Global Instrument and such obligations
of such Issuer will be discharged by payment to the bearer of such Global
Instrument in respect of each amount so paid.  The Trustee may call for any certificate or other
document to be issued by Euroclear, Clearstream, Luxembourg or any other
clearing system as to the principal amount of Instruments represented by a
Global Instrument standing to the account of any person. Any such certificate
or other document shall, in the absence of manifest error, be conclusive and
binding for all purposes. Any such certificate or other document may comprise
any form of statement or print out of electronic records provided by the
relevant clearing system (including Euroclears EUCLID or Clearstream,
Luxembourgs Cedcom system) in accordance with its usual procedures and in
which the holder of a particular principal amount of any other clearing system
is clearly identified together with the amount of such holding. The Trustee
shall not be liable to any person by reason of having accepted as valid or not
having rejected any certificate or other document to such effect purporting to
be issued by Euroclear, Clearstream, Luxembourg or any other clearing system
and subsequently found to be forged or not authentic.  EXCHANGE  1. Temporary Global Instruments  Each temporary Global Instrument will be
exchangeable, free of charge to the holder, on or after its Exchange Date:  1.1 if the relevant Pricing Supplement indicates that
such Global Instrument is issued in compliance with the C Rules or in a
transaction to which TEFRA is not applicable (as to which, see Summary of the
Programme ö Selling Restrictions), in whole, but not in part, for the
Definitive Instruments defined and described below; and  1.2 otherwise, in whole or in part upon certification
as to non-U.S. beneficial ownership in the form set out in the Agency Agreement
for interests in a permanent Global Instrument or, if so provided in the
relevant Pricing Supplement, for Definitive Instruments.  2. Permanent Global Instruments  Each permanent Global Instrument will be
exchangeable, free of charge to the holder, on or after its Exchange Date in
whole but not, except as provided under Partial Exchange of Permanent Global
Instruments, in part for Definitive Instruments:


2.1 by the relevant Issuer giving notice to the
Issuing and Paying Agent and the Instrumentholders of its intention to effect
such exchange;  2.2 if the relevant Pricing Supplement provides that
such Global Instrument is exchangeable at the request of the holder, by the holder
giving notice to the Issuing and Paying Agent of its election for such
exchange; and  2.3 otherwise, if the permanent Global Instrument is
held on behalf of Euroclear or Clearstream, Luxembourg or any other clearing
system (an Alternative Clearing System) and any such clearing system is
closed for business for a continuous period of 14 days (other than by reason of
holidays, statutory or otherwise) or announces an intention permanently to
cease business or in fact does so.  3. Partial Exchange of Permanent Global Instruments  For so long as a permanent Global Instrument is held
on behalf of a clearing system and the rules of that clearing system
permit, such permanent Global Instrument will be exchangeable in part on one or
more occasions for Definitive Instruments (i) if principal in respect of
any Instruments is not paid when due or (ii) if so provided in, and in
accordance with, the Conditions (which will be set out in the relevant Pricing
Supplement) relating to Partly Paid Instruments.  4. Delivery of Instruments  On or after any due date for exchange the holder of a
Global Instrument may surrender such Global Instrument or, in the case of a
partial exchange, present it for endorsement to or to the order of the Issuing
and Paying Agent. In exchange for any Global Instrument, or the part of that
Global Instrument to be exchanged, the relevant Issuer will (i) in the
case of a temporary Global Instrument exchangeable for a permanent Global
Instrument, deliver, or procure the delivery of, a permanent Global Instrument
in an aggregate nominal amount equal to that of the whole or that part of a
temporary Global Instrument that is being exchanged or, in the case of a
subsequent exchange, endorse, or procure the endorsement of, a permanent Global
Instrument to reflect such exchange or (ii) in the case of a Global
Instrument exchangeable for Definitive Instruments, deliver, or procure the
delivery of, an equal aggregate nominal amount of duly executed and
authenticated Definitive Instruments. In this Information Memorandum, Definitive
Instruments means, in relation to any Global Instrument, the Definitive
Instruments for which such Global Instrument may be exchanged (if appropriate,
having attached to them all Coupons and Receipts in respect of interest or Instalment
Amounts that have not already been paid on the Global Instrument and a Talon).
Definitive Instruments will be security printed in accordance with any
applicable legal and stock exchange requirements in or substantially in the
form set out in the Schedules to the Trust Deed. On exchange in full of each
permanent Global Instrument, the relevant Issuer will, if the holder so
requests, procure that it is cancelled and returned to the holder together with
the relevant Definitive Instruments.  5. Exchange Date  Exchange Date means, in relation to a temporary
Global Instrument, the day falling after the expiry of 40 days after its issue
date and, in relation to a permanent Global Instrument, a day falling not less
than 60 days, or in the case of failure to pay principal in respect of any
Instruments when due 30 days, after that on which the notice requiring exchange
is given and on which banks are open for business in the city in which the
specified office of the Issuing and Paying Agent is located and in the city in
which the relevant clearing system is located.  Amendment to Conditions  The temporary Global Instruments and permanent Global
Instruments contain provisions that apply to the Instruments which they
represent, some of which modify the effect of the terms and conditions of the
Instruments set out in this Information Memorandum. The following is a summary
of certain of those provisions:  6. Payments  No payment falling due after the Exchange Date will
be made on any Global Instrument unless exchange for an interest in a permanent
Global Instrument or for Definitive Instruments is improperly withheld or
refused. Payments on any temporary Global Instrument issued in compliance with
the D Rules before the Exchange Date will only be made against presentation
of certification as to non-U.S. beneficial ownership in the form set out in the
Agency Agreement.


All payments in respect of Instruments
represented by a Global Instrument will be made against presentation for
endorsement and, if no further payment falls to be made in respect of the
Instruments, surrender of that Global Instrument to or to the order of the
Issuing and Paying Agent or such other Paying Agent as shall have been notified
to the Instrumentholders for such purpose. A record of each payment so made
will be endorsed on each Global Instrument, which endorsement will be prima
facie evidence that such payment has been made in respect of the Instruments.  7. Prescription  Claims against the relevant Issuer in respect of
Instruments which are represented by a permanent Global Instrument will become
void unless it is presented for payment within a period of 10 years (in the
case of principal) and five years (in the case of interest) from the
appropriate Relevant Date (as defined in Condition 6).  8. Meetings  The holder of a permanent Global Instrument shall
(unless such permanent Global Instrument represents only one Instrument) be
treated as being two persons for the purposes of any quorum requirements of a
meeting of Instrumentholders and, at any such meeting, as having one vote in
respect of each minimum Specified Denomination of Instruments for which such
Global Instrument may be exchanged.  9. Cancellation  Cancellation of any Instrument represented by a
permanent Global Instrument which is required by the Conditions to be cancelled
(other than upon its redemption) will be effected by reduction in the nominal
amount of the relevant permanent Global Instrument.  10. Purchase  Instruments represented by a permanent Global
Instrument may only be purchased by the relevant Issuer or any of its
subsidiary undertakings if they are purchased together with the rights to
receive all future payments of interest and Instalment Amounts (if any) on
those Instruments.  11. Issuers Option  Any option of the relevant Issuer provided for in the
Conditions of any Instruments while such Instruments are represented by a
permanent Global Instrument shall be exercised by such Issuer giving notice to
the Instrumentholders within the time limits set out in and containing the
information required by the Conditions, except that the notice shall not be
required to contain the serial numbers of Instruments drawn in the case of a
partial exercise of an option and accordingly no drawing of Instruments shall
be required. In the event that any option of such Issuer is exercised in
respect of some but not all of the Instruments of any Series, the rights of
accountholders with a clearing system or Approved Intermediary in respect of
the Instruments will be governed by the standard procedures of Euroclear,
Clearstream, Luxembourg or any other clearing system (as the case may be).  12. Instrumentholders Options  Any option of the Instrumentholders provided for in
the Conditions of any Instruments while such Instruments are represented by a
permanent Global Instrument may be exercised by the holder of the permanent
Global Instrument giving notice to the Issuing and Paying Agent within the time
limits relating to the deposit of Instruments with a Paying Agent set out in
the Conditions substantially in the form of the notice available from any
Paying Agent, except that the notice shall not be required to contain the
serial numbers of the Instruments in respect of which the option has been
exercised, and stating the nominal amount of Instruments in respect of which
the option is exercised and at the same time presenting the permanent Global
Instrument for notation.


13. Trustees Powers  In considering the interests of Instrumentholders
while any Global Instrument is held on behalf of a clearing system, the Trustee
may have regard to any information provided to it by such clearing system or
its operator as to the identity (either individually or by category) of its
accountholders with entitlements to such Global Instrument and may consider
such interests as if such accountholders were the holders of the Instruments
represented by such Global Instrument.  14. Events of Default  Each Global Instrument provides that the
Trustee, at its discretion, may, and if so requested by holders of at least
one-quarter in nominal amount of the Instruments then outstanding or if so
directed by an Extraordinary Resolution, shall cause such Global Instrument, or
a portion of it, to become due and repayable in the circumstances described in
Condition 8 by stating in the notice to the relevant Issuer the principal
amount of such Global Instrument which is becoming due and repayable. If
principal in respect of any Instrument is not paid when due, only the Trustee
may enforce the rights of the Instrumentholders against such Issuer under the
terms of the Trust Deed unless the Trustee, having become bound to proceed,
fails to do so within a reasonable time and such failure is continuing.  15. Notices  So long as any Instruments are represented by a
Global Instrument and such Global Instrument is held on behalf of a clearing
system, notices to the holders of Instruments of that Series may be given
by delivery of the relevant notice to that clearing system for communication by
it to entitled accountholders in substitution for publication as required by
the Conditions or by delivery of the relevant notice to the holder of the
Global Instrument.  16. Partly Paid Instruments  The provisions relating to Partly Paid Instruments
are not set out in this Information Memorandum, but will be contained in the
relevant Pricing Supplement and so in the Global Instruments. While any
instalments of the subscription moneys due from the holder of Partly Paid
Instruments are overdue, no interest in a Global Instrument representing such Instruments
may be exchanged for an interest in a permanent Global Instrument or for
Definitive Instruments (as the case may be). If any Instrumentholder fails to
pay any instalment due on any Partly Paid Instruments within the time
specified, the relevant Issuer may forfeit such Instruments and shall have no
further obligation to their holder in respect of them.  17. Contract (Rights of Third Parties) Act 1999  No person shall have any right to enforce any term or
condition of the Instruments under the Contracts (Rights of Third Parties) Act
1999.


USE OF PROCEEDS  The net proceeds of the issue of each Series of
Instruments will be used by the relevant Issuer for its general corporate
purposes.


TRANSCO HOLDINGS PLC  INCORPORATION AND BUSINESSES  Transco Holdings is the holding company for Transco,
the developer and operator of the substantial majority of Great Britains gas
transportation system, which is regulated as a monopoly service provider to gas
shippers.  Transco Holdings is the parent undertaking of the
Transco Holdings Group and is an indirectly wholly- owned subsidiary
undertaking of National Grid Transco plc (NGT). Transco Holdings is
incorporated in England and Wales.  SUBSIDIARIES  The following table shows certain information on
Transco Holdings principal subsidiaries as at the date of this Information
Memorandum:  Name
  
  Country of Incorporation
  
  Transco Holdings
  Shareholding (either
  direct or indirect)British Transco Capital Inc.
  
  U.S.A. (Delaware)
  
  100
  %British Transco Finance (No. 1) Limited
  
  Cayman Islands
  
  100
  %British Transco Finance (No. 2) Limited
  
  Cayman Islands
  
  100
  %British Transco Finance (No. 3) Limited
  
  England & Wales
  
  100
  %British Transco Finance (No. 5) Limited
  
  England& Wales
  
  100
  %British Transco Finance Inc.
  
  U.S.A. (Delaware)
  
  100
  %British Transco International Finance B.V.
  
  The Netherlands
  
  100
  %C4Gas SA
  
  Belgium
  
  47.5
  %Joint Radio Company Limited
  
  England & Wales
  
  50
  %Transco plc
  
  England & Wales
  
  100
  %Transco Metering Services Limited
  
  England & Wales
  
  100
  %


DIRECTORS  The Directors of Transco Holdings and their principal
activities outside the Transco Holdings Group are as follows:  Name
  
  Principal
  Occupation
  
  Principal Activities outside
  Transco HoldingsColin Buck
  
  Director
  
  Finance Director of Transco plcStephen Charles Burrard-Lucas
  
  Director
  
  Group Finance Director of National Grid Transco plc and a director of
  National Grid Company plc, Transco plc, Lattice Group plc, Lattice Group
  Holdings Ltd and National Grid USAMalcolm Charles Cooper
  
  Director
  
  Group Treasurer of National Grid Transco plc and a director of British
  Transco Capital Inc., British Transco Finance Inc, British Transco
  International Finance BV, Lattice Group Holdings Ltd, Lattice Group International
  Holdings Ltd, National Grid Investment Co Ltd, NGT Insurance Co (Guernsey)
  Ltd and Telecom International Holdings LtdMark Robert Fairbairn
  
  Director
  
  Chief Operating Officer of Transco plcSteven John Holliday
  
  Director
  
  Group Director of National Grid Transco plc, Chief Executive Officer
  of Transco plc and a director of Lattice Group plc, National Grid Company
  plc, National Grid USA and NGT UK Ltd  The business address of the Directors of Transco
Holdings is 1-3 Strand, London WC2N 5EH.  REGULATORY FRAMEWORK  The supply, transportation and shipping of gas in
Britain are the subject of the licensing and regulatory regime of the Gas Act
1986 (the Gas Act) and the Utilities Act 2000 (the Utilities Act) and are
regulated by the Gas and Electricity Markets Authority established by the
Utilities Act. In addition, the Health and Safety Executive regulates safety
matters relating to the operation of the gas transportation system and the
liquefied natural gas storage business.  Transco is authorised to transport gas under the
terms of its licence. Pursuant to the Gas Act, Transco is obliged to develop
and maintain an efficient and economical pipeline system for the conveyance of
gas in its authorised area and to comply, so far as it is economical to do so,
with reasonable requests to connect to the system and convey gas by means of
that system to any premises or pipeline system. The Gas Act and the licence
also place duties on Transco to avoid undue discrimination or undue preference
in the connection of premises or other pipelines or in the terms on which it
undertakes the conveyance of gas.  The conditions of the licence can only be changed in
accordance with the mechanisms set out in the Gas Act. The licence is
terminable on ten years notice (or earlier in the event of material default)
by the Secretary of State, such notice not to be served earlier than 22 August 2011.
It is also revocable by the Gas and Electricity Markets Authority on certain
events, including if Transco fails to comply with certain orders made under the
Gas Act or competition legislation or in the event of certain circumstances of
financial default.  The licence also contains special ring-fence
conditions. These conditions include requirements on Transco to: carry on only
certain activities; ensure that it has sufficient management and financial
resources to carry out its business; use reasonable endeavours to maintain an
investment grade credit rating as the issuer of corporate debt; and deal on an
arms length basis and on normal commercial terms with other companies in the
NGT Group and not to give new guarantees for such companies. If Transco is in
material default of any of the ring-fence conditions, it is prohibited from
declaring and paying a dividend. In October 2002 Ofgem consented to
Transco making loans to Transco Holdings. Transco Holdings is now subject to a
number of licence conditions as if it were Transco. These include restrictions
on loans to affiliates and related parties and a restriction on its activities
to those permitted to be carried out by Transco and to acting as Transcos
holding company.  In enforcing the conditions of the licence and other
obligations imposed by the Gas Act, the Gas and Electricity Markets Authority
can make legally enforceable orders, which may include monetary penalties. In
addition, the Gas


Act enables the Gas and Electricity Markets Authority
to levy financial penalties on licensees for contravening any licence condition
or relevant requirement of the Gas Act or Utilities Act or for failure to meet
guaranteed standards of service.  Transcos customers comprise approximately 70 active shippers
for whom it transports gas from the national transmission system through the
distribution system to around 21 million consumers.  The level of revenue that may be received from the
supply of transmission and distribution services is set out in Transcos five
year price control determined by the Gas and Electricity Markets Authority and
either agreed by Transco or, in the event of referral, by the Competition
Commission. The current price control regime, which was originally expected to
run for five years from 1 April 2002, has recently been extended by
another year for distribution. The price control regime takes into account,
among other factors, an assessment of Transcos operating costs, capital
expenditure, cost of capital at a real pre-tax rate of 6.25 per cent. and
transportation volumes.  RECENT DEVELOPMENTS  Plans for the possible sale of up to four of Transcos
regional distribution networks have progressed steadily over the past year.
Transco may sell up to four networks, if this maximises shareholder value.
Transco remains committed to a substantial gas distribution business in Britain
and will continue to be the largest operator of gas distribution assets in the
country. Transco expects to announce the results of this process later this
summer. Any sales would not complete until 2005.  With effect from 1 April 2004 Transcos
distribution price control formula was split into eight separate price
controls: one for each regional network. Each network price control formula
takes the same form as the previous single price control formula, with a
maximum allowed revenue assigned to each network. Each network has been
allocated a regulatory value associated with its assets, using an estimate of
Transcos distribution business regulatory value as at 1 April 2002. The
networks price control formulae also incorporate the same cost of capital
assumptions at a real pre-tax rate of 6.25 per cent.  Over the last year and as part of its consultations
concerning network monopoly price controls and the electricity distribution
price review, Ofgem has proposed changes to the regulatory framework that
applies to all energy network monopolies, including Transco. Proposed
developments include the introduction of a five year retention of benefits from
savings in operating costs, capital expenditure efficiencies and asset
disposals, irrespective of when they occur during a price control period (currently,
the benefits of cost saving initiatives are returned to customers when a price
control is reset). In respect of pension costs, Ofgem has indicated that it
sees these as a normal operating cost of the business. Furthermore, for Transco
Ofgem has suggested that, with effect from 1 April 2002, any efficiently
incurred over or underfunding of pension schemes as compared to those
assumptions made by Ofgem when price controls were set, will ultimately be
passed to consumers. It is expected that the details of how this mechanism will
work, together with any adjustments that Ofgem may wish to make in respect of
historic pensions issues, will be clarified later in 2004.


CAPITALISATION AND INDEBTEDNESS OF THE TRANSCO HOLDINGS
GROUP  The following table sets out the historical cost
consolidated capitalisation and indebtedness of the Transco Holdings Group as
at 31 March 2004 extracted (without material adjustment) from the audited
accounts of the Transco Holdings Group for the 12 months ended 31 March 2004:  £ (in millions)Shareholders
  equityOrdinary
  shares of £1 each (6,491 million authorised, 147 million allotted and fully
  paid)
  
  147Other
  reserves
  
  (5,537
  )Profit and
  loss account
  
  3,579Equity
  shareholders (deficits)/funds
  
  (1,811
  )Total
  shareholders equity
  
  (1,811
  )Indebtedness
  for borrowed moneyBank loans
  and overdrafts
  
  100Commercial
  paper
  
  202Bonds
  
  494Borrowings
  from fellow subsidiary undertakings
  
  173Other loans
  
  19Total
  short-term debt
  
  988Long-term
  debtBonds
  
  5,041Other loans
  
  20Total
  long-term debt
  
  5,061Total debt
  
  6,049Total
  capitalisation and indebtedness
  
  4,238  
 Notes:  (1) Short-term debt is unguaranteed and
unsecured.  (2) Account has been taken of liabilities and
guarantees between undertakings within the same group.  (3) Long-term debt is unguaranteed and
unsecured, except for $300 million 6.625 per cent. British Transco Finance Inc.
Guaranteed Notes due 2018, guaranteed by Transco and National Grid Transco plc.  (4) The $300 million 6 per cent. British Transco
International Finance Notes matured on 22 April 2004 and both the $300
million 6.625 per cent. British Transco International Finance Notes and $50
million 6.625 per cent. British Transco International Finance Notes matured on
22 July 2004.  (5) As at 30 June 2004, equity shareholders
deficits was £2,251 million compared to £1,811 million as at 31 March 2004.
The reduction in equity shareholders funds between 1 April 2004 and 30 June 2004
primarily reflects a dividend payment of £450 million to Transco Holdings Groups
parent company.


(6) Transco Holdings total contingent
liabilities and guarantees as at 31 March 2004 were £1,304 million.  As at 31 March 2004, Transco, a subsidiary
undertaking of Transco Holdings, had guaranteed the repayment of principal
sums, any associated premium and interest on specific loans due from its
financial subsidiary undertakings to third parties amounting to a sterling
equivalent of £1,222 million. These subsidiary borrowings are included in the
total Transco Holdings Group borrowings of £6,049 million.  As at 31 March 2004, the Transco Holdings Group
had outstanding commitments and contingencies relating to BG Group plc and its
subsidiaries and its subsidiary undertakings (together, the BG Group)
amounting to £13 million, arising from the restructuring of BG Group in 1999.
BG Group has been working with the Transco Holdings Group since early 1999 to
remove all the relevant guarantees or to find an alternative guarantor which is
not part of the Transco Holdings Group. For any guarantees that have not been
replaced, the Transco Holdings Group will continue to provide such guarantees
on an arms length basis until they are removed or replaced.  The value of other Transco Holdings Group commitments
and contingencies at 31 March 2004 amounted to £69 million, including a
performance guarantee of £24 million relating to certain property obligations
of an undertaking which is a member of the group of companies comprising NGT
and its subsidiaries and its subsidiary undertakings (the NGT Group).  (7) There has been no material change in the
consolidated capitalisation and indebtedness, contingent liabilities and
guarantees of the Transco Holdings Group since 31 March 2004, except as
noted in (4) and (5) above.  (8) The Transco Holdings Group had cash and
short-term money market investments of £75 million at 31 March 2004.


TRANSCO PLC  INCORPORATION AND BUSINESSES  Transco is the developer and operator of the
substantial majority of Great Britains gas transportation system, which is
regulated as a monopoly service provider to gas shippers.  Transco is the parent undertaking of the Transco
Group and is an indirectly wholly-owned subsidiary undertaking of NGT. Transco
is incorporated in England and Wales.  SUBSIDIARIES  The following table shows certain information on
Transcos principal subsidiaries as at the date of this Information Memorandum:  Name
  
  Country of Incorporation
  
  Transcos
  Shareholding (either
  direct or indirect)British Transco Capital Inc.
  
  U.S.A. (Delaware)
  
  100
  %British Transco Finance (No. 1) Limited
  
  Cayman Islands
  
  100
  %British Transco Finance (No. 2) Limited
  
  Cayman Islands
  
  100
  %British Transco Finance (No. 3) Limited
  
  England & Wales
  
  100
  %British Transco Finance (No. 5) Limited
  
  England & Wales
  
  100
  %British Transco Finance Inc.
  
  U.S.A. (Delaware)
  
  100
  %British Transco International Finance B.V.
  
  The Netherlands
  
  100
  %C4Gas SA
  
  Belgium
  
  47.5
  %Joint Radio Company Limited
  
  England & Wales
  
  50
  %Transco Metering Services Limited
  
  England & Wales
  
  100
  %  DIRECTORS  The Directors of Transco and their principal
activities outside the Transco Group are as follows:  Name
  
  Principal
  Occupation
  
  Principal Activities outside
  TranscoColin Buck
  
  Finance Director
  
  Director of Transco Holdings plcStephen Charles Burrard-Lucas
  
  Executive Director
  
  Group Finance Director of National Grid Transco plc and a director of
  National Grid Company plc, Transco Holdings plc, Lattice Group plc, Lattice
  Group Holdings Ltd and National Grid USAMark Robert Fairbairn
  
  Chief Operating Officer
  
  Director of Transco Holdings plcSteven John Holliday
  
  Chief Executive
  
  Group Director of National Grid Transco plc and a director of Lattice
  Group plc, National Grid Company plc, National Grid USA, Transco Holdings plc
  and NGT UK Ltd


James OSullivan
  
  Director of Quality Assurance
  
  NoneRoger John Urwin
  
  Chairman
  
  Group Chief Executive of National Grid Transco plc and a director of
  National Grid Company plc. Non-executive director of The Special Utilities
  Investment Trust plc and Utilico Investment Trust plcNicholas Paul Winser
  
  Executive Director
  
  Group Director of National Grid Transco plc and a director of Gridcom
  (UK) Ltd, NGT UK Ltd, National Grid Company plc and National Grid USA  The business address of the Directors of Transco is 1-3
Strand, London WC2N 5EH.  REGULATORY FRAMEWORK  The supply, transportation and shipping of gas in
Britain are the subject of the licensing and regulatory regime of the Gas Act
and the Utilities Act and are regulated by the Gas and Electricity Markets
Authority established by the Utilities Act. In addition, the Health and Safety
Executive regulates safety matters relating to the operation of the gas
transportation system and the liquefied natural gas storage business.  Transco is authorised to transport gas under the
terms of its licence. Pursuant to the Gas Act, Transco is obliged to develop
and maintain an efficient and economical pipeline system for the conveyance of
gas in its authorised area and to comply, so far as it is economical to do so,
with reasonable requests to connect to the system and convey gas by means of
that system to any premises or pipeline system. The Gas Act and the licence
also place duties on Transco to avoid undue discrimination or undue preference
in the connection of premises or other pipelines or in the terms on which it
undertakes the conveyance of gas.  The conditions of the licence can only be changed in
accordance with the mechanisms set out in the Gas Act. The licence is
terminable on ten years notice (or earlier in the event of material default)
by the Secretary of State, such notice not to be served earlier than 22 August 2011.
It is also revocable by the Gas and Electricity Markets Authority on certain
events, including if Transco fails to comply with certain orders made under the
Gas Act or competition legislation or in the event of certain circumstances of
financial default.  The licence also contains special ring-fence
conditions. These conditions include requirements on Transco to: carry on only
certain activities; ensure that it has sufficient management and financial
resources to carry out its business; use reasonable endeavours to maintain an
investment grade credit rating as the issuer of corporate debt; and deal on an
arms length basis and on normal commercial terms with other companies in the
NGT Group and not to give new guarantees for such companies. If Transco is in
material default of any of the ring-fence conditions, it is prohibited from
declaring and paying a dividend. In October 2002 Ofgem consented to
Transco making loans to Transco Holdings. Transco Holdings is now subject to a
number of licence conditions as if it were Transco. These include restrictions
on loans to affiliates and related parties and a restriction on its activities
to those permitted to be carried out by Transco and to acting as Transcos
holding company.  In enforcing the conditions of the licence and other
obligations imposed by the Gas Act, the Gas and Electricity Markets Authority
can make legally enforceable orders, which may include monetary penalties. In
addition, the Gas Act enables the Gas and Electricity Markets Authority to levy
financial penalties on licensees for contravening any licence condition or
relevant requirement of the Gas Act or Utilities Act or for failure to meet
guaranteed standards of service.  Transcos customers comprise approximately 70 active shippers
for whom it transports gas from the national transmission system through the
distribution system to around 21 million consumers.


The level of revenue that may be received from the
supply of transmission and distribution services is set out in Transcos five
year price control determined by the Gas and Electricity Markets Authority and
either agreed by Transco or, in the event of referral, by the Competition
Commission. The current price control regime, which was originally expected to
run for five years from 1 April 2002, has recently been extended by
another year for distribution. The price control regime takes into account,
among other factors, an assessment of Transcos operating costs, capital
expenditure, cost of capital at a real pre-tax rate of 6.25 per cent. and
transportation volumes.  RECENT DEVELOPMENTS  Plans for the possible sale of up to four of Transcos
regional distribution networks have progressed steadily over the past year.
Transco may sell up to four networks, if this maximises shareholder value.
Transco remains committed to a substantial gas distribution business in Britain
and will continue to be the largest operator of gas distribution assets in the
country. Transco expects to announce the results of this process later this
summer. Any sales would not complete until 2005.  With effect from 1 April 2004 Transcos
distribution price control formula was split into eight separate price
controls: one for each regional network. Each network price control formula
takes the same form as the previous single price control formula, with a
maximum allowed revenue assigned to each network. Each network has been
allocated a regulatory value associated with its assets, using an estimate of
Transcos distribution business regulatory value as at 1 April 2002. The
networks price control formulae also incorporate the same cost of capital
assumptions at a real pre-tax rate of 6.25 per cent.  Over the last year and as part of its consultations
concerning network monopoly price controls and the electricity distribution
price review, Ofgem has proposed changes to the regulatory framework that
applies to all energy network monopolies, including Transco. Proposed
developments include the introduction of a five year retention of benefits from
savings in operating costs, capital expenditure efficiencies and asset
disposals, irrespective of when they occur during a price control period
(currently, the benefits of cost saving initiatives are returned to customers
when a price control is reset). In respect of pension costs, Ofgem has
indicated that it sees these as a normal operating cost of the business.
Furthermore, for Transco Ofgem has suggested that, with effect from 1 April 2002,
any efficiently incurred over or underfunding of pension schemes as compared to
those assumptions made by Ofgem when price controls were set, will ultimately
be passed to consumers. It is expected that the details of how this mechanism
will work, together with any adjustments that Ofgem may wish to make in respect
of historic pensions issues, will be clarified later in 2004.


CAPITALISATION
AND INDEBTEDNESS OF THE TRANSCO GROUP  The following table sets out the historical cost
consolidated capitalisation and indebtedness of the Transco Group as at 31 March 2004
extracted (without material adjustment) from the audited accounts of the
Transco Group for the 12 months ended 31 March 2004:  £ (in millions)Shareholders
  equityOrdinary
  shares of 1 and 2/15p each (6,052 million authorised, 3,944 million allotted
  and fully paid)
  
  45Share
  premium account
  
  204Capital
  redemption reserve
  
  1,332Profit and
  loss account
  
  556Equity
  shareholders interest funds
  
  2,137Total
  shareholders equity
  
  2,137Indebtedness
  for borrowed moneyShort-term
  debtBank loans
  and overdrafts
  
  100Commercial
  paper
  
  202Bonds
  
  494Borrowings
  from fellow subsidiary undertakings
  
  490Other loans
  
  19Total
  short-term debt
  
  1,305Long-term
  debtBonds
  
  3,616Other loans
  
  20Total
  long-term debt
  
  3,636Total debt
  
  4,941Total capitalisation
  and indebtedness
  
  7,078  
 Notes:  (1) Short-term debt is unguaranteed and
unsecured.  (2) Account has been taken of liabilities and
guarantees between undertakings within the same group.  (3) Long-term debt is unguaranteed and
unsecured, except for a £200 million European Investment Bank Loan due 2012,
guaranteed by Transco Holdings, and $300 million 6.625 per cent. British
Transco Finance Inc. Guaranteed Notes due 2018, guaranteed by Transco and
National Grid Transco plc.  (4) The $300 million 6 per cent. British Transco
International Finance Notes matured on 22 April 2004 and both the $300
million 6.625 per cent. British Transco International Finance Notes and the $50
million 6.625 per cent. British Transco International Finance Notes matured on
22 July 2004.  (5) As at 30 June 2004, equity shareholders
interest funds was £1,665 million compared to £2,137 million as at 31 March 2004.
The reduction in equity shareholders funds between 1 April 2004 and 30 June 2004
primarily reflects a dividend payment of £500 million to Transco Groups parent
company.  (6) Transcos total contingent liabilities and
guarantees as at 31 March 2004 were £1,304 million.  As at 31 March 2004, Transco had guaranteed the
repayment of principal sums, any associated premium and interest on specific
loans due from its financial subsidiary undertakings to third parties amounting
to a sterling equivalent of £1,222 million. These subsidiary borrowings are
included in the total Transco Group borrowings of £4,941 million.  As at 31 March 2004, Transco had outstanding BG
Group related commitments and contingencies amounting to £13 million, arising
from the restructuring of BG Group in 1999. BG Group has been working with the
Transco Group since early 1999 to remove all the relevant guarantees or to find
an alternative guarantor which is not part of the Transco Group. For any
guarantees that have not been replaced, the Transco Group will continue to
provide such guarantees on an arms length basis until they are removed or
replaced.  The value of other Transco Group commitments and
contingencies at 31 March 2004 amounted to £69 million, including a
performance guarantee of £24 million relating to certain property obligations
of a NGT Group undertaking.


(7) There has been no material change in the
consolidated capitalisation and indebtedness, contingent liabilities and
guarantees of the Transco Group since 31 March 2004, except as noted in (4) and
(5) above.  (8) The Transco Group had cash and short-term
money market investments of £75 million at 31 March 2004.


UNITED KINGDOM TAXATION  The following is a summary of the United Kingdom
withholding taxation treatment at the date hereof in relation to payments of
principal and interest in respect of the Instruments. The comments do not deal
with other United Kingdom tax aspects of acquiring, holding or disposing of
Instruments. The comments relate only to the position of persons who are
absolute beneficial owners of the Instruments. Prospective Instrumentholders
should be aware that the particular terms of issue of any series of Instruments
as specified in the relevant Pricing Supplement may affect the tax treatment of
that and other series of Instruments. The following is a general guide and
should be treated with appropriate caution. Instrumentholders who are in any
doubt as to their tax position should consult their professional advisers.
Instrumentholders who may be liable to taxation in jurisdictions other than the
United Kingdom in respect of their acquisition, holding or disposal of the
Instruments are particularly advised to consult their professional advisers as
to whether they are so liable (and if so under the laws of which
jurisdictions), since the following comments relate only to certain United
Kingdom taxation aspects of payments in respect of the Instruments. In
particular, Instrumentholders should be aware that they may be liable to
taxation under the laws of other jurisdictions in relation to payments in
respect of the Instruments even if such payments may be made without
withholding or deduction for or on account of taxation under the laws of the
United Kingdom.  A. UK WITHHOLDING TAX ON UK SOURCE INTEREST  1. The Instruments issued by an Issuer which carry a
right to interest (UK Instruments) will constitute quoted Eurobonds
provided they are and continue to be listed on a recognised stock exchange
within the meaning of section 841 of the Income and Corporation Taxes Act
1988. On the basis of the United Kingdom Inland Revenues published
interpretation of the relevant legislation, securities which are to be listed
on a stock exchange in a country which is a member state of the European Union
or which is part of the European Economic Area will satisfy this requirement if
they are listed by a competent authority in that country and are admitted to
trading on a recognised stock exchange in that country; securities which are to
be listed on a stock exchange in any other country will satisfy this
requirement if they are admitted to trading on a recognised stock exchange in
that country. The London Stock Exchange is a recognised stock exchange for
these purposes. Whilst the UK Instruments are and continue to be quoted
Eurobonds, payments of interest on the UK Instruments may be made without
withholding or deduction for or on account of United Kingdom income tax.  2. Interest payable on Instruments with a maturity
date of less than one year from the date of issue and which are not issued
under arrangements the effect of which is to render such Instruments part of a
borrowing with a total term of a year or more can be paid without withholding
or deduction for or on account of United Kingdom income tax.  3. In all cases falling outside the exemption
described in A.1 or A.2 above, interest on the UK Instruments will generally fall
to be paid under deduction of United Kingdom income tax at the lower rate
(currently 20 per cent.) subject to the availability of other reliefs or to any
direction to the contrary from the Inland Revenue in respect of such relief as
may be available under the provisions of any applicable double taxation treaty.  B. PROVISION OF INFORMATION  Instrumentholders should note that where any interest
on Instruments or amounts due on redemption of any Instruments which constitute
relevant discounted securities as defined in Schedule 13 to the Finance
Act 1996 is paid to them (or to any person acting on their behalf) by the
relevant Issuer or any person in the United Kingdom acting on behalf of such
Issuer (a paying agent), or is received by any person in the United Kingdom
acting on behalf of the relevant Instrumentholder (other than solely by
clearing or arranging the clearing of a cheque) (a collecting agent), then
the relevant Issuer, the paying agent or the collecting agent (as the case may
be) may, in certain cases, be required to supply to the United Kingdom Inland
Revenue details of the payment and certain details relating to the
Instrumentholder (including the Instrumentholders name and address). These
provisions will apply whether or not the interest has been paid subject to
withholding or deduction for or on account of United Kingdom income tax and
whether or not the Instrumentholder is resident in the United Kingdom for
United Kingdom taxation purposes. Where the Instrumentholder is not so resident,
the details provided to the United Kingdom Inland Revenue may, in certain
cases, be passed by the United Kingdom Inland Revenue to the tax authorities of
the jurisdiction in which the Instrumentholder is resident for taxation
purposes.


EU Savings Directive  On 3 June 2003 the EU Council of Economic and
Finance Ministers adopted a new directive regarding the taxation of savings
income. The directive is scheduled to be applied by Member States from 1 July 2005,
provided that certain non-EU countries adopt similar measures from the same
date. Under the directive each Member State will be required to provide to the
tax authorities of another Member State details of payments of interest or
other similar income paid by a person within its jurisdiction to, or collected
by such a person for, an individual resident in that other Member State;
however, Austria, Belgium and Luxembourg may instead apply a withholding system
for a transitional period in relation to such payments, deducting tax at rates
rising over time to 35 per cent. The transitional period is to commence on the
date from which the directive is to be applied by Member States and to
terminate at the end of the first full fiscal year following agreement by
certain non-EU countries to the exchange of information relating to such
payments. Holders of Instruments who are individuals should note no additional
amounts would be payable under Condition 6 in respect of any withholding tax
imposed pursuant to this directive  C. OTHER RULES RELATING TO UNITED KINGDOM WITHHOLDING
TAX  1. Instruments may be issued at an issue price of
less than 100 per cent. of their principal amount. Any discount element on any
such Instruments should not be subject to any United Kingdom withholding tax
pursuant to the provisions mentioned in A above, but may be subject to
reporting requirements as outlined in B above.  2. Where Instruments are to be, or may fall to be,
redeemed at a premium, as opposed to being issued at a discount, then any such
element of premium may constitute a payment of interest. Payments of interest
are subject to United Kingdom withholding tax and may be subject to the
reporting requirements as outlined above.  3. Where interest has been paid under deduction of
United Kingdom income tax, Instrumentholders who are not resident in the United
Kingdom may be able to recover all or part of the tax deducted if there is an
appropriate provision in any applicable double taxation treaty.  4. The references to interest above mean interest
as understood in United Kingdom tax law. The statements above do not take any
account of any different definitions of interest or principal which may
prevail under any other law or which may be created by the terms and conditions
of the Instruments or any related documentation.  5. The above description of the United Kingdom
withholding tax position assumes that there will be no substitution of an
issuer pursuant to Condition 10(c) of the Instruments and does not
consider the tax consequences of any such substitution.


PLAN OF DISTRIBUTION  SUMMARY OF AGREEMENT  Subject to the terms and on the conditions contained
in an Amended and Restated Dealer Agreement dated 23 July 2004 between the
Issuers, the Permanent Dealers and the Arranger (the Dealer Agreement), the
Instruments will be offered on a continuous basis by each of the Issuers to the
Permanent Dealers. However, each of the Issuers has reserved the right to issue
Instruments directly on its own behalf to dealers which are not Permanent
Dealers. The Instruments may also be issued by each of the Issuers through the
Dealers, acting as agents of the relevant Issuer. The Dealer Agreement also
provides for Instruments to be issued in syndicated Tranches which are jointly
and severally underwritten by two or more Dealers. The commissions in respect
of an issue of Instruments on a syndicated basis will be stated in the relevant
Pricing Supplement. The Issuers have agreed to reimburse the Arranger for
certain of its expenses incurred in connection with the establishment of the Programme.
Each of the Issuers has agreed to indemnify the Dealers against certain
liabilities in connection with the offer and sale of the Instruments.  SELLING RESTRICTIONS  United States  The Instruments have not been and will not be
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 or to, or for the
account or benefit of, U.S. persons except in certain transactions exempt from
the registration requirements of the Securities Act. Terms used in this
paragraph have the meanings given to them by Regulation S under the Securities
Act.  Instruments in bearer form having a maturity of more
than one year are subject to U.S. tax law requirements and may not be offered,
sold or delivered within the United States or its possessions or to a U.S.
person, except in certain transactions permitted by U.S. tax regulations. Terms
used in this paragraph have the meanings given to them by the U.S. Internal
Revenue Code and regulations under it.  Each Dealer has agreed that, except as permitted by
the Dealer Agreement, it will not offer, sell or deliver the Instruments of any
identifiable Tranche, (i) as part of their distribution at any time or (ii) otherwise
until 40 days after completion of the distribution of such Tranche as
determined, and certified to the relevant Issuer, by the Issuing and Paying
Agent, or in the case of Instruments issued on a syndicated basis, the Lead
Manager, within the United States or to, or for the account or benefit of, U.S.
persons, and it will have sent to each dealer to which it sells Instruments
during the distribution compliance period a confirmation or other notice
setting forth the restrictions on offers and sales of the Instruments within
the United States or to, or for the account or benefit of, U.S. persons.  In addition, until 40 days after the commencement of
the offering, an offer or sale of Instruments within the United States by any
dealer (whether or not participating in the offering) may violate the
registration requirements of the Securities Act.  United Kingdom  Each Dealer has represented, warranted and agreed
that:  (a) No offer to public ö listed Instruments: in
relation to Instruments which have a maturity of one year or more and which are
to be admitted to the Official List of the UK Listing Authority, it has not
offered or sold and will not offer or sell any such Instruments to persons in
the United Kingdom prior to admission of such Instruments to listing in
accordance with Part VI of the FSMA, except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995 or the FSMA;  (b) No offer to public ö unlisted Instruments:
in relation to Instruments which have a maturity of one year or more and which
are not be admitted to the Official List of the UK Listing Authority, it has
not offered or sold and, prior to the expiry of a period of six months from the
Issue Date of such Instruments, will not offer or sell any such Instruments to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in


circumstances
which have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995;  (c) No deposit-taking: in relation to any
Instruments having a maturity of less than one year from the date of their issue:  (i) it is a person whose ordinary activities
involve it in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of its business; and  (ii) it has not offered or sold and will not
offer or sell any Instruments other than to persons:  (A) whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses; or  (B) who it is reasonable to expect will acquire,
hold, manage or dispose of investments (as principal or agent) for the purposes
of their businesses,  where the issue of the Instruments would otherwise
constitute a contravention of Section 19 of the FSMA by the relevant
Issuer;  (d) Financial promotion: it has only
communicated or caused to be communicated and it will only communicate or cause
to be communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the FSMA) received by it in
connection with the issue or sale of any Instruments in circumstances in which section 21(1) of
the FSMA does not apply to the relevant Issuer; and  (e) General compliance: it has complied and will
comply with all applicable provisions of the FSMA (and all rules and
regulations made pursuant to the FSMA) with respect to anything done by it in
relation to any Instruments in, from or otherwise involving the United Kingdom.  Japan  The Instruments have not been and will not be
registered under the Securities and Exchange Law of Japan (the Securities and
Exchange Law). Accordingly, each of the Dealers has represented, warranted and
agreed that it has not, directly or indirectly, offered or sold and will not,
directly or indirectly, offer or sell any Instruments in Japan or to, or for
the benefit of, any resident of Japan or to others for re-offering or re-sale,
directly or indirectly, in Japan or to, or for the benefit of, any resident of
Japan except pursuant to an exemption from the registration requirements of,
and otherwise in compliance with, the Securities and Exchange Law and other
relevant laws and regulations of Japan. As used in this paragraph, resident of
Japan means any person resident in Japan, including any corporation or other
entity organised under the laws of Japan.  General  These selling restrictions may be modified by the
agreement of the relevant Issuer and the Dealers following a change in a
relevant law, regulation or directive. Any such modification will be set out in
the Pricing Supplement issued in respect of the issue of Instruments to which
it relates or in a supplement to this Information Memorandum.  Other than with respect to the admission to listing,
trading and/or quotation by such one or more listing authorities, stock
exchanges and/or quotation systems as may be specified in the relevant Pricing
Supplement, no action has been or will be taken in any country or jurisdiction
by the relevant Issuer or the Dealers that would permit a public offering of
Instruments, or possession or distribution of any offering material in relation
thereto, in any country or jurisdiction where action for that purpose is
required. Persons into whose hands this Information Memorandum or any Pricing
Supplement comes are required by the Issuers and the Dealers to comply with all
applicable laws and regulations in each country or jurisdiction in or from
which they purchase, offer, sell or deliver Instruments or have in their
possession or distribute such offering material, in all cases at their own
expense.  Each Dealer has agreed that it will comply with all
relevant laws, regulations and directives in each jurisdiction in which it
purchases, offers, sells or delivers Instruments or has in its possession or
distributes this Information


Memorandum, any other offering material or any
Pricing Supplement and neither the Issuers nor any other Dealer shall have
responsibility for such material.


FORM OF PRICING SUPPLEMENT  The Pricing Supplement in respect of each Tranche of
Instruments will be substantially in the following form, duly supplemented (if
necessary), amended (if necessary) and completed to reflect the particular
terms of the relevant Instruments and their issue. Text in this section appearing
in italics does not form part of the form of the Pricing Supplement but denotes
directions for completing the Pricing Supplement.  Pricing Supplement dated [*]  [TRANSCO HOLDINGS plc/TRANSCO
plc]*  Issue of [Aggregate Nominal
Amount of Tranche] [Title of Instruments]
under the Euro 7,000,000,000 Euro Medium Term Note Programme  This document constitutes the Pricing Supplement
relating to the issue of Instruments described herein. Terms used herein shall
be deemed to be defined as such for the purposes of the Conditions set out in
the Information Memorandum dated 23 July 2004 [and the Supplemental
Information Memorandum dated [*]]. This Pricing Supplement contains the final
terms of the Instruments and must be read in conjunction with that Information
Memorandum[, as so supplemented].  [The following alternative language applies if the first
tranche of an issue which is being increased was issued under an Information
Memorandum with an earlier date.  Terms used herein shall be deemed to be defined as
such for the purposes of the Conditions (the Conditions) set forth in the
Information Memorandum dated [original date] [as supplemented by] [Supplemental
Information Memorandums dated [*]]. This Pricing Supplement contains the final
terms of the Instruments and must be read in conjunction with the Information
Memorandum dated [current date] [and the supplemental Information Memorandum
dated [*]], save in respect of the Conditions which are extracted from the
Information Memorandum dated [original date] and are attached hereto.]  [Include whichever of the following apply or specify
as Not Applicable (N/A). Note that the numbering should remain as set out
below, even if Not Applicable is indicated for individual paragraphs or sub-
paragraphs.]  1. Issuer:
  
  [Transco Holdings plc/Transco plc]*2. (i) Series Number:
  
  [*](ii) Tranche Number:
  
  [*][(If fungible with an existing Series, details of
  that Series, including the date on which the Instruments become fungible.)]3. Specified Currency or Currencies:
  
  [*]4. Aggregate Nominal Amount:(i) Series:
  
  [*](ii) [Tranche:
  
  [*]]5. (i) Issue Price:
  
  [*] per cent. of the Aggregate Nominal Amount [plus
  accrued interest from [insert date] (in the case of fungible issues only, if
  applicable)](ii) [Net proceeds:
  
  [*] (Required only for listed issues)]6. Specified Denominations:
  
  [*][*]7. (i) Issue Date:
  
  [*](ii) Interest Commencement Date:
  
  [*]8. Maturity Date:
  
  [specify date or (for Floating Rate Instruments)
  Interest Payment Date falling in or nearest to the relevant month and year](1)9. Interest Basis:
  
  [[*] per cent. Fixed Rate]
  [[specify reference rate] +/- [*] per cent. Floating Rate]


[Zero Coupon]
  [Index Linked Interest]
  [Other (specify)]
  (further particulars specified below)10. Redemption/Payment Basis:
  
  [Redemption at par]
  [Index Linked Redemption]
  [Dual Currency]
  [Partly Paid]
  [Instalment]
  [Other (specify)]11. Change of Interest or Redemption/Payment Basis:
  
  [Specify details of any provision for
  convertibility of Instruments into another interest or redemption /payment
  basis]12. Put/Call Options:
  
  [Put] [Call] [(further particulars specified
  below)]13. Status of the Instruments:
  
  Senior14. Listing:
  
  [Applications have been made for the Instruments to
  be admitted to listing on the Official List of the UK Listing Authority and
  to trading on the London Stock Exchange/other (specify)/None]15. Method of distribution:
  
  [Syndicated/Non-syndicated]PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE16. Fixed Rate Instrument Provisions
  
  [Applicable/Not Applicable]
  (If not applicable, delete the remaining sub- paragraphs of this paragraph)(i) Rate[(s)] of Interest:
  
  [*] per cent. per annum [payable [annually/
  semi-annually/quarterly/monthly] in arrear](ii) Interest Payment Date[(s)]:
  
  [*] in each year [adjusted in accordance with
  [Specify Business Day Convention and any applicable Business Centre(s) for
  the definition of Business Day]/not adjusted](iii) Fixed Coupon Amount [(s)]:
  
  [*] per [*] in nominal amount(iv) Broken Amount:
  
  [Insert particulars of any initial or final broken
  interest amounts which do not correspond with the Fixed Coupon Amount [(s)]
  and the Interest Payment Date(s) to which they relate](v) Day Count Fraction (Condition 3.2.4(i)):
  
  [*]
  (Day count fraction should be Actual/Actual- ISMA for all fixed rate issues
  other than those denominated in U.S. dollars unless otherwise agreed)  
 (1) Notes which have a maturity of less than one
year must have a minimum redemption value of £100,000 (or its equivalent in
other currencies) and only be issued to professionals within Article 9(2)(a) of
the Financial Services and Markets Act (Regulated Activities) Order 2001.  (vi) Determination Date(s) (Condition
  3.2.4(i)):
  
  [*] in each year [insert regular interest payment
  dates, ignoring issue date or maturitydate in the case of a long or short first
  or last coupon](2)(vii) Other terms relating to the method of
  calculating interest for Fixed Rate Instruments:
  
  [Not Applicable/give details]17. Floating Rate Instrument Provisions
  
  [Applicable/Not Applicable]
  (If not applicable, delete the remaining sub- paragraphs of this paragraph.)(i) Interest Period(s):
  
  [*](ii) Specified Interest Payment Dates:
  
  [*](iii) Business Day Convention:
  
  [Floating Rate Business Day Convention/ Following
  Business Day Convention/ Modified Following Business Day Convention/Preceding
  Business Day Convention/other (give details)]


(iv) Business Centre(s) (Condition 3.2.4(i)):
  
  [*](v) Manner in which the Rate(s) of Interest
  is/are to be determined:
  
  [Screen Rate Determination/ISDA Determination/other
  (give details)](vi) Interest Period Date(s):
  
  [Not Applicable/specify dates](vii) Party responsible for calculating the
  Rate(s) of Interest and Interest Amount(s) (if not the Calculation Agent):
  
  [*](viii) Screen Rate Determination (Condition
  3.2.3(B)):Relevant Time:
  
  [*]Interest Determination Date:
  
  [[*] [TARGET] Business Days in [specify city] for
  [specify currency] prior to [the first day in each Interest Accrual
  Period/each Interest Payment Date]]Primary Source for Floating Rate:
  
  [Specify relevant screen page or Reference
  Banks]Reference Banks (if Primary Source is Reference
  Banks):
  
  [Specify four]Relevant Financial Centre:
  
  [The financial centre most closely connected to the
  Benchmark ö specify if not London]Benchmark:
  
  [LIBOR, LIBID, LIMEAN, EURIBOR or other benchmark]Representative Amount:
  
  [Specify if screen or Reference Bank quotations are
  to be given in respect of a transaction of a specified notional amount]Effective Date:
  
  [Specify if quotations are not to be obtained with
  effect from commencement of Interest Accrual Period]Specified Duration:
  
  [Specify period for quotation if not duration of
  Interest Accrual Period](ix) ISDA Determination (Condition 3.2.3(A)):Floating Rate Option:
  
  [*]Designated Maturity:
  
  [*]Reset Date:
  
  [*]ISDA Definitions: (if different from those set out
  in the Conditions)
  
  [*](x) Margin(s):
  
  [+/-] [*] per cent. per annum(xi) Minimum Rate of Interest:
  
  [*] per cent. per annum(xii) Maximum Rate of Interest:
  
  [*] per cent. per annum(xiii) Day Count Fraction (Condition 3.2.4(i)):
  
  [*](xiv) Rate Multiplier:
  
  [*](xv) Fall back provisions, rounding provisions,
  denominator and any other terms relating to the method of calculating
  interest on Floating Rate Instruments, if different from those set out in the
  Conditions:
  
  [*]18. Zero Coupon Instrument Provisions
  
  [Applicable/Not Applicable]
  (If not applicable, delete the remaining sub-paragraphs of this paragraph)(i) Amortisation Yield (Condition 4(d)):
  
  [*] per cent. per annum(ii) Day Count Fraction (Condition 3.2.4(i)):
  
  [*](iii) Any other formula/basis of determining
  amount payable:
  
  [*]19. Index Linked Interest Instrument Provisions
  
  [Applicable/Not Applicable]
  (If not applicable, delete the remaining sub-paragraphs of this paragraph)(i) Index/Formula:
  
  [Give or annex details](ii) Calculation Agent responsible for
  calculating the interest due:
  
  [*](iii) Provisions for determining Coupon where
  calculation by reference to Index and/or Formula is impossible or
  impracticable:
  
  [*]


(iv) Interest Period(s):
  
  [*](v) Specified Interest Payment Dates:
  
  [*](vi) Business Day Convention:
  
  [Floating Rate Business Day Convention/ Following
  Business Day Convention/ Modified Following Business Day Convention/Preceding
  Business Day Convention/other (give details)](vii) Additional Business Centre(s) (Condition
  3.2.4(i)):
  
  [*](viii) Minimum Rate of Interest:
  
  [*] per cent. per annum(ix) Maximum Rate of Interest:
  
  [*] per cent. per annum(x) Day Count Fraction (Condition 3.2.4(i)):
  
  [*]20. Dual Currency Instrument Provisions
  
  [Applicable/Not Applicable]
  (If not applicable, delete the remaining sub- paragraphs of this paragraph)(i) Rate of Exchange/Method of calculating
  Rate of Exchange:
  
  [Give details](ii) Calculation Agent, if any, responsible
  for calculating the principal and/or interest due:
  
  [*](iii) Provisions applicable where calculation
  by reference to Rate of Exchange impossible or impracticable:
  
  [*](iv) Person at whose option Specified
  Currency(ies) is/are payable:
  
  [*](v) Day Count Fraction (Condition 3.2.4(i)):
  
  [*]PROVISIONS RELATING TO REDEMPTION21. Call Option
  
  [Applicable/Not Applicable]
  (If not applicable, delete the remaining sub- paragraphs of this paragraph)(i) Optional Redemption Date(s):
  
  [*](ii) Optional Redemption Amount(s) of each
  Instrument and method, if any, of calculation of such amount(s):
  
  [*] per Instrument of [*] specified denomination(iii) If redeemable in part:
  
  [*](a) Minimum nominal amount to be redeemed:
  
  [*](b) Maximum nominal amount to be redeemed:
  
  [*](iv) Option Exercise Date(s):
  
  [*](v) Description of any other Issuers option:
  
  [*](vi) Notice period:(3)
  
  [*]22. Put Option
  
  [Applicable/Not Applicable]
  (If not applicable, delete the remaining sub- paragraphs of this paragraph)(i) Optional Redemption Date(s):
  
  [*](ii) Optional Redemption Amount(s) of each
  Instrument and method, if any, of calculation of such amount(s):
  
  [*] per Instrument of [*] specified denomination(iii) Option Exercise Date(s):
  
  [*](iv) Description of any other Instrumentholders
  option:
  
  [*](v) Notice period:(4)
  
  [*]  
 (3)If setting notice periods which are different to
those provided in the terms and conditions, issuers are advised to consider the
practicalities of distribution of information through intermediaries, for
example clearing systems and custodians, as well as any other notice
requirements which may apply, for example as between the issuer and its
trustee.  (4)If setting notice periods which are different to
those provided in the terms and conditions, issuers are advised to consider the
practicalities of distribution of information through intermediaries, for
example clearing systems and custodians, as well as any other notice requirements
which may apply, for example as between the issuer and its trustee.  23. Final Redemption Amount of each Instrument
  
  [[*] per Instrument of [*] specified
  denomination/Other/See Appendix]24. Early Redemption Amount


(i) Early Redemption Amount(s) of each
  Instrument payable on redemption for taxation reasons (Condition 4(b)) or an
  Event of Default (Condition 8) and/or the method of calculating the same (if
  required or if different from that set out in the Conditions):
  
  [*](ii) Redemption for taxation reasons permitted
  on days other than Interest Payment Dates (Condition 4(b)):
  
  [Yes/No](iii) Unmatured Coupons to become void upon
  early redemption (Bearer Instruments only) (Condition 5(e)):
  
  [Yes/No/Not Applicable]GENERAL PROVISIONS APPLICABLE TO THE INSTRUMENTS25. Form of Instruments:
  
  Bearer Instruments(i) Temporary or permanent Global Instrument:
  
  [temporary Global Instrument exchangeable for a
  permanent Global Instrument which is exchangeable for Definitive Instruments
  on 60 days notice in the limited circumstances specified in the permanent
  Global Instrument][temporary Global Instrument exchangeable for
  Definitive Instruments on 40 days notice][permanent Global Instrument exchangeable for
  Definitive Instruments on 60 days notice/ at any time/in the limited
  circumstances specified in the permanent Global Instrument](ii) Applicable TEFRA exemption:
  
  [C Rules/D Rules/Not applicable]26. Financial Centre(s) (Condition 5(f)) or other
  special provisions relating to payment dates:
  
  [Not applicable/Give details. Note that this item
  relates to the date and place of payment, and not interest period end dates,
  to which items 16(ii), 17(iv) and 19(vii) relate]]27. Talons for future Coupons or Receipts to be
  attached to Definitive Instruments (and dates on which such Talons mature):
  
  [Yes/No. If yes, give details]28. Details relating to Partly Paid Instruments:
  amount of each payment comprising the Issue Price and date on which each
  payment is to be made and consequences (if any) of failure to pay, including
  any right of the Issuer to forfeit the Instruments and interest due on late
  payment:
  
  [Not applicable/give details]29. Details relating to Instalment Instruments:
  
  [Not applicable/give details]Instalment Amount(s):
  
  [*]Instalment Date(s):
  
  [*]Minimum Instalment Amount:
  
  [*]Maximum Instalment Amount:
  
  [*]30. Redenomination, renominalisation and
  reconventioning provisions:
  
  [Not applicable/The provisions annexed to this
  Pricing Supplement apply]31. Consolidation provisions:
  
  [Not applicable/The provisions annexed to this
  Pricing Supplement apply]32. Other terms or special conditions:(5)
  
  [Not applicable/give details]DISTRIBUTION33. If syndicated, names of Managers:
  
  [Not applicable/give names]Stabilising Manager (if any):
  
  [Not applicable/give name]Dealers Commission:
  
  [*]34. If non-syndicated, name of Dealer:
  
  [Not applicable/give name]35. Additional selling restrictions:
  
  [Not applicable/give details]OPERATIONAL INFORMATION36. ISIN Code:
  
  [*]37. Common Code:
  
  [*]38. Any clearing system(s) other than Euroclear and
  
  [Not applicable/give name(s) and number(s)]


Clearstream, Luxembourg and the relevant
  identification number(s):39. Delivery:
  
  Delivery [against/free of] payment40. The Agents appointed in respect of the
  Instruments are:
  
  [*]GENERAL41. Additional steps that may only be taken
  following approval by an Extraordinary Resolution in accordance with
  Condition 10(a):
  
  [Not applicable/give details]42. The aggregate principal amount of Instruments
  issued has been translated into euro at the rate of [*], producing a sum of
  (for Instruments not denominated in euro):
  
  [Not applicable/o[*]]  [LISTING APPLICATION  This Pricing Supplement comprises the final terms
required for the Instruments described herein to be admitted to the Official
List of the UK Listing Authority and admitted to trading by the London Stock
Exchange pursuant to the Euro 7,000,000,000 Euro Medium Term Note Programme of
Transco Holdings plc and Transco plc.]  [STABILISING  In connection with this issue, [*] (the Stabilising
Manager) (or any person acting for the Stabilising Manager) may over-allot or
effect transactions with a view to supporting the market price of the
Instruments at a level higher than that which might otherwise prevail for a
limited period. However, there may be no obligation on the Stabilising Manager
(or any agent of the Stabilising Manager) to do this. Such stabilising, if
commenced, may be discontinued at any time, and must be brought to an end after
a limited period. Such stabilising shall be in compliance with all applicable
laws, regulations and rules.]  RESPONSIBILITY  The Issuer accepts responsibility for the information
contained in this Pricing Supplement which, when read together with the
Information Memorandum referred to above, contains all information that is
material in the context of the issue of the Instruments.  Signed on behalf of the Issuer:  By:  Duly authorised


GENERAL INFORMATION  (1) The admission of the Programme to listing on
the Official List of the UK Listing Authority and to trading on the London
Stock Exchange is expected to take effect on or about 28 July 2004. The
listing of the Instruments on the London Stock Exchange will be expressed as a
percentage of their nominal amount (exclusive of accrued interest). Any Tranche
of Instruments intended to be admitted to listing on the Official List of the
UK Listing Authority and admitted to trading on the London Stock Exchange will
be so admitted to listing and trading upon submission to the UK Listing
Authority and the London Stock Exchange of the relevant Pricing Supplement and
any other information required by the UK Listing Authority and the London Stock
Exchange, subject in each case to the issue of the relevant Instruments. Prior
to official listing, dealings will be permitted by the London Stock Exchange in
accordance with its rules. Transactions will normally be effected for delivery
on the third working day in London after the day of the transaction.  However, Instruments may be issued pursuant to the
Programme which will not be admitted to listing, trading and/or quotation by
the UK Listing Authority or the London Stock Exchange or any other listing
authority, stock exchange and/or quotation system or which will be admitted to
listing, trading and/or quotation by such listing authority, stock exchange
and/or quotation system as the relevant Issuer and the relevant Dealer(s) may
agree.  (2) The Issuers have obtained all necessary consents,
approvals and authorisations in the United Kingdom in connection with the issue
and performance of the Instruments. The establishment of the Programme was
authorised by a resolution of the Finance Committee of the Board of Directors
of Transco Holdings passed on 17 July 2003. The update of the Programme
was authorised by a resolution of the Finance Committees of the Board of
Directors of Transco Holdings and Transco passed on 29 April 2004.  (3) Instruments have been accepted for clearance
through the Euroclear and Clearstream, Luxembourg. The appropriate common code
and the International Securities Identification Number in relation to the
Instruments of each Series will be specified in the Pricing Supplement
relating thereto. The relevant Pricing Supplement shall specify any other
clearing system as shall have accepted the relevant Instruments for clearance
together with any further appropriate information.  (4) As a result of a fatal accident at Larkhall,
Lanarkshire in December 1999 in which four people died, Transco faces
charges alleging breaches of sections 3 and 33 of the Health and Safety at Work
Act 1974. The case is currently listed for trial in Edinburgh commencing 27 September 2004.
The maximum penalty for breach of either of the above sections is an unlimited
fine.  Except as disclosed in this paragraph, there are no,
nor have there been any, legal or arbitration proceedings (including such
proceedings which are pending or threatened of which Transco Holdings is aware)
which may have or have had in the 12 months preceding the date of this
Information Memorandum a significant effect on the Transco Holdings Groups
financial position.  (5) As a result of a fatal accident at Larkhall,
Lanarkshire in December 1999 in which four people died, Transco faces
charges alleging breaches of sections 3 and 33 of the Health and Safety at Work
Act 1974. The case is currently listed for trial in Edinburgh commencing 27 September 2004.
The maximum penalty for breach of either of the above sections is an unlimited
fine.  Except as disclosed in this paragraph, there are no,
nor have there been any, legal or arbitration proceedings (including any such
proceedings which are pending or threatened of which Transco is aware) which
may have or have had in the 12 months preceding the date of this Information
Memorandum a significant effect on the Transco Groups financial position.  (6) Save as disclosed herein, there has been no
significant change in the financial or trading position of the Transco Holdings
Group since 31 March 2004 and no material adverse change in the financial
position or prospects of Transco Holdings or the Transco Holdings Group since
31 March 2004.  (7) Save as disclosed herein, there has been no
significant change in the financial or trading position of the Transco Group
since 31 March 2004 and no material adverse change in the financial
position or prospects of Transco or the Transco Group since 31 March 2004.


(8) PricewaterhouseCoopers LLP and their
predecessors PricewaterhouseCoopers, Chartered Accountants, have audited the
accounts of the Transco Holdings Group for the two years ended 31 March 2004,
and the 15 months ended 31 March 2002, respectively. The audited accounts
for the Transco Holdings Group contain unqualified reports.  (9) PricewaterhouseCoopers LLP and their
predecessors PricewaterhouseCoopers, Chartered Accountants, have audited the
accounts of the Transco Group for the two years ended 31 March 2004, and
the 15 months ended 31 March 2002, respectively. The audited accounts of the
Transco Group contain unqualified reports.  (10) Each Instrument, Receipt, Coupon and Talon
will bear the following legend: Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 165(j) and 1287(a) of
the Internal Revenue Code.  (11) For so long as the Programme remains in effect
or any Instruments are outstanding, copies of the following documents may be
inspected during usual business hours on any weekday (Saturdays and public
holidays excepted), for inspection at the offices of JPMorgan Chase Bank at
Trinity Tower, 9 Thomas More Street, London E1W 1YT and at the registered
offices of each of the Issuers:  (i) a copy of this Information Memorandum
together with any supplement to this Information Memorandum or further
Information Memorandum;  (ii) the Trust Deed (which includes the form of
the Global Instruments, the Definitive Instruments, the Coupons, the Receipts
and the Talons);  (iii) the Agency Agreement;  (iv) the Dealer Agreement;  (v) the Memorandum and Articles of Association
of each of the Issuers;  (vi) the audited consolidated accounts of
Transco Holdings for the two years ended 31 March 2004, and any
consolidated interim accounts of Transco Holdings published subsequently to
such accounts;  (vii) the audited consolidated accounts of
Transco for the two years ended 31 March 2004, and any consolidated
interim accounts of Transco published subsequently to such accounts; and  (viii) any Pricing Supplement relating to
Instruments which are admitted to listing, trading and/or quotation by any
listing authority, stock exchange and/or quotation system. (In the case of any
Instruments which are not admitted to listing, trading and/or quotation by any
listing authority, stock exchange and/or quotation system, copies of the
relevant Pricing Supplement will only be available for inspection by the
relevant Instrumentholders.)


REGISTERED OFFICE OF THE ISSUERS  1-3 Strand London WC2N 5EH  THE TRUSTEE  The Law Debenture Trust Corporation p.l.c. Fifth Floor 100 Wood Street London EC2V 7EX  THE ARRANGER AND AUTHORISED ADVISOR  HSBC Bank plc 8 Canada Square London E14 5HQ  THE DEALERS  Barclays Bank PLC 5 The North Colonnade Canary Wharf London E14 4BB  Credit Suisse First Boston (Europe) Limited One Cabot Square London E14 4QJ  Deutsche Bank AG London Winchester House 1 Great Winchester Street London EC2N 2DB  HSBC Bank plc 8 Canada Square London E14 5HQ  J.P. Morgan Securities Ltd. 125 London Wall London EC2Y 5AJ  Mizuho International plc Bracken House One Friday Street London EC4M 9JA  The Royal Bank of Scotland plc 135 Bishopsgate London EC2M 3UR


LEGAL ADVISERS  To the Issuers  Linklaters
One Silk Street
London EC2Y 8HQ  To the Dealers and to the Trustee  Clifford Chance
Limited Liability Partnership
10 Upper Bank Street
London E14 5JJ  ISSUING AND PAYING AGENT  JPMorgan Chase Bank
Trinity Tower
9 Thomas More Street
London E1W 1YT  PAYING AGENTS  ING Belgium SA/NV
avenue Marnixlaan 24
B-1000 Brussels
Belgium  Kredietbank S. A. Luxembourgeoise 43, Boulevard Royal L-2955 Luxembourg  Cre¤dit Agricole Investor Services Corporate Trust
91-93 boulevard Pasteur
75015 Paris  REGISTERED AUDITORS TO THE ISSUERS  PricewaterhouseCoopers LLP
1 Embankment Place
London WC2N 6RH  Printed by greenaways, a member of the ormolu group. E150318