Invest in a Bond-Linked Security linked to Commodities Receivables and Finance Trust (CRAFT) Secured Notes, returning 7.80% p.a.
The information below is a summary of this investment opportunity. Investors must obtain and read the ‘Product Disclosure Document’ for this security dated 24 January 2022 (PDS), along with the ‘C2 Accumulator – Deferred Purchase Agreement – Master PDS’ dated 21 October 2022 (Master PDS) before investing in this opportunity.
Overview
CRAFT Bond Issues Pty Ltd (CRAFT Bond Issues) established CRAFT to raise funds through the issue of Australian dollar Notes and apply those funds to invest directly (and indirectly through Approved Commodity Finance Lenders) in (or make) loans to participants in the Commodities Sector.
This security a ‘Bond-Linked Security issued by an Australian Financial Services Licensee, and is not a corporate bond issued by CRAFT Bond Issues.
The security provides all investors with the opportunity to make an AUD investment, yet gain exposure to returns based on the credit risk of the CRAFT Secured Note (an opportunity usually available only to ‘wholesale investors’ within the meaning of the Corporations Act.
By investing in this security, investors will receive regular income in the form of coupons and 100% of the face value of your investment on maturity – all in AUD.
Key Terms
| Issuer | C2 Specialist Investment Pty Ltd ACN 622 433 032 |
|---|---|
| Custodian | C2 Nominees Pty Ltd (ACN 624 366 981) |
| Arranger | C2 Financial Services Pty Ltd ACN 621 428 635 AFSL 502171 |
| Coupon | 7.80%pa (fixed), paid semi-annually (9.80%pa during any Maturity Extension) |
| Maturity Date | 31 March 2030 (the Issuer has the opportunity to extend the Maturity Date to 30 September 2030 (Maturity Extension)) |
| Issue Price | $100 |
| Minimum Investment | $10,000 |
| ABE Code | C2F078030 |
Risks
This is an overview of the main risks associated with this investment. Further (and more complete) details of the main risks associated with this security are set out in the PDS.
- Interest Rate movements – volatility or changes in market and government set interest rates may impact on both the investments and loans made by CRAFT and therefore on the value and marketability of your investment.
- Liquidity risk – If you want to sell your securities before the Maturity Date, there may be a delay, or you may not be able to do so, or may not be able to do so within your desired timeframe.
- lack of capital base – CRAFT has not been capitalised by its sole unitholder and is reliant on the Investment Manager successfully implementing the investment strategy;
- reliance on the Investment Manager’s performance – the Investment Manager must ensure that it generates sufficient income, interest and profits (and does not make losses) so that the Note Issuer can pay for CRAFT’s operational costs and meet the Note Issuer’s obligations to pay the Issuer interest and repay the outstanding principal to the Issuer on Maturity, if it cannot, subject to the First Loss Piece, Investors can make losses on either the Coupon and/or the Maturity Value, or Early Maturity Value, of the security.
- start-ups – CRAFT, the Investment Manager and the Note Issuer are newly established and do not have any operational or performance history and they are dependent on key personnel;
- unhedged foreign currency risk – the Investment Manager may not hedge against foreign currency risks arising from the Note Issuer borrowing in Australian dollars (by issuing Australian denominated notes) and investing and lending in foreign currencies. CRAFT loans and investments will be predominantly denominated in foreign currencies and should the Australian dollar appreciate against those currencies over the course of the loan or investment, the value of the loan or investment may decrease resulting in a loss when the loan or investment is realised, converted to Australian dollars and repatriated, this in turn will impact the performance of your investment
- foreign counterparties and investments – CRAFT’s loans and investments will be with predominantly foreign (non-Australian) entities, governed by foreign law and subject to determination of any disputes in foreign courts and arbitration processes. If the Note Issuer needs to enforce or to sue on any of its contracts, litigation in foreign jurisdictions is likely to be very expensive, difficult, uncertain and slow.
- investment risks – the commodity financing industry to which CRAFT’s assets will be exposed is subject to a wide range of risks and uncertainties including market, war, trade war, economic, geopolitical, regulatory, credit, operational, borrower, loan default and enforcement risks.
Disclaimer: This webpage has been prepared by ABE Distribution Pty. Ltd ACN 673 177 912 (“ABE”). ABE is a Corporate Authorised Representative number 1307088 of Novus Capital Limited ACN 006 711 995 AFSL 238168. The information contained in it is of a general nature only. It was prepared without considering your financial needs, circumstances and objectives. Before investing in this security, you should consider whether it is appropriate for your circumstances and review the Master PDS and PDS. This website may contain links to other third-party websites, some of which require a subscription to read. Such links are for your convenience only, and ABE does not recommend or endorse these third-party sites. No representation or warranty is made as to the accuracy, completeness or reliability of any estimates, opinions, conclusions, or other information contained in this website. This website may contain certain forward-looking statements. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors, many of which are beyond our control. Past performance is not an indication of future performance. To the maximum extent permitted by law ABE disclaims all liability and responsibility for any direct or indirect loss or damage that you may suffer as a result of relying on anything on this webpage.