1 ii ; ep*m d5ttš'dé\d!.-'-')" ~%1i.~rZ2'!Y;i :;::Z::-:":~:~~;:::~;'~~~"~,x;~~:;:;~~~';;;;fki;;",; u:;~i" ~,,k, I: INFORMA TION MEMORANDUM i SOUTH AUSTRALIAN GOVERNMENT FINANCING AUTHORITY (SAFA) INFLA TION INDEXED ANNUITIES MATURING (SERIES 2) Unconditionally Guaranteed under the Government Financing Authority Act, 1982 by THE TREASURER OF THE STATE OF SOUTH AUSTRALIA Arranger and Lead Manager SBC DOMINGUEZ BARRY LIMITED 14 October 1991
2 T ABLE OF CONTENTS SAFA INFLATION INDEXED ANNUITIES 1. BASIC ISSUING DETAILS SUPPLEMENTARY INFORMATION. 3 Issue and Guarantee. 3 Form and Denomination 3 Certificate of Inscription and Title. 3 Registry Facility Closure of Register 5 Method of Payment of Annuity Payments CONSUMER PRICE INDEX PRICING FORMULAE
3 SAFA INFLATION INDEXED ANNUITIES " (SERIES 2) 1. BASIC ISSUING DETAILS Issuer Arranger & Lead Manager Unconditional Guarantee South Australian Government Financing Authority (SAFA). SBC Dominguez Bar Limited. Treasurer of the State of South Australia. Maturity 20 years, maturing Form of Issue Indexation Consumer Price Index (CPI) Base Annuity Payment Quarterly indexed annuity payments. Base annuity payment wil be indexed quarerly to changes in the Consumer Prce Index. The "Weighted Average of Eight Capital Cities: All- Groups Index" published quarterly by the Australian Bureau of Statistics. $21,500 per quarer. Capital Purchase Price An investor may purchase an annuity with a minimum base payment of $21,500 per quarer and thereafter in multiples of $2,150 per quarer. The subscription amount applicable for a given base annuity payment is available through the Lead Manager. Page.
4 Purchase Real Yield Wil be determined by the capita purchase price, base annuity payment and settlement date. Settlement Date By arrangement with the Lead Manager. Annuity Payments Payable quarerly in arears on 15 December, 15 March, 15 June and 15 September unti maturity inclusive in accordance with the following formula: BT= Bo x.cpit CP~ Where; BT = )Jo = f CPIo = CPIT = Annuity payment at time T. Base annuity payment. CPI index for the full calendar quarer. ended 30 June 1991 (ie. ~14.4). Highest CPI index inclusive from CPIa to the full calendar quarer preceding the annuity payment date. Page 2 \.
5 2. SUPPLEMENTARY INFORMATION Issue and Guarantee SAFA Indexed Annuities (Series 2) maturing are issued by South Australian Government Financing Authority and are unconditionally guaranteed by the Treasurer of the State of South Australia. Form and Denomination Annuities wil be issued by inscription of the name of the holder in the register. Annuities w.il be issued in any denomination which is an integral multiple of $ 100,000. This denomination split is for ease of recognition and transfer only and has no b~arng to the capital purchase price paid for an Annuity which is determined from the base payment. A denomination of $1 milion relates to an initial base annuity payment of $21,500 per quarer and therefore a denomination of $100,000 relates to an initial base annuity payment of $2,150 per quarer. Certificate of Inscription and Title The Registrar wil issue a Certificate of Inscription to the purchaser of an Annuity, confirng that the purchaser has been inscribed in the Annuity Register ás the owner of the relevant Annuity. The Certificate of Inscription is not a document of title or a negotiable instrment. Title to the Annuity passes upon registration of the transfer and acceptance form. Except as ordered by a court of competent jurisdiction or as required by law, the registered holders of the Annuity wil be treated for all purposes as the absolute owners of the Annuity, notwithstanding any notice to the contrary, including any notice of trst, express or implied. Page 3
6 Closure of Register This applies to any transactions in an Annuity to be dealt with where the Registrar receives notice of the transaction during the period: (a) 14 days immediately before the date on which an Annuity payment is due (ie. "close off' wil be as at close of business of the 1st day of the relevant month); (b) One calendar month immediately before the date of maturity (ie. "close off' at close of business 15 November 2011). ~' Method of Payment of Annuity Payments Annuity payments wil be made on the due date to the owner of the Annuity recorded in the Register at the close of business 14 days prior to the next Annuity payment date. Payment wil be made according to instructions received from that person either by credit into an account at a bank or by cheque forwarded by post. Page 5
7 3. CONSUMER PRICE INDEX The index used for the purpose of SAFA Indexed Annuities is the "Weighted Average of Eight Capital Cities: All-Groups Index" as maintained and published quarerly by the Australian Bureau of Statistics. If, for any reason, the CPI is not published for any quarter, or if publication is delayed until after the date on which an annuity payment is determned, the interim number determned by the Reserve Ban of Australia for application in regard to Commonwealth of Australia Treasur Indexed Bonds wil be used for the purposes for which the actual CPI figure would have been applied. If no such interi number is determned by the Reserve Bank of Austrlia, then SAFA wil determine an interim number. The application of the interim number so determined by the Reserve Bank of Australia or SAFA, as the case may be, in the calculation of the annuity payment of SAFA Indexed Annuities wil be binding upon all annuity holders. In the event of subsequent publication of the actual CPI figure for that quarer by the Australian Bureau of Statistics, adjustment to the payment wil be made. If the Australian Bureau of Statistics ceases to publish the CPI and publishes another index which it states to be in replacement of the CPI, then that index wil be used for the purposes of SAFA Indexed Annuities. If the Australian Bureau of Statistics ceases to publish the CPI without publishing a replacement index SAFA wil inform annuity holders and offer to repurchase their SAFA Indexed Annuities at market-related yields. Repayment to annuity holders who exercise such a right wil be on a date specified by SAF A no later than three months from the date of publication of the last CPI figure made prior to such change as is referred to earlier in this paragraph. In these circumstances, notice setting out the administrative arangements for repurchase and payment will be sent to annuity holders at their registered address at the appropriate time. In the event that annuity holders choose to retain their annüities, the quarerly adjustments to the annuity payments applying to annuities not repurchased wil be calculated according to the appropriate replacement index employed for the purpose of Commonwealth Treasury Indexed Bonds. In the event of no such index being established then the Prsident of the Institute of Actuares of Australia (or, if such institute has ceased to exist, such other body as then cares on the functions of such Institute) or his/her nominee acting as an independent arbitrator wil be called upon to calculate an index which he/she determines to be appropriate as a general indication of the rate of price change for consumer goods and services in the capita cities of Australia. If the reference base of the CPI is changed, the index which wil be used for the purposes of SAFA Indexed Annuities wil be the CPI numbers expressed on the new base as published by the Australian Bureau of Statistics. If a relevant CPI number is revised after the annuity payment at a particular annuity payment date, a subsequent adjustment wil be made to the annuity payment to take account of any discrepancy. Page 6.
8 4. PRICING FORMULAE Annuity Payments Payable quarerly in arears in accordance with the following formula: Where; BT Bo CPIo CPIT BT = Bo X CPIT CPIo = Annuity payment at tiine T. = Base annuity payment. = CPI index for the full calendar quarter ended 30 June 1991 (ie ). r = Highest CPI index inclusive from CPIo to the full calendar quarter preceding the annuity payment date. Settlement Formula \ '-ì. PRICE = (v / q)f/d X \BT_i x qx(z + alo) Where; BT_i q CPlj CPIj_i a' n v = Previous annuity payment (or Bo prior to fist annuity payment). = Quarterly inflation factor = CPI~ (but not less than 1) inclusive. "- CPIj_i = Highest CPI index released from CPIo to the settlement date, = Highest CPI index inclusive from CPli (ie ) to the second latest released CPI index (inclusive) a$ at the settlement date. = V + V2 + V3 + VO = \ (1- VO) = i Page 7
9 i = n = f = d = Z = Z = Settlement real yield (divided by 4) and expressed as a decimal. No. of full quarters from next annuity payment to maturity. No. of days from settlement date to next annuity payment date. No. of days in the full quarter ending on the next annuity payment date. 1 if there is an annuity payment to the purchaser at the next annuity payment date. o if there is no payment to the purchaser at the next annuity payment date. Note (1) When the next annuity payment is known the formula becomes: PRICE = (v / qt1d X BT X (Z + ain) as BT.i x q = BT = next annuity payment. (2) When sett1em~nt takes place on an annuity payment date the formula becomes: PRICE = BT x ain Where; BT = Current annuity payment. n = No. of full quarters to maturity. (3) q is used in the settlement formula for calculating the next quarerly annuity adjustment and prior to the relevant CPI release is based on thè previous inflation adjustment. If there is significant inflation volatilty an alternative value of q may need to be agreed for transactional purposes, or a pricing adjustment is agreed to take place upon the CPI release by recalculating the settlement price using the actual inflation adjustment. Page 8