1 an OmniArch Investment Opportunity FIXED INCOME BOND
2 A OmniArch is an alternative investment firm dedicated to developing and providing investment opportunities rooted in real estate, media and asset backed securities. OmniArch works with Private Investment Firms, Broker / Dealer Firms, Exempt Market Dealers and Institutions within Canada, UK, USA and Asia to provide domestic and international investors with a variety of diversified, well-structured private investments. OmniArch s investment products are designed to provide investors with performance, diversification and non-correlation to readily available public marketplaces or widely available investments.
3 OmniArch Capital The Management Team Our Executive Management Team, based out of Calgary, Alberta includes seasoned professionals offering a wealth of experience as investors, business people, advisors, entrepreneurs, facilitators, visionaries & fund managers. Individually and collectively they share a comprehensive understanding of the local and national economies, global financial marketplace, diversified market sectors and investment opportunities. The OmniArch Executive Management Team are able to utilize their respective strengths in order to source, structure and manage unique, performing investment vehicles for the benefit of private investors. All of these factors allow OmniArch to effectively manage and build strong investment vehicles on behalf of the corporation and its expansive investor base. Investment Highlights 10% Fixed return paid monthly (compounding options available) $10,000 minimum investment cash or RRSP 5 year investment Term (early exit available) RRSP Eligible First Position Security No Annual Management Fee Management track record The Advisory & Corporate Partners In addition to our everyday management team, OmniArch has gathered a team of advisors and corporate partners with strengths in all different aspects of business and investment management. OmniArch s advisory team, corporate partners, and legal counsel are experts in their respective fields. Individually and collectively they host long standing domestic and international relationships, extensive track records and experience with the structuring and management of successful investments, a history of successful business management, and a seemingly endless base of resources to aid OmniArch in all aspects of its business. OmniArch has partnered with Private Investment Firms, Broker / Dealer Firms, Exempt Market Dealers, Institutions, leading law firms, accounting firms, financial advisory firms and investment houses; all of which are highly respected within their dedicated industries. The high caliber of our management team, advisors and corporate partners allows OmniArch to source, structure and manage unique, performing investment vehicles for the benefit of its private, expansive investor base.
4 The Opportunity As We See It The OmniArch Fixed Income Bond There is a large investment market sector that institutions and top tier funds have historically allocated a significant portion of their available investment capital into called Asset Backed Securities (ABS). An asset backed security is any security (for example a bond) that is secured by a single, or multiple assets that generate cash flow on behalf of the holder of the security (bond). These cash flowing assets go through a long standing financial process called securitization. A buyer of an asset backed security experiences, in most cases, secured, continuous cash flows derived from the underlying asset classes of that particular ABS. The asset backed securities sector offers multiple diverse ABS options to invest within. Examples include airline lease income, credit card debt income, student loan debt and commercial mortgage backed debt, all depending on the level of risk and yield requirements an investor within such sector requires. The OmniArch fixed income bond derives its returns from within the residential mortgage backed securities RMBS portion of the ABS market sector. The rationale for identifying this sector is based on the current economic landscape for residential debt within the United States, and here is why: It s been more than five years since institutions and lending organizations in the United States became embroiled in a credit catastrophe. This economic meltdown caused disruption and dislocation within many market sectors nationwide. The residential mortgage backed securities sector has historically hosted strong, performing investment opportunities for large investment funds looking for safe, secured investment vehicles in the form of RMBS bonds. As the meltdown started to occur, this sector experienced significant downgrades. OmniArch believes, that the downgraded rating of certain RMBS bonds is no longer a true reflection of quality and security.
5 Not having the time or resources to re-analyze or re-qualify the existing RMBS bonds in the marketplace, the rating agencies in the United States such as Standard & Poor s, Moody s and Fitch initiated widespread bulk downgrades within the Residential Mortgage Backed Security Sector, causing prices of thousands of secured, well performing RMBS bonds to fall in value due to lack of demand and oversupply. As direct result of the widespread downgrades, in addition to the lack of liquidity caused by the credit catastrophe, OmniArch believes that secured, performing RMBS bonds currently trade at a discount to their true worth.* These RMBS bonds are available to qualified licensed buyers at significantly reduced prices, generating higher yields for prospective purchasers. OmniArch s fund managers and investment advisors have been dedicated to the Asset Backed Securities and mortgage securitization marketplace for over 25 years. Our RMBS Analysts boast long standing experience and reputations in modeling and pricing securitizations, analyzing performance organization, purchasing of bulk whole-loans and the subsequent pooling and securitization of mortgage debt. OA This proprietary expertise within our fund management team and advisors allows OmniArch to source secured RMBS bonds that are picked for their credit quality and long term cash flow potential based on a diligent analysis procedure. Out of the thousands of RMBS bonds OmniArch s team reviews, only a handful make it past the strict due diligence requirements and into the investment portfolio. A performing and secured investment income bond for everyday investors and private corporations looking for a predictable and reliable stream of fixed income The chosen RMBS bonds provide monthly cash flows to OmniArch and return higher yields within the portfolio due to the discount to face value being paid for them. These higher yields in turn provide you as an investor an opportunity to participate in this investment through investment into the OmniArch Fixed Income Bond offering secured, predictable monthly cash flows. The OmniArch Fixed Income Bond provides a 10% annual rate of return, paid monthly. *Of Bloomberg s 2013 list of the top 20 Hedge Funds in the United States, many select funds focused on the purchase and hold of Asset Backed Securities and RMBS Bonds. This is the same business strategy and market sector that the OmniArch Fixed Income Bond is invested within. * Source - Bloomberg 2013 Markets Magazine
6 The Investment & Returns Analyzed, Cash Flowing, Secured Bonds are literally ON SALE. OmniArch purchases discounted residential mortgage backed securities and in turn provides Canadian investors with monthly cash flow sourced from these bonds generating a secured, fixed, 10% per annum return, paid monthly*. $10,000 minimum investment cash or RRSP Class A & Class A-2 Where interest is paid out monthly Year 1 to Year % per annum fixed return paid monthly, compounded option available dependent on the class of bond acquired. 5 year investment term (investment has a liquidity option/early exit should you require your capital back within 5 years*) (paid out monthly) Calculated interest rate on Class A & A-2 Total interest after 5 years Total principal and interest after 5 years * Payments could vary based on investment date $5, % annually $25,000 $75,000 OmniArch Fixed Income Bond is approved and eligible for all registered plans (RRSP/TFSA/RRIF/LIRA) (You can invest your RSP s into OmniArch s funds) First title / first position security (your investment is secured) No annual management fee Management track record 3 Investment Options Class A & A-2 - Monthly Payments Class B - Annual Payments (interest compounded monthly and is paid to you on the first of each year) Class B Where interest is compounded monthly and paid out annually Year 1 to Year $ $ $ $ $ $ $ $ $ $ $ $50, $50, $51, $51, $52, $52, $52, $53, $53, $54, $54, $55, (paid out annually) Calculated interest rate on Class B Total interest after 5 years Total principal and interest after 5 years * Payments could vary based on investment date $5, % annually $26, $76, * Please refer to Offering Memorandum for full investment details. * compounded monthly and paid at the end of the term based on investment date each month may vary between days of interest
7 A Year 3 $ $61, $ $62, Class C A return of principal and accumulated compounded interest paid to you at the end of the term. $ $ $ $ $62, $63, $63, $64, $ $64, $ $65, $ $65, Class C Where interest is compounded monthly & paid at the end of the term. $ $ $ $66, $66, $67, Year 1 Year 4 $ $ $ $ $ $ $ $ $ $ $ $50, $50, $51, $51, $52, $52, $52, $53, $53, $54, $54, $55, $ $ $ $ $ $ $ $ $ $ $ $ $67, $68, $69, $69, $70, $70, $71, $72, $72, $73, $73, $74, Year 2 $ $ $ $ $ $ $ $ $ $ $ $ $55, $56, $56, $57, $57, $58, $58, $59, $59, $60, $60, $61, Year 5 $ $ $ $ $ $ $ $ $ $ $ $ $75, $75, $76, $ $77, $78, $78, $79, $80, $80, $81, $82, * payments could vary based on investment date. Total for 5 years Total principal & interest after 5 yrs $32, $82, O
8 Due Diligence & Security OmniArch s Analysts receive an opportunity to acquire hundreds of potential RMBS bonds for sale on a daily basis through liquidation auctions, trading desk relationships, public liquidation databases, private liquidation databases and institutional asset base databases. OmniArch s fund managers are experienced within the Asset Backed Securities Marketplace. OmniArch has the relationships, expertise, technology, and foundation required to determine which of the thousands of bonds being offered for sale have the potential to preserve capital and produce reliable monthly cash flows. This multi-tiered, diligence process is a necessary requirement in determining which of the bonds examined meet our RMBS Portfolio s benchmark criteria. Every RMBS bond being considered is sourced and found through a diligent filter process. The selected RMBS bond is then disassembled via a three-tier due diligence process intended to expose its bare bones constituents. By the end of this manual, hands-on process, OmniArch s analysts have the information required to determine with a high degree of confidence if that specific hand-picked bond is credit-worthy and has potential for ongoing, long-term, secured cash flow in accordance with the requirements of the portfolio. As a private investment firm we believe this level of scrutiny is unique in the financial industry in this space. OmniArch maintains proprietary systems, long standing experience within the ABS Market, a proven track record within the national and international investment marketplace, and a strong, time tested corporate foundation allowing us to stand out against other similar organizations. Out of the thousands of bonds available, only a select few make the grade for inclusion into the OmniArch Fixed Income Bond Portfolio. Investors in The OmniArch Fixed Income Bond are secured against the assets of OmniArch Capital Corporation and American RMBS Equity Fund IV L.P, and receive the first cash flows from the portfolio on a monthly basis (dependent on the class of bond acquired). Liquidation A Auction Portfolio Filters Return Hurdle Pricing Models Historical Data Non-agency Originally Rated Investment Grade (BBB- or Higher) Vintage Preference No Second Lien Deals No MBS Structures No Commercial Deals Cashflow Waterflow Individual Bond Analysis: Scenario Deal Structure Collateral Protection Investment Committee Review Bond Fund Monthly Remittance Monthly Variance Monthly Model Revaluation Quarterly Mark To Mark
9 The Portfolio & Track Record Here is a snapshot of certain bonds held in our portfolio 10% Fixed Income Bond Portfolio MBS Description BOAMS WFMBS GSR RAST RALI HVMLT RAST CXHE WAMU BOAMS POPLR RALI POPLR SBM7 AMSI Purchase Price* Vintage Class Coupon Rate Net Effective Yield 5.500% % 5.500% % 6.000% % 5.750% % 3.935% % 2.360% % 5.750% % 6.540% % 2.580% 9.382% 6.250% % 6.063% % 6.750% % 5.700% % 6.810% % 3.242% % *Cents on the dollar Communication & Transparency OmniArch feels strongly about communication and transparency. We like to communicate with investors in an open and direct fashion. OmniArch provides monthly and quarterly communication with all of our Exempt Market Dealers, brokers and investors; we keep investors up to date on their investment and the relative market sectors as a whole. We also provide yearly audited financial statements and are fully transparent in all aspects of our business and your investments. Communication and transparency is the most important part of our customer service commitment to you, a valued OmniArch client. OmniArch s fund managers and management team have a long track record in the structuring & purchase of asset backed securities and residential mortgage backed securities. Below is a snapshot of the 4 previous & current funds that OmniArch s Fund Managers have structured and managed since 2007 within the RMBS/ABS marketplace. American RMBS Equity Fund IV, from which the OmniArch Fixed Income Bond derives it s returns, is the 4th (fourth) out of the 5 funds, as listed below. Name of Fund Date of Fund Total Return on Investment (on an annual basis) Original Capital Account RMBS Fund to % $27,028,242 RMBS Fund to 20 I % $2,215,486 RMBS Fund to 15, % $7,536,583 RMBS Fund (opened) 11.63% (to Dec. 31, 2013) $5,642,322
10 Frequently Asked Questions With the current state of the USA economy why should I invest into residential mortgage bonds? Good question; OmniArch is able to generate a 10% (monthly cash flowing) return for our investors because of the illiquidity in the USA mortgage markets, and tightening of bank financing. OmniArch is entering a market sector that has experienced widespread downgrading and is in need of liquidity. Current RMBS bondholders in this market have been willing to liquidate assets at lower prices due to their need for capital. OmniArch has a track record of performing due diligence upon individual bonds to determine the credit risk, value and yield on the selected RMBS bond(s), therefore purchasing analyzed, performing assets, and in turn providing you as a bondholder of OmniArch with security, predictability and reliability of income at a rate of 10% per annum, paid to you monthly.* How is my money secured? Your money (bond) is secured by way of: Granting of a first secured position by a General Security Agreement registered in the United States against the property of American RMBS Equity Fund IV, L.P (ie. The fund holding the acquired RMBS). General Security Agreement filed at the Alberta Personal Property Registry against the property of OmniArch Fixed Income Limited Partnership; and Corporate guarantee by OmniArch Fixed Income LP and American RMBS Equity Fund IV L.P guaranteeing the obligations of OmniArch. As a bondholder to the corporation, you enjoy 1st position security in the assets as described above How is my risk managed? The fund is investing into a wide variety of performing and cash flowing RMBS bonds that have each gone through our analysis and due diligence filters. Once the due diligence portion is completed and our management team and advisors identify a bond they wish to purchase, the decision to acquire a bond is ultimately made by an internal investment committee. The committee then agrees (or disagrees) to purchase the bond and if approved, it is then purchased on behalf of investors. Subsequently, the bond portfolio is also managed on a monthly basis by way of cash flow analysis and collateral review to ensure each bond is performing as expected. When do I get paid my first interest cheque? 60 days after your investment funds clear. Payments are made on the second Tuesday of the month (Class A-2). These payments consist of interest calculated from your initial investment date which is when the funds have cleared. Therefore even though you do not receive cash flow for the first 60 days you are generating interest on your investment. Please note all interest payments are one month behind including the first payment and based on your investment date. Please refer to the offering memorandum for full information on payment structure. Subsequent interest payments (Class A-2) are generating either 28 days or 35 days worth of interest each month. Do you have compounding return options? Yes, we offer Class B and C Bonds for our investors to select from. Class B Bonds pay interest on 1 of each year, and compounds interest monthly. Class C Bonds also compound interest monthly but pay accrued interest at the end of the 5 year term of the bond. Usually funds of this type have heavy management fees, is that the case here? No, there are no annual management fees within this offering. OmniArch maintains a business strategy of well-managed investments and strives to place the investor first within the structure of all available corporate investments. Does OmniArch invest alongside with investors? Yes, absolutely. OmniArch places capital on a regular basis into the very same portfolio that you as an investor are investing into. We like to partner with investors to reflect our confidence in the investments we manage. * Please refer to Offering Memorandum for full investment details.
11 How to Invest Simple 3 Step Process OA Step 1 Review the marketing material and Offering Memorandum issued by OmniArch Capital Corporation, consult with your own financial and tax advisers and decide whether this investment is the right investment for you (if you do not have a licensed broker, please contact us and we will introduce you to a registered Exempt Market Dealer who can provide you with independent advice). Cash Investments: Execute the applicable subscription documents (Schedule I of the Offering Memorandum), attach a cheque in the amount of your investment made payable to OmniArch Capital Corporation. In addition please attach a void cheque to enable the direct deposit feature. The Exempt Market Dealers who offer this investment will then ensure you have a full set of paperwork which will be forwarded to OmniArch for immediate inclusion into the investment. Step 2 For Registered Plan Investments: Execute the applicable subscription documents (Schedule I of the Offering Memorandum), in addition to trustee account opening OR account transfer documents. Your Exempt Market Dealer will provide you with these documents and will ensure you have a full set of paperwork to forward to OmniArch for immediate inclusion into the investment. In the case of both cash and RRSP investments your advisor / Exempt Market Dealer will send all paperwork to OmniArch. Step 3 OmniArch will receive and immediately process your paperwork. You will receive a notification of investment and a Bond certificate. Please ensure safe keeping of the official Bond certificate. Congratulations, your investment is now complete and you will start to receive your returns (as outlined in the applicable Offering Memorandum) in addition to periodic communication from OmniArch on the status and progress of the investment and asset backed security marketplace.
12 Real Investments for Real People It s not about one day. It s about taking action and control over your own investment portfolio today. It s about smart, analyzed, predictable, asset-backed RRSP-eligible investments. It s about Investments that provide reliability and cash flow, managed by a team with integrity, experience, long standing track records and a history of success. It s about OmniArch s asset backed investments for real people, with real and secured returns. OmniArch Capital Phone: Fax: