Access Transparency Income Exchange Traded Bond Units

Transcription

1 FIXED INCOME FOR ALL INVESTORS Access Transparency Income Exchange Traded Bond Units

2 Exchange Traded Bond Units (XTBs) offer a new and exciting fixed income investment opportunity for all investors. XTBs bring together the income and capital stability of corporate bonds, with the transparency and liquidity of the ASX market. Corporate Bonds + ASX = Market XTBs AUSTRALIAN CORPORATE BOND COMPANY

3 Why XTBs? Benefits XTBs give you the flexibility to access the benefits of the corporate bond market, without a minimum investment amount. This contrasts with the wholesale bond market, where institutional investors are typically required to buy bonds in large amounts ($500,000 or more). Who are XTBs suitable for? Term deposit and cash investors seeking a regular, reliable income stream. Investors looking to build their investment portfolio via direct investments on ASX. Investors seeking to diversify their portfolio and blend fixed income with equity and property investments. Investors looking for diversity in their Self Managed Super Funds (SMSFs). Access XTBs give all investors access to the benefits of corporate bonds from leading ASX listed companies, previously only available to institutional or wholesale investors. Transparency XTBs are available on ASX, which allows you to track the value of your investments on a daily basis. Liquidity XTBs give you the advantage of being able to buy and sell on ASX at any time, just like shares (subject to liquidity of the underlying bond). Income XTBs provide a regular, reliable income stream. This allows you to match your income to your cash flow requirements. XTBs will generally pay a higher rate of interest than term deposits and cash based products. Choice You have the ability to select from a wide range of bond exposures from some of the largest ASX listed companies. You can select the bond exposures that best meet your investment needs, based on investment term, type of income, or credit quality. Security Corporate bonds and the XTBs over them offer greater security of capital repayment than some other investments, such as shares and hybrids. As creditors to the bond issuer, they rank ahead of those hybrids and equity securities if a company is wound up. Stability Bond prices are typically less volatile than shares, hybrids or property prices. Exposure to corporate bonds offers investors a source of income and a known outcome at maturity. XTBs give you exposure to corporate bonds, meaning you receive 100% of the coupons paid and the full face value of the bond in cash at maturity, subject to the creditworthiness of the bond issuer. Simplicity XTBs are traded on ASX just like shares, subject to liquidity, so the process of buying and selling is simple and easy. If you already have a broker or financial adviser, there s no additional paperwork or accounts to open. Available to SMSFs SMSFs may access XTBs as part of an investment portfolio, providing a regular income stream.

4 Risks How to invest Credit Each XTB is exposed to the credit worthiness of the issuer of the underlying bond. Liquidity Once quoted on ASX, the market for each XTB may not be liquid, meaning investors may not be able to sell XTBs prior to the maturity date. Concentration Investors with a single XTB will not benefit from the diversification of exposure to a number of ASX listed corporates, or from a basket of different types of assets. Market The performance of XTBs are linked to the performance of the underlying bonds, after fees and expenses. There is a risk that the value of underlying bonds may decline in response to market factors. Trust Risk Buying and selling XTBs is simple STEP 1 Visit STEP 2 Download and read the PDS STEP 3 Review the list of available XTBs STEP 4 Contact your stockbroker or financial adviser to transact Keep up to date Find out more at and register for our newsletter for regular updates on upcoming distributions, new XTBs and more XTBs are units in a unit trust, as such there are risks that the fees and expenses associated with XTBs may increase over time. There is also a risk that the Securities Manager or the Responsible Entity or material service providers may change or they may fail to perform their obligations.

5 How XTBs work XTBs give you exposure to specific, individual corporate bonds issued in the wholesale market. Investors can select the individual bonds to which they wish to gain exposure. For each corporate bond a new XTB Class will be quoted on ASX, each with its own ASX 6-letter code, starting with YTM. XTBs are units in a trust with each unit Class reflecting a different underlying bond. Investors can buy and sell the XTBs on ASX, subject to liquidity, just like shares. Each individual XTB reflects the maturity date and coupon payment of its respective corporate bond. The price and yield of each XTB is expected to reflect the price and yield of the underling bond, after fees and expenses. For example, ASX-code YTMTLS is an XTB giving you exposure to the following Telstra (TLS) Corporate Bond: Underlying issuer: Telstra Corporation (TLS). Maturity date: 15 July Coupon: 7.75% p.a. Yield to Maturity (YTMTLS) 3.252% p.a. as at 28 Nov 2014.

6 AUSTRALIAN CORPORATE BOND COMPANY Australian Corporate Bond Company (ACBC) is the Securities Manager of XTBs listed on the ASX. Established in 2013 to develop the XTB fixed income investment opportunity, ACBC s directors and key executives have a broad range of skills and experience in investment banking, broking, trading, funds management, investment product manufacturing and exchange operations. Working with banks, brokers and market makers, ACBC selects the underlying corporate bonds that will be made available to investors via XTBs on ASX. Looking forward, ACBC will grow the range of XTBs available on ASX and deliver a range of educational and marketing tools aimed at stockbrokers, financial advisers and individual investors XTBS.COM.AU DISCLAIMER Australian Corporate Bond Company Ltd (ABN , Authorised Representative No.: ) ( ACBC ) is an Authorised Representative of Theta Asset Management Ltd (ABN , AFSL No.: ) ( Theta ). Theta is the Responsible Entity of the Australian Corporate Bond Trust and the issuer of the Exchange Traded Bond Units ( XTBs ). ACBC is the Securities Manager of the XTBs. ACBC and Theta will earn fees for making the XTBs available to investors, which is payable at the time that an Authorised Participant applies for an XTB. An application has been made to ASX for the XTBs to be quoted on ASX pursuant to the AQUA Rules. Further a Product Disclosure Statement expected to be dated on or about 10 December has been lodged with ASIC (the PDS ). No units will be issued until such time as ASIC and ASX have approved XTBs for admission to quotation. Applications will only be accepted from Authorised Participants pursuant to the PDS. All other investors must acquire XTBs on ASX or through an Authorised Participant. ACBC is solely responsible for the contents of this brochure. The contents of the PDS and this brochure are subject to change and ACBC makes no warranty, express or implied, as to the completeness of any statement contained herein nor does it represent that this presentation contains all of the information that an investor may require in order to assess the merits of an investment in XTBs. The distribution of this brochure or any other material relating to XTBs, including the PDS, to persons outside of Australia may be restricted by law and any person who comes into possession of such documents should seek their own advice on, and observe any such restrictions. The information contained in this product brochure is general in nature and does not take into account any particular investors personal circumstances, objectives or needs. It is not personal financial product advice. You should read the PDS and consider, with or without the assistance of your professional advisers, whether an investment in XTBs is appropriate, having regard to your own personal circumstances.