International Finance Bank (IFB) Ltd.

Transcription

1 INDICATIVE TERM SHEET Contact: Amstel Securities NV, James Lewis: International Finance Bank, Harry Ernest Wiler v. Rickenbach v. Alport: Mr. Oliver Schmid: International Finance Bank (IFB) Ltd. (incorporated with limited liability in The Autonomous Island Of Anjouan, Union Of Comoros under the International Business Companies Act 2005 with registered Company number 1149) Structured Note in EURO 10 year Capital Protected Zero - Coupon and 10% participation on Performance of International Natural Resources Institute investment in Gold, Tantalum, Niobium and other Rare Earths Resources in Brazil This Term Sheet sets out in summary form the terms of the Covered Bond. The Terms and Conditions of the Covered Structured Note are set out in full in the Base Prospectus with respect to Covered Structured Note issued under it and the applicable Final Terms. Undefined capitalized terms used in this Term Sheet shall have the meanings given to them in the Base Prospectus and the applicable Final Terms. INDICATIVE TERMS & CONDITIONS AS OF February14th, 2011

2 ISIN: WKN/Series No.: Issuer: Lead Manager: General Depositor (incl. Book-Keeping): Settlement: Calculating Agent: Structurer: DE000A1A2084 A1A208 Issue Price % Minimum Redemption Price: 125% Listing: Underlying: International Finance Bank Ltd. Amstel Securities NV Amstel Securities NV Clearstream / Euroclear or otherwise Amstel Securities N.V. International Finance Bank Ltd. Rating for 125% Capital Protection at Maturity: Aa3 (Moody's) / A+ (S&P) / AA- (Fitch) Not listed A. Capital Protection: Deutsche Bank 5% 2020 ISIN: DE000DB5DCW6 Substitution Rights: Minimum Rating: A/A/A [may be changed after first tranche (being 50 to 100 Million Euros) subject to availabilities in the market with analogue quality and rating; in the event that the bond as described for the capital protection is called by the borrower, the issuer reserves the right to substitute the capital protection bond with another issue, with similar characteristics, of no less a rating quality than the called bond.] B. Resource Investment: 10.00% in underlying investment

3 Redemption on Maturity: Formula: On Redemption Date, the holder of the Protected Structured Note will receive an amount in EUR calculated in accordance with the following formula: ( ) INaRI(i) is the value of the underlying investment (according to JORC procedure and market value) of international Natural Resource Institute in Gold and Tantalum Mines in Brazil on the final observation date INaRI(0) is the value of the Underlying investment (according to JORC procedure and market value) of International Natural Resource Institute in Gold and Tantalum Mines in Brazil on strike date

4 Variable Return 10% Underlying Upside Option 25% Fix Coupon at Maturity Capital Invested Capital Invested

5 Type: 100% Capital Protected Structured Note issued pursuant to the Issuer s Covered Debt Issuance Programme Strike Date: 14 th February 2011 Issue Date: 15 th February 2011 Final Observation Date: 14 th February 2021 Redemption Date: 15 th February 2021 Currency: EURO Minimum Denominations: EURO 1,000 Business Days for Payments: London Business Day Convention: Following Business Day (unadjusted) Secondary Market: Amstel Securities NV provide a daily secondary market valuation Investment Fund Qualification The securities as described in this Term Sheet (the "Securities") do not constitute a participation in any collective investment scheme in the meaning of the Swiss Federal Act on Collective Investment Schemes (the "CISA"). Accordingly, neither the Securities nor holders of the Securities benefit from protection under the Swiss Federal Act on Collective Investment Schemes or supervision by the Swiss Federal Banking Commission. Tefra Rule: TEFRA C Product Category: Capital or coupon or both are protected

6 EU Savings Tax Classification: In Scope / Code 6 Applicable law: English Tax Redemption Amount: The Issuer may call for early redemption of the Structured Note due to a change in tax law as more particularly described in the Prospectus. The Calculation Agent must select a day at least 5 Exchange Business Days prior to the redemption date to calculate the fair market value of the Structured Note, less the costs of unwinding any underlying related hedging arrangements, and the Issuer must pay this amount on the redemption date. Any principal protection element under these Structured Note will not apply in the event of early redemption. Swiss Tax Treatment: This product is classified as transparent, where the majority of the return of the Structured Note part is in the form of a discount (IUP). Therefore, for private investors resident in Switzerland, the increase of the value of the Structured Note part (according to the Modifizierte Differenzbesteuerung ) at sale or maturity is subject to the Swiss Federal income tax as well as the cantonal and communal income tax. However, any gain derived from the option is considered as capital gain and therefore for such taxpayers in principle not subject to the Swiss federal income tax. This transaction is not subject to the Swiss withholding tax. Secondary market transactions are in principle subject to the securities turnover federal stamp duty ( Eidg. Umsatzabgabe ). Selling Restrictions: Any Covered Structured Note purchased by any person for resale may not be offered in any jurisdiction in circumstances that would result in

7 the Issuer being obliged to register any further prospectus or corresponding document relating to the Covered Structured Note in that jurisdiction. Europe: For EEA jurisdictions (EU member states plus Norway, Iceland and Liechtenstein) that have implemented the EU Prospectus Directive, the Final Terms and Base Prospectus for these Covered Structured Note DO NOT QUALIFY as a prospectus published in accordance with the requirements of the EU Prospectus Directive. Unless and until a prospectus has been published in accordance with the requirements of the EU Directive, these Covered Structured Note may not be offered or sold other than 1) in minimum denominations of, or total consideration per investor of at least, EUR 50,000 (or equivalent in other currencies) or 2) only to Qualified Investors; and/or (aggregated for all distributors) to less than 100 offerees that are not Qualified Investors per EEA jurisdiction. A "Qualified Investor" is a legal entity that (i) is authorised or regulated to operate in the financial markets or has the sole purpose to invest in securities; or (ii) meets two of the following three criteria (as shown in its last annual or consolidated accounts): (a) an average number of at least 250 employees during the last financial year; (b) a total balance sheet of more than EUR 43,000,000; and (c) an annual net turnover of more than EUR 50,000,000. For EEA jurisdictions that have not implemented the EU Prospectus Directive, sales must be in compliance with the law of that jurisdiction Holders of this Product are advised to read the selling restrictions described more fully in the relevant Terms and Conditions of this Product. The restrictions listed below must not be taken as definitive guidance as to whether this Product can be sold in a jurisdiction. Holders of this Product should seek specific advice before on-selling it. Hong Kong - This Product has not been offered and sold, and each purchaser represents and agrees that it will not offer and sell the Product in Hong Kong, by means of any document, other than to persons whose ordinary business is to buy and sell shares or debentures, whether as principal or agent, or in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32) of Hong Kong or to professional investors within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance, or in other circumstances which do not result in the document being a prospectus within the meaning of the Companies Ordinance. In relation to the issue of this Product, each purchaser represents and agrees that it has not issued and will not issue any advertisement, invitation or document relating to the Product, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the Product which is or is intended to be disposed of only to persons outside Hong Kong or only to professional investors within the meaning of the Securities and Futures Ordinance and any rules made there under. Luxembourg - This Product has not been approved by and will not be submitted for approval to the competent authorities in Luxembourg

8 (Luxembourg Stock Exchange and/or Commission de Surveillance du Secteur Financier) and consequently is not authorized for public offerings in Luxembourg. The Product might be sold on a private placement basis to sophisticated/institutional investors and/or a limited number of existing clients. As a guide, this Product should not be sold with a consideration of less than or equivalent. Singapore - This term-sheet and the Terms and Conditions relating to this Product have not been registered as a prospectus with the Monetary Authority of Singapore (the.mas.) under the Securities and Futures Act (Cap. 289) of Singapore (the Securities and Futures Act.). Accordingly, the Product may not be offered or sold or made the subject of an invitation for subscription or purchase nor may this Term sheet and the Terms and Conditions or any other document or material in connection with the offer or sale, or invitation for subscription or purchase of such Product be circulated or distributed, whether directly or indirectly, to the public or any member of the public in Singapore other than (1) to an institutional investor or other person falling within Section 274 of the Securities and Futures Act, (2) to a sophisticated investor (as defined in Section 275 of the Securities and Futures Act) and in accordance with the conditions specified in Section 275 of the Securities and Futures Act or (3) otherwise than pursuant to, and in accordance with the conditions of, any other applicable provision of the Securities and Futures Act. UK - This Product should not be sold with a consideration of less than EUR 1,000 or equivalent. USA - The Covered Structured Note have not been nor will be registered under the U.S. Securities Act of 1933 (as amended) and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except as permitted by Regulation S or Rule 144A under such Securities Act. Mexico - The Covered Structured Note have not been and will not be registered with the Registro Nacional de Valores (National Securities Registry) maintained by the Comisión Nacional Bancaria y de Valores (Mexican National Banking and Securities Commission) and may not be offered or sold publicly in Mexico. Under Article 8 of the Ley del Mercado de Valores (Securities Market Law) the Covered Structured Note may be offered pursuant to the private placement exemption contemplated therein, to Mexican institutional and accredited investors. Regarding the Underlying Participation: EXPLORATION STRATEGIES FOR NATURAL RESOURCES DEFINITIONS AND

9 WARRANTIES EXPLORATION STRATEGIES FOR NATURAL RESOURCES DEFINITIONS AND WARRANTIES Natural Resources can be: MINERAL RESOURCES such as in this case Gold, Tantalum, Niobium and Rare Earths, etc. HYDROCARBONS (HC) RESOURCES such oil and/or gas. There is no entry of Grassroots (Greenfield) exploration projects into our portfolio because of their intrinsic uncertainties, but only projects showing a reliable Brownfield level where previous exploration has been conducted to some extent within geological terrains within close proximity to known ore deposits or HC occurrences. General Definition of Exploration Value Chain Phase 1: Target Generation Commodity selection Location Entry level Minerals legislation License application Company registration Phase 2: Base line geological information Geological map coverage Geophysical coverage Remote sensing coverage Previous exploration activity and Research Phase 3: Fieldwork Extensive sampling and analysis - Geophysics Test drilling Phase 4: Follow Up Drilling for more exact delineation of ore or gas/oil reservoirs Environmental studies Impact on local social and environmental issue Phase 5: Feasibility Ore or gas/oil RESERVE calculations aiming at 1 P Metallurgical test work, bulk sampling, gas/oil well testing

10 TIME SCHEDULE AND PARTICULARITIES WITH EXPLORATION VALUE CHAIN The above Phase 1 can be achieved within a period of a few days up to some weeks. This is especially true in cases where existing licenses and/or (mining) company registrations can be taken over shortly, or assigned legally in favor of the own portfolio. Phase 2 would be based on some essential requirements to meet the above Brownfield definition. In case of Mineral Resources: Near-surface mineralization (e.g. supergene enrichment zone with porphyry copper deposits, or pegmatite dikes and veins), and where open pit mining is a realistic perspective, at least for the first ten years of production; Geological mapping with sufficient tectonic inventory (faults and fractures etc.); Indicative minerals inventory (e.g. chlorite group for hydrothermal alteration, or epidote for possibly elevated levels of REE/REO etc.); Indicative samples (grading, grade continuity); Mining history of the region in question and/or assignment to known regional or provincial mineral occurrences. These data will be sufficient to delineate mineralizations and to categorize them as Inferred Mineral Resources (JORC, 2004). A first economic value can be derived by using the following formula that we have developed in order to assess the likely economic size of a deposit, at an early stage of the Exploration Value Chain already: Minimum gross value (US$) of the target element = V x D x G x Ch x Cv x P where V is the volume (m3) of the mineralization in question ( Ore Reservoir ), D is mean density (g/cm3), G is likely minimum grade (> 0 to 1) beyond defined cut-off level, Ch is a horizontal grade continuity factor (> 0 to 1), Cv is a vertical grade continuity factor (> 0 to 1), and P is the actual market price in US$ per ton of the commodity in question. This initial evaluation can be performed within a six (6) months period. For onshore / offshore Hydrocarbons Resources, especially concerning deep occurrences: Existing exploration well ( wild cat ); Log-data and formation testing; Seismic (2D) profiles; Regional geological model, tectonics and stratigraphic column; Systematically linked with the USGS World Petroleum Resources Project (Total Petroleum Systems and Assessment Units). These data will enable a de novo estimation of the deposit gross value by using a deterministic method where a single discrete value for each parameter in the volumetric formula used by us (cf. G.L. Dolton and R.A. Crovelli: Assessment Methodology for Deep Natural Gas Resources, USGS Bulletin 2146-O, 1997, p ) is selected, based on our estimation of the most likely value for the Probable Reserve category. When a single value has to be taken out from its reported probability range, the value representing a probability of equal to or greater than 95 % will be used.

11 Within a period of six (6) months, we will be able to perform the estimation of a gross value (US$), for example with gas defined as non-associated recoverable gas equivalent (BCGG) in the category Probable (P50 or 2P). As in the USA, we consider a reserve volume of > 80 BCFG as high. A volume of 30 BCFG is regarded commonly as a minimum threshold to be economic. For oil (bbl) we use a similar procedure in the Probable category (P50, 2P). In Phase 3 and 4 Resources are constantly upgraded to Indicated Mineral Resources, corresponding to Probable Mineral Reserves when specific requirements are met according to JORC (2004), and to Measured Mineral Resources (Proved Reserves), or from 2P to 1 P level. At the same time, the above estimated (minimum) gross values for the commodities in question will be more precisely defined. The time need for the phase 3 to 5 period is at minimum 18 to 36 months.

12 Disclaimer: Please note that the final terms and conditions may differ from this term-sheet. It is therefore important that you read the final terms when they become available on or around the Payment Date of this product on The password will be sent to you on or shortly following the trade date. The requirements for a public offer in a Member State of the European Economic Area are not fulfilled. Consequently, the securities may not be offered to the public in any of the Member states of the European Economic Area. Please note that the final terms and conditions may differ from this termsheet. It is therefore important that you read the final terms when they become available on or around the Payment Date of this product on The password will be sent to you on or shortly following the trade date. This term sheet has been prepared by International Finance Bank. This term sheet is for discussion purposes only, and all matters arising from it will be governed by English law unless expressly agreed otherwise. It should not be construed as a solicitation, offer or commitment by International Finance Bank or any of its affiliates to enter into a transaction, nor does it attempt to describe all the relevant terms of the transaction referred to in it. Instead, it is intended to outline certain basic points of business understanding around which a transaction could be structured. Since any terms quoted are indicative they are subject to change at any time without notice. Numerous assumptions have been made in the preparation of this term sheet and no assurance can be given as to its accuracy and/or completeness. Any subsequent offer by International Finance Bank or any of its affiliates to enter into a transaction will be made on the terms, and will be subject to the conditions, specified by it. If a transaction is entered into, its terms will be found entirely in the final documentation; this term sheet may not be used to construe such terms and will be superseded in its entirety by the final documentation to the exclusion of all prior written and oral communications. This term sheet should not, therefore, be regarded as containing any representations concerning the content of such terms or any other matter. Accordingly neither International Finance Bank nor any of its affiliates assumes any responsibility for the contents of this term sheet, or for any written or oral communications in connection with it (or any prospective transaction), regardless of any negligence on their part. This does not, however, exclude any liability that may arise under the Financial Services and Markets Act Recipients of this term sheet should undertake an independent review of the legal, tax, regulatory and accounting implications of the transaction referred to in it in order to determine the suitability of the transaction described in this term sheet in the light of their particular objectives. International Finance Bank may have arranged to pay an introducing fee or other remuneration to a third party in relation to this transaction or service provided to you. Details of third party and amount paid will be made available on request by Professional clients of International Finance Bank (Mifid classification). International Finance Bank (or any affiliate which offers to enter to a transaction) is solely an arm s length contractual counterparty. It is not acting as an adviser or fiduciary, and neither this term sheet nor any communications from it should be treated as constituting financial, investment or other advice of any kind, or as a recommendation to enter into any transaction. No employee or agent of International Finance Bank or any of its affiliates has authority to give any advice or (except as expressly set out in the final documentation for any transaction) make any representations on its behalf in connection with this term sheet or any prospective transaction. International Finance Bank and its affiliates may have material interests that conflict with the interests of the recipient of this term sheet. For example, they may be dealing as a principal in any investments which are the subject of the transaction referred to in it and may have a long or short position in connection with such dealing. They may also be providing services to other persons in connection with these investments, may be acting as an underwriter in respect of them and/or may be acting as financial adviser or lending banker to the issuer of them. In connection with these activities, they may hold material information but will be under no obligation to take it into account or make it available to any person. This document is not for distribution to private customers and has been issued or approved for issue in the United Kingdom by International Finance Bank, and subject to limited regulation by the Financial Services Authority. Details on the extent of our regulation by the Financial Services Authority are available from us on request. Before investing in this product, clients should carefully consider the following additional risks: The credit risk of the issuer. Various market factors that may affect the value of the investment or the underlying assets, including but not limited to the impact of exchange rate volatility. The risk that the investment redeems prior to maturity at a time when reinvestment opportunities are not as favourable for the investor. The risk that the investor may receive substantially less than 100% of the Principal

13 Amount if they wish to liquidate the investment prior to maturity or, unless the product is capital protected, at maturity. This information is communicated by IFB LTD and/or its affiliates ("IFB"). IFB may from time to time, as principal or agent, have positions in, or may buy or sell, or make a market in any securities, currencies, financial instruments or other assets underlying the transaction to which the term-sheet relates. IFB may provide investment banking and other services to and/or have officers who serve as directors of the companies referred to in this term sheet. IFB's trading and/or hedging activities related to this transaction may have an impact on the price of the underlying asset and may affect the likelihood that any relevant barrier is crossed. IFB has policies and procedures designed to minimize the risk that officers and employees are influenced by any conflicting interest or duty and that confidential information is improperly disclosed or made available. In certain circumstances IFB sells these Covered Structured Note to dealers and other financial institutions at a discount to the issue price or rebates to them for their own account some proportion of the issue price. Further information is available on request. Financial transactions are complex and may involve a high risk of loss. Prior to entering into a transaction you should consult with your own legal, regulatory, tax, financial and accounting advisors to the extent you consider it necessary, and make your own investment, hedging and trading decisions (including decisions regarding the suitability of this transaction) based upon your own judgment and advice from those advisers you consider necessary. Save as otherwise expressly agreed in writing, IFB is not acting as your financial adviser or fiduciary in any transaction. This document is for information purposes only and should not be construed as an offer, recommendation or solicitation to conclude a transaction and should not be treated as giving investment advice. The terms of any investment will be exclusively subject to the detailed provisions, including risk considerations, contained in the Information Memorandum, Prospectus or other issuer documentation for the issue of the Covered Structured Note (the "Prospectus"). IFB makes no representation or warranty relating to any information herein which is derived from independent sources. This term sheet shall not be copied or reproduced without IFB's prior written permission. No action has been or will be taken in any jurisdiction that would permit a public offering of the securities described herein, save where explicitly stated in the Prospectus. The securities must be sold in accordance with all applicable selling restrictions in the jurisdictions in which they are sold.