Information booklet 16 April 2013 International 6.125% Sterling Fixed Rate Bonds Due 2020 Lead Manager and Authorised Offeror Canaccord Genuity Limited Authorised Offerors Any decision to purchase or sell the Bonds should be made solely on the basis of a careful
Important information This is a financial promotion approved, for the purposes of section 21 of FSMA, by Canaccord Genuity Limited, which is authorised and regulated by the Financial Conduct Authority, and made by International Personal Finance plc ( IPF ) which is the legal entity that will issue the Bonds. This Information Booklet relates to the International Personal Finance plc 6.125% bonds due 2020 (referred to in this Information Booklet as the Bonds ). A base prospectus dated 7 December 2012 and a supplemental prospectus dated 3 April 2013 (together, the Prospectus ), which comprises a prospectus for the purposes of the Directive and the final terms relating to the Bonds dated 16 April 2013 (the Final Terms ) have been prepared and made available to the public in accordance with the Directive. Copies of the Prospectus and Final Terms are available from the website of the London Stock Exchange (www.londonstockexchange.com/prices-and-markets/ markets/prices.htm) and in hard copy for inspection only during usual business hours at the specified office of the paying agent Citibank, N.A, London branch, 13th Floor, Citigroup Centre, Canada Square, Canary Wharf, London, E14 5LB, and the registered office of International Personal Finance plc at Building Three, Leeds City Office Park, Meadow Lane, Leeds LS11 5BD. This Information Booklet is not an offer for the subscription or sale of the Bonds. The Bonds may only be sold in Jersey in compliance with the provisions of the Control of Borrowing (Jersey) Order 1958 and any circulation in Jersey of any offer for subscription, sale or exchange of the bonds may only be made by a person or persons authorised to conduct investment business under the Financial Services (Jersey) Law 1998, as amended. Any offer for subscription, sale or exchange of the Bonds within the Isle of Man must be made (i) by an Isle of Man financial services licence holder licensed under section 7 of the Isle of Man Financial Services Act 2008 to do so or (ii) in accordance with any relevant exclusion or exemption therefrom. Any promotion, offer for subscription, sale or exchange of the Bonds in or from within Guernsey or otherwise directed at Guernsey residents may only be made in accordance with the Protection of Investors (Bailiwick of Guernsey) Law, 1987 as amended, the rules, regulations or guidance made or issued thereunder or any relevant exemptions therefrom. The Bonds have not been and will not be registered under the United States Securities Act of 1933 (the Securities Act ) and the Bonds, which are in bearer form, are subject to certain U.S. tax law requirements. The Bonds may not be offered, sold or delivered within the United States of America or its possessions or to, or for the account or benefit of, U.S. persons except in certain transactions. For additional information on the restrictions on offering or selling the Bonds, see the Subscription and Sale section in the Prospectus and section A of the Final Terms. P02
Important information (cont d) of 100 per Bond. Interest will be paid in arrear in two semi-annual instalments of 3.0625 per Bond on 8 May and 8 November in each year until 8 May 2020. Unless previously redeemed or purchased and cancelled (as further described in Key features of the Bonds Early redemption features on page 7), the Bonds will mature on 8 May 2020 (the Maturity Date ) and will be repayable by IPF at their face value of 100 per Bond. IPF has also provided its consent for certain other financial intermediaries to use this document, the Prospectus and the Final Terms for the purposes of making offers of the Bonds to potential investors in the United Kingdom, Jersey, Bailiwick of Guernsey and the Isle of Man subject to the restrictions referred to above. The conditions attached to the giving of this consent are set out on page 6 of the Final Terms. Any offer to sell the Bonds made or received from any other party, or by any party after the End of Offer Date, may not have been made with the consent of IPF as required by EU law, therefore investors should check with such party whether or not consent has been given. The Bonds can be purchased through a stockbroker including those named on the front of this Information Booklet (Authorised Offerors described below) and the minimum initial amount of Bonds you may buy is 2,000. Thereafter the Bonds can be bought and sold in multiples of 100 face value. A copy of the Prospectus and Final Terms should also have been provided to you by your stockbroker and you are referred to What is a bond? on page 6 and Key risks of investing in the Bonds on page 9. Authorised Offerors and offer period: a number of offerors have been approved by IPF to provide this document, the Prospectus and the Final Terms to potential investors in the Bonds in the period from 16 April 2013 until 12 noon (London time) on 30 April 2013 or such earlier or later date as agreed between IPF and Canaccord Genuity Limited and announced via the Regulatory News Service ( RNS ) of the London Stock Exchange (the End of Offer Date ). The current Authorised Offerors are listed on the front cover of this Information Booklet. P03
About the London Stock Exchange. IPF is a public limited company whose ordinary shares are listed on the London Stock Exchange. As at 16 April 2013, IPF has a market capitalisation of c. 1bn. IPF has a senior unsecured long-term credit rating of BB+ from Fitch Ratings Ltd and it is expected that the Bonds will be assigned the same credit rating. IPF and its subsidiaries (together, the Group ) serves consumers with average to below average incomes and operates in Poland, the Czech Republic, Slovakia, Hungary, Romania and Mexico from a network of 205 branches across these six countries and has approximately 6,330 employees and 28,500 agents. The Group s head office is in Leeds in the United Kingdom. The Group has announced plans to expand its footprint into Bulgaria and Lithuania in 2013. P
History The Group was established in 1997, as the international division of Provident Financial plc, a UK-based home credit provider, to develop home credit businesses in growth markets. In July 2007, the Group demerged from Provident Financial plc. As part of the demerger agreement from Provident Financial plc, as agreed between parties, IPF has the exclusive rights to use the Provident brand name in all countries excluding the United Kingdom and Ireland. Since establishing businesses in Poland and the Czech Republic in 1997, the Group opened further operations in Hungary and Slovakia in 2001, Mexico in 2003 and Romania in 2006. All of the Group s businesses have been profitable since 2010. The Group reported pre-tax profits of 95.1 million in 2012**. IPF s customers typically borrow between 50-1,000 and repay their loans over a period of around 12 months with small weekly repayments reflecting their household budget. The loans are in local currency and, typically, are delivered to the customer s home and the repayments are collected from the customer s home weekly by the Group s agents. For the majority of home collected loans, the total amount repayable on the loan is fixed at the outset and there are no additional penalty charges or interest as a result of missed payments. This applies regardless of the number of missed payments. Agent remuneration is based predominantly on the value of collections. Typically, an established agent will receive around 80 per cent. to 90 per cent. of their income from collections. This weighting of income helps to promote responsible lending. Financial fundamentals Gearing (Covenant max. 3.75x) Interest cover (Covenant min. 2.0x) 2010 1.0x 3.8x 2011 0.9x 3.4x 2012 0.8x 3.3x The credit vetting of customers and, where the home service is provided, the provision of the loan and the collection of the weekly instalments are all performed in the convenience of the customer s home by the agent. Credit vetting is supported by central credit scoring systems and the Group employs standard operational and administrative processes across all of its markets using a consistent IT platform. Equity to receivables 54.5% 58.5% 57.8% Strategy Return on equity Profit before tax ( M) 22.2% 92.1* * 2010 profit stated before exceptional charge of 3.9M. ** 2012 profit stated before exceptional charge of 4.8M. 22.7% 100.5 20.1% 95.1** The Group s strategy is centred on accelerating growth and increasing shareholder value. The four key areas of focus are to expand the Group s geographic footprint; improve customer engagement; develop the Group s sales culture; and improve the skill base and technology to execute the strategy. P05
a bond? by a company seeking to raise funds from interest (the coupon the bondholder) periodically until the date How to trade the Bonds section on page 10. Interest on the Bonds The level of interest offered on the Bonds is fixed when the Bonds are issued. For every 100 face value of the Bonds held, IPF will pay an interest amount of 3.0625 on each of 8 May and 8 November each year up until the Bonds are repaid. The Bonds will be redeemed at 100% of their face value on 8 May 2020 assuming IPF does not go out of business or is unable to pay its debts or otherwise insolvent, and assuming the Bonds have not been redeemed or purchased and cancelled early (as described under Key features of the Bonds Early redemption features ). The Bonds are not covered by the Financial Services Compensation Scheme. You are referred to Key risks of investing in the Bonds on page 9. P06
of the bonds Issuer Guarantors International Personal Finance plc. The Bonds are guaranteed by a number of subsidiaries of IPF, so that in the event that IPF becomes unable to pay its debts or otherwise insolvent, you may have a claim against the Guarantors (full details of which are set out in the Prospectus (page 96) and Final Terms). However, in the event that IPF or the Guarantors become unable to pay their debts or otherwise insolvent you may recover your investment ahead of subordinated bondholders and shareholders of IPF or the Guarantors. Each of the Guarantors is a subsidiary of the Issuer and investors should note that, as a result, in the event of IPF going out of business or becoming insolvent, there is a likelihood that the Guarantors will also be facing financial difficulties and/or insolvency. Interest rate 6.125% per annum. Interest will be paid in arrear on 8 May and 8 November each year until the Bonds are repaid. The first interest payment is due to be made on 8 November 2013, and the last interest payment is due to be made on the Maturity Date. begins to accrue 8 May 2013. Term of the Bonds 7 years. Bonds mature and are due to be repaid) 8 May 2020. 100. Although the face value of each Bond is 100, it is not possible to purchase less than 2,000 in face value of the Bonds from your offeror in the initial distribution. Documentation The Prospectus and the Final Terms. The amount of the Bonds to be issued will be announced by RNS on or around 30 April 2013. Issue price 100% of the face value. Redemption At 100% of the face value on the Maturity Date assuming that IPF remains in business and is able to pay its debts in full and that the Bonds have not been repaid early or purchased and cancelled. P
Early redemption features: The Bonds are due to be redeemed on the Maturity Date unless they are redeemed early due to (a) taxation reasons or (b) a change of control, all as described below: a) Early redemption due to changes in relevant tax laws: In certain circumstances, as set out in 6 (c) of the Terms and Conditions of the Notes section of the Prospectus, a change in United Kingdom or relevant jurisdiction tax law or regulations may allow the Bonds to be redeemed early at the option of IPF at 100% of their face value, together with any accrued and unpaid interest. b) Early redemption following a change of control: The Bonds may be redeemed early at the option of the Bondholder at 101% of their face value, together with any accrued and unpaid interest if a Change of Control Put Event occurs as set out in 6(f) of the Terms and Conditions of the Notes section of the Prospectus. Negative pledge: So long as any of the Bonds remain outstanding, IPF has undertaken that the Group will not create any security interest upon its assets in favour of any other listed bonds without also according similar security to the Bonds, subject to certain exceptions. Financial covenants: So long as any of the Bonds remain outstanding, IPF has undertaken that: o The ratio of EBITA (as defined in 10 of the Terms and Conditions of the Notes section of the Prospectus) to interest payable, as each is determined on a half yearly basis, will not be less than 2.0 to 1.0; and o The ratio of total borrowings to net worth, as each is determined on a half yearly basis, will be no greater than 3.75 to 1.0. Credit ratings of the Bonds: the Bonds are expected to be rated BB+ by Fitch Ratings Ltd. Credit ratings are explained in more detail on page 10 in Further Information Credit ratings. Trading: Bondholders will, subject to market conditions, be able to buy Bonds or sell their Bonds during the term of the Bonds. See How to trade the Bonds below for more details. Bond ISIN: XS0919406800 Amount of the Bonds to be issued: The final amount will be published by RNS announcement on or around 30 April 2013. More information: www.ipfin.co.uk/retail-bond P08
in the Bonds A number of important risks relating to an Fuller details and a more comprehensive list of risk factors relating to IPF and the Bonds are set out in the Prospectus on pages 25 to 43. Please read them carefully. The Bonds are senior, unsecured debt of IPF and rank equally with IPF s other borrowing facilities. If IPF goes out of business or is unable to pay its debts or otherwise insolvent or enters into a financial restructuring, you may lose some or all of the money that you have invested in the Bonds. The market price of the bonds is variable and if you choose to sell your Bonds in the open market at any time prior to the Maturity Date, the price you receive from a purchaser may mean that you get back less than your original investment. However, the market price of the Bonds has no effect on the interest amounts due or what you will be due to be repaid on the Maturity Date if you hold on to the Bonds until then. There is no certainty as to what the market price for selling or buying the Bonds will be at any time. If prevailing market conditions reduce market demand for the Bonds, the market price may be adversely affected. Moreover, notwithstanding that Canaccord Genuity Limited will act as market maker (as explained below) for the Bonds, if trading activity levels are low, this may severely and adversely impact the price that an investor would receive if he/she wishes to sell his/her Bonds. P09
Further information Credit ratings This Information Booklet refers to the credit rating of the Bonds. Credit ratings can be a useful way to compare the credit risk associated with different companies and their securities. Credit ratings are assigned by independent companies known as ratings agencies, such as Fitch Ratings Ltd ( Fitch ). The Bonds are expected to be rated BB+ (Outlook Stable) by Fitch. Debt obligations such as bonds may be rated by Fitch on scale from AAA (most secure/best rating) to D (most risky/worst rating). Information currently available on the Fitch website describes the general meaning of a BB credit rating as follows: BB ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial flexibility exists which supports the servicing of financial commitments. The information also explains that: The modifiers + or - may be appended to a rating to denote relative status within major rating categories. A credit rating may not reflect the potential impact of all risks related to structure, market, additional factors set out in the Risk Factors section of the Prospectus on pages 25 to 43 and other factors that may affect the value of the Bonds. A credit rating is not a recommendation to buy, sell or hold the Bonds and may be subject to suspension, reduction or withdrawal at any time by the assigning agency. Holding the Bonds The Bonds will be held in custody for you by your offeror, or as may be arranged by your offeror. At the time of issue the bonds may, subject to certain conditions and limits, be invested in a stocks and shares ISA or SIPP. However, you should seek professional advice as to whether the specific terms of your arrangement permits investments of this type. See also Taxation of the Bonds, below. Taxation of the Bonds Please read the section of the Prospectus entitled Taxation for general information regarding certain UK and EU tax aspects in relation to the Bonds. If you are considering investing in the Bonds, you should consult your personal tax advisors for advice about the tax consequences for you; these may be complex and will depend on your individual circumstances and tax law and practice at the relevant time (and so may change during the life of the Bonds, as may the rates or basis of taxation). The comments in the Taxation section of the Prospectus relate only to individuals who are the absolute beneficial owners of the Bonds and the interest paid on them, and may not apply where the relevant income is treated for UK tax purposes as the income of any other person, or to certain special classes of taxpayer (such as dealers or persons connected with IPF) to whom special rules may apply. It is the responsibility of every investor to comply with his or her tax obligations. All amounts, yields and returns described herein or in the Prospectus and Final Terms are shown before any tax impact. The Bonds are expected to be listed on the Official List of the UK Listing Authority and admitted to trading on the regulated market of the London Stock Exchange. The Bonds are also expected to be eligible for the London Stock Exchange s electronic Order Book for Retail Bonds ( ORB ). The ORB was launched in response to private investor demand for easier access to trading Bonds with the aim of providing a transparent and efficient mechanism for UK retail investors to access the bond markets. The Bonds are tradable instruments and prices will be quoted in the market during trading hours. The Bonds are expected to be supported in a marketmaking capacity by Canaccord Genuity Limited. Market-making means that a person will maintain prices for buying and selling the Bonds. Canaccord Genuity Limited will be appointed as a registered market maker through the ORB (www.londonstockexchange.com/ exchange/prices-and-markets/retail-bonds/retail-bonds-search. html) when the Bonds are issued. Bondholders should, in most normal circumstances, be able to sell their Bonds during normal trading hours, subject to market conditions (see the Key risks of investing in the Bonds section above). As with most investments, there is a risk that a bondholder could get back less than their initial investment or lose their initial investment. Pricing information for sales and purchases of the Bonds in the market will be available throughout trading hours on the ORB. Fees IPF will pay the fees set out in the Final Terms. Canaccord Genuity will receive total fees and commissions of 1.00% of the amount of the Bonds issued, out of which the Authorised Offerors will receive a distribution fee of 0.50% of the amount of the Bonds allotted to them. Authorised Offerors may charge additional fees and expenses under their arrangements with particular investors, and neither IPF nor Canaccord Genuity Limited will be party to such arrangements. P10
List of Authorised Offerors Founders Court Lothbury London EC2R 7HE 88 Wood Street London EC2V 7QR Standon House 21 Mansell Street London E1 8AA 46 Grosvenor Street London W1K 3HN 9 Bond Court Leeds LS1 2JZ Selftrade Boatman s House 2 Selsdon Way London E14 9LA P11
Disclaimer Before buying or selling a bond you should ensure that you fully understand and accept the risks relating to an investment in the Bonds before making such an investment, otherwise you should seek independent advice. Canaccord Genuity Limited, whose registered office is 88 Wood Street, London, EC2V 7QR, is acting for itself and will not act and has not acted as your legal, tax, accounting or investment adviser and will not owe you or your clients any fiduciary duties in connection with a purchase or sale of the Bonds, or any related, transaction. No reliance may be placed on Canaccord Genuity Limited and IPF for advice or recommendations of any sort. Canaccord Genuity Limited makes no representation or warranty to you with regard to the information contained in the Prospectus and Final Terms. This Information Booklet contains information derived from the Prospectus and Final Terms and is believed to be reliable but, in so far as it may do so under applicable law, Canaccord Genuity Limited does not warrant its completeness or accuracy. Canaccord Genuity Limited and IPF are not responsible for any advice or service you may receive from a third party in relation to the Bonds. Canaccord Genuity Limited and its affiliates, connected companies, employees and/or clients may have an interest in securities of the type described in this Information Booklet and/or in related securities. Such interest may include acting as marketmakers in such securities. This document does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase, any Bonds. Any purchase or sale of Bonds should only be made on the basis of the information contained in the Prospectus and Final Terms, available as described above. P12