Invest in a Credit-Linked Security linked to Xerox Corporation, returning 7.86% p.a.
The information below is a summary of this investment opportunity. Investors must obtain and read the ‘Product Disclosure Document’ for this security dated 8 July 2024 (PDS), along with the ‘C2 Accumulator – Deferred Purchase Agreement – Master PDS’ dated 21 October 2022 (Master PDS) before investing in this opportunity.
Overview
Xerox Corporation (Xerox) is an American corporation which produces office and production print technology. It operates in more than 160 countries in more than 160 countries. Today, Xerox is continuing their legacy of innovation with disruptive technologies, spanning augmented reality to automation and 3D printing.
This security a ‘Credit-Linked Security issued by an Australian Financial Services Licensee, and is not a corporate bond issued by Xerox.
The security provides Investors with the opportunity to make an AUD investment, yet gain exposure to returns based on a USD denominated bond issued by Xerox. A direct investment in the Xerox bond is an opportunity usually available only to investors wishing to make a market-sized investment (USD 500,000) denominated in a foreign currency).
By investing in this security, all currency exposure has been fully hedged by the Issuer and investors will receive regular income in the form of coupons and 100% of the face value of your investment on maturity – all in AUD.
Note Disclosure Documents
- C2 Accumulator – Deferred Purchase Agreement – Master PDS (March 2022);
- C2 Market Linked Products Series 2024/3 – Xerox Corporation PDS
Marketing Documentation
Key Terms
| Issuer | Issuer C2 Specialist Investment Pty Ltd ACN 622 433 032 |
|---|---|
| Custodian | C2 Nominees Pty Ltd (ACN 624 366 981 |
| Arranger | C2 Financial Services Pty Ltd ACN 621 428 635 AFSL 502171 |
| Coupon | 7.86%pa (fixed), paid quarterly |
| Maturity Date | 20 June 2029 |
| Issue Price | $100 |
| Minimum Investment | $10,000 |
| ABE Code | C2XF078629 |
Risks
This is an overview of the main risks associated with this investment. Further (and more complete) details of the main risks associated with this security are set out in the PDS.
- Capital invested is at risk – There is no capital protection or guarantee by the Australian government or any other party (including the Issuer). Therefore, if the Issuer or Xerox default, you may not receive the amount you have invested on maturity.
- Credit exposures to Xerox – The return on this security incorporates a ‘credit transaction’ where the return is linked to the prices, levels, rates or contingencies related to a five year credit linked note (maturing on 20 June 2029) which is linked to a Xerox bond, issued in USD and paying 6.750%, maturing on 15 December 2039 (Xerox Bond). If Xerox suffers a ‘credit event’ (eg bankruptcy, failure to make a payment in respect of the Xerox Bond etc) (Credit Event), you may lose some or all of your investment.
- Credit Exposure to Issuer and any ‘Hedge Counterparty’ – In addition to the credit risks associated with Xerox (as outlined above), investors also bear credit risk with respect to the Issuer and, indirectly, to any entity with whom the Issuer has entered into a contract to hedge its obligations under the security (Hedge Counterparty).
- Credit Rating – credit ratings do not constitute a guarantee of the quality of these ‘credit-linked securities’ or of Xerox. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the rating agency. Further,, the rating agency may fail to make timely changes in credit ratings in response to subsequent events and, therefore, a credit rating may not fully reflect the true risks under is ‘credit-linked security’.
- Historical Performance – Historical performance of Xerox or the Issuer are not an indication of their future performance.
- Liquidity risk – If you want to sell your securities before the Maturity Date, there may be a delay, or you may not be able to do so, or may not be able to do so within your desired timeframe.
- Extended Maturity. The Maturity Date may be extended in the case of a Credit Event or extension by the Issuer. Delays in maturity may be up to 6 months or more.
- Early Maturity -In certain circumstances the Issuer may elect to redeem these securities early (eg the Issuer reasonably determines that it may not be able to rely on the hedging contracts it has entered into with the Hedge Counterparty, you become bankrupt or insolvent etc).
- Custodian risk. The Custodian is a related party of the Issuer. There is a risk that the Custodian may be unable to perform its obligations under the Custody Deed and investors may not receive certain money when such amounts become due to them. However, the Custodian is a special purpose vehicle set up to act as Custodian for these types of securities and other structured products and has no other obligations.
Disclaimer: This webpage has been prepared by ABE Distribution Pty. Ltd ACN 673 177 912 (“ABE”). ABE is a Corporate Authorised Representative number 1307088 of Novus Capital Limited ACN 006 711 995 AFSL 238168. The information contained in it is of a general nature only. It was prepared without considering your financial needs, circumstances and objectives. Before investing in this security, you should consider whether it is appropriate for your circumstances and review the Master PDS and PDS. This website may contain links to other third-party websites, some of which require a subscription to read. Such links are for your convenience only, and ABE does not recommend or endorse these third-party sites. No representation or warranty is made as to the accuracy, completeness or reliability of any estimates, opinions, conclusions, or other information contained in this website. This website may contain certain forward-looking statements. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors, many of which are beyond our control. Past performance is not an indication of future performance. To the maximum extent permitted by law ABE disclaims all liability and responsibility for any direct or indirect loss or damage that you may suffer as a result of relying on anything on this webpage.