Invest in a Bond-Linked Security linked to Rolls Royce PLC, returning 5.50% 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 10 June 2022 (PDS), along with the ‘C2 Accumulator – Deferred Purchase Agreement – Master PDS’ dated 18 March 2022 (Master PDS) before investing in this opportunity.
Overview
Rolls Royce Plc (Rolls Royce) is the main trading entity of the Rolls Royce Group which operates in the aerospace and defence company. It designs, manufactures and distributes power systems for aviation and other industries. Rolls-Royce is the second-largest maker of aircraft engine, the fourth largest commercial airline engine manufacturer and the 16th largest defence contractor. It also has major businesses in the marine and energy sectors. Rolls Royce Holdings Plc (the holding company of the Group) is listed on the London Stock Exchange and its shares are included in the FTSE 100.
This security a ‘Bond-Linked Security issued by an Australian Financial Services Licensee, and is not a corporate bond issued by Rolls Royce.
The security provides Investors with the opportunity to make an AUD investment, yet gain exposure to returns based on the credit risk of Rolls Royce (an opportunity usually available only to investors wishing to make a market-sized investment (USD 500,000) denominated in USD).
By investing in this security, investors will receive regular income in the form of coupons and 100% of the face value of your investment on maturity – all in AUD. All currency exposure has been hedged by the Issuer, and will apply except in certain situations described in the ‘Risks’ section below.
Note Disclosure Documents
- C2 Accumulator – Deferred Purchase Agreement – Master PDS (March 2022);
- C2 Bond Linked Securities Series 4 – Rolls Royce PLC PDS
Marketing Documentation
Key Terms
| 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 | 5.50%pa (fixed), paid semi-annually |
| Maturity Date | 19 November 2026 |
| Issue Price | $100 |
| Minimum Investment | $10,000 |
| ABE Code | C2RF055026 |
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 Rolls Royce default, you may not receive the amount you have invested on maturity.
- Credit exposures to Rolls Royce – This return on this security is linked to the Rolls Royce Senior Unsecured Note, issued in EUR and paying 4.625%pa, maturing on 16 February 2026 (Rolls Royce Bond). The performance of the Rolls Royce Bond depends on Rolls Royce meeting its obligations under the Rolls Royce Bond. Therefore, investors have an exposure to the credit worthiness of Rolls Royce.
- Value of the Units before the Maturity Date – The value of this bond-linked security before the Maturity Date will be determined by many factors, including the occurrence of an Early Maturity Event (eg Rolls Royce exercises its right to redeem the Rolls Royce Bond before the maturity date of the bond, if Rolls Royce default under its obligations under the Rolls Royce or if there is a negative impact on the rating of the Rolls Royce Bond arises as the result of a ‘change of control’ of Rolls Royce). In the case of an Early Maturity Event, the securities will be redeemed early and the foreign exchange hedge which has been put in place by the Issuer may not apply and investors may have exposure to the AUD/EUR exchange rate.
- Historical Performance – Historical performance of Rolls Royce 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.
- Indirect Investment Risk – Compared to a direct investment (including bonds) in Rolls Royce, the investor will not be entitled to receive dividend or other payments (if any) nor have any voting rights for corporate actions to do with Rolls Royce.
- 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.