Invest in a Credit-Linked Security linked to Ford Motor Co, returning 6.25% 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 27 April 2023 (PDS), along with the ‘C2 Accumulator – Deferred Purchase Agreement – Master PDS’ dated 21 October 2022 (Master PDS) before investing in this opportunity.
Overview
Ford Motor Co (Ford) s an American multinational automobile manufacturer headquartered in Michigan, United States. It was founded by Henry Ford and was incorporated on June 16, 1903. Ford sells automobiles and commercial vehicles under the ‘Ford’ brand, and luxury cars under its ‘Lincoln’ brand. Ford is listed on the NY Stock Exchange and is controlled by the Ford family (which has a minority ownership interest, but a plurality of the voting power).
The security provides Investors with the opportunity to make an AUD investment, yet gain exposure to returns based on the credit risk of Ford (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.
Note Disclosure Documents
- C2 Accumulator – Deferred Purchase Agreement – Master PDS (October 2022);
- C2 Market Linked Products Series 2023/1 – Ford Motor Co 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 | 6.25%pa (fixed), paid semi-annually |
| Maturity Date | 20 December 2026 |
| Issue Price | $100 |
| Minimum Investment | $10,000 |
| ABE Code | C2FF062526 |
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 Ford default, you may not receive the amount you have invested on maturity.
- Credit exposures to Ford –This return on this security incorporates a ‘credit transaction’ where the return is linked to the prices, levels, rates or contingencies related to a 3.75 year credit linked note (maturing on 20 December 2026) which is linked to a Ford bond, issued in USD and paying 4.346%, maturing on 8 December 2026 (Ford Bond). If Ford suffers a ‘credit event’ (eg bankruptcy, failure to make a payment in respect of the Ford 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 Ford (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 Ford. 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 Ford 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. If the Maturity Date is extended as a result of any Credit Event, coupons will not accrue beyond the original scheduled Maturity Date.
- 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);
- Indirect Investment Risk – Compared to a direct investment (including bonds) in Ford, 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 Ford, including if a Credit Event occurs.
- 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.