The Current Prospects for Risk-Sharing Sukuk

Transcription

1 The Current Prospects for Risk-Sharing Presented by : Rafe Haneef, CEO of HSBC Amanah Malaysia Berhad Date : 11 September 2013

2 I. The Market

3 Evolution of the International Market Stellar growth however all landmarks achieved so far involve risk-transfer 1st global sovereign 1st European 1st subordinated bank capital 1st by US issuer 1st unrated 10-year 1st international 30 year 2002 Government of Malaysia 2004 State of Saxony- Anhalt 2007 Maybank 2009 GE Capital 2012 Government of Dubai 2013 Saudi Electricity Company USD 600mn 5 year EUR 100mn 5 year USD 300mn 10 year Subordinated USD 500mn 5 year USD 600mn / 650mn 5 / 10 year Dualtranche USD 2bn / 2bn 10 / 30 year Dualtranche Size of Global Market* (USD bn) State of Qatar 2006 Khazanah Nasional 2009 International Finance Corp Nomura 2012 Abu Dhabi Islamic Bank USD 700mn 7 year USD 750mn 5 year Exchangeable USD 100mn 5 year USD 100mn 2 year USD 1bnTier 1 Perpetual 1st GCC 1st exchangeable 1st by non- Islamic Supranational 1st by Japanese issuer 1st perpetual *Source: Dealogic 10 th June

4 Global Market Update Some signs of risk-sharing emerging but 98% of sukuk remain risk-transfer Historical Issuance Volume Since 2008 Volume by Region YTD USD Billions Total volume issued globally since 2008 has surpassed USD 160 bn 19.5 Malaysia UAE Saudi Indonesia Qatar Turkey Others YTD The last USD issuance in the market was the USD 1bn 1.535% 5 year by the Islamic Development Bank, the only Supranational issuer to issue in Islamic format. This however is a risk transfer sukuk % 21% 8% 57% Malaysia Middle East (Excl. Saudi Arabia) Saudia Arabia Rest of the World Volume by Currency YTD 7% 10% The landmark transaction this year has been the dual-trache 10 & 30-year for Saudi Electricity Company (SEC). This marked the first ever issuance of a 30-year in the international debt capital markets. No risksharing feature though. 28% 55% Hybrid capital continues to be an important theme in the market, with Dubai Islamic Bank issuing a US$1bn Tier-1 in March and Bank Asya issuing a US$250m LT II in April. This deal featured elements of risk sharing. Since 2010, project finance sukuk have become popular in Malaysia. Notable deals include: - TTM (Trans-Thai Malaysia) Bhd (2010) MYR 600m with a maximum tenor of 15 years; - Tanjung Bin Energy Issuer Bhd (2012) MYR 3.29 billion with a maximum tenor of 20 years; - Kimanis Power Sdn Bhd (2012) MYR 860 million with a maximum tenor of 16 years; and - TNB Northern Energy Bhd (2013) MYR billion with a maximum tenor 23 years. These recent issues demonstrate that some elements of risk-sharing are beginning to emerge. MYR USD SAR Other Volume by Tenor YTD 22% 46% 22% 10% >10.1 Source: HSBC, Dealogic 3 rd September

5 II. Types of

6 Definition and Classifications of is a plural of the word sakk which means certificate, legal instrument, deed or cheque. Sakk may sound unfamiliar to many, but it is actually a forerunner of the word cheque It is a well-documented fact that many commercial practices and customs of the Muslim world were transmitted to medieval Europe through Islamic Spain. Types or classifications of : - Senior Unsecured in a winding-up, ranked junior to secured creditors but senior to equity holders Risk Transfer - Subordinated in a winding-up, ranked junior to unsecured creditors but senior to equity holders Risk Transfer - Secured or asset-backed in winding-up, ranked senior to all creditors and equity holders Risk Sharing Examples of risk sharing sukuk include: - Project finance - Hybrid perpetual 6

7 III. Project Finance

8 Risk-Sharing in a Project Finance Transaction Risk Mitigant Risk Mitigant Construction Technology Construction contracts Completion guarantee from sponsors Performance security from contractor Track record, LT services agreement, licensing agreement Financiers Sponsor(s) Project Company 30% Equity Sponsors FX / Rates / Inflation Regulatory / Country Relationship, experience, letter of credit Indexation, hedging Country rating, contracts, Due diligence if necessary, political risk insurance Operation / Maintenance Market Experience of operator, O&M contract LT purchase agreements, competitive analysis, market study Export Credit Agency Guarantee (Optional) 70% Non-recourse financing Tax / Accounting Environment / Reputation Natural Disaster Due diligence Due diligence, experience of sponsors / operator Insurance, contracts Supplier LT supply contract, market study Structure Contracts, legal due diligence 8

9 Case Study 1: Project Finance Structure MYR 860 million Issuance by Kimanis Power Sdn Bhd The Kimanis structure is based on the combination of Istisna and Ijarah concepts At inception, KImanis sells the project to the Trustee, acting on behalf of the investors, for a spot payment with deferred delivery terms (upon completion), and the Trustee leases the to-be project to Kimanis Kimanis pays to the Trustee forward lease rentals during the construction and lease rentals post-construction, which are equal to respective periodic distribution amounts payable to the investors Structure Breakdown 1. At Inception Kimanis (Seller, Lessee) Istisna purchase of plant (delivery upon completion) Purchase price (Forward) lease of plant 2. During Construction & Delivery Kimanis (Lessee) 2 3 Forward lease rentals 4 6 Delivery of plant 3. During Operation (post-construction) Trustee (Purchaser, Lessor) Trustee (Lessor) issue (directly from Kimanis) 1 proceeds Periodic distribution amounts 5 Investors Investors At maturity, Kimanis purchases the project from the Trustee at an exercise price pursuant to a purchase undertaking Kimanis (Lessee) Lease rentals 7 Trustee (Lessor) Periodic distribution amounts 8 Investors It is a structure widely adopted for Islamic project finance globally; however, the might not be tradable on the secondary market during the construction period for investors wishing to meet global Shariah compliance requirements 4. At Maturity Kimanis (Obligor- Purchaser) Transaction flow Cash flow Exercise of purchase undertaking 9 Sale of plant 10 Exercise price 9 Trustee (Seller) redemption (directly to Kimanis) 11 Dissolution distribution amount Investors

10 Case Study 1: Kimanis Power Sdn Bhd MYR 860 million issuance On 19 July 2012, Kimanis Power Sdn Bhd ( Kimanis ) priced a highly successful MYR860 million issuance ( ) under their newly established MYR1.16 billion Islamic Programme ( Programme ) This landmark transaction represents: First-ever Istisna-Ijara Ringgitdenominated First-ever project bond issued by the PETRONAS group in the power sector HSBC s second consecutive project bonds financing transaction with the PETRONAS Group, underlining HSBC s dedication to committed relationships with their clients HSBC acted as Sole Coordinating Bank, Joint Lead Arranger, Joint Lead Manager, Joint Shariah Advisor and Hedge Provider Transaction Overview Issuer Kimanis Power Sdn Bhd ( Kimanis ) Ratings AA- (IS) (MARC) Format Islamic Programme ( Programme ) Programme Size MYR1,160 million Programme Tenor 16 years First Issuance under the Programme Issue Size MYR 860 million Pricing / Settlement 19 July / 8 August 2012 Date Tenor Serial tenors of 4 to 16 years Coupon / Profit 4.25% to 5.5% Governing Law Malaysian Law HSBC Role Sole Coordinating Bank, Joint Lead Arranger, Joint Lead Manager, Joint Shariah Advisor & Transaction Highlights Hedge Provider Breakdown by Investor Type Financial Institutions (25%) Funds (21%) Government Agencies (17%) Insurance (37%) Kimanis is a 60:40 joint venture between PETRONAS Gas Berhad and Sabah state owned entity NRG Consortium (Sabah) Sdn Bhd (NRG). NRG is an indirect wholly owned subsidiary of Sabah state s investment arm Yayasan Sabah Group (YSG). The proceeds are to part-finance the development, design and construction of a 285-megawatt (MW) combined-cycle gas turbine power plant in Sabah by Kimanis. Under the IMTN Programme, Kimanis plans to issue the sukuk in two series: the first series being the MYR860 million IMTN issuance and the second series being a forward start sukuk of MYR300 million. The AA- (IS) (MARC) rated Programme reflects a well-structured Power Purchase Agreement, low technology risk, expectation of adequate operating performance, limited fuel supply risk and strong commitment of project sponsors. The stable outlook reflects MARC s expectations that the construction of the power plant would be compelted on schedule and within budget. The project represents the first Independent Power Producer for the PETRONAS group and forms part of PETRONAS s strategy to develop its power generation business in Malaysia. The project also plays an important role in the Government of Malaysia s plan to address power requirements in the state of Sabah. HSBC secured and executed multiple roles in this transaction despite strong competition, reflecting the close coordination and teamwork across PEF, DCM, Global Markets and Client management functions, allowing HSBC to maximise client value and deal economics. This landmark transaction reinforces HSBC s position as leading provider of project bond and Islamic financing solutions in the Malaysian market. This is our third project bond in Malaysia over the last two years. 10

11 Case Study 2: Tanjung Bin Energy Issuer Berhad MYR 3.29 billion issuance Transaction Overview Breakdown by Investor Type Issuer Tanjung Bin Energy Issuer Berhad ( TBEIB ) On 6 March 2012, Tanjung Bin Energy Issuer Berhad ( TBEIB ) successfully priced a MYR3,290 million Islamic Medium Term Notes ( IMTN ) issuance with tenors ranging from 5 to 20 years. This ground breaking transaction marks the commencement of Tanjung Bin s expansion and serves to strengthen Malakoff s position as the leading independent power producer in Malaysia and the ASEAN region HSBC acted as the sole coordinating bank for this landmark non-recourse project financing for a greenfield power plant; both for senior and junior facilities HSBC acted as Joint Principal Advisor, Joint Lead Arranger and Joint Lead Manager Format Islamic (Senior) Structure Commodity Murabahah Issue Ratings AA3 (RAM) Amount MYR3,290 million Settlement Date 16 March 2012 Tenor 5 to 20 years Coupon / Profit 4.65% to 6.20% FI (40%) Governing Law Malaysian Law Funds (19%) HSBC Role Joint Principal Advisor, Joint Lead Arranger & Insurance (13%) Joint Lead Manager Government Agencies (28%) Transaction Highlights Tanjung Bin Energy issuer Berhad, a wholly owned subsidiary of Tanjung Bin Energy Sdn Bhd, who in turn is wholly owned by Malakoff Corporation Berhad, was structured as a special purpose vehicle to issue Islamic bonds for the development of the new 1,000 MegaWatt super-critical coal fired power plant. The was part of a financing package which includes a senior facility of USD400 million term loan and a MYR700 million term loan and a junior facility comprising equity loans of MYR1.3 billion. The MYR transaction was successfully executed through an accelerated 2 hour bookbuilding process and attracted over MYR16.9 billion in bids from a wide group of investors to arrive at an oversubscription rate of more than 5.13x over the issue size of MYR3.29 billion. The transaction had a balanced distribution as follows: Funds (18.7%), Insurance Companies (13.2%), Financial Institutions (39.9%0 and Government Agencies (5.0%). The MYR was rated by RAM, with HSBC leading the ratings process. TBEIB was awarded a rating of AA3 from RAM reflecting the project s high reliability and credit worthiness and setting a new benchmark for AA3-rated Malaysian project bonds. This ground breaking transaction is a significant milestone for Malakoff as it marks the commencement of Tanjung Bin s expansion and serves to strengthen Malakoff s position as the leading independent power producer in Malaysia and within the ASEAN region. The transaction also marks the first participation of international lender for a power project financing in Malaysia. This transaction pioneered the Malaysian infrastructure market as the first combined MYR bond and USD loan project financing for an IPP in Malaysia 11

12 Case Study 3: Saudi Aramco Total Refining and Petrochemical Company (SATORP) SAR 3.75 billion issuance Transaction Overview Issuer Saudi Aramco Total Services Company On 9 October 2011, Saudi Aramco Total Services Company successfully issued a SAR 3.75 billion Musharakah with a tenor of 14 years This transaction was first project issued in the Kingdom of Saudi Arabia The structure is based on an istisna contract for construction together with a forward lease agreement. The issuer and the obligor (SATORP) are partners under the Musharakah agreement and co-lessors under the forward lease agreement. SATORP is also the managing partner under the Musharakah agreement and the lessee under the forward lease agreement. Format Islamic (Senior) Structure Musharakah Issue Ratings Not Rated Amount SAR 3.75 billion Settlement Date 9 October 2011 Tenor 14 years Coupon / Profit 6 month SAIBOR + 95 basis points Governing Law Laws of Saudi Arabia Joint lead managers and bookrunners Transaction Highlights Deutsche Securities Saudi Arabia, Samba Capital & Invsetment Management, Saudi Fransi Capital The combined value of the issuance was SAR3.75 billion (US$1 billion) and received subscription orders in excess of SAR13 billion (US$3.45 billion). The SATORP was the first project instrument in Saudi Arabia. Pricing for the was exceptionally tight given that the yield for the SAR1.8 billion (US$480 million) Mudarabah issued by Saudi International Petrochemical Company (Sipchem) in June 2010 was SAIBOR plus 1.75% per year. Despite this, the was still heavily oversubscribed by 3.5 times. The offering received strong interest from financial institutions, mutual funds, insurance companies and pension funds as well as certain high net worth individuals. The structure is based on an istisna contract for construction together with a forward lease agreement. The issuer, Saudi Aramco Total Services Company and SATORP are partners under the Musharakah agreement and also co-lessors under the forward lease agreement. SATORP is also the managing partner under the Musharakah agreement and the lessee under the forward lease agreement. The proceeds of the were used to finance SATORP s planned crude oil refinery in Jubail. SATORP is 62.5% owned by Saudi Aramco and 37.5% owned by Total. The total cost of the Jubail project is estimated at over US$14 billion. 12

13 IV. Perpetual

14 Perpetual Mudaraba Structure Overview The first ever Tier 1 in the international markets is based on a Mudaraba Agreement entered into by the SPV (as Rab-al-Maal) and the Obligor (as Mudareb), according to which the Obligor invests the Mudaraba capital (= proceeds) into the Obligor s assets The Obligor may elects not to pay a Mudaraba profit to the SPV at its sole discretion (as long as it is not required to make such payment due to certain conditions such as dividend pusher and stopper), in which case such Mudaraba profit is credited to a Mudaraba reserve account The profit sharing ratio is stipulated in the Mudaraba Agreement. If a Mudaraba profit for the SPV is not sufficient for expected return (= periodic distribution amount), the Obligor utilise the reserve balance to cover the shortfall or, if the reserve is not sufficient, may cover the shortfall from its own account The Obligor may liquidate the Mudaraba at its option If the Obligot exercises its option and the capital to be returned to the SPV is less than the SPV s initial capital contribution, the Obligor is required to continue investing such capital in the Mudaraba. There is accordingly no actual liquidation occurs. Alternatively, the Obligor may indemnify the SPV with respect to the capital shortfall in order to liquidate the Mudaraba Inception Obligor s General Pool of Assets Mudaraba Assets Mudaraba Agreement Mudaraba Capital SPV (Issuer / Trustee / Rab-al-Maal) Issue Transaction Fund flow Mudaraba Capital 3 (invested into Obligor s Assets according to Investment Plan) Obligor (Mudareb) 2 1 Investors Proceeds Periodic Distribution Amounts (payable if Mudaraba Profit is paid) 1 ~ 3 Steps at inception 4 ~ 6 Steps during ongoing 7 ~ 9 Steps at maturity 14 Ongoing & Maturity Muradab a Profit Mudaraba Profit (+ shortfall cover, if any) (payable if so elected by Obligor) Obligor s General Pool of Assets Mudaraba Assets 4 Obligor (Mudareb) 5.2 Reserve Account SPV (Issuer / Trustee / Rab-al-Maal) 6 Excess Profit 5.3 Excess Allocated Investors Redemption 7 9 Dissolution Mudaraba Capital Dissolution Mudaraba Capital (+ shortfall indemnity, if any) Dissolution Distribution Amount

15 Perpetual Mudaraba Cash Flow Illustration - USD100 million, 4% annual profit rate The cash flow illustration is set out on the opposite Inception Ongoing & Maturity Assumptions: - The SPV s initial Mudaraba capital is $100 mn - The dissolution Mdaraba capital is $80 mn - The Obligor elects to liquidate the Mudaraba at a certain time by indemnifying the SPV with the shortfall cover of $20 mn Obligor s General Pool of Assets Mudaraba Assets $100 mn Mudaraba Capital 3 (invested into Obligor s Assets according to Investment Plan) Obligor (Mudareb) Mudaraba Agreement 2 $100 mn Mudaraba Capital $4 mn pa Muradaba Profit $4 mn pa if Obligor elects to pay Mudaraba Profit (+ shortfall cover, if any) Obligor s General Pool of Assets Mudaraba Assets 4 Obligor (Mudareb) 5.2 Excess Profit Reserve Account 5.3 Excess Allocated 7 $[80] mn Dissolution Mudaraba Capital $100 mn Dissolution Mudaraba Capital (+ shortfall indemnity, if any) (= $[80] mn + $[20] mn) SPV (Issuer / Trustee / Rab-al-Maal) Issue 1 $100 mn Proceeds $4 mn pa if Obligor elects to pay Periodic Distribution Amounts SPV (Issuer / Trustee / Rab-al-Maal) 6 Redemption 9 $100 mn Dissolution Distribution Amount Investors Investors Transaction Fund flow ~ 3 Steps at inception ~ 6 Steps during ongoing ~ 9 Steps at maturity 15

16 Perpetual Mudaraba Case Study 1: ADIB s USD 1 billion Tier 1 Perpetual HSBC acted as a Structuring Adviser and Joint Bookrunner on a market defining Tier 1 transaction for Abu Dhabi Islamic Bank PJSC ( ADIB ) ADIB is one of the flagship Islamic banks in the UAE and the fourth largest Islamic bank globally by assets. The USD1 billion 6.375% RegS Tier 1 issue represents the first ever Shariah-compliant Tier 1 issue executed in the international markets and the first ever Tier 1 instrument issued by a Middle East bank in the capital markets HSBC has successfully lead managed all four public USD issues executed by ADIB to date. This repeat appointment demonstrates HSBC s strong position in the and FI space. The transaction further reinforces HSBC's position as a market leader in structuring and executing innovative and customized hybrid capital transactions for financial institutions clients Transaction Overview Issuer ADIB Capital Invest Ltd Mudarib Abu Dhabi Islamic Bank PJSC Mudarib Senior Ratings: A2(Moody s)/ A+(Fitch) both stable outlook (the Tier 1 issue is not rated) Currency / Format USD / Fixed Rate Regulation S Structure Mudaraba Amount USD 1 billion Pricing / Settlement Date 08 November 2012 / 19 November 2012 Optional Call Date 16 October 2018, and on each profit distribution date thereafter Reset Date 16 October and ever 6 years thereafter to a new fixed rate based on the then prevailing 6yr US Mid Swap Rate + The Initial Credit Margin Periodic Distribution 6.375% p.a., semi-annual payments Issue Price/ Re-offer Spread 100/ 6 year USD MS+539.3bps Listing London Stock Exchange Governing Law English Law (except Mudaraba Agreement which is under Abu Dhabi and UAE Law) HSBC s Role Structuring Adviser and Joint Bookrunner Transaction Highlights The transaction, which is designed to comply with the Basel III guidelines and is expected to be eligible as Tier 1 Capital by the UAE Central Bank, was well received by both regional and international investors, culminating in an orderbook in excess of USD15 billion (representing a 15x oversubscription and the largest oversubscription witnessed in any offering globally). The issuance followed a series of investor meetings in Asia, the Middle East and Europe. In light of the unique nature of the transaction, the investor meetings commenced in the UAE with the objective of providing investors with sufficient time to understand the combination of Shariah and hybrid capital structuring elements. The initial momentum in the orderbook allowed ADIB to release initial price thoughts of 7% area on 7 November, during the Asia morning. The announcement met with an overwhelming positive response, allowing the orderbook to grow to USD13 billion by the end of the day. As a result, official price guidance was released at 6.50% area (+/- 12.5bps), before being tightened again on the back of strong demand. The transaction eventually priced on Thursday afternoon during London hours at the tight end of the guidance at 6.375%, representing one of the lowest coupons for USD Tier 1 issuances in the international markets. 16 Breakdown by Geography Asia (38%) Middle East (32%) Europe (26%) US Offshore (4%) Breakdown by Investor Type Private Banks (60%) Fund Managers (26%) Banks (11%) Others (3%)

17 Perpetual Mudaraba Case Study 2: Dubai Islamic Bank s USD 1 billion Perpetual On 13 March, HSBC acted as a Structuring Adviser and Joint Bookrunner on a highly successful USD1 billion 6.250% RegS Tier 1 transaction The issue represents the second Tier 1 executed in the international markets and the first ever public Tier 1 instrument issued by a Dubaibased bank in the capital markets. HSBC has acted as structuring adviser and bookrunner on both of the international Tier 1 issues from the UAE to date demonstrating HSBC s strong position in the and FI space The transaction further reinforces HSBC's position as a market leader in structuring and executing innovative and customized hybrid capital transactions for financial institutions clients globally Transaction Overview Issuer DIB Tier 1 Limited Mudareb Dubai Islamic Bank PJSC Currency / Format USD / Fixed Rate Regulation S Status Shariah compliant RegS USD Tier 1 Capital Certificates Issuer Ratings Baa1 (Moodys) / A (Fitch) Amount USD 1 billion Pricing / Settlement Date 13 March 2013 / 20 March 2013 Optional Call Date 20 March 2019, and on each profit distribution thereafter Reset Date 20 March 2019, and every 6 years thereafter to a new rate based on the then prevailing 6 year US Midswap Rate + Initial Credit Margin Maturity Date Perpetual Profit Rate per annum Price / Initial Credit Margin / MS+495.4bps Listing Irish Listing Governing Law English (except Mudaraba Agreement which is under Dubai and UAE) HSBC s Role Structure Adviser, Joint Lead Manager, Joint Bookrunner Transaction Highlights The issuance followed a series of investor meetings in Asia, the Middle East and Europe. In light of the recent ADIB Tier 1 transaction, investors immediately understood the combination of Shariah and hybrid capital structuring elements in the offering, allowing the issuer to focus its message on the bank s credit strengths The initial momentum in the orderbook allowed DIB to release initial price thoughts of 7% area on 12March, during the Asia morning. The announcement met with an overwhelming positive response, allowing the orderbook to grow to USD10 billion by the end of the day. As a result, initial price guidance was released at 6.50% area (+/- 12.5bps), before being tightened again on the back of strong demand. The transaction eventually priced on Thursday afternoon during London hours at final guidance at 6.250%, representing the lowest coupon for a USD public Tier 1 issuance in the MENA debt capital markets The transaction, which is designed to be eligible as Tier 1 Capital (under both current UAE Central Bank guidelines, as well as prospectively under Basel III), was well received by both regional and international investors, culminating in an orderbook in excess of USD14 billion (representing a 14x oversubscription second only to the ADIB Tier 1 issue executed in November 2012) The transaction highlights the strong connectivity between the various relationship, structuring and DCM teams across the UK, UAE and Asia to bring new to market products to HSBC s clients in the MENA region 17 Breakdown by Geography Middle East (38%) Europe (29%) Asia (29%) US Offshore (4%) Breakdown by Investor Type Banks (33%) Private Banks (32%) Fund Managers (29%) Hedge Funds (5%) Others (1%)

18 Disclaimer HSBC Amanah Malaysia Berhad ( HSBC ) has prepared this document (the Document ) for information purposes only. This Document does not constitute a commitment to underwrite or purchase or subscribe for all or any portion of the securities mentioned herein. Any such commitment shall be evidenced only by a fully executed subscription agreement, purchase agreement or similar contractual document. This Document should also not be construed as an offer for sale of or subscription for any investment, nor is it calculated to invite/solicit any offer to purchase or subscribe for any investment. HSBC has based this Document on information obtained from sources it believes to be reliable but which it has not independently verified. HSBC makes no guarantee, representation or warranty and accepts no responsibility or liability for the contents of this Document and/or as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Document. HSBC and its affiliates and/or its or their respective officers, directors and employees may have positions in any securities mentioned in this Document (or in any related investment) and may from time to time add to or dispose of any such securities (or investment). HSBC and/or any of its affiliates may act as market maker or have assumed an underwriting commitment in the securities of any companies discussed in this Document (or in related investments), may sell them to or buy them from clients on a principal or discretionary basis and may also perform or seek to perform banking or underwriting services for or relating to those companies. As HSBC is part of a large global financial services organisation, it or one or more of its affiliates may have certain other relationships with the parties relevant to the proposed activities as set out in this Document, and these proposed activities may give rise to a conflict of interest, which the addressee hereby acknowledges. No consideration has been given to the particular investment objectives, financial situation or particular needs of any recipient. This Document, which is not for public circulation, must not be copied, transferred or the content disclosed to any third party and is not intended for use by any person other than the addressee or the addressee's professional advisers for the purposes of advising the addressee hereon. 18