Youth CONNECT Social Benefit Bond

Transcription

1 Youth CONNECT Social Benefit Bond Increasing resilience to homelessness for young people exiting care Investor Memorandum Bringing the light of Christ into communities

2 Important Notice This Information Memorandum relates to an issue of Youth CONNECT Social Benefit Bonds ( the Youth CONNECT Bonds or Bonds ) by Churches of Christ in Queensland (ABN ) ( Issuer ). It has been prepared by the Issuer. No disclosure This Information Memorandum is not a prospectus or other disclosure document for the purposes of the Corporations Act 2001 (Cth) ( Corporations Act ). Neither this Information Memorandum nor any other disclosure document in relation to the Bonds has been, or will be, lodged with the Australian Securities and Investments Commission ( ASIC ). The offering of the Bonds has not been, nor will be, examined or approved by ASIC. The Bonds are only being offered for issue to Australian residents who are not acquiring the Bonds through a permanent establishment outside Australia and in circumstances where disclosure to investors under Part 6D.2 or 7.9 of the Corporations Act is not required to be made. In particular, investors should be aware that the offer and issue of the Bonds by the Issuer will not be subject to any requirement that a prospectus, product disclosure statement or other disclosure document is prepared by the Issuer or any other person and registered with ASIC. The distribution and use of this Information Memorandum, including any related advertisement or other offering material, and the offer or sale of the Bonds may be restricted by law, and intending purchasers and other investors should inform themselves about, and observe, any such restrictions. In particular, no action has been taken by any Relevant Party which would permit a public offering of any Bonds, or the distribution of this Information Memorandum in any jurisdiction outside of Australia. A person may not (directly or indirectly) offer for issue, subscription or sale or issue an invitation to subscribe for or purchase any Bonds, nor distribute or publish this Information Memorandum or any other offering material or advertisement relating to the Bonds except if the offer or invitation complies with all applicable laws and directives. Responsibility The Issuer accepts responsibility for the information contained in this Information Memorandum, other than the details of the other persons named in the Directory section (which were provided to the Issuer by the relevant persons) and the statements set out in Foreword Note from the Queensland Treasurer and Foreword Note from the Minister of Housing and Public Works (which were provided to the Issuer by Queensland Treasury and the Minister of Housing and Public Works respectively). Except as specified above in respect of the provision of specific information, neither the State of Queensland (including all departments, agencies and other State bodies and personnel) (together, the Queensland Government ) nor Westpac Banking Corporation ( Westpac ) has had any role in the preparation or issue of this Information Memorandum, and nor has either such party independently verified the information contained in this Information Memorandum. Accordingly, no representation, warranty or undertaking, express or implied, is made, and no responsibility or liability is accepted by the Queensland Government or Westpac for the issue of this Information Memorandum, including as to the accuracy, authenticity, origin, validity or completeness of, or any errors, or omissions from, or any information or statement contained in this Information Memorandum. Neither the Queensland Government nor Westpac takes any responsibility for and does not guarantee the performance of any Bonds, the interest rate, the return of capital to investors, any particular rate of return or any taxation consequences of any investment made in any Bonds. Intending purchasers to make independent investment decision and obtain tax advice This Information Memorandum contains only summary information concerning the Issuer, the Youth CONNECT Program and the Bonds. It should be read in conjunction with the documents which are expressed to be incorporated by reference in it, the Conditions, the Bond Issue Confirmation and the SBB Deed Poll. The information contained in this Information Memorandum is not intended to provide the basis of any credit or other evaluation in respect of the Issuer or any Bonds and should not be considered or relied on as a recommendation or a statement of opinion (or a report of either of those things) by any Relevant Party that any recipient of this Information Memorandum should subscribe for, purchase or otherwise deal in any Bonds or any rights in respect of any Bonds. An investment in the Bonds is designed for investors for whom the charitable purposes of the Youth CONNECT Program are a component of their investment decisions. Investors should be aware that, in some scenarios, no coupon will be payable on the Bonds and repayment of principal on the Bonds may be at risk. This Information Memorandum is not investment advice and has been prepared without taking into account the investment objectives, financial situation or particular needs (including financial and taxation issues) of any investor. Each investor contemplating subscribing for, purchasing or otherwise dealing in any Bonds or any rights in respect of any Bonds should: make and rely upon (and shall be taken to have made and relied upon) its own independent investigation of the financial condition and affairs of, and its own appraisal of the creditworthiness of, the Issuer and the Bonds; determine for themselves the relevance of the information contained in this Information Memorandum, and must base their investment decision solely upon their independent assessment and such investigations as they consider necessary; and consult their own tax advisers concerning the application of any tax or duty (including stamp and transactions duty) laws applicable to their particular situation. No advice is given in respect of the legal, taxation or accounting treatment for investors or purchasers in connection with an investment in any Bonds or rights in respect of them, and each investor should consult their own professional advisers. Neither the Issuer nor the Bonds are rated by any credit ratings agency. This Information Memorandum does not describe all of the risks of an investment in the Bonds or the exercise of any rights in connection with them. Prospective investors should consult their own professional advisers about risks associated with an investment in the Bonds and the suitability of investing in the Bonds in light of their particular circumstances. Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

3 Contents Foreword...2 Note from Chief Executive Officer, Churches of Christ in Queensland...2 Note from the Queensland Treasurer...3 Note from the Queensland Minister for Housing and Public Works...4 Note from Social Outcomes & Westpac Why the Youth CONNECT Social Benefit Bond matters What young people experience when leaving state care How Youth CONNECT will help these young people Expected outcomes of the Youth CONNECT Program Program design Program participants Key interventions Four-phase delivery model Monitoring progress Achieving success Experience, expertise, capacity and stability of Churches of Christ Queensland Over 35 years experience managing social and affordable housing and providing supported accommodation years experience supporting young people in state care Strong cultural competence Strong governance Financial stability Highly qualified key personnel Transaction structure and key documents Structure overview Implementation Agreement SBB Deed Poll and the Bonds Calculation of payments Summary of estimated investor returns State Standing Charge and Outcome Payments Payments to Investors Early Termination Payments Benevolent donation option Bond conditions Risk factors Program performance Baseline figure Housing supply Referral and engagement risk Service delivery organisation credit risk Early termination Limited recourse and Events of Default Change in economic conditions Dependence on key personnel Modifications and waivers Change of law Secondary market generally Legal investment considerations may restrict certain investments Legal notices Selling and distribution restrictions Agency and distribution arrangements Investors should obtain independent advice No authorisation No independent verification Currency of information Documents incorporated by reference Applications How to apply Subscription amounts Investor eligibility Submission of Application Forms Application Payments Payment options Application Payments held by CofCQ Refunds Provision of TFN and/or ABN Provision of bank account details Privacy statement Key terms and dates Key terms entities and contracts Key terms Implementation Agreement Key terms Bonds Key Dates Glossary of terms Key Research References...38 Application form...40 Directory...45 Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 1

4 FOREWORD Note from Chief Executive Officer, Churches of Christ in Queensland Churches of Christ in Queensland has a long history of caring for some of society s most vulnerable people. For over 130 years, we have done this by going out into the community and seeking out those who most need care and assistance. Queensland s most vulnerable youth are no exception. Now, more than ever before, they need targeted and dedicated support to become young adults able to lead independent, fulfilling lives. A world first resilience bond, the Youth CONNECT Social Benefit Bond will improve the life chances of young people transitioning from state care into adulthood and independence in the general community. This bond is also the first focusing on young people aged 15 to 25 exiting the state care system. Global research clearly identifies the extreme vulnerability of these young people to homelessness, poor education, unemployment, mental illness, imprisonment and substance abuse. While this paints a grim picture, research also shows that there are significant opportunities to intervene early and turn the course of their lives around. Dr Paul Scully Chief Executive Officer Churches of Christ in Queensland By taking a holistic, integrated approach to helping youth support themselves, the Youth CONNECT team will work individually with young people from the statutory care system at high risk of homelessness to build the key capabilities they need to both survive and thrive in the longer term. Investors in this Social Benefit Bond will be positively impacting on the lives of hundreds of young people and will help Queensland s most vulnerable youth become empowered, independent young adults. We are thankful to the Queensland Government for partnering with us on the Youth CONNECT Social Benefit Bond. This bond is a demonstration of their support and commitment to the youth of our state. We are also appreciative of our partners, Social Outcomes and Westpac, for making it possible for other investors to directly and positively impact young lives. Most of all we are grateful for the opportunity to support the young people who will participate in Youth CONNECT they are the living and breathing outcomes of the bond. We hope we can connect them to a brighter future. 2 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

5 Note from the Queensland Treasurer This is the final Social Benefit Bond to be delivered by Queensland Treasury s Social Benefit Bond Pilot Program since its establishment in July This is a major achievement for the Government and provides hope for some of our most vulnerable Queenslanders. In over 43,000 young people were alone and in housing crisis when they approached a specialist homelessness agency; over half of these were already homeless (AIHW). We are delighted to be associated with Churches of Christ in Queensland who will deliver the Youth CONNECT Program to support young people 15 to 25 years old who are exiting or have exited statutory care and are homeless or are at risk of homelessness. The approach supports the development of better coping skills to improve life outcomes and sustain long-term health and wellbeing into adulthood, ultimately reducing the risk of future homelessness. Young Queenslanders will benefit from two Youth CONNECT services, which will be in operation by late The Honourable Curtis Pitt MP Treasurer and Minister for Trade and Investment Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 3

6 Note from the Queensland Minister for Housing and Public Works There can be no doubt that supporting our young people to achieve their potential is one of the most valuable investments any community can make. But too many young people are held back from reaching that potential because they re experiencing or at high risk of homelessness. On any given day in Queensland, 230 specialist homelessness agencies support almost 8,000 clients and more than 3,600 of these clients are young people. We know that stable housing is a foundation from which young people can finish education, undertake further study, and secure steady employment. In a very real sense, a house key doesn t just unlock the front door, it can also unlock a future of opportunity for young people, their families, and their communities. That s why I am proud to be part of a government that is supporting young people through the Youth CONNECT Social Benefit Bond. Because early intervention can be life changing, with Youth CONNECT Social Benefit Bond we re engaging and rewarding services providers who deliver real outcomes for our young people. Youth CONNECT will provide wrap around services to young people up to 25 years of age who are exiting statutory care and at high risk of homelessness, helping them to build resilience and achieve and maintain stable accommodation. The Honourable Mick de Brenni MP Minister for Housing and Public Works and Minister for Sport That means better living conditions, enhanced participation in education and the workforce, better mental health outcomes, stronger personal relationships and improved social integration for our young people. We have a responsibility to build a better, brighter future for our young Queenslanders, and through Youth CONNECT, we will make a real difference. 4 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

7 Note from Social Outcomes & Westpac Banking Corporation Social Outcomes, in partnership with the Westpac Institutional Bank, a division of Westpac Banking Corporation, have been working with Churches of Christ in Queensland since early 2016 to design, bid for and negotiate this exciting new bond. During this time, we have developed a deep respect for Churches of Christ in Queensland s experience and capability in working with young people while they are still in statutory care, and we are pleased that this work will now be extended to support young people for those first few crucial years as they begin to lay down the foundations for their independent lives. A shared focus on the capacities that these young people need to build led to defining the outcome as increased resilience for young people, a first for social impact bonds. All young people cope better with what life throws at them if they have a reliable and trusted community of friends, family and services to help find a place to call home, get the education and skills they need, and find stable employment. That s what this program is planning to achieve with these young people, who are starting so much further behind most others in our community. The bond design is a little different from what we have seen before here in Australia, which is a deliberate response to what we know about the specific situation that young people exiting care find themselves in; the different bond measurement and structuring possibilities; and the changing needs of Australia s impact investment market. We would like to recognise the vision and flexibility that the Queensland Government has shown during the joint development phase in working with us to incorporate all these factors, and bring this unique bond to life. We are looking forward to the insights this pilot will deliver, both in terms of the program and bond design. Sandy Blackburn-Wright Managing Director Social Outcomes Craig Parker Executive Director Head of Structured Finance Westpac Institutional Bank, a division of Westpac Banking Corporation Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 5

8 6 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

9 1. Why the Youth CONNECT Social Benefit Bond matters The Youth CONNECT Social Benefit Bond (SBB) is the first in the world to focus on improving the life chances of young people transitioning from state care into adulthood and independence in the general community. While global research clearly identifies the extreme vulnerability of these young people to homelessness, poor education, unemployment, mental illness, imprisonment and substance abuse, it also indicates significant opportunities to intervene early and turn the course of their lives around. Youth CONNECT takes this opportunity to work with these young people and support them to build the capacity they need to create a stronger future for themselves and, in turn, helps build a better future for our community as a whole. 1.1 What young people experience when leaving state care The transition to adulthood is a challenging time for many young people, even those from relatively stable home or family environments. Rising rental costs, longer periods in further education and the increasing costs of that education, and growing youth unemployment all mean that increasing numbers of young people from all backgrounds are staying at home, or returning home, for longer than previous generations and often into their mid-twenties. But young people leaving the state care system often have no family home-base to return to. If they can t afford their rental housing, the street becomes their home. The experience of young people in the state care system and the unstable environments that led them there means that they are unlikely to have strong family or social networks that can provide refuge and moral support in times of crisis. And the absence of this safety net is particularly problematic given that these young people are more vulnerable to experiencing crises. Many of them have disengaged from the school system as a result of their trauma, or because they are constantly moving, and therefore lack the educational foundations needed to transition to further education and meaningful employment. The history of instability and trauma also means that they are more likely to have a criminal history, experience mental illness and alcohol and substance misuse. Some of them will already have children of their own to look after. A range of studies and surveys in this growing field of research suggest that young people leaving the state care system might expect to experience the following devastating life outcomes: 35% will be homeless within one year, and more than 50% will have experienced homeless within five years 29% will be unemployed 47% will have some involvement with the criminal justice system 53% will only complete Year 10 or below, 35% will complete year 12 at school 22% will have unacceptably low literacy and numeracy levels 53% will experience substance abuse 53% will experience clinically significant emotional and behaviour difficulties 28%-33% will be pregnant or parents themselves when they leave care, and 54% of their children will be removed from them and placed on care and protection orders thereby perpetuating the intergenerational experience of placement in state care. To expect these young people to have the instantaneous capacity to live successfully in the general community when they leave the state care system is entirely unrealistic, yet there has been almost no investment and focus put into supporting these young people through that transition. Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 7

10 1.2 How Youth CONNECT will help these young people Youth CONNECT will work with young people who have been in statutory care to build the key capabilities they need to both survive and thrive. The research clearly indicates that this involves supporting the young person to build the personal resilience they need to manage their complex vulnerabilities, and to move on to creating a stronger future for themselves. As a first step towards building this resilience, Youth CONNECT will ensure that every young person participating in the Program has access to safe, stable, affordable and appropriate accommodation. This housing first approach recognises the importance of secure housing to both preventing immediate homelessness, and providing a sense of safety, which gives the young person room to concentrate on something other than where they are going to sleep that night. From there, the focus will be on working with the young person to develop their own safety net and community, and to build up the skills they need to operate in the world. This means supporting the young person to: engage in education, training and employment opportunities find a reliable source of income improve mental and physical health and well-being increase self-advocacy develop critical life skills like financial management decrease involvement with the justice system develop positive and sustainable connection to social support networks, community and culture so that they know that they are not alone when things go wrong. 1.3 Expected outcomes of the Youth CONNECT Program We expect Youth CONNECT to have a substantial impact on improving the personal resilience of the young people who participate in the Program. In particular, we expect a significant proportion of our participating young people to: sustain stable housing engage in education and achieve qualifications relevant to their goals engage in employment and commence pathways to financial stability develop the personal skills they need to have the positive, strong and reliable support networks and cultural connections vital to maintaining their stability and reaching their life goals. Achieving any one or more of these outcomes increases the likelihood that the young people will, into the future: remain out of homelessness secure meaningful ongoing employment and the financial stability that comes with that reduce their interactions with the justice system improve their mental health reduce substance misuse keep any children out of the state care system experience social inclusion. All of these outcomes reduce the reliance of these young people on Government housing, mental health, hospital, justice, substance addiction, statutory care and welfare services, which then translates into significant and ongoing government cost savings. 8 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

11 Target performance levels* Approximately 300 young people aged will participate in the Youth CONNECT Program. 35%-45% of the Cohort are expected to be in stable housing at the end of the Program. Around 120 young people will have demonstrated that they have the skills and means to maintain safe and stable housing. 35%-45% of the Cohort are expected to have engaged in part-time, fulltime, casual or volunteer employment at the end of the Program. Around 120 young people will have a stable income and the tools to maintain employment. 35%-45% of the Cohort are expected to have participated in accredited counselling and other personal development programs. Around 120 young people will have built the skills needed to form and sustain positive, strong and reliable support networks and cultural connections vital to maintaining stability and achieving life goals. For Aboriginal and Torres Strait Islander young people, this work will occur with the guidance of local Indigenous support services, Elders and community members appropriate for the young person. Significant State Government savings during the Bond period, and over the lifetime of the young people, due to reduced reliance on: public housing; specialist homeless services; hospitals; and the justice system. Additional significant savings from keeping the children of Program participants out of the state care system and breaking the inter-generational cycle of disadvantage. 35%-45% of the Cohort are expected to have successfully completed and/or demonstrated stable engagement in an educational course appropriate to their personal goals. Around 120 young people will have completed, or be on the way to completing, Year 10, Year 12, TAFE and tertiary qualifications. IRR in the target range is 7.5%-8.5%. *Note that this target range of performance cannot be guaranteed by the Program. Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 9

12 2. Program design The Youth CONNECT Program design is based on a combination of Churches of Christ in Queensland s extensive experience working with young people in statutory care and an application of the best available evidence on what works to improve the life chances of this group of vulnerable young people as they transition into independence and adulthood (see a research sample in section 11 Key Research References). WHO WE WILL WORK WITH Focus on young people at greatest risk of homelessness Referral pathways Department of Communities, Child Safety and Disability Services Youth Justice & Queensland Corrective Services Department of Housing and Public Works Youth CONNECT Annual intake of young people Young people aged 15 to 18 years exiting the child protection system who have had four or more placements. Young people aged 15 to 25 years exiting the youth justice system, adult corrections system or in contact with homelessness services, who have past experience with the child protection system. Annual intake Year 1 60 Year 2 95 Year 3 95 Year 4 50 Year 5 - Year 6 - Total 300 Townsville Ipswich Logan HOW WE WILL OPERATE Program Model Phase 1 ENGAGE Initial engagement, program explanation, relationship building Phase 2 BUILD Main case management phase engagement, assessment, planning, delivery, evaluation and transition Phase 3 PRACTISE Planned step-down coaching and mentoring role. Goal to increase confidence and external support networks Phase 4 DEMONSTRATE Demonstrate newly developed resiliency skills and abilities into practice 10 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

13 HOW WE WILL EVALUATE AND MEASURE Outcomes that trigger payments under the Bond Housing stability 6 months continuous PLUS Employment stability 12 months continuous AND/OR Education stability 12 months continuous AND/OR Personal development 12 months continuous Commercial Structure $5 million bond over 6.75 years Years 1-3: 4% fixed annual coupons Years 4-7: variable performance based annual coupon Expected IRR between 5-11%, depending on performance against agreed outcomes Settlement date: 22 September 2017 Redemption date: 30 June 2024 Youth CONNECT partners Bond design, financial and commercial modelling, Bond investment structure Legal advice and documentation Participatory Action Research, Program Logic review and evaluation, academic review and publications Safe and stable housing The bedrock of support is safe and stable housing that is both felt and actual. Caseworker and Housing Officer will assist young person to identify appropriate housing options: Shared private rental under Churches of Christ in Queensland head lease Shared rental of Churches of Christ in Queensland housing portfolio Self-identified accommodation Support services Caseworker assists young person to identify employment and/or education options and personal development opportunities. CYCLE Program educational engagement Step-Up work readiness program Access Place social enterprise employment Brokered services employment services, volunteering, TAFE, school, AOD services, counselling, parenting courses and other community service providers Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 11

14 2.1 Program participants (1) Cohort size Over the period of the bond, Youth CONNECT will engage 300 young people aged who have been in the state care system and are at risk of homelessness. (2) Eligibility to participate The eligibility criteria for the Youth CONNECT Program identifies those young people from the child protection system who are at the highest risk of homelessness. A young person will be eligible to participate in Youth CONNECT if he or she is exiting, or has exited, statutory care or custody, and is already homeless or at risk of homelessness, and: if being referred directly from the child protection system, is aged years old (inclusive), and has had 4 or more placements in out-of-home care; or if being referred directly from the youth justice system, adult corrections facilities, a housing service centre or homelessness service or (with the agreement of the parties) from any other system or service, is aged years old (inclusive), and has had at least one contact with the child protection system. (3) Geographical distribution The young people will come from the Logan/Gold Coast (approx 50%), Ipswich and surrounds (approx 35%) and Townsville (approx 15%) regions, where the Program will be delivered. (4) Aboriginal and Torres Strait Islander participants Given the high percentage of Aboriginal and Torres Strait Islander young people in statutory care, we expect approximately 30 per cent of the overall participants to come from an Indigenous background across the Cohort, with closer to 40 per cent likely in Townsville. 2.2 Key interventions All of the supports provided by the Youth CONNECT Program will be tailored to each individual participating in the Program through a holistic, trauma-informed, case management process, which we have been successfully using for more than 15 years. While the young person s case management plan will incorporate a range of supports, there will be a focus on the four following interventions designed to help build the young person s resilience to homelessness: housing, education, employment and personal development. (1) Housing The first step towards reducing the homelessness experienced by a large number of young people transitioning from statutory care, is to provide them access to affordable accommodation that is safe and appropriate to their needs. Most of the accommodation we offer will be share accommodation, which not only reflects the most affordable alternative for any young person in the general community, it also allows for sharing of living expenses. However, there may be circumstances in which single housing is more appropriate for example in the case of young mothers. When young people live in properties that are not part of our property portfolio, we will take out a head lease on appropriate premises and provide each of the young people with their own tenant agreement. We will continue to renew the head lease for as long as there is demand for the accommodation (including beyond the Youth CONNECT Program period), and if young people wish to take over the head lease, we will help facilitate this. Our rental model is designed to create an affordable alternative for the young person as they move into the housing market, while at the same time helping them to build a realistic rental history. Based on a serviced property model, similar to university accommodation, the rental amount includes utilities, furniture and internet, so that they learn to make appropriate budget allowances. The rent model is designed to reflect the disposable income that a young person is likely to experience if they had access to social housing, while removing the disincentives to work created by the social housing income-based models. In the event that the young people have found their own safe and stable accommodation (for example accommodation with family, friends or community), Youth CONNECT will support them to maintain that accommodation. Youth CONNECT participants will also be supported in developing key skills relevant to retaining safe and stable housing, including money management, practical living skills (e.g. cooking, cleaning), conflict management with housemates and self-advocacy. (2) Education and work-readiness Where young people have disengaged from education and training, our Youth CONNECT CYCLE education and Step-Up programs will focus on re-engagement and increasing their confidence, motivation and ability to identify and achieve their own education, employment and career goals. (a) CYCLE education program The Youth CONNECT CYCLE education program is designed to gradually re-engage those young people who may have been suspended or excluded from school, changed schools with unsettling frequency, or who have otherwise lost faith and confidence in the education system. The overall goal is to help young people to improve their literacy and numeracy skills, complete Year 10 and Year 12 high school qualifications, and complete any other certificate, vocational or tertiary qualifications they need to achieve their life goals. 12 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

15 To achieve these results, CYCLE uses an individualised, trauma-informed approach to educating young people. The approach focusses on building their confidence, helping them articulate their educational and life goals, and developing a collaborative Education Support Plan to achieve their goals. CYCLE delivers tuition to young people seeking to finish high school in an environment that is more sympathetic to their experiences than the mainstream institutions. The program also helps students to develop the personal motivation, and the technical and social skills required to participate in mainstream educational programs. (b) Step-Up work-readiness and transition program The Youth CONNECT Step-Up program provides a 12-session, structured, supportive and safe environment for young people to learn work skills, gain confidence, try different work roles, make informed career decisions, and ultimately transition into paid employment. Step-Up participants will complete a Certificate I in Work Readiness, which develops their understanding of modern workplace practices, including employer expectations, workplace health and safety, teamwork, communication and manual handling. The program also offers driver training for those who need to log extra hours to qualify for a driver s licence, removing that barrier to employment. A young person graduating from Step-Up will then transition into the employment services offered by Youth CONNECT. John, 15, experienced significant trauma throughout his life. He was separated from his mother at 11 years old, and then again at 13. He has been exposed to parental substance misuse, domestic and family violence and parental mental health issues in his family home. He has been separated from his siblings and rarely has any contact with them. John is like many other children and young people who live in out-of-home care. John has attended numerous schools throughout his childhood. Due to some of his behaviours, which are clearly the result of the trauma he has experienced, he was excluded from mainstream school. He attended several flexi schools (Alternative Education Environments) for short periods of time, but he did not feel that the work met his education needs, and he last attended school when he was in Year 8. John s school experience has made it difficult for him to learn and develop positive peer relationships. Since commencing with CYCLE, John has attended every day. He enrolled in a distance education program half way through the third term. Despite his late enrolment, and with the support of the CYCLE program, John successfully passed his first term. John has said many times that he wishes to complete Years 9 and 10 through CYCLE. He also wants to begin an apprenticeship while studying Year 10, so that he can complete his senior schooling and transition to a full time apprenticeship at the same time. Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 13

16 (3) Employment Youth CONNECT will support young people to access full-time or part-time employment (paid or voluntary) either through the organisation s social enterprise (Access Place Gardens and Mowing), other social enterprise ventures, or the general workplace. Churches of Christ in Queensland s Access Place Gardens and Mowing social enterprise program will work with the Youth CONNECT caseworkers to: provide supported employment opportunities connect young people into meaningful external relationships by matching them with skilled mentors provide education, training and skills development to a level that makes them competitive in the open labour market. Trainees are particularly encouraged and supported to complete recognised training courses and gain relevant industry licences. Where Access Place Gardens and Mowing does not match the young person s employment interests, Youth CONNECT will work to match them with other social enterprises or businesses willing to take on work experience, apprentices or employees in a supported manner. The focus on providing placements in social enterprise as a first step into employment is based on experience and research that has found people with complex needs are more likely to transition successfully into alternative employment options if they first have an opportunity to work in supported social enterprise environments. Research also highlights that full-time work should not necessarily be the goal for young people with complex needs, and could in fact create additional risks for some people. The option of part-time work can allow for further skills and personal development, alongside employment. And participation in work experience or other voluntary work can be an important first step into the labour market as it helps the young person to build confidence, work references and basic employment skills. When the young person is ready to enter the general workplace, Youth CONNECT will support them to seek work through Job Active and other employment pathways, and help them resolve employment or education issues as they arise. Billy, 15, was placed in care after he experienced physical harm, exposure to neglect and domestic violence in his family home and had become homeless. While homeless, Billy had been committing offences and his alcohol and drug misuse was increasing. He was no longer attending school and while he had enrolled in a training course, he only attended one session. Billy was introduced to Access Place social enterprise and agreed to participate. He was partnered with a mentor and began a traineeship. With a great deal of support, he has successfully continued to engage in this program and has now begun to complete a series of living skills development modules. He has also begun further training and is slowly building positive relationships and networks. Most importantly, he has started believing in himself. (4) Personal development Many young people accessing the Program will have a range of issues that may impact on their ability to maintain education, training and employment activities for periods of time. These circumstances can include mental health concerns, drug and alcohol misuse, becoming a new parent or having a small child. Given the nature of these issues, there will be times where the most pressing need for the young person is to seek the required professional support and develop the necessary help-seeking behaviours that will support increased personal resilience in the future. In these circumstances, Youth CONNECT will, as part of the case management support provided to the young person, ensure access to services and support networks appropriate to their particular needs including accredited parent education courses, supported playgroups, formal counselling sessions, psycho-educational activities, and group work sessions. This personal development component of the Program is key to ensuring that a young person can access both the technical and social support systems that are crucial to cope in times of personal need. Youth CONNECT will support participants to build the skills necessary to form and sustain positive relationships with family, friends, support services and within interpersonal relationships, in order to develop a greater sense of belonging, connection and inclusion. The goal is to work with the young people to develop their own family, friend and community networks that can be there to provide support both during the Program, and into their future lives. 14 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

17 A sibling group of Aboriginal children, who had a history of exposure to significant domestic and family violence, parental substance abuse, the death of a sibling, physical abuse and neglect, were placed in our care. The siblings had lived separately from each other, and in places removed from their community and culture, for several years prior to this placement. Recognising the impact that this loss of connection was having on these children, we developed a cultural support plan for them. Working with the relevant Aboriginal and Torres Strait Islander entities, they located extended family members who could potentially provide safe placement options and cultural connections. The siblings were eventually reconnected with family members and to their culture. This enabled the siblings to start a healing process, finding strength in their culture and in each other. (5) Cultural competence For Program participants from an Aboriginal and Torres Strait Islander background, Youth CONNECT will develop a specific cultural support plan, in consultation with the young person and significant others they identify. The Aboriginal and Torres Strait Islander Engagement Manager will provide support and oversight to Program staff to ensure these plans are meaningful, individualised, and culturally safe. This plan helps to: nurture and support young people to explore, understand and strengthen their cultural identities and connection, and what this means to them as an Aboriginal and Torres Strait Islander person strengthen cultural and kinship ties increase their knowledge and understanding of their family, kinship and community structure. Where appropriate and possible, the Program will also seek to support Aboriginal and Torres Strait Islander young people to access stable and safe accommodation closer to their community. This will occur by working closely with local Elders and community and by drawing on our service and support networks across Queensland. 2.3 Four-phase delivery model Youth CONNECT is a four-phase model of service delivery. While the time each young person spends in each phase will vary, all four phases must be completed within a three-year period. Each phase is underpinned by access to safe and stable housing and a focus on moving the young person from reliance to resilience, and from dependence to independence. Movement between the phases is determined by conducting an assessment of progress on the Outcomes Star (see section 2.4). ENGAGE (3 6 months): Goal: actively engage the young person and support him or her to access the Youth CONNECT Program. Engage the young person to participate in the Program (informed consent obtained prior to initial contact): relationship building through person-centred methods of engagement; general information gathering; initial identification of strengths and needs using Outcomes Star. Develop an Initial Support Plan: directed and owned by the young person in consultation with family and relevant stakeholders; information sharing with consent. Move to the Build phase when: the young person has consented to being supported by the Youth CONNECT Program; the young person has exited statutory care or detention (depending on referral pathway); the Initial Support Plan has been developed; and appropriate housing options have been assessed and sourced. BUILD (6 12 months): Goal: provide intensive support to bridge the gap between key life transitions for the young person. Ongoing client-focussed case management process focusing on: continuing to engage the young person to identify goals; assessing needs; developing a collaborative plan; delivering that plan; continually evaluating effectiveness of plan and making appropriate adjustments; and preparing for transition. Commence support plan activities including: housing support and education/work/employment opportunities (e.g. CYCLE, Access Place Social Enterprise). Provide intensive support including: coordinating all actions and services identified in the transition to independence support plan; weekly meetings with the young person to maintain progress against the goals; and actions identified in the support plan. Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 15

18 PRACTISE (6 12 months) Goal: the young person moves to a point where they only need minimal outreach contact to maintain stability. The young person practises implementing their newly developed resilience skills and abilities. Focus on supporting the young person to strengthen their family, community and social support networks. Planned step down of the intensive support towards a coaching or mentoring role seeking to provide the safety net that young people in the general population often receive from parents. Flexibility to step-up and step-down support as needed. DEMONSTRATE (6 months): Goal: the young person demonstrates increased capability to survive and thrive in the general community. Program support is stepped down, but still provides access to outreach support for reassurance, advice or intermittent support. Focus on evaluating increased resilience. Success: demonstrated ability to maintain stable housing and a combination of engagement in education, employment and personal development activities. If a young person fails to demonstrate resilience, they can be supported to re-enter the next Demonstrate phase in the following year. We expect the Program participants to progress through these phases over the bond period as follows: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total Total intake over life of bond Approximate number of young people accessing services per year Year 1 of Program Year 2 of Program Year 3 of Program Total individuals per year Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

19 2.4 Monitoring progress Youth CONNECT is designed to be an agile program ready to adapt to the feedback collected by active and ongoing monitoring. In addition to using our established data and case management systems, Youth CONNECT will use the Outcomes Star as the primary tool for seeking regular feedback on how the young person is responding to the Program supports, and when they are ready to transition from one program phase to the next. The Outcomes Star is emerging as one of the most important tools in social service delivery and is being used in more than 50 government departments and social service organisations in Australia. Its journey of change philosophy both encapsulates the evidence on the key factors young people need to achieve their outcomes, and empowers them to be part of the caseworker s assessment process. The engagement of the young person increases their sense of agency over their own destiny, thereby improving the likelihood of positive progress through the Program. The following is an example of an application of the Young Person s Outcomes Star, which indicates a young person s progress from light green to dark green over a period of 6 months. MONEY AND RENT PRACTICAL LIFE SKILLS CHOICES AND BEHAVIOR ACCOMMODATION WORK AND LEARNING 5 HEALTH PEOPLE AND SUPPORT 2.5 Achieving success A young person in the Youth CONNECT Program will have achieved a successful outcome if they can demonstrate improved resilience to homelessness. A young person with this resilience will have begun developing the personal, emotional, social and practical resources needed to stay out of homelessness, and will begin building a positive future for themselves. They will be more confident; better able to activate their own strengths and utilise personal resources in times of stress or when faced with adversity; and less affected by negative influences. For the purposes of measurement under the Youth CONNECT Program, a young person will have demonstrated that improved resilience to homelessness by: 1. maintaining housing stability during the six month Demonstrate phase AND 2. participating in a combination of education, employment and personal development activities for 12 months (over a period of 14 months), including for a continuous period during the six month Demonstrate phase. There will be no success under the Program if the young person cannot maintain continuous housing stability in the last six months of the Program. This is because stable housing underpins the development of all other resiliency factors. If the housing stability is maintained, then the combination of education, employment and personal development activities that the young person is required to demonstrate over a period of 12 months, will depend on the individual s circumstances. The point is that the young person must demonstrate progress in their capacity to engage and sustain participation in the key areas that the research says are fundamental to building resilience education, employment, and personal development. HOW YOU FEEL Sample of the Young Person s Outcomes Star indicating an individual s progress in all but the practical life skills domain over an initial six month period (light green to dark green). Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 17

20 3. Experience, expertise, capacity and stability of Churches of Christ Queensland Churches of Christ in Queensland have been an active part of the community for more than 132 years and have a significant presence in Queensland, Victoria and Vanuatu with over 300 services in more than 100 communities. Thanks to the support of over 3,370 staff and 1,500 volunteers, we impact tens of thousands of lives each year through a range of community care services to assist families, the elderly and people in need. During , the organisation delivered community and care services to approximately 40,000 people across Queensland and Victoria, and received income of approximately $235 million. We are one of the top 10 not-for-profit organisations in the Health and Community Services sector in Australia (BRW Top 500 Private Companies, September 2015) and have a strong reputation for advancing the physical, mental and emotional health of individuals, families and communities in an integrated and relevant way. We are currently one of the largest providers of out-of-home care services in Queensland, supporting approximately 20 per cent of Queensland s children and young people in state care. We have established teams dedicated to providing holistic case management, housing, education and workplace support to those young people. Youth CONNECT leverages this expertise and experience that we have built with this Cohort of vulnerable young people, and applies it to the next phase of their lives, namely their transition to independence. 3.1 Over 35 years experience managing social and affordable housing and providing supported accommodation Churches of Christ Housing Services (CofCHS) is a wholly owned subsidiary of Churches of Christ in Queensland and is one of the largest social and affordable housing providers in Queensland, with a wide range of housing options across many locations. As a Tier 1 provider under the National Regulatory Scheme for community housing, our range of housing services include crisis and short term housing, transitional (mediumterm housing), long-term community and affordable housing (including the National Rental Affordability Scheme). We manage approximately 1,200 properties in Queensland, assisting households ranging from those considered very high needs, to those with moderate needs but facing significant financial stress. Using a strengths based approach, we support tenants by providing case management and tenancy planning support through its Community Cohesion team, which focuses on achieving long-term and sustainable housing outcomes tailored to the individual household. The majority of properties in the portfolio are new build following the Government s investment in social housing through the Nation Building Economic Stimulus Plan launched in Their portfolio comprises: 451 wholly owned properties (36% of portfolio) 513 properties managed on behalf of Department of Housing and Public Works (40% of portfolio) 297 properties managed on behalf of NRAS Investors (24% of portfolio) The largest concentration of properties is in Ipswich and surrounding communities, with the remainder spread between Brisbane and surrounding suburbs, the Gold Coast, the Sunshine Coast and Moreton Bay. Housing Services currently employ 43 staff to directly undertake the housing and property management of the portfolio and have offices at Kenmore (Head Office), Ipswich, Southport, Bribie Island and Caloundra, along with a number of site based office spaces at several housing developments years experience supporting young people in state care For more than 45 years Churches of Christ in Queensland has delivered services to children, youth and families, including a range of therapeutic out-of-home care services such as foster and kinship care, intensive foster care, residential care (immediate response to medium-term) and supported independent living programs across Queensland. Our Children, Youth and Families team employs over 500 people with a diverse range of skills, experience and expertise in working with children, young people, their families and the community. The programs provide therapeutic and practical support and assistance to over 2,800 children and young people in out-of-home care, annually. We also provide a range of additional services to support children and families. We are a leading provider of early childhood learning and care services, intensive family support and family and child connect services, responding to local family and community needs. We provide information, referral, intensive and practical support services and assistance to vulnerable families assisting them to become stronger, more capable and more resilient. All programs are aimed at improving the quality of life, health and wellbeing for children, young people and their families. Our Supported Independent Living Service (SILS) which has been operating for over 30 years provides accommodation and supported care for young people transitioning from foster care and residential care to more independent living environments while still under a statutory care order. The Youth CONNECT design has been based on the experiences built in this program, amongst other things. 18 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

21 3.3 Strong cultural competence Approximately one third of the children we care for under statutory orders are from an Aboriginal and Torres Strait Islander background. Our approach to case management and care for these young people both recognises and enables cultural strength as a critical factor in facilitating healing, and reducing the impact of trauma. In the organisation s journey towards strong culturally capable services we have established formalised engagement processes at the state and regional level to work in partnership with Aboriginal and Torres Strait Islander children, young people, families and communities. The Youth CONNECT service capacity and cultural capability will be supported through existing practice, procedures, relationships and partnerships currently in place across all proposed services delivery locations. For example, we have been providing residential, Supported Independent Living Services, fostering and intensive fostering services to a large proportion of Aboriginal and Torres Strait Islander children and young people in the Youth CONNECT locations for between 10 (Townsville) and 30 (South East Queensland) years. During this period, we have provided culturally inclusive services through engaging the traditional owners in the local communities, increasing cultural awareness and understanding with staff, recruiting a Statewide Aboriginal As a part of our culturally-grounded strengths-based approach to case management, a group of Indigenous young people were connected with a local Aboriginal artist, and it was through this relationship and art that the young people began to develop a strong understanding of their cultural identity. The major piece of art that the young people helped to create is now the artwork used as the cover of the Churches of Christ in Queensland Reconciliation Action Plan and Torres Strait Islander Engagement Manager, and significantly increasing the number of Aboriginal and Torres Strait Islander staff. We are continually striving to be a culturally safe and inclusive organisation that actively consults, nurtures, develops and maintains positive and respectful relationships with Aboriginal and Torres Strait Islander peoples and communities and view people as active and equal partners in service development and delivery. We work side-by-side with Indigenous communities to help promote strong, safe, nonviolent communities and services that support children, young people and families to build resilience and thrive. Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 19

22 3.4 Strong governance Churches of Christ in Queensland allocates significant resources to corporate governance and risk management processes to promote the adoption of best practice methodologies across the organisation. Quality management systems incorporate the approach of ADRI (Approach, Deployment, Results, Improvement), based on the Australian Business Excellence Framework. The organisation has a comprehensive range of policies, procedures and systems in place to govern the professional and effective operation of all services. We comply with relevant legal and financial accountability requirements, including licensing, certification standards and a formal risk management policy. In 2017, we achieved re-certification under the Human Services Quality Framework and received our Organisational Level License in July Business performance is monitored by support service teams including the Financial Management, Procurement, Fleet and Sustainability, Human Resources and Governance and Professional Standards Units. The organisation s finances are managed centrally by qualified accountants generating and reviewing financial data extracted from a single common systems environment. Actual operating costs are compared to the budget on a monthly basis by Service Managers, normally within ten working days of a month end, and variance reports are provided to senior management. Expenditure is acquitted against Government funding as required by service provider responsibilities, and accounts are audited independently by Grant Thornton. Operationally, we foster continual improvement and learning through: annual strategic planning processes; rigorous performance measurement and data collection focussed on client outcomes; organisational reviews; and process audits. The organisation conducts formal surveys of clients and stakeholders and has an open compliments/ complaints process. Service reviews include input from children, young people and families; feedback from relevant Government Department and other non-government organisations; input from staff at all levels of the organisation; and regular service reviews with the relevant funding bodies. Annual internal service reviews examine the administrative, financial, care planning, legislative and operational processes within the services. An internal Continuous Improvement Group conducts ongoing policy/procedure reviews and improvements. 3.5 Financial stability The organisation s financial position reflects our accumulated history and demonstrates a strong balance sheet with net assets of $185 million. The total revenue in the same period was $235 million. A significant proportion of the assets are held in property, plant and equipment providing our service outlets in locations throughout Queensland, Victoria and Vanuatu. The full detail of the financial position is available in the audited financial statements, which will be included in the Data Room provided to prospective investors. 3.6 Highly qualified key personnel All positions within Churches of Christ in Queensland are supported through comprehensive position descriptions to ensure clear definition of roles and responsibilities. Positions support the vision and strategies of the organisation s Reconciliation Action Plan and the Cultural Diversity Employment Plan. There is a comprehensive staff development curriculum that is supported through a dedicated learning and development unit. These training and development resources allow the organisation to build strong and competent teams of professionals. The curriculum ensures all staff working in the service with young people have a thorough knowledge of our practice model and relevant legislation. 20 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

23 The key personnel responsible for management of Youth CONNECT are: Mike Folland is the Manager, Enterprise Development and brings a broad range of commercial and community development experience within Australia and the Asia/Pacific. Before coming to Churches of Christ in Queensland in 2015, Mike worked for Origin Energy as a Senior Contracts Manager on large scale renewable energy projects in Indonesia, Papua New Guinea and Australia. He has a Bachelor of Theology and Advanced Diploma of Business (Procurement and Supply Chain) and has also worked as an Army (Reserve) Chaplain since Mike worked for Churches of Christ in South Australia, Victoria and Vanuatu from 1990 to 2005, including three years lecturing at a remote community college on South Pentecost, Vanuatu. Mike s role within the organisation has included leading the bid and negotiation team for this Bond. Leanne Rutherford is the General Manager Children, Youth and Families, and has over twenty years experience working in the human services sector. Leanne has extensive management and leadership experience and has been with the organisation since She has worked in a number of roles including Business Development and Strategy Manager, Operations Manager and front line positions in residential and foster care programs. Her experience in the child protection, domestic violence and youth justice areas includes working for the Queensland Government and in the youth residential system in England. Her formal qualifications include Bachelor of Arts (double major in Psychology and major in Welfare Studies), Diploma of Business and a Post Graduate Diploma in Domestic and Family Violence Practice. Frances Paterson-Fleider is the General Manager, Churches of Christ Housing Services and has worked in housing services for 33 years within a range of different organisations including large government departments and small specialised housing providers. Frances is accomplished in all areas specialising in Housing Management, Asset Management, Housing Support, Community Development, Housing Renewal and Property Development. She studied housing at Heriot-Watt University in Edinburgh and graduated in In January 2013, she also completed a Masters Degree in Property Development through Robert Gordon University in Aberdeen. Frances has represented the housing sector on Government policy into homelessness in Scotland, the supporting people legislation, and also took a lead role in the development of a Common Housing Register for her region. She has represented the community housing sector in a number of forums including the Queensland Housing Assistance Forum with the Housing Minister. Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 21

24 4. Transaction structure and key documents 4.1 Structure overview The Youth CONNECT Social Benefit Bond involves only a limited number of contractual arrangements as depicted below: Queensland Government Implementation Agreement Churches of Christ (Service Provider / Issuer) Investors 4.2 Implementation Agreement SBB Deed Poll The Implementation Agreement commenced on 30 June 2017 and ends on the seventh anniversary of the Establishment Date. (1) Objectives The objective of the Implementation Agreement is to raise funds for and assist and support a targeted support service to improve independent housing stability by improving resilience (to homelessness) of young people exiting or who have exited, statutory care or custody and are homeless or at risk of homelessness. (2) Obligations The Implementation Agreement sets out the obligations of the Queensland Government and Churches of Christ in Queensland (CofCQ), including terms covering: conditions precedent to the Implementation Agreement coming into force, which includes confirmation of the full subscription of the Bonds; eligibility criteria for service users and referral processes; performance measures adopted and the methodology for payment of project funds with outcome payments over the term of the Bond which are based on a cumulative measure against the baseline measure; annual review of performance with a scheduled review to be had after the third annual review or otherwise if performance levels warrant (a specific review) and the consequences of any review; breach and termination provisions; insurance requirements and indemnity provisions; general provisions, such as dispute resolution, warranties, indemnities, administration, intellectual property rights and confidentiality. (3) Annual Reviews An annual review will be undertaken by representatives of the Government and CofCQ. The review will include: the performance of the parties in achieving objectives; the performance of the Program and progress in delivery or achievement of the outcomes for each Cohort. Summary results of the annual review may be made available to Bondholders each year. In addition, there will be at least 1 additional review following conclusion of the third annual review (occurring in 2020) (the Scheduled Review). The Scheduled Review will include a review of the suitability of the maximum number of referrals, service user engagement and levels of dis-engagement of service users, such other matters as are specified in the Operations Manual or as the parties may reasonably determine. If: in respect of Performance Assessment Date 2 or Performance Assessment Date 3, the cumulative performance is assessed at Above 2 or below; or at any time following Performance Assessment Date 1, the State reasonably believes that cumulative performance will be below baseline, the parties will complete another review in accordance with the timeframes set out in the Operations Manual (Anticipated Performance Review) (the Scheduled Review and Anticipated Performance Reviews are, collectively, the Specific Reviews). An Anticipated Performance Review will include a review of prospective payment obligations of the State and CofCQ respectively under the Implementation Agreement and such other matters as are specified in the Operations Manual or that the parties may reasonably determine. Following completion of the Scheduled Review, either party may request in writing that the Implementation Agreement be varied or amended, and the parties agree to enter into negotiations, for a period of not more than two months, in good faith to agree to such variations or amendments. Following completion of an Anticipated Performance Review, the State may request in writing that CofCQ provide such additional assurances as the State, in its discretion, requires to protect its rights under the Implementation Agreement, and CofCQ agrees to use its best endeavours to do anything to give effect to the requirements and conditions of that request. If the parties are unable to reach agreement to such variations or amendments within two months from the commencement of negotiations or CofCQ is unable to complete the steps necessary to comply with a request from the State within two months from the date of request, either party has the right to terminate the Implementation Agreement. However, if CofCQ fails to use its best endeavours to comply with a request made by the State following completion of an Anticipated Performance Review, 22 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

25 it will constitute a breach of the Implementation Agreement incapable of remedy, and CofCQ will not have a right to terminate. The Scheduled Review undertaken in 2020 will enable an assessment to be made as to whether the Program is likely to perform above the baseline figure of 20%. If the outcome of the first Cohort is less than the 20% baseline figure and there is no or little apparent improvement in the outcome of other Cohorts, then the Implementation Agreement may be terminated as specified below. (4) Early termination The termination of the SBB Implementation Agreement can occur in the following circumstances: (a) (b) (c) (d) termination by the State for convenience or for cause (including material breach of the Implementation Agreement; breach of the Implementation Agreement on a recurring basis in any rolling three-month period (and at least three notices requiring remedy have been issued); an amendment to the CofCQ constitution makes it no longer eligible to receive Payments or to comply with the Implementation Agreement; a conflict of interest that the State reasonably considers will have a material adverse effect; insolvency; abandonment of service delivery; change of control; and any transaction document is declared invalid or unenforceable other than as a result of a change in a relevant law); termination by CofCQ for cause (due to a material breach of the Implementation Agreement by the State); termination following a Specific Review; termination in no fault scenarios including force majeure events such as natural disasters, industrial action, war and power shortages and a change in law with adverse consequences. Please see section 5.4 (Early Termination Payments) for details of the consequences of termination under each of these circumstances. 4.3 SBB Deed Poll and the Bonds The Bonds are direct, unsubordinated and unsecured obligations of the Issuer. The payment of principal and interest is not guaranteed in any way by the Issuer, and is limited to all amounts received by the Issuer under the Implementation Agreement, together with the balance of funds standing to the credit of the Application Account, other than to the extent that any such payment obligation of the Issuer arises as a result of: (a) (b) an event described in clause 8(a) (non-payment of principal), (b) (non-payment of interest) or (c) (other non-compliance) of the SBB Deed Poll; an event described in clause 8(d) (obligations unenforceable) of the SBB Deed Poll, in circumstances where the State does not exercise its equivalent termination rights under the Implementation Agreement; or (c) an event described in clause 8(e) (insolvency) of the SBB Deed Poll, in circumstances where the State does not exercise its equivalent termination rights under the Implementation Agreement. For the avoidance of doubt, the Bondholders have no direct rights under, and no ability to enforce any provision of, the Implementation Agreement. Neither investors nor CofCQ have any recourse against the Registrar. In addition to any other rights provided by law or under the Conditions, at any time after an Event of Default has occurred, each Bondholder may, at any time, by notice to the Issuer, declare all or any part of the Redemption Amount in respect of each Bond held by that Bondholder to be due and payable immediately, on demand or at a later date as each respective Bondholder may specify in the notice. See clause 8 (Events of Default) of the SBB Deed Poll. The Events of Default are: (a) (b) (c) (d) (e) (non-payment of principal) the Issuer fails to pay any principal in respect of the Bonds when due or, if the failure to pay on time is caused by an administrative or technical error beyond the control of the Issuer, within 2 Business Days after the due date, provided that at the relevant time it has sufficient funds standing to the credit of the Application Account to make such payment; (non-payment of interest) the Issuer fails to pay any interest in respect of the Bonds when due and the failure to pay continues for a period of 2 Business Days, provided that at such time it has sufficient funds standing to the credit of the Application Account to make such payment; (other non-compliance) the Issuer (i) fails to comply with any of its material obligations in connection with a Bond (other than in relation to the payment of money referred to in paragraphs (a) or (b) above); and (ii) if the non-compliance is capable of remedy, it is not remedied within 30 days after notice of such default shall have been given to the Issuer by any Bondholder; (obligations unenforceable) the whole or a material part of any Bond or the SBB Deed Poll is or becomes (or is claimed to be by the Issuer or anyone on its behalf) void, voidable or unenforceable, or the whole or a material part of any Bond or the SBB Deed Poll ceases to have full force and effect, or the whole or a material part of any Bond or the SBB Deed Poll is declared by any court of competent jurisdiction to be void or unenforceable; or (insolvency) the Issuer becomes Insolvent. The Bonds have an expected overall term from the issue date of a little over 6 years 9 months (i.e. from the targeted Financial Close date of 22 September 2017 to 30 June 2024). For details of the determination of Coupon Payments, and the timing and amounts payable for redemption of the Bonds, see section 5 (Calculation of Payments). Terms and conditions for the subscription of the Bonds are set out in section 8 (Applications). Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 23

26 5. Calculation of payments 5.1 Summary of estimated investor returns The total internal rate of return (IRR) on each Bond depends on the performance of the Youth CONNECT Program in creating resilience to homelessness for young people who are exiting, or have already exited, statutory care. That performance will be calculated as a cumulative total for the Cohort of 300 young people as they move through the Program in four intake groups. The first Cohort of 60 young people will be assessed in the second quarter of 2021 and verified by the Independent Certifier (to be appointed) (i.e. 3 years and 3 months after the Program commences) and annually thereafter until the last Cohort of 50 has been assessed (i.e. 6 years and 3 months after commencement of the Program). Performance Band (against the Baseline Measure) Cumulative Performance Level (Percentage) Variable Performance Coupon Paid to Investors (per $100 Bond) Investor IRR Below Baseline 0-20% nil nil Above Baseline 1 >20-25% $ % Above Baseline 2 >25-30% $ % Above Baseline 3 >30-35% $ % Target 1 >35-40% $ % Target 2 >40-45% $ % High Performance 1 >45-50% $ % High Performance 2 >50-55% $ % Outperformance 1 >55-60% $ % Outperformance 2 >60% $ % Investor IRR depends on Cumulative Performance Level. The cumulative performance will be assessed at each of these measurement points and the outcome payments made by the State will be passed on to Bondholders in the form of Performance Coupons 6 months after each performance assessment. Performance Coupons will be trued up when subsequent payments to Bondholders are made to ensure that the total Performance Coupon reflects the cumulative performance of the Program. Below is an example of how the Performance Coupons would operate as the cumulative performance is calculated, assuming an investment into the full $5 million offering (50,000 Bonds at $100 each). As each of the Cohorts completes the Program and the demonstration of their increased resilience is measured and verified, their outcomes will be allocated to a performance band. In this example, 45-50% of the 60 young people in Cohort 1 demonstrated stability in housing plus education and/or employment and/or personal development, thereby achieving a High Performance 1 band. The Performance Coupon paid is therefore $717,000 ($14.34 x 50,000). The 95 young people in Cohort 2 did not do as well in the following year, with only 30 35% demonstrating stability. Therefore this Cohort s performance falls into the Above Baseline 3 band. Before the Performance Coupon is paid, the cumulative performance is calculated as follows: CP = (n1+n2)/tc Where: CP = Cumulative Performance n1 = number of young people in Cohort 1 achieving resilience n2 = number of young people in Cohort 2 achieving resilience TC = number of young people in the total Cohort who have been measured thus far In this example, CP = (28+30)/155 CP = 37% Cumulative Performance is Target 1 The adjusted Performance Coupon payment for Cohort 2 is therefore: Coupon payment 2 = (Target 1 coupon payment 2) High Performance 1 coupon payment Coupon payment 2 = (514,500 x 2) 717,000 Coupon payment 2 = 312, Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

27 Performance Coupon Total Investor Variable Coupon Payment by Cohort Cohort Performance Band Achieved Cumulative Performance Band Achieved Total Cumulative Investor Variable Coupon Payments Truing up Total Investor Coupon Payments 1 $717,000 High Performance 1 High Performance 1 717, ,000 2 $446,000 Above Baseline 3 Target 1 514, ,000 3 $514,500 Target 1 Target 1 514, ,500 4 $614,000 Target 2 Target 1 514, ,500 Example truing up investor coupon payments to reflect cumulative performance. As each Cohort completes the Program and their increased resilience is measured through demonstrating stability in housing, plus education and/or work and/or personal development, the cumulative performance will be calculated and the next Performance Coupon payment adjusted up or down as required. The payment schedule for this sample bond performance would be as follows: Cohort Performance Band Achieved Cumulative Performance Band Achieved Cashflow (Trued-up Coupon Payments + Capital) Payment Date -5,000,000 30/09/2017 Fixed n/a 200,000 30/09/2018 Fixed n/a 200,000 30/09/2019 Fixed n/a 200,000 30/09/2020 High Performance 1 High Performance 1 717,000 30/06/2021 Above Baseline 3 Target 1 312,000 30/06/2022 Target 1 Target 1 514,500 30/06/2023 Target 2 Target 1 514,500 30/06/2024 5,000,000 30/06/2024 Example investor payments through life of bond. The cumulative internal rate of return over the life of the Bond in this example would be 7.5% (Target 1). Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 25

28 5.2 State Standing Charge and Outcome Payments CofCQ will raise up to $5 million from subscribers of Bonds and the balance of the funds required will be provided by the State as a Standing Charge of $2.4M and interest earned. The Standing Charge will be paid in regular drawdowns of $150,000 per quarter during the first 3.5 years of the Bond. If Above Baseline 1 outcomes are achieved and independently certified, the State will commence to make annual Outcome Payments to CofCQ. This will then allow CofCQ to pay a Performance Coupon to investors and also allow repayment of the principal of the Bonds on maturity. 5.3 Payments to Investors Subject to Early Termination referred to in section 5.4, coupons will be paid annually in the third quarter of 2018, 2019, 2020 (in the case of Fixed Coupon payments), and at the end of the second quarter in 2021, 2022, 2023 and 2024 (in the case of Performance Coupon payments). The payment in the second quarter of 2024 will also include repayment of the principal of the Bonds by way of redemption on maturity unless performance is assessed as Below Baseline (see table in section 5.1 above). There are 2 types of coupon payments; namely: (1) Fixed Coupon payments Fixed Coupon payments will be paid on or about: 30 September 2018; 30 September 2019; and 30 September The Fixed Coupon payment amount is 4% of the principal of the Bond. (2) Performance Coupon payments Performance Coupon payments will be paid within 10 Business Days of receipt by CofCQ of the corresponding Outcome Payment in the second quarter of 2021, 2022, 2023 and 2024 on or about: 30 June 2021; 30 June 2022; 30 June 2023; and 30 June Performance Coupon payments will reflect the performance against the agreed resilience measures. These will therefore be variable payments of between 5-11% as detailed in the table at section 5.1 above. 5.4 Early Termination Payments If the Implementation Agreement is terminated for any reason, a final payment will be made that reflects the performance of the Youth CONNECT Program up to the date of termination. If the Implementation Agreement is terminated: 1. As a consequence of the Scheduled Review, then the Termination Payment will be the greater of: 60% of the principal of the Bonds (which sum includes all Fixed Coupon payments made to that time); or the balance of the Application Account (which may include unspent interest); and 2. subsequent to the Scheduled Review, the Termination Payment will vary depending upon the grounds of early termination. Investors should refer to section 3 (Redemption and Purchase) of the SBB Deed Poll. 5.5 Benevolent donation option A Bondholder may, in respect of a Bond held by that Bondholder, elect that: (a) (b) on any date prior to the Redemption Date as nominated by the Bondholder, the Bond be transferred to the Issuer in connection with a donation made by the Bondholder to the Issuer, all in accordance with Condition 4.2 of the Conditions (Early Benevolent Donation); or as at the Redemption Date: (i) the Redemption Amount of the Bond be donated by the Bondholder to the Issuer; or (ii) part only of the principal amount of the Bond be donated by the Bondholder to the Issuer; and/or (iii) all or part only of the coupon (if any) payable on the Bond be donated by the Bondholder to the Issuer, together, the Benevolent Donation Options and, in each case, subject to Condition 4.6 ( Procedures of the Conditions). 5.6 Bond conditions The provisions of this section 5 represent a brief overview of the payment arrangements. Investors must refer to the Conditions (including Conditions 2 and 3) which comprise Schedule 4 to the SBB Deed Poll for the detail of coupon payments and redemption and purchase arrangements for the Bonds. 26 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

29 6. Risk factors Prospective Investors should carefully consider the risks and uncertainties described below and the other information contained in this Information Memorandum before making an investment in the Bonds. They are not an exhaustive description of all the risks associated with an investment in the Bonds and the Issuer may be unable to fulfil its payment or other obligations under or in connection with the Bonds due to a factor which the Issuer did not consider to be a material or significant risk based on information currently available to it or which it may not currently be able to anticipate. If any of the risks described below (or an unlisted risk) actually occurs, the value and liquidity of the Bonds could decline, and Bondholders could lose all or part of their investment. These factors are contingencies which may or may not occur and the Issuer is not in a position to express a view on the likelihood of any such contingency occurring. 6.1 Program performance Bondholder returns are primarily determined by the outcomes delivered through the Youth CONNECT Program. Bondholders are exposed to the performance capabilities of CofCQ. If CofCQ fails to perform and deliver the target outcomes, Bondholder returns will be adversely affected and in certain performance scenarios, Bondholder subscriptions may not be wholly repaid. Neither the Issuer, the State nor any other person guarantees that the target outcomes will be achieved. Prospective Investors are advised to review the description of the Youth CONNECT Program and its goals in this document to determine their own view on the future performance of the Youth CONNECT Program. Database and case management technology ensures that front-line staff can effectively capture client information and data on a day-to-day basis. Records are reviewed on a monthly basis by team supervisors to ensure that the young people are progressing in a positive manner. In addition, the Young Person s Outcomes Star will be used to guide a young person s progress through the Program (as described above), operating an early-warning system that a young person is not responding to the Program and may require additional supports to achieve the outcomes which trigger payment. Overall Program performance will be closely monitored by the Joint Working Group, a governance committee established under the Implementation Agreement. The contract manager will be represented on this committee along with other stakeholders. Annual reviews are scheduled within the Implementation Agreement and Specific Reviews at Performance Assessment Dates 1, 2 and 3. In addition, The University of the Sunshine Coast will conduct Participatory Action Research as part of its post-graduate research program, under the direction of Dr Phil Crane. This formalised process will evaluate and advise the operation of the Program Model to ensure alignment with Success Outcome goals. 6.2 Baseline figure The Baseline is the projected percentage of the Cohort who would have achieved the success criteria without any involvement in the Youth CONNECT Program. Outcome payments will not be generated until the percentage of successful participants exceed this figure. The baseline figure of 20% achieving stable housing is a conservative estimate developed by reference to the growing field of research in this area and the extensive experience of CofCQ regarding young people in state care. However, academics and government inquiries highlight the challenges in collecting reliable information regarding the experiences of a population that tends to be invisible once leaving the highly monitored state care system. Studies also emphasise the difficulty of tracking people with chaotic lives, no fixed address and an inherent distrust of government institutions like homelessness services which are generally the sources of comprehensive data sets. As a result, there is a risk that the Baseline figure may overestimate the true underlying homelessness rates that would eventuate for this Cohort in the absence of the Youth CONNECT Program. In this scenario, the likelihood of exceeding the Baseline would be more difficult, diminishing the potential to maximise returns. Conversely, the Baseline figure may be underestimated. Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 27

30 6.3 Housing supply The Youth CONNECT Program is a housing first model that relies on sufficient and appropriate accommodation in which to place the Program participants. Program performance could be compromised if insufficient suitable housing is available. The sourcing of appropriate housing stock will be undertaken by existing CofCQ staff on a business-as-usual basis, and in accordance with the principle that the provision of housing will be driven and adapted by client needs over the duration of the Program. Specialised housing officers will be appointed to manage the accommodation requirements supported by the existing housing services leadership team. The pipeline of housing stock for Youth CONNECT does not rely upon the availability of social housing, or any other property development approvals. Some of the housing will come from existing CofCQ housing stock, including stock that is currently designed for supported independent living services (for more details on the housing portfolio see section 3.1 above). The organisation will also seek further investment, independently of the Youth CONNECT budget, in new, refurbished or adapted accommodation which will provide a space where young people would naturally want to go and will be located near required supports. In addition, one of CofCQ s existing partners, the Lady Musgrave Trust, will supply up to six properties within the first year of the Program to provide accommodation for young women leaving out-of-home care, especially those who are single parents. In any event, if housing stock is unavailable or inappropriate, the Program budget allows for CofCQ to take out head-leases on appropriate share housing in order to provide timely accommodation options to Program participants. 6.4 Referral and engagement risk Outcomes and payments are determined by the annual percentage of participants achieving the success criteria. As success is measured as a proportion of the actual number of participants who are successfully referred, the volume of participants referred to the Program will not significantly affect the payments. The Implementation Agreement includes an Agreed Maximum Referrals provision which commits the State to provide a maximum number of referrals to the Youth CONNECT Program each year. However, there is a risk that some of the eligible young people who have agreed for their personal information to be provided to Youth CONNECT, do not ultimately decide to commence the Program. The first 5% of those young people who do not commence the Program will not impact on the successful outcomes of the Program. However, if anywhere between 5% and 10% of the people referred decide not to participate, those refusals will count towards an unsuccessful outcome. This means that the engagement risk for investors is capped at a total of 5% and only comes into play after 5% have decided not to enter the Program. Once participants have accepted a position within the Youth CONNECT Program, any person who disengages from the Program will count as an unsuccessful outcome. Currently this disengagement risk is estimated to be approximately 15%. 6.5 Service delivery organisation credit risk The Youth CONNECT SBB transaction relies on CofCQ to implement and deliver the Youth CONNECT Program under the Implementation Agreement. There is a risk that CofCQ may be unable to fulfil its obligations under the Implementation Agreement due to insolvency, which would trigger the early termination of the Implementation Agreement. During CofCQ had a total revenue of $235 million. For more on CofCQ s financial position, see section 3.5 above. 28 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

31 6.6 Early termination Section 4.2 (Implementation Agreement) sets out the scenarios under which the Implementation Agreement, and hence the Youth CONNECT SBB arrangements, may be terminated and the Bonds would be redeemed early. The State can elect to terminate the Implementation Agreement for convenience for any reason, which may include, without limitation, that it views the Youth CONNECT SBB arrangement as no longer consistent with its policy priorities or that the arrangements lack sufficient economic justification. In such a scenario, the Early Termination Payment payable by the State to the Issuer prior to Performance Assessment Date 1 is an agreed amount set to Performance Band Target 2. In addition, the Issuer would be paid the full Break Costs in such an event. The Bonds are required to be redeemed by the Issuer where early termination of the Implementation Agreement has occurred. At those times, a Bondholder may not be able to reinvest the redemption proceeds at an interest rate commensurate with the future expected returns on the Bonds. Potential Investors should consider reinvestment risk in light of other investments available. 6.7 Limited recourse and Events of Default In most situations, the recourse of a Bondholder is limited to amounts received by the Issuer under the Implementation Agreement, together with amounts standing to the credit of the Application Account. The only exceptions to this are upon the occurrence of certain default scenarios, as further described in section 4.3 (SBB Deed Poll and the Bonds), where there is full recourse to the Issuer. The Events of Default are limited, as also described in section 4.3 (SBB Deed Poll and the Bonds). 6.8 Change in economic conditions The Youth CONNECT Program includes employment and work readiness training. Employment outcomes for the participants can contribute and influence the Outcomes which determine the performance of the Youth CONNECT Program. In the event of a significant economic downturn, Youth CONNECT Program participants may experience challenging employment prospects and this could affect their overall outcomes. 6.9 Dependence on key personnel 6.10 Modifications and waivers The Conditions set out in the SBB Deed Poll contain provisions for Bondholders to consider matters affecting their interests generally and to agree to modification to the SBB Deed Poll and for variations of the Implementation Agreement and other Youth CONNECT SBB arrangement documents. These provisions permit defined majorities and, in certain circumstances, actions of the Issuer without Bondholder consent, to bind all Bondholders, including Bondholders who did not vote and Bondholders who voted in a manner contrary to the majority. For further particulars, see clause 10 (Variations) of the SBB Deed Poll Change of law The Conditions are based on the relevant law in effect as at the date of the issue of the Bonds. No assurance can be given as to the impact of any possible judicial decision, change to law (including by an action of the State) or administrative practice after the date of issue of the Bonds. Any material adverse impact arising from a change of tax legislation or law creates an Early Termination right for the Issuer Secondary market generally The Bonds will have no established secondary trading market when issued and one may never develop. If a market does develop, it may not be liquid. Investors may not be able to sell their Bonds easily or at prices that will provide them with a yield comparable to similar investments that have a developed secondary market. Illiquidity may have an adverse effect on the market value of the Bonds. No assurance of a secondary market or a market price for the Bonds is provided by the Issuer or by any other person Legal investment considerations may restrict certain investments The investment activities of certain Investors are subject to investment laws and directives, or review or regulation by certain authorities. Each potential Investor should consult its legal advisers to determine whether and to what extent (1) the Bonds are legal investments for it, (2) the Bonds can be used as collateral for various types of borrowing, and (3) other restrictions apply to its purchase or pledge of any Bonds. The Youth CONNECT Program relies on a number of key personnel already employed by CofCQ and an ability to attract and retain quality program staff. CofCQ intends to manage this risk by directly involving a number of senior and experienced people in the management of the Youth CONNECT Program and will maintain a business continuity plan and a succession plan. Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 29

32 7. Legal notices 7.1 Selling and distribution restrictions Under the SBB Deed Poll and subject to the conditions contained in this Information Memorandum, the Bonds will be offered by CofCQ. The organisation has the sole right to accept any offer to purchase Bonds and may reject that offer in whole or (subject to the terms of the offer) in part. Churches of Christ in Queensland agrees to comply with any applicable law or directive in any jurisdiction in which it may offer, place, sell or transfer Bonds and will not, directly or indirectly, offer, sell or transfer Bonds or distribute any Information Memorandum or other offering material in relation to the Bonds outside Australia and otherwise within Australia except in accordance with this Information Memorandum. Churches of Christ in Queensland has not represented that Bonds may at any time lawfully be sold in compliance with any applicable disclosure, registration or other requirements in any jurisdiction, or in accordance with any available exemption nor will it assume any responsibility for facilitating that sale. The following selling restrictions apply. (1) Australia The Bonds may only be issued or transferred to Australian residents who are not acquiring the Bonds through a permanent establishment outside Australia. No prospectus or other disclosure document (as defined in the Corporations Act) in relation to the Bonds has been, or will be, lodged with ASIC. A person (including CofCQ) may not make or invite an offer of the Bonds for issue or sale in Australia (including an offer or invitation which is received by a person in Australia) or distribute or publish this Information Memorandum or any other offering material or advertisement relating to the Bonds in Australia unless the offer or invitation (1) does not require disclosure to investors under Parts 6D.2 or 7.9 of the Corporations Act, (2) does not constitute an offer or invitation to a retail client as defined for the purposes of Chapter 7 of the Corporations Act, (3) complies with all other applicable laws and directives in the jurisdiction in which the offer, invitation or issue takes place and (4) does not require any document to be lodged with ASIC or any other regulatory body in Australia. (2) General The Bonds have not been, and will not be, registered under the U.S. Securities Act. The Bonds may not be offered, sold, delivered or transferred, at any time, within the United States of America, its territories or possessions or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the U.S. Securities Act). No action has been taken in any jurisdiction that would permit a public offering of any of the Bonds, or possession or distribution of the Information Memorandum or any other offering material in any country or jurisdiction. Persons into whose hands this Information Memorandum comes are required to comply with all applicable laws and directives in each jurisdiction in which they purchase, offer, sell, resell, reoffer or deliver Bonds or have in their possession or distribute or publish the Information Memorandum or other offering material. 7.2 Agency and distribution arrangements Churches of Christ in Queensland may agree to pay fees to any trustee or agent for undertaking its respective roles and reimburse them for certain of their expenses properly incurred in connection with the Bonds. Persons involved in the offer, issue and sale of the Bonds, and their respective related entities, directors, officers and employees, may have pecuniary or other interests in the Bonds and may also have interests pursuant to other arrangements and may act as a principal in dealing in, or as a custodian or nominee in holding, any Bonds. 7.3 Investors should obtain independent advice Investors should be aware that, in some scenarios, no Performance Coupon will be payable on the Bonds and repayment of principal on the Bonds may be at risk. This Information Memorandum is not investment advice and has been prepared without taking into account the investment objectives, financial situation or particular needs (including financial and taxation issues) of any investor. Each investor contemplating subscribing for, purchasing or otherwise dealing in any Bonds or any rights in respect of any Bonds should: make and rely upon (and shall be taken to have made and relied upon) its own independent investigation of the financial condition and affairs of, and its own appraisal of the creditworthiness of, the Issuer and the Bonds; 30 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

33 determine for themselves the relevance of the information contained in this Information Memorandum, and must base their investment decision solely upon their independent assessment and such investigations as they consider necessary; and consult their own tax advisers concerning the application of any tax or duty (including stamp and transactions duty) laws applicable to their particular situation. No advice is given in respect of the legal, taxation or accounting treatment for investors or purchasers in connection with an investment in any Bonds or rights in respect of them. In addition, this Information Memorandum does not include any information in respect of the taxation treatment of an investment in the Bonds. Investors or purchasers should, in connection with an investment or other dealing in any Bonds (including their transfer), consult their own professional advisers. 7.4 No authorisation No person has been authorised to give any information or make any representations not contained in or inconsistent with this Information Memorandum in connection with CofCQ, the Youth CONNECT Program or the issue or sale of the Bonds and, if given or made, such information or representation must not be relied on as having been authorised by any Relevant Party. 7.5 No independent verification No representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by any Relevant Party (other than the Issuer, on the terms provided under Important Notices), as to the accuracy or completeness of this information memorandum or any further information supplied in connection with the Bonds. No person named in this Information Memorandum has undertaken to review the financial condition or affairs of CofCQ at any time or to advise any Bondholder of any information coming to their attention with respect to CofCQ and make no representations as to the ability of CofCQ to comply with its obligations under the Bonds. 7.6 Currency of information The information contained in this Information Memorandum is prepared as of its Preparation Date. Neither the delivery of this Information Memorandum nor any offer, issue or sale made in connection with this Information Memorandum at any time implies that the information contained in it is correct, that any other information supplied in connection with the Bonds is correct or that there has not been any change (adverse or otherwise) in the financial conditions or affairs of CofCQ at any time subsequent to the Preparation Date. In particular, CofCQ is under no obligation to any person to update this Information Memorandum at any time after an issue of Bonds. 7.7 Documents incorporated by reference This Information Memorandum shall be read and construed on the basis that the following documents are incorporated by reference in and form part of this Information Memorandum and investors should review, among other things, those documents when deciding whether to purchase any Bonds: Implementation Agreement; the SBB Deed Poll; the Bond Issue Confirmation; and all other documents issued by CofCQ and stated to be incorporated in this Information Memorandum by reference. Any statement contained in this Information Memorandum shall be modified or superseded in this Information Memorandum to the extent that a statement contained in any document subsequently incorporated by reference into this Information Memorandum modifies or supersedes such statement (including whether expressly or by implication). The Bond Issue Confirmation or another supplement to this Information Memorandum may also supplement, amend, modify or replace any statement or information incorporated by reference in this Information Memorandum or a supplement to this Information Memorandum. Copies of documents which are incorporated by reference in this Information Memorandum may also be obtained from the offices of CofCQ on request. Any internet site address provided in this Information Memorandum is for reference only and the content of any such internet site is not incorporated by reference into, and does not form part of, this Information Memorandum. Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 31

34 8. Applications 8.1 How to apply Eligible investors (Applicants, and see further section 8.3 (Investor eligibility)) may apply for Bonds by submitting an Application Form that was attached to, or accompanied by, a copy of this Information Memorandum, and by providing the Application Payment (as described in section 8.5). Applications will only be considered where Applicants have applied pursuant to an Application Form submitted in accordance with Section 8.4 (Submission of Application Forms). CofCQ may in its sole discretion accept or reject an application. Applicants will be informed of the success of their application. The targeted closing date is 22 September The offer period may close early and so Applicants are encouraged to consider submitting their Application Forms as soon as possible. An Applicant cannot withdraw their Application Form once it has been lodged, except as permitted under the Corporations Act. 8.2 Subscription amounts The minimum subscription amount is $50,000 in principal amount of the Bonds. Investors may apply for additional Bonds in multiples of 10 Bonds ($1,000 in principal amount) above that minimum subscription amount. 8.3 Investor eligibility An application for the issue of any Bonds will only be accepted from, and Bonds will only be issued to, an investor that is (1) a person to whom it is lawful to make an offer of the Bonds, (2) a person to whom an offer or invitation for the issue, sale or transfer of the Bonds may be made without disclosure under Part 6D.2 or 7.9 of the Corporations Act, (3) not a retail client as defined for the purposes of Chapter 7 of the Corporations Act and (4) an Australian resident who is not acquiring an interest in the Bonds through a permanent establishment outside Australia. In particular, each such wholesale investor must be able to demonstrate that they are either: a sophisticated investor for the purposes of section 708(8) (c) of the Corporations Act by providing a certificate given by a qualified accountant dated no more than 6 months before the offer is made confirming that the investor has (1) net assets of at least A$2.5 million or (2) has a gross income for each of the last 2 financial years of at least A$250,000 a year; or a professional investor for the purpose of section 708(11) of the Corporations Act by either being (1) a person covered by the definition of professional investor in section 9 of the Corporations Act (except a person mentioned in paragraph (e) of the definition) or (2) a person who controls gross assets of at least A$10 million in accordance with section 708(11)(b) of the Corporations Act. In accordance with the above, any Bonds purchased by any person who wishes to offer such Bonds for sale or resale may not be offered in Australia in circumstances which would result in CofCQ being obliged to lodge a prospectus or other disclosure document (as defined in the Corporations Act) in relation to any Bonds with ASIC or any other regulatory body in Australia. 8.4 Submission of Application Forms Original completed Application Forms should be mailed to: Youth CONNECT SBB Churches of Christ in Queensland PO Box 508 KENMORE QLD Application Payments The Application Payment to be provided in connection with an application for any Bonds is an amount equal to the price per Bond multiplied by the number of Bonds identified by the Applicant in their Application Form. 8.6 Payment options There are 2 options for payment of Application Payments: (1) by personal or bank cheque, and (2) by direct deposit, as described below. (1) Cheque payments Cheques should be crossed Not negotiable and made payable to Churches of Christ Care and mailed with the completed Application Form to: Youth CONNECT SBB Churches of Christ in Queensland PO Box 508 KENMORE QLD 4069 (2) Direct Deposit Bank: Account name: BSB: Account number: Westpac Banking Corporation Churches of Christ Care ABN Where funds are electronically transferred or deposited directly to the bank account, details of the deposit should accompany the Application Form. CofCQ will accept notice of electronic transfer of funds as if deposited and cleared. Physical cash will not be accepted at any time. 32 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

35 8.7 Application Payments held by CofCQ All Application Payments received before Bonds are issued will be deposited by CofCQ in an account with the Westpac Banking Corporation which will be jointly controlled by CofCQ and the Registrar (Application Account). CofCQ will be entitled to all interest earned on monies held in the Application Account which monies are to be used for Program purposes and may not be returned to Bondholders as part of any Coupon Payment unless the circumstances in section 5.4 (Early Termination Payments) arises. After the Bonds are issued to successful Applicants, the Application Payments will not be payable directly to CofCQ but will be drawn-down by CofCQ over time and with the prior approval of the Registrar in accordance with the terms of the SBB Deed Poll. Draw-downs will only be made on a quarterly basis as required by CofCQ to meet Program costs and required coupon and principal payments. At the beginning of each quarter, an amount will be transferred from the Application Account to the specific account maintained by CofCQ for the operation of the Program (Youth Connect Account) to fund the operational expenses of the Program for that quarter. CofCQ warrants to investors that the funds released from the Application Account to the Youth Connect Account will be used only for the purposes of the Program and for no other purpose. Under the terms of the Implementation Agreement, the State has agreed to pay annual performance payments after the third year of the Program to CofCQ tied to the performance of the Program, and such amounts will be paid directly to the Application Account by the State. These outcome payments will enable the repayment of the principal and the coupons to bond holders. Payment of the bond coupon and principal redemption will be met from the proceeds of the Application Account, but capped (both as to principal and coupon payments) based on the performance of the Program in accordance with the Bond terms. 8.8 Refunds Applicants who are not allotted any Bonds, or are allotted fewer Bonds than the number applied and paid for as a result of a scale back, will have all or some of their Application Payments (as applicable) refunded (without interest) as soon as practicable after the first Issue Date. 8.9 Provision of TFN and/or ABN Under the Application Form, Applicants may also provide details of their Tax File Number (TFN) should they wish to do so. The collection and quotation of TFNs is authorised and TFN use and disclosure is strictly regulated, by tax laws and the Privacy Act. Applicants are not required to provide their TFNs. However CofCQ may be required to withhold tax from payments on the Bonds where the Investor has failed to provide their TFN, ABN or proof of a relevant exemption Provision of bank account details Under the Application Form, Applicants are also requested to provide account details. This nominated account will be used for the direct crediting of payments of Fixed Coupons and Performance Coupons, prepayment and repayment of principal and payments of other amounts. If this information is not provided under the Application Form, Applicants are encouraged to provide it to CofCQ as soon as possible thereafter. If a Bondholder has not notified CofCQ of an appropriate account by the close of business on the Record Date in respect of that payment, or the credit of any money to your account does not complete for any reason, then CofCQ will pay the relevant amount by cheque delivered (at the risk of the Bondholder) to the postal address most recently notified. No interest is payable in respect of any delay in payment Privacy statement In certain circumstances, CofCQ may be required by the Anti- Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), the Financial Sector (Collection of Data) Act 2001 (Cth), the Corporations Act (Cth), the Taxation Administration Act 1953 (Cth), the Income Tax Assessment Act 1936 (Cth) and other taxation laws to collect certain personal information about Bondholders. If an Applicant does not provide the information required on the Application Form, or provides incomplete or inaccurate information, CofCQ may not be able to accept or process their application. CofCQ may, for the purposes set out in this privacy statement, disclose personal information to related entities, agents, contractors and third party service providers (including mail houses and professional advisers) of CofCQ, regulatory authorities and in any case, where disclosure is required or allowed by law or where the Applicant has consented. If you become a Bondholder, CofCQ will include information about Bondholders (including name, address and details of the Bonds held) in the Register. The information contained in the Register will be retained, even if you cease to be a Bondholder. Information contained in the Register is also used to facilitate and process payments (including Coupons) and corporate communications (including annual reports and other information that CofCQ wishes to communicate to Bondholders) and to help ensure compliance by CofCQ with legal and regulatory requirements. A copy of CofCQ s Privacy Policy is available from cofc.com.au. The Privacy Policy states how CofCQ manages personal information and includes information about how a request to access and seek correction of the personal information held by CofCQ can be made. The Privacy Policy also contains information about how an Applicant can complain about a breach by CofCQ of the Privacy Act and how CofCQ will deal with such a complaint. Requests to access personal information, seek correction to personal information or make a complaint can be made to CofCQ by ing privacy@cofcqld.com.au or by mail at PO Box 508, Kenmore QLD Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 33

36 9. Key terms and dates 9.1 Key terms entities and contracts Key terms Churches of Christ in Queensland ABN Implementation Agreement Independent Certifier Investors SBB Deed Poll State Youth CONNECT Program or Program Youth CONNECT SBB, Bond or Bonds Youth CONNECT SBB Objectives Description Both the Issuer of Bonds and service provider of the Youth CONNECT Program. A contract between the State and CofCQ dated 30 June 2017 which is the framework agreement for the Youth CONNECT SBB arrangement. Government payments to CofCQ will be a combination of a fixed Standing Charge and Outcome Payments based upon the expected State savings generated from a decreased utilisation of homelessness services by the Service Users. See section 4.2 (Implementation Agreement) for details. An independent organisation that is appointed to determine the outcomes achieved by the Youth CONNECT Program. Wholesale Investors as described in section 8.3 (Investor eligibility) may subscribe for the Bonds. The Youth CONNECT SBB Deed Poll dated 3 August 2017 made by CofCQ. The SBB Deed Poll sets out the terms and conditions of the Bonds and the obligations of CofCQ as issuer in relation to them. The government of Queensland acting through the Minister for the Department of Housing & Public Works. A homelessness intensive case management program that aims to improve Service Users life outcomes. The Youth CONNECT Program is designed as a 3 year program. Medium-term Bonds offered by CofCQ which are direct, unsubordinated and unsecured debt obligations. The payment of principal and interest is not guaranteed in any way by CofCQ, and is limited to all amounts received by CofCQ under the Implementation Agreement, together with the balance of funds standing to the credit of the Application Account, other than to the extent that any such payment obligation arises as a result of the events and circumstances described in Condition 1.3 of the Conditions (Status and ranking) (see section 4.3 (SBB Deed Poll and the Bonds). For the avoidance of doubt, the Bondholders have no direct rights under, and no ability to enforce any provision of, the Implementation Agreement. The Application Account will be operated in accordance with the terms of the SBB Deed Poll. CofCQ agrees not to create or permit to exist any security interest over the funds in the Application Account. The Bonds will be issued in registered, uncertificated form in one tranche. The proceeds from the issue of the Bonds are to be used to create lasting and positive resilience outcomes (to homelessness) for young people being referred into the Youth CONNECT Program and, in particular, the expectation of a significant proportion of participants achieving stable housing, engaging in education and achieving qualifications relevant to their goals, engage in employment and commence pathways to financial stability and generally develop the personal skills that anyone needs to build positive, strong and reliable support networks and cultural connections vital to maintaining stability and reaching life goals. 34 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

37 9.2 Key terms Implementation Agreement Key terms Cumulative Performance Level Early Termination Outcome Payments Performance Assessment Date 1 Performance Assessment Date 2 Performance Assessment Date 3 Standing Charge Description The proportion (expressed as a percentage) of total success cases to the aggregate assessed group, as described in the table in section 5.1 (Summary of estimated investor returns). The Implementation Agreement may be terminated prior to its scheduled maturity in various circumstances as further described in section 4.2 (Implementation Agreement). In the event of an early termination, the State Government will make a final termination payment to CofCQ based on the terms of the Implementation Agreement. See section 5.4 (Early Termination Payments) for further details. The payments made by the State Government to CofCQ based on the Cumulative Performance Level for the relevant Assessment Performance Date after allowance has been made for Standing Charge payments. The 39th month anniversary of the Establishment Date. The 51st month anniversary of the Establishment Date. The 63rd month anniversary of the Establishment Date. An aggregate amount of $2,400,000 payable by the State Government to CofCQ by 16 equal quarterly instalments of $150,000 each on the first day of each quarter commencing on and from 1 October 2017 which sum represents a prepayment on account of Outcome Payments by the State. 9.3 Key terms Bonds Key terms Aggregate issue amount Early Termination Event Establishment Date Event of Default Fixed Coupons Investor Reporting Key Risks Performance Coupons Descriptions $5,000,000 in principal amount of the Bonds. The denomination of each Bond is $100. An Early Termination Event shall occur in respect of the Bonds if the Implementation Agreement is terminated prior to its scheduled maturity. The date of commencement of the Program. Events of Default are set out in clause 8 (Events of Default) of the SBB Deed Poll, and described in section 4.3 (SBB Deed Poll and the Bonds). An effective rate of 4% per coupon payable on the dates specified in section 5.3 (Payments to Investors). Annual performance and social impact reporting will cover Youth CONNECT Program outcomes and payments to Bondholders. Details concerning certain key risks of investing in the Youth CONNECT Program are set out in section 6 (Risk factors). A variable amount payable on the dates specified in section 5.3 (Payments to Investors). Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 35

38 Key terms Record Date Redemption Amount Redemption Date Redemption on Termination Subscription Amounts Taxes and stamp duty Transfers Descriptions 5.00 pm in the place where the Register is maintained on the eighth day before the related date on which payment is due to be made in respect of a Bond in accordance with the Conditions. In respect of a Bond, the aggregate of: (a) the outstanding principal amount of that Bond on the Redemption Date; plus (b) any other amount payable on that Bond in accordance with the Conditions, but which has not been paid. Means: (a) the maturity date specified in the Bond Issue Confirmation; or (b) if an Early Termination Event occurs, the date that is 3 months after the date on which the Early Termination Event occurs. Should early termination occur for any reason, each Bond will be redeemed at its Redemption Amount. Investors must apply to subscribe for a minimum of $50,000 in principal amount. The Bonds do not provide for any additional amounts to be paid in respect of any withholdings or deductions from amounts payable on the Bonds that may be required by law. Investors should obtain their own taxation, stamp duty and other revenue advice regarding an investment in any Bonds. Investors should note the transfer restrictions for the Bonds, including without limitation, those set out in clause 4 (Title and transfer) of the SBB Deed Poll. CofCQ s consent is required for any transfer of the Bonds. 9.4 Key Dates Key terms Youth CONNECT SBB applications open Description From 1 August 2017 to such date as CofCQ may determine. Effective Date Target 31 July The date upon which all Conditions Precedent have been met and the Implementation Agreement comes into force. The Effective Date could be as late as 31 August 2017 unless otherwise agreed by CofCQ and the Government. Financial Close The date upon which the Bonds are issued, targeted to be 22 September Subscription Amounts payable Subscription amounts will be held by CofCQ in the Application Account until the Bonds are issued. If the Implementation Agreement is terminated due to non-fulfilment of Conditions Precedent, all monies will be returned to Investors. Scheduled Maturity Date 30 June Bond Term 6.9 years. 36 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

39 10. Glossary of terms The following terms have these meanings when used in this Information Memorandum, but subject to the meanings and interpretation as provided in the Implementation Agreement, the SBB Deed Poll or the final Operations Manual (as applicable): Terms Meaning $, A$ or Australian dollars The lawful currency of the Commonwealth of Australia. ABN AFSL ASIC Bond Issue Confirmation Bondholder Bonds Business Days Australian Business Number. Australian financial services licence. Australian Securities and Investments Commission. The Bond Issue Confirmation to be confirmed by CofCQ in the form set out in the SBB Deed Poll (Schedule 2) For a Bond, each person whose name is entered in the Register as the holder of that Bond. Youth CONNECT social benefit bonds and includes an interest in them. A day that is not a Saturday, Sunday or any other day which is a public holiday or a bank holiday in Brisbane. CofCQ Churches of Christ in Queensland ABN Cohort Conditions Corporations Act Data Room Early Termination Date Implementation Agreement Information Memorandum IRR Preparation Date Each intake group participating in the Program, or all of those intake groups, as the context requires. The terms and conditions applicable to the Bonds, as set out in Schedule 4 of the SBB Deed Poll (Conditions of the Bonds), which may be supplemented, amended, modified or replaced by the Bond Issue Confirmation. Corporations Act 2001 (Cth). The electronic data room maintained by CofCQ to enable prospective investors to conduct due diligence of the prospective investment Any date on which the Implementation Agreement is terminated prior to Scheduled Maturity Date. As detailed in Section 4 (Transaction Structure & Key Documents). This information memorandum, and any other document incorporated by reference in it, and any of them individually. The internal rate of return for the Bonds In relation to this Information Memorandum, the date indicated on its face or, if this Information Memorandum has been amended, or supplemented, the date indicated on the face of that amendment or supplement and, in relation to any other item of information which is to be read in conjunction with this Information Memorandum, the date indicated on its face as being its date of release or effectiveness. Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 37

40 Terms Queensland Government Relevant Parties Register SBB SBB Deed Poll United States U.S. Securities Act Meaning Queensland Government and the State of Queensland (including all departments, agencies and other State bodies and personnel). The Issuer, Social Outcomes Pty Ltd and any person other than the Issuer acting as an agent from time to time and Relevant Party means any of them, as the context admits. The register of Bondholders established and maintained by CofCQ. A social benefit bond. As detailed in section 4 (Transaction Structure & Key Documents). The United States of America and its territories and possessions. United States Securities Act of 1933 (as amended). 11. Key Research References A sample of the research behind the Youth CONNECT Program design includes the following references: Bromfield, L., & Osborn, A. (2007). Getting the big picture : A synopsis and critique of Australian out-of home care research. Child Abuse Prevention Issues No. 26. Melbourne: Australian Institute of Family Studies, National Child Protection Clearinghouse. Cashmore, J., & Paxman, M. (1996). Wards leaving care: A longitudinal study. Sydney: Department of Community Services. Crane, P., Kaur, J., & Burton, J. (2014) Homelessness and leaving care: the experiences of young adults in Queensland and Victoria, and implications for practice. Homelessness Research Collaboration. Department of Families, Housing, Community Services and Indigenous Affairs, Canberra, ACT. Gaetz, S., & Scott, F. (2012) Live, Learn, Grow: Supporting transitions to adulthood for homeless youth, a framework for the foyer in Canada. The homelessness hub report series, report no 10. Johnson, G., & Mendes, P. (2014). Taking Control and Moving On : How Young People Turn around Problematic Transitions from Out-of-Home Care. Social Work & Society, 12 (1), Johnson, G., Natalier, K., Mendes, P., Liddiard, M., Thoresen, S., Hollows, A., & Bailey, N. (2010). Pathways from out of home care, Australian Housing and Urban Research Institute (AHURI) Final report no Malvaso, C., & Delfabbro, P. (2016). Young people with complex needs leaving out-of-home care: Service issues and the need to enhance practice and policy. Children Australia, 41(01), McDowall, J.J. (2009). CREATE Report Card 2009 Transitioning from Care: Tracking Progress. Sydney: CREATE Foundation Stein, M. (2005). Resilience and young people leaving care: Overcoming the odds. York, UK: Joseph Rowntree Foundation. 38 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

41 Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 39

42 Application form Churches of Christ in Queensland ABN (Issuer) has agreed to issue Youth CONNECT social benefit bonds (Youth CONNECT SBBs or Bonds) as described in the information memorandum (IM) prepared by the Issuer. This application form is an application for the Issue of the Bonds. This Application Form is supplemental to, and forms part of, the IM. It must not be distributed unless included in, or accompanied by, the IM. This Application Form the IM (including materials incorporated by reference therein) are important and you should read them in their entirety. In considering whether to apply for the Bonds, it is important that you consider all risks and other information regarding an investment in Bonds in light of your particular investment objectives and circumstances. It is strongly recommended that investors seek professional guidance which takes into account their particular investment objectives and circumstances from their own professional advisers. Instructions on how to complete this Application Form are set out below. Capitalised terms in this Application Form have the meaning given to them in the IM. Important: The terms of the Bonds are more complex than simple debt or ordinary equity instruments. Total number of Bonds to be applied for Enter the total number of Bonds you wish to apply for. The application must be for a minimum of 500 Bonds ($50,000). Applications for greater than 500 Bonds must be in multiples of 10 Bonds ($1,000). The Bonds will be issued in 1 tranche. Enter the amount of the Application Payment. To calculate this amount, multiply the total number of Bonds applied for by the Price (or Face Value) of each Bond, which is $100. For example, if you apply for the minimum number of Bonds (500), your Applications Payment will be $50,000 (being the 500 Bonds applied for, multiplied by $100). Applicant name(s) and details Enter the full name(s) you wish to appear on the register. This must be either your own name or the name of a company. Up to two joint Applicants may register. You should refer to the table overleaf for the correct forms of registrable title(s). Applications using the wrong form of names may be rejected. Enter your and postal address for all correspondence. All communications to you from the Registrar will be mailed to the person(s) and address as shown. For joint Applicants, only one and/or postal address can be entered. Enter your contact name and telephone number. This information may be used to communicate other matters to you subject to the privacy statement set out in Section 8.11 (Privacy Statement) of the IM. This is not compulsory but will assist us if we need to contact you. You may choose to enter details of the account into which payments to you in respect of the Bonds are to be made. If this information is not provided under the Application Form, Applicants are encouraged to provide it to the Issuer as soon as possible thereafter. You may also wish to provide an applicable Australian Business Number and/or Australian Tax File Number. Application Payment Your Application Payment can be made by (1) bank or personal cheque, or (2) by direct debit to the following account: Bank: Name: BSB: Account number: Westpac Banking Corporation Churches of Christ Care ABN Application Payments must be made in accordance with the terms specified in Section 8 (Applications) of the IM. Any application made without the full amount of the Application Payment will not be accepted. Lodgement of Application Form Completed Application Forms should be mailed to: Youth CONNECT SBB Churches of Christ in Queensland PO Box 508 KENMORE QLD 4069 Please direct all enquiries related to your application to: sandy@socialoutcomes.com.au or phone Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

43 Youth CONNECT SBB Application form STEP 1: Enter the total number of Bonds you wish to apply for Completed application forms should be mailed to: Youth CONNECT SBB Churches of Christ in Queensland PO Box 508 KENMORE QLD 4069 I/we apply for: Price per Bond Application Payment Bonds $100 $.00 (the number of Bonds applied for multiplied by the Price per Bond) Please tick the box below to advise how your payment will be made: Payment by cheque Electronic Funds Transfer (EFT) Reference No. (if Application Payment made by EFT) (Please complete your bank account details on the following page and provide a clear reference for EFT funds above.) STEP 2: Applicant name(s) and details Individual/joint applications refer to naming standards for correct form of registrable title(s) Title or company name Given name(s) Surname ABN (if applicable) Tax File Number Joint applicant 2 ABN (if applicable) Tax File Number Correspondence details postal address and Unit Street number Street name or PO Box City/Suburb/Town State Postcode Contact details Contact name Phone number Mobile number Turn over to complete the application form Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 41

44 STEP 3: Account details for payment All applicants must complete this section by providing details of an Australian banking institution. The nominated bank account must be in the name of the applicant. Bank Name/Institution BSB Account number Account name STEP 4: Eligible Investor Category Please mark each that apply to you and attach any required supporting evidence. Application amount exceeds $500,000 For business use in a large business Wholesale client/not for business use (please provide current qualified accountant s certificate) Sophisticated investor (please provide current qualified accountant s certificates) Company or trust controlled by a person who is a wholesale client/sophisticated investor (please provide current qualified accountant s certificate) Australian Financial Services Licensee Has or controls gross assets of at least $10 million (evidence required per Schedule 2 of the Purchase Deed) Trustee of a large superannuation fund (at least $10 million) APRA regulated body Registered financial corporation Listed entity or related body corporate Exempt public authority Body corporate/unincorporated body that carries on a business of investment Related body corporate of wholesale investor Additional information (confirming AFS licence no., type of APRA regulated body or category of registered financial corporation, if applicable for the selection made above) can be specified here: 42 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

45 STEP 5: Acceptance of the Offer By submitting this Application Form with your Application Payment you: declare that this application is completed and lodged according to the SBB Deed Poll; confirm that you have read the privacy disclosure as detailed in section 8.11 (Privacy statement) of the Information Memorandum which contains important privacy-related information, and acknowledge and agree that your personal information may be collected, held, used and disclosed in accordance with that privacy disclosure; represent and warrant that you have read the SBB Deed Poll and Conditions that comprise Schedule 4 thereto (including in this Application Form); declare that all details and statements made are complete and accurate; declare that each Applicant, if a natural person, is at least 18 years old; declare that you are not in the United States or a U.S. Person (for the purposes of US tax regulation or securities laws), nor acting for the account or benefit of any such person; represent and warrant that the law of any other place does not prohibit you from being given the Information Memorandum and any supplement or replacement thereof or making an application on this Application Form; provide authorisation to be registered as the holder of Bonds issued to you and agree to be bound by the SBB Deed Poll and the Conditions; apply for the number of Bonds set out or determined in accordance with this Application Form and agree to subscribe for and be issued such number of Bonds, a lesser number or none; acknowledge that the information contained in the Information Memorandum (or any supplement or replacement thereof) is not investment advice or a recommendation that Bonds are suitable for you, given your investment objectives, financial situation or particular needs, and that you have relied on your own independent investigation, enquiries and appraisals; acknowledge that your application to acquire Bonds is irrevocable and may not be varied or withdrawn except as allowed by law; and acknowledge that an application may be rejected without giving any reason, including where this Application Form is not properly completed. Name of Applicant 1 Signature of Applicant 1 Date Name of Applicant 2 Signature of Applicant 2 Date Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 43

46 Application form Correct Forms of Registrable Titles Applications must be made in the name(s) of natural persons, companies or other legal entities in accordance with the Corporations Act. At least one full given name and surname is required for each natural person. The name of the beneficial owner or any other registrable name may be included by way of an account designation or completed as described in the correct forms of registrable title(s) below. Type of Investor Correct Form of Registration Incorrect Form of Registration Individual Use given name(s) in full, not initials Joint Use given name(s) in full, not initials Company Use company title, not abbreviations Trusts Use trustee(s) personal name(s) Do not use the name of the trust Deceased estates Use executor(s) personal name(s) Do not use the name of the deceased Minor (a person under the age of 18) Use the name of a responsible adult with an appropriate designation Partnerships Use partners personal name(s) Do not use the name of the partnership Clubs/unincorporated bodies/ business names Use office bearer(s) personal name(s) Do not use the name of the club etc. Superannuation Funds Use the name of the trustee of the fund Do not use the name of the fund Mr John Alfred Smith Mr John Alfred Smith & Mrs Janet Marie Smith ABC Pty Ltd Ms Penny Smith <Penny Smith Family A/C> Mr Michael Smith <Estate John Smith A/C> Mr John Alfred Smith <Peter Smith A/C> Mr John Smith & Mr Michael Smith <John Smith & Son A/C> Mrs Janet Smith <ABC Tennis Association A/C> John Smith Pty Ltd <Super Fund A/C> J.A. Smith John Alfred & Janet Marie Smith ABC P/L ABC Co Penny Smith Family Trust Estate of Late John Smith Peter Smith John Smith & Son ABC Tennis Association John Smith Pty Ltd Superannuation Fund 44 Investor Memorandum Youth CONNECT Social Impact Bond Churches of Christ in Queensland

47 Directory Issuer Churches of Christ in Queensland ABN Brookfield Road KENMORE QLD 4069 Lead Manager Westpac Banking Corporation ABN AFSL No Level 20, Westpac Place 275 Kent Street SYDNEY NSW 2000 Phone: Fax: Legal Advisors to the Issuer Paxton-Hall Lawyers Level 10, 15 Adelaide Street BRISBANE QLD 4000 Phone: Intermediary and Registrar Social Outcomes Pty Ltd ABN Moonlight Avenue HIGHVALE QLD 4520 Churches of Christ in Queensland Investor Memorandum Youth CONNECT Social Impact Bond 45