N.B.: If you are a citizen or resident of the US, please submit any tax forms. See enclosed FATCA individual form

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3 Dear Sir/Madam, We are writing to inform you of the impact of the international tax information agreement entered into by the Government of the Bahamas that affects some clients of the Colonial Group. The following information is important to you and to Colonial and therefore we are seeking your cooperation in obtaining the requested information which will enable us to comply with the international obligations imposed on us with respect to disclosure of information on US persons and/or persons with US connections for tax purposes. In 2010 the United States Government passed the Foreign Account Tax Compliance Act (FATCA). Under this legislative regime, foreign financial institutions such as Colonial Pension Services (Bahamas) Limited is required to report to the Internal Revenue Service (IRS), the revenue service of the United States Federal Government, certain information about financial accounts held by US taxpayers, or by foreign entities in which US taxpayers hold a substantial ownership interest. The Bahamas Government has entered into a Model 1 Inter-Governmental Agreement ( IGA ) with the United States to facilitate FATCA implementation. In addition, the Common Reporting Standard (CRS) was approved in 2014 to support the implementation of FATCA. CRS calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. Colonial Pension Services (Bahamas) Limited need to determine whether any of its clients are considered to be US taxpayers for the purposes of FATCA and CRS, so that it may report correctly. A US taxpayer for the purposes of the Act are as follows: A citizen of the US including an individual born in the US but resident in another country (who has not given up their citizenship); A person residing in the US, including US Green Card holders; Persons who spend a significant number of days in the US each year; US Corporations, US partnerships, US estates and US trusts.

4 Colonial Pension Services (Bahamas) Limited is required to identify any of its relationships that may be potentially subject to these reporting requirements. Accordingly, we need to ascertain your position to satisfy the requirements under FATCA, CRS and the IGA. Failure to obtain the required information from you in order to make the appropriate report to the IRS may result in sanctions and penalties being applied. Enclosed you will find a FATCA individual form that requires you to certify whether you are subject to the US taxation regime. If you are uncertain about your status we strongly recommend that you seek independent advice from a professional tax advisor, as Colonial Pension Services (Bahamas) Limited is not in a position to offer tax and/or legal advice. Should you wish to obtain source information, the IRS website contains information for US taxpayers. N.B.: If you are a citizen or resident of the US, please submit any tax forms. See enclosed FATCA individual form

5 Press Release 21 December 2016 Central Bank: No Pressure on the Bahamian Dollar from Credit Downgrade The Central Bank wishes to advise the public that the recent downgrade of The Bahamas sovereign debt to BB+/B from BBB-/A-3, will not exert pressure on the sustainability of The Bahamas fixed exchange rate regime. The adjustment in the country s credit rating by Standard and Poor s, reflects the agency s assessment of economic prospects, including the expected pace of growth estimates relative to the Government s fiscal consolidation imperatives and developments within the banking sector. It will however, cause increases in the interest costs on some existing external debt and present some higher costs for new debt. The Bahamian dollar, remains supported by the Central Bank s external reserves, for which the outlook is for stable to incrementally firming balances. In this regard, net foreign exchange earnings prospects for The Bahamas have been enhanced by the expected increase in hotel sector capacity during 2017 and In the near-term, external balances will also be supported by re-insurance inflows for private sector rebuilding in the aftermath of Hurricane Matthew. External reserves currently stand at an estimated $928.6 million or approximately 17.4 weeks of merchandise imports compared to the 12 weeks international benchmark. Modest declines in external balances are still expected from these levels over the remainder of the year; however, the start of the winter tourist season should precipitate the traditional build-up in reserve levels. The Central Bank, meanwhile, expects a steady, gradual improvement in banking sector indicators as the economy recovers. Important reforms, including the anticipated establishment of a credit bureau will also provide a sounder framework for prudent lending practices over the medium-term. The Central Bank is also active, alongside key stakeholders throughout the Caribbean, on strategies to reduce threats from the loss of correspondent banking relationships. While it is accurate that at least 16 percent of licensees have had negative experiences, all of those entities affected have either successfully established new relationships or have been able to rely on the remaining networks which they secured. 21 December 2016

6 PRESS RELEASE 22 December 2016 Central Bank: Reduction in the Discount Rate by 50 basis points to 4.00% The Central Bank wishes to advise the public of its decision to reduce the Discount Rate, by 50 basis points to 4.00 percent, effective immediately. The Bank expects financial institutions to follow suit with a corresponding reduction in the Prime Rate, from 4.75 percent to 4.25 percent and adjustments in lending rates on new credit facilities. Interest rate reductions for existing facilities should be accorded in line with contractual provisions that govern the timing of such changes. This policy action is intended to position the domestic business sector to take more advantage of growth opportunities in the near to medium term, and to provide more support to housing sector investments. In taking this action, the Bank considered several factors, including the prospects for a pick-up in growth in the coming year resulting mainly from the expansion in the tourism plant and the potential for increased foreign currency inflows to buttress the external reserves, which stand currently at $928.6 million or an estimated 17.4 weeks of total merchandise imports well above the 12.0 weeks benchmark. The economy also faces reduced pressures on the balances given the significant reduction in the oil import bill, which is expected to be sustained in large part over the medium-term. Other prudential constraints remain in place to ensure sustainable credit trends. This includes the maximum debt servicing ratio limit of 40%-45% percent (on the aggregate of personal loans, mortgages, rent and property maintenance) and the minimum down payment requirement of 15% percent for such loans. The recent, temporary easing in these requirements still only applies for hurricane recovery facilities. Lending policies should also continue to be conservative, as commercial banks manage the expected gradual reduction in the overhang of non-performing loans. The Central Bank will continue to closely monitor economic and monetary developments and will, where prudent, make further adjustments in its monetary stance in order to ensure the stability of the financial sector and contribute to sustainable economic growth. The Bank will also continue to explore other interventions to increase the private sector s access to financing of a growth enhancing nature, having regard to activities that strengthen net foreign exchange earnings potential. 22 December 2016