AU_Retirement_Village_Investment_Notes_Disclosure_Notice

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					Retirement Village Investment Notes


Continuous Disclosure Notice - 5 March 2012
All information as at 31 December 2011 unless otherwise specified and is based on unaudited accounts.



    Understanding our Investment Notes
    The Australian Securities and Investments Commission (ASIC) has issued a set of benchmarks to help you understand and assess unlisted
    debentures, such as these Notes. The benchmarks, including how the Notes measure against them, are set out below. This information
    has been provided to assist you in better understanding the nature of this investment. You should consider each of these benchmarks
    separately before making a decision to invest in the Notes.
    The Notes are unsecured notes for the purposes of Section 283BH of the Corporations Act 2001.




Benchmark 1: Equity Ratio                                                            Estimated cash flows for the three months to 31 March 2012:
This benchmark requires issuers of debentures to have a minimum equity ratio
(defined as total equity divided by total liabilities + total equity) of 8%, where    Australian Unity Finance Limited
they are not engaged in property development activities.
                                                                                      Estimated Inflows                                       $1.371m
We meet this benchmark as we have an equity ratio of 10.5%,
which exceeds the minimum requirement of 8%.                                          Estimated Out Flows                                     $1.300m
As at 31 December 2010 the rate was 9.9%.                                             Estimated Net Cash Flow                                 $0.071m
Benchmark 2: Liquidity                                                               There are a total of $7,426,500 worth of Notes expiring in the three
This benchmark requires issuers to ‘have cash flow estimates for the next three      months to 31 March 2012.
months’ and to ‘ensure that at all times they have cash or cash equivalents
sufficient to meet projected cash needs over the next three months’.                 Benchmark 3: Rollovers
                                                                                     This benchmark requires issuers to clearly disclose their approach to rollovers.
We meet this benchmark as we prepare estimates of cash flows three
months ahead and ensure that at all times we hold cash or cash                       We meet this benchmark as we have outlined our approach
equivalents sufficient to meet projected cash needs over the next                    to rollovers in the Notes’ prospectus. Rollovers do not happen
three months.                                                                        automatically. We may decide to extend the maturity date of the
                                                                                     Notes by notifying noteholders in writing at least four months prior
We do not have a policy of matching loan terms with investment                       to the maturity date, letting investors know the proposed interest
maturities as the underlying assets are long term business and are not               rate and the maturity date for the extended term. At this time we will
realised at the end of loan terms.                                                   refer noteholders to the current continuous disclosure notice and
In estimating cash flows, we take into account a reasonable estimate                 prospectus (if there is an open prospectus available to noteholders).
of rollovers based on previous experience. Material assumptions
underlying cash flow projections include analysis of past maturities
and consideration of budget projections, however we exclude new
fundraising and new lending business.

Historically greater than 75% of Notes have been rolled over at
maturity. Any changes to the interest rate offered on the Notes do not
significantly impact net cash flow as the interest inflows are always
0.25% higher than interest outflows.

To ensure that at all times cash on hand or cash equivalents remains
sufficient to meet projected cash needs over the next three months,
Australian Unity Retirement Living Investments held approximately
$7.3 million of cash at 31 January 2012. This cash is available to
cover cash flows from Australian Unity Retirement Village Trust
#1 and Australian Unity Retirement Village Trust #2 should short
term shortfalls in distributions from those trusts occur. This cash is
calculated to cover the current interest obligation by at least 1.3 times.
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Australian Unity Retirement Village Investment Notes - Continuous Disclosure Notice - 5 March 2012




Benchmarks 4 & 5: Debt Maturity and Loan portfolio                                How many loans are in the portfolio and what is the value of them?
These benchmarks require issuers to disclose the maturity profile of interest     There are three loans:
bearing securities including value and interest rates or average interest rates
                                                                                  ■   $24,000,000;
applicable to their debts. And for issuers who on-lend funds to disclose the
current nature of their loan portfolio.                                           ■   $7,800,000; and
                                                                                  ■   $30,000,000.
We meet these benchmarks. We understand the importance of a
transparent loan portfolio. The nature of the loan portfolio as at                What proportion of the total loan monies are lent on a ‘secured’
31 December 2011 was:                                                             basis and what is the nature of the security?
                                                                                  All of the loan monies are lent on a secured basis.
 Interest                 Years to          Interest rate            Value
 bearing Debt             maturity              %p.a.                 $m          Series 1 and Series 2 Notes are secured by registered mortgages held
 Series 1                   0.91                 9.00                8.990        by the Trustee for the benefit of Note holders, over:
                            1.91                 8.25                1.286        ■   the loans made by Australian Unity Finance to Australian Unity
                            2.91                 8.25                8.598            Retirement Living Investments;
                            3.91                 8.75                3.808        ■   the mortgages, granted as security for the loans, over allotments
                            4.94                 8.50                1.318            of units held by Australian Unity Retirement Living Investments in
 Series 2                   0.25                 8.50                2.912            Australian Unity Retirement Village Trust #1; and
                            3.00                 8.25                4.113        ■   the right to receive money payable in connection with the loans
                            5.00                 8.50                0.775            and the mortgages.
 Series 3                   0.25                 8.00                4.515        Series 3 Notes are secured by a registered mortgage, held by the
                            0.50                 8.00                7.045        Trustee for the benefit of Note holders, over:
                            1.00                 8.00                7.081
                                                                                  ■   the loan made by Australian Unity Finance to Australian Unity
                            2.25                 8.25                0.120
                                                                                      Retirement Living Investments;
                            2.50                 8.25                0.498
                                                                                  ■   the mortgage, granted as security for the loan, over an allotment
                            2.50                 8.50                5.823
                                                                                      of units held by Australian Unity Retirement Living Investments in
                            3.00                 8.25                0.130            Australian Unity Retirement Village Trust #2; and
                            4.25                 8.50                0.145        ■   the right to receive money payable in connection with the loan and
                            4.50                 8.50                0.890            the mortgage.
                            4.50                 8.75                3.521
                            5.00                 8.50                0.233        How are the loans classified by activity and geographic region?
                                                                                  The loan for $24,000,000 has been used by Australian Unity Retirement
What is the maturity profile of the interest bearing assets by term               Living Investments to invest in units in a trust - the Australian Unity
and value?                                                                        Retirement Village Trust #1, which owns and operates retirement villages
                                                                                  and aged care facilities in Victoria and New South Wales.
The maturity profile of the interest bearing assets is as follows:
                                                                                  The second loan for $7,800,000 has been lent by Australian Unity
 Interest                 Years to          Interest rate            Value        Retirement Living Investments to Australian Unity Retirement Living
 bearing Assets           maturity              %p.a.                 $m
                                                                                  Services to use to expand its retirement living business in Victoria and
 Series 1                   0.91                 9.25                8.990        New South Wales.
                            1.91                 8.50                1.286
                                                                                  The third loan for $30,000,000 has been used by Australian Unity
                            2.91                 8.50                8.598
                                                                                  Retirement Living Investments to invest in units in a trust - the
                            3.91                 9.00                3.808        Australian Unity Retirement Village Trust #2, which owns and operates
                            4.94                 8.75                1.318        retirement villages in New South Wales.
 Series 2                   0.25                 8.75                2.912
                            3.00                 8.50                4.113
                            5.00                 8.75                0.775
 Series 3                   0.25                 8.25                4.515
                            0.50                 8.25                7.045
                            1.00                 8.25                7.081
                            2.25                 8.50                0.120
                            2.50                 8.50                0.498
                            2.50                 8.75                5.823
                            3.00                 8.50                0.130
                            4.25                 8.75                0.145
                            4.50                 8.75                0.890
                            4.50                 9.00                3.521
                            5.00                 8.75                0.233
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Australian Unity Retirement Village Investment Notes - Continuous Disclosure Notice - 5 March 2012




                                                                          All other transactions we enter into in relation to the Notes, including
 Australian Unity Retirement Village Trust #1                             those with related parties, are on arm’s length commercial terms.
                                                                          Entities within the Australian Unity group may provide registry,
                           No of Retirement               Value           accounting, underwriting and tax services to the Notes for fees
 State
                               Villages                    $m             charged at commercial rates.
 NSW                                2                     44.56
                                                                          Policies and guidelines are in place to manage the risk of any actual or
 VIC                                1                     15.81
                                                                          perceived conflict of interest as a result of a related party transaction.
                                                                          Related party transactions with Australian Unity group entities are
                                                                          reviewed and approved by Senior Management with clearly identified
 Australian Unity Retirement Village Trust #2
                                                                          governance policies and guidelines.
                           No of Retirement               Value
 State                                                                    Benchmark 7: Valuations
                               Villages                    $m
 NSW                                3                     59.06           This benchmark for property valuations, where an issuer is involved in or
                                                                          lends money for property-related activities, requires the issuer to establish
                                                                          a panel of valuers, and to ensure that no one valuer conducts more than a
What proportions of the loans are in default or arrears?
                                                                          third of the issuer’s valuation work.
The loans funded by Series 1 Notes, Series 2 Notes and Series 3 Notes
are not in default or arrears, and have not been at any time since the    Australian Unity Property values the units held by Australian Unity
loans were established.                                                   Retirement Living Investments in the Australian Unity Retirement
                                                                          Village Trust #1 and the Australian Unity Retirement Village Trust
What proportion of the total loan monies have been lent to our            #2 (the Trusts) quarterly on a ‘going concern’ basis. The underlying
largest borrower? And 10 largest borrowers?                               assets in each of the Trusts are also valued at that time by the trustee,
All of the loan monies funded by Series 1 Notes have been lent to         Australian Unity Property.
Australian Unity Retirement Living Investments.
                                                                          The nature of the assets in each of the Trusts is the business of owning
All of the loan monies funded by Series 2 Notes have been lent to         and operating retirement villages and aged care facilities, rather than
Australian Unity Retirement Living Investments, which on lent all of      the direct property itself.
the loan monies to Australian Unity Retirement Living Services.
                                                                          We do not meet this benchmark as the Issuer does not use property
All of the loan monies funded by Series 3 Notes have been lent to         valuers for these valuations, and therefore has not established a panel
Australian Unity Retirement Living Investments.                           of valuers for property valuations.

What proportions of the loans are in subject to legal proceedings?        Series 1 Notes and Series 2 Notes are secured by registered
There are no loans subject to legal proceedings.                          mortgages, held by the Trustee for the benefit of Note holders, over:
                                                                          ■   the loans made by Australian Unity Finance to Australian Unity
Benchmark 6: Related party transactions                                       Retirement Living Investments;
This benchmark requires issuers who on-lend funds to disclose their       ■   the mortgages, granted as security for the loans, over allotments
approach to related party transactions and any policy the Issuer has          of units held by Australian Unity Retirement Living Investments in
regarding related party lending.                                              Australian Unity Retirement Village Trust #1; and
We meet this benchmark. Our approach and policy regarding related         ■   the right to receive money payable in connection with the loans
party transactions is disclosed in the prospectus.                            and the mortgages.

All loans have been lent to related parties. The prospectuses state       Series 3 Notes are secured by a registered mortgage, held by the
that the proceeds raised by Australian Unity Finance from issuing         Trustee for the benefit of Note holders, over:
the Series 1 Notes have been lent to a related party - Australian Unity   ■   the loan made by Australian Unity Finance to Australian Unity
Retirement Living Investments and the proceeds raised by Series 2
                                                                              Retirement Living Investments;
Notes have been lent by the Issuer to Australian Unity Retirement
Living Investments and then on lent to Australian Unity Retirement        ■   the mortgage, granted as security for the loan, over an allotment
Living Services.                                                              of units held by Australian Unity Retirement Living Investments in
                                                                              Australian Unity Retirement Village Trust #2; and
The proceeds raised by Australian Unity Finance from issuing the          ■   the right to receive money payable in connection with the loan and
Series 3 Notes have been lent to a related party - Australian Unity
                                                                              the mortgage.
Retirement Living Investments.
                                                                          The underlying assets of the Australian Unity Retirement Village Trust
Investors should refer to Benchmarks 4 & 5 for further details on
                                                                          #1 and the Australian Unity Retirement Village Trust #2 – the physical
specific loans. The terms of the loans funded by the Notes are detailed
                                                                          retirement village properties - are not security for any of the Notes Series.
in a loan agreement, and the loans have been entered into on
commercial terms.
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Australian Unity Retirement Village Investment Notes - Continuous Disclosure Notice - 5 March 2012




Benchmark 8: Lending principles - loan-to-valuation ratios                                              Contact us
This benchmark requires loan-to-valuation ratios to not exceed 80%,
                                                                                                        Address                        114 Albert Road, South Melbourne, VIC 3205
where an issuer on-lends money in relation to property-related activities
and the loan does not relate to property development.                                                   Investor Services              13 29 39
                                                                                                        Adviser Services               1800 649 033
We meet this benchmark as the ratios of the loans to the market value
                                                                                                        Website                        australianunityinvestments.com.au
of Australian Unity Retirement Living Investments’ units in each of the
Trusts is less than the required 80% as shown below:                                                    Email                          investments@australianunity.com.au


 Trust                                                   Loan-to-value Ratio

 Australian Unity Retirement
                                                                  64.25%
 Village Trust #1
 Australian Unity Retirement
                                                                  58.09%
 Village Trust #2




Important information
This notice has been issued by Australian Unity Finance Limited (ABN 35 114 646 070) (‘Australian Unity Finance’, ‘issuer’, ‘we’, ‘us’, ‘our’). Retirement Village Investment Notes – Series 1 (‘Series 1
Notes’), Retirement Village Investment Notes – Series 2 (‘Series 2 Notes’) and Retirement Village Investment Notes – Series 3 (‘Series 3 Notes’) are issued by Australian Unity Finance. A reference
to ‘Australian Unity Retirement Living Investments’ in this document is a reference to Australian Unity Retirement Living Investments Limited (ABN 27 114 646 098).
A reference to ‘Australian Unity Retirement Living Services’ in this document is a reference to Australian Unity Retirement Living Services Limited (ABN 17 085 317 595). Australian Unity
Property Limited (ABN 58 079 538 499, AFS Licence No. 234455) (‘Australian Unity Property’) is the Trustee of the Australian Unity Retirement Village Trust #1 and Australian Unity Retirement
Village Trust #2. All amounts in this document are in Australian dollars ($AUD). This information is intended only to provide a general update on the investment particulars of Series 1, Series
2 and Series 3 Retirement Village Investment Notes. The information in this document is not based on the financial objectives, situation or needs of a particular investor. You should refer to
Retirement Village Investment Notes Prospectus #1 Part A dated 14 October 2005, the replacement Prospectus Part B dated 28 October 2005, Retirement Village Investment Notes Prospectus
#1 Part B - Detailed Terms - Series 1 dated 30 November 2005, Retirement Village Investment Notes – Series 1 - Prospectus #2 dated 26 September 2008, Retirement Village Investment Notes
– Series 2 - Prospectus #2 dated 2 January 2009 and supplementary Prospectus dated 30 January 2009, Retirement Village Investment Notes – Series 3 - Prospectus #1 dated 30 January 2009,
Retirement Village Investment Notes – Series 3 - Prospectus #2 dated 1 April 2009, Retirement Village Investment Notes – Series 3 - Prospectus #3 dated 23 June 2009, and Retirement Village
Investment Notes – Series 1 - Prospectus #3 dated 25 October 2010, Retirement Village Investment Notes – Series 3 - Prospectus #5 dated 21 April 2011, and Retirement Village Investment
Notes - Series 1 Prospectus 4 dated 18 October 2011, if you wish to know more about this product. A copy of a particular prospectus is available from Australian Unity by contacting us on 13 29
39 or investments@australianunity.com.au. The information provided here was current at the time of publication.

                                                                                                                                                                                     RVIN CDN 2012.02

				
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