LQNHG WR WKH 6 3 ) XWXUHV( [ FHVV5 HWXUQ ,QGH[
/ LQNHG WR WKH 6 3 ) XWXUHV( [ FHVV5 HWXUQ ,QGH[
7 KH ( QKDQFHG 5 HWXUQ 1 RWHV/ LQNHG WR WKH 6 3 ) XWXUHV( [ FHVV5 HWXUQ ,QGH[ GXH ) HEUXDU\ WKH ‡1 RWHV· SULFHG RQ ) HEUXDU\ DQG Z LOOLVVXH RQ ) HEUXDU\
$ SSUR[ LP DWH \ HDUWHUP
3 D\ P HQWRQ WKH 1 RWHVZ LOOGHSHQG RQ WKH SHUIRUP DQFH RI WKH 6 3 ) XWXUHV( [ FHVV5 HWXUQ ,QGH[ WKH ‡8 QGHUO\ LQJ ·
,I WKH ( QGLQJ 9 DOXH RI WKH 8 QGHUO\ LQJ LVJ UHDWHUWKDQ RI LWV6 WDUWLQJ 9 DOXH DWP DWXULW\ \ RX Z LOOUHFHLYH XSVLGH H[ SRVXUH WR LQFUHDVHVLQ WKH YDOXH RI WKH 8 QGHUO\ LQJ
,I WKH 8 QGHUO\ LQJ GHFOLQHV E\ P RUH WKDQ IURP LWV 6 WDUWLQJ 9 DOXH DWP DWXULW\ \ RXULQYHVWP HQWZ LOOEH VXEMHFWWR GRZ QVLGH H[ SRVXUH WR GHFUHDVHV LQ WKH YDOXH RI WKH 8 QGHUO\ LQJ Z LWK XS W RI WKH SULQFLSDODWULVN RWKHUZ LVH DWP DWXULW\ \ RX Z LOOUHFHLYH WKH SULQFLSDODP RXQW
$ Q\ SD\ P HQWRQ WKH 1 RWHVLVVXEMHFWWR WKH FUHGLWULVNRI %RI$ ) LQDQFH / / & ‡%RI$ ) LQDQFH· RUWKH ‡,VVXHU· DVLVVXHURI WKH 1 RWHV DQG %DQNRI $ P HULFD &RUSRUDWLRQ ‡%$ &· RUWKH ‡* XDUDQWRU· DVJ XDUDQWRURI WKH 1 RWHV
1 R SHULRGLF LQWHUHVWSD\ P HQWV
7 KH 1 RWHVZ LOOQRWEH OLVWHG RQ DQ\ VHFXULWLHVH[ FKDQJ H &8 6 ,3 1 R * 9 +
7 KH LQLWLDOHVWLP DWHG YDOXH RI WKH 1 RWHV DV RI WKH SULFLQJ GDWH LV SHU LQ SULQFLSDODP RXQWRI 1 RWHV Z KLFK LV OHVV WKDQ WKH SXEOLF RIIHULQJ SULFH OLVWHG EHORZ 7 KH DFWXD YDOXH RI \ RXU1 RWHV DWDQ\ WLP H Z LOOUHIOHFWP DQ\ IDFWRUV DQG FDQQRWEH SUHGLFWHG Z LWK DFFXUDF\ 6 HH ‡5 LVN ) DFWRUV· EHJ LQQLQJ RQ SDJ H 3 6 RI WKLV SULFLQJ VXSSOHP HQWDQG ‡6 WUXFWXULQJ WKH 1 RWHV· R SDJ H 3 6 RI WKLVSULFLQJ VXSSOHP HQWIRUDGGLWLRQDOLQIRUP DWLRQ
7 KHUH DUH LP SRUWDQWGLIIHUHQFHV EHWZ HHQ WKH 1 RWHV DQG D FRQYHQWLRQDOGHEWVHFXULW\ 3 RWHQWLDOSXUFKDVHUV RI WKH 1 RWHV VKRXOG FRQVLGHUWKH LQIRUP DWLRQ LQ ‡5 LVN ) DFWRUV· EHJ LQQLQJ R SDJ H 3 6 RI WKLV SULFLQJ VXSSOHP HQW SDJ H 3 6 RI WKH DFFRP SDQ\ LQJ SURGXFWVXSSOHP HQWSDJ H 6 RI WKH DFFRP SDQ\ LQJ SURVSHFWXV VXSSOHP HQWDQG SDJ H RI WKH DFFRP SDQ\ LQJ SURVSHFWXV
1 RQH RI WKH 6 HFXULWLHV DQG ( [ FKDQJ H &RP P LVVLRQ WKH ‡6 ( &· DQ\ VWDWH VHFXULWLHV FRP P LVVLRQ RUDQ\ RWKHUUHJ XODWRU\ ERG\ KDV DSSURYHG RUGLVDSSURYHG RI WKHVH VHFXULWLHV RUGHWHUP LQHG LI WKL SULFLQJ VXSSOHP HQWDQG WKH DFFRP SDQ\ LQJ SURGXFWVXSSOHP HQWSURVSHFWXVVXSSOHP HQWDQG SURVSHFWXVLVWUXWKIXORUFRP SOHWH $ Q\ UHSUHVHQWDWLRQ WR WKH FRQWUDU\ LVD ▇▇▇▇ LQDORIIHQVH
3 XEOLF RIIHULQJ SULFH | 8 QGHUZ ULWLQJ GLVFRXQW | 3 URFHHGV EHIRUH H[ SHQVHV WR %RI$ ) LQDQFH | |
3 HU1 RWH | |||
7RWDO |
&HUWDLQ GHDOHUV Z KR SXUFKDVH WKH 1 RWHV IRUVDOH WR FHUWDLQ IHH EDVHG DGYLVRU\ DFFRXQWV P D\ IRUJ R VRP H RUDOORI WKHLUVHOOLQJ FRQFHVVLRQV IHHV RUFRP P LVVLRQV 7 KH SXEOLF RIIHULQJ SULFH IR LQYHVWRUVSXUFKDVLQJ WKH 1 RWHVLQ WKHVH IHH EDVHG DGYLVRU\ DFFRXQWVP D\ EH DVORZ DV SHU LQ SULQFLSDODP RXQWRI 1 RWHV
7 KH XQGHUZ ULWLQJ GLVFRXQWSHU LQ SULQFLSDODP RXQWRI 1 RWHV P D\ EH DV KLJ K DV UHVXOWLQJ LQ SURFHHGV EHIRUH H[ SHQVHV WR %RI$ ) LQDQFH RI DV ORZ DV SHU L SULQFLSDODP RXQWRI 1 RWHV 7 KH WRWDOXQGHUZ ULWLQJ GLVFRXQWDQG SURFHHGV EHIRUH H[ SHQVHV WR %RI$ ) LQDQFH VSHFLILHG DERYH UHIOHFWWKH DJ J UHJ DWH RI WKH XQGHUZ ULWLQJ GLVFRXQWV SHU L SULQFLSDODP RXQWRI 1 RWHV
7 KH 1 RWHV DQG WKH UHODWHG J XDUDQWHH
$ UH 1 RW) ’ ,& ,QVXUHG | $ UH 1 RW%DQN* XDUDQWHHG | 0 D\ / RVH 9 DOXH |
6 HOOLQJ $ J HQW
( Q K D Q F H G 5 H W X U )Q X W1 XR UW HH VV
,VVXHU
* XDUDQWRU
’ HQRP LQDWLRQV 7HUP
8 QGHUO\ LQJ
3 ULFLQJ ’ DWH
,VVXH ’ DWH
9 DOXDWLRQ ’ DWH
0 DWXULW\ ’ DWH
6 WDUWLQJ 9 DOXH ( QGLQJ 9 DOXH
8 SVLGH 3 DUWLFLSDWLRQ
5 DWH
7 KUHVKROG 9 DOXH
5 HGHP SWLRQ $ P RXQW
&DOFXODWLRQ $ J HQW 6 HOOLQJ $ J HQW
&8 6 ,3
8 QGHUO\ LQJ 5 HWXUQ
( YHQWV RI ’ HIDXOWDQG
$ FFHOHUDWLRQ
7HUP VRI WKH 1 RWHV
( / [ LF QH NV HV G
5 WH
▇▇ ▇
▇▇ QK H
, Q6
G H3 [
%RI$ ) LQDQFH |
%$ & |
7 KH 1 RWHVZ LOOEH LVVXHG LQ P LQLP XP GHQRP LQDWLRQVRI DQG Z ▇▇▇▇ P XOWLSOHVRI LQ H[ FHVVWKHUHRI |
$ SSUR[ LP DWHO\ \ HDUV |
7 KH 6 3 ) XWXUHV( [ FHVV5 HWXUQ ,QGH[ %ORRP EHUJ V\ P ERO‡6 3 ; ) 3 · D SULFH UHWXUQ LQGH[ |
) HEUXDU\ |
) HEUXDU\ |
) HEUXDU\ VXEMHFWWR SRVWSRQHP HQWDVGHVFULEHG XQGHU‡’ HVFULSWLRQ RI WKH 1 RWHV† &HUWDLQ 7HUP VRI WKH 1 RWHV† ( YHQWV5 HODWLQJ WR &DOFXODWLRQ ’ D\ V· LQ WKH DFFRP SDQ\ LQJ SURGXFWVXSSOHP HQW |
) HEUXDU\ |
7 KH FORVLQJ OHYHORI WKH 8 QGHUO\ LQJ RQ WKH 9 DOXDWLRQ ’ DWH |
Z KLFK LV RI WKH 6 WDUWLQJ 9 DOXH URXQGHG WR WZ R GHFLP DOSODFHV |
7 KH 5 HGHP SWLRQ$ P RXQWSHU LQ SULQFLSDODP RXQWRI 1 RWHVZ LOOEH |
D ,I WKH ( QGLQJ 9 DOXH RI WKH 8 QGHUO\ LQJ LVJ UHDWHUWKDQ WKH 6 WDUWLQJ 9 DOXH |
E ,I WKH ( QGLQJ 9 DOXH RI WKH 8 QGHUO\ LQJ LVHTXDOWR RUOHVVWKDQ WKH 6 WDUWLQJ 9 DOXH EXWJ UHDWHUWKDQ RUHTXDOWR WKH 7 KUHVKROG 9 DOXH |
F ,I WKH ( QGLQJ 9 DOXH RI WKH 8 QGHUO\ LQJ LVOHVVWKDQ WKH 7 KUHVKROG 9 DOXH |
,Q WKLVFDVH WKH 5 HGHP SWLRQ$ P RXQWZ LOOEH OHVVWKDQ RI WKH SULQFLSDODP RXQWDQG \ RX FRXOG ORVH XS WR RI \ RXULQYHVWP HQWLQ WKH 1 RWHV |
%RI$ 6 HFXULWLHV ,QF ‡%RI$ 6 · DQ DIILOLDWH RI %RI$ ) LQDQFH |
%RI$ 6 |
* 9 + |
,I DQ ( YHQWRI ’ HIDXOWDVGHILQHG LQ WKH VHQLRULQGHQWXUH UHODWLQJ WR WKH 1 RWHVDQG LQ WKH VHFWLRQ HQWLWOHG ‡’ HVFULSWLRQ RI ’ HEW6 HFXULWLHVRI %RI$ ) LQDQFH / / &† ( YHQWVRI ’ HIDXOWDQG 5 LJ KWVRI $ FFHOHUDWLRQ &RYHQDQW%UHDFKHV· RQ SDJ H RI WKH DFFRP SDQ\ LQJ SURVSHFWXV Z LWK UHVSHFWWR WKH 1 RWHVRFFXUVDQG LVFRQWLQXLQJ WKH DP RXQW SD\ DEOH WR D KROGHURI WKH |
( 1 + $ 1 &( ’ 5 ( 7 8 5 1 1 2 7 ( 6 _ 36
( Q K D Q F H G 5 H W X U )Q X W1 XR UW HH VV
( / [ LF QH NV HV G
5 WH
▇▇ ▇
▇▇ QK H
, Q6
G H3 [
1 RWHVXSRQ DQ\ DFFHOHUDWLRQ SHUP LWWHG XQGHUWKH VHQLRULQGHQWXUH Z LOOEH HTXDOWR WKH DP RXQWGHVFULEHG XQGHUWKH FDSWLRQ ‡5 HGHP SWLRQ$ P RXQW· DERYH FDOFXODWHG DV WKRXJ K WKH GDWH RI DFFHOHUDWLRQ Z HUH WKH 0 DWXULW\ ’ DWH RI WKH 1 RWHVDQG DVWKRXJ K WKH 9 DOXDWLRQ ’ DWH Z HUH WKH WKLUG 7 UDGLQJ ’ D\ SULRUWR WKH GDWH RI DFFHOHUDWLRQ ,Q FDVH RI D GHIDXOWLQ WKH SD\ P HQWRI WKH 1 RWHV Z KHWKHUDWWKHLUP DWXULW\ RUXSRQ DFFHOHUDWLRQ WKH 1 RWHVZ LOOQRWEHDUD GHIDXOWLQWHUHVWUDWH
3 D\ P HQWRQ WKH 1 RWHVGHSHQGVRQ WKH FUHGLWULVNRI %RI$ ) LQDQFH DV,VVXHU DQG %$ & DV* XDUDQWRU DQG RQ WKH SHUIRUP DQFH RI WKH 8 QGHUO\ LQJ 7 KH HFRQRP LF WHUP VRI WKH 1 RWHVDUH EDVHG RQ %$ &¶V LQWHUQDOIXQGLQJ UDWH Z KLFK LVWKH UDWH LWZ RXOG SD\ WR ERUURZ IXQGVWKURXJ K WKH LVVXDQFH RI P DUNHWOLQNHG QRWHV DQG WKH HFRQRP LF WHUP VRI FHUWDLQ UHODWHG KHGJ LQJ DUUDQJ HP HQWV%$ &¶VDIILOLDWHVHQWHU LQWR %$ &¶VLQWHUQDOIXQGLQJ UDWH LVW\ SLFDOO\ ORZ HUWKDQ WKH UDWH LWZ RXOG SD\ Z KHQ LWLVVXHVFRQYHQWLRQDOIL[ HG RUIORDWLQJ UDWH GHEWVHFXULWLHV 7 KLVGLIIHUHQFH LQ IXQGLQJ UDWH DVZ HOODVWKH XQGHUZ ULWLQJ GLVFRXQWLI DQ\ DQG WKH KHGJ LQJ UHODWHG FKDUJ HVGHVFULEHG EHORZ VHH ‡5 LVN) DFWRUV· EHJ LQQLQJ RQ SDJ H 3 6 UHGXFHG WKH HFRQRP LF WHUP VRI WKH 1 RWHVWR \ RX DQG WKH LQLWLDOHVWLP DWHG YDOXH RI WKH
1 RWHV ’ XH WR WKHVH IDFWRUV WKH SXEOLF RIIHULQJ SULFH \ RX DUH SD\ LQJ WR SXUFKDVH WKH 1 RWHVLVJ UHDWHUWKDQ WKH LQLWLDOHVWLP DWHG YDOXH RI WKH 1 RWHVDVRI WKH SULFLQJ GDWH
7 KH LQLWLDOHVWLP DWHG YDOXH RI WKH 1 RWHVDVRI WKH SULFLQJ GDWH LVVHWIRUWK RQ WKH FRYHUSDJ H RI WKLVSULFLQJ VXSSOHP HQW) ▇▇▇ ▇▇▇ LQIRUP DWLRQ DERXWWKH LQLWLDOHVWLP DWHG YDOXH DQG WKH VWUXFWXULQJ RI WKH
1 RWHV VHH ‡5 LVN) DFWRUV· EHJ LQQLQJ RQ 3 6 DQG ‡6 WUXFWXULQJ WKH 1 RWHV· RQ 3 6
( 1 + $ 1 &( ’ 5 ( 7 8 5 1 1 2 7 ( 6 _ 36
( Q K D Q F H G 5 H W X U )Q X W1 XR UW HH VV
5 HGHP SWLRQ$ P RXQW’ HWHUP LQDWLRQ
( / [ LF QH NV HV G
5 WH
▇▇ ▇
▇▇ QK H
, Q6
G H3 [
2 Q WKH 0 DWXULW\ ’ DWH \ RX Z LOOUHFHLYH D FDVK SD\ P HQWSHU LQ SULQFLSDODP RXQWRI 1 RWHV GHWHUP LQHG DV IROORZ V
$ OOSD\ P HQWVGHVFULEHG DERYH DUH VXEMHFWWR WKH FUHGLWULVNRI %RI$ ) LQDQFH DV,VVXHU DQG %$ & DV* XDUDQWRU
( 1 + $ 1 &( ’ 5 ( 7 8 5 1 1 2 7 ( 6 _ 36
( Q K D Q F H G 5 H W X U )Q X W1 XR UW HH VV
( / [ LF QH NV HV G
5 WH
▇▇ ▇
▇▇ QK H
, Q6
G H3 [
+ \ SRWKHWLFDO3 D\ RXW3 URILOH DQG ( [ DP SOHVRI 3 D\ P HQWVDW0 DWXULW\
( QKDQFHG 5 HWXUQ 1 RWHV 7DEOH
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▇▇▇▇ WKH 1 RWHV WR P DWXULW\ 7 KH IROORZ LQJ H[ DP SOHVGR QRWWDNH LQWR DFFRXQWDQ\ WD[ FRQVHTXHQFHVIURP LQYHVWLQJ LQ WKH 1 RWHV
) RUUHFHQWDFWXDOYDOXHVRI WKH 8 QGHUO\ LQJ VHH ‡7 KH 8 QGHUO\ LQJ · VHFWLRQ EHORZ 7 KH ( QGLQJ 9 DOXH RI WKH 8 QGHUO\ LQJ Z LOOQRWLQFOXGH DQ\ LQFRP H J HQHUDWHG E\ GLYLGHQGVRURWKHUGLVWULEXWLRQVSDLG Z LWK UHVSHFWWR VKDUHVRUXQLWVRI WKH 8 QGHUO\ LQJ RURQ WKH VHFXULWLHVLQFOXGHG LQ WKH 8 QGHUO\ LQJ DVDSSOLFDEOH ,Q DGGLWLRQ DOOSD\ P HQWVRQ WKH 1 RWHVDUH VXEMHFWWR ,VVXHUDQG * XDUDQWRUFUHGLWULVN
5 HWXUQ RQ WKH 1 RWHV
5 HGHP SWLRQ $ P RXQWSHU1 RWH
8 QGHUO\ LQJ 5 HWXUQ
( QGLQJ 9 DOXH
7 KH K\ SRWKHWLFDO6 WDUWLQJ 9 DOXH RI XVHG LQ WKH WDEOH DERYH KDVEHHQ FKRVHQ IRULOOXVWUDWLYH SXUSRVHVRQO\ 7 KH DFWXDO6 WDUWLQJ 9 DOXH RI WKH 8 QGHUO\ LQJ LVVHWIRUWK RQ SDJ H 3 6 DERYH
7 KLVLVWKH K\ SRWKHWLFDO7 KUHVKROG 9 DOXH
( 1 + $ 1 &( ’ 5 ( 7 8 5 1 1 2 7 ( 6 _ 36
( Q K D Q F H G 5 H W X U )Q X W1 XR UW HH VV
5 LVN) DFWRUV
( / [ LF QH NV HV G
5 WH
▇▇ ▇
▇▇ QK H
, Q6
G H3 [
<RXULQYHVWP HQWLQ WKH 1 RWHVHQWDLOVVLJ QLILFDQWULVNV P DQ\ RI Z KLFK GLIIHUIURP WKRVH RI D FRQYHQWLRQDOGHEWVHFXULW\ <RXUGHFLVLRQ WR SXUFKDVH WKH 1 RWHVVKRXOG EH P DGH RQO\ DIWHUFDUHIXOO\ FRQVLGHULQJ WKH ULVNVRI DQ LQYHVWP HQWLQ WKH 1 RWHV LQFOXGLQJ WKRVH GLVFXVVHG EHORZ Z LWK \ RXUDGYLVRUVLQ OLJ KWRI \ RXUSDUWLFXODUFLUFXP VWDQFHV 7 KH 1 RWHVDUH QRWDQ DSSURSULDWH LQYHVWP HQWIRU\ RX LI
\ RX DUH QRWNQRZ OHGJ HDEOH DERXWVLJ QLILFDQWHOHP HQWVRI WKH 1 RWHVRUILQDQFLDOP DWWHUVLQ J HQHUDO<RX VKRXOG FDUHIXOO\ UHYLHZ WKH P RUH GHWDLOHG H[ SODQDWLRQ RI ULVNVUHODWLQJ WR WKH 1 RWHVLQ WKH ‡5 LVN
) DFWRUV· VHFWLRQVEHJ LQQLQJ RQ SDJ H 3 6 RI WKH DFFRP SDQ\ LQJ SURGXFWVXSSOHP HQWSDJ H 6 RI WKH DFFRP SDQ\ LQJ SURVSHFWXVVXSSOHP HQWDQG SDJ H RI WKH DFFRP SDQ\ LQJ SURVSHFWXV HDFK DV LGHQWLILHG RQ SDJ H 3 6 EHORZ
6 WUXFWXUH UHODWHG 5 LVNV
<RXULQYHVWP HQWP D\ UHVXOWLQ D ORVV WKHUH LV QR J XDUDQWHHG UHWXUQ RI SULQFLSDO 7 KHUH LVQR IL[ HG SULQFLSDOUHSD\ P HQWDP RXQWRQ WKH 1 RWHVDWP DWXULW\ ,I WKH ( QGLQJ 9 DOXH RI WKH
8 QGHUO\ LQJ LVOHVVWKDQ WKH 7 KUHVKROG 9 DOXH DWP DWXULW\ \ RXULQYHVWP HQWZ LOOEH VXEMHFWWR GRZ QVLGH H[ SRVXUH WR GHFUHDVHVLQ WKH YDOXH RI WKH 8 QGHUO\ LQJ DQG \ RX Z LOOORVH RI WKH SULQFLSDODP RXQWIRUHDFK WKDWWKH ( QGLQJ 9 DOXH RI WKH 8 QGHUO\ LQJ LVOHVVWKDQ WKH 6 WDUWLQJ 9 DOXH ,Q WKDWFDVH \ RX Z LOOORVH D VLJ QLILFDQWSRUWLRQ RUDOORI \ RXULQYHVWP HQWLQ WKH 1 RWHV
7 KH 1 RWHV GR QRWEHDULQWHUHVW8 QOLNH D FRQYHQWLRQDOGHEWVHFXULW\ QR LQWHUHVWSD\ P HQWVZ LOOEH SDLG RYHUWKH WHUP RI WKH 1 RWHV UHJ DUGOHVVRI WKH H[ WHQWWR Z KLFK WKH ( QGLQJ 9 DOXH RI WKH
8 QGHUO\ LQJ H[ FHHGVLWV6 WDUWLQJ 9 DOXH RU7 KUHVKROG 9 DOXH
<RXUUHWXUQ RQ WKH 1 RWHV P D\ EH OHVV WKDQ WKH \ LHOG RQ D FRQYHQWLRQDOGHEWVHFXULW\ RI FRP SDUDEOH P DWXULW\ $ Q\ UHWXUQ WKDW\ RX UHFHLYH RQ WKH 1 RWHVP D\ EH OHVVWKDQ WKH UHWXUQ \ RX Z RXOG HDUQ LI \ RX SXUFKDVHG D FRQYHQWLRQDOGHEWVHFXULW\ Z LWK WKH VDP H 0 DWXULW\ ’ DWH $ VD UHVXOW\ RXULQYHVWP HQWLQ WKH 1 RWHVP D\ QRWUHIOHFWWKH IXOORSSRUWXQLW\ FRVWWR \ RX Z KHQ \ RX FRQVLGHUIDFWRUV VXFK DVLQIODWLRQ WKDWDIIHFWWKH WLP H YDOXH RI P RQH\
7 KH 5 HGHP SWLRQ $ P RXQWZ LOOQRWUHIOHFWFKDQJ HV LQ WKH OHYHORI WKH 8 QGHUO\ LQJ RWKHUWKDQ RQ WKH 9 DOXDWLRQ ’ DWH 7 KH OHYHORI WKH 8 QGHUO\ LQJ GXULQJ WKH WHUP RI WKH 1 RWHVRWKHUWKDQ RQ WKH 9 DOXDWLRQ ’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
8 QGHUO\ LQJ LVOHVVWKDQ WKH 7 KUHVKROG 9 DOXH \ RX Z LOOUHFHLYH OHVVWKDQ WKH SULQFLSDODP RXQWDWP DWXULW\ HYHQ LI WKH OHYHORI WKH 8 QGHUO\ LQJ Z DVDOZ D\ VDERYH WKH 7 KUHVKROG 9 DOXH SULRUWR WKH
9 DOXDWLRQ ’ DWH
$ Q\ SD\ P HQWV RQ WKH 1 RWHV DUH VXEMHFWWR RXUFUHGLWULVN DQG WKH FUHGLWULVN RI WKH * XDUDQWRU DQG DQ\ DFWXDORUSHUFHLYHG FKDQJ HV LQ RXURUWKH * XDUDQWRU¶V FUHGLWZ RUWKLQHVV DUH H[ SHFWHG WR DIIHFWWKH YDOXH RI WKH 1 RWHV 7 KH 1 RWHVDUH RXUVHQLRUXQVHFXUHG GHEWVHFXULWLHV $ Q\ SD\ P HQWRQ WKH 1 RWHVZ LOOEH IXOO\ DQG XQFRQGLWLRQDOO\ J XDUDQWHHG E\ WKH * XDUDQWRU 7 KH 1 RWHVDUH QRWJ XDUDQWHHG E\ DQ\ HQWLW\ RWKHUWKDQ WKH * XDUDQWRU$ VD UHVXOW\ RXUUHFHLSWRI DQ\ SD\ P HQWVRQ WKH 1 RWHVZ LOOEH GHSHQGHQWXSRQ RXUDELOLW\ DQG WKH DELOLW\ RI WKH * XDUDQWRUWR
UHSD\ RXUUHVSHFWLYH REOLJ DWLRQVXQGHUWKH 1 RWHVRQ WKH DSSOLFDEOH SD\ P HQWGDWH UHJ DUGOHVVRI WKH SHUIRUP DQFH RI WKH 8 QGHUO\ LQJ 1 R DVVXUDQFH FDQ EH J LYHQ DVWR Z KDWRXUILQDQFLDOFRQGLWLRQ RUWKH ILQDQFLDOFRQGLWLRQ RI WKH * XDUDQWRUZ LOOEH DWDQ\ WLP H DIWHUWKH SULFLQJ GDWH RI WKH 1 RWHV ,I Z H DQG WKH * XDUDQWRUEHFRP H XQDEOH WR P HHWRXUUHVSHFWLYH ILQDQFLDOREOLJ DWLRQVDVWKH\ EHFRP H GXH \ RX P D\ QRWUHFHLYH WKH DP RXQWV SD\ DEOH XQGHUWKH WHUP VRI WKH 1 RWHV
,Q DGGLWLRQ RXUFUHGLWUDWLQJ VDQG WKH FUHGLWUDWLQJ VRI WKH * XDUDQWRUDUH DVVHVVP HQWVE\ UDWLQJ VDJ HQFLHVRI RXUUHVSHFWLYH DELOLWLHVWR SD\ RXUREOLJ DWLRQV &RQVHTXHQWO\ RXURUWKH * XDUDQWRU¶V SHUFHLYHG FUHGLWZ RUWKLQHVVDQG DFWXDORUDQWLFLSDWHG GHFUHDVHVLQ RXURUWKH * XDUDQWRU¶VFUHGLWUDWLQJ VRULQFUHDVHVLQ WKH VSUHDG EHWZ HHQ WKH \ LHOG RQ RXUUHVSHFWLYH VHFXULWLHVDQG WKH \ LHOG RQ 8 6 7 UHDVXU\ VHFXULWLHV WKH ‡FUHGLWVSUHDG· SULRUWR WKH 0 DWXULW\ ’ DWH P D\ DGYHUVHO\ DIIHFWWKH P DUNHWYDOXH RI WKH 1 RWHV + RZ HYHU EHFDXVH \ RXUUHWXUQ RQ WKH 1 RWHVGHSHQGVXSRQ IDFWRUVLQ DGGLWLRQ WR RXUDELOLW\ DQG WKH DELOLW\ RI WKH * XDUDQWRUWR SD\ RXUUHVSHFWLYH REOLJ DWLRQV VXFK DVWKH YDOXH RI WKH 8 QGHUO\ LQJ DQ LP SURYHP HQWLQ RXURUWKH * XDUDQWRU¶VFUHGLWUDWLQJ VZ LOOQRW UHGXFH WKH RWKHULQYHVWP HQWULVNVUHODWHG WR WKH 1 RWHV
: H DUH D ILQDQFH VXEVLGLDU\ DQG DV VXFK KDYH QR LQGHSHQGHQWDVVHWV RSHUDWLRQV RUUHYHQXHV : H DUH D ILQDQFH VXEVLGLDU\ RI WKH * XDUDQWRU KDYH QR RSHUDWLRQVRWKHUWKDQ WKRVH UHODWHG WR WKH LVVXDQFH DGP LQLVWUDWLRQ DQG UHSD\ P HQWRI RXUGHEWVHFXULWLHVWKDWDUH J XDUDQWHHG E\ WKH * XDUDQWRU DQG DUH GHSHQGHQWXSRQ WKH * XDUDQWRUDQG RULWVRWKHUVXEVLGLDULHVWR P HHW RXUREOLJ DWLRQVXQGHUWKH 1 RWHVLQ WKH RUGLQDU\ FRXUVH 7 KHUHIRUH RXUDELOLW\ WR P DNH SD\ P HQWVRQ WKH 1 RWHVP D\ ▇▇ ▇▇▇ LWHG
9 DOXDWLRQ DQG 0 DUNHWUHODWHG 5 LVNV
7 KH SXEOLF RIIHULQJ SULFH \ RX DUH SD\ LQJ IRUWKH 1 RWHV H[ FHHGV WKHLULQLWLDOHVWLP DWHG YDOXH 7 KH LQLWLDOHVWLP DWHG YDOXH RI WKH 1 RWHVWKDWLVSURYLGHG RQ WKH FRYHUSDJ H RI WKLVSULFLQJ VXSSOHP HQWLVDQ HVWLP DWH RQO\ GHWHUP LQHG DVRI WKH SULFLQJ GDWH E\ UHIHUHQFH WR RXUDQG RXUDIILOLDWHV¶SULFLQJ P RGHOV 7 KHVH SULFLQJ P RGHOVFRQVLGHUFHUWDLQ DVVXP SWLRQVDQG YDULDEOHV LQFOXGLQJ RXUFUHGLWVSUHDGVDQG WKRVH RI WKH * XDUDQWRU WKH * XDUDQWRU¶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¶VLQWHUQDOIXQGLQJ UDWH DQG WKH LQFOXVLRQ LQ WKH SXEOLF RIIHULQJ SULFH RI WKH XQGHUZ ULWLQJ
( 1 + $ 1 &( ’ 5 ( 7 8 5 1 1 2 7 ( 6 _ 36
( Q K D Q F H G 5 H W X U )Q X W1 XR UW HH VV
( / [ LF QH NV HV G
5 WH
▇▇ ▇
▇▇ QK H
, Q6
G H3 [
GLVFRXQWLI DQ\ DQG WKH KHGJ LQJ UHODWHG FKDUJ HV DOODVIXUWKHUGHVFULEHG LQ ‡6 WUXFWXULQJ WKH 1 RWHV· EHORZ 7 KHVH IDFWRUV WRJ HWKHUZ LWK YDULRXVFUHGLWP DUNHWDQG HFRQRP LF IDFWRUVRYHUWKH WHUP RI WKH 1 RWHV DUH H[ SHFWHG WR UHGXFH WKH SULFH DWZ KLFK \ RX P D\ EH DEOH WR VHOOWKH 1 RWHVLQ DQ\ VHFRQGDU\ P DUNHWDQG Z LOODIIHFWWKH YDOXH RI WKH 1 RWHVLQ FRP SOH[ DQG XQSUHGLFWDEOH Z D\ V
7 KH LQLWLDOHVWLP DWHG YDOXH GRHV QRWUHSUHVHQWD P LQLP XP RUP D[ LP XP SULFH DWZ KLFK Z H %$ & %RI$ 6 RUDQ\ RI RXURWKHUDIILOLDWHV Z RXOG EH Z LOOLQJ WR SXUFKDVH \ RXU1 RWHV LQ DQ\ VHFRQGDU\ P DUNHWLI DQ\ H[ LVWV DWDQ\ WLP H 7 KH YDOXH RI \ RXU1 RWHVDWDQ\ WLP H DIWHULVVXDQFH Z LOOYDU\ EDVHG RQ P DQ\ IDFWRUVWKDWFDQQRWEH SUHGLFWHG Z LWK DFFXUDF\ LQFOXGLQJ WKH SHUIRUP DQFH RI WKH 8 QGHUO\ LQJ RXUDQG %$ &¶VFUHGLWZ RUWKLQHVVDQG FKDQJ HVLQ P DUNHWFRQGLWLRQV
: H FDQQRWDVVXUH \ RX WKDWD WUDGLQJ P DUNHWIRU\ RXU1 RWHV Z LOOHYHUGHYHORS RUEH P DLQWDLQHG : H Z LOOQRWOLVWWKH 1 RWHVRQ DQ\ VHFXULWLHVH[ FKDQJ H : H FDQQRWSUHGLFWKRZ WKH 1 RWHV Z LOOWUDGH LQ DQ\ VHFRQGDU\ P DUNHWRUZ KHWKHUWKDWP DUNHWZ LOOEH OLTXLG RULOOLTXLG
&RQIOLFWUHODWHG 5 LVNV
7UDGLQJ DQG KHGJ LQJ DFWLYLWLHV E\ XV WKH * XDUDQWRUDQG DQ\ RI RXURWKHUDIILOLDWHV LQFOXGLQJ %RI$ 6 P D\ FUHDWH FRQIOLFWV RI LQWHUHVWZ LWK \ RX DQG P D\ DIIHFW\ RXUUHWXUQ RQ WKH
1 RWHV DQG WKHLUP DUNHWYDOXH : H WKH * XDUDQWRURURQH ▇▇▇ ▇▇▇ RI RXURWKHUDIILOLDWHV LQFOXGLQJ %RI$ 6 P D\ EX\ RUVHOOWKH VHFXULWLHVKHOG E\ RULQFOXGHG LQ WKH 8 QGHUO\ LQJ RUIXWXUHVRU RSWLRQVFRQWUDFWVRUH[ FKDQJ H WUDGHG LQVWUXP HQWVRQ WKH 8 QGHUO\ LQJ RUWKRVH VHFXULWLHV RURWKHULQVWUXP HQWVZ KRVH YDOXH LVGHULYHG IURP WKH 8 QGHUO\ LQJ RUWKRVH VHFXULWLHV : KLOH Z H WKH
* XDUDQWRURURQH ▇▇▇ ▇▇▇ RI RXURWKHUDIILOLDWHV LQFOXGLQJ %RI$ 6 P D\ IURP WLP H WR WLP H RZ Q VHFXULWLHVUHSUHVHQWHG E\ WKH 8 QGHUO\ LQJ H[ FHSWWR WKH H[ WHQWWKDW%$ &¶VFRP P RQ VWRFNP D\ EH LQFOXGHG LQ WKH 8 QGHUO\ LQJ Z H WKH * XDUDQWRUDQG RXURWKHUDIILOLDWHV LQFOXGLQJ %RI$ 6 GR QRWFRQWURODQ\ FRP SDQ\ LQFOXGHG LQ WKH 8 QGHUO\ LQJ DQG KDYH QRWYHULILHG DQ\ GLVFORVXUH P DGH E\ DQ\ RWKHUFRP SDQ\ : H WKH * XDUDQWRURURQH ▇▇▇ ▇▇▇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
H[ SRVXUH LQ FRQQHFWLRQ Z LWK WKH 1 RWHV P D\ KDYH DIIHFWHG WKH OHYHORI WKH 8 QGHUO\ LQJ &RQVHTXHQWO\ WKH OHYHORI WKH 8 QGHUO\ LQJ P D\ FKDQJ H VXEVHTXHQWWR WKH SULFLQJ GDWH Z KLFK P D\ DGYHUVHO\ DIIHFWWKH P DUNHWYDOXH RI WKH 1 RWHV
: H WKH * XDUDQWRURURQH ▇▇▇ ▇▇▇ RI RXURWKHUDIILOLDWHV LQFOXGLQJ %RI$ 6 DOVR P D\ KDYH HQJ DJ HG LQ KHGJ LQJ DFWLYLWLHVWKDWFRXOG KDYH DIIHFWHG WKH OHYHORI WKH 8 QGHUO\ LQJ RQ WKH SULFLQJ GDWH ,Q DGGLWLRQ WKHVH KHGJ LQJ DFWLYLWLHV LQFOXGLQJ WKH XQZ LQGLQJ RI D KHGJ H P D\ GHFUHDVH WKH P DUNHWYDOXH RI \ RXU1 RWHVSULRUWR P DWXULW\ DQG P D\ DIIHFWWKH DP RXQWVWR EH SDLG RQ WKH 1 RWHV : H WKH * XDUDQWRURURQH ▇▇▇ ▇▇▇ RI RXURWKHUDIILOLDWHV LQFOXGLQJ %RI$ 6 P D\ SXUFKDVH RURWKHUZ LVH DFTXLUH D ORQJ RUVKRUWSRVLWLRQ LQ WKH 1 RWHVDQG P D\ ▇▇▇▇ RUUHVHOOWKH 1 RWHV ) RUH[ ▇▇ ▇▇▇
%RI$ 6 P D\ HQWHULQWR WKHVH WUDQVDFWLRQVLQ FRQQHFWLRQ Z LWK DQ\ P DUNHWP DNLQJ DFWLYLWLHVLQ Z KLFK LWHQJ DJ HV : H FDQQRWDVVXUH \ RX WKDWWKHVH DFWLYLWLHVZ LOOQRWDGYHUVHO\ DIIHFWWKH OHYHORI WKH 8 QGHUO\ LQJ WKH P DUNHWYDOXH RI \ RXU1 RWHVSULRUWR P DWXULW\ RUWKH DP RXQWVSD\ DEOH RQ WKH 1 RWHV
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
8 QGHUO\ LQJ UHODWHG 5 LVNV
7 KH SXEOLVKHURUWKH VSRQVRURI WKH 8 QGHUO\ LQJ P D\ DGMXVWWKH 8 QGHUO\ LQJ LQ D Z D\ WKDWDIIHFWV LWV OHYHO DQG WKH SXEOLVKHURUWKH VSRQVRUKDV QR REOLJ DWLRQ WR FRQVLGHU\ RXU LQWHUHVWV 7 KH SXEOLVKHURUWKH VSRQVRURI WKH 8 QGHUO\ LQJ FDQ DGG GHOHWH RUVXEVWLWXWH WKH FRP SRQHQWVLQFOXGHG LQ WKH 8 QGHUO\ LQJ RUP DNH RWKHUP HWKRGRORJ LFDOFKDQJ HVWKDWFRXOG FKDQJ H LWV OHYHO$ Q\ RI WKHVH DFWLRQVFRXOG DGYHUVHO\ DIIHFWWKH YDOXH RI \ RXU1 RWHV
7 KH 8 QGHUO\ LQJ LV VXEMHFWWR VLJ QLILFDQWULVNV DVVRFLDWHG Z LWK WKH IXWXUHV FRQWUDFWWR Z KLFK WKH 8 QGHUO\ LQJ LV OLQNHG 7 KH 8 QGHUO\ LQJ LVOLQNHG WR WKH QH[ WP DWXULQJ ( P LQL6 3
IXWXUHVFRQWUDFWFXUUHQWO\ OLVWHG IRUWUDGLQJ RQ WKH &KLFDJ R 0 HUFDQWLOH ( [ FKDQJ H WKH ‡&0 ( ·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
+ LJ KHUIXWXUH SULFHV RI WKH IXWXUHV FRQWUDFWWR Z KLFK WKH 8 QGHUO\ LQJ LV OLQNHG UHODWLYH WR LWV FXUUHQWSULFHV P D\ DGYHUVHO\ DIIHFWWKH YDOXH RI WKH 8 QGHUO\ LQJ DQG WKH YDOXH RI WKH 1 RWHV 7 KH 8 QGHUO\ LQJ LVOLQNHG WR WKH QH[ WP DWXULQJ ( P LQL6 3 IXWXUHVFRQWUDFWFXUUHQWO\ OLVWHG IRUWUDGLQJ RQ WKH &0 ( $ VWKH UHOHYDQWIXWXUHVFRQWUDFWDSSURDFKHVH[ SLUDWLRQ LWLV
UHSODFHG E\ D FRQWUDFWWKDWKDVD ODWHUH[ SLUDWLRQ 7 KXV IRUH[ ▇▇ ▇▇▇ D FRQWUDFWSXUFKDVHG DQG KHOG LQ 6 HSWHP EHUP D\ VSHFLI\ D ’ HFHP EHUH[ SLUDWLRQ $ VWLP H SDVVHV WKH FRQWUDFWH[ SLULQJ LQ ’ HFHP EHULVUHSODFHG E\ D FRQWUDFWIRUGHOLYHU\ LQ 0 DUFK 7 KLVSURFHVVLVUHIHUUHG WR DV‡UROOLQJ · ,I WKH P DUNHWIRU
( 1 + $ 1 &( ’ 5 ( 7 8 5 1 1 2 7 ( 6 _ 36
( Q K D Q F H G 5 H W X U )Q X W1 XR UW HH VV
( / [ LF QH NV HV G
5 WH
▇▇ ▇
▇▇ QK H
, Q6
G H3 [
WKHVH FRQWUDFWVLV SXWWLQJ DVLGH RWKHUFRQVLGHUDWLRQV LQ ‡EDFNZ DUGDWLRQ · Z KHUH WKH SULFHVDUH ORZ HULQ WKH GLVWDQWGHOLYHU\ P RQWKVWKDQ LQ WKH QHDUHUGHOLYHU\ P RQWKV WKH VDOH RI WKH ’ HFHP EH FRQWUDFWZ RXOG WDNH SODFH DWD SULFH WKDWLVKLJ KHUWKDQ WKH SULFH RI WKH 0 DUFK FRQWUDFWWKHUHE\ FUHDWLQJ D ‡UROO\ LHOG · : KLOH P DQ\ IXWXUHVFRQWUDFWVKDYH KLVWRULFDOO\ H[ KLELWHG FRQVLVWHQWSHULRGV RI EDFNZ DUGDWLRQ EDFNZ DUGDWLRQ Z LOOP RVWOLNHO\ QRWH[ LVWDWDOOWLP HV ,WLVDOVR SRVVLEOH IRUWKH P DUNHWIRUWKHVH FRQWUDFWVWR EH LQ ‡FRQWDQJ R · &RQWDQJ R P DUNHWVDUH WKRVH LQ Z KLFK WKH SULFHVR FRQWUDFWVDUH KLJ KHULQ WKH GLVWDQWGHOLYHU\ P RQWKVWKDQ LQ WKH QHDUHUGHOLYHU\ P RQWKV 7 KH SUHVHQFH RI FRQWDQJ R DQG DEVHQFH RI EDFNZ DUGDWLRQ LQ WKH P DUNHWIRUWKHVH FRQWUDFWVFRXOG UHVXOWLQ QHJ DWLYH ‡UROO\ LHOGV· Z KLFK FRXOG DGYHUVHO\ DIIHFWWKH YDOXH RI WKH 8 QGHUO\ LQJ DQG DFFRUGLQJ O\ WKH YDOXH RI WKH 1 RWHV
/ LQNLQJ WR DQ HTXLW\ IXWXUHV FRQWUDFWLV GLIIHUHQWIURP OLQNLQJ WR WKH HTXLW\ LQGH[ WUDFNHG E\ WKH HTXLW\ IXWXUHV FRQWUDFW7 KH UHWXUQ RQ \ RXU1 RWHVZ LOOEH UHODWHG WR WKH SHUIRUP DQFH RI DQ HTXLW\ IXWXUHVFRQWUDFWDQG QRWWKH HTXLW\ LQGH[ WUDFNHG E\ WKH HTXLW\ IXWXUHVFRQWUDFW2 Q D J LYHQ GD\ D ‡IXWXUHVSULFH· LVWKH SULFH DWZ KLFK P DUNHWSDUWLFLSDQWVP D\ DJ UHH WR EX\ RUVHOOWKH DVVHWXQGHUO\ LQJ D IXWXUHVFRQWUDFWLQ WKH IXWXUH DQG WKH ‡VSRWSULFH· LVWKH FXUUHQWSULFH RI VXFK XQGHUO\ LQJ DVVHWIRULP P HGLDWH GHOLYHU\ $ YDULHW\ RI IDFWRUVFDQ OHDG WR D GLVSDULW\ EHWZ HHQ WKH SULFH RI D IXWXUHVFRQWUDFWDWD J LYHQ SRLQWLQ WLP H DQG WKH VSRWSULFH RI LWVXQGHUO\ LQJ DVVHWVXFK DVWKH H[ SHFWHG GLYLGHQG \ LHOGVRI DQ\ VWRFNVWKDWFRP SULVH VXFK XQGHUO\ LQJ DVVHWWKH LP SOLFLW ILQDQFLQJ FRVWDVVRFLDWHG Z LWK WKH IXWXUHVFRQWUDFWDQG P DUNHWH[ SHFWDWLRQVUHODWHG WR WKH IXWXUH SULFH RI WKH IXWXUHVFRQWUDFW¶VXQGHUO\ LQJ DVVHW3 XUFKDVLQJ DQ HTXLW\ IXWXUHVFRQWUDFWLVVLP LODU WR ERUURZ LQJ P RQH\ WR EX\ WKH XQGHUO\ LQJ DVVHWRI VXFK IXWXUHVFRQWUDFWEHFDXVH LWHQDEOHVDQ LQYHVWRUWR J DLQ H[ SRVXUH WR VXFK XQGHUO\ LQJ DVVHWZ LWKRXWKDYLQJ WR SD\ WKH IXOOFRVWRI VXFK
H[ SRVXUH XS IURQWDQG WKHUHIRUH HQWDLOVD ILQDQFLQJ FRVW$ VD UHVXOWWKH 8 QGHUO\ LQJ LVH[ SHFWHG WR UHIOHFWQRWRQO\ WKH SHUIRUP DQFH RI WKH 6 3 ,QGH[ EXWDOVR WKH LP SOLFLWILQDQFLQJ FRVWLQ WKH ( P LQL6 3 IXWXUHVFRQWUDFWDP RQJ RWKHUIDFWRUV 6 XFK LP SOLFLWILQDQFLQJ FRVWZ LOODGYHUVHO\ DIIHFWWKH OHYHORI WKH 8 QGHUO\ LQJ $ Q\ LQFUHDVH LQ P DUNHWLQWHUHVWUDWHVZ LOOEH H[ SHFWHG WR IXUWKHULQFUHDVH WKLVLP SOLFLWILQDQFLQJ FRVWDQG Z LOOKDYH DQ DGYHUVH HIIHFWRQ WKH OHYHORI WKH 8 QGHUO\ LQJ DQG WKHUHIRUH WKH YDOXH RI DQG UHWXUQ RQ WKH 1 RWHV 7 KH SULFH P RYHP HQWRI D IXWXUHV FRQWUDFWLVW\ SLFDOO\ FRUUHODWHG Z LWK WKH P RYHP HQWVRI WKH SULFH RI LWVXQGHUO\ LQJ DVVHWEXWWKH FRUUHODWLRQ LVJ HQHUDOO\ LP SHUIHFWDQG SULFH P RYHP HQWVLQ WKH VSRWP DUNHWP D\ QRWEH UHIOHFWHG LQ
WKH IXWXUHVP DUNHWDQG YLFH YHUVD $ FFRUGLQJ O\ \ RXU1 RWHVP D\ XQGHUSHUIRUP D VLP LODULQYHVWP HQWWKDWP RUH GLUHFWO\ UHIOHFWVWKH UHWXUQ RQ WKH 6 3 ,QGH[
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‡GDLO\ SULFH IOXFWXDWLRQ OLP LWV· DQG WKH P D[ LP XP RUP LQLP XP SULFH RI D FRQWUDFWRQ DQ\ J LYHQ GD\ DVD UHVXOWRI WKHVH OLP LWVLVUHIHUUHG WR DVD ‡OLP LWSULFH · 2 QFH WKH OLP LWSULFH KDVEHHQ UHDFKHG LQ D SDUWLFXODUFRQWUDFWQR WUDGHVP D\ EH P DGH DWD GLIIHUHQWSULFH / LP LWSULFHVKDYH WKH HIIHFWRI SUHFOXGLQJ WUDGLQJ LQ D SDUWLFXODUFRQWUDFWRUIRUFLQJ WKH OLTXLGDWLRQ RI FRQWUDFWVDWGLVDGYDQWDJ HRXV WLP HVRUSULFHV $ Q\ VXFK GLVUXSWLRQ FRXOG KDYH DQ DGYHUVH HIIHFWRQ WKH YDOXH RI WKH 8 QGHUO\ LQJ RUWKH P DQQHULQ Z KLFK LWLVFDOFXODWHG DQG WKHUHIRUH WKH YDOXH RI WKH 1 RWHV
/ HJ DODQG UHJ XODWRU\ FKDQJ HV FRXOG DGYHUVHO\ DIIHFWWKH UHWXUQ RQ DQG YDOXH RI \ RXU1 RWHV ) XWXUHVFRQWUDFWVDQG RSWLRQVRQ IXWXUHVFRQWUDFWV LQFOXGLQJ WKRVH UHODWHG WR WKH 8 QGHUO\ LQJ DUH VXEMHFWWR H[ WHQVLYH VWDWXWHV UHJ XODWLRQV DQG P DUJ LQ UHTXLUHP HQWV 7 KH &RP P RGLW\ ) XWXUHV7 UDGLQJ &RP P LVVLRQ FRP P RQO\ UHIHUUHG WR DVWKH ‡&) 7 & · DQG WKH H[ FKDQJ HVRQ Z KLFK VXFK IXWXUHVFRQWUDFWVWUDGH DUH DXWKRUL] HG WR WDNH H[ WUDRUGLQDU\ DFWLRQVLQ WKH HYHQWRI D P DUNHWHP HUJ HQF\ LQFOXGLQJ IRUH[ ▇▇ ▇▇▇ WKH UHWURDFWLYH LP SOHP HQWDWLRQ RI VSHFXODWLYH SRVLWLRQ OLP LWVRU KLJ KHUP DUJ LQ UHTXLUHP HQWV WKH HVWDEOLVKP HQWRI GDLO\ OLP LWVDQG WKH VXVSHQVLRQ RI WUDGLQJ ) XUWKHUP RUH FHUWDLQ H[ FKDQJ HVKDYH UHJ XODWLRQVWKDWOLP LWWKH DP RXQWRI IOXFWXDWLRQVLQ IXWXUHV FRQWUDFWSULFHVWKDWP D\ RFFXUGXULQJ D VLQJ OH ILYH P LQXWH WUDGLQJ SHULRG 7 KHVH OLP LWVFRXOG DGYHUVHO\ DIIHFWWKH P DUNHWSULFHVRI UHOHYDQWIXWXUHVDQG RSWLRQVFRQWUDFWVDQG IRUZ DUG FRQWUDFWV
7 KH 1 RWHV DUH OLQNHG WR DQ H[ FHVV UHWXUQ LQGH[ DQG QRWD WRWDOUHWXUQ LQGH[ 7 KH 1 RWHVDUH OLQNHG WR DQ H[ FHVVUHWXUQ LQGH[ DQG QRWD WRWDOUHWXUQ LQGH[ $ Q H[ FHVVUHWXUQ LQGH[ VXFK DVWK
8 QGHUO\ LQJ UHIOHFWVWKH UHWXUQVWKDWDUH SRWHQWLDOO\ DYDLODEOH WKURXJ K DQ XQOHYHUDJ HG LQYHVWP HQWLQ WKH FRQWUDFWVFRP SRVLQJ WKDWLQGH[ %\ FRQWUDVWD ‡WRWDOUHWXUQ· LQGH[ LQ DGGLWLRQ WR UHIOHFWLQJ WKRVH UHWXUQV DOVR UHIOHFWVLQWHUHVWWKDWFRXOG EH HDUQHG RQ IXQGVFRP P LWWHG WR WKH WUDGLQJ RI WKH XQGHUO\ LQJ IXWXUHVFRQWUDFWV
7D[ UHODWHG 5 LVNV
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‡8 6 ) HGHUDO,QFRP H 7D[ 6 XP P DU\ † * HQHUDO· ,I WKH ,QWHUQDO5 HYHQXH 6 HUYLFH WKH ‡,5 6 · Z HUH VXFFHVVIXOLQ DVVHUWLQJ DQ DOWHUQDWLYH FKDUDFWHUL] DWLRQ IRUWKH 1 RWHV WKH WLP LQJ DQG FKDUDFWHURI J DLQ RUORVVZ LWK UHVSHFWWR WKH 1 RWHVP D\ GLIIHU 1 R UXOLQJ Z LOOEH UHTXHVWHG IURP WKH ,5 6 Z LWK UHVSHFWWR WKH 1 RWHVDQG QR DVVXUDQFH FDQ EH J LYHQ WKDWWKH ,5 6 Z LOODJ UHH Z LWK WKH VWDWHP HQWVP DGH LQ WKH VHFWLRQ HQWLWOHG ‡8 6 ) HGHUDO,QFRP H 7D[ 6 XP P DU\ · <RX DUH XUJ HG WR FRQVXOWZ LWK \ RXURZ Q WD[ DGYLVRUUHJ DUGLQJ DOODVSHFWV RI WKH 8 6 IHGHUDOLQFRP H WD[
FRQVHTXHQFHV RI LQYHVWLQJ LQ WKH 1 RWHV
( 1 + $ 1 &( ’ 5 ( 7 8 5 1 1 2 7 ( 6 _ 36
