Professional Documents
Culture Documents
Capital PDF
Capital PDF
)LQDQFLDO0DUNHWV
0RQH\0DUNHW
&DOO0RQH\0DUNHW$FWLYLWLHVLQ)<
)LQDQFLDO0DUNHWV &KDSWHU
7DEOH5HSR$XFWLRQV)<
%LGVUHFHLYHG %LGVDFFHSWHG
7RWDOQXPEHURIDXFWLRQV ,QWHUHVWUDWHRIWKH
7HQRU 1XPEHURI )DFHYDOXH )DFHYDOXH
KHOGGXULQJWKH\HDU 1XPEHURIELGV DFFHSWHGELGV
ELGV ELOOLRQ%'7 ELOOLRQ%'7
'D\'D\
'D\
7RWDO
2YHUDOOLQWHUHVWUDWHUDQJHRIGLႇHUHQWWHQRUV
6RXUFH0RQHWDU\3ROLF\'HSDUWPHQW%DQJODGHVK%DQN
5HSR$XFWLRQVKHOGLQ)< 5HYHUVH5HSR$XFWLRQVKHOGLQ)<
%DQJODGHVK %DQN XVXDOO\ FRQGXFWV ,Q OLQH ZLWK WKH EURDG REMHFWLYH RI
YDULRXV W\SHV RI 5HSR DXFWLRQV WR SURYLGH PRQHWDU\ SROLF\ %DQJODGHVK %DQN FRQWLQXHG
RYHUQLJKW OLTXLGLW\ IDFLOLW\ WR EDQNV DW D SUH WRPRSXSOLTXLGLW\IURPWKHEDQNVWKURXJKWKH
GHWHUPLQHGSROLF\UDWHDVDJDLQVWWKHFROODWHUDO 5HYHUVH 5HSR DXFWLRQV WR NHHS XS 5HVHUYH
IDFH YDOXH RI JRYHUQPHQW WUHDVXU\ ELOOV 0RQH\DQG0RQH\0XOWLSOLHURQWUDFN,QFDVH
DQG ERQGV WR PDLQWDLQ WKHLU LQVWDQW OLTXLGLW\ RI5HYHUVH5HSR%%DEVWDLQHGIURPSURYLGLQJ
UHTXLUHPHQWV 7KH UDWHV RI LQWHUHVW IRU 5HSR DQ\FROODWHUDOWRWKHEDQNV$WRWDORIGDLO\
6SHFLDO 5HSR DQG 5HVHUYH 5HSR ZHUH
5HYHUVH 5HSR DXFWLRQV ZHUH KHOG LQ )<
SHUFHQW SHUFHQW DQG SHUFHQW
,Q WRWDO ELGV RI GD\ DQG ELGV RI
UHVSHFWLYHO\ LQ )< 5HSR UDWH DQG 5HYHUVH
GD\WHQRUVIRUDWRWDORI%'7ELOOLRQZHUH
5HSRUDWHUHPDLQHGXQFKDQJHGDWSHUFHQW
UHFHLYHGEXWQRELGZDVDFFHSWHG7DEOH
DQG SHUFHQW GXULQJ )< IRU DFKLHYLQJ
EURDGREMHFWLYHRIPRQHWDU\SROLF\ 'XULQJ )< ELGV IRU %'7 ELOOLRQ
ZHUHUHFHLYHGDQG%'7ELOOLRQZHUH
$WRWDORIVL[5HSRDXFWLRQVLQFOXGLQJ DFFHSWHG 7KH LQWHUHVW UDWH RI 5HYHUVH 5HSR
6SHFLDO 5HSR DQG /6) DXFWLRQV ZHUH KHOG
UHPDLQHG XQFKDQJHG DW SHUFHQW SHU
GXULQJ)<RIZKLFKELGVIRU%'7ELOOLRQ
DQQXPVLQFH-DQXDU\
ZHUHUHFHLYHGDQGDOOWKHELGVZHUHDFFHSWHG
'XULQJ)<WRWDOELGVIRU%'7ELOOLRQ %DQJODGHVK%DQN%LOO$XFWLRQVKHOGLQ)<
ZHUHUHFHLYHGRIZKLFK%'7ELOOLRQZDV
DFFHSWHG 7KH YROXPH RI DFFHSWHG DPRXQWV ,QRUGHUWRFRQGXFWHႇHFWLYHPDQDJHPHQW
GHFUHDVHG E\ SHUFHQW GXULQJ )< DQG VWHULOL]H OLTXLGLW\ RI WKH EDQNLQJ V\VWHP
7DEOH FRPSDUHG WR )< 7KH UDQJH RI RSHUDWLRQV RI GD\ DQG GD\ %DQJODGHVK
LQWHUHVW UDWH DJDLQVW WKH DFFHSWHG ELGV ZDV %DQN %LOO ZHUH LQWURGXFHG LQ $SULO DQG
SHUFHQWSHUDQQXPZKLFKZDV GD\ %DQJODGHVK %DQN %LOO ZKLFK ZDV
SHUFHQWLQ)< UHYLYHG LQ )< ZDV DOVR FRQWLQXHG LQ )<
7DEOH5HYHUVHUHSRDXFWLRQV)<
%LGVUHFHLYHG %LGVDFFHSWHG
7RWDOQXPEHURI
7HQRU ,QWHUHVWUDWHVRIWKH
DXFWLRQVKHOGGXULQJ )DFHYDOXH )DFHYDOXH
1XPEHURIELGV 1XPEHURIELGV DFFHSWHGELGV
WKH\HDU ELOOLRQ%'7 ELOOLRQ%'7
'D\'D\
'D\'D\
7RWDO
6RXUFH0RQHWDU\3ROLF\'HSDUWPHQW%DQJODGHVK%DQN
&KDSWHU )LQDQFLDO0DUNHWV
7DEOH$XFWLRQVRI%DQJODGHVK%DQN%LOO)<
:HLJKWHGDYHUDJH\LHOG
%LGVRႇHUHG %LGVDFFHSWHG 2XWVWDQGLQJELOOVDVRI
7HQRURIELOO :$5UDQJH
HQG-XQH
)DFHYDOXH )DFHYDOXH ELOOLRQ%'7
1XPEHU 1XPEHU )< )<
ELOOLRQ%'7 ELOOLRQ%'7
'D\
'D\
'D\
7RWDO
5DQJHRIWKHZHLJKWHGDYHUDJHDQQXDO\LHOGRIWKHDFFHSWHGELGV
6RXUFH0RQHWDU\3ROLF\'HSDUWPHQW%DQJODGHVK%DQN
7DEOH$XFWLRQVRI*RYHUQPHQW7UHDVXU\%LOOV)<
2XWVWDQGLQJ :HLJKWHGDYHUDJH\LHOG
%LGVRႇHUHG %LGVDFFHSWHG
7HQRURIELOOV ELOOVDVRIHQG :$5UDQJH
)DFHYDOXH )DFHYDOXH -XQH
1XPEHU 1XPEHU ELOOLRQ%'7 )< )<
ELOOLRQ%'7 ELOOLRQ%'7
'D\
'D\
'D\
'HYROYHPHQWRQ%%
7RWDO
5DQJHRIWKHZHLJKWHGDYHUDJHDQQXDO\LHOGRIWKHDFFHSWHGELGV
6RXUFH0RQHWDU\3ROLF\'HSDUWPHQW%DQJODGHVK%DQN
)LQDQFLDO0DUNHWV &KDSWHU
%R[6WDWHRI%RQG0DUNHWGHYHORSPHQWLQ%DQJODGHVK
7KH ¿[HG LQFRPH ERQG PDUNHWV DUH XVHIXO IRU UDLVLQJ IXQG WKURXJK EDQN ERUURZLQJ 'HYHORSPHQW RI
PDUNHWV IRU FRUSRUDWH ERQGV GHSHQGV FUXFLDOO\ RQ H[LVWHQFH RI D ZHOO IXQFWLRQLQJ OLTXLG PDUNHWV LQ
7UHDVXU\ %LOOV DQG 7UHDVXU\ %RQGV 7KH \LHOG FXUYH RI 7UHDVXU\ %LOOV 7%LOOV DQG 7UHDVXU\ %RQGV
7%RQGVLVXVHGDVSULFLQJEHQFKPDUNIRUFRUSRUDWHERQGLVVXHV
6XEVWDQWLDO HႇRUWV KDYH EHHQ LQLWLDWHG WR VWUHQJWKHQLQJ WKH SURFHVV IRU WKH SULPDU\ LVVXDQFH RI
JRYHUQPHQW VHFXULWLHV 7KH &DVK DQG 'HEW 0DQDJHPHQW &RPPLWWHH &'0& DQG WKH DVVRFLDWHG
WHFKQLFDO FRPPLWWHH &'07& RYHUVHH WKH PDQDJHPHQW RI WKH GRPHVWLF ERUURZLQJ UHTXLUHPHQW RI
JRYHUQPHQW RYHU WKH EXGJHWDU\ \HDU 2Q WKLV EDVLV WKH DXFWLRQ FDOHQGDU DQG WKH GLVWULEXWLRQ RI WKH
DPRXQWVDQGPDWXULW\RI7%LOOVDQG7%RQGVDUHVHW2YHUWLPHWKH\LHOGRIWKHUDQJHRIJRYHUQPHQW
VHFXULWLHVKDVEHFRPHEHWWHUDOLJQHGZLWKPDUNHWLQWHUHVWUDWH
7KH PDUNHW LQIUDVWUXFWXUH XQGHUSLQQLQJ WKH JRYHUQPHQW VHFXULWLHV PDUNHW KDV EHHQ VLJQL¿FDQWO\
VWUHQJWKHQHG7KHVRXQGQHVVRIWKHPDUNHWKDVEHHQVHFXUHGWKURXJKWKHLQWURGXFWLRQRIDQDXWRPDWHG
'HOLYHU\ YHUVXV 3D\PHQW 'Y3 VHWWOHPHQW V\VWHP LQ %% VHW XS D 0DUNHW ,QIUDVWUXFWXUH 0,
0RGXOHLQ0,PRGXOHLVDQHOHFWURQLFSODWIRUPWKDW%%XVHVIRURQOLQHDXFWLRQDQGLVVXHRI7%LOOV
DQG7%RQGV5HSRRSHUDWLRQOLTXLGLW\VXSSRUWWR3'VHWF%%KDVDOVRLQWURGXFHG7UDGHU:RUN6WDWLRQ
7:6XQGHU0,0RGXOHWRIDFLOLWDWHRQOLQHVHFRQGDU\GHDOLQJRIVHFXULWLHVDWWKHHQGRI:LWKWKH
LQVWDOODWLRQ RI 7:6 DQ\ LQGLYLGXDOLQVWLWXWLRQ FDQ SDUWLFLSDWH LQ WKH VHFRQGDU\ WUDGLQJ RI JRYHUQPHQW
VHFXULWLHV WKURXJK 3'V EDQNV¿QDQFLDO LQVWLWXWLRQV %% KDV DOVR LQWURGXFHG D ZHE EDVHG SODWIRUP
KWWSJDVRPEERUJEG LQ $XJXVW WR PDNH WKH HQWLUH VXEPLWWHG ELG DVNHG SULFH\LHOG YLVLEOH
LQFOXGLQJ GHWDLOV RI JRYHUQPHQW VHFXULWLHV WR WKH WUDGHUVLQYHVWRUV LQ UHDO WLPH EDVLV ,Q -XQH
WRWDORXWVWDQGLQJRI7%LOODQG7%RQGZDV%'7ELOOLRQZKLFKLVDOPRVWVDPHDVSUHYLRXV\HDU
'XULQJ)<YROXPHRIVHFRQGDU\WUDGLQJZDV%'7ELOOLRQZKHUHDVLWZDV%'7ELOOLRQLQ)<
6DOHRIVDYLQJVFKHPHZDV%'7ELOOLRQLQ)<DQG%'7ELOOLRQLQ)<
WRXVHWKRVHDVWKHPDLQLQVWUXPHQWVIRUGHEW VXPPDULVHGDW7DEOH7KHUDQJHRIDQQXDO
PDQDJHPHQWRIWKHJRYHUQPHQWLQ)<7KH ZHLJKWHGDYHUDJH\LHOGVRIPRVWRIWKH7UHDVXU\
UHVXOWV RI 7UHDVXU\ %LOOV DXFWLRQV LQ )< DUH %LOOVGHFUHDVHGLQ)<DVFRPSDUHGWR)<
&KDSWHU )LQDQFLDO0DUNHWV
7DEOH$XFWLRQVRI%DQJODGHVK*RYHUQPHQW7UHDVXU\%RQGV)<
%LGVRႇHUHG %LGVDFFHSWHG 2XWVWDQGLQJERQGVDV
7HQRURIERQGV )DFHYDOXH )DFHYDOXH RIHQG-XQH <LHOGUDQJH
1XPEHU 1XPEHU ELOOLRQ%'7
ELOOLRQ%'7 ELOOLRQ%'7
<HDU
'HYROYHPHQWRQ%%
<HDU
'HYROYHPHQWRQ%%
<HDU
'HYROYHPHQWRQ%%
<HDU
'HYROYHPHQWRQ%%
<HDU
'HYROYHPHQWRQ%%
7RWDO #
5DQJHRIWKHZHLJKWHGDYHUDJHDQQXDO\LHOGRIWKHDFFHSWHGELGV#:HLJKWHGDYHUDJHDQQXDO\LHOGRIWUHDVXU\ERQGVRIGLႇHUHQWWHUPV
6RXUFH0RQHWDU\3ROLF\'HSDUWPHQW%DQJODGHVK%DQN
GXHPDLQO\WRH[LVWHQFHRIDႉ
XHQWOLTXLGLW\LQWKH &KDUW 0RYHPHQWVRI:HLJKWHG
PDUNHW ZKLOH JRYHUQPHQW ERUURZLQJ IURP WKH $YHUDJH<LHOGRI%*7%LQ)<
EDQNLQJV\VWHPUHJLVWHUHGDYHU\ORZSRVLWLRQ
0RUHRYHUWKHKLJKHUDPRXQWRI7UHDVXU\%LOOV
RI GLႇHUHQW WHQRUV UHVXOWLQJ ORZHU DPRXQW RI
RXWVWDQGLQJDV\HDURQ\HDUEDVLV
$WRWDORIELGVDPRXQWLQJWR%'7
ELOOLRQZHUHUHFHLYHGRIZKLFKELGV
DPRXQWLQJ WR %'7 ELOOLRQ LQFOXGLQJ
%'7 ELOOLRQ DV GHYROYHG DPRXQW ZHUH
)URP0DUFKWR0D\%*7%DXFWLRQZDVQRWSHUIRUPHG
DFFHSWHG LQ )< 7KH ZHLJKWHG DYHUDJH DFFRUGLQJWRDXFWLRQFDOHQGDURI)<
\LHOGWRPDWXULW\ DJDLQVW WKH DFFHSWHG ELGV 6RXUFH0RQHWDU\3ROLF\'HSDUWPHQW%DQJODGHVK%DQN
)LQDQFLDO0DUNHWV &KDSWHU
WRWDORIELGVIRU%'7ELOOLRQZHUH
WKH ERQGV GHSHQGV RQ LQYHVWPHQW LQ OLQH ZLWK
UHFHLYHG DQG ELGV IRU %'7 ELOOLRQ
WKH ,VODPLF 6KDULDK VDYLQJV UDWH DQG RWKHU
ZHUHDFFHSWHGRIZKLFK%'7ELOOLRQZDV
UHODWHG IDFWRUV UHÀHFWHG LQ WKH EDODQFH VKHHW
GHYROYHG RQ %% 7KH DPRXQW RI RXWVWDQGLQJ
RIWKHUHVSHFWLYH,VODPLFEDQNV7KHRSHUDWLRQ
ERQGV ZDV PDUJLQDOO\ LQFUHDVHG E\
RI PRQWK %DQJODGHVK *RYHUQPHQW ,VODPLF
SHUFHQW WR %'7 ELOOLRQ DW WKH HQG RI
,QYHVWPHQW %RQG ZDV LQWURGXFHG LQ )< $V
-XQHIURP%'7ELOOLRQDWWKHHQG
D QHZ WRRO PRQWK %DQJODGHVK *RYHUQPHQW
RI-XQH
,VODPLF ,QYHVWPHQW %RQG ZDV LQWURGXFHG
7KH ZHLJKWHG DYHUDJH DQQXDO \LHOG RQ -DQXDU\ ,W PD\ EH QRWHG WKDW WKH
WRPDWXULW\ IRU WKH WUHDVXU\ ERQGV UDQJHG DXFWLRQ RI \HDU DQG \HDU ,VODPLF %RQGV
IURP SHUFHQW WR SHUFHQW DQG KDYH EHHQ VXVSHQGHG VLQFH -DQXDU\
VKRZHGDGHFOLQLQJWUHQGLQ)<&KDUW 7KLV *RYHUQPHQW ,VODPLF ,QYHVWPHQW %RQG LV
7KH VXPPDU\ RI DXFWLRQV RI %DQJODGHVK RSHUDWHGLQDFFRUGDQFHZLWKWKHUXOHVRI,VODPLF
*RYHUQPHQW 7UHDVXU\ %RQGV GXULQJ )< LV 6KDULDK$VSHUUXOHV%DQJODGHVKLLQVWLWXWLRQV
JLYHQDW7DEOH LQGLYLGXDOVDQGQRQUHVLGHQW%DQJODGHVKLVZKR
,W LV PHQWLRQDEOH WKDW LQ )< ELGV DJUHH WR VKDUH SUR¿W RU ORVV LQ DFFRUGDQFH
IRUDWRWDORI%'7ELOOLRQZHUHUHFHLYHG ZLWK ,VODPLF 6KDULDK PD\ EX\ WKHVH ERQGV
DQG%'7ELOOLRQZDVDFFHSWHGRIZKLFK $V RI HQG -XQH WKH WRWDO VDOH DJDLQVW
%'7 ELOOLRQ ZDV GHYROYHG RQ %%3'V WKLVERQGDPRXQWHGWR%'7ELOOLRQZKLOH
DQG QRQ 3'V 7KH RYHUDOO ZHLJKWHG DYHUDJH EDODQFH RI WRWDO DPRXQW RI ¿QDQFLQJ VWRRG DW
\LHOGWRPDWXULW\UDQJHGIURPSHUFHQWWR %'7ELOOLRQDQGQHWEDODQFHDJDLQVWWKH
SHUFHQWLQ)< ERQG VWRRG DW %'7 ELOOLRQ $V RI HQG
-XQHWKHWRWDOVDOHDJDLQVWWKLVERQGZDV
%DQJODGHVK*RYHUQPHQW,VODPLF,QYHVWPHQW
%'7ELOOLRQDJDLQVWWKHEDODQFHRIWRWDO
%RQG,VODPLF%RQG
¿QDQFLQJRI%'7ELOOLRQDQGQHWEDODQFH
*RYHUQPHQWLVVXHVERQGVDVJXDUDQWHH RI%'7ELOOLRQ'XHWRKLJKHUDPRXQWRI
DJDLQVWWKHSRRORIIXQGVIRUPHGE\WKH,VODPLF ¿QDQFLQJ GHPDQG E\ WKH ,VODPLF EDQNV WKH
EDQNV DQG LQGLYLGXDOV LQ RUGHU WR GHYHORS DPRXQW RI QHW EDODQFH VWRRG DW %'7
PRQH\PDUNHWIRUVPRRWKOLTXLGLW\PDQDJHPHQW ELOOLRQLQ)<FRPSDULQJ%'7ELOOLRQRI
RI,VODPLFEDQNV9LUWXDOO\JRYHUQPHQWGRHVQRW )<7KHRYHUDOOWUDQVDFWLRQVRIWKLVERQGDUH
ERUURZ PRQH\ IURP WKLV VHFWRU 7KH UHWXUQ RI VXPPDULVHGLQ7DEOH
&KDSWHU )LQDQFLDO0DUNHWV
%R['HYHORSPHQWRI+RXVH3ULFH,QGH[LQ%DQJODGHVK
7KHUHDOHVWDWHVHFWRULVRQHRIWKHPDLQGULYHUVRIDQDWLRQ
VHFRQRPLFGHYHORSPHQWDQGLQGXVWULDOL]DWLRQ
2YHUWLPHWKLVVHFWRUKDVHPHUJHGDVDPDMRUDUHDIRUFUHDWLRQRIERWKSK\VLFDODQG¿QDQFLDODVVHWV
DQGFRQVWLWXWHGDQLQFUHDVLQJSURSRUWLRQRIQDWLRQDOZHDOWK$VHYLGHQWIURP)<KRXVLQJVHFWRU
FUDVKLQWKH8QLWHG6WDWHVRI$PHULFDDQGRWKHUGHYHORSHGFRXQWULHVWKHIRUWXQHRIWKHUHDOHVWDWHPDUNHW
QRWRQO\VHUYHVDVDJXLGHWRRYHUDOOHFRQRPLFDFWLYLW\EXWDOVRKDVLPSOLFDWLRQVIRUWKHRYHUDOOKHDOWKRID
¿QDQFLDOV\VWHP7KXV+RXVH3ULFH,QGH[+3,LVDQLPSRUWDQWLQGLFDWRUIRUSROLF\PDNHUVLQIUDPLQJ
PRQHWDU\DQG¿VFDOSROLFLHV,QDGGLWLRQKRXVHSULFHLQGLFHVKDYHDQXPEHURILPSRUWDQWXVHVLDV
DPDFURHFRQRPLFLQGLFDWRURIHFRQRPLFJURZWKLLIRUXVHLQPRQHWDU\SROLF\DQGLQÀDWLRQWDUJHWLQJ
LLLDVDQLQSXWWRHVWLPDWHWKHYDOXHRIKRXVLQJDVDFRPSRQHQWRIZHDOWKLYDVD¿QDQFLDOVWDELOLW\RU
VRXQGQHVVLQGLFDWRUWRPHDVXUHULVNH[SRVXUHYDVDGHÀDWRURIWKHQDWLRQDODFFRXQWVDQGYLDVDQ
LQSXWIRUWKHFRQVXPHUSULFHV+RXVHSULFHDOVRDႇHFWVEDQNOHQGLQJDQGYLFHYHUVDZKLFKLQGLFDWHVLW
PD\LQÀXHQFHHFRQRPLFDFWLYLWLHVWKURXJKSULYDWHFRQVXPSWLRQRIKRXVHKROGVUHVLGHQWLDOLQYHVWPHQW
DQGFUHGLWDOORFDWLRQRIWKH¿QDQFLDOV\VWHPV7KHUHIRUHLWLVQHFHVVDU\WRSUHSDUHDQDFFXUDWHPHDVXUH
RIDJJUHJDWHKRXVHSULFHEHFDXVHLWVYRODWLOLW\LVDOVRDFRQFHUQHGIRUEDQNVDVZHOODVFRUSRUDWLRQV
0DQ\$VLDQFRXQWULHVOLNH,QGLD7KDLODQG0RQJROLD
&RXQWU\([SHULHQFH
&KLQD 3KLOLSSLQH DQG 9LHWQDP KDYH VWDUWHG WR
&RXQWU\ 0HWKRG )UHTXHQF\ 6WDUWLQJ<HDU
FDOFXODWH +3, FRQWLQXRXVO\ ZKLOH %DQJODGHVK LV
,QGLD /DVSH\UHV 4XDUWHUO\
IDU EHKLQG WKLV 7DEOH /LNH RWKHU FRXQWULHV WKH
$YHUDJH
KRXVLQJ VHFWRU LV SOD\LQJ DQ LPSRUWDQW UROH LQ WKH 7KDLODQG 6WUDWL¿FDWLRQ 4XDUWHUO\
HFRQRP\DQGVHUYLQJWKHIXQGDPHQWDOKXPDQULJKW KHGRQLF
$YHUDJH 4XDUWHUO\DQG
RI VKHOWHU RI %DQJODGHVK ,W KDV D KXJH PXOWLSOLHU 0RQJROLD
KHGRQLF PRQWKO\
HႇHFWRQHFRQRPLFDFWLYLWLHVDQGWKHUHIRUHLVDELJ &KLQD $YHUDJH PRQWKO\
GULYHU RI HFRQRPLF JURZWK ,W LV RQH RI WKH ODUJHVW
6DOHV3ULFH
HPSOR\PHQWJHQHUDWLQJ VHFWRUV DIWHU DJULFXOWXUH 3KLOLSSLQH 4XDUWHUO\
$SSUDLVDOUDWLR
DQGUHDG\PDGHJDUPHQWVVHFWRUV0RUHRYHULWDOVR 9LHWQDP /DVSH\UHV 4XDUWHUO\
VWLPXODWHVGHPDQGIRUDQFLOODU\LQGXVWULHVOLNHVWHHO
FHPHQWWLOHVDQGVDQLWDU\ZDUHFDEOHDQGHOHFWULFZDUHSDLQWJODVVDOXPLQXPEULFNRWKHUEXLOGLQJ
PDWHULDOVDQGFRQVXPHUGXUDEOHV2YHUWKHODVWIHZ\HDUVWKLVVHFWRUKDVDSSHDUHGDVDFUXFLDOIDFWRU
LQWKHQDWLRQDOHFRQRP\FRQWULEXWLQJDURXQGSHUFHQWRI*'3ZKLOHWKLVVHFWRUDORQJZLWKLWVEDFNZDUG
OLQNDJHLQGXVWULHVFRQWULEXWHGDERXWSHUFHQW,QDGGLWLRQWKLVVHFWRUGLUHFWO\DGGVRQDQDYHUDJH
QHDUO\%'7FRUHVWRWKHQDWLRQDOH[FKHTXHUHYHU\\HDU
7KHUHIRUHWKHLQFUHDVLQJGRPLQDQFHRIWKHVHFWRUGHPDQGIRUVHWWLQJXSDPHFKDQLVPZKLFKFRXOGWUDFN
WKHPRYHPHQWRISULFHVLQWKHUHVLGHQWLDOKRXVLQJVHFWRU$OWKRXJKWKHLQIRUPDWLRQRQKRXVHSULFHVLVQRW
UHDGLO\DYDLODEOHGXHWRODFNRIWUDQVSDUHQF\LQWKHUHVLGHQWLDOSURSHUW\PDUNHWWKLVOLPLWHGDYDLODELOLW\
RISULFHLQIRUPDWLRQLVYLWDOIRULGHQWLI\LQJWKHQDWXUHRIUHDOHVWDWHSULFHG\QDPLFVDQGWKHLUUHODWLRQVKLS
ZLWK¿QDQFLDOVWDELOLW\DQGPRQHWDU\SROLF\,QWKLVEDFNGURSLWLVHVVHQWLDOWRFDOFXODWHWKH+RXVH3ULFH
,QGH[+3,RIWKHKRXVLQJVHFWRULQ%DQJODGHVK,Q0DUFK5HVHDUFK'HSDUWPHQWRI%DQJODGHVK
%DQNKDVWDNHQLQLWLDWLYHVWRFRQVWUXFWµ5HVLGHQWLDO3URSHUW\3ULFH,QGH[533,¶IRU%DQJODGHVKZLWKWKH
WHFKQLFDODVVLVWDQFHRI,QWHUQDWLRQDO0RQHWDU\)XQG,0)7KHUHDIWHU%DQJODGHVK%DQNZLOOFDOFXODWH
+3, RQ UHJXODU EDVLV E\ DSSO\LQJ /DVSH\HUHV DQG +HGRQLF PHWKRG E\ XVLQJ LQIRUPDWLRQGDWD IURP
DXWKHQWLFVRXUFHV
+RXVH 3ULFH ,QGH[ +3, PHDVXUHV WKH SULFH FKDQJHV RI UHVLGHQWLDO KRXVLQJ ,W LV D VWDWLVWLFDO WRRO IRU PHDVXULQJ WKH
UHODWLYHFKDQJHLQUHDOHVWDWHSULFHVEHWZHHQWZRSRLQWVRIWLPH
)LQDQFLDO0DUNHWV &KDSWHU
&DSLWDO0DUNHW$FWLYLWLHVLQ)<
3ULPDU\,VVXDQFH
&KDSWHU )LQDQFLDO0DUNHWV
LQGLFDWLQJ D VKRUWDJH RI QHZ VHFXULWLHV LQ WKH %'7 $FFRXQW 1,7$ LQFUHDVHG WR %'7
SULPDU\PDUNHW%RQXVVKDUHVZRUWK%'7 ELOOLRQ LQ )< IURP %'7 ELOOLRQ LQ )<
ELOOLRQZHUHLVVXHGLQ)<E\FRPSDQLHV 2QWKHRWKHUKDQGJURVVLQYHVWPHQWRXWÀRZDV
DJDLQVW UHWDLQHG SUR¿WV 7KLV ZDV ORZHU WKDQ UHSDWULDWLRQRIVDOHSURFHHGVKDVGHFUHDVHGWR
%'7 ELOOLRQ LVVXHG E\ FRPSDQLHV LQ %'7ELOOLRQLQ)<IURP%'7ELOOLRQ
)< 2Q WKH RWKHU KDQG ULJKW VKDUHV ZRUWK LQ )< )URP WKH EHJLQQLQJ $SULO WR
%'7 ELOOLRQ ZHUH LVVXHG LQ )< E\ IRXU -XQHWKHJURVVLQYHVWPHQWLQÀRZVWRRGDW
FRPSDQLHV ZKLFK ZHUH KLJKHU WKDQ %'7 %'7ELOOLRQDJDLQVWJURVVRXWÀRZRI%'7
ELOOLRQLVVXHGE\WZRFRPSDQLHVLQ)< ELOOLRQDVUHSDWULDWLRQRIVDOHSURFHHGV
6HFRQGDU\0DUNHW$FWLYLWLHV $FWLYLWLHVRIWKH,QYHVWPHQW&RUSRUDWLRQRI
%DQJODGHVK
$VSHUFHQWDJHRIPDUNHWFDSLWDOLVDWLRQ
VHFRQGDU\ PDUNHW DUH GRPLQDWHG E\ WKH 7KH ,QYHVWPHQW &RUSRUDWLRQ RI
PDQXIDFWXULQJ VHFWRU ZLWK SHUFHQW VKDUH %DQJODGHVK ,&% ZDV HVWDEOLVKHG ZLWK DLP
IROORZHGE\VHUYLFHVDQGPLVFHOODQHRXVVHFWRU DW DFFHOHUDWLQJ WKH SDFH RI LQGXVWULDOLVDWLRQ
DQG GHYHORSLQJ D ZHOO RUJDQLVHG DQG YLEUDQW
SHUFHQW ¿QDQFLDO VHFWRU SHUFHQW
FDSLWDOPDUNHWSDUWLFXODUO\VHFXULWLHVPDUNHWLQ
DQGFRUSRUDWHERQGVSHUFHQWDWWKHHQG
%DQJODGHVK,&%¶VDFWLYLWLHVRQFDSLWDOPDUNHW
RI )< ,Q WKH '6( PDUNHW FDSLWDOLVDWLRQ
GHYHORSPHQWSURJUDPPHKDYHEHHQH[SDQGHG
LQFOXVLYH RI QHZ LVVXHV LQFUHDVHG E\
WKURXJK WKH IRUPDWLRQ DQG RSHUDWLRQ RI WKH
SHUFHQW WR %'7 ELOOLRQ DW WKH HQG RI
WKUHH VXEVLGLDU\ &RPSDQLHV QDPHO\ WKH ,&%
)< IURP %'7 ELOOLRQ DW WKH HQG RI
&DSLWDO0DQDJHPHQW/WG,&0/WKH,&%$VVHW
)< &KDUW ZKLFK ZDV SHUFHQW RI
0DQDJHPHQW &RPSDQ\ /WG ,$0&/ DQG WKH
*'3 DW FXUUHQW PDUNHW SULFH ,Q FDVH RI WKH
,&%6HFXULWLHV7UDGLQJ&RPSDQ\/WG,67&/
&6(LWZDVDOVRLQFUHDVHGE\SHUFHQWWR
'XULQJ )< WRWDO LQYHVWPHQW DJDLQVW WKH
%'7ELOOLRQDWWKHHQGRI)<ZKLFKZDV
LQYHVWRUV¶ DFFRXQWV VWRRG DW %'7 ELOOLRQ
SHUFHQWRI*'3DWFXUUHQWPDUNHWSULFH
ZKLOH GHSRVLW VWRRG DW %'7 ELOOLRQ 7KH
%HVLGHVDPRXQWRIWXUQRYHUVLQWKHVHFRQGDU\
,$0&/HPHUJHGDVRQHRIWKHIDVWH[SDQGLQJ
PDUNHWDW'6(DQG&6(KDVLQFUHDVHGE\
DVVHW PDQDJHPHQW FRPSDQ\ RI WKH FRXQWU\
SHUFHQWDQGSHUFHQWUHVSHFWLYHO\LQ)<
7KHFRPSDQ\KDVÀRDWHGFORVHGHQGDQG
FRPSDUHG WR WKDW RI )< '6( EURDG LQGH[
RSHQHQG PXWXDO IXQGV XS WR HQG -XQH
'6(; DQG &6( DOOVKDUH SULFH LQGH[ KDYH
%HVLGHV WKH FRPSDQ\ KDV ÀRDWHG YDULRXV
LQFUHDVHGE\SHUFHQWDQGSHUFHQWWR
UHJXODU DQG VSHFLDO W\SHV RI PXWXDO IXQGV DV
DQG UHVSHFWLYHO\ LQ )< DV
ZHOO 7KH QHW LQYHVWPHQW LQ SRUWIROLRV RI WKH
ZHOO7DEOHDQG
WZHQW\WKUHH PXWXDO IXQGV RI WKH FRPSDQ\
1RQ5HVLGHQW3RUWIROLR,QYHVWPHQW VWRRGDW%'7ELOOLRQLQ)<
*URVV LQYHVWPHQW LQÀRZ LQ VKDUHV 7KH ,67&/ HPHUJHG DV WKH ODUJHVW
DQGVHFXULWLHVRIWKHVWRFNH[FKDQJHVE\QRQ VWRFNEURNHU LQ WKH FRXQWU\ ZLWK WRWDO WXUQRYHU
5HVLGHQWV WKURXJK 1RQUHVLGHQW ,QYHVWRUV¶ RI %'7 ELOOLRQ LQ )< ZKLFK ZDV
)LQDQFLDO0DUNHWV &KDSWHU
SHUFHQW RI WRWDO WXUQRYHU RI ERWK '6( DQG DQG ([FKDQJH &RPPLVVLRQ $OWHUQDWLYH
&6(7KHSDUHQW,&%LWVHOIVROGXQLWFHUWL¿FDWHV ,QYHVWPHQW 5XOHV KDV EHHQ
DPRXQWLQJ%'7ELOOLRQDJDLQVWUHSXUFKDVH IRUPXODWHG
RIXQLWFHUWL¿FDWHVDPRXQWLQJ%'7ELOOLRQLQ
Ɣ :LWK D YLHZ WR EULQJLQJ WUDQVSDUHQF\ LQ
)<7KHGHSRVLWUHFHLYHGDQGORDQVDSSURYHG
WKHWUDQVDFWLRQVRIWKHFDSLWDOPDUNHWD
E\ WKH ,&% VWRRG DW %'7 ELOOLRQ DQG %'7
PRGHUQ VXUYHLOODQFH V\VWHP KDV EHHQ
ELOOLRQLQLQYHVWPHQWDFFRXQWVRILQYHVWRUV
LQVWDOOHG
LQ)<7RWDOFRPPLWPHQWIRULQYHVWPHQWPDGH
E\WKH,&%LQ)<VWRRGDW%'7ELOOLRQ Ɣ ,QRUGHUWRHVWDEOLVKD6PDOO&DS3ODWIRUP
RI ZKLFK LQYHVWPHQW LQ HTXLW\ ZDV %'7 WR IDFLOLWDWH FDSLWDO IRUPDWLRQ RI VPDOO
ELOOLRQ DQG SXUFKDVH RI GHEHQWXUHV ZDV %'7 DQG PHGLXP HQWHUSULVHV %DQJODGHVK
ELOOLRQ 7KH WRWDO DPRXQW RI FRPPLWPHQW 6HFXULWLHV DQG ([FKDQJH &RPPLVVLRQ
ZDV%'7ELOOLRQLQ)< 4XDOL¿HG,QYHVWRU2ႇHUE\6PDOO&DSLWDO
6FKHGXOHG %DQNV ,QYHVWPHQWV LQ &DSLWDO &RPSDQLHV 5XOHV KDV EHHQ
0DUNHW6HFXULWLHV IRUPXODWHG
+ROGLQJV RI FDSLWDO PDUNHW DVVHWV Ɣ %DQJODGHVK 6HFXULWLHV DQG ([FKDQJH
HTXLWLHVGHEHQWXUHVH[FOXGLQJLQYHVWPHQWRQ &RPPLVVLRQ()75XOHVKDVDOVR
%DQJODGHVK *RYHUQPHQW ,VODPLF ,QYHVWPHQW EHHQIRUPXODWHGWRODXQFKDQHZSURGXFW
%RQG%*,,%E\WKHVFKHGXOHGEDQNVVWRRGDW ([FKDQJH7UDGHG)XQG()7
%'7 ELOOLRQ DW WKH HQG RI -XQH DV
DJDLQVW %'7 ELOOLRQ DW WKH HQG RI -XQH Ɣ %HVLGHV WR HQKDQFH WHFKQLFDO DQG
2XWVWDQGLQJDGYDQFHVRIWKHVFKHGXOHG SURIHVVLRQDO FDSDFLWLHV RI VWRFN
EDQNVDJDLQVWVKDUHVDQGVHFXULWLHVDPRXQWHG H[FKDQJH %DQJODGHVK 6HFXULWLHV DQG
WR %'7 ELOOLRQ DW WKH HQG RI -XQH ([FKDQJH&RPPLVVLRQZLOOFRQWLQXHWKH
ZKLFKZDV%'7ELOOLRQDWWKHVDPHSHULRG LQLWLDWLYHVWR¿QGVWUDWHJLFSDUWQHUVXQGHU
RIWKHSUHYLRXV\HDU WKHGHPXWXDOL]DWLRQODZ
&KDSWHU )LQDQFLDO0DUNHWV
SHUFHQW WUDQVSRUW DQG FRPPXQLFDWLRQ 3ULYDWH FRPPHUFLDO EDQNV 3&%V
SHUFHQW DQG RWKHU VHFWRUV SHUFHQW KDG WKH PDMRU VKDUHV SHUFHQW LQ WKH
LQ )< 6HFWRUZLVH FRQWULEXWLRQV RI WRWDO WRWDO RXWVWDQGLQJ ORDQV DPRXQWLQJ WR %'7
DGYDQFHVDUHUHSRUWHGLQ&KDUW ELOOLRQ DV RI HQG -XQH PDNLQJ
WKHP PDMRU SOD\HUV LQ LQGXVWULDO WHUP OHQGLQJ
,QGXVWULDO 7HUP /RDQV RI %DQNV DQG
7DEOHDQG&KDUW7KRXJKVL[6&%V
)LQDQFLDO,QVWLWXWLRQV
DQG WZR VSHFLDOLVHG EDQNV WRJHWKHU KDG
'LVEXUVHPHQW RI LQGXVWULDO WHUP ORDQV SHUFHQWVKDUHVRIRXWVWDQGLQJORDQVZLWKYHU\
E\ EDQNV DQG ¿QDQFLDO LQVWLWXWLRQV GHFUHDVHG KLJK OHYHO RI RYHUGXH ORDQV WKHLU DFWXDO UROH
E\ SHUFHQW WR %'7 ELOOLRQ LQ )< LQ FXUUHQW OHQGLQJ ZDV TXLWH PLQRU DV WKH\
+RZHYHU WKH UHFRYHULHV LQFUHDVHG E\ GLVEXUVHG RQO\ %'7 ELOOLRQ SHUFHQW
7DEOH,QGXVWULDO7HUP/RDQVRI%DQNVDQG)LQDQFLDO,QVWLWXWLRQV
ELOOLRQ%'7
2YHUGXHDVRI
'LVEXUVHPHQW 5HFRYHU\ 2XWVWDQGLQJ 2YHUGXH
/HQGHU RXWVWDQGLQJ
)< )< )< )< )< )< )< )< )< )<
6&%V
3&%V
)RUHLJQEDQNV
6SHFLDOLVHGEDQNV
%.%5$.8%
)LQDQFLDOLQVWLWXWLRQV
7RWDO
6RXUFH60(DQG6SHFLDO3URJUDPPHV'HSDUWPHQW%DQJODGHVK%DQN
)LQDQFLDO0DUNHWV &KDSWHU
&KDSWHU )LQDQFLDO0DUNHWV
RI 86' PLOOLRQ ,'$ 86' PLOOLRQ ZDVWHPDQDJHPHQWKLJKZD\V H[SUHVVZD\V
DQGWKH*RYHUQPHQWRI%DQJODGHVK86' DLUSRUWV ZDWHU VXSSO\ GLVWULEXWLRQ LQGXVWULDO
PLOOLRQ ZDV VDQFWLRQHG DQG WKH WHQXUH RI WKH HVWDWHV SDUNVVRFLDOVHFWRUDQGLQIRUPDWLRQ
SURMHFWZDVH[WHQGHGXSWR'HFHPEHU WHFKQRORJ\ 7KH SURSRVHG WHQXUH RI ,3)),,
3URMHFWLV\HDUVLHIURP-XO\WR-XQH
,W LV ZRUWK PHQWLRQLQJ WKDW ,3)) KDV &XUUHQWO\WKLVSURMHFWLVDZDLWLQJDSSURYDO
EHHQ DEOH WR GLVEXUVH SHUFHQW %'7 IURPWKH*RYHUQPHQWRI%DQJODGHVK
ELOOLRQHTXLYDOHQWWR86'PLOOLRQRILWVRQ
(TXLW\DQG(QWUHSUHQHXUVKLS)XQG(()
OHQGLQJFRPSRQHQWWR3RZHU*HQHUDWLRQ3RUW
'HYHORSPHQW :DWHU 6XSSO\ DQG 'LVWULEXWLRQ (TXLW\ DQG (QWUHSUHQHXUVKLS )XQG
,QIRUPDWLRQ 7HFKQRORJ\ DQG 6RFLDO 6HFWRU WLOO (() ZDV IRUPHG E\ WKH JRYHUQPHQW ZLWK
'HFHPEHU 2I ZKLFK %'7 ELOOLRQ EXGJHWDU\DOORFDWLRQRI%'7ELOOLRQLQ)<
HTXLYDOHQWWR86'PLOOLRQZHUHGLVEXUVHG WR HQFRXUDJH LQYHVWPHQWV LQ WKH ULVN\ EXW
WRWZHOYHSRZHUSODQWVKDYLQJFDSDFLW\RI SURVSHFWLYH DJUREDVHGIRRG SURFHVVLQJ DQG
0:$OOWKHSRZHUSODQWVFRQWULEXWLQJSRZHUWR ,7 VHFWRU SURMHFWV $ VXE DJHQF\ DJUHHPHQW
WKH QDWLRQDO JULG RI %'7 ELOOLRQ HTXLYDOHQW UHJDUGLQJWKHWUDQVIHURIRSHUDWLRQDODFWLYLWLHVRI
WR 86' PLOOLRQ ZHUH GLVEXUVHG WR DQ (()KDVEHHQVLJQHGRQ-XQHEHWZHHQ
LQODQG FRQWDLQHU GHSRW RQH MHWW\ DQG RQH GU\ %DQJODGHVK %DQN %% DQG ,QYHVWPHQW
&RUSRUDWLRQ RI %DQJODGHVK ,&% 8QGHU
GRFN %'7 ELOOLRQ HTXLYDOHQW WR 86'
PLOOLRQ ZHUH GLVEXUVHG WR RQH QDWLRQZLGH WKLV DJUHHPHQW ,&% LV QRZ SHUIRUPLQJ WKH
WHOHFRPPXQLFDWLRQ WUDQVPLVVLRQ QHWZRUN RSHUDWLRQDODFWLYLWLHVRI(()ZKLOH(()8QLWRI
SURMHFW DQG RQH QDWLRQZLGH RSWLFDO ¿EHU %DQJODGHVK%DQNLVGRLQJWKHDFWLYLWLHVUHODWLQJ
WR SROLF\ IRUPXODWLRQ IXQG PDQDJHPHQW DQG
QHWZRUN%'7ELOOLRQHTXLYDOHQWWR86'
SHUIRUPDQFHPRQLWRULQJ
PLOOLRQZHUHGLVEXUVHGWRRQHKRVSLWDODQG%'7
ELOOLRQ HTXLYDOHQW WR 86' PLOOLRQ ZHUH 6R IDU %'7 ELOOLRQ KDV EHHQ
KDQGHGRYHUWRWKUHHZDWHUWUHDWPHQWSODQWV UHOHDVHGWRWKHIXQGLQGLႇHUHQW¿VFDO\HDUV8SWR
-XQHZLWKWKHSURMHFWFRVWRI%'7
$ IROORZRQ SURMHFW WLWOHG ,3)),,
ELOOLRQDWRWDORISURMHFWVLQFOXGLQJ
3URMHFW KDV EHHQ WDNHQ E\ WKH JRYHUQPHQW
DJUREDVHGIRRG SURFHVVLQJ SURMHFWV DQG
RI %DQJODGHVK ZLWK WKH ¿QDQFLDO VXSSRUW
,7SURMHFWVJRW(()VDQFWLRQDWGLႇHUHQWVWDJHV
RI WKH :RUOG %DQN ZLWK D YLHZ WR FUHDWLQJ D
RIGLVEXUVHPHQWLQYROYLQJ(()VXSSRUWRI%'7
VXVWDLQDEOHSODWIRUPIRUORQJWHUP¿QDQFLQJLQ
ELOOLRQ &XPXODWLYH HTXLW\ GLVEXUVHPHQW
LQIUDVWUXFWXUH DQG IXUWKHU VWUHQJWKHQLQJ VNLOOV
DQG DELOLWLHV RI WKH SULYDWH VHFWRU WR ¿OO XS WKH VWRRG DW %'7 ELOOLRQ DW WKH HQG RI )<
VXEVWDQWLDO LQIUDVWUXFWXUH JDS LQ %DQJODGHVK DJDLQVW WRWDO IXQG GLVEXUVHPHQW RI %'7
7KH HVWLPDWHG FRVW RI ,3)),, SURMHFW LV 86 ELOOLRQIURPWKHJRYHUQPHQW7LOOQRZ(()
PLOOLRQ ,'$ 86' PLOOLRQ DQG VXSSRUWHG FRPSDQLHV DYDLOHG VKDUH EX\EDFN
WKH JRYHUQPHQW RI %DQJODGHVK 86' IDFLOLWLHV SDUWLDOO\ RU IXOO\ WR WKH WXQH RI %'7
PLOOLRQ 7KH HOLJLEOH VHFWRUV IRU ¿QDQFLQJ ELOOLRQ (PSOR\PHQW RSSRUWXQLW\ KDV EHHQ
XQGHU ,3)),, 3URMHFW ZLOO LQFOXGH SRZHU SRUW FUHDWHGIRUSHRSOHLQWKH(()DVVLVWHG
GHYHORSPHQWHQYLURQPHQWDOLQGXVWULDO VROLG SURMHFWV :RUOG FODVV VRIWZDUH GHYHORSHG E\
)LQDQFLDO0DUNHWV &KDSWHU
(() DVVLVWHG ,&7 SURMHFWV DUH EHLQJ XVHG LQ 7DEOH 2XWVWDQGLQJ+RXVLQJ/RDQV
WKHGRPHVWLFPDUNHWDQGWKHVHDUHDOVREHLQJ ELOOLRQ%'7
2XWVWDQGLQJDVRIHQG-XQH
H[SRUWHG5XUDOLQIUDVWUXFWXUHVKDYHDOVREHHQ /HQGHUV
)< )< )<3
GHYHORSHG GXH WR LPSOHPHQWDWLRQ RI WKH (() D 6SHFLDOLVHGKRXVLQJ¿QDQFH
DJUREDVHGSURMHFWV SURYLGHUV
L +%)&
+RXVLQJ)LQDQFH LL 'HOWD%UDF+RXVLQJ)LQDQFH
LLL1DWLRQDO+RXVLQJ)LQDQFH
7RWDORXWVWDQGLQJRIKRXVLQJORDQVIURP E %DQNV
EDQNVDQG¿QDQFLDOLQVWLWXWLRQVDVRIHQG-XQH L 3&%V
DPRXQWHG WR %'7 ELOOLRQ 7DEOH LL 6&%V
LLL2WKHUEDQNVIRUHLJQDQG
ZKLFK ZDV SHUFHQW RI WRWDO FUHGLW WR VSHFLDOLVHG
WKH SULYDWH VHFWRU ,Q UHFHQW \HDUV VLJQL¿FDQW F 2WKHU¿QDQFLDOLQVWLWXWLRQV
&KDSWHU )LQDQFLDO0DUNHWV