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For investors seeking the opportunity to potentially earn higher than the term deposit rate and the highest possible credit rating1 on the return of their capital at maturity, there is now a new alternative - Generator Income Notes.
Generator Income Notes2 can offer the following benefits
- Target income of 7.4% p.a. initially (i.e. 2% over bank bill swap rate)3
- Expected AAA rated backing for the return of your principal at Maturity by Standard & Poor's4
- An experienced and committed manager looking after the underlying portfolios
- Potential for an additional amount at maturity
- Access to your funds prior to maturity5 - expected listing on the ASX
- Diversification
- Initial Public Offering
| Key dates |
| Open Date |
16 November 2004
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| Close Date |
9 December 2004 |
| Issue Date |
17 December 2004 |
| Expected commencement of trading on the ASX |
24 December 2004 |
| Date of first income payment |
8 April 2005 |
| Maturity Date |
8 October 2011
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These dates and times are indicative only. Generator reserves the right to vary the date and times of the Offer, which includes closing the offer early or extending it, without prior notice, and to accept late applications.
What are Generator Income Notes?
Generator Income Notes are structured income investments which receive their return and risk from an investment in the Aria Notes. Generator will use the proceeds of issuing Generator Income Notes to purchase Aria Notes from Aria. The Aria Notes are wholesale investments, managed by credit market leaders, AXA Investment Managers Paris S.A.(AXA IM)6, and are available only to institutional investors.
Generator Income Notes can offer the following benefits:
Target income of 7.4% p. a initially (i. e. 2% over bank bill swap rate)3
This is a floating rate security, meaning that if interest rates in Australia rise or fall, Generator Income Notes ' income will rise or fall with them. Generator Income Notes ' offer this higher than "risk- free " rate of return by investing in the corporate debt of approximately 140 companies. If there are losses in the underlying portfolios, the
level of income may fall.
Expected AAA rated backing for the return of your principal at maturity by Standard & Poor's
To put this in context, analysis by the Macquarie Group based on various industry data concluded that this AAA rated backing would have been sufficient to survive the 1930s Great Depression,
a global economic crisis the likes of which has never even come close to being repeated7.
An experienced and committed manager looking after the underlying investments
Generator has chosen AXA IM6 to manage and protect the underlying portfolios from losses. AXA IM have substantial skills and experience and will manage the underlying portfolios to minimise the risk of
falls in the level of the income of this investment.
Potential for an additional amount at maturity
Depending upon credit market conditions and pricing of the investment, Generator Income Notes may pay an additional amount at maturity (which is expected to be 8 October 2011). The potential size of this additional amount will be announced following the issue of Generator Income Notes.
Access to your funds prior to maturity - expected listing on the Australian Stock Exchange (ASX)
As Generator Income Notes are expected to list on the ASX, investors will have the opportunity to exit their investment prior to maturity provided there is a liquid secondary market. This may provide more flexibility than some other income producing investments such as term deposits.
Diversification
Generator Income Notes draw their income by investing in actively managed portfolios referencing the corporate debt of over 140 international companies including a small portion of Australian companies. That is, they provide investors with a source of Australian dollar income, but with diversification away from the risk of the Australian economy receding.
Initial Public Offering
Generator Income Notes provide a unique opportunity for investors seeking capital preservation, but also seeking the opportunity to potentially earn a higher rate of income than from term deposits and similar income producing investments. Generator Income Notes also offer flexibility and diversification.
1. Standard & Poor' s ( S& P) highest credit rating is AAA. Preliminary ratings from S& P of the
Generator Income Notes are expected to be made available during the offer period when
available and can be viewed on the Generator website, www. macquarie.com.au/generator
2. Generator Income notes is offered by Generator Investments Australia Limited ABN 37 103 116 954 as trustee for Generator Income Trust (Generator)
3. BBSW was 5.4% as at 26 October 2004.
4. The offer of Generator Income Notes pursuant to the Prospectus is conditional on obtaining an S& P rating, on the Issue Date ( which is expected to be 17 December 2004) of AAA on
return of capital at maturity (which is expected to be 8 October 2011). The offer will not proceed if the Generator Income Notes fail to receive this rating.
5. Provided there is a liquid secondary market.
6. AXA IM is not the Manager of the Generator Income Trust. AXA IM manages ARIA Notes, a wholesale instrument into which Generator Income Trust invests the proceeds of Generator Income Notes.
7. It is important to note the AAA rated backing for the return of your principal does not relate to income and is not a guarantee or other support by any person, including Macquarie Bank Limited.
Macquarie Equities Limited ABN 41 002 574 923 (MEL) trading as Macquarie Financial Services, Participant of Australian Stock Exchange Group, Australian Financial Services Licence No. 237504, Level 18, 20 Bond Street, Sydney NSW 2000.
This advice has been prepared by MEL and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.
The offer relating to Generator Income Notes issued by Generator Investments Australia Ltd as trustee of Generator Income Trust is made in the Generator Income Notes Prospectus dated 2 November 2004. Generator Investments Australia Ltd is a related body corporate of MEL. Investments in Macquarie Generator Income Notes can only be made by completing the application form that accompanies the Prospectus. This notice is not a prospectus, and does not constitute an offer of securities. Generator Investments Australia Ltd has lodged a copy of the prospectus with ASIC in connection with the offer of Generator Income Notes. The lead manager in relation to the Generator Income Notes offer is MEL who will receive a fee for acting in that capacity. MEL will also receive a fee for each application for Generator Income Notes it processes.
Other than Macquarie Bank Limited ABN 46 008 583 542 (MBL), any Macquarie Group entity noted on this page is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). That entity's obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that entity, unless noted otherwise.
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